Taxation Director’s daughter works for Marijuana Division she oversees 

Juice. It’s long been the best means of getting some jobs in Nevada. Friends, lovers and relatives get squeezed into jobs every day in Nevada’s private sector.

In the halls of government, workers are presumably hired for what they know, not who they know. Nevada law is replete with prohibitions, both civil and criminal, on employees managing their relatives.

But Gov. Steve Sisolak is not commenting publicly on the conflict his appointment of Taxation Director Melanie Young earlier this year created for Young and her daughter, Ashley McKenzie Ingersoll Leano, who works in the Taxation Department’s Marijuana Enforcement Division.

Sisolak would not respond to questions, such as whether he was aware Young’s appointment created the conflict with state law.

Young worked at the Taxation Department before her daughter joined the staff in 2018, according to a spokesperson.

“Ms. Leano came from another state agency and was hired to her current position in 2018, prior to Director Young being appointed,” the spokesperson said.

In the event a personnel appointment results in an official supervising a relative, Nevada Administrative Code says the “appointing authority (in this case Sisolak) shall ensure that, as soon as practicable, the employees do not continue to hold positions in which one of the employees is in the direct line of authority of the other employee.”

Direct line of authority ”includes an employee’s immediate supervisor, that supervisor’s supervisor and each subsequent level of supervision all the way up through the employee’s chain of command to the department director,” according to the state employee handbook.

“Upon appointment to Director, Ms. Young delegated appointing authority to the Deputy Director of the Marijuana Enforcement Division as allowed by NAC 284.022,” the spokeswoman said.

The Nevada Administrative Code cited by Young’s spokeswoman does not permit delegation of authority, but rather defines “appointing authority.”

While Nevada officials may be allowed to delegate authority in some instances, the practice is perilous, says Yvonne Nevarez-Goodson, executive director of the State Ethics Commission.

“It creates a similar situation in that the supervisor may show favoritism to the person delegated to supervise the relative,” she said.

Young’s daughter, Leano, is an Auditor I, according to state records. She previously worked as a clerk in the Department of Motor Vehicles and in Parole and Probation, according to Transparent Nevada, a website that tracks state employees.

Leano said via phone she couldn’t discuss working for her mother and directed the Current to the Taxation Department’s spokeswoman.

Young will not say whether the governor knew of the conflict created by her appointment.

Notwithstanding President Trump’s penchant for stocking his staff with friends and relatives, nepotism has long been the bane of government human resource departments.

“The public sector should not operate within the ‘spoils system,’ where the political winners get the spoils,” says Dr. Jayce Farmer of UNLV’s School of Public Policy and Leadership. “Rather, we want to ensure that our public servants are hired and advanced based upon merit. Additionally, officials want to make sure that they are adhering to fair hiring practices. We must use caution to make sure that individuals that are equally or more qualified were not excluded from the job opportunity.”

A Nevada Human Resources webpage says a person “may not be placed into a position that will create a supervisory or managerial relationship or a direct line of authority to an employee if the employee is:

• A spouse, child, parent or sibling of the individual;
• The spouse of a child, parent or sibling of the person;
• An aunt, uncle, niece, nephew, grandparent, grandchild or first cousin of the individual; or
• In a dating relationship with the individual.

State employees are required to complete a form disclosing familial and personal relationships.

Nevada’s Human Resource Services did not respond to requests for data compiled from those forms.

The Nevada Ethics Commission is guided on nepotism matters by the principles of NRS 281A.400, the civil law which prohibits a public officer or employee from seeking or accepting “any gift, service, favor, employment, engagement, emolument or economic opportunity, for the public officer or employer or any person to whom the public officer or employee has a commitment in a private capacity” that would reasonably influence their ability to do their job.

It also prohibits a public officer from using their position to “secure or grant unwarranted privileges, preferences, exemptions or advantages” for the employee or any person to whom they have a “commitment in a private capacity.”

“What we would do, if we were faced with a nepotism question, we would look into that and say what was the hiring structure and see if it was the use of the official’s position that created the opportunity,” says Nevarez-Goodson of the State Ethics Commission. “If you have a relationship with certain persons, family members, and you use your position to create an unwarranted privilege, that’s a violation.”

NRS 281.210, the criminal statute, prohibits a public officer from employing a relative.

“We are mandated by law to turn it over to the Attorney General, if there is criminal activity,” says Nevarez-Goodson.

“While theoretically one could hire a family member and that person could do a good job, you want to ensure that job candidates, regardless of the position, are fully qualified,” says Farmer.

The Auditor I position, which warrants less experience than Auditor II and III, requires a college degree “in accounting or a closely related field,” according to the state, or a mix of educational and work experience.  “Minimal post-secondary coursework of six units in beginning accounting is required.”

It’s unknown whether Leano has the required qualifications.

The Marijuana Enforcement Division, where Leano works, came under fire earlier this year when a state audit revealed Nevada missed out on half a million dollars in tax revenue collected in fiscal year 2018 by the Division.

Auditors compared January through June 2018 sales tax returns for 10 marijuana cultivators and five dispensaries with data from the industry’s seed-to-sale tracking system, METRC.

METRC data did not jibe with wholesale tax returns 70 percent of the time, according to the audit and retail tax returns “did not reasonably compare about 57% of the time.”

“For sales tax returns filed by dispensaries, METRC data did not reasonably compare about 60% of the time,” the audit said.

A six-month report on the status of audit recommendations is due Dec. 7.

“Nepotism at the very least can give the impression of unfair practices in enforcement,” Farmer says. “In general, when it comes to employing one’s family member within the public sector, especially within areas that pertain to finance and regulation, you must use extreme caution.”

Perception v. Reality

Farmer says perception can be just as important as reality, especially in the public sector.

“Obviously, you want the job candidate to be qualified and capable to do the job. However, you want to make sure that your government is maintaining its accountability and the appearance of its accountability to the people that it serves,” he says.

“Likewise, public officials should go above and beyond to make sure that they are upholding the highest standards of ethics,” says Farmer. “This is especially the case when you are dealing with financial and regulatory agencies such as Taxation and its Marijuana Enforcement Division.”

“One of our goals with having collective bargaining rights is ensuring the state maintains a fair, merit-based process for hiring and promotions,” said Harry Schiffman, an electrician at UNLV and president of AFSCME Local 4041, the union for Nevada state employees.

Assemblyman Skip Daly, a Democrat, says qualifications are key.

“If the person’s qualified, I don’t know if there’s a problem with it,” Daly says. “Perception should be considered but shouldn’t be the deciding factor. I don’t think it makes a difference to open government unless they are trying to hide it.”