ATLANTA—President Donald Trump rails against crime in D.C.’s streets, but he might be looking in the wrong place. Try the corporate suites instead.
Specifically, Delta Airlines. Delta falsely claimed it followed a section of the coronavirus aid law that the Association of Flight Attendants-CWA crafted: Limiting executives’ compensation while keeping workers flying, at full pay, even on empty airplanes.
Delta, the nation’s largest airline, got caught by an unidentified whistleblower. So it paid an $8.1 million fine to the federal government for falsifying records of its pay to its executives and for lying about laying off its workers during the coronavirus pandemic.
As part of the plea deal with Theodore Hertzberg, the U.S. Attorney for Atlanta, the airline was permitted not to admit or deny guilt. But it paid anyway, and two unions who are trying to organize Delta’s unorganized workers—the Association of Flight Attendants-CWA and the Machinists–are in no doubt about the carrier’s wrongs.
Especially AFA-CWA President Sara Nelson, who played a key role in crafting the provisions Bastian’s airline broke.
“Union leaders and executives came together to negotiate the Payroll Support Program (PSP)” as a key part of the coronavirus relief law “and push for Congress to pass it, not once, but three times,” Nelson said after Hertzberg’s July 16 announcement.
Delta CEO Ed Bastian “was absent” from negotiations over the program, she noted.
“We fought tooth and nail for a program that protected the workers who were at risk of losing everything in the pandemic and ensured our airlines could remain intact to meet demand when travel returned.
“We applaud the whistleblowers who came forward to shine a light on this gross injustice and violation of a law that simply required Delta to use government relief funds to pay their workers and not their executives,” Nelson said.
Nelson added a subtle dig against Trump: Career civil servants at the Treasury Department enforced the PSP. Those are the career employees Trump is firing.
“A thriving, fair economy and democracy depends on unions and government oversight that puts in check corporate greed.”
The Machinists (IAM) also lauded the fine, and AFA-CWA and IAM are two of the three unions that have waged a long campaign to unionize the majority of workers at Delta, the only one of the nation’s big four air carriers that is not mostly unionized. The Teamsters are the other union in that campaign. They have yet to comment on the fine.
Machinists President Brian Bryant and Air Transport VP Richie Johnsen said Delta’s $8.1 million payment “confirms what the IAM has said since 2020—Delta Air Lines took billions in taxpayer-funded relief money under the condition that workers’ jobs, pay, and benefits would be protected, and then violated that agreement.
“The U.S. government has now validated our long-standing concerns: Delta’s actions were not just unethical but unlawful. The airline may not have reduced hourly wages, but it used mandatory unpaid leave and reduced scheduling to slash weekly and monthly pay, gutting the very protections the CARES Act was designed to uphold.”
The back story involves the pandemic aid law, the CARES Act, and specifically sections dealing with the airlines. The pandemic shut down travel, especially air travel, and hotels, motels, bars, and restaurants. It was officially declared a national emergency on March 13, 2020, during Donald Trump’s first administration.
Nobody could fly, nobody could travel, and nobody could stay at hotels. Flight attendants, most of whom AFA-CWA represents, were suddenly out of jobs. So were mechanics and ground support workers, many of them IAM members. So were hotel and restaurant workers. Unite HERE, which represents them, reported that at its worst, 98% of its members were unemployed.
Came to Congress
Airline bosses, facing mass bankruptcy, with grounded and empty airplanes, came to Congress, seeking billions of dollars in federal cash. Their lobby, Airlines for America, spoke for them, as did the individual CEOs—except, says AFA-CWA, Ed Bastian. He stayed out of D.C.
The passenger airlines eventually got $54 billion in federal aid during the years of the CARES Act, with Delta alone getting almost $12 billion, two-thirds of which was forgiven. But thanks to Nelson in particular, and the airline unions in general, there were two big conditions to that cash.
One was that planes kept flying and the crews kept earning their full salaries, even if the planes were empty or one-third full. No forced layoffs, no cuts in overtime, no pay cuts.
The other big condition was a limit on airline executive pay, for Bastian, his fellow CEOs, and everybody else in the carriers’ top echelons, through April 2023. The airlines also couldn’t use the federal cash for stock buybacks or corporate dividends, two other big sources of corporate honchos’ incomes.
Specifically, corporate officers or employees whose total compensation was between $425,000 and $3 million in 2019, the last full year before the pandemic, were limited to $425,000 total. If they had earned more, a different formula limited their payouts.
Hertzberg said Delta broke both conditions, even though it didn’t admit guilt. The CARES Act banned layoffs and banned refusal to pay overtime until September 2020. Delta did so, anyway. And Delta overpaid executives and lied to the Treasury about it.
Nelson had a special “in” on Capitol Hill to ensure both conditions were in the CARES Act, the first big relief bill lawmakers passed to pull the nation out of the coronavirus-caused depression.
Nelson is from Portland, Ore., and worked closely with then-House Transportation and Infrastructure Committee Chair Peter DeFazio, a Democrat from Portland, to ensure the strings on the airline aid went into the legislation.
DeFazio agreed. So did his committee. So did the rest of Congress. And Trump signed the law.
Meanwhile, Delta spent a record $1.2 million on lobbying in the first quarter of 2020, before the CARES ACT passed, OpenSecrets.com reported. And AFA-CWA said Delta spent a lot of that against the strings on the airline aid.
And since 2014, OpenSecrets adds, Bastian personally contributed more than $86,000 to GOP candidates—with $25,000 of it in a post-2020-election contribution to the Senate GOP’s campaign committee. His total to Democrats in the same era: $7,200.
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