U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

76–706 PDF 2013

METROPOLITAN WASHINGTON AIRPORTS 

AUTHORITY: A REVIEW OF THE DEPARTMENT 

OF TRANSPORTATION INSPECTOR GENERAL’S 

FINDINGS AND RECOMMENDATIONS 

(112–109) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

NOVEMBER 16, 2012 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

VACANCY 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... v 

TESTIMONY 

PANEL 1 

Hon. Gerald E. Connolly, a Representative in Congress from the State of 

Virginia ................................................................................................................. 8 

PANEL 2 

Hon. Ray LaHood, Secretary, U.S. Department of Transportation ..................... 12 

PANEL 3 

Hon. Calvin L. Scovel III, Inspector General, U.S. Department of Transportation ..................................................................................................................... 20 

Hon. Michael A. Curto, Chairman, Board of Directors, Metropolitan Washington Airports Authority, accompanied by Hon. Tom Davis, Vice Chairman, Board of Directors, and John E. Potter, President and Chief Executive 

Officer, Metropolitan Washington Airports Authority ...................................... 20 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Hon. Eddie Bernice Johnson, of Texas ................................................................... 43 

Hon. Eleanor Holmes Norton, of the District of Columbia .................................. 44 

Hon. Chris Van Hollen, of Maryland ..................................................................... 46 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. Gerald E. Connolly ......................................................................................... 47 

Hon. Ray LaHood ..................................................................................................... 49 

Hon. Calvin L. Scovel III ........................................................................................ 56 

Hon. Michael A. Curto ............................................................................................. 63 

SUBMISSIONS FOR THE RECORD 

Hon. John L. Mica, a Representative in Congress from the State of Florida, 

request to submit article ‘‘Dulles Rail Board Ignored Warnings of Nepotism,’’ Liz Essley, Washington Examiner, Nov. 16, 2012, at 4 ......................... 4 

John E. Potter, President and Chief Executive Officer, Metropolitan Washington Airports Authority, response to request for information from Hon. 

John L. Mica for the employment status of personnel of concern as identified by the U.S. Department of Transportation Office of Inspector General 

report, ‘‘Audit Report: MWAA’s Weak Policies and Procedures Have Led 

to Questionable Procurement Practices, Mismanagement, and a Lack of 

Overall Accountability’’ ........................................................................................ 26 

Hon. Ray LaHood, Secretary, U.S. Department of Transportation, response 

to question from Hon. Thomas E. Petri, a Representative in Congress 

from the State of Wisconsin, regarding the status of the consolidation 

and realignment plan for FAA facilities ............................................................. 55 

Hon. Calvin L. Scovel III, Inspector General, U.S. Department of Transportation, request to submit his office’s report entitled, ‘‘Audit Report: MWAA’s 

Weak Policies and Procedures Have Led to Questionable Procurement Practices, Mismanagement, and a Lack of Overall Accountability,’’ AV–2013– 

006 (Nov. 1, 2012) ................................................................................................ 68 

Page

IV 

Hon. Michael A. Curto, request to submit the Metropolitan Washington Airports Authority’s Board of Directors’ response to the reports issued by 

the U.S. Department of Transportation Office of Inspector General and 

the joint letter of Aug. 4, 2012, from Hon. Ray LaHood, Governor Robert 

F. McDonnell of Virginia, Governor Martin O’Malley of Maryland, and 

Mayor Vincent C. Gray of the District of Columbia .......................................... 119 

Enclosure A: Memorandum Suspending Use of Certain Categorical Exceptions (Aug. 2012) ........................................................................................... 132 

Enclosure B: Recommendations from Inspector General, Nov. 1, 2012, 

Final Report .................................................................................................. 134 

Enclosure C: Code of Ethics for Members of Airports Authority Board 

of Directors (Sept. 2012) ............................................................................... 140 

Enclosure D: Code of Ethics for Employees of Airports Authority (Sept. 

2012) ............................................................................................................... 156 

Enclosure E: Draft Financial Disclosure Form for Airports Authority 

Board of Directors (Oct. 2012) ..................................................................... 174 

Enclosure F: Airports Authority Travel Policy (Sept. 2012) ......................... 181 

Enclosure G: Airports Authority Bylaws (Oct. 2012) .................................... 204 

Enclosure H: Airports Authority Freedom of Information Policy (July 

2012) ............................................................................................................... 218 

v 


Insert offset folio 1 here 76706.001

it.~. llnunt of i.tprtntntatiutn 

~ommittcc on m:ransportation anb 3JnfrastructutC 

Jobn1. JtiliUl 

i!J)airman 

James W. CoOl! II, Chief of Staff 

MEMORANDUM 

~I1S1Jinllton, JI€ 20515 

November 13,2012 

TO: Members, Committee on Transportation and Infrastructure 

FROM: The Honorable John 1. Mica, Chairman 

~irk J. l\abnll, 3J3J 

laanking Jtilember 

James H. Zoia, Democnt Chief of Staff 

SUBJECT: Hearing on "Metropolitan Washington Airports Authority (MW AA): A Review 

of the Department of Transportation Inspector General's Findings and 

Recommendations" 

PURPOSE 

On November 16, 2012, at 9:00 a.m., in room 2167 of the Rayburn House Office 

building, the Committee on Transportation and Infrastructure will receive testimony on the 

Department of Transportation Inspector General's (DOT IG) November 1,2012 report on the 

policies, practices and programs of the MW AA. 

BACKGROUND 

The Metropolitan Washington Airports Authority (MW AA) was created through an 

interstate compact between the Commonwealth of Virginia and the District of Columbia, and 

approved by Congress in the Metropolitan Washington Airports Act of 1986 (Airports Act).! 

The MW AA is a public body which is governed by a Board of Directors and employs nearly 

1,400 individuals. As originally designed by the Airports Act, MW AA was governed by a 13-

member Board of Directors. However, in October 2012, Board membership increased to 17 

members, including seven appointed by the Governor of Virginia, four by the Mayor of the District of 

Columbia, three by the Governor of Maryland, and three by the President of the United States.2 Board 

members serve six-year terms without compensation. The Board is responsible for establishing 

policy and providing direction to the MWAA's President and Chief Executive Officer (CEO). 

I P.L. 99.591 

'In October 2012, the District of Columbia passed legislation to amend the interstate compact to complete the 

implementation of changes to the Board's composition mandated by the Consolidated and Further Continuing 

Appropriations Act of2012 (p.L. 112-55, Div. C, Title I, § 191). Congress passed this Act in November 2011 to 

expand the MW AA Board from 13 to 17 members. 
vi 


Insert offset folio 2 here 76706.002

In 1987, Dulles International Airport (lAD) and Ronald Reagan Washington National 

Airport were transferred to the MW AA under a 50-year lease authorized by law.3 Control of the 

airports was transferred to the Authority, but the Federal government continues to own most of 

the airport property. In April 2003, the tenu of the lease was extended an additional 30 years. 

Prior to the transfer, the airports were owned and operated by the U.S. Department of 

Transportation (DOT), Federal Aviation Administration.4 In 2008, the MW AA assumed control 

of the daily operation and maintenance of the Dulles Toll Road, including managing a project to 

extend the Metrorail on the Orange line to IAD. Construction ofthis project began in 2009. 

The Airports Act and the lease established the MW AA as an independent public body. 

As such, the Authority is hot subject to Federal or State laws that govern procurement, ethics, 

civil service, and transparency. However, it must abide by the provisions and tenus of the 

Airports Act, the lease, and the interstate compact, as well as its own internal policies and 

processes. The lease established the tenus and conditions of the Authority's control of the 

Airports, and most significantly, that the property be used only for "airport purposes." 

DOT Inspector General's November 2012 MW AA Report Findings 

Due to their responsibility over two major federally-owned airports and a multi-billion 

dollar public transit project, the MW AA has recently been the subject of significant interest. At 

the request of Congress, the DOT Inspector General (DOT IG) reviewed the management 

practices and policies at the Authority, including its accountability, transparency, and 

governance. The final report was transmitted to Congress on November 1, 2012.5 

The DOT IG assessed the MWAA's (1) contract award and procurement practices, 

including compliance with relevant laws, (2) code of ethics for employees, (3) hiring and 

compensation practices, and (4) accountability and transparency of its Board of Director 

activities. In each case, the DOT IG uncovered significant issues of concern. These issues are 

outlined on the following pages: 

DOT IG Review of the MW AA Contract Award and Procurement Practices 

The Airports Act and the lease agreement between DOT and the MW AA require the 

Authority to award contracts over $200,000 competitively. However, the DOT IG concluded 

that the MW AA's contracting policies and practices do not encourage competition. 

Between January 2009 and June 2011, the Authority awarded 190 contracts that exceeded 

$200,000 only 68 of which were awarded with full and open competition. Of these 190 

contracts, five were sole source awards with a combined value of $6 million. The MW AA also 

awarded these five contracts without Board approval which the Airports Act, lease agreement, 

and the Authority's Contracting Manual require. The remaining 117 contracts were awarded 

J Metropolitan Washington Airports Act of 1986, Title VI ofP.L. 99-500 

4 http://www.mwaa.com!263.htrn 

5 Report No. A V -2013-006 

2 
vii 


Insert offset folio 3 here 76706.003

using categorical exceptions without providing adequate justification - amounting to $225 

million, or 40 percent of the total value of the Authority's contracts over $200,000.6 

DOT IG Review of the MW AA 's Code of Ethics 

As required by the lease agreement with DOT, the MW AA created a code of ethics. 

However, according to the DOT IG, the Authority's code of ethics and related processes have 

not been sufficient to prevent actual and perceived conflicts of interest and other violations. 7 As 

a result, the MW AA has been unable to ensure compliance with ethics provisions. The DOT IG 

report highlights known examples of ethical violations, which include employees accepting gifts 

from contractors - some with major contracts with the Authority - including: 

~ Two tickets to the 2009 Super Bowl, associated travel, and accommodations in 

Tampa, FL, valued at almost $5,000; 

~ Four trips to golf tournaments, including one trip to the 2009 U.S. Open Golf 

Tournament in Long Island, NY, and three all-expense paid trips to Hilton Head, SC; 

~ A trip to New York City to attend a major league baseball game; 

~ Nineteen other major sporting events, such as professional basketball and hockey 

games; 

~ Three concerts, including performances by famous pop artists; 

~ A fishing trip, including food and drinks; and 

~ Seventeen social events with food and beverages. 

DOT IG Review of the MW AA 's Hiring and Compensation Practices 

Under the MW AA's standard hiring process, applicants typically undergo a competitive 

interview process by a panel, which makes a recommendation to the hiring official based on the 

candidates' qualifications. However the DOT 10 discovered multiple instances where MW AA 

officials either circumvented or ignored the competitive interview process in order to place a 

candidate they preferred into a position.8 This led to senior officials improperly filling vacancies 

and awarding excessive salaries, unjustified hiring bonuses, questionable cash awards, and 

ineligible benefits. 

In one case uncovered by the DOT 10, the CEO created an advisory position for a former 

Board member without specifying what the job entailed or establishing market salary 'and 

benefits. In February 2012, the former Board member was hired by the Authority one day after 

resigning from the Board. The compensation for this advisory position included a salary of 

$180,000. Subsequently, key MW AA stakeholders questioned the appointment, and the former 

Board member was terminated-with a year's severance pay.9 

6 Report No. AV-20J3-006, Pages 8-9 

7 Report No. AV-20J3-006, Page 19 

'Report No. AV-20J3-006, Page 25 

9 Report No. AV-20J3-006, Pages 26-27 
viii 


Insert offset folio 4 here 76706.004

DOT 10 Review of Accountability and Transparency of the MW AA 's Board of Directors 

According to the DOT IG, weak ethics and travel policies, a lack of oversight, and 

significant gaps in transparency have greatly diminished the Board's accountability.lo While the 

Board has made interim changes, some issues remain to be addressed. 

Highlighted in the report, one Board member's recommendation led the MW AA to 

initiate a $100,000 contract with a law firm that employed the member's spouse. At the very 

least, this created the appearance of a conflict of interest. At the time of the audit, the Board's 

code of ethics did not include a provision prohibiting nepotism and the Authority hired the 

grandchildren of two Board members. In particular, one Board member had at least two 

grandchildren working at the Authority. The same Board member also insisted that the MW AA 

hire an immediate family member of his close friend. l1 Although the Authority's recently 

revised Board code of ethics contains a new provision preventing this type of influence, they 

have lost tremendous credibility. 

DOT Inspector General's Initial Findings And Interim Reforms To MW AA Practices 

In May 2012, the DOT IG reported its initial [mdings, which led to Virginia, Maryland, 

and District of Columbia officials mandating immediate reforms ofMW AA practices. The 

Authority was required to terminate all contracts with former Board members and employees 

that were not competitively bid, strengthen its ethics code, provide recurrent training to all Board 

members and employees, and tighten Board travel procedures to eliminate wasteful spending. 

The MW AA has subsequently revised the Board's Freedom of Information policy, suspended the 

use of categorical exceptions for hiring, and enhanced screening to detect and prevent nepotism. 

The Secretary of DOT is likely to pursue an amendment to the Authority's lease to provide 

greater oversight. 

DOT Inspector General's November 2012 MW AA Report Recommendations 

The DOT IG remains concerned with MW AA practices and policies and their interim 

reforms. Specifically, the interim reforms have not been independently reviewed or fully 

implemented and further actions are needed to adequately address the weaknesses uncovered by 

the IG's review. 

The DOT IG set forth a number of recommendations to promote integrity and 

accountability in the MWAA's management and governance. They include: 

}> Provide quarterly acquisition reports to the Board and DOT; 

}> Implement a plan with milestones to revise contracting policies and procedures to 

reflect Federal and other best practices; 

}> Clarify and enforce its current contracting policies and procedures; 

}> Define and assess the size and skills of the acquisition workforce and implement an 

appropriate acquisition certification program; 

10 Report No. AV-2013-006, Page 33 

IIReport No. AV -2013-006, Page 35 

4 
ix 


Insert offset folio 5 here 76706.005

» Establish policies and procedures for procurement integrity; 

» Fully implement formal ethics policies and procedures for Board members and 

employees; 

» Ensure the review process for financial interest forms emphasizes verification and 

documentation; 

» Fully implement a robust ethics training program; 

» Establish priorities for implementing the new Board and employee ethics codes, 

including procedures to oversee and enforce them; 

» Implement and enforce human resources policies and practices; 

» Further revise the travel policy; and 

» Further enhance the accountability and transparency of the Board of Directors. 

The DOT IG provided a draft report to the Secretary of Transportation in October 2012. 

In response, the Secretary indicated that the Department is exercising the full extent of its 

authority to help the MW AA address the serious problems raised in the report. The Secretary 

also formally transmitted the report to the MW AA with a clear expectation that the Authority 

produce a detailed response within 30 days addressing each recommendation. Pending that 

detailed response from the Authority, the DOT IG's 12 recommendations and 30 specific subrecommendations remain open and unresolved. 

WITNESSES 

Panel I - Members' Panel: 

The Honorable Gerald E. Connolly 

Panel II: 

The Honorable Ray LaHood 

Secretary 

U.S. Department of Transportation 

Panel Ill: 

The Honorable Calvin L. Scovel, III 

Inspector General 

U.S. Department of Transportation 

The Honorable Michael A. Curto 

Chairman of the Airports Authority Board 

Metropolitan Washington Airport Authority 

Accompanied by: 

John E. Potter 

President and Chief Executive Officer 

Metropolitan Washington Airport Authority 

5 
(1) 

METROPOLITAN WASHINGTON AIRPORTS 

AUTHORITY: A REVIEW OF THE 

DEPARTMENT OF TRANSPORTATION 

INSPECTOR GENERAL’S 

FINDINGS AND RECOMMENDATIONS 

FRIDAY, NOVEMBER 16, 2012 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

WASHINGTON, DC. 

The committee met, pursuant to call, at 9:05 a.m., in Room 2167, 

Rayburn House Office Building, Hon. John L. Mica (Chairman of 

the committee) presiding. 

Mr. MICA. Good morning. I would like to call this hearing of the 

House Transportation and Infrastructure Committee to order. 

This morning we are conducting an oversight and investigations 

hearing, and it is relating to the Metropolitan Washington Airports 

Authority. And, in particular, we will be discussing the results of 

a report by the inspector general relating to some of the Authority’s 

weak policies, procedures that have led to questionable procurement practices, mismanagement, and a lack of overall accountability, according to the title of the report, which was issued November 1, 2012. 

The order of business today will be opening statements by Members, and then we have three panels. Mr. Connolly will be part of 

our first panel; Mr. LaHood; the inspector general, third, and the 

chairman of the Airports Authority Board. So, with that, I will proceed. I have some opening comments, and then we will recognize 

other Members and go forward. 

Well, it is sort of a sad day, I think, for Metropolitan Washington, also a sad day for advocates of improving and expanding 

and conducting good transportation projects and policies in the Nation’s capital and surrounding area because the inspector general 

has produced a report—I think some of you have seen it. I just referred to the report. And this is an audit report. 

This was not requested by this committee. It was requested, actually, by two Members of the House: one, Mr. Wolf, the gentleman 

from Virginia, Frank Wolf, who has been a strong advocate for 

transportation, also a leader in transportation initiatives for northern Virginia and for the country; and then Mr. Latham, who chairs 

an important appropriations subcommittee that oversees transportation spending and funding issues in the House of Representatives. 

2 

And it does, unfortunately—the report does, unfortunately, highlight exactly what the title has portrayed, that there are serious 

problems in our Nation’s capital Airports Authority. 

The Federal Government does have an important role. We own, 

I believe, the properties, and we have the long-term leases, as outlined by a law and various agreements for operation. The Authority 

has more than the airports; it also is responsible for control of the 

daily operation, maintenance of the Dulles Toll Road and also another important project I worked on with a number of the Members 

here. We finally made it a reality, but that is the extension of the 

Metrorail to IAD. So it has an important connection both to the 

Congress, which created, again, its existence, and it also has multiple important responsibilities. 

This is not a criticism particularly by this committee. Our staff 

and investigative personnel have conducted some review, and, unfortunately, their findings mirror the findings of this IG report. Let 

me just talk about some of the most disturbing findings. 

And, again, we want to uncover what has been going on. We also 

want to look at how we can bring this to a halt. I know Mr. Wolf 

has taken some steps to put provisions into some of the, I think, 

appropriations legislation, and other corrective measures are certainly warranted. But this is to see what went wrong and then try 

to make certain that it is corrected and it doesn’t happen again. 

And, also, people need to be held accountable. 

Under the DOT IG review, first, some of the Airports Authority 

contract award and procurement practices. They found that, unfortunately, even though there is a requirement for all contracts over 

$200,000 to be bid competitively, that always didn’t take place. Between January 2009 and 2011, June of 2011, the Authority awarded 190 contracts that exceeded $200,000. Only some 68 were actually awarded with full and open competition. Five were sole-source 

awards with a combined value of some $6 million. 

Another nearly quarter of a billion dollars of contracts—and I 

think there were 117 of those, the balance of the contracts—were 

awarded using categorical exemptions. All of this raises very strong 

concerns, again, for compliance with open and fair and honest competition. 

Let me just talk about the next point that the DOT IG’s review 

of the Airports Authority, compliance with the code of ethics. And 

some of this has already been reported, but their findings are that 

there were tickets to the 2009 Super Bowl, valued at almost 

$5,000; 4 golf tournament trips; a trip to New York City to attend 

a major baseball league game; 19 other major sporting events; 3 

concerts; a fishing trip; and a host of other things that certainly are 

improper. 

Unfortunately, the operation of the Airports Authority is now becoming a poster child for some of the corrupt practices that I think 

need to be brought to a halt and accounted for. And that is, again, 

the purpose of this hearing. 

And one of the other major points that the IG reviewed is the 

hiring and compensation practices. They found out that the Authority officials either circumvented or ignored competitively going 

after candidates and having an open and honest and fair process 

in order to place some of the candidates they preferred into a posiVerDate Aug 31 2005 14:50 Feb 11, 2013 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-16-~1\76706.TXT JEAN
3 

tion. Unfortunately, they also have been accused of nepotism, both 

some from some of the key personnel, including, I guess, the personnel HR director has resigned, but also even board members. 

And additional findings of the inspector general cited awarding 

excessive salaries, unjustified hiring bonuses, questionable cash 

awards, and ineligible benefits. So that is not my findings; that is 

the findings of the inspector general. We will hear from him in a 

minute. 

Then I was reading an account this morning. There is a report 

which I would like to see which is still in, I am told, a draft form, 

but it was an anonymous employee survey. And they gathered comments in 2010 of some of the extensive mismanagement issues at 

the Authority. 

But some of the comments that are in the report—which, again, 

hasn’t been released, I don’t believe, or finalized. This is what some 

of the employees said: Stop the corruption, favoritism, discrimination; hiring advancement of unqualified people, top management 

people; VPs having board members in their pocket for favors; VPs 

violating laws, practices, and lacking ethics and fairness. 

Here is another comment: Nepotism and favoritism. Here is another comment: It needs a severe culture change. Here is another 

one: There is way too much nepotism; take my word for it and 

independently look into it. 

And the list goes on. I will make these part of the record. 

[The information follows:] 

4 


Insert offset folio 6 here 76706.006

FEDERAL INVESTIGATION 

Dulles Rail board ignored warnings of nepotism By liz Essley . 

Examiner Sta/fWriter 

Nepoti.s:m at the embattled Met~ 

ropolitan Washington Airports 

Authority was so widespread that 

emplo~s were wnming leaden! 

about it nearly two years before a 

federal inspector general blasted the 

authority for its I'culture of favorit~ 

ism:' The Washington Eraminer has 

learned. 

But airports leaders did little to 

stop the problem until a Department 

of Transportation inspector general 

publicly reprimanded the authority 

for its practices in a report released 

earlier this month. 

A congressional committee is prepared on Friday to grill officials from 

the airports authority, which over-. 

sees Washington Dulles International 

and Ronald Reagan Washington 

National airports, as well as the $6 

billion Dulles RaRproject. 

On Wednesday, authority board 

member JlR Crawford unapolo~ 

getically told reporters that referring 

friends and relatives for jobs at the 

authority was "standard operating 

procedure" when bejoined the organization a decade ago. Employees complained about 

the cronyism and its blow to their 

morale in a December 2010 survey, 

the results of which were presented 

to the airports authority's board in 

early2011. 

"'The Authority is morally bank~ 

ropt when it comes to nepotism. in 

employment and contracts," wrote 

one employee in the anonymous 

comments, ac:cordirig to documents 

viewed by The Washington Examiner, 

The airports authority would not 

release the SllI"Vey comments, saying the study was still a "draft.." 

"There is a serious ethics problem 

at the Airports Authority - there. 

is favoritism in hiring, promotions, 

performance appraisals, bonuses, 

cash awards, contracting, etc. ... 

wrote another employee. "Even this 

organizational study is suspected by 

many of being crooked, Many people 

are afraid to speak up. An outside 

_stigationBY A GOVERNMENT 

AGENcY is needed" 

Still more scathing comments 

came from authority workers: 

"STOP the corruption of: favoritism, 

discrimination, hiringladvancement 

of 'unqualified' personnel," wrote 

one. "Force executive level management to observe, promote and lead 

by example MWAAB ethics and policies that have been established and 

stop the nepotism and favoritism," 

wrote another. 

Several commenters singled 

out tbe vice president of human 

resources, Arl Williams, for hiring friends and relatives. Williams 

declared his retirement the day 

before the recent inspector general's 

report blamed him for hiring one relative - despite a failed background 

cbeck - and supervising another. 

As a result of the survey and the 

associated study which the airports authority awarded in a no-bid, 

$885,000 contract to a no. finn with 

connections to Crawford - the airports authority revised a tool that 

measures employee perfonnance 

and "improved employee communications," a spokesman said 

But employees hired by relatives 

stayed on,. and in summer 2011, 

four relatives of board members, 

including one of Crawford's granddaughters, were hired in a student 

swruner employment program. 

It wasn't until after an interim 

inspector general's report in May 

that the authority started revising 

ethics policies and the student program guidelines. 

"Additional refonns are in progress and will be reported publicly 

on a regular basis. The Airports 

Authoritywill continue to review its 

practices and procedures to reflect 

best practices of government and 

industry," airports spokesman Rob 

y-mgling said in an email. 

lessl~washingWl'lexamiMr.com 
5 

Mr. MICA. And I would also like to see that draft when it is finalized and made part of the record. 

So, again, we are here on a sad day when we have to conduct 

this type of investigation and review and also look at, again, the 

positive steps that can be taken to correct this. 

So with those comments, again, I welcome our witnesses and invite other Members for their opening comments. And I will yield 

first to Ms. Norton. 

Ms. NORTON. Thank you, Mr. Chairman. 

The Metropolitan Washington Airports Authority, which we call 

MWAA, is a so-called independent public body, but it was created 

by Congress, by an act of Congress called the Metropolitan Washington Airports Act of 1986. That act authorized a compact between 

the Commonwealth of Virginia and the District of Columbia. 

MWAA has 1,400 employees and leases the land and manages— 

leases the land on which the 2 airports stand from the Federal 

Government and manages Ronald Reagan National Airport and 

Washington Dulles Airport. In addition to managing the airports, 

MWAA has been given responsibility for the Dulles Corridor Metrorail Project, with an estimated cost of $5.8 billion, including $977 

million in Federal funds. 

This hearing is timely and important in light of the Department 

of Transportation inspector general’s audit report released just this 

month and the recent news stories almost every other day about 

inappropriate spending by MWAA and potential and actual conflicts of interest. 

The IG report concluded—and here I am quoting—‘‘MWAA’s contracting policies and practices are insufficient to ensure compliance 

with the Airports Act and the lease agreement between DOT and 

MWAA,’’ end quote. And he went on to say, ‘‘The code of ethics and 

related MWAA policies and procedures in place at the time of our 

audit lack the rigor needed to ensure credibility and integrity of 

management and employee decisions.’’ 

Following the IG’s report released in May, MWAA has taken 

some action to improve its ethical standards by approving a new 

travel policy, a new code of ethics for the board and for employees. 

MWAA has also revised the board’s bylaws and Freedom of Information Act policies and has terminated contracts with former 

board members. However, I believe more action is needed. 

To address the contracting policies, which have perhaps been the 

most troubling, yesterday I introduced H.R. 6592, for which I am 

seeking cosponsors, that would require MWAA to comply with the 

Federal Acquisition Regulations that set rules that govern all aspects of the acquisition process for virtually every Federal branch 

agency. 

Given the continuing ownership of the airports by the Federal 

Government, MWAA’s creation by Congress, and the significant 

Federal taxpayer dollars for which MWAA is responsible, there is 

no reason why MWAA should use a different standard from that 

for Federal agencies, particularly given the shortcomings reported 

by the IG. It certainly would make no sense for MWAA to attempt 

to reinvent a new set of procurement procedures and ignore the 

long-tested Federal Acquisition Regulations, which provide legal 

6 

guidelines for every aspect of procurement and that maximize fairness and transparency. 

I am grateful to Secretary LaHood for his quick attention to the 

IG’s findings, appointing an accountability officer to work with 

MWAA to strengthen its policies. In addition, Secretary LaHood cosigned a letter with the Governors of Virginia and Maryland and 

the mayor of the District of Columbia highlighting their concern 

with the lack of accountability and transparency and laying out 

specific necessary reforms. 

My bill, along with steps that MWAA has already taken and is 

continuing to take, should help MWAA regain its bearings. I look 

forward to hearing from today’s witnesses about what reforms are 

necessary and how to ensure that MWAA is a good steward of the 

valuable assets it controls. 

And I thank you, Mr. Chairman. 

Mr. MICA. Thank the gentlelady, and recognize the chair of the 

Aviation Subcommittee, the gentleman from Wisconsin, Mr. Petri. 

Mr. PETRI. Thank you very much, Mr. Chairman. 

As your remarks indicated, this committee has, I think, great 

confidence in General Scovel and the inspector general process, and 

this hearing and his report illustrates the importance of that to the 

good functioning of our Government. It is sad but true that, sometimes, if people don’t think they are being watched, they do things 

that they shouldn’t be doing. And the inspector general is the 

watcher, and the report is the result of that. 

Now, what did he find? He found inappropriate sole-sourcing contracts, accepting elaborate gifts from contractors, nepotism and hiring irregularities, unjustified and costly bonuses, and a variety of 

other unethical actions on the part of the board and members of 

the staff of the Metropolitan Airports Authority. 

This hearing illustrates the seriousness with which this committee and Congress takes not only the report but the actions that 

it uncovered. And we hope and look forward to hearing what remedial actions are being taken to make sure this doesn’t happen 

again. 

And, with that, I thank the chairman for recognizing me and 

yield back the balance of my time. 

Mr. MICA. Thank you, and let me recognize Mr. Cummings next, 

the gentleman from Maryland. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman, for convening today’s hearing to examine the outrageous abuses of the 

Metropolitan Washington Airports Authority, otherwise known as 

MWAA. 

These abuses are many and far-ranging and run counter to the 

public mission of MWAA. Members of the board of directors failed 

to live up to the high expectations placed on them by the taxpayers 

of Maryland, Virginia, and the District of Columbia. I, too, have 

contributed a portion of my taxes to MWAA, so I come to this hearing both as a Member of Congress and as a disappointed taxpayer. 

Just as I argued when we found that banks receiving TARP funds 

were continuing lavish spending, neither I nor any of my fellow 

taxpayers paid taxes with the intention of funding MWAA’s lavish 

travel, fine wines, and trips to the Super Bowl. 

7 

On many occasions, MWAA’s board members violated the trust 

put in them by the taxpayers by pouring money into noncompetitive contracts, hiring family members, and taking gifts that would 

make Jack Abramoff blush. As such, as MWAA board members enjoyed their travel accounts, concerts, and golf tournaments, I am 

sure that the citizens of the DC metro area would particularly appreciate more functional airports, such as a Silver Line project, free 

of massive spending overruns. 

I call upon MWAA today to continue to revise all of their internal 

practices, especially the code of ethics. Further, I urge MWAA to 

incorporate the recommendations made by the inspector general’s 

report, as there are clearly shortfalls in the current standards of 

conduct. I look forward to hearing from today’s panelists about 

what has been done and will continue to be done to correct these 

problems. 

The sort of abuses that have occurred must stop and must stop 

immediately. Engaging in these practices is completely unacceptable, and in other circumstances they would be criminal. MWAA 

must swiftly recover from these missteps and work to regain the 

public’s trust, while making its sole mission that of being a responsible steward of some of this region’s most essential transportation 

and infrastructure. 

With that, I am hopeful that today’s testimony will yield not only 

explanations but include concrete steps for remedying these significant issues. 

And with that, Mr. Chairman, I yield back. 

Mr. MICA. Thank the gentleman. 

Do other Members seek recognition? 

Ms. Richardson, the gentlelady from California? 

Ms. RICHARDSON. Yes, thank you, Mr. Chairman, and our ranking member for calling this hearing today to review MWAA’s efforts 

to evade problems brought to light by the Department of Transportation’s inspector general. 

As customary, it is always beneficial to have the participation of 

our Secretary, Ray LaHood, who is well-versed with the workings 

of this committee and the body as a whole. 

Today our purpose is to consider the inspector general’s findings, 

which are limited to just a few years but unfortunately paints a 

troubling picture of what might have occurred since 1987. 

After reviewing the report, it is clear that reform is needed at 

MWAA. According to the report, and over the years, there has been 

a blatant disregard for competitive bidding practices by awarding 

contracts to former board members, initiating work before the contract was awarded, awarding sole-source contracts without properly 

vetting bidders, and continually creating loopholes to bids in an effort to sidestep regulations on bids valued at over $200,000. 

Now, I will say as a Member of Congress, my legislative career 

has been devoted to, particularly on this committee, to make sure 

that all companies—small business, minority, veterans, various 

businesses—would have an opportunity to compete. So by reading 

this report, it is particularly disturbing because it gets at the heart 

of what many of us have worked to do to make sure that all companies, particularly American companies, have an opportunity to do 

8 

business and have gainful employment and hire others in this 

country. 

I understand that MWAA has since amended some of these policies since the IG’s report, including revisions to its contracting 

manual. However, I would hope that all of the inspector general’s 

recommendations would be incorporated in their policies. 

Going forward, I believe that Congress should take action to require any authority’s board and employees that use taxpayer dollars to comply with either State or Federal transparency and procurement regulations before entering in a lease with DOT. A perfect example of this is the board of directors at the Dallas-Fort 

Worth International Airport. That board is required to follow the 

Texas State law and guidelines related to governance, transparency, and procurement. Failure to comply can lead to punishment by imprisonment or fines. 

I applaud both Congressman Wolf and Congressman Latham in 

their efforts to shine light on this troubling revelation. I want to 

also again thank our witnesses, including our colleague who is here 

with us today, for being with us and affording us the opportunity 

to improve upon the situation, which is what all hearings should 

be about. 

Thank you very much. I yield back. 

Mr. MICA. Thank the gentlelady. 

Do other Members seek recognition? 

If not, then we will turn to our first panel. And we have a single 

Member testifying or asking to comment today, and that is Gerry 

Connolly, who represents the 11th Congressional District, takes in 

a good portion of the area that is served by these transportation 

agencies. 

So, welcome. And you are recognized. 

TESTIMONY OF THE HONORABLE GERALD E. CONNOLLY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

And before I begin my testimony, I just want to thank you personally. When I was chairman of Fairfax County, before I came 

here to Congress, you were a good friend in helping us work 

through problems on the Silver Line project rail to Dulles. You and 

your predecessor, Mr. Oberstar, worked in a bipartisan way to help 

us save that project, understanding what a critical investment that 

is not only for our region but for the National Capital. And I thank 

you for your leadership and your help on that project because it is 

going forward. It looks good. I know Secretary LaHood has been a 

friend to the project, as well. And it means a lot to this region. 

Again, thank you, Chairman Mica and Ranking Member Eleanor 

Holmes Norton and members of the committee, for holding this 

very important oversight hearing on the findings and recommendations contained in the Department of Transportation Office of Inspector General audit report of the Metropolitan Washington Airports Authority, known as MWAA, its management policies and 

processes. 

I appreciate the opportunity to testify on something that is so important to my constituents in the 11th District of Virginia and, inVerDate Aug 31 2005 14:50 Feb 11, 2013 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-16-~1\76706.TXT JEAN
9 

deed, throughout this region. I commend the leadership of Congressmen Wolf and Latham in requesting that IG Scovel initiate an 

audit of MWAA operations. 

I also applaud Secretary LaHood’s proactive leadership and his 

commitment not only to overseeing but, more importantly, actively 

assisting MWAA in implementing those needed reforms. Appointing an accountability officer, for example, was an important first 

step toward transforming the Authority. And the Secretary has my 

full support in regard to DOT’s effort to amend its current lease 

with MWAA to enhance accountability, transparency, and internal 

controls. 

We must not forget that as a self-funded, independent organization employing approximately 1,400 employees, MWAA is far more 

than its board of directors and senior leadership. The poor performance of some political appointees and senior managers ought not to 

tarnish the excellent work performed by the Authority’s career staff 

members over many years, who have admirably kept the Dulles 

Corridor Metrorail Project on track, to be completed on time and 

mostly within budget, and in their day-to-day work to ensure orderly operation of the airports and management of the Dulles Toll 

Road as well as other projects. 

One would never guess from recent headlines that during its 25 

years of existence the Airports Authority has actually established 

a successful, scandal-free track record of financing and overseeing 

major enhancements and renovations to both National and Dulles 

Airports. 

That being said, I have cosponsored with my colleague, Congressman Wolf, legislation that would streamline and restructure the 

governance of MWAA and give Virginia the majority of seats. I 

have long said it is inappropriate to afford Maryland and the District of Columbia disproportionate influence over facilities wholly 

located within the Commonwealth of Virginia and that primarily 

affect Virginia residents. 

Any logic behind the current structure collapsed, it seems to me, 

when MWAA took over responsibility for operating the Dulles Toll 

Road and constructing Dulles rail. Plain and simple, Virginians 

want Virginians primarily responsible for setting local toll rates. 

By reducing the number of members from 17 to 9 and staggering 

the terms so no Governor has a disproportionate influence over the 

composition of that board, our bipartisan legislation can create 

greater accountability, especially to the folks in Virginia, and restore some public confidence in MWAA. To take that a step further, 

I would even support starting with an entire slate of new members. 

Now, with respect to the IG report, one cannot defend the indefensible. In reviewing the interim and final DOT OIG audit report, 

‘‘indefensible’’ is one of the milder terms one could apply to some 

of the management deficiencies and ethical practices exhibited by 

MWAA’s board and senior leadership. Unfortunately, in this instance, one can judge the book by its cover, as the report’s title, 

‘‘MWAA’s Weak Policies and Procedures Have Led to Questionable 

Procurement Practices, Mismanagement, and a Lack of Overall Accountability,’’ accurately captures the Authority’s shaky management practices. Stories of extravagant travel, unjustified hiring boVerDate Aug 31 2005 14:50 Feb 11, 2013 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-16-~1\76706.TXT JEAN
10 

nuses, questionable cash awards, and widespread nepotism already 

have grabbed headlines as a result of OIG’s investigation. 

While some of the criticism focused on actions of certain board 

members, the final audit report demonstrates clearly that the 

depth of management and ethical failures extend far beyond any 

one person. The fact of the matter is the bar for professional and 

ethical conduct needs to be raised considerably for all current and 

future board members and senior managers of MWAA. 

The finding from OIG that I found most troubling involved serious management deficiencies, particularly MWAA’s noncompliance 

with requirements in the Airports Act, its lease agreement with 

DOT, and commonsense contracting practices. From initiating work 

before awarding a contract, issuing sole-source contracts without 

adequate justification, providing favored bidders with nonpublic information to bestow an unfair competitive advantage, MWAA’s acquisition practices and procedures could serve as a case study in 

how not to administer procurement policy. 

In addition, MWAA’s failure to meet its own contracting manual 

requirements when utilizing categorical exceptions was an inexcusable restriction of fair and open competition. The Authority’s decision to delegate procurement authority to employees outside of its 

procurement and contracts department, subsequently losing track 

of which personnel they had granted this authority, while simultaneously failing to hold employees to delegated limits, is emblematic 

of MWAA’s lack of internal controls and disregard for sound management principles. 

Fortunately, MWAA has demonstrated it now understands the 

gravity of this situation and is taking steps, however tardy, to ensure that the final chapter of this embarrassing period for the Authority may yet be one of redemption. The decisive actions initiated 

by the board and senior leadership, including the arrival of new 

board members and the replacement of some senior managers, are 

an encouraging indication that MWAA is committed to restoring its 

reputation and, more importantly, public confidence in the operation. 

Developing a new travel policy, increasing transparency through 

new ethics policies, and instituting strong internal controls for procurement are essential corrective actions in order to eliminate nepotism and favoritism while ensuring that MWAA is always in compliance with the Airports Act and its lease agreement with DOT. 

As the committee is aware, MWAA Board Chairman Michael 

Curto sent a letter to Secretary LaHood and Governors McDonnell 

and O’Malley and Mayor Gray of the city earlier this week detailing actions the Authority already has taken or plans to take in response to the OIG’s 12 broad corrective actions and 30 specific subrecommendations. I appreciate the candor and resolve from Chairman Curto and MWAA leadership to work swiftly with regional 

partners to address those shortcomings. 

It is difficult, Mr. Chairman, to overstate the importance of 

MWAA to our region’s transportation network and prospects for 

economic growth. It is absolutely essential that our region’s congressional delegation, DOT, and MWAA continue to work together 

to fully address every single DOT OIG recommendation. Given the 

diffuse accountability embedded in the current governance of 

11 

MWAA, restoring the public confidence will be an arduous but absolutely necessary part of this process. 

In closing, I want to again express my gratitude to you, Mr. 

Chairman, and Ranking Member Eleanor Holmes Norton for providing me the opportunity to testify before the committee. And I 

look forward to working with you as we proceed in the future. 

Mr. MICA. Well, we thank you for your testimony, your participation, and your recommendations. 

And I don’t see any—Ms. Norton, did you have a question? 

Ms. NORTON. Yes, I do have a question for Mr. Connolly. 

I certainly agree with his analysis of the issues and the defects 

in the present regulations, such as they are, at MWAA. I regret the 

part of his testimony which veers off into an entirely regional matter that has been settled, I thought, by a compromise—a compromise that the District of Columbia only reluctantly accepted. 

The 1986 legislation was enacted in order to regulate traffic between Reagan National and Dulles Airport. Dulles was receiving 

virtually none or too little of the air traffic. Reagan, which was already overcrowded, was receiving much more of the traffic. Since 

the airport compact was enacted in 1986, there are three airports 

in this region, and they have divided up the traffic in a very rational way—the airport in Maryland, the airport here in the District, 

and Dulles Airport. Although, Mr. Chairman, you are aware that 

every time the FAA bill comes up, there are Members who want 

more and more of the traffic in the District of Columbia. 

The reason that the two airports are regulated and the reason 

that the District of Columbia is in this at all is because Reagan National Airport receives much—and that is located in Virginia, not, 

I believe, in Mr. Connolly’s district—but that receives traffic that 

is, in fact, coming to Washington and, therefore, is a preferred airport by much of the traffic. The Federal Government owns the land 

and wanted to make sure that the traffic was more evenly divided. 

Now, Mr. Wolf has had two attempts. The one that everyone has 

signed on to gives Virginia twice as—gives Virginia the same number—excuse me—the same number as the number of members on 

the Authority from Maryland and the District of Columbia combined. The other legislation would give Virginia essentially all of 

the authority, and the other members would have no say because 

they would so outnumber Maryland and the District of Columbia. 

If compromise is to be the way of the lame duck and the way of 

the 113th Congress, I certainly hope we won’t open that issue, 

which was reluctantly settled to the favor of Virginia and which I 

think has no place in this hearing today. 

And I thank you, Mr. Chairman. 

Mr. MICA. You wanted to respond, Mr. Connolly? 

Mr. CONNOLLY. Yeah, thank you, Mr. Chairman. And I certainly 

appreciate Delegate Norton’s point of view. I respectfully disagree. 

I think it has everything to do with today’s hearing. 

I think, clearly, the practices of this governing body, of MWAA, 

have shown serious flaws with the governance structure. And I 

would simply say, if we are talking about control over one’s own 

destiny, which I support, I certainly support voting rights for the 

District of Columbia. I don’t think Congress ought to be making 

12 

management decisions for the city’s budget or other aspects of its 

governance. 

Delegate Norton has overlooked the fact that there are also, in 

addition to the Maryland and DC appointees on the board, 3 Federal appointees, so that, as a matter of fact, 10 of the 17 members 

are not Virginians or not appointed by Virginia. And they are making decisions about toll rates. 

What has changed since 1986 is that the Airports Authority— 

which, by the way, carved out BWI. So the third regional airport 

is not part of the purview of MWAA, interestingly. But now we are 

not just managing airports, we are building the largest transit extension in America and managing it, and we are controlling the toll 

road entirely within Virginia. And the underlying fee is a Virginia 

property, not a Federal property. 

And so that is what has changed. And I respectfully think we 

ought to consider changing that governing structure so that Virginians have more of a say now in things that profoundly affect my 

commuters and my citizens on the toll road, which is financing a 

large part of the extension of rail. 

Mr. MICA. OK. Ms. Norton had asked a question. Just a clarification. So your recommendation, did I hear it right, was to dismiss 

all of the current board members? 

Mr. CONNOLLY. The legislation does not address that, Mr. Chairman. What I said was, if we are going to start with a clean slate, 

we—if this legislation were to become law—— 

Mr. MICA. Oh, totally clean. Not, like, any of the more recent 

members. The other thing—— 

Mr. CONNOLLY. Our legislation is silent with respect to that. 

Mr. MICA. OK. There are—well, let’s see. We have expanded the 

membership; now they want to contract the membership and limit 

some of the membership, according to some of the proposals. All 

that fight has to go forward. We are not going to settle that here 

today. But I will be interested in your opinion on that as we move 

forward. I will also take Ms. Norton’s into consideration and the 

other Members’. 

With that, we will let you go. Thank you for your participation, 

again, your recommendations and your testimony. 

And we will welcome Secretary LaHood. 

Mike, if you can get his little—OK, here we go. 

I want to take this opportunity to welcome our Department of 

Transportation Secretary and former colleague, the former gentleman from Illinois, still the gentleman from Illinois but now from 

DOT, Secretary of Transportation LaHood. 

Welcome, and you are recognized. 

TESTIMONY OF THE HONORABLE RAY LAHOOD, SECRETARY, 

U.S. DEPARTMENT OF TRANSPORTATION 

Secretary LAHOOD. Thank you, Mr. Chairman and the members 

of the committee, for the opportunity to appear before the committee today to address management issues at the Metropolitan 

Washington Airports Authority and to share with you steps we 

have taken to help get the organization back on track. 

At DOT, we care deeply about the long-term success of MWAA. 

I was deeply concerned to learn about the lack of accountability, 

13 

transparency, and sound judgment by the MWAA board in its activities. The public expects and deserves more from a public agency 

entrusted with managing the airports serving the Nation’s capital 

and also building the Silver Line. 

The DOT inspector general’s report laid out very serious and 

troubling examples of the Authority’s operation, but the reports 

also may provide a clear and concrete road map for DOT and 

MWAA itself to bring management practices up to the highest levels. 

At the DOT, we took immediate action to help MWAA address 

these problems and made concrete changes that will preserve these 

fundamental reforms. This summer, I appointed Kimberly Moore 

as a Federal accountability officer. And I want to give your colleague, Frank Wolf, a lot of credit for this. Frank and I worked together on this. This was his idea. And Kim Moore has done a great 

job in a very short period of time. She has worked with MWAA to 

improve ethics, procurement, and governance policies. 

I also brought together the Governors of Maryland and Virginia, 

along with the mayor of the District of Columbia, to ensure a 

united front in addressing these issues. In fact, we sent a letter to 

Chairman Curto and the MWAA board of directors in August laying out both our concerns and necessary reforms to reform transparency. 

And if you wouldn’t mind, Mr. Chairman, just parenthetically, I 

just want to list the eight items that were in the letter and tell you 

where we are at. 

Number one, overhaul financial procurement and HR policies. 

That is underway. 

Terminate all existing contracts with former board members and 

former employees. That is done. 

Terminate all employment relationships with former board members. That is done. 

Adopt post-employment restrictions for board members and employees that meet Federal standards. That is done. 

Strengthen ethics code. Completed. 

Tighten travel procedures. Completed. 

Implement transparency programs. And the board is, at their 

last meeting, is pretty well complete on that. 

Strengthen oversight of the Dulles rail project, which is using a 

lot of taxpayer dollars. That is ongoing with our Federal Transit 

Administration stakeholders and MWAA. 

So I am delighted that, out of the eight items, many of them are 

complete. And I think that goes to the leadership of Mr. Curto and 

the CEO and president of MWAA. 

Since I appointed Ms. Moore as Federal accountability officer, 

MWAA has implemented new travel policies and ethics policies for 

MWAA’s board and staff, terminated improper contracts and employment relationships, and undertaken to enhance the transparency of MWAA’s board. Further improvements are currently underway. 

MWAA’s success is important to all of us. We have made 

progress, but we can always do better. DOT looks forward to working with you, this committee, the Congress, our friends that represent this area in Congress, and we will keep all parties advised. 

14 

I thank you for holding this hearing and inviting me to participate. 

Mr. MICA. Thank you for your testimony. 

And we will just ask a couple of questions here. 

You cited some of the things that have been done to correct the 

situation. And I guess you have Kim Moore, who has been charged 

with some of that responsibility on oversight—— 

Secretary LAHOOD. May I introduce her? She is here, Mr. Chairman. If she could just stand—— 

Mr. MICA. That is great. Good. Well, welcome. An important responsibility. 

And we appreciate you; Mr. Wolf for his work and efforts to 

launch some of this; Mr. Latham; and Ms. Moore’s efforts to get 

this under control. 

Now, I think the board terms, are they 6 years? And I don’t know 

how many members have been on how long. Do you know the sort 

of—— 

Secretary LAHOOD. No, but maybe Mr. Curto can answer that 

when he is up here. I don’t know specifically. 

Mr. MICA. Well, my point here is, I thought I heard Mr. Connolly 

say maybe we need to clean house and start over. What is your 

opinion there? 

Secretary LAHOOD. Well, we—— 

Mr. MICA. Is that board salvageable? 

Secretary LAHOOD. We have, out of the 17 members, I think 11 

now—11 or 12 are new members. And the President has just nominated and are pending right now in the Senate two additional 

members that are Presidential. And we are hoping that there will 

be one other one. 

Really, I think in terms of cleaning house on the board, it has 

pretty well been taken care of because almost all the members are 

new members. 

Mr. MICA. So you think some of the culture that created this situation has been eliminated? 

Secretary LAHOOD. Yes, I do. 

Mr. MICA. OK. OK. Well, that is important. And then you have 

cited the steps that you have taken. 

Mr. Connolly actually made a pretty good case of making this 

more of a Virginia-centered Authority as opposed to the Presidential appointments in Maryland and the rest, DC. What is your 

opinion there? 

Secretary LAHOOD. Well, look, I am not going to—I think it is 

up to the board and the Congress and the people that represent the 

airport authorities to decide if they think there is a better approach 

to the organization of the board. I don’t think the DOT Secretary 

should be deciding what the composition of the board is, how many 

members it should be. You know, that was done by people who 

have a lot more jurisdiction over it, and I am going to leave it to 

others to decide that. 

There are a lot of new board members on there. There is a lot 

of fresh blood. They have a new CEO and president, and I think 

he has done a good job. 

15 

Mr. MICA. Well, what has taken place—and I commend also—the 

inspector general has done an excellent job. He always does. And 

we will hear from him in a minute. 

Secretary LAHOOD. I agree with that. 

Mr. MICA. Again, sort of a sad—well, it is a very sad chapter, 

particularly in our Nation’s capital, to have this—— 

Secretary LAHOOD. I agree with that. 

Mr. MICA. So we hope we can—as Mr. Connolly also said, we 

have to restore public faith and trust in this important responsibility. 

Ms. Norton? 

Ms. NORTON. Mr. Chairman, I do not want to convert this into 

a discussion of what is essentially a regional issue. But I do want 

to say for the record that what Mr. Connolly proposes is essentially 

a takeover of the Airports Authority by the State of Virginia. That 

has profound implications for the rest of the region. And I hope we 

don’t get into those kinds of matters when this is a hearing about 

a matter on which everybody is in agreement. 

Now, Mr. Secretary, I would like to ask your view. I indicated in 

my opening statement that I had introduced a bill yesterday that 

would apply, the Federal Acquisition Regulations, to MWAA. I did 

that after looking at the regulations and seeing that they were tested; essentially, sometimes an agency will make small modifications. 

I also introduced it because I see that MWAA has been trying to 

reinvent the wheel. And I couldn’t for the life of me understand if, 

considering that this is Federal land, considering that it is leased 

from the Federal Government, considering the amount of Federal 

funds involved, why the Federal Acquisition Regulations already 

there shouldn’t simply apply and just get this over with. 

Do you see any reason why the Federal Acquisition Regulations, 

which are applied to virtually every Federal agency, shouldn’t 

apply to MWAA, as well? 

Secretary LAHOOD. Well, first of all, I would like to look at your 

legislation, Delegate Norton, and I would like to work with you on 

it. And before I say something very definitive about the procurement, I would really like to talk to our legal team about it. 

But, look, we are going to work with you on this, as we have on 

all of these matters. You are obviously very enlightened about 

these things. And having served here with you, I know the importance of having good Federal procurement. So let’s work together 

on it and see if we can figure out a better path. 

Ms. NORTON. Well, I certainly appreciate that approach. I am 

trying to go to efficiency in Government. 

Secretary LAHOOD. Yes. 

Ms. NORTON. There is a lot of, I think, justified and justifiable 

criticism about Government regulations. And the notion of going all 

over all of this plowed ground seems to me a colossal waste of time 

and energy. And I very much appreciate you are willing to consider 

the legislation. 

Secretary LAHOOD. We will do it. We will do it. 

Ms. NORTON. Thank you, Mr. Chairman—or Madam Chairman. 

Mrs. SCHMIDT. [presiding.] Thank you. 

And now I will yield myself such time as needed for some questions. 

16 

Nice to see you, sir. 

Secretary LAHOOD. Thank you. 

Mrs. SCHMIDT. I have a couple of questions. 

MWAA, I get why it was formed. I would like some more clarification on why BWI was left out of the loop, since it is in a competitive region with Dulles to get back and forth to. And is there 

an advantage or a disadvantage for Federal funds to be in the 

MWAA loop, or is it a wash? 

Secretary LAHOOD. I am going to—I think it would be better for 

me to let Mr. Curto and the Airports Authority answer the question. To be honest with you, I don’t know the answer to your question about why BWI was left out. I probably should, but I don’t. 

But I think it is better, when I don’t know the answer, to say I 

don’t know and let other people who do know answer it. 

Mrs. SCHMIDT. Fair enough. 

The second part is the toll road. I mean, maybe Dulles and 

Reagan have a little Federal control because it is Federal property. 

That might be the catch, I don’t know. But the toll road is definitely Virginia property. Why is MWAA having any jurisdiction 

over the toll road? 

Secretary LAHOOD. Well, look, part of what MWAA is doing is 

they are the grantee for the construction of the Silver Line, which 

will deliver people from around the region to Dulles Airport. And 

we have jurisdiction over the funding for the Silver Line, and we 

have worked very closely with MWAA and others on that. Part of 

what we have under consideration now is the TIFIA loan proposal, 

which will influence the toll road. And so these things are all sort 

of tied together as a result of the involvement with the Silver Line 

project. 

Mrs. SCHMIDT. I understand the importance of the Silver Line 

project getting to Dulles. Had MWAA not been involved, would it 

still have occurred, the Silver Line? I mean, could it have occurred 

with Virginia working with the Department of Transportation on 

it without MWAA oversight? 

Secretary LAHOOD. Well, look, this project is a project that is a 

part of the whole Metro system, and the decision was made to have 

MWAA be the grantee, so to speak, because the line was going to 

end up at Dulles Airport. 

So could there have been another grantee? You know, I would 

have to go back and look at the debate that took place and how 

all of that happened. 

Mrs. SCHMIDT. My final question: The toll road is solely in Virginia? 

Secretary LAHOOD. Yes, the toll road is solely in Virginia. 

Mrs. SCHMIDT. And MWAA decides what the rate of the toll will 

be? 

Secretary LAHOOD. Well, look, it is in cooperation with the Commonwealth also. 

Mrs. SCHMIDT. OK. Thank you so much. 

Secretary LAHOOD. Thank you. 

Mrs. SCHMIDT. I am surprised by all of this. Thank you. 

Ms. Richardson, do you have any questions? 

Mr. Cravaack? 

Mr. CRAVAACK. Thanks, Madam Chair. 

17 

Thanks, Secretary, for being here. 

Secretary LAHOOD. Good morning. 

Mr. CRAVAACK. Morning. Just a couple questions. 

It sounds like you already have a proactive approach in how to 

correct the problem. 

Secretary LAHOOD. We have taken a very proactive approach. 

Mr. CRAVAACK. Yeah, it seems like you have. You gave me a 

laundry list, and that actually shot down some of my questions. 

You might not have the answer to this, and the inspector general 

may have it, but what, in your opinion, was the most egregious 

findings that you found? 

Secretary LAHOOD. Well, the way that this came to my attention 

is when I read an article in a local publication about a contract 

that was given to a former board member where this board member was going to be paid for an extended period of time as a consultant. And when I read the article, I couldn’t believe it. 

Mr. CRAVAACK. Yeah. 

Secretary LAHOOD. And that is when—to me, that was the tip 

of the iceberg. 

Mr. CRAVAACK. Yeah. 

Secretary LAHOOD. And then we started drilling down, and we 

came up with these eight items that were included in the letter 

from the two Governors and the mayor of Washington, DC. 

Mr. CRAVAACK. Yeah. Well, like I said, you have already answered my questions in your opening testimony, so thanks for drilling it down. 

Secretary LAHOOD. Thank you. 

Mr. CRAVAACK. I appreciate it. 

And I will yield back. Thank you. 

Mrs. SCHMIDT. Thank you. 

Mrs. Johnson, do you have any questions? 

Ms. JOHNSON OF TEXAS. No. 

Mrs. SCHMIDT. Mrs. Edwards? 

Ms. EDWARDS. Thank you, Madam Chair. 

We will just actually go down the loop. 

Mr. Secretary, it is good to see you. 

I do want to just go back to this question of the governance structure for the Authority. Because, I mean, in your view, in terms of 

the amount of resources that we put both into the lease agreements 

and the activities going at Dulles and at National Airport and, in 

addition, the Federal resources going in to the Silver Line Metro 

system, doesn’t that justify some more oversight at the Federal 

level than we have in a lot of other regions that don’t share in 

quite the same relationship with the Federal Government? 

Secretary LAHOOD. Well, look, when it comes to the Silver Line, 

we have a lot of jurisdiction. Our FTA Administrator and the FTA 

has already done one audit to make sure that the phase-one money 

was spent correctly. There will be another audit done early next 

year to make sure that what has continued is being done correctly. 

That is the way that we would operate with any transit program 

where we give them money. 

The uniqueness of this is that the construction of the Silver Line 

is being done by the Airports Authority. But our jurisdiction over 

the Silver Line is quite significant and is significant the way we 

18 

do it with every other project that we do like this. We pay a lot 

of attention, there is a lot of oversight, and we do a lot of audits. 

We make sure the money is spent correctly. We make sure the contracts are let correctly. 

And so, you know, the whole idea of the governance of MWAA 

I think is better left for debate with the next panel, the chairman 

and the CEO and the president, you know, to get their take on it. 

I don’t really want to get involved in that. I don’t know if that is 

really my responsibility. I don’t want to be telling every airport authority around the country how many members they should have 

and who should be serving on their boards. That is not our role. 

Ms. EDWARDS. Thank you, Mr. Secretary. 

And just one final question. The first phase of the project was 

done under a project labor agreement, but that is not true, then, 

for the second phase, but largely it is the same number and the 

same workers. 

What was the role of the FTA in its oversight around the development of a project labor agreement in the first phase? 

Secretary LAHOOD. Well, once the contract was let, then it is between the people who get the contract and the FTA and others to— 

well, between the contractor and MWAA to work out the project 

labor agreement. 

I assume that is going to happen in phase two. I think once the 

contract is let for phase two, people will sit around a table and figure out the PLA. 

Ms. EDWARDS. There have been some suggestions, both in the 

media and otherwise, speculating about the existence of the project 

labor agreement and moving into phase two as having something 

to do with all of this mess, apart from the other ethical issues, the 

mess surrounding departures of board members and the reconfiguration of the board. 

Do you know anything about that? 

Secretary LAHOOD. I really don’t. Yeah. I really don’t. 

Look, phase one has worked pretty well. It really has. I think 

phase two will work equally well. Because I think when you talk 

to these folks that are now in charge of MWAA, a new CEO and 

president, a relatively new chairman, they get it. We have a former 

Member of Congress who is the vice chairman of the board who is 

here today; he gets it. These people get it. They do. They know this 

has to be done correctly. They also know that a lot of people have 

an eye on them, not just all of you, but those of us at DOT and 

others. 

So I am confident this is going to be done correctly. They have 

pending before us a TIFIA loan. I mean, look, we are not going to 

give them a TIFIA loan if they are not doing things correctly. They 

know that. 

Ms. EDWARDS. All right. Thank you. 

And I yield. 

Mrs. SCHMIDT. Thank you. 

Mr. Coble? 

Mr. COBLE. Thank you, Madam Chairman. 

Mr. Secretary, good to have you back on the Hill. 

Secretary LAHOOD. Thank you. 

19 

Mr. COBLE. I was going to ask you, Mr. Secretary, what DOT’s 

next steps are in regard to MWAA, and you have touched on that 

briefly. Go into it in a little more detail, if you will. 

Secretary LAHOOD. Well, we put together a letter, signed by myself and the Governor of Virginia, the Governor of Maryland, and 

the mayor of DC, where we outlined eight items that they needed 

to correct quickly. And they have completed the majority of those. 

They still have more to go. 

We have our accountability officer, Kim Moore, assigned by me 

to work with the MWAA board. She has done a great job, and they 

have been very cooperative. 

And the other thing that I would say is that I have a lot of confidence in the new CEO and president, also in Mr. Curto, who you 

are going to hear from, but, as important, in Mr. Davis, a former 

Member of this body. They get it now. They know that things need 

to change. 

And they also know that if they are going to get phase two funded, if they are going to get a TIFIA loan from DOT, things have 

to be done correctly. 

And I believe they are on the right track. 

Mr. COBLE. Well, personally I think you served a good watchdog 

role over there, Mr. Secretary. Good to have you back on the Hill. 

Secretary LAHOOD. Thank you. 

Mr. COBLE. I yield back, Madam Chairman. 

Mrs. SCHMIDT. Thank you. 

Are there any other questions? 

Secretary LAHOOD. Thank you very much. 

Mrs. SCHMIDT. Thank you. 

I am sorry, Mr. Petri has—I am sorry, Mr. Petri. 

Secretary LAHOOD. Almost. 

Mrs. SCHMIDT. Not quite. 

Mr. PETRI. This is slightly unrelated, but I just wanted to get on 

the record that when we passed the FAA reauthorization, it had a 

provision in it asking the FAA to engage in something similar to 

what we think of as the Army or the base-closing process, to look 

at underutilized FAA air-traffic-control facilities around the country, and work with the labor representatives and with others to 

come up with this. 

We know these deadlines are sometimes difficult to meet, but 

this was supposed to be submitted in June, and now we are 6 

months later, and if we don’t bring it to the people’s attention, it 

will end up probably continuing to drift into oblivion. So would it 

be—could you comment on that, or can this be given some attention? 

Secretary LAHOOD. I think what I will do, Mr. Petri, is consult 

with Michael Huerta, the Acting Administrator of the FAA, and, 

for the record, I will get you an answer. 

Mr. PETRI. Thank you, because it is not huge numbers of dollars, 

but it is—it would save money, and we are looking for efficient operation, safe operation of the Government in every respect, and if 

we neglect these things, they pile up. So—— 

Secretary LAHOOD. I agree. 

Mr. PETRI. Thank you. 

Mrs. SCHMIDT. Thank you. 

20 

Any other questions? 

Thank you very much for your time. 

Secretary LAHOOD. Thank you very much. All right. I got them 

warmed up for you. Good luck. 

Mrs. SCHMIDT. Welcome, gentlemen. We are joined by the Honorable Calvin L. Scovel, inspector general, U.S. Department of Transportation; the Honorable Michael A. Curto, chairman of the Airports Authority Board, Metropolitan Washington Airports Authority. We are also here with the Honorable Tom Davis, from Virginia; 

and Mr. Potter, the president and chief executive officer of the Metropolitan Washington Airports Authority. 

Welcome, gentlemen. 

We will begin with the Honorable Scovel. 

TESTIMONY OF HON. CALVIN L. SCOVEL III, INSPECTOR GENERAL, U.S. DEPARTMENT OF TRANSPORTATION; HON. MICHAEL A. CURTO, CHAIRMAN, BOARD OF DIRECTORS, METROPOLITAN WASHINGTON AIRPORTS AUTHORITY, ACCOMPANIED BY HON. TOM DAVIS, VICE CHAIRMAN, BOARD OF 

DIRECTORS, AND JOHN E. POTTER, PRESIDENT AND CHIEF 

EXECUTIVE OFFICER, METROPOLITAN WASHINGTON AIRPORTS AUTHORITY 

Mr. SCOVEL. Madam Chairwoman, Ranking Member Edwards, 

members of the committee, thank you for inviting me here today 

to discuss MWAA’s governance. Before I begin, I ask consent to include in the record a copy of our recently issued MWAA report. 

Mrs. SCHMIDT. So moved. 

Mr. SCOVEL. Thank you. 

Over the past several months, we have reported a number of deficiencies in MWAA’s internal policies and procedures related to 

contracting, travel, hiring, and transparency. MWAA is taking positive steps to correct these deficiencies, including strengthening several of its policies and terminating contracts with former board 

members. Further, in exercising the full extent of its authority, the 

Department has appointed a Federal accountability officer to monitor reform efforts, and is pursuing an amendment to the current 

lease with MWAA to ensure greater oversight and enforcement. 

While these are very positive steps, further actions are needed to 

ensure fiduciary and ethical responsibility and accountability to 

Congress, stakeholders and the public. 

First, MWAA needs management controls that will protect Federal assets and provide reasonable assurance of sound governance. 

A lack of such controls has allowed violations of applicable laws 

and agreements and even MWAA’s own policies to go unchecked. 

Ultimately, MWAA’s culture became one that tolerated questionable contracting practices, including awarding two-thirds of its contracts noncompetitively, adding out-of-scope work to existing contracts without proper justification, and initiating work before contract award. MWAA also released nonpublic contract information 

that gave potential contractors an unfair advantage in competition. 

These weaknesses were exacerbated by a lack of measures to ensure employees with delegated procurement authority do not violate the terms of their delegation or make improper purchases. 

21 

Second, MWAA’s code of ethics needs to ensure the integrity of 

decisions made by MWAA’s board of directors and employees. 

MWAA’s code of ethics and related policies and procedures have 

been insufficient to detect violations of antinepotism and gift provisions and to identify potential conflicts of interest. For example, 

employees regularly accepted inappropriate gifts from an MWAA 

contractor, including Super Bowl tickets, travel, and accommodations worth almost $5,000. Cursory reviews of financial disclosure 

statements and the lack of recurring ethics training have provided 

little assurance that employees were fully aware of MWAA’s ethics 

requirements. 

Third, MWAA’s hiring and compensation policies and practices 

need to ensure sufficient oversight and accountability. Senior officials have placed candidates into new or existing positions without 

job descriptions, competition, or completed background checks. We 

found that employees with criminal convictions worked at the Authority in sensitive and management positions for more than a 

year. In addition, MWAA managers awarded excessive salaries, 

questionable cash awards, and ineligible benefits. In one case 

MWAA created a new position for a former board member that included an annual salary of $180,000 for unspecified job duties before terminating that position. 

Finally, MWAA needs to expand its use of open committee meetings and continue to limit its use of executive sessions. This would 

further promote transparency, ensure accountability, and keep 

Congress, the public, and other stakeholders informed of its major 

decisions. MWAA has begun to take action to address our concerns. 

Notably MWAA has approved new codes of ethics for its employees 

and board, suspended the use of categorical exceptions for professional services, terminated contracts with former board members, 

approved a new travel policy, revised the board’s bylaws and freedom of information policy, and enhanced screening for nepotism. 

While these efforts, coupled with the Department’s planned actions, can help improve MWAA’s accountability, significant attention will be required to ensure that new contracting, travel, ethics, 

and disclosure policies instill public confidence. The key will be implementation and enforcement. 

Mr. Chairman, this concludes my prepared statement. I would be 

happy to an any questions that you or other members of the committee may have. 

Mr. MICA. [presiding.] Thank you. 

And I think we are going to go ahead and hear all of the other 

witnesses. So we will turn next to the chair of the board, Mr. Michael Curto, and you are welcome and recognized. 

Mr. CURTO. Good morning, Mr. Chairman and members of the 

committee, and thank you for the opportunity to discuss the Metropolitan Washington Airports Authority’s response to the audit by 

the Department of Transportation’s inspector general. I am Michael Curto, chairman of the Airports Authority board of directors, 

and with me today is the vice chairman of the Authority’s board, 

Congressman Tom Davis, as well as our president and CEO, Jack 

Potter. 

This audit began 16 months ago, shortly after I joined the board, 

and shortly before Mr. Potter joined the Authority. In May of this 

22 

year, the inspector general issued an interim report which raised 

a number of issues that we have been working to address. The final 

report issued November 1st raised additional issues and provided 

a number of recommendations. 

Mr. Chairman, I wish to be clear. The Airports Authority intends 

to address every issue raised in these reports, act on every recommendation, and fix every problem identified, and to do so in a 

manner that ensures they will not recur. It is my hope and the 

Authority’s goal that through these actions we will restore the confidence and trust of our many friends and partners. I am confident 

we will succeed. 

Today our board of directors is a very different body than the 

board of only a year ago, and soon it will be even more so due 

largely to legislation sponsored by Congressman Wolf. By early 

next year only 2 directors on our 17-member board will have served 

more than 2 years. Importantly, many of these directors will have 

joined us after the IG’s interim report was issued. They are aware 

of our challenges and are committed to fixing the problems. 

Our new leadership also is reflected in our new president and 

CEO. Mr. Potter brings a no-nonsense, get-it-done-right management style to the Authority. Working with him closely since becoming chairman in January, I am confident in his ability to lead the 

staff in successfully meeting these challenges. 

As the IG’s final report acknowledges, we already have made 

good progress. We have adopted new policies and revised others, 

we have made our operations and governance more open, we have 

improved our internal controls and oversight, and we are strengthening our procurement process with other initiatives underway. 

Our purpose in all of these actions is to bring greater transparency, accountability, and unmistakable integrity to all areas of 

the Authority. Our efforts have benefited greatly from the counsel 

and guidance provided by the Federal accountability officer appointed earlier this year by Secretary LaHood. 

I would like to briefly recap some of our actions. We have revised 

the Authority’s bylaws to increase transparency, including the posting of materials for board meetings to our Web site. We have revised our freedom of information policy to improve transparency, 

and have designated a freedom of information officer. We have approved a new travel policy with detailed procedures and clear 

guidelines for expenses. We have approved new codes of ethics for 

employees and directors with requirements for annual training. We 

have named an ethics officer to provide oversight, and we have conducted more than 20 training sessions on the new codes for board 

members and employees. 

We have terminated all noncompeted contracts and employment 

relationships with former board members. We are revising our contracting manual to reflect best practices and optimize competition. 

We are revising our human resources programs to assure best practices in compensation and hiring. And we have created an internal 

control group to enforce policies and assure accountability. Finally, 

we have assigned special management teams across the Authority 

to address and formally respond to each recommendation in the inspector general’s audit. 

23 

We are submitting for the record a report we presented this week 

to Secretary LaHood. You heard Secretary LaHood mention the response to his letter. The response also goes to Governors McDonnell and O’Malley, and Mayor Gray. It describes in detail our actions to address the recommendations of the IG and the concerns 

these officials expressed this past August. 

I believe we are on the right track. I recognize the movement 

along this track will require hard work, and at times may be slow 

and encounter difficulties, but I am confident we will achieve 

steady and significant progress to strengthen the Airports Authority and rebuild the public trust and confidence. 

Mr. Chairman, we would be pleased to answer any questions. 

Mr. MICA. Thank you. 

And I see you are accompanied by John Potter, who is the president and chief executive officer. Did you have any testimony there? 

And then the vice chair of the board, Mr. Davis. Mr. Davis is 

well known to this committee, and our former colleague, and I 

guess were you made vice chair to investigate vice on the—— 

Mr. DAVIS. I think the IG has done a good job of that. 

Mr. MICA. All right. Welcome back, Mr. Davis, a good friend and 

former colleague. And I am sure they are very fortunate to have 

your service on the board. 

Well, we will start with some questions, if I might. 

So, the investigation started how long ago, Mr. Scovel? 

Mr. SCOVEL. Mr. Chairman, in the spring of 2011, we were asked 

by Mr. Wolf and Mr. Latham to undertake an inquiry of MWAA’s 

governance, transparency, and accountability. 

Mr. MICA. And I see you submitted it November 1st. And now, 

did your—since you submitted it November 1st, you watched some 

of the changes and implementation of some of your recommendations, or they were aware of your recommendations along the way? 

How do you feel about what they have done, and how much further 

is there to go? 

Mr. SCOVEL. Mr. Chairman, at Mr. Wolf’s request specifically, on 

May 15th, we conducted a briefing on our findings as of that date 

for the benefit of the Department, for MWAA itself, and for the 

local stakeholders in northern Virginia who are most interested. 

We had previously briefed the Department as well as MWAA leadership on what we were about to say to the local stakeholders specifically. But at that point, starting in the middle of May, we saw 

tremendous effort on the part of MWAA and especially on the part 

of the Department to get their arms around all of the problems 

that we had identified in the findings. 

Mr. MICA. So most of what you heard today you feel confident 

is correct, that they have taken positive steps to implement. 

The second part of my question, is there a lot more to go? Can 

you comment on that based on what you know of their actions to 

date? 

Mr. SCOVEL. Generally, Mr. Chairman, I can say that they have 

taken numerous positive steps at MWAA, and we are tremendously 

gratified by the attention and energy from the Department, 

through the accountability officer and through the negotiations to 

modify the lease arrangement with MWAA for running the airport 

facilities. Those are all positive steps in the right direction. 

24 

However, I have to note that I wear the title of ‘‘hired skeptic’’ 

that a member of this committee bestowed on me several years ago. 

I wear that title most proudly. And until we have seen a record of 

execution and data to substantiate, especially in the contracting 

area, that the improvements that are now on paper have actually 

been carried out over a period of time, I have to reserve judgment. 

Mr. MICA. I think we need to work with Mr. Wolf and others to 

make certain—and Mr. Latham—to make certain that, again, what 

we have heard today is not just on paper and part of it implemented, but all implemented. 

There were some pretty serious charges and some findings of— 

I termed it corruption when you are taking gifts, when you are— 

well, we had a whole host of illegal activities, in my opinion. I am 

not sure, I don’t know whether they fall under Virginia law where 

they were committed, or Federal law. But do you—will you have 

criminal referrals, or are you turning any of this over to any other 

authorities so that people who violated the law will be held accountable? 

Mr. SCOVEL. Mr. Chairman, to be clear, what we reported on November 1st was the result of an audit. There are investigations, 

criminal investigations, underway. Agents from my office are participating under the leadership of the FBI. Those are independent 

matters. I am not cleared to speak at this point—— 

Mr. MICA. OK. I don’t want to get into that. 

Mr. SCOVEL [continuing]. On what is developing along those 

lines. 

Mr. MICA. But, again, there are authorities, and it appears, too, 

there might be violations of State or other jurisdictional laws. Are 

you cooperating with any other authorities or making referrals, or 

are they reviewing this information? 

Mr. SCOVEL. An assistant United States attorney is—— 

Mr. MICA. Primary. 

Mr. SCOVEL [continuing]. Is spearheading the investigation conducted by my office and the FBI. I leave it to his good judgment 

on whatever authorities he may need to coordinate with. 

Mr. MICA. I guess you put personalities on a board, and sometimes you are going to have some weak regulations and some weak 

structure, but people perform well, and then in other instances people perform poorly and violate both the intent or actually the law 

and the spirit of the law. 

You heard, I think, Mr. Curto describe the changeover in the 

board members who were primary. Now, there are personnel also 

in place that actually participated. Some of the accusations were 

against the board members, some were against personnel. Now, 

Mr. Curto, you said there is only two left of the old members, is 

that—— 

Mr. CURTO. That is correct, Mr. Chairman. As of the new year, 

there will be only two board members that have served more than 

2 years. 

Mr. MICA. Well, I don’t want to get into a public forum about the 

two remaining board members. I will discuss that with Mr. Wolf 

and others. 

Of the personnel, the employed personnel, what changes have 

been made there? I mean, the board members go through a conVerDate Aug 31 2005 14:50 Feb 11, 2013 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-16-~1\76706.TXT JEAN
25 

firmation process or appointment process. Personnel are hired and 

fired. Can someone tell me who has been hired and fired and held 

accountable as far as employees? I guess the big offender here was 

the HR director, and he resigned; is that correct? 

Mr. POTTER. That is correct. 

Mr. MICA. OK. Who wants to tell me? Mr. Potter, tell us the status of the bad players. 

Mr. POTTER. Well, I will tell you this, that we have—— 

Mr. MICA. Pull that up. It is a little hard to hear you. 

Mr. POTTER. We have three vacancies that we are currently filling, the vice president of IT, the vice president of HR, and the 

manager of procurement. The three areas that they managed were 

highlighted in this report, and they are no longer with us. 

Mr. MICA. IG, is that sufficient to cover the personnel malfeasance that you saw? 

Mr. SCOVEL. Mr. Mica, I don’t believe it is my role to execute— 

to make those management decisions or to execute them; however, 

I will note—— 

Mr. MICA. Your investigation uncovered wrongdoing both by 

board members and employees, and if there are still bad players 

on the board, we can address that. If there are still bad players employed, some steps need to be taken. And you certainly must attribute some of the wrongdoing to some individuals who were in 

the employ. You said three people are—— 

Mr. POTTER. Well, if I could just add to that. We have been 

briefed by the IG this week in terms of identification of some of the 

players who played roles in some of this activity. When we went 

through that laundry list, several of the people that were identified 

are either no longer with us or in the process of being no longer 

with us. And, again, personnel management—— 

Mr. MICA. Can you advise the committee as to the progress of the 

process of, they are no longer with us—— 

Mr. POTTER. Right. 

Mr. MICA [continuing]. And provide us with a list? We are going 

to leave—we will leave the record open the next 3 weeks to give 

them enough time. Is that fine, Ms. Norton? 

Ms. NORTON. Yes. 

Mr. MICA. Without objection. 

[The information follows:] 

26 


Insert offset folio 7 here 76706.007

Response to House Transportation and Infrastructure Committee 

Metropolitan Washington Airports Authority Dec. 7, 2012 

In response to the Committee's request from the Nov. 16, 2012, hearing, below in Section 1, we have 

provided a list of personnel, by position, and their employment status with the Metropolitan 

Washington Airports Authority. These personnel were identified in the recent audit by the DOT 

Inspector General as individuals about whose actions the IG had concerns. 

The Committee also requested a list of Board members who have, or recently have had, relatives who 

are or were employees of the Airports Authority. That information is contained in Section 2 of this 

document. We would be pleased to supply any further information we obtain or any additional 

information requested by the Committee. 

Section 1: Employees and status of employment 

POSITION STATUS I ACTION 

Human Resources executive No longer employed by MWAA 

Information Technology executive No longer employed by MWAA 

Information Technology staff member Currently employed 

Chief executive officer Currently employed 

Chief operating officer Currently employed 

Public Safety investigator No longer employed by MWAA 

Human Resources manager Currently employed 

Business executive Currently employed 

Senior manager Cannot identify 

Section 2: Current Board members with relatives currently / recently employed 

Board Member H.R. Crawford (term expires January 2013) - Relative currently employed in MWAA 

Human Resources department; relative employed as student intern 2010-2012; relative employed as 

student intern 2008-2011. 

Board Member Michael Curto - Relative in summer student intern program, 2011. 

Board Member Tom Davis - Relative in summer student intern program, 2011. 
27 

Mr. MICA. And if you could provide us—again, the purpose of this 

is to hold people accountable—— 

Mr. POTTER. Right. 

Mr. MICA [continuing]. Make certain it doesn’t happen again, and 

then to see that the recommendations of the inspector general are 

carried through, and, again, that we restore trust, as the gentleman from Virginia Mr. Connolly said is so important in this 

process. So again, we want people held accountable. We want the 

board to act, and clean up the mess and, again, the failure that is 

so embarrassing here. 

Mr. SCOVEL. Mr. Mica, if I may, Mr. Potter, to his credit, has 

reached out to my office requesting specific information that we obtained from the Authority pertaining to misconduct and the names 

of individuals that we believe may have been responsible for it. My 

staff met with Mr. Potter and his chief operating officer yesterday, 

and we have begun that process to make all of that information 

available to them for their management decisions. 

Mr. MICA. Well, again, we have begun that. He said they are in 

process. We want it to continue and be complete, holding people accountable. Otherwise, you know, this becomes a kabuki dance, and 

we are not going to put up with that. 

Mr. POTTER. Thank you, Mr. Chairman, for recognizing the sensitivity of some of these personnel, and we will deal offline with you. 

Thank you. 

Mr. MICA. And even if it is by position, I don’t care about the 

names, but if people have violated a trust, and the inspector general has helped identify them, and we also have Ms. Moore and 

others who are working on implementing some of the changes, you 

don’t want the same cast of characters or violators in positions of 

trust. And we are going to clean house on the board and with employees and restore the confidence. 

Mr. Davis. 

Mr. DAVIS. Mr. Chairman, let me just say, I think the board, as 

Chairman Curto noted, is substantially reconstituted at this time. 

We welcome the oversight, the input from the IG’s office and the 

Secretary’s office. We are determined to clean house, let the chips 

fall where they may. 

Mr. MICA. Well, again, you can give us an interim report, and, 

you know, we will—in the new session I will ask that we follow 

through, because you want the right things done. 

Ms. Norton. 

Ms. NORTON. Mr. Chairman, I will yield to my colleague from 

Maryland, and I will have questions after her. 

Mr. MICA. Thank you. 

Ms. EDWARDS. Thank you, Mr. Chairman, and thank you to the 

ranking member. 

Mr. Scovel, I really—I appreciate the job that the IG does. I 

think it is important to look at what you did so that you don’t do 

it again. And thanks for highlighting that. And so in that—in that 

realm I want to ask you a couple of questions about the contracting 

and hiring processes or apparatus at the Authority. 

Contracts that were made with board members, those have all 

been terminated? 

28 

Mr. SCOVEL. My understanding—and I would ask for some help 

from Mr. Curto and Mr. Potter on this—is that those contracts 

have been terminated, or they will not be renewed. 

Ms. EDWARDS. And are there still children, grandchildren, contracts with spouses’ law firms; are those things still in place? 

Mr. SCOVEL. That I don’t know. 

Ms. EDWARDS. Mr. Curto? 

Mr. CURTO. No. I believe the contracts, all contracts with former 

board members and former employees have been terminated. With 

respect to relatives of employees or board members, I will let Mr. 

Potter address that specific question. 

Mr. POTTER. We are looking at all hiring that has been done in 

the past 5 years to determine how people got on board. But I will 

tell you this: We are going to be very fair about the process. If we 

have relatives of employees who competed open and fairly for jobs, 

and if the panels were fair, we are going to continue to employ 

some people. There is nothing wrong with having a relative work 

as long as they got there in an appropriate way. 

Ms. EDWARDS. Well, I mean, I don’t know that I agree with that, 

frankly. I mean, I think it depends on whose authority they report 

to, what their employment responsibilities are. That is why at lots 

of different agencies and in the private sector there are prohibitions around those hirings. I mean, there are a lot of jobs out there, 

and people may have to find other things to do. 

The contract that was with the law firm of the board member, 

is that board member still on the board? 

Mr. CURTO. Yes. That board member is me. 

Ms. EDWARDS. So it is your wife is the—works at the law firm 

that has the contract with the Authority? 

Mr. CURTO. No. The circumstances relating to that were as follows: The Authority requested an opinion of counsel from a law 

firm. I was not chairman at the time, I was not on the legal committee at the time, and the general counsel for the Authority made 

the decision to retain the law firm. My wife at the time was an employee of that law firm. She wasn’t an attorney. She wasn’t a partner in the law firm. She had no direct or indirect financial interest 

in the law firm. 

Ms. EDWARDS. Can I just ask, was that also competed, or was 

that just a sole-source contract? 

Mr. CURTO. It was a decision by the general counsel, and it was 

a sole-source contract. 

Ms. EDWARDS. Mr. Scovel, is there a problem with that? 

Mr. SCOVEL. If I may have a moment. 

Ms. EDWARDS. I know I only have a moment and 37 seconds. 

Mrs. SCHMIDT. [presiding.] I am going to yield you more time because I am interested in this question. 

Ms. EDWARDS. Thank you. 

Mr. DAVIS. If I could add, this was one of those situations, and 

I wasn’t in the loop in the decisionmaking on this, but you needed 

a law firm very quickly to get a very quick answer. So in a case 

like that, the general counsel just goes out to a series of firms, and 

I guess that was the decision that was made. 

Mr. CURTO. Congresswoman, the determination that was made 

was that although it wasn’t an actual conflict of interest, it cerVerDate Aug 31 2005 14:50 Feb 11, 2013 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-16-~1\76706.TXT JEAN
29 

tainly was an appearance of a conflict of interest. And at the time 

when the interim report was issued in May, I immediately made 

a statement recognizing, stepping back, that prospectively any actions I take would be to avoid even the slightest appearance of a 

conflict of interest. 

Ms. EDWARDS. Thank you. 

Mr. Scovel. 

Mr. SCOVEL. Ms. Edwards, if I may, these are the facts as determined by my audit team. As you well remember, on November 17, 

2011, Congress passed H.R. 2112, which amended the Airports Act 

to add additional seats to the board of directors and provided for 

the removal of directors for cause. 

The board apparently was concerned about the impact of that 

legislation on the board, and on November 18, 2011, members of 

the board instructed the general counsel to obtain a legal opinion 

on that legislation. When the general counsel asked members of 

the board for possible candidate firms, a board member, Mr. Curto, 

not yet chairman, but still a member of the board, suggested a firm 

where his spouse serves as the director of administration. The general counsel then contacted that firm, and arranged for that firm 

to begin drafting an opinion on the legislation. It was a sole-source 

contract, and it was executed without the immediate knowledge or 

involvement of the procurement and contract department of the 

Authority. 

Ms. EDWARDS. Thank you, Mr. Scovel. 

You know, I would just note that particularly in this region, 

there is a lawyer on every corner, and so it is not—and with lots 

of different expertise in and around this city. And so it does strike 

me that whether for appearances purposes or for actual conflicts of 

interest, it sure would make sense to find another lawyer. And if 

you need some help, I am sure there are plenty of people who can 

do that. 

Let me just—one last thing. How many children and grandchildren of board members are still employed by the Authority? 

Mr. POTTER. Well, we do not have an exact count. We are going 

through a process. 

Ms. EDWARDS. Is it more than one? 

Mr. POTTER. Yes, it is more than one. 

Ms. EDWARDS. More than two? 

Mr. POTTER. I don’t have an exact count. We are going through 

the process right now of having all of our employees fill out a form 

that identifies relatives either within the Authority or on the 

board. And that process is currently underway, and once that process is complete, we will be able to know. 

Ms. EDWARDS. Mr. Scovel, in your view does it present a problem 

to have close relatives who are relatives of board members as employees of the Authority? 

Mr. SCOVEL. Clearly, it does. And I would like to point out, Ms. 

Edwards, that for a long time the code of ethics that applied to employees, to the staff of the Authority, prohibited nepotism, yet the 

code of ethics, until recently revised, that applied to the board of 

directors was silent on nepotism. And it was through that gap that 

decisions to suggest, if you will, or to recommend, or even to insist 

that friends and family members be hired within the Authority, 

30 

those recommendations or suggestions were made by board members. 

Ms. EDWARDS. And have those recommendations been implemented in policy at the Authority? 

Mr. SCOVEL. My understanding is that the policy has been 

changed, or rather that the code of ethics that now applies to board 

members with respect to nepotism has been brought into conformance with what applied to employees as well. It is one of the recent 

positive changes I would certainly like to endorse and commend the 

board for taking. 

Ms. EDWARDS. Madam Chairwoman, if I could ask just one last 

question. 

Mrs. SCHMIDT. Go ahead. 

Ms. EDWARDS. Thank you very much, and I appreciate it. 

With respect to the contract with the board member that is now 

apparently terminated, I take it, how did that come about? Who 

asked whom to authorize the contract, and who approved it? 

Mr. SCOVEL. If I may have a moment, and then I will direct you 

as well to Mr. Potter, because both Mr. Curto and Mr. Potter engaged in, shall I say, missteps or misjudgments in their service on 

the Authority. They have been very candid in their discussions 

with me and my staff about those events, and I take it in a very 

positive manner that they are both here today and are available to 

answer all of your questions on these. 

However, as we understand the facts, as my audit team understands the facts, with respect to Mr. Potter’s decision regarding the 

former board member, it was not specifically a contract matter, but 

rather it was an employment matter, and it ran like this: Mr. Potter determined that he needed a new position with a certain person 

in mind, and that would be the former board member, but he did 

not follow standard processes to create or fill that position. This 

was an advisory position for a board member to occupy immediately upon departure from the board. It did not have a specific 

job description, but it did have a paycheck, $180,000 per year, beginning 1 day after that board member left the board. 

There may indeed have been a legitimate and compelling business need to secure the services of that former board member, but 

the process to create and fill the position was unsatisfactory. And 

this is the case that is highlighted in our issued report as an instance where senior officials circumvented established hiring positions both for current positions and also for new positions, to the 

detriment, most certainly, of the credibility and integrity of the Authority, and perhaps with a very harsh effect on the morale of all 

of the rest of the staff, who knew that this was going on. 

Ms. EDWARDS. Mr. Curto, did—was that contract to the board 

member let under your leadership? 

Mr. CURTO. Yes. Mr. Potter did employ that former board member this past year while I was chair. 

Ms. EDWARDS. And was there a conversation or other that ensued with other board members with respect to this, or was that 

just a decision between you and Mr. Potter? 

Mr. CURTO. It was a decision made by Mr. Potter, and he conferred with me. 

31 

Ms. EDWARDS. Did anyone else on your board ask you to engage 

in this contract with this former board member? 

Mr. CURTO. No. 

Ms. EDWARDS. Did the former board member ask you to engage 

her in a contract? 

Mr. CURTO. No. 

Ms. EDWARDS. And so you and Mr. Potter made the decision 

independent of anything or anyone else to let a contract with the 

former board member? 

Mr. CURTO. It was principally Mr. Potter’s decision, yes. 

Ms. EDWARDS. So you didn’t sign off on it or anything, but it was 

under your leadership that it happened? 

Mr. CURTO. Yes, it was during my tenure as chair, yes. 

Ms. EDWARDS. And so the other board members and staff who 

were engaged in behavior that was highlighted as egregious in the 

inspector general’s report, are all of them still working at the Authority? 

Mr. CURTO. I believe Mr. Potter addressed some of that inquiry 

earlier. He highlighted three senior-level positions; I believe the 

vice president for IT, human resources, and as well as a retirement 

in the procurement area. And then below the vice president level, 

there are a number of positions that he referenced earlier in response to an earlier question. 

Ms. EDWARDS. That are open—— 

Mr. CURTO. That are—— 

Ms. EDWARDS [continuing]. Or pending. 

Mr. CURTO. Some are no longer with the Authority, and others 

won’t be with the Authority. 

Ms. EDWARDS. But on the board, the board members who—who 

were in place over this period of this kind of behavior that is—you 

know, a lot of which is unethical, who knows what other labels we 

would attach to it, how many of those board members remain? 

Mr. CURTO. Well, as I related earlier, the board, beginning in 

this January, will principally be a newly constituted board. There 

will be, I think, approximately two board members that will have 

been on the board for more than 2 years. One of them was recently 

reappointed by Governor McDonnell. Another is Vice Chairman 

Davis, who will have been on approximately about 2 years. Everyone else will have had a tenure of less than 2 years, some as few 

as weeks, as of January. 

Ms. EDWARDS. Just as a matter for your consideration, do you 

think it is appropriate to remain on the board and Mr. Potter to 

remain as CEO while under your tenure these actions took place? 

Mr. CURTO. I would hope so. I think that the body of the report, 

most of the findings and conclusions of the inspector general’s report occurred prior to my time on the board and certainly prior to 

my tenure as chair. The misstep that I made with respect to the 

matter you referenced regarding the retention of the law firm, as 

I indicated, it was certainly an appearance of a conflict. It 

wasn’t—— 

Ms. EDWARDS. Well, the retention of the law firm at, I think, 

$100,000 and the contract with the former board member of 

$180,000, the travel, and other missteps of who knows how many 

32 

thousands of dollars, it is not just a simple matter, and with that 

I yield. 

Thank you, Madam Chairwoman. 

Mrs. SCHMIDT. Thank you, and I am going to be generous with 

everybody, but I am going to yield to myself such time as I need. 

Mr. Curto, I want to follow up on some questions that Ms. Edwards brought up. Regarding the employment of your wife’s—the 

law firm that your wife worked in in an administrative capacity, 

didn’t have clients, wasn’t going to lead to a better paycheck for 

her, did you tell the board that she was employed there when that 

contract was let? 

Mr. CURTO. In my financial disclosure I made it clear that my 

wife worked at that law firm. That is part of the normal financial 

disclosures. And when discussing it with the general counsel, I did. 

Mrs. SCHMIDT. You did? 

Mr. CURTO. Yes. 

Mrs. SCHMIDT. And the general counsel didn’t have a problem 

with it? 

Mr. CURTO. I am not sure it was brought to his attention at the 

very outset, but I think once I helped facilitate the outreach, I then 

did tell them. I think it was underway at that time. 

Mrs. SCHMIDT. I am confused. I mean, so you put it in a financial 

disclosure. Most people don’t read it. I have served on many boards 

in my time, and somebody makes a suggestion of a law firm, and 

one of the things that we always ask was, do you have any familiarity with it other than you know that it is a law firm? And they 

might say, well, I have used so-and-so as counsel in my past, but, 

you know, I don’t have any family members working there. So on 

the boards that I have served on in the past, we always brought 

that out into the open. That kind of a discussion was not made? 

Mr. CURTO. That discussion took place after they had been retained. 

Mrs. SCHMIDT. After they had been retained, OK. So not at the 

beginning. OK. 

Mr. Scovel? 

Mr. SCOVEL. Madam Chairwoman, just to add to that, and I 

think it may have just been clarified, but my audit team was informed by the general counsel that he was not aware at the time 

that he contacted the law firm and arranged for them to provide 

the requested legal opinion that Mr. Curto’s spouse worked for that 

firm. 

Mrs. SCHMIDT. OK. The other troubling aspect that I have is a 

former board member that is brought back at a substantial salary, 

$180,000—that is actually more than what a Member of Congress 

makes, so it is a pretty substantial salary—was brought back without any vetting, and a special position was created for this individual, am I correct, or that position wasn’t there before? Mr. Potter? 

Mr. POTTER. That is correct. 

Mrs. SCHMIDT. Why did we need that position, and was there any 

other reason why this—was it a lady? 

Mr. POTTER. It is a lady. 

The reason we needed the position was we have a significant 

challenge out at Dulles Airport. The challenge is that we have very 

33 

high cost per enplanement rates, largely driven by the fact that 

there has been a major capital investment of over $4 billion in recent years with an expanded international arrivals building, an underground rail to take you from the terminal out to the concourses, 

as well as other improvements, including the doubling of the size 

of the terminal. As a result of the capital investments coming to 

bear in terms of cost to the airlines, we have had to increase the 

cost per enplanements out at Dulles significantly, and it is affecting the competitive position of that airport. 

So when I got on board, I was looking to try and figure out how 

we could take advantage of the biggest asset we have at Dulles, 

and that is our land. And what I have come across is the fact that 

it is a very complicated community. There was a need for somebody 

that really understood the community, how developers work, how 

we interrelated between ourselves as a Federal leaseholder and the 

counties, because development on airport property obviously affects 

the counties, and there was a need to integrate our actions with 

the economic development communities in Fairfax, Loudoun, as 

well as the Commonwealth. And so I thought that the person that 

I hired was uniquely positioned to do that and would be able to 

ramp up very quickly an effort to do that. And I will tell you that 

in the course of the months that she performed that service, I got 

to meet and understand that community in a very rapid way. 

Now, in hindsight, as I have told the press and have readily admitted, my judgment was not good in terms of the hiring of that 

person. But given the situation, I wanted to move quickly to try 

and do the best I could to generate additional sources of revenue, 

nonaviation sources of revenue, for Dulles Airport. But I readily 

admit, and I was very candid with the IG when they came to speak 

to me about my motivation. That was my motivation, pure and 

simple. That board member had advised others on the board that 

she was leaving, and I thought that it was a service that could be 

performed. 

Mrs. SCHMIDT. Let me ask you, she was leaving. Was it to take 

another job, or what—she was leaving the board, and then suddenly you hired her to do a service outside of a board member, and 

you created this position. And I am understanding that you needed 

somebody to cobble things together. There was no vetting. She got 

$180,000 there. How long did she work, and what was the reason 

for leaving the board that she would have time on her hands and 

then suddenly use up that time doing this job? I am confused. 

Mr. POTTER. Well, she was leaving the board, as she stated, because between her board duties, the fact that she had been running 

a company, and she was dealing with some health issues, she needed to concentrate her efforts on doing one job, and one job alone. 

She was seeking to close down her business and work a 40-hour 

week versus an 80-hour week. 

Mrs. SCHMIDT. So she left the board because she had some health 

issues. She had a job. Does she own her own company? 

Mr. POTTER. She did at the time. 

Mrs. SCHMIDT. She did at the time. And so she closed the company down and got a $180,000 job, and how long did she work at 

that job? 

34 

Mr. POTTER. Well, she ended up working for about 6 months. I 

don’t know the exact time. I can give you that. 

Mrs. SCHMIDT. And then why did she leave? 

Mr. POTTER. Because the fact that one of the requirements in the 

letter that we received from the Governors and the Secretary of 

Transportation and the mayor were to end all contracts with 

former board members. In discussions, followup discussions, with 

the Secretary’s staff, it was made clear to me that the expectation 

was we end those contracts under whatever terms they were, and 

put them in our past and look forward. 

So we complied with that, and we did as we were instructed. We 

ended all of those contracts with the sole purpose of putting them 

behind us, starting a new day, and reconstituting whatever works 

were required from those contracts. 

So I have to tell you, when it comes to those contracts, we had 

people who were doing a good service—and I am not talking about 

this individual in general—but we had contracts with former board 

members who were actually, prior to my time, recruited by my 

predecessors to help us do work. For example, we had a few folks 

who were helping us with lobbying efforts in Richmond. I can tell 

you the contracts that they had were under $50,000, and you would 

be hard pressed to replicate that in the private sector, and—— 

Mrs. SCHMIDT. An arm’s length for a long time and then suddenly—— 

Mr. POTTER. But we did not use any consideration. We recognized that the image of the institution is hurt by the fact that we 

have these contracts. We put them to an end, and the reason that 

they were problematic was not the work that was being done, it 

was the way they were established without competition. So we put 

them to bed, and we are going to recompete for those services that 

we continue to need. And I am going to recruit for somebody to perform the services that I just described because they are very much 

needed by the Authority. 

Mrs. SCHMIDT. OK. I am going to do two more questions, and 

then I will turn it over to the gentle delegate from this District. 

And I am going to be very liberal with everybody for time since we 

have gone off the map, but I think this is a very provocative discussion, and I think you will all agree. 

Mr. Scovel, do you have anything to add to the discussion about 

the employment of this individual? 

Mr. SCOVEL. No, I don’t. What my audit team has determined is 

what I have already related for the committee’s consideration. And 

we have found no evidence to suggest that Mr. Potter’s decision to 

employ her and for the reasons that he just outlined were anything 

other than what he has spoken to this morning. 

Mrs. SCHMIDT. Do you think that the salary of $180,000 was a 

fair salary? 

Mr. SCOVEL. Not for me to judge. I, frankly, don’t know everything that she was supposed to be doing. We were looking strictly 

at the process by which she was hired and the apparent circumvention of established hiring processes for creating the position and 

then filling it. 

Mrs. SCHMIDT. Finally, Mr. Wolf and Mr. Connolly have a bill 

that would shrink the board, and change the dynamics and direcVerDate Aug 31 2005 14:50 Feb 11, 2013 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\11-16-~1\76706.TXT JEAN
35 

tion of MWAA. How do all of you feel about that? What is your position insight on their bill? 

Mr. DAVIS. Can I start? Part of the frustration is if this were just 

the airports, it worked pretty well. Where this thing got complicated is the Airports Authority undertook the responsibility of 

building the rail project out to Loudoun County—actually two stops 

past the airport. It was at that point this got very complicated. It 

is not a normal skill set. Members from other regions started coming in and putting bells and whistles on the contracting, and it became very, very divisive. We got into a political food fight is the 

best way to put it. The Secretary got involved, and now, I think, 

we are going to bring the first phase of the rail project in on time 

under the amended budget. 

But it got complicated. Virginia, I think, has felt that this rail 

system is the largest rail project in the State. They really felt they 

needed to have the input and be able to decide how it should be 

built and where the stations should be located. Having members 

from outside Virginia making decisions that, in Virginia’s judgment, were costing money and not being cost-effective, I think 

caused a lot of the problems. And so I think the legislation comes 

from that. 

When it comes to the airports, you know, I think the system 

worked pretty well for a long time, outside of some of the cronyism 

that developed. 

And I just would add, I think Jack Potter is the best thing that 

has happened to this Authority. He was Postmaster General before 

this. He has come in. He has had to manage a difficult board with 

some of the decisions. But as Mike has said now, he will have basically a brand-new board with a brand-new direction. 

We have nothing to cover up. It is open kimono. Whatever the 

IG says, we want to do the right thing. We serve without compensation. I didn’t ask for this board. Originally when I was appointed, they said 12 meetings. We had 38 meetings my first year. 

It takes a lot of time away, and we do this for the public good. 

So we are doing everything we can. We found, I think, the best 

CEO. He has had to answer to a board that has just very recently 

turned over. And we are, I think, behind him at this point in the 

tough decisions he has to make. 

Mrs. SCHMIDT. Thank you for your input, and I share—my concern is most of this is—all of this is going on in Virginia, and yet 

you have to listen to folks outside the district, and while they are 

good-hearted—they have goodwill, I know, as a local person, and 

we had zoning issues. Everything comes to home. And you had 

somebody outside—we had a township situation where we owned 

the zoning, but the county wanted to put its input in, and we, quite 

frankly, didn’t really care much about what the county said because it was all local. 

So I can understand your frustrations with other areas talking 

about where the line should go and where a stop should go when 

it is in your backyard and not theirs. 

Mr. DAVIS. I think the board, the new board, is pretty much in 

sync is my impression. There were some very controversial decisions about station placements, PLAs, and construction in a rightto-work State. But I think at this point the board is moving in a 

36 

positive direction, and I think the chairman has done a good job 

of uniting it. Some of the decisions made in the past were made 

with former board members who had a different cultural view of 

the way the place ought to operate. I feel very good about the direction or I wouldn’t stay on this board. I have got other things to do 

with my time. 

Mrs. SCHMIDT. Thank you so much for your time. 

Ms. Norton. 

Ms. NORTON. Well, I appreciate, Mr. Davis, that you indicated 

that there is a new start and a new, let us say, regime, and that 

is why I regret that with Members sitting on this rostrum, who 

have very little information about the 1986 Airport Act, deciding 

this is all a Virginia matter. Just let me say for the record, nobody 

could be more sympathetic with the notion of wanting what happens in one district not to be interfered with by people in another 

district, and no one obviously saw the 1986 Airport Act as anything 

of the kind, saw it as very necessary. It was agreed to by all involved. 

I would have absolutely no objection to looking at that 1986 act. 

What I object to is preemptory action by one Member of Congress 

to take over the whole Airports Authority when neither this committee nor any other committee has any information about why 

this was done this way. 

And this is not the place to hassle this out on a home-rule basis. 

If people want to talk about home rule, let’s start with the District 

of Columbia; then we will get to Virginia. You have got a compromise on that now. I hope that doesn’t get reopened. 

Let me ask a question. I am sorry I was called out for a few minutes, but I would like to ask a question in relation to the bill I have 

just introduced. I introduced it in good faith. I believe there should 

be hearings before we decide what to do. But I introduced it because I didn’t want to see us or see the Airports Authority the kind 

of hassle it took to get the procurement regulations that now guide 

most of the Federal Government. 

So this question is really taken from testimony from Mr. Curto, 

who says that the contracting manual and other procedures to correct best practices and promote fair and competition is in revision. 

And he says the manual is a lengthy and highly technical document. Tell me about it. I am sure it is. 

Now, what I want to know from—I suppose this question is for 

Mr. Scovel. And of course I am quoting from Mr. Curto’s testimony, 

and of course Mr. Potter would be the one to implement whatever 

comes out. 

Do you believe that the Federal acquisition laws and regulations, 

which I didn’t—I didn’t look to see when they have been enacted, 

but all I know is they have stood the test of time—do you believe 

that they could be useful here, rather than going through the kind 

of procedure which Mr. Curto in his testimony calls ‘‘lengthy and 

highly technical’’ so that we could get more quickly to settle what 

should govern this independent body that is, for all its effects, a hybrid body but more closely related to the Federal Government than 

to any other part of the compact? 

Mr. SCOVEL. Ms. Norton, thank you. Your question relates specifically to adoption of the FAR as the acquisition provision that 

37 

would apply to MWAA. I am glad you did not ask for my endorsement of your legislation because I don’t believe that is my role. 

However, I think I can speak to the underlying proposition that the 

FAR, indeed, is a useful benchmark or a baseline on which MWAA 

may build its acquisition function. 

In fact, relating back to the original Airports Act, which you 

mentioned, you will remember that the GAO was assigned an audit 

role with regard to MWAA and specifically instructed to determine 

whether MWAA’s acquisition function was being executed, quote, 

‘‘in accordance with sound Government acquisition principles.’’ And 

that refers, but not in so many words of course, to the FAR. 

So that is already embedded in one form in the underlying legislation. And our audit, released on November 1st, used the FAR as 

a benchmark as well because we determined that that would be the 

best source of sound Government accounting principles on which to 

judge MWAA’s execution of its acquisition responsibilities. 

Ms. NORTON. Well, thank you, Mr. Scovel. 

Mr. Curto, Mr. Potter, do you see my point? And do you agree 

with Mr. Scovel? 

Mr. POTTER. I do see your point, Delegate Norton. And I would 

just like to comment that our contracting manual has been reviewed by GAO. It is in compliance with FAA requirements, because we are spending Federal money, so we have to comply with 

those requirements. It has been reviewed by the FAA. Recently we 

changed it—— 

Ms. NORTON. Mr. Curto says, ‘‘We are revising our contracting 

manual and other procedures.’’ 

Mr. POTTER. Right. I am just—— 

Ms. NORTON. Is it revised already? 

Mr. POTTER. It is in the process of being revised. But over time 

it has been revised to be compliant with FAA requirements because 

we do spend AIP money. 

With the rail project—— 

Ms. NORTON. Mr. Scovel, was the manual in compliance, so this 

is something we don’t even have to worry about? It was already in 

compliance with—— 

Mr. POTTER. It—— 

Ms. NORTON. Just a moment. I have asked Mr. Scovel, who I 

think is the authority on this issue. 

Was it already in compliance? Do you regard it as already in 

compliance? Mr. Curto says they are undergoing a lengthy revision, 

so I am just trying to get the facts here. 

Mr. SCOVEL. It was in compliance on a number of important respects. However, with respect to other important factors, we would 

judge it not to be, specifically as it relates to fostering or encouraging competition. 

The sole-source requirement, for instance, in the FAR that requires all Federal agencies to publish a notice of an intent to award 

a sole-source contract before the contract is executed, to permit 

watching contractors who may have an interest in the proposition 

to come in at the last moment and say, ‘‘We can deliver that service 

at a better price,’’ that was not a part of MWAA’s acquisition manual, and clearly it should be. 

38 

Ms. NORTON. And that, of course, was what I found most troubling, the number of sole-source contracts, a very substantial 

amount, has been unheard of in my own service in the Government. And the so-called categorical—what in the world is a categorical exception, for example? 

Mr. SCOVEL. It is an exception to the rule that is stated in 

MWAA’s acquisition manual that competition for contracts over 

$200,000 must be engaged in. However, there were a list of six categories of exceptions for which that rule could be waived. It was 

waived de facto by virtue of being included in the manual. But justification for that waiver, for that exception, had to be included in 

the contract file. 

When my audit team went in and looked at a sample of contracts 

that had been awarded using these categorical exceptions, we 

found 56 percent lacked adequate justification. So we couldn’t tell 

exactly what was the basis for executing particular contracts under 

these so-called exceptions. 

Ms. NORTON. So, Mr. Potter, you may have misunderstood my 

question. I understand that you are in the process of revising. Well, 

who wouldn’t be, given the criticism that sole-source contracts have 

received? 

I am simply trying to find whether there is a more rapid and 

sure way, instead of having your own manual—which, remember, 

you have had your own manual before—to adopt regulations that 

would never be questioned because they have been tested and because they are used every day by virtually every Federal agency. 

Why would that not be the fastest and perhaps best way to get to 

the best practices? 

Particularly considering that these procedures can be altered to 

fit a particular agency. So there are small, minor kinds of alterations because every agency is different. Yet every agency goes to 

this tested set of regulations and gives the kind of fair notice that, 

to be fair, I think members of your board never had. I mean, when 

they are told that there are categorical exceptions for a contract 

over $200,000, well, you can expect that they will then, of course, 

expect them to be awarded. So while they are being criticized and 

while the staff is being criticized, let’s remember that they were, 

in fact, abiding by your rules. 

And wouldn’t, given the criticism that MWAA has received, 

wouldn’t it put you above criticism to simply adopt the same Federal regulations that every other agency now has adopted? 

Mr. POTTER. We have committed to our board to have a new contracting manual by the first quarter of next calendar year. We are 

working very closely with the—— 

Ms. NORTON. 2013? 

Mr. POTTER. 2013. We are working very closely with the accountability officer to modify our contracting manual to live up to the expectations that are in the FAR. However—— 

Ms. NORTON. Are you using the FAR as a guide? 

Mr. POTTER. Yes, we are. However, we are not the Federal Government, and there are, for example, appeal rights that do not exist 

legally—— 

39 

Ms. NORTON. Of course. And there are many differences that 

other agencies have and have adapted in their own regulations. Mr. 

Potter—— 

Mr. POTTER. So, in short, we are living up to the spirit of what 

you want to do, but it can’t be totally comprehensive—— 

Ms. NORTON. I understand. 

Mr. POTTER [continuing]. Because of restrictions in the law. 

Ms. NORTON. And that goes without saying. You understand, of 

course, the GAO is going to look at what you produce. If you are 

already there, who would want to put you through anything other 

than—and if you were following the FAR, I would have no objection 

to that. 

Mr. Davis? 

Mr. DAVIS. Actually, I think your legislation sets a bar that we 

have to meet. It is not clear whether we do it exactly through the 

FAR. We need to be a little more nimble on bid protests and notice 

requirements and the like. 

But I appreciate the fact it sets a bar for us in terms of the 

transparency and the notice requirements that we need to meet. 

And I think it is fair to say we want to meet that bar. We may 

do it slightly differently in some areas, but we could work with you 

on that. I think it would be helpful. 

Ms. NORTON. I would appreciate it. I am suggesting that anything that keeps from you reinventing the wheel ought to be useful 

to you. 

Can I ask if law contracts, law firm contracts, all fell within this 

categorical category? Mr. Scovel? 

Mr. SCOVEL. They did, Ms. Norton. One of the key categories was 

legal, financial, and legislative representational services. Those 

were deemed a de facto exception to the rule that contracts over 

$200,000 needed to be competed. 

Ms. NORTON. Uh-huh. I just want to say for the record—I am 

sure Mr. Davis will confirm this today—a business often doesn’t 

give retainers anymore. It essentially makes law firms compete for 

their business. Because this is no longer the world in which we 

once lived, and that was long before—long before this recession. 

Law firms woke up to the fact that, while you don’t always go 

with the low bidder, that it is nonsense not to compete any sizable 

contract, in the same way that anybody would go to more than one 

contractor. Because before you went to do landscaping in his front 

yard or before he went to have his home painted, who would ever 

go to one painter and say, ‘‘How much does it cost to paint the 

front of my house? You’ve got the job’’? If you wouldn’t do that in 

your own personal business, do not expect it to be acceptable to the 

Government of the United States or to an independent agency that 

was created by the Government of the United States. 

One more question, Mr. Potter. You were Postmaster General of 

the United States, which means you ran one of the biggest businesses, as it were, in the world. Did you have your own regulations? What regulations did you use then? And could you have done 

these kinds of categorical contracts, or did you, in the Post Office? 

Mr. POTTER. Well, we were not under the FAR. We had—— 

Ms. NORTON. Yeah, I understand that you were an independent 

agency. 

40 

Mr. POTTER. We had our own procurement manual. Obviously, it 

emulated much of what was in the Federal Government. And, no, 

we did not do the type of sole-source contracting that the Authority 

has done for years. 

Ms. NORTON. So you adopted this only because you found it in 

place there? 

Mr. POTTER. Well, I didn’t adopt it at all. In fact, I eliminated 

the use, put out an order that we will not use, once I became aware 

of it, categorical exceptions for professional services contracts. And 

I did that months ago. So—— 

Ms. NORTON. You did it when it was—— 

Mr. POTTER. Once I became aware of it, Delegate Norton. 

Ms. NORTON. Yeah. Well, I am very pleased that you have done 

it. 

And I appreciate the time you have given me, Madam Chair. 

Mrs. SCHMIDT. Thank you. 

Mr. Cravaack, you may have as much time as you need. 

Mr. CRAVAACK. I am the last guy left, so there you go. Appreciate 

it. 

Congressman Davis, I got a quick question for you. You were a 

board member when there was a previous board member that was 

rehired; is that correct? 

Mr. DAVIS. Right. Correct. 

Mr. CRAVAACK. OK. How do you feel as a board member not 

being referenced in hiring this individual by Mr. Potter and Mr. 

Curto? 

Mr. DAVIS. Well, I was aware. I mean, there were board members it was run by. So it was not—— 

Mr. CRAVAACK. So was it approved by the board? 

Mr. DAVIS. No, it was not approved by the board. This is his—— 

Mr. CRAVAACK. Is that standard practice? 

Mr. DAVIS. Generally, the CEO acts, and he sounds this out. This 

was a complicated situation in this particular case with the member who had been a former chairman of the Authority and who did 

have an expertise in the area Mr. Potter talks about. 

Mr. CRAVAACK. If I was a member of a board and my CEO took 

action and the chairman took out without me really being involved 

in the yea or nay, I, as a board member, would be pretty upset 

about that action—— 

Mr. DAVIS. Right. 

Mr. CRAVAACK [continuing]. I have to admit. To be honest with 

you guys, this sounds like a can of worms, I mean, sitting here taking a listen to this. 

Mr. Scovel, tell me, why do you think it came to this? How did 

it come to this? How did this board come to this? 

Mr. SCOVEL. Mr. Cravaack, I think it is captured in a line from 

the concluding paragraph of our report of November 1st. MWAA is 

an independent public body, but over the course of the last decade 

and a half, the focus became the independence of the body and less 

so on its public responsibilities, to the extent that, as we phrased 

it in our report, the prioritization of personal agendas excluded consideration of the best interests of the Authority. 

And our report is replete with examples of it, I am sorry to say. 

I know you asked Secretary LaHood what he thought was the most 

41 

egregious example, and he gave you one that appeared to him. I 

could answer that question, too. And if I were to try to pull together examples that are buried like nuggets throughout our report 

of missteps—again, I will continue to use that word—but missteps 

of senior leadership, both board and staff at the Airports Authority, 

it would be a very sorry tale. 

And I know it might sound like a chronicle from ‘‘The Little Shop 

of Horrors,’’ but it has implications for how these jewels in the national capital area are run. These are Federal assets—— 

Mr. CRAVAACK. Right. 

Mr. SCOVEL [continuing]. Worth on the balance sheet of fiscal 

year 2011 $9.1 billion. They generated revenues in fiscal year 2011 

of exceeding three-quarters of a billion dollars. Forty-two million 

travelers passed through those two airports in calendar year 2011. 

Every dollar of revenue is derived directly or indirectly from the 

taxpayer or the traveler. And the board, as I stated in my opening 

statement, has a fiduciary responsibility to the Government of the 

United States and to the taxpayer and to the traveler to make sure 

that every dollar is expended properly and prudently. 

Mr. CRAVAACK. Agreed. 

Mr. SCOVEL. And, for instance, if you were to ask me again what 

I considered the most egregious example, it would be this: the fact 

that, since 2003, 7 former board members and affiliated firms have 

been awarded 30 contracts, amounting to almost $2 million. Out of 

those 30 contracts, 26 were for lobbying services. That raises at 

least the appearance that these contracts were nothing but a parachute for departing board members. 

One former board member was awarded 16 sole-source contracts, 

totaling $262,000 over the past 10 years, the first such contract 

only 3 months after the member left the board. Another former 

board member was awarded eight contracts, totaling over $500,000. 

Now, I do want to note that as a result of our audit MWAA has 

terminated contracts with former board members and has not renewed contracts with other former board members. And in September 2012 the Authority approved a new ethics code prohibiting 

contracts with board members for 2 years after the conclusion of 

their service. 

Mr. CRAVAACK. Well, it sounds like the reason for the results of 

this current board is because of your investigation, Mr. Scovel. 

Would that be a correct statement? 

Mr. SCOVEL. We have certainly assisted. But I do want to give 

great credit to Mr. Wolf and Mr. Latham for alerting us to it, for 

putting us on it. 

And I also want to give great, great credit to Secretary LaHood, 

who had seized on our preliminary findings released in May, appointed an accountability officer, and together with the other appointing authorities, delivered a letter in August to the Authority 

expressing—and this is a quote—their ‘‘outrage’’ over some of the 

findings that we had reported in May, and is also now undertaking 

to renegotiate the lease under which MWAA operates, occupies, 

controls, and uses—and those are the words in the lease—these 

valuable Federal assets on behalf of the Department. 

42 

Mr. CRAVAACK. Well, Secretary LaHood said the only reason this 

really initiated was from what he read in a newspaper article. So 

kudos to him. 

Mr. Potter, you didn’t understand about the category issues. As 

the CEO, how could you not? You said you only found out about 

it a couple months ago. How could you not be aware of these? 

Mr. POTTER. I was not aware of the use of categorical exceptions. 

I was aware of some. For example, we buy off of a COG contract, 

the Council of Governments for the metropolitan area. That is one 

of the procurements that is considered a sole-source contract. And, 

again, I think we need to work through how we categorize some of 

those. 

Again, I was not aware of the history that was just described was 

over a 10-year period of time. So I wasn’t aware of those contracts. 

They weren’t coming to me for approval. And once I became aware 

of them, again, I moved very quickly to try and resolve those matters. 

Mr. CRAVAACK. Well, I appreciate it. 

In the military we have a thing called ‘‘lack of confidence.’’ And 

to be honest with you gentlemen, I have a supreme lack of confidence in your board. And if it was up to me, which it is not, I 

would dissolve the board and create a new one. But that is just my 

opinion. 

Mr. DAVIS. Fine with me. 

Mr. CRAVAACK. Yeah. I know. Mr. Davis going—— 

Mr. DAVIS. Fine with me. 

Mr. CRAVAACK. Hey, I am ready to pull the ejection seat, right? 

Mr. DAVIS. We get paid nothing. I mean, as I said, 38 meetings—— 

Mr. CRAVAACK. I understand that. 

Mr. DAVIS. It is a labor of love. And although my perspective 

might not have always been perfectly appreciated, I look at where 

we are today versus 2 years ago, and I say, just give us some time. 

We are really moving in the right direction. These guys are determined to take us there, if that is any comfort at all. Keep watching 

us. We want to prove ourselves. 

Mr. CRAVAACK. Thank you, Congressman. I appreciate it. I yield 

back. 

Mrs. SCHMIDT. Thank you. 

And I want to thank the gentlemen for coming. You were very 

courageous and very open, and we appreciate that. And good luck. 

And may you all have a good holiday on Thursday. 

We will end this. Thank you. 

[Whereupon, at 11:20 a.m., the committee was adjourned.] 

43 


Insert offset folio 10 here 76706.010

SE;\!OR l)EMOCRXflt' WHIP 

COMt\UTTEE O~ SCIE:,>(CI';, SI',\CE 

.\;\D TECHNOtOG) 

R-\'\.KI"G MHHlER 

CmIMnTEt, O~ TRA ":-iJ>ORT-\l'IO~ 

A:-;n INFR.\~TRlTCn;RE 

SlB('mJ:l,IITTHoo~WA1U~ 

RI \Ol KCrS & E"VlRO"\1!<\T 

Sl'n('O\lMIITEE or-; AH",'IIO'l 

~ddffyfjJlYl~ $~ 

St~BCO\I~llT!H. 0\ HI(,J·l\\A'l''> \"'1) TR.\,"SIT (Cungrcss uf tip.' l1nitclI §>iaics 

3011) J;iistrid. iir.,"s 

CO'llGR£~SIO"'.·\L BLACK CAPel'S 

Cus..IR, 107'" CO~(;RESS 

Statement for the Record 

Congresswoman Eddie Bernice Johnson 

House Committee on Transportation and Infrastructure 

Friday, November 16,2012 

PLEASE RESPOND TO 

W.\,SHJ,,'(;TON Orncc 

2468 RAYBl Rt'; BUI [)L'>G 

WA~lIlNOTO:-<, DC :20515'4}}O 

(202) 225~8kB5 

WWW.f!Ol ~L (KlV/r::BJOHNSON/ 

RI·P.LR.J(lH"SO'\@\MIUIOl'SE,G()\ 

Metropolitan Washington Airports Authority (MWAA): A Review of the 

Department of Transportation Inspector General's Findings and Recommendations 

According to both recent media accounts and the Department of Transportation 

Inspector General's report, the operations and contracting policies utilized by 

Metropolitan Washington Airport Authority are of very serious concern, and 

exemplify an egregious abuse of taxpayer dollars. 

To cite only one example, the Airports Act and the lease agreement between DOT 

and MW AA require the Authority to award contracts over $200,000 on a 

competitive basis. Yet, of the 190 contracts awarded from 2009-2011, only 68 

contracts were awarded with full and open competition. Likewise, the report has 

uncovered improper hiring practices, nepotism, excessive salaries, and 

questionable use of funds. 

We must eliminate what appears to be a culture of corruption that has gone on for 

years. While several actions have been taken at the behest of Secretary LaHood, it 

appears that MWAA has a long way to go towards restoring the public's trust and 

proving they are competent stewards of the public'S tax dollars. As Inspector 

General Scovel has noted, there are remaining concerns and additional measures 

are necessary to correct MWAA 's flawed policies and practices. 

I thank the Chairman and Ranking Member for holding this critical hearing and 

look forward to Secretary LaHood and the Inspector General's recommendations. 
44 


Insert offset folio 8 here 76706.008

STAn;~I~:i\T OF 

THE HONORAnLE ELE,\i\OR 1I0L~lES NORTON 

.FllLL COM~IITTEE HF.A1UNG ON 

"MF.TROJ'OLITAN WASIIlNGTON AIRPORTS AUTHORITY (J\t1WAA): A l{EVIEW OF THE 

DEPARTMENT OFTRANSI'ORTATJON INSPECTOR CENEnAL'S FIN])JNGS ANI) 

RECO~I~lEN[JATIONS" 

NOVEMIlER 16, 2012 

Mr. Chainnnn, thank you for toelay's oversight hearing on the Metropolitan Washington 

Airports ;\uthori ty (M W AA). MWAA is an indepcndcnt public hody created by Congress under 

the iVIctropolitan Washington Airports Act of 1986 (Airports Act), which authorized a compact 

betwcen the Comlllonwcalth of Virgin in Rnd the District of Columbia. MWAA, with 1,400 

employees, !eases tl'om the federal govcrnment and manages Ronald Reagan Washington 

National Airport and Washington Dulles International AirporL In addition to managing airports, 

MWi\A is responsible for the Dulles Corridor Mctmrail project, with an estimllted cost 01'$5.8 

billion, including $977 million in federal funds. 

This hearing is timcly and important given the Department ofTransportatio!l Inspector 

General's Audit Report (IG Report) re1eascclthis month and the recent nows stories about 

inappropriate spending by MWAA Board members, potential eontlicts of interest, and 

inadequate contracting policies and procedures. The. lG report concluded that "MW A;\ '5 

contracting policies and practices are inslIftlcient to ensure compliance with the f\irpor(s l\et and 

the leasc agreement between DOT and MWAA," und that "the code of ethics and rclat<:d 

)vlW!\i\ policies Bile! procedures in place nt the time of our audit lacked the rigor needed to 

ensure credibility and the integrity of manage men I and employee decisions." 

Since tIle IG's draft report was released in May, IvIWAA has taken some actions to 

address thcsc issues, including approving a lIew travel policy and a new code of ethius for Boare! 

members and employees. MWAA also has revised the Board's bylaws and its Freedom of 

lnfonnation Act policies, and has terminated contracts with fortner Home! members. However, I 

belicve 1hat more action is needed. 

To address the contracting policies, which have perhaps beenlllost troubling, I introduced 

yesterday ILK 6592, lor which j am now seeking cosponsors, which would require MWAA to 

cOlllply with the Federal Acquisition Regulations, the set of rules that govern all aspects of the 

acquisition proccss for virtually cvery federal cxecutive branch agency. Given the continuing 

owncrship of the airports by the feeleral government, MWAA's creation by Congress, and the 

significant federal taxpayer dollars for which MWAA is respollsible, there is no reason why 

M W 1\/\ :>houkl usc a dinerent standard than federal agencies, particularly given the 

shortcomings reported by the IG. It certainly wOlild make no sense for i\1WJ\A to attempt to 

reinvcnt a new set of procurement procedures and ignore the long-testecl federal Acquisition 

Regulations, which provide legal guidelines tor every aspect ofprocuremcllt and maximize 

fairness and tWllsparency. 
45 


Insert offset folio 9 here 76706.009

I al11 gratefill to Secretary LaHood for his qlliek attention to the IO's findings, appointing 

an Accountability Ofticer to work with MWAA to strengthcn its policies. In addition, Secretary 

LaHood scnt a letter with the Governors of Virginia and Maryland ane! the Mayor of the District 

highlighting their concern with the lack ol'accountability and transparency at MW1\A ane! 

demanding speci fie reforms. 

My bill, along with the steps that MWI\A has already taken anel is continuing to take, 

should help MWAA regain its bearings. llook forward to hearing from today's witnesses about 

what other reforms are necessary and how we can ensure tilat lV1WAA is a good steward of the 

valuable federal assets it controls. 

2 
46 


Insert offset folio 11 here 76706.011

Congressman Chris Van Hollen Testimony 

Committee on Transportation and Infrastructure Hearing on 

"Metropolitan Washington Airports Authority (MWAA): A Review of the 

Department of Transportation Inspector General's Findings and 

Recommendations" 

November 16,2012 

Thank you, Chairman Mica and Ranking Member Rahall for the opportunity to submit testimony 

for the record today on the review of the Department of Transportation Inspector General's audit 

of the Metropolitan Washington Airports Authority (MWAA). As a member with many 

constituents who use the Reagan National and Dulles airports, I appreciate the chance to share 

my thoughts on the findings of this report. I also thank Congressmen Frank Wolf and Tom 

Latham for requesting this audit. 

MW AA is tasked with a broad responsibility, managing two airports and their development. It 

also supervises the Metro's Silver Line extension to Dulles, a $6 billion project that will have a 

major impact on transportation and development in our region. It is critical that MW AA be a 

responsible steward of these projects and operate efficiently and fairly. 

Unfortunately, as today's report shows, MW AA has failed to hold itself to a high ethical 

standard, instead cultivating a culture of cronyism and kickbacks. The Inspector General reports 

that MW AA's standard for contracting was inadequate or nonexistent, with the Board 

improperly awarding exemptions to competitive bidding rules in approximately two-thirds of the 

contracts. Similarly lax hiring practices led to the creation of new positions without job 

descriptions or fair and open recruitment. And while MW AA is required by the Airports Act and 

its lease to have a code of ethics, the Inspector General reports that this code and its enforcement 

has failed to prevent clear conflicts ofinterest. 

I appreciate that the Board has taken steps to update its code of ethics and increase transparency. 

However, there is still much work to be done to ensure fair and open competition for contracts 

and employment. MWAA must take this report and its recommendations seriously and work 

quickly to correct its practices and ensure that MW AA manages its public assets fairly and 

transparently. 
47 


Insert offset folio 12 here 76706.012

Statement of Congressman Gerald E. Connolly (VA-Il) 

Committee on Transportation and Infrastrncture 

Metropolitan Washington Airports Authority (MW AA): 

A Review of the Department of Trallsportation Inspector General's Findings and Recommendations 

November 16, 2012 

Chairman Mica, Ranking Member Rahall, and members of the Committee, thank you for holding this oversight 

hearing on the findings and recommendations contained in the U.S. Department of Transportation (DOT) Office 

oflnspector General (OIG) Audit Report of the Metropolitan Washington Airports Authority's (MWAA) 

management policies and processes. I appreciate the opportunity to testifY on this matter of great economic 

importance to our region, particularly Virginia's II th Congressional District. 

I commend the leadership of Congressmen Wolf and Latham in requesting Inspector General (IG) Scovel 

initiate an audit of MWAA operations. I also applaud Secretary LaHood's proactive leadership and commitment 

to not only overseeing, but more importantly, actively assisting MW AA in implementing needed reforms. 

Appointing an Accountability Officer was an important first step towards transforming the Authority, and the 

Secretary has my full support in regard to DOT's effort to amend its current lease with MW AA to enhance 

accountability, transparency, and internal controls. 

We must not forget that as a self-funded, independent organization employing approximately 1,400 employees, 

MW AA is far more than its Board of Directors and senior leadership. The poor performance of some political 

appointees and senior managers should not tarnish the excellent work performed by the Authority's career staff 

members, who have admirably kept the Dulles Corridor Metrorail Project on track to be completed on time and 

within budget, and in their day-to-day work, ensure orderly operation of the airports, management of the Dulles 

Toll Road, and other projects. 

One would never guess from recent headlines that during its 25 years of existence, the Airports Authority has 

actually established a fairly successful, and scandal free, track record of financing and overseeing major 

enhancements and renovations to National Airport and Dulles International Airport. 

That being said, I am cosponsoring legislation with Congressman Wolf that would streamline and restructure 

the governance of the MWAA board and give Virginia the majority of seats. I have long said it is inappropriate 

to afford Maryland and the District of Columbia such broad influence over facilities wholly located in the 

Commonwealth of Virginia and that primarily affect Virginia residents. Any logic behind the current structure 

collapsed when MWAA took over responsibility for operating the Dulles Toll Road and constructing Dulles 

Rail. Plain and simple, Virginians want Virginians primarily responsible for setting local toll rates. By reducing 

the number of members from 17 to 9 and staggering the terms so no one Governor can wield undue influence, 

our bipartisan proposal will create greater accountability and restore public confidence in MW AA. To take that 

a step further, I would even support starting with a new slate of members. 

Now with respect to the IG report, I want to be clear: I will never defend the indefensible. 

In reviewing the interim and final DOT OIG Audit Reports, 'indefensible' is one ofthe milder terms one could 

apply to some of the management deficiencies and ethical practices exhibited by MWAA's Board and senior 

leadership. Unfortunately, in this instance, one can judge the book by its cover, as the report's title, MWAA's 

(OVER) 
48 


Insert offset folio 13 here 76706.013

Weak Policies and Procedures Have Led to Questionable Procurement Practices, Mismanagement, and a Lack 

of Overall Accountabilily, accurately captures the Authority's violation ofthe public trust. 

Stories of extravagant travel, unjustified hiring bonuses, questionable cash awards, and widespread nepotism, 

already have grabbed headlines as a result ofOIG's investigation. While some ofthe criticism focused on the 

actions of certain Board members, the final Audit report demonstrates that the depth of management and ethical 

failures extend far beyond anyone person. The fact of the matter is the bar for professionalism and ethical 

conduct needs to be raised for all current and future Board members and senior managers. 

The finding from OIG that I found most troubling involved the serious management deficiencies, particularly 

MW AA 's noncompliance with requirements in the Airports Act, its lease agreement with DOT, and commonsense contracting practices. From initiating work before awarding a contract, issuing sole source contracts 

without adequate justification, to providing favored bidders with non-public information to bestow an unfair 

competitive advantage, MW AA' s acquisition practices and procedures could serve as a guide for precisely how 

one should not administer procurement policy. 

In addition, MWAA's failure to meet its own Contracting Manual requirements when utilizing categorical 

exceptions was an inexcusable restriction of fair and open competition. The Authority's decision to delegate 

procurement authority to employees outside of its Procurement and Contracts Department, subsequently losing 

track of which personnel had been granted this authority, while simultaneously failing to hold employees to 

delegated limits, is emblematic of the MW AA's lack of internal controls and disregard for sound management. 

Fortunately, MW AA has demonstrated that it understands the gravity of this situation and already is taking 

steps to ensure that the final chapter of this embarrassing period for the Authority will be one of redemption. 

The decisive actions initiated by the Board of Directors and senior leadership - including the arrival of new 

Board members and the replacement of certain senior managers - are an encouraging indication that MW AA is 

fully committed to restoring its reputation and confidence in the operation. Developing a new travel policy, 

increasing transparency through new ethics policies, and instituting strong internal controls for procurement 

processes are important corrective actions necessary to eliminate nepotism and favoritism; while ensuring 

MW AA is always in compliance with the Airports Act and the its lease agreement with DOT. 

As the Committee is aware, MW AA Board Chainnan Michael Curto sent a letter to Secretary LaHood, 

Governors McDonnell and O'Malley, and Mayor Gray earlier this week detailing actions the Authority already 

has taken, or plans to take, in response to the OIG's twelve broad corrective actions and the 30 specific subrecommendations. I appreciate the candor and resolve from Chairman Curto and MW AA leadership to work 

swiftly with its regional partners to address these shortcomings. 

It is difficult to overstate the importance of MWAA to our region's transportation network and prospects for 

economic growth. It is absolutely vital that our region's congressional delegation, DOT, and MWAA continue 

to work together to fully address every single DOT OIG recommendation. In closing, I want to again express 

my gratitude to the Chairman and Ranking Member for providing me the opportunity to testilY before the 

Committee, and I look forward to hearing more about the ongoing efforts to restore integrity, transparency, and 

accountability to MW AA. 

-END-
49 


Insert offset folio 14 here 76706.014

STATEMENT OF THE 

BONORABLE RAY LAHOOD 

SECRETARY OF TRANSPORTATION 

BEFORE THE 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

U.S. BOUSE OF REPRESENTATIVES 

HEARING ON 

Metropolitan Wmhington Airports Authority (MWAA): A Review of The Department of Transportation 

Inspector General's Findings and Recommendations 

November 16, 2012 

Mr. Chairman and members of the Committee: 

Thank you for the opportunity to appear before the Committee today to address management 

issues at the Metropolitan Washington Airports Authority (MW AA). 

I want to commend the Department of Transportation's Inspector General (DOT 1G) and his staff 

for the rigorous and detailed November I report on a range of ethical, personnel, and 

procurement failures at MW AA in recent years. Let me be clear, the failures outlined by the IG 

are unacceptable and have undennined the public's confidence in MWAA and its Board of 

Directors. The Board must act expeditiously to address the 10's findings in order to regain the 

public's trust. Fortunately, this report provides a clear and concrete roadmap for MWAA to 

follow in order to bring its management practices up to the high level expected by the public that 

it serves. 

DOT and the Federal government as a whole have a unique interest in the ethical and transparent 

management of Reagan and Dulles Airports. These two airports are Federal assets that were run 
50 


Insert offset folio 15 here 76706.015

by the Federal Aviation Administration, until 1986 federal legislation authorized the MWAA 

compact. At that point, MW AA took over management of the airports and undertook 

responsibility for capital improvements. DOT entered into a 50-year lease (which was later 

extended to 80 years) with MWAA after the Commonwealth of Virginia and the District of 

Columbia enacted the statutes that created the compact. 

Not only is MWAA in charge of operating two federally-owned airports, MW AA is also 

responsible for managing the two phased extension of the Washington Metropolitan Area Transit 

Authority'S (WMATA) service known as the METRO Silver Line. One of the most important 

transportation projects in the country, the Silver Line will increase transportation options in the 

Capital region by extending existing Metrorail service to Tysons Corner, Virginia'S largest 

employment center, and to Dulles Airport and beyond. The Department has been a strong 

supporter of the Silver Line, contributing a significant portion of the financing for Phase I and 

playing an active role in securing state and local commitments for Phase II. Because ofthe 

project's significance to our Region's transportation system and the substantial Federal 

commitment to the project, the Department has additional cause for strong interest in ensuring 

the integrity ofthe entity charged with its design and construction. 

In May of this year, the IG issued an interim report highlighting systematic procurement and 

ethical lapses at the Authority. Following these allegations and other public reports of 

misconduct, I became convinced that DOT needed to take an active role in ensuring that MWAA 

operates in a manner that is transparent and accountable to the public. As a result, in late July, I 

appointed a Federal Accountability Officer to provide MW AA with advice and counsel on 

improved ethics, procurement, and governance policies. For this important role, I selected Ms. 

Kimberly Moore, a career attorney in the Department's Office of General Counsel with expertise 

2 
51 


Insert offset folio 16 here 76706.016

in these areas. Ms. Moore reports directly to me on her work related to MW AA. Then in 

August, I-along with the Governors of Virginia and Maryland and the Mayor of the District of 

Columbia-sent a letter to MWAA setting forth the specific reforms they needed to institute in 

order to regain the public's confidence. A copy ofthat letter is attached to this testimony. 

Since these steps were taken, MWAA has made considerable progress in addressing the issues 

identified by the DOT TG and in the August letter. In particular, MWAA has implemented new 

travel policies and new ethics policies for MWAA's Board of Directors and staff, terminated 

improper contracts and employment relationships, and undertaken efforts to enhance the 

transparency of the activities ofMWAA's Board of Directors. Work on revisions to 

procurement, personnel, governance and accountability policies and procedures, along with 

intensive assessment and training efforts, is currently underway. We are pleased with the level 

of cooperation that Ms. Moore has received over the last several months from the MW AA Board 

and ExecLltive leadership and look forward to continued cooperation. But there is still much 

more to be accomplished to mitigate the control weaknesses that led to these ethical, personnel 

and procurement failures. 

With that understanding, DOT is fully committed to helping MW AA address the control 

weaknesses raised in the IG's report. We are now actively engaged in assisting MWAA's 

response to the recommendations found in the DOT IG report. The report provides a specific 

recommendation for increased DOT oversight ofMWAA. We agree with this approach and plan 

to act quickly to institutionalize the oversight function. We have formally requested that the 

MW AA Board of Directors provide us with its views on the report as an aspect of our process. 

3 
52 


Insert offset folio 17 here 76706.017

We look forward to working with Congress and MWAA to bring about the changes so clearly 

called for by this timely report, and we will keep all parties advised of our progress. Thank you 

for the opportunity to testify today. 

4 
53 


Insert offset folio 18 here 76706.018

ATTACHMENT 

• ' .~~,., . 

_. 

August 14,2012 

Mr. Michael A. Curto, Chairman 

Members of the Board of Directors 

Metropolitan Washington Airports Authority 

I Aviation Circle 

Washington, DC 20001 

Dear Chaimlan Curto and Members of the Board of Directors: 

The effective and ethical management of the federally-owned Ronald Reagan Washington 

Nutional Airport and Dulles Intemational Airpol1 is of the highest importance to the Washington 

Metropoliwn region. The MWAA is entrusted with the operation of the two airports under the 

Metropolitan Washington Airports Act of 1986 and a lease with the Secretary of Transportation. 

By statute, MWAA is 1I public body, managing and operating important federal assets, and the 

Board of Directors is expected to conduct its business with the utmost integrity and with 

continuous regard for the public that it serves. As such. MW AA has a responsihility to operate 

in a manner that is transparent and accountnhle hoth to the puhlic and to the authorities who 

appoint the Board. Recent reports, however. have raised serious doubts about the ability of the 

Board to competentl y promote, protect and manage the Airports and other tral1!iportation 

activities. 

We are grnvcly concemed with the lack of accoulllahility. transparency. and sOllnd judgment that 

hus come to light regarding the Bourd's recent activities. In May. thc U.S. Department of 

Tmnsponation's Inspector General issued a draft audit report of MWAA 's opemlions that raised 

serious concerns about MWAA's policies and procedures in cOlllracting. ethics. and travel. and 

thc lack of transparency and accountability in thc activities of MWAA's Board. The Inspector 

Gcneral rni.~cd concems related to nepotism and provided examples of Board members 

pal1icipating in matters in which they have potential conflicts of interest. The report revealed 

excessive Board spending on air travel. meals, and wine. Overall, the report depicts an 

organization that conducts much of its business behind closed doors, awards Illany of its 

contracts on a sole-source basis, and is in desperate need of reform. 

Against this hackdrop, we are outraged by ongoing reports describing questionable dealings, 

including the award of numerous lucrDtive no-bid contracts to former Board members and 

employees and the employment of fonner Board members. It has hecome clear that MW AA' s 

policies and procedures are deficient and lack the safeguards necessary to ensure the principled 

oversight of nationally and regionally significant assets. The Board needs to restore the 

confidence of its appointing officials and the public. 

As you know. the Secretary of Tmnsponation hll.~ appointed a Federal Accountability Officer to 

ensure that these concern., are promptly addressed. We expect that you will grunt her access to 

personnel and documents. and inform her in uuvance of. und provide access to. ul! Boaru of 

Directors meetings. inclllding execlItive sessions. With her guidance. you must upgrade your 
54 


Insert offset folio 19 here 76706.019

procurement and travel policies and procedures. ethic, code. and bylaws. bringing them in line 

with hest Federal practices. In particular. the following reforms must he instituted immediately. 

in the most appropriate and lawful manner: 

• Swiftly overhaul financial. procurement. and human resources (lolicies and ndopt policies 

in line with Federal swndards for transparency and fairness in these cmegories: 

Terminate all cxisting contl1lcts with former Board members llllli fOnllCr employees that 

were not com(letitively hid: 

Terminate all existing employment relationships with former Board members: 

• Adopt post-em(lloyment restrictions for Board members and employees that meet Federal 

standards: 

Strengthen your ethics code to guard against connicts of interest ;md provide annllal 

ethics tmining to Board memhers and employees: 

Tighten travel procedures to c1imimlte wasteful spending. These (lrol'edures should be 

consistent with Federal requircmellls: 

Impiemen! a transparency program that requires open meetings and the posting of 

meeting announcements. agendas. and all minutes on the intemel. This program must 

ensure executive sessions are IIsed for limited and proper purposes; and 

• Strengthen all oversight. construction planning and management (lrogmms to find ways 

to reduce design. construction. and operating costs of airport facilities and the ruilto 

Dulles project. 

The Board must undertake all of these actiolls and more if it is to regain the trust of the public we 

all serve. Your candor and wholehearted implementation of these changes is the only acceptable 

course of action. 

Ray LaHo d Robert F. McDonnell 

U.S. Secretary of Transportation Governor of the Cummonwealth of Virginia 

~c."'o Vincent C. Gray 

Mayor of the District of Columhia 

cc: The HOllorahle Thomas M. Davis III. Rohert Clarke Brown, Richard S. Carter. the 

Hononlhle William W. Cobey Jr.. Frank M. Conner Ill. the Honorahle H.R. Crawford. 

Shirley Robinson Hall. Michael L. O·Reilly. Warner H. Session. Todd A. Stottlemyer. 

and John E. Potter. 
55 


Insert offset folio 20 here 76706.020

QUESTIONS FOR THE RECORD 

SECRETARY RAY LAHOOD 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

U.S. HOUSE OF REPRESENTATIVES 

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY (MWAA): A REVIEW OF 

THE DEPARTMENT OF TRANSPORTATION INSPECTOR GENERAL'S FINDINGS AND 

RECOMMENDATIONS HEARING 

NOVEMBER 16,2012 

From Chairman Petri: 

1. In the FAA Reform Act, section 804 requires FAA to work with labor and industry 

to develop a consolidation and realignment plan for FAA facilities, and to submit 

that plan to Congress within 60 days of enactment. That report is now oYer five 

months late. Given the tight Federal budget and the clear cost savings and 

demonstrated NextGen benefits of faeility realignment and consolidation, what is 

the status of that report and when wiII I!'AA submit it to this Committee? 

RESPONSE: The FAA has been working collaboratively with labor groups and other 

stakeholders on an initial report. The Agency will be finalizing the report. which outlines 

the process and criteria for evaluating facilities for potential consolidation and 

realignment, over the coming months. The FAA expects to submit the report to Congress 

early in 2013. 
56 


Insert offset folio 21 here 76706.021

Before the Committee on Transportation and Infrastructure 

United States House of Representatives 

For Release on Delivery 

Expected at 

9:00 a.m. EDT 

Friday 

November 16, 2012 

CC-20 13-005 

Observations on the 

Metropolitan Washington 

Airports Authority's 

Governance 

Statement of 

The Honorable Calvin 1. Scovel III 

Inspector General 

U.S. Department of Transportation 
57 


Insert offset folio 22 here 76706.022

Mr. Chairman and Members of the Committee: 

Thank you for inviting me to testify on the governance of the Metropolitan Washington 

Airports Authority (MW AA). As an independent public body subject to few Federal and 

State laws, MW AA must rely on the strength of its policies and processes to ensure 

credibility in its management of two of the Nation's largest airports and a multibilliondollar public transit construction project. However, in May 2012, we reported in an 

interim letter that MW AA's oversight and internal policies and procedures related to 

contracting, ethics, travel, and transparency were insufficient to ensure fiduciary and 

ethical responsibility and accountability to Congress, stakeholders, and the public. I 

Our November 1,2012, report details our observations on MWAA's (1) contract award 

and procurement practices, (2) code of ethics for its employees, (3) hiring and 

compensation practices, and (4) Board of Director activities. 2 My testimony today will 

highlight these observations and recent actions MW AA has taken in response. 

In summary, MWAA's policies and practices have not provided the controls needed to 

ensure accountability, transparency, and sound governance. MWAA's lack of internal 

controls has created a culture that allows questionable contracting practices by staff as 

well as its Board of Directors and senior officials-including initiating work before 

contract award, awarding sole source and limited competition contracts without proper 

justification, and providing non-public information that gives potential contractors an 

unfair advantage in competition.MW AA's code of ethics and related policies and 

procedures have similarly been insufficient to detect violations of anti-nepotism and gift 

provisions and identify potential conflicts of interest. Lacking a formal policy for filling 

vacancies or creating new positions has allowed senior officials to place candidates into 

new or existing positions without job descriptions, competition, or completed background 

checks. Finally, MWAA's policies and processes have not ensured accountability and 

transparency for activities conducted by its Board of Directors. 

MW AA has begun to take action to address these concerns. Notably, MW AA has 

terminated contracts with former Board members, approved a new travel policy and new 

codes of ethics for employees and the Board, and revised the Board's bylaws and 

Freedom of Information Policy. In a letter dated October 18, 2012, the Department of 

Transportation (DOT) Office of the Secretary (OST) referenced additional planned 

actions to improve MW AA' s accountability, including appointing an Accountability 

Officer to monitor and report 'on any reform efforts and pursuing an amendment to the 

lease between MW AA and DOT to ensure greater oversight. 

1 OIG, "Interim Response Letter to Congressmen Wolf and Latliam Regarding MW AA," May 15, 2012. OIG correspondence 

and reports are available on our Web site at httn:llwww.oig.dot.gov/. 

2 OIG~ MWAA 's Weak Policies and Procedures Have Led to Questionable Procurement Practices, Mismanagement, and a Lack 

of OYer all Accountability, Nov. 1,2012. 
58 


Insert offset folio 23 here 76706.023

BACKGROUND 

MW AA was created through an interstate compact between the Commonwealth of 

Virginia and the District of Columbia as well as the Metropolitan Washington Airports 

Act of 1986.3 In March 1987, the Secretary of Transportation and MW AA entered into a 

50-year lease authorizing MWAA to occupy, operate, control, and use all land and related 

areas of Ronald Reagan Washington National Airport and Washington Dulles 

International Airport, with full power over operations and development of the airports. In 

April 2003, the term was extended to 80 years. More recently, MW AA assumed 

responsibility for the Dulles Corridor Metrorail Project, with a $3.1 billion budget for 

Phase 1-$977 million of which is Federal investment-and cost estimates of 

$2.7 billion for Phase 2. 

As designed by the Airports Act and lease, MW AA was governed by a 13-member Board 

of Directors composed of members from Virginia, the District of Columbia, and 

Maryland, and Presidential appointees. In October 2012, Board membership increased to 

17 members. 4 Board members serve 6-year terms without compensation. The Board is 

responsible for establishing policy and providing direction to MW AA's President/Chief 

Executive Officer (CEO). 

The Airports Act and the lease established MWAA as an independent public body. As 

such, MWAA is not subject to Federal or State laws that govern procurement, ethics, 

civil service, and transparency. However, MW AA must abide by the provisions and 

terms of the Airports Act, the lease, and the interstate compact, as well as its own internal 

policies and processes. The Airports Act and lease require MW AA to develop a code of 

ethics to ensure the integrity of decisions made by MW AA's Board of Directors and its 

approximately 1,400 employees. MW AA has two separate codes of ethics policies---one 

for its Board of Directors and another for its employees. Each code describes situations 

causing both an actual or apparent conflict of interest, which could adversely affect the 

confidence of the public in the integrity and credibility of MW AA. Each code defines 

standards of ethical conduct, such as acceptance of gifts and annual financial interest 

disclosure requirements. 

While MWAA is not required to follow Federal statutes or regulations for procuring 

goods and services, the Airports Act and the lease agreement with DOT require the 

Authority to obtain full and open competition for contracts in excess of $200,000, to the 

maximum extent practicable. The Act and the lease specify this be accomplished through 

the use of published competitive procedures. MWAA's Board of Directors may grant 

exception to this requirement by a vote of the majority of the Board. 

'Pub. L. 99-591. 

4 In October 2012, the District of Columbia passed legislation to amend the interstate compact to complete the implementation of 

changes to the Board's composition mandated by the Consolidated and Further Continuing Appropriations Act of2012 (Pub. L. 

112-55, Div. C, Title I, § 191). Congress passed this Act in November 2011 to expand the MW AA Board from 13 to 17 

members, including 7 appointed by the Governor of Virginia, 4 by the Mayor of the District of Columbia, 3 by the Governor of 

Maryland, aod 3 by the President of the United States. 

3 
59 


Insert offset folio 24 here 76706.024

In 2011, amid multiple allegations of misconduct and mismanagement on the part of 

MW AA, Congressmen Frank R. Wolf and Tom Latham asked OIG to initiate a review of 

MW AA. In May 2012, we provided an interim letter to the Congressmen and briefed key 

stakeholders, including Loudoun and Fairfax counties, regarding our preliminary 

observations on weaknesses we identified in MWAA's management and questionable 

Board activities.s In response, the Secretary, the Governors of Maryland and Virginia, 

and the Mayor of the District of Columbia issued a letter in August 2012 to MW AA's 

Chairman and Board members mandating immediate reform of MW AA's business 

practices. Reforms include terminating all existing contracts with former Board members 

and former employees that were not competitively bid, strengthening MW AA's etp.ics 

code and ethics training requirements, and tightening Board travel procedures. In 

addition, the Secretary appointed an Accountability Officer to monitor and report on any 

reform efforts. 

MWAA'S CONTRACTING POLICIES AND PRACTICES ARE 

INSUFFICIENT TO ENSURE COMPLIANCE WITH THE AIRPORTS ACT 

OR LEASE AGREEMENT 

MW AA's contracting policies and practices are insufficient to ensure compliance with 

the Airports Act and the lease agreement between DOT and MW AA. The Act and the 

agreement require the Authority to competitively award contracts over $200,000 to the 

maximum extent practicable. However, for the period we reviewed, 6 MW AA used 

categorical exceptions to limit competition for almost two-thirds of MW AA's contracts 

that exceeded $200,000. While MWAA's Contracting Manual allows the use of 

categorical exceptions,7 MW AA frequently did not meet its Contracting Manual 

requirements for adequate justifications when using these exceptions. Further, adding 

new out-of-scope work to existing contracts and issuing task orders without required 

justifications and approvals have also limited competition. 

These weaknesses are exacerbated by ineffective contract management and oversight and 

a lack of adequate procurement integrity policies to ensure impartiality when awarding 

and administering contracts. Notably, MW AA has delegated procurement authority to 

employees outside its Procurement and Contracts Department but has not kept track of 

those with this authority and has not held employees to their delegated authority limits. 

MW AA Board members and senior officials have set the tone for a lax internal control 

culture by engaging in questionable contracting practices-including initiating work 

5 At Congressman Wolfs request, our-interim letter also included a preliminary review of MWM's assumptions for Dulles ToU 

Road revenue, which found that the assumptions appeared reasonable. 

6 January 2009 to June 2011. 

1 MWAA's Board of Directors authorized six categorical exceptions to fun and open competition in section 1.2 ofMWM's 

second edition Contracting Manual: (I) limited competition for urgent needs; legal, financial, audit, or legislative representation 

professional services; and local business set asides; (2) ailJlort security controlled distribution RFP; (3) utility supplies and 

services; (4) Government purchasing agreements; (5) airline tenant procured projects; and (6) proprietary equipment and 

software. Use of these exceptions requires no further Board approval. 

4 
60 


Insert offset folio 25 here 76706.025

before contract award, awarding sole source contracts without proper justification, and 

providing non-public information that gives potential contractors an unfair advantage in 

competition. 

MWAA'S ETHICS CODE AND PROCESSES HAVE BEEN 

INSUFFICIENT TO PREVENT ACTUAL AND PERCEIVED CONFLICTS 

OF INTEREST AMONG EMPLOYEES 

MW AA recently approved a new employee code of ethics that will go into effect on 

January 1,2013. However, MWAA's code of ethics and related policies and procedures 

in place at the time of our audit lacked the rigor needed to detect violations of antinepotism and gift provisions and to identify potential conflicts of interest. We identified 

several violations and conflicts, including: 

• The Vice President of Human Resources indirectly supervised relatives, despite the 

code's explicit provision prohibiting such relationships. 

• Employees regularly accepted inappropriate gifts from an MW AA contractorincluding Super Bowl tickets, travel, and accommodations worth almost $5,000. 

• The former President/CEO's 2009 fmancial interest form was missing a page with key 

details about the CEO's financial holdings. 

Weak policies and procedures, cursory reviews of financial disclosure statements, and a 

lack of recurrent ethics training have provided little assurance that employees are fully 

aware of MW AA's ethics requirements, increasing the risk of unintentional ethics 

violations. 

MWAA LACKS HIRING AND COMPENSATION POLICIES AND 

PRACTICES TO ENSURE SUFFICIENT OVERSIGHT AND 

ACCOUNTABILITY 

MWAA's standard hiring process for filling vacancies or creating new positions has not 

been formally documented as an official policy, which has allowed senior officials to 

place candidates into new or existing positions without job descriptions, competition, or 

completed background checks. In some cases, senior officials abused MW AA's student 

program to hire employees who were not students, using personnel documentation that 

falsely showed student status. MW AA's lack of oversight also resulted in employees with 

known criminal convictions working at the Authority in sensitive and management 

positions for more than a year. 

In addition, MW AA managers awarded excessive salaries, unjustified hiring' bonuses, 

questionable cash awards, and ineligible benefits. For example, MWAA created a new 

position for a former Board member that included an annual salary of $180,000 for 

unspecified job duties, before ultimately terminating the position after public outcry. In 

5 
61 


Insert offset folio 26 here 76706.026

another example, an MWAA Human Resources manager deliberately abused MWAA's 

benefits programs to continue paying an individual who no longer worked for the 

Authority. 

MWAA'S POLICIES AND PROCESSES DID NOT ENSURE 

ACCOUNTABILITY AND TRANSPARENCY FOR ITS BOARD OF 

DIRECTORS 

MW AA's policies and processes have not ensured accountability and transparency for 

activities conducted by its Board of Directors. Unlike its policies for MW AA employees, 

MW AA's policies for the Board did not at the time of our review explicitly prohibit 

nepotism or other relationships that may cause undue influence at the Authority. 

Without such controls, MW AA has not been able to hold its Board accountable to the 

same standards it holds its employees. Specifically, MWAA could not ensure that 

relatives and friends of Board members did not receive preferential treatment in hiring or 

contracting. Oversight weaknesses and a lack of training have further hindered MW AA' s 

ability to prevent conflicts ofinterest for its Board members. For example, contrary to 

MWAA's ethics policies established specifically for the Board, a Board member 

participated in the selection of a contractor who employed the Board member's spouse. 

While MW AA has taken steps to improve Board accountability and transparencyincluding a new code of ethics for the Board and revised travel policies-significant 

attention will be required to ensure that new travel, ethics, and disclosure policies are 

implemented and enforced. 

MWAA HAS BEGUN TO ADDRESS OIG OBSERVATIONS ON 

GOVERNANCE WEAKNESSES 

On May 15,2012, we issued an interim letter describing our observations ofMWAA's 

governance. In particular, we observed that MW AA's oversight and internal policies and 

procedures related to financial disclosures, travel, and transparency were insufficient to 

~nsure fiduciary and ethical responsibility and accountability to Congress, stakeholders, 

md the public. We also observed that MWAA's contracting policies and practices were 

insufficient to ensure compliance with the Act's provisions and MW AA's internal 

Jrocurement procedures, resulting in contracts that are not subject to full and open 

;ompetition and may not represent best value. 

~ollowing our May 2012 interim letter, MWAA has taken action to improve its 

lccountability, transparency, and governance. For example, as of September 19, 2012, 

\1W AA approved new codes of ethics for its Board of Directors and its employees. The 

'evisions will go into effect December 1,2012 (for the Board) and January 1,2013 (for 

\1WAA employees). In addition, the Authority has approved a new travel policy, and 

'evised the Board's bylaws and Freedom oflnfortnation Policy to increase transparency. 

6 
62 


Insert offset folio 27 here 76706.027

According to MW AA officials, the Authority has also: 

• suspended the use of categorical exceptions for professional services, 

• terminated contracts with former Board members or let those contracts expire, 

• established guidelines requiring contracting officers to select contractors under 

temporary staffing multiple-award contracts, and 

• enhanced screening for nepotism. 

In an October 18, 2012, memorandum to the Inspector General, OST noted that 

MWAA's pattern of conduct is unacceptable for a public body entrusted with the 

management and operation of important Federal assets. In exercising the full extent of its 

authority, OST referenced additional planned actions to improve MW AA's 

accountability, including appointing a Federal Accountability Officer to monitor and 

report on any reform efforts and pursuing an amendment to the lease between MW AA 

and DOT to ensure greater oversight. (OST's October 18,2012, letter is provided as an 

appendix in our November 2012 report.) 

While MW AA is taking positive steps to correct the deficiencies we identified, further 

actions are needed to fully address these deficiencies to ensure fiduciary and ethical 

responsibility and restore public trust in the soundness of its current and future activities. 

Mr. Chairman, this concludes my prepared statement. I will be happy to answer any 

questions you or other members of the Committee may have. 

7 
63 


Insert offset folio 28 here 76706.028

Testimony of Michael A. Curto 

Chairman, Board of Directors 

Metropolitan Washington Airports Authority 

before the 

Committee on Transportation and Infrastructure 

U.S. House of Representatives 

November 16, 2012 

Good morning, Mr. Chairman and Members of the Committee, and thank you for the 

opportunity to discuss the Metropolitan Washington Airports Authority's response to the audit 

by the Department of Transportation's Office of Inspector General. I am Michael Curto, 

Chairman of the Airports Authority Board of Directors, a position I assumed at the first of this 

year, after joining the Board in January of 2011. With me is the Airports Authority's President 

and CEO, Jack Potter. 

As background, the Metropolitan Washington Airports Authority was established in 

1987 by the governments of Virginia and the District of Columbia to manage and operate 

Washington's Ronald Reagan National and Dulles International Airports, which together serve 

more than 40 million passengers a year. The Airports Authority also operates and maintains the 

Dulles Airport Access Road and the Dulles Toll Road and manages construction of the Silver Line 

project, a 23-mile extension of the Washington region's Metrorail system into Loudoun County, 

Virginia. No taxpayer money is used to operate the toll road, which is funded by toll revenues, 

or the airports, which are funded through aircraft landing fees, rents and revenues from 

concessions. The Silver Line construction is funded by a combination of toll-road revenues, 

airport contributions and federal, state and local government appropriations. The Airports 

Authority is led by a 17- member board of directors appointed by the Governors of Virginia, 

Maryland, the Mayor of Washington, D.C., and the President of the United States. Fourteen of 

those seats are now filled, with the three federal positions currently vacant. 

As you know, the Inspector General's audit began 16 months ago, and the Inspector 

General issued an Interim Report in May, discussing a number of findings and issues that we 

have been working to address ever since. On November 1st, the Inspector General issued the 

audit's Final Report, which elaborated on many of the issues identified in the Interim Report. 

The Final Report discussed additional incidents and concerns and provided a list of 

recommendations. In the two weeks since the Final Report was issued, we have been working 

1 
64 


Insert offset folio 29 here 76706.029

to make sure we have a complete understanding of the new issues so we can be certain that we 

address them properly. 

Let me emphasize that we take all the issues and concerns cited in these reports very 

seriously, and we are in the process of responding to all of the Inspector General's 

recommendations. Our primary focus in responding to the report is rebuilding public trust, 

assuring accountability and instituting best practices across the Airports Authority organization. 

Please be assured that the Board of Directors and senior leadership of the Airports 

Authority are committed to taking whatever measures are appropriate and necessary to 

address these very serious matters. 

As the Inspector General's Final Report acknowledges, we already have taken a number 

of corrective actions, and we have other activities under way, in response to issues raised in the 

Interim Report. We believe we are making good progress, and we are expanding and 

enhancing those efforts based on the findings and recommendations of the Final Report. 

As part of that effort, we have completed several major policy and procedure revisions, 

and we have a number of other initiatives under way to bring greater transparency, 

accountability, efficiency, and integrity to the Airports Authority's operations and governance. 

The criticisms and issues raised in these reports, and in subsequent media coverage, 

have been unpleasant to hear and damaging to the Authority's reputation and public trust. 

They will require time and hard work to address. But we are determined to do what is 

necessary to address them. 

To the extent that many ofthe criticisms have involved our Board of Directors, it is 

important to note that we are undergoing the most significant change in Board membership in 

our history. Due largely to recently enacted legislation, sponsored by Representative Wolf, a 

number of new positions have been added to the Board. In addition, the service of many 

longtime Board members has recently ended. As a result of these changes, by very early next 

year, only one of our 14 Board members will have served longer than three years, only one 

other will have served longer than two years, and every other member will have served two 

years or less - with several serving for only a matter of weeks. In addition, there are three 

current vacancies for federal representatives on the Board to be filled by presidential 

appointments. We look forward to those federal vacancies being filled. 

Therefore, the Airports Authority essentially has a new Board of Directors going forward 

to help lead our efforts to restore trust, build new levels of accountability and assure best 

practices across the organization. The officials who made our recent Board appointments were 

2 
65 


Insert offset folio 30 here 76706.030

mindful of the issues facing the organization and the need to address those issues, and the 

current Board is committed to making swift and substantial improvements. 

The Board and senior management also are committed to strong oversight and internal 

controls and to making certain that all of the Airports Authority's policies and operations reflect 

the best practices of government and industry. We will use this Inspector General's audit as a 

tool in expanding and enhancing our work to increase transparency, strengthen governance 

and build renewed public trust. 

I would like to recap the key initiatives we are undertaking: 

• In February, the Board approved changes to the Bylaws to increase transparency. The 

Bylaws were further amended in October to incorporate legislative changes increasing the 

size of the Board to 17 members and eliminating Board service beyond the appointed term 

limit. 

• In July, we revised our Freedom of Information Policy, clarifying how the pUblic can obtain 

information from the Airports Authority and designating a Freedom of Information Officer. 

This also helps increase transparency. 

• In September, we approved a new Travel Policy with detailed procedures for preauthorization of travel and clear guidelines and daily limits for meals and expenses. 

• In September, we approved a new Code of Ethics for employees and Directors and 

established requirements for annual ethics training. This new policy bars Board members 

from being employed or having contracts with the Airports Authority during, and for two 

years following, their terms. It also expands the definition of family to address nepotism 

concerns, strengthens financial disclosure requirements, tightens rules designed to guard 

against conflicts of interest, and clarifies rules regarding gifts. 

• In October, we named a formal Ethics Officer to provide oversight. In addition, alleged 

ethics violations involving Board members will be referred to a Board Ethics Committee, 

which will report its findings to the full Board of Directors. We have scheduled 40 ethics 

training sessions to make sure everyone at the Airports Authority understands and follows 

the new ethics policy. The training sessions are mandatory for all employees, and more 

than half of all our employees already have received the training. 

• We are revising our contracting manual and other procedures to reflect best practices, and 

promote fair and open competition. The manual is a lengthy and highly technical document 

because of the wide variety of complex contracts needed to operate the airports and the 

Dulles Toll Road, and to construct the Silver line and other capital projects. Our 

procurement and finance team is hard at work reviewing and revising the manual, which 

covers all aspects of awarding and managing contracts. Our goal is to have clear and 

3 
66 


Insert offset folio 31 here 76706.031

efficient guidelines that optimize competition. We expect to have a new manual ready for 

the Board's approval in the coming months. 

• We have suspended the use of categorical exceptions to full and open competition for the 

procurement of legal, financial, audit and legislative professional services. 

• We have terminated all non-competed contracts involving former Board members. 

• We have created an Internal Control Group to establish systems and track actions necessary 

to enforce policies and assure accountability in contracting, as well as other areas. 

• We are tightening up our hiring, compensation and benefits structures, to assure that they 

are consistent with our goal of best practices. We also are hiring outside experts to 

evaluate our human resources program - including compensation and hiring practices. 

• The CEO has temporarily taken over day-to-day management of the Human Resources 

department during the review of personnel practices, following the recent retirement of the 

Human Resources vice president. 

• We have ended employment relationships with former Board members. 

• We have revised the management guidance for our Student Employment Program. 

• Our airport police department is pursuing additional regulatory authority for conducting 

criminal background checks to aid our personnel process. 

From our early review of the Final Report, it appears that some of the issues and 

incidents cited are one-time or isolated events that were detected and dealt with when they 

occurred during the five-year period covered by the audit. But for everything covered in the 

report, we want to be sure we have a proper understanding of all the details and 

circumstances. The Inspector General has agreed to provide more specific details to us where 

needed. We look forward to working with the Inspector General's office to learn more about 

the findings and ensure that we fully understand all the facts and circumstances. This will help 

us be sure that we take all appropriate actions to rectify problems and improve procedures. 

The Authority's senior management team has launched an organization-wide effort to 

respond to each of the 12 recommendations in the Inspector General's Final Report. 

We have established specific tasks and timelines to meet each part of each recommendation 

over the coming weeks and months, and to produce a formal response to the 

recommendations, which we plan to submit to the Secretary of Transportation by December 

1st. 

In addition to acting on the findings and recommendations of the Inspector General's 

report, we also are responding to a separate set of recommendations we received this summer 

from U.S. Secretary ofTransportation Ray LaHood, Governor Robert McDonnell of Virginia, 

Governor Martin O'Malley of Maryland and Mayor Vincent Gray of the District of Columbia. 

4 
67 


Insert offset folio 32 here 76706.032

We thank these officials for their leadership and support and for their interest in helping us 

make the Airports Authority a better organization. 

We have sent these officials a detailed letter outlining the actions we are taking in 

response to their recommendations. This letter, which we are submitting for the record and 

attaching to this testimony, provides a comprehensive description of the numerous actions we 

are taking to respond to each item they identified in their August letter to the Airports 

Authority's Board. The activities described in our letter also address many of the issues and 

concerns that are raised in the Inspector General's audit. 

In responding to these issues, we have worked closely with the Federal Accountability 

Officer, appointed by Secretary LaHood, who has provided the perspective of the Secretary as 

we continue to review and revamp our policies and procedures. She has provided excellent 

counsel and guidance on a number of difficult and complex issues. 

I believe it is important to note that throughout the 16 months of the Inspector 

General's review, the Airports Authority's employees have remained focused on customer 

service and on our core missions of managing Reagan National and Dulles International Airports 

and the Dulles Toll Road, and construction of the Silver Line. All those enterprises are operating 

well, which is a testament to the talent and dedication of the Airports Authority staff. I thank 

and commend them for their good work. 

Clearly, we have much work ahead of us in gathering additional facts and understanding 

the context ofthe Inspector General's findings. We appreciate all the important contributions 

that so many people have made to this effort. We thank the auditors in the Inspector General's 

office for their months of diligent work. And we thank Representative Wolf, Secretary LaHood, 

the Governors and the Mayor for their leadership. 

I want to emphasize again that we take this report very seriously, and we will respond to all 

of its recommendations. And I want to be very clear about the firm commitment of the Board 

of Directors and senior management to doing whatever is necessary to address the issues 

raised in this report. Our key focus will continue to be on rebuilding public trust, assuring 

accountability and instituting best practices. 

We believe the steps we have taken to date, the initiatives we are currently pursuing, and 

the work we plan in the days and months ahead, will help build renewed confidence in our 

organization's integrity and demonstrate the highest regard for the public we serve. We are 

determined to make the Airports Authority a stronger and more efficient organization that is 

better equipped to serve the traveling public and our regional economy. 

And now, Mr. Chairman, I would be pleased to answer your questions. 

5 
68 


Insert offset folio 33 here 76706.033

Office of Inspector General 

Audit Report 

MWAA'S WEAK POLICIES AND 

PROCEDURES HAVE LED TO 

QUESTIONABLE PROCUREMENT 

PRACTICES, MISMANAGEMENT, AND A 

LACK OF OVERALL ACCOUNTABILITY 

Metropolitan Washington Airports Authority 

Report Number: AV-2013-006 

Date Issued: November 1,2012 
69 


Insert offset folio 34 here 76706.034

U.S. Department of 

Transportation 

Office of the Secretary 

of Transportation 

OffIce Df Inspector General 

Memorandum 

Subject: ACTION: MWAA's Weak Policies and 

Procedures Have Led to Questionable Procurement 

Practices. Mismanagemcnt, and a Lack of Overall 

Accountability 

Dale; November L 2012 

From: 

1"0: 

Report No. A V -2013-006 

Calvin L. /l d Scovel III ; I I ;L -- Lv k.. ~v --'..l-'-

Inspector General 

Dcputy Secretary 

Thc Metropolitan Washington Airports Authority (MWAA) manages Ronald 

Reagan Washington National Airport and Washington Dulles International Airport 

under the terms of a lease with the U.S. Department of Transportation (DOT). 

More recently, MW AA assumed responsibility for the Dulles Corridor Metrorail 

Project. with a $3.1 billion budget f()r Phase 1-$900 million of which is Federal 

investmcnt-and cost estimates of $2.7 billion for Phase 2. As a public body with 

responsibility over two major federally owncd airports and a multibillion-dollar 

public transit development effort, MWAA has been the subject of significant 

interest regarding the policies and practices of its management and Board of 

Directors. 

In 2011, Congressmen Frank R. Wolf and Tom Latham requested that we review 

MW AA's management policies and processes. The Congressmen stressed that the 

accountability and transparency of MW AA and its Board of Directors are 

important to ensure the success of the Dulles Metrorail Project. 

On May 15,2012, we provided an interim letter' to the Congressmen and briefed 

key stakeholders. including Loudoun and Fairfax counties. regarding our 

preliminary observations on MWAA'5 management. In particular, we observed 

that MWAA's oversight and internal policies and procedures related to financial 

disclosures, travel, and transparency were insufficient to ensure fiduciary and 

ethical responsibility and accountability to Congress, stakeholders, and the pUblic. 

We also observed that MWAA's contracting policies and practices werc 

! Ol(i. "Interim Rcspon~c Le-tterlo Congres."men "I,/olfand Lathmn Regarding Ivl\\)\A:"I'vlay 15.2012. OIG 

correspondence and rcpOI1S arc CI\ ailal1le on our Wcl'l site at \\ \\ \\ .uiQ~~. 
70 


Insert offset folio 35 here 76706.035

2 

insufficient to ensure compliance with the Act's provisions and MWAA's intemal 

procurement procedures, resulting in contracts that are not subject to full and open 

competition and may not represent best value. 2 Since our interim letter, MWAA 

has begun to take steps to improve its transparency, govemance, and procurement 

practices. 

This rep0l1 provides the results of our review, including updates on actions taken 

in response to concerns raised in our interim letter as well as further actions 

needed to better ensure accountability and transparency in MWAA's governance. 3 

Specifically, this report details our assessment of (1) MW AA 's contract award and 

procurement practices, including compliance with relevant laws; (2) its code of 

ethics for its employees; (3) its hiring and compensation practices: and (4) the 

accountability and transparency of its Board of Director activities. 

We conducted our audit in accordance with generally accepted Govemment 

auditing standards. To conduct our work, we reviewed relevant acts, agreements, 

policies, and manuals; examined Federal. State, and local best contracting 

practices: and interviewed MW AA officials. In addition, we reviewed a total of 

125 contracts to evaluate MWAA's contract practices. Exhibit A provides the full 

details of our scope and methodology, and exhibit B lists organizations visited or 

contacted. 

RESULTS IN BRIEF 

As a result of our interim letter, subsequent audit work, and increased public 

scrutiny, MWAA has taken action to improve its accountability, transparency, and 

governance. For example, MW AA has approved a new travel policy and new 

codes of ethics for employees and the Board, revised the Board's bylaws and 

Freedom of Information Policy, and terminated contracts with former Board 

members. While these are the types of actions needed to ensure fiduciary and 

ethical responsibility, further actions remain to fully address the management 

weaknesses we identified during our audit. 

First, MW AA 's contracting policies and practices are insufficient to ensure 

compliance with the Airports Act and the lease agreement between DOT and 

MW AA. The Act and the agreement require the Authority to competitively award 

contracts over $200,000 to the maximum extent practicable. However, for the 

period we reviewed,4 MWAA used categorical exceptions to limit competition for 

almost two-thirds of MW AA' s contracts that exceeded $200,000. While MW AA' s 

2 In addition. at Congressman \\ olrs request, our interim letter included a preliminary review ofMW AA's 

assumptions tor DlIllc~ -,'oil Road revenue. 'which f()und th()t the a<.;.sumptions arreared reasonable. 

1 As first referenced in our interim letter. investigations into allegations of mismanagement and misconduct arc ~til1 

ongoing and arc- not disctls;,:cu in this report . 

..j January 2009 to June 2011. 
71 


Insert offset folio 36 here 76706.036

3 

Contracting Manual allows the usc of categorical exceptions,' MW AA frequently 

did not meet its Contracting Manual requirements for adequate justifications when 

using these exceptions. Adding new out-of-scope work to existing contracts and 

issuing task orders without required justifications and approvals have also limited 

competition. These weaknesscs are exacerbated by ineffective contract 

management and oversight and a lack of adequate procurement integrity policies 

to ensure impartiality when awarding and administering contracts. Notably, 

MW AA has delegated procurement authority to employees outside its 

Procurement and Contracts Department but has not kept track of those with this 

authority and has not held employees to their delegated authority limits. MW AA 

Board members and senior oflicials set the tone for a lax internal control culture 

by engaging in questionable contracting practices-including initiating work 

before contract award, awarding sole source contracts without proper justification, 

and providing non-public information that gives potential contractors an unfair 

advantage in competition. 

Second, the code of ethics and related MW AA policies and procedures in place at 

the time of our audit lacked the rigor needed to ensure credibility and the integrity 

of management and employee decisions. While MW AA recently approved a new 

employee code of ethics that will go into effect on January I, 2013, the 

Authority's existing ethics-related procedures have been insufficient to detect 

violations of anti-nepotism and gift provisions and to identify potential conflicts of 

interest. For example, the Vice President of Human Resources indirectly 

supervised relatives, despite the code's explicit provision prohibiting such 

relationships. In addition, employees regularly accepted inappropriate gifts from 

an MW AA contractor-including Super Bowl tickets, travel, and accommodations 

worth almost $5,000. Cursory reviews of financial disclosure statements have 

further limited MWAA's ability to prevent and detect conflicts of interest. For 

example, at the time of our review, the former PresidentlChiefExecutive Officer's 

(CEO) 2009 linancial interest form was missing a page with key details about the 

CEO's financial holdings. Weak policies and procedures and a lack of recurrent 

ethics training have provided little assurance that employees are fully aware of 

MWAA's ethics requirements, increasing the risk of unintentional ethics 

violations. 

Third, MWAA's hiring and compensation practices lack oversight and 

accountability. MWAA's standard hiring process for filling vacancies or creating 

new positions has not been formally documented as an official policy, which has 

allowed senior officials to place candidates into new or existing positions without 

<; M\VAA's Goard of Directors authorized six categorical exceptions to fi.1I1 and open competition in ~ection 1.2 of 

M\VAA"s second edition ContrJcting Manual: (I) limited competition for urgent needs: legal. financial. audit. or 

Icgislati\t~ representation professional services: and local business set asides: (2) airport security controlIcd distribution 

RFP: (3) utility supplies and services: (4) Go\'cmm~nl purchasing agreements: (5) airline tenant procured projects: and 

(6) propridary equipment and sothvarc. Use ofthes(, c:>\ceptions rC4uires no further Board approval. 
72 


Insert offset folio 37 here 76706.037

4 

job descriptions, competItIOn, or completed background checks. In some cases, 

senior officials abused MW AA' s student program to hire employees who were not 

students, using personnel documentation that falsely showed student status. 

MW AN s lack of oversight also resulted in employees with known criminal 

convictions working at the Authority in sensitive and management positions for 

more than a ycar. In addition, MWAA managers awarded excessive salaries, 

unjustified hiring bonuses, questionable cash awards, and ineligible benefits. For 

example, MW AA created a new position for a former Board member that included 

an annual salary of $180,000 for unspecified job duties, before ultimately 

terminating the position after public outcry. In another example, an MW AA 

Human Resourccs manager deliberately abused MWAA's benefits programs to 

continue paying an individual who no longer worked for the Authority. 6 

Finally, MWAA's policies and processes have not ensured accountability and 

transparency for activities conducted by its Board of Directors. Unlike its policies 

for MWAA employees, MW AA's policies for the Board did not at the time of our 

review explicitly prohibit nepotism or other relationships that may cause undue 

influence at the Authority.7 Without such controls, MW AA has not been able to 

hold its Board accountable to the same standards it holds its employees. 

Specifically, MWAA could not ensure that rclatives and friends of Board members 

did not receive preferential treatment in hiring or contracting, as we found in one 

case. Oversight weaknesses and a lack of training have further hindered MW ANs 

ability to prevent conflicts of interest for its Board members. For example, 

contrary to MW AN s ethics policies established specifically for the Board, a 

Board member participated in the selection of a contractor who employed the 

Board member's spouse. While MW AA has taken steps to improve Board 

accountability and transparency-including a new code of ethics for the Board and 

revised travel policies-significant attention will be required to ensure that new 

travel, ethics, and disclosure policies are implemented and enforced. 

Wc are making a series of recommendations to the Office of the Secretary to 

facilitate the improvement of MWAA's policies, processes, internal controls, 

transparency, and accountability. 

BACKGROUND 

MW AA was created through an interstate compact between the Commonwealth of 

Virginia and the District of Columbia as well as the Mctropolitan Washington 

Airports Act of 1986. 8 In March 1987, the Secretary of Transportation and 

MW AA entercd into a 50-year lease authorizing MW AA to occupy, operate, 

6 This manager ,",vas later disciplined \\ilh a 3~day suspension for these actions. 

7 MWAA's recently revised Board code of ethics will take effect December 2012 and includes a provision preventing 

these relationships. 

, Pub. L. 99-591. 
73 


Insert offset folio 38 here 76706.038

5 

control, and use all land and related areas of the airports, with full power over 

operations and developmcnt of thc airports. In April 2003, the term was extcnded 

to 80 years. 

As designed by the Airports Act and lease, MW AA was governed by a 13-membcr 

Board of Directors composed of 5 members from Virginia, 3 from the District of 

Columbia, 2 from Maryland, and 3 Presidential appointees. In October 2012, 

Board membership increased to 17 membcrs. 9 Board members serve 6-year terms 

without compcnsation. The Board is responsiblc for cstablishing policy and 

providing direction to MW AA's President/CEO. 

The Airports Act and the lease established MWAA as an independent public body. 

As such, MWAA is not subjcct to Federal or Statc laws that govern procurcment, 

ethics, civil servicc, and transparency. However, MW AA must abidc by the 

provisions and terms of the Airports Act, the lease, and the interstate compact, as 

well as its own internal policies and processes. 

The Airports Act and lease require MW AA to develop a code of ethics to ensure 

the integrity of decisions made by MW AA's Board of Directors and its 

approximately 1,400 cmployecs. MW AA has two separate codes of ethics 

policies-one for its Board of Directors and another for its employees. Each codc 

dcscribes situations causing both an actual or apparent conflict of interest, which 

could adversely affect thc confidence of the public in the integrity and credibility 

of MW AA. Each code defines standards of ethical conduct, such as acceptance of 

gins and annual financial interest disclosure requirements. 

While MWAA is not requircd to follow Federal statutes or regulations for 

procuring goods and services, the Airports Act and the lease agreement with DOT 

require the Authority to obtain full and open compctition for contracts in excess of 

$200,000, to the maximum extent practicable. The Act and the lease specify this 

be accomplished through the use of published compctitive procedures. MWAA's 

Board of Directors may grant exccption to this requircment by a vote of thc 

majority ofthc Board. 

In 2011, amid multiple allegations of misconduct and mismanagement on the part 

of MWAA, Congressmen Wolf and Latham asked 010 to initiate a review of 

MWAA. In May 2012, we reportcd our observations to date in an interim lettcr. 

We identified weaknesses in MWAA's policies and procedures related to 

contracting, financial disclosurc, travel, ethics, and transparency that Iimitcd 

Q In October 2012. the District orColumbi. passcd legislation to amend the interstate compact to complete the 

implementation of changes to tht: Board's composition mID1dated by the Consolidated and Further Continuing 

Appropriations Act 01'20 12 (Pub. L. 112·55. Div. C. Title I. ~ 191). Congress passed this Act in November 20 II to 

expand the MWAA Board Irom 13 to 17 members. including 7 appointed by the Governor of Virginia. 4 by the Mayor 

of the District of Columbia. 3 by the Governor of Maryl.nd, and 3 by the President of the United States. 
74 


Insert offset folio 39 here 76706.039

6 

MWAA's accountability to Congress, stakeholders, and the public-as well as its 

compliance with the Act. Specifically, we reported the following: 

• MWAA's policies are not sufficient to promote ethical conduct or prevent 

potential conflicts of interest for its Board members. 

• MWAA's policies and oversight do not ensure that Board travel expenses are 

reasonable. 

• Visibility into key Board activities remains limited despite actions taken to 

enhance Board transparency. 

• MW AA did not maximize competition for contracts or always request Board 

approval when required. 

• MWAA's contracting policies and procedures do not reflect effective contract 

management. 

• MWAA's policies lack procedural safeguards for ensuring they are followed, 

and there are limited avenues for judicial review and other mechanisms (such 

as penalties for noncompliance) to address concerns regarding MW AA' s 

ethics, transparency, contracting, and other practices. 

Notably, we reported that MW AA's government-appointed Board members are 

not bound to the same State ethics and financial disclosure laws as the elected 

officials who appointed them. This is in contrast to other major transportation 

Boards--for example, the Board of Directors of the Dallas-Fort Worth 

International Airport must follow Texas State law and guidelines related to ethics, 

transparency, and procurement; willful failure to comply can be punishable by 

imprisonment and fines. 

In response to our May 15 interim letter describing questionable Board activities, 

the Secretary, the Governors of Maryland and Virginia, and the Mayor of the 

District of Columbia issued a letter in August 2012 to MWAA's Chairman and 

Board members mandating immediate reform of MWAA's business practices. 

Reforms include, among others, terminating all existing contracts with former 

Board members and former employees that were not competitively bid, 

strengthening MWAA's ethics code to guard against conflicts of interest and 

provide annual ethics training to Board members and employees, and tightening 

Board travel procedures to eliminate wasteful spending. In addition, thc Secretary 

appointed an Accountability Officer to monitor and report on any rcform eflOJ1s. 

MWAA HAS BEGUN TO ADDRESS OIG OBSERVATIONS ON 

WEAKNESSES IN GOVERNANCE 

Since our interim letter and the beginning of our audit, MW AA has taken a 

number of steps aimed at improving its transparency, governance, and 
75 


Insert offset folio 40 here 76706.040

7 

procurement practices. For example. MW AA took action to remove a former 

Board member who had been hired into a senior position a day after retiring from 

the Board. 

According to MW AA officials, the Authority has taken action to 

• approve a new travel policy, 

• revise the Board's bylaws and Freedom of Information Policy to increasc 

transparcncy, 

• suspend the use of categorical exceptions for professional services, 

• terminatc contracts with former Board members or let those contracts expire, 

• establish guidelines requiring contracting officers to select contractors under 

temporary staffing multiple-award contracts, and 

• enhance screening for nepotism. 

Furthermore, as of September 19, 2012, MW AA approved new codes of ethics for 

its Board of Directors and its employees. The revisions will go into effect 

December 1,2012, (for the Board) and January 1,2013 (for MWAA employees). 

In addition, in its response to this report. the DOT Office of the Secretary (OST) 

referenced additional planned actions to improve MWAA's accountability, 

including pursuing an amendment to the lease between MW AA and DOT to 

ensure greater oversight. See the appendix for OST's official response. 

These actions indicate that longstanding weaknesses exist and that significant 

changes are needed to promote ethical conduct among MW AA employees and 

Board members and ensure the integrity of its contracting policies and practices. 

However, MW AA's recent actions have not been independently assessed and 

remain to be implemented. In addition, further actions are needed to fully address 

the management weaknesses we identified during our audit, particularly as they 

relate to the Authority's oversight of its activitics. 

MWAA'S CONTRACTING POLICIES AND PRACTICES ARE 

INSUFFICIENT TO ENSURE COMPLIANCE WITH THE AIRPORTS 

ACT OR LEASE AGREEMENT AND DO NOT FOLLOW 

CONTRACT MANAGEMENT BEST PRACnCES 

The Airports Act and the lease agreement between DOT and MWAA require the 

Authority to award contracts over $200,000 competitively to the maximum extent 

practicable and to develop and publish competitive procedures. However, 

MWAA's contracting policies and practices do not encourage competition. 

Instead, MW AA has relied on categorical exceptions to award contracts with 
76 


Insert offset folio 41 here 76706.041

8 

limited competItIOn. These weaknesses are exacerbated by ineffective contract 

management and oversight and a lack of adequate procurement integrity policies 

to ensure impartiality when awarding and administering contracts. Finally, 

MWAA lacks a formal acquisition planning process and has not effectively 

managed the size and skill of its acquisition workforce. 

Throughout our review, we identified some MW AA Board members and senior 

officials, such as Vice Presidents, who engaged in questionable contracting 

practices, compromising MW AA's contracting policies and internal controls for 

procurement. The integrity of an organization's top management plays a key role 

in determining an organization's internal control culture. While official policies 

establish rules, the organizational culture must follow suit to ensurc the rules are 

followed, not compromised or ignored. 

MWAA's Contracting Policies and Practices Do Not Maximize 

Competition 

While the Airports Act and MW AA's lease agreement require full and open 

competition to the maximum extent practicable, the Act also permits the Board to 

grant exceptions to competition requirements. MW AA's Contracting Manual, 

which was approved by the Board, allows staff to use categorical exceptions to 

limit competition. For the period we reviewed,lo MWAA used this authority to 

award almost two-thirds of its contracts that exceeded $200,000 with less than full 

and open competition for items such as legal, financial services, or urgently 

needed goods or services. Finally, MWAA awarded out-of-scope contract 

modifications and task orders without required Board approval, placed large-value 

task orders without adequate justification, and distributed work on multipleaward 11 contracts disproportionately. These practices limit competition because 

they allow MW AA to procure significant new work on existing contracts that 

could be awarded competitively. 

MWAA Awarded Two-Thirds of Its Contracts With Less Than Full and 

Open Competition 

Betwcen January 2009 and June 2011, MWAA awarded 190 contracts that 

exceeded $200,000--{)nly 68 (36 percent) of which were awarded with full and 

open competition. Of these 190 contracts, 5 were sole source awards with a 

combined value of $6 million. However, MW AA awarded these five contracts 

without Board approval-which the Airports Act, lease agreement, and MW AA' s 

Contracting Manual require. MW AA awarded the remaining 117, or 62 percent of 

the 190 contracts over $200,000, using categorical exceptions (see figure 1); these 

contracts amounted to $225 million, or 40 percent of the total value of the 

10 January 2009 to June 2011. 

I! A multiplc.award contract is a task order contract or any other indetinitc·delivery, indefinite-quantity contract that an 

agency enters into with two or more sources under the same solicitation. 
77 


Insert offset folio 42 here 76706.042

9 

Authority's contracts over, $200,000. 12 MWAA's policies allow limited 

competition through the use of six categorical exceptions,13 but its Contracting 

Manual states that these exceptions "comprise only a small portion of the Airport 

Authority's contracts and their dollar value." 

Figure 1. MWAA Contracts Over $200,000 Awarded Between 

January 2009 and June 2011 

Source: OIG analysis ofMWAA's contracting data. 

MW AA used the professional services categorical exception-including legal, 

financial, audit, and legislative services-to award 14 limited competition 

contracts (valued at $20 million), or 7 percent of the 190 contracts over $200,000, 

that MWAA awarded between January 2009 and June 2011. 14 Unlike MWAA's 

Contracting Manual, the Federal Acquisition Regulation (FAR) restricts the use of 

these types of exceptions. In response to our concerns, MW AA issued a 

memorandum to suspend the use of the categorical exception for professional 

services, pending revisions to the Contracting Manual. IS 

MW AA also used categorical exceptions without providing adequate justification 

as to why it was in the Authority's best interest not to obtain full and open 

competition. Consistent with Federal best practices, MW AA's contracting policies 

12 Awarded between January 2009 and June 20 II. 

IJ The six categorical exceptions esk1blished in section 1.2 of MWAA's second edition Contracting Manual include 

(I) limited competition for urgent needs; Icgal, financial, audit, or legislative reprcsentation professional serviccs; and 

local business set asides; (2) airport security controlled distribution RFP; (3) utility supplies and services; 

(4) Govemment purchasing agreements; (5) airlinc tenant procured projects; and (6) proprietary equipment and 

software. Use ofthese exceptions requires no further Board approval. 

14 MWAA awarded a total of709 contracts with a total value 01'$589 million. MWAA awarded 54 limited competition 

contracts using the professional services exception out of the 709-including 40 contracts that were below $200.000. 

is As of August 10, 2012. 
78 


Insert offset folio 43 here 76706.043

10 

require such justifications when awarding contracts with less than full and open 

competition. However, we found inadequate justifications in 27, or 56 percent of 

the 48 contracts we reviewed (sec table 1).16 

Table 1. Inadequate Justifications for Categorical Exceptions to 

Full and Open Competition 

Reason justifications were inadequate per MWAA's Contracting Manual No. of contracts' 

Approved after the contractor had started work 17 

Approved even though the justification was incomplete 15 

No justification documented 

Approved for the limited competition exception, but lacked any evidence of 

competition 

Approved for the urgent needs exception, but did not adequately justify the 

reason for the urgency 

a The contracts add up to more than 27 because the justifications for some contracl" were inadequate for more than one 

reason. 

Source: OIG analysis ofMWAA contracts awarded with categorical exceptions. 

8 

3 

In addition, MW AA awarded five sole source contracts over $200,000 without 

Board approval, violating the Airports Act, lease agreement, and MWAA's 

Contracting Manual. MW AA asserts that these five contracts did not require 

Board approval because they were awarded as categorical exceptions to 

competition. However, MW AA 's contract database and file documents show that 

the contracts were actually awarded solc source. For example, MW AA officials 

explained that three of the five contracts were awarded under the "urgent" 

categorical exception, but the files lacked evidence of urgency. Furthcr, MW AA 

awarded the three contracts-each worth $350,000-to the same contractor over 

3 consecutive years, suggesting that the awards were for a recurring need rather 

than an urgent one. 

MWAA's Contracting Manual also requires justification for all sole source 

contracts valued over $2,500. We reviewed all 15 contracts for which MW AA's 

Secretary of the Board served as the Contracting Officer's Technical 

Representative (COTR) and identified 10 sole source contracts with award values 

under $200,000 that lackcd adequate justification. In addition, these contracts 

lackcd evidence of actions taken to encourage competition, such as advertising or 

market research, which is not consistent with MWAA's Contracting Manual 

requirements. For example, the Board requested that a $190,000 sole source 

contract for independent engineering reviews be awarded to an engineering firm 

16 These 48 include all contracts awarded under a categorical exception !i'om sample I and sample 3, see exhibit A. 

From sample I, 19 of the 32 were awarded as categorical exceptions. but the justifications for 9 were inadequate. From 

sample 3, 29 of the 69 were awarded as categorical exceptions, but the justilieations for 18 were inadequate. 
79 


Insert offset folio 44 here 76706.044

11 

that employed a project manager who had worked on a prior MW AA contract. In 

response to the request, the project manager informed the Secretary of the Board, 

via personal email, that he was leaving the firm under the prior contract. The 

Board then awarded the contract to the project manager's new firm. The 

justification for this award did not specify whether the project manager had unique 

qualifications and did not describe any efforts made to seek competition for the 

contract. Further, MW AA classified 2 of the 10 sole source contracts as recurring 

needs, but the justifications did not specify the actions it would take to obtain 

competition in the future, as MW AA' s Contracting Manual requires. 

MWAA Does Not Follow Federal Best Practices To Publicize and Solicit 

Contract Opportunities 

To encourage competition, the FAR generally requires agencies to publicize 

contract actions, including intent to award sole source contracts prior to awarding 

them. In contrast, MWAA's Contracting Manual does not require public 

notification of intent to award sole source contracts, and none of the five sole 

source contracts over $200,000 had been publicized prior to award. This practice 

does not provide other contractors a fair opportunity to offer the supply or service 

at a potentially lower cost. 

According to MWAA's Contracting Manual, solicitations for contracts over 

$25,000 are generally posted on its Web site to foster competition. 17 Further, the 

Manual requires the involvement of the Procurement and Contracts Department to 

help prepare a solicitation. However, we identified eases in which MW AA's 

Board of Directors did not issue formal solicitations for contracts or involve the 

Proeurement and Contraets Department until the eontracts were ready to be 

awarded. For example, MWAA's Board of Directors awarded a $150,000 contract 

to help prepare a solicitation for a study to assess MWAA's organizational 

structure. Forty days later, MWAA decided not to compete the contract. Instead, 

MWAA-without the Procurement and Contracts Department's involvementawarded an $885,000 organizational study sole source contract to the contractor 

hired to develop the solicitation. Contracting without a solicitation not only limits 

competition but can lead to potential misunderstandings about thc requirements or 

scope of the contract. In addition, under Federal procurement rules, if a contractor 

assists in preparing a work statement to be us cd in competitively acquiring a 

service, that contractor generally may not supply that service, except in limitcd 

situations. 18 These rules are designed to ensure that the Government receives 

unbiased advice and avoids allegations of favoritism. 

17 MWAA Contracting Manual. second edition. Section 1.5. MWAA does not require solicitations for sole source 

awards to be posted on its Web site. 

18 FAR 9.505.2. 
80 


Insert offset folio 45 here 76706.045

12 

Out-of-Scope Contract Actions, Unjustified Task Orders, and Unbalanced 

Work Distribution on Multiple-Award Contracts Further Limited Competition 

MW AA issued out-of-scope contract actions over $200,000-including contract 

modifications and task orders 19 -without required Board approval. 20 From our 

statistical sample of 24 out of 343 active MWAA contracts,21 we identified 8 for 

which MW AA issued a total of 20 out-of-scope contract actions with a combined 

value of $57 million. Based on these findings, we project that MWAA has issued 

$107.6 million in out-of-scope contract actions on contracts active as of June 

201l. 22 

A 2002 audit by the Government Accountability Office (GAO) also found that 

MW AA added out -of-scope contract modifications, noting that MW AA' s 

published contracting guidance at the time did not require contract modifications 

to remain within scope. 23 In early 2003, MW AA published the first edition of its 

Contracting Manual, which contained the requirement that out-of-scope work be 

awarded under a new contract-unless justified as sole source, which requires 

Board approval when the value of the added work exceeds $200,000. 

However, MWAA's acquisition staff were not aware of a single instance in which 

an out-of-scope contract action came before the Board for approval, which may be 

the result of MW AA' s definition of within-scope work. According to MW AA' s 

Contracting Manual, within-scope work includes requircments that the contract 

did not initially solicit but are now considered integral. This definition allows 

work to be added to contracts that far exceeds the contract award amount and 

length and is unrelated to the original contract's purpose. 

For example, the expansion and renovation of the Dulles Airport main terminal, an 

$8 million contract awarded in 1989, has grown by 1,700 percent to a total value 

of $147 million. From 2003 to June 20 II, MW AA issued 10 contract 

modifications-at a total cost of $36 million-which added design and 

construction management services for integrating the Transportation Security 

Administration's (TSA) luggage screening equipment and the airport's baggage 

handling systems. According to MW AA, these modifications were within the 

original scope of the contract because the expansion and renovation of the main 

terminal at Dulles Airport has been a long-term, complex, and evolving project. 

However, TSA's luggage screening requirement was created more than a decade 

19 A contract moditication is any written change to the terms of a contract. A task order is an order for services placed 

against an established contract. 

20 MWAA Contracting Mllilual. second edition. Section 5.4.2. requires that new work in excess or$200.000 obtain 

Board approval. 

21 Active as of June 3D, 2011. See sample 2 in exhibit A. 

22 Our estimate has an actual lower limit of$57.3 million llild a 90-percent upper conlidence limit of$170 million. 

23 GAO Report Number GAO-02-36. "Metropolitan Washington Airports Authority: Contracting Practices Do Not 

Always Comply with Lease Requirements," March I. 2002. 
81 


Insert offset folio 46 here 76706.046

13 

after MW AA awarded this contract. Therefore, TSA' s new luggage screening 

requirement could not be reasonably expected to be part of the contract. 

Unlike the approach taken by MW AA, courts interpret within-scope work to be 

what an offeror would reasonably expect to occur during performance of the 

contract when the offeror submitted its proposal. 24 Adding work that had not been 

originally contemplated or solicitcd prevents qualified contractors from competing 

for the new work. By issuing out-of-scope contract actions that could have been 

competitively awarded, MW AA has missed opportunities to maxImIze 

competition and obtain better value. 

MW AA may have also missed opportunities to maxImIze competItIon in its 

administration of task order contracts. MWAA's Contracting Manual requires 

proper justification to explain why work valued at over $200,000 should be 

performed as a task order on an existing contract, rather than be awarded as a 

separate new contract. 25 In our sample,26 MW AA placed 25 of 27 task orders 

without adequate justification.27 The 25 task orders have a combined value of 

$13.6 million. According to an MW AA acquisition official, the justifications were 

provided verbally in some cases; however, verbal justifications cannot be verified 

and are therefore inadequate. 

The manner in which MW AA has used multiple-award contracts has further 

limited competition. In the Federal arena, multiple-award contracts are intended to 

maintain a competitive environment among awardees and to improve contractor 

performance. 28 To this end, Federal contracting officers must provide contractors 

on multiple-award contracts with fair opportunities to compete for work and 

document the rationale for their selection of contractors under each task order. 29 

While MW AA' s Contracting Manual allows use of multiple-award contracts, it 

docs not provide instructions for administering them. We found that MW AA 

employees outside the Procurement and Contracts Department-such as COTRshave ordered work under multiple-award contracts without involving the 

contracting officers and have not documented contractor selection rationale. 

24 AT&T Communications v. Wiltel, Inc., I F.3d 1201, 1207 (Fed. Cir., 1993); DynCorp International LLC, B-402349, 

March 15.2010. 

" MWAA has required task order justifications since January 2006. MWAA incorporated this initially unpublished 

guidance into its Contracting Manual, which went into effect in 2009. 

26 Our sample consisted of24 MW AA contracts active as of June 30, 20 II. Three of these contraets were task order 

contracts, which are contracts for services that do not procure or specify a finn quantity of services and provide for the 

issuance of task orders during the contract period. 

27 We found justifications for 3 of27 task orders in our sample .. but we did not consider I justification adequate because 

it was dated afier the award of the task order. 

28 Office of Management and Budget, "Best Practices for Multiple Award Task and Delivery Order Contracting: 

Interim Edition," February 19. 1999. 

19 FAR 16.505(b)(l) and 16.505(b)(5). 
82 


Insert offset folio 47 here 76706.047

14 

Over the past 8 years, MW AA awarded more than 80 percent of work under three 

groups of multiple-award contracts to a single contractor ("Contractor A" in 

table 2). However, the contractor's rates were often higher than the other multipleaward contractors' rates. For example, the contractor's rates in a 2012 contract 

were between 28 percent and 234 percent higher. While MW AA may have had 

non-price related reasons for selecting Contractor A, this unbalanced distribution 

of work to a single contractor with significantly higher rates appears contrary to 

the purpose of multiple-award contracts and could further compromise MWAA's 

competitive environment. 

Table 2. Disproportionate Distribution of Work on a Series of 

Multiple-Award MWAA Contracts 

Group of multiple -award contracts 

Multiple-award Group 1 (2004-2008) 

Multiple-award Group 2 (2008-2012) 

Multiple-award Group 3 (Jan. 2012-) 

Source: OIG analysis of M W AA data. 

Percent of work awarded 

Contractor A Other contractors 

75 25 

86 14 

90 10 

No. of other 

contractors 

3 

3 

2 

In addition, MWAA allowed Contractor A to add job categories to a contraet but 

did not offer the other multiple-award contractors the same opportunity. Thus, 

when MW AA ordered work related to those additional job categories, they were 

effectively sole source awards because only one contractor was able to accept the 

work. 

In another set of multiple-award contracts, one of five firms received over 

38 percent of work. A former MW AA Board member was an owner of the firm 

that received the most work, which could create the appearance of favoritism. 

In July 2012, MWAA's Procurement and Contracts Department established 

guidelines requiring contracting officers to select contractors under multiple-award 

contracts for temporary staff. However, this policy only applies to temporary 

staffing contracts rather than to all multiple-award contracts. 

MWAA's Insufficient Policies and lack of Controls Undermine Its 

Contract Management 

MW AA does not effectively manage its contracts. Specifically, MW AA does not 

track employees who have been delegated contracting authority and lacks controls 

to ensure employees follow its contracting policies. MW AA also lacks a formal 

acquisition planning process and has not effectively managed the size and skill of 
83 


Insert offset folio 48 here 76706.048

15 

its acquisition workforce. Moreover, MW AA lacks contracting policies and 

practices to ensure impartiality when awarding and administering contracts. 

MWAA Does Not Track Employees With Delegated Procurement Authority 

or Ensure They Stay Within Delegated Award Limits 

MWAA's procurement authority has been delegated to seven MWAA 

employeesJO outside its Procurement and Contracts Department who may award 

contracts up to a certain dollar amount. Six of the seven are allowed to further 

delegate this authority to other employees without requesting permission or 

approval. However, MW AA has not kept track of who has been delegated this 

authority and could not give us an accurate count of all of its employees 

authorized to award MW AA contracts. 

We determined that 24 employees 31 outside of MW AA's Procurement and 

Contracts Department have been delegated procurement authority and that 8 of 

these employees awarded a total of 22 contracts that exceeded the value of their 

authority limie2 by as much as $50,000-for a total of almost $300,000. For 

example, MWAA's General Counsel awarded a $100,000 legal services contract, 

and an employee at Ronald Reagan Washington National Airport awarded an 

$87,000 contract for carpeting. However, both employees had authority limits of 

only $50,000. Employees who award contracts above their delegated authorities 

not only violate the terms of their delegation but also may make improper 

purchases or lack the appropriate experience and knowledge to execute larger and 

potentially more complex contracts. 

MWAA Lacks Controls To Ensure Employees Follow Key Contracting 

Policies and Procedures 

MWAA also lacks controls to ensure that its employees follow MWAA's 

contracting policies and practices regarding the start of contract work, Board 

approval for high-value contracts, and for technical evaluation committees 

responsible for selecting contractors. 

MW AA allowed work to begin prior to contract award dates-that is, before the 

contracting officer completed and signed the contract documents. In some cases, 

30 MWAA directive GC-002 includes delegaled contracting authority to: (I) President and CEO, (2) Executive Vice 

President and Chief Operating Officer (COO), (3) Vice President and General Counsel, (4) Vice President of Business 

Administration, (5) Vice President and Airports Manager Ronald Reagan Washington National Airport, (6) Vice 

President and Airports Manager Washington Dulles International Airport, and (7) Concessions and Property 

Development Manager. MWAA's Board Resolution 01-20 grants the President and CEO the authority to enter into. 

administer, modify, and ternlinate contracts. This authority is re-delcgatcd in MWAA directive GC-002. 

31 This number reflects MW AA employees who have been granted delegation in accordance with MWAA directive 

GC-002. The 24 employees outside of the Procurement and Contracts Department with procurement authority consist 

of the CEO, COO, General Counsel, Vice President of Business Administration, Concession & Property Development 

Manager, as well as 8 employees ITom Ronald Reagan Washington National and II Irom Dulles International. 

32 Of these eight employees, seven had $50,000 authority limits, and one had a $2,500 limit. 
84 


Insert offset folio 49 here 76706.049

16 

work was started even before the contracting officer was aware MW AA 

management wanted to award a contract. However, MW AA's contracting policy 

rcquires the contracting officer to ensure that all significant procurement actions 

are taken prior to award. Ultimately, initiating work before contract terms are 

agreed upon in writing-including its requirements, price, and other termssignificantly increases MWAA's cost and performance risks. 

Of the 709 contracts MWAA awarded between January 2009 and June 2011, 

contractors started work on 27 percent before their official award dates. For 

example, MW AA paid one contractor $572 per hour to attend a 5-hour Board 

meeting on January 6, 201O--during which the Board of Directors approved the 

selection of the contractor. The contract was not officially awarded until 

July 13,2010-188 days after the work began. Table 3 shows the MWAA 

contracts with work started before official contract award dates. 

Table 3. MWAA Contracts With Work Started Before Official 

Contract Award Dates 

No. of days 1-30 31-60 61-90 91-120 121-150 151-180 Over 180 Total 

before contract days days days days days days days contracts 

award 

No. of contracts 59 62 29 17 5 5 13 190 

Source: OIG analysis of MW AA contract documentation. 

Some of these contracts were initiated by top management. For example, 12 of 

15 contracts we reviewed-for which the Secretary of the Board was the COTRwere initiated prior to official contract award dates. 33 The 12 contracts-which 

had a combined value of $1 million-were for work requirements requested by 

MW AA Board members. For example, an MW AA Board member requested that a 

consultant firm proceed with work on a sole source contract 58 days before 

MW AA's Procurement and Contracts Manager gave his required approval for the 

award. 34 

A 2006 MW AA internal audit also reported that contractors began work on some 

contracts prior to award. In response, MW AA stated that it would revise its 

Contracting Manual to only permit this practice during extraordinary 

circumstances, but MW AA has not yet made these planned revisions to the 

manual. 

33 Work for these 12 contracts began an average of33 days before award. ranging trom as few as 4 days to a, many as 

66 days before award. 

J4 FAR 16.603 provides for letter contracts. a V>Tilten preliminary contractual instrument, which allows work to start 

prior to contract award. Letter contracts shall not be entered into without onmpetition, when competition is required. 
85 


Insert offset folio 50 here 76706.050

17 

MW AA also lacks controls to ensure that its employees follow its contracting 

policies and practices regarding high-value contract approval and contractor 

selection. As stated in MW AA's Contracting Manual, Board approval is required 

for contract awards exceeding $3 million, except competitively awarded 

construction contracts.35 However, as we reported in our interim letter, MWAA 

employees did not always obtain Board approval for high-value contracts. In our 

statistical sample of 32 out of 165 contracts awarded between January 2009 and 

June 2011, we identified 13 that were high-value---4 of which lacked Board 

approval (totaling $34 million). MW AA asserts that Board approval was not 

required for these contracts, but our review found that MWAA's reasons for not 

seeking Board approval were unsupported. For example, MW AA stated that one 

high-value contract was a construction contract, but the contract was actually for 

advisory services to support a construction project, which does not meet MWAA's 

definition of construction. 36 Based on our findings, we project that MW AA spent 

$83.6 million 37 on contracts without Board approval-14 percent of an estimated 

total of MWAA's contracts awarded between January 2009 and June 2011. This 

practice keeps the Board from being fully informed of critical business decisions. 

In 2002, GAO similarly reported that MW AA had overlooked requirements to 

secure required Board approval. Our findings indicate that MW AA has not fully 

addressed GAO's concerns. 

In several instances, MW AA also failed to comply with its policy for technical 

evaluation committees, which evaluate and help select contractors competing for 

MWAA contracts. For example, MWAA's Contracting Manual states that a 

supervisor and a subordinate should not serve together as voting members when 

possible to ensure indcpendent evaluations. However, the Vice President for the 

Office of Audit, who served as the chair of a technical evaluation committee, 

selected two subordinates as voting members, and MW AA 's Procurement and 

Contracts Manager approved the committee. 

MWAA Lacks a Formal Acquisition Planning Process and Has Not 

Effectively Managed the Size and Skill of Its Acquisition Workforce 

MW AA does not have a formal acquisition planning process that requires 

forecasts of upcoming acquisition needs. Early identification of acquisition needs 

allows an organization to maximize competition, consolidate related acquisitions 

to increase buying power, and reduce administrative burdens. 38 Federal law 

requires agencies to prepare annual forecasts of anticipated acquisitions for the 

35 MW AA Contracting Manual, second edition, Section 1.2. 

36 MWAA defines "construction" as "constmction, demolition, alteration, or repair of buildings, structures. or other real 

property." 

7 Our estimate of $83.6 million has an actual lower contidencc limit of$33.7 million and a 90-perccnt upper 

confidence limit of $138.1 million. 

38 GAO Report Number GAO-05-218G, "A Framework for Assessing the Acquisition Function at Federal Agencies," 

September 2005. 
86 


Insert offset folio 51 here 76706.051

18 

next fiscal year and to periodically update those forecasts as necessary. For 

example, DOT adheres to this mandate by requiring each Operating 

Administration to submit annual forecasts of expected acquisitions over $100,000 

before the start of the next fiscal year. DOT also requires quarterly updates to 

these forecasts. 39 While MW AA' s Procurement and Contracts Department 

requests annual acquisition plans from MW AA managers, these plans are not 

required. According to MW AA, fewer than 40 percent of MW AA managers 

respond to these annual requests, and MWAA's Procurement and Contracts 

Manager considers the plans that are submitted to be "fairly W1feliable." 

According to MW AA procurement staff, MW AA offices also routinely ignore 

notices from contracting officers of upcoming contract expiration dates. Because 

of poor planning, MW AA has extended existing contracts rather than 

competitively awarding ncw contracts-ultimately missing opportunities to obtain 

competition and better prices. For example, because of delays in soliciting a new 

contract, MW AA extended a custodial services contract for 7 months in 20 II. 

MW AA's workforce planning has also becn insufficient to determine its 

workforce needs. According to MW AA, the Procurement and Contracts 

Department has only grown by two employees in the past 20 years, and its one 

remaining support contractor's term will cxpire at the end of 2013 with no plans 

for replacement. However, between 2007 and 2011, new contracts awarded by the 

Procurement and Contracts Departmcnt increased an average of 47 contracts 

annually due to the Dulles Toll Road and Dulles Metrorail project. While the 

Procurement and Contracts Departmcnt recently requested an additional five staff 

to manage this increase, MW AA has not conducted a comprehensive workforce 

assessment to determine the skills needed to award and administer MW AA's 

existing and future contracts. 

In addition, MW AA's contracting officers and COTRs are not required to earn or 

maintain acquisition certifications. Federal agency contracting officers and 

COTRs are required to complete specific acquisition-related certification programs 

and to earn continuing education credits to maintain certification. These 

ccrtifications can provide staff with the training needed to cnsure proper contract 

award and oversight. According to MW AA officials, training budgcts40 were not 

fully used in the past because statT lacked thc time for training due to increased 

workloads. This indicates that MW AA has not made training a priority for its 

acquisition staff 

19 Transponation Acquisition Manual, Section 1219.202-270. 

40 From 2009 to 2011. MWAA allotted $15,000 annually for the Procurement and Contracts Dcp.nmen!. 

approximately 15 employees. or $1,000 per person. 
87 


Insert offset folio 52 here 76706.052

MWAA's Contracting Policies and Practices Do Not Emphasize 

Procurement Integrity 

19 

MW AA also lacks comprehensive policies to ensure impartiality when awarding 

and administering contracts. For example, MW AA's Contracting Manual lacks 

sufficient rules to ensure that employees do not divulge non-public and sensitive 

procurement information to potential contractors. Federal rules prohibit employees 

from disclosing information that could jeopardize procurement integrity-such as 

source selection information and bid or proposal information. 41 Without such 

restrictions, contractors can gain an unfair advantage when bidding for contracts. 

For example, one MWAA Board member, who was the Chairman of the 

committee responsible for selecting a contractor, disclosed in an email to a 

potential contractor another contractor's pricing. 42 In another example, the formcr 

Vice President for the Office of Information and Telecommunications Systems 

provided non-public information about an upcoming solicitation to a contractor 

who was ultimately awarded the contract. Such actions by Federal employees 

would be considered violations of Federal laws and regulations. 

In addition, while the Federal Government imposes some post-employment 

restrictions on Federal employees, MWAA lacks any post-cmployment restrictions 

for Board members and employees. A lack of post-employment restrictions may 

present at least the appearance that prior members were given an unfair advantage 

in receiving contracts. We identified 7 former Board members and affiliated firms 

who have been awarded 30 contracts, amounting to almost $2 million since 2003. 

One former Board member was awarded 16 sole source contracts totaling 

$262,000 over the past 10 years-the first only 3 months after the member left the 

Board in 2002. In response to our concerns, MWAA recently began terminating its 

contracts with former Board members and is not renewing its contracts with other 

former members. In September 2012, MWAA approved a new ethics code that 

will prohibit contracts with Board Members for 2 years after the conclusion of 

their service. 

MWAA'S ETHICS CODE AND PROCESSES HAVE BEEN 

INSUFFICIENT TO PREVENT ACTUAL AND PERCEIVED 

CONFLICTS OF INTEREST AMONG EMPLOYEES 

As required by the lease agreement with DOT, MW AA created a code of ethics 

with provisions aimed at ensuring the ethical conduct of its employees. However, 

the code and MWAA's related processes have not becn sufficient to prevent actual 

and perceived conflicts of interest and other violations. Specifically, MW AA lacks 

effective procedures to detect violations of its anti-nepotism provision and to 

4141 V.S.C. 2102; FAR 3.104-3; 5 eFR 2635.703. 

42 This individual is not a current Board member; however, this incident occurred when the individual served a'i. a 

Board member. 
88 


Insert offset folio 53 here 76706.053

20 

identify potential conflicts of interest through its financial disclosure process. A 

lack of required ethics training for all employees has compounded these 

weaknesses. As a result of these weaknesses and poor oversight, there have been 

multiple violations of the code's anti-nepotism and gift prohibition provisions and 

a lack of assurance that employees are fully aware of the ethics requirements. 

While MW AA recently approved a new code of ethics for its employees, which 

takes effect in January 2013, additional actions will be required to ensure that the 

new code is implemented and followed. 

MWAA Lacks Sufficient Controls To Detect and Prevent Nepotism 

According to MWAA's ethics code, MW AA employees may not hire, supervise, 

or work with family members. 43 However, MW AA lacks controls to detect and 

prevent these prohibited relationships. For example, MW AA's employment 

application requests applicants to identify known relatives or friends at MW AA 

but not the exact relationship, which makes it difficult to determine whether the 

relationship would constitute nepotism if the applicant were hired. 

The lack of oversight and responsibility has resulted in clear violations of 

MWAA's anti-nepotism provision, which states that employees may not 

• appoint, employ, promote, or advance a relative within MW AA; 

• directly or indirectly supervise relatives or have influence over the work, 

employment status, or affairs of the organizational unit; or 

• work with a relative under the same supervisor. 

One MW AA department in particular violated every component of the provision. 

In this case, two relatives of the Vice President of Human Resources (Relatives A 

and B in figure 2) worked within his department. Yet, the Vice President denied 

having any relatives who worked at MW AA. 

43 The code specifies relativcs as father, mother, grandfather, grandmother. son, daughter, granddaughter, grandson, 

brother, sister, uncle, aunt, nephew. niece, husband, "\\'ife, father~in-Iaw, mother-ill-law, daughter~in-Iaw. son-in-law, 

brother-in-law, or sister-in-law. 
89 


Insert offset folio 54 here 76706.054

21 

Figure 2. Organizational Chart Depicting Violations of Nepotism 

Provision Within Human Resources Department 

Vice President 

of Human Resources 

Program Supervisor 

(Not related to Vice President or Relatives A 

and B) 

Relative A of Vice President «---- Relative B of Vice President 

Source: 01 G analysis. 

As depicted in the figure, the following violations were committed: 

• The Vice President directly hired Rclative A into a position under a direct 

report (Program Supervisor in figure 2). Moreover, once the Office of Public 

Safety completed a background check for Relative A, the Office recommended 

against hiring the employee due to questions about the employee's suitability. 

However, the Vice President overrode this recommendation and allowed 

Relative A to stay in the position. In addition, the official allowed Relative A 

to start working at MW AA 3 weeks prior to completion of the background 

check, which is contrary to MW AA's hiring practice. 44 

• Relative B is an immediate family member of Relative A. Relative A has the 

opportunity to influence the work decisions of Relative B due to the particular 

naturc of their positions and the workflow of the program for which they both 

work. 

• The Vice Prcsident and Relative B are also related, but their specific family 

relationship is not included in MW AA' s list of prohibited relationships in its 

anti-nepotism provision. However, given the Vice President's position as the 

head of the department, the appearance of preferential treatment exists. While 

the Vice President does not directly supervise Relative B, he is responsible for 

approving the bonuses, awards, salary, and promotions for all employees in the 

44 MW AA ·s hiring practice does not allow employees to start work until afler they have passed their background check. 
90 


Insert offset folio 55 here 76706.055

22 

department. Therefore, he has a supervisory relationship with both Relatives A 

andB. 

Without clear internal controls to prevent and detect nepotism, MW AA is 

vulnerable to the perception of favoritism and cannot ensure that all employees are 

hired based only on the merit of their qualifications. 

MWAA's Financial Disclosure Processes Have Not Promoted Full 

Disclosure of Conflicts of Interest To Ensure Compliance With Ethics 

Provisions 

MWAA's financial disclosure process has also lacked the rigor needed to ensure 

employees fully report contlicts of interest that damage the Authority's credibility. 

At the time of our audit, MWAA's code required MWAA exccutives, Vicc 

Presidents, and all employees who report directly to the executives or Board of 

Directors-as well as employees who work in certain departments45-to annually 

disclose personal financial interests in any busincss doing business with MW AA. 

However, disclosure requirements for other MW AA staff were less clear, 

including those for certain contracting officers and COTRs. Further, in contrast to 

Federal disclosure policies-which require employees to report assets and income, 

liabilities, outside positions, agreements or arrangements,46 and gifts and travel 

reimbursements-MW AA' s disclosure policies only required staff to identify 

businesses that are a source of employment or other income and businesses In 

which the employee has an ownership interest or an actual or potential liability. 

Furthermore, MW AA's code lacked a clear requirement for employees to disclose 

receipt of gifts. MW AA's code of ethics prohibits employees from accepting gifts 

of more than $25, with some exceptions, or on a regular and frequent basis from 

vendors either conducting or seeking to conduct business with the Authority. Yet, 

the MWAA Vicc President for Information and Telecommunications Systems and 

staff members in his department regularly and frequently accepted gifts well in 

excess of $25 from an MW AA contractor with a major contract with the 

department he managed. From 2006 to 2010, the Vice President47 and stafl 

members-·including the COTR for the contract in question-acccpted a total of 

46 gifts at a total value of at least $12,000. 48 In addition, the Vice President 

"These departments include Poliee and Fire Chiefs and employees of the following departments: Pmcurement and 

Contracts Department, Conce~ions and Property Development. Office of General Counsel, Office of Air Service 

Planning and Development Office of Audit, Treasury Branch of the Finance Office, and Manager of Airlines 

Relations, the Controller, the Controller's secretary. Executive Assistant to the Chief Financial Ollieer. Managers of 

Airports' and Public Safety's Administration, Airports Contract Management Divisions and Procurement Offices and 

the Public Safety Property/Supply Office. 

46 These agreements and arrangements involve current or future employment; leave ofabsence trom another employer: 

continuation payment from another employer~ and continuing participation in another employer's pension or benefit 

plan. 

47 The Vice President for Infonnation and Telecommunications Systems was temlinaled from MW AA in April 2012. 

48 The value of some gifts. including professional sporting events, \Vas not disclosed. 
91 


Insert offset folio 56 here 76706.056

23 

solicited at least one gift for a major sporting event. Accepted gifts included the 

following: 

• Two tickets to the 2009 Super Bowl, associated travel, and accommodations in 

Tampa, FL, valued at almost $5,000 

• Four trips to golf tournaments, including one trip to the 2009 U.S. Open Golf 

Tournament in Long Island, NY, and three all-expense paid trips to Hilton 

Head, SC 

• A trip to New York City to attend a major league baseball game 

• Nineteen other major sporting cvents, such as professional basketball and 

hockey games 

• Three concerts, including performanccs by famous pop artists 

• A fishing trip, including food and drinks 

• Seventeen social events with food and beverages 

While the code encourages employees to seek advice from the Office of General 

Counsel before accepting gifts, Gcneral Counsel staff were not aware of anyone 

seeking advice regarding these particular gifts. Further, MW AA's financial 

interest form did not request information on gifts. Disclosing gifts could serve as 

an important control to help MW AA prevent and detect instances where 

employees accepted gifts that could have influenced their decisions. 

Another key area of concern is the lack of requirements to ensure all contracting 

officers and COTRs certify that they do not have personal financial interests in the 

contracts they award and administer. Specifically, MWAA's Contracting Manual 

only requires contracting officers and COTRs who scrve as part of technical 

evaluation committees to certify they do not havc a personal financial interest in 

any contractors they are evaluating. However, not all contracting officers and 

COTRs who award or administer contracts participate in technical evaluation 

committees, which can lead to gaps in certification. Further, although MW AA 

requires contracting officers to submit financial interest forms, it does not require 

COTRs to submit the forms. In total, we identified 168 out of 183 active COTRs 

who have not completed financial interest forms; a few COTRs were required to 

complete thc forms for other duties. 

Inadequate reviews of financial disclosurc forms have further undermined 

MWAA's employee ethics code. The Office of General Counsel, which serves as 

MW AA's ethics office, is responsible for collecting and reviewing financial 

interest forms. However, reviews were often limited to a cursory check by a staff 

assistant to make sure all forms have been signed and returned. Further, MW AA 

does not require that the reviews be signed or dated or otherwise documented. At 
92 


Insert offset folio 57 here 76706.057

24 

the same time, MW AA has not required employees to complete all sections of the 

form. In 48 (38 percent) of the 125 forms we reviewed,49 MWAA allowed 

employees to leave sections of the form blank. However, "N/A" or "None" 

responses would have been more appropriate and assured the reviewer that the 

employees read and understood the question and were, in fact, indicating that the 

question was not applicable to them or that they had no conflicts of financial 

interests. Instead, MW AA relies on a pre-printed statement located above the 

form's signature line as assurance that employees accurately disclosed all required 

information. 50 In contrast, the U.S. Office of Government Ethics requires Federal 

employees to affirmatively state whether or not they have any information that 

must be disclosed in each section of the financial disclosure form (such as by 

including "None" for a response rather than leaving it blank). This eliminates 

ambiguity regarding filers' intentions. 

Finally, the former CEO's 2009 financial interest form was incomplete, lacking 

key details about the CEO's financial holdings. 51 These weaknesses raise 

questions regarding MWAA's commitment to ensuring compliance with ethics 

requirements, especially for its most senior executives. 

MWAA's revised ethics code for employees, effective January 2013, will address 

several of these issues by enhancing the requirements for financial disclosure, 

including requiring employees to disclose gifts. 

MWAA Did Not Require Recurring Formal Ethics Training for All 

Employees 

A lack of effective ethics training for employees has also exacerbated MW AA's 

weaknesses in its ethics code and processes. Widely considered a best practice 

among ethics experts for public organizations, periodic ethics training can educate 

individuals regarding the requirements and standards to which they are held, and 

set a tone regarding the importance of ethical conduct in all official acts. While 

new MW AA employees receive an introduction to the ethics code at orientation, 

they do not sign an acknowledgment that they received, read, and understand 

MW AN s ethics policy. Beyond this initial orientation, the only training MW AA 

provided at the time of our review was one course that discussed part-time jobs 

and gifts, among other topics, for supervisory employees. 52 All other employees, 

including senior executives and Vice Presidents, were exempted. Without a strong, 

49 Ofthe 129 employees required to file financial interest forms betwcen 2009 and 2011, we selected 50 employees to 

review, of which 49 employees were randomly selected and I employee was selected based on employee interviews. 

This amounted to a review of 125 financial interest forms rrom the 50 sampled employees. 

50 This statement reads. "If! have not completed any of the earlier parts ofthis form. I certify that neither I nor any 

member of my Immediate Family has a financial interest, as defined in the Code, in any entity currently doing business 

with the Airports Authority." 

51 Specifically, the former CEO's disclosure form was missing the page that identifies businesses in which employees 

or their immediate family members have an ownership interest or an actual or potential liability. 

52 This course was offered throughout October through December 20 I O. 
93 


Insert offset folio 58 here 76706.058

25 

comprehensive employee ethics training program, it is difficult for MWAA to hold 

its employees accountable to its ethics requirements or take disciplinary action 

against violators. 

MWAA LACKS HIRING AND COMPENSATION POLICIES AND 

PRACTICES TO ENSURE SUFFICIENT OVERSIGHT AND 

ACCOUNTABILITY 

Significant deficicncies in MW AA's hiring and compensation practices call into 

question the integrity of the Authority's management and the qualifications of the 

Authority's workforce. MWAA senior officials made questionable hiring 

decisions by circumventing key components of MW AA' s hiring process to bring 

on or promote preferred candidates, regardless of their background check results 

or qualifications. In addition, managers authorized excessive salaries, unjustified 

hiring bonuses and cash awards, and ineligible benefits. Moreover, several of these 

questionable decisions occurred within the Office of Human Resources, despite its 

responsibility for setting hiring and compensation standards and ensuring sound 

management practices for the Authority. This lack of accountability, oversight, 

and controls has created a culture of favoritism at MW AA that has negatively 

impacted employee morale and exposed the Authority to legal complaints. 

Senior Officials Made Questionable Hiring Decisions by 

Circumventing Key Components of MWAA's Hiring Processes 

While MWAA has a standard hiring process it generally follows for filling 

cmployment vacancies or creating new positions, this process has not been 

formally documented as an official policy, despite the recommendations of an 

external governance consultant to do so. 53 This lack of an official policy made it 

easier for certain MWAA senior officials to circumvent MWAA's standard hiring 

process to place candidates they desired into new or existing positions, regardless 

of their qualifications or their ability to pass a background check. 

MWAA Did Not Follow Competitive Hiring Practices for Some Positions 

Under MW AA' s standard hiring process, applicants typically undergo a 

competitive interview process by a panel, which makes a recommendation to the 

hiring official based on the candidates' qualifications. However, in multiple 

instances, MW AA officials either circumvented or ignored the competitive 

interview process in order to place a candidate they preferred into a position. 

• For one job opening for a contracting specialist, MWAA held competitive 

interviews for the position, and the interview panel recommended a candidate 

who was deemed best qualified for the position. However, the Vice President 

53 This recommendation was made in an organizational study that was contracted by MW AA in September 20 I O. 
94 


Insert offset folio 59 here 76706.059

26 

of Business Administration disregarded the panel's recommendation and hired 

a different individual without a clear justification for the selection. 

Subsequently, the candidate who had been recommended by the interview 

panel filed a discrimination complaint, and MWAA hired an outside law firm 

to review the hiring process for the position. The outside firm's review 

substantiated the complaint, and, as a result, MW AA offered a settlement to 

the candidate, including moving the candidate into the position. 

• To fill a key management vacancy in Labor Relations, the Chief Operating 

Officer (COO) instructed the Vice President of Human Resources to convene a 

selection panel to review candidates qualified for the position. However, the 

position remained open for more than a year due to a series of internal disputes 

over the qualifications of the panel assembled by the Vice Presidcnt, his desire 

to hire a personally preferred candidate, and an Equal Employment 

Opportunity (EEO) complaint filed by a seemingly qualified candidate who 

was not offered an interview. A year later, the position was filled with an 

MW AA employee who proved not to have the experience needed for the 

position and was subsequently transferred elsewhere. Ultimately, the key 

position was filled by one of the original candidates-16 months after the 

position originally opened. 

• One exccutive assistant was promoted to a new position that had not been 

opened for internal or external competition. To fill thc now-vacated executive 

assistant position, MW AA did not follow a standard hiring process but rather 

promoted a candidate to the position who had not applied for the job. 

MWAA Disregarded Its Internal Procedures for Creating New Positions 

In at least two cases, senior executives created new positions designed with certain 

people in mind and did not follow standard processes to create and fill these 

positions. Typically, MWAA's process for creating a new position includes 

establishing a comprehensive job description and minimum and preferred 

qualifications for applicants, subjecting the position to a thorough review by 

MW AA' s compensation department (located within the Office of Human 

Resources), and then holding a fair and open recruitment to attract the best 

candidates. Yet, the MW AA CEO and COO created new positions without 

completing these steps. These decisions not only limited employment 

opportunities for potentially qualified candidates, but raised questions regarding 

the qualifications of the employees placed in these positions-as well as the 

necessity of the positions for MWAA's operations. For example: 

• The CEO created an advisory position for a former Board member without 

specifying what the job entailed or establishing market salary and benefits. In 

February 2012, the former Board member was hired by MWAA 1 day after 
95 


Insert offset folio 60 here 76706.060

27 

resigning from the Board. The compensation for this advisory posItIOn 

included a salary of $180,000. Subsequently, key MWAA stakeholders 

questioned thc appointment, and the former Board member was terminatedwith a year's severance pay. 

• At the request of a Board member, the COO directed the appointment of a 

specific individual into an entry-level position. The individual, who was an 

immediate family member of the Board member's close friend, was placed at 

one of the airport warehouses, which put this dcpartment into overstaffed status 

at the objection of its Vice President. Morcover, the individual was not given 

any clearly defined job duties. This position was originally labeled temporary, 

but it was not until almost 5 years later-when the position was converted to 

permanent status-that a job description with performance expectations was 

established. 

MWAA Used Its Student Program To Circumvent the Standard Hiring 

Process for Certain Employees 

MW AA officials, including the Vice President of Human Resources, intentionally 

allowed employees who were not students to be hired into and continue 

employment at MWAA via its student program. MWAA's student program is a 

partnership between the Authority and local high schools and universities that 

simultaneously provides valuable work experience to students and staffing 

assistance to MWAA. To participate in the program, a student must be enrolled in 

a high school or an accredited college or university, maintain at least a 2.3 grade 

point average, and be at least 17 years old. Howcver, the appointing official for 

four student employees acknowledged that they did not meet the basic requirement 

of being enrolled in a high school or an accredited college or university during 

their time in the program. 

According to the Vice President of Human Resources, hiring these employees into 

the student program was justified because they were needed to help manage the 

program itselt~ and due to limited funds in MWAA's regular budget, it was 

necessary to pay the employees from available student program funds. However, 

personnel documentation was prepared that falsely showed student status; 

compensated the employees using the student pay scale; ancI/or correlated "not to 

exceed" dates to the term limits imposed by the student program, which are based 

on school semesters. 54 The four temporary employees have received pay increases 

ranging from approximately 10 percent to 60 percent since their initial hire date at 

MW AA. In addition, the Vice President indicated that the arrangement was 

temporary, but one cmployee retained false student status for about 2 and a half 

years until being transferred out of the program. 

54 Student program tirneframes have limits on the number of hours workable during each tenn. 
96 


Insert offset folio 61 here 76706.061

28 

MWAA Hired Some Employees Without Completing Background Checks 

Under MWAA's standard hiring process, an applicant's appointment is contingent 

on his or her ability to pass a background check conducted by MW AA' s Office of 

Public Safety. These background checks provide an important internal control in 

MWAA's hiring process by verifying that candidates do not have undisclosed 

criminal records, significant flaws in their previous employment histories, any 

false statements or significant omissions, or other issues that might render them 

unsuitable for a position at MW AA. However, our review revealed a number of 

issues with MW AA' s background check process: 

• Disregarding Background Check Results. MW AA managers allowed some 

job candidates to begin work prior to the completion of their background 

checks. In one case, a candidate had been working at MW AA for 3 weeks 

when the Vice President of Public Safety recommended against hiring the 

candidate based on the results of the background check, which indicated that 

the candidate made false statements and had a poor credit history. In this case, 

the Vice President of Human Resources chose to ignore the recommendation 

and allowed the candidate to remain in the position. 

• Weak Oversight of Background Investigators. In one notable case, a 24-year 

veteran of MW AA who conducted background checks through the Office of 

Public Safety deliberately misrepresented that background checks of new 

employees were completed. Specifically, the investigator misused his authority 

to sign off on background checks without completing-or in some cases, 

initiating-background investigations and without the Vice Presidcnt of Public 

Safety's concurrence. 55 After discovering the investigator'S abuse-the full 

extent of which is unknown-the Office of Public Safety made immediate 

changes to its process, and stated that it plans to re-check all employees whose 

background checks were conducted under the responsibility of the negligent 

investigator. The investigator resigned in April 2012. 

• Poor Coordination To Ensure Completion of Background Checks. Because 

the Office of Public Safety does not have access to candidates' names and 

other hiring information, such as employment applications and other jobrelated data, it depends on the Office of Human Resources to provide the 

information needed to initiate a background check. However, both departments 

55 Prior to this discovery, investigators were given the authority to stamp the Vice President's signature on the 

mcmorandum provided to the Olftce of Human Resources to indicate that a candidate cleared his or herbaekground 

check. Under this practice, investigators were required to obtain the supervisor's concurrence with the results of their 

investigation prior to signing off on the document. 
97 


Insert offset folio 62 here 76706.062

29 

lack a formal process to ensure investigators receive information on all 

candidates. 56 

Background checks for temporary and student employees have been particularly 

problematic. Temporary employees generally did not undergo background checks, 

and in cases where background checks were requested by the Office of Human 

Resources the checks were not always completed. A background check of one 

temporary employee-who did not fully disclose prior criminal convictions on the 

employment application-was never completed; yet, the investigator cleared this 

employee for hire. The employee held a management position in the Office of 

Human Resources at MW AA for more than a year-with an annual salary of 

nearly $135,000 and access to sensitive and fersonal information-before being 

terminated. Two other contractor-provided 5 temporary employees with prior 

criminal charges (including charges of misdemeanor assault and drug possession 

with intent to distribute) worked at MWAA for at least a year. However, these 

employees did not receive a background check until they were transitioning into 

full-time permanent positions in MW AA, at which point they were subjected to 

MW AA' s standard background checks. The Vice Presidcnt of Public Safety 

eventually recommended against hiring them as permanent employees. 

Background checks on potential student employees were also limited. MWAA's 

student program has placed student employees in positions throughout the 

Authority that have allowed them access to security sensitive and personal 

information, including official personnel folders. Past student positions include 

finance clerk, maintenance trainee, budget clerk, procurement technician, clerk 

typist, and human resources assistant. Despite their access to scnsitive information 

and student program guidance stating that all program participants need to 

"successfully complete an in-depth background investigation," student employees' 

background reviews were essentially a credit history check. 

Throughout the course of our audit, we communicated issues we identified to 

MW AA. As a result of our observations, the Office of Public Safety has now 

begun to conduct background checks for students and plans to check certain 

contracted temporary employces, as well as screening for additional issues such as 

nepotism. 

56 The July 20 II organizational study also recommended that MWAA offices prepare service level agreements to 

increase teamwork initiatives between departments. 

57 This contractor was the same as the one referred to as Contractor A in the procurement section of this report (see 

lable 2). 
98 


Insert offset folio 63 here 76706.063

Senior MWAA Officials Authorized Excessive Salaries, Hiring 

Bonuses, Cash Awards, and Ineligible Benefits 

30 

MW AA management has also made questionable decisions regarding employee 

salaries, hiring bonuses, cash awards, and benefits, raising concerns that MW AA 

may be overcompensating unqualified employees. These decisions demonstrate a 

significant lack of oversight over employee compensation and have led to the 

appearance of a culture of favoritism at the Authority. 

MWAA Managers Overruled Pay Setting Reviews To Offer Higher Salaries 

to Some Employees 

MW AA senior officials disregarded or overruled internal controls to award higher 

salaries to certain employees. MW AA's compensation department conducts pay 

setting reviews for new and existing positions to ensure that compensation is in 

line with local market comparisons. This allows MW AA to remain competitive in 

recruiting and retaining employees while maintaining its financial efficiency. 

However, MW AA senior officials have circwnvented this fsrocess by hiring or 

promoting employees into positions with unclassified duties, 8 which bypasses the 

compensation department because there are no clearly specified job descriptions to 

review. In some cases, senior officials disregarded the compensation department's 

review and awarded higher salaries. For example: 

• One secretary was hired at a salary that was 20 percent higher than the newest 

employee in a similar position at the Authority and 36 percent higher than the 

secretary's previous earnings as a contract employee for MW AA. The Vice 

President of Human Resources stated that the increased salary was warranted 

due to the employee's education and prior experience qualifications, which 

were greater than required for the position. However, after reviewing the 

position, MW AA' s compensation department stated the salary was 

"unjustifiably inflated" and therefore could not be supported. Despite the 

compensation department's assessment, the Vice President awarded the 

employee the higher salary. 

• One senior official approved an employee's salary that was above the threshold 

that requires further approval by a higher-level official. However, the senior 

official never obtained the required signature for the employee's compensation, 

and there are no internal controls to ensure that this higher-level approval is 

received. Moreover, because human resources documentation listed the 

position as having unclassified duties, MWAA's compensation department did 

not perform a review. As a result, the employee remained in the position 

without any review to justify that the salary was appropriate. 

5& "Unclassified duties" is a category MW AA uses on oflicial personnel fonns when a person is hired without a job 

description or clearly defined duties and without an officially defined title and pay grade. 
99 


Insert offset folio 64 here 76706.064

31 

• One executive assistant in the Office of the Board of Directors, who had a prior 

employment relationship with a former Board member, was hired as a 

temporary employee with unclassified duties and then converted to a regular 

full-time MW AA position. This conversion included a two-step pay grade 

promotion amounting to a $15,000 raise (30 percent) after being employed for 

only 5 months. However, there was no documentation to justify the promotion 

and the salary level beyond a statement that the salary was set by the Board of 

Directors. 59 

Hiring and Other Bonuses Were Awarded Without Justification 

MW AA occasionally awards hiring bonuses to new employees for recruitment 

purposes for positions that are unique or difficult to fill. However, MW AA lacks a 

formal policy requiring appointing officials to justify why candidates should 

receive a bonus. In addition, there is no oversight to verify that new employees 

merit the bonus based on an urgent recruitment need. For example, one MW AA 

employee received a $10,000 pay increase and a $10,000 hiring bonus for moving 

into a new position at the Authority after working for MW AA for only 7 months. 

In another case, MW AA awarded a $5,000 hiring bonus for a position that had not 

been difficult to fill. 

MWAA managers and senior officials also did not adequately justify cash bonuses 

awarded to employees. MWAA's employee recognition program, "I Made a 

Difference," allows managers to reward employees for exceptional 

accomplishments or actions that contribute to the Authority's mission and 

initiatives. Ranging between $50 and $2,500 per award, the awards require the 

approval of a senior official, but there are no limits for the number of awards or a 

maximum dollar amount an employee can receive in a given period. One Human 

Resources manager received awards in 4 consecutive years, including two 

$2,500 awards within a 7-week period in December 2010 and January 2011, with 

little indication of meritorious achievements in the written justification for the 

awards. For example, the manager received a $2,500 award for "outstanding 

assistance" to external consultants hired by MW AA, but the justification for the 

award does not describe the specific actions and resulting impact that warrant the 

award. Another employee in a different department received $5,000 in multiple 

awards in less than 1 year (including three awards within 1 month totaling 

$3,000). While award programs can play an important role in recognizing 

accomplishments and retaining exceptional employees, misusing these awards can 

create a climate of favoritism that actually risks lowering employee morale. 

59 While the Board of Directors has the authority to approve managerial positions reporting directly to the President and 

CEO. this was an executive assistant position and therefore not subject to Board approval. 
100 


Insert offset folio 65 here 76706.065

MWAA Managers Authorized Employee Benefits That Violated Eligibility 

Requirements 

32 

Managers also abused MWAA's benefits program to award benefits to individuals 

who were not eligible. For example: 

• One Human Resources manager arranged for a former MW AA employee to 

continue to receive pay and leave benefits by delaying the former employee's 

employment separation paperwork and fraudulently submitting a time card that 

claimed sick leave for the employee. The fraud was uncovered by an 

employcc, and the manager was disciplined for time card fraud, which 

included a 3-day suspension. 

• Two MW AA employees-the Vice President of Audit and a Human Resources 

manager-inappropriately added ineligible individuals to their medical 

benefits. According to MW AA's medical benefits policy, employees must be a 

legal guardian of a dependent to include the dependcnt in their benefits. While 

the two employees claimed that they were the legal guardians of the 

individuals they claimed as dependents, this was not the case. Moreover, the 

Benefits and Retirement Manager approved the benefits without verifying the 

individuals' eligibility. 

Senior Officials Made Questionable Hiring and Compensation 

Decisions for the Same Employees 

Overall, senior officials made many of the questionable hiring and compensation 

decisions for the same employees. We identified 21 employees who were hired 

with multiple hiring and compensation deficiencies, including 2 who were hired 

with all 5 deficiencies (sce table 4). 

Ultimately, these cases of multiple deficiencies involving specific employees 

suggests favoritism, a lack of accountability, and serious oversight lapses within 

MWAA's overall hiring and compensation practices. 
101 


Insert offset folio 66 here 76706.066

Table 4. Hiring and Compensation Deficiencies for Selected 

Employees 

Employee Temporary Related to Questionable Incomplete or Questionable 

33 

Employee Another Hiring or Questionable Compensation 

Status Employee or Promotion Background andBenefds 

Board Member Check 

1 X X 

2 X X X 

3 X X X X 

4 X --_.- .-.----~--- -_ .. _--_ .. __ .. _-_. -

5 X X X X 

6 X X X X 

7 X X X X X 

8 X X X 

9 X X X X 

10 X X X X 

11 X X X X 

12 X X X X 

13 X X X X 

14 X X X X 

15 X X X 

16 X 

17 X X X 

18 X X X 

19 X X X 

20 X X X X 

21 X X X X X 

Source: OIG analysis, ba~ed on a judgmental sample of 21 out of 34 employees provided through 

interviews. 

MWAA'S POLICIES AND PROCESSES DID NOT ENSURE 

ACCOUNT ABILITY AND TRANSPARENCY FOR ITS BOARD OF 

DIRECTORS 

Weak ethics and travel policies, a lack of oversight, and significant gaps in 

transparency have greatly diminished the Board's accountability. Since the start of 

our audit and continuing after the release of our May 15, 2012, interim letter, 

MWAA's Board has taken steps to improve its accountability and transparency, 

such as revising its travel policy and providing more information about its 

meetings and decisions online. However, some issues remain to be addressed, such 

as regulating Board spending on its guests during business meetings and meals. 
102 


Insert offset folio 67 here 76706.067

Board Policies Have Not Been Sufficient To Prevent Potential 

Conflicts of Interest, but Effectively Implementing New Policies May 

Prevent Future Unethical Behavior 

34 

Because MWAA's Board members are not bound to Federal, State, or local ethics 

and financial disclosure laws,60 the Board must rely on the strength of its internal 

policies and processes to ensurc Board integrity. However, MWAA's Code of 

Ethical Responsibilities for its Board members-which is separate from that for 

MW AA employees-has lacked the rigor needed to identify and evaluate potential 

conflicts of interest and ensure Board decisions are objective. A lack of oversight 

has further undermined efforts to promote ethical conduct. Following the 

publication of our interim letter, the Board Chairman stated that revisions to 

MWAA's Board's ethics policy will be made to address our ongoing concerns. 

MW AA recently approved a new code of ethics for its Board, which will be 

effective December 1, 2012. While these revisions are an important step to 

improve the Board's accountability, effective implementation and oversight will 

be critical to ensuring ethical behavior among Board members. 

At the time of our audit, MWAA's financial disclosure process for its Board of 

Directors only required Board members to identify the employers of their 

immediate family members and to disclose their financial interests in entities that 

are either currently involved with or seeking a contract with the Authority. 61 In 

addition, MW AA's policies have been vague regarding when and how Board 

members must recuse themselves from proceedings due to a conflict of interest. 

MW AA has also lacked guidelines to screen a Board member from involvement in 

any matter from which the Board member is recused. In contrast, Federal 

employees who are subject to disclosure requirements reveal all financial interests 

and other affiliations, with some exceptions,62 as well as liabilities, gifts, 

arrangements and agreements for employmcnt, outside positions, stock holdings 

(above a low threshold), and travel reimbursements. Federal ethics officials use 

this information to identify potential conflicts and advise employees on how to 

avoid potential conflicts. Further, Federal ethics guidelines recommend a system 

that implements screening practices to ensure that employees comply with their 

recusal obligations. An effective system actively screens for matters that may 

relate to a Board member's interests and refers any potential matters to the 

appropriate parties to ensure that they are addressed. MW AA' s financial 

disclosure system fails to include such proactive steps. 

60 Although Board members may file a Federal or State disclosure file as part of the appointment process. MW AA does 

not review them or use them as part of its ethics program. 

61 MW AA provides Board members with a list of these entities, and Board members are required to report any interests 

they may have with the listed entities. 

62 Exceptions include those interests that fall within well-defined categories that have been found unlikely to create a 

conflict of interest (for example. ownership of a diversi fled mutual fund). 
103 


Insert offset folio 68 here 76706.068

35 

As with MW AA employees, MW AA encourages Board members to seek counsel 

if they believe a potential conflict of interest exists. However, MW AA has not 

provided the oversight needed to ensure Board members understand the 

importance of and comply with its ethical standards. Further, MW AA did not 

provide formalized training on ethics or on the financial disclosure process to 

Board members. Although Board members are ultimately responsible for 

identifYing and disclosing any potential conflicts of interest, oversight and rcgular 

ethics training can play a critical role in reinforcing ethical guidelines and 

emphasizing steps Board members should take to avoid potential conflicts of 

interest. 63 

Perceived conflicts of interest with Board members have already damagcd 

MWAA's credibility. For cxample, one Board member's recommendation led 

MW AA to initiate a $100,000 contract with a law firm that employed the 

member's spouse--creating at least the appearance of a conflict of interest. 

Although MWAA's policy states Board members may not participate in any 

Board decision or Authority action when a conflict of interest or the appearance of 

one arises, MW AA awarded the contract to the Board member's recommended 

firm. 

MWAA's code of ethics for its Board contained other weaknesses. Notably, at the 

time of our audit, it did not include a provision against nepotism as its code for 

employees does. An ethics policy that clearly delineates the types of relationships 

that are and are not acceptable between Board members and hired MW AA 

employees is key to ensuring relatives and friends of Board members do not 

receive preferential treatment. For example, MWAA hired the grandchildren of 

two Board members. In particular, one Board member had at least two 

grandchildren working at MW AA. The same Board member also insisted that 

MWAA hire an immediate family member of his close friend. MWAA's recently 

revised Board code of ethics contains a new provision preventing this type of 

influence. 

MWAA Recently Revised Its Travel Policies To Help Ensure Board 

Travel Expenses Are Reasonable 

When we began our review, MW AA's policies for Board travel lacked clarity and 

oversight in key areas, including spending thresholds for meals and travel class. In 

addition, there was little to no oversight of travel expenses, even those that the 

Board Chair was supposed to approve under MW AA's policy. These weaknesses 

created the risk that Board travel expenditures could be perceived as excessive by 

stakeholders and the public. We identified several costly meals and expensive 

plane tickets that MW AA reimbursed, including $238 for two bottles of wine 

63 When the new Board ethics code is implemented, effective December 1,2012, it will require both initial and 

recurrent ethics training for Board members. 
104 


Insert offset folio 69 here 76706.069

36 

purchased during a meal and $9,200 for an international business-class air ticket to 

Europe purchased only 10 days prior to the trip. 64 

Since we issued our interim letter, MW AA has taken actions to address 

weaknesses in its Board travel policies. Most significantly, on September 5, 2012, 

the Board voted to revise its policies with new provisions that notably strengthen 

MWAA's guidelines and internal controls for travel and meal expenses. In 

particular, the Board voted to consolidate both the Board travel and MW AA 

employee travel policies-which were previously separate documents-into one 

overarching MW AA travel policy. Other improvements to the policy include 

requiring a preauthorization form to be completed and approved prior to travel in 

order for expenses to be reimbursed,65 prohibiting alcoholic beverages from 

reimbursement, more clearly specifying and limiting when travelers may travel 

any class other than economy class, establishing a fixed per diem rate for meals 

and incidentals during travel, and requiring an annual review of all travel expenses 

by the Office of Audit. 

These additions and revisions-if effectively implemented-will go far in 

enhancing the Board's accountability for its travel expenses. However, some gray 

areas remain. For example, while the new policies "encourage" travelers to find 

"reasonable rates" for hotel rooms, they do not clearly specify or define what 

makes a hotel rate "reasonable" or require Board members to comply with the 

reasonable rate. As a result, this particular provision may be difficult to enforce 

and audit. 

In addition, MWAA's current policy does not address instances where Board 

members may need to entertain business associates to conduct or advance 

MWAA's business relationships-such as by clearly defining and placing 

spending thresholds on when meals for MW AA guests are reimbursable. Given 

that Board entertainment expenses were some of the most exorbitant reimbursed 

travel vouchers in the sample we reviewed, some further delineation for the 

approval of these expenses will be critical to help ensure that all costs reimbursed 

are necessary and in the best interests of the Authority. 

MWAA Recently Enhanced Its Board's Transparency, but Some Key 

Proposed Changes Have Yet To Be Implemented 

Early in our review, we also identified opportunities for MW AA to enhance the 

transparency of Board decisions, activities, and proccsses. Transparency is critical 

for cnsuring accountability and for keeping the public, Congress, and other 

stakeholders informed of major decisions that impact residents of the Washington, 

64 For more details on these and other expenses, see our interim letter, available on our Web site at wmv.oig.dot.gov. 

65 The Board Office (which includes Board members, the Vice President and Secretary, and Board staft) are not subject 

to this preauthorization requirement lor travel to Board and Committee meetings and any function. meeting. or event 

other than conferences for which the invitation has been extended to all Directors Or Directors on the same Committee. 
105 


Insert offset folio 70 here 76706.070

37 

DC, metropolitan region. Largely as a result of our discussions with MWAA as 

well as our interim letter, MW AA has implemented or begun implementing 

several actions to improve its Board's transparency. These include the following: 

• Freedom of Information Policy. In February 2012, the Board revised its 

bylaws to require that meeting announcements, agendas, minutes, and other 

key information be posted to MWAA's Web site. In July 2012, MW AA 

revised its internal Freedom of Information Policy, clarifying what information 

is not available for public release and requiring more public information to be 

posted online. However, one weakness in the policy is the absence of recourse 

for individuals who are denied access to information beyond an internal appeal 

process. In contrast, Federal law allows for an external judicial review in cases 

where a requester is denied information. 

• Opening audit committee meetings to the public. Unlike othcr similar 

transportation boards,66 MW AA has held its audit committee mcctings in 

closed scssion-an especially significant gap in transparency considering the 

nature ofthe committee, which discusses issues related to policy and oversight. 

As we reported in our interim letter, this practice denied the public and 

stakeholders, such as airlines, the opportunity to learn of MW AA' s internal 

audit findings and recommendations. Since the publication of our letter, 

MW AA' s Board Chair has stated that he intends to allow for the audit 

committee to meet in regular open session when appropriate. In June 2012, 

MWAA held a portion of its audit committee meeting in open session for the 

first time. However, subsequent meetings have not been held in open session, 

and the Board has yet to revise its bylaws with this change, nor has it 

adequately defined what topics are appropriate for open session. 

Limiting use of executive sessions. MWAA's Board Chair has also pledged to 

limit the number of executive sessions used by the Board. Like other public 

entities, MWAA's Board holds a portion of its discussions behind closed doors 

in executive session to allow for confidential discussion of matters such as 

personnel changes or ongoing litigation. Although these sessions are a 

necessary and common part of doing business, their excessive use could 

obscure vital information and processes from the public. The risk of 

inappropriate executive sessions is heightened by the fact that MW AA is not 

&6 For example, as part of our review, we visited the Port Authority of New York and Ncw Jersey and Dallas-Fort 

Worth International Airport to gain an understanding of their Boards' functions and activities, with a focus on 

accountability and transparency practices. We chose these entities based on their many similarities to MW AA. such as 

size and makeup of huard. 
106 


Insert offset folio 71 here 76706.071

38 

subject to Federal or State guidelines or potential penalties for any abuse of 

these sessions, unlike othcr major transportation boards. 67 

CONCLUSION 

As an independent public body subjcct to few Federal and State laws, MW AA 

must rely on the strength of its policies and processes to ensure credibility in its 

management of two of the Nation's largest airports and a multibillion-dollar public 

transit construction project. However, MW AA's ambiguous policies and 

ineffectual controls have put these assets and millions of Federal dollars at 

significant risk of fraud, waste, and abuse and have helped create a culture that 

prioritizes personal agendas over the best interests of the Authority. While 

MW AA is taking positive steps to correct the deficiencies we identifiedincluding revising its travel policies and suspending contracts with former Board 

members-significant weaknesses remain that leave the Authority vulnerable to 

criticism for its contracting practices and governance. Enhanced policies, strong 

internal controls, and robust oversight in the areas of hiring and compensation, 

ethics, transparency, and procurement will be critical to maintaining and 

improving the Authority's operations and restoring public trust in the soundness of 

its current and future activities. 

RECOMMENDATIONS 

We recommend that the Office of the Secretary direct MW AA to take thc 

following actions to promote integrity and accountability in the Authority's 

management and governance. We also recommend that the Office of the Secretary 

consider devising and adopting enforcement mechanisms to ensure that these 

actions are followed. 

1. Provide quarterly acquisition reports to the Board of Directors and to DOT. 

These reports should include the following: (a) contracts awarded, dollar value, 

and the extent of competition; (b) name of contracting officer or delegated 

official who entered into the contract; (c) contract modifications and task 

orders issued, including dollar value; (d) contract actions approved by the 

Board during the quarter; (e) planned procurements for the next quarter; and (f) 

employees with contracting warrants and delegations and any limits to their 

authorities. 

67 In contrast, similar entities, such as the Board of Directors ofthe Dallas-Fort Worth International Airport, must 

follow Texas State law and guidelines related to ethics. transparency, and procurement, and willful failure to comply 

can be punishable by imprisonment and fines. For example. a willful violation of the Texas open meetings law is a 

misdemeanor punishable by up to 6 months in prison and a fine of up to $500. Under Virginia law, which MWAA is 

not subject to, a willful violation of the open meetings law is a $500 to $2,000 civil penalty for a first offense and 

$2,000 to $5,000 for a second and any subsequent offense. 
107 


Insert offset folio 72 here 76706.072

39 

2. Implement a plan with milestones to revise contracting policies and procedurcs 

to reflect Federal and other best practices, including the following: 

a. Publicly announce intent to award sole source contracts. 

b. Minimize categorical exceptions to full and open compctition and explicitly 

state the conditions under which an exception can be used. 

c. Limit the involvement of the Board of Directors and individual Board 

members in contracting and prohibit their ability to bypass contracting 

officers. 

d. Ensure fair opportunity in the awarding of task orders under multiple-award 

contracts and ensure contracting officers adequately justify their selections 

of contractors. 

e. Limit and monitor delegations of procurement authority. 

f. Require program offices to prepare annual forecasts of their acquisition 

needs. 

3. Clarify and enforce its current contracting policies and procedures, including 

the following: 

a. Obtain Board approval for sole source awards over $200,000 and all 

contracts other than fully competed construction contracts over $3,000,000. 

b. Ensure justifications for the use of categorical exceptions are adequate per 

MW AA' s Contracting Manual. 

c. Ensure justifications for the usc of task ordcrs over $200,000 are adequate 

per MW AA's Contracting Manual. 

d. Prohibit adding out-of-scope work to contracts and authorizing work prior 

to contract award. 

e. Ensure technical evaluation committees do not includc both supervisors and 

a subordinate as voting members when possible. 

4. Define and assess the size and skills of the acquisition workforce and 

implement an appropriate acquisition certification program, including 

acquisition and cthics training. 

5. Establish policies and procedures for procurement integrity, including the 

following: 

a. Safeguard non-public and sensitive procurcment information. 

b. Restrict prior Board members' and employees' eligibility for MWAA 

contracts and prohibit them from receiving compensation from contractors 

who were awarded contracts, modifications, or task orders of significant 
108 


Insert offset folio 73 here 76706.073

40 

value after serving as a contracting officer, program manager, or other 

related positions. 

6. Fully implement formal ethics policies and procedures for Board members and 

MWAA employees to ensure the following: 

a. Nepotism is detected and prevented. 

b. Board members and employees disclose debts, obligations, and holdingsregardless of whether the interests currently conduct or are seeking to do 

business with MW AA-and gifts on their financial interest forms. 

c. All contracting officers and COTRs certify that they do not have financial 

interests in the contracts they award or administer. 

7. Ensure that the review process for financial interest forms emphasizes 

verification and documentation of the following: 

a. All Board members and employees completed and submitted required 

financial interest forms. 

b. Any Board members and employees who have a conflict of interest or 

potential conflict of interest are counseled. 

8. Fully implement a formal, robust ethics training program that ensures the 

following: 

a. All employees receive initial training. 

b. Recurrent training is based on employees' level of responsibility. 

c. MW AA employees involved in contracting receive training in procurement 

integrity procedures. 

9. Establish priorities for implementing the new Board and MWAA employee 

ethics codes, including developing procedures to oversee and enforce the new 

codes. Develop and implement a process to measure the effectiveness of the 

codes and the oversight and enforcement procedures, and revise or update as 

necessary. 

10. Implement and enforce human resources policies and practices, including the 

following: 

a. Implement a competitive hiring and compensation policy and process that 

competes positions, whether newly created positions, vacancies, or 

promotions. All positions should be based on a specific job description with 

a set salary range. 

b. Verify that candidates and current employees meet and maintain program 

eligibility requirements for the student employment program. 
109 


Insert offset folio 74 here 76706.074

41 

c. Complete background checks on all new employees prior to their start date 

through a formal communication and coordination process between the 

Offices of Human Resources and Public Safety. 

d. Establish a list of acceptable justifications to override a no-hire 

recommendation from the Office of Public Safety_ 

e. Establish a policy to administcr and oversee hiring bonuses and cash 

awards, including more stringent requirements for justifying and approving 

awards an employee can earn in a certain period of time. 

f. Verify eligibility prior to authorizing and continuing pay and/or benefits. 

11. Revise its travel policy to further define what constitutes a "reasonable lodging 

cxpense" for Authority-related travel and to require that travelers do not 

exceed the defined amount. 

12. Further enhance the accountability and transparency of the Board of Directors, 

including the following: 

a. Further revise the Board's bylaws to incorporate what actions the audit 

committee may take in closed session. 

b. Develop a Board-specific policy that establishes guidelines for entertaining 

business contacts, including spending thresholds and reimbursement 

prohibitions for items such as meals, alcohol, and entertainment. 

c. Includc a mechanism for external review in the Freedom of Information 

Policy when a requester is denied information. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

We provided OST with our draft report on October 3, 2012, and received its 

formal written comments on October 18,2012. OST's response is included in its 

entirety as an appendix to this report. In its response, OST stated that the 

Department will formally transmit the final report to MW AA with a clear 

expectation that the Authority produce a detailed response within 30 days 

addressing each of our recommendations and specific sub elements. 

OST emphasized that the Department is exercising the full extent of its authority 

to help MW AA address the serious problems raised in our report. According to 

OST, the Department has been working with MW AA over the last several months 

to ensure that it swiftly adopts needed reforms. In particular, the Department 

appointed an Accountability Officer to provide guidance to MW AA as it rewrites 

its policies and procedures. 
110 


Insert offset folio 75 here 76706.075

42 

As we recognize in our report, MW AA has already taken several actions to begin 

addressing issues raised in our audit. OST also stated that the Federal 

Accountability Officer has worked with MW AA to take further actions to address 

some of the issues in our report, such as initiating action to revise the contracting 

manual and delegations of authority, and planning revisions to Human Resources 

policies. In addition, OST stated that, looking ahead, MW AA is taking action to: 

• Plan 35 ethics training sessions on the newly adopted policies for all MWAA 

staff, as well as one session for Board members and Board Office staff, to be 

completed between October 25 and November 23,2012. Annual ethics training 

will now also be required for all MW AA personnel. 

• Establish a database of contractors, potential contractors, and othcr potential 

prohibited sources with which to compare to financial diselosurc forms and 

conflict of interest analyses. 

• Initiate development of standard operating procedures and forms relating to 

ethics and travel, so that the new policies can be successfully implemented. 

• Establish an internal control group to track all internal and external audits that 

would identify open issues and track issue and recommendation resolution. 

The group will also track and test all systems and policy implementation. 

We acknowledge that these planned actions may improve MW AA's contracting, 

ethics, and transparency. However, since these actions have not yet been 

implemented, we have not had the opportunity to assess MW AA' s execution of 

them. Additionally, while MW AA' s planned actions represent positive steps, our 

audit report identifies 12 recommendations and 30 specific sub-recommendations 

that remain open and unresolved, pending MWAA's detailed response to the 

Department. 

We also recommended that OST consider devising and adopting enforcement 

mechanisms to ensure that our recommended actions are followed. In its response, 

OST indicated that the Department will continue to hold MWAA accountable and 

is pursuing an amendment to its lease with MW AA to ensure greater oversight and 

enforcement. Ultimately, vigilant oversight is needed to ensure that MWAA 

institutes the reforms necessary to regain the public trust. 

ACTIONS REQUIRED 

In accordance with Department of Transportation Order 8000.1 C, we request that 

you provide a response within 30 days to this report that indicates how MW AA 

will resolve the recommendations in this report. 

We appreciate the courtesies and cooperation of the Metropolitan Washington 

Airports Authority and Department of Transportation representatives during this 
111 


Insert offset folio 76 here 76706.076

43 

audit. Please feel free to contact me at (202) 366-1959 or my Deputy, Ann 

Calvaresi Barr, at (202) 366-6767 if we can be offurther assistance. 

If you have overall questions concerning this report, please contact Lou E. Dixon, 

Principal Assistant Inspector General for Auditing and Evaluation, at (202) 366-

1427. For specific questions on contracting, please contact Mary Kay LanganFeirson, Assistant Inspector General for Acquisition and Procurement Audits, at 

(202) 366-5225. For specific questions on governance and accountability, please 

contact Jeffrey B. Guzzetti, Assistant Inspector General for Aviation and Special 

Program Audits, at (202) 366-0500. 

cc: General Counsel Robert Rivkin 

Chief of Staff Joan DeBoer 

DOT Audit Liaison 

# 
112 


Insert offset folio 77 here 76706.077

44 

EXHIBIT A. SCOPE AND METHODOLOGY 

We conducted this perfonnance audit from June 2011 through October 2012 in 

accordance with generally accepted Government auditing standards. Those 

standards require that we plan and perfonn the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based on our audit 

objectives. The objectives of our audit were to detennine whether (1) the policies 

and processes under which MW AA operates comply with the tenns of the law and 

lease between DOT and MW AA, and (2) MW AA's policies and processes are 

sufficient to ensure accountability and transparency of its Board's activities. 

Specifically, we assessed (1) MWAA's contract award and procurement practices, 

including compliance with relevant laws; (2) its code of ethics for its employees; 

(3) its hiring and compensation practices; and (4) the accountability and 

transparency of its Board of Director activities. 

We reviewed the Metropolitan Washington Airports Act of 1986, which created 

MWAA; the lease of 1987, as amended, between MWAA and the U.S. 

Department of Transportation through the Secretary (OST); and the District of 

Columbia and Virginia Commonwealth statutes covering MW AA. To test 

MWAA's compliance with the lease's payment requirement, we selected a 

statistical sample of 10 of 48 semiannual MWAA lease payments to the Federal 

Aviation Administration (FAA) from December 1987 to June 2011. 

To gain an understanding of how MW AA operates, we met with the CEO, COO, 

Chief Financial Officer, managers of both Dulles International and Ronald Reagan 

Washington National Airports, all MWAA Vice Presidents, the Office of Business 

Administration, the Office of Human Resources, and the Office of Public Safety. 

We also reviewed internal audit reports prepared from November 2007 through 

June 2011. Further, to understand OST's role at MW AA, we also met with OST's 

liaison to MW AA and its recently appointed Accountability Officer. 

To assess MWAA's contract award and procurements practices, we interviewed a 

range of MW AA staff, including contracting officers, COTRs, legal staff, and 

MWAA management. We reviewed MWAA's Contracting Manual, the Airports 

Purchasing Policies and Procedures Manual, prior GAO reports, MW AA's 

internal audit reports, MW AA' s procurement staff training documents and 

financial interest fonns, and other MW AA documents. We also reviewed Federal 

policies, such as the FAR, and State and local contracting policies for best 

practices. 

In addition, we reviewed a total of 125 MW AA contracts. To select the contracts 

for review, we obtained contracting data from MWAA's Procurement and 

Exhibit A. Scope and Methodology 
113 


Insert offset folio 78 here 76706.078

45 

Contracts Department for (1) contracts awarded between January 2009 and June 

2011 and (2) all active contracts as of June 2011. We then selected two statistical 

samples and 69 contracts based on risk. Figure 3 details our contract selections. 

Further, we reviewed a nonrepresentative sample of contract modifications and 

task orders from sample 2, and reviewed MW AA' s contract files to assess whether 

the contract award and administration practices complied with the Airports Act, 

the lease, and MW AA' s Contracting ManuaL 

Figure 3. Sample Selection of MWAA Contracts 

Sample 1 (statistically selected, basis of a projection) 

Number of Value of Range of Fiscal Number of Value of Range of Contract 

Contracts In Contracts in Years of Contracts Contracts Contracts Award Years of 

Universe Universe In Universe Reviewed Reviewed Contracts Reviewed 

165 $519 million 2009-2011 32 $251 million 2009-2011 

Sample 2 (statistically selected, basis of a projection) 

Number of Value of Range of Fiscal Number of Value of Range of Contract 

Contracts In Contracts in Years of Contracts Contracts Contracts Award Years of 

Universe Universe In Universe Reviewed Reviewed Contracts Reviewed 

343 $2.8 billion 1987-2011 24 $2.2 billion 1989-2009 

Sample 3 (selected based on risk, results cannot be generalized) 

Number of Value of Range of Fiscal Number of Valueaf Range of Contract 

Contracts In Contracts in Years of Contracts Contracts Contracts Award Years of 

Universe Universe In Universe Reviewed Reviewed Contracts Reviewed 

No universe because contracts were selected based on 69 $52 million 2006-2011 risk 

To assess the effectiveness of MWAA's employee code of ethics for preventing 

conflicts of interest, we met with personnel from the Office of General Counsel 

and interviewed employees, and reviewed the Code of Ethics for MWAA 

Employees, dated May 2004, revised November 2009, and most recently approved 

on September 19,2012 and effective January 1,2013. Also, we reviewed all 125 

certificates of financial interest filed by 50 employees in 2009, 2010, and 2011. 

Forty-nine employees were statistically selected from a universe of 129, and 1 was 

received from employee interviews. 

To evaluate MWAA's hiring and compensation practices we interviewed 

personnel from the Office of Human Resources and the Office of Public Safety; as 

well as, employees from various other departments. We obtained 34 official 

personnel rccords of employees whose names were either provided through 

employee interviews or that we identified in the course of our review as having 

irregularities during the hiring or compensation process. We reviewed 23 files 

from the Office of Public Safety pertaining to background checks. In addition, we 

reviewed MW AA Directives. We also reviewed MW AA job classification reports 

Exhibit A. Scope and Methodology 
114 


Insert offset folio 79 here 76706.079

46 

and pay scales from 2006 to 2012; and analyzed employee complaints from 2009 

through 20 II, legal reviews, internal investigations, and portions of various 

organizational studies. 

To evaluate the accountability and transparency of Board of Director activities, we 

interviewed current and past Board Directors and the Board Secretary; attended all 

MWAA Board monthly and nine Committee meetings from September 2011 

through July 2012, with the exception of November 2011; and reviewed Board 

meetings minutes from December 2008 through March 21,2012. We also assessed 

MWAA's Board bylaws as amended April 20, 2011, and later revised February 

15, 2012; the "Code of Ethical Responsibilities for Members of the Board of 

Directors" as amended December 3,2003; the "Code of Ethics for Members of the 

Board of Directors" as approved September 19,2012, and effective December 1, 

2012; the "Travel and Business Expense Guidelines for Board of Directors" as 

approved in 2008 and a related May 7, 2008, memorandum; and the revised 

"MWAA Travel Policy" as approved and effective September 5, 2012. In addition, 

we reviewed a statistical sample of 44 of 144 Board of Directors' travel vouchers 

for expenses incurred January 2010 through March 20ll; and all Statements of 

Employment and Financial Interests filed by the Board of Directors for January 

2008 through January 2011. We also reviewed MWAA's Web site to determine 

what information was available to the public. To obtain comparisons for 

transparency and accountability, we visited the Port Authority of New York and 

New Jersey and the Dallas-Fort Worth International Airport, attended their Board 

meetings, interviewed Board members and staff, and reviewed their respective 

Web sites. 

Exhibit A. Scope and Methodology 
115 


Insert offset folio 80 here 76706.080

EXHIBIT B. ORGANIZATIONS VISITED OR CONTACTED 

MWAA Board 

• MW AA Board of Directors 

• Board Counsel 

• Secretary to the Board of Directors 

MW AA Officers, Offices, and Airports 

• President and Chief Executive Officer 

• Executive Vice President and Chief Operating Officer 

• Office of Air Service Planning and Development 

• Office of Audit 

• Office of Business Administration 

• Office of Engineering 

• Office of Finance 

• Office of General Counsel 

• Office of Human Resources 

• Oflice ofInformation and Telecommunications Systems 

• Office of Public Safety 

• Ronald Reagan Washington National Airport 

• Washington Dulles International Airport 

Other Stakeholders 

• Airports Council International-North America 

• Federal Aviation Administration 

• Federal Transit Administration 

• Office ofthe Secretary of Transportation 

• U.S. Government Accountability Office 

• Virginia Department of Transportation 

Comparable Organizations to MWAA 

• Port Authority of New York and New Jersey 

• Dallas-Fort Worth International Airport Board 

Exhibit B. Organizations Visited or Contacted 

47 
116 


Insert offset folio 81 here 76706.081

APPENDIX. OST COMMENTS 

THE DEPUTY SECRETARY OF TRANSPORTATION 

WASHINGTON, D,C. 20590 

0C~ Ifl 2012 

MEMORANDUM TO: Calvin L. Scovel III 

Inspector General J1 

FROM: 

SUBJECT: 

John D. porca~ Deputy Secre1lJjv 

V 

Office oflnspector General Draft Report on Metropolitan 

Washington Airport Authority Managemcnt Accountability 

48 

We have reviewed the Office ofInspector General (OIG) draft report, completed in response to a 

Congressional request from Representatives Wolf and Latham, and remain deeply concerned and 

frustrated by the nature and extent of the deficiencies uncovered by your office. The OIG draft 

report identifies a wide range of problems relating to how the Metropolitan Washington Airport 

Authority (MWAA) hires and trains it staff, obtains goods and services, and conducts 

business, We are troubled by the report's description of an organization that routinely failed to 

adopt and adhere to strong policies and procedures for its officials and staff This failure resulted 

in numerous ethical and fiscal lapses, including the frequent award of contracts without free and 

open competition, cases of nepotism, and instances where employees accepted favors and gifts in 

the ordinary course of business. This pattern of conduct is simply unacceptable for a public body 

entrusted with the management and operation of important Federal assets. This way of doing 

business cannot continue. 

The Department of Transportation is exercising the fill! extent of its authority to help lvIW AA 

address the serious problems raised in the report. In particular, the Secretary, along with the 

Governors of Virginia and Maryland, and the Mayor of the District of Columbia, sent a letter to 

lvIW AA demanding that it overhaul its policies and procedures, bringing them in line with best 

Federal practiees, Over the last several months, the Department has been working with lvIWAA 

to ensure that it swiftly adopts the type of top-to-bottom reforms that are essential for restoring 

the public trust. 

The Department has taken the extraordinary measure of appointing a Federal Accountability 

Officer to provide guidance to MWAA as it rewrites its policies and procedures. Since late July, 

the Federal Accountability Officer has made considerable progress in working with lvIW AA to 

address the issues identified in your interim report and the letter to lv1W AA signed by the 

Secretary. To date, the Federal Accountability Officer has worked with MWAA to: 

Appendix. OST Comments 
117 


Insert offset folio 82 here 76706.082

49 

Issue a new travel policy, consistent with Federal law and regulation, for both the 

MWAA board and MWAA's employees that included a cap on daily expenditures, 

requirement for prior travel approval, allowable classes of expenditures, and prohibition 

on reimbursement for alcohol; 

• Issue a new ethics policy, consistent with Federal law and regulation, for both the 

MWAA Board and MW AA's employees that addressed ethics training, financial 

disclosure, gifts, nepotism, conflicts of interest, enforcement, and established the role of 

an Authority-wide Ethics Officer; 

Terminate sole source contracts with former Board members; 

Initiate action to revise the contracting manual and delegations of authority; and 

• Plan revisions to HR policies and the MW AA bylaws to enhance transparency. 

MWAA has already taken action to address some of the issues in the report, including the 

termination of employees who had accepted favors and the elimination of certain categorical 

exceptions that may have contributed to sole-source contracting for professional services. It 

would be constructive for the OIG final report to ensure that it presents a full accounting of 

actions MW AA has taken to date. Looking ahead, MW AA is taking action (0: 

Plan 35 ethics training sessions on the newly adopted policies for al! MWAA statT and 

one session for Board members and Board Oftice staff to be completed between October 

25 and November 23,2012. Annual ethics training will now also be required for all 

MW AA personnel. 

• Establish a database of contractors, potential contractors and other potential prohibited 

sources to compare to financial disclosure forms and conflict of interest analyses. 

Initiate development of standard operating procedures and forms relating to ethics and 

travel so that the new policies can be successfully implemented. 

Establish an internal control group to track all internal and external audits that would 

identify open issues and track issue and recommendation resolution. The group will also 

track and test all systems and policy implementation. 

These actions are intended to ensure that MWAA has a complete set of policies and procedures 

that meet the highest standards of public accountability. We are pleased with the level of 

cooperation that the Federal Accountability Officer has received over the last few months ITom 

the MW AA Board and Executive leadership and look forward to continued cooperation, and I 

would ask that the final report include these important refomls. 

Appendix. OST Comments 
118 


Insert offset folio 83 here 76706.083

As this work continues, it is vitally important that strong oversight and internal controls are 

established to ensure MW AA adheres to its new policies. To ensure greater oversight and 

enforcement, the Department is pursuing an amendment to the current lease with MW AA. 

As established by statute, MWAA is a public entity with considerable autonomy. While the 

Department will continue to hold MW AA accountable in its management and operation of 

vitally important Federal assets, it is primarily incumbent on MW AA to institute the reforms 

needed to regain the public's trust. 

Upon issuance of the orG final report, the Department will formally transmit the document 

along with a clear expectation that MW AA produce a detailed response within 30 days that 

addresses each of the orG report's 12 recommendations including and all 31 specific sub 

elements. 

We appreciate the extensive and detailed work by the orG on this matter. 

Appendix. CST Comments 

50 
119 


Insert offset folio 84 here 76706.084

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY 

+ Board of DirectoR 

Michael A Curto x 

Chairman 

Honorable Thomas M, Davis III 0 

Vice Chairman 

Earl Adams, Jr: x 

Richard S. Carter )( 

Lynn Chapman 0 

Frank M. Conner III <> 

Honorable H.R. Crawford t 

Shirley Robinson Hall + 

Barbara Lang + 

Elaine McConnel! <> 

Caren Merrick <> 

Michael l. O'Reilly <> 

Warner H. Session + 

Todd A Stottlemyer <> 

Appointee of: 

.. United States 

~ District of Columbia 

Maryland 

Virginia 

November 14,2012 

The Honorable Ray LaHood 

Office of the Secretary 

U.S. Department of Transportation 

1200 New Jersey Avenue, SE 

Washington, DC 20590 

The Honorable Robert F McDonnell 

Office of the Governor 

Patrick Henry Building, 3,d Floor 

111 East Broad Street 

Richmond, VA 23219 

The Honorable Vincent C. Gray 

Executive Office of the Mayor 

1350 Pennsylvania Avenue, NW 

Washington, DC 20004 

The Honorable Martin O'Malley 

Office ofthe Governor 

100 State Circle 

Annapolis, MD 21401 

Dear Secretary LaHood, Mayor Gray, Governor McDonnell and Governor 

O'Malley: 

On behalf of the Airports Authority's Board of Directors, I want to 

update you on actions that have been taken and those that are underway in 

response to the issues expressed in your joint letter of August 4, 2012, and 

to the reports issued by the Department of Transportation Inspector General. 

The leadership of the Airports Authority understands the concerns you have 

expressed, takes them seriously, and intends to fully address and resolve 

them. 

Following the issuance of the DOT Inspector General's interim report 

letter last May, the Airports Authority undertook a number of actions in the 

areas of governance, transparency, ethics, procurement and travel. Many of 

these actions are responsive to the issues presented in your August 4 letter. 

The Inspector General's final report, issued on November I, contains a 

series of 12 recommendations that the Airports Authority intends to fully 

implement. Some of those recommendations call for actions we have 

already taken in response to the May interim letter; others call for additional 

action on our part. We are determined to implement the recommendations 

of the Inspector General as quickly as possible. We also are determined to 

do whatever is necessary to restore your confidence in the Airports 

Authority and in our ability to operate the important public transportation 

assets that have been entrusted to us. 

1 Aviation Circle, Washington. DC 20001-6000 • www.mwaa.com 
120 


Insert offset folio 85 here 76706.085

The Honorable Ray LaHood 

November 14, 2012 

Page 2 

Over the past 25 years, the Airports Authority has successfully financed and developed 

significant improvements to Ronald Reagan National and Dulles International Airports, 

expanding the availability and quality of air service in the greater Washington region and 

significantly contributing to the regional economy. I believe that sound judgment, effective 

management and organizational integrity were required for this success, and that these values 

continue to guide the Authority's work today. It is clear, however, that past actions and 

decisions, as described in the Inspector General's interim and final reports, have cast doubt 

upon the transparency, fairness and integrity of the Authority's administration of valuable 

regional assets, and have served to overshadow the quality service that Authority employees 

provide each day to the region's travelers. It is equally clear that the Authority must act, 

meaningfully and convincingly, to remedy the organizational deficiencies suggested by those 

actions and decisions in order to regain your trust, as well as that of the pUblic. 

In your August 4 letter, you identified eight areas in which you expected the Authority 

to institute "reforms ... immediately in the most appropriate and lawful manner." I want to 

report on the actions we have taken in each of these areas, and to identify the additional 

actions we intend to take in the near future. I would note that, in taking these actions, we 

have worked - and will continue to work closely with Ms. Kimberly Moore, the Federal 

Accountability Officer appointed by Secretary LaHood, who has provided significant 

guidance and assistance. 

Each of the reform areas identified in your letter is stated below and, following its 

identification, a "status" is provided of the actions we have taken, and others we are in the 

process of taking, to respond to your issues of concern and to the recommendations made in 

the Inspector General' final report (referred to below as "IG Recommendations"). 

A. "Swiftly overhaul financial, procurement, and human resources policies and adopt 

poliCies in line with Federal standards for transparency and fairness in these 

categories. " 

1. In the area of Procurement, the following actions have been taken or are in 

process: 

a. The use of categorical exceptions to "full and open competition" has been 

suspended for professional services,land amendments to the Authority's 

Contracting Manual that minimize future use of such exceptions are 

scheduled to be presented to the Board of Directors in the first quarter of 

20l3. (See 10 Recommendation 2(b)) 

b. Through reorganization, the Authority's procurement function has been 

transferred to the Office of Finance. 

1 A copy of the memorandum from the Authority's President and CEO imposing this suspension is enclosed as 

Enclosure A. 
121 


Insert offset folio 86 here 76706.086

The Honorable Ray LaHood 

November 14,2012 

Page 3 

c. Recruitment is underway for a new director of the Authority's procurement 

function, to replace the prior director who has retired. 

d. The Authority is in the process of taking the steps necessary to implement 

the following "procurement-related" recommendations of the Inspector 

General.2 Our intent is to have much of this work completed in the first 

quarter of2013, and the remainder by June 30, 2013. 

i. To address IG Recommendation I regarding the preparation of 

quarterly procurement acquisition reports, this first of these reports 

will be produced and delivered to DOT in April 2013; the report will 

cover the first quarter of 2013, will address contracts awarded and 

contract selections approved by the Board during the quarter, and 

will identify planned procurements for the following quarter. This 

report will thereafter be produced on a quarterly basis. 

ii. To address IG Recommendation 2 regarding revisions to the 

Authority's Contracting Manual to reflect Federal and other best 

practices in certain identified areas, work has begun on these 

revisions, and fonnal amendments to the Contracting Manual that 

address the areas identified in this recommendation will be presented 

to the Board of Directors during the first quarter of2013. 

iii. To address IG Recommendation 3 regarding the need to clarify and 

enforce certain identified policies and procedures currently in the 

Contracting Manual, work is underway on the preparation of 

amendments to the Manual that will clarify, and will address the 

enforcement of, these policies; these amendments will be presented 

to the Board during the first quarter of 20 13. 

iv. To address IG Recommendation 4 regarding an assessment of the 

Authority's procurement workforce and implementation of an 

appropriate procurement certification program, an external consultant 

is being retained to conduct this assessment and work is underway to 

prepare the recommended certification program. The workforce 

assessment will be completed and the certification program will be 

defined by June 30, 2013. 

v. Finally, to address IG Recommendation 5 regarding the 

establishment of policies and procedures for procurement integrity, 

amendments to the Contracting Manual are in preparation that will 

fonnally create these policies; the amendments will be presented to 

the Board in the first quarter of 2013. This IG Recommendation may 

also require amendments to the Authority'S codes of ethics for Board 

members and employees (discussed below); if it is detennined that 

such amendments are needed, they also will be presented to the 

Board during the first quarter of next year. 

, The Recommendations in the Inspector General's final report (pages 38-41) are enclosed as Enclosure B. 
122 


Insert offset folio 87 here 76706.087

The Honorable Ray LaHood 

November 14,2012 

Page 4 

2. In the area ofHwnan Resources, the following actions have been taken or are in 

process: 

a. Recruitment is underway for a new Vice President for the Office ofHwnan 

Resources to replace the prior Vice President who has retired. In the 

interim, the Authority's President and CEO has asswned day-to-day 

management of the Office. 

b. To address IG Recommendation 10(a) regarding policies addressing 

competitive hiring and compensation policy and procedure, policy 

revisions are underway (i) to clarify that, with possible narrow exceptions, 

all newly created positions, vacant positions, and "promotional 

opportunity" open positions will be competitively filled, (ii) to eliminate 

job descriptions with "unclassified duties," and (iii) to require that all 

positions have a specific job description with an associated salary range. 

These revisions will be completed in the first quarter of2013. In addition, 

a number of actions in line with these policies have already been taken. 

c. To address IG Recommendation lO(b) regarding the student employment 

program, management guidance for the program has been developed and 

distributed to all Authority offices; the guidance ensures that student 

candidates and current student employees meet and maintain program 

eligibility requirements, and requires that all students complete background 

investigations before being hired. 

d. To address IG Recommendation lO(c) regarding background checks on 

new employees, steps have been taken to improve communication and 

coordination between the Office of Hwnan Resources and the Office of 

Public Safety, including providing certain Public Safety employees access 

to personnel files. In addition, to improve Authority background 

investigations, on October 17, the Board of Directors authorized staff to 

begin the Authority'S process to adopt a new regulation that will enable the 

Authority'S Police Department to obtain criminal history record 

information for new employees from the FBI, through the Virginia state 

police. It is anticipated that this regulation will be adopted by the Board 

within the next six weeks. 

e. To address IG Recommendation lO(d) regarding justifications to override 

no-hire recommendations based upon background investigations, new 

Authority policy will provide that decisions regarding the suitability of 

individuals based on background investigations will be made by the Vice 

President for the Office of Public Safety, and that appeals from such 

decisions may be made by to the President and CEO. 

f. To address IG Recommendation lO(e) regarding the establishment of 

policies for hiring bonuses and cash awards, policies are now being 

developed in this area. Once finalized, which will be during the first 

quarter of 2013, these policies will, among other things, require the 

approval of the President and CEO for any hiring bonus and will establish a 

set of new, more stringent criteria for cash awards. 
123 


Insert offset folio 88 here 76706.088

The Honorable Ray LaHood 

November 14,2012 

Page 5 

g. Finally, to address IG Reconunendation 1O(f) regarding the timely 

verification of employee eligibility for compensation and benefits, 

procedures providing for such verification will be adopted and 

implemented during the first quarter of2013. In addition, these procedures 

will ensure that benefits will not be authorized or provided following the 

tennination of an employee's employment for reasons other than 

retirement. 

3. In the area Finance, the following actions have been taken or are in process:3 

a. An Internal Controls and Compliance Division has been established in the 

Office of Finance under the direction of the Chief Financial Officer. This 

division is responsible for monitoring and testing Authority-wide 

remediation of the Inspector General's findings, for monitoring the status 

of all audit findings, for periodically validating operational compliance 

with established Authority policies and processes, and, where lack of 

compliance or adequate internal controls are found, for providing the action 

required to bring about such compliance or sufficient controls. 

B. "Terminate all existing contracts withformer Board members andformer employees 

that were not competitively bid" 

1. All contracts with fonner Board members have been tenninated. 

2. The one contract with a fonner employee has been terminated. 

3. In addition, the new code of ethics for members of the Board of Directors,4 

which was adopted by the Board on September 19, prohibits any Board member 

and any member of his or her family, for a two-year period following the 

member's departure from the Board, from having any contractual relationship 

with the Authority. The new code extends this two-year contract prohibition to 

any business entity that is under the control of a fonner Board member. 

4. The new Board ethics code also prohibits any member of the Board and any 

member of his or her family, as well as any business entity that is controlled by 

the member, from having a contract with the Authority during the member's term 

on the Board. 

3 Other than addressing issues relating to procurement (see para. A(I)(d) above), the IG Recommendations do 

not directly address the Authority's "fmance" function or activities of the Office of Finance. 

4 The revised ethics code for the Board of Directors is enclosed as Enclosure C. 
124 


Insert offset folio 89 here 76706.089

The Honorable Ray LaHood 

November 14,2012 

Page 6 

C. "Terminate all existing employment relationships with former Board members. " 

I. The single employment contract with a fonner Board member has been 

tenninated. 

2. In addition, the new code of ethics for Board members prohibits any Board 

member and any member of his or her family, for a two-year period following 

the member's departure from the Board, from being employed by the Authority. 

3. The new Board ethics code also prohibits any member of the Board and any 

member of his or her family from being employed by the Authority during the 

member's tenn on the Board. 

D. "Adopt post-employment restrictions for Board members and employees that meet 

Federal standards. " 

I. In addition to adopting a new ethics code for the Board of Directors, on 

September 19 the Authority adopted a new code of ethics for cmployees.5 The 

Authority worked closely with Ms. Kimberly Moore, the appointed Federal 

Accountability Officer, in developing both of these new codes. These new codes 

places restrictions on Board members and employees following their departure 

from the Authority which are consistent with Federal standards. Prior Authority 

codes of ethics did not impose any such restrictions on Board members or 

employees. The provisions of these new codes and the actions being taken to 

implement the codes, which are described below, address IG Recommendations 

6 through 9. 

2. The ethics code for Board members, in addition to the two-year contract and 

employment prohibitions described above, bars members, for a two-year period 

after they leave the Board, from knowingly making any communication to or 

appearance before the Board or any Authority officer or employee, on behalf of a 

person, in connection with a matter that the member knew or should have known 

was pending during his or her tenn on the Board. This provision is consistent 

with Federal standards. 

3. The ethics code for employees places a number of post-employment restrictions 

on employees. 

a. On a permanent basis, the code bars employees from knowingly making 

any communication to or appearance before the Board of Directors or any 

, The revised ethics code for the Authority employees is enclosed as Enclosure D. 
125 


Insert offset folio 90 here 76706.090

The Honorable Ray LaHood 

November 14, 2012 

Page 7 

Authority officer or employee, on behalf of a person, in connection with a 

matter in which the employee "participated personally and substantially as 

an Authority employee." 

b. For a two-year period after leaving the Authority, the code prohibits 

employees from knowingly making a communication to or appearancc 

before the Board or any Authority officer or employee, on behalf of a 

person, in connection with a matter which was "pending within an area of 

the Authority for which the former employee was responsible" at any time 

during the year before the employee's departure from the Authority. 

c. For a one-year period after departing the Authority, the code provides an 

overall "cooling off period" applicable to employees who are required to 

file armual financial disclosure statements; those employees are barred, for 

a year following the termination of their Authority employment, from 

knowingly making any communication to or appearance before the Board 

or any Authority officer or employee on behalf of any person, regardless of 

the nature of the particular matter. 

E. "Strengthen your ethics code to guard against conflicts of interests and provide 

annual ethics training to Board members and employees. " 

I. As noted, on September 19 the Authority adopted two new codes of ethics, one 

applicable to the Board of Directors, the other to Authority employees. With 

minor exceptions, the two codes contain parallel provisions. 

2. As to conflicts of interests, the codes' conflicts provisions - but particularly those 

in the Board code - have been significantly strengthened. For example: 

a. The definition of "conflict of interests" has been expanded to encompass 

not just "businesses doing or seeking to do business with the Authority," 

but any business or real property that "may realize a reasonably foreseeable 

benefit or detriment as a result of an Authority action or decision"; 

b. V mous thresholds defining the level of financial interest in a business or 

property that may give rise to a conflict of interests have been lowered to 

parallel levels in Federal conflicts rules; and 

c. A "recusal" procedure that is to be followed by Board members with a 

conflict of interests has been defined, which includes public armouncement 

of the recusal, execution of a recusal agreement, and certain steps to 

withdraw from participating in the "conflicted" matter at a Board or 

committee meeting. 

3. In addition to strengthening the "conflict of interests" area, the new ethics codes 

have clarified and strengthened other important areas. For instance: 

a. The codes' provisions relating to the solicitation and acceptance of gifts 

have been significantly rewritten and tightened, and particular emphasis on 
126 


Insert offset folio 91 here 76706.091

The Honorable Ray LaHood 

November 14,2012 

Page 8 

these provisions has been given during current ethics training (see para. 4 

below); 

b. The codes' approach to financial disclosures has been substantially altered 

and revised to parallel the approach taken in the Federal "disclosure" area. 

Under the new codes, disclosures will not be limited to those "businesses 

doing or seeking to do business" with the Authority in which a Board 

member or employee has a financial interest, but will extend to any 

business in which a financial interest is held. In addition, the disclosures 

will now include information relating to gifts received, employment 

positions occupied, and outside positions held during the prior year.6 (The 

actions in this subpara. (b) address IG Recommendation 6(b)); 

c. The Board code has been revised to specifically address the use of one's 

position to benefit relatives or friends, and the use of confidential 

information (addressing IG Recommendation 6(a)); 

d. The Board code also has been revised to provide, for the first time, 

provisions directed at the enforcement of the code's substantive rules. The 

code establishes an Ethics Review Committee of the Board and a procedure 

for the review of and action on allegations of member conduct in violation 

of the code (see subpara. (e)(vi) below); and 

e. Both codes provide for the appointment of an Ethics Officer for the 

Authority and define the responsibilities of the officer. The appointment of 

an Ethics Officer (an attorney in the Office of General Counsel) was 

approved by the Board on October 17. Her responsibilities include: 

i. ensuring the timely filing of annual financial disclosure statements 

by Board members and all employees required to file, reviewing 

such filings to ensure completeness, and using information in the 

filings to alert members and employees of potential conflicts of 

interests (addressing IG Recommendations 6(b) and 7); 

ii. discussing potential conflicts of interests with Board members and 

employees, and providing for the execution of recusal agreements 

when appropriate (see IG Recommendation 7); 

iii. reviewing the second jobs of Authority employees for potential 

conflicts of interests and approving them when no conflict is 

presented; 

iv. reviewing Board member and employee inquiries regarding "widely 

attended gatherings" and approving the acceptance of invitations to 

such events when the codes' standards are met; 

v. advising members and employees generally as to the codes' applicability to situations they describe; 

vi. acting as staff to the Board's Ethics Review Committee, 

undertaking a preliminary investigation of alleged code violations 

by a Board member, and making recommendations based on the 

investigation to the committee; and 

6 A copy of a draft fmancial disclosure fonn for Board members is enclosed as Enclosure E. 
127 


Insert offset folio 92 here 76706.092

The Honorable Ray LaHood 

November 14, 2012 

Page 9 

vii. arranging for the provision of ethics training on an annual basis for 

Board members and employees, as well as new members and 

employees soon after their arrival at the Authority. 

In addition, the Ethics Officer is developing internal forms and protocols to 

be used in implementing and overseeing compliance with the new ethics 

codes (addressing part ofIG Recommendations 6, 7 and 9), including 

annual conflict of interests certifications by contracting officers and their 

representatives (addressing IG Recommendation 6(c». 

4. With respect to ethics training, the new codes require ethics training for new 

Board members and employees within 30 days of their arrival at the Authority 

and thereafter on an annual basis. Since the adoption of the codes, and to address 

IG Recommendations 8(a) and 8(b), an ethics training program for Authority 

employees has been developed which calls for over 35 training sessions that will 

reach all 1,425 employees of the Authority. To date, 26 of these sessions, 

involving 727 employees, have been conducted. In addition, to date ten Board 

members have received training on the new Board ethics code, and the remaining 

members are scheduled for a November 16 training session. Annual ethics 

training will hereafter be provided to employees and Board members. It is 

envisioned that every three years this training will be delivered in a "live" 

meeting format, like the training now being conducted, and that, in the 

intervening two years, an on-line training program will be provided. 

F. "Tighten travel procedures to eliminate wasteful spending. These procedures should 

be consistent with Federal requirements . ., 

1. On September 5, the Board adopted a new travel policy which applies to both 

Board members and Authority employees.7 The Authority worked closely with 

the Accountability Officer in developing this policy and in working to ensure it is 

in line with relevant Federal requirements and industry best practices. 

2. The new travel policy is applicable to both employees and the Board of 

Directors, and places a number of controls upon Board member travel that 

heretofore did not exist or existed in different form. For example, it: 

a. requires prior approval of all non-recurring travel from the Board 

chairman; 

b. places a daily cap of $71.00 for meals and incidental expenses, and 

requires detailed receipts for all expenditures; 

c. defines allowable expenditures that may be reimbursed; 

7 This new travel policy is enclosed as Enclosure F. 
128 


Insert offset folio 93 here 76706.093

The Honorable Ray LaHood 

November 14,2012 

Page 10 

d. bars any reimbursement for alcohol-related expenses; 

e. requires all air travel be via economy class, except for travel outside the 

continental United States which may be an upgrade to the next higher class 

(if this upgrade is to first class, prior approval is required); 

f. places restrictions on lodging, limiting it to conference sponsored hotels or 

other reasonably priced lodging (to address IG Recommendation II, the 

Authority is working with the Accountability Officer to define additional 

limitations on "reasonable lodging expenses"); 

g. requires all expense reimbursement requests to be approved by the Board 

chairman; and 

h. requires an annual audit of travel expenses to be provided to a committee 

ofthe Board and the President and CEO. 

3. In addition to the revised Travel Policy, to address IG Recommendation l2(b) 

regarding guidelines for entertainment business expenses, a revised business 

expense reimbursement policy, applicable to both Authority employees and the 

Board of Directors, is being prepared and is expected to be finalized by the end 

of the year. 

G. "Implement a transparency program that requires open meetings, and the posting of 

meeting announcements, agendas, and all minutes on the internet. This program 

must ensure executive sessions are usedfor limited and proper purposes. " 

1. On February 15, the Board adopted revisions to its Bylaws designed to improve 

the transparency of Board operations and meetings. 8 These revisions: 

a. provide for the regular posting on the Authority's website of information 

relating to the Board of Directors and meetings of the Board and its 

committees, including the following: (i) the dates, times and agendas of the 

next scheduled Board and committee meetings; (ii) the non-privileged 

information and recommendation papers prepared for the Board and 

committees in connection with the meetings' agenda items; (iii) the 

approved minutes of Board meetings; and (iv) the schedule of all Board 

and committee meetings for the upcoming six months; 

b. direct the Board Secretary to ensure that the public is informed of the date, 

time and location of upcoming Board and committee meetings, and has 

access to the records of such meetings; and 

c. clarify the circumstances in which the Board and its committees may move 

into executive or closed session. 

8 The revised bylaws are enclosed as Enclosure G 
129 


Insert offset folio 94 here 76706.094

The Honorable Ray LaHood 

November 14,2012 

Page 11 

Since February 15, the materials described above have been regularly posted to 

the Authority's website. 

2. On July 18, the Board amended the Authority's Freedom ofInformation Policy.9 

The amendments: 

a. establish a Freedom ofInfonnation Officer for the Authority; 

b. define how the public may request records from the Authority and the 

responsibility of Authority officers in responding to such requests; 

c. provided an appeal from a decision by the For Officer to withhold records 

to the chairman of the Board's Legal Committee; 10 and 

d. identifY a broad range of Authority documents that are to be posted on the 

Authority's website (documents, e.g., relating to the Board, to Authority 

finances, to Authority contract opportunities), all of which have been 

placed on the website. 

3. In addition, today the Board has revised its policy regarding meetings of the 

Board's Audit Committee. Prior to this revision, Audit Committee meetings 

have been held largely in closed session. Under today's revision, meetings of the 

Audit Committee will be held in open session except in four specific 

circumstances: when considering audits involving safety or security matters, 

proprietary and privacy information, matters related to actual or potential 

litigation, and information that the professional standards governing financial 

statement auditors require to be addressed in closed session. This policy 

revision, which addresses IG Recommendation 12(a), will be added to the 

Authority'S bylaws in early 2013. 

H. "Strengthen all oversight, construction planning and management programs to find 

ways to reduce design, construction and operating costs of airport facilities and the 

rail to Dulles project. "II 

1. The Airports Authority is committed to undertaking capital construction projects 

in accordance with industry best practices and in a collaborative, efficient and 

cost effective manner. In developing plans for all large capital projects, the 

Authority will continue to hold formal consultations with relevant stakeholders 

and partners (e.g., the airlines, our Metrorail project funding partners, the Dulles 

Corridor Advisory Committee, the Metrorail project's Principals Coordinating 

Committee established under the project partners' 2011 Memorandum of 

The revised Freedom of Information Policy is enclosed as Enclosure H. 

10 IG Recommendation 12(c) calls for an external review of FOI denials. The Authority is reviewing its 

authority to provide such reviews. 

II The IG Recommendations do not directly address the matters addressed in this "reform" area. 
130 


Insert offset folio 95 here 76706.095

The Honorable Ray LaHood 

November 14,2012 

Page 12 

Agreement) to gain input on project scope, budget, and procurement 

methodology. In addition, during the life of construction projects, the Authority 

will continue to regularly share construction progress and cost reports with 

project partners and the public. Such information is regularly presented during 

Board of Directors meetings, and is posted on the Authority's website. 

2. Financial planning for major capital projects will continue to be based on best 

practices. Engineering cost estimates will be independently developed and, for 

large, complex projects, those estimates will be independently evaluated through 

third party "value engineering" reviews. The Phase 2 Metrorail project budget 

has been developed using these methodologies. 

3, Design and construction services will be competitively competed to assure best 

value is obtained. The Phase 2 Metrorail project is currently out to bid utilizing a 

two-step procurement methodology approved by the project partners and FTA 

that is designed to maximize competition and achieve a competition-driven fixed 

price. Aviation projects scheduled for 2013 will be procured using the most cost 

effective construction and procurement methods permitted by FAA grant 

assurances. 

4. Finally, the Airports Authority will continue to utilizc independent construction 

oversight and management support services to assist Authority staff in managing 

construction projects. These third party services have been utilized for years to 

assist in the management of constructions projects at both airports; they also have 

been successfully used during Phase 1 of the Metrorail project. The contract for 

program management support services for Phase 2 of the Metrorail project is 

currently being competed through open competition. The scope of the existing 

aviation oversight and management support services contract is being revised in 

light of reduced construction activities at the airports and in order to 

appropriately align the services needed with the scale of the airports' capital 

program. 

I apologize for the length of this letter. However, I wanted to be sure that the Airports 

Authority's response to your August 4 letter contains and conveys the "candor and 

wholehearted implementation of ... changes" that you seek. I also wanted our response to 

demonstrate that the Authority's Board of Directors is fully committed to working with you 

and our other regional partners in the months ahead to address your concerns and regain your 

confidence. 
131 


Insert offset folio 96 here 76706.096

The Honorable Ray LaHood 

November 14, 2012 

Page 13 

Finally, I note that, in a November 9, 2012, Deputy Secretary of Transportation John 

Porcari has requested that the Airports Authority provide a ''point-by-point'' response to each 

of the recommendations contained in the Inspector General's final report. We will, of course, 

provide this response within the period identified by the Deputy Secretary. 

Enclosures 

Sincerely, 

Michael A. Curto 

Chainnan 
132 


Insert offset folio 97 here 76706.097

Enclosure A 

Memorandum Suspending Use of Certain Categorical Exceptions 

(August 2012) 
133 


Insert offset folio 98 here 76706.098

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY 

+ 

MEMORANDUM 

To: 

From: 

Suhject: 

Date: 

Airpons Authority Employees /'} 

John E. Potter W- f: ~ 

Full <lild Open CO~iti(ln 

August 10,2012 

As a result orrecen! audits by the De.partment of! ransportalion Office (lethe Inspector General, 

we are laking several positive steps 10 change our procurement procedllres. In the l'tI~Llre, the 

Conlructing Mannal will be revised to retlect these chullgcs. I ]olVcvcr, some changes wil! bc Pdt 

into cffect before the Contracting Manual is formally revised 

Etfective August 10, 2{) 12, we are suspending the ll'C of certain categorical exceptions tn lilli and 

open competition presently allowed by section J .2.1 l'Yli1e COl1lraCling Manual. I'hcsc consist of' 

the categoriclii exceptions lor the procurement ofkgal. financial, audit, or legislaliw 

rcpn:scl1lalion proiessiomd services. Any exceptions to this suspensioll mllst be npprovccl by me. 

F fOlllthis date forward, these ser\'ic,~s Illllst be procured using full and open competition 

Therefore, sufficicnllead lillle should be allotted to allow the procurement process 10 he 

completed by your need date. If titere arc allY questions, please contact fred Seitz of the 

Procurement ami Contmcts Department at extension 7·8674 

Thank yf'tl in advance for yom attcntiLlIl and compliance . 

.I Ef':klm 

1 Aviation Ciede, Washington, DC 20(.,"'{)1·6000 • vVW'I'l mWda.!~cm 
134 


Insert offset folio 99 here 76706.099

Enclosure B 

Recommendations from Inspector General 

November 1. 2012, Final Report 
135 


Insert offset folio 100 here 76706.100

Office of Inspector General 

Audit Report 

MWAA'S WEAK POLICIES AND 

PROCEDURES HAVE LED TO 

QUESTIONABLE PROCUREMENT 

PRACTICES, MISMANAGEMENT, AND A 

LACK OF OVERALL ACCOUNTABILITY 

Metropolitan Washington Airports Authority 

Report Number: A V-2013-006 

Date Issued: November 1, 2012 
136 


Insert offset folio 101 here 76706.101

38 

subject to Federal or State guidelines or potential penalties for any abuse of 

these sessions, unlike other major transportation boards. ~7 

CONCLUSION 

As an independent public body subject to few federal and Stale laws, MW AA 

must rely on the strength of its policies and processes to ensure credibility in its 

management of two of the Nation' s largest airports and a multibillion-dollar public 

transit construction project. However, MWAA'g ambiguous policies and 

ineffec1ual controls have put these assets and millions of Federal dollars at 

significant risk of fraud, waste, and abuse and have helped create a culture that 

prioritizes personal agendas over the best interests of the Authority. While 

MW AA is taking positive stcps to CatTect thc deficiencies we identifiedincluding revising its {ravel policies and suspending contracts with fom1~r Board 

members---significant weaknesses remain that leavc the Authority vulnerable to 

criticism for its contracting practites and governance. Enhanced policies, strong 

internal controls, and robust oversight in the areas of hiring and compensation, 

ethics, transparency, and procurement will be critical to maintaining and 

improving the Authority'S operations and restoring public trust in the soundness of 

its current and future activities. 

RECOMMENDATIONS 

We recommend that the Office of the Secretary direct MW AA to take the 

following actions [0 promote integrity and accountability in the AUihority's 

management and governance. We also recommend that the Office of the Secretary 

consider devising and adopting enforcement mcchanisms to ensure that these 

actions are followell. 

I. Provide quarterly acqUlsltHlll reports to the Board of Directors and to DOT. 

Thesc reports should include the following: (a) C{llltracts awarded, dollar value, 

and the extent of competition; (b) name of contracting officer or delegated 

official who cntered into the contract; (c) contract modifications and task 

orders issued, including dollar value; (d) contract actions approved by the 

Board during [he quarter; (e) planned procurcmcnts for the next quarter: and (I) 

employees with contracting warrants and delegations and any limits to their 

authorities. 

61 In contrast similarcntilies. such os the Board or Directors orlb~. Dallas .. 1-'011 Worth lutt'nmtiQnnl Airport. mU5-1 

follow Texas State law and guidelines related to ethics, transparency, and procurement, and willfill failure In comply 

can he punishable by imprisonment and tin,'s. For c~atnplc, a willful violatiun of th. Texas open meetings law is a 

misdemeanurpunishable by up to 6 months ill prison and a fille "fup to $500. Under Virginia law, which MWAA is 

Ilot.ubject to, a willful violation of the open tlIccting.s law is • SSOO to 52.000 civil penalty for a iiI'S! offell"" and 

52,001) to ,~5,OO() fllr a second and any subsequent o(lensc. 
137 


Insert offset folio 102 here 76706.102

39 

2. Implement a plan with milestones to revise contracting policies and procedures 

to reflect Federal and other best practices, including the following: 

a. Publicly announce intent to award sole source contracts. 

b. Minimize categorical exceptions to full and open competition and explicitly 

state the conditions under which an exception can be used. 

c. Limit the involvement of the Board of Directors and individual Board 

members in contracting and prohihit their ability to bypass contracting 

officers. 

d. Ensure fair opportunity in the awarding of task orders under multiple-award 

contracts and ensure contracting officers adequately justify their selections 

of contractors. 

e. Limit and monitor delegations of procure men! authority. 

f. Require program offices to prepare annual forecasts of their acquisition 

needs. 

3. Clarify and enforce its current contracting policies and procedures, including 

the following: 

a. Obtain Board approval for sole source awards ovcr S200,OOO and all 

contracts other than fully competed construction contracts over $3,000,000. 

b. Ensure justilications for the usc of calcgorical exceptions are adcquat~ per 

MWAA '8 Contracting Manual. 

c. Ensure justifications for lhe use or task orders over $200.000 arc adequate 

per MWAA's Contracting Manual. 

d. Prohibit adding out-or-scope ,vork to contracts and authorizing work prior 

to contract award. 

c. Ensure teclmical evaluation committees do not include both supervisors and 

a subordinate as voting members when possible. 

4. Dcfine and asscss the size and skills of the acquisition workforce and 

implement an appropriate acquisition certification program. including 

acquisition and elhics training. 

5. Establish policies and procedures for procurement integrity. including the 

following: 

a. Safeguard non-public and sensitive procurement information. 

b. Restrict prior Board members' and employees' eligibility for MWAA 

contracts and prohibit them from receiving compensation from contractors 

who were awarded contracts, modifications, or task orders of significant 
138 


Insert offset folio 103 here 76706.103

40 

value after serving as a contracting officer, program manager, or other 

related positions. 

6. Fully implement fonna! ethics policies and procedures for Board members and 

MWAA employees to ensure the following: 

a. Nepotism is detected and prevented. 

b. Board members and employees disclose debts, obligations, and holdingsregardless of whether the interests cllTTently conduct or are seeking to do 

business with MWAA-and gifts on their financial interest (OllUS. 

c. All contracting officers and COTRs certify that they do not have financial 

interests in the contracts they award or administer. 

7. Ensure that the review process for tlnandal interest forms emphasizes 

verification and documentation of the following: 

a. All Board members and employees completed and submitted required 

financial interest forms. 

b. Any Board members and employees who h(lve a conflict of interest or 

potential conflict or interest arc counseled. 

8. Fully implemcnt a fomlal. robust ethics training program that ensures the 

following: 

a. All employecs receive initial training. 

b. ReCLlTTent training is based on employees' level of responsibility. 

c. MWAA employees involved in contracting receive training in procurement 

integrity procedures. 

9. Establish priorities fiJr implementing the new Board and MWAA employee 

ethics codes, including dcveloping procedures to oversee and enforce the new 

codes. Develop and implement a process to measure the effectiveness of the 

codes and the oversight and enforcement procedures. and revise or update as 

necessary. 

10. Implement and enforce human resources policies and practices, including the 

fol!O\ving: 

a. Implement a competitive hiring and compensation policy and process that 

competes positions, whether newly created positions, vacancies, or 

promotions. All positions should be based on a specific job description with 

a set salary range. 

b. Verify that candidates and cun'ent employees meet and maintain program 

eligibility requirements for the student employment program. 
139 


Insert offset folio 104 here 76706.104

41 

c. Complete background checks on all new employees prior to their start datc 

tlu'ough a fonmll communication and coordination process between the 

Offices of Human Resources and Public Safety. 

d. Establish a list of acceptable justifications (0 override a no-hire 

recommendation from the Office of Pub lie Sarety. 

e. Establish a policy to administer and oversce hiring bonuses and cash 

awards, including more stringent requirements for justifying and approving 

awards an employee can earn in a certain period of time. 

f Verify eligibility prior to authorizing and continuing pay andfor benefits. 

II. Revise its travel policy to further define what constitutes a "reasonable lodging 

expense" for Authority-rclated travel and to require that travelers do not 

exceed thc defined amount. 

12. Further enhance the accountability and transparency of thc Board of Directors, 

including the following: 

a. Further revise the Board's bylaws to incorporate what actions the audit 

committee may take in closed session. 

h. Develop a Board-specific policy that establishes guidelines f(}f cntertaining 

husiness contacts, including spending thresholds and reimbursement 

prohibitions for ilcms such as meals, alcohoL and entertainment. 

c. Include a mechanism for external review in thc Frecdom of Infonnation 

Policy when a requester is denied information, 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

We provided OST with our dran rcport on October 3, 2012, and received its 

fOl1nai written comments on October 18, 2012. OST's response is included in its 

entirety as an appcndix to this repOIi. In its response, OST stated that the 

Department will formally transmit the tinal report to MWAA with a clear 

expectation that the Authority produce a detailcd response within 30 Jays 

addressing each of our recommendations and specific sub elements. 

OST emphasized that thc Department is exercising the full extent of its authority 

to help \CIW AA address the serious prohlems raised in our report According to 

OS'!', the Department has been working with MWAA over the last several months 

to ensure that it swinty adopts necded refonlls. In particular, the Department 

appointed an Accountability Officer to providc guidance to YIW AA as it rewrites 

its policies and procedures. 
140 


Insert offset folio 105 here 76706.105

Enclosure C 

Code of Ethics for Members of 

AirpOlts Authority Board of Directors 

(September 2012) 
141 


Insert offset folio 106 here 76706.106

Metropolitan Washington Airports Authority 

CODE OF ETHICS FOR 

MEMBERS OF THE BOARD OF DIRECTORS 

DATE: December 2012 
142 


Insert offset folio 107 here 76706.107

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY 

CODE OF ETHICS 

FOR 

MEMBERS OF THE BOARD OF DIRECTORS 

1. PURPOSE AND POLICY 

The Board of Directors of the Metropolitan Washington Airports Authority (the "Authority") 

recognizes that community and industry support of the Authority's programs is dependent, in 

large part, upon community and industry trust in the Directors of the Authority. The Board finds 

and declares that the community and the industry are entitled to be assured that the judgment of 

the Directors of the Authority will not be compromised or affected by conflicting interests. 

Directors, Board leadership and Authority management are responsible for fostering high ethical 

standards for the Authority and its employees, thereby strengthening public confidence that the 

business of the Authority is being conducted with impartiality and integrity. Toward this end, 

this Code prescribes standards of ethical conduct and reporting requirements for members of the 

Board of Directors. 

2. DIRECTORS' BASIC DUTY 

Directors are expected to act in the best interests of the Authority in carrying out their duties 

as members of the Board, and to not knowingly engage in conduct that would violate the 

standards of this Code or bring discredit upon the Authority. Regardless of whether specifically 

prohibited by this Code, Directors must endeavor to avoid conflicts of interest or even the 

appearance of a conflict of interests, refrain from using the position of Director for private gain, 

refrain from giving undue preferential treatment to any person or entity, avoid compromising 

independence or impartiality, refrain from making Authority decisions outside of official 

channels, and avoid any other action that is likely to adversely affect the confidence of the public 

in the integrity of the Authority. ' 

3. CONFLICTS OF INTERESTS 

(a) Actual and Apparetlt Conflicts. An actual conflict of interests arises whenever a 

Director or member of the Director's Immediate Family: 

(i) has a Substantial Financial Interest in an Interested Party; or 

(ii) has a Substantial Financial Interest in any other Business or Property which may 

realize a reasonably foreseeable benefit or detriment as a result of an action or decision of 

the Authority. 

An apparent conflict of interests arises whenever a Director or member of the Director's 

Immediate Family has any other personal interest of which the Director is aware that could 

reasonably appear to conflict with the fair and objective performance of the Director's official 

duties. 
143 


Insert offset folio 108 here 76706.108

(b) Recusa/; Declaration. Directors are expected to recuse themselves from participating in 

any Authority matter in which they have an actual conflict of interests. Directors are also 

expected to recuse themselves from participating in any Authority matter in which they have an 

apparent conflict of interests, unless the Director believes and publicly declares in the manner 

described below that the Director is able to participate in the matter fairly and objectively in the 

interest of the Authority notwithstanding the appearance of a conflict. When a Director is 

recused from a matter, a written disqualification and recusal agreement is to be executed. 

(\) Recusal Procedures. A Director shall not vote on, or at any time Participate in, 

attempt to Participate in, or discuss with other Directors or Authority personnel, any matter 

from which the Director is recused from participating. (Directors may, however, consult the 

Ethics Officer or General Counsel regarding compliance with the provisions of this Code at 

any time.) The Director may remain present for any public portion of a meeting at which 

the matter is considered, provided the Director does not remain at the Board or committee 

table or dais during the discussion and consideration. The Director may not attend any 

portion of an executive session closed to the public at which the matter is considered. The 

Director shall promptly notify the Chairman ofthe conflict of interests and recusal, and shall 

cause the Board's official records to reflect the Director's recusal from participating in the 

matter. Additionally, the fact of the conflict of interests and recusal shall be publicly 

announced at any meeting of the Board or Board committee at which the matter is 

considered. 

(ii) Declaration Procedures. If a Director believes that the Director is able to 

participate in a matter fairly and objectively in the interest of the Authority notwithstanding 

an apparent conflict of interests, the Director shall declare: (I) the nature of the Director's 

personal interest in the parties or matter before the Authority, and (2) that the Director is 

able to participate in the matter fairly and objectively in the interest of the Authority. The. 

Director shall make the declaration orally at any meeting of the Board or Board committee 

at which the matter is considered. In any other circumstance, the Director shall file a signed 

written declaration with the Secretary of the Board, who shall cause thc declaration to be 

included in the Board's official records and shall make it available for public inspection. 

(c) Prohibited Interests. 

(i) Prohibited Interests Existing at Time of Appointment; Exceptions. To qualify 

for appointment, a prospective Director and members of the prospective Director's 

Immediate Family may not hold a Substantial Financial Interest in an Interested Party. 

Exceptions to this prohibition may be made by the appointing official at the time of 

appointment if the interest is disclosed to the appointing official and the Director does not 

participate in any Authority matter affecting such Interested Party. 

(ii) No Acquisition of Cerlaifl Iflterests durillg Term of Service. No Director or 

member of the Director's Immediate Family shall knowingly acquire any interest in an 

Interested Party during the Director's term of service. This shall not preclude, however, 

acquisition of interests in one or more diversified mutual funds, employee benefit plans, or 

2 
144 


Insert offset folio 109 here 76706.109

other investment plans holding interests in an Interested Party that are administered by an 

independent party without participation by the Director or his or her Immediate Family 

members in the selection or designation of financial interests held by the fund or plan. 

(iii) Prohibited Contracts QlId Employment with the Authority during Term of 

Service. No Director or member of a Director's Immediate Family shaH be employed by the 

Authority during the Director's term of service. In addition, no Director, member of the 

Director's Immediate Family, or Business that is wholly or substantially owned or 

controlled by a Director or a member of the Director's Immediate Family shall be a party to 

a contract with the Authority during the Director's term of service. For purposes of this 

section, a Business will be considered "substantially" owned or controlled if the Director or 

a member of the Director's Immediate Family singly or in combination owns or controls 

more than fifty percent (50%) of the Business (i.e., by value or voting power). 

(d) Authority Procedures for Facilitating Compliance with Conflict of jntere.~ts 

Restrictiolls. In order to facilitate compliance with the conflict of interests provisions of this 

section, Authority management, on no less than a quarterly basis, shall supply to Directors a 

current list of all Authority Interested Parties and other Businesses or Property that may be 

affected by a Board or committee decision on particular matters at a future Board or committee 

meeting. In addition, at least one week prior to any meeting of the Board or committee, 

management shall supply to Directors a list of Interested Parties and other Businesses or Property 

that may be affected by a Board or committee decision on a particular matter for consideration at 

the upcoming meeting. Directors are entitled to rely on the accuracy of infonnation suppJied to 

them by the Authority pursuant to this subsection. Directors shull review the information at the 

time it is supplied against their current holdings, and shall, as necessary, recuse themselves from 

participating in any matterin which they have a contlict of interests or, in the case of an apparent 

conflict, make the declaration described in subsection (b)(ii) with regard to the matter. Authority 

management shall also collect information from Businesses seeking a contract ()f agreement with 

the Authority that will facilitate compliance with this Code, which may include a requirement for 

such Businesses to identify whether, to the Business's knowledge, any Director or member of the 

Director's Immediate Family has a Substantial Financial Interest in the Business (including a 

parent entity of the Business). 

(e) Dejillitiolls For purposes of this Section and throughout this Code: 

(i) Business means a sole proprietorship, corporation, partnership, company, 

joint venture, association, joint stock company or any other form of entity recognized 

by law which is engaged in trade. commerce or the transaction of business, and any 

parent entity of the foregoing. For purposes of this Code, an entity will be considered a 

"parent" of a Business if the entity owns or controls more than fifty percent (50%) of 

the Business (I.e., by value or voting power). 

(ii) Immediate Family includes a Director's spouse, domestic partner, any 

dependent children within the meaning of Section 152 of the Internal Revenue Code 

living in the Director's household, and any other person over whose financial affairs the 

Director has substantial legal or actual control. 

3 
145 


Insert offset folio 110 here 76706.110

(iii) Illterested Party means any Business that has or is seeking a contract or 

agreement with the Authority or is an aeronautical, aviation services or airport services 

enterprise that otherwise has interests that can be directly affected by decisions or 

actions of the Authority. 

(iv) Participate means approving, disapproving, making, undertaking. influencing 

or attempting to influence an action or decision of the Authority. 

(v) Property means real property, including land, together with any structures or 

improvements thereon, and any rights or interests in land and/or improvements. 

(vi) Substantial Financial Interest means; 

(I) Ownership 0/ Interest ill a Business. Ownership interest (e.g., shares of 

stock or other securities) in a Business that exceeds three percent (3%) of the total 

equity of the Business, has a fair market value greater than $15,000 or yields more 

than $1,000 in annual income. 

(2) Ownership 0/ Interest in Property. Ownership interest in Property that 

has a fair market value greater than $15,000 or yields more than $1,000 in annual 

income. 

(3) Ownership 0/ Interest in or Employment by a Bus;'less Receiving 

Income/rom an Interested Party. Employment by or ownership (as defined above 

in subparagraph (I») in a Business receiving revenues from an Interested Party of at 

least $/0,000 or three percent (3%) of the Business's gross income for its current or 

preceding fiscal year, whichever is greater. 

(4) Income. Income in any form (whether or not deferred) from a Business or 

Property, including, but not limited to, wages, salaries, fringe benefits, interest, 

dividends or rent that exceeds or may reasonably be expected to exceed $1,000 

annually. Income also includes the prospect of income arising, for example, from an 

upcoming job or offer ofempioyment with a Business. 

(5) Pledge or surety. Personal liability (incurred or assumed) on behalf of a 

Business that exceeds the lesser of three percent (3%) of the asset value of the 

Business or $ I ,000. 

(6) Loan or debt. Personal indebtedness of $1,000 or more to a Business, 

except a debt incurred in the ordinary course of business on usual commercial terms 

(e.g., a mortgage liability secured by a personal residence of the Director or the 

Director's spouse; a loan liability secured by a personal motor vehicle, household 

furniture or household appliances; a personal revolving line of credit or capital 

contribution loan liability; a debit, credit or other revolving charge account 

liability). 

4 
146 


Insert offset folio 111 here 76706.111

(7) Personal Representatioll. Personally representing or providing 

professional services to a Business, including legal, audit, accounting, financial and 

consulting services, regardless of the specific subject matter of the representation or 

amount of compensation received. 

(8) Fiduciary Duty. The duty owed to a Business by ;1 director, officer or 

general partner of the Business, even without financial remuneration from the 

Business. 

(9) Exclusions. The following financial interests are excluded from 

"Substantial Financial Interests": checking or savings accounts; money market 

accounts and other demand deposits; government bonds; certificates of deposit; and 

diversified mutual funds, pension plans, employee benefit plans, trusts, estates and 

other similar funds, plans and entities administered by an independent party without 

participation by the Director or the Director's Immediate Family members in the 

selection or designation of financial interests held by the fund, plan or entity. 

(10) Imputed Interest. The financial and other interests in a Business or 

Property held by the members of a Director's Immediate Family are imputed to the 

Director for purposes of this Code. 

4. POST-SERVICE RESTRICTIONS 

(a) No Contracts or Employmellt with the Authorityfor Two Years. No Director or member 

of a Director's Immediate Family shall be employed by the Authority for two years following the 

conclusion of the Director's term of service. In addition, no Director, member of the Director's 

Immediate Family, or any Business that is wholly or substantially owned or controlled by a 

Director or a member of the Director's Immediate Family shall be a party to a contract with the 

Authority for two years following the conclusion of the Director's term of service. For purposes 

of this section, a Business will be considered "substantially" owned or controlled if the Director 

or member of the Director's Immediate Family singly or in combination owns or controls more 

than fifty percent (50%) of the Business (Le., by value or voting power). 

(b) No Represelllotion of Third-Parties before the Authority for Two Years. No Director, 

within two years of the conclusion of the Director's term of service, shall knowingly make, with 

the intent to influence, any communication to or appearance before the Board of Directors or any 

Director, officer or employee of the Authority on behalf of a Business or person other than the 

Authority in connection with a particular matter that the former Director knows or reasonably 

should know was pending during his or her term of service. 

5. USE OF AUTHORITY POSITION 

(a) General Rule. Directors shall not use their position with the Authority for their own 

personal financial gain, for the endorsement of any product, service or enterprise in which they 

have a financial interest, or for the private financial gain of friends, relatives, or individuals or 

entities with which they are affiliated, including nonprofit organizations of which they are 

officers or members, or with which they have or seek employment or business relations. 

5 
147 


Insert offset folio 112 here 76706.112

Notwithstanding the foregoing, based on personal knowledge, a Director may: (i) refer to the 

Authority President individuals other than relatives (as defined below in subsection 5(d» who 

may be suitable candidates for employment and individuals and entities which may be able to 

provide products or services of potential interest to the Authority; following such referral, the 

Director shall take no action to influence a decision or action by Authority management to 

employ or contract with such individuals or entities; and (ii) rcspond to a request for an 

employment recommendation or character reference for individuals other than relatives who are 

being considered for Authority employment. 

(b) Confidential lIiformation, Directors shall not engage in financial transactions using 

proprietary, sensitive or confidential information of the Authority, allow or cause the improper 

usc of sllch information to further any private interest, or allow or cause such information to be 

disclosed to unauthorized persons or in advance of the time prescribed for its authorized 

disclosure, except where and to the extent necessary to fulfill the Director's responsibility as a 

member ofthe Board of Directors and where required by law, 

(c) Solicitation of Political or Charitable Contributions, Directors shall not solicit any 

support or financial assistance from the Authority or from any Authority employee for any 

political party, candidate or political committee, or for any charitable purpose, The Authority 

shall not give any support or financial assistance solicited in violation of this Code. 

(d) Influellce with regard to Relatives. A Director shall not participate in, address or discuss, 

or attempt to influence in any manner a decision by the Board or Authority management to hire, 

appoint, employ or promote, or to enter a contract with a person who is a relative of the Director, 

For the purposes of this subsection, the term "relative" means the following: husband, wife, 

domestic partner, father, mother, grandfather, grandmother, son, daughter, stepson, stepdaughter, 

granddaughter, grandson, brother, sister, uncle, aunt, nephew, niece, father-in-law, mother-inlaw, daughter-in-law, son-in-law, sister-in-law or brother-in-law. 

6. COMPENSA nON AND REIMBURSEMENT OF EXPENSES 

Directors do not receive compensation for serving as a Director of the Authority, Directors 

may, however, be reimbursed by the Authority for reasonable, authorized and properly 

documented expenses incurred in connection with the discharge of their official duties, in 

accordance with and to the extent permitted under the Authority's expense reimbursement 

policies, Directors are expected to exercise prudence when incurring expenses in connection with 

official duties, 

7. GIFI'S 

(a) Definitions. 

(i) Gift. A gift is any gratuity, favor, discount, entertainment, hospitality, loan, 

forbearance, or other item having monetary value for which the recipient does not pay 

market value, A gift therefore includes, but is not limited to, cash, a meal, merchandise, 

services, admission to a sporting event, admission to a theatrical, musical or other spectator 

6 
148 


Insert offset folio 113 here 76706.113

event, admission to an event or activity in which persons are participants (e.g., a conference 

or golfing event), travel, transportation and lodging. It does not matter whether a gift is 

provided to the recipient in kind or in the form of a ticket, a payment in advance or a 

reimbursement of an expense that has been incurred; in all these cases, the item provided is 

considered a gift. 

(li) Prohibited Source. A Prohibited Source is: 

(I) an "Interested Party" as defined ill Section 3(e)(iii) of this Code; 

(2) a Business or individual whose interests may be substantially affected by the 

performance or non-perfonnance of the Director's duties; and 

(3) a Business or individual where it is clear that the gift would not have been 

offered or given were the Director not a member of the Authority Board of 

Directors. 

For purposes of this Section 7, "Business" includes the officers, employees and 

agents ofthe Business. 

(b) Solicitation of Gifts. A Director shall not solicit a gill. regardless of its value, from a 

Prohibited Source or from any Authority employee, except as specifically permitted pursuant to 

the exception set forth in Section 1 of Appendix A to this Code. 

(c) Acceptance of Gifts. 

(i) General Rule. Directors shall not accept any gift, directly or indirectly, from a 

Prohibited Source, except as specifically permitted pursuant to the exceptions set forth in 

Section 2 of Appendix A to this Code. 

(ii) Direct and Indirect Acceptance. A gift is accepted "directly" when it is provided to 

and accepted by the Director. A gift is accepted "indirectly" when (1) with the Director's 

knowledge and acquiescence, it is provided to and accepted by the Director's parent, spouse, 

domestic partner, sibling, child or dependent relative (as defined in Section 5( d) of this 

Code), whether or not living in the same home, because of that person's relationship with the 

Director, or (2) is provided to and accepted by any other person, excluding a charitable 

organization or other charitable recipient approved by the Ethics Otllcer, on the basis of a 

designation, recommendation or other specification made by the Director. 

(iii) Limitations notwithstalldiflg the Gelleral Rule. Directors should not accept gifts, 

even though permitted pursuant to an applicable exception, on such a frequent or regular 

basis that a reasonable person could be led to believe they are using their position with the 

Authority for personal gain or are not performing the duties of their position in an impartial 

manner. 

7 
149 


Insert offset folio 114 here 76706.114

(iv) Seeking Advice. Directors are encouraged to seek the advice of the Ethics Officer 

when attempting to determine whether a particular offer of a thing of value may constitute a 

gift that may not be accepted under this Section 7. 

(v) Remedies. A Director who has received a gift that may not be accepted under this 

Code shall do one of the following: pay the giver the gift's market value; return the gift to the 

giver; or in the case of perishable items delivered not by the giver but by a third party (e.g., 

Federal Express) deliver the gift to the Ethics Officer, who will make proper disposition of it. 

Market value may be estimated by reference to the retail cost of similar items or services of 

like quality. The Ethics Officer should be consulted when estimating the market value of a 

gift. Subsequent reciprocation of the giver by the Director does not constitute payment of the 

market value of a gift. 

(d) Disclosure. Directors shall disclose to the Ethics Officer any gift solicited or accepted 

(directly or indirectly) from a Prohibited SouTce pursuant to an applicable exception of this 

Code. Gifts shall be disclosed in writing at the time of solicitation or acceptance (or as soon as 

possible thereafter). The disclosure shall briefly describe the gift, state its value and identify its 

source. Gift disclosures shall be maintained by the Ethics Officer for compilation and filing with 

each Director's Annual Disclosure Statement. 

8. DISCLOSURE OF FINANCIAL INTERESTS AND OTHER MATTERS 

(a) Annual Disclosure. Directors shall file a disclosure statement with the Ethics Officer on 

a torm provided by the Authority within 30 days of assuming ~ position as Director, and by 

January 31 of each year thereafter for the duration of the Director's term of service ("Annual 

Disclosure Statement"). The Annual Disclosure Statement shall disclose: 

(i) any Substantial Financial Interest in an Interested Party, Business or Property held by 

the Director or any member ofche Director's Immediate Family at the time of filing, except 

for "personal representation" interests as defined in Section 3(e)(vi)(7) of this Code; 

(ii) any positions of employment held by the Director or any member of the Director's 

Immediate Family during the prior calendar year, whether on a full· or part-time basis; 

(iii) any outside positions held by the Director or any member of the Director's 

Immediate Family during the prior calendar year as a director, officer, general partner or 

trustee of any Business or other entity (including nonprofit, labor and educational 

organizations or institutions, although positions held in any religious, social, fratemal or 

political organization need not be disclosed); 

(b) Reimbursemel/ts al/d Gifts. The following information shall be compiled by designated 

Authority personnel from Authority records for each Director, and filed with the Director's 

Annual Disclosure Statement: 

(i) all reimbursements received from the Authority during the prior calendar year; and 

8 
150 


Insert offset folio 115 here 76706.115

(ii) all gifts accepted (directly or indirectly) from a Prohibited Source which had an 

aggregate value of $350 or more, including a brief description of such gifts, their aggregate 

value and the identity of their source. 

(c) Continuing Disclosure Obligation. Whenever a Director or a member of his or her 

Immediate Family acquires a disclosable Substantial Financial Interest in an Interested Party, 

Business or Property not previously disclosed, the Director shall notify the Ethics Officer, in 

writing, within 10 calendar days of the acquisition and its details, and such statement shall be 

maintained in the same file as the Director's most recent Annual Disclosure Statement. 

(d) Public Availability. All statements required by this Section 8 shall be available for public 

inspection at the Authority offices at Ronald Reagan Washington National Airport, 

9. ETHICS OFFICER 

(a) Designation. The President, with approval of the Board, shall designate an Authority 

employee to serve as the Authority Ethics Officer, who will have and perfonn the responsibilities 

assigned to such officer in this Code of Ethics. An employee's designation as the Ethics Officer 

shall continue until rescinded by the President. 

(b) Duties. The Ethics Officer is charged with fostering the highest ethical standards for the 

Authority and its Directors and employees, thereby strengthening public confidence that the 

business of the Authority is conducted with impartiality and integrity. Specifically, the Ethics 

Officer is responsible for the following: 

(i) distributing copies of the Ethics Code to Directors; 

(ii) distributing, receiving and reviewing Annual Disclosure Statements submitted by 

Directors; 

(iii) discussing potential conflicts of interest with Directors; 

(iv) advising Directors about the application of this Code to specific questions or 

situations presented by Directors, and documenting when ethics advice has been provided; 

(v) arranging for the preparation and delivery of ethics training materials and 

sessions; 

(vi) serving as primary support staff to the Board's Ethics Review Committee (defined 

in Section I I (b) of this Code); and 

(vii) receiving allegations of violations of this Code, conducting preliminary 

investigation into all such allegations, and reporting all allegations to the Ethics Review 

Committee with a recommendation for or against further inquiry based on the preliminary 

investigation. 

9 
151 


Insert offset folio 116 here 76706.116

(c) Opinion of Ethics Officer. No Director may be found to have violated this Code if the 

alleged violation followed from the Director's good faith reliance on a written opinion from the 

Ethics Officer that was made after a full and accurate disclosure by the Director of all material 

facts. 

(d) Role of General COUllsel. The Ethics Officer shall consult with the Authority's General 

Counsel, as necessary, in connection with carrying out the above-described duties. 

10. TRAINING 

Directors are provided with a copy of this Code of Ethics upon assuming their position as 

Director. Within 30 days of receiving the Code, Directors shall provide the Ethics Officer with a 

written certification that they have read and will comply with the Code. The Ethics Officer will 

arrange for all Directors to receive verbal ethics training and accompanying training materials 

within four weeks of the start of their tenn and thereafter on no less than an annual basis. 

II. ENFORCEMENT 

(a) Enforcement Responsibiliry; Interpretation, The Board is responsible for enforcing the 

provisions ofthis Code. It may seek general guidance regarding interpretation of the Code from 

the Ethics Officer and General Counsel. 

(b) Receipt and Review of Allegatiolls. Allegations of violations of this Code may be 

reported to the Board Chairman or to the Vice Chainnan if the allegation pertains to the Board 

Chainnan. The Board Chairman and Vice Chainnan shall report any allegations received by 

them to the Ethics Officer for preliminary investigation. The Ethics Officer shall report all 

allegations to a Committee comprised of Directors and designated by the Board (with at least one 

Director from each appointing jurisdiction) with responsibility for ethics matters ("Ethics 

Review Committee"), with a recommendation for or against further inquiry based on the 

preliminary investigation. The Ethics Review Committee shall review all reports and 

recommendations received from the Ethics Officer and may conduct further inquiry or refer any 

matter to the Board of Directors for further action as the Committee deems appropriate. 

(c) Sanctions. Disinterested members of the Board of Directors may hold a hearing 

regarding any ethics matter referred by the Ethics Review Committee. A Director whose alleged 

conduct is the subject of Board review shall be given notice and an opportunity to be heard, in 

writing and in person. If, following such hearing, the Board determines that a Director has 

knowingly violated this Code, the determination shall be made publically available, and the 

Board may take the action it detennines to be appropriate, which may include but is not limited 

to any or all of the following: 

(i) issuing a public reprimand; 

(ii) giving notice of the violation to the Director's appointing authority; and 

10 
152 


Insert offset folio 117 here 76706.117

(iii) taking appropriate action regarding any contract or agreement that is related to the 

violation (e.g., voiding or cancelling a contract), to the extent permitted by law. 

12. REVIEW OF POLICY 

The Ethics Officer, in consultation with the Board Secretary and General Counsel, shall review 

this Code on an annual basis and report to the Board regarding any recommendations for 

amending the Code or its implementing policies and procedures. 

Effective December 1,2012 

11 
153 


Insert offset folio 118 here 76706.118

J'l.-IETROPOLITAN WASHINGTON AIRPORTS AUTHORITY 

CODE OF ETHICS 

FOR 

MEMBERS OF THE BOARD OF DIRECTORS 

APPENDIX A - GIFT RULE EXCEPTIONS 

Solicitation or acceptance of gifts ITom Prohibited Sources is permitted only under the 

following circumstances: 

I. SOLICITATION EXCEPTION. 

When authorized by the Board Chairman and Ethics Officer and acting on behalf of the 

Authority, Directors may solicit donations for events sponsored in whole or in part by the 

Authority. 

2. ACCEPTANCE EXCEPTIONS. 

(a) Gifts of $25 or Less. Directors may accept a gift (whether given directly or indirectly) 

other than cash of less than $25.00, so long as the aggregate market value of individual gifts a 

Director receives from the same Prohibited Source in a calendar year does not exceed $50. lethe 

market value of a gift exceeds $25 (or the aggregate market value of multiple gifts exceeds $50), 

a Director may not pay the excess value over $25 (or $50) in order to accept the gift. 

(b) Personal Gifts. Directors may accept a gift (whether given directly or indirectly) that is 

given under circumstances that make it clear that the gift is motivated by a personal friendship or 

family relationship rather than the position of the Director. Relevant factors in deciding whether 

a gift is motivated by a personal friendship or family relationship include the history of the 

ITiendship or relationship, and whethcr the cost of the gift is paid by the individual with whom 

the friendship or relationship exists or by the individual's employer. 

(c) Widely Allended Gatherings. Directors may accept a gift of free attendance at a widely 

attended gathering (defined below), or an appropriate portion of such an event, with the written 

advance approval of the Ethics Officer that the Director's attendance is in the interest of the 

Authority because it furthers Authority objectives. 

A widely attended gathering can take many forms, including, but not limited to, a reception, a 

luncheon or dinner event (including with entertainment), a banquet, a conference, and an 

activity-based event. A gathering is widely attended jf it is expected that a large number of 

persons will attend, and such persons will bring differing interests, perspectives andlor 

viewpoints to the gathering. A sporting, theatrical, musical or similar spectator event will usually 

. not be deemed to be a widely attended gathering. 

The Ethics Officer will determine the Authority's interest in a particular widely attended 

gathering. Relevant factors that should be considered include the purpose of the gathering, the 

12 
154 


Insert offset folio 119 here 76706.119

relevance and importance of the gathering to the Authority, the identity of expected attendees 

and the range of interests, perspectives and viewpoints they will bring to the gathering, and the 

market value of the gift o[free attendance. 

Free attendance to a widely attended gathering may include the provision of food, refreshments, 

entertainment, instruction and instructional materials, and activity-based activities (e.g., a round 

of golf), each of which is furnished to all attendees as an integral part of the gathering. Free 

attendance may not include the provision of travel or lodgings. 

(d) Speaking Engagements and Events. Directors may accept a gift of free attendance from 

the sponsor of an event at which they are speaking, presenting information or otherwise 

participating on behalf of the Authority. Free attendance may include food, refreshments and 

entertainment furnished to all attendees as an integral part of the event. Directors' participation 

in the event on the day of their participation is viewed as a customary and necessary part of the 

performance of their positions and does not constitute a gift to the Directors or the Authority. 

(e) Inaugural Flighls. Directors may accept a gift of travel, meals and lodging with respect 

to an inaugural flight to and from Reagan National or Dulles International Airport only if the 

terms of the gift are fully disclosed in advance to the Board and the public. An inaugural flight is 

decmed a gift to the Authority and not an individual Director. 

(I) Authority-Sponsored Events. Directors may accept a gift of free attendance to an event 

that is sponsored solely by the Authority to recognize one or more Authority officers or 

employees or an Authority achievement or milestone, or that is sponsored, in whole or in part, by 

the Authority to raise funds for a charitable organization or cause. Free attendance to such an 

event may include the provision offood, refreshments and entertainment. 

(g) Gifts 10 Family Members. A gift provided to tne parent, spouse, domestic partner, sibling 

or child of a Director may be accepted wnere the gift results from the business or employment 

activities of the recipient, and it is clear from the circumstances that the gift is not being offered 

or given because of the Director's position with the Authority. 

(h) Prizes. Directors may accept a gift that is a prize given to successful competitors in 

competitive contests or events or to persons based upon random drawings (including door prizes 

given randomly). Directors may accept a gift, not addressed in the prior sentence, tllat is 

provided as a favor or in recognition of attendance to all attendees at a widely attended gathering 

or at an event identified in paragraph (d) or (f), so long as the value of the gift is less than $25. 

(i) Gifts 10 Authority. A Director representing or acting on behalf of the Authority may 

accept and use gifts of property for the Authority. Property accepted under this section and 

proceeds from that property must be used, as nearly as possible, under the terms of the gift, if 

any. These include: (i) ceremonial gifts given to Directors (e.g., by representatives of foreign 

airports or governmental units) while serving as a representative of the Authority that are 

accepted on behalf of the Authority; and (ii) gifts of food or refreshments provided Directors at 

events they are attending as representatives of the Authority, where it is clearly in the interest of 

the Authority that it be present at the event through one or more official representatives. In the 

13 
155 


Insert offset folio 120 here 76706.120

case of ceremonial gifts, Directors are to turn the gifts over as soon as practicable to the Ethics 

Officer for disposition, 

(j) Gifts of Generally Available Items, Directors may accept gifts that represent an 

opportunity or benefit, including favorable air fares, commercial discounts and upgrades of 

service from air carriers, that is available either to the public (e,g" frequent flyer miles) or to a 

class of individuals consisting of all Authority employees or all Authority employees working at 

an airport (e,g" discounts offered airport employees by concessionaires in the terminals), The 

acceptance of a gift representing an opportunity or benefit, including, for example, an upgrade of 

air service, that is made available to any other class of Authority employees, including a class of 

one employee, is not permitted, 

(k) Approved Gifts. The Board of Directors may, in an open public meeting, approve a 

Director's acceptance of a gift not otherwise falling within one of the foregoing exceptions if it 

determines that the acceptance would not be detrimental to the impartial conduct of the business 

of the Authority, 

14 
156 


Insert offset folio 121 here 76706.121

Enclosure D 

Code of Ethics for Employees of AirpOlts Authority 

(September 2012) 
157 


Insert offset folio 122 here 76706.122

DIRECTIVE 

Metropolitan Washington Airports Authority 

CODE OF ETHICS FOR EMPLOYEES 

DISTRIBUTION: All Employees OPI: MA-70 

DATE: January 2013 

MWM Form GA.Ol (R~ • .f/OS) 
158 


Insert offset folio 123 here 76706.123

CODE OF ETHICS FOR EMPLOYEES 

Foreword to 2012 Revised Code 

On September 19,2012, the Board of Directors approved a new Code of Ethics for Employees of 

the Airports Authority. The revised Code is effective January 1,2013. The Board has also 

approved a revised Code of Ethics for the Board of Directors. Both of these revised Codes of 

Ethics are intended to ensure that actions by employees and directors, both in fact and 

appearance, are honest, impartial and fair, and are not affected by any interest beyond the ''best 

interest" of the Airports Authority. The Codes accomplish this by defining a range of rules that 

are applicable to employees and directors in four primary areas: conflicts ofinterests; disclosure 

of financial interests; solicitation and acceptance of gifts; and contacts with the Airports 

Authority following employment or service on the Board. 

A number of significant changes have been made in the revised Code of Ethics for Employees. 

One is the creation of the position of Ethics Officer. Among the officer's responsibilities will be 

to advise employees on the meaning of the Code and to answer questions regarding its 

applicability to specific circumstances. An employee who acts in reliance on the advice of the 

Ethics Officer after making a full and accurate disclosure of all material facts cannot be found to 

have violated the Code. 

Another change is in the area of gifts. The revised Code clarifies and expands the types of gifts 

that employees may not accept. Also, there are now certain gifts that may be accepted only with 

the prior approval of the Ethics Officer. 

A third significant change affects the annual filing of a financial disclosure form. The number of 

employees who are required to file a disclosure fonn has been increased. In addition, the 

financial interest~ that must be disclosed have been expanded, and there is a new requirement 

that gifts above a defined size which have been accepted during the prior year must be disclosed. 

All employees will be trained in this new Code of Ethics before it takes effect. 

A major goal of the revised Code of Ethics is the achievement ofa workplace that reflects the 

unquestioned integrity of the Airports Authority and of each of its employees. I expect every 

employee to join me in making the accomplishment of this goal a top priority. 

~{A- John E. Potter 

PreSIdent and ChIef ExecutIve Officer 
159 


Insert offset folio 124 here 76706.124

TABLE OF CONTEI'iTS 

GC-OOIB 

January 2013 

1. PURPOSE .................................................................................................................... I 

2. DISTRIBUTION ......................................................................................................... 1 

3. INTERESTS OF THE AUTHORITy ....................................................................... 1 

4. GIFTS ........................................................................................................................... 1 

a. Gift Defined ............................................................................................................ I 

b. General Prohibition on Solicitation ...................................................................... 2 

c. General Prohibition on Acceptance ...................................................................... 2 

d. Exceptions to Prohibition on Acceptance ............................................................ 2 

(1) Nominal Value Gifts ...................................................................................... 2 

(2) Personal Gifts ................................................................................................. 3 

(3) "Videly Attended Gatherings ........................................................................ 3 

(4) Speaking Engagements and Events ............................................................. 3 

(5) Authority-Sponsored Events ........................................................................ 4 

(6) Gifts to Family Members .............................................................................. 4 

(7) Prizes ............................................................................................................... 4 

(8) Gifts to Authority .......................................................................................... 4 

(9) Gifts of Generally Available Items ............................................................... 4 

e. Appearance of Impropriety ................................................................................... 5 

f. Gifts from Subordinates ......................................................................................... 5 

g. Remedies for Receipt of Improper Gifts; Ceremonial Gifts .............................. 5 

h. Consultation with Ethics Officer .......................................................................... 5 

5. MISUSE OF AUTHORITY POSiTION ................................................................... 6 

6. CONFLICT OF INTERESTS .................................................................................... 6 

a. Definitions ............................................................................................................... 6 

b. Imputed Interest .................................................................................................... 7 

c. Conflict of Jnterests ................................................................................................ 7 

d. Disqualification and Written Recusal Procedure ............................................... 8 

e. Part-Time Employment ......................................................................................... 8 

f. Interest in Certain Aviation-Related Businesses .................................................. 8 

7. COMPENSATION FOR TEACHING, SPEAKING, AND WRITING ................ 9 

-1-
160 


Insert offset folio 125 here 76706.125

GC-001B 

January 2013 

8. DISCLOSURE OF SUBSTANTIAL, FINANCIAL INTERESTS AND OTHER 

MATTERS; CERTIFICATIONS .............................................................................. 9 

a. Employees Required to Make Annual Disclosure ............................................. 9 

b. Content of Annual Disclosure ............................................................................ 10 

c. Employees Serving on Procurement Evaluation Committees ........................ 10 

d. Employees Involved in Administration of Contracts ....................................... 10 

9. NEPOTISM ............................................................................................................... 11 

10. POST-EMPLOYMENT CONH,ICTS OF INTERESTS ..................................... 11 

a. Permanent Restrictions Relating to Particular Matters ................................... 11 

b. Two-year Restrictions Relating to Particular Matters ..................................... 11 

c. One-year "Cooling Off Period" for Certain Authority Employees ................. 12 

d. One-year "Cooling Off Period" for New Authority Employees ...................... 12 

11. ROLE OF AUTHORITY MANAGEMENT AND GJ<:NERAL COUNSEL ....... 12 

12. ROLE OF ETHICS OFFICER ........................... m .................................................. 12 

13. NO RIGHTS CREATED IN THIRD PARTIES .................................................... 13 

14. ENFORCEMEl'o"T AND PENAI,TIES .................................................................... 13 

-ii-
161 


Insert offset folio 126 here 76706.126

GC--OOIB 

1 anuary 20 IJ 

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY 

CODE OF ETHICS FOR EMPLOYEES 

1. PURPOSE 

This document establishes a formal Code of Ethics (Code) for aU employees of the 

Metropolitan Washington Airports Authority (Authority). 

2. DlSTRlBUTIOI\ 

This Code of Ethics is distributed to all Authority employees. 

3. II\TERESTS m' THE AOTHORITY 

The Authority expect~ all employees to act in the best interests of the Authority at all times 

and to not knowingly engage in conduct that is illegal, dishonest, or a conflict of interests or 

that brings discredit upon the Authority. Employees must endeavor to avoid any actions that 

would create even the appearance that they are violating the law or the standards of this Code 

of Ethics. Whether particular circumstances create such an appearance is to be determined 

from the perspective of a reasonable person with knowledge of the relevant facts. 

For example, there would be an appearance of a conflict if an Authority employee were to 

administer a contract for which his or her sister was the project manager for the contractor. 

Even though the employee would not have a Substantial Financial Interest in the matter, such 

a situation would create the appearance of a conflict of interests. If the Authority employee 

failed to bring this situation to the attention of management, he or she may be disciplined. 

In addition, employees are expected to report violations ofthi, Code of Ethics to the Office of 

General Counsel. (See the Conduct and Discipline Directive, Section 4, regarding the 

reporting of other misconduct.) 

4. GIFTS 

This Section sets forth rules regarding employees' solicitation and acceptance of gifts. 

a. Gift Dt!/lned. The telm "gift" is broadly defined for the purposes of this Code and 

means any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other 

item having monetary valuc for which the recipient does not pay market value. Therefore, a 

gift includes, but is not limited to: cash; meals and food; merchandise; services; admission to 

a sporting event; admission to a theatrical, musical or other entertainment event; admission to 

an event or activity in which persons are participants (e.g., a conference or golfing event); 

attendance at a reception; travel; transportation; and lodging. It does not matter whether a gift 

is provided to the recipient in kind or in the form of a ticket, a payment in advance, or a 
162 


Insert offset folio 127 here 76706.127

GC OOIB 

January 20\3 

reimbursement of an expense that has been incurred. In all these cases, the item provided is 

considered a gift. 

b. General Prohibition on Solicitation. Employees shall not solicit a gift, regardless of 

its value, from a Prohibited Source (defined in subsection (c) or from any subordinate 

employee. However, when authorized by the Ethics Officer and acting on behalf of the 

Authority (or a trade association, business group or similar entity on which the employees 

represent the Authority), employees may solicit donations from a Prohibited Source for the 

support of an event sponsored in whole or in part by the Authority (or by the trade 

association, business group, or similar entity). For example, employees may solicit donations 

for Dulles Day Plane Pull for the Special Olympics, the United Way silent auction and events 

sponsored by the American Association of Airport Executives. 

c. General Prohibition on Acceptance. Except as permitted below in subsection (d), 

employees shall not accept a gift directly or indirectly from any of the fonowing Prohibited 

Sources: (i) a Business doing bUSiness or seeking to do business with the Authority, (ii) a 

Business or individual whose interests may be substantially affected by the performance or 

110n-perfonnance of the employees' duties, or (iii) a Business or individual where it is clear 

that the gift is being given because of the employees' positions with or status as employees of 

the Authority. For purposes of this subsection, Business includes the officers, employees, and 

agents of the Business. Employees may not accept any compensation other than that which 

they receive from the Authority for the performance of their Authority duties. 

A gift is accepted directly when it is provided to and accepted by the employee. A gift is 

accepted indirectly when (i) with the employee's knowledge and acquiescence, it is provided 

to and accepted by the employee's parent, spouse, domestic partner, sibling, child or 

dependent relative (as defined in Section 9(3)), whether or not living in the same household, 

because of that person's relationship with the employee or (ii) is provided to and accepted by 

any other entity or individual (excluding a charitable organization or other charitable recipient 

approved by the Ethics Officer) on the basis of a designation, recommendation, or other 

specification made by the employee. 

d. Exceptions to Prohibition on Acceptance. Employees are pernlitted to accept from 

Prohibited Sources the gifts described in this subsection that otherwise would be prohibited by 

subsection (c); provided, however, that employees shall not accept these or any other gifts in 

the following situations: (i) in return for being influenced in the perfonnance of their official 

duties, (ii) from the same or different sources on a basis so frequent that a reasonable person 

would be led to believe the employees arc using their positions with the Authority for private 

gain, or (iii) in violation of the law. 

(I) Nominul Value Gifts. Employees may accept a gift (whether given directly or 

indirectly) other than cush of less than $25, so long as the aggregate market value of 

individual gitls an employee receives from the same Prohibited Source in a calendar year 

does not exceed $50. Where the market value of a gift exceeds $25 (or the aggregate 

market value of multiple less-than-$25 gifts exceeds $50), an employee may not pay the 

excess value over $25 (or $50) in order to accept the gift. 

2 
163 


Insert offset folio 128 here 76706.128

GC-OOIB 

January 2013 

(2) Personal Gifts. Employees may accept a gift (whether given directly or indirectly) 

that is given under circumstances that make it clear that the gift is motivated by a personal 

friendship or family relationship rather than the position of the employee. Relevant 

factors in deciding whether a gift is motivated by a personal friendship or family 

relationship include the history of the friendship or relationship and whether the cost of 

the gift is paid by the individual with whom the friendship or relationship exists or by thc 

individual's employer. However, see subsection (0 Giftsfrom Subordinates below. 

(3) Widely Attended G(ltherings. Employees may accept a gift of free attendance at a 

widely attended gathering (defined below), or an appropriate portion of such an event, 

with the written approval of the Ethics Officer where the Officer has determined, in 

advance of the gathering, that the employees' attendance is in the interest of the Authority 

because it furthers Authority objectives. 

A widely attended gathering can take many forms including, but not limited to, a 

reception, luncheon or dinner event (including with entertainment), banquet, conference, 

charity event, and activity-based or participatory event. A widely attended gathering can 

have many purposes including, but not limited to, instruction or discussion of a subject 

related to Authority o~jectjves; recognition of an event, organization, or individual; and 

raising funds for charitable organizations or causes. A gathering is widely attended if it is 

expected that a large number of individuals will attend and these individuals will bring 

differing interests, perspectives, or viewpoints to the gathering. A sporting, theatrical, 

musical, or similar entertainment event will usually not be deemed to be a widely attended 

gathering. 

The Ethics Otlicer will determine the Authority's interest in a particular widely attended 

gathering. Relevant factors that will be considered include: the purpose of the gathering; 

the relevance and importance of the gathering to objectives of the Authority; the identity 

of expected attendees and the range of interests, perspectives, and viewpoints they will 

bring to the gathering; and the market value of the gift of free attendancc. 

Free attendance to a widely attended gathering may include the provision of food, 

refreshments, entertainmcnt, instl1lction, instructional materials, and activity-based or 

participatory activities, each of which is fumished to all attendees as an integral parl of the 

gathering. (Sec also subsection (d)(7) below.) Free attendance to a widely attended 

gathering may nol include the provision of travel or lodging. 

(4) Speaking Engagements and Events. Employees may accept a gift of free 

attendance from the sponsor of an event at which they are speaking, presenting 

information, participating on a panel, or engaging in a similar activity on behalf of the 

Authority. Free attendance may include food, refreshments, entertainment, instmction, 

and instructional materials tumished to all attendees as an integral part of the event. (See 

also subsection (d)(7) below.) Employees' participation in the event on the day of their 

participation is viewed as a customary and necessary part of the perfonnance of their 

duties and does not constitute a gift to the employees or the Authority. 

3 
164 


Insert offset folio 129 here 76706.129

GC-OOlB 

January 2013 

(5) Authority-Sponsored Events. Employees may accept a gift of free attendance to 

an event that is sponsored solely by the Authority to recognize one or more Authority 

officers or employees or an Authority achievement or milestone, or that is sponsored, in 

whole or in part, by the Authority to raise funds for a charitable organization or cause. 

Free attendance at such an event may include the provision of food, refreshments, 

entertainment, and participatory activities. 

(6) Gifts to Family Members. A gift provided to the parent, spouse, domestic 

partner, sibling, child, or dependent relative (as defined in Section 9(a)) of an employee 

may be accepted where the gift results from the business or employment activities of the 

recipient and it is clear from the circumstances that the gift is not being offered or given 

because of the employee's position with the Authority. 

(7) Prizes. Employees may accept a gift that is a prize given to successful competitors 

in competitive contests or events or to persons based upon random drawings (including 

door prizes given randomly). Employees may accept a gift, not addressed in the prior 

sentence, that is provided as a favor or in recognition of attendance to all attendees at a 

widely attended gathering or at an event identified above in paragraph (4) or (5), so long 

as the value of the gift is less than $25. 

(8) Gifts to Authority. An employee representing or acting on behalf of the Authority 

may accept a gift of property for the Authority. Property accepted under this section and 

proceeds from that property must be used, as nearly as possible, under the ternlS of the 

gift, if any. These gifts include: (i) ceremonial gifts given to employees (e.g., by 

representatives of foreign airports or govemmel1tal units) while serving as a representative 

of the Authority that are accepted on behalf of the AuthOlity, Oi) gifts of food or 

refreshments provided employees at events they are attending as representatives of the 

Authority where it is clearly in the interest of the Authority that it be present at the event 

through one or more ofticial representatives, and (iii) gifts of instruction or training 

offered to the Authority and provided to employees who have been designated by the 

Authority. Training provided to employees by a contractor pursuant to and as required by 

its contract with the Authority, or by a contractor in order to facilitate the Authority's usc 

of products or services the contractor is furnishing under a contract with the Authority, is 

not considered a gift. In the case of ceremonial gifts, employees must turn the gifts over 

as soon as practicable to the Ethics Officer for disposition. 

(9) GiJis of Generally Available items. Employees may accept gifts that represent an 

opportunity or benefit, including favorable air fares, reasonable commercial discounts, and 

upgrades of service from air carriers, where the same opportunity or benefit is being made 

available to the public (e.g., frequent flyer miles) or to a class of individuals consisting of 

all Authority employees or all Authority employees working at an airport (e.g., discounts 

offered airport employees by concessionaires in the terminals), The acceptance of a gift 

representing an opportunity or benefit that is made available to any other class of 

Authority employees, including a class of one employee, is not permitted by this 

4 
165 


Insert offset folio 130 here 76706.130

GC-OOIB 

January 2013 

subsection, Thus, for example, an upgrade of air service that is made available to a small 

group of employees, or a single employee, may not be accepted, 

e, Appearance of Impropriety, Employees must be mindful of perceptions and 

appearances that can arise from their acceptance of gifts from a Prohibited Source that are 

permitted under subsection (d), Consequently, employees should not accept gifts, even 

though permitted under that subsection, on such a frequent or regular basis that a reasonable 

person could be led to believe that employees are using their positions for personal gain or are 

not performing the duties of their positions in an impartial manner. 

f. Gifts from Subordinates. Employees shall not accept gifts from subordinate 

employees, except for gifts that are offered for or on the following occasions: 

(I) in recognition of special, non-recurring occasions of personal significance, such as 

marriage, illness, death in the family, and the birth or adoption of a child and 

(2) in recognition of the termination of a subordinate-official superior relationship 

such as retirement, resignation or transfer. 

g. Remedies jbr Receipt (!( Improper Gi/is; Ceremonial Gift.~. Employees who have 

received a gift that may not be accepted under this Code must take one of the following stcps: 

(I) pay to the givcr the market value of the gift, whether the gift consists of a tangible 

(e.g., box of candy, flowers) or intangible (e.g., ticket to a sporting or entertainment event) 

item. The market value of the gift may be estimated by reference to the retail cost of 

similar items of like quality. However, when employees intend to retain a gift and pay the 

giver its market value, they shall consult with the Ethics Officer regarding the market 

value or 

(2) retum the gift to the giver; provided, however, that a gift of perishable items which 

is delivered not by the giver but by a third party (e.g., Federal Express) may, with the 

concurrence of the recipient employees' supervisors or the Ethics Officer, be given to an 

appropriate charitable organization, shared within the employees' office or working unit, 

or destroyed. 

In the case of ceremonial gifts, although it is not improper to accept them, employees shall 

deliver the gifts to the Ethics Officer who will make proper disposition of them. 

h. Consultation with Ethics Officer. Employees should seek the advice of the Ethics 

Officer when attempting to determine whether a particular offer of a thing of value may 

constitute a gift that may not be accepted under this Section. Under certain circumstances, 

written opinions provided by the Ethics Officer that are relied on by employees will insulate 

employees from a finding that they have accepted a gift in violation of this Code. (See 

Section 12(c) below.) 

5 
166 


Insert offset folio 131 here 76706.131

5. MISUSE OF AUTHORITY POSITION 

GC-OOIB 

January 2013 

a. Employees shall not use their positions with the Authority for their own financial gain; 

for the endorsement of any product, service, or business enterprise; or for the private financial 

gain of friends or relatives (as defined in Section 9(a)) or of any entity or individual with 

whom employees are affiliated (including nonprofit organizations of which the employees are 

officers or members) or with whom employees have or are seeking employment or a business 

relationship. Thus, for example, employees may not ask an Authority contractor or 

subcontractor to hire or consider hiring a relative or a friend, or inform a contractor that they 

are referring to the contractor a relative or friend who is seeking employment or work. 

However, all employee is not precluded by this subsection from responding to a request for an 

employment recommendation or character reference based upon the employee's personal 

knowledge of the ability or character of an individual, other than a relative, who is being 

considered for employment by the Authority. 

b. Employees shall not engage in financial transactions using confidential, proprietary, or 

sensitive information of the Authority or allow or cause the improper use of such information 

to further any personal or private interest. 

6. CONFLICT OF INTERESTS 

B. Definitions. The following definitions are applicable throughout this Code of Ethics.' 

(1) Substantial Financial Interest means: 

(a) Ownership oj interest in Blisiness. An ownership interest (e.g., shares of 

stock) in a Business that exceeds three percent (3%) of the total equity of the Business, 

has a fair market value greater than $15,000, or yields more than $! ,000 in annual 

income. 

(b) Ownership a/Interest in Real Property. An ownership interest in Real 

Property that has a fair market value greater than $15,000 or yields more than $1,000 

in annual income. 

(c) [ncome. Income in any fonn (whether or not deferred) tram a Business or Real 

Property including, bnt not limited to, wages, salaries, fringe benefits, interest, 

dividends, or rent that exceeds or may reasonably be expected to exceed $1,000 

annually. Income also includes the prospect of income arising, for example, from an 

upcoming job with or an offer of employment from a Business. 

(d) Pledge or surety. Actual or potential personal liability given on behalf of a 

Business that exceeds the lesser of three percent (3%) of the asset value of the 

Business or S I ,000. 

, The capitalized terms set out in Scction6(a) , along with their definitions, apply throughout this Code. 

6 
167 


Insert offset folio 132 here 76706.132

GC- OOIB 

January 2013 

(e) Loan or debt. Personal liability in excess of$I,OOO owed to a Business except 

a debt incurred in the ordinary course of business on usual commercial terms (e.g., a 

mortgage liability secured by a personal residence of the employee or the employee's 

spouse; a loan liability secured by a personal motor vehicle, household furniture, or 

household appliances; a personal revolving line of credit or capital contribution loan 

liability; or a debit, credit, or other revolving charge account liability). 

(f) Fiducimy duty. The duty owed to a Business by a director, officer, or general 

partner of the Business, even without financial remuneration from the Business. 

(g) Exclusions. The following financial interests are excluded from Substantial 

Financial Interests: checking or savings accounts, money market accounts, and other 

demand deposits; government bonds; certificates of deposit; and diversified mutual 

funds, pension plans, employee benefit plans, trusts, estates, and other similar funds, 

plans, and entities administered by an independent party without participation by the 

employee or the employee's Immediate Family members in the selection or 

designation of financial interests held by the fund, plan, or entity. 

(2) Business means a sole proprietorship, corporation, partnership, company, Jomt 

venture, association, joint stock company, and any other form of entity recognized by law 

which is engaged in trade, commerce, or the transaction of business and the parent entity 

of the foregoing. For purposes of this Code, an entity will be considered a parent of a 

Business if the entity owns or controls more than fifty percent (50%) of the Business (i.e., 

by value or voting power). 

(3) Immediate Family of an employee means spouse, domestic partner, any 

dependent children (under Section 152 of the Internal Revenue Code) living in the same 

household as the employee, and allY other person over whose financial affairs the 

employee has substantial legal or actual control. 

(4) Participate means approving, disapproving, making, undertaking, influencing, or 

attempting to influence an action or decision of the Authority. 

(5) Real Property means land, together with any structures and other improvements 

thereon, and includes any rights or interests in land or improvements. 

b, Imputed Interest. The financial and other interests (see Section 6(a)(I )(a) through (g)) 

in a Business or Real Property held by the members of an employee's Immediate Family are 

imputed to the employee for purposes of this Section 6. 

c. Conflict o/Interests. Employees holding a Substantial Financial Interest in a Business 

or Real Property that may realize a benefit or detriment as a result of an action or decision of 

the Authority (c.g., a Business holding a contract or lease with the Authority or responding to 

an Authority solicitation or certain Real Property adjacent to an aiIport) are t'onsidered to 

have a conflict of interests that may interfere, or be perceived to interfere, with the impartial 

and conscientious performance of their duties. Employees with a conflict of interests due to 

7 
168 


Insert offset folio 133 here 76706.133

GC-OOIB 

January 2013 

their Substantial Financial Interest in such a Business or Real Property shall not Participate in 

any transaction or matter that involves or may affect that Business or Real Property (e.g., in a 

lease or contract negotiation, a solicitation or contract award process, the administration of a 

lease or contract, or an investment of Authority funds) absent a waiver from the President or 

Executive Vice President. Any such waiver will be reported to the Board of Directors. 

Whenever faced with an actual or apparent conflict of interests, employees shall follow the 

procedure set out in subsection (d) below. 

d. Disqualification and Written Recusal Procedure. Employees shall bring to the 

attention of the Ethics Officer any situation they believe presents for them an actual or 

apparent conflict of interests in relation to a particular Authority transaction or matter (except 

as otherwise provided in Section 8(c». The Ethics Officer shall gather and review 

information relevant to the situation presented by an employee and determine whether there 

exists a conflict of interests that requires the employee not to Participate in the transaction or 

matter. If an affirmative detennination is made, the Ethics Officer shall execute a written 

disqualification and recusal agreement with the employee and the employee's supervisor that, 

among other things, requires the employee to recuse himself or herself from, and not to 

Participate in, the transaction or matter. 

e. Part-Time Employment. Employees may acquire a Substantial Financial Interest in a 

Business by virtue of a part-time or second job with that Business. An employee shall not 

hold a part-time or second job with a Business where the employee's interest in that job 

would significantly conflict with the interest of the Authority in the employee's impartial 

perfonnance of the position he or she holds with the Authority. Such a conflict of interests 

would exist where, in order to avoid the conflict, the employee would be required to withdraw 

from performing significant parts of the duties of his or her position, resulting in a material 

impairment to the employee's ability to perform in that position. Employees considering a 

part-time or second job with a Business shat! consult with the Ethics Officer who will 

determine whether the job presents a conflict of interests that would preclude the employee 

from accepting the job. In making that determination, the Ethics Ofticer should consider 

whether a reasonable person with full knowledge of the relevant facts would question the 

employee's impartiality in perfonning Authority duties. Only if the Ethics Otliccr detemlincs 

in writing that there is no conflict of interests mayan employee assume a pal1-time or second 

job. 

f Interest in Certain Aviation-Related Busi/1esses. Absent a written waiver from the 

President or Exeeutive Vice President, employees identified in Section 8(a), as well as 

members of their Immediate Families, shall not have any ownership interest in, derive any 

income from, or owe any liability to any Business that is engaged in the transportation of 

people or property by aircraft in common carriage or in the provision of aviation or airport 

services; provided that any ownership interest in, income from, or liability to a fund, plan, or 

other entity described above in subsection (a)(1 )(g) that owns an interest or has an investment 

in a Business identified in the prior sentence is not prohibited by this subsection (t). 

8 
169 


Insert offset folio 134 here 76706.134

7. COMPENSATION FOR TEACHI)\\G, SPEAKI)\\G, AND WRITING 

GC-OOlB 

January 2013 

a. Employees may accept compensation for teaching, speaking, and writing on matters 

not pertaining to their official duties. 

b. Employees may not accept compensation or any other remuneration for teaching, 

speaking, writing, or undertaking a similar activity pertaining to their official duties other than 

that paid by the Authority (i) when the activity is undertaken as part of the employees' official 

duties or (ii) when the invitation to undertake the activity is extended, directly or indirectly, 

by a Business having interests that can reasonably be expected to be substantially affected by 

the employees' performance of their official duties. Nothing in this subsection prevents 

employees engaging in the activities described in Section 4(d)(4) from accepting the items of 

'free attendance" identified in that section. 

8. DISCLOSURE OF SUBSTANTIAL, FINANCIAL INTERESTS AND OTHER 

MATTERS; CERTIFICATIONS 

a. Employees Required to Make Annual Disclosure. To avoid conflicts of interests from 

arising and to assure the public of their impartiality, the following employees and agents of 

the Authority shall disclose their Substantial Financial Interests and other matters in 

accordance with subsection 8(b): 

(I) the President, the Executive Vice President, all Vice Presidents, all Deputy and 

Assistant Vice Presidents, the Police and Fire Chiefs, all employees reporting directly to 

the President or the Executive Vice President, and all employees reporting directly to the 

Board of Directors; 

(2) all employees and agents working in: the Executive Offices; the Oftlce of 

General Counsel; the Office of Airport Service PlalUling and Development; the Office of 

Audit; the Procurement and Contracts Department, the Accounts Payable Department, and 

the Treasury Branch within the Oftice of Finance; the Concessions and Property 

Development Department within the Otlice of Business Administration; tbe 

Property/Supply Office within the Office of Public Safety; and the Contract Management 

Division and the Procurement Office at each airport; 

(3) the Controller, the Assistant Controller, the Controller's secretary, and the 

Executive Assistant to the Chief Financial Oftlcer; 

(4) the managers of: Air Carrier Relations within the Office of Business 

Administration; the Planning, Design, Construction and Building Code/ Environmental 

Departments within the Office of Engineering; Internal Controls, Finaneial Strategy 

Analysis and Debt within the Oftice of Finance; the Administrative Department within the 

Office of Public Safety; and the Administration Department at each airport; 

(5) the manager and deputy manager of Operations and of Engineering and 

Maintenance at each airport; 

9 
170 


Insert offset folio 135 here 76706.135

GC 0018· 

January 2013 

(6) the Executive Project Director, the Project Director, and a\l Deputy Project 

Directors oflhe Dulles Corridor Metrorail Project; and 

(7) other employees and agents identified by the President. 

b. Content of Annual Disclosure. Every employee and agent identified in subsection (a) 

shall disclose and certify by January 31 of each year, on a form provided by the Authority, the 

following information as of the date of the disclosure: 

(1) any Substantial financial Interest in a Business or Real Property held by the 

employee or agent or any member oflhe his or her Immediate Family: 

(2) any positions of employment held by the employee or agent or any member of his 

or her Immediate Family during the prior calendar year, whether on a full- or part-time 

basis; 

(3) any gifts (as defined above in Section 4{a» accepted, directly or indirectly, by the 

employee during the prior calendar year from a single Prohibited Source whose aggregate 

value exceeded $350 (gifts are to be disclosed whether or not they were permitted to be 

accepted under Section 4); and 

(4) any outside positions held by the employee during the prior calendar year as a 

director, officer, general partner, or trustee of a Business or other entity including a 

nonprofit organization, a labor organization, and an educational or other institution of 

higher leaming. Positions held in a religious, social, fraternal, or political entity are not 

required to be disclosed. 

c. Employees Serving 011 Procurement Evaluatioll Committees. Before beginning the 

evaluation of proposals submitted in an Authority procurement, each member of the 

committee evaluating the proposals (whether a voting or advising member) shall certify, on a 

form provided by the Authority, that the member has no Substantial Financial Interest in any 

offeror that has submitted a proposaL If, during the committee's deliberations, a member 

acquires or determines that he or she has a Substantial Financial Interest in a first tier 

subcontractor to one of the offerors, the member shall notify the Contracting Officer 

immediately and shall not participate further in the committee's deliberations. 

d. Employees involved in Administration of Contracts. Before begilUling the 

administration of a contract, and annually thereafter by January 31 of the year, Contracting 

Officers, Contracting Officer's Technical Representatives, and their alternates, if any, whether 

they are employees or agents of the Authority, shall certify, on a form provided by the 

Autbority, that they do not have a Substantial Financial Interest in the contract's prime 

contractor or in any tirst tier subcontractor. If, in the course of a year, a Contracting Officer 

or Contracting Officer's Technical Representative acquires or determines that he or she has a 

Substantial rinanciallnterest in the contract's prime contractor or a first tier subcontractor, he 

10 
171 


Insert offset folio 136 here 76706.136

GC-OOIB 

January 2013 

or she shall immediately notify the Ethics Otlicer and cease perfonning any role in 

connection with the contract. 

9. NEPOTISM 

a. For the purposes of this Code, the tenn "relative" means the following: husband, wife, 

domestic partner, father, mother, grandfather, grandmother, son, daughter, stepson, 

stepdaughter, granddaughter, grandson, brother, sister, uncle, aunt, nephew, niece, father-inlaw, mother-in-law, daughter-in-law, son-in-law, sister-in-law, and brother-in-law. 

b. An employee shall not participate in the making of a decision to hire, appoint, employ, 

or promote or in either the making of any other decision or the taking of any action that has 

the potential to affect a person who is a relative of the employee, including making an attempt 

to persuade another employee to make a decision or take an action affecting a relative. 

c. An employee may not work in or be assigned to a position which will result in a 

situation where: (i) a relative of the employee directly or indirectly may supervise, control, or 

influence the work or the employment status of the employee; (ii) the employee directly or 

indirectly may supervise, control, or influence the work or the employment status of the 

relative; (iii) the employee or relative may supervise, control, or influence the affairs of the 

organizational unit in which the other works; or (iv) the employee and relative report directly 

to the same supervisor. 

10. POST-EMPLOYMENT COIWLICTS OF INTERESTS 

a. Permanent Restrictions Relating to Particli/ar Mailers. No employee, after the 

tennination of employment with the Authority, shall knowingly make, with the intent to 

influence, any communication to or appearance before the Board of Directors or any officer or 

employee of the Authority, on behalf of an entity or individual other than the Authority, in 

connection with a partiCUlar mattcr: 

(l) in which the Authority is a party or has a direct and substantial interest, 

(2) in which the fonner employee participated personally and substantially as an 

Authority employee, and 

(3) which involved a specific party or specific parties at the time of such personal and 

substantial participation. 

b. Two-year Restrictions Relating to Particular Matters. No employee, for a period of 

two years after the termination of the employee's employment with the Authority, sha!! 

knowingly make, with the intent to influence, any communication to or appearance before the 

Board of Directors or any officer or employee of the Authority, on behalf of an entity or 

individual other than the Authority, in connection with a particular matter: 

(I) in which the Authority is a party or has a direct and substantial interest, 

II 
172 


Insert offset folio 137 here 76706.137

GC - 0018 

January 2013 

(2) which the fonner employee knows or reasonably should know was actually 

pending within an area of the Authority for which the former employee was responsible at 

any time during the year before the termination of his or her Authority employment, and 

(3) which involved a specific party or specific parties at the time it was pending. 

c. One-year "Cooling Off Period" for Certain AuthorilY Employees. No employee 

identified in Section8(a)(I), for a period of one year after the termination of the employee's 

employment with the Authority, shall knowingly make, with the intent to influence, any 

communication to or appearance before the Board of Directors or any officer or employee of 

the Authority on behalf of any other entity or individual. 

d. One year "Cooling Off Period" jor New Authority Employees. No employee, for a 

period of one year after starting employment with the Authority, shall participate in a matter 

that is likely to have a direct effect on an interest of a Business for which the employee, 

during the year prior to the start of the employee's Authority employment, served as a 

director, officer, trustee, general partner, agent, attorney, contractor, or employee. 

I I. ROLE 01<' AUTHORITV MANAGEMENT AND GENERAL COUNSEL 

Authority management is responsible for fostering high ethical standards for the Authority 

and its employees thereby strengthening public confidence that the business of the Authority 

is being conducted with impartiality and intcgrity. The General Counsel is responsible for 

regularly reviewing and, when necessary, recommending revisions to this Code of Ethics, for 

providing training on this Code to new employees within four weeks of the start of their 

employment, for providing training on the Code to other cmployees on an annual basis, for 

overseeing the preparation and filing of annual disclosures required by the Code, and for 

assisting the Ethics Officer, including when the officer is advising employees about the 

application of the Code to specific questions or situations presented by employees. 

12. ROLE OF ETHICS OFFICER 

a. The President shall designate an Authority employee to serve as the Authority Ethics 

Officer who will have and will perf 01111 the responsibilities assigned to such officer in this 

Code of Ethics. An cmployee's designation as the Ethics Officer shall continue until 

rescinded by the President. 

b. The Ethics Officer is responsible for carrying out the duties defined and assigned to 

the officer in this Code. The Ethics Officcr is also responsible for assisting the General 

Counsel in the perfonnance of the responsibilities described in Seetioll 11. 

c. No employee will be found to have violated this Code if the alleged violation followed 

from the employee's good faith reliance on a written opinion from the Ethics Officer that was 

made after a full and accurate disclosure by the employee of all material facts. (See SectiOll 

4(h).) 

12 
173 


Insert offset folio 138 here 76706.138

13. NO RIGHTS CREATED IN THIRD PARTIES 

GC-OOlB 

January 2013 

A violation by an employee of any provision of this Code of Ethics shall not create any right 

or benefit, substantive or procedural, enforceable by law, contract. or otherwise by any entity 

or individual against the Authority, its officers, or its employees or against any other entity or 

individual. 

14. ENFORCEMENT AND PENALTIES 

a. Employees shall be subject to discipline, including termination of their employment 

with the Authority, for violations of the provisions of this Code of Ethics. Guidelines 

regarding the level of discipline that may be imposed for violations of this Code are set forth 

in Appendix A of the Conduct and Discipline Directive. 

b. Any alleged violation of this Code by the President shall be processed and enforced 

under Section II of the Code of Ethics for Members of the Board of Directors. 

13 
174 


Insert offset folio 139 here 76706.139

Enclosure E 

Draft Financial Disclosure Form for 

Airports Authority Board of Directors 

(October 2012) 
175 


Insert offset folio 140 here 76706.140

MW AA Board of Directors Financial Disclosure Form 

Reporting Individual's Identification 

Genera/Instructions 

Step 1: Read the instructions for Parts r and II on the following pages. 

Step 2: For each statement below, check Yes or No to describe your situation: 

I have reportable Substantial Finaneial Interests. DYes oNe 

I have reportable Employment and Outside positions. aVes DNo 

Step 3: If YOII selected Ves for any statement above, you must describe the I'eportable 

Interests that you have ill the corresponding Part of the form. Attach additional 

pages as necessalY, labeled with your lIamc and the Part of the form to which the 

additional pages correspond. 

Step 4: Sign and date the form. 

Step 5: Submit the completed form to the Ethics Officer. 

Certification and Signature 

I CERTIFY that the statements I have made on this form and all attached schedules are 

true, complete, and correct to the best of my knowledge. 

I ""teIMOnto. Day. ..rl 
176 


Insert offset folio 141 here 76706.141

t R,portlnglndN,a",,', ',me 

Part I-Substantial Financial Interests 

Part I-General Instructions 

1. Covered Persons. Report the required information for: 

). yourself, 

'" your spouse nr domestic partner, 

). your dependent children living in your household. and 

;. any other person over whose financial affairs you have substalltiallegal or actual 

control, 

2. Important Definitions. 

Business: A sole proprietorship, corporation, partnership, company, joint venture, association, 

joint stock company, or any other form of entity recognized by law which is engaged in trane, 

commerce, or the transaction of business AND any parent entity that owns or controls more 

than fifty percent of any of the foregoing entities 

Immediate Family: Your spOllse, domestic partnpr, dependent children living in you,' 

hOllsehold, and any other person over whose financial affairs you have substal1liallegal or 

actual controL 

Interested Party: The following are InterestE'd Parties: 

y Any Business that has 01' is seeking a contract or agreement with the Authority; or 

;.. An aeronautical, aviation sE'rvicf's or airport sPl'vices enterprise that otherwise has 

interests that ran be directly affected by decisions or actions of the Authority, 

P/'operty: Real property, including land, together with any structures or improvements on the 

land. 

3. Interests Not Required to Be Reported. Report tbe required information in each category 

idt'ntified below, except for the following interests, which do not need to be reported: 

>- Checking or savings accounts, money market ., 

accounts, other demand deposits 

). Government bonds 

;.. Certificates of deposit 

., Diversified mutual funds 

:.. Pension plans 

:.. Employee benefit plans 

'" Trusts or estates 

.., Other funds, plans, or entities administered 

by an independent party without 

participation by you or a member of your 

Immediate Family in the selection or 

designation of financial interests held by the 

plan, fund, or entity 

Any liability granted in the ordinary course 

of business by a financial institution or other 

Business on usual commercial terms, 

including the following: 

o Mortgage liability secured by a personal 

residence of you or your spouse 

o Loan liability secured by a personal 

motor vehicle. household furniture, or 

household appliances 

o Personal revolving line of credit or 

capital contribution loan liability 

o Debit, credit, or other revolving charge 

accou nt liability 
177 


Insert offset folio 142 here 76706.142

Reporting ndivJ U~! s Name 

Part I-Reportable Interests 

Ownership Interests in a Business or Property. Report for yourself or any member of your Immediate 

Family any interests in a Business or Property held at the time of filing: 

.{ exceeding 3% of the total equity of the Business; 

.{ having a fair market value greater than $15,000; or 

.{ yielding more than $1,000 in annual income. 

Type of Interest Held (e.g., stock, bond, partnership 

interest, real property, etc,) 

... _----_ .... _-_.+. __ ._-_.--_._._ .. -_ .. __ ... __ .. 

Income. Report for yourself and any member of your Immediate Family any sources of income you or 

your Immediate Family member has at the time of filing from a Business or Property that exceeds or 

may be reasonably expected to exceed $1,000 per year. Also report any prospective sources of income 

from an upcoming job with or offer of employment from a Business. 

Income Source Name and Address 

Pledges or Sureties. Report for yourself and any member of your Immediate Family any pledge or surety 

given on behalf of a Business, which gives rise to actual or potential personal liability as of the time of 

filing, that exceeds the lesser of: 

.{ 3% of the asset value of the Business; or 

.{ $1,000. 

usiness Name an~~~~_r_e_ss ________ -_-_·rp~ ofli'abiTitY('~~:~!;dge, ~~;~,g~~-ra'n~,'~~ 

1. 

2. ---.-.. -------.---

3, .• -........... _ ... - ... -..... ----

~.----.--------
178 


Insert offset folio 143 here 76706.143

liabilities. Report for yourself and any member of your Immediate Family any reportable personal 

liabilities in the form of loans or debts in excess of $1,000 owed to a Business held at the time of filing. 

~._··'_credl_to_~_N~me_·_~n_d Address--.-_-_·_·-___ _ 

li·--·----' --- .-=---.. . _----

Fiduciary Positions. Report for yourself and any member of your Immediate Family any pOSition held 

with a Business as a director, officer, or general partner at the time of filing. 
179 


Insert offset folio 144 here 76706.144

eportingln ivl 

Part II-Employment and Outside Positions 

Part II-General Instructions 

1. Reporting Period. Repolt the required information for the calendar year preceding your filing 

of this form. 

2. Covered Persons. Rpport the required information for: 

);. yourself, 

} your spouse or domestic partner, 

:;. your dependent children living in your hOllsehold, and 

);. any other person over whose financial affairs you have slIbstantiallegal or actual 

control. 

3. Important Definitions, 

Business: A sole proprietorship, rorporation. partnership. company, joint venture. assoriation. 

joint stocl< company, 01' any other form of entity recognized by law which is engaged in trade. 

commerce, or the transaction of business AND any parent entity that owns or controls more 

than fifty percent of any oflhe foregoing entities. 

Immediate Family: Your spouse, domestic partner, dependent children living in your 

household, and allY other pE'l'son over wh0se tinanrial affairs you have substantial legal or 

actual control. 

Part /I-Reportable Positions 

Outside Positions. Report any position held by you or any member of your Immediate Family during the 

reporting period as a director, officer, general partner or trustee of a Business or other entity, including 

nonprofit, labor, and educational organizations or institutions. Positions held in a religious, social, 

fraternal or political organization are not required to be reported. 

I Organization Name and Add~~~ __ ~'--r-=T"'yp-e-o-f:-O=-r-g-a-n:-iz-at:7io-n------r::-P_o_sl_ti_o_n _.-_~_._ ... _~__== 

11 -__ -~:+J~~~~~~~_-_-__ ·-_-·-'-r_--_·--_ .. -_--_-~_·-·-.. · 
180 


Insert offset folio 145 here 76706.145

Employment Positions. Report any employment position (whether full, part-time, or temporary) held by 

you or a member of your Immediate Family during the reporting period. t""";'" 1. '.m •• ", Add",,-- ---- -- _. 2. '-- --. 3 

Li~ __ .. _. __ ..... _____ . .1 

Type of Organization 
181 


Insert offset folio 146 here 76706.146

Enclosure F 

Airports Authority Travel Policy 

(September 2012) 
182 


Insert offset folio 147 here 76706.147

METROPOLITAN WASHINGTON AIRPORTS AUTHORITY 

+ 

MEMORANDUM 

To: 

From: 

Subject: 

/j 

All Airports Authority Management Forum Attendees r ~ U 

Andrew Rountree, Vice President for Finance and CFO, MA- of rJ;a 

Airports Authority Travel Policy . 

Date: September 11, 2012 

Attached please find a revised Airports Authority Travel Policy which Is effective for 01/ travel that is 

either authorized or qctuolly occurs after September 5. 2012. The Board of Directors of the Airports 

Authority approved this new policy which applies to both the Board of Directors as well as to all Airports 

Authority employees. For Airports Authority employees, the policy does not differ Significantly from the 

previous employee policy; however It should be read carefully as there are changes. One key change is 

that a dally limit has been set for the amount reimbursable for meals and incidentals while In travel 

status. I will provide a brief overview of this new policy at the Management Forum on September 17'h 

and will be available to answer any questions you may have about this policy. 

Please share and discuss this new Travel Policy with all employees and we will transmit this Policy to all 

employees directly following the Management Forum. 

RTA:dp 

cc: Jack Potter, MA-1 

Margaret McKeough, MA-2 

David Mould, MA-I0 

Frank Holly, MA-30 

Mark Treadaway, MA-40 

Phil Sunderland, MA-70 

Valerie Holt, MA-80 

Paul Malandrlno, MA-I00 

Chris Browne, MA-200 

Elmer Tippett, MA-300 

Steve Baker, MA-400 

Arl Williams, MA·SOO 

Syed Ali, MA-600 

Quince Brinkley, MA·BD 

1 Aviation Circle. Washington. DC 20001·6000 • www.mwaa.com 
183 


Insert offset folio 148 here 76706.148

Topic: 

Function: 

Section: 

Applicability: 

Contents 

Travel Policy 

General Accounting 

Cash Disbursements 

Topic No: 

Updated: 

Owner: 

To Be Determined 

September 5, 2012 

Office of Finance 

Airports Authoritv-wide includino Directors Status: FINAL 

1.0 Purpose ........................................................................................................ 4 

2.0 Distribution ................................................................................................... 4 

3.0 Oe/initions ..................................................................................................... 4 

3.1. Actual Expenses ....................................................................................... 4 

3.2. Approving Official ..................................................................................... 4 

3.3. Board Office ............................................................................................. 4 

3.4. Daily Expenses ......................................................................................... 4 

3.5. Domestic Trips ......................................................................................... 4 

3.6. Expense Reimbursement Request .......................................................... 4 

3.7. Incidentals ................................................................................................ 4 

3.8. Intemational Trips .................................................................................... 5 

3.9. Local Travel ............................................................................................. 5 

3.10. Mileage Rate ......................................................................................... 5 

3.11. Personal Expenses .............................................................................. 5 

3.12. Personal Travel ........................................................................................ 5 

3.13. Transportation .......................................................................................... 5 

3.14. Travel Advance ........................................................................................ 5 

3.15. Travel Authorization .................................................... . .. ................... 5 

3.16. Travel Authorization Number ............................. .. .......................... 5 

3.17. Traveler ................................................................................................... 6 

4.0 Policy ............................................................................................................ 6 

4.1. General Policy .......................................................................................... 6 

4.2. Prudent Use of Travel Funds ................................................................... 6 

4.3. Trip Summary ........................................................................................... 6 

4.4. Travel Reporting ....................................................................................... 6 

4.5. Annual Audit ............................................................................................. 6 

5.0 T ravel Authorizations ................................................................................... 7 

5.1. Preparing the Travel Authorization/Advance Form .................................. 7 

5.2. Approving Officials for Travel Authorizations .......................................... 7 

5.2.1. Responsibility of Approving Officials for Travel Authorizations ........ 7 

5.2.2. Appeal 01 Denied Travel Authorization ............................................. 7 

5.3. Allowable Costs ........................................................................................ 7 

5.4. Amending a Travel Authorization/Advance Form .................................... 8 

5.5. Business and Personal Travel Combined ............................................... 8 

5.6. Transportation .......................................................................................... 8 

5.6.1. Air Travel .......................................................................................... 8 

5.6.2. Train Travel ...................................................................................... 9 

Metropolitan Washington Airp-o-orts-A:'""u7':'tho-ri::'""ty,-':P:-:ofl:-:'ci-es-a-'od:-:p'-ro-ce--:-du-re-s,-::O-:::ffic-e-of:-::F""'ina-n-ce---'-------
184 


Insert offset folio 149 here 76706.149

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Topic No: 

Updated: 

Owner: 

To Be Determined 

September 5, 2012 

Office of Finance 

Airports Authority-wide, includinQ Directors Status: FINAL 

5.6.3. Car Rental ....................................................................................... 9 

5.6.4. Private Aircraft .................................................................................. 9 

5.6.5. Personal Vehicle .............................................................................. 9 

5.6.S. Travel Routing ................................................................................ 10 

5.6.7. Taxis, Shuttle Services and Other Courtesy Transportation .......... 10 

5.7. Hotel Accommodations .............................................. " .......................... 10 

S.O Trave! Advances ......................................................................................... 10 

6.1. Genera! ................................................................................................... 10 

6.2. Approval and Submission Requirements ............................................... 10 

6.3. Payment of Travel Advances ................................................................. 10 

6.4. Repayment of Trave! Advances ............................................................. 11 

6.5. Failure to Repay Advances and Potential Payroll Deduction ................ 11 

7.0 Making Reservations .................................................................................. 11 

7.1. Travel Agent. ......................................................................................... 11 

7.1.1. Problems with Ticketing or the Travel Agent.. ............................... 11 

7.2. Using the Internet or Contacting Carriers Directly .......... .. .. ......... 11 

8.0 

8.1. 

8.2. 

8.3. 

Loca! Travel ............................................................................................... 12 

Reimbursable Expense for Local Travel ................................................ 12 

Local Travel From Home Versus Work ................................................. 12 

Airports Authority-Sponsored Activities and Events ............................... 12 

9.0 Expense Reimbursements ......................................................................... 12 

9.1. Completing the Expense Reimbursement Request ............................... 12 

9.1.1, General Guidefines ........................................................................ 12 

9.1.2. Receipts ....................................................................... , ................. 12 

9.1.3. Daify Expenses for Meals and Incidentals .......... , .......................... 13 

9.1.4. Allowed Expenses for TraveL, ...................................................... 13 

9.1.5. Personal Expenses ....................................................................... 13 

9.2. Approving Officials for Expense Reimbursement Requests .................. 14 

9.3. Currency Conversion ............................................................................. 14 

9.4. Submission Requirements .............................................. , ........ , ............. 14 

9.4.1. Cancellation With Charges Incurred .............................................. 14 

10.0 Miscellaneous ............................................................................................ 15 

10.1. Travel Expenses Paid by Outside Parties .............................................. 15 

10.2. Personal Injury Accidents ....................................................................... 15 

11.0 Exceptions to the Policy ............................................................................. 15 

12.0 Questions ................................................................................................... 15 

13.0 Effective Date ......................... , ................................................................... 15 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 
185 


Insert offset folio 150 here 76706.150

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authority-wide, including Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To 6e Determined 

September 5, 2012 

Office of Finance 

FINAL 

14.0 Approvals ........ ,., ....... , ........ , .......... , .. , ........ ,." ............ , ... ,"" ....... , .. ,", ........ , 15 

Attachment 1 - Mileage Rate .................................. , ................... , .......................... 16 

Attachment 2 - Form AC-10 (Travel Authorizalion! Advance) ............... , ........ , ...... 17 

Attachment 3 -Airports Authority Travel AgenL. ........................................ , .... , .... 17 

Attachment 4 - Form AC-12 (Expense Reimbursement Request) ....................... , 18 

Attachment 5 - Daily Meals & Incidentals Limi!.. ............................ " ................ " .. , 18 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 3 
186 


Insert offset folio 151 here 76706.151

Topic: 

Function: 

Section: 

~licabilitv: 

1.0 

Purpose 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authority-wide, including Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

The purpose of this Policy is to outline travel procedures for allowability, fiscal 

responsibility and consistency in control and reporting. The Policy applies to all 

Travelers, including all Directors, all employees, and non-employees (such as jab 

candidates, external procurement panel members, etc.) traveling on behalf of the 

Metropolitan Washington Airports Authority (Airports Authority). Any exceptions for 

a category of Traveler are explicitly noted in the applicable section. 

-·:;;-:;:----------· ... ----I"'T"'h,-;is Policy sh;'lli'be'dislribuled to all Directors and employees and superse-de--

Distribution Airports AuthOrity Directive AC-001 B, dated April 15, 2005, and the Travel and 

Business Expense Guidelines for Board of Directors, dated December 3, 2008. 

This Policy will be presented to Directors during members' initial orientation and 

reviewed with Directors annually thereafter and presented to employees during 

_____ .... _____ new eme!Qxee ortentaUon ... ___________________ . __ . __________ . __________ , _ .... _ 

3.0 3.1. Actual Expenses 

Definitions Payment of authorized actual daify expenses incurred, up 10 the limit 

prescribed by Section 9.1.3 of this policy, as appropriate. Entitlement to 

reimbursement is contingent upon the presentment of receipts for actual 

expenses. 

3.2. ApprovIng Official 

Those authorized to approve Travel Authorizations or Expense 

Reimbursement Requests. The Approving Official is responsible for 

ensuring knowledge and compliance with this Policy. 

3.3. Board Office 

Includes the Directors. the Vice President 8< Secretary, and Board staff. 

3.4. Daily Expenses 

Actual expenses incurred by the Traveler on a daily basis while in a travel 

status. Allowable Daily Expenses may include the Travelers meals and 

Incidentals, Transportation, lodging (including internet connectivity fees, 

buSiness center fees, and related expenses), and parking. 

3.5. DomestiC Trips 

Trips taken within the continental (contiguous) United States (excludes 

Alaska, Hawaii, and U.S. Territories), 

3.6. Expense Reimbursement Request 

The Expense Reimbursement Request is the Traveler's statement to the 

Airports Authority of costs incurred on behalf of the Airports Authority. 

The Board Office and non-employees (such as Job candidates, external 

procurement panel members, etc.) submit the Expense Reimbursement 

Request using the Farm AC-13, which is available on Uvelink, under MA-20 

(Finance), in the Finance Forms folder and in the warehouse at each airport. 

The Vice President & Secretary shall transmit all documentation to Accounts 

Payable for the Board Office, Employees submit this form electronicelly 

through the Oracle EBS system using the appropriate MWAA Employee 

Expense Entry template (i-Expense)_ 

3.7. Incidentals 

A Daily Expense that includes: fees and tips given to porters, baggage 

carriers, hotel staff, and staff an ships. 

Metropolitan Washington Airports Authority, PoIiCi';s~i1dprocedures, Office of Finance 
187 


Insert offset folio 152 here 76706.152

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Topic No: 

Updated: 

Owner: 

Airports Authority-wide, includinQ Directors Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

3.S. International Trips 

Trips taken outside of the continental (contiguous) United States. Trips to 

Hawaii, Alaska, and U.S. Territories are also considered International Trips. 

3.9. Local Travel 

Anyone-day trip less than 250 miles round trip from the Traveler's work 

location that does not require an overnight stay. Local Travel may be via 

personal vehicle, Airports Authority-owned vehicle or public transportation. 

Use of Airports Authority-owned vehicles is encouraged. 

3.10. Mileage Rate 

The per mile amount reimbursed to a Traveler when using his/her privately owned 

owned automobile on official business. Use of a privately owned vehicle is only 

only authorized for Local Travel or as stated in Section 5.6.5 of this Policy. The 

Airports Authority follows the rate set by the IRS. The Mileage Rate is the same 

for Local and non-local Travel. The rate shall be updated as required by the Office 

of Finance and documentation on the current mileage rale is included in 

Attachment 1 -

Mileage Rate 

TO: 

FROM: 

DATE: 

SUBJECT: 

Users at CF. Users at DCA; Users at lAD; Use" 

Wanda Onafuwa, Accounts Payable Manager 

January 1, 2012 

IRS Mileage Rate 

The IRS standard business mileage rate effective Januarv 1,201< 

Please use this rate on ali expense reimbursement requests for tn 

December 31. 2012. 

For all employees the Oracle i-Expense module will reflect the cur 

non-users of i-Expense we have updated the appropriate Expeni* 

forms found in the MA-20 forms folder on Live link. 

Should you have additional questions please contact me at exlen, 

Thank You 

3,11. Personal Expenses 

Expenses not considered necessary to conduct official Airports Authority 

business. Personal Expenses that may not be reimbursed include expenses 

for movie rentals, health club costs, sundries, non-business related Local 

Travel, and alcoholic beverages. 

3.12. Personal Travel 

Any travel not considered official business. 

3.13. Transportation 

The means by which a Traveler gets to and from an authorized destination. 

Transportation may be accomplished by common carrier (e.g. bus, rental 

car, plane, train, or taxi), privately owned vehicle (if using a car service. only 

an amount up to a cab fare for an equivalent trip will be reimbursed) and 

Airports Authority-owned vehicle. Refer to Section 5.6 for Transportation 

Metropolitan Washington Airports Authority, Policies and Procedur;:'s, officeOiFin;;;;Ce·--· ... --·-·-·----S 
188 


Insert offset folio 153 here 76706.153

Topic: 

Function: 

Section: 

Applicabilitv; 

Travel Policy 

General Accounting 

Cash Disbursements 

Alroorts Authority-wide, includino Directors 

guidelines and restrictions. 

3.14. Travel Advance 

Topic No: 

Updated: 

OWner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Funds advanced via Form AC-l0, Trevel Authorization/Advance, to a 

Traveler prior to traveling on the Airports Authority's behalf. Travel 

Authorization/Advance forms are available on Livelink, under MA-20 

(Finance), in the Finance Forms folder and in the warehouse at each Airport. 

3.15. Travel Authorization 

Written approval for a Travaler to leave his/her work location and incur 

expenses on behalf of the Airports Authority. Form AC-i0, Travel 

Authorization/Advance, specifies the dates, places to be visited, department, 

estimated cost for the trip, and other pertinent information. The Trevel 

Authorization/Advance Form shall be completed and approved before the 

trip, in accordance with Section 5.1. Travel Authorization/Advance forms are 

available on Uvelink, under MA-20 (Finance), in the Finance Forms folder 

and in the warehouse at each Airport. 

3.16. Travel Authorization Number 

A sequential number assigned by the Traveler's office that uniquely identHies 

each Travel Authorization. The formal is 4 letters (always MWAA), followed 

by 2 digits designating the fiscal year, followed by 3 digits (the MA routing 

number of the Traveler preceded by zeros if less than 3 digits), followed by a 

3-digit trip number. The four elements should be separated by dashes, e.g., 

MWAA-03-022-010. The person preparing the Travel AuthorizationlAdvance 

Form is responsible for obtaining the 3-digit trip number from the Traveler's 

office. 

3.17. Traveler 

Any person authorized to travel on behalf of the Airports Authority . 

.. 4:0-·---------- .. -- 4:C·GenerafpoUcy·---· .---------- ... --.- -- . --_ .. ----.-

Policy 

4.2. 

The Airports Authority shall pay for or reimburse reasonable actual, 

authorized and properly documented expenses incurred while traveling on 

official business. Expenses include Transportation, Daily Expenses and 

other expenses necessary to complete the purpose of the trip in the most 

expeditious and cost effective manner to the Airports Authority. Expenses 

claimed that are found to be in violation of this Policy shall be rejected by the 

Approving Official. If payment or reimbursement occurred and further review 

by management, accounting staff, or audit determines it was made in error, 

the Traveler shall be required to make restitution. 

Prudent Use of Travel Funds 

Expenses incurred relative to the purpose and location of the travel must be 

reasonable. 

4.3, Trip Summary 

When requested by the ApprOving OffiCial, the Traveler shall provide a 

written summary describing any event attended, key business-related 

activities, and the results and benefits to the Airports Authority. 

4.4. Travel Reporting 

Quarterly, the Airports Authority will deliver to the Board Office a report of ali 

travel activity, which includes the travel of all Directors and employees. 

4.5. Annual Audit 

The Office of Audit shall conduct an annual audit of all travel expenses and 

------------------~-... ---.-- Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 6 
189 


Insert offset folio 154 here 76706.154

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General AccounUng 

Cash Disbursements 

Airports Authority-wide, including Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

present results of the audit to the President and CEO and Executive and 

Governance Committee of the Board. 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 7 
190 


Insert offset folio 155 here 76706.155

Topic: 

Function: 

Section: 

Applicabllltv: 

5.0 

Travel Policy 

General Accounting 

Cash Disbursements 

Airoorts Authority-wide, including Directors 

Topic No: 

Updated: 

Owner: 

Status: 

5.1. Preparing the Travel Authorization/Advance Form 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Travel 

Authorizations 

The Travel Authorization/Advance Form (Attachment 2 - Form AC-10 

(Travel Authorizationl Advance» shall be prepared to provide an estimate of 

the cost of non-Local Travel lor budgetary purposes. 

The Traveler's office must maintain a copy of the Travel 

Authorization/Advance Form until it has been submitted to Finance. 

5.2. Approving Officials for Travel Authorizations 

Ilf the Traveler is ••• Approval must be made In advance Il~ ... Chairman of the Board Vice-Chairman of the Board 

Board Office (other than Chairman of the Board 

Chairman) ._- President and CEO CFO 

("CEO") 

Executive Vice President CEO 

and COO ("COO") 

Vice President CEO or COO -- '"~"--""--

Air Service Planning & Vice President 

Development Staff 

Staff or other Traveler not Domestic T riru;: 

listed above Vice President 

International Trills: 

Vice President, and 

Either the CEO or COO 

Travel Authorization approval by the Chairman of the Board or Vice 

Chairman of the Board shall be applied consistently and shall not be 

unreasonably withheld. 

"--

The Board Office is not required to obtain a Travel Authorization for travel to 

Board and Committee meetings and any function, meeting, or event other 

than conferences for Which the invitation has been extended to all Directors 

or Directors on the same Commutee. If there is a vacancy or extended 

unavailability of an Approving Official on the Board, the Chairman of the 

Board or other Board Officer shall submit a Travel Authorization to the Board 

Secretary for approval. 

5,2.1. Responsibility of Approving Officials for Travel AuthOrizations 

It is the responsibility of the Approving Official to ensure, prior to 

authorizing travel, that the requested travel is reasonable, in compliance 

with this Policy, and that sufficient funds for travel are available in the 

department bUdget 

5.2.2,Appeal of Denied Travel Authorization 

If a travel request for the Board Office is declined, the Traveler may appeal 

the decision to the Executive and Governance Committee. 

5.3. Allowable Costs 

Allowable costs include: round trip mileage to and from the point of common 

carrier Transportation, standard parking (not including valet parking, unless 

valet parking is the only option available), tax.i fare to and from the point of 

common carrier Transportation or work location, shuttle bus fares, common 

carrier Transportation, Daily Expenses, car rental, telephone charges as 

described hereafter, and conference or meeting fees if appropriate. NOTE: 
191 


Insert offset folio 156 here 76706.156

Topic: 

Function: 

Section: 

Applicabllltv: 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authoritv-wide, includinll Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Mileage to or from the airpcrt may not be approved on workdays if the 

Traveler is required to report to work before or after the trip and works at the 

airport at which the flight is departing or arriving. 

5.4. Amending a Travel Authorization/Advance Form 

If travel plans change significantly, an amended Travel 

Authorization/Advance should be prepared. Significant changes are defined 

as changes that either increase or decrease the number of travel days or 

vary the estimated cost by 20 percent or more. 

A Travel Authorization/Advance may be amended by (a) canceling the 

original Autholization and prepaling a new Authorization using a new 

Authorization Number; or (b) amending the existing Authorization and 

initialing the changes; or (c) preparing a new Travel Authorization/Advance 

with the changes using the same number and stamped or marked 

"amended". Under "Remarks: the reason for the modification should be 

explained in detail. The Approving Official shall approve the amended 

Authorization. 

5.5. Business and Personal Travel Combined 

If a Traveler desires to combine a business trip with personal time, the 

Traveler shall indicate that in the appropriate section of the Travel 

Authorization/Advance Form and annotate the dates of personelleave. 

Approval to combine Personal Travel with business travel is at the sole 

discretion of the Approving Official. The Traveler shall reimburse the Airports 

Authority for the difference the Airports Authority would have paid for the 

most direct route to the business destination. Allowable expenses, as 

defined, are only reimbursable for the Traveler for the business portion of the 

trip. 

S.S. Transportation 

If a Traveler wants to use tickets that include weekend days to obtain 

savings on airfare, the Approving Official must concur and specifically note 

this on the Travel Authorization before their purchase. Evidence of the 

savings received from a weekend stay shall be provided in the form of dated 

quotes from the airline, hotel and estimated subsistence for the weekend 

stay versus the weekday airline ticket round trip cost. 

To minimize costs, Travelers are encouraged to book Transportation as 

early as possible. 

5.6.1. Air Travel 

Travelers are required to obtain discount fares to the extent possible and 

purchase economy class tickets. Unrestricted or chengeable tickets are 

allowable. Travelers may upgrade to a different class at their own 

expense. If travel is outside of the continental (contiguous) United States, 

the Board Office may purchase \he next higher class over economy 

without prior approval, unless the next higher upgrade results in first class 

accommodations which must be approved in advance by the ApprOving 

Official. Travelers other than the Boand Office may request advance 

approval from the appropriate Approving Official for the next higher class 

over economy if travel is outside the continental (contiguous) United 

States. Travelers may, with advance approval from the appropriate 

Approving Official, purchase other than economy class when necessary to 

accommodate a medical disability or other special need. Blanket 

Metropolitan Washington Airports Aulh-;;rity, Policies and Procedure;' Office of Finance 9 
192 


Insert offset folio 157 here 76706.157

Topic: 

Function: 

Section: 

ApPlicabilitv: 

Travel Policy 

General Accounting 

Cash Disbursements 

AirPorts Authoritv-wide, including Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

authorization of other than economy class transportation accommodations 

is prohibited; authorizations shall be on an individual trip-by-Irip basis. 

Baggage fees charged by airlines for checked luggage will be reimbursed 

for up to two bags. 

5.6.2. Train Travel 

Travelers are required to purclhase economy class or Acela business class 

tickets for train fares. The appropriate Approving Official may authorize the 

next higher class or Pullman car fares if the trip is greater than 6 hours or 

the travel is overnight Travelers may, with advance approval from the 

appropriate Approving Official, purchase other than economy class when 

necessary to accommodate a medical disability or other special need. 

Blanket authorization of other than economy class transportation 

accornmodations is prohibited; authorizations shall be on an individual tripby-trip basis. 

5.6.3. Car Rental 

Car rental shall be authorized only when local Transportation is not 

practical or would be more expensive. Car rentals, if authorized, are limited 

to intermediate size vehicles. The Approving Official shall annotate the 

justification for use of a rental car in the "Remarks or Special Provisions" 

section on the Travel Authorization/Advance. 

To the extent possible, the Airports Authority encourages Travelers to 

coordinate Transportation services when two or rnore Travelers are 

traveling at the same time to the same destination. Travelers shall not 

utilize the car rental pre-paid gasoline option, 

The Airports Authority maintains insurance for Travelers renting 

automobiles while on official travel. The Airports Aulhortty will not 

reimburse the Loss Damage Waiver (LOW) and Personal Accident 

Insurance (PAl) provisions of a rental car agreement The Traveler shall 

use personal funds to purchase LDW or PAl or provide personal auto 

insurance coverage to cover any Personal Travel. The business portion of 

the rental car expense shall be a ratio of total business days used to total 

days of the rental car contract 

If the Traveler is involved in an accident while traveling on official business, 

he/she shall report the accident to the local authorities, the car rental 

company, their supervisor, or, in the case of a Member of the Board of 

Directors, the Chairman of the Board, and follow the Airports Authorny's 

procedures as outlined in the Risk Management Claims Procedure 

ManuaL 

5.6.4. Private Aircraft 

The use of a non-commercial privately owned aircraft is not authorized. 

5.6.5. Personal Vehicle 

Travelers are not authorized to use their personal vehicle for Airports 

Authority business, except for Local Travel or when authorized by the 

Approving Official. The Traveler's insurance policy for his/her personal 

vehicle shall be the primary policy when that vehicle is used on Airports 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 10 
193 


Insert offset folio 158 here 76706.158

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disoursements 

Airports Authoritv-wide includinQ Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Authority ousiness. The Airports Authority provides coverage for liability in 

excess of the Traveler's policy. 

5.6.6. Travel Routing 

Travel shall be arranged by the route and Transportation mode that is most 

cost effective to the Airports Authority, except when otherwise necessary 

for Air Service Planning & Development purposes and must be authorized 

in advance by the Vice President of Air Service Planning & Development. 

The Traveler shall bear any additional cost incurred as a result of deviation 

from this route for personal reasons. Travelers shall indicate all 

calculations clearly on the Expense Reimbursement Request to support 

the amount claimed. If the Traveler is authorized to use a privately owned 

vehicle, reimbursement Is limited to the lesser of actual expense at the 

current Mileage Rate or the direct route advance purchase ticket. 

5.6.7. Taxis, Shuttle Services and Other Courtesy Transportation 

Transportation expenses in the performance of Airports Authority business 

travel are reimbursable for the usual fare plus tip for use of a taxi, shuttle 

service or other courtesy transportation. 

5.7. Hotel Accommodations 

If traveling to an event and a host hotel is provided at a reasonable rate, 

Travelers should stay at the host hotel unless rooms are sold out at the host 

hotel rate. If rooms are no longer availaole at the host hotel rate, the 

Traveler should make every effort to find a room at a comparable cost. 

If purpose of the travel is for a meeting or event that does not include a host 

hotel, the Traveler shOUld make every effort to find a hotel WITh reasonable 

rates. 

To minimize costs, Travelers are encouraged to book lodging as early as 

possiole. In addition, the lowest possible (government, conference, 

corporate) rates at the selected hotel should be obtained when making hotel 

reservations. Non-standard, premium/deluxe suites or upgrades are 

acceptable only when there is no additional cost to the Airports AuthOrity. 

Travelers may upgrade at their own expense. Travelers should provide their 

credit card information at check in to ensure that they are billed directly for all 

___ . ________ ~~cll~rg~~,.... . ..... _ ......... _. ___ ._ .. __ . ___ . __ ._ .. _._ S.O 6.1. General 

Travel Advances The Board Office and employees may request Travel Advances to cover 

their estimated out-of-pocket expenses while traveling an official business. 

The requested amount of the Travel Advance may not exceed the total cost 

estimate authorized in the Travel Authorization/Advance request. 

6.2. Approval and Submission Requirements 

A Traveler may request a Travel Advance by completing Form AC-10, Travel 

Authorization/Advance Request {Attachment 2 - Form AC-1Q (Travel 

Authorization/ Advance)}, and having it approved by hislher Approving 

Official. To allow suffiCient time to process the request, Travelers are 

encouraged to submit the request at least 10 business days before the start 

of the trip. 

6.3. Payment of Travel Advances 

---:-;-:--:-:-;----:7--:-:--::---::--::-::-:--:-::,--:-----=-:::---:-::0---•... _-----_._-- Metropolitan Washington Airports Aufhority. Policies and Procedures, Office of Finance 11 
194 


Insert offset folio 159 here 76706.159

TOpic: 

Function: 

Section: 

Applicability: 

7.0 

Making 

Reservations 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authority-wide, including Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Generally, Travel Advances will be paid to the Traveler no sooner than 15 

business days before travel commences. 

Travel Advances shall not be issued through the Agent Cashier. 

6.4. Repayment of Travel Advances 

Travel Advances must be settled by completing an Expense Reimbursement 

Request (see Section 9.0). If the amount submitted in the Expense 

Reimbursement Request is less than the amount of the Advance, the 

Traveler must send a personal check payable to MWAA routed to Accounts 

Payable (MA-22B) with the Expense Reimbursement Request Travel 

Advances may also be repaid by returning the original check. 

6.5. Failure to Repay Advances and Potential Payroll Deduction 

The Traveler shall submit an Expense Reimbursement Request within 30 

days after returning from the trip. Any Travel Advance still outstanding 45 

days after returning from the trip shall be referred to the Controller who shall 

notify the Traveler and the Traveler's Vice President that the amount will be 

deducted from his/her next paycheck within 10 days and future requests for 

Travel Advances to the Traveler will be denied. 

The Traveler-mayuse the Airports Authortiytravel agentsor hiS/her personeir----

method of payment. If a Travel Authorization is required as defined in Section 5.2, 

the Traveler MUST obtain the Approving Official's signature and a Travel 

Authorization number prior to purchasing any tickets. If it is determined a ticket 

was purchased or reservation requiring a deposit was made priorto approval and 

receipt of a Travel Authorization number, the Traveler may have to pay for the 

~ems purchased. 

7.1. Travel Agent 

The Airports Authority has an established contract with a travel agency 

(Attachment 3). The Traveler may use the travel agent to make airline or 

train reservations. Hotel reservations, and lor car rental reservations (if 

authorized) may be made by the travel agent if a personal data sheet 

completed by the Traveler is on file with the agent. When making 

reservations with the Airports Authority's travel agent, Travelers should be as 

flexible as possible on their departure and retum dates to take advantage of 

discount fares. The travel agent charges a fee for the service, which is part 

of the total cost of the ticket. 

In the event of a national security incident, the travel agent will be able to 

provide vital information on the Traveler's itinerary andlor current locetion. 

7.1.1. Problems with Ticketing or the Travel Agent 

The travel agent provides a toll free number to be used during the travel 

period. The Airports Authority's travel agent and Airports Authority staff 

making the arrangements can easily remedy most ticketing reservation 

problems. If a problem cannot be resolved with the travel agent, the details 

should be reported to Accounts Payable, MA-22B. 

7.2. Using the Internet or Contacting Carriers Directly 

Travelers may use the Intemet or contact carriers directly in an effort to 

obtain better prices. The Traveler is expected to use/obtain discount fares \0 

the extent possible and purchase only economy class tickets. 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 12 
195 


Insert offset folio 160 here 76706.160

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authority-wide, including Directors 

Topic: No: 

Updated: 

Owner: 

Status: 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Fin~nce 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

13 
196 


Insert offset folio 161 here 76706.161

Topic: 

Function: 

Section: 

ADDlicabllitv: 

8.0 

Local Travel 

9.0 

Travel Policy 

General Accounting 

Cash Disbursements 

Airoorts Authority-wide, including Directors 

TOpic No: 

Updated: 

Owner: 

Status: 

8.1. Reimbursable Expense for Local Travel 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Reimbursable expenses for Local Travel while on Airports Authority business 

include mifeage, standard parking (not including valet parking, unless valet 

parking is the only option available. public transit (Metrorail). and tolls. 

Accounts Payable shall reimburse expenses incurred during Local Travel 

upon receipt of an approved Form AC-13, Expense Reimbursement Request 

(AttachmenI4). Local Travel reimbursements may be signed by the 

Department Manager or designated official. 

Only Travelers on official Airports Aulhority business on their regular day off 

shall be reimbursed for meals during normal working hours. 

Mileage to and from the workplace on a regularly SCheduled day off is not 

reimbursable if an employee is reporting for work to perform his/her regular 

duties. Union employees shall refer to their current executed agreement with 

the Airports Authority. 

8.2. Local Travel From Home Versus Work 

If Local Travel 10 a meeting or training is from home rather than work on a 

normal business day. the normal commuting expenses to and from work 

shall be deducted from the claim. 

8.3. Airports Authority-Sponsored Activities and Events 

Travelers shall not be reimbursed for Local Travel expenses or meals 

incurred while participating in Airports Authority-sponsored activities and 

events for which attendance is not mandatory. 

Expense 

Reimbursements 

-g.1:' -CompletfngtheExpenseReiinbursement Req'uest ' 

9.1.1. General Guidelines 

The requestor must complete an Expense Reimbursement Request to 

request reimbursement of travel expenses. Expense Reimbursement 

Requests must be typed and signed by the requestor or submitted 

electronically through the i.Expense system. The address used on the 

form should be the requestor's preferred check mailing address or noted 

electronic funds transfer for direct deposit. The accounting code on the 

bottom of the form must be the same as that on the Travel Authorization. 

9.1.2. Receipts 

Requestors shall maintain all receipts related to travel on Airports Authority 

business. If submitting the Expense Reimbursement Request electronically 

through the i-Expense system, receipts must be submitted electronically 

and must be legible. Those not required to submitthe Expense 

Reimbursement Request electronically must attach original receipts to the 

Expense Reimbursement Request and forward them to Accounts Payable, 

MA-22B. 

Detailed receipts are required for all expenses in excess of $25.00. For a 

credit card purchase, the signature page. as well as the detail of the 

purchase, are required. The requestor shall provide receipts for roomihotel 

meals that show total daily meal expenses of more than $25.00 per day. 

(Hotels wUI provide this receipt upon request.) 

The original itinerary and receipt for airfare shall be provided to document 

the travel. It is important that the employee's name. method of payment, 

date, time, airline flight numbers and applicable changes are clearly 

evident from the documentation provided, 

Metropolitan Washington Airports AuthOrlty, Policies and Procedures, Office of Fina;;Ce---~--- 14 
197 


Insert offset folio 162 here 76706.162

TOpic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authority-wide, including Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Requestors may submit a per diem claim up to $25.00 without receipts for 

total daily meal and Incidentals expenses (including applicable taxes and 

tips). Reimbursement requests for meals and Incidentals totaling more 

than the allotted $25.00 per diem require detailed receipts. 

Travelers shall be reimbursed for the actual cost of lodging for the 

business portion of the trip. The Traveler's lodging receipt must show each 

night registered. A lump sum billing, covering a number of days, is not 

acceptable. Online bookings may preclude dally charges from shOWing on 

the hotel receipt, however in this event, the Traveler must obtain evidence 

from the hotel indicating dates of stay. Travelers are discouraged from 

pre-payment lodging expenses unless clearly documented significant 

savings is evidenced in the Travel Authorization/Advance and approved in 

advance by Approving OfficiaL The Traveler may claim Daily Expenses for 

the business portion of the trip only. 

Receipts for gasoline purchases for a rental car are required regardless of 

cost 

9.1.3, Oaily Expenses for Meals and Incidentals 

Daily Expenses for meals (including applicable taxes and tips) and 

Incidentals should be reasonable and must not exceed the authorized limit, 

as defined in Attachment 5. The Office of Finance shall adjust this limit to 

remain consistent with federal travel policy. 

9.1.4. Allowed Expenses for Travel 

Tips in excess of the following amounts may be denied: 

$2.00 per incident for baggage handlers. porters, shuttle drivers 

20 percent of bill for meals 

20 percent of trip charge for taxis 

A claim for any expense involving tips will constitute a certification on the 

part of the requestor submitting the claim that those amounts were actually 

given to the service provider. 

Dry cleaning and laundry expenses are allowed only for trips exceeding six 

(6) nights and seven (7) days. Rental cars are allowed only if approved on 

the Travel Authorization/Advance Form. Gasoline purchases incurred while 

traveling on business purposes shall be reimbursed only with receipts, 

regardless of cost. Work-related phone calls (e.g., to the office, voicemail, 

or other necessary business calls) as well as reasonable personal phone 

calls shall be reimbursed. 

Meals provided in the prepaid cost of activities will not be reimbursed if the 

requestor chooses to obtain his/her meals elsewhere. Exceptions may be 

granted by the Approving Official. 

Mileage is reimbursable to and from the destination at the Mileage Rate set by the 

set by the IRS per mile traveled for business. See 

Attachment 1 - TO: Usars at CF, Users at DCA; Users at lAD; User! 

Mileage Rate FROM: 

DATE: 

Wanda Onafuwa, Accounts Payable Manager 

January 1, 2012 

Metropolitan Washington Airports Authority, Policies and Procedures;Office of Finance 15 
198 


Insert offset folio 163 here 76706.163

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authority-wide, includinQ Directors 

Topic No: 

Updated: 

Owner; 

Status: 

SUBJECT: IRS Mileage Rate 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

The IRS standard business mileage rate effective January 1, 20t2 is 55.5 cents p 

Please use this rate on all expense reimbursement requests for travel beginning J 

December 31, 2012. 

For all employees the Oracle i,Expense module will reflect the current mileage rat 

non-users of i-Expense we have updated the approprtate Expense Reimbursemer 

forms found in the MA-20 forms folder on live link, 

Should you have additional questions please contact me at extension 71201, 

Thank You. 

9,1,5. Personal Expenses 

Personal Expenses are not reimbursable. 

9.2. Approving Officials for Expense Reimbursement Requests 

1 If the requestor is ••• 1 Approval must be made by ... 

1 Chairman of the Board 1 Vice-Chairman of the Board 

, Board Office (other than i Chairman of the Board 

, Chairman) 

CEO or COO , CFO or Designee 

Vice President i CEO or COO 

Staff or other requestor I Vice President or Designee 

not listed above 

Expense Reimbursement Request approval by the Chairman of the Board or 

Vice Chairman of the Board shall be applied consistently and shall no! be 

unreasonably withheld. 

If there is a vacancy or extended unavailability of an Approving Official on 

the Board, the Chairman of the Board or other Board Officer shall submit an 

Expense Reimbursement Request to the Board Secretary for approval. 

9.3. Currency Conversion 

The Airports Authority will reimburse for out-of-country expenses for 

approved international travel on the basiS of credit card statements and 

receipts, including currency conversion fees and credft card foreign 

exchange fees, for business-related transactions. The reimbursement rate is 

based on the exchange rate used by the Traveler's credit card company in 

calculating its "local currency" payment. The use of Automated Teller 

Machines (ATMs) is encouraged to minimize these fees. 

9.4. Submission Requirements 

The Board Office and non-employees (such as job candidates, external 

procurement panel members, etc,) submit the approved Expense 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 16 
199 


Insert offset folio 164 here 76706.164

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authoritv-wide, includino Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Reimbursement Request using the Form AC-13 (Attachment 4), which is 

aveileble on Uvelink, under MA-20 (Finance), in the Finance Forms folder 

and in the warehouse of each airport. The Form must be submitted to 

Accounts Payable (MA-22B) within 30 days after completion of the trip. If a 

Travel Authorization/Advance is required, a copy should be submitted with 

the Expense Reimbursement Request. 

Employees must submit Expense Reimbursement Requests electronically 

through the i-Expense system within 30 days after completion of the trip. If a 

Travel Authorization/Advance is required, a copy should be submitted with 

the Expense Reimbursement Request. Upon appropriate approvals, the 

electronic Expense Reimbursement Request will be routed to Accounts 

Payable. 

9.4.1. Cancellation With Charges Incurred 

If a trip is cancelled and charges were incurred (e.g., airfare or hotel 

reservations), an Expense Reimbursement Request shall be prepared and 

approved by the Approving OfficiaL The Traveler shall provide a brief 

written explanation for the cancellation, submit the Expense 

Reimbursement Request with a copy of the Travel Authorization/Advance 

Form clearly marked "CANCELED," and return any Advance money 

received to Accounts Payable. MA-22B, within 10 business days of the 

cancellation. 

---------- Metropolitan Washington Airports Authortty, Policies and Procedures, Office of Finance 17 
200 


Insert offset folio 165 here 76706.165

Topic: 

Function: 

Section: 

Travel Policy 

General Accounting 

Cash Disbursements 

Topic No: 

Updated: 

Owner: 

To Be Determined 

September 5, 2012 

Office of Finance 

Applicabilltv: Airports Authoritv-wide, includine Directors Status: FINAL 

10.0 

Miscellaneous 

1"1:0---- ... ----------

Exceptions to the 

Policy 

12.0 

Questions 

13.0 

Effective Date 

14.0 

Approvals 

10.1. Travel Expenses Paid by Outside Parties 

In circumstances when an employee's expenses are eligible for 

reimbursement by a third party, the employee should submit the Travel 

Authorization to Accounts Payable (MA-22B) and note on the Travel 

Authorization the third party reimbursement, including the name and billing 

contact for the third party. After submitting the Expense Reimbursement 

Request, Accounts Payable will submit an invoice to the third party directing 

reimbursement be made directly to the Airports Authority. 

10.2. Personal Injury Accidents 

A Traveler has the responsibility to seek medical attention if he/she is injured 

while traveling on official business and to notify hislher immediate supervisor 

as soon as possible. The WorKers' Compensation insurance company shall 

determine if the injury will be compensable under the Virginia Workers' 

Compensation Act. The Traveler should follow the Airports Authority's 

internal reporting procedures as outlined in the Risk Management Claims 

Procedure Manual. 

A personal accident policy is also In effect For Foreign Travelers. The Traveler 

shall contact the Risk Management Department prior to foreign travel for 

current policy information. 

Exceptions to this Policy shall be explained indetaU-Onthe' Expense----

Reimbursement Request. When circumstances arise that are not directly covered 

In these written procedures, Travelers are expected to use sound judgment and 

provide detailed documentation on the reimbursement request in support of 

variances. 

Any exception to this policy requested by the Board Office must be approved in 

writing by the Chairman of the Board of Directors. If denied, the decision may be 

appealed to the Executive and Governance Committee. 

Any exception to this policy requested by staff must be approved in writing by the 

CEO or COO. 

-Questions regarding ifiis-Poiicy shoulcfiJe (j'lrected- iOAccourits-Payabre-;MA~22B: 

on (703)417-8722. 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 18 
201 


Insert offset folio 166 here 76706.166

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursements 

Airports Authoritv-wide, includinQ Directors 

Topic No: 

Updated: 

Owner: 

Status: 

To Be Determined 

September 5, 2012 

Office of Finance 

FINAL 

Attachment 1 -

Mileage Rate 

TO: 

FROM: 

Users at CF, Users at DCA; Users at lAD; Users at PSD; Users at DeE 

Wanda Onafuwa, Accounts Payable Manager 

DATE: January 1, 2012 

SUBJECT: IRS Mileage Rate 

The IRS standard business mileage rete effective January 1,2012 is 55,5 cents per mile. 

Please uSe this rate on all expense reimbursement requests for travel beginning January 1-

December 31, 2012. 

For ail employees the Oracle i-Expense module will reflect the current mileage rate. For 

non-users of i-Expense we have updated the appropriate Expense Reimbursement Request 

forms found In the MA·20 forms folder on Live Link. 

Should you have additional questions please contact me at extenSion 71201. 

Thank You. 

Metropontan Washington Airports Authority. Policies and Procedures, Office of Finance 19 
202 


Insert offset folio 167 here 76706.167

Toplc: 

Function: 

Section: 

Travel Policy 

General Accounling 

Cash Disbursements 

TopiC No: 

Updated: 

OWner: 

Applicability: Airports Authority-wide, including Directors Status: 

Attachment 2 -

Form AC-10 

(Travel 

Authorizationl 

Advance) 

_pdI!!!!W!!!!I!!gIonAboI1o_rily 

lRAWi. AIJIIIORIZA 'IlOIaDVANCE 

-

L.Po __ ......... 

L CHECK 

L. "CIi 

To: 

__ .... __ c •• "' __ l T_ Lli!1S! .... _ ..... _ 'Ohsf ......... __ 

lOW» 

To Be Determined 

September 5,2012 

Office of Finance 

FINAL 

'--_.-

1, .~. TJ4MlIIoris .. JDbyedhDdmd.pemn .... ash'lil:::r!llldSlMt ... 

Attachment 3-

Airports 

Authority Travel 

Agent 

Globetrotter Travel ManagementServices, Inc. 

Phone: (301) 570-0800 (Press 1 for Reservations) 

travel@globetrotlermgmt.com 

------.---------.--::------:-----.--.~----.. --.-.---... ~-~. 

Metropolitan Washington Airports Authority, Policies and Procedures, Office of Finance 20 
203 


Insert offset folio 168 here 76706.168

Topic: 

Function: 

Section: 

Applicability: 

Travel Policy 

General Accounting 

Cash Disbursem ents 

Airports Authority-wide, including Directors 

ToPic No: 

Updated: 

Owner: 

Status: 

Attachment 4 -

Form AC·12 

(Expense 

Reimbursement 

Request) 

Metropolitan Washington Airports Authority 

EXPENSE REIMBURSEMENT REQUEST 2012 

To Be Determined 

September 5,2012 

Office of Finance 

FINAL 

Attachment I) -

Dally Meals & 

Incidentals Limit 

Daily Expenses for meals (including appliCable taxes and iips)al'ldlncldentals 

must not exceed the authorized limit, which is based on §301-11.18 01 the Federal 

Travel Regulation. 

As of August 31,2012, the authorized limit for daily meals and incidentals is $71. 

~~etropoman washin9i~n Airports Authority, PoliCies andPrOcedur"s, Office of Finance 21 
204 


Insert offset folio 169 here 76706.169

Enclosure G 

Airports Authority Bylaws 

(October 2012) 
205 


Insert offset folio 170 here 76706.170

METROPOLITAN WASHIt:i,GTON AIRPORTS AUTHORITY 

BYLAWS 

ARTICLE I 

Organization ofthe Authority 

Section 1. Board of Directors. Created on October 18, 1986, by Chapter 

598 ofthe 1985 Virginia Acts of Assembly, as amended, and the Regional Airports 

Authority Act of 1985, D.C. Law 6-67, as amended, the Metropolitan Washington 

Airports Authority consists of seventeen Members. All powers, rights and duties 

of the Authority are thus conferred upon its Members, who are collectively known 

as "the Board of Directors," hereinafter referred to as "the Board." Individual 

Members ofthe Authority arc known as "Directors." 

a. There are seventeen Directors: seven appointed by the Governor of 

the Commonwealth of Virginia, four appointed by the Mayor of the District of 

Columbia, three appointed by the Governor of the State of Maryland, and three 

appointed by the President of the United States. 

b. Directors 0) may not hold elective or full time, non-career appointive public office; (ii) serve without compensation, except that the Directors are 

entitled to reimbursement of their expenses incurred in attendance at meetings of 

the Authority or while otherwise engaged in the discharge of their duties, and 

(iii) reside within the Washington Standard Metropolitan Statistical Area, except 

that the Directors appointed by the President of the United States are not required 

to reside in that area, and must be registered voters of states other than Maryland, 

Virginia and the District of Co lumbia 

c. Appointments to the Authority are for a period of six years, except 

as otherwise provided by law for initial appointments. 

d. Each Director may be removed or suspended from office only for 

cause, and in accordance with the laws of the jurisdiction from which he or she is 

appointed. 

1 AViation Circle, Washington. DC 20001·6000 • www.mwaa.com 
206 


Insert offset folio 171 here 76706.171

e. No Director may serve after the expiration of his or her term, 

unless reappointed. Any person appointed to fill a vacancy serves for the unexpired term. Each Director is eligible for reappointment for one additional term. 

Section 2. Officers. The Board shall annually elect from its membership 

a Chairman and Vice-Chairman and shall elect from its mcmbership, or elect and 

employ from its staff, a Secretary and a Treasurer or a Secretary/Treasurer, and 

prescribe the powers and duties of each otlicer. It may appoint from the staff an 

Assistant Secrctary and an Assistant Trea~urer, or an Assistant Seerctaryrrreasurer, who shall, in addition to other duties, discharge such functions of the Secretary and Treasurer, respectively, as may be directed by the Board. The Chairman 

and the Vice-Chairman may use any reasonable titles of their own choosing, such 

as Chair, ChaiIwoman, or Chairperson. 

Section 3. Term of Office. The telm for each elected office is one year, 

commencing January I of the year following thc annual meeting. All officers, as 

long as they continue to serve as a Director or staff, hold office until the next 

January 1, or until their successors are elected or appointed and qualified, whichever may be the later. 

ARTICLE II 

Duties of the Board 

The Board shall establish policy and provide direction to the President and 

Chief Executive Otricer to acquire, operate, maintain, develop, promote and 

protect Ronald Reagan Washington National and Washington Dulles International 

Airports, including the Dulles Corridor, with its Dulles Toll Road and Dulles 

Metrorail Extension. The Board shall provide world class air transpOliation 

facilities with timely improvements at both Airports. The Board shall see that the 

laws pertaining to the purposes and functions of the Authority are faithfully 

observed and executed. In carrying out their duties on the Board, Directors 

appointed by the President shall ensure that adequate consideration is given to the 

national interest. The Board will employ staff, consistent with Article V, and adopt 

appropriate procedures to carry out these duties. 

2 
207 


Insert offset folio 172 here 76706.172

ARTICLE III 

Powers and Duties of the Officers of the Board 

Section t. The Chairman. The Chainnan is the first among equals and is 

dedicated to advancing the work of the Board and fostering common ground and 

consensus to move the Board's work forward in support of the Authority's 

mission. The Chairman is accountable to the Board, and serves as liaison between 

the Board and the Chief Executive Otlicer. 

The Chairman presides at all meetings of the Board; establishes and appoints all 

Committees and the Chairmen thereof; determines the jurisdiction of all Commi ttees; serves as an ex officio member of all Committees; executes documents on 

behalf ofthe Authority as prescribed by the Board; and perfOlms such other duties 

as the Board may from time to time direct. 

Section 2. The Vice-Chairman. The Vice-Chairman perfomls the duties 

and has the powers of the Chailman during the absence or incapacity of the 

Chairman from any cause. A certification by any seven Directors as to such 

absence or incapacity from any regular or special meeting is conclusive evidence 

thereof. Upon the resignation or death of the Chairman, the Vice-Chairman 

automatically becomes the Chairman for the unexpired term. 

Section 3. The Secretary. The Secretary is the custodian of all records 

and of the Seal of the Authority and keeps accurate minutes ofthe meetings of the 

Board and its Committees. The Secretary has the authority to cause copies to be 

made of all minutes and other records and documents of the Authority and to 

certity under the official seal of the Authority that such copies are true copies. The 

Secretary aflixes the Seal of the Authority to legal instruments and documents as 

required. The Secretary gives notice of all meetings of the Authority as required 

by law or by these Bylaws and distributes the agenda and related materials not less 

than 48 hours before the regular meetings of the Board. The Secretary is responsible for assuring that the public is fully informed as to the time, place, and agenda 

of all Board and Committee Meetings, and that records of these meeting are readily 

available. The Secretary, if a Director, becomes, ex officio, the Acting Chainnan 

in the event the offices of the Chairman and Vice-Chairman are both vacant, or in 

the event that the Chairman and the Vice-Chairman are both unable to perfoml 

their duties by reason of absence or incapacity. 

3 
208 


Insert offset folio 173 here 76706.173

Section 4. The Treasurer. Except as may be required in any instrument 

under which any revenue or other bonds are issued by the Authority, the Treasurer 

shall have the care and custody of and shaH bc responsible for all monies of the 

Authority from whatever sources received. The Treasurer shall be responsible for 

the deposit of such monies in the name of the Authority in a bank or banks 

approved by the Board and shall be responsible for disbursements of such funds 

for purposes authorized or intended by the Board. The Treasurer, and any Assistant Treasurer, shall be bonded in an amount and with surety acceptable to the 

Board and shall make periodic accounting for all such funds as determined by the 

Board. The Treasurer's books shall be available for inspection by any Director 

during business hours. 

Section 5. Other Duties. In addition to the duties and powers herein set 

forth, the Chairman, the Vice Chainnan, the Secretary and the Treasurer have the 

duties and powers commonly incident to their offices and such duties as may be 

imposed by law or as the Authority may from time to time by resolution specify. 

ARTICLE IV 

Committees 

Section 1. Committee Roster. The Chairman shall prepare a list of 

Committees, their members, and their jurisdiction. 

Section 2. Committee Meetings. Each Committee Chairman schedules the 

Committee's meetings and sets the agenda. Except for the Audit Committee, all 

Committee meetings are normally held in public session. 

Section 3. Subcommittees. Each Committee Chairman may establish 

special or ad hoc subcommittees that report to the full Committee, with the 

concurrence of the Chailman. 

Section 4. Attendance. Any Director may attend and participate in any 

Committee meeting, but only members of the Committee count towards a quorum 

and may vote. 

4 
209 


Insert offset folio 174 here 76706.174

ARTICLE V 

Chief Executive Officer, and Other Employees 

Section 1. Chief Executive Officer. The Board shall appoint a President 

and Chief Executive Officer. He or she shalt except as othetwise provided by the 

Board, be in charge of managemcnt and operations of the A irports and any other 

activities of the Authority as prescribed by the Board. The President and Chief 

Executive Officer shall sign documents on behalf of the Authority as prescribed by 

the Board. The President and Chief Executive Officer shall discharge his or her 

duties in accordance with delegations of authority, and othetwise as directed by the 

Board. 

Section 2. Chief Operating Officer. The Board shall appoint, upon the 

recommendation of thc President and Chief Executive Officer, an Executive Vice 

President and Chief Operating Officer, who shall be initially responsible for the 

operational activities of the Authority, repOiting to and exercising authority 

delcgated to him or her by the President and Chief Executive Officer. 

Section 3. Employees. The President and Chief Executive Officer shall 

staff the Authority in accordance with a plan approved by the Board. All selections for managerial positions reporting directly to the President and Chief Executive Officer and the Executive Vice President and Chief Operating Ofticer are 

sl1~iect to approval by the Board. 

ARTICLE VI 

Offices, Books and Records 

Section 1. Offices. The Board shall maintain the principal office of the 

Authority at or near either Ronald Reagan Washington National AirpOli or 

Washington Dulles International Airport. 

Section 2. Books and Records. Except as may be otherwise required or 

permitted by resolution of the Board, or as the business of the Authority may from 

time to time require, all of the books and records of the Authority shall be kept at 

its principal office. Such books and records shall be available during ordinary 

5 
210 


Insert offset folio 175 here 76706.175

business hours for inspection by any member ofthe public, in accordance with the 

Authority's Freedom ofInformation Policy. 

Section 3. Minutes. All approved minutes of Board or Committee 

meetings shall be open to public inspection during ordinary business hours. 

Section 4. Documents Posted on the Authority Website. The Secretary 

shall post the following documents on the Authority website, with links shown at 

http://mwaa.comlboardmembers.htm: 

a. Schedules of upcoming Board and Committee Meetings, for at 

least six months 

b. Approved Minutes of Board and Committee Meetings 

c. The Roster of Committees, their members, and jurisdiction 

d. The Bylaws 

e. The Code of Ethical Responsibilities [or Members of the Board of 

Directors 

f. Schedules, Agendas and non-privileged documents prepared for 

the next meetings, after they have been provided to the Directors 

ARTlCLE VII 

Meetings oftbe Board 

Section L Meetings Open to the Public. All meetings of the Board and 

its Committees arc open to the public, except during executive sessions. 

Section 2. Regular Meetings. A regular meeting of the Board shall be 

held at the principal office of the Authority on the third Wednesday of every 

month. When such day is a legal holiday or for any other reason inappropriate as a 

meeting day, the regular meeting shall be held on such other day as may be 

determined by the Chairman. The Secretary shall provide notice of a rescheduled 

meeting alleast one week betore the rescheduled date. 

Section 3. Annual Meeting and Election of Officers. The regular 

meeting held in the month of November in each year is the amlual meeting for the 

election of a Chainnan, Vice-Chairman, Secretary and Treasurer. If the annual 

meeting is omitted, or the Board fails for any reason to elect a Chairman after 

repeated ballots, the election shaH be on the agenda of each subsequent regular or 

6 
211 


Insert offset folio 176 here 76706.176

special meeting until a Chaimwn is elected. If a vacancy occurs in any of the four 

offices, and is not filled under other provisions of these Bylaws, after appropriate 

notice the Board may at a subsequent meeting elect a successor to complete any 

unexpired telm. 

Section 4. Special Meetings. Special meetings may be called at any time 

by the Chairman. Upon receipt of a written request for a special meeting from any 

seven Directors, the Chairman shall call a meeting. Written notice of each special 

meeting, specifying the time and place of the meeting, and the purpose or purposes 

of thc meeting, shall be given to the Directors by the Secretary. Notice is sutIident if sent by mail at least seventy-two hours in advance of the date and time of 

the meeting or bye-mail or otherwise in writing within twenty-four hnurs before 

the time of the meeting, if givcn to the Directors in person. Fonnal notice to any 

person is not required provided all Directors are present nr those not present have 

waived notice in writing, filed with the records of the meeting, either before or 

after the meeting. 

Section 5. Schedule. While Committee meeting schedules may vary 

because of unpredictable duration, Board Meetings will begin at the advertised 

time. Any Committee meeting running into the Board Meeting time will suspend 

its session until the Board Meeting has been adjourned. Executive sessions, if any, 

shall be scheduled, if possible, before Committee meetings begin or after the last 

Committee meeting ofthe day in order to minimize inconvenience to the public. 

ARTICLE VIII 

Voting 

Section 1. Ouorum. Nine Directors constitute a quorum for the transaction of all business at a regular or special meeting. A majority of the members of a 

Committee, not including the ex officio member, constitutes a quorum for the 

transaction of all Committee business. 

Section 2. Majority Voting. Action by the Board is by a simple majority 

vote of the Directors present and voting except where otherwise provided by the 

Bylaws. Ten affirmative votes are required to approve bond issues, the annual 

budget of the Authority, and the appointment of a President and Chief Executive 

7 
212 


Insert offset folio 177 here 76706.177

Officer. Ten affirmative votes are required to gl'ant exceptions to competitive 

procurement procedures for contracts over $200,000. 

Section 3. Participation by Telepbone. Directors unable to attend a 

meeting may participate by telephone, but may not vote. 

ARTICLE IX 

Transaction of Business 

Section 1. Regular, Special and Committee Meetings. Any business of 

the Authority may be considered at any regular meeting of the Board. Only items 

of business identified in the agenda distributed by the Secretary forty-eight hours 

in advance of the meeting may be acted upon at a regular meeting. Other matters 

may be acted upon if nine or more Directors vote to waive this notice provisioll. 

When notice of a special meeting is sent, only matters specified or described in the 

notice may be considered at the spccial meeting, except that with the unanimous 

consent of the Directors present any other matter may be considered. Business 

within the jurisdiction of a Committee may be considered at any meeting of the 

Committee. Only items of business identified in the agenda distributed by the 

Secretary forty-eight hours in advance of the meeting may be acted upon at a 

Committee meeting. Other matters may be acted upon if a m~iority of the Members of the Committee vote to waive this notice provision. 

Section 2. Order of Business. Unless waived by a vote of seven or more 

Directors, the order of business at a regular meeting of the Board is: 

a. Approval of the minutes of the previous meeting. 

b. Committee Reports. 

c. Reports of Chief Executive Ofticer and staft: 

d. Unfinished business. 

c. New business. 

f. Other business and adjournment. 

8 
213 


Insert offset folio 178 here 76706.178

Section 3. Executive Session. All regular, special and committee meetings of the Board shall be open to the public, except that at any time the presiding 

officer may, without objection, ordcr that the Board or Committee consider a 

matter or matters in the categories described below in executive session closed to 

the public. Before an executive session begins, the presiding officer shall announce the matters to be discussed. At the discretion of the presiding officer, 

others who can contribute to the discussion, including appropriate employees, 

outside counscl and consultants, may attend an executive session, with the understanding that they are honor bound not to divulge what takes place there. Only the 

following items or matters may be considered in the executive session: 

a. Personnel matters such as employment, appointment, assignment, 

promotion, demotion. performance appraisal, discipline, resignation, salaries and 

benefits, and intervicws of Directors, officers, and employees of the Authority, and 

appiicants fur the same. 

b. Personal matters not directly related to the Authority'S busincss in 

order to protect the privacy of individuals. 

c. Existing or prospective contracts, business or legal relationships to 

protect proprietary or confidcntial information of the Authority, any person or 

company; the financial interest of the Authority; or thc negotiating position of the 

Authority. 

d. Financial matters, including the indebtedness of the Authority and 

the invcstment of Authority funds, particularly where competition or negotiation is 

involved. The annual budget may be discussed in exccutive session in its earliest 

stages, but should otherwise be dealt with in open session, From time to time 

certain sections may be considered in executive session, particularly where public 

discussion could compromise the Authority'S relationships with its employees or 

tenant airlines. 

e. Consultation with legal counsel and briefings by staff: consultants 

and/or attorneys, pertaining to actual or potential litigation, pending or proposed 

legislation, compliance with a specific constitutional, statutory or judicially 

imposed requirement, or other legal matters, and discussions of such matters by the 

Board without the presence of counsel, staff, consultants, or attorneys. 

9 
214 


Insert offset folio 179 here 76706.179

f. Discussion of security plans and other law enforcement measures 

for the protection ofthe public from terrorism and aircraft hijacking. 

g. Audit matters. 

Section 4. Actions in Executive Session. No resolution, contract, or 

motion, adopted, passed or agreed to in an executive session, other than a request 

to the staff for information, is effective unless the Board or Committee, at an 

appropriate time following such session, reconvenes in public or open session and 

takes a vote of the Directors on sueh resolution, contract, or motion, and the 

subject of the resolution, contract, or motion is reasonably identified in the open 

session. This shall not be construed to require the Board or Committee to divulge 

information that is proprietary or actions that are not final. 

Section 5. Other Business. After completion of the agenda, the Chairman, Directors, or the President and Chief Executive Officer may, for information 

purposes, place any matter or matters on the agenda or other business that either 

deems to require the attention of the Board. 

Section 6. Procedure. Roberts Rules of Order, as amended, is the 

authority for all matters of procedure not otherwise covered by these Bylaws. A 

point of order as to procedure raised by any Director in the course of a regular, 

special or committee meeting is resolved by a ruling of the Chairman. The vote of 

a majority or the Dircctors present is required to overrule the Chairman. The 

Secretary serves as parliamentarian. 

ARTICLE X 

Directives and Regulations 

Section 1. General. The Board will adopt, amend and repeal as necessary: 1) internal directives and procedures for operating the Airports, including 

delegations of authority, and 2) regulations which may have the force and effect of 

law, pertaining to the use, maintenance and operation ofits facilities and governing 

the conduct of persons and organizations using its facilities. 

Section 2. Regulatory procedure. Unless the Board detennincs that an 

emergency exists by unanimous vote of all Directors present, the Board shall, prior 

10 
215 


Insert offset folio 180 here 76706.180

to the adoption of any regulation or alteration, amendment, or modification 

thereof: 

a. Make such regulation or amendment thereof in convenient fOlm 

available for public inspection in the office of the Authority for at least ten days. 

b. Publish a notice in a newspaper or newspapers of general circulation in the District of Columbia, Montgomery County and Prince George's County, 

Maryland, and in the local political subdivisions of the Commonwealth of Virginia 

where the Authority facilities are located declaring the Authority's intention to 

consider adopting such regulation or amendment thereof and informing the public 

that the Authority will hold a public hearing at which any person may appear and 

be heard for or against the adoption of such regulation or such alteration, amendment, or modification, on a day and at a time to be specified in the notice, after the 

expiration of at least ten days from thc day of the publication thereof; and 

c. Hold the public hearing, or appoint a hearing otIicer to hold a 

public hearing, on the day and at a time specified in such notice or any adjournment thereof, and hear pcrsons appearing for or against such regulation or amendment thereof. 

d. In accordance with the Metropolitan Washington Airports Act of 

1986, adoption by the Board of the regulations of the Federal Aviation Administration that governed the Airports at the time the Airports were transferred to the 

Authority were not subject to this procedure. 

Section 3. Inspection of regulations. The Authority's regulations are 

available for public inspection in the Authority's principal office. 

Section 4. Force and Effect of Law. The Authority'S regulations relating 

to 

a. Air operations and motor vehicle traffic, including, but not limited 

to, motor vehicle speed limits and the location of and payment for public parking; 

b. Access to and use of Authority Facilities, including but not limited 

to solicitation, handbilling, picketing and the conduct of commercial activities; and 

c. Aircraft operation and maintenance; 

11 
216 


Insert offset folio 181 here 76706.181

have the force and effect of law, as do any other regulations of the Authority that 

contain a detennination by the Board that it is necessary to accord the same force 

and effect of law in the public interest; provided, however, that with respect to 

motor vehicle traffic rules and regulations, the Board will obtain the approval of 

the traffIc engineer or comparable official of the local political subdivision in 

which such rules or regulations are to be enforced. 

ARTICLE XI 

Miscellaneo liS 

Section 1. Code of Ethics. The Board shall adopt a code of ethics and 

financial disclosure to assure the integrity of all decisions by the Board and 

employees of the Authority. The code shall provide that each Director and his or 

her immediate families may not hold a substantial financial interest in any enterprise that has or is seeking a contract or agreement with the Airports Authority or 

is an aeronautical, aviation services, or airports services enterprise that otherwise 

has interests that can be directly affected by the Airports Authority. Exceptions 

may be made if the financial interest is fully disclosed to the Board and the 

Director docs not participate in decisions that directly affect such interest 

Section 2. Indemnity. The Authority shall indemnifY each Director and 

Officer against all costs and expenses (including counsel fees) the Director actually 

incurs in conncction with or resulting from any action, suit or proceeding, of 

whatever nature, to which the Director is or shall be made a party by reason of his 

being or having been a Director or Officer of the Authority, provided (I) that the 

Director or Officer conducted him- or herself in good faith and (2) reasonably 

believed that his or her conduct was in the best interest of the Authority. This 

indemnity shall not apply in actions when the Director or Officer is adjudged liable 

to the Authority. 

Section 3. Minority and women-owned business participation. The 

Board shall maintain a policy for providing minority and women-owned business 

participation in the contracts of the Authority, and monitor its implementation. 

12 
217 


Insert offset folio 182 here 76706.182

ARTICLE XII 

Amendments 

These Bylaws may be amended or repealed in whole or in part by resolution 

of the Board adopted by at least ten Directors at any regular meeting or special 

meeting, provided that notice of intention to present such resolution is given to all 

Directors at least two days in advance of the meeting at which the motion to adopt 

such resolution is to be made. Such notice may be given by any Director, or by the 

Secretary at the request of any Directors, and shall specify the subject matter of the 

proposed amendment or repeal. The notice of intention to amend or repeal these 

Bylaws shall include a specific refcrence to the Article subject to the proposed 

amendment or repeal, together with the suggested changes, or a "red line" dratl 

showing existing text and suggested changes. 

13 

Adopted March 4, 1987 

Amended: January 8, 1992; April 1, 

1992; September 6, 2000; January 3, 

2001; June 5, 2002; August 8, 2007; 

April 20. 2011; January 4, 2012; February 15,2012; and October 17,2012. 
218 


Insert offset folio 183 here 76706.183

Enclosure H 

Airports Authority Freedom of Information Policy 

(July 2012) 
219 


Insert offset folio 184 here 76706.184

Freedom of Information Policy 

The Metropolitan Washington AirpOlts Authority is committed to transparency in 

all its operations. From the beginning, it has maintained its own Freedom ofTnformation Policy that continued the disclosure mles in force at the two Airports 

from the enactment of the federal Freedom of Information Act in 1966. All its 

records are available to the public, except those that are not required to be disclosed pursuant to the exemptions set out in Part 3 below. 

Given its commitment to transparency, the Airports Authority encourages anyone 

interested in its activities to seek information informally. This document is designed to a~sist in that process, and is divided into three parts. 

Part 1 identifies records easy to get from the Authority'S website; Part 2 provides 

contacts for answering questions and help in obtaining other records; Part 3 provides a t()rmal Freedom of Information procedure for obtaining Authority records 

that are not readily availablc, and includes standards for the withholding of certain 

types of records. 

Part 1 - Documents Generally Available 

The AirpOlts Authority makes most of its important records rcadily available, principally through thc Authority website, www.mwaa.com. under the "About the Authority", "Business Information" and "News and Publications" tabs. There anyone 

can read and download many records. The following are among those to be tound 

there: 

Board of Directors documents 

(About the Authority lab Board of Directors - Meeting Information): 

• Calendars and Schedulcs 

• Agendas and Papers prepared for Board and Committee Meetings (Minutes 

are included with thc link for each meeting) 

(About the Authority tab - Board of Directors - Reference Materials) 

• Bylaws 

• Committee Membership 

• Committee Jurisdiction 
220 


Insert offset folio 185 here 76706.185

• Travel and Business Expense Guidelines 

• Resolution No. 01-20 - General Delegations and Reservations of Authority 

• The Code of Ethical Responsibilities for Members ofthe Board of Directors 

• The Lease of the Metropolitan Washington Airports between the United 

States and the Metropolitan Washington Airports Authority 

• Provisions of the District of Cohunbia Code establishing, jointly with the 

Commonwealth of Virginia, the Metropolitan Washington Airports Authority 

• Provisions of the Commonwealth of Virginia Code establishing, jointly with 

the District of Columbia, the Metropolitan Washington Airports Authority 

• Provisions ofthe United States Code, authorizing the transfer of Washington 

National and Washington Dulles international Airports to the Metropolitan 

Washington Airports Authority, with conditions. 

• The Freedom of Infonnation Policy 

(About the Authority tab Annual Reports) 

• Annual Reports from 2000 to present 

• Comprehensive Annual Financial Reports from 2000 to present 

Business Information 

(Business Intonnation tab) 

• Contracting Manual and fonns 

• Construction Opportunities 

• Concession Opportunities 

• Equal Opportunity Programs 

(About the Authority tab - Regulations and Policies) 

• Regulations 

• Code of Ethics for Directors 

• Code of Ethics for Employees 

• Airline Use and Lease Agreement 

Other Records 

(About the Authority tab - Financial) 

• The Budget 

• Comprehensive Annual Financial Reports 

2 
221 


Insert offset folio 186 here 76706.186

• Monthly Financial Statements 

• Airline Rates and Charges 

• Master Trust Indenture 

• Official Statements 

Dul!es Rail Documents 

(Link on the home page, under the Dulles Corridor logo; also Dulles - About 

Dulles International Dulles Corridor Information) 

• Historical and current documents, including contracts, for the Dulles Corridor Rail Project 

Part 2 - Contacts 

The Airports Authority maintains its principal corporate offices at I Aviation Circle on Ronald Reagan Washington National Airport. Records are kept there, at the 

airport offices at both Reagan National and Washington Dulles International AirPOlt, and at the Dulles Corridor Metrorail Project oftlce at 1593 Spring Hill Road 

in Vienna. 

To obtain records infonnally, questions or requests can be directed to any ofi1ee in 

the Authority likely to have them. If uncertain which office to call, contact the 

Secretary's office, 703-417-8740, which will refer you to the right office. 

Parl3 - Fonnal Freedom of Information Procedures 

I. Where to file a request - Fonnal Freedom of Information requests for records 

located anywhere within the Authority should be addressed to the Freedom of Infornlation Officer, Office of the Secretary, MA-BD, Metropolitan Washington 

Airports Authority, I Aviation Circle, Suite 210, Washington, D.C. 20001-6000. 

They can also be submitted to [FOI@mwaa.comj. Questions may be directed to 

the e-mail address or to 703-417-8740. 

II. Content of a request Such requests should identifY the records requested or 

set out as clearly as possible their nature, state the fonnat requested (paper or electronic) and provide a telephone number and/or an e-mail address tor clarifying 

communications. 

3 
222 


Insert offset folio 187 here 76706.187

III. Internal processing - The Freedom of Information Officer will assure a copy 

of the request is directed to the office holding the requested records, and will respond to a request as soon as possible, but not later than within two weeks of the 

receipt of the request. The Freedom ofInformation Officer will keep a docket of 

all Freedom of Information requests. 

IV. Requests sent elsewhere - Copies of written FOI requests submitted to offices 

other than the Office of the Secretary will be promptly provided to the Freedom of 

Information Officer. 

V. Response - The Authority's written response shall (a) provide the records requested, (b) explain why more time is required to respond, or (e) deny the release 

of records, in whole or in part, based on the exemptions in paragraph VII below. If 

denied, the withheld records shall be identified, and reasons shall be provided for 

their withholding. Responses may not be sent without the concurrence of the Secretary and appropriate consultation with the General Counsel's Office. 

VI. Appeal If a request is denied in wholc or in part, or not respondcd to within 

two weeks, the requester may appeal to the Chairman of the Legal Committee of 

the Board of Directors. Such an appeal should be clearly identified as a FreeDom 

of In1()Jmation appeal, and addressed to the Secretary of the Authority at the address in paragraph I, above. The Committee Chairman's decision will he tinal. 

VII. Reasons for withholding - Rccords or j>0I1ions of records in the following 

categories of exemptions may be, but are not required to be, withheld from disclosure. Records are rarely withheld in their entirely; whcn an exemption applies to 

only a portion of a requested record, the rest of the record will be released. Any 

decision to withhold must set out the reasons for doing so, based on the exemptions 

stated below: 

A. Personal Privacy. Personnel, payroll and tinancial records containing infOlmation concerning identitiabJe individuals, except that access shall not be denied to the person who is the subject thereof. The name, position and salary of 

Authority employees, however, are public information. 

B. Confidential Business Information. 

(1) Confidential business information of the Authority: records containing 

commercial, financial, or proprietary information which, if disclosed, could harm 

the competitive or negotiating position ofthe Authority; and 

4 
223 


Insert offset folio 188 here 76706.188

(2) Confidential business information provided by others and held by the 

Authority: records containing commercial, financial or proprietary infonnation 

provided from outside the Authority, if the submitter claims a privilege for the infotmation and gives adequatc reasons why protection is necessary, or the information has been identified as exempt in the Authority Contracting Manual. 

(3) Confidential procurement records, such as proposals, offers, bids and 

proposal scoring records, including competitive negotiation proposals, sealed bidding records, cost estimates, and business plans, the withholding of which is specifically addressed in the Authority Contracting ManuaL 

C. Law Enforcement and Security Records. Records compiled for law enforcement and security purposes, but only to the extent that and as long as the production of such records would (1) interfere with investigative or entorcement proceedings; (2) deprive a person of a right to a fair trial or an impartial adjudication; 

(3) constitute an unwarranted invasion of personal privacy; (4) disclose the identity 

of a confidential source and confidential information fllmished only by the confidential source; (5) disclose law enforcement and security techniques and procedures not generally known outside the law enforcement community; (6) cause a 

suspect to flee or evade detection; (7) result in the destruction of evidence; or (8) 

endanger the life or physical safety of an individual. 

D. Privileged Documents. Records subject to a generally recognized privilege, such as the attorney work product privilege and the attomey-client privilege; 

records that would not be available to a person in litigation with the Authority; and 

records with respect to matters addressed by the Board of Directors in Executive 

Session. 

E. Pre-Decisional Documents. Records containing analyses and recommcndations with respect to matters to be decided by the President and Chief Executivc 

Ofticer or the Board of Directors, except to the extent the analyses and/or recommendations are disclosed or otherwise addressed in a tinal decision document 

Documents prepared for the Board of Directors and its committees and not otherwise exempt from disclosure under paragraph VII are normally made available at 

www.mwaa.com before the meeting at which the matters addressed in the documents are to be discussed, but only after they have been provided to the Directors. 

VIII. Other Considerations - Only existing records are subject to release. The Authority does not create new records in response to a Freedom of Information re5 
224 

Æ 


Insert offset folio 189 here 76706.189

quests, including records summarizing data or other information. Only records 

held by the Authority can be released, paper records in its own files or electronic 

records on its own servers; this Policy does not reach records held by vendors, contractors, or other third parties. In addition, personal notes, papers and any other 

records created and maintained by the preparer solely as work papers for personal 

use are not treated as Authority records. 

IX. Fees - Requests for a limited number of readily available records that do not 

require significant staff resources to locate and produce will normally be answered 

without charge. More substantial requests will be assessed fees to cover the costs 

of locating the requested records and in producing and delivering hard or electronic 

copies of the records. A schedule of such fees will be provided to the requester; if 

the projected fees exceed $250, a 50 percent deposit may be required before Authority resources are committed to locating and producing the requested records. 

July 18,2012 

6