Embattled Port of Oakland executive Omar Benjamin has resigned amid growing scrutiny over a $4,537 bill at a Texas strip club.
In a prepared statement released shortly before 10 p.m. Monday, the port said Benjamin notified commissioners he is "retiring" from his position as executive director "effective immediately."
His resignation comes after a receipt showed he was part of a group whose $4,537 bill at a gentleman's club during a 2008 maritime conference was paid for by the Port of Oakland. Benjamin's name had been redacted from copies of the receipt that were first provided to the press.
James Kwon, the port's maritime director, submitted the receipt from a party at the Houston strip club, Treasures, for reimbursement. As questions about the expenditure grew, port commissioners suspended both Kwon and Benjamin with pay in October.
The Port of Oakland finally released the full version of the receipt Nov. 9, showing for the first time that Benjamin helped run up the expensive strip club tab passed off as a routine business meeting.
Kwon has said Benjamin asked him to charge the party to the credit card issued to Kwon by the port.
"We believe that the investigation will confirm that Mr. Kwon did not authorize nor incur any expenses at Treasures on Oct. 21, 2008, involving alcohol or adult entertainment," Kwon's lawyer, Jeffrey Katzoff, said Tuesday morning.
Kwon, whose annual salary is $214,248, remains on paid
Benjamin made no statement Tuesday.¿
Kwon's name is second to Benjamin's on the receipt dated Oct. 21, 2008 -- a particularly precarious financial time for the port.
The port said then that the 2007-08 financial crash forced furloughs and layoffs of workers, and that stalled environmental programs to cut back on truck emissions.
Acting executive director Deborah Ale Flint will replace Benjamin, whose picture was removed from the staff page on the port's website about noon Tuesday.¿
Benjamin's salary was $257,508 in 2011. The port will not be paying severance or other payments in exchange for his retirement, according to spokesman Isaac Kos-Read.
"The board is looking forward to completing its investigation as soon as possible and then taking appropriate action," Port Commissioner Gilda Gonzales said in a statement. "Until then," she added, "we are pleased to be turning the page toward a new era of leadership, transparency and accountability and know there is more hard work ahead."
The port plans to discuss additional developments regarding policies and oversight at its regular meeting Thursday, according to the Monday night statement.
Port officials have remained tight-lipped overall about the unfolding controversy involving public money and refused to comment on why the $4,537 receipt did not raise any red flags, even though Kwon submitting the receipt instead of Benjamin was a violation of port policy.
The port's Financial Services Division is supposed to review expense reports and the Office of Audit Services is supposed to conduct regular audits. The agency operates property owned by the city of Oakland but is independent of city control and answers mainly to a board of commissioners.
An outside contract firm, Arnold & Porter LLP, audits port records for expenditures, including other nightclub visits in Asia and Oakland billed to the port by employees.
Port policy allows "reasonable and necessary travel, entertainment and other expenditures incurred in the course of conducting the business of the port." It does not say where port employees can be entertained or how much executives can spend entertaining them.
But, according to the rules, Benjamin should have submitted the reimbursement request because he is Kwon's boss. In turn, Benjamin's expenses are supposed to be reviewed by "a higher level of authority."
Reimbursement requests should show the amount of the expense, the date and place of the payment, names and titles of others attending, and the business purpose of the expense.
Benjamin and Kwon were in Houston for the 2008 North American Port and Intermodal Finance and Investment summit, where Benjamin was a speaker on one of the panels.
Kwon included the names and positions of 10 maritime executives from two companies on the receipt, some of them BNSF Railway businessmen. The port has refused to provide those names. But BNSF spokeswoman Lena Kent said there is no record of BNSF employees being at the club or in Houston at the time.
Kwon listed the other company on the receipt only as HMM.