Today the Seattle Times has a lengthy front page story about undisclosed business deals Councilmember Kevin Wallace had with GNP Railway while also advocating for the B7 East Link alignment. GNP desired to run freight and passenger trains in the BNSF corridor.
While prodding the Bellevue City Council last fall to study possible use of an abandoned rail corridor for a Sound Transit light-rail line, Councilmember Kevin Wallace was negotiating an extensive business relationship with a short-line railroad that wants to run trains on the same route.
He and his father, Bob Wallace, signed a nonbinding agreement in December to invest in GNP Railway and help raise $30 million for expansion.
Wallace Properties Development, a Bellevue-based developer of commercial properties, also agreed in a “memorandum of understanding” with GNP that the councilmember would hire brokers to sell preferred stock, invest $500,000 of its money and manage land acquisition and development of passenger stations, possibly with shops, offices, industrial space and homes. Kevin Wallace is president of the development company.
The Wallaces signed the GNP agreement the same week Kevin Wallace explained in a Seattle Times guest-opinion column why it made sense for the City Council to spend $670,000 to study whether Sound Transit should put its light-rail trains on the old freight corridor.
Because this is a blog, I can speculate a bit more than the Seattle Times can, and this is my own opinion: I think the Bellevue B7 study work basically offers free corridor information particularly pertinent to the business deal between GNP and Wallace. It smacks of using city resources to save GNP/Wallace planning money in the same corridor.
Wallace should have recused himself from these votes, but if he had, they would have ended up tied at 3-3. This could be part of why Aaron Laing (another B7 supporter) is running for Bellevue City Council this year, despite the fact that the council already has a majority – with a 5-2 split for B7, Wallace could take a slap on the hand and safely recuse himself from these votes.
The real kicker? As far as I’m aware, Bellevue doesn’t have a law prohibiting conflicts of interest for the city council.