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For hotelier Mark Hemstreet, it’s come to this: A man who was among the biggest spenders in Oregon politics in the 1990s, who lived a life of private jets and sprawling ranches—not to mention the metro area’s largest American flags and Christmas light displays at his company’s Beaverton headquarters—today stands accused of not paying for his cattle’s fodder.
On Jan. 23, Cody Tippett, a farmer in Wallowa County, where Hemstreet owns a 9,200-acre ranch, filed notice with the Oregon Secretary of State’s Office alleging that Hemstreet hadn’t paid him $101,356 for “labor and hay provided to feed cattle.”
Records show that Hemstreet, founder and owner of the Shilo Inns hotel chain (motto: “Affordable excellence”), has far bigger debts than the one for Tippett’s hay.
In December, the Internal Revenue Service filed a slew of liens against Hemstreet for unpaid income taxes. (Governments file liens to secure an interest in real property when taxpayers fail to pay their obligations.)
The December filings brought the number of IRS liens against Hemstreet filed with the secretary of state to nine. None has been released or paid off. The liens show that Hemstreet owes the feds more than $20 million for unpaid personal income taxes and employee withholdings.
For some, failure to pay federal income taxes can result in criminal charges. In November, for instance, the U.S. attorney for Oregon publicized the guilty plea of Rebekah Williams, the owner of a now-defunct Damascus dump truck operation. After being indicted on 19 counts of willfully failing to pay $112,457 in federal withholding taxes for employees, Williams pleaded guilty to “willfully failing to pay employment taxes” and will be sentenced Feb. 14. She faces up to five years in prison and a $250,000 fine.
Hemstreet, whose liens show he owes federal taxes going back to 2014 that amount to 175 times the sum Williams failed to pay, has never been criminally charged. An IRS spokesman declined to comment as did the U.S. Attorney’s for Oregon. “We do not discuss publicly how we make prosecution decisions or outline the specific factors or thresholds, if and where they do exist, that would result in criminal prosecution,” says Kevin Sonoff a spokesman for office. (For that matter, Tippett declined to comment on the hay.)
Hemstreet could not be reached, but one of his attorneys, Charles Markley, says the liens “are being handled by Mr. Hemstreet’s professional tax accountant and tax attorney to pay and resolve in the near future.”
To some observers, it looks as if Hemstreet is getting a free ride at the public’s expense.
“This woman [Williams] who owes back taxes for three years is probably going to prison, and he’s still out there enjoying himself and going to his ranches,” says Jody Wiser of the watchdog group Tax Fairness Oregon. “It’s not the way the system is supposed to work.”
Hemstreet, now 72, grew up in Beaverton as the son a wealthy hotelier, according to a 1995 Oregonian profile. He opened the first hotel of his own in 1974 on Northeast 82nd Avenue. By the millennium, Hemstreet owned about 50 Shilo Inns across the West.
In the 1990s, according to news reports, Hemstreet regularly gave more money than any other Oregon political donor, supporting conservative causes and candidates. He was particularly influential from 1995 to 2001, when, with his help, Republicans controlled both chambers of the Oregon Legislature.
At 6-foot-3 and 220 pounds, he was an outsized figure, living large in a 9,800-square-foot home on the shores of Lake Oswego.
“I really don’t think the state of Oregon or the United States is ready for a wise, benevolent monarch yet,’’ he told The Oregonian in 1995. “That’s what I would hope that I would be perceived as.’’
Two events changed his fortunes: First, in response to Hemstreet’s union bashing, the Oregon AFL-CIO launched a boycott in 1994 of all Shilo properties. That action went on for years and hurt enough that Hemstreet pushed for legislation in 1997 outlawing such tactics (the bill failed).
“To this day, there are a lot of people in Oregon who will never stay in a Shilo Inn,” says Jim Moore a professor of political science at Pacific University.
Even more damaging: the terrorist attacks of Sept. 11, 2001, which shut down travel for an extended period.
More than half of Hemstreet’s hotels filed for bankruptcy in the aftermath (each was a separate limited liability company). Court records suggest Shilo’s fortunes never really recovered. The chain is now down to 18 hotels, and records show some of those are in deep financial trouble.
Hemstreet canceled his Oregon voter registration in 2009, records show. He often uses a Las Vegas address, although he and his wife, Shannon, have also owned a 1,400-acre ranch near Missoula, Mont., and properties in California and Texas.
His empire is dwindling. The Shilo Inns in Nampa, Idaho, Ocean Shores, Wash., and Bend have gone into bankruptcy in recent years, as the hospitality industry reeled from COVID-19. (Records show that Shilo Management Corporation, a Hemstreet company, got $4.92 million in federal Paycheck Protection Program loans—all forgiven—during the pandemic.)
“The regrettable voluntary Chapter 11 bankruptcies were a result of the historic unprecedented COVID pandemic that caused loss of life, and health issues for many Americans as well as substantial economic hardship for many families and businesses across Oregon and the nation,” Hemstreet’s attorney, Markley, says.
In addition to not paying his taxes to the feds, Hemstreet has racked up considerable back taxes in Oregon as well. Liens show he owes the Oregon Department of Revenue more than $3 million.
Markley says those liens will be paid off, and he notes that Hemstreet has done a lot of good.
“Mr. Hemstreet has been in business for over 48 years and has proudly employed thousands of Oregonians and Americans across many states,” Markley says, “contributing millions in local, city, county, state and federal taxes that help support education, police and firefighters.”
But Tax Fairness Oregon’s Wiser says Hemstreet, whose political philosophy was built on the notion of personal responsibility, needs to make good on his obligations.
“His businesses depend on public infrastructure and services,” Wiser says, “but he’s not doing his part to pay for them.”
Rebekah Williams’ attorney, Ron Hoevet, prosecuted federal tax cases as a young lawyer. Now, he says, he probably defends as many tax cases as any criminal defender in the state.
That Hemstreet has so far dodged criminal scrutiny doesn’t surprise him.
“The IRS, in my view, doesn’t go after the big guys,” Hoevet says. “They target mostly cases that look like certainties—regular folks whose businesses are in trouble—rather than people like Hemstreet.”