An internal audit released by the Department of Corrections identifies further problems in the agency that manages Oregon’s prison industries, whose rocky relationship has been the result of several investigations and one lawsuit this year.
DOC Director Colette Peters ordered the audit after firing Oregon Corrections Enterprises Administrator Rob Killgore in March. The “change of administrator review” was designed to verify that Killgore’s dismissal had been handled properly and that the agency’s contracts were compliant with state rules.
The audit was released Wednesday.
It found no problems with Killgore’s exit from the agency, but identified three conflicts of interest in the contracts. Investigators said some of the contracts Killgore approved contained conflicts of interest because they benefited members of the OCE advisory council.
The council has no decision-making power and serves to advise the OCE administrator on policies concerning the operation of the agency. It consists of at least three members, who represent the banking and finance industry, organized labor and private industry.
Problems arose in each of the following contracts:
OCE entered into a potential public-private partnership agreement with laundry service Ecotex and asked advisory council member Neil Bryant to provide a legal analysis and opinion on the issues surrounding the agreement. OCE paid Bryant’s firm $9,401.50 for the opinion and Bryant quit the council five days after Ecotex requested the potential partnership.
OCE entered into an agreement with Portland State University that cost $165,000. An advisory council member quit the day the agreement was signed and offered a position on the PSU review team.
OCE allowed council member and AFL-CIO official Mark Warne to design and implement a program at Coffee Creek Correctional Institution, which cost $10,714.29 per month for 14 months, a total of $150,000. Warne resigned from the council six days after the agreement for the program was signed.
The auditors recommended that OCE further review its contracts and create advisory council bylaws.
This audit is the latest in a string of problems between DOC and OCE.
Peters fired Killgore shortly after the Department of Justice investigation into the department that Killgore had initiated, although Peters said the firing and investigation were not linked.
Killgore contended that the Corrections Department was asking his agency to pay for items it shouldn’t, as well as bullying leaders into hiring people they didn’t want. He said DOC officials were using OCE as a “slush fund” and accused DOC Deputy Director Mitch Morrow of forcing Killgore’s agency to hire and give a raise to Morrow’s son.
The investigation found no criminal activity but did express concern about the relationship between corrections and Oregon Corrections Enterprises.
Meanwhile, the Oregon Government Ethics Commission initiated a review of its own regarding Morrow’s involvement in his son’s hiring. Ethics commission Executive Director Ron Bersin said the commission will look at Morrow’s conduct pursuant to Oregon Revised Statutes Chapter 244, the state’s nepotism statute.
For his part, Killgore sued the Department for $1.5 million on April 9. He alleged wrongful discharge, discrimination and retaliation for whistleblowing.
Peters said she fired him for flouting her directions regarding the future of OCE and its programs, citing as an example the contract with PSU, which also raised eyebrows in the audit.
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See this story at StatesmanJournal.com/news to read the Department of Corrections audit.