When we saw news reports in October that revealed two of the highest-ranking Port of Oakland officials scandalously misused port-issued credit cards, we suspected there was a need for a shake-up.
After reading the investigative audit about the scandal, we are convinced that a shake-up is not nearly enough. There must be a dramatic change in the operational culture at the port.
The audit confirmed the worst of our fears that the outrageous conduct that has already forced Port Director Omar Benjamin and Maritime Director James Kwon to retire was just the tip of the iceberg.
On at least two occasions, Benjamin and Kwon had used the purchasing cards -- known as P-cards -- to run up exorbitant bills at strip clubs in two different cities. Those charges were listed as client entertainment expenses, complete with names of those entertained. But those listed as clients insist that they were never there.
One can only imagine how two guys and some imaginary friends could run up a $4,500 bill at a strip club.
The revelation was terribly embarrassing to the port, but the problem is that those two fraudulent events occurred several years before the port had established policies about proper use of P-cards. So, technically, it was impossible to violate a policy that did not exist. Common sense, decency and honesty notwithstanding.
The investigative audit that was just released, therefore, zeroed in on 2011, a year after a policy had been established. Oh, yes, and after each person holding a P-card received specific instruction as to its legitimate use.
So, things should be better, right? No so much.
The audit found plenty of appalling misuses of the cards and even several cases where the misuse appears to violate state and federal law.
For example, it found that in at least 16 instances, certain cardholders circumvented the single transaction spending limits by splitting purchases of goods and services totaling $89,319.
And another $67,404 was spent on expensive gifts and giveaways such as Tiffany key rings, expensive wine and pro sports tickets, which, in our opinion, is a clear violation of the state Constitution's ban on gifts of public funds.
Of the approximate $50,000 worth of randomly selected meals and entertainment expenses, exactly zero fully met the substantiation requirements established by both the port and the IRS. That's right, zero. So much for awareness training.
These are but a few of the egregious examples of the port's loose culture about expenses. Acting Port Director Deborah Ale Flint is giving all of the right crisis-management answers to the audit, even if some of them sound like Management 101. For instance, the port has instituted a policy in which the approving managers will be held accountable for employee expenses that they approve. Well, duh. Isn't that the purpose of managerial review? That this basic principle even needs stating is testament to an organization run amok.
For the port to regain our respect, it will need to do a lot more than draw up plans. It must change the culture by implementing them. Soon.