Oregon - the New Oligarchy|
strongest argument against Ted Kulongoski’s candidacy for governor
in the spring of ’02, besides the fact that Democrats had been in
power for 16 years and Oregon was home to the worst economy in the country,
was that he might not have a strong enough personality to lead the state
in these troubled times, and he might not be strong enough to handle Neil
Goldschmidt, who was fast becoming the state’s “godfather.”
While almost everyone liked Ted Kulongoski’s open, sincere style,
Goldschmidt, the former one-term Oregon governor, was building a slick
reputation as Oregon’s new oligarch.
mixing of public and private power in recent weeks has become …well
… grotesque, and
the governor of the state of Oregon has encouraged it. So goes the dysfunction
of a state with only one pol-
first move in office was cancellation of the Mt. Hood Freeway project,
shifting funds to mostly Portland-based public works and planning projects
such as light rail. His legacy of intertwined public/private funds spiraled
into complete centrally planned control in the Katz years, and ultimately
out of her control as the economy sank under the weight of increased public
spending and regulatory burdens.
Goldschmidt wrought, Kulongoski now hopes the same man can save?
left the governor’s office in 1990 he went to work as an executive
for NIKE. But, what Goldschmidt soon found he did best was mix private
and public power, and maximize his public sector access to finesse insider
private deals. Business boomed.
wasn’t corrupt, it didn’t sit well with some Oregonians when
Goldschmidt served as consultant to Weyerhaeuser in their successful hostile
takeover of Willamette Industries. As one of only two Oregonians who have
ever served in a U.S. President’s cabinet, Goldschmidt’s name
lent local credibility to Washington state-based Weyerhaeuser.
At the same
time Goldschmidt’s wife Diana Snowden was serving as a temporary
replacement for Portland Public Schools Superintendent Jack Bierwirth,
and she was being well paid for it. Oh, and Goldschmidt’s brother
Steve was aboard the same PPS gravy train as a highly paid (is there any
other kind?) consultant.
the dealmaker. You have to be impressed by the insider power. At times
in the ’02 gubernatorial primaries it even looked suspiciously like
he was pulling the strings of both sides of the governor’s race,
with his simultaneous close friendships with Democrat Ted Kulongoski and
Republican Ron Saxton.
But by now
Gov. Kulongoski must be entertaining doubts about how he has allowed his
friend Goldschmidt to overtake and overpower his administration.
in case you missed them.
the puppetmaster. One of the better ideas to come out of this year’s
legislature was pushed by Liberty Northwest Insurance and others to sell/privatize
Oregon’s workers compensation insurer, SAIF (State Accident Insurance
Fund). But according to the Oregonian, Goldschmidt, who is being paid
upwards of $1 million by SAIF to consult and lobby against the privatization,
used his pull to help block the idea. Explanations from the current head
of SAIF why it should remain in public hands only served to explain what
puppets’ heads are made of.
Goldschmidt publicly campaigned against ballot Measure 26-51 which would
have created a Multnomah County Public Utility District. The former Democrat
governor and presidential appointee campaigned on his name recognition
as an elected leader, on his political reputation. What Goldschmidt failed
to disclose during the campaign was that soon after the election he would
be the point man for Texas Pacific Group, potential buyers of beleaguered
Portland General Electric.
was named CEO of what would be the new Oregon Electric Utility. Along
with partners Tom Walsh (who headed up TriMet, earned countless dollars
through public construction projects, and is married to Patricia McCaig,
former chief of staff to Democrat Gov. Barbara Roberts) and Gerald Grinstein
(who only a few days after being named to the board of the utility was
hired as the new CEO of Delta Airlines) the trio stand to make millions
for putting together the deal.
governor cynically used the anti-PUD’s campaign message of not allowing
PGE to fall into the hands of Katz and Sten. Meanwhile a deal was put
together that could make him a very rich (or richer) man. Portlanders
breathed a sigh of relief that
Erik Sten’s Water Bureau billing fiasco wouldn’t be repeated…until
they saw the possible Goldschmidt payoff.
that’s how it works in the Goldschmidt world: The city running the
electric company is not a good idea, if you’re paid to keep it private.
But the state running the workers comp insurance industry is a good idea,
if you’re paid to keep it in government hands.
And if it seems like a tangled
web, it’s not. Mostly it’s a straight line to Goldschmidt.
Let’s draw the lines
more clearly. Goldschmidt’s wife Diana Snowden sits on the Oregon
Investment Council (appointed by the governor), where
she decided to send millions of Oregon’s public dollars to Credit
Suisse, which then invested
in Texas Pacific Group, which then appointed, surprise!, her husband Neil
Goldschmidt to head up their Oregon investment project.
While the parallels to the Boeing-Air Force scandal are startlingly similar,
they seem to have escaped most local reporters and editors. Maybe they’ve
become so accustomed to the local stench, they just can’t smell
say, hypothetically, that the Goldschmidts are the only people who could
possibly fill those power roles and that the deal for PGE is a good one.
Still, one of the Goldschmidts is going to have to explain why it’s
a good idea to override the legislature’s clear directive to the
Council to spend $100 million in investments in Oregon, on Oregon companies,
and instead for Goldschmidt’s wife’s Investment Council to
money directly to Credit Suisse in New
York for investment in a Texas company. Oregon businesses should be outraged.
of the pockets of Oregonians and into the pockets of…
Capping off Neil’s big
“power” deals, the governor appointed him head of Oregon’s
State Board of Higher Education. Credulity could not be stretched further.
Is the governor saying that when it comes to a really big problem, an
intractable one, which are the kind the state faces these days, the only
way to solve it is to bring in Oregon’s oligarch, Neil Goldschmidt?
Lord knows, thinks Kulongoski
to himself, I can’t do it. But there’s a big, big problem
Because of his dealings with
NIKE, with Weyerhaeuser, with the Portland School Board, with PGE, with
the ’02 governor’s race, and other manifold past matters,
and because of the outrageous entanglements and conflicts with his wife’s
Investment Council role, Goldschmidt’s line of credibility is as
thin as a G-string on a Brazilian beach. But in Neil’s mind it’s
all aces--which is what led him to publicly campaign against the PUD and
then turn around only days later and sign on with the Texas bidders for
the oligarch. There’s nothing inherently wrong with a private bid
for PGE, of course. On the surface it looks like a solid deal for the
bidders and for Oregon. But which is Neil Goldschmidt—a public servant
or a private businessman, an altruistic healer or a corporate profiteer?
A lobbyist, or a representative of the people? Those who try to do both
are corrupt. Those few elitists
who try to control government and markets, or manipulate one through the
other are called oligarchs. Even the Russians send
them to jail.
If Gov. Kulongoski is unable
to lead without the assistance of oligarchs, he should resign and a special
election should be called to establish new “elected” leadership.
Short of that, he should ask Goldschmidt to disentangle himself from public
projects, including resigning as chair of the State Board of Higher Education.
And/or Diana Goldschmidt should resign her seat on the Investment Council.
Utility Commission should also ask for and present to the public a full
listing of the Goldschmidts’ other clients and board positions to
demonstrate, before the PGE purchase, that there are no conflicts of interest
that might financially damage ratepayers. Knowing the breadth of Goldschmidt’s
influence, that could be a
very interesting list.