Forbes: Oregon Gov. Kate Brown Reaped $2.6M in Campaign Cash from 557 State Vendors Who Pocketed $4.4B 79_kate_brown

October 31, 2018 05:30 PM


Adam Andrzejewski, Contributor
Oregon Governor Kate Brown has quietly solicited millions of dollars in campaign donations from state vendors, key people, employees, or their affiliated corporate political action committees.
While national progressives decry corporate money as a pernicious influencer in politics, state records show that Governor Brown, a liberal luminary, has embraced the highly unethical practice of soliciting campaign cash from state contractors.
Our auditors at found 557 state vendors gave $2.6 million in political donations to Brown – as Secretary of State and Governor – since 2012. These donations represent the equivalent of 100 percent of the governor’s current cash on hand in her campaign committee, according to recent disclosures. Meanwhile, these companies have reaped $4.4 billion in state payments.
Since 1940, at the federal level, individuals and entities negotiating or working under federal contracts have been prohibited from giving political cash to candidates, parties, or committees. In Oregon, however, this political patronage is perfectly legal (at least for now).
We reached out to Governor Brown, giving her a chance to defend her practice. We will update the piece if the governor responds on the record.
Law Firm Relationships
We found 89 law firms that reaped $52.1 million in state payments gave $350,538 in campaign donations to the governor, all since 2012. These donations came from the firm itself or its principals, partners, or employees.
A few examples:
  • Markowitz Herbold PC received $21.6 million in state payments since 2012 – the most outsourced legal work of any firm. Also during this period, Markowitz Herbold PC or affiliates donated $16,395 to the governor’s campaign.
  • Orrick, Herrington & Sutcliffe LLP or affiliates gave $26,437 in campaign donations to the governor. Separately, the firm collected $1.7 million in state billings.
  • Stoll, Stoll, Berne, Lokting & Shalchter PC or affiliates donated $24,000 the governor’s campaign fund. Separately, the firm made $254,795 from state legal work.
  • Stoel Rives LLP or affiliates gave $20,750 in campaign donations to the governor. Separately, the firm reaped $1.03 million in state legal work.
  • Law Office of Erin Olson and associated entities received $1.62 million in state payments for settling tort claims filed against the Oregon Department of Human Services. Individually, Erin Olson gave $32,250 to the governor’s campaign fund (an amount that exceeded any other lawyer or law firm). Professionally, her firm was negotiating million-dollar settlements with a state agency. Read Ms. Olson's explanation of her legal work and campaign donations.
We pressed the five law firms for any comment or additional context, but only Erin Olson issued an on-the-record comment.
Major U.S. Corporations
A number of major U.S. corporations have reaped Oregon state contracts or payments worth millions of dollars during Brown’s tenure. Meanwhile, these companies, key executives, or their affiliated employees funneled campaign cash to the governor.
These donors include Nike Inc. ($134,365); Bloomberg LP ($250,000); AT&T ($10,000); PacificSource Health ($6,224); CH2M Hill ($4,700); Alaska Air ($3,500); Hewlett Packard ($2,000); and Pitney Bowes ($2,000).
A few more examples:
  • Portland General Electric (PGE) ($52,650) and PacifiCorp/Pacific Power ($25,500) are two of the largest donors to the governor. PGE is a $1.9 billion annual revenue Fortune 1000 public utility distributing electricity to 44 percent of the Oregon population.
  • Microsoft Corporation received $21.4 million in state payments since 2012 and donated $11,250 to the governor’s campaign fund.
  • Deloitte Services has given $25,000 to the governor’s campaign fund while affiliates reaped $139 million in state payments since 2012.
  • Professional Credit Service has a state contract for debt collection with a lifetime value of $10 million. Joseph Hawes, CEO, has given $34,500 to Brown since 2012. During this period, the firm’s contract was amended and extended through 2021.
  • Planned Parenthood gave $42,075 directly or through affiliated entities to the governor. While Brown is a policy ally, Planned Parenthood reaped $10.1 million in state payments since 2012.
Native American Groups
Oregon is home to Native American groups who hold state contracts worth $36.7 million in lifetime value. These groups are significant political donors. They have donated $176,700 to Brown’s campaign fund since 2012.
The six contributing Native American groups include: Cow Creek Band of Umpqua ($105,200 donated; $2.9 million in state payments); Confederated Tribes of the Grand Ronde ($40,500 donated; $7.5 million state payments); Confederated Tribes of Siletz Indians ($18,500 donated; $4.5 million in state payments); Confederated Tribes of the Warm Springs Reservation ($8,500 donated; $8.4 million in state payments); Confederated Tribes of the Umatilla Indian Reservation ($10,500 donated; $5.1 million in state payments); and Confederated Tribes of Coquille ($2,000 donated; $2.3 million in state payments).
Recently, a Washington Times investigation unearthed a nondisclosure agreement between the Oregon Lottery and the Cow Creek Band, which donated $105,200 to Brown’s campaign fund. This begs the question: What did they not want disclosed? The Cow Creek CEO Michael Rondeau, in a statement, denied any improper relationship.
Meanwhile, the governor wrote the federal government a letter opposing the Coquille tribe’s proposed casino. The Coquilles have donated 50 times less money than the Cow Creek Band to the governor’s re-election efforts. Coincidence?
The public has a right to know whether Brown was serving the public interest or her private political interest. Every single instance where the 557 state vendors made a political donation and had their contract initiated, renewed, modified, or extended is a potential conflict of interest.
Even in Illinois, where the number one manufactured product is corruption, it is illegal for state vendors with contracts exceeding $50,000 to give campaign donations to statewide officeholders. The 2011 Illinois law barred this "pay to play" practice in which contractors give campaign donations to powerful statewide office holders.
"Pay to play" prohibitions are very inconvenient for politicians. Without any limitations of fundraising, they can easily monetize their incumbent political power. Right now, in Oregon, a large pot of taxpayer money is recycled from state vendors and contractors back into campaign coffers. The system functions as a legalized money-laundering scheme. At arm’s length, all of the transactions are legal – but are they ethical or serving the public’s interest?
The powerful Oregon House Speaker Tina Kotek already expressed concern to the Oregonian that any limitation on campaign donations would constrict First Amendment freedoms. "I do think we want to make sure that we are not inhibiting political expression," said Kotek.
However, Oregon’s elected officials should consider revamping public integrity laws to match the federal statute or the ethics laws in eleven states. It’s a good precedent.
Voters might appreciate an effort to pioneer reform rather than blazing an Oregon Trail of expensive political patronage.
Methodology: We found the data by looking at a universe of companies or their affiliated employees funding Brown’s campaigns since 2012. We then matched those company names with the contract and payment databases provided by the State of Oregon. To the extent that the information contains government errors, our report will reproduce those errors. No quid pro quo or illegal activity by any elected official, company or individual referenced in this editorial is implied or intended. All state contract information referenced was produced via the Oregon Open Records law by the State of Oregon. Kate Brown was elected Oregon Secretary of State (top auditor) in 2008 and assumed to Governor in February 2015 and was elected in November 2016.
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