Tuesday, November 10, 2015

Port Canaveral CEO John Walsh Forced To Resign

PORT CANAVERAL, FL – In a 4-to-1 vote on Wednesday, Port Commissioners and Port CEO John E. Walsh agreed that his last day as Canaveral’s chief executive officer would be January 21, 2016.

“During this transition, we will continue to provide our business partners with the excellent customer service for which Port Canaveral is known,” said Port Chairman Jerry Allender.

Walsh has served as CEO since March 2013. He began his tenure with the Port Authority in February 2011 serving as Deputy Executive Director of Infrastructure, Construction, and Real Estate.  

The agreement came after a lengthy discussion regarding Allender's motion to terminate Walsh's contract effective immediately.  "Issues have been discussed over an extended period of time with no resolution, no positive changes being made," Allender said before he made the motion.

"I've been a supporter of John Walsh, he's been the CEO for two-and-a-half years," said Commissioner Tom Weinberg during the Commission meeting. "He had a strong first year. Then into the second year, I started seeing some issues that caused me concern in terms of how he handled people and some of the projects that we had ongoing ... I've talked with John about these things. I feel that every effort has been made, and yet his failure became worse, particularly in the last three months. I've grown increasingly concerned, and in the last couple months, became convinced, that he has become unsustainable in this role."

"John called me two weeks ago and told me that Chairman Allender had asked for his resignation and that I concur," Weinberg continued. "I told him that he absolutely needed to resign and that I had lost confidence in him. At that time, he took no responsibility for his behavior and blamed his reactions on the actions of others."

"In a meeting over a week ago, he agreed to resign before today's meeting," said Weinberg. "Now, true to form, he's changed his mind again and has not resigned. I want to be clear, it is not my desire to embarrass anyone publicly. I would prefer that John resign and leave graciously as possible. However, he's not done that, leaving no choice but to have a public discussion on a motion to fire him."

"In recent years we have enjoyed positive community support in a number of ways," said Weinberg. "That support has been compromised by John's reckless, aggressive, and critical behavior. It will take a long time to recover from where we are today in our community. A unique skill set is required for a public agency CEO. It's not easy. It's tough. He can have a great business skill and a lousy public relations skill. Not many people have it all. And we can see the deficiency. In addition to strong administrative skills, they have got to have those core values of integrity, judgment, good communication, respect for their community is paramount. Our charter is state law, under which we serve, provides that Port district are ultimately the people we are responsible for. Some of those who we serve, community and business leaders and members of the general public have been treated badly. And in some cases, even with contempt by our CEO. It's inexcusable. It's totally unacceptable. And that's why I support Chairman Allender's motion."

Despite the concerns expressed by Allender and Weinberg, Commissioner Hank Evans continued to support Walsh in his role as CEO.

"Tom, I have to say, you rated John in June on this sheet, that's three months ago. You gave him: Leadership functions - "Outstanding; Communications - "Outstanding"; we can go on and on," Evans said regarding Commissioner Weinberg's employment evaluation of Walsh in June. "But basically, Tom gave John an excellent evaluation for employment. He also recommended a 7% raise for his salary. So I think that is important to know."

Weinberg defended his change in position by pointing out that Walsh's remarks about the Brevard County Commissioners and rail opponents occurred after Walsh's evaluation in June.

Evans was also concerned that a change in leadership might have an impact on the Port's credit rating. "If we fire John, there would be a tremendous amount of uncertainty and we are going to the market for financing right now," said Evans. "If they increase the interest rate one percent on the $90 million, that's $13.5 million on a 15-year loan. So this decision that you make today could cost this Port millions and millions of dollars because you are unhappy with John and John didn't do what you wanted."

"81% of our revenue comes from cruise," said Commissioner Bruce Deardorff. "So you certainly want to listen to what these guys have to say ... I got a call this morning from Karl Holz, who is the President of Disney Cruise Line ... He was quite upset about what's happening. He has a meeting here in two weeks with John regarding new opportunities for the Port and Disney. And he would certainly like John to be here at that time. I mention these things simply because 81% of our revenue comes from cruise, so 81% of our customers are very happy with our Port director. That's not to say that the issues you've raised are not a problem and has fractured this Board, which I truly regret that such a thing could happen."

"I talked to the cruise lines," replied Allender. "I talked to Holz this morning. I assured them that there was more to it than just some ill-timed statements being made. That there were ongoing issues that have never been resolved. I said [to the cruise lines], "I am sure that you would agree that if you had employees who were given many opportunities to correct deficiencies but never did, and only got worse, that you would take a hard decision." They agreed."

"Not only are there outside issues, there are internal issues," continued Allender. "As I recall, when we decided to terminate Stan Payne, the cruise lines called several of the Commissioners and told us how great he was. But they only knew part of the story." Allender then looked out into the audience and said, "The people, you only know part of the story. Probably, some of us know different stories up here."

After the Commissioners had finished speaking, Walsh read from a prepared statement:

Commissioners, I've enjoyed my years of service at Port Canaveral. And I'm sure you'll agree my contributions have substantially improved both the physical port and its overall business operations today. As well as set up great future expansion opportunities both in progress and still yet to come. I appreciate the support of the Commission has given me. Thank you for the opportunity extended to me to serve this community and the Port Canaveral staff for these years. The Port is better in many ways compared to when I started in both of my roles here and the staff is prepared to carry things forward.

As you know, we have recently engaged in what I thought was positive and productive discussions regarding the potential terms for mutually agreed upon severance package to be provided to me in exchange for my resignation. The date we talked about is January 21st, 2016 and I still have a willingness to submit that resignation for that day. And I offer, for the transition of this Board, to continue working so that this Port's business can carry on.

We have not reached agreement on the terms and language of the severance agreement. I was handed a severance agreement after the Cove workshop meeting last Friday. I wanted to seek an attorney because it released my federal rights. I have 21 days under the federal rights in order to have an attorney review that agreement. The first appointment I could get was yesterday afternoon. I took that and the attorney disagrees with and would like changes. That was expressed to Harold from her and we have requested that Harold look at red-line versions of that. I requested that you put this off for two weeks until there was a mutual agreement. You chose to do it in a poor manner.

Allender then interrupted Walsh. "Whoa! In what kind of manner?"

"I would say it is in a poor manner to drag someone through the mud in the process, sir," replied Walsh.

"Then why didn't you individually call us instead of sending an email at 10 o'clock last night?" Allender asked.

"Because I was responding to an email from [Port Canaveral attorney] Harold [Blistline], sir," replied Walsh.

Walsh later returned to the rest of his prepared statement:

Because as you know, I believe in transparency and openness in my leadership at the Port. I am providing this letter to document the current status and assure that there is a public record in these discussions so that my status is clear - I remain the CEO of Port Canaveral and am continuing to faithfully and diligently serve. If we are unable to reach the terms of mutual agreement, I enthusiastically remain in employment and do not resign. However, I have offered to in an acceptable severance agreement.

My energy and excitement for Port Canaveral has not waned. I am fully prepared to continue as CEO absent a severance agreement, but I negotiated in good faith, and I have rights under federal law. I simply ask Harold to work with the attorney who could do so this afternoon to give him some red-line comments on items that were improper in the agreement. That these terms outline my willingness to stay until January 21st during transition remained on the table and I have expressed that to each of you in the email.

I will continue to work hard and assist in the smooth transition on the January 21st date at which point I will resign and depart Port Canaveral under the terms of that mutually agreed upon severance agreement. At that time, I will wish you great continued success. As the greater community is relying on the five of you and I'll ask that you keep growing this special asset that is so important to Central Florida.


Weinberg highlighted the following issues he felt were problems about Walsh:

1. Walsh called the Economic Development Commission of Florida's Space Coast "Worthless"

"It started with a memo to the director of the Economic Development Commission in the county, Lynda Weatherman," said Weinberg. "It was a very, very harsh memorandum criticizing her individually, criticizing the policies of the EDC board, saying that they were basically worthless and that Brevard County had blight and wasn't a good place because of their inaction."

2. Walsh called Brevard County Sheriff's Office staff "cops being bullies"

"We asked the Sheriff, or John asked the Sheriff, to provide security, asking him to come in for a meeting," Weinberg said. "There seemed to be some real interest and maybe a commitment to do that change over from what was a small police department that was experiencing problems here.

Then, after that, for some reason he changed his mind, he began to obstruct the negotiations and the execution of what was an approved contract - approved by a super majority of this Board. He even referred at one point to Sheriff's staff as, and I'm going to quote because I consider this ugly: "Cops being bullies."

Then, he sent an audit letter to the Sheriff. His CFO, because I checked, did not know that letter was going out - he saw it when we saw it. There was no necessity for an audit that would have been expensive. You don't normally audit another governmental agency that are partners in an effort - the word "partnership" is used in the contract with the Brevard County Sheriff.

For the record, I have received zero complaints about his force, the work of his people, and their performance. And frankly, we've saved money in the process."

3. Community Relationships

"There's a lot of people here from Merritt Island I see," Weinberg said as he looked into the Commission meeting's audience. "I know who you are. I know why you are here. You're here because your interested in the issue of rail - and you have every right, and every legitimate right, to be interested. You work here, you live here, you love here. And you're important. And we are going to listen to you. Eventually, we will have to make a decision - it may go in your favor, it may not, I don't know, I'm not clairvoyant to be able to tell that. But I can assure you that I'm not going to criticize you publicly and I value the right that you have to do that. 

John Walsh has not done that. He's used terminology - everything from like "dogs chasing moving automobiles" to "Your kids couldn't even make you happy" to "Luddites" (I had to look "Luddite" up. I didn't know what it was). That kind of corrosive rhetoric continued.

And then, in an email to sitting Commissioner Andy Anderson who was probably the one very pro-business guy that might have supported this Board in terms of the resolution that Commissioner Barfield brought up. John referred to other Commissioners as "untimely cowards" in a written email. That email has been released.  You've seen Andy reference it during the hearing. Again, that kind of name calling has only tattered the reputation of this Board to a point that I have never seen it - never seen it."

4. Rail Through Cape Canaveral Air Force Station

"The General, and the team that are here today, I can tell you, there are people that I can trust on that team that I've known for a long time that have laid a foundation for what could be a good way to go forward.

But I'll tell you. There's a memo - and it doesn't date back very many months - that basically said, "We don't want you, we don't want your proposal, we don't like the fact that you've partnered with people, it's un-doable, it'll take longer, and under no circumstances do we want to hear from you on this."

Ladies and gentlemen, that was less than four months ago. And they'd been working on this for two years. I think the General has been working on it longer than that. And I think that it is a proposal that very much appeals to me.

I asked John on two separate occasions, "I want you to do everything humanly possible to go through the Air Force route because its less disruptive and also because it is less expensive. It just makes sense. It's the right way to do it."

He was very reluctant about that. And literally, I almost had to force John to take a meeting with that team. The team presented today. And he eventually did. And when I heard from somebody who was in there later, was that Commissioner Allender showed up and re-directed his attention in the right direction. So we've had passive resistance (and grotesque resistance in my mind) from the beginning. And in an email, an internal email, he referred to that team as "carpetbaggers." I'm offended, I'm tired of it, and I think it's time we did something about it."

Image Credit: Port Canaveral

Originally published September 24, 2015