To the Editor:
A letter was sent to Port Commissioners on January 7, 2022 that calls for an investigation of the conflict of interest by recently-elected Port Commissioner Amy Evans. A thorough investigation is required by the Port Commission if not by the Prosecuting Attorney for Thurston County. I hope you might consider addressing this urgent issue in your publication.
Here is my letter:
Olympia Port Commissioners:
Amy Evans was elected to the Port Commission in November 2021. In advance of election, Evans acknowledged she has an actual or perceived conflict of interest with respect to a Port Commission lease with Panatonni (SSECC PDC, LLC, a Delaware limited liability company). Evans wrote to The Olympian newspaper (Att.1) and stated in a letter published on October 24, 2021, “I believed the perceived or actual conflict of interest was minimal[.]” Washington law does not permit self-identified “minimal” actual or perceived conflicts of interest; the existence of a conflict of interest is not judged by the size; and in this case there is evidence that Evans is due some or all of a real estate commission of approximately $1.57 million (Att. 2).
Evans’s acknowledged conflict of interest stems from her relationship to Kidder Mathews (a real estate broker that has represented Panatonni in lease negotiations with the Port of Olympia). As a real estate agent or broker (who is also an attorney with ethical obligations) in the employ of Kidder Mathews, and as a port commissioner, Evans is not permitted to “be beneficially interested, directly or indirectly, in any contract which may be made by, through or under the supervision of such officer, in whole or in part, or which may be made for the benefit of his or her office, or accept, directly or indirectly, any compensation, gratuity or reward in connection with such contract from any other person beneficially interested therein.” RCW 42.23.030. None of the exceptions in RCW 42.23.030 appear to apply to Evans’s conflict of interest as she herself has identified that conflict.
In some circumstances a port district may let a commissioner keep the office and act as a commissioner when there is only a “remote” interest in conflict with a commissioner’s duties. RCW 42.23.010; RCW 42.23.040. It is up to the sitting commissioners to make a determination whether Evans’s conflict of interest is remote because in RCW 42.23.010 the legislature stated that if a commissioner’s conflict of interest is one “wherein the private interest of the municipal officer is deemed to be only remote” the commissioner may serve and participate in district business related to the remote interest. (Italics added.) Deem is an active verb and so the only way Evan’s conflict of interest could be remote is if the sitting commissioners find that Evans’s conflict is remote consistent with statute. See RCW 42.23.040(1)-(4) including especially “None of the provisions of this section are applicable to any officer interested in a contract, even if the officer's interest is only remote, if the officer influences or attempts to influence any other officer of the municipality of which he or she is an officer to enter into the contract.”
The Port Commission has the responsibility to determine remoteness or the lack of remoteness, and thus also has the obligation to investigate and evaluate prior to reaching a conclusion on remoteness. See RCW 42.23.060 (“The provisions of this chapter shall be considered as minimum standards to be enforced by municipalities.”) A failure by the sitting commissioners to investigate and evaluate fully the circumstances pertaining to a conclusion on remoteness would be both malfeasance and nonfeasance.
One indication of remoteness is compensation by fixed wage or salary. RCW 42.23.040(2). Agents and brokers traditionally are compensated through commissions. In the event Kidder Mathews now or in the future should switch Evans’s compensation (from commission to fixed wage, salary, bonus, or other compensation) it would be reasonable to conclude that it is the duty of the Commission to determine if the switch is for the purpose of evasion of the conflict-of-interest prohibitions of law, and it would be reasonable to place the burden on Evans to demonstrate that such a switch was not done to evade applicable prohibitions.
RCW 42.23.060 (“The provisions of this chapter shall be considered as minimum standards to be enforced by municipalities”) supports the conclusion that such an examination behind mere surface appearances is the duty of the Commission; anything less than an examination would, again, be both malfeasance and nonfeasance.
RCW 42.23.070 lists prohibitions that apply to all port commissioners without regard to any actual or apparent conflict of interest. Prohibited acts include:
(1) No municipal officer may use his or her position to secure special privileges or exemptions for himself, herself, or others.
(2) No municipal officer may, directly or indirectly, give or receive or agree to receive any compensation, gift, reward, or gratuity from a source except the employing municipality, for a matter connected with or related to the officer's services as such an officer unless otherwise provided for by law.
(3) No municipal officer may accept employment or engage in business or professional activity that the officer might reasonably expect would require or induce him or her by reason of his or her official position to disclose confidential information acquired by reason of his or her official position.
(4) No municipal officer may disclose confidential information gained by reason of the officer's position, nor may the officer otherwise use such information for his or her personal gain or benefit.
If Kidder Mathews has an interest in present or future leases - including modifications or renegotiations during the 30-year length of the lease between the Port of Olympia and Panatonni - then Evans has an interest based on her relationship to Kidder Mathews.
It is up to the Port Commission under RCW 42.23.060 (“The provisions of this chapter shall be considered as minimum standards to be enforced by municipalities”) to make an investigation into and public findings that demonstrate Evans can fulfill the duties of commissioner without engaging in any of the four prohibited behaviors set out by the legislature.
Violations of chapter 42.23 RCW can have substantial consequences for the violator and for the Port:
Any contract made in violation of the provisions of this chapter is void and the performance thereof, in full or in part, by a contracting party shall not be the basis of any claim against the municipality. Any officer violating the provisions of this chapter is liable to the municipality of which he or she is an officer for a penalty in the amount of five hundred dollars, in addition to such other civil or criminal liability or penalty as may otherwise be imposed upon the officer by law.
In addition to all other penalties, civil or criminal, the violation by any officer of the provisions of this chapter may be grounds for forfeiture of his or her office.
While forfeiture of her office might be a blow to Evans, there is a real risk that the Port (and therefore Thurston County residents), might suffer financially in the event that her participation in any contract - not just a lease in which Kidder Matthews has an interest - is determined to be void under RCW 42.23.050 because she is in violation of any part of chapter 42.23 RCW.
In effect, the examination by the Port Commission of the conflict of interest to which Evans has admitted is also a test for the two sitting commissioners. The sitting commissioners have a duty to conduct a public investigation of Evan’s self-admitted conflict of interest and test her conflict and the duties she will assume as commissioner against all the requirements and prohibitions of chapter 42.30 RCW. The first issue to be examined and decided by the sitting commissioners is whether Evans should be permitted to participate in any Port business while her self-admitted conflict of interest might have implications for her ability to serve, and while the validity of contracts made with her participation before the application of chapter 42.23 RCW is determined, especially the application of RCW 42.23.050.
Carla Wulfsberg, Tumwater
Attachments: Amy Evans’s letter to The Olympian, October 24, 2021 and Panatonni pro forma, data from Port of Olympia real estate staff, July 13, 2020
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