Great Plains Airlines: October 2005 Archives

Tulsa City Councilor Bill "29%" Martinson took a lead role last Thursday night trying to fend off an audit of fuel flow records for fuel sellers at Jones Riverside Airport -- a group that includes Councilor Bill Christiansen, who, like Martinson, was helped into office by Bixby resident and former Tulsa councilor John Benjamin and political consultant Jim Burdge, who were also actively involved in the recall against Councilors Medlock and Mautino.

Martinson argued that the airport investigation was about Great Plains Airlines, and what did fuel flow fees at Jones Riverside have to do with Great Plains? Dave Schuttler of Our Tulsa World has compiled a helpful video to remind Councilor Martinson of what he learned about the investigation at Council committee meetings in the recent past.

Dave also has a link to the documents filed with the Federal Aviation Authority regarding Roadhouse Aviation's complaint against the Tulsa Airport Authority -- including responses from the City of Tulsa. (Roadhouse is Christiansen's competitor at Jones Riverside.)

And he has video of Martinson claiming that fuel-flow fees -- about $774,000 -- weren't important because they were "only" 3% of TAIT's total revenues for 2004. And this guy is touted as an accountant?

Three Republicans have already declared their intentions to seek office: Councilor Chris Medlock, Mayor Bill LaFortune, and former Republican Party Vice Chairman and District 11 State Senate nominee Brigitte Harper. Councilor Bill Christiansen is widely expected to run, as long as his Benjamin'n'Burdge stablemates on the Council (Randy Sullivan and Bill Martinson) can fend off an audit comparing the actual records of fuel purchased and sold at his Jones Riverside Airport business to the fuel flow fees paid to the airport authority.

Despite the widespread disappointment in Bill LaFortune's performance as mayor -- less than 40% support for reelection in his own party according to the latest SoonerPoll.com survey -- no Tulsa Democrat has seized the opportunity to challenge a vulnerable incumbent. That says a lot about the weakness of the Democrat bench in Tulsa. It may also indicate that the Democrats who would have a shot at winning are too dependent on the same oligarchy that seems content with keeping LaFortune in place.

The name of Don McCorkell, former state rep, has been floated as a great Democrat hope. McCorkell is an attorney, but if the online court records are accurate, he doesn't seem to have practiced in about 15 years.

What has McCorkell been up to? In 1996, he finished second to humorist Jim Boren in the Democrat primary to face Jim Inhofe's first Senate reelection bid. In 1997, he was a lobbyist for CFS. He was an early investor and member of the Board of Directors of Great Plains Airlines, buying 10,000 common shares for $10 in December 1998, another 95,000 shares for $95 in October 1999, and 790,478 shares for $790 in May 2000, for a total of 915,478 common shares, about a sixth of the total. On July 1, 2000, he became one of the first four preferred shareholders in Great Plains, purchasing 11,676 preferred shares for $35,028, coincidentally the same number of shares and the same date as Steven Berlin and Great Plains Chairman David A. Johnson. (Steve Turnbo was the fourth of the first four. Berlin and Johnson also each bought 790,478 common shares in May 2000.) He is listed as a 1999-2000 registered lobbyist for the Tulsa Industrial Authority, which is mixed up in the mortgaging of Air Force Plant No. 3 for Great Plains financing. The listing indicated he terminated his lobbyist registration in that period.

Because of his service on the Great Plains Airlines Board of Directors, he and fellow board members have been personally sued by William Stricker, from whom Great Plains bought Ozark Air and its aircraft in March 2001.

It's been rumored that McCorkell is one of those who received in payments for services rendered to Great Plains more than he invested in Great Plains, but we'll have to wait until the records are released until we can know for sure.

Lately he seems to have been interested in multi-level marketing, which seems to be a good fit for anyone involved in the Great Plains deals. Anyone able to convince an entire state legislature to part with $30 million for a risky airline venture can probably talk people into being MLM downlines. He was or is president of something called Casafina International LLC, which was launched in October 2003. Here's the plan for CasaFina associates, and here's his letter to prospective vendors. Here's a bit of pre-launch hype.

Rodger Randle won his 1988 race for Mayor by holding meet-the-candidate coffees in living rooms all over town. If McCorkell runs, will he be the first candidate to use in-home "business opportunity presentations" as a campaign technique?

At least one group of Democrats seems despondent over the lack of someone credible to carry the Democrat banner next spring.

Our Tulsa World has video excerpts of key moments from last Thursday's Tulsa City Council debate on allocating money to acquire Great Plains Airlines bank records, with handy descriptions. (Here are more excerpts.)

There's also a preview of Tuesday's Council Committee meetings. Public Works Committee meets at 8 and will deal with the airport noise abatement program. At 10, there's an item on allowing public discussion of the information gathered by the Council's airport investigation, and Baker wants to talk about his proposal to avoid accountability for making a controversial decision set up a charter review commission.

Today's Whirled featured a "Readers' Forum" guest opinion by John Brock. While normal readers' letters are left to languish for three weeks before being published, this item was rushed to the head of the line. Brock defends World Publishing Co.'s investment in Great Plains Airlines as a gift, with no expectation of return.

Brock also raises an issue that, as far as I can remember, hasn't been aired in the pages of the Whirled, although it has been the subject of a lot of buzz around town: Repayment of the loan from Great Plains Airlines to the Bank of Oklahoma, which was guaranteed by the Tulsa Industrial Authority, using city-owned Air Force Plant No. 3 as collateral. Mr. Brock wants the City of Tulsa to repay the loan, evidently out of the general fund.

The city of Tulsa's contribution was the guarantee of a loan by Bank of Oklahoma. It's now time to make good on that guarantee and pay off the loan. The city put up property at the airport as collateral. BOK made that loan based on its concern for our city and its faith in the integrity and honor of the City Council, not because of the collateral.

A minority of the city councilors does not want to honor that commitment. The excuse is that BOK knew or should have known that the commitment of the City Council could not be trusted, and therefore BOK doesn't deserve to be paid.

This is very strange. How does Mr. Brock know all this? It hasn't been the subject of any public Council meeting of which I'm aware. Was it discussed in a Council executive session, and has Mr. Brock been made privy to what should have been a secret discussion? Have there been private meetings between councilors and bank officials to which Mr. Brock has been tipped off?

It's strange, too, that Brock would call on the City to repay the loan right away, when the owners of the airline -- World Publishing Company, Steve Turnbo, Don McCorkell, Margaret Erling Frette, among many others -- have the collective wherewithal to repay $7 million. Why would BOk, ordinarily a good corporate citizen, demand that the city empty more pools, close more rec centers, take more cops off the street, so that it can get it's money back right now, when it could instead go after the deep-pocketed owners of Great Plains Airlines who stood to profit if the airline had been a success?

If all these investments had been intended as a gift, as Brock alleges, why would these people accept equity? Brock says, "World Publishing Co. invested with no real expectation of profit." That would mean that they never expected the airline to succeed in its mission to provide a needed service. If the airline had succeeded in its mission -- provide non-stop air service from Tulsa to the coast so that Tulsa is more attractive to business -- then new businesses needing that direct air service would have sprung up in Tulsa, and those businesses would have required more direct air service, filling the planes and making the airline profitable.

If WPC and all these lobbyists, PR flacks, and other eminentoes believed that such an airline could never make a profit, then why did they work so hard to convince state and city officials that this airline would bootstrap Tulsa's economy and thus was worthy of public subsidy? There was nothing in the plan for ongoing public subsidy of operations cost, was there? Eventually the airline was supposed to be able to make a go of it on its own.

One more question about repayment of the loan: The matter is in bankruptcy court, and I presume BOk is one among many creditors. Why should they get to go to the head of the line for repayment? Just because they have the political clout to bully the City Council into repaying them? Thursday night, the Cockroach Caucus councilors were uniformly saying not to spend money to acquire Great Plains bank records, because we should wait for the Bankruptcy Court to take care of it for us. Why not wait until the Bankruptcy Court says it's BOk's turn to get its money back? Why not see how much the Bankruptcy Court can recover from sales of assets? Were there preferential transfers made prior to Great Plains declaring bankruptcy? If money from preferential transfers is recovered by the Bankruptcy Court, perhaps it can help repay the BOk loan.

In response to a speaker at Thursday night's Council meeting, who claimed that no one made any money off of Great Plains Airlines, Councilor Jack Henderson pointed out that all that money went somewhere.

One more thing that doesn't add up: Why is Brock concerned about "a minority of the city councilors"? If they are only a minority, Brock will get his way and BOk will get their money very soon. What are he and the Whirled worried about?

If you need a reason to care about Great Plains Airlines, and getting to the bottom of where the money went and making the shareholder agreement public, here it is: You are either going to have to pay more in taxes or make do with less service from the City of Tulsa in order to pay back this loan, unless those who stood to profit take their lumps and pay the debts their company incurred, rather than doing the equivalent of walking out on a restaurant check.

Dan Paden has his own excellent take on Brock's op-ed.

The Tulsa City Council will vote tonight at their regular 6 p.m. meeting on whether to authorize the funding to copy Great Plains Airlines bank records as part of the investigation into that airline. Great Plains says the city can have them, but only if they pay for the cost of making the copies. The Tulsa Whirled and its allies want the investigation to stop. If you think it's important to know where tens of millions of dollars in taxpayer subsidies went, make plans to be present and tell the Council what you think.

More at HFFZ.org.

My latest column for Urban Tulsa Weekly is online, and in honor of National Newspaper Week, I've written about our city's monopoly daily newspaper, the Tulsa Whirled.

The column is about the investigation into Great Plains Airlines, and why the Tulsa Whirled seems so intent on halting that investigation before we know how the airline spent over $30 million in public investment. If you've been trying to understand what the Great Plains fuss is all about, this column is a good place to start, if I do say so myself.

Also in this issue, G. W. Schulz delves into the politics of distributing Community Development Block Grant (CDBG) dollars and other federal funds to local non-profits. G. W. provides the background to the recent controversy over the city repaying grant money to the Feds. And Barry Friedman has some doubts about those estimates of the New Orleans Hornets' economic impact on Oklahoma City.

You can find Urban Tulsa Weekly at finer dining establishments and smart cafés all over Tulsa.

By the way, I've added a blog category to collect each week's announcement of my latest column and thus serve as a sort of column archive.

Did Wilson Busby, an attorney retained by the City Council for their investigation into Great Plains Airlines, violate the Oklahoma Rules of Professional Conduct by talking to the Tulsa Whirled about private conversations with members of the Council's investigation committee?

An attorney pointed me to Oklahoma Statutes, Title 5 (Attorneys and the State Bar), Chapter 1, Appendix 3-A, which is the Oklahoma Rules of Professional Conduct. Rule 1.6 (Confidentiality of Information states, in part:

A lawyer shall not reveal information relating to representation of a client unless the client consents after consultation, except for disclosures that are impliedly authorized in order to carry out the representation, and except as stated in paragraphs (b) and (c).

The exemptions involve the client expressing intention to commit a crime or a court ordering disclosure.

Then there's this statement in the comments on the rule:

The requirement of maintaining confidentiality of information relating to representation applies to government lawyers who may disagree with the policy goals that their representation is designed to advance.

If Busby's remarks to the Tulsa Whirled are indeed a violation of the Rules of Professional Conduct, he could be reprimanded or disbarred.

The Tulsa Whirled had a front page story Sunday featuring comments from attorney Wilson Busby and former City Councilor Sam Roop, who is now an aide to Mayor Bill LaFortune. Busby was retained by the City Council for their investigation into the Tulsa Airport Authority, which also covered publicly-subsidized Great Plains Airlines. Busby was hired on the recommendation of Roop. A thread connecting the two men is political consultant Jim Burdge, who managed Roop's campaigns for Council and who shared an office with Busby. Burdge also managed campaigns for Bill Christiansen and Randy Sullivan, and he worked for the Coalition for Responsible Government 2004, the group that sought to recall Councilors Chris Medlock and Jim Mautino.

The two associates are accusing Medlock of trying to turn the airport investigation into some sort of witchhunt. Busby claims he saw Medlock pose like a bear and demand "red meat". When I read that, I couldn't help but think of Tim the Enchanter, in "Monty Python and the Holy Grail," warning the knights of the killer rabbit: "Death awaits you all, with nasty big pointed teeth!"

Why would Roop go after Medlock? Roop's boss would lose his job (and so would Roop) if Medlock's campaign is successful.

The story was clearly timed to stop the Council from going forward with a subpoena of Great Plains Airlines bank records. You would think that, if the Whirled were confident that there isn't any damaging information in the records, they would say, fine, go ahead, which would allow them to issue a big "see, I told you so" after the fact. Instead, the Whirled is in full attack mode to stop the subpoena.

Dan Paden picked up on the Whirled's attempt, once again, to mislead its readers by publishing that its parent company, World Publishing Co., owned only 3% of the total shares of stock in Great Plains Airlines. As I pointed out nearly a year ago (and thanks, Dan, for the link), WPC had owned a majority of preferred shares and a majority of the equity, based on the price at which the shares were sold. It's interesting, too, that the story failed to point out that WPC chairman and CEO Robert Lorton gave $2,500 to the campaign to recall Medlock and Mautino.

What we don't know, but should know, considering that our tax dollars and public assets were put at risk for this venture, is the terms of the shareholder agreement. That would tell us how preferred stock and common stock shareholders would have split up any profits -- specifically, how much of the profits would have gone to WPC. WPC, as a shareholder, must have a copy of the shareholder agreement, and it would clear up a lot if the Whirled would make that information public.

But instead of opening up and supplying information, the Whirled is attacking those who are seeking information.

In the meantime, those who loaned money to Great Plains Airlines based on the city's guarantee want their money back now that Great Plains is bankrupt. There's a persistent rumor that the Bank of Oklahoma and the Mayor's office tried to work out a deal to take arena naming rights in repayment for the loan. Another possibility is that the City would repay the money -- about $7 million -- comes out of the City's general fund. That hits basic public services, and it would hurt. Instead of hurting all Tulsans in this way, wouldn't it be fairer for BOk to go after the public officials who sold them on this deal? Or perhaps the bank records will show that funds were paid to favored vendors rather than being available to repay lenders? If that's the case, shouldn't BOk go after that money?

MORE: Comments on the story from Dan Paden and Chris Medlock.

Someone sent me this actually retouched photo of last week's Tulsa City Council committee meeting.

The hatchets weren't really there, except in a metaphorical sense.

At that meeting, Councilor Susan Neal attacked (verbally) Councilor Chris Medlock for wanting to subpoena Great Plains Airlines' original bank records. Her personal cheerleader, Tulsa Whirled reporter P. J. Lassek, is sitting behind Medlock and to the left. Medlock's offense? He wants a full accounting of the tens of millions of dollars in taxpayer funds that went to Great Plains.

Our Tulsa World has a larger, easier-to-view video of Neal's attack and P. J.'s pom-pom shaking for your viewing pleasure.