COOS BAY — The text message came in at 11:29 a.m. on March 15.
"Hello Tom, Dennis would like to meet with you privately tomorrow, or sometime this week. Can you please respond, and if you have time and location that works let me know. Hope all is well, David," wrote David Petrie, an employee of DB Western Texas president Dennis Beetham.
Tom Leahy, then a Coos Bay city councilor, wrote back that he had just returned from Costa Rica and was feeling "pretty wiped out" and would have to meet later in the week.
Six minutes later, Petrie texted, "My, Costa Rica must be beautiful this time of year. Let me know what time Thursday. All the Best, David."
That exchange of text messages, just minutes apart, presaged a months-long saga over wastewater privatization that ultimately would drive Leahy from office and the City of Coos Bay to the brink of a costly fight with state environmental quality regulators.
In general, under Oregon open records law, whenever an elected official sends an email or text message on a government device, or discusses government business on a privately owned device, that message is considered a matter of public record.
In October, The World joined with Coos Bay businessman Joe Monahan to request copies of all emails and text messages pertaining to wastewater or DB Western Texas (DBWT) sent by Leahy, Mark Daily, Fred Brick or Mike Vaughan. These are the four city councilors who earlier this year virtually brought to a halt work on the city's project to replace one of two wastewater treatment plants.
The project had undergone thorough vetting over a decade by state and federal agencies and had a favorable financing package in place. But an 11th-hour push was made earlier this spring by industrialist Beetham to privatize the operation and have his company build, own and operate the plant. Beetham was promising a plant that would be marginally more environmentally efficient and cheaper for rate payers. But the proposal was unvetted by any independent regulatory agency or any professional wastewater experts. And Beetham, whose existing operations involved producing formaldehyde, had never built or operated a wastewater plant.
And Beetham's operations had a history of environmental regulatory problems, both in Oregon and Texas.
The councilors' delay brought with it threats of fines amounting to hundreds of thousands of dollars from the state Department of Environmental Quality. All that was avoided in late November when a newly elected city council overturned previous council decisions and put the project back on its original course.
The purpose of The World's records request was to determine to what extent the four councilors met outside of public meetings to commiserate on the project, and to determine to what extent Beetham, through Petrie, was involved in the decision-making process.
Although the City of Coos Bay, through City Manager Rodger Craddock, stated that it would comply with The World's request by providing whatever records it could supply, Leahy, Daily, Brick and Vaughan initially balked at the request, to the point of seeking legal counsel.
The four eventually did comply, providing at least some of the requested documents.
Though the documents are at times incomplete, they nevertheless tell the story of an aggressive behind-the-scenes effort by Beetham and Petrie to push the four councilors to privatize the city wastewater system and fire Coos Bay City Manager Rodger Craddock.
Timeline of communications
A heavy toll
Though Leahy publicly argued for a cleaner alternative to the DEQ-recommended plant on many occasions, an examination of the released messages shows that his support for Beetham's proposal at times wavered as the heated debate took a toll both emotional and physical.
On April 5, just two hours before a council meeting, Leahy sent a text message stating, "I am getting ready for council now...the wastewater plant keeps coming back to my vote..frickin' hard decision."
That night, the council was to vote on whether to accept state revolving funds to help pay for the replacement project.
After meeting privately with Coos Bay City Attorney Nathan McClintock, Leahy then publicly recused himself from the vote, citing "an undisclosed conflict of interest," according to meeting minutes. The motion to accept funds failed 2-3, with Daily, Brick and Vaughan voting against it.
Leahy later told The World that the recusal was due to Beetham's financial contribution to the Tall Ships Festival, a event organized by the Coos Bay Boat Building Center that Leahy chairs.
Leahy's recusal didn't deter Petrie or his fellow councilors from pushing for privatization.
On April 8, Daily exchanged emails with McClintock regarding the legality of three councilors meeting to discuss city business without running afoul of Oregon open meetings law.
Then, on April 19, Daily sent a text to Vaughan, asking if he could join Daily and Brick at Daily's restaurant, the Outdoor-In. Vaughan texted back two minutes later that he could. Then, on April 21, Petrie sent a text to Vaughan, "Hi Mike, Can you and Tom L. meet with me at a private location, maybe your house, this afternoon? David."
Petrie would send another text message, to Leahy, on April 25, requesting "a private conversation."
Two days later, he would again request a private meeting with Leahy.
On May 3, the day of a council meeting, text messages indicate that Brick, Daily and Vaughan met again at the Outdoor-In. Whatever was said between Petrie and Leahy, it wasn't enough to get the councilor to change his mind on recusal. That night, the council voted 3-3 to approve the acceptance of state funds. Because Leahy abstained from voting, city council rules declared his vote a yes.
That proved a temporary setback for privatization. But on May 15, Daily sent a message to Brick asking, "Do you want to bring this wastewater plant issue back? If so do you want to meet?"
According to texts sent on May 16, Brick appeared to be on board with Beetham's plan to privatize, asking Daily in a text, "How can we say no to his proposal...what are the downsides?"
With Brick, Daily and Vaughan apparently lined up, there was one obstacle still in Beetham's path: Leahy.
But Petrie, Beetham's privatization frontman, was about to turn the pressure up.
"Timing with the VCB, Chamber of Commerce & Visitors Center with Wastewater Treatment added is really a lot. I just left doctor and advised me to take leave," Leahy wrote to Petrie on May 17, shortly after 2 p.m.
Petrie's reply to Leahy was not included in the public records request, but 31 minutes after Leahy sent the text to Petrie, Petrie would write to Vaughan saying, "Hello Mike, Hope you all are having a grand time. Today's visit 's[sic] with Fred and Mark went really well, very encouraging to know they understand the importance of tonight's decisions for the community. I hope you are going to be on the phone. My concern is that Tom is saying his doctor thinks he should rest, that means he may not make the meeting. If he's only there for the new business segment it will validate all the work everyone has put into this most meaningful project. Can you encourage him to be present?"
Then, at 2:51 p.m., Leahy wrote, "David [redacted] City council is one of the most stressful. I have way too much on my plate. Festival of Sail 2017 and Boat Center is all I am going to do."
Again, Petrie's reply was not available but 20 minutes later, Leahy wrote to Petrie, "Doctor said, no. I am close to blowing my heart valve, David!" and then at 4:13 p.m., "Don't push me too hard, David."
Despite his protests, the minutes for the Coos Bay City Council meeting on May 17 indicate that Leahy was present, though he again abstained from voting on anything to do with wastewater privatization.
At that meeting, Daily successfully motioned for the council to discuss Beetham's privatization proposal. However, no further action was taken and the city continued toward the DEQ plan until June 21.
The work continues
Undeterred from May 17's failed coup, Daily and other members of the majority continued to discuss wastewater issues through text messages into June.
The council met in a special work session on June 10 to hear Beetham's proposal, after which Daily texted to Brick, "Hard to argue against that proposal."
The next day, Daily texted Brick again, writing, "Would it be a good idea to hire an attorney specializing in wastewater treatment develop a request for proposal. I don't think staff can be unbiased."
Brick responded by writing, "That is the impression I was getting from Rodger immediately after presentation. What if they own the plant and then try to change things..."
Petrie, too, continued his efforts to lobby the majority for privatization.
"Good evening Gentlemen, GE engineer Chris Allan is available for a conference call to answer questions about MBR wastewater treatment from city council members tomorrow or Thursday after 9:00a.m. Please let me know what day and time is best...for 3 of you to come to the office and join in the call. Thank you, David," Petrie wrote on June 13.
By law, four members of the city council meeting in one place constitutes a quorum, meaning their meeting and its purpose would have to be publicly advertised. By inviting just three members of the four-member majority, Petrie and Beetham would avoid a quorum and public exposure.
The next day, Daily wrote to Brick that he was thinking about introducing a motion to hire an independent wastewater treatment specialist lawyer at the June 21 meeting.
Then, on June 17, Daily wrote to Vaughan asking if they could meet before that meeting.
"Yes, I agree we need some concensus[sic]," Vaughan wrote.
They found that consensus on June 21, when Leahy announced he would no longer recuse himself from discussing and voting on wastewater issues, providing the tie-breaking vote to freeze progress on the DEQ plan in favor Daily's plan to hire attorneys to evaluate the feasibility of privatization.
The Beetham offensive
Though the council's June 21 vote marked a victory for Beetham's ambition, neither he nor his surrogate, Petrie, rested in the weeks that followed.
On June 28, Petrie sent a text message to Brick and Leahy, where he criticized Craddock's performance as city manager.
"I spoke with Bob LaDuke again this morning. He said Jan Kerbo talked to him yesterday. She told him the pipe in question will be put out to bid...even though he's offered to do the work on a change order...his equipment is on site to do the job. She told him a city council person said in a meeting yesterday that he offered to install the pipe next April...2017 that is. This business owner has a very good understanding of how messed up the Public Works Dept. really is, to the detriment of citizenry. Can someone explain why a city manager has the right to waste public money this way?" Petrie wrote.
Then on July 1, Leahy sent a text message to Beetham, discussing a "positive shift" in the privatization discussion with Craddock and encouraging Beetham to call back to discuss it.
Meanwhile, DBWT waged its public relations campaign with the help of Daily, who recognized that the company's name had become tarnished.
In an email to Petrie discussing an op-ed, written by Beetham, that DBWT sought to have published, Daily wrote, "I'm not sure if it is a good idea that this letter comes from DB Western. Because I think staff has become somewhat successful in vilifying DB Western."
When Stacey Mills, a DBWT employee, wrote Daily to give him permission to submit Beetham's op-ed to The World in Daily's name, Daily responded, "Stacy[sic] I would rather it get published in the Register Guard and it would be best if it could come from some well-known environmental advocate who could point out the irony of the DEQ wanting to find[sic] the city because the city wants to pursue a better treatment plant then[sic] it has attempted to usher in. Thanks Mark"
As for Petrie, his feud with city officials continued throughout July, according to text message records. On July 21, he sent a message to Leahy to announce he'd written a response to "McClinktock '[sic] resent[sic] mailing that I was spreading erroneous information about CB'S wastewater treatment operations, a statement from a farm land owner included. Nate said he would give City Councilors a copy of the three pages tonight. DBWT'S NSCB2 proposal is finished, a electronic copy will be sent to City Council members tomorrow."
A longtime philanthropist, Beetham has given to many charitable causes in the area. But more than once, the recipients of his gifts have included people who had the power to influence the privatization discussion. And while there is no evidence to show that the gifts were intended to incur influence, they always have the potential to create that perception.
While Beetham's financial contributions to Tall Ships Festival drew considerable attention, Leahy was not the only councilor whose organization received Beetham's philanthropy.
In an April 9 email to councilors discussing a records request from The World, Craddock wrote that, "Councilor Vaughan has shared that Mr. Beetham was the person who was going to pay to move his sculpture for him. In addition Mr. Beetham gave a sizable donation to the Liberty Theaters capital improvement project of which Councilor Vaughan is the project manager."
However, in that same email, Craddock wrote that it did not appear Beetham had asked anything in return, nor was anything promised to him.
Councilors weren't the only beneficiaries of Beetham's largesse.
"Thanks again for getting DB Western to buy Cody's goat. He's such a good kid and they're such a hardworking family," Barbara Gimlin wrote in a text message to Leahy on July 31.
Gimlin, a biologist and environmental compliance specialist, would go on to become a prominent surrogate for Daily's mayoral campaign, championing the membrane bio-reactor that was a key component of Beetham's privatization proposal.
Doubt sets in
Though the pro-privatization councilors initially expressed optimism about bringing in wastewater-specializing attorneys to evaluate their proposal, the findings of San Francisco-based Farella Braun and Martell dampened that enthusiasm some.
"It doesn't look favorable to me to privatize. Too many risks," Leahy wrote to Daily and Brick on Aug. 11. Then, "Law firm does not recommend privatization!" to Mike Vaughan.
An hour later, Daily wrote to Leahy, "The summary suggest[sic] it is environmentally better and if we think the current plan is costing to much, then private is the better way to go. I think privately owned allowes[sic] for no prevailing wages in construction also it is unrestricted by RFQ requirements. Further, staff could not dip into the fund for its own salaries. If we put it out for an RFP we could have a definitive answer in 6 weeks. We would have actual rate comparisons. The attorneys could work with DEQ and address the risks contractaully. The question is still the same. Do we want a better treatment plant at better rates?"
Meanwhile, Daily, in an Aug. 15 email to Petrie, expressed concern about Rick Skinner, general manager of Knife River in Coos Bay. Skinner spoke in opposition to wastewater privatization in a number of council meetings and Daily mused to Petrie of a way they could remove Skinner as an opponent.
"A well placed call from DBWT procurement to Knife River about a concrete bid for the plant you are proposing might go a long way in keeping Rick Skinder[sic] at bay tomorrow night. Plus we need people to fill the seats," Daily wrote.
Skinner would continue to speak out against privatization and in favor of the DEQ plan at future meetings.
August also marked retired attorney Joseph Hudson's entry into the fray. Speaking at public comment during council meetings and also privately with Leahy, Brick and Vaughan, Hudson warned of possible ramifications should the council continue to pursue privatization. At one point, Hudson said he contacted the FBI to request an investigation.
Leahy's text messages showed that the discussion was taking its toll on him.
"Yes, moving and other stressful things with wastewater and FBI investigation and sue threats...tell you more later...meeting mayor in a few," he wrote on Aug. 15 to Brick. Then, to an unknown number, he wrote, "Buried in moving and wastewater."
Hudson's arrival prompted a concerned response from Petrie, who sent text messages on Aug. 16 to councilors asking for Hudson's name and then advising that they hold off on meeting with him until Petrie did "more research."
That same day, Petrie sent a text to Vaughan, "Hello Mike, Can you speak publicly tonight about what the Mayor attempted to accomplish by using Joseph Hudson to intimidate and threaten city council member's[sic]."
At one point, Petrie appeared to suggest the removal of Craddock as city manager, as evidenced by a Sept. 2 text from Brick in response, where Brick wrote, "I am not really sure getting rid of Rodger would be a good idea...looks like a power grab by the Dennis B boys to get him his plant...plant should win based on quality and price..."
Petrie did not relent, though. In a Sept. 6 text to Brick and Leahy, Petrie wrote, "Just talked with Mark (Daily) again. He's stuck on having motions for both the MBR-RFP and dismissing the city manager without cause tonight. In reality he makes an excellent case...Roger[sic] has interfered in a democratic process. The community and environment needs both motions to move forward tonight, we need to initiate real and permanet[sic] change...now."
However, no such effort ever materialized.
The final stretch
In September, with city election season underway, it was clear that the race for Coos Bay mayor, to some extent, would hinge on the decision over how to proceed with wastewater. With Daily, the leading voice for privatization, running for mayor, Brick saw privatization as a winning platform.
"The election could be not just about you vs. Crystal (Shoji)...it could be about the (wastewater privatization)...not if we do not get the (request for proposals) out asap. You will be the advocate of the better plant...a clear distinction between you and Crystal.. I can help with that at the coos bay relators[sic] debate between Crystal and I on the 15th...over the wwtp...," Brick wrote in an text to Daily, which Leahy also received a copy of.
Beetham and Petrie continued to remain involved during the campaign season, as well.
On Sept. 17, Petrie sent a text to Brick asking for him to speak with Beetham about changes Beetham's Portland attorney made to the privatization request for proposals which Brick later would successfully motion for the council to approve.
On Sept. 20, the day that the council was to consider the DBWT-drafted RFP, records show that Daily quizzed all four members of the council majority, via text, over how to proceed.
"Does anyone have a problem with me making a motion the change the wastewater sub-committee to Fred, Mike and I with Tom as the alternate?" Daily asked the group.
"I think it looks like stacking the deck...," Brick responded.
That night, the council would approve the issuance of the RFP and the formation of a three-member subcommittee to review the proposals, but only after a heated and at times chaotic meeting that had to be temporarily recessed at one point in order for the meeting to return to order.
Leahy had had enough.
"Tom just resigned...sorry," Brick wrote in a text to the other members of the majority at 9:08 p.m., shortly after the meeting ended.
Leahy would announce his resignation to The World later that night.
For his part, Leahy expressed relief at no longer grappling with wastewater issues.
"Thought you should know..I resigned from City Council tonight!" he wrote in a text to an unknown phone number. "Too much contentious pressure on the wastewater issues! Going forward with tall ships...my passion!"
Spencer Cole contributed reporting to this story.