FBO Says It Had Permission To Skim Fuel Fees

"It's total incompetence."

That's the word from Cincinnati lawyer Joseph Trauth, Jr. about a recent audit that concluded Midwest Jet Center owes the city more than $288,000 in fuel fees it charged other tenants at Lunken Airport.

Why incompetent? Because, Trauth told the Cincinnati Post, Midwest had permission to do so.

The Post reports Trauth touted a letter written in 1994 by then-City Manager John Shirey, which said in part:

"Pursuant to the authority granted me under the lease section 3N, I hereby acknowledge that the fueling and servicing arrangements between Midwest and corporate hangar tenants of Lunken Airport similar to the existing arrangements between Stevens (Aviation) and each of Procter & Gamble and the Kroger Co. are within the scope of the permitted business activities contemplated by the lease and permitted under the Cincinnati Municipal Code."

The problem is, said Trauth, Cincinnati's legal department didn't uncover the letter on its own and didn't even know about it until Midwest said something.

"The city's legal department didn't do their due diligence. They totally missed the boat," Trauth told the Post. "It's a gross error on the city's part."

Now, Midwest is up in arms, demanding it be allowed to resume collecting the fees. The company also wants the city to pay for damaging its reputation.

Under the 1994 agreement, Midwest and another FBO at Lunken Airport, Million Air, charged a 12-cent city tax on each gallon of fuel sold. The FBOs were allowed to keep half of that. But Midwest was accused of charging Cin-Air and Jet Resource, both of which have their own fuel facilities, that same six-cents a gallon, even though Midwest "does not provide any fuel-related services to either company," according to the internal city audit.

Previous management at Lunken allowed Midwest to continue the practice of charging Cin-Air and Jet Resource for fuel, according to Trauth. He told the Post FBOs like Midwest were struggling and needed the revenue to survive. "The whole reason for the arrangement is the FBOs provide all kind of aviation services at the airport, but we're struggling to get by," Trauth told the Post.

FMI: www.cincinnati-oh.gov/transeng/pages/-7207-/