Two Port of Seattle executives resign in fraud scandal


by By / KING 5 News

Posted on August 15, 2009 at 1:44 PM

Updated Friday, Sep 25 at 4:06 PM

Video: Judgment day for Port employees accused of fraud

SEATTLE - Two Port of Seattle executives have resigned in the wake of the Port fraud scandal, seven more have been punished and more investigations are coming.

"Both employees submitted their resignation after being confronted with this information and I have accepted their resignation," said Port CEO Tay Yoshitani Tuesday.

A disciplinary report was released Tuesday morning. Most of the fraud findings involve the third runway at Sea-Tac Airport and a cozy relationship between several Port executives and contractors which resulted in things like altered invoices and no competition in some of the bidding.

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Yoshitani identified the executives who resigned as Larry McFadden, General Manager of Port Construction Services and John Rothnie, Project Manager for the third runway.

"As I said a year ago, I have zero tolerance for fraud," said Yoshitani.

Rothnie was not available for comment. McFadden declined to comment outside of confirming his resignation.

There is more punishment down the line:

-- Port of Seattle Chief Engineer Ray Rawe received a three week suspension without pay.

-- Three other senior managers received a one week suspension.

-- Three other senior executives, including Airport Director Mark Reis, Deputy CEO Linda Strout and the Port's general counsel, received letters of reprimand for insufficient oversight.

While no evidence was found that any Port employees personally benefited, former U.S. Attorney Mike McKay report found a "get it done" culture leading to cases where the Port's elected commission was misled and kept in the dark and where some contractors received favorable treatment.

There are more investigations on the way.

"We defer to the Department of Justice and other authorities as to advise on what other actions might be necessary," said Port Commissioner Bill Bryant.

But what about the contractors who got those favorable deals?

"The great thing about contracts is that they are legal documents. It gives us a tremendous amount of power and authority to dig deep and make sure everything is compliant with those contracts, and we're going to do it," said Port Commissioner Gael Tarleton.

Yoshitani says a lot of people were obligated to blow the whistle on what was happening and didn't do so.