The public has a right to know how its ports are run

Daily Press editorials 1.29.06

The curtain of secrecy that Virginia International Terminals has drawn over its operations, keeping from the public information about how it runs port operations, will be pulled aside if the General Assembly passes legislation put before it by a Hampton Roads delegate.

The legislation deserves to pass. Because the facilities VIT runs - including terminals in Newport News, Norfolk and Portsmouth - are owned by the public. They are operated for the benefit of the public. And the way they are run has financial implications for the public.

Take the matter that precipitated the introduction of legislation by Del. Johnny Joannou of Portsmouth. VIT refuses to make public the pay of its executives. The body that oversees VIT, the Virginia Port Authority, has long refused to let the public see this information - or even to keep an eye on this critical aspect of its operational arm, let alone constrain it.

This is no trivial matter. The money to pay executives comes out of fees VIT takes in from shipping firms that use the terminals it runs. If it pays out a reasonable sum, enough to attract and keep capable managers, everyone benefits. If it pays too little, everyone suffers. If it pays too much, the public suffers because excess executive compensation would cut into VIT's earnings, which make up much of the budget of the Virginia Port Authority. Overpaying VIT executives would literally take money away from an economic engine that is important not only to the region, but to the entire state. Which is not to say VIT executives are overpaid, or underpaid. Since their pay is secret, all the public can do is speculate and wonder.

Until Daily Press reporting brought the subject to light, speculate and wonder about VIT salaries was all that port authority board members did, too. The authority did not know the salaries of executives at its subsidiary, nor think it should know. But after months of considering what was really a straightforward matter, it decided, on Tuesday, to require VIT to give the port authority and the public information about the pay of VIT's top executives - but only three of them.

That's a step in the right direction, but hobbled by its arbitrariness. Why three? Why not five or seven, 11 or 23? The limitation calls into question the authority's enthusiasm for thorough oversight of VIT and for openness with the public to which it is accountable.

The standard that should apply is the one that applies to state entities, including VIT's parent, the port authority. State and local governmental bodies have to reveal the compensation of employees making more than $10,000. They're paid with public dollars, and that's public information, available to anyone who requests it.

It's the standard that would apply if Joannou's bill passes. As would other provisions of the Freedom of Information Act, for the bill would make corporations created by state agencies subject to the same standards for openness as other government entities.

That makes sense. For all the reasons outlined in the editorial below, VIT is a creature of the state, its nature essentially that of a public entity.

It should act like one, as the legislation would require. It would open VIT meetings up to the public, ending the board's practice of deciding when and if it will admit the public. Its records would be public (proprietary information about its contracts with shipping lines will need to be protected, of course). The public would be able to see how its ports are run and how money is spent in the process.

The first step for this bill is to pass the subcommittee on FOIA/Procurement of the House General Laws Committee. This area has two representatives on that panel, Dels. Melanie Rapp of York County and Chris Jones of Suffolk. They will serve Hampton Roads and Virginia well by moving it up to the full committee - with a vote in favor of open government and strong port operations.


Just as Del. Johnny Joannou is trying to pull aside the curtain of secrecy shielding Virginia International Terminals, the Virginia Port Authority board is tugging at it, trying to keep it closed.

At the same meeting at which it agreed that VIT must give it and the public information about the salaries of its top three executives, the authority board unanimously committed to resisting any efforts to "undermine the private status of VIT."

Presumably, the board makes that claim to try to protect the ports' competitive status. That's commendable. But it has not made a convincing case that in order to do this, it is necessary to force on VIT a label and status that serve the public badly. There is no evidence that Virginia's ports could not compete even if the port authority recognized the essentially public nature of its right arm, VIT.

Problems arise because of the way in which VIT and the port authority hide behind the claim that VIT is private. They invoke it to refuse to release information, such as information about employee pay that is available for public entities across Virginia, nonprofit organizations across the nation and publicly traded corporations. VIT invokes the claim to keep the press and public out of the meetings at which it does the business of running the public's ports.

VIT is an odd being, a nonstock corporation spawned by a state agency. But the argument that it is public in nature and function is compelling. It goes like this:

VIT operates facilities that are owned by the public.

It was created by a public agency.

Its earnings go to fund a state agency, the port authority.

Its board members are appointed by the board of that state agency and serve at its pleasure.

It is overseen and its budget is approved by that agency.

It does not pay federal income taxes, claiming an exemption for state entities that perform an "essential governmental function." State law uses that same wording to describe the work the port authority does, through VIT, in operating the ports.

State law describes it as running terminals "solely on behalf of" a state agency and exempts it from paying sales tax for that reason.

It was created so the port authority could do business with the unions that work the docks - nothing more complicated than that.

It is organized as a corporation, but that's a matter of legal structure. It has no private owners.

Add it all up, and it spells "public."

The authority's dogged refusal to recognize this is at odds with both a common-sense assessment of reality and the ideal of openness in government. If no legislative directive is provided to open up VIT, it falls to Gov. Tim Kaine to step in to resolve this matter since members of the authority serve at his pleasure. Between his persuasive powers and his appointing authority, he has a shot at success.

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