Beau Goldie put on his straightest face last week and told the Santa Clara Valley Water District board that RMC Water and Environment has been a fine consultant. The CEO’s job has hung in the balance recently, with the board reportedly conducting multiple performance reviews in closed session, and yet Goldie has been particularly bullish.
The CEO has aggressively defended RMC’s work for the past six months, despite internal allegations of improper billing by the company over the previous year and a half.
San Jose Inside has published several reports on the matter, touching on billing issues, the CEO's recent trip to Georgia and as questions surrounding Goldie’s decision not to divulge potential conflicts of interest with RMC: one of his deputies at the district, Melanie Richardson, is married to an RMC part-owner; and the firm was involved in a Monterey County corruption scandal.
None of these matters were disclosed this spring, when Goldie went to the board of directors for authorization to exclusively negotiate single-source agreements on a groundwater recycling plant, with RMC slated to receive the largest piece.
Despite Goldie and staff’s reassurances at the Oct. 27 board meeting that everything has been handled properly—chief financial officer Najon Chu reported not a single anomaly or irregularity in RMC invoices related to an East San Jose watershed project—the board referred the matter to its audit committee to take a closer look.
San Jose Inside had requested an interview with Goldie for nearly two months, and last Thursday the district consented on the condition it could video record the interview. An unusual request, spokesman Marty Grimes said the district wanted “to have an irrefutable, complete record of what is said.” The implication was that the CEO was concerned about being misquoted.
As it turns out, it’s the district that is now keeping the public from seeing a complete record of that conversation.
A little more than a half hour into the interview, Goldie was presented a document titled, “Written Notice of Recommended Disciplinary Action.” In the internal memo, dated Nov. 29, 2010, Marc Klemencic, a now-retired chief operating officer, details more than a dozen inappropriate emails that civil engineer Lisa Fleming sent to other district staff members from 2007 to 2009.
The messages, which appear to have been shared by numerous district employees, “contained profanity and nudity and derogatory commentary re: disability, race, sexual orientation, and sexual connotation.” Some of the emails even made fun of rape. Klemencic recommended a weeklong suspension and demotion for Fleming, but sources suggest she got off with a much lighter punishment.
District sources also say that Fleming was far from the only individual misusing her taxpayer-funded work email account.
Goldie refused to discuss the emails, calling them a “personnel matter,” and the district took the extraordinary step of redacting a five-minute portion of the video interview focusing on the inappropriate emails and the culture of the district. All that remains is a message that states: “Brief section removed due to confidential nature of reporter’s question.” San Jose Inside has challenged the district’s use of government exemptions to eliminate the entire discussion, but legal counsel Stan Yamamoto has yet to provide a response.
However, an audio recording of the interview, conducted with the district’s knowledge, features Goldie admitting that he managed many of the people who took part in the illicit email chain during his time as a deputy operating officer. According to records provided by the district, Goldie held that position from May 2004 until January 2009, when he took over as chief operating officer for five months before assuming the position of CEO.
Goldie quickly became agitated by questions about the emails, wondering how they were relevant to an interview about RMC. When told they could provide insight into the culture of the district, he disagreed.
“I think the culture of the district is such that we have policies and followed them and when somebody violates them, we take action,” Goldie said.
Sources say some district employees were forced into early retirement and others may have even been terminated as a result of the emails, but at least three individuals included in Fleming’s email chain were promoted not long after Klemencic’s November 2010 discipline memo.
Reuben Castro, a district employee since 2001, was promoted to a senior maintenance position in May 2011—just six months after Klemencic advised discipline for Fleming. Kristen O’Kane, a level II environmental planner at the time of the emails, was promoted to field operations unit manager in March 2012. Jennifer Castillo received a promotion—not in duties, but in title and pay only—from field operations to environmental services manager in April 2012.
Goldie fumbled over an answer when asked if promotions were the proper response for people involved in sending emails that included pornography and racist/homophobic jokes. He then added that he didn’t think any of the emails should be “career-ending.”
Other current district employees who were involved in the email chain include: Jay Lee, a senior maintenance worker; Chad Grande, a recently promoted field operations unit manager; and Joseph Aguilera, a field operations administrator.
The district maintains that discipline was handed out, and it’s possible that some employees were merely recipients. But staffers who spoke under the condition of anonymity, out of fear of retaliation, say that Goldie has a list of allies he has built up over his 31 years with the district, and some of the people involved in the emails may have received preferential treatment in the process.
“It’s a sense of entitlement, like, ‘We’ve been here so long we’ve got our fingers wrapped around this whole agency,’” says a source. “It’s like nothing can happen to them and they feel like they own the place because they’ve been there so long.”
Below is the redacted video interview with Water District CEO Beau Goldie. District spokesman Marty Grimes is off camera.