Mack the Knife
Diana Snowden Goldschmidt is a high-priced consultant, a former Pacific Power executive, and the wife of the fellow who's cornered the West Coast market on the increasingly in-demand title "disgraced former governor." Now she's under investigation by the Oregon Attorney General's office, under suspicion of a conflict of interest in connection with her vote or votes as a member of the Oregon Investment Council. Ms. Goldschmidt voted to commit state pension money to investments in Texas Pacific Group, the Texas-based investor group that's trying to take over Portland General Electric, including a vote just as that group was tapping her husband to be an investor in, and the chair of, its local entity in the PGE deal. (Of course, much of that's history now that Hizzoner's little problem has come to light.)
According to press reports, Ms. G. voted to invest $300 million in Texas Pacific last Oct. 29. As long-time readers of the blog may recall, her husband's role as chair of the new Texas Pacific Oregon company was announced on Nov. 18. The story that circulated at that time was that Mr. G. claimed he was first approached by Texas Pacific to head up the new company at an out-of-town meeting on Oct. 30.
Did the wife know on Oct. 29 that her husband was scheduled to fly down -- I think it was San Francisco -- to meet with Texas Pacific people the next day? If so, did she ask him what the meeting was supposed to be about? If she did, did he tell her?
Apparently it's the second pending investigation of one of the Goldschmidts. Federal lawmakers are also reported to be looking at Mr. G.'s shadowy role as a million-dollar "consultant" for SAIF, the state-run worker's compensation insurance provider.
The "probe" into Ms. G.'s affairs makes me laugh a little. I can't help having that reaction when I hear "investigation by the Oregon Department of Justice" used in connection with a cunning West Hills Portland figure, especially a Democratic power broker. My own observation of Oregon Justice over the past few years is that it's become quite toothless at best, and politically bought off at worst. To think that Attorney General Hardy Myers is going to actually do something punitive against either of the Goldschmidts seems totally far-fetched to me.
This time around, though, there's a glimmer of a remote possibility that something serious might happen. The state is bringing in an outside sheriff to take a look at the situation, and he's a straight-shooter of a guy. According to the AP story on the investigation:
Edward J. McAniff, a law professor-in-residence at the University of Oregon Law School, will help conduct the review, Edwards and Drummond said in a letter to Gov. Ted Kulongoski.
Edward "Ted" McAniff, who has been mentioned in this blog before, is a semi-retired partner at the Los Angeles megabucks law firm O'Melveny & Myers. He spends a good part of every year nowadays in Central Oregon. He's also a visiting law professor on a regular basis at the University of Oregon in Eugene.
Ted, or "Mack the Knife" as he's sometimes known, is a brilliant man who knows as much about banking and finance as anyone. He's Catholic, and I mean that in a good way. He is a sweet guy at heart, but a tough customer who doesn't suffer fools gladly. He takes no prisoners. Legend has it that he used to require his kids to do Marine Corps-style calesthenics with him before school every morning.
I've always held Ted's ethics in the highest regard. I have no idea what, if any, prior connections he or the O'Melveny firm have had with the Oregon Investment Council, Texas Pacific Group, or the Goldschmidts, but at this stage in Ted's life I don't see much for him to gain by sweeping more Goldschmidt droppings under the large State Capitol Rug. It will be very interesting to see (if we're ever allowed to) just what he finds, and what he has to say about it.
Do us proud, Ted.
| Posted at 1:20 AM | Permalink |
|
Comments (1)
I think it was Oct 29 that I was denied my TRO on the issuance of the 2 billion dollar PERS bonds. Coincidence? I think that the top PERS official resigned on the same day? Coincidence? The pricing of the bonds on Oct 20 was prior to the expiration of time to certify the vote results for a certain measure, and the OIC has a ten-day process that it must endure to initiate the bonding stuff. The OIC, as a group, jumped the gun. Surely this eagerness is not fully explained by the fear that interest rates might have risen tomorrow. The 2 billion dollar pot was forced from the state to PERS while one Mr. G was on the Higher ED Board. Coincidence? Then there is a former AG, now college President, that sits as a paid trustee to a fund that buys exclusively Oregon bonds. Coincidence?
I think the Talking Heads has a song with the title "burning down the house." The tune and phrase is sort of reverberating in my head right now; as an inspirational theme.
On August 23 there is a certain school board, co-chaired by a certain State Treasurer's wife, that will authorize 40 million dollars in cash flow bonds. This roughly matches a payment on an earlier PERS bond for a much larger amount. A certain other Mr. G, brother of the other Mr. G, that could "invite" an unfair labor practice complaint by a certain union by refusing to make employer contributions or by demanding the return of the PERS bond proceeds as it was not a lawful payment in the first place. That is, the conspiracy is both wide and continuing. (I am diligently preparing my comments for this bond issuance.) I asserted elsewhere, contemporaneously, that the State Treasurer's career was toasted on Oct. 29 (30) when the PERS bond closed. I'll stick to that position. The state bond issuance included the right of the underwriters to hedge the bonds prior to the time when the State Treasurer even had definitive authority to issue them. Who, prey tell, would have been caught with their fingers in the cookie jar before these state bonds where even issued? The supposed legislative authorization on the state PERS bonds was passed and signed in September.
Parents in the Portland Public School system have an interest in ending the PERS UAL conspiracy. I visualize happy kids playing musical instruments and lots of sports from the restoration of the well-funded school system. I visualize the PERS tier-three teachers (first and second year teachers) demanding that the fraud end so that they can get fair share of the school budget. One Mr. G, in Portland, could "invite" an unfair labor practice complaint by the tier-one and tier-two Portland teacher PERS members by asserting that they no longer have a sufficient "community of interest" with their younger tier-three association partners due to PERS reforms. This, of course, would result in a case where various objections to reaching the merits of past payments based on standing would finally vanish. Mr. G has the power to keep the Portland School District functioning all year long, not withstanding any vote on the repeal of the Multnomah County income tax. Public discussion of secret bargaining is not prohibited when the issue discussed in public relates to fraud.
I share your misgivings about the current AG. I do not think that one outside counsel can have the influence to fix or vindicate the full breadth of this house. Only the Oregon Supreme Court has the authority, legally and politically, to achieve the fix. The Oregonian made an understatement when they said that resolution of the PERS case is the single most important issue facing Oregonians. They followed it up, however, with the assertion that the State Treasurer should be entrusted with an additional 8.2 billion dollars in borrowed money; without nary a concern that the citizens should obtain a final release from further liability as a condition for the settlement. Rather, there would simply be more money at risk of loss or available for back door deals with the house that Mr. G built. It appears as if a time bomb has already been ignited and the best that the Oregon Supreme Court can do is try to defuse it, or redirect it, before the potential energy is released.
Welcome back, by the way. Without controversy you would not have felt compelled to write. Rest assured that a Ninth Circuit ruling protects you from potential liability for comments I post. The last time I got this fired up was back around 1990-91 when the S&L bailout was being used to subsidize the consolidation of the banking system. (I do wonder if the State Treasurer's wife was assisting Bob Packwood then in filtering out the wacko writings from folks like me. Those writing distractions became all consuming, including some to The Oregonian, and had a profound negative effect on my career prospects. I do recall rather weak constituent service related to a FOIA request on public expenditures on Deposit Brokers who's sole purpose is to aid rich parties in escaping the $100,000 limit on guarantees for individual depositors.)
If Mr. McAniff has the fire and integrity of a Spitzer then I would surely wish him well in his endeavors.
Posted by ron | August 21, 2004 3:46 PM