IRS joins influence-peddling probe of Oregon ex-governor, fiancee

[February 27, 2015]  By Shelby Sebens
 
 PORTLAND, Ore. (Reuters) - The U.S. Internal Revenue Service has joined federal and local agencies investigating criminal corruption allegations involving former Oregon Governor John Kitzhaber and his fiancée, state officials said on Thursday.

Kitzhaber resigned this month amid state and federal criminal probes into an influence-peddling scandal involving allegations that his fiancée, Cylvia Hayes, used her unpaid position in the governor's office for personal financial gain.

Officials from the IRS and the FBI questioned Michael Jordan, director and chief operating officer of the state Department of Administrative Services, on Feb. 12, a day before Kitzhaber announced he was stepping down, Jordan's spokesman Matt Shelby said.

Kitzhaber and Hayes have not responded to requests for comment. The IRS and FBI declined to comment on the investigation.

The state's top lawyer and the U.S. Justice Department have launched separate criminal corruption investigations into the allegations that Hayes sought financial gain from her position in the governor's office.

The Oregonian newspaper has reported that Hayes appears not to have filed all of her income from her environmental consulting company on her 2012 tax return.

The FBI is seeking information on Kitzhaber's policies as well as his fiancée's tax returns and information related to her role in state government, according to Justice Department subpoenas. Federal subpoenas also request information contained in Kitzhaber's email correspondence.

Unrelated to the conflict-of-interest investigations, Jordan has launched his own criminal probe into the leak of Kitzhaber's personal emails to local media and has placed two employees at the state agency in charge of archiving the emails on paid administrative leave, Shelby said.

The Willamette Week newspaper reported last week that newly obtained emails revealed Hayes had planned to leverage her position in the governor's office to get consulting projects.

Kitzhaber's emails also revealed a strategy to halt an ethics investigation into the allegations surrounding his fiancée, local media reported.

On Friday, Kitzhaber asked Oregon Attorney General Ellen Rosenblum to investigate whether his personal emails on state computers were "criminally accessed" and released to the press. Hayes on Thursday sued the Oregonian newspaper to block the release of her state-related emails, the newspaper said.

Rosenblum has ordered Hayes to turn over any personal emails related to state business.

(Reporting by Shelby Sebens in Portland, Oregon; Editing by Eric M. Johnson)

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