The U.S. Department of Commerce Office of the Inspector General and the Oregon Department of Justice Charitable Activities Section are investigating a case concerning an alleged embezzlement of federal funds exceeding $1.5 million from McKenzie Watershed Alliance.
Eugene Weekly received confirmation from the ODOJ via an August 14 email that the agency is reviewing the case, and confirmation from McKenzie Watershed Alliance in an August 19 press statement that there were “financial irregularities.”
McKenzie Watershed Alliance is the nonprofit fiscal sponsor of the public-facing McKenzie Watershed Council and is primarily grant funded. In a 2025 annual report, over $5 million — or 77 percent — of funding was federal. Eighty-five percent of its expenses are environmental restoration costs.
According to the statement emailed to Eugene Weekly by executive director Jared Weybright, the Alliance discovered financial irregularities in early May of this year.
The irregularities involved payments between Coast Fork Willamette Watershed Council and the McKenzie Watershed Alliance. The two organizations shared an employee that had access to financial systems at both organizations.
The statement says that the employee was placed on administrative leave and then terminated from their position at McKenzie Watershed Alliance and is no longer employed with the Coast Fork. Weybright’s statement adds, “We are initiating a forensic accounting review and filing an insurance claim, while also exploring options for restitution.”
In 2025, NOAA awarded $8.5 million to McKenzie Watershed Alliance as a part of the Transformational Habitat Restoration and Coastal Resilience funds. The funds went to efforts to improve Quartz Creek, a major tributary of the McKenzie River.
Due to misuse of federal funds, legal counsel recommended McKenzie Watershed Alliance reach out to the U.S. Department of Commerce, which houses the National Oceanic and Atmospheric Administration.
NOAA has not responded to Eugene Weekly’s request for comment.
The McKenzie Watershed Council, McKenzie River Trust, U.S. Forest Service Willamette National Forest District and Eugene Water and Electric Board were the principal partners on the project, according to a 2023 press release from EWEB on the Quartz Creek project.
Jeff Gowing, who serves on the Coast Fork Willamette Watershed Council board of directors, and Joe Moll, executive director of McKenzie River Trust, say their organizations share the statement from McKenzie Watershed Council.
Upon discovery of the financial discrepancies, the statement says, McKenzie Watershed Alliance notified the board, and took immediate action to secure financial systems, work with banks, file insurance claims and notify partners.
EWEB emailed a statement to Eugene Weekly saying, “EWEB is aware of allegations of financial wrongdoing by a staff member of the McKenzie Watershed Alliance. These allegations do not implicate EWEB employees.” It continues, “Our work on the McKenzie River is vital to protecting our community’s drinking water and serving our customers. While the investigation into these allegations proceeds, EWEB remains committed to advancing water source protection throughout the McKenzie River watershed.”
The Quartz Creek project sought to improve the river’s resiliency to natural disasters and improve salmon habitat — the McKenzie River is the drinking water source for 200,000 people in the Eugene area.