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Richardson sought conspiracy, fraud probe prior to election

Photo Credit: TRIBUNE FILE PHOTO: JAIME VALDEZ - GOP gubernatorial candidate Rep. Dennis Richardson, right, focused on issues and problems in Gov. John Kitzhaber's administration during a meeting with the Portland Tribune editorial board.Dennis Richardson told you so.

Two weeks before the 2014 general election, Richardson accused Oregon Gov. John Kitzhaber and his fiancee, Cylvia Hayes, of breaking federal anti-corruption laws. Richardson, the Republican nominee for governor, made his accusation in a 13-page letter to Oregon U.S. Attorney Amanda Marshall calling for a federal investigation.

The Kitzhaber campaign accused Richardson of “an obvious political stunt” and Kitzhaber went on to defeat him on Nov. 4 by 49.8 to 44.2 percent. But now, a little more than three months after the election, Kitzhaber has resigned amid such accusations and a federal investigation of him and Hayes is underway.

Remarkably, a federal grand jury subpoena issued by Marshall’s office shortly after Kitzhaber announced he would resign on Feb. 13 closely tracks the accusations laid out in Richardson’s letter — even though it was written nearly four months earlier. The subpoena demands documents from state agencies related to Kitzhaber, Hayes and seven organizations associated with Hayes. Only two of those organizations were not mentioned in Richardson’s letter.

But more than that, the letter outlined the legal case the federal government may very well be pursuing. Although Marshall’s office will not say anything about the investigation, the letter lays out reasons to believe Kitzhaber and Hayes committed what is called “honest services” fraud by allowing money — in this case, payments to Hayes by the organizations — to influence government decisions. Related crimes outlined in the letter include bribery, money laundering and conspiracy.

Richardson is not claiming sole credit for the federal investigation. In fact, he says the accusations in the letter were based entirely on news reports about Hayes’ business dealings that had been published at the time. But the letter pulled them all together into a coherent narrative that lends credence to the fraud allegation.

“The thoroughness of the letter, I believe, contributed to the federal investigation that is currently occurring, only to the extent that it set forth in a coherent fashion the allegations and evidence of unethical and corrupt behavior that deserves to be investigated,” Richardson says.

Kitzhaber denies any wrongdoing. He claims to have been charged, tried and convicted by the media without due process. Even Richardson says only a complete investigation will reveal the truth.

Kitzhaber and Hayes have retained separate criminal defense attorneys. And they both also are seeking to prevent the release of personal emails stored on state computers in a different criminal investigation launched by Oregon Attorney General Ellen Rosenbaum. A possible investigation by the Oregon Ethics Commission is on hold until the criminal investigations are completed.

Law firm report

Richardson’s letter was researched and written by Charlie Spies, a Washington, D.C., former Federal Elections Commission counsel who has advised numerous political action committees and candidates, including Mitt Romney. The Richardson campaign paid $7,000 to Spies’ law firm, Clark Hill, on Nov. 3, 2014.

At the time the letter was written, Oregonians were just beginning to learn about Hayes mixing her private consulting work with her public roles as honorary first lady and an unpaid energy adviser to Kitzhaber.

Willamette Week had published a story on the dual roles on Oct. 8, but with around one month to go before the general election, voters probably were paying more attention to her subsequent admission of a short-term illegal marriage to an immigrant for $5,000.

The letter analyzed Hayes’ relationship with five organizations that appeared to conflict with her public duties. The organizations were: Demos, a New York-based public policy organization; Energy Foundation, a San Francisco-based nonprofit fighting climate change; Resource Media, a Seattle public relations firm working against coal exports; the Waste to Energy Group, a for-profit California company trying to secure a contact to covert methane at a Bend landfill; and the Oregon Business Council, a business group that provided a spokesperson for Hayes.

“Mr. Kitzhaber and Ms. Hayes’ ostensible criminal activity stems from the First Lady’s dual role as a ‘public official’ and ‘policy adviser’ to Mr. Kitzhaber, and as a private energy and economic consultant who received compensation from numerous profit and non-profit companies to represent interests before Mr. Kitzhaber’s administration,” reads the letter.

One of the additional organizations in the subpoena is Rural Development Initiatives, a nonprofit promoting rural jobs.

The other is the Clean Energy Development Center, a Washington, D.C., nonprofit fighting climate change. News of her involvement with the two organizations did not surface until after the election.

The EO Media Group/Pamplin Media Group was the first to report that Hayes received $118,000 from the Clean Energy Development Center that had not been previously disclosed in January.

The subpoena seeks records related to Kitzhaber, Hayes and the seven organizations from numerous state agencies where news reports say Hayes’ private and public work overlapped. They are: the Department of Adminstrative Services, which serves the executive branch; the Business Development Department/Business Oregon, which is the state’s economic development arm; the Department of Community Colleges and Workforce Development, which is involved in both green and rural job creation; the Department of Energy, which is involved in state climate change policies; the Department of Environmental Quality, which also is involved in climate change policies; and the Department of State Lands, which has energy interests.

Documents related to numerous people associated with the organization and agencies also are demanded. They are to be delivered to the grand jury room in the U.S. Courthouse in Portland on March 10.

Click here to read state Rep. Dennis Richardson's letter to the Oregon U.S. attorney's office.

Richardson speaks out about political scandal

Dennis Richardson has not said much publicly since Oregon Gov. John Kitzhaber defeated him to win re-election last year.

But the former Republican state legislator recently appeared on “Terry Boyd’s World,” a radio show on KPAM 860 AM, where he discussed the scandal that resulted in Kitzhaber’s resignation.

Among other things, Richardson talked about the Oct. 23 letter he sent to Oregon U.S. Attorney Amanda Marshall calling for the kind of federal investigation into Kitzhaber and his fiancee, Cylvia Hayes, that is now happening. The Portland Tribune followed up with Richardson last week, asking him how he feels about the resignation, the investigation, and whether he would consider running for governor again.

Portland Tribune: Your Oct. 23 letter to Oregon U.S Attorney Amanda Marshall contains very specific accusations against former Oregon Gov. John Kitzhaber and his fiancee, Cylvia Hayes. The federal subpoena issued nearly four months later appears to track those accusations. Do you think the letter played a role in launching the federal investigation?

Dennis Richardson: The thoroughness of the letter, I believe, contributed to the federal investigation that is currently occurring, only to the extent that it set forth in a coherent fashion the allegations and evidence of unethical and corrupt behavior that deserves to be investigated. An investigation does not imply guilt, and in America a person is to be considered innocent until proven guilty. John and Cylvia should be exonerated or convicted, but either way, the public deserves to know what really has gone on while Kitzhaber was governor.

Tribune: How was the letter prepared?

Richardson: I hired a key Washington, D.C., lawyer who had experience with federal investigations and prosecutions of elected officials to research and write the letter. As you have read, our letter was very detailed and sets forth allegations against John Kitzhaber and Cylvia Hayes which are more egregious than those that convicted Virginia’s Gov. Bob McDonnell and his wife. McDonnell has, I believe, been sentenced to two years in prison for violating “honest services,” which is a federal crime intended to punish elected officials who become corrupt.

Tribune: Was the letter based only on what had been reported at that point, or did you have any additional information that went into it?

Richardson: My Oct. 23, 2014, letter was based on information reported in various media and not on any inside information I had.

Tribune: Do you think the letter received enough coverage in the media at the time?

Richardson: I’m disappointed that the media did not more fully inform the general public about the extent of the corruption that occurred by the governor and under his watch. For a leading Oregon newspaper to endorse Kitzhaber, when it had substantial evidence that he was guilty of high crimes and misdemeanors, then four months later call for his resignation, is a sad political commentary on the publication. There are those who firmly believe that such actions were motivated more by political considerations to ensure a Democrat remained Oregon’s governor than promoting the best candidate in the gubernatorial election.

I did my best to inform the voters of the corruption of the governor and his first lady, but so many just didn’t want to see it. Under John Kitzhaber, it was about looking good instead of doing good. With the governor’s recent attempt to get thousands of emails erased from the state’s computers, he, once again, has shown that he believes he is above the law.

Tribune: What is your reaction to Kitzhaber’s resignation?

Richardson: In short, the resignation by John Kitzhaber was the right thing to do. Unfortunately, for him, and for Oregon, it was four months too late.

Tribune: How do you feel, personally, about the fact that the man who defeated you had to resign just a few months later?

Richardson: I’m disappointed that I lost the election, but I have no ill will toward John Kitzhaber. I did the best I could and lost. In any of my endeavors I’m only responsible for my efforts, not for the outcomes.

Tribune: Would you consider running again in two years?

Richardson: All Republicans I know want the best candidate to run. It is too early to tell who the Republican candidate for governor will be.

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