The Malheur County Development Corp. may have violated public contracting laws in paying Greg Smith’s company $9,000 a month, an investigation by the Enterprise has determined.
And it appears Smith repeatedly lied while under oath in December when he asserted his company had a contract with the development company, based on a deposition transcript and company records.
The contracting issue raises new questions about how effectively the board of the development company has been overseeing the Treasure Valley Reload Center. Company officials paid its engineering firm $500,000 in excess of one contract, had to switch to a public bidding process for another, and misunderstood all of its obligations to pay its contractors, leaving more than $800,000 owing.
The development company advised the Enterprise on Feb. 28 that “no records exist” to show it assessed public contracting requirements in its dealings with Smith or his company, Gregory Smith & Company LLC of Heppner.
Four days after Smith swore he had a contract, Malheur County Development Corp. said no such record existed.
Oregon’s public contracting laws are complex, governing the award of everything from construction work to hiring consultants.
One purpose for such requirements, according to the contracting law, is to “instill public confidence through ethical and fair dealing, honesty and good faith on the part of government officials and those who do business with the government.” Another is to “promote efficient use of state and local government resources, maximizing the economic investment in public contracting,”
An investigation by the Enterprise established that, despite Smith’s claims under oath, he had no contract with the development corporation.
Grant Kitamura, development company president, confirmed that in a Feb. 22 email to the Enterprise.
“The contract between MCDC and Gregory Smith & Company was still a work in progress,” he said.
He made the remark five days after Smith quit his role at the development corporation.
On three occasions in recent months, the Enterprise requested any contract with Smith to support the monthly payments being made to him with Malheur County money. Three times, the newspaper was told no such document exists, most recently on Feb. 28.
In the most recent request, on Feb. 15, the newspaper requested any records regarding a contract between Smith and the development company, including any document “showing what is expected of Gregory Smith & Company LLC and Greg Smith.”
Two weeks later, the company answered the request but could provide no record describing the expectations of Smith or any draft of a contract.
It released one document – an attorney’s email.
That was sent by Brian DiFonzo of the Yturri Rose law firm in Ontario. He represents Malheur County Development Corp., known locally as MCDC.
On Jan. 4, he wrote to Kitamura and Smith that he wanted to “discuss the contractual relationship between MCDC and Greg Smith & Co.”
Smith would have had a conflict of interest in such a conversation, since at the time he served on the development company board and as its primary operating officer.
“We need to discuss the public contracting angle to this relationship and the next steps to get a formal agreement in place,” DiFonzo wrote. “We have been operating on an interim basis and there is a need to get the relationship formalized and address any public contracting angles that come into play.”
The company operates under the state’s public contracting laws, which require public bidding in many circumstances or a written determination that a contract is excused from such provisions.
The absence of the contract stands in contrast to how Malheur County earlier dealt with Smith and his company.
Beginning in 2013, the county entered annual agreements with Smith’s company that detailed the services to be performed, who owned records and how the agreement could be ended before its annual expiration date.
Smith’s county contract expired June 30, 2022, and the county extended it for one month. The county had been paying his company $6,000 a month for his reload center work.
In August, Gregory Smith & Company LLC started billing the development company for “project manager services.”
The fee: $9,000.
No records provided by the development company explain the 50% increase.
On two occasions in December, Smith swore his company was under contract to the development company.
The first was a declaration dated Dec. 19 that he signed “under penalty of perjury.”
“Gregory Smith & Company LLC was and is under contract to provide management services to MCDC,” he wrote.
Smith repeated that claim in a deposition on Dec. 28. He was deposed for a lawsuit by the Enterprise concerning public records.
As is standard, Smith swore to tell the truth.
In Oregon, someone commits the felony crime of perjury “if the person makes a false sworn statement or a false unsworn declaration in regard to a material issue, knowing it to be false.”
Under questioning at the deposition, Smith said “I do” have a contract between his company and the development company. He also testified, “Gregory Smith & Company LLC has a contract with Malheur County Development Corporation.”
He said he thought the contract was signed in July 2022.
Smith later answered “yes” when asked again whether his company had a contract with the development company. “My statement is correct,” he added.
Smith was questioned about why the development company said “no records existed” when the Enterprise asked last September to see the contract.
“The answer at the time of this request was no,” he said.
To back up his statement, he held up what he represented was a contract entered after the date the Enterprise requested his contract with the development company. He testified he signed it on June 10, 2020.
“The county filed it on November 29, 2022. Which means that would be the effective date of the contract,” he testified.
But the document was an expired contract between Smith’s company and Malheur County, not with the development company.
Smith appeared confused about a notation on the document, leading him to say the contract took effect more than two years after he signed it.
The Nov. 29, 2022, date on the document he held was when County Clerk Gayle Trotter affixed her declaration that that was the date her office made a “true and accurate” copy of the original contract.
Four days after Smith swore he had a contract, the development company said no such record existed. The response came after The Enterprise renewed its request for contract the day after Smith issued his Dec. 19 declaration saying there was one.
On Jan. 5, the Enterprise sent questions by email to the development company directors about the conflict between Smith’s sworn declaration and company statements there was no contract.
Kitamura, the company president, didn’t answer. Other directors who didn’t respond included Corey Maag, Jason Pearson, Kay Riley and Ralph Poole.
Contact Editor Les Zaitz: [email protected].
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