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Former deputy who highlighted malfeasance gets $510,000, says leaders subjected her to hostile environment.

The state has agreed to pay $510,000 to settle a lawsuit brought by a former deputy director at the Oregon Office of Emergency Management.

PMG/EO MEDIA/SRLaurie Holien sued the state agency overseeing that office two years ago, alleging sex discrimination and that she was retaliated against for raising concerns about malfeasance at the agency, including what she believed were misused funds, evasive answers to government auditors and efforts to obstruct requests for public records.

Holien worked as deputy director of the Office of Emergency Management from September 2013 until August 2016. In October 2017, she sued the Oregon Military Department in Marion County Circuit Court for $4 million, asserting emotional distress and economic losses.

The department administers the state's Army and Air National Guard — which is supposed to "protect life and property" during natural disasters and civil disturbances — and the Office of Emergency Management.

The settlement agreement, released to the Oregon Capital Bureau by the Oregon Department of Justice on Wednesday, Nov. 13, said the state agreed to pay Holien $110,000, representing back pay, plus $300,000. The agreement also said the state will pay $100,000 to Busse & Hunt, the law firm representing Holien.

The settlement said the agreement "is not to be construed as an admission or proof of any liability or fault whatsoever on the part of" the state.

'Hostile behavior'

The size of the settlement is significant. In March, the Oregon Legislature settled with nine women who had experienced harassment at the state Capitol for about $1 million.

Holien had alleged the military department discriminated against her for blowing the whistle on mismanagement and waste. She claimed in her lawsuit that she was discouraged from discussing what she believed was misuse of federal money and 911 funding, "evasive and/or untruthful actions and statements" by state employees in response to outside audits, and obstruction of requests for information from the press, among other forms of malfeasance.

Holien also claimed she was subject to sex discrimination, contending she was excluded from "important meetings, discussions, appearances and duties," subjected to "offensive language and conduct of a sexist nature" and prevented from doing her job and advancing in her career.

The military department did not immediately responded to a request for comment Wednesday from the Oregon Capital Bureau. Kyle Busse, Holien's attorney, was not available for comment.

In a tort claim notice submitted to the state Department of Administrative Services in January 2017, a lawyer for Holien pointed to multiple concerns the former deputy director had with how money was handled at the department and by the office of emergency management.

The claim said Holien had reported her concerns about the agency's spending and abuse of authority, and raised the alarm about her treatment as the sole female manager. She was subjected to retaliatory, discriminatory and hostile behavior, the notice said.

Holien's notice stated the Office of Emergency Management was evasive and "less than truthful" in responding to an audit on how the state used federal money. Federal auditors found $2.3 million in misspent or overspent federal money in its audit report for the grant years 2010 through 2012, according to Holien's claim.

The state agency subsequently managed another audit but Holien's claim said that agency officials were "manipulating the product." That report was eventually rejected by the feds.

Holien was then charged with managing yet another audit, according to the claim, and in that process "became aware of many more problems" with how the office managed grants.

Another claim

In 2016, a Marion County jury awarded about $966,000 to Martin Plotner, the former director of the Office of Emergency Management, who claimed in a lawsuit that he was fired three years earlier for blowing the whistle on mismanagement and sexual harassment.

The federal government demanded the office of emergency management repay about $3 million in federal grant money the state spent on personnel and other expenses without the proper permission from the federal government, according to reporting by The Oregonian in early 2018.

Earlier this year, Oregon lawmakers approved a two-year budget for the military department of about $436 million.

Reporter Claire Withycombe: This email address is being protected from spambots. You need JavaScript enabled to view it. or 971-304-4148.

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