Last week the Justice Department announced it had reached a plea agreement with David Sampson, the former chairman of the Port Authority of New York and New Jersey, who pressured executives of United Airlines to reopen a money-losing route, which flew near Sampson’s weekend home in South Carolina. In return for this perk, Sampson agreed to allow United to increase its hangar allocation at the carrier’s hub in Newark, NJ. Sampson pled guilty to one count of bribery. Also charged in connection with the same facts was an adviser to Sampson, Jamie Fox (no relation to The Man from FCPA) who advised Sampson on how to pressure United most effectively to obtain the benefits he desired.
The scheme was simple enough. As reported by the New York Times, the staff of the Port Authority had recommended approval of the lease of a hangar with United. Sampson however pulled the transaction from the board agenda when it came up for routine approval, demonstrating to United they would have to “dance to my tune.” The quid pro quo of the flight was so obvious that Port officials called the route “the chairman’s flight” and Jamie Fox designated it as “Sampson Air.” As further evidence of the direct benefit paid for the hangar lease, United cancelled the flight services almost immediately after Sampson resigned his post at the Port Authority.
Although the bribe afforded to Sampson, in the form of the route to his weekend home was apparently approved at the highest levels of United, no person from United “will be charged in connection with the case.” United did agree to pay a penalty of $2.25MM. Additionally former United CEO Jeff Smisek, was dismissed for his role in the affair.
In the world of the FCPA, we rarely see a company CEO so directly involved in a bribery scheme as to what appears to have been the case with the chairman’s Flight. The federal prosecutor of the case, Paul Fishman, the United States attorney for New Jersey, did say “United had cooperated and responded just as prosecutors would have wanted.” However, if a government official pleads guilty to accepting a bribe, it would certainly seem that someone must have paid or authorized it.