By Erica C. Barnett

Earlier this year, the Seattle city auditor released a report that raised serious concerns about ethics and culture at the Seattle Department of Construction and Inspections, which issues building and construction permits, conducts most of the inspections associated with building and construction, and enforces the city’s landlord-tenant laws, including the rental housing inspection ordinance, among many other responsibilities.

The audit, conducted at the behest of City Council land use committee chair Dan Strauss, was supposed to focus on the byzantine permitting process itself—a frequent source of complaints from developers and homeowners trying to keep projects on schedule.

But as the auditors talked to SDCI employees, they kept hearing similar concerns about potential ethical issues within the department: Managers with second jobs advising developers on the permitting process in nearby cities. Supervisors who pushed employees to approve or expedite projects for big developers, particularly those represented by the Master Builders Association, while allowing smaller projects to languish. Employees with spouses, children, and other close relatives working in the department—including at least one whose family owns multiple rental properties across the city.

In all, about 30 percent of the people the auditor’s office interviewed raised concerns related to ethics or equity in permitting, prompting the auditors to expand the scope of their report.

“There are reasons why you prioritize one project over another, but there should be a good reason, it should be transparent, and everyone should be able to see it—and it’s more opaque [in SDCI] than then we have liked,” City Auditor David Jones told PubliCola. “All we can say to SDCI management is, ‘Some of your employees, a decent number of them, have these concerns—so we should do something about it.'”

The auditors didn’t find any wrongdoing or legal violations by SDCI staff, who are required by the city’s ethics code to avoid conflicts of interest and report potential conflicts to their supervisors. (Wayne Barnett, the head of the city’s Ethics and Elections Commission, said he was unaware of any cases in which an SDCI employee was accused of breaking the ethics law).

However, the audit did find a “lack of consistency” and transparency in how permits get processed and prioritized as well as a lack of internal ethics policies for issues specific to SDCI, which could lead to ethical issues going unaddressed.

“As part of our audit, we did not investigate these concerns to the extent necessary to substantiate them,” the report notes. “SDCI should consider… an internal ethics policy to address situations that are unique to SDCI’s work environment” along with ongoing ethics training.

Many SDCI employees told auditors they believed the Master Builders Association—a trade association for local developers—gets special treatment and access to the department, while less-established developers and builderd, including many small and BIPOC businesses, have little direct access to SDCI staff.

PubliCola obtained hundreds of pages of the auditors’ interview notes through a public disclosure request.

“The major players have been in power for decades, and they can call the SDCI Director, Mayor, and Council members to get their projects expedited,” an interviewer summarized one staffer’s remarks. “Those favored by the existing power structure (older white men) can take advantage of workarounds for the permitting process, to the detriment of those with less experience (who may also be bipoc communities).”

During a land use committee meeting last week, SDCI director Nathan Torgelson said the department meets with many groups, including the Seattle Metropolitan Chamber, the Downtown Seattle Association, and affordable housing developers. “We, for a long time, met with BIPOC developers who are going through the design review process on how we can better serve that constituency,” Torgelson said.

One developers’ attorney confirmed that big developers, who pay significantly more in permitting fees for their large, complicated projects, can “get things done faster if you actually talk to the right people” in the department. In an environment where permitting, design review, and other delays can slow housing projects by months or years, this kind of access prevents projects from being “glacial,” the attorney said.

However, this also means that a homeowner trying to add two units to their property may have little recourse when a code reviewer sends over correction after correction, adding time and expense to a routine project. “What they need to do is get rid of the codes that are unreadable and get rid of the procedures that are not written down anywhere,” the attorney continued. “As we get into the middle-housing stuff, there’s going to be a lot of  small builders out there that are not going to have any idea” how to navigate the process.

SDCI employees brought up this disparity in their interviews with the audit team, noting that when established developers get to jump to the front of the line, that can have race and social justice implications. “Those favored by the existing power structure (older white men) can take advantage of workarounds for the permitting process, to the detriment of those with less experience (who may also be bipoc communities),” one employee told the auditors.

“If you are a large developer, you know the game, the rules, what managers and directors will bend to you to get your project through,” another said, according to the audit notes. “If a developer that knows the system well needs a 15-minute phone call, but a bipoc first time applicant needs a 4-hour meeting, why should the person needing extra help be charged more [for the extra time]?”

“The big developers know and feel comfortable contacting SDCI leadership and asking for their projects to be completed more quickly,” another staffer said. “SDCI leadership will often ask staff to prioritize certain projects over others based on these interactions. …SDCI staff know that those monthly meetings [with the Master Builders Association, or MBA] ‘do not end well for staff,’ because they are often asked to change something based on MBA requests.”

SDCI employees told PubliCola that managers frequently told them to expedite permits based on no specific criteria, bumping larger builders above dozens of other projects. When this happened recently, one employee they told their manager that “’in the interest of equity, we’re supposed to go through our queue [in order], and this person is 98 down in. Why are they getting fast tracked?’ These conversations get killed,” the employee said

The auditors didn’t attempt to substantiate the issues SDCI’s employees raised related to compliance with the city’s ethics standards, many of which would be hard to prove. “We really wanted to avoid being in a position where we were evaluating whether something was ethical or not, because we’re not experts in the code, and we don’t have authority to do so,” assistant city auditor Melissa Alderson, who co-authored the report,” told PubliCola.

But interviews with current and former department staff, along with the notes from auditors’ interviews with staff, show a widespread concern among staff that many of the department’s longstanding practices are out of touch with modern ethical standards.

For example, many SDCI employees have second jobs in development, housing, or consulting—a practice that’s allowed under the city’s ethics code, as long as a city worker’s outside employment doesn’t directly conflict with their government job. This includes running a firm that helps private developers sail through the permitting process in other cities—as long as the SDCI employee doesn’t do business in Seattle, the city has allowed this kind of outside employment.

“The city’s ethics code says secondary employment is allowed at the city, but [it also says] that when your ability to remain impartial comes into question, like when a reasonable person would question your ability to remain impartial, then that’s when you need to have a conversation with the ethics office, with your supervisor, and figure out what needs to occur, whether that’s disclosure or removing yourself from that situation,” Alderson said.

SDCI employees brought up several examples of managers, including division-level supervisors, who hold this kind of second job. Andy Lunde, the emergency response manager in SDCI’s engineering services division, owns a company called Lunde Code Consulting that teaches classes on the state building code in the Washington Association of Building Officials’ code accreditation program.

“To address potential conflicts of interest, I maintain strict separation between my professional activities and consulting services, and the roles held by my father and brother at SDCI,” Lunde said, a reference to the fact that his father, Al Lunde, and his brother, Larry Lunde, both work in SDCI’s building inspections division.

Al Lunde did not respond to questions, and SDCI’s communications manager, Bryan Stevens, sent a warning to staffers not to talk to reporters shortly after PubliCola started reporting this piece.

Lunde’s boss, engineering services director Andy Higgins, has his own firm—CA Higgins Companies, Inc.—that, according to Higgins’ LinkedIn, helps “local governments effectively enforce, and private entities creatively comply with, the construction codes adopted in Washington State and the surrounding Cascadia Region through Plan Review, Code Consulting, Management Consulting and other Professional Services.” Higgins is also the president of WABO.

Contacted by email, Higgins said his firm “has actually been dormant for many years,” adding that he used to conduct plan review for “a few” cities outside Seattle.  “I have also provided technical support for design professionals unsure of how to address a specific building code issue. I have not obtained permits on behalf of anyone in those jurisdictions,” Higgins said.

Several SDCI employees mentioned other close familial relationships among SDCI employees, including at least two married couples who work in the department, which some employees argued could give them an advantage when seeking promotions or reassignments.

Al Lunde has another business that directly intersects with SDCI’s mission: He’s a landlord who owns several buildings across Seattle, including single-family houses, a six-unit apartment building, and an apartment complex in West Seattle that has been the subject of several complaints from tenants. (Members of the Lunde family own other rental properties in and around Seattle, including vacant and formerly vacant buildings that have also elicited complaints from neighbors over junk storage and alleged break-ins).

Over the years for instance, tenants at Lunde’s building in West Seattle have complained about black mold, broken sinks, holes in the ceiling, missing smoke detectors, and other issues, prompting the city to issue multiple citations. Although publicly available inspection records don’t provide details about how most issues at the West Seattle complex or a smaller building in Ballard were resolved, it’s worth noting that SDCI oversees landlord-tenant law, including citations and inspections in response to tenant complaints.

SDCI does not have its own code of ethics, and employees aren’t required to disclose “the appearance of conflict or impaired judgment for non-financial matters,” according to the audit report. Nor does the department have an anonymous channel for employees to register ethical concerns. Instead, the department follows the city’s general ethics code, which requires certain managers and supervisors to file annual financial disclosure statements. According to the auditor’s report, “over half of the managers and one director had not completed the form.”

Documents obtained through a records request show that 44 SDCI employees had filled out the form, a simple, four-item checklist that asks about financial interests inside the city, including real-estate ownership. A review of responses showed that all but 16 of those 44 answered “no” to all four questions indicating that most had done no business with the city in the last year and did not own any real estate inside the city, including a primary residence.

Strauss, the council member who originally ordered the audit, said the ethical concerns that emerged in the report “were a surprise to me.” Given the lack of ethical requirements specific to SDCI, he said, “there may be employees engaged in behavior that I, Dan Strauss, would not engage in because I try to stay 10 feet about the ethical line … behavior that, to an everyday person, seems unethical, but is not [technically] unethical because there is not a policy in place.”

The audit report includes 11 recommendations, including several that touch on the ethical concerns raised by employees and people outside the department. (While most of the recommendations are about making SDCI’s processes clearer, faster, and more transparent, several of the process-related recommendations overlapped with the issues employees brought up as potential ethical concerns.)

Those recommendations included adopting an SDCI-specific code of ethics; addressing racial disparities in permitting and barriers to access for small developers, including those who don’t speak English or require in-person services; providing more transparency into how the department prioritizes projects; and giving applicants more opportunities to talk directly with reviewers instead of interacting exclusively through the department’s official online system.

SDCI director Nathan Torgelson told PubliCola, “SDCI has already reviewed and revised several policies related to the Financial Interest Statement process and are working with the Office of Ethics & Elections on additional staff trainings,” which—according to the audit—have not taken place for several years.

“Also, in the next couple of months we will be moving forward on planned customer service enhancements and feedback tools.” At a recent meeting of the city council’s land use committee, Torgelson said. SDCI has also published its prioritization criteria on its website—something several employees recommended in their conversations with the audit team.

Strauss, who chairs the land use committee, said he was encouraged by the department’s response to the audit, but wanted to see progress on some of its promises. “If a nail salon can’t get a tenant improvement permit, that means we are creating a vacant storefront, that means we are putting someone’s personal capital on the line, that means that commerce is not occurring,” Strauss said. “So it is important for groups across the city to have that access and that there is not preferential treatment.”