James Pilcher

jpilcher@enquirer.com

Kentucky auditor Adam Edelen released 12 findings from %22special investigation%22 into CVG activities.

Report cites excessive travel spending%2C nepotism%2C irregular hires and duplicate services.

Findings used to justify a recommendation to completely overhaul the airport board structure.

With the release of a scathing report that highlights lavish travel and dining, nepotism and back-room politicking, Kentucky State Auditor Adam Edelen called Tuesday for a complete overhaul of the board that runs Cincinnati/Northern Kentucky International Airport.

He wasn't alone. Joining Edelen at the release of the report were incoming Kenton County Judge-executive Kris Knochelmann, Boone County Judge-executive Gary Moore and Cincinnati Mayor John Cranley. All said momentum is building to get the Kentucky General Assembly to change the board structure and make it more regional.

"You cannot overstate the importance of the airport to this region and to the entire state," Edelen said. "It is clear that after 70 years it is time for a board that better reflects that importance.

"As this report shows, this airport shows symptoms of an old way of doing things that just doesn't work anymore."

The event came little more than 12 hours after the airport board voted to bar all but board chairman Bill Robinson III and airport chief executive Candace McGraw from speaking to the media about airport issues. The board also considered hiring a public relations firm on a no-bid contract. Robinson had wanted to discuss those items in a closed session, which would have violated state open meetings rules.

"I'm not a bit surprised about that kind of activity," Edelen said Tuesday. "This is one of the key reasons why we need reform and we need it now. It is time to defuse the power and involve new people."

The auditor's report and recommendations were the culmination of a nine-month "special investigation" into airport activities prompted by The Enquirer's disclosures of in-house power struggles and excessive travel and dining expenses by CVG's board.

Edelen's top recommendation is to restructure completely the seven-member Kenton County Airport Board, currently appointed solely by the Kenton County judge-executive, that county's highest elected official. The auditor recommended that it be replaced by an 11-member board including three members from Ohio – an appointee each from the Ohio governor, Hamilton County Commission and Cincinnati mayor. Kenton County, which owns the airport, would have three appointees. Boone County, where the airport is located, and the Kentucky governor would each get two appointees. Campbell County would have one.

The current 11-member advisory panel would be eliminated.

Kentucky's legislature would have to approve any change to the board's structure because it was created by state charter.

The airport's operations have come under increased scrutiny as its dominant carrier, Delta Air Lines, has reduced hub operations here, causing a major airport downsizing. Even as flights were reduced, however, CVG has remained the most expensive airport for fliers in the U.S.

Business and many civic leaders fear the board is more distracted by side issues when it should be working to create jobs and lower fares at one of the region's premier economic development assets.

Those in attendance Tuesday said the auditor's report might spur action in Frankfort. That included Knochelmann, who is set to replace incumbent Kenton County Judge-executive Steve Arlinghaus in January after defeating him in May's Republican primary.

"It's a simple decision, really," Knochelmann said. "Either you see it's time for reform or you are satisfied with the same-old same-old."

Knochelmann, who campaigned extensively on the airport issue, said he will work directly with Northern Kentucky lawmakers to get changes passed as soon as possible.

Cincinnati Mayor Cranley said he and other Ohio business executives are behind the plan, too. "We are thrilled with the idea to have a more regional approach," Cranley said. "Considering that we are such a home to Fortune 500 companies, it is a wise and strong move to keep those companies that count on the airport involved in this process as well."

U.S. Sen. Rob Portman, R-Ohio, also weighed in with support: "CVG is a critical asset to Greater Cincinnati, and I welcome any recommendations that would enhance collaboration of stakeholders from throughout the region to work together to improve the strength of the airport and its impact on the economic vitality of the region."

Even Delta, the airport's largest customer, stepped in to comment, although the Atlanta-based carrier's statement stopped short of a full endorsement: "Delta is reviewing the audit and the recommendations of the Auditor General carefully and looks forward to participating in discussions about the best approach for providing effective governance of Cincinnati/Northern Kentucky International Airport, which is a major economic engine for the region."

The airport board did not provide any immediate rebuttals. Robinson, the airport board chairman, submitted a letter stating that the airport would respond within 60 days, although he said that "some of the matters discussed in the report have already been addressed by the board."

"We are going to treat the auditor's report with respect," Robinson told The Enquirer. "It has been referred to our legal counsel to do a thorough analysis. We look forward to receiving that legal analysis when completed. In the meantime, we will continue to operate the airport with enthusiasm and a commitment to the regional community."

The report found no evidence of criminal acts, and Edelen will not refer any future action to outside law enforcement agencies. The report does list 11 irregular activities the auditor says are reasons why the board needs to be restructured and its power redistributed throughout the region. Those include:

• Linking politics directly to gaining a seat on the board. The report includes a document created by outgoing Kenton County Judge-executive Steve Arlinghaus that includes support for his political campaign as a criterion for an ideal board member. Edelen said there is nothing illegal about this, but he said it was symptomatic of having too much control in the hands of one official.

• Paying for the travel and dining of Arlinghaus and his wife on several occasions, including trips to Calgary and Morocco.

• Improperly hiring Arlinghaus' daughter Shawnna Arlinghaus as a CVG staff member. She currently works as a department clerk at in the airport's field maintenance department.

• Excessive overall travel spending, and sending many more airport representatives to conferences than is the norm. In addition, the airport routinely reimbursed board members for alcohol, a practice that has since been discontinued.

• Allowing previous airport board chairman Jim Huff routinely to provide "exceptions" to standing board travel policy, leading to further expenses.

• Paying for expensive dinners and happy hours after each monthly board meeting and for off-site gatherings in the area. Those dinners and after-hours events have since been canceled.

• Paying $41,000 for consulting work and a report that was never used and never made public. That was for a review of McGraw's performance as CEO, and it still remains in draft form.

• Hiring several firms for public relations and other services that duplicated efforts by airport staff and could be considered wasteful. One such hire was for a consultant to review the findings of the auditor. The report blasted that move, saying it "appeared questionable, wasteful and fiscally irresponsible."

The airport's funding comes primarily from landing fees paid by airlines and from parking and concession revenues, but, because the airport board was set up by the Kentucky General Assembly in 1943 as a public entity, its funds are considered public monies.

Arlinghaus declined to comment, saying he had not read the report. ■