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American Shipper

Seattle port accepts resignations, disciplines others

Seattle port accepts resignations, disciplines others

The Port of Seattle's top executive has accepted the resignations of two employees named in a port fraud investigation and disciplined seven others.

   Port Chief Executive Officer Tay Yoshitani said Tuesday that prior to their offers to resign, moves were under way to fire John Rothnie, manager of the port's $125 million third runway construction project at Sea-Tac International Airport, and Larry McFadden, general manager of Port Construction Services.

   Both managers were identified in the findings of a $1.4 million investigation conducted by former U.S. Attorney Mike McKay. The investigation, begun earlier this year at the behest of the port commission, sought to corroborate 50 instances of fraud alleged by a state performance audit late last year of the port's contracting procedures. McKay's investigation corroborated 10 instances of fraud and identified 10 port staff members involved.

   On Tuesday, Yoshitani also identified four port managers that have received suspensions without pay for involvement in fraudulent activities identified by McKay's final findings report:

   ' Ray Rawe, chief engineer.

   ' Paul Powell, manager of contract services.

   ' Robert Riley, director of the port's Aviation Capital Improvement Program.

   ' David Soike, deputy managing director of aviation.

   Rawe was suspended for three weeks; Powell, Riley and Soike were suspended for once week each.

   Yoshitani also said he planned to place letters of reprimand in the personnel files of three additional staffers named in the McKay investigation:

   ' Linda Strout, deputy chief executive,.

   ' Craig Watson, port general counsel.

   ' Mark Reis, managing director of the aviation division.

   Rothnie, who tendered his resignation last week after being accused of four incidents of fraud in the McKay investigation, said Tuesday he was acting under direct orders and legal guidance from his port superiors.

   Claiming he was being unfairly targeted for actions involving several of the staffers who were simply suspended, Rothnie produced an e-mail for the Seattle Post-Intelligencer on Tuesday that he said showed 'at least three of the four staffers' suspended had 'exact knowledge' of at least one incident in the McKay report.

   McKay said in his findings that Rothnie steered an internal port estimate of a major contract on the port's Sea-Tac third runway project to a potential bidder. The same employee, according to the report, also misrepresented financial details of the same port contract, by then awarded to the firm which received the leaked port estimate, in an effort to avoid commission scrutiny.

   The Rothnie-produced e-mail indicates that at least three of the four suspended port managers were part of a group of employees the report said, 'falsely represented a $2 million cost reduction (in a third runway project contract) as a $9.4 million reduction in an attempt to avoid commission scrutiny.'

   Rothnie told the paper that while some of his actions were the result of 'extremely poor judgment' and 'just plain stupid on my part,' there was no collusion between himself and the contractor involved in the third runway project.

   McKay, who did not have subpoena powers or the ability to compel port staff members to answer questions, said the in some cases he was unable to determine who exactly did what in the fraudulent incidents he cited.

   The former U.S. attorney also said that port staffers frequently told investigators that 'they couldn't remember' details of events, however, McKay pointed out that these events took place up to three years ago.

   Despite the depth of the investigation, McKay could not determine if any of those found participating in fraudulent activities personally benefited from their actions.

   On Tuesday, Yoshitani also said the port would follow recommendations put forth in the McKay final findings report, including developing a compliance program to assure port staff are aware of and follow all proper contracting laws and policies. The report also suggests the port conduct a similar investigation of all procurement processes to determine if federal or state laws have been violated in regards to grants obtained by the port.

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