August 21, 2000

    As Chair of the Board of Directors of the Washington Council on International Trade (WCIT) I am writing to you in your capacity as Chair and members of the WTO Accountability Review Committee (ARC) of the Seattle City Council.

    WCIT is a 27-year-old private, nonprofit association supported by corporate and individual members. WCIT's members share a common dedication to promoting strong two-way trade between the United States and its trading partners. WCIT concentrates its programming efforts on key public policy issues in international trade and education on economic affairs as well as issues of U.S. trade with individual trade partners abroad. WCIT serves the broader community through its work with the media, civic groups, elected leadership, and educational institutions. Please see Attachment A for a list of WCIT's Board of Directors and WCIT's membership.

    WCIT's Board of Directors has directed me to submit this letter to express its strong exception to the series of inaccurate findings of "fact" and unwarranted and unfair calls for sanctions against WCIT and its President, Patricia Davis, contained in the report by the Citizen's Advisory Panel One to ARC dated June 29th, 2000. The enclosed Attachment B is a copy of ARC's home page, which outlines ARC's charter as well as the mandate to the citizen's advisory panels.

    We are compelled to make this submission to set the record straight. We respectfully request that ARC take the appropriate actions to correct the erroneous findings of fact as well as findings that are not substantiated by the record. We also request that ARC reject the calls for sanctions against WCIT and Davis. After ARC's review of the record, we are confident that ARC will agree that this is the only appropriate course of action.

    This letter is intended to provide ARC with an overview of WCIT's position. In addition, we have enclosed with this letter Attachment C, which is a point-by-point rebuttal to the Panel One Report and is supported by references to the record.

• I. What was the mandate of ARC's Panel One?
  
  To review contacts and determine what agreements were reached. Panel One improperly exceeded its mandate by making allegations and recommendations for sanctions.
  
  In the aftermath of the events that occurred in the streets of Seattle during the week of the 1999 WTO Ministerial Conference, the Seattle City Council initiated a

  "thoughtful, objective review of the events surrounding the WTO conference that determines accountability and provides recommendations for consideration of possible new legislation or policy changes..."

  (Council Resolution 30100, December 6, 1999)
  
  After its formation, ARC created three citizen advisory panels to assist in its mission. The panels were asked to address three main areas of inquiry: (a) the process by which the decision was made to host the WTO in Seattle; (b) the planning process preceding the WTO meeting, and (c) the City's public safety operations during the week of the WTO meeting.
  
  The mandate of Panel One, the "WTO Invitation Panel," was to

  "examine Seattle's decision to host the WTO Ministerial Conference. It will review informal and formal contacts by officials of the City, Port of Seattle, King County and other community agencies to determine what lobbying, negotiations, and briefings took place and what agreements were reached."

  (ARC Home Page)
  
  
• II. How did the WTO meeting come to be held in Seattle?
  
  A broadly inclusive public-private sector coalition carried out the invitational process. The allegation that WCIT, acting on its own, invited the WTO belies not only the facts presented to Panel One, but the chronology of events detailed in Panel One's own report.
  
  To properly discharge its mandate, ARC should have a clear understanding of how events such as the WTO meeting come to be held in a particular venue. We believe that Panel One's report fails to assist ARC in securing that necessary background because the report indicates a fundamental lack of understanding as to the extent to which the private and public sectors of our state, region and City actively cooperated for many months in an extensive effort to attract the WTO meeting to Seattle.
  
  Panel One concluded that because of the City's vital interest in international trade, it was natural and reasonable that Seattle would be interested in hosting a major conference on trade policy. (Finding 9) Indeed, that conclusion would seem to be entirely consistent with the Seattle City Council's own assessment in 1993 as to the importance of meetings such as the WTO meeting. On November 22, 1993, it passed Resolution 28836 (enclosed as Attachment D) following Seattle's hosting of the 1993 APEC Ministerial and Leadership meetings.
  
  In a letter addressed to WCIT and its then President, Robert A. Kapp, the City Council expressly recognized the leadership, hard work and dedication of WCIT and Kapp, which had enabled: "Seattle and the region [to] display for the APEC leaders and the world media, our dynamic and diverse economy and culture."
  
  Just as in the case of the 1993 APEC meeting, the WTO meeting could not legally have been hosted by the City, or by any other Washington state governmental body. Washington State's constitution (Article VIII, Sections 5 and 7) prohibits governmental entities from giving money in aid of or lending credit to individuals or private entities other than for charitable purposes. This restriction effectively prevents the City from entering into contracts for services and goods (such as catering, leases, etc.) that would be necessary if the City were to be the host of an event such as the WTO meeting.
  
  It was because of this inability that the private sector mobilized itself in 1993 and formed the APEC Host Committee and the APEC Organizing Committee to support the hosting of the 1993 APEC meeting, and the City Council Resolution expressly recognizes the contribution of these entities.
  
  The City Council resolution specifically listed the numerous entities in the public and private sectors that had worked towards the successful hosting of the 1993 APEC meeting. The very same type of closely coordinated efforts among the public and private sectors commended by the City Council in connection with the 1993 APEC meetings both preceded and were essential to the community's success in attracting the 1999 WTO meeting. Interestingly, in many cases the WTO effort involved not only the same structural template, but also the very same individuals and organizations that had carried out similar roles in pursuing the 1993 APEC meeting.
  
  Panel One seems to have been oblivious to this important fact when it made its oversimplified and misleading finding that in essence WCIT, acting on its own, invited the WTO: "The WTO was invited by [WCIT] by letter bid dated December 16, 1998, signed on behalf of the WCIT by its President, Pat Davis." (Finding 1)
  
  As detailed in Panel One's findings, the record clearly shows that the effort to pursue the opportunity to host the WTO meeting was a coordinated one that brought together many representatives of the private and public sectors of this region and City. Beginning in May 1998, when it became known that the WTO meeting would be held in the United States, representatives of the various local governments and the various regional trade organizations independently and overwhelmingly came to the same conclusions: the hosting of the WTO meeting in Seattle was in the best interests of this community and the region and they should all work together towards that goal.
  
  The chronology set forth in Panel One's findings shows that nearly every governmental authority in this region including the City was actively involved in the effort to attract the WTO meeting to Seattle. Panel One report's chronology discloses that Seattle's Mayor, Deputy Mayor, Office of Governmental Affairs, City Council President and Council Budget Chair, and several Seattle Police Department representatives were early and active participants.
  
  In light of that across-the-board initiative, it is both overly simplistic and severely misleading for Panel One to have made the finding that WCIT alone invited the WTO to Seattle and that City representatives were only "generally aware" that an invitation would be made for the hosting of the WTO meeting in Seattle. (Finding 3)
  
  From May through August 1998, the various private sector, governmental and quasi-governmental entities coordinated among themselves without a formal structure. In the July to August 1998 time frame, it became apparent to all interested parties that, in order to continue to effectively pursue the opportunity beyond writing letters of support and blocking out hotel rooms, the community would have to create a more formal structure to harness efforts and deploy necessary resources.
  
  By August 1998, the various trade-related organizations in the region, including, but not limited to, the Trade Development Alliance, Seattle-King County Convention and Visitors Bureau, Port of Seattle, the National Center for APEC and WCIT reached the consensus that WCIT should take the lead in coordinating the efforts of all others. In August 1998, WCIT in turn concluded that the structure that had proven to be so effective in the securing and hosting of the 1993 APEC meeting should be used as the structure to pursue the invitation of the WTO Meeting.
  
  Using the 1993 APEC meeting template, the Seattle Host Committee (SHC) was created in the latter part of August 1998. SHC thereafter served as the representative body of the regional community in the pursuit of holding the WTO meeting in Seattle.
  
  Six individuals served on SHC: Mayor Paul Schell, King County Executive Ron Sims, Governor Gary Locke, Boeing CEO Philip Condit, Microsoft CEO William Gates, and Patricia Davis, President of WCIT. These individuals were clearly acting as representatives of the broad public-private-sector effort that had come together since May 1998.
  
  The Seattle Host Organization (SHO) came into being after the federal government made its decision on January 25, 1999, that Seattle was selected to host the WTO meeting. SHC structure was then broadened to that of SHO so that SHC could mobilize even more layers of the community to ensure sufficient resources to provide the services and facilities required of the private sector for hosting the event.
  
  SHC and SHO were not legal entities. They were the vehicles that represented the community in interfacing with the various branches of the federal government and the WTO. They also led the fundraising effort needed to fund the costs that would be expected to be borne by the community. As described in the Panel One report, the USTR and the White House would decide where the WTO meeting would be held, while the State Department would also have a major role.
  
  In summary, the WTO meeting was invited to Seattle by a broad constituency of public and private organizations. SHC and SHO were the volunteer organizations formed to mobilize the efforts needed to pursue the invitation process and later to fund and to perform the hosting responsibilities allocated to the private sector by the federal government.
  
  
• III. Was the December 16, 1998 invitational proposal properly presented?
  
  The Panel overlooked the fact that the letter was an expression of the corporate community's willingness to financially support specific budgeted components and not a commitment to fund actual expenditures, whatever they might be. This fact was, however, clearly understood by the federal government and by the broad coalition pursuing the invitation.
  
  Panel One decided that the December 16, 1998 letter constituted a blanket guarantee that SHC would cover all the WTO meeting's final costs "whatever they might be." The letter is signed by President Davis of WCIT and also by the Visitors Bureau, and is expressly written by WCIT and the Visitors Bureau on behalf of SHC. The letter is clearly an expression of the corporate community's willingness to financially support specifically identified components of the financial burden of hosting the event. The language of the letter makes it clear that it was not written by WCIT as a personal undertaking of WCIT. (Letter and budget are enclosed as Attachment E)
  
  Only if taken in isolation and placed outside of the context of both the letter and the time frame in which it was written, could some of the language in the letter be misconstrued to appear to support the proposition that the undertaking was a guarantee to cover all expenses of WTO. As written and, more importantly, as read by the federal government-- the recipient of the letter--in the context of the loose "bid" process conducted by the federal government, it was clear in December 1998 and during the following months that the letter was neither a blanket guarantee to pay all costs of the WTO meeting nor a guarantee to pay all security costs.
  
  In context, the proposal constituted an expression of confidence that the private sector could raise the contributions necessary to cover specific services and goods identified in the attachment to the letter. On the issue of security expenses, the letter makes it clear that the responsibility for providing that function was in the hands of the respective governmental agencies. It also clarifies that SHC was undertaking to raise funds for a contribution of $1.5 million to the relevant agencies. The letter cannot be construed as a commitment by SHC or WCIT to pay all security expenses related to the WTO meeting.
  
  From the outset and throughout the 11 months leading up to the WTO meeting, the federal government knew that it was not WCIT, but SHC and later SHO that was raising funds from the private sector. Because SHO was not a legal entity and could not enter into contracts with third parties, WCIT, on behalf of SHO, later entered into contracts with the relevant parties to provide the specific items listed in the December 16, 1998 letter. It should be emphasized here that WCIT was careful to contract with third parties only to the extent that funds were raised from the private sector.
  
  The federal government was also perfectly clear that SHC and SHO were not independent legal entities, and that there would be funds available to cover the items identified in the December 16, 1998 letter only to the extent contributions could be raised from the private sector. In fact, as the date for the event neared and it became clear that funds would not be raised to cover all items listed in the December 16, 1998 letter, SHO was in constant communication and negotiation with the federal government. In the end, expenditures for activities or services that were originally included in the December 16, 1998 letter were either eliminated, scaled back or funded by the federal government.
  
  In addition, one should not overlook the fact that the entire process of the request for proposals from the federal government was extremely fluid and subject to uncertainty. Illustrative of the degree to which it was impossible to be definitive as to the cost of the WTO meeting are the following quotes before Panel One taken from the testimony of the Visitors' Bureau representative and one of the City's representatives:
  
  

  "we could never get specific information out of the [federal government] or the WTO about what they needed to manage the conference";
  
  "this process was totally foreign to me because there was not a formal bid process, no exchange of letters or criteria. It was very informal …."; and
  
  "the convention [that was bid on] … was not the meeting that ended up coming here."

  That the full amount contemplated could not ultimately be raised is unfortunate. The original funding goal outlined in the December 16, 1998 letter was $9,237,000. SHO ultimately raised $7.2 million in cash and in-kind contributions. One should also understand that many totally unexpected developments outside of SHO's control intervened. Some of the those factors include the following:

  Limitations imposed by the federal government on the amount that one donor could provide;
  
  The decision by the federal government that donors would not be accorded customary benefits as incentives to sponsorship; and
  
  The belief by many potential international donors that private funding was inappropriate and that the federal government should fund the event--as is the custom and practice in the rest of the world.

• IV. Was the City or its Police Department misled or prevented from properly budgeting for the event?
  
  The entire matter of security was one handled by the City and a coalition group of security agencies. Neither WCIT nor SHO was involved in that structure or any of its meetings.
  
  WCIT and President Davis did not mislead the City or the Seattle Police Department regarding the financial ramifications of the WTO meeting, nor did they interfere in any way with the ability of the City and the Seattle Police Department to properly budget for the likely security expenses that would be incurred.
  
  The $1.5 million figure listed in the December 16, 1998 letter was an internal good-faith estimate by WCIT as to what security expenses might be as projected in December 1998. The amount was based on the 1993 APEC meeting expenses and was a sum provided to the federal government in the letter as an amount that would be contributed to the City to defray the City's security expenses from funds contributed by the private sector.
  
  This was not a commitment given to the City and the record shows that the City and the Seattle Police Department did not rely on receiving that amount in their planning for the event. Indeed, as soon as the City came to realize that the magnitude of the City's expenses for security would exceed what had been anticipated, the City promptly began negotiating with the federal government for additional funding.
  
  That the City and the federal government were of the same understanding is underscored by the fact that the City and the federal government entered into separate negotiations between themselves. These negotiations did not include SHO and were related to allocation of responsibility for security expenses. Meanwhile, SHO and the federal government expressly excluded the subject of responsibility for security expenses from the scope of their discussions and from the draft documents exchanged relating to a possible memorandum of understanding between those two parties. (Neither sets of discussions ultimately produced an executed memorandum of understanding.)
  
  A City representative stated to Panel One: "It's extremely difficult to know one or two years out what costs will be …" (See Attachment C, Section IX) The record further shows that representatives of the Seattle Police Department attended each of the site visits by the WTO inspection teams and were given complete access to SHO's planning activities after Seattle was selected as the host city.
  
  Finally, a city's police department is responsible for making its own security plans and necessarily would be responsible for making its own projections as to personnel requirements and equipment needs. Understandably, SHO and the City were disappointed by the receipt of the less-than-full amount. However, SHO did relieve the City from the burden of security expenses totaling approximately $782,000 for which it would otherwise have been ultimately responsible, including $320,000 in cash contributed to the City.
  
  
• V. Were commitments made on behalf of the City of Seattle, King County or the State of Washington?
  
  There is no justification for this unwarranted allegation, as nothing in the report substantiates it.
  
  In its Recommendation 2, Panel One based its call for sanctions in part on a purported finding that there were commitments made by private parties without authority. Yet, neither WCIT, nor SHC nor SHO made any commitments on behalf of the City, King County the State or any other governmental entity. There is no specific finding to that effect, nor does the record support such a finding.
  
  In fact, the City Council's letter of praise for WCIT after the successful APEC meeting (see Attachment C), and the fact that WCIT followed the same structure used in 1993 for the APEC meeting for WTO meeting, further supports the fact that there was a clear understanding that WCIT did not speak for the City, and the City was well aware of that fact.
  
  In addition, in reaction to Panel One's report, Mayor Schell strongly rejected the notion that WCIT or President Davis had engaged in conduct that misrepresented WCIT's role or the City's financial obligations in connection with the WTO:

  "Port Commissioner Pat Davis and the Washington Council on International Trade were acting in the best interests of Seattle and our regions….
  
  Never did I or anyone in my office feel there was any misunderstanding or misrepresentation on the part of Pat Davis or WCIT about their fund raising role and the City's financial obligations in connection with the WTO…."

  (June 30, 2000 Press Release of Mayor Schell) (enclosed as Attachment F)
  
  
• VI. Were commitments made to the City regarding reimbursement of security expenses?
  
  No such assurance was ever made to the City, nor was there any claim by any City official that such an assurance was given. Public and private sector entities understood that SHC was offering to make a contribution toward budgeted security costs and that a separate security group would handle security.
  
  Panel One alleged that President Davis gave specific assurance to the City that the City's security costs would be reimbursed. Neither SHC nor SHO nor WCIT made any such commitments. The December 16, 1998 letter indicated to the federal government that SHC intended to raise funds from the private sector so that a contribution of $1.5 million could be made to the relevant agencies that would be providing security. This was not an assurance to the City.
  
  Furthermore, it is clear that representatives of the City were advised and understood that SHC and SHO's commitment was a commitment to raise funds from the private sector. It was well known that, if there were problems generating contributions, receipt by the City of the $1.5 million would be in jeopardy.
  
  Finally because both the Seattle Police Department's liaison to SHO and the Chair of the City's Public Security Committee were given complete access to SHO's Steering Committee meetings, as early as May 1999 the Seattle Police Department knew there would be problems raising the full amounts originally contemplated. Additionally, it was formally notified of the fundraising difficulties by SHO's letter dated August 31, 1999 (enclosed as Attachment G).
  
  
• VII. Were the recommendations for sanctions and personal attacks fair and appropriate?
  
  Panel One inaccurately assigned blame without regard to the facts it had gathered during interviews. Not only were the allegations therefore unfair, they were also inappropriate because they were not within the mandate of Panel One.
  
  The events that transpired during the WTO meeting certainly were cause for dismay to both citizens and City officials. Moreover, the disturbances caused the City to incur far greater expenses for security than had been anticipated or budgeted. The entire community should be able to draw a number of valuable lessons in the aftermath of the WTO meeting. Panel One's mandate was to assist ARC and the City Council in that exercise.
  
  Panel One, however, appears to have been more concerned with assigning blame than with the task of reaching a clear understanding as to how the WTO meeting came to be held in Seattle and how this understanding could be used to help the City prepare for the future.
  
  Recommendation 2 stated that the City should

  "2. Adopt sanctions against the Washington Council on International Trade and its President, Pat Davis."

  Recommendation 2 is not the product of a fair and balanced review of the record. Nor does it fall within the mandate of ARC as prescribed by the City Council. We find it particularly objectionable that Panel One leveled a number of allegations of purported personal misconduct by WCIT President Patricia Davis. President Davis' actions in connection with the WTO meeting were taken in her capacity as WCIT's President, and she acted with the express authorization of the Board of Directors of WCIT in leading WCIT's efforts on behalf of and with the participation of both public and private sectors of this community.
  
  Furthermore, on a purely legal note, there is no basis for a recommendation that President Davis should personally be subject to sanctions even if the responsibility of recommending sanctions were within the mandate of ARC and Panel One, which it is not. ARC itself stated that "ARC is not empowered to act as a finder of fact for legal purposes, or to act as a judicial review of specific incidents." (ARC Home Page, page 2)
  
  Moreover, the approach taken by Panel One offends fundamental principles of fairness and due process. Panel One interviewed President Davis on March 26, 2000, as one of its first witnesses. Thereafter it never notified her or WCIT that it would be making serious allegations of personal misconduct and did not offer her or WCIT an opportunity to respond. Panel One should have given President Davis and WCIT an opportunity to respond before it proceeded to make findings of misconduct and calls for sanctions.
  
  Regardless, in light of the uncontroverted facts as outlined above we are confident that ARC will agree that Recommendation 2 must be rejected.
  
  WCIT also has serious reservations and concerns regarding the Panel One's Recommendation 1, which would put a governmental body in the position of approving or disapproving a proposed public gathering. WCIT would welcome the opportunity to work with the City regarding this issue.
  
  
• VIII. Conclusion
  
  In light of the failure of Panel One to accurately examine the record and accurately reflect such record and because Panel One exceeded its mandate from ARC in connection with its Recommendation 2, we respectfully request that ARC (a) enter into the public record a correction of Panel One's erroneous findings and (b) expressly reject the notion of sanctions against WCIT and President Davis.
  
  Further, the ARC mandate to each of the citizen's advisory panels clearly states that not only is ARC not empowered to act as a finder of fact for legal purposes or to act as a judicial review of specific incidents but that "disputed or unresolved questions [must] be noted in the panel's reports." (ARC Home Page, page 3)
  
  Clearly Panel One failed to follow ARC's instructions in this regard. Accordingly, we further respectfully request that this submission by WCIT be placed in its entirety adjacent to wherever Panel One's report is made available to the general public, including, but not limited to, being placed adjacent to any posting on ARC's Website.
  
  

Enclosed Attachments:

Attachment A WCIT Directors and Members
Attachment B ARC Home Page
Attachment C WCIT Point-by-Point Rebuttal to Specific Findings
Attachment D Seattle City Council Resolution 28836 and cover letter
Attachment E Cover letter of December 16, 1998 and attached budget
Attachment F June 30, 2000, Press Release of Mayor Schell
Attachment G August 31, 1999 SHO letter to Seattle Police Department