By Taylor W. Anderson

The Bulletin

SALEM — Part of a sweeping investigation by federal prosecutors into former Gov. John Kitzhaber and his fiancee, Cylvia Hayes, includes Hayes’ work on a project at the Knott Landfill on Bend’s east side.

Hayes appeared at least twice at Deschutes County meetings in 2011 with an official from the Waste to Energy Group, a California company that has a contract with the county to speed up the decomposition of waste and eventually create a marketable gas, according to county records and interviews with county officials.

Deschutes County approved the project in January 2014, and the county wasn’t named in an eight-page federal grand jury subpoena served the day Kitzhaber announced his resignation. But the subpoena identifies 15 projects and subjects Hayes worked on, including the Knott Landfill project and the Pronghorn Golf Course, both in Deschutes County.

Hayes’ involvement in the landfill project is still unclear. She worked for the California group early in Kitzhaber’s third term as governor and at a time when she was bolstering her credentials as a Bend-based green energy consultant who could help guide companies’ clean energy proposals through regulations.

Federal authorities are now interested in finding out how Hayes was involved. The federal grand jury subpoena covers 11 state agencies, including the Department of Environmental Quality, which would have to sign off on the final permit for the project.

The subpoena asks for all documents dated Jan. 1, 2009 and later related to Knott Landfill and waste-to-energy projects along with California group Hix Rubenstein, which is developing the Pronghorn Golf Course.

Deschutes County legal counsel David Doyle said no one at the county has heard from law enforcement asking about Hayes’ work.

Lissa Druback, DEQ’s solid and hazardous waste manager for Eastern Oregon, said federal authorities have inquired about Hayes’ involvement, but that it shouldn’t stop the project from moving forward.

“We’ve been asked to provide records based on the project. But it wouldn’t hold it up as long as the project receives funding,” Druback said.

Timm Schimke, director of the county’s solid waste department, said Waste to Energy Group hired Hayes in 2011, but that “it was a fairly short relationship.”

“She assisted them in basically the logistics of the public meetings that we were planning to have,” Schimke said.

He said the department relied on Hayes’ contacts within the environmental community for two meetings.

“She might have wordsmithed the announcement ‘come here, here’s the date, here’s the time,’” Schimke said. “The second meeting was targeted toward the environmental community. We relied on people within the environmental community; that’s where Cylvia’s connected.”

Hayes didn’t respond to a request for comment.

A review of county meeting minutes shows Hayes attended a work session on Aug. 8, 2011, and was introduced as a consultant alongside Lawrence Randy Lutz, CEO of Waste to Energy Group. The minutes don’t show that Hayes spoke at the meeting.

A review of the contract and an independent study commissioned by the county shows Deschutes County was in the process of renewing permits with the state Department of Environmental Quality.

The project still requires a permit from DEQ to move forward, though Druback said DEQ is “open to” approving the project.

Mike Ewall, a green energy advocate who helps grass-roots groups oppose projects they believe will increase pollution through his Pennsylvania-based group Energy Justice Network, reviewed the Knott Landfill gas production proposal in 2012.

Ewall came to Bend to give a presentation to local residents who opposed the then proposed project that involves injecting steam into the landfill to speed up the decomposition of waste that creates landfill gas. That gas will then be refined so it is marketable as either a natural methane-based gas or a liquid gas like ethanol.

Ewall, who frequently studies landfill gas, said this week the process at Knott Landfill may be hazardous because landfill gas contains toxins and it’s nearly impossible to capture all the gas that’s created. Waste to Energy Group estimated it would capture 99 percent of landfill gas, which is a number that Ewall and a group the county hired to study the project question.

Ewall also questions why the project would gain approval given that it sits across SE 27th Street from High Desert Middle School.

“As far as accelerating the production of the gases, that is particularly dangerous,” Ewall said. “Especially with a school right across the street. You don’t want to be making a landfill gassier than it already is.”

Schimke said the landfill would produce the gas naturally, with or without the Waste to Energy Group’s project.

While some neighbors who opposed the project say Hayes appeared at one meeting in 2012, there is no evidence she worked with Waste to Energy later in the approval process.

Deschutes County commissioners inked the contract Jan. 29, 2014, giving Waste to Energy Group 18 months to begin work or lose the contract.

The final DEQ permitting process would allow for another month of written public comment and an additional time for public meetings before final approval from the state.

The county stands to make at least $240,000 annually and perhaps more.

Waste to Energy officials told The Bulletin earlier this week they anticipate starting the project in the next two months, not long before the deadline.

It’s not clear whether Waste to Energy Group has the estimated $20 million needed to move forward. Lutz didn’t return requests for comment on this article.

Pronghorn Golf Course

The other inquiry looks into Hayes’ work for Hix Rubenstein, another California company that has developed the Pronghorn Golf Course for more than a decade.

Hayes’ work as a consultant with the company made headlines in October last year, though the role and scope of her work are also unclear.

Hayes worked for that company’s president, Tom Hix, in 2006, when Hix proposed an environmentally friendly industrial park near the Redmond Airport.

Deschutes County originally approved the building of the Pronghorn resort in 2002. But when Central Oregon’s real estate market tanked, Hix Rubenstein had trouble paying its loans and finishing the resort.

The Oregon Department of Energy nearly foreclosed on a part of the resort in 2011, and the last-ditch attempts by Hix for an extension on the loan raised questions that linger today.

Willamette Week reported in October that Hix emailed Hayes and Kitzhaber aides in the weeks leading up to a scheduled Dec. 1, 2011, foreclosure, asking for any help they could give.

The company owed $1.2 million on a 2005 loan from the Department of Energy to install solar panels. In the days leading up to the foreclosure deadline, Hix and another Hix Rubenstein employee contacted Kitzhaber’s office, asking whether they could help get an extension from the agency.

A Kitzhaber staffer emailed the Department of Energy and asked for an extension the morning of the scheduled foreclosure, and the department granted a two-week extension.

During that time, Pronghorn found a buyer, at least for another $43 million loan it sold to a Hawaiian company called The Resort Group, on Dec. 13, 2011.

Hix later wrote an email thanking Kitzhaber’s staff for their help. He included Hayes in the email.

A call to Tom Hix wasn’t returned.

— Reporter: 406-589-4347,

tanderson@bendbulletin.com

9251755