What a difference Congressional oversight makes—for the business press, if nothing else.
The last two weeks, the financial (and front) pages have been as busy as O’Hare over the holidays with stories about the Federal Aviation Administration’s overly cozy relationship with the airline industry, leading to the agency’s panicky safety crackdown this week in response to the embarrassing revelations.
The FAA’s inspector general on Friday called for “immediate and comprehensive changes” at the agency even as the airlines cancelled more than 2,400 flights since last Tuesday in response to an inspection blitz, according to Friday’s Wall Street Journal.
Coverage has been as comprehensive as would be expected given the scale of the service disruptions and the fundamental nature of the issue involved—airline safety.
What the latest crisis points up for me is the value of congressional oversight as a catalyst for good press coverage of regulators. Is this a bad thing? No way. Just the opposite.
Indeed, the FAA coverage is a good example of how government overseers and the press can work together in ways that are profitable for readers and citizens—and readers as citizens.
It’s interesting to note that the business press was out in front on this in the form of Business Week, which scored an important early scoop back in January with an account of the FAA retaliating against its own inspectors who warned of safety problems, in this case at Northwest Airlines. Just look at the hazing inspector Mark Lund went through:
Lund fired off a “safety recommendation for accident prevention” letter to his supervisors and to FAA headquarters in Washington. It was the loudest alarm he had the authority to ring. Claiming that “a situation exists that jeopardizes life,” Lund proposed cutting back on Northwest’s flight schedule until mechanics and inspectors could do their job “without error.” But instead of taking harsh action against the airline, the agency punished him. On Aug. 29, Lund’s supervisors confiscated the badge that gave him access to Northwest’s facilities and gave him a desk job. That happened to be the same day the airline sent a letter to the FAA complaining about Lund’s allegedly disruptive and unprofessional conduct. The FAA says it treated Lund fairly.
The Business Week story, by Stanley Holmes with Dean Foust, is excellent. It takes nothing away from it to note that it started when Lund, the harassed inspector, got in touch with his then home state senator, Mark Dayton, who turned the matter over to the Department of Transportation’s inspector general, who last September released a scathing report, which in turn got the attention of Business Week’s Holmes (who, sadly, left journalism and now works for Boeing).
Interestingly, as the Business Week story notes, the House aviation subcommittee was also—on its own—probing a separate incident of FAA retaliation against one of its own inspectors:
Several safety inspectors told Business Week that they had also experienced or witnessed retaliation. (Most of the safety inspectors interviewed by Business Week did not want to be identified by name in this article for that reason.) The House aviation subcommittee is probing an episode in which FAA management allegedly punished an inspector in 2007, according to three sources with knowledge of the subcommittee’s probe. Worried that some of the aluminum skins on Southwest’s (LUV) older Boeing 737s were prone to cracking, this inspector called for the planes to be rotated out of the fleet until they could all be repaired—a process that would have been time-consuming and costly. He was reassigned though later reinstated in his previous job. A Southwest spokesperson says the airline “is unaware” of the concerns raised by this inspector and “has no knowledge of a probe by the House aviation subcommittee.” The FAA declined to comment.
The Wall Street Journal’s Andy Pasztor scored a scoop in March, with a story saying the FAA was considering a big fine against Southwest, which, ultimately, was leveled. The story notes that the
House Transportation and Infrastructure Committee, the aviation subcommittee’s parent headed by Representative James L. Oberstar, a Minnesota Democrat, was breathing down the FAA’s neck.
The full House committee’s hearings on April 3 then triggered more excellent coverage of this life-and-death issue.
The Journal published a first-rate story, also by Pasztor, detailing two whistleblowers’ accounts of Southwest Airlines’ efforts to pick and choose which government inspectors would inspect the carrier’s planes.
One of the whistleblowers, Douglas Peters, described the FAA’s wink-and-nod culture with the story of how Southwest agreed to pay the full $886,000 penalty for a safety violation as long as the agency didn’t issue a press release about it. As it turns out, Peters was told by his boss, Douglas Gawadzinski, that Southwest would pay only $132,000, and as for the press release:
Weeks later, Mr. Gawadzinski suggested to Mr. Peters, with a wink, that he had used a ruse to have a press release on the reduced penalty put out briefly, but then had rescinded it due to a “typographical error,” according to Mr. Peters’s statement. Mr. Peters said Mr. Gawadzinski told him the agency had met its legal requirement, and another release “wasn’t going to be put out.”
Those FAA supervisors—they’re craaaazy!
Again, it takes nothing away from the story to note that it was based on lengthy statements prepared by the whistleblowers in advance of the committee’s hearings.
USA Today, which does much good work covering regulators it doesn’t get credit for (hey, why is everybody looking at me?), also had a good advance piece on the whistleblowers’ statements.
The New York Times yesterday confirms lawmakers’ key role, added the interesting detail that Oberstar’s investigation was led by a former FAA official, H. Clayton Foushee Jr.
Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.
Should the business press do more original reporting on regulators? Sure, I certainly think so.
But that doesn’t mean we can’t recognize the incredible value to the business press and its readers when Congress gets back in the oversight business.