United created a special route for a Chris Christie appointee. Now its CEO has resigned.

  • The CEO of United Airlines, Jeffery Smisek, has stepped down in the midst of a federal investigation into United’s dealings with the Port Authority of New York and New Jersey.
  • According to a Bloomberg story published in April, Port Authority chair David Samson asked United to establish a direct flight from Newark to Columbia, South Carolina, which was near Samson’s weekend home.
  • United eventually complied with the request, according to Bloomberg, after “Samson twice threatened to block Port Authority consideration of one or more of the airline’s favored projects.”
  • The ongoing scandal could prove embarrassing for New Jersey Gov. Chris Christie — who appointed Samson to the Port Authority — though there’s no evidence of wrongdoing by Christie himself.

United has been lobbying for years to lower fees at Newark Airport

The Port Authority of New York and New Jersey is a sprawling government bureaucracy that controls a number of transportation facilities in the New York Metropolitan area, including Newark Liberty Airport. Newark was historically a hub for Continental Airlines, which merged with United in 2010.

United has long contended that the Port Authority charges excessive fees for the use of Newark airport, relative to fees at other airports in the New York metropolitan area. With United accounting for 70 percent of the airport’s traffic, the airline argued that the fees put it at a competitive disadvantage.

So United has been lobbying Samson to lower the fees ever since he became chair of the Port Authority in 2011. Samson dined with Smisek in September 2011, and according to Bloomberg, he asked Smisek to reinstate a previously-cancelled route from Newark to Columbia, South Carolina, which was close to a vacation home Samson owned.

United initially refused, but relented after Samson allegedly threatened to delay projects favored by United. Bloomberg says it has reviewed documents that “indicate there may have been a direct link between the request for the Columbia flight and the Port Authority’s process of approving projects involving the airport.”

The route had one round-trip flight twice a week: It flew from Newark to Columbia on Thursday evenings and returned on Monday morning — perfect for a government official who liked to spend weekends in South Carolina. Records obtained by Bloomberg indicate that it was about half full on a typical flight during its two-year run.

Samson had close Christie ties

The federal investigation into Samson’s dealings with United are a spinoff of a federal investigation into “Bridgegate,” a scandal in which Christie aides allegedly conspired to close lanes on the George Washington bridge from New Jersey to New York City in order to retaliate against a perceived political enemy.

Samson, an attorney, advised the Christie gubernatorial campaign and was then named as the chair of Christie’s transition committee in 2009. The next year, Christie appointed Samson to the Port Authority board.

During Christie and Samson’s tenure, United gave heavily to Christie’s gubernatorial campaign, and to other organizations connected to Christie. United executives donated $24,000 to Christie’s reelection campaign in 2013, and United also “gave $100,000 to Choose New Jersey, a business group that answers ultimately to Christie,” according to WNYC, and another $10,000 to the Republican Governor’s Association while Christie was the chairman.

All these donations were part of a campaign to enlist Christie’s support to lower the Newark airport fees. The parties came close to reaching a deal in late 2013 that would have cut the fees. But then news of Bridgegate broke, disrupting the Port Authority’s operations and preventing an agreement.

Samson resigned in March 2014, in the midst of the Bridgegate scandal. Three days later, United canceled the Newark-to-Columbia route.

Now, with federal investigators probing United’s dealings with the Port Authority, Smisek has resigned as CEO of United. He’ll be replaced by rail industry executive Oscar Munoz.

Resource: http://www.vox.com/2015/9/8/9282591/united-ceo-resignation-explained

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