FILE - Water streams under Dam 2 and toward the raw water intake at the Bull Run Watershed, July 16, 2024.
Anna Lueck / OPB
The city of Portland says about $6.7 million intended for the Bull Run water filtration project was redirected in a fraud scheme.
City spokesperson Carrie Belding said in a press release Wednesday that local and federal law enforcement agencies were investigating the fraud.
Belding said the funds were initially deposited into an account belonging to a New York law firm named Raiti, PLLC. That firm showed evidence it was also a victim in the scheme and has helped facilitate the recovery of the money.
The funds are currently in the custody of the U.S. Marshals Service.
“The City is taking this matter seriously and is making every effort to ensure the return of public funds and that those responsible are held accountable,” Belding said. “While we must limit what can be shared during the ongoing investigation, we are committed to transparency and will provide updates as appropriate.”
City Councilor Eric Zimmerman is the chair of the city’s Finance Committee. He said he’d like to see the results of the federal investigation before casting judgment on the news and potentially holding a committee hearing. He hinted at knowing more about the case than what’s been made public.
“From what I’ve seen,” Zimmerman said. “I’m not certain that this is actually a fraud situation.”
The Bull Run project has faced criticism in recent years as costs have more than doubled.
East Multnomah County and Clackamas County residents who live near the filtration plant site have also been vocal in their opposition.
It’s not clear how exactly the money was redirected to the New York firm earlier this year.
But Oregon League of Cities lobbyist Nolan Pleše said that fraud schemes tied to phishing or other cybersecurity threats have become an “increasingly dangerous” threat for Oregon cities like Portland. Cities process and review an immense amount of contracts from outside entities that can often be scammers in disguise, he said.
“They’re getting links to PDFs to access contract proposals, and it’s easy to just click on those links without thinking,” Pleše said. “We urge city staff to pause and take additional time to verify it’s valid.”
He said another safeguard is the Oregon Cybersecurity Center of Excellence, a state program that focuses on improving cybersecurity in state and local governments. Pleše said the League of Cities is lobbying the state Legislature to boost the center’s funding this session.
This would not be the first time Portland has been targeted in a high-tech scam. Three years ago, cybercriminals made off with $1.4 million in taxpayer money when a wire transfer meant for a local homeless service provider ended up going to hackers instead.