The Road to Hales

Not many people remember the great snout-house debate of 1999. 

But Jeff Fish does.

His company, Fish Construction NW Inc., has built homes throughout the Portland area for 40 years. Like many homebuilders, he doesn't like government telling him how to build his houses.

But in July 1999, the Portland City Council, on largely aesthetic grounds, unanimously voted to prohibit "snout houses"—uninviting, suburban-style homes that greet passersby not with front doors but a protruding, piggish two-car garage.

Fish described Hales for the more than 1.1 million readers of The New York Times, which wrote about the snout-house debate. 

“He’s a traitor,” Fish said. 

Fast-forward 13 years.

Hales—out of government for a decade—is running for Portland mayor. And Fish recently shocked his fellow homebuilders by endorsing the man he once denounced.

"To be honest with you," Fish tells WW, "I don't remember all the things I was angry with Charlie about back then. I'm supporting him now."

Fish is one name on a long list of former Hales adversaries who have put aside their past problems with a candidate who is treating the mayor's race like a comeback tour.

Hales, 56, has an old-fashioned approach to politics that befits his personal style. He looks more comfortable in a tie than in a T-shirt, still wears his college signet ring, favors PCs over Macs and enjoys sailing.

His chief mayoral opponents are easier to pigeonhole. State Rep. Jefferson Smith (D-East Portland) is running as the young intellectual. Businesswoman Eileen Brady is the hippie-capitalist hybrid. 

Hales is running on his experience—a decade in City Hall when Portland was riding high economically and the city seemed to work a lot better. 

In those flush times, from 1993 to 2002, Hales championed the Portland streetcar, built community centers and passed a big parks levy. He helped kill a proposed on-ramp to Interstate 5 from Southeast Water Avenue that business leaders wanted, and he tangled with the firefighters' union to diversify the fire bureau. 

"All you've got to do is ride around this city and you can see with your own eyes all that he's done," says T.J. Browning, a Hales volunteer who worked against him during Hales' first campaign in 1992. "You can see Charlie Hales' footprints everywhere."

Hales would say he's a pragmatist with a knack for turning enemies into allies. 

But it's not that simple.

Hales is a shape-shifter who has adapted to whatever political environment he's in. 

Before he embraced density and smart planning, he supported a Washington County highway proposal that would have plowed through farmlands and seeded sprawl.

Before he touted himself as a neighborhood tree planter, he advocated allowing developers to clear-cut lots and suggested people who didn't like it should move to the country.

Before he was a Democrat, he was a Republican.

Former Mayor Vera Katz, who served with Hales for 10 years and has endorsed him this year, says she never could pinpoint Hales' core political beliefs. "In the city, politically, there was no reason to do that," she says.

Jon Chandler, whom Hales hired at the homebuilders' association in 1990 and is now that organization's chief executive, has privately compared Hales to one of the pod people in Invasion of the Body Snatchers—a replica of himself, created overnight, identical on the outside, alien on the inside.

"I won't deny saying that," Chandler says.

All the same, he supports Hales and excuses the candidate's shifting views. "If you're a lobbyist, you have the luxury of representing your client," Chandler says of Hales. "If you're an elected official, you don't have that same luxury. He's a sincere man."

Others are less forgiving. Commissioner Randy Leonard—a fierce adversary of Hales' since the mid-1990s, when Leonard ran the firefighters' union and Hales ran the fire bureau—says Hales took too much credit for team successes and rarely admitted to mistakes.

"If you're the mayor, that can be a crippling character flaw," says Leonard, who endorsed Smith. Leonard calls Hales "an opportunist."

Hales is also a classic revolving-door politician. He set fundraising records in his 2000 re-election campaign with donations from city contractors. Two years later, he abandoned his City Council seat to work for a city contractor trying to break into the streetcar business.

He's back, portraying himself as a concerned citizen—"I'm a Portland guy," he likes to say. But he only recently returned to the city, after living in Washington state, where he avoided paying tens of thousands in Oregon income taxes. At the same time, he kept voting in Oregon—possibly violating state elections law by voting as a nonresident. (See "State of Charlie" on page 2.)

Hales says he's committed to Portland, and his ethics are unimpeachable.

"People need to know there'll never be that terrible day where you open the newspaper and say, 'Oh no!' That will not come with me," Hales says. "People may not always agree with me. Of course that's the case, if you do anything at all in public. There will never be a day when anyone has a reason to question my integrity."

His mother, Carol Hales, was a homemaker. His father, Alfred Ross Hales Jr., was a structural engineer for the U.S. Navy, designing barracks, runways and harbors.

Hales grew up virtually as an only child—his two siblings were much older than him. At Thomas Edison High School in Alexandria, Hales rigged lighting for the drama club, played first-chair baritone horn, and built a glass-crushing machine at home as part of a bottle-recycling fundraiser for band uniforms.

He was also mischievous—within certain limits. When his brother, Bud, got married, the newlyweds started the engine of their getaway car only to hear a loud bang. Bud saw Charlie rolling on the ground in laughter. He had rigged a smoke bomb that disabled the spark plugs.

"We probably broke some law," Charlie Hales jokes.

But he didn't get in trouble. "A policeman helped him wire it," Bud Hales recalls.

At the University of Virginia in 1975, Hales joined a club that booked campus entertainment and helped bring two notorious Watergate figures to campus, E. Howard Hunt and John Dean. Dean's UVA speech was his first public appearance following his release from jail for crimes committed while serving as White House counsel to President Richard Nixon.

Hales graduated from UVA with a bachelor's degree in political theory in 1979. That summer, the Haleses moved to Portland. Hales says they were attracted by the state's spirit of open-minded progressivism. One of their three children, Gavin, repeats family lore about the move: 

"My mom ended up reading some article that said because of the mica in Portland sidewalks, the sidewalks sparkled," he says. "That was a selling point for her."

In Oregon, Hales first went to work as a lobbyist. "I was never in a position to try and sell a proposition that I didn't agree with," he says.

Hales first worked for the Oregon Mobile Home Park Association, a job he now omits from his résumé.

Hales represented the mobile-home park owners. In January 1980, he attacked a state program mandating inspections at mobile-home parks, where density sometimes created sewer and water-quality problems.

"A mobile home doesn't need reinspection any more than a regular home does," Hales was quoted saying in The Oregonian. "This is a holdover from the days when the tenants of mobile-home parks were poor and transient. This is not the case anymore." In 1982, Hales called mobile homes a “progressive” form of housing. 

In 1984, Hales went to work for a bigger client: the Home Builders Association of Metropolitan Portland.

The homebuilders opposed limits on where and how they could put subdivisions, and what kind of homes they could build. They also fought system-development fees, often charged by local governments to fund new streets and water and sewer services.

In 1987, Hales lobbied for a bill in the Legislature that would have shifted development charges from builders to homebuyers, who would have to pay off the fees over 10 years. Critics said it wasn't fair to homeowners or local governments. Hales had a different view. "The system we have now stinks," he said.

Today, Hales says the bill was an "initial skirmish" for the 1991 statute passed by the Legislature that still regulates how local governments can levy such charges—a compromise Hales says he is "comfortable with."

One of the most controversial stances Hales took as the homebuilders' lobbyist was opposing a tree-preservation ordinance in Beaverton. The city was trying to prevent developers from cutting down large or historic trees without permission.

"If people want to live among trees," Hales said in 1988, "they can move outside the urban growth boundaries."

Two years later, the controversy unsettled, Hales was described in The Oregonian as “Paul Bunyan himself, sap still glistening on the blade of his ax.” 

But the same story described Hales as conciliatory and persuasive: He swayed a meeting by acknowledging some developers go too far in cutting down trees. He cut a deal to save some trees by exempting developers from other rules.

Hales tells WW he doesn't recall the controversy over the tree-preservation ordinance.

By 1990, Hales had his eye on running for office. He switched his voting registration from Republican to non-affiliated (and, in 1998, to Democrat).

In 1992, he announced he would challenge Portland City Commissioner Dick Bogle, who had been politically weakened by scandals involving expense accounts and a sex-harassment claim.

Also in the race was former TV newsman Chuck Dimond. Dimond, who supports Brady in this mayoral race, says he was troubled that Hales kept lobbying for homebuilders while running for office. In a debate, he asked Hales about the Beaverton tree ordinance. 

"He came back with a statement: 'That was then and this is now,'" Dimond recalls. "He brought a kind of situational perspective to things. It wasn't based on core political beliefs."

Hales, though, was the long-shot candidate. He overcame it with a talent for raising money and by embracing street-level politics. He opened a storefront campaign office and knocked on thousands of doors—the same strategy he's using today.

And it helped that Hales was an excellent public speaker. Many people expected Dimond and Bogle (who was also a TV reporter) to shine during an April Portland City Club debate, but it was a turning point for Hales.

Dimond, grandstanding, declared if elected he would turn down the perk of a city car and drive himself to work. He asked Bogle and Hales to join in his pledge.

Hales' response won over the crowd: "Chuck, I'm amazed you want to drive from your home in Irvington to downtown. Why don't you ride the bus?"

(After Hales was elected, WW reported that he took the bus three days a week.)

He surprised critics by shaking off the image of a homebuilders' shill by emphasizing planning, density and alternative transportation. In his first year, Hales was the swing vote in opposition to a new Interstate 5 on-ramp from Southeast Water Avenue in the central eastside industrial district.

Business owners there wanted the on-ramp, while real-estate developers, who had visions of a Pearl District-esque transformation for that part of town, opposed it. 

Supporters, such as John Bradshaw, owner of Portland Transmission Warehouse on Southeast Hawthorne Boulevard, felt betrayed. "It still gives me heartburn," says Bradshaw, who is supporting Brady for mayor. 

Hales says he was always up front with Bradshaw and other supporters of the project. “No good deed goes unpunished,” Hales says. 

Hales also made enemies in the Portland Firefighters Association, then led by Leonard, who is retiring from the City Council after 10 years.

Hales takes credit for diversifying a bureau famous for being clannish. In 1994, WW reported that the Portland Fire Bureau was 95 percent white and male, compared to 70 percent in Seattle. 

Hales appointed a new chief, Robert Wall, to improve that number. The union says its fight with Hales was less about diversity than preserving the union's staffing levels and work rules—and avoiding reverse-discrimination lawsuits. The dispute was bitter. 

"Last time I checked, Charlie Hales was an elected fire commissioner, not a fire god," Leonard told WW at the time.

Today, Leonard says he and the union deserve recognition for promoting an apprenticeship program aimed at improving diversity, which Hales eventually voted for. 

But Hales' most visible legacy is the Portland streetcar, which opened in 2001 after an 11-year planning and fundraising process first championed by Blumenauer.

Hales tells WW the initial idea came from a private engineering consultant, Roger Shiels, who was inspired during a trip to Europe.

Shiels did not return a message from WW. His firm, Shiels Obletz Johnsen, has won more than $2.3 million in contracts to build and operate the streetcar, and he has donated $2,500 to Hales' mayoral campaign. Another streetcar contractor, Stacy and Witbeck, donated $25,000. 

Blumenauer left for Congress in 1996, and Hales took over as City Hall's streetcar evangelist.

Hales presented the downtown streetcar plan at a transportation summit at Benson High School in 1997. A streetcar line running from Legacy Good Samaritan Hospital to Portland State University opened four years later. Hales earned the nickname "Choo-Choo Charlie."

In 2000, Hales ran for a third term and broke fundraising records for a City Council primary, collecting $286,000, largely from streetcar companies and development firms that benefited from the new line.

Once re-elected, Hales drifted away from the job and resigned in 2002. Records show he was absent or on vacation often during his last two years in office. At his last council session on May 30, colleagues presented him with a bouquet of roses, a model train and a lifetime streetcar pass.

"I didn't quite understand why he left," says former Mayor Katz. "I guess he wanted to make some more money."

Hales quickly spun through the revolving door, going to work for HDR Inc. as a "transit-planning principal." He traveled the country trying to convince other cities to build streetcars like Portland's, and helping with design once they'd agreed to hire HDR for the job.

Hales says he made the switch because he'd accomplished much of what he set out to do, and he needed to make more money to put three kids through college. 

He also cites personal reasons: Hales and his first wife, Haywood, had divorced in 2000. He began dating Nancy Sourek, then executive director of the Community Foundation for Southwest Washington. They married in 2004, and Hales moved into her house in Stevenson, Wash.

He spread his streetcar message around the country. In Fort Worth, Texas, he told local officials in 2010 that "for every dollar invested by the city, $4 in development will occur, which will lead to higher revenue for the city."

He pitched streetcar plans in St. Louis, Miami, Minneapolis and Kansas City, Mo. Key to Hales' pitch to all these governments is the availability of federal money. 

The feds, Hales told officials in Salt Lake City in 2010, were their "new best friend." He added, according to the Salt Lake Tribune, "They seem to have a habit of trying to find a way to fund streetcar projects."

That money often came through a special federal grant program, created by Hales' former City Council colleague, Rep. Earl Blumenauer.

Hales' work has created a potential conflict of interest. His wife runs a program at Portland State University called First Stop Portland that brings delegations from other cities to tour Portland's urban-design marvels, including the streetcar. At least eight times in the past three years, First Stop has hosted delegations from cities either already doing business with HDR or about to do so. 

In November 2010, Hales and HDR had been hired by the city of Fort Worth as consultants on a proposed streetcar. That month, Fort Worth officials visited Portland thanks to First Stop Portland. Its budget is largely paid for by taxpayers, including funding from TriMet, PSU, Metro and the City of Portland. It also gets private support, including from HDR. First Stop did not provide budget figures by WW's deadline.

This February, Hales took a break from the campaign to visit Kansas City, where officials are preparing to ask voters for approval of a streetcar. That same month, Kansas City officials came to Portland, their expenses in part paid by Nancy Hales' program.

Nancy Hales says her husband has no role in selecting which cities' delegations are hosted by taxpayers. Charlie Hales says HDR already had consulting contracts with cities hosted by First Stop. "There was no marketing advantage to HDR," he says.

If Hales is elected mayor, it will create another potential conflict. PSU's contract with the City of Portland says Nancy Hales can't be fired "without prior written approval" of the city's planning bureau. Charlie Hales says if he's elected mayor, he will eliminate city oversight of Nancy Hales' job.

Appearing on former Mayor Bud Clark's public-affairs talk show in 1992, Hales let slip that he didn't know who Jerry Garcia was. Chastened, Hales showed up to a later taping of Clark's show with a necktie designed by the iconic Grateful Dead guitarist.

Portland's challenges are different now than they were then. And they are immense. The next mayor must contend with an eroding infrastructure, a troubled police bureau and a stagnant economy.

Hales emphasizes the positive and strives to be all things to all Portlanders. Consider his various campaign slogans: "Charlie Creates Jobs." "Charlie Fights 4 Schools." "Charlie Plants Trees." "Charlie Rides a Bike." "Charlie Likes Beer." Another bumper sticker labels Hales an "Aging Hipster" with horn-rimmed glasses. 

As in his first council race, during which he continued to lobby for the homebuilders, Hales is hedging his bets. He has not yet given up his $200,000-a-year job at HDR.

Hales says, if elected, he won't leave office early this time. "I make an explicit commitment to the people of Portland," he says. "If I'm elected to this office, I will with all my energy see out a full term. And if I seek a second term, and people choose to give me one, the same will be true the second time.” 

Between 2004 and 2009, Hales told Oregon tax officials that Stevenson, Wash., was his residence. 

He now tells voters that, after serving on the City Council, he moved out of Portland for love: He had remarried, and his new wife, Nancy, lived in Stevenson.

"I didn't move to Washington to cut my taxes. I moved to Washington to sleep with my wife," Hales said last fall, in a typical response. As he put it in February, "It wasn't tax evasion. It was cohabitation."

But Hales' quips gloss over the truth: He's been trying to have it both ways, claiming it was OK for him to avoid taxes in Oregon while continuing to vote here as if he were a resident.

Last June, WW broke the story about Hales' tax avoidance and his voting in Oregon while declaring Washington to be his residence.

Oregon taxes income in Hales' bracket at 10.8 percent. Washington has no income tax. 

Hales' tax returns show his Washington state residency saved him an estimated $29,900 in 2008 and 2009, the years covered by the returns Hales released to WW.

Claiming you're a nonresident for tax purposes, the Oregon Department of Revenue says, requires declaring you no longer live in Oregon.

"You're a nonresident if your permanent home was outside Oregon all year," the department's guidelines say.

Meanwhile, Hales kept voting in Oregon, a privilege state law says is reserved for residents. 

Records show Hales voted eight times, from 2004 through 2009, in Oregon elections. He did so using a Hayden Island address, even as he told Oregon tax officials he actually lived in Washington.

Steve Trout, Oregon's Elections Division director, says the state lacks enough information about Hales' situation to know whether he violated elections law.

"If he had an intent to return, he could remain an Oregon voter," Trout says. "Without a complaint and a hearing, there's no way to establish intent."

Republican candidate for governor Chris Dudley faced similar questions in 2010. He had moved to Camas, Wash., in the 1990s to avoid Oregon taxes while playing for the Portland Trail Blazers. But Dudley kept his voter registration in Oregon. Unlike Hales, Dudley didn't vote in the years he called himself a nonresident.

When WW asked Hales in June about his residency, he made false statements. He said he never declared Washington as his residence for tax purposes. "I am and have always been an Oregon resident," he said.

Today, Hales says he was mistaken in his statements to WW because he had forgotten that he had filed his taxes as a Washington resident.

"I haven't spent the last 10 years walking around thinking about my tax returns," Hales says now. "Mea culpa. I'm not an accountant." —COREY PEIN and NIGEL JAQUISS

WWeek 2015