TodayApril 15, 2022

UAL, Smisek, DeBartolo, Foreign bribery act

FASB No. 19

In the ’80s Edward John DeBartolo Jr. “Eddie” DeBartolo was a household name. DeBartolo was the owner of the San Francisco 49ers, the team of the decade with names like Joe Montana, Dwight Clark, Kenna Turner, Eric Wright, and Duane Board. DeBartolo loved his team, and they loved him. With each season the empire grew, and DeBartolo decided to branch out some of his holdings. An investment in a casino boat off the shores of Louisiana came up for sale and DeBartolo decided to buy it. There was one problem. Governor Edwin Edwards.

It was well known that if one did business in Louisiana you did it with Edwin Edwards. What DeBartolo didn’t know is that the Federal Government had been trying to capture the Governor in the act of taking bribes. It finally happened, and DeBartolo was caught in the sting. DeBartolo pleaded guilty to a charge of failing to report a felony, paid a $1 million fine and received a sentence of two years of probation in return for his testimony against Edwards.

DeBartolo also lost ownership of the San Francisco 49ers in a shameful underhand maneuvering that left his sister, Marie Denise DeBartolo York and brother-in-law owner of the San Francisco 49ers.

United Airline’s CEO, Jeff Smisek, and two other high-ranking employees, just stepped down with an internal investigation and allegations of bribery looming overhead. Smisek, a lawyer in mergers and acquisitions, was instrumental in finalizing the merger of Continental and United Airlines.

At hand is whether Smisek created a non-stop flight route for a former chairman of the New Jersey Port Authority coined the “chairman’s flight for favors. United Airlines is the largest airline at Newark Liberty International. Smisek okayed the chairman’s flight for former Port Authority Chairman David Samson in exchange for benefits to United Airlines.

The flight in question flew directly from New Jersey to South Carolina where Chairman David Samson, former director of the New Jersey airport had a vacation home. It was one flight a week there and one flight back. When the director lost his job, the flight was canceled.

While, allegedly, making under the table deals Smisek has been ridiculed for his lack of leadership in customer service and lack of ability to create a contract for stewardesses so that they could fly on the same airplanes. Currently, as told by a source in the know, United’s flight attendants can only fly on United metal (airplanes), and Continental flight attendants can only fly on Continental metal. A contract would allow them the cohesiveness that the Pilot’s union has, the ability to have one contract and to fly together, United.

Customer service has also gone downhill in the last couple of years, and Smisek surrounded himself with yes men and women. Computer glitches and a high delayed flight rate were common complaints, but even more so was the penny pitching and game playing. In June 2014, the year after United received the award for most hated company by the people who flew it, United started capping the amount one could get on a round-trip and told customers, “May I suggest for future travel, to explore the option of possibly purchasing one-way tickets, which in certain cases maximizes award mileage accrual.”

This from a company that was suing a website owner for telling people how to get the most out of a United ticket. The Judge threw that lawsuit out.

I interviewed for a job as an accountant at an oil company that did a substantial amount of purchasing from the Middle East. At one point the interviewer asked me if I had any questions. I did. I asked them how they did business in the Middle East when our Federal government had a law on the books, FASB 19, that forbade bribery. The company hired me after that interview, and my boss told me it was because I knew the laws of their business.

Once I started work, I was told that if I was going to steal that I should steal big, because whether I stole $100 or $1,000,000 if I got caught they would prosecute me.

At the moment, Smisek’s severance pay includes $4.8 million, the company car, and free flight travel for the rest of his life. If it is proven that he acted criminally, Smisek runs the risk of losing his severance.

Lou Ann Hammond

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a founding member of the Women's World Car of the Year #WWCOTY, and board member of the Women in Automotive.