SALEM — Former Gov. John Kitzhaber’s administration paid used outside contractors more than $3.1 million for policy development work to support his third term agenda.

Matt Shelby, a spokesman for the Department of Administrative Services, said the Kitzhaber administration used a special procurement process to hire contractors to create a 10-year strategic plan for Oregon, which set longterm goals to guide the state’s two-year budgets. The process allowed the Governor’s Office, Department of Administrative Services, Department of Human Services, Oregon Health Authority, Department of Education, Oregon Employment Department and Oregon Housing and Community Services to hire 21 pre-qualified contractors for work related to Kitzhaber’s policy goals.

“The reason that we created this group was Kitzhaber came in and created the office of the state operating officer, and tasked Michael with working with agencies on goals in the 10-year plan,” Shelby said, referring to chief operating officer Michael Jordan. “That’s something that wasn’t necessarily being done before.”

It’s unclear whether Gov. Kate Brown will continue the level of policy contracting that occurred in Kitzhaber’s administration. Brown spokesman Chris Pair wrote in an email Thursday that “regarding contracting practices, Governor Brown is working with staff to assess a number of policies and areas of focus.”

Under the procurement system, the Governor’s Office and state agencies were authorized to sign work orders worth up to $10 million. Firms hired through the process included polling firm DHM Research, the public relations firm Pyramid Communications, the economics firm ECONorthwest and the University of Washington Center on Reinventing Public Education.

One of the consultants hired was Steve Bella, a friend of former first lady Cylvia Hayes who introduced Hayes to employees at a Wisconsin think talk called The Center for State Innovation that briefly worked with Hayes on a proposal to coordinate green energy policy in West Coast states, The Oregonian reported last fall.

Bella was a fellow at The Center for State Innovation, and he and Hayes both own homes in Bend. In addition, Bella worked as a consultant for West Chester, Pennsylvania-based Public Works LLC.

In August 2012, the Department of Administrative Services hired Bella at $200 an hour through Public Works LLC. The state paid for the work with a Medicaid grant, and Bella had four months to produce a plan to “empower historically unemployed and under-employed Oregonians in obtaining meaningful employment” by Dec. 31, 2012. The state paid Public Works a total of $88,890 under the contract. In April 2013, the state amended Bella’s consulting contract to authorize an additional work at $200, with a cap of $100,000. However, Shelby said the state terminated the contract and never paid Public Works under the amendment.

Bella remembered the situation differently, and wrote in an email that the contract extension allowed him to work on implementation of the employment plan in 2013.

“During that time, the (Closing the Employment Gap) work group met almost every month, and there were four work groups established that consisted of various agencies and stakeholders,” Bella wrote. The group completed a report on its work, and Bella wrote that he “staffed all the (group’s) stakeholder meetings, interagency meetings, work group meetings, and was the primary author of the 32-page report.”

Bella said his employment with Public Works lasted eight years and “during that time I worked for state governments all over the country on workforce development, including Delaware, New Mexico, Connecticut, Arizona, and Pennsylvania.”

Another Public Works consultant also worked on the employment gap contract, Bella wrote, and “my salary for Public Works was around $60K, might have been even less, and included work not just in Oregon, but also for projects in a number of other states.”

Public Works also landed at least one contract during Kitzhaber’s third term that was separate from the special procurement process. Although the $12,500 contract signed in June 2012 was with Business Oregon, it involved working with the Governor’s Office to develop a more skilled workforce. The contract essentially called for Bella to serve as a policy adviser to the Governor’s Office, reviewing audits, ideas for pilot projects and meeting with the governor’s staff.

When Bella’s state contracts ended, a private group stepped up to pay for his continued work on policy. Bella contracted directly with the Oregon Business Council from the spring through fall 2014 to coordinate the group’s work on poverty reduction with Hayes’ first lady Prosperity Initiative, vice president Jeremy Rogers wrote in an email Thursday. Rogers said he did not know how much the group paid Bella, because its bookkeeper was out of the office.

The Willamette Week newspaper reported last fall that the Oregon Business Council paid for a spokeswoman to help publicize Hayes’ Prosperity Initiative with money from a $35,000 Northwest Area Foundation grant.

The Business Council is one of the four main organizations behind the Oregon Business Plan, which calls leaders together every year to formulate an agenda for state action. Kitzhaber relied on the plan and the support of business groups to drive his own agenda.

Shelby said Bella was open about his role working with Hayes and the Oregon Business Council. “That’s who was paying him,” Shelby said. “That’s where he was coordinating with the first lady quite a bit.”

— This story first appeared in the Oregon Capital Insider newsletter. To subscribe, go to oregoncapitalinsider.com