Cash Connection: Insiders say lobbyist's political vendetta could decide Telfer-Knopp race

Last year, when Chris Telfer locked horns with the most powerful lobbyist in the state, political insiders in Salem thought it would blow over. After all, the issues at stake weren’t life or death. The dust up was, in fact, over something as silly sounding as a hookah bill.

But what appeared to be just a run of the mill “heat of battle” scuffle has shaped one of the most interesting and unlikely races the region has seen in years—a pitched Republican primary for the District 27 senate seat that represents Deschutes County in Salem.

The story would be interesting enough if Telfer’s run-in with lobbyist Mark Nelson had simply cost her his financial support, and it most certainly has—he’s thrown his weight behind Tim Knopp, Telfer’s challenger and helped funnel stacks of cash into his coffers.

But more than that, the support of Mark Nelson—a man who reps big tobacco, Anheuser Busch and Koch Industries, and is the de facto head of a pro-business lobbying group called the Oregon Committee—is seen by a number of lobbyists, legislators and Telfer herself as a “king-maker” whose political backing will give Knopp the oomph he needs to bust into Salem, change the GOP leadership and remake the Republican party at the state level into a no holds barred anti-tax, pro business consortium.

“They’ve decided to get rid of me and put Tim Knopp in there so he can take over the caucus,” said Telfer.

With just days before the ballots are counted, it looks like a very real possibility. Knopp has raised $150,000 to Telfer’s $50,000, according to the Oregon Secretary of State’s online record of campaign contributions and expenditures, and Knopp says there’s more rolling in between now and election day.

He’s pulled down $25,000 from Loren Parks, a Nevada businessman and far-right Republican. He’s gotten $5,000 from Koch Industries, and $5,000 from Reynolds American, the tobacco giant, and a variety of contributions from PACs connected with Nelson, according to the secretary of state’s campaign contribution records and that same agency’s registry of lobbyists’ clients, as well as lists of Nelson’s clients provided by other lobbyists and legislators.

Nelson, who also happens to be Deschutes County’s lobbyist in Salem, did not return messages left with his staff, voicemails or emailed requests for comment on this story.

In addition to his financial lead, Knopp has also been polling, and things look good for him, he said. He added, though, that the only poll that matters is the one ending at 8 p.m. on May 15. Maybe. But making an enemy of Mark Nelson, whom Telfer had, in earlier times, worked closely with to fight tax increase Measures 66 and 67, has cost Telfer a critical vote—one that’s put her seat in jeopardy.

HOOKAH BILL INFAMY

No one expected the hookah bill of last summer’s legislative session to become something like a lynchpin as the session grinded to a close, or to cause such a rift between Telfer and Nelson.

The bill, HB 2726, was sponsored by Carolyn Tomei, D- Milwaukie, and aimed to revise the 2007 Clean Air Act to apply regulation to cigar shops and hookah bars, which are places where people smoke flavored tobacco out of hookahs.

Both Telfer and Nelson had a vested interest in the proposed legislation.

Nelson represented the hookah bars and Telfer is part owner of the building in which Specialty Cigars International, Inc. is housed in Bend. Telfer’s business associate, Mary Schell, owns the cigar business.

Both Nelson and Telfer wanted to see existing, and possibly future, hookah bars and cigar shops exempt from the clean air act, according to lobbyists and legislators involved in last summer’s session.

Nelson was working on getting what he wanted in HB2726. Telfer was working on getting what she wanted in a separate bill she was planning to introduce on the Senate side, according to Telfer and a variety of other sources.

Nelson and Telfer struck a deal. She would kill her bill, he would help get her a cigar shop amendment attached to the house bill and she would help push it out of committee.

This is where it gets interesting. Remember Nelson was pushing to have all current and future hookah bars exempt from the 2007 Clean Air Act. That was infuriating to the bill’s original sponsor Carolyn Tomei, who then wanted to spike the bill. The legislation got jammed up in committee and other bills, including some of the governor’s priority legislation, were held hostage as wrangling continued over the hookah bill. All eyes were on the legislation.

Telfer said in an interview last week that her staff discovered that Nelson was quietly visiting legislators and asking them to vote against the house bill because, as it was shaping up, it wasn’t providing enough freedom for hookah bar owners.

Telfer called Nelson and confronted him, accusing him of going back on his word. The version at the Capitol was that she’d called him a liar. She disputes the use of that word. Whatever was said, Nelson took great exception to Telfer’s approach, according to Telfer, Senate minority leader Ted Ferrioli, R- John Day, and a variety of other sources.

NO BLOOD, BUT SCARS

The lasting impact of the squabble became clear to Telfer when she called Nelson for support as soon as she heard she had an opponent. He was brusque and told her no, she said.

What she didn’t know was that Knopp had already called Nelson himself, had asked for support and gotten it.

This was weeks before Knopp told Ferrioli, his party’s leader in the Senate, of his decision to run—something he did not do until the very last minute before filing on March 6. The dynamics underscore Knopp’s feelings about the current leadership of the GOP in the Senate.

“The reason I am running is because we need a leader that’s going to say enough is enough and not take no for an answer,” said Knopp, adding that the party must refocus around more business-friendly tax policy and a full-throttle approach to job creation.

But Telfer sees it as a high-powered lobbyist buying a seat for her opponent as retribution for being slighted.

“It’s the dirty part of politics. Picking winners and losers, buying votes, trying to have influence,” she said.

Those who have worked with Nelson said they were not surprised to see the Telfer-Knopp race play out this way.

“People go up against him at their own peril,” said Deborah Kafoury, a former legislator and now Multnomah County Commissioner, who recently got crosswise with Nelson. She said Nelson’s way of lobbying, his access to cash and his ability to “seemingly effortlessly” get the votes he needs is troubling.

“It’s not really how most citizens would want their government to be run,” said Kafoury.

Nelson’s role in the race has vexed Ferrioli who said that Telfer has been an excellent legislator who doesn’t suffer fools easily and refuses to “kiss the ring.” Seeing her lose the Senate race to someone with “unlimited ambition” that is backed by the biggest Republican party money from inside and outside the state would be a shame, he said.

“You can wrap it in the flag and you can wrap it in the Constitution and you can wrap it up in any emotional appeal you want to make,” said Ferrioli, “but at the end of the day democracy ought to belong to the voters ,and that’s what they’ve got in Chris Telfer. Offending a lobbyist ought not to be a reason to lose your job.”

KNOPP SAYS NELSON NOT THE KINGMAKER

Knopp, who has received money and support from a relatively diverse swath of Republicans, said any portrayal of Mark Nelson as the primary backer of his campaign is wrong. But the support of Nelson and other lobbyists has been indicative of a strong frustration with Telfer, he said.

“Everybody has to admit that it’s pretty uncommon that somebody has the ability to raise $200,000 in 10 weeks,” said Knopp. “After four years, you would expect that [she] would have these folks locked up. The response I’ve received from them, which was that…she treated them poorly—I think those issues have been some of the things that have honestly made it easier to raise the money I have in this campaign.”

The other lobbyists Knopp is referring to are, in large part, members of the aforementioned Oregon Committee, with which Nelson is heavily involved and widely viewed as leader, according to numerous sources. The group formed after Measures 66 and 67 passed in 2010. Nelson had led campaigns against the measures, which raised taxes on corporations and wealthy individuals. After the campaigns failed, he and other lobbyists formed the group to push a conservative agenda.

According to one report in The Oregonian, the members were wildly successful, spending $3 million in campaign contributions and winning every race they backed but one. Though members of the group have given money to both Knopp and Telfer, there is a sense that with Nelson’s backing, the edge is to Knopp. However, since the loosely-knit group does not have to register as a lobbyist or PAC, it’s hard to trace that money to specific contributions. Telfer doesn’t need an expenditure report to be convinced of its influence.

“There is a group of lobbyists, part of the Oregon Committee, trying to get Tim elected so that he becomes the caucus leader and he will get the caucus members to vote the way he wants,” said Telfer.

Knopp dismisses such conspiracy theories. Lobbyists aside, Knopp said, he’s running because Telfer did not put a strong enough focus on jobs and ignored key constituents.

“This is a lot of folks that are unhappy with the way things are and didn’t have a good experience with the legislator,” said Knopp. “That’s why I got into this race—I’m the right person at the right time.”

Mark Nelson: A Hired Gun with a
Higher Calling

A veteran Salem lobbyist, Mark Nelson represents a host of clients including Deschutes County and retired public employees, as well as national business interests like Koch Industries, of Koch brothers’ notoriety, Anheuser Busch and RJ Reynolds.

Nelson is also the architect of the Oregon Committee, an informal, but influential, group of diverse business interests and lobbyists in Salem that was formed after the passage of Measure 66 and 67, a Democratic initiative that raised taxes on corporations and wealthy individuals to help plug a hole in the recession-mired state budget.

Nelson led the unsuccessful campaigns against the measures, which continue to draw the ire of conservatives across the state. Since their passage in 2010, Nelson and the Oregon Committee have targeted specific legislative races and in doing so shifted Oregon’s political landscape.

The committee is credited with ending the Democrats super majority in Salem by helping Republicans pick up six seats in the house, and two in the senate. Inside the Capitol, the committee has amplified

the voice of the state’s previously disparate business interests, helping conservatives push through corporate tax breaks and other perceived pro-business items.

The following is a list of Nelson’s clients from the 2012 session, as disclosed to the Oregon Secretary of State’s Office.

7-Eleven, Inc

Allstate Insurance Company

Anheuser-Busch Companies Inc

City of Klamath Falls

County of Deschutes

County of Linn

General Motors Corp

Industrial Customers of Northwest
Utilities

Koch Companies Public Sector, LLC

Les Schwab Warehouse Center, Inc

Northwest Food Processors Assn