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Culture of secrecy shrouds Port of Vancouver

Documents and analysis show port has kept public in the dark about oil terminal and other issues

By Aaron Corvin, Columbian Port & Economy Reporter
Published: May 16, 2015, 5:00pm
5 Photos
Portraits of port commissioners Nancy Baker, clockwise from lower left, Jerry Oliver and Brian Wolfe and the port's CEO, Todd Coleman decorate the lobby at the Port of Vancouver. The commissioners and Coleman have come under public criticism for advancing a lease for what would be the nation's largest rail-to-marine oil transfer terminal.
Portraits of port commissioners Nancy Baker, clockwise from lower left, Jerry Oliver and Brian Wolfe and the port's CEO, Todd Coleman decorate the lobby at the Port of Vancouver. The commissioners and Coleman have come under public criticism for advancing a lease for what would be the nation's largest rail-to-marine oil transfer terminal. The port leaders also face legal and political challenges for their insular handling of the oil terminal decision. Photo Gallery

The Port of Vancouver is a government body that’s beholden to its voters and taxpayers.

Yet its elected officials embrace a culture of secrecy, meeting behind closed doors “about 95 percent of the time,” as one commissioner put it in a court deposition, and making decisions inside a bubble of deference to the port administration and the private industries it courts. As a result, the powerful port often sidesteps full public accountability, which is one reason why it faces impassioned political and legal challenges to its decision to approve what would be the nation’s largest rail-to-marine oil transfer terminal.

That’s the picture that emerges from an investigation by The Columbian based on an examination of port practices, a review of documents obtained through public records requests, and interviews with open-government advocates and experts in Washington’s sunshine laws. The analysis points to a pattern by CEO Todd Coleman and elected commissioners Nancy Baker, Brian Wolfe and Jerry Oliver of keeping the community in the dark about crucial financial, and policy issues before making decisions and of improper use of closed-door executive sessions to hash out safety, environmental and financial issues, among others, meant to be aired in public.

The port’s pattern of secrecy isn’t new. But its pursuit of the oil transfer terminal has ramped up the stakes immeasurably. It faces legal challenges to both its unanimous oil terminal decision and its decision-making practices. Its relationships with political leaders concerned about or openly opposed to the oil-handling facility are now strained. And the battle over oil has morphed into a rare political challenge: a reform-minded citizen group is calling for transparency and for new elected port leaders.

Here's a look at the state's Open Public Meetings Act

Washington's Open Public Meetings Act is intended to ensure that the deliberations and actions of public bodies are conducted openly.

"The people of this state do not yield their sovereignty to the agencies which serve them," the law declares. "The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created."

The law defines "action" as the transaction of the business of a public body, including: receipt of public testimony, deliberations, discussions, considerations, reviews, evaluations and final actions. "Final action," under the law, means a collective positive or negative decision, or an actual vote by a majority of the members of a governing body, on a motion, proposal, resolution, order or ordinance. No law, resolution or directive may be approved in a meeting closed to the public, according to the law.

The law permits public bodies to convene executive sessions, in which the public is excluded, for specific and narrow purposes. Such purposes include discussions of a minimum price at which real estate will be offered for sale or lease; discussions of litigation or potential litigation (the definition of "potential litigation" includes litigation that has been specifically threatened or litigation the agency reasonably believes may be launched by or against the agency); and discussions to evaluate the qualifications of an applicant for public employment or to review the performance of a public employee.

The Columbian's three-day series isn't the first time the newspaper has challenged the Port of Vancouver's practices under the open public meetings law.

In previous reports, open-government advocates, experts in the law and representatives of the state Attorney General's Office have raised concerns about the newspaper's findings. In April 2011, for example, the newspaper, after obtaining public documents, revealed port officials had apparently violated the law by discussing in private the process by which they would select a new executive director. A process matter like that, said Tim Ford, then the open government ombudsman for the state Attorney General's Office, "should have been discussed in public."

Ford said a state Supreme Court decision, Miller v. Tacoma, emphasized that only action explicitly spelled out by an exemption to the open meetings law may occur in a meeting closed to the public.

In a November 2014 story, The Columbian challenged the port on its use of an executive session on April 9, 2013. The stated purpose of that closed meeting was to discuss a minimum price for land the port would lease or sell for the oil terminal. However, documents obtained by the newspaper showed commissioners received a pitch from company executives, covering a wide range of topics that filled a 51-page slide presentation.

At the newspaper's request, Michele Earl-Hubbard, a widely recognized expert in Washington's sunshine laws, reviewed the slide presentation and other documents. She said it doesn't matter that commissioners, after meeting behind closed doors on April 9, later received public testimony and took a final vote on the oil terminal lease in public. The public has the right to see how a governing body's vote was influenced, Earl-Hubbard said, including "all of the people who talked to you leading up to that vote."

-- Aaron Corvin

With more than 2,000 acres of property, the Port of Vancouver wields power as a landlord, developer and link to overseas and domestic markets. Its decisions affect not only the region’s economy but also its image, its safety from industrial hazards and its environmental ethic.

And the port’s tightly controlled decision-making process means that voters aren’t really in charge, according to Toby Nixon, president of the Washington Coalition for Open Government, who reviewed the port’s practices at the request of The Columbian. Nixon is a former state lawmaker and current member of the Kirkland City Council.

“Whoever has the most information is the one who’s really in charge,” he said. “If government has secret knowledge that they don’t share with the people, then the people aren’t the sovereigns anymore. The people aren’t the ones in charge of the government.”

Until recently, few people paid attention to the activities of the port, even though it’s an important player in the region’s economy. Yet the port’s approval in 2013 of the oil transfer terminal, planned to receive an average of 360,000 barrels of crude per day, thrust it into a national spotlight. It gave boosters of domestic energy production hope for a major link between supply and market for the fossil fuel, while handing advocates of renewable energy another arena in which to wage a larger battle against global climate change.

Vancouver would be the hub of that new supply chain, with oil-handling facilities to be built not far from the city’s long-planned waterfront redevelopment site. Yet the port allowed little time for the public to discuss and to understand the project’s broad financial, safety and environmental issues before granting its stamp of approval.

The port had actively sought the oil terminal project and knew what it wanted long before ever opening a discussion with the community, public records reveal. Port CEO Coleman tested the political waters in one-on-one conversations with commissioners. Such discussions occurred before the full port commission held closed-door meetings, including one with the companies proposing the oil terminal, and before the companies publicly announced the project.

Such informal, one-on-one conversations are not uncommon in government. But open government watchdogs say they can also leave the public out of a critical part of the decision-making process.

Records show that Coleman met separately with each commissioner to discuss the oil-by-rail market and to test whether commissioners would say yes or no to pursuing a piece of it. Coleman and his staff arranged closed-door meetings with all three commissioners to discuss a lease with Tesoro Corp., a petroleum refiner, and Savage Companies, a transportation company. The closed-door meetings continued after the project went public.

After the port commission’s unanimous approval of the project, opponents initially sued the port in Clark County Superior Court over a single closed-door executive session. Based on new information as the lawsuit advanced, the groups asserted that the port excluded the public from at least nine meetings in 2013 before approving the oil terminal contract on July 23.

During some meetings, the plaintiffs argue, commissioners discussed matters that did not qualify under state law for closed-door sessions. The discussions “were not limited to the minimum price at which real estate will be offered for sale or lease, potential litigation or issues affecting national security,” according to the complaint. In one session, Tesoro and Savage executives pitched commissioners on their safety record, job impacts and other topics.

The port admits in legal filings it held closed-door executive sessions about the oil terminal lease on seven dates in 2013. However, it denies wrongdoing. The port also argues that it rendered the lawsuit moot by holding a new public meeting on Oct. 22, 2013, before revoting unanimously to approve the lease.

By then, opposition was mounting from environmentalists and the Vancouver waterfront project’s developer. Also, at least two more trains had derailed, including one carrying gas and crude oil that exploded west of Edmonton in Canada. Similar derailments in the U.S. would follow, as questions about the content of crude and the safety of rails intensified.

On Oct. 22, however, the port remained deeply invested in its pursuit of the oil terminal and the significant revenue that would come with it. Commissioners expressed confidence in the ability of BNSF Railway, in partnership with the port and others, to haul oil safely to the port.

They’d made it clear there was no turning back.

‘A lot of power’

It’s easy to find out when the Port of Vancouver commission meets, and what’s on its agendas, simply by clicking on the port’s website. But finding out just what will be discussed at those twice-monthly meetings is not so easy.

Sometimes the port’s administration issues two sets of agendas for the public meetings. Baker, Oliver and Wolfe get a packet that includes information helpful to understanding policy proposals. The public doesn’t.

One example: Last summer, commissioners received documents explaining a lease proposal to haul oil-drilling materials in rail cars to North Dakota and to return those cars to Vancouver loaded with Midwestern crops. The documents included two policy choices for commissioners to consider. The port withheld those records from the public.

John Karpinski, a Vancouver attorney and civic activist, attended the meeting where the proposed deal was discussed. How could people “meaningfully testify on something that we can’t see?” he asked.

“Actually, the resolution wouldn’t help you, John,” Commissioner Wolfe replied. “Sorry.”

During another recent public meeting, commissioners received a staff memo explaining why the Red Lion hotel chain had requested an extension of its low lease rate through 2015 for the Red Lion Hotel Vancouver at the Quay, located on port-owned property. Red Lion’s reasons included that its competitors were telling potential customers that it was closing its doors, according to the memo. The memo also noted that Red Lion backed up its claims with documents of declining receipts and projected losses in the first quarter of 2015.

The port commission approved the rent break. The public didn’t get the memo fully explaining the port’s rationale in advance.

n History: Voters establish the port district in 1912.

Top project: $275 million West Vancouver Freight Access rail project.

o Land: The port manages and develops roughly 2,100 acres for industrial and marine development.

o Economic impact: The port is home to more than 50 businesses employing about 2,300 people and generating an estimated $1.6 billion of economic impact annually.

o Cargoes handled include: wheat, Subaru vehicles, wind energy components, steel, scrap metal, corn, soybeans, diesel and jet fuel.

Source: Port of Vancouver

The commission’s actions are open to debate. But here’s the larger point: A voter-owned port that controls public land and that partially finances itself with nearly $10 million in annual property taxes should not withhold from citizens the information that their elected officials are using to make decisions, according to open-government experts.

Michele Earl-Hubbard, a widely recognized expert in Washington state’s sunshine laws and principal of Seattle-based Allied Law Group, said documents included in an elected body’s regular meeting packet “should not be kept secret.”

Oliver told The Columbian this month that he’s “inclined to agree” that documents that are proposed for action by the commission should go to the public, too. “If they are public documents to be proposed to be acted on in the commission meeting, then perhaps they should be available,” he said.

Yet, the commissioners rarely openly challenge the way the Coleman administration presents information to the public. What’s more, the commissioners largely defer to the administration’s view that the port can discuss a broad range of topics behind closed doors. And they say Coleman enjoys wide latitude to pursue ventures.

This month, Wolfe told The Columbian that deference to the port administration grows out of an organization overseen by part-time elected officials and run by full-time staffers.

In her deposition as part of the open public meetings lawsuit, Baker, first elected in 2003, put it this way: “Todd has a lot of power. A lot of authorization is designated to him.”

‘Testing the water’

Coleman and his staff use that power to cocoon potential projects early on, according to the commissioners’ depositions. Wolfe’s statements to Seattle attorney Elizabeth Zultoski, representing three environmental groups in the lawsuit, is a revealing example. Wolfe said commissioners had a “one-on-one conversation with Mr. Coleman” who was “testing the water, so to speak, to see if the commissioners would say no” to pursuing the oil-by-rail market. Such conversations with Coleman or his staff about potential lease options are common, Wolfe said.

But such meetings may violate the state’s open public meetings law, Earl-Hubbard said. If Coleman met with a quorum of commissioners for such conversations, the public would have to be notified in advance.

n The proposal: Tesoro Corp., a petroleum refiner, and Savage Cos., a transportation company, want to build a rail-to-marine oil transfer terminal receiving an average of 360,000 barrels of crude per day. Oil would be loaded onto ships bound primarily for West Coast refineries

o The lease: Unanimously approved in 2013 by the Port of Vancouver Board of Commissioners, the oil terminal contract is worth at least $45 million over an initial 10 years

o Decision makers: The Washington state Energy Facility Site Evaluation Council is conducting an environmental-impact analysis of the proposed oil terminal. The council will make a recommendation to Gov. Jay Inslee, who has the final say. The outcome may be appealed to the state Supreme Court.

o Pros: A study commissioned by Vancouver Energy, the name of the Tesoro-Savage partnership, says the oil terminal could generate, among other economic benefits, an estimated $2 billion in economic value to the region, and 176 permanent on-site jobs once the facility is fully operational. The companies also say the oil terminal will help increase the nation's energy independence. They also say their safety record at joint operations is strong. The joint venture's website: www.vancouverenergyusa.com

o Cons: Opponents raise many concerns, including the potential for oil spills, new sources of toxic air pollution, a series of fiery oil train derailments, potential detrimental impacts on a proposed $1.3 billion redevelopment of Vancouver's waterfront and the worsening of global climate change through continued support of fossil-fuel consumption. Taxpayers for a Responsible Public Port's website: www.responsibleport.com

-- Aaron Corvin

“Why not have a staff briefing in a public meeting?” Earl-Hubbard asked about the port’s one-on-one discussions. “The public is supposed to be on the same page as the elected (body).”

Meanwhile, in between the one-on-one conversations and full board meetings, the port frequently convenes closed-door executive sessions. For example, when it came to a lease with Tesoro and Savage, Baker told Zultoski that commissioners met in closed sessions to discuss “safety, the environment, issues such as money, financial.”

Oliver put it this way to the lawyer: “We seek to ascertain, in executive session, the operational characteristics of a prospective tenant and whether or not they have a good operating record both — on a variety of factors: Safety, environmental, fiscally, to name just a few.”

Experts say that none of those topics are allowed to be discussed in meetings closed to the public. In their depositions, commissioners said part of the reason they meet privately to discuss potential tenants is to prevent competing ports from taking away business.

Abbi Russell, a spokeswoman for the Port of Vancouver, issued the following statement by email in response to the newspaper's three-day series:

"As a public port and an organization that believes in transparency and accountability, we appreciate the public's interest in and attention to these matters. We're currently in litigation, so there's not a lot we can share. But we're confident that we're employing executive session in accordance with the Open Public Meetings Act, and that we're using it as it should be used: thoughtfully, carefully, and within the specific guidelines OPMA establishes. Our commissioners are dedicated to doing the right thing and following the law. Port staff shares that dedication, and we support the commissioners as they carry out the port's mission while remaining committed to our values of transparency and stewardship."

But Earl-Hubbard said that’s not a valid reason for private discussions under the public meetings law. If an elected body wants to “come up with the best return for us, and they think it’s too dangerous to let us know what they’re doing, then they’re in the wrong business,” Earl-Hubbard added.

But frequently shielding discussions and information from the public is part of what appears to be the port’s culture of secrecy. In his deposition, Wolfe, first elected in 2005, told Zultoski that commissioners meet in closed-door executive session “about 95 percent of the time.”

“About 95 percent of the time?” she asked.

“Uh-huh,” he responded.

When asked by The Columbian to explain these remarks to Zultoski, Wolfe said that “if you look at our (regular public meeting) agendas, you will see executive session on nearly all of them.”

Wolfe, an attorney who represents the city of Battle Ground, has previously told The Columbian that he relies on the port’s legal counsel — Lisa Lowe, of the law firm Schwabe, Williamson & Wyatt for guidance on open meetings law issues.

Lowe has not responded to numerous requests for comment on the port commission’s meeting policies and procedures.

In his deposition, Oliver, first elected in 2007, told Zultoski that he relies on Lowe, who sits to Coleman’s left at the boardroom dais.

Has Oliver ever had disagreements with the administration over the appropriateness of a closed-door meeting? “I can’t recall any,” Oliver told Zultoski.

‘Shockingly ridiculous’

If the Port of Vancouver learned anything from the fallout over its insular handling of the oil terminal decision, including the lawsuit and a public outcry that continues to this day, it didn’t show it in its approach to the North Dakota rail car leasing deal.

The proposal to move oil-drilling materials imported from China to the Midwest and to bring farm products back to Vancouver for eventual export came little more than a year after the port first approved the oil terminal contract.

It wasn’t a small deal.

The port anticipates operating revenue of about $57 million this year, up 54 percent from 2014. The lion’s share of that increase is anticipated to come from $18 million generated by the North Dakota rail services accord.

Before approving the ambitious deal that faced some internal resistance, the port, once again, left people in the dark. Commissioners Baker, Wolfe and Oliver received a staff report in advance of an Aug. 26, 2014, public meeting outlining how it would work and two draft alternative resolutions for closing the deal, among other documents. The public got none of those documents.

The Columbian learned of the two proposed alternative resolutions and asked for copies the day before the port commission’s public meeting. Abbi Russell, a spokeswoman for the port, refused. Her initial reason: the port didn’t want people who’d look at the documents “to jump to conclusions.” Under questioning, she said the state’s open records law allowed the port to withhold preliminary drafts and intra-agency memos. The next day, the port commission approved one of the resolutions.

“Shockingly ridiculous,” is how Nixon, the president of the Washington Coalition for Open Government, described the port’s refusal to make the documents available.

“What’s really happening,” he said, “is that the public is being deprived of the opportunity to see what alternatives are being considered and to contact their commissioners and give them input.”

Earl-Hubbard said some local governments frequently abuse the “preliminary drafts” exemption. It’s a temporary exemption intended to allow for subordinate-level brainstorming about policy ideas. It no longer applies when the documents go to elected officials and “are part of the regular public meeting,” she said. The public shouldn’t be left “sitting in the room guessing about what (the elected body) is doing.” But that’s what happened, both with the North Dakota rail car lease deal and the proposed oil terminal contract.

When Karpinski, the attorney and civic activist, showed up to testify on the two-way rail car lease proposal last summer, his frustration was palpable. Noting the paucity of information, he asked the port commission to postpone a vote on the matter.

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“If we all had the actual resolution in front of us, we would know what (the proposal) means,” Karpinski said.

Wolfe told Karpinski that the resolution wouldn’t help him.

“Well, then I think the problem is more yours than mine,” Karpinski said.

Karpinski needed “to stick around,” Wolfe said, “and listen to what the staff has to say.”

Columbian Port & Economy Reporter