New Mexico Airlines CEO promises fight on Carlsbad's air service contract

Feb 20, 2013 Full story: Carlsbad Current-Argus 14

Members of Carlsbad's Air Service Committee made it clear last week that they want to ditch the city's subsidized air service with New Mexico Airlines in favor of newcomer Boutique Air.

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Since: Oct 09

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#1 Feb 20, 2013
At least he didn't slap a baby.
Erm

Carlsbad, NM

#2 Feb 21, 2013
"How to not make friends or influence people," by Greg Kahlstorf
loss prevention

Lovington, NM

#3 Feb 21, 2013
Kudos to him for exposing the CDOD's practices
Bright Light

Sahuarita, AZ

#4 Feb 21, 2013
It is always fun to see when someone turns on the light and watch the cockroaches run and hide.

Here is the letter to "Mayor" Dale Janway Mayor of Carlsbad, NM

Mayor Janway,
I had the opportunity to visit Carlsbad last week to attend a meeting at Carlsbad City Hall regarding the city's recommendation on the federal Essential Air Service contract.
It appears you have delegated responsibility for formulating the city's recommendation to the nonprofit, private Carlsbad Department of Development, which appears to serve the city in this capacity on a number of public policy issues. CDOD receives public funds from the City of Carlsbad as well as Eddy County.
Unlike those government entities, however, the CDOD has no public transparency, and engages in lobbying activities to affect political influence. The prominent influence of CDOD is evident from your own participation as an executive team member of the organization, as well as the fact that those in charge of the air service meeting I attended were also high-ranking CDOD executives. Don George, who ran the meeting, is the president of the CDOD board.
John Waters, who appeared to co-chair the meeting, is a CDOD ex-officio board member, and Paul Shoemaker, who shared the spotlight during the meeting with Don and John, is a member of the CDOD board of directors.
The meeting was called because the committee previously advanced a recommendation to USDOT which was inconsistent with terms of the federal RFP; exceeded the community's benefit under EAS statutes; and exceeded the cost of service Carlsbad has received for six years by several million dollars.
In short, the CDOD-led committee recommended spending millions more than empirical evidence clearly demonstrates is necessary to provide the basic EAS "safety net" which keeps communities like Carlsbad linked to the national air transportation system. Rather than choose an air carrier for you (as USDOT has done with other communities in the past), the EAS Chief in Washington sent you an email narrowing your choices down to just two.
But rather than choose either of the options set forth by EAS grant administrators, Mr. George talked about how the committee had "already taken a position" and "can't back away from it now." Mr. George also expressed his annoyance with EAS program administrators for including bids that were too expensive to be seriously considered in the first place, apparently oblivious to the fact that federal officials are legally required to present all bids received, whether viable or not. City officials making recommendations on those bids are expected to actually read the RFP and the bids, and to know and understand the nature and limitations of the EAS entitlement. It appears the committee did not read the RFP or the EAS statutes, and does not understand the question, much less the answer.

Mr. George asserted that EAS administrators "just don't understand Carlsbad's 'unique needs'" and suggested that the group go back to USDOT with its original recommendation, acknowledging (but completely ignoring) the two clear choices EAS administrators had previously given them.

Don George and Paul Shoemaker discussed at some length potential meanings of the word "economy," and how a bid of more than $3 million was really more "economical" than a $1.5 million bid, before deciding the best strategy would be to parrot the original recommendation back to USDOT (after being told no the first time) but to stress that they really, really, really, REALLY want it. Don George also stated his belief that the federal EAS chief "does not have any power to make decisions" and that "decisions are made above his level by the secretary."

To which CDOD Ex-Officio Board Member John Waters stated: "and that's a level where we have influence. If he [the EAS Chief] doesn't see what we need, we can have our people apply pressure to the secretary."

See Part two

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Bright Light

Sahuarita, AZ

#5 Feb 21, 2013
Part Two

It seems extraordinary that officials of the nonprofit, tax-exempt CDOD, representing (and funded by) the City of Carlsbad, would openly discuss the use of political pressure to exert influence over the official actions of cognizant federal employees in their official capacities, regarding federal procurement matters.

There is evidence to suggest that the CDOD-led airline recommendation committee has adopted criteria and standards not found in the federal RFP, and not documented or made available to all bidders for consideration. It also seems clear that the meeting I attended was not an "informational meeting," as promoted, but rather an effort by CDOD to legitimize a foregone conclusion. This became painfully evident when a citizen asked Don George how long the CDOD-preferred bidder has been delivering scheduled air service. Don George replied "we covered that at the last meeting."

The committee, however, did not make minutes of its previous discussions available to those who did not attend the prior meeting, and seemed intent to shut down any discussion not favorable to their preferred bidder.

It took just seven words for Don George to tell a concerned citizen "we covered that at our last meeting." Using the same number of words, he could have answered the question honestly -- and directly -- by saying "Boutique air has never provided scheduled service." These tactics only serve to undermine the integrity of the procurement process, and raise doubts about the objectivity of the city's evaluation. It also appears criteria used by the CDOD-led airline selection committee to consider its recommendation have been influenced to a significant degree by individuals and organizations in a position to profit directly from the EAS contract award, creating potential for significant conflicts of interest.

Undocumented requirements, standards and criteria inflicted by CDOD unnecessarily and unreasonably inflate the cost of delivering basic EAS service to Carlsbad, and require expenditures which six years of empirical evidence indicate are not necessary to fulfill Carlsbad's basic EAS entitlement.

In summary, it appears CDOD is burdening the EAS program with expectations well beyond the legislative intent and scope of the program, and in doing so, unnecessarily and artificially inflating the cost of government contracts with expenses not reasonably necessary to deliver service. These types of federal grant abuses are among the reasons the United States Department of Energy declined to consider Carlsbad's input related to the $800 million WIPP O&M contract in 2011, after CDOD attempted to sell the city's support to the highest bidder in a pay-for-play scandal that left city without a voice in the largest development project in the region.

One Department of Energy official described it as something like "watching two rabid dogs fight over a scrap of meat." So DOE simply took the scrap of meat away, leaving CDOD with nothing to fight over.

Why would you place the same organization, and the same cast of characters, in a position of responsibility for a decision involving the city's air service?

Why would an organization that made Carlsbad appears so corrupt as to be completely shut out of a decision involving its own future be expected to behave any more responsibly in his matter? Is history repeating itself?

Mayor Janway, by and through this email, I am directing New Mexico Airlines' Attorney, Wayne Bingham, to refer this matter to the New Mexico Attorney General's Office, in order to get a better sense of whether the CDOD and the city are in compliance with the New Mexico Procurement Code and other statues related to troubling relationships between government officials, nonprofits, lobbyists and federal contractors in Carlsbad.

Best regards,

Greg Kahlstorf

Chief Executive Officer

Pacific Air Holdings

(New Mexico Air)
Flyin and drinkin

Carlsbad, NM

#6 Feb 21, 2013
loss prevention wrote:
Kudos to him for exposing the CDOD's practices
And the Bartender is Back with his witty posts! What has he been doing since the election?

"Y'all need to think <hiccup> bout what yer doin! Dont be listenin to that evil D O D <Hiccup!> All those people (please read as as most business owners in town) r bad people! <stumbles> They dint like me when I joined and gave my sage opinion bout everything in this shythol ..er I mean town. I just love all you assh...er great people."
Erm

Hobbs, NM

#7 Feb 21, 2013
Dear Topix braintrust:

His rants read like the manifesto of that crazy LAPD cop. They are filled with demonizing tactics, repeated attacks using subjects not related to the topic and just about every other logical fallacy imaginable.

"the CDOD is out to get me!!!"
"forget the complaints about my poor customer service, what about that RFP for the WIPP contact and never mind that it has nothing to do with the accusation against me!"

He's not exposing a darn thing. A group of people that reasonably included some CDOD members met and reviewed their options. Period. He's throwing a temper tantrum and making threats- just like he has done in nearly every other community his "airline" has operated. Please try to use the brain that God and/or mother nature gave you and see his cheap scapegoating tactics for what they really are.
Euthanasia

Carlsbad, NM

#8 Feb 21, 2013
I really don't have time to read all the Kahlstorf diarrhea above. In less than 350 pages, please give the numbers requested below. I'm sure they are public record, but you being so knowledgable, will certainly have that at your fingertips.
What were the number of passengers getting on and off planes at Carlsbad airport before NM Airlines showed up here. Lets look at say 1992-1998 and what are they now? Lets say the last four years...
Was Mesa/Air midwest's worst year here compared to your best year in Carlsbad better or worse with respect to the figures above? Hmmmm.

Are you gonna give Carlsbad the same pronouncement you gave those communities in Georgia? We were just declining anyway so you had to come in and put us out of our frackin misery? That is what you ultimately mean by "weaning communities" off of EAS isn't it?

Twas the same thing you did to Hawai'i, Tennessee, and Georgia. Your problem is that your reputation as an a hole is only exceeded by your airlines' reputation of killing air service in rural communities across the nation.
Zogbert

Carlsbad, NM

#9 Feb 21, 2013
As some point, can we just all agree that the guy is crazy and move on?
Burning Blade

Carlsbad, NM

#10 Feb 22, 2013
Funny how when people try to clean things up in this town, or bring in new companies, everyone who is affected points an accusatory finger at the CDOD. Maybe if you old hags did business right, and took care of our growing consumer base, then there would be no reason to freak out when you get called on the carpet for sucking. Maybe do things right? It's not hard. Stop being greedy and address the needs of this community. It is not about you.
bdp

Saint Paul, MN

#11 Feb 24, 2013
The author of this letter is probably right as far as the politics in this town. He does raise some valid concerns about the way the CDOD conducts business. The situation with the WIPP bid absolutely made Carlsbad officials look greedy and reflected poorly on the community. The majority of this letter does make him look like a psycho, but it also has some truth to it. I did try researching the new airline that Carlsbad officials want so badly, and cannot find any public info. I'm sure this new company somehow has ties to the CDOD. The politicians in Carlsbad are getting more and more cocky, and clearly feel like they can do whatever they want and get away with it. Regardless of this letter something about this smells of pay to play.
Carlsbad Resident

Hobbs, NM

#12 Feb 24, 2013
One Department of Energy official described it as something like "watching two rabid dogs fight over a scrap of meat." So DOE simply took the scrap of meat away, leaving CDOD with nothing to fight over.

Why would you place the same organization, and the same cast of characters, in a position of responsibility for a decision involving the city's air service?

Why would an organization that made Carlsbad appears so corrupt as to be completely shut out of a decision involving its own future be expected to behave any more responsibly in his matter? Is history repeating itself?

Mayor Janway, by and through this email, I am directing New Mexico Airlines' Attorney, Wayne Bingham, to refer this matter to the New Mexico Attorney General's Office, in order to get a better sense of whether the CDOD and the city are in compliance with the New Mexico Procurement Code and other statues related to troubling relationships between government officials, nonprofits, lobbyists and federal contractors in Carlsbad.

Best regards,

Greg Kahlstorf

Chief Executive Officer

Pacific Air Holdings

(New Mexico Air)

I know exactly what you are saying
Carlsbad Resident

Hobbs, NM

#13 Feb 24, 2013
Burning Blade wrote:
Funny how when people try to clean things up in this town, or bring in new companies, everyone who is affected points an accusatory finger at the CDOD. Maybe if you old hags did business right, and took care of our growing consumer base, then there would be no reason to freak out when you get called on the carpet for sucking. Maybe do things right? It's not hard. Stop being greedy and address the needs of this community. It is not about you.
That is what is wrong with Carlsbad, corrupt and greedy good old boy and girl insiders my way or the highway attitude, as long as they are making their money they are happy, the non-corrupt City Officials do not have the guts to stand up.
Zogbert

Carlsbad, NM

#14 Feb 24, 2013
hate to interrupt the usual topix diatribes on corrupt good old boys, but I'm really having trouble seeing what the scandal is here.

1. I agree with Kahlstorf that the CDOD/RFP thing from a few years ago was totally stupid, but I have a really hard time calling it a scandal. It was A. 100 percent out in the open and B. didn't work. It seems like a good scandal should be some combination of secretive or effective. Oh, and while the DOE did release a statement to the effect of saying the CDOD (which the city, chamber and county also endorsed, if memory serves) needed to back off, the end result was the same minimal level of participation in the process that there was prior to the entire thing.

It was basically a failed attempt to get higher community involvement back in the table in a post Pete Domenici/Ines Triay era. Stupid? Perhaps. Scandal? Not seeing it.

2. I fail to see how that issue has anything to do with his present accusation, which is effectively to claim a new conspiracy is in effect because...are you ready for this...a couple of the more outspoken members of the selection committee are members of the CDOD.

That's it. That's Mr. Kahlstorf's current conspiracy. Don George and John Waters are members of the CDOD- and they supported selection of the other airline- and isn't it therefore obvious that this is a vast good old boy conspiracy?

I'm sorry, but it all just seems like an extremely obvious deflection. I know it is fun to latch on to the latest claim of a good old boy network, but I'm utterly failing to see any example of "good old boyism" (whatever that may be) in this instance.

All ask again- deflections aside- what exactly about THIS SPECIFIC situation am I supposed to be upset about?

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