published Sunday, June 19th, 2011

Deal gets upgrade after tax break

By James Salzer/The Atlanta Journal-Constitution

Two weeks after Gov. Nathan Deal signed a $30 million tax break for Delta, the airline upgraded Deal and his wife to first class — “Diamond” medallion status that the company awards to its most valued customers.

That status includes free upgrades when seats are available, Sky Club membership, bonus miles, priority check-in and boarding, fee waivers and more.

Deal’s spokesman said there was no connection between his signing of the bill and his new medallion status and called the gift a “contribution to the state of Georgia.”

Delta put the combined value of the awards at just under $8,000, well above the $25 gift limit included in the executive order Deal signed that covers ethics for his office and others under his authority.

“This was obviously a thank you for signing that [tax] bill,” said William Perry, executive director of the government watchdog group Common Cause Georgia.

Delta gave similar — although less valuable — awards to key lawmakers last year, including to the sponsor of the tax-break legislation.

When asked about the gifts to Deal and his wife, Delta spokesman Trebor Banstetter said in a statement, “As Georgia’s longtime hometown airline, Delta supports local elected leaders through in-kind contributions.”

Deal spokesman Brian Robinson said there is no connection between the Delta gift and the tax break. The award came in time for Deal’s planned economic development trade mission to Europe in May.

“This was not a personal gift,” Robinson said. “This was Delta’s effort to contribute to an economic development mission.”

He said the governor and his wife would not use the awards for personal travel in the future.

“Any time it will be used, it will be used for state business,” he said. “They will not be doing any personal leisure travel while he is governor. They spend their vacations in Georgia.

“Delta is a great partner in helping us get these trips done so we can bring jobs to Georgia. Delta’s contribution here is a contribution to the state of Georgia.”

Such gifts would have been illegal under an ethics proposal pushed by a coalition of public interest groups during the 2011 legislative session. That proposal, which limited gifts to no more than $100, never went anywhere.

The Delta bill Deal signed on April 27 extends a partial exemption from fuel sales tax. The tax break, first passed in 2005 when Delta was in serious financial trouble, is worth $30 million over two years.

Supporters of the measure say it was an attempt to help a vital employer in the state. They note that a special council that spent last fall studying the tax code proposed eliminating many tax breaks but keeping the one for Delta.

Opponents say the state, which has cut billions of dollars from its budget during the past three years, can’t afford to lose the tax money and that the break originally was instituted when Delta was in bad financial shape.

Delta gave at least 10 top politicians or their campaigns upgrades, special status and/or Sky Club memberships worth about $20,000 last year, according to lobbyist and campaign reports.

Rep. Virgil Fludd, D-Tyrone, who opposed the Delta tax break, said, “I think it is unconscionable that Delta would be able to provide these kind of gifts when they claim to be under so much fire financially.

“It is patently unfair that they would exercise this kind of influence over the process. If they had an opportunity to get a tax break, let that tax break be given on its own merit, not on special favors to elected officials.”

When he took office, Deal signed an executive order extending the gift limits for his office put in place in 2003 by Gov. Sonny Perdue.

The executive order says, “No employee, nor any person on his or her behalf, shall accept, directly or indirectly, any gift from any person with whom the employee interacts on official state business, including, without limitations, lobbyists and state vendors.

“Where appropriate for purposes of tradition, ceremony, or inter-government relations, or when acting as a representative of the office of the governor or an agency, an employee may accept a gift on behalf of an agency or the office of the governor.

“Upon the signing of this order, an employee of the executive branch may not accept a gift that retains value after its acceptance.

A “gift means anything of value exceeding $25, including, but not limited to, food, lodging, transportation, personal services, gratuities, subscriptions, memberships, trips, loans, extensions of credit, forgiveness of debts or advances or deposits of money.”

While Perdue’s original order had stated limits, lobbyists also reported giving him gifts that far exceeded those limits. For example:

In 2008 a lobbyist for transportation giant CSX spent $700 on Perdue for a trip to the Georgia-Florida football game in Jacksonville.

In 2009, an IBM lobbyist spent more than $43,000 taking Perdue and staffers to a conference in New York.

That same year, an Altria lobbyist listed spending $5,000 to fly Perdue to attend a Republican governors meeting in Austin, Texas.

Perdue’s predecessor, Roy Barnes, banned employees of the executive branch from taking any gifts from lobbyists.

Julianne Thompson, an organizer for the Georgia Tea Party Patriots, which is pushing ethics reform legislation, called Deal’s acceptance of the Delta gifts “extremely disappointing.”

“The timing is certainly questionable,” she said. “This is proof positive why we need a cap on gifts and ethics reform in Georgia.”

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