A Waterfront Brawl

E-mails suggest Port of Seattle CEO Mic Dinsmore tried to influence last year's Port Commission election, and two of the five members think he should go.

For many, last year's races for Port Commission were the most important in the Port of Seattle's 94-year history. Sharing that assessment is CEO Mic Dinsmore, one of the most powerful men in Seattle. Dinsmore runs a port that owns 1,400 acres of working waterfront and Seattle-Tacoma International Airport. It has a $1 billion annual budget. He is also the chairman of the Seattle branch of the Federal Reserve Bank of San Francisco, a vital part of the federal government's most powerful economic tool. Dinsmore is not an elected official. He is a public employee who reports to elected officials—the nonpartisan Seattle Port Commission, whose five part-time members, chosen by voters in King County, serve overlapping four-year terms.

Three of those five seats were at stake last November. The election, Dinsmore and his opponents agree, could have switched control of the commission to members opposed to the CEO's way of doing things. Dinsmore saw it as a battle between those who wanted to continue the Port's mission of essential economic development for King County and those who wanted to destroy it. The CEO's critics saw the vote as pitting reformers with a commitment to environmentalism, civil rights, and living-wage union jobs against Dinsmore, who, they charge, encourages ill-conceived real-estate development that is outside the Port's mission, controls a bureaucracy of questionable integrity, and practices political favoritism.

Dinsmore's candidates prevailed in races for two of three seats that were up for grabs in 2005. Today, three of the Port's five commissioners, a slim majority, can be counted on generally to support Dinsmore and his vision for an agency that has nearly global influence over Seattle commerce.

With so much at stake last November, perhaps even his job, Dinsmore was not a passive observer. E-mails obtained by Seattle Weekly suggest that Dinsmore and his allies may have violated a law against the use of government facilities in political campaigns. And he seems to have been actively recruiting candidates to shore up support on the commission. Dinsmore denies breaking the law or recruiting candidates. He asserts that he did not participate in any Port campaigning even as a private citizen, much less as a public employee.

But the two commissioners who are Dinsmore skeptics, midtermer Alec Fisken and newly elected Lloyd Hara, believe the CEO did violate the law prohibiting use of government facilities in political campaigns, based on evidence Seattle Weekly has collected. Says Fisken: "We could fire him. That would be good." Hara, who was elected in November to an open seat, doesn't support immediate termination but says Dinsmore should leave the Port at the end of his informal term of employment on Dec. 31, 2007. (Dinsmore does not have an employment contract.)

Commissioners Pat Davis and John Creighton, who prevailed in last November's election with help from Dinsmore allies, say the evidence does not show that Dinsmore broke the law. Says Davis: "I don't see anything wrong or illegal." The fifth commissioner, Bob Edwards, a Dinsmore supporter, agrees.

A visit to Dinsmore's office requires one to walk the length of the Port's headquarters at Pier 69 at the northern end of Seattle's central waterfront. On the inside, the 160,000-square-foot headquarters, bought and remodeled for around $37 million, is the most beautiful government building in King County. It is also a symbol for Port critics of arrogance and the wealth of the institution. The headquarters' architects, Hewitt- Isley, brought together the building's existing elements—it's a former warehouse for a salmon cannery—with new construction in a truly inspired fashion. The massive concrete pillars that supported the warehouse have been exposed and decorated and run the entire length of the building. A 400-foot indoor "stream" wanders in a marble trough throughout the first floor, and soaring ceilings with skylights on the second floor make parts of the space feel more like a cathedral than an office building.

In a corner office with stunning views of Elliott Bay and the Olympic mountains, Dinsmore, 59, who is paid $273,435 a year, runs the Port's operations as he has since 1992, making him the longest serving executive director in the Port's modern history. The Port is a booming business. Last year, record numbers of cargo containers moved through its terminals—more than 2 million. Sea-Tac Airport accommodated 29.3 million passengers. Visitors on cruise ships at the Port's docks numbered 686,000. All of this activity generates thousands of union jobs, billions of dollars of economic activity for the region, and relies on more than $64 million in tax revenue from King County residents.

Dinsmore is dressed in a dazzling white shirt and pink tie, his handsome face framed by a perfectly maintained gray mustache and a thick shock of salt-and-pepper hair. He is utterly composed and confident, betraying emotion only when he talks of Fisken, a commissioner that Dinsmore is convinced wants to tear down the Port out of sheer political perversity. "Alec is about destroying an institution, not building it," says Dinsmore.

Dinsmore believes the effort to destroy the Port began with the election in 2001 of Lawrence Molloy, whom Creighton defeated last November. A "blue-green" coalition of labor unions and environmental activists supported Molloy, a talkative, friendly engineer, and were key to his surprise defeat of longtime incumbent and labor leader Jack Block. Two years later, in 2003, the blue-green alliance won another upset victory when Fisken defeated Eastside venture capitalist Clare Nordquist. In 2005's general election, the "blue-green" alliance supported two candidates—hard-charging Microsoft millionaire Jack Jolley, who unsuccessfully opposed 20-year-incumbent Davis, and Molloy, who faced off against Republican attorney Creighton. The election also featured an open-seat contest between former Seattle City Treasurer Hara and marine lobbyist Rich Berkowitz. While the reformers could not agree on a candidate in that race, Dinsmore and his allies favored Berkowitz.

Some of Dinsmore's most powerful and wealthy allies, including developers Bob Wallace and Frank Stagen, formed a political action committee called Citizens for a Healthy Economy. The PAC raised and spent more than $100,000 to support Davis, Creighton, and Berkowitz, and while neither Wallace nor Stagen does business with the Port, they raised nearly all of the money from businesses that depend on the Port. "It seems at a minimum unseemly," says Fisken. The PAC's assistant treasurer, Davis Wright Tremaine attorney Michele Radosevich, disagrees, saying that the First Amendment of the U.S. Constitution allows everyone to express their preferences through political donations. "Some people do it altruistically, some do it because their business is regulated by government," she notes.

On July 8, 2005, Wallace sent Dinsmore an e-mail that Seattle Weekly obtained through a state Open Records Act disclosure. It reads in part: "Frank [Stagen] concurs, somewhat skeptically, with the decision to spend the $15k on research. Hopefully they will do a good job." Wallace and Dinsmore confirm that the e-mail refers to $15,000 in donations that the PAC planned to give to the Davis campaign to do polling for her re-election bid.

To Hara and Fisken, the sentence says that the PAC was being advised by Dinsmore to contribute the money to Davis. Says Fisken, "It is a damning statement. It suggests that Mic is using his relationship with these people to have an influence on the political races."

Dinsmore and Wallace insist that Fisken is misinterpreting the e-mail. They say that Wallace was simply keeping Dinsmore informed of the PAC's activities. Says Wallace, "I've been on Mic's kitchen cabinet for years. There has been fluid communication. He didn't participate in the decision making."

Wallace's e-mail to Dinsmore continues: "As Stagen and I were discussing today, our friendship with you is costing us a lot of time, money, and political capital. But, we're all on the side of the angels, and this is pretty important stuff. I'm actually feeling fairly optimistic about our chances in November."

Hara and Fisken find this language disturbing. Says Hara, "What is the quid pro quo, if there is any?"

Wallace says he was just kidding around. "If you understand the personalities involved, there was a little ribbing," he says. Dinsmore agrees.

While Wallace and Stagen do not currently do business with the Port, they certainly have a strong financial interest in the Port's direction. In 2004, Stagen tried to get the Port to let him develop 88-acre Terminal 46 into a new neighborhood of shops, parks, offices, condos, and a sport arena. (See "So Long, SoDo," April 28, 2004.) That same year, Wallace led a failed attempt to have the Port invest $25 million in the Meydenbauer Center, Bellevue's convention center.

All kidding aside, Wallace's PAC went ahead and gave the Davis campaign $10,000 for polling last Aug. 21. That same day, as part of an agreement between the PAC and SSA Marine, one of the PAC's key members and the Port's largest marine tenant, SSA Marine contributed $5,000 to Davis, which covered almost the rest of the cost of the polling. Ultimately, Davis paid $16,000 to the Connections Group, which is headed by Seattle political consultant Cathy Allen. Wallace says the Davis campaign then gave the polling data to the PAC and the two other candidates that the PAC was supporting—Creighton and Berkowitz. The transfer of the polling data worth $16,000 to the other campaigns was not reported to the state Public Disclosure Commission, which regulates state campaign activity.

Davis denies that there was any agreement to give the polling reports to the PAC and the other candidates. "This was my poll. If Creighton and Berkowitz got it later, it didn't matter. It wasn't something you would have to disclose." Creighton confirms that after a prolonged struggle, his campaign received the polling report from Davis. Berkowitz says he was not aware of any agreement with the Davis campaign and did not receive any polling reports.

Lori Anderson, a spokesperson for the state Public Disclosure Commission, says that disclosure requirements for such a transfer of information are ambiguous. She does say, however, "If the results were shared and there was some benefit, it would have to be reported. I don't think we know enough of the details to give an answer. We would want to ask them some questions."

Wallace says that after his PAC received the polling results, he sent them along, via e-mail, to Dinsmore at his Port office.

Dinsmore notes that people send him poll results all the time. "I have received polling for other races—the governor, U.S. Senate," he says. "Each of these offices has tremendous impact" on the Port.

Earlier in 2005, Dinsmore exchanged e-mail with Jim Dwyer, now the CEO of Washington Dental Service and formerly CEO of the Port. On May 17, 2005, Dwyer informed Dinsmore that Jolley was going to run against Davis in the coming election. Dinsmore replied, "Not a bad guy, but he needs to get off the kick that he may run against Pat!" Dwyer inquired who was running for the open seat, and Dinsmore replied, "We have a few heavies we are working with. . . . I will call soon and solicit your political clout to help."

Fisken and Hara think that e-mail shows that Dinsmore was not only actively recruiting candidates for the Port election but was using Port facilities to do so. "It's against the law," says Fisken. "It's horrendous to have someone in his position [who is] that active in the political campaigns." Hara says: "You cannot do that. Any political campaigning has to be done on your own private computer or cell phone outside the office."

Dinsmore claims he was not breaking any laws or recruiting any candidates. "That's not how I interpret [the e-mail]. Several people including Jim Dwyer are interested. I never mince words."

The Public Disclosure Commission's Anderson says her agency is responsible for enforcing the law against the use of public facilities for political campaigns. When the commission finds someone guilty of violating the law, it can impose a fine of $1,700 for a single violation and $4,200 for multiple violations. If the commission does not feel the fines are sufficient, it can ask the state attorney general to file a civil lawsuit against the person.

While Dinsmore says he didn't recruit candidates for the open seat, he certainly let anyone who asked know that Molloy should not be re-elected. "Molloy, in four years, I believe, added zero value," he says now. Davis shares Dinsmore's contempt for Molloy. "Molloy was doing a lot of damage with our customers and our employees," she says, and she actively worked to defeat him.

On March 30, 2005, Davis met Jack Jolley, the former treasurer at Microsoft, at a Capitol Hill coffee shop to discuss the upcoming campaign. Jolley had decided to run for Port Commission but he hadn't yet decided whether to run against an incumbent or seek the open seat. Davis urged him to run against Molloy. As a means of encouraging him, she revealed that Molloy had a "sexual-harassment issue," according to Jolley. He recalls her telling him, "We'd like to see you run against Molloy. Molloy has been involved in sexual harassment, and we can make it public at the right time." Jolley was horrified. "I didn't want to run this type of campaign," he says. "I am a private citizen. I'm not entitled to know what goes on in an executive committee of the Port."

Davis admits that she offered the dirt to Jolley. "I said there was information that was disclosable," she says. "If somebody is out to stab you in the back, you don't want to see him there anymore."

Later during the 2005 campaign, a 2004 letter from then–Port Commission President Paige Miller, a close ally of Davis and Dinsmore, to Molloy about his personal conduct was circulating in political circles. The Port says there was never a sexual harassment complaint filed against Molloy. The letter does not charge actual sexual harassment but rebukes him for "inappropriate statements and actions." Molloy says he followed the letter's recommendation that he "undertake training in appropriate workplace behavior and diversity."

Davis' offer of dirt backfired. Jolley decided to run against her and became one of the candidates promising to change business as usual at the Port. But he lost. So did Molloy. And Fisken says that business as usual continues—with terrible results.

Fisken claims that the businesses that funded Wallace's PAC and Davis' campaign are getting huge public subsidies, in the amount of $120 million. Last month, the Port Commission gave the first go-ahead to Dinsmore's proposal to renovate two waterfront facilities. Terminal 30, on SoDo's industrial waterfront, would be converted from current use as a cruise ship terminal and leased to SSA, formerly known as Stevedoring Services of America, the biggest privately owned marine-freight handler in the world. Interbay's Pier 91, where fishing trawlers dock in the winter, would be renovated to become a new cruise terminal for the spring and summer months. According to Fisken, the main beneficiary of Pier 91's changes are Cruise Terminals of America, a private firm that is owned by SSA, Columbia Hospitality, and General Steamship Agencies. "It kills me that we voted $120 million for these projects. It seems like a huge scandal on the face of it." SSA, the cruise lines, and their executives gave Wallace's PAC, Davis, and Creighton $65,000 during the 2005 election cycle.

Davis dismisses the notion that her political allies are getting special treatment. "This has nothing to do with the campaign," she says of the commission's decision making. She claims that, in fact, the cruise industry is unhappy about the move to Interbay.

Dinsmore feels this is just one more example of Fisken's destructive tendencies. "Alec continues to make comments that are unsubstantiated, but they are lightning rods."


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