Ridenbaugh Press/Northwest

Google “Port of Seattle fraud” and Google says they can find “about 119,000″ hits . . . which, yes, isn’t a very precise measurement, but sure feels about right. Which more or less suggests why today’s release of an internal investigative report about fraud at the port, which indeed points to some fraud at the port, doesn’t seem especially jaw-dropping.

The new report does, however, get very specific in detailing some of the problem areas. Here are some examples from its summary section:

There are four findings related to the Third Runway that constitute fraud, defined as the intentional misrepresentation or concealment of material information with intent to deceive or mislead and resulting damage.
1. A Port employee provided an internal Port estimate to a potential bidder (TTI) prior to the bid submission date, without notification to the public, any other prospective bidders, senior Port leadership, or the Commission. . . .
2. A Port employee negotiated with TTI after receipt of TTI’s bid, but prior to the award of the contract. These negotiations resulted in a misleading change order that falsely represented a $9.4 million reduction in the amount of TTI’s bid, when the actual reduction was closer to $2 million, and constitutes fraud. This process also included an apparent attempt to cause the Commission to believe that TTI agreed to a contract amount that was within 10% of the Engineer’s Estimate.
3. Senior Port staff provided a misleading notification memorandum to the Commission. . . . The notification memorandum that was provided to the Commission not only failed to inform the Commission of the true facts surrounding the bid scenario, but also contained overtly misleading language intended to lull the Commission into taking no action as a result of the memorandum, and constitutes fraud.
4. A Port employee made large-dollar premature payments to TTI12 that may have cost the Port many thousands of dollars in lost interest income. . . .
Findings Related to Small Works Roster Program Contracts. There were two findings related to the Small Works Roster Program that constitute fraud.
1. PCS personnel steered contracts to preferred vendors, often to pay for work that had already been performed, by using “expedited” procedures, requesting vendors to not submit bids on identified contracts, not notifying selected vendors on the Small Works Roster of contract opportunities, and opening additional contract opportunities when the “wrong” contractor won a contract. This behavior constitutes fraud.
2. PCS routinely breaks large-dollar projects into smaller “sub-contracts” to fit within the Small Works Roster Program $200,000 contract limit, which constitutes fraud.
Findings Related to Competition for Professional Services Agreements (PSAs). There were four findings related to PSAs that constituted fraud.
1. Port staff circumvented competition requirements by procuring services from preferred consultants by awarding consultant agreements at no-competition (Category A/1) or limited-competition (Category B/2) levels, then repeatedly amending those contracts to the maximum amount and awarding follow-on agreements to avoid the competition requirements of Port policies PUR-2 and Resolution 3181.
2. Port staff executed PSAs and amendments that exceeded the maximum amount allowed by PUR-2 and Resolution 3181.
3. A senior Port executive issued a no-competition $25,000 contract for damage assessment services under an emergency work exemption to PUR-2 following the Nisqually Earthquake. This contract was amended from $25,000 to over $1 million, most of which was for ongoing project management services related to subsequent repair work, which was a different scope of work and outside the “emergency” window.
4. PCS personnel violated PUR-2 by steering work to a preferred minority consultant (3A Industries) to artificially increase the volume of work that appeared to be awarded to minority owned businesses.

And it goes on.

A from a Seattle Times article earlier this year: “The U.S. Justice Department has launched a criminal investigation of the Port of Seattle, following a recent state audit that accused the Port of wasting public money and raised the specter of possible fraud in construction contracts.”

Then, a year ago there was the state auditor’s critical report.

The point being that allegations of troubled procedures are nothing new at the Port.

The second-ranked hit on Google for “Port of Seattle fraud” is this: “Port of Seattle Fraud Hotline. If you see or suspect unethical or illegal activity around Port businesses or facilities, don’t ignore it – let us know.” Sounds like it’s still needed . . .