The San Bernardino International Airport Authority Board onWednesday took action that signals in no uncertain terms that Scot Spencer is being removed from his position of authority at San Bernardino International Airport.
Since 2007, Spencer has served as the contract developer of the airport. In hiring Spencer, the airport board, consisting of representatives from the county of San Bernardino and the cities of San Bernardino, Highland, Loma Linda and Colton, overlooked the consideration that Spencer had spent four years in federal prison following his conviction for bankruptcy fraud in connection with his failed effort to revive Braniff Airways in the early 1990s. The board, gambling that Spencer’s extensive connections throughout the aviation industry would translate to success in transforming the former Norton Air Force Base into an international airport, provided him with autonomy in directing operations at the airport.
Over the last several years, however, airport officials have been driven to the conclusion that their trust in Spencer was misplaced. Spencer’s management of what was supposed to be a $38 million renovation of the airport’s passenger terminal and a $7 million development of its concourse was dogged by cost overruns, boosting the combined cost of the passenger terminal and the concourse to $142 million. No commercial airlines agreed to fly out of the airport upon the completion of those improvements, as Spencer had confidently predicted and the major beneficiary of the project was the corporate jet-servicing company, Million Air, for which Spencer was the franchisee. Million Air terminated its relationship with Spencer earlier this year after the company claimed Spencer had failed to pay it hundreds of thousands of dollars he was in arrears on. In controlling airport operations, Spencer showed favoritism toward companies he owned or controlled, including SBD Aircraft Services, Norton Aviation Maintenance Services, Unique Aviation, San Bernardino Airport Management, SBD Properties LLC, KCP Leasing and Services, SBAMTechnics, and SBD Aircraft Services, to the detriment of other aviation-related companies located at the airport, such as Aeros Aeronautical Systems Corp and BaySys West. Aeros and Baysis were making substantial lease payments for hangar space at the airport before they were essentially forced to leave.
Questions mounted when Spencer formed at least two business partnerships with T. Milford Harrison, who had formerly served as the executive director of the San Bernardino International Airport Authority (SBIAA) and its sister agency, the Inland Valley Development Authority (IVDA), which is dedicated to the development of the property surrounding the airport. While Spencer allowed vendors to go unpaid and the aviation fuel stores at the airport to deplete to levels that threatened the continuing operation of the airport as a host to corporate jets, Harrison ran up non-aviation related charges of $63,043.45 on an American Express Business Platinum card issued to him through the authority and another $4,642.86 on a second Starwood Preferred Guest Business credit card he secured through the airport authority. Meanwhile, by the summer of 2011, Spencer owed the county more than $604,000 in unpaid taxes on property and equipment at the airport since 2005 and was in arrears on interest and principal payments on $1.2 million in loans to him through the airport authority.
The coup de grace came on September 21, 2011 when federal authorities, in the person of FBI and IRS agents, together with state law enforcement officers descended upon San Bernardino International Airport, serving search warrants at five offices, businesses or facilities there as part of a comprehensive investigation into allegations that millions of taxpayer dollars were illegally diverted, mismanaged, laundered, misappropriated or siphoned off by officials or individuals affiliated with the airport’s development. Targeted in the raid were SBIAA and IVDA headquarters, the San Bernardino Million Air franchise; three hangars, including Hangar 763, where two Spencer-affiliated companies were located; a storage facility at the airport, and Spencer’s Riverside residence. According to the search warrants, the authorities were seeking information regarding suspected misuse of federal funds, bribery, mail fraud, wire fraud and conspiracy.
On September 28, 2011 Don Rogers, who had served as the executive director of SBIAA and IVDA during Spencer’s tenure as contract developer, resigned. On November 9, the SBIAA board hired A.J. Wilson, a municipal manager with an extensive list of top administrative assignments inside and outside of California, to the position of interim executive director of San Bernardino International Airport.
On December 23, 2011, the airport board terminated the airport management and development agreement it had with Spencer’s San Bernardino Airport Management, LLC.
This week, on March 14, the board acted to grant Wilson even more control of the airport and entities Wilson created to take over management of the aerodrome from the companies Spencer held.
“A non-profit corporation, San Bernardino International Airport, Inc., has been formed for the purposes of facilitating and supporting the operations and maintenance functions of the airport,” according to a report dated March 14 prepared by assistant airport director Mike Burrows that was forwarded to the SBIAA and IVDA boards by Wilson. That report continues, “On January 25, 2012, the SBIAA Commission approved an agreement with Oasis Outsourcing III, Inc., to provide certain staffing services. Affected employees have now been enrolled in the new payroll systems. Subsequently, the fuel services management agreement between SBIAA and SBD Airport Services, LLC was also terminated due to specific defaults by SBD Airport Services, LLC. As such, the executive director took appropriate actions to regain control of the airport’s fuel farms, purchase adequate fuel inventories, and entered into an agreement with REW Inc, and Million Air Interlink, Inc. to provide professional services to assist in fueling operations and services performed by San Bernardino International Airport, Inc. personnel.”
Spencer could not be reached for comment.