- Associated Press - Wednesday, October 8, 2014

PORTLAND, Ore. (AP) - A week before ballots begin arriving in voters’ mailboxes, Oregon Gov. John Kitzhaber is taking heat over his fiancee’s work for organizations seeking to influence state policy.

A story in Willamette Week on Wednesday said that Cylvia Hayes has used her title as first lady and her role in advising the governor to advance her private consulting business. The newspaper also said that Hayes has directed her state-funded assistant to make travel arrangements and put appointments on Hayes’ calendar for her private contracts.

Republican State Rep. Dennis Richardson, an underdog against Kitzhaber in the next month’s election, has seized on the story as he tries to make the case that Kitzhaber should be replaced.

“The latest scandal shows once again that the state of Oregon is being run more like a mafia than a public entity,” Richardson campaign manager Charlie Pearce said in a statement. “The governor and first lady are not above the law.”

Hayes, who does not draw a state salary, has taken an active role in promoting initiatives to fight hunger and poverty and in developing the governor’s energy and environmental policy. Before Kitzhaber was elected governor, Hayes ran a consulting business that worked on issues of environmental sustainability and green energy.

She has earned her living through outside consulting work.

Kitzhaber maintained on Wednesday that Hayes did nothing wrong with her outside work.

“I think if Dennis wants to have a debate he ought to have the courage to have it with me, not a woman who has a stellar profession and has given thousands of volunteer hours to the state of Oregon,” Kitzhaber said. “I’m insulted by it, quite frankly, and it’s not true.”

Kitzhaber said Hayes had her contracts reviewed for conflicts by the chief lawyer for the governor’s office, Liani Reeves, before they were signed.

“We were very proactive,” Kitzhaber told The Associated Press. “Very rigorous and very transparent.”

Hayes formally declared a potential conflict on three contracts in August 2013, but her contracts had been initiated months earlier. One contract, with Resource Media Inc., had expired in April, according to records provided by the governor’s office. A yearlong contract with the energy foundation began May 1, and a six-month contract with Demos began June 1.

Reeves, the governor’s office lawyer, and Curtis Robinhold, who was then the chief of staff, wrote that they did not foresee an actual conflict of interest because Hayes was not in a position to make decisions that could help or harm the organizations with which she was working.

Hayes no longer has any contracts and is not drawing a paycheck from any entity, Kitzhaber said Wednesday.

Kitzhaber’s office treats Hayes as a public official under Oregon law, subject to the ethics rules that apply to elected and appointed officers, said Melissa Navas, a spokeswoman.

That means Hayes is supposed to be prohibited from using her position as first lady for private gain. But Willamette Week reported she gave speeches and made appearances on behalf of her clients and was identified as the first lady of Oregon.

When Kitzhaber inquired about the legality of giving paid speeches, the Oregon Government Ethics Commission told him it was acceptable, but he could not use his title as governor or take money from organizations with business before the state.

The couple met when Hayes ran unsuccessfully for the state Legislature in 2002. Kitzhaber, who was governor from 1995 until 2003, divorced his wife, Sharon, shortly after leaving office.

Questions about her complicated ties started shortly before Kitzhaber staged a political comeback and won the November 2010 election. Four state Energy Department officials were investigated for their handling of a renewable-energy contract that benefited a company owned by Hayes.

Some Energy Department staff members told investigators they thought Hayes’ relationship with Kitzhaber was a factor in her company getting a piece of the contract. No criminal charges were filed, and the employees returned to their jobs.

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