Sen. Chip Shields Pushes a Bill That Could Benefit His Family's Business: Updated

Sen. Chip Shields (D-Portland) is pushing legislation that could directly benefit his family's business—and he's getting another legislator to do the political work for him.

The bill, HB 3052, would mandate that contractors in any publicly funded project—state or local—use biodegradable lubricants. Counting public transportation projects, new construction and maintenance, that could mean millions of dollars to firms that make and sell the lubricants.

Shields works for Schaeffer Manufacturing, a St. Louis lubricant company owned by Shields' family for generations. The company has sales of more than $90 million annually. 

On his state financial disclosure form, Shields lists Schaeffer as a leading source of his income.

The bill that could benefit the company and Shields was introduced on March 10 by Rep. Lew Frederick (D-Portland), whose district overlaps with Shields'. In legislative testimony, Frederick described Shields merely as a "constituent."

"The ideas behind this bill came from one of my constituents, Chip Shields," Frederick testified before the House Committee on Consumer Protection and Government Effectiveness on Tuesday. "He works for a company that includes a product line of biodegradable lubricants, and since he has a conflict, he brought the idea to me to consider in the House."

"He helped me understand this issue and assemble my testimony for today," Frederick added.

In his testimony, Frederick did not elaborate on Shields' potential conflict, nor did any committee member ask him about it. A lobbyist for Association of Oregon Counties testified against the bill, citing cost concerns but did not cite Shields' possible financial interest in the bill. 

Frederick tells WW that he thought it unnecessary to inform the committee that Shields was a state senator because all lawmakers know who he is. Frederick also says he knew Shields now works for a company that sells lubricants, but he says he did not know Shields is a shareholder in a lubricant company his family owns.

"I probably would have made great disclosure if I'd known that," Frederick says. But he says he would still have introduced the bill Shields requested, as he would for any constituent. He notes that, if passed, the bill would potentially benefit all lubricant manufacturers, not just Shields' family's company.

Campaign finance filings show that Shields' largest individual political contributors include John Schaeffer Shields, then the CEO of Schaeffer Manufacturing ($5,000) and Jay Schaeffer Shields, the president of Schaeffer ($5,000), who gave Shields the money in 2011. Both men are described in the filings as "members of candidate's immediate family."

Schaeffer has been around for a long time—170 years, according to the company's website.

The company could hire a lobbyist and to try to change Oregon law regarding the use of biodegradable lubricants. It only sought to introduce such legislation, however, after Chip Shields took an active role in the company.

Why is Shields instead using another legislator to carry the bill that could financially benefit him and his family business?

"I have a conflict on HB 3502," Shields says in a statement he emailed to WW. "I gave it to Rep. Frederick to pursue in the other chamber. It seemed the best way to keep a good idea at arm's length. Rep. Frederick acknowledged that at the beginning of testimony and acknowledged that I helped him write his testimony."

For much of Shields' political career, which began in the Oregon House in 2005, he worked for a social services non-profit, and then as manager for his wife's medical clinic, Hands on Medicine.

When he last ran in 2012, he listed his occupation as the clinic's business manager. On his legislative website, Shields now describes a different job: "When not in legislative session, Sen. Shields is a sales representative for an outfit that supplies fuel efficiency products for heavy equipment," the website says. 

The lubricant bill isn't the first time Shields has been less than fully transparent. In 2012, WW named him "Rogue of the Week" for mixing his legislative duties with his managerial role at his wife's clinic.

In the case of the lubricant bill, Shields has complied with the letter of—if not the spirit—Oregon law regarding conflicts of interest, which says public officials should be "ever conscious of the public's trust."

Oregon law requires legislators to declare conflicts of interest before they take action on any bill which may present a conflict.

That means if HB 3052, passes the House and moves to the Senate, Shields merely needs to declare a potential conflict before voting on the bill.

Updated at 11 am on March 13:

Sen. Shields has withdrawn the bill, The Oregonian reports.

WWeek 2015