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Wednesday, April 1, 2009

You could look it up

While Fireman Pele dominates the headlines with his pet projects, an alert reader reminds us of a provision of the Oregon Constitution that on its face would seemingly throw a monkey wrench into some of his Euro-visions. It reads (with emphasis added):


Section 9. Limitations on powers of county or city to assist corporations. No county, city, town or other municipal corporation, by vote of its citizens, or otherwise, shall become a stockholder in any joint company, corporation or association, whatever, or raise money for, or loan its credit to, or in aid of, any such company, corporation or association. Provided, that any municipal corporation designated as a port under any general or special law of the state of Oregon, may be empowered by statute to raise money and expend the same in the form of a bonus to aid in establishing water transportation lines between such port and any other domestic or foreign port or ports, and to aid in establishing water transportation lines on the interior rivers of this state, or on the rivers between Washington and Oregon, or on the rivers of Washington and Idaho reached by navigation from Oregon’s rivers; any debts of a municipality to raise money created for the aforesaid purpose shall be incurred only on approval of a majority of those voting on the question, and shall not, either singly or in the aggregate, with previous debts and liabilities incurred for that purpose, exceed one per cent of the assessed valuation of all property in the municipality. [Constitution of 1859; Amendment proposed by S.J.R. 13, 1917, and adopted by the people June 4, 1917]
As they scratch around for more public money to pay for the soccer stadiums and other boondoggles, do the city commissioners ever stop to consider this law?

Comments (15)

Jack, your belief in the Constitution knows no bounds.

You know Randy's out is that PGE Park is owned by the city and the baseball park will be owned by the city. THey are not giving Paulson the money.

It just so happens that Richie Rich will have a tema tha plays in both which had nothing to do with their decision to improve the park.

I would think that "raise money for" or "lend its credit to" applies regardless of whether the team owns the venues or not since these venues are being built specifically for use by these teams.

It would probably take a lawyer to parse it all out but it does seem like an unholy alliance that doesn't benefit a majority of the taxpayers of Portland.

Such borrowing also diminishes the city's ability to qualify for other, more important, projects in the future.

Your alert reader deserves a medal.

I'm sure "pdxnag" will be here momentarily with an "explanation" that may thoroughly confuse all of us. In any event, this part of the Constitution has no doubt been picked over many times over the last century. Certainly that which they call Portland "urban renewal" pushes the envelope on this issue in a serious way.

I have long thought that every elected official (Federal, state, city, etc) should have sign an affidavit that they have read and comprehend the Constitution that they have sworn to defend.

I doubt that many have even read it (be it Federal or State) although they freely take an oath to defend it.

Constitutions and laws that impede what so-called "Progressives" deem as "progress" (i.e. their pet projects) are inconveniences to be flouted until someone takes it to a Supreme Court.

Case in point, the Seattle school district and their racial preferences in school choice that was brought to the US Supreme Court and deemed unconstitutional according to the United States Constitution (Parents Involved In Community Schools v. Seattle School District No. 1 et al.)

This case will be much easier and the Paulson family trying to put the remaining money on the backs of taxpaying Oregonians will make it all the more visible.

The same can be said for the Bush administration regarding warrant-less wiretaps on US citizens.

If Randy is of one mind and I of another as to some government action that is characterizable as in the public purpose then, a priori, it cannot be said that "reasonable men could not differ as to [the action's] lack of social utility."

See 52 Or App 379, 383, referencing 249 Or 329, referencing some Harvard Law Review author's nonsense. Nicoll_v_CityOfEugene.pdf

It is a test that is no test at all because it defines a null set. It renders a constitutional restriction functionally void. The test is thus absurd.

There remains a statutory construction type argument that goes as follows: the court can neither insert what is not in a statute nor write out what is there. It is rationalized to achieve precisely the same objective as that asserted in Nicoll that "'such a judgment is more appropriate for legislative than judicial action.'"

I have long thought that every elected official (Federal, state, city, etc) should have sign an affidavit that they have read and comprehend the Constitution that they have sworn to defend.

I doubt that many have even read it (be it Federal or State) although they freely take an oath to defend it.

I wouldn't paint Obama - a former constitutional law professor at Harvard - with that broad brush. He certainly knew the correct wording for his oath of office when Chief Justice Roberts got it wrong.

A reader writes:

The framers of the original 1859 Constitution were wise men. Originally they put this section in to prevent Oregon cities and counties from underwriting or pledging assets for railroad construction bonds, which were the great flimflam of the time. Nationwide, town fathers knew that their city would live or die depending on if it got rail service, and would do almost anything to have a line built. Including guaranteeing construction bonds for anyone who could get a state charter to start to build a railroad. And bankers in New York would sell the bonds to the demanding public, mainly in Europe. And most later defaulted.

And it also was flexible enough to protect Oregon cities and counties from other shaky projects. As time marched on it was toll roads and bridges, private water companies, telegraph systems, and now private business demands. Time will tell if it protects against soccer and greed. Particularly if the new baseball stadium is to be "Paulson-owned" instead of "Public-owned."

And it takes a supreme court that can read plain English to rule on this.

I don't hold out a lot of hope when there is a lot of money involved.


What about Tri-Met buying the shares of the railcar company?

All I can say is I really hope Nigel (Jacquiss of WW) is working on an expose of this whole filthy MLS scam and it's three top advocates. Sadly, all the other publications and TV outlets just print or read the press announcements they are handed without giving it any perspective whatsoever. Adams, Leonard, and Paulson represent low-life, organized crime under the guise of city government and legitimate private enterprise.

You think something as trivial as the "law" is going to prevent Randy from getting what he wants, when he wants?

--edit-- characterizable as serving a public purpose

You can read Sprague v Straub online. It interprets both Section 6 and Section 9 of Article XI.
The state is only the custodian of the funds. They say: "We may say that the retirement funds have been gathered not for the general enrichment of the state but for the benefit of contributing employees." They repeat themselves: "Moreover, as we have pointed out, the state has no beneficial ownership of any part of these funds[.]"

Nevertheless, pension obligation bond proceeds remain in government accounts for the government's beneficial interest and are invested in private entities. This beneficial interest (and exclusive risk of loss) is not defeated merely because the government has placed these funds in the "custody" of the OIC. Nor is it defeated merely because the funds may be delivered in future appropriation-like events that transfer parts of it over time to member accounts or to the PERF. If PERS were terminated (ORS 238.600, as amended in 1999) and bonds were issued to cover the then-accrued obligations and transferred to member accounts, in exchange for a release of all then-accrued and future obligations, then there would be no violation of the prohibition on public taking an interest in stock under either Section 6 or Section 9 of Article XI. This violation has not yet been directly addressed by the Court of Appeals or the Supreme Court.

If the legal staff of the City of Portland believes, as they do, that the pension obligation bonds with proceeds held in City of Portland accounts is legal then they could tell Randy that he could buy his very own MLS franchise and send Mr. Paulson to some other playground. If we are going to pay for it anyway, or suffer any risk of loss, then we should also be the beneficial owners. If the assumption is valid that there is an aggregate financial benefit to the whole MLS project then buy it outright and give Mr. Paulson the boot.

Randy, you could alternatively suggest that the OIC use the City of Portland pension obligation bond proceeds account to buy the MLS franchise, even though the funds are commingled with employee accounts in PERF for investment purposes. (This is how it works for other targets of investments, as with solar panel production --- or PGE.)

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