Q and A with Steve Elzinga, Former Secretary of State Government and Legal Affairs Director

You served as government and legal affairs director under the late Oregon Secretary of State Dennis Richardson from January 2017 to March 2019. You were 29 years old when first appointed. What were your duties?

Working for Secretary Richardson was the opportunity of a lifetime. He was an honorable man, amazing mentor and good friend. He brought me on board as his principal legislative and legal strategist when he took office, and I served on his executive team helping oversee and coordinate seven agency divisions.

Day to day, I served as his liaison to the legislature, Land Board and other agencies. By carefully managing the agency's legal portfolio, I reduced costs by thousands of dollars. I also managed agency administrative rulemaking and crafted an innovative rule to protect the rights of 60,000-plus Oregonians to receive ballots and sign petitions.

My secondary duties included assisting with agency communications, press releases, social media posts and newsletters with hundreds of thousands of recipients. I also led our financial transparency project, which made the secretary of state the first state agency to post monthly updates of all spending online.

 

Dennis Richardson was elected in 2016, the first Republican to win statewide office since 2002. Many Republicans urged Richardson to be a partisan standard-bearer. Instead he used the secretary of state's auditing role to open our political process. Describe Richardson's philosophy toward the office and its auditing role? Was he successful in his vision? What was your role in supporting his work?

Prior administrations treated the auditing role as working for the bureaucracy they were auditing. By mostly avoiding audits in known high-risk areas and downplaying problematic audit findings, this approach was partially responsible for government failures like low high school graduation rates and hundreds of millions wasted on Cover Oregon.

Secretary Richardson had a different vision focused on nonpartisan accountability. He promised to open up government to the people and to audit on their behalf, especially for the most vulnerable. He believed that transparency was the best disinfectant to bring accountability, and he realized that it is only achieved if key audit findings are communicated directly to the people. He used newsletters, town halls, social media, live streaming videos and audit summary pages. He also empowered other watchdogs by providing pre\release briefings for legislators, embargoed advanced copies to the media, and audit follow-up reports. I assisted with most of these communications strategies.

The results speak for themselves. Secretary Richardson's audits won national awards and saved our state tens of millions by catalyzing reforms that reduced improper Medicaid payments. His audits launched statewide conversations about helping children in foster care and Portland Public Schools. They even revealed how the state could save hundreds of millions every year through a more efficient purchasing system. This all happened because he audited for the people.

 

In November 2017, your office released an audit that estimated the Oregon Health Authority overpaid $88 million to Oregon citizens on Medicaid who were either receiving duplicate payments or were ineligible for the program. Months later, Gov. Brown and OHA began a cleanup of Medicaid eligibility roles -- a win for state government.

Yet Rich Vial, Oregon's new deputy secretary of state, reportedly stated in Capital Chatter, "Richardson's marketing of audit reports came across as hyper partisan." Why was Richardson's successful approach viewed as hyper partisan? Why would Vial undercut Richardson's work so soon and so politically?

While some state leaders argued that inconvenient audit findings were partisan, they undermined their own claims by agreeing with 99 percent of audit recommendations. This excuse was merely an attempt to avoid responsibility. The Medicaid Audit Alert was a huge success as it saved our state tens of millions and won the 2018 Excellence in Accountability Award from the National State Auditors Association.

I've always known Rich Vial to be a thoughtful and reasonable person. He is a good man. I suspect that, if you asked him, he would tell you that this reported comment was taken out of context and not reflective of his own perspective.

This goes to a deeper point. Part of the reason that Oregon has been a one-party state for so long is that centrists and conservatives spend too much time fighting each other instead of building coalitions united around common goals. Center-right leaders should be focused on working diligently to increase transparency, accountability and efficiency in government. Oregon's political dynamics will not change until the short-term mindset of a minority party evolves into a long-term majority strategy that includes rising above perceived slights.

Overall, I'd encourage people not to judge the new administration by a few fumbles in their first few months of office. I certainly remember several mistakes we made as we were getting started. Instead, watch to see if they audit thoroughly, communicate clear summaries of audits directly to the people, produce efficiency changes, run elections fairly, and increase excellence in the agency. Those are the results that matter.

 

Still more tension arose between the secretary of state's work and the governor with the 2018 release of the Office of Child Welfare audit. Three weeks later Gov. Brown, without referencing the audit, asked the Oregon legislature for $14.5 million to hire childcare welfare caseworkers for foster children and their families. Meanwhile, in the Salem Statesman Journal, Brown's communications director Chris Pair complained that the audits "are just about politics."

Explain the tension between the governor's office and secretary of state's office over these audits? How did Richardson respond to political criticism by the governor?

The public officials who lose credibility due to an audit are those who try to cover up failures and avoid responsibility. In contrast with the Governor's spokesperson, the director of the Department of Human Services immediately embraced accountability by acknowledging failures and began working to make improvements. It is unfortunate that he has not been given the support that he needs to fully address this issue, and it most certainly is not "just about politics" to say that kids in foster care need our help.

Failure to fully address the foster care crisis is one of our state's greatest moral failings. Oregon leaders must take this issue more seriously.

Secretary Richardson adopted a daughter out of the foster care system. My wife and I served as foster parents for several kids. Foster care is personal for us. We saw firsthand how foster kids are suffering and falling through the cracks. Many foster parents feel unsupported. Caseworkers often struggle to juggle too many cases with too little assistance.

Secretary Richardson brushed aside partisan criticism and rose above the political fray when the foster care audit was released. He invited members of the governor's team to participate in the audit release press conference to share their plans for improvement, but they declined. Even so, he reminded everyone who would listen that this is more than just a leadership or legislative problem. The foster care crisis is an Oregonian problem.

We all share responsibility, and we can all help -- whether serving as foster or adoptive parents, babysitting kids to give foster parents a night off, assembling welcome baskets for new foster kids, or sending an encouraging card to a caseworker. Secretary Richardson helped collect and deliver blankets for foster kids to child welfare offices. There are some amazing unsung heroes out there who are making a difference in kids' lives; we need more of them.

 

In January 2019, one month before Richardson passed away, his office released another critical audit, this one of the Portland Public School District.

In OPB's article on the audit, "In Unusual Move, PPS Criticizes Audit Before It's Released," reporter Rob Manning wrote, "PPS went through significant contortions to criticize the audit in advance of its release." Manning wrote that after its release PPS board members found no factual errors with the audit but were concerned about the audit's tone.

What was your office's reaction to this pattern of undermining the secretary of state's work, especially when the public and press seemed to welcome these audits? Though Richardson passed away just a month after the audit's release, was he actively involved in the PPS audit? What if anything has come of the audit results?

On the morning of the PPS audit release, Secretary Richardson tweeted, "It's disappointing that some Portland Public School leaders are trying to cover up highly concerning audit findings. This aversion to accountability shows why transparency is needed ... The goal of the audit is to help improve our schools. The fact that Portland Public Schools agreed with all recommended changes in the audit shows that the audit was needed and fair."

Secretary Richardson believed that vulnerable children were bearing the brunt of PPS leadership failures, and he wanted to advocate for those kids. He selected the audit due to a campaign promise, but he gave auditors independence in conducting the audit to ensure that it would have maximum impact.

Secretary Richardson was not afraid to call out the systemic and heartbreaking discrimination revealed by the audit, even though powerful political figures wanted him to back down. The audit objectively confirmed many longstanding complaints about educational failures from advocates for marginalized communities. It gave them a voice that cannot be ignored and a game plan to follow.

 

On February 26, Oregon Secretary of State Dennis Richardson passed away from brain cancer. A month later, 83-year-old Bev Clarno was sworn in to succeed him. The following morning, you and Richardson's other two top aides, Deputy Secretary of State Leslie Cummings and Chief of Staff Deb Royal, were fired.

When asked by the media about the firings, Clarno said her office would not comment on any staff transitions as "they are personnel matters."

How would you characterize the transition process? How would you characterize the way you, Royal and Cummings were dismissed? Were you treated fairly?

I'm not going to opine on the transition, but I'll share what happened. The first workday after the governor appointed the new secretary, I was called into the HR office and asked to resign by staff from the governor's Department of Administrative Services. By agreeing to resign, I was given a small severance and a few minutes to gather my things. It was similar for Leslie and Deb.

While I was certainly disappointed, I wish the new team all the best. They are good people, and I've offered to help however I can. I am hopeful that they will honor the will of the voters by continuing Secretary Richardson's work.

 

Dennis Richardson was elected by Oregon voters in 2016, and he promised to use the office's audit power to thoroughly and fairly evaluate our government agencies. Did he keep his promise? Has Gov. Brown upheld the voter's wishes with her actions since his passing?

Yes, Secretary Richardson kept his promise. All told, his audits identified hundreds of millions of dollars in wasteful spending. The overwhelming outpouring of support from varying political perspectives and all corners of the state after his passing demonstrates the profound difference that he made in just a short time.

I commend the governor for speaking at Secretary Richardson's funeral and appointing a real Republican to replace him. The most important actions to honor his legacy would be to increase transparency and finally address the many issues his audits identified in state government, especially in foster care.

 

Deputy Secretary Rich Vial recently commented on the transition from Richardson's vision of the secretary of state's office to Bev Clarno's future work: "I don't think you will see any reduction whatsoever in the level of detail and the attempt to be very, very thorough in exposing what we can do better. But I do suspect you may see a slight rebalancing of how things are communicated."

Since you were involved in a lot of the communications work of the office, what do you think Vial is really saying here?

I'm not sure. The new administration is still figuring out how to run the agency and should reach their stride soon. I've encouraged them to continue Secretary Richardson's model of auditing high-risk areas to protect the vulnerable and communicating audit summaries directly to the people.

 

What are your immediate plans? How difficult is it to build a non-partisan professional career in one-party Oregon after being a devoted public servant to an opposition leader? Is there even such a thing as a civil servant in blue Oregon, or is it all politics all the time?

Sadly, much of state government seems to prioritize conformity above competence. That is part of the reason I've decided to take a job in the private sector. I believe that the ship of state can slowly be turned in a better direction, but I think I can have a greater impact through volunteer public service right now.

I'm excited to join the business law and litigation team at Salem firm Sherman Sherman Johnnie & Hoyt. My plan is to build a legal practice advocating for those harmed by overreaching government regulation. My legal work will continue advancing Secretary Richardson's vision of increasing transparency, accountability and integrity in Oregon government.

 

 

OBI Goes MIA and Oregon Business Suffers
By Eric Fruits

Many business owners were shocked earlier this month when Oregon Business & Industry (OBI) announced it would be "neutral" on the legislature's $1 billion-a-year "corporate activities tax." The president of Freres Lumber, a large Linn County company, quit the group's board and the organization, concluding, "OBI has lost its way and the new tax is the final straw." In a letter to OBI members, Rob Freres encouraged his fellow OBI members to join Oregon Manufacturers and Commerce, another business group that he helped form last year.

The new tax will be assessed on all firms, not just corporations, and is triggered once a business hits $1 million in sales. One million dollars in sales may seem like a lot to a legislator, but many small businesses, such as restaurants, auto repair shops and consulting firms, can easily generate $1 million in sales a year. About a quarter of employers in Oregon -- 23,000 firms -- have sales of $1 million or more a year, according to the Census Bureau.

Thousands of start-ups and small firms will be subject to thousands of dollars in new sales taxes on top of the income taxes they already pay. The Oregon Small Business Association called the tax "one of the worst forms of taxation." It's easy to see why so many business owners think they were betrayed by OBI, which claims to be "a united voice for Oregon business."

OBI's action (or inaction) and Freres' responses raise a key question: Who actually is the "business community"?

Like any community, the Oregon business community is made up of thousands of diverse firms with divergent interests. In the past, the business community looked past their differences and focused their efforts on common issues: low taxes and light-touch business regulation. While looking out for their own interests, deep-pocketed big businesses opened an umbrella that also protected the interests of the business community at large. For example, in 2001, the business community succeeded in changing the corporate tax apportionment formula to reduce the tax burden on business and to limit the potential for costly lawsuits stemming from environmental audits.

Now, the umbrella is folding up, as individual businesses and industries seek to serve their own narrow interests with little concern, or to the exclusion, of other firms working in Oregon.

Over time, the failure of state and local government led to fractures in the business community. Declining graduation rates have increased business demands for more education spending among employers demanding college graduates. Crumbling roads and increasing congestion drove demand for last session's transportation package that hiked Oregon's gas tax. Oregon's tax increases on health insurance to fund the Affordable Care Act's Medicaid expansion has split the business community into haves and have-nots -- companies who can afford employee health insurance and those who can't.

Against this backdrop, politicians have found success in a divide-and-conquer approach toward business. Last year, Nike formed an alliance with labor organizations to promote new taxes to fund more school spending, including the corporate activities tax. Others, such as Intel, Freres Lumber and many small businesses, opposed the new tax. With a message that a billion dollars a year in new taxes were going to be imposed one way or another, everyone was playing the game of "Don't Tax You, Don't Tax Me, Tax That Fellow Behind the Tree."

Lobbying over this year's cap-and-trade bill is a case study in how self-interest and fear for survival pit businesses and industries against each other. With every interested party seeking their own carve-out, it looks like the biggest losers will be the firms who don't have a lobbyist in the Capitol ... and the state's middle class motorists.

Perhaps it is folly to believe there ever was such a thing as the Oregon Business Community. Regardless, it is becoming ever clearer that our elected leaders are taking advantage of divisions among firms and industries to lead the state on a path of higher taxes and heavier regulation. The labor movement learned years ago that there's power in union. It's a lesson Oregon businesses need to relearn.