Double Dip

Oregon first lady Cylvia Hayes used a taxpayer-funded trip to Seattle to work for her private consulting clients.

But that's what happened Dec. 28, when The (Eugene) Register-Guard called on Kitzhaber to appoint a special prosecutor to look into allegations Hayes used her position as first lady and an adviser to the governor to benefit her private consulting business.

"One possibility would be to invite a disinterested person with a high degree of credibility and a thorough knowledge of the law—a retired state Supreme Court judge, perhaps—to conduct interviews and examine documents, and then to present the evidence to a Marion County grand jury," The Register-Guard's editorial read.

Under Oregon law, only the governor has the authority to appoint a special prosecutor.

Kitzhaber is unlikely to appoint one. And no one else in state government—including Attorney General Ellen Rosenblum, a fellow Democrat and the state's top law enforcement official—seems willing to pursue a possible criminal case. (Full disclosure: Rosenblum is married to WW publisher Richard Meeker.)

That leaves a possible civil investigation to the Oregon Government Ethics Commission, a seven-member board appointed by the governor.

The commission could decide this month to pursue an investigation of Kitzhaber and Hayes, based on complaints filed in November alleging that Hayes used her public position as adviser to the governor for private gain.

The commission could, for example, zero in on a single day in Hayes' blurring of her public and private roles: Aug. 27, 2013.

Newly disclosed emails show that's when Hayes took a taxpayer-funded trip to Seattle and conducted meetings on behalf of her private clients.

Hayes acknowledged doing so in an email to WW, after the newspaper raised questions about the Seattle trip. 

State law prohibits the use of public money for private benefit.

Hayes worked as a consultant on energy and environmental issues before she met Kitzhaber, and she continued to do so after he entered office for his third term in January 2011.

Kitzhaber named her an as adviser, and Hayes soon established herself in the governor's office, attending senior staff meetings and communicating regularly with state agency officials.

For the first two years of Kitzhaber's term, Hayes' consulting business mostly consisted of work within Oregon and for previous clients.

That changed in 2013, when Hayes signed contracts with three private clients that she had been working with in her public role as an adviser to Kitzhaber. 

Her 2013 contracts added up to at least $85,000, according to records released to WW under the state's public records law. That was more than three times the income she had declared on her tax returns the prior year. 

One of the new contracts was with Resource Media, a Seattle public relations firm that specializes in environmental issues. Hayes' contract called on her to help Resource Media promote issues surrounding global warming and ocean acidification. Acidification is a growing environmental threat caused by the oceans' increasing absorption of carbon dioxide.

Hayes also signed a private consulting contract with Demos, a New York advocacy group that promotes the "genuine progress indicator," which it says is a more accurate measure of economic output than gross domestic product and other traditional yardsticks.

In August 2013, Hayes and Kitzhaber vacationed in the San Juan Islands before returning to the mainland for a dinner in Tacoma with Washington Gov. Jay Inslee and his wife, Trudi, on Aug. 26, 2013.

Kitzhaber then headed back to Oregon, and Hayes headed to Seattle. Taxpayers picked up the cost of her travel, including her room at the Hotel Vintage Park in Seattle—one that could accommodate her Rhodesian ridgeback, Tessa—parking, and a meal. 

Hayes' trip to Seattle cost taxpayers $278.89—not including the cost of an Oregon State Police trooper who went along as her bodyguard.

On Aug. 27, 2013, Hayes met with an official from the Casey Family Foundation to discuss a state anti-poverty effort she was running called the Oregon Prosperity Initiative. Hayes also had another meeting scheduled with Washington first lady Trudi Inslee.

Hayes tells WW she used the time between these official state meetings to carry out private consulting work.

"In order to be efficient with my time, I also had two additional private business-related meetings between the meeting with Mr. Smith and the meeting with Trudi Inslee," Hayes wrote in an email to WW.

"The first meeting was in Seattle with Betsy Peabody of the Puget Sound [Restoration Fund] regarding the issue of ocean acidification. The second meeting took place in Olympia and was with Wendy Korthuis-Smith, who was working on developing more effective metrics of economic outcomes for Washington state.

"Following this meeting, I met with First Lady Inslee to discuss the unique challenges and opportunities to make a positive difference while in the position of first lady.  I then returned to Oregon.”

Hayes' first private meeting directly benefited her work for Resource Media, the client who hired her to work on climate-change issues. The second meeting benefited Demos, her client promoting alternative measures of economic output. 

Hayes didn't respond to follow-up questions about whether those private meetings were appropriate.

The complaints pending before the state ethics commission concern whether Hayes improperly used her public position to advance her business interests. The commission has not yet been asked to look into other questions that have arisen since the Nov. 4 election.

Those questions include Hayes' use of a state-paid aide to help run her consulting business, first reported on last month. They could also include Hayes' admission of her meeting on behalf of her clients while on travel paid for by taxpayers.

Ben Gaskins, assistant professor of political science at Lewis & Clark College, says he believes Oregonians are paying close attention to the Hayes ethics case.

But he's skeptical about leaving the investigation in the hands of the state ethics commission, with its small staff and members appointed by the governor.

"Kitzhaber and the [Democratic] party will give it the appearance of an investigation, but there's no reason to expect much," Gaskins says. "I doubt this will be an all-out effort to find out what happened."

Gaskins says Kitzhaber, while weakened by the controversy, is fortunate the Legislature is controlled by fellow Democrats.

"He's facing a friendly Legislature that wants this issue to go away so it doesn't detract from what lawmakers are trying to accomplish," Gaskins says. “That blunts the impact.” 

Game Time

Why did Hayes want Kitzhaber to meet a video-game tycoon?

During their August 2013 trip to the Seattle area, newly released records show, first lady Cylvia Hayes arranged for Gov. John Kitzhaber to meet with a video-game entrepreneur to discuss climate change.

Hayes was working on climate change, including ocean acidification, for her private consulting client Resource Media. That work brought her into contact with Washington state Sen. Kevin Ranker (D-Orcas Island), sponsor of a 2013 state law seen as a landmark in combating the effects of acidification. 

Hayes and Ranker had established a working relationship around the issue, and they had become friends. Ranker wanted to introduce her to John Vechey, a wealthy Seattle environmentalist.

Vechey had co-founded PopCap Games and, according to public records, sold the company to gaming giant Electronic Arts in 2011 for at least $750 million. 

It made a lot of sense for Ranker to connect Vechey and Hayes. Vechey is on the board of the environmental website, for which Hayes writes, and Vechey's resources and interest in environmental issues could be valuable to Hayes' clients.

The meeting was scheduled for Aug. 26, 2013, at PopCap's Seattle headquarters. The get-together was not an official state meeting. Nonetheless, Hayes arranged for Kitzhaber to come along.

In the end, the meeting was rescheduled so Hayes and Kitzhaber could meet Vechey at his home on Orcas Island, near where the governor and his fiancee stayed during their San Juan Islands vacation.

Vechey could not be reached for comment, but according to the governor's office, Kitzhaber, Hayes, Ranker and Vechey spent the time watching a Seattle Seahawks game.

A spokeswoman for Kitzhaber, Amy Wojcicki, says the meeting was not an effort to leverage Hayes' relationship with the governor to benefit her clients.

"This meeting was a social meeting among friends," Wojcicki says. "There was no private business purpose for Ms. Hayes' participation."

Yet records show Ranker later helped Hayes with other meetings involving her clients and influential figures interested in ocean acidification. 

For example, Ranker took part in a November 2013 meeting in Seattle with Liz Banse, vice president of Hayes' client Resource Media, and William Ruckelshaus, a Seattle lawyer who was the first administrator of the U.S. Environmental Protection Agency. —NIGEL JAQUISS.

WWeek 2015

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