Sunday, June 25, 2017
Official: Newport News airport still isn't taking audit seriously
By Reema Amin
The Newport News (VA) Daily Press
Transportation Secretary Aubrey Layne says Newport News/Williamsburg International Airport officials must understand they are still cut off from state funds and need to meet with him in an open session to discuss guidelines for restarting that cash flow.
On Thursday, the Peninsula Airport Commission adopted an $8.1 million budget that includes a capital improvements plan calling for $817,100 in state funds to help with projects. E. Renee Ford, the airport's director of finance and administration, said the commission plans to comply with all new rules and regulations that come with using that money.
Officials will revise that plan if they don't get the state money they anticipate, Ford said.
"Their budget is their budget," Layne said Friday. "They are still not authorized to receive any state funding."
Sandy Wanner, the airport's interim executive director, said the budget is just a plan "based on certain assumptions." If things change, he said, it will be amended.
Layne cut off state funds for the airport in January after the Daily Press reported about the airport paying off a $4.5 million loan in 2015 for startup airline People Express using local, state and federal taxpayer money. He verified the news reports with Department of Aviation staff, who said they found the airport had used state taxpayer funds to pay off the loan, in violation of a longstanding state policy.
He later ordered Virginia Department of Transportation auditors to look into the commission's finances. That audit, released June 2, found that former airport officials improperly used state taxpayer money to pay off the loan, were not transparent with the public and often skirted financial rules that governed the airport.
Auditors recommended that Layne ask the airport to pay the state back with all $4.5 million. Airport officials have said they are trying to recoup that money in some way, possibly through legal action. They haven't elaborated on what that legal action would entail and, as of Thursday, were still deciding what to do.
Layne must still make a final decision on what he will ask the airport to do. He said he's asked Attorney General Mark Herring to weigh in so his decision is within his powers and so that he is "being fair to the flying public."
Herring issued an opinion this month that said the loan guarantee was unconstitutional. Virginia State Police confirmed Wednesday that they are launching an investigation "into past business practices" at the airport. They were joined at the airport on Tuesday by investigators from the Internal Revenue Service and the U.S. Department of Transportation Inspector General's Office.
On Friday, Layne said the airport commission still hasn't set a date for an open meeting to discuss what needs to be done to restart state funding.
"They need to know this was very serious," he said.
Wanner said Layne's executive assistant contacted him two weeks ago requesting a meeting this summer. Wanner responded that "we will meet." He and the commission are trying to figure out a good date for a meeting in Newport News, potentially next month.
Layne said he had not heard back as of Thursday and is "glad to hear" the commission is trying to figure out a date. He wants the meeting to be in an open session — which Wanner said he also understood — because "I don't think there's anything the public shouldn't be privy to."
State lawmakers have adopted reforms that tighten oversight over state aviation funds and make it illegal to use those funds for an airline's operating costs through grants or credit enhancements.
"The commission knows that the audit identified serious concerns, the commission knows that the state wants the money repaid, and we're aware of that and we're working on solutions," Wanner said.
The airport commission fired its former executive director, Ken Spirito, after auditors reported he had used commission money for personal expenses, including car repairs. The commission has also adopted some new policies, including for travel and personnel. Wanner is also looking at the commission's procurement policies to make sure they are following state law.
Commissioners Sharon Scott and Rob Coleman said they're more than willing to meet with Layne and are waiting on a good date.
"I'm comfortable speaking for the entire commission — we are taking this situation very seriously," Coleman said. "I think you can tell by the time we are taking at each meeting, the special meetings and talking about how we are going to be moving forward, is the indication how seriously we're concerned not only with this audit and the situation with People Express, but the overall future of the airport."