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Airline investments off-limits to Allegheny County Airport Authority board | TribLIVE.com
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Airline investments off-limits to Allegheny County Airport Authority board

Tribune-Review
| Friday, September 21, 2018 1:00 p.m
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Allegheny County Airport Authority board members can no longer invest in airlines, and those that have must divest or resign.

The board voted Friday to update its 10-page ethics policy to bar authority board members from investing in airlines.

Board members Robert Lewis and Jan Rea, who both invested in startup airline OneJet, abstained from that vote, authority solicitor Jeffrey Letwin said. Rea announced she was abstaining because she had an investment in an airline. The rest of the seven members voted in favor.

The board then voted to require the board members who have already invested in airlines to divest by the next board meeting Oct. 19 or step down from the board. All board members including Lewis and Rea voted in favor of that item, Letwin said.

The decision to update the authority’s ethics policy was made after a discussion between County Executive Rich Fitzgerald and authority board chairman David Minnotte, said Bob Kerlik, airport spokesman. Minnotte has not returned numerous calls for comment about investments in airlines and was not available after Friday’s board meeting.

The new clause also prohibits authority employees from investments as well as other activities “that may compromise, or that may appear to compromise, the independent exercise of judgment and the performance of work in the best interests of the authority, the airlines and concessionaires serving either Pittsburgh International Airport or Allegheny County Airport and the public,” the policy stated.

Asked by reporters after the meeting whether he would divest, Lewis declined to comment, saying the topic was not important. Letwin said Lewis had either divested or was in the process of divesting.

Rea plans to divest by the next meeting, she told the Trib after the meeting.

“There’s a process to legally divesting; it just can’t be done overnight,” she said. “I’m fine with it.”

Rea and her husband, Donald, invested in OneJet in June because the airline was planning to launch private flights to Naples, Fla., where the couple has a winter home, she has said. Rea no longer expects the airline to launch that service, she said Friday.

Lewis and Rea must submit signed letters saying they divested by the next meeting, Letwin said. Letwin does not plan to ask the seven other board members whether they have invested in airlines, he said.

“I wasn’t going to go around to each board member and say, ‘You know you’re not supposed to invest in the airlines anymore, did you?’ They know. They know the policy,” Letwin said.

No board members included investments in airlines on their financial disclosure forms for 2017. State law requires public officials to disclose private investments on the their forms if they hold more than a 5 percent stake in the company’s assets or debt, Rob Caruso, executive director of the Pennsylvania Ethics Commission, has said.

Neither Lewis’ nor Rea’s investment met that threshold, to the best of his knowledge, Letwin said. Asked how much Lewis invested, Letwin said he did not know. Lewis did not turn in his 2017 form, due May 1, until Aug. 22.

Letwin was also a non-voting board member for the OneJet board of directors, an airline spokeswoman told the Trib in December.

The authority granted a $1 million incentive to OneJet in exchange for 10 new routes. Last month, it sued OneJet seeking to reclaim $763,000 . The airline launched nine routes but last month was down to just two and has now suspended service completely.

The board in April 2016 voted unanimouslyto allow authority CEO Christina Cassotis to grant incentives to airlines up to any amount without a board vote. Two months later, Cassotis signed the $1 million OneJet incentive agreement using state gambling revenue. At the time, it was the largest incentive the authority had ever given an airline.

Cassotis, in an email from Kerlik, declined to comment on the new policy.

Since the OneJet incentive, Cassotis granted authority incentives of $3 million to British Airways for London service; up to $1.46 million to Qatar Airways for cargo service; $800,000 to WOW Air for Iceland service; $500,000 to Condor for seasonal Germany service; and up to $560,000 to Caissa Touristic for two round-trip flights between Pittsburgh and Shanghai that flew last month.

Such incentives, which are larger and more frequent than the authority has historically awarded, was one reason for the policy, Letwin said.

“(Such a policy) was not really ever viewed as necessary,” Letwin said. “I think the only thing that caused reconsideration is because we’re giving them these incentives that now have a greater impact on the whole relationship with airlines because the incentives are more significant.”

Theresa Clift is a Tribune-Review staff writer. You can contact Theresa at 412-380-5669, tclift@tribweb.com or via Twitter @tclift.

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