Portland auditor says she won’t take up Zenith investigation

Portland’s city auditor Simone Rede doesn’t plan to investigate city staff’s handling of Zenith Energy’s controversial land use applications, according to a letter she sent Wednesday to members of the Portland City Council.

The decision comes in response to a resolution passed by the council at the end of March urging Rede to conduct the investigation. The resolution also demanded Mayor Keith Wilson investigate potential violations of Zenith’s franchise agreement, which the mayor said he would do.

The resolution came on the heels of city staff approving a land-use credential for Zenith – a key step for the company to apply for a new state air quality permit to continue offloading and storing crude oil and renewable fuel at the Northwest Portland fuels hub.

Environmental activists and some residents have opposed Zenith’s presence in Portland for years and have pressured the new City Council to look into the company’s violations and the city’s handling of Zenith, including staff transparency and an alleged lack of public input.

Rede said that while the city charter allows the city ombudsman housed within her office to investigate administrative actions, the focus of those investigations is on situations when the city may be causing direct and unique harm to community members, particularly those who are vulnerable and lack other recourse.

The staff’s handling of Zenith doesn’t qualify, Rede said.

“While transparency and accountability are part of administrative fairness, it is unclear how preparing a report detailing past City actions around the Land Use Compatibility Statement (LUCS) decisions will remedy harm or result in fairer treatment, except in the most abstract sense,” Rede wrote to councilors.

Rede said councilors can use other avenues to address staff handling of Zenith. They could request the Portland Permitting & Development division to come up with a detailed written account of its handling of the Zenith applications and/or compel witnesses to testify under oath.

The council also could refer city employees to their supervisor and the Bureau of Human Resources for investigation and appropriate action if there are questions about whether they provided the council with full and accurate information, she wrote. The ombudsman doesn’t have authority to impose discipline on city staff and refers employee conduct complaints to supervisors and Human Resources, she added.

The Houston-based Zenith is one of 11 companies with fuel terminals at the Critical Energy Infrastructure Hub on the Willamette River. It’s the only state-regulated facility that still stores crude oil as well as renewable diesel, biodiesel and sustainable aviation fuel. Zenith has pledged to fully transition to renewable fuels by 2027.