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Fri, Nov 30, 2012

New Controversy Emerges Over 'AOPA Holding Corporation'

Michael Skarzynski, Accused Of Lying To Congress in 2009-2010, To Advise/Lead AOPA Investment Scheme

Just about the time that we thought/hoped that the worst of the recent AOPA scandals were behind us comes some puzzling information that confirms the prior ANN reports of AOPA's intent to get involved as an investment group, under a separate legal entity... but the latest details reveal that it will do so under the leadership of a man who allegedly had to resign a prior leadership position (CEO) after he was accused of lying to Congress.

Documents transmitted to ANN revealed a perplexing series of statements made by AOPA President Craig Fuller as part of a Leadership Update he sent out during the Thanksgiving holiday. The documents confirm what AOPA has thus far refused to discuss with ANN as regards their interest and actions in establishing a new corporate entity (one assumes it will be 'For-Profit') that will serve as an investment program/group dedicated to investing in aviation businesses with AOPA's considerable cash reserves (estimated at the better part of $100 million bucks).

In the update, AOPA President Craig Fuller describes a meeting in which, "I spent a considerable amount of time focused on efforts to advance our strategic investment initiatives through what we have now established as the AOPA Holding Corporation. With the entity created and a board formed which I chair, the important next step has been to recruit a president for the organization.
 
In that regard, the Board was able to interview Michael Skarzynski who will join us immediately as a consultant to finalize our 2013 investment strategies and the work of AOPA Holdings. Our objective remains to find opportunities where we can build enterprises that will provide real benefits to our members while returning to AOPA revenue that will be used to further our mission."

Skarzynski's involvement raises a number of red flags, and while everyone has had their share of problems over the course of their lifetimes, Skarzynski's are relatively recent and fairly serious.

In early January of 2010, Skarzynski tendered his "voluntary" resignation from his position at Arbitron where he had served as President and CEO. The resignation followed revelations in which, according to the Wall Street Journal, "he admitted to a false statement made in his testimony before a U.S. congressional committee last month..."

AOPA's Katie Pribyl dismissed ANN's questions and concerns about Mr. Skarzynski's previous action, denied us an opportunity to interview him, and stated that, "As you know, AOPA's board recently agreed to hire Michael Skarzynski as a consultant to AOPA on financial matters. Mr. Skarzynski has had a lengthy career with key leadership positions in business, government and the investment community. The Congressional testimony you refer to occurred three years ago --  Mr. Skarzynski made a misstatement which was corrected for the record. Congress did not take any action regarding the testimony. AOPA feels strongly that  Mr. Skarzynski's skills in finance and management will be especially helpful to our future financial planning."

The nonchalance expressed by AOPA seems to contrast sharply with both his former company's position as well as statements made by members of Congress.

In a 2010 statement, Arbitron Executive Vice President Alton Adams noted that, "Mr. Skarzynski's actions were inconsistent with our corporate values—which state unambiguously that 'honesty and integrity come first,'" in a letter to two Congressmen, Rep. Edolphus Towns and Rep. Darrell Issa.

In a separate statement authorized by Rep. Issa, the Congressman's office reported in January of 2010 that, "Anytime anyone gives inaccurate statements to Congress, we expect the highest degree of accountability and action to address it... To their credit, Arbitron has taken immediate and substantial action to address Mr. Skarzynski's inaccurate statement and have hired a new president and CEO."

With such a negative pedigree of fairly recent note (three years is not a long time in the world of Washington politics, in particular), one wonders why AOPA would take a chance on a person who had the potential to embarrass the organization and via a project that could put him in charge of tens of millions of AOPA member-dollars. Fuller's update also admitted that Skarzynski was an "F.O.C." (Friend of Craig), explaining that, "I have known Michael for many years. He has effectively built successful businesses by creating strong teams of people around the enterprises with which he becomes involved.  He has a diverse industry background with experience in government, consulting, global sales and executive leadership. He served as Assistant Secretary of Commerce for Trade Development in the President George H. W. Bush administration, has held several CEO positions in technology companies, and most recently was the founder and CEO of Red Lion Technologies, a consulting firm serving private equity and venture capital firms."

Regardless of the respective arguments, it seems a strange time to make a controversial appointment, especially in light of recent "departures" of a number of Senior AOPA staffers... including a CFO who had barely moved in before having to move out.

The ethical issues inherent in this series of events seem ponderous. There remains the central issue of how a pivotal industry organization, doing business as a non-profit legal entity can have any aspect connected to "For-Profit" operations. To those that may receive AOPA funding, this investment scheme may be manna from heaven... but for anyone who has to compete with AOPA (a familiar theme, of late) and/or with those projects they bless with their support and the aura of AOPA approval, it could not only be a nightmare but the kind of competition that could kill off even the most well-intentioned and managed operation.

"Fighting a 600 pound gorilla like AOPA is not easy, and is often bad for your health, worse than that, it tends to annoy the gorilla, and lately AOPA is not being all that nice to its enemies," notes one concerned aero-business.

Aero-Analysis: Either way, this move could give AOPA incredible power (to use or abuse) -- not only within the aviation community, but the aero-business community, in particular... and as folks who have opposed AOPA in the past can attest, those that displease AOPA may have much to fear from an emboldened and more powerful organization that wields the aura of industry advocate (and reportedly isn't afraid to do so to get its way)... while competing with and against some of those it supposedly represents across the nation (like we said... 'conflicts of interest' abound). With basic analysis, there seems to be a number of potential conflicts of interest... and more than a few ways in which AOPA could abuse the strong (and once deserved) rep it built up over a number of decades (especially under Phil Boyer's leadership)... a rep that seems to be sagging since Fuller took over.

More info to follow...

FMI: Here's What I Think About The Reports Of An 'AOPA Holding Corporation', www.aopa.org, http://online.wsj.com/article/SB10001424052748703672104574654392623606448.html

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