On June 9, 2021, the roughly 2,300 pension beneficiaries of the R.B. Pamplin Corp. became part owners of something called the “Swan property.”
On that day, the $105 million R.B. Pamplin Corporation and Subsidiaries Pension and Trust bought a parcel of real estate from an affiliated Pamplin company, paying $1.62 million for a fractional interest in the land.
It’s not clear where the Swan property is located. Its size and address aren’t disclosed in the fund’s annual filing, made last month.
What’s more important, however, is that a company selling property to its own pension fund is something federal pension regulators prohibit. It’s a practice the R.B. Pamplin Corp. has engaged in before, as WW first reported last winter (“Trader Bob,” Feb. 23).
But in the past year, R.B. Pamplin Corp. began making land deals with its pension fund at an extraordinary rate and scale.
Over the next six months, the fund would purchase 14 more fractional interests in the same property, memorializing the transactions with a new deed in each case. The sales of the Swan property transferred $10 million in cash from the pension fund to a Pamplin operating company.
In all, the Pamplin pension fund bought real estate from affiliated Pamplin-owned companies in 30 separate transactions during 2021, for a total of $16.97 million. In effect, the Pamplin operating companies exchanged unwanted real estate for cash—at a blistering rate.
In the years 2019 and 2020 combined, for example, there were 14 such transactions with the pension fund, fewer than half the number reported for 2021.
The new details come from federal disclosures the pension fund filed with the U.S. Department of Labor in late October, and they shed new light on the troubles of Dr. Robert B. Pamplin Jr.
Pamplin, 81, is president of R.B. Pamplin Corp., a firm his father founded that grew to include Southern textile mills and, in Oregon, Ross Island Sand & Gravel, an 81,000-acre cattle ranch, two vineyards and 24 newspapers, led by the Portland Tribune.
In the 1990s, Pamplin occupied a spot on the Forbes list of the 400 wealthiest Americans, but his fortunes have since suffered a steep decline.
“Dr. Pamplin is an amazing person, and he had his fingers in a lot of businesses,” says Steve Law, a reporter and editor who retired from the Tribune in 2019. “His ghost town Shaniko, Christian music business, his radio stations, Ross Island Sand & Gravel, the textile mills…one by one, they seem to be falling apart. It’s kind of a reverse Midas touch.”
U.S. Department of Labor regulations say a pension fund should not hold more than 10% of its assets in real estate acquired from related parties. At the end of 2020, the Pamplin fund held 24% of its assets in such real estate. The new filings show that share had moved up to 36% by the end of 2020, and with additional transactions reported in the audited financials for 2022, it is now well over 40%.
Robert Pamplin owns and runs the R.B. Pamplin Corp. He is also the sole trustee of the Pamplin pension fund. That means when a Pamplin operating company sells real estate to the pension fund, Pamplin is acting as both the buyer and the seller. That puts him in a position of inherent conflict because, on behalf of his company, he wants to sell at the highest possible price while, on behalf of the pension fund, he wants to buy at the lowest possible price.
“In lay terms, it’s self-dealing,” says James Ambrose, a Portland pension lawyer who reviewed the new federal filings. “Pamplin is on both sides of the transaction. That is particularly concerning when the plan is purchasing property.”
The Department of Labor classifies sales of real estate from an operating company to a related pension fund as “prohibited transactions” because they are risky and subject to abuse. The agency requires pension trustees who wish to enter into such transactions to apply for and obtain a waiver for each transaction.
DOL spokesman Michael Petersen told WW earlier this year that, despite all the prohibited real estate transactions from 2019 through 2021, Pamplin had never sought a waiver. (Failure to obtain a waiver can result in financial penalties and the cancellation of transactions. Petersen declined to comment on whether his agency is investigating the Pamplin pension fund.) DOL declined to comment for this story.
Some of the properties Pamplin companies have sold to the pension fund are un- or underused industrial properties that the operating companies then lease back from the fund.
Although the real estate transactions appear questionable, the good news for pensioners is, the fund holds nearly enough assets to cover its obligations—if the real estate is worth what the fund values it at.
Fund documents say the real estate prices were based on third-party appraisals, but those have not been made public. WW has reported the values of two prominent parcels that the Pamplin subsidiary Ross Island Sand & Gravel transferred to the pension fund—a defunct concrete plant on the waterfront and Ross Island itself—appear to have been significantly overvalued.
As WW has previously reported, Pamplin companies have struggled in recent years to meet their financial obligations, including property and withholding taxes.
What looks like a cash crunch may explain the pension transactions. Prior to 2018, the pension plan’s written contribution policy called on the parent company, R.B. Pamplin Corp., to contribute cash every year to fund its obligations to beneficiaries. In 2018, records show, that policy changed to allow “cash contributions or property contributions.” Since then, the parent company has rarely contributed cash.
A Pamplin spokesperson previously told WW that all pension fund transactions are legal and prudent and that Pamplin operating companies are in strong financial shape. A spokesperson did not respond to requests for comment on this story.
On Nov. 1, the Tribune, which was distributed free for 20 years, moved to a subscription-only model, a sign of how tough the newspaper business is for all publishers.
Ben Jacklet, a former Tribune reporter, says he feels for his old colleagues and other Pamplin staff and pensioners.
“I am so glad I cashed out of the Pamplin pension when I had my chance,” Jacklet says. “I feel bad for all the employees and former employees who are stuck in the middle of this mess.”