Willamette Week | By Nigel Jaquiss | January 22, 2021
The U.S. Bankruptcy Trustee for Oregon today made a final filing in the bankruptcy of Cylvia Hayes, the former first lady of Oregon, bringing the legal part of a long-running saga to a close.
Hayes rose to prominence in 2010, when her then-partner and later fiancé, former Gov. John Kitzhaber, ran for governor for a third time, having previously served in that position from 1995 to 2003.
During the 2010 campaign, Hayes’ work as a renewable energy consultant made news after the Oregon Department of Justice launched a criminal investigation into the circumstances surrounding her firm’s obtaining a contract with the Oregon Department of Energy despite her scant qualifications. Although nobody was ever charged in the case, it dragged on for nearly a year and did lasting damage to both Hayes and then-Attorney General John Kroger.
As Kitzhaber sought an unprecedented fourth term in 2014, WW reported on Hayes’ private consulting business, which she pursued while serving as an adviser to Kitzhaber in areas that overlapped with her consulting work.
Less than two months after being sworn in for his fourth term, Kitzhaber resigned amid a federal investigation into influence-peddling allegations. That investigation also did not lead to charges, but the Oregon Government Ethics Commission found in 2018 he’d engaged in conflicts of interests and used his public office for personal gain.
After leaving office, Hayes battled The Oregonian in court over access to her personal email concerning public business, eventually losing and incurring a judgment and responsibility for the paper’s legal fees, which contributed to her filing for bankruptcy in July 2018.
During the course of the bankruptcy (a Chapter 13 proceeding, meaning that Hayes expects to have enough income to partially satisfy her creditors), Hayes negotiated settlements with the Government Ethics Commission and The Oregonian. The agency agreed to accept $12,000 of the $50,000 it originally fined her (she has paid $3,835 so far), and the paper agreed to accept $25,000 rather than the $125,000 Hayes owed the paper (she has until 2028 to make payment).
Hayes’ attorney, Michael Fuller, said in an email that his client is pleased to put the bankruptcy behind her.
“In 2018, we drafted a reorganization plan to allow our client to retain her home and resolve all issues with The Oregonian and Oregon Government Ethics Commission,” Fuller said. “We’re happy to report that our client’s hard work has paid off and our plan
was successful.”
