The Airport Authority mess grows (again)
It was revealed a year ago that the state Legislature had re-upped a provision that redirects $12.4 million annually in state gambling proceeds – that is, gamblers’ losses – to the Allegheny County Airport Authority.
The authority had been receiving the money for a decade. But without the reauthorization, the transfers would have ended with the close of the 2018-19 fiscal year.
The money is designed to boost economic development efforts at and around Pittsburgh International Airport (PIT) and to reduce costs to airlines that operate at the Findlay Township facility.
Said Airport Authority CEO Christina Casottis at the time, to the Post-Gazette:
“It’s incredibly important because it’s a validation of the strategy. It’s a validation of what we’re doing and how we’re using the money.
“The fact the Legislature made that choice, to me, is a sign that they are comfortable with how we are administering those funds and what we are using them for,” she said.
One can only wonder — a year later and millions of dollars wasted on a number of failed exercises in bribing airlines to fly in and out of PIT and being played for suckers – if legislative leaders and rank-and-file lawmakers feel the same way.
That same news story also laid bare Cassotis’ economically unsound and market-perverting practice of using public dollars to bribe airlines:
“(Airlines) are taking risks when they add service to an existing market or to a new market,” she said. “They are expecting communities everywhere to step up and show their commitment by making an investment.”
But, as the Allegheny Institute has repeatedly noted, there are, or should be, strict parameters governing such “investment.” That would include providing a place for airlines to operate their planes and for customers to park their vehicles.
Public dollars should not otherwise underwrite these airlines. The market system demands that those seeking to do business, having gauged demand, risk their own money in pursuit of profit. The only role the public should have is buying tickets.
Despite 2018’s multimillion-dollar failures at attempting to command the marketplace, Cassotis has indicated she pretty much plans to stay the course. Which should – but likely won’t – prompt state legislators to review the Airport Authority’s performance, if not reconsider how those gambling dollars are being used and abused.
Sadly, however, the activities of Cassotis and the Airport Authority board of directors cry out for a more formal and deeper review. And that should be an audit, if not a full investigation, by the state Attorney General’s Office, which, by statute, has auditing oversight.
That need was driven home like a truck through a brick wall last week when 51 investors in the now-liquidating OneJet airline filed a lawsuit in Allegheny County Common Pleas Court.
That lawsuit, first reported by the P-G, seeks to recover more than $10 million from OneJet. But it also makes serious allegations about as damning as they can get.
Among them being that David Minnotte, chairman of the Airport Authority board, himself was a shareholder in the failed airline. It previously had been reported that two other board members, including the vice-chairman, Robert Lewis, were investors.
That clear conflict prompted the authority to bar such behavior. Why that wasn’t the order of the day to begin with has baffled good-governance critics.
Minnotte and Lewis are among those being sued, as well as several officials of OneJet.
The authority, which is not named in the investor lawsuit, itself is suing OneJet in an attempt to recover $763,000 of its $1 million subsidy, part of an overall $3 million subsidy package.
The investor lawsuit not only alleges that OneJet officials told investors Minnotte and Lewis “could secure favorable treatment of OneJet with the Airport Authority,” it also alleges the pair “touted the fact that the Airport Authority had ‘approved’ OneJet’s operations, as a marketing tool to solicit investments in OneJet.”
The authority’s solicitor, Jeffrey Letwin, told the P-G that the lawsuit’s allegations are “an absolute bunch of garbage.” But it’s the same Letwin who steadfastly holds that it was not, and is not, a conflict of interest for board members to have invested in OneJet because they never directly voted on anything concerning the airline while holding those investments.
Sound public policy begs to differ.
And sound public policy also demands a deeper look into the growing mess that is the Allegheny County Airport Authority. It’s past time for Attorney General Josh Shapiro to get involved.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (email@example.com).