GRAND JUNCTION, Colo.—An FBI investigation into alleged fraud at Grand Junction Regional Airport could harm the airport’s credit rating and jeopardize $77 million in federal grants to the facility, Moody’s Investors Service reported.
FBI agents seized documents from the airport’s administrative offices on Nov. 7. The agency declines to comment on the reason for the probe, and a federal judge sealed court records on the investigation.
Airport manager Rex Tippets didn’t respond to repeated requests for comment, The Daily Sentinel reported Wednesday ( ). But Denny Granum, chairman of the Grand Junction Regional Airport Authority board, said airport authorities haven’t been told what the investigation is about.
“It’s very unfortunate that this kind of investigation can have this kind of an impact on a public airport, particularly when we haven’t even been told the nature of the allegation behind this investigation,” Granum said.
Moody’s called the FBI’s involvement “rare” because fraud investigations at airports are normally conducted by the Federal Aviation Administration.
Moody’s said in a report on Monday that the Grand Junction airport could lose $77 million in federal grants unless it tried to recover funds allegedly lost to fraud, the Sentinel said. Any action on grants could affect the airport’s credit rating, which at Baa2 is stable and investment grade, said Moody’s spokesman David Jacobson.
Contracts with a federal agency that controls the grants require the airport to “make all efforts to recover any federal funds which have been fraudulently spent,” Moody’s said. “If the recipient were to fail to do so, the grant agreement can be terminated for cause.”
The Grand Junction Regional Airport Authority plans to spend up to $180 million on an administrative building, terminal, runway, taxiway, drainage system and other projects through 2023. A capital improvement plan says much of the money will come from bonded debt and $77 million in grants from the federal Airport Improvement Program.
The airport board is in negotiations with West Star Aviation on an $8 million paint hangar West Star is building. Under a proposed deal, the airport would issue $8 million in bonds to fund the purchase of the hangar and lease it back to West Star. A West Star expansion could generate jobs for the region’s economy.
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Information from: The Daily Sentinel,
