Ethics Investigation Could Cost Gov. and Hayes Tens of Thousands in Legal Fees
Friday, October 17, 2014
That’s because if Kitzhaber and Hayes go before the Oregon Ethics Commission with an attorney present, they will have to pay for the expense themselves.
"The individual would be on the hook for any legal expenses they would incur related to an ethics violation," Department of Administrative Services spokesman Matt Shelby said of the state rules.
That could mean tens of thousands in legal fees for Kitzhaber and Hayes.
This week, both the state GOP and Republican State Rep. Vicki Berger filed ethics complaints against Gov. John Kitzhaber and Hayes. Long time Kitzhaber advisor Patricia McCaig was also named in a complaint.
Media reports on Hayes have accused her of ethics violations and stated that she has profited as a political consultant due to the access she has as the governor's fiancée.
The complaints are likely to prompt a probe by the Oregon Ethics Commission and providing the two don’t represent themselves, that means legal fees.
Across the country, high profile politicians that get into hot water, from criminal to civil matters, can tap taxpayers for their attorney’s expenses.
The taxpayers of Texas shelled out at least $80,000 to pay for Gov. Rick Perry’s lawyers who are defending him against charges that he misused his public office by vetoing funds for a state agency that oversees public corruptions, according to the Texas Tribune. Perry announced in August he would start using campaign funds to pay for his legal defense team.
Ronald Reagan was reimbursed for the majority of his legal fees during the Iran-Contra investigation during 1987, as was then Vice President George Bush. But the courts denied the Clintons reimbursements for their more than $3 million in legal fees in the Whitewater Investigation of 1994.
Not so in Oregon
But Reeves cannot represent the Governor once an ethics investigation starts in earnest.
“As I understand it, Liani [Reeves] would not represent either [Kitzhaber and Hayes] if an ethics investigation were to occur,” said the Governor’s spokeswoman Rachel Wray.
Often the State of Oregon will allow a public employee insurance policy to defray some legal expenses but not in this case.
The governor’s office couldn’t say if Kitzhaber had retained a lawyer yet. On Tuesday, the state ethics commission had not received any notice of legal representation for Hayes or Kitzhaber, according to ethics commission director Ron Bersin.
Most recommend lawyering up early when an issue like this arises.
Chad Jacobs specializes in ethics law for Beery, Elsner & Hammod LLP, a firm that represents cities and towns around the state. He said, in an ethics investigation, as soon as a public official starts getting requests for paperwork, it’s time to get an attorney.
“Typically at that first phase,” Jacobs said. “That’s a good time to start consulting with a lawyer.”
If the ethics commission investigates, it could take up to 180 days to reach a finding.
The process could take longer if there are any delays. An ethics investigation earlier this year of Mitch Morrow, Oregon's Deputy Director of the prison system, was delayed for months after Morrow announced he had planned to sue several state agencies, according to the Statesman Journal. Morrow retired in August amid the ethics probe.
Long Process Can Lead to Large Fees
A long process means legal fees can really stack up.
Former advisor to Vice President Dick Cheney, Lewis “Scooter” Libby, racked up some $5 to 6 million in legal fees, resulting from an investigation into the “outing” of CIA agent Valarie Plame Wilson.
Libby started his own legal defense trust where people can make contributions to his legal bills. "Scooter Libby Legal Defense Trust."
No one thinks Kitzhaber and Hayes will have anything near those kinds of costs. But some attorneys say it might be $10,000- $20,000 per person or more.
The state can set up a legal expense trust, if the governor wants, and if Hayes is deemed to be a public official.
In Oregon, campaign funds can’t be used for legal expense. That’s just as well, because by the time the final attorney bill comes in, the November election will be long over.
Related Slideshow: Timeline of Cylvia Hayes’ Life and Misdeeds
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.
Evergreen State College
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.
Alleged pot farm property
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.
Investigation by DOJ
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.
3E Contracts with Demos
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.
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.
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.
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.
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.
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."
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.
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.
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.
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."
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.
- GOP Files Ethics Complaint Against Kitzhaber, Hayes
- Cylvia Hayes Confesses to ‘Illegal Marriage’
- Hayes Scandal Could Implode Kitzhaber’s Campaign
- Hayes Unlikely to Face Prosecution But Ex-Husband Could Face Deportation
- Governor’s Office Helped With A Loan For Client of Hayes
- Timeline: Critical Dates in Cylvia Hayes Scandal