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Airport manager hits turbulence COMPLETE TEXT OF COUNTY AUDIT, RESPONSES FROM ADMINISTRATORS Audit suggests another side of Case's performance By Chris Bristol of the Mail Tribune By most accounts, the final year of the millennium has been a good one for Rogue Valley International-Medford Airport. Case August was the busiest month in the airport's history, with a record number of passengers -- more than 47,000 -- coming and going. Direct commercial flights to Los Angeles began Oct. 31, bolstering existing connections to San Francisco and Portland, and work got under way on a runway extension designed to accommodate even the heaviest cargo jets. So it was no surprise last month when the Oregon Airport Management Association named Bern E. Case its 1999 airport manager of the year. Tom Franklin, president of OAMA and manager of Newport Municipal Airport, praised Case as one of the most influential and respected aviation executives in the state. He specifically cited Case's work in securing a federally designated Foreign Trade Zone that benefits the entire Rogue Valley. "Ask anybody in this industry," he said, "what airports in this state and which people have the respect of their peers, (and) Medford and Bern Case come up, boom, just like that." Michelle Case walks down a Turbo Way 1000 commuter-plane ramp. The product -- and Michelle Case's company, which markets it -- figured prominently in an audit of the Medford airport that raised questions about Case's husband, Airport Director Bern Case. But an internal Jackson County audit of the county-owned airport this summer painted a less glowing picture of Case and his management team. The audit, a copy of which was recently obtained by the Mail Tribune, documented a "pattern of poor judgments" that included sloppy timekeeping and payroll accounting, personal use of rank-and-file airport personnel and misuse of public property. It also touched on a potential conflict of interest involving Case and his wife's business, Eagle Point-based Turbo Way Inc., which makes wheelchair-friendly hydraulic lifts for commuter airplanes. Among the findings: an employee was paid for 130 hours of work she never performed, maintenance crews were sent to fix frozen pipes at Case's home last winter and the operations supervisor was allowed to use limited hangar space to store a boat and other personal belongings. "Any one complaint or item, taken by itself, might be construed as poor judgment," county Auditor Debbie Taylor concluded. "However, taken as a whole, the findings show a pattern of poor judgments that present serious concerns about airport activities. "These concerns," she added, "need to be promptly addressed and corrected." The audit was performed in direct response to complaints made by an airport secretary, Dawn Neff, a five-year employee of the front office who quit a few weeks after the audit was finished in mid-July. Case declined to comment on the audit. He came to Medford in 1994 from the airport in Lubbock, Texas, which during his four years as aviation director saw record growth, with two new airlines and more than $20 million in expansion and industrial development projects. "Believe me, I'd love to talk to you about it," he said last week, "but I can't." The audit was grouped by theme. It substantiated many of Neff's complaints and made a number of recommendations. Misuse of time New airport Marketing Director Kim Stearns was paid a total of 130 hours for vacation and a relative's funeral, even though she was on probation at the time and was not entitled to such pay. Case and two members of his management team, administrative manager Craig Baldwin and operations supervisor Robert Russell, played golf on weekday afternoons. Case justified one of these session as a "walking" staff meeting because he discussed personnel issues with the airport fire chief. Case gave references for a number of products and equipment used by the airport, including the hydraulic lift or ramp that is made and sold by his wife's company, Turbo Way. Audit recommendation: Management should tighten up timekeeping and payroll records, and employees such as Stearns who work flexible schedules should document their activities so a written record exists "in the event of questions about work time." In addition, the audit advised Case against engaging in "activities that could be perceived as a conflict of interest, such as inquiries about Turbo Way." Personal work Case told auditors he "may have" had Neff type letters for Turbo Way in the months before the company was incorporated in May 1997. His wife, Michelle Case, is listed as the president and secretary of the company, according to the state Corporation Division. Case had Neff type up a church speech, and Baldwin had her prepare tax returns for Case's sons. Case said Neff may have "volunteered" to type the speech, and Baldwin said he did some tax work for Neff as an exchange. Neff disputed both statements. Maintenance staff have done "personal work" for Case on a "few" occasions during regular business hours, including last winter when pipes froze at Case's home. The audit did not specifically address complaints that staff were "asked" to load managers' golf clubs into their cars. According to the audit, Case produced financial records showing that he either paid the maintenance staff for their help or made donations in their names to an unspecified charitable organization. Various employees confirmed this was true. However, despite management's description of the staff as "one big family," some of the maintenance staff said they felt "pressured to keep doing personal work for Bern and Craig." Audit recommendation: "To avoid the any appearance of impropriety, staff should not work on personal business in the office or have airport staff perform personal home projects during normal work hours." Misuse of public property Operations supervisor Robert Russell stored "certain personal belongings" in hangar D-6 last year, with Case's approval. The belongings apparently included a boat, and Russell did not pay rent for the hangar. Neff alleged that Russell actually used the hangar for about eight months, but the audit concluded the period of use probably coincided with a four-week stretch when Russell was between houses. The airport has a long waiting list for hangars, according to the audit, but managemers said that Russell's use of D-6 involved maintenance space and did not affect such reservations. Audit recommendation: Employees should not use county property for personal uses. Conflict of interest Case insisted that Turbo Way is his wife's business and that his only involvement was in the early going, prior to the company being incorporated, when the lift was under development. Case volunteered information that his wife has a partner in Turbo Way who is married to Dennis Richardson, a Central Point attorney who has done some free legal work for a community group called Airport Community Enthusiasts. Neff contends that Turbo Way is actually overseen by Case, not his wife, but the audit cited no substantial evidence supporting the allegation. Case said he once warned Richardson to turn down a potential client (who was negotiating with the county for a lease at the airport) to avoid the "appearance" of conflict of interest. Audit recommendation: "Every effort should be made to avoid activities that could be perceived as a conflict of interest." Conclusion After the audit was finished, Case sent a brief memo to County Administrator Burke Raymond in which he characterized the various recommendations as "prudent" and pronounced himself ready to accept "appropriate discipline if ... necessary." Baldwin and Russell also sent memos accepting the recommendations. Russell paid the county for a month's rent -- $217.82 -- for the hangar he used. At the same time, Russell carefully disputed a statement Raymond apparently made at one point during the investigation. "Mr. Raymond," he wrote, "you made a comment that maybe our attitude was one that we feel we can do whatever we want to out here at the airport. I assure you that this is not our attitude." Russell said he and others worked 40 to 50 hours a week, and were on call 24 hours a day to respond to emergencies at the airport. About his boss, Russell wrote, "Mr. Case's record here should speak for itself. I have never worked for anyone that works harder, treated his employees better, or has stronger morals and ethics than Mr. Case." In a letter to Case dated July 29, Raymond said management's "responses" to the audit were acceptable and that he considered the matter closed. Raymond has since retired. "No further action on my part will be taken unless new facts become known," he wrote. Franklin said he and his colleagues were unaware of the audit. Even so, he reiterated his belief that Case is one of the top aviation executives in the region. "Any time somebody's in a position where they're growing like crazy, there's bound to be ... some judgment errors," he said. "Save somebody really getting their fingers caught in the cookie jar ... we're all going to make little judgment errors once in a while." Mail Tribune reporter Dani Dodge contributed to this report. Reach reporter Chris Bristol at 776-4487 or by e-mail at: [email protected] Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA