News Articles March 24, 2010 Part Two

• March 24, 2010
  
  

  Posted on Mar. 24, 2010

  Quick summary of today’s news articles (Full text of articles follows):

  • For wealthy Nigerian businessman Gilbert Chagoury and others like him, a place on the U.S. government’s recently expanded terrorist no-fly list has not turned out to be a major impediment to a jet-setting lifestyle. That’s because a loophole in the Transportation Security Administration’s security regulations does not require any screening for those flying domestically on a privately-owned aircraft, no matter how large.
  • Major General Robert A. Harding (ret.) recently appeared before the Senate Committee on Commerce, Science, and Transportation for a confirmation hearing to be administrator of the Transportation Security Administration and assistant secretary of the Department of Homeland Security. He sailed through with high praise.
  • As the Senate considered a bill that would set the course for the FAA over the next two years, general aviation supporters in the Senate worked to ensure that the final bill would include benefits for GA.
  • The World Trade Organization ruled that European governments unfairly financed planemaker Airbus’ battle against U.S. rival Boeing, officials said, even as the France-based Airbus claimed the decision as a victory.
  • The Pentagon said on Tuesday it remains in active talks with Europe’s EADS on extending the May 10 deadline for aerial tanker bids, while Boeing Co supporters in Congress seized on a WTO ruling to reject any deal with the parent of Airbus as reckless.

  AVIATION SECURITY

  Want to Fly Through a Loophole in the No-Fly List? Buy a Plane
  By MATTHEW MOSK, ERIC LONGABARDI, and RICHARD ESPOSITO
  ABC News
  3/23/2010

  For wealthy Nigerian businessman Gilbert Chagoury and others like him, a
  place on the U.S. government’s recently expanded terrorist no-fly list has
  not turned out to be a major impediment to a jet-setting lifestyle.

  That’s because a loophole in the Transportation Security Administration’s
  security regulations does not require any screening for those flying
  domestically on a privately-owned aircraft, no matter how large.

  Both TSA officials and FBI Terrorist Screening Center director Timothy
  Healy confirmed to ABC News last week that the effort to keep U.S. airspace
  off-limits to terror suspects has not included vetting the passengers and
  pilots on large private jets such as the one owned by Chagoury, which he
  has used to shuttle between Los Angeles, Las Vegas, New York and Europe.

  Greg Soule, a TSA spokesman, said the agency has been working for some time
  on a fix to toughen the restrictions for non-commercial jets.

  “We’re working with industry to strengthen security for private planes that
  have previously gone unregulated,” Soule said.

  No-Fly List Has Doubled Since ChristmasNo-Fly Terror List Includes Big
  Financial Backer of ClintonMore from Brian Ross and the Investigative
  TeamDespite the loophole, Chagoury’s movements did not totally escape
  notice. In January, the wealthy philanthropist, who has been a significant
  financial supporter of former President Bill Clinton, was stopped from
  boarding his private jet as it was undergoing repairs at Teterboro Airport
  in northern New Jersey, according to a report of the incident provided to
  ABCNews.com.

  The report says that law enforcement authorities discovered Chagoury was a
  “positive match” to the Gilbert Chagoury on the terrorism no-fly list,
  based on his date of birth. He was traveling on a British passport, which
  does not require a U.S. visa to enter the country. The report said Chagoury
  was also named on a second watch list called TIDE, the Terrorist Identities
  Datamart Environment, maintained by the National Counterterrorism Center.

  Chagoury’s son, Gilbert Jr., confirmed last month that his father was
  detained by TSA officers at Teterboro. A report of the incident said agents
  from the FBI and Customs and Border Patrol asked Chagoury, four other
  passengers and two crew members to wait for several hours before they were
  permitted to board the jet and depart for Paris.

  The brief detention provided the first public indication that Chagoury had
  been placed on any watch list, and because the government never comments on
  individual names on the no-fly list, it is unknown whether he remains on
  either list. Reached Monday, Chagoury’s son said that neither he nor his
  father wished to discuss the matter.

  A spokesperson for the Terrorist Screening Center last month declined to
  comment about Chagoury. The spokesperson did say the list is “fluid” and
  individuals may be moved up or downgraded at any time based on the current
  threat environment, but “an individual’s social status, financial means,
  and political affiliations are not considered” in an individual being moved
  up or down the list.

  Well before Chagoury was detained, flight records for his Dassault Falcon
  show the private aircraft had been making frequent trips both inside and
  outside the U.S.

  Unlike commercial airline passengers, who are screened against the no-fly
  list both on domestic and international flights, there is no requirement
  that those on the private aircraft be screened during domestic travel,
  according to Healy, who heads the Terrorist Screening Center. Healy said
  that was something the TSA was “working on.“

  The current security rules for non-commercial travelers only impact
  operators of charter aircraft. TSA requires charter companies handling
  flights on large aircraft to properly vet all passengers and employees,
  including checking them against the no-fly list. They also require
  passenger checks for flights entering or leaving the U.S. Those
  requirements could be expanded soon, TSA officials said.

  In October 2008, TSA proposed new security measures for private general
  aviation aircraft. But they encountered resistance from some advocates for
  privately-owned planes. After seeking public comment, the TSA is preparing
  a new set of security rules for aircraft not currently regulated under
  other programs, Soule said.

  “This draft proposal will represent a significant strengthening of general
  aviation security and enhances other post-9/11 measures,” he said.

  Ed Bolen, the president and CEO of the National Business Aviation
  Association, has been monitoring the rules and said he believes the level
  of passenger scrutiny will increase with the takeoff weight of the
  aircraft. “Their reasoning is that large aircraft are significantly more
  capable of doing damage,” he said.

  Soule said the process is “still very much ongoing,” with a period for
  public input expected to come later this year. “Until that time, it is
  premature to draw conclusions about the final rule. Americans can rest
  assured that whatever final policy emerges, it will represent a
  strengthening of general aviation security,” he said.

  In the days since the January incident, it appears that Chagoury has been
  free to continue to take to the skies. His plane crossed the Atlantic twice
  in February, according to publicly available flight records. Described as a
  billionaire, Chagoury runs an industrial conglomerate in Nigeria, the
  Chagoury Group. In 2009 Chagoury pledged $1 billion via the Chagoury Group
  as part of his commitment to the Clinton Global Initiative, according to
  the Global Initiative website. Chagoury also recently donated more than $1
  million to the Clinton Foundation, according to a list of donors made
  public by the foundation in December. Members of Chagoury’s family were
  contributors to the 2008 Presidential campaign of Hillary Clinton.

  A Clinton spokesman, Matt McKenna, said last month that the former
  President’s office was unaware of the incident until contacted by
  ABCNews.com. “We had no role whatsoever” in helping Chagoury get permission
  to resume his travels, said McKenna. “Nor would we ever,” he added.

  Eric Longabardi is an award-winning producer and investigative journalist
  who is a frequent contributor to the Blotter, ABCNews.com’s investigative
  page.

  TSA nominee sails through confirmation hearing
  Posted by Charles Spence
  General Aviation News
  3/23/2010

  Major General Robert A. Harding (ret.) recently appeared before the Senate
  Committee on Commerce, Science, and Transportation for a confirmation
  hearing to be administrator of the Transportation Security Administration
  and assistant secretary of the Department of Homeland Security. He sailed
  through with high praise.

  Sen. John “Jay” Rockefeller (D-WVa), committee chairman, declared a highly
  qualified, strong administrator is needed to lead the TSA and its
  workforce. He said Harding’s career in both government and the private
  sector “makes him a good fit for this mission.” Harding had been director
  of operations for the Defense Intelligence Agency and director of
  intelligence for the Army’s U.S. Southern Command, among several other
  positions.

  Rockefeller told Harding he was especially concerned about the security of
  general aviation and would want to talk with him about it if confirmed.
  Rockefeller declared he was not talking about “crop dusters and other small
  aircraft, but jets on up.” He added that general aviation was an issue
  rarely discussed, but one that need discussing.

  Harding is expected to be confirmed by the Senate.

  FAA REAUTHORIZATION

  Senate GA supporters spoke out for industry in FAA bill
  By AOPA ePublishing staff
  AOPA Website
  3/23/2010

  As the Senate considered a bill that would set the course for the FAA over
  the next two years, general aviation supporters in the Senate worked to
  ensure that the final bill would include benefits for GA.

  The $34.5 billion, two-year Senate FAA reauthorization bill, which passed
  93 to 0, focuses on modernizing the air traffic control system. It would
  fund modernization in part by an increase in general aviation jet fuel
  taxes-21.9 cents to 36 cents per gallon-but would not impose any new user
  fees.

  Leading up to the passage of the bill March 22, members of the GA Caucus
  and other GA supporters worked to include provisions in the bill that would
  minimize the burden of regulations on the industry. While not every
  amendment made it to the final bill, senators’ efforts to include GA in
  considerations reflected growing understanding of GA on Capitol Hill.

  Sen. John D. (Jay) Rockefeller IV (D-W.Va.), chairman of the Senate
  Commerce Committee, said “airports are economic engines for many small
  communities, and everyone, everywhere, needs to be connected to our
  national air transportation system.“

  Sen. Byron L. Dorgan (D-N.D.), chair of the aviation subcommittee, spoke on
  the Senate floor about the value of small aircraft-“to travel around the
  state and the country to do commerce, to haul parts, to haul people.“
  Dorgan explained the importance of business aircraft and that GA
  encompasses medical flights, transportation for troops reuniting with their
  families, relief flights to Haiti, and more.

  “The legislation we have created has things that are so important to all of
  aviation-yes, commercial aviation, but to general aviation and to private
  pilots as well,” he said.

  GA Caucus co-chair Mark Begich (D-Alaska) said he was pleased with the
  legislation. “You can’t go wrong with a bill that creates jobs, improves
  the safety and efficiency of air travel, and invests in our airports,” he
  said. “Many of our communities have no road or ferry access. Aviation is
  our lifeline as many Alaskans rely completely on small aircraft to keep our
  communities connected.“

  Mike Johanns (R-Neb.), the other GA Caucus co-chair, proposed amendments to
  ensure that equipment upgrade requirements would show a clear benefit
  without imposing an undue financial burden for small-aircraft owners.

  “It is important to remember that the FAA’s responsibility goes beyond
  large airports and commercial airlines; rural airports and general aviation
  are sometimes hit much harder by federal regulations, which can cause a
  ripple effect in states like Nebraska,” Johanns said. “I am pleased the FAA
  Reauthorization bill now includes specific acknowledgement of these smaller
  yet significant contributors to our state economy and our aviation system
  as a whole.“

  The bill establishes deadlines for equipage with NextGen technologies such
  as Automatic Dependent Surveillance-Broadcast (ADS-B); one of Johanns’
  amendments would require the FAA to first publish rules setting the
  standards for equipage so that operators would not absorb the cost of new
  equipment without clear directions from the FAA. Other Johanns amendments
  would require the FAA administrator to identify the benefits of the
  transition to satellite-based navigation for small- and medium-sized
  airports and GA users and require the Government Accountability Office to
  study the impact of increases in aviation fuel prices.

  TANKER CONTROVERSY

  WTO rules against Airbus, sources say
  By BRADLEY S. KLAPPER
  Associated Press
  3/24/2010

  GENEVA – The World Trade Organization ruled that European governments
  unfairly financed planemaker Airbus’ battle against U.S. rival Boeing,
  officials said, even as the France-based Airbus claimed the decision as a
  victory.

  Three officials with knowledge of the confidential WTO ruling Tuesday in
  the long-running trade dispute said it upheld findings of an interim
  decision handed down last September that faulted European governments for
  providing Airbus with subsidies through risk-free loans, research funding
  and infrastructure support.

  Airbus, however, said “70 percent of the U.S. claims were rejected” and
  that the WTO panel dismissed Boeing’s claim that its performance suffered
  as a result of European subsidies. In that case, it would be a victory for
  Airbus and the European Union ahead of a possible June ruling on alleged
  U.S. subsidies to The Boeing Co.

  While the WTO’s report won’t halt European subsidies for Airbus, the two
  disputes could provide tighter guidelines for how far governments can go in
  supporting companies in a market worth more than $3 trillion over the next
  two decades.

  With emerging powers such as China looking to break the two-company
  dominance of the airliner industry, clearer rules on public support will
  become even more important in the future.

  The three officials spoke to The Associated Press on condition of anonymity
  because of the sensitivity of the ruling.

  One official said the WTO panel found that Europe was, in some cases,
  unfairly subsidizing Airbus through “launch aid” because the planemaker
  only repays the loans as new planes are sold. For some planes, however, the
  U.S. failed to demonstrate that the subsidies actually harmed Boeing, a key
  requirement for proving wrongdoing.

  But the three-member panel also found against Airbus’ European backers
  Britain, France, Germany and Spain for providing what was ruled illegal
  infrastructure support and research and development funding. Officials said
  the ruling also confirmed examples of Airbus receiving export subsidies,
  which are prohibited under international trade rules.

  The Geneva trade body can’t force countries or companies to eliminate
  subsidies, but it can authorize retaliatory sanctions against countries
  that fail to comply with rulings. It generally takes years to reach that
  stage, and sanctions could be more than a decade away.

  Speaking ahead of the ruling, Boeing vice president Ted Austell said the
  WTO’s decision was important for “the hundreds of thousands of U.S.
  aerospace workers who’ve had to compete with an illegally subsidized
  Airbus.“

  “Illegal European subsidies have done great harm to the U.S. aerospace
  industry,” Austell said. “It’s time to level the playing field and let
  companies compete on product, price, innovation and customer support
  without market-distorting government subsidies.“

  But an Airbus statement said it learned that the ruling rejected Boeing
  claims of lost U.S. jobs.

  Pentagon-Still in talks on longer tanker deadline
  By Andrea Shalal-Esa
  Reuters
  3/23/2010

  WASHINGTON – The Pentagon said on Tuesday it remains in active talks with
  Europe’s EADS on extending the May 10 deadline for aerial tanker bids,
  while Boeing Co supporters in Congress seized on a WTO ruling to reject any
  deal with the parent of Airbus as reckless.

  Pentagon press secretary Geoff Morrell said EADS had expressed some
  interest in bidding as a prime contractor against Boeing to build 179
  refueling planes for the Air Force after its partner Northrop Grumman Corp
  bowed out.

  “We are right now engaged in active discussions with the company to better
  understand the reasons why they would need an extension,” Morrell told
  reporters at a Pentagon briefing.

  “I would say those discussions are going very well thus far and we have not
  come to a conclusion, and therefore have not made a decision yet about
  whether to extend the bidding period any further.“

  One source who is closely following the discussions said the Pentagon could
  announce its decision as soon as Wednesday.

  Sean O’Keefe, chief executive of EADS North America, told reporters on
  Monday that the company expected to hear back from the Pentagon within the
  next few days.

  German Economy Minister Rainer Bruederle on Tuesday said it would be fair
  if the U.S. government accepted EADS’ request for a longer period to ready
  a bid as a prime contractor.

  But Boeing backers continued to reject any deal with EADS as unfair to
  American workers, particularly after a World Trade Organization panel ruled
  that the European government gave some illegal subsidies to Airbus.

  “We finally have a concrete ruling to justify what we have been saying for
  years,” Representative Todd Tiahrt, a Republican from Kansas, where Boeing
  has a large plant, said in a statement.

  “In the midst of an economic recession, we should be doing everything
  possible to keep these high-quality jobs here on American soil,” he said.
  “Giving a vital national security component like the aerial refueling
  tanker to a foreign entity is reckless and extremely dangerous.“

  Airbus on Tuesday confirmed that a WTO panel had condemned European
  subsidies in a confidential ruling, but said the panel dismissed 70 percent
  of U.S. claims. It also said the dispute would likely drag on for years.

  Guy Hicks, spokesman for EADS North America, said the U.S. government had
  decided to exempt the rival WTO cases brought by the United States and
  Europe from the tanker competition.

  “The U.S. government has determined that ongoing WTO cases are irrelevant
  to U.S. defense acquisition and will not penalize U.S. warfighters by
  holding their needs hostage to an ongoing commercial trade dispute,” Hicks
  said.

  Northrop and EADS, the parent company of Airbus, won a projected $35
  billion contract to build an A330-based tanker for the Air Force in
  February 2008; but the Pentagon canceled the deal later that year after
  government auditors faulted the procurement process and upheld a Boeing
  protest.

  Northrop decided earlier this month that it would not compete for the work
  this time around, saying revamped rules for the competition favored
  Boeing’s smaller 767-based tanker.

  EADS has been weighing a possible bid on its own, but has said it would
  need three months of additional time to prepare the huge amount of
  paperwork that would be involved.

  Morrell told reporters last week that the Pentagon would consider making a
  “reasonable extension” to the deadline.

  Top U.S. defense officials had hoped to have a competition for the airplane
  contract, which could be worth up to $50 billion, especially since an
  earlier sole-source deal with Boeing collapsed in an ethics scandal in
  2004. But they insist that they have mechanisms to ensure that any
  sole-source deal with Boeing would be fair.

  The Obama administration is also under pressure from its European allies,
  who reacted angrily after Northrop decided not to bid and warned Washington
  against protectionist measures.

  Even if it got the additional time it requested, EADS would face an uphill
  battle with any solo bid.

  The company would also likely need to find another U.S. defense company to
  take on some of the classified work involved in the program, given that
  tanker operations are closely linked to the U.S. military’s strategic
  planning for future wars.

  Aerial tankers are used to refuel fighter jets and other military planes in
  mid-air, helping the United States project its power around the world.

  GENERAL AVIATION

  Cries of ‘Hey, That’s My Jet!’ Don’t Deter High-End Repo Men
  By ROBERT FRANK
  The Wall Street Journal
  3/20/2010

  SANFORD, Fla.- Ken Cage is racing through a private aviation terminal near
  Orlando when his BlackBerry buzzes with bad news. The plane he is about to
  repossess is scheduled to take off for Mexico in three minutes.

  Even worse, the Cessna’s owner and pilot is on his way back from lunch-and
  he is rumored to be six-feet, six-inches tall.

  “I’d rather not stick around to find out,” Mr. Cage says.

  Mr. Cage, 44, stands guard by the door as his partner Randy Craft walks
  onto the tarmac and approaches a shiny white turbo-prop. He quickly picks
  the lock on the door and ushers in the repo team’s pilot, Dave Larson. The
  plane’s propellers roar to life, and after clearance from the control
  tower, the $350,000 ride lifts off the runway and into the sky.

  Mr. Cage and Mr. Craft climb back into their Ford pickup and tear out of
  the parking lot, just as the plane’s owner pulls in.

  “He’s a minute late,” says Mr. Cage, peering out the window. “Lucky for
  us.“

  Ken Cage isn’t your typical repo man. Rather than snatch cars from an
  over-extended middle class, he takes back yachts, planes and other toys
  from the over-leveraged rich.

  Business is thriving, even as the economy begins to improve. His company,
  Orlando-based International Recovery Group, repossessed more than 700
  boats, planes, helicopters and other property last year valued at more than
  $100 million. Business, he says, is up six-fold from 2007.

  He has reclaimed everything from $18 million Gulfstream jets and Bell
  helicopters to 110-foot Broward yachts, $500,000 recreational vehicles and
  even a racehorse. Before the financial crisis, most of the luxury items he
  pulled in were valued between $30,000 and $50,000. Today, they are valued
  at $200,000 to $300,000-meaning defaults are hitting people at a much
  higher income level.

  Most repo men take cars and trucks. But Ken Cage and Randy Craft repossess
  yachts, planes, helicopters and other luxury toys of the formerly wealthy.
  WSJ’s Robert Frank reports.

  The folly of the wealthy has been good news for an elite cadre of repo men.
  Nick Popovich, the self-proclaimed “Learjet Repo Man” and head of
  Indiana-based Sage-Popovich, and Michigan boat specialists like Harrison
  Marine report brisk business. Reality-TV producers have been knocking on
  their doors. Last year, says Mr. Cage, International Recovery’s revenues
  soared to the eight figures, up from just a few hundred thousand when he
  and two partners bought the company in 2005.

  Banks hire Mr. Cage to retrieve their collateral after a borrower has
  defaulted. Once he grabs the property, he cleans it up or makes needed
  repairs and sells it to a new buyer. He then gives the proceeds, minus his
  fees and expenses, back to the bank. While the standard commission for most
  repossessions is between 6% to 10% of the resale price, Mr. Cage has
  lowered his fee to as little as two percent as a way to beat back growing
  competition.

  “They’re very quick in their response time,” says Steve De Amico, vice
  president in charge of lending at Illinois-based Allied First Bank, which
  hires Mr. Cage for recoveries. “It’s also helpful to have one company that
  can get the property, restore it and sell it for us.“

  Mr. Cage can’t name names. But he estimates that 70% of his targets made
  and lost their money from real estate-either as developers, Realtors or
  contractors. Most of his jobs are in Florida, Arizona, California, Nevada
  and other sun states where real estate was hit hardest.

  The son of a Philadelphia-area trucking-company owner, Mr. Cage never
  planned to land in the rarefied repo ranks. He started out in the
  cash-management department of J.P. Morgan, then worked in the collections
  department at Chrysler Finance, where he hired repo companies to pick up
  cars.

  Even though he never did the repos himself, he said the work became
  depressing.

  “Here we were, taking minivans with child seats in the back, or going to
  someone’s job to take their car,” he says. “I had a tough time with that.“

  Separating flashy toys from their owners seemed to be much
  easier-especially from a logistical perspective. Unlike cars, which can be
  hard to find and take, yachts and planes are often traceable through
  Federal Aviation Administration or marine records. Mr. Cage relies on a
  vast a network of marine captains, tow-boat operators, jet-terminal crews,
  dock workers and aircraft pilots who feed him information.

  With his Phillies cap, jeans, scruffy goatee and genial smile, the stout
  Mr. Cage is an unassuming presence. For muscle, he relies on his partner
  Mr. Craft, a tall, broad-chested former professional wrestler known as
  “Rockin’ Randy.“

  Mr. Craft prides himself on being able to break into just about anything,
  whether boat, plane or RV. Not that planes or yachts are that hard to
  steal. Mr. Cage says most yacht owners keep their keys near the ignition
  and rarely lock the doors. Plane doors can often be easily picked.

  “A jet is much easier to take than a car,” he says. His company works with
  about 30 pilots, all of whom are experts at flying various kinds of
  aircraft.

  Occasionally, the rich rear up to protect their prizes. Mr. Cage says that
  he and Mr. Craft have been hit by cars, threatened with shovels and chased
  on foot countless times. Recently, Mr. Cage says he was on a yacht
  assignment in Jacksonville, Fla., when the owner boarded another boat and
  zoomed after him, Bond-style. He soon gave up the chase, and Mr. Cage kept
  his craft.

  Most repo targets never even know Mr. Cage is coming.

  Early one morning at the Hontoon Marina just outside Orlando, Mr. Cage and
  Mr. Craft walk along the docks until they spot their prey-a 65-foot Sea
  Ray. Mr. Cage says they had been tipped off by a boat captain who saw the
  craft ease into the docks the night before without any running lights-a
  sign that the owner was trying to avoid notice.

  Mr. Craft hops onto the boat, finding no one aboard. A telltale pair of
  socks and sneakers near the door suggests someone may be headed back soon.

  After a quick check of the registration number, the team revs up the engine
  and backs away from the dock. As they motor down the river, Mr. Cage
  reclines in a plush leather chair and takes a moment to soak in the sun.

  “Someday I’d like to get a boat,” he says. “But I’d pay all cash.“