- Washington Guardian - Thursday, November 8, 2012

It’s often been said that charity begins in your own backyard. Turns out, accountability and oversight might want to start there, too.

For decades, the federal government has partnered with the Metropolitan Washington Airports Authority to run the two major airports in the nation’s capital, Reagan National and Dulles International, without providing much oversight to how money was spent by the airports’ governing board or its employees.

A recent audit shows the consequences of that laissez-fare approach:

-Two-thirds of the contracts awarded by the MWAA were done without open competition;

-Former employees and Board of Director members often got side jobs paid by federal monies;

-Employees got free Super Bowl tickets from contractors they were supposed to oversee;

-And one contract awarded for $8 million in 1989 continues today at Dulles, having grown 1,700 percent through extensions of work having nothing to do with the project’s original scope.

Even on little things that should be in the area of expertise for an airport authority, MWAA let taxpayers down. For instance, board members often wasted hundreds – and sometimes thousands – of dollars by failing to buy discounted advance plane tickets, the inspector general found.

For creating a culture where wasteful spending and cronyism flourished, the MWAA wins this week’s Golden Hammer, a distinction given by the Washington Guardian to the worst examples of government waste, fraud and abuse.

MWAA’s ambiguous policies and ineffectual controls have put these assets and millions of federal dollars at significant risk of fraud, waste and abuse and have helped create a culture that prioritizes personal agendas over the best interests of the Authority,” the Transportation Department Office of Inspector General said in a recent report that captured the breadth of problems.

The D.C. area’s two major airports are owned by the Federal Aviation Administration, but since 1986 have been operated by MWAA under a lease agreement.  The organization pays the federal government $5 million each year, and in turn gets to keep profits from landing fees, concessions and rent from tenant stores at the government’s airports.  

Like all airports, MWAA receives grants from the federal government for specific projects, such as $977 million for the new Metrorail mass transit line to Dulles, or $154 million in 2009 for bag security screening programs.  Spokeswoman Kimberly Gibbs said federal grants account for less than two percent of MWAA’s revenue.

But investigators found the semi-governmental organization wasn’t subject to much oversight, and the organization’s board has been handing out plenty of perks, the IG said.

MWAA has not been able to hold its Board accountable to the same standards it holds its employees,” the inspector general said.  ”MWAA managers awarded excessive salaries, unjustified hiring bonuses, questionable cash awards and ineligible benefits.  For example, MWAA created a new position for a former Board member that included an annual salary of $180,000 for unspecified job duties, before ultimately terminating the position after public outcry.”

And investigators found that the board awarded “almost two-thirds of its contracts that exceeded $200,000 with less than full and open competition.”  In fact, five contracts each worth more than $200,000 were awarded without competition and without full approval of the board itself, watchdogs said.

Officials at the MWAA also hired family members and “regularly and frequently accepted gifts” from contractors, the IG reported, including two tickets to the Super Bowl in 2009.  Financial disclosure forms also went uncompleted, investigators found, leaving open the possibility that officials are benefiting financially from government work.

“These weaknesses raise questions regarding MWAA’s commitment to ensuring compliance with ethics requirements, especially for its most senior executives,” investigators said, finding that board members weren’t required to follow state ethics laws.

MWAA Chairman Michael Curto said at a press conference that the organization is taking the IG’s report very seriously.

“We are committed to strong oversight and internal controls and to making certain that everything we do going forward reflects the best practices of government and industry,” he said.  “We will use this report as a tool in expanding and enhancing our work to increase transparency, strengthen governance and build renewed public trust.”

Some contracts have ballooned under the board’s watch.  The renovation of Dulles Airport’s main terminal was started in 1989 and was supposed to cost $8 million.  But the project has now ballooned by 1,700 percent and is estimated to cost $147 million dollars.

Rep. Frank Wolf. R-Va., has introduced legislation to create a special federal position to provide oversight of the airport organization.

“The MWAA described in this report is not the MWAA created 25 years ago,” Wolf said.  “Something has gone terribly wrong in recent years as the board that governs MWAA spiraled into dysfunction.  MWAA must immediately implement all the recommendations detailed in the IG’s report so it returns to the authority we once knew.”

The scope of work that MWAA is responsible for has been expanding, including taking over construction of the Dulles Corridor Metrorail Project - the future Silver subway line in the D.C. area that will finally connect the city with it’s distant second airport.  That puts the airport organization in charge of a roughly $6 billion transportation project.

“As a public body with responsibility over two major federally owned airports and a multibillion-dollar public transit development effort, MWAA has been the subject of significant interest regarding the policies and practices of its management and Board of Directors,” the inspector general said.

Richard Skinner, a former inspector general, said IGs can’t be viewed as the first line of defense in federal oversight when it comes to major government undertakings, like the MWAA.  Instead, oversight needs to happen at every step of the process.

“You don’t award a contract then walk away,” he said.  “You have to budget for the oversight and the administration management of that contract as well.”

The Transportation Department said it would investigate MWAA’s problems.

“We are troubled by the report’s description of an organization that routinely failed to adopt and adhere to strong policies and procedures for its officials and staff,” the department said in response to the inspector general’s report.

The transport board was been trying to correct the problems since the IG first brought them to light.  But the IG said it wasn’t sure if the measures were working.

MWAA’s recent actions have not been independently assessed and remain to be implemented,” investigators said.

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