Just before he stepped down as chairman of the Blue Grass Airport board at the end of 2003, Jon Zachem says, he warned some of the remaining board members that they needed to check closely on the spending of Michael Gobb, then airport executive director.
"When I left, I told some of the board members, I said, 'You've got to watch him like a hawk,' " Zachem said Sunday.
Last week, state Auditor Crit Luallen's office, in a report of its findings in an airport audit, said that Gobb and his top managers had more than $500,000 in questionable and undocumented expenses over a three-year period — from January 2006 through December 2008. The audit was done after articles appeared Nov. 23 in the Herald-Leader about Gobb's travel and other expenses that were paid for by the airport.
Zachem said he monitored Gobb's use of an airport credit card and Gobb's other expenditures every month while he was board chairman. Zachem chaired the airport board in 1998 and 1999 and again in 2002 and 2003.
Sign Up and Save
Get six months of free digital access to the Lexington Herald-Leader
The former board chairman said there were times that he and Gobb "would get nose to nose on some of his (Gobb's) expenditures," and after some of those confrontations Gobb reimbursed the airport for expenses.
"A lot of it was letting him know that I was watching," Zachem said. He added that he couldn't say that Gobb's expenses violated airport policies or the law, "but there were times when I felt they were extravagant."
Zachem said he recalled questioning a clothing purchase Gobb made using his airport credit card during a trip to San Diego.
"He went to San Diego to a conference, and I noticed a charge for clothes. I asked him about it. He said it was cooler than he had planned, so he had to buy warmer clothes," he said.
Zachem said he recalled that Gobb reimbursed the airport for the clothing, which cost several hundred dollars.
The former airport board chairman said he couldn't remember just which airport board members he told to watch carefully over Gobb's spending.
Among those remaining on the airport board when Zachem left was Bernard Lovely, who said Zachem never warned him about Gobb's spending habits.
"I have no memory of that. I know that he and Mike Gobb were not on good terms. When Jon was chairman, they seemed to butt heads a lot," said Lovely, who stepped down as chairman of the airport board in January after three years in that post, but who is still an airport board member.
Gobb resigned in early January at a special airport board meeting that had been called to discuss disciplining or firing him. The resignation came after the November Herald-Leader articles about Gobb's spending and after Luallen's audit began. Later in January, three airport directors who worked directly under Gobb resigned amid questions about their spending of airport money. Now, a criminal investigation is under way.
Zachem said that, although he went over Gobb's spending of airport money religiously, "it never occurred to me that he might be using the other directors' credit cards."
Questions about whether Gobb used other airport employees' credit cards or told them to make purchases for him using their cards arose after the November articles in the Herald-Leader. The newspaper began looking at other airport employees' expense records, and Lovely confirmed that airport officials were investigating whether Gobb had purchased goods and services through other airport employees' credit cards.
Zachem also said he never thought about whether the expenditures of the directors who worked under Gobb needed board scrutiny.
"I knew that he (Gobb) had to be watched. It never occurred to me the other guys did," he said.
The airport board had loose policies about overseeing airport expenses and reimbursements, and Gobb, as executive director, had wide latitude in permitting and approving employee spending.
According to the state auditor's office, airport board policies on expenses were circumvented in many cases and were inadequate in others. The board did not have an adequate reporting process that would enable it to provide proper oversight of airport management's financial activities, according to the auditor's report.
Zachem was interim executive director of the airport for three months before Gobb was hired for the job in 1998. Zachem also is a former Air Force and TWA pilot who still works part-time as a pilot.
Zachem, who helped hire Gobb in 1998, said that when Gobb was asked why he wanted to leave his job as head of Bradley International Airport in Hartford, Conn., Gobb said there were some unethical practices going on up there that he just couldn't operate under. Gobb worked at the Hartford airport for just a few months before he took the job in Lexington.