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Originally published April 28, 2007 at 12:00 AM | Page modified April 28, 2007 at 2:02 AM

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Port CEO payoff set without approval, files show

Port of Seattle officials were preparing to give former CEO Mic Dinsmore an extra 40 weeks of pay even though it hadn't been formally approved.

Seattle Times business reporter

Port of Seattle officials were preparing to give former CEO Mic Dinsmore an extra 40 weeks of pay even though it hadn't been formally approved by the Port's commission, according to e-mails and notes regarding Dinsmore obtained Friday by The Seattle Times.

The documents also include notes from Dinsmore that suggest all five commissioners discussed the additional pay during at least one executive session in early 2006. Three commissioners have said they don't remember talking about it.

The documents show that the added pay for Dinsmore, who retired voluntarily in mid-March, was to be categorized under the Port's HR10 policy, which normally is reserved for employees who are laid off.

An April 6 e-mail from a human-resources manager at the Port outlines the "administrative leave" Dinsmore is to receive at his annual salary of $339,841, until Feb. 29, 2008.

"... This does pull your 'retirement' date back to February 29, 2008 (leap year!)," says the e-mail, from human-resources manager David Henderson, the Port's total-compensation manager.

A "confidential draft" schedule attached to the e-mail adds that while being paid for the 40 weeks of "paid time off," Dinsmore also would accrue 285 extra hours of unused "extended illness" time. At the end, "... you would have 400 hours of extended illness for which you would receive a lump sum payment of 50% on your final paycheck on April 4, 2008."

The extra pay was never awarded because, as the request went up through the chain of command at the Port, CEO Tay Yoshitani, deputy CEO Linda Strout and general counsel Craig Watson all noticed the payment had not received the proper authorization, spokesman Mick Shultz said.

Henderson was in the dark about what was going on and was following protocol, "doing what he would do for any retiree," Shultz said.

After the dispute over the extra pay became public last week, the Port's five commissioners unanimously voted at a public meeting Tuesday against paying Dinsmore. The Port's independent Board of Ethics was asked to conduct an inquiry.

Several commissioners have said they don't recall discussing Dinsmore's extended pay at two closed-door meetings in 2006.

According to personal notes that Dinsmore wrote following those two meetings, commissioners talked about paying him under the HR10 policy.

"I am to receive 2 weeks for every year of service (40+ wks.). I also informed him [Port commissioner Bob Edwards] we have been quite liberal in our application" of the HR10 policy, wrote Dinsmore in his notes from the June 8 meeting.

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He continued, "Bob then stated that we [the commissioners] have already agreed with this, but acknowledged not all departing employees received HR10."

The meeting summaries, which are one page each, were apparently written directly after the meetings and later placed in Dinsmore's personnel file.

Shultz said he isn't sure how the notes got into the file.

One session was in June 2006, according to Dinsmore's notes.

The other notes are undated, but Port officials agree that meeting took place in January 2006.

Commissioners John Creighton, Alec Fisken and Lloyd Hara have claimed they don't remember any discussions about Dinsmore's additional pay.

Creighton, who now serves as president of the commission, said Friday he doesn't remember "any discussion on severance," adding that notes he took about the meetings "don't reflect that."

Fisken, who was absent from the June meeting but present in January, also reiterated Friday he has "no recollection of it."

"Believe me, I have racked my brain," Fisken said. "I certainly don't believe it occurred."

Edwards said Friday he doesn't agree with the way Dinsmore characterized the meetings in his notes.

"While there were some discussions, the issue was not resolved," he said.

Creighton and Edwards said they have seen the notes taken by Dinsmore; Fisken said he hadn't.

The dispute over Dinsmore's additional pay started last week when a memo surfaced showing that Commissioner Pat Davis had given authorization. The Oct. 10, 2006, memo outlined the benefits and said, "you will be provided benefits to assist you in your own transition away from the organization."

Davis has claimed she did not act alone. She did not return calls for comment Friday. Hara, who has said he doesn't remember discussing the pay, also couldn't be reached.

Also in Dinsmore's notes was what appeared to be a scripted plan of how commissioners would handle the announcement of his departure -- made public last June.

Using bullet points, Dinsmore wrote, "We discussed how we all will talk about it in a positive, constructive way. It's solely my choice. All should be credited for tremendous growth and success."

According to the notes, in the first session, Fisken apparently asked Dinsmore if he could announce his retirement sooner.

Fisken said he has no recollection of making that comment but also said, "It wouldn't be uncharacteristic."

"I was not terribly sad to see him leave," he said. "On the other hand, I was very concerned about an appropriate timeline for hiring a replacement."

Kirsten Orsini-Meinhard: 206-464-2391 or kmeinhard@seattletimes.com

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