Show Me the Doubloons!

According to the American Shipper Magazine, a public hearing on the highly critical Washington state auditor’s performance audit of the Port of Seattle is scheduled for January 8th at the port’s Pier 69 headquarters. The state legislature has also scheduled a hearing on the report to be held on the following day, the 9th, in Senate hearing Room 4 in Olympia. As American Shipper reports:

“Released on Dec. 20, the 200-plus-page audit found the port had wasted nearly $ 100 million in taxpayer funds on construction contracts between 2004 and 2007. Most of the ‘unnecessary costs’ detailed in the audit were connected to two contracts related to the construction of a third runway at Seattle-Tacoma International Airport, which is managed by the Port Authority.

“One of the two contracts – awarded to consultant Parsons Brinkerhoff – ballooned from the original estimate of $ 10 million to $ 120 million without competitive bids. The audit found that port engineers could have done the job much cheaper and saved taxpayers $ 60.5 million. The second contract, awarded to construction firm TTI, came in $ 32.5 million higher than the port’s original estimate. The audit found that the contract violated state law and details were kept from the port commission.

“In addition to the violations of state law, Washington state auditor Brian Sonntag also found that port officials did not follow proper contract bidding procedures and in some cases allowed vendors to make decisions reserved for port officials. The audit also claimed that some port staff members impeded audit investigators and refused to certify the accuracy of the information that was provided. Sonntag also said that in some cases, records were altered before being turned over to his investigators.

“Federal and local law enforcement officials have said they are considering launching their own investigations into the findings of the audit.

“Port officials said that while they do not agree with all the findings of the audit, they take the audit seriously and plan to implement many of the 51 recommendations detailed within the report, including hiring a chief procurement officer for the port.”

This audit and the interest shown on the part of “Federal and local law enforcement officials” will serve as a wake-up call to other port authorities around the country. There are no reports of our humungous container ports generating enormous profits and turning over sizeable amounts annually to sponsoring state governments. On the contrary, most ports are not at all hesitant about requesting millions of dollars from taxpayers for senseless expansion programs. As a result, ports are commonly looked upon as losing endeavors by neutral observers … as is evident, for example, in the opposing stance taken by Rhode Island residents.

Yet the likes of AIG, Goldman Sachs and the Canadian Teachers’ Pension Fund are investing billions of dollars in what insiders have described as “the gold mines of today”. Go figure.