During a 2011 dinner in New York, David Samson, then the chairman of the Port Authority of New Jersey, asked United Airlines executives for a favor: Would the company look into reviving a direct flight from Newark to Columbia, S.C., where he owned a vacation home?
A United executive said they would, but the idea was quickly rejected, according to court documents. The route was unprofitable, a United lobbyist allegedly told Samson, a close ally of New Jersey Gov. Chris Christie.
But after months of requests, and the delay of a Port Authority vote on United’s request for a maintenance hangar at Newark Airport, the giant airline buckled, according to the U.S. attorney’s office for the district of New Jersey. United revived the route and even tailored the flight to Samson’s preference to leave Newark at 6 p.m. on Thursday and return from Columbia early Monday morning.
The Port Authority approved United’s maintenance hangar.
“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,” according to a statement from the U.S. attorney’s office.
Samson, on Thursday, pleaded guilty to bribery charges and faces two years in prison, a major victory for prosecutors. Jamie Fox, the United lobbyist allegedly involved in the discussions, has been charged with conspiring to commit bribery; he has denied wrongdoing.
“This kind of case shakes public confidence in our institutions of government when people who are accomplished, and who have occupied so many positions of public trust, misuse their authority to get something for itself,” U.S. Attorney Paul J. Fishman said in a statement.
But United Airlines — and its employees — escaped largely unscathed from the federal probe. The airline’s parent company agreed to pay a relatively small fine, $2.25 million. (United Continental Holdings reported a profit of more than $7 billion last year, or more than $20 million a day.) The airline also agreed to report periodically on its compliance with ethics rules over a two-year period.
If United abides by those terms, it will not be prosecuted, Fishman’s office said.
“The agreement acknowledges United’s extensive, thorough, timely, and voluntary cooperation, including disclosing all non-privileged information regarding the conduct of its employees,” according to a statement from the U.S. attorney’s office.
In a statement, United said it “accepted responsibility for certain conduct” and would continue to improve its compliance, anti-bribery and anti-corruption program.
Such “non-prosecution agreement” are common in white collar cases, but have been often criticized for allowing companies to bargain their ways out of stiff penalties.
“If the government believes United engaged in criminal conduct, it is fair to ask why the company isn’t being charged and why the penalty that United will pay is so small,” said David Uhlmann, a University of Michigan Law School professor who spent 17 years as a federal prosecutor.
Prosecutors also didn’t go after any of the individual United employees who participated in the scheme. (The employees were not named in the court documents, but United’s chief executive, Jeff Smisek, and two other senior executives resigned in September amid the federal probe.) That is striking given that the Justice Department’s new policy, announced last year, that made prosecuting individual executives, and not just the corporation that employs them, a top priority for federal prosecutors, legal experts said.
Company executives could have reported the pressure it was receiving from Samson to law enforcement or internal compliance officials, legal experts said.
“It is seen as corrupt to cave into corrupt demands,” said Brandon Garrett, a law professor at the University of Virginia. “In some ways it is more important that a company like United have strong anti-corruption measures. If it is one public official, you can prosecute him, but he will never serve in public office again. It is more important to hold a company responsible.”
Fishman, the New Jersey U.S. Attorney, said in an interview that United’s cooperation in the investigation was extensive and that it did not appear that there was a pattern of corruption. “If you look at what happened, they did everything asked of them,” including turning over the results of an internal investigation, he said.
The case grew out of Bridgegate, a 2013 scandal in which Christie staffers and appointees were accused of working to create traffic jams, allegedly to hurt the mayor of Fort Lee, who had not endorsed Christie in that year’s gubernatorial campaign. The investigation into Bridgegate eventually expanded to include questions about whether United launched a flight from Newark to Columbia to benefit Samson.
United canceled the route, which had become known as the “chairman’s flight,” days after Samson resigned from his post. “As we move forward, continuing to earn and keep the trust of our employees, customers, shareholders, and the communities we serve around the world remains critical to our success,” Oscar Munoz, United’s chief executive, said in a statement.
A confidante of Christie, Samson was once one of New Jersey’s most powerful political players, having worked for both Democrats and Republicans, and serving as the state’s attorney general. The law firm he helped found, Wolff and Samson PC, is one of the most influential in the state. After Samson retired in 2015, the law firm renamed itself Chiesa, Shahinian & Giantomasi.
Micheal Critchley, an attorney for Fox, said in a statement the former United lobbyist did not intentionally seek to evade the law.
“Anyone who knows Jamie knows that he would never jeopardize his reputation by engaging in the behavior alleged in the indictment,” Critchley said in a statement.