Fraud probe finds questionable credit-card charges tied to Port of Tacoma system
AI-generated summary reviewed by our newsroom.
- Fraud investigation report details how personal charges were found tied to purchase card.
- NWSA terminated the worker, reduced his final paycheck by $697 and received $13 refund.
- The state Auditor’s Office has referred the case to Pierce County Prosecutor’s Office.
A former employee of the Northwest Seaport Alliance could face criminal prosecution over what a state fraud investigation called a “misappropriation” of public funds.
The fraud report from the Washington State Auditor’s Office, published April 30, said the case dates to May 28, 2025, when NWSA officials notified the Auditor’s Office of “a potential loss of public funds” tied to questionable credit-card charges.
The charges were made using what NWSA calls the “p-card system,” a purchasing-card program that is a Port of Tacoma system utilized by the NWSA.
The NWSA operates as a joint venture established in 2015 involving the ports of Tacoma and Seattle, with the goal to boost the ports’ competitiveness and economic development as a unified force in U.S. and global markets. NWSA communications director Melanie Stambaugh Babst told The News Tribune via email that NWSA staff work between Tacoma and Seattle.
The worker was identified as an executive administrative specialist for NWSA. The job entails providing support to the executive business partner and executive office, according to Stambaugh Babst, who responded to questions from The News Tribune about the report.
The employee’s pay “at time of separation was $84,480,” according to Stambaugh Babst.
A person in that position communicates with the CEO, commissioners “and other internal/external contacts, and is accountable for helping to ensure an effective, strategically focused executive office,” she added.
How the charges were discovered
According to the report, the office’s accounting manager found the charges “made on an executive administrative specialist’s (specialist) card. The accounting manager asked the specialist about the charges, and he said the card had been stolen but did not report this or otherwise notify the bank these were unauthorized charges.”
NWSA launched an investigation and discovered “alert emails the bank sent to the specialist’s work email on April 9, 2025,” the report stated.
“The emails requested the card holder (specialist) to certify the business validity of transactions paid to an online payment processing vendor. On April 10, the specialist confirmed to the bank they were valid, thereby allowing the transactions to be processed,” it added.
The worker was placed on administrative leave on May 5, 2025, and NWSA proceeded to review credit-card charges made by the worker between January and May of that year.
“The Alliance’s investigation determined between January 15, 2025, and April 28, 2025, the specialist made $8,945 in personal charges,” the report stated. “Of this amount, $8,235 went to an online payment processing account held in the specialist’s name. He also made $710 in personal meal charges and a hotel charge.”
The specialist had categorized the meal charges as “personal” in the NWSA procurement card system and was scheduled to repay from his personal bank account, according to the report.
“However, when the bank attempted to process the payment, non-sufficient funds in the specialist’s personal account prevented the repayment from occurring,” it stated, with NWSA held liable for the payment.
On June 11, 2025, a hearing was to take place between the NWSA and the worker over the charges. The specialist did not attend but rather sent an email “acknowledging his actions,” the report stated.
NWSA then terminated the worker and reduced his final paycheck by $697 to cover the personal meal charges, and he also refunded the NWSA’s account $13 in credit charges, the report said.
The Auditor’s Office stated in its report that it would refer the case to the Pierce County Prosecuting Attorney’s Office “for any further action it determines is necessary.”
It also recommended that the NWSA “seek recovery of the remaining misappropriated amount of $8,235 and related investigation costs of $7,798” from the former employee and/or the NWSA’s insurance bonding company, “as appropriate.”
Bank declines to reimburse for lost funds
The NWSA’s response to the findings was included in the auditor’s report.
NWSA said that it had utilized the Port of Tacoma’s purchasing card program for 10 years, “and the Port of Tacoma has used this same program for nearly 25 years without a single previous instance of loss from fraudulent use of a p-card.”
The NWSA added, “We credit this to the combination of internal controls built into the credit card system itself as well as those incorporated into our own p-card policy and procedures. Nevertheless, we acknowledge this loss may have been prevented had certain additional controls been in place.”
It noted the NWSA’s bank had “upgraded” the p-card program, which resulted in changes in the statement review process “as well as supervisors/approvers’ visibility to charges that have not yet been reviewed by cardholders.”
It added, “In this instance, the supervisor was timely in reviewing the statement/charges, however certain charges were not presented to the supervisor for approval in the p-card system (because the cardholder did not review the fraudulent charges which happens before the charge is released to the supervisor for review) so that review was incomplete.”
Despite later identifying the charges as improper and suspending the card, the NWSA said, the bank declined reimbursement of lost funds because of the employee’s earlier verification of the charges to the bank.
The NWSA stated it had updated its review procedures for credit charges “and established a clearly-defined progression of consequences for misuse of the card or failure to review or approve timely,” along with other internal improvements.
Stambaugh Babst told The News Tribune via email on Wednesday, “In terms of recoupment, NWSA has made a claim for recovery of the lost funds with our insurer, which should result in a recovery of $5,735 ($8,235 loss less $2,500 deductible). We will pursue recovery of the remaining lost funds along with the investigation costs as recommended by the State Auditor’s Office from the former employee.”
Details of Auditor’s Office reporting process
Some observers might note that the state auditor, Pat McCarthy, whose signature the report is issued under, is married to Port of Tacoma Commissioner John McCarthy.
Adam Wilson is a media representative for the state Auditor’s Office. In response to questions from The News Tribune, he said via email on Tuesday that though the work was conducted by the Auditor’s Office, “Auditor McCarthy was not involved in the investigation or subsequent report at all. That is, she did not make any decisions regarding the audit work or provide any input to the report prior to publication.”
He added that issuing the report with her signature “is standard for the nearly 3,000 audits we publish every year. Our audit quality assurance team discussed the matter of her signature on this particular report before it was final and determined the auditor’s signature on the transmittal letter did not compromise the office’s independence.”
The full report is online at the state Auditor’s Office website.
