Ex-Oregon Boss Get Lucrative Contract with Pension Advisor

Portland, Oregon, money manager Jeff Grayson gave a powerful Laborers’ Int’l Union of N. Am. boss a consulting contract worth at least $805,000, according to an investigative report by The Oregonian newspaper. Grayson, chief executive of Capital Consultants, quietly awarded the $7,500-a-month contract in Aug. 1998 to Kaylano Consulting, a firm founded by John D. Abbott and his wife, Pam. Abbott was for years a dominant force in LIUNA in Oregon and Idaho, as well as a longtime ally of Grayson’s. As an influential trustee of three LIUNA trust funds, Abbott helped steer millions of dollars of union pension fund money to Capital Consultants.

Under terms of the contract, Capital Consultants agreed to pay Kaylano $7,500 a month over five years — $ 450,000 in all. Abbott has the right to renew the contract for an additional five years. Grayson can end the contract after the initial five years, but only if he pays Kaylano a $ 270,000 lump sum. Capital Consultants also agreed to pay Kaylano a $ 50,000 signing bonus and to pick up a $35,000 club membership fee.

The contract was signed in late Aug. 1998, but Capital Consultants said it didn’t go into effect until Sept. 1998, after Abbott left his post as business manager of the Oregon, Southern Idaho & Wyoming District Council of Laborers, as well as his trust fund positions. But when exactly Abbott left those positions is murky, according to the report.

Abbott publicly defended Grayson in 1995 after the Dep’t of Labor accused the Capital Consultants in a lawsuit of overcharging the LIUNA on investment fees. Grayson settled the suit by agreeing to repay $2 million, without admitting or denying guilt.

Grayson also helped Abbott when Abbott was in difficulty. In Dec. 1997, as Abbott was about to have to explain $ 50,000 in personal charges on his union credit card, Grayson found a buyer for a home-catering company that had been operated by Abbott’s late wife, Nancy. Capital Consultants lent the buyer $166,000 for a complex deal that netted Abbott $60,000.

If renewed for a second five years, the Kaylano contract will pay the Abbotts $950,000. In addition to that, Capital Consultants agreed to buy a $35,000 membership at the PGA West Golf Club in La Quinta, Cal., and make it available to Abbott. The club is a short drive from the Abbotts’ condominium in the resort community. Add the $60,000 deal that Grayson engineered for the catering company in 1998, and Grayson’s commitment to the Abbotts surpassed $ 1 million. [Oregonian 9/4/00]