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Saturday, January 22, 2005

Weekend update

We would be remiss if we neglected to mention here that the Oregon attorney general's office released a report yesterday clearing Diana Goldschmidt of any charges of illegal conduct arising from her Oct. 29, 2003 vote, as a member of the Oregon Investment Council, to invest OIC funds in Texas Pacific. The day after that vote, her husband, the now-disgraced former governor, Neil Goldschmidt, was offered a position as a key director of the Texas Pacific company that would attempt to buy Portland General Electric.

The report concludes, after an extensive investigation by the a.g.'s office (apparently with the help of University of Oregon law professor Ted McAniff), that no evidence exists that Mrs. G. knew even of the imminent Texas Pacific offer for PGE, much less her husband's role in it, when she cast her vote on the OIC board that fateful day. The Goldschmidts' story, which was corroborated by the investigation, is that Mr. G. first heard of the Texas Pacific bid later on the day of the OIC vote, and that he told his spouse about it at that time. Although people in the Oregon Treasury Department had known of the potential Texas Pacific bid since weeks earlier, and although Texas Pacific executives had been talking about making Mr. G. a partner in the PGE deal as early as September 4, the evidence shows that it was kept a secret from the Goldschmidts until later the same day that the OIC vote went down. They both said they were surprised.

At that point, Neil ran from the book depository into a movie theater, where he shot a police officer before being arrested. Two days later, he was murdered by Jack Ruby.... o.k., only kidding about that last part.

In any event, the state investigation is over, and the Goldschmidts are in the clear about the OIC vote. As you might expect, this was all over the front page of the O today. When people get cleared, they're right on it.

It's also interesting to me how the Oregon Department of Justice presented its findings on this case to the world. It wrote up a detailed, 13-page report, placed it on the internet, and made the story the lead headline on the departmental web page. That's certainly not what it does down there with most criminal investigations that come up with nothing. They're getting maximum mileage out of this particular exoneration.

The timing and handling of this development signals to me more than anything that the Texas Pacific deal is going to be approved by the PUC soon. I'm laying 2-to-1 odds now in its favor. Then I guess the City of Portland will join the power-to-the-people folks in filing some court appeals, and likely even try to condemn PGE, all of which is going to cost us Portland taxpayers more millions. (I'm sure we're already well over a million dollars in city funds spent on this adventure.) The thing will be tied up in court for years.

I don't know which is worse: if the city blows all that money and effort and loses to the robber barons... or if it wins.

Maybe that's the real crime.

Comments (16)

Well, Jack, you still aren't admitting that you were wrong to accuse Diana Goldschmidt of wrongdoing. Say it: You were WRONG. You are much better at throwing out accusations than substantiating them. It is mind-boggling that you never stopped to consider that Diana Goldschmidt had no incentive to sacrifice her career and her integrity by voting in favor of the TPG investment because it was a UNANIMOUS vote. Even if you unfairly jump to the conclusion that she is unethical (simply because you don't like her husband) you can't believe that she is stupid. If she had known that TPG was going to approach Neil then she would have just abstained from the vote and saved herself the criticisms of folks like you. I don't think it is a coinky-dink that no one ever thought to investigate this until after the Neil Goldschmidt scandal broke. And I'll pass on offering up my true email address ... I don't need you or any of your cronies harassing me.

Well, then, my friend, you are done here. Give my love to Neil. You probably owe him something monetary. Most of his defenders do.

"Even if you unfairly jump to the conclusion that she is unethical (simply because you don't like her husband) you can't believe that she is stupid."

You don't have to believe someone is stupid to do stupid things. (Name "Clinton" ring any bells?) Arrogance is one excuse, or the blinding lights in front or corruptions in back of power.

But as Mr. Bogdanski said, the lose-lose for Portland is the real crime.

I never thought Diana Goldschmidt did anything unethical while she was on the Oregon Investment Council. As John points out, there was no reason for her to. They didn't need her vote and had there been an undisclosed relationship between her husband and TPG at the time of the vote, she is smart enough and experienced enough to have realized she was inviting exactly the kind of criticism and scrutiny that in fact came her way.

Where I think she showed poor judgment was in not accepting the governor's invitation to resign and instead forcing him to fire her. She could have continued to insist she did nothing wrong but admitted that the timing of events cast an understandable albeit unwarranted cloud over her continued partipation and therefore, for the good of the OIC and out of respect for the governor, she was tendering her resignation.

But then it's always easier to be objective when the public spotlight is on someone else.

The circumstantial evidence that the couple knew ahead of time was very strong. It still is -- it's just been outweighed by direct evidence to the contrary. I'm sure our buddies at the Willamette Week will try their best to blow holes in the a.g.'s report. If they can't, I'm willing to accept the official version of this particular set of events as amazing but true. There are still plenty of other reasons to welcome an end to the extreme undue influence that these folks have enjoyed until recently. And if they think they're going to regain their influence by portraying themselves as victims, they're not as smart as I thought they were.

I want the records of the Executive Sessions of the OIC and the PERB opened up and laid out on the table. The criminality, or propriety, of the investment of 300 million versus 200 million might hinge on the advice given by the Attorney General. Have we allowed the fox to investigate himself?

Oh come on- what are the chances Neil didn't clue her in?? I'd say little to none.

Remember, Neil's position is that TPC didn't offer him the position on the Oregon Electric Company board until after the OIC approved their loan. It's not unreasonable to assume they didn't talk to him about it before precisely because they didn't want to disqualify Diane from voting on the loan or otherwise complicate an approval they had every reason to believe they were going to get anyway.

One of the things people too often fail to realize about these kind of transactions is that they rarely need to have a quid pro quo or backroom deal. They went to Neil because they aren't stupid and because anyone who wants to get things done in Portland eventually goes to Neil. (Only time will tell whether I should have put that in the past tense.)

Jerry Grinstein knew they were going to offer a piece of the deal to Neil, but nobody clued Neil in for weeks? That's the official story. "Incredible but true." Whether Mr. G. told Mrs. G. is a separate question, but the proposition that no one mentioned the news to him is a hard sell.

I believe some members and staff of the OIC have admitted they knew that TPG was planning to make an offer to purchase PGE, not that TPG was going to offer a position to Neil.

If any members or staff of the OIC knew that Neil had an interest in the transaction, then they should have raised a question about the propriety of Diana's participation in the vote. No one did.

Hmmm. You are correct. Nothing in the report about Drummond knowing about the potential NG involvement pre-Oct. 29. But Grinstein knew about the potential NG connection by Sep. 4; and Drummond, Schmitz, Edwards and Haglund knew about a potential Texas-PGE deal by late August. "None of them said anything to Neil for two months, and Neil didn't hear about it from anywhere else, either."

Hey, if they didn't need Mrs G's vote, then why not play like Caesar's wife and recuse herself? Or better yet, on that romantic evening with Neil when he told her he had a new job, then let the rest of us know since there might be a small chance of some self-dealing going on with the OIC if she is such a virtuous woman.

This whole thing stinks with the amount of hubris that Mr/Mrs G think they can get away with. I mean the coincidences are amazing how nobody knew anything until after the fact and we are supposed to accept this like the sheeple we are?

Heck, Neil's company is still having regular contact with Teddy K. As far as Mr Roberts, I don't know what he gets out of defending these rats. This is almost single-handedly pushing me into the PUC camp.

"As far as Mr Roberts, I don't know what he gets out of defending these rats. This is almost single-handedly pushing me into the PUC camp."

I expect he just tries to stay an honest player. Always lonely and sometimes appreciated only by those whose side you'd rather not be on.

The logic Jack Roberts described in his 6:37 comment makes sense to me: that TPG knew that it would offer a position to Uncle Neil but did not approach him in order not to force Diana Goldschmidt to recuse herself from the OIC vote. It's also easy to imagine TPG thinking that it should offer a portion of the deal to Uncle Neil, not to grease the skids at OIC, but to perhaps make things easier at the PUC and later, after the purchase, with the City of Portland. TPG might reasonably think that if it bought PGE when the City wanted it also, the City would not be the most cooperative municipality when PGE needed things done, and that Uncle Neil could smooth things over quickly. Mr. Roberts didn't say so explicitly, but I imagine based on his comment that he would agree.

Isaac, while obviously speculative, the scenario you outlined makes a lot more sense than that Diana Goldschmidt risked her reputation and credibility to cast a vote she didn't need to cast on the OIC.

On the other hand, see this week's Willamette Week story for another take on this that raises reasonable concerns about Mrs. G's post-vote conduct.

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