D'Amato's Role Investigated in La Guardia Airport Deal

From Today's NY Times:

D’Amato’s Role Investigated in La Guardia Airport Deal

December 24, 2003
By ERIC LIPTON





The airplane refueling trucks had been ordered. A $100
million insurance policy had been retained. An operations
director had been hired. All that Jet Center, a refueling
contractor based in Florida, needed to start servicing
private planes at La Guardia Airport was the formal
approval from the Port Authority of New York and New Jersey
board.

Then the calls from Alfonse M. D'Amato, the former New York
senator turned lobbyist, started to come in.

Mr. D'Amato and his lobbying firm had been hired by the
losing bidder, Signature Flight Support, which since 1993
has had the contract to refuel and service corporate and
other privately owned small jets and prop planes at La
Guardia. Mr. D'Amato said yesterday that he had spoken
personally with at least three members of the Port
Authority board who were appointed by Gov. George E.
Pataki.

Suddenly, late last month, nearly a year after the bids
were submitted, the Port Authority board decided to
informally extend Signature's contract and start the
bidding all over again, ignoring advice from its own staff.


Mr. D'Amato and his client had won. Jet Center had lost.

The turn of events has set off an investigation into
whether a politically connected and powerful interloper was
able to use his clout to derail the standard contracting
rules to benefit his client, as some critics are
contending, or whether an intervention on behalf of a
worthy contractor prevented the Port Authority from making
a mistake, as Mr. D'Amato contends.

"We are not going to prejudge this," said Assemblyman
Richard L. Brodsky, a Democrat from Westchester County who
is chairman of a committee that has begun investigating the
matter. "What we have is enough information to make clear
we have to know more."

The dispute over the contract was first reported on Sunday
in The New York Post.

Fort Lauderdale Jet Center submitted the lowest bid to the
Port Authority and in February was notified that it could
expect to begin refueling jets at La Guardia in May, after
the Signature contract expired, said Edward J. Zwirn, Jet
Center's chief operating officer.

Mr. Zwirn said he is convinced he knows how the deal fell
through. "D'Amato influenced it," Mr. Zwirn said. "The
integrity of the public bidding process in my mind was
sacrificed due to political influence. It is not fair. It
is discouraging."

Jet Center expected to do $6 million to $8 million a year
in business to refuel and service private planes under the
contract, and agreed to pay the authority as much as an
estimated $840,000 in fees a year as part of the deal.
Signature, by comparison, paid the Port Authority $694,273
last year. It agreed to increase its payments next year,
though slightly below Jet Center's amount.

E-mail messages sent by the Port Authority to Jet Center
early this year make clear that the agency was on its way
to awarding the company a three-year contract to take over
from Signature.

"Our risk management division found the attached
certificate of insurance satisfactory," said one e-mail
message in April to Mr. Zwirn from a Port Authority
contract administrator. "Before commencement of operations,
the original must be forwarded to our risk management
division."

Mr. D'Amato's lobbying firm, Park Strategies L.L.C., was
retained in May for a $25,000 initial fee, in addition to a
monthly charge that the former senator would not disclose.

Mr. D'Amato, who is legendary for his broad network of
friends in the Republican Party, especially in New York
State, said yesterday that he had spoken personally with
Charles A. Gargano, vice chairman of the Port Authority
board and a longtime ally of Governor Pataki, as well as
with Commissioners Bruce A. Blakeman and Michael J.
Chasanoff, who are both active in the Republican Party on
Long Island.

Mr. D'Amato said he had expressed concerns about the way
Jet Center handled its bid. The three board members did not
respond to requests for comment yesterday.

"You had a situation where people attempted to hijack the
contract, and that is Jet Center and some people working at
the Port Authority," Mr. D'Amato said yesterday in a
telephone interview. "It reeked. It reeked to the heavens."


According to Mr. D'Amato, he raised questions in letters
and in the telephone calls about what he said was Jet
Center's failure to meet a deadline to submit its
qualifications for the job, its financial capacity to
handle the contract and the relationship between the
general manager of La Guardia and an owner of Jet Center.
He urged the Port Authority to reject all the bids and
start the process again. "This doesn't pass the smell
test," he said.

Mr. Zwirn acknowledged that one of Jet Center's owners is
related to the wife of the La Guardia official, Warren
Kroeppel, but he added that the same woman, Karen Kroeppel,
used to work for Signature Flight Support, and that Mr.
Kroeppel had recused himself from any matters related to
the contract. He also said that Jet Center had secured a
letter of credit for $1 million to guarantee its financial
capacity and that it had submitted all the application
documents on time.

The Port Authority board was supposed to act on the
contract last spring. But after the questions were raised
by Mr. D'Amato and Signature's lawyers and executives, the
agency's inspector general reviewed the contracting process
to see if it had been fairly handled.

The Port Authority's general counsel, its inspector general
and an outside lawyer hired by the authority each concluded
that "the procurement process had not been adversely
affected by any alleged informalities or improprieties, and
that the contract could be properly awarded to Fort
Lauderdale Jet Center," according to an authority document.


Nonetheless, in November, the Port Authority board, a
12-member body appointed by the governors of New York and
New Jersey, decided to intervene. "Reject all bids," said
the resolution passed on Nov. 20 by the board.

One board member from New Jersey, Jack G. Sinagra, said he
went along with the resolution because it was obvious to
him that the New York members were united in blocking the
hiring of Jet Center.

Mr. Brodsky, chairman of the Assembly's Corporations,
Authorities and Commissions Committee, has been holding
hearings for months examining whether favoritism plays a
role in contracting, particularly in the many state
authorities and commissions, like the Port Authority. His
committee disclosed that Mr. D'Amato had been paid $500,000
to make one phone call resulting in a contract from the
Metropolitan Transportation Authority for a client.

http://www.nytimes.com/2003/12/24/ny...073330977&ei=1
&en=1eb1cd8d09e3b2cc


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