Oakland Acts to Prevent Improper Spending

Oakland Acts to Prevent Improper Spending

The Port of Oakland on Monday implemented a plan to address lax oversight of business expenditures by port executives and guard against embarrassing, improper expenditures in the future.

Release of the action plan was accompanied by the announcement that James Kwon has agreed to retire as maritime director effective Dec. 28.

An audit this year revealed Kwon entertained clients at a strip club in Houston in 2008. The total bill for dinner and drinks was about $4,500. When the incident was revealed in an audit in October, Kwon was placed on administrative leave and Oakland Executive Port Director Omar Benjamin retired.

Oakland hired Arnold & Peter, an independent outside counsel, to investigate all business spending by port executives in recent years. The port has since received repayment for the alleged improper expenditure of public funds in two incidents.

The port on Monday released a “Matrix for Responsible Expense Practices” to govern future expenditures by executives. The matrix sets rules for spending on flights, hotels and meals that conform to industry best practices.

The number of employees holding port purchasing cards will be reduced, and the port will step up enforcement of policies, holding the cardholders and approving officials accountable.

“It’s a new day at the port, and we are pleased to be releasing comprehensive information on the problems we’ve faced and how we’re addressing them,” said Gilda Gonzales, president of the board of harbor commissioners.

The board on Monday released the investigative report by Arnold & Porter and the port purchasing card audit. Deborah Ale Flint, acting executive director, will lead a port administrative team that will oversee implementation of the new policy governing expenditures by port staff.

“I want to thank all of my fellow employees who, like me, greeted the revelations of Oct. 15 with a mixture of shock, embarrassment, anger and dismay,” Ale Flint said.

Contact Bill Mongelluzzo at bmongelluzzo@joc.com and follow him at twitter.com/billmongelluzzo.