Three former United Airlines executives engaged in a bribery scheme involving renovations at Newark airport. They accepted bribes from a maintenance and construction company to secure a restroom renovation project.
In exchange they received renovations to their own homes, electronics and jewelry and total bribes over $1.2 million. They steered the business to the most expensive contractor, who submitted a two page bid in comparison to dozens of pages for competing contractors. Then the employees inflate contract change orders to help the company recoup its bribe expenses.
These employees each face sentences up to 20 years in prison and fines up to $250,000, and they’ll be sentenced in April 2024.
According to United Airlines,
This is an unfortunate situation where the defendants are charged with the intent to defraud United of its right to their honest services. We have been fully cooperating with the investigation and will continue to do so.
The Port Authority of New York New Jersey operates Newark, as well as New York JFK and LaGuardia airports and Newburgh Stewart, Teterboro and Atlantic City.
United Airlines lost CEO Jeff Smisek in a corruption scandal involving Newark airport and the Port Authority, where PANYNJ’s chairman sought a special flight from Newark to his vacation home from the CEO and this was provided in exchange for favorable treatment of United’s agenda in front of the agency.
Ironically, the Port Authority of New York and New Jersey was created during the progressive era as a structure that would reduce corruption and increase government efficiency. It’s a poster child for both corruption and inefficiency. The ‘Fort Lee lane closure scandal’ became public and dragged down Governor Chris Christie after toll lanes on the upper level of the George Washington Bridge were reduced from 3 to 1 for four days, causing massive traffic back ups and delaying police and emergency vehicles – this was to punish one of Christie’s political opponents.
Once the FBI’s investigation into Bridgegate uncovered corruption involving United Airlines and its CEO, the United board had to replace Smisek. Jeff “Changes You’re Going To Like” Smisek was the driver behind Newspeak at the airline like ‘Project Quality’ to cut billions in expenses out of the product. The airline only rid itself of Smisek, replacing him with then-board member Oscar Munoz became CEO, because of a criminal investigation.
And Munoz, lacking airline experience, brought Scott Kirby (being terminated as President of American Airlines) into United as President. The expectation was that Munoz would become executive chairman and Kirby CEO, but this was delayed by the David Dao dragging incident the following spring.
Ultimately though the best thing that could have happened for United Airlines and for its customers (and employees) was for Smisek to get caught up in corruption at Newark airport, to bring in a short-term CEO who helped to improve employee morale and who green lit product improvements, and for that new CEO to bring in the current one.
At the end of the day, though, it’s Newark so of course there were kickbacks. And it’s Newark rather than Atlanta or Detroit, so the kickback scheme came out.