Port hires law firms in criminal inquiry

The Port of Seattle has hired two Seattle law firms to represent its interests in the federal criminal investigation of its practices, but state Auditor Brian Sonntag -- whose damning report on the port's construction management practices spurred the inquiry -- is calling into question just whose interests the lawyers will be representing.

In an e-mail sent Friday to Port Chief Executive Tay Yoshitani, the port's general counsel, Craig Watson, wrote that "we have not hired an auditor to discredit the audit. We have hired attorneys to defend the port's interests in the (Justice Department) investigation."

Part of the defense the lawyers will provide is "looking at the contents of the audit to identify issues that may be of interest to the DOJ," Watson wrote. "At the same time, they will certainly be in a position to identify flaws in the audit," he continued. "Since the DOJ investigation appears to be flowing directly from the audit findings, it seems incumbent on us to understand how the findings were reached and alert the DOJ to any flaws in those findings."

The lawyers are Arthur Harrigan Jr. and Timothy Leyh of Danielson, Harrigan, Leyh & Tollefson for $526 and $400 per hour, respectively, and an as-yet unspecified lawyer from Yarmuth Wilsdon Calfo.

"Is this the best use of taxpayer dollars?" Sonntag asked, noting that the port staff has been picking apart the audit's findings since late summer.

"The Department of Justice is using the audit report merely as a launching point to delve deeper into certain types of activities," Sonntag said. "They are certainly not going to use the audit report to bring criminal charges -- they are going to go deeper -- so I don't know what the benefit would be, other than to obfuscate and defend."

Port Commissioner Gael Tarleton, a member of the panel's investigatory committee, said she didn't expect the Justice Department to focus on the audit's findings but also said she was not privy to what the port's hired counsel would review. She said the scope and nature of the port staff's internal investigation are protected by attorney-client privilege into which she would not seek to insert herself.

The port staff's review, the port commission's inquiry and the federal investigation are separate despite the overlap, Tarleton said.

The point "is that there is one unifying investigation, and that is the Justice Department's," to which the port staff and commission have both publicly offered cooperation, Tarleton said. She called the hiring of outside lawyers "a completely responsible decision" owing to the general counsel's lack of expertise in dealing with criminal investigations.

Watson declined to comment, referring questions to spokeswoman Charla Skaggs.

"It's a matter of course when told you are subject to a Department of Justice investigation to hire outside counsel to help you cooperate and respond to the investigation," Skaggs said. "We hired them to help us represent our interests ... serving as our advocate during that process, responding to requests by the Department of Justice, serving as a liaison between them and us and instructing us as to how to proceed."

The state Auditor's Office interpreted the e-mail differently, adding it to a list of port actions to rebut the actual findings of the audit while distracting the public from that dissimulation with earnest public vows to embrace the audit's recommendations.

"I don't think it is routine, especially when you look at that e-mail from Craig to Tay, explaining the purpose of the contract," said Linda Long, director of performance audits at the state Auditor's Office. "After all that has gone on, at what point will we begin to see some leadership, and is the legal counsel continuing to run the shop here?"

The port will hire another lawyer to represent port staff members interviewed during the criminal investigation if they request counsel.

Commission Vice President Lloyd Hara said port staff members deserve to know their legal rights, but the propriety of the port's defense of individuals implicated in the investigation is "caught between those who may have not been forthcoming and those that have been totally open."

There is no official commission policy on the matter, but Skaggs wrote that conversations so far indicate that "if a staff member was determined to be acting in bad faith or outside the scope of his or her employment, port-provided counsel will withdraw services."

Yoshitani has named Dakota Chamberlain, the manager of Seaport Project Management, to head the port's response to the audit, which can be found at portseattle.org/news/Accountability.shtml.

"Undoubtedly there will be skeptics, but I look forward to proving them wrong," Yoshitani said of his turnaround plan at Tuesday's Port Commission meeting.