The investigation into Seattle Department of Transportation Director Scott Kubly is looking at whether he violated the city’s Ethics Code by not obtaining a waiver to work on matters involving his former employer, Alta Bicycle Share.
The investigation into Seattle Department of Transportation (SDOT) Director Scott Kubly is examining whether he violated the city’s Ethics Code by not receiving permission to work during his first year at City Hall on matters involving his former employer, a Seattle Ethics and Elections Commission official said Tuesday.
Kubly didn’t obtain a waiver from the ethics commission allowing him to work on business regarding Alta Bicycle Share, which was operating the Pronto bike-share system in Seattle when he was hired.
The former Alta Bicycle Share president also didn’t seek a waiver before he approved a $250,000 contract with Alta’s sister company.
This year, Kubly led the city in taking over the troubled Pronto.
Mayor Ed Murray’s legal counsel knew from the beginning Kubly might need a waiver. On July 11, 2014, less than two weeks after his appointment, she sent Kubly an email with the subject line “Welcome & Potential Conflict of Interest Waiver.” But because of an apparent email mistake, Kubly sent his response only to himself.
“I’m contacting you to begin the process of identifying potential areas of conflicts of interest pursuant to our Ethics Code,” M. Lorena González, who left the mayor’s office in 2015 and is now a City Council member, wrote in her email to Kubly.
“Then we must come up with a plan to avoid potential conflicts of interest for the next 12-month period,” she added, asking Kubly to answer a number of questions. “The sooner we put this plan together and submit it to Wayne Barnett, director of the Seattle Ethics and Elections Commission, the better.”
González had just completed a similar plan for Seattle’s new chief technology officer, Michael Mattmiller, she said in the email. Mattmiller had been working for Microsoft.
“Once I receive this information I can draft up a plan for your review before sending it to Wayne for approval,” González wrote.
González never heard back from Kubly with “information regarding his previous employment at Alta Bike Share,” according to Viet Shelton, a spokesman for the mayor.
“From a review of available records, it does not appear that the mayor’s office received a response from Mr. Kubly and as such, no waiver request was ever formally submitted,” Shelton said in a statement.
Kubly did reply to González’s questions — in a note from a personal email account to his government email account. But he didn’t send the answers to González.
“I think it shows the intent to disclose,” he said in an interview Tuesday, declining to comment further due to the ongoing investigation.
Kubly could be fined up to $5,000 per violation if the investigation finds wrongdoing, said Kate Flack, strategic adviser for the ethics commission.
Kubly’s ties to Alta Bicycle Share, which had been selected earlier in 2014 to operate Pronto, were well known when Murray picked him. The mayor mentioned them in a news release announcing his appointment of Kubly and also touting Kubly’s work for the Chicago and Washington, D.C., transportation departments.
During Kubly’s time in Chicago and D.C., each city brought Alta Bicycle Share on board to operate their bike-share systems. His boss in both cities, Gabe Klein, worked as an adviser for the company.
Their relationship with the company had drawn scrutiny before: In 2012, losing bidders to operate Chicago’s system lodged complaints over the department led by Klein and Kubly awarding Alta Bicycle Share a 15-year contract.
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Pronto launched in Seattle in October 2014 — owned by a nonprofit, with Alta Bicycle Share as its operator and a seat for SDOT on its board of directors.
The month before, Murray and Kubly proposed the city spend $600,000 to expand the system to the Central District.
Also in October 2014, a New York-based investment group announced an agreement to purchase Alta Bicycle Share. It later rebranded the company as Motivate.
By April 2015, Kubly was calling for a massive and rapid expansion of Pronto, records obtained by The Seattle Times under a public-records request show.
During that time, no one made sure an ethics waiver was submitted and approved.
“My responsibility as legal counsel at the time was limited to notifying Mr. Kubly of his obligation to declare any conflicts of interest and to seek a waiver of those conflicts,” González said in a statement Tuesday.
“I fulfilled that responsibility when I emailed Mr. Kubly asking him to do so. When I did not receive a response from Mr. Kubly, I assumed, perhaps erroneously, that he did not believe there were any conflicts that needed to be waived at that time.”
In the note Kubly sent to himself but not to González, he acknowledged a role in executing Alta Bicycle Share’s contract with the Pronto nonprofit.
“There is potential for a perception of conflict of interest if the city or SDOT uses public funds to expand (Pronto),” Kubly wrote, saying he had no ownership in Alta Bicycle Share and would not have any financial interest in the company in the future.
After a year on the job, Seattle employees no longer need permission from the ethics commission to work on matters involving former employers. They need only disclose the existence of such matters and any potential conflicts.
Kubly submitted an Appearance of Conflict or Impaired Judgment form to the ethics commission on Sept. 1, 2015, to disclose his past employment with Alta Bicycle Share and negotiations by the city for a new contract with Motivate.
In March, the council approved Kubly’s plan for the city to buy Pronto from its nonprofit owner with the intention of expanding it. The council passed an amendment excluding Kubly from the selection of a company to operate the expanded system.
Soon after the council’s vote, the ethics commission, responding to at least one complaint from a member of the public about Kubly and Pronto, hired former prosecutor Marilyn Brenneman to conduct an independent investigation.
Months before, SDOT had separately inked a contract with Alta Bicycle Share’s sister company. Portland-based Alta Planning & Design launched Alta Bicycle Share in 2009, according to the company’s website.
The $249,858 consulting contract signed on May 21, 2015, within a year of Kubly’s Seattle appointment, said the company would develop an upgrade and maintenance plan for Seattle’s multiuse trails.
The department selected Alta Planning & Design over two other companies that responded to a request for qualifications. Kubly himself was not on the department’s consultant-evaluation committee for the contract.
Kubly said Tuesday he didn’t think he needed permission from the ethics commission for city business involving Alta Planning & Design. While working for Alta Bicycle Share, Kubly never did work for Alta Planning & Design, he said.
“They’re separate companies,” he said. “Their client bases are different.”
Motivate’s Washington state business license still lists as its location the address of Alta Planning & Design’s Portland headquarters, and Steve Durrant, the Seattle-based Alta Planning & Design vice president who signed the trails contract, is still listed on Alta Planning & Design’s website as a principal at both Alta Planning & Design and Alta Bicycle Share.
The Times made a public-records request on Feb. 1 for communications from Kubly related to Pronto. The department has yet to provide those records.