Oregon Newspaper: Documents Detail Goldschmidt Work for SAIF

August 2, 2004

New documents reviewed by a Salem newspaper map out how former Gov. Neil Goldschmidt’s deal-brokering helped shape a plan on medical malpractice insurance for obstetricians in rural Oregon.

The former governor was widely acknowledged as one of Oregon’s most powerful behind-the-scenes political lobbyists until the news broke in May that he had sex with a 14-year-old girl while he was mayor of Portland in the 1970s.

Goldschmidt and SAIF Corp. also have been under fire for the more than $1 million in “consulting fees” he got from the state-owned workers’ compensation firm. A state ethics panel is investigating allegations that the firm failed to report all of its lobbying spending, as required by law.

SAIF’s main private-sector rival in Oregon, Liberty Northwest, is currently financing a ballot campaign to dissolve SAIF.

The documents reviewed by The Statesman Journal in Salem outline how a plan forged by Goldschmidt shifted the burden of funding the medical malpractice initiative off of SAIF, while letting Gov. Ted Kulongoski make progress on funding rural health initiatives.

Kulongoski, a Democrat like Goldschmidt, had made solving the high medical malpractice rates for rural doctors a priority when he first came into office, after finding out that large numbers of such physicians planned to stop practicing because of the rates.

The governor told SAIF it should find a way to provide coverage for rural doctors facing high malpractice insurance costs by using some of its reserve funds.

But then-SAIF chief executive Kathy Keene opposed taking money from the workers’ compensation carrier, arguing it was money that belonged to SAIF policyholders that include businesses, nonprofits and governments, according to the documents.

Internal e-mails subpoenaed by Portland attorney John DiLorenzo, who is allied with Liberty Northwest, show Keene strongly resisted Kulongoski’s plan to have the insurer spend up $25 million to subsidize medical malpractice insurance, despite being urged to do so by media consultants.

The same e-mail said Goldschmidt would try to mediate the medical malpractice dispute.

In a meeting with Kulongoski, Goldschmidt proposed that SAIF pay for the medical malpractice program but recoup all of the money by paying less taxes on workers’ comp insurance premiums, the Statesman Journal said.

Under the deal, the insurer would pay $10 million per year for four years for the medical malpractice initiative, but get a $10 million annual credit against fees used to pay for the state workers’ comp regulatory program.

Liberty Northwest was wary of the deal, fearing that private insurers would be asked to shoulder a higher tax on their premiums to make up for the lost money.

“We had concerns that it was going to be used more as a public relations tool, that SAIF would use it to bolster their public image, rather than a substantive reinsurance program as presented to the Legislature,” Liberty spokesman Brian Boe told The Statesman Journal.
On May 1, Kulongoski issued a news release praising SAIF for taking on a new role, calling it, “a positive, constructive way for us to address an urgent need.”

Attorney DiLorenzo told The Statesman-Journal that the new documents provide a revealing glimpse into Goldschmidt’s high-level consulting and lobbying work.

“I suspected that he was doing something of some value for SAIF. Otherwise SAIF wouldn’t be paying him at all,” DiLorenzo said. “It now appears that he was busy.”

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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