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First lady's consulting work leaves some scratching their heads


Photo Credit: COURTESY OF STATE OF OREGON - First Lady Cylvia HayesSALEM — Oregon First Lady Cylvia Hayes was paid $118,000 for communications work for a nonprofit clean economy consulting organization at a time when she was advising the governor’s office on similar topics.

The job is another instance in which the first lady’s paid private sector jobs overlapped with her role as a policy adviser to Gov. John Kitzhaber, a situation that prompted ethics complaints against both Hayes and the governor.

Hayes appears to have been the only paid fellow at the Washington, D.C.’s Clean Economy Development Center. It’s unclear what Hayes did for the organization because neither the first lady nor its executive director responded to requests for specifics.

Kent Redfield, a political science professor at the University of Illinois Springfield, said tangible evidence of Hayes’ work for the Clean Economy Development Center is important, because there are examples across the United States in which entities sought to influence public officials by offering no-show jobs to the officials or their family members.

“If there’s no work product and you’ve got a situation where you’re hiring the governor’s spouse or someone with a close personal relationship with the governor, then you can certainly have fraud,” Redfield said.

An unpaid adviser

The Clean Economy Development Center’s stated purpose is to help public officials launch renewable energy and efficiency projects that create jobs, but it also worked to shape public policy. In 2014, the group conducted polling and organized a coalition to push for an Oregon low-carbon fuel standard. That policy has the support of Kitzhaber and Democratic state lawmakers.

Experts on government ethics and the intersection of politics and nonprofits said Hayes’ job in particular raises questions, such as whether her compensation was reasonable given the amount of work she did and whether Hayes’ employer sought to use the connection to influence state policy.

Hayes was on the Clean Economy Development Center’s payroll from 2011 to 2012, at the same time she served as an unpaid adviser to the governor on energy and economic development policies. For example, the first lady was a named member of the governor’s policy team that produced a 10-year state energy action plan in December 2012. The plan lists the affiliations of other private sector advisers, but it does not mention Hayes’ connection with the Clean Economy Development Center.

Redfield said Hayes’ employment with the Clean Economy Development Center could create a real or perceived conflict of interest, even if Hayes and Kitzhaber already agreed with the organization’s policy positions.

“It may have been the positions were already there, but you should avoid creating situations where people question whether you’re doing something because it’s good public policy or because it benefits you financially,” Redfield said.

Foundation’s contract job

While Hayes is vague as to the details of her work, she lists the fellowship in her official state biography and included the center’s logo in her email newsletter through early 2013.

In a response to emailed questions in December, Hayes wrote that the nonprofit paid her $30,000 in 2011 and $88,000 in 2012, and that her “primary work was to implement communications strategies promoting clean economy development.”

A spokeswoman for the governor also did not respond to questions about whether Hayes used the governor’s mansion for an event associated with the Clean Economy Development Center. On April 9, 2012, a “Clean Economy dinner meeting” was scheduled at the governor’s mansion, according to public records.

Public records also yield few details about the Clean Economy Development Center, which functioned largely under the radar of the IRS, state attorneys general and other regulators. As a nonprofit it filed just one federal tax return — in 2010, when it reported more than $900,000 in revenue. In May 2014, the IRS revoked the group’s tax-exempt status due to its failure to file returns for three consecutive years.

California and most other states require charities to register, often with the attorney general’s office, if they solicit contributions. But despite receiving grants from at least one California nonprofit, the Clean Economy Development Center did not register in California.

The organization that paid for Hayes’ fellowship — The Energy Foundation based in San Francisco — did provide a few details about the first lady’s work. Jenny Coyle, the foundation’s communications manager, wrote in an email that the fellowship “included identifying, writing, and publicizing case studies of successful, local clean energy businesses; making presentations; and conducting email/online outreach.”

After Hayes’ fellowship ended, The Energy Foundation arranged to hire Hayes directly in May 2013 with a contract worth up to $40,000. Once again, Hayes’ task was to create and implement a communications strategy.

Coyle wrote that The Energy Foundation “received updates from Cylvia and had ongoing conversations with her” about the fellowship and contract job, but Coyle declined to provide any records of the hours Hayes worked, invoices, receipts for reimbursement or other evidence of work.

She did confirm The Energy Foundation awarded a $97,500 grant to the Clean Economy Development Center last year, for polling, messaging research, media outreach and organizing a coalition of supporters for an Oregon low-carbon fuel standard.

Lloyd Hitoshi Mayer, an associate dean and law professor at the University of Notre Dame who specializes in tax and political law, said it is appropriate to ask what the Clean Economy Development Center accomplished during Hayes’ tenure as a fellow with the group. Although it is common for politicians and people close to them to be involved with policy oriented nonprofit organizations, those jobs also offer opportunities for donors to influence officials.

“The most common issues that tend to arise with such organizations are whether the amount of compensation or other benefits paid to the politician or his associates are reasonable given the services they provide to the nonprofit and whether the nonprofit is used as a vehicle to curry favor with the politician by, for example, companies making sizable contributions to the nonprofit that are then used to benefit the politician or his associates,” Mayer wrote in an email.

‘Never interacted with her’

Hayes was not the only Oregonian with ties to the center. Multnomah County Commissioner and former state Rep. Jules Bailey also had a contract with the nonprofit.

Bailey said he connected with the Clean Economy Development Center through the group’s executive director, Jeffrey King. King worked for the Portland-based technology investment bank Pacific Crest Securities, and had connections in the Oregon sustainable energy community.

“Jeffrey and I did some work together when he lived in Portland and we continued to collaborate on ideas, around especially building retrofits,” Bailey said.

After Bailey won his first election to the state House in 2008, the two men worked together on legislation to create a state low-interest loan program to finance energy efficiency and renewable energy projects.

“When I was a freshman in the Legislature, after I’d been elected, (King) was actually part of the group of people that sort of met to trade ideas on what ultimately became (the 2009 Energy Efficiency and Sustainable Technology Act),” Bailey said.

Although Bailey was also listed as a senior fellow on the Clean Economy Development Center’s website, he said he was never part of a class of fellows, and said his consulting firm was hired for a specific project: to determine whether Rhode Island could use pension funds to create incentives for energy efficiency retrofit projects.

After the Capital Bureau for the Pamplin Media Group and EO Media Group contacted Hayes and Bailey for this story, their names and other information were removed from the nonprofit’s website.

Bailey declined to reveal how much he was paid by the Clean Economy Development Center, but he did provide a report he co-authored as part of his contract with the Clean Economy Development Center. A $150,000 grant from The Rockefeller Foundation paid for the work starting in August 2011, and Bailey said he flew to the East Coast multiple times to meet with various officials and community members for the project.

“I was kind of working with (the Clean Economy Development Center) in Providence, R.I., advising them on a plan, potentially trying to use pension funds to finance building retrofits,” Bailey said. “Ultimately, we didn’t find a path that worked. But it was part of a project that we worked on for probably, oh I don’t know, six months give or take.”

“I’ve seen in the paper that Cylvia Hayes was a fellow. But I never interacted with her,” Bailey said.

Full disclosure

Tracy Westen, founder and chief executive officer of a nonpartisan think tank in California called the Center for Governmental Studies, said that when nonprofits award paid fellowships to elected or appointed political figures, it might create the appearance that the group is lobbying the official. It is not illegal for charities to lobby, but tax-exempt groups face federal limits on lobbying.

“It may suggest that an outside source of income is influencing the independence of their votes or other actions,” Westen wrote in an email. “But again, officials may not care, since their public positions may be identical to those of the employing organization.”

Westen said a simple approach is for elected and appointed officials to be open about who pays them.

“The easiest solution is transparency: full disclosure by the official that he/she is receiving income from an outside source, especially when making a decision that affects them, and by the nonprofit that’s compensating an official,” Westen wrote.

Hillary Borrud is a reporter for the EO Media Group/Pamplin Media Group Capital Bureau.