Kitzhaber told staff state policies should match Cylvia Hayes' paid agenda
Governor Kitzhaber responds to questions regarding fiancee Cylvia Hayes
Gallery: Governor Kitzhaber responds to questions regarding fiancee Cylvia Hayes
By Nick Budnick | The Oregonian/OregonLive
John Kitzhaber told his staff that new state energy policies should match those that special interests were paying his fiancee to promote, newly released records show.
Former first lady Cylvia Hayes' influence in state government has been well documented but for the first time there is evidence Kitzhaber set the tone on intertwining her private and public roles.
The directive could be significant as federal investigators dig into whether Kitzhaber and Hayes engaged in illegal influence peddling -- promising or trading government action for money. The FBI and IRS are investigating. Legal experts said Kitzhaber's statement as his staff wrestled with Hayes' role could strengthen the case for an indictment.
Kitzhaber maintained before he resigned in February that his administration separated Hayes' outside paid work from her role as first lady and policy adviser. But a memo obtained from the private email archives of a key Kitzhaber staffer contradicts that claim.
"Cylvia needs to be advocating the same clean economy policy in her role as spokesperson/advocate for the Governor's Office and her role as a Clean Economy fellow. There cannot be any daylight between them," Kitzhaber wrote in August 2011. "This is another reason why she needs a role in developing the (state) policy itself."
Document: The memo
Attorney comments
Here are the full comments from the attorneys who represent former Gov. John Kitzhaber and his fiancee, Cylvia Hayes.
"This article is not the appropriate forum for debating what transpired or the conclusions and inferences you have reached. We disagree with your factual determinations but have confidence these issues will be favorably resolved through proper due process of law."
-- Janet Hoffman, a Portland criminal defense attorney representing Kitzhaber.
"We are continuing to work with the U.S. Attorney's office to provide the information they request for their investigation. Given that the Oregonian is a party in a lawsuit against Ms. Hayes, and in light of the serious inaccuracies and apparent bias in the Oregonian's reporting to date, we will not respond to media inquiries from the Oregonian. It is clear from the wording and tone of the questions you posed that this is yet another attempt to create smoke from emails that contain no smoking gun."
-- Federal Public Defender Lisa Hay, who represents Hayes.
Kitzhaber inserted the note into a memo being drafted by his staff to govern Hayes' participation in the governor's office.
Hayes has said she took $118,000 over two years from the Clean Economy Development Center, a national advocacy group. The records now show that Kitzhaber rejected his staff's advice on addressing ethical concerns over that arrangement.
Kitzhaber and Hayes said through their attorneys last week that they would not comment or respond to written questions.
"This article is not the appropriate forum for debating what transpired," said Janet Hoffman, Kitzhaber's attorney.
"This is yet another attempt to create smoke from emails that contain no smoking gun," said Federal Public Defender Lisa Hay, who is representing Hayes.
The Clean Economy Development Center also didn't respond to written questions.
Kitzhaber's note was the only such directive among 967 private emails between Kitzhaber, Hayes and key staffers. The records from personal email accounts weren't maintained in state files. Instead, The Oregonian/OregonLive obtained them through public records requests to Kitzhaber's two former chiefs of staff, Curtis Robinhold and Mike Bonetto.
The release underscores how the Kitzhaber administration operated through back channels that couldn't be traced through government records. Kitzhaber himself relied on a personal email account to conduct government business - emails his attorneys are now fighting to keep from the public and investigators.
Gov. Kate Brown subsequently ordered staffers not to use personal email accounts for public business and to immediately turn in any state-related messages received on private accounts.
Her office currently is reviewing thousands of Kitzhaber's private emails for release.
Three law professors said the memo could boost the odds that Kitzhaber is indicted.
Laurie Levenson, a former federal prosecutor who is a professor at Loyola Law School, said the memo appears to show Kitzhaber saying "she's working for them, and we better put her in a role where she can deliver."
Ben Gaskins, an assistant professor of political science at Lewis & Clark College, said that "the email shows Kitzhaber not only tacitly endorsed Hayes' work in his office, but also required it. He is directing that this connection continue and be the official stance of his administration."
Hayes operated a Bend consulting firm specializing in renewable energy when Kitzhaber took office in 2011 for his third term.
Kitzhaber designated her first lady and placed her in a powerful role as a government policy adviser.
Kitzhaber sent the August 2011 email regarding Hayes' policy work to Robinhold, then his chief of staff.
"We were really in uncharted waters in 2011, and staff was working with the governor to clarify the role of the first lady," Robinhold told The Oregonian/OregonLive. "We worked hard to address and avoid potential conflicts as we understood them."
That work was still underway in September 2011 when Hayes took on the paid fellowship with the Clean Economy Development Center.
Kitzhaber subsequently teamed Hayes with his top aides to develop a "clean economy" policy that focused on industry and jobs with low environmental impact. In October 2011, he appointed Hayes to a task force creating his 10-year energy action plan.
In a defiant news conference more than three years later, Kitzhaber insisted that he and his staff were sensitive to ethical concerns about conflicts of interest.
"We tried to separate her volunteer work as first lady from her paid work," he said at a January news conference about two weeks before he resigned.
He didn't answer questions then about the fellowship, instead referring those questions to his fiancee.
But the new records show significant internal debate about whether what Hayes was doing was proper.
In the memo defining Hayes' role, Robinhold recommended that the first lady not work on state energy policy while she was on contract with private clients interested in Oregon energy policy. He said that Hayes should complete a conflict-of-interest form disclosing her fellowship.
Such forms allow the governor's legal counsel to assess ethical issues and set boundaries.
Kitzhaber saw no conflict.
"I think the only conflict has to do with her private consulting practice, not with her fellowship," Kitzhaber wrote in the memo.
Document: Email discussing the memo
Hayes questioned the need to submit a conflict-of-interest disclosure to his staff attorney, seeking clarification.
"Is this really mutually exclusive if I sign a conflict of interest form? If so, I will pretty much have to either forgo consulting or any policy involvement with our administration."
Though it was Hayes' biggest publicly known source of income during Kitzhaber's term, the governor's office has no record she submitted a conflict-of-interest form.
In 2012, leaders of the Clean Economy Development Center reported that Hayes helped Oregon with "a strategic approach to preventing the development of coal export facilities on the west coast."
This is the first indication Hayes was paid to work on coal policy, but the exact impact of her participation remains unclear. Kitzhaber came into office with a strong environmental ethic but had kept quiet about his views on coal.
As three out-of-state corporations sought permits to build exporting facilities in Oregon, Hayes regularly emailed Kitzhaber and his top aides that she felt there was no room for coal in the energy policy that she was helping to create. She argued that Kitzhaber and his administration should not delay in opposing the export facilities.
At one point, Hayes shared with Kitzhaber aides an anti-coal article from an advocacy group bashing one of the three corporations trying to build a facility in Oregon.
That drew criticism from Scott Nelson, Kitzhaber's economic policy adviser.
"This is a red herring and does nothing except boost fundraising opportunity for the environmental groups," Nelson wrote. He said Oregon would be wasting time trying to affect global coal export policy.
Document: Read the email
Hayes didn't relent, responding a half hour later that "hard-headed expediency will sink the U.S. and the planet if we continue to avoid the hard choices needed to break our fossil fuel addiction." She copied her email to the governor and his chief of staff.
As her fellowship ended, Hayes entered into a $20,611 contract in February 2013 with another group opposing coal exports. Her job was to "build stronger commitment among key West Coast audiences to develop and support policies that conserve our marine resources and boost our West Coast economy."
While the contract made no mention of coal exports, rising acid levels in the oceans are directly related to coal and other carbon fuels.
Another group opposed to coal exports retained Hayes in May 2013 under a $50,000 contract to work on clean economy policies.
In February 2014, Hayes emailed top staffers that her updated responsibilities for Kitzhaber included acting as his "surrogate and clean economy expert." That included coal.
Two months later, Kitzhaber surprised a crowd at an environmental group's dinner with his firmest declaration yet about coal.
"It is time once and for all to say no to coal exports from the Pacific Northwest," he told the Oregon League of Conservation Voters.
-- Nick Budnick and Laura Gunderson
nbudnick@oregonian.com lgunderson@oregonian.com
@nickbudnick @LGunderson