This was the initial response regarding the Oregon DEQ fine against Lehman Hot Springs, Lehman Development Corporation and John Patrick Lucas. DEQ's response of this same date stated "DEQ has never asserted a violation of water quality standards, or that Respondents actually caused pollution" I didn't know at the time that I wrote this response that the State of Oregon "Department of Environmental Quality" would actually be truthful for the first time....

1. BEFORE THE ENVIRONMENTAL QUALITY COMMISSION
STATE OF OREGON
IN THE MATTER OF: CLOSING ARGUMENT OF
RESPONDENT JOHN PATRICK
JOHN PATRICK LUCAS, LEHMAN LUCAS
DEVELOPMENT CORPORATION, OAH Case No. 1002077
and LEHMAN HOT SPRINGS, LLC, DEQ Case No. WQ/D-ER-09-082
Respondent
Respondent Lucas adopts and incorporates by this reference, the closing
argument submitted by Respondents Lehman Hot Springs, LLC and Lehman
Development Corporation.
This Oregon Administrative Hearing is the last ditch effort to legitimize the
overzealous prosecution of Repsondents Lehman Hot Springs, LLC, Lehman
Development Corporation and John Patrick Lucas. This was a failed attempt by former
Oregon Attorney General John Kroger to make an example of Respondents to further
his political career by “cracking down on environmental polluters”1 John Kroger
promised “a tough new approach to environmental enforcement,” The problem is, he
shot from the hip and did not do his homework, nor did anyone in his “environmental
crimes unit”. Lehman Hot Springs was quoted in John Kroger’s 2009 Annual Report as
1Camilla Mortenson, Attacking Ecocrime, Stomping out Oregon’s Polluters, EUGENE W EEKLY, Nov. 26, 2008,
available at http://www.eugeneweekly.com/2008/11/26/coverstory.html.

2. the second most “significant case” right behind the Hanford Nuclear Cleanup. Really?
The problem with the State’s Case is that they don’t have one based on fact or
scientific evidence, but rather pure speculation. They made false claims to the media
that they then tried to legitimize through failed civil hearings in which Umatilla County
Circuit Court Judge Gary Reynolds found no evidence of pollution. They then filed
dozens of criminal charges in an obvious attempt to coerce Respondents to
acquiescing, much like being tortured by the Viet Kong into a “confession.” The State
called Respondent Lucas’ partners, bankers, lenders, city officials and even spoke at a
Washington County business alliance meeting and at the University Club in Portland in
an effort to damage Respondent Lucas’ through Tortious Interference. They pumped
up this case in order to get a press release saying that Respondents were fined
$532,000 for violations that did not happen. This whole fiasco was more about trying
respondents in the media then in the court of law.
In the Spring of 2009, John Kroger was just sworn into office and was looking to make a
name for himself in Oregon. Lehman Hot Springs admittedly had other minor issues
with the DEQ in the past and the DEQ has a long history of abusing its power against
Respondent. I will go into more detail later in this response. The point is, Kroger saw
this as a significant opportunity to further his political career. He is known for making
bold media announcements of his self perceived successes, he even writes books
about them.
The problem in the Lehman case is that Kroger made bold press releases and did not

3. bother to check the facts before releasing them. The DOJ and DEQ then had to go to
extraordinary levels to try and “prove” their case. There is a complete absence of any
scientific evidence or testing to support the state’s charges.
To wit:
Barry Norris: The states witness that claimed in the civil hearings that there were holes
in the liner of the ponds and therefor the water would leak out and erode the dikes, that
would in turn fail and cause catastrophic failure and potentially kill people (he really said
that in the civil trial).
If Barry Norris was so concerned about the safety and integrity of the dikes, why did he
not go up to the Lehman site after April 2010 when Repsondent Lucas invited Judge
Reynolds to come up and see for himself? (Tr. Vol 1, pg 73 $ Tr. Vol 2, pg 222) In fact,
Barry Norris did not ever go back up there, (Tr. Vol 1, pg 74) even though the upper
pond still had over a 1.2 million gallons of waste that, if the liner had holes in it, would
have surely escaped to the creek. (Tr. Vol 1, pg 65) He didn’t go back up because
Respondents did not own the resort anymore and it was no longer an “issue”. It was
never about the environment.
Barry Norris was the expert in charge of the catastrophic failure of the J. R.
Simplot waste water pond in which 90 million gallons of waste water DID escape and
discharge into the Umatilla River and kill livestock and fish. The report submitted to
DEQ has pictures to prove it. (R 51) J.R. Simplot was fined $9,600 for discharging
nearly 100 million gallons of untreated waste! Repsondents were fined $532,000 for

4. NO DISCHARGE. Heidi Williams was the representative from DEQ who was in charge
of the J. R. Simplot spill. ( R 51)
The state has produced no pictures of any waste water over-topping the berm or
dikes. Not a single one. They have produced not a single water sample that shows
wastes leaving through the dikes, seeps, or any other means. Not one.
The state withheld evidence from Respondents.
The State withheld exculpatory evidence from Respondents in the civil proceedings and
the criminal proceedings. To wit: In the criminal proceedings we were provided a disk
showing the approved plans, as built drawings and photographs of the construction of
the upper lagoon before Respondents purchased the property. (Tr. Vol 1, pg 71,72)
Respondents were told by DEQ that they did not have any plans from the original
construction of the upper lagoon, yet both Barry Norris and Heidi Williams admitted in
this OAH hearing that they had in fact had the plans and pictures all along (Tr. Vol 1 pg
71,72). The plans clearly show a french drain under the lagoon that was designed to
remove groundwater from beneath the upper lagoon. Barry Norris admitted that he
knew the french drain pipe was under the lagoon. (Tr. Vol 1 pg 72) He therefor had to
have known that the source of his 21,600 gallon per day “sewer discharge” was nothing
other than snow melt. DEQ and DOJ therefor made false press releases and false
accusations and are the false basis for part of this OAH fine. That is why they did not
test the water for e-coli, because they knew it was not sewer water, but rather storm
water runoff. That is why it stopped flowing in the summer months even though the

5. upper lagoon was still full.(R1, R2, R52) Yet DEQ as a major part of this OAH case uses
the amount of the 21,600 in calculating their penalty. That is why the dye test
performed by Heidi Williams and EPA came back negative.(Tr. Vol 2, pg 142) They
wanted their accusations to be true and went to great lengths to prove a negative. All
failed. (Tr. Vol 2, pg 156)
Heidi Williams testified that she turned over a report from the EPA to the DOJ, but the
DOJ did not provide it as evidence in either the civil hearings or the criminal trial. (Tr. Vol
1)It was actually in their 79 page privilege log. More exculpatory evidence that was not
turned over because of the marching orders from John Kroger.
Heidi Williams admitted that she took at least five e-coli samples but they were not
provided as evidence because they were, in her opinion “dilute” (Tr. Vol 1, pg 207, 208)
Because the state did not have any water samples from the seeps that would prove that
sewer was leaking from the lagoons, it went to extraordinary lengths to try other means
to “prove” the ponds were leaking including a “Piper Diagram” of chemical makeup of the
water. They tried to show that the water coming out of the seeps was the same water
that would have been coming from the lodge, and therefore leaking from the sewer
lagoons.
The problem is that they don’t know the source of the water from the lodge. (Tr
Vol 1 pg 212, 238, 239) There are actually three sources. (Tr Vol 2, pg ) Also, why
would they test the chemical makeup but not test for organic to see if sewer water was

6. present in the sample as testified by states witness Richerson? (Tr Vol 1, pg 240,241)
The reason is that they knew it was not organic. The Piper Diagram is nothing more
than a Hail Mary Pass because they knew their were no contaminants in any of the
“seeps”.
The video evidence speaks for itself. (R 52) When the ponds were completely drained,
they showed that the ponds did not have ANY holes below the waterline. Heidi Williams
stated that she went back up there, after not being there for 11 months, but didn’t take
the time to even look at the liners (Tr Vol 1, pg 192). She was so convinced that the
ponds were leaking due to holes in the liner that she didn’t even bother to look to see if
she was correct, or, she simply wanted plausible deniability when cross examined by
Respondents.
Sewer Collector line was plugged on April 15th, 2009 so no more influent going into pond
as of that date (R 10).
Evaporation test performed by Civil Engineer Douglas Ferguson concluded that their
was no leakage of either lagoon. (R 30) While DEQ does not accept the report, at no
time did they conduct any study of their own.
Dye study shows no leak. In fact, Heidi Williams from DEQ requested the Dye test and
was helped by Rob Gardinealli of EPA on the dye test that came back negative (Tr. Vol
1, pg 142). The state then went to great lengths to downplay the results of the test (Tr

7. Vol 1, pg 58-59&68. Even though they were the ones that performed it. If they would
have come back positive you can bet your bottom dollar that it would have been the best
scientific evidence ever derived. But because it was negative it was downplayed. The
results of the test were never put in a written report and submitted as evidence in the
civil, criminal or OAH cases. The only reason we know about it is one of Respondents
employee was present when the test was performed and Heidi Williams has been asked
about it under oath. (Tr Vol 1, pg 142) How many other tests or samples were performed
that were not provided to Respondents? Respondents should be allowed to see all of
the evidence since much of it was withheld from Respondent.
There are over 800 items in the privilege log that were not provided to Respondent.
Elevation survey showing 1997 as built and 2009 show no settling from 700 data points.
At first Barry Norris says that he agrees with the results (Tr. Vol 1, pg 69, 70) then on
recross from Sara Wheeler he toes the line and goes the other way (Tr Vol 1 pg 70,71 )
whatever suits the state agenda, forget about the science.
EPA water samples show no leak (R 31) In fact, the EPA took water samples from the
sewer inside the sewer pond and it shows an e-coli level of 43 ppl (part per liter) yet the
allowable level in Oregon Streems is 418 ppl. ( R 31, Tr Vol 1, pg 208) So, even if the
entire contents were to enter the creek at once, it would still be only 11% of the
allowable level. Perhaps this is why the state never took e-coli samples from the seeps
because by the states own rules, it would still be well under the allowable level. Perhaps
this is why they did the Piper Diagram trying to show other ways that could possibly
show that the ponds were leaking?
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8. US Fish and Wildlife email “sorry to disappoint, but there is no smoking gun. Fish are
thriving” Oh, move along, nothing to see here. We wont trust the judgment of THE head
biologist from the US Fish and Wildlife, what does he know....
We pumped 600,000 gallons of water out of the ponds and hauled by truck to Ukiah,
which incidently, doesn’t even have a pond liner. (R 12)
We repaired the sewer collection line and it past inspection as of May 2009 (R10) so the
complaint asking for money to fix the collection system is mute, it was repaired prior to
the complaint and DEQ was provided a copy of the results. (R 10) DEQ did not reject
any of the engineering test done on the soundness of the system, they simply plugged a
number in there that equates to completely replacing the line. The person that did the
estimate has zero experience in sewer line construction techniques or associated costs
and does not have a civil engineering degree, Respondent Lucas has over 20 years
experience. (Tr Vol 2, pg 225-232)
Repsondent Lucas has a long history of environmental stewardship. (Tr. Vol 2, pg 198-
199) Repsondent Lucas’ other entity, Pacific III, LLC actually purchase a former leather
tannery and battery manufacturing plant, entered into a Prospective Purchaser
Agreement (PPA) with DEQ and performed significant environmental cleanup in excess
of $1.4 million in remediation costs alone. In addition, Respondent paid DEQ over
$80,000 in over-site costs and was successful in obtaining an NFA (No Further Action)
from the Oregon DEQ.
Under the terms of the PPA, Respondent Lucas was entitled to seek
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9. reimbursement from the Potentially Responsible Party (PRP) for Respondent's cost for
remedial actions taken on the PRP behalf. Unbeknown to Respondent Lucas, DEQ
entered into a settlement agreement with the PRP's on the neighboring site to Frontier
Leather, and as part of the settlements legal description, included the portion of the
former leather tanning and battery manufacturing plant that Respondent Lucas paid to
clean up. The DEQ then entered a Consent Judgment barring Respondent Lucas from
being able to seek reimbursement from the PRP. In other words, DEQ took credit for
what Respondent paid for, and then abused its authority by entering a CJ, while
Repsondent Lucas was not a party to any of the settlement negotiations or even invited
to them. Respondent has a current appeal at the Oregon Court of Appeals regarding
the entry of the Consent Judgment. In the settlement agreement between DEQ and the
PRP, it specifically names Respondent's company and states that if Respondent
appeals their settlement, that the settlement money would be placed in escrow, awaiting
the outcome of the appeal, and if Respondent was successful, the money would be
returned to the PRP's so that they could settle with Respondent Lucas. Currently $2.6
million is in escrow, of which 1.4 million is money spent and rightfully due to Respondent
Lucas. Respondent Lucas has claimed an offset against that money should the OAH
case require Respondent to pay any fine associated with this OAH case. (See answer)
The State of Oregon DOJ and DEQ did everything they could to inhibit Respondent from
accessing capital needed to perform repairs and comply with DEQ demands in a timely
manner, yet Respondent was successful in almost every effort. At no time was the
environment harmed. DOJ attorneys John Dunbar and Karen Moynahan, or their
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10. associates, actually called Respondent's banks and financial partners on unrelated
projects in order to instill fear and make it difficult for respondent to acquire the
necessary capital needed to comply on a timely basis. (Tr.Vol 2, pg 100-101)
This pattern of litigious conduct is borne of punitive and vindictive zealotry, not
objective protection of the public health and safety. DEQ’s evidence and arguments
must be viewed skeptically.
CONCLUSION
Respondent Lucas adopts and incorporates by this reference, the closing
argument submitted by Respondents Lehman Hot Springs, LLC and Lehman
Development Corporation.
DATED: September 28, 2012.
John Patrick Lucas
_____________________________
John Patrick Lucas
16004 SW Tualatin-Sherwood Rd #432
Sherwood, OR 97140
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