When in Rome

This week, Pope Francis lands in the United States, a visit with deep significance for many Catholics.

Two months ago, Portland Mayor Charlie Hales took his own meaningful trip to meet the pope. Now that trip may become an issue in the mayor's re-election bid.

In July, Hales traveled with his wife, Nancy, to Italy for 12 days for a meeting at the Vatican on climate change. Hales later described the meeting as inspirational.

The city of Portland paid the mayor's expenses, but not for his wife's airfare.

Who actually footed Nancy Hales' bill is a small mystery.

Nancy Hales, who previously ran a community foundation in Vancouver, Wash., runs an unusual program at Portland State University called First Stop Portland. She has done so since 2009, three years before her husband was elected mayor.

The program, administered by PSU's office of Research and Strategic Partnerships, brings delegations of visitors from the U.S. and abroad to study Portland's sustainable infrastructure—think bike lanes, bioswales and the Portland Streetcar.

The vision for First Stop Portland came from Dike Dame, a developer who has done business with the city for decades yet is less well-known than his business partner, Homer Williams, who's known for having shaped the Pearl District.

First Stop Portland's advisory council includes several significant members of Portland's real-estate development world, including some who gave generously to Mayor Hales' 2012 campaign.

When Nancy Hales flew to the Vatican with the mayor in July, she spent $2,125 on airfare, tapping First Stop Portland's approximately $200,000 annual budget. The funding comes from private donors, government agencies, and fees paid by visiting delegations. The money for her trip came specifically from donors, says Scott Gallagher, a spokesman for PSU.

"Those funds," Gallagher wrote in a July 28 email to WW, "come in the form of gifts from individuals or companies."

But the identities of those donors are not a matter of public record, because the donations are run through the PSU Foundation, which is a private nonprofit, not a government agency.

PSU officials say it was an easy call to send Nancy Hales to the Vatican.

"As director of First Stop Portland, PSU's international city-to-city knowledge exchange program, Ms. Hales is an expert in how cities solve urban sustainability questions, which was a core focus of this symposium at the Vatican," Gallagher wrote in his July 28 email to WW. "The trip also provided a unique opportunity to make contacts with mayors of cities from around the world who are also interested in urban sustainability and encourage them to visit Portland as part of the First Stop Portland program."

First Stop Portland is an active and well-regarded part of the university. Since 2014, it has hosted close to 1,000 government officials and students from dozens of cities and countries, introducing them to concepts such as regional planning, public-private partnerships and transit-oriented development.

At the same time, it's a small program whose fundraising is modest—First Stop Portland has raised $176,000 total in the past four years from donors to PSU's foundation who give specifically to Nancy Hales' program.

It's not clear how First Stop Portland spends its money beyond paying Nancy Hales' annual salary, which was set at about $65,000 in 2014.

But the lack of disclosure may raise questions about whether undisclosed gifts are used to curry favor with the mayor. Members of First Stop Portland's advisory council are not required to donate to the program, according to PSU. But some do.

Of all the special interests in a city that a mayor can help or hurt, few are as significant as the real-estate development business. A mayor's power (even in Portland's weak-mayor form of government) to influence decisions on financing, zoning and other policies can drive property values.

It's why relationships with developers need to be transparent—a point that Hales challenger Ted Wheeler, Oregon's state treasurer, wasted no time in hammering when he announced his candidacy Sept. 9.

“There’s a clear lack of openness and transparency with regard to real-estate development as it’s currently taking place in this city,” Wheeler told WW the day before launching his campaign. “People don’t sense they’re being brought along with the decisions. They feel the decisions are being made on their behalf behind closed doors.” 

Todd Donovan, a political science professor at Western Washington University, says donors giving to Nancy Hales' group could raise eyebrows. Campaign contributors in Oregon don't face any caps, but they do have to disclose their gifts. Not so with First Stop Portland.

"Is that a way that donors can get some sort of extra influence?" Donovan asks. "It's obviously possible."

Nancy Hales declined to be interviewed for this story.

Mayor Hales initially agreed to an interview with WW, then declined, deciding instead to respond to written questions by email. Asked how voters should view the overlap between donors to his campaign and First Stop Portland supporters, he wrote: "I have no guidance about what voters should think about community leaders volunteering with a PSU program that deals with smart growth."

First Stop Portland used to receive funding from the city of Portland. Under previous Mayor Sam Adams, the city contributed a total of $64,000 over four years. Those contributions stopped under Hales, who told the Portland Tribune after his election in 2012 that he was mindful of the potential for conflicts of interest.

John Mangan, a spokesman for Dame, says Dame has given consistently to First Stop Portland since before Hales was elected, but declined to say how much.

Of the Hales donors on the First Stop Portland board, only developer John Russell agreed to an interview. 

Russell could not recall how much money he'd donated to the program over the years. 

He says there is no connection between his support for the mayor and his giving to First Stop Portland.

“Absolutely not,” he says, adding he’s a big fan of Nancy Hales’ program. “First Stop filled a void. A lot of people want to come to Portland to learn what we’ve done.” 

Donors to Charlie Hales who also serve on the 21-member advisory board of Nancy Hales' First Stop Portland include:

Phillip Beyl, principal at GBD Architects, who gave the mayor $1,600 in the 2012 election cycle and has given $500 so far for the 2016 election.

Dike Dame, president of Williams & Dame, which gave $15,000 to Hales for his 2012 campaign. Dame Consulting also gave Hales $5,000 in June for 2016. (Dame pleaded guilty to bank fraud in 1988.)

John Russell of Russell Development Company, who has given $2,500 so far in 2015 and gave $7,450 in the 2012 cycle.

John Carroll, president and CEO of development firm Carroll Investments, who has given Hales $5,000 so far this year and gave him for the 2012 election.

Carter MacNichol, an associate with Shiels Obletz Johnsen and project director for the Portland Streetcar, who gave the mayor $7,100 for his 2012 campaign.

First Stop Portland doesn't require donations from members of its advisory council. The council includes two city employees who report to the mayor: Patrick Quinton, Portland Development Commission executive director, and Susan Anderson, Bureau of Planning and Sustainability director. 

WWeek 2015