Smoking Gun: Fraud and Deception

Submitted by Doug Karlberg.

Abraham Lincoln said, “Public sentiment is everything. With public sentiment, nothing can fail. Without it, nothing can succeed.”

The Port of Bellingham has lost the public’s sentiment, and it must be regained. The dysfunction at our port has festered far too long. The public owns the port, but for decades only two commissioners and a loyal staff have controlled it.  The public needs to retake control of the port.

The port’s narrow and self-centered outlook endangers the future of our waterfront and desperately needed jobs that it can support.  The port, with the city’s help, wants to sell real estate instead of promote jobs and is now poised to wreck our capacity to support good paying jobs for the foreseeable future.

We can fix this, but first a stroll down memory lane to understand how we got here.

Our port tends to have commissioners for life. This wasn’t always true, but since the mid 1950s, commissioners have tended to remain in office for long, long times, decades in many cases. It may just be human nature, but when people remain in public office too long there can be negative effects.

The Port of Bellingham was for years the Port of Zuanich (44 years) and Asmundson (35 years).  Then it became the Port of Walker (21 years) and Smith (16 years). With a three person commission, any two commissioners can effectively control our port.

Port meetings are held during weekday work hours so the public hardly ever attends.  A chronic lack of public perspective feeds a creeping imperialistic control of this public founded and funded organization. Under the three-commissioner system, two port commissioners can do whatever they want.  Theoretically, they constitute a quorum and should not meet to discuss port business without public notice. In practice, the efficiency and lack of debate attendant to the execution of the port’s business belies their attention to these details. Staff comes and goes, but all know who has the power at the port, and who not to cross.

Secure in their incumbency, the port commissioners decided in 2004 to condemn and seize Georgia-Pacific’s (G-P) treatment lagoon (the ASB) for the “public purpose” of a marina for large yachts. This seizure fractured the community.  G-P was long a mainstay of the local economy and a major employer.  Even though they were obviously winding down the operation, many felt that such heavy-handed treatment was unwarranted and unwise. The ongoing tissue operation and the co-generation plant were still using the ASB.  What were these facilities expected to do?

Equally important, for nearly ten years G-P along with 14 agency stakeholders had been negotiating a robust clean up of the waterfront. G-P’s scientists, the Department of Ecology (DOE), the Environmental Protection Agency (EPA), Wildlife, Fisheries, environmental groups and others had worked cooperatively to come up with a plan that all agreed on, one which would have cleaned up the waterway completely.

G-P was anxious to start the clean up, get it done, and sell the land.

It was a serious clean up plan supported by all who had studied and worked for years to develop and compare nine remedial alternatives (archived page with some bad links). The DOE and EPA were willing to sign off. This was not the design of a bunch of Southside carpetbagger greenies, as Port Commissioner Smith enjoyed characterizing them.

In just one month, the port flushed ten years of hard work down the toilet and adopted a plan that accomplished the least possible clean up. The most affordable way to clean up the contaminated sediments next to G-P was to store the dredge spoils in the ASB. Any large clean up requires a disposal site, but the port seized G-P’s intended disposal site for a marina. The years-long good faith effort, ready for signatures, was junked because the port wanted a yacht basin to complement the upscale condos they envisioned for the waterfront.

The shipping channel would no longer be cleaned up.  Under the port’s plan the channel would be abandoned and ‘capped’, reducing its depth. This channel extended from the full depth of Bellingham Bay, past the port’s International Shipping Terminal, along much of G-P’s length, to the shoreline at the Waterfront Tavern and the Granary Building, where Citizens Dock once stood. This channel has been used for commerce extensively since Bellingham was founded. After capping, the channel will be limited to small craft and kayaks.

How polluted is the Whatcom Waterway? It is bad. Everything from the pulp mill site drained into the shipping channel for decades. The fishing fleet used to moor boats in the channel for a couple of days before hauling out for bottom work.  The toxins would kill everything growing on the hull, making cleaning easy. I wouldn’t eat any of the fish out of the shipping channel, even after it is capped. This channel will probably need permanent signs warning against fishing, crabbing and clamming.

Throwing monkey wrenches into the public’s clean-up plan made marshaling public support for the ASB marina critical for the port. They hired a consulting firm to study five potential sites for a future marina, including the ASB. This report was delivered to the port and released to the public in advance of the final G-P purchase decision.

However, the report was altered to mislead the public. The report rates the ASB as the most economical site.  This finding was needed to support the ASB marina plan.  It was crucial to justifying both the G-P site purchase and the condemnation of the ASB. This document is now evidence.

For a time, this file was publicly available as a Word document online.  It included embedded Excel object information.  The document’s description of each site includes an embedded Excel spreadsheet table.  If you have MS Office, you can double click on any table in the Word document and a spreadsheet will open in Excel.  The Excel file includes tabs for all five sites.  In four of these tables, the ASB tabs are identical and show costs of $50,731,417. However, the Word document table for the ASB lagoon shows costs of only $33,939,485. It is clear that the Word document description of the ASB site was altered after the authors embedded the Excel information.  The Excel object information shows the ASB site having the highest costs. The document is a proverbial “smoking gun.”

The $21,612,932 discrepancy in favor of the ASB site, in favor of this whole unsavory waterfront boondoggle, is at least misleading and probably fraudulent. I contacted port staff for an explanation and they refused to respond.  However, the online edition of the Word document immediately disappeared from their website.   But not before I saved a copy!

(Note: Changing tabs with the table open in Excel can alter your copy of the document if you save the changes. To preserve the document, simply don't save changes.)

Today, searching portofbellingham.com for “marina site survey” returns a single, unsearchable PDF:  The minutes of the May 19, 2009 port commission meeting in which a Mr. Stahl reports that “the Makers 2004 Bellingham Bay Marina Site Survey identified the ASB as the preferred location for a marina within Bellingham Bay.”  That is not true.

These behaviors evidence a pattern of deception underlying the very essence of the waterfront plan we just adopted. This is categorically unacceptable for a public agency.  It is illegal behavior that should be punished. It is cause to reconsider the entire waterfront plan before plunging the public into incomprehensibly expensive commitments.

The report includes another doozy.  The consultant states that North Puget Sound will urgently need 3,100 new marina berths by 2010. Nearly four years after this dire prediction we know the prediction was bunk. Demand for yacht moorage dried up when the economy tanked.  Building the marina will obligate Whatcom County taxpayers to repay nearly half a billion dollars.  Would you bet a half billion that four hundred 60-100 foot yachts will want to come to Bellingham?

The marina study ignored other obvious factors. The Lummi Nation is planning a marina. Their location is closer to the northern San Juans and especially better for many fishers, most of whom are already weary of the port.

Mucking out the ASB is estimated to cost $43 million. The port is desperate to justify this expense to build a breakwater worth maybe $6 million.  Alternatively, we could fill the ASB and sell the land for $10 million. We could actually clean up rather than cap the waterway and retain options for both commerce and safe fishing on the new waterfront.  It would save millions in disposal costs and millions more not constructing an unneeded marina.   But the port and city have worked together to hide the true costs from the public by concealing the marina in the No-Action alternative and by evidently falsifying crucial data.  Even the DOE (document linked below) originally commented that the port’s strategy, “deprives the public and other interested parties of the opportunity to have meaningful input to the complete planning and development process.”  That has proven true.  It has allowed the port to bamboozle its citizens and the city while crafting their vision out of whole cloth.

Meanwhile, Greenberry last year leased 10+ acres from the port and spent $200 million locally. Even the port’s phony inflated numbers would require 20 years for the ASB marina to generate that much economic impact, using four times the area (37 acres) – if there were enough mega-yachts to fill the slips. 

We seriously need to pull the plug on the port’s corrupt waterfront plan and make immediate changes to bring the public back into this process. Port meetings need to start happening in the evening when people can attend, like city and county council meetings.  The commission must be expanded by two at-large positions to increase candidate access and reduce entrenched incumbencies.  When agencies lie to their constituents, it is time for radical action.  Investigating this fraud is the place to start.  Who falsified these records?  Who helped?  On whose orders? It's deposition time!

The evolution of the waterfront plan has increasingly ignored public sentiment.  This has become a common refrain from all who have tried.  We need to back up, adopt an honest and open framework that can produce a plan consistent with public sentiment.

Without that, we cannot succeed.  On the waterfront, we cannot afford to fail.