photo by MICHAEL OLFERTLEAD STORY
BIG DOG
He's got the chiseled countenance of Kesey, the political savvy of Hatfield and the persuasive powers of McCall. He once used those unnatural resources on behalf of the city, the state and the nation. Now he's shaping the civic landscape for his corporate clients.BY BOB YOUNG
byoung@wweek.com
LEAD STORY SIDEBAR
Citizen Neil
"Lobbyists say they're advancing the public interest, but the average person is not able to pay someone like Goldschmidt enough to get ideas executed before a government body or court of public opinion," says Bill Hogan of the Center for Public Integrity.
Rarely has a staff, like Gov. Goldschmidt's, left the public sector to land such positions of power in the private sector.
Goldschmidt's chief aide Tom Imeson is now a vice president with PacifiCorp, a Portland energy company with
operations in seven states.
Gail Achterman, Goldschmidt's advisor on natural resources, is a partner with the Portland law firm Stoel Rives Boley Jones & Grey.
Fred Miller, who
was Goldschmidt's liaison to state agencies, is a vice president with Portland General Electric.
Goldschmidt and Phil Knight have long been friendly: Nike was the biggest contributor to Goldschmidt's gubernatorial campaign, and Knight gave $50,000 earlier this year to a parks campaign Goldschmidt is spearheading.
He's connected:
In the past, Goldschmidt has mentioned his friendships with Hillary Clinton, Clinton advisor Mickey Kantor, Cabinet member Donna Shalala, and U.N. ambassador Richard Holbrooke.
"I've never seen such a collection of people with wit, humor and talent--with the possible exception of
the night Neil Goldschmidt dined alone," joked
Norma Paulus at
a 1995 roast.
"Neil's ability, that charisma he has,
is what got the Umpqua project authorized," says Marc Kelly, a former Goldschmidt campaign manager who now manages the land-exchange
project for Aaron Jones.
The Airline Competition Committee that Goldschmidt chairs was organized by the Wexler Group, a public-relations firm run by former Carter aide Anne Wexler.
OSPIRG asked Goldschmidt to help in 1996 with its
ballot measure to expand the bottle bill. Goldschmidt declined to work on the campaign that was outspent 10-1 by an industry campaign run by his friend Jill Thorne.
Prof. Paul Dempsey, director of the transportation law program at the University of Denver, says he's "mystified" by Goldschmidt's position on airline regulations.
Goldschmidt's mentor Glenn Jackson owned interests in mining, newspapers, timber, airlines and railroads. "He has so many conflicts, they cancel each other out," Mark Hatfield once said, according to author Brent Walth.
"He came to Washington
with such high promise and left on a leash pulled by big business," says consumer advocate Ralph Nader. "Somewhere along the line he lost his nerve and said, 'I'm going to enjoy myself.'"
Goldschmidt's current work in the River District builds on urban development he landed as mayor. "All these things are a natural outgrowth he started in the '70s," says developer Homer Williams. "He's like a nurturing parent."
Goldschmidt's work for Aaron Jones' proposed land swap in the 3-million-acre Umpqua Basin is done. A group of scientists is now studying the proposal. In addition to $2.4 million in campaign contributions, the major airlines have spent $2.5 million on lobbying in the 1997-98 election cycle. Source: Center for Responsive Politics in Washington D.C.
Ever lunch in Pioneer Courthouse Square and marvel at Portland's bustling, pedestrian-friendly downtown?
You can thank Neil Goldschmidt for that.
The same goes for the MAX line and transit mall.
"He made things happen like no one before or since," says Ron Buel, who worked for Goldschmidt in City Hall before founding Willamette Week.
Mayor at 32, a member of Jimmy Carter's cabinet at 38 and governor at 46, Goldschmidt combined the rugged looks of Ken Kesey, political acumen of Mark Hatfield and oratorical skills of former Gov. Tom McCall to become one of the most charismatic politicians Oregon has ever produced.
His impact as a public servant was huge. Not only did he rebuild downtown, but he also opened an all-white, all-male City Hall to neighborhood activists, women and minorities. When he left office in 1990, people worried that Oregon would suffer a tremendous loss--that Goldschmidt's power would disappear like a receding tide.
Hardly.
At 58, Goldschmidt, the private citizen, is quietly exercising enormous clout, leaving fingerprints all over the city, state and nation.
From new neighborhoods in the River District to a proposed light-rail line that will run to the airport, Goldschmidt is still shaping the public landscape like modeling clay. His reach extends to massive forests in southern Oregon and high-tech plants in the Willamette Valley. On a national level, he heads a prominent group that's battling the government over airline regulations. He's even helped foreign governments hurdle trade barriers.
He's enjoying the rewards--and feeding his Falstaffian appetites--like never before. He zips across the country on the French jet of a timber executive; for fun, he putters around his 20-acre Willamette Valley vineyard; at night he retires to a $1 million home with his wife, Diana Snowden, a corporate executive who just finished pinch-hitting as Portland Public Schools' superintendent.
But Goldschmidt's new life isn't exactly Shangri La. Not everyone is lauding him.
Consumer groups, government watchdogs and environmentalists have castigated Goldschmidt for some of the projects he's undertaken as a paid lobbyist. Even Gov. John Kitzhaber has been at odds with his fellow Democrat for the work he's done.
That work, it should be pointed out, is hard to identify because Goldschmidt won't talk about his clients--not even with friends. The work also raises questions about former elected officials who trade on their stature, access and influence for personal gain.
"If you're doing something you really believe in, it seems you'd be very interested in talking about it with other people," says Bill Hogan, deputy director of the Center for Public Integrity, a nonprofit research group in Washington, D.C. "Doesn't his reluctance [to talk] tell you something?"
Perhaps it says--as Ralph Nader claims--that Goldschmidt has sacrificed his 1960s ideals for 1990s comforts as he hits his peak earning years. Others suggest that he's matured like one of his beloved wines; he's gone from a public figure--who was limited in the issues he could tackle and the deals he could cut--to a real power broker who can select his causes and savor material rewards.
Former Gov. Vic Atiyeh is fond of saying he went from a peacock to a feather duster the day he left office. Goldschmidt, on the other hand, seems to have gone from peacock to condor. From his Olympian perch, he swoops and soars from project to project.
"He's a rare bird," says Irving Levin, CEO of Renaissance Bank Cards, a Portland company that Goldschmidt partly owns and has lobbied for. "He's been a politician and a businessman, and he understands both worlds really well."
There's also an air of intrigue, if not secrecy, that surrounds his work. "I keep running into projects and discovering 'Oh Neil's on that,'" says Ruth Scott, director of the Association for Portland Progress, a downtown business group.
Goldschmidt himself wouldn't discuss his work with WW. Through one of his assistants at Neil Goldschmidt Inc., he declined to be interviewed. Some of his clients and friends also refused to talk with WW after checking with Goldschmidt.
It is clear, though, from interviews with more than 70 sources and an examination of public records in Oregon and Washington, D.C., that Goldschmidt's list of clients is long and lucrative.
Some of his work is consistent with his passion for making downtown Portland an attractive place.
For instance, Goldschmidt served in the mid-1990s as a consultant to developer Homer Williams, who's turning 34 acres of derelict rail yards in Northwest Portland into a new neighborhood known as the River District. Goldschmidt advised Williams and his partners on how they might get federal money to remove the Lovejoy Ramp to the Broadway Bridge and create a new trolley line that will run from Northwest Portland to Portland State University.
"He helped show us in the private sector what could and couldn't be done," says Williams.
Williams' plans came out fine: With Sen. Mark Hatfield's help, the city grabbed $9 million in federal aid for ramp removal and the trolley. However, conversations with Williams and Mayor Vera Katz don't clarify exactly what role Goldschmidt played in landing the federal money.
That mystery isn't unusual with Goldschmidt's work. It's not that sources are evasive; it's more that Goldschmidt's work tends toward the less tangible. He has a powerful intellect and a Rolodex to die for, and he spits out idea after idea. If something meshes, then Goldschmidt is the ideal envoy to bring influential people together because he knows so many and is liked by so many.
Goldschmidt has also offered paid advice to the Schnitzer and Zidell families, who want to develop a 50-acre parcel south of the Marquam Bridge into another upscale neighborhood, called North Macadam. Schnitzer Investments president Ken Novack declined to talk with WW. But Mayor Katz says Goldschmidt has lobbied her on behalf of the developers, urging the city to create a multi-million dollar network of street, sewer and other infrastructure improvements in the area.
"We're not moving fast enough for him," says Katz, who considers Goldschmidt a close friend. "We're plodding through the process, planning to work on the possibility of creating an urban renewal district there."
Goldschmidt has also tried to excite Katz about the idea of running a tram from Oregon Health Sciences University--where Goldschmidt serves on the board of directors--down to the North Macadam development, where OHSU wants to build a new Women's Health Center and office buildings.
Another example of Goldschmidt's continuing interest in the city is his work for Bechtel Enterprises, a California firm that develops massive real-estate and transportation projects from Saudi Arabia to San Francisco. Last year, Bechtel became partners with the city, Tri-Met and the Port of Portland in a plan to extend light rail to the airport. The deal calls for Bechtel to put up $30 million for light-rail construction; in return, it gets to develop 120 acres of industrial and commercial property along the line.
Port director Mike Thorne and Tri-Met boss Tom Walsh did not respond to WW's queries about Goldschmidt and the project. Katz says Goldschmidt's main role was to introduce Bechtel vice president Ralph Stanley--whom Goldschmidt knew from his days as transportation secretary--to key local decision makers.
Bechtel won't say what it paid Goldschmidt for the airport deal, but the sum appears to have been substantial. In 1995, Bechtel reported to state officials that it paid Goldschmidt's firm $96,035 for lobbying in Oregon.
Outside Portland, Goldschmidt takes advantage of his expertise and connections as U.S. transportation secretary under Jimmy Carter.
The job wasn't simple. As the nation's top administrator of land, sea and air traffic in 1979 and '80, Goldschmidt grappled with airline deregulation, oil shortages and the near collapse of the American auto industry. At the same time, he maintained friendly relationships with the CEOs of the big three auto manufacturers--so much so that he reportedly had a phone in his credenza whose number was known only by the trio of car executives.
Goldschmidt tapped these kinds of connections shortly after he left the governor's office. In 1991, just six months after he walked away from Mahonia Hall, he was hired as a lobbyist by Southern Pacific Railroad.
A year later, Greenbrier, a Lake Oswego company that manufactures rail cars, came calling. CEO Bill Furman says he snagged the former transportation secretary to convince major railroads of the merits of a new Greenbrier product--a container that held automobiles.
Goldschmidt's portfolio also grew to include a lobbying stint for Burlington Northern Railroad and work for Evergreen Aviation in McMinnville, which sought his help in repossessing seven 747 jumbo jets it had leased to bankrupted Pan Am airlines.
For the last seven years, Goldschmidt has also been on the payroll of Nike--where he had worked from 1981 to 1986--as a consultant on transportation and trade issues. What precisely does he do for the shoe giant? Only Goldschmidt and the Swooshmasters know for sure. Company officials won't divulge what Nike pays Goldschmidt, and Nike spokesman Lee Weinstein--who once was Gov. Goldschmidt's press secretary--will only say his former boss has an "ongoing consulting relationship" with the company.
Almost from the day he ceased being governor, Goldschmidt has also collected checks from PacfiCorp, a $4 billion energy company based in Portland. Since 1991, the company has paid him over $320,000, according to records with the state Public Utility Commission.
Tom Imeson, a PacifiCorp vice president who was Goldschmidt's chief gubernatorial aide, was vague about what Goldschmidt does for the utility. "I've never known him to work like a straight lobbyist," says Imeson. "It's more like you tell him your problem and he'll think of a way to resolve it and advocate it."
Elsewhere in the business arena, Goldschmidt registered last year as a lobbyist in Salem for several companies, including Castle Tower, a Texas-based wireless telecommunications company. 0nce again, it's not clear what he does. The company's CEO, Ted Miller Jr. did not returns WW's calls, and Castle Tower's lobbyist registration form does not specify--as it should--what the company might have an interest in.
That's not the case with Renaissance Bank Cards, a Portland company that specializes in providing credit to low-income people.
"Neil is a personal friend and a shareholder and director in the company who appeared at a hearing on one bill," explains the firm's CEO Levin. The bill, passed into law last year, raises the amount Renaissance can charge on late fees.
While Goldschmidt wasn't instrumental in passing the bill, Levin says, "just having him there probably increased the attention of the subcommittee." Such is the magnetism of Goldschmidt's personality.
Even foreigners love Goldschmidt. The government of British Columbia was so impressed with him that it paid Goldschmidt $75,208 for three months of work in 1992 to lobby against a U.S. Department of Commerce tariff on softwood lumber products. He must have been good: The government's ministry of forests hired him the next year to talk to Oregon editorial writers in five cities. The 60-day contract earned him $19,701, according to the foreign agent records at the U.S. Department of Justice.
In at least one case, it appears the line distinguishing the ex-governor from the now-lobbyist was blurred. Hasso Hering, editor of the Albany Democrat-Herald, remembers being visited by Goldschmidt, who came to his office with a Canadian official. Only later did Hering learn that Goldschmidt had come as a paid lobbyist. "I might have missed something," says Hering. "But I didn't know it was a paid arrangement. I was a little miffed about it."
While the pace of a lobbying life may be hectic, it's easy to see the appeal. Since he last held office, Goldschmidt has bought a Riverdale home, valued at $1.08 million. He has also bought two undeveloped lots in Broken Top resort, near Bend, from Homer Williams and has subsequently sold them for $225,000.
His love of fine wines has also led to some dramatic changes in his life. He met Snowden at a classic wine auction, and earlier this year he fulfilled an oenophile's dream--he bought a 20-acre vineyard in Dundee, lush with pinot noir grapes. The property includes a four-bedroom house to which Goldschmidt may one day retire. The sale price: $710,000.
Not bad for a guy whose top pay as governor was $75,000.
Such a lifestyle strikes some as ostentatious--particularly given Goldschmidt's background as a civil-rights activist in Mississippi, his work as a legal-aid lawyer in Northeast Portland and his reputation as a progressive Democratic governor who 10 years ago made it illegal to discriminate against gays.
It's not just his lavish lifestyle that some have called into question but also the way in which he has amassed his wealth. Goldschmidt has been a hired gun for many corporations, but three projects in particular have drawn fire.
The first is Goldschmidt's stint from 1994 to 1997 working for Aaron Jones, a Eugene timber executive. At a glance, the duo seem strange bedfellows. Goldschmidt is a lifelong partisan Democrat; Jones is an arch conservative who donates huge sums to Republican candidates such as Wes Cooley and Bill Sizemore. In fact, in 1992 Jones bankrolled a campaign to recall then-governor Barbara Roberts.
Six years later, the woman who succeeded Goldschmidt finds his association with Jones curious. "That one I am surprised about," says Roberts.
Goldschmidt was hired by Jones to help him swap some of the 100,000 acres he owns in Southern Oregon's Umpqua Basin with property owned by the federal government. The idea is that the feds could get more environmentally sensitive lands from Jones, and Jones could consolidate his holdings to cut more timber.
The deal involved some perks--for instance, traveling to Washington, D.C., on Jones' $18 million Dassault Falcon, an eight-seat jet that flies at just under the speed of sound. Once on Capitol Hill, Goldschmidt briefed Hatfield, Rep. Peter DeFazio and others on the plan and won a $1.7 million congressional appropriation to study the Umpqua land exchange.
Some environmentalists warn that the money may not be spent in the public interest--too often the feds trade uncut lands for cut lands. "I am very disturbed about the potential effects of this project," says Janine Blaeloch, director of the Western Land Exchange Project, a nonprofit research group based in Seattle.
Locals also view the deal suspiciously. "If [Goldschmidt] thinks this is a good thing, I think he's naive," says Francis Eatherington of the Umpqua Watersheds.
Others are more harsh. "I wasn't surprised at all to hear he was working for Aaron," adds Andy Kerr, former director of Oregon Natural Resources Council, noting that Jones donated $17,000 to Goldschmidt's gubernatorial campaign against Republican Norma Paulus. "Neil was the best governor the Republicans ever had. Honestly, one of the reasons he won is that a whole bunch of redneck big-business Republicans wouldn't vote for a woman, and Neil exploited that successfully."
The second job that's drawn criticism is Goldschmidt's work for Hyundai in his hometown of Eugene.
Officially, Goldschmidt registered as a lobbyist for the Korean company last August, but he had actually worked for the company for two years before that. During that time, his job was to help Hyundai get federal, state and local permits to fill wetlands. Without the permits, the company couldn't build the 800-employee semiconductor plant in West Eugene that is now nearing completion, says Hyundai spokesman John Lively.
Goldschmidt's work was not widely known, however, until last summer, when the Eugene Register-Guard reported a new wrinkle to Goldschmidt's assignment. He lobbied the governor to dilute Eugene's new toxics reporting law.
The tough new law had been passed in 1996 because of health concerns raised by national reports about the industry. Hyundai and the Oregon high-tech industry didn't like the law's strict reporting requirements and fines, so GOP lawmakers readied a bill last year to repeal the law.
Kitzhaber threatened to veto the bill. So Goldschmidt visited the governor's office.
It didn't work.
"He was here, and we made it clear that a bill repealing the local ordinance was not acceptable to us," says Kitzhaber's chief of staff Bill Wyatt.
"It is increasingly important that the citizens of Oregon have access to full information about the presence of chemicals in their communities," Kitzhaber wrote in a memo to lawmakers.
Randy Tucker, a lobbyist for OSPIRG, cheers the governor's stand: "I've said 100 times that that bill was an affront to citizens who wanted to improve their own community. We'd love to work with [Goldschmidt] if he's on the right side of the issues. In this case he clearly was not."
The third and most recent controversy involves Goldschmidt's role as co-chairman of the Airlines Competition Committee, a national group that advocates airline deregulation and is funded primarily by American and United airlines.
In this very public role, Goldschmidt has traveled to forums in Florida and at the Heritage Foundation in Washington, D.C., to speak out against new competition guidelines proposed by U.S. transportation secretary Rodney Slater. The problem, according to Slater, is that major airlines keep start-ups and low-fare airlines out of markets through predatory pricing. They slash prices to chase smaller competitors away and then jack up prices and cut service after vanquishing their rivals. Slater's plan would mandate more takeoff and landing slots at airports for discount airlines.
The major airlines have responded with an expensive campaign that the tobacco industry would envy and are using former officials such as Goldschmidt to promote the message that deregulation is good and reregulation is bad. Indeed, the airlines have contributed $2.4 million to congressional campaigns in the current election cycle, which is more than the big-spending tobacco and health-care industries have contributed.
"It's a travesty that the major airlines are spending millions and using people of Goldschmidt's stature to relay a misleading message to American consumers," says Kevin Mitchell, a spokesman for the Business Travel Coalition, an advocacy group funded by 50 major corporations.
Mitchell says Goldschmidt appears to contradict his own actions as transportation secretary when he claims that regulatory relief for discount airlines is bad for consumers. That he agrees with the conservative Heritage Foundation on this issue--as he did in a June 18 debate--is puzzling.
"Neil Goldschmidt appears to be using his previous position at DOT to mislead the American consumer about the intent and results of this new policy," Mitchell says. "It's a great, great public disservice."
America's most famous consumer advocate, Ralph Nader, is also disappointed.
Nader calls Goldschmidt a "tragic figure" because he kowtowed to auto makers and failed to toughen automobile air-pollution and safety rules when he was transportation secretary. "He came to Washington with such high promise and left on a leash pulled by big business," says Nader. "Somewhere along the line he lost his nerve and said 'I'm going to enjoy myself.'"
Kitzhaber, Katz and former governor Roberts all express respect and varying degrees of fondness for Goldschmidt, and none would pass judgment on his business practice.
But all say they wouldn't become lobbyists.
"No," says Kitzhaber, who sees himself working at a health-care think tank when he leaves office.
"I would probably work with young people in school rather than lobby and represent large corporations," says Katz.
"I want to be remembered as a former governor who didn't represent others for money," adds Roberts.
No matter what cynics say, Goldschmidt's defenders argue that his work remains true to his beliefs, that his clients' interests are consistent with his own.
Bob Ames, a former Portland bank president who served as Goldschmidt's special assistant in Washington, D.C., says Goldschmidt simply viewed auto regulations differently than Nader. He saw Ford and Chrysler on the brink of bankruptcy and feared more regulations would kill thousands of jobs.
"I can understand why Ralph Nader would be disappointed," says Ames. "But the industry was on the ropes. Neil wasn't willing to deliver a potentially lethal blow. Sometimes the need for jobs arguably outstrips the needs for fuel efficiency and safety."
Goldschmidt's supporters also say he's scrupulous about what he'll do for clients.
"With us, from the very start, he talked about a whole bunch of ground rules we had to accept up front," says Furman, the rail car manufacturer. "I thought that was a classy thing because frankly so many in government don't have those scruples."
"My sense is that it's very hard for him to be involved strictly for the pay," adds PacifiCorp's Imeson. "You don't get the passion when that's the case."
On balance, the knocks on Goldschmidt strike Gresham Mayor Gussie McRobert as unfair. "Because he spent so much of his time in public service, the man has a right to make a living," says McRobert.
Besides, she adds, his work today is a lot like what he did as an elected official. "His talents are wheeling and dealing and putting deals together. He certainly was a lobbyist when he was governor of Oregon," says McRobert, who covered Goldschmidt as a reporter for Oregon Public Broadcasting in the 1970s. "It's the same job; it's just called a different thing."
Indeed, Goldschmidt never was a yippie, hippie or even an orthodox liberal. In fact, he's becoming more and more like his mentor Glenn "The General" Jackson, the PacifiCorp boss who headed the state highway commission and was long seen as the most powerful man in Oregon because of his ability to broker huge development deals involving public and private interests.
Now, Goldschmidt can pick his issues from a smorgasbord of city, state and national matters, rather than have them dictated by the demands of the office he's holding. All the while his work is consistent with the three priorities he set when he left office: his private life, his business and his nonprofit activities.
"I think he's a very happy guy these days," says Imeson.
"Basically the world is his," adds Katz.
originally published August 26, 1998
