United Airlines has agreed to pay the Department of Justice
a $2.25 million civil penalty and David Samson, former chairman of the Port
Authority of New York and New Jersey, has pleaded guilty to bribery charges,
both in connection to an airline route United has admitted to establishing at
Samson’s behest.
The case involves a twice-weekly route between Newark and
Columbia, S.C., which United operated between Sept. 2012 and March 2014.
Referred to, according to the DOJ, as “the chairman’s flight” by Samson and
others, Samson used it 27 times between October 2012 and January 2014 to travel
from his work to his home in South Carolina.
Samson, who faces up two years in prison per his plea
agreement, stepped down from his position at the port authority in early 2014.
Jamie Fox, who the DOJ says was working at the time of the
scheme as a United consultant, is accused of working with Samson to pressure
United executives to offer the Newark-Columbia route. Fox is charged with
conspiring to commit bribery in relation to the case.
The DOJ made no specific reference in its public statements
Thursday to Jeff Smisek, the former United CEO who abruptly stepped down last
September as a result of the corruption investigation.
According to the DOJ, Samson used as leverage in the
“chairman’s flight” scheme a proposed agreement between the port authority and
United for construction of an aircraft maintenance hangar at port authority-controlled
Newark Airport.
United executives commenced the route to satisfy Samson, the
DOJ said.
“United personnel understood that Samson wanted the route
reinstated for his own personal use and that failing to reinstate it could
adversely affect United’s business interests,” the DOJ said. “United’s decision
to reinstate the route departed from its standard process for adding a route to
United’s network, which included forecasts on how the route could be expected
to perform, multiple levels of review and presentation to a group of senior
United executives.”
The route ultimately lost money, just as an earlier United
analysis showed it would, the DOJ said.
As part of its deal with the DOJ, United has agreed to
cooperate with the U.S. Attorney’s Office and to report to the office on its
compliance efforts for two years. United also must continue to implement an
enhanced program designed to prevent and detect corruption.
In turn, the agreement acknowledges that United provided
thorough and timely cooperation to the DOJ in its investigation.
The DOJ commended United for conducting an internal
investigation into the matter, improving its Ethics and Compliance Office and
for “separating from certain employees involved in the conduct relating to the
Newark-Columbia route.”
Mark Anderson, then the airline's senior vice president of
corporate affairs, and Nene Foxhall, then its executive vice president for
communication and government affairs, resigned along with Smisek last September
amid the probe.
In a statement on Thursday, Oscar Munoz, who replaced Smisek
as United’s CEO, said that earning public trust is critical to the carrier’s
success.
“We will continue to act with the utmost integrity in
everything we do, ensuring that we are always conducting business ethically and
with the best interests of all of our stakeholders in mind,” Munoz said.