At the direction of the Port of Coos Bay management and commission, the taxpayer is right now paying to repair the Coos Bay Rail Link that will allow Roseburg Forest Products to ship raw logs as “pseudo-processed products”, chips and pulp from its North Spit facility out of the country, possibly to Asia. As Bill Barton points out in his excellent essay, “These products could be processed here in our state, employing thousands of Oregonians in living wage jobs”.

Instead, RFP which recently laid off more than two hundred people, is using taxpayer dollars to create jobs overseas. Ironically, the Port, with the assistance of the local paper, has sold the non-competitive bidding process employed under a declared state of emergency to make the repairs as a quick way to create thousands of jobs. In a form of economic blackmail, a job hungry public are held hostage to economic development schemes believing there is no alternative but to pay up.

The Port has been unwilling to provide any evidence that RFP has a qualified business opportunity that warrants declaring a state of emergency but several people have pointed out there may be a conflict of interest with this transaction. Kathy Wall, Marine Facilities Manager at the Port of Coos Bay is married to Mark Wall, Oregon Forestry Manager for Roseburg Forest Products and requests have been filed with the Oregon Government Ethics Commission to investigate whether this Port action violates Oregon statutes.

Oregon government ethics law prohibits all public officials from using or attempting to use their official position to obtain a financial gain or avoid a financial cost for themselves, a relative or member of their household, or business with which they or their relative or household member is associated, if that financial benefit is only available to them because of the official position they hold. [ORS 244.040(1)]

In addition, the conflict of interest provisions in ORS 244.120(2)(a) require that public notice be given before the public official on a commission participates in any action, decision, or recommendation which could result in a private economic benefit or detriment to the public official, one of their relatives or household members, or a business with which any of them are associated.

Whether Kathy Wall meets the definition of a “public official” is up to OGEC but the Port has been implicated in violations of Oregon’s conflict of interest rules in the past. During the legal battles revolving around the decision by Central Oregon Pacific Railroad (CORP) to embargo the line and the Port’s feeder line application with Surface Transportation Board lawyers for CORP filed a supplemental response on September 29, 2008 to an earlier reply from the Port. The reply takes issue with a bid submitted by West Coast Contractors at triple the cost of other bidders and accused the Port of 1) trying to drive down the value of the line and 2) not declaring that West Coast Contractors is owned by Port commission president, Dave Kronsteiner.

…the Board should reject the Port’s Reply claim that the NLV of the line should be reduced by approximately $6 million to account for the cost of removing the two bridges.
B. Mr. Kronsteiner’s “Bid” To Dismantle The Bridges.
CORP’s estimate of the potential cost of removing the Siuslaw and Umpqua River bridges is based upon actual bids to perform that work submitted by two disinterested third party companies, L.B. Foster, a national rail line salvage firm, and Staton Companies, a company with extensive experience in bridge demolition located in Eugene, OR. Foster’s purchase offer included a $2,000,000 net cost for removing the two bridges. Staton’s bid for removing the bridge spans over the waterways was $2,065,790.

…In a desperate attempt to rebut these three independent (but mutually reinforcing) estimates submitted by CORP (two of which are actual bids that provide prices for which experienced contractors stand ready to perform the bridge removal work), the Port’ s Reply offers a “bid” prepared by West Construction Contractors, Inc. (“WCC”) of Coos Bay, OR….

…First, the WCC estimate is not a bona fide “bid.” It consists of a memorandum addressed not to CORP (the owner of the bridges and the party that would be removing them), but to the
Port….

Second, even if the WCC estimate were somehow considered a “bid,” it must be disregarded because it embodies a blatant conflict of interest. According to witness Davis “the Port solicited and received a second, separate bridge removal bid from West Coast Contractors, based in Coos Bay, OR.” See Reply V.S. Davis at 13 (emphasis added). Witness Davis states that wce’s quoted price for removing both the Siuslaw and Umpqua River bridges was $8,119,980. ld. What he fails to disclose is that the WCC “bid” was submitted WCC’s President, David Kronsteiner, who also serves as President of the Port ‘s Board of Commissioners.

Now, of course, that the Port owns the line, we are assured the bridges need only minor repairs to support a Class I railroad.

Meanwhile, China, unlike Oregon, has put restrictions on raw exports and is being accused of breaking “global rules” and giving its manufacturers an unfair advantage upsetting WTO members including the US.

Chinese restrictions on exports of nine raw materials violate global rules and give the country’s manufacturers an unfair edge, a World Trade Organization panel said, backing a complaint by the U.S., the European Union and Mexico.

Read the entire article as there are some interesting issues surrounding rare earths, but illustrates the complexity of relying upon global supply and demand rather than focusing on existing local resources.