VERY Questionable Expenditures

There were some rumblings in the past about some of the spending abuses at the Port of Oakland, and on October 16th the Chronicle writers Philip Matier and Andew Ross provided further information on that matter.

There has been dissatisfaction in recent years about the amounts of money given to U.S. port officials and the behavior at Oakland has begun to annoy the taxpayers. In an article entitled, “Oakland Port Spending: More Muck Ahead”, the above columnists wrote:

“The $ 4,500 that Oakland port Maritime Director James Kwon allegedly shelled out to entertain shipping executives at a Houston strip club may be only the most embarrassing example of the port’s misspent public dollars.

“According to a well-placed source, port Executive Director Omar Benjamin and the commissioners who oversee the operation were told in closed session that the port is looking at ‘hundreds of thousands of dollars in questionable expenditures’ by higher-ups going back several years.

“‘The good news is that in the last couple of years they have put in stricter controls,’ said our source, who spoke on conditions of anonymity because of the ongoing investigation. ‘The problem is, they have a lot of funky stuff from the past that is going to continue to haunt them.’

“In addition to the Houston strip club trip that we told you about Monday, a records search by KTVU-TV found that Kwon expensed $ 476 in haircuts, $ 1,000 in wine, and bills from massage parlors, golf outings and a $ 350 pair of Ecco golf shoes.

“There are also rumors swirling about the waterfront that Kwon was not the only port executive at the Houston strip club that night in 2008.

“‘I can’t speak to that or any other aspect of the investigation at this point,’ said port spokesman Isaac Kos-Read.

“Kwon is in China on a port business trip and has yet to comment.

“Port commissioners aren’t saying anything, either. They ordered up an independent investigation Monday, but would not say what the probe would cover.

“The agency is also sitting on a 2011 in-house audit of all port credit-card expenses and refusing to release it, citing legal concerns.

“‘They are running around like a bunch of chickens with their heads cut off,’ the source said.” –
But wait – there’s more..’

A followup story in the October 19th issue of Cargo Business News, began with this headline:

“Port of Oakland Board reacts to misuse of public funds allegations, puts Executive Director Omar Benjamin on leave”

“The Oakland Board of Port Commissioners has taken action in response to a allegation reported this week that Maritime Director James Kwon misused public funds in the amount $ 4,500, entertaining shipping executives at a strip club during a conference in Houston in 2006.

“The board put Executive Director Omar Benjamin on administrative leave with pay effective immediately, according to a statement released on Thursday. No reason for the leave of absence was disclosed.

“‘We continue to take this situation very seriously,’ said Board President Gilda Gonzales. ‘Holding those responsible accountable is our highest priority.’

“The commissioners appointed current Director of Aviation Deborah Ale Flint to serve as executive director.

“At the direction of the board, the Port of Oakland hired Arnold and Porter, an international law firm, to help with the ongoing investigation into allegations of improper expenditures of public funds at the port.

“Kwon, attending a conference in China, remains unavailable for comment. The reimbursement came to light years after it was submitted, port officials stated, because the receipts listed the charge to ‘D. Houston Inc.’ the parent company of Treasures Strip Club.

“The port has set up employee assistance program sessions, to respond to concerns of port employees. The port has encouraged the use of the Whistleblower Hotline to report any related issues.” –

The first step taken by Ms. Flint was to order James Kwon to return from China and be placed on administrative leave. Then she appointed Deputy Executive Director Jean Banker to take his place as acting director of maritime.

“‘I’m taking these actions to ensure that our 24/7 operations continue to meet our customers’ needs,’ said Flint. ‘These actions are also critical so that the port can continue being the economic engine of the region that it is. We must remember that we are a $ 437 million per year operation that drives over 73,000 jobs in this region.'” –

[Dear Ms. Flint; If Oakland officials had heeded our advice and installed our patented container handling systems a few years ago: a. ) the Port of Oakland, today, would be a $ 4 billion operation every year, b.) the Port of Oakland, today, would be driving more than 200,000 jobs in the region, and c.) there would be, today, no “embarrassing examples of misspent public dollars” at the port.]