John Buller, whose senior executive roles have ranged from higher education to sports to retailing to non-profits to community organizations, has experienced and helped reshape an array of cultures over the years since he arrived in Seattle to play basketball for the University of Washington.

And the immersion in those disparate cultures has led him to publish his second book, "Can You Survive the Age of Disruption," more than two decades and numerous disruptive involvements since his first book. "Survival Guide for Bureaucratic Warriors."

Buller prefers to describe his latest book as "a resource guide to creating the all-in culture," which he sums up as "all about outcomes that bring interpersonal skills that are collaborative in nature," although in his book he details elements needed to bring about an all-in culture.

"I have always been interested in leadership and culture building," Buller told me. "But I believe we are now experiencing a rate of change that demands a new way to look at how organizations manage the pace of this change."

"We are at a point where there are three generations in the work force at the same time," said Buller. "And within a few years we'll have four generations, and technology has now outpaced our ability to manage the rate of change."

Buller's first cultural "all-in" was college basketball, having been recruited in 1965 to come to UW. He led the freshman team in scoring and was sixth man, starting 10 games, in his sophomore year. But a viral inflamation in the heart lining impacted the rest of his playing career.

He spent two years as a graduate assistant for the Huskies while getting his MBA, then went to work for what was the Bon Marche, later Macy's,

Over the next two years and three promotions, he became divisional merchandise manager and eventually senior advertising and brand development executive. It was at The Bon where, he says, he had his favorite job.

"I was responsible for changing the 4,000 employees from a clerk mentality to a customer service mentality and I also got to do more than 40 two day team building workshops to support this cultural transformation.," Buller recalls. 

The Bon experience led him to write "Survival Guide."

"Changing the culture at The Bon was an effort to focus on service, both to our customers and our internal attitudes toward our fellow employees," Buller explained.  "The book was about my learning the difference between a 'Soldier,' someone who takes orders, and a 'Warrior,' one who has a mission or a cause. I learned how to be a Warrior."

He took the warrior attitude, and the details of building survival skills, to roles as co-chair and director of the organizing committee for the NCAA Final Four in Seattle in 1995, executive director of the UW Alumni Association, CEO of Tully's Coffee and CEO of the Seattle Police Foundation.

His non-profit leadership roles included chairing the board of Seattle Seafair and a dozen years on both the Seattle Center Board and the board of the Washington Athletic Club, where he currently serves as executive director of the 101 Club.

Buller chuckles as he explains his often used process of creating All-In by having the marketing and the accounting teams each put together a business plan for the company.

"As you might guess, there wasn't a lot of similarity between the two plans. So I'd leave the room and say 'I'll be back in 20 minutes. Fix it while I'm gone."

Buller suggests "organizational leaders seeking to create new cultures "are tasked with an almost impossible amount of required intelligences."

"Today's Leadership needs to be proficient in understanding the 'Meyers Briggs Profile' - knowing yourself and understanding others that was the intelligence lesson of the 1980s and early 90s - then, along came 'Emotional Intelligence,' which focused on street smarts vs. book smarts," Buller explained.

 "Over the last 10 years you would have also needed to be competent in understanding the 'Social Media' explosion. Then, it helps if you have 'Ethnic Intelligence,' as well as 'Religious Intelligence', and 'Immigration Intelligence' - and now, the biggest new understanding is 'Generational Intelligence.'"

Discussion of changing culture in the workplace automatically includes focus on millennials, those in their twenties and early thirties. In addition to that generation's obviously adaptability to technology, 

Buller suggests "they have a social consciousness and they don't want to work somewhere that doesn't fit that. They think broad workplace experience, meaning horizontal movement, is better. They are looking for the perfect culture and perfect outcome."

"If you don't believe the statement that if you can't change you're dead, look at what's occurred with the Fortune 500 over four decades," Buller says. "In 1975 the average age of the companies in that index was 68, now the average age is eight." 

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Normal 0 false false false EN-US X-NONE X-NONE It was logical and appropriate that the first air carrier to connect the Western United States to Cuba should be Alaska Airlines, given that carving out new frontiers and seeking new challenges has been the culture of the airline over its eight-plus decades.

“As we kick off our 85^th anniversary year, the inauguration of Cuba service marks the latest in some fascinating twists and turns to our route network,” said Joe Sprague, Alaska’s senior vice president for external relations.

Indeed the Cuba service launch brought back particular memories of Alaska’s far-out decision a quarter century ago to begin regular service to the Russian Far East, seizing what was then a thawing of relations between the two countries and the emergence of the Seattle area as a key player in that relationship that was beginning to verge on friendship.

Back in 1991, Seattle had already hosted the Goodwill Games competition between the U.S. and Russia, and business relations were being pursued. So Alaska launched summer service that year to Magadan, a sister city to Anchorage, and Khabarovsk, described as a European-style interior city that was the commercial and industrial hub for Russia’s Far East.

Part of the U.S.-Russia relations that emerged prompted creation of the Foundation for Russian American Economic Cooperation FRAEC), whose then-president Carol Vipperman recalled in an email exchange this week “the Alaska flights to the Russian Far East were very meaningful to both sides.”

The challenges of some of Alaska’s early flights, eventually extending to five cities in the rugged Far East of Russia, could provide comedy-script material, but also confirmed the pioneering spirit of Alaska’s people.

The inaugural flight to Magadan, 400 miles south of the Arctic Circle, turned up the fact the airport had no de-icing service. It was reported the pilot rounded up every bottle of vodka available and sprayed it on the wings with a garden hose.

And when Alaska launched service to Petropavlovsk, the largest city on the Kamchatka Peninsula, as the inaugural flight loaded with dignitaries was about to land, ground authorities told the pilot he did not have landing rights so the Alaska jet was forced to turn around and return to Anchorage.

Alaska was forced to end the service, on which the airline insisted it made money over the nearly a decade of doing business, when the Russian economy collapsed in 1998.

Vipperman recalls being on the next-to-last flight, with long-time Secretary of State Ralph Munro and some Alaska officials.

“We had come from a bilateral meeting, and at the Kamchatka airport we were taken off the plane to meet with the governor of Kamchatka and other officials so that we could talk about the impact the closure would have on their region,” she recalled in our email exchange. “While we sipped vodka, the plane sat on the tarmac waiting for us to come back.”

“I was personally sad to see the service to the Russian Far East end,” she added.

Alaska’s innovative outreach to the Russian Far East actually went back almost two decades earlier, in the early ‘70s, when the still young carrier began charter service to the Soviet Union’s Siberia as a result of what have been described as “secret negotiations” between the airline and Soviet Authorities.

When the U.S. Department of State learned of the deal, it decided not to block the plan, indicating it didn’t want to create a negative response from the Soviet Union. It might also be assumed the agency wanted to avoid a negative response from Washington State’s two U.S. senators, Warren Magnuson and Henry Jackson, then among the Senate’s most powerful members.

I emailed Sprague for some thoughts on the service that began in the ‘90s.

“The service to the Russian Far East was really something,” said Sprague, who was then with an Anchorage-based regional airlines. “It still amazes me to look at the map and think how far away from home base we were flying our old MD-80s for that service.”

Sprague noted Alaska’s long history of connecting communities, with the Russian Far East and now Cuba as key pieces, but also including launch of service to resort cities in Mexico, Hawaii, then points to the East Coast and Midwest.

The latest, of course, being the merger with Virgin America, which will create Alaska linkage of all the major cities on the West Coast.

“Our various moves have been good for the company, but we also like to think they have been good for the communities we serve,” Sprague said.

An example of serving communities is the fact that, despite filling it planes with passengers destined for popular vacation and business destinations, the airline continues to serve a special role in the infrastructure of the state where it was born as an airline connecting remote locations.

As Sprague noted: “We are proud that we still serve 19 points within the state of Alaska, only three of which are connected to the road system.”

 

Ted Baseler, president and CEO of Far-flung Ste. Michelle Wine Estates, guides what he proudly refers to as the winery “string of pearls” from an office in the French-style chateau that houses what may be the most visited winery in the world and reflects on the 50^th anniversary of the brand.

Baseler, who joined Ste. Michelle as marketing director in 1984, marked 15 years as president and CEO last year with a couple of key accomplishments. One was the special award Ste. Michelle Wine Estates received in November in London when it was presented the trophy as 2016 “United States Wine Producer of the Year” in the International Wine & Spirits Competition.

The other was adding the first Sonoma winery, Patz & Hall, to what Baseler proudly refers to as the “string of pearls” to describe the collection of estate wineries that stretch across Washington and into Oregon and California. The string is the Ste. Michelle Wine Estates company that holds the “pearls.”

While Chateau Ste. Michelle, on its 87-acre estate, is the state’s largest winery and has revenues in 2015 of $692 million and profit of $152 million, the role Baseler and his company have played in helping build Washington’s wine industry to more than 850 wineries valued at more than $10 billion is noteworthy.

And he thinks the Ste. Michelle numbers will double in the next decade, adding that he is “bullish on Washington because of both quality and prices,” adding “it’s hard to find a quality wine in the Napa Valley for less than $100 a bottle.”

In additiom, he notes that “America os going from beer drinking to wine drinking, particularly true with millennials.

The birth of the Ste. Michelle brand provides an amusing tale of the value of competition. There was a time when only the wine produced in this state could legally be sold at retail outlets. It was possible to go to the state Liquor Control Board and order a case of wine from California, which would then arrive several days later.

Washington wines were produced by an all-but-forgotten winemaker called American Wine Growers, which produced almost entirely fortified sweet wines, sometimes affectionately referred to as “rot gut.”

Then in 1967, The California Wine Bill was introduced in the Legislature with the goal of permitting wines from California and elsewhere to be sold at retail outlets. Opponents lamented loudly that it would kill the Washington wine industry and proponents countered “let’s hope so.”

But there were others who understood that competition would benefit all and AWG, that same 1967 landmark year for the industry, began a new line of premium vinifera wines under the name Ste. Michelle and contracted with renowned wine expert Andre Tchelischeff to guide production. Within two years, the wines were receiving “good marks.”

In 1972, a group of investors headed by Wally Opdyke bought out AWG and formed a company under the name Ste. Michelle Vintners, which became successful, soon to be bought out by American Tobacco Co., which was acquired by Altria Group in 2009.

Baseler’s business strategy in guiding his company’s growth is to retain the legacy and reputation of acquired properties and allow them to continue to operate somewhat autonomously.

“We’ve observed other big wine companies that have grown and consolidated their operations, and basically destroyed what they’ve acquired as the wineries lose their flair, their personality and their legacy,” Baseler said.

Another part of Baseler’s strategy is to foster the growth of the industry in this state by viewing the hundreds of wineries as family rather than competitors, expressing at one point the conviction that Ste. Michelle Vineyards needs all the other wineries for the state to have an industry.

An example of that support was In 2004, when a rare arctic storm wiped out the grape harvest for a dozen Walla Walla wineries, Baseler stepped up to sell his grapes to keep the wineries from facing ruin. As Baseler was quoted in a profile in Seattle Business magazine a few years ago, “We could have used the grapes, but this was more important.”

It was a key example of his realizing that without the smaller players scattered across the state producing quality wines in a growing number of wine regions (known as AVAs), a Ste. Michelle standing alone would be diminished.

But Baseler’s focus has not merely been on supporting wineries in this state, but also on bringing quality wineries in other regions under the Ste. Michelle umbrella, or string.

I once remarked, somewhat apologetically, to Baseler at an event where we were discussing wines, naturally, that my favorite wine was Pinot Gris and Pinot Noir from Erath Vineyard in Oregon. He smiled and replied “That’s ok, we own Erath.”

But the relationships extend beyond this country with partnerships with two quality European vintners. A partnership with Tuscany’s Piero antinori led to creation of Col Solare, which  Baseler describes as “the most beautiful winery anywhere.” Eroica Reisling is the result of a partnership with Mosel’s Ernst Loosen, a logical relationship for Chateau Ste. Michelle’s role as the world’s leading producer of Reisling wine.

Baseler has demonstrated that his commitment as a business leader is not just to the industry but also to the state, though he laments when pressed that the state makes little financial effort to support the industry.

In 2002, Baseler was approached about establishing a scholarship fund to support high-achieving, under-represented minority undergraduates at University of Washington. The story goes that Baselder said “no.” Then after a pause, the WSU alum and Regen at the Pullman school said: “but I’ll do it for UW and WSU.”

The program expanded in 2009 to include students attending any college or university in the state. Since inception, more than 100 scholarships totaling more than $3 million have been awarded. Students in the program, which is administered by the College Success Foundation, have a graduation rate of 85-to-90 percent.

Among recent achievements, Baseler led fundraising efforts for a Wine Science Center, a 40,000-square foot, high-tech research and education facility that was opened in June of 2015. The Center, located next to the Washington State University Tri-Cities campus, was a $23 million project developed as a public-private partnership.

Baseler’s comment about the Woodinville winery being “the most visited winery in the world” is supported by the fact that visitors to the winery total more than 250,000 but when attendance at the array of concerts held on the grounds is added in, the total reach about half a million a year.

Ste. Michelle has several events planned throughout the year to celebrate the anniversary, with  large public celebration at the Chateau over the Labor Day weekend, serving as a capstone of sorts as well as a grand re-opening of a major renovation that will be undertaken this year.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The award honoring the memory of the Major League Baseball star and manager for whom the Fred Hutchinson Cancer Research Center is named has been presented for more than half century, but it has yet to gain the visibility traction that would put it on the prestige pedestal that it’s supporters think it merits.

To students of baseball lore, the name Fred Hutchinson brings to mind a Seattle kid who became a star pitcher for the Detroit Tigers, went on to manage three big league teams, including guiding the Cincinnati Reds to the 1961 World Series, but succumbed to cancer in 1964 at the age of 45.

But to those afflicted by the disease that claimed his life, his name on the renowned Fred Hutchinson Cancer Research Center, created in 1975 by his brother, Dr. William Hutchinson, to honor his memory, has conveyed hope.

A year after Hutch’s death, three Midwest sports media admirers who saw him in action created an award to honor his memory, and ever since then The Hutch Award has been presented to a Major League Baseball player who exemplified the fighting spirit and competitive desire of Fred Hutchinson.

For years the award was given out annually in New York, starting with a flourish as the first honorees were New York Yankee legend Mickey Mantle and Dodger pitching great Sandy Koufax. But it was an event far from Seattle and wasn’t a fund raiser until, in 1999, it was brought back to Seattle and was moved to Safeco Field a year later.

But despite the fact the Seattle Mariners are a sponsor and, for the past 16 years, have hosted the annual luncheon where the award is presented at Safeco Field, attracting about 1,000 attendees and raising about a half-million dollars a year for The Hutch, it has not yet achieved the success its supporters think it could and should.

The missing link to bring the award to a visibility level equal to the prestige of The Hutch itself is viewed as active support from Major League Baseball.

And a new push to achieve higher visibility and broader support, including from Major League Baseball, is under way by officials of The Hutch as well as those who have long been involved in this event.

“We hope to take this prestigious award onto a national stage to increase the support and awareness around our world-class science at the Fred Hutch,” said Justin R. Marquart Deputy Director of Development at The Hutch. He was quick to note that local sponsors like the Mariners and Alaska Airlines have provided key support but that what direct involvement from Major League Baseball would mean is national sponsors.

Organized effort to gain visibility for what it is and what it does has not been part of the strategy for The Hutch as an institution until the last year or so, which is part of the explanation for the fact that this event hasn’t received a lot of media visibility, even locally.

Certainly the achievements of The Hutch’s “stars” have gained attention over the years. Those range from the Nobel Prizes in physiology or medicine that have gone to Donnall Thomas in 1990, Dr. Lee Hartwell in 2001 and Dr. Linda Buck in 2004, as well as the major awards across the medical industry to individual researchers. Perhaps the most compelling of advances for which The Hutch is known is the life-changing research of Thomas into bone marrow transplantation.

But research into cancer and related diseases has come to require huge amounts of money and the quest to attract those dollars from grants, individuals and events has come to require a visibility strategy and focus matching the research itself at the institutions where research and treatment are carried on.

“It is our goal to eliminate cancer as a cause of human suffering and death through prevention and curative treatments accessible to all patients,” as Marquart put it. And that “accessibility to all” is a major cost driver. Among those is the Hutch School, where patients and family members of those living temporarily in Seattle while being treated at The Hutch have classes, from kindergarten through high school.

The success the award has achieved since returning to Seattle is due to a large extent to the involvement of Jody Lentz, regional sales manager for Mass Mutual, who set up and chaired a committee to oversee planning for the event.

“We had about 25 to 30 people at the event at the hotel the first year and I thought ‘we should make this a fund raiser,’” she recalls.

Her plan included getting a hall of fame player as keynoter each year, and the event has generated attendance of between 1,000 and 1,400 and about $500,000 a year for The Hutch.

Her commitment to the event has stemmed from the fact that both cancer and baseball are part of her life. Husband, Mike, was the highest pick in the baseball draft ever from this state, being the second overall pick as the first choice of the San Diego Padres in 1975.

Her sons Ryan, Richie and Andy were all baseball All-Americans at the University of Washington and Ryan and Richie had careers that included high minor league play and time on the roster of the Major League teams that drafted them.

And she has suffered two cancers, the latest, thyroid, hit her in 2008, as that year’s event was in planning, after she had chaired and overseen the event the previous eight years.

“I just never got involved again,” she told me as we talked about her sense of frustration over the fact “I guess I figured it was time for others to have a chance to guide this event. But I do believe this event could be so much more as a source of funding for The Hutch.”

It was that 2008 event where John Lester, a native of Puyallup and most recently on the mound for the Chicago Cubs in this year’s World Series, was honored after being successfully treated at The Hutch for anaplastic large cell lymphoma.

Lentz is convinced that a lack of local visibility for the event is a reason that major local sponsors have not stepped up in major fashion to add value to the funds raised for The Hutch.

The 2017 event, an 11:30 to 1:30 luncheon, will be January 25 at Safeco with Boston Red Sox star Jim Rice as the Hall of Fame keynote speaker. The honoree for 2017 will be announced in the next few days.

Honorees are chosen by a vote of each Major League team to determine which player on the team meets the criteria and those chosen represent the finalists from which the winner is selected. Jamie Moyer is the only Mariner to be selected.

Last year’s honoree was Adam Wainwright of the Cardinals as the event raised just under $550,000, which The Hutch put toward faculty fellowships.

 

 

 

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 Few people had a more important role than Scott Jarvis in overseeing how Washington’s financial institutions weathered the twists and turns of the disruptions the Great Recession brought to the economy and the financial industry.

As director of the state Department of Financial Institutions (DFI) from 2005 until his retirement this week, it was the role of Jarvis and his team to closely monitor the financial health of the state’s banks and thrifts during that economic crisis. And on 20 or more occasions, they had to pull the plug when critically inadequate capital or severe loan losses threatened continued solvency.

Jarvis, appointed by Gov. Christine Gregoire to the DFI director role in 2005 and reappointed in 2013 by Gov. Jay Inslee, reflected on that crisis during an interview that amounted to a revisiting of the bumpy ride on which the financial downturn took financial institutions in this state, and the role his agency had in each of the “bumps.”

But the most high-visibility failure, the seizure of Washington Mutual in September of 2008 by the Federal Deposit Insurance Corp. and the sale of the assets of what was by then one of the nation’s largest banks to J.P. Morgan Chase, was without consultation with the state regulators.

And the closure that was perhaps the most painful for Jarvis and his staff, that of Frontier Financial Corp. in April of 2010, was unavoidable after the feds turned down what both the bank board and state regulators viewed as a satisfactory buyout plan.

“If I had to name a ‘down’ moment, it was the circumstances associated with the closing of Frontier Bank,” Jarvis said. “Willing and adequate capital was available for infusion but the Fed was unwilling to sanction the transaction.”

A key bright spot for the regulators was the successful emergence of Sterling Savings Bank from under threat of closure. The once high-flying Spokane-based institution had been placed under a cease and desist order in early October of 2009 and its chairman-founder and the CEO ousted.

Agreements Sterling secured to raise $730 million in new capital under new CEO Greg Seibly and a reconstituted board allowed both DFI and the FDIC to terminate the order and allow Sterling to proceed back on the road to healthy operation and growth, and eventual acquisition by Umpqua Bank.

In fact, Jarvis said of Sterling’s re-emergence: “Sterling’s success is proof that a cease and desist order is not a death-knell for Washington’s banks, but rather a call to action. When a financial institution’s leaders take aggressive, well-planned, corrective action, success can be found at the end in safe and sound business practices – and in strong community and employee support.”

The financial crisis had actually paved the way for Oregon-based Umpqua to move into Washington since the Bank of Clark County, closed by DFI in January of 2009 as the first closure in this state, reopened under Umpqua ownership. And a year later, when DFI took action against Seattle-based Evergreen Bank and Rainier Pacific Savings Bank, they wound under the Umpqua banner.

And Jarvis may well have had Umpqua, among others, in mind when he said: “No matter how dark the financial or investment environment might seem at any given moment, there are always individuals and organizations who see opportunities for success that benefit our economy and move us forward.”  

Of the circumstances that forced DFI to close the 18 banks and at least two thrifts that the department had to act on, Jarvis observed: “as a pituitary giant will tell you, sometimes there is a problem with too much growth.”

Jarvis, a New York native who graduated from Allegheny College and got his law degree from University of Puget Sound (now Seattle University), first joined DFI in 1997 after serving as an insurance regulator for the state Insurance Commissioner and General Counsel to the State Treasurer.  

In discussing the relations between state financial regulators and their big-brother counterparts at the federal level, Jarvis admitted that “overall, state regulators are concerned with the feds pre-empting powers of state regulators,” evidencing an unsaid sense that in some areas, the local regulators have a better sense of market needs.

A key area where that is important, he feels, is in failure of the feds to understand the need to right-size regulations for small institutions, where “the risk and exposure are dramatically different for small banks.”

“I think the number of small commercial banks will shrink further and small towns need these kinds of institutions,” Jarvis said.

Of the WAMU takeover by the Fed, Jarvis’ banking chief, Rick Riccobono, has been outspoken in his view that the Fed’s action and its sale of assets to J.P. Morgan Chase for what many viewed as a bargain-basement price didn’t need to have happened. Jarvis has routinely scolded Riccobono for making those statements to various groups, but intriguingly, hasn’t said he disagreed with the comments.

Under his leadership, DFI became a nationally-recognized leader in state financial regulation, which helped move the state from 17th in the nation to 10th on Washington's Corporation for Enterprise Development Scorecard Ranking in "Financial Assets & Income.” In 2012-13 he chaired the legislative committee for the Conference of State Bank Supervisors.

An area where Jarvis was obviously pleased to see the states step in when a void was being left at the federal level was in creation of local legislation to make it easier for start-up entrepreneurs to raise capital from local investors, basically a state version of the JOBS Act passed by Congress in April of 2012.

It was clear after Congress passed the legislation and told the Securities & Exchange Commission to enact rules to put the law into effect, that the SEC’s then chair, Mary Shapiro, didn’t think easing investor protections to enhance entrepreneurial opportunities was a good idea, so she foot dragged for several years.

Eventually a number of states, including Washington, decided they could do it better locally anyway, so they enacted JOBS Act-like crowd-funding legislation, strongly supported by Jarvis and his agency. He told me once that his role was to balance protection for investors with opportunity for entrepreneurial startups and that the balance wasn’t that difficult a challenge.

He was careful how the process of putting the crowd-funding into effect was carried out, with hearings, testimony and staff evalutions, though there have only been four companies that have filed to raise money under the state legislation.

In thanking Jarvis for his years of contribution, the governor named Gloria Papiez, who had served as Jarvis’ deputy for more than a decade, to replace him.

Dr. James (Jim) Bianco, M.D., was an up-from-poverty son of Italian immigrants, just out of medical school in New York, when he was recruited by E. Donnall Thomas to come to the Fred Hutchinson Cancer Research Center to join its pioneering bone marrow transplantation team. The work of the team would bring Thomas a Nobel Prize for Medicine and launch some team members, including Bianco, on careers pursuing cures for cancer. Bianco has resigned suddenly from the company he founded in 1991 to find a cure for blood-related cancers. During more than a quarter century as chairman and CEO of what is now CTI Biopharma, he became one of the area's most intriguing CEOs, a complex and controversial leader praised by those who experienced his moral and philanthropic support and criticized by others who focused on his high-spending ways. Bianco has just turned 60 and whether he or his board decided it was time for him to leave isn't certain, and really doesn't matter except as fodder for cocktail conversation for those who knew of him, or knew him. Among the latter there's a conviction, summed up by one mutual friend: "He'll be doing something interesting within a year and his interests are so broad, it won't necessarily be in medicine." Bianco's challenges in seeking to find new cancer-fighting innovations and his confrontations with regulators over those drug-focused efforts were well documented over time by local media and wrapped up in a Seattle Times article following his sudden departure on October 2. The headline over The Times' story, "CEO Bianco retires after 25 years running profitless CTI Biopharma," was, for those aware of the long adversarial relationship that existed between him and the media, an amusing final putdown. But the person behind the controversies is always more intriguing to me. So it has been with Bianco, with whom I visited frequently over the years, usually while planning for columns exploring various aspects of Bianco and his involvements, including but beyond his company's business performance. Bianco, who received his B.S. in biology and physics from New York University and his M.D. from Mount Sinai School of Medicine, was high visibility in his business and also highly visible in fund-raising efforts for his special causes, though not in a way to designed to attract personal credit. Those personal causes included the Hope Heart Institute, where he and his wife, Sue, won the Wings of Hope award in 2002 and where he's helped revamp the key fund-raising event, and Gilda's Club, the cancer-support organization whose continued existence was largely due to Bianco's personal support. In addition he was long closely involved in the annual Celebrity Waiter event during the years that the Leukemia Society was the beneficiary of the most successful event of its kind in the country. He was long involved with Gilda's Club, named for the late comedian Gilda Radner, and when I once asked him about that involvement, he explained "Gilda's provides that other kind of Medicine, the kind you can't get in hospitals or clinics but that place where family, kids, friends etc have support. It's a great cause, but because they don't do research they're not sexy so funding in these times is tough. That's why I stay involved. It's in our (CTI's) DNA." Bianco's struggles with media coverage, usually over some aspect of the fact that CTI raised and went through about $1.8 billion without turning a profit in its quest for a successful cancer drug undoubtedly played a role in the wild ride investors went on. The stock price peaked in the mid $80s but spent most of the past decade bouncing between a few dollars a share and a few dimes. As one Bianco supporter put it, "let's just say the media and Jim Bianco don't like each other very much," the tension possibly due in part to the fact Bianco enjoys the perks go with the CEO role and is a competitive kind of guy who doesn't shrink from a fight. The latter isn't surprising given his Bronx upbringing as a second-generation Italian kid in a household shared by up to 20 relatives at a time in an environment where "you were okay as long as you didn't leave the few square blocks of our neighborhood." Then he smiled as he recalled that his bus to high school made its closest stop 10 blocks from his home. "Every day I sprinted to the bus because if you couldn't get there faster than anyone else, you were a statistic." He admits he didn't do very well academically in high school, but by the time he found himself at NYU, he recalls that a major disappointment was the lone "B" he received among his "A's." Bianco had a love of the arts from a young age, an involvement that actually brought him into life-saving contact with his most famous patient and ultimately one of his closest friends. As I wrote in a column a few years ago, the first meeting between Jose Carreras and the young physician who would have a key role in the life-saving treatment for his rare form of leukemia turned out to be a bonding moment for the opera singer and a fan "blown away" at being his doctor. "I was a fellow at The Hutch working with Doctor Thomas when they told me a singer from West Side Story, the opera, was coming in for a transplant and since I was from New York, they thought I might know him," recalled Bianco. "Since I had been a season ticket holder at the Met, I immediately identified him and was blown away that I was going to have the privilege of being his doc," said Bianco. "When he met me he observed 'you're not from here, you dress different!' When I told him I saw him at the Met and I loved his performance of Carmen, we hit it off." That first meeting almost 30 years ago was likely on the minds of both Bianco and Carreras when the famed creator of "The Three Tenors" came to Seattle for a special event at Benaroya Hall. The event, billed as "A celebration of life and friendship," was to celebrate both the 25th anniversary of Carrera's victory over cancer and the 90th birthday of Dottie Thomas, wife of the Nobel-prize-winning doctor. The "private performance" recital for about 500 invitees who paid $250 each to support a research fellowship benefiting the Jose Carreras Research Institute and The Hutch, was sponsored by Bianco's company. "When I learned Dottie was turning 90, coupled with the fact that September, 1987, was the month I admitted Jose to the Hutch for his transplant, there was no better tribute to both of these milestones than to bring Jose back to the U.S. for a celebration," Bianco said.

 

Washington has been more attuned than most states to the reality that creating successful economies in rural communities results from helping them grow and nurture what they have rather than merely trying to attract businesses from elsewhere to relocate.     Maury Forman Now as Maury Forman, the man who built this state's image of focusing on rural economic development for nearly 26 years, passes the baton, a new program aimed at attracting successful urban entrepreneurs to mentor rural business people is seen by his successor as a "priority program" for the future. Recruitment and retention, generally in that order, have been the key words that guided the programs of economic development organizations in smaller communities across the country for years, usually with marginal success. But retention has been a generally amorphous patchwork. But for a quarter century as senior manager in the Washington State Department of Commerce and head of the Office of Economic Development and Competitiveness, Forman has kept his focus on enhancing the success of rural communities by emphasizing the words nurture and growth. Forman, who has served under five governors, a similar number of department heads and in an agency that has occasionally changed names to connote sometimes different emphasis, is retiring from the role he stepped into in 1991 and soon thereafter began crafting a rural-support image for the state. And his vision for rural enhancement has grown over the years, coming to emphasize the importance of entrepreneurs and more recently the importance of young people to their communities. He once shared with me the view that if programs are to enhance local economic development they "must nurture the belief that young people who grow up in rural communities can be guided to start businesses in their own community rather than moving to urban centers." "Just as young people are looking at new ways to enter the work force other than working for someone else, so too are communities looking for ways other than recruitment of businesses from elsewhere to grow their economies," Forman told me in an interview last year. Anne Nelson       Now Forman is turning over the role of guiding rural communities on successful economic development paths to Anne Nelson, who has started several businesses and worked as a community and economic developer before becoming an instructor at Walla Walla Community College in business, entrepreneurship and marketing. In an example of Forman's typical sense of humor, he says "she will essentially be serving those rural areas as Executive Innovator and Enlightener of Ideas Officer (or EIEIO as we say on the farm)." In fact, Nelson shared with me an incident in the Eastern Washington community of Dayton that she thinks may serve as a model for what she hopes will emerge as urban-rural mentoring. Seems a much-loved bakery in Dayton was closing because the owner was retiring. Nelson heard discussion about it at a local restaurant, was aware of a young woman who was hoping to someday own a restaurant and created a contact with retired Seattle restaurant owner Paul MacKay. The founder of El Gaucho and a chain of other restaurants had retired with his wife a few years ago to Walla Walla to a 100-acre spread to grow wheat and grapes. But once he learned of the Dayton bakery situation, MacKay soon got the young woman set up as owner manager of the bakery. "I see the support for that young, aspiring bakery owner from Paul MacKay as a model we can see more and more of across this state," Nelson said. "The key is that rural entrepreneurs are clear about their sense that mentoring is even more important than capital." The program, called Startup365, has been running for about a year under the management of Greater Spokane Inc., the region's chamber of commerce, aimed at connecting Spokane area business people as mentors for entrepreneurs and small businesses in Asotin and Whitman counties. But Nelson says Startup 365, created by the legislature, is aimed at retaining the intellectual wealth and economic vitality of rural areas by focusing on entrepreneurship and small business growth. "That will help communities flourish organically and will be a priority program that I can spend more time on, functioning a large part of my time in Walla Walla." "I do believe that urban-rural mentorship will be a key piece in building rural businesses, especially as I see the urban entrepreneurs being more in touch with the technologies and tools that help businesses be successful," said Nelson. One of those technology tools, Skype, she hopes will be employed at least once a week in connecting rural entrepreneurs with their urban mentors. The Spokane program is being supported by Avista, the Spokane-based utility that has a long track record of supporting business development in the region. But before Nelson gets to focus on developing the urban-rural mentorship idea, her first order of business will be overseeing in November the fifth annual Global Entrepreneurship Week activities in all 39 counties. Although in Washington, the annual celebration of innovators and job creators involving 88 countries last year became Global Entrepreneurship Month. Nowhere is GEW, or GEM in this state, treated as a bigger deal than what Forman put in place in Washington, which is the only state with events in all counties. Jack Schultz, whose focus on assisting rural economic growth helped him come to be known as the guru of rural economic development as keynoter at more than 400 conferences around the country and author of "Boomtown USA: The 7 ½ Keys to Big Success in Small Towns," credits entrepreneurial support as a key to rural success. Schultz, of Effingham, IL., whose Agracel Inc. is the largest industrial development company focused on developing projects and creating jobs in rural towns, told me he had not heard of a mentorship program like Startup 365. But Schultz, who said he has long been an admirer of Forman's, said "I think it makes a lot of sense and is something very innovative." Referring to findings from his visits to hundreds of small towns to gather information for his book, Schultz said in an email: "Embracing entrepreneurism in communities was a key factor which differentiated great communities from also-rans.  Increasingly, we are seeing those great communities taking it a step up by tying their local entrepreneurs up with their young people, educating them on both entrepreneurship and also the great things happening in the private sector of their towns."

John Stanton and Mikal Thomsen were in their late 20s when they teamed up at McCaw Cellular to become part of the birthing of a fledgling communications technology whose growth globally they helped guide through several major companies over the next 20 years, becoming iconic figures in the wireless industry.

Now just into their 60s, both have parlayed their business success into owning and guiding professional baseball teams, what they might well agree is a passion that rivals their business focus.

A business focus remains, however, as they continue to manage their Bellevue-based wireless venture and investment firm, Trilogy Equity Partners, formed by a collection of long-time wireless partners after the sale of their Western Wireless to Alltel Corp. in 2005.

Thomsen once told me that the opportunity six years ago to create the ownership team that bought the Tacoma Rainiers was like his “dream come true.” He would be owning his hometown team that he had grown up rooting for from the time his dad took him to his first game at age three. That was the year that the then-Tacoma Giants returned after a 55-year absence.

Stanton, who will soon assume the role of CEO of the Seattle Mariners after the ownership group he leads completes its purchase of the team from Nintendo of America, also recalls attending the games of his hometown team with his father. That was in 1969 when, as a teenager he became a fan of the Seattle Pilots in their first and only year of existence and recalls crying when they left town for Milwaukee.

Thomsen would undoubtedly echo Stanton’s “I am first and foremost a baseball fan” comment  that he made to the media gathering at Safeco Field when he was introduced as the leader of a 17 member local group that would become 90 percent owner of the team and he become the CEO, once Major League Baseball owners bless the deal.

Thomsen and his wife, Lynn, and Stanton and his wife, Terry Gillespie, are all alums of McCaw Cellular in the ‘80s and are now on the team of co-owners of the Tacoma Rainiers, though the oversight of the franchise, including attending many games and spending about 10 hours a week in the office during the season, falls to Thomsen.

The owners are fortunate that the baseball team acquisition included Aaron Artman as club president, a former Microsoft executive who oversaw the $30 million renovation of Cheney Stadium and remained with the new owners in the role of president.

Stanton’s and Thomsen’s baseball involvement extends across the state and all the way down to the West Coast League, an amateur collegiate summer league, where they are among owners of both the Walla Sweets and the Yakima Valley Pippins.

But it was when Thomsen had the opportunity to put together the purchase of the Tacoma Rainiers in 2011 that he turned to Stanton and his wife, an avid baseball fan herself, to become part of the ownership group.

Thomsen has immersed himself in his hometown baseball team and has enthusiastically committed to its increasing success, despite being the smallest market in far-flung Pacific Coast League and being the closest Triple-A team to a major league city.

In fact, the Seattle Mariners and the Rainiers are not only geographically close, which Thomsen admits may sometimes cost the Rainiers attendance of fans heading for Seattle, but close in that the Rainiers are the Mariners’ triple-A farm team.

As Thomsen puts it: “Most of the Rainiers fans are Mariners fans who enjoy keeping up with both teams and hearing about the players they saw in Tacoma performing with the major league club. I think the nearness of the M’s cuts both ways.”

In addition, the relationship is good for the Rainiers’ bottomline since the Tacoma roster is determined by and players’ salaries paid by the Mariners.

A lot of the changes brought about since Thomson’s group bought the team relate to community things, but he is pleased about what has happened in the stands and on the field.

At this point, atop PCL pack, the Rainiers seem headed for their first playoff appearance since Thomsen’s group bought the team, though Thomsen cautions that “it’s a long way from certain. We are only three games up on Fresno.” Plus the team appear on the way to another franchise attendance record, though beating the 352,000 attendance mark of last season is well behind the nearly 680,000 of the Sacramento River Cats.

In addition, Thomsen notes that the decision by the ownership group three years ago to build a new set of stands in left field “has been a stunning success,” adding that he celebrated his 60^th birthday there in early May this year “with a couple hundred friends.”

He says the change of the team’s logo two years ago to “the now somewhat iconic ‘R’” has helped drive merchandise sales “through the roof.”

In terms of community involvement, he says the Rainiers “teamed this past off season with Tacoma Parks, the Cheney Foundation and Mary Bridge Hospital to add a playground behind the right field berm that includes a whiffle ball stadium,

“It is packed for most games and open as a public park when games are not going on in the stadium,” he adds.

“The community views this as a partnership and we go out of our way to be great partners,” Thomsen says with obvious pride.

 

Alaska Airlines’ goal of winning friends and influencing people in the Bay Area, whose hometown airline is about to be absorbed by the Seattle-based carrier, began in earnest Tuesday night in San Francisco as Alaska executives and board members hosted a gathering for local leaders.

Some 250 business, political and community leaders were on hand at the Four Seasons Hotel in San Francisco for an event whose theme was “Flying Better Together.” The goal of the gathering of Bay Area who’s who was for them to meet and begin to get to know the leadership of the airline that is buying Virgin America, the Richard Branson-founded carrier that began service as San Francisco’s hometown low-cost airline nine years ago this month.

During that nearly a decade of service, Virgin built what many in the Bay Area have described as “almost a cult following,”with many regular flyers enthusing that they “love Virgin.”

Aware of that challenge, Alaska CEO Brad Tilden and his executive team have sought to express sensitivity to the cultural issues and the initial backlash from Virgin fans. That awareness was pointed up a few weeks ago when Tilden told the Wings Club, a group of aviation professionals in New York, that he was thinking of running the Alaska and Virgin as separate airlines within Alaska Air Group.

Such an outcome may or may not still be a possibility, but when I asked Joseph Sprague, Alaska senior vice president, after the Tuesday event, about Virgin continuing to function as a third carrier, he said: “ Initially it will be a third airline but by 2018 it will be merged into Alaska.”

But Alaska leadership is playing up a cultural fit they see existing between Alaska and Virgin, rather than addressing the different styles.

Sprague said “a lot of the integration pre-planning work has revealed an encouraging number of similarities from which we can build.” 

He noted that Tilden, in his comments to the group Tuesday, pointed out three such similarities: “both have an obsessive focus on the customer, we both want companies that are employee-driven and we both have a strong leaning towards innovation around the customer experience.”

Alaska’s San Francisco community gathering came exactly s week after shareholders of Virgin America approved the acquisition by Alaska Air Group, with Virgin’s chairman announcing the voting results at a brief shareholders meeting on July 26.

That Virgin shareholder approval was the next-to-last major hurdle for the takeover, with the remaining step being U.S. Justice Department approval. Closing by October is expected for the $4 billion deal ($2.6 billion in cash and the rest in assumed debt and other costs) that Alaska had to put together to beat out Jet Blue.

It’s quite possible that the shadow of Delta Airlines’ seeming predator pursuit of Alaska that left key Alaska supporters concerned Delta was seeking to force a takeover played a role in Alaska’s decision to acquire Virgin America for a very large premium.

But in addition to likely ending concern about Delta coveting a takeover, Alaska also gets Virgin’s lucrative California routes as well as keeping Jet Blue, the losing suitor in the Virgin bidding contest, from acquiring the routes.

In fact, it’s perhaps amusing to consider the community response if Delta, after a hostile takeover of Alaska, held a reach-out event with the theme “get to know us.” They’d have faced a ferociously hostile audience in Seattle.

But obviously Alaska, which has been successfully serving the Bay Area from three airport for years, isn’t perceived as a bad guy, more just a carrier that locals don’t know a lot about other than it has an excellent record in all the areas airlines get rated.

In fact, as Phyllis Campbell, Alaska board member and Pacific Northwest chairman of JP Morgan Chase, put it after the event: ‘I think it is emblematic of Alaska Airlines to reach out to the community in a spirit of collaboration and collegiality. Having dinners like this send the message that we want to be the best airline going forward for the Region and also the best citizen in terms of community partnership.”

In fact, the event was apparently successful enough from Alaska’s perspective that Sprague said “we will likely do additional events, both of our own and sponsoring others.”

Still there are Virgin supporters whose love affair with the airline was partly due to the fact it was the Bay Area’s hometown airline. And the takeover will mean not just the end of Virgin’s “hometown” ties, but also that California will no longer have an airline based in a state that has served as home to a variety of important carriers over the years.

As Mary Huss, publisher of Puget Sound Business Times, summed up when I asked her about it: “I think people were very proud that Virgin chose to locate and start up here when it did.”

But while Jet Blue lost the bidding to Alaska, it is seeking to woo Virgin fans away before Alaska can convert them by looking for ways to exploit what it senses as uncertainty of flyers about the transition. It has been touting giveaway deals to potential frequent users of Jet Blue’s longhaul service from New York to San Francisco and Los Angeles, including its tongue-in-cheek wooing of Jet Blue “virgins,” those who haven’t previously tried Jet Blue.

Stephen Vella, a congenial Brit who spent his career building airlines before turning his attention to creating flying mansions for the global elite, is the man whose Kestrel Aviation Management oversaw creation of the first VIP interior on a 787-8 Dreamliner.

The first VVIP outfitted BBJ, as its officially referred to, has gotten global visibility for those who partnered with Vella’s company, which had turnkey responsibility for the project from purchase of the plane to planning and design of the special interior to meet the requirements of the Asian client who will operate the aircraft. The partners included Greenpoint Technologies of Kirkland and Pierrejean Design Studio of Paris.

The specially outfitted Dreamliner is back in Moses Lake, where the work to install the unique interior was done, as it awaits final signoff by the FAA and final closing of the sale to an undisclosed owner.

“Undisclosed owner” is the usual description of individuals, countries or companies who decide they wish to own a castle in the sky and contract with Vella and Kestrel to manage the purchase, design and delivery of the aircraft. Nohl Martin, Vella’s vice president for business development and communications, says outfitting the special interiors can cost as much as the airplane itself with the finished product, once the widebody is aloft, sometimes described by buyers as airborne oases of peace.

But these are oases that are reserved for the elite, both in stature and resources, and the fact they seek out Vella has made him a valued relationship for Boeing, but also for Airbus, since the contract for design and implementation of one of these widebody interiors begins with the purchase of the plane itself.

I had an opportunity recently to interview Vella while he his partner Martin, a longtime friend of mine, were on a visit to Kirkland, where she has family.

The Dreamliner, representing the first conversion of a composite and nearly all-electric aircraft to incorporate a high-end cabin and thus requiring virtually the entire focus of the Kestrel team for the past two years, is the 11^th widebody conversion that Vella’s team has managed from purchase through entry into service. The company has also done 10 narrowbody VVIP cabin conversions.

But as communications vice president Martin points out: “Sadly it is a sector that rarely allows us to publicize our work -- until this 787 project.”

Visibility was not a problem for Vella when he was turning around airlines, particularly the nearly 15 years he spent helping turn Qatar Airways from a struggling, five-plane regional airline into one of the handful of the world’s Five Star airlines.

When Akbar Al Baker, Qatar’s group chief executive, was tapped by the Qatar government in  1997 to take over the failing airline, he contracted with Vella, who functioned for the next 15 years as basically the airline’s COO, doing the long-term planning, fleet management, overseeing brand development as well as mergers and acquisitions.

By early this decade, Qatar Airways was operating 150 planes with another 200 on order, producing billions of dollars in sales for Boeing, but also for Airbus since the fleet, Vella estimates, is about half from each manufacturer.

Vella, 62, is a native of Gibraltar, the British Overseas Territory at the southern end of the Iberian Peninsula, and he explains that, despite being a citizen of the United Kingdom, Spanish is his first language.

His upbringing in Gibraltar and his fluency in Spanish, along with a healthy dose of self confidence, allowed him to build his reputation in the airline-turnaround business early.

He recalls that he was still in college when he took time off to visit with an official the prime minister back in Gibraltar and convinced him to grant Vella a Masters scholarship in return for assisting the City architect in redesigning the airport terminal.

After graduation, he approached executives of British Caledonia and pitched that the fact he was bilingual would allow him to launch the airline’s Latin America routes.

He recalled with a chuckle that the pitch allowed him to land a job at a time when there were no jobs to be had and while he worked for peanuts, he was able to see the world.

By his early 30s he had become general manager of British Caledonia’s fleet management division, but at that point left to start his aviation consulting firm and early on helped Richard Branson acquire his first 747.

Vella has turned around eight airlines, including Qatar and the Spanish airline Air Nostrum, a Iberia affiliate, which is now the largest regional carrier in Europe, and started several airplane leasing companies, including one for Rupert Murdoch.

I asked Vella to give me a sense of what he thinks the future holds for the industry and he offered a couple of predictions. One, Asia is a fertile field for new airlines to come into existence. And he suggests that in this county we’ll see consolidation bring the industry down to four large airlines. He declined to name those he thinks will compose the final field of four.

 

Just as the races for state and national offices in the November General Election may demonstrate that anger can trump reason, voters in Oregon will be faced with deciding a ballot measure that will test whether anger at big business over things like soaring executive compensation exceeds logic.

At issue is IP28 (Initiative Petition), which targets Oregon's biggest corporations — roughly 1,000 by the state's estimates, or about 4 percent of businesses. Those with $25 million in Oregon sales would pay a minimum $30,000 tax, plus 2.5 percent on anything above that threshold.

In essence, it would be a tax on gross receipts, like Washington’s business & occupation tax, generating an estimated $6 billion in new revenue. Except in Oregon it would be in addition to the tax on personal and corporate income and would boost corporate tax collections more than five-fold.

As my friend Don Brunell put it in his latest column, which alerted me to the fact the measure had been cleared for the November ballot by collecting the required 130,000 signatures, “Washington’s next economic development plan may be written by Oregon voters next November.”

His point was that “Oregon voters need to remember that Washington and California have heavy concentrations of large businesses and stand to benefit from passage of IP28 and that while all parts of Washington would gain, the corridor between Vancouver and Longview could be the biggest winner.”

Brunell, retired president of Association of Washington Business, in his more than a quarter century at the helm of the state’s largest business association saw all the off-the-wall ideas for taxing business. But it’s as a longtime observer that he shakes his head at this proposal, noting the tax scheme “would transform Oregon from one of the nation’s lowest business-tax-burden states to one of the nation’s highest.”

Organizations that purchase products and services from those major businesses would undoubtedly see their costs increase and thus would need to increase their price for items resold to Oregon consumers. In response to this, businesses purchasing goods in Oregon may opt to leave the state or relocate some or all of their facilities to avoid the increased cost of doing business in that state.

IP28 is sponsored by Better Oregon, a labor union coalition led by the Oregon Education Association, and targets “big business”.  Proponents claim it would tap a tiny portion of Oregon businesses while bringing a huge revenue boost to cash-strapped public education, health care and senior services.

The non-partisan Legislative Revenue Office, in evaluating similar proposals to IP28, has forecast job losses should a gross receipt tax pass.

Former Washington Gov. Mike Lowry, who despite being perhaps Washington’s most liberal governor carried an understanding of the importance of nurturing big businesses as the creators of better-paying jobs, offered his classic belly laugh when I called him for his thoughts on the initiative.

“We always looked to Oregon for progressive ideas but this would represent the total opposite,” Lowry said. “The gross-receipts tax is about the worst tax there is.”

Amusingly, Lowry understood how to use the tax as a whip. In his first year in office he sought to have the Democrat-controlled legislature extend Washington’s sales tax to service businesses like law and accounting firms, which used their lobbying clout to beat back the effort.

But they paid a price by having the lawmakers impose the highest b&o tax rate on services, a payback in the form of a 2.5 percent rate, which though now reduced to 1.5 percent remains the state’s highest rate, reserved for service businesses and professional gambling.

Most gross receipts tax rates around the country are relatively low when compared with the Oregon proposal’s 2.5 percent rate. In Washington, it ranges from 0.138 percent to the aforementioned 1.5 percent. Thus if the measure were to pass, the tax burden of operating in Oregon would increase dramatically when compared with other states.

Proponents argue that “IP28 would modestly raise the effective tax rate of large corporations and use the added revenue to fund Oregon's crippled public school system, provide services to seniors, and extend health care coverage to 18,000-plus children.”

Problem is if it comes to be marketed to voters as “the big-business tax,” the result could be that anger overrides common sense for voters, among whom would be many that would face loss of their jobs if the analysis of business reaction proves true.

The ballot proposal comes as raising taxes on wealthy individuals and large corporations is at the forefront of a national debate — especially among Democratic progressives, including much of Oregon's electorate— about how to close the gap of economic disparities between rich and poor in the post-Great Recession era.

And if there is a doubt that anger at big business underlies the measure, and leaves concern about the logic voters will bring when they mark their ballots, supporters point to the current difference between growth in corporate profits vs. growth in family income in Oregon. They say it’s time big business takes on its fair share of the tax burden to help pay for education and social services.

Business people in Southwest Washington are not only looking to gain business if the measure is approved, they are having some amusement thinking about it.

When I talked with longtime Vancouver businessman Michael Worthy about it, he chuckled and offered that the two-state effort to agree on financing a new I-5 bridge across the Columbia could be solved by letting firms that would want to move operations out of Oregon might want to pay for improved transportation they’d need.

And when I asked Brunell why he thinks intelligent voters would go for a tax that would likely impact them, and perhaps their jobs, he replied: “I suspect, knowing Oregon a little better by living down here in Vancouver, there is a reason for the bumper sticker: ‘Keep Portland Weird.’”