Killing Trust: Kitzhaber the unobservant

John Kitzhaber’s latest tour of duty in the governor’s chair has exposed him as an empty suit in terms of faithfully overseeing the government he runs.


First, he hired education czar Rudy Crew. Remember him?

Rudy Crew (R) with Governor Kitzhaber

Rudy Crew (R) with Governor Kitzhaber

Crew checked in to his $280,000 a year job as Oregon’s first chief education officer in June 2012. Hailed by Kitzhaber as a man with a track record of leadership and innovation, his collapse as a leader was quick and dramatic.

Crew spent a year travelling extensively, often first class, on the state’s dime to speak at non-Oregon related events, took vacations at every turn, and made the scrambled eggs-and-bacon circuit around the state, telling the same heartwarming stories over and over again, while he continued to make money on the side. On July 1, 2013, Crew checked out and headed back East, a failed experiment in every way.

“How big of a setback was the Rudy Crew fiasco?” Portland Business Journal Publisher Craig Wessel asked Kitzhaber in January 2014. “It had to be difficult.”
“It was,” Kitzhaber responded. “It was an embarrassment.”

It was more than that. It was a complete failure to exercise good judgment and to oversee the performance of a key figure in Kitzhaber’s administration.

Then there’s Cover Oregon, another debacle.


Millions were spent there on a disastrous website, ubiquitous advertising and highly paid top staff (The total compensation of the each of the top ten highest paid of Cover Oregon’s employees in early 2014 was between $154,000 and $229,000, more than their boss, Kitzhaber.) In April 2014, Cover Oregon’s board of directors voted to close the state-run exchange and adopt the Federal exchange in 2015.

Cover Oregon’s troubles were compounded when the state tried shenanigans to avoid making public a scathing report on the program by consultant, Clyde Hamstreet. The report was made available to the media only after it was requested under Oregon Public Records Law.

“In retrospect, I should have been more engaged in the (Cover Oregon) project,” Kitzhaber said in November 2013. I’ll say.

Then there’s the matter of First Lady Cylvia Hayes.

Cylvia Hayes at an Oct. 9. 2014 press conference where she admitted entering into an illegal marriage in 1997.

Cylvia Hayes at an Oct. 9. 2014 press conference where she admitted entering into an illegal marriage in 1997.

On Oct. 8, Willamette Week raised serious questions about her business dealings and possible conflicts of interest while associated with Kitzhaber. Subsequent stories have disclosed that, unknown to Kitzhaber, Hayes accepted $5,000 as payment for illegally marrying an Ethiopian immigrant in 1997, allowing the man to remain in the U.S.

On Oct. 12, Kitzhaber asked the Oregon Government Ethics Commission to determine whether Hayes is subject to state ethics laws and, if so, whether she has broken them.

A better question is why is he only paying attention now? Where has he been since his third term began on ensuring that all of Hayes’ business relationships comported fully with state ethics rules?

Pay attention, John.

Cover Oregon: big management paydays/ small results



When Clyde Hamstreet took over as Interim Executive Director of Cover Oregon earlier this month, he said one of his priorities would be clamping down on spending. He might want to start by looking at the compensation of his senior staff.

That’s because the fiasco that is Cover Oregon has still found a way to pay some pretty hefty salaries and generous benefits.

While the focus of most Cover Oregon media coverage has been on the utter failure of its enrollment website and the millions paid to contractors, little has been said about the employees behind the scenes.

Cover Oregon’s 2013-2015 budget for personnel is $18 million. That covers 175 employees.

The top ten highest paid of those employees are all getting more than their boss, Governor John Kitzhaber, whose annual salary is $98,600. With benefits, Kitzhaber’s total annual compensation is $125,163.

In contrast, the total compensation of each of the ten highest paid Cover Oregon staff exceeds $150,000.

Before Interim Executive Director Bruce Goldberg resigned in March, his annual compensation totaled $229,761.

The salaries, benefits and total compensation of the rest of the top 10, which includes state payment of 95 percent of their health insurance premiums, are as follows:


Chief Communications Officer $132,516 $35,700 $168,216
Sr. Mktg Mngr $132,516  $35,700






Chief Policy Officer $132,516










Position title Current salary Benefits* Total Compensation
Operations Mngr. $122,000 $32,867 $154,867
Operations Liaison $125,002 $33,676 $158,678
Functional Lead $150,000 $40,410 $190,410
Chief Operating Officer $162,516 $43,782 $206,298
Chief Information Officer $162,516 $43,782 $206,298
Executive Director $181,000 $48,761 $229,761

*Derived from a benefits factor equal to 26.94 percent of salary, based on 2013 overall year-end totals. Source: Cover Oregon

But even with all this high-paid firepower, Cover Oregon couldn’t get the job done.

Maybe part of the reason is because Cover Oregon employees have so much time off. According to Cover Oregon’s recruitment information, benefits for all employees include 30 days of paid time off and 11 paid holidays annually. That adds up to 41 days, or more than 8 weeks, off each year. Not a bad deal … for them.



What didn’t he know and why didn’t he know it?

This is really getting embarrassing.

Washington State has directly enrolled 454,009 people in health insurance through its Healthplanfinder website since launch day, Oct. 1, 2013. The number of health insurance enrollments directly through Oregon’s Cover Oregon website since Oct. 1, 2013? Zero. Zilch.

The launch of Oregon’s much ballyhooed Cover Oregon website has been like a rolling catastrophe, a hot mess even more embarrassing after Oregonians were bombarded for months by a multimillion dollar campaign featuring quirky, down-home advertisements.

As the Cover Oregon debacle has plodded on, Governor John Kitzhaber has tried to shift public attention away from the hapless website, saying in Nov. 2013, “Cover Oregon works, the website doesn’t work.” That’s pretty much what President Obama said after Obamacare’s website failed spectacularly on its Oct. 1, 2013 rollout. “The Affordable Care Act is not just a website,” he said. “It’s much more.”

A former emergency room doctor with a national reputation for healthcare innovation, pulling in speaking fees for healthcare presentations around the country during his first two and current terms, and a declared candidate for an unprecedented fourth term, Kitzhaber has a lot riding on Cover Oregon.

So why did he let this fiasco happen on his watch?

For somebody touted as a skillful politician and manager, and a governor likely concerned about his legacy, his failure to keep a close watch on the Cover Oregon website from the outset is an egregious error for which there is really no excuse.

Myriad explanations have been proffered for why the website didn’t work on Oct. 1 and is still comatose, including the complexity of the project, internal feuding, bureaucratic bungling, shifting federal guidance, poor management, lack of state expertise and big mistakes by the primary software firm, Oracle Corp.

Whatever the reason, Kitzhaber should have been bird-dogging the project from day one.

And the well-compensated people working at Cover Oregon, all rewarded with six weeks of paid time off plus 11 holidays each year and 95 percent state coverage of health insurance, should have felt obligated to give Kitzhaber a heads up when things were going off the rails. Or he should have noticed.

After all, Cover Oregon’s problems as the work was underway were legion and well-documented.   failed to meet the terms of the initial federal grant for the project, which stipulated that the website was supposed to be ready to go by Feb. 15, 2013.

Then, in May an internal Cover Oregon report revealed that the exchange was infested with technical bugs.

In mid-August, another warning came when Cover Oregon said Oregonians would be able to look online for insurance plans beginning Oct. 1, but wouldn’t be able to enroll in coverage or tax credits for the first few weeks without an agent or community partner.

Moreover, Rocky King, former executive director of Cover Oregon, has said it became obvious during the summer that the website wouldn’t be fully ready by Oct. 1.

But on Dec. 14, 2013, Kitzhaber said he’d been just as unaware of Cover Oregon’s technical problems as other Oregonians and didn’t learn until Sept. 30 that the Oct. 1 website launch would be cancelled.

Kitzhaber, U.S. Sen. Jeff Merkley and U.S. Rep. Kurt Schrader have done the expected, blaming Oracle, —, and insisting that the company make good on its commitment to producing a working website. Late last year Kitzhaber admitted at a press conference, “I think I should have been more engaged on this project,” but now he’s clamming up, refusing interview requests from The Oregonian in connection with an article on the chaos associated with the website.

Meanwhile, Cover Oregon’s website still proclaims, “We’re one of the first states to build our own health insurance marketplace. We’re setting the standard for making health coverage more accessible and easier to understand.”

Not so much.