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Former Gov. John Kitzhaber will have to pay a $20,000 civil penalty for 10 violations of state ethics laws and conflicts of interest related to his fiancee, Cylvia Hayes' private consulting work.

PARIS ACHEN/CAPITAL BUREAU - Left to right at table, attorney Janet Hoffman and former Gov. John Kitzhaber wait for a decision by the Oregon Government Ethics Commission on a proposed $20,000 settlement of ethics complaints against the former governor, during a meeting in Salem March 30, 2018.SALEM — The Oregon Government Ethics Commission voted unanimously Friday to accept a settlement that fines former Gov. John Kitzhaber $20,000 for misusing his office and for conflicts of interest related to his fiancee, Cylvia Hayes' consulting firm.

The settlement — less than half of the maximum $50,000 for the violations — ends three years of investigations and media attention on an influence-peddling scandal that prompted the governor to resign in February 2015.

"I say this is a bright day for the state because this is a state where we will show the people of Oregon and public officials that ethics laws do mean something. It will enhance their trust in government. I think that's very good," said Commission Vice Chair Richard Burke.

In February the commission made preliminary findings that Kitzhaber had violated ethics laws on at least 10 instances while he was governor between 2011 and 2013.

He violated a law prohibiting use of his office for personal financial gain at least twice when he took actions that benefited Hayes's environmental consulting firm, 3E Strategies, investigators wrote in the report. Hayes served as first lady and lived in the governor's residence in Salem with Kitzhaber.

She acted as an adviser to the governor on issues she was being paid for in her private consulting work. As an adviser, she was subject to state ethics law.

Meanwhile, her earnings from clients who sought to influence environmental policy in the state were counted as part of the couple's household income in mandatory statements of economic interest.

"The commission made no finding that former Governor Kitzhaber intentionally used his position as governor to advance the financial interests of Ms. Hayes or 3E Strategies," states the proposed stipulated final order, released Wednesday, March 28. "Such intent is not a necessary element."

As governor, he was "personally responsible to ensure that he did not engage in any policy decisions, discussions, speeches, meetings, directives to staff or official actions that would further the financial interest of 3E Strategies," they wrote.

"I served this state with honor and integrity for over 26 years," Kitzhaber said Friday. "While I do not believe there is any evidence that I intentionally misused my office, I do acknowledge I did violate several provisions of Oregon's ethics law."

He said he accepted the commission's findings and said it was his responsibility to seek guidance from the commission when ethical questions about Hayes' consulting work arose.

Kitzhaber attended meetings for which Hayes was either being paid or was seeking contracts with environmental advocacy groups and promoted and advanced her business, they wrote. For instance, he gave a speech in May 2013 at a planning retreat at the governor's residence, Mahonia Hall, to discuss transitioning Oregon to a different economic measurement formula that factors in environmental health. Hayes was being paid by public policy organization Demos for facilitating the meeting.

In addition, Kitzhaber failed to publicly disclose his potential conflicts of interest and actual conflicts in at least seven instances, as required by state law, the investigators wrote.

He also allegedly improperly accepted United Airlines Premier Platinum status, worth an estimated $4,000. That violates Oregon law prohibiting public officials from accepting gifts valued at more than $50. Kitzhaber has said he was unaware that he had received the platinum status.

Kitzhaber and Hayes had been under criminal investigation for more than two years after Willamette Week reported the first lady may have used her position to win several consulting contracts. The scandal eventually prompted Kitzhaber to resign from office in February 2015.

"When these allegations surfaced three years ago, I took them very seriously," Kitzhaber said. "I could have remained in office, but the media frenzy around this matter showed no signs of abating. It was a … huge distraction for the state in general and the 2015 Legislature in particular, and in my view, it was undermining policies that are very important to me and to the state of Oregon. Instead of making the state pay the price of the long process of sorting this all, I elected to step down from office to which I had just been elected."

The commission resumed an ethics review of complaints against Kitzhaber and Hayes in late June after the U.S. Attorney's Office announced no criminal charges would be filed against the couple. The state Department of Justice abandoned its investigation of the couple because its statute of limitation had expired during the federal probe.

In November, Kitzhaber and ethics commission staff members came up with a proposed settlement of $1,000, but the ethics commission rejected that agreement in November, as first reported by the Pamplin/EO Media Group.

The settlement resolves the case against Kitzhaber, but a separate ethics case is still pending against Hayes.

Paris Achen
Portland Tribune Capital Bureau
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