The Marion Soil and Water Conservation District’s board chair is the subject of a state investigation into a complaint that he used his position for financial gain.
Six members of the Oregon Government Ethics Commission voted unanimously July 8 for a full investigation into allegations that Terry Hsu participated in board discussions that resulted in the district paying him.
According to a June 23 review by commission staff, the complaint alleged Hsu also violated state ethics law by not disclosing a conflict of interest or staying out of discussions about pay for an open district position he was then selected to fill.
Hsu denied he voted on his pay or took part in board members’ discussions about hiring for the position in a response to the complaint.
The vote comes after commission staff in a preliminary June 23 report recommended a more thorough investigation into the allegations against Hsu.
It’s a rare step for the commission in the Salem area. The last time the commission voted for an investigation and then ruled on a complaint out of Marion County was in November 2020. That complaint concerned executive sessions held by the Silver Falls School District’s board of directors and ended in a settlement.
The commission received the complaint about Hsu on on April 29, signed by Susan Ortiz, programs assistant for the Marion Soil and Water Conservation District.
The district formed in 1971 to work on problems impacting Marion County’s land and water resources, like flood control, riverbank stabilization, weed control and improving soil fertility, according to the district’s fiscal year 2022-23 budget message.
Hsu has served as chair of the district’s board of directors since January 2019, according to the preliminary report. Seven board directors are elected by county voters for a term of four years and are unpaid volunteers.
The district has a roughly $3.84 million annual budget and eight employees, most of whom do conservation work for landowners and land managers, the budget message said.
Hsu also worked as the district’s interim manager, a paid position, for five weeks starting in July 2021 while they awaited a new manager.
Hsu is a farmer and water resources engineer with over 30 years of experience working on urban civil engineering projects in the west coast and midwest, according to a biography on the district’s website.
The report said that Hsu at least twice used or tried to use his official position for financial gain that wouldn’t otherwise have been available to him if he weren’t on the board already.
Board members may work for the district but under state law must disclose their conflict of interest and refrain from discussion and voting on any topic where they have a conflict. Public officials are also prohibited from trying to use their official position obtain financial gain or avoid financial detriment for themselves.
Hsu initiated a discussion at an April 2021 board meeting about compensating himself for his volunteer time as a board member. According to the report, he disclosed a conflict of interest only after making a comment about what would be fair to him.
He later made recommendations at a July 2021 meeting about salary and hours which resulted in him being hired as interim district manager and receiving pay, the report said, adding that he failed to disclose a conflict of interest before discussing the policy.
Hsu told the board how much he makes as an engineer, as well as the lowest amount he would accept.
“Because the effect of the Board discussion and action would have a certain financial impact on Terry Hsu, he was required to publicly disclose a conflict of interest and refrain himself from any discussion,” the report said.
Hsu did announce a conflict of interest and abstain from voting on hiring and pay for the position. But according to the report, the recommendations he made resulted in him signing a contract to be paid $11,900 over seven weeks.
The board in August 2021 cut that pay to $8,500 over five weeks after learning the new district manager would be starting sooner than expected.
Ortiz also said in her complaint that Hsu did not vacate his seat on the board while being paid for the temporary position.
According to the preliminary report, a board member who fills in as interim manager must suspend their board and officer position and can have it reinstated after they’re done in the temporary role.
“Mr. Hsu fully and absolutely denies engaging in any misconduct, as alleged in a complaint to the Oregon Government Ethics Commission,” his attorney, David Elkanich, said in an email Monday to Salem Reporter.
Before Hsu was appointed district manager, Elkanich said, “the MSWC contacted (the commission) to ensure it followed the correct procedures, and Mr. Hsu properly abstained from voting on his appointment due to a conflict of interest. Mr. Hsu was transparent with the MSWC and will fully cooperate with the (commission’s) investigation, after which Mr. Hsu looks forward to the matter being dismissed.”
At the commission’s July 8 meeting prior to the vote, Hsu said, “I never had any intention of violating any Oregon statute. I was genuinely crushed to read the investigator’s conclusion that I acted without ethics. I will respect the commission’s decision today.”
Hsu also denied the allegations against him in the preliminary report, saying he relinquished his role as chair and stayed on the board as a non-voting member.
“I made no votes on my own remuneration or reinstatement. The truth is evident from the documentation of the Board,” he said.
Hsu said he previously had conversations with board members about “how to best provide direction to the Marion SWCD from time to time,” stating that’s acceptable as long as they don’t arrive at a decision outside a public board meeting.
He also said there is precedent for board members receiving compensation while accepting an open position in a special district.
In the Reynolds School District in Fairview, a board member with an accounting background served as director of finance with pay “for a brief period of time” when the person previously in that role left.
The commission’s investigation of Hsu can last up to 180 days, according to Ron Bersin, the commission’s executive director.
Contact reporter Ardeshir Tabrizian: [email protected] or 503-929-3053.
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Ardeshir Tabrizian has covered criminal justice and housing for Salem Reporter since September 2021. As an Oregon native, his award-winning watchdog journalism has traversed the state. He has done reporting for The Oregonian, Eugene Weekly and Malheur Enterprise.
