Port in a storm of its own making
The state Auditor's new report on the Port of Seattle finds rats in the rat's nest of local governments.
The Port of Seattle represents the worst of all possibilities when it comes to local government. It's a huge multi-billion dollar enterprise that, as state Auditor Brian Sonntag says in his new audit, "is one of the largest and most complex local governments in Washington State." But it is a government that lacks real independent oversight and fosters a culture in which secrecy, crony-ism and stonewalling have been the order of the day.
Sonntag's new audit makes that clear. Empowered by Tim Eyman's initiative I-900 to audit public agencies around the state, Sonntag has dug into one of the public sector's biggest rat's nests, and he's found some rats. A copy of the report can be found here (pdf). Accounts from the Seattle Times and the Seattle Post-Intelligencer summarizing the damning conclusions and getting reactions are here and here.
The gist of the report, which focussed on how the Port manages huge capital projects (like building the Sea-Tac third runway), is offered in a summary of six major finding by the audit:
Port construction management lacks cost controls and accountability.
The Port circumvents competition requirements in violation of its own policies and sometimes in violation of state law.
Port policies and Port management's interpretations of its policies result in a lack of transparency and thwart Commission oversight of construction management activities.
Port construction management records are
incomplete and disorganized.
The Port fails to enforce basic contract requirements, resulting in delays, extra costs, and an inability to defend against claims.
Port construction management is vulnerable to fraud, waste and abuse.
The audit also identified more than $90 million in unnecessary expenditures and documented how costs for projects like the third runway have ballooned out of control.
The Port is notoriously difficult to penetrate--reporters, watchdogs and even Port Commissioners have long been frustrated trying to get a peek inside the entity's inner workings. But one of the more shocking aspects of the audit is how hard staff fought to cooperate even with the auditor. According to the report:
Port personnel altered audit evidence and impeded access to information. Some were uncooperative during the audit fieldwork.
As a result, the audit says that while it is confident that the findings in its report are accurate, they are by no means are they complete. In other words, things at the Port may be much worse than the already devastating reports indicates:
We do not believe the scope limitations presented by the Port undermined the validity of any of the audit findings, conclusions or recommendations. However, conditions noted in the report may be more serious than reported, and there may be additional findings that the audit firm was unable to
discover, develop and report.
In other words, message to watchdogs: keep digging.
The ever-prescient columnist Geov Parrish in his entertaining annual wrap-up of 2007 predicted more scandal ahead for the Port in 2008--a safe prediction if there ever was one, but certainly a timely one. We can only hope.
One of the ongoing issues is that the Port, for all its size, clout and taxing authority, is overseen by a part-time, underpaid and weak group of elected officials who usually represent Port stake-holders--unions, contractors, developers. In short, folks with interests--and sometimes conflicts of interest--in Port business.
Another problem is that much of the work the Port does is just plain dull: though it's fueled by millions in taxpayer dollars, the public is often put to sleep by in-depth reporting on the Port's activities. This is true of many local government entities that represent special interest constituencies. I'm sure many people in King County don't know they pay taxes for the Port, which they assume is a Seattle thing. And besides, who can name members of all the various sewer, hospital, water and improvement districts or stadium authorities that touch our lives and pocketbooks? Life's too short.
On top of that, the Port staff controls information and the Commission has often been composed of a majority of rubber-stampers who have been content to pass on their oversight responsibilities and let the professionals run things. This certainly suited former Port head Mic Dinsmore, who ran the place as a back-room fief.
The Auditor's Port report is certainly a bittersweet vindication for Alec Fisken, the city of Seattle staffer who recently lost his re-election bid for the Port Commission. The rap against Fisken was that he was too much of a gadfly and wanted to argue basic issues of Port management and scope rather than be a team player who could help make things go. But the report shows what a load of baloney that was. The Port has largely failed at its own game; that is, that by being allowed to run itself it has demonstrated that it is a model of arrogance, waste, inefficiency and possibly out and out corruption. Fisken paid the price by being ousted by a disgruntled public, but he was one of the only commissioners who was actually trying to get to the Port's rotten core. The audit proves that the Commission needs more Fiskens, not fewer.
On the positive side, the audit might finally daylight the Port's cultural and management issues so that an obtuse and preoccupied public can take an interest in how their money is being wasted. And the many Democrats who opposed the new audit law because it had Eyman's name on it will, I hope, finally begin to acknowledge that it is producing results, and that once in blue moon, even Eyman can do a public service.
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Comments:
Posted Thu, Dec 20, 10:12 p.m. inappropriate
Okay, let's give the new team a chance.: If ever there was an easy audit choice, if one were looking for a place to uncover trouble, it'd be the Port in 2007! Dinsmore's arrogance and the commission's complacency were on display for some years before the latest headlines about Dinsmore's financial windfall in retirement. Some Municipal League board members had been trying to muster an external investigation for a couple of years ... but there just weren't enough volunteer hours to take on a project of this size.
It is absolutely no surprise that the audit findings are seriously negative.
But there's a new port executive, who has a good reputation from his previous postings, and four of the five commissioners have been replaced within the last couple of years. Yes, I agree that Fisken is vindicated ... but let's give the new board a chance to show its moxie.
Watch closely for the response to the findings/recommendations from the exec and new commission. The tenor of the response will indicate whether the audit provides a foundational reform document for the new guys ... or whether it's the same-old-same-old.
Not to presage the outcome, but I'll give the new team at least an even chance of bringing the port back to some semblance of integrity.
Posted Fri, Dec 21, 7:21 a.m. inappropriate
quite so: alec fisken has been replaced by "son of pat": mic dinsmore told commissioner fisken that he'd work to have him replaced. why? can a c.e.o actually do that in a situation such as this? mic dinsomore makes for a fine character in a 19th century novel, as does a lot of seattle.
what is needed is a line by line examination of the cozies, of the flow of the grease. and why the two dailies chose to endorse a fraud like bryant who ran a three red herring campaign. to which the half-awake public responded by ousting its best watchdog, second or equally good being lloyd hara.
Posted Fri, Dec 21, 10:34 a.m. inappropriate
one bad apple, as they say . . .: "Sonntag has dug into one of the public sector's biggest rat's nests"
The good news here is how the I-900 audits haven't revealed other nests. These vermin are contained. Eradication should prove to be a straightforward matter. Fortunately the budgets had enough play in the joints (contingencies). These necessary and critical public facilities will be coming on line as planned.
Posted Fri, Dec 21, 11:12 a.m. inappropriate
RE: one bad apple, as they say . . .: That's not the impression I've been getting. It seems every month there's a new story of how Sonntag has discovered corruption or incompetence in some agency or another (and usually had to deal with lack of cooperation or outright sonewalling to uncover it). As someone who served for a while in Pierce County government when Sonntag was County Auditor, I can attest that he is one of the most civic-minded, impartial and competent people I've ever met in government. I hope he chalks up a lot more victories like this one for the taxpayers.
Posted Fri, Dec 21, 2:39 p.m. inappropriate
The Port of Seattle: the 3rd Runway of Regional Politics: Knute, good report. Maybe five years ago or so, I recall reading about longshore clerks making $100K doing their work with paper and pencil instead of a computer, hiring based on nepotism, and coordinated port strikes all along the West Coast. I may have all these factoids wrong, but the whiff of waste and corruption was what I was left with. Recently, the Dinsmore affair and the reported woeful inefficiency of the Port of Seattle relative to other ports reinforced my negative perceptions of the Port. So now comes the audit. Here are just a few of the many alleged sins of the Port I've excerpted from the Auditor's Report and edited down a bit (estimated savings follow some items):
- A 1993 consulting agreement grew without competition from $950,000 to $30M.
- A 1998 consulting agreement grew without competition from $10M to $120M and is used to augment Port staffing. $60M
- A 3rd runway procurement violated applicable procurement laws, and details were concealed from the Port Commission. $32M
- A 3rd runway construction contract is managed by a former employee of the contractor; and a consultant served on a selection committee that awarded his subcontractor $5.8M.
- The "Livelink" construction document management system is not being used properly. $864,463
- Failure to enforce contract requirements contributes to schedule overruns and an inability to recover $1.2M.
A place that somehow has made nearly $100M in unnecessary expenditures might be considered a criminal racketeering enterprise by some. Maybe some of the allegations aren't true, are half-truths, or are just differences of opinion. The Port makes the counter-case for each item. However, the breadth of Port operations, the fact that the audit was just a sampling of Port operations, and the leaking of millions, which seems to be business as usual, makes reforming the Port hugely important. The challenge is how to best bull-doze this quasi-corrupt fiefdom in such a way as to turn it into an efficient, effective, accountable organization. A modest proposal:
1) Investigate and enforce the law
Gregoire should declare a state of emergency, put the AG on the case, and make the Port a ward of the State so that the Port is no longer a free-standing entity. Compare the construction and union contracts at the Port to other comparable contracts in government and adjust future expectations accordingly. Investigate all past Port construction projects done over the last 15 years for evidence of waste, fraud, and corruption (i.e., follow up on the Auditor's work).
2a) Reorganize.
Create a commission whose charge is to consider whether to merge the Port with the Port of Tacoma , spin off the Airport, spin off construction management, and review the desirability of an unaccountable, rapacious, taxing authority in the context of the State's larger larger transportation picture, or
2b) Disband Baathist style,
Maybe Eyman will do an initiative that proposes disbanding the place, putting its assets up for bid, and walking away. Do you think it would win? Should it?
3) Daylight all business documents on the internet using Livelink
Give the Auditor the authority to overhaul the reporting and documentation requirements (i.e. for contracts, budgets, contracts, schedules, transactions, memos, email, etc.) and require it accessible on the internet to the public.
To be sure, there are a lot of reasoned responses from the Port for the above alleged atrociousness. Whatever the real situation (and it's likely mixed) the coin of the political realm right now is Trust, and this is a perfect example of a situation that left unattended is fuel to the fire of citizens' distrust of government. I'm ashamed that any of my tax money goes to the place.
Posted Fri, Dec 21, 4:53 p.m. inappropriate
Ports more recent failures: were visible to anyone who was working, for other entities, on the
inside.
for 5 years I had to suffer working at the airport, while not for the port,
for 'another' government agency.
I came away with the impression that the Port of Seattle ( airport ops )
was run by people hired because they are/were of the proper sex, race
or political persuasion - NOT because they were technically competent or
capable. From the parking operations to the "police" department, I
witnessed, over and over, individuals who displayed incompetence.
The port's south terminal expansion project was a management disaster
and yet, it is named after an 'individual' who is no longer employed.
The extensive conveyor additions and modifications and their management
are a second disaster - and the port will continue to pay for this for years
to come - ACTUALLY - it is WE, the taxpayers who will 'pay' !
I observed the port hiring people who had been let go by other agencies at
the airport - and yes, these rejects continue to infuse the port of seattle airport
with their incompetence.
It is a very sad commentary when the Port of Seattle comes off looking as
inept as the transportation security agency and it's airport operations.
Posted Thu, Jul 24, 10:03 a.m. inappropriate
RE: quite so: alec fisken has been replaced by "son of pat": Yes. Shame on the Dailies and the sanctimonious editors who turned a blind eye to the Port during the 1990s. Aside from a 'one-off' here and a 'one-off' there, the Port remained out of the media spotlight during the time when the staff-driven port was engaged in activities that should have been scrutinized. This didn't happen by accident, either.
The Port hired journalists from the regional dailies to reinforce their cozy relationship with the mainstream press. Some now write for Crosscut.
Good for the PI for investing in a Port beat. We need more critical journalists in this town, and editors who are less afraid of risk.