The state’s utility regulatory agency kept an engineer on the payroll for six years with “almost no work” after a disciplinary incident that led to a brief suspension in 2003, followed by the employee’s repeated and fruitless requests for work after his reinstatement, according to documents obtained by The Mirror.

A labor arbitrator concluded that agency officials knowingly approved false time sheets after the engineer eventually stopped showing up for work.

“I find that the employer deliberately withheld work from the grievant over a 6-year period and was complicit in the grievant’s misconduct by knowingly approving false timesheets,” Lawrence T. Holden Jr. wrote in a ruling involving a labor grievance between the engineer and the former Department of Public Utility Control.

A copy of the arbitrator’s report, completed in June 2010, was obtained Thursday by The Mirror.

The auditors of public accounts reported this week that an effort to recover nearly $25,000 in wages from the engineer is tied up in a labor grievance, but the bulk of the engineer’s story of falling into a labor purgatory was told in the arbitrator’s report that faults the agency’s managers.

“This 23-year employee had a discipline-free record with good performance appraisals at the time of discharge and had been promoted over the years,” Holden wrote.

George Denning, the employee, declined to comment, deferring questions to his union, CSEA/SEIU Local 2001.

“This is an example of management’s outrageous abuse of a dedicated public servant,” said Matt O’Connor, a spokesman for CSEA/SEIU.

Denning was placed on a one-month administrative leave in the fall of 2003  “due to an allegation that he may have hired an employee of a regulated utility to work for him off-hours” — an allegation that would be investigated for nearly six years before being closed with no findings against the engineer.

According to Holden, once Denning returned in October 2003 from one month of administrative leave, the engineer was “informed that he would be given no field work.”

Initially reassigned from the water unit to the gas unit, Denning’s supervisor, Chief of Utility Regulation Steven Cadwallader, gave him “one highly complex assignment which (Denning) successfully completed, and then no assignments thereafter despite repeated pleas by the grievant for work.”

Denning raised the lack of work “during every review period,” but “no work materialized,” Holden wrote, adding that Denning also appealed to the assistant to the DPUC chairman and even arranged some work on his own in another area, the electric unit.

After some assignments, though, “that work stopped as well.”

Meanwhile, Denning’s time cards were being signed by William Palomba, then the DPUC executive director. Starting in about 2005, according to the arbitrator’s report, Denning “began reporting late to work, taking lengthy lunch periods, and leaving early. And thereafter, the problem became even more acute.”

Only after state auditors began investigating the matter in February 2009 in response to an employee whistleblower complaint did Cadwallader institute a “sign in-sign out” policy for Denning and a few others, Holden wrote.

Holden added that that Denning indicated then “that if he was made to sit at his desk without work — and that if he continued to suffer the way he had been suffering — he did not know what he would do.”

After this policy was initiated, Denning was at his desk for his full 35-hour work week, the arbitrator’s report states. Still, Denning was fired in September 2009.

His union, CSEA/SEIU Local 2001 filed a grievance on his behalf, and he was returned to work. Holden’s final ruling, issued in June 2010, returned Denning to his engineering job in the Water Unit. Palomba was issued a letter of reprimand and Cadwallader was suspended for 12 days.

Holden awarded no back pay to Denning to cover the 10 months he was out of work “given the seriousness of his offense.”

“The state’s continuous and malicious persecution of Chip Denning in seeking to take back his wages was bad enough. Now we know they were abusing the whistleblower statute designed to help expose abuses just like this,” said O’Connor, the union spokesman.

“The real story is not the wages paid to Chip but the untold amounts of taxpayer-funded resources spent persecuting him for charges that were never substantiated,” O’Connor said. “Added to that is the complete incompetence of DPUC management who failed to assign Chip work in his area of expertise — work he repeatedly asked for.”

The auditors’ investigation showed that between Jan. 7, 2008 and Feb. 24, 2009 — just before the sign-in policy began — Denning was at his job an average of 3 hours and 15 minutes per work day, and had been paid for 492 hours while not on the job.

“An employee was paid $24,792 for being absent from work,” Auditors John C. Geragosian and Robert M. Ward wrote in an audit of the former DPUC released this week. “There is also a risk that situations such as this can create an environment where employees will abuse time and take advantage of management.”

The state has been trying to recoup the nearly $25,000 paid to Denning between January 2008 and February 2009.

A second grievance was filed by the union contesting the state’s right to the funds. That matter went to a hearing before the Office of Labor Relations this past February and is pending before an arbitrator, according to this week’s auditors’ report.

“This dates back to the former DPUC, and our new agency is now fully engaged working for full restitution and the best solution for taxpayers,” said Dennis Schain, spokesman for the newly created Department of Energy and Environmental Protection, which includes the public utility control agency.

Schain also confirmed that Denning remains employed as an engineer in the Water Unit and currently earns $98,385 per year.

The General Assembly and Gov. Dannel P. Malloy merged the DPUC with the Department of Environmental Protection during the last legislative session.

Kevin DelGobbo, who was named chairman of the Public Utility Control Authority — the governing body of the former DPUC — in January 2009, and who now chairs the Public Utilities Regulatory Authority that helps guide utility regulation functions in the new merged department, could not be reached for comment Thursday.

Though the details of the Denning case transpired during the previous two administrations, under former Govs. John G. Rowland and M. Jodi Rell, Malloy’s office said Thursday it would review the matter.

“The administration is very concerned with the management practices which were observed prior to January of this year, and we are looking in to the situation and exploring what additional steps should be taken to rectify the problem and ensure it won’t happen again,” Malloy spokeswoman Colleen Flanagan said.

The governor told his department heads earlier this week that now that state employees have agreed to provide $1.6 billion in wage, benefit and other concessions over this fiscal year and next, it is crucial that they cut wasteful spending wherever possible.

The governor used those concessions, other spending cuts, and more than $1.5 billion in new taxes to help close the $3.67 billion budget deficit for 2011-12 he inherited upon taking office in January.

“You have got to begin the task in earnest,” Malloy said during Tuesday’s commissioners’ meeting. “You have got to demonstrate your willingness to drive efficiencies.”

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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