COMMENTARY: Taxation and Revenue Secretary Demesia Padilla, who’s accused of pressuring her employees to give special treatment to her former client, has a lot of explaining to do.
Padilla tried to inappropriately influence a Taxation and Revenue Department (TRD) audit of Harold’s Grading and Trucking, the business she used to work for, an investigation recently concluded.
Padilla has “flatly” denied the allegations. Martinez administration officials have accused State Auditor Tim Keller, who hired the firm that conducted the investigation, of playing politics. But public records raise serious questions about Padilla’s actions that TRD is refusing to answer.
The evidence against Padilla includes interviews with TRD employees and hours of audio recordings of meetings, Keller says. That evidence has been turned over to Attorney General Hector Balderas for investigation and remains secret.
The tax department did release a 2014 email in which Kevin Sourisseau, then the Audit & Compliance Division deputy director, stated that the audit of Harold’s Trucking “has not received any special consideration from the audit staff.”
“Thank you for your support with this difficult and uncomfortable issue,” he wrote to Lizzy Vedamanikam, then director of the department’s administrative services division. Sourisseau talked with Padilla the day before, but “No changes have been made to the audit,” his email states.
Both employees have since left TRD. Sourisseau now works for Keller’s office.
Sourisseau’s statement that no changes were made might indicate that Padilla didn’t try to influence the audit. Or it could mean she tried, but staff beat back her attempts. I can’t say which. Ben Cloutier, TRD’s spokesman, has ignored my questions.
Seeking understanding, I filed a request in July under the state’s Inspection of Public Records Act for all documents related to the audit. About two months later, TRD gave me 192 pages of emails and other records.
They show that Padilla fought a penalty her office leveled against Harold’s Trucking. The department rejected the company’s protest in spite of Padilla’s pushback.
In one email Sourisseau documents Padilla visiting his office and saying “she believed the discussion and issue has been blown out of proportion.” Sourisseau wrote that Padilla told him she was “only” trying to address the penalty against Harold’s Trucking.
Was Padilla speaking on behalf of Harold’s Trucking or as Sourisseau’s boss? It’s difficult to imagine Sourisseau not feeling pressured during that conversation.
Why did Padilla jump into a situation that created a conflict of interest instead of avoiding it? Couldn’t someone else have done the work on behalf of her former client?
We don’t know. Because TRD isn’t answering questions. Cloutier wouldn’t answer any questions I asked about the 192 pages of records TRD gave me.
Padilla should stay away from audits of former clients. There’s no other way to insulate her staff from feeling inappropriately pressured in such situations.
If there are special circumstances that meant Padilla couldn’t avoid a conflict in this instance, TRD needs to explain why, and tell us how Padilla and her staff navigated the situation.
TRD’s refusal to explain adds to the appearance of impropriety. As long as TRD refuses to answer substantive questions and deflects by lobbing bombs at Keller, I’m inclined to believe the allegations against Padilla.
I’m glad Balderas is reviewing Keller’s investigation.