State ends two Measure 110 grants this month over misuse of funds, failure to provide services

The Oregon Health Authority gave $1.2 million to two programs promising to help residents mired in the state’s drug addiction crisis, following approval of the grants last year.

This spring, after distributing most of the money, officials learned about problems with the programs. They terminated the contracts months later and now are trying to figure out how many taxpayer dollars should be returned to the state because it was misspent or not used.

The grants represent a small fraction of the money allocated to various programs as part of Measure 110, which decriminalized possession of hard drugs and dedicated a share of marijuana revenue for programs to help drug addicts across the state. But they raise questions about the state’s vetting process and indicate state officials may have stumbled in Measure 110 oversight after faltering in rolling out the grants.

At stake are the lives of Oregonians addicted to drugs and the livability of communities, with residents complaining about an increase in crime and the spread of people camping on sidewalks since Measure 110 passed in 2020. 

The measure dedicates a share of marijuana taxes for addiction programs, and so far the authority’s Measure 110 oversight committee has awarded more than $260 million to more than 230 programs across the state.

In May, the committee terminated its first contract with a Klamath Falls provider, Red is the Road to Wellness, over misused money. The health authority has demanded it return more than $1 million to the state.

And this month, the oversight committee ended two more contracts – one in Portland and another in Ontario, according to documents obtained by the Capital Chronicle in a public records request.

While the oversight committee awards and can terminate grants, the health authority is responsible for overseeing Measure 110 spending. It has about 17 employees assigned to the program, and the agency plans to add another 10 more, according to Tim Heider, a health authority spokesman.

Providers must submit quarterly reports with information about their spending and how many clients they serve, and authority staff look for discrepancies, he said. When they emerge, agency officials contact the provider to sort them out.

“The fact that only three of the 233 grants that have been formally terminated is a testament to the diligent communication and oversight that is occurring under M110,” Heider said in a statement.

But those three terminations all stem from investigations prompted by complaints – from former employees in the Portland and Ontario cases. The health authority did not discover the problems on its own, and officials do not appear to be verifying whether the services taxpayers are paying for are actually being delivered. In at least these three cases, they weren’t, according to the complaints. 

Heider declined to elaborate on whether the complaints had triggered any changes in agency procedures or whether it would take additional steps to vet applicants, such as checking the public property records of proposed locations.

The latest terminations

The Portland program is overseen by a mental health provider, Bright Transitions, that applied for money through an umbrella organization to run a home for people to overcome drug addiction. They can stay up to a year while receiving counseling and support. 

“After 12 months in the program, our goal is to have the resident employed and moving into independent housing,” the application said.

In Ontario, a faith-based group, Origins Faith Community, won funding to give addicts counseling and support from peers – people who’ve suffered from addiction and are licensed by the state to help others overcome their drug or alcohol abuse. The organization, which is a church, runs a meal program and wanted to use that service to connect any who needed it to treatment programs and housing.

“Team members would work to educate the individuals we encounter on a daily basis at our mealtime outreach,” its application said.

The oversight committee awarded the church $616,000 last August, and in September it granted $896,000 to the Portland program.

In May, the authority received separate complaints about each organization. The complaints said the groups were mismanaging the grants and failing to help people. The names are redacted in the complaint records, but each one indicates that a former employee from each organization filed the complaints.

While the health authority investigated, money continued to flow to the organizations and only stopped when officials determined the grants were not being well spent. 

The terminations come at a time when criticism is growing against Measure 110 amid public drug usage and an increase in overdoses. 

In January, an Oregon secretary of state audit found the health authority had a chaotic approach to administering the grants, with incomplete documentation and inconsistent standards for grants. Auditors said it was too soon to say whether the program would be successful.  And recently, a coalition that includes Nike co-founder Phil Knight filed two ballot measures to recriminalize drug possession and to force addicts to get treated.

Portland recovery home

The health authority has distributed $717,000 – or 80% of its grant – to Bright Transitions to run a recovery home in northeast Portland. The house is supposed to shelter nine people who are recovering from addiction, the organization said in its application. Bright Transitions officials told the authority that women and their children are staying in the house in three bedrooms with twin and bunk beds and that the fourth bedroom is an office.

Grant documents show the money was supposed to be used for costs associated with running the home, including peer support. But the funds were misspent, according to the complaint. The name’s redacted but it indicates the complaint was filed by a former employee, who said they were stunned by the management of the funds and lack of support services.

“I have been working in the mental health and addictions field for 19 years now, and I was horrified,” the complaint said.

One problem was the house payment. The agreement with the state allowed the program to lease a home in its name. Instead, expenditure reports show that Bright Transitions used taxpayer money for $3,000-a-month mortgage payments on the house, which is in the name of its executive director, Jermaine Mason. Reports received by the Capital Chronicle do not indicate how many mortgage payments were made.

“It’s a simple ethical issue,” Caroline Cruz, an oversight committee member, said during a September meeting when the group terminated the contract. “It’s bad business to mix a grant with your own house – period.” 

A sign on the two-story home says it’s providing Measure 110 services. A woman who answered the door would not give her name. She said she “could not confirm or deny” whether Mason was there. She said questions should be directed toward Bright Transitions’ umbrella company, Mind Solutions, which provides mental health services. 

An employee at that company’s offices in northeast Portland also declined to be identified and said Mason was unavailable. 

He did not return multiple emails and phone calls from the Capital Chronicle requesting comment.

Since May, health authority officials have asked Bright Transitions to refute its findings, but records show he has not responded. The organization has also not responded to five requests – between May and September – for proof of workers compensation and employer liability insurance. 

Dean Carson, a spokesman for the Oregon Health Authority, said the four-month period between receiving the complaint and the termination of the contract was necessary to investigate the allegations and to give Mason ample time to respond.

“OHA sought information from Bright Transitions LLC and attempted to work in good faith with Bright Transitions LLC to correct the deficiencies we uncovered,” he said in a statement. 

As part of its investigation, the health authority reviewed the home’s property report and officials are going over the company’s expenditures, looking for misspent funds that were not detected when agency staff reviewed its quarterly reports. 

Carson said the agency will ask for the return of misused money and any unspent funds. Carson declined to say how much that might be as it’s still under review. 

Ontario program

The health authority has given the Ontario-based group, Origins Faith Community, $513,460, or more than 80% of its total award, for its program. The group planned to connect addicts to grant-paid counselors and refer them to other services when they took advantage of its free weekday meal program.

Last November, program officials notified the state that two employees had left the organization. In the months that followed, starting in January and continuing until May, church officials either did not send the required spending reports to the authority or sent incomplete reports that could not be reconciled.

In May, the health authority received a complaint that the group’s executive director had resigned and a Measure 110-funded drop-in center had closed. 

“It just breaks my heart to see this occur in Malheur County where the need is so extreme as it is across the state,” the complaint said.

Later that month, the health authority notified the organization it needed to provide a quarterly report that was due on March 31. In its May 10 notice to Origins Faith Community, the agency asked the organization for information about its services.

A former employee notified the health authority in July that the organization was dissolving, according to an agency PowerPoint presentation to the oversight committee. In July and August, the organization provided information to the authority, but it had errors, and agency officials could not tell what services the organization had provided.

Frank Borst, a board member of Origins Faith Community, told the Capital Chronicle in a phone interview the organization has faced high employee turnover and a shortage of drug and alcohol counselors to staff the program. Those have contributed to the paperwork problems and the organization’s inability to keep the program running, he said.

“If we can’t deliver on all the services required in the grant, then we become ineligible, and that’s what you’re seeing there,” he said.

The program now only has one counselor, and that isn’t enough, Borst said.

Origins has agreed to terminate its involvement in Measure 110 and return any unspent funding, he said.

“From our perspective, the state is still trying to figure out how to disperse those funds most effectively so that we’re actually moving the needle on rehabilitation,” he said. “Because the state is still trying to figure that out for small organizations like ourselves, that’s a problem.”