Tuesday, December 9, 2008

Two Port of Seattle executives resign in fraud scanda


SEATTLE – Two Port of Seattle executives have resigned in the wake of the Port fraud scandal and more employees could be punished.

“Both employees submitted their resignation after being confronted with this information and I have accepted their resignation,” said Port CEO Tay Yoshitani.

A disciplinary report was released Tuesday morning. Most of the fraud findings involve the third runway at Sea-Tac Airport and a cozy relationship between several Port executives and contractors which resulted in things like altered invoices and no competition in some of the bidding.

Yoshitani identified the executives who resigned as Larry McFadden, General Manager of Port Construction Services and John Rothney, Project Manager for the third runway.

No further resignations or firings have been announced, but more discipline is expected.

The Port’s chief engineer will receive a three week suspension without pay due to his knowledge of a memo in his possession that identified the misrepresentation of some documents that went to the elected Port commission.

Three senior managers have received one week suspension without pay for failing to mention the contingent nature of these contract adjustments that lowered the value of a bid.

A letter of reprimand has been placed in the files of the deputy CEO, the Sea-Tac Airport director and the general counsel because of their positions of authority.

Through all of it, the lead investigator, former U.S. Attorney Mike McKay, says they found no evidence of criminal wrongdoing by individuals.

Though they have no totals, the auditors say millions were wasted. They say one contractor known as TTI made profits on the third runway that were double and even triple the normal amount.

Yoshitani says a lot of people were obligated to blow the whistle on what was happening and didn’t do so.

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