Friday, October 26, 2012

Outside Review Finds No Port of Seattle Conflict of Interest

Legal counsel and an ethics expert hired by two Port of Seattle commissioners to investigate whether the port’s CEO committed a conflict of interest when he accepted a position on the board of a for-profit logistics company have found no wrongdoing.

In a report dated Oct. 22, investigator Gerry Alexander, a retired state Supreme Court justice, wrote that Yoshitani serving on Expeditors Internationals’ board doesn’t violate Washington state law or the port’s ethics rules because the logistics company doesn’t compete with the port or conduct business directly with the port.

“It is my conclusion that Mr. Yoshitani’s service on the Board of Expeditors does not create a real, perceived or appearance of a conflict of interest. Neither does his service on that corporation’s Board run afoul of the statutory Code of Ethics for Municipal Officers or any Employee Codes of the Port of Seattle,” he wrote.

The port had announced on Sept. 25 that commissioners Tom Albro and Rob Holland, acting as a temporary subcommittee, would be hiring outside legal counsel and an ethics expert to review the port’s position that CEO Tay Yoshitani serving on the board of directors of Expeditors International did not represent a conflict of interest.

Although the month-long investigation found no wrongdoing, Alexander did present the port board with one recommendation in his report.

“Going forward, the Commission might consider providing in future employment contracts with its CEO that before the CEO may accept a position on the Board of Directors of a private entity, the Port Commission must give its approval to this outside employment,” Alexander wrote. “There may be instances in the future where the CEO’s service on a corporate board is not, technically speaking, a conflict of interest but does, at the same time, generate a response from members of the public that is damaging to the port’s reputation and reduces public confidence in it. Requiring an evaluation of the potential impact of such employee-employer relationships before the fact is, in my judgment, far superior to making those determinations after the fact.”

The suggestion was a partial reference to the situation that led to the review. In August 13 King County, Washington legislators urged the port to look more closely into various issues raised by Yoshitani’s acceptance of the second job. In an Aug. 24 letter, the lawmakers said Yoshitani serving on the Expeditors board could result in the company’s clientele gaining a competitive advantage over non-Expeditors port customers.

Yoshitani, who has been the port’s executive director since March 2007, was announced as the newest member of Expeditors’ board Aug. 7. In the role, he stands to earn more than $230,000 in annual compensation – consisting of $30,000 in cash and up to $200,000 in restricted stock options – on top of the nearly $367,000 a year he earns at the port.