By Rob Nikolewski │ Watchdog.org
A governor is out and his fiancée may be under state and federal investigation amid allegations of green energy influence peddling, but a key piece of environmental legislation they both supported is still on track in the Oregon statehouse.
A low-carbon fuel standard bill passed the Oregon Senate on Tuesday and now heads to the state House, where its fate is hardly a slam dunk. Gov. John Kitzhaber resigned last week in the wake of charges his fiancée, Cylvia Hayes, may have used access for personal gain when she received at least $118,000 from green energy groups while living and working in the governor’s mansion.
“When you have the feds investigating and $100,000-plus of income to the governor’s girlfriend … well, that’s kind of important,” said John Charles, president and CEO of the Cascade Policy Institute, a free-market think tank based in Portland that has criticized the Kitzhaber administration. “The Cylvia Hayes scandal is not going to go away, it’s going to heat up. This one bill, more than any other, is at the heart of the scandal.”
But environmental groups cheered the passage of Senate Bill 324 as proof green policies in the state controlled by Democrats will withstand the bad publicity that is sure to come as the Kitzhaber-Hayes investigations are launched.
“I think it’s a measure of the priorities of our Legislature,” said Jessica Moskovitz, communications director for the Oregon Environmental Council. “Legislators identified this as a priority on their own before the session began. I think they want to get the work done, whatever the change in the (political) weather.”
SB324 passed on a 17-13 vote, with all but one Democrat voting yes and all Republicans in the chamber voting no.
“Global warming is a serious threat to our planet,” Senate Majority Leader Diane Rosenbaum, D-Portland, said from the Senate floor, adding, “This is a structured and well-vetted policy that addresses one of the greatest problems of our time.”
Republicans argued pending federal and state investigations involving Kitzhaber and Hayes — which include questions about lobbying for the fuels standard — should keep the bill from going forward.
“There are investigations going on into the clean fuels program, who influenced it. I do think that legislation has to be put on hold,” Rep. Mike McLane, R-Powell Butte told reporters Friday. “For goodness’ sakes, if it led to the resignation of our governor, why are the Democrats moving so quickly to pass it?”
Just days before the Senate floor vote, an organization headed by a former Republican state representative sent a mailer in opposition to the low-carbon fuel standard legislation, tying Hayes and Kitzhaber to the bill by using likenesses of the two, clinking wine glasses.
The group, called Session Watch, calls the low-carbon standard a hidden tax and “the pet project” of Hayes.
At least two media outlets have reported Hayes neglected to claim to the IRS some $118,000 she received from one clean-energy consulting outfit. Hayes also received $40,000 from the Energy Foundation, an environmental organization connected to billionaire Tom Steyer, who has invested millions in environmental and political causes.
According to the Willamette Week, Hayes collected more than $220,000 between 2011 and 2013 from private consulting contracts she landed while working as an adviser to Kitzhaber.
The controversy has drawn national attention.
“All of this has shocked the local political class, which likes to think of itself as pure as its best liberal intentions,” the Wall Street Journal says in its lead editorial Feb. 13. “But the Hayes-Kitzhaber operation exposes the underside of the big-money, insider politics that has come to dominate the environmental movement.”
Supported by Kitzhaber, Oregon’s low-carbon fuel standard would require large oil and gas companies such as Chevron, BP and ExxonMobil to progressively lower the amount of carbon in their products or pay a penalty. Distributors whose products don’t meet the requirements would have to buy credits from companies that do.
Supporters say the standard would encourage companies to produce a cleaner product, but critics say it would lead to a spike of up to $1.06 a gallon at the gas pumps and would not cause a measurable change in global greenhouse gas emissions.
The Oregon Department of Environmental Quality produced its own estimate and reported the low-carbon standard would increase gas prices between 4 cents to 19 cents a gallon by 2025.
The bill heads to the House, where Democrats hold a 35-25 advantage.
Bills that constitute a tax increase require approval of three-fifths of Oregon lawmakers, but since the low-carbon fuel standard has been billed as a state regulation rather than a tax increase, a simple majority is all that’s needed to pass it on to the governor’s desk.
Kate Brown, who was sworn in Wednesday, is the new governor. Brown is a Democrat who studied environmental conservation during her college years and is considered an ally to conservation groups.
If all Republicans in the House voted against the low-carbon bill, it would take at least five Democrats to join them to stop the measure — a healthy but not insurmountable number.
“I don’t think it’s a done deal,” Charles said in a telephone interview. “I think there are some rural Democrats on the House side who may have a tougher time pulling a fast one on their constituents compared to their Senate colleagues. And the Cylvia Hayes scandal that’s directly tied to this bill will be fermenting month by month.”
Moskovitz told Watchdog.org she thinks the chances of the bill passing the House are “strong.”
“I think there are some folks out there who are trying to connect some dots that really don’t connect,” Moskovitz said. “The way I see it is there are some folks who started a rumor and that rumor is being investigated and they’re saying, ‘Hey look, the investigation proves the rumor.’ ”
Drivers in Oregon are also facing another potential price increase. The Legislature is considering a wide-ranging transportation package designed to improve roads and bridges but would include an increase in the state’s gas tax.
Environmental groups favor the transportation legislation’s passage as a way to create a new funding source for improved transit services and biking and walking trails.
Republican leaders have threatened to tie up the transportation package if the low-carbon standard passes the House.