Was Goldschmidt being blackmailed?

If it weren’t for the lives damaged and lost, or the murder of Michael Francke looming in the background, this would be what they used to call a French bedroom farce.

I mean, here was the governor, Neil Goldschmidt himself, sitting in his office in Salem, getting calls from this girl – actually not a girl any longer but a distraught 28-year-old woman, Elizabeth – screaming at him, “You raped me, you owe me!”

Which of course was all too true because some fifteen years earlier, when he was the mayor of Portland and she was a 13-year-old freshman at St. Mary’s Academy, he’d been screwing her on a regular basis. Or to put it another way, committing statutory rape, punishable in Oregon by up to 20 years in prison.

Sneaking off with her to a room in a no-tell motel or in the no-tell downtown Hilton. Or late at night into her family’s home in fashionable Alameda, which happened to be just a few blocks from the Goldschmidt family abode.

[This is a reprint of a Substack article originally published on August 16 last year – #3 in series on the Michael Francke murder. If you want to read the entire series go to my home page Oregon Confidential and click on Francke Murder.]

They even had a signal. On his way home from work in the evening, the mayor’s driver would swing past the girl’s house. If the light over the basement entrance was on that meant her parents were out for the night and the coast was clear.

It was actually pretty creepy. Sometimes the handsome mayor,  then in his mid-thirties, would drop in on Elizabeth’s classes at St. Mary’s and speak to the little girls about government or citizenship or maybe just the vexing problems of being a big city mayor. She thought he was her prince, and one day they’d ride off together into the sunset and be married. She would soon end up addicted to drugs and serve time in prison for dealing.

It would be another thirty years before Nigel Jaquiss got a well-deserved Pulitzer for exposing the mayor’s dirty little secret in the pages of Willamette Week, but in retrospect it’s clear that if this was a secret, it’s one that was shared by a number of people at the time, including – how could it be otherwise? – the Portland police.

Because at the time the vice squad actually had Goldschmidt under surveillance. And that’s straight from Irv McGeachy, who was one of the guys who conducted the surveillance.

The reason McGeachy and his partner Daryl Dick were following Goldschmidt around, as it turns out, is that they were convinced that Goldschmidt, who was doing a lot of catting around then anyway, was consorting with the town’s top call girl madam. Which of course is another story in itself, and you can read all about it if you like, in my last book, Rose City Vice.

And while McGeachy stopped short of admitting that in the course of their surveillance he and his partner stumbled across  Goldschmidt and the barely pubescent Elizabeth – “for the good of the Bureau,” he said when he declined to continue the interview – another retired cop recalls hearing McGeachy telling him back when about “Goldschmidt and his little honey.”

And how about the driver himself, the one who drove Goldschmidt home every night past Elizabeth’s house – and who, in time-honored fashion, was a police officer on assignment from the intelligence division? Of course they call it a security detail, but it’s also a good way to keep tabs on the mayor and just about every police force does the same.

A few years ago, when I called the then-retired intelligence officer at his home, he said he couldn’t remember a thing because he had Alzheimers. But the story itself, about the basement light signal, comes from Elizabeth herself, who told it to Oregonian columnist Margie Boule after this all hit the fan.

And you can be sure information like this gets passed up the chain of command. That’s the point of the whole exercise. In fact, I think it’s more than just likely that Goldschmidt was being black-mailed – or to put it another way, the information was being used to leverage him – as far back as his time as mayor of Portland.

As a former city councilman from that time told me, he was once approached by the head of police union who told him they were well aware of his predilection for marijuana, but it didn’t make any difference to them as long as he voted the right way on an upcoming police pension matter.

Which brings us, of course, back – or actually forward in this case, because it’s now about fifteen years later – to our little French farce in Salem.

Goldschmidt is now governor of the great state of Oregon, the Francke murder has occurred, and Goldschmidt is secretly negotiating with Elizabeth’s lawyers to keep her mouth shut. They will eventually settle on the payment, over time, of $350 thousand in exchange for her silence. But of course we won’t know any of this until about another fifteen years later when Jaquiss breaks the story.

And who do you suppose is Goldschmidt’s driver/security guard this time around – furnished, of course, by the State Police? Why it’s good old officer Bernie Giusto, who in addition to whatever his other duties may have been, is also now bonking the governor’s wife Margie.

And if you think that’s an invasion of privacy, relax. Because it’s already been written about in the press and acknowledged by all concerned. My own take on the whole sordid yet somehow touching affair is that Margie, who by now had probably had it up to here with Goldschmidt’s incessant philandering, needed a shoulder to cry on, and Bernie was it.  

And as Bernie has acknowledged, among the many topics that arose in the course of their many heart-to-heart discussions was, of course, her husband’s ongoing efforts to negotiate a hush money settlement with Elizabeth’s lawyers. And although Bernie has never admitted that he passed the information on to his superiors, he wasn’t doing his job if he didn’t.

Which certainly might explain – now here’s a conspiracy theory for you – why Goldschmidt was so determined to keep the FBI out of the Francke investigation, which of course meant leaving it up entirely to the state police.

Just why was it so “crucial,” as an August 22, 1989 memo from Goldschmidt’s legal advisor Cory Streisinger put it – and I suppose you could call this a conspiracy fact because the governor and his aide were definitely conspiring here – “not to turn this into a federal/FBI investigation if you want any assurance that it will stay within the bounds you have set”?

Was Goldschmidt simply afraid that the FBI might discover his dirty little secret and he’d end up in the slammer? Certainly that would have been a reasonable fear.

Or was he being blackmailed by the state police, who, it’s now clear, were busy fabricating the evidence that would be used to railroad the state’s selected patsy, Frank Gable, and certainly, didn’t want the FBI nosing around. If they knew about Goldschmidt’s dirty little secret – and if they didn’t get it from Bernie it could have come from any number of other sources – it’s hard to imagine they wouldn’t have used it.