The former teacher rose to the position of principal at Southeast Portland's Kelly Elementary School in January 2013 and soon became one of Superintendent Carole Smith's trusted insiders. 

She served as a member of the district's negotiating team during last year's contentious contract talks with teachers. And she played a key role in one of Smith's signature programs, presenting Oct. 27 on the Latino experience at the 2014 National Summit for Courageous Conversation in New Orleans.

Three days later, her star plummeted when Portland police arrested Diaz, 52, at district headquarters on allegations of fourth-degree assault and domestic violence. 

Diaz was marched out of PPS headquarters in handcuffs before other district employees. PPS placed her on paid administrative leave, giving parents, teachers and students at Kelly no more details.

Now, three months after Diaz's very public arrest, Clackamas County prosecutors say they will not charge her after all. The alleged victim, her partner of 17 years, never told police Diaz had hit her. Diaz tells WW the allegations were "malicious" lies that stem from professional jealousy.

"It's been very hard for me to stay silent while my entire career has unfolded in front of me knowing that I haven't done anything wrong," Diaz says.

PPS now has a new problem. The district must decide what to do with Diaz, who could go back to Kelly, a school in the Lents neighborhood that serves a significant population of Russian refugees. Or PPS could send Diaz to another school.

On Dec. 22, Diaz informed PPS she plans to sue the district for invasion of privacy, malicious prosecution, false arrest, intentional infliction of emotional distress, and negligence.

"This is an ongoing confidential personnel matter, and we cannot comment further," says Jon Isaacs, a district spokesman.

"Parents are pretty aggravated that they've been kept in the dark about pretty much everything," says one Kelly parent.

Diaz's troubles started the weekend of Oct. 11 at Milo McIver State Park near Estacada, where she went camping with her partner, Penny Domm, and several other principals for Portland schools.

Almost two weeks later, on Oct. 22, one of those principals, Carol Campbell of Grant High School, told her school's resource officer Diaz and Domm had fought inside their RV during the camping trip. Campbell said she didn't witness a fight but later saw that Domm's "clothes were torn, she had blood on her shirt, and that she was holding her face" as if she'd been hit.

Pam Joyner, then-principal of Hosford Middle School, told the officer she went to the RV and heard screaming. "[Joyner] opened the door and walked in, and when she did she observed Ms. Domm crouched down on the couch….Ms. Diaz was standing over [Domm] with clenched fists." Joyner didn't see Diaz strike Domm, the report says, "but believed that she had."

According to the report, a third principal, Brenda Fox of Lane Middle School, says he heard Domm say, "She fucking hit me."

Fox also told the officer Domm had spoken of "other incidents" with Diaz, who denies this. (Campbell, Joyner and Fox did not respond to WW's request for comment.)

Domm refused to discuss with police what had happened. (Domm has declined through her attorney to respond to WW's questions.)

An officer with the Portland Police Bureau's domestic violence unit, Todd Christensen, followed up. According to police reports, Diaz told Christensen there was never any physical violence and that there had been a "misunderstanding" that evening.

Christensen decided there was probable cause to arrest Diaz anyway.

Edie Rogoway, Diaz's attorney, says the initial report failed to note that the other principals had all been drinking, making them unreliable witnesses. 

Rogoway says PPS—now that Diaz will not be charged—has no basis for taking personnel action against the principal. Rogoway says the district has no reason to delay a decision, but officials appear in no hurry to resolve matters.

“I’m a great educator,” Diaz says. “I want to go back to doing what I do best.”