Greg Smith appears before the Oregon Transportation Commission in February, representing two different clients of his economic development business. (Mark Ylen/Mid-Valley Media)
Greg Smith is a juggler.
In La Grande, he holds a full-time job directing Eastern Oregon University’s Small Business Development Center.
A hundred miles away in Boardman, he has a second full-time job, serving as executive director of a consortium redeveloping the Army’s sprawling Umatilla Chemical Depot.
At the same time, he directs separate economic development programs in Harney, Malheur and Baker counties, each paying Gregory Smith and Company thousands of dollars every month for the service.
In Salem, the state representative from Heppner sits on nine legislative committees, with leadership roles in three. He earns $31,200 a year and dips into political contributions for expenses and to compensate his wife and his company’s employees.
He uses his influence in the Legislature – he is dean of the House – to benefit those who retain him, pushing through millions of dollars in state allocations.
“Greg Smith is the busiest guy I’ve ever known,” said Don Russell, a Morrow County commissioner who also oversees one of Smith’s full-time jobs.
A three-month investigation by the Malheur Enterprise untangled his public service and his private contracts through government documents and interviews, revealing an empire funded by public money. Smith didn’t respond to repeated interview requests or five pages of written questions.
He formed his company in December 2000 as he prepared to take his seat as a legislator. Since then, he has stacked one government contract atop another – Wheeler County in 2004, Eastern Oregon University in 2008, Baker County in 2011, Malheur County in 2013 and Harney County in 2017.
He has contracts with Morrow Development Corp. in Heppner, Umatilla Electric Cooperative in Hermiston, and the Linn Economic Development Group in Albany.
Along the way, he has amassed in his own name or that of his company an estimated $1.7 million in real estate. That includes commercial buildings in Heppner, La Grande and Hermiston, a $340,000 resort home at Sunriver, a $422,500 beachfront condominium in Seaside, and a $160,000 condominium in Provo, Utah.
His company’s interests repeatedly take him to officials at state agencies, from transportation to state parks to economic development. He does so, email records show, in the name of his company’s clients. But as a legislator, Smith can influence every state agency budget in his role as a vice chair of the Legislature’s budget-writing committee.
His public and private hats come off and on at his will.
In 2017, the Legislature appropriated $26 million to fund a new rail shipping center in Malheur County and $25 million for a rail project in Millersburg, near Albany. Smith held a vote on the committee that engineered that funding.
After the appropriation, he switched to his business role to win for his company the contract to make the Millersburg project a reality. In Malheur County, officials added more money to his company’s existing contract for work on their rail project.
Smith has made no secret of his dual roles and on occasion seeks guidance from state ethics officials. In February, he asked the Oregon Government Ethics Commission about the “appropriateness” of his company’s contract to manage a state-funded rail project.
“Nothing appears to indicate that you were awarded this private business opportunity as a result of being a member of the Oregon Legislative Assembly,” wrote Ron Bersin, the ethics commission executive director. “You must be mindful of any conflicts that may arise.”
Smith is co-chair of the legislative committee with primary responsibility for the commission’s budget.
Baker County officials wonder how Smith can serve so many masters at once.
“How are you able to be a representative and a contractor? To me it is entirely problematic,” Mark Bennett, a Baker County commissioner, said last week. “Nobody has ever given me an answer that I felt really resolves the question in my mind. I believe it would test any of us, were we in the same position.”
Fred Warner, former county commissioner and now city manager in Baker City, said the county recently renewed its contract with Smith – with reservation.
“There was a lot of discussion about Malheur, Harney County, and all the different places he is representing and how do we know that we are getting represented like the others,” Warner said.
Les Ruark, a Gilliam County ranch hand and an active watcher of government, urged Smith in an email last month to give up his legislative duty or his business interest.
“The two endeavors just plain should not be as closely mingled (to put it politely) as they quite likely end up being – your effort to claim or substantiate differently notwithstanding,” Ruark wrote.
He said he got no response.
College ties
Smith’s blending of public and private duty is evident in La Grande, where his ties to Eastern Oregon University run deep.
That’s where he got his bachelor’s and master’s degrees and is a trustee on the university foundation board.
Since 2008, the university has contracted with Smith and Company to run its campus center for helping local businesses. The contract doesn’t specify the compensation, an unusual omission for government work.
University officials couldn’t explain.
“It’s not in there because it’s not in there,” said Chris Burford, the university’s general counsel.
Documents obtained through the state public records law reveal that the university is paying Smith and Company $118,800 a year. In 2017, Smith personally got $65,000 of that, with another $38,000 paid to part-time staffers, according to university records.
But Smith provides more than business consulting services for the university.
He uses his legislative role to get state money for the school, according to his own press releases.
In 2016, he said that through his “hard work” he legislated $300,000 in state money to fund wrestling at the university.
Last year, he touted his legislative maneuvering to get another $9 million for a university field house.
University officials said they approached Smith for that money because he sits on a legislative committee that funds construction.
Tim Seydel, a university vice president who handles government relations, couldn’t recall if he asked for help from the university’s local legislator, state Rep. Greg Barreto.
And Seydel said there was no connection – “none” – between the university’s willingness to hire Smith’s company and his legislative help.
Documenting the relationship between the university and Smith wasn’t easy. Asked for the university’s contract with Smith’s company, university officials instead produced contracts with its state and federal government partners. Asked for documents about operations of the business center required by those contracts, officials said they didn’t have many of them.
A university official wrote that Smith and Company “has not been submitting many of these reports” and the university hasn’t been requiring the company to do so.
The university subsequently required Smith to turn over such records and in turn released them to the Enterprise. But it refused to produce time records for those working at the business center, doing so only after Union County District Attorney Kelsie McDaniel ordered their disclosure following a petition from the newspaper.
The budgets, performance reports and time records provide a revealing look at how Smith has operated.
Last January, Smith represented on a government form that he devoted “100% of my time and efforts” to running the business center. The university could provide none of the records required by contract to document his hours.
“Mr. Smith has informed us that he does not keep a timecard for himself,” Burford, the general counsel, wrote in an email last week.
Eastern Oregon University provides free office space to Gregory Smith and Company in this La Grande building to operate the university’s Small Business Development Center. (Dick Mason/La Grande Observer)
The business center said in a report last year that Smith drove 300 to 400 miles each week to counsel clients.
Yet a financial report from the center in 2017 said the staff collectively logged 1,818 miles over the year – an average of 34 miles a week.
Time sheets, heavily redacted, documented hours put in at the business center by every employee except Smith.
One was for Julee Hicks, a part-time advisor at the La Grande business center. Hicks also works for Smith and Company 45 miles away in Baker City under a county contract that pays $96,000 a year.
Hicks certified last January that she spent “65-75%” of her time at the university’s business center in 2018. For someone working full time, that would mean about 113 hours a month.
But her time sheets showed Hicks has logged no more than half those hours and sometimes significantly less. In December, for instance, Hicks logged three hours for the La Grande center.
As part of its required annual reporting, the business center produced a “success story” about its accomplishments. One told about helping a La Grande couple establish a retail business a year ago.
The account credited Smith personally with providing business advice and loan referrals to Tim Camp, the university’s football coach, and Janet Camp, who until last year worked for the university.
Smith provided more than counseling to the couple.
Janet Camp said last week that her business, Real Deals, leased its store space from Smith and Company.
Smith is required to file an annual conflict of interest statement relating to his service to the business center. He pledged in his statement last October that he would not “enter into any agreement, contract, or partnership directly or indirectly with any SBDC client.”
Seydel, the university vice president, said he was unaware of the lease.
Asked if it was appropriate for the university’s business center director to have outside business relations with center clients, Seydel said, “I’m not prepared to answer.”
The business center also reported on Smith’s role in sending business clients to outside sources for loans. That included three that separately pay Smith or his company to manage their loan programs — Morrow Development Corp., Umatilla Electric, and Wheeler County.
Seydel said last week he was aware of Smith’s connection to those lenders, that “he has some influence over them.”
But Seydel was unaware that Smith’s conflict statement stated that as the business center director he would not “recommend to active clients” the purchase of services that “I have an interest in or represent.”
Seydel wouldn’t address the conflict.
“That’s a matter for the state ethics commission,” Seydel said.
Depot controversy
Smith has drawn criticism in his other full-time job.
Since 2015, Smith has been the $107,000-a-year executive director of the Columbia Development Authority, based in Boardman. His job is to orchestrate the transfer of the Army’s Umatilla Chemical Depot to local ownership, both for a major industrial complex and a wildlife preserve.
Smith at least once used his legislative role to benefit his Boardman employer.
In 2017, he arranged legislation to set aside $7 million in state money for roadwork needed by his employer as part of industrial development of the former military base. The money was part of a massive transportation plan passed by legislators.
“I do have clients that have projects funded through this bill,” Smith wrote in declaring a potential conflict before the committee that handled the legislation and where Smith had a vote.
He didn’t disclose in his statement or in a later press release claiming credit for the funding that he was an employee of one of the winners of the state funding.
Part of his job in Boardman was to strike a bargain with the Confederated Tribes of the Umatilla Indian Reservation to preserve cultural and historic sites and wildlife territory on the old Army base, which closed in 2012.
A sticking point was what to do about historic trail remnants, including sections of the Oregon Trail.
Don Russell, a Morrow County commissioner and president of the development authority, said one trail portion was “right in the middle of what was going to be industrial property.”
As efforts dragged, Smith tried to recruit state officials to mediate between the developers and the tribes, but agency officials said no.
Then, last June, Smith issued a take-it-or-leave offer to the tribes, according to minutes of a June 2018 meeting.
“He made clear that this is a limited time offer to expedite and conclude consultation,” the meeting notes showed.
A deal finally was struck earlier this year.
The development authority would save about 100 yards of historic trail, put up a kiosk, and leave a longer stretch of the trail intact on land being transferred to the Umatilla tribes.
The tribal board voted 4-3 to accept the deal in April, but accounts of the meetings in the tribal newspaper, the Confederated Umatilla Journal, showed unhappiness with Smith.
One tribal official, Teara Farrow Ferman, told the board that Smith had been “threatening” the tribes, particularly over plans to preserve Oregon Trail segments that cross the former military base, according to the Journal’s account.
Aaron Ashley, a board trustee, was among those voting against the deal, blaming Smith.
“I don’t care for the way he conducts business,” Ashley said. “I don’t trust him.”
No charge
The same transportation legislation that yielded money for the Boardman project provided Smith with another paying customer.
The Linn Economic Development Group, an Albany organization largely funded by public money, was in line for $25 million in state money to turn a former mill site into an industrial rail shipping center.
In late 2017, Smith made his pitch to manage the project and Roger Nyquist, a Linn County commissioner, was impressed. He didn’t know the Heppner legislator, but listened as Smith spun out his record of economic development.
“Greg has a unique and specialized skill set,” Nyquist said.
The state Transportation Commission on June 20 will consider releasing state money for a rail shipping center on this former mill site in Millersburg, near Albany. (Mark Ylen/Mid-Valley Media)
Over the next year through last October, the development group paid Smith and Company $158,000 to manage planning for the rail shipping center, negotiate a $10 million land deal, and unlock the state money.
But the project hasn’t gone as planned and is behind schedule. Nyquist said Linn County twice paid fees to keep the property locked up — $300,000 so far to the owners that won’t count toward the purchase.
When state money to pay Smith and Company ran out last October, the local development group caught a break.
Smith agreed to continue his company’s work – at no charge. He has done so for six months, waiving what had been until last fall a $10,000 monthly fee for his company.
James Ramseyer, a local utility company executive and chair of the development group, said there was no agreement, formal or informal, that Smith’s company would be paid for its recent work. He wasn’t sure why Smith would give away his services.
“He probably feels it’s the right thing to do, to get this where he said it could get,” Ramseyer said.
Smith offered no such deal to Malheur County, one of the poorest counties in the state and literally in another time zone from the rest of Oregon.
Since 2013, Smith and Company has been paid $108,000 a year to run the county’s economic development agency. Smith also was put in charge of the county’s own rail project, with $26 million in promised state money on the line.
To keep the project moving, Smith approached the county last summer for an additional $72,000 a year for his company.
He suggested to county officials that the expense could be reimbursed by the state. That was how it worked for the Linn Economic Development Group, which turned in bills from Smith and Company and got back $108,000 from the state.
That didn’t happen in Malheur County. Smith did submit claims to the state for other consultants but submitted no claims to reimburse the county for his services.
Last month, while still working for free in Linn County, Malheur County officials agreed to kick in another $72,000 for Smith and Company’s continued work on the rail project.
County Judge Dan Joyce and Commissioners Don Hodge and Larry Wilson approved the money.
Wilson said via email that Smith hasn’t offered to work for Malheur County at no charge and didn’t tell commissioners he was working for free on another rail project on the other side of the state.
Les Zaitz: [email protected], @leszaitz; Pat Caldwell: [email protected], @patcaldwell27; Kristine de Leon: [email protected], @deleonkrist; 541-473-3377.
HOW WE DID THIS STORY
This is the third report in a recent series by the Malheur Enterprise examining the behind-the-scenes work for the Treasure Valley Reload Center and the role of Greg Smith, Malheur County’s economic development director.
The stories are based on public records that included contracts, invoices, emails, and government reports. They came from the Oregon Transportation Department, Oregon Department of Revenue, Oregon Parks and Recreation Department, the state Department of Land Conservation and Development, and Eastern Oregon University. Records also were obtained from officials in the following counties: Malheur, Harney, Baker, Union, Wheeler, Morrow, Deschutes, Marion, Clatsop.
Most agencies responded to public records requests quickly and at little or no charge. Malheur County officials charged $35 an hour and sometimes took up to three weeks before releasing economic development records.
In one instance, the Enterprise petitioned and obtained a public records order. That order required Eastern Oregon University to turn over documents.
Reporters also interviewed more than two dozen county and state officials and no unnamed sources were cited in the story.
The Enterprise attempted repeatedly to interview Smith, leaving voice and email messages that produced no response. Smith, however, recently did give an interview to Portland’s alternative weekly, Willamette Week. The Enterprise in recent weeks sent Smith a series of detailed written questions, including one six-page batch and last week a five-page batch. He didn’t answer.
