Impact of Ore. scandal may ride on how far GOP can carry it

By Jennifer Yachnin, Daniel Bush | 02/19/2015 12:58 PM EST

Former Oregon Gov. John Kitzhaber (D) formally resigned yesterday amid allegations of public corruption and questions over whether his fiancee, Cylvia Hayes, used her position as an adviser on energy issues for personal gain. But whether Republicans can successfully push the scandal beyond the Beaver State’s borders and make it a key issue in the 2016 election cycle remains to be seen.

In recent days, conservative newspapers and the Energy & Environment Legal Institute, an advocacy group with ties to the oil industry, have seized on allegations that Hayes lobbied the Kitzhaber administration to pursue climate and energy policies promoted by the same organizations that paid her for consulting work, arguing that the Oregon scandal should serve as an impetus to examine the ties between government and the renewable energy industry elsewhere. In discussing the scandal, conservatives have also invoked the name of Tom Steyer, the billionaire environmental activist and Democratic donor.

"Any such investigation must not stop at Oregon’s borders," wrote E&E Legal Institute Senior Legal Fellow Chris Horner in The Washington Times.


In addition to a state criminal inquiry into the allegations, the U.S. Department of Justice has served the Oregon Department of Administrative Services with a subpoena seeking documents from current and former Kitzhaber aides, as well as information from Hayes, including her personal and business income tax filings, travel records and calendars.

That subpoena also seeks documents on a host of legislative programs and proposals, including the West Coast Clean Economy Action Plan, the Pacific Coast Collaborative Action Plan on Climate and Energy, the 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.

But it may be difficult for Republicans to turn Kitzhaber’s resignation and the grand jury’s findings — the panel could seek an indictment against Kitzhaber or Hayes, although a decision could remain months away — into the next clean-energy political albatross for Democrats.

While Republicans seized on the bankruptcy of California solar firm Solyndra during the 2012 cycle and held several congressional hearings about it — pointing to the $535 million in loan guarantees the firm received from the Department of Energy as an illustration of "crony capitalism" and accusing Democrats of using the federal government to pick "winners and losers" in the energy sector — the Oregon developments may not provide enough parallels to work on a national level.

"The situation has been remarkably compartmentalized," said Nathan Gonzales, editor and publisher of The Rothenberg & Gonzales Political Report. "If this was happening in New Jersey or Pennsylvania or Virginia, I think it’d be a much bigger story."

Although former Virginia Gov. Bob McDonnell (R) and his spouse were convicted of public corruption charges last year over accepting loans and other gifts in exchange for access to his office, Gonzales notes that the issues in that case revolved more around personal conduct, rather than policy.

"Overall, I think Democrats do a better job of compartmentalizing their scandals. And Democrats do a better job of making connections to Republican problems where the connections didn’t already exist," Gonzales said, pointing to the House Democratic Campaign Committee’s strategy in its successful 2006 cycle, when it flogged Republicans for a "culture of corruption" and linked unrelated scandals among several GOP House lawmakers.

Nonetheless, Geoffrey Skelley, associate editor of "Larry Sabato’s Crystal Ball" at the University of Virginia’s Center for Politics, said he expects Republicans will aim to highlight the Oregon scandal, particularly if either investigation ultimately charges Kitzhaber or Hayes with wrongdoing.

"You’re definitely going to see Republicans talking about this. The question is, at the end of the day, is that going to influence Democrats to run away from this issue to some degree?" Skelley said. "The environmental wing is very firmly in the Democratic camp, and … I don’t see their influence falling too far by the wayside."

Republicans challenge Steyer’s credibility

Steyer has also seen his name mentioned in the conservatives’ discussion of the Oregon allegations. One of the Californian’s nonprofit groups gave funds to the San Francisco-based Energy Foundation, which in turn paid a portion of Hayes’ fellowship fees at the Clean Economy Development Center of Washington, D.C., one of the contracts under scrutiny. But those ties are unlikely to dissuade other Democrats from accepting contributions from other Steyer-backed organizations, such as NextGen Climate.

"It’s not going to keep Democrats from wanting to have many millions of dollars spent in their respective Senate race or House race," Skelley said.

But Matt Dempsey, a former aide to Senate Environment and Public Works Chairman James Inhofe (R-Okla.) and senior director at FTI Consulting, suggested that Steyer could see a ripple effect from the investigation.

"The real issue here is Tom Steyer’s involvement and what this means for him moving forward in 2016," Dempsey said.

"This just adds more fuel to the fire with how closely these environmental groups" have become to local and state government, Dempsey added. "It affects Steyer’s credibility."

Still, others predicted that the scandal will blow over well before the 2016 election.

"It remains to be seen, but based on the allegations as we’ve heard them, it will be difficult for Republicans to explain them and sustain anger about them for a 20-month period," said Josh Kardon, an energy lobbyist at Capitol Counsel and former chief of staff to Oregon Sen. Ron Wyden (D).

Not that Republicans won’t try.

Inhofe said yesterday that the Oregon allegations should prompt closer analysis of the renewable energy industry and climate change policies.

"This is just another example of environmental activist groups attempting to influence policy under a veil of secrecy and one more reason these groups merit additional scrutiny," Inhofe said in a statement. "Beneath the violation of public trust by the Oregon state officials, we have far-left foundations funneling significant funds to an environmental group to orchestrate this type of activism without any public disclosure."

In the meantime, despite Kitzhaber’s decision to abort his fourth term in office, Democrats in Oregon have vowed to push ahead with at least one policy initiative that Hayes has championed: a measure to extend Oregon’s Clean Fuels Program, which would otherwise expire at the end of the year.

Oregon’s Democratic-controlled Senate approved the bill Tuesday despite an attempt by Republicans to put the measure before voters directly, citing the ongoing criminal investigations (ClimateWire, Feb. 18). The bill next goes to the state House, which Democrats similarly control.