David and Goliath Freshman Congressman David Wu took a lot of heat last month for his principled stand on human rights in China, bucking some major employers in his district, including Intel and Nike ("A Question of Conscience," WW, Aug. 11, 1999). In the aftermath of the vote, Lake Oswego Mayor Alice Schlenker and state Rep. Bill Witt say they're considering a challenge to the freshman Democrat in the next election. Taken together, Intel, Nike and a couple of high-profile Republicans add up to some pretty hefty foes. But they're strictly small fry compared with Wu's latest critic: the government of the People's Republic of China. Last week, the Chinese government, in the guise of official news agency Xinhua, denounced Wu's "disappointing performance" in the House and called on Chinese-Americans to withdraw their support from the Oregon Democrat. The government's sentiments, contained in a Xinhua opinion piece issued Aug. 19, are likely to be reported in the Chinese-American press but probably won't do much damage. Although he speaks fluent Mandarin, Wu has always campaigned as an Oregonian rather than an Asian in a district with a tiny Chinese-American population. The news agency accused Wu of "setting two fires" on Capitol Hill, one for leading the charge against renewing China's most-favored nation trade status and the second for supporting China's arch-enemy, Taiwan. Wu sponsored the Taiwan Security Enhancement Act, which requires the U.S. to defend Taiwan against invasion from mainland China. Xinhua suggested that Wu's support for Taiwan derives from the fact that he was born there, an implication Wu vigorously disputes. "I may be new to politics," says the one-term lawmaker, "but I've won more elections than the entire Chinese leadership combined." --Chris Lydgate Hard on Microsoft FOLLOW-UP For the past year, Portland investment adviser Bill Parish has been a lone wolf, baying at what he considers lax accounting standards. Parish's primary target has been Microsoft, which he believes benefits enormously from issuing employee stock options ("Window Dressing." WW, March 10, 1999). Parish is alone no longer. The cover story in the Aug. 13 edition of The Economist also blasts rules that allow the Seattle software giant and all other publicly traded companies to treat stock options as tax deductions but do not require them to list those deductions as expenses. The Economist quotes a London researcher who says that, when the cost of options are figured in, Microsoft actually lost $18 billion last year, rather than making $4.5 billion as reported. Although he wasn't mentioned in the Economist article, Parish has created a Web site (www.billparish.com) and published press releases detailing the exact same theory. He finds the affirmation of his work in what is rumored to be Bill Gates' favorite magazine encouraging. "The Economist is probably the most prestigious business publication in the world," he says. For the most part, however, mainstream publications have ignored his analysis. Parish blames the power of Gates and other American corporate titans for keeping the options story out of the news. "There's been a collapse of integrity in the media," Parish says, noting cross holdings (such as General Electric's ownership of NBC) and the fear of losing ad revenue. "Microsoft is the biggest advertiser in the business press," he says. Microsoft did not return WW's phone calls. --Nigel Jaquiss Taking Stock While the stock market established all-time highs this week, prospects for two of Portland's leading money men are considerably less rosy. When Andrew Wiederhorn's Wilshire Financial Services Group blew up last year, the young financier blamed the global economic crisis ("Ask Andrew Wiederhorn," WW, Jan. 13, 1999). As the crisis rippled through world markets, the financial scrap yard of high-risk loans he had assembled lost value rapidly relative to U.S. government bonds. Such a meltdown, he told WW, was an extraordinarily rare event. It's happening again. Today, lower-quality financial assets have once more declined to levels reached during the global crisis that drove Wilshire into bankruptcy. Since the beginning of the year, the spread between U.S. government bonds and other debt securities has widened steadily, leaving Wilshire and other buyers of distressed assets looking shaky. Last week, the WFSG board made the unusual move of suspending Wiederhorn for two weeks. Wiederhorn's suspension can't be good for his one-time mentor, Jeff Grayson of the Portland-pension fund manager Capital Consultants Inc. Grayson invested nearly $200 million of his investors' money in a private Wiederhorn company, which was absorbed by WFSG in its bankruptcy reorganization. The turmoil at Wilshire wasn't the only bad news for Grayson. Capital Consultants' 40-percent stake in the local biotech firm A-Fem Medical Corp. (also known as Athena Medical) looks like a disaster. According to quarterly results released last week, A-Fem lost $653,000 for the quarter and is hemorrhaging cash. The company reported negligible sales and expenses of $200,000 a month--money that it doesn't have. "These circumstances raise substantial doubt about A-Fem's ability to continue as a going concern," according to A-Fem's filings. Wiederhorn wasn't available for comment. Grayson did not return WW's call. -- Nigel Jaquiss Bananas Republic Is Kenneth Wayne putting a new twist on an old scam? Or is he just twisted? In either case, the Seattleite was willing to place his name on a curious $19,000 full-page ad that appeared in the Sunday, Aug. 22, Forum section of The Oregonian. Wayne used the ad to make near-incomprehensible accusations against the attorneys general of Oregon and Washington and then invited them to "a private gift giving and receiving party." Oregon Attorney General Hardy Myers believes that such parties are, in fact, illegal pyramid schemes. He says participants are invited to pony up $2,000 at gifting parties and need to attract new participants to reach potential payoffs of $16,000. Myers says the schemes eventually fall apart, and latecomers never get their money back, let alone the promised payoff. Myers' office announced on July 27 that it is investigating a new scheme known as Northwest Family Reunion. The scheme is most active in southern Oregon, but there are reports of gifting parties in the Portland area. Wayne assured WW that he has no direct knowledge of the parties but "knows about them." He says they're similar to "birthday parties" and that cash is exchanged among participants. More importantly, he told WW, the parties are legal under international law, which he claims takes precedence because the 50 states were each founded as independent republics. As for Myers, Wayne says Oregon's top law officer is guilty of "racketeering, extortion and securities fraud," because the tactics of his investigation are frightening participants away from the gifting parties. Myers' spokeswoman, Kristen Grainger, says the ad is an attempt to sow doubt in the minds of Oregonians who might provide her office with evidence. But she promises, "We will continue to bust these people and warn Oregonians away from them." --Philip Dawdy Schwing! Team Schwa Scores Big For many local athletes, Portland's wet-and-wild weather is a training disadvantage. But for the frisbee-flipping women of Schwa, it turned out to be an asset. "This was the tournament of seven different weather patterns," says co-captain Tracey Satterfield, whose team finished second in the Aug. 8-14 World Ultimate Club Championships in St. Andrews, Scotland ("Ultimately Fabulous," WW, Aug. 11, 1999). Considering the shifts that brought thunderstorms and 25 mph winds, it's no wonder the Pacific Northwest teams felt right at home. Portland's Schwa went into the ultimate frisbee competition ranked 11th and came home wearing silver. First place went to Schwa's Seattle rival, Women on the Verge. Schwa went 10-2 at the tourney, playing two games each day until reaching the semifinals, where the team lost both times to Seattle, including the 19-13 final match. "None of us got to see the sights because we kept on winning," recalls Satterfield, who notes that she and her teammates did have time to kick it with locals at pubs and enjoy some excellent scotch. This being a rebuilding year, the team was delighted to finish so strongly, but it won't rest on its laurels. Schwa and the Verge will soon meet again at the Santa Cruz Labor Day Ultimate Frisbee Championships Sept. 4-6, and then in the weighty Oct. 9-10 regional competition in Blaine, Wash., which is regarded as hosting tougher play than national or world meets. Spectators can catch Schwa team practices through mid-September at 6 pm on Tuesdays and Thursdays at Floyd Light Middle School in Southeast Portland. --Christina Melander Party Favors Proving that Republicans aren't the only ones who can beat themselves up, House Democrats got together last week and narrowly voted to retain Rep. Kitty Piercy as minority leader. That sounds OK until you realize the Eugene Democrat won't be in the Legislature next session. So why did the Dems pick a lame duck instead of assistant caucus leader Dan Gardner, who was the heir apparent? No one's talking--at least publicly--but it's clearly a slap at Gardner, a Portland representative who's been working for months recruiting candidates and setting up the party machine for Election 2000. He expected a visible vote of confidence but instead was met with an early revolt. Sources say 24 House members showed up for the meeting, which was sparked by an unexpected call for a vote to retain current leadership. At first vote, one member abstained in protest, but after some parliamentary jockeying, sources say, the motion passed 13-11. The fallout has left the caucus fractured. Gardner wouldn't comment about the snub, but one member, who asked not to be named, said, "It's the worst thing I've ever experienced here. Magnitude-wise, this is off the charts." --Patty Wentz Correction In our review of Brokedown Palace (Screen, Aug. 18, 1999), we mistakenly listed the setting as Taiwan. The story actually takes place in Thailand. WW regrets the error. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Willamette Week | originally published August 25, 1999