SACRAMENTO, Calif. _ Three years ago California Treasurer Fiona Ma asked a California public employee to help uncover wasteful spending and nepotism at a tax agency that was collecting more than $60 billion a year in revenue.
Mark DeSio delivered, funneling records to the state auditor, Finance Department and State Personnel Board for what became damning investigations into the California Board of Equalization.
Then DeSio lost his job.
Ma today is trying to make things right for DeSio, a former communications director for the Board of Equalization who was dismissed by Gov. Jerry Brown's administration in October 2017. Ma has hired DeSio in her office, and she's been testifying on his behalf in DeSio's lawsuit over his termination.
From her point of view, DeSio provided critical information that contributed to a vote in the Legislature that stripped the Board of Equalization of almost all of its responsibilities and handed the work to a new department controlled by the governor's office.
"Without people coming forward, nobody would be on the record, and that's why this (tax board) ran amok," said Ma, who was an elected member of the Board of Equalization from 2014 to 2018.
She's also been airing concepts for new laws to shield government whistleblowers based on her experience working with him.
Ma has been talking with the California Employment Lawyers Association about obstacles government whistleblowers face, which can include a fairly intricate series of regulations that must be followed before someone can file a wrongful termination lawsuit.
DeSio, for instance, filed a complaint with the State Personnel Board before being cleared to file a lawsuit. It cost him time, and money.
"State workers have to go through all these additional hoops," said Mariko Yoshihara, lobbyist for the employment lawyers' association. "There are administrative exhaustion requirement through that process. They lose their rights and there's more scrutiny about who they are as worker."
What happened at the tax agency
The Board of Equalization was a unique agency overseen by a five-member board that both collected taxes and served as the final arbiter of taxpayer disputes. It was created by a voter initiative in 1879, and its mandate grew over decades until it handled about a third of the state's revenue.
The agency was in trouble by the time DeSio joined the agency and Ma became its chairwoman in 2016.
By then State Controller Betty Yee, who also was a member of the board, had published an audit in 2015 charging that it improperly distributed sales tax to local governments. The audit suggested the tax agency could not execute its core responsibility of collecting and allocating tax revenue.
The Sacramento Bee, meanwhile, uncovered questionable purchasing practices, including contracts that allowed former Board of Equalization Chairman Jerome Horton to decorate his office $130,000 worth of designer furniture.
Other news stories by Bloomberg BNA highlighted conflicts of interest that emerged when companies donated to charities favored by tax board members.
Ma's turn as chairwoman gave her more power to set agendas and demand information about hiring and pay. She used it to call for outside audits and to investigate raises that were handed to a group of executives without notice to elected board members.
A February 2017 letter to state Auditor Elaine Howle identified DeSio as a source, and as a public employee who felt threatened by another elected board member.
In March 2017, Brown's Finance Department published an audit that charged Board of Equalization members had misused public employees for events that appeared designed to promoted politicians, including a "Connecting Women to Power" summit where state workers parked cars. It also found that Horton opened a call center in his district without properly informing other board members.
Finance Department investigators interviewed more than 70 employees, according to the report. DeSio as communications director managed the agency's external affairs division. In that role, he supplied information about the call center and the use of public information employees for events that appeared to be political, Ma said. DeSio also arranged for Finance Department auditors to attend the questionable events, Ma said.
Another May 2017 message from Ma to Howle and several other state government leaders cited DeSio in a description of questionable hiring at a Board of Equalization office. Ma's letter alleged that agency staff waited until DeSio was on a medical leave to push through job approvals he would have rejected.
"This is the latest example of why our agency is in complete disarray," Ma wrote.
The ax came down on the Board of Equalization in June 2017, when the Legislature gutted it with a surprise bill connected to the state budget.
In the Board of Equalization's place, the Legislature created the California Department of Tax and Fee Administration. Unlike the Board of Equalization, the new tax department reports to the Governor's Office.
DeSio was dismissed soon after that reorganization.
'It's emphatic that he was a whistleblower'
The Department of Tax and Fee Administration declined to comment on DeSio's lawsuit. In court documents, the department denies DeSio's allegation that he was punished for cooperating with the investigations.
As the department's communications director, DeSio held an at-will job as a political appointee that allowed the governor's office to dismiss him at any time.
Ma believes DeSio's dismissal was retaliation for funneling information to her, as well to investigators at the Department of Justice, State Personnel Board and Finance Department.
"I knew he would get retaliated against based on the culture of the organization," said Ma, who recently was deposed as a witness in DeSio's civil lawsuit.
He struggled to find work with public agencies for about year after the Department of Tax and Fee Administration dismissed him.
"He was too hot," Ma said, meaning other government agencies viewed DeSio as untrustworthy because he participated in the audits.
DeSio declined to comment for this story. His lawsuit is unfolding in Sacramento Superior Court.
His attorney, Erik Roper, said officials from the Finance Department and auditor's office have described DeSio as a whistleblower in depositions.
"It's confirmed. It's emphatic that he was a whistleblower," Roper said.
California's Whistleblower Protection Act forbids officials from retaliating against any employee who raises a complaint about improper activities.
But, that doesn't necessarily prevent a manager from laying off someone who provides information to auditors or government investigators.
As a rule, the State Auditor's Office will not confirm or deny that someone is a source for its investigations. The worker must report suspected retaliation to the State Personnel Board.
Then, the worker would be free to provide evidence that he or she provided information about misconduct to investigators. That evidence could lead the State Personnel Board to order the worker's reinstatement to his or her job, or it could help the employee win damages in a civil lawsuit.
Ma considered DeSio's experience to be eye-opening for her. She wrote a letter to Attorney General Xavier Becerra in June 2018 complaining that state attorneys are working for the state in fighting DeSio's lawsuit instead of defending DeSio.
She acknowledged Becerra's office is charged with defending state departments in court, but wrote, "After all that Mark did to report abuses within the government and to bring about much needed reforms _ including working with your office as a whistleblower _ it is unconscionable that the DOJ would represent these agencies against him."
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