Last Wednesday, April 8th, Rep Mike Nearman on the Joint Ways & Means SubCommittee on Transportation & Economic Development attended the hearing on SB5513 an appropriation bill for Dept of Housing & Community Services with invited testimony only.  Sounds routine.  But, this was related to the Oregon Prosperity Initiative that Gov Kitzhaber directed to include Cylvia Hayes and for which a spokesperson was hired by Oregon Business Council to help the First Lady and is the focus of a state and federal investigation.

During the hearing when Sen Betsy Johnson (D-16) and Rep Mike Nearman (R-23) spoke of their concerns to Margaret Van Vliet that the low income housing is so much more expensive than private housing and their desire to bring those costs down by easing some of the regulations, Rep Nearman was quoted by the Oregonian as saying, "Can I please work with you on that?...Please?"  His office has been looking into those regulations and their impact on cost.

This project became a priority for Governor Kate Brown after the Governor John Kitzhaber resignation.  It involves $100 million dollars worth of low income housing.  The state would own the property/units, and the housing would be run by non-profits. The money would come from bonds and paid back through lottery money and general fund money and federal housing funds.  Duke Shepherd, labor and human services policy adviser, with Margaret Van Vliet, state housing director, headed the project for the state.  There is a lot of confusion about Cylvia Hayes' role on the project.

On the one hand, Duke Sherpherd's email indicates she had a small role, "For the record, other than keeping her occasionally updated on what we might be doing... the Governor's idiot fiancé had no engagement into the $100 M...Cylvia had lots of mind numbing meetings on poverty. She gave lots of speeches"  

On the other hand, Governor Kitzhaber's email portrayed First Lady Cylvia Hayes as leading the project, "It is important to define what we mean by the First Lady 'leading the prosperity initiative.' It is important that the work Cylvia does on the Prosperity Initiative (and the remarkable following she has created) is coordinated and aligned with the overall administration.  That is she needs to be engaged in strategic planning and long term scheduling; she needs communication support for her public appearances; and the groups she is convening, her efforts to secure grant funding, etc. need to be part of our overall strategic plan."

Then there is the matter of the Oregon Business Council spending $35,000 for a spokesperson supposedly for the Oregon Prosperity Initiative but there is controversy as to whether spokesperson Therese Lang worked for Cylvia Hayes or for the project.  Cylvia submitted her requirements for the position: “Will you please take a look at the write up below of what I am looking for in the comms position and let me know your thoughts?” and “Focused, Proactive Support and Coverage of First Lady Activities: This may include help with speech-writing, photography and videography, generating media coverage. This needs to be managed strategically both to best serve the goals of the Prosperity Initiative and to align with desired first lady brand.” But a later email, painted a different picture, “OBC didn’t hire a consultant ‘for’ me...  OBC hired a communications professional for the Oregon Prosperity Initiative using grant money earned for that very purpose.”

Liani Reeves,general counsel to Governor Kitzhaber, wrote of the Therese Lang hiring in an email, “I’m just trying to get a handle on some of the issues we may need to work through,... including the use of a non-state entity to do state work; public contracting issues since we are essentially bypassing the public contracting process and getting services donated; and whether the ‘value of the services’ that the state is getting for free is a ‘gift.’" Later that same day, in a separate email, she concludes, “I think that if the scope of work is revised slightly to make it so that it is clear that Therese is working with OBC on its own policy initiative related to poverty, which they could instruct her to line up to be consistent with the first lady’s, instead of directing Therese to support you directly, we can get to the same outcome but it doesn’t look like OBC is basically paying someone to support a state position.”  Initially, Cylvia Hayes argued the point, “That is not the case,...  They are clear that this position is working for me, supporting our Oregon Prosperity Initiative.”  A later email by Liani Reeves indicates, “The modified language makes it more clear that Ms. Lang works for OBC on the Prosperity Initiative led by the First Lady, rather than working for the First Lady directly (which creates legal and ethical issues for our office)."

It will be interesting to see how this all sorts out.