Gov. asks for Diana Goldschmidt’s resignation from investment council

SALEM, Ore. – Gov. Ted Kulongoski asked Diana Goldschmidt toresign from the Oregon Investment Council Tuesday because of acontroversy over an investment involving her husband, former Gov.Neil Goldschmidt.

Kulongoski said the flap is a distraction that threatens todisrupt the work of the Investment Council unless Diana Goldschmidtsteps down.

The council, which oversees $60 billion in state investments,has been under an ethical cloud because of its unscheduled vote inOctober 2003 to place $300 million of public employee pension moneywith Texas Pacific Group.

The move raised eyebrows a few weeks later, when the FortWorth-based outfit hired Neil Goldschmidt to lead its effort to buyPortland General Electric.

Kulongoski, in his letter to Diana Goldschmidt, said OregonAttorney General Hardy Myers has concluded a preliminary review andis ready to recommend a “thorough investigation” of theinvestment.

“Regardless of the outcome, I am concerned that this ongoinginvestigation of a sitting council member is a distraction and willbecome harmful to the council’s fulfilling its duties,” thegovernor said.

Kulongoski spokeswoman Marion Hammond said the governor sent hisletter to Diana Goldschmidt earlier Tuesday informing her of hisintention to remove her from the council.

Neil Goldschmidt resigned from the PGE effort last spring afteradmitting that he had sex with a 14-year-old girl while he wasmayor of Portland in the 1970s.

The attorney general’s office recently began looking into thecouncil’s vote on the Texas Pacific matter at the request of StateTreasurer Randall Edwards.

State Sen. Vicki Walker said Tuesday she had asked for a stateinquiry of the council’s actions even before Edwards asked for itbut that she concurs with Kulongoski’s decision to ask DianaGoldschmidt to step down.

“She should have resigned a long time ago,” the Eugene Democratsaid. “I am pleased that the governor has finally asked her to dothat.”

Walker has said she plans to push for legislation next Januaryto force the Investment Council to tape record all meetings andkeep detailed minutes. That’s because the investment council actedon the Texas Pacific investment even though it was not on thecouncil’s meeting agenda.

“It looks very bad,” she said of the council’s vote. “Thiscouncil needs to operate above reproach, with honesty andintegrity, to assure Oregonians that their funds are being managedwisely.”

Hammond, the governor’s spokeswoman, concurred.

“The governor feels that no one person is bigger than the workof the council,” she said. “We can’t let this thing drag out anddisrupt the council’s work.”