UNITED STATES OF AMERICA DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS

IN THE MATTER OF SCHUMAN AVIATION COMPANY LTD, Respondent.Thursday, December 4, 2014 Courtroom 8 FDMS NO. FAA-2013-1080

U.S. District Court House 300 Ala Moana Blvd. Honolulu, Hawaii 1

The above-entitledmatter came on for hearing, pursuant to notice, at 9:04 a.m. BEFORE: THE HONORABLE RICHARD C. GOODWIN, Administrative Law Judge

(202)234-4433 

# RECEIVED DEC 242014 HEARING DOCKET 

## ORIGINAL

NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433APPEARANCES: On Behalf of the Complainant DON BOBERTZ, ESQ. of: Federal Aviation Administration Western-Pacific Region Office of Regional Counsel AWP-7.7 P.O. Box 92007 Los Angeles, CA 90009-2007 (310) 725-3454 don.bobertz®faa.gov On Behalf of the Respondent CHRISTOPHER D. FERRARA, ESQ. 3555 Harding Avenue Suite 2F Honolulu, HI 96816 (808) 522-1660 chris®ferraralawhawaii.com

NEAL R. GROSS 2

(202) 234-4433 COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44333 .(;;**QNI.!Lt:II~** WITNESS DIRECT CROSS REDIRECT RECROSS Joseph Monfort Kyle Bartler Edward Santa Elena Gustav R. Schuman Joseph Monfort (On Rebuttal) Nathan Dickinson

(On Rebuttal) EXHIBITS Administrator: A-1 A-2 A-3 A-4 A-5 A-6 A-7 A-8 A-9 A-10 9 34 60 66 70 77 113 83 131 129 133 146 138 153

(Exhibit A-7 judicial notice taken)

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134

154

MARK RECD

13/14 18/-- 18/20 24/25 24/27 29/30 30/-- 30/32 30/32 30/32

(202)234-44334 1 P-R-0-C-E-E-D-I-N-G-S 2 (9:04a.m.) 3 JUDGE GOODWIN: The case of Schuman 4 Aviation Limited, FAA Docket 2013-1080. 5 Counsel, do you want to identify 6 yourself for the record, please. 7 MR. BOBERTZ: Don Bobertz for the FAA 8 Administrator, Your Honor. 9 JUDGE GOODWIN: Sir. 10 MR. FERRARA: Christopher Ferrara on 11 behalf of Schuman Aviation. 12 JUDGE GOODWIN: Would you spell your 13 last name, please. 14 MR. FERRARA: I'm sorry? 15 JUDGE GOODWIN: Spell your last name, 16 please. 17 MR. FERRARA: F-e-double r-a-r-a. 18 JUDGE GOODWIN: Justbriefly. Normally, 19 my schedule is we'll take a break around 10:30. 20 Another one about noon for lunch, If we go that 21 long, we'll take a break about 2:00, 2:30, and 22 then I try to finish up at 6:30. We should be out

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-44335 1 of the courthouse by 5:00 o'clock as the CSOs 2 typically go on overtime, and I've talked to the 3 clerk, and they just don't have anybody here 4 after 5:00. 5 What I'm going to ask you as we go 6 through the hearing, if the court reporter raises 7 his hand, that's kind of a signal that he needs 8 help spelling something. At a convenient time, 9 just stop and help the court reporter with 10 spelling. 11 From my standpoint, I'm willing to 12 seal parts of the entire record, documents, 13 evidence, the transcript, or anything else, if 14 necessary. Please review your exhibits and make 15 sure -- I don't like to see personal identifying 16 information in the record. That'd be dates of 17 birth, home phone numbers, home addresses, any of 18 that. If there's financial information that's 19 put ln as a part of the record, that may 20 adversely affect your client, feel free to ask me 21 to seal that part of the record. I do this 22 routinely.

(202) 234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234·44336 1 I also carry a large black magic 2 marker. I know that we inadvertently, sometimes, 3 put things in the record, and I'm perfectly 4 willing to redact things. In this environment, my 5 personal feeling is that we don't have any 6 business putting personal information in the 7 record. Everything we do normally goes on the 8 Internet, which means if we inadvertently put a 9 home phone number on there, it's on the Internet 10 for the whole word to see. 11 I've got a hearing disability, so if 12 I ask you to repeat something, don't take it 13 personally. It's just I literally can't hear. 14 The acoustics are such that I'm going 15 to ask you to keep your voice up. In the hearings 16 we had earlier in the week, the reporter had some 17 difficulty hearing parts of it. So stay near a 18 mike or keep your voice up. 19 I'm going to ask for only a digital 20 copy of the transcript. If you want a hard copy, 21 you know, just talk with the court reporter and 22 arrange that.

(202)234·4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C.**20005~3701** (202)**234~4433**7 1 As to any exhibits, I'm notwedded to 2 any particular methodology, just so long as the 3 Respondent and the FAA don't use the same 4 numerations. 5 What I typically do with the exhibit 6 number is I'll put ID, in pencil, above it when 7 it's offered, and when it's introduced, I'll line 8 through that, and put the date. That's a double9 check for me to make sure that that's happened. 10 So when the record comes out, don't, you know, 11 don't wonder where all those markings came from. 12 They typically come from me. 13 Mr. Bobertz, did you want to make an 14 opening statement? 15 MR. BOBERTZ: Yes. Briefly, YourHonor. 16 Thank you. The evidence in this case will show 17 that Schuman Aviation conducted approximately 24 18 round trip commuter flights to an airport for 19 which he lacked authority to conduct commuter 20 operations, and that when FAA inspectors 21 requestedrecords from SchumanAviationregarding 22 the flights, Mr. Schuman initially failed to

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44338 1 comply. The FAA will call aviation safety 2 inspectors Joe Monfort, who conducted the 3 investigation, and Kyle Bartler who accompanied 4 Inspector Monfort during the records request for 5 Mr. Schuman. 6 Thank you, Your Honor. 7 JUDGE GOODWIN: Mr. Ferrara, you want 8 to make an opening now or do you want to reserve? 9 MR. FERRARA: I'll reserve, Your Honor. 10 Thank you. 11 JUDGE GOODWIN: Just so you know, Mr. 12 Ferrara, I tend to be somewhat informal. It is a 13 formal administrati\e hearing. I tend to be a 14 little more informal than I'm sure some of the 15 people in black robes that you've appeared in 16 front of. But so Mr. Bobertz, do you want to call 17 your first witness. 18 MR. BOBERTZ: Yes, Your Honor. The 19 AdministratorcallsAviationSafetyInspectorJoe 20 Monfort. 21 JUDGE GOODWIN: Sir, do you want to 22 approach. Stand and raise your right hand.

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-44339 1 Mr. Bobertz, you gave Mr. Ferrara your 2 exhibit packet, did you not? 3 MR. BOBERTZ: I will do that now. I 4 think it

-- I don't think

-- everything's been, I 5 believe, an item of proof that he's previously 6 seen. Let me get your stack. 7 JUDGE GOODWIN: While you're doing 8 that, I'll swear the witness. Raise your right 9 hand. 10 WHEREUPON, 11 JOSEPH MONFORT 12 WAS CALLED AS A WITNESS AND HAVING FIRST BEEN 13 DULY SWORN, WAS EXAMINED AND TESTIFIED AS 14 FOLLOWS: 15 JUDGE GOODWIN: Please be seated. State 16 your full name and spell your first and last 17 name. 18 THE WITNESS: Yes, sir. My name is 19 JosephMonfort. I spell that J-o-s-e-p-hM-o-n-f20 o-r-t. 21 JUDGE GOODWIN: Counsel. 22 DIRECT EXAMINATION

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1 BY MR. BOBERTZ: 2 Q Thank you, Your Honor. Good morning, 3 Inspector Monfort. Can you please tell me where 4 you're employed. 5 A Yes, sir. I'm employed at the 6 Honolulu Flight Standards District Office. 7 Q And what is your position there? 8 A I'm an aviation safety inspector. 9 Q And how long have you been employed 10 there? 11 A Approximately five and a half years. 12 13 Q Can you briefly describe your job 14 duties. 15 A My duties vary from day to day, but 16 typically I have oversight of general aviation 17 here in the islands of

-- 18 MR. FERRARA: Your Honor, excuse me. 19 Could I have the witness speak a little closer to 20 the mike for me. 21 MR. BOBERTZ: Yes. 22 MR. FERRARA: Thank you.

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1 THE WITNESS: Yes, sir. I'm an 2 inspectorfor the FederalAviationAdministration 3 here in Oahu, and I have oversight of general 4 aviation activities, from accidents to 5 certification. 6 BY MR. BOBERTZ: 7 Q And as part of your duties, in 8 surveillance, do you conduct surveillance of 9 or do your inspection duties include inspection 10 of Schuman Aviation? 11 A At the time, sir, I was the principal 12 operations inspectorfor SchumanAviation, and we 13 routinely conduct surveillance of all 135 14 operations. 15 Q And did you conduct surveillance or 16 inspectionregardingflights around, in September 17 2012? 18 A Yes, sir. I did. 19 Q And can you tell me about that. 20 A Sir, on September 17ch, we were 21 notified in our office that there was commuter 22 operations conducted by Schuman Aviation and the

(202)234-4433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234·443312

1 Kona Airport. I reviewed the files for Mr. 2 Schuman, verified that he did not have the 3 operation specifications, Charlie 070 to conduct 4 commuter operations in to Kona. Me and Kyle went 5 over to Mr. Schuman's office-- 6 Q I'm sorry. You and Kyle 7 A Oh. Kyle Bartler. InspectorBartler 8 Q Okay. 9 A proceeded over to Mr. Schuman's 10 office and we inquired to the fact of those 11 commuter operations. 12 Q Okay. Do you recall how you found out 13 about those commuter operations? 14 A Yes, sir. When I came back from a 15 personal emergency, I was told by Mr. or 16 Inspector Edward Santa Elena, that there was a 17 possibility that Schuman Aviation was conducting 18 commuter operations for Mokulele Airlines into 19 Kona. 20 Q Okay. So then you and Inspector 21 Bartler, you said you went over to Schuman 22 Aviation?

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1 A Yes, sir. We went over in the G-Car 2 that morning, I think around 8:00 o'clock in the 3 morning. 4 Q Okay. And then what happened? 5 A We went into Mr. Schuman's office. We 6 started to talk to him about the commuter 7 operations and he denied doing commuter 8 operations. He said he was doing on-demand 9 charter, and he could do as many as he wanted, as 10 often as he wanted. 11 MR. BOBERTZ: Your Honor, may I 12 approach? 13 JUDGE GOODWIN: Yes. 14 MR. BOBERTZ: I have what'sbeenmarked 15 for identification purposes as Administrator's 16 Exhibit A-1. 17 (Administrator's Exhibit A-1 18 marked for identification) 19 BY MR. BOBERTZ: 20 Q Inspector Monfort, do you recognize 21 that document? 22 A Yes, sir. I do. This is a operations

(202)234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005·3701 (202)234·443314 1 specifications, Charlie 070, that was issued to 2 SchumanAviationas of the date of September 17'h, 3 2012. 4 MR. BOBERTZ: Your Honor, I'd offer 5 Administrator's Exhibit A-1 into evidence. 6 MR. FERRARA: No objection. 7 JUDGE GOODWIN: Administrator'sExhibit 8 A-1 for identification is received into evidence 9 as Administrator's Exhibit A-1. 10 (Administratcr's Exhibit A-1, 11 previously marked for 12 identification, was received in 13 evidence) 14 BY MR. BOBERTZ: 15 Q Inspector Monfort, earlier you 16 mentioned that Schuman didn't have the authority 17 to, in this particular operations specification 18 C070, to fly, I believe you said, to Kona. Can 19 you show me how you reached that conclusion in 20 this document. 21 A Yes. Under operation specification 22 Charlie 070, page two, there's a list of airport

(202)234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443315 1 cities authorized to conduct commuter operations 2 and Kona is not listed on that page. 3 Q Thank you. So let's pick back up at 4 when you and Inspector Bartler went over to 5 Schuman Aviation. So you drove over there and 6 then what happened? 7 A We were sitting infront of his desk, 8 and we mentioned that he could not conduct 9 commuter operations into Kona. He disagreed with 10 us. And then we asked to see his maintenance 11 logs, daily flight logs. At that point in time, 12 Mr. Schuman said, no, I don't think so. 13 Me and Kyle then said: Are you sure 14 that's what you want to do? He says: Yeah, I 15 don't think so, and he backed away from his desk. 16 At that point in time, we got up and we walked 17 out of the office. It was a very short meeting. 18 Q Did you have any conversation about 19 why it was -- you were saying it wasn't okay and 20 he said it was okay, he thought he could do what 21 he was doing? 22 A Mr. Schuman was under the impression

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443316 1 that he can do on-demand operations or charter 2 operations from MokuleleAirlines and he believed 3 that he could do that as often as he liked. 4 Q So then you asked for the records and 5 he said no, and you left? 6 A Pretty much, that's it. Yes, sir. 7 Q And then what happened? 8 A I returned to my office. I talked to 9 my front-line supervisor at the time, which is 10 Charles Cantu, and he told me to contact Don 11 Bobertz because the denial of records was 12 actuallymore grievous than the operationat that 13 time. So I contacted attorney, Mr. Don Bobertz, 14 and he said give him 30 minutes, and after that 15 we're going to look at possibly emergency 16 suspension pending compliance. And two hours 17 later, Mr. Schuman called me, after contacting 18 his lawyer, and he said the records would be made 19 available to us. 20 Q So you did get the 21 eventually? 22 A We did, two hours later.

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 records,

(202) 234-443317

1 Q Okay. You got the

-- you said

-- did 2 you actually get the records two hours later, or 3 did he just say, two hours later, that he would 4 get them to you? 5 A No. That's correct. He said in two 6 hour he called us in two hours and he said 7 he'd make the records available to us. He asked 8 us to come over and get them. 9 Q And then what happened? 10 A I told himplease have them delivered 11 to the office at the soonest possibility. 12 Q Okay. And did you eventually receive 13 those records? 14 A My memory's kind of vague on this, but 15 I believe it was like two days later, it was 16 delivered to the front desk of Honolulu FSDO. 17 MR. BOBERTZ: Your Honor, may I 18 approach. 19 JUDGE GOODWIN: Yes. 20 MR. BOBERTZ: I have what's been marked 21 for identification purposes as Administrator's 22 Exhibit A-2 and A-3.

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1 (Administrator's Exhibits A-2 2 and A-3 were marked for 3 identification) 4 BY MR. BOBERTZ: 5 Q And just briefly, while I'm coming up 6 there, InspectorMonfort, do you recall preparing 7 a written statement regarding your meeting with 8 Mr. Schuman? 9 A Yes, sir. I do. 10 Q Inspector Monfort, I've just handed 11 you what's been marked for identification 12 purposes as Administrator'sExhibitsA-2 andA-3. 13 Starting with Exhibit, what's been marked for 14 identification as Exhibit A-2, do you recognize 15 that document? 16 A I do, sir. 17 Q And what is it? 18 A This is my statement, witness, 19 inspector statement for that date. 20 MR. BOBERTZ: Your Honor, I offer 21 Administrator's Exhibit A-2 into evidence. 22

(202) 234-4433 MR. FERRARA: Your Honor, I do have an

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443319 1 objection as to that document. It's cumulative 2 evidence. He just testifiedas to the events that 3 took place on September 17'h, when he talked with 4 my client. 5 JUDGE GOODWIN: Mr. Bobertz, I'll allow 6 you to use it to refresh recollection or as 7 evidence, but, you know, fairness and the rules 8 would either be that this speaks for itself and 9 that's the evidence, or it's testimony, so 10 MR. BOBERTZ: I understand it's 11 somewhat cumulative, Your Honor, but I think it 12 just goes to corroborate the witness's testimony 13 that he wrote the statement at the time of the 14 event, and it corroborates his testimony today. 15 JUDGE GOODWIN: I will admit it, but 16 I'm going to give it limited weight based on the 17 comments that I previously made. It's self18 serving, self-corroborating in that, and as you 19 said it's cumulative. So it is an administrative 20 hearing. The rules of evidence are somewhat 21 relaxed. It is admissible but the court's not 22 going to give it a great deal of weight, on

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443320

1 either corroboration or anything else. His 2 testimony is the better evidence. 3 BY MR. BOBERTZ: 4 Q Understood, Your Honor. Thank you. 5 Inspector Monfort, now turning to 6 Exhibit A-3, do you recognize this document? 7 A Yes, sir. These are the daily flight 8 logs or run sheets for the Cessna Caravan. 9 MR. BOBERTZ: Your Honor, I move that 10 Exhibit, what's been marked as Administrator's 11 Exhibit A-3 for identification purposes, into 12 evidence. 13 MR. FERRARA: No objection. 14 JUDGE GOODWIN: FAA Exhibit A-3 for 15 identification is received into evidence as A-3. 16 (Administrator's Exhibit A-3, 17 previously marked for 18 identification, was received in 19 evidence) 20 BY MR. BOBERTZ: 21 Q Inspector Monfort, can you please 22 review this document for us and tell us what, how

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443321 1 it's relevant to this investigation you were 2 conducting. 3 A This information is evidence of the 4 actual flights, where they originated to are 5 from and to. These are the actual commuter 6 flights that were conducted for Mokulele by 7 Schuman Aviation with this aircraft. 8 Q And in a little bit more detail, the 9 dates and the routing of the flights. 10 A You want the individual dates that 11 deal with Kona? Or would you like all the 12 Q Just the ones that deal with Kona 13 would be fine. 14 A Okay. 15 Q You know, and just for

-- the dates 16 that deal with Kona, you don't need to do each 17 flight, but just so we understand what this 18 document is telling us. 19 JUDGE GOODWIN: Let's start out by 20 identifying all the

-- Exhibit A-3, the airport 21 code for Kona, so -- 22

(202)234·4433 THE WITNESS: K-0-A.

NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE. N.W WASHINGTON, D.C. 20005-3701 (202) 234-443322 1 JUDGE GOODWIN: I don't have to 2 spend hours on the computer, trying to 3 THE WITNESS: The identification, three 4 letter identification, Your Honor, is K-0-A. And 5 you'll see that there's two flights that day on 6 the page one of eight, and it's got the time 7 periods, the actual aircraft hours, when they 8 took off, when they landed, how much time was 9 accumulated between each flight. And you'll 10 notice that that recurs on multiple pages ln 11 there. Page three of eight, you'll see OGG, KOA, 12 KOA, OGG. OGG is Kahului, Maui. So he's been 13 operating between Kona and Maui. 14 Anything else you 15 MR. BOBERTZ: And was it always the 16 same aircraft? 17 THE WITNESS: Give me one minute. No, 18 sir. It was 687 Mike Alpha and 65 Mike Alpha. 19 There are two different aircraft used ln this 20 operation. 21 MR. BOBERTZ: Okay. Thank you. So you 22 received these record

-- I don't know if you had

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234·443323 1 any other questions regarding this record, Your 2 Honor. 3 JUDGE GOODWIN: Just there's a pilot's 4 signature, which I don't care about, and a 5 certificatenumber. Does that - I forget. Is that 6 certificate, pilot certificatea matter of public 7 knowledge? I know if we had a certificate number 8 for a commercial airline pilot, or an employee 9 number, unless you had access to the database, 10 all you had was a string of numbers. 11 MR. BOBERTZ: I think what was a 12 concernwith pilot certificatenumbers were their 13 Social Security numbers, but I haven't heard the 14 pilot certificate number being a concern. 15 JUDGE GOODWIN: Okay. Well, I'll leave 16 that to you, Mr. Ferrara. If you feel it's a 17 matter of concern with one of your pilots, I'll 18 redact it. Otherwise, we'll just leave it. In 19 other words, I just want to make sure we can't 20 use that going to the FAA database and drill 21 down, and get something they have no reason to 22 have access to. You can let me know at the end of

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443324 1 the hearing. 2 MR. FERRARA: Okay, Your Honor. 3 JUDGE GOODWIN: Counsel. 4 BY MR. BOBERTZ: 5 Q Thankyou, InspectorMonfort. So after 6 you got the records from Schuman Aviation, did 7 you obtain any other records? 8 A Yes, sir. Once we identifiedthat the 9 actual flights to Kona were done from Mokulele, 10 we requested records from Mokulele Airlines, to 11 glve us their published schedule and which 12 flights Schuman flew those published schedules 13 for. 14 MR. BOBERTZ: Your Honor, I have what's 15 been marked for identification purposes as 16 Administrator's Exhibits A-4 and A-5. May I 17 approach. 18 JUDGE GOODWIN: Yes. 19 (Administrator's Exhibits A-4 20 21 22

(202)234-4433 and A-5 were identification) BY MR. BOBERTZ:

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 marked for

(202) 234-443325

1 Q Inspector Monfort, I've handed you 2 what's been marked for identificationpurposes as 3 Administrator's Exhibit A-4 and A-5. 4 Starting with Exhibit A-4, do you 5 recognize that document? 6 A Yes, sir. This is the official letter 7 that we sent to Darryl Grace, the director of 8 operations for Mokulele, requesting the records 9 for the flights that Schuman conducted for 10 Mokulele. 11 MR. BOBERTZ: Your Honor, I offer 12 what's been marked for identificationpurposes as 13 Administrator's Exhibit A-4 into evidence. 14 JUDGE GOODWIN: Mr. Ferrara. 15 MR. FERRARA: No objection, Your Honor. 16 JUDGE GOODWIN: For identification is 17 received into evidence as Exhibit A-4. 18 19 20 21 22

(202) 234-4433 (Administrator's Exhibit A-4, previously marked for identificatio4 was received in evidence) BY MR. BOBERTZ:

NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443326

1 Q And now turning to what's been marked 2 for identification purposes as Administrator's 3 Exhibit A-5, do you recognize that? 4 A Yes, sir. This is the document Darryl 5 Grace provided, showing the actual commuter 6 scheduled airline operations. 7 MR. BOBERTZ: Your Honor, I offer 8 what's been marked for identificationpurposes as 9 Administrator's Exhibit A-5 into evidence. 10 MR. FERRARA: For the record, I realize 11 administrative rules are a little more relaxed 12 than formal court rules, but this is a hearsay 13 document, and it's also cumulative based on the 14 records that we already have in evidence. 15 But for those reasons, I will object. 16 MR. BOBERTZ: Your Honor, this record 17 actually shows the prior record shows the 18 actual flights conducted by Schuman Aviation but 19 does not necessarily tie them to the Mokulele's 20 published flight schedule, and that's what this 21 document does. 22 JUDGE GOODWIN: Well, it has limited

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202)234-443327 1 value. I'll overrule the objection, note the 2 objection for record and consideration, in 3 considering what weight I'll give to it. But A-5 4 for identificationwill be received into evidence 5 as FAA Exhibit A-5. 6 MR. BOBERTZ: Thank you, Your Honor. 7 (Administrator's Exhibit A-5, 8 previously marked for 9 identification, was received in 10 evidence) 11 BY MR. BOBERTZ: 12 Q Inspector Monfort, can you briefly 13 describe what this document shows you and how 14 it's relevant to your investigation. 15 A This is showing that this is scheduled 16 operations, which is the basis for a commuter 17 airline. In other words, a ticket was sold for a 18 certain time, for a certain

-- from a certain 19 airport to a certain place, just like you would 20 go to an airline. So when this operation was 21 conducted on these days, this was a scheduled 22 commuter operation.

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443328 1 It was previously known that that's 2 going to happen on this date, at this time. So 3 you'll see the flights that go between Kona and 4 OGG. These were pre-planned flights by Mokulele, 5 that were conducted by Schuman Aviation. 6 Q So there's kind of two different 7 looking there's the first two pages, and then 8 there's the last three pages. Can you explain, 9 differentiate between what the first two pages 10 are showing, and then the last three pages are 11 showing. 12 A This is the on-time tracking sheet. 13 Q I'm sorry. Canyou be specific. Which 14 lS the 15 A Starting on page four of six, you'll 16 see that these are the actual logs by the flight17 locating system for Mokulele, and that's their 18 estimated time of departures and their estimated 19 time of arrivals, and then with their actual 20 times, it was inputted by an individual, when 21 they landed and when they took off. 22 Q

(202) 234-4433 And I'm sorry. I may have missed it.

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443329 1 And the first two pages? 2 A The first two pages are just the 3 flights conducted by Mokulele

-- or excuse me -- 4 by SchumanAviation for Mokulele, and the pilot's 5 name that conducted those flights from Schuman 6 Aviation. 7 MR. BOBERTZ: Okay. Thank you. 8 Your Honor, I have what's been marked 9 for identification purposes as Administrator's 10 Exhibit A-6 for identification purposes. May I 11 approach. 12 JUDGE GOODWIN: Yes. 13 (Administrator'sExhibitA-6 was 14 marked for identification) 15 BY MR. BOBERTZ: 16 Q Inspector Monfort, do you recognize 17 this document? 18 A Yes. This is email traffic between 19 Schuman, myself, and Inspector Santa Elena. 20 MR. BOBERTZ: Your Honor, I offer 21 what's been marked for identificationpurposes as 22 Administrator's Exhibit A-6 into evidence.

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234-443330 1 MR. FERRARA: No objection. 2 JUDGE GOODWIN: A-6 for identification 3 is received into evidence as A-6. 4 (Administrator's Exhibit A-6, 5 previously marked for 6 identification, was received in 7 evidence) B MR. BOBERTZ: One moment, please, Your 9 Honor. 10 Your Honor, I have what's been marked 11 for identification purposes as Administrator's 12 Exhibits 7, B, 9. 13 JUDGE GOODWIN: I've only got 7. 14 MR. BOBERTZ: Ten and eleven. Yes. I'm 15 sorry. I know. I have a extra copy for you too. 16 I'm sorry. 7, B, 9, and 10. And I'm actually-- 17 they are actually documents that I'm asking the 18 court to take judicial notice of, and I will 19 deliver you a copy here. 20 21 22

(202) 234-4433 (Administrator's Exhibit A-7 through A-10 were marked for identification)

NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443331 1 JUDGE GOODWIN: Mr. Ferrara ,what the 2 court normallydoes with 2150-3, which is A-7 for 3 identification, I routinelytake judicialnotice. 4 The evidentiary thing is it's a matter of public 5 record. It's a document that, you know, fits all 6 the

-- the practical reason is I have drawers 7 full of this order. But anyway, the court will 8 take judicial notice. But I also, when reviewing 9 the record for decision, I always check the 10 Internet to make sure that we're, I'm looking at 11 the copy of the order that relates to the facts 12 of the case. From time to time, it changes. 13 So I'11 take, the court will take 14 judicial notice of A-7 for identification. 15 Now you're offering

-- 16 MR. BOBERTZ: In respect to 17 JUDGE GOODWIN: 8, 9, and 10 appear to 18 be legal interpretations; is that correct? 19 MR. BOBERTZ: Exhibit 8 is a legal 20 interpretation. Exhibits 9 and 10 are excerpts 21 from a Notice of Proposed Rulemaking regarding 22 the regulations in question in this case, and

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE. N.W WASHINGTON, D.C. 20005-3701 (202) 234-443332 1 Exhibit 10 is the, an excerpt from the final rule 2 regarding the regulation at question in this 3 case. 4 JUDGE GOODWIN: With respect to those 5 documents, Mr. Ferrara, what's your positionwith 6 respect to admissibility? 7 MR. FERRARA: No objection. 8 JUDGE GOODWIN: Okay. I would normally 9 take judicial notice, but I think I will probably 10 admit them. It doesn't affect the weight I'm 11 going to give the documents. So I will admit 12 Exhibits, 8, 9, and 10 for identification as FAA 13 Exhibits 8, 9, and 10, respectively. 14 (Administrator'sExhibitA-8, A15 9, and A-10, previously marked 16 for identification, was received 17 in evidence) 18 JUDGE GOODWIN: Mr. Bobertz. 19 MR. BOBERTZ: Thankyou, Your Honor. If 20 I may have just a minute. 21 No further questions, Your Honor. 22 JUDGE GOODWIN: Mr. Ferrara, do you

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202)234-443333 1 want to inquire? Or do you want a minute before 2 you begin? 3 MR. FERRARA: Yes, I have

-- 4 JUDGE GOODWIN: Do you want to take a 5 minute to consult with your client before you 6 start? 7 MR. FERRARA: That'd be good. A small 8 recess. 9 JUDGE GOODWIN: All right. It's 26 10 minutes of. Let's take a recess until 20 minutes 11 of. I'm going to instruct the witness you're 12 not to discuss your testimonywith anybodyduring 13 this recess. At 20 minutes of, if you'll please 14 return to the stand. 15 THE WITNESS: Yes, Your Honor. 16 JUDGE GOODWIN: We'll go off the record 17 for about six minutes. 18 MR. FERRARA: Thank you, Judge. 19 JUDGE GOODWIN: We're off the record. 20 (Whereupon, the above-entitledmatter 21 went off the record at 9:35 a.m. and resumed at 22 9:42a.m.)

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-443334

1 JUDGE GOODWIN: Sir, I'm going to 2 remind you that you're still under oath. 3 Mr. Ferrara. 4 MR. FERRARA: Thank you, Your Honor. 5 CROSS-EXAMINATION 6 BY MR. FERRARA: 7 Q Inspector Monfort, good morning. 8 A Good morning. 9 Q You have all the exhibits in front of 10 you. I'm going to be asking you some questions 11 about some of the Government's exhibits. And you 12 testifiedon direct that you've been with the FAA 13 about five and a half years. Prior to your FAA 14 experience, was your commercial-related aviation 15 experience confined to the military, or 16 A No, sir. I worked for Blue Hawaiian 17 for approximatelyeight months, and I also worked 18 for Evergreen Helicopters for a year. 19 20 21 22 Q And these were tour outfits? A One was a medivac and one was a tour. Q Okay. And did you ever manage or have anything to do with management in those

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W. WASHINGTON. D.C. 20005-3701 (202) 234-443335 1 companies? 2 A No, sir. Not ln the civilian world. I 3 did not. 4 Q So you've got

-- priorto joining the 5 FAA, you have no experience as a 135 operator? 6 A Yes, sir. I worked for Evergreen for 7 one year, and prior to that, eight months for 8 Blue Hawaiian helicopters. 9 Q Okay. I'm sorry. I didn't make myself 10 clear as far as owning a 135 operation, or in 11 management of a 135 operation. You were a line 12 pilot for two different**organi~ations?** 13 A Yes, sir. That's affirmative. 14 Q Okay. Okay. At the time of I 15 believe you testified, on direct, that you were 16 the POI for Schuman Aviation at the time of the 17 events that are alleged to have happened ln the 18 Complaint, and what you just testified to; 19 correct? 20 A Yes, sir. I was. 21 Q Okay. And because of that of course 22 you're familiar with the op specs that were moved

(202) 234-4433 NEAL R. GROSS COURTREPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-443336 1 into evidence under Administrator's No. 1? 2 A Yes, sir. Me and Mr. Schuman amended 3 those op specs about four months earlier,_Charlie 4 070, for him to operate into Lahaina and Lanai. 5 Q Okay. Are you aware of how long Mr. 6 Schuman's organization, Schuman Aviation, was in 7 the commuter business? 8 A Mr. Schuman had been in the commuter 9 business for over a year, a year and a half at 10 the time, and he'd previously amended those op 11 specs. 12 Q And to your knowledge, his commuter 13 experience was fairly well centered on the 14 Molokai runs, between Molokai and Honolulu, 15 Kalaupapa and Honolulu? 16 A Yes, sir. And he was anticipating to 17 operate from Mokulele into Lanai and Lahaina. 18 Q Okay. Now let me refer you to the

-- 19 it's the second page of Administrator's Exhibit 20 1. It has the airports listed where he's 21 authorized to operate. 22 A

(202)234-4433 Yes, sir.

NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443337 1 Q And this was, as you testified on 2 direct, in place at the time of the flights that 3 took place to Kona; correct? 4 A Yes, sir. 5 Q Okay. You testified that you do have 6 experience flying around the Hawaiian Islands; 7 correct? 8 A I've flown around the Hawaiian Islands 9 for 11 years. 10 Q Okay. And as an inspector, I just want 11 to get your opinion on some of these airports. 12 Kalaupapa. How would you rate that as a airport 13 requiring, say, more experience or less 14 experience in the fixed wing business? 15 MR. BOBERTZ: Objection. Relevance. 16 JUDGE GOODWIN: Overruled. 17 THE WITNESS: Kalaupapa's a very small 18 airport that is difficult to fly in, but the same 19 requirements for the commuter operation exist at 20 Kona as they do at Kalaupapa. 21 Q Sure. I understand that. How about 22 Lanai, Lanai City? How would you rate that on a

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443338 1 scale of 1 to 10 as far as difficulties flying 2 into, with weather and 3 A The weather at Lanai is pretty much 4 island weather, the same as we have everywhere. 5 Q Okay. Now as far as the Kona airport's 6 concerned, what's your understanding of how long 7 the runway is, what type of airport is it as far 8 as difficulties, and getting in and out? 9 A Kona'sa single, single runway airport 10 with a very long runway. 11 Q Now just for some background about 12 SchumanAviation. Did they apply for and did they 13 receive an op specs amendment on September 2gch to 14 fly into Kona, to your understanding? 15 A I believe that occurred after these 16 original op specs and after Mr. Schuman was 17 identified, that Kona requiredthe op specs; yes. 18 Q Fair enough. But what you're saying is 19 he did finally get a Kona airport

-- 20 A 21 Q 22 A

(202) 234-4433 Yes, sir.

-- in his op specs? After he applied, my writing, like he

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W WASHINGTON, D.C. 20005-3701 (202) 234-443339 1 did for the other op specs amendment, he did get 2 Charlie 070 operation specifications to operate 3 into Kona, after we conducted a categorical 4 exclusion for his commuter operation into Kona. 5 Q Okay. Fine. Now I just want to ask a 6 couple of questions, your philosophy as a POI. 7 Do you consider your operator that you're a 8 principal operations inspector to be a client? 9 MR. BOBERTZ: Objection. Relevance. 10 JUDGE GOODWIN: Overruled. 11 THE WITNESS: Mr. Schuman is a customer 12 to the FAA and I was his principal operations 13 inspector. I've helped him on numerous times. 14 BY MR. FERRARA: 15 Q So do you consider that as your job, 16 or part of your job, is to help the operator 17 interpret the Federal Aviation regulations, op 18 specs, and so on, everything that he needs to 19 stay legal in his business? 20 A Yes, sir. Mr. Schuman has inquired 21 with me many times of different regulations and 22 what and how we interpreted them at the Honolulu

(202) 234-4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443340 1 flight standards. 2 Q Did he inquire prlor to these alleged 3 flights, or the flights that we've stipulatedto, 4 actually

-- inquire of you, or your office, to 5 your knowledge, about the legality of these 6 flights to Kona for Mokulele? 7 A Mr. Schuman has asked to do on-demand 8 operations for Mokulele in the past, and I 9 informed him that he had to have same operation 10 specifications at Mokulele to support Mokulele 11 commuter operations. 12 Q Well, specifically in the summer of 13 2012, did you receive inquiries from Mr. Schuman 14 concerning the legality of these operations for 15 Mokulele into the Kona airport? 16 A Nothing about Kona. He has never asked 17 me about operating into Kona, that I recall. 18 MR. FERRARA: One moment, Your Honor. 19 JUDGE GOODWIN: Certainly. 20 BY MR. FERRARA: 21 Q Now in Administrator'sExhibit 6, I'm 22 referring you to page 9. Did you get a chance to

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443341 1 read that? 2 A Yes, sir. 3 Q Okay. In that email-- it's dated, it 4 looks like, July 19", 2012; correct? 5 A Yes. I see that right there. 6 Q Okay. And in this one, he's inquiring 7 you about, specifically about FAR 119.53. 8 Correct? 9 A Correct. 10 Q And what would you characterize that 11 FAR? Is that the wet lease

-- 12 A I'm sorry, sir. I don't remember. I'd 13 have to read that reg. 14 Q Okay. Fair enough. Then apparently as 15 part of that same exhibit, and same page, you get 16 back to Richard, and say you've been directed to 17 request that you provide the office a hard copy, 18 written letter with exact requests, and so on. 19 Did you ever get back to him after 20 your interpretation request from DOT? 21 A No, sir. July 20'" is two days before 22 my birthday. I•d departed the area. I was no

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443342 1 longer in the area. And then I followed up with 2 some schools. So there was some time lapse. 3 Q Okay. So are you saying before you 4 left on your vacation, you didn't have any idea 5 that Mr. Schuman was intending to fly for 6 Mokulele the Kona route? 7 A No, sir. Had Mr. Schuman asked me for 8 the Kona route, I would have went through the 9 categorical exclusion, requested an amendment to 10 his operation specifications, and we would have 11 went through the proper procedure to authorize 12 him to conduct Kona operations, just like we did 13 Lahaina and Lanai City. 14 Q Okay. Let me refer you to page five of 15 that same exhibit. Exhibit A-6. 16 A I'm there, sir. 17 Q Okay. Apparently this is an email 18 after your meeting of September 17th, that Mr. 19 Schuman sent to you, enclosing an email 20 to Edward Santa Elena of your office. Is that 21 your understanding of this document? 22 A Page

-- you said page five, sir?

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W. WASHINGTON, D.C. 20005-3701 (202)234-443343

1 Q Yes. Page five out of ten. 2 A Page five out of ten. The first is an 3 email traffic to Inspector Santa Elena and I 4 assume this is a forwarded copy on September 18th, 5 after the inspection for Kona, to me. 6 Q Okay. Well, if you look up 1n the 7 date, it says August 6th, so of 2012. So this 8 email that was apparently sent to Mr. Santa 9 Elena, or Inspector Santa Elena, directly 10 requested information from the FAA on whether he 11 needed to amend his op specs for Kona operations. 12 Do you see that? 13 A I do see that. 14 Q Okay. Do you recall any telephone 15 conversations that you had with Mr. Schuman in 16 regard to these operations into Kona, prior to 17 September, I believe it's the hold on a 18 second. Yes. Prior to September 

### B'h. That's what 19 I thought. I just wanted to make sure. That's 20 what's alleged in the Complaint. 21 He startedoperationson September gth_ 22 Do you recall any telephone conversations, or any

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443344 1 other emails or correspondence in any shape or 2 form with Mr. Schuman? 3 A No, sir. I don't. Had I known that he 4 was requesting to go to Kona, I would have 5 started the process to issue him and go through 6 the requirements to issue Charlie 070 into Kona. 7 Q But you were out of town for a lot of 8 that period; correct? 9 A That's affirmative, sir. 10 Q Okay. On September 13'"·, the Complaint 11 alleges that's the end of the time period in 12 which these flights took place. Do you have any 13 recollection as to how Mr. Schuman was notified 14 that the flights were in fact not permittedunder 15 his op specs? 16 A I was under the impression that Mr. 17 Schuman knew what to do to get it on op specs, 18 cause he had previously done it three months 19 earlier, or four months earlier. 20 Q So are you saying today, that he 21 terminated his flying into Kona voluntarily? Or 22 was he told by your office?

(202) 234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443345

1 A On the date in question, when I 2 requested records, and was denied access, Mr. 3 Schuman immediately pulled the aircraft out of 4 Kona and brought it back to Honolulu. 5 Q This was on the 11h? 6 A Yes, sir. I believe it was on the 7 17'h, of 2012. 8 Q But isn't it true that the log books, 9 that are into evidence now, reflect only flights 10 up to the 13'h? That would be a Thursday, and then 11 there would be a work day, Friday, on the 14th, 12 and then you met with him on Monday, the 1'"\'. 13 A Actually, I think the aircraft may 14 have been at Maui. I don't recall. I know that it 15 wasn't present and he'd requested them to come 16 back. 17 Q I've got a question that involves the 18 institution of this civil penalty investigation. 19 Exhibit A-5 was moved into evidence and it 20 contains Mokulele's schedule, and then we also 21 have a schedule from the log books, from Schuman 22 Aviation, and your interpretationof the rules in

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443346 1 this regard. 2 Was Mokulele ever investigated? 3 MR. BOBERTZ: Objection. Relevance. 4 MR. FERRARA: For employing a-- can I 5 rephrase the question, Your Honor. 6 JUDGE GOODWIN: Overruled. 7 MR. FERRARA: Was Mokulele ever 8 investigated for hiring a contractor with less 9 qualifications than it had? 10 MR. BOBERTZ: Objection. Relevance. 11 JUDGE GOODWIN: Overruled. 12 THE WITNESS: I have no idea. At the 13 time I don't-- I don't know of any investigation 14 that was conducted against Mokulele. 15 BY MR. FERRARA: 16 Q InspectorSanta Elena is their POI, or 17 was their POI at the time? 18 A That is affirmative. 19 Q You never talkedwith Mr. Santa Elena 20 about this? 21 A Inspector Santa Elena about this? 22 Q Were you aware of the email he

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443347 1 received from my client? 2 A After the fact; yes. 3 Q Okay. But we already acknowledged an 4 email was sent on August 6th, 2012, which is more 5 than a month before the flying actually started; 6 correct? 7 A The email sent to Ed Santa Elena; yes. 8 Q Okay. Do you have any opinion, as a 9 POI, that the operator that employs another 10 operator, should be versed in the op specs of the 11 contracted operator? 12 A I believe the two companies should 13 have corroboratedand they should have been aware 14 of each other's operation specifications. 15 Q Okay. Let me refer your memory or 16 recollection back to the 17th of September when 17 you had the meeting. Did you give Mr. Schuman 18 any advance notice of that meeting? Or did you 19 just

-- you and

-- it is Bartlet? 20 MR. BARTLER: Bartler. 21 BY MR. FERRARA: 22 Q Bartler. I'm sorry, Kyle. Yes. Kyle

(202) 234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234·443348

1 Bartler. Did you and Inspector Bartler just show 2 up at Mr. Schuman's office? 3 A There's no requirement for us to 4 notify the operator prior to inspection. So we 5 can inspect unadultered documents, if so needed. 6 Q And that's what you did? 7 A Correct, sir. We showedup. We did not 8 glve notification. We're not required. 9 Q Well, at that point in time you didn't 10 know where the aircraft, Schuman Aviation's 11 aircraft were, the ones that are in question; 12 correct? 13 A I do not keep a daily track of where 14 Mr. Schuman's aircraft are. 15 Q Okay. So when you showed up at his 16 office with Inspector Bartler, you -- of course 17 you were his POI. Was Inspector Bartler there 18 just as a witness? Were you the primary 19 investigatorin this

-- well, this is startingto 20 be an investigation; correct? 21 A Correct. We normally employ two 22 inspectors when we conduct an investigation.

(202) 234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443349 1 Q Okay. And you gave him no advance 2 notice of the actual meeting, and you gave him no 3 advance notice that you were going to be 4 requiring certain records; correct? 5 MR. BOBERTZ: Objection. Asked and 6 answered. 7 JUDGE GOODWIN: Overruled. 8 THE WITNESS: No, sir. In accordance 9 with the 135 rules and regulations, an inspector 10 can inspect at any time and any place, and all 11 the records that are available to us. 12 BY MR. FERRARA: 13 Q That's not my question. My question is 14 did you, in advance, ask, or tell Mr. Schumanyou 15 would be requesting records, before you came 16 over? 17 A No, sir. As I said earlier, I did not 18 glve him an advance notice prior to our 19 inspection. 20 Q Okay. Looking at that exhibit, and 21 your testimonyon direct, there was no mention of 22 any prior communicationsbetweenyou, Mr. Schuman

(202) 234·4433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234-443350 1 and the FSDO personnel, namely Inspector Santa 2 Elena. There was no mention of that in the 3 report. Why is that? 4 A Could you reword that, please, sir. 5 Q Okay. In the report that is admitted 6 into evidence under the Administrator 2 exhibit, 7 and in your direct testimony, you never mentioned 8 that you had contact with Mr. Schuman concerning 9 the event for which we're here today. Is there a 10 reason for that? 11 A I did not know Mr. Schuman was 12 conducting Kona operations prior to this time. 13 Q Okay. When is the first time you found 14 out he was doing, conducting Kona operations? 15 A Early in the morning of the 17th, 16 approximately 10 to 15 minutes prior to. I had 17 been told and explained that there's a 18 possibility that Mr. Schuman is conducting 19 commuter operations out of Kona. I talked to my 20 front-line manager, and then me and Kyle Bartler 21 proceeded over to Mr. Schuman's office. 22 Q

(202)234-4433 Did you talk with Mr.

NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 Inspector

(202)234-443351 l Santa Elena prior to that? 2 A I believe Inspector Santa Elena asked 3 me if Mr. Schuman had operation specifications 4 to operate into Kona. And I looked it up and 5 found out that he did not. 6 Q These records you requested, was it a 7 specific request for certain dates, or did you 8 want all the records during a certain timeframe, 9 like, say, August, September? Or did you have a 10 specific date in mind that you requested? 11 A I cannot recollect. I just

-- I know 12 the times that he gave us and what he provided 13 us. 14 Q Okay. And normally the logs and 15 correct me if I'm wrong -- are carried in the 16 aircraft; correct? 17 A Mr. Schuman also keeps a file in his 18 maintenance records downstairs in his office. 19 Plus he has an All Pro System that identifies 20 where the aircraft go and come from. 21 Q Well, would it be

-- would it be an 22 exception

-- would it be an exception

(202) 234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISlANDAVE., N.W. WASHINGTON, D.C. 20005-3701 well,

(202) 234·443352 1 strike that. Would it be abnormal for an operator 2 to, if he's stationed an aircraft in another 3 locale, to bring all the records with him in the 4 aircraft? 5 A Again, this is an airworthiness 6 question. I don't have the answer to that, sir. 7 Q Okay. Okay. And after that meeting, 8 you testified that he called back in about two 9 hours. About 12 o'clock? 10 A Two, two and a half again, that was 11 two and a half years ago. 12 Q Yes, and that's the tough part for 13 everybody, recollection-wise. But you stated in 14 your report that he did get back to you within 15 two hours. 16 A I think it was just slightlymore than 17 two hours. 18 Q Okay. And then there's follow-up 19 emails concerning the delivery of the logs and 20 maintenancerecords, and so on, the next couple a 21 days, and he finally located them and tried to 22 make some arrangements on September 19th to get

(202)234-4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443353 1 them to you, and I think you were -- you had a 2 personal emergency on the 2lf or something? 3 A Yes. My wife had a medical emergency, 4 which I left. 5 Q Okay. But then in Exhibit, it's marked 6 as No. 6 let me just find out what page it is. 7 Okay. Page two out of ten. It says: Richard says 8 that

-- up on the top there, it says Mac should 9 have dropped him off some time around noon. And 10 who's Mac, to your knowledge? 11 A Robert Reccoriston Smith is Mac. 12 Q And he works for Mr. Schuman? 13 A He was the

-- excuse me. He's the 14 not the instructor pilot

-- he's the

-- he's one 15 of the instructor pilots for Schuman Aviation. 16 Check airman. Sorry. Check airman is the actual 17 term. 18 Q Okay. In any event he was Schuman's 19 representative at that point in time with the 20 records for delivery? 21 A Yes, sir. I worked with Mr. Smith, 22 cordially, many, many times.

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443354

1 Q And just directing your attention to 2 page one on Exhibit A-6 that's been moved into 3 evidence. You state that on September 20'h, you 4 had ln your possession the documents labeled 5 Daily Flight Logs; correct? 6 A Yes. When Mr. Schuman called me two, 7 two and a half hours later, there's no question 8 that he was going to deliver the records. 9 Q Did you get any-- you didn't get any 10 idea during this period of time that he was being 11 noncompliant and trying to stonewall you as far 12 as the records were going? 13 A No, sir. After his initial denial, he 14 said he wanted to talk to his lawyer before he 15 gave us the records. He said, no, I don't think 16 so, I've got to talk to my lawyer. He waited two 17 and a half hours, and then he called us, and he 18 said he

-- he will give us the records. Had he 19 told us the records were not there, this would be 20 a non-issue. It's the initial

-- that he denied 21 it, that we were shocked. 22 Q

(202)234-4433 Okay. You testified that during this

NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-443355 1 period of time, you were the principal operating 2 inspector, operation specifications for Schuman 3 Aviation; correct? 4 A Yes, sir. 5 Q And you're not in that position aswe 6 sit here today; correct? 7 A No, sir. I am not. 8 Q Okay. When were you removed from that 9 position as POI for Schuman Aviation? 10 MR. BOBERTZ: Objection. Relevance. 11 JUDGE GOODWIN: Overruled. 12 THE WITNESS: Well, sir, I was insulted 13 by one of Mr. Schuman's employees, and I was -- 14 my principal operations inspection job for Mr. 15 Schuman was questioned by my front-line manager, 16 and he asked me if I would like to leave. 17 I was not physically removed. I 18 requested to leave, and I am no longer Schuman's 19 representative due to the fact that Mr. Bruce 20 Mayes assaulted me on the property while 21 conducting an inspection, an actual favorable 22 inspection, which was unjustified by Mr. Bruce

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443356 1 Mayes. 2 BY MR. FERRARA: 3 Q Well, Mr. Schuman had nothing to do 4 with that; right? His company -- 5 A No, sir. It had nothing to do with Mr. 6 Schuman. It was an employee of Schuman which 7 created a hostile environment for a Federal 8 Aviation inspector. I opted to leave. 9 Q When you -- did you -- now he has a 10 movie authorizationby the FSDO to conduct formal 11 operations

-- they

-- what do they call it? A 12 movie manual? 13 A Mr. Schuman'smoviemanual has nothing 14 to do with his 135 commuter operation. I was his 15 POI and never had an op -- a issue with his 135 16 operation until this date. 17 Q But you did have an issue with his 18 movie operations, correct, prior to this? 19 MR. BOBERTZ: Objection. Relevance. 20 JUDGE GOODWIN: Overruled. 21 THE WITNESS: Mr. Schuman's movie 22 experience, he has a different attitude than his

(202)234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE, N.W. WASHINGTON, D.C. 20005-3701 (202)234-443357 1 commuter operation. 2 BY MR. FERRARA: 3 Q But you were removed from the movie 4 operations, correct, before you left the POI 5 position? 6 A Yes. Mr. Schuman had violated many 7 rules in his 130

-- under his movie manual, and 8 he'd been suspended for operations under his 9 movie manual. After the second or third time, 10 during a 5-0 shoot, I was no longer his POI 11 because I again requested not to be part of the 12 135 movie manual. 13 Q So you're tellingthe court today you 14 just wanted out, that you didn't like your 15 position as POI for Schuman Aviation. 16 A Negative-- excuse me, sir. As far as 17 18 Q Yes or no? Are you telling the court 19 you didn't like Schuman's operation and that's 20 why you removed yourself as a POI? 21 A No, sir. It was because of Bruce 22 Mayes. That is the only reason I left Schuman

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005.3701 (202) 234-443358 1 Aviation 135 commuter operation. 2 Q You didn't have a discussionwith your 3 manager or Kawehi Lum, concerning your role as a 4 POI? 5 A I've had many conversations with my 6 front-line managers, and managers as being a POI 7 for Mr. Schuman Aviation. 8 Q Would you consider your departure as 9 a POI to be unusual, or sort of a normal event 10 that happens with POis and operators? 11 MR. BOBERTZ: Objection. Relevance. 12 MR. FERRARA: I'll withdraw the 13 question, Your Honor. 14 JUDGE GOODWIN: All right. 15 BY MR. FERRARA: 16 Q One moment, Your Honor. 17 What do you consider the kind of 18 relationshipyou had with Mr. Schuman at the time 19 of this investigation, on the 17'h of September 20 2012? 21 A Mr. Schuman on that date was cordial. 22 I had no issues with Mr. Schuman as of that date.

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443359 1 Matter of fact, he'd commended me in helping him 2 with other operations he's conducted with 135. I 3 had a real cordial operationwith Mr. Schuman and 4 his company, other than his movie manual. 5 Q And there were some problems with 6 that; correct? 7 A Just his movie manual, because Mr. 8 Schuman liked to operate when he was denied 9 permission to operate. 10 Q Do you recall an incident that 11 occurred prior to this September 17th, 2012 12 meeting, wherein everybody, myself included, Mr. 13 Schuman, representatives from your office to 14 discuss a Hawaii 5-0 film shoot? 15 MR. BOBERTZ: Objection. Relevance. 16 JUDGE GOODWIN: Overruled. 17 THE WITNESS: Whichfilm shoot are you 18 referring to? 19 MR. FERRARA: I'm sorry? 20 THE WITNESS: Which filming shoot were 21 you referring to? 22 BY MR. FERRARA:

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443360 1 Q This is the one that occurred 2 downtown, that you were present at. 3 A The fast rope one that he's referring 4 to? I don't remember if that was before this date 5 or after. 6 Q Okay. That's fair enough. I have no 7 further questions at this time. Thanks. 8 JUDGE GOODWIN: Redirect. 9 MR. BOBERTZ: Just briefly, Your Honor. 10 REDIRECT EXAMINATION 11 BY MR. BOBERTZ: 12 Q InspectorMonfort, what is an operator 13 required to do to amend an op spec? 14 A He's got to make a written request 15 asking for the op spec amendment. He's got to 16 he normally provided us a letter saying where he 17 was going to, where-- where he wanted to go-- 18 start from and go to, and he provided us a list 19 of altitudes that he'd be at where the single20 engine aircraft could make easy glide, or in the 21 event of engine failure, could land on land. So 22 it's like a seven page, eight page document.

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE.• N.W. WASHINGTON. D.C. 20005-3701 (202) 234-443361 1 Q So is it somethingthat they can -- do 2 they need official FAA approval before that 3 amendment takes place or not? 4 A Yes, sir. That document is signed by 5 the operator and then it's finalized and issued 6 by the Federal Aviation Administration. In this 7 incident, it would have been me. 8 MR. BOBERTZ: Thank you, Inspector. 9 MR. FERRARA: A couple addressed to 10 that to those questions Your Honor, on 11 recross. 12 JUDGE GOODWIN: Yes. 13 RECROSS-EXAMINATION 14 BY MR. FERRARA: 15 Q InspectorMonfort, in your opinion, as 16 an inspector, do you have any opinion as to 17 whether Schuman Aviation would have had any 18 problems with the op specs amendment to fly and 19 operate out of the Kona airport, based on his 20 other airports that he lands at? 21 A As far as operations into Kona, the 22 only thing I needed to see was his agreement

(202)234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443362 1 betweenhim and Mokulele authorizingthem, him to 2 use the facilities. Other than that, because Mr. 3 Schuman did not have facilities to operate, or 4 handle passengers out of Kona, except for the 5 ones that Mokulele would provide. I just needed 6 to see agreement. 7 Q So what you're saying is if he did 8 have the Kona operations in his op specs, the 9 agreement that he had with Mokulele to take some 10 of their passengers in and out of that airport 11 would have been legal; correct? 12 A Yes, sir. And that was evidenced 13 eight days later when it was issued to him 14 through the proper requests. 15 Q And just to clarifyyour answer there, 16 Mokulele and Schuman Aviation flew the same type 17 of aircraft, correct, for this operation? 18 A Yes, sir. 19 Q Caravan. 20 A But underneath the on-demand and 21 commuter, there's different economical levels of 22 authority; right? And an on-demand operator does

(202) 234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443363 1 not carry the same insurance levels or the pilot 2 requirements, and they don't meet the standards 3 of the commuter operation. They don't have to. So 4 it's unknown. 5 Q Well

-- and that's correct. And that 6 was one of the reasons, that was one of the 7 purposes of his inquiry to you, early on in the 8 summer; correct? 9 A As far as the inquiry into Kona, I 10 don't have any recollection of that. 11 Q Not specifically Kona but just what 12 you were testifying about, about the different 13 levels of 14 A Well, yes; sure. Mr. Schumanwas quite 15 aware. He'd applied for the op specs into Lahaina 16 and Lanai. Had he asked for them and done the 17 proper requests, he would have been issued the 18 operation specifications into Kona. 19 Q Oh. So in other words, because he had 20 these prior air these airports in his op 21 specs, you didn't see any problemwith his safety 22 operations, or anything like that. Getting a op

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443364 1 specs amendment to Kona wouldn't have been that 2 difficult? 3 A Well, under commuter operations, Mr. 4 Schuman would have used a high time pilot that 5 was qualified in commuter operations. He would 6 have had the facilities would have been 7 inspected or verified, and we would know, for 8 sure, that Mr. Schuman carried the same level of 9 responsibility that Mokulele provided to its 10 customers. 11 Q And the question I'm asking is if he 12 already had these airports that are acknowledged 13 by you to be rather difficult to get ln, 14 Kalaupapa and stuff like

-- airports like that, 15 you don't see any problem with him being 16 qualified for a Kona operation? 17 A Again, it's the process to get the 18 operation approved. It's the requirement. 19 MR. FERRARA: Okay. No further 20 questions. 21 JUDGE GOODWIN: Anything further of 22 this witness?

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-443365

1 MR. BOBERTZ: Nothing further. 2 JUDGE GOODWIN: Sir, I'm going to 3 instruct you not to discuss your testimonyduring 4 the hearing. It's up to Mr. Bobertz whether you 5 have to remain here or you're excused. But you 6 can step down. 7 THE WITNESS: Thank you, Your Honor. 8 (Witness excused) 9 JUDGE GOODWIN: How long is the next 10 witness going to take? Ballpark. 11 MR. BOBERTZ: On direct, 15 minutes 12 max. Maybe less. Probably less. 13 JUDGE GOODWIN: All right. Call your 14 next witness. 15 MR. BOBERTZ: The Administrator calls 16 Inspector Kyle Bartler. 17 JUDGE GOODWIN: Stand and raise your 18 right hand. 19 WHEREUPON, 20 KYLE BARTLER 21 WAS CALLED AS A WITNESS AND HAVING FIRST BEEN 22 DULY SWORN, WAS EXAMINED AND TESTIFIED AS

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-443366 1 FOLLOWS: 2 JUDGE GOODWIN: Pleasebe seated. State 3 your name for the record and spell your first and 4 last name. 5 THE WITNESS: My name's Kyle Bartler. 6 First name, K-Y-L-E. Last name, B-A-R-T-L-E-R. 7 JUDGE GOODWIN: Counsel. 8 MR. BOBERTZ: Thank you, Your Honor. 9 DIRECT EXAMINATION 10 BY MR. BOBERTZ: 11 Q InspectorBartler, can you please tell 12 me where you're employed? 13 A I'm employed at the Federal Aviation 14 Administration for the Honolulu Flight Standards 15 District Office. 16 Q 17 A 18 Q 19 there? 20 A 21 months. 22 Q

(202) 234-4433 And what is your position there? Aviation safety inspector. And how long have you been employed
Approximately four years, three

And can you briefly describe your job

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443367 1 duties. 2 A Job duties include general aviation 3 surveillance inspection, certification, accident 4 investigation, investigation into pilot 5 deviations, certificate management. That's about 6 it. 7 Q So do you recall accompanying 8 Inspector Monfort on an inspection of Schuman 9 Aviation on September

**1~h'** 2012? 10 A I do. 11 Q Do you recall why you accompanied 12 Inspector Monfort? 13 A I believewe discussedwith the front14 line manager, Charles Cantu, before we proceeded 15 over to conduct the inspection. And we were 16 recommended to have two of us there. 17 Q So can you tell me what happenednext? 18 A We basicallygot in the Government car 19 and drove down the ramp, pulled up to the ramp in 20 front of Schuman Aviation, and I don't know how 21 we got in the door, but we were invited in. We 22 met with Richard, and went up to his office, and

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443368 1 discussed basically the operations that may or 2 may not have been occurring between Honolulu, 3 Maui, and Kona. 4 Q Can you recount the substance of that 5 conversation? 6 A Could you be more specific? 7 Q Yes. So you and InspectorMonfort went 8 into Schuman's office, sat down and was it you or 9 Inspector Monfort doing most of the talking with 10 Mr. Schuman? 11 A As the POI, Inspector Monfort was 12 doing most of the discussion. 13 Q Okay. So did he ask Mr. Schuman about 14 the operations into Kona? 15 A He did. What I can recall is Mr. 16 Schuman believed that it was a 135 on-demand 17 charter for Mokulele and not a commuter 18 operation. He stated that he could conduct 50, 19 or as many as he wanted to, because it was an on20 demand charter and not a commuter operation. 21 Q 22 A

(202)234·4433 And then what happened? Then we explained to

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W. WASHINGTON, D.C. 20005·3701 him the

(202) 234-443369 1 difference between a commuter operation and an 2 on-demand operation, with specifics to how the 3 pilots are held to a higher standard, they have 4 to have more flight time, Mokulele provides a 5 higher level of service than Schuman would, due 6 to this. So the customers are basically paying 7 for a ticket on a, quote, unquote, commuter 8 airline that is held to a higher standard than an 9 on-demand charter would be. 10 So you're --you're not providing the 11 same amount of service. So it's not-- you can't 12 just charter a flight on something that's 13 scheduled. It's a whole different animal. 14 After that, we asked to see the 15 records for the last couple flights that 16 occurred, and he took about a minute pause and 17 then said I don't think so. 18 Q And then what happened? 19 A Then we confirmed. Are you -- are you 20 denying us access to your records? You know. And 21 he said, I'd have to talk to my lawyer first. I 22 don't think so.

(202) 234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234-443370

1 Q Did he say anything about the records 2 being off-site in his aircraft? 3 A I do not recall. 4 Q And then what happened? 5 A Then we left, proceeded back to the 6 office, spoke with our front-line manager, spoke 7 with our office manager at the time, and called 8 yourself. 9 Q And what came of those conversations? 10 A Basically, we were told to give him 30 11 minutes, or so, I believe, a reasonable amount of 12 time to produce the documents, and it took about 13 a little over two hours, and he did Mr. 14 Schuman did call the office and said he would 15 provide the documents, about two, two and a half 16 hours later, after we departed Schuman Aviation. 17 MR. BOBERTZ: No further questions. 18 JUDGE GOODWIN: Mr. Ferrara. 19 CROSS-EXAMINATION 20 BY MR. FERRARA: 21 Q Inspector Bartler, did you take over 22 any type of administration of Schuman Aviation

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234·443371 1 shortly after Inspector Monfort left as POI? 2 A Define take over. 3 Q I'm sorry? 4 A Could you please define the word take 5 over. 6 Q Well, manage. Did you have anything 7 to do with his movie manual? 8 A I had some oversight on, I'd say two 9 or three different movie shoots and 10 authorizations. 11 Q Okay. That's a better word 12 oversight. I like that. 13 A Kind of what I was looking for. 14 Q Okay. During those periods of 15 oversight, did you have any problems with Mr. 16 Schuman? How wouldyou describe the relationship? 17 A I didn't have any problems. It was-- 18 everything was done

-- you know, I had to check 19 on things a little bit more than I'd like to, but 20 that's-- that's just communication, really. So 21 there was a little back and forth, but when the 22 day was at an end, everythingwas done correctly;

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISlANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-443372 1 yes. 2 Q Well, you were there at the September 3 17'" meeting. Would you describe

-- you mentioned 4 the word that

-- or the phrase that Mr. Schuman 5 had the impression that it was a charter 6 operation. You know, of course, that Mr. 7 Schuman, or Schuman Aviation had a commuter 8 certificate. So they were at the level that you 9 were talking about, that's higher than an on10 demand charter; correct? 11 A Depends. It depends on what instance. 12 It depends who the pilot was. It depends where 13 they were operating. It depends

-- there's all 14 kinds of factors. So no, it doesn't mean 15 necessarily that they were at the same level. It 16 depends what the instance was, the flight was. 17 There's multiple factors. 18 Q Exactly. But you don't know whether 19 the pilot or not had a -- I mean, was qualified 20 with a commuter on-demand 21 A I didn't know who the pilot was. There 22 was no records.

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443373

1 Q At the time until he turned them

-- 2 A At the time. 3 Q In your statement, you mentionedthat 4 at 10:15 you returned to the FSDO and explained 5 the events to the front-line manager, and then at 6 12:10 Mr. Schuman called. So it's a little less 7 than two hours, not more; correct? 8 A Depending on how long it takes to 9 drive down the ramp. About roughly two hours, 10 plus. 11 Q Okay. Do you need to see a copy of 12 your statement? 13 A No, sir. 14 Q Okay. By the way, concerning your 15 statement, it's with the exception of the 16 signature page, it's exactly identical to Mr.

-- 17 Inspector Monfort's report. 18 Do you agree with that? 19 A Yes. 20 MR. FERRARA: Okay. I have no further 21 questions. 22 JUDGE GOODWIN: Any redirect?

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443374

1 MR. BOBERTZ: No, Your Honor. 2 JUDGE GOODWIN: Sir, again you're 3 admonished not to discuss your testimony until 4 the conclusionof the hearing. You're free to sit 5 down. It's up to Mr. Bobertz whether you need to 6 stay. 7 THE WITNESS: Thank you, Your Honor. 8 (Witness excused) 9 JUDGE GOODWIN: And as for the next 10 witness, how long? 11 MR. BOBERTZ: The Administratorrests, 12 Your Honor. The Administrator has no more 13 witnesses on its case in chief. 14 JUDGE GOODWIN: Okay. What we're going 15 to do at this point, then, it's 26 minutes after 16 10:00, we're going to take a break until 20 17 minutes of 11:00 and then the Administrator 18 having rested, Mr. Ferrara, it'll be your 19 opportunity to present evidence, testimony or 20 whatever you want to do. 21 So we're going to go off the record 22 until 20 minutes of 11:00.

(202)234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-443375 1 (Whereupon, the above-entitledmatter 2 went off the record 10:28 a.m. and resumed at 3 10:46 a.m.) 4 JUDGE GOODWIN: Mr. Ferrara, your 5 pleasure. 6 MR. FERRARA: A brief opening, Your 7 Honor. 8 JUDGE GOODWIN: Go ahead. 9 MR. FERRARA: The evidence that the 10 Respondent will present will basically show this 11 is a rather simple case. It's misunderstanding. 12 There's miscommunication as to the legality of 13 the flights in question, that were readily 14 admitted by the Respondent. The evidence will 15 show that there was more communication, that the 16 Administrator'switnesses testifiedto concerning 17 these issues. 18 There'll also be testimony that the 19 operator ceased flights when their companybecame 20 aware that they were not in conformity to FAA 21 regulations. There was distinctmiscommunication, 22 as the evidence will show, and misunderstanding

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443376 1 of the record production, and Mr. Schuman, 2 through his testimony, will assert that the 3 records were produced as soon as he was able to 4 locate them. 5 The records were -- the evidence will 6 show, and has shown, that they were produced on 7 September 2eJh, 2012

. 8 We feel that we shouldn'tbe here more 9 than two years after the events occurred, and we 10 think there is a -- I assert that the evidence 11 will show that this was a misunderstanding 12 between operator and POI, and other elements of 13 the Flight StandardsDistrictOffice in Honolulu. 14 Nothing further, and we'll call our first 15 witness. 16 JUDGE GOODWIN: Sure. Have your witness 17 come forward to the stand. 18 MR. FERRARA: Your Honor, prior to 19 calling Mr. Schuman, I'd like to call Inspector 20 Santa Elena. We didn't list him as a witness, but 21 the offer of proof for calling him as a witness 22 would be just to clarify this one exhibit that

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443377 1 was moved in to evidence by the Administrator. 2 JUDGE GOODWIN: Well, looking at him, 3 he felt left out, so feel

-- let him approach. 4 MR. FERRARA: We didn't want that to 5 happen. 6 JUDGE GOODWIN: No it's 7 Raise your right hand. 8 WHEREUPON, 9 EDWARD SANTA ELENA 10 WAS CALLED AS A WITNESS AND HAVING FIRST BEEN 11 DULY SWORN, WAS EXAMINED AND TESTIFIED AS 12 FOLLOWS: 13 JUDGE GOODWIN: Pleasebe seated. State 14 your first and last name, and spell your first 15 and last name for the record. 16 THE WITNESS: My name is Edward Santa 17 Elena. That's E-D-W-A-R-D, space, S-A-N-T-A with 18 a space, E-L-E-N-A. 19 20 21 22 Q

(202) 234·4433 JUDGE GOODWIN: Counsel. DIRECT EXAMINATION BY MR. FERRARA: Mr. Santa Elena, could you give us

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005·3701 (202) 234-443378 1 your occupation and title. 2 A I'm Aviation Safety Inspector at the 3 Honolulu Flight Standards District Office. 4 Q And how long have you been so 5 employed? 6 A Coming up on 13 years. 7 Q Okay. And are you familiar with the 8 events and circumstancesthat have been testified 9 to in this case? 10 A Yes, I do, sir. 11 Q Okay. And at the time in question, on 12 or about September 8'h through I guess the end of 13 Septemberwe can use, were you a POI for Mokulele 14 Airlines in 2012? 15 A Yes. 16 Q Okay. And how long had you been the 17 POI for Mokulele? 18 A I don't

-- I can't give you an exact 19 date, I don't recall, but I'm currently the 20 principal to this date. 21 Q Okay. And you know Mr. Schuman, the 22 president of Schuman Aviation?

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443379

1 A Yes. Very well. 2 Q Okay. I just want to ask you some 3 questions. Do you have the exhibits in front of 4 you, or do we need

-- 5 A No, I don't, but

-- 6 MR. BOBERTZ: Are you going to talk 7 more about then Exhibit A-6, or -- 8 BY MR. FERRARA: 9 Q That's correct. 10 Okay. Inspector Santa Elena, I'll 11 refer you to Exhibit A-6, and it's paginated, and 12 I'm looking at page 7 of 10. 13 A Okay. 14 Q Now this exhibit, as I stated, was 15 provided by the Administrator in this hearing, 16 and I direct your attention down to the bottom 17 half of page seven. And it say aloha, Ed. 18 A Yes. I recall this email. 19 Q All right. Take a second to

-- have 20 you had a chance to read it? 21 THE WITNESS: Let me read all of this. 22 JUDGE GOODWIN: And while you're doing

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-44331 that, just for the record, is your last name 2 hyphenated, two words? 3 THE WITNESS: No. There'sjust a space, 4 sir. 5 JUDGE GOODWIN: It's a space. Okay. 6 THE WITNESS: Yes. 7 JUDGE GOODWIN: So the hyphenation is 8 for the email? 9 THE WITNESS: Yes. 10 JUDGE GOODWIN: I'm looking at the 11 email and it shows

-- 12 THE WITNESS: Yes, and the reason why 13 is I guess the computer, it can't take a space, 14 so it needs to put something in there. 15 JUDGE GOODWIN: That's even worse than 16 having spell-check. 17 THE WITNESS: I just hope it doesn't 18 hurt me on my returns, my tax returns. 19 BY MR. FERRARA: 20 Q So I guess in response to the judge's 21 question, this is directed to you, this email 22 from Richard Schuman?

(202) 234-4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-44338081

1 A Yes. 2 Q That's your official government 3 address? 4 A That's correct. 5 Q Okay. Did you have a chance to read 6 the content of that email to you? 7 A Yes. 8 Q Okay. And it carries forward on page 9 eight, the next page. Did you see that? 10 A Yes, sir. 11 Q Okay. Just for the record now, it's 12 dated Monday, August 2012. Is that your 13 understanding? 14 A Yes. What is has on the exhibit; yes. 15 Q Do you recall receiving this email? 16 A Yes, and I do recall reading it as 17 well. 18 Q Now at this point ln time

-- Inspector 19 Monfort was he out of town? 20 A I believe

-- no, I'm not on the 21 date that I read the email, I'm not sure what 22 status Mr. Monfort was at, so I don't recall

(202)234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W. WASHINGTON, D.C. 20005-3701 (202)234-443382 1 specifically if he was in the office or not. 2 Q Okay. Based on the evidence before 3 you, I want you to take a look at it, and is it 4 your understanding that Mr. Schuman is inquiring 5 about the operations with your operator for 6 operations and assistance in Kona? 7 A Yes. 8 Q And were you able to get back to Mr. 9 Schuman prior to September tJh, 2012? 10 A You know, I don't, I don't believe-- 11 I know I didn't respond to Mr. Schuman's email. 12 Again, I don't recall the date that I read the 13 email, because normally, in the month of August, 14 I'm out of the office for about a week or two. So 15 I don't I don't recall. 16 MR. FERRARA: Okay. No further 17 questions. 18 JUDGE GOODWIN: Okay, cross? 19 MR. BOBERTZ: Nothing, Your Honor. 20 JUDGE GOODWIN: Sir, you can step down. 21 I'm going to ask you not to discuss your 22 testimony. You can leave the exhibit up there.

(202)234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443383 1 Not to discuss your testimony with anybody prior 2 to the conclusion of the hearing. 3 Mr. Ferrara, your next witness. 4 MR. FERRARA: I call Mr. Richard 5 Schuman to the stand. 6 JUDGE GOODWIN: Stand and raise your 7 right hand. 8 WHEREUPON, 9 GUSTAV RICHARD SCHUMAN 10 WAS CALLED AS A WITNESS AND HAVING FIRST BEEN 11 DULY SWORN, WAS EXAMINED AND TESTIFIED AS 12 FOLLOWS: 13 JUDGE GOODWIN: Pleasebe seated. State 14 your name for the record and spell your first and 15 last name. 16 THE WITNESS: First name, Gustav, G-U17 S-T-A-V, middle name Richard, R-I-C-H-A-R-D, last 18 name Schuman, S-C-H-U-M-A-N. 19 JUDGE GOODWIN: Counsel. 20 DIRECT EXAMINATION 21 BY MR. FERRARA: 22 Q Mr. Schuman, could you state your

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443384 1 occupation and title. 2 A Occupationis management. I'm the sole 3 owner of a company called Schuman Aviation 4 Company, Limited. I'm the President and Director 5 of Operations. 6 Q And could you describe briefly, the 7 scope of your operations under Schuman Aviation? 8 A Schuman Aviation is kind of a unique 9 operation. We have both helicopters and fixed 10 wings. We have helicopters that do 135 on-demand 11 day/night operations. We have airplanes that are 12 VFR/IFR, day/night, scheduled, and on-demand 13 operations. 14 Q Okay. And how long have you been in 15 business? 16 A The company was established in 1996. 17 Q And how long have you been in the 18 fixed wing commuter business? 19 A We started fixed wing operations, I 20 want to say either, right around 2008-ish. 21 Q Okay. And do you yourself possess 22 pilot certificates?

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.. N.W WASHINGTON, D.C. 20005-3701 (202) 234-443385
1 A Yes. I'm a ATP rotorcraft and a 2 commercial multi-engine fixed wing. 3 Q Okay. Is it safe to say that

-- well, 4 describe your experience in the commuter versus 5 the helicopter business. 6 A I'mmuch more versed in the helicopter 7 operations. I've been doing that the better part 8 of 20 years now. 9 Fixed wing operations. We started in, 10 I say either 2008-ish, when the economy took a 11 dive, we ended up diversifying into fixed wing 12 operations, starting off with 135 on-demand and 13 air cargo operations. 14 Q Okay. Let me direct your attention to 15 the summer of 2012, and I'm going to be asking 16 you several questions concerning Inspector 17 Monfort's testimony today. 18 When was your first contact with 19 Mokulele concerning flying for them? 20 A I can't recall the

-- the date that 21 they first contacted us to help support them. 22 Q

(202) 234-4433 Okay. What was your understanding of

NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443386 1 what kind of support they needed? 2 A Initially, we were inquiredto support 3 them on a commuter scheduled basis from Oahu to 4 Molokai, Molokai to Maui, that may include Lanai 5 and Kapalua. 6 Q Okay. Specifically now in the summer 7 of 2012, prior to the flights that were taken to 8 Kona on behalf of Mokulele, do you recall any 9 specific conversations with Mokulele concerning 10 those flights? 11 A The question again, please. 12 Q Okay. Do you recall any communication 13 directly relevant to the flights in question 14 here, that took place between September 8th and 15 September 13th of 2012 with the Mokulele 16 management? 17 A Oh, concerning the flights into Kona? 18 Q Yes. 19 A Yes. Darryl Grace is the operations 20 manager, or director of operations for Mokulele, 21 and he had inquired about us being able to 22 support some flights between the island of Maui

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443387 1 and the airport, Kona, because I believe he had 2 some maintenance issues, or demand issues. So we 3 discussed that possibility. 4 Q Okay. And did you form an opinion at 5 that point in time, or close to it, when you 6 talked with Mr. Grace, as to whether or not you 7 could legally fly those missions for Mokulele 8 under your certificate, your commuter 9 certificate? 10 A It was my belief at that time, that we 11 could comply with Mr. Grace's requests because we 12 were one -- we were authorized 135 on-demand. We 13 also were a 135 scheduled air carrier, and it 14 was, at that time was a period just to help him 15 out due to whatever operational issues he had at 16 that time. 17 So it was relatively going to be a 18 short-lived, potentiallya short-livedthing, and 19 because it was one operator, or one customer, he 20 dictated the times, he dictated the flights, he 21 dictated the days. It's been my experience that 22 we complied with 135 on-demand.

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443388

1 Q Okay. But you checked into that 2 further; correct? 3 A Well, I had a phone call

-- timing4 wise, I don't remember the dates, but Mr. Monfort 5 was my POI at the time, and I believe he did 6 leave the islands for either personal, or I knew 7 he had training in Texas, or something 1ike that. 8 So I called him, or made an attempt to call him 9 on the phone, and talked to him about this 10 particular mission. 11 Q And what was your concern? 12 A I was seeking his interpretation of 13 this mission. 14 Q As to whether it could be flown on15 demand, or whether you needed to change your op 16 specs? 17 A That would be correct. 18 Q Did you mention to him that it 19 involved operations in and out of the Kona 20 airport? 21 A Specifically Kona, because I had 22 operation specifications for the other airports,

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443389 1 and because this was not on my operation 2 specifications. So I specificallyasked him about 3 missions from Maui to Kona. 4 Q I believe you have the Exhibit A-6 in 5 front of you. Could you take a look at that? That 6 was submitted by the Administrator. 7 A Yes, sir. 8 Q And take a brief moment to read that 9 exhibit, and I'll ask you whether or not this 10 reflects your recollection of the correspondence 11 between you and the FSDO. 12 A Is there a specific page, or -- but 13 these look familiar. 14 Q Okay. Now the substance of that, the 15 communications, based on your recollectionof the 16 events that happened, and based on that exhibit, 17 what were you seeking from the FAA, Mr. Monfort, 18 and from Inspector Santa Elena? 19 A Yes. My email was sent to Joe and 20 copied, Ed, on one of them. 21 Q 22 A

(202) 234-4433 Joe being who? Monfort.

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE ,NW WASHINGTON, D.C. 20005-3701 (202) 234-443390

1 Q Okay. 2 A was specifically about the Kona 3 operation. 4 Q So you sort of disagreewith Inspector 5 Monfort's testimony today, that he knew nothing 6 about the Kona operations? 7 A That's what I heard him say. 8 Q And you did it's your testimony 9 today, that you discussed specifically Kona 10 operations with him on a phone conference, at 11 least once? 12 A Yes. Absolutelyon the phone, and then 13 I followed up by emails. 14 Q Okay. Now the email that you're 15 speaking about is the one that was sent to 16 Inspector Santa Elena; correct? 17 A That's one, but there's one missing 18 that was sent to Joe and copied, Mr. Santa Elena 19 in on that request also. My first email went 20 to my principal POI, and I copied in Mr. Santa 21 Elena. Then the second email that you see here 22 was specifically to Ed, because I had

-- I knew

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202)234-443391 1 Joe was not on island. 2 Q Okay. The one you're referring to

-- 3 Inspector Santa Elena

-- is the August 6'h email; 4 correct? 5 A Yes. 6 Q And then there was another email that 7 was sent later on, of course this is right after 8 the meeting, to Inspector Monfort, showing him 9 the email ln question? 10 A Yes. 11 Q Okay. Now was there some discussionin 12 your office management about the legality of 13 these flights? 14 A Yes. Between my chief pilot and my 15 check airmen, we discussed this operation. 16 Q Okay. And what was the decision ln 17 regards to Mokulele's request that you help them 18 out in flights between Maui and Kona? 19 A Well, the between my chief pilot 20 and my check airmen, we, as we discussed the

-- 21 this particular request to support them in Kona, 22 we needed-- we decided to call Mr. Monfort and

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W WASHINGTON. D.C. 20005-3701 (202)234-443392 1 try to get a interpretatim, because up to that 2 time we were still trying to research the 3 regulation as far as 135 on-demand, and we kept 4 up coming with the same answer, that it could be 5 done as a on-demand 135 charter. 6 Q But it's your testimony today, that 7 even though you came up with that conclusion, you 8 wanted to inquire of the FAA as to whether they 9 or not agreed with that; correct? 10 A That's correct. 11 Q Now did you get any response from 12 anybody at the FSDO, either from Inspector 13 Monfort or Inspector Santa Elena? 14 A I did not. 15 Q Okay. And what was your understanding 16 for the lack of response? I mean, there was one 17 email from Inspector Monfort that said he was 18 checking into it. What was your understanding of 19 that? 20 A My feeling at the time, understanding 21 how you interpret different regulations, the no 22 response from either Joe or Mr. Santa Elena, at

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443393 1 least in my mind made me feel that if they had no 2 issue, then I had no issue. 3 Q So is your testimonytoday that if you 4 had received a response from Mr. Monfort, I mean 5 Inspector Monfort, pardon me, that

-- saying 6 that you needed destinationairports, they had to 7 be included in your op specs, you wouldn't have 8 flown the missions? 9 MR. BOBERTZ: Objection. Calls for 10 speculation. 11 JUDGE GOODWIN: Overruled. 12 BY MR. FERRARA: 13 Q You can answer. 14 A The I understood the difference 15 between commuter operations and on-demand. We 16 were authorized. We were a commuter operator. We 17 did have authorizationinto airports that we were 18 conducting scheduled operations into, and hence, 19 my inquiry, because this was a -- that airport 20 was not on my operation specifications, and 21 Mokulele was requesting some support, and in my 22 mind it was a short-term operation, hence, we

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.. N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443394
1 needed a little bit more clarity, or 2 clarification on, on the interpretation of that 3 135 on-demand rule. 4 Since not receiving if, if Mr.

-- 5 Joe or Mr. Santa Elena would have called, 6 emailed, said look, Rich, no, don't do it until I 7 get back to you. Rich, hold off until I 8 anything. If they would have indicated that this 9 was a no go mission at all, I wouldn't have done 10 it. 11 Q Did you make a whole lotta money off 12 these missions? 13 A No. In fact, after starting this 14 operation, supportingMokulele, and I was kind of 15 at

-- at the initial onset trying to guess 16 they wanted to know what I was going to charge 17 them, and I just took a wild guess, and after 18 doing the math, it was actually a loser, 19 supporting them, and hence, we no longer support 20 them, but 21 Q So why did you fly the missions for 22 Mokulele between the September 8'h and September

(202)234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443395 1 13th? 2 A Well, because they asked us to. 3 Q Did you fly because it was your 4 understanding, based on the totality of the 5 circumstances, that the flights were legal? 6 A Yes. Absolutely. My company would not 7 engage in any flight operations that I deemed to 8 be not within the FARs. 9 Q Well, what you're saying is and a 10 couple reasons for a couple reasons it 11 wouldn'tbe worth it to violate the FARs for this 12 type of 13 A Yes. Absolutely. Yes. I mean, we 14 wouldn't knowingly, willingly, disregard the 15 federal regulations and conduct air operations. 16 So regardless of the amount of money that we 17 might make on the job. 18 Q Okay. So in that regard, you had 19 nothing to hide. You were flying the missions 20 openly. You kept records? 21 A 22 Q

(202) 234-4433 That's correct. Yes, sir. There wasn't any effort, on your part,

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443396 1 or any of your employees' part, to keep this as a 2 secret, a secret from the FAA that you were 3 flying these missions? 4 A No, sir. 5 Q As a matter of fact, Inspector Santa 6 Elena knew from an email that you were intending 7 to do these kind of missions, if you were asked 8 by Mokulele? 9 MR. BOBERTZ: Objection. Overstates

- - 10 misstates the prior testimony. 11 JUDGE GOODWIN: Overruled. 12 BY MR. FERRARA: 13 Q Okay. During this week that you were 14 in operations, flying a Mokulelemission for them 15 from Maui to Kona, did you have any contact with 16 anybody from the Honolulu FSDO? 17 A Not to my knowledge, if we're talking 18 about the week we were conducting operations in 19 to Kona. I do not recall having any 20 conversations, or communication with the local 21 FSDO. 22 Q Okay. Just so we're clear on the

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS

. 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-443397 1 calendar dates. Your last flight, reflected in 2 the log submitted by the Government here, was 3 September 13th. The meeting with Inspectors 4 Bartler and Monfort was on the 17th. Why did you 5 terminate your flights on the

**1~?** 6 A It was my-- Mr. McCorsen, Mac Smith, 7 came and informed me that he was -- he had a 8 conversation with Joe about

-- I'm not sure what 9 the conversationwas about, but Mac had mentioned 10 something to Joe about us conducting operations 11 in to Kona, and based on our recollection, Mac 12 then

-- I mean Joe told Mac that we couldn't do 13 it. So Mac came and found me, and told me the 14 conversation he had with Joe, and we immediately 15 ceased operations. 16 Q And that was on the 13th, to your 17 recollection? 18 A Yes, sir. 19 Q Okay. Up until that date, was there 20 any communication from the FAA saying that you 21 could not do this operation with the present op 22 specs that you had?

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-443398

1 A No. Not to my knowledge. 2 Q All right. On the meeting of 3 describe that meeting that took place on 4 September 17h, 2012. 5 A As a little bit a background, the

-- 6 the tensionbetweenmyself, or my company and Joe 7 started to get a little tenuous. The 8 relationships that I've had with prior POis had 9 been really good, and

-- and our relationship 10 with Joe, for a long time, was it was 11 cooperative, was okay. 12 Q And he used the word cordial. Do you 13 agree with that? 14 A Yes, sir. I do. On that particular 15 day, there were internal memos from my staff 16 about the relationship that the company was 17 havingwith Joe, and subsequent emails or letters 18 that I had sent to the FSDO asking for his 19 removal from being my POI. So we kind a felt-- 20 at least myself and my staff, that we kind a felt 21 we had to be very careful with Joe, because we 22 feel we were somehow a target, and we were just

(202)234·4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-443399 1

-- we just felt he was out to

-- to try to find 2 something against us, or for something. 3 Q Okay. When he

-- they announced their 4 presence at your office, apparently, or at least 5 at the Makani Kai building, is it safe to say you 6 invited him in to your office

-- and then when 7 was the first time, during that conversation, 8 that they informed you what they were looking at 9

-- after? Did immediately, or did you guys have 10 11 A Pretty immediately. It's been my 12 practice that any of the local FSDO people can 13 come in to my operation and walk in to my office 14 any time they want. We've never had any formal, 15 they've got to call me, or -- or anything, and 16 and they all have done it in past years. So it 17 was no surprise to see Joe and-- and Kyle come 18 in to my place of business, and unannounced. 19 Wasn't a surprise. 20 So when they wanted to meet me, I say 21 okay. We go upstairs in to my office. No problem. 22 Sat down and we started chatting, and then I'm

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1 not sure what took place first, but, you know, 2 then Joe did ask about the Kona operations. 3 Q Were you surprised by the subject 4 matter of the meeting? 5 A I actually was, because in my mind, 6 when we were informed that we couldn't do it, we 7 immediately stopped, took the aircraft and 8 dispatched it, and put it in Maui. And at that 9 point I thought, okay, we complied, and I didn't 10 it surprised me that

-- his inquiry. 11 Q Did it seem like an investigationwas 12 starting? Or were they just talking about the 13 legalities?And what was your impressionof their 14 intent, if you have one? 15 A The initial impression, as the 16 conversation started, I got the feeling, real 17 quickly, that I was being set up. 18 Q Okay. And did you have a discussion, 19 as testified by the two inspectors, that

-- of 20 your impression as to what these missions were, 21 versus their opinion? In other words, on-demand 22 charter versus a commuter operation?

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1 A I don't exactly recall, but I

-- I'm 2 pretty sure Joe would have said that these were 3 not, in his opinion

-- if we're talking about 4 that meeting in his opinion, that I could 5 conduct them under 135 on-demand. 6 Q Okay. And then you heard the testimony 7 about the records. What's your version, or your 8 recollection, as to what transpired concerning 9 the log books, and manifests, and maintenance 10 records? 11 A Well, when I

-- when I got the feeling 12 that Mr. Monfort had set me up in my mind, by not 13 answering the previous emails, and his initial 14 the phone conversation we had with him prior to 15 this, then his here to conduct an 16 investigation, kind a threw me off. So when he 17 specifically asked about the records, I did 18 pause, and thought about it, and I did say, I 19 don't think so. I'm not sure- he asked if he 20 could have it and I probably said, no, I don't 21 think so. 22 Q

(202) 234-4433 Did you know where the records were at

NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C 20005-3701 (202) 234-4433102

1 that time, at that very moment he asked? 2 A No. At that very moment that he asked, 3 I did not know exactly where the records were. 4 Q And was that one a the reasons you 5 said I don't think so? 6 A Yes. I didn't know where they were. 7 Unlike his testimony, the records aircraft 8 records are kept in the aircraft. We keep no 9 copies at our home base. Semantics. We keep 10 approximately one month of records in the 11 aircraft. After a month we pull them out, and 12 then those months are kept at our base 13 operations. 14 So if you were to walk in and say I 15 want to see your records from a month ago, 16 regardless where the aircraft was, I could 17 produce those. If you ask me where the records 18 are as of last week, dependingwhere the aircraft 19 is is where those records would be. 20 Q Is it a fair statement-- that's the 21 reason why you said I don't think so, and then 22 what did you do after that?

(202) 234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. NW. WASHINGTON, D.C. 20005-3701 (202) 234-4433103 1 A Well, my concern at the time, when I 2 was thinking about after, I felt I was being set 3 up, the records being in the airplane on the 4 island of Maui, I know I couldn't produce them at 5 that moment, if he wanted them. 6 And he said he wanted them now, and in 7 my mind, I couldn't produce them now. And as far 8 as contacting my attorney, I needed to get his 9 take on, if I can't produce the records as they 10 demand now, because they're on another island, 11 what do we do? And after contacting counsel, he 12 told me how to handle it, and we did. 13 Q And then what was your next step in 14 locating the records? 15 A Well, the next step was to find out 16 where the, where the aircraft was, and it as 17 located in Maui. At that time, the pilot that was 18 on standby was at a apartment that we had there, 19 which is in a place called

-- I think it was 20 Kihei. It's approximately a 30, maybe 40 minute 21 drive from the airport. 22 So what we needed to do is we

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-4433104

1 contacted the pilot, we had the pilot drive back 2 to the airport, retrieve the log book and the 3 pages that Joe wanted, and then I don't remember 4 if he faxed them or scanned them, but we needed 5 to find some kind of electronic means of getting 6 them from the island of Maui to back to 7 Honolulu, where then I, you know, informed the 8 FAA that I couldproduce those records, you know, 9 pretty pretty quickly. 10 Q Okay. But at the time the initial 11 request was made by Inspector Monfort, you 12 couldn't report any of that until you made the 13 inquiries of your personnel, correct? 14 A That's correct. 15 Q Okay. And I guess it's sort of unclear 16 from the testimony , but it looks like from the 17 inspector's statements, that was within a two18 hour period that you inquired of

-- where the 19 records were. Is that your recollection? 20 A I don't recall if it was two hours, 21 but it was pretty quick. There was no no 22 motive, on my part, to stall or delay a day or

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.. N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433105

1 hour, or anything. It's just to

-- is to find 2 out how to get them and get them, you know, ln 3 some kind a form back to the FSDO as soon as 4 possible. 5 Q And were you able to speak directly 6 with Mr. Monfort, two hours after that

-- they 7 left the

-- your office? 8 A I don't recall if I called and

-- and 9 told them they're coming, or I went them an 10 email. I don't recall how I communicatedthat the 11 records would be, you know, available soon, or 12 13 Q Both inspectors testified that it was 14 about at 12:10 p.m., which they got a call from 15 you. Do you have any argument with that? 16 A No, sir. 17 Q Okay. Is it your recollection that 18 they left on or about 10:15 that morning? 19 A It was pretty short. When he asked 20 about retrieving the records, and I didn't 21 produce them, he stood up and they left. 22 Q

(202) 234-4433 Now at the time of the request by

NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202)234-4433106 1 Inspector Monfort, did he seem agitated, or was 2 he in a big hurry to get the records? Or how did 3 you interpret the urgency of the matter? 4 A I believe, you know, as far as him 5 wanting those records right now, there was a high 6 urgency. Once I phoned him, or communicated that 7 we could get the records, then there was no 8 urgency. 9 Q And why do you say that? 10 A Because I believe either I talked to 11 him or emailed that we could do it, and then he 12 said we'll have Mac drop it off, or I'll have Mac 13 drop it off, and at a certain day or time, and it 14 all kind a happened after the fact. But if he 15 didn't need it, if it was two hours, or two and a 16 half hours later, there was no urgency to say, 17 okay, I want them, and I want them

-- you deliver 18 them right away, and we would have complied on 19 the same day. 20 Q Okay. Based on that statement, the 21 Complaint in this matter was filed on February 22 14th, 2014.

(202) 234-4433 Were you surprised to get this

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433107 1 Complaint? 2 A Yes, absolutely. 3 Q And why is that? 4 A I didn't think I did anything wrong, 5 and when notified that the mission we were doing 6 was in question, we ceased immediately, and it's 7 been my practice to comply with what

-- 8 Q Well, let me ask you this. Based on 9 your experience as an operator, is it fairly 10 common for you to sit down with your POI and 11 discuss things that maybe couldhave done better, 12 you could have done better? Or, you know, this 13 kind a stuff, off-the-record type of 14 communication between operator and POI? 15 A Yes; absolutely. In my almost 20 years 16 of doing this, that's been the practice. 17 Q So you were the meeting of 18 September 17th, is it fair to say that you were 19 you thought that was the end of it, once you 20 produced the records? 21 A 22 Q

(202)234-4433 Yes, sir. And why is that?

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1 A Because after I explainedmy side, or 2 my interpretation, and complied with his record 3 request, he would find out yes, we did do the 4 missions. I didn't hide that. I didn't deny we 5 did the missions. You know, if, if some 6 administrative action was due, I expected, okay, 7 he would send me a letter or -- or something of 8 that nature. But I thought it was a done deal. 9 Finished. 10 Q Okay. Now I need to ask you a couple 11 questions to clarify the relationship between 12 InspectorMonfort and SchumanAviation. What was 13 your understanding of why he was no longer your 14 POI? 15 A There were -- and it startedoff with 16 the movie manual operations. It was one 17 particular shoot, I went to the FSDO manager, and 18 escalatedup to region, because I felt Joe put us 19 in a -- not only do I think they

-- he

-- 20 He was able to convince the local 21 manager to remove my movie manual based on safety 22 issues, and my letter back to the, the manager of

(202)234·4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE.• N.W. WASHINGTON, D.C. 20005·3701 (202)234-4433109 1 the FSDO, refuting Joe's issues of safety, when 2 he was the one that created the unsafe 3 environment that I had to operate in. So my 4 movie manual was immediatelyremoved, and it took 5 us, I want to say, several weeks or more to get 6 it back, finally get it back. 7 Q Did you get it back? 8 A We did get it back. 9 Q And did Inspector Bartler end up 10 overseeing? 11 A Yes. When I had gone to region and 12 asked to speak to the manager, and it ended up 13 being Kawehi Lum, and she flew out to Honolulu 14 cause the it was getting, in my mind, pretty 15 bad, the relationship between Joe and I, 16 specifically related to movie operations. 17 And I felt I could no longer conduct 18 business, which the movie industry

-- in this 19 case it was Hawaii Five-0, which I'm now still 20 on, on my fifth year of conducting film 21 operations for them, I could no longer continue 22 if Joe was going to be my POI on the movie side.

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1 His, in my opinion, lack of 2 experience, lack of knowledge of the industry, 3 and our capabilities, put me at a disadvantage. 4 And when the local managers, Casey and Kawehi, 5 whatever meetings they had, they came to see me, 6 and they said their remedy was that they were 7 going to take Joe off my movie manual 8 responsibility, and keep him on as my POI. And 9 then I found out that they had asked Inspector 10 Bartler to resume those duties as overseeing my 11 movie operations. 12 Q And this, these situations occurred 13 between the 17th of September 2012 and the time 14 the Complaint was filed in February of 2014? 15 A I would guess so. 16 Q Okay. Mr. Schuman, is there anything 17 else you want to add as to why you're resisting 18 this civil penalty? 19 A Yes, sir. There's been several, I 20 guess conversations, between my counsel and the 21 FAA counsel, and wanting to settle this, and

-- 22 and

(202) 234·4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433111 1 Q Well, we can't discuss settlement 2 negotiations here. But just as to your 3 understandingof what you did and what you didn't 4 do, and your belief in your position. 5 A The reason I'm sittinghere is because 6 I believe I didn't do anything wrong, and my 7 efforts to try to get the FAA inspectors to give 8 me an interpretationof what I was doing, when it 9 went unanswered, I conducted operations. So 10 again I feel I was set up, because anyone of 11 them, or any of

-- any of the inspectors could 12 have said to cease or stop, or for whatever 13 reason, would have derailed it, and I wouldn't 14 have done it. 15 Q What would be the impact of

-- they 16 FAA is asking for a $28,000 civil penalty in this 17 case. What would be the impact on your operations 18 and your company, if you had to pay such a fine? 19 A The financial impact wouldbe

-- would 20 be high. Currently, the State of Hawaii's economy 21 you know, I'm currently running about 34 22 percent off of last year in my helicopter

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1 operations. So, you know, I don't believe the 2 penalty should be there. I don't believe there 3 should be a financial penalty for what I 4 believe I didn't do anything wrong. 5 Q One last question. As-- you mentioned 6 earlier that

-- the amount of compensation you 7 received from Mokulele. What was the gross and 8 the approximatenet to your company for that week 9 of operations? 10 A Well, after concludingthe-- the math 11 on this, I calculated that I probably lost about 12 $24,000 trying to do this job. 13 MR. FERRARA: I have no further 14 questions, Your Honor. 15 JUDGE GOODWIN: Cross. 16 MR. BOBERTZ: Yes, Your Honor. But I 17 would ask for a short comfort break. 18 JUDGE GOODWIN: Sure. I hate to put you 19 on the spot. What's your guesstimate on cross? 20 It's not going to be five or ten minutes. 21 MR. BOBERTZ: No. 22

(202) 234-4433 JUDGE GOODWIN: Then why don't we do

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-4433113 1 this. It's 11:30. Let's take a lunch break. I'm 2 going to ask you to be back by 12:30. If you're 3 back before that, we'll go on the record and 4 resume from there. I'm going to instruct the 5 witness not to discuss your testimony during the 6 course of this hearing. 7 You know, if you're a little late 8 gettingback at 12:30, don't worry about it. When 9 everybody's here and ready, we'll be-- we'll go 10 back on the record and with the cross11 examination. Okay. So we're going to go off. It's 12 11:30. Try to get back around 12:30. When 13 everybody gets here, we'll go on the record. 14 (Whereupon, the above-entitledmatter 15 went off the record at 11:32 and resumed at 12:37 16 p.m.) 17 JUDGE GOODWIN: I remind the witness 18 you've been previously sworn. Mr. Bobertz. 19 20 21 22 Q

(202)234-4433 MR. BOBERTZ: Thank you, Your Honor. CROSS-EXAMINATION BY MR. BOBERTZ: Good afternoon, Mr. Schuman.

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(202)234-4433114

1 was a lot of testimony, on direct, from you, I 2 think, regarding your understanding of the

-- 3 what was okay and not okay to do. But I guess I'm 4 still not clear. Can you please describe to me 5 why you decided it was okay to conduct your 6 operations that you did for Mokulele? 7 A Number one, startingoff with a phone 8 conversation I had with Joe. 9 Q And what was the date of that? 10 A I don't recall. Prior to us commencing 11 operations. 12 Q Do you recall about, you know, a day 13 prior? A week prior? A month prior? Six months 14 prior? 15 A Well, it was when he

-- when he was 16 in, I believe, Texas. 17 Q 18 training? 19 A 20 Q 21 A 22 Q

(202) 234-4433 You called Mr. Monfort ln Texas. In

Yes, sir. Okay. How did you reach him? Telephone. Cell phone?

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433115 1 A Cell phone. 2 Q So you had

-- 3 A Well, his cell phone. 4 Q You had Inspector Monfort's personal 5 cell phone to call him? 6 A I don't know if it's personal cell 7 phone or government cell phone. 8 Q But you had down, you could access Mr. 9 Monfort on his cell phone, if you needed to? 10 A Yes. Most a the POis I've had in the 11 past have given me their cell phones, so we can 12 contact them any time we had a question outside 13 maybe normal business hours. 14 Q So while we're on that subject, why 15 didn't you call him in this regard when you had a 16 question about the regulations? 17 A I did. But he had left Honolulu. 18 Q Okay. So you still were able to call 19 him when he was in Texas for

-- according to what 20 you just said. Why didn't you call him 21 specifically about this? 22 A

(202) 234-4433 I did, specifically about Kona.

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1 Q Specifically. And what did he say? 2 A He had no issue with it. 3 Q He said he had no issue with your 4 operations. So okay. Do you have the exhibits ln 5 front of you, Mr. Schuman? 6 A I do. 7 Q Can you please turn to Exhibit A. A-6. 8 Page nine of ten. So on the bottom page, it's 9 your email to Joe, asking him what? 10 A Question number one was an 11 interpretation on FAR 119.53(f) 12 Q And what did-- what was Mr. Monfort's 13 response? 14 A I don't recall. If you're asking 15 Q An email directly-- it's on the top 16 of that same page in his email response. 17 A Oh. You want me to read it? 18 Q Well, sure. 19 A Richard, I have been directed to 20 request that you provide this office a hard copy, 21 written letter, with your exact specific request 22 with who, what, when, and where you want to

(202)234-4433 NEAL R. GROSS COURT REPORTERS ANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-4433117 1 conduct this operation, and this office will 2 forward your request to the region for review. 3 Q And then the next few sentences. 4 A As far as a formal legal 5 interpretation of Federal Aviation rule, I will 6 have to call Region Legal Department on Monday on 7 how to get this done. 8 Q And finally? 9 A At this point ln time, the Honolulu 10 FSDO does not find this interpretation of the 11 rule applicable to your proposed scenario. 12 Q So on July 20'h, 2012, you had this 13 email exchange. Or July 19'h and July 20th, with 14 InspectorMonfort. And yet you're testifyingthat 15 some time after that, you called him and he said, 16 I have no issue? 17 A Well, I don't know the dates he was 18 gone, so I don't know if it was before or after 19 this. 20 Q Whether it was before or after, 21 doesn't it seem .strange that he would tell you to 22 ask

-- make your request in detail, in writing,

(202)234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234·4433118 1 and that at this point we do not find your 2 interpretation applicable, and yet you're saying 3 you had a phone call with him where he said I 4 have no issue with it? 5 A It's kind of semantics. I mean, the 6 discussion which you know, we both don't 7 recall the exact words, or -- but it was about 8 the mission to Kona, and my discussionwould have 9 been related around the interpretationof 135 on10 demand, which to today, I was commuter, I was 11 scheduled, I was 135. When a individual company 12 calls to provide air transportation from point A 13 to point B, we were authorized to do it. 14 Q Okay. Sorry, go ahead if you had more. 15 A No. 16 Q Okay. We'll get more into that in a 17 moment. But

-- So if you had a conversation with 18 Inspector Monfort and he said he had no issue 19 with it, why, then, are you writing to the POI of 20 Mokulele in a email, August 6'h, and still asking 21 for permission, if you felt like you had 22 permission from Inspector Monfort? Why then go

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433119 1 and ask agaln from another inspector who's not 2 the POI? 3 A He is a POI. 4 Q He was not your POI. 5 A Correct. 6 Q Why? Why, if you felt like you had 7 permission already from a phone call with 8 InspectorMonfort, are you writing to the POI for 9 Mokulele, asking for permission again? 10 A It was, I think said recommend or 11 suggested my -- by my chief pilot to include Mr. 12 Santa Elena in to the email process, because it 13 was Mokulele that was asking us to support them, 14 and to inform their POI of this potential 15 upcoming mission, and see if the two agreed. 16 Q So you knew there were potential 17 issues with what you were doing, asking all these 18 questions? 19 A No. It was more to back up my -- as I 20 stated earlier, that at this point in time, our 21 relationship started to get tenuous. So it was 22 more like to

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433120 1 Q So you were certain that the 2 operations were okay? 3 A I was certain they were okay. 4 Q Then why ask at all? 5 A To make sure the FAA get it in 6 writing. 7 Q Where does it allow you to get an op 8 spec amendment verbally? Is there somewhere it 9 says that you can proceed with something you're 10 not authorized to by your operation 11 specifications without getting a change? 12 A No, I don't think that would be 13 correct. 14 Q So let's go back to your understanding 15 of why it was correct. You started to talk about 16 doing-- you believed it was on-demandoperations 17 you were conducting for Mokulele? 18 A Well, as my email on page five of ten, 19 to Ed, more specifically outlined we were -- we 20 have a -- we had a current arrangement, kind of 21 with Mokulele, and they may need or want our 22 assistance ln to Kona, and because of my

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433121 1 interpretation, it was set up on a charterbasis, 2 then my question to Ed, being the POI for 3 Mokulele, for his interpretation. 4 Because at the time it wasn't set up 5 like where, okay, Richard, I want you to start on 6 this date. I want you to continue servicingthese 7 lines for a period a time, like we were-- yes. 8 So it was, my understandingat the time, was very 9 short. I don't know why they needed help. Don't 10 know why they're asking. But I was trying to

-- 11 ahead of them calling and asking, to try to get 12 that interpretation. 13 Q So this email to Edward Santa Elena 14 was August 6th. And the operation started 15 September 8'h through 13th. About a month later. So 16 did you make any further effort with the FAA to 17 clarifythis? You sent a email. I understandyou 18 say you didn't get a response. 19 A True. 20 Q Did you make any further efforts to 21 get an answer from the FAA? 22 A

(202) 234·4433 Not after the phone call or the two

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1 emails. 2 Q And so according to the August 6th 3 email to Ed Santa Elena, you still had some doubt 4 about the operation, yet you went ahead a month 5 later and conducted them. 6 A I didn't have a doubt. 7 Q Then why are you asking? 8 A To cover my ass. Excuse the language, 9 sir. Maybe to prevent what we're doing right now. 10 Q Well, so youhave done, you have gone 11 through the official process before to get 12 authorityto have your op specs, C070 modified to 13 include airports you wanted to do commuter 14 operations to, haven't you? 15 A For the airports that we wantedto do 16 commuter operations to. That's correct. 17 Q So you knew the process to get to 18 formally change your op specs, didn't you? 19 A To airports that we wanted to do 20 commuter operations to. That's correct. 21 Q So it's your opinionthat you were not 22 doing commuter operations in this case?

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.. N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433123

1 A That's correct. 2 Q Did you know that you were not going 3 to make any money at the time you agreed to do 4 the operations for Mokulele? 5 A No, sir. 6 Q Isn't it true that you previouslytold 7 Inspector Monfort, that given a choice between 8 making money or violating the regulations, you 9 would violate the regulations? 10 A I don't recall a statement like that. 11 Q We talked about the September 17th 12 inspection, where the two inspectors came to your 13 office, and I believe you testified on direct, 14 that you didn't know where the records were at 15 the time, when they asked you for your records. 16 A At that moment, that's correct. 17 Q Then why didn't you say so? 18 A Well, what was going through my mind 19 at that time, as I stated, is I felt I was 20 getting set up. 21 Q Okay. So if you felt you were set up, 22 what does that have

-- why would that prevent you

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433124 1 from saying, I don't know where my records are? 2 A Well, that would be kind of dumb. 3 Q Why is that? 4 A I'm the director of operations. If you 5 were to say, well, I don't know where my records 6 are. I mean, I know they're somewhere in my 7 building or they're somewhere in the aircraft. I 8 mean, I had an idea. But I didn't know exactly 9 where they were at the time he asked me. 10 Q Exactly where. So you didn't know 11 do you not keep a copy of those records in your 12 office? 13 A We do not. 14 Q You don't have a computer system that 15 keeps those records, where you could have easily 16 accessed them and printedthem, and given them to 17 Mr. Monfort? 18 A 19 Q 20 A 21 airplane. 22 Q

(202)234-4433 We do not. And it turns out that they were where? On the island of Maui,

In which airplane?

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(202) 234-4433125

1 A I don't recall the N number. Was 7 2 Mike Alpha? Or I need to look at the log sheet. 3 Q Okay. Well, there were two aircraft 4 involved in the flights to

-- for Mokulele. Were 5 they both in Maui? 6 A No, sir. 7 Q So where was the other aircraft? 8 A I couldn't tell you on that day or 9 time, but somewhere between Honolulu or Molokai. 10 Q Okay. So in regards to the aircraft 11 that was in Maui so it sounds like you talked 12 about calling up right away and locating your 13 pilot that was in Maui, regarding the records. So 14 what about the other pilot? What about the 15 records in the other aircraft that you were 16 calling to get? Did you call to get those 17 records as well? 18 A I don't think Joe asked me for that 19 aircraft records. 20 Q So you also

-- you testified that the 21 pilot was ln Maui, 30 minutes away from the 22 airport, and you had him drive back to the

(202)234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433126 1 airport, collect the records, and then I believe 2 fax or scan them to you? 3 A Yes. I don't know what the drive time 4 was, but yes, that would be corrected. 5 Q Okay. So your contention that you -- 6 the aircraft the records requested were 7 actually on that aircraft in Maui rather than 8 present in your facility, is pretty important to 9 this case. Would you agree? 10 A Yes, sir. 11 Q And it supports your story that you 12 didn't know where the records were at the time, 13 or they weren't at your facility. 14 A They definitely were not at my 15 facility. 16 MR. BOBERTZ: So is there a reason you 17 didn't call the pilot here to testify today? 18 MR. FERRARA: Objection. We don't have 19 the burden of proof here, Your Honor. 20 JUDGE GOODWIN: Sustained. I'mnot sure 21 that that's-- 22 MR. BOBERTZ: Is there a reason you

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433127 1 didn't at least get a declaration from that 2 pilot? This goes to their affirmative defense, 3 Your Honor, for why they didn't have the records 4 there. 5 MR. FERRARA: The same objection. 6 JUDGE GOODWIN: Well, it's their 7 affirmative defense. Sustained. 8 THE WITNESS: I don't know what that 9 means. 10 MR. BOBERTZ: One moment, please, Your 11 Honor. 12 JUDGE GOODWIN: Sure. 13 (Pause.) 14 BY MR. BOBERTZ: 15 Q Mr. Schuman, you testified that this 16 civil penalty of 28,000 would have a high impact 17 on your company, that you were 34 percent off 18 your income, I suppose, from last year due to the 19 economy. How much has your company grossed this 20 year, approximately? 21 A 22 Q

(202) 234-4433 About 7 million. And last year?

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1 A It'd be 6 million. 2 Q So that was gross. And what about net? 3 A Net for last year? 4 Q And this year, to date. 5 A Is that what we would claim on our tax 6 returns? Because the reason I ask that 7 question, it's

-- as an operator you have gross 8 sales, expenses, and then the accountants at the 9 end of the year, for tax purposes, do an interest 10 and depreciation expense, and they nail you down 11 to where I make almost nothing. 12 Q Can you be more specific? Is almost 13 nothing to you a couple hundred thousand dollars? 14 Ten dollars? 15 A 16 Q 17 A 18 Q 19 today? 20 21 22

(202) 234·4433 Oh, no. A hundred dollars? In most years, we get a tax refund. Did you bring any tax returns with you

THE WITNESS: No, sir. MR. BOBERTZ: No further questions. JUDGE GOODWIN: Any redirect?

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C. 20005-3701 (202) 234-4433129 1 MR. FERRARA: A couple questions, Your 2 Honor. 3 REDIRECT EXAMINATION 4 Q Mr. Schuman, in response to FAA 5 counsel's questions about the issue of the 6 records, you know, you agreed with him that it's 7 an important issue in the case. 8 I need to make it clear, and we need 9 to make the record clear. When you said ui don't 10 think so," what did you mean by that? Did you 11 mean you were refusing to do this, or you just 12 didn't know where the records were? 13 A Yes, it was like

-- kind of recall 14 that, that instant in time, I didn't know where 15 the records were that, at that moment. And 16 because he wanted them now, I didn't know how, 17 really, you could comply with them. I think he 18 did ask again, and then they stood up and left. 19 You know, in hindsight, if he would have asked, 20 you know, where are they, or when can we get 21 them, or it probably would have taken a 22 different course. But it didn't.

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433130 1 He asked, I believe about twice, and 2 stood up and left. 3 Q And then as soon as they left, what 4 did you do? 5 A Called my counsel. 6 Q Okay. And then after that? 7 A I might have calledmy chief pilot or 8 my -- or my check airman, and said we need to get 9 ahold of the pilot, find out

-- you know, call 10 him on his cell phone, tell him we need the 11 records from this date period, and figure out

-- 12 you know, get back to the airport, get those 13 records, and get them to us, either try to find a 14 fax machine or a scan machine, or something, but 15 somehow get them to us, so I could get them to 16 the FSDO. 17 Q And then once you found out where the 18 records were, you called Inspector Monfort; 19 correct? 20 A 21 22

(202) 234-4433 Yes, sir. MR. FERRARA: No further questions. JUDGE GOODWIN: Mr. Bobertz, anything

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.. N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433131 1 based on that line of questioning? 2 RECROSS-EXAMINATION 3 BY MR. BOBERTZ: 4 Q Mr. Schuman, isn't it true that the 5 Inspectors Monfort and Bartler, Kyle Bartler, 6 actually specifically asked you in their second 7 question: Are you sure you want to deny us access 8 to your records, to the records? And you replied 9 that you have to talk to your attorney first? 10 A Well, by denying them access, I didn't 11 have them in my possession to give to them. 12 MR. BOBERTZ: No further questions. 13 JUDGE GOODWIN: Anything else for this 14 witness? 15 MR. BOBERTZ: Nothingmore, Your Honor. 16 JUDGE GOODWIN: Mr. Schuman, you can 17 step down. Please don't discuss your testimony 18 with anybody prior to the conclusion of the 19 hearing. 20 Counsel. 21 MR. FERRARA: The Respondent rests. 22 JUDGE GOODWIN: Mr. Bobertz. Want a

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433132 1 minute to think? 2 MR. BOBERTZ: Yes. Thank you. 3 JUDGE GOODWIN: I tell you what. It's 4 1:00 o'clock. We'll take a break till five after 5 1:00. Give both of you a chance to collect your 6 thoughts. 7 (Whereupon, the above-entitledmatter 8 went off the record at 1:02 p.m. and resumed at 9 1:08 p.m.) 10 JUDGE GOODWIN: Mr. Bobertz. 11 MR. BOBERTZ: Thank you, Your Honor. 12 The Administrator would like to call Inspector 13 Joe Monfort back to the stand as a rebuttal 14 witness. 15 JUDGE GOODWIN: Sir, please take the 16 stand. I remind you you're still under oath. 17 THE WITNESS: Yes, Your Honor. 18 JUDGE GOODWIN: Counsel. 19 WHEREUPON, 20 JOSEPH MONFORT 21 WAS RECALLED AS A REBUTTAL WITNESS AND, HAVING 22 PREVIOUSLY BEEN DULY SWORN, WAS FURTHER EXAMINED

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1 AND FURTHER TESTIFIED AS FOLLOWS: 2 DIRECT EXAMINATION 3 BY MR. BOBERTZ: 4 Q InspectorMonfort, I believeyou heard 5 Mr. Schuman testify on direct that he

-- alleging 6 that he had a conversation with you prior to 7 these flights, wherein you gave him some kind of 8 permissionto go forward with them. Is that true? 9 THE WITNESS: No, sir. I deny that. I 10 don't recall any call where I authorized him to 11 conduct commuter operations, over my cell phone. 12 Q Have you had other conversations with 13 Mr. Schuman over the past, about him making 14 requests for certain types of operations, 15 questions, and what not? 16 A As you can see ln the email, that I 17 responded to Mr. Schuman, saying that on-demand 18 operations could never support a commuter 19 operation, and he was un -- he

-- he understood 20 that. 21 22 Monfort.

(202)234-4433 MR. BOBERTZ: Thank you, Inspector

NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433134 1 MR. FERRARA: One moment, Your Honor. 2 CROSS-EXAMINATION 3 BY MR. FERRARA: 4 Q If there was a call made by Mr. 5 Schuman, it had to be around that time period as 6 he testified. On your direct or my cross7 examination of you earlier on this morning, you 8 said you didn't remember anything or 9 everything because it was two years ago. 10 Do you recall something to that 11 effect? 12 A Yes, sir. But I know for a fact I 13 never told Mr. Schuman he can conduct commuter 14 operations for an on-demand

-- with an on-demand 15 operation. 16 Q That's not what the question is. The 17 question is whether he made a phone call to you 18 some time around your email of the 20th of July. 19 You don't recall a phone call, or you're 20 absolutely certain there wasn't a phone call? 21 A I do not recall the phone call date or 22 time. I don't know if he'd asked me about

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433135 1 commuter-- I don't remember. But I do know for a 2 fact, and I will state this again. Mr. Schuman 3 was denied to do commuter operations for an on4 demand operation. 5 This is not the first time Mr. Schuman i 6 had asked to do this. It was approximatelya year 7 earlier, Mr. Schuman had asked to operate on8 demand for a 121 air carrier, and he asked for 9 regional guidance, which we got on a Friday 10 evening about 7:00 o'clock, which again he was 11 denied, commuter operations with an on-demand 12 operation. 13 Q But you have no recollection of 14 whether you denied him on-demandoperations on or 15 about July 2nd

-- or July 20'h, 2012; correct? I 16 mean 17 A Yes, sir. I could never approve an 18 operationthrough a phone for commuter operations 19 without op specs. 20 Q Let me ask you this. 21 Did you get the August 6'h email that 22 was sent to both Inspector Santa Elena, yourself,

(202)234A433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433136 1 and Mr. Grace of Mokulele? 2 A Sir, I was cc'ed that email and I was 3 out of town on a CF

-- I was conducting CFI 4 certification for helicopters at Dallas-Fort 5 Worth. And I had pictures for the dates that I 6 was in Dallas. 7 Q So you're telling me you have no 8 access to your email, even though you're still 9 working for the FAA? 10 A Sir, when we attend classes, we don't 11 check our email. We don't have our Government 12 computers with us. We are attending school. 13 Q You can't get access to your email 14 while you're at school? 15 A Again, Mr. Schuman has my personal 16 cell phone for any emergencies, and he could call 17 me directly. But I don't-- I did not have access 18 to my email while I'm at AFS 60. 19 Q That's what he's saying he did. He 20 calledyou directly on your email. I mean on your 21 cell phone, back in

-- on or about July 20th, 22 2012.

(202) 234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-4433137 1 A Again, I can't approve anything over 2 the phone, sir. 3 Q So you don't recall a phone call? It's 4 not that absolutely wasn't made; right? 5 A Sir, the 6 Q Let me clarify that question. 7 A Go ahead. 8 Q You don't have any records saying Mr. 9 Schuman didn't call me about this; correct? 10 A Affirmative. Yes, sir. 11 MR. FERRARA: I have no further 12 questions. 13 JUDGE GOODWIN: Mr. Bobertz. 14 MR. BOBERTZ: Nothingelse, YourHonor. 15 JUDGE GOODWIN: You can step down. 16 Again, thank you, and the same admonition. Please 17 don't discuss your testimony during the pendency 18 of the hearing. 19 Anything else, gentlemen? 20 MR. BOBERTZ: Yes. The Administrator 21 also calls Inspector, Aviation Safety Inspector 22 Nathan Dickinson to also rebut testimony of Mr.

(202) 234A433 NEAL R. GROSS COURT REPORTERSAND TRANSCRIBERS 1323RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005·3701 (202) 234A433138 1 Schuman on direct. 2 JUDGE GOODWIN: Okay. Sir, please 3 approach the stand and raise your right hand. 4 WHEREUPON, 5 NATHAN DICKINSON 6 WAS CALLED AS A WITNESS ON REBUTTAL, AND HAVING 7 FIRST BEEN DULY SWORN, WAS EXAMINED AND TESTIFIED B AS FOLLOWS: 9 JUDGE GOODWIN: Pleasebe seated. State 10 your name for the record and spell your first and 11 last name. 12 THE WITNESS: Nathan Dickinson. N-a-t13 h-a-n. D-i-c-k-i-n-s-o-n. 14 JUDGE GOODWIN: Counsel. 15 DIRECT EXAMINATION 16 BY MR. BOBERTZ: 17 Q Inspector Dickinson, where are you 18 employed? 19 A I'm an aviation safety inspector with 20 the Western Pacific Region, Flight Standards 21 Division, in the Air Carrier Branch. 22 Q And can you tell

-- you mentionedAir

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433139 1 Carrier Branch. What is your position there? 2 A Specifically, I'm referred to as a 3 regional specialist for 135 air carrier. So on 4 the operation side. 5 Q And what does that mean? 6 A Basically that means I'm-- I'm a -- 7 I'm a conduit between field offices and 8 headquarters. I'm a middle man essentially. But 9 for issues that field offices run into. Either 10 they have to, by virtue of policy or regulation, 11 or something in the field office, if somebody 12 doesn't understand something, those issues come 13 up to me and I handle them, either work with 14 headquarters or somebody else to come up with an 15 answer. Or I go ahead and I give a response back 16 to the field office. 17 Q Can you describe your experience with 18 135 operations and regulations, and requirements 19 for 135 operators. 20 A Sure. I've worked for the FAA for a 21 little over eight years. I've been an aviation 22 safety inspector in general aviation operations

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE. N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433140 1 the whole time. I've been a P

-- I was a POI for 2 a little over five years, 135 operators, ranging 3 from single-pilot operations through turbojet, 4 ten or more operations. I've been in my current 5 role as a regional specialist since October of 6 last year. So a little over a year. 7 8 And in my role now, I very frequently 9 I mean I very frequently deal with the 10 regulations. In fact, part of my duties are 11 enforcement reviews before they get passed onto 12 our legal office. 13 Q Can you elaborate a littlebit more on 14 your familiarity with the regulatims and the 15 requirements for 135 operators. 16 A Certainly. I, as a POI, I

-- I mean, 17 I deal with them on a, almost on a daily basis. I 18 mean we live, you know, under a system of rules. 19 You know, the FARs really control everythingthat 20 we do in this industry. 21 So I mean, I interact with them daily. 22 Operators, on their own, I frequently would

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1 discuss regulations with them; you know. 2 Certainly with other attorneys, with the FAA. 3 MR. BOBERTZ: Your Honor, I tender 4 Inspector Dickinson as an expert on the 5 requirements for 135 operations. 6 JUDGE GOODWIN: Want to voir dire, Mr. 7 Ferrara? 8 MR. FERRARA: I have no objection to 9 that. 10 JUDGE GOODWIN: All right. The court 11 will accept him as an expert ln the area 12 proffered. 13 BY MR. BOBERTZ: 14 Q Thank you, Your Honor. 15 So Inspector Dickinson, I believe you 16 heard Mr. Schuman testify that he was he 17 believed he was conducting on-demand operations 18 with the flights he was conducting for Mokulele. 19 Was he? 20 A I

-- I'm not sure exactly how, how to 21 answer this, but in terms of the proper 22 nomenclature. But no, I don't believe so.

(202)234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433142

1 Q Well, I'm sorry. Let me -- I'm sorry 2 to interrupt you for a minute, but what I'd 1ike 3 to go ahead and put Regulation 14 CFR 119.53. 4 It's, you know, I guess -- I don't know if you 5 need to even take judicialnotice, but

-- because 6 it's a FAA regulation. But I've marked it as 7 Administrator's Exhibit 8 JUDGE GOODWIN: What is it again? 9 MR. BOBERTZ: It's just a copy of our 10 regulation, one of our FARs. It's 14 CFR 119.53. 11 Perhaps the court reporter could help 12 with what exhibit I'm on. I think it was -- I 13 think this would be A-11. But does that sound 14 right? Thank you. 15 JUDGE GOODWIN: Okay. Wait a minute. 14 16 CFR. What's the full cite again? 17 MR. BOBERTZ: 119.53. 18 JUDGE GOODWIN: That's one of the 19 reasons I carry my iPad. I've got all the stuff 20 downloaded on my iPad. I learned that trick from 21 Judge Bowens. 22 BY MR. BOBERTZ:

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433143 1 Q So Inspector Dickinson, you just 2 mentioned that you didn't believe that what

-- 3 the operations that were being conducted in this 4 case could be classified as on-demand. 5 Can you elaborate on that. 6 A Yes. 7 Q And if they're not on-demand, what 8 just start -- if they're not on-demand, what are 9 they? 10 A In the 135 realm, you can either be a 11 commuter or on-demand. 12 Q Okay. 13 A So if you're not on-demand, you would 14 be a commuter. 15 Q Okay. And why are their flights in 16 this case commuter? 17 A There's two components to it. One 18 would be scheduled operations. In other words, 19 it's pre-coordinated, it's sold to the general 20 public, individual tickets, a published flight 21 schedule. That's one portion of it. 22 The other portionof it is frequency.

(202) 234-4433 NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433144 1 Five or more flights in a week falls under the 2 commuter category. 3 Q And so which of those two categories 4 did Schuman fall into? 5 A Commuter. 6 Q No. I'm sorry. You mentionedthere are 7 two ways somebody could be a commuter, cause 8 they're either 9 A Oh, Okay. 10 Q They have a published schedule, hold 11 themselves out to the public, and then 12 A So given, given what I saw in this 13 case, right here, if I understand you correctly, 14 the flights that Schuman conducted were made 15 available to the general public, they sold 16 individual tickets, and there was a frequency 17 greater than five in a week. There were 24 in 18 that

-- that one week period. 19 So they would meet the criteria of 20 both tests. 21 Q And are both required for him to be 22 considereda commuter? Or is it one or the other?

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433145 1 So is he a commuter because he flew more than 2 five times in a week? Or is he a commuterbecause 3 he substituted for Mokulele conducting commuter 4 operations? Or for both reasons? And either one 5 would suffice. 6 A No. You have to meet

-- you have to 7 meet both. When

-- FAR Part 110.2 gives you the 8 definitions, and if you look at the definitionof 9 a commuter operator, it says "conducting 10 scheduled operations with a frequency 11 greater than five times a week.n 12 Q I see. Okay. So I think my question 13 was confusing. 14 So what if Mr. Schuman had conducted 15 less than five operations for Mokulele? Then what 16 would he be considered? What would those 17 operations be considered? 18 A There is a provision, FAR 110.2, when 19 you look under On Demand, scheduled operations 20 less than four times in a week, that is allowed. 21 That is in the definition. 22 Q

(202) 234·4433 Okay.

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202)234-4433146
1 A But in this case, because Schuman 2 Aviation was substituting for another carrier 3 that was operating as a commuter, they had to 4 operate as a commuter as well. 5 MR. BOBERTZ: No further questions. 6 JUDGE GOODWIN: Mr. Ferrara. 7 MR. FERRARA: Just a few on cross8 examination, Your Honor. 9 CROSS-EXAMINATION 10 BY MR. FERRARA: 11 Q Inspector, you testifiedthat you were 12 you had experience in the field as a POI for 13 about five years? 14 A Yes. 15 Q Okay. And you probablyheard

-- you've 16 been sitting in the courtroom the whole day; 17 correct? 18 A Correct. 19 Q Okay. And you probably heard my 20 question about, you know, what the operational 21 duties of a POI are. 22

(202)234-4433 Would you agree that

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 in your

(202)234-4433147 1 experience, a POI is there to help the operator 2 sort of steer through the maze of these Federal 3 Aviation Administration regulations? One of the 4 duties? 5 A I would agree with that; yes. 6 Q Okay. Now you've seen the testimony, 7 and I assume you went over some of the exhibits? 8 A Some of them; yes. 9 Q Okay. And you saw the email threads? 10 A I did. 11 Q Okay. And you heard my client testify 12 as far as telephone conversations and stuff, and 13 you heard InspectorMonfort saying, well, I don't 14 recall a telephone conversation in July. But 15 there is a definitivemoment, wouldn't you agree, 16 and that's September 17th, in 2012, where it was 17 laid out that what Schuman was doing wasn't 18 legal; correct? 19 A To answer this as directly as I can, 20 I had said that at the regional level, one of my 21 responsibilities is to review enforcement cases 22 that come out of the field, and determine the

--

(202)234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W. WASHINGTON. D.C. 20005-3701 (202) 234-4433148 1 the applicability of it. 2 I didn't have any interaction. That 3 wasn't my role in this case. I was brought in 4 specificallyfor this question. Honestly, I would 5 have to look a little closer, to say 6 definitively, September 17, 2012, was the day. 7 Q Sure. And I respect that. What I'm 8 getting at is: Does it seem to you that between 9 the operator and FSDO, because there's more than 10 one inspector involved, there was some 11 miscommunication going on? 12 MR. BOBERTZ: Objection. Relevance. 13 MR. FERRARA: As far as - I'm sorry, 14 counsel. 15 JUDGE GOODWIN: Overruled. 16 BY MR. FERRARA: 17 Q You can answer. 18 A Would you mind stating it, stating 19 your question again. 20 Q Okay. You know, based on your 21 experience, and now you have experience at two 22 levels, one POI, and now up at Regional, looking

(202) 234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE

.. N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433149 1 at the record, the emails, the testimony of 2 everybody, is it safe to say, in your opinion, as 3 an expert in interpretation of FARs, did it seem 4 like everything was in the air, and "up in the 5 air" until September 1"!h, 2012? 6 In other words, there was no 7 definitive statement by the FAA, one way or 8 another, that this was illegal, even though there 9 were questions. I'm just asking for your opinion. 10 A Based on what I saw with the email 11 thread, and as a former POI, that did not look 12 like there was any form of approval whatsoever, 13 and it didn't look questionable either to me. 14 Q But do you think there was any form of 15 disapproval? 16 A Yes, sir. I think there was -- there 17 was one of the emails in there, and I-- I'd have 18 to look through it to find the exact one. But one 19 of them said you're not yet approved. You know, 20 we -- we -- the

-- one of the inspectors asked 21 for, asked for exactly what you're asking for, in 22 writing.

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433150

1 Q Right. And he also said he was going 2 to, had to check with Regional to see whether 3 this type of operationwas legal. Do you remember 4 that? 5 A Okay. 6 Q Okay. Now I guess sort of an education 7 here. Even though these are not Makani Kai's or 8 SchumanAviation'spassengers-- correct? I mean, 9 they're Mokulele's passengers. 10 A Yes. 11 Q Okay. And it's Mokulele's schedule, 12 not Schuman Aviation; correct? 13 A Agreed. 14 Q Okay. One last question as to your 15 oplnlon. Is this an area of the law that

-- I've 16 seen a lot of stuff, and I've done some research. 17 It seems like there's a lot of questions and 18 answers between operators and FAA, and stuff, 19 about this area of the law. 20 I know you won't say it's ambiguous, 21 but is it subject to a lot of questions involving 22 interpretation by operators, in your experience?

(202) 234-4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433151 1 It's not exactly a 100 percent clear. 2 A I given, given these specific 3 facts, I'd have trouble agreeing with that. And 4 the reason why is this. When I was asked about 5 this question, specifically 14 CFR 119.53, Echo, 6 one of the things I looked at was the proposed 7 regulaticn in the Federal Register, dated 1995, 8 and it made it pretty clear in that, that the 9 plain language in the regulation, as published, 10 it's pretty straightforward, I think. 11 Q Okay. I'll agree with that. But 12 nowhere ln the record is there any statement by 13 Mr. Monfort, Mr. Bartler, or Mr. Santa Elena, of 14 what you just said. No one told Mr. Schuman 15 exactly what you said; is that correct? I mean, 16 you don't see anything in the record. 17 A Told specifically 18 Q What you just told me. That what he 19 was doing was not, was against regulations. 20 A I mean, as I recall, without looking 21 through it, I thought that their response -- and 22 I don't remember the date. I think it might have

(202)234-4433 NEAL R. GROSS COURTREPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433152 1 been that July 20tn email that you guys were 2 discussing. But I thought it said ln there, at 3 this time don't go forward because that doesn't 4 meet the spirit of the regulation. 5 MR. FERRARA: One moment, Your Honor. 6 MR. BOBERTZ: Your Honor, may I have 7 permission to -- the witness does not have the 8 emails being discussed in front of him. May I 9 JUDGE GOODWIN: Well, there's no 10 indicationthey're needed. If you I don't mind 11 if you take it to the witness. 12 BY MR. FERRARA: 13 Q Yes. I don't want to ambush you on 14 this one. 15 I think what you're looking at, 16 looking for is page nine of ten, up on the top. 17 A Yes, sir. That's what I'm looking 18 for. 19 Q So at this point in time, there is 20 some argument, and I'll admit that you could say 21 that this is

-- that the FSDO is saying, well, 22 this doesn't applic

-- applicable. But the second

(202)234-4433 NEALR. GROSS COURT REPORTERSAND TRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433153
1 paragraph as far as formal legal 2 interpretationof FederalAviationAdministration 3 rule, I will have to call Regional Legal 4 Department on Monday, how to get this done. 5 Now after that, there's no 6 communication between operator and POI: correct? 7 A Regarding that issue? 8 Q Yes. 9 A As far as I can tell; yes. 10 MR. FERRARA: Okay. I have no further 11 questions. Thanks. 12 JUDGE GOODWIN: Redirect based on those 13 questions? 14 REDIRECT EXAMINATION 15 BY MR. BOBERTZ: 16 Q Inspector Dickinson, would you say 17 it's okay for an operator to violate the regs on 18 the assumption that maybe it's okay, and rather 19 than wait for affirmative approval? 20 A 21 22

(202)234-4433 No. MR. BOBERTZ: Thank you. JUDGE GOODWIN: Anything else, Mr.

NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., NW. WASHINGTON, D.C.**20005~3701** (202)234-4433154 1 Ferrara? 2 MR. FERRARA: One last question. 3 Inspector 4 JUDGE GOODWIN: Just one last question. 5 RECROSS-EXAMINATION 6 BY MR. FERRARA: 7 Q Okay. Inspector, if putting yourself 8 in a position

-- you've already been declared an 9 expert in the interpretation of the FARs, and 10 based on your experience as a POI, and assuming 11 the FSDO was on notice, as late as August 6ch as 12 to what was going on, would you have responded to 13 the operator, say you can't do it? 14 Because it's clear on August 6'h, that 15 this is what he wanted to do. 16 A Yes. I would have said you can't do 17 it, and the reason why is because-- like I said, 18 if you look at FAR 119.53 Echo

-- do you mind if 19 I read the 20 Q Go ahead. 21 A Okay. The specific sentence there 22 that would be controlling.

(202)234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGT,ON, D.C. 20005-3701 (202) 234-4433155 1 "The certificateholder conductingthe 2 substitute operation must conduct that operation 3 in accordance with the same operations authority 4 held by the certificate holder.". 5 Okay. The certificate holder, 6 Mokulele, was operating under a commuter 7 authority. So Mr.

-- or Schuman Aviation has to 8 operate under, under commuter authority; okay? 9 And if you go back a little bit further, in order 10 to

-- then, if you're operating under commuter 11 authority, 14 CFR 119.49 Alpha 4, specifically 12 says each airport for scheduledoperationshas to 13 be listed ln your op spec. 14 So as a former PO-- as a POI, I would 15 have said, no, you can't do it until that op spec 16 is approved. 17 Q And I mean you're not denying that he 18 Schuman Aviation is not a commuter. I mean, 19 they are a commuter, they do have a commuter 20 certificate. You're saying that the reason you 21 would say no to him is because he didn't have 22 Kona in the op specs? That's it?

(202)234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE.• N.W WASHINGTON. D.C. 20005-3701 (202) 234-4433156

1 A Yes. 2 MR. FERRARA: Okay. No further 3 questions. 4 MR. BOBERTZ: Nothing else, Your Honor. 5 JUDGE GOODWIN: All right. Thank you. 6 Anything else, gentlemen? 7 MR. FERRARA: Nothing from Respondent, 8 Your Honor. 9 JUDGE GOODWIN: Sir, you can step down. 10 (Witness excused) 11 JUDGE GOODWIN: As I said in my 12 procedural order, I normally encourage the 13 parties to brief the issues. I think there's some 14 issues in this case that deserve expoundingupon, 15 and I've got a significant number of decisions I 16 have to write, and I can assure you, by the time 17 I get to this case I'll probably have forgotten 18 much of what's transpired. 19 What I'm going to suggest is we've got 20 the holidays coming up, and FAA counsel, most 21 Government employees are faced with issues of 22 "use or lose" leave, which I don't want to

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W WASHINGTON, D.C. 20005-3701 (202) 234-4433157 1 happen. The transcript will probably be ready ln 2 about two to three weeks. 3 Mr. Bobertz, when you get it, if 4 you'll call Mr. Ferrara. As I said earlier this 5 week, you two work out some sort of a briefing 6 schedule. I'm going to encourageyou not to start 7 the briefing schedule until some time in January. 8 There's no pressure to get this to me 9 because I've got several dozen decisions I've got 10 to write. 11 Work out a briefing schedule. 12 Normally, it's two weeks. The FAA files a brief. 13 The Respondent replies two weeks later, and then 14 a rebuttal a week after that. But if that doesn't 15 work for the two of you, and you can agree, shoot 16 me an email and I'll put together an order. 17 If you can't agree, I'll come out with 18 a two week, two week and a week, but it probably 19 won't start until February. 20 My view is there's no sense you two 21 rushing to get a brief done that I'm not going to 22 have a chance to look at until down the road.

(202) 234-4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE ,N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433158 1 Does that work for you, Mr. Bobertz? 2 MR. BOBERTZ: Yes, Your Honor. That's 3 fine. 4 JUDGE GOODWIN: Mr. Ferrara? 5 MR. FERRARA: That'll work. I do have 6 a trial scheduled in the latter part of January, 7 so I would appreciate a push-backafter that. But 8 I can talk with Mr. Bobertz. 9 JUDGE GOODWIN: I mean, I don't have a 10 problem if you don't start this till February. 11 You know, as I shared with you earlier, and off 12 the record, Mr. Bobertz, I've got almost three 13 dozen decisions that I'm

-- what happened is I 14 had an attorney/adviserwho retired 14 months ago 15 and I'm still catching up. 16 And I don't have any administrative 17 help to help me write the decisions. So that's 18 what I'll be doing the first three months of the 19 year. 20 All right. So, you know, work it out. 21 The two of you appear to me to be quite 22 professional, and I'm sure you can work the thing

(202) 234·4433 NEALR. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202) 234-4433159 1 out. 2 So having said that, gentlemen, thank 3 you all. Safe travels from here. Some of us are 4 going farther than others. But we'll go off the 5 record. 6 (Whereupon, at 1:35 p.m., the hearing 7 was adjourned) 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

(202) 234-4433 NEAL R. GROSS COURT REPORTERSANDTRANSCRIBERS 1323 RHODE ISLANDAVE., N.W. WASHINGTON, D.C. 20005-3701 (202)234-4433160 A administration2:3 11:2 102:7,8,11,16,18 anyway31:7 $24,000112:12 61:6 66:1470:22 103:16 124:7 125:3,7 apartment103:18 $28,000111:16 147:3 153:2 125:10,15,19126:6,7 apparently41:1442:17 A-1 3:12 13:16,17 14:5 administrative 1:20 airline23:8 26:627:17 43:8 99:4 14:8,9,10 8:1319:1926:11 27:20 69:8 appear31:17158:21 A-103:19 30:21 32:15 108:6 158:16 Airlines 12:18 16:2 APPEARANCES2:1 A-11142:13 Administrator3:11 4:8 24:10 78:14 appeared8:15 A-23:1317:22 18:1,12 8:19 50:665:1574:11 airman53:16,16 130:8 applic152:22 18:14,21 74:12,17 77:1 79:15 airmen91:15,20 applicability148:1 A-33:1317:2218:2,12 89:6 132:12 137:20 airplane 103:3 124:21 applicable117:11

20:6,11,14,15,16 Administrator's 13:15 124:22 118:2 152:22 21:20 13:17 14:5,7,9,10 airplanes84:11 applied38:22 63:15 A-43:1424:16,1925:3 17:2118:1,12,21 airport7:1812:1 14:22 apply38:12

25:4,13,17,18 20:10,16 24:16,19 21:2027:1937:12,18 appreciate158:7 A-53:1424:16,2025:3 25:3,13,1826:2,9 38:7,9,1940:1561:19 approach8:22 13:12

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31:14 admissible19:21 airports36:20 37:11 approved64:18149:19 A-83:1732:14 admit19:1532:10,11 61:20 63:20 64:12,14 155:16 A-93:18 152:20 88:22 93:6,17 122:13 approximate112:8 a.m 1:164:233:21,22 admitted50:5 75:14 122:15,19 approximately7:17

75:2,3 admonished74:3 airworthiness52:5 10:11 34:17 50:16 able76:382:8 86:21 admonition 137:16 Ala1:12 66:20102:10103:20

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95:13 107:2,15 153:19 aloha79:17 arrangement120:20 134:20 137:4 AFS 136:18 Alpha22:18,18 125:2 arrangements52:22 accept141:11 afternoon 113:22 155:11 arrivals28:19 access23:9,2245:2 agitated 106:1 altitudes60:19 asked 15:10 16:4 17:7

69:20 115:8131:7,10 ago52:11102:15134:9 ambiguous 150:20 40:7,1642:749:5 136:8,13,17 158:14 ambush 152:13 51:255:1663:16 accessed 124:16 agree73:1898:13 amend43:1160:13 69:1489:2 95:2 96:7 accident67:3 126:9 146:22147:5 amended36:2,10 101:17,19102:1,2 accidents 11:4 147:15151:11157:15 amendment38:1339:1 105:19109:12110:9 accompanied8:3 67:11 157:17 42:960:1561:3,18 123:15 124:9125:18 accompanying67:7 agreed92:9 119:15 64:1 120:8 129:19 130:1 131:6 accountants 128:8 123:3129:6150:13 AMERICA 1:1 134:22 135:6,7,8 accumulated22:9 agreeing 151:3 amount69:11 70:11 149:20,21 151:4 acknowledged47:3 agreement61:2262:6,9 95:16 112:6 asking30:17 34:10

64:12 ahead75:8 118:14 Angeles2:6 60:15 64:11 85:15 acoustics6:14 121:11122:4137:7 animal69:13 98:18111:16116:9 action 108:6 139:15 142:3 154:20 announced99:3 116:14118:20119:9 activities11:4 ahold 130:9 answer52:6 62:15 92:4 119:13,17121:10,11 actual21:4,522:724:9 air63:2085:13 87:13 93:13121:21139:15 122:7 149:9,21

26:5,1828:16,1949:2 95:15118:12135:8 141:21 147:19 148:17 ass122:8 53:16 55:21 138:21,22 139:3 answered49:6 assaulted55:20 add110:17 149:4,5 answering 101:13 assert76:2,10 address81:3 aircraft21:7 22:7,16,19 answers 150:18 assistance82:6 120:22 addressed61:9 45:3,1348:10,11,14 anticipating36:16 assume43:4 147:7 addresses5:17 51:16,20 52:2,4 60:20 anybody5:3 33:1283:1 assuming 154:10 adjourned 159:7 62:1770:2 100:7 92:12 96:16 131:18 assumption 153:18 Neal R. Grossand Co., Inc. (202)234-4433 Washington DC www.nealrgross.com161

assure 156:16 52:8,1470:5 71:21 16:1317:17,20 18:4 115:20117:6118:3 ATP85:1 82:8 94:7 104:1,6 18:20 19:5,1020:3,9 119:7121:22125:16 attempt88:8 105:3 108:22 109:6,6 20:2022:15,21 23:11 126:17130:9132:12 attend 136:10 109:7,8 113:2,3,8,10 24:4,14,2225:11,22 133:10134:4,17,19 attending 136:12 113:12119:19120:14 26:7,1627:6,11 29:7 134:20,21 136:16 attention54:1 79:16 125:22130:12132:13 29:15,20 30:8,14 137:3,9153:3157:4

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' 147:15 12:1073:6105:14 2013-10804:4 81:1030:12,1631:17 Neal R. Gross andCo., Inc. (202)234-4433 Washington DC www.nealrgross.com31:1932:12,13 8:0013:2 8082:16 833:6 8th43:18,21 78:1282:9

86:1494:22121:15 9

(202)234-4433 176

NealR. Grossand Co., Inc. Washington DC www.nealrgross.com177 C E R T I F I C A T E

This is to certify that the foregoing transcript

In the matter of: Schuman Aviation Company, Ltd.

Before: US DOT/FAA

Date: 12-04-14

Place: Honolulu, HI

was duly recorded and accurately transcribed under my direction; further, that said transcript is a true and accurate record of the proceedings.

(202)234-4433 Court Reporter

NEALR. GROSS COURTREPORTERSANDTRANSCRIBERS 1323RHODEISLANDAVE., NW. WASHINGTON, D.C. 20005·3701 www.nealrgross.com