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Public officials are entrusted with the public’s money. They are expected to spend the money wisely and prudently in the public’s interest and for the public’s benefit. Usually they do, but sometimes they don’t. When they don’t, it often escalates to become contract fraud. What happened at the Port of Seattle is a useful primer explaining the kinds of actions that may be contract fraud. |
The Seattle Times is reporting that former US Attorney Mike McKay, hired by the Port of Seattle, has found ten instances of fraud in the Port’s contracting practices. McKay’s entire report is available here, and the Executive Summary is here.
Those in Coeur d’Alene who followed the almost $3 million Kroc Center dirt-moving, hole-filling, sole-source contract saga will enjoy reading the Seattle Times article dated January 28, 2008, by reporters Bob Young and Jim Brunner. The article was headlined Steakhouse deal: How Port allegedly broke laws, hid costs from public.
Public agencies are required to follow procurement regulations. Regulations — not suggestions. The regulations exist to prevent fraud, waste, and abuse. The public whose money is being spent expects accountability and honesty.
Sometimes public officials feel that following pesky regulations slows them down and impedes progress. They start cutting corners, violating procurement regulations, all in the public interest, of course. But some of those officials go a step further. They decide that for whatever reason, they are entitled to make “a little extra” for themselves, sort of an efficiency bonus. That’s when a regulatory procedural violation may become a criminal offense.
I expect that the US Attorney for the Western District of Washington will take a very close look at Mr. McKay’s report. He may well conclude that criminal prosecutions are warranted.
Since our local officials in Coeur d’Alene seem to be in love with all things Seattle, it seemed like a good idea to post this information.
December 4, 2008 – Today’s updated Times story is headlined Port of Seattle probe exposes fraud, a “get-it-done culture”.
As the story notes, even a former federal prosecutor investigating as a private citizen without subpoena authority and without authority to compel sworn statements can only go so far. But as the story also says, the information has been turned over to the US Department of Justice which is now conducting a criminal investigation into fraud at the Port of Seattle.
This line from the story sounded very familiar to us in Coeur d’Alene: “Bryant said the report revealed a “get-it-done culture” at the Port ‘that had arrogant disregard for open government.'” Bryant is Port Commissioner Bill Bryant who oversaw former US Attorney McKay’s investigation.
Finally, if you have read McKay’s report or the newspaper articles, you’ve seen a name that may sound familiar: Scarsella Brothers Construction, Inc.. In 2004 the US government sued the Idaho Transportation Department (ITD) and Scarsella Brothers, Inc., “…contending they failed to provide adequate stormwater controls for a project that deposited tons of sediment into Mica Creek, which flows into Mica Bay on Lake Coeur d’Alene.” According to the May 2006 US Water News Online, ITD and Scarsella “…have agreed to pay federal fines totaling $895,000 after part of a road project collapsed into Lake Coeur d’Alene in Idaho…”
Comment by Bill — December 4, 2008 @ 7:30 am