The Oregonian — Editorials
Once more, Goldschmidt into the breach
Yet almost 14 years after leaving public office to follow the money, Neil Goldschmidt, amazingly, retains the kind of credibility that makes him the perfect frontman for the Texas-based investors who have tendered an offer to buy PGE from the scoundrels at Enron and the jackals guarding its corpse.
The former governor has a unique stature that overrides the negative trappings of your standard lobbyist. He is not a mythic figure in this state, but he is a memorable one, particularly in an era where the current governor openly disdains the heroic concept of leadership.
Goldschmidt still has a sterling reputation to put on the line, in other words, and he's still available for public service. He stepped up to save Portland's Park Blocks. He recently answered the call to head the State Board of Higher Education. Don't be surprised if Allen already has him working on the Bonzi debacle.
In the meantime, Goldschmidt is an ingenious choice as head cheerleader for Texas Pacific Group's $2.35 billion bid to buy PGE. He has the style and substance to convince skeptics that this proposal is a great deal for the city.
Better yet, Goldschmidt has the political connections to derail a serious threat to that deal -- the city's interest in condemning the Oregon-based utility. Mayor Vera Katz, one of the three votes for condemnation on the City Council, is unlikely to cross swords with Goldschmidt, a man she greatly admires.
Goldschmidt's role in this affair suggests the man has lost nothing in the way of instincts and timing. On Oct. 31, The Oregonian ran his opinion piece in which he reiterated his long-held opposition to PUDs in urging defeat of Measures 26-51 and 26-52.
The previous morning, Goldschmidt said, he sat down with a representative of Texas Pacific Group for the first time to discuss this deal, meeting with lead partner Kelvin Davis over breakfast at the Pan Pacific San Francisco.
Goldschmidt said Wednesday that he had long been of a mind to contact Enron CEO Stephen Cooper and express his outrage about its handling of PGE. "I was so irritated, so frustrated about what was happening," he said, but he held off because "any expression on that matter would have been seen as me meddling on behalf of my client (PacifiCorp)."
His instincts were, once again, superb. When the opportunity came to get involved, Goldschmidt found himself in a position to have considerably more influence and make a great deal of money.
City Commissioner Erik Sten thinks the Texas Pacific Group and its Northwest ambassadors -- Goldschmidt, Tom Walsh and Gerry Grinstein -- will eventually enjoy profits that were available to PGE ratepayers.
"Enron destabilized and devalued the company dramatically," Sten said, noting the fall in PGE's purchase price from $3.1 billion in 1997 to $2.4 billion. "Someone was going to get the benefit of Enron devaluing the company. Over the next five or six years, they'll stabilize the company, then sell it for $3 billion, making $600 million, a 100 percent return on their equity. The missed opportunity is for citizens to get that $600 million back in lower rates. Instead, the profit will go back to Texas."
Not all of it.
Goldschmidt said he was willing to step in because he "wasn't so sure the city could pull off" acquiring PGE through condemnation. Although the city offered creditors more than TPG, Goldschmidt said, "What's the certainty they can deliver?"
Does Goldschmidt think his reputation hangs in the balance on this deal?
"Sure," he said. "Any time you sign up with someone who isn't your immediate family, you're asking people to trust you. But this isn't as much about trust -- the PUC process will be quite transparent -- as it is about me working in an unfamiliar circumstance in which I can't promise any one particular outcome that people will like.
"But I'd rather be at the table. It's not different than any time I ran for office. The implied promise is I won't lie to anyone, and I'll do the best I can."
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