WHEN JACK GRAHAM, Portland's longtime chief administrative officer (CAO), was fired last November as head of the Portland Office of Management and Finance (OMF), it wasn't for any one sin in particular.

Rather, officials were very careful to say, the ax fell over a string of foul-ups—many of which played out embarrassingly (for Mayor Charlie Hales) across the front page of the Oregonian.

First that summer, there was an accusation that Graham, back in 2012, had tried, and failed, to improperly transfer water and sewer money out of a reserve account. Then there was a claim Graham had planned to say "oops" if he was caught trying for the transfer. Then there was word of a similar, successful, transfer under Graham's watch the year before.

And, maybe most fatal, there was word that tension between Graham and the city's controller, one of his employees, had grown so thick the treasurer had to take a leave of absence. It wasn't long after that Hales made up his mind.

"I want this city to do its work without distraction," Hales said at the time. "Controversies involving OMF have become a distraction. As the commissioner in charge of OMF, I believe it is now time to make a change."

Of course, that's not the way Graham sees it. Never has been.

And that difference of opinion, whether it's true or not, seems destined to cost the city some money.

Last month, at a strange "name-clearing" hearing—a rarely invoked ritual where fired employees can publicly defend themselves against accusations of misconduct—Graham and his lawyers made clear they thought he was fired because of the botched water and sewer transfer, which they argued was perfectly legal.

But that was just the warm-up.

On Wednesday, April 16, Graham's legal team formally gave word he was planning to sue over his treatment. And while they mentioned the machinations over the money transfer, they mentioned something else: Graham's race. Graham is black. The people he tussled with, above and below him, largely were not.

"From the moment that Mr. Graham was promoted to the position of CAO, thereby becoming the city's first African American CAO and the most senior African American employee of the city," the tort claim notice reads, "city officials have questioned his competency and have permitted his subordinates to do the same due to his race."

The claim goes on to argue that those questions "caused the city to treat him less favorably than his white peers and subordinates and contributed to the city's decision to terminate him."

Graham's lawyer alluded to a few examples in the claim—in one case mentioning anonymous employees complaining of "reverse discrimination." She threatened to bring about a bigger cudgel during trial.

It's a headline-grabbing claim sure to roil a city government that prides itself on its progressive values, never mind its troubled past and still-sensitive present when facing race issues. It also skips over some more clear-cut problems for Graham, like the email exchange with the controller that seems to have tipped Hales' hand.

But maybe that's the point. A trial on Graham's claims would be astoundingly ugly for the city—again, whether they're true or not. And it might be worth the city paying up to make them go away.