AmWest turning over documents to Treasury agency - East Valley Tribune: Business

AmWest turning over documents to Treasury agency

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Posted: Tuesday, March 23, 2004 5:59 am | Updated: 5:07 pm, Thu Oct 6, 2011.

America West Airlines confirmed Monday that it is one of several airlines directed by the Treasury Department to turn over records related to its dealings with a federal board that approved a $429 million loan package in early 2002.

The Tempe-based carrier received subpoenas from the department’s inspector general.

The company was told to provide documents of correspondence with Air Transportation Stabilization Board members and staff.

"America West is happy to respond and comply with the request in a timely manner," the company said in a statement.

The New York Times reported Friday that five airlines received subpoenas on March 12 ordering them to turn over documents related to their dealings with former board executive director Daniel Montgomery, other staff members, board members and relatives.

The newspaper said the eight-page subpoenas do not say why investigators are seeking the information.

They cover a period from Jan 1, 2002, to Jan. 31, 2004. Inspectors general usually investigate fraud and government waste but can also look into other problems in agency programs.

A Treasury Department spokeswoman had no comment and would not confirm the investigation.

The board approved a $429 million federal loan guarantee package for America West in January 2002. Montgomery, who was the only person mentioned by name in the subpoena, was appointed executive director in March 2002 and served until August 2003, the Times reported.

The eighth-largest carrier had said the financial crisis triggered by the Sept. 11, 2001, terrorist attacks would have forced it into bankruptcy barring government aid.

The government approved loan guarantees for $380 million, essentially agreeing to act as a co-signer and pay the lender that amount if the carrier goes out of business. The government did not guarantee the other $49 million.

The stabilization board was created by Congress after the Sept. 11 attacks to administer $10 billion in loan guarantees to struggling airlines.

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