January 4th, 2011 5:33 pm | by NIGEL JAQUISS News | Posted In: CLEAN UP, Politics

Kulongoski Wants Outside Counsel to Investigate ODOE; Cites "Potential Conflict of Interest"

Ted Kulongoski

Gov. Ted Kulongoski ratcheted up the pressure today in his desire to see a thorough investigation of the Oregon Department of Energy's contracting practices. Last week, the Oregon Department of Justice completed its investigation into one ODOE contract that involved Gov.-elect John Kitzhaber's longtime companion Cylvia Hayes, finding it "could not prove beyond a reasonable doubt that any state employee committed Official Misconduct in the First or Second degree."

The AG's investigation stemmed from an earlier, never-completed state audit of ODOE. That audit screeched to a halt in August when auditors referred concerns about a contract involving Hayes' company, TEEM Inc., ODOE and another company, R.W. Beck, to Kulongoski's office. The governor then referred the matter to Attorney General John Kroger.

Now, Kulongoski wants a broader probe of the troubled ODOE. Here's an excerpt of his letter [PDF] to Kroger, dated Jan. 4, 2011:

I am writing to request your authorization, pursuant to ORS 180.235, for the Department of Administrative Services to enter into a contract for the services of a special counsel. The purpose of this contract is to conduct an independent personnel review of the contracting practices related to the administration of the Energy Assurance Grant by the Oregon Department of Energy (DOE), as referenced in the letter to me from Department of Justice (DOJ) Chief Counsel Sean Riddell dated December 29, 2010. Given the circumstances of the case that have been shared with my office, I believe that an independent and expeditious review of the records developed by DOJ investigators and any other relevant information is now warranted. The findings of such a review should inform consideration of potential personnel actions. I believe that the public interest would be served best by an independent review that will not be disrupted by the transition to a new administration.

Kulongoski further explained why he prefers that an independent counsel, rather than Kroger's office handle the investigation:

Further, as envisioned in the statute, I believe that if DOJ were to conduct such a personnel review, it would tend to create a perceived conflict of interest. Therefore, I believe that
it is in the best interest of the public to proceed with an independent review led by a special counsel. Specifically, the contract will call for: (1) a review of DOJ's investigation files related to this matter; (2) the collection and review of any additional materials or other information relevant to this matter; and, (3) recommendations to the appropriate appointing authorities regarding employment and personnel actions for the state employees involved in the administration of the Energy Assurance Grant.

Kulongoski's spokewoman, Anna Richter Taylor, says a potential conflict of interest has been brought to Kulongoski's attention but she will not say what that potential conflict is.

"Information shared in a briefing with the governor's staff which is protected by attorney client privilege led the governor to believe there is a potential conflict," Richter Taylor says.

Although Kulongoski is scheduled to turn the governor's office over to Kitzhaber on Jan. 10, Richter Taylor says Kulongoski wants to ensure that the ODOE situation is resolved before then so Kitzhaber can concentrate on the upcoming Legislative session.

"The governor believes very strongly that given the timing of the conclusion of this investigation [last week], just as the governor's office is about to change hands, that an independent outside review is in the public's best interest," Richter Taylor says.

Kroger's spokesman, Tony Green, says his agency only just received Kulongoski's letter and DOJ officials have not yet had time to consider the governor's request. In any event, Green says DOJ is acting as the governor's lawyer in the ODOE matter and so is bound by attorney-client privilege.

"I can't say anything about this matter because it involves legal discussions and we are the lawyer and the governor's office is the client," Green says.
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