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The Portland Business Alliance is now questioning a 2020 audit that focused on Downtown Clean & Safe.

PMG FILE PHOTO - A Downtown Clean and Safe worker on his daily rounds.The Portland Business Alliance is accusing the Portland City Auditor's Office of allowing anti-business activist organizations to hijack a 2020 audit that criticized the lack of city oversight over Enhanced Service Districts, including the one served by Downtown Clean & Safe.

That district is affiliated with the alliance and provides security, cleaning, business promotion, visitor information and other services in the downtown area.

The Portland Tribune has confirmed the auditor's office had extensive contacts with activist organizations who want to abolish Downtown Clean & Safe. Some belong to a coalition of organizations called End Clean & Safe. They include the Western Regional Advocacy Project, a San Francisco-based organization working to end enhanced service districts — also known as business improvement districts — in multiple cities.

"We are shocked to learn that a San Francisco-based dark money lobbying organization and its local partners were able to pass official city business by effectively co-writing an audit that was presented to the city council and to the public as the independent work of the auditor," the alliance told the Portland Tribune. "At a minimum, an independent investigation must be conducted to understand how this audit was written, who had power over its creation, and the inexplicable control that was exerted by extreme political lobbying organizations with national affiliations."

The auditor's office confirms it had numerous contacts with the organizations, including emails, phone calls, and in-person meetings both in and outside of City Hall. The auditor's office also received a Google Drive folder with documents from Western Regional Advocacy Project — also known as WRAP.

But the auditor's office defends the contacts as routine, calling the organizations "stakeholders" who represent homeless people in the districts.

"We follow the same professional standards and process for every audit, which includes obtaining information from diverse sources about the topic at hand. Our conclusions are based on evidence. Our evidence is in the public record," said City Auditor Mary Hull Caballero, who noted that Downtown Clean & Safe officials also were interviewed.

The audit, titled "Enhanced Service Districts: City provides little oversight of privately funded public services," was released in August 2020. It led the council to change the city's $5 million contract with Downtown Clean & Safe the following month. Among other things, the organization's security guards must now wear uniforms that make them easy to distinguish from police officers, only 25% of them can be armed, and they will be joined by a new three-person mental health team. The organization also must increase the reporting of its activities and spending to the city.

In addition, the council authorized a review of all three service districts in the city, including the Lloyd and Central Eastside districts, and the organizations that manage them. And the council only extended its contact with Clean & Safe for five years instead of the usual 10.

After it was released, the audit won a Distinguished Knighton Award from the Association of Local Government Auditor's.

"The audit found the City's hands-off approach to special district management may lead to disparate law enforcement outcomes in districts. This audit's subject matter is responsive to the needs of decision makers and the public. Additionally, it addresses a couple very relevant topics: law enforcement and equity. Auditors did a great job clearly summarizing information, The report was clear and the findings were well supported," the association said.

Alliance surprised by activist contacts

Downtown Clean & Safe has long been controversial. Homeless advocates and police critics complain its employees and contracted personnel harass the homeless and make them more likely to be charged with crimes.

But no one in the Portland Business Alliance or Downtown Clean & Safe knew about the contacts between the activist organizations and auditor's office until the September 2020 online hearing, at which their contact was changed and renewed. Dozens of people testified against renewing the contract, including several who had previous been in contact with the auditor's office. Many cited the audit as justifying the cancelation. Testifying from San Francisco, WRAP Director Paul Boden took credit the audit happening in the first place.

That comment caught the attention of the business alliance representatives at the hearing. The alliance's law firm subsequently served a public records request on the city for all contacts between WRAP and the auditor's office. It received hundreds of emails and other records documenting the contacts, including the contents of the organization's Google Drive folder from the auditor's office.

The contacts began months before the auditor's office publicly announced it was going to examine the service districts. Borden wrote the auditor's office and Commissioner Jo Ann Hardesty, who has long been critical of the alliance, on Nov. 18, 2019, with WRAP's concerns about service districts. The letter also proposed an outline for the audit to follow.

PMG FILE PHOTO - The Downtown Clean and Safe Enhanced Service District covers much of the city center, inlcuding Old Town.The auditor's office did not announce its upcoming audit schedule until June 5, 2019.

Several subsequent emails from Boden to the auditor's office end with a quote attributed to John Maynard Keynes which reads, "Capitalism is the extraordinary belief that the nastiest of men, for the nastiest of reasons, will somehow work for the benefit of us all."

"These records bring to light that the auditor's office provided unfettered access and influence to an unregistered lobbying organization, which produced a so-called 'audit' that directly aligns with this organization's extreme public policy agenda," the alliance said.

After learning about the request, the Portland Tribune asked for and received the documents from the alliance.

After being contacted by the Tribune for comment, the auditor's office provided access to the work files for the audit. Although they did not include all of the emails obtained by the alliance, they confirm the auditor's office received information from the activist organizations early in the audit planning process and throughout the course of the audit itself. Audit staff also briefed the activist organizations on the progress and findings of the audit before it was released.

In fact, the work papers show that only two groups of stakeholders were interviewed during the audit. One group was the activist organizations identified as "Homeless Advocates." The second are employees of the business associations that operate the districts. Representatives of a third group, neighborhood associations, were not interviewed because of COVID-19 pandemic restriction. That means downtown and Old Town residents, small businesses and nonprofit organizations did not have any direct input into the audit.

The auditor's office also met with Hardesty, who said that she had previously attended a conference that included WRAP in San Francisco.

"Comm Hardesty wondered why we even have private entities funding public services. She said her concern is that the private entity determines who gets justice (within their district boundaries)," reads a summary of the March 3, 2020, meeting.

The auditor's office did not meet with any other council members about the audit, although it notified all of them it was scheduled.

Office defends audit

The auditor's office denies it did anything improper.

It says stakeholder groups frequently are identified early in the audit planning process and contacted for information. One example provided to the Portland Tribune was an April 2022 audit on police intelligence-gathering and surveillance. Stakeholders included organizations that have historically criticized the police, such as the American Civil Liberties Union Oregon, PDX Privacy, Portland Copwatch, Secure Justice and the Western States Center.

More than that, the auditor's office said the audit focused on city oversight of the service districts, not the districts themselves. It only included a few limited criticisms of the districts, such as noting that "some of the districts' activities are not benign to some community members, such as when someone sleeping on a sidewalk or blocking a business entrance is confronted by an armed security officer."

The audit also included a quote from unidentified advocates for the homeless that said, "The districts fund services that have contributed to the increase in criminalization of the homeless."

The Portland Business Alliance also is upset that WRAP and its local affiliates are not registered as lobbyists. The records obtained by the alliance and the audit work papers show extensive contacts with the auditor's staff and even some City Council staff members. City rules administered by the auditor's office say lobbying entities must register if they spend more than eight hours or $1,000 on lobbying activity in any quarter.

Organizations involved in the End Clean & Safe Coalition include WRAP, Stop the Sweeps Portland, Sisters of the Road, Democratic Socialists of America, Hygiene 4 All, the Oregon Justice Resource Center, the ACLU of Oregon. Most are not registered with the auditor's office and none reported lobbying activities during the course of the audit.

"These organizations never registered as lobbyists nor disclosed their lobbying activities, despite public records showing thousands of hours and documents to advance a very specific political agenda to end enhanced service districts in the city. More shocking to us is that it is the auditor's responsibility to oversee lobbying disclosures so it should have been patently obvious that none of these organizations were registered to lobby the city, and that none of these lobbying activities were disclosed," said the alliance.

Hull Caballero said if the alliance has any information related to a lobbying violation, it can file a complaint with her office.

A previous Portland Tribune story on the audit can be found here.

What are Enhanced Service Districts?

Portland has three Enhanced Service Districts that were formed to collect fees from properties within their boundaries to fund services supplemental to those already provided by the city government.

PMG PHOTO: JOSEPH GALLIVAN - Indigenous Come-Up, featuring clothes and crafts made by native Americans and Africans, was one of seven Pop-Up stores underwritten by Clean and Safe last holiday season to help small businesses and boost the downtown economy. The districts are different in their budget size, scope of services and management structure. They are managed by their respective business associations and governed as non-profit organizations. They are traditionally up for renewal by the Portland City Council every 10 years, but fee collection can be terminated during any year if property owners who together contribute more than 33 percent of the district's total revenue submit a written objection to the city.

The Downtown Clean & Safe district, managed by the Portland Business Alliance, is the largest and oldest district. It was formed in 1988 and has an annual budget of $5 million. Services include cleaning of streets and sidewalks, public safety and business development.

The Lloyd District, formed in the 2000s, is managed by Go Lloyd, has an annual budget of $500,000. It focuses on transportation incentives and urban development.

The newest is the Central Eastside Industrial District, which was formed in 2019. It is managed by the Central Eastside Industrial Council and has an annual budget of $3 million. It provides security and street maintenance services, transportation incentives, business development and workforce investments.

Once a district is approved, the fee formula, district boundaries and the process for dissolving the district is included in the City Code. The City Revenue Division collects the fees, deducts an administration fee and distributes the remaining revenue to the district board to pay for services.

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