Decisions for Tennessee Valley Authority (TVA) management to recently spend $17.7 million on two airplanes were not justified, according to a recent report by TVA's Office of Inspector General (OIG).
In May 2015, TVA management bought two aircraft — an $11.2 million Citation jet and a $6.5 million King Air turboprop — citing safety concerns for flight crew and TVA staffers.
Internal investigators found that management failed to perform cost comparisons, provide adequate business justifications, or get proper authorizations for the purchases. The purchases may also have broken federal law, the report said. Investigators said the moves prevented the agency from accurately proving the need for the planes.
Also, personal use of the planes by TVA CEO Bill Johnson "may cause reputational risks for TVA with regard to misuse (or perceived misuse) of the aircraft," according to the OIG's report.
TVA management disagreed with several of the findings in the report. It focused largely on cost effectiveness, not safety, they said.
- TVA’s Bill Johnson and one of its new jets.
"TVA was aware of additional costs associated with a jet at the time of purchase and these costs were deemed acceptable to improve the margin of safety for our pilots and passengers," reads a letter to the OIG's office from Jacinda Woodward, TVA senior vice president of resources and river management, and William Cronin, director of safety and aviation services.
Using the jet adds 7 percent to the cost of TVA flights, the two said in the letter. OIG investigators found it cost $4,542 per flight hour to operate the jet and $2,249 per flight hour to operate the turboprop.
Time savings for using the jet were "negligible," the report said. For a 700-mile trip to West Palm Beach, Florida (the longest recent flight by TVA officials), using the jet saved TVA less than 30 minutes when compared to the turboprop.
TVA flights are typically less than 300 miles, according to the report. On those flights, using the more-expensive jet usually saved about 10 minutes. For 129 flights between Chattanooga and Knoxville, using the jet versus driving saved 26 minutes.
Investigators said they found 13 days in which the agency's aircraft were used by Johnson for personal reasons. OIG found flights to and from Raleigh, North Carolina, where Johnson has a second home, other flights stopped in Raleigh to either pick Johnson up or drop him off to and from other locations, and more. Johnson's wife accompanied him on three of these dates, the report said.
"None of the other reasons given for diverting the aircraft from the most direct route to the final destination to pick up or drop off the CEO were for official government reasons," the report says.
TVA management told investigators that all but one of those flights had a business purpose. The other, "personal" flight occurred when the CEO's spouse had a medical issue at their second, personal residence in Raleigh, North Carolina, and the CEO was in Memphis, Tennessee on TVA business.
The investigator's report focused on a window of time from July 2015 to February 2017. Since then, TVA bought another jet at around $10 million and a luxury helicopter (once owned by Dallas Cowboys owner Jerry Jones) for about about $7 million.