January 3rd, 2011 5:33 pm | by NIGEL JAQUISS News | Posted In: CLEAN UP, Politics

Read the Letter: Oregon Energy Department/Cylvia Hayes Investigation Gets Messy

John Kroger

Last week, Attorney General John Kroger's office issued a statement marking the end of his investigation into contracting practices at the Oregon Department of Energy.

"We are currently of the opinion that we could not prove beyond a reasonable doubt that any state employee committed Official Misconduct in the First or Second degree while awarding the Energy Assurance Grant," wrote Kroger's top criminal counsel, Sean Riddell on Dec. 29 in a letter to Gov. Ted Kulongoski, who requested the energy department investigation in August.

The investigation was politically charged because it involved a department subcontractor, TEEM Inc., run by Cylvia Hayes, a Bend renewable energy consultant and the longtime companion of Gov.-elect John Kitzhaber.

But the matter is not over. First, the AG's office hasn't yet released documents gathered in the case, including emails between various involved parties or transcripts of interviews with three energy department employees who were placed on leave—or with Hayes or her colleagues. Second, Kulongoski's response was to order an outside review of energy department contracting practices, a none-too-subtle signal the governor was less than completely satisfied by Kroger's investigation.

“Now that the Department of Justice has completed its criminal inquiry, I have ordered the resumption of the state personnel review process relating to contracting practices at the Oregon Department of Energy," Kulongoski said in a Dec. 29 statement. "That review process will be conducted by an independent reviewer, outside state government.”

The Oregonian previously reported all the above information. But what's new is an incendiary letter from the heavyweight lawyers representing Mark Long, whom Kulongoski tapped as interim energy department director after dismissing previous director Mike Grainey in 2009.

The letter Kroger released memorializing the end of the investigation included a damaging reference to Long, a longtime senior state executive who previously served as director of the Construction Contractors' Board, administrator of the Building Codes Division and is currently deputy director of the state Department of Consumer and Business Services.

"Mark Long, the Director of the Oregon Department Energy [sic] at the time the Energy Assurance Grant was awarded, did not accept our invitation for an interview," Riddell noted in his letter.

But in a Dec. 29 letter [PDF] to Kulongoski, Long's lawyers attacked Riddell.

"Mr. Riddell's letter is substantially incomplete, contains a stunning factual error and does not provide context for Mr. Long's decision not to participate in an unstructured, open-ended and utterly defined 'interview,'" wrote lawyers William Gary and David Frohnmayer. (They disagree with Riddell's statement that Long was director of the energy department at the time the Energy Assurance grant was awarded).

"Mr. Riddell dispatched Special agents to Mr. Long's place of work to seize Mr. Long's work computer, in a public manner, calculated to embarrass him in front of his co-workers and subordinates," the lawyers wrote. "And Mr. Riddell's Chief Deputy has lied to at least one other subject of the investigation, asserting that Mr. Long had implicated her in statements to the Department of Justice. These actions have seriously damaged Mr. Long's professional reputation."

On Dec. 29, Department of Consumer and Business Services director Cory Streisinger placed Long on administrative leave.

"We seldom have witnessed a more secretive, one-sided and Kafkaesque treatment of a respected public servant," Gary and Frohnmayer wrote.

Some context for the letter, which stretches to two-and-a-half pages:

Gary is Oregon's former solicitor general. He also served as deputy Attorney General and, in private practice represented local governments in the landmark 2003 PERS reforms. Frohnmayer served as Oregon attorney general from 1981 to 1991 and as president of the University of Oregon from 1994 to 2009. That two such high-powered lawyers would be representing a relatively obscure, albeit senior, bureaucrat can be explained in part by the name of the law firm they work for: Harrang Long Gary Rudnick.

Mark Long's father, Stan Long, was a co-founder of the firm and served for a time as Frohnmayer's top deputy at the justice department. In the late 80's, then-Gov. Neil Goldschmidt appointed Stan Long to head the troubled state workers' comp insurer, now called SAIF Corp. In that role, Long worked closely and sometimes clashed with the then-state Insurance Commissioner, whose name was Ted Kulongoski.

Then-Gov. Goldschmidt's legal counsel at that time? Current DCBS director Streisinger.

All that means two things:

1) Mark Long is unlikely to go quietly into limbo;

2) And while the Justice Department investigation may be complete, this story is not.
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