Oct. 19 (Bloomberg) -- Chris Dudley, a journeyman center during his pro basketball career, may have to retire the underdog image if Oregon makes him its first Republican governor in 23 years.
Dudley, 45, a 6-foot-11 (211-centimeter) wealth manager who has never run for office, is nearly even in polls with former Democratic Governor John Kitzhaber, 63, who was an emergency-room doctor before entering politics. While Democrats have held the state’s top job for six straight terms, Dudley’s almost 2-to-1 money advantage may help him pull off a coup, said Portland-based independent pollster Mike Riley.
“There is likely to be an upset, and it will be the biggest seismic change in Oregon politics in the last quarter century,” Paul Gronke, a Democrat and director of the Early Voting Information Center at Reed College in Portland, said in a telephone interview. “Our fiscal crisis trumps everything.”
President Barack Obama travels to Oregon tomorrow to campaign for Kitzhaber, who served two terms as governor. Republicans, who control 24 governorships, may gain at least six in the Nov. 2 election, according to the Rothenberg Political Report. They are also challenging for U.S. House and Senate majorities.
The recession, bank bailouts and trillion-dollar health-care legislation are sapping energy from Obama’s party, with Republican candidates vowing to reduce the size and reach of government.
Cuts and Costs
Oregon suffers from “runaway state government spending” and “lack of fiscal management,” Dudley says in a position paper on his website. He would stop routine budget increases and set up a team to review fiscal assumptions and conduct regular audits, according to the paper. He also proposes that employees pay for a larger portion of their health-care costs, and would end the state monopoly on liquor sales.
Oregon has 10.6 percent unemployment, a point higher than the U.S. average, and more than 200,000 citizens out of work. The state faces a deficit of more than $14 billion over a decade at its current service level, according to the office of Democratic Governor Ted Kulongoski, who cannot run again because of term limits.
Schools, prisons, colleges and health coverage are all set for cuts, according a June report from the governor. “Beginning next February and March, people will see almost daily stories about programs disappearing and very hard choices,” said John Tapogna, president of consulting firm ECONorthwest in Portland.
At the Line
Dudley decided to run after a career as a rare Ivy Leaguer in the National Basketball Association. He’s remembered as much for his struggle with free throws (46 percent average versus last year’s NBA-wide average of 76 percent) as his workmanlike rebounding (5,457, compared with record-holder Wilt Chamberlain’s 23,924).
Dudley also built a reputation off the court through his charity work and youth basketball camp. He was diagnosed at 16 with Type 1 diabetes and runs the Chris Dudley Foundation, which provides information and resources to help those with the disease.
“Dudley is fresh, young and interesting,” Gronke said. “He’s portraying the image of a centrist Republican, not conservative socially, that harkens back to the Republicans in Oregon in the ‘70s and ‘80s.”
Dudley hasn’t been associated with the Tea Party movement and his stands on social issues fit with Oregon’s libertarian tradition, said Gronke.
The candidate’s proposals are tired Republican themes, Kitzhaber said during a Sept. 30 debate.
“He’s a new face, but it’s the same old ideas,” said Kitzhaber, who was governor from 1995 until 2003. Dudley doesn’t have enough experience for tough times, he said.
Bondholders support the newcomer’s focus on cuts, said Thomas Metzold, co-director of municipal investments at Boston-based Eaton Vance Corp.
“They would see some fiscal conservatism,” said Metzold, who runs a $130 million Oregon fund. “Everybody talks about the revenue side, but expenditures have grown at a much faster pace.”
The premium investors demand to hold Oregon’s securities has widened five-fold since April 2009. The state’s most recent general obligation debt was sold that month, with bonds maturing in August 2028 priced to yield 4.2 percent, 14 basis points above 19-year AAA debt, according to the Bloomberg Valuation index.
They traded at an average yield of 3.85 percent on Oct. 8, 73 basis points above AAA debt due in 18 years. A basis point is 0.01 percentage point.
A Revived Oregon
During a recent stop at a Portland machine factory, Dudley spoke to about 40 employees, some in jeans flecked with metal shavings, on a floor the size of two football fields.
“We’re not living up to our potential,” said Dudley. He said he wanted to revive a state once known for fiscal restraint and moderate politics and blessed with natural beauty.
“I don’t think that’s too much to ask,” he said.
Dudley and Kitzhaber were tied last week in a Rasmussen Reports and Survey USA polls and in a forecast by FiveThirtyEight, a New York Times political blog. The Cook Political Report rates the race a tossup.
Dudley had a $7.7 million to $4 million money advantage over Kitzhaber as of Oct. 15, and the support of 12 percent of Democratic voters in the most recent Riley Research survey. The Republican Governors Association gave him $250,000 in July and $500,000 in August, according to the group’s Internal Revenue Service filings.
“It’s a fight to the finish,” said Riley, the Portland pollster.
Facing the Commissioner
Dudley, a 1987 Yale University graduate with an economics and political science degree, played for five teams in 16 NBA seasons. He had two stints with the Portland Trail Blazers, 1993-97 and 2001-03, retiring after the last and settling in Lake Oswego, south of the city.
Dudley challenged the league twice regarding his contract, winning both times in arbitration and setting precedents that bettered the lot of all players, said Ron Klempner, associate general counsel of the NBA Players Association.
“Not everyone is prepared to sit across the table from the commissioner,” Klempner said in an interview.
Dudley decided to run for governor after seeing as a diabetes advocate testifying before the U.S. Senate what could be accomplished inside government, he said in an interview.
Politics are “part of the family,” he said. His grandfather, Guilford Dudley Jr., a Nashville, Tennessee, insurance executive, was ambassador to Denmark.
Dudley doesn’t flaunt his family ties, said Tom Brennan, his Yale coach, who recruited him out of high school in Solana Beach, California, a San Diego suburb. Only when Yale played Vanderbilt University in Nashville and the team visited Guilford Dudley’s house did Brennan see the privilege.
“There were butlers, and everything was marble, and I thought, ‘This guy doesn’t act like this at all,’” Brennan said. “He was the hardest-working member of the team and never had a sense of entitlement. I never would have known he was wealthy.”
Dudley earned $38.3 million as an athlete, according to basketball-reference.com. He has given $2 million to charity, said Brittany Bramell, a campaign spokeswoman. After the NBA, he joined M Financial Wealth Management, an advisory firm for high-net-worth people. Since 2008 he’s been a partner at Filigree Advisors LLC in Lake Oswego. The firm’s founder, Gerald Graves, met Dudley at M Financial.
Burning Down the House
In 2004, Dudley allowed Lake Oswego firefighters to train by burning his house, which he intended to demolish. Dudley claimed a $350,000 loss under U.S. Internal Revenue Service rules. He said he hasn’t been contacted by the tax agency about the deduction, although the write-off strategy has come under IRS scrutiny in other cases.
“One risk he has is being seen as the out-of-touch rich guy, but the taxation stuff hasn’t gained headway,” Gronke said.
Dudley’s down-to-earth personality is an asset with Oregonians such as Diane Haugen-Torres, who has never voted Republican. “Democrats for Dudley” ads encourage her to do the unprecedented, said the 58-year-old manager of a Made in Oregon souvenir store in a suburban Portland mall.
“He looks more approachable than Kitzhaber,” she said. “I’m feeling for Dudley. Sometimes an outsider brings new ideas.”
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