Internal Communications to Port Employees on CEO Board Appointment
Vickie Rawlins, Workplace Responsibility Officer, addressed concerns raised in Washington State
Legislators' letter. 
9/4/2012   Vickie    Legislative  I made a few clarifying revisions this morning to my previous posting. 
8:00 AM           Letter 
8/29/2012   Vickie   Legislative  On Friday, August 24th, the chair of the State House of Representatives government
10:00 AM    Rawlins   Letter     operations and oversight committee, sent a letter to the Port of Seattle, signed by several
other legislators, raising concerns about Tay's position on the board of Expeditors
International. The letter raised two concerns: 
(1) Ethics Concern: Tay's "dual employment" with Expeditors gives the appearance of a
conflict of interest. The letter notes that Expeditors directs shipments for some of its
customers through the Port, and asserts that Tay would be tempted and have the
authority to provide Expeditors' customers with a competitive advantage. The letter
concludes by asserting that Tay "has the power to prioritize his personal profit over the
public mission of the taxpayer-supported Port of Seattle." 
(2) Process Concern: The Commission did not publicly review or approve Tay's "outside
employment" with Expeditors, leaving the decision to approve Tay's board service to a
"subordinate" (i.e., the Port's General Counsel). 
My response to the first concern is this: First, a correction: Tay is not an Expeditors
employee. He is one of nine board members whose role is to represent shareholders'
interests and provide strategic guidance. He has no role in Expeditors' day-to-day
operations. 
Second, Tay's board role does give him a direct personal financial interest in Expeditors.
But this creates no improper financial conflict because Expeditors has no business
relationship with the Port. If Expeditors or the Port were to consider establishing a
business relationship, a conflict of interest would arise, and Tay would be required to
recuse himself from any involvement in that discussion or any future activities concerning
Expeditors.
Third, as an Expeditors' director, Tay is deemed also to have a financial interest in certain
Expeditors' customers (those in which Expeditors has a creditor, debtor or ownership
interest). This gives rise to a potential financial conflict, but does not pose an actual
conflict because Tay is not now or in the foreseeable future in a position as the Port's CEO
to provide Expeditors' customers with special privileges or a competitive advantage. This
is because, as determined by the Port's general counsel, the Port neither has a business
relationship with Expeditors' customers, nor the ability to influence whether or how Port-
based terminal operators or shipping lines conduct business with Expeditors' customers (or
with Expeditors itself). If Expeditors' customers and the Port were to consider establishing
a business relationship, a conflict of interest would arise, and Tay would be required to
recuse himself from any involvement in the situation. Tay would also be obligated to
recuse himself from any future situation in which the Port found itself in a position to
directly or indirectly influence whether or how Port-based terminal operators or shipping
lines conducted business with Expeditors' customers (or with Expeditors itself).
Fourth, an appearance of a conflict arises when someone with the relevant facts could
reasonably question another person's impartiality in an activity. The Port's general counsel
determined that the relevant facts do not indicate that Tay's actions and decisions as the
Port's CEO could be influenced by Expeditors' or his own financial interests. The legislators
signing the letter have raised questions about Tay's impartiality, based at least in part on
inaccurate facts (i.e., referring to Tay's board service as "dual employment"), so it is not
clear that their concerns were based on the facts in this situation. However, I do believe
the facts could have been communicated more effectively at the time Tay's appointment
was announced, thus potentially preventing current ethics concerns. It is understandable
that without knowing the all of the relevant facts in this situation, someone could
reasonably question whether Tay's appointment could create a conflict. For this reason,
and consistent with the Port's value of transparency, Tay should affirmatively offer to
provide a clear description of his role and authority as CEO over those Port tenants and

business partners who also conduct business with Expeditors.
Commissioner Albro responded to the letter's second concern in a reply letter. He noted
that Tay's employment contract was approved publicly by the commission on March 1,
2011 and posted on the port's website shortly thereafter. It provided that Tay could "on
his own time participate as a member of a Board of Directors for a private entity; provided,
that prior to accepting such appointment, the Port's General Counsel determined that
CEO's participation would not create or appear to create a conflict of interest, or be
contrary to any other provision of the Port's Code of Ethics for Employees." Albro said the
appointment was then reviewed by the port's general counsel. Albro further noted that
the commission president stated in public session on August 14, 2012 that Tay was in full
compliance with the terms of his employment contract. Albro concluded by saying that as
with any contract, Tay's continued compliance will be monitored through audits, including
by the commission audit committee.