Offering former port Executive Director Larry Keller a lucrative consulting contract raised hackles in the L.A. City Council, but the deal is getting a more sympathetic hearing among those familiar with the port's workings.
Keller, who left under a cloud on Sept. 17, was signed to a one-year, $180,000 contract by the board, underscoring what some said was the difficulty in filling senior management positions in specialized industries.
"Two of the most difficult (types of) senior-level jobs to fill require very specific, arcane knowledge or intimate knowledge of politics, constituencies and power brokers," said Don Spetner, senior vice president of global marketing for Korn/Ferry International, a Los Angeles executive search firm. "These are jobs like a school board head or a port director. There is such a limited pool of qualified candidates."
Finding a new chief for a Fortune 500 company can be far easier, because consumer products or manufacturing companies operate on many of the same principles.
Robert Eckert, for instance, was chief executive of Kraft Foods Inc. before his appointment as chief executive of Mattel Inc. Lew Gerstner was chief executive of Nabisco Group Holdings Corp. before taking a similar position at IBM Corp.
Like coaches in professional sports, port executives generally move from city to city on the strength of the resumes they built in their particular industry. Keller was considered for the executive director's position at the Port of Oakland earlier this year.
The Los Angeles Board of Harbor Commissioners last week voted 4-0 to approve Keller's contract, with port officials citing his experience as executive director for the past seven years and as an executive for two decades at international shipping firm Maersk Sealand.
"The commissioners and (interim Executive Director) Bruce Seaton expressed the belief that Mr. Keller's skills in these areas would be very valuable to the port," said Theresa Adams Lopez, a port spokeswoman.
The port has embarked on a search for a new executive director, a process that is expected to take months. It is unclear whether Keller will remain after his successor found. "The port can terminate the contract at any time for non-performance," said Lopez.
Also in doubt is whether the City Council votes to review the deal.
While Seaton had been running the day-to-day operations as chief operating officer, Keller traveled around the world to maintain business relationships with steamship lines. As executive director, Keller met with department heads weekly to discuss agendas.
Under the consulting deal, Keller's responsibilities will mirror those of the port's marketing staff: maintaining and soliciting business in the Asian, Mexican and Pacific Northwest markets, from where the port generates nearly all its business. In addition, he will keep Seaton in contact with dignitaries who want to visit the port and provide guidance to port officials in advance of business development trips.
Keller will no longer be directly involved in negotiating tenant agreements, which he oversaw as executive director. While his duties will be similar to those of the port's marketing director, Keller's $180,000-per-year contract will pay him far more than the nearly $127,000 earned by Jim MacLellan, director of marketing.
With other executives on extended stress leave, port officials earlier this year had to persuade longtime property manager Brian Dorney to come out of retirement to serve as a consultant to that division.
Seaton has said he intends to seek the executive director's post on a permanent basis, but his background in facilities rather than dealmaking is seen as a handicap.
The commission's efforts to get Keller back to the port come a month before port Business Development Director Al Fierstine, who has been on paid stress leave since July 21, was set to retire.
Fierstine conducted most of the negotiations with port tenants, making numerous trips each year to Asia and other locations to drum up and maintain business contacts.
Keller had been under fire for the handling of contracts at the port and had testified before both the county and federal grand juries looking into city contracting procedures. Critics claimed that the consulting contract was offered to keep him silent about the grand jury investigations.
"If there is any institutional memory, probably a lot of it rests with Mr. Keller," said Noel Park, president of the San Pedro and Peninsula Homeowners Coalition. "If Mr. Keller is a disgruntled ex-employee, he may divulge certain information to the grand juries that under other circumstances he would not."
Port officials rejected those allegations. "The thing on that is he has already testified," said Lopez.
The probe of the port, among other city agencies, could make it harder to fill the position, according to Jerry Oldani, owner of Bellevue, Wash.-based executive search firm, Oldani Group.
"When that kind of thing is sensationalized or politicized, people want to see some resolution so they won't walk into a hornet's nest where they won't have a positive influence," said Oldani, who conducted the search for the Port of Oakland's new executive director.
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