about Boston-Maine Airways’ management oversight and ethical standards have
been raised by the US DOT after information surfaced that one of the carrier’s former
top executives signed and issued an apparently fraudulent bond to the Air Line
Pilots Association (ALPA).
regulator, which is considering Boston-Maine’s long-standing request to expand operations
with a larger fleet of Boeing 727s, has instructed the carrier to explain in
detail the circumstances surrounding the bond issue, and disclose if anyone
else at the carrier or its now defunct sister Pan American Airways was involved
in the transaction.
last month informed the DOT that senior VP and general counsel John Nadolny resigned in May after
taking responsibility for “irregularities” affecting the procurement of a
performance bond delivered to ALPA’s
counsel in connection with a negotiated settlement agreement between the union
and Pan Am.
carrier’s revelation came only after ALPA alerted the DOT to the apparent
fraud. The union, which opposes Boston-Maine’s application to operate a larger
727 fleet, also accuses the company of shifting 727 flying operated by Pan Am
to non-unionized Boston-Maine in anticipation of Pan Am’s November 2004 closure.
a July 20 letter to Boston-Maine’s acting senior VP and general counsel Robert Culliford, the DOT says Nadolny’s conduct “presents
questions about the carrier’s oversight of its management and its adoption and
enforcement of ethical standards for carrier employees”. The regulator has
asked the airline to disclose what kind of practices were in place at
Boston-Maine and Pan Am when Nadolny
engaged “in his improper conduct”.
addition, the DOT has requested statements describing what remedial actions
have been taken by Boston-Maine to prevent future occurrences,
and if Nadolny is employed
by or continues to have a business relationship with Boston-Maine, Pan Am, or
any affiliated corporation.
the agency also wants a statement signed by a senior officer of the company
verifying the accuracy of all the carrier’s filings to the regulator between
January 7 and June 3, which were officially submitted under the names of Nadolny and the carrier’s outside
are unwilling to accept the factual statements made in those pleadings without
some additional assurance from the carrier that the facts stated in those
pleadings are true and correct.”
has until July 27 to respond to the DOT.
Culliford says the company plans
to submit a reply to the regulator. However, he declines to comment on the
nature of that response.