Justice Department investigating Port of Seattle

Justice Department investigating Port of Seattle

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Story Published: Jan 7, 2008 at 2:07 PM PDT

Story Updated: Jan 8, 2008 at 7:19 AM PDT

By Associated Press

SEATTLE (AP) - The Justice Department has launched a criminal investigation of the Port of Seattle, following a state audit that found port construction projects wasted $97.2 million in taxpayer money.

U.S. Attorney Jeffrey Sullivan and his criminal division chief, Robert Westinghouse, announced the probe in a letter to State Auditor Brian Sonntag, whose office conducted the review, on Friday. The letter asked Sonntag not to publicly identify anyone who provided information for the audit, for fear of compromising the investigation.

"We welcome it because it shows the Justice Department takes our work seriously," Sonntag said Monday. "I don't welcome it because I don't like to see these kinds of things happening."

Sonntag's office released an audit report last month identifying $97.2 million in "unnecessary costs" run up during projects, including the construction of Seattle-Tacoma International Airport's third runway. The audit found that the port sometimes broke state law by letting costs soar beyond original estimates without competitive bids; that it must do more to protect public money from "misuse, abuse and misappropriation"; and that it should hire a chief procurement officer to oversee the awarding of contracts.

It also determined that decisions about construction contracts had been delegated to mid- and low-level staff, and that port managers sometimes withheld information or misled the agency's five elected commissioners about work progress and contract details. Several port workers refused to turn over information sought by the auditors or even altered the information before turning it over, the report said.

Port Chief Executive Tay Yoshitani, who took over last year, issued a letter to the public on Monday insisting that the port did not "waste" the $97.2 million identified, and explained why he disagreed with the audit's calculation.

He added that the audit did uncover ways to improve the port's operations.

His letter did not address the Justice Department's investigation.

"Let me be clear - we welcome and embrace most of the performance auditor's recommendations," Yoshitani wrote. "I don't want our disagreement with the claim for wasted funds to diminish our commitment to developing better policies and procedures."

Port spokeswoman Charla Skaggs said the agency had not been notified of the DOJ investigation, but would cooperate fully.

"Of course, our CEO has said many times that if any fraud were found, we would deal with it swiftly and appropriately," she said.

Westinghouse said the U.S. attorney's office in Seattle had no comment beyond the contents of the letter to Sonntag.

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On the Net:

Audit: http://www.sao.wa.gov/Reports/AuditReports/AuditReportFiles/ar1000008.pdf

Yoshitani's letter: http://www.portseattle.org/about/organization/ceomessage.shtml

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