On Friday, May 3, 1985, the Federal Aviation Administration, without warning of any sort, served on three operating and affiliated companies of the Go Group Unlimited at Tucson, Arizona, an emergency order of revocation of their FAA certificates. This immediately shut down all operations. One company was a private charter carrier, one licensed as a common carrier, one a repair station that serviced the other two. One hundred and forty-three persons lost their jobs as a result.

This whitepaper explains and demonstrates in detail why the affair was a flagrant abuse of government power. It details: how FAA officials violated fundamental concepts of fairness and due process; how they violated the letter and spirit of standing agency directives; how the agency itself allows such abuses to occur because it is in violation of its own charter, the Federal Aviation Act of 1958 (FA Act), as amended, and in wholesale and deliberate violation of the Administrative Procedure Act (APA), and Constitution.

In May 1985 The Go Group Unlimited was a holding company for, among others: 1) Go Leasing, Inc., holder of an FAA Part 125 private carriage operating certificate; 2) Royal American Airways, Inc., holder of a Part 121 air carrier operating certificate; and 3) Go Air, Inc., holder of a Part 145 authorized repair station certificate.

The Go Group was owned and headed by Ronald J. Clark, 45. It owned or controlled some 22 British Vickers Viscount 4-engine turbo-prop aircraft, a popular airliner of the 1950s and 60s. Seven of these, in executive configuration, that is, fitted out with leather easy chairs, sofas, special galleys, etc., were acquired from major American corporations and used by Go Leasing. The balance, acquired from various airlines, were in airline passenger configuration, three used by Royal American, the rest held in stock for refurbishing or spare parts.

Go Leasing (and predecessor entities) specialized in chartering to entertainment groups, from Lawrence Welk to Rock bands. Such a group would take a given airplane, with its own crew of captain, first officer and flight attendant, as if it were its own, and use it for several months on the road during promotion and concert tours, sometimes even for a year or more. ⁽²⁾ Stage equipment would follow in semi-trailer trucks, some with two trucks and identical sets, leap-frogging one another for speed and efficiency.

After coming under Clark's control in 1981, Royal American made varied use of its certificate. It flew fill-in routes for other carriers like Air Florida, and under contract to American and Caribbean casinos and resort hotels. For a short time in 1981-82 it operated (under subcontract to Go Air) as a scheduled carrier between L.A. and Las Vegas.

Go Air, although authorized to serve the general public, principally serviced and maintained aircraft operated by the other two, and stocked parts for the Viscount.

The three companies operated with the same upper management from a 10-acre facility at Tucson International Airport, with a satellite facility at Ft. Lauderdale, Florida.

In 1969 Clark was a corporate pilot in his late 20s when he saw its potential for the entertainment industry and bought his first executive Viscount. It was an immediate success and became immensely popular. Still is. The lessor provided maintenance, independent companies provided flight crews, a division then necessary under CAB rules.

Business was so good that in the mid-70s he added a world-wide DC-7 contract air-freight operation and an executive jet service. Operating from Burbank until 1980, he bought private land adjacent to Tucson Int'l Airport in which he could build equity, and moved his operations there.

About this time, in response to airline deregulation, which obviated the need for an expensive CAB supplemental carrier certificate for large aircraft charter, FAA created the Part 125 private contract carrier certificate. ⁽³⁾ This put leasing, maintenance, crew training and operations under one roof, which improved safety and efficiency for both FAA and operator. As the largest single leasing outfit, Clark's served as a model for the consultant advising FAA on its creation.

Key to safe, reliable and economical operation of large aircraft, especially those out of production, is having readily available the multitude of spare parts, appliances and accessories, necessary for aircraft and engines, including the specialized fixtures and tooling required to repair and install them. And mechanics and inspectors experienced with the particular type of aircraft. As his business grew, Clark bought up large stocks of spares, e.g., generators, flap motors, landing gears, tooling and such, from, among others, United Airlines, which at one time operated a large fleet of Viscounts. This gave him the largest stock of Viscount spares in the world, and an almost complete in-house capability to maintain, repair and rebuild these aircraft and their engines. He brought over from Great Britain several expert Viscount mechanics.

Even today, more than thirty years since coming into service, the Viscount is an economical, comfortable and safe airliner. At today's prices, if needed, one can be remanufactured, including engines, for about $1.5 million dollars. And on short to medium haul routes it will do the work of a new aircraft costing $8 millions or more. ⁽⁴⁾

With airline deregulation in 1978, and entrepreneurs starting new airlines, some saw its economic attractiveness. Since Clark by then had a virtual monopoly in North America on spare parts and tooling, several came to him and took options if he'd buy up used planes around the world, refurbish them, and provide heavy maintenance backup. This he did, borrowing heavily from banks. This is how Royal American was created. A Texas oilman, with three Viscounts, started a small regional airline flying out of Texarkana. Clark was instrumental in helping him obtain his Part 121 air carrier certificate, and preparing the aircraft, a complex and lengthy task. But after a year the oilman didn't see profit on the horizon so sold aircraft and certificate to Clark.

At the same time, the 1981 recession hit, leaving him holding the bag at the banks with aircraft the would-be airline operators couldn't pay for. (By now he owned, all told, 22.) He tried to retrieve the situation by starting a discount airline from Los Angeles to Las Vegas. This failed. Largely due to the main players in that market cutting their prices to his, lowering them further when he did, finally driving him out. In early 1982 he placed Go Air, Inc., the working financial entity to which Royal American with its certificate was contracted, in Chapter 11. Because of bank notes he'd endorsed, he later was compelled to do that himself.

In the interim he built Go Leasing's business back up and put Royal American to work in Florida and the Caribbean. (Neither of which was in bankruptcy.) At the time he was shut down by the emergency order, Go Leasing's monthly gross was climbing towards $1 million dollars.

In December 1984 Clark landed a contract with Club Med, the huge international vacation resort organization. It needed to charter air transportation to take its members from Miami to its resort at Punta Cana in the Dominican Republic because regular air service was so inconvenient. In the remote northeast corner of the island of Hispaniola (Haiti is the west half), the resort is several hours by

bus over bad roads from Santo Domingo's commercial airport. Club Med had built its own airstrip at Punta Cana which the Viscount could easily use.

Clark started service using Royal American Airways with its Part 121 certificate. Club Med set flight times, mostly Friday, Saturday and Sunday. The Viscounts would take members starting their vacations down from Miami, bring back those winding them up, making several trips a weekend. All the company had to do was have the aircraft on-ramp ready to go at the assigned times.

First trip went out December 22nd. A few weekends later, towards the middle of January, 1985, Clark decided to switch the service to Go Leasing. One of the latter's planes was convertible from exec to airline passenger. He did this for a compelling reason. Part 121, designed for scheduled airline operation, has far more requirements than Part 125 private charter, although FAA insists the latter equals 121 standards of safety. Among them is the need for flight following, that is, a dispatcher at company headquarters receives regular reports from which he can track an aircraft's location.

Punta Cana's somewhat primitive location, however, created a serious problem. On departure, to relay time off, an employee had to drive five miles to the resort where there was only one telephone and telex, often tied up with Club Med business. Some flights were almost to Miami before the dispatcher knew if they'd gotten off the ground.

Another problem existed. Club Med built the airport with the idea of giving it to the Domican government. It hadn't been formally accepted. (A few months later, it was.) So technically Royal American could not land there.

Concerned these were serious infractions of 121 rules, which could lead to violation charges, but with no such Part 125 requirements, Clark decided to make the switch. The contract was private charter for Club Med members only (there was no other reason for anyone to go to Punta Cana), the flights were only a minor part of a vacation package, no one was selling tickets, and it seemed clear in the opinion of company counsel Edward Coleman that Go Leasing wouldn't be violating the 125 "holding out" rule. ⁽⁵⁾

Principal operations inspector for Go Group, Richard Julian, learning of the switch, expressed his opinion in a January '85 letter that the contract violated that rule. Clark and Coleman promptly scheduled a meeting with FAA Western-Pacific Region (hereafter Western Region) lawyer Richard Wittry in Los Angeles to discuss the matter. Although understanding the 121 problems, and indicating no concern about Part 125 causing any effect on air safety, Wittry took Julian's position. However, he invited Clark to submit a request for a deviation, or exemption, from the holding out rule. Mr. Coleman promptly did, sending it to Mr. Wittry.

Clark continued using Go Leasing. Not long after the Wittry conference, he got word Western Region was going to conduct a "special" inspection of the three companies. From Feb. 20, 1985, up to eight FAA inspectors started an intensive investigation of company books and records for aircraft maintenance, crew training, and the like. Five weeks later, Mar. 27, they finished. During this time, Clark received no word from Wittry on the deviation, and Go Leasing carried several thousand Club Med members.

Five weeks later, on Friday afternoon, May 3, two FAA inspectors arrived in Tucson and served on Clark an emergency order revoking the certificates of Go Leasing, Royal American Airways and Go Air. ⁽⁶⁾ Patched through by an FAA control tower, he reached Western Regional counsel DeWitte T. Lawson, Jr., who had signed the order, at home. Among other things, Lawson made an off-the-cuff remark, "I've got you this time!" (We will come back to this.)

Next day, Saturday, Clark shut down all operations. This stranded several hundred Club Med members for whom its management had to rush around chartering aircraft. Likewise, three entertainment groups in mid-tour, which left several Viscounts grounded at airports far from Tucson.

Within the week Clark laid off most of his employees. He kept 20 key people to support the 10 Viscounts he could lease out to other operators to generate revenue. For reasons that will become clear, about September, he finally had to let all of these people go too. One hundred and forty-three persons lost their livelihoods as a result of the FAA action, not to mention inconvenience to customers and destruction of an excellent reputation.

In considering this matter, several things should be underscored:

(1) In the entire 15-year history of his operations, operations involving large, complex aircraft, the Viscounts, the DC-7s, and executive jets, different crews flying in and out of strange airports all over the United States and the world, and running the repair stations that serviced them, Clark had an absolutely perfect safety record, no accidents, not even an incident like an engine fire or a crew running an aircraft off the end of a runway;

(2) Nor did he or his extensive operations have any record of violations -- none whatsoever; ⁽⁷⁾

(3) None of the violations alleged in the emergency order arose because of complaint by the public or others, or from an incident involving any operation; all were dug up strictly by looking at records (excepting, of course, the Club Med charges), some of which went back several years.

(4) No charge even intimated there'd been any falsification of records, any attempt to cover up a failure to follow regulations or proper operational or maintenance procedures;

(5) During the period January 1, 1984, right up to the start of the special inspection, of dozens of surveillance reports filed by principal maintenance, operations and avionics inspectors, ⁽⁸⁾ 97.6% were satisfactory, 2.4% unsatisfactory (the only two grades), the latter discrepancies invariably corrected by the next inspection; ⁽⁹⁾

(6) No charge alleged that any of the three companies or their personnel had in any manner prior to the special inspection, or at any time, after request by the principal inspectors, or having it pointed out, failed or refused to correct any deficiency or change any questioned procedure.

(7) During the five-week inspection, in the few instances when the team leader advised of a discrepancy, ⁽¹⁰⁾ management immediately and vigorously corrected it. ⁽¹¹⁾

(8) At no time after the January meeting with Wittry and submission of the request for a deviation from the Part 125 holding out rule did Lawson, Wittry, or any FAA official, orally, or in writing, so much as hint that certificate action (or any kind of action) would be instituted for continuing to fly the Club Med members with Go Leasing. ⁽¹²⁾

(9) At no time from the start of the special inspection, February 20, until May 3, 1985, ten weeks, did any FAA official, with the exceptions noted in footnote 11, although both team and principal inspectors knew that Go Leasing was carrying hundreds of Club Med members every weekend, and Royal American hundreds of Casino guests, tell management that any aircraft was unairworthy or flight crew member not qualified, and ask that it or they be grounded.

One should also bear in mind while reading this, and especially the analysis of charges that follows, that the complaint against FAA's abuses breaks down into, among others, these categories:

(1) Use of the emergency power, which instantly shut down the three companies (to their certain destruction) without any hearing on whether there was an immediate threat to the safety of the public, was arbitrary and capricious, and grossly violated FAA directives on its use.

(2) As already noted, the failure to warn that action would be taken unless Go Leasing ceased its Club Med flights, was a violation of common sense, basic decency, fairness and due process.

(3) FAA directives require that during a special inspection important discrepancies which might constitute an immediate threat to air safety be immediately passed on to the operator; that afterwards the team's report go to the principal inspectors who are then given 60 days to work with the operator to implement necessary corrective action, and also to give management an opportunity to mitigate or rebut any claim of violation. FAA Western Region officials deliberately violated these directives, so that even had there been a discrepancy that posed a threat to air safety, the Go Group was never given an opportunity to clear it up and thus obviate any need for the emergency.

(4) FAA has absolutely no legal authority to (a) impose certificate suspension or revocation as a penalty for a violation, or (b) cause the trial of such an offense to be tried before the National Transportation Safety Board with one-man administrative law judge trial, rather than in United States District Court where the certificate holder is guaranteed the right to "demand" trial by jury. ⁽¹³⁾

(5) Of the half-dozen enforcement policies used against the three companies, FAA, as required by the Administrative Procedure Act, has neither published them in the Federal Register, nor promulgated them as rules through APA notice and comment procedures. For that failure, in any single instance, the APA requires that the case be dismissed.

It should also be noted, for reasons which will be explained later, that three weeks before May 3, Clark shut down Royal American Airways. Two of its three aircraft, with full approval of the principal inspectors, were transferred to Go Leasing's 125 certificate (so much for any claim they were unairworthy); the third was due for heavy maintenance and not immediately useable, and also kept on the 121 certificate to keep it viable. For a number of reasons, Royal American could not have been restarted without FAA approval, so how could it have possibly been a threat to airsafety?

Go Air, the repair station, employed about 70 mechanics and others. It was doing no work for the public, only maintaining the Viscounts. Any such work could have been accomplished, and signed off for, by these licensed A&P (Aircraft and Powerplant) mechanics individually or as employees of either carrier. No mechanic was ever charged with a violation. Nothing they were doing could possibly have constituted an immediate threat to airsafety and justified an emergency.

The purpose of using the emergency power and handling the matter the way FAA officials did was to punish Clark for Go Leasing's Club Med flights and, (to be explained later) as retribution for a matter that had occurred many years earlier.

The FAA Emergency Order of Revocation combined all three companies in one document, but listed separate file numbers for each and segregated the charges. Combining them was a deliberate ploy, since even taking all the charges at face value, those listed for each company would not have justified revocation, much less an emergency. Totaling 47 pages, anyone reading the document would readily agree that operations so badly run should be shut down. The way the paragraphs and regulations are strung together (when factually they often arose from what was just one set of circumstances or act), it would appear hundreds and hundreds of violations had been committed.

To understand the key reason why this list was so long, one needs to understand the basic purpose of a special inspection team: they're there to do a detailed audit; they are challenged to find anything they can; benefit of the doubt goes to FAA and they list any suspected discrepancy whatsoever. It is left to the principal inspectors to shake these down with the operator to see what they really amount to.

Upwards of 80% of the charges were simply untrue because the inspectors had the facts wrong, they were phonied up by Region officials, or absurdly de minimus, if in truth they technically constituted a violation. Any legitimate violation could have been speedily corrected and, if not, as demonstrated by the examples in footnote 11, the plane or crew grounded until it was.

What these officials did was deliberately violate strict agency policy that requires the special-team report to be vetted by the principal inspectors with the operator, and an opportunity given to correct any real problem. It is patent that they bypassed this procedure because they knew they would lose many of the alleged violations, and were Clark given an opportunity to correct the real problems, or ground aircraft or crew if need be, they would have been left totally without any foundation to support revocation and use of the emergency power.

What regional counsel DeWitte Lawson did was take the team's entire raw list of discrepancies and turn each item into a violation. What we will do here, as an overview, is sample these charges. Some are outright silly, some just plain stupid, some downright fraudulent, many completely untrue.

At the outset, one should also have a mental picture of what it is that an operator can violate. It is not just the hundreds of regulations found in the Code of Federal Regulations. The operator has long lists of conditions or specifications appended to its certificate. It has operations, maintenance and crew training manuals. Each type of aircraft, each model of engine, each particular piece of avionics equipment, will have its own manual, etc. It wouldn't be unusual for dozens of feet of shelving to be necessary to hold all the three-hole notebooks required for these. Departure from any of their commands is considered a violation. Everything the operator does is covered by a manual. ⁽¹⁴⁾

The team criticized management, and Lawson turned it into a violation. He charged, for instance, that the "Director of Maintenance for all three organizations is held by the same person." Same for chief inspector and director of operations. And that these individduals did not work fulltime.

The former was true, the latter, only if one quibbled about what their duties were. Consider, this arrangement had been made with the specific, written agreement of the principal inspectors! EXH H. It explicitly agreed that these men could fly periodically to keep up their skills and to check on maintenance in the field (several aircraft were based in Florida). The principal maintenance inspector (they show up unannounced) had expressed annoyance with the sometimes unavailability of the chief inspector and director of maintenance because they were out flying. But if that was a problem, it was the only one. ⁽¹⁵⁾ FAA should have specified precisely what remedy it considered appropriate, like having an assistant, or an agreed limit to the flying hours. Then taken action were that breached. Had there been several malfunctions or other incidents in the field, evidencing lack of supervision or inspection, the emergency power might have been appropriate. There is something Kafkaesque about charges like:

"Go Leasing does not have enough management personnel, including the Director of Operations as to assure that its operations are conducted in accordance with . . . Part 125 . . .

Without giving a clue as to what would be "enough."

In fact, because of the principle maintenance inspector's expressed concerns, and recognition of the increased workload, in February 1985, before the special team arrived, Mr. Clark hired his former partner, Steven Birdman, who had previously run their repair station, to come back and help shape it up. Since this was where the actual maintenance and service work was done, it was where greater supervision would be the most effective.

Several alleged violations give the flavor of what was going on. One charged that because Go Leasing's operations manual contained a provision about flight engineers, and the company had none because not required on the Viscount, it was not "current." In 1979 Clark bought a French Caravelle (like a DC-9) which required one, thinking to refurbish and convert it to an executive aircraft, so included that provision when they first made up the 125 manual. He never got around to doing it, but the section just stayed in the manual.

A team inspector even testified this had nothing to do with airsafety. Two things are important to understand: (1) this manual had been fully approved by the principal inspectors (they made it plain they could've cared less about this); (2) obviously, this could have been corrected in five minutes. BUT MANAGEMENT WAS NEVER GIVEN THE OPPORTUNITY TO DO THIS. We think it fair to say that this charge accurately reflects the character of the entire matter.

Another allegation charged that "Go Leasing, Inc. operated their aircraft into and out of airports using over water approaches and departures which placed the aircraft beyond power-off gliding distance from shore." The problem here is that Mr. Lawson failed to allege the place and time of any such flight where this even might have occurred, much less, that it ever did in fact occur. It was a matter which could have easily been discovered in logbooks and confirmed by FAA control tower records. It was remarkable for an FAA lawyer to make such a shotgun allegation without any specifics, a serious reflection on his intelligence and professionalism.

During the inspection, one inspector casually asked someone if on any trips with entertainers they'd flown into places like Miami, New York, Boston, Monterrey, California. He said, "sure." That was it. Evidently the inspector then surveyed the overwater IFR (Instrument Flight Rules) approach plates for these locations and calculated that at least one approach at each would have put the aircraft over water at an altitude and distance where it couldn't have reached land had all four engines quit. He then reported it as a violation.

Aside from the fact that no specific flight was alleged, what is so incredible about this charge is that these airports had various approaches, many of which would not have created an overwater problem. Moreover, unless one could show that it was company policy to use a given overwater approach, even though improper, and forced that upon its captains, whose licenses are at stake for rules infractions, under FAA policy such a violation would ordinarily be brought against not the carrier but the pilot who, after all, at the time had a perfect right (and obligation) to refuse the approach! To top this off, the inspector had used an erroneous Viscount glide-ratio, and in the example he gave (Monterrey, California, where no company aircraft had ever been), the Viscount would in fact have been able to reach land without power. In other words, not only was the charge unsupported by any fact, but was based upon a false premise! One more for good measure:

The Go Leasing, Inc. passenger information card in Civil Aircraft N240RC is not appropriate to that aircraft. The emergency exits are not correctly shown on the diagram and the method of operating the emergency exists [sic] are omitted.

Once again, no allegation of time or place. For good reason. The charge was true, but at what point in time? The aircraft, having come in from a tour, was up on jacks in the hangar! Any self-respecting FAA lawyer knows that for such a charge to be made it must be shown that it occurred while the aircraft was being "operated." Even the ALJ, a former FAA prosecutor himself with a reputation as a rubberstamp for the agency, remarked that for all it mattered the company could have been keeping chickens in the aircraft while in the hangar!

This is another sterling example of why the policy of having the principal inspectors vet the inspection report is so necessary, and its deliberate violation by Western Region officials is so important to understanding what happened here, and why it was such a gross breach of fundamental fairness and due process.

What happened is quite simple. The aircraft in question had been purchased from an owner who'd leased it out for operation under Part 91. For various reasons his emergency cards didn't comply with Part 125 and the way Clark used and had modified the airplane. So appropriate new emergency cards had to be prepared. They were. But on coming in from a trip, a ground crew strips the aircraft of any items not bolted down, stores them, then thoroughly cleans the airplane. (Bright, shiny and scrupulously clean aircraft were Clark's trademark.) When they went to put everything back, because it had the same aircraft number on it, they inadvertently took the emergency cards from the file for the previous owner. But no matter. As Clark testified, each aircraft just before being released to service is put through a rigorous inspection, and the improper cards would have been found then.

A victory of sorts was achieved. The ALJ did reduce revocation, which was supposedly for lack of qualifications, because he found management was not deliberately flouting any rules, to a ten-month suspension, as punishment for the violations. Prryhic.

Upholding that, and calling these, and several of their ilk, "technical infractions," NTSB also upheld two maintenance violations. Both were hotly contested, and simply involved whether certain inspections or testing of components had been accomplished at the proper time. It wasn't that they had not been, or that there had been an effort to avoid them. "The most serious charge against the respondent," the Board said, "is that it operated numerous commercial flights when it did not hold appropriate certificate authority." And upheld that charge for 57 flights. Other than the fact Club Med issued brochures and had a phone listing in the Yellow Pages, no one has ever explained how Clark could have known he was violating a rule that simply reads:

No certificate holder may conduct any operation which results directly or indirectly from any person's holding out to the public to furnish transportation. ⁽¹⁶⁾

Note several things: This rule is so poorly written it doesn't even say "air" transportation. What does "holding out" mean? Although FAA defines dozens and dozens of terms in FAR Part 1, and even has a definition section in Part 125 (§ 125.9), nowhere does it define that term, that is, provide any criteria, like selling tickets, competing with regular carriers, etc., so a 125 operator can gather some idea of what it means. Even Mr. Wittry, under cross-examination, agreed that "reasonable men" could disagree about the alleged infraction.

Moreover, Go Leasing wasn't holding out, Club Med was, yet it was not a party to the action. There seemed to be a general feeling that, "gee, it's so big, and it only charges $30 for a membership (what if it had charged $50?), it must be holding out." Yet, as we have noted, transportation was but a small part of a total vacation package. Who would pay a minimum of $700 just to get from Miami to Punta Cana where nothing existed but the Club Med spa?

It is also fact that all FAA enforcement manuals direct that this kind of enforcement matter, basically only a legal question, be handled by cease and desist order or, most appropriately, injunctive action in federal district court. One key document, obtained in the district court action referred to earlier, came from the principal inspectors' files and reflects their assumption that Go Leasing would be assessed a civil penalty of $57,000. EXH B. Given what happened, that would have been cheap at half the price. But in this writer's experience in reviewing hundreds of civil penalty cases while at FAA, in most regions, assuming a fairly clearcut violation, such a case could have been easily settled for $5,000 to $10,000.

Why wasn't it? Mssrs. Coleman and Smith, shortly after the shutdown, visited Lawson and asked if the company could pay a civil penalty. He made it clear that that wasn't possible, that regional Flight Standards people were too upset about the Club Med flights to agree to one.

A company with a perfect safety and violation record, doing $750,000+ per month business was shut down; 143 persons lost their jobs; it wiped out the life's work of one man, a worth of millions; not to mention impact on financial institutions which had loaned him money. For what? Improper timing of two maintenance items? Fifty-seven flights, when an FAA lawyer in the very office which prosecuted the case invited the company to apply for a deviation, which would have allowed it to continue those flights? When this same man testified reasonable men could disagree about whether the Club Med flights constituted holding out?

But the key question is why Lawson or Wittry did not write to Clark or Coleman and say, "you've sent your deviation application to the wrong place, we'll give you two weeks to get that straightened out, or we'll initiate certificate proceedings." Clark was waiting for the response. If they'd have said, "we'll shut you down if you don't stop," he'd have done it, then gone to federal court, where the case belonged, for declaratory judgment.

Why no warning? What was the real reason why Western Region officials used the emergency power so that Clark's operations were shut down before he could have his day in court? The answer later.

The charges against Royal American, for both operations and maintenance, were much more extensive than against Go Leasing. The reason: a Part 121 air carrier, which may establish routes, schedules and sell tickets, operates under many more complex regulations than Part 125 private charter. Crew training requirements are extensive. Many aircraft components are assigned "hard time." A landing gear component might have to be replaced after 10,000 landings. A flap motor, after 5,000 hours in the air, regardless how well it might be working; to be replaced by one that is either new, overhauled to "zero time," or, for instance, pulled off another aircraft with only 4,500 hours on it, leaving another 500 hours of use. Except for engines and propellers, these same components, on the exact same aircraft, when operating on a Part 125 certificate, need only be "on condition." That is, they come off when inspection or performance shows them to be in need of repair or replacement.

None of the charges against Royal American arose out of any incident during operation, any failure of equipment, any complaint from a passenger; they arose strictly from the special inspection team spending five weeks going through every record they could find in company files, or from records they claimed they couldn't find. There was no charge that record entries were improper, that required maintenance or inspections had not been performed. (And, recall the 97.6% "Satisfactory" surveillance record.)

As noted earlier, it is important to one's understanding of the draconian nature of FAA's use of the emergency power here, that three weeks before the order was served (early April), Mr. Clark had already shut down Royal American. It was not operating, and could not have resumed doing so without FAA knowledge and cooperation. ⁽¹⁷⁾ He did this mainly because two key management employees, presence of whom was specifically required by Part 121, resigned to return to larger airlines; and he accepted the criticism that more management was needed for the three companies. So rather than immediately recruit replacements, he decided to temporarily shut that one down and concentrate on Go Leasing. As noted, he'd already added more management to Go Air, the repair station.

He had no inkling, of course, of what was about to happen. Had Western Region officials warned him what they would do if he did not stop the Part 125 Club Med flights, he could have hired the necessary personnel and put that contract back with Royal American where there was no question of "holding out," since that is precisely what an aircarrier is authorized to do; then sought a deviation for the flight-following gap on departures from Punta Cana, or experimented with HF (long distance) radios to see if they could do the job. It wasn't as if he had no other options, on the contrary. (By now the Punta Cana airport had been accepted by the authorities.)

The charges here were of the same ilk as those against Go Leasing, only more so. The most serious sounding, as will be seen, were downright fraudulent in nature. Including a half-dozen which Mr. Lawson voluntarily dropped at the start of the Royal American trial (held six months after Go Leasing), and those which the ALJ agreed to strike or dismiss on motion, a total of 18 were dropped as patently unsupportable. Many, many more should have been. But had Western Region officials been concerned with accuracy, the resulting depletion of their list, even without vetting by principal inspectors, would left their claim of emergency unsupportable.

For example, one charge was the company lacked records for six pilots showing they had received crewmember emergency training. Also that "RAMA utilized" their services when they did not have such training. But Mr. Lawson failed to allege when that had occurred. ⁽¹⁸⁾

This sort of charge, records lacking, or lack of specificity as to time and place, was rife throughout the list. When the principal operations inspector learned of them, evidently only a few days before the emergency order was served (which he was totally unaware was planned or about to happen), he came to Tucson and went over the team's list of operational discrepancies. Obviously upset, he was heard to disparagingly remark, "these are just a bunch of allegations" (no validity).

Had the team asked, or principal inspectors not been deprived of the opportunity to vet the list, management could easily have shown in all instances where these records were in the files and why the team missed them.

One more example: "RAMA's load manifests are not complete and accurate in that they did not always contain the names of the passengers." When is "not always"? On what flight(s)? This charge had no basis, and again could have been easily clarified.

Many charges concerned maintenance, operations and crewtraining manuals, most so minor as to be silly. Yet, as with Go Leasing, all these manuals had been approved by the principal inspectors, who kept copies in their office. And corrections could have been made in minutes.

Charges that Royal American had operated several flights without a "flight release" or "load manifest" covered four pages of the emergency order. These were Miami-Ft. Lauderdale, Ft. Lauderdale-Tampa, Tampa-Houston, Houston-Tucson. Even someone of limited experience should have been able to figure out that these were ferry flights, with only crew aboard, to position the aircraft or take it to a base for maintenance. All were perfectly legal Part 91 flights (under which private pilots operate their aircraft). To ascertain this fact would have taken only a simple question while the team was on site, or the principal inspectors would have recognized them for what they were.

Is "fraudulent" too strong a characterization for some charges? Six pages contained these sort of allegations:

¶ 24. RAMA's Operations Specifications required the overhaul of the duct relief valves at specific intervals.

¶ 25. The FAA inspection disclosed that the duct relief valve, Serial No. 36077, installed on aircraft No. N24V, had not been overhauled by RAMA, and that RAMA did not prepare and produce overhaul records for the valve.

¶ 26. Between about November 19, 1982 and February 20, 1985, RAMA operated aircraft Registration No. N24V, for about 976 hours without overhauling the valve.

¶ 27. The operations described in paragraph 26 above constituted operations of an aircraft in an unairworthy condition.

¶ 27.5. By reason of paragraph 24-27 above, RAMA violated FAR Sections 121.3 (e), 121.380 (b) (2), and 121.153 (a) (2).

These covered a number of other hard-time components, e.g., "Between about November 2, 1982 and February 14, 1985 RAMA operated aircraft Registration No. N140RA, for about 1604.9 hours without overhauling the actuator. . . . [This] constituted operations of an aircraft in an unairworthy condition." Etc., etc.

This has to sound terrible: 900 hours of unairworthiness here, 1600 hours there. And that, of course, was by design. For perspective, note:

(1) The remarkable length of time involved, almost two and a half years. Where were the principal inspectors, whose job it was, and who in fact routinely did so, to carefully check the same maintenance files (Kardex system) from which the team got the data for these charges?

(2) That while the team was uncovering this "unairworthiness," everyone knew the company was carrying hundreds of casino and resort hotel passengers every week, much of it over water.

(3) That section 605 of the FA Act authorizes any inspector to peremptorily ground any carrier aircraft for up to 5 days should he deem it unairworthy (and the operator not correct the claimed defect or voluntarily ground it until so done). ⁽¹⁹⁾ Nothing of the sort was ever done. (Recall the voluntary grounding of the Viscount at Freeport when Clark was told of the generator calibration problem.)

Why not? Because the team knew that the components had been overhauled, that the company had records showing that, and that regional headquarters was for the first time stirring a quarrel about whether those records were adequate under the rules.

The implication of Lawson's allegation that these components "had not been overhauled by RAMA, and that RAMA did not prepare and produce overhaul records," was utterly false: there was overhaul, there were records.

Here's the background. In the late 70s, Clark saw the need to stockpile spares for the Viscount, an aircraft long out of production, and whose numbers were steadily dwindling. United Air Lines had had a substantial fleet. So he purchased UAL's stockpile of spares. Before doing so, he checked with several FAA inspectors to see if there would be any problem about documentation. He was given the green light. The attitude of these inspectors was, "if it's good enough for United, it should be good enough here." In fact, these same spares, most with zero time, were used in 1979-80 to bring the three Viscounts purchased for Royal American Airways into conformance with the Part 121 certification standards insisted upon by both FAA Western Region inspectors in Phoenix and inspectors from the Southwest Region in Dallas where the certificate was finally awarded.

The reason for Clark's concern: When United overhauled an appliance, (and it maintained large stocks which it had to keep at stations on its route structure for immediate use in case one broke down), it would create substantial paperwork in the shop showing precisely what was done to it. At the same time, it would enter that overhaul in its computer system, and attach an FAA approved yellow tag to the item which would remain with it until installed on an aircraft, when it would then be placed in the Kardex file as evidence of that replacement and time available for its use. Which was usually zero-time-since-overhaul, "TSO," considered same as new; but sometimes it may have already been in use, and rather than overhaul, show whatever time remained on its allocation of hard-time. ⁽²⁰⁾

The problem was that after two years UAL would routinely destroy the shop's voluminous paperwork. So when Clark bought the spares the only documentation was a UAL computer printout noting each item's condition, and the tags. These tags are detailed and the item's status certified and signed off on by authorized UAL personnel. They always have been, and are today, accepted by UAL's principal FAA inspectors as evidence of overhaul.

These tags were similarly accepted by Royal American's principal inspectors right up to the time of the special inspection. The quarrel that regional headquarters was provoking was whether or not, lacking the detailed shop file, the tags constituted "sufficient" evidence of overhaul. ⁽²¹⁾ Lawson without doubt deliberately misrepresented the issue because he knew he couldn't afford to state plainly what it was. ⁽²²⁾ To underscore how corrupt bureaucracy can be, Lawson, to spin this theory, used as his chief (and only) witness, Rhuno Nelson, assistant to principal maintenance inspector Oscar Culp. It was Nelson who most frequently visited Tucson and made the inspections (97.6% of which were satisfactory), and who for years regularly observed and approved these same yellow tags in the Kardex file, as, of course, did Culp! ⁽²³⁾

It is anomalous for a government agency to routinely accept documentation like these tags, then turn around, without warning, and charge the operator with violations. It assails any concept of fairness or due process. Is "fraudulent" too strong a term for these charges?

If there's any doubt, look at these: Lawson asserted that "RAMA installed the following components on aircraft Registration Nos. N140RA and N24V," then listed five items, fuel and hydraulic pumps. He pointed out that they were purchased from "Flightspares Limited, Essex, England." He asserted that the "United Kingdom failed to issue Export Certificates on Airworthiness" for these components, and charged Royal American violated the rules by using them.

This was another after-the-fact-paperwork quarrel. Various companies overseas, Britain and elsewhere, manufacture or overhaul components for their own or American aircraft. They are sold and used by air carriers throughout the world. By treaty, the U.S. accepts British certification that any given component was properly manufactured or overhauled by an authorized company. In effect, if it's good in Britain, it's good in the U.S., and vice versa. A company like Flightspares is what is called a "stockist." It stocks the parts, but other shops do the actual work. The issue, seemingly complex, simply comes down to how much background certifying paperwork should the U.S. buyer insist on from the British stockist.

Clark'd bought such parts for several years (after all, the Viscount is British). Conscious of the import rule -- like so many, open to different interpretations -- in 1981, he contacted FAA Washington lawyers and sought their opinion. They allowed that the paperwork he was getting was satisfactory. As with the UAL tags, Western Region inspectors had for several years been accepting these parts as adequately documented.

It was absurd to charge a violation from this. ⁽²⁴⁾ The documentation Lawson complained of was obtainable through the stockist. As a matter of fact, by time of trial, Clark had obtained from Flightspares all of the documentation Region was beefing about. If this was a problem, all that these officials had to do was make their new policy prospective: "From now on, Mr. Clark, you must supply such and such." To understand how off base these charges were, note the comment in the document we call the "Smoking Gun" memo (EXH C):

Bob Colburn was going to look into the imported parts and try to get more information. I told him that some of the Flight Spares certificates reference incoming approved certificate numbers. He said that if RAMA had those incoming certificates and they were from the country of manufacture it may meet 21.502.

/s/Rhuno J. Nelson

FAR 21.502 is the import rule Lawson claimed was violated. This memo shows how uncertain and complex the matter was, even on April 15, little more than two weeks before the emergency order of May 2. Colburn, a team member, was obviously doing his best to get all the facts. This buttresses the inescapable conclusion that the decision to proceed with these violations was not based on any real belief they were legitimate or proper, but other considerations.

We certainly do not contend there were no legitimate charges, but they were relatively few and basically minor. None were uncovered, for instance, by a rash of equipment problems (or even isolated ones), certainly the prime indicator of operator compliance. We discussed this case with three retired FAA regional counsel. All agreed that FAA inspectors can go into any operation and dig up this sort of violations. Take the charge that certain components which had been sitting on the shelf for three years had not been bench checked before installation. For the most part, these were UAL parts and had all been overhauled to "zero time". That requirement came from the company's maintenance manual. That manual, in order of importance, is considerably below the mandates of formal regulations, and operations specifications imposed at time of certification.

Not to minimize it, but it should be noted that this applied to more than 100 different appliances, each performing a different function. It was neither practical nor necessary to bench check them. In most instances this would have accomplished no more than would always be done on the aircraft itself, say, like a flap actuator, right after it was installed. Because this blanket requirement made little sense for most of the parts, the director of maintenance, at time of shutdown, was working on a sensible test and inspection plan to substitute for it. ⁽²⁵⁾ The principal inspectors were aware of this and had not previously brought pressure about it, which they easily could have, nor is there any reason to believe they did so during the inspection, but the special team picked up on it as a discrepancy, and, of course, Lawson, as he did the entire list before it was vetted, carried these forward as violations.

FAA inspectors for the most part are practical men. It is fairly certain that Nelson was aware the generator calibration equipment was out of date (as shown by a readily seen tag), but winked at it. Had he been concerned about that, or the bench checking, he would have written it up in his frequent surveillance reports. Failure to do so is the best evidence of his and Culp's lack of concern.

If a certificate holder deserves to be punished, that is what the civil money fine is for. It is nonsense to suggest that Congress has ever decreed that an operator be revoked or suspended as a penalty (punishment) for these sort of violations. ⁽²⁶⁾ A few hundred, or even a few thousand dollars is one thing, but destroying the livelihoods of 143 persons and a man's life's work is another. ⁽²⁷⁾

Considering the size and scope of Go Group's Viscount operations, the charges against Go Air, the repair station, quantitatively, and qualitatively, are not substantial. As noted, no charge arose out of any incident or failure of equipment during operations. Nowhere in the voluminous and detailed maintenance records which must be kept did the inspection team see even a hint that any had been "pencil whipped" (false entries). Equipment failure patterns are what usually direct FAA attention to a repair station, suspect record entries the reason for harsh and vigorous action. It must also be remembered that Go Air did not operate in a vacuum. It is included in the 97.6% satisfactory surveillance reports (remainder promptly corrected) and averaged biweekly principal inspector visits.

It should also be remembered that, as with Go Leasing and Royal American, no opportunity was ever given management to explain, rebut, or mitigate any of the alleged discrepancies or to take corrective action. There couldn't possibly have been an emergency situation. A repair station certificate authorizes one to hold out to the public and certify that required maintenance and inspections are accomplished on aircraft, propellers, engines, avionics, etc., whatever components FAA authorizes it to do. This then allows the customer, who may not have the shop or skills to do the work, to show FAA it is in compliance with maintenance regulations on its own equipment. Since virtually all the work Go Air was doing at that time was for in-house operations, the same A&P licensed mechanics could have stepped right out of Go Air and gone to work as independent contractors or employees of Go Leasing and Royal American. If any alleged discrepancies were serious, that is, an immediate threat to air safety, the repair station could have been suspended subject to clearing them up (or held under that threat).

Admittedly Go Air had test equipment overdue for calibration. But this is what civil penalties are for. It's a common problem, involves little or no risk: the items complained of are calibrated by other test equipment when installed, then checked against the aircraft's own gauges on run-up. (There is reason to believe the inspectors winked at the problem.)

Several of the charges involved hangar and shop condition, parts exposed to dust, serviceable items not segregated from unserviceable items, etc. The fact is the entire operation was undergoing a major reorganization. But pace had been slow. It was because of the maintenance inspector's concern about this that Clark brought back as consultant to help shape things up his former partner who'd run the shop before. It was by chance that the inspection team arrived when the project looked its worst and was getting underway. We are talking two large hangars, thousands of major and minor parts,not an overnight task. The task was well along by the time of the emergency order, and Nelson and Culp had expressed satisfaction about the progress.

The charges against Go Air were obviously used to load up on those against the other two companies in order to further bolster the appearance the emergency was justified. They show how FAA regulations can be used to exaggerate the number of violations even though only a single act is involved. For example, at certain intervals, aircraft fuel gauges had to be calibrated. This is usually done with a special test set, basically an electrical calibration device. A transmitter in the tank sends a variable signal or voltage to the cockpit gauge, depending on fuel level. The test set is hooked to that gauge and simulates the proper signals. If the gauge is off, a simple screwdriver adjustment can be made.

FAA charged that because the test-set's calibration was out-of-date Go Air "did not meet the requirements set forth in Section 145.47(a) and (b) of the Federal Aviation Regulations." ⁽²⁸⁾ Subparagraph (a) simply provides that the repair station shall "have the equipment and materials necessary to efficiently perform the functions appropriate to the ratings [it] seeks." Subparagraph (b): "The station shall ensure that all inspection and test equipment is tested at regular intervals to ensure correct calibration . . ." This was the proper charge, subparagraph (a) was irrelevant: the company did have the required equipment.

Lawson then added as a separate violation, § 145.55, which requires a repair station to "provide personnel, facilities equipment and materials at least equal in quality and quantity to the standards currently required for the issue of the certificate and rating that it holds." This was meaningless.

He also added § 43.13(a), which requires that the repair station "use the tools, equipment, and test apparatus necessary to assure completion of the work in accordance with accepted industry practices." Again, meaningless. Go Air had the required apparatus, but its calibration was out of time.

As a further and separate charge, he added § 43.13(b), which requires that the work be done in such manner "that the condition of the [equipment] worked on will be at least equal to its original or properly altered condition . . ." This charge was silly, it has no relevance to measuring fuel in a tank. ⁽²⁹⁾

To wind up, Lawson cited § 145.2(a), which provides that the repair station perform its work "in accordance with the air carrier's or commercial operator's manual." In fact, that is precisely what management had done.

This example reflects the ease with which FAA counsel can inflate charges when all that is involved is one basic act, omission or legal issue. Here, instead of one, which covered it, there are five. This is routine for FAA counsel. It has two uses: (1) as a bargaining tool -- counsel will threaten the operator with $5000 instead of $1,000; ⁽³⁰⁾

(2) to load up the charges, as was done here, to justify emergency revocation. ⁽³¹⁾

Like other charges, the test set wasn't the real issue. Management knew that it was out of calibration, so used an alternate method, simple but time consuming: empty the tank, check its gauge and adjust as needed; fill, then ditto. This procedure, as common sense suggests, was approved by operator and manufacturer manuals, which Go Air could lawfully follow. Lawson evidently didn't agree.

The money fine is traditional and would have assured no repeats of legitimate violations. It violated any concept of fairness and due process to arbitrarily shut down the Go Group, especially without opportunity to take corrective action.

In using the emergency power, FAA officials violated agency guidelines. The special inspection ran Feb. 20 to Mar. 27. During those five weeks, in only two instances did the team tell management of discrepancies concerning aircraft or crew (Viscount grounded in the Bahamas; stewardesses who had to slide down an emergency chute). And immediate corrective action was taken. Another five weeks elapsed before the order, which proclaimed that "an emergency requiring immediate action exists with respect to safety in air commerce." The facts reveal the absurdity of this. During the ten weeks preceding, it was of course well-known to FAA officials that Go Leasing was carrying hundreds of Club Med members every weekend to Punta Cana, and Royal American many others. If these operations were so bad, how could they sit by and do nothing? The claim of emergency was totally and knowingly false. It is fact that Go Group's principal inspectors did not recommend certificate action or have the foggiest idea region officials planned to use emergency revocation. We are certain the same was true of the inspection team itself. The decision was made at the highest regional level only when those officials realized the opportunity which the long list of claimed discrepancies gave them to destroy Clark and the Go Group.

Regarding emergencies, FAA's enforcement manual provides:

(a) Emergency suspension or revocation of a certificate should be used only as an emergency safety measure and, thus, to provide immediate protection to the public. Generally, the longer the interval between the date of the incident and the date of the action, the more difficult it will be for the FAA to claim that an emergency exists. Therefore, emergency actions should be taken as soon as possible after the date of the incident.

(b) An emergency suspension or revocation should never be used for punitive reasons. When receiving a recommendation for emergency action, counsel should ensure that there is sufficient evidence of an emergency requiring immediate effectiveness of an order of suspension or revocation. ⁽³²⁾ Also: Emergency action "must be taken immediately when the need for such action is recognized." ⁽³³⁾ FAA's first enforcement manual warned: "Caution shall be exercized by the inspector to insure that the facts and circumstances which appear to warrant the suspension do, in fact constitute an emergency." ⁽³⁴⁾

Recall that on May 2, 1985, Go Leasing was the only carrier operation ongoing; Royal American had been temporarily shut down three weeks earlier. "The most serious charges against respondent [Go Leasing]," said NTSB, "is that it operated numerous commercial flights when it did not hold appropriate certificate authority." ⁽³⁵⁾ The rest but two, the Board described as "technical infractions demonstrating, at best, insufficient attention to record-keeping processes." ⁽³⁶⁾ The two, determined from maintenance records, rather than any equipment failure, involved the alleged failure to test at the proper time the accuracy of an engine temperature gauge and inspect a mechanical part that actuated the flaps. Even were the charges true, both had in fact been accomplished close to the time claimed appropriate by FAA. That determination was based on complex Airworthiness Directives and hotly contested by management as erroneous. Declaring an emergency was an extraordinary abuse of power.

Section 605 of the FA Act, ⁽³⁷⁾ mandates that FAA inspectors "shall be charged with the duty . . . (2) of advising and cooperating with each air carrier in the inspection and maintenance thereof by the air carrier." And further, should he find that "any aircraft . . . is not in condition for safe operation, he shall so notify the carrier . . ." And may preemtorily ground the aircraft "for a period of five days."

This statutory mandate to "advise and cooperate" is reflected in Western Region policy:

In the event that the required corrective action is of an emergency nature, appropriate elements of the report will be transferred to the action office [principal inspectors] as the situation may dictate.

Order WP 2150.1A, ¶ 6.d. (1984). And was expressed in the 2/15/85 Western Region directive which initiated the special inspection:

In cases where immediate action is required, the team leader will report the alleged violation to the appropriate principal inspector as soon as possible to initiate corrective action.

And again in the 4/24/85 cover letter to the Arizona inspectors enclosing the team's report:

In accordance with Order 2150.A, please reply, in writing, to the findings and recommendations within 30 days of receipt of the evaluation report. The report closeout shall describe corrective action taken on each specific item. If corrective action cannot be initiated or accomplished within 30 days, a supplemental report shall be provided on a 30-day follow-up until all items are resolved. Items not resolved within 60 days, will require justification in the follow-up report. [Emphasis added]

In spite of these ringing Congressional, agency and region statements about advise and cooperate, Western Region officials deliberately took steps to make sure Clark and management would have no opportunity to rebut, mitigate and, especially, take corrective action. Why? Because any valid charges that might have survived such a screening could not possibly have supported revocation, much less an emergency; and, for reasons that will shortly become apparent, they wanted to "get" Clark.

Absolute proof that this was deliberate came unexpectedly in the 4/15/85 "Smoking Gun" memo, EXH C, found in a stack of documents obtained by discovery in the district court action. Rhuno Nelson, same inspector who did most of the maintenance surveillance (and accepted the UAL tags for years, then testified they were no good), talked on the phone that date with team leader Rotelli about followup for the inspection, which ended March 27:

Joe Rotelli reported that he would brief our management sometime next week but would not brief the operator (RAMA). This was not his decision, he said. . . . [Emphasis added].

Understandably, since it was such a clear violation of law and policy, Rotelli was chagrined about this. ⁽³⁸⁾ Note the game being played by his superiors: the inspection ended March 27, on April 15 the principal inspectors were told there would be no corrective action, yet little more than a week later, April 24, those superiors sent a cover letter saying they could do just that, then on May 2 issued the emergency order. Obviously, they never had the slightest intention of obeying the law.

Months later, in his sworn U.S. District Court affidavit, William Withycombe, special team supervisor (from L.A.) said:

[¶ 7] I believe that the extent and nature of the violations warranted an immediately effective revocation of the certificates which was essential and necessary in the public interest as to assure aviation safety.

[¶ 4] In my capacity as Team Coordinator, I was informed that during the course of the special inspection, the investigating team reported to RAMA [Royal American] and GOA [Go Air] employees all the significant discrepancies which required corrective action, in accordance with my specific instructions. . . . [Emphasis added]

This latter statement was very clever: if one knows the real facts, taken in isolation it was true. The team did in fact report "all significant discrepancies." The Bahamas generator matter; the flight attendants emergency chute training. And they were immediately corrected. But that's all there ever were. Taken in context of the entire affidavit, the implications of this statement were utterly false: "There were many other significant discrepancies, we told management about them, but they didn't do anything, so we had to take emergency action." If that was true, then why didn't the emergency order say so and specify what they were? Why did these men do something so palpably false? Answer, next section.

FAA's enforcement manual provides: "In cases involving organizations, revocation should be sought where their conduct demonstrates a lack of qualification; i.e., deliberate and flagrant violations; falsification of records." ⁽³⁹⁾ Further:

Civil penalty may also be used in lieu of certificate action where a suspension is not necessary to obtain immediate corrective action. For example, where a major air carrier is involved in a maintenance violation and has taken satisfactory corrective action, a substantial civil penalty will serve as an appropriate deterrent without disrupting essential air service to the public. Civil penalties also may be initiated in any case where normally a suspension would be manifestly unfair or create an undue hardship and is not required for aviation safety. However, when there is a serious ongoing safety violation involved, and immediate corrective action cannot be obtained, certificate action should be considered notwithstanding hardship to the certificate holder or disruption of public service. ⁽⁴⁰⁾

None of the charges involved "deliberate and flagrant violations; [or] falsification of records." All were at the other end of the spectrum. Certificate action was "not necessary to obtain immediate corrective action." Had it been, the order would have stated the action was being taken because the operator refused to do so. This is meaningless, anyway: how could management have "taken satisfactory corrective action" when region officials deliberately kept them in the dark as to what the vast majority of claimed discrepancies were? In the two instances where the on-site team informed them, "immediate" understates just how quickly management acted.

It is utter nonsense to suggest an emergency revocation was "required for aviation safety," or that it was not "manifestly unfair" or would not "create an undue hardship." Tell that to 143 employees, Club Med officials and three Rock Bands. None of the violations could be considered "serious," and if in one or two instances they could have been considered "ongoing," that was only because management hadn't been told what they were so they could correct them. "Immediate corrective action" could easily have been obtained. Note the term "major" carrier. Is Royal American Airways, tiny compared to United Air Lines, subject to FAA officials' whim, with fewer rights, simply because so small? ⁽⁴¹⁾

Why would Western Region officials arbitrarily shut down an operation with a perfect 15-year safety and no-violation record, and put 143 persons out of work? When not suggested by principal inspectors or inspection team? In violation of FAA policy to allow the operator to rebut, mitigate or correct discrepancies? When management promptly corrected problems, took costly steps to add management, even shut down one company?

The answer requires some background. After airline deregulation (1978), FAA created the Part 125 certificate (1980), the kind held by Go Leasing. This allowed it to fully operate, that is, both lease (charter) and supply crews for large aircraft. Before, starting from the time economic regulation and subsidization of airlines began in 1938, ⁽⁴²⁾ one could not operate for hire any aircraft weighing more than the arbitrary limit of 12,500 lbs., unless an airline, or with a CAB supplemental carrier certificate, which might cost a million dollars to obtain. The object was to limit competition with the subsidized airlines.

In some situations, there was a way to get around this. Entrepreneurs, at low prices, bought up WW-II surplus military transports, later, airliners replaced by jets, then leased them, say, to universities with active sports programs. The idea was that the lessee would then independently contract with someone else to provide the crew. If there was any connection between the person leasing the aircraft and those who crewed it, that person was held in effect to be acting as a supplemental carrier sans certificate and was subject to injunction and large fines. But as long as the two were kept separate, with no ownership connection, there was no violation of law. Being a free country, just as any person or group could lease (or buy) a bus if they wanted, they could also lease a large airplane, and legally they would become its operator and responsible for providing crew. The low initial cost of these used aircraft kept lease rates affordable; the other cost advantage was, as a private aircraft, they could operate it under FAR Part 91, same rules used for a Piper Cub, much less stringent and therefore less expensive than those for carriers.

A number of accidents, especially the Wichita State football team crash in the mid-60s, put the heat on FAA to investigate these operations. FAA and CAB were virtually paranoid about them. No doubt there was subterfuge by some, with a hidden connection between lessor and flight crew. But Clark was scrupulous in keeping the separation. In 1977, Western Region conducted, evidently as part of a nationwide look at such operations, a three-month investigation into Clark's, by far the largest in the country. A kind of in-house one-man grand jury investigation with five days of formal hearings was held at the end with an FAA lawyer as hearing officer. FAA claimed violations which, at $1,000 each, mounted into the hundreds of thousands of dollars. These involved subterfuge, and the maintenance and operation of Viscounts being leased to entertainment groups. During those three months region officials engaged in harassment: they interrogated customers in a manner that indicated Go operations were illegal and unsafe; Burbank tower controllers were instructed to inform the region duty officer of its flight plan every time a Viscount took off. FAA inspectors would show up at its destination and demand to see all required paperwork. This was not a spot check, but all flights. The company finally had pilots file for, say, Reno, then in mid-flight refile to Las Vegas.

FAA lawyers were candid about what they were trying to do: force Clark out of the leasing business. They offered to drop all civil penalties if he'd stop. They also said they were going after him so hard because, as biggest and best in that business, if successful, they could then go after smaller operators. His response, of course, was to fight.

The investigation and hearings produced absolutely nothing! In charge of the affair was regional counsel DeWitte T. Lawson, Jr. No charges were ever brought, that is, turned over to a U.S. Attorney for prosecution. Clark's legal fees: $85,000! Two months later, Lawson asked Clark's lawyers if he would pay a $2,000 compromise civil penalty. The answer? Negative. In hindsight, it might have been the cheapest two thousand ever spent! ⁽⁴³⁾

On Friday, May 3, 1985, day the emergency order was served, that evening, through an FAA facility, Clark was able to get patched through to Lawson at his home. During the conversation Lawson remarked to this effect: "I'm ready for you, and you're not going to win. You're going to be surprised. I've got you this time." The failure in 1978 no doubt severely embarrassed Lawson and these same officials who now determined to shut the company down through certificate action. The real motivation for this unwarranted use of emergency revocation may now be understood: to finish the job they'd started in 1977, pure and simple, retribution. ⁽⁴⁴⁾

At time of shut down, ten Viscounts were operable (those that'd been used on the two operating certificates), with only a modest amount of work required to make several of the remaining ten flyable. All were owned or controlled by Clark's Go Group, not Go Leasing, Inc. or Royal American Airways, Inc. No enforcement action was directed against any of their airworthiness certificates. ⁽⁴⁵⁾ Had there, remedying any problem complained of would've restored them. These aircraft represented valuable assets which could have been leased to other operators, who might have picked up the Club Med contract, the entertainment groups (Go Leasing had $3 million already booked and scheduled, all of which was totally lost), Caribbean hotel and casino work, or fill-in routes for other carriers. Even two or three leased out would have provided considerable income.

Shortly after shutdown, a number of inquiries were made about the Viscounts' availability. But nothing developed, with one exception: Walt Cole, an Air California captain, applied for a Part 125 certificate in the name of Viscount Air Services, Inc. (VASI). His intent was to pick up some of the entertainment business. His certificate should easily have been granted within 60 days, the end of July. Cole was eminently qualified. In his off time he captained a Boeing 707 for an Atlanta travel club. He owned a Viscount he'd bought from a Seattle travel club, but it was in passenger configuration and not suitable for entertainment groups. However, even though the aircraft he was going to lease had been on Go Leasing's 125 certificate for years and had just come off active service, and the manuals he submitted were patterned directly from that company's, accepted by FAA for years, persistent objections were raised, so the application still hadn't been issued by the end of September. Van Nuys Flight Standards District Office inspectors assigned to the application stated openly that the interference was coming from region headquarters.

About that time, separate anonymous sources told this story to Clark and Cole: that high Western Region officials had met and discussed the fact they thought they would lose their legal battle with Clark and they determined to do whatever they could to prevent him from leasing the Viscounts to others so he wouldn't have a cash flow and be able to afford the legal costs necessary to defend himself.

Upon learning this, Mr. Smith immediately began interviewing people who had contacted Clark back in May and June. The experience of one is illuminating: discouraged by Florida inspectors about putting a Viscount on an existing Part 121 air carrier certificate, with the idea of picking up the Club Med business, he was told to check with Western Region. He did, and was told by a Los Angeles inspector that any such effort would be a waste of time until Go Group legal matters were settled -- which meant, of course, into the indefinite future.

Another Part 125 operator who inquired, when he checked with his local FSDO, learned that Western Region had sent a Telex to all FAA FSDOs instructing them, whenever an operator applied to put any Viscount on his certificate, or someone applied for a certificate with a Viscount designated as the operating aircraft, to send the application to Los Angeles for screening.

This was out and out interference with Clark's right to do business. Whether criminal or not we do not know, but it certainly violated his constitutional rights. There was no lawful basis whatsoever for the Telex, or claim that any of the Viscounts were not airworthy. Clark, back in May, had heard rumors from his insurance agent that this was the story FAA was spreading. He wrote a letter to Lawson demanding to be told just what was wrong with the Viscounts. Lawson never replied.

Captain Cole continued to press his application. Region headquarters insisted that it be sent to them for screening. When Cole called and demanded to know for what purpose Region was reviewing the matter, the inspector refused to tell him. By December regional counsel's office had the file. When Cole finally hired an attorney, they responded that it would soon be sent back to Van Nuys. After requesting one or two minor and innocuous changes, Lawson's office finally returned the file to Van Nuys. Cole initiated his application in late May. It was finalized in January. He should have had it by the end of July. The Van Nuys inspectors said they'd never heard of Region reviewing a 125 or 121 application, it was always handled on the local level.

The charter operator who found out about the Telex, never did get approval. Every time he'd talk to his local inspectors they'd call Los Angeles and come back with some requirement -- never put in writing -- that was extremely difficult to fulfill. Once he was even told he couldn't lease the aircraft, but would have to own it. It was made clear to him that his application would receive very close scrutiny. So he dropped out. Cole immediately put his leased Viscount to work, and it has worked steadily ever since. He now has two.

There isn't the slightest doubt but high Western Region officials engaged in the very campaign the anonymous sources revealed they'd planned. We complained vigorously to the Administrator, but to no avail. We do know that an FAA Washington lawyer was assigned to investigate, so somewhere in FAA files is a report that would be most enlightening. ⁽⁴⁶⁾

Since the time federal regulation of aviation began in 1926, FAA and predecessor agencies have initiated 70,000 certificate safety-violation cases. ⁽⁴⁷⁾ There is not now nor has there ever been any lawful basis for them. Starting day one, government aviation officials have engaged in a six-decades long coverup of this fact, a coverup that continues. Startling? Of course! But the history and facts supporting this charge are detailed in Emperor, EXH G, and No Basis in Law, EXH F.

Since these articles thoroughly cover the matter, we will set forth here only a few salient facts. There is not now nor has there ever been any statute which so much as hints that the government may impose the sanction of suspension or revocation for the violation of a safety rule. Or cause violation charges to be tried before the NTSB rather than in district court with right to jury. In 1926 Congress considered a criminal enforcement system, $500 and/or 90 days, and a civil money penalty system with right to jury trial. It chose the latter. At no time then, or since, has it ever considered license suspensions as a penalty for safety violations. No such bill has ever been introduced, or hearings held. The system was solely the creation of executive branch officials unwilling to work with the civil penalty system Congress had just enacted.

The touchstone case, Wilson v. CAB, which upheld the punitive certificate sanction system in 1957, first time it was ever challenged, is based on fundamental error: belief by that court that it began in 1938, when in fact it began in 1926. ⁽⁴⁸⁾ Thus Wilson is worthless as precedent; any argument on what Congress intended must be conducted in the time-frame of 1926. The legislative history there is crystal clear: civil money penalties with right to jury, nothing else. FAA lawyers are well aware of this mistake, yet continue to cite Wilson as authority for their actions which, on its face, in our view, is a fraud on the courts.

In addition to lack of a statute, there is not now, nor has there been since 1940, any regulation which tells pilots, mechanics or operators that their certificates are subject to suspension or revocation as a sanction (penalty) for the violation of safety rules. Or that the choice of penalty and forum is in the absolute discretion of the very official in the executive branch who initiates the case. Although it had no lawful basis, a rule did exist from 1926 to 1940. Its disappearance in 1940 is part of the coverup detailed in Emperor.

To put the matter another way, at no time in the six-decade history of federal regulation of aviation, either through congressional hearings, or APA notice and comment procedures, has the public ever had a say in the making of this policy. It is strictly the creature of bureaucracy.

The single rule FAA has on certificate action, FAR § 13.19, mentions only reinspection of aircraft and reexamination of airmen, that is, it is solely directed to qualification matters. It says absolutely nothing about rules, violations, offenses, penalties or sanctions. But even it has never been adopted through APA notice and comment procedures. This is also true of its companion rule on civil penalties, FAR § 13.15. This latter deliberately misstates the statute on which it is based, section 901 of the FA Act, 49 U.S.C. 1471. The rule says "if a civil penalty is contemplated"; section 90l says that "any" person who violates "any" rule "shall be" subject to a civil penalty.

By not promulgating its certificate penalty policy through notice and comment procedures, FAA is in violation of the APA, 5 U.S.C. § 553. At the very least it is a general statement of policy and should be published in the Federal Register. That failure is also a violation. 5 U.S.C. § 522(a)(1). FAA has never promulgated a rule incorporating its emergency power. Ditto. Such a rule did in fact exist under the Civil Aeronautics Administration (CAA), but CAA lawyers, when they became FAA lawyers, dropped it. The list goes on and on.

Put another way, there is nothing in the United States Code or the Code of Federal Regulations that either layman or lawyer could read that so much as hints that pilot, mechanic or operator can lose his license as punishment for the violation of a safety rule. FAA officials violate the APA and fundamental concepts of due process for a very cogent reason: were they to promulgate these policies through public notice and comment procedures they would have to state clearly what their legal basis is, and they can't, because none exists.

The Go Group case provides another example of how such a loose, non-formalized enforcement program allows citizen rights to be abused. The emergency order required the companies to turn in their certificates. Because of oversight, this was not done: management was preoccupied with a myriad of business decisions, laying off almost all of its 143 employees, etc.; and counsel had to focus on and prepare for the Go Leasing hearing, the only real chance of getting back into business. So for four months the three certificates simply hung in their frames on the wall in the reception area with everyone walking by them daily. Lawson then sent a letter calling attention to the fact these certificates had not been turned in. Recall that Go Leasing had defeated revocation in the ALJ hearing but been given a 10-month suspension.

Mr. Smith immediately went to the facility, collected and took custody of the certificates. Suspecting that Lawson had something up his sleeve, he then wrote to him asking him to clarify what date the suspension would start from. Lawson replied that it wouldn't start until the certificate had been turned over. (He didn't bother to ask for Royal American's and Go Air's, which suggests an obvious lack of good faith in the matter; he well knew Go Leasing was the cash-flow entity.) Although there is a rule that requires a certificate to be turned over when suspended or revoked, there is no rule which states a suspension does not start until it is, nor what happens when an emergency revocation is later changed to a fixed suspension. In non-emergency cases, where an accused pilot has an automatic stay and can keep his license until end of trial or appeal, as a practical matter, if he loses, the suspension isn't going to start until he turns over his ticket. But pilot cases, where the man could use his license to obtain a job, or rent an airplane, have no relationship to a substantial operating company which immediately shuts down in response to an emergency order and couldn't possibly operate without FAA knowing it. Having honored the emergency order immediately, it is absurd to suggest that simple oversight concerning a piece of paper no one ever looks at anyway deserved an additional four months of penalty.

Mr. Clark took the issue to district court, where the judge, without even a motion from the government (because of his prior association with the Royal American and Go Air case), dismissed it for lack of subject matter jurisdiction. On appeal the circuit court said the case belonged at NTSB. This was totally in error, and illustrates how difficult it is to challenge FAA, when no court will accept jurisdiction. NTSB had neither jurisdiction of the issue, nor holds the type of injunctive and declaratory judgment powers required for its resolution.

Lawson thereafter issued an order of revocation for Go Leasing as punishment for its failure to turn over its certificate, the ALJ (the same as in the original case) rubberstamped the FAA order, the Board affirmed, and the matter is now on appeal. Revocation was anomalous. The matter was inadvertent, and had nothing to do with airsafety. What the matter tells us is that FAA-NTSB officials can do anything they want to: "How dare you challenge us, you'd better understand we don't need rules, and the law is what we say it is." And in any case, civil penalty action should have been used, which would have guaranteed Go Leasing's right to jury, with any fine set by an impartial district judge.

It should be noted that there was no point in turning over the certificate after Lawson injected a condition that had no basis in law. One way or the other Go Leasing would have had to go to federal court for a decision. Had there been a plain-spoken rule warning that this could happen, it would likely have caught the attention of management and counsel. Mr. Lawson personally tried the original case just one month after service of the emergency order, yet not once during the five-day hearing did he mention the certificates. Nor did the two inspectors when they served the emergency order.

A few comments about administrative justice. If a Washington, D.C., city councilman were to propose that the accident investigation division of its police department be placed in charge of trials of traffic violations and that the only form of punishment be suspension or revocation of drivers' licenses, he would be hustled out of the room and taken to St. Elizabeth's. Yet this is precisely what pilot or operator faces if FAA regional counsel, in his sole discretion, decides to use certificate action rather than civil penalty. He receives a one-man NTSB ⁽⁴⁹⁾ hearing with loose rules of evidence and procedure, always looser for FAA than the accused, and the only way he can be punished is a certificate sanction. The so-called law judge is not truly independent. If the accused should by some chance win his case, the government (FAA) can appeal. If a pilot is defending himself, which as many as 45% do, and wins, but FAA appeals, he is now faced with a situation he can hardly handle, so if much is at stake, he now has to hire a lawyer. In any other system of justice, if the accused wins at the trial level, that ends it. ⁽⁵⁰⁾

The harshest situation comes when FAA uses its emergency power. Although the courts have upheld it, this power is clearly unconstitutional: it is an executive temporary restraining order (TRO), but with no requirement FAA officials provide an affidavit spelling out why it is needed nor is any provision made for a prompt and independent hearing to see if it is really necessary. NTSB claims it doesn't have authority to consider this issue, balancing irreparable harm to the certificate holder against any threat to public safety. For all practical purposes this means there is no restraint on its use; it is easily abused, as here, and there is no recourse. FAA officials know full well, when they use it against an operating company, that it will destroy it outright or, at the least, force it into Chapter 11 bankruptcy.

Management chose to take only Go Leasing to the accelerated hearing provided in emergency cases. It was earning all the money, it had fewer charges. It would have been almost impossible to prepare in that short time for the long list of alleged violations FAA presented in the emergency order for the other two companies. Royal American was shut down anyway, and Go Air mechanics could work just as well independently. Go Leasing defeated revocation. The ALJ held the evidence showed that management had always cooperated fully with FAA inspectors. This was a signal victory, but Pyrrhic because the law judge imposed a ten-month punitive suspension of its certificate, basically for the Club Med flights. What aviation business could survive that?

Royal American and Go Air were called for trial six months later in Los Angeles. With no warning that he would cut their trials short unless completed within a certain time, when the law judge learned Royal American's trial would last at least two weeks, he stopped it at the end of the first, then reset it for two months later. In Denver, Colorado, where he lived! (900 miles from Tucson.) This was incredible. Management had been prepared to finish both trials in Los Angeles at one shot. Mr. Clark had a home there in which to put up witnesses, and several had moved to L.A. But Denver? Why not Minot? He couldn't possibly afford the cost that transportation, food and lodging entailed for management, lawyers and witnesses. There simply wasn't money to do it. ⁽⁵¹⁾ As a consequence, in practical effect the case was defaulted, a $500,000 certificate lost. The law judge then reset Go Air for May of '86 in Phoenix. Same problem. Also in effect defaulted. ⁽⁵²⁾ A large and suitable conference room often used for hearings by other agencies was available in the federal office building in Tucson. But the ALJ insisted he had to have a courtroom, which wasn't as readily available in Tucson. This was nonsense, the hearing in L.A. was held in a small NTSB room, not a courtroom. ⁽⁵³⁾

XIII. DAMAGE DONE

How describe the turmoil suffered by 143 persons who lost their jobs? Mortgages, car payments, kids to clothe, medical plans? Mr. Clark had to immediately lay off all but twenty, those key people kept to support the aircraft he thought he'd be able to lease. Within four months, they were gone too.

It is true Clark was already in Chapter 11, as was Go Air, which had been the corporate vehicle for running the short-lived L.A.-Las Vegas airline. But neither the carriers Go Leasing or Royal American Airways were. Income from operations was running in excess of $750,000 per month and growing. Based on this, he was preparing a reorganization plan for the bankruptcy court. It put all of these activities into one pot, so to speak, and creditors would have become stockholders. The emergency revocation destroyed any possibility of this working.

His operations sat on ten acres of prime real estate adjacent and with access to Tucson International Airport. It had been appraised as high as $4 millions and included two large hangars, administration building, plus other substantial outbuildings. He, of course, has now lost everything, including two homes with large equities. It is not possible at this time to exactly evaluate that loss, but it certainly exceeds $10 millions, and could be much, much higher. The reason this is difficult to assess is this: he basically cornered the market in the Western Hemisphere for Viscounts, spare parts and tooling. Sold under distress, these would be lucky to bring ten cents on the dollar of their value as part of a going organization. The Viscount is enormously useful and productive, but unless one has these spares and tooling, maintenance costs rise greatly.

That this is true is attested by the fact a British company, Jadepoint USA, an affiliate of which, British Air Ferries, operates 25 Viscounts, bought the bankruptcy estate, not only for its money-making potential in leasing the aircraft, but for the large stock of spares. Mr. Clark serves as consultant.

Long range Compensation for Mr. Clark through a private bill is the ultimate goal. But such a proposal without laying a great deal of groundwork would draw tremendous resistance: FAA will never admit wrongdoing; some will see it as opening a Pandora's box because many others similarly situated should also be compensated. But it must be accepted as a given that sooner or later the illegality of FAA punitive certificate actions and the agency's flagrant violations of the APA will become known , which will create a firestorm within the aviation community, and hopefully the public at large. It is our considered view that FAA's illegal actions, and coverup, represent one of the great abuses of power, if not the greatest, in the history of the federal bureaucracy. Its human impact is on a scale equal to the internment of Japanese Americans in World War II, the only difference, that happened in one fell swoop, this over a period of decades.

Short range As a foundation for the above, and also to stop these abuses from happening at all, it is imperative to establish beyond peradventure the truth about FAA enforcement. This must and should be done through Congressional hearings. The aviation subcommittees are not the proper vehicle. To a great extent they are on the spot. The proper vehicles are the Senate and House Judiciary subcommittees responsible for constitutional and administrative law. (It is our view that the root of these problems is that the FA Act in 1958 was reviewed by neither Judiciary committee.) If one reads Emperor and the Aviation Digest articles, he will see that the principle reason FAA has been able to get away with what it has is because it totally ignores the APA in its enforcement program. Were it to propose rulemaking for its present certificate program through public notice and comment procedures it would have to explain what its legal authority is. The claim that its officials can do whatever they want to, so long as they say it is in the "public interest," simply cannot stand scrutiny. And even if that were true, why have they not invited the public to help in making such rules?

A foundation can be laid to demonstrate the need for these hearings in this fashion: the chairmen of these committees should request the Administrative Conference of the United States to review Mr. Smith's articles and issue a report as to the validity of his charges. The Conference is a tiny and little-known independent agency within the executive branch. Its charter is to monitor federal administrative law and to execute special assignments at the direction of Congress. From time to time these include informal tasks such as we suggest, and would not require special legislation or appropriations. We know this, because we have already checked. Armed with that report (the conclusion of which is a certainty), the subcommittee and Judiciary committee chairmen will come to understand and then be able to show the imperative public need for such hearings.

The evidence is overwhelming that Western Region officials deliberately set out to destroy the Go Group -- and, of course, succeeded. They charged inadequate management when their own inspectors had requested and approved consolidation of key jobs for all three companies. They charged failure to overhaul components when their own inspectors had for years been accepting documentation that they had been, tags even today accepted by FAA from UAL.

They charged that certain foreign components lacked proper documentation even though FAA-Washington lawyers had approved as sufficient that which was supplied by the British stockist and their own inspectors had been accepting it all along.

They deliberately violated their own procedures by not allowing management to see the special team's list of discrepancies so they could rebut or mitigate any charges and, most importantly, take corrective action, which would have left these officials without any justification for revocation, much less an emergency.

In a nutshell, what we have here is the anomalous situation of the agency's right hand charging as violations serious enough to require emergency revocation matters which other agency officials had approved, and the right hand was well aware of it.

Leaving aside the fact Mr. Clark shut down Royal American's Part 121 air carrier operation so as to concentrate management on Go Leasing, and he had already beefed up Go Air's, the only fair way to solve that problem was to give specific notice of what these officials claimed was needed, along with reasonable time to accomplish it, and if not so done, suspend the certificates only until it was.

Even were the overhaul charges legitimate, they could have been quickly cured by installing recently overhauled parts with additional documentation. And it should be remembered that on May 2, 1985, of the three airplanes involved, one wasn't flying, the other two had been transferred to Go Leasing where the charge had no basis anyway since the parts were not on hard-time but on condition.

The foreign parts problem could have been solved by giving management time to send for the additional documentation. In fact, this was later done.

The facts strongly suggest improper motives in this matter, made the worse because the officials involved did these things under color of authority. Justice for Mr. Clark, one million FAA certificate holders, and thousands of employees, demands that it not be allowed to happen again.

[Note: For reasons of space, the fact many are on this website and not necessary to what is related here, the exhibits are not included.]