Special Reports

Airport board chairman describes lessons learned

When Robert "Bobby" Owens joined the Blue Grass Airport board in 2006, he concluded its accounting system was "totally inadequate."

Owens, who is an insurance executive and accountant, said Thursday that he had designed forms and asked the airport's chief financial officer to use the forms to give the board regular reports that included the information he was requesting.

The chief financial officer at the time, John Rhodes, took the attitude that board members were appointed for four years, but that he was going to be there longer.

Rhodes told him, in so many words, "I'm going to have to adapt you (Owens) to my system," Owens said.

"I viewed myself as his boss and that was not the answer I wanted to hear," Owens said later in an interview. "It upset me."

As it turns out, Rhodes was wrong on how long the two men would be with the airport.

Rhodes has resigned, along with executive director Michael A. Gobb and two other directors, John Coon and John Slone, after Herald-Leader reports of thousands of dollars of questionable spending by airport executives.

Owens is now chairman of the airport board. He spoke Thursday to the Rotary Club of Lexington about the problems at the airport that were detailed by State Auditor Crit Luallen on Wednesday.

Her report described a "shameful" culture of spending at the airport that had led to more than $500,000 worth of unnecessary expenses.

"I made a statement to the press that we are going to get every dime (back), and I meant that," Owens told the Rotarians.

Asked by an audience member what he had learned from the scandal, Owens said there were at least three things:

 "Be sure your policies and procedures are being adhered to. We thought ours were" but quickly learned that wasn't the case.

 Do not use so-called company credit cards. "They are an ATM machine." The airport now requires charges to be made on staffers' personal cards and receipts submitted for reimbursement.

 Ask questions. If the answer is not adequate, ask more questions.

Later, in an interview, Owens said his message was especially important for non-profit groups and quasi-government agencies, like the airport.

In an interview after the Rotary session, he said he ran out of time before he could make a very important point: The scandal has left the Lexington airport with "some serious problems. One is that the airlines like to fly into good, stable, well-run airports. We've had at least one airline express grave concerns about continuity of management" at Blue Grass Airport.

Airlines contribute 35 percent of the Lexington airport's revenue. And with Louisville "advertising heavily in our market" and the Cincinnati-Northern Kentucky airport recently getting Delta Air Lines to lower ticket prices to make it more competitive, "we're perceived as a wounded duck," Owens said.

"As this economy deteriorates, it wouldn't surprise me if we start losing air carrier service. We have got to get all this stuff behind us and try to reinvigorate the confidence the airlines have in Lexington."

Owens told the Rotarians that he thought the airport was "a very well run airport when I joined it," but "things aren't always as good as they appear to be."

He said he was troubled early on by the "arrogant swagger" of the airport's management group, but he also defended the man he replaced earlier this year.

Owens said former airport board chairman, Bernard Lovely, had been the victim of media "criticism" and "character assassination ... that has been unjust and uncalled for."

Lovely "always acted in the best interest of the airport," Owens said.

Both Owens and Lovely are Rotary members, and Owens was president of the club in 1994-95.

While he credited the Herald-Leader with calling attention to the spending, Owens also said he felt the first Herald-Leader story about the spending scandal, which appeared on Nov. 23, was "a little unfair" because it focused too much on the excessive spending and travel by Gobb, without adequately explaining why Gobb had taken some of the trips.

Owens said Lovely and Gobb did "a great job" in helping the airport recover from the 2006 crash of Com air Flight 5191, which killed 49 passengers and crew members.

Consultants said the airport would lose 25 percent of its passenger business after the crash, Owens said, and "this really led to Mike Gobb literally traveling around the world" to "tell the story of our recovery."

Business actually increased 2 percent in the year after the crash, he said, before the recession pulled the numbers down.

Owens said the airport board started looking into Gobb's spending, $200,000 between January 2006 and March 2008, in April 2008 when the Herald-Leader made its first open records requests for Gobb's expenses.

Owens said the board quickly realized that the expensive accountant records for Gobb and other former airport executives were incomplete and inadequate.

The board now has reconstructed those records going back seven years, with the help of the credit card company that provided the cards used by the executives.

After the spending scandal broke, Owens said he at first wanted the airport to do its own audit, but others wanted Luallen's staff to do it and he agreed. "It couldn't have turned out any better," he said Thursday.

The airport board approved a series of changes on Wednesday and is considering several others.

One of the new policies adopted by the board is a so-called whistle-blower policy that allows airport or airline employees, passengers or anyone else to report problems they see at the airport without retaliation, Owens said. "We will investigate every complaint," he said.

Later, Owens said in an interview, the damage caused by the scandal has been "so sickening. The public has anger in this, and I guarantee you I am more mad than anybody.

"This should have never happened," he added. "It was all because of their greed. They lied to us. They deceived us. They lied to the community. They deceived the community. We should all be mad."

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