Ethics ruling raises questions about Oregon legislators with stake in private businesses

Sylvia Hayes meeting with USDA in 2012. USDA Sylvia Hayes meeting with USDA in 2012.

The Oregon Ethics Commission last week found that former first lady Cylvia Hayes broke state laws barring officials from using their positions for personal gain.

The long-running investigation toppled Gov. Kitzhaber and set in motion a slew of only-in-Oregon corruption jokes:

Unscrupulous officials in East Coast jurisdictions shut down crowded bridges to punish political opponents, or pocket millions of dollars in bribes in exchange for lucrative contracts.

Not in Oregon, where graft comes in the form of advancing a governor's existing clean energy agenda in return for a measly $200,000 spread out over the course of a four-year term.

Small time or not, the Kitzhaber and Hayes scandal was about the blurring of the line between private business and the public agenda.

As such, the recent Oregon ethics commission ruling raises questions about the dozens of Oregon legislators who own or have a stake in a  business, or whose spouses own private enterprises.    

Among them:

— Rep. Tim Knopp, executive vice president, Central Oregon Builders Association.  COBA is not a private business, but the organization represents home building companies.

— Rep. Julie Parrish,  own (with her husband) PIP Communications, a data and online media company.

— Rep. Carl Wilson: owner,  KAJO radio.
— Sen. Mark Hass, advertising executive for Portland-based public relations firm. Cappelli Miles

Here's a key question: Is it possible for an Oregon public official who owns a company (or whose spouse owns a company) not to profit from his/her government position? The name recognition alone would seem to give the business a boost.

And yet current ethics rules exempt legislators who own businesses or who have a spouse who owns a business.

It's a practical matter, says PSU political science professor Richard Clucas. Oregon lawmakers are only paid around $23,000/ year, he points out. "So you can't get away with telling them they can't own a business."

Transparency and conflict of interest rules ensure these legislators don't use their political appointments for private gain, he says.

Jim Moore, Director of the Tom McCall Center for Policy Innovation at Pacific University, begs to differ.

"The ethics rules do not work well with two-income families nor with non-elected/state-worker spouses whose work is tied up in their identity," says Moore. "It’s a deficiency that absolutely needs to be filled."

In the case of Parrish and Haas, their expertise in the fields of public presentation seems inextricably tied up with their positions as legislators, he says.

Moore, who is writing a book about former governor Vic Atiyeh, acknowledged that businesses don't always win when their owners are public officials.

"When Vic was elected, Atiyeh Bros. made a specific decision to do no business with the state of Oregon while he was in office. There had actually been a bit of a kerfuffle in the early 1960s when Atiyeh Bros. won a contract for a new carpet in the governor’s suite of offices (Gov. Mark Hatfield, at the time)."

Moore quoted a conversation between Vic Atiyeh’s nephew and Vic’s brother Richard, who was one of the Atiyeh Bros. at the time.

“Bob talked with Richard about all the great publicity for the company during the 1978 campaign. Richard said it cut both ways—they lost business because of Vic’s politics.”

Moore, for one, thinks the Hayes scandal was overblown and that last week's ethics commission ruling is on shaky ground.

"The feds have already looked at it and said: 'No, there is nothing there.'  It's like getting Al Capone for his taxes rather than getting him for robbing banks."

"I’d like to see the ACLU take it on. It’s the kind of gotcha games we see in ethics a lot.  It’s crazy, and contributes to anti-government feelings."

Clarification:  This article has been amended to reflect the fact that COBA is not a private business. It is a nonprofit representing home building companies.



Linda Baker

Linda Baker is the editor of Oregon Business

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