Tuesday, December 11, 2012

Oakland Port Exec Resigns Amid Scandal

Port of Oakland’s maritime director is stepping down in the wake of an investigation showing that he and another executive falsified a report regarding usage of a port credit card at a strip club.

The port announced Dec. 11 that maritime director James Kwon is retiring effective Dec. 28. He and former Executive Director Omar Benjamin were the two figures in the middle of the scandal, during which spending policies were violated.

An investigation conducted on the port’s behalf found that a $4,500 tab in Houston from 2008 was not actually a drink and dinner reception, as had been identified on an expense report, but a trip to a strip club. The investigation also found that in September 2009, Benjamin and Kwon expensed $925 to the port for a “business retention meeting” in Minneapolis that was actually another strip club visit.

Benjamin announced in mid-November that he was retiring as executive director after having held the position since 2007. He had been on paid leave since Oct. 18 as part of the investigation and was replaced on an interim basis by port Director of Aviation Deborah Ale Flint. Flint in turn placed Kwon on administrative leave Oct. 19.

The port says it has received repayment of the public funds that were spent during the two identified instances.

The investigation was conducted over the course of about a month by international law firm Arnold & Porter.

“While the vast majority of what was uncovered was an organization of people doing their jobs ethically and responsibly, we also found outdated policies, a few irresponsible actions, and a few isolated cases of improper expenditures,” Board President Gilda Gonzales said of the investigation.

As a result of the scandal, the port has developed what it calls its “Matrix for Responsible Expense Practices,” which sets new rules and regulations for port staff to follow. They include guidelines for spending on flights, hotels and meals and new rules establishing permissible spending levels for hotels and meals.

Also, the number of persons holding port charge cards is being reduced, and the port intends to step up enforcement of the existing purchasing card policies to hold both card holders and approving officials fully accountable.

“I am very pleased that the board has helped us turn a page toward transparency and accountability, which were goals when I was appointed,” Ale Flint said.