WASHINGTON (CN) — United Continental airlines will pay $2.4 million to settle charges that it cost shareholders money by reinstating a money-losing flight for the convenience of a man who was chair at the time at the Port Authority of New York and New Jersey.
David Samson, who has already pleaded guilty to bribery in the case, was New Jersey Gov. Chris Christie’s point man on the Port Authority. The SEC said Samson wanted a direct flight from Newark to Columbia, S.C., near his home, the SEC said in a statement.
United set up the flight in 2011 “though it was projected to lose money,” because of “pressure from David Samson,” the SEC said in its Dec. 2 cease-and-desist order, with sanctions, against United Continental Holdings.
Samson, 77, pleaded guilty to criminal bribery in the “South Carolina Route” case in July, the SEC said.
Continental had canceled the flight before its merger with United, because it lost money, and the airlines expected to lose money on it again, the SEC said.
However, “United officials feared Samson's influence could jeopardize United's business interests before the Port Authority, including the approval of a hangar project to help the airline at Newark's airport.”
The very day United’s CEO approved the route, the Port Authority board approved the lease agreement for the hangar project, and United employees were told to make “no proactive communications” about the new route, according to the SEC.
The airline lost $945,000 on the route before it canceled it again, “roughly around the time of Samson’s resignation from the Port Authority.”
United also entered into a nonprosecution agreement with the U.S. attorney and paid $2.25 million, the SEC said.
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