The tenure as public utility commissioner, however, was considerably shorter. After less than two years at the PUC, O’Scannlain was tasked by Governor McCall with taking the lead on one of the governor’s signature policies: environmental conservation. O’Scannlain took over as Oregon’s second director of the Department of Environmental Quality (DEQ) in the spring of 1973. “It was a less comfortable position,” O’Scannlain recalls. He was frustrated at the fuzzy discretion involved in approving or rejecting industrial permits and setting allowable pollution standards. The decisions could have enormous impacts on economic development as well as the environment, but defensible standards for making those decisions were hard to come by. O’Scannlain felt the role was plagued by “imponderables.”
As it happened, a more tantalizing opportunity arose in 1974, when Congressman Wendell Wyatt of Oregon’s first congressional district announced his retirement. O’Scannlain lived in the district, and he felt he had developed a sufficiently positive public profile in state government to have a path to the seat. The district was a GOP stronghold, as well—no Democrat had ever represented it—so the partisan registration played to O’Scannlain’s advantage. He resigned from the DEQ in spring 1974 to campaign full time.
O’Scannlain won the Republican primary, overcoming a state representative from Hillsboro and a television news personality. The Watergate scandal in Washington, D.C., however, was making the general election match-up (against Democrat Les AuCoin) tougher than expected. The polling turned sharply against the GOP in the summer, following President Nixon’s resignation and President Ford’s pardon of Nixon. In the end, O’Scannlain suffered a substantial defeat—a fate shared by Republican candidates around the country that fall—and he resolved never again to run for political office.
The loss of a “safe” Republican seat was tough, but so were O’Scannlain’s financial circumstances in its immediate aftermath. He had drawn down his PERS account to defray the family’s expenses during seven months of campaigning—a decision he came to regret as PERS balances ballooned through the ‘80s and ‘90s—and in November 1974 he was unemployed and confronting limited prospects with local law firms.
After a few months, he took a job with a friend’s law firm, Keane, Harper & Pearlman, and stayed for three years. It was there that O’Scannlain argued his only case before the Ninth Circuit: an appeal seeking restoration of the Bonneville Power Administration’s power-sales contract with an Alumax plant to be built near Warrenton. By chance, the argument put him before his former moot court adviser at Harvard and future colleague on the court, then-Judge Anthony M. Kennedy. O’Scannlain prevailed, he recalls, on the principal legal issue, but he did not get the contract reinstated. It was a disappointment, he acknowledges: “[N]o attorney likes to lose a case.”