Smith, CDA members divided on interpretations of actions leading up to calamitous September 2024 board meeting

Board members of the Columbia Development Authority were prepared to reprimand or even fire Executive Director Greg Smith in September 2024 over an inaccurate federal grant application.

According to messages Smith obtained via a public records request, and which the East Oregonian verified, Umatilla County Commissioner John Shafer and Confederated Tribes of the Umatilla Indian Reservation Executive Director J.D. Tovey discussed hoping Smith would resign over a salary approval issue. The records also include messages with Kelly Doherty, the Port of Morrow commissioner who was on the CDA board at the time. She said she was not involved in the discussion between Shafer and Tovey.

The broader problem dates back to the Columbia Development Authority board approving a grant application in June. The grant, which is part of the CDA’s funding from the Office of Local Defense Community Cooperation, included a section saying the board had approved salary increases for employees, which the board had not done. Still, the board approved the grant application, increasing the salary of Smith and Debbie Pedro, a former employee.

Members of the board later said they didn’t realize there was language approving a salary increase. During the CDA’s Sept. 20 meeting, board members harshly criticized Smith over the discrepancy, claiming Smith did not give them proper time to review the application.

Meeting messages

Text messages and emails to and from Shafer around the September meeting show his, Tovey’s and Doherty’s conversations about Smith, the meeting and the grant application. A few messages, in particular, point to a coordinated effort to either reprimand or terminate Smith and other staff as well as remove Kim Puzey, general manager of the Port of Umatilla, as CDA board chair.

Shafer said Feb. 27 that due to litigation he could not answer questions about the relevant documents and messages.  …..

The afternoon of Sept. 16, 2024, Shafer and Doherty discussed a board meeting Smith had canceled for the following day — one that took place Sept. 20 instead. The same day, Shafer told Les Zaitz, publisher and editor of the Malheur Enterprise, that he, Tovey and Doherty were trying to keep the meeting Sept. 17.

The following exchanges from Sept. 16 have been edited for length, grammar and clarity while maintaining the main points or purposes of the exchanges. Times are included when known.

Shafer: Greg just tried to call me.

Doherty: Answer it. Tell him he has three board members requesting a special meeting.

(Doherty sent a link about Eastern Oregon University’s Small Business Development Center, which Smith and his company had been leading. Smith was informed in August EOU would be ending his contract in October.)

Doherty: Called you looking for a life raft. He got removed as director apparently.

Shafer:  On the phone with him now.

Doherty: Don’t weaken.

Shafer: Not a chance.

Shafer: Greg is going to put a meeting together for Wednesday or Thursday. I will chair it since Kim is out of town. He wants all 5 entities represented if there is going to be any kind of performance review. I agreed and said Kim’s alternate can represent the Port of Umatilla and he agreed.

On Sept. 19, the day before the meeting about the application, Tovey and Shafer emailed one another.

Tovey, 7:47 a.m.: Looking at the agenda, there is the closed session on the staff evals. I think we should discuss the process for evaluation and ask if we even should do the evaluation based on the recent articles and information that has come out about the performance of the CDA staff. I think we should discuss all the options including reprimand, suspension pending an investigation, or termination.

(Tovey wrote five potential motions the board could vote on, including reprimanding, suspending or terminating Smith and CDA staff members and removing and replacing Puzey from his position of authority on the board. The other motions were housekeeping actions the board could take after those initial decisions were made.)

Shafer, 8:40 a.m.: I think this is a great approach. It would even give him a chance to “defend” his actions. Thank you for putting this together.

Tovey, 11:35 a.m.: I was also thinking (of) lining up each of the specific allegations/statements in that article and ask(ing) him directly in open session if it is true. And then ask him what he thinks we should do. Hopefully he sees the writing on the wall and perhaps he resigns. If not then we’ll have no choice but to act. This way it gets him (officially on the) record. Thoughts?

Shafer, 11:38 a.m.: That would be cleaner if he resigned. That would still leave the question of what about Debbie? I think she needs to go as well.

Tovey, 7:19 p.m.: Agreed. If he did resign, I think we just go down the line and ask for everyone’s resignation.

In addition to discussing consequences of the inaccurate grant application and salary increases for Smith and Pedro, Tovey and Shafer were considering a motion for Puzey to step down as board chair. But no one made that motion.

Shafer reaffirmed his stance of not answering questions about the emails due to litigation.

Umatilla County in July 2024 filed a lawsuit against the Columbia Development Authority seeking at least $1 million for breach of contract. The lawsuit stems from March of that year when the CDA Board’s representatives for Morrow County and the ports of Umatilla and Morrow voted to transfer thousands of acres in industrial and exclusive farm use zones to the control of the ports. The case is ongoing.

Tovey said the email exchange was to “line out some options for us during the meeting.” But as the meeting progressed, he said, the possible motions he’d prepared seemed less likely to pass, especially with Puzey, the board chair, absent from the meeting.

“ I didn’t want to have that conversation without all five of us there,” Tovey said.

Tovey said he thought removing Puzey from the role of chair “was an option we needed to consider.” Since he joined the board in late 2023, Tovey has repeatedly taken issue with the board’s lack of a budget, clear operating agreements and even position descriptions for hired employees.

“ If it’s under (Puzey’s) leadership,” Tovey said, “I think he also bears some responsibility, just like the rest of us do as members of the CDA.”

During the Sept. 20 meeting, Tovey asked Smith repeatedly who was to blame for the inaccurate grant. Smith said he “owned” the mistake. At the time, Tovey did not seem pleased with Smith’s answer, but on Feb. 27 he said the responsibility for mistakes ultimately lies with the board, not its executive director.

Questions of a serial meeting

Smith said he believes the three board members coordinated a plan in advance of the meeting. If that happened, it likely would be considered a prohibited serial communication.

“I think the text messages speak for themselves,” he said, reaffirming his stance Feb. 28 after hearing that Tovey and Doherty deny making a plan to oust him.

Oregon law says serial communications occur when a quorum — three, in this case — of the members of a governing body communicate privately to deliberate or decide on a matter under the jurisdiction of the body they are part of.

The rule clarifies the prohibition applies to in-person conversations, telephone or video calls, written communications (such as emails and text messages), the use of intermediaries, as well as any other means of conveying information.

Susan Myers, executive director of the Oregon Government Ethics Commission, said the commission did vote to investigate Smith within his role as a state legislator. He failed to report a client making up at least 10% of his business’s income, Harney County, that also has business dealings with the state, in an economic interest statement.

She said the CDA does not fall under the ethics commission’s jurisdiction, and the investigation had nothing to do with Smith’s role as executive director of the CDA. The commission’s economic interest investigation concluded March 9.

Tovey said he only communicated with Shafer about the potential motions, specifically keeping in mind that to discuss the possible options with more than just him could create a serial meeting.

“ I just wanted to bounce it off one other person, as an option for the CDA board, in considering some potential outcomes of what transpired from the adoption of the grant in June,” Tovey said. “I did not even talk to Kelly (Doherty) about any of these potential motions until after that CDA meeting on Sept. 20.”

Smith denounces ‘distasteful politics’

Smith on Jan. 21 sent a letter to the East Oregonian to share with readers. In it, Smith claims he recently “became aware of what we all would consider distasteful politics driven by treacherous intentions and self-interest.” He describes the grant application and voting process and ties the issues Shafer took with it to Umatilla County’s lawsuit against the CDA over a March decision to reallocate ownership of real estate.

That action, Smith said, “was a legal maneuver to stop me from successfully executing the board’s direction.”

According to Shafer, the county’s action was only about stopping the CDA board’s decision.

“We filed the lawsuit because, simply put, we were removed from having any of the property that was out at the depot,” Shafer said. “We wanted to make sure we had what was coming to us and it was a fair and accurate split.”

Regarding the Sept. 20 meeting, Smith said in his letter that Shafer, Tovey and Doherty were “scheming to pressure me to resign while publicly defaming me.”

Records do not show Doherty was involved in efforts to remove Smith from his position prior to the meeting. She said she would have had to get approval from her board to make a motion, which she did not have. Tovey said he spoke only with Shafer about the potential motions and did not end up bringing them forward because of how the meeting went.

Malheur Enterprise publisher/editor Zaitz, Smith claimed, was “given a personal invitation to attend my ‘abuse’” by Shafer on Sept. 16.

Shafer, 11:03 a.m.: I just sent you the updated invitation to tomorrow’s meeting. Note the change in location and time. We will move into an executive session to discuss the allegations in your article.

Zaitz: Got it. Still at tribes center, right? I will be there, ready for Greg’s abuse.

Shafer: Yes. It will be a good time for sure.

Shafer did not comment, again due to litigation. He did not reach out on Sept. 16 with an invitation to the meeting for the East Oregonian, as he did with Zaitz.

Zaitz didn’t clarify whether he meant he expected to receive abuse from Smith or watch abuse inflicted upon Smith, but instead gave this comment:

“The Enterprise stands by its ground-breaking reporting that led federal officials to investigate and conclude there was significant mismanagement of the CDA grant. Greg Smith once offered to buy the Enterprise to quiet our voice. We wish the East Oregonian had been diligent in its duty going back years.”

Latest developments

Although Tovey now acknowledges Smith’s words as taking responsibility for the mistake, he reaffirmed his belief the inaccurate grant seems to fall under some kind of “ either willful ignorance (or) weaponized incompetence” on Smith’s part.

“Even then I knew the seriousness of this,” Tovey said. “ I do think that ultimately, whereas all that should be under the responsibility of the executive director to do those things, it’s also under the responsibility of the CDA board as a whole to ensure that those are (accurately) carried out.”

The CDA hired Barran Liebman, an employment law firm, in December and continues to enter into executive sessions during its meetings to discuss current or expected litigation.

The Office of Local Defense Community Cooperation on Jan. 21 requested the Port of Morrow, the CDA’s fiscal agent, to voluntarily terminate the grant that caused issues during the Sept. 20 meeting. The port has asked for an extension to explore alternatives.

Meanwhile the state’s ethics commission on March 9 sanctioned Smith for not disclosing part of his income — tens of thousands of dollars from work in Harney County — on a Statement of Economic Interest form as part of his role as a state representative. Myers, the commission’s executive director, said the stipulated final order for Smith was a letter of education, which is the lowest penalty available for violations and the same penalty other officials have received in similar situations.

Myers explained the commission determines penalties according to a matrix of two tables — one with points for mitigating and aggravating factors, such as the number of violations and how cooperative a person is, and the other with penalty levels based on those points. The commission then issues its sanction in accordance with the associated penalty.

Myers said the penalties vary from the letter of education to fines up to $5,000. Smith has had no other sanctions and has asked the commission for advice unrelated to economic interest filings. Smith cooperated with the commission, Myers said, and his situation qualified for the lowest penalty category.

“Our agency is more educational than anything else,” Myers said. “We want to help people do it right and prevent future mistakes.”

Letters of education for economic interest filing errors, she said, are “absolutely” effective, in her experience. Myers said she could not think of anyone who has been a repeat offender for this kind of violation during her seven years with the commission.