EDITORIAL: County needs audit to address economic development issues

Bluebird Express Car Wash in Ontario. (The Enterprise/file)

Malheur County’s economic development department needs to be fixed. The county agency is operating in damaging ways that threaten future job recruitment. Citizens ought to demand an outside investigation.

The Malheur County Economic Development Department is supposed to promote the county as a place to build or grow a business. The idea is that a growing economy helps us all. Citizens get employment or better jobs. The business community gets new customers. And local governments get more people paying the cost of public services.

Accomplishing any of that depends on trust. Particularly in this territory, people should expect that a person’s word is their bond, that contracts are fine but a promise made is a promise to be kept. The recent conduct within the county agency makes it a wonder anyone would trust it.

In 2013, county officials turned over managing the department through a contract with Gregory Smith and Company of Heppner. Greg Smith is the county economic development director, and here’s some of what the public has gotten lately for the $180,000 a year it pays his company.

The county’s efforts to erect the Treasure Valley Reload Center continue to stall. Real estate is again an issue. Smith last year told the state land would cost $1.6 million when in fact the county had already signed deals costing more than $3 million. The county now is struggling to meet state directives to shrink the site, but Smith was warned of state limits six months ago. Smith’s agency also suggested Union Pacific would supply all the rail cars onion growers would need – after the railroad told Smith otherwise.

Then, Smith put Malheur County in the national news by complaining that reporters from the Enterprise were reaching out too often and at all hours. He decided claiming he was the victim of criminal conduct was a smarter choice than simply answering questions. His choice has been criticized and even ridiculed – not great for someone who is supposed to burnish, not bust, Malheur County’s reputation.

More outrageous is his department’s treatment of the people at Bluebird Express Car Wash. These folks were counting on a property tax break, assured by Smith’s agency that it was coming. In Smith’s own words, though, the business “never” qualified for local tax breaks. He didn’t notify the company of that until after the Enterprise started asking questions.

In the intervening nine months, John Braese, Smith’s chief aide in Ontario, told the company story after story about the status of the tax break, including the apparently completely bogus claim that the tax credit was being held up by state officials.

State officials were unusually candid and blunt in refuting Braese’s claims. The state, for one thing, doesn’t approve tax credits. A spokesman for Business Oregon said the agency didn’t have the application as Braese claimed and didn’t have any conversation about sending documents back to Malheur County – as Braese claimed. 

There are at least two possible explanations for this outrage. One is that Braese did what he did under orders from Smith, and Smith alone bears responsibility. Or Smith can claim he had no idea what Braese was doing. That suggests Smith isn’t running the shop as he’s paid to do. Under either scenario, Malheur County failed its duty to the community.

To get his contract with Malheur County, Smith agreed to open his company to state and county officials “to satisfy audit or program evaluation purposes deemed necessary.” The Malheur County Court must invoke that provision immediately, retaining independent outside auditors to scrutinize the Malheur County Economic Development Department. Let those with no tie to Malheur County look at the performance of the agency. Let experts trace what the community is getting for $180,000 a year. Let the experts untangle the truth about the treatment of Bluebird.

And the auditors need to assess whether it’s time Malheur County had a full-time economic development director. Remember, Greg Smith has lots going on besides tending to his local contract. He has full-time jobs in Boardman and in La Grande, he is a state legislator, he is managing a rail project in Albany, and he is Harney County’s economic development director. Auditors should assess whether Smith is spread too thin. 

Malheur County will always have challenges recruiting new employers. That challenge shouldn’t be compounded by sloppy and misleading work by well-paid contractors supposedly working for the community’s benefit. Taxpayers can’t rely on Smith for answers and the county commissioners so far appear to be looking the other way. 

Commissioners need to pay attention long enough to recruit outside auditors to give the community the truth it deserves about what $180,000 a year is buying. Taxpayers ought to insist they do so. – LZ