"Denver leaders to meet on airline deal"

Tuesday, August 17, 2004

City leaders to meet on airline deal
Closed-door session will address illegal pact with Lufthansa
By Kevin Vaughan And David Kesmodel
The Denver (CO) Rocky Mountain News


Denver City Council members and Mayor John Hickenlooper are scheduled to
huddle behind closed doors today to discuss the illegal 2000 deal to
give Lufthansa German Airlines an $850,000 break on landing fees.

An audit released this month uncovered the deal, which occurred without
City Council approval in violation of Denver's charter.

Today's meeting comes as some council members are openly questioning a
proposal to ask them to approve the agreement retroactively.

"I don't see how we can make it legal by passing something after the
fact," City Councilwoman Kathleen MacKenzie said. "That baffles me. It's
a different council. The money's been spent. I don't see a remedy for
fixing it."

City Auditor Dennis Gallagher uncovered the handshake arrangement during
a routine audit of Lufthansa's operations at Denver International
Airport.

Former Mayor Wellington Webb convinced Lufthansa to begin a nonstop
Denver-to-Frankfurt flight in 2001.

The city also agreed to pay a portion of Lufthansa's landing fees during
its first three years of operations, a bill that came to $857,042,
according to the audit. The money was transferred from the city's
general fund to the airport.

Federal regulations prohibit airports from providing direct subsidies to
airlines.

The arrangement was never written into a contract and never approved by
the City Council as required by the charter.

An e-mail was sent to City Council members in May 2001 - months after
the deal was agreed to - detailing the arrangement. However, several
council members contacted by the Rocky Mountain News said they did not
recall having been informed of the agreement.

An aide to Webb said he was out of town Monday and unavailable for
comment.

City Attorney Cole Finegan, who took office in 2003, has begun work on
an ordinance that, if passed by the council, would approve the original
deal on landing fees.

Airport spokesman Steve Snyder said Monday that DIA officials believe
the economic incentive provided by the city to Lufthansa was no
different from others that Denver has offered businesses.

The Denver-Frankfurt flight provides a $90 million annual economic
stimulus to the Denver metropolitan area, he said.

The matter is scheduled for discussion among Hickenlooper and council
members at a closed-door meeting today. And Wednesday, Vicki Braunagel
and Turner West, the acting co-directors of aviation, are scheduled to
appear before the City Council's economic development committee to
explain the deal.


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************