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Seattle saddled with millions in WTO bills
City turned down 1998 federal offer to pay expenses
Thursday, June 15, 2000
By KERY MURAKAMI
As it considered which city should host last fall's World Trade Organization conference, the federal government offered to pay millions toward the cost of the gathering.
But Seattle business officials, aware that other cities might do the same, told the federal government to keep its money.
They promised to cover the cost of the event themselves. But seven months after the close of the conference, they have been unable to pay $1.5 million promised to help cover police costs, and the city is saddled with a $9 million bill from hosting the conference.
In a sense, the federal government's offer was just part of the mating dance federal and local officials play when a conference is up for grabs. The offer to Seattle was made in an Oct. 22, 1998, letter from State Department official John Dieffenderfer to Seattle-King County Convention and Visitors Bureau sales Manager Kathy Paxton.
"Let me note once again, all actual expenses generated by the WTO in holding the event in your city rather than at the headquarters in Geneva are the responsibility of the U.S. Government (WTO staff transportation and sustenance, shipment of documents to and from Geneva, meeting space, delegation office space, providing one vehicle/driver for each delegation and the like)," wrote Dieffenderfer, the State Department's 1999 WTO Ministerial Conference manager.
But in an interview, Dieffenderfer acknowledged he made the offer knowing the competing cities would insist on paying in the hopes of outbidding others.
Like most of the other cities, Seattle turned the offer down. Bob Rohan, chairman of the Seattle City Council citizens panel examining how the WTO was invited here, noted Seattle's bid to pay $7 million toward conference costs was $2 million more than Honolulu's $5 million bid. The cities' proposals are confidential, and the Honolulu bid is the only one the panel has been able to obtain.
In a Dec. 16, 1998, letter to Dieffenderfer from Paxton and Washington Council on International Trade executive director Pat Davis, the city offered to take care of all the costs the federal government had offered to pay for. Included in a $7 million budget they submitted were $840,000 to get the convention center ready, $1.6 million for delegate offices, and $860,000 for WTO delegates and ministers' transportation.
"The Seattle Host Organization will cover whatever the final costs are," they wrote.
Had Seattle's Host Organization not reached for the bill, Dieffenderfer said the State Department would have picked some other city.
But Seattle's host organization apparently went too far. Having offered to pay for such things as getting the convention center ready, the Seattle Host Organization spent all of the $7 million it raised on the conference itself, leaving nothing for the police costs it promised to pay.
The city may recoup about $3 million of its $9 million loss from Congress, but even then, the city will have to spend about $6 million in next year's budget that could have gone for other things.
Paxton did not return several phone calls to her office. Davis said she thought Dieffenderfer was offering to pay only for WTO costs directly related to having the conference away from the organization's home in Geneva: for example, meeting space in Seattle that WTO staff would not have needed back home. But Dieffenderfer disputed that and said the federal government was offering to pay for the entire convention center.
Davis has said in the past that the SHO felt confident it could raise enough to cover the conference costs and pay the city. She said the SHO felt other companies would contribute money considering the importance of the conference and sponsorship by Boeing and Microsoft, each of which contributed $500,000.
In an interview before Rohan's committee in March, ex-Boeing executive Ray Waldman, executive director of the Seattle Host Organization, said there was no way to tell whether the group could make good on its promise to raise the $7 million. He acknowledged the pledge was "a piece of showmanship" to win the bid.
The exchange of letters has caught the attention of a City Council citizens panel examining how the WTO came here.
Davis told the panel she didn't remember if she checked with the mayor's office. In closed door testimony before the panel May 22, Mayor Paul Schell and Deputy Mayor Maud Daudon said they hadn't heard about Dieffenderfer's offer.
Rohan said Davis and Paxton "misrepresented" Seattle's position when they turned down the federal funds.
Rohan asked Schell, during the panel's interview, if he thought "some action should be taken against Davis and the Washington Council on International Trade," one of the groups that helped bring the WTO to Seattle.
But Schell said Davis and the organization were "acting in the best interests of the whole community" by trying to bring the conference here.
Schell added that he didn't know what would be gained by blaming Davis at this point.
Rohan said in an interview that he does not know what action could be taken to try to recoup the money. But he said the city should develop a procedure for deciding which conferences to invite, spelling out beforehand how much the city should pay.
Schell, during his testimony, agreed.
"If there's no process, then the private sector takes over, and the city has to be left holding to bag," Rohan said.
P-I reporter Kery Murakami can be reached at 206-448-8029 or kerymurakami@seattle-pi.com
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