Investigation by Kyle Abraham, Oregon State Lottery (July-August 2016) This memorandum documents a factual summary resulting from the investigation by Kyle Abraham of Barran Liebman LLP into allegations by Roland Iparraguirre ("Iparraguirre"). I. INTRODUCTION On Monday, April 25, 2016, Roberts placed Iparraguirre on paid administrative leave. On April 29, 2016, the Oregon Department of Justice, on behalf of the Oregon Lottery, received a letter from Collins alleging that Iparraguirre was placed on administrative leave as retaliation for Iparraguirre raising concerns about Roberts' improper actions concerning the Lottery Commissioners and the Governor's Office. II. BACKGROUND INFORMATION ON KEY INDIVIDUALS Iparraguirre has been employed by the Oregon Lottery since December 2, 2013. Iparraguirre was recruited by former Governor Kitzhaber's staff; specifically, General Counsel Liani Reeves of the Governor's Office. Ms. Reeves arranged for a meeting between Roberts and Iparraguirre. Roberts agreed to appoint Iparraguirre to serve as the Deputy Director for the Lottery, and Iparraguirre was approved by the Lottery Commissioners. As the Deputy Director, Iparraguirre's first-level supervisor was Roberts. Iparraguirre's job duties include assisting the Director on the day-to-day operations of the Lottery. Iparraguirre described his position as the "vice principal" of the Oregon Lottery. Prior to joining the Lottery, Iparraguirre worked as a Deputy City Attorney for the City of Portland. For much of his employment with the Lottery, Iparraguirre reported having a very good relationship with Roberts. However, Iparraguirre reported that he observed odd behavior in Roberts beginning around October or November of 2015. Roberts served as the Director of the Oregon Lottery from December 2, 2013 until April 26, 2016. During that time, Roberts served as Iparraguirre's first-level supervisor. Roberts also served as the first-level supervisor for a number of other executives at the Lottery, including Janell Simmons. Prior to joining the Lottery, Roberts served as the Executive Director of Lane Metro Partnership and as the Commissioner for Oregon's Bureau of Labor and Industries. Simmons is the Chief Human Resource Officer for the Oregon Lottery. Simmons was initially hired as a Human Resource Manager at the Lottery in April 2014. In June 2014, the former Chief Human Resource Officer was let go, and Simmons served as the interim Chief Human Resource Officer. After approximately three months, Simmons was permanently appointed to the position. Until his departure, Roberts was Simmons' first-level supervisor. Prior to joining the Lottery, Simmons had worked as a Human
Page 2 Resource professional in the manufacturing industry for a number of years. Iparraguirre reported that he has a lot of respect for Janell Simmons. III. SUMMARY OF EVIDENCE COLLECTED The week of February 22, 2016, Roberts, Iparraguirre and Simmons met several times and discussed removing Stacy Shaw from her position as Assistant Director for Sales, Marketing and Retail Services. Roberts initially thought about terminating Shaw's employment and replacing her with Farshad Allahdadi, then the Retail Contracts Manager. Iparraguirre was in agreement with Roberts on the decision to remove Shaw; however, Iparraguirre disagreed with Roberts on the decision to appoint Allahdadi to the position. Instead, Iparraguirre encouraged Roberts to appoint an interim Assistant Director and conduct a national search for Shaw's permanent replacement. On Monday, February 29, 2016, Roberts sent an email to all Lottery employees in which Roberts informed the employees of his decision to re-assign Stacy Shaw from Assistant Director for Sales, Marketing and Retail Services to the position of Responsible Gambling Consultant, and to appoint Farshad Allahdadi as the interim Assistant Director for Sales, Marketing and Retail Services. In the evening of February 29, 2016, Iparraguirre and several other Lottery employees attended a Lottery-sponsored event in Portland. Commissioner Wheat also attended the event. Iparraguirre and Wheat talked about Roberts' decision to appoint Allahdadi to the position. Iparraguirre told Wheat that he would not appoint Allahdadi, but would have appointed either Art Kiuttu or Mark Strickler as the interim Assistant Director and then conduct a national search. Subsequently, there were several Commissioners who raised concerns about the appointment of Allahdadi, especially after they received two anonymous emails on the subject. The emails listed concerns about Allahdadi's qualifications for the position of Assistant Director. The second anonymous email, dated March 10, 2016, stated, "We feel that the process has been short of the Lottery's standards of transparency and integrity. This should raise red flags for you, and if you have questions about any of this, you should talk to Major Craig Durbin, DD Iparraguirre, Kathy Ortega, Janell Simmons, Art Kiuttu, Lyndsey Hambleton, Phil Harpster, internal audit, IT, etc." On March 14, 2016, Roberts talked with Commissioners Liz Carle and Raul Valdivia about the anonymous emails. Carle told Roberts that she was going to speak with the employees listed by name in the anonymous email. Between March 15 and 28, 2016, Carle did speak with these employees, and Roberts knew Carle was going to talk with Durbin, Ortega, Simmons, Kiuttu, Hambleton, Harpster, and Iparraguirre. After the employee interviews, on March 31, 2016, Carle called Roberts to talk about the appointment of Allahdadi. During the telephone call, Roberts informed Carle he decided to withdraw Allahdadi's appointment to an Assistant Director level position, but he would promote Allahdadi to a Chief level position. On April 4, 2016, Roberts sent an email to the Lottery employees and Commissioners stating his decision to promote Allahdadi.
Page 3 On April 7, 2016, Iparraguirre received an email from Kiuttu, wherein Kiuttu submitted his resignation/retirement. The resignation of Kiuttu was also an area of disagreement between Iparraguirre and Roberts. On April 14, 2016, Kiuttu sent another email stating the effective date of his resignation would be July 1, 2016. Iparraguirre spoke with Roberts about Kiuttu's resignation. In his interview with me, Iparraguirre claims Roberts stated Kiuttu "had been causing problems with Liz [Commissioner Carle] and Mary [Commissioner Wheat]." Roberts does not recall referencing Kiuttu's contact with Commissioners Carle or Wheat; however, Roberts acknowledged that he was aware that Kiuttu was one of the individuals listed in the anonymous email. Iparraguirre claimed that Roberts wanted Kiuttu to resign before July 1, and Kiuttu told Iparraguirre that Roberts wanted Kiuttu's last day to be May 1, 2016. It became clear to Roberts that there was a problem between Allahdadi and Kiuttu after Allahdadi was promoted to the Chief of Sales and Retail Contracts. Roberts also stated there were problems with the working relationship between Kiuttu and Allahdadi, and Kiuttu leaving the Lottery would resolve that conflict. However, Roberts stated Kiuttu had been a long-term Lottery employee and that he wanted to treat him fairly, and one way to treat Kiuttu fairly was to pay him a severance for the two months between May 1 and July 1, 2016. Simmons confirmed that she discussed this option with Roberts. However, Iparraguirre reported to me that he was concerned that moving up Kiuttu's effective resignation date would expose the Lottery to liability for a claim of unlawful retaliation, based on what Iparraguirre assumed was Kiuttu's protected activity of talking with Lottery Commissioners. On Monday, April 18, 2016, Roberts convened a morning meeting with Kiuttu, Allahdadi (Kiuttu's first-level supervisor), Iparraguirre and Simmons. According to Roberts, the purpose of the meeting was to determine whether Kiuttu and Allahdadi could work together, and if not then to clarify the timeline of Kiuttu's resignation. Roberts offered Kiuttu the option of leaving at the end of April 2016, and receiving pay through June 30, 2016, or Kiuttu could work in other areas at the Lottery for the next two months. Roberts concluded the meeting by asking Kiuttu to think about those options. After that meeting, Iparraguirre called Simmons into his office for a subsequent meeting, and the two had several conversations throughout the remainder of the day. According to Iparraguirre, Simmons mentioned that she was very stressed out because Roberts' irrational decisionmaking could jeopardize her job. Iparraguirre also stated that Simmons told him about Roberts' BOLI complaint on behalf of Allahdadi and Roberts' inappropriate comments to Syed Hussain regarding his upcoming trip to Pakistan. According to Simmons, Iparraguirre said it would be retaliation to move up Kiuttu's retirement to the end of April. Simmons stated she told Iparraguirre there is nothing illegal about moving up Kiuttu's retirement date, and that she told Roberts the same. Simmons stated Iparraguirre was not happy that she provided that advice to Roberts. Simmons reported that the discussion moved to Iparraguirre claiming the Governor's Office was going to take over, and they are going to look at the advice given. Simmons felt like she was going to be fired because she told Roberts it was not illegal to move up Kiuttu's retirement date.
Page 4 In his interview, Iparraguirre reported that based on what he learned in his meeting with Simmons, he became concerned about potential illegal or unethical actions. On April 18, 2016, Iparraguirre talked with Commissioner Carle about the treatment of Kiuttu. Commissioner Carle and Iparraguirre reported that Iparraguirre shared his feeling that Roberts' actions of moving up Kiuttu's resignation date may be an act of illegal retaliation because Kiuttu talked with the Commissioners. Iparraguirre also determined he needed to inform the Governor's Office of his concerns about Roberts' conduct that might generate liability for or embarrassment to the State. At the end of the day on April 18, 2016, Iparraguirre emailed and left a voicemail for Heidi Moawad, Public Safety Policy Advisor in the Governor's Office, stating he needed to speak with her. The next day, Tuesday, April 19, 2016, Iparraguirre left for an out-of-town conference, and was scheduled to be out for the rest of the week, through April 22, 2016. On that same day, April 19, Iparraguirre talked with members of the Governor's Office, including Moawad and Ben Souede, General Counsel, Office of Governor Kate Brown. Iparraguirre reported his belief that Roberts had discriminated against Kiuttu, and that Roberts' actions caused stress to Simmons. On the same morning, Simmons told Roberts her account of the meeting with Iparraguirre. Roberts felt this was unconscionable behavior from Iparraguirre, and that it was unacceptable behavior. Simmons asked Roberts whether she should contact the Governor's Office, and he encouraged her to do so. Just after 5:00pm, Simmons and Moawad talked on the phone. During the call, Moawad informed Simmons that two other Lottery employees called her on the same day, but Moawad did not inform Simmons of the identity of those employees. On April 20, 2016, Simmons also spoke with Craig Durbin, Assistant Director for Security, about her meeting with Iparraguirre. However, Simmons did not speak with Roberts on April 20, 2016. In fact, Roberts was not in the office that day - he was in Bend, Oregon. With Iparraguirre out of the office for the week, Roberts had time to decide on the appropriate course of action. Roberts learned that Simmons told Durbin and Moawad about her meeting with Iparraguirre. Roberts decided he would place Iparraguirre on paid administrative leave effective Monday, April 25, 2016, when Iparraguirre was scheduled to return to work. Roberts also identified an individual, former Chief Justice Paul De Muniz, to investigate what had transpired in the April 18 meeting between Simmons and Iparraguirre before taking final action. On Thursday, April 21, 2016, Roberts shared his decision with Durbin, and communicated to Durbin that Roberts felt that, if true, it was unconscionable the way Iparraguirre treated Simmons in their April 18 meeting. On that same day, Roberts also informed Simmons of his decision. There was a Lottery Commission meeting scheduled for Friday, April 22, 2016. After the meeting, Roberts spoke with Commission Chair, MardiLyn Saathoff. Chair Saathoff documented her recollection of the conversation with Roberts in an email. Chair Saathoff remembered Roberts stated, "he found out from sources within the Lottery that Roland had been undermining Jack's position as director by causing disruption within the Lottery among employees and that he believed Roland may have
Page 5 been the source of misinformation provided about events and people to at least one of the commissioners related to the recent appointment to sales and marketing..." In his interview, Roberts acknowledged that Iparraguirre was listed on the anonymous email, along with the other employees, as someone who Carle would talk too. According to Roberts, he told Chair Saathoff what he learned from Simmons regarding Iparraguirre's actions at the April 18 meeting, and Roberts said this conduct from Iparraguirre undermined his confidence and trust in Iparraguirre. Roberts went on to say that he was going to put Iparraguirre on administrative leave. On Monday, April 25, 2016, Roberts met with Iparraguirre in the morning. Roberts intended to place Iparraguirre on paid administrative leave pending the outcome of the investigation about the meeting between Simmons and Iparraguirre. Roberts submitted a letter to Lisa Umscheid, which provided his response to Iparraguirre's allegations. In his letter, Roberts stated that he carefully prepared his remarks to Iparraguirre, which were as follows: "When I first heard of your interactions with Janell last week which left her in tears, I intended to call you in as soon as you got back and give you a chance to present your side of the story. However, when I subsequently learned that she had also shared her account of the meeting with Major Durbin and Heidi Moawad, I decided that I need to place you on paid administrative leave immediately so this can be investigated." Iparraguirre asked for more details about the accusation against him; however, Roberts declined to provide details. Roberts reported that he was unaware that Iparraguirre had made any contact with the Governor's Office prior to the morning of Monday, April 25, 2016. Later in the day on Monday, April 25, 2016, Roberts received a call from Kristen Leonard, Chief of Staff for the Governor's Office. Ms. Leonard asked Roberts to restore Iparraguirre to his position. At that point, Roberts told Ms. Leonard about Simmons' version of her meeting with Iparraguirre, which formed Roberts' stated basis for putting Iparraguirre on paid administrative leave pending the outcome of an investigation yet to begin.