Federal regulators sue Robert Pamplin Jr. for massive pension fund fraud

The U.S. Department of Labor today filed a lawsuit against industrialist Robert Pamplin Jr. and his company, RB Pamplin Corp., in U.S. District Court in Portland, alleging that Pamplin violated the Employee Retirement Income Security Act by intentionally engaging in more than 100 real estate transactions with his company’s retirement fund, which benefited him and his company at the expense of unwitting retirees.

“The procedure used by Dr. Pamplin and RB Pamplin Corporation to transfer the properties to the Pension Plan was highly deficient and imprudent,” the complaint states.

Federal authorities are demanding that Pamplin “repay losses and other damages to RB Pamplin Corporation & Subsidiaries Pension Plan” and want to “permanently enjoin” him from serving as trustee of the pension fund.

The lawsuit follows a case from February 2022. WW cover story and more than a dozen supporting articles over the past two years that have reported on Pamplin’s increasingly desperate financial machinations. In the complaint, the Labor Department highlights multiple transactions WW was the first to report and confirm the claims WW quoted by experts who said the transactions violated pension laws and harmed the retirees whose interests Pamplin was supposed to protect.

Related: The collapse of Robert Pamplin’s family empire leads to financial moves that alarm experts

The agency says it did so by completing more than 100 transactions, many of which involved unused or underutilized industrial properties owned by RB Pamplin Corp. and its subsidiaries and a $100 million pension fund.

In effect, Pamplin dumped unwanted land on unsuspecting retirees in exchange for cash, which he then used to prop up his struggling industrial empire. Pamplin gave himself an unusual dual role that allowed him to execute real estate transactions without any oversight.

As CEO and owner of RB Pamplin Corp., he acted as a seller of real estate; as trustee of RB Pamplin Corp. and its Pension Plan subsidiaries, he acted as a buyer of real estate. Pension experts said WW such a dual role is rare and constitutes a conflict of interest. (One example: When Pamplin sold Ross Island to a pension fund, it not only failed to properly document the transaction, the complaint said, but also failed to account for more than $6 million in environmental liabilities related to state-mandated remediation of the property.)

Related: Ross Island Sand & Gravel argued in court that the island properties, which were later sold to retirees for $10.8 million, were almost worthless

The lawsuit said this conflict of interest also violated the Employee Retirement Income Security Act, or ERISA.

“Pamplin and RB Pamplin Corporation caused the Retirement Plan to acquire and hold more than 50 percent of its assets as employer real estate,” the lawsuit reads. “In so acting, Dr. Pamplin and RB Pamplin Corporation breached their fiduciary duties to the Retirement Plan participants, including causing the Retirement Plan to acquire and hold employer real estate in violation of ERISA, engaging in transactions prohibited by ERISA, and breaching their duties of loyalty, prudence, diversification, and compliance with the Plan documents in violation of ERISA.”

How WW reports that Pamplin made the Forbes list of the 400 richest Americans in the 1990s, boasting a net worth greater than that of any Oregonian except Nike co-founder Phil Knight. He inherited his wealth from his father, the longtime CEO of Georgia-Pacific Corporation, a forest products company formerly headquartered in Portland. The elder Pamplin parlayed his timber earnings into private investments, including Mt. Vernon Mills, a chain of textile mills in the southeastern U.S., and Ross Island Sand & Gravel, which mined the Willamette River in downtown Portland to provide the raw materials from which much of the city was built.

The Pamplins have been generous: Their name appears on the business school building at the University of Portland, on the gymnasium at Lewis & Clark College and in the hallways of the Portland Art Museum.

But the younger Pamplin, now 83, proved to be a far less agile businessman than his father. He invested in Christian broadcasting and publishing; a series of AM radio stations; and built and acquired 24 Oregon newspapers (recently sold). He also owned a vineyard, a 55,000-acre ranch, the sprawling Columbia Empire Farms in Yamhill County and much of Shaniko, a ghost town in central Oregon.

Records show that Pamplin Corp.’s financial problems have become serious in recent years. Creditors have routinely sued the company and its subsidiaries for nonpayment, and in May, the Oregon Department of State Lands fined Ross Island Sand & Gravel $2.9 million for failing to refill a massive hole its mining operations left in the Willamette River.

According to a complaint filed with the Department of Labor, as early as 2019, some Pamplin employees let him know they knew he was putting their pensions at unfair risk.

“A memorandum to Dr. Pamplin dated or about November 12, 2019, from five employees of Mount Vernon Mills, Inc., a subsidiary of RB Pamplin Corporation, indicated that Dr. Pamplin caused the Pension Plan to acquire property in excess of 10 percent of the Pension Plan’s assets, contrary to their prior advice,” the lawsuit says. (The 10 percent limit is the upper range that the Department of Labor considers prudent for pension funds if the property is marketable and acquired at a fair price, which does not appear to be the case in most of the disputed transactions.)

However, Pamplin representatives have repeatedly stated that WW their boss did nothing wrong.

The Labor Department’s complaint alleges that the properties Pamplin placed in the pension fund were not only excessive in terms of their percentage of fund assets and concentration (most are in Oregon) but also inappropriate in several respects. “The acquisition by the Pension Plan of these employer properties constituted an unwise investment by the Plan,” the complaint says. “Many of the properties were subject to unpaid property taxes, and some were subject to liens. At least three of the properties — Albina, Tait and Ross Island — require or were in need of significant and costly environmental remediation.”

Pamplin representatives justified some of the transactions in response to WWquestions, saying the parent company, RB Pamplin Corp., leased properties sold to the pension fund. But the feds say those leases were also improper.

“Dr. Pamplin and RB Pamplin Corporation caused Pension Plan to sign leases to release the properties to the employer on terms highly favorable to RB Pamplin Corporation and its subsidiaries,” the complaint states. “To date, RB Pamplin Corporation owes Pension Plan over $2 million in late lease payments.”

The lawsuit says the retirees suffered because they held a disproportionate amount of low-value real estate rather than stocks, bonds and other financial instruments, and that Pamplin must compensate them for lost earnings. The Labor Department wants the court to “require Dr. Pamplin and R.B. Pamplin Corporation to restore all losses the Pension Plan suffered as a result of their breach of fiduciary duty, with interest” and “require the invalidation of any prohibited transactions, if necessary.”

Robert Pamplin Jr. could not be reached for comment.