The Peninsula Airport Commission's looseness with taxpayer money didn't extend only to its decision to pay People Express's $4.5 million debt owed to TowneBank — airport staff were treated to plenty of high living, a recently completed state audit found.
They were also pretty casual about what they told the board of commissioners who were supposed to be making sure the airport was doing business properly, a supplemental report contained in the recent 300-plus-page state audit shows.
The Virginia Department of Transportation auditors' review of the People Express deal was sparked by Daily Press reporting on the payment earlier this year but expanded into an overall look at the commission's books. When the auditors shared some of the information they found with the commission last month, the commission fired Executive Director Ken Spirito for using several thousand dollars of airport funds on personal expenses.
Spirito has not responded to phone messages asking for comment about the audit.
The auditors also found that Spirito neglected to tell the commissioners about a 3 percent pay raise he had just given himself as the board considered, and approved, a 3 percent raise for him in spring 2015. That was well after commission members realized the People Express venture had failed and that it would have to pay off the airline's debt to TowneBank with public funds.
The audit found that Spirito used credit card points and airline travel miles benefits for himself when the commission paid for his travel expenses, by using his personal credit card and claiming reimbursement, rather than by using the commission credit he had been issued, as commission policy required. On top of his $223,000-a-year salary and $810-a-month car allowance, the commission paid $500 a month to cover the income tax impact of the allowance.
Spirito also authorized himself and other airport executives to charge up to $2,400 a year on their airport credit cards for gasoline, without requiring that it be tied to business travel. Handling it that way meant the benefit wasn't reported as taxable income to the Internal Revenue Service, which means a potential tax problem for the employees and the commission. Wanner said he is consulting with an accountant about how to handle this problem.
In addition, Spirito filled his own vehicle's gas tank from the commission's gas pumps without filling in the log where airport employees were supposed to report fuel use.
Airport interim Executive Director Sandy Wanner said he's tightening up the way travel, gasoline and other expenses are handled, as well as use of the airport's gas pump.
"When one person came and said something hasn't been the policy, George (Wallace, the commission chairman) called me and said, 'We need a new policy' and I said, 'No, the policy is there, they need to stick to it,'" Wanner said.
He said the problem was often what Spirito told airport employees the policy was, rather than what its manuals and normal government practice required. He said he didn't expect to punish any employees because it wasn't right to punish people for doing what their managers told them they could do.
"I've told the staff, 'We have these rules, we have these policies and we're going to follow them from now on,'" Wanner said.
The problems also included thousands of dollars of hard-to-justify spending, the auditors wrote.
The auditors reported that Spirito and the four executives in charge of airport marketing, finance and operations spent $4,718 for a retreat at luxury Renaissance Arlington Capital View Hotel in April 2015, the month the airport paid off the People Express debt.
That retreat included a $483 bill from Ruth's Chris Steak House and a $424 bill from an Italian restaurant.
The commission dropped $5,827 with the Williamsburg Lodge for a January 2017 retreat and spent $1,223 on clothing and die cast planes.
It spent $3,317 on a farewell dinner for commissioner Ed Maroney when he left in 2013, the same year it picked up commissioner LaDonna Finch's $2,235 hotel bill for attending the Paris Air Show. It spent $400 for a ticket change fee so former Newport News City Manager Jim Bourey's wife could accompany him on a trip in 2013.
And while airport policy was that work hours were 8 a.m. to 5 p.m. Monday through Friday, Spirito and the eight others in the airport commission offices left work at 3 p.m. on Fridays. "Our review also noted ... employees arriving after 8:00 and leaving prior to 5 p.m.," the auditors wrote. "We were also informed that some of the staff leave the airport property and receive massages during working hours."
"I went around to all the people involved personally and told them you have a 40-hour-a-week job and this was going to stop, now," Wanner said.
The airport spent $37,769 in 2016 on wellness benefits for employees, including $2,152 on essential oil diffusers to make its offices smell better.
Although airport policy is to not pay for alcohol, it covered $401 of bar bills from a conference in San Juan, Puerto Rico, that Spirito and marketing and air service director Jessica Wharton attended in February 2016.
Wharton has said attending such conferences is important to the airport's efforts to woo airlines.
In its efforts to drum up business, the airport spent $8,084 to send Wharton and Spirito to London for a conference in July 2014 — the month People Express finally started flying — and $2,957 hosting a British tour operator in 2014. That cost included bills for two meals at Kings Arm Tavern, one for $486 and the second for $421.
After reviewing 45 percent of nearly four years' worth of travel expense claims totaling $221,308, made by Spirito and the airport's other senior executives, the auditors said:
•Most claims for meals expenses did not give a business reason for the claim or say who attended.
•More than 80 percent of airline expenses did not attach a boarding pass to show the trip was actually taken.
•No travel expense claims included any agendas for meetings, conferences or training events to show if the spending was justified.
The auditors also reported that airport staff did not tell commissioners about all the contracts that needed formal commission approval and sometimes took active steps to keep contracts out of the hands of the commissioners.
Ress can be reached by phone at 757-247-4535.