Naval Aviation Museum probe

Air Classics, Apr 2000

As reported in the January issue of Air Classics, the Justice Department is delving more deeply into transaction undertaken by the National Museum of Naval Aviation. The following article by Larry Wheeler appeared in the Pensacola NewsJournal:.

The Justice Department is again investigating Pensacola's National Museum of Naval Aviation and its tax-exempt fund-raising foundation.

The focus of the investigation involves possible criminal wrongdoing stemming from the sale of surplus military aircraft and parts in the 1990s.

At least two aviation companies one in Florida and another in Georgia recently received grand jury subpoenas seeking records of transactions with the museum and the private Naval Aviation Museum Foundation that occurred between 1991 and 1996.

Foundation officials also received a subpoena demanding the organization's financial records for the six-year period, according to a written statement from the foundation, which leases office space in the museum building at Pensacola Naval Air Station

FBI special agents in Tallahassee, Georgia, Washington, D.C., and elsewhere are assisting in the investigation that it is being coordinated by the Justice Department's criminal fraud division, according to federal documents.

Justice Department officials would not comment.

Foundation president Jack Fetterman, a retired vice admiral and former chief of Naval Education and Training, said the subpoena took him by surprise, and he has no inkling of any wrongdoing.

The real question is: Are we the subject of the investigation? Or are we just one of those who were subpoenaed" he said.

Fetterman noted that a twoyear Naval Criminal Investigative Service probe into the sale of aircraft to a California businessman concluded in 1997 with no findings of wrongdoing.

"Why are we starting all over again after a two-year investigation?" he said. "We got it all put to bed when the NCIS reported out absolutely no fraud or wrongdoing. But here we go again right out of the blue. We asked why, and they don't have to tell you, and they won't."

Museum director Robert Rasmussen, a retired Navy captain, referred a request for an interview to the Chief of Naval Air Training public affairs office in Corpus Christi, Texas.

"We haven't received a subpoena," said Lt. j.g. Barbara Kelly, a spokeswoman for the command that has direct oversight of the museum. "If the Department of Justice asks for any kind of cooperation we will fully cooperate."

The Navy has been through a series of investigations and audits into how the museum and foundation work together to trade and sell surplus military hardware, including helicopters and airplanes.

Concern over the legality of these transactions generated so much criticism that last year the Navy issued a new policy on future museum aircraft exchanges. The Navy added steps to ensure that surplus government equipment was properly valued and bids were solicited openly and fairly before being sold to private buyers.

The new Navy policy emerged following an investigation by the NCIS into the 1995 sale of eleven Lockheed EC-1306 and TC-130Q Hercules to Maurice Skinazi, president of Airplane Sales International, a small California business that specializes in buying and selling used airplanes.

Navy agents concluded there was no evidence to support allegations that the sale was illegal, and a federal prosecutor in Arizona who had been pursuing the case was forced to drop it.

However, assistant U.S. Attorney Claire Leftkowiiz wrote a sharply worded letter faulting Navy officials for reversing themselves in the middle of the investigation and challenged the credibility of the probe.

The quality of the NCIS investigation was further called into question when it was revealed that Navy agents based part of their conclusions on opinions expressed by a Miami businessman with limited experience in surplus military aircraft and a vested interest in the outcome of the case.

Dan Wirth, president of Interworld Maritime Corp., told Navy investigators he thought the 5200,000 price paid for the eleven airplanes was reasonable.

A central focus of the investigation was whether museum director Rasmussen erred when he valued the airplanes based only on their worth if cut up for scrap metal,

The craft could not be flown, Some were missing wings, nose sections, landing gear, or engines.

Wirth later acknowledged he was working privately with museum deputy director Robert Macon to undercut a competitor and win a contract to salvage a rare World War Two torpedo plane sitting on the bottom of the Atlantic Ocean off the south Florida coast. firth was to be paid by the Naval Aviation Museum Foundation with proceeds from the $200,000 sale of the eleven C-130 aircraft.

Fetterman noted that Wirth was only one of several people to value the airplanes.

"The NCIS investigation went into a long litany - pages and pages as the value of these hulks," he said.

Roy Stafford, owner of Black Shadow Aviation Inc., in Fernandia Beach, acknowledged that he received a subpoena but had no further information.