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Government Insider Trading

Friday May 9th, 2014   •   Posted by K. Lloyd Billingsley at 7:05am PDT   •  

CACapitol_200Insider trading is normally conducted by individuals with access to public companies’ information. But as this report notes, governments also conduct “insider trading in jobs” as shown by the case of Gerardo Lopez, a sergeant-at-arms in the California Senate.

In 2012 Lopez was involved in a gunfight at his house that left one person dead and three injured. Toxicology tests showed that Lopez was on drugs at the time of the gunfight, but Lopez’s boss, chief sergeant-at-arms Tony Beard, hushed up that information. Senate boss Darrell Steinberg duly kept Lopez on the payroll.

As it turns out, Lopez’s wife, Jennifer Delao, works for Steinberg in his policy unit, and Lopez’s mother, Dina Hidalgo, is a big wheel in the Senate’s human resources department. So the Senate is a version of “All in the Family.” When the toxicology report finally emerged, Steinberg fired Lopez but his mother recused herself from involvement in the termination. And Tony Beard, son of a former California Assembly chief sergeant-at-arms, conveniently resigned. Beyond nepotism and secrecy, redundancy is also going on here.

Sergeants-at-arms are supposed to be guards, but actually the California Highway Patrol polices the Capitol building and grounds. As this report notes, the sergeants maintain decorum but also “ease legislators’ lives by providing lifts to and from the airport and running whatever other errands their bosses may need done.” And many others on the legislative payroll are expected to work on campaigns as “in effect taxpayer-financed campaign workers.” Overall the personnel practices are “as arbitrary and opaque as any third-world dictatorship, with no accountability for who gets hired and fired and why.”

Steinberg said he plans to “expeditiously investigate” whether Dina Hidalgo helped family members get jobs in the Senate and claims, “I intend to update the Senate’s personnel policy in a very thorough way.” Taxpayers have good reason to remain doubtful on both counts.

As we previously observed, in November 2012 the ballot featured four measures on taxes and spending. The Senate Governance and Finance Committee held hearings on these measures, and the California Channel gave voters statewide a chance to gain insights from the testimony. Unfortunately, senate President pro Tem Darrell Steinberg blocked citizens’ access by killing the live broadcast. And in a lame apology Steinberg said, “I pride myself on being open and transparent.”

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May 2014