FAA dismisses investigation into Hartsfield-Jackson use of funds

People are seen at Hartsfield-Jackson International Airport domestic terminal in Atlanta on Tuesday, April 19, 2022.  (Arvin Temkar / arvin.temkar@ajc.com)

Credit: arvin.temkar@ajc.com

Credit: arvin.temkar@ajc.com

People are seen at Hartsfield-Jackson International Airport domestic terminal in Atlanta on Tuesday, April 19, 2022. (Arvin Temkar / arvin.temkar@ajc.com)

The Federal Aviation Administration is dismissing an investigation into alleged misuse of airport funds largely during the administration of former Atlanta Mayor Kasim Reed, saying it found insufficient evidence to support the allegations.

The probe dates back to July 2019 when the FAA informed the city that it was examining Hartsfield-Jackson International related to its use of airport funds. Part of that investigation involved how the city paid a portion of its outside legal bills connected to the federal investigation of City Hall.

The FAA also sent the city, which owns and operates Hartsfield-Jackson, subpoenas for invoices paid with airport funds from late 2013 through mid-2018.

The FAA issued an order of dismissal this month saying a financial review found no violations related to the allegations, and it is closing the docket.

“Having completed its investigation and the financial compliance review, this Office finds insufficient evidence to support the allegations,” the FAA said in its order of dismissal.

A spokesman for Mayor Andre Dickens said the city is “encouraged by the findings.”

The move lifts a pall that loomed over Hartsfield-Jackson from the FAA investigation, which was one of a number of recent federal probes into city government.

“They cleared us,” said Hartsfield-Jackson general manager Balram Bheodari. “We were found to be in full compliance.”

FAA regulations prohibit the use of airport revenue for anything but an airport’s capital or operating costs, in order to keep local governments from using airports as cash cows and funneling away their money. The prohibition also ensures that federal airport grants support airport projects and not other uses and violating the rules could come with huge penalties.

The FAA looked into whether the city unlawfully diverted airport revenue, whether Atlanta improperly withheld documents from investigators and whether the city failed to report amounts paid or services provided by the airport to other parts of city government.

The FAA’s initial notice cited a 2018 article by The Atlanta Journal-Constitution, which found records did not provide a clear picture of how the law firms divided and segregated their work. Descriptions of work on legal invoices were vague.

The AJC article found airport funds were used to pay for some legal work by law firms representing the city. A 2016 subpoena from the U.S. Attorney’s Office in Atlanta sought numerous city records, including some related to airport contracts.

The FAA previously said the city acknowledged invoices totaling more than $100,000 were wrongly paid from airport funds, and the city reimbursed the airport for the payments.

In its investigation, the FAA sought additional legal invoices and documents from law firms paid by the airport. The airport produced hundreds of pages to clarify how its funds were spent.

The city asked its outside attorneys for assistance to show that the work they were paid for with airport funds was “aviation related.”

The city said it provided FAA documentation from those attorneys with additional detail on the work to “resolve any uncertainty and demonstrate that the legal fees paid from airport revenue were for airport legal matters or were otherwise reimbursed by the City’s General Fund.”

The FAA is not the only federal agency that has investigated the Atlanta airport. In 2019, the U.S. Securities and Exchange Commission opened an inquiry into the city’s use of airport revenue. The SEC said this week it “does not comment on the existence or nonexistence of a possible investigation.”

Separately, the FAA is reviewing the city’s handling of minority contracting requirements for airport construction contracts, according to the airport. The U.S. Attorney’s Office probe into City Hall, meanwhile, has resulted in several indictments, convictions and guilty pleas from contractors and former Reed administration officials.

Bheodari said the FAA also audited 48 Hartsfield-Jackson leases and agreements and found one, with the Atlanta Convention and Visitors Bureau, that the agency said should be revised to charge fair market value rates. He said before that determination, the ACVB decided to vacate its space in the terminal.

But Bheodari called the outcome of the FAA investigation into airport finances “expected.”

“The airport should be transparent,” he said. “We should be doing the right things. That’s a must.”