Complaint to FAA: LI jet charter company given preferential treatment

The Federal Aviation Administration is reviewing a complaint that state officials have given preferential treatment to a jet charter and management company that wants to do more business at Republic Airport.

Competitors have also alleged the application process has been expedited for the company, Talon Air, which is owned by Adam Katz, a real estate developer and major donor to the Democratic Party and some of its candidates.

The company applied more than a year ago to become a fixed-based operator, or FBO, at the East Farmingdale airport. FBOs provide a range of aviation services and are the only companies allowed to sell fuel there, a potentially lucrative concession at one of the region's busiest general aviation airports.

Officials from the state Department of Transportation, which oversees the Suffolk County airport, said they were still reviewing the application but had received approval from the state comptroller's office to bypass a formal bidding process because Talon already meets minimum FBO standards and has 25 years left on its airport lease, precluding another company from operating on that property for at least that long.

Talon executives and DOT officials have denied preferential treatment; and a DOT letter to the FAA in June says the allegations are "unsupported and unsubstantiated."

Atlantic Aviation, the company that filed the complaint, is one of Republic's two existing FBOs. It leases space to Talon and has traded lawsuits with the company in contract disputes related to the lease. It could lose market share to Talon if Talon wins status as a third FBO.

Atlantic lawyer Leonard Kirsch alleges that "local, state and federal elected officials" who have received donations from Katz "are actively trying to promote the approval of Talon's FBO application."

The complaint does not name any of those recipients, but records show Katz, his wife and companies he controls donated at least $300,000 since 2006 to the state Democratic Party and to prominent Democrats, including Gov. Andrew M. Cuomo and Nassau District Attorney Kathleen Rice. They donated at least $2,000 to Nassau County Republicans.

Katz said his political contributions were unrelated to his aviation business, and representatives for Cuomo and Rice dismissed suggestions that Katz had bought influence.

The complaint also cites a safety report commissioned by Atlantic that warns that added traffic from Talon's FBO business could bring congestion and "safety issues," and that Talon's proposed fuel farm could create safety problems of its own.

Talon has commissioned its own safety report rebutting Atlantic's allegations, and Talon lawyer Greg Zucker said Atlantic was trying to "stifle competition" with its complaint.

John Wraga, executive director of the Independent Fixed Base Operators Association, said an FBO designation would let Talon compete for retail fuel sales, a major source of revenue for most of the country's 3,200 FBOs. It would also let the company, which now buys fuel from Atlantic Aviation, fuel its own charter aircraft. "They would save a fortune," Wraga said. "Fuel is one of the biggest expenses for charter aircraft."

Other airport business leaders complained the process was well underway when they learned in the spring that Talon had submitted an unsolicited FBO application to the DOT in March 2012.

Frank Nocerino, a Republican who chairs the Republic Airport Commission, whose members are appointed by the governor to advise on airport management, said the DOT's failure to notify his group had been "ill-advised."

Anthony Russo, an owner of Republic-based Northeastern Air Management, said his company had asked airport management about FBO status, but had been told the airport would need to first issue a public request for proposals, something it was not prepared to do.

Announcement of the exemption from bidding for Talon this spring left Russo "appalled and upset," he said. His company has since filed an FBO application of its own, he said.

Beau Duffy, a DOT spokesman, said the department's evaluation of Talon's application was independent and that the company had "absolutely not" gotten any special treatment. Under federal rules meant to encourage competition, the department can only deny the application if it compromises safety or efficiency at the airport, he said.

He also said its evaluation was ongoing, though William Howe, the DOT's contract management bureau director, wrote to the state comptroller's office in February that the department "has approved Talon's request to become a FBO at Republic Airport."

Duffy said that did not mean the department had given final approval, only that it supported bypassing the formal bidding process for Talon.