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The executive director of the California Public Utilities Commission, Alice Stebbins, who was placed on indefinite leave last week, stands accused of nepotism in hiring. A new State Personnel Department report takes issue with six upper management positions that went to Stebbins’ former colleagues. It also faulted the commission for lacking an anti-nepotism policy.

Stebbins’ lawyer called the report “a politically-motivated witch hunt done by a longtime friend and political ally of [CPUC] President Batjer.” Karl Olson told Current that even accepting the report’s conclusions, they fall short of a basis for firing Stebbins.

Last week, Olson charged that Stebbins was being forced out for pushing the commission to collect $200 million in unpaid water, communication and energy utility charges. His Aug. 4 letter to the CPUC also alleges her dismissal was discussed behind closed doors in violation of the Bagley Keene open meetings act.

The final State Personnel Board report also criticizes the CPUC’s Human Resources Department for failing to ensure the qualifications of those on hiring panels and to inform Stebbins of the Commission’s hiring rules.

A requisite review of the board’s final findings has been launched, CPUC President Marybel Batjer stated in an Aug. 10 letter to staff. Corrective actions are to include “implementing new human resources procedures and controls where needed to ensure all civil service rules are followed at all levels of the agency, including leadership.”

The Commission has not yet responded to the letter Olson sent last week. An Aug. 17 public hearing has been set by the CPUC to vote on whether to dismiss Stebbins, he said.

Report Calls Stebbins Hires Short on Qualifications

The board’s report concluded that Stebbins hired former colleagues who were inferior to their competition. The most egregious case cited was the hiring of Bernard Azevedo as CPUC Assistant Executive Director.

The report stated that Azevedo lacked requisite budget experience and was “less qualified” than the competition. Then four months after he was hired in March 2019, his monthly salary was raised nearly 50%, from $10,100 to $14,922 on the basis that his job had expanded.

Stebbins, according to the report, defended the raise saying she transferred additional functions to Azevedo “to assist her with an overwhelming workload.”

The state personnel report said the expanded assistance executive director job functions required the position be re-advertised to attract a sizable pool of skilled candidates.

The report concluded the “irregularities paint a picture of a deliberate effort on the part of CPUC and/or [Stebbins] to circumvent civil service examination and appointment requirements.”

Azevedo and Stebbins worked together at the California Air Resources Board and State Water Control Resources Board. A few of her other CPUC hires came from one of the two agencies.

In another two positions, the job descriptions were rewritten to better fit the pre-selected candidates. That is common practice at state agencies. It said the “two unqualified external candidates were selected over two highly qualified internal candidates.”

Two other former Stebbins’ colleagues were put into managerial posts in Sacramento. The hires were criticized because instead of performing high-level policy and project management activities they were given administrative and analyst level duties.

Stebbins also created a Sacramento executive management office in Sacramento. Of nine new hires, four were her former colleagues.

Some CPUC staff in San Francisco balked at being managed by those outside headquarters and with inadequate understanding of their responsibilities.

Director Says She and CPUC Agreed to Revamp

Stebbins rebuts the report’s charges. She said that she and the commissioners together agreed to modernize the CPUC's management structure and put necessary controls in place, including creating deputy executive positions. She added that the existing organizational deficiencies were further exacerbated by Pacific Gas & Electric’s bankruptcy and the devastating wildfires.

The report also criticized the Commission’s HR department for failing to screen the applications.

The report directed the CPUC to put an anti-nepotism policy in place. It also is required to assess whether Stebbins’ hires were made in good faith. The commission is to justify its conclusion, including whether corrective action is needed, within 60 days of the Aug. 6 report.