Portland Oregon Mayor Hales Claims Washington Income Tax Immunity and Oregon Voting Rights Residency...

7/28/2019 Portland Oregon Mayor Hales Claims Washington Income Tax Immunity and Oregon Voting Rights Residency in Pre

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IN THE CIRCUIT COURT OF STATE OF OREGON1FOR THE COUNTY OF MARION2

3SETH ALLEN WOOLLEY, an4Oregon Elector and Taxpayer,5

6Plaintiff,7

8v.9

10KATE BROWN,11Secretary of State of Oregon,12

13Defendant.14

Case No. __________

COMPLAINT

DECLARATORY RELIEF(ORS 28.010)

APPEAL OF SECRETARY OFSTATE ACTION (ORS 246.910)

APPEAL OF DECISION IN OTHERTHAN CONTESTED CASE (ORS

183.484)

COMPEL AGENCY ACTIONREQUIRED BY LAW(ORS 183.490)

(not subject to mandatoryarbitration)

1516

Plaintiff alleges:17

INTRODUCTION18

1. Plaintiff seeks declaratory and injunctive relief from the decision of the19

Secretary of State to refuse to address whether Charles Hales, who states his20

current residence as 7136 S.E. 27th Avenue, Portland, Oregon:21

A. unlawfully voted in Oregon several times since the beginning of22

2004;23

B. unlawfully registered to vote in Oregon in 2008;24

C. made false swearings on his voter registration card filed on March25

18, 2008;26

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D. made false swearings in signing each of his vote-by-mail envelopes1

submitted in Oregon since the beginning of 2004; and/or2

E. violated Portland City Code 2.08.050 and Portland City Charter 3

2-202 and is not legally qualified to be a candidate for Mayor of4

Portland or to serve in that office.5

JURISDICTION6

2. This court has jurisdiction of this cause under ORS 246.910; ORS 28.010, et7

seq.; and ORS 14.175.8

3. This court has additional jurisdiction of this cause under ORS 183.484 and9

ORS 183.490.10

4. This action is timely filed within 60 days of the date of the Secretary of11

States determination.12

VENUE13

5. Venue is proper in Marion County. ORS 246.910(1); ORS 183.484.14

PARTIES15

6. Complainant Seth Alan Woolley is an elector of Oregon who resides at 340316

N.E. Stanton Street in Portland, Oregon.17

FACTS18

7. Charles Hales resigned his position as an elected Portland City Commissioner19

in April 2002.20

8. THE OREGONIAN reported on June 27, 2011:21

"From 2004 to 2009, Hales and his wife, Nancy, claimed residency22in Stevenson, Wash. They filed tax returns claiming their home in23Washington -- which, unlike Oregon, has no personal income tax.24

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At the same time, Hales kept voting in Oregon elections."12

9. WILLAMETTE WEEK reported on April 11, 2012:34

Between 2004 and 2009, Hales told Oregon tax officials that5Stevenson, Wash., was his residence.6

710. WILLAMETTE WEEK on June 27, 2011, reported receiving email from Charles8

Hales, stating (emphasis added):9

After our marriage, Nancy and I lived in her home in Stevenson10and in our condo on Hayden Island. Starting in 2004 and until112009, we filed our joint federal and Oregon tax returns as residents12of Washington.13

1411. WILLAMETTE WEEK reported on April 4, 2012, that Charles Hales continued15

to file his income tax returns for the year 2009 as a resident of Washington:16

As WW first reported last summer, Hales created a problem for17himself (and saved some money) by claiming Washington18residency for tax purposes in 2008 and 2009. Unlike Oregon,19which has one of the nations highest income tax rates,20Washington does not levy income taxes. * * *21

22

The tax returns [2008-2010] he provided WW show that Hales23saved him about $30,000 in Oregon income taxes for the two years24he claimed Washington residency.25

2612. Charles Hales remained registered to vote in Oregon at an address on Hayden27

Island until March 18, 2008. On that date, he filed a form to register to vote28

as a resident of Oregon residing at 7136 S.E. 27th Avenue in Portland.29

13. THE OREGONIAN reported on June 27, 2011:30

During that time [2004-09], he claimed residency in Stevenson31[WA], where his second wife owned a home, which meant salary32earned outside Oregon was not taxable. But he voted in 15 of 1933Multnomah County elections, listing a condominium on Hayden34Island as his residence in October 2002 and changing it in March352008 to the Eastmoreland home he purchased a year earlier.36

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14. Charles Hales after March 18, 2008, and before the 2012 general election had1

not filed another Oregon voter registration application.2

3JURISDICTION OF SECRETARY OF STATE TO ENFORCE VOTER4

REQUIREMENTS56

15. The Secretary of State has jurisdiction to consider this Complaint pursuant to7

ORS 246.110 (which designates the Secretary of State as the states "chief8

elections officer") and ORS 260.345 (which requires the Secretary of State to9

investigate every written complaint alleging that a violation of an election law10

has occurred). ORS 260.345(3) requires:11

(3) Upon receipt of a complaint under subsection (1) or (2) of this12

section the Secretary of State or Attorney General immediately13

shall examine the complaint to determine whether a violation of an14

election law or rule has occurred and shall make any investigation15

the Secretary of State or Attorney General considers necessary.16

16. This jurisdiction is not limited to violations of election laws adopted by the17

Oregon Legislature; it applies to all election laws, including those of the City18

of Portland.19

17. The Secretary of State has refused to investigate the Complaint filed by20

Plaintiff on September 27, 2012, and is in derogation of her duty to do so.21

18. The Complaint filed by Plaintiff on September 27, 2012, is attached to this22

Complaint and is fully incorporated into this Complaint. It documents the23

following violations of law by Charles Hales.24

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19. The Secretary of States response to the Complaint filed by Plaintiff on1

September 27, 2012, is an order in other than a contested case and is attached2

to this Complaint.3

4VIOLATION NO. 1: Charles Hales unlawfully voted in Oregon, several5times, during the years 2004 through 2009.6

720. This violation of law is set forth in the attached Complaint filed by Plaintiff8

with the Secretary of State on September 27, 2012, which is fully9

incorporated into this Complaint by reference.10

11VIOLATION NO. 2: Charles Hales continued to vote unlawfully in Oregon12after changing his residence and domicile back to Oregon as of 2010.13




18VIOLATION NO. 3: Charles Hales made a false swearing in his voter19registration application filed on March 18, 2008.20




25

VIOLATION NO. 4: Charles Hales made false swearings in signing each of26his vote-by-mail envelopes submitted in Oregon since the beginning of 2004.27




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VIOLATION NO. 5: Charles Hales violated Portland City Code 2.08.0501and Portland City Charter 2-202 and is not legally qualified to become a2candidate for Mayor of Portland or to serve in that office.3




8FIRST CLAIM FOR RELIEF: DECLARATORY RELIEF9

1025. Plaintiff realleges and incorporates herein the allegations contained in 1-11

24.12

26. Plaintiff is entitled to a determination under ORS 28.010, ORS 246.910),13

ORS 183.484, and/or ORS 183.490 that Charles Hales has violated the laws14

of Oregon, as detailed above.15

16SECOND CLAIM FOR RELIEF: REVIEW OF ORDER IN OTHER THAN17

A CONTESTED CASE18


24.21

28. Plaintiff is entitled under ORS 183.484 to judicial review of the Secretary of22

States determination in other than a contested case that Charles Hales is not23

in violation of the laws of Oregon, as detailed above.24

25THIRD CLAIM FOR RELIEF: INJUNCTIVE RELIEF26


24.29

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30. Plaintiff is entitled to an injunction requiring the Secretary of State to enforce1

the laws of Oregon against the violations shown above.2

3

WHEREFORE, Plaintiff prays for the following relief:4

1. An order declaring that:5

A. Charles Hales has violated the laws of Oregon, as detailed above.6

B. The Secretary of State erred in concluding that no violations had7

occurred.8

2. An order of injunction, ordering that Defendant shall pursue and enforce the9

violations of law detailed above.10

3. An order awarding Plaintiff his costs against Defendant pursuant to OCRP11

68B, ORS 20.120, and ORS 20.190.12

4. An order imposing all other and further relief as to which Plaintiff may be13

entitled and which the Court may deem just and equitable.14

15

Dated: March 18, 201316

17 Seth Alan Woolley3403 N.E. Stanton Street

Portland, OR [email protected]

Pro Se181920

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SECRETARY OF STATE FOR THE STATE OF OREGON

In the matter of:

Alleged Unlawful Voting, Unlawful

Voter Registration, and False

Swearings by Charles Hales;

Disqualification from City of

Portland Candidacy and/or Service

in City of Portland Office, if Elected

in November 2012

COMPLAINT

Unlawful Voting

Unlawful Voter Registration

False Swearing on Voter

Registration Form

False Swearings on Vote-by-Mail

Envelopes

INTRODUCTION

Complainant alleges that Charles Hales, who states his current residence as 7136 S.E.27th Avenue, Portland, Oregon:

1. unlawfully voted in Oregon several times since the beginning of 2004;

2. unlawfully registered to vote in Oregon in 2008;

3. made false swearings on his voter registration card filed on March 18,2008;

4. made false swearings in signing each of his vote-by-mail envelopessubmitted in Oregon since the beginning of 2004; and

5. violated Portland City Code 2.08.050 and Portland City Charter 2-202 and is not legally qualified to be a candidate for Mayor ofPortland or to serve in that office.

Complainant requests that your response to this Complaint be communicated to me byemail to [email protected], as I am currently away from my residence.

This Complaint is based upon facts reported in Oregon newspapers over the past year.Most of these violations of law stem from the apparent fact, reported by thosenewspapers, that Charles Hales for the years 2004 through 2009 filed Oregonnonresident income tax returns, each of which stated that his residence address was inStevenson, Washington (and not in Oregon) for the entire year.

A person who files an Oregon nonresident income tax return is required by law toswear under oath that he is not a "resident" of Oregon. Oregon law defines "residentof this state" for income tax purposes as "An individual who is domiciled in this state."Oregon tax regulations define "domicile" as "the place an individual considers to be


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the individuals true, fixed, permanent home." Thus, Charles Hales swore to the Stateof Oregon on all of his 2004-09 income tax returns that his "true, fixed, permanenthome" during all of those years was not in Oregon.

Because he stated that his "true, fixed, permanent home" was not in Oregon, Charles

Hales was not qualified to vote in Oregon elections during 2004-09, was not qualifiedto register to vote in Oregon when he purported to do so in 2008, was not qualified tobecome a candidate for Mayor of Portland in 2011, and is not legally qualified to servein any elected office of the City of Portland.

In addition, his statement on his 2008 voter registration card that he resided at 7136S.E. 27th Avenue, Portland, Oregon, appears to be a false swearing, because for 2008and 2009 he continued to assert to the State of Oregon that his residence and domicile(his "true, fixed, permanent home") were in Washington.

Also, his signature on his vote-by-mail envelopes submitted to Oregon electionsauthorities since the beginning of 2004 appear to constitute false swearings that he waslegally qualified to vote in the county that issued the ballots. He was not so qualified,because he did not have a valid Oregon voter registration since the time that he sworethat his residence and domicile were in Washington.

His signature on his vote-by-mail envelopes submitted to Oregon elections authoritiesprior to March 18, 2008, appear to constitute additional false swearings that he stilllived at the address where he was registered to vote, an address on Hayden Island,which again is contradicted by his sworn statements in his 2004-09 Oregon income taxreturns.


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Complainant alleges:

FACTS

1. Complainant Seth Alan Woolley is an elector of Oregon who resides at 3403

N.E. Stanton Street in Portland, Oregon.

2. Charles Hales resigned his position as an elected Portland City Commissioner inApril 2002.

3. THE OREGONIAN reported on June 27, 2011 (attached):

"From 2004 to 2009, Hales and his wife, Nancy, claimed residency inStevenson, Wash. They filed tax returns claiming their home inWashington -- which, unlike Oregon, has no personal income tax.

At the same time, Hales kept voting in Oregon elections."

4. WILLAMETTE WEEK reported on April 11, 2012 (attached):

Between 2004 and 2009, Hales told Oregon tax officials thatStevenson, Wash., was his residence.

5. WILLAMETTE WEEK on June 27, 2011 (attached) reported receiving email fromCharles Hales, stating (emphasis added):

After our marriage, Nancy and I lived in her home in Stevenson and inour condo on Hayden Island. Starting in 2004 and until 2009, we filed

our joint federal and Oregon tax returns as residents of Washington.

6. WILLAMETTE WEEK reported on April 4, 2012 (attached) that Charles Halescontinued to file his income tax returns for the year 2009 as a resident ofWashington:

As WWfirst reported last summer, Hales created a problem for himself(and saved some money) by claiming Washington residency for taxpurposes in 2008 and 2009. Unlike Oregon, which has one of thenations highest income tax rates, Washington does not levy incometaxes. * * *

The tax returns [2008-2010] he provided WW show that Hales savedhim about $30,000 in Oregon income taxes for the two years heclaimed Washington residency.

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7. Charles Hales remained registered to vote in Oregon at an address on HaydenIsland until March 18, 2008. On that date, he filed a form to register to vote as aresident of Oregon residing at 7136 S.E. 27th Avenue in Portland.

8. THE OREGONIAN reported on June 27, 2011 (attached):

During that time [2004-09], he claimed residency in Stevenson [WA],where his second wife owned a home, which meant salary earnedoutside Oregon was not taxable. But he voted in 15 of 19 MultnomahCounty elections, listing a condominium on Hayden Island as hisresidence in October 2002 and changing it in March 2008 to theEastmoreland home he purchased a year earlier.

9. Charles Hales since March 18, 2008, has not filed another Oregon voterregistration application.

JURISDICTION

The Secretary of State has jurisdiction to consider this Complaint pursuant to ORS246.110 (which designates the Secretary of State as the states "chief elections officer")and ORS 260.345 (which requires the Secretary of State to investigate every writtencomplaint alleging that a violation of an election law has occurred). ORS 260.345(3)requires:

(3) Upon receipt of a complaint under subsection (1) or (2) of this sectionthe Secretary of State or Attorney General immediately shall examine thecomplaint to determine whether a violation of an election law or rule has

occurred and shall make any investigation the Secretary of State or AttorneyGeneral considers necessary.

This jurisdiction is not limited to violations of election laws adopted by the OregonLegislature; it applies to all election laws. Thus, your conclusion in your letter to meof April 19, 2012, that the Secretary of State has no jurisdiction over the allegedviolation of Portland City Code 2.08.050 and Portland City Charter 2-202 (and isthus not legally qualified to be a candidate for Mayor of Portland or to serve in thatoffice) is incorrect.

Your letter also incorrectly stated that "county elections officials have the responsibility

to determine voter eligibility." Your letter cites no legal authority for that conclusion.ORS 247.174 states:

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Determining if person qualified to register or update registration;hearing.

(1) The qualifications of any person who requests to be registered or toupdate a registration shall be determined in the first instance by the county

clerk or official designated by the county clerk to register persons aselectors from the evidence present.

Note that the county official merely determines the qualifications of the person "in thefirst instance." This does not excuse the Secretary of State from her responsibility toenforce Oregons election laws, including those pertaining to voter registration.

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VIOLATION NO. 1: Charles Hales unlawfully voted in Oregon, several times,during the years 2004 through 2009.

1. Charles Hales voted repeatedly in Oregon during 2004-09.

As indicated by the recitation above, THE OREGONIAN on June 17, 2011, reported thatCharles Hales voted in 15 of 19 Multnomah County elections during the 2004-09period.

2. Charles Hales repeatedly swore to the State of Oregon that his domicileand residence during 2004-09 were not in Oregon.

The recitation above indicates that Charles Hales filed Oregon nonresident income taxreturns for the years 2004 through 2009.

A person who files an Oregon nonresident income tax return is required by law toswear under oath that he is not a "resident" of Oregon. Oregon Form 40N requiresthat the taxpayer state his current address and be a nonresident of Oregon. Theinstructions state: "Youre a nonresident if your permanent home was outside Oregonall year." Just above the signature line for the taxpayer is this attestation: "Underpenalty for false swearing, I declare that the information in this return is true, correct,and complete."

Under Oregon tax law, the term "resident" refers to someone whose "domicile" is inOregon.

Oregon imposes a state income tax on every resident of this state and everynonresident with Oregon-source income. ORS 316.037(1), (3). Oregon

defines a "resident" as "[a]n individual who is domiciled in this state * * *."ORS 316.027(1)(a)(A). Thus, residency is statutorily equated with domicile.Domicile is a common law concept composed of two components: (1) "afixed habitation or abode in a particular place" and (2) "an intention toremain there permanently or indefinitely." dela Rosa v. Dept. of Rev. (delaRosa), 313 Or 284, 289, 832 P.2d 1228 (1992) (citation omitted). OregonAdministrative Rule (OAR) 150-316.027(1)(1)(a) defines "domicile" as "theplace an individual considers to be the individuals true, fixed, permanenthome" and as "the place a person intends to return to after an absence."Although an individual can have more than one residence, he "can have butone domicile." dela Rosa, 313 Or at 289 (citation omitted).

Hillenga v. Department of Revenue, 2012 WL 858581 (Oregon Tax Court 2012).

Thus, by filing Oregon income tax returns as an Oregon nonresident for the years2004-09, Charles Hales necessarily asserted to the State of Oregon that during those

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years he was not domiciled in Oregon. This is further confirmed by the instructionsfrom the State of Oregon for filing nonresident returns:

Nonresident: You are a nonresident if your permanent home is outsideOregon all year.

Charles Hales repeatedly asserted to the State of Oregon that his domicile andresidence during 2004-09 were not in Oregon for any part of those years and that his"permanent home is outside Oregon all year."

3. A person without Oregon domicile or residence cannot lawfully remaina registered voter in Oregon.

Despite his move to Washington and his sworn lack of domicile in Oregon for 2004-09, Mr. Hales did not cancel his Oregon voter registration, and he continued to vote inOregon elections during the 2004-09 period.

A person who is not domiciled in Oregon is not eligible to be a registered voter inOregon or to vote in Oregon elections. ORS 247.035 provides:

(1) An elections official, in determining the residence and qualifications of aperson offering to register or vote, shall consider the following rules, so faras they may be applicable:

(a) The persons residence shall be the place in which habitation isfixed and to which, when the person is absent, the person intends toreturn.

(b) If a persons property is split by a jurisdictional line, the personshall be registered where the residence is located. If the residence issplit by a jurisdictional line, the person shall register where the greatestvalue of the residence is located according to county assessment andtaxation records.

(c) A person shall not be considered to have gained a residence in anylocation in this state into which the person comes for temporarypurposes only, without the intention of making it the persons home.

(d) If a person moves to another state with the intention of making a

permanent home, the person shall be considered to have lost residencein this state.

(e) If a person goes from this state into any other state orterritory and votes there, the person shall be considered to havelost residence in this state.

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(f) A person who has left the place of the persons residence for atemporary purpose only shall not be considered to have lost residence.

(2) Notwithstanding subsection (1) of this section, a person who has left theplace of the persons residence for a temporary purpose only, who has not

established another residence for voter registration purposes and who doesnot have a place in which habitation is fixed shall not be considered to havechanged or lost residence. The person may register at the address of theplace the persons residence was located before the person left.

1. Charles Hales during the years 2004-09 did not qualify as anOregon resident under ORS 247.035(1).

Mr. Hales did not qualify as an Oregon resident under ORS 247.035(1). He failed tosatisfy subsection (a), the basic rule, because he did not have a fixed habitation inOregon "to which, when the person is absent, the person intends to return." Thisstatute defines "residence" by using the exact terms that define "domicile":

(a) The persons residence shall be the place in which habitation isfixed and to which, when the person is absent, the person intends toreturn.

Instead, Mr. Hales asserted to the State of Oregon in sworn statements that hisdomicile for all of the years 2004-09 was in Washington, pursuant to this statutorydefinition of "Domicile" in ORS 316.027(1):

(a) "Domicile" means the place an individual considers to be theindividuals true, fixed, permanent home. Domicile is the place a person

intends to return to after an absence. A person can only have one domicileat a given time.

Mr. Hales asserted in his Oregon nonresident tax returns for each of the years 2004-09that he did not have domicile in Oregon, which means he necessarily asserted that hedid not consider Oregon to be his true, fixed, permanent home. Consequently, henecessarily failed the basic test for Oregon residency under ORS 247.035(1)(a).

Oregon courts have recognized that "residency" under ORS 247.035 is the same as"domicile" under Oregon tax law. Caton v. Department of Revenue, 2004 WL2212147 (Or Tax Court 2004), for example, concluded that Ms. Catons domicile for

income tax purposes was in Oregon:

During the years Plaintiff claims not to be domiciled in Oregon, she was aregistered Oregon voter, and vote several times. Voter registration requiresthe voter to swear to Oregon residency [citing ORS 247.035]. Plaintiffs

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claim that she was not domiciled in Oregon is inconsistent with being aregistered Oregon voter.

The Court recognized that the test for voting residence and tax domicile are the same.By disclaiming, under oath, Oregon domicile for tax purposes, Mr. Hales was also

disclaiming Oregon residency for voting purposes.

In addition, ORS 247.035(1)(d) independently makes clear that Charles Hales was notan Oregon resident during 2004-09.

(d) If a person moves to another state with the intention of making a permanenthome, the person shall be considered to have lost residence in this state.

Mr. Hales swore under oath in his Oregon nonresident tax returns for each of the years2004-09 that his domicile was in Washington, which means he necessarily asserted thatWashington was "the place" he "considers to be the individuals true, fixed, permanenthome." That by itself proves that he "move[d] to another state with the intention ofmaking a permanent home" and thus "lost residence in this state" for voting purposes.

2. Charles Hales during the years 2004-09 did not qualify as anOregon resident under ORS 247.035(2).

ORS 247.035(2) states:

Notwithstanding subsection (1) of this section, a person who has left theplace of the persons residence for a temporary purpose only, who has notestablished another residence for voter registration purposes and who doesnot have a place in which habitation is fixed shall not be considered to have

changed or lost residence. The person may register at the address of theplace the persons residence was located before the person left.

Mr. Hales failed to qualify as an Oregon resident under ORS 247.035(2), whichrequires that the person "does not have a place in which habitation is fixed." Thissubsection is aimed at persons such as traveling salespersons living in motels ormembers of the military forces living in barracks or college students living indormitories or apartments. Charles Hales asserted in his Oregon nonresident taxreturns for each of the years 2004-09 that his domicile was in Washington, whichmeans he necessarily asserted that he had a "true, fixed, permanent home" inWashington and was not roaming around without fixed habitation.

Mr. Hales certainly had a fixed habitation during 2004-09. He was not a vagrant or astudent living in dormitories or a traveling salesperson or a soldier living in variousmilitary barracks. Both before and after the time he last registered to vote in Oregon(2008), he swore to the State of Oregon that his fixed habitation was his home inWashington.

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Further, even if somehow Charles Hales can somehow (1) recharacterize his swornstatements to the State of Oregon that during 2004-09 his residence and domicile werein Washington and (2) retroactively deny that he had "a place in which habitation isfixed," anywhere, he remains not lawfully registered to vote in Oregon under ORS247.035(2), because the statute authorizes only that the person "may register at the

address of the place the persons residence was located before the person left." BeforeCharles Hales left for Washington, his residence was on Hayden Island. When heallegedly returned in 2008, he did not register to vote at that address. Instead, heregistered using the address 7136 S.E. 27th Avenue, Portland, Oregon.

Finally, if Mr. Hales was only "temporarily away from Oregon," then he falsely sworeto the State of Oregon at least 6 times on his "nonresident" Oregon income tax returnsthat he was not a resident of Oregon.

On April 18, 2012, Tim Scott, Director of Elections for Multnomah County, wrote tome:

To address the second question of whether Charles Hales was eligible to beregistered to vote in Multnomah County when he lived in Washington State,ORS 247.035(1)(a) states:

The persons residence shall be the place in which habitation is fixedand to which, when the person is absent, the person intends to return.

In the same interview of April 18, 2012, I asked Mr. Hales if, during thetime he lived in Washington State, he considered his Oregon residenceaddress the place to which his habitation was fixed, and whether or not heintended to return. He said that during that time he considered himself to

be temporarily away and that he always intended to return to his Oregonresidence.

First, Mr. Scott conducted no formal investigation, and Mr. Hales was not put underoath. Second, the statement attributed to Mr. Hales does not negate the fact that hehad a fixed habitation in Washington during those years and swore to that fact 6 timesin his Oregon nonresident income tax returns for 2004-09. Third, if it is true that"during that time he considered himself to be temporarily away and that he alwaysintended to return to his Oregon residence" and was thus continuously during that timean Oregon resident, then he committed tax fraud by filing 6 consecutive nonresidentOregon income tax returns for the years 2004-09.

In addition, the law requires residence and domicile to be determined on the basis ofthe persons actions, not his later, self-serving declarations.

"[T]riers of the fact of domicile rely heavily upon the overt acts of theindividual as true indicators of his state of mind. Nevertheless, the whole

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aim of the inquiry is to discern the true intent." Hudspeth v. Dept. ofRevenue (Hudspeth), 4 OTR 296, 298-99 (1971). Thus, "determination ofan individuals domicile is based on intent supported by facts andcircumstances rather than merely the statements of the individual." Butler v.Dept. of Rev. (Butler), TC-MD No 050801 D, WL 2041284 at *4 (July 18,

2006).

Hillenga v. Department of Revenue, supra, 2012 WL 858581 (Oregon Tax Court2012). Hudspeth, 4 OTR at 298, supra, noted:

Regrettably, there have been instances in which the individual subsequentlyfound it to his advantage to deny his intent. Self-serving statements aretherefore suspect and the triers of the fact of domicile rely heavily upon theovert acts of the individual as true indicators of his state of mind.

The overt acts of Mr. Hales were his sworn statements on his 2004-09 tax returns thathe was a full-time nonresident of Oregon.

Why do these sworn statements by Mr. Hales on his 2004-09 tax returns override theevidence of Oregon residency consisting of his alleged continuing voter registration inOregon elections during that period? Because:

(1) His sworn statements on his tax returns werThe20powee made after he lastregistered to vote in Oregon before moving to Washington; and

(2) The Oregon Supreme Court has ruled that registering to vote is very weakevidence of domicile.

In Volmer v. Volmer, 231 Or 57, 60 (1962), the Oregon Supreme Court stated:

As noted by the court in Miller v. Miller, 67 Or at 366-367, 136 P 15, theact of registering to vote often is self-serving and, standing alone, is entitledto little weight.

3. The factors under ORS 247.035(3) are not necessary, but none ofthem show that Charles Hales qualified as a resident of Oregonduring 2004-09.

ORS 247.035(1) and (2) establish the standards for determining whether a personqualifies to be a registered voter in Oregon. Where the application of those provisionsmay not be clear, ORS 247.035(3) offers criteria as guidelines:

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(3) An elections official may consider, but is not limited to considering, thefollowing factors in determining residency of a person for voter registrationpurposes:

(a) Where the person receives personal mail;

(b) Where the person is licensed to drive;

(c) Where the person registers motor vehicles for personal use;

(d) Where any immediate family members of the person reside;

(e) The address from which the person pays for utility services; and

(f) The address from which the person files any federal or state incometax returns.

In this case, it is clear that Charles Hales did not qualify to be an Oregon registeredvoter under ORS 247.035(1) and (2), so reference to ORS 247.035(3) is not proper ornecessary.

If the ORS 247.035(3) factors are considered: To date, Complainant is not aware forthe period 2004-09 where Charles Hales received his personal mail, where he waslicensed to drive, where he registered motor vehicles for personal use, where hisimmediate family members resided, or where he paid for utility services. TheSecretary of State should seek authenticated information on these matters (whichMultnomah County did not). It is known, however, from the press articles cited abovethat he filed his federal and state income tax returns from his address in Washington.

4. Voting in an Oregon election while not lawfully registered in Oregonviolates several laws.

1. ORS 260.694(4).

ORS 260.694(4) states:

A person may not vote or offer to vote in any election knowing the personis not entitled to vote.

Violation of this statute is a Class A misdemeanor, punishable by a prison term of upto one year and/or a fine of $6,250. ORS 260.993(3), ORS 161.615(1), ORS161.635(1)(a).

The "knowing" element of a crime does not require proof of a defendants actualmental state of guilt of a specific crime. ORS 161.085(8) provides:

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"Knowingly or with knowledge, when used with respect to conductor to a circumstance described by a statute defining an offense, meansthat a person acts with an awareness that the conduct of the person isof a nature so described or that a circumstance so described exists."

State v. Bell, 220 Or.App. 266, 185 P.3d 541 (2008), explained:

The state may prove a defendants knowledge with circumstantial evidenceand reasonable inferences flowing from that evidence. Delgado v. Souders,334 Or. 122, 135, 46 P.3d 729 (2002).

The circumstantial evidence here is that Charles Hales knowingly asserted to the Stateof Oregon for each of the years 2004-09 that he was not a resident or domiciliary ofOregon. It can be inferred that he knew that the privilege of voting in Oregonelections was limited to Oregon residents.

In a recent Oregon case, the Ninth Circuit Court of Appeals concluded:

What the law presumes is that everyone is aware of the obligations the lawimposes on them. When a piece of legislation--usually of a criminal nature--adjusts the legal responsibilities of citizens, they cannot escape the effect ofthat law by claiming ignorance. Were the rule otherwise, citizens couldfrustrate the legislatures exercise of authority by an ostrich-like effort not tolearn their legal obligations.FN4

FN4. Cases in which the Oregon Supreme Court has invoked thisadage do, indeed, all involve situations where the law in questionimposed a specific obligation on the individual. For example, Dungey

v. Fairview Farms, Inc., 205 Or. 615, 290 P.2d 181 (1955), dealt witha driver knowing what a "residence district" was for purposes of themotor vehicle laws.

Bibeau v. Pacific Northwest Research Foundation Inc., 188 F.3d 1105, 1110-11(1999).

2. 260.715(6).

Voting by Charles Hales in Oregon elections during 2004-09 appears to have violatedORS 260.715(6):

A person may not willfully place a fraudulent ballot among the genuineballots.

His ballots during those years were fraudulent, because he was not validly registered tovote in Oregon, as shown above. This is a Class C felony, punishable by a fine of up

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to $125,000 and/or a prison term of up to 5 years. ORS 260.993(2); ORS 161.605(3);ORS 161.625(1)(d).

3. ORS 247.009.

Voting by Charles Hales in Oregon elections since 2004 appears to have violated ORS247.009:

Unless specifically provided otherwise, a person may vote in an election ofa political subdivision of this state only if the person is an elector registeredin the political subdivision.

If Charles Hales was not a validly registered elector in any of the political subdivisionsapplicable to the address on Hayden Island or the address at 7136 S.E. 27th Avenue,Portland, Oregon, during the years 2004-09, each of his votes in those electionsviolated ORS 247.009. Each is subject to a civil penalty of up to $250 for eachviolation, pursuant to ORS 260.995.

4. Article II, 2, of the Oregon Constitution.

Voting by Charles Hales in Oregon elections since 2004 appears also to have violatedArticle II, 2, of the Oregon Constitution, which states:

Section 2. Qualifications of electors.

(1) Every citizen of the United States is entitled to vote in all elections nototherwise provided for by this Constitution if such citizen:

(a) Is 18 years of age or older;

(b) Has resided in this state during the six months immediately precedingthe election, except that provision may be made by law to permit a personwho has resided in this state less than 30 days immediately preceding theelection, but who is otherwise qualified under this subsection, to vote in theelection for candidates for nomination or election for President or VicePresident of the United States or elector of President and Vice President ofthe United States; and

(c) Is registered not less than 20 calendar days immediately preceding any

election in the manner provided by law.

Charles Hales did not meet these requirements, because he had not "resided in thisstate during the six months immediately preceding the election" and was not registeredto vote in the manner provided by law.

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VIOLATION NO. 2: Charles Hales continued to vote unlawfully in Oregon afterchanging his residence and domicile back to Oregon as of 2010.

Charles Hales changed his domicile and residence back to Oregon as of 2010, asindicated by his filing of an Oregon resident state income tax return for that year.

Since then, however, he has not lawfully registered to vote in Oregon.

His current alleged Oregon voter registration is based upon his filing of a voterregistration card on March 18, 2008, listing his Oregon residence address as 7136 S.E.27th Avenue, Portland, Oregon. At that time, however, Charles Hales was not a legalresident of Oregon, because he swore to the State of Oregon that Washington was histrue, fixed, permanent home during all of 2008 (and all of 2009). See Violation No. 1,part B, above. Consequently, his attempt at that time to register to vote in Oregon wasinvalid and did not result in a valid voter registration.

ORS 247.012(3) provides:

Registration of a qualified person occurs:

(a) When a legible, accurate and complete registration card is received inthe office of any county clerk, the Office of the Secretary of State, an officeof the Department of Transportation, a designated voter registration agencyunder ORS 247.208 or at a location designated by a county clerk undersubsection (7) of this section.

The voter registration card filed by Charles Hales on March 18, 2008, was notaccurate, because it stated that his residence was in Oregon. Thus, his registration as avoter in Oregon did not occur.

According to the Secretary of States current voter registration database, Charles Halessince March 18, 2008, has not filed another Oregon voter registration card. He has notfiled such a card since resuming his residence in Oregon in 2010. Consequently, he isnot validly registered to vote in Oregon, and his votes in Oregon elections in 2010,2011, and 2012 were unlawful, in addition to his votes in Oregon elections during theyears 2004-09.

While county elections officers can investigate and cancel invalid voter registrationsunder ORS 247.174(2) and ORS 247.195, it is the Secretary of State who hasjurisdiction to investigate violations of Oregon law pertaining to voting. Since Charles

Hales voted in Oregon several times during the years 2008-12 based upon a voterregistration which did not validly occur, the Secretary of State has jurisdiction toinvestigate and prosecute these violations and refer criminal violations to the AttorneyGeneral for prosecution.

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As with his votes in Oregon during 2004-09 discussed above, his votes in Oregonsince March 18, 2008, appear to have violated ORS 260.715(6), ORS 247.009, andArticle II, 2, of the Oregon Constitution. The available penalties for each violationinclude:

> a fine of up to $125,000 and/or a prison term of up to 5 years,pursuant to ORS 260.993(2), ORS 161.605(3), ORS 161.625(1)(d); and

> a civil penalty of up to $250 for each violation, pursuant to ORS260.995.

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VIOLATION NO. 3: Charles Hales made a false swearing in his voterregistration application filed on March 18, 2008.

As noted above, Charles Hales filed an Oregon voter registration card on March 18,2008, listing his Oregon residence address as 7136 S.E. 27th Avenue, Portland,

Oregon. At that time, however, Charles Hales was not a legal resident of Oregon,because he swore to the State of Oregon that Washington was his true, fixed,permanent home during all of 2008. See Violation No. 1, part B, above.

Consequently, he made false statements on his Oregon voter registration card: theclaim that his residence address was in Oregon and that he was qualified to be anelector. His signature on the card attested to this declaration:

"I swear or affirm that I am qualified to be an elector and I have told thetruth on this registration."

This attestation is required by ORS 247.171(3)(f) and ORS 247.171(7).

ORS 247.171(5) prohibits any person from supplying any information on his voterregistration card "knowing it to be false." Violation of ORS 247.171(5) is a Class Cfelony, punishable by a fine of up to $125,000 and/or a prison term of up to 5 years.ORS 260.993(2); ORS 161.605(3); ORS 161.625(1)(d).

The meaning of the term "knowing" as an element of a criminal offense is discussed atpage 10 above. The government could conclude that Charles Hales knew that hisclaim of residence in Oregon in 2008 was false, because he knew that he had filedOregon nonresident income tax returns in each of the years 2004-09 and in each ofthose filings swore that he was not a resident of Oregon during each year.

In addition, attesting to false information, when such information is required under theelection laws, is also a violation of ORS 260.715(1):

A person may not knowingly make a false statement, oath or affidavit whena statement, oath or affidavit is required under the election laws.

Charles Hales appears to have violated this statute by falsely claiming on his voterregistration card to be a resident of Oregon and to be "qualified to be an elector."Violating ORS 260.715(1) is a Class C felony, punishable by a fine of up to $125,000and/or a prison term of up to 5 years. ORS 260.993(2); ORS 161.605(3); ORS

161.625(1)(d).

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VIOLATION NO. 4: Charles Hales made false swearings in signing each of hisvote-by-mail envelopes submitted in Oregon since the beginning of 2004.

Charles Hales appears to further have violated ORS 260.715(1) each time he voted inOregon since the beginning of 2004 by signing each of his vote-by-mail ballots

submitted to a county elections office in Oregon. As indicated in the VOTE BY MAILPROCEDURES MANUAL (p. 113) published by the Secretary of State, a person signing avote-by-mail envelope is certifying that:

I am the person to whom this ballot was issued.I am legally qualified to vote in the county that issued this ballot.This is the only ballot I have voted this electionI still live at the address where I am registered to vote.

Signing each of such envelopes was certifying that the signer was legally qualified tovote in the county that issued this ballot. But Charles Hales had not been so qualifiedsince the beginning of 2004. Further, for each of his votes in 2004, 2005, 2006, 2007,and until March 18, 2008, he was also certifying that he still lived at the address wherehe was registered to vote (the Hayden Island address). But, as shown above, he sworeto the State of Oregon that his residence and domicile were in Washington for theyears 2004-09. Thus, each of those certification were false statements for that reasonas well.

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VIOLATION NO. 5: Charles Hales violated Portland City Code 2.08.050 andPortland City Charter 2-202 and is not legally qualified to become a candidatefor Mayor of Portland or to serve in that office.

The Secretary of State has authority under ORS 246.110 and ORS 260.345 to enforce

any "election law." This includes election laws adopted by Oregon municipalities.

Portland City Code 2.08.050 sets out the qualifications to run for Portland cityoffice:

2.08.050 Qualifications of Candidates.

A. Eligible electors filing for city offices shall meet thequalifications for elected officials described in Charter Section2-202. The candidate shall be a citizen of the United States andof the State of Oregon, and a registered voter in the City ofPortland who shall have been a resident of the City of Portlandor of an area which has become part of the City prior to filingthe declaration of candidacy or petition for nomination, for aperiod of not less than one year immediately preceding thenominating election. * * *

C. The City Elections Officer shall reject the filing for candidacy ifthe City Elections Officer finds that a candidate is not aregistered voter in the City of Portland, would otherwise beunable to qualify as an officer if elected, or if the filing is not incompliance with the law or the requirements of this Chapter inany other way.

Under this law, Charles Hales was not eligible to lawfully file a candidacy for mayoror any other Portland city office. At the time of his filing (May 2011), he was not "aregistered voter in the City of Portland" for the reasons set forth at Violation No. 2above: His purported Oregon voter registration depends solely upon the registrationcard he filed on March 18, 2008. But that card was not accurate, because it stated thathis residence was in Oregon at the same time he was swearing, annually, that his true,fixed, permanent residence and domicile were in Washington. Thus, his registration asa voter in Oregon did not occur, because ORS 247.012(3) requires that the "qualifiedperson" file "a legible, accurate and complete registration card."

As Charles Hales was not legally qualified to file a candidacy for any Portland cityoffice, the Secretary of State should direct the county elections officers for MultnomahCounty, Clackamas County, and Washington County not to tally votes which may becast for him in the November 2012 election. Even if those votes are tallied, Mr. Haleswould rightfully be removed from office, if elected. The Portland City Charter, 2-202, states:

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Section 2-202 Qualifications.

Each elected official shall be a citizen of the United States and of the Stateof Oregon, and a registered voter who shall have been a resident of the Cityof Portland or of an area which has become part of the City prior to filing

the declaration of candidacy or petition for nomination, for a period of notless than one (1) year immediately preceding the nominating election. Ifany officer shall be elected without such qualifications or shall cease to havethe same, the office shall immediately become vacant.

It is not unusual for candidates for public office to be disqualified for failure toestablish the required residency. In In the Matter of the Contested Election of GaryL. Schoessler, 140 Wash.2d 368, 998 P2d 818 (2000), the candidate won theNovember 1999 election for Mayor of Wenatchee. Such a candidate must have been aresident of the city for one year prior to the election. Mr. Schoessler claimed to havebeen a resident of Wenatchee as of November 2, 1998. Noting that the candidate in1999 had filed his 1998 federal tax return with an address in Malaga, Washington, andother factors, the Washington Supreme Court concluded that he had not met theresidency requirement and annulled his election.

Dated: September 27, 2012

Seth Alan Woolley3403 N.E. Stanton StreetPortland, OR [email protected]

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Benjamin Brink/The Oregonian

Charlie Hales' run for Portland mayor now includes questions about his

decision to list Washington as his residence on tax returns but vote in

Oregon.

Portland mayoral candidate Charlie Hales lists Washingtonaddress on taxes but votes in Oregon

Published: Monday, June 27, 2011, 6:50 PM Updated: Saturday, February 18, 2012, 2:32 PM

By

Brad Schmidt, The Oregonian

The way he sees it, Portland mayoral

candidate Charlie Hales lived in two

places at once.

From 2004 to 2009, Hales and his wife,

Nancy, claimed residency in Stevenson,

Wash. They filed tax returns claiming their

home in Washington -- which, unlike

Oregon, has no personal income tax.

At the same time, Hales kept voting in

Oregon elections.

Neither the Oregon Department of

Revenue nor the Oregon Elections

Division said Monday that the situation

was inherently problematic.

Asked whether he considered himself an Oregon or Washington resident during those years, Hales said:

"Both."

"We have tried all our lives to do what's right," he said. "Our accountant gave us advice, and we took it, and

now we've asked him to go back and check it."

Hales angrily countered a report on Willamette Week's website Monday that he made the move to

lower his tax bill. "None of that was done for tax purposes or for political purposes," he said.

Questions about taxes and residency last year tripped up the campaign of gubernatorial candidate

Chris Dudley, who narrowly lost to John Kitzhaber. Dudley claimed a Camas home as his primary

residence in the 1990s, when he was a Trail Blazer, but often spent time at a home in Portland.


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For Hales, the question about residency comes a month after he became the first viable candidate to declare

a 2012 Portland mayoral bid. New Seasons co-founder Eileen Brady is also running and Mayor Sam

Adams is expected to seek re-election.

Political opponents may try to suggest Hales is a tax-dodger, said Tom Hogen-Esch, an associate political

science professor specializing in local politics at Cal State Northridge. But given Hales' previous city

experience and the regularity of Washington residents working in Oregon, Hogen-Esch said many people

may "just sort of shrug their shoulders."

Since leaving his job as a Portland city commissioner in 2002, the 55-year-old Hales has traveled the

country as a vice president for engineering and consulting firm HDR Inc., which also has a downtown

Portland office.

During that time, he claimed residency in Stevenson, where his second wife owned a home, which meant

salary earned outside Oregon was not taxable. But he voted in 15 of 19 Multnomah County elections, listing

a condominium on Hayden Island as his residence in October 2002 and changing it in March 2008 to the

Eastmoreland home he purchased a year earlier. He is not registered to vote in Skamania County, an

election official said Monday.

Steve Trout, state elections director, said it's OK to vote in Oregon but live elsewhere as long as the person

-- say a college student -- expects to return someday.

"As long as there's an intent to return, that's totally legal," he said. But it's potentially a felony to register intwo places, he said.

The Department of Revenue, meanwhile, evaluates residency through factors such as where children attend

school, where cars are registered, where mail is delivered, where a person spends time and where the

person is registered to vote, spokeswoman Rosemary Hardin said.

"That's just one of those things that we would use to help determine residency," she said of voting records.

"But it wouldn't be the only thing. We would weigh all the other things that we look at, if there was a

question or dispute about residency."

-- Brad Schmidt

2012 OregonLive.com. All rights reserved.


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State of CharlieHales cant laugh off residency issue.

Willamette WeekApril 11, 2012

Charlie Hales has been trying to deflect his most embarrassing issue in the mayors race with a joke.

Between 2004 and 2009, Hales told Oregon tax officials that Stevenson, Wash., was his residence.

He now tells voters that, after serving on the City Council, he moved out of Portland for love: He hadremarried, and his new wife, Nancy, lived in Stevenson.

I didnt move to Washington to cut my taxes. I moved to Washington to sleep with my wife, Hales said lastfall, in a typical response. As he put it in February, It wasnt tax evasion. It was cohabitation.

But Hales quips gloss over the truth: Hes been trying to have it both ways, claiming it was OK for him toavoid taxes in Oregon while continuing to vote here as if he were a resident.

Last June, WW broke the story about Hales tax avoidance and his voting in Oregon while declaring

Washington to be his residence.

Oregon taxes income in Hales bracket at 10.8 percent. Washington has no income tax.

Hales tax returns show his Washington state residency saved him an estimated $29,900 in 2008 and 2009,the years covered by the returns Hales released to WW.

Claiming youre a nonresident for tax purposes, the Oregon Department of Revenue says, requires declaringyou no longer live in Oregon.

Youre a nonresident if your permanent home was outside Oregon all year, the departments guidelines say.

Meanwhile, Hales kept voting in Oregon, a privilege state law says is reserved for residents.

Records show Hales voted eight times, from 2004 through 2009, in Oregon elections. He did so using aHayden Island address, even as he told Oregon tax officials he actually lived in Washington.

Steve Trout, Oregons Elections Division director, says the state lacks enough information about Halessituation to know whether he violated elections law.

If he had an intent to return, he could remain an Oregon voter, Trout says. Without a complaint and ahearing, theres no way to establish intent.

Republican candidate for governor Chris Dudley faced similar questions in 2010. He had moved to Camas,Wash., in the 1990s to avoid Oregon taxes while playing for the Portland Trail Blazers. But Dudley kept hisvoter registration in Oregon. Unlike Hales, Dudley didnt vote in the years he called himself a nonresident.

When WW asked Hales in June about his residency, he made false statements. He said he never declaredWashington as his residence for tax purposes. I am and have always been an Oregon resident, he said.

Today, Hales says he was mistaken in his statements to WW because he had forgotten that he had filed histaxes as a Washington resident.

I havent spent the last 10 years walking around thinking about my tax returns, Hales says now. Meaculpa. Im not an accountant. COREY PEIN and NIGEL JAQUISS


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June 27th, 2011 By COREY PEIN | News | Posted In: City Hall, Politics

Portland mayoral candidate Charlie Hales has

acknowledged to WWthat from 2004 to 2009

he was a Washington state resident for tax

purposes, and that he moved his residence to

Portland only last year.

Hales confirmed his past tax status in response

to questions from WWabout public records

that document his ties to Washington state

even after he and his wife, Nancy, purchased a

home in Southeast Portland in 2007.

The revelation is significant because

Washington state doesn't have an income tax,and living across the Columbia River can shield

other kinds of income as well, such as

dividends and capital gains, from Oregon tax

liability. An out-of-state resident still pays

Oregon income taxes for work done in the

state.

Hales was elected to the Portland City Council from 1992 until 2002. Since then, he has

worked as a vice president in the Portland office of HDR Inc., a national engineering firm, andspends much of his time working outside of Oregon.

Cross-border tax avoidance last year hurt Chris Dudley, Republican nominee for governor,

who established a Camas, Wash., address while playing for the Portland Trail Blazers in the

1990s. Dudley still maintained a Portland house during that time.

Hales' email to WW follows:

Click to Print


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From 2000 to 2003, I was a divorced single man, living in Portland. I filed federal

and Oregon state tax returns as an Oregon resident. My income during this period

was my City Commissioner salary until June of 2002, and my HDR salary after

that.

In 2004, I married my wife Nancy. Nancy had lived in Washington since 1977,

most of that time in the Gorge in Stevenson and Carson. Nancy worked in

Vancouver, Washington for a non-profit foundation from 1991 - 2007, and then as

a consultant managing small philanthropic foundations. She and her then-teenage

children lived in her house in Stevenson, Washington.

After our marriage, Nancy and I lived in her home in Stevenson and in our condo

on Hayden Island. Starting in 2004 and until 2009, we filed our joint federal and

Oregon tax returns as residents of Washington. Although most of my work was

carried out in other parts of the country, I paid Oregon income taxes for theportion of my time that I was working in Oregon. My income was my HDR salary.

Although we acquired two rental houses during this time period, we havent sold

anything, so I have had no capital gains.

In 2007, with the kids all gone from home, we began a transition, where we

bought and remodeled our house on SE 27th Avenue and gradually started living

here more. Thus the Oregon resident tax returns in 2010 and going forward.

Your questions caused us to review in detail what we have just been doing as apractice in these gradually-changing family circumstances. We have asked [our

family accountant] to take another look at 2008 and 2009 to make sure we did

those years correctly.

In an interview with WWlast week, Hales said he had always been an Oregon resident for tax

purposes, and had lived in his Southeast Portland home since purchasing it in 2007.

"I've never changed my residency for tax purposes," Hales said on Thursday.

On Monday, that story changed.


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April 4th, 2012 By NIGEL JAQUISS | News | Posted In: PDX Votes

Jefferson Smith, Charlie Hales, Eileen Brady - IMAGE:

vivianjohnson.com

All three of the leading mayoral candidates

released their income tax returns to WW

this week. Their decision to do so was a gesture

of transparency because, unlike property taxes,

income tax information is private and

candidates in city races have not typically made

such information available. (The candidates

released their returns to other media only after

WWput in its requests.)

The returns show State Rep. Jefferson Smith

(D-Portland), former City Commissioner

Charlie Hales and businesswoman Eileen

Bradyat very different levels of financial comfortalthough all earned well in excess of the

current Portland median family income for a two-person household of $58,400.

WWasked a senior tax accountant not affiliated with any of the campaigns to review the

returns. The accountant says nothing in terms of excessive deductions or an inconsistent

approach jumped off the page on any of the returns, although the absence of some

documentation makes a conclusive determination impossible.

Here is a brief review of the information the candidates provided:

Jefferson Smith:

Smith provided WWreturns for the tax years 2010 and 2009. Smith earns $21,612 each year

as a member of the Oregon House but as with all three candidates, the filing of a joint return

makes it difficult to figure out who is paid how much in total salary and none of the candidates

provided W2 forms. Smith's wife, Katy Lesowski is a research administrator at OHSU. Smith

and Lesowski showed $96,198 in adjusted gross income in 2010 and $99, 448 in 2009. The

couple, who married in 2009 and have no children, received a helpful one-time lump sum in

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each of the two years: $18,000 in 2009 from Smiths late mothers estate and $33,000 in 2010

from Lesowskis grandmothers estate.

Charlie Hales:

As WWfirst reported last summer, Hales created a problem for himself (and saved some

money) by claiming Washington residency for tax purposes in 2008 and 2009. Unlike Oregon,

which has one of the nations highest income tax rates, Washington does not levy income

taxes. The problem arises from Hales continuing to vote in Oregon, as records show he did,

while claiming Washington residency. A taxpayer may own property in many states but the

law says he can only claim one as his domicile for tax purposes. And Oregon law also says

you can only vote here if you are a resident of Oregon. But Hales defined the state of

residence for him and his wife, Nancy, as Washington. That meant he only owed taxes for

those days he worked in Oregon. And although Hales nominally worked in Portland for theengineering firm HDR, he traveled extensively and attributed only about 7.5 percent of his

income to Oregon in for 2008 and 2009. Hales reported adjusted gross income of $185,945 in

2008; $168,053 in 2009 and $212,180 in 2010. The tax returns he provided WWshow that

Hales saved him about $30,000 in Oregon income taxes for the two years he claimed

Washington residency. In 2010, the issue became moot because Hales declared himself a

resident of Oregon again.

Eileen Brady:

Brady and her husband Brian Rohter reported $10,600,933 in adjusted gross income for the

three most recent tax years. The vast majority of that money came in the form of capital gains

from selling their stake in New Seasons Market. In 2003, three years after New Seasons

launched, its founders, Stan Amy, Chuck Eggert and Rohter distributed some of their stock to

family members, including Brady. The couples 2009 return shows that she sold $2 million

worth of stock that year. Brady and Rohter benefited from the big difference in the federal tax

rate on capital gains15 percentand the top rate for regular income such as wages35

percent. Even with that benefit, over those three years, they paid $1.84 million in federal tax

on their income, an effective federal rate of 17.3 percent. Some Oregonians who have known

they were going to take large capital gains have chosen to move to Washington in anticipation

of that event avoid state taxes (some mayoral candidates have moved there as well). The state

of Oregon, however reaped rewards from Brady and Rohter's decision to stick aroundthe

couple paid $1.062 million in state income tax over the three years, an effective Oregon tax

rate of 10 percent

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