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Monday, December 5, 2005

What to do now about PGE

The latest revelations in the Portland General Electric tax scam are certainly... well, revealing. Now it turns out that PGE collected from ratepayers millions of dollars of Multnomah County taxes that weren't paid to the county -- indeed, they apparently weren't even passed on to PGE's parent company, Enron. According to Willamette Week and City Commissioner Randy Leonard, PGE just kept that money, along with some other types of "taxes" that it charged customers for as well.

A few suggestions here. First, since the city is said to have the power to set electricity rates within its borders, Leonard ought to have someone prepare an ordinance whereby ratepayers in the city get credit for all state and local taxes that the state PUC allows to be billed but unpaid. Pass it now, and see what happens.

Another avenue of attack: The county ought to pass an ordinance that says that PGE's (or its corporate parent's) county taxes are what it normally would owe the county (apparently, nothing, under current rules), or the amount of county taxes that it collects from its customers, whichever is greater. If PGE collects, it has to pay. There's another one you could pass next week.

Finally, the city ought to be readying another PUD campaign, along the lines that I've suggested here previously. I've never been a fan of the many PUD measures put up by the usual hippie suspects, but if it were done right, I could vote for public power. On this one, unlike so many issues in Portland, I'll take socialism over corruption.

Of course, all these moves would also impact Pacific Power, which is about to be taken over by Warren Buffett. They haven't been such bad apples, but it appears they're in a barrel with a wormy one.

Be prepared, of course, to see PGE (and maybe even Pacific Power) move its headquarters out of downtown. PGE's probably already planning to do that. Perhaps they could locate out by the new Trib offices, or take up the space in Hillsboro that OHSU threatened to run to if we didn't build it an aerial tram [rim shot]. Heck, Dave Lister may even have a spot for PGE near his new place out by Mattress World.

Comments (38)

Speaking of tax freeloaders, how about we figure out some way to tax those million dollar Pearl District condos that only pay $147/year?

How about a basic services tax that allows a 100% credit for property tax actually paid?


Myabe we should do a poll and ask the public to vote on their top choice out of say, five potential new PGE locations. Make sure to include "the doghouse".

And on another note, I can't believe that you of all people could assume that a City-run PUD would be corruption free. Well, actually that's a bit extreme - but for me - I'd prefer to limit the city to just running the CITY, and see if we can get that dialed before we hand them our electricity as well.

As I said, I'd be for it if it's done right. That's a big "if."

Under what sort of view is electricity and the associated infrastructure not a part of "the City"?

Under what sort of view is natural gas and the associated infrastructure not a part of "the City"?

Under what sort of view are condos and the associated tax subsidies not a part of "the City"?

Under what sort of view is Walmart and the associated products, employees and customers not a part of "the City"?

Under what sort of view is Trammel Crow and tax abatements not a part of "the City"?

Under what sort of view is crime and the lack of jail space not a part of "the City"?

Under what sort of view is commerce choking congestion the associated costs not a part of "the City"?

Under what sort of view is 20 years of planning and the associated lack of infrastructure not a part of "the City"?

How about one more attack: defeat PGE's cynical attempt to retain undue influence over our elections by defeating (or better yet, not letting on the ballot) the repeal of Voter Owned Elections?

How about one more attack: defeat PGE's cynical attempt to retain undue influence over our elections by defeating (or better yet, not letting on the ballot) the repeal of Voter Owned Elections?

Sorry, comrade. I wouldn't go that far.

Do any PearlCondoItes pay property taxes?

The vast majority of condo owners in newly constructed buildings pay full property taxes. At the Street Car Lofts, NW 12th @ Lovejoy, about 125 of 135 units pay full property taxes. I own one of them. Last month I paid $2,282 in property taxes for a 610 square feet condo. The building owners pay over $500,000 per year in property taxes.

If you see a pile driver followed by a tower crane, the new condominium building will be on the tax rolls.

If you see a rehab of an existing historic structure, into condominiums, you will often see 10 years of tax abatement.

Facts spoil the Broad Brush of Fiction

Steve Schopp,
You overlooked (among other things) police, fire, water, sewer, sidewalks, parks and streets!


Bummer. Sounds like you picked the wrong condo.

The father of a close friend of mine bought a nice new condo in the Henry building last year for just North of $800k. His property taxes were about $200/yr and will be for the next 9 years.

Prior to buying the condo, he sold his house up by OHSU; he was paying more than $10,000 per year in property taxes on it.

Chris Smith advises,
""""(or better yet, not letting on the ballot)""""

You're an authority on that. No voting.

We can't have the public voting.

Not on the Tram. $50 million.
Not on light rail. $ Billions
Not on the transit mall. $150 million
Not on the CC Hotel. $140 million
Not on the Burnside-Couch realignment.$50 million
Or anything else 'you' want.

Your transportation planning cabal sure is busy
spinning the cost of the congestion you cause.

All we need is more of the same rail and bike nonsense right?
And you're all for the Tram.


You overlooked (among other things) schools.

Steve overlooked streets??? Who needs streets? Why we've got a world-class mass transit system that just sparkles with efficiency.

Not to mention bike lanes where nobody wants to bike, no bike lanes where (seemingly) everybody wants to bike and bicyclists who don't give a s**t about anyone else on the road (see NW Skyline, among others).

What about trying to do one (or a few) thing(s) right instead of screwing around with fifty and doing none of them well.

Of course if, under your "view", growing city government and spending ever-increasing amounts of money are legitimate functions, these things the "City" does extremely well.

On KXL's Crossfire with Larry George and Randy Leonard.

When caller radio host Lars Larson asked City Commissioner Randy Leonard, on the air, if he would attend the cross raising in Pioneer Courthouse Square, Leonard replied with,

"If you'll be driving a cross through the chest of George Bush I'll be there."

This sound bite should be replayed for people to hear and know the hatred Leonard and others harbor.

Wow, Paul M., that sure did help my understanding of this debate over PGE!


Pardon me for correcting an inaccuracy, but the public DID get to vote on light rail. We turned it down twice.

While we're on the subject of Commissioner Leonard, is anyone else concerned about an elected official who publically accuses a business of criminal behavior (from the Oregonian: "It could be a criminal conspiracy; it could be a criminal act"), not merely negligence or other bad acts, but a crime, prior to any such finding by a court, grand jury or anyone else involved in the criminal justice system?

I think all the "crime" talk is overheated, but certainly it's appropriate for a public official to ask for an investigation. Getting someone from the dynamic trio of Mike Schrunk, Hardy Myers and Karin Immergut to actually do something about anything is quite the challenge, however.

Fireman Randy ought to get to work on a rate ordinance instead. That will hit them harder than all his quotes from "Law and Order."

Please look at PortlandMaps.com to find out what a typical Henry condo owner actually pays in property taxes. Unit 1413 by example was assessed $256.62 in property taxes in 2004, similar to your acquaintance. However in 2005 this unit was assessed $17,079.48 in property taxes.

The url for this unit is: http://www.portlandmaps.com/detail.cfm?action=assessor&propertyid=R552589

Just the Facts Madam


Speaking of fast ones pulled off by Big Business and Governments, what about Multnomah County making me pay taxes to BUILD AND OPERATE the Wapato Jail but then using the operations money for every else but operating it....

Guisto made a half hearted attempt to expose this little scam but the Oregonian never bit... only saw a brief story on it on Channel 12 about a week ago.

I want my taxes back!

FreeJack, Love your last statement "Facts Spoil the Broad Brush of Fiction" I think this applies to the latest "scandal" with PGE.

Does anybody think so many millions could really be diverted to profits of a business so scrutinized over the past years? And one that just weathered a presumably competent due dilligence process by the City?

This story sounds to me like a practice exercised by the Bush administration - find any data that supports your agenda. Pubic power/private power - they both can work well for consumers. If you have a position either way, develop a good arguement people with an opposing position can respect.

Bravo to our hero reporters who uncover the dirty and incompetent work of business and politics alike. But shame to those who publish garbage to achieve an agenda or sell newsprint.

Dig further. We will find that a few facts ineptly (I might even say, maliciously) reported by the media do not support a truth.

Jay wrote,
""""Steve, Pardon me for correcting an inaccuracy, but the public DID get to vote on light rail. We turned it down twice.""""""""

Right you are, but that was ancient history when we were allowed to vote. Since then the PDC,Metro,TriMet and Port figured out how to avoid votes and build light rail against the public.

Much ado about nothing. PGE delivers electricity at a reasonable rate. And they do it reliably, 24 hours a day, 7 days a week, 365 days a year, rain, snow, ice, wind, etc., etc. Compare what PGE delievers to anything the City of Portland delievers --the city that works-- and you'll be crying a river. Oh yeah, scour through PGE's books and find some errors. Big deal. Why not go through your own checkbooks and you'll find errors here and there too. But if truly want to find some genuinely egreguious misuse of public monies of far greater proportions than anything at PGE, go through SAIF's books, or go through OHSU's books, or, while we are talking about them, through the City of Portland's books. Governmental financial fraud and waste dwarfs anything PGE may do.

Well, let's just pass some ordinances saying that when they make an "error," it has to be corrected in favor of the people who covered their overdraft.

It would be rather interesting to perform a 10-15 year historic study on the ability of a utility like NWN, PGE or PPL that supplies essential services to the region, and the ability of the city or local government to manage the same costs.

I'm no financial genius but in the words of Randy Leonard, "It's not THAT complicated. I've been paying PGE bills and local taxes since 1976. Over the long haul, I remain more impressed with the ability of the people at the electric company to manage costs than the people that have been running my government. But Randy, I appreciate any effort to make all my service providers more accountable, but please don't pretend that our tax laws are not screwed up and complicated and don't lose perspective. If PGE made some honest or dishonest mistakes they will surely be required to make it good. And another note to Randy if he reads this blog: I voted for you to make the CITY more accountable - not the local utilities.

Dear Commissioner Leonard: I see "criminal" behavior in $20 million worth of Water/Sewer software that got tossed in the trash bin. Did anybody at the City lose their job? Did anybody get demoted for picking an inept vendor or failing to implement the program? How did so many other cities manage to successfully implement software from the same vendor? What makes Portland different?

What about a $60 million jail that got built, but was never opened. Did a single bureaucrat or elected official suffer a layoff or demotion?

How can we spend $2 million to 'consider' a PGE takeover when Beirut, Lebanon has better arterials than Naito Parkway or the majority of Portland's ("sand & gravel") neighborhoods?

If your car is stolen, they'll take that report over the phone. If you're house is ripped off, well, you might want to start cruising the local pawn shops. But let Portland P.D. cooperate with the JTTF and the FBI: HELL NO! Because they won't agree to grant the Mayor and the City Auditor "Top Secret" security clearances. Sheeesh.

Our infrastructure is literally crumbling beneath our feet, but the City of Portland has an extra $2 million/year for "Clean Elections" (as opposed to the formerly "Dirty Elections" that ushered in current leadership)? That's criminal.

In my considered opinion, our city and county leaders have sh*t in their proverbial mess kits. Both the previously ambivalent and the steadfastly liberal are beginning to notice the foul odor in the air. Business as usual is not going meet with the same success it has in the past. Ask Neil or Mo Cheeks: smile and wave doesn't work like it used to...winning their hearts and minds might get you reelected, but it won't address our most urgent challenges. Political courage means doing the right thing, even if it alienates your core constituency.

If you're not pissed off, you're not paying attention.

The issue is not poor PGE management or complicated tax laws regarding PGE.

The issue is PGE's cynical manipulation of PUC rules, state law and the tax code.

In fact, PGE spends a lot of money creating political and community support that will say white is black, and day is night, just as some of the comments above me here seem to be arguing.

People can call PGE's $1 billion "overcharge" an honest mistake if they like, but that isn't going to cut it. Neither are “red herrings”.

We now know that at virtually the same time Enron traders were involved in fraudulently trading energy out of PGE offices in downtown Portland, PGE Execs were attributing an inflated amount of those profits to be subject to the Mult County Business Tax they were collecting from ratepayers and then keeping the money and not paying the tax.

In a meeting I had with top PGE execs this past Friday, they conceded that they were going to pay at least some of that money back….unilaterally.

Hmmm. Because they are altruistic members of our community who want to do the right thing? Or because of the pressure brought on by a law suit on this subject by local attorney Dan Meek and new, intense pressure now being applied by the city on this specific series of transactions?

I will let Jack’s readers answer that one.

Time will tell how this plays out. But I would not be too hasty in making excuses for and/or sticking up for the PGE Execs just yet. Believe me, they know what they are doing.

Although we are in un-chartered waters in terms of a city using it’s statutory rate making authority, the city is being very deliberate in putting together a case that will culminate in a rate making hearing some time next year.

This process will be fair. However, it will also be very thorough.

This is far from over.

The Fireman's silence is deafening. Not one word in response to the previous skeptical entries, six of them by my count. All Republican Moles, no doubt.

The City of Portland is hot on the trail of Waste, Fraud, and Abuse at PGE. Never mind that the Public Utility Commission has jurisdiction over this matter. Never mind the appearance of "sour grapes" after the City's failed attempt to acquire PGE. Never mind boys and girls, because Fireman Randy is looking to harpoon his first whale.

As for the pursuit of Waste, Fraud, and Abuse inside City and County Government? Nada. On the disconnect between citizen's expectations and the City's ability to meet them: zilch. Hoping for a rebuttal on the Council's inability to prioritize public safety ahead of political correctness. Nope: not gonna do it. Wouldn' be prudent. Nothing but pain and self doubt down that rutted road. The Fireman has been there, and he's done that. Nothing but red herrings swimming in those seas, and he's looking for that Devil Whale.

The Fireman's zeal for accountability can only be unleashed on his political enemies, and PGE is at the top of the list. The Condo Class and public employee unions have nothing to worry about. Thar she blows!

Let's see, an anonymous ad hominem attack at 3:30 in the morning. Why am I not paying attention?

Jack? You don't like my contribution? So sad. Why not follow the BlueOregon example and simply delete the comments you find offensive. Or you could ban the IP's of those who frequently disagree with your perspective. We'll call it modified free speech, or free speech for dummies, or Happy Thoughts with Jack Bog.

Ad Hominem: marked by an attack on an opponent's character rather than by an answer to the contentions made.

I am not attacking Randy's character. He is a politician: he exists to get re-elected. That requires little or no character.

My 3:30 a.m. observation list several examples of Waste, Fraud, and Abuse within the jurisdiction of the City Council. I'm not saying they are all Randy's fault; rather, I believe there frequency and magnitude should diminish the time and energy they expend on investigating Waste, Fraud, and Abuse outside their jurisdiction. Get your own house in order, so to speak.

If the City Council is going to solve regional or State of Oregon problems, why don't they persuade their own employees unions to embrace real PERS reform? Maybe they could outsource some road repair projects where the private sector can complete the task better/faster/cheaper. I see Randy as a gutsy political force that is willing to think outside the box. I simply think he has no business outside PGE's box. When elected officials threaten to foreclose on any property owner or business, but are ultimately deterred by the owner/business, there are bound to be some hard feelings. That's human nature, not an ad-hominem attack. If they weren't going after tax-fraud allegations, I have no doubt the City would have found some other alleged failing to soothe the pain of acquisition failure.

For what it's worth, Commissioner Leonard's response doesn't make me any less concerned about his use of words like "criminal" and "conspiracy" against a business that's been part of the Portland community for a long, long time. He has every right (and in fact the obligation) to insist that the law is enforced fairly and correctly. As a high-ranking official in city government, however, he should not be accusing people of criminal behavior unless it's been proven that that has occurred (which, I have to admit, I strongly doubt). The city can spend millions on trying to attract businesses to the area, but thoughtless remarks (or, if they're not thoughtless remarks, then from a civil liberties perspective, they really are frightening remarks)like Commissioner Leonard's will do just as much to tell businesses that the City of Portland is not a good place to open up shop. How about a new slogan for the city: "Portland: If the city authorities disagree with you, they'll accuse you of being "criminals" here."

Bob Wiggins

Bob Wiggins,
I think you have it backwards. Criminal justice starts with accusations and proceeds from there to proof. It's not the other way round. You shoud know better!
Allan L.

And I should proofread.

For Bob W.:

Imagine that I sent Jack here a fake bill through the mail every month claiming to collect an Oxygen Tax, and he paid me hundreds of dollars over the course of a few years. Later he discovers that he received nothing in return for his payment (because there is no city Oxygen Bureau), or that the bill was completely bogus to start with (because oxygen is freely available).

Would Jack be wrong to suspect criminal activity? Would Jack be wrong to write here that he could have been the victim of a criminal act? Would Jack be wrong to report my behavior to the Postmaster General as possible criminal activity propagated through the U.S. Mail? Indeed, would the Postmaster General be wrong to think he had probable cause to investigate and prosecute my behavior as a federal felony? (Especially once he discovered that I sent similar bills to thousands of other people!)

No. That would be... I dunno, let's call it truthful. It is suspicious, and it does seem like there could be criminal activity at work.

So no, I'm not real concerned over Mr. Leonard (or any other elected official) saying that there "could be a criminal act" under the current similar circumstances. It might be a premeditated swindle or it might be a negligent swindle, but surely there oughtta be a law against such behavior.

(Of course, if I pulled such a scam I'd be going to court and sent to federal-pound-you-in-the-%#@ prison... but a big corporation would probably just pay a fine while admitting no wrongdoing.)

Hi Allen and Alan,

It's one thing for Jack or some other blogger to accuse people of being "criminals". Commissioner Leonard isn't just some goofball (no offense Jack) ranting on a blog. He's a high-ranking city official. When he says someone is a "criminal", it presumably carries some weight. You may or may not remember when Richard Nixon said he thought Charles Manson was guilty; he got a lot of well-deserved grief for it (even though Manson was of course guilty). We have courts to determine these things, not Commissioner Leonard, or Richard Nixon or Maxine Waters or Joe McCarthy. And the place to determine these things is in court, not the Oregonian. If Commissioner Leonard believes PGE committed a criminal offense, he should refer it to the DA or the AG and let justice take its course. He serves in a legislative (and to an extent administrative) role, but he's not part of the justice syatem. It's become way to easy for politicos to call citizens criminals in the papers, screw up their reputations, and drive on to the next assassination. If PGE or its employees is ultimately determined to have committed a criminal act on this issue (which I very strongly doubt), I'll swallow my words. If they aren't, I'm wondering about what kind of apology they'll get from Commissioner Leonard.

There, that's my opinion on the subject. It's worth every penny you paid for it.


Point taken, Bob. But according to your quote, Mr. Leonard did not make a statement saying that a crime was committed, but said that a crime may have been committed. There's a vast difference between the two.

Had he said something definite, such as "those guys are crooks", I'd be right there with ya. That's not the sort of thing anyone should say seriously before a jury speaks. But he said something speculative. You're focusing on his use of the word "criminal", but he used the word in a frankly speculative way. Elected official or not, it's reasonable to make speculative or conditional statements about appearances before all the facts are in.

In fact, I'd say it's far better to be frank about speculation than to be silent about such a thing or to indulge in false certainty. Something like "Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction." can cause no end of trouble. Mr. Cheney would have been wiser to be upfront about his speculation, as Mr. Leonard was.

Is there a remote chance of lawyer penance here?

The Florida law firm noted here had previously been hired to force/guide the city purchase of PGE, not withstanding clear legal obstacles.

The OIC, on behalf of PERS, was trying to get PGE to resell it to a "strategic" buyer. Strategic could surely include the option of gaming the taxes. Sure, the OIC may have been a partial beneficiary but they would have shared the take with other state treasurers and their pension trust funds, via TPG. The point here is that the tax anomaly must surely have been known to certain instrumental folks beyond a reasonable doubt.

The unremitted taxes, like magic, is close to the savings the city had hoped to obtain through a purchase.

It looks like a lawyer or two flipped sides, even if under compulsion. No harm no foul? Is that the standard? For lawyers.

How about the misappropriation of tax money that was intended to fund the city's operation, but has been diverted to fund local politicians yard signs and attack ads? That strikes me as criminal. Maybe the next time you dial 911, you'll be put on hold for 6 or 7 minutes: that seems criminal to me.

For $3.4 million per election cycle, I would imagine that a few "Downtown Clean and Safe" officers could work past 11:00 p.m. (recognizing the street urchins are just getting warmed up about then).

Hey, I've got an idea: how about we spend any "windfall" taxes from PGE on public safety, instead of public transit? That would be cool.

Maybe this is why PGE's rates are too high? Maybe those pesky salmon are ENRON moles...

Fish programs add to BPA power bills

Wildlife programs, mostly salmon recovery, account for about a third of the cost of wholesale electricity from Bonneville Power Administration dams and tack on about $10 a month to a monthly household bill, the BPA says.

The agency says the government spends more to offset the harm dams do to salmon than it does on running the dams.But fish or no fish, BPA power is cheaper than most electricity.

source: www.kgw.com/business/stories/kgw_121205_news_power_bill.17c50fa.html

09:23 AM PST on Monday, December 12, 2005
Associated Press

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