Three Southwestern Pennsylvania investors in OneJet are trying to force the in-limbo airline to liquidate its assets so they can be reimbursed. Which raises serious questions yet again for and about the Allegheny County Airport Authority.
OneJet suspended operations at the end of August. Not only was it reported that it owes hundreds of thousands of dollars in federal excise taxes, dating to 2015, it faces an authority lawsuit for failing to deliver the flights it promised at Pittsburgh International Airport.
The airline, which was designed to cater to business travelers, made the agreement in return for millions of dollars in public subsidies. The county Airport Authority sued in an attempt to recoup the lion’s share of a $1 million local subsidy.
More on that later.
As the Tribune-Review reported last Thursday, three local investors want to force OneJet into involuntary Chapter 7 bankruptcy. Vesper Capital LLC of Moon, Keith Kronk of Kronk Inc. and James and Debbie Campbell of Fox Chapel seek $4.8 million. (The Trib says Vesper is owed $4.5 million while Kronk and the Campbells are owed $150,000 each.)
An attorney representing the parties says they have not been able to recoup their investments directly from OneJet. Kirk Burkley also tells the Trib he expects the list of investors seeking to be repaid to grow.
Former PNC Financial Services CEO Jim Rohr is reported to have invested in OneJet in early 2016. He and Pittsburgh Steelers minority owner Thomas Tull invested $500,000.
When OneJet halted operations in late August, it said it planned to resume booking flights on Oct. 1. That never happened. And three weeks later, OneJet not only still isn’t flying, it’s not talking.
Thus, this evolving saga continues to raise questions about how the Airport Authority does business. It has given millions of public dollars in dubious, market-perverting subsidies to entice airlines to fly to and from Pittsburgh.
Worse, and in alarming fashion, it even has played subsidized airlines against subsidized airlines. In simply stunning fashion, at least one of the deals, with freight carrier Qatar, even incentivized failure.
At the core of this behavior is Airport Authority CEO Christina Cassotis, empowered by a board of directors that has given her sole power to grant such subsidies.
That, of course, raises the question of checks and balances. In this case, there appear to be none.
And that raises the ancillary issue of due diligence. How are subsidy recipients vetted?
In the case of OneJet, that appears to not have been done very well. After all, its federal tax problems date to the year before it was given a total of $3 million in public subsidies.
Now, back to that Airport Authority lawsuit.
The Post-Gazette reported Friday that OneJet never responded to the authority’s lawsuit seeking to recover $763,000 of its $1 million subsidy.
That now gives the authority the legal right to file for a default judgment without a court hearing, the agency’s attorney told the P-G.
The attorney, Allen M. Lopus, tells the newspaper it could either try to collect the money immediately or go after OneJet’s assets. Which, considering that any semblance of a functioning concern doesn’t appear to exist – even its one-time legal counsel has bailed, the P-G says — could be like getting blood from a turnip.
Which only reinforces the need for a thorough, outside and independent review of how Cassotis, and what now appears to be a puppet board, operate.
It is the state Attorney General’s Office, not the state Auditor General’s Office, that, per a legislative warrant, has auditing power over the Airport Authority.
In the name of sound public policy, it’s past time for Attorney General Josh Shapiro to step in.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
