The State's Travel Contract Shows How Little Has Changed in Salem

In some ways, Gov. Kate Brown has brought welcome change to Oregon state government.

Whether she's leading a trade mission or comforting families after the mass shooting at Umpqua Community College, people say she's the kind of warm, approachable figure her predecessor, John Kitzhaber, was not.

"We have a happy governor," says Jim Moore, professor of political science at Pacific University, "and a person who actually enjoys being governor."

But nine months after Brown took over from Kitzhaber, there are few signs of change in a state government that received a failing grade for transparency Nov. 9 from the Center for Public Integrity.

One small but telling example of how little Salem has moved from the status quo is the travel arrangements made for Brown and her party on a recent trip to Asia.

Tickets for Brown and dozens of others on an October trade mission were booked through the state's exclusive travel agent, Azumano Travel.

Azumano has held the state travel contract for more than a decade, and a state spokesman says the contract has not been put out for competitive bid since 2005.

The state of Washington, by contrast, inked contracts in 2013 with 37 different travel agencies.

Local governments, such as the city of Portland, Multnomah County and the Port of Portland, piggyback on the state contract.

That contract remained in place long after warning signs about Azumano's finances first appeared—and even after the company's longtime owner and CEO, Portland businessman Sho Dozono, filed for bankruptcy in February.

The financial difficulties of the state's only travel contractor might have been reason enough for a review. So might have been a troubled state loan Kitzhaber recommended for Azumano—half of which was never repaid. Dozono sold his interest in Azumano last year to CI Travel of Virginia but remains an employee.

Despite the unpaid debt, however, the state continues to write Azumano Travel a check every month.

Democrats interviewed for this story declined to comment on the record, but a former legislative colleague of Brown's says the Azumano contract is an example of Salem's complacency.

"Gov. Brown came into office with a lot of credibility," says Senate Minority Leader Ted Ferrioli (R-John Day). "But I don't think she wants to do the heavy lifting to change the culture in Salem. This is a business-as-usual administration."

The strength of Azumano Travel has always been Dozono, who for decades worked to build relationships between Oregon and his homeland of Japan.

Dozono has never been a major political donor, but he is a pillar of Oregon's Democratic establishment. His list of civic engagements and honors adds four pages to his résumé.

But for years, there have been signs his company was foundering. In 2002, WW reported on his improperly loaning himself money from a trust he oversaw. His 2008 campaign for Portland mayor was dogged by unpaid bills.

As WW reported Nov. 4, Azumano sought $300,000 in financial assistance from the governor's strategic reserve fund in 2012, after losing money the previous three years.

Kitzhaber recommended approving Azumano's request for state funds in part because state money would "allow Azumano to maintain its local ownership." The next year, he named Dozono to the board of Portland State University.

Azumano stopped making payments on the state loan in 2014. Dozono declared bankruptcy earlier this year, with Azumano owing nearly $150,000 to Business Oregon, the state agency that administers the governor's strategic reserve.

Kitzhaber's attorney did not respond to WW's request for comment. Dozono declined to comment.

Kitzhaber's resignation Feb. 18, in the midst of allegations of influence-peddling by him and then-first lady Cylvia Hayes, provided an opportunity for Brown to clean house in Salem.

At her state-of-the-state speech in April, Brown described a package of ethics reforms. "The steps I have proposed will foster transparency and accountability," Brown said. "That is the best way to demonstrate our commitment to restoring credibility."

Lawmakers did adopt three ethics bills Brown proposed, yet observers have seen scant evidence of change.

"Her policies are a continuation of Kitzhaber's," Moore says.

That's understandable, in a way. Unlike candidates who spend a year running for office, Brown had only a couple of days to prepare for Kitzhaber's resignation.

"In a campaign, you get vetted and you get to thoroughly vet issues," says Brown's spokeswoman, Kristen Grainger. "We didn't have that opportunity."

Today, though, nearly all of Kitzhaber's appointees not directly involved in the controversy that cost him his job are still in place. Jan Murdock, the Kitzhaber assistant who asked a state computer technician to delete Kitzhaber's personal emails from state servers, is Brown's scheduler.

And Brown has yet to settle dueling lawsuits with Oracle America Corp., allowing litigation that began as a Kitzhaber election-year tactic to become her problem.

Grainger says Brown's approach differs from Kitzhaber's.

"She's not an ER doc [as Kitzhaber was] who comes in to assess the situation and act," Grainger says. "She's an attorney and invested in the process."

Brown is also now considering extending the state's ties with the Dozono family.

Elisa Dozono is Sho Dozono's daughter. She's a lawyer and former spokeswoman for Portland Mayor Vera Katz and the port. She declined to comment on this story.

In 2012, Kitzhaber named her to chair the Oregon Lottery Commission. This June, after Oregon Restaurant Services, a client of her law firm, sued the lottery, Brown and Dozono agreed that she should resign as lottery chairwoman.

"I hope to be able to appoint Elisa to another post so that Oregon may continue to benefit from her talents and dedication," Brown said in a June 26 statement.

Now Elisa Dozono is reportedly a finalist for the $160,000-a-year post as director of Business Oregon—the agency that gave her father $150,000 he didn't pay back.

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