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In 2020, Ross Island Sand & Gravel sold its namesake island in the Willamette River to a related pension fund for $10.8 million, a price so high one critic called it “egregious.”
Court records newly obtained by WW show just how flagrant the transaction was. In 1985, the company, controlled by Robert Pamplin Jr., once one of the wealthiest men in the state and still the biggest newspaper publisher in Oregon, argued in court that the 122-acre island would be worthless once the company stopped mining there—as it did in 2001.
That information, newly obtained via a public records request, raises additional questions whether Pamplin fulfilled his legal duty as the trustee of his company’s pension fund to look out for the interests of its nearly 2,400 retirees.
Way back in 1985, court records show, Ross Island Sand & Gravel sued the state Department of Revenue in Oregon Tax Court over its property tax assessment, challenging the agency’s valuation of Ross and Hardtack islands, which are joined by an earthen berm and were part of the company’s gravel mining and processing operation.
Ross Island Sand & Gravel won that case and, in his opinion, the judge found that “[Ross Island Sand & Gravel]’s position is that Hardtack Island has no market value separate from the mineral deposit,” and “neither party assigned any [residual] value to [Ross Island],” the judge added.
In other words, the company stipulated that the only value the two islands had was the present value of the gravel it could extract under a long-term agreement with the state of Oregon.
The company ceased mining at Ross Island two decades ago—which meant, according to the argument the company advanced in court, that neither island had any value at that point. (Between 2001 and 2019, Ross Island Sand & Gravel used Hardtack Island for gravel processing, leaving it denuded and strewn with a massive array of rusting machinery.)
Yet in 2019 and 2020, records show, Ross Island Sand & Gravel transferred the properties to the R.B. Pamplin Corporation and Subsidiaries Pension Plan in a series of transactions totaling $10.8 million.
People familiar with Willamette River property question whether the islands have any value, particularly since they need substantial cleanup (“Fantasy Island,” WW, March 9).
Terry Deneen, a fellow at the Pension Rights Center in Washington, D.C., reviewed the Oregon Tax Court case at WW’s request. Deneen says the argument Ross Island Sand & Gravel made in tax court conflicts with the $10.8 million valuation.
“The information in these court documents further undermines the assertion that these properties were fairly valued and validly sold to the pension fund,” Deneen says.
Robert Pamplin Jr., 80, well known for his philanthropy, is the scion of one of Oregon’s largest fortunes. As the president of R.B. Pamplin Corp., he oversees the company’s portfolio of businesses, which include Ross Island Sand & Gravel; Mt. Vernon Mills, a South Carolina-based textile company; Columbia Empire Farms; and Pamplin Communications, which operates 24 Oregon newspapers.
In addition to leading the family company, Pamplin also serves as the sole trustee for the R.B. Pamplin Corp. pension fund, which holds nearly $100 million in assets for pensioners from the various Pamplin companies.
As WW has previously reported, Robert Pamplin, beginning in 2018, engaged in more than 20 highly unusual real estate transactions in which R.B. Pamplin Corp. companies either sold or transferred ownership of properties valued at nearly $50 million to the pension fund. (As of Oct. 15, 2021, the pension held about $37 million worth of real estate, nearly four times the 10% limit the federal Department of Labor says is prudent.)
In effect, Pamplin acted as both the seller, as president of R.B. Pamplin Corp., and the buyer, as pension trustee, in those transactions.
Pension experts say there is a built-in conflict of interest in transactions where the R.B Pamplin Corp. sold company-owned properties to the pension fund because the seller wants a high price and the buyer wants a low price.
Mark Garber, president of the Pamplin Media Group, whom Robert Pamplin has designated to communicate with WW, declined to respond to specific questions about the tax court case.
Instead, Garber reiterated earlier explanations for the Ross Island transactions.
Garber says the Ross Island and Hardtack Island transactions were based on independent appraisals (which he declined to share) and that all property transactions between R.B. Pamplin companies and the pension fund were legal, appropriate and prudent.
“The pension plan is well funded and has always paid retirees on time and in full,” Garber added.
But Deneen and other pension experts WW interviewed say the properties are unsuitable as pension investments in the first place and appear to be greatly overvalued at pensioners’ expense.
“In my opinion, this situation calls out loud and clear for a Department of Labor investigation,” Deneen says.
Michael Petersen, a spokesman for the Department of Labor’s western regional office in San Francisco, says he cannot comment on the Pamplin pension fund.
“Information that a pension fund may not be operating in the best interest of its participants and beneficiaries is always concerning,” Petersen says. “However, as a matter of agency policy, we can neither confirm nor deny the existence of an investigation.”
The U.S. Senate Finance Committee, along with other congressional committees, has oversight of the DOL’s work policing pensions.
U.S. Sen. Ron Wyden (D-Ore.) chairs that committee. He made it clear in a statement that he wants DOL to watch out for Pamplin pensioners.
“As the chairman of the Senate Finance Committee, I expect the Labor Department to conduct full and fair oversight of all pension plans under its jurisdiction,” Wyden said in a statement. “The Employee Retirement Income Security Act protects not only the hard-earned pension benefits of workers but also the interests of taxpayers who insure those plans. Failure to carry out this responsibility would be a betrayal of both workers and taxpayers.”
Lost and Found
The 1985 Oregon Tax Court case in which Ross Island Sand & Gravel challenged the state’s valuation of the island appears in an online court docket.
But when WW requested a copy of the case, a court administrator said the file disappeared in a 2001 warehouse incident. “The court’s administrator visited the warehouse on a weekday, and saw the court’s paper files stored in cardboard boxes on one pallet, as per usual,” says tax court administrator Rocco Lieuallen.
“A few days later, the administrator visited again, and the court’s files were gone.” Nobody ever figured out what happened.
The Oregon Department of Justice, which defended the state in the case, had long ago purged its files per retention schedules, and a Department of Revenue spokesman said his agency had likely done the same. But when the agency double-checked its files, the judge’s opinion turned up.
“What do you know?” says DOR spokesman Robin Maxey. “Apparently, this case was considered precedent setting, and so we maintain a copy of the court opinion.”