One of the most distinctive policy ideas in the 2023 Oregon legislative session – creating a state bank – drew a veto from Gov. Tina Kotek.

The proposal proposed a study. But Kotek indicated that requiring the Oregon Business Development Department to study, in a short period of time, a potentially sweeping proposal would be difficult to carry out.

Setting up an Oregon State Bank would make Oregon distinct from every other state save one, and it’s an idea that Kotek said she supports. But what it would be used for?

Oregon has, of course, lots of private banks and other financial organizations, from branches of national giants like U.S. Bank (the largest in Oregon), Wells Fargo and Chase through small community banks and payday and title lenders. They undertake many kinds of transactions, including holding state funds. But some of the larger banks have been moving away from traditional community banking, and the commercial incentives of many lenders and money managers might not mesh with what are seen as public priorities.

House Bill 2763 aimed to explore, though not specifically establish, a state-run bank. State Rep. Khanh Pham, D-Portland, a sponsor, said in testimony that the idea was to help the money flow that involves local governments and provide some backup assistance to credit unions and community banks, but not to compete with them. “Think of it as a ‘banker’s bank’,” Pham suggested. As described, it might resemble something like a central bank, such as the Federal Reserve in the United States, but on a less-ambitious and state level.

(The bill’s main sponsors were Reps. Mark Gamba, D-Milwaukie, and Jules Walters, D-West Linn, and Sen. Jeff Golden, D-Ashland.)

There also are other ways of looking at the idea.

At least 10 states – Oregon was not one of them – have created state banks since shortly after the demise of the federal Second Bank of the United States in 1836, but by the end of the century nearly all were defunct, partly a result of changing economies and forms of banking. In the last century only one state, North Dakota, has had a state bank, and it is highly active.

The Bank of North Dakota was founded in an environment early in the 20th century of extreme economic hardship among the state’s farmers, who had a hard time getting loans and a harder time finding them at a moderate rate. When the populist farm-based Nonpartisan League took power in the state in 1918, it created the bank to help farmers.

Over the years, it also did much more, the bank’s web site says: “BND has responded to the state’s needs since inception. For example, when teachers were paid with warrants rather than cash during the Great Depression, BND paid them in full rather than with the 15% loss they would take when trying to cash it elsewhere. In the 1940s, BND sold back farmland which had been foreclosed during the ’30s, usually to the original families who owned it and had been allowed to remain on the land and farm it.” It accepts deposits from individuals and businesses, and makes a wide variety of loans, but doesn’t see itself in competition with private banks.

In 2010 Vermont officials explored the idea of a state bank, and reviewed the North Dakota experience. Venture capitalist Cairn Cross commented that, “the Bank of North Dakota appears to use a greater percentage of its deposits to fund loans than does the Vermont banking system. Perhaps this has to do with the Bank of North Dakota’s economic development mission.”

Likely, that comparison would hold in Oregon as well. That could provide an extra, no-cost-, boost for economic development in Oregon – a business support feature other nearby states do not have.

That may be worth considering at a time when many larger banks are moving away from community service and more in the direction of large-scale financial management and investments.

Pham and other advocates may find useful the idea of building a coalition of state bank supporters from around private interests. If the research for such an effort is done outside a state agency, with a built-in external lobby support, it might gain enough traction to see more daylight next time.

(image/Getty Images)

 

When performance politics goes to court, seldom do we get many helpful answers, and no one wins, in a practical sense.

Unless you consider a $1 award to be a win.

The recently settled legal squabble between state Sen. Brian Boquist, I-Dalles, and the state Senate leadership was an opportunity for a federal court to set useful guidelines about what is and isn’t acceptable political speech. But that didn’t happen.

No one got much out of the lawsuit that has bounced around courtrooms for four years, reaching what may have been a final decision on July 17.

The core of it stems from a couple of viral quotes from Boquist, spawned from an incident that resembled performance politics: During a walkout of Republican senators in 2019, Boquist warned then-Senate President Peter Courtney not to try to arrest absent lawmakers: “Mr. President, and if you send that state police to get me, Hell’s coming to visit you personally.”

Soon after that he told a reporter: “This is what I told the (state police) superintendent: ‘Send bachelors and come heavily armed. I’m not going to be a political prisoner in the state of Oregon. It’s just that simple.’”

Eventually, he and the other senators returned, but before he did a Senate committee on conduct said it would require him to give 12 hours notice before he showed up at the statehouse, on grounds that … he was dangerous? That seemed to be the implication.

Boquist sued Senate Democratic leaders over the requirement, arguing accurately that it impinged on his ability to do his work in the Senate. The legal wrangling lasted three years.

U.S. District Court Judge Michael McShane on Jan. 20, 2020 dismissed Boquist’s suit, saying “while both sides can point fingers and complain that the other is overreacting to a political situation, (Boquist’s) chosen words on the Senate floor were those of a bully on the playground. As such, they are unprotected fighting words.” Quoting a 1942 New Hampshire case, he said such words “by their very utterance inflict injury or tend to incite an immediate breach of the peace.”

And he added, “remarkably, (Boquist) argues that his statement to defendant Courtney – ‘if you send the state police to get me, Hell’s going to visit you personally’ – was a statement of religious expression.” The Senate, he said, did not violate Boquist’s speech rights.

In April 2022 the Ninth Circuit Court of Appeals reinstated the case, however, saying Boquist had “adequately alleged that he, in fact, had engaged in constitutionally protected speech and was subject to a retaliatory adverse action on account of that speech. The Senate majority members, however, will have an opportunity to raise affirmative defenses, including that their actions were motivated by legitimate security concerns.”

The case went back to McShane, who ruled under the terms of the higher court’s decision in Boquist’s favor, but awarded him just one dollar.

In all, this river of court activity seems to have reached a nebulous conclusion.

The courts could have gone further and should have.

“Political speech” has been stretched in recent years to sometimes absurd points. The violent Jan. 6, 2021 riot at the U.S. Capitol, for example, has been described by the national Republican Party as “legitimate political discourse.”

Political speech traditionally has been given more judicial leeway than most other forms, but how does our current overheated political speech fit into that framework? What are unprotected fighting words or panic words in today’s environment? A serious answer coming from the courts would be useful.

But courts have placed limits on speech in the past. Famously, Justice Oliver Windell Holmes in 1919, writing for a unanimous U.S. Supreme Court, said, “The most stringent protection of free speech would not protect a man falsely shouting fire in a theatre and causing a panic… The question in every case is whether the words used are used in such circumstances and are of such a nature as to create a clear and present danger that they will bring about the substantive evils that Congress has a right to prevent.”

Fighting words and direct threats have been limited, too.

This becomes salient in a day when emotions can get out of hand in political situations. Decisions in cases like the Boquist suit could help in drawing the lines between what we should find acceptable and what we shouldn’t.

That said, our best approach would be to cool ourselves down instead of letting it get that far.

Here’s something pointing to a positive answer. In an email to with the Capital Chronicle in April 2022, just after the appellate court reversal, Boquist said, “I will ask if Peter Courtney wants to sit down to mediate with the goal of setting in place a method to ensure this never happens again. That was my original goal.”

Maybe they should have taken him up on it.

This column first appeared in the Oregon Capital Chronicle.