Oregon Gov. Kitzhaber steps down over ethics scandal involving fiancee

Long-time Democratic Oregon Gov. John Kitzhaber on Friday announced his resignation amid allegations his fiancee used her relationship with him to enrich herself.

In a lengthy statement released Friday, Kitzhaber said he broke no laws and said his resignation would be effective on Wednesday.

"Nonetheless, I understand that I have become a liability to the very institutions and policies to which I have dedicated my career and, indeed, my entire adult life," he said.

The decision capped a wild week in which Kitzhaber seemed poised to step down, then changed his mind, but ultimately bowed to calls from legislative leaders that he quit the state's top job.

The announcement is a stunning fall from grace for the state's longest-serving chief executive.

Secretary of State Kate Brown, a Democrat like Kitzhaber, was expected to assume the office and become the first openly bisexual governor in the country. Unlike most states, Oregon does not have a lieutenant governor, and the state Constitution puts the secretary of state next in line.

Kitzhaber called Brown back to Oregon from a conference in Washington, D.C., earlier this week. People close to Kitzhaber say he asked her to come back after deciding to resign in the wake of the influence-peddling allegations involving his fiancee, a green-energy consultant. But he then changed his mind, saying he wouldn't step down, which led to a Wednesday meeting between Kitzhaber and Brown that she described as "strange."

By Thursday, the leaders of the state House and Senate said he had to go. Other top officials in the overwhelmingly Democratic state also said Kitzhaber should resign.

"I finally said, 'This has got to stop,'" Senate President Peter Courtney said after he met with Kitzhaber. "I don't know what else to do right now. It seems to be escalating. It seems to be getting worse and worse."

Kitzhaber handily won re-election in November to a fourth term after surviving the botched rollout of Oregon's online health care exchange, which turned into a national embarrassment.

But the allegations surrounding his fiancee Cylvia Hayes' work were more harmful, dominating headlines in the state following his victory.

A series of newspaper reports since October have chronicled Hayes' work for organizations with an interest in Oregon public policy. At the same time, she was paid by advocacy groups, she played an active role in Kitzhaber's administration, a potential conflict of interest.

The spotlight on Hayes led to her revealing that she accepted about $5,000 to illegally marry a man seeking immigration benefits in the 1990s. Later, she admitted she bought a remote property with the intent to grow marijuana.

Though questions about Hayes have swirled for months, the pressure on Kitzhaber intensified in recent weeks after newspapers raised questions about whether Hayes reported all her income on her tax returns. She has not publicly addressed the allegation and Kitzhaber has declined to. Earlier this week, Oregon Attorney General Ellen Rosenblum said she was launching a criminal investigation.

Kitzhaber has consistently maintained that he and Hayes worked hard to avoid conflicts between her public and private roles.

A fiercely private person, Kitzhaber has been forced to answer embarrassing and personal questions about his relationship. In response to questions at a news conference last month, Kitzhaber told reporters that he's in love with Hayes, but he's not blinded by it.

Kitzhaber, 67, met the 47-year-old Hayes before the 2002 election, when he was governor and she was a candidate for the state Legislature. She lost her race, but they later reconnected after Kitzhaber's term ended.

After eight years out of office, Kitzhaber was elected governor again in 2011. Hayes used the title "first lady," though the couple never married, and she took an active role in his administration. They were engaged last summer.

The scandal over alleged influence-peddling was not the only one to hammer Kitzhaber since his return as governor. Kitzhaber, a former emergency room physician and passionate advocate for health care reform, was embarrassed last year when Oregon was the only state that was unable to launch an online health insurance exchange in the first year of the federal health care law.

Oregon spent millions of dollars in federal grant money but has abandoned the technology for Cover Oregon. The state and its main technology contractor, Oracle Inc., are blaming each other for the failure in multiple lawsuits.

Before the Cover Oregon debacle, Kitzhaber had racked up a series of successes. He convinced lawmakers to overhaul the state Medicaid system, then convinced the Obama administration to give Oregon $2 billion to implement it. He spearheaded cuts to retirement benefits for public employees despite being elected with considerable help from the unions whose members lost out.

After the successes, top Republicans declined to challenge Kitzhaber in last year's election. He easily defeated state Rep. Dennis Richardson, who relentlessly pounded Kitzhaber over the Hayes scandal but was unable to overcome Oregon voters' aversion to his social conservative views.

Kitzhaber has an acute understanding of the Legislature and how to use the power of the governor's office to achieve his objectives. He proved adept at isolating the people he disagreed with, but he also angered his supporters and was left with few friends. When he got into trouble, his fellow Democrats did not speak up.