March 31st, 2011 | by NIGEL JAQUISS News | Posted In: Politics, Media

Release of Oregon Energy Department Investigation File Delayed Again

John KrogerJohn Kroger. - IMAGE: cameronbrowne.com

The long saga of the Oregon Department of Justice's investigation into contracting practices at the Oregon Department of Energy has gotten even longer.

First, a recap: DOJ began an investigation last August into whether ODOE employees had improperly steered a $60,000 subcontract to a Bend renewable energy consulting firm run by Cylvia Hayes, the longtime companion of Gov. John Kitzhaber. At the time that investigation began, Kitzhaber was a candidate for governor in an election he ultimately would win in November.

The state investigation concluded Dec. 29 with a finding that none of the four ODOE employees involved in the subcontract had committed official misconduct.

Normally, following an investigation which does not result in criminal charges, DOJ does two things. It gives the involved employees the opportunity for a "name clearing" hearing (a relatively new practice). And afterward, DOJ releases the investigative materials, such as email, interview transcripts and other documents to the public.

That release has been delayed numerous times in the past three months. The newest delays come as a result of an error DOJ made in the release of some documents to the four ODOE employees. In that release, some documents that are not meant to be public, such as the results of criminal subpoenas, Social Security numbers etc, were given to lawyers for the four employees.

Those employees remain on administrative leave pending final decisions by the state agencies (ODOE, the Oregon Department of Consumer and Business Services and Department of Corrections) that employ them about whether they should be terminated or allowed to return to work. (To complicate matters further, other agencies in addition to Energy are involved. That's because some of the four employees from ODOE were on temporary assignments . The governor's office is also involved because it was then-Gov. Ted Kulongoski who originally requested DOJ in 2010 to investigate the contract).

The latest turn of the screw is this: the governor's office and other involved state agencies have asked [PDF] to hire independent counsel to help them decide the four employees' fates. That's because DOJ's erroneous release of non-public information may have created legal liability for DOJ and could conceivably create a conflict of interest between DOJ, which normally provides legal advice to state agencies, and those agencies. 

To spell out the conflict, the four ODOE employees might sue DOJ for releasing materials improperly. (At least two have already notified DOJ they may sue for various aspects of the investigation.) That prospect of a lawsuit could color DOJ's legal advice on whether the employees should return to work. 

In a March 18 letter to Kitzhaber's general counsel, Liani Reeves, Kroger's chief counsel, David Leith, recapped the situation.

There is a "potential—if speculative—conflict of interest arising from DOJ's erroneous disclosure of records," Leith wrote. "The agencies...have indicated that they would like to retain separate counsel for consideration of their pending employment decisions only."

The hiring of independent counsel will mark the third level of legal review into the matter. First, DOJ investigated. Then, Kulongoski asked retired Judge Frank Yraguen to review DOJ's investigation and conclusions about the four ODOE employees. (His report is finished but has not been released.) And now, independent lawyers will advise the governor and three state agencies. 

The upshot of the newest development is that the public's opportunity to sift through the source documents underlying the DOJ investigation will be delayed by at least another month.

Tim Raphael, a Kitzhaber spokesman, says getting the new lawyers up to speed could delay release of the underlying documents to at least mid-May.

 
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