Kitzhaber Voted for Pension Bill in 1987 that Got Him 8 More Years of Benefits
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Monday, February 16, 2015
Joanna Evoniuk, GoLocalPDX Contributor
Outgoing Oregon Governor John Kitzhaber voted for legislation in the late 1980s that directly benefited his state pension, records obtained by GoLocalPDX reveal.
In 1987, as President of the Senate, John Kitzhaber voted for a bill that affected pension benefits for a few legislators, including himself. Two of his colleagues admitted they stood to possibly benefit from the bill. Kitzhaber did not, even though he went on to gain eight retroactive years for his pension.
Dan Re, a Bend attorney who has studied PERS legislation and fought to make legislator's PERS records public, said that Kitzhaber had a clear conflict of interest and that his actions in 1987 where a prelude to future wrongdoings.
“Kitzhaber’s playing around with Oregon law to benefit himself did not start now, or a few years ago,” Re said. “It’s been going a long time and the first public record of it is in 1987.”
The passage of House Bill 2736 in 1987 allowed Kitzhaber to begin enrolling in the Public Employee Retirement Savings (PERS) program in 1988, with eight years of retroactive benefits dating back to 1979.
Kitzhaber, who announced his resignation Friday, voted yes on the 1987 bill, according to the voting records in the year’s House Journal. However, Representatives Grattan Kearns and James Simmons declared conflicts of interest to the legislative assembly, acknowledging they could personally benefit if the bill passed, according to the voting record.
The outgoing governor is currently facing a state ethics review and a criminal investigation surrounding his political and financial involvement with his fiancée, Cylvia Hayes, and her use of public office to advance her private consulting business.
Re argued the outgoing governor’s vote in the late 1980s betrayed a history of ethical missteps made by Kitzhaber while holding public office, in contrast to the legislators who argue “this isn’t the John I know.”
Pension Legislation
The intention of HB 2736 was to allow legislative members to retroactively join the PERS pension system. The law allowed legislators who met a set of criteria and deadlines to gather benefits for the years in which they were working for the state, but not yet enrolled in the system.
Kitzhaber not only fit the requirements, he voted for the bill and took advantage of the new law soon after it came into effect.
Kitzhaber was first elected to the House of Representatives in 1979 but did not enroll in PERS at that time, even though eligible, according to PERS records.
In 1987, when Kitzhaber was President of the Senate, HB 2736 was introduced in the House, aimed specifically at current and previous members of the legislative assembly.
If a legislator joined the assembly after 1975 and before 1988, he or she was then eligible to enroll in PERS with the passage of HB 2736. Also, if an elected member paid the back-dated years of PERS employee contributions before July 1, 1989 they would receive retroactive benefits.
Legislative experts argue a bill amending PERS statutes can affect thousands of public employees, so passing legislation is not necessarily a conflict of interest. However, this measure was specifically for the legislative assembly.
In 1987, most state senators and representatives were already enrolled in PERS. In 1983, for example, Kitzhaber was one of only six elected officials out of 90 who were not enrolled in the system, according to a public records request of members of the assembly enrolled in PERS.
The bill passed with a strong majority in both the house and the senate. Kitzhaber voted in favor of the bill and did not declare a conflict of interest.
Kitzhaber Joins PERS
Soon after the bill was signed into law, Kitzhaber began taking steps to retroactively join PERS. On March 1, 1988, Kitzhaber began paying checks to PERS, over the next year for a total of $5,183.94. The last payment was on June 1, 1989, one month before the cut-off date to qualify for the retroactive enrollment on July 1, 1989.
According to PERS records, Kitzhaber was enrolled in the pension plan by the end of 1989.
“The case in 1987 you can’t classify as anything else than using his office to benefit himself,” Re said. “He could have stopped [the legislation]. As presiding member of the senate, he had the power to stop it.”
Allowing employees to retroactively join PERS is common practice with many state organizations, according to attorney Bill Spiry, who has worked to transfer city employees into PERS.
“You see it happen when groups not covered by PERS are integrated into PERS,” Spiry said. “Not everyone takes part or is required to do that. But PERS is a good retirement plan, especially the old PERS system.”
Voting for Pensions
The legislative assembly has made a number of changes to their specific PERS pensions over the years. Legislators could first enroll in the system in 1971. In 1975, the house passed a similar bill to HB 2736, allowing legislators to retroactively join PERS and another that allowed them to earn retirement credit after 65.
Although Re said any breach of ethics codes have passed the statute of limitations, the actions of Kitzhaber and the legislative assembly show how lawmakers took advantage of their position to benefit their personal pensions down the road.
“Kitzhaber saw he could do that and no one would hold him accountable,” Re said. “Nothing is going to be changed with PERS legislation now. It was just hidden and nobody looked at this stuff. No one cared.”
Related Slideshow: Timeline of Cylvia Hayes’ Life and Misdeeds
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Marriages
March 28, 1989
Hayes divorced Todd Hayes in the state of Washington
Dec. 17, 1996
Hayes divorced Doug McCarthy
July 19, 1997
King County, Washington marriage records revealed Hayes married an 18-year-old Ethiopian immigrant, Abraham B. Abraham. There was no record of the couple living together and four years and three months later they filed for divorce, which was finalized in 2002. Hayes admitted to being paid $5,000 for the marriage, which she said she used to pay for school expenses and did not report in her taxes.
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Evergreen State College
1994-1997
Hayes transferred to Evergreen from Bellevue Community College to earn a bachelor's degree in environmental studies in 1994. There she played on the woman's soccer team and was awarded academic and athletic scholarships. She stayed on at Evergreen to earn a master's degree in Environmental Studies in 1997.
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Alleged pot farm property
1997-1998
Hayes and her then boyfriend bought property in Okanogan, Washington near the Canadian border. Hayes admitted the property was intended for marijuana growth, although she said the operation “never materialized” and that she was never financially involved. However, the person who took over the property said that Hayes and her boyfriend stopped making payments and that there was evidence of marijuana being grown there. She gave up her interest in the property in April 1998.
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Bend
1998
Hayes moved from Washington to Bend, Oregon. Hayes has said she lived in a tent on Bureau of Land Management (BLM) land over the summer while she got established in the area and finished her thesis.
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3EStrategies
1998
Hayes founded 3EStraegies in Bend, a clean economy consulting firm. The business was built from Earth Connections, a nonprofit organization Hayes created two years earlier. In 2009 she converted 3EStraegies into a for-profit company.
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Run for office
2002
Hayes ran for the Oregon State Legislature as the House Democratic nominee. She lost to Rep. Ben Westlund from Bend.
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Kitzhaber Divorce
2003
Governor John Kitzhaber divorced his second wife of eight years, Sharon Kitzhaber, after he left the governor’s office in 2003. The two had become engaged during Kitzhaber’s first governor campaign.
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Kitzhaber and Hayes
2009
The first media report that Kitzhaber had a new relationship with Hayes appeared in the Bend Bulletin.
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Kitzhaber Reelection
2010
Kitzhaber won a third non-consecutive term and took office as governor. He had held the title previously for two terms from 1995 to 2003. He told the press that Hayes would take on the responsibilities and roles of a first lady.
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Investigation by DOJ
August 2010
Hayes was the center of a criminal investigation by the Oregon Department of Justice surrounding a consulting contract she received from the Oregon Department of Energy. Although her firm was ranked last, it was still granted work. Hayes was never accused of any wrongdoing, but the investigation showed state officials had guided a $60,000 contract to her firm.
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Move into Mahonia Hall
December 2010
After Kitzhaber was reelected in 2010, he announced that while he'd be spending most of his time in his Portland home, when in Salem his girlfriend Cylvia Hayes would stay with him in the Governor's mansion, Mahonia Hall.
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Work for the Governor
2011-present
Hayes was placed on a seven-member team by Kitzhaber to write a 10-year energy plan. Hayes also gave speeches as the first lady and policy adviser in the area of energy issues.
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3E Contracts with Demos
March 2013
Hayes signed a $20,611 consulting contract with Resource Media, a firm that had contacted Kitzhaber’s office the year before to promote a Pacific Coast climate and energy initiative.
May 2013
Hayes signed a $40,000 contract with the nonprofit Energy Foundation, who she had worked with as part of her duties as a Kitzhaber adviser. Hayes had spoken at an Energy Foundation event in 2012 and emailed them in the start of 2013, mentioning funding for the company.
June 2013
Hayes signed a $25,000 contract with Demos. Hayes spoke and moderated a Demos panel, but was introduced as Oregon’s first lady, rather than a paid consultant.
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Engagement
Aug 2014
Kitzhaber and Hayes announced their engagement. However, no wedding date was announced.
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Expose on Hayes
Oct. 8 2014
The Willamette Week published an expose on Hayes alleging that her role as a private consultant and her position as Oregon's "first lady" presented a conflict of interest and an ethics violation.
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Confession
Oct. 9, 2014
In a press conference, Hayes admitted to an illegal green card marriage in 1997. She said that she told Governor Kitzhaber about the illegal marriage only a day before the news went public.
Oct. 13, 2014
Hayes admitted to KOIN 6 NEWS that she had lived on a property in Okanogan, WA used for growing and selling marijuana.
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Investigation called for
Oct. 14, 2014
The Oregon GOP called for an investigation into both Cylvia Hayes and the governor over allegations of self-dealing outlined in the Willamette Week.
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The bank loan
Oct. 15, 2014
The Willamette Week wrote that the Governor’s office had helped extend a government loan for a former client of Hayes’ consulting business in Bend, Oregon. The owner of a golf course was given an extension on his loan from the Oregon Department of Energy after the Department was persuaded by Kitzhaber's staff. The owner wrote a thank-you note to Hayes, Kitzhaber’s chief of staff and his business advisor for their help with the situation.
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Ethics Commission
Oct. 15, 2014
The GOP filed a complaint with the Oregon Government Ethics Commission against Kitzhaber, Hayes, and the governor's unpaid advisor Patricia McCaig. It claimed there was a “conflict of interest transactions, employment relationships, benefits from public contracts, usage of public buildings and staff for personal financial gain and business."
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Rep. Berger complaint
Oct. 16, 2014
State Representative Vicki Berger (R-Salem) filed a complaint against Hayes with the Oregon Government Ethics Commission. Berger said in her statement, “I am asking for a full investigation of the possible misuse of state resources by Ms. Hayes.”
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Former boyfriend speaks
Oct. 21, 2014
Karl Topinka, Hayes' former boyfriend she owned the pot farm in Washington with, told the Daily Mail that Hayes couldn't be trusted. He also said the pot farm was all her idea and she had done the planning. Topinka said Hayes failed to tell him of her illegal marriage that had taken place shortly before.
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Ethics document
Oct. 25, 2014
Governor Kitzhaber did not list Hayes in an ethics document consisting of lobbyists he had a relationship with, GoLocalPDX reported. In a section where he was supposed to disclose “any compensated lobbyist who was associated with a business with which you or a member or your household was associated during 2013,” Kitzhaber wrote “N/A” or not applicable.
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Open records complaint
Oct. 29, 2014
GoLocalPDX.com filed a complaint with the Attorney General of Oregon against the Governor’s office for failure to comply with the open records law. A request for information to determine if the Governor had received income from Hayes’ consulting contracts was ignored for over two weeks, prompting the official complaint.
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Opponents demand records
Oct. 30, 2014
Republican governor candidate Dennis Richardson was joined by Democrat Ifeanyichukwu Diru, Kitzhaber’s primary opponent, in a press conference demanding the Governor release records relating to the scandal.
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Kitzhaber leads polls
Oct. 31, 2014
Governor Kitzhaber led by 10 points over opponent Richardson in a recent poll released by KATU a few days before the 2014 election.
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Hayes Speaks Out
Nov. 6, 2014
Cylvia Hayes made her first public statement since her confession that she had been part of an illegal sham marriage. The statement which she made via her Facebook page reads:
"I just want to thank all of you who have sent such support and encouragement over these past very challenging weeks. In the midst of the storm the positive incoming from friends, family and colleagues has been enormously helpful. Thank you for taking time to reach out."
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Federal Investigation
Cylvia Hayes could face federal fraud charges for her dual role as a private consultant and public official in the Governor’s office, a series of legal experts told GoLocalPDX.
The findings of an Oregon Ethics Commission investigation will determine whether Hayes violated state ethics laws when she accepted contracts for her private consulting firm while working in the governor’s office under the title of “Oregon’s First Lady.”
On Jan. 9, Willamette Week reported Hayes was under federal investigation, raising the specter of federal charges.
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Press Conference
Jan. 30, 2014
Governor John Kitzhaber held a press conference and responded to questions surrounding investigations, ethics violations and Cylvia Hayes. When asked if he would resign, he said “I was elected by the people of this state to do a job, and I intend to do it.”
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Plagiarism
Feb. 11, 2014
A GoLocalPDX investigation into the writings of Cylvia Hayes found portions of her Green Jobs Growth Plan: 2011-2019 report were plagiarized from a pre-existing state report.
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