Feds Want Answers On Dealings With Stabilization Board

Five airlines confirm they've been ordered to turn over documents related to their dealings with the former chief of the Air Transportation Stabilization Board between January 1, 2002, and January 31, 2004, according to published reports.

The New York Times reports the Treasury Department's Inspector General issued the subpoenas for all information on the arlines' interaction with Daniel G. Montgomery, the former executive director of the Stabilization Board. While the Times reports the subpoenas don't indicate why Treasury wants the information, it suggests Inspectors General usually issue such documents when researching possible cases of fraud.

Montgomery is the only board executive mentioned in the subpoenas. He ran the board from March, 2002 until August, 2003, before leaving to join the financial consulting firm of Kroll, Zolfo Cooper. The court documents don't mention his successor, Michael Kestenbaum, by name; however, they cover the first part of his tenure as executive director.

The subpoenas ask specifically for information on meetings, entertainment and talk of employment between the airlines, Montgomery and other members of the Stabilization Board.

"He wouldn't even take a Coke from anyone," an executive at one airline told the New York paper, speaking on condition of anonymity.

The Air Transportation Stabilization Board was created in the aftermath of the 9/11 air assaults on America. Congress authorized it to loan troubled airlines up to $10 billion. So far, only $1.7 has been loaned out.

In addition to records on discussions with the board, the five airlines under subpoena have also been told to submit any documentation they have on meals, gifts, airline tickets, loans or discounts given to Montgomery or any other board member.

The Times report didn't name any of the airlines ordered to submit documents to the Treasury IG. However, United, US Airways and America West confirm they've been served.

"America West is happy to respond and comply with the request in a timely manner," the airline's senior vice president for public affairs, C.A. Howlett, told Reuters.

FMI: www.treasury.gov/offices/domestic-finance/atsb