United CEO And 2 Senior Executives Leave Airline Amid Probes

Sep 9, 2015
Originally published on September 10, 2015 2:09 pm
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Transcript

RENEE MONTAGNE, HOST:

The CEO of United Airlines is out of a job, along with two other top executives.

STEVE INSKEEP, HOST:

These abrupt departures are related to something that might seem a bit surprising because, you know, it's an airline. But it's related to the New Jersey political scandal over a bridge - lane closures on the George Washington Bridge a couple of years ago.

MONTAGNE: Here's the connection. Both the bridge and Newark's Liberty Airport are operated by the Port Authority of New York and New Jersey. And the United Airlines executives may have been trying to influence some of the same Port Authority officials who are responsible for closing several lanes on the bridge as a form of political payback. NPR's David Schaper explains.

DAVID SCHAPER, BYLINE: In a hastily scheduled conference call, longtime United Airlines board member Henry Meyer announced late yesterday that he is taking over as nonexecutive chairman and that fellow board member Oscar Munoz, a top railroad executive, is becoming United's new CEO. Meyer says the abrupt changes come as chairman and CEO Jeff Smisek steps down.

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HENRY MEYER: Jeff's departure is in connection with the company's previously disclosed internal investigation related to the federal investigation associated with the Port Authority of New York and New Jersey.

SCHAPER: That investigation centers on what some Port Authority officials had nicknamed the chairman's flight. Federal authorities are looking into whether United reinstated service from Newark to Columbia, S.C., a route that loses money, as a way to curry favor with former Port Authority chairman David Samson, who just so happens to have a vacation home not far from Columbia. Samson, by the way, is a close ally of New Jersey Governor and presidential hopeful Chris Christie. United began offering the twice weekly flights, including one down to Columbia on Thursday nights and another back up to Newark Monday mornings, after United's CEO Smisek had dinner with then Chairman Samson. Smisek, meanwhile, was trying to convince the Port Authority to spend millions on improvements at Newark and lower United's airport fees. The so-called chairman’s flights lasted about 18 months. United canceled the service just three days after Samson resigned under pressure last year because of the bridge scandal, which is what got the feds interested in possible influence peddling at the Port Authority in the first place. Asked about the status of the investigation on that conference call with industry analysts, United's general counsel, Brett Hart, said he could not provide any more information.

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BRETT HART: All of our disclosures we believe have been appropriate. And the investigation is still ongoing - both an internal investigation, keep in mind, and the investigation by the federal authorities. So our ability to disclose more than we have is limited.

SCHAPER: The shakeup at the top comes as United enjoys record profits, $1.7 billion at just the first half of this year. Smisek, meanwhile, walks out the door with a hefty severance payment of almost $5 million. According to a company filing with the Securities and Exchange Commission, the 61-year-old also keeps his health insurance until he's eligible for Medicare, flight benefits for the rest of his life and his company car. David Schaper, NPR News, Chicago. Transcript provided by NPR, Copyright NPR.