May 13,1998

Ms Meredith J. Khachigian, President
Board of Regents
University of California
300 Lakeside Drive, 22nd floor
Oakland, CA 94612

RE: LOS ALAMOS NATIONAL LABORATORY

Dear friends:

On Friday, May 8, 1998, we conducted a day of briefings, site visits, and a community meeting in Northern New Mexico on the operations and impact of the Laboratory. The visit was at the request of the leadership of the New Mexico Legislature, including the President Pro Tem, Senator Manny Aragon, and the Speaker of the House. Rep. Raymond Sanchez. At the morning briefing, held at the New Mexico Capitol, the Lieutenant Governor joined in welcoming the first-ever joint California-New Mexico legislative proceeding that included the New Mexico House and Senate leadership and Members representing the Los Alamos area.

The New Mexico legislative leadership had approached us to address their concerns regarding the role of the University in managing the Laboratory, outside California's borders; the impact of the Laboratory on New Mexico's economy, educational systems, and employment; and the personnel management issues at the Laboratory, particularly in the context of the lay-offs in 1995. The leadership was particularly concerned that the Laboratory and its immediate local jurisdiction, Los Alamos county, offered a striking contrast to the surrounding communities in such areas as personal and household income, educational level, school funding, health facilities, etc.. The leadership was interested in exploring a cooperative approach to addressing these issues.

The University responded very positively and pro-actively to the issues outlined above. Under the leadership of Dr. Judson King, Provost, University and Laboratory staff met with us personally and assisted us in developing a better understanding of the issues. Dr. King, senior University staff, Dr. John C. Browne, Laboratory Director, and other senior Laboratory staff participated in the activities on May 8, 1998. We are very appreciative of this cooperation and leadership.

At the conclusion of our visit, we have the following initial views. First, we believe that the University should continue to manage the Laboratory. The University has been a good steward with concern for the interest of its neighbors in New Mexico, the Laboratory is integrated into the University's Laboratory system, and the Laboratory allows the University to attract and keep outstanding students, faculty and staff who can provide a response to the Nation's critical needs. We are appreciative of the concerns of New Mexico's leadership that the University is a "distant landlord" that is unable to appreciate and respond to local needs. We have conveyed our commitment to working with the New Mexico Legislature, through a joint task force or Committee, to address these concerns and to strengthen the strong bonds between New Mexico and California on this issue.

Second, we heard extensive testimony on the efforts being made by the Laboratory, the University, and jointly to strengthen New Mexico's economy, education system, and infrastructure. While much remains to be done, we are impressed with recent initiatives, under Dr. John Browne's leadership, to equip northern New Mexico schools, develop a teacher training program, re-structure the Laboratory's procurement program, invest in "conversion" programs to develop a stronger alternative economic base, and community relations. We believe that these efforts must be supported and expanded and we will be addressing them through the legislative and budget processes, in consultation with the President and staff.

Third, we heard a number of Laboratory employees, New Mexico legislators, and others cite specific problems in the personnel management policies and practices at the Laboratory. We heard from University and Laboratory representatives and employees that led us conclude that Laboratory policies and practices governing employees are distinct from those at the other Laboratories and are not directly based on California statutes, administrative laws, and University regulations even though employees sign an oath of loyalty to California. We share the commitment to recruiting and maintaining the highest quality workforce at the University and to providing a safe, fair, and positive work environment. Therefore, we will seek changes including legislation, if necessary to address the specific problems.

More disturbingly, along with senior University and Laboratory staff, including Dr. King, we heard very serious allegations regarding personnel policies, particularly with regards to employees laid-off in 1995. They include the following:

1. Lack of clarity and fairness in the grievance process. We hard that the Laboratory's grievance process permits Laboratory managers and counsels to advise grievance panels, to restrict or deny discovery, and to yield different results from similar complaints.
2. Hiring, lay-off and re-hiring process: There was strong testimony that the 1995 lay-offs, while based on budget concerns, were reflective of management needs, personal biases, or other issues unrelated to the budget. We heard that the laboratory has not hired back employees laid-off in 1995, despite a significant number of hirings since that time. Further, we have seen evidence that the Laboratory utilizes a system of recruitment that emphasizes Limited-term hires that are converted to permanent positions and results in bypassing equal employment and other policies.
3. Whistle-blowers: We were disturbed by testimony that employees have been "black-listed" and unable to find placement, despite Laboratory openings for which they seem suitably qualified, or even with the Laboratory's contractors or sub-contractors.
4. Severance pay: We heard testimony that laid-off employees had to sue the University and the Laboratory in order to secure severance pay, and in the case of re-hire, employees had to retroactively refund the money.
5. Restrictions on health benefits for laid-off employees: We were concerned to hear that the University had restricted or denied health benefits to former employees on the basis that the laid-off employees were utilizing health services at a greater rate than other health plan participants.
6. Upward mobility: We are disturbed by the testimony that we have heard on the lack of a clear process, goals and timetables.
   

Overall, the allegations regarding personnel practices were very disturbing to us. They indicated a pattern of conduct in treating employees, particularly the older and minority staff that were laid-off in 1995 due to budget concerns, that reflects poorly on all Californians.

Therefore, we request that the Laboratory re-instate the laid-off employees or offer them suitable employment opportunities. The Laboratory has hired over a thousand employees since 1995, many for positions for which the employees in question are qualified. Without such action, any settlement offer will result in a significant group of employees, many with decades of service, being left without any meaningful employment opportunities in northern New Mexico. This will yield bitterness, resentment, and continued hostility to California and to the University's role in managing the Laboratory.

As we have stated earlier, we intend to work with you, the University and the Laboratory's leadership and the New Mexico Legislature to strengthen the University's stewardship of the laboratory and to address the concerns that have been raised. Your staff is working to provide us with further information on many of these issues. We would like to meet your and other interested Regents within the next two weeks. We thank you for your attention and response.

Sincerely,

/s/ RICHARD G. POLANCO, Senate Majority Leader and Chair, Latino Legislative Caucus

/s/ DENISE MORENO DUCHENY, Chair Assembly Budget Committee and Vice Chair, Latino Legislative Caucus

c.	Senator John Burton, President Pro-Tem Assemblyman Antonio Villaraigosa, Speaker of the Assembly Members, Board of Regents President Richard C. Atkinson Provost Judson King

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