(OPB) Town leaders want to reopen an investigation into former town manager, Michele Parry, who resigned in 2024.
Lakeview leaders believe their town may be the victim of fraud, and they’re calling on state agencies to investigate. In a resolution passed this week, the Lakeview Town Council asked state law enforcement to reopen an investigation into the actions of a former town manager.
Note: Parry is also the former city administrator for Shady Cove where some issues similar to those in Lakeview arose
The council said in a resolution it passed unanimously on Tuesday that its own investigation had “determined that official business of the town was conducted in a manner that may have included fraud, malfeasance and deliberate violations of State law and the Town Charter.”
State Rep. Mark Owens, a Republican from Crane whose district includes Lakeview, told OPB on Thursday that he backs the town’s request for a state investigation, adding, “When we’re dealing with public funds, transparency is of utmost importance.”
Lakeview was conducting its own review of town records at the same time OPB published an extensive investigation on the matter in May, detailing how years of mismanagement, bad luck and poor financial decisions pushed the town to the brink of financial collapse.
The rural southern Oregon town, located near the California border, remains millions of dollars in debt, forcing steep cuts to services and placing the town’s very survival at risk. Lakeview has long tried to rebound from the collapse of the local logging industry.
Residents of Lakeview have wanted answers about how their town plunged into debt in recent years. The community has paid dearly: The town raised water bills, laid off staff, levied a public safety fee, annexed new properties, lost its 911 dispatch center and saw repeated turnover in leadership.
Recently, a new crop of town leaders began to assess the extent of Lakeview’s problems. Mayor Marc O’Brien, along with a small group of hired staff, spent the past two months combing through digital town records going back a decade.
“We just started to rebuild the jigsaw puzzle,” said O’Brien, who has been mayor since April. “As a result of that, we started to find a great deal of discrepancies, and we started to find holes within the roadmap.”
Town records and tack boards
O’Brien’s team spent most days holed up in a sealed room in Lakeview Town Hall. They had little digital forensic experience between them, but managed to use AI to scrape town records going back a decade. They used keywords to help piece together a narrative of Lakeview’s financial history, and then assembled their findings in large binders and on tack boards.
“You start to get narrower and narrower as you read the documents,” O’Brien said. “Then what happens is, you hit gold.”
Specifically, the investigation “discovered a number of fraudulent electronic signatures” on contracts, as well as falsified grant progress reports and other documents they believe “may suggest intent to defraud the Town,” the resolution states.
State law enforcement opened an investigation into former town manager Michele Parry in 2024, after her employees accused her of forging their signatures on official documents and mismanaging the town’s finances.
A photo contained in law enforcement reports, which OPB reported in May, appears to show a file on Parry’s computer with electronic copies of town officials’ signatures, including the former mayor.
O’Brien said his team has found even more signatures, going into the double-digits: “I think we’re certainly in the teens, if not more.” He’s also concerned that more of the town’s money was mismanaged that was previously understood.
Parry did not respond to requests for comment Thursday. In earlier phone conversations with OPB in January, she previously denied all wrongdoing and blamed the town’s financial situation on her former colleagues.
State investigators closed the case in January without pressing charges, saying they could not prove the allegations beyond a reasonable doubt.
But many records appear to have been sealed off from state investigators. Lakeview’s former attorney Jeremy Green had asked the court in June 2024 for a protective order that sealed many of the records contained on devices seized by law enforcement, including Parry’s work devices. A judge granted that request. Once the investigation was closed, those devices were returned to the town.
In its Tuesday resolution, the town said the protective order “blocked” the police investigation and came without the approval of the town council.
Reached for comment Thursday, Green said he could not comment without the written permission of Lakeview’s leadership. The town did not grant permission before press time.
Lakeview is now seeking the state government’s help, moving to allow law enforcement to review the previously sealed files. Councilors are seeking assistance from the Oregon Department of Justice and Gov. Tina Kotek’s office “to determine whether there is evidence of criminal and civil fraud,” the resolution said.
In a statement Friday morning, Kotek’s office said it is “aware of the resolution approved by Lakeview councilors this week and believes that any allegations of fraud should be taken seriously.”
An Oregon State Police spokesperson referred questions to the state Department of Justice. A spokesperson with the DOJ said the agency is aware of the resolution but didn’t comment further.
Town heeds call for action
The biggest financial albatross for the town remains a multi-million dollar contract for new water meters. The company, Arizona-based Sustainability Partners LLC, recently sued Lakeview in federal court for failing to make monthly payments, among other things.
In its resolution, Lakeview appeared to reference its contract with Sustainability Partners, saying previous leaders “illegally executed” the deal without a public bidding process and without the council being made aware of its full cost. The company disputes the town’s claims, saying its contract was executed legally.
Lakeview leaders made similar arguments in papers filed in federal court and asked that the lawsuit be remanded to a state court instead.
Sustainability Partners’ president, Adam Cain, did not return a request for comment.
Lakeview also moved Tuesday to seek assistance from the Oregon Public Utility Commission, the state agency that oversees electricity rates, natural gas, telephone providers, water utilities and more.
“Although (the commission) does not regulate municipal water utilities, such as this utility at issue, we have talked with the town of Lakeview and have indicated we will help where possible,” a spokesperson for the commission said in an email.
Meanwhile, the town has not resolved its longstanding water quality problems. It failed to complete required water testing for years, and has struggled with stinky, brown water and elevated levels of lead.
The town government, hoping to restore the public’s trust, said in its resolution that residents deserve a full account of what happened. O’Brien said the response from the community has been immediate.
“I have been stopped in Safeway, pumping gas, getting support from the community for finally doing something,” he said. “Unfortunately, it was weighing on people far more than I was aware.”
