"San Bernardino agency may seek law firm to review airport settlement"

Tuesday, September 13, 2011

AIRPORT: Agency may seek law firm to review settlement
BY KIMBERLY PIERCEALL
The Riverside (CA) Press-Enterprise


The public agency overseeing San Bernardino International Airport will
consider getting a second opinion on a questionable legal settlement between
it and companies affiliated with the airport's developer Scot Spencer in
2008. 

At its regular Wednesday meeting at 3 p.m. at Loma Linda City Hall, the San
Bernardino International Airport Authority will consider issuing a request
for proposals from independent auditors to analyze the settlement that gave
Spencer's companies a new $550,000 loan and credits worth $440,000 to cover
unpaid rent and loan payments after airport management admitted fault in
leasing hangar space to two companies at the same time, including one
affiliated with Spencer. 

A June 30 civil grand jury report questioned the validity of the legal
settlement and the haste with which the airport admitted fault, and
recommended the agency seek an outside opinion from an independent auditor. 

If the request is approved, proposals are expected to arrive by mid-October
with the chosen firm to be hired by the authority at its first meeting in
November. In order to be chosen, the law firm couldn't have represented any
of the authority's member cities and San Bernardino County since Jan. 1,
2001. The selected law firm would also be barred from being involved in any
future litigation involving the settlement. The panel to interview and
choose the law firm would be made up of members of the San Bernardino city
attorney's office, San Bernardino County's counsel, the managers of the
authority's member cities and San Bernardino County and two of the
authority's members. 

Lewis Brisbois Bisgaard & Smith LLP, the authority's longtime legal counsel
that authorized the original settlement, would evaluate the proposals, be
involved in interviews and eventually draft the agreement with the chosen
firm, according to the draft request. 

When the airport double-leased hangar space in 2008 and Spencer couldn't
move in, he said two of his companies lost lucrative business with another
firm, Unique Aviation, that wanted to fix up and lease one of his planes to
give to the Democratic National Committee . A DNC spokesman has denied the
group ever commissioned a plane from Unique Aviation or heard of Spencer. 

Unique Aviation is an investor in other Spencer companies. 

The airport agreed to settle 48 days after it signed the lease with Norton
Aircraft Maintenance Services, a company Spencer started. Spencer's SBD
Aircraft Services had contracted with NAMS for maintenance work on the
aircraft, a 1973 Boeing 727-227 that the county assessor's office has said
has no value and which Spencer has owed $16,559.20 in unpaid taxes from 2009
and 2010. 

In the staff report for Wednesday's meeting, the agency's longtime legal
counsel Tim Sabo wrote that the authority, "avoided what could have become a
costly lawsuit," that may not have allowed a settlement for rent credits and
a loan.

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