Two of Oregon Gov. Kate Brown's top staffers, both former lobbyists, are running the governor's office while juggling potential conflicts of interest, WW has learned.
The first potential conflict involves Brown's chief of staff, Kristen Leonard, and a company she and her husband own.
That company has a six-figure contract—soon to come up for renewal—to supply state government with computer software. Leonard's position as Brown's chief of staff gives the company a competitive advantage.
The second potential conflict involves the double employment of Brown's newly hired deputy chief of staff, Abby Tibbs. She was Oregon Health & Science University's top in-house lobbyist, but for the past three months, she has simultaneously overseen the preparation of the governor's budget—a document in which the university that employs her has a major financial interest.
State law requires public officials to disclose potential or actual conflicts of interest. Neither Leonard nor Tibbs did, the governor's office tells WW.
Jim Moore, who teaches political science at Pacific University, says that was a mistake. "If transparency is Brown's No. 1 goal, those are not good decisions," Moore says.
Brown has spoken repeatedly of her desire to restore accountability in state government and is backing legislation in 2017 aimed at reducing the influence of lobbyists.
Yet she has also depended heavily on lobbyists since taking office two years ago. Brown recently increased that reliance: On Dec. 9, she hired Tibbs to become her deputy chief of staff and hired Debbie Koreski, a lobbyist for Portland State University, as her adviser on housing and human services.
"By going repeatedly to the pool of lobbyists, she raises questions that could be avoided by hiring people who are not lobbyists," says Moore. "It's a very simple thing to avoid."
In October, WW reported that Leonard and her husband, Kevin Neely, still had a financial interest in a bookkeeping firm whose biggest customer was Brown's election campaign. In all, Brown's campaign paid that firm, C&E Systems, $81,188 after Leonard became Brown's chief.
Leonard told WW she had no influence on the Brown campaign's business relationship with C&E.
But WW has learned there are further entanglements between Leonard's day job and her family's private interests.
Neely and Leonard own a company called Election Solutions that provides software to all state agencies via the Oregon Department of Administrative Services. DAS reports to Brown.
The Election Solutions contract was authorized by then-DAS deputy chief operating officer Barry Pack, a longtime Brown associate whom she recently appointed to head the Oregon Lottery.
Election Solutions' software allows state employees to track the status of bills in the Oregon Legislature. The two-year contract is worth $214,920.
The Election Solutions contract with the state preceded Leonard's becoming Brown's top aide. Neely signed the contract in October 2014, four months before Brown succeeded Gov. John Kitzhaber.
But Todd Donovan, who teaches political science at Western Washington University, says once Leonard entered the governor's office, she should have disclosed the potential conflict.
"If she has a private business that could benefit from her public position, that's a small-scale version of what people are worried about with Donald Trump," Donovan says.
Oregon law says public officials cannot use their positions to benefit a relative or company they are associated with, or help either avoid a loss. If a public official encounters an actual or potential conflict of interest, the law requires she disclose it in writing.
Leonard has failed to fill out the conflict-of-interest form disclosing her conflict with either the campaign bookkeeping firm or the software firm.
Kristen Grainger, Brown's spokeswoman, says Leonard did not need to make such disclosures because she has never made a "decision in which her conduct as a state official would or could benefit her financially." She says Leonard will make such a disclosure when Election Solutions' contract, which expires in June 2017, comes up for renewal.
"When that time comes, and she is met with a potential conflict, [she] knows to declare the conflict and recuse herself from that decision," Grainger says, "but she hasn't yet."
Tibbs, the new deputy chief of staff, also glossed over a serious potential conflict.
In September of this year, Tibbs came to work for Brown on loan from OHSU, where she was registered as a lobbyist. That leap was not unprecedented. In fact, Tibbs took over as the university's lobbyist from Brian Shipley, who left to become Brown's first chief of staff in 2015.
In her Dec. 9 announcement of Tibbs' hiring, Brown explained what Tibbs had been doing since September. "Abby joined my office on a two-month assignment to help lead the development of my proposed budget," Brown said.
Records show Tibbs registered as a lobbyist for the governor's office on Oct. 14, 2016, even as she remained a registered lobbyist for the university, which is a public corporation not owned by the state. (After WW asked questions, OHSU wrote to the Oregon Government Ethics Commission and said Tibbs' registration as a lobbyist for the university should have been canceled when she was loaned to the governor's office but wasn't, due to "clerical error.")
In fact, although Brown's office covered Tibbs' salary and benefits while she worked on the governor's budget, Tibbs remains an OHSU employee and won't leave the university's employ until Dec. 22.
When then-Vice President Dick Cheney invited oil lobbyists to help make policy and budget decisions, Democrats were outraged. OHSU is no oil company, but it would be unusual at any time to have the governor's chief budget adviser being employed by an organization that competes directly with other groups for a share of the state budget.
That competition is heightened in the current environment when the state is facing a $1.7 billion deficit. The potential conflict of interest is that Tibbs might favor her employer, OHSU, over other agencies or interest groups.
There's no evidence Tibbs did so, but her failure to disclose a potential conflict left the public in the dark.
"There has to be a very clear line there between OHSU's interest and the public's interest," Moore says. "There's no way to prove there was."
The governor's budget is a preliminary document and will be replaced by a lawmakers' budget, but it is the starting point for all discussions of how the state will spend more than $20 billion in discretionary taxpayer funds.
Grainger says Tibbs didn't make decisions about OHSU's budget.
The potential conflict is now moot because the budget is finished and Tibbs is joining Brown's staff.
The state's top Republicans did not know about Tibbs' or Leonard's potential conflicts until informed by WW. "This sounds like a glaring example of a systemic problem that comes from one-party rule," says House Minority Leader Mike McLane (R-Powell Butte). "Kate Brown promised transparency, but she hasn't delivered."
A reluctance to address conflicts of interest played a central role in the downfall of Gov. Kitzhaber.
Then-first lady Cylvia Hayes successfully pursued consulting contracts with groups seeking to influence the state while she served as an adviser to Kitzhaber.
When Brown took office Feb. 18, 2015, she pledged to restore accountability to the governor's office.
"When the public trust has been violated in a willful way, we need the tools to hold that person accountable," Brown told lawmakers shortly after taking office. "It's imperative that the governor, and the governor's office, be a model."
Grainger says that neither Leonard nor Tibbs has done anything wrong.