Public officials, private jets
The hot question of whether Trump Administration officials misused charter flights didn’t get much attention at the recent National Business Aviation Association convention. Nor should it have. The role of the business aviation industry is to provide a service at a fair price, not to gauge whether the customer’s purchase is appropriate. It’s up to users—and those paying their bills—to determine that. In the case of flights by White House officials, the ones paying the bills are the U.S. taxpayers.
When an individual or a privately held company owns an airplane, there are no restrictions on who can use it and when. There is also no distinction between business and leisure travel, except as regards taxes. At publicly held companies, however, strict government regulations determine how corporate aircraft may be used for personal travel.
Those rules can be complicated. For example, they cover in great detail how to determine partial reimbursement, if any, for business flights that include personal side trips and/or family members. If senior management fails to ensure that approved trips are legal and aboveboard, it faces possible charges for defrauding stockholders. And of course, only costs that qualify as legitimate business expenses are tax deductible.
But the rules are murky for government officials using private charter flights, and only slightly clearer for travel on military or civilian government aircraft. There are certainly times and itineraries when it is appropriate for a public official to take advantage of the efficiency of private air transport. And sometimes it’s necessary to have access to the secure communications of a government airplane. But opting for an airline for routine travel is certainly easier on the budget, and the much higher cost of private flights needs to be defendable when taxpayers are footing the bill.
The recent charter flying by Secretary of Health and Human Services Tom Price apparently was not. News reports that went unchallenged by the White House counted some 26 flights since May (Price was confirmed for the cabinet position in February), costing approximately $400,000. In addition, Price was found to have incurred $500,000 worth of expenses associated with international flights on military aircraft. By way of comparison, during President Obama’s eight years in office, his two HHS secretaries used commercial flights for their domestic travel.
President Trump said he was “not happy” with Price’s use of private charter, and the Secretary resigned, saying, “I was not sensitive enough to my concern for the taxpayer. I know as well as anyone that the American people want to know that their hard-earned dollars are being spent wisely by government officials.” Price offered to reimburse $52,000 to cover the cost of “his seat” on the 26 charter flights.
Meanwhile, the U.S. Treasury’s Office of Inspector General is investigating possible ethics violations involving Treasury Secretary Steve Mnuchin’s trip in an Air Force jet to Fort Knox in Kentucky to review the U.S. gold reserves. Mnuchin’s wife accompanied him and posted a photo on Instagram that showed her descending the airstair in expensive designer clothing. The trip coincided with the recent total solar eclipse, and the destination was within the path of totality, sparking skepticism from Administration critics about the flight’s true purpose.
A Treasury statement defended the trip, saying, “The Secretary of the Treasury at times needs to use a government aircraft to facilitate his travel schedule and to ensure uninterrupted access to secure communications. The Department of the Treasury sought and received the appropriate approval from the White House.” The department said Mnuchin reimbursed the government for his wife’s travel, “in accordance with the longstanding policy regarding private citizens on military aircraft.” No dollar figure was given.
The private flying spotlight has also zeroed in on Secretary of the Interior Ryan Zinke and EPA Administrator Scott Pruitt for ethically questionable charter expenses. Time will tell whether their stories, or Mnuchin’s, play out like Price’s. Clearly, in any case, whenever someone does misuse business aviation, the harm goes beyond the dollars spent. Everyone else’s sense of fairness is violated, and the reputations of the service providers are sometimes unfairly compromised, as well.