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By Michelle Roberts

Summary: Lawmakers unanimously pass a bill to ban public agencies from agreeing to secret settlements, as once done with an abuse victim

The Oregon Senate on Friday unanimously approved a bill that would prohibit public agencies from entering into confidential settlement agreements.

Senate Bill 324 was designed to "shine a light on our state's secrets," said Sen. Vicki Walker, D-Eugene.

Walker said she sponsored the bill as a result of problems The Oregonian identified in a series of stories in September.

The newspaper's investigation found that staff at Oregon State Hospital had sexually abused as many as a dozen child patients between 1989 and 1994. The series also disclosed that the state had fought to keep details of those abuses private, including when it entered into a confidential, $350,000 settlement agreement with one of the victims.

Mary Kay Gonzales, 29, lived in the state's care from ages 12 to 18. During that time, she was molested by two state psychiatric aides. She sued the state in 1996, alleging that the hospital and its then superintendent, Stanley Mazur-Hart, had ignored a longstanding pattern of abuse of patients on the adolescent ward.

Several days after her trial began, the attorney general's office, directed by current Gov. Ted Kulongoski, agreed to settle the case for $300,000, The Oregonian discovered. The state kicked in another $50,000 for a confidentiality clause to ensure that Gonzales never talk publicly about the outcome of the case.

"Colleagues, this was hush money -- a confidentiality agreement designed to keep the Legislature in the dark," Walker said Friday.

Courtroom discussions -- which revealed the settlement amount -- would never have become public, but a transcript of a closed court hearing that should have been sealed was instead filed with other public records in the case and found by the newspaper in 2003.

The transcript indicated that the state sought privacy to protect the reputation of hospital administrators.

"We made it clear that we were buying confidentiality from the plaintiffs," Assistant Attorney General John McCulloch Jr. told the judge in 1996. "The real damage to the defendants is hardly calculable. I don't know how to put a dollar sign on the political aspect. What's somebody going to say in the next legislative session about Dr. Mazur-Hart and how he runs his ship out there?"

Walker read parts of The Oregonian's investigation on the Senate floor Friday.

"I want you to think about that, my fellow senators," she said. "What's somebody going to say in the next legislative session about Dr. Mazur-Hart and how he runs his ship out there? What do you think we would have said? I guarantee we would not have let it go unnoticed."

Mazur-Hart was hospital superintendent from 1991 until he resigned in September 2003 amid controversy over a patient escape and a neglect case involving an adult patient. He remains on state payroll as a Department of Human Services manager.

Senate Bill 324, which passed 22-0, holds that no public body or official may enter into a confidentiality agreement unless it is required by federal law. The court also may keep confidential the identity of a person if he or she is a victim of sexual abuse or is younger than 18. However, even in those instances, the court may redact only the name of the individual, not the entire settlement agreement.

The bill now goes to the House of Representatives.

Representatives from Attorney General Hardy Myers' office earlier testified in support of the bill.

Walker said the "current administration assured me it was not their practice to enter into confidentiality agreements and that they have an internal policy that the attorney general himself must review any such agreement."

At the time of The Oregonian's investigation, Kulongoski said he couldn't remember the Gonzales case or whether he had signed off on the confidentiality agreement.

"I have no recollection of the facts or circumstances of this specific legal matter that occurred nearly a decade ago," he said in a statement in September.

On Friday, Kulongoski's office said he supports SB324.

"Transparency in government is a priority for the governor," said spokeswoman Anna Richter Taylor, "and this bill is consistent with that priority."

Michelle Roberts: 503-294-5041; michelleroberts@news.oregonian.com

SENATE BILL 324

What it would do: Prohibits public bodies from entering into confidential settlement agreements unless required by federal law.

What's next: It passed the Senate, now goes to the House.

Find out more: To find the text, sponsor or status of bills, visit: /bills_laws/ or call 1-800-332-2313 (503-986-1000 in Salem).

© 2005 Oregonian Publishing Co. All rights reserved. Used with permission of The Oregonian.