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Lawsuit alleges health district racketeering scheme

by: KATIE WILSON - The property off Millard Road in St. Helens intended to be the site of a new hospital is still a source of contention years later. A lawsuit filed by the current Columbia Health District says officials and prior directors mismanaged resources and taxes collected by the Health District.The long-contentious Columbia Health District is back in the courts again, this time in the form of a lawsuit filed in federal court alleging a racketeering scheme by Columbia County commissioners, public health officials, a former St. Helens city administrator and former health district directors.

The complaint, filed last week by local attorney James Huffman on behalf of the current Columbia Health District, requests a trial by jury, saying the defendants named in the lawsuit misappropriated approximately $1 million of assets and fraudulently carried out the dissolution of the special taxing district by not paying back tax money owed to the district’s tax payers.

St. Helens’ district hospital closed in 1990 due to lack of “sufficient financial resources,” according to a report written by St. Helens resident Christopher Armstrong-Stevenson. He had worked for the state of Oregon for over 15 years, in charge of the state’s Certificate of Need program and the Rate and Budget Review program for all of Oregon’s hospitals.

The Columbia Health District formed in 2004 as a special district, able to collect taxes. Its directors said they wanted to use these taxes to facilitate the building of a new hospital with the stated purpose of providing a local “critical access” hospital in Columbia County.

But, due in part to the proximity of Portland’s hospitals, the Columbia County hospital was not approved and the intended site off Millard Road in St. Helens remains vacant, overgrown by grass and brush. There’s a “for sale” sign pitched nearby.

Prior to the dissolution in 2011 that Huffman is contesting, CHD collected taxes from the property owners within the district. Huffman, who is working pro bono for the current CHD, argues that according to Oregon dissolution laws, the collected tax money should have been credited back to taxpayers following the dissolution.

Huffman alleges the money instead was funneled to the Public Health Foundation, which, he said, doesn’t need the money since the programs it provides are funded by the state.

“For the last two decades at least, they’ve been bilking the Columbia County taxpayers,” he said.

“Any way you slice it, this (lawsuit) looks to me like a political move that’s going to cost the taxpayers a lot of money,” countered Columbia County Commissioner Tony Hyde, who is named in the lawsuit and said Huffman’s complaint reads “like a spy novel.”

In addition to Hyde, the lawsuit names current county commissioners Earl Fisher and Henry Heimuller, attorneys Thomas Sponsler and Eileen Eakins, county counsel Sarah Hanson, Columbia River Fire and Rescue Chief Jay Tappan and former CHD directors Gary Heide, Lisa Galovich and Diane Hutson, Columbia County Public Health Director Karen Ladd, former St. Helens City Administrator Chad Olsen, and the Public Health Foundation of Columbia County.