Nearly 40 years after he entered public office, the man with the most diverse résumé in recent Oregon political history is done.

And with his public career complete, the often-reticent Theodore R. Kulongoski is increasingly candid about his past—and Oregon's future.

On Jan. 10, Kulongoski, still trim and gingery-haired at 70, will cease being governor, ending a political career at the highest levels of the legislative, judicial and executive branches of state government.

Kulongoski served three years in the Oregon House, five in the Senate, four years as insurance commissioner, one term as attorney general, four years as an Oregon Supreme Court justice, and eight years as governor.

Remarkably, considering such a lengthy tenure, Kulongoski avoided personal scandal. As the state's chief executive, he made wrenching policy decisions and demonstrated a level of empathy unusual for those who attain real power—as evidenced by his dedication to the men and women who serve in the military.

When the federal government dumped caskets in Portland and declined to pay the freight for the last miles home, Kulongoski commandeered National Guard helicopters to deliver the deceased. He canceled trips and made CEOs wait so he could attend Oregon soldiers' funerals, more than one every month for the past eight years.

"The sheer number of funerals became overwhelming," Kulongoski told WW in a two-hour conversation in mid-December. "And that changed me."

It's unlikely historians will view Kulongoski as a great governor. Partly because of the recessions that bookended his tenure. And because Kulongoski is many things, but dynamic is not one of them. It's far more likely that he will be remembered for his sense of duty.

There may be no better and more recent example than his "reset report," a blunt diagnosis of Oregon's current malaise, which he summarized as follows: "The government we have is too expensive to maintain."

His proposal to reduce public employee compensation puts him at odds with organized labor, the interest group most responsible for his many electoral victories.

Kulongoski, originally a labor lawyer, is in a real sense a father of Oregon's public employee unions, having written the 1973 law that permitted state employees to engage in collective bargaining.

Yet, at key junctures, he put taxpayers first. In 1989, as state insurance commissioner, he implemented sweeping business-friendly workers' compensation reforms; in 2003, as governor, he slashed billions of dollars in benefits from the Public Employee Retirement System.

In other ways, Kulongoski achieved more than critics may realize. He implemented aggressive renewable energy standards (backed—too strongly, perhaps—by a tax credit program that launched Oregon's wind and solar industries), made college accessible to thousands more students, created a rainy day fund and obtained health insurance for nearly 100,000 children.

Wherever Kulongoski goes, he introduces himself the same way: "Hi, I'm Ted." But despite that low-key approach and regular-guy affections for Waylon Jennings, Dairy Queen and union-brewed beer, Kulongoski is complicated.

In his WW interview, he spoke bluntly about the challenges facing this state and the consequences of his fateful decision to make Neil Goldschmidt part of his administration.

And he discussed a topic that shaped his approach to everything: his mother placing him in a St. Louis orphanage for much of his childhood.

"I spent a lot of time in my life denying certain things about how I was raised," Kulongoski says.

"And what I now know more than anything at the age of 70 is, bad things happen to good people," he said. "They happen to all of us. And we're not judged by how many bad things happen but by how you overcome them and actually make something of yourself."

Here, edited for brevity and clarity, is Gov. Ted Kulongoski unbound:

Willamette Week: How are you feeling about leaving office?

Ted Kulongoski: In preparation for my move out of Mahonia Hall [the governor's mansion], I had to recently go out and buy a toilet brush. This is a challenge, readjusting. You know, six months ago, if you asked me, I would have told you I was probably looking forward to Jan. 10, but the closer I've gotten the more difficult it is. The reality of it is, I like it. I like governance, I like being governor. But the truth is, I also like the perks. I like someone to drive me, I like, you know, all these things, and you just get used to it.

So, are you going to pull a Kitzhaber and run again in 2014?

No, no, no, no, no. I'm a little too old for this now.

Of all the elected officials you've observed, who was the most effective?

I think [Gov.] Tom McCall had a particular skill. He could recognize a good parade forming, and he knew how to get in front of it. That is part of being a great leader. He could push an agenda, even if it wasn't his. If it was something that he believed in, he could actually lead it.

You're leaving office at a time when the national economy is still in the dumps and Oregon is performing poorly by many measures. Why is Oregon lagging behind other states—Washington, for example—in terms of employment and job creation?

Washington has always put higher education as the No. 1 issue. And Washington is a much more cosmopolitan state, even though it has a footprint like Oregon. It has Seattle, a huge port on the ocean, and it put its major university in its major city. We put ours 120 miles away. And Washington's had a much broader economic base than Oregon did, because Oregon was basically a natural resource state. And Washington developed [knowledge-based] companies like Boeing and, later, Microsoft. One of the dilemmas we've had is that we've never had the culture of investment in higher ed.

Why not?

Historically, given our natural resource-based economy, if you finished high school, you could find a job with great wages, great health care, a retirement benefit. Oregon is still in a transformational stage in its economy. Look, I wish I could tell you that this happens overnight, but it doesn't.

But when you ran for governor in 2002, you made higher education a key part of your platform. Would you say you succeeded?

No. If you ask me all the things I would say were a disappointment, one would be that I had a strategy around higher education that we didn't execute.

Ted's Timeline on Dipity.

Is that because the man you appointed to chair the higher-ed board, former Gov. Neil Goldschmidt, became embroiled in a scandal?

It was Neil. I wanted a leader that would actually be a catalyst for change. [After he resigned] I never got the traction back.

How did Goldschmidt's downfall affect you personally?

Being governor is very lonely, because no one knows what it's like to be a governor. And the truth of it is that you look for somebody like that, [who] you can talk to, and you just like to talk to them because they're very creative and they've got a force in their personality. And it was more than just higher ed: Neil was my voice on the CRC before it ever became an issue. Losing him—and I don't want to sound disparaging of anyone—but losing that, there's nobody else I could sit down and talk to in that way. I saw the press conference the other day with Obama, and then Bill Clinton comes in and takes over. There is a similarity between these two guys. Goldschmidt and Clinton, you know: size, everything, the skill set that they have. They're very bright. They're very articulate. You go in for five minutes, and they're still talking after a half hour.

Was the Goldschmidt scandal part of why you were ambivalent about whether to run for re-election in 2006?

Yes. People like Neil don't come along very often.

Let's get back to today. Why is it that the business community and the Democratic Party seem so estranged from each other in Oregon?

If you look at governance, the changes that come are from forces external to that system. In Massachusetts, it used to be the archbishop or the cardinal. In Michigan, it's unions. In Oregon, it used to be the business community. Before the '70s, it was three groups: the financial institutions, the timber companies and the utilities. And the commonality between all three of those, they were Oregon companies, run by Oregonians. And what you now have is companies like Columbia Sportswear and Nike, but they're not the same as a timber company or a utility that has its employees based here. [Nike and Columbia] are international companies based in an international marketplace with commitments in Vietnam and Bangladesh and a variety of places. I think the difference between then and today is that people like [former PacifiCorp CEO] Glenn Jackson actually saw Oregon as much larger than just their individual business. I'm not telling you they weren't looking out for their individual businesses' interests, I'm just telling you they shared a vision with the whole state. But what you have now with the business community is all these different groups with multiple names and missions. And they can never come together on a common goal.

That may be true, but one of the complaints business interests make is that public employee unions have too much power. Are they right?

The nature of government is power. There have always been interest groups with power. What I think the complaint is with the business community, to be frank with you, is they [the unions] have more power than us [businesses].

But you would acknowledge the strength of public employee unions in this state. When you reformed the Public Employees Retirement System in 2003, unions came at you pretty hard, didn't they?

OK, listen, you and I know they tried to recruit John [Kitzhaber], [U.S. Rep. Peter] DeFazio, or anybody they could to run against me in '06. And when they couldn't find a candidate and I won the primary…two years later, the target became Macpherson.

You mean former state Rep. Greg Macpherson (D-Lake Oswego), who carried your PERS reform bill. When he ran for attorney general in 2008, public employee unions gave hundreds of thousands of dollars to his opponent, John Kroger. How did that make you feel?

I had such confidence in Greg's ability. It surprised me that he lost. Even with the union support for Kroger. But this is how politics works now. Let's say you are [a special interest] and you've got a million dollars. And you've got 10 candidates. You give $100,000 to each of them. And you elect six. And you say, "This is a good investment." But you also lost four. Or, let's say you have a million dollars and you instead say, "You see that guy? People think he can't be beat. I'm going to put all [one] million dollars against that person." And you defeat him. Which of those scenarios do you think affects 90 legislators the most? The latter. Look, politics is always about power. The question is whether power is equally distributed. Public-sector unions have got no competition right now. They have the ability to come together in a room with a number of like-minded people and start building the base. There are about 220,000 public employees in the state. If you add in federal employees, it's about 240,000. State, city, county, federal. Give each of them a spouse. Now I'm about up to almost 500,000. Give them each a child. Now spread the group out. I'm telling you, in a state with 2.4 million voters, that's a powerful group.

How else have things changed from when you entered public office 35 years ago?

I've got less hair [laughs]. Look, I came in at a time when the Oregon governor was the chief executive officer of the state, ran the executive department and prepared the budget. Policy was generally generated by the Legislature. The Bottle Bill, Beach Bill, land-use planning—those were all legislative initiatives. Today, I am still the executive officer and I run the budget. But I am also looked upon now by the Legislature, and interestingly enough by the media and the public, as the person who is also supposed to generate all the policy initiatives. I do not think that's good.

Why has the governor's role changed?

The rise of the initiative process has intimidated the legislative process. It's the Legislature putting referendums out and saying, "Let's ask the public," instead of them doing it themselves. Secondly, it's the amount of money it takes to be elected. Third, the [negative] tenor of the campaigns are such that I don't think legislators want to collaborate or see each other in interim sessions when a lot of work used to get done.

Could you identify one or two of the toughest parts of being governor?

The sheer number of military funerals became overwhelming. And it changed me. I've talked to too many parents who have lost their children. The last time I went to Iraq, I was meeting at the embassy with a number of the generals who were in the theater at that time and they were talking about the importance of what I was doing over there to sign this memorandum of understanding with the civilian government [Oregon State University is working with the Iraq Ministry of Higher Education on an engineering program]. And they were telling me all this stuff I wasn't sure I believed. So at the end I said, "I'm going to tell you why I'm doing this and why it's important to me and why it's important to you in the military." I've attended all these services for kids that have died. And what the parents are asking me is, "Is there a purpose, was there some reason this happened?' And I told the general, "If this country [Iraq] implodes on itself, what you would tell every one of those parents [is]: It had no purpose." There's going to come a time in the history of our country where we're going to have to deploy these kids again and you're going to have a hard time gaining public support. Because in the rules of warfare, battles are won on the battlefield with soldiers, but wars are won at home in the minds of the people, the civilian population, the parents of these kids. That has changed me more than anything.

What's your greatest strength?

I like people. But it isn't just liking people—I'm not afraid of them. I'm not afraid to listen to them and [have them] tell me, "I don't agree with that." I think the strength is I'm willing to sit down and listen.

What's your greatest weakness?

If I had to do one thing over, I'd do a better job with the media. And it isn't about me. I finally learned in this process over time [that] I don't think we have the ability, the media or me, to look at things cumulatively. I think we always look at just what's in front of us today. And what I now realize is, I have an obligation to the public to keep telling them what we're doing. I respect [U.S. Sen. Ron] Wyden very much for his ability to always be out there. That's what I would have done more of, and I think governors like McCall and Atiyeh, they did much better than I did.

What state function would you most like to see operate differently?

The K-12 education system. I still believe we measure our success by how much money we give to K-12. We get up and always say, "I gave them $6.4 billion," rather than focusing on outcomes like graduation rates, retention, any other issue. So you not only have to change inside government, you have to change the public's understanding of how success is measured in K-12. I just think we're on the wrong path the way we're doing it now.

One of the biggest battles during your tenure was over land-use laws. In 2004, critics of Oregon's strict land-use laws passed Measure 37, gutting those laws. In 2007, Measure 49 restored much of the original structure. Property-rights groups say land-use laws are part of the reason our economy lags. Are they right?

No. I read an Oregonian article the other day in which a housing industry representative said what saved Oregon in this recession was the land-use system. I do think our land-use laws are one of Oregon's strengths, and I think it did save us in the sense you didn't have the sprawl of unwanted properties like other states. That doesn't mean there aren't any problems. The issue of how you expand an urban-growth boundary and you give growing areas like Clackamas and Washington counties some room and still be able to maintain the values of this system are a real challenge.

What advice do you have for your successor, John Kitzhaber?

The key to the reset [of state government] is the total labor compensation budget, and that is triggered by the bargaining process. It's important that the state find cost savings in pension and healthcare costs first, because if the state cannot lead the charge, you'll never be able to push it down the local jurisdictions, such as counties and K-12 districts. You just couldn't go to them and [say], "You [local jurisdictions] have to do what we [the state] can't do."

GOP gubernatorial candidate Chris Dudley said Democrats have held the governorship for 24 years and we're probably worse off than we were a quarter century ago, so why not let the other guys have a turn?

Look, there's always an argument to be made that you should turn the snow globe upside down and let the snow fall a different way; I'm not going to argue with that. Whether he was the one to turn it upside down is the question.

What do you hope to do in the next five years?

First, I'll take some time off. Then, I'm interested in working on corrections policy, because you cannot keep putting money into that system. I also have a great interest in a program within AID [the Agency for International Development] called the rule of law. I am absolutely convinced the glue that holds this whole system together is the rule of law. It's what distinguishes this country from other industrialized countries in the world, and why Russia fails—because they never established [the rule of law] before they divested themselves of all the state-run industries. How do you resolve commercial disputes without shooting each other? You know, of all the things that in governance I still am amazed about, there is this: At 11:59 on Jan. 10, I will sit there with all the power, authority, prestige of being the governor of the state of Oregon. One minute later, John Kitzhaber will raise his hand—

And you're going to have your new toilet brush in your hand.

That's right, and you just turn around and you walk out.