MWAA: Even Worse than We Thought

The interim Inspector General’s audit of the Metropolitan Washington Airports Authority, issued earlier this year, was scathing, documenting the abuses of a runaway board of directors. The final report, issued yesterday, is even more devastating. You know it’s bad when the title of the report — “MWAA’s Weak Policies and Procedures Have Led to Questionable Procurement Practices, Mismanagement, and a Lack of Overall Accountabilty” — reads like a yellow journalism newspaper headline.

The report, prepared by the U.S. Transportation Department’s Office of Inspector General, documents that the abuses permeated the organization’s management as well, especially in the areas of hiring practices and procurement. Call it trickle-down corruption. Key conclusions:

  • First, MWAA’s contracting policies and practices are insufficient to ensure compliance with the Airports Act and the lease agreement between DOT and MWAA. The Act and the agreement require the authority to competitively award contracts over $200,000 to the maximum extent practicable. However, for the period we reviewed, MWAA used categorical exceptions to limit competition for almost two-thirds of MWAA’s contracts that exceeded $200,000. … These weaknesses are exacerbated by ineffective contract management and oversight and a lack of adequate procurement integrity policies to ensure impartiality when awarding and administering contracts. …
  • The code of ethics and related MWAA policies and procedures in place at the time of our audit lacked the rigor needed to ensure credibility and the integrity of management and employee decisions. … The Authority’s existing ethics-related procedures have been insufficient to detect violations of anti-nepotism and gift provisions and to identify potential conflicts of interest. For example, the Vice President of Human Resources indirectly supervised relatives, despite the code’s explicit provision prohibiting such relationships. In addition, employees regularly accepted inappropriate gifts from an MWAA contract — including Super Bowl tickets, travel, and accommodations worth almost $5,000. …
  • MWAA’s hiring and compensation practices lack oversight and accountability. MWAA’s standard hiring process for filling vacancies or creating new positions has not been formally documented as an official policy, which has allowed senior officials to place candidates into new or existing positions without job descriptions, competition, or completed background checks. 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. In addition, MWAA managers awarded excessive salaries, unjustified hiring bonuses, questionable cash awards, and ineligible benefits. …
  • MWAA’s policies and processes have not ensured accountability and transparency for activities conducted by its Board of Directors. … Without such controls, MWAA has not been able to hold its Board accountable to the same standards it holds its employees. Specifically, MWAA could not ensure that relatives and friends of Board members did not receive preferential treatment in hiring or contract.

Response from Board Chairman Michael Curto: “We take all the issues and concerns cited in the report very seriously and will respond to all of the report’s recommendations. We are examining today’s report with a particular focus on items that were not discussed in the Interim Report.”

Response from Governor Bob McDonnell: “Unfortunately, actions on the part of certain members of the MWAA Board of Directors, a general lack of transparency and accountability, and employee misconduct have jeopardized the public’s confidence in the Authority’s ability to ethically manage its critical assets and complete the Dulles Rail Project. The concerns that I have expressed over the past two years are, unfortunately, validated by the US DOT Inspector General.”

The governor said that he hopes that the seating of five new Virginia board members by November will “usher in a new era of leadership and governance.”

Time for follow up. Having turned up so many issues in its inspection of MWAA, the Inspector General’s office would be well advised to turn its attention to that other unaccountable interstate compact in the region, the Washington Metropolitan Area Transit Authority (WMATA). As documented by a recent Washington Times series, WMATA’s management deficiencies are even more manifestly evident than MWAA’s. Perhaps Rep. Frank Wolf, R-10th, the impetus behind the IG report, could push a bill through Congress requiring the Department of Transportation to take a look at WMATA as well.


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  1. DJRippert Avatar

    Gotta love the Imperial Clown Show in Richmond. The governor appoints bad eggs to the MWAA board. Then, the bad eggs are conformed by the General Assembly. When an audit finds that the bad eggs have misbehaved the Imperial Clown Show acts as if the bad eggs magically appeared on the board as if placed there by supernatural forces.

    Here’s a simple idea – there should be an elected member of the Imperial Clown Show in Richmond as a Virginia member of the board at all times. The same policy should also be followed for every college and university board of rectors, visitors, etc. One member can’t politicize a sizable board. However, that member would be responsible for reflecting the will of Virginia’s voter – taxpayers. And, if there is hanky-panky. or if the institution suddenly faces an “existential crisis” the elected official would be expected to explain to the people of Virginia just how that happened.

    As for a long look at WMATA – I think people are on very much the right track there.

    As an aside, is there any question about the board of the Virginia Port Authority and how the VPA managed to become a non-competitive, under-capitalized, visionless, money losing operation? Of course not.

  2. DJRippert Avatar

    Also, McDonnell appointed former Va Representative Tom Davis to the MWAA board some time ago. I believe he is Vice Chairman. Rep. Davis’ wife is running for Lt Governor.

    Where is Rep. Davis in this controversy?

    Stone silent?

  3. MWAA should fire all of its officers, and a grand jury should be impaneled.

  4. reed fawell Avatar
    reed fawell

    This sort of conduct seems to be on the rise. It’s as if something larger is in the air. Perhaps, the corresponding rise of the use of the word “Cronyism”, as its use relates to the word “Government”, is waving before us a big Red Flag.

  5. Both political parties should be against crony capitalism, albeit for difference reasons. But they embrace it; and the media ignores it.

  6. DJRippert Avatar

    Let’s see …

    In August, a Clown Show appointed board fired the President of the University of Virginia and then reinstated her 18 days later. Th bylaws of that board do not require a full meeting of the board before taking such action.

    The Virginia Port Authority Board, appointed by the governor, was gutted by Bob McDonnell after Gov McDonnell served 18 months in office. Now, another 18 months have passed with a new board and the Virginia Ports are deemed “unsustainable” by Connaughton. Meanwhile, New York, Savannah, Charleston and Baltimore all seem to be doing fine.

    The Commonwealth Transportation Board maintains the same population districts that it had in 1935, calculates no ROI for road projects despite being the prioritization body and is generally seen as a rubber stamp for the Secretary of Transportation. Members of the CTB are appointed by the governor with confirmation by the General Assembly.

    The MWAA is an interstate compact with board members appointed by the governments around Washington. Swirling in controversy, the MWAA has been the focus of great criticism – especially in regard to appointees from the Commonwealth of Virginia.

    I give up, guys. What does the Clown Show run properly?

  7. I see a pattern with most appointed board here. They are defacto government with little transparency and no accountability other than IG “reports”.

    Where it is MWAA or the UVA BOV – it’s clear that we have unelected folks running amok with virtually no accountability for their actions.

    DJ blames Richmond, aka the Clown Show and maybe he’s right when it comes to standing up these little fiefdoms to operate out of sight and mind from taxpayers until an IG or newspaper shines a light on the rats and they scatter.

    For the Chair to say “we take this report seriously” he’s throwing a virtual finger at the public. Did he not know of this egregious conduct before the IG report?

    he’s flipping citizens the bird and laughing his butt off.

    and we are chumps… we deserve this.. we ourselves could give a rats behind until someone gets caught …

  8. Cover Up Avatar

    The Audit was critical of the MWAA Staff not the Board. MWAA Staff and the Board have for years had a tense relationship. The staff not bringing 220 million dollars of contracts to the attention of the Board was not the Boards responsibility. The staff has a procurement policy that should have been followed. This had to be at the Direction of someone. Who could that be? Who is the only person that could direct contracts away from the Board? Answer, the CEO. So the Washington Post article claims CEO Potter was hired right around the time the audit started. OK, then he can only be blamed for things on his watch. The audit was critical of the hiring of a Ex-Board member one day after she resigned for health reasons. He too never advised the Board or anyone that he hired her in the middle of her Board term. She was paid $180,000 plus benefits for a 5 year contract. The audit says this was all done without Board approval once again. So they fired the employees who took trips and received gifts. Did the Board fire Jack Potter for 220 million in no bid contracts? Did they fire him for the hiring of the Ex Board member causing the Authority to pay her $180,000? I never heard Congressman Wolf or Governor McDonnell ask for his resignation. Do you find that strange? The Union Guy booked his plane ticket late and they wanted his head on a platter. This guy is the CEO and 220 million dollars of no bid contracts went out under his nose and he hired a Ex Board member to the tune of $180,000. Does anyone find this strange?

    1. You make a number of legitimate points. The focus has been on the board but the problems run far deeper. The newly constituted Board needs to start holding MWAA’s senior management accountable.

  9. I have reported many times that the cost of the Dulles Rail project appears to be about two times what it should be.—Silver-Line-overcost-report—Bruhns.pdf

    Now comes this US DOT audit report that shows one big reason for the Dulles Rail double price that I have noted. The audit reports that MWAA has been steering a large percentage of multi-award contracts to a contractor that apparently charges 1.3 to 3.3 times as much as other contractors.

    I submit that because of the size of the Dulles Rail project, the magnitude of the cost increase caused by this practice will crush the economy of this region for much of this century. I hope that the people who pushed for this rail project without regard to its cost, and our so-called ‘leaders’ and news media that covered up the double price of Dulles Rail (also known as the Silver Line) all these years, are proud of themselves.

    Maybe it is not too late to force Phase II of this project, at least, to be contracted properly and at a reasonable cost. Our government should also vigorously pursue the recovery of excessive payments that were made for Phase I.

    US DOT Audit Summary:

    US DOT Audit Report:

    From the top of page 14 of the audit report (page 15 of the pdf):
    “Over the past 8 years, MWAA awarded more than 80 percent of work under three groups of multiple-award contracts to a single contractor (“Contractor A” in table 2). However, the contractor’s rates were often higher than the other multiple-award contractors’ rates. For example, the contractor’s rates in a 2012 contract were between 28 percent and 234 percent higher. While MWAA may have had non-price related reasons for selecting Contractor A, this unbalanced distribution of work to a single contractor with significantly higher rates appears contrary to the purpose of multiple-award contracts and could further compromise MWAA’s competitive environment. ”

    And from further down that page:
    “In addition, MWAA allowed Contractor A to add job categories to a contract but did not offer the other multiple-award contractors the same opportunity. Thus, when MWAA ordered work related to those additional job categories, they were effectively sole source awards because only one contractor was able to accept the work. “

  10. well you have to ask – what is the purpose and mission of the board if not to direct staff including the CEO?

    who does the CEO answer to and I do not mean just on a per issue basis but for the full range of activities that are undertaken.

    who is responsible ?

    what this demonstrates is the fact that there is little transparency and virtually no real accountability until an IG shows up.

    it appears to me that the very structure of MWAA is intended to not have strong accountability.

    A big deal is made about a union guy – but look the other things
    going on – that’s not just a “union guy” problem. That’s a systemic organization problem IMHO of course.

    1. DJRippert Avatar

      LarryG swings and …. craaaack …. it’s a deep fly ball to center field. Going, going, gone. He’s hit it out of the park.

      “it appears to me that the very structure of MWAA is intended to not have strong accountability.”.

      That is exactly the problem. And who needs to step up and solve that problem?

      Our elected officials.

      There should be a sitting member of the General Assembly on the MWAA board at all times to represent the interests of the voter – taxpayers of Virginia. It might even be useful to have a sitting member of the Fairfax or Loudoun County Board of Supervisors on the board as well.

      The closest effort in this regard has been the appointment of former Congressman Tom Davis. And what does Tom Davis have to say about all of this.

      …. sound of crickets chirping ….

    2. DJRippert Avatar

      “A big deal is made about a union guy – but look the other things
      going on – that’s not just a “union guy” problem. That’s a systemic organization problem IMHO of course.”.


      That whole charade of mock indignation over a single European conference was anti-union politicization. Maybe Martire was a knucklehead, maybe not. However, his only known infraction was a slight lapse in judgement regarding a trip to an airport symposium in Europe. In the grand scheme of things, a minor point. However, it was that point which was seized upon by Jim Bacon, Bob McDonnell, Frank Wolf and the rest of the Tea Party brigade.

      Coverup and Bob Bruhns have done more to get to the core of this matter than all the bloggers, reporters and politicians added together.

      And yet – nobody is accountable for righting this ship. Frank “the cicada” Wolf will go back into hibernation starting Wednesday of next week. McDonnell is a lame duck. The Fairfax and Loudoun BoS’ seem to have become invisible. Our General Assembly members are asleep at the switch. Tom Davis has been blind, deaf and dumb.

      Wouldn’t it be great if some politician publicly said, “I want to be appointed to the MWAA board. I will take personal responsibility on behalf of all Virginians for the effective oversight of the critical Rail To Dulles project.”.

      Of course, that would require something unknown in Virginia politics – courage.

  11. What Dennis Martire — the “union guy” — did with his expense accounts would have been sufficient to get me, or anyone else, drummed out of Media General, and probably at a lot of other companies. But that was the tip of the iceberg. The bigger problem was his lobbying to get a Project Labor Agreement, which potentially could have cost tens or hundreds of millions of dollars. The critics’ indignation was real, not “mock.”

    Think of MWAA as a giant knot. How do you untangle a knot? You start picking at the loose thread. Martire was a loose thread. Loosening that loose thread led to all sorts of other loose threads. As we pick at those loose threads, now we see that the problems at MWAA are far bigger than Martire. It’s possible he was just emulating the corrupt organizational culture of which he was a part. In my 35-year journalistic career, I can’t think of a bigger scandal in Virginia

    The next line of inquiry is to dig into the contracting and procurement mess. As Bruhns points out, lax standards — and possible outright corruption — has cost tens, or even hundreds, of millions of dollars. As a frequent traveler through Dulles Airport, Don, you are paying the price through either higher charges/fees or diminished service. I would expect you want to dig to the bottom of it.

    You can decry “the cicada” if you want, but if he hadn’t pushed for the audit, none of this would have come to light.

    1. DJRippert Avatar

      I have no problem digging to the bottom of the MWAA problems. I’d also like to dig to the bottom of the Virginia Port Authority issues the CTB issues and the University of Virginia board issues.

      My problem with the cicada is that he’ll now burrow into the ground again. Then what?

      As for McDonnell’s new MWAA board members … McDonnell replaced almost the entire VPA board and yet the crisis persists. Connaughton recently declared the Virginia Port Authority to be unsustainable.

      And McDonnell is in his last year as governor. Then what?

      Yes, a professional union organizer appointed to the MWAA board by the governor of Virginia (and confirmed by the Imperial Clown Show) agitated for more union presence. What in God’s name would you expect?

      Where was / is the Senate Transportation Committee (15 state senators)?

      Where was / is the House Transportation Committee (22 delegates)?

      Virginia is the only state where the governor cannot serve two consecutive terms. It is one of only two states where judges are elected without any oversight by the state legislature. Virginia is rated as having the least competitive state legislature elections in the United States. It have one of the most stringent implementations of Dillon’s Rule.

      Translation: The normal checks and balances on the legislature are missing in Virginia. The General Assembly is all-powerful.

      So, where is our all powerful General Assembly with regard to these messes?

    2. James, I disagree with you about his participation in a PLA. Phase 1 has a PLA. It has been documented to save the project money. Why would he and all the other Board members vote to continue the use of a PLA if it was not beneficial. The “union guy” is just one vote on the MWAA Board. Why should his one vote matter? If the Board thought it was a bad deal, I’m sure he would not have had enough votes to get it passed. But the record shows it was 11-2 in favor of the PLA. Also you mentioned his expenses. What was wrong with his expenses? I never heard he had any problem with his expenses. I thought he booked his plane ticket late causing his plane ticket to be more expensive. Is this not correct? But my point is that 220 million of no bid contracts, hiring a ex-Board member to get her seat for $180,000, hiring your wife’s law firm for $100,000, hiring friends, relatives, Super Bowl tickets, trips, no-show jobs etc were NOT caused by this guy. They were caused by the people in leadership. the CEO, COO, Chairman, Vice Chairman, Procurement staff, other Board members. But the elected officials went after this guy with a vengeance . But I don’t see anyone saying anything about all of the above. I find it very political. I would like to see MWAA get cleaned up but they need to remove those in leadership in order to obtain the public’s trust.

  12. DJRippert Avatar

    Del. Joe May is the Chairman of the House Transportation Committee. He is from Loudoun County.

    Here’s what one anti – RTD group has to say about Del May:

    Where is Joe May indeed?

    Where are any of the Imperial Clown Show in Richmond?

  13. DJRippert Avatar

    Well, it seems that our friends in the state legislature are quite busy pre-filing bills for 2013.

    Here are the 374 bills so far:

    Ahh, the always useful “personhood” bill.

    Great. The port is a disaster, the biggest transportation project is a shambles, there is no ROI conducted for road projects and the state’s premier university is facing an “existential crisis”.

    But we do have the personhood bill teed up again this year.

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