Kitzhaber-scandal roundup: AG launches investigation

The governor calls for transparency while disagreeing with attorney general about scope of investigation.

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The saga continued early Monday when Gov. John Kitzhaber requested that Attorney General Ellen Rosenblum launch an investigation into alleged improprities committed by first lady Cylvia Hayes.

Rosenblum responded by saying she was already on the case.

From the Portland Tribune:

“My office has already opened an investigation into this matter,” Rosenblum wrote. “I appreciate your intent to cooperate fully.”

Although Rosenblum did not disclose the issues her office will investigate, the Department of Justice has pursued well-known Oregonians for tax evasion in recent years. Cases included conservative initiative sponsor Bill Sizemore, who pleaded guilty in 2011 to three counts of felony tax evasion, and marijuana activist Paul Stanford who pleaded guilty the same year to one count of misdemeanor tax evasion. The Department of Justice has also prosecuted public employees for the misdemeanor crime of official misconduct, which under state law can include an official misusing public office to obtain a benefit. Prosecutors have used the broad official misconduct law to pursue cases ranging from a Lincoln County deputy district attorney indicted for attempting to use his position to have sex with a woman involved in a child support case, to an Oregon State Police detective who pleaded guilty last year to charges related to his mishandling of a white supremacist case.

While Kitzhaber and Rosenblum agree there is a need for an investigation, there has been some disagreement about what form that investigation will take,  Willamette Week reports:

There are two different laws that address how the AG can address allegations of public corruption. State law requires that the AG “investigate allegations of corruption or malfeasance by public officials in Oregon.” That law, Oregon Revised Statute 180.610(5), does not give the AG subpoena power, the ability to put witnesses before a grand jury, or to prosecute crimes. 

The governor, however, does possess the authority to ask the AG to employ those tools to conduct a full criminal investigation. Oregon Revised Statue 180.070(1) says “the Attorney General may, when directed to do so by the Governor, take full charge of any investigation or prosecution of violation of law in which the circuit court has jurisdiction.” 

Even though Kitzhaber is discouraging a criminal investigation, Hayes shuffled her legal team — eschewing the same lawyers used by Kitzhaber in favor of Whitney Boise, who is regarded as one of the state’s best criminal lawyers, according to WW:

In response to an emailed question from WW regarding Hayes’ communications—which she and the governor’s office have refused to release—[Hayes’ ex-attorney Jim] McDermott sent the following message: 

“My firm has been representing Gov. Kitzhaber and Ms. Hayes.  In light of Ms. Hayes’s recent tax situation, Whitney Boise (who is copied on this email) will be taking over the representation of Ms. Hayes.  My firm will no longer be representing Ms. Hayes.  My firm will continue representing Gov. Kitzhaber.

The Portland Tribune expanded on what McDermott was referring to:

The “recent tax situation” McDermott referenced became apparent after the Pamplin Media Group/EO Media Group Capital Bureau reported on Jan. 27 that Hayes was paid $118,000 early in Kitzhaber’s third term to serve as a fellow for a Washington, D.C.-based nonprofit that has done political work in Oregon. Hayes had not included that income on tax returns she provided to other news organizations last fall, Willamette Week reported. Kitzhaber and Hayes originally hired the law firm of Ball Janik around the time of the November election to represent the couple during a preliminary inquiry by the Oregon Government Ethics Commission.

Hayes’ new defense team could ultimately handle more than her tax issues. News reports have also revealed Hayes used state resources to benefit her private consulting business, such as by tasking an employee in the governor’s office with arranging travel related to her business. Attorney General Ellen Rosenblum informed Kitzhaber in a letter on Monday that her office had opened an investigation into Hayes’ activities.

Before the legal-team shuffle, attorneys for Kitzhaber and Hayes contended that the first lady is not subject to ethics hearings because she is not a public official, reports

Portland attorneys Stephen Janik and James McDermott told the commission in a filing Dec 8 that three ethics complaints filed against her should be dismissed. The complaints question whether Hayes, who served as an adviser to the governor without a state salary, used her position for personal profit.

Janik and McDermott argued that she is not a public official, not a state employee, and performed no services on behalf of the government. Therefore the ethics commission does not have any jurisdiction over her, they argued.

Now at the helm, Boise has moved to keep Hayes’ correspondence private.

From the WW:

Whitney Boise, the criminal defense lawyer who represents Hayes, filed a motion with Rosenblum’s office seeking to block the release of Hayes’ emails. News organizations, including WW and The Oregonian, have sought Hayes’ emails in order to better understand how she obtained more than $200,000 in private contracts from groups seeking to influence state policy, while she was also serving as first lady and adviser to Kitzhaber.

Boise argued specifically against a request by The Oregonian that Hayes’ emails be released. Boise said the emails are not subject to the Oregon public records law because Hayes is a private citizen, rather than a public official—and even if she is a public official, media requests for her emails are an invasion of privacy. 


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