Question of the Day: Do The Port Authority and the PD Still Have a Long Hard Fall From Grace Ahead, Together?

Submitted by Norm Roulet on Sun, 11/22/2009 - 11:15.

November 21, 2009, the Cleveland Plain Dealer published a get-out-of-jail-free editorial for seemingly life-term Cleveland Port Authority dictator John Carney, and his board of directors - "A Cleveland Port Authority board already wounded can't afford conflict-of-interest charges -- editorial" - that fully acknowledges "the port is so broke it may not be able to assure continued operations of the Cleveland harbor, much less pay to relocate and expand".

Yet, the PD editors do not call for changes to the current Port Board. Quite the opposite, the PD empowers them to move into the real estate development business... despite their bond rating having sunk near junk.

Part Cover-My-Ass journalism - part last-ditch Port propaganda - the PD "editors" are writing in DEFENSE mode, and set the desired "tone" of their message by obfuscating and trivializing the real issues of poor port leadership, reporting "it's best to take with a grain of salt the latest charges from Quay 55 developer Mark Coffin that a rival developer, John Carney, who sits on the Port Authority board, is the nefarious mastermind of a plot to move the port to East 55th Street and ruin the views enjoyed by the apartment dwellers of Coffin's Quay 55".

This "Quay 55" issue just came up last week and is a red herring - for over a decade, Carney has been using his position on the Board of the Port Authority to improve his personal real estate interests, which is why "the port is so broke it may not be able to assure continued operations of the Cleveland harbor".

The Coffin challenge of port corruption is just one of a long list of challenges of Port leadership, over many years, which necessitated the Hauser Amendment... and largely killed Ed Hauser.

The highly pro-Carney/Port Authority PD acknowledges: "there is a built-in conflict in allowing any individual whose business interests overlap with port projects -- whether in progress or contemplated -- to sit on the Port Authority board" and "Carney, despite his long civic engagement and service on the board, has real-estate interests nearby that could be in play in the various transformations, relocations, expansions or reconfigurations the port is contemplating".

But, rather than demanding that Carney and the other Board members resign - for failure to lead the Port well, and for obvious business conflicts of interest - the PD encourages the world to give Carney and the current board control of $100,000,000s more in public funds, to develop our "Lakefront".

The PD suggests we change the board in the future, concluding: "People whose business interests overlap with current or contemplated port projects should be made ineligible for future board positions."

"People whose business interests overlap with current or contemplated port projects should be made ineligible FOR FUTURE BOARD POSITIONS"!?!?!

What about for the current slate of Directors, who are the reason "the port is so broke it may not be able to assure continued operations of the Cleveland harbor".

It makes far more sense to completely reorganize the Port Board and authority now - replace the entire Board of Directors, before hiring any more staff, and before the current board may do more harm.

The current BOD of the Port is as follows (you conclude for yourself who is likely to have conflicts of interest):

Chairman Steven J. Williams
Occupation: Chairman and CEO of International Container Systems LLC and wholly owned subsidiary, Elsons International
Appointed by: Cleveland mayor
Term expires: Jan. 28, 2010

Vice Chairman Richard M. Knoth
Occupation: Lawyer specializing in commercial litigation, unfair business practices and intellectual property law
Appointed by: Cuyahoga County commissioners
Term expires: Jan. 28, 2012

Fiscal Officer Robert M. Peto
Occupation: CEO and executive secretary/treasurer of the Ohio and Vicinity Regional Council of Carpenters
Appointed by: Cuyahoga County commissioners
Term expires: Jan. 28, 2012

Rose Rodriguez-Bardwell
Occupation: Executive director of the Spanish American Committee
Appointed by: Cleveland mayor
Term expires: Jan. 28, 2010

Brian E. Hall
Occupation: Chairman, CEO and owner of IIS (Industrial Inventory Solutions) LLC
Appointed by: Cleveland mayor
Term expires: Jan. 28, 2013

Marc Krantz
Occupation: Managing partner of Kohrman Jackson & Krantz
Appointed by: Cleveland mayor
Term expires: Jan. 28, 2013

Robert C. Smith
Occupation: President and CEO of Spero-Smith Investment Advisers Inc.
Appointed by: Cleveland mayor
Term expires: Jan. 28, 2011

Anthony R. Moore
Occupation: Partner at Jones Day
Appointed by: Cleveland mayor
Term expires: Jan. 28, 2012

John J. Carney
Occupation: Lawyer, real estate owner and developer
Appointed by: Cuyahoga County commissioners
Term expires: Jan. 28, 2011

Further, in "SUNK: How the Port Authority wasted precious time and money on ill-conceived plans", Scene reports: "With the election of Mayor Frank Jackson in 2005, a series of events began that would ultimately leave the Port Authority in turmoil", raising questions about the oversight of the Port Authority by Cleveland City Hall, raising further concerns about how Port Board members should be selected in the future:

In June 2006, developer John Carney and his partner, Bob Stark, met with Jackson to discuss their interest in developing the lakefront. (The mayor appoints six of the nine Port Authority board members; the county commissioners appoint the other three.) The next month the Sun newspapers ran a story mentioning the role that Stark wanted to play in the lakefront development. There was no mention that Carney's role in any lakefront development would be restricted by his service as a Port Authority board member since 1998. In fact, he was in glaring conflict with such a venture.

Two weeks later, the Port Authority passed a resolution to hire URS, an engineering firm, for $900,000 to create a plan to relocate the port. This was essentially a unilateral scrapping of the hailed 2004 lakefront plan, which had called for the port to be moved to an island created by dredge-fill just north of its present site.

It was into this chamber of hubris and duplicity that Adam Wasserman was wooed by Carney and then-port board chairman Michael Wager, a lawyer from Squire Sanders and Dempsey. An American working in England, at the time, directing a redevelopment project, Wasserman was offered a deal that surpassed that of all but handful of his counterparts in the U.S. — a five-year contract paying $273,000 annually plus $50,000 in expenses. This made him the highest-paid public official in the region, heading a port that was barely making money.

Carney and Wager preached Wasserman's brilliance, his vision and the difference he could make in resurrecting the region. Mayor Jackson was laudatory in his endorsement of Wasserman. Commissioner Jimmy Dimora said he better do something for that much dough.


Add to this pathetic story highlights from prior PD reporting on the drowning of the Port Authority in red ink:

The Cleveland-Cuyahoga County Port Authority might shelve $500 million plans to move from downtown to East 55th Street and to attract international container ships, board members announced Friday.

At an afternoon news conference, board Chairman Steven Williams said the possible about-face reflects doubts about projects spearheaded by Chief Executive Adam Wasserman before his abrupt resignation two weeks ago.

"There were things we accepted, his vision on things, that didn't materialize," Williams said. "We relied too much on the CEO to implement our vision, and didn't do enough to question the process. After two years, we didn't see the progress."

The announcement comes after weeks of upheaval at the taxpayer-financed authority, including the resignation of two other top managers and the disclosure of money problems that could result in the closing of Cleveland's commercial port.

Williams and two other board members, Robert Smith and Anthony Moore, also disclosed Friday that the authority faces a budget shortfall of $458,000 this year that could result in layoffs next year.

Williams said Friday that the board's primary concern now will be to raise $158 million to help the U.S. Army Corps of Engineers construct a facility off East 55th Street for storing polluted silt dredged from the harbor and the Cuyahoga River.

Other issues to be addressed by the full board include:


  • The feasibility of a $10.3 million plan to build a warehouse and fill in a cargo slip at the port's downtown location.


  • The accuracy of shipping projections that were used by Wasserman to justify enlarging port operations to include container ships.


  • The troubled relationship between the authority and environmental groups, especially those seeking access to the Dike 14 Nature Preserve.

Still, the PD encourages us to keep the Port Board intact. Why?

Because the board members are "made" big-shots in the community.

And, because many other "made" big shots have made business investments based on Port Dictator Carney's plans, and they want to profit on these business and real estate interests.

In other words, the PD proposes we keep in place the currently conflicted and incompetent board members, who made the port "so broke it may not be able to assure continued operations of the Cleveland harbor", and we let them plan and manage $100,000,000s more in developments here, to benefit just a few of themselves and their friends.

The Port Authority and the PD still clearly have long hard falls from grace ahead.

We are all witnesses.

What will be really interesting is to see the PD publish their usual "hindsight is 20/20" articles about this unfortunate community's failure to demand accountability and elect good leadership... when the Army Corps feds need to bail the Port out (literally), and FBI feds get around to investigating how the Cleveland Port became such a burden to the nation.

Like, in hindsight, the PD concludes the people in this community should have prevented the rapes and mass-murders at the Sowell house, in Cleveland, which occurred over the same time frame the Port Authority has been raping the entire community.

In it's own defense, the PD already points to one "red flag" it buried in an old editorial, forgiving past conflicts of interest by Carney at the Port Authority, as proof of balanced journalism... in their many years of blindly supporting Carney and the Port board's ever-changing and foolish plans... from destroying Whiskey Island, to bulldozing the Flats, to accessorizing the Lakefront, to blighting Hough.

We at REALNEO have seen John Carney and his board for who they are - we saw how they treated Ed Hauser - and we expect justice.

Besides all the stated and to-be-realized financial costs of the Port Board's foolishness, unreported Port Board conflicts and incompetency wasted many years of Ed Hauser's life, and countless hours of citizens' time.

The PD will say, it is, of course, Clevelanders' fault for getting raped.

In fact, the Port mess is the fault of Cleveland voters who, in 2005, elected Frank Jackson mayor of Cleveland, allowing him to appointed six of the nine Port Board members who have failed the community. Several weeks ago, 77% of Clevelanders reelected Frank Jackson as Mayor for four more years, meaning the Port is his responsibility for four more years.

Ed Hauser always said "The Process is Broken", and was right

We in the REALNEO community have long been fully aware of the disgraceful performance of the Port Authority and their board - and the pathetic foolishness of their plans - and have reported on that extensively here... and the PD has always covered that up.

With REALNEO, we have fixed the broken process in this community - stopped the brainwashing by the mainstream media here - and it is now clear it is the PD and Port Boards that are broken.

The biggest raping of Clevelanders has certainly not been at the Sowell house. It has occurred in Cleveland-area Board Rooms.

The only hope for all the unreal NEO rapists to get away with their crimes, after many more years of destruction of our community, will be to divert $ billions more in Federal stimulus money to their same wrong business interests, for their usual wrong purposes.

The people of Real NEO must continue to warn Obama and the rest of the world to stop throwing good money after bad, here.

The Port needs $100,000,000s just to survive, now.

Flats "developer" Wolstein's DDR just got a $400,000,000 Federal "Stimulus" package, yet will still need $100,000,000s to build something where they bulldozed our heritage Flats district.

All the powers that be here will soon NEED Ohio VOTERS to give them $ billions more taxdollars for a Fourth Frontier, as they suck our Third Frontier dry (anyone in real NEO benefit from that?).

The Fund For Our Economic Future is a bust, and will not have ongoing foundation support at past levels, so must shift its burdens to taxpayers - e.g. OneCommunity is seeking over $150 million from Obama, for MORE "broadband" here... er, somewhere... wherever "OneCommunity" may be???

Anyone here, besides Case stakeholders, really benefit much from the last 8 years and $10s millions of OneCommunity, in this community?

Oh yeah, they now offer free wifi at the Airport.

At least real NEOans may get on line at the airport for free to read REALNEO as they wait for their flights to get the hell out of unreal NEO.

If Obama does not give our region as much of the $ billions in further federal stimulus that our powers that be are counting on, the "economic development" house of cards of Northeast Ohio will all swoosh to the ground, leaving behind little to show for a decade of effort and $1,000,000,000s in real public spending.

I'm certainly expecting exactly that, here, and see the disintegration of the Port Authority at the leading edge of this collapse.

Fortunately, nobody in REALNEO believes in the Power That Be's house of cards, so we really are just glad to see evil people fall and get out of the way of citizens, so good people may start moving the community forward... none of us were counting on that 50,000 job Port relocation con-job the Powers That Be have been smoke-and-mirroring us with all these years... we are smarter than that.

Besides replacing the entire Plain Dealer editorial board, the best way to begin fixing the regional economy is to remove the entire Board of Directors of the Port Authority, and all staff, and change the process for appointing new board members so the Mayor of Cleveland and the Cuyahoga County Commissioners (RIP) are not involved, and ELECT a new board that hires a new director and staff that will be accountable to the citizens, and succeed in making the Port of Cleveland an asset of the community again.

In the mean time, the Port should operate at the lowest possible activity levels, and certainly not undertake any significant new initiatives, other than complying with Federal laws, requirements and mandates to keep the shipping operations running at maximum efficiency.

As another option, local Port development, management and shipping operations could be contracted out to a third party, or other Port Authority, like from Toldeo.

By no means should the current Port Board, planning and operations model be followed by this community any longer.

Plain Dealer--here's your Port story on a platter

  Read above and see also Jeff Buster's previous post--(avoiding the obvious...know jack??)

And Mr. Carney knows that by using our money, the taxpayers’ money, he can pay off each departing employee, claim no open meeting law requirements apply because the discussion is about hiring or firing, and buy and maintain silence.  
 With our money. 
Is this absurd?
Independence Excavating has sued the Port (and others) for about $34,000,000, (case 1:2009cv02114 Northern District of Ohio) with one of the claims being that the Port reneged on bonding the dump-poisoned City View Mall.
Wonder if that has anything to do with Mr. Wasserman’s departure?
But researching this takes time. Arranging interviews with those involved takes time.

Scene magazine--ditto

(not totally urelated--Henry S. and Jerleen...I love you both, but you are being played...let's just continue to watch the story unfold)

The spiritual may see this as divine intervention

I believe at death our spirits live on, and I have certainly felt Ed Hauser's presence since his death.

Do you think John Carney feels Ed Hauser's presence now?

I expect he does, 24/7.

Disrupt IT

Connection of Cleveland Foundation and Port Boards

As I have been reading about the implosion of the Port of Cleveland, and the poor performance of the Board and related leadership, in the back of my mind I have been trying to sort out how The Cleveland Foundation is involved - they have their hands in everything imploding in Cleveland, so they must be behind the Port disaster as well... but how...

Then I re-read Roldo's excellent posting on Port dictator John Carney - JOHN CARNEY SHOULD RESIGN FROM PORT BOARD - and remembered he provided the link there - you must re-read Roldo, as well... related excerpt:

One aspect of the board has remained rather fixed over the years – the name Carney.

The political head of this powerful family, the late James M. Carney, twice unsuccessful candidate for mayor (once dropped out, once defeated), was chairman during the Port’s early years.

Presently, his nephew John Carney, son of the late judge John Carney, has been on the board for some years. He was chairman. To avoid the limelight or the spotlight, Carney resigned as board chairman. However, it seems he’s still in control. He is civically connected. Many boards. His wife, Tana, is a Cleveland Foundation board member. She was a judicial appointee, meaning political connections and power.

The Wasserman episode suggests that the Port Authority’s bosses don’t know where they are going. Unfortunately, Carney wants to open up land on Lake Erie for development. At great public cost. Development is his private business. He heads Landmark Management.

Perhaps REALNEO readers are beginning to understand why REALNEO writers have been so focused on the interconnections of our leaders.

As one fails, all are dragged down together... sort of like a run on banks, during a depression.

The Chairman of the Board of the Cleveland Foundation is David Goldberg. He is also Chairman of the Board of AmTrust Bank.

Goldberg is chairman of the board of Cleveland-based AmTrust Bank. He also chairs the board of trustees for Neighborhood Progress Inc., and is immediate past chair of the Downtown Cleveland Alliance. He is a member of the boards of the Greater Cleveland Partnership, United Way of Greater Cleveland, University Hospitals, the Mount Sinai Health Care Foundation, and the Fund for Our Economic Future. He has been a member of the Cleveland Foundation board since 2001.

The Cleveland Plain Dealer recently reported "AmTrust Bank finances getting worse, report from Office of Thrift Supervision says", which indicates Goldberg has his hands full directing just AmTrust.

Regulators pay attention to banks' capital ratios, which measure available capital compared with outstanding loans. The riskier a bank's loans, the more capital it must have in case of losses. Capital levels are important for all banks. They were a key part of the Federal Reserve's much-hyped stress tests for the nation's 19 largest banks.

In a November order, the OTS said AmTrust was operating with "unsafe and unsound banking practices" and had given AmTrust a Dec. 31 deadline to shore itself up or face further regulatory action. AmTrust apparently has been given an extension.

For the mother of all conflicts of interest, also on the Cleveland Foundation BOD is Sandra Pianalto, of the Federal Reserve Bank, who should be spending her time stress testing AmTrust...

Sandra Pianalto

Appointed 2004 by the board of directors

Sandra Pianalto has been president and chief executive officer of the Federal Reserve Bank of Cleveland since 2002. She joined the bank in 1983 as a research economist. She is a member of the board of the Greater Cleveland Partnership, University Hospitals Health System, United Way of Greater Cleveland, Rock and Roll Hall of Fame and Museum, Northeast Ohio Council on Higher Education, and the Catholic Diocese of Cleveland Foundation. She holds a bachelor's degree in economics from the University of Akron and a master's degree in economics from George Washington University.

The Cleveland Foundation promises to help people do something memorable.

The devastation of Cleveland is certainly memorable!

This is no way to fund our economic future.

Disrupt IT

No Bust at the Fund

I'm not sure how the Fund ended up getting referenced in your interesting post on the Port Authority, but let me assure you that the Fund is not a bust. It is true that we don't anticipate raising as much money ($30 million) in our next three year phase, as we did in the one that ends next February. But philanthropy in Northeast Ohio is committed to collaborating to support regional economic competitiveness initiatives. At least three of our Funders have actually increased their commitment to the Fund for the next phase, including the George Gund Foundation. Also, OneCommunity is not a grantee of the Fund and never has been. So I'm not sure why you cited that example.

As to your question about the Third Frontier and whether anyone in NEO has benefited. The answer is heck yes. Whether one is talking about the workers at GrafTech -- developing fuel cell components -- or the workers at Stark State -- learning how to manufacture fuel cells there are thousands of people in NEO who have benefited from Third Frontier. The LCD companies near Kent State have gotten a big boost. As have the researchers at the Clinic, Case and many other institutions. The Third Frontier supports the region's innovators and it is innovation that will drive NEO's growth. 

Best wishes,
Chris Thompson
Fund for Our Economic Future

Thanks for Joining REALNEO and the Port/FFOEF discussion

Hi Chris,

What is a bust? To me, if the public is offered high expectations, like with Voices and Choices, and they are not met, that is a bust.

Like, the Browns are a bust. Good people... talented football players... and a bust, sometimes by only a point.

What are the interconnections and networks that are The Browns?

What are the interconnections and networks that are The Port Authority?

What are the interconnections and networks that are FFOEF?

What are the interconnections and networks that are GCP?

What are the interconnections and networks that are Cleveland Foundation?

Map them together and it is one interconnected network... one Holiday Party at The Stadium Club... one chain of command in The Board Rooms.

I'm sorry to lump OneCommunity and FFOEF together, if they are actually not in any way associated. As you and I have communicated, when RealLinks (my original company associated with REALNEO) was developing the portal for Voices and Choices (which I'm quite certain was a FFOEF initiative, that many considered a "bust"), it was with OneCommunity.

When I was working with the City of Cleveland on the OneCommunity/Intel organized initiative to bring wifi community-wide, in NEO (that was a bust), Nortech was leading the discussions, with OneCommunity.

If you are suggesting these are all very independent initiatives with unique boards, leaders, funding sources and sponsors, I must suggest we dig deeper into the BODs, trustees, funders and such, as it all seems commingled to me, from the Bridge Builders at the bottom to the Cleveland Foundation Trustees at the top.

We as a community have made some efforts to "Map this Mess" and find it is one big spiders' web.

The mapping must continue.

As an economist, I am very interested in the job creation output of FFOEF-associated initiaves and the Third Frontier, and very uncomfortable with the number of FTEs created that I've seen quoted... I believe 40,000 for Third Frontier.

You can give us the latest numbers for FFOEF efforts.

Don't keep the analyses and data simple - don't forget to factor in opportunity costs.

I am sure we will all analyze that carefully as the time approaches to vote on Fourth Frontier funding...

We don't have the opportunity to provide input on FFOEF fundings, do we?

Are Third Frontier and FFOEF good investment and "economic development" models - should they be so dominant in the region - are they delivering what they promise?

I'll be glad to dig deeper to really find out, and work with you to analyze the results. For $ billions more investment by taxpayers, I think we need to look very closely at what we have gotten for our money in the past.

With the Port Authority, we are getting the answers regarding what we have gotten from that Board of Directors, which is highly connected to other "economic development" initiatives in town, and is a real crises in Cuyahoga County.

Disrupt IT