March 7, 2019 - Atlanta - Senator Frank Ginn, R - Danielsville, looks over some of the eight multi-part amendments for the airport takeover bill. The Georgia Senate voted to approve a measure that would give the state control of Hartsfield-Jackson airport. Bob Andres / bandres@ajc.com

Federal auditors to review city’s spending at Hartsfield-Jackson

Atlanta officials are facing another potential challenge to how the city has conducted business at Hartsfield-Jackson International Airport, even as they try to tamp down a state push to take over the airport.

The Federal Aviation Administration notified the airport’s management on March 7 that its auditors will review seven years’ worth of financial records at the airport.

VIDEO: Previous coverage of this issue

Georgia's Speaker of the House is not yet on board with the plan.

Each year, the FAA audits a handful of airports across the country, but the agency wouldn’t comment specifically on why Atlanta was selected. The federal agency wants to determine if the city used funds properly at the airport — a prime city asset dogged over the years by allegations of bid steering and corruption.

City Councilman Howard Shook, chair of the council’s finance executive committee, said he welcomed the audit.

“I think there has been enough questions raised about the airport’s finances that everyone will benefit from a thorough review of the books,” Shook said. “Let the chips fall where they may.”

Last year, an Atlanta Journal-Constitution article detailed how the city had used millions of dollars in airport revenue to pay lawyers to respond to subpoenas from a federal grand jury investigating corruption at city hall, prompting the FAA to launch an investigation. The agency didn’t say whether the upcoming audit is related to the probe.

The AJC also reported this past weekend that the city had briefly paid Mayor Keisha Lance Bottoms’s former chief of staff out of airport money, prompting the city council on Monday to call for an independent investigation by the city auditor and ethics office.

The federal audit comes as the state, which for decades has talked about asserting control over the airport, has gone further this year than it ever has toward making good on those threats.

This month, the state Senate voted in favor of legislation that would put control of the airport under a state authority. The measure is pending in the state House and is certain to loom over the remainder of the legislative session, which ends April 2.

A spokesperson for the FAA said the agency conducts financial compliance reviews of two to four commercial airports each year. In addition to overseeing aviation safety, the FAA has rules that govern spending at federally funded airports. This is the first time Hartsfield-Jackson has been chosen since the reviews began in 2005.

The agency refused to cite any specific reason for why Atlanta had been selected other than to quote from its letter to the city.

“Our objective is to gain reasonable assurance airport revenue is being and has been utilized solely for the capital and operating costs of the airport,” the letter says.

In the FAA’s letter, the agency said that FAA Headquarters Lead Financial Compliance Analyst Olu Okegbenro and a team of FAA staff would begin examining various city financial transactions, including paying attorneys fees. The agency will begin its work on April 22 and expects to complete the review by May 10.

If the FAA finds instances of significant airport revenue diversion, the consequences could be severe, said J.E. “Sandy” Murdock III, a former FAA chief counsel.

“If they find that the diversion is severe enough, they could compel the city of Atlanta to repay whatever the dollars they found to have been illegally diverted,” Murdock said. “If the city then refuses to do that, they have the power to a cut off all discretionary funds.”

Hartsfield-Jackson officials issued a written statement saying they and the city “are working diligently to ensure that compliance of all federal regulations is always the driving force behind how the revenue is spent at the airport.”

Compliance with federal regulations “remains a top priority for airport leadership, reinforced by General Manager John Selden,” who took the helm of Hartsfield-Jackson last year, leaving a post as a deputy manager at New York’s John F. Kennedy International Airport.

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