Kitzhaber's triangle: one girlfriend, two companies
The sudden hubbub about an Oregon Department of Justice investigation into a company associated with former Gov. John Kitzhaber's girlfriend has included some serious head-scratching about Kitzhaber's involvement with that firm. Even the ex-gov himself couldn't figure it out. As the O reported last night:
Kitzhaber confirmed he was once on the board of 3EStrategies. When asked if he is still on the board, he said, "I'm not sure if I am or not." A Kitzhaber campaign spokeswoman later said he is no longer on the board.It's easy to see how there might be confusion, because in recent years there have been not one but two Oregon companies by the name 3E Strategies, and the Kitzmeister's friend of the female persuasion, Cylvia Hayes, has been involved with both of them.
According to the Oregon secretary of state, the first 3E Strategies was an Oregon nonprofit (public benefit) corporation formed in January 2002. Its original name was Earth Connections - Oregon. In July 2003, it changed its name to 3E Strategies, and it kept that name until February 2009, when it changed it again to what it is now -- Green Economy Institute, Inc.
The IRS forms that the nonprofit filed for 2007 and 2008 both show Kitzhaber as a director and Hayes as full-time executive director. The 2008 form wasn't filed with the IRS until Sept. 29, 2009, but the instructions state that people who were directors during 2008 are to be listed. Thus, Kitzhaber was a director of the nonprofit organization for at least some time in 2008. He is also still listed, to this day, as a director of the nonprofit on its website, here. Meanwhile, Hayes is still listed as the nonprofit corporation's registered agent for state corporate law purposes.
On the day the nonprofit changed its name in 2009, a new, for-profit limited liability company, named 3E Strategies LLC, was formed. The Oregon secretary of state summary page about the for-profit company is here. Hayes is listed as a member, but LLCs don't have "directors," per se, and Kitzhaber's name doesn't show up anywhere in the business registry for the for-profit company. The company's tax filings with the IRS are not public. And that's if there even are any IRS filings -- single-member LLCs are typically ignored for federal tax purposes.
It remains to be seen which of the two 3E Strategies entities the attorney general's office is investigating -- the nonprofit corporation, the for-profit LLC, or both. The focus of the inquiry seems to be several consulting contracts that one or more Hayes entities have landed with one or more state agencies, particularly the shadowy Department of Energy. According to the nonprofit's website, the nonprofit did consulting work as far back as 2004:
In 2004, 3EStrategies began providing consulting services on green building, clean energy, sustainable business operations, and economic development projects. The demand for those services grew steadily.This last paragraph doesn't appear to be true as a matter of corporate law. The nonprofit did not become a for-profit LLC -- it simply changed its name, and a new LLC with the same name sprang up the same day. But more importantly, there was apparently lots of consulting going on when Kitzhaber was indeed on the board of the only 3E Strategies that existed at the time. And so if the investigation results in any criminal charges being filed, it could be quite damaging for the once-and-(he-hopes)-future governor.
In 2008, believing that making the transition to a post-fossil fuel, low carbon economy, was no longer being hampered by lack awareness or concern, but rather by lack of actual examples of the green economy in action, 3EStrategies decided to become a limited liability company focused directly on policy development and consulting on concrete, successful green buildings, clean energy companies and low carbon footprint businesses.