Skip to main contentAfter a winter of extraordinary turmoil, the Portland Beavers opened their third season last week. As recently as mid-February, Portland Family Entertainment, the group that owns the Beavers, teetered on the verge of collapse.
But on the morning of Feb. 13, lawyer Steve Janik strode into City Hall and announced that he had salvaged the city's contract with PFE. Even though the tentative deal meant slashing the rent that PFE, a limited partnership of wealthy local businessmen, pays for PGE Park, many people sighed with relief.
At least temporarily, Janik, whom the city hired to negotiate with PFE, saved Mayor Vera Katz the embarrassment of seeing a pet project fail. He saved Portland's baseball boosters the difficulty of explaining how the city could possibly pursue a major-league team if it couldn't even support a minor-league franchise such as the Beavers. And he gave PFE's equity holders, led by Crown Pacific Partners CEO Peter Stott, an opportunity to recoup their losses.
At that moment, Janik, 55, seemed to be worth every penny of the $480,000 in legal fees that records show the city has paid him for his PFE work since 1998.
In his 29-year career, Janik has established a reputation as one of the shrewdest and most effective members of the Oregon Bar. "He's a very, very good lawyer," says Commissioner Jim Francesconi.
"He's extraordinarily bright, has a great grasp of the law and he's very persuasive," says David Lokting, a peer of Janik's.
What few at City Hall apparently knew, however, was that during the time Janik was representing the city regarding PFE, his law firm, Ball Janik, also represented Stott and the company he heads, Crown Pacific, in other legal matters. In fact, several city officials were unaware of the connection until informed by WW.
"I don't think that I knew that Janik's firm represented Stott," says Commissioner Erik Sten.
"I didn't know that his firm represents Crown Pacific," says Commissioner Dan Saltzman. "It raises the perception of a conflict."
Even Katz, who shepherded PFE into existence, says she did not know Ball Janik represented Crown and Stott. Janik says he informed Katz, although not in writing.
Perhaps most importantly, City Attorney Jeff Rogers, whose duties include hiring outside counsel, says he didn't know. "To the best of my knowledge, we were not aware of Ball Janik's representation of Crown Pacific or Stott," Rogers told WW. Janik disputes this also, saying that his partner, Robert Ball, mentioned the firm's representation of Stott to Rogers.
In any case, Janik denies that he has violated Oregon State Bar rules regarding conflicts of interest or acted improperly in any way. He says that his firm's representation of Stott and Crown Pacific did not compromise his efforts on the city's behalf. "There is no conflict," he says, pointing out that PFE is a separate legal entity from the individual partners.
Only the state bar can determine whether Janik's work represents a violation, and no complaint has been filed against him. But whether or not it is a technical conflict, nearly all of the more than two dozen lawyers interviewed for this article told WW that Janik's role raises serious questions about the appearance it creates.
Says Shelley Lorenzen, a former corporate lawyer now active with the League of Women Voters: "One day he represents the city, so they have faith and trust in him, and the next day he represents the other side. Is that appropriate?"
Janik's client list includes a who's who of Portland's development and business community, many of whom seek either financing or crucial regulatory rulings from the city. At the same time, Janik has been hired by the city for some of its biggest development deals over the past decade, making it increasingly difficult
to know whose interests he
represents.
Standing about 5 feet 6 inches, with a deeply lined face and easy smile, the unprepossessing Janik looks more like a kindly uncle than a consigliere to Portland's heaviest hitters. "He's just a steak-and-potatoes type of guy," says his client and friend Greg Goodman, the president of City Center Parking.
Janik has wrestled a nicotine addiction down to two cigarettes a day and channeled his manic energy into the non-carcinogenic but equally addictive hobby of golf. His wife, Sheryl Manning, a CPA and Metropolitan Exposition-Recreation Commissioner, consistently outplays him despite his obsessive preparation. "I watch tapes and read golf books, but the pro says that my swing's got about 17 different ideas in it," Janik says. "I tend to over-intellectualize things."
As befits a man whose name is on the door of one of the city's most influential law firms, Janik makes regular appearances in Jonathan Nicholas' Oregonian column, tees off at Columbia Edgewater and Broken Top golf clubs, drives a Lexus SUV and lives in the Northwest Hills.
Yet his success wasn't exactly preordained. Janik grew up on East Burnside Street, breathing bus fumes and vibrating to the passing traffic. "To say that circumstances were modest would be an overstatement," he recalls.
Janik's mother, Nora Martin, made a name for herself, appearing in B-movies and singing for four years with Eddie Cantor's band, but Janik says that before him nobody in his family had been to college.
Janik excelled at Central Catholic High School, where he was a scholarship student. Too small to get into a football or basketball game without a ticket, he employed charm and brains to earn the titles of student body president and valedictorian.
After high school, Janik breezed through Harvard, graduating magna cum laude. He stayed around Cambridge long enough to earn a joint law degree and master's of business administration, both with honors.
Back in Portland, Janik joined the city's largest law firm, now called Stoel Rives. He specialized in land-use law, which involves navigating planning, zoning and permitting regulations for clients. He soon represented some of Portland's leading developers, including John Gray and Robert Randall.
In 1982, Janik shocked his employers when he resigned to establish a new firm with Robert Ball, who remains his partner today, and Ken Novack, now president of Schnitzer Investment Corp. "I left because Stoel Rives had a compensation structure that didn't reward long hours and initiative," Janik says.
Janik is a tenacious advocate--aggressive enough to have threatened WW in writing with the possibility of a libel suit over this article even before publication. People who know him, however, say he is funny and generous, but what they mostly talk about is his laser-like focus and energy.
"When I first interviewed with Steve, I remember this little man with piercing blue eyes sitting behind this desk. He had a big office with three chairs lined up in front of his desk and no other furniture, nothing on the walls," says former Ball Janik partner Gary Cole. "The biggest concern that Steve's partners have had is that he works himself so hard--which is the opposite of the concern that many firms have about senior partners."
One Janik legend is that while he waited for Ball Janik to grow into an extra floor he had rented at One Main Place, he often rode his bicycle around and around the empty floor to burn off excess energy. Janik says the story is an exaggeration. "I may have wheeled the bike around the floor once, but I did not ride around the floor for exercise," he says.
Janik's firm literally grew with the Portland skyline. He helped put together deals for such landmarks as the U.S. Bank tower and the PacWest Building, as well as most of the Pearl District. Each transaction brought him into closer contact with the City of Portland and its land-use process.
When city bureaucrats denied Janik's clients, he got the opportunity to display his considerable skills in front of the City Council, which acts as an appeals court for bureau decisions. Janik usually prevailed.
"You went to Steve if you were going to have anything to do with the city," says real-estate investment banker Bob Scanlan, who once hired Janik to win approval for a residential development. Scanlan's opponents testified en masse against Scanlan in front of the council, but they didn't stand a chance. "Steve made the snowballs, and various council members threw them on my behest," Scanlan recalls.
Although the city did not hire Janik to do any legal work during the first 15 years of his career, his work on volunteer committees and regular appearances on behalf of clients helped him build strong relationships in City Hall. He was particularly close to fellow nicotine-fiend Mildred Schwab, a brainy, forceful city commissioner who served from 1972 to 1986.
Once, during a break from a council session, Schwab approached Janik, a no-no because commissioners weren't supposed to address opposing counsel except during hearings. But the commissioner had a new lawyer joke. She whispered it to Janik as they strolled out of council chambers amid raised eyebrows, Janik recalls, but onlookers got a real eyeful when Schwab pulled the lawyer into the ladies' room. "She really had to go," Janik says. "But she wanted me to hear the punch line."
The only way Janik could have increased his stature at City Hall would be by joining the city's team. He soon got the opportunity to do just that.
In the early '90s, Trail Blazers owner Paul Allen came to the conclusion that Memorial Coliseum was a typewriter in a computerized world. He began talking to the city about a project that would become the Rose Garden.
The city drafted Janik to negotiate with Allen's people. He delivered what is widely considered a model for public-private stadium projects. In contrast to Portland's currently proposed major-league baseball stadium, which calls for 82 percent public financing, the city contributed less than 15 percent of the Rose Garden's $262 million price tag. Janik did such a good job on the Rose Garden that King County, Wash., hired him to represent their interests in the development of the new Seattle Seahawks football stadium.
But just because Janik was doing work for the City didn't mean he would abandon the development community. Not long after the Rose Garden opened in 1995, longtime client Homer Williams employed Janik on a mega-deal, the 1997 River District agreement, which included about $80 million in public money.
Indeed, Janik's skills are in such high demand that it is hard to find a major development project in Portland in which he isn't involved. His clients include the Goodmans, Pete Mark, Williams, Legacy Health System, OHSU and the Portland Business Alliance. It doesn't hurt Janik's clout that many of his clients are generous political contributors.
In the most ambitious project currently on Portland's drawing board, OHSU's planned development of the North Macadam District, Janik represents OHSU. But all three of the principal parties involved--OHSU, Williams and the City of Portland (represented by the Portland Development Commission)--are Janik clients.
Janik acknowledges that when it comes to representing both the City of Portland and private interests who appear before the city, he has no peers. "There's no other lawyer who does it to the extent that I do," he says. Ed Sullivan, another top land-use lawyer, agrees. "Steve has a unique position at City Hall," Sullivan says.
Clients say that Janik's understanding of the city's regulatory apparatus and relationship with top officials are a big asset. "There's no question that his knowledge of the city is helpful," Williams says.
Last year, when developer Robert Ball (no relation to Janik's law partner) sought to restructure city government, he hired Janik. "I went to him because of his knowledge of how the city works and operates," Ball says. Ironically, Janik made a technical error in Ball's "Good Government" initiative, which the developer blames for killing the measure's momentum. "I've agonized daily since the mistake happened," Janik says.
The League of Women Voters' Lorenzen says Janik's dual role should make people uneasy. "The lines on which Janik is working get very blurred," she says. "I think the City Council forgets that he represents vested interests that are not those of the public."
Not all lawyers are comfortable bouncing between public- and private-sector clients. Mark Long, managing partner of the city's second largest law firm, Schwabe, Williamson & Wyatt, says that his firm does not seek legal work from the city because doing so might put Schwabe at odds with the interests of existing clients.
Schwabe represented the Ackerley Group in its long running battle with the city over billboard advertising rules, Long notes, and also represents property owners in condemnation proceedings. "We've generally chosen not to represent the city in order to avoid potential conflicts of interest," Long explains.
Perhaps the situation that raises the most questions about Janik's practice is his representation of the city in negotiations with PFE. While there is no evidence that Janik has given taxpayers anything less than his undivided loyalty, the fact that for 15 years his firm has represented Crown Pacific and Stott--PFE's largest equity holder--raises concerns.
City commissioners say that they were aware neither of the Crown connection nor of Ball Janik's representation of Stott's personal interests.
Janik says he is not Stott's principal attorney in the firm; however, he has twice personally represented Stott on matters unrelated to PFE since negotiations with PFE began. Documents also show that Ball Janik represented Stott on a land-use issue before city bureaucrats last year.
Whether Janik or his firm have violated any rules will be up to the Oregon State Bar to decide--if anybody files a complaint. The Bar's Code of Professional Responsibility includes rules that describe a lawyer's duties to clients and defines what constitutes a conflict of interest.
Based on discussions with two dozen lawyers, including legal ethics experts, the issue is whether Janik's representation of the city and his firm's relationship with Stott and Crown constitute a "likely," or potential, conflict.
That's not a simple determination. "Conflicts are a very difficult area," says Jeff Sapiro, manager of the OSBA's disciplinary staff. "Generally speaking, if something could impair your judgment, that's a conflict."
Most lawyers' first move when contacted by a potential client is to check a list of current and former clients to see if there might be a conflict. If a potential conflict exists, many lawyers simply will reject the work. If a lawyer wants to proceed, however, bar rules require that the lawyer notify both clients in writing of the potential conflict and seek waivers from each.
Janik says that when Stott became a limited partner in PFE, he and his colleague, Robert Ball, decided that no conflict existed. Janik explains that Stott was simply a passive investor in PFE, an entity that was never a Ball Janik client. Therefore, Janik says, he never wrote to the city attorney to request a waiver.
Rogers, the city attorney, takes a different view. He says Ball Janik's relationship with Stott presents "a potential conflict."
Not only does Rogers say he was unaware of Ball Janik's relationship with Stott, he did not even approve Janik's hiring, which would have been standard procedure. Normally, Rogers explains, when a city bureau needs legal assistance, his responsibility is to assign the case to a staff lawyer or select an outside firm. The only exception that Rogers, the city attorney since 1985, says that
he can recall is PFE. "It hasn't
happened in other cases that I'm aware of," Rogers says.
City Chief Administrative Officer Tim Grewe, who hired Janik, acknowledges that he did not seek permission. He says that Janik's work on the Rose Garden made him the natural choice to represent the city on PFE. Grewe says he cannot recall when he learned of the Janik-Stott connection but expresses no second thoughts. "I never once saw anything or heard anything that suggested that Steve was not looking out for the city's best interests," he says.
Lawyers are notoriously reluctant to discuss each other's work, and Janik's stature in the legal community further discouraged most of those whom WW interviewed from speaking on the record. On background, however, many expressed surprise that Janik did not disclose in writing to the city his connections to Stott.
For one thing, Stott's role in PFE has hardly been passive. He is PFE's largest equity holder; he held numerous strategy meetings at Crown Pacific's offices when PFE got into trouble, and he has personally met with the city officials at least three times in efforts to salvage his investment. Currently, he is leading efforts to restructure PFE into a new group called Metropolitan Sports.
As part of that restructuring, Stott and his partners are negotiating with Janik--in his capacity as the city's lawyer--about whether the city will forgive some of the $1.3 million that PFE now owes in unpaid rent and other charges for PGE Park. In addition, Janik is attempting to obtain personal guarantees from Stott and his partners for the limited partnership's debt.
Those lawyers who would speak for attribution were careful to note that they did not know all of the facts. But land-use lawyer Ed Sullivan was troubled by Janik's negotiating with PFE, given his firm's representation of Crown and Stott. "I'd be hesitant to take on that work." Sullivan says.
Richard Yugler, a former president of the Oregon Trial Lawyers Association and former chairman of the bar's disciplinary committee, says other lawyers might acted differently. "I would hope that a cautious attorney would make those disclosures in writing and have gotten a written waiver of conflict," Yugler says.
Now that PFE's original financial projections--which were negotiated in secret and showed that Stott and his partners would earn about 35 percent in annual pre-tax returns--have proven wildly inaccurate, it would be difficult to argue that Janik gave Stott and his partners a sweetheart deal.
But how can taxpayers be sure that Janik drove the hardest possible bargain with PFE in the original negotiations? And how do taxpayers know that Janik is pursuing the money that the limited partnership owes the city as aggressively as he can, with no thought that if he pushes Stott too hard, Ball Janik might suffer consequences?
Janik rejects the possibility that he has ever given taxpayers less than his undivided loyalty. "It's absolutely false to suggest that I didn't negotiate the best deal that I could for the city," he says.
As for the money that PFE now owes the city, Janik will only say, "We're still negotiating."
WORKIN' OVERTIME
Steve Janik is more entrepreneurial than most lawyers. Since the mid-'80s, he has been part-owner of EC Company, an electrical contractor located in Northwest Portland. Records show that EC has done $620,000 worth of work for the City of Portland since 1998.
In addition, EC, which employs 352 people, got a contract to do part of the $38.5 million renovation at PGE Park, which was completed in 2001. About 85 percent of the money came from the city.
The general contractor, Turner Construction, awarded most of the work in competitively bid contracts, but Portland Family Entertainment also doled out work--including a $262,000 contract for telecom and data services to EC. A PFE representative says EC won the contract in in competitive bidding.
Although there is a picture of an EC van in front of PGE Park on EC's website, Janik, who is an EC board member, says he only learned about the contract when WW began asking questions about it. "I was unaware of the fact that EC Company had such a contract until today," he wrote to WW on April 3, "and I obviously had no role in obtaining that contract."
Another of Janik's investments, a part ownership in the development known as The Capes in Tillamook County, earned him notoriety in 1998, when a sizable chunk of the property split from the mainland and threatened to slide into the Pacific.
Homeowners filed a multimillion-dollar lawsuit against Janik and his associates that same year. The suit was settled out of court.
--NJ
Since 1988, Crown Pacific has spent more than a billion dollars acquiring timberlands and mills. CEO Peter Stott owns 14.5 percent of the shares in Crown, which last year posted revenues of $484 million but is now threatened by a crushing debt load.
"It's always better for us when he's our lawyer as opposed to representing another client," says Mayor Vera Katz's chief of staff, Sam Adams, of Steve Janik. "If we could afford to hire him exclusively, we would."
In 1989, City Commissioner Dan Saltzman's father, Jack, filed a bar complaint against Janik, alleging a conflict of interest. The complaint was dismissed in 1991. Saltzman says he and Janik have never discussed it.
Since 1998, Ball Janik, with 36 Portland lawyers the 12th- largest law firm in the city, has billed Portland nearly $1.3 million. The biggest chunk of the work is lobbying on the city's behalf in Washington, D.C., which accounts for $696,000.
Other leading firms do far less work for the city. Since 1998, for instance, the city's two largest law firms, Stoel Rives and Schwabe, Williamson & Wyatt have billed $238,000 and $13,000 respectively.
In a 1999
op-ed titled "Portland Gets a Bargain in Civic Stadium Deal," City Chief Administrative Officer Tim Grewe said the public would make $26 million over the 20-year life of the PFE deal. Today, his office projects losses of $11 million.
WWeek 2015