(Editor's note: This is a slightly updated version of a story published in this week's edition.)

Last November, Mayor Charlie Hales seemed reasonably clear about why he was firing Jack Graham, who’d worked for years as the city’s top administrator and finance official.

Noting the din of unwanted headlines—led by the Oregonian's scoop that Graham had once been investigated over an attempted transfer of protected utility reserve funds, but also including tiffs between Graham and his subordinates—Hales signaled he wanted a bit of peace and quiet.

“I want this city to do its work without distraction,” Hales, the boss of the city’s Office of Management and Finance, wrote in a statement at the time. “Controversies involving OMF have become a distraction.”

But after Graham stepped down, he gave notice this spring he planned to sue the city—issuing accusations of racial discrimination (Graham is black; his employees and superiors largely white), defamation, and a lack of due process. And in light of that threat, Hales has since clarified his official reasoning.

The mayor has written a letter of reference (pdf) for Graham, formally declaring that “to my knowledge, at no time during his employment with the city did [Graham] commit any financial improprieties.” The letter is a quiet part of a $40,000 settlement with Graham just approved this morning by the Portland City Council. In exchange for both the letter and the money (which covers only Graham's legal fees, and not any damages), Graham has agreed not to try to press his case in a courtroom.

Beyond saying that Graham did nothing wrong, Hales’ letter praises Graham’s “exceptional” work in a former post as the fire bureau’s business manager, and calls him an “extremely dedicated and hard-working” chief administrative officer (CAO). It also blames Graham’s firing on Hales’ desire to focus on his “own priorities and vision for the city.” The distractions mentioned in November are instead chalked up to “speculative coverage by the press.”

“In November 2013, I determined that achieving those priorities would be best supported by selecting a new CAO,” Hales now writes. “Mr. Graham accordingly left the city’s employ in January of 2014.”

Hales’ office has declined to comment on either the settlement generally or the substance of the mayor’s letter.

It’s not clear whether Graham’s race allegations—drawn from easily referenced documents like emails and letters—ever resulted in internal discipline. Anna Kanwit, the city’s human resources director and a former subordinate of Graham’s, did not return messages seeking comment. (Read this post from April for more details on Graham's claims.)

But an analysis (pdf) from the city’s risk management office, which helps vets tort claims, would seem to suggest otherwise.


Graham and his attorneys, however, say there was more at stake than money. They’ve declared victory.

The letter from Mayor Hales, on behalf of the City, is a major step in clearing my name and reaffirming that I provided over 12 years of excellent service to the City. I am also encouraged by Mayor Hales’ action to provide diversity training to white male City managers and I am hopeful that the other City Commissioners will follow the Mayor’s lead to make City government a more fair, tolerable and equitable place for all employees to work regardless of their race, religion, national origin, disability, sex or sexual orientation.