Hannah Hoffman

Statesman Journal

The state spent nearly $1 million in just 10 days earlier this year to settle employment claims with two former high-level officials, both of whom had at least some record of problems during their respective tenure.

On May 5, the state agreed to pay $450,000 to Rob Killgore, former head of Oregon Corrections Enterprises, after he sued for wrongful discharge and claimed whistle blowing protection in 2013.

On May 15, the state then agreed to pay $450,000 to George Dunford, former chief administrative officer of the Employment Department, after he filed a tort claim for wrongful discharge, whistle blowing and defamation.

Killgore, who sued in court, made headlines.

Dunford, who never officially sued, remained unheralded.

Together, their settlements cost taxpayers $900,000 — $600,000 for the former employees and $300,000 for their respective attorneys' firms.

A records request by the Statesman Journal revealed the state paid Dunford $300,000, plus $150,000 for attorney fees, before he ever filed an official lawsuit and closed the case. A tort claim notice is a document of an intent to sue. It is not an actual lawsuit.

The early closure of Dunford's claim meant no record of the settlement has ever appeared in Marion County Circuit Court records.

He filed the claim on Sept. 17, 2013, after being fired on June 7, 2013. Dunford was embroiled in a series of problems in the Employment Department that resulted in a massive turnover of top managers last year.

So far, he is the only one of them who has received a settlement from the state. He also prevailed in a complaint he filed with the Oregon Government Ethics Commission last year.

The Employment Department was home to several well publicized fiascoes in 2012. A multimillion dollar technology project failed to work, and an audit by the Secretary of State found the system currently in place had many flaws.

Multiple consultants said the "identity and access management" computer project would never work.

Meanwhile, the agency was plagued with infighting, warring factions, distrust and fearful employees. A report from the Department of Administrative Services in July 2013 outlined those problems and even recommended Dunford be fired after employees reported he bullied them, played favorites and couldn't be trusted. They also noted the tension between him and then-Deputy Director Louise Melton-Breen.

(He had been let go by the time the report was released.)

Dunford was heavily involved in all those situations. He was responsible for fixing the technology problems and staunch the hemorrhaging money on that project, but state officials blamed him for its failure, according to reporting by The Oregonian last year.

During the year between June 2012 and June 2013, Dunford began hammering on several problems in Employment Department management, according to his notice of tort claim.

He first told Melton-Breen that he was seeing abuse of authority and violations of state laws among managers, according to his claim.

He accused Chief Information Officer Troy Rutten, Deputy CIO John Debban and security manager Leslie Cummings of "inappropriately using their positions and relationships with key people inside and outside of the agency to further their own goals and to protect their interests to the detriment of the state and the Oregon Employment Department," according to his claim.

Cummings was married to Legislative Information Officer Bob Cummings, who controlled the budget for the failing project, and Debban was Melton-Breen's brother-in-law.

Then-Director Laurie Warner was angry that Dunford had put his accusations against the trio in writing, his lawyer wrote in the claim, but she asked Rutten to retire and had Debban reassigned to the Unemployment Insurance Division of the department after discussing the situation with Melton-Breen.

Dunford and Warner later met with with Department of Administrative Services Director Michael Jordan, the attorney general's office, Sen. Betsy Johnson, D-Scappoose, and the Secretary of State's office to talk about the perceived problems, according to Dunford's claim.

After Dunford met with Gary Blackmer, head of the audits division of the Secretary of State's office, Dunford filed an ethics complaint against Melton-Breen for her role in protecting Debban's job.

Dunford was fired shortly after, on June 7, 2013.

His attorney, Stephen Brischetto, said Dunford's allegations against his fellow managers and their allegedly unethical behavior were "substantial factors" in his dismissal. He also said the State of Oregon released "false, stigmatizing statements to the media concerning Mr. Dunford," referring to the Oregonian article published just eight days after his firing.

Ultimately, Dunford appeared vindicated in most of his complaints.

Warner retired just three weeks after she fired him. She was replaced as director by Lisa Nisenfeld, who officially started in the position on Oct. 1, 2013.

Melton-Breen, for her part, quit abruptly days before Dunford was fired. She was later fined $1,500 by the Oregon Government Ethics Commission for involving herself in the decision to reassign Debban rather than fire him.

The state settled Dunford's claim before he ever filed a lawsuit in court. In addition to the money, the state agreed to change all his personnel records to reflect him resigning, rather than being fired.

It also agreed to give him a neutral job reference.

The state Department of Justice and Department of Administrative Services did not respond to requests for comment.

However, the agreement said the state "expressly denies any liability or fault whatsoever, in whole or in part," for his termination and the subsequent settlement.

hhoffman@statesmanjournal.com, (503) 399-6719 or follow at twitter.com/HannahKHoffman



