The federal government has suspended funding for an agency headed by state Rep. Greg Smith over his questionable pay claims that put thousands of dollars in his pocket while he was serving as a legislator.
The development is the latest controversy engulfing Smith in his executive role at an obscure public agency, the Columbia Development Authority, or CDA.
The CDA is transforming a former military base near Hermiston into an industrial and wildlife complex. Smith, a Republican legislator from Heppner, is the CDA’s full-time executive director.
The Port of Morrow uses a federal grant to fund operations of the CDA. Port officials were notified Jan. 15 that no payments would be made for now on what remains of a $1 million grant.
The Defense Department shut off the funding as it continued seeking evidence that Smith was entitled to daily pay from the CDA while he was performing as a legislator. The agency opened its review after an investigation last year by the Enterprise found that Smith reported full-day shifts for the CDA while he was in Salem at the Legislature.
Lisa Mittelsdorf, executive director of the Port of Morrow and a close Smith ally, didn’t respond to a voicemail seeking an interview or to detailed written questions about the federal action.
Joe Taylor, chair of the Port of Morrow Commission, said on Wednesday, Jan. 29, that he was unaware of the funding freeze until told by about it by a reporter.
Smith wouldn’t address questions about the matter sent to his emails at the CDA, his private company and his legislative office.
“The Malheur Enterprise’s interposing reporting of the Columbia Development Authority has most certainly pressed its economic interest with key partners,” Smith wrote. “The Columbia Development Authority will continue to work with its’s [sic] key partners in order to proceed forward.”
“The timecards received from Mr. Smith are not consistent with the May 29, 2015, letter assuring federal funds would not compensate Mr. Smith in his legislative capacity.”
–Federal agency letter to the Port of Morrow
A unit of the U.S. Defense Department, the Office of Local Defense Community Cooperation, wrote to Mittelsdorf that the agency had completed its review of the grant but had unresolved concerns about Smith’s pay and the port’s role in false statements to federal officials that a significant pay raise for Smith had been approved.
Smith is required by port policies to submit time sheets that accurately reflect hours that he worked for the CDA.
An investigation last year by the Enterprise established that Smith was claiming eight hours of work daily during legislative sessions when he was in Salem. The newspaper found that Smith was claiming daily expenses for his legislative service on the days he also was listing eight hours of work for the CDA.
Federal officials said in their recent notice that they relied on the port’s promise at the time Smith was hired that it had “systems in place to accurately document time and activity for staff funded under the award.”
The letter said the port in its 2015 letter assured federal officials that “Smith would not be compensated through the grant for work done in his legislative capacity.”
However, the federal agency said its review found that Smith’s time cards “do not provide evidence that time worked in his legislative capacity was separated from time worked in his capacity as the Columbia Development Authority’s executive director.”
The review found that the Legislature’s website “shows that Mr. Smith was participating in legislative activities on the same dates and times that are listed” on his CDA timeslips, the notice said.
“The timecards received from Mr. Smith are not consistent with the May 29, 2015, letter assuring federal funds would not compensate Mr. Smith in his legislative capacity,” the federal notice said.
The newspaper’s investigation found that Smith also listed himself performing duties as director of Eastern Oregon University’s business center on days he claimed to be working for the CDA. Smith through his company also serves as the economic development director for Harney County and is listed as an “economic adviser” for another client, Umatilla Electric Coop in Hermiston.
The federal agency earlier had requested a statement from Smith on the matter.
On Oct. 31, Smith issued what he labeled as an “attestation statement” in which he asserted information he was providing was “true, accurate and complete.”
READ IT: Greg Smith statement
He said that for the years 2022, 2023 and 2024, he was not paid from the federal grant for the CDA “where I am also being compensated for work performed in either my state legislator capacity or under any other position I hold.”
That appears to conflict with Port of Morrow financial records disclosed to the Enterprise under a public records request.
A spreadsheet for 2023 showed that Smith was paid $120,606, with $108,546 coming from the federal grant. The Legislature that year met in Salem from Jan. 17 to June 25.
The spreadsheet for 2024 from the port showed that Smith was paid $126,089, with $113,481 from the federal grant. The Legislature convened from Feb. 5, 2024, to March 7, 2024.
Port officials and Smith didn’t respond to questions about the figures.
In its notice, the federal agency asked the port to “provide documentation that demonstrates that the Port of Morrow separately accounted for Mr. Smith’s time working in his legislative capacity.” The agency also asked for details on “current internal controls” to ensure Smith’s time “is allocated accurately.”
Mittelsdorf responded to federal officials on Wednesday, Jan. 29, that there was no such documentation. The port relied only on timeslips that Smith turned in – after signing approval of his own timecard. Port officials earlier advised federal officials that they didn’t review his submissions.
“We have paid Greg based on completed, signed time sheets,” Mittelsdorf said.
She said the only “internal control” over Smith’s time was his “completed, signed timecards.”
Federal officials also sought details on a pay raise that subsequently engulfed the port and the CDA in a public controversy.
The Port of Morrow last year applied for renewed federal funding for the CDA. The application listed Smith would be paid $195,000. The application said he was getting a raise but didn’t include his salary at the time of $129,000.
Eileen Hendricks, the port’s chief financial officer, signed the application sent to federal officials that stated the CDA Board had approved pay raises for the staff.
Board members later said there was no such approval, and Smith in a meeting last fall said he “owned” the false claim.
The CDA Board subsequently rescinded the pay raise and directed that Smith repay the excessive pay. Port officials provided no record of such a repayment when asked to do so by the Enterprise in a public records request.
The federal agency said it renewed the CDA funding because of assurances from the port that salary increases “had been previously approved by the board.” The agency said it had “concerns” about the port’s “awareness” of Smith’s actions to boost his pay.
The agency said it wanted the port to explain why information about pay raises was not “accurately presented” to the federal government by the port.
Mittelsdorf dismissed the concern in her response.
“We did not participate in the preparation of the budget,” she wrote.
Besides, she said, “the disputed pay increases did not increase the federal share.”
Federal officials declined to answer questions about the status of the CDA funding.
“This issue is still under review,” a Defense Department spokesman said in an email to the Enterprise on Friday, Jan. 31.
Mittelsdorf has backed Smith and, according to the port’s attorneys, she keeps no records on substantive matters involving Smith.
Mittelsdorf, for instance, represents the port on the board of a small nonprofit involved in economic development. Smith is under contract for $100,000 a year to manage the operation. Tax records for 2023 show his service consumed nearly all Morrow Development Corp.’s revenue that year of $106,354. The nonprofit showed a loss of $23,539, the tax records show.
The port also responded that despite Mittelsdorf’s seat on the board, the agency had no records about the nonprofit, including meeting minutes, financial records or Smith’s contract.
The port also said it had no records relating to Smith’s legislation in the 2025 Legislature proposing to expand the Port of Morrow Commission by adding two governor-appointed members. The five commissioners now are elected from the port’s region.
Smith is threatening to sue the Port of Morrow, the CDA and the county of Umatilla over what he asserted were reputation-destroying comments at a September CDA Board meeting. Board members at that meeting confronted Smith about the pay raises before voting to rescind them. The claims are in mediation.
The CDA, meantime, has hired an outside lawyer to separately investigate Smith’s claims of employment discrimination. The CDA and the Port of Morrow has declined to release the grievance.
And the Oregon Government Ethics Commission is proceeding to investigate Smith’s annual disclosure filing from last year. Agency investigators found that Smith didn’t fully disclose clients of his company.
PREVIOUS REPORTING:
Oregon ethics commission faults Rep. Greg Smith for not naming clients
Republican legislator says reputation ‘destroyed’ over his controversial pay raise
Defense Department digging into finances of Boardman public agency run by Greg Smith
Turmoil continues around Smith as public officials spar over his performance
Smith loses big pay increase, faces salary repayment in controversy over his conduct
Greg Smith exaggerates his duty to engineer major pay raise from struggling public agency
CONTACT: Editor Les Zaitz – [email protected]
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