• releasing the Port Purchasing Card Audit dated July 2012 as originally presented to the Board;
• releasing the investigative report conducted by independent outside counsel, Arnold & Porter, which looked at specific improper expenditures and the Port’s overall expense policies;
• revising policy on redacting expenses, and will now respond to all requests for records with fully unredacted expenses unless there is a specific and compelling legal reason to redact information (i.e., social security numbers, personnel/human resources issues, sensitive competitive information, etc.); and
• moving forward on a comprehensive plan to prevent improper expenditures going forward, and strengthen the Port’s culture of compliance.
In addition, the Port announced that James Kwon has agreed to retire as Maritime Director, effective December 28, 2012. The Port has also received repayment of the public funds spent on the two identified improper expenditures.
“It’s a new day at the Port, and we are pleased to be releasing comprehensive information on the problems we’ve faced and how we’re addressing them,” acknowledged Board President Gilda Gonzales. “While the vast majority of what was uncovered was an organization of people doing their jobs ethically and responsibly, we also found out-dated policies, a few irresponsible actions, and a few isolated cases of improper expenditures.”
“I am very pleased that the Board has helped us turn a page toward transparency and accountability, which were goals when I was appointed Acting Executive Director,” said Deborah Ale Flint, Acting Executive Director of the Port. “The plan we are releasing today will continue moving us forward."
The Port has developed the attached plan, or “Matrix for Responsible Expense Practices,” to address the findings of the reports, including:
• Guidelines for spending on flights, hotels and meals have also been insufficient. Therefore, rules will now specify permissible levels of air travel depending on the length of the flight. New rules will also establish permissible spending levels for hotels and meals that conform with best industry practices.
• The number of persons holding Port P-Cards will be reduced. In addition, the Port will step up enforcement of the existing P-Card Policy, holding both card holders AND approving officials fully accountable.
Any and all revised policies will come back to the Board for public discussion and eventual adoption by the Board. Also, any engagement of outside support for compliance and oversight will be conducted through a public competitive selection process. Acting Executive Director Ale Flint will lead an internal team compromised of the Port Attorney, Port Chief Audit Officer Arnel Atienza, CFO Sara Lee, Deputy Executive Director (and Acting Maritime Director) Jean Banker, and Director of Corporate Administrative Services Denyce Holsey, which will be responsible for overseeing the implementation of the new program and the effectiveness of all expenditures going forward.
Acting Executive Director Ale Flint also noted: “I want to thank all of my fellow employees who, like me, greeted the revelations of October 15 with a mixture of shock, embarrassment, anger, and dismay. Throughout the last month and a half, we have been moving as quickly as possible to support the investigation, and identify immediate and long-term solutions, while continuing the Port's important business, thus keeping our 24/7 operations going to serve both customers and community. While we have more work to do as an organization - internally to heal and strengthen, and externally to regain public trust, I know we will get there together.”
