First of three parts

should have spent a day this month celebrating the launch of a lifesaving radio network, something he made a top priority in his time as governor.

is a dangerous mess. Radios are old and breaking down, they've failed during crisis, and they often don't allow public safety workers from different areas to talk to one another.

Kulongoski pledged to fix it. The network's first major part, a chain of radio towers across western Oregon mountaintops, was supposed to be done by this month, just before Kulongoski leaves office in January.

"I wish that it had been fired up," Kulongoski said in an interview about the project, known as the

. "Or a test that says, 'This works.'"

There is no ceremony and no network to test.

With more than $24 million spent, only two of the project's towers are under construction, according to the project's most recent report. It's about two years behind schedule, and the price has soared from $414 million to nearly $600 million.

It gets worse. Interviews and records obtained by The Oregonian show that state officials running the project gave misleading information about the project's costs and progress to lawmakers, the public and Kulongoski, who had taken the unusual step of putting the project directly under his office.

Records show OWIN officials used unsupported estimates of savings and lowballed the price to persuade lawmakers to fund the project. And they repeatedly handed out erroneous maps that greatly exaggerated their progress, even after internal investigations found the maps faulty.

"It's by far -- by far -- the most egregious case of the Legislature being misled by a state agency that I've ever seen," said Sen. Betsy Johnson, D-Scappoose, who has watched the project for years.

Now OWIN is burning through money like jet fuel as officials race to show progress before the Legislature convenes in January. Despite earlier promises to save money by having state employees do much of the work, OWIN is paying 12 private consultants as much as $303,000 a year -- each -- to help speed up the project

launched this effort before leaving office eight years ago. As he returns for a third term, Kitzhaber and legislators must decide whether to keep OWIN going as they grapple with a $3.5 billion state budget gap.

For his part, Kulongoski takes responsibility for the project's difficulties and said he should have acted sooner to put OWIN on a better course. The governor said he wasn't aware of the extent of the misinformation given to his staff and the Legislature until after he agreed to change the project's leadership in April.

If the state were in better economic times, Kulongoski said, the fate of the OWIN project wouldn't be as precarious.

"This is critically important to this state to finish this out," Kulongoski said.

Today, OWIN has new managers who say they are fixing the problems, but it remains haunted by its past.

"We would have understood if they had been honest about their difficulties," said Rep. Tim Freeman, R-Roseburg. "You would not have legislators feeling we were misled and not told the whole truth. The honesty piece about the project going forward will mean its success or its failure."

Vernonia floods

The OWIN project was almost dead in December 2007 when rains pounded Oregon.

People in Vernonia needed rescuing as the Nehalem River flooded their town, but state emergency teams often couldn't talk to Clatsop County officials –the county's emergency communication system had been wiped out in the floods.

A month earlier, a family of California tourists, the Kims, got lost on a snowy mountain road in southern Oregon. The case made national headlines when the father froze to death before his wife and two children were rescued.

Kulongoski wanted National Guard helicopters helping with the search. But he was told it wasn't safe; too many choppers already were in the cloud-choked skies, and not all their radios could talk to one another.

Kulongoski also knew the state's radio system was so broken and outdated that technicians had to seek replacement parts on eBay.

The federal government was already requiring public safety agencies to shift to new narrowband radios by 2013. The governor wanted to use the opportunity to upgrade the state's whole system and create "interoperability," allowing radios among different agencies to communicate. Unlike cell phones, which aren't a reliable choice for emergency responders, public safety radios usually can't roam. They require interoperability to talk to systems in other areas.

Lawmakers in 2005 called for merging the radio systems of four state agencies: Oregon State Police and the departments of Corrections, Transportation and Forestry. Two years later, Kulongoski's administration floated its plan for new radio equipment and a sprawling web of about 300 microwave towers and radio relays on mountaintops across Oregon.

The $665 million price nearly killed the idea. It was just too much money for legislators. But ravaging floods and the Kim family tragedy pushed Kulongoski to revive it. To champion the plan, he turned to Lindsay Ball.

A former Oregon State Police trooper, Ball ran the OWIN project starting in November 2007 and, in an unusual setup, answered directly to the governor even though OWIN lived under the state police. Ball's salary: $171,000 a year.

Ball retired Aug. 1 after legislators, concerned about the project, pushed for its move to the Oregon Department of Transportation.

Kulongoski said Ball was the right person at the time to give the OWIN project new life, and the governor blames himself for not making the change in OWIN's leadership sooner. Fairly or not, the governor said, "Lindsay himself was becoming an issue in the OWIN debate."

The face of OWIN

Ball, now 58, started as a state police trooper in 1976, enforcing fish and wildlife laws while stationed in The Dalles and Baker City. He was later named director of the state police's Fish and Wildlife Division. In 2001, he took over a troubled Department of Fish and Wildlife and won praise for fixing the state agency's problems with candor and hard work.

When Kulongoski promoted Ball to run the Department of Administrative Services in 2006, lawmakers lauded his skills. "Lindsay Ball has developed a bit of a reputation as a turnaround artist," Sen. Betsy Johnson said during Ball's Senate confirmation.

Folksy yet intense, Ball proved to have a skilled hand in dealing with legislators, something many agency chiefs lack. Behind the scenes, Ball earned a reputation for sharp elbows, even ruthlessness, while carrying out his missions.

Ball took on the job and faced lawmakers and bureaucrats who were wary of, if not hostile to, the radio network idea.

Jeff Johnson, former chief of Tualatin Valley Fire & Rescue and chairman of the State Interoperability Executive Council, which helped launch the idea for OWIN, said Ball and his small staff took on a project far more complicated than anything state government had tried before.

"Lindsay had a size 10 job to do," Johnson said, "but he was given a size 2 boot."

Ball became the face of OWIN and a tireless salesman for the project, a voice of authority and emotional authenticity.

He talked of being left for dead in 1982 when, as a young trooper, he'd been beaten while writing a ticket on Sauvie Island. He still has his ticket book covered in his blood. His police radio, Ball said, was the only thing that saved his life.

With police and public safety officials, Ball spoke the same language and persuaded more than three dozen local agencies to sign on as partners to the OWIN system. Those partnerships gave the project a powerful constituency it had lacked. Legislators now watched Ball marshal their local sheriffs and fire chiefs to lobby for the project. Ball's zeal was infectious.

But auditors for ODOT have looked back and found the progress came at a price.

"OWIN management was trying to secure funding by focusing on the bigger picture of interoperability and saving lives," auditors wrote. "In doing so, program accountability and transparency fell to the side. As evidenced by the propagation of misinformation, OWIN lacks transparent and accountable operations."

Rosy reports



In September 2008, Ball persuaded lawmakers to begin funding OWIN's construction phase, and the most convincing thing he told them was that he had found ways to cut the project's price, from $665 million to $414 million.

Over the next year, Ball's rosy reports about partnerships and progress continued to cheer lawmakers. The news at one budget hearing in May 2009 sounded so encouraging that Sen. Joanne Verger, D-Coos Bay, praised Ball's "magic."

Ball had walked into the Capitol and convinced lawmakers he had made a quarter-billion dollars in costs vanish.

He repeatedly told them the total project cost was $414 million, a figure he warned could go up or down based on inflation or unexpected costs.

But the actual estimated cost was $486 million, according to OWIN documents.

Why the difference? Ball today says he was describing only the portion that lawmakers would pay out of the general fund, leaving out more than $70 million that would come from state highway funds.

"That's the total cost of general fund monies, not the cost of ODOT money," Ball said. "We were focused on the general fund component."

Before lawmakers, however, Ball didn't parse it that way. He repeatedly called the lower price the total cost, and his presentations always compared it with the all-inclusive $665 million figure that counted money from all sources.

And Ball didn't qualify his answer about the cost of building the network when he gave the $414 million figure to The Oregonian for a May 2009 story.

Nor did he tell lawmakers that the original $665 million cost had included an estimated $77 million to help run the system once it was built -- money left out of the total Ball spoke about.

In an interview this month, Ball said he did not intend to mislead anyone. "You're trying to illustrate that I'm being deceitful to the Legislature," he said, "and that's not true."

Undocumented savings



Ball told lawmakers that his staff had found $251 million in savings in three big ways:

Ball said partnerships with local governments would save money by sharing costs. He said OWIN staff had figured out how to redesign the system so it required fewer towers and less expensive radios. And he said that letting state employees manage the program -- and not hiring expensive private contractors to oversee construction -- would save millions more.

Today, OWIN officials can't document those savings.

The Oregonian repeatedly asked OWIN officials to produce records to show how the estimated savings were calculated. They haven't been able to do it.

Internal auditors for ODOT ran into the same dead end. "When we asked for documentation supporting estimated system costs of $414 million," auditors wrote this fall, "OWIN management was unable to provide it."

Ball said he relied on his staff to produce the figures. When asked whether he took responsibility for making claims that turned out not to be accurate, he replied, "I have not taken a hike on any of it. The person who is ultimately responsible is me."

By partnering with local agencies, Ball said OWIN would save $60 million.

The idea makes sense. If the OWIN project can share an existing tower with a county or a city, for example, that's one less tower the state has to pay for.

"The state and all of the partners save money," Ball said. "That is good for Oregon." He said the estimated savings were "calculated using the best information we had at the time."

Project officials say, for example, they will save millions by sharing federal microwave links that run along Interstate 5 and tribal radio towers along Interstate 84.

How OWIN got to its $60 million prediction is unclear. Ball said he never portrayed the savings as a guarantee. "Everything has been an estimate on this project," he said. "Everything."

Ball sometimes described the partnership savings as estimates. At other times, he asserted the savings with more certainty.

"It delivers us $60 million worth of savings," he testified before lawmakers in May 2009. Ball's PowerPoint presentation declared, "OWIN Partnerships to Date -- $60,000,000 in Value."

And he told lawmakers they could count on OWIN rolling forward $31 million from one phase of the project to another, thanks to partnerships. "The partnerships are paying off for us," he told lawmakers.

Ball said the partnership savings estimates came from Steve Noel, OWIN's statewide interoperability coordinator. In interviews, Noel said the partnership savings were both estimates and projections based on final agreements the project hoped to have with local agencies.

At Ball's direction, OWIN's budget manager Sally Porter produced a budget for lawmakers in 2009 that included the partnership savings estimates. Porter declined to be interviewed for this story. The Oregonian, under the state's public records law, obtained e-mails Porter wrote in June and July to auditors trying to document the partnership savings.

Porter wrote that though some savings can now be shown, the original $60 million claim was "nebulous."

"The partnerships were impossible to quantify defensively as savings to the state," Porter wrote June 22. When auditors pressed for more detail, Porter wrote July 8: "I cannot justify the savings by partnerships in the previous budget."

"To the extent the estimated savings are presented as accomplished fact," auditors concluded in their final report, "they amount to a misrepresentation of financial and partnership conditions."

Private consultants



The second big savings Ball claimed came from redesigning the radio network, saving $102 million.

The Oregonian asked for documentation of this claim. OWIN officials have not been able to produce any. ODOT's auditors also came up empty-handed during their search.

OWIN officials don't yet know the full cost of radios and are in negotiations with Florida-based Harris Corp. to buy radio equipment.

Ball said he didn't remember how that estimate was calculated but said that Don Pfohl, OWIN's technology manager, provided the numbers. Pfohl told The Oregonian that he remembers working on reconfiguring the project but doesn't recall calculating any estimates of savings.

Finally, Ball claimed the project could save $45 million by having state employees manage the project instead of hiring contractors.

OWIN had promised a new budget by November 2009 to prove it could document the savings. Auditors wrote that the project didn't produce evidence of the savings.

About $25 million to $50 million of the project's increased costs will come from hiring private contractors. Records obtained by The Oregonian show that any savings OWIN might have gained are being spent on the high-priced consultants Ball told legislators he hoped to avoid.

More

Records show that OWIN is paying $2.8 million a year to keep 12 private consultants on staff to provide project management and other oversight work. The consultants work for two companies, Legacy Wireless Services Inc. of Clackamas and McLean, Va.-based Science Applications International Corp. OWIN is paying most between $226,000 and $303,000 a year for each consultant.

Tom Lauer,

ODOT

's manager of major projects, said the state hasn't been able to hire qualified employees fast enough to fill necessary jobs. And he said OWIN can't pay salaries high enough to lure communications engineers and managers -- currently in high demand -- that the project needs.

Still, ODOT's management has given the OWIN project transparency it didn't have before. And ODOT officials have looked hard at the costs and recalculated a new estimate: $586 million.

That's essentially the project's original construction price from 2007, minus the operations costs, when lawmakers rejected it as too expensive.

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