Minding Their Business

[December 14th, 2005] A bare-fisted email last week from the Portland Business Alliance has exposed divisions within the local business community and set the stage for a showdown with City Hall over publicly financed city election campaigns.

The PBA's previously behind-the-scenes battle against Portland's so-called "clean money" resolution and its co-sponsor, Commissioner Erik Sten, surfaced Dec. 8.

That's when Greg Peden, the alliance's top government affairs official, emailed the group's 1,300 member businesses to ask for "$25, $50 or even $100" to support a group gathering signatures to put a repeal measure on the May ballot. The proposed repeal would scrap a council-approved resolution to fund city election campaigns.

"In a time when our community cannot adequately fund its schools, its jails or its roads, the Alliance Board feels that paying for candidates' junk mail, television ads and programmed phone calls is not a wise use of tax dollars," wrote Peden, who did not return WW calls seeking comment.

The PBA's professed concern about scarce public resources contrasts with its consistent efforts to kill the city's business license fee, which provides more than 10 percent of city revenues.

Rejuvenation Hardware owner Jim Kelly says the PBA's position is a transparent attempt to maintain control of elections by deep-pocketed downtown interests.

"I'm embarrassed by some members of the

business community," says Kelly, who is not a PBA member.

At issue is a program that provides public money to City Hall candidates who gather 1,000 checks of $5 or more in council races or 1,500 such checks in the mayoral race. Qualifying council candidates could then receive $150,000 in public money for primary elections and $200,000 in the general election; mayoral candidates would receive $200,000 and $250,000.

The city estimates the program's annual cost at $700,000 to $1.7 million, which even on the high end is still less than one-half of 1 percent of the City's $368 million general-fund budget. So far, only Amanda Fritz, running against Commissioner Dan Saltzman, has qualified for public money in the 2006 election.

Sten will also try to collect enough small donations in his re-election bid to qualify—a point Peden emphasized in his email and one that doesn't surprise Sten, who says the PBA told him "voter-owned elections were the last straw."

Meanwhile, the PBA is using what amounts to public money to fight against campaign finance reform.

According to the PBA's website, more than half its $7 million annual budget comes from Portland Downtown Services, a 501(c)(3) nonprofit created by City Council in 1988 with the authority to assess downtown businesses a yearly fee, which is supposed to be spent on security, cleaning and economic development. Victoria Cox of the Attorney General's Office's charitable activities section says 501(c)(3)s may engage in limited political activity.

But the PBA's political profile has increased even as its budget dwindles. In 2003, the organization lost a lucrative city parking contract that brought in more than $3 million annually. Yet since then, the PBA has begun making political endorsements and contributions. Now, it's promoting a ballot measure.

Some PBA members think the group's funds should be spent on Portland Downtown Services' original mission to provide a cleaner, safer downtown instead of on organization officials such as Peden and his boss, Sandra McDonough.

"Going after 'clean money' is morally wrong and also a diversion," says Barry Schlesinger, a downtown property owner whose parking company won the city contract in 2003.