Log in
updated 2:54 PM UTC, Jul 28, 2018

FlynnsHarp logo 042016

Seattle mayor race may offer business hope for future

Seattle mayor race may offer business hope for future
Soon after Mike McGinn took office as Seattle's new mayor in 2009, he was speaker at a business breakfast and was overheard telling an aide as he was sitting at the head table waiting to be introduced, "these are not my people."

Those in the business community soon came to understand McGinn wasn't their "people" either and sought to help support the election of Ed Murray, the longtime legislative leader who ran against and ousted McGinn in 2013.

But Murray turned out to be only marginally better for business and his only bow to the needs of the business community was a frequent refrain as his term progressed that he'd be open to help business "but business can't tell me what they need." And he spent little time reaching out to business leaders to find out.

Now Murray, driven to end his re-election bid amidst the growing furor over law suits contending he had sexually preyed on troubled young men years ago, leaves Seattle entering a time of uncertainty as the contest for a new mayor begins.

No one takes pleasure in Murray's travails. But the fact remains that as Seattle prepares to find a new mayor and business people began discussing how to seek to take advantage of the opportunity to find a business friend, a candidate that most feel at least understands both business and the political process has filed to seek the office.

That's former U.S. Attorney Jenny Durkan, a woman of power and influence in Democratic party ranks but viewed by most business people as a throwback to a time when "liberal" included being a Democrat who understood the importance of the business community to a vibrant city.

Among those happy to see Durkan in the race is Bob Wallace, CEO of Bellevue-based Wallace Properties. When I called to talk to him about the Seattle political scene leading up to Durkan's announcement of her candidacy, he quipped: "I told Kemper (Freeman) that he should send a big bouquet to the Seattle City Council for all they are doing to make Bellevue look good to business."

Of Durkan, Wallace said "I'm pleased to see her decide to run. She is liberal, smart and pragmatic and she'd be an infinitely better mayor than any of the others in the race."

Wallace, although a conservative Bellevue business leader, has made a point over the years to also immerse himself in Seattle's business leadership, serving in key roles in both the Seattle and the Bellevue chambers of commerce.

Wallace says that although what he views as the "drift to the far left" by Seattle's elected leaders is "potentially jeopardizing our economic future," he suggests that "Seattle's major companies could care less" because Seattle represents only a small part of their business empires.

But smaller businesses do care and the growing contrast between the apparent attitudes of Seattle and Bellevue elected officials toward business needs is being increasingly noted. A friend of mine is launching a new business with offices in Seattle and Bellevue and told me that "many of the Eastside people we are hiring wouldn't be coming to work for us if we didn't have a Bellevue office because they simply don't want to have to get into Seattle each day."

It's important for Seattle business leaders enthused about Durkan's candidacy not to talk of her as pro business because that's not only possibly inaccurate but for sure potentially damaging to her candidacy in a community where that's obviously a negative for many Seattle voters.

The key is that she certainly brings an understanding of business, how it operates and its legitimate role in the success and future of Seattle.

Durkan wouldn't be the first Seattle woman mayor. That role belonged to Bertha Knight Landis, elected to a two-year term in 1927, having been the first woman elected to the Seattle City Council five years earlier and becoming president of the council when re-elected two years later.

Business became her fan, incidentally, before she won elective office when she orchestrated a weeklong Women's Educational Exhibit for Washington Manufacturers. Staffed by more than 1,000 women, that bolstered the spirits of the business community during a period of severe recession.

Landis defeated incumbent Edwin J, "Doc" Brown in 1927 in a campaign in which her theme was "municipal housecleaning" was needed in the Seattle government, an approach that could appeal to moderates on the left this year.

One issue that's already certain to be a mayoral campaign issue on which all these seeking the office will be pressed to explain their positions is the proposed city income tax on higher-income individuals. Most announced mayoral candidates at the first mayoral forum, prior to Durkan's announcement, expressed support for an income tax. In fact the idea was proposed by McGinn, who is seeking to regain the mayor's office.

Candidate positions on the effort to impose an income tax of unspecified amount on high-income individuals, with no clear indication of the definition of "high income," will be interesting to watch take shape during the campaign leading up to the August primary when the top two vote-getters will move on to the November general election.

Seattle is the second stop by the supporters of a state income tax who have embarked on a process observers have described as "city shopping," looking for a local electorate or elected body willing to impose an income tax to get the issue before the state supreme court. Olympia voters rejected the idea in November.

Only the uninformed could fail to realize no income tax is going to be imposed in Seattle for the foreseeable future so it can't provide revenue for the city that proponents say is needed now.

Rather the hope for a court test is that the 5-4 majority decision by the State's highest court in 1932 that an income tax was unconstitutional would be reversed by a far more liberal court 85 years later.

But the fact that the 1984 legislature outlawed a local income tax imposed by cities or counties means a first court test would be about state law rather than the constitutionality of an income tax.

As for Durkan's view on the issue, she quickly debunked the idea at her announcement news conference, saying a city income tax is "probably not constitutional," and in addition she thinks it's "not be the solution we need now."


Continue reading

Personal reflections on Mike Lowry, passionate believer in people

Personal reflections on Mike Lowry, passionate believer in people
It would be laughable, in this era of unbridgeable political divides, to envision an elected official who nurtured his image as "liberal Democrat" while priding himself on being "the congressman from Boeing." But that was Mike Lowry, the former governor who died early Monday after suffering a stroke.

Because of our 50-year friendship, beginning when he headed the staff of the State Senate Ways & Means Committee and I was the Capital reporter for UPI, this Harp will be more of a personal reflection on Lowry than a catalogue of who he was and what he did.

He was this state's epitome of the progressive politician for 40 years. He believed in the environment and cared deeply about the needs of farm workers, causes he was still involved with at the time of his death at the age of 78.

Lowry was an urban politician proud of his rural roots, growing up in the Palouse community of St. John, and his education at Washington State University.

It was in his desire to get things done for job-creating big business that he was unusual for a Democrat. He brought his political power to work on behalf of Boeing and other large companies because he felt it was the state's role to help companies that provided high-paying jobs.

Thus while being viewed by small business as the enemy, he was generally held in high regard by big business, including Boeing, which quietly supported him in his successful bid for governor in 1992.

It was soon after the election that Lowry called me to meet for breakfast to talk about possible candidates to head the state department of trade and economic development . I thought it would be cool to meet with the governor-elect at the WAC, maybe Rainier Club or even the Four Seasons.
 
Then I learned that his favorite breakfast spot was the Denny's on I-405 north of Renton. Nothing too fancy for Lowry and thus it became the place we met regularly over the years.

Lowry wanted to know what I thought of Mike Fitzgerald as a potential director of the agency. Because Fitzgerald was a friend and a fellow Montanan who got his economic development start working personally, right out of college, for the governor, I said "he'd be great."

Fitzgerald, now president and CEO of the Denver South Economic Development Partnership, worked directly for or with nine governors during his years in economic development and told me in a telephone conversation this week: "I have never worked for anyone who loved their state more than he loved Washington state and its citizens."

"He understood and could articulate the role of the triple bottom line of successfully balancing the economy, the social agenda and environmental considerations," Fitzgerald said, noting that Lowry "was personally involved in Washington landing two of the biggest tech-industry coups in the country at that time."

He was referring to Lowry ensuring the state took the steps necessary, including things like new freeway interchanges and face to face meetings, to land Taiwan Semiconductor in Clark County and an Intel plant in southern Pierce County.

The antipathy of small business, particularly small-business organizations, was cemented from the outset of Lowry's single term as the state's chief executive (he didn't seek a second term partly because of the publicity that surrounded a sexual harassment action by a former press aide, which was settled).

That antipathy was particularly true after he guided legislative enactment of a statewide system of health insurance with premiums based on ability to pay, a law that put a lot of cost pressure on small businesses.

It was the anger of small business toward Lowry over the healthcare law, in addition to is his guiding the 1993 Legislature to double the business & occupation tax for service businesses, that led to my most amusing memory of him. I had sought his partnership with The Puget Sound Business Journal to put on a Governor's Conference on Small Business.

He agreed but as small business antagonism toward Lowry intensified, I grew concerned about the kind of animosity he might face when he appeared at the conference. So I met with him the afternoon before to express my concern and urge him, when he opened the conference the following morning, to just thank the business people for being on hand and wait until the end of the day to make positive comments about things he was doing for business.

"Good advice," he said as we sat in his office going over the agenda. So I was stunned when he opened the conference doing exactly what I had advised him against.

As a result he was pummeled throughout the day by negative comments about him, directly or by innuendo, from the array of speakers from the various sessions.

I was worried when he left quickly without attending the closing-session cocktail party. And more so the next day when I received an anxious call from the person in his office assigned to work with me on the conference.

"I am very worried because he called his entire staff together this morning, expressed his anger and said 'I am going to find out who was responsible for the embarrassment I suffered,'" the staff member told me.

I contacted Lowry and asked if we could meet in his Seattle office to review the conference.

As we sat down facing each other, I said: "Governor, I get the impression you are unhappy about the conference. If there was a problem, there are only two people who could be responsible. You are looking at one, and you see the other one in the mirror."

He flipped his arm up as one of those ear-to-ear smiles spread across his face and he said: "I don't have time to worry about yesterday's irritations, so don't sweat it."

Don Brunell, retired president of Association of Washington Business who often crossed swords with Lowry and other Democratic governors on business issues, told me not holding a grudge was a Lowry trademark.

Brunell offered the comment: "Lowry never personalized anything. He could blow his stack at you one day and be genuinely smiling the next."

Lowry served 10 years as the state's 7th district congressman and twice ran for the U.S. Senate, losing to Dan Evans in a special election in 1983, and to Slade Gorton in 1988. before returning to the political wars to run for governor in 1992. He won, defeating state Attorney General Ken Eikenberry to win his lone term.

After his '88 loss to Gorton, he returned to Washington state along with Dan Evans, who had decided not to seek re-election, and the two joined together to initiate the Washington Wildlife and Recreation Coalition (WWRC).

"Since we came from very different political backgrounds we were soon dubbed the 'Odd Couple,' Evans recalled in an email to me. "I think we both enjoyed the title and both have seen a huge result from that small beginning."

"We were competitors, but far more importantly were colleagues, partners and good friends," Evans added.

Brunell praised Lowry as an elected official with integrity. "While most of them promised not to raise taxes and sometimes wound up doing so, Lowry said he would only raise taxes as a last resort." He did raise the B&O tax dramatically in 1993 but cut back on half the increase two years later.

Said Evans: There was never any question what Mike believed and he worked tirelessly on issues, always with peace, people and progress in mind. We lost a first rate political leader, a passionate believer in people, and I lost a good friend."

Fitzgerald said Lowry's favorite personal saying, repeated half a dozen times in private meetings with him, was from Thomas Jefferson, who talked of a goal of seeking to create "an aristocracy of achievement arising out of a democracy of opportunity."
Continue reading

Gonzaga basketball coach Mark Few puts to rest axiom that 'nice guys finish last'

Gonzaga basketball coach Mark Few puts to rest axiom that 'nice guys finish last'

One of the most noteworthy accomplishments of Gonzaga coach Mark Few in his team's inexorable march toward the NCAA National Championship game, despite falling short in the finale, may have been the destruction of the oft-quoted axiom that "nice guys finish last."

That "nice guys" comment obviously isn't a reference to the angry Bulldog mascot, Spike. But it is the agreed-on description of Few, who grew up in a small Oregon town, the son of a Presbyterian minister, and who didn't leave behind the lessons of his youth.

Despite the fierce competitiveness    of his players that has been on display for the nation to see during the past few weeks, they are described by a GU trustee who has spent an extensive amount of time with them as "selfless, disciplined, family."

Gonzaga and Few fell short of their quest for college basketball's pinnacle in their Mondaynight loss to North Carolina in the NCAA championship game and the pain will burn for a time for the coach, his players and fans.

But his nice-guy trait was on display, despite the pain of the loss, in the post-game nationally televised interview when Few declined the opportunity to blame the referees for the loss with a couple of calls generally viewed as in error, saying instead "the referees were excellent."

And as Jack McCann, a longtime GU trustee who offered me the above characteristics of the team, said to me in a phone conversation before the final game, "nothing should diminish the joy of the journey that this season represented." He meant not just for Few and his team but also for the family of supporters, fans and boosters.

Indeed McCann, a GU trustee since 1997 and founder of the prominent South King County land-development firm, the Jack McCann Co, and other trustees and close supporters have proven themselves part of the GU family over the years.

That includes hosting the coaches and players at their vacation homes, including getaways to Cabo to McCann's beach home and the neighboring Cabo home of Mike Patterson, prominent Seattle attorney and also a trustee. But Few doesn't use Cabo trips as a recruiting tool!

And McCann was quick to sign off in the early 2000s on the idea the players should travel on charter rather than commercial flights before that idea was on the radar screen of most schools.

As John Stone, a successful Spokane developer who came up with the idea of offering his private plane and convinced two others to offer theirs on away-game trips, explained to me in our phone conversation "it became a way to make sure the players were back home in their beds that night and in their classrooms the next day. They are student athletes of course, not just athletes."

McCann was among the trustees and friends who over the years that followed that first private-plane travel year put up the $100,000 apiece to both pay for the flights and allow the supporters to travel on the plane with the team and have seats near the bench for those away games. By the mid-2000s, that was the routine for travel.

And it was Stone who pointed out the importance of the "family" role played by the Greater Spokane community in chipping in $6 million of the $26 million it took to build McCarthey Athletic Center, the 6,000-seat facility on the campus, competed in 2004, that opposing teams dread visiting. 

The community involvement was in the form of a "seat license" plan where members of the Spokane community committed to $4,000 to $5,000 a year to license certain seats in "the kennel" where the seats come right down to the floor.

Few's Oregon upbringing in Creswell a stone's throw from Eugene and the fact he graduated from the University of Oregon created one of the untold human-interest stories that media usually thrive on but someone missed this time.

With Gonzaga and Oregon in the Final Four, I was surprised there wasn't a lot of focus, at least some focus, on the possibility that if the Bulldogs and Ducks each won the first game, Few would have been trying to beat his alma mater.

In fact, another story is the possibility that Few might have been coaching Oregon rather than Gonzaga in this Final Four, but that story is known only in a close circle.

The conversation in basketball circles, and among Gonzaga supporters, over the years of NCAA tournament appearances, has been when would Few be attracted to a bigger opportunity.

After all, having been at Gonzaga since joining the coaching staff as a graduate assistant in 1989, becoming full-time assistant a year later and becoming head coach after the school's Cinderella 1999 drive to the Elite Eight, Few's tenure has been an unprecedented loyalty to what has been viewed as a mid-level program.

The fact is that McCann, sharing the story with surprising candor, was personally aware of a full-court press Oregon's athletic director and famous alum Phil Knight put on Few several years ago to return to his alma mater. But the effort was unsuccessful in attracting him away from Gonzaga.

Supporters are aware the time may come when Few is attracted to a new challenge at another university, but everyone now knows it won't be the lure of a more respected basketball program.

Only nine schools have matched Gonzaga's 2017 record of 37 victories in a season. And Few is one of a handful of coaches to achieve 500 victories, all at the once lightly regarded Spokane school.

Few and his wife, Marcy, have three boys and a girl and in perhaps the most significant example of the importance of family to him is the story of when Few was once asked by a sports writer if the start and end of each basketball season represented the most exciting and most downer times each year.

He replied that the most exciting time each year was when his kids got out of school and he had a whole summer to spend with them and the most disappointing time was when they returned to school in the fall. So much for the appeal of fame and glory.

Gonzaga's desire for sports recognition actually dates back almost a century to 1920 when the Spokane school, with fewer than 200 students, embarked on a quixotic quest for football fame by hiring a big-time coach, Gus Dorais, who had teamed with Knute Rockne at Notre Dame to perfect the forward pass.

It was a quest, I once referred to it in a Harp some years ago, as an "Ozymandian delusion," that brought Gonzaga an improbable post-season appearance two years later against West Virginia in a 21-13 Christmas Day 1922 loss that earned Gonzaga top visibility in the next day's New York Times sports section.

That was the only moment of national football glory for Gonzaga, though the program continued until the outbreak of World War II in 1941 when it was discontinued and never brought back. During its 20-year run, Gonzaga football produced some players who became nationally prominent and one, Ray Flaherty, went on to become, for a time, the most successful coach in the National Football League in the late '30s with the Washington Redskins.

Gonzaga basketball, however, is secure now as a program nationally respected. And the "Nice Guy" and "family" characteristics engendered by Few, the school and the supporters may well become the most envied part of what Gonzaga has brought to college basketball.

McCann refers to it as "a magic carpet ride" for all the segments of the "family."
                            ----------- 

 (The above column is a personal column since my wife and I are graduates of Gonzaga and some of those I quote, Stone and Patterson, are not only friends but attended the same high school, Gonzaga Prep, and same grade school, St. Aloysius, where Few's sister is law is now principal. It doesn't get any more incestuous than that!) 

Continue reading

An unaccountable Sound Transit has begun to attract important critics

An unaccountable Sound Transit has begun to attract important critics

Unaccountability on the part of a public entity, no matter how well cloaked in good intentions or alleged importance of mission, inevitably leads to arrogance when there is no requirement to answer directly to anyone for decisions.

That, not surprisingly, leads to the kind of decisions that create a demand for accountability. Thus hangs the tale of Sound Transit, in the view a growing chorus of critics.

The sense is that the transportation agency officially known as the Central Puget Sound Regional Transit Authority may suddenly be caught with its arrogance on display and feeling the pushback from a public and from lawmakers who are coming to sense a possible need to recast the organization.  

The goal of legislation that has now passed the Republican-controlled state Senate and is awaiting action in House would replace the 18 Sound Transit board members, now local elected officials from one of the three Sound Transit counties with 11 directors directly elected by voters in districts that would be created by the legislature.

The first broad perception of Sound Transit arrogance surfaced with the outcry from motor vehicle owners about the leap in the cost to renew their vehicle license after the excise tax this year had climbed dramatically, due in part to the vehicle valuation chart used by Sound Transit.

Geoff Patrick, who handles media relations and public information for Sound Transit, explained that part of the reason for the large jump in MVET fees was that, in approving ST-3, the $54 billion long-term transit package in November, voters said ok to a major increase in vehicle excise tax. 

The outcry would suggest that many voters weren't really aware of that.

Patrick was quoted earlier, as the MVET flap emerged, to the extent that Sound Transit could have used a vehicle depreciation schedule that would have meant a less expensive renewal fee but chose not to "for simplicity sake," to bring transportation relief quicker.

Then came the visibility surrounding Sound Transit's legal battle with Mercer Island over its effort to end the ability of solo drivers from the island to access I-90 high-occupancy-vehicle lanes when the existing HOV lanes are closed this summer for construction of light rail. That solo-driver access was part of an arrangement that amounted to a pledge from state transportation officials to Mercer Island residents in exchange for letting the state cut the trench for I90 across the island.

And finally, and perhaps defining for any battle to avoid accountability, came the flap over a political fundraiser for King County Executive Dow Constantine at the home of Sound Transit CEO Peter Rogoff for his boss and benefactor. As the flap unfolded, it became known that the planned event hosted at Rogoff's home for his boss might breach two clauses in the transit agency's own code of ethics, though it wouldn't violate any state fundraising laws, so it was moved elsewhere. But Rogoff made it clear he would still be one of the sponsors.

It might seem strange to many political observers that Constantine, who holds the most powerful position on the Sound Transit board and is seeking reelection, would stand silently in the wings, awaiting the outcome of a key fundraiser flap rather then step forward and say, "This is an inappropriate issue. I am cancelling this fundraiser."

Attendees for the party at its new location, it turns out, had to first RSVP online to learn the address. 

The disappointing thing about that is I was beginning to hope some newspaper photographer or television camera team would be on hand to document how many representatives of companies with multi-million-dollar contracts with Sound Transit would be on hand to pass some of the dollars back to the leader of the team.

A focus on those companies with multi-million contracts may soon provide more negative publicity for Sound Transit when all the details of documents detailing the breadth and depth of the value of contacts Sound Transit has signed with nearly 550 companies to provide a wide array of services begins getting close media scrutiny.

The documents were received by former King County Council member Maggie Fimia from Sound Transit in 2015 and detail all payments over $100,000 made to all entities, public and private, from 2007.

When I talked with Fimia to get copies of the array of contract documents and inquired of her thoughts upon digesting them, she said of the array of contracts: "The breadth of the take was unbelievable."

Touching on only one of the contract categories, Fimia offered "why do you need to spend $37 million on marketing and advertising if you have such a tremendous product?" And that didn't include any marketing costs for ST3.

Sound Transit's Patrick told me that a rigorous competitive-bidding process is in place for contracts with the agency, other than services like legal, accounting, marketing and others where expertise and reputation come into play, since you don't low-bid legal services, but may negotiate with the selected supplier for best price.

Fimia's 2001 defeat was allegedly aided by Sound Transit officials upset at her constant questioning of the agency's manner of operating and its dealing with the communities, questioning that clearly didn't end with her departure from the council.

Charles Collins, whose impeccable credentials as a critic of Sound Transit are even grudgingly acknowledged by the agency's board, told me Sound Transit went after Fimia because "she was a continuing thorn in their side."

"They are the 500-gorilla that no one wants to mess with and she kept messing with them, so they helped oust her," he said. She lost her reelection bid in 2001.

Collins has been a constant critic of Sound Transit's focus on high-cost rail service because all statistics, including the agency's own environmental impact statement, indicate trains won't come close to attracting enough riders to relieve congestion. More like attracting maybe 2 percent of riders.

Collins once told me that he and two former governors, Republican John Spellman and a Democrat, the late Booth Gardner, went to Sound Transit in the late '90s before the first vote embarking on rail as the key transportation underpinning with a novel new plan to provide a vehicles alternative that would carry far more passengers at far less cost.

"But they didn't even want to hear our idea because they were about building a train, not focusing on easing congestion," he said, except for Rob McKenna, then King County councilman and later the two-term Republican attorney general and unsuccessful gubernatorial candidate.

McKenna, incidentally, also lost his role on the Sound Transit board, bounced by then-King County Executive Ron Sims for his routine questioning of board decisions and priorities.

Collins, Fimia and McKenna are among those, a list which now obviously includes some legislators, who have urged that spending and policy decisions in the future should relate to relieving congestion rather than focusing only on building a rail network.

"Nothing has changed," said Collins, whose credentials include having been Spellman's Chief King County Adminstrator, Director of Metro Transit and chair of the Northwest Power Planning Council, the State Higher Education Coordinating Board and the State Commission on Student Learning. 

Indeed while Sound Transit operates some of the nation's most successful express bus services in addition to rail and light rail service to the region, there has been little doubt in the community that members of the board view themselves as creators of the region's light rail system. 

And the fact that the mode of transportation in the region's future has unfortunately become ideological, or maybe was from the start, is the reaction of a liberal commentator on Senate passage of SB5001 and that four Democrats joined the Republican majority in passing the measure to the House.

The columnist said the four Democrats" betrayed Sound Transit and the progressive movement," and urged that "every activist and every organization who was involved in helping to pass Sound Transit 3 last year needs to pitch in to ensure that this bill gets a burial in the House of Representatives."

Rogoff is an intriguing case, having been a strong supporter of bus rapid transit and critic of the "enormous expense to build and maintain rail" while head of the Federal Transit Administration. "Busways are cheap."

Almost amusingly, now that he heads an agency dedicated to rail, he said in a speech back in 2010 that riders often want rails, "but you can entice diehard rail riders onto a 'special' bus sometimes by just painting the bus a different color than the rest of the fleet."

He hasn't yet explained at what point between then and his joining Sound Transit that he changed his position of bus over rail, which he viewed as enormously expensive to build and maintain.

If the idea of an elected board to replace the current appointed board is approved by the legislature, a new board might find it could dramatically reduce current and future expenditures by focusing on bus rapid transit and a much more zealous process of contract oversight for other than actual infrastructure expenses.

Only contracts specifically relating to construction bond covenants have been held by the court as illegal to change. That doesn't likely apply to things like contracts with law and accounting firms and advertising and marketing agencies. or construction contracts that won't have been signed when an elected board might replace the current board. 

Continue reading

Baird enjoying growing fuss over his STOCK Act

Brian Baird spent half of his 12 years in Congress in a frustrated, and futile, effort to gather support for his legislation to make it illegal for lawmakers to engage in the kind of financial transactions that those in the real world know as Insider Trading and for which they can be sent to jail. He and one or two supporters offered it each session but couldn’t even get a committee hearing.

But Baird was able to look on with satisfaction when, a year after he decided to focus on family and not run for re-election, a late-2011 program on CBS' "60 Minutes" brought national attention to his idea and coined the phrase "Honest graft," meaning it was graft but it wasn't illegal. The program exposed how members of Congress and their staff traded stocks based on nonpublic information to which they had exclusive access.

Lawmakers by the dozens scurried like frightened rats to get aboard as supporters amid the public outcry the news program sparked and so in April of 2012, the measure titled the STOCK Act (Stop Trading on Congressional Knowledge) was passed to finally bar members of Congress from doing stock transactions in areas they regulate.

Now Baird is watching with some amusement because, since Republican congressional leaders went out of their way in 2012 to quickly pass legislation extending the law to the president and vice president and those who worked for them, President-elect Donald Trump would be covered by the law. So he and his minions are seeking to exempt him from the law.

Newt Gingrich, explaining why ethics laws shouldn’t apply to Trump, even offered the view: "We've never seen this kind of wealth in the White House, and so traditional rules don't work…We're going to have to think up a whole new approach." He suggested that Congress change ethics laws so Trump can avoid any conflicts of interest that his global business empire may pose.

And Trump himself has said he is not subject to laws relating to conflict of interest.

Maybe so. But maybe not, since the Republicans who now control both houses of Congress may not wish to take early action on something that would allow critics the opportunity to point to the GOP lawmakers as being the lap dogs of the President. In other words, if they rolled over on command on the issue of ethics, what commands could they object to?

And Walter Shaub, director of the federal Office of Government Ethics (OGE), has issued a memo providing official guidance to Congress on the issue. His letter explained: “The Stock Act bars the President, the Vice President, and all executive branch employees from: using nonpublic information for private profit; engaging in insider trading; or intentionally influencing an employment decision or practice of a private entity solely on the basis of partisan political affiliation.”

But the President names the OGE director so once Trump moves into the Oval Office, it might be a good bet that Shaub will be replaced and that his successor will offer a quite different view.

Baird served six terms from Washington’s Third Congressional District before deciding in 2010 that his young family (he and his wife, Rachel Nugent’s, twin boys were 4 years old at the time), was more important than his battles in Congress. There was talk of his being targeted by the GOP if he had sought re-election, even though in his last four re-elections, none of his opponents could muster even 40 percent of the vote.

He says that while his family was the key reason he decided not to run again in 2010, other reasons included frustration over “the growing extremism and intransigence of many in the Republican party” and the “Democratic leadership showing little if any understanding of the concerns for centrist members from swing districts.”

Baird, who gained a doctorate in clinical psychology at the University of Wyoming after graduating from the University of Utah, says of the emerging focus on the STOCK Act and its relevance to Trump:  “I'm just glad people are standing up for the bill now and trying to make sure it has the desired impact.”

But he finds it humorous that the growing attention to the law has brought a number of representatives and Senators who are being quoted about the brewing controversy as Trump’s inauguration nears and describing themselves as author of the law.

“As they say, success has many parents, even if they were nowhere near the conception,” Baird mused in an email to me.

The interviews by CBS reporter Steve Croft with then-House Speaker John Boehner and former Speaker Nancy Pelosi, his unexpected questions making Boehner look like someone hiding from the truth and Pelosi like someone too incompetent to even come across as thinking, should be part of every high school government class. The topic of the lecture in which the You Tube interviews were featured could be titled: “Who elects these people?”

The interviews are now difficult to find on You Tube because you have to subscribe to “60 Minutes.” Too bad.

The controversy over the STOCK Act and the soon-to-be Trump Administration isn’t currently getting a major focus from the media.

But a budding controversy could become a political brouhaha once a new president takes an action that would be illegal under the act.

Continue reading

Why preclude future voter revisit for ST-3?

When American poet John Greenleaf Whittier penned his memorable couplet "For of all sad words of tongue or pen, The saddest are these: 'It might have been!'" it was an ode to the maiden in the field and the nobleman who rode by, noticed her, but decided not to stop. It was an ode to lost love but has become a reference point to remind individuals or groups about lost opportunity.
 
Thus ever since Puget Sound voters, almost a half century ago, briefly met at the ballot a light rail package from which they turned away, the "might have been" has been dangled like a badge of shame whenever a new rail-based transportation package is discussed.

After all, Atlanta got our federal funds and built a light-rail system.

 

 

The might-have-been lament is being played again this year in the Puget Sound area, among other arguments put forth by proponents of $54 billion ST-3, a proposal that would provide a 25-year basically blank check to Sound Transit to create a system that will connect an array of communities across three counties.

 

As posed at the start of his op-ed piece in the Seattle Times, my friend Charles Collins, whose background as a civic leader and transportation expert provide impeccable credentials for the integrity of his comments: "$54 billion. Really? The sheer size of Sound Transit 3 staggers the imagination. A Google search yields nothing remotely comparable ever asked of local voters...anywhere."

 

Collins went on to point out that Sound Transit's own statistics show it won't reduce congestion, despite its election-season claims. "Buried in Sound Transit's original Environmental Impact Statement is a very different story: their own analysis indicated that there would be no difference in congestion whether the rail system were built or not built."

 

One story for an environmental impact statement and another for the voters might seem dishonest. But the fact is, I and most citizens have a respect for the integrity of individual members of the board, each a local elected official in one of three counties.

 

But I'm equally convinced that as a board, the members' candor tends to give way to the group reality that commitment of major public dollars means major income to an array of contractors, architects, professional firms, and so on. And each makes campaign contributions to those board members when they run for re-election to their local offices, which is obviously the main function of each of those elected officials, with Sound Transit board membership a secondary, or supportive, duty.

 

That's why there should be no surprise in the story this week in the Seattle Times that 62 percent of the money for the campaign on behalf of ST-3 has come from contractors, engineers, suppliers, unions and others for whom the $54 billion would be an income and jobs windfall.

 

There are many who have made the points Collins made but I quote him primarily because his views were so cogently stated in his Times' op-ed piece and because, while others may be assailed for having vested interested in opposing ST-3, even proponents of the plan would concede there's not much way to try to question his credentials.

 

Collins, incidentally, was being a little generous in saying nothing similar has been asked of local voters. The fact is that the amount local voters here are being asked to approve with ST-3 is 25 percent greater than voters in the entire state of California approved in 1968 so 800 miles of high-speed rail lines connecting Los Angeles and San Francisco could be built. So the three-county proposal is greater than even the pricetag on the most costly plan put forward in the nation's largest state.

 

The California plan, naturally described to voters in 2008 as "visionary," is to whoosh riders from Southern California to San Fran in an unheard-of two hours and 40 minutes. The trains would reduce air pollution and ease congestion on the state's famously clogged freeways and construction would create tens of thousands of new jobs. So the voters approved $9.95 billion in bonds of the $43 billion plan to usher in a new era of transit for the Golden State.

 

But times have changed, and the recent past has been a rough time for the project. The latest poll shows that 59 percent of Californians would vote against the bonds if they could do it again. Cost estimates have grown from $43 billion to at least $98 billion, and the completion date of the first phase has been pushed back 13 years.

 

If ST-3 is approved and in a few years it becomes obvious that $54 billion and 25 years are dramatic underestimates, which would parallel what is happening in California, the same inability of the voters in this region to rethink what would have become a very bad idea will amount to the same unfulfillable wish to do it over.

 

In fact, there's a double down on the logic of a voter review somewhere, ideally as stages of the project are completed, and that's what Collins and others point to as it being obvious "that we are at the threshold of the most fundamental transportation revolution since the combustion engine."

 

Autonomous, or self-driving, vehicles may provide a chuckle to some, but to companies ranging from Ford to Google, there's full speed ahead with the knowledge that autonomous vehicles will be here with a prominent if not dominant transportation role.

And, as Collins notes in his op-ed piece, "Opinions vary on when self-driving (autonomous) vehicles will arrive in large numbers on American streets, some say in as little as five years, some say as many as 15. No one says 2040, the year ST3 is complete."

 

"What public policies and investments will be required to take advantage of self-driving technology?" Collins questions. "New lanes? Publicly owned fleets? Contracted services with the Googles, Fords and Ubers? But whatever makes sense, it is clear that approval of ST3 rail system will commandeer all reasonably available local transportation funds for a generation and preclude any chance to advance new technology."

 

That's why I find it intriguing, in a most troubling way, to have people I basically respect being absolutely adamant in insisting there's no reason that voters should have an opportunity to review the progress of a $54 billion quarter-century plan at various intervals.

Never mind that it might be an outdated transportation mode in a quarter century.

 

To echo the most compelling of Collins' comments: "Really?"
Continue reading

Key questions to ponder in education-funding battle

 

As legislators and their paid consultants struggle with how to answer the State Supreme Court’s latest education-funding question about determining “competitive market rates” for educators, a couple of thoughts press themselves to the fore as the drama moves toward a final act.

 

First, there’s an unfortunate sense that, in the press by the justices to make it clear to legislators which branch of government is ultimately in charge, what’s emerged is an effort to ensure that financial support of educators becomes the answer to education quality woes. No consideration is given to support for education in a broader sense.

 

Second, the well-worn phrase “You can’t just throw money at a problem” is one that seems to have eluded the state high court in its on-going education-funding struggle with the legislature over how much is enough.

 

At issue is the court’s January 2012 ruling, in what is now known as the McCleary case, that the legislature violated the state constitution by failing to amply fund basic education. Since then the court has found the lawmakers in contempt for not providing sufficient funding and has even threatened to take over the budgeting process (presenting what would seem to an amazing cartoonists’ opportunity).

 

Now the court has told the lawmakers to determine “competitive market rates” in terms of teacher salaries across the state and a final report on that point is due from a legislative consultant in November.

 

After that, lawmakers will try to find common ground on the sum of money required for salaries and where it is going to come from. The Legislature is supposed to take votes in 2017, or in the view of lawmakers in 2018, to put those final pieces in place in what has come to be known as the McCleary case.

 

Comes now the observation of Donald Nielsen, whom I best describe as an education “change agent,” whose views are dramatically suspect and irritating to those who disagree with him because he has no hidden agenda. He’s merely a business executive who made his fortune and decided nearly a quarter century ago to spend his time and money in the next phase of life seeking to make basic education better.

 

Nielsen is not an educator. But he is someone who is passionate about public education and has focused much of his attention on it since the early ‘90s, first traveling the country in search of education ideas that are working, then serving eight years on the Seattle School Board and a final year as president. His book, “Every School,” has brought his thoughts on education reform to the fore over the past couple of years in radio talk shows and newspaper interviews around the country.

 

“Schools do not have a funding problem, they have a regulatory problem,” Nielsen suggests. “If school administrators could spend their existing money as they believe is needed, they would spend it quite differently, and we would get better results.”   

 

His most in-your-face message is that “teachers are not underpaid, they are underemployed. This is not a compensation issue, it’s an employment issues.”

 

“The average teacher in Seattle, in 2013, was making $70,000 a year, employed  for 1320 hours,” he said. “All normal jobs employ people for 2080 hours a year so If that same teacher were employed for a normal year, his or her compensation would $110,300 a year on that 2080 basis.”

 

“Even beginning teachers who start at $40,000 a year are being paid the equivalent of $63,000 year,” he added. “In both cases, the teacher gets a benefit package that no private employer could afford to replicate.”  

 

Neither of these compensations is low,” Nielsen added.  “They are very competitive, and in rural areas, teachers are already among the best paid people in the community.”   

 

Discussion by the justices has never touched on suggesting the lawmakers focus on how the money is being spent, only how much is being spent, which makes another suggestion from Nielsen the kind of thing that at least might be in the discussion hopper.

 

“We need are variable contracts for teachers:  A nine month contract, a ten month contract and an eleven month contract, meaning the latter would make the $110,000 and the former would make the $70,000,” he said.  “Let the teachers decide what contract they want and let the district decide who gets each type of contract,” suggesting that approach could allow for some education options for different students.  

 

Unfortunately, it’s still uncertain whether the final act in this drama will be played out on the judicial or legislative stages since the nine justices of the state’s highest court have pressed the lawmakers, including with a contempt funding, to spend more dollars on education. At issue is the state’s constitutional mandate for adequate funding of basic education.

 

The justices, as far as I can tell, have never mentioned that lawmakers should also consider how the education dollars are being spent and could better education result from more insightful use of the dollars the lawmakers appropriate.

 

Maybe there’s still time, as the lines for the final act are just now being written in Olympia, for the idea of quality of expenditure rather than just quantity of expenditure to be raised.

 

In a case replete with issues relating to powerful education forces focused only on dollars, it might be worth combatants who finally seem hopeful of averting a real constitutional crisis to be aware of an unsettling statistic that Nielsen has included in his book.

In summing up the details of the chart in his book, Nielsen notes: “We now spend three times as much per child in inflation-adjusted dollars as we did in 1970 and we also have four times as many adults in our schools with only eight percent more children. And we’ve had no measurable improvement in academic achievement.”

 

 

 

 

 

 

 

 

 

Continue reading

Sound Transit ballot plan faces emerging challenge

As Sound Transit marks its 20th birthday, it faces the biggest-ever threat to its future in the form of an emerging transportation alternative that may well cause voters in the three Central Puget Sound counties to reject the agency's $54 billion transportation package to allow the alternative time to develop.

Not even in their darkest nightmare would Sound Transit's board and the proponents of its megabillion-dollar ballot measure likely have envisioned the emergence of a growing fervor over a new transportation innovation just as the time for a November voter decision on dramatically extending the rail-based package nears.

The transportation innovation that's attracting increasing attention is autonomous vehicles, previously referred to as self-driving cars, with both automobile and truck manufacturers projecting emergence of fully autonomous vehicles within five years. And the Seattle area is being talked up as the nation's launch region for this development because companies like Google, Car2Go and ReachNow have committed to bring that about.

The challenge facing Sound Transit is that its proposal would put a lock on the region's transportation future for the next quarter century, tying it to a system for which rail is the keystone. By then autonomous vehicles and the congestion-easing result of their emergence might well render rail the transportation innovation of yesterday.

And the uncertainty surrounding the transportation future has created a growing sense, expressed not just by Sound Transit critics but also some longtime supporters, that rather than a full-blown package committing the region to a 25-year plan, a series of packages should be placed before the voters. The most recent example of growing concern over the measure called ST-3 was the Bellevue Chamber of Commerce board's decision Tuesday to oppose it.

Those pressing the idea of sending Sound Transit back to the drawing board would seek ballot proposals in staged packages, with a vote to provide funding for one segment, which would be followed by another vote when that project was completed, and so on. Then at any point, the voters could decide times have indeed changed and no more Sound Transit rail construction is desired.

As one of those longtime supporter put it when I called to get his candid thoughts: "If you are saying the voters should be offered segments of the total plan over a period of years as each prior segment is completed, of course that's logical."

But Sound Transit, officially the Central Puget Sound Regional Transit Authority, formed in 1996 by the county councils of King, Pierce, and Snohomish Counties, is looking to corral all 25 years' worth of funding from voters. There is a clear Sound Transit reluctance to even contemplate going back to the drawing board.

As longtime Sound Transit critic, Bellevue developer and business leader Kemper Freeman Jr., sees it, Sound Transit realizes that ST-3 is likely the last time voters might be willing to consider a mega transportation package with taxes that will hit every property owner in the three counties. Too many things, including transportation alternatives and other uses for that massive property tax amount, are certain to emerge in future years.

Intriguingly, this is the second time in its 20 years that an alternative to Sound Transit's rail focus has been offered. Despite the business and political credentials of the five people who teamed up, a year after Sound Transit began operation, to suggest a lower-cost and more efficient idea than the then-planned $1.6 billion Link Light Rail, the idea was basically brushed aside back in 2000.

The plan was called Ride Free Express, offered by two former governors John Spellman, a Republican, and Democrat Booth Gardner, along with John Runstad and Matt Griffin, two well-regarded business leaders, and Charles Collins, one of the region's long-respected transportation experts.

The plan would have eliminated fares for existing as well an expanded express bus fleet and created vanpools, reducing peak congestion by 5 percent at a price a sixth of the cost of new riders on Sound Transit's Link Light Rail, "even assuming they could build, LINK for the original $1.6 billion," Collins said. A recent Seattle Times analysis showed that in the end LINK wasn't built for that price, actually exceeding its budget by 87 percent.

"All of our projections, including that our plan would attract six times the number of new riders, flowed from well-established and independent market studies or actual transit experience," Collins notes. "Not a single board member except Rob McKenna thought that the issues we raised were even slightly interesting."

"They were committed to a project whereas we wanted to reduce congestion," Collins summarized pointly.

"Nothing has changed," said Collins, whose credentials include having been Spellman's Chief King County Adminstrator, Director of Metro Transit and chair of the Northwest Power Planning Council, the State Higher Education Coordinating Board and the State Commission on Student Learning.

Indeed while Sound Transit operates express bus services in addition to rail and light rail service to the region, there has been little doubt in the community that members of the board view themselves as creators of the region's light rail system.

Sound Transit and its proponents have routinely tried to picture the opposition as primarily Kemper Freeman., since a wealthy Eastside businessman makes an easy target for those Seattlites who view rail as something approaching Holy Grail. 

Collins, with impeccable credentials for public service, business success and transportation expertise, as well as being a decorated Vietnam veteran and retired Army Reserve Brigadier General, makes an opponent who many Sound Transit believers will find it uncomfortable to attack.

"If we are committed for 25 years and a good idea like autonomous van pools takes shape, good luck since the bond attorneys have made sure the money can't be diverted," Collins told me. "And autonomous van pools would be a good idea and could also be an energy answer."

Freeman sought this year to boost his years-long campaign for roads over rails with report he funded called Mobility 21 that outlined a fact-based alternative to the existing long-range plans. He has presented Mobility 21 at an array of speaking engagements around the region. 
Freeman told me the first presentation on the Mobility 21 study was made to officials of the Puget Sound Regional Council, which oversees dispensing federal dollars to the four counties.

"They admitted to us that the idea of autonomous cars had never been envisioned in their 25-year plan," freeman said.

Will autonomous vehicles become an ubiquitous presence on the region's roadways soon? Of course not. But technological advancements, including accident-avoidance devices, in vehicles before that happens will enhance congestion-reductions efforts. And some such technological advances could require commitment of dollars from the public, which would be more difficult to draw out if $54 billion in taxes is still being imposed.

And it's interesting that Daimler Trucks North America CEO Martin Daum talked recently about how he allowed a robotic truck to drive him nearly 25 miles, without his ever touching the steering wheel or brakes. He said his digital pilot used a combination of GPS, map data and sensors to drive the autonomous truck across highways and two-way streets.

And Freeman admitted to me, in one interview, that he has taken a half dozen trips, logging up to 125 miles, both freeway and city streets, with his autonomous Tesla. He said his hands were poised beneath the steering wheel in case his intervention was needed, bur that he never actually had his hands on the wheel.

Freeman and other ST-3 opponents haven't yet been seeking slogans for the final months of their campaign, but given the new realities facing the $54 billion plan, it could be referred at this time as "not a sound plan."
 
Continue reading

Support grows for proposals to create jobs by easing some of investor protections

The mounting pressure on Congress and the Obama Administration to find some job-creating ideas to jumpstart the ailing economy is stirring growing interest in a couple of Congressional proposals that would lessen investor protections for the sake of allowing businesses more growth opportunities.

 

One proposal, already filed as a House bill by Rep. Ben Quayle, R-AZ, with the intent of accelerating the growth of younger companies, would suspend for most newly public companies what many view as a costly and troublesome provision of the Sarbanes-Oxley Act.

 

Quayle's proposal would allow a much greater number of public companies to opt out of Sarbanes Oxley Section 404, which requires public companies to disclose the scope and adequacy of their internal-controls structure. The measure would raise the current $75 million market-value threshold for reporting to $1 billion.

 

The other proposal would help entrepreneurial and start-up companies, many currently  hamstrung in their ability to attract growth capital, to reach large numbers of investors for limited amounts of money via the internet in what's being called crowd-fund investing.

 

The proposals have come to center stage only in the last couple of weeks. And each has attracted growing support from those who contend the measures are vital to the goal of job creation. And each is also starting to stir opposition from those who question the idea of setting aside shareholder and investor protections.

 

Each proposal merits an in-depth look and thus in this first of two columns we'll examine the discussions surrounding Quayle's bill, the support being gathered for it and the comments of those expressing concerns.

 

Next week's column will focus on the crowd-funding proposal, including a look at those backing it and the concern it is stirring from many angel-investor leaders, particularly those up and down the West Coast.

 

Quayle's bill would allow public companies with market valuations below $1 billion to opt out of Sarbanes-Oxley Section 404 for the first 10 years after going public. The original Sarbanes-Oxley Act was amended in last year's Dodd-Frank Wall Street Protection and Consumer Protection Act to create the under-$75 million exemption.

 

Quayle and supporters of his measure, including the entrepreneur-focused Kauffman Foundation, contend that the costs for complying with the requirements of this section of Sarbanes-Oxley can exceed $1 million for new companies and can cost them up to $20 million in loss of valuation.

 

Quayle's measure is close to a plan outlined by the Kauffman Foundation a few months ago as "a set of non-partisan ideas to jump-start the ailing U.S. economy and increase job creation by accelerating the growth of startups and young businesses."

 

Kauffman, the nation's largest non-profit foundation focused on entrepreneurs, noted that the role high-growth startups play is vital to assure U.S. economic strength.

 

"Virtually all of the growth in U.S. jobs has been driven by the formation of firms less than five years old, and these new firms have been disproportionately responsible for commercializing the cutting-edge innovations that characterize modern life," the Foundation said.

 

"I believe this bill is an important step as we  try to increase the number of companies that go public in the United States," said Robert Litan, Kauffman's vice president for research and policy. "The ability to raise capital in public markets will be essential as new companies create the jobs required to put Americans back to work."

 

One of the most pervasively visible proponents of both lowering the regulatory barriers for newly public companies and the proposal for crowd-fund investing is a Miami, FL, entrepreneur named Sherwood Neise, who has testified before Congress about both. He was co-founder of a company called Flavorx, which added flavors to medicine, that went public and was later sold.

 

In 2006, he was among those decrying what he called the "unintended consequences of Sarbanes-Oxley on small businesses," saying that meeting 404's requirements "ate up 14 percent of our net income."

 

But among those urging caution is former SEC Chief Accountant Lynn E. Turner, who said in an e-mail that contained the subject line "Short Memories:" "Clearly people have forgotten the hundreds of billions in dollars of losses investors suffered during the corporate financial reporting frauds, and the tens of thousands of jobs lost."

 

Neil McReynolds, a corporate-governance consultant in Seattle, said that while the original Sarbanes-Oxley requirements created some real cost and regulatory problems for smaller public companies, the changes brought about by the Dodd-Frank bill corrected some of those.

 

McReynolds, who has been a member of a number of boards of private companies and consulted with boards of public companies, said that while extending the exemption to $75 million cap companies, as Dodd-Frank did, made sense, "extending the exemption to $1 billion companies may be a bit of a stretch." He added that "there's still value in disclosure and internal controls."

 

Sharon Philpott, managing partner of national accounting firm BDO's Seattle practice, agreed, saying her firm supports the positions of the CFA Institute, Center for Quality Audit and the Council of Institutional Investors, who have all urged caution against further exemptions from Sarbanes-Oxley.

 

In the end, success or failure of expanding the exemption for internal controls may hinge on whether the pressure for jobs trumps the pressure to protect shareholders and investors.

 

 

 

Continue reading

Spokane mom's autistic children provided lessons that prepared her for new venture

With her three autistic children as her "classroom" for the past decade, Laura Kasbar learned the unique ways autistic kids learn. Now she is ready to launch a business whose video-based web platform will offer parents, schools and health therapists a new tool to harness that process of learning for a dramatically growing number of kids with autism.

 

Kasbar, a Spokane mother of six, including twins Max, who was severely autistic, and Anastasia, who was moderately so, says the new company, called GemIIni (named for the twins), will launch in the first quarter of 2012.

 

Funding for the launch has come from the Spokane Angel Alliance and its leader, Tom Simpson, and an unusual commitment by Spokane's Inland Imaging and its CEO.

 

It was 11 years ago, Kasbar recalls, "that I walked into the tv room and saw all my kids lined up on the couch watching television and I couldn't really tell which were the autistic ones."

 

"At that time, the conventional wisdom was that the television should be off if autistic kids were around. But that experience was the catalyst that made me realize I should be using video to teach them," she said.

 

So over the next decade, with the help of her oldest son, Nicolas, who was on the autism spectrum as Asburgers, she developed the method embodied in the video. Her special focus was to help Max, who doctors told her, when he was four, would never talk.  She says he is now mainstreamed in school and excels in class without an aide. 

 

Now 14 and featured on a GemIIni video, Max has recently tested as having a college-level reading ability, a dramatic advance from his original diagnosis of being a lifelong non-verbal autistic. 

 

Kasbar says all three of her once-autistic children have now been removed from the autism diagnosis.

 

When Kasbar decided earlier this year she and her husband, Brian, were ready to launch the company, she was introduced to Simpson, who formerly guided a Spokane-based venture fund and now oversees the Spokane angel group.

 

Simpson set up a presentation for the start-up company a few months ago and wound up investing, as did some of the angel-group members. The presentation also drew the interest of Steve Duvoisin, Inland Imaging's CEO, who personally invested as well as bringing his company aboard. 

 

"I briefed our 60 physicians after the presentation and their attitude was: 'You mean we can make an investment that will help a lot of kids and could also provide a return on the investment?'," Duvoisin recalled. "It was an easy decision, but I emphasize their focus was on how much help this would be to the kids."

 

The number of children on the autistic spectrum and who thus need the learning help amounts to one in 38, and is growing at an amazing 17 percent per year.

 

"Autism is a very genetic disorder with an environmental trigger," she explained. "There are things in the environment that are the triggers for those genetically predisposed to autism."

 

The range of the autism spectrum, she says, "suggests a range of susceptibility to the triggers."

 

Explaining the role of video as a learning tool for autistic kids, Kasbar noted that the autistic avoid looking directly at a speaker's face and thus lose much of the normal learning process of mimicking articulation in speech. But, she says, they are not uncomfortable looking on-screen personalities in the eye and watching their faces.

 

"I've spent thousands of hours working with families in Europe and in the U.S. over the past three years to perfect the method," she said.

 

She says Nicolas, now 24, and a salsa instructor, as well as a coach of sales teams, helped with actual interaction between the program and the child, adding:"It was very helpful having someone on the autism spectrum work to refine the program."

 

Materials prepared for the marketing of GemIIni indicate it will use a subscription-based model with online computer-based training platform that Kasbar hopes to sell to families with autistic children, but also school districts, independent therapists and treatment centers and health insurance companies.

 

The business model provides for a charge of  $36 per student monthly, a fee that she says testing and surveys indicate is acceptable to parents, who would thus have a way to leverage home-time into therapy time at a reasonable cost.

 

She estimates the total special-needs market, including children with language-related disorders, at 7.8 million. Her target is to reach 50,000 families the first year.

 

"I expect that the company will become a leading provider of therapies for children with autism and other learning disorders," said Simpson, who is providing office space and consults with the Kasbars on marketing and development issues.

Continue reading

Access to growth capital could challenge state life-sciences sector's bright future

Washington State's life-sciences sector has remained, through the economic downturn, a jewel in the state's economic development crown. But the challenge of accessing capital that bedevils the industry's emerging companies, including the possible demise of the Life Sciences Discovery Fund, could hinder future growth.

 

The role biotech and biomedical companies have come to occupy as one of Washington's five largest and fastest-growing sectors, generating tens of thousands of high-wage jobs and more than $10.5 billion in economic activity, creates an important anchor for the state's economic future.

 

But as the Washington Biotech & Biomedical Association (WBBA) prepares for its annual meeting next week, in partnership with The Governor's Life Sciences Summit, there's an ongoing focus on seeking to ensure that emerging companies in the industry find the growth capital they need. And that could be increasingly challenging.

 

"With 70 percent of our companies having 50 or fewer employees, access to capital is the greatest challenge we face," said Chris Rivera, WBBA president.

 
 

 

An important part of that funding has been the Life Sciences Discovery Fund (LSDF), the program created by tobacco-settlement dollars that came into existence in 2008 and has been championed by Gov. Chris Gregoire as a key to fostering more biotech innovations and jobs in Washington.

 

But it has taken deep cuts each session as legislators grappled with yawning state budget deficits, and now could face elimination.

 

Rep. Glenn Anderson, the Eastside Republican who is one of four legislative trustees for the fund, says "it's an open question whether the fund will survive" the next session's budget cuts.

 

"The fund has done a good job of encouraging basic science and marketable, actionable, investable outcomes," Anderson said. "But I'd say there's only a 50-50 chance it will survive and if it doesn't survive, I think that would be shortsighted."

 

Rivera puts numbers on the fund's successes to provide definition to shortsightedness.

 

"LSDF awardees have been able to leverage their grants and bring in $9 for every $1 awarded," he said. "These are real dollars from out of state.  This has led directly to job creation, and great innovation in our state.

 

"I believe that LSDF has proven to be a smart investment by our state into a sector of great current economic value and future potential," he added. "Other states have poured hundreds of millions into life sciences, as they see the potential economic value of this sector and are willing to invest strategically."

 

Beyond the fund, WBBA has mounted some initiatives, as have supporting organizations, in seeking to develop alternative sources of capital, given both the now-challenged traditional lending sources and the problems facing the venture capital industry.

 

Bruce Jackson, vice president for business development at EnterpriseSeattle and ex-officio member of WBBA's board, says that despite the success of the biotech and medical-device sector, these are "clouded times" for young companies seeking to ramp up.

 

"In addition to the fact federal regulations can create a headwind for companies, access to capital for some deserving companies can be difficult," Jackson said.

 

EnterpriseSeattle's year-old partnership with the City of Federal Way in a medical-device incubator called Cascadia MedTech Association is an innovative approach to helping grow the industry, though Jackson concedes "the model hasn't been proven yet."

 

"The companies we're supporting must transition from being supported by grants to creating cashflow," Jackson added.

 

WBBA itself touts the program it created called VIP Forums, through which quality investors and strategic partners (VIP's) are invited to Seattle for a showcase of the most promising life science companies and research opportunities.

 

In addition, in spring of 2009 the association formed a non-profit angel network called WINGS, whose role is to close the early-stage funding gap to speed medical-technology innovation "from lab bench to patients."

 

The gathering of industry leaders and others for whom the industry is part of the economic hope for the future will likely hear an upbeat assessment as they review the WBBA's third annual Life Sciences Economic Impact at their gathering on November 18 at Meydenbauer Center in Bellevue.

 

Comments from the governor, who will be attending her last WBBA annual conference, and University of Washington President Michael Young, attending his first, are likely to focus on upbeat prospects for the sector's future. But both may also share concerns about the impact of funding availability on that bright future.

 

And a comment from Rivera during an interview this week could set the stage for some discussion among attendees: "I understand and know that these are difficult times, but I hope that our state leaders are strategic in where they place our precious resources, and help this state maintain its competitiveness nationally and globally."

Continue reading

Alaska Air's 'Santa One' flight for Spokane area disadvantaged kids is unique fantasy trip

Sixty disadvantaged kids and their personal elves board  Alaska Airlines' flight 1225, dubbed  "Santa One," Dec. 10 at Spokane International Airport for a Fantasy Flight to "the North Pole" on the 737 900 and a visit with Santa. It's an event that could be described as the place where the real magic dust of Christmas has been scattered, because this special trip is unique in the world.

 

The children, between the ages of 4 and 10, are selected from programs for homeless and underprivileged kids in the Spokane and Coeur d'Alene, ID, areas for this once-in-a-lifetime fantasy adventure to Santa's home.

 
 

A number of other airlines, including United and Continental, have been doing the North Pole "flights" in various cities, some for nearly 20 years. But Alaska is the only airline to actually take the kids aloft for their magical trip, in which they pull the window shades down as the flight nears its conclusion, say the magic words that allow them to land at the North Pole, and land at other side of Spokane International Airport.

 

It's there that they're greeted by Santa and Mrs. Clause and an additional host of elves.

 
 

 

"When we send out invitations to the kids, we have them give us a wish list of what they want for Christmas," explains "Bernie" the Head Elf, better known as

Steve Paul, president and CEO of Northwest North Pole Adventures, the nonprofit group that runs the event.

 

 "We take those lists and buy each of them a toy from that list. So as each child tells Santa what he or she wants, Santa can reach into his bag and pull that present out for them," adds Paul "The looks on their faces as he hands it to them is priceless."

 

To ensure that the selection is actually reaching the most deserving children, Paul's non-profit works only with the area's social agencies, which use their selection and screening processes to pull the children who desperately need to create positive Christmas holiday memories.

 

The children are picked up at the Spokane YWCA in the early afternoon and driven to the airport, where each child is given a "passport" to the North Pole and a personal "elf" catering to every need, including a backpack filled with school supplies. Then they board the plane, designated Flight 1225.

 

The flight has priority status with the FAA once it's loaded and ready to fly and "Santa One" comes up on the screen. Then the flight's own personal air traffic controller takes over, Paul said.  "It becomes just like Air Force One in that respect."

 

Paul is an out-of-work tech exec who has made the project his special commitment. As a result of his efforts, what he describes as "the 150 percent support of the community" and the Alaska involvement, the adventure for the Spokane children is brought closer to reality than in any other place.

 

He spends a number of months in preparation for the big day, lining up donations and contributions that this year amount to $150,000 of cash and in-kind, helping get the kids selected and arranging for the elves and gifts for the kids.

 

Brad Tilton, Alaska Airlines president who will be on hand with his wife for the event, says "the Fantasy Flight is an unforgettable experience for everyone involved. It's a

true delight for the children, who don't get to enjoy Christmas like most of us do and who, in many cases, have never had the chance to fly. And our employees,

who eagerly volunteer every year, get far more back than the time they put in."

 

Alaska and Horizon will have more than four dozen employees participating, from various locations on the airlines' systems. Some will be elves. Others will forego days off to work shifts for local Horizon employees so they can be elves.

 

This has been an amazingly off-the-radar-screen event, both during the eight years that United put the kids on a plane that taxied around the airport, and in the four years since Alaska Airlines came to the rescue of the event when United couldn't free up a plane with Alaska proceeding to turn it into a real airborne flight.

 

But that low visibility is changing as the list of kids registered and waiting has grown to almost 250 and media organizations have started to become aware of this special Christmas Season story. And there are some in the Alaska Airlines organization who understand the one-of-a-kind goodwill that this event represents, particularly because neither the company nor the employees has done this for the sake of visibility.

 

Horizon's Spokane customer service manager David Burris admits the visibility has been low key over the years, partly because broader visibility would only bring pressure to make the event bigger.

 

Is there an opportunity for other cities to follow suit with a special North Pole event?  Alaska officials suggest it would be difficult for the airline to take another plane and crew out of regular service during the heavy-travel holiday time. And Paul acknowledges that while he could provide the know-how to another community, he wouldn't have time to actually do another event over the Christmas season.

 

"A lot of people have said we should take this on the road," Paul notes. "I could do that if I could get people to define their non-profit or if our organization were to expand. But this is not some casual party. A lot of planning and time is involved."

 

Paul adds that he is having a movie done "that will in the future characterize the experience. We have a couple of elves who were parents of foster children involved in earlier flights who said the kids were so transformed by the experience that they had to get involved."

 

How real is this trip to the kids? As one elf put it: "If you're a little kid on your first plane ride and your ticket says North Pole, and the shades are drawn, and everyone, including the flight attendants and all the elves are saying the magic words, then who's to doubt that you have landed at the real North Pole? And then you see Santa."

Continue reading

Clean-energy leader Sue Preston dismisses criticisms of loan-guarantee as 'political'

Susan Preston, whose image as a leader in clean-energy investment has grown in her years overseeing the nation's first angel fund for seed and start-up clean energy companies, has reason to look toward 2012 with optimism. And she dismisses the criticism of those who would deter federal efforts to spur such investments as "purely political."

 

Preston, general partner in the nearly four-year-old California Clean Energy Angel Fund (CalCEF), acknowledges the high-profile bankruptcy of solar-power start-up Solyndra may suggest improvements are needed in federal energy-loan guarantee programs..

 
 

"But you don't throw the baby out with the bath water just because some politicians are using the bankruptcy to make political hay," Preston said.

 

"Overall, the government will show a nice profit on the loan-guarantee program," she says, moving on during an interview to things she'd rather talk about, like the successes of CalCEF and the likelihood that she'll focus next year on raising a new clean-energy fund.

 

And she enthuses about the possible resurrection of a tax-break for start-up investors that she conceived and that was gathering support in Congress before the economy went flat.

  

That "political hay" that Preston calls "purely political" has been made over the last couple of months by Congressional Republicans over the bankruptcy of Solyndra, a Fremont, CA, solar-panel maker. It was treated  by the Obama Administration, including a visit by the President himself, as the poster child for investment in renewable energy.

  

Solyndra was the first beneficiary of the federal loan program and, as a company with new technology and support from a group of venture-capital firms, it seemed to be an ideal candidate for visibility.

  

Thus when the company went bankrupt this past September, defaulting on a $528 million federal loan, Republicans seized the opportunity to make it the poster child for what they viewed as excessive Obama enthusiasm for alternative energy.

  

 "The loan guarantee program from which Solyndra received money has a number of other companies in the program, the vast majority of which are involved with project financing of large, utility-scale facilities with 20 to 25 year power purchase agreements," Preston said.    

 

In fact. the U.S. Department of Energy web site indicates the federal agency has made $35 billion in loans and created almost 65,000 jobs as a result.  

  

"If you want to talk about wasted money, let's look at the billions and billions of dollars spent on defense technology which completely fails," she added.

  

Preston, while a partner in a major Seattle law firm, helped guide the launch of the nation's first women's angel group, Seraph Capital, in Seattle in the late '90s. And in a six-year stint as Entrepreneur-in-Residence for the entrepreneur-focused Kauffman Foundation, she became a widely recognized expert on angel financing, including authoring numerous articles, white papers and books on the topic.

  

It was that angel-financing expertise that resulted in her invitation in 2008 to guide the launch of the CalCEF Clean Energy Angel Fund, for which she proceeded to raise $11 million to invest in early-stage clean-energy companies. The angel fund was launched by the California Clean Energy Fund, a non-profit that hired Preston to create the angel fund and then became a limited partner in the for-profit CalCEF.

  

Preston is confident the political flap won't have a negative impact on either the CalCEF angel fund, or in a new fund she expects to begin raising money for early next year.

  

At this point there has been no official announcement on plans for the second fund, which she says will be "much bigger" than the current fund's $11 million, adding that while "we have not come to complete agreement on the name, it will likely be CalCEF Clean Energy Ventures."

   

Despite the financial challenges that have prevailed almost since CalCEF was launched, it has produced a positive return on investment with its four fundings, which averaged about $750,000, Preston said.   

 

Although Preston emphasizes that there are no geographic restrictions on investments by the CalCEF angel fund, "on a practical basis, and because of the strong prevalence of clean energy companies in the Bay Area, we have not made an investment outside this area."

 

But she notes that she and her partners "have been to several other places in California, and elsewhere in the country, to explore possible candidates for investmernt."

"Clean energy has seen a bounce back in the last 18 months and at a greater rate than some other technology sectors," Preston said, adding that "within clean energy, certain areas are performing better than others when you look at global indexes.  For instance, wind is down, but smart grid related technologies are performing reasonably well."

  

Asked what kind of energy startups are likely to generate the most interest over the next couple of years, Preston responded: "Energy efficiency, smart grid and storage are my bets."

  

"Grid storage will be an interesting area to watch because the problem with wind power is that the wind blows more at night while most of the needs are during the day," she said. "We are really in need of storage technology."

  

Preston is enthused that a proposal she put together about four years ago for an income tax credit for investors in start-up companies, an idea that drew bi-partisan support in both houses of Congress before the economic chaos shunted it aside, has seen a revival of interest in recent months.

  

The Access to Entrepreneurs Act (ACE) may move forward this coming year, she says, but it will have to be without her assistance because the first priority will be launching the new fund while continuing to oversee administration of the CalCEF fund.

  

"Our goal is to do well while we are doing good." Preston says.  "Our first priority is to make money for our LPs, but because we invest in clean energy, we get to do good at the same time."

Continue reading

Veteran auctioneer Kip Toner says benefit auctions ever more vital for charities

To those who think that benefit auctions for charitable causes may be losing their appeal, Kip Toner, who for more than three decades has been in the business of getting folks to raise their paddles, has news for you.

 

Toner, who's KTBA, Inc. (Kip Toner Benefit Auctions) is 20 years old this year, says auctions have become an increasingly important part of charitable organizations' annual fund raising efforts. And he predicts that the importance and the number of auctions will continue to grow for those non-profits, perhaps even because of the current economic challenges.

 

"Because of what's happened in the economy over the past four years, auctions have become increasingly important for charities because other sources of revenue have declined significantly," Toner observed. "A number of those charities have come to us and said they simply need to have their auctions produce more than in the past."

 

It was in 1991, after 15 years learning all aspects of the auction business with the James G. Murphy Co., that Toner launched his own company in Seattle and proceeded to grow the enterprise into an auction company that does business across the country.

 

Toner sees two trends that he expects will dramatically increase the importance of benefit  auctions in the future. One is the growing use of handheld devices for bidding. The other is the increasing presence of what he calls "consignment items" -- items for which the donor and the charitable organization  split the amount of the winning bid.

 

Referring to the advent of bidding with handheld devices, Toner says: "The trend will increase the bidder pool against a fixed number of items and that will certainly increase the price for each item."

 

The emergence of handheld devices for bidding is part of what Toner sees as "the challenge auctions have in front of them to update their appeal to a new generation." He adds that the way handheld bidding fits into a more fun environment is that attendees don't have to pay as close attention to the front-of-the-room action when they can track bidding on their device.

 

Despite the challenges, the number of auctions is actually growing rather than declining, Toner notes.

 

"Some organizations have stopped doing auctions," he says. "But for every one that is dropped 10 emerge. There is almost an unlimited supply of items for auctions and coming up with new and unusual ones is merely a matter of creativity."

 

Toner's company did 105 auctions last year, with he doing at least one a weekend at auctions extending from New York and Washington, D.C., to Hawaii.

 

Asked about how much money his auctions generate for various charities, Toner said the last year they tried to calculate the total charity take was 2007 when "the auction revenue the charities actually took in was $16 million," he said. "That was the amount actually earned at the auctions from the live and silent segments, fund an item and other sales such as raffles."

 

As a result of the expected growth in auction numbers, Toner says more and more people are seeking to get into the auctioneer game. That has prompted the national auctioneers association to create a recognition of the formal title Benefit Auctioneer Specialist and ask Toner to write the curriculum and teach the classes for those who want to qualify for that ranking.

 

Toner credits the late Dick Friel, who with wife, Sharon, were the beloved team at many Seattle-area auctions, with bringing humor to the auctions.

 

"Dick was great because he taught us all about the importance of  humor in the auction, he showed us how to be entertainers as auctioneers," Toner added.

 

Two items that Toner says are growing in popularity are parties at the local fire station and small-plane flights put up by the owners of the planes.

 

"Firefighters love to have people come to the station both because they inevitably get a few minutes to do a fire-safety talk and because those attending the party usually bring the food, and leave the leftovers behind," Toner said with a smile.

 

"The private-plane trips are frequently bought by people who want to take out-of-town guests up because it's a great way to see the Northwest in all its glory," He adds.

 

Asked about what makes a successful auctioneer, Toner emphasized: "you have to make it about the attendees, not about the auctioneer, and that includes thanking people by name.That isn't really difficult since I have a sheet with a name after each bid number," Toner pointed out.

 

He recalled doing a recent art auction in New York where all the attendees were Spanish, adding that he spent advance time learning how to pronounce each name. "I'm not positive I got each name right, but they appreciated the effort."

 

What's the largest pricetag he recalls for an item? Toner says it was likely the $650,000 paid by an auto dealer who outbid several other challengers for the opportunity take his customers on trip aboard the cruiser of a well-to-do North Idaho business person.

 

"In the end, the winning bidder decided instead to take all the competing bidders," Toner chuckled.

 

When the 68-year-old Toner was asked how long he might continue at his current pace, given continued good health and energy, he said he's done 23 years of auctions for Georgetown Prep in Washington, D.C., and 20 for Pilchuck Glass. "I'd like to reach 25 with each before I think about retiring."

Continue reading

Achievements of deceased astronaut focus of program for at-risk kids

Nine years on from Michael P. Anderson's death on the ill-fated space shuttle Columbia, the fund-raising effort to ensure continuation of the annual program at Seattle's Museum of Flight aimed at inspiring at-risk children of color to dream big dreams is nearing its final stage.

 

In fact, the effort launched for a hometown hero by Spokane business leaders following the Feb. 1, 2003, shuttle disaster, along with the major assist from African-American pilots of Alaska Airlines and a financial commitment from the airline itself represents fulfillment of a big dream in its own right.

  

 
 

 

As the Museum of Flight prepares to host the third annual Michael P. Anderson Memorial Aerospace Program on February 4, final selection is in progress for the group of 10-to-14 year olds who will receive support from a special fund to attend the day-long session.

 

The goal of the program has been to create an enduring memory of Anderson and to make his achievements an object of aspiration and inspiration for young people, particularly the African-American students who would seek to emulate him. It's intended to help inspire an interest in science, technology, engineering and math (STEM) education and careers.

 

Avista Corp. CEO Scott Morris, motivated in part by the fact Anderson's father was an Avista employee, assigned the firm's director of community development, Anne Marie Axworthy, and communications manager Jessie Wuerst lead roles in the project, with a goal of  raising funds for a statue of Anderson in his hometown. That was soon after the shuttle disaster. But with completion of the larger-than-life bronze statue in Spokane in 2005, the vision expanded.

That meant doing something on the west side of the state and that led to a focus on a second statue at Seattle's Museum of Flight, which was dedicated in June of 2009, as well as a program to bring African-American children an awareness of Anderson and his accomplishments. That led to the creation of the Michael Anderson Memorial Aerospace Scholarship for Children of Color, which is administered by the Museum of Flight.

 

The campaign to raise the final $50,000 to ensure that the Museum of Flight program and the scholarships continue will also get a boost next month when the person credited with being the key figure in making the Seattle portion of the program a reality retires from the Air Force and returns to Seattle.

 

Maj. Gen. Harold L. "Mitch" Mitchell, Deputy Inspector General of the Air Force in the Office of the Secretary of the Air Force, retires this month after two years on active duty and will resume his role as an Alaska Airlines pilot, which is what he was doing when he was first approached about involvement.

 

"The goal has been to do more than merely put up a statue," Mitchell explained in an e-mail exchange this week. "It's important to leverage Anderson's legacy to help students have a chance to do similar things."

 

In an effort to put together a group to focus on the goal, Mitchell turned to other African-American pilots at Alaska, then realized "we needed some funding to make this happen so we thought it was an idea worthy of sharing with the company."

 

He says they didn't expect Alaska to be as supportive as it was, but the airline agreed to put up $100,000 as matching funds over four years.

 

"To be honest, we've struggled on our side of the match, but they have been outstanding," Mitchell said.

 

Wuerst of Avista said the campaign has raised $190,000 thus far and needs to raise a final  $25,000 to get the last $25,000 of the Alaska match.

 

Anderson was 43 when he and the other six crew members of the Colujmbia crew perished as the shuttle broke apart on re-entry.

 

But in an interview from space earlier in the 16-day  mission, Anderson expressed a thought that became the quote on the plaque on each statue: "This is what I wanted to do since I was a little kid.  If you apply yourself, work hard to be persistent, and don't give up, you can achieve anything you want to achieve." 

 

It's that commitment that supporters of the Museum of Flight program hope to bring to a growing number of children of color from all parts of Washington State.

 

Continue reading

Demise of redevelopment agencies looms in the state of big challenges

There's nothing that could make residents of places like Washington, Oregon or Montana feel better about how their states are being run than to be plunked down for a few weeks in California and get an amusing and bemusing look at the dysfunctional workings of the nation's most populous state.

  

Everything about California is big, and that includes the massive budget deficit that has been the focus of governor-again Jerry Brown since he was sworn in a year ago as the literal political-comeback kid.

  

Now comes what may be the biggest challenge ever faced by local governments and economic-development entities in California. More than 400 redevelopment organizations around the Golden State are scheduled to go out of existence on Feb. 1 and some of their financial obligations will be absorbed into the general funds of local governments in those areas where the EDAs now exist.

  

Part of the predicted fallout will be that states like the aforementioned Northwest ones will be cranking up their California recruitment efforts looking to woo businesses away from a place where they don't seem to be wanted.

  

That would be an unfortunate misimpression about California because local communities and economic-development organizations across the state strive mightily to create jobs in their areas with innovative ideas and initiatives, despite the image the state policies have fostered.

  

Four of the largest redevelopment agencies in California are all in the job-hungry Coachella Valley. Those are La Quinta, Indian Wells, Rancho Mirage and Palm Desert - communities well known to Northwesterners who trek south to the desert each winter in search of sun.

  

Redevelopment agencies provide funding for road, sewer, lighting and affordable-housing projects across the state under a 65-year-old law that allowed a city or county to create a redevelopment area to address urban blight. RDAs receive related property-tax revenue increases, known as tax increments.

  

All this chaos came about because a legislature-approved plan conceived and proposed by Brown sought to coerce the RDAs to give up $1.7 billion in increased property-tax funds if they wanted to continue to exist. It was branded the "pay-ransom-or-die redevelopment system" by the California Redevelopment Association.

  

Part of the reason that the governor and legislature viewed the RDAs as a good place from which to divert revenue is that for all the good works done by the RDAs in creating opportunities for developers to invest in communities and transform downtrodden areas, examples of excess and abuse occurred.

  

To be sure, there have been blatant instances of excess on the part of some RDAs as eminent domain was sometimes used to seize private property that was then transferred to developers along with cash subsidies.

  

But even if sometimes developers seemed to get deals that smacked of favoritism,

many local officials and economic-development leaders would contend that the RDAs usually fulfilled their promise of revitalizing decaying communities and creating jobs.

  

Billions were invested over the decades to dramatically rebuild dilapidated downtowns, creating millions of jobs for Californians and hundreds of thousands of low-income housing units for growing numbers of homeless families.

  

Defenders of the value of redevelopment might logically suggest that killing RDAs is a little like saying examples of Medicare excess or fraud mean that Medicare should be abandoned.

 

During his first stint as California chief executive, Brown's mantra involved a focus on creating lower expectations for his state's citizens. In this new era of spending realities, he's being forced to impose lowered expectations rather than just urge their acceptance.

 

Part of his implementing lower expectations by fiat was to have local development entities settle for less and divert their funds to education, roads and fire departments as he sought to balance priorities while dealing with the $20 billion deficit.

 

The California Supreme Court, in a two-part decision, ruled late last year that the state had the right to kill the agencies. But it didn't have the constitutional right to condition their continued existence on their agreement to pay the state an annual fee based on their portion of property tax revenues.

 

So, unless there's an unlikely 11th-hour reprieve by the legislature, which even the governor's allies say he doesn't seem interested in achieving since it was the RDA organization that took him to court, the RDAs close up next week.

 

So what happens then? The real estate assets of the RDAs need to be sold off. But some obligations of longer-term nature that must be satisfied will become the obligation of city general funds.

 

That's likely to be the start of an extended period of financial uncertainty for cities and counties, as well as for the real estate market that will be flooded with several thousand commercial properties that will need to be sold at fire-sale prices.

 

George Skelton is a Los Angeles Times' political columnist who joined the newspaper the same year Brown was first elected in 1974 and thus has the unusual perspective of having covered both Jerry Browns.  

   

Skelton was a long-ago political-writing colleague at United Press International before he joined The Times so I emailed him last week to ask if we could visit about "the two Jerry Browns."

 

He followed up by writing a column on the subject following Brown's second State of the State address. Skelton recalled Brown's 1976 State of the State as "best remembered for one depressing, if prophetic, line: 'We are entering an era of limits.'

 

The state's current situation is clearly an immersion in an era of limits.

 

The now-73 year old Brown, during his 1974-82 tenure, was tagged as "Governor Moonbeam" for proposing that the state develop its own communications satellite.

 

Skelton says the old "Gov. Moonbeam" still exists. And Brown certainly proved that's true when, despite the financial travails of his state, he made it clear that reduced expectations don't apply to his unwavering support for a $100 billion bullet train from San Francisco to Los Angeles.

 

Brown summed it up with: "government should pursue ambitious ventures even during times of economic strife."

 

Local economic-development leaders might well shake their heads in frustration, agreeing with the premise of a state that needs to be "ambitious" in times like these, but not in pursuit of a bullet train.

Continue reading

Healthcare uncertainties retard efforts to expand cancer 'compassionate care'

The uncertain future course of national health care is retarding fledgling efforts to expand what's known as "compassionate care" for cancer patients as hospitals in Seattle and elsewhere are proving reluctant to launch new cancer programs that drain rather than enhance revenue.

 

Matt Loscalzo, who helped develop the concept of "psychosocial" programs as the underpinning of "compassionate care" for cancer patients and their families, laments that major hospitals around the country have been reluctant to incorporate it into their treatment programs.

 

But Loscalzo. executive director of the Department of Supportive Care Medicine at the respected City of Hope in Duarte, east of Los Angeles, is careful not to criticize the major hospitals, including those with highly touted cancer-care programs, for failing to move toward psychosocial treatment programs.

 

"All hospitals and institutions are holding their collective breath over the challenges they face," Loscalzo says. "These hospitals represent a lot of good people under a lot of stress. First they have to keep the lights on, then attract good people, then meet a tremendous amount of regulation, insurance challenges and Medicare cutbacks."

 

Loscalzo is a pioneer nationally in the development of  psychosocial programs and he has guided development of a touchscreen tablet that allows cancer patients to deal with the mental and emotional issues beyond their medical problems.

 

The device, called SupportScreen, is a cornerstone of City of Hope's leading-edge focus on compassionate care. The device, which is programmed specifically for each patient, is designed to electronically record distress levels, through answers on touchpads, by asking cancer patients to identify and rate their practical, social and emotional problems along with medical information.

 

Patients reveal concerns that might otherwise go unrecognized, such as mental health imbalances, stresses over personal finances or insurance coverage concerns, or suicidal thoughts.  The information, which the patient knows will be shared with the entire healthcare team, allows that team to immediately provide integrated treatments and crises interventions.

 

And because of the efforts of a philanthropic couple who maintain residences in both Los Angeles and Seattle, visibility for SupportScreen will be coming to Seattle and, with it, a heightened awareness of what compassionate care actually means to cancer patients' outcomes.

 

Loscalzo's other role at City of Hope is as administrative director of the Sheri and Les Biller Patient and Family Resource Center, created nearly four years ago through the vision and financial support of the Billers to create an international model of compassionate care. His psychosocial program, including, the touchscreen tablet, is a major part of the Biller Center's unique offerings.

 

The reach and influence of the Billers has given Loscalzo's efforts a major boost. Sheri is chair of the City of Hope board and Les is retired vice chair of Wells Fargo and current board chair for Spokane-based Sterling Savings.

 

Loscalzo's goal is to move the psychosocial program concept, complete with the SupportScreen, into the mainstream of cancer care, expanding its reach well beyond the handful of cancer hospitals where the program is now being introduced. The only other one in the West, in addition to the City of Hope, is the Huntsman Cancer Institute in Salt Lake City, which Loscalzo describes as "a fairly new center that is really trying to get is program up and running."

 

"The number of cancer survivors nationally is nearing 12 million and for them, psychosocial is going to be a part of the rest of their lives," Loscalzo says. "There are humanistic and financial costs for ignoring the psychosocial needs of patients and their families, as well as of cancer survivors."

 

In the nearly four years since their philanthropy allowed the Biller Center to open, the Billers have made the City of Hope's focus on compassionate care, including the SupportScreen, their cause.

 

It was because of a friendship with the Billers and a personal interest in the cancer initiatives there that I was able to get a first-hand look late last year at the programs of City of Hope and its almost unique focus on compassionate care. thus I had a chance to meet key players there, including Dr. Michael Friedman, who is president an CEO, and Loscalzo.

 

Because the Billers are givers, they share the willingness of all practiced philanthropists to also be askers, tapping friends, colleagues and associates to support their cause with personal involvement and financial support.

 

For three years, Sheri Biller's "ask" has been on behalf of a team of what she calls "Resource Racers" in an all-women's half marathon in New York City to raise money to augment the basic support for the Biller Center at City of Hope that's provided by the Biller Family Foundation.

 

This year, the call has gone out from both Sheri and Les Biller for "generous" contributions to her Resource Racers, including men as participants for the first time, for the Rock 'n Roll Marathon/Half Marathon in Seattle in late June. The donations this year will go specifically to expand the use and the number of SupportScreens available to City of Hope's cancer patients.

 

That may well bring visibility for the first time to cancer-care supporters in the Northwest, who may legitimately ask "why not here," given the cancer-care reputations of major hospitals in Seattle and Portland.

 

Meanwhile, Loscalzo's vision is to develop a touchscreen specifically aimed at children suffering from cancer. But that may be a ways off.

 

"We want to incorporate things like animation into the software of the SupportScreens we develop for youngsters," Loscalzo says. "A rough estimate is that we'll need about $1 million for development of those children's screens."

Continue reading

Early lessons helped shape Ayer's style in guiding Alaska's through turbulent times

If a company deserve to be judged by the leader it keeps and leaders by the companies they build, then Alaska Air Group and its chairman and CEO Bill Ayer should be judged well.

 

Ayer, 57, who steered the company for the past decade through an increasingly successful flight while for the rest of the "legacy" airlines the 10 years proved an image-scaring and scary ride, has announced that he is officially turning over the CEO reins to Alaska president Brad Tilden.

 
 

Ayer, who has spent more than 30 years in the industry since launching his own little start-up airline in his mid-20s, offered some reflections this week on his career from entrepreneur through leadership of the nation's seventh largest airline. And those reflections by its leader, shared in an e-mail exchange of questions and answers, indicate why Alaska has remained a favorite of investors, its customers and its communities.

 

Two of Ayer's convictions are that you learn from, rather than make fun of, your competitors and that a small-company feel makes it easier for employees to work together and be open to change, no matter how big the company.

 

The former is perhaps best exemplified by an email exchange we had several years ago after Ryanair CEO Michael O'Leary suggested his lowest-cost Irish airline (frequently also referred to as the cheapest airline) might consider charging for use of airborne restrooms.

 

I suggested to Ayer that it might be time to revive the amusing television ads from years ago that showed the travails of a passenger who needs a 25-cent fee for entry to his plane's restroom and proceeds to try to obtain the quarter for an increasingly high price from passengers on the plane.

 

"You never want to make fun of competitors' actions because you never know what steps you might be required to take yourself," he e-mailed back.

 

I asked him this week about that exchange and his reluctance to criticize competitors.

 

"Sometimes what seems like a lousy idea from a competitor turns out to be pretty

Smart," he replied. "If we have a 'we're better than you' attitude, we won't take the time to evaluate it.

 

"Our focus has been on controlling what we can control and not simply hoping that something bad happens to a competitor to improve our situation," Ayer added. "We were surprised at how controllable our business was once we started to really focus on what we could do differently."

 

The fact that Ayer was an entrepreneur, then executive of a fast-growing start-up airline before joining Alaska in 1995 as vice president of marketing and planning has undoubtedly guided his belief in the need to retain a small-company feel.

 

He was in his mid-20s, a regional manager for Piper Aircraft Co., when he launched Air Olympia, a small commuter serving several Washington cities that operated for two years.

 

He jokes that "we didn't go broke, but probably would have if we had stuck with it."

 

Instead, he was lured to close up his little carrier and join the late Milt Kuolt and his team at the fledgling Horizon in 1982, the relationship that eventually led to Ayer's role atop the parent company of both airlines. Alaska acquired Horizon in 1987, along with Ayer.

 

Bruce McCaw, a Kuolt confidante and one of his key advisors, recalls that "Milt was quite impressed with Ayer, even though he was very young at the time. He knew Bill was smart and had a lot of good ideas."

 

"I liked Bill from the moment we met and we worked well together," McCaw recalled.

 

Ayer remembers Air Olympia as "a great place to start, although it felt like a leap into the

deep end of the pool. That experience convinced me that I had a passion for

this business which I should pursue."

 

He recalls the days with Horizon as "difficult. We were always worried about having enough cash to make payroll. But (it) shaped our conservative approach."

 

The shaping of that financially conservative approach undoubtedly helped guide Ayer's decisions as he steered Alaska basically unscathed through a decade of airline-industry turbulence that saw all of its legacy competitors go through bankruptcy.

 

So now Ayer turns the reins over to Tilden, expressing the conviction that "a CEO can overstay his or her welcome" and "there should be different leaders for different times."

 

He and the Alaska board, which Ayer says he's had involved over the past couple of years in the planning of the transition to Tilden, view him as "exactly the right leader to take us to the next level." The skills that Ayer and others see in Tilden may indicate that a company is also judged by the leadership-successor it picks.

Continue reading

Reflections on a quarter century of Business Hall of Fame selections

When the Puget Sound Business Hall of Fame was created 25 years ago to recognize business leaders from the past who had contributed to the economic growth of the region, some quietly expressed concern that the event might soon run out of past leaders to honor.

 

A quarter century on, as Junior Achievement of Washington and Puget Sound Business Journal prepare to induct four new laureates into the Hall of Fame, it's become clear that the region had no shortage of business leaders to celebrate.

 

In fact, while the event retains the name "Puget Sound," it has grown in the past couple of years to include Eastern Washington business leaders among those eligible for selection.

 

Thus at a time when the quest for heroes in business is perhaps more important than it has ever been, the number of business leaders chosen over the years to be honored at this unique annual event passes 100 Thursday evening when the following four laureates are inducted:

 

 Jim Douglas, who created Northgate as the nation's first shopping center designed as a mall, helped launch Seafair as part of the celebration of Seattle's 100th anniversary and and became the "pitchman" for the vision that became the Space Needle, symbol of Century 21.

 

Edie Hilliard, A radio pioneer as one of the first female general managers of a major market station, who then built one of the nation's largest independent radio networks.

 

Budd Gould, founder and principal owner, and still president, of Anthony's Restaurants, who brought the essence of waterfront dining to communities from Bellingham to Spokane and Richland to Bend.

 

William Ruckelshaus, perhaps the nation's leading environmental figure of the past half century. who served two presidents as administrator of the EPA and also fashioned a career in the private sector as CEO of Browning Ferris Industries and senior vice president of Weyerhaeuser Co. He now is strategic director at Madrona Venture Group.

 

It was the late Jack Ehrig, Seattle ad-agency head and a key supporter of Junior Achievement, who in 1986 approached me, as publisher of PSBJ, about creating a local event that would parallel the national Business Hall of Fame event for which FORTUNE Magazine was the partner of JA.

 

FORTUNE chose the laureates for JA to honor in those years, producing a special insert in the magazine to introduce them to its readers and JA honored the national laureates at a prestigious annual banquet that cities competed for because it attracted some of the biggest names in business nationally.

 

In a similar manner, laureate selection became the role for PSBJ and JA produced the first banquet to honor those selected in 1987.

 

FORTUNE's rule was that honorees had to be retired from day-to-day involvement with the companies where they had built their reputations. That sounded to me like a good way to ensure there wouldn't be any lobbying on behalf of a currently active CEO so that became our rule as well. That also has changed a few years ago with the induction of Eastside business leader and developer Kemper Freeman, still very much active in his business.

 

From the outset, I populated the selection committee with people who were not only business icons in their own right, but also understood far more about business history than I did. Thus each annual selection gathering became a lesson in local business lore.

 

And it was the insight of those members of the selection committee, including from the outset longtime community and business leader Jim Ellis, who personally knew more than half a century worth of the prospects, that brought forward well-known and not-so-well-known names from the past.

 

Because of the prominence of JA Seattle in the national organization, particularly because we had built what many viewed as the best local hall of fame program in JA, it became logical for the Seattle JA leadership to seek to have the national event in Seattle.

 

That finally occurred in 1992, which happened to be the year that Steve Jobs, then between jobs since he had been edged out of Apple a few years earlier, was a laureate. But Jobs, with typical unpredictability, apparently decided he didn't care to head up to Seattle from Silicon Valley for the event and the word spread the day of the banquet that he wouldn't be there.

 

But by late afternoon, to the relief of all, it was learned that Jobs had changed his mind and would, in fact, be on hand to accept his award. Only a few insiders were aware that FORTUNE publisher Jim Hayes, a high-visibility figure at the national banquet, had telephone Jobs to advise him that if he failed to show up, his name would never again appear in the magazine.

 

The business leaders of JA Washington in 2008, led by longtime venture capital executive Woody Howse and wine-industry leader Michael Towers, began building a case for the return of the national event to Seattle.

 

But it soon became clear, as the Great Recession got its grip on the nation's financial throat, that the world had changed. National gatherings of business leaders for something like a Hall of Fame banquet, and the significant corporate financial support necessary to carry it off, soon seemed unrealistic. None has been held since then.

 

But the JA Puget Sound Business Hall of Fame remains a viable and important reminder each year of the role successful business leaders can play in representing role models for the business leaders of today and the young people of JA who will be the business leaders of tomorrow.

 

Continue reading

Supporters of crowd funding for startups must await SEC rule-making process

Now that the so-called crowd-funding measure has whipped through Congress with a speed and level of bipartisan support unheard of in recent years, the effort to make it fulfill its promise of creating new companies and jobs begins. And that may prove more challenging than its passage.

 

Before any entrepreneur with a can't-fail idea rushes to the Internet in hope of attracting a crowd of investors, the Securities and Exchange Commission must first set the rules on how provisions of the law will be permitted to play out. The agency has 180 days to fulfill those duties.

 

The legislation, called the Jumpstart Our Business Startups Act (JOBS) will dramatically expand the way new companies can raise money and the reduce the oversight for smaller companies doing initial public offerings.

  

After quick congressional approval last week, President Obama, who admits he first learned about the proposal in early March, will be signing the bill Thursday.  

 

Supporters view it as a major breakthrough for funding entrepreneurial startups and thus eventually creating jobs. Critics are convinced it is a funding disaster in the making. Both will have to wait to see what the SEC comes up with.

 
 

That process that will draw its own critics as it unfolds and the fact it's now in the SEC's hands will likely create some apprehension for friends and opponents alike.

 

More than a few cynics have suggested that the bill's acronym, JOBS,  is a key reason few in Congress dared oppose it despite a lot of whispered reservations.

 

What the bill seeks to achieve is the opportunity for people (crowds) to organize via internet websites to fund companies. Using the internet to raise money is a process that's long been utilized for charitable and entertainment purposes.

 

 The crowd funding approach would open the way for people to invest as little as $500 and up to $10,000 in startups, eliminating the long-time steep financial requirement for investors, other than what's known as "friends and family" investors.

 

The kind of hype that has marked the rapid progress of this legislation through Congress is nowhere better displayed than on the website of Crowdfunding Offerings, which pitches its ability to provide an investment platform for "the crowd."

 

So here's the firm's pitch:

"Crowdfunding investing will allow start-ups and existing businesses to raise funds for their companies directly from the public who will invest small amounts of money in return for shares in the company. Americans will finally have the opportunity to invest in ways that have historically been reserved only for the wealthy. Together, America's entrepreneurs and investors will launch the next great ideas of our time!"

 

When I write occasionally about angel-investing issues, I turn to friends from Montana to California who are leaders among angel investors, with an occasional venture capitalist thrown in. Their collective insights inevitably create a better understanding of the issues, but disagreements among them frequently abound. And so it was with the crowd-funding measure.

 

The most vocal and opinionated among my angel friends on this issue is Bill Payne, who summers in the Flathead Valley of Montana and winters in the Las Vegas area. Payne, who gets to a conviction about his views because of the respect he receives from angel investors across the West and beyond, describes the bill as "a train wreck waiting to happen."

 

"Lots of investors will get scammed," Payne suggests. "Just give it a couple of years and Congress will be asking the SEC how they ever let this happen!".

 

Mike Elconin, San Diego-based leader of the major Southern California angel-investor organization Tech Coast Angels, sums up a concern that even some proponents share.

 

"The danger is that this new law will engender an expansion of boiler rooms in which slick sales people convince unsophisticated investors to put money into companies at highly inflated valuations," says Elconin. "Whether you think this is a problem for government to prevent, or a matter of buyer beware, depends on your political philosophy."

 

Dan Rosen, a respected Seattle attorney-investor and a policy director for the Angel Capital Association (ACA), is among those who supported the legislation and helped author an ACA internet post to help inform angels on the bill

 

Rosen, at the invitation of the White House, will be on hand at the bill signing Thursday. 

 

Liz Marchi, who presides over the Kalispell-based Frontier Angel Network, frames why many supporters have looked beyond those concerns at what many perceive as the underlying importance of the legislation.

 

"While there will inevitably be some hiccups in the execution of crowd-funding, I think it's a major breakthrough for early stage seed capital," she said.  "Congress has certainly allowed some risk with this bill, but it drives private capital down the food chain where it is desperately needed to seed innovation."

 

Tom Simpson, former venture-capital leader who now heads the Spokane Angel Alliance, sees the new law as "not perfect, but a step in the right direction."

 

"But I agree with Payne that the more investors a new company has, the more the likelihood for problems," he added.

 

Republican Sen. Scott Brown of Massachusetts, who conceived the measure, offers perhaps the most compelling argument in favor of it.

 

He explained that the long-time practice of people funding their new businesses by mortgaging their homes is basically no longer possible. So a new source of start-up capital was necessary, particularly in the face of the disappearing hope of bank financing.

 

My own sense is that the typical congressional supporters of the bill went through the following conversation with themselves:

 

"Job creation is so politically important today that if it costs investors a few thousand dollars each down the road, it's worth it. Somebody has to pick up the tab for creating jobs and we certainly can't. Poor people buy lottery tickets all the time taking risk far greater than investing in a start-up company. So let's get on with it."

 

Continue reading

52°F

Seattle

Mostly Cloudy

Humidity: 63%

Wind: 14 mph

  • 24 Mar 2016 52°F 42°F
  • 25 Mar 2016 54°F 40°F
Banner 468 x 60 px