The latest Port controversy might seem like small potatoes compared with previous scandals. But it raises questions about the judgment both of its resigned CEO and the commissioners who hired him.
Are ports more prone to scandals than other complex human organizations? I doubt it, when the competition includes banks, pro sports and the Pentagon. But when they happen, they grab popular attention, even in technopolis Seattle.
In the iconic 1954 film “On the Waterfront,” the character Father Barry, played by Karl Malden, put it this way:
“You want to know what’s wrong with our waterfront? It’s the love of a lousy buck. It’s making love of a buck — the cushy job — more important than the love of man!”
Is that why Port of Seattle commissioners finally gave CEO Ted Fick a one-way ticket to Palooka-ville?
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According to reporting from my colleague Mike Rosenberg, Port commissioners claim Fick surprised them by taking the 7 percent bonus they approved for hundreds of salaried Port employees (in his case, translating to a $24,500 bump on top of his annual $350,000 salary). Also, commissioners said he improperly accepted gifts from Port customers. He took a job on a private, for-profit board. The commission also said he was apparently steering business to his father’s company. Then there was the DUI.
Fick was further damaged by the state auditor’s pronouncing that $4.7 million in raises given out to Port employees were illegal.
Fick, who resigned early this month after going on leave during a performance review, has denied any wrongdoing.
This is pretty tame stuff compared to how badly things can go wrong at ports.
The storied Red Hook Marine Terminal in Brooklyn, whose corruption and connection with organized crime inspired “On the Waterfront,” is pretty clean now. Yet in 2009, an investigation found widespread lawbreaking by the supposed port watchdog.
In 2014, a scandal at the Chinese port of Qingdao cost world metals markets an estimated $3 billion. The complex scheme allegedly involved a firm fraudulently duplicating warehouse certificates. They were used as collateral for bank loans going to shadowy operators.
And don’t forget the 2013 “Bridgegate” scandal that sank New Jersey Gov. Chris Christie’s prospects. The Christie-appointed chairman of the Port Authority of New York and New Jersey resigned because of the politically motivated lane closures on the George Washington Bridge. This led to a separate investigation resulting in an airport-related bribery charge, to which he pleaded guilty.
The latest dust-up at the Port of Seattle is even tame compared to some of its own recent history.
For example, in 2007 Port police officers were caught using work email to send pornographic and racist emails. An independent investigation not only cited leadership problems at the Port but also said the probe into the emails was itself poorly handled.
A year later, an investigation documented 10 cases of fraud in Port contracting. Among them: A Port employee leaked sensitive documents to a contractor who later made a jaw-dropping 30 percent profit as part of building the third runway at Seattle-Tacoma International Airport. An earlier audit had warned of lax contracting practices.
This time, the auditor focused on one-time bonuses for 642 nonunion employees. Commissioners approved the payment because the nonunion workers’ schedules were being increased — to 40 hours a week, from 37.5 — but the auditor said the bonuses violated the state constitution because they weren’t tied to any specific performance goals. This arcane finding, which the Port is correcting, is hardly the stuff of corruption. Unless more damaging details come out.
Still, L’Affaire Fick should lead to some soul searching by commissioners. They answer to taxpayers who partly fund the Port’s $385 million operating budget.
Commissioners complain, rightly, that most of the region doesn’t appreciate the economic importance of the Port and maritime sector, and even takes the airport for granted.
They also led the battle to prevent the City Council from vacating part of Occidental Avenue to further hedge-fund manager Chris Hansen’s bid to build a Sodo arena. Again, I think they are correct in seeking to protect logistics movement in the area. But it made them plenty of enemies among sports fans.
With so much at stake, commissioners took a risk in hiring a man with zero public-service background. Tay Yoshitani, the previous chief executive, was a West Point graduate with extensive Port experience, working in both the public and private sectors (and even he faced some controversies).
It might have worked out. Early in his tenure, in 2015, I wrote:
“Meet Fick and he comes off as whip-smart, gregarious, intense and quick to describe himself as demanding. He has that special confidence of a hired management gun, and I mean that in a good way. He will seek to lead, not be a mere timeserver.”
Fick made an excellent hire in Lance Lyttle as managing director of Sea-Tac airport. Lyttle’s improvements are striking and welcome. Fick also reformed an ossified Port bureaucracy.
On the other hand, Fick was uncomfortable reporting to a public commission. He gained a reputation among the staff for being pompous and driving down morale.
But the Port commission owns this mess.
When Fick took the outside board position, it should have discharged him. Port counsel should have flagged the raises as a potential problem. Commissioners should have told Fick explicitly the raise didn’t apply to him.
The Port CEO position today is very different from that held by Yoshitani. The seaport is largely the mission of the Northwest Seaport Alliance, overseen by a separate chief and the commissions of both the Port of Seattle and Port of Tacoma. The CEO today oversees business units that are their own financial centers, yet do critical public work.
Fick’s successor needs a deep commitment to the core missions of a public port. This one’s on the commission, too.