The state ethics commission voted unanimously Friday to further investigate whether questionable spending on local meals and travel by the former head of Washington County’s sewer agency violated state ethics law.
The vote came after the Oregon Government Ethics Commission opened a preliminary review into former Clean Water Services CEO Diane Taniguchi-Dennis in March after it received at least 10 complaints following an investigation by The Oregonian/OregonLive that uncovered lavish travel spending and sky-high food expenses at the sewer agency. A noteworthy amount of that spending was by Taniguchi-Dennis, the news organization found.
The commission’s decision to launch an investigation into Taniguchi-Dennis does not mean it will ultimately find that she violated state ethics law, only that it believes that preliminary evidence warrants further investigation. The investigation could take up to six months, at which point the commission could find a violation occurred, seek a settlement or dismiss the case entirely.
“There appears to be a substantial objective basis to believe that Diane Taniguchi-Dennis may have violated the prohibited use of office and the conflict of interest statutes and the commission should investigate accordingly,” Investigator Andrew McIntyre told commissioners before the vote Friday, echoing language the agency typically uses when launching a full investigation.
Bob Steringer, a lawyer for Taniguchi-Dennis, told the commission he had submitted additional information after McIntyre’s review that he believes shows that the allegations against his client should be dismissed. Several commissioners said that the new information Steringer provided was helpful but that investigators needed time to review it.
The Oregonian/OregonLive reported in March that executives from Clean Water Services, the state’s second-largest sewer agency, stayed in luxury resorts during annual business trips to Hawaii that cost tens of thousands of dollars and that the agency paid $440,000 on local and travel meals over five years – four times more than its two metro area counterparts spent on food during that time combined.
Clean Water Services spent at least $5,100 in under two years on meals Taniguchi-Dennis shared with some of her top executives. The agency was unable to provide the newsroom with complete records of Taniguchi-Dennis’ food spending.
Taniguchi-Dennis was also among several sewer executives who traveled to Hawaii for business trips that cost at least $91,000 over three years, with costs covered by an insurance subsidiary of the agency. She and others stayed at a rotating cast of five-star resorts that hosted annual insurance conferences, but Taniguchi-Dennis’ trips typically cost more than others. Her combined premium lodging and first-class airfare for a 2023 insurance conference on the Big Island, for example, cost nearly $8,400. The agency said the trip was “booked as a reasonable accommodation under the Americans with Disabilities Act and Oregon law.”
McIntyre said Taniguchi-Dennis’ lodging expenses warranted further review.
“Based on the per diem rate at the time and what appeared to be other available lodging in the area, it also appears that the lodging expenses for Diane may have been between two to three times more than other available lodging in 2022 and five to six times more than other available lodging in 2023,” he told the commission.
Taniguchi-Dennis told commissioners Friday that she booked her specific hotel room in 2023 because it was the only one the conference hotel could guarantee her would have a roll-in shower. That hotel advertises accessible rooms at all price points, not just in Gold rooms or suites, The Oregonian/OregonLive previously reported.
Steringer also defended Taniguchi-Dennis’ spending on lodging, saying that it was acceptable under the agency’s travel policy for employees to stay onsite at conferences and that the policy allowed for exceptions to per-night spending rules in certain cases, such as Taniguchi-Dennis’ request for a reasonable accommodation for “mobility issues.”
McIntyre’s preliminary review of the travel spending focused only on trips in 2022 and 2023 because he said records for 2024 were not provided to him. (Records released by Clean Water Services last month to The Oregonian/OregonLive show that Taniguchi-Dennis traveled to Kauai for an insurance conference last year but the agency has not provided detailed receipts or responded to questions about the expenses.)
McIntyre’s said Taniguchi-Dennis flew first class to Hawaii in both years he reviewed, but that he only was provided information about a possible reasonable accommodation being needed for the first-class travel in 2023.
Steringer said that Washington County Chair Kathryn Harrington, who also serves as the chair of the sewer board, approved Taniguchi-Dennis’ first-class travel. Earlier this year, the board also approved a new contract for Taniguchi-Dennis that made it responsible for providing her with a wheelchair or scooter when she traveled and paying for at least business class airfare.
McIntyre’s review also found that Taniguchi-Dennis may have used her position as CEO to financially benefit herself by regularly charging Clean Water Services for personal local meals that may not have been included in her compensation package or otherwise authorized by the agency’s policies.
He noted that records of local meal expenses that he was provided were incomplete and said further investigation was needed to determine whether the food spending fell within Taniguchi-Dennis’ compensation package. He noted that as CEO, Taniguchi-Dennis would have had the authority to approve expenses that may not have otherwise been authorized.
In response, Taniguchi-Dennis said that “Clean Water Services acknowledges that business needs to occur over lunch and breakfast and other times and those are considered district business expenses and eligible for reimbursement.” However, reporting by The Oregonian/OregonLive found that the agency did not implement a local food policy until January, two weeks after the news organization asked them questions about the spending. That policy now generally prohibits executives from being reimbursed for local meals.
McIntyre also said that Taniguchi-Dennis should have disclosed a conflict of interest every time she took an action, such as approving local meal expenses for herself, that could have constituted a personal financial benefit. He said he had not been provided with any information to this point on whether she did that.
Steringer said the expenses would have been subject to final approval by the finance department and Taniguchi-Dennis couldn’t have approved them on her own.
In April, Washington County’s sewer board adopted new oversight measures for the agency and required Taniguchi-Dennis to work with it “on a plan to restore the trust of the community, local government partners, employees, and the board.” But the board later chided her plan of action and Taniguchi-Dennis announced in May that she would resign, effective June 6.
Earlier this week, the sewer board, which is made up solely of members of the Washington County Board of Commissioners, approved a severance agreement for Taniguchi-Dennis that will provide her with a one-time payout of $121,861. That represents two months of salary and enough money to cover two years of medical insurance.
Rick Shanley, the agency’s chief engineer and water technology officer, is serving as the agency’s acting chief executive officer/general manager.
— Jamie Goldberg oversees The Oregonian/OregonLive’s politics, education and homelessness coverage. She can be reached at[email protected]or 503-221-8228. You can find her on X at@jamiebgoldbergor Bluesky at @jamiebgoldberg.bsky.social.
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