Culture of secrecy shrouds Port of Vancouver

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.

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.

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.

“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.

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.

“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.”