Keller, Under Fire, Known as a Master Of 'Wiggle Room'

Staff Reporter

In the sharp-elbowed worlds of longshoremen, international traders and City Hall politics, Larry Keller has made a point of avoiding conflict.

As executive director of the Port of Los Angeles, Keller has earned the reputation as a mediator, the sort who made an effort to keep all sides happy.

"Larry's style was to set priorities and try to build the team in the direction of the priorities," said James Preusch, the port's former chief financial officer. "It's not unusual for him to say, 'How's your wife doing?'"

But conflict avoidance has its limits, especially in the wake of ongoing federal and county investigations into business activities involving the harbor, the airport and the Department of Water & Power.

Last week, the U.S. Attorney's Office subpoenaed e-mails from Keller, who, along with the Port's director of public affairs, Julia Nagano, was called to testify before a federal grand jury the previous week. The investigations follow a scathing audit released by City Controller Laura Chick last summer that criticized the port for conducting business behind closed doors.

The report highlighted issues that have been the subject of longstanding complaints by community activists and homeowners groups in the area around the port.

Following the audit, City Councilwoman Janice Hahn called for Keller's ouster. Hahn's 15th District includes the port and San Pedro, where she and her brother, L.A. Mayor James Hahn, both live.

"Jim and Janice seem to be spending a lot of time and energy to satisfy the community. It's their constituents," said one City Hall source. "If they need a scapegoat, he's it. Not because Larry objected to anything. He's somewhat of a pawn. But he's in a high-paying job and he's at the mercy of the mayor."

Doane Liu, deputy mayor for operations and the mayor's liaison to the Port, said, "It's our understanding Larry Keller has not been targeted in this investigation. He's been asked to supply information and the mayor has been very clear with Larry and all general managers and all employees in the city of L.A. to cooperate fully."

All along, said Preusch, Keller has played the good soldier with the Harbor Commission. "Larry took direction from the board as the board made policy, and he was the policy implementer," he said. "That was his role."

Still, of the five Harbor Commissioners, only Elwood Lui returned a call seeking comment.

Keller has effectively achieved balance during a time of several challenges, said Lui, noting, "He's under a pressure cooker, and he's doing a good job."

Keller, according to Port spokeswoman Sheila Gonzales, has been on vacation during the past two weeks and was unreachable for comment.

Overseeing expansion

There is little question that under Keller, who was appointed by former Mayor Richard Riordan in 1997, the Port has seen monumental growth. It now contains 27 terminals handling 120 million metric revenue tons of cargo worth $102 billion annually.

In 1997, construction was completed on the 262-acre Global Gateway South terminal. In August 2002, it completed the first phase of the 343-acre Pier 400 terminal, which better positioned it to handle a growth in international trade.

Early in his tenure, Keller recognized the importance of international growth, particularly Asia. Coming off cutbacks in defense and a recession in the early 1990s, "a tremendous amount of wealth (was) created in Asia and that creates a demand for our goods," he told the Business Journal in a 1997 interview.

At a time when city officials were trying to wine-and-dine Asian business leaders, Keller came in, "specializing in affiliation" and "making deals in a rough-and-tumble environment," said a source familiar with port operations.

"Larry was definitely useful to know," said Adnan Saaid, consul for investment at the Consulate General of Malaysia. "He's a very nice guy, and very helpful."

But he also has been considered tough to pin down. "He's a glad-hander; he's everybody's best friend," said one source. "He holds their elbow, shaking their hands. He never takes a position on anything. He's always giving himself wiggle room."

Unlike his predecessor, the politically connected Ezunial Burts (who later headed the L.A. Area Chamber of Commerce), Keller, an anthropology graduate from San Francisco State University, brought a deep-seated understanding of marine operations to the port.

A 20-year career at Maersk Inc., where he was a regional manager at three coastal locations, got started by happenstance. "Some friends knew some people in the shipping business," he said in the 1997 interview. "After four years in the Navy, I thought the last thing I wanted to see was a ship again. But shipping is one of those things that bites, and it bites hard."

Ins and outs

Keller's knowledge of cargo, terminals and the needs of businesses that deal with them, is very deep, said Bob Uyeda, president of Tetra Design Inc., which did design work for Pier 400.

Less successful have been his efforts on the political front, particularly important at the largest port on the West Coast that happens to be near a community with a raft of well-connected families.

"Larry is a guy who, by nature, is not particularly comfortable dealing with a frequently contentious community," said one source. "In many respects it's not his job, but in other respects it is."

One of his biggest battles was luring the China Ocean Shipping Co. line from the Port of Long Beach. Keller succeeded, but the effort resulted in a lengthy lawsuit with the Natural Resources Defense Council. The fight ended in a March 2003 settlement with the NRDC that had port officials agreeing to invest $60 million in environmental improvements.

It was not his first run-in with the community.

Maersk's 1999 agreement to relocate from Long Beach to the new Pier 400 terminal at the Port of L.A. had community activists enraged.

In September 2001, while the Maersk facility was under construction, a member of the San Pedro and Peninsula Homeowners Coalition, wrote to District Attorney Steve Cooley expressing concerns about the relationship between the port director and his former employer.

Noel Park, president of the coalition, expressed similar concerns in letters to Chick.

In a February 2002 letter to Cooley, Chick expressed concern about "several actions that may indicate violations of laws and/or state regulations" at the port.

Early last year, in a letter to Park that was copied to Chick, Cooley said, "As there is insufficient evidence to indicate Mr. Keller violated any criminal conflict of interest statute, the Public Integrity Division is declining to initiate an investigation into the matter. Whether Mr. Keller violated any Los Angeles City ethical rules or regulations is not for our determination."

Things may change.

"The responses were appropriate at the time they were given," said Richard Doyle, director of the bureau of fraud and corruption prosecution at the District Attorney's Office. "However, there have been new revelations that caused us to look at the allegations again, in the context of a larger investigation."

He said prosecutors began incorporating information from the letters last year, before City Controller Laura Chick's audit of the Port.

Larry Keller

Organization: Port of Los Angeles

Title: Executive Director

Born: Vallejo, 1945

Education: B.A. in anthropology, San Francisco State University

Most Admired Person: His father, Rex Keller

Hobbies: Reading, cycling, camping, spending time with family

Turning Point in Career: Getting into the shipping industry in 1973

Job History: Regional manager and executive, Maersk Inc., from 1970s to 1996; Chief Operating Officer, Port of L.A., 1996; Interim Director, Port of L.A., 1997; Executive Director, Port of L.A., 1997

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