Audit Exposes Litany of Shady Dealings by Agency Running D.C. Area Airports
Friday, November 02, 2012 - 07:55 PM
The agency that operates Dulles International and Reagan National Airports and the $6 billion Silver Line rail project engaged in unethical hiring and questionable contracting practices and its officials accepted lavish gifts in violation of the agency's own policies – all enabled by a “culture of favoritism” and lacking internal checks – according to an audit released Thursday by the U.S. Department of Transportation’s inspector general.
The audit detailed questionable dealings at the Metropolitan Washington Airports Authority from January 2009 to June 2011. During that period, MWAA awarded 190 contracts that exceeded $200,000 but only 36 percent were awarded with full and open competition, the audit said. These contract awards failed to comply with MWAA’s own contracting manual and were inconsistent with the intent of the Airports Act of 1986, the audit said.
MWAA’s hiring practices were also criticized. “In some cases, senior officials abused MWAA’s student program to hire employees who were not students, using personnel documentation that falsely showed student status. MWAA’s lack of oversight also resulted in employees with known criminal convictions working at the Authority in sensitive and management positions for more than a year,” the audit said.
While the audit did not name names, it named positions. For instance, MWAA’s Vice President for Human Resources hired two relatives to work at the agency and then denied it. The vice president, Arl Williams, resigned in advance of the audit’s release.
While Williams’ individual behavior was troublesome, the problems at MWAA also resulted in structural deficiencies.
"According to MWAA’s ethics code, MWAA employees may not hire, supervise, or work with family members. However, MWAA lacks controls to detect and prevent these prohibited relationships… which makes it difficult to determine whether the relationship would constitute nepotism…” the audit said.
MWAA’s vice president for information and telecommunications, George Ellis, received two tickets to the 2009 Super Bowl among other expensive gifts from a contractor in clear violation of established MWAA policy. Ellis was fired in the spring.
In another case mentioned by auditors, a former board member, Mame Reilly, was hired by MWAA CEO Jack Potter to fill a vaguely defined position for an annual salary of $180,000. Reilly stepped down after a public outcry but was paid a year’s severance. Neither Reilly nor Potter was mentioned by name. None of the contractors who received lucrative no-bid contracts was named, either.
The 51-page report is loaded with examples of contracting practices that, while not explicitly illegal, raise serious questions about decision making at the powerful agency. One unnamed former board member received 16 no-bid contracts. The MWAA board of directors was not consulted about any no-bid contracts that totaled $6 million dollars.
The DOT auditors closed their report by issuing twelve recommendations while acknowledging that MWAA has already taken steps to overhaul its policies and put in place internal checks.
At a press conference Thursday afternoon, Potter and MWAA board chairman Michael Curto addressed the audit’s findings, promising to work to regain the public’s trust while defending their record in handling the 23-mile Silver Line project.
“We are gratified that the final report acknowledges the actions we have taken since the May Interim Report, as well as our ongoing initiatives, to bring greater transparency and accountability, efficiency, and integrity to our operations and governance,” Curto said.
“We are extremely transparent,” said Potter, referring to the rail project. “There is definitely a firewall between the toll road and rail project and the authority.”
“There is work to be done,” added Potter. “I see it as my job that we restore the trust in this institution through very solid policies. I’ll be embarrassed if two years from now these same things are a problem.”