EDITORIAL: It’s time for an audit of Smith & Co.’s work in Malheur County

Malheur County has been paying its contract economic development director thousands of dollars each month in part to prepare an application for federal money to transform this land into an industrial park. The funding request recently failed. (The Enterprise/file)

Taxpayers of Malheur County may have gotten taken as county officials shelled out $138,000 for questionable work by Gregory Smith and Company LLC. The Oregon Secretary of State’s Office, through the state Audits Division, needs to come to town and dig in on behalf of those taxpayers to find the truth.

Such an audit could determine whether the public got stuck with a fat bill for apparently inadequate work on a major grant request, one recently rejected by the feds. Malheur County is a poor county and it must prudently use every dollar in public money it gets. Here’s why it appears something is wrong here.

The task for Greg Smith and his company was pretty direct: Get $15 million to turn bare land into a booming industrial park in Nyssa.

The county doesn’t have the money to build an industrial park so it needs to come from somewhere else. The economic boom envisioned for Malheur County depends on it. Smith has said he could get us 300 jobs if the park went ahead. That’s key because the Treasure Valley Reload Center, while potentially a big boost for the onion industry, creates only a handful of full-time jobs.

In June 2018, Malheur County Judge Dan Joyce and Commissioners Larry Wilson and Don Hodge said yes when Smith came before them asking for an additional $6,000 a month. His company already was getting $9,000 a month to run the county’s economic development affairs. The extra money, Smith said, was needed to go after a federal grant to cover costs of the industrial park. It would also help finish state paperwork – turned in three months later – and some unspecified “technical writing.”

That suggests that most of the $138,000 paid to Greg Smith’s over 23 months was charged for preparing the paperwork asking the feds for that $15 million.

What took nearly two years?

Consider the application, turned in on May 18, 2020, that included a 30-page description and 707 pages of supporting material. At first glance, it would appear producing a book-length application would be an arduous assignment.

Looks are deceiving. Start with the 707 pages.

Most of that material was not produced by Smith. The bulk is copies of reports that other consultants had already been paid – with public money – to produce. This includes an engineering analysis and an economic study finished in September 2018 and a traffic study from 2014. This includes a 146-page bill passed by the Oregon Legislature – available to anyone free on the web. And that’s all related to the rail center.

The supplement also included five supportive letters, including one written by Malheur County commissioners in 2017. The other letters seem hurried – dated just days before the application was due and not describing an industrial park.

The showcase of the application should have been the 30-page description. Remember, the intent was to convince federal authorities that spending $15 million on an industrial park in Nyssa ought to be a national priority. Not once does the application mention “Malheur County Industrial Park.”

Instead, most of the 30 pages is recycled information about not the industrial park but the rail shipping center. Smith’s company and the army of consultants had been paid once to produce that information. Now, it appears, Smith’s company may have charged taxpayers a second time, based on what appears to be cut-and-paste work from earlier submissions.

The application does spend 2 ½ pages explaining what Malheur County would do with the $15 million. But that work apparently wasn’t done by Gregory Smith & Co.

Brad Baird of the engineering firm Anderson Perry and Associates Inc. reported to a county board 13 days before the application was due that he was estimating costs for road work, water and sewer lines, more rail lines and equipment for the industrial park. Baird said in a recent email that “minimal” time went into the work because “we mostly utilized information we already had that was already completed for other project efforts.”

Invoices to the county from consultants such as Anderson Perry list the hours worked, the hourly rate charged, and for what part of the county’s project the time was needed. Taxpayers know what they are getting for their money.

Gregory Smith and Co. doesn’t provide that. The company lists “project manager services” when billing Malheur County for its monthly $6,000 fee.

The Enterprise offered Smith an opportunity chance to explain his firm’s conduct and alerted him we would be calling for an investigation. He didn’t respond.

Malheur County commissioners should be demanding answers. Yet they have shown little interest in seeing that taxpayers get their money’s worth from Smith and his company.

Taxpayers deserve more watchful guardians, and that’s why state auditors need to open an audit. State auditors have a role because most of the money paying for this work comes from state lottery funds and perhaps state transportation funds.

Auditors need to examine Smith’s company to see what justification there is for $138,000 in services. They need to investigate who did the work on the application – and whether other costs have been buried in other invoices paid by the state. They need to investigate how the application put up by the county matches what the federal authorities asked for.

Let’s have experts determine whether the taxpayers of Malheur County and Oregon are getting fair value for the money doled out so far. Taxpayers can add their voice – anonymously if necessary – to insist on accountability by calling the state hotline (800-336-8218) for fraud, waste and abuse to say they want such an audit. – LZ 

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