Thursday, August 30, 2012

Newspaper, heal thyself

What is the Seattle Times thinking, as they concoct a phony 'conflict of interest' story around Port of Seattle CEO Tay Yoshitani?  The gentleman also has been named to the board of Expeditors Int'l, an international freight forwarder and logistics firm headquartered in Seattle.

Mr. Yoshitani's contract with the Port specifically allows him to sit on corporate boards, and there is surely no legal prohibition on it.  There has been no specified conflict disclosed by the Times, and they've certainly had the opportunity to ask for one, but did not;

[Port] Commissioner Rob Holland said he had a meeting Tuesday with Yoshitani and told him he'd have to choose.
"I'll tell you what I told him: He needs to make a choice between either-or," Holland said. "There's a perception problem with the public."
Tarleton and Holland's statements put them at odds with Commissioner Tom Albro, who in a letter to a group of legislators this week said that Yoshitani's dual role had been vetted by the Port's top lawyer, who did not find any impermissible conflict of interest.
But, that perception has in fact been entirely the creation of the Seattle Times and certain Democrat state legislators (who've also been unable to specify the problem  with Mr. Yoshitani's dual role).  It's the old story of the boy who murdered both his parents and then plead for mercy on the grounds he was an orphan.

It is much easier to concoct a plausible complementarity of interest theory given the known facts (the 4 Ws as they used to be known in J-schools).  The Port of Seattle owns piers and an airport (SeaTac International) needed by companies that own ships and airplanes that need facilities from which to move freight in and out.  

The Port competes with other such facilities--chiefly the Port of Tacoma, a few miles away and also on Puget Sound.  Clearly it is in the best interests of the Port of Seattle to be informed of any problems shippers might have with such facilities.  Inefficiencies that might make one's port less desirable to use.  Even to know of advantages their competitors might enjoy.

Expeditors, while not a shipping company--they don't own ships and airplanes, they merely rent space on other's vessels for their own customers--surely would be aware, more than many, of such idiosyncrasies.  How an awareness of such would be to the detriment of the Port remains a mystery.

There has been absolutely no evidence provided to this point that Expeditors Int'l has any direct business negotiations with the Port of Seattle, nor any other port authority.  They'd almost surely be too small a portion of any Port's business to matter.

Speaking of a piquant irony, it turns out that at least one of the Seattle Times reporters (Jon Talton) happens to have a questionable second source of income himself.  He publishes mystery novels on the side, to a (no doubt) vast audience.  Which would seem to be an opportunity cost for Talton (time not being available to sharpen his knowledge of elementary business practices) that is largely borne by his employer, The Seattle Times.

[Note on rent-seeking by port authorities]  There is (as the informed reader will already know) a rich literature on the corrupting incentives of government sponsored (or, in the case of port authorities, owned) enterprises.  None of the above criticism of the Seattle Times excludes the validity of that (Public Choice) literature,  as it simply has been ignored by the Times' reporters.  So, for present purposes, we do too.

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