Oregon AG Launches Criminal Investigation of Gov. Kitzhaber and His Fiancee
By Laura Gunderson
Oregon Attorney General Ellen Rosenblum announced Monday that she has opened an investigation into the allegations of public corruption against Gov. John Kitzhaber and Cylvia Hayes.
Through her investigation, launched Friday, Rosenblum has the power to request any records, subpoena witnesses and bring charges against the Democratic governor and his fiancée.
Rosenblum announced the unprecedented criminal investigation nearly two hours after Kitzhaber released a letter he sent asking her to open a "full and independent factual review."
She issued a three-sentence response: "Thank you for your letter," wrote Rosenblum, also a Democrat. "My office has already opened an investigation into this matter. I appreciate your intent to cooperate fully."
The governor's request reversed a stance he had held for months, saying a review under way by the Oregon Government Ethics Commission was sufficient. Calls for a more rigorous investigation increased, however, after recent questions about whether Hayes reported $118,000 in payments on tax returns, and after Kitzhaber deflected questions at a contentious Jan. 30 news conference.
News of the investigation caps a rough couple of weeks for Kitzhaber as criticism mounts over his handling of Hayes' roles as an unpaid policy adviser on clean energy and economic development, and as a paid consultant on the same topics.
Last week -- the day after Rosenblum called the allegations "serious" and "troubling" -- newly released emails showed Hayes directing senior officials as Kitzhaber lent support to hiring a key expert on a policy Hayes pushed.
In his letter to Rosenblum, dated Monday, Kitzhaber complained that the media is in a "rush to judgment" without waiting for the Ethics Commission's conclusions.
The seven-member panel is expected to vote March 13 on whether to move forward with its own formal investigation after reviewing complaints that Kitzhaber and Hayes personally benefited from paid contracts Hayes accepted while working on the same issues in the governor's office.
That process won't be derailed by the AG's investigation.
"We have a much narrower focus," Kenny Montoya, the Salem attorney who serves as the commission's chairman, said Monday. "We only have limited authority to look at ethics laws. Quite frankly, I have no idea what the attorney general's folks are looking at, but I would assure you it's far broader than what we're looking at -- our jurisdiction is very limited."
State law allows the governor to ask the attorney general to investigate and prosecute a potential violation of law.
Last week, Rosenblum had hesitated to comment on the situation because she represents the executive branch. But Kitzhaber also has a staff attorney, and he and Hayes have retained personal lawyers.
The couple originally shared two lawyers from the high-powered Portland firm Ball Janik. On Monday, one of the lawyers, Jim McDermott, wrote in an email that his firm no longer represented Hayes.
"In light of Ms. Hayes' recent tax situation," he wrote, she will be represented by Portland criminal defense attorney Whitney Boise.
Former Oregon Attorney General Dave Frohnmayer confirmed Monday that the attorney general can -- and must -- investigate any possible corruption.
"The fact that you represent an agency in its official capacity doesn't preclude you from investigating individual wrongdoing," Frohnmayer said. "You represent the institution, not the person."
Other former state Department of Justice staffers said, however, that it might be a good idea for Rosenblum to appoint a special prosecutor to erase any perception of conflict between her office and the governor. Kitzhaber appointed Rosenblum to the seat after John Kroger left midterm; she was elected to the seat in November 2012.
"Somebody in an official capacity needs to ask the difficult questions," said Sean Ridell, the former Department of Justice prosecutor who investigated Hayes over alleged contract improprieties in 2010. He added that Rosenblum could hire an outside attorney or retired judge as a special prosecutor.
Some Republican legislative leaders supported the investigation but said they wondered whether a special prosecutor should do the job.
"I would have thought it better to ask for an investigation by a special prosecutor from outside the state or outside the political system," said Senate Minority Leader Ted Ferrioli, R-John Day. "The question is only how does it look to have the Democrats investigating Democrats."
Rosenblum wouldn't comment further on any details of her investigation. She also wouldn't say whether her office will prohibit the governor's office and other state agencies from releasing public records related to the allegations until her investigation is complete, as she did in 2013 as her office investigated allegations against then-Multnomah County Chairman Jeff Cogen. (She decided against charges in that case.)
Kitzhaber made clear in his letter to Rosenblum that he and Hayes would would provide any materials necessary to address "any and all questions or allegations you see fit."
"I deeply regret that this situation has become a distraction from the important work of our state," he wrote, "and look forward to your review and its conclusions."
Nick Budnick contributed to this report
(c)2015 The Oregonian (Portland, Ore.)