Port not yet sure whom to punish over contract fraud
Who hid the truth about the high cost of a major construction plan from Port of Seattle commissioners?
That’session a key question for Port CEO Tay Yoshitani, who will announce Tuesday disciplinary measures in countervail to Port employees involved in 10 cases of contracting fraud identified last week in a $1.4 million Port investigation.
To follow through adhering his “zero tolerance” policy for fraud, Yoshitani must decide who was liable for rewriting a memo that deliberately misled Port commissioners about a $125 million contract and concealed from them troubling facts about the proposed contract.
The memo was one of the utmost serious problems found in the Port scrutiny by former U.S. Attorney Mike McKay. Had the memo not been rewritten to hide guide knowledge of facts, McKay said, it likely would have triggered more scrutiny by commissioners. That could have led to rebidding the contract or another option that ability be in possession of saved taxpayers millions.
A state audit continue year said the Port misspent $32.8 million on the project because it paid that much more than the Port’s $93 million require to be paid estimate for the job, which entailed structure a huge plateau of dirt for the new third runway at Seattle-Tacoma International Airport.
Port Commission President John Creighton said he is “very much concerned” about the memo. Identifying those who rewrote the memo to make it deceptive “is something Mr. Yoshitani needs to be working on,” uttered Commissioner Bill Bryant, who oversaw McKay’s investigation.
In its at the head version, a Dec. 22, 2005, memo by means of Ray Rawe, the Port’sitting chief engineer, did which it should have: It clearly told commissioners the lone bid from TTI Constructors exceeded Rawe’s cost estimate through additional than 10 percent. The 10 percent threshold is a Port policy intended to alert commissioners to high bids and situations where jobs could be rebid or rough into pieces to possibly captivate more competitive bids.
But in subsequent versions, the memo was diluted and did not mention that the lone charge was 19 percent greater than the engineer’s estimate. “A join of flares were going up” in the elementary draft, McKay said, “and those flares were deleted in the process.”
The revisions also misled commissioners about purported reductions in TTI’s bid that supposedly would cut it from $125 very great number to $115 million.
In fact, some Port employees knew most of the reductions were not actual but cosmetic, McKay said in his report, and those were emphasized to “hush the errand into taking no action.” In the end, the reductions did not materialize, and TTI was paid $125 million for a job that cost the firm $96 million, according to McKay.
The memo failed to mention another of McKay’s findings: that a Port employee might wish colluded with TTI by providing the company a detailed spreadsheet of the Port’s estimated costs for the third-runway job before TTI submitted a bid. TTI was the sole bidder concerning the job.
The memo is an example of information the Port concealed from state auditors. David Cotton, the state’s lead auditor, spent considerable time examining the TTI contract and requested all records pertaining to it. Although he received later, diluted versions of the memo, he said he never got Rawe’s first letter version.
But Yoshitani may not be expert to pinpoint culprits. “The problem is that so numerous company people looked at it and made changes, we were not practical to identify with complete accuracy who made what changes,” McKay said.
The memo was addressed and copied to a dozen summit Port managers, including preceding Port CEO Mic Dinsmore and the airport’s director, Mark Reis.
A high-ranking Port official, who requested anonymity, reported he expects only pair Port employees to be fired in the wake of McKay’session inquiry, with neither result connected to the memo.
McKay maintains that Port managers share a “collective responsibility to travel over sure what ends up before the commission is accurate” and that there’s reason to believe a group was involved “in diluting the memo.”
McKay will immediate his investigative narration to the Port give a commission to Tuesday. Yoshitani, the Port CEO, will present his response to the report afterward.
Bob Young: 206-464-2174 or byoung@seattletimes.com
