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Video adds to Breidenthal's troubles

A video of former Jackson County Commissioner Doug Breidenthal allegedly shows him accepting a pile of cash in November 2016 as payment to work as a marijuana consultant while he was still an elected official.

The video adds to mounting issues for Breidenthal, including multiple state investigations, a lawsuit and a foreclosure action against his house.

Ashland lawyer Chris Hearn said Friday that his client, Greg Allen, reviewed hours of video from his previous Medford marijuana business, Rogue Valley Remedies LLC. The videotaping is required for marijuana outlets under rules set by the Oregon Liquor Control Commission. 

Hearn provided a screenshot from one of the videos to the Mail Tribune that allegedly shows Breidenthal and Bill Arma of Rogue Valley Remedies exchanging a bundle of cash.

"Breidenthal's got his hand on the money," said Hearn, who represents Allen, Lawrence J. Nelson and Mary D. Nelson in a lawsuit against Breidenthal, who they say bilked them out of $229,000 they invested in a Medford business known as America Cannabis Company. 

Allen said he has found three video excerpts that allegedly show Breidenthal accepting money, Hearn said. The lawsuit describes at least six cash payments made to Breidenthal starting Aug. 13, 2016. Breidenthal was a commissioner through December 2016.

A Mail Tribune review of minutes of all Board of Commissioner meetings in 2016 in which marijuana was discussed found no mention of Breidenthal disclosing his marijuana business interests. Oregon law prohibits public officials from using their office for financial gain and requires them to disclose any economic conflicts of interest.

Hearn said he confirmed with his client that the money shown in the screenshot from the video was a payment for marijuana consulting. The time stamp on the video screen shot is 1:59 p.m., Nov. 12, 2016.

In the lawsuit, Allen stated he hired Breidenthal while he was county commissioner to help him navigate through state and local laws to open another marijuana business.

Allen was forced to shut down Rogue Valley Remedies at 3724 S. Pacific Highway Dec. 31, 2016 because of land-use laws adopted by the Jackson County Board of Commissioners March 16, 2016.

Breidenthal could not be reached for comment Friday, but his Medford attorney, John Howry, said he had not seen the photo of the alleged money exchange and has not filed an answer to the allegations in the lawsuit.

He did say that he would be filing counter claims against Allen and the Nelsons. He also said he would be responding to all the allegations laid out in the suit.

"I will let my answers speak for themselves," he said.

In addition to the lawsuit, Breidenthal faces a new investigation by the OLCC, as well as one already under way with the state Department of Justice over alleged ethics violations.

Breidenthal's house is in foreclosure and is scheduled to be auctioned June 8, according to ListSource.com, which compiles foreclosure notices. Breidenthal and his wife, Melanie, are in default on their payments by $84,534.09.

According to Jackson County records, the 3,380-square-foot Medford house is valued at $378,670. Zillow, a popular real estate website, estimates the value of the two-story house, built in 2003, at $534,688.

Early last year, Breidenthal told the Mail Tribune he was "under water" on his house, essentially owing more than it's worth.

At the time, the house at 4505 Pinnacle Drive was listed at $475,000 but was pulled off the market May 20, 2016. According to county records, the Breidenthals have paid their property taxes.

A notice of default on the loan was issued Jan. 27, 2017. According to property records obtained by the Mail Tribune, Breidenthal has taken out various loans on his house since 2003. On Feb. 1, 2005, he borrowed $500,000 from Quicken Loans, and then on the same day, he took out another loan from Quicken for $100,000. On Sept. 21, 2006, he took out a $151,000 loan from Citibank.

According to the notice of default, the unpaid balance owed by the Breidenthals on the house is $547,582.64. The auction is scheduled to take place on the Jackson County Courthouse steps at 11 a.m. June 8.

While Breidenthal, who earned $100,318 annually as commissioner before he left office in January, deals with the foreclosure, he's part of an investigation by the OLCC into Marigold Enterprises LLC, doing business as American Cannabis Company, 2131 W. Main St.

When Breidenthal submitted his application for a recreational marijuana license Dec. 2, 2016, he didn't list the Nelsons and Allen as investors. According to Oregon Administrative Rules, investors and the spouse of the applicant should be listed. Breidenthal did list his wife.

Mark Pettinger, spokesman for the OLCC, said his agency has spoken with all the parties involved, including the investors, about the license.

While he said he can't comment on an ongoing investigation, Pettinger said that if the allegations are found to be true, the penalties could range from revocation of the license to a fine.

He said it's possible to transfer the license to another party. The license was approved Feb. 3, two months after the application was filed.

In the lawsuit filed against Breidenthal, Allen claims, "Breidenthal indicated he could 'fast-track' local and OLCC approvals due to his many political connections."

Pettinger said there were no favors granted by the agency in approving Breidenthal's application.

"No, we (the OLCC) didn't do anything in regard to calling out a favor. He had his i's dotted and his t's crossed. He knew what was needed and necessary."

In the case of Marigold Enterprises, Pettinger said, it was a clean application.

One document that can trip up licensees is a Land Use Compatibility Statement, which provides information about whether a recreational store can be located in a particular location, Pettinger said. Breidenthal had filled that statement out without any problems, he said.

"He probably knew the LUCS was the most important document," Pettinger said.

— Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.

Doug Breidenthal, left, is shown allegedly taking a payment Nov. 12, 2016, from Bill Arma of Rogue Valley Remedies for marijuana consulting while Breidenthal was a county commissioner. [Photo courtesy Chris Hearn]