(U.S. Rep. Peter DeFazio's office)
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on March 11, 2015 at 7:00 AM, updated March 11, 2015 at 7:19 AM
A policy adviser to John Kitzhaber collected hundreds of thousands of dollars from the state while also running a consulting business on the side, The Oregonian/OregonLive has learned.
For nearly three years, Tom Tuchmann was both the former governor's part-time forestry adviser and owner of Portland-based U.S. Forest Capital. The private consulting firm orchestrates the types of deals that Tuchmann helped Kitzhaber promote.
Tuchmann's dual roles mirror those of Cylvia Hayes, underscoring Kitzhaber's blindness to conflicts of interest. Hayes' work as a private consultant and policy adviser to Kitzhaber led to the governor's downfall and a sweeping FBI investigation.
But unlike Hayes, Tuchmann was paid for his government role. He took in nearly $400,000 in fees and expenses from May 2012 through December 2014, according to his state contract.
Gov. Kate Brown severed the contract Feb. 18 - the day she took office with a pledge that no one in her administration would earn money from outside sources.
"In terms of our path moving forward, the contract didn't meet the direction we wanted to go in," Brown told The Oregonian/OregonLive. "Obviously, I've set forth my principles in terms of ethics, and I want to stick by them."
Environmentalists, timber industry representatives and other policy advisers said Tuchmann's twin roles made them uncomfortable and left them questioning his motives. That was especially true after Tuchmann proposed that his company put together a deal to buy state-owned forestland.
But no one dared challenge Tuchmann's state job for fear of alienating Kitzhaber, they said.
No one has accused Tuchmann, 54, of any legal wrongdoing, however. Experts said it was up to Kitzhaber to make sure Tuchmann's role was ethically sound. Neither Kitzhaber nor his attorneys responded to requests for comment.
Tuchmann told The Oregonian/OregonLive he did nothing wrong. He noted that his state contract was with his company, not with him personally, though the distinction may mean little given that he is the president and sole owner of U.S. Forest Capital.
He said he considered Kitzhaber and the state his clients -- sometimes referring to them as such publicly. He also said he took on no new Oregon clients during his state tenure.
"Ethics are very important to me," Tuchmann said. "I've been very upfront."
Tuchmann added that he never asked for the adviser title, bestowed when Kitzhaber appointed him. But he acknowledged that he never asked the governor to stop using it, either.
The title was on the state government's website and a range of government documents. Tuchmann also used it himself -- for example, in a September 2014 statement to Oregon legislators and in April 2013 testimony before a U.S. House subcommittee.
Tuchmann also failed for two years to report any potential conflict of interest on state forms, records show.
Highly unusual hire
Tuchmann was a big name in forest policy when Kitzhaber came calling, having helped draft the landmark Northwest Forest Plan under President Bill Clinton.
Kitzhaber announced Tuchmann's appointment as his forestry and conservation finance adviser in a press release May 24, 2012. The release identified Tuchmann as president of U.S. Forest Capital, "advising clients on projects that benefit forest resources and enhance local economies."
In the days before Cylvia Hayes became a household name, the appointment raised few eyebrows among the public. But officials and others said the situation was highly unusual. Governors commonly tap experts from private industry, they said, but such experts join the government only after leaving their private jobs.
Tuchmann was hired to help Kitzhaber with the controversial western Oregon lands once owned by the defunct Oregon & California Railroad, and other federal and state forest policies.
Tuchmann also helped Kitzhaber create financing tools for buyers such as conservation groups to purchase ranches, farms and forests for mixed uses - say, conservation and logging.
That was, in fact, Tuchmann's area of expertise. U.S. Forest Capital is among a narrow field of firms that help facilitate such purchases. The company acts as a real estate agent of sorts, collecting fees on deals it arranges between buyers, often conservation groups, and private forest owners.
Over the past two years, the company helped execute four large sales in three states, totaling 103,000 acres valued at more than $210 million, according to its website.
Document: U.S. Forest Capital's state contract
During his tenure, Tuchmann collected $379,848 in fees and expenses from the state through 2014. He invoiced an additional $17,168 in January, which hasn't been paid, and he hasn't billed the state for work in February or March.
Document: Final amendment to Forest Capital's contract
Tuchmann received an additional $84,985 from the state, which he paid to subcontractors, bringing the total his company has billed to $482,001. Overall, the contract allowed him to bill up to $640,000.
Discomfort among conservationists
In the contentious world of forest management, conservationists say they often work with government advisers from an industry with a different viewpoint. But generally, they say, the person works solely as an adviser and tries to bring objectivity to the table.
That wasn't the case with Tuchmann, they said. He already supported more logging than they were comfortable with, said conservationists such as Andy Kerr and Steve Pedery. Knowing that Tuchmann's boots were still firmly planted at his company, they said, made them uneasy about sharing information with him.
"Our feeling was if Tom Tuchmann comes in as a private businessman and then as the governor's adviser, whose interest is he representing at any given time and how were our answers filtering back through to the governor?" said Bob Sallinger, conservation director of the Audubon Society of Portland.
"There was a duality of roles there that certainly did not go unnoticed," he said. "These issues were challenging enough already, and that didn't help."
Two sources on Capitol Hill who worked on O&C and other forest issues said Tuchmann's role with Forest Capital troubled them. A third said information about Tuchmann's business role wasn't relayed at all.
Tuchmann said he was open about his involvement with Forest Capital, adding that he used his company email address in his advising work to make his role clear.
"I've done everything possible to be clear about any potential conflicts," he said.
However, Tuchmann didn't complete conflict-of-interest forms with the governor's office in 2012 or 2013.
Tuchmann said his work was focused on providing options for handling the O&C lands. Because Forest Capital didn't take on any new clients in Oregon, Tuchmann said, there was no need. He acknowledged that the company kept one existing Oregon client.
Public officials, including policy advisers, are supposed to fill out such forms to address real or potential conflicts or the potential for any gain, said Ron Bersin, executive director of the Oregon Government Ethics Commission.
Tuchmann drafted options for the O&C lands, including proposing to sell pieces to a trust, community nonprofit or private buyer - the types of transactions Forest Capital orchestrates.
Tuchmann confirmed that Forest Capital will be among companies that could benefit if those lands are put up for sale.
"But that decision hasn't yet been made," he said. "And I was never in the position of making any of those decisions."
The Elliott Forest
Tuchmann did fill out a conflict-of-interest form in May 2014 after he decided Forest Capital would propose to buy the Elliott State Forest's remaining 93,000 acres.
The public forest, in part because of environmental lawsuits related to the endangered marbled murrelet, was not hitting mandated logging targets. So instead of generating money for a state school fund, it was costing the state money for maintenance.
The state Land Board - made up of the governor, secretary of state and treasurer - was soliciting ideas on what to do.
Tuchmann's conflict-of-interest form explained that he was "the governor's forestry and conservation finance adviser." In addition, he wrote, through his work with Forest Capital: "I am working with a group of potential private equity, timber industry, community and environmental representatives to create a proposal for the Elliott Forest." If a deal goes through, his company will earn a percentage.
Kitzhaber's government attorney, Liani Reeves, advised Tuchmann to alert any interest groups and state agencies of the potential conflict. She also advised him against using his position to gain access to people or information unavailable to the public.
In October 2014, Tuchmann submitted a proposal to the state in which investors, teamed with conservation and community groups, would buy the Elliott Forest. They would use some land for logging and some for recreation.
The market-price offer would provide money for the school fund, Tuchmann proposed, and the community group would ultimately become the sole owner.
Robert Ragon, executive director of Douglas Timber Operators, submitted a competing proposal. He suggested the state keep ownership of the Elliott but allow his cooperative of 140 southwest Oregon companies to manage it and more reliably meet logging requirements.
Not long after, Ragon said in a recent interview, Tuchmann came to his Roseburg office. Ragon recalled Tuchmann saying he was "wearing his Forest Capital hat."
"He came down here and tried to get me to back off on my proposal," said Ragon, saying Tuchmann tried to convince him that the Forest Capital option was better.
"Those two roles didn't fit together too well," said Ragon, adding that he wasn't intimidated but upset. Still, he said, nobody from his industry wanted to complain and get crosswise with Kitzhaber's office.
Ragon questioned the fairness of the process. "It seemed apparent to all of us that he's sitting there in the governor's office while the rest of us are commuting back and forth."
Tuchmann acknowledged traveling to Ragon's Roseburg office but said he went only to brief Ragon on Forest Capital's plan. On Ragon's contention that he tried to push Ragon to back out, he said: "I don't recall saying that."
Tuchmann also said his work on the Elliott is in the early stages. He is working to identify investors, he said, but doesn't have any clients on the deal yet.
Ultimately, ethics experts say, it was Kitzhaber's job to make sure all the players found the process fair and transparent.
"Perceptions of fairness and ethical behavior are just as much about confidence in the process as they are about fairness of outcomes," said Donald O. Neubaum, associate dean for research at Oregon State University's College of Business.
"If there is the potential for the appearance of unfairness in the process," he said, "it should be changed to make it more transparent or to reduce the perceived source of bias or unfairness."
Pivotal meeting
Steve Pedery, conservation director for Oregon Wild, was invited to an October 2014 meeting Tuchmann organized to discuss Forest Capital's Elliott Forest proposal.
Pedery said he normally wouldn't attend such a meeting because Forest Capital's deals often include more logging than he likes. But given Tuchmann's position in Kitzhaber's office, he thought he should.
Pedery said he and others already had ethical concerns about Tuchmann and the Elliott Forest -- as well as with Kitzhaber proposals and bills in the Legislature to spend more money on the types of conservation funding tools that Forest Capital often uses.
By then, Pedery said, he and other environmentalists had long thought Tuchmann's twin roles were inappropriate. That opinion, he said, was cemented during the October meeting.
"I remember Tom saying, 'I am not working on the Elliott for the state, but I do have the governor's ear on forest policy,'" Pedery said. "That just set me on edge."
Tuchmann said he didn't say that and that he can't control others' perceptions.
"I can't opine on what somebody thinks about these things," said Tuchmann, who told state officials he would wrap up his work by March 15. "I consistently made my involvement crystal clear and I don't know what else I could have possibly done."
In the meantime, all signs of Tuchmann's work for the state have been scrubbed from the new governor's web pages.
Jeff Mapes contributed to this report.
-- Laura Gunderson
lgunderson@oregonian.com
503-221-8378
@LGunderson
The contract
The state's contract with Tom Tuchmann's U.S. Forest Capital LLC grew by more than 200 percent. Here's how negotiations unfolded, according to state documents:
May 7, 2012, initial contract: $200,000 for work between May 10, 2012, and April 30, 2014.
Jan. 2, 2013, amendment: Pay increased to $300,000; work period shortened to June 30, 2013, to follow the state's two-year budget cycle
June 27, 2013, amendment: Work extended to Aug. 30, 2013
Aug. 22, 2013, amendment: Work extended to Sept. 30, 2013
Sept. 23, 2013, amendment: Pay increased to $500,000 and work extended to June 30, 2015
Feb. 19, 2014, amendment: Pay increased to $540,000
Sept. 17, 2014, amendment: Pay increased to $640,000
Feb. 18, 2015: Contract terminated early
No competition
Instead of hiring Tuchmann, the state signed his company as a contractor. The state argued that Tuchmann and his firm provided a specialized service that would be hard to match. But, while making that case, the state solicited other bids for a month. No other firms applied, and Tuchmann's company entered into a "sole-source" contract.
Tuchmann's dual roles mirror those of Cylvia Hayes, underscoring Kitzhaber's blindness to conflicts of interest. Hayes' work as a private consultant and policy adviser to Kitzhaber led to the governor's downfall and a sweeping FBI investigation.
But unlike Hayes, Tuchmann was paid for his government role. He took in nearly $400,000 in fees and expenses from May 2012 through December 2014, according to his state contract.
Gov. Kate Brown severed the contract Feb. 18 - the day she took office with a pledge that no one in her administration would earn money from outside sources.
"In terms of our path moving forward, the contract didn't meet the direction we wanted to go in," Brown told The Oregonian/OregonLive. "Obviously, I've set forth my principles in terms of ethics, and I want to stick by them."
Environmentalists, timber industry representatives and other policy advisers said Tuchmann's twin roles made them uncomfortable and left them questioning his motives. That was especially true after Tuchmann proposed that his company put together a deal to buy state-owned forestland.
But no one dared challenge Tuchmann's state job for fear of alienating Kitzhaber, they said.
No one has accused Tuchmann, 54, of any legal wrongdoing, however. Experts said it was up to Kitzhaber to make sure Tuchmann's role was ethically sound. Neither Kitzhaber nor his attorneys responded to requests for comment.
Tuchmann told The Oregonian/OregonLive he did nothing wrong. He noted that his state contract was with his company, not with him personally, though the distinction may mean little given that he is the president and sole owner of U.S. Forest Capital.
He said he considered Kitzhaber and the state his clients -- sometimes referring to them as such publicly. He also said he took on no new Oregon clients during his state tenure.
"Ethics are very important to me," Tuchmann said. "I've been very upfront."
Tuchmann added that he never asked for the adviser title, bestowed when Kitzhaber appointed him. But he acknowledged that he never asked the governor to stop using it, either.
The title was on the state government's website and a range of government documents. Tuchmann also used it himself -- for example, in a September 2014 statement to Oregon legislators and in April 2013 testimony before a U.S. House subcommittee.
Tuchmann also failed for two years to report any potential conflict of interest on state forms, records show.
Highly unusual hire
Tuchmann was a big name in forest policy when Kitzhaber came calling, having helped draft the landmark Northwest Forest Plan under President Bill Clinton.
Kitzhaber announced Tuchmann's appointment as his forestry and conservation finance adviser in a press release May 24, 2012. The release identified Tuchmann as president of U.S. Forest Capital, "advising clients on projects that benefit forest resources and enhance local economies."
In the days before Cylvia Hayes became a household name, the appointment raised few eyebrows among the public. But officials and others said the situation was highly unusual. Governors commonly tap experts from private industry, they said, but such experts join the government only after leaving their private jobs.
Tuchmann was hired to help Kitzhaber with the controversial western Oregon lands once owned by the defunct Oregon & California Railroad, and other federal and state forest policies.
Tuchmann also helped Kitzhaber create financing tools for buyers such as conservation groups to purchase ranches, farms and forests for mixed uses - say, conservation and logging.
That was, in fact, Tuchmann's area of expertise. U.S. Forest Capital is among a narrow field of firms that help facilitate such purchases. The company acts as a real estate agent of sorts, collecting fees on deals it arranges between buyers, often conservation groups, and private forest owners.
Over the past two years, the company helped execute four large sales in three states, totaling 103,000 acres valued at more than $210 million, according to its website.
Document: U.S. Forest Capital's state contract
During his tenure, Tuchmann collected $379,848 in fees and expenses from the state through 2014. He invoiced an additional $17,168 in January, which hasn't been paid, and he hasn't billed the state for work in February or March.
Document: Final amendment to Forest Capital's contract
Tuchmann received an additional $84,985 from the state, which he paid to subcontractors, bringing the total his company has billed to $482,001. Overall, the contract allowed him to bill up to $640,000.
Discomfort among conservationists
In the contentious world of forest management, conservationists say they often work with government advisers from an industry with a different viewpoint. But generally, they say, the person works solely as an adviser and tries to bring objectivity to the table.
That wasn't the case with Tuchmann, they said. He already supported more logging than they were comfortable with, said conservationists such as Andy Kerr and Steve Pedery. Knowing that Tuchmann's boots were still firmly planted at his company, they said, made them uneasy about sharing information with him.
"Our feeling was if Tom Tuchmann comes in as a private businessman and then as the governor's adviser, whose interest is he representing at any given time and how were our answers filtering back through to the governor?" said Bob Sallinger, conservation director of the Audubon Society of Portland.
"There was a duality of roles there that certainly did not go unnoticed," he said. "These issues were challenging enough already, and that didn't help."
Two sources on Capitol Hill who worked on O&C and other forest issues said Tuchmann's role with Forest Capital troubled them. A third said information about Tuchmann's business role wasn't relayed at all.
Tuchmann said he was open about his involvement with Forest Capital, adding that he used his company email address in his advising work to make his role clear.
"I've done everything possible to be clear about any potential conflicts," he said.
However, Tuchmann didn't complete conflict-of-interest forms with the governor's office in 2012 or 2013.
Tuchmann said his work was focused on providing options for handling the O&C lands. Because Forest Capital didn't take on any new clients in Oregon, Tuchmann said, there was no need. He acknowledged that the company kept one existing Oregon client.
Public officials, including policy advisers, are supposed to fill out such forms to address real or potential conflicts or the potential for any gain, said Ron Bersin, executive director of the Oregon Government Ethics Commission.
Tuchmann drafted options for the O&C lands, including proposing to sell pieces to a trust, community nonprofit or private buyer - the types of transactions Forest Capital orchestrates.
Tuchmann confirmed that Forest Capital will be among companies that could benefit if those lands are put up for sale.
"But that decision hasn't yet been made," he said. "And I was never in the position of making any of those decisions."
The Elliott Forest
Tuchmann did fill out a conflict-of-interest form in May 2014 after he decided Forest Capital would propose to buy the Elliott State Forest's remaining 93,000 acres.
The public forest, in part because of environmental lawsuits related to the endangered marbled murrelet, was not hitting mandated logging targets. So instead of generating money for a state school fund, it was costing the state money for maintenance.
The state Land Board - made up of the governor, secretary of state and treasurer - was soliciting ideas on what to do.
Tuchmann's conflict-of-interest form explained that he was "the governor's forestry and conservation finance adviser." In addition, he wrote, through his work with Forest Capital: "I am working with a group of potential private equity, timber industry, community and environmental representatives to create a proposal for the Elliott Forest." If a deal goes through, his company will earn a percentage.
Kitzhaber's government attorney, Liani Reeves, advised Tuchmann to alert any interest groups and state agencies of the potential conflict. She also advised him against using his position to gain access to people or information unavailable to the public.
In October 2014, Tuchmann submitted a proposal to the state in which investors, teamed with conservation and community groups, would buy the Elliott Forest. They would use some land for logging and some for recreation.
The market-price offer would provide money for the school fund, Tuchmann proposed, and the community group would ultimately become the sole owner.
Robert Ragon, executive director of Douglas Timber Operators, submitted a competing proposal. He suggested the state keep ownership of the Elliott but allow his cooperative of 140 southwest Oregon companies to manage it and more reliably meet logging requirements.
Not long after, Ragon said in a recent interview, Tuchmann came to his Roseburg office. Ragon recalled Tuchmann saying he was "wearing his Forest Capital hat."
"He came down here and tried to get me to back off on my proposal," said Ragon, saying Tuchmann tried to convince him that the Forest Capital option was better.
"Those two roles didn't fit together too well," said Ragon, adding that he wasn't intimidated but upset. Still, he said, nobody from his industry wanted to complain and get crosswise with Kitzhaber's office.
Ragon questioned the fairness of the process. "It seemed apparent to all of us that he's sitting there in the governor's office while the rest of us are commuting back and forth."
Tuchmann acknowledged traveling to Ragon's Roseburg office but said he went only to brief Ragon on Forest Capital's plan. On Ragon's contention that he tried to push Ragon to back out, he said: "I don't recall saying that."
Tuchmann also said his work on the Elliott is in the early stages. He is working to identify investors, he said, but doesn't have any clients on the deal yet.
Ultimately, ethics experts say, it was Kitzhaber's job to make sure all the players found the process fair and transparent.
"Perceptions of fairness and ethical behavior are just as much about confidence in the process as they are about fairness of outcomes," said Donald O. Neubaum, associate dean for research at Oregon State University's College of Business.
"If there is the potential for the appearance of unfairness in the process," he said, "it should be changed to make it more transparent or to reduce the perceived source of bias or unfairness."
Pivotal meeting
Steve Pedery, conservation director for Oregon Wild, was invited to an October 2014 meeting Tuchmann organized to discuss Forest Capital's Elliott Forest proposal.
Pedery said he normally wouldn't attend such a meeting because Forest Capital's deals often include more logging than he likes. But given Tuchmann's position in Kitzhaber's office, he thought he should.
Pedery said he and others already had ethical concerns about Tuchmann and the Elliott Forest -- as well as with Kitzhaber proposals and bills in the Legislature to spend more money on the types of conservation funding tools that Forest Capital often uses.
By then, Pedery said, he and other environmentalists had long thought Tuchmann's twin roles were inappropriate. That opinion, he said, was cemented during the October meeting.
"I remember Tom saying, 'I am not working on the Elliott for the state, but I do have the governor's ear on forest policy,'" Pedery said. "That just set me on edge."
Tuchmann said he didn't say that and that he can't control others' perceptions.
"I can't opine on what somebody thinks about these things," said Tuchmann, who told state officials he would wrap up his work by March 15. "I consistently made my involvement crystal clear and I don't know what else I could have possibly done."
In the meantime, all signs of Tuchmann's work for the state have been scrubbed from the new governor's web pages.
Jeff Mapes contributed to this report.
-- Laura Gunderson
lgunderson@oregonian.com
503-221-8378
@LGunderson
