WASHINGTON -- An entrepreneur who went to jail for his role in the
Braniff III bankruptcy has attracted the attention of the
Transportation Department's enforcement unit for operating
allegedly illegal charters for sports teams through a firm called
Ascend Aviation.
The enforcement unit wants to impose a fine of up to $1 million
on Scot Spencer and permanently bar him from the aviation
industry.
Also cited was George Warde, a former president of American,
Continental and Airbus who was Spencer's partner. The DOT said
Warde resigned in October.
The parties have not yet filed their responses to the
allegations, but the case has been assigned to a DOT administrative
law judge.
Spencer has been involved in a number of compliance issues over
the years.
By 1990, the DOT was so wary of Spencer that it tried to bar him
from working at Braniff III by demanding affidavits from its
investors that he would have nothing to do with the airline.
They provided the affidavits, but Spencer remained involved with
the airline before and after its 1991 Chapter 11 filing. After
Braniff III ceased flying in 1992, he was convicted of bankruptcy
fraud and served 51 months in prison.
Before his conviction, he became embroiled in another
enforcement case at the DOT over a charter firm called The Travel
Group, dba Republic Air Travel.
His latest enterprise, Ascend, owns 13 727-200 aircraft acquired
from American, according to the DOT. Ascend has no airline
certificate, but the enforcement unit claims Spencer effectively
operated it as a charter air carrier by leasing four aircraft to
Ryan International, a charter line in Wichita, Kan., and requiring
that they be operated exclusively for Ascend.
In a complaint initiating the enforcement action, DOT staffers
alleged Spencer arranged charter contracts last year with Major
League Baseball's Los Angeles Dodgers, San Francisco Giants and
other teams and charter customers, skirting the rule that certain
charter deposits be protected by bonds and escrow accounts.
The complaint said Spencer and Ascend did not operate as agents
of Ryan but "contracted directly with the public to provide air
transportation ... as the principal responsible for providing that
service," a violation of the Federal Aviation Act.
Ryan accepted a cease-and-desist order and paid a penalty to the
DOT last year for its role in the arrangement of the allegedly
illegal flights.