October 29, 2005 - From the October, 2005 issue

Port Commissioner Krause Wants L.A. Staff To Respond To Both Customer AND Resident Needs

The five members of the Los Angeles Board of Harbor Commissioners, who are appointed by the mayor, oversee one of the great economic engines not just in the L.A. area but perhaps in the entire country. The new commission faces the challenge of serving the port's growing ranks of customers while protecting the environment. In the following interview with MIR, new commissioner Doug Krause, Executive Vice President and General Counsel of East West Bank, discusses some of the goals and issues facing Mayor Villaraigosa's new board.

Doug Krause

Doug, you are newly appointed to the City of L.A. Harbor Commission, and the city's port is obviously a critically important economic asset for the region. What agenda would you like to advance during your tenure. What will be your priorities on the Commission?

I think that L.A. is blessed with great advantages that can help it become a better city for all us – its location and climate, its economic base, its infrastructure, and the diversity of its people. One of those advantages is the port. It is at the center of Pacific Rim trade – trade between the United States, Asia and Latin America. Our diversity as a city gives us strong ties to all those places. It also gives us huge opportunities for economic growth.

The commission is looking at ways to help create jobs locally, to grow the port, and, at the same time, have clean growth, to make it a green port. If somebody said 10 or 15 years ago they were pushing for green growth, that would have been mostly a meaningless slogan. But today this can be possible.

It is a trite comment, I suppose, when people say "the age of petroleum is over," but I think that the recent increases in the price of petroleum and all the supply disruption have really brought that home in a strong way, and that this will make clean growth possible. The Commission is going to be looking at that very hard and because and on way to reduce pollution and increase growth and jobs at the same time.

MIR has recently published interviews with State Senator Alan Lowenthal, Gale Feuer of the NRDC, and interim Harbor Executive Director Bruce Seaton about the challenge of balancing port growth with environmental goals. This task poses no easy solution. The projected growth of the port is astronomical, and the economic value of those goods through the region is inestimable. Does the Commission or its new commissioners have any thoughts on how best to achieve an acceptable balance?

We're going to be trying a lot of different things and looking at a lot of different solutions. It may very well be that it's a lot of little things, that it's not just one big master stroke or one idea that's going to do it. I think getting away from diesel fuel and petroleum is going to be a big part of it. Fewer trucks might help a lot, and many of the trucks out there could be replaced by trains.

Would you share with our readers your background and, likewise, the backgrounds of the other new commissioners. What is the mix of perspectives voiced when the Commission now meets?

I am with East West Bank, which is very heavily involved in trade finance and with China. We finance a lot of the goods that come in and through the Port of Los Angeles. We do a lot of business with the greater China region and the other countries in Asia. For a long time I have been watching the flow and pattern of trades – what industries are moving from and into L.A., what goods are coming in and going out, watching it from a distance, and I was very interested in following trade in Los Angeles. So one perspective I bring to this new assignment is really, in large part, from the trade end.

Another element of the background that I bring is that I'm very heavily involved in corporate governance processes. My company is a publicly traded bank. We're in the top 10 percent of ratings by a company called Institutional Shareholder Services that rate corporate governance. We have a lot of experience in implementing and working with good governance to do this. We're looking at making sure all the processes at the port are a lot more transparent and open to people. We have a new ethics and disclosure policy to make sure that commissioners are disclosing ex parte contacts with interested persons. We're putting limitations on travel. We're doing a lot of things to try to make the governance of the port work better.

Also, we're holding some meetings at 6 p.m. so we can encourage a greater section of the community to come and find out what's happening. We're going to alternate meetings between San Pedro and Wilmington for the same reason. We're having a lot more discussion items on the agenda, not just quick approvals, so that people can know ahead of time what the Commission is thinking about things and the public can have a chance to express their view. So we're trying to be a lot more transparent and open. Hopefully people will like it – at least they won't be surprised and they'll know why we are doing what we are doing. The other commissioners come in with all different experiences, so I think together it's a very good group.

These reforms are likely to be well-received in the neighborhoods and communities of San Pedro and Wilmington, and the corridors that serve the ports, but other MIR readers who are involved in trade and economic development, might be bemoaning that L.A.'s Harbor Commissioners don't seem invested or involved in what it takes to run one of the largest and most complex trading ports in the in the world. How would you rebut their possible concerns?


The impressions when I first came to the port is that nobody liked us. The communities are mad at us. The environmental groups are mad at us. Our customers, the shipping companies, are not happy with us. The port is trying to build relations with all three of those groups. I haven't spoken yet about the customers, but that's obviously the reason why we have a port. We probably haven't talked about them at the meetings as much as we should have, but that's a very high priority for us. It's also very important, and I know the other commissioners also feel this way, that we want to be a better port for our customers.

Some examples of things we're looking at is being a lot faster getting to approvals. I know right now that that if somebody wants do construction or some other project, the approval process by the time we do environmental impact reports can drag on for years and years. And the result of that process can be very unpredictable. That's a terrible thing I think for our customers, and it's also not good for the community here. Whatever decision we're going to make, we should make it fast. So one of the things we want to do for our customers is to speed that process up a lot.

We want them to be able to plan and know what to expect from the port. We also want to work with them very closely on ways to increase business. We want to avoid the congestion that we've had in the past. The PierPass program came on before our Commission started. My view is that it's a great program. It's a great way to reduce congestion and it's good for our customers. There is a huge infrastructure, but the capacity is being used during only a small part of the day. Extending the hours we are open as PierPass does is good for our customers and also good for the community. I think that's kind of a win-win situation. We've been talking about PierPass more in the sense of how it can benefit the community, but we also recognize that it also has to be good for our customers.

We want the port to be considered an attractive place to do business.

One of the blessings of competition in the public sector is innovation and improvement, and we have that at our two ports in Long Beach Port and the Los Angeles Port. Competitors to be sure, but they have combined to become an efficient and powerful economic force in the western United States. What advantages will Long Beach take of L.A.'s reforms and what advantage can you take of Long Beach by being on the cutting edge of this green and healthy agenda being advanced?

Excellent question. One mission we're looking at is reaching out to Long Beach Port. In certain respects, there's always going to be a huge amount of competition. And I think that's good for customers and good for both ports. Competition keeps both ports on their toes. On other things I think of we can work together, for instance, on security.

When you go down there and look at the ports, it's in actually one port. There's no line between them like there is on a map. For security purposes, we're spending money on our security, police, and our disaster plan, and Long Beach is doing the same thing. Right now the plans don't relate to each other very much, which is ridiculous. It would be very beneficial if the ports can work together. By doing that we can save money and can make things better for our customers and the community also.

Let's close with an open-ended question. You have a rather colorful and experienced chair in David Freeman. What is it like serving on the Harbor Commission with him as leader?

I am very, very impressed by him. He has tremendous energy. He has very good knowledge about a lot of issues facing us. He's a great moderator at our meetings. He works very hard to build a consensus. He tries to pull everybody in, draw the community in, and get all the issues out on the table.


© 2024 The Planning Report | David Abel, Publisher, ABL, Inc.