Greg Smith, a state legislator and Malheur County's economic development director, appears at a public meeting regarding the county's proposed rail shipping center. John Braese, a project manager for the county agency, was hired in 2018 to help. (Pat Caldwell/The Enterprise)

VALE -- Greg Smith pitched Malheur County for more public money for his company last June.

The county was already paying Gregory Smith & Company $108,000 a year for economic development services.

Now, Smith was asking for another $72,000 to bring on a staffer who would focus on pushing ahead work on the proposed Treasure Valley Reload Center.

The Malheur County Court – Judge Dan Joyce and Commissioners Larry Wilson and Don Hodge – voted on June 6, 2018, to approve the money. Recently, the county court tentatively agreed to extend the extra payment another year.

But questions are emerging about what county citizens are getting for the extra $6,000 a month paid to Smith’s company – and what they have been getting for the $9,000 monthly payments from the county to his company dating back to 2013.

Smith said in a letter to county officials last June that the additional money would give him help in writing a proposal for the Treasure Valley Reload Center to free up $26 million in state money.

Yet the state funding remains up in the air as the state raises questions about the Malheur County’s proposal.

Smith also wrote that the extra help was needed to sell the federal government on giving the county project more money, later pegged at $25 million.

That bid for federal money, though, appears largely incomplete despite months of work, based on records released last month. Smith so far hasn’t detailed what Malheur County would do with those millions.

County documents show that Smith’s new hire engaged in tasks beyond working on the Nyssa rail project.

John Braese, project manager at the Malheur County Economic Development Department, has spent time on an economic development project in the Willamette Valley in which Malheur County has no role. Smith’s company is earning a fee from a Linn County consortium for private work on that project.

And Braese, a former Enterprise reporter and corrections officer, attended banquets and a chili feed, took field trips to shoot photos for Facebook and once served as a driver for his boss.

Smith didn’t respond to interview requests or address six pages of questions from the Enterprise sent May 10.

Instead, last Thursday, he sent an email: “Should economic harm occur from your story, I will be happy to provide you the names of my legal team.”

Braese also didn’t respond to written questions.

The questions were sent to Joyce, the county judge, and Grant Kitamura, an Ontario onion company executive who is president of Malheur County Development Corp. Neither one responded.

That silence by Smith and county officials leaves the public largely in the dark about an operation now costing Malheur County at least $15,000 a month. The Enterprise gathered hundreds of pages of public records to shine a revealing light on the operations of the Malheur County Economic Development Department.

Private firm, public money

When Malheur County officials retained Smith and his company six years ago, they outlined 12 “deliverables” they expected for their $9,000 a month.

Gregory Smith & Company, based in Heppner, was to help retain businesses already in the county and “ensure that any incentives for new businesses do not harm existing businesses.” The company was to market the county to attract new employers, create a land inventory, and work with other local groups.

The mission, according to the 2013 contract, was to “ensure a welcoming and pro economic development culture” that would create “family wage jobs for citizens of Malheur County.”

Smith uses the title of economic development director but he isn’t a county employee. He also has a full-time job in Boardman and serves as a state representative from Heppner.

Under the Malheur County contract, “no other expenses, per diem or costs” were to be paid to Gregory Smith & Company.

County documents show, however, that Smith until last year used a county credit card, paid directly by the county.

“I wouldn’t know what’s on the card,” Joyce said, explaining that all county department heads get a credit card.

Records obtained from the county through the state public records law show Smith has charged travel expenses in Oregon, Washington, California and elsewhere.

That travel included expenses to go to Anaheim, Calif., in March 2018 to attend the Natural Food Expo. Smith and his wife, Sherri, managing partner of his company, both registered for the convention. Smith charged costs including airfare, a rental SUV, and a hotel to the county credit card. The event cost the county $2,525.

Smith posted a Facebook video clip talking about how he was handing out material at the event.

“It was a great day at the Natural Products Expo promoting Malheur County as ‘Open for Business,’” he posted on Facebook.

But Smith and his wife registered as attendees and not exhibitors, expo officials said.

“Only contracted exhibitors are permitted to promote their products, services or company,” according to the show’s policies.

“Some non-exhibiting attendees do try and succeed by evading security but our rules limit handouts to booths or education events,” said Carrie Kocik, Expo spokeswoman.

While registered for the Anaheim expo, receipts show that Smith stayed at a hotel in North Hollywood – 35 miles away from the conference and roughly a two-hour drive during the day in notorious Los Angeles traffic. The hotel is near Hollywood, Universal Studios and other attractions.

The county’s contract requires the Smith operation to report regularly on what it’s doing for Malheur County.

The company is to deliver four times a year “written goals, objectives and work plan for positive economic development change,” according to the contract.

The Enterprise submitted a public records request to Smith seeking that material. He responded that there “are no written records.”

The Ontario office of the Malheur County Economic Development Department is supposed to be staffed no less than 30 hours a week, according to county records. (Pat Caldwell/The Enterprise)

His company also is required to make “monthly oral reports or meetings” to the county court.

Court minutes show that in 2018 Smith appeared for updates in April and again in October. He hasn’t appeared before the county court with an update in the six months since.

Joyce said “I’ve seen him here twice a month” and “as needed.” Smith also started providing weekly emails to the county commissioners, largely focused on news about the rail project.

The contract also requires Smith and Company to “generally identify and describe work completed” when submitting its monthly bill.

“I haven’t even looked at the invoices,” Joyce said, noting he doesn’t “micromanage” Smith’s work.

The Smith company’s monthly bill to the county for the $9,000 fee lists simply “economic development services rendered.” For its $6,000 fee, it lists “project manager services.”

Smith and Company also is required to establish an office in the county that “shall be staffed with regular business hours of no less than 30 hours per week.”

The Enterprise sought from the county and Smith any record verifying that office staffing. Smith responded with only with Braese’s time cards.

The circumstances are confusing since Smith provided time records for no other employee related to the Ontario office.

The county already is paying for Braese’s position through the $6,000-a-month contract.

Yet Smith and Company was also being paid under the other contract for office staffing. Smith and Company invoices show no credit or reduction in its original monthly fee to account for staffing circumstance.

The records also show that Smith and Company charged the $6,000 for July 2018 but the county’s announcement said Braese’s hiring was “effective August 1.” Smith didn’t respond to questions about the matter.

Chasing more money

Braese was brought on with a key goal: Get more money for the county.

The press release last summer said the new county economic development worker “will concentrate his efforts on securing federal money to assist in infrastructure for the upcoming rail facility.”

Smith told the county the job was short term – one year. Last week, county officials agreed to extend the contract another year. The draft of the new deal expands what Smith and Company is to provide for the additional $6,000, a move that came after the Enterprise began questioning the contract.

The county moved ahead even though the Oregon Transportation Commission won’t decide until June 20 whether Malheur County’s rail project should go forward. The new contract said the county “may” end the extra payment if the reload center isn’t funded.

Crucial to winning that approval is getting Union Pacific Railroad locked into a service deal. Railroad officials for months have said they support the Nyssa project, but shied from declaring they would in fact send train engines and refrigerator cars to town.

Last Jan. 8, a Union Pacific official wrote Smith that the railroad needed customer information to move the “sales conversation forward.” The official, Melissa Meier, listed details about commodities and volumes, destinations for goods shipped out of Nyssa, and who would be the shippers.

Three weeks later, Meier pressed again for the information.

“I highly recommend that this information is gathered before I set up another call with sales,” Meier wrote. She wrote Smith that the information would “really give that project credibility.”

Two months after the railroad asked for the information, Malheur County’s economic development agency sought help to get it.

“Union Pacific Railroad has asked us to gather information on persons wishing to use the Treasure Valley Reload Center,” the agency said in a March 12 Facebook post with a letter asking businesses to provide details on what they would ship.

Three days later, on March 15, Smith suggested the urgency of the work, writing to county commissioners that he was “redirecting” Braese to “concentrate on gathering and compiling data for Union Pacific’s market analysis” and “tracking down possible customers.”

Braese did otherwise that day.

“Today was just too nice to stay in the office,” a Facebook post said. “The answer to the dilemma was a quick trip to Farewell Bend.”

He logged a 51-mile round trip from Ontario to where a truck stop was well under construction. It was one of six visits Braese has made to the truck stop this year.

John Braese, project manager for Malheur County Economic Development, speaks at a community meeting on Thursday, May 16. Though he works in the county agency, he is employed by Gregory Smith and Company. (Pat Caldwell/The Enterprise)

Braese also spent work time at social events.

Smith advised the county court in an email last November that “John was involved in the voting for the queen of the upcoming Winter Wonderland Parade in Ontario.”

In the following months, Braese’s time sheets show he went to Vale for the ribbon cutting at a new city water treatment plant, a business open house in Nyssa, and community banquets in Ontario and Nyssa.

 “If John choses to attend a function with his son, snaps a few pictures and post these pictures, this in no way takes away from his duties with economic development,” Smith said in an email to the county court.

Work far from Malheur County

Meantime, Smith and Company also is under contract with the Linn Economic Development Group in Albany to help that group with its own state-funded rail project. The officials listed Smith as their project manager.

Joyce said Malheur County has nothing to do with the Linn County project. He said he wouldn’t know why the county’s economic development department would be working on it.

But telephone records for the Malheur County economic development operation show repeated contacts with those involved in the Millersburg project, including a Linn County commissioner, the city of Millersburg, and an engineering firm.

Emails obtained under a public records request revealed that Braese wrote to a Coos Bay port official last December, using the Malheur County agency’s email account.

 “We are working on two rail reload projects,” he said.

He described the Nyssa project. And then turned to the Willamette Valley project.

“The second project, Millersburg, is the site of a defunct paper mill. There are currently two proposals for Western Oregon for rail, our plans for Millersburg being one of the two,” he wrote.

 “We are also working towards securing federal funding to additional construction and items for this site,” he said, helpfully providing the Coos Bay official a “project overview narrative” for the Millersburg project.

In January, Braese sent an email Jan. 11 to the private email account of Smith’s legislative director, Nicole Crane.

“Please print out the attached documents and hand to Greg before he heads to ODOT meeting this afternoon,” Braese wrote, providing documents that included “Talking points Millersburg Tioga report” and “Tioga ODOT Millersburg Summary Report.”

The following month, Braese ordered invitations for an event in Salem. He wrote that Smith wanted invitations on behalf of the Nyssa project – and separate invitations for the Millersburg project.

Smith too transacted Millersburg business using Malheur County’s economic development email.

In January, a Union Pacific official reached Smith on that email account to ask, “Would you and your team be available for a conference call…to start the sales discussion for the Millersburg transload site?”

And on Feb. 14, Malheur County delivered a letter to the Oregon Transportation Commission promoting the Nyssa project. On the same day, Linn Economic Development Group delivered a letter promoting the Millersburg project.

The wording in the opening paragraphs was identical in each except for the project names used.

In one instance, though, the name change was missed, and language promoting the Nyssa project wound up in the letter explaining the Millersburg project:

“The Malheur County Development Corporation appreciates the questions and concerns raised by all who have looked at the proposal. Many are tough questions with tough answers required.”

Contacts: Les Zaitz: les@salemreporter.com; Pat Caldwell: pat@malheurenterprise.com; Kristine de Leon: news@malheurenterprise.com. Phone: 541-473-3377.

HOW WE DID THIS STORY

This report is the result of work over several months by a team of reporters from the Malheur Enterprise.

Greg Smith, the county economic development director, didn’t respond to interview requests and told the Enterprise not to question other economic development workers he works with. The Enterprise nonetheless provided written questions to Smith’s project manager in Ontario. He didn’t respond. Smith was provided a six-page list of detailed questions covering each element of this report. He did not answer.

We gave the county the opportunity to review the questions, sharing the six-page list with County Judge Dan Joyce. We had no response from Joyce, who is employed full time to lead the Malheur County Court.

The Enterprise relied on Oregon’s public records law to obtain documents from the Malheur County Economic Development Department. This included memos, emails, telephone toll records, and grant application material. Smith on two occasions released documents after initially insisting they were not open to the public and after the Enterprise sought the intervention of Malheur County District Attorney Dave Goldthorpe. Smith initially withheld time records for the Malheur County office, saying they weren’t public records. County Counsel Stephanie Williams subsequently released them.

The Enterprise also obtained public records from several other government agencies, including the office of Malheur County Administrator Lorinda DuBois, who provided credit card receipts and invoices under public records requests, and the office of the Malheur County Court, which provided access to contracts.

The state Department of Transportation provided invoices and billing statements for the projects in Nyssa and in Millersburg in response to our public records requests.

SUBSCRIBE AND HELP -- Salem Reporter relies almost exclusively on reader subscriptions to fund its operations. For $10 a month, you get breaking news alerts, emailed newsletters and around-the-clock access to our stories. We depend on subscribers to pay for in-depth, accurate news. Help us grow and get better with your subscription. Sign up HERE.