The Oregon Investment Council is responsible for investing more than $50 billion in public funds. But it's increasingly obvious that the five-member board runs more like a private club for ex-Gov. Neil Goldschmidt's cronies than a body entrusted with taxpayer dollars.

Last October, the OIC voted to sink $300 million into the takeover firm Texas Pacific Group. Just hours after getting the state's money, Texas Pacific hired Goldschmidt, Oregon's premier political power-broker, to smooth its effort to purchase Portland General Electric, the utility that provides power to 750,000 Oregonians.

The sequence of events raised questions (see "Power Grab," WW, Nov. 19, 2003) about who knew what and when they knew it.

Part of the intrigue stemmed from the fact that Goldschmidt's wife, Diana, and Jerry Bidwell, founder of the local stockbrokerage firm Bidwell & Company and the man Goldschmidt has called his best friend, cast two of the five votes. (OIC chairman Gerard Drummond, whom Goldschmidt himself appointed to the council in the '80s, cast a third.)

Now, WW has learned that Bidwell--who resigned abruptly from the OIC on July 1--and Goldschmidt were more than friends. They were business partners.

In April 2002, the two purchased a downtown Portland office building together--a building that lies in the path of an ambitious development scheme Goldschmidt publicly championed. Their previously undisclosed business relationship comes to light as an outside investigation into the investment council's inner workings commences.

Patrick Hearn, the state's top ethics official, says Bidwell's partnership with Goldschmidt does not in itself constitute a conflict of interest, but his failure to report it appears to violate state requirements that officials disclose their business interests.

"It looks like he may have been required to disclose," says Hearn, director of the Government Standards and Practices Commission. "Disclosure is always a good idea."

The theory behind disclosure, of course, is that the public deserves to know the OIC's investment decisions are made independently and without regard to council members' personal relationships.

Goldschmidt's business dealings are currently of great interest to state and federal authorities.

In May, Goldschmidt admitted sexually abusing a 14-year-old girl while serving as Portland's mayor in the 1970s (see "The 30-Year Secret," WW, May 12, 2004). He resigned from the chairmanship of the company Texas Pacific set up to buy PGE, from the state board of higher education, the state bar and the powerful consulting firm he headed.

The FBI is currently probing Goldschmidt's relationship with the state-owned workers'-comp provider, SAIF. State Treasurer Randall Edwards has ordered an outside investigator to examine the OIC's operations, including the circumstances surrounding the October vote.

Those inquiries might now include the Woodlark Building--and the question of just how chummy Bidwell and Goldschmidt were before Bidwell voted to give $300 million to Goldschmidt's bosses-to-be.

In April 2002, according to county property records, a company named Woodlark Partners LLC bought the Woodlark Building at 813 SW Alder St. for $4.24 million. Goldschmidt's name is the only one that appears on public records, but three people familiar with the transaction say Bidwell is his partner in the building.

The Woodlark Building is not just any old piece of real estate. At the same time Goldschmidt's group bought the nine-story building in downtown Portland's historic Midtown Blocks, he was actively promoting developer Tom Moyer's desire to connect the North and South Park Blocks into a park that would bisect the central city.

Goldschmidt's stake in the building became public in April 2004, after Gov. Ted Kulongoski appointed him to lead the state's board of higher education. All elected officials and gubernatorial appointees must fill out a form called an "annual verified statement of economic interest."

As a member of the OIC, Bidwell filled out the same form. But while Goldschmidt and his wife acknowledged Woodlark ownership on their statements, Bidwell did not.

Technically, Hearn notes, Bidwell could argue that since his investment was in a limited liability company rather than directly in the real estate, he didn't need to disclose it as "real property," as Goldschmidt chose to do.

But there are at least two other places on the form where Hearn says Bidwell probably should have disclosed ownership. One section requires disclosure if the filer is an officer or director of a business or partnership; another asks about shared business with lobbyists (Goldschmidt is a registered lobbyist).

In any case, neither the general public nor the hundreds of thousands of Oregonians whose retirement monies the OIC invests would have had any clue that Bidwell and Goldschmidt were partners when Bidwell voted to invest in Texas Pacific.

Reached at his home in Camas, Wash., Bidwell declined to comment. "I have nothing to say to you now or ever," he told WW.