January 23, 2017

Theodore J. Fick
Chief Executive Officer
Port of Seattle
P.O. Box 1209
Seattle, WA 98111-1209
Re: Addendum to Performance Review
Dear Ted:
As we have been engaged in your annual performance review, information about a
number of events has come to our attention.
1. You determined in December 2015, that you were eligible to receive the 7%
special one-time pay being provided to certain salaried Port employees. You
never disclosed the actual and/or apparent conflict of interest in your making a
decision to include yourself in the program, which provided you a $24,500
payment.

In November 2015, the Port announced that beginning January 1, 2016, the required
work week of non-represented employees would change from 37.5 hours to 40
hours. While non-exempt employees would receive additional hourly pay for the
increase, a concern arose about exempt staff and their compensation. In early
December 2015, Port staff and Commissioners began discussing the idea of a one-
time payment to exempt employees. Port staff explored legal, cost and
implementation issues concerning this special pay proposal as a tool to increase
employee morale and retention.

The proposal was scheduled for Commission consideration. On December 8, 2015,

the Commission adopted an amendment to Port of Seattle Resolution No. 3712
which authorized implementation of a one-time special pay of seven percent of the
employees annual compensation for all eligible salaried employees. The
amendment recited that the special pay was to enable the Port to attract and
retain the most-qualified high-performing employees [and was] in response to a
newly-adopted 40-hour work week for certain salaried non-represented
employees.
You and General Counsel Watson both spoke with the Commission in Executive
Session before consideration of the proposal. The Commission was assured that the
proposal had been evaluated by staff and that legal concerns had been addressed in
the December 8th Executive Session. Nothing was said in Executive Session about a
forthcoming decision that would need to be made by you about which exempt
employees were to be eligible for the special pay.

After the Dec. 8 action by the Commission to approve the special pay, Port staff
developed a detailed implementation proposal for you to consider. The specific
eligibility requirements for receiving the special pay were outlined. Various types of
exempt employees were listed who would not receive the special pay. According to
an email, Port staff raised a question about whether you were eligible for the one-
time special payment. They concluded that the Commissions passage of Resolution
No. 3712 suggested you were eligible for the special pay.

According to an email from Paula Edelstein concerning a meeting with you on

Monday, December 14, 2015, Port staff made a point of telling you that under the
staff proposal, you would receive a seven percent special payment because you
would be viewed as an eligible exempt employee.

Based on that email, it appears you decided to approve the staff eligibility
proposal that included a special payment of seven percent of your annual salary to
yourself. At no time, did you make a disclosure to the Office of Workplace
Responsibility or to the Commission that you were making a decision to award
yourself pay of $24,500.00.

On Tuesday, December 15, 2015, you sent an email to the Commission advising
them of your implementation decision. You wrote that certain exempt staff would
be considered eligible for the special pay bonus and listed various categories of
employees to be considered eligible. You also listed exempt employees who would
not be eligible. Even though you made a discretionary decision to include yourself
as a recipient of the special pay, you chose not to disclose your decision to the
Commission. You did not say in your email or otherwise advise the Commission that
under the details of this payment, you would receive a $24,500 one-time
payment.

On February 23, 2016, your 2015 job performance was discussed in Executive
Session with the Commissioners. At that time, in response to Commission
questions, you said that you had received the one-time seven percent payment.
This is a classic conflict of interest under the Ports Code of Ethics, which sets
standards for all Port employees. CC-01. In the opening section of the Code of
Ethics, it states:
A conflict of interest exists when an employees duty to give undivided
loyalty to the Port is influenced, or could be influenced, by personal interest.

2
CC-01 Section I (The Ports Interests Come First). Later, the Code states:
One particular type of conflict of interest arises when an employee is in a
position to exploit his or her role with the Port to advance his or her personal
interestEmployees must avoid circumstances in which it appears, or to a
reasonable person might appear, that the employee is requesting or
otherwise seeking special consideration, treatment or advantage because of
the employees position with the Port.
CC-01 III. (Use of Position for Personal Benefit).
The Code of Ethics imposes a duty of disclosure, stating that the fact of a conflict of
interest is not itself a violation of the policy. CC-01 Section I (The Ports Interests
Come First). Rather, conflicts and apparent conflicts should be reported. Port
employees must reportall potential situations that could present a real or
perceived conflict of interest. CC-01 IV (Duty to Report Conflicts of Interest). All
Port employees have a responsibility to report concerns and potential violations.
CC-01 V. (Reporting Concerns or Violations). Supervisors and managers will be held
to a higher level of responsibility with respect to reporting potential violations.

In this significant matter, you failed to disclose the conflict of interest posed by your
discretionary eligibility decision.

In your Dec. 2, 2016 statement to the Commission, you take the position that you
did not need to inform the Commission you were setting your own special pay
because you were just implementing an action taken by the Commission. Yet, we
have concluded that disclosure was required for a number of reasons.

First, the broad general terms you used in your December 15, 2015, email in defining
eligibility for certain exempt employees did little to alert the Commission that you
were receiving a significant one-time payment as a result of your own decision. The
premise of the one-time payment, evidenced by the discussion of Commissioners,
was to address the concern among rank-and-file employees about the change to a
40-hour work week.

Second, the terms of the CEO Employment Agreement describe a specific process for
the Commission to determine the CEOs compensation and award bonuses. It is
inconsistent with the thrust of that process that the CEO would also be able to
obtain significant additional compensation as a result of his own decision
interpreting a one-time special pay event. Indeed, at the time of the Commission
action, the Commissions annual performance review of the CEO was underway. It

3
was only during those subsequent evaluation discussions that the Commissioners
learned that you had received the one-time special payment.

Third, the issue of Port CEO (or Executive Director) compensation has a long history
of being a matter of controversy; it is of obvious significance to public, Port staff and
the Commission. That staff made a point of telling you that you would be eligible for
the bonus under their proposal, when you did not similarly call out the matter to the
Commission, suggests that staff may have been more sensitive to the potential
significance of the issue than you were. As a practical matter of governance, the
Commissioners must be able to rely upon you to explain the significant details of
proposals and actions in order for the Commissioners to meaningfully fulfill their
decision-making and oversight roles.

2. Your action to change the Ports gift policy and your subsequent receipt of
tickets for events and travel.

In spring 2015, you approached Senior Port Counsel Traci Goodwin with concerns
about what you believed was the restrictive nature of the Ports gift policy. The gift
policy prohibited gifts that were solicited or which could influence an employees
action, and any gifts with an aggregate value exceeding $50. CC-04 II. Specific
Guidelines Regarding Gifts. An exception existed for food and beverages consumed
at hosted receptions. You said that you were having to decline invitations to
sporting events, which you felt was awkward. You and Craig Watson also talked
about the Gift policy. You questioned the Gift policys restriction on your ability to
go to an event at the expense of prominent community leaders. Goodwin and
Watson discussed the matter and agreed to change the Ports Code of Conduct to
create a limited senior manager exception. Beginning in April 2015, Watson and
Goodwin viewed the Gift policy as containing this exception:
For senior managers only, Occasional Gifts may include the cost of
admission to a performance or event where attendance by the senior
manager is related to the performance of official duties.
The word occasional is interpreted to mean four to six times a year.
You subsequently submitted completed Gift Disclosure forms to Goodwin. In 2015,
according to your submitted Gift Disclosure forms:
-You and a Port manager employee each received two tickets (four total) to a
Sounders game on May 7, 2015, from Jim Dwyer, former Port CEO and President
of Delta Dental, the Ports provider of dental insurance. Each ticket was valued
at $44.00. The total value of the two tickets you received was $88.00.

4
 -You received two tickets to a Mariners game on July 6, 2015, from Peter von
Reichbauer, King County Council member. Each ticket was valued at $47.96. The
total value of the two tickets was $95.92.
-You received six tickets to Mariners games on July 12, 2015, from Howard
Lincoln, President CEO of the Mariners. Each ticket was valued at $47.96. The
total value of the six tickets was $287.76.
In 2016, according to your Gift Disclosure forms:
-You received two roundtrip tickets on July 26, 2016, for the Victoria Clipper
(Discounted POS Employee Rate Travel Gift) from Meredith Tall, President of
Clipper Navigation, a tenant of the Port. The total estimated value was
$234.00. The trip was described initially by your assistant as both business and
personal.
-You received four tickets to Mariners games on August 22, 2016, from Kevin
Mather, President of Mariners. Each ticket was valued at $47.96. The total
value of the four tickets was $191.84.
-You received two tickets to a UW football game on September 30, 2016, from
Joe Sprague, Senior Vice President of Alaska Air Group, which is the largest
airline operator of the Port. You and a Port manager used the tickets to AAGs
corporate suite. The total estimated value of the tickets was $200.00.
Following receipt of your 2016 Gift Disclosure forms a few months ago, questions were
asked by Goodman and Watson about the Victoria Clipper and Mariners gifts. After
getting information from you, the General Counsel concluded that there were issues of
compliance with the Code of Ethics, even considering the senior management
exception written in 2015 at your request. Incidentally, we note that the senior
manager exception cannot be found in the current Port of Seattle Code of Ethics &
Workplace Conduct document distributed to Port employees. (The document begins
with a message from you about the importance to Port employees of adhering to the
highest ethical standards.)
We generally concur with the General Counsels conclusions that the 2016 Victoria
Clipper and Mariners gifts situations violated the Code of Ethics. In addition, it does not
appear that your 2015 gifts were ever analyzed and considered. Your acceptance of the
six Mariners tickets on July 12, 2015, violated the Code of Conduct, even if the newly-
drafted senior manager exception is considered. Further, based on the information we
have, the May 2015 gift of Sounders tickets and the July 6, 2015 gift of Mariners tickets
appear to have violated the Code of Conduct. Those two gifts would have violated the
Code of Conduct as it was written when you were hired, and they appear to have
violated the Code of Conduct even if the senior manager exception is considered.

5
Notwithstanding this pattern of violations of the Code of Ethics, there have been no
consequences to you. This is unacceptable to the Commission.
The Commission is greatly concerned about your action creating the senior manager
exception to the Gift policy, which was not previously disclosed to the Commission. The
CEO Employment Agreement contains extensive provisions to ensure that nothing done
by you creates a conflict of interest or the appearance of a conflict of interest. See
Sections 2 and 4 of CEO Employment Agreement (CEOs Services and Conflicts of
Interest).) The senior manager exception, which appears to be mostly for your use, is
inconsistent with your obligation in the CEO Employment Agreement to comply with the
Ports Code of Conduct and its ethics policies. Section 4 (Conflicts of Interest).
3. Concern about your actions facilitating Port business transaction involving your
fathers business.

On June 27, 2016, Nora Huey, Chief Procurement Officer for the Port, sent an email to
Craig Watson and Traci Goodwin, reporting a Code of Ethics concern. The email was
prompted after procurement staff received a requisition to purchase an anti-seize
product designed to ease removal of bolts. Staff noticed that the contact for the
product was Ted Fick, Sr.
When asked about this, Port Marine Maintenance staff explained that you approached
one of them at a Port event. You said that you father represented a company selling an
anti-seize product and that your father wanted to meet with Port staff about the
product. According to Port staff, you said that you were not sure if it was ok.
Following this conversation, Marine Maintenance staff apparently communicated with
your father and arranged a product demonstration. Port staff made the decision to
purchase the product being sold by Ted Fick, Sr. A requisition was generated for a
$324.00 purchase.
After Port Procurement staff raised a concern, the General Counsel talked with you.
You said that your father, Ted Fick, Sr., represents a company that makes non-toxic
lubricant to unstick bolts that are rusted on. Your father told you that he was having a
hard time figuring out who to contact at the Port about the product. When you ran into
a Marine Maintenance manager at a Port event, you told the Port employee that your
father sells a non-toxic lubricant and was having difficulty figuring out who to talk with
about the product. You asked who your father should talk to.
Based on these facts, the General Counsel concluded that Marine Maintenance staff
may have interpreted your question as direction by the CEO to buy the product. That,
obviously, would have been very wrong. It appears that the General Counsel talked
with you about how your communication could easily be viewed by a Port employee as

6
a directive. You were told by the General Counsel that the communication was
inappropriate.
This situation implicated CC-1 II (A) (Conflicts from Business Relationships):
A conflict of interest may exist when an employee, an employees Relative, or
someone with whom an employee has a significant personal relationship,
directly or indirectly, has a Financial or Beneficial Interest in, or operates, an
organization thatis doing business with the Port, or plans to do business with
the Port.
Therefore, an employee must disclose to the Workforce Responsibility Office
the existence of any Financial or Beneficial Interest which, because of its existing
or potential relationship to the Port, could create a present or future conflict of
interest.
Further, the Code of Ethics provides:
An employee shall not participate in any decision-making, review, approval,
selection, authorization or supervisory activity concerning any contract or Port
transaction in which he/she or his/her Relative has a Financial or Beneficial
Interest.
CC-01 II (Real or Perceived Conflicts of Interest).
It may be that you do not have a financial or beneficial interest in your fathers business,
although this is not entirely clear from what we have learned. In any event, disclosure
of your fathers potential business relationship should have occurred to make sure that
you had no role in the transaction. We agree that the General Counsel correctly
determined that your communication was also cause for concern because of the
potential for it to be viewed as an improper directive. Of particular concern to the
Commission, again, is that there were no consequences for your breach of the Code of
Ethics.