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Reflections on a time when Cold War fears and strange characters they spawned stirred nation

(Editor's Note: The following reflections of secret nuclear-strategy meetings in Seattle in the 1970s at a time when "Dr. Strangelove" characters held a respected behind-the-scenes prominence as a collective Cold War fear beset this nation seem appropriate to share as a hostile Russia seems to be re-emerging. The shared recollections were prompted by last week's Harp about the days of Seattle's growing ties with Russia two decades-plus ago).

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Earl Sedlik detected early on that he was likely out of place as a Boeing-assigned member of a team of long-range planners who, in the mid-1970s, were assisting the CIA and Defense Department in strategic planning for future military hardware and nuclear-related strategies.

Sedlik had been hired in 1974 as Director of New Product Development at Boeing's Aerospace Division in Seattle, but a year later as Boeing disassembled the unit he found himself as the assigned macroeconomics expert from Boeing on a 10-member secret-team think tank for military armament planning.

It was there that he learned what it meant to plan for a future by strategizing to destroy it. And it was there that he was introduced to his new boss, whom we'll call TK, who was returning to Boeing after a stint as part of the SALT talks, his second tour at SALT and he had also spent time with the CIA after a Washington, DC - based Boeing assignment.

"TK became my new boss without much fanfare - but it was a revelation to work with him," Sedlik said. "He wore a full length black leather winter coat that nearly swept the floor. He hung a picture of an explosion on his wall which caught my eye.  It was, he said, a photo of a lab experiment to show a controlled dispersal of a nuclear reaction so that the power could be focused and not wasted on a spherical blast."

"He was an advocate for the Neutron bomb which would only kill people and not destroy property,' Sedlik remembered. 

"TK was Dr. Strangelove in real life," Sedlik said. "I learned later that his passion in the SALT talks was best describes as: 'what will we do after the nuclear exchange when we have 20 million people left and they have 10?'"

Dr. Strangelove was a reference to the key character in the movie "Dr. Strangelove: Or How I Learned to Stop Worrying and Love the Bomb."

Peter Sellers' mad-scientist character in the Stanley Kubrick movie has become an almost archetypal figure of the death-and-destruction focus of the Cold War planning and the film, released 50 years ago this year, became an icon of the genre of movies themed to nuclear fear.

Sedlik described the scene when his group was called to meet with "a hjghly respected climatologist" to discuss the possibility that a Russian drought and resulting food shortages could prompt the Russians to strike first.

The team had gathered for that meeting because of what Sedlik describes as a need to develop a narrative for the Department of Defense to use to convince Congress to support development of an Air Launched Cruise Missile (ALCM) system, replacing the existing Strategic Air Command with "the world's first flying instant-response nuclear attack capability."

Sedlik remembers TK suggesting that if the drought hit the Soviets hard enough, the Communist leaders would order a first strike against the U.S. to quell possible revolt "by diverting everyone's attention toward fighting against the Americans."

Thus the logic in favor of the ALCM's capacity to strike back "even before the first bombs land."

Sedlik said he then questioned the climatologist on whether "we would know about the drought as it developed and before it got too severe and was assured that secret satellite data would keep us aware of how serious the drought was.

That prompted what Sedlik recalls as his rebuttal that day: "if they are hungry, we will feed them. It's a biblical reality that you want your enemy to be healthy so that they make logical decisions and if we know that they might strike first because they are hungry, we will send them food."

"The response was quick and clear," Sedlik said. "TK looked directly at me and sternly said, 'Sedlik, you Eastern Liberal Bastard, you can leave the room!'"

Sedlik, whose Jewish heritage traces to small towns in Moldovia and Belarus, told me he compiled this report of what he referred to as "my oft-repeated story" after a summer trip with his family to Russia a year ago.

He explained that he finally compiled details of the story because "when recast through the reflection of time and direct Russian heritage experience, I wanted Molly and Adam (his children) to share a record of those days and my direct experience with the vagaries of the cold war."

It's Sedlik's reflections on "the vagaries" of the cold war in the context of some of pressures toward a new nuclear arms initiative in this country that prompt me to share his recollections here.

His story brought to mind an op-ed piece in the Washington Post last winter by former U.S. Secretary of State George Schultz and former Georgia Sen. Sam Nunn, now co-chairman and CEO of the nonprofit Nuclear Threat Initiative, on the question of whether the re-emergence of full-fledged Cold War psychology could be avoided. Return to such a state of mind, they wrote, might be encouraged by Russia developing an "I can get away with it" mentality.

Their key point in the piece was that "Although current circumstances make it difficult, we should not lose sight of areas of common interest where cooperation remains crucial to the security of Russia, Europe and the United States."

And it might also be important to keep in mind philosopher George Santayana's admonition: "Those who cannot remember the past are condemned to repeat it."

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Deteriorating U.S.-Russia relationship sparks memories of strong Seattle ties built in late '80s

As the Soviet Union was dying and Russia re-emerging back in the late 1980s, the Seattle area was fashioning perhaps the closest ties of any city in America to that one-time Cold War foe.

Now those who were among the visionary leaders in Seattle who understood the value to their area of détente with a former enemy express disappointment and concern about the obvious deterioration of relations between Russia and the United States and its European allies over current events.

But there's more of a sense of sympathy than likely in other regions for the Russian leadership in the current situation, albeit disappointment that the post-Cold War ties that they helped engender are being undone.

And regardless of other thoughts on the souring relationship, most would agree with Carol Vipperman, who created the Foundation for Russian American Economic Cooperation (FRAEC) in April of 1989, even before the Soviet Union's death rattle had become its demise:"I never in my life thought we would be where we are today."

Referring to Russian President Vladimir Putin, Vipperman said in an interview "he's always been threatened by the kind of opposition that is scattered across Russia, and what's happening now, beginning with the end of free elections for governors of the states, is an indication of his long desire to have control."

Derek Norberg, executive director of the Council for U.S.-Russian Relations, says "the State Department and White House paint a rather clean picture of 'white hats and black hats' in the Ukraine crisis, when in fact the hats are far more grey on both sides and fault in the conflict in Eastern Ukraine (and the degree to which it escalated) lies on all sides."

This is why achieving a lasting cease fire and peace is so difficult," said Norberg, who spent a number of years with Vipperman's organization,"There are parties on both sides whose interests are served by perpetuating the conflict."

"The policies on both sides (US and Russian) are suffering for it.  In my experience, working with the Russians closely is always more productive than is isolating them. For unclear reasons, we are pursuing a policy of isolating the Russians rather than engaging them, Norberg said.

Bob Walsh, who has been the Seattle link to virtually every initiative designed to enhance relations between the U.S. and Russia since the late 1980s, agrees relations are "going down the tube," but is more sympathetic to the Russian actions that have stirred the ire of the U.S. and its allies.

Referring to Putin's decision, in the face of bitter international opposition, to retake Crimea as a part of Russia," Walsh said "I have no problem with that. Ninety percent of the people there wanted to go back to Russia and most citizens of Crimea are happy that they are again part of Russia."

Walsh has not only remain involved with Russia and its citizens, including putting two Russian students through Seattle University, he is now engaged in as-yet unannounced campaign to create a memorial display at the Washington State History Museum in Tacoma to the long relationship between the two nations that he helped foster.

Given the current issues straining ties between the two nations, it may be worth reflecting on the role this region took in helping build relations between the two leading nations as the Cold War came to an end and trust needed to be built to replace hostility.

Perhaps the most visible of those initiatives was the 1990 Goodwill Games, which brought the attention of the world to the Olympic-like athletic games between Russia and the United States.

I asked Walsh to recall for me how those came about and he explained that Ted Turner had been unhappy with the boycotts of the 1980 and 1984 Olympics and "wanted to bring people together so he went to see Mikhail Gorbachev and got him to agree to do the Goodwill Games in Russia in 1986."

"Turner called me and asked if we could do a similar event in Seattle in 1990," Walsh recalled. "Frankly we expressed the most interest and I don't recall other cities wanting it."

"Don't forget we were still in the middle of the Cold War and President Reagan had just referred to the Soviet Union as the 'Evil Empire,'" Walsh said. "Mayor Wes Uhlman had already begun a sister city relationship and it seemed we were more open to relations with people in other parts of the world."

Walsh went on to build relationships beyond Russia, creating strong personal ties in Georgia, where he guided the first western investment in the capital of Tiblisi, "all Seattle money with which we built two Marriott Hotels and changed the face of the city."

The focus on opening doors and creating relationships was broad based in the Seattle area, extending to everything from airline connections to Junior Achievement.

Alaska Airlines tied the Seattle area (and the state of Alaska) to the Russian Far East in the '90 as only regular air service can do. Before the breakup of the Soviet Union had been completed in December of 1991, the Seattle-based carrier had launched what would become service to five cities in the far eastern part of Russia with flights that helped thaw relations between the U.S. and the Russian Far East region

The Seattle-based carrier, which said it made money on the Russia runs until the economic downturn in Russia in the late '90s prompted Alaska to discontinue service, even instituted a program of allowing Americans who held multiple-entry visas to city hop within Russia on Alaska Airlines.

In 1993, to facilitate trans-Pacific tourism and trade, Russia opened a consulate in Seattle and the United States opened a consulate in Vladivostok, to which Alaska began year-round flights in 1994.

In fact, Alaska Airlines' ties to what was then the Soviet Union began in 1971 with charter service to Siberia, the outcome of more than three years of what were described as "secret negotiations" between Alaska and Soviet authorities that a reluctant U.S. State Department, once learning of the agreement, gave permission for more than two dozen flights in 1970, '71 and '72.

And Seattle's Junior Achievement board members were instrumental in establishing JA in Russia. That was 1991, as part of a Rotary International program initiated Washington's then Secretary of State Ralph Munro, when several Rotarians went to Moscow and a JA student from Seattle was invited to speak before the Presidium.

"We also had JA USA kids compete with Russian JA kids in the management and economic simulation exercise simulation where the Russian students won," recalls David Moore, JA president for Washington."

"It was obvious that there was higher level of interest in private enterprise among the Russian students," he added, of what has become the second largest JA program in the world.

Focusing solely on the economic cost, and economic ties were clearly the impetus for the initial post-Cold War overtures from leaders in this area, Norberg observed: "Compromising long-term and hard won U.S. business interests in Russia over the principals of Ukraine's sovereignty fails the fundamental test of economic pragmatism. "

"Economically, our policy is doing U.S. businesses a real disservice," he said. "The opportunities lost for the U.S., EU, Russian and global economies are hard to estimate, but are significant.

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State crowdfunding legislation moves toward the implementation date despite SEC uncertainties

As criticism of the Securities and Exchange Commission's dawdling with its charge from Congress to implement crowdfunding through the federal JOBS Act grows to a chorus, there's now criticism emerging that the agency is seeking to disrupt the process for states like Washington that are creating intrastate crowdfunding.

The SEC critics, with increasing plausibility, contend that the agency has done its best to ensure that the federal JOBS Act won't come about as Congress intended.

And now that some states have given up waiting for SEC action, it seems that the federal agency is trying to put roadblocks in the way of frustrated state legislatures that have sought to find ways to have crowdfunding for startups work at the state level through selling shares to large numbers of people, typically via the Internet.

Washington is one of a dozen states that have decided nothing meaningful will come out of SEC machinations, prompting the Legislature last spring, after a year of preparation, to pass a bill that will permit entrepreneurs who are state residents to raise up to $1 million a year in small amounts from in-state investors.

The Legislature gave the State Department of Financial Institutions (DFI) until October 1 to put in place the rules and the process under which crowdfunding can be carried out and Bill Beatty, Director of Securities for DFI, says the agency "remains on track" to meet that deadline.

 

The department will have a hearing Thursday on the proposed rules and "will proceed to adopt the rules shortly after that unless we determine we need to make significant changes to the rules as currently proposed," Beatty said.

 

Joe Wallin, an attorney for Seattle-based law firm Davis Wright, predicts that entrepreneurs who are state residents will be able to begin selling shares to large numbers of Washington resident by the end of the year.

 

The legislation in this state and others was in reaction to what has transpired, or failed to transpire, at the federal level after Congress,

with an election-year flourish in the spring of 2012, passed the so-called JOBS Act, officially the Jumpstart Our Business Startups Act.

 

Then Congress turned it over to the SEC to enact rules to implement the law and gave the agency 180 days to put together the process for how entrepreneurs could fund their start-up companies, primarily via the internet, by selling equity to large numbers of average investors.

 

 

It soon became obvious to all but the most myopic, with one delay following another, that SEC Chairman Mary Schapiro had little interest in seeing the law come about, possibly because she was more concerned about protecting average investors than following the law's guidance toward funding entrepreneurs.

 

Now the SEC has a new chairman but there is a growing sense that the details of compliance, if and when the SEC finally acts, will be so onerous on entrepreneurs that the costs of starting to raise capital on the Internet will deter many if not most would-be entrepreneurs. Indeed the latest deadline for the rules to be established has passed and the regulators have not provided a new timeframe, now almost two years after the launch date Congress intended.

And now there is also a sense on the part of many crowdfunding supporters, including Wallin, that Congress, unless it has lost interest, may have to intervene to keep the SEC from removing or changing a number of securities rules that stand to burden in-state entrepreneurs who hope to raise funds in their states to launch businesses.

Wallin, who proposed the wording of the original state legislation and whose blog is viewed by many as the final word on what's happening with federal as well as state crowdfunding, worries that the SEC is trying to make it harder for states to do what Congress intended the federal government to do.

 

 

An example is in the fact that the state laws are not subject to the federal crowdfunding law because the companies raising the money are incorporated in those states and raising money solely from investors in those states. Congress created that specific exemption from federal law for intrastate offerings when it enacted the Securities Act of 1933.

However, the SEC has recently issued interpretive guidance on the intrastate exemption that says that if the company uses the internet to promote or discuss its offering then the offering is not an intrastate offering even if a company is incorporated in a particular state and all investors are in that state.

"This is nonsense and it needs to be corrected," says Wallin, who is seeking to stir an outcry from start-up supporters to demand that Congress get involved. "It's nearly impossible not 

 to use the internet to communicate any fundraising or community organizing event that involves these start-up businesses."

"Section 201 of the JOBS Act was a big help to entrepreneurs in that it allowed startups to talk publicly about their efforts to raise money, a process known as General Solicitation," Wallin notes."Unfortunately, the SEC put rules in place that discourage most companies from taking advantage of this new opportunity and Congress needs to restore the intent of its own legislation."

Wallin offers the following suggestion that can be forwarded to members of Congress by those seeking to use the Internet for crowdfunding of their startup:

"Please either pass a simple piece of legislation to fix this or direct the SEC to clarify or fix its intrastate crowdfunding decisions. Otherwise, by prohibiting the use of the internet in intrastate crowdfunding, the SEC is tamping down a nascent but important opportunity to cultivate local funding and entrepreneurship ecosystems before they even have an opportunity to develop."

It may well be time, in these final weeks of an election season in which most members of Congress are on the November ballot, to send a message that indifference and ineptitude on the issues of innovation and job creation won't be taken well by those who understand the role entrepreneurs play in economic health.

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Rewarding patient Mariner fans with a winner is the goal of first-year president Kevin Mather

If the Seattle Mariners are successful in their effort to land their first post-season role in more than a decade, it will fulfill a key wish of Kevin Mather, the team's first-year president and COO, who says "we'd sure like to reward our fans with a playoff opportunity."

Kevin Mather

(Photo Ben Van Houten, Seattle Mariners)

Mather came to his new role, when named last February to replace long-time president and COO Chuck Armstrong, with a conviction on how the Mariners would build a winner and of the need to reward the fans who he said "have been outstanding, patient and loyal" over all the down years.

But while the playoff hopes remain yet unresolved, most of the developments for the Mariners during Mather's first year, some things under his control and some beyond, have come up as positives rather than the negatives that have dogged the team for a dozen years.

In fact, if the Mariners make it to the post season, it will be the first such appearance since 2001, a draught that drained the support of fans who, during the season of that last playoff run outdrew every major-league team with a per-game attendance averaging 43,302.

Mather reviewed the year and fielded questions during a breakfast interview we had last week at the Columbia Tower Club, the same day that the Mariners were singled out, with an article in the New York Times, to be acknowledged broadly for the club's pre-eminent role in an area more important than on-field performance.

As the cries of anger echoed across the NFL and beyond over the assault recorded on video by Baltimore Ravens running back Ray Rice as he punched his wife senseless in an elevator, the Mariners were singled out for their 17-year partnership with the Washington State Coalition Against Domestic Violence (WSCADV).

It was in 1997 that the Mariners started a public education campaign, "Refuse to Abuse," after the WSCADV reached out to team executives in the hope of engaging and educating the team's fans through media advertising in an annual campaign to foster more safe and healthy relationships.

The relationship, noteworthy among all pro sports teams, has continued since then, with the highlight of the annual fund-raising campaign for the coalition being a 5k run carried out entirely in, out and around Safeco Field.

"The coalition has been a great partner for us," Mather said of the domestic-violence awareness group, then added, "baseball is frankly held to a higher standard. We have zero tolerance for domestic violence."

That partnership began a year after Mather joined the Mariners as the Vice President of Finance and Administration. He was promoted to Executive Vice President of Finance and Ballpark Operations in 1999.

Prior to the Mariners, Mather, a CPA by profession, worked for the Minnesota Twins from 1989 to 1996 as director and vice president of finance.

It was in his role with the Twins that he first came to the attention of the Mariners when he was selected to represent baseball's small market in the landmark revenue-sharing plan. It was a process in which markets self-selected themselves as small, medium or large markets,

As Mather recalls it: "Baseball had become a sport in which 25 teams had no chance to win, so the goal was to make every team competitive."

So in 1992, the then-new baseball commissioner Bud Selig began negotiations to create a sharing of revenue that would involve taking money away from some teams that made a lot of money and give it to teams that didn't make a lot.

It was Mather's job to represent the small-market teams, which included the Mariners, then just being saved for Seattle by a new ownership team headed by John Ellis, CEO of the new Mariners. Mather smiled as he recalled that the small-market group he represented began with five teams and others kept opting in as they liked the way he was negotiating, until the commissioner called as halt at about a dozen small markets

Mather remembers an example of not every team with a lot of money wanting to share.

"George Steinbrenner (the late owner of the New York Yankees) said to Ellis, 'you mean I am going to spend millions of dollars for this sad-case baseball team in the Northwest? We should buy you and put you out of your misery.'"

"John looked at me for a response and I didn't have one," Mather joked to the breakfast audience.

I asked him how the Mariners had done, assuming that some years they had been on the receiving end of the sharing, but he said the team has basically been a payer, to the tune of $20 million to $22 million a year ever, ever since the plan went into effect in 1995.

So when the Mariners needed to go looking for a CFO, they knew where to look, and while thereafter Mather was in Seattle through the glory days when the Mariners were virtually among the best teams in baseball, he's suffered with the fans through the down years as attendance slipped the past three years to 500,000 below the MLB average attendance.

Mather takes pleasure in noting that attendance this year will be above two million after three years below that mark.

And he freely attributes part of the return of the fans to another of those areas beyond his control. That's the impact the Super Bowl Champion Seahawks have had on Seattle sports fans, saying "there's no doubt that the Seahawks have had a positive impact on fan support for all professional sports, including the Mariners."

But within Mather's control is his conviction that the long-term view will guide decisions on players and building the roster, convinced that the position players now in development in the minors represent stars of the future for the Mariners. "They are the key to our winning 95 games a year in a few years"
 
And he credits General Manager Jack Zduriencik, who last month got a long-term contract extension, with positioning the franchise "to be a contender for many years to come."

Jack has never been a short-term thinker," says Mather, whose philosophy is "it's easier to fill a hole in free agency than with trades, because you just give up money in free-agency deals but trades require you to give up players."

Mather says that one goal he outlined when he met with the ownership team for the first time after assuming the new post, was "to still be playing meaningful games into September." That goal has been achieved, and "meaningful games" may still include the post-season.

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Recalling how a world poured out grief on our behalf is important memory at 9/11 anniversary

The compelling question for citizens of this nation to ponder on the anniversary of 9/11 is whether the global regard that existed then, as evidenced by the outpouring of grief that came that day in our behalf, would be evidenced today. And if not, why not.

 

On the 10th anniversary 9/11, I shared here a column written a few days after that tragic September day by a former United Press International colleague, Al Webb, who did a wrapup of the global grief that citizens of every country shared on our behalf. Webb's article, written from his post in London, captured that display of shared pain in a way that deserved remembering.

I shared it again last year, and do so this year since his article conveyed the sense of a national treasure of global regard for us. And so we now need to ask ourselves: in the more complex world that exists today, as international relationships ebb and flow with events, has that regard been diminished? That perhaps represents a question that deserves reflection on this anniversary of 9/11.

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By Al Webb

LONDON (UPI) -- A small girl with a Cockney accent shyly waved a tiny American flag, and a queen brushed away a tear. In a Scottish town that has known its own tragedy, a lone church bell tolled. On a German river, foghorns sounded a low moan.

Across countries and continents waves of sympathy for a nation in anguish rolled on. A young woman in a Kenyan park wept over the sad headlines in newspapers spread on the ground. A one-time terrorist donated blood for the victims. Hundreds stood in line in cities from Dublin to Moscow to sign books of condolences. 

And over the outpouring of grief and mourning for the lives lost in the boiling flames and rubble of the World Trade Center towers and a wing of the Pentagon, time and again came the strains of "The Star-Spangled Banner," sometimes in places where it had never been sung before.

In a gesture reminiscent of John F. Kennedy's "Ich bin ein Berliner," symbolizing his solidarity with another troubled people four decades ago, the Paris newspaper Le Monde perhaps summed it up best: "We are all Americans."

In London, where the little girl with the funny accent and her American flag pressed her damp face against the gates, the band performing the traditional Changing of the Guard at Buckingham Palace suddenly did something it had never done before -- it struck up "The Star-Spangled Banner."

For 45 minutes, the Mall in front of the palace became a little piece of America for hundreds of its citizens who were there because there were no planes to take them home. And the band of the Coldstream Guards played on.

As tear-stained faces lifted and sang along, as Americans and British and other nationals waved Old Glory, the marches rolled -- "The Liberty Bell" after the national anthem, followed by "The Washington Post March" and "Semper Fidelis" and finally, heart-rendingly, "When Johnny Comes Marching Home."

What the Coldstream Guards had triggered was the greatest mass demonstration of grief in Britain since Princess Diana was killed in a car crash four years ago. And as with Diana's death, a carpet of flowers, children's toys, poems, letters, all illuminated by tiny candles, built up this time at the fortress-like U.S. Embassy in London.

Amid the hundreds of bouquets, a single American flag was wrapped around a tree. One woman pressed her tear-dampened lips to its fringe in a soft kiss. 

The sweeping tide of mourning reached its crescendo at 11 o'clock Friday morning when Britain, France, Germany and scores of other countries in Europe, Africa and Asia went silent for three minutes, in honor of the innocent dead in America.

In Paris, the elevator at the Eiffel Tower stopped halfway to the top. Buses, trams and cars halted in their tracks across the continent.

In Spain, more than 650 city and town halls became gathering centers for tens of thousands who bent their heads in silent prayer -- and then, at the end of the three minutes, they lifted their eyes and applauded in that people's traditional tribute to the victims of terrorism.

On the River Elbe leading into Hamburg, ships flew their flags at half-mast. The minutes of silence crept by -- and at the end were broken by the sound of a thousand foghorns rolling across the water into the city's very heart.

In Lockerbie, Scotland, there was no applause, no singing, no bands, only the ringing of a single church bell and the flutter of flags at half-mast. This is a town with singular links to America, forged in a terrorist attack in the skies 13 years ago.

In all, according to an estimate by The Daily Telegraph newspaper in London, some 800 million people across Europe joined in the three minutes of silence.

At Berlin's Brandenburg Gate, once part of a dividing line between freedom and tyranny, a crowd of some 200,000 -- among them Germans whose relatives had died in terrorist attacks -- gathered beneath a black banner bearing the words, "We Mourn With You."

In Paris, crowds jammed the Place de la Concorde, itself a symbol of reconciliation, while church bells rang for five minutes before the silence.

In the government's Elysee Palace, "The Star-Spangled Banner" rang out, while over the French air waves, radio stations played John Lennon's "Imagine."

The bankers of Switzerland are not noted for their sentimentality, so they dealt in their own currency. At the end of the three minutes of silence, they announced they were donating more than $500,000 to the families of the victims of the atrocities in America. 

Lloyd's of London, the insurance market based in the British capital and one of several insurers of the World Trade Center, rang its Lutine bell and observed a minute of silence in memory of the dead in America -- some of them in the several broker offices Lloyd's has -- had -- in the WTC. 

In Belfast, the bullets and bombs of Northern Ireland's own form of terrorism, known as sectarian violence, went silent as tens of thousands from both sides of the divide -- Roman Catholic and Protestant - gathered in front of a makeshift stage at City Hall, to stand in silent tribute.

It is a city that knows the heartache of terrorism. "We have suffered for 33 years," said Betty McLearon. "People here have to be admired for the way they cancope with it. It will take the people in New York a long time to get over this."

In Moscow, the Russians observed a minute's silence as they laid wreaths and floral tributes outside the U.S. Embassy, once a symbol of the Cold War. Thousands of Muscovites lined up patiently to sign books of condolences.

In turbulent Israel, a nurse gently inserted a needle into the right arm of Yasser Arafat, himself a one-time terrorist who is now head of the Palestinian Authority. In a demonstration of support, he was donating blood to help the American injured.

Back in London, the minutes of silence were followed by a service of remembrance in the capital's majestic St. Paul's Cathedral, led by Queen Elizabeth II herself. In the audience of 2,400 inside, Americans hoisted the Stars and Stripes for the rest of the world to see via television.

Outside the cathedral, the tens of thousands who could not get in waved their own tiny flags and listened over the loudspeakers that carried the words and music for blocks around.  The cathedral's huge organ rumbled into life, to open the service, appropriately, with the American national anthem.

Then something happened that has never happened before, certainly not in public and doubtless not even in private. Softly, the queen began to sing "The Star-Spangled Banner."

Now, the British monarch does not "sing" national anthems. When they are played, she never even opens her mouth. Until now.

 But Queen Elizabeth sang it all, this song whose words were written 187 years ago during Britain's last war with her lost American colonies, through the final words, "O'er the land of the free, and the home of the brave." With the last note, the queen gently brushed away a tear. 

That said it all. 

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Business groups seek statewide grassroots support for strategy for prosperity issues

The presidents of three major business organizations in the state went on the road this summer, logging 1,000 miles by car to visit with business people in a dozen communities in an effort to create a common strategic focus for not just the coming legislative session, but beyond.

As Kris Johnson, preparing for his first legislative session as president of Association of Washington Business, ticked off the issues that emerged as a shared priority list from the various gatherings, the issues don't have an ideological ring to them.

Rather seeking to build a 21st century strategy for education and talent, job creation and investment and how to create an efficient transportation system for the state would seem to have appeal across the ideological spectrum.

Kris Johnson

But of course the shared vision of the business community on how to achieve those will differ from the views of an administration and Legislature that tends, with both houses and the governor's office controlled by Democrats, to be suspicious about business goals.

Johnson and Steve Mullin, president of the prestigious Washington Roundtable, along with Richard Davis, longtime president of the Washington Research Council and, in many respects the voice for business issues in his media columns, traveled together to the meetings.

In addition to hearing directly from about 400 business leaders and employers in the various communities, Johnson said there will be "an open survey portal, an online link basically, to provide a voice for those business people who didn't get to attend but want to have input for the discussion."

The details of the road trip and the plan for development of the first real grassroots strategy for businesses in the state will be outlined at AWB's 25th annual Policy Summit at Suncadia Sept. 16-18.

Thereafter, the process will involve continuing to be in touch with the groups involved in the summer meetings while Davis finalizes the actual rollout of the plan by December in time for a planned meeting with the legislators themselves prior to the commencement of the 2015 session.

The Washington Roundtable, chaired this year by Avista Utilities' president and CEO Scott Morris, and composed of the senior executives from the state's major private-sector employers, has tended to focus on the broad policy issues that haven't always been in sync with the concerns of small businesses around the state.

And in some respects, the challenges of geographic differences have almost become more daunting than ideological splits for efforts to build a cohesive grassroots strategy for business.

But with interlocking boards, the three organizations will be part of a shared vision going into the forthcoming legislative session.

And in addition, the business organizations have brought on Rich Hadley, the retired longtime and widely respected president of the chamber of commerce in Spokane, now Greater Spokane Inc., who retired earlier this year. His initial assignment is to bring the major chambers of commerce around the state on board with the coordinated planning.

"Face-to-face meetings can help create a broader vision that everyone can come to agree on," Hadley said. "I think the sincerity of a dialogue to bring people together from all parts of the state can overcome the inevitable efforts to divide the state with classic division-creating descriptions like Cscde Curtain."

Johnson says of the cooperative effort of the three organizations: "We are putting a lot of time and resources to build a comprehensive grassroots strategy to help employers to advocate and educate their elected officials."

There are likely to be strong legislative headwinds as lawmakers return to Olympia in January for their long session in which they face an estimated shortfall of about $1 billion before addressing any of likely additional costs to meet the state Supreme Court mandates on education funding.

Mike Schwenk, recently retired from Pacific Northwest National Labs where he was director of technology deployment and is the incoming chair of AWB, noted that the grassroots efforts is to get the voices of businesses in the 37 counties that have had varying degrees of challenge in their recovery, heard by lawmakers and policymakers.

"The key to all this is creating a plan that comes alive for the businesses around the state to buy into the strategy and understand it's their plan also," Schwenk said.

"We tend to forget about or be knowledgeable enough about the rest of the state," Johnson said. "The other 37 counties (beyond King and Snohomish) need a vehicle to communicate what's on their mind."

A key to all this is what skeptics may view as an elusive goal of helping lawmakers understand the ties between a healthy private sector, in all parts of the state, and the needs of those whose jobs depend on the state's economic vitality.

"One realization that needs to come out of this is that the economy of this state can't be easily subdivided, Davis said. "We need policies that are statewide. The Legislature needs to come to understand that we are not coming up with a business agenda so much as a prosperity agenda."

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Yakima Court ruling could be key to assisting goal of creating Latino-community power

Latino leaders in Washington who have sought to get the state's rapidly growing Latino population to find ways to work together, both in business and politics, may now have found the key to greater cooperation in the potential fallout from a federal court ruling last week

Judge Thomas Rice ordered the City of Yakima to change its election system, which he said violated the Voting Rights Act by denying Latinos full participation in City Council races. He said Yakima's at-large elections block representation by Latinos, who represent a third of the city's voting-age population.

"What's going on in Yakima has been a problem for a long time in the counties as well," said Gene Juarez, who grew up in the Yakima Valley to become arguably the state's most successful Latino businessman as founder and CEO of Gene Juarez Salons and Spas.

Gene Juarez

The reality is that if districts need to be carved out in city elections in place of at-large races, and perhaps even in future races for county commissioner, it will represent opportunity for Latinos to begin learning how to flex their muscle.

Afterall, Latinos make up 30 to 50 percent of the population in some Eastern Washington counties, and as much as 80 to 90 percent in some cities.

But first will have to come a cultural change for Latinos, whose leaders say they must learn the importance of organization and cooperation.

Jorge Madrazo, a leading figure in the administrations of two Mexican presidents and now a key executive with Seamar, the Washington state's largest 501c3 and focused on providing healthcare to low-income citizens with an emphasis on Latinos, says "we need to learn how to organize and learn the value of organizing."

Enrique Cerna, the prize-winning journalist for KCTS public television in Seattle, observes that coordination of the state's rapidly growing Latino population, which grew by 71 percent between 2000 and 2010 "has been a real challenge."

The federal court ruling may spur more interest among both Latinos and key supporters in the first-ever sketch of the significant and growing part of the Central Washington business community that Latino businesses represent, a survey conducted and tallied in a program at Eastern Washington University..

The study, guided by D. Patrick Jones, Ph.D., executive director of the Institute for Public Policy & Economic Analysis at EWU, painted the first real picture of the Latino entrepreneurial community and debunked some key stereotypes about Latinos taking advantage of government services.

The data for the EWU report came from interviews conducted with Latino business owners in Adams, Chelan, Douglas, Grant and Spokane Counties by Martin Meraz-Garcia of the school's Chicano Education Program.

And the data would suggest the Latino business owners are often the kind of entrepreneurs routinely applauded by those who praise the entrepreneurial spirit of classic American success stories.

Fully 65 percent of the business entrepreneurs interviewed were first-generation immigrants who came to the U.S. with only the clothes on their backs and very little in the way of skills but with the dream of someday becoming business owners themselves. And 87 percent started their businesses with their own personal savings and without assistance from financial institutions.

Patrick Jones

The study, which Jones expects will be followed up with similar surveys in other counties with heavily Hispanic/Latino populations, notes that first-generation immigrants were the biggest share of participants, at 65 percent of the overall sample. And he adds that 87 per cent of the Latino entrepreneurs started their businesses with their own personal savings and without assistance from financial institutions.

Juarez, who jokes that he early on earned his PhD, which he explains means Personal Hair Dresser, thinks that the issue of Latino business owners not being able to qualify for the usual level of security for bank loans could be addressed by the SBA modifying its standards to allow banks to accept those with low security for their loans.

Juarez, who became one of the most salon owners in the country, describes himself as a conservative and says his view of redistribution of wealth "is to dispense it to those who want to work, and Hispanics are hard workers with a hardworking cultural background."

Madrazo, who was chairman of Mexico's National Commission for Human Rights for one Mexican president, then attorney general of Mexico from 1996 to 2000, adds "Latinos need to learn how to work together and change our way of thinking."

Madrazo, who in 2011 took over and re-energized the Northwest chapter of U.S.-Mexico Chamber of Commerce and now guides business development for the only healthcare entity aiming to attend to the growing Latino population in the state, chuckles when he says "learning how to do public relations is the most challenging thing on the planet for all Latinos."

Cerna, born in 1953 in Yakima seven years after his parents arrived there from Mexico, says "the challenge is trying to get Latinos to work together and thus there's currently an inability to be a strong political force."

The immigration issue looms large for the Latino business people interviewed in the EWU survey by Martín Meraz-Garcia of the school's Chicano Education program, with many of the business people citing immigration raids and recent audits of companies as the primary reason for the slowdown of economic activity in some areas, Jones said.

There is a lot to suggest that immigration may be the issue that brings the community focus and the ability to work together that Latino leaders see as missing for Washington's Latino population that now represents just under 12 percent of total state population and has grown by 72 percent from 2000 to 2010.

Particularly since a key finding in the interviews conducted for Jones' study by Martina Garcia, Ph.D., how deeply felt and positively viewed immigration reform is among these Latino entrepreneurs.

Jones, formerly an executive at Spokane's Intercollegiate Research and Technical Institute and the first head of the Biotechnology Association of the Spokane Region, says "this business sector will be a very important base of the business community in the next generation or so."

But more near term, he notes "the challenge is to engage these people, because then the question will be to what extent will the Latino vote influence the 2016 elections."

Before 2016, of course, there are the 2014 elections, and a coupleor other interesting Latino developments are the 1st Congressional District campaign by Pedro Celis, who won the Republican nomination to seek to unseat Democratic incumbent Susan Del Bene, and the planned Seattle fund raiser for a Democratic Congressman running for re-election in California's Coachella Valley.

Celis, a former Microsoft engineer who would be the state's first Latino congressman, sums up his view on the immigration issue as "wider doors and higher fences," but adding "we need to make iteasier to come into the country legallyand "trying to deport 11 million people is not only impossible but not in our best interest as a nation."

And intriguing in election-year politics is the political fund-raiser being planned in Seattle for Raul Ruiz, Democratic congressman from California's 38th District encompassing the Coachella Valley.

The fundraiser is being organized by Ralph Ibarra, a third generation American of Mexican descent who is a self-described advocate and activist for the Hispanic/Latino community, is attracting support from both within Latino ranks and beyond for his fund-raising for Ruiz, a Harvard MD.

"It is critical that Latina/Latino elected leaders like Dr. Ruiz remain in place so that the interests of Hispanic/Latino Americans are championed at the highest levels of government," explained Ibarra,who consults with corporations and institutions on Latino affairs but has a particular focus on 9-11 veterans and their families.

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BankWork$, creating banking opportunity for at-risk job seekers, announces national expansion

(Editor's note: This column is being sent today as an added

"Harp" because of the going-national move of an award-winning Seattle program we have written about several years ago.)

------ 

 BankWork$, the initiative by former top bank executive Les Biller to create a career foothold in his old industry for people from inner-city and at-risk neighborhoods, is about to move from its successful launches in Los Angeles and Seattle to a national program, beginning with three new cities this fall.

 

Biller, who after his retirement as vice chairman and chief operating officer of Wells Fargo conceived the idea of training specially selected job seekers to be bank tellers and convinced a group of local banks in the two cities to get involved, has now created a multi-million-dollar plan to take BankWork$ national.

 

The national rollout commences this fall in the San Francisco Bay Area with Phoenix and Portland to come aboard in 2015 with three bank partners Bank of America, U.S. Bank and Wells each committing $1 million a year for five years with the Sheri and Les Biller Family Foundation matching that.

 

The success of BankWork$, first in Los Angeles where about 130 people a year are being placed in teller roles since 2006, then Seattle once Biller and his wife, Sheri, relocated to the Northwest and he had become chairman of Sterling Bank, spurred him to decide to take the program national.

 

To head the program and guide its growth into a national presence, Biller has hired Colleen Anderson, a long-time banking executive and a former colleague of Biller's at Wells, where she capped her 22-year career there in the roles of executive vice president and head of both business banking and California banking.

 

Biller explained that Anderson, who most recently was executive vice president in charge of all aspects of business and consumer banking for Pasadena-based OneWest Bank, "was looking at what she wanted to do next and decided that BankWork$ was an opportunity to give back."

 

The BankWork$ office will be in Los Angeles, although Biller will be highly involved in the growth of BankWork$ from his Seattle office.

 

Anderson may well serve as inspiration, as well as role model for those selected to participate in the training to become tellers since she recalls that her career began in a position called "proof operator, a position one level below teller that no longer exists."

 

Biller explained that Portland, Phoenix and the Bay Area were selected to be the first of what he expects will be a dozen or more Bankwork$ cities in five years because the three partner have substantial presences in the three cities and and those cities have substantial low-income minority communities.

 

Biller explained that as other cities are selected each year toward the 12-15 target cities, other bank partners will be brought into the program, depending on what banks have key presence in each of the cities.

 

Biller envisions that each city will need to provide a governmental entity as a third partner, with California state and Los Angeles County helping fund the Los Angeles program and federal funding in Seattle.

 

He launched BankWork$, which he envisioned as the first step on a possible career ladder for those selected, in Los Angeles four years after he retired from Wells Fargo in 2002 at the age of 54 to allow him and his wife, Sheri, to turn their attention toward philanthropic activities, including formation of a family foundation.

 

The idea for BankWork$ was borne out of Biller's commitment to education and a realization that "education is too often pretty low on the priority list in homes where there are a lot of other issues facing the families." he said in an interview we did as he launched the program in Seattle.

 

"I figured a key step was putting parents of those kids to work in jobs that paid above the minimum wage at the outset and provided career options for the future. Then education for the kids would move up the priority list," he said.

 

It was after the Billers relocated to Seattle four years ago that, with the Los Angeles BankWork$ program having successfully graduated and placed hundreds of people, that he decided it was time to launch the program in a second city, his new home.

 

He says he realized that the program offered the opportunity to marry the needs of business with the needs of the community because many of the teller jobs at banks are jobs that "are basically the same from bank to bank, and many use the same equipment to accomplish the tasks."

 

 "We had to prove that it made economic sense for the banks, as well as the city and others who would be responsible for future funding as the program went on," Biller said, adding that he thinks

the results have been the proof.

 

 "We've had about a 75 percent graduation rate, about 70 percent are being employed by banks and 10 percent hired by other businesses," he said. The per-student cost is running about $4,000.

 

"Once they're hired, we make an effort to ensure they stay with the bank, remaining in close contact with the new hires for six months," Biller said. "We have some who have already received several promotions and raises since hiring."

 

So as Biller prepares to take BankWork$ national, he thinks the concept could also grow beyond banking.

 

"A very important part of this is that in a sense it goes beyond banking," Biller said. "We could do this across a number of industries where the demand is high enough and the positions similar for various companies, thus reducing the cost of each person being trained.

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Could job losses at Amgen and Dendreon mean opportunity for talent-seeking biotech startups?

The long death rattle at once high-flying Dendreon Corp. made this week's announcement of its likely demise less of a shock to Washington's biotech industry than last month's sudden-death announcement for Amgen's Seattle presence, but make no mistake that it represents another blow to the sector.

The departure of Amgen from Seattle by year end is due to its need to amass more cash for its continued growth and quest for new drugs while the potential demise of Dendreon is due to the fact its only drug is no longer competitive.

Dendreon, which makes the prostate-cancer drug Provenge, nearly fell off the stock-price landscape when it announced that it wouldn't be able to meet the $620 in convertible notes due to be paid in January and said the steps it was considering would leave shareholders with worthless paper. It's also likely to leave its workforce jobless.

Regardless of the causes, the job-loss result is the same for the Seattle area.

With Amgen eliminating 600 jobs in Seattle and 60 at its Bothell manufacturing plant, the demise of dendreon, which has more than 700 employees, may leave as many as 1,200 from the biotech industry out of work, possibly the most ever at one time looking for new positions.

For those who see opportunity in adversity, there is the view that this may represent an ideal time for the area's numerous biotech startups to corral some talent that would otherwise be beyond their possible reach.

The idea is that some of those biotech startups may be appealing enough to prompt some of the out-of-work talent to come on board for stock and the promise of future executive roles.

Some of the startups are at least seeking to reach out to see if such interest might be ferreted out on their behalf. And certainly there are some enthusiasm-inducing startups in the biotech space.

Historically, the Seattle biotech community has been a self-sustaining ecosystem," observes Melanie Kitzan, one of this area's most respected patent attorneys who worked with a number of small companies in the biotech space for several law firms before becoming a manager at Intellectual Ventures.

 

"Startups are bought by big pharma and, in some cases, the local shops are shuttered, which provides for a re-seeding of those biotech folks into new startups and the cycle continues," she added.

 

"There is some fear that without a big pharma anchor in the area anymore, with the closing of Amgen's facilities in Seattle, that the biotech community could decline, but it could also be seen as opening new fertile ground of great talent to start the next generation of Seattle start-ups," Kitzan suggested.

 

But James Bianco, founder and CEO of publicly traded Cell Therapeutics Inc., thinks it would be "unusual" if some of the exiting scientists and others at Amgen or Dendreon opted to join startups for stock and future roles.

 

"The critical factor for biotech employees is whether or not there is a safety net in the community, meaning a wide selection of other biotech companies that could be or are hiring," Bianco said.

"That is why it is difficult to recruit in this sector in the NW and we lose many good candidates to San Francisco or San Diego.," he added. "As such, after being laid off by the largest biotech company, it would be highly unlikely they would have risk tolerance for a startup let alone in the Noethwest."

He also suggested that "Amgen didn't likely give more than the traditional payouts, which would probably be 3-6 months on average." 

Observers point out that Dendreon doesn't even have a product to sell, but merely a $93,000 process by which the body's immune system is trained to attack cancer cells and one industry executive noted in the period of time since Provenge was approved, two other major advancements were approved for metatastic protate cancer, both pills rather than a pricey process.

"Their process will be deemed not worthy of continuing commercialization," the executive said, nothing that Dendreon has been unsuccessfully looking for a buyer for more than a year.

Whether the displaced biotech employees of the two firms opt to pursue careers in more fertile biotech infrastructures like the Bay Area, San Diego or Boston, or wish to remain here badly enough to pursue opportunity at one of the small startups remains to be determined.

But their decisions could play a key role in whether the future stars of biotech may yet emerge here because of the marriage of promising innovation with experienced scientists and executives. 

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Yakima Valley hop growers benefitting from surge in growth of craft-brewing industry

As craft beer comes to rival quality wine as a palate pleaser for the discriminating, the hop industry whose bitter green cones give the beer its special taste is surging and thus playing an increasingly important role in the economy of the Valley and also Washington State.

 

The fields of grapes for Washington's successful and growing wine industry are spread across the Yakima Valley while the fields where the hops are grown are far less visible and the acres less numerous. But the fact is that hop growers and their industry, by far the largest in the nation, predate the wine industry by several decades.

Now the hop industry, after years of ups and downs that were mostly downers, is riding a growth wave thanks to the surging popularity of craft beer, most of which is brewed with hops from the Yakima Valley.

"The hop industry is booming right now and adding huge value to the Yakima Valley economy," says David McFadden, president of the Yakima County Development Association. "We are seeing hop processors purchase new buildings, add new equipment and boost local payrolls. Agriculture is very strong right now and hops are complementing our farmers' livelihoods." 

Ann George

For comparison, it's important to note that the hop industry's approximately $160 million annual contribution to Washington's economy is only 14th on the state's agricultural-products values and just a slice of the $2.25 billion annual production of the number one apple industry. But as McFadden notes, the industry's surge is bringing other benefits as well.

"The past few years have been an exciting up and thus a nice change for the industry," notes Ann George, who has been the chief administrator for the Washington Hop Industry association for 27 years and also serves as the chief administrative person for the Hop Growers of America.

"The success of the industry in the past few years has attracted back some of the young talent that had moved away from the farms," she adds, noting that many of the farmers are adding hops to their agricultural-product mix, with the acreage dedicated to hops being between one-quarter acre and 10 acres.

George is in Austria this week for the annual summer gathering of the International Hop Growers Convention, the global organization for hop growers where she chairs what may be the most important commission, called the Commission on Regulatory Harmonization. She thus is the global organization's key person in dealing with the trade and pesticide rules that are the primary challenge for craft brewing as the industry becomes ever more attractive globally, thus adding countries into which hops are sold.

George, one of whose duties is tracking statistics for the industry, says 74 percent of the 2014 hop crop will be from acreage in Washington State, 14 percent from Oregon (virtually all of that produced in the Willamette Valley) and 10 percent from Idaho.

Almost 90 percent of the U.S. hop production is exported to other countries, where craft-brewing industries are either already in existence of where the industry is beginning to take shape.

Most hop farmers in the Valley are third or fourth generation and one of the largest and best-known of those is B. T. Loftus Ranches, which began in 1932 when the first five acres of hops were planted by the great grandparents of current owners Patrick Smith, Meghann Quinn, and Kevin Smith.

 

The Bale Breaker Brewery, smack in the middle of the Lofus hop fields, opened in April of 2014 as the latest Loftus venture.

 

Germany, which produces 60 percent of the world's hops, and the Yakima Valley, which produces 25 percent of the world crop and 80 percent of the U.S. hop crop, are the two most noteworthy geographic areas for hop production.

Pete Mahony

 

Thus it's natural that there would be a convergence in some manner for the two most noted hop-producing regions. And the convergence is the decades-long presence in the Yakima Valley of the U.S. arm of the Barth-Haas Group, the world's largest supplier of hop products and services. Barth-Haas, founded in 1794, is now managed by the seventh and eighth generations of the Barth family and has roughly a 30 percent share of the hops market in Germany.

The U.S. arm of the company, John I. Haas, Inc., which owns and operates its own hop farms, warehouses, pellet and extraction plants and has been a fixture in the Yakima Valley hop industry for some 70 years, next month celebrates its 100th birthday.

Peter Mahony, who is Director of Supply Chain Management for John I. Haas, Inc., and has been with the Washington, D.C., based company for 28 years, explains that hops are "the spice of beer," giving the brew its flavor. And craft brewers use about 6-to-8 times as much hops as major brewers and their brews use one of the variety of what are called aroma hops, that magnify the beer flavor, whereas brewing used to involve what is known as alpha hops, still the primary hop for major breweries.

Mahony notes that acreage devoted to aroma hops in the Yakima Valley has become about 60 percent of the annual harvest, which extends from late August to early October and involves about 29,000 acres in the Yakima area with the average size farm about 450 acres on which hops are one of several crops grown.

Mahony, who says the 1,500 acres that Haas farms in the Valley is one planted in hops, expects that the growth of craft brewing and thus the health of the hop industry and its aroma varieties will continue, "but for how long is the million-dollar question."

He points to the attendance at the annual craft-brewers conference as a cause for long-term optimism for hop growers, noting "attendance at this year's crafters' conference was up 40 percent over the year before, to more than 9,000 attendees."

If there is any doubt that craft brewing is attracting a whole new generation of beer consumers around the globe, it should be dispelled by the advise from a beer sommelier at a Barth tasting event in Germany.

To those who might not be familiar with the fact there are beer sommeliers, Ann George makes the point that "more and more hospitality groups have a beer sommelier as well as a wine sommelier."

As the sommelier quotes puts it: "You shouldn't drink our beers when you're thirsty. Our beers should be drunk in small quantities on special occasions."

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Microsoft leadership changes stir discussions of competition-collaboration workplace issue

Some are seeing the sea change in the leadership styles of the new CEOs of both Microsoft and the Bill & Melinda Gates Foundation as evidence that even the region's most competition-driven company might be acknowledging that the collaborative focus of workplace millenials could be superseding the competitive trademark of boomers.

Among those sharing that sense of a possible dramatic shift at Microsoft is John Buller, who has spent his life in sports and retail environments where keeping score and winning were the keys to success. But he admits now, as he observes what he perceives as a major workplace shift, that he was always dogged by the sense that somehow collaboration had a place in the success equation.

Anna Liotta

Buller was a top executive at the old Bon Marche retail chain, as well as successful restaurateur, president of Tully's Coffee, and in his collegiate days in the late '60s a Husky basketball star then an assistant coach.

He sees the ascendance of Satya Nadella to the top role at Microsoft and the hiring of Susan Desmond-Hellman as CEO of the Gates Foundation as significant.

So does Anna Liotta, Seattle author and speaker who counsels businesses on unlocking generational codes to enhance workplace effectiveness.

John Buller

"I think it's fundamental for Microsoft, it if is to have exponential growth again, to shift from combative to collaborative in its workplace environment," Liotta said. "Microsoft employees don't now talk with pride about working at Microsoft, and this newest generation will need attitudes and beliefs they share and need to be proud to be where they work and work together in a collaborative environment in order to want to stay."

As a recent article in Puget Sound Business Journal pointed out, "Nadella is a very different man from (Steve) Ballmer. Where Ballmer is bombastic and over the top, Nadella is understated and thoughtful."

Buller makes the point that a similar shift in thinking could have had a role in the selection of Susan Desmond-Hellman, M.D., plucked from her role as chancellor of the University of California San Francisco to be the first non-Microsoft CEO of the Bill & Melinda Gates Foundation.

Of course Microsoft isn't the only regional company where must-win attitudes have been the key to success. It's merely the major local company whose recent eye-catching changes in command at the corporate and foundation have sparked the opportunity for conversations about what lies ahead in the workplace culture.

It would be difficult to think of many successful companies in the Seattle area for which competitive juices haven't played a ke y role in their success.

Teri Citterman

Thus the thoughts about boomer competitiveness giving way to millennial collaborations inevitably stir conversations where doubt or disagreement are sometimes as much in evidence as agreement.

Buller, in fact, is an interesting persona to be focusing on the transition, which he is doing to the extent of packaging a seminar and producing a blog to help guide corporate executives.

Buller is intimately familier with culture changes since his role as senior team leader for Federated Stores and its The Bon outlets was to engineer one, guiding a shift from "a clerk culture to a sales culture," as he describes the charge.

It was 20 years ago that his Survival Guide for Bureaucratic Warriors was published, with chapters written on first-class flights as he crisscrossed the country to train employees on changing their culture.

"Warriors work for a passion in their lives while soldiers just take orders," Buller said, summing up the premise for the book, and suggesting that "the way to make millenials more passionate and engaged, becoming warriors, is to let them have ownership."

"It's a fallacy to suggest that competition and collaboration are diametrically opposed," Liotta said. "Millenials do love to win, but within that they love to also know their part in the winning, meaning millenials want a lot of feedback on how they are doing," Liotta said of the generation that numbers 76 million in the workplace. That number, incidentally, compares with 80 million boomers.

"A winning attitude is absolutely in line with an attitude of collaboration," she added. "Millenials just don't accept the bankrupt strategy of win at all costs."

Liotta comes by her generational savvy from birth on since she notes in her book Unlocking Generational Codes that "as number 18 in a family of 19 children, I started to experience generational impacts on life at a very early age."

She is CEO of Resultance Inc., where her consulting services and guidance on generational issues have brought her before business organizations around the country.

Another person who has explored workplace issues, but from the CEO's viewpoint, is Teri Citterman, whose recently publishedFrom the CEO's Perspective is a collection of interviews with CEO's from a range of companies on the challenges of leadership.

"A characteristic of millenials is that they expect their ideas will be heard or appreciated, even though they haven't necessarily earned the right to be heard or appreciated," said Citterman, also a GenXer.

"Yes, collaboration is replacing competition as a workplace theme, you can see that everywhere," she said. "competition is a four-letter word."

This discussion is likely to become more pervasive at lunch meetings and cocktail visits, particularly for boomers, or the even older generation tagged Traditionalists, who would have to change the codes of a lifetime to believe companies can win out over competitors without competition being the mantra.

As Buller and I discussed this over coffee for our interview, together we came up with the tagline: "In today's world you will have to learn to collaborate in order to win." 

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Lange-Vessella partnership that became IPCR lured to Seattle 25 years ago

It's been a quarter century since the unusual team of an academic prof and a medical doctor was lured to Seattle to launch what would became the Institute for Prostate Cancer Research (IPCR), where a world-class team and leading-edge initiatives have made Seattle a nexus for prostate cancer research and care.

 

Paul Lange, M.D. and Robert Vessella, PhD, had already been a team at the University of Minnesota for a dozen years when they decided in 1989 to accept an offer to come to the University of Washington to launch the collaborative effort that a few years later would officially become IPCR. By then it would be a collaboration between University of Washington Medical Center and the Fred Hutchinson Cancer Research Center.

 

Paul Lange, M.D.

In a sense, Lange and Vessella were medical opportunists in deciding to focus on a cancer for which they thought "there might be a light at the end of the tunnel," despite the fact that at that point there was basically no funding available for prostate-cancer research. "No one really cared at the time about an old man's disease," Lange recalled.

 

Appropriately but coincidentally, the 25th anniversary of the Lange-Vessella partnership in Seattle comes as IPCR is in the midst of a $20 million fund-raising campaign aimed at creating an innovative program for individualized treatment of prostate-cancer sufferers around the state.

 

Plus it was recently announced that IPCR will be part of a team of prestigious institutions to participate in a $10 million grant from the Stand Up to Cancer program, which is supported by the American Association of Cancer Research and the Prostate Cancer Foundation.

 

Robert Vessella, Ph.D

IPCR will be partnering with Harvard, University of Michigan, Sloan Kettering and London University, names that indicate the role that IPCR has come to play in prostate-cancer research around the world.

 

The image that has developed since the UWMC and The Hutch collaboration became formal as IPCR in about 2000 is such that there's a growing sense that it could well be the place where a cure for the disease, now certainly when rather than if, comes about.

 

IPCR ranks third in the country for federal funding, with about $10 million in 2012, and is in the top five in prostate-cancer funding, Lange says. Over the years, he estimates, at least $60 million, mostly from NIH, has come to IPCR, a number made more impressive by the fact it doesn't include the 50 percent "institutional overhead" that UW takes from the original grant amount. The Hutch takes 60 percent.

 

But ironically, IPCR has dramatically lagged in raising the private funds that the NIH views as a key to its own funding decisions.

 

"We are significantly behind the eight to 10 prostate-cancer research institutions in the country in keeping up with private fund raising, which is essential if we are to retain a world-class team and explore new ideas that need to be developed because they are not yet primetime enough for the NIH to fund," says Lange.

 

Thus the importance of the fund-raising campaign now under way called ACT-SMART, which seeks to raise $20 million over five years from private sources to create relationships with a dozen or more medical facilities around the state in developing individualized treatment programs for residents of various communities.

 

The goal of ACT-SMART is to sequence the whole genome of patients and their prostate cancers, focus on the most important abnormal genes in the cancer and then devise a targeted individualized treatment program, then patients are sent home to have their individualized treatment carried out in their hometown medical facility.

 

"We are going to use genomic medicine to determine what the patient's genes show, then develop targeted therapies aimed at the specific cancer," Lange said, noting that eventually the program will be extended to Oregon, then Idaho and Montana.

 

A couple of developments in the early '90s assured IPCR's emergence as a world-class institute in the field of prostate-cancer research and cemented a pre-eminent role for Lange and Vessella as globally recognized leaders in the quest for answers to prostate cancer.

 

One of those developments came in 1992 with an innovation called "rapid autopsies" that has attracted the attention of researchers both nationally and internationally as well as pharmaceutical companies. It's a process in which cancer tissue that has metastasized is removed from the bodies of a deceased prostate-cancer victims with the same speed and precision as organs are removed for transplant.

 

The roughly 100 such autopsies that Lange's team has performed since the process was pioneered at IPCR, and which are conducted at only one other institution in the county, allow harvested cancer cells to be implanted in mice. Lange says about 15 percent of the implants take, becoming what are referred to thereafter as "tumor avatars," and producing thousands of samples.

 

Another key development in 1992 was a partnership that emerged with Leroy Hood, who had recently arrived at the University of Washington, with funding from Bill Gates Jr, to found and chair the Molecular Biotechnology Department.

 

Hood, already internationally prominent as developer of the automated DNA sequencer that was the key to the human genome project, recalled in an interview how he and Lange, both heading departments at UW, got together at a retreat to discuss how genomics could be applied to prostate-cancer research.

 

"We decided to work together and I outlined on a napkin at dinner a genomic approach to prostate-cancer research," Hood recalls. "Then Paul and I agreed to help Michael Milkin, as he created a series of seminal meetings on the genomic approach to prostate cancer."

 

"Lee was hugely instrumental in putting us in the national spotlight," Lange said. "Thanks to a variety of influences, Lee decided to devote a large part of his translational research efforts to prostate cancer. The support of the Michael Milkin organization to the tune of about $12 million over the years was largely due to the participation of Lee and his group in our research efforts."

 

Hood continued to work with Lange and Vessella until he left UW in 2000 to found the Institute for Systems medicine, which he still heads.

 

It was in 1993 that Lange and Vessella began discussing with researchers at The Hutch the idea of teaming to form an institute. And that was also the year that the first grant, from the NIH O'Brien Center, was received, for $2.8 million in direct costs over a five-year period, at the end of which it was renewed again for another five years.

 

Lange routinely ascribes human characteristics to the cancer he seeks to conquer, possibly viewing the opponent whose ways occupy much of his attention as a worthy foe. Thus he characterizes the PSA test, which he helped gain approval for in testimony on its benefits before the FDA on several occasions in the early '90, as "allowing us to know what the cancer is thinking."

 

And in explaining to a listener that the prostate cancer his team deprived of the testosterone it needed to survive soon began a comeback, Lange's voice rises to exclaim: "It learned to live without it!" Then he continues to explain, replaying the excited frustration he likely felt at the time, as further research determined "no, it learned to make its own testosterone! Like the cancer said 'hey guys, we're going to get really sick if we don't do something about this!.'"

 

But that finding was a research victory because it indicated that the understanding that cancer needed testosterone to survive was accurate.

 

Perhaps by attributing those human characteristics to his foe, the victory over prostate cancer, when it comes, will feel more personal and thus more satisfying for Lange, whose personal battle included his having to undergo surgery for his own prostate cancer a few years ago.

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Angel-investor group fears SEC will change accreditation rules and shrink angel ranks

Although the Securities and Exchange Commission (SEC) hasn't yet proposed an increase in the financial resources required for an individual investor to be accredited, the Angel Capital Association (ACA) fears such a move may loom ahead and has been pressing its members to collectively protest such a step.

The ACA sees the issue as having the potential to dramatically deplete the ranks of what are officially called accredited investors, individuals who are free to make the kind of high-risk investments that fuel the funding of financially risky early stage companies that are key contributors to job creation. All angels are accredited investors

Dan Rosen

The issue is front and center right now because when Congress passed the Dodd-Frank Act four years ago, it retained the long-time "accredited investor" threshold of $1 million net worth and $200,000 of annual income but ordered the SEC to do a quadrennial review of the qualifications. The first of those four-year reviews is to be due to conclude next month.

Angel-investor groups successfully overcame an attempt to include in Dodd-Frank a change that would have basically disqualified what by some estimates would have been up to 50 percent of angel investors by boosting the accredited minimums to $2.5 million net worth and annual individual income of $400,000.

But Congress did include in what is officially the Dodd-Frank Wall Street Reform and Consumer Protection Act a change to preclude primary residences from the $1 million-net-worth calculation.

The ACA website plays the job-creation card in preparing for a possible campaign by urging members: "Do you believe in preserving the health of early stage companies and their role in job creation? Then join the Angel Capital Association campaign to 'protect angel funding.'"

Dan Rosen, chairman of the Seattle-based Alliance of Angels and a longtime leader in ACA, says "a change to make the accredited investor definition more restrictive is exceedingly bad public policy."

"This is a time when America needs to unleash innovation and create exactly the kind of jobs that high-growth startups provide," argues Rosen, who until a few months ago chaired the ACA public policy committtee . "Angels fund most of these high-growth startups, investing well over $20-billion per year." 

"We are not financial institutions in New York or Boston, we are individuals in every major city and town in the U.S. who invest not only our money, but also our knowledge and experience, to help these high-growth startups get off the ground and flourish," wrote Rosen, who is CEO and president of Dan Rosen & Associates, a technology investment and advisory firm

Although the multi-part mission of the SEC includes helping facilitate capital formation, the agency makes clear its "investor protection mission" has become most compelling, particularly after the excesses that led up to the "Great Recession."

Thus there is an amusing bit of irony as the SEC may move to "protect" a major segment of the high-net-worth angel-investor category by removing their "accredited" status while preparing to remove protections for scores or "unaccredited" investors by opening the door for them to do crowd-funding investment in startups.

Crowd funding is a concept spawned by legislation known as the JOBS Act, passed by Congress four years ago to permit entrepreneurs or a start-up business to raise up to a $1million a year by selling equity on the internet to up to 500 "unaccredited" investors. Some described passage of the bill and its signing by the president as a "democratization of investments." In essence, Congress felt those across the financial spectrum should all have a chance to own a piece of a company.

The ACA says a survey of its 12,000 members, who are the most active angel investors in the country, found that if the definition of accredited investor was changed to add an inflation factor, which is the standard being urged by those pressing for a change, more than 25 percent of its members would fall below the new threshold. The inflation factor would relate to the inflation that has occurred since 1972, when the accredited regulation first came about.

ACA, whose campaign to bring pressure against the change includes form letter and email template on its website, says such a change would be "devastating," particularly outside the angel-heavy population centers of New York, California and Boston. It claims the number of angel investors across the country outside those three areas would fall by one third.

Even so, not all angels oppose raising the bar for individuals to quality as accredited investors.

Steven J. Schueth, president of First Affirmative Financial Network in Colorado Springs, who has been a leader in the sustainable and responsible investment industry for more than 20 years and created the prominent SRI Conference that rotates annually around the West, is one who isn't sure a change would be bad.

"With my fiduciary duty hat on, I could make the argument that an investor with only $1 million in liquid, investable net worth is probably too small to be investing in private deals," Scheuth said in an email exchange. "I don't think someone with only $1 million has any business playing in this game."

I have assumed that increasing the qualification for accredited investor might have a large impact on sustainable and renewable startups seeking investment and asked Schueth if there might be less S-R investing.

"Perhaps there would be, but would that be bad?  Maybe for entrepreneurs who are looking for capital from less-than-the-most savvy investors," he said. "But would it be bad for investors who now only meet the minimum accredited investor threshold?  Not in most cases.  There's a reason those rules were promulgated in 1972-to protect some people from themselves."

There are some investors who with some portion of their portfolio seek higher positive impact and care less about risk adjusted returns," Schueth added. "When I talk with these people, I try to help them think about making these kinds of investments out of their philanthropy budget; or at least know that the likelihood of making little or no financial return is a high probability."

I asked Schueth, whom I had quoted in previous columns because of his reputation in the sustainable and renewable investments arena, whether he thought it was interesting that while Congressional direction may guide a boost in what it takes to be qualified investor, crowd-funding is opening the door, also at congressional direction, to let everyone in.

"I don't believe I have ever heard anyone claim that Congress is a rational beast," he replied. 

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Washington News Council founder looks to future of media oversight as WNC closes

The Washington News Council, the nation's last media-watchdog organization, shuts its doors this month at a time when the proliferation of social media, bloggers and self-styled online "journalists" may make the need for some sort of "critical observer" for their offerings more important than it ever was with conventional media.

John Hamer, who founded the organization in 1998 through one-on-one conversations with some of the area's most prominent community and business leaders to create his founding board, in many ways became a national torch-bearer for the concept of media oversight.

John Hamer

After 16 years of overseeing the News Council's successes and challenges, Hamer decided at the age of 68 it was time to step down, but a successor didn't emerge and so the board, guided by Fremont businesswoman and longtime chair Suzie Burke, decided it was time to shutter the organization.

He doesn't plan to retire so much as "change the method" of seeking to advance his cause, and suggests "the public needs to find new ways to engage in media oversight and maybe take the news council concept to the next level."

"Oversight has to become much more democratic, with much more public engagement," Hamer said. "If everyone can be a journalist in this social-media era, then everyone needs to become a media critic, or at least a media skeptic. They need to hold their social-media favorites to be accountable."

During WNC's early days, Hamer guided it to become the key to growth of the concept nationally, getting a $250,000 grant from the Knight Foundation to sponsor a nationwide contest to start two more news councils. California, which has since closed its doors, and New England, which metamorphosed out of a watchdog role, were launched by WNC.

And he created the concept of a "TAO of Journalism pledge," which provides for media, whether conventional, blogger or Facebook poster, to promise its audience that they will be "Transparent about who you are, Accountable for your mistakes, and Open to other points of view."

Hamer says the pledge has come to be adopted, including use of the TAO of Journalism seal, by a large number of high school and higher education publications. He hopes to pursue broader awareness of and commitment to the pledge.

"Basically what the News Council sought to promote was accountability, which incorporates all the key issues like truthfulness, integrity, accuracy," said Hamer, adding that those are the things that the public must now demand of the media entities they support.

But the News Council always operated on a financial shoestring, with Hamer having to serve as the equivalent of development officer as well as guiding day-to-day operations.

And the end might have come sooner had it not been for a $100,000 matching grant from Bill Gates Sr., an initial board member and constant believer in the importance of WNC's role, in each of the past three years.

One who isn't so sure of a process by which the public becomes watchdog for whatever their favorite media happens to be is workable is Ken Hatch. As a member of Hamer's founding board and a retired broadcast executive who as head of KIRO Inc., when it was a television-and-radio property owned by one of the nation major broadcasting corporations, was one of the most powerful media people in the region.

"This is a major loss to a civil society that believes in a balanced freedom the press," Hatch told me in an email exchange. "The loss of WNC allowed unchecked forces with money to have a power not healthy for our society. I fear for the future when there is no 'point-counterpoint' to create reason."

I was a member of the WNC board for several years after my retirement as publisher of Puget Sound Business Journal and Hamer and I discussed on various occasions how the organization might move beyond keeping an eye on conventional media and look to watchdogging the new media filled with journalistic wannabes.

The concerns about internet and social media integrity and accountability are not much different than concerns that have always existed about newspapers, broadcasters and similar communications entities.

A key challenge is knowing what motivates the writer ofsomething on the internet. One that routinely concerns me is when bloggers or others are paid to write something and there is no indication for the reader that "hey, I got money to write this."

Of course that sometimes happened, and still does, in what Hamer refers to as "legacy media," for example as when a newspaper might write a story that the subject paid for. Some in what I view as media myopia, might ask "Why does that matter," as if integrity should somehow not be a part of accuracy.

I once suggested to the publisher of a daily newspaper that there was an ironic opportunity for those in legacy media to carve out an indispensable role for themselves by occasionally, perhaps weekly, doing a review of new-media or blog sites to offer "trustworthy" and "non-trustworthy" blog sites. Perhaps using a panel of experts to evaluate those sites.

My sense was that those who really care about the legitimacy or accuracy of what they are reading might well look to experts for guidance.

As Hamer summed it up for me:

"In my view, everyone needs to become part of a new 'Citizens News Counsel,' or some such name, to hold ALL journalists (mainstream, bloggers, Facebookers, Tweeters, etc.) accountable for accuracy, fairness and ethics," he said.

"It's time to 'crowdsource' media ethics. But citizens need guidelines to know who they can trust."

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Female entrepreneurs at Zino event and visiting Irish entrepreneurs in the Seattle area spotlight

(Editor's note: This week's Harp is actually an entrepreneur-focused column dealing with my two favorite types of entrepreneurs - women entrepreneurs and Irish ones. Both are in the spotlight with developments this week and next.)

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Seattle-area women entrepreneurs came into sharp focus Tuesday evening at the Zino Society's first ever investment forum devoted exclusively to women entrepreneurs seeking angel capital. And a band of Irish enterpreneurs takes center stage in the Seattle area next week with an array of visits to local companies and a reception hosted by Seattle's Irish mayor.

 

The audience for the Zino event at the Columbia Tower Club was evidence that female entrepreneurs as well as female investors are no longer a rare breed in this area.

 

But Zino CEO and founder Cathi Hatch noted for the audience of mostly woman that national statistics indicate that companies with at least one woman on their founding team are about 18 percent less likely to attract equity investors than their all-male counterparts.

 

As the number of female entrepreneurs guiding start-up businesses in search of capital grows, the panel of expert judges that Hatch assembled to be on hand made it obvious that entrepreneurial success stories for women is not a totally new phenomenon.

 

Fran Bigelow opened her first European-style chocolate shop in Seattle 32 years ago and has over time become known by her industry organization as "the best overall chocolatier in the United States.

 

Renee Behnke brought her retail and food background together with her husband, Karl's, business background, to launch Sur La Table almost 20 years ago and grew it into a national company that they recently sold.

 

Although since neither Bigelow nor Behnke needed start-up capital, they differed from most of the entrereneur hopefuls in attendance last night. But the successes of both gave evidence that women have all the skills necessary to build hugely successful businesses.

 

The fact there's no shortage of female entrepreneur hopefuls was pointed up by the fact a dozen companies were selected to give elevator pitches to the attendees and eight had the opportunity for five-minute pitches.

 

The winning firm was Byndyl, "a digital media and payment platform delivering payments, ads, coupons and surveys to unattended retail," has already raised money

 

As for the Irish business part of this column, next week will find a delegation of about 100 Irish entrepreneurs visiting Seattle, with the highlight a reception hosted by Seattle's Irish mayor. Ed Murray, with a couple of local Irish bankers, as well as Mick McHugh, proprietor of Seattle's iconic Irish pub among the welcoming audience.

 

All the Irish entrepreneurs visiting Seattle, as well as Vancouver next week, are winners of the Ernst & Young Entrepreneur of the Year competition in Ireland, including the 2014 crop of 24 entrepreneurs.

 

Frank O'Keeffe, the E-Y Ireland partner who first envisioned the program of annual visits a decade ago, notes that while "joint ventures, new projects and investment have most certainly come out of the retreats," the goal was to boost Irish entrepreneurs to compete better at home with multi-national companies that have located in Ireland.

 

"Through our interaction with the very best Irish entrepreneurs, we began to notice the increasing threat (the multi-nationals) posed to our indigenous businesses to attract the best talent and maintain their market position," O'Keeffe explained.

 

"At the time, there was a need for a greater industry-led support system that could assist Irish entrepreneurs in growing their businesses both at home and in the global marketplace," he added.

 

"We realized that E-Y Entrepreneur of The Year (EOY) could develop beyond the award to become a strategic development programme for Ireland's leading entrepreneurs," O'Keeffe said.  

 

The entrepreneurs on the Seattle trip, which follows one last year to Chicago, Notre Dame and New York, are guiding companies from multi-million dollars in revenue to fast-growth startups.

 

John Keane, the retired Seattle-area businessman who has been the Honorary Irish Consul since 2009, describes the business connections between Washington state and Ireland as "strong and growing."

 

"That's not just because companies like Microsoft, Amazon, Paccar, Expedia have operations in Ireland, but also because there are over a dozen Irish companies that have operations in Washington state, such as Kerry Group, CRH, Sentaca, lotusworks and Sentaca," he added.

 

Most of the reception attendees are being invited by Irish Network Seattle, whose members of work in all the major business fields in the area, mainly high tech, but also in the areas like medical.

 

 "I hope the entrepreneurs will be encouraged by those they meet and what they see and hear to consider Seattle and Washington State they think of locating in America," he said.

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Patrick Patrick completes latest turnaround of a troubled bank, awaits next call for help

Patrick Patrick's retirement as president and CEO of Seattle Bank, which was on the financial precipice when he arrived on the scene in September of 2010, has now completed the latest chapter in a career of turning around troubled banks.

  

Patrick, now 72, figures he'd be interested in another turnaround opportunity and is quite certain there will always be banks in need of turnaround. And he thinks that perhaps what he sees emerging in the industry may continue to produce more of them.

pat patrick
Patrick Patrick 

"There will always be troubled banks," said Patrick in an interview following his retirement. "The question is the degree of trouble in determining if they need to bring an outsider in."

 

It took Patrick less than a year at the helm of Seattle Bank before he put together an unusual team of non-bank people, prominent local business executives who put up $50 million to recapitalize the bank. That provided the capital for Patrick to start bringing the bank back out from under the weight of soured real estate loans that had brought the bank under the thumb by regulators since July of 2009.

 

Since its establishment as Seattle Mortgage Company in 1944 by Ben Smith Sr. to help veterans returning from World War II to buy homes, the bank had been a highly regarded, family owned financial firm.

 

It became Seattle Savings Bank in 1999 but changed its name to Seattle Bank in 2009, shortly before the bank and its Seattle Financial Group holding company were placed under a cease-and-desist order and told to create a capital-infusion turnaround plan.

Now that he has turned the bank around and stepped, perhaps briefly, into retirement again, Patrick sees a familiar, troubling pattern re-emerging.

 

"We're going back to doing the same things we did when the financial industry got into trouble. Because competition is fierce and interest rates are extremely low, some banks are making loans on terms we shouldn't be considering," Patrick added.

 

Patrick's perspective extends back over four financial crises, with his first opportunity to assume the role of turnaround CEO coming after the savings and loan crisis of the early '80s when, in 1983, he was asked to take the helm at Seattle-based Prudential Savings, which was in danger of being closed.

 

Two years later, he found himself also overseeing Westside Federal as well, running both thrifts simultaneously for a year before melding Westside into Prudential and, on "Black Monday" in 1988, selling Prudential to Tacoma-based Pacific First Federal.

 

Thus the role Patrick played at Seattle Bank is one he's been playing over the 30 years, a role that could be characterized as the financial version of an old television western series called "Have Gun, Will Travel" in which the hero went from town to town to resolve problems created by the bad guys.

 

As I pointed out in a column on Patrick soon after he stepped in at Seattle Bank, in his case the "bad guys" have been those who've taken actions that jeopardized community banks thus putting at risk the important role such institutions have traditionally played in the economic health of their communities.

 

Not all his assignments have been successful, as his role immediately preceding Seattle Bank, guiding the hoped-for turnaround of Towne Bank of Phoenix, failed as the bank went down four years ago next month, two years after Patrick came in with the bank under the cloud of federal oversight.

 

"It was the target of one of the first cease-and-desist orders in the country and had one of the highest amounts of non-performing assets I'd ever seen," Patrick said. "In the end it wasn't possible for the turnaround effort to succeed."

 

As a career-long believer in community banks, Patrick expressed concern about their future in the 2010 interview, and retained that concern in the interview following his Seattle Bank retirement.

 

"Community banks are the framework of any town or city and the framework is in great jeopardy," he said in the 2010 interview, "even though not one dollar of taxpayer money has been spent on any problems that individual community banks have encountered. Any money that's gone to community banks has come from assessments and insurance premiums."

 

He has similar concerns still, noting that "many of the new regulations put forth in the past couple years have made community banking much more difficult."

 

"Sometimes the law of unintended consequences makes the cure worse than the issue," he said. "Without community banks, who is going to help the small businesses that drive our neighborhoods?  We can't doubt the sincerity of those who want to provide protection for everything, but there is a point where we create even bigger concerns."

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State securities regulators ready rules for crowd-funding opportunity for entrepreneurs

Washington State securities regulators intend to make sure that entrepreneurs anxiously awaiting adoption of the rules that will permit them to begin raising capital under new state crowd-funding law won't face any of the frustrations and disappointments that have followed passage of similar legislation at the federal level.

  

The bill under which entrepreneurs can raise funds up to $1 million a year in small amounts from in-state investors passed the Legislature, was signed by the governor last month and goes into effect June 12. But officials of the State Department of Financial Institutions have until October 1 to put in place the rules and the process under which the fund-raising can get under way.

 

Joe Wallin

In an effort to ensure that everything is done on schedule, Scott Jarvis, director of the Department of Financial Institutions, says even before the legislation goes into effect, his agency has begun the planning process for how the rulemaking will unfold between now and October.

  

Washington is now one of a handful of states where lawmakers have decided the promise of a new source of fundraising for entrepreneurs won't likely come about in any meaningful way at the federal level and thus have decided to act locally.

  

It's becoming increasingly likely that what Congress, with an election-year flourish two years ago, passed as the JOBS Act to open the door for entrepreneurs to fund their start-up businesses by attracting average investors on the internet will remain a promise unfilled.

  

It's now been almost two years since Congress passed the bill and gave the Securities and Exchange Commission 180 days to put together the rules for how entrepreneurs could fund their start-up companies via the internet to allow selling equity to large numbersof average investors.

 

Well, entrepreneurs around the country are still waiting for those rules to emerge from the SEC, which must pass rules to implement the legislation officially titled Jumpstart Our Business Startups.

And there is a growing sense that the details of compliance, once the SEC finally acts, will be so onerous on entrepreneurs that the costs of starting to raise capital on the Internet will deter many if not most would-be entrepreneurs.

 

One of those cost factors imposed under the federal act involves a requirement that entrepreneurs must use what are called "portals" basically a new kind of SEC-regulated website with unique responsibilities to oversee the entrepreneurial fund-raising activities, investor risk and monitor money raised.

 

Under the state legislation, economic development organizations and ports will serve as portals for the entrepreneurs at the outset, with the legislation's second deadline being methods of qualifying other portals by next April 1.

 

But unlike with the federal legislation, Washington state entrepreneurs raising funds won't be required to use a portal.

 

The bill allows eligible businesses to raise up to $1 million during any 12-month period and repeat the process in subsequent 12-month periods with accredited and non-accredited investors allowed to participate, up to the investment caps imposed by the federal legislation.

 

Joe Wallin, the Davis Wright law firm attorney who had the leading-edge role in bringing about the state crowd-funding statute, sees it as "potentially a good avenue for companies to raise capital."

 

Wallin, who wrote the first draft suggestion the legislation and included it in a blog post later testified on its importance in making the state more business friendly.

 

He suggests, as others have, that having a crowd-funding law in place to allow entrepreneurs who are residents of this state to sell small amount of equity to investors who must also be Washington residents could attract entrepreneurs from other states to move to Washington.

 

"States are vying to get businesses to move to their states to bring jobs and entrepreneurs who build businesses through crowd-funding will eventually also create jobs," he adds.

 

Rep. Cyrus Habib, the King County lawmaker who sponsored the bill, said "we're putting our state in a place to attract entrepreneurs, and to capitalize on their energy and brainpower. And ordinary people get to buy a piece of the action."

 

Since the Internet has been viewed as the vehicle of choice by entrepreneurs and crowd-funding advocates to reach large numbers of average investors most effectively, the fact that only Washington residents are eligible to invest in the Washington state-based companies creates an outreach challenge for the startups.

 

Wallin says "companies will have to be very careful" how they conduct their equity offerings, using either portals that only allow investors of a particular state to view offerings, or "work connection to connection in a manner that doesn't involve generalsolicitation to non-residents."

 

Part of the role of portals will be to ensure that a firm's annual fundraising via crowd funding doesn't exceed the legal $1million restriction.

 

If there's any doubt that optimism is the byproduct of entrepreneurism, witness the fact that venture capitalists and other investors are rushing into the creation and development of the companies whose business is serving as portals and helping provide services to those who will be hoping to raise equity under the eventually implemented federal act.

 

The VC's have poured millions of dollars this year into companies like Indigogo, Crowdbit and Teespring and other such crowd-funding support companies.

 

Wallin, the Davis Wright attorney, think portals will attract funding from experienced investors. "They are Potential great investments," he said. 

 

Unlike most rule-making hearings by state agencies, the crowd-funding hearings may draw substantial and boisterous gatherings.

As DFI Director Jarvis put it, "this is a crowd of young and enthusiastic supporters who have little knowledge of the process of rulemaking."

 

Part of the challenge for the agency as the rulemaking moves ahead is that some entrepreneurs may fail to understand that, as Securities Administrator Bill Beatty emphasized, "our mission is a dual mission: to protect investors and promote small business capital formation."

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Organization focuses on teaching women philanthropists to become angel investors

Pipeline Fellowship, a national "bootcamp" to teach women philanthropists how to become angel investors as part of a strategy to boost funding opportunities for female entrepreneurs who are starting for-profit social ventures, is being launched later this month in Seattle.
Natalia Oberti Noguera

 

The program, created in New York in 2007 and already in place in several cities around the country, is being put together in the Seattle area under the guidance of Susan Preston, a Seattle attorney long-prominent in helping entrepreneurs and a founder in the late '90s of the local women's angel organization called Seraph Capital Forum.

 

The Seattle launch of the Fellowship is likely to get a visibility boost because of a national award that Preston will be receiving as Small Business Person of the Year, selected by the Small Business Council of America. She will receive the award in Washington, D.C. in early May.

 

sue preston
Sue Preston

Preston returned recently to Seattle from the Bay Area where she had served as general partner of the California Clean Energy Fund (CalCEF) since its formation six years ago.

 

Pipeline Fellowship founder and CEO Natalia Oberti Noguera explained in a telephone interview that women who want to participate in the bootcamp must be "qualified investors," pay $4,500 to join the six-month program and commit two full days a month to learning about and getting comfortable with the process of angel investing.

  

She said the bootcamp includes presentations from various female entrepreneurs seeking start-up capital and at the end of the program, participants will each commit to invest. Each Pipeline Fellow commits to invest $5,000 in the same woman-led for-profit social venture at the end of the program.

 

The coming of the Pipeline Foundation program to Seattle will represent a reunion of Preston and Oberti Noguera because it was at a seminar Preston was conducting for the Angel Resource Group where Oberti Noguera was a student first learning about angel investing.

 

Preston, who has written a couple of books including Angel Investing for Entrepreneurs, apparently was a good instructor because it was soon thereafter that Oberti Noguera, at the age of 27, founded the Pipeline organization. Its impact and her successes have led to her being named last year as one of the "30 most important women in tech under 30" by Business Insider and being featured in the New York Times, Fast Company and onLatina.com's "25 Latinas Who Shine in Tech."

 

Oberti Noguera said women with the means to be investors "need to get much more comfortable with investing, not just donating," a reference to the practice of many such women to be philanthropists.

 

The requirement that the women be "qualified investor" means each must meet the requirement of the Securities and Exchange Commission of having a net worth of $1 million, excluding primary residence value, and have annual income of $200,000 a year, or $300,000 in couple income.

 

Women entrepreneurs need to pay a $40 application-processing fee for the chance to secure funding at one of the organization's "Pitch Summits."

 

Oberti Noguera explained that companies eligible to apply to be part of a Pipeline Fellowship Pitch Summit must be co-owned or founded by a woman, have a for-profit legal structure, have a social or environmental mission and be a U.S. company.


She says the outcome of the Pipeline Foundation efforts has been to "activate more local women angels in the cities where the foundation is operating and to create more capital for women social entrepreneurs."

 

Seattle is one four cities where the Pipeline Fellowship will launch in the coming months, with Los Angeles, Austin and Miami, along with Seattle, joining Boston, the Bay Area, Chicago and Washington, D.C., as locations that will help women of wealth begin to focus on how to invest in women entrepreneurs.

 

.Both Oberti Noguera and Preston described the launching of pipeline-Fellowship investing in Seattle as an important milestone, noting that alumnae of the program have gone on to join later-stage angel groups, and have shared their conviction that the angel-investing bootcamp gave them the confidence to take that bigger step.

 

"Seattle was ranked as the third best city for women entrepreneurs by one national organization and our presence will create additional funding for women led, for-profit social ventures," said Oberti Noguera.

 

The decision to launch in Seattle came after an event here last June to discuss such a step in a session at which Seattle attorney Barbara Prowant, who is president of Seraph Capital and has been a leader in efforts to increase diversity in the V.C. and angel communities, keynoted.

 

Oberti Noguero, who says that while she is a connection rather than being an angel investor, joked during our phone conversation that as a woman who is half Italian and half Columbian, she believes in "the hybrid business model."

 

With respect to Preston's forthcoming award, it is to honor an American businessman or woman for outstanding accomplishments in promoting a favorable environment for the small businesses of America.

 

"I am particularly pleased to have the Council recognize the value that is provided by angel and other early-stage investors, whose, high-risk capital is essential to build a strong start-up business environment," said Preston.

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Stuart Anderson, iconic name in restaurants, marking 50 years since steakhouse launch

More than a quarter century after he left the restaurant business, former western cattle rancher Stuart Anderson's name remains the iconic brand on the concept of affordable steakhouses.

 

And on April 1, Anderson, now 91 and retired with his wife, Helen, to a condo in Rancho Mirage, CA, will mark the 50th anniversary of the opening of the first Stuart Anderson's Black Angus near the Seattle waterfront.

Stuart Anderson

 

That first restaurant, in 1964, became a chain of 110 steakhouse restaurants across 19 states, each restaurant bearing the Stuart Anderson's Black Angus name and menus with the icon that became known affectionately as "the square cow," a squared cow's head inside a square frame.

 

The image has changed but the Black Angus part of the name, as well as the explanation of Anderson's philosophy in launching his steakhouse concept, are still touted on the menus at the 45 Black Angus restaurants, now owned by Los Altos, CA-based American Restaurant Group in six western states.

Famous "Square cow" logo.

 

I visited a couple of weeks ago with Stuart and Helen, his wife of more than 40 years, at their condo, looking west toward the San Jacinto Mountains. Anderson sported his signature mustache and cowboy hat, anxious to discuss his new book, which won't be out in time to mark the half-century milestone.

 

In fact, neither was certain what kind of a celebration of the special anniversary might be planned by the owners, but both enthused about the opening last month of the latest Black Angus in Brentwood, CA, where the chain brought him to be on hand and introduced.

 

"They still remember me," he laughed. "He was the star of the event," said Helen.

 

He wanted to talk about the book, Corporate Cowboy, the story of how he built the restaurant empire that became a national company with 10,000 employees and annual revenue of $260 million. It's actually a longer official title: "Corporate Cowboy Stuart Anderson: how a maverick entrepreneur built Black Angus, America's #1 restaurant chain of the 1980s."

 

Anderson speaks and moves slowly from the effects of a stroke he suffered five years ago but retains a firm gaze under the brim of his cowboy hat and a sharp mind. Helen refers to the recovery by the man she refers as "my cowboy" as "miraculous."

 

The book unfolds, as did his first one a couple of years ago, by his dictating to Helen or, if she's not there at the time, using a recorder from which she later transcribes.

 

He first tried his hand as an author when he produced "Here's the Beef! My Story of Beef, " a book he described as "fun and informative" that sold thousands of copies in the Black Angus restaurants. The book was meant to be an answer to the highly popular McDonald's commercial in which an elderly lady asks: "Where's the Beef?"

 

Anderson recalls that he was already in the business in Seattle, owning a hotel and a restaurant, but says he much preferred the restaurant part of the business.

 

So his strategy for his Black Angus concept was simple:

"A one-price steak, with six choices of cut, for $2," he recalls. "We got the meat from Australia, which had to be tamed a bit when it got here. We soon raised the price to $2.95 for a full dinner with a good steak."

 

The second Black Angus was opened in Anderson's hometown of Tacoma and it turned out to be a disaster, what Anderson now describes as a "dumb decision."

 

But the third, in Spokane, proved the validity of the concept and it remained for years the most successful restaurant in the chain.

Expsansion to other states followed, starting with California where San Diego was the launch city.

 

It was in 1987, after five consecutive years of his Stuart Anderson's Black Angus restaurants being named the top steakhouse chain in the nation in a poll by industry publication Restaurants & Institutions, that Anderson retired from the business.

 

By then the chain he had sold to Saga Food Services more than a decade before that had been in turn sold to Marriott Corp., which decided it didn't want the restaurant part of Saga's business and the unbundling made it not fun for Anderson any longer. He said he was working too much and traveling too many hours.

 

So he and Helen retired to his 2,400 ranch sprawled along Interstate 90 west of Ellensburg. He had bought the ranch in 1966 with the intent of raising the black angus cattle that would be served at his restaurants. But it turned out to be too great a challenge, for various reasons, so he continued to raise the cattle until he sold the ranch to Taiwanese interests, though to most travelers going past, it remains the Stuart Anderson ranch.

 

Anderson sought a comeback a couple of years ago, driven not by the desire to get back into the business in his late 80s but rather to try to save the jobs at a Black Angus he had opened in Rancho Mirage in 1980 when the California expansion was in full swing but had closed during the financial downturn

 

It was an effort that didn't last long, with Helen recalling that "after the Black Angus closed, Stuart thought he'd be helping the economy and jobs by re-opening the restaurant."

 

"After negotiating the lease, we opened in late February of 2010.  Stuart decided he was definitely too old to be back in this business," she said. "He jokingly said he forgot more than he knew, so in 2012 we were approached by a group who wanted to buy our lease and we were happy to accommodate them."

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Growing number of businesses filing for legal status to put social purpose ahead of profit

With a growing number of states enacting laws that allow companies to put a social purpose as a higher corporate calling than shareholder benefit, there's an emerging disagreement among proponents of such legislation over whether it should require, or merely permit, companies to have the social purpose dominate in executive decisions.

 

The initiatives to allow a higher purpose than shareholder value was in response to the traditional corporate-law constraints that make it the fiduciary duty of officers and directors to operate with the underlying assumption that their role is to maximize shareholder profits.

 

Washington was one of the first states to provide for-profit companies a legal status for a social focus, under the legal designation Social Purpose Corporations. As of March 1, 89 companies had filed as SPCs under the two-year-old legislation that permits companies' decisions to go beyond maximizing financial results to include positive social or environmental impact.

 

And Oregon's legislature passed a law this session to provide for "B Corps"(benefit corporations) and state Rep. Tobias Read of Beaverton, co-sponsor of the legislation, described it as designed to "legally protect companies that want to strive for more than just profits." The law imposes much tougher requirements on companies to make the social purpose pre-eminent.

 

The two Northwest states point up the different approaches to the goal of allowing otherwise traditional for-profit corporations to have a higher standards of corporate purpose, accountability and transparency.

 

California actually has two social-benefit statutes, one called the "flexible purpose corporation" that emphasizes companies may take a stated social purpose into account in corporate decisions, and the other providing for a Benefit Corporation, imposing a requirement for the role of stated social purpose in decisionmaking.

 

Proponents of the flexible form of legal filing say it seeks to "unleash directors from the risk of liability while permitting them to experiment more broadly with the right mix of doing well and doing good, without concerns of personal or corporate suits."

 

The benefit corporation law, under which virtually all California companies have filed, is based on the model Act created by a 501C3 called B Labs, co-founded in 2006 by Andrew Kassoy, who sought to create a "social hybrid" corporate structure movement.

 

Kassoy, who had a career as a private equity investor and most recently was a partner at MSD Real Estate Capital, part of the investment vehicle for the assets of Michael and Susan Dell, says his goal was to make it easier "for all of us to tell the difference between 'good companies' and just good marketing."

 

All states require, as part of the benefit-corporation filing process, a third-party certification and verification for the chosen social purpose of a company and B Labs plays that role for businesses in 19 states with the Benefit Corporation model, which is a legal status like C Corp, S Corp of LLC.

 

Benefit corporation is often confused with Certified B Corp, which is a certification conferred by third-party organizations like B Lab that a company has achieved appropriate levels of social or environmental performance, accountability and transparency

Every benefit corporation is required to publish publically an annual benefit report that includes "an assessment of [its] overall social and environmental performance against a third party standard."

 

Kassoy is critical of both California's flexible purpose corp. legislation, whose sponsors are now seeking to amend it, and Washington's statute.

 

"I think that both miss the mark because by creating a 'may' instead of 'shall' standard and by failing to require transparency about the overall impact created by the company, investors and other stakeholders don't have something clear to rely on," Kassoy said in telephone interview. "That creates confusion, suspicion of potential 'greenwashing,' (a term used to deride bogus environmentalism or social causes) and therefore impedes market adoption."

 

But Peter Smith, a partner in Seattle-based Apex Law Group, disagrees, while saying he is "a big fan of what B-Labs is saying and doing," but adding "I think Washington got it right by making it about flexibility, making the legislation permissive rather than prescriptive."

 

"What this legislation really is about is providing officers and directors legal cover in the event they make decisions based on the stated social purpose of the company," he added.

 

What the Washington legislation provides is that officers and directors of SBCs shall act in the best interest of the company, but may take into account social purposes.

 

Paul Shoemaker, who founded Social Venture Partners and now carries the title Executive Connector, suggests the emergence of the ability of companies to provide for a social purpose is part of an expanding array of ways "to fund, invest in and sustain social programs in the community."

"The most exciting, potentially impactful thing about all this is it's part of a more diverse, wider range of capital and funding mechanisms coming into play for businesses," he said.

 

Preston Thompson, guided a variety of global-enterprise units or Boeing, ranging from production and supply chain operations to international development, last year founded VentureScale to help with a focus on "accelerating the sustainable growth of ventures."

 

After leaving Boeing, Thompson had already founded a non-profit to create education opportunities in Afghanistan and a business making clean cook stoves for the developing world when Washington's legislation was signed into law.

 

Thompson founded VentureScale as one of the first 50 businesses formed under that legislation with the goal of helping to accelerate the sustainable growth of social ventures.

 

"Gauging the success of a business strictly by evaluating standard bottom-line profit isn't enough," says Thompson. "Maximizing shareholder value and evaluating overall contributions should include social and environmental returns in addition to financial returns."

 

None of the nearly 1,000 social-purpose designated companies in the nation is publicly traded, but advocates of the designation insist that as the trend continues, companies seeking equity capital and focusing on eventual exit strategies will become increasingly appealing to investors.

 

Stephanie Ryan, B Lab's senior associate in the Northwest, sees banks as particularly attractive candidates for Benefit Corp status because of the traditional focus of community banks on serving their local areas. She says she is currently in conversation with an Oregon bank about converting to that legal status, which requires a two-thirds vote of shareholders.

 

Kristopher Lofgren, owner of an Oregon business called Bamboo Sushi, commented after passage of the Oregon law on its importance to the image of business as well as its community value.

"What a lot of people don't realize when they look at the CEOs of companies as despicable people who make these decisions about money, money, money is that the laws are actually written so that's all they can do legally," Lofgren said. "They can be sued and lose their jobs, and the company can go under if they don't. B corp is allowing another voice to come into that fray."

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