City of Portland claims attorney-client privilege to shield Zenith Energy communications

King sent the email to Donnie Oliveira, deputy city administrator; Eric Engstrom, Bureau of Planning and Sustainability, or BPS, interim director; and Tom Armstrong, BPS supervising planner, in response to a string of emails regarding a briefing BPS planned for then-Mayor-elect Keith Wilson.

The initial public records obtained by Street Roots outlined city officials’ communications days before the Oregon Department of Environmental Quality, or DEQ, sent its letter to Zenith, issuing a $372,600 civil penalty and requiring it to acquire a new Land Use Compatibility Statement, or LUCS, from the city of Portland. DEQ alerted the city ahead of its enforcement action, and city officials coalesced around a communication strategy in preparation for the announcement, according to the records.

The city redacted portions of the public records, including multiple emails King sent in the days before and after the Dec. 6, 2024 meeting with the Mayor-elect, claiming attorney-client privilege under Oregon public records law.

Street Roots appealed the redactions to the Multnomah County District Attorney’s Office, citing King’s explicit concerns with “political strategy” as directly contrary to the public interest.

“Protecting a political strategy is not a basis for redacting public records,” Street Roots wrote in its Jan. 2 appeal letter. “Accountability is critical in ensuring the public trust is maintained with public agencies, but accountability is not possible without transparency.”

The city responded by furnishing the records without its previous redactions, citing the public’s interest in the matter.

“The City agrees to release the requested records and waive the attorney-client privilege exemption that applies to the records,” the letter said. “The City does not concede that the records are not exempt from disclosure but rather determined that it was in the public’s interest to provide the requested records with those portions unredacted. The waiver of the exemption does not constitute a waiver of attorney-client privilege except as it may apply to these limited records.”

Dragging it out

Alan Kessler, a Portland public records lawyer, told Street Roots this is not the first time the city tried to keep communications out of public view, despite the public’s interest, adding the city knows it can make a general assertion of privilege and delay disclosure of politically sensitive documents.

“They can drag something out and keep it out of the public eye for, maybe forever, if the requester gives up,” Kessler said.

Kessler said he has seen examples of this in the past, and the city immediately sending the records on appeal shows the city never believed it had the right to redact under attorney-client privilege. He said the parenthetical about “political strategy” shows a clear intent to abuse the attorney-client privilege designations to protect things that are politically sensitive.

The law is very specific about what can be designated as privileged, according to Kessler.

ORS 40.225 says, “A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client.”

Kessler said it is meant to protect the legal implications of certain actions.

“Generally, that means not business strategy, not political strategy, but talking about what the law is and how actions, or proposed actions, would interact with the law,” Kessler said. 

Kessler said given the city’s history of flouting public records law and sometimes settling judgments in court, Kessler hopes this practice will vanish in the new form of government.

“I desperately hope that this new City Council is going to put me out of business and change the way the city behaves in this matter,” Kessler said.

Background

The new public records shed light on the city’s process around Zenith. Environmental and community advocates have long alleged the city engaged in a “backroom deal” to facilitate Zenith’s LUCS since at least as early as 2022.

The city denied Zenith’s previous LUCS application in 2021, saying Zenith’s operations were not compatible with the city’s comprehensive land use plan and had the potential to impact the environment negatively and historically marginalized groups. Zenith sued the city over its denial, and while litigation was ongoing, Zenith’s public relations firm Pac/West organized a tour of its facilities with public officials on July 29, 2022, as first reported by Street Roots.

Just over two months later, the city granted Zenith a new conditional LUCS on Oct. 3, 2022. Days later, on Oct. 6, 2022, the Oregon Supreme Court decided not to hear Zenith’s appeal, leaving in place a May 2022 appellate court opinion upholding Portland’s right to deny the LUCS.

Environmental advocates and community members criticized city officials’ participation in that tour, and the subsequent approval, as a “backroom deal” that evaded the public process. On March 26, 2024, the Portland City Auditor found that the tour and other undisclosed communications violated the city’s lobbying code.

King’s Dec. 3, 2024 email further inflames the public’s concerns that despite their efforts, another opaque deal could be underway.

The conditional LUCS requires Zenith to transition to “renewable fuels” by Oct. 3, 2027, and public records obtained by Street Roots show the Houston-based fossil fuel company is positioning itself as the region’s preeminent renewable fuels hub. Environmental and community advocates say significant dangers remain at the CEI Hub, and Zenith should not be trusted with community safety.

Including other energy companies at the CEI Hub, many storage tanks are 100 years old, and none have been built in the last 30 years, contributing to the risk posed by seismic activity. Zenith’s facility has stored petroleum products since 1947, and as part of its new agreement with the city to obtain the LUCS, it is expected to remove 30 old tanks.

The Portland City Auditor’s Office said it could not comment on the matter. The City Attorney’s Office did not respond to Street Roots’ request for comment at the time of publishing.

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