Copyright © 2004 by Seattle Weekly
When Sen. Patty Murray invited Sen. Hillary Clinton for a fund-raiser and briefing on homeland security in June, they held their press conference at Terminal 18 on Harbor Island, the massive container operation run by SSA Terminals, a division of SSA Marine. Despite its low local profile, Seattle-based SSA, formerly known as Stevedoring Services of America, is the biggest privately held container-terminal operator and cargo handling company in the world, with 10,000 employees, 150 locations, and $1 billion in annual revenue. Four days into the war in Iraq, SSA was awarded a controversial no-bid contract by the Bush administration to oversee the flow of humanitarian aid and war supplies into the war-damaged deep-water port of Umm Qsar. More recently, SSA was involved in another no-bid Iraq deal that has, reportedly, prompted an FBI investigation of a Defense Department official’s relationship with an SSA lobbyist.
Since 1992, Murray has received $4,000 in campaign contributions from SSA President and Chief Executive Jon F. Hemingway, and she got another $1,000 a month ago from SSA’s political action committee. Meanwhile, Murray procured taxpayer dollars for port security last year, $1.7 million of which went to SSA. Not an unusual give and take involving a member of Congress, certainly, and the senator, through her spokesperson, says she never lobbied on SSA’s behalf directly. But Murray’s connection to SSA is longstanding and deep. Her husband, Rob Murray, works for SSA, and Murray cites his SSA retirement investment fund, valued at up to $500,000, as her major personal financial asset in federal disclosure documents. This connection is not widely known, though it’s no secret.
Known or not, the 53-year-old senator’s stake in the private company appears to pose a possible conflict of interest under Senate Rule 37, which addresses “the possibility or the appearance that members or staff are ‘cashing in’ on their official positions (i.e., using their positions for personal gain) or that they have personal financial stakes in the outcome of their official duties.” Murray is a respected Senate leader. But it appears that any political or legislative work she does to the benefit of SSA could also, albeit indirectly, benefit Murray’s personal finances. Private contributions from SSA and its lobbyists flow to an employee’s wife, who, on Capitol Hill, does her best to direct public money to the corporation in which she has a vested interest.
Murray sees nothing improper about her SSA coziness. “Not at all,” says press secretary Mike Spahn. Her Senate port-security leadership role, he says, naturally brings her into contact with marine giant SSA. “She is working hard to ensure that the citizens of Seattle and the Puget Sound region … the entire country, are safe. She has been fighting tooth and nail for several years to make sure we have that security and funding.” Spahn says Murray never directly sought funding for SSA, or any Washington state business or agency, for that matter—that the amount and recipients were the choosing of the Transportation Security Administration. (Murray issued a press release at the time, however, outlining the funding for SSA and other Washington businesses and ports, saying, “I helped secure these critical dollars …”) Because Murray didn’t directly secure funding for SSA, Spahn says, Rule 37 doesn’t apply. “You’re creating some kind of malfeasance here that isn’t the case,” Spahn says.
SSA agrees. “We do not see any conflict in supporting Sen. Murray,” says company spokesperson Bob Watters. “In representing our state, Sen. Murray has taken a strong interest and leadership position on Port security and in supporting the men and women of the Coast Guard, as this is important to our state and the nation. We have supported congressman [Norm] Dicks for similar reasons.” SSA has never been “singled out” for appropriations by Murray, Watters argues. It merely shares in federal funding. SSA says its relationship with Murray pre-dates her becoming a U.S. senator in 1992. “Jon supported Patty in her school board activities and in state government,” says Watters. “The basis for Jon’s personal support of Patty is his relationship with the Murray family, through Rob’s longtime service—now 25-plus years—at SSA Marine and Jon’s firsthand knowledge of Patty’s character, intelligence, and integrity.”
Although Rob Murray’s job at SSA, as a computer specialist, is listed on the senator’s annual financial disclosure report, it’s a connection rarely mentioned in the media. Press secretary Spahn says the marital connection “never came up before.”
But circumstances have changed in recent years. Husband Rob worked for SSA prior to his wife’s Senate election, then quit in 1993 and moved to D.C. with their two then-teenage children. Homesick, Rob and the kids moved back to Seattle two years later, and he rejoined SSA. His wife has since risen to power in the Senate. The onetime “mom in tennis shoes,” as she humbly billed herself in the early days of her political career, is now a leading Democratic Party force and fund-raiser who was easily re-elected in 1998. Washington state’s first female senator, Murray is the highest-ranking Democrat on the Senate Transportation Committee and a trailblazer on issues of post–9/11 port security.
In her latest financial disclosure report, released in June, Murray was not required to list her husband’s salary or her $154,700 Senate salary, but she declares assets of up to $795,000—up from $660,000 the previous year. Disclosure rules allow senators to ballpark their finances between low and high ranges. The SSA Strategy Fund retirement account, for example, is listed as being worth somewhere between $250,001 and $500,000, and Murray’s total assets fall between $358,000 to $795,000.
Like Murray, SSA’s value and standing has grown. Until recent years, SSA, formed in 1949, was regarded as a successful, mostly West Coast port manager and supplier of longshoremen. Today it is one of the top global marine and cargo operations, headquartered in an easily overlooked two-story building beneath the West Seattle Bridge. The company appeared mostly disinterested in politics in the early 1990s and gave only sparingly to campaigns. Even last year, as controversy brewed over SSA’s $4.8 million Umm Qsar contract (the cost of which ultimately climbed to $14.3 million), CEO Hemingway told a University of Washington Alumni Association crowd that billion-dollar SSA didn’t barter for influence. “All those rumors are absolutely false,” he was quoted as saying in the Seattle Post-Intelligencer. “It’s just not our style.”
Today, however, SSA, under new parent company Carrix, which it formed last year to oversee its diverse operations, is politically aggressive. It is said to control 45 percent of Mexico’s cargo shipping and is embroiled in port development disputes from Texas to Bangladesh. (SSA spent more than $123 million last year to take complete control of four of Mexico’s largest ports, its largest corporate investment in five years, but SSA’s efforts to develop a megaport project in Bangladesh were ruled illegal by a court there. SSA is now threatening to sue the country for up to a billion dollars.) The Center for Public Integrity, a D.C. watchdog, says in a report, “the company is known for its hard line toward labor unions and for favoring the use of more technology in the ports to reduce its labor costs. It has been called the ‘most anti-union maritime operation on the West Coast’ by union leaders.” Hemingway, a member of the company’s founding family, has said the company was a “convenient target” during a contentious 2002 lockout of West Coast ports because SSA was the largest member of the Pacific Maritime Association, the port-management group.
In addition to Hemingway’s growing personal political contributions to an assortment of candidates—$18,000 in the past four years—SSA also suddenly has its own political action committee (PAC), formed in March, and its own company lobbyist in D.C. It has employed at least two lobbying firms in D.C. in the past year that have gone after additional port-security and Iraq-reconstruction work. SSA hires others to lobby for the company around the world and elsewhere in the U.S., and some wield a big stick. SSA’s lobbyist in Texas, Reggie Bashur of Austin, for example, was an aide to former Gov. George W. Bush.
The newborn PAC is funded by employee payroll deductions that are directed as political contributions to federal candidates. The SSA Good Government Fund, registered with the Federal Elections Commission (FEC), so far has a modest $15,000, of which $5,000 was contributed by chief financial officer Charlie Sadoski. (Rob Murray is not listed as a contributor.) The fund so far has given $1,000 each to Patty Murray; House Majority Leader Tom Delay, R-Texas; Rep. Nick Lampson, D-Texas; Rep. Joe Wilson, R-S.C.; Sen. Gordon Smith, R-Ore.; and Rep. Norm Dicks, D-Bremerton, who has gone to bat for SSA on Iraq-reconstruction contracting. Most of SSA’s D.C. lobbying has been handled by Denny Miller Associates, which earned $100,000 in 2002–2003 from SSA and has given Murray $19,000 so far toward her re-election. She is being challenged by U.S. Rep. George Nethercutt, R-Spokane.
Last year, Miller Associates, which lobbies for a number of Northwest firms and government agencies, including Alaska Airlines, Boeing, and King County, earned $40,000 from SSA for “activities related to Iraq reconstruction.” SSA garnered the Umm Qsar job even though the firm lacked a required security clearance. The U.S. Agency for International Development has admitted it deleted the requirement, in violation of federal rules, insisting SSA was the only qualified company.
Democrats critical of that and other no-bid reconstruction contracts approved by the White House claim Bush was favoring Republican business allies in a war-profiteering scheme. According to the Center for Responsive Politics, SSA and Hemingway had given 80 percent of their campaign donations to the GOP over the four previous years, though contributions totaled just $24,000—not exactly fat-cat caliber.
However, it’s still early in the 2004 giving season, and SSA, through its new PAC, is poised to give more this year than ever. In terms of overall donations and lobbying, SSA has spent more than $170,000 in recent years. Federal reports show SSA laid out $140,000 on lobbying in 2002–2003, and Miller Associates and new full-time lobbyist Mark Johnson, SSA’s vice president of government relations, report they are working on port and Iraq funding for SSA in 2004.
SSA completed its port-administration work in Iraq on June 30, according to the company, having been the first U.S. war contractor to work in Iraq. It says it collected $17 million in port revenue for the Iraqi Port Authority, which is now in charge. Some Persian Gulf shippers accused SSA of “gross profiteering” on shipping rates, and Newsweek reported that cargo unloading cost $3 a ton in Dubai and Kuwait but $12 a ton in Iraq. (SSA says it made no profit on those comparatively high tariffs.) It also completed a second, lesser-known dredging job in Iraq that has become part of an FBI investigation, according to the Los Angeles Times. A renegade Pentagon official, John A. “Jack” Shaw, allegedly pushed for a lucrative no-bid contract on behalf of a friend, Richard E. Powers, who is also an SSA lobbyist. Shaw, who didn’t have clearance to conduct Pentagon reviews in Iraq, gained port access in Iraq by disguising himself as an employee of Halliburton, the Los Angeles Times says.
Apparently, Shaw’s mission was a success. NANA Pacific, an Alaska native corporation also represented by lobbyist Powers, won a contract worth up to $70 million, which included communications work, and subcontracted $3.5 million in dredging work to SSA, the newspaper said, citing federal sources and documents. (Companies owned by Alaskan Native Americans can forego typical bid procedures and be awarded unlimited no-bid government contracts.) FEC reports last week showed that SSA and NANA Pacific each paid Powers $40,000 for his lobbying.
SSA apparently got an exceptional return for the work it did for NANA. The company says it provided only one employee to assist NANA for one month. “We agreed to help NANA to ensure that both the dredging and port operations were able to work at maximum efficiency during the dredging process,” says spokesperson Watters. He notes that SSA has wrapped up all its Iraq work to date and “our volunteers who served in Iraq have returned safely home to their families.” SSA has received about $100 million in government jobs and funding since 1990. That includes the $1.69 million given for port-security upgrades last year at its operations in Seattle and Los Angeles/Long Beach, announced by Murray and part of $58 million in port-security funding she had sought. Hundreds of other businesses and lobbyists are fighting for pieces of the homeland security action. So far this year, of her nearly $10 million in campaign donations—about twice Nethercutt’s total—Murray has received almost $500,000 from lobbyists and transportation interests. “This isn’t a question of getting funding for one company or one entity,” says Murray spokesperson Spahn. “It’s a question of security for the region and country.”