“People just didn’t want to hear it, didn’t want to see it, didn’t believe it,” Lindsay said.
On social media and around town, Lindsay said she felt she was being shamed and shut down by people she had considered friends. She and another commissioner critical of officials’ dealings with Amazon lost a recall election and were kicked out of office.
A measure of redemption came last month, when the Oregon Department of Justice filed a civil complaint alleging that several officials in the eastern Oregon county “abused their authority and breached the public trust for their personal financial gain.”
The state alleges that public officials pocketed several million dollars by arranging to buy a local telecommunications business from a Morrow County nonprofit. The officials, who had voted to grant Amazon hundreds of millions of dollars in tax breaks, allegedly paid far less for the telecom business than it was really worth by hiding the value of its contracts with the tech giant.
When Oregon’s attorney general weighed in last month, Lindsay said the litigation served as a kind of wakeup call in the small community.
“I’ve gotten apologies left and right,” she said. “It’s been pretty crazy.”
Attorneys for the defendants didn’t respond to requests for comment and haven’t filed a legal response to the state’s civil charges. But Lindsay says the state’s case raises broader issues about how Oregon awards tax incentives and how it ensures officials are acting in the public’s interest.
“Negotiating away our tax dollars to make money in such a blatant way, it’s a different level of accountability to me,” Lindsay said.
Lawsuit alleges ‘unjust enrichment’
Amazon has spent several billion dollars building and equipping data centers in Morrow County, a community of 13,000 residents about 160 miles east of Portland along the Columbia River.
The company negotiated with the county, the Port of Morrow and the city of Boardman for tax incentives, land and water. Amazon’s property tax breaks were worth nearly $70 million last year alone and will cumulatively tally well over $1 billion in the years ahead.
The attorney general’s case focuses on former port and county officials, who paid $2.6 million in 2018 for a local fiber-optic provider called Windwave Communications. The Oregonian/OregonLive scrutinized the transaction in a 2022 article, triggering the state investigation that led to last month’s civil charges.
Windwave’s previous owner had been a nonprofit called Inland Development Corp., established to provide internet service to small businesses, hospitals, schools, libraries and other public agencies in the rural community.
The Oregon Department of Justice says the officials “deliberately withheld financial information” about Windwave’s dealings with Amazon and how valuable those contracts were to the fiber-optic business.
Windwave’s owners are former port commissioners Jerry Healy and Marv Padberg, former county commissioner Don Russell, former port director Gary Neal and Blake Lawrence, CEO of the fiber business. All five are named as defendants in the Department of Justice’s complaint.
Windwave was worth at least $6.9 million more than the buyers paid, according to the July complaint, money that should have been used for Inland’s nonprofit mission instead of the “unjust enrichment” of local officials. The Department of Justice wants the defendants to pay the difference, and says it may seek punitive damages, too.
All four of the public officials have since left office. One retired, two didn’t seek re-election and one lost his re-election bid. Three agreed to pay $2,000 apiece to settle an ethics complaint that alleged they had sometimes failed to disclose conflicts between their ownership in Windwave and their dealings with Amazon.
The defendants in the state’s case also include three members of Inland’s board, whom the state accuses of failing to exercise proper oversight in signing off on the deal though they didn’t profit from it personally.
State Rep. Greg Smith was among those board members and was allegedly inattentive at board meetings leading up to Windwave’s sale. Smith, a Republican from Heppner, has not responded to inquiries about his role in the case. But in a Facebook post last month, he defended his actions — and the sale.
“It did not occur to me to ponder if anyone was being deceitful or untruthful,” Smith wrote. “I still do not believe anyone was.”
The state has not charged Amazon itself. The company says it acted appropriately in its dealings in Morrow County, though Amazon has refused to say if it was aware that it was negotiating its tax breaks with public officials who also owned Amazon’s local fiber-optic provider.
Time to heal?
Morrow County has been riven by a long string of controversies over the past several years, most prominently nitrate pollution from farm fertilizer, animal manure and wastewater that has contaminated local drinking water.
The county has also weathered bitter disagreements over managing emergency services, among other issues, which have pitted residents against one another as the data center scandal was percolating.
Heppner Mayor Corey Sweeney had no role in the Windwave saga and said he believes county residents are ready to put it behind them.
“From what I see, people want to heal. They want to move on to work with each other and forget about the past and move forward,” he said.
Port of Morrow Chairman John Murray didn’t take office until 2019, the year after Windwave’s sale. He declined to comment on the allegations and said he considers it a part of the past.
“The Port of Morrow is on the right path right now,” he said. “The commissioners that are on the commission now are very well aware of their responsibility for ethical behavior.”
Others, though, say they are pleased to see the Windwave issue getting fresh scrutiny. That includes Rep. Bobby Levy, R-Echo.
“Melissa Lindsay, dear, we all knew it would come out and the truth would be known. I’m sorry it took this long!” Levy wrote on Lindsay’s Facebook page after the former commissioner posted news of the state’s charges in the Windwave case.
In a subsequent email to The Oregonian/OregonLive, Levy said her post was not intended to reflect on her House colleague, Rep. Smith. She said the next steps in the case are up to Attorney General Dan Rayfield and declined to comment further.
“I think it’s a long time coming,” said Jim Doherty, another former county commissioner who also lost his job in the recall election after speaking out about the Windwave deal.
The state’s case against former Morrow County officials has awakened the community, Doherty said, and residents are starting to feel freer to express concerns about other issues.
“Folks are starting to empower themselves and realize there are some avenues to fight back and to peel back what’s gone on,” he said.
It’s important, Doherty said, that state officials exercise oversight of economic development efforts “to ensure what they’re doing is in the best interests of the public and not for the benefit of their own pocketbook.”
Oregon law gives the state’s economic development agency, known as Business Oregon, little role in overseeing local tax breaks. It doesn’t put a ceiling on how much local governments can give away or require that the size of the incentives be tied to job growth.
In the Windwave case, the Oregon Department of Justice stepped in to investigate. In the civil case, the state’s attorneys suggest one possible remedy for the alleged abuses would be to unwind the Windwave deal from 2018 and return the business to Inland, the nonprofit.
That’s what Doherty wants.
“The DOJ has to go back and void the sale and get back all the ill-gotten gains,” he said. “I think that’s the only justice there.”
The last three years have been personally difficult, Doherty said, but he views the state’s case against Windwave’s buyers as evidence that speaking up will pay dividends — eventually.
“Staying in the right path and doing the right thing is what you ultimately have to do,” he said. “And you will be rewarded. It may be down the road.”
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