Governor’s resignation, ongoing investigation plunge Ore. into uncertainty

By Jennifer Yachnin | 02/16/2015 12:56 PM EST

Even though Oregon Gov. John Kitzhaber (D) will resign from office Wednesday — triggering an automatic promotion for Secretary of State Kate Brown (D) — questions over whether his fiancée, Cylvia Hayes, used her position as an adviser on energy issues for personal gain could drag on for months as the U.S. Justice Department investigates the allegations.

Even though Oregon Gov. John Kitzhaber (D) will resign from office Wednesday — triggering an automatic promotion for Secretary of State Kate Brown (D) — questions over whether his fiancée, Cylvia Hayes, used her position as an adviser on energy issues for personal gain could drag on for months as the U.S. Justice Department investigates the allegations.

According to subpoenas issued to the Oregon Department of Administrative Services on Friday, the same day Kitzhaber announced his resignation, federal officials are seeking documents from current and former Kitzhaber aides, as well as various state agencies, including both the Energy and the Environmental Quality departments, and numerous firms with a focus on climate or renewable energy that directly employed or otherwise paid Hayes for consulting work.

Among the firms named in the eight-page subpoena are the Oregon Business Council, Waste to Energy and Resources Media, the Clean Economy Development Center, Rural Development Initiatives, the Energy Foundation, and Demos.


The subpoena also demands communications from a host of individuals who have worked with Hayes’ firm 3E Strategies, including Demos Director of Policy and Research Lew Daly; RDI Executive Director Craig Smith; CEDC Executive Director Jeffrey King; and Elizabeth Banse, who previously executed a contract with Hayes at Resources Media and is listed under the Energy Foundation in the subpoena.

Hayes is also required to turn over personal and business income tax filings, travel records, and calendars.

The Justice Department’s subpoena also sheds light on the grand jury’s focus, seeking documents on dozens of legislative proposals and programs, including the West Coast Clean Economy Action Plan, Pacific Coast Collaborative Action Plan on Climate and Energy, Port of Morrow Coal Terminal, and the extension of low-carbon fuel standards.

All documents must be submitted to the federal grand jury reviewing the case by March 10, according to a copy of the subpoena.

The Washington, D.C.-based CEDC addressed reports earlier this month that Hayes promoted legislation on low-carbon fuel standards during her time as a fellow at the organization, during which she received $118,000 in payments. That total represented more than half of the $213,000 in fees Hayes has reported receiving for consulting work since 2011.

In a statement posted to its website Feb. 6, the CEDC noted that it did not pay Hayes but said her fellowship, paid via contract with her firm 3E Strategies, was funded by the Rockefeller Brothers Foundation and the San Francisco-based Energy Foundation.

The CEDC also asserted that it did not "engage in any lobbying activities" or solicit funding from state governments, but instead aims to initiate projects based on policies and regulations already in place.

"CEDC believes that these projects may generally lead to more effective clean energy policies yet does not lobby on any pending legislation or regulation," the statement read. The CEDC has also stated that it did not pursue low-carbon fuel standards in the state until 2014, two years after Hayes’ fellowship ended.

Both Kitzhaber and Hayes also face investigations from the Oregon state Department of Justice and the Oregon Government Ethics Commission, although the latter has suspended its inquiry pending the outcome of the state DOJ’s findings.

Although Hayes has not publicly commented on the recent accusations — some of which first came to light ahead of the November 2014 election in which Kitzhaber won his fourth term in office — she did hold a news conference in October in which she acknowledged receiving $5,000 for a sham marriage in 1997 while she was a college student. The governor has repeatedly denied wrongdoing, including in his resignation letter last week.

"I am confident that I have not broken any laws nor taken any actions that were dishonest or dishonorable in their intent or outcome," Kitzhaber wrote. "That is why I asked both the Ethics Commission and the Attorney General to take a full and comprehensive look at my actions — and I will continue to fully cooperate with those ongoing efforts."

He added: "I am equally confident that once they have been concluded Oregonians will see that I have never put anything before my love for and commitment to Oregon and faithfully fulfilling the responsibilities of the public offices I have held."

Should the Department of Justice eventually indict either Hayes or Kitzhaber on public corruption charges, the case could echo the recent conviction of former Virginia Gov. Bob McDonnell (R) and his spouse, Maureen McDonnell.

McDonnell was sentenced earlier this year to two years in prison after being convicted of accepting loans and other gifts in exchange for access to his office, while Maureen McDonnell is set to be sentenced this Friday.

Challenging transition

In the meantime, Brown, 54, a veteran state politician who spent 16 years in the Legislature before winning her first term as secretary of State in 2008, is set to ascend to the governor’s office Wednesday when Kitzhaber steps down.

Oregon does not elect a lieutenant governor, making Brown the second-highest-ranking elected official in the state. She will become the first openly bisexual governor in U.S. history.

During a celebration in Portland on Saturday to mark Oregon’s 156th anniversary as a state, Brown spoke for just under a minute — during which time she did not address her anticipated promotion, according to The Oregonian newspaper.

"Our challenge is to make sure we keep Oregon the very special place that it is, and I look forward to working with you to make sure that that happens," she said.

But Brown will likely face a challenging transition due to the timing of Kitzhaber’s departure, former Oregon Democratic Party Chairwoman Meredith Wood Smith told Greenwire in an interview.

"She’s going to have to step into a train that’s already going down the tracks, so to speak. I think she’s well capable of doing that," said Wood Smith, referring to the fact that Oregon’s Legislature began its annual session earlier this month.

But Brown spokesman Tony Green told the Portland publication Willamette Week last week that the secretary of State has prepared a succession plan since she first arrived in office in 2009.

"We regularly update the plan," Green told the newspaper.

Wood Smith also pointed to Brown’s tenure in the state House and the state Senate, where she served as the Democratic leader, to argue that she is equipped to join the fray of a legislative session already underway.

"I think she’ll get people around her that are capable and well-informed and smart to help her with the transition," said Wood Smith, who helmed the state party from 2006 to 2012.

While Brown has not announced her agenda ahead of her swearing-in, Wood Smith added that she expects the soon-to-be chief executive to focus on the state’s health care plan, a priority of Kitzhaber’s, as well as education.

She noted that Brown’s career has often focused on promoting programs aimed at both increasing voter access and improving government transparency, so those are other areas she could return to as governor.

During her tenure as secretary of State, Brown has pushed an effort to automatically register Oregon voters when they renew their driver’s licenses, vowing to pursue the measure again this session, and during her Senate tenure Brown authored legislation to create an Internet-based campaign finance database.

"She has a real commitment to grass roots — to people’s engagement — and has demonstrated that as secretary of State with really wanting to get people involved in elections," Wood Smith said.

But Brown has also made a reputation for herself as an aggressive political competitor.

An attorney who specialized in family and juvenile law, Brown first landed in the state House by appointment in 1991, after then-Rep. Judy Shiprack (D) stepped down midterm.

When Shiprack sought to reclaim her Portland-area seat in the 1992 election, Brown repeatedly canvassed the district and won by a 7-vote margin after a recount.

"Kate didn’t have money, so all she did was walk the district and knock on doors," Oregon lobbyist Alan Tresidder recently told the Willamette Week. "She must have hit every door in that district three times."

Brown later won election to the state Senate in 1996, where she earned a reputation as a solid fundraiser and for helping to return Democrats to the majority in 2004.

The Democrat is also known for her role in a 2003 effort to enact cuts to the state’s Public Employees Retirement System. After gleaning votes from fellow Democrats despite potential repercussions from organized labor, Brown voted against the measure herself, the Willamette Week reported.

"She totally undercut people," former state Sen. Charlie Ringo (D) told the newspaper. The state’s unions later worked against Democrats who had supported the measure.

But Portland State University political science professor Richard Clucas anticipates that Brown will be well-received by Oregon’s electorate.

"She’s seen as being more liberal than our current governor. I think she has a lot of people who think very highly of her," Clucas told Greenwire. "Some people are pretty happy to see Kate Brown move into the governor’s office."

Although Brown’s tenure overlapped with Kitzhaber’s, Clucas said that Brown, who will become the state’s second female governor, is unlikely to be tainted by the findings from any of the ongoing investigations.

"If Kitzhaber had stayed, he wouldn’t have helped the Democratic Party, and in that sense having her in will be beneficial. … She probably has the potential to mobilize a base who will be very supportive of her," Clucas said.

Brown has already publicly sought to distance herself from Kitzhaber, releasing a statement in the wake of media reports last week that Kitzhaber had recalled Brown to the state in order to resign, then acted surprised when she arrived to meet with him and said he would remain in office. In her statement, Brown described the incident as "bizarre."

Despite the circumstances, Brown’s ascension to higher office may also boost her chances to win a term in 2016, when a special election will be held for the governor’s office. She would have otherwise had to wait until 2018, when Kitzhaber’s term would have ended.

"Four years from now the Republicans are probably hoping to have a good chance, with an open seat race, but now they’re going to have somebody who’s going to run who’s going to be an incumbent," Clucas said.

Seeking balance on green issues

Despite her extensive tenure in the state Legislature, as well as her service on the State Land Board as secretary of State, political observers say Brown has not focused extensively on legislation tied to environmental issues or energy production in the state.

Ahead of Kitzhaber’s announcement last week and revelations about the Justice Department’s probe, Sierra Club Oregon Chapter Director Andy Maggi said only that his organization did not expect to shift focus because of the new administration.

"The policies that we’re working on, that we’ve been working to accomplish, we’ve chosen those not only because there’s public need but public support," Maggi said. "Chief among them a desire to address climate change. … We’re going to work on those issues regardless of whom the governor is."

Brown’s record is otherwise reflected in a series of legislative scorecards produced by the Oregon League of Conservation Voters, which show she earned generally high marks — between 86 percent and perfect scores — with the exception of two terms in the Senate in the early 2000s, when she bottomed out at 67 percent.

Among the votes environmentalists criticized Brown for casting was a 2005 funding measure that endorsed increased logging in both the Tillamook and Clatsop state forests, which won majorities in both chambers and was later signed by then-Gov. Ted Kulongoski (D).

At the time, Brown told the Associated Press that many Democrats were conflicted over the forest bill, citing a need to create jobs while also voicing concern about the impact of logging the forestlands.

"It’s a question of where is the balance?" Brown said.

Brown, who earned her degree in environmental conservation from the University of Colorado, Boulder, also earned negative marks for her 2005 support of land-use measures that conservationists argued would have increased sprawl in the state.

Environmentalists also dinged Brown in 2003 for her support of a bill that failed to fully fund the state’s Pesticide Use Reporting System. The measure passed both chambers — Brown was one of three Democrats to back the bill in the Senate — and Kulongoski allowed it to become law without signing it.

But Brown earned higher scores before leaving the state Legislature, and she went on to win endorsements from both the OLCV and the state Sierra Club for her secretary of State bids.

During her tenure as secretary of State, Brown has served on the State Land Board along with Kitzhaber and state Treasurer Ted Wheeler (D).

Among its major decisions, the board called in December for selling 92,000 acres of coastal forestland south of Eugene in an effort to ensure revenue for public schools while also addressing concerns over logging the habitat of an endangered seabird (Greenwire, Dec. 11, 2014).

Although the state had logged the forest to raise public school funds, that process stopped in 2013 under pressure from environmental organizations. Oregon officials also drew criticism that year for the state’s $4.2 million sale of nearly 1,500 acres of forestland to Seneca Jones Timber and Scott Timber Co., according to a report in The Oregonian.

In a December interview with Capital Press, an agricultural news website, Brown said the state should consider selling the remaining 92,000 acres to another public entity or a public-private partnership focused on conservation.

"I’m not feeling like we need to make a decision tomorrow," Brown told the website at that time, citing the importance of the forestland as a spawning ground for coastal Coho salmon.