Author Archives: whmacken2013

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After COVID-19, whither Washington Square mall? Pier 1 latest to liquidate.

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When J.C. Penney filed for bankruptcy on May 15, 2020, did it put another nail in Washington Square’s coffin or signal a major transformation of the mall?

‘The Washington Square mall was a wondrous thing when it opened. The enclosed site, designed to entice shoppers with large anchors supplemented by smaller scale stores, attracted customers from as far away as Seattle.

The original mall encompassed 1,093,500 leasable square feet and was the largest enclosed shopping center in Oregon. It has a long history of change and renewal.

A 160,000 sq. ft. Meier & Frank store was the first to open for business on August 16, 1973. A 211,900 sq. ft. Sears store came next in October of that year, followed by a 120,000 sq. ft. Lipman’s in November. In May 1974, Nordstrom made its debut with a 108,000 sq. ft. store, followed by an 89,300 sq. ft. Liberty House store in August 1974 and a 210,000 sq. ft. J.C. Penney store in August 1975.

Turnover among the larger stores began within a few years.

  • In 1978, Frederick & Nelson took over the Liberty House store.
  • In 1979, Frederick & Nelson acquired the Lipman’s chain and moved the former Lipman’s space; Mervyn’s then took over the former F&N space.
  • In 2008, Mervyn’s declared bankruptcy and closed all its stores, including the one at Washington Square.
  • In 1991, Frederick & Nelson declared bankruptcy and closed its Washington Square store.
  • In 2005, Mervyn’s closed.
  • In 2008, Dick’s Sporting Goods took over the former Mervyn’s space.

The mall weathered all of these changes and its current owner, Macerich, a real estate investment trust, has been rewarded with average sales per square foot of $1261. But much greater challenges have now emerged, particularly with the mall’s anchor stores, but with some smaller retailers as well.

The Wall Street Journal predicted last week that about 100,000 stores are expected to close over the next five years—more than triple the number that shut during the previous recession. Partly to blame is the jump in e-commerce to 25% of U.S. retail sales from 15% last year, UBS estimates.

“The turbocharged shift to e-commerce is expected to further depress profit margins and accelerate a shakeout in a country that already had too much bricks-and-mortar space for an increasingly digital world,” The Journal said.

It is also looking increasingly less likely that the economic recovery from COVID-19. In a May 17 interview on the CBS show 60 Minutes Federal Reserve Chairman Jerome Powell warned that the economic recovery could take over a year . “We’ll get through this. It may take a while,” Powell said. ” It may take a period of time. It could stretch through the end of next year.”

In the Portland Metro Area, no anchor stores at malls are really safe. On May 6, Nordstrom said it planned to permanently shut 16 of its 116 full-line stores as part of its adjustment to the retail environment during the coronavirus outbreak. The following day, it said it would not reopen its Clackamas Town Center location in Happy Valley, OR after the COVID-19 shutdown ends and that the store will be permanently closed by August, 2020. Nordstrom closed two other Oregon-area stores in 2015 and one in 2018.   Nordstrom stock over the past 12 months is down from $37.46 to $16.41, a 66% decline.

Against this backdrop, consider the situation with many of Washington Square’s stores as the mall remains closed during the COVID-19 turmoil:

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 The mall’s current troubles began with the bankruptcy of Sears in 2018 and the closure of its 211,900 sq. ft. Washington Square anchor store in 2019.

 

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On May 18, 2020, Pier 1 Imports, which was founded in 1962, said it is permanently closing all its 540 retail stores, including one at Washington Square. The stores will reopen after the COVID-19 shutdowns and then proceed to liquidate their merchandise.

The company filed for chapter 11 protection earlier this year on Feb. 17 in the U.S. Bankruptcy Court in Richmond, Va. and had hopes of a sale to an interested buyer, but none emerged. “It is now clear that Pier 1’s future does not involve any brick-and-mortar retail locations,” the company said.

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Chinos Holdings, J. Crew’s parent company, which also owns Madewell, filed for Chapter 11 bankruptcy protection  in federal bankruptcy court for the Eastern District of Virginia on May 3, 2020.  J. Crew has lost money for six straight years. Like many of its peers, it took it on the chin with the increase in e-commerce. But J. Crew also struggled to deal with $1.7 billion in debt resulting from a leveraged buyout by two private equity firms ( TPG Capital and Leonard Green & Partners) in 2011.

“Like many other retailers, J. Crew and Neiman (Marcus) over the past decade paid hundreds of millions of dollars in interest and fees to their new owners, when they needed to spend money to adapt to a shifting retail environment,” the New York Times reported on May 14, 2020. “And when the pandemic wiped out much of their sales, neither had anywhere to go for relief except court.”

 

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After a long decline,  J.C. Penney filed for bankruptcy on May 15, 2020. The company, which hasn’t booked an annual profit in nine years. said it plans to close an undisclosed number of its roughly 850 department stores and put itself up for sale. The company’s annual net sales contracted 8.1% to $10.7 billion in 2019, following a 7.1% decline in 2018, 0.1% in 2017 and 0.4% in 2016. J.C. Penney’s stock hit a high off $82.23 on March 29, 2007. It started 2020 at $1.12 a share and has been trading below $1 per share for most of this year. It closed on May 15, 2020 at 24 cents a share.

“I don’t think there is a place for J.C. Penney anymore,” Robin Lewis, founder and CEO of The Robin Report, which reports on the retail industries. said to CNBC on May 16, 2020. “Even if we didn’t have this virus … we have been over-stored for half a century in this country.”

In the same vein, an April 2020 report from Green Street Advisors, a real estate research firm, said more than 50% of the department stores anchoring America’s malls are going to close permanently by the end of 2021. “Many malls will now be faced with multiple anchor vacancies, a tough place to come back from, especially in an environment where demand for space is virtually non-existent,” said said Vince Tibone, a Green Street analyst.

The April report was prescient when it said JCPenney in particular was on the edge of a bankruptcy that would probably result in its liquidation.

On May 18, the company said it expects to close about 242 stores — 30 percent of its locations — as part of a restructuring plan.

 

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“With little or no revenues coming in for these non-essential retailers – traditional department stores, fashion, and luxury retailers being the most profoundly affected – many of the most prominent mall-based retailers, which have been struggling for years from falling sales and weighted down by too much debt, are teetering on the brink,” the Robin Report said in April 2020. Macy’s Inc. lost its investment-grade rating from Standard & Poor’s and saw its debt rated junk in February 2020.

The company is now seeking loans to bolster its cash flow, which has significantly decreased as a result of the shutdown, according to a May 7, 2020 regulatory filing. It is also looking to sublease almost half of its Long Island City headquarters in order to retain more of its cash.

Over the past 52 weeks, Macy’s stock has dropped from a high of $23.40 to $5.31 on Friday, May 15, 2020.

 

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Gap Inc. is the parent company of Gap, Athleta, Banana Republic, Old Navy, Janie and Jack, and Intermix.

Sonia Syngal, CEO of Gap Inc. said in mid-March that the company would likely reopen fewer stores for the flagship Gap brand after the COVID-19 closures are lifted. “We’ll be using this as an opportunity to refashion the company for what we want it to look like over the next 50 years,” Ms. Syngal told the Wall Street Journal in early May 2020.

Market watchers are more cautious, having watched Gap’s stock decline from $17.28 at the beginning of the year to $7.60 on Friday, May 15, 2020, a 56% drop.

“The apparel industry is rattled, and Gap is no exception,” Forbes reported on May 7, 2020. ” A COVID recession will impact the company’s revenues, cash flows, and ability to pay dividends. We estimate that a recession that persists through late Q3/early Q4 2020 can reduce the company’s revenues by 40% from $16.4 billion in 2019 to $10 billion in 2020.”

On April 23, 2020, Gap Inc. warned in a filing with the U.S. Securities and Exchange Commission it may not survive the next 12 months intact. The company said it had suspended rent payments for shuttered stores, which approximated $115 million per month in North America, and was in talks with landlords to defer payments, change lease agreements, or in some cases, terminate the leases and permanently close some stores.

“We will need to take additional actions to both preserve existing liquidity and seek additional sources of liquidity, beyond our currently available cash and credit facilities within the next 12 months as existing cash and cash expected to be generated from operations may not be sufficient to fund our operations,” the SEC filing said.

 

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Abercrombie & Fitch derives the bulk of its revenues from the US, which has been hit hard by COVID-19. The outbreak of the virus has led to a steep fall in demand, which the company’s Q1 2020 results on June 4, 2020 will likely confirm with major drops in revenues across all segments.

“Already struggling with sluggish sales and low gross margin, the company will face significant challenges from store closures,” The Motley Fool, a financial and investing advice company, said in mid-March.

Abercrombie & Fitch, showing it is not immune to the impacts COVID-19 is having on other retailers, has said it’s open to leaving any shopping center while it reassesses its store base. “We’re willing to walk away from any mall at this point. It’s about getting the right store in the right location at the right size,” CFO Scott Lipesky said in March.

Its stock is down from $17.48 at the start of the year to $11.14 at the close on Friday, May 15, 2020.

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L Brands, parent of  Victoria’s Secret, Pink and Bath & Body Works, might not survive the pandemic after Sycamore Partners, which agreed to buy a 55% stake in Victoria’s Secret in February, tried to cancel the $525 million deal and agreed earlier this month to scrap it. Shares of L Brands have fallen 53% in the past 12 months.

On May 14, 2020, Leslie Wexner, a retailing legend, officially retired after 56 years as head of the company. The New York Post reported that his departure came at a time when his reputation “…has been tainted by sagging sales at Victoria’s Secret; complaints of a culture of misogyny, bullying and sexual harassment at the lingerie peddler; and new revelations about Wexner’s business dealings with convicted pedophile Jeffrey Epstein.”

On May 20, L Brands,, posted a first-quarter net loss of nearly $300 million and reported that net sales fell 37 percent in the quarter to $1.65 billion. Sales at Victoria’s Secret fell by almost 50% half and Bath & Body Works declined 18%.

Victoria’s Secret, which has long positioned itself as a purveyor of elegant and sexy lingerie styles,  has been struggling with changing tastes, declining revenues and a stale image.

 

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Lolli & Pops candy company filed for bankruptcy in August 2019.  Online sales ceased in February 2019 and the company ceased paying rent to some landlords in April 2019. The company blamed vanishing visitors at shopping malls for its financial troubles. In March 2020, the company was purchased for $2.4 million by an affiliate of TerraMar Capital LLC, which said it planned to diversify the company into e-commerce and wholesale. It is unclear whether TerraMar is succeeding in reviving the company.

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1-800-flowers.com, the parent company of Harry & David, which has operated seasonal stores at Washington Square, said in April 2020 it would permanently close most of the brand’s bricks-and-mortar locations in the U.S. and focus on an e-commerce future.

Harry & David filed for bankruptcy protection in 2011, crippled by debt piled upon it by private equity owners. The company emerged from six months in Chapter 11 bankruptcy protection in September 2011 after the court approved its reorganization plan. 1-800-flowers.com acquired Harry & David Holdings for $142.5 million in cash. The sale closed in September 2014.

 

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Standard & Poor’s ratings say Ascena Retail Group (ASNA), the parent of Ann Taylor, could default in coming months or years. It is expected to face significant challenges as remote work becomes more prevalent in the coronavirus era and the way women dress, particularly professionals, is changing dramatically.

Ascena operates stores under the Premium Fashion segment (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion segment (Lane Bryant, Catherines and Cacique) and for tween girls under the Kids Fashion segment (Justice).

“Ascena…has had five consecutive years of losses as it has struggled to offer the right clothing selection, relied heavily on discounting and maintained stores in less-than-ideal locations,” Bloomberg reported in Oct. 2019.

Ascena recently repurchased some of its debt at below-par prices, which S&P Ratings deemed a “selective default.” Even after the company relieved some of its debt burden with that step, S&P assigned Ascena a credit rating of CCC-, the lowest before default. That was based on the analysts’ expectation of “conventional default or a broad-based restructuring of Ascena’s capital structure in the next six months.” Ascena’s stock is down 83% year to date. 

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Houston-based Tailored Brands Inc., the parent company of Jos. A. Bank (and Men’s Wearhouse), has been showing sales decreases and rapidly shrinking profits. In Its fourth quarter earnings, Tailored Brands saw net sales drop 3% to $691 million while Jos. A. Bank sales dropped 5% to $204.7 million.

For the full fiscal year 2019, on a GAAP basis Tailored Brands reported a loss of $35.0 million compared to operating income of $13.3 million in Fiscal Year 2018.  Mary Beth Blake also resigned as president of Jos. A. Bank in December as part of a reorganization.

Men’s Wearhouse’s acquired  JoS. A. Bank in March 2014 for $1.8 billion. With both retailers now suffering sales declines, Tailored Brands would probably prefer to have that $1.8 billion now.

“(Tailored Brands)…is trying to change course a bit by offering things like jeans and more business-casual attire,” The Motley Fool wrote in Dec. 2019. “But this segment is pretty well saturated by a plethora of brands, so it’ll be tough. Tailored Brands is far from a top stock and faces multiple challenges that all need to be addressed now. Based on its balance sheet, the time to fix those problems is getting shorter and shorter.”

The company’s stock is down more than 70% so far this year.

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Washington Square closed on March 18, 2020 because of the Covid-19 crisis. A reopening date is still not settled. When it does reopen, with so many of its retail tenants at risk, the continuation of the mall as we know it is doubtful. Will Washington Square be able to evolve to suit changing economics and tastes?

Will it be more like this:

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Or this:

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The CARES Act will cost Oregon, too: what one hand giveth, the other taketh away

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When President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law on March 27, 2020, the assumption was that the largest-ever economic stimulus package in U.S. history would be a cornucopia of goodies.

But buried within the law are provisions that are likely to actually reduce revenue in Oregon by millions. As the saying goes, what one hand giveth, the other taketh away.

The CARES Act includes several provisions expected to affect state revenue. The largest:

  • Allow the deduction of “excess” losses by non-corporate businesses that would otherwise exceed a threshold established in the Tax Cuts and Jobs Act of 2017;
  • Allow net operating losses for individuals, estates, and trusts to be carried back for up to five years, and delimiting the amount by which these losses may be used to reduce taxable income;
  • Increase the percentage of business interest income that is tax deductible; and
  • Suspend required minimum distributions from retirement funds, allowing some retirees to let their fund balances recover before making distributions and incurring tax liability.

The CARES Act is expected to reduce federal taxable income for tax years 2018 through 2020, thereby reducing Oregon taxable income in each of those years. Taxpayers will be able to amend 2018 and 2019 tax returns in order to benefit from the additional deductions, which will reduce state income tax revenue when the amended returns are processed and a portion of taxes are refunded to taxpayers.

The CARES Act didn’t include financial relief for states struggling through the COVID-19 downturn. Nor did the $484 billion coronavirus relief package Trump signed on April 24.

House Democrats are pushing for another bill that would beef up state and local government finances and help offset some of the losses noted above, but Senate Majority Leader Mitch McConnell and President Trump are resisting. Both said earlier this week that there isn’t yet a need for Congress to pass additional legislation.

 

 

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Hitting the COVID-19 Jackpot

Individuals and small businesses all over America have been hit hard by the COVID-19 epidemic. Some have been fortunate enough to receive financial support from people sympathetic to their plight.

Shelley Luther hit the jackpot.

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Salon owner Shelley Luther after she was released from jail in Dallas, May 7, 2020.

The Dallas, TX owner of Salon à la Mode was arrested for opening her business despite COVID-19 restrictions. A GoFundMe page to help her went live on April 23, 2020, the day before her arrest.

“Shelley Luther is an American Hero that has decided to resist tyranny by opening her business against an unlawful State Executive Order,” read the description for the Shelly Luther Fund campaign.

A Texan, Rick Hire, says the Woke Patriots organization is behind the campaign. In a 30-minute May 9  YouTube video, Hire says he founded the organization to deal with challenges to constitutional rights and the group picked Luther to be the first beneficiary of a GoFundMe campaign.

The GoFundMe page was a hit right out of the gate. When an initial goal of $250,000 was rapidly surpassed, the goal was raised to $500,000. The total raised now sits at $500,040 and the window for donations has closed.

Most of the contributions have been well under $100, but some big givers have stepped up, too. Dan Patrick, the Lieutenant Governor of Texas, gave the most, $7,500, to cover Luther’s court-imposed fines.

Texas Governor Greg Abbott allowed personal care service facilities like salons to resume operations on May 8, so the restriction that spurred Luther’s protest is no longer in place. But the brief tempest made Luther $500,040 richer. Not only can she spend the money pretty much however she wants, but it may not even be taxable income.

Luther says she wants to spread her newfound wealth to those who need it. That probably won’t include the people who work at her salon. On May 3, Luther was approved for a government loan under the Paycheck Protection Program. The entire loan can be forgiven in full if at least 75 percent of it is used to pay her employee’s salaries.

What a deal!

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Guest Opinion: Gov. Brown’s Covid-19 Emergency Declaration is Unconstitutional

NOTE: On May 18, 2020 a Baker County, OR judge invalidated the governor’s restrictions on businesses and social gatherings, along with every other executive order Brown has issued under a state of emergency she ordered due to the COVID-19 pandemic. https://bit.ly/3dYTwM6

By Glen Wagner   GWagnersmall

 

One thing I have not seen addressed enough in regards to Oregon Governor Brown’s actions related to the COVID-19 situation is the literal unconstitutionality and illegal nature of her Emergency Declaration or her blatant continued violation of the constraints placed on her from the Oregon Constitution.

Willamette University professor Paul Diller has bloggedabout the matter, arguing that Brown’s emergency orders should have an expiration date, and Willamette Week has written about his argument, but that’s it.

In my view,  a basic reading of Section 6.1 of Article X-A of the Oregon Constitution (found at https://www.oregonlegislature.gov/bills_laws/Pages/OrConst.aspx) clearly states that emergency powers shall not extend beyond 30 days from the time of proclamation, after which the articles will expire.

Section 6.2 of Article X-A says that a 3/5 approval of the Legislative Assembly is required to extend the date beyond 30 days. Section 6.5 of Article X-A says that the Governor cannot issue a second proclamation for the same emergency.

Gov. Brown declared the COVID-19 emergency on March 8th. Per the Oregon Constitution, the emergency legally ended on April 8th. As far as I know, the Legislative Assembly did not vote to approve a time extension. Therefore, any of the Governor’s current actions justified by this emergency declaration are fundamentally unconstitutional.

Gov. Brown’s Emergency Declaration states it is to last 60-days. The declaration itself is in violation of Section 6.1 of Article X-A in the state constitution.

The governor’s Emergency Declaration further claims the 60-day term “can be extended or terminated by the Governor”. Per ORS 401.204 the Governor (or the Legislature) can terminate the emergency, but it does NOT give the Governor the authority to extend it. Article X-A Section 6.2 makes it clear ONLY the Legislative Assembly can do this.

According to ORS 401.165.1 the declaration needs to specify an area “no larger than necessary to respond to the emergency.” 433.441.2(b) Says it should state the political subdivision or geographical area subject to the proclamation. Governor Brown’s Emergency Declaration states the emergency to be “state-wide”.

While public health information is listed within the declaration, it is not a foregone conclusion that all counties in the state had equal risk of infection and not all asked for an emergency to be declared. The purpose of the limited geographical nature of an emergency is to ensure focus of state resources and limit emergency powers to a specific area. In can be argued that by making it immediately state-wide the states and county resources were de-focused and spread thin rather than concentrated at the points of highest risk such as in urban areas. While not in violation of the law, it is surprising no one in the legislature raised any challenge to this scope determination.

ORS 433.441.2(d) Says the proclamation must contain a duration IF LESS THAN 14 days; in other words, there is a statutory limit on the Public Health Proclamation of 14 days. Governor Brown’s Emergency Declaration clearly violates this requirement by stating a 60 days duration.

ORS 433.441.5 Says the proclamation expires when the Governor declares it or NO MORE THAN 14 days after the proclamation. The Governor can extend the duration by another 14-day period (1) for a total of 28 days. This is in compliance with the Constitution’s Article X-A since it is within 30 days. It does NOT give the right to the Governor to extend the duration indefinitely. Therefore, Governor Brown’s Emergency Declaration of 60-days and that the Governor can extend the time frame is in violation of this statute.

ORS 433.452 Says that it is reasonable for the state to detain an individual who has been exposed to the reportable condition only for the time necessary to collect contact tracing information. The individual is to be educated on the nature of their exposure. Nowhere can I find in this statute where the Governor is given the authority to detain ANY or ALL individuals who have not been shown to have been exposed to the reportable condition. Her order indicated only 14 people in a state with a population of over 4 million had contracted COVID-19 and only in a small geographical location. There was no justification for and no legal right for the Governor to issue a stay at home order for healthy individuals. Likewise, even if this order had been legal it should have expired on April 8th like everything else.

Therefore, the Governor has exceeded her authority to detain unaffected individuals and for durations far exceeding anything allowed in the state constitution or statutes.

The Governor just issued an extension to her originally unconstitutional declaration, which is an actual illegal act to the aforementioned references. In addition, she cites two statutory references: ORS 401.165 and ORS 401.204 as justifications of her right to extend the emergency for another 60 days.

401.165 only states the Governor’s ability to issue a declaration, which she already did on March 8th. 401.204 pertains to ENDING the emergency, not extending it. And then to sound all legal she says it is all under ORS 401.025. All this section does is define some terms for the rest of the statute. Basically, they included these references to give an air of legitimacy when in fact they have no bearing on the extension proclamation at all. This shows culpability and intent to continue to violate our laws.

Where is the push-back?

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Kate Brown needs to bite the bullet on a Covid-19 budget

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Gov. Kate Brown wants all state agencies to submit plans for 8.5 percent cuts in their general fund dollars for the two-year budget cycle because of the expected impacts of the Covid-19 pandemic.

What a complete waste of time.

A smarter, bolder governor would abjure equal across-the-board cuts in favor of cuts targeted at lower priority, low-quality or ineffective programs.

The order for across-the-board budget cut scenarios is a lazy cop-out that substitutes simple, seemingly fair cuts for hard decisions that might raise political hackles.

If all programs are kept in place and just reduced in size and scope, opportunities to eliminate waste are lost and saved but ineffective programs tend to grow again when higher state revenues return.

As George W. Bush said, “There comes a time when every program must be judged either a success or a failure. Where we find success, we should reward it, repeat it, make it the standard. And where we find failure, we must call it by its name. Government action that fails in its purpose must be reformed or ended.”

Indiscriminate equal across-the-board cuts also ignore differential effectiveness between state government programs and differences in policy priorities. They are agnostic as to what the state should really be doing with its revenue and lock in current policy priorities.  They also penalize the leanest and most efficient agencies that have less fat to cut.

Some programs may also be able to sustain their core functions with a specific percentage cut, while others can’t.  You can’t, for example, cut the length of a bridge by 8.5 percent.

Uniform 8.5 percent cuts will mean that valuable, impactful projects and investments will be cut as much as in equal measure with bloated, duplicative projects and state employees doing great work will be cut along with those doing shoddy work.

In addition, although government frequently tries to cloak all spending in the “investment” bucket, it is true that some spending is intended to be more an investment in the future than a short-term outlay.  An across-the-board spending cut that applies to even productive public investments may reduce current spending, but make future budget problems worse.

“At this point, the reduction plans are a planning exercise that will give the Governor a series of options to consider,” Liz Merah, a spokeswoman for Gov. Brown, said to OPB.

Exercise is right, as in performance without a purpose.

 

 

 

 

 

 

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Rep. Earl Blumenauer: still a man of the people?

It looks like a career in elective office has been very good to Earl Blumenauer.

When he went to Congress as a Democrat representing Oregon’s 3rd District in 1996, he was a man of modest means.

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Rep. Earl Blumenauer (D-OR) in 1997, his first full year in office.

But the Congressman’s net worth has been steadily increasing for years and he’s now a multi-millionaire according to OpenSecrets.org, a project of the nonpartisan Center for Responsive Politics.

He’s done so well that in 2018, the most recent year of OpenSecrets’ comprehensive data, he was the 31st wealthiest of the 435-member House of Representatives, with an estimated net worth of $12,561,042.

He’s achieved his wealth while, other than a stint at Portland State University, his work history consists entirely of holding elective office.

Blumenauer was sort of a wunderkind, first elected to office when he was barely out of college.

His first job after graduating from Lewis and Clark College in 1970 was assistant to the president of PSU. During his eight-year tenure there he was elected to the Oregon Legislature in 1972 and earned a law degree from Lewis and Clark in 1976.

He was elected to the Multnomah County Commission in 1978, where he worked until 1985. He was elected to the Portland City Commission in 1986, where he served until 1996. His annual salary as Commissioner in his last year was $70,610.

Blumenauer was elected to the U.S. House of Representatives in May 1996 in a special election to fill the vacancy caused by the election of then-Rep. Ron Wyden to the Senate. He was elected to a full term that November.

Based on the Financial Disclosure Report**  Blumenauer filed with the Clerk of the House for 1996, and using the Center for Responsive Politics’ formula for analyzing lawmakers’ finances, Blumenauer’s estimated net worth in 1996 when he took office in Congress was $504,009.

His assets included investments in a number of mutual funds, Nike stock, deposits in money market funds, Bank of America and Portland Teachers Credit Union, and investments in real estate in Portland, OR and Washington, D.C.

His Washington, D.C. property was a duplex at 510 6th St. SE he purchased on Sept. 6, 1996 for $169,000 to use as his residence. His other real estate investments were principally in Portland apartment buildings, some through Limited Liability Companies (LLCs).

Blumenauer’s potential retirement benefits from his employment in Congress and his potential PERS benefits are not required to be reported in Financial Disclosure Reports. He did, however, list his PERS account among his assets in his filing for 1999, putting its value at $250,001 – $500,000. Most Members of Congress also receive an annual salary, currently $174,000. They are not required to disclose this information either.

The numbers indicate that Blumenauer wasn’t a pauper, but neither was he filthy rich.

To say the least, he’s done quite well for himself since then.

Blumenauer, who tries to position himself as a bow-tied everyman on a bike, is, by any measure, a very wealthy man.

Some of the increase in his wealth may be related to his 2004 marriage to Margaret D. Kirkpatrick, who served as Senior Vice President of Environmental Policy and Affairs at Northwest Natural Gas Company from January 1, 2015 until January 19, 2016. Financial Disclosure Reports do not break out the individual sources of a member’s wealth.

His 2018 assets included his D.C. residence, an investment in the Joinery Holding Co. with a value of at least $250,000 and a vacation house in Deer Isle, ME.

Blumenauer’s 2018 assets also included over $1 million in Northwest Natural Gas stock, investments in U.S. Treasury notes, a number of mutual funds, the OnPoint Community Credit Union, the Congressional Federal Credit Union, and Portland real estate.

His reported real estate investments in 2018  included:

  1. The Pettygrove House, 1400 N.W. 23rd

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  1. 1701 N.W. Glisan

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  1. 2441 N.E. Weidler St.

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Multnomah County records  and a title report showed that Blumenauer and his wife, Margaret D. Kirkpatrick, also jointly own residential property at 2241 N.E 30th Ave. in Portland, but neither the purchase transaction nor the value of the asset have ever been noted in Blumenauer’s Financial Disclosure Reports to Congress.

County records show that Isaak Regenstreif, a Portland consultant who describes himself on his website as “a connector and a problem solver,” purchased the property on May 1, 1989 for $182,500. He then sold it to Margaret Kirkpatrick on March 22, 2002 for $82,627. Zillow estimates the current market value of the property as $1,403,523.

If Blumenauer included this property in his list of assets on his Financial Disclosure Report to Congress, that would further increase the estimate of his net worth by the Center for Responsive Politics.

 

30thHouseblumenauer

2241 N.E 30th Ave., Portland

 

Blumenauer’s Financial Disclosure Report for 2010 showed he began investing that year in a mutual fund listed as T Rowe Price Retirement 2020, putting in between $100,001 –  $250,000. In 2012, he made a number of investments in Blackrock 2020 Retirement. Both are target-date funds designed to meet the investment objectives of people planning to retire in 2020.

It doesn’t look like Blumenauer , who’s now 71, intends to stick with that retirement year, but whenever he retires, it will be as a very rich man.

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*Rep. Blumenauer’s estimated net worth was calculated by the Center for Responsive Politics, a non-partisan, non-profit that tracks money in U.S. politics, on OpenSecrets.org. Net worth was calculated by summing the filer’s assets and then subtracting any listed liabilities. Filers report the amount of each of their assets, transactions and liabilities as falling within one of several ranges. The minimum possible values for each asset were added together as were the maximum possible values. Likewise, minimum and maximum liability amounts were summed. The maximum debt figure was then subtracted from the minimum asset figure and the minimum debt figure was subtracted from the maximum asset figure. The resulting range represents the extremes of how much a filer could be worth, and his or her actual net worth should fall somewhere within that range. The midpoint or average of the two limits was also calculated and used for purposes of ranking the filers by wealth. Retirement accounts from employment with the federal government are not reported in Financial Disclosure Reports. Most Members of Congress also receive an annual salary, currently $174,000. They are not required to disclose this information.

Rep. Earl Blumenauer’s Estimated Net Worth/House Wealth Rank

2016: Net worth: $9,950,020; House rank: 20th

2015: Net worth: $6,997,519; House rank: 59th

 2014: Net worth: $7,632,520; House rank: 46th

2013: Net worth: $6,828,015; House rank: 58th

2012: Net worth: $6,809,015; House rank: 48th

2011: Net worth: $6,057,014; House rank: 47th

2010: Net worth: $4,924,520; House rank: 64th

2009: Net worth: $4,302,516; House rank: 76th

2008: Net worth: $3,615,019; House rank: 75th

2007: Net worth:  $3,739,518; House rank: 81st

2006: Net worth: $4,077,518; House rank: 82nd

2005: Net worth: $3,569,016; House rank: 88th

2004: Net worth: $3,357,511; House rank: 81st

1996: Net worth: $504,009; House rank: NA

**Financial Disclosure Reports include information about the source, type, amount, or value of the incomes of Members, officers, certain employees of the U.S. House of Representatives and related offices, and candidates for the U.S. House of Representatives. The reports are filed with the Clerk of the House as required by Title I of the Ethics in Government Act of 1978, as amended (5 U.S.C. app. § 101 et seq.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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And Democrats think Biden is the best they can offer?

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In September 2019, at the third Democratic presidential debate, an ABC moderator asked Joe Biden:

“…as you stand here tonight, what responsibility do you think that Americans need to take to repair the legacy of slavery in our country?”

Biden answered:

“Well, they have to deal with the — look, there’s institutional segregation in this country. And from the time I got involved, I started dealing with that. Red-lining banks, making sure that we are in a position where — look, you talk about education…make sure that we bring in to help the teachers deal with the problems that come from home. The problems that come from home, we need — we have one school psychologist for every 1,500 kids in America today. It’s crazy. The teachers are — I’m married to a teacher. My deceased wife is a teacher. They have every problem coming to them. We have — make sure that every single child does, in fact, have 3-, 4-, and 5-year-olds go to school. School. Not daycare. School. We bring social workers into homes and parents to help them deal with how to raise their children. It’s not that they don’t want to help. They don’t — they don’t know quite what to do. Play the radio, make sure the television — excuse me, make sure you have the record player on at night, the — the — make sure that kids hear words. A kid coming from a very poor school — a very poor background will hear 4 million words fewer spoken by the time they get there.”

Good grief!

 

 

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Bloomberg’s money: now what?

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Democrats, eager to position themselves as the good guys in the campaign finance debate, weren’t real happy about all that Bloomberg money flowing into the primary campaign.

Bloomberg spent an estimated $500 million in just 100 days on slick TV ads, mailers, about 2400 staff spread around the country and for political-data and polling. Critics, including his Democratic primary opponents, accused him of trying to buy the nomination.

But now that Bloomberg has abandoned his campaign, will the Democrats become more accepting of his pledge to keep spending millions to help Democrats win the presidency and other races in the general election?

Bernie Sanders has said he wants to win with small dollar individual contributions. He’s also said he wouldn’t welcome Bloomberg’s big money help. Joe Biden, who has a history of decrying the role of wealthy people and special interests in elections, has been considerably more flexible in practice.

According to the Federal Election Commission (FEC) and Open Secrets, a nonpartisan website by the Center for Responsive Politics that tracks the effects of money and lobbying on elections and public policy, Sanders has raised $134,069,993, about one-third of that in large contributions.

In contrast, the Biden for President committee has raised $68,281,49, about two-thirds of that in large contributions:

A pro-Biden SuperPAC, Unite the Country, has raised an additional $7,919,417 from just 163 donors, with employees of the top three donors (Masimo Corp; Blum Capital Partners; Marcus & Millichap) giving $1 million each. A Leadership PAC, American Possibilities, has donated $432,948 more.

If Bloomberg decides to follow through on his pledge to spend millions to defeat Trump, there are no limits on what he can spend. Since he’s worth an estimated $60 billion, he could be a very big player.

He would be prohibited from coordinating his spending decisions with the eventual Democratic nominee, but that is honored more in the breach than the observance. .

Biden says on his presidential campaign website that he will “reduce the corrupting influence of money in politics.”

“Biden strongly believes that we could improve our politics overnight if we flushed big money from the system and had public financing of our elections,” his website says. “Democracy works best when a big bank account or a large donor list are not prerequisites for office, and elected representatives come from all backgrounds, regardless of resources. But for too long, special interests and corporations have skewed the policy process in their favor with political contributions.”

So much for empty rhetoric.

If Biden wins the Democratic nomination, neither he nor the Democratic Party will try to stop Bloomberg from pouring his money into the campaign to defeat Trump. You can bet on it.

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“Legislative walkouts are undemocratic.” Nonsense.

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In an opinion column in the Feb. 27, 2020 Lake Oswego Review, State Senator Rob Wagner (D-Dist 19) said the walkouts of Republicans in the House and Senate to block Democrats’ climate change legislation “…are an attack on democracy itself.”

“Serving as state senator is a job I take seriously,” Wagner wrote. “I view it as a great honor and a great responsibility. Walking out on the job is irresponsible. Shutting down democracy is irresponsible. Accepting a paycheck while refusing to work is not only irresponsible, it’s unethical and it’s disrespectful.”

Sounds all very noble, a sincere effort to position himself as an honorable servant of the people, an exemplar of moral superiority. The reality is quite different. Legislative history reveals that Wagner is more a political opportunist and a hypocrite.

The fact is legislative walkouts (even jump-outs) by Democrats and Republicans have a long history in Oregon and other states, going back at least to 1840. In December of that year,  Abraham Lincoln, then a state representative in Illinois,  jumped out of a first-floor window of a church a serving as temporary legislative chambers to avoid a quorum call on a Democratic banking bill that he and fellow Whigs fiercely opposed

In Oregon, House Democrats walked out for five days in 2001 over redrawing state legislative districts.  Senate Democratic Leader (now governor) Kate Brown, D-Portland, called the House Democrats’ actions “very appropriate under the circumstances.” Democratic Representatives Mark Hass (current State Senator) and Laurie Monnes Anderson (current State Senator) supported the walkout.

In April 1995, ten Senate Democrats walked out over an award named after the late Sen. Frank Roberts, a Democrat.

In 1971, House and Senate Democrats walked out over voting age and other issues.

The current controversy goes back to voter approval of Ballot Measure 71 in the Nov. 2010 general election. Until that point, the Oregon Legislature was restricted to meeting in regular session only during odd-numbered years.

Measure 71 amended the state’s constitution to add an even-year regular session and placed limits on the length of sessions in both even and odd years.  Odd-year sessions were limited to 160 calendar days, even-year sessions to 35 calendar days.

Proponents of Measure 71 argued that the state was too complex for the legislature to make budget decisions on a two-year basis and some critical policy decisions either couldn’t or shouldn’t be held off for extended periods.

The common assumption was that the short sessions would provide a venue for urgent actions and facilitate a smoother running government while still keeping the longer sessions for consideration of consequential laws of wide public interest.

The 2020 short session is, however, hardly limiting itself to a few urgent bills. According to LegiScan, the session has 283 bills before it. In addition to the controversial cap-and-trade bill (Senate Bill 1530), bills have been introduced with widely varying degrees of apparent urgency. These include bills that would:

  • Prohibit anybody from conducting or participating in a contest, competition, tournament or derby that has the objective of taking coyotes for cash or prizes.
  • Regulate kratom, a tropical tree with leaves that contain compounds that can have psychotropic (mind-altering) effects.
  • Require secure storage of guns and give local governments the authority to decide if guns should be allowed on their grounds.
  • Direct Oregon Health Authority to assess supply and demand of behavioral health professionals in state.
  • Describe evidence that Health Licensing Office may consider to determine if applicant for residential care facility administrator license has earned high school diploma or equivalent.
  • Recognize 2019 Oregon Women of Achievement for outstanding leadership and service to people of Oregon.
  • Makes unlawful practice for place of public accommodation to refuse to accept United States coins or currency as payment for goods and services.
  • Recognize and honor artistic and civic contributions of Michael A. Gibbons.
  • Allow expanded practice dental hygienist to perform interim therapeutic restoration.
  • Recognize University of Oregon Ducks quarterback Justin Herbert for outstanding season and remarkable career.
  • Require the Department of Transportation to study development of uniform standards for speed bump height and markings.
  • Congratulate Rogue Creamery for winning top prize at World Cheese Awards.
  • Establish a Task Force to Promote Social Equity in the Cannabis Industry.
  • Establish a product stewardship program for mattresses.
  • Authorize Oregon Business Development Department to award matching grants to membership organizations and business accelerators in outdoor gear and apparel industry.
  • Prohibit abortion unless physician has first determined probable post-fertilization age of unborn child, except in case of medical emergency. Prohibits abortion of unborn child with probable post-fertilization age of 20 or more weeks, except in case of medical emergency
  • Require health care practitioner to exercise proper degree of care to preserve health and life of child born alive after abortion or attempted abortion. Requires health care practitioner to ensure child born alive is transported to hospital.
  • And of course, allow Oregon voters to decide whether to change the constitution so a majority of the legislature constitutes a quorum, rather than the current two-thirds.

The problem for Democrats during this short session is that Article IV, section 12 of the Oregon Constitution says “two thirds of each house shall constitute a quorum to do business.” With the Republican walkout, there’s no quorum, so business is halted.

Just as Congressional rules can be effectively wielded in political battles, it is hardly undemocratic for a party to rely upon Oregon’s constitution to advance or hinder legislative action. Moreover, the Democrats should be cautious in pushing for change. If they convince voters to amend the constitution to consider a simple majority a quorum in the future, that could come back to bite them if Republicans regain control.

 

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Presidential pardons have a long, sad history

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Presidents have long been pardoning more than just turkeys.

“The clemency orders that Mr. Trump issued this week were the result of a process that bypassed the formal procedures used by past presidents and was driven instead by friendship, fame and a shared sense of persecution.” That was the New York Times’ take this morning.

In singling out Trump, the paper seems to have forgotten recent history. As contemptible and unwise as Trump’s actions are to many, he is hardly the first president to take questionable actions in this arena.

President Obama issued 212 pardons and 1,715 commutations, including one of a 35-year prison sentence given to former U.S. Army soldier Bradley/Chelsea Manning for the largest leak of classified data in U.S. history to WikiLeaks.

President Clinton, never one to be embarrassed by his actions, pardoned his brother Roger Clinton after Roger served a year in prison after pleading guilty to cocaine distribution charges.

In August 1999, Clinton also commuted the sentences of 16 members of FALN, a Puerto Rican paramilitary organization that had set off 120 bombs in the United States, mostly in New York City and Chicago. The commutation was opposed by the U.S. Attorney’s Office, the FBI, and the Federal Bureau of Prisons and Congress condemned Clinton’s action by votes of 95–2 in the Senate and 311–41 in the House.

One pundit recently commented that at least Trump didn’t pull a fast one on his last day in office. That was when Clinton’s did his most egregious pardon. On January 20, 2001, against the advice of White House aides ,he pardoned Marc Rich, a former hedge-fund manager. Rich had fled the U.S. during his prosecution and was living in Switzerland at the time. Rich owed $48 million in taxes and had been charged with 51 counts of tax fraud.

At the time of the pardon, Rich was No. 6 on the government’s list of most wanted fugitives and had been on the lam, albeit a luxurious one, for 16 years, ever since his 1983 indictment by a grand jury.

Rich’s ex-wife had donated to the Democratic National Committee, the Clinton Presidential Library and Hillary Clinton’s New York Senate campaign, raising considerable suspicion about the pardon and leading former President Jimmy Carter to call the pardon “disgraceful.”

A New York Times editorial called the pardon “a shocking abuse of presidential power.” The liberal New Republic said it “is often mentioned as Exhibit A of Clintonian sliminess.” Not that such allegations ever seemed to bother the Clintons.

And the Clintons reaped benefits from the pardon even after Rich’s death in 2013, as Rich’s former business partners, lawyers, advisers and friends continued to shower millions of dollars on the Clintons.

Of course, Clinton isn’t the only “last day in office” pardoner. Remember Peter, Paul and Mary? In 1970, Peter Yarrow was convicted of taking “improper liberties” with a 14-year-old fan, for which he spent three months in jail. On his last day in office, President Jimmy Carter granted Yarrow a pardon.

President George H.W. Bush was roundly condemned for pardoning, commuting the sentences and rescinding the convictions of six people convicted in the Iran-Contra arms-for-hostages scandal during Reagan’s presidency,

Reagan stepped up, too, pardoning New York Yankees owner George Steinbrenner after he pleaded guilty to illegally contributing to Nixon’s campaign.

Then there’s Nixon. In 1974, President Gerald Ford granted a “full, free and absolute pardon” to his predecessor Richard Nixon “for all offenses against the United States.” This broadly unpopular action was the only time a president has received a pardon. It caused a huge firestorm because Nixon was so unpopular and because there was suspicion that Ford secretly promised to pardon Nixon in exchange for him resigning and allowing Vice President Ford to succeed him.

So much for punishing bad behavior.