In 2004, Goldschmidt's career and legacy were irreparably damaged by revelations of the ongoing sexual abuse of a young teenage girl beginning in 1973, during his first term as mayor of Portland.

He promoted the revitalization of Downtown Portland and was influential on Portland-area transportation policy, particularly with the scrapping of the controversial Mount Hood Freeway and the establishment of the MAX Light Rail system.

He faced significant challenges, particularly a rising anti-tax movement (leading to Measure 5 in 1990) and a doubling of the state's prison population.

Over the next dozen years or so, he was criticized by editorial boards and Oregonians for several of the causes he supported, including backing the forestry corporation Weyerhaeuser in its hostile takeover of Oregon's Willamette Industries and his advocacy for a private investment firm in its attempt to take over utility company Portland General Electric.

In 2003, Governor Ted Kulongoski appointed Goldschmidt to the Oregon Board of Higher Education, a position he resigned after admitting he had sexually abused a minor girl 30 years earlier.

Senator Maurine Neuberger in 1964 in Washington, D.C.[5] While there, he was recruited by New York Congressman Allard K. Lowenstein to register voters in Mississippi's 1964 Freedom Summer civil rights campaign.

[8] During his mayoral campaign, he questioned the benefit of expanding the city's police force, preferring to direct resources to crime prevention.

[11] Goldschmidt served alongside notable leaders: Glenn Jackson, chair of the board of Portland Power and Light and chair of the Oregon Transportation Commission, was considered the state's leading power broker on transportation issues; and Gerard Drummond, a prominent lawyer and lobbyist, was president of Tri-Met's board of directors.

[11] The task force considered an unpopular deal that would have funded the construction of the Mount Hood Freeway, which would have bisected southeast Portland.

[11] The deal, which would have been 90% funded by the Federal Highway Administration, was rescinded, with first the Multnomah County Commission and, later, Portland City Council reversing their positions and advising against it.

In late 1979, Republican presidential hopeful John B. Anderson called for Goldschmidt's resignation, and members of the United States Senate Banking Committee later chastised him,[17] for having suggested that he would withhold transportation funds from municipalities, such as Chicago and Philadelphia, whose mayors supported Ted Kennedy in his primary election bid against Carter.

His personal focus was on children's rights, poverty, and crime, but the challenge of meeting increasing needs with a decreasing budget overshadowed his tenure.

The changes were considered to benefit the insurance industry and business interests, at the expense of claimants, who were required to establish more extensively that their employers were responsible for injuries.

)[34] Goldschmidt assisted in the deal that led to the construction of TriMet's MAX Red Line to Portland International Airport that opened in 2001.

In 2002, he lobbied business and political leaders to support Weyerhaeuser in its hostile takeover of Willamette Industries, Inc., then the only Fortune 500 company headquartered in Portland.

Criticism of Goldschmidt's business activities peaked when, on November 13, 2003, Governor Ted Kulongoski nominated him to the Oregon State Board of Higher Education.

Several state senators, however, voiced concerns about Goldschmidt's involvement with SAIF and possible improprieties in the dealings he and his wife had with Texas Pacific.

[39][40] The increased scrutiny on Goldschmidt's career, including reporters' difficulties accessing records from his term as governor,[41] ultimately led to the revelation of his years-long sexual abuse of a minor girl, which had occurred decades before, during his tenure as Mayor of Portland.

[42] On May 6, under pressure from Willamette Week, Goldschmidt publicly announced that he had an inappropriate relationship with a 14-year-old girl (the victim later indicated she was 13)[43] for an extended period during his first term as Mayor of Portland.

[48] In his initial negotiations with Willamette Week, Goldschmidt agreed to resign his positions with the Texas Pacific Group and the Board of Higher Education, which he did.

In return, Goldschmidt gave his support to Burtchaell's (unsuccessful) bid to extend a lease for a houseboat moorage on the Willamette River.

[57] On March 7, 2011, the Oregon Senate President and Co-Speakers of the House released a statement that Goldschmidt's Governor's portrait had been removed from the walls of the State Capitol building in Salem and put into storage, out of respect for his victim, Elizabeth Lynn Dunham, who died from cancer on January 16, 2011, at the age of 49.

[6] Around the time he started his consulting firm, he met his second wife, Diana Snowden, who worked for PacifiCorp as a senior vice president.