SALEM – The Oregon secretary of state’s office has launched an inquiry into the Oregon Department of Energy’s handling of tax credit sales.
The extent of the investigation is unclear, but a senior auditor from the secretary of state’s office recently requested more than 70 pages of records on privately brokered sales of Oregon business energy tax credits from 2013.
The state awarded the tax credits to owners of renewable energy and efficiency projects, such as a cellulosic ethanol plant and public transit districts across the state. The owners could use the credits to offset their taxes, or sell them at a discount to raise cash.
The Department of Energy traditionally helped project owners find buyers for their tax credits as part of the state program, but private brokers started to negotiate the deals as early as 2009. The department does not verify the sales prices of credits sold in private deals, and energy officials quietly stopped enforcing pricing rules for the sales in 2009, the Pamplin Media Group/EO Media Group Capital Bureau reported in June.
The agency is in the process of retroactively changing pricing rules going back to mid-2012, so deals that violated the rules in place at the time will be legitimate.
Business energy tax credits issued from 2006 to 2014 could cost the state up to $968.1 million in tax revenue, according to the Department of Energy. A big chunk of that cost – $703.6 million – comes from tax credits that were sold to investors.
Although an auditor is conducting the investigation, it is not an actual audit, according to energy agency spokeswoman Rachel Wray.
“Those forms were pulled because the secretary of state’s office has some questions about our processes,” Wray said Tuesday, July 28. “It is not an audit.”
Wray referred other questions about the inquiry to the secretary of state’s office. Tony Green, a spokesman for the secretary of state’s office, declined to comment on the auditor’s work, including the timing of the investigation and what prompted it.
“As you know, the Audits Division has some investigatory responsibilities that are confidential in nature until resolution is reached,” Green wrote in an email.
The secretary of state’s office operates the state’s government waste, fraud and abuse hotline. Under state law, those complaints and the investigation findings are confidential until the agency completes the inquiry.
Hillary Borrud is a reporter with the Pamplin Media Group/EO Media Group Capital Bureau in Salem.
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