How two Oregonian reporters found ‘phony documents’ in the records of a sprawling state program

It started with a tip.

In the fall of 2014, when Oregon officials and former Gov. John Kitzhaber were cheerleading the completion of a multimillion dollar effort to bring solar power to state university campuses, reporter Jeffrey Manning of The Oregonian learned details of the project could also use a little sunlight.

During a coffeehouse meeting, a source in the solar industry urged him to do some digging into the project, which involved around $12 million in tax credits and had been pitched as a job-creator that would bolster the local economy. After he started poking around, Manning recalled in a recent interview, he found something interesting: The jobs in solar manufacturing had been done locally—but behind bars, with prison labor. 

That was enough for a hook. But it seemed like there was even more to the story— and while Manning focuses on corporate investigations and white collar crime, energy isn’t really his beat. He wanted someone with expertise about the state’s tax credit program, which is the largest of its kind in the country. 

Enter fellow Oregonian reporter Ted Sickinger, who covers taxes and budgets and who had called out the tax credit program in print before for questionable practices. The two had never partnered very closely on a story, but they immediately started filing separate open records requests for documents related to the solar project.

Sickinger had in mind one set of records in particular. In order for the project to be eligible for a certain tax credit, he knew, the project would have had to prove it was under construction by a certain date.

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“I knew that was a threshold question for the project and I knew exactly what I’d be looking for because I’ve looked at these things for a long time,” he says. “So we requested the documentation, and I went through the file. And all there were were these two receipts demonstrating that they had been under construction, and on their face they looked to be questionable.”

One of those questionable documents was an invoice showing that work had begun in time to qualify for the credit— but it came from a company that doesn’t exist. All of a sudden a story about solar panels being assembled by federal prisoners turned into something even bigger. Sickinger said it took him one afternoon to undercover the smoking gun. 

Manning admits to being skeptical at first that that they were really looking at forged records in the files of a sprawling state program. “But Ted proved that the one invoice was from a company that didn’t exist,” he says. “And it was fantastic, it was really exciting.”

After months of reporting, the pair produced a Feb. 27, 2015 investigation under the headline, “Oregon signature solar project built on foundation of false hopes and falsehoods.”

This was the nut:

Interviews and an examination of thousands of pages of documents show that state officials wrongly awarded millions in state tax credits, turning a blind eye to phony documents. The project also was dogged by an international trade war, a bitter corporate rivalry and a stunning twist that traded high-paid Oregon jobs for prison labor at 93 cents an hour./p>

(The news wasn’t all grim, the paper acknowledged up high: The solar arrays were built, and were “generating even more power than expected.”)

Fast forward 18 months, and the newspaper’s investigation has had a clear impact.

The state now has a new governor who, within a week of The Oregonian‘s report, called for an investigation into the project and later asked the legislature to move troubled incentive programs managed by the state Energy Department under different agencies. The CFO of the energy department resigned. The FBI joined a state probe into the university solar project. A group of GOP lawmakers asked the attorney general to investigate state energy tax credits. Leaders in the Oregon House and Senate launched joint oversight committees to explore restructuring the energy department or abolishing it altogether. A full-blown forensic audit of the state’s tax credit program— called the Business Energy Tax Credit, or BETC— revealed more than a quarter of its large tax credits “seemed improper, violated statutes or rules, or exhibited suspicious activity.” Several dozen have been referred to the state justice department.

And, just two weeks ago, the main consultant to the solar project was indicted on forgery charges, accused, The Oregonian reports, “of creating a phony invoice from a fictional subcontractor that was pivotal in getting nearly $12 million in tax credits from the Oregon Department of Energy.” (The contractor’s attorney doesn’t dispute the invoice was “made up,” but says his client is innocent, and the invoice was given to his client by someone else involved in the project.)

Days after the announcement of the charges, the newspaper reported the State of Oregon is suing the project’s lead consultant in hopes of getting $11.8 million in tax credits back.

All in all, it was a series of big payoffs for a newspaper that, like plenty of others, has much fewer resources and staff to do this kind of watchdog work.

“We’re not immune to all the financial pressures— it’s a much smaller newsroom than it used to be,” Manning says. “But we have the right leadership in place that recognizes the value of accountability and enterprise journalism. We spent a lot of time on this story.”

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Corey Hutchins is CJR’s correspondent based in Colorado, where he is also a journalist for The Colorado Independent. A former alt-weekly reporter in South Carolina, he was twice named journalist of the year in the weekly division by the SC Press Association. Hutchins recently worked on the State Integrity In vestigation at the Center for Public Integrity and he has contributed to Slate, The Nation, The Washington Post, and others. Follow him on Twitter @coreyhutchins or email him at coreyhutchins@gmail.com.