ILWU asks feds to investigate 2004 Seattle port warehouse sale
The West Coast dockers union is requesting the U.S. Attorney's Office specifically target a 2004 property sale by the Port of Seattle during an ongoing federal investigation into alleged contracting fraud by the port.
The International Longshore and Warehouse Union Local 9, which represents Seattle dockers, wants the port sale of two warehouses to Seattle-based produce supply firm Charlie’s Produce for $18.9 million included in the federal investigation following up on fraud allegations made in a state audit of past port contracting practices.
The 200-plus-page state audit, released in December, found more than 50 indications of fraud by port staff, including contracting irregularities that led to the squandering of nearly $100 million in taxpayer funds. Within days of the audit's release, the U.S. Justice Department announced it was launching its own investigation in the audit findings.
In a letter to the U.S. Attorney's Office, the ILWU charges that the port never performed 'due diligence' on the sale to determine the fair market value of the property.
“Prior to the sale, the port did not make these properties available on the open real estate market or market them for sale,” wrote Tony Hutter, ILWU Local 9 secretary-treasurer.
The sale for $18.9 million was approved by the port, according to the union, despite a pre-2004 appraisal of the 28-acre site of $23 million. The port defended the sale against critics at the time, saying the two buildings, vacant for two years following the departure of toymaker Hasbro, required extensive maintenance and environmental mitigation before the port could use the site.
The port also pointed to the fact that selling the property to Charlie's Produce would keep the produce firm, and the jobs and taxes it generated, in Seattle at a time they were considering leaving.
However, said the ILWU letter, the produce firm resold the property less than a year later for $28.5 million without making any improvements. Charlie's defended its sale at the time, and its 51 percent profit on the deal, saying the buildings required too much investment to make it meet their needs.
“That being said, had we kept it and the market turned around, would we have been better off to get the increased value? Of course,” then port Chief Executive Mic Dinsmore said at the time. “But that’s being a Monday morning quarterback. I think it’s easy for the critics to say what they’re saying.”
“The port’s conduct with regard to this transaction is so outrageous as to create the impression that there was criminal misfeasance on the part of the port agents and actors,” Hutter said in the union letter to the U.S. Attorney's Office.