A federal review of the Metropolitan Washington Airports Authority has found that the agency does not have adequate checks on how it awards contracts or pays for travel and that the financial disclosures required of its board members do not reveal enough about potential conflicts of interest.
In the report, the inspector general for the Transportation Department highlighted travel and meal expenditures. One board member, for example, was reimbursed $238 for two bottles of wine bought during a meal. In another instance, some board members spent $4,800 on three dinners for themselves and their guests. In a third case, a board member bought an airline ticket to a conference in Prague only 10 days before the trip, costing the MWAA $9,200.
The problem, the inspector general said, is that the MWAA has no policy to provide limits for business-related board travel expenses.
The 18-page draft report, which did not identify board members by name, comes after congressional leaders called for an audit of the quasi-public entity, which has 1,400 employees and a nearly $2 billion budget but is not subject to the same oversight generally faced by airport authorities elsewhere.
The MWAA oversees Reagan National and Dulles International airports as well the construction of Metrorail’s new Silver Line, a 23-mile extension that will expand the rail system to Dulles and into Loudoun County.
The MWAA, like Metro, falls into a gray area when it comes to oversight. Both receive significant government funding and are run by government appointees. But both serve several jurisdictions and are not subject to many of the requirements that govern state or federal agencies.
The airports authority, the report said, has a “culture that is largely unaccustomed to external audits and inquiries by the accountability community.”
The airports authority has been clashing with Virginia Gov. Robert F. McDonnell (R) over funding for the $6 billion Silver Line project. McDonnell has threatened to withhold $150 million in funding for the second phase of the project unless the authority’s board eliminates a labor-friendly contracting incentive. But the board, which is scheduled to meet Wednesday, has shown no sign of being willing to remove the provision.
Transportation Secretary Ray LaHood stepped in a few weeks ago to try to bring the parties to an agreement but failed to conclude a deal.
After Tuesday’s briefing, LaHood said he would soon appoint an accountability officer who will report directly to him to “ensure that MWAA’s policies and practices have additional oversight and meet high standards of ethics and fiscal responsibility.”
The report goes on to say that “gaps in transparency have further undermined MWAA’s accountability by obscuring key information from the public.”
The inspector general’s report criticizes the board and its staff members, saying they were “reluctant to provide access to key documents and grant us private interviews with board members.”
The MWAA’s “policies and procedures related to financial disclosures, travel and transparency are not sufficient to ensure fiduciary and ethical responsibility in the board’s expenses and activities,” according to the report.
Jack Potter, the new chief executive of the MWAA, said that the airports authority was “committed to confronting every single concern identified by the inspector general.”
Potter, addressing the meal costs, said those expenses were “very exceptional” and in “no way represent what happens on a day-to-day basis.”
The DOT’s inspector general’s office said it started its audit in June 2011 and is continuing to look into “concerns of multiple allegations of mismanagement and misconduct.” A final report from the inspector general is expected this fall and a more detailed look at the oversight and funding on the second phase of the Silver Line is expected from the inspector general early next year.
Tuesday’s report criticizes the MWAA for entering into a $100,000 contract with the law firm Jenner & Block “despite the fact that an immediate family member” of a board member worked for the firm.
The report does not identify the board member. But board Chairman Michael Curto said after the briefing that the report refers to his wife, who works at Jenner & Block as a director of administration.
Although the relationship had been previously disclosed, Curto did not “refrain from participating in matters related to the firm when the issue arose,” the report said.
“At minimum, this created the appearance of a conflict of interest that may have been avoided had the board member exercised better judgment and fully followed MWAA’s ethical procedures,” the report said.
Curto said that he was not chairman at the time the decision was made to hire Jenner & Block for a legal opinion on appointing new members to MWAA’s board. He also said he was not involved in the decision to hire the firm.
The report also took issue with MWAA’s contracts, noting that the authority did not conduct “full and open competition” in $226 million worth of contracts, or more than 60 percent of its contracts from 2009 to 2011.
The inspector general’s office said it interviewed 12 board members, the board secretary and lawyers for the board and attended monthly board and committee meetings.