A new front in the Whirled's Great Plains spin offensive

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Today's Whirled featured a "Readers' Forum" guest opinion by John Brock. While normal readers' letters are left to languish for three weeks before being published, this item was rushed to the head of the line. Brock defends World Publishing Co.'s investment in Great Plains Airlines as a gift, with no expectation of return.

Brock also raises an issue that, as far as I can remember, hasn't been aired in the pages of the Whirled, although it has been the subject of a lot of buzz around town: Repayment of the loan from Great Plains Airlines to the Bank of Oklahoma, which was guaranteed by the Tulsa Industrial Authority, using city-owned Air Force Plant No. 3 as collateral. Mr. Brock wants the City of Tulsa to repay the loan, evidently out of the general fund.

The city of Tulsa's contribution was the guarantee of a loan by Bank of Oklahoma. It's now time to make good on that guarantee and pay off the loan. The city put up property at the airport as collateral. BOK made that loan based on its concern for our city and its faith in the integrity and honor of the City Council, not because of the collateral.

A minority of the city councilors does not want to honor that commitment. The excuse is that BOK knew or should have known that the commitment of the City Council could not be trusted, and therefore BOK doesn't deserve to be paid.

This is very strange. How does Mr. Brock know all this? It hasn't been the subject of any public Council meeting of which I'm aware. Was it discussed in a Council executive session, and has Mr. Brock been made privy to what should have been a secret discussion? Have there been private meetings between councilors and bank officials to which Mr. Brock has been tipped off?

It's strange, too, that Brock would call on the City to repay the loan right away, when the owners of the airline -- World Publishing Company, Steve Turnbo, Don McCorkell, Margaret Erling Frette, among many others -- have the collective wherewithal to repay $7 million. Why would BOk, ordinarily a good corporate citizen, demand that the city empty more pools, close more rec centers, take more cops off the street, so that it can get it's money back right now, when it could instead go after the deep-pocketed owners of Great Plains Airlines who stood to profit if the airline had been a success?

If all these investments had been intended as a gift, as Brock alleges, why would these people accept equity? Brock says, "World Publishing Co. invested with no real expectation of profit." That would mean that they never expected the airline to succeed in its mission to provide a needed service. If the airline had succeeded in its mission -- provide non-stop air service from Tulsa to the coast so that Tulsa is more attractive to business -- then new businesses needing that direct air service would have sprung up in Tulsa, and those businesses would have required more direct air service, filling the planes and making the airline profitable.

If WPC and all these lobbyists, PR flacks, and other eminentoes believed that such an airline could never make a profit, then why did they work so hard to convince state and city officials that this airline would bootstrap Tulsa's economy and thus was worthy of public subsidy? There was nothing in the plan for ongoing public subsidy of operations cost, was there? Eventually the airline was supposed to be able to make a go of it on its own.

One more question about repayment of the loan: The matter is in bankruptcy court, and I presume BOk is one among many creditors. Why should they get to go to the head of the line for repayment? Just because they have the political clout to bully the City Council into repaying them? Thursday night, the Cockroach Caucus councilors were uniformly saying not to spend money to acquire Great Plains bank records, because we should wait for the Bankruptcy Court to take care of it for us. Why not wait until the Bankruptcy Court says it's BOk's turn to get its money back? Why not see how much the Bankruptcy Court can recover from sales of assets? Were there preferential transfers made prior to Great Plains declaring bankruptcy? If money from preferential transfers is recovered by the Bankruptcy Court, perhaps it can help repay the BOk loan.

In response to a speaker at Thursday night's Council meeting, who claimed that no one made any money off of Great Plains Airlines, Councilor Jack Henderson pointed out that all that money went somewhere.

One more thing that doesn't add up: Why is Brock concerned about "a minority of the city councilors"? If they are only a minority, Brock will get his way and BOk will get their money very soon. What are he and the Whirled worried about?

If you need a reason to care about Great Plains Airlines, and getting to the bottom of where the money went and making the shareholder agreement public, here it is: You are either going to have to pay more in taxes or make do with less service from the City of Tulsa in order to pay back this loan, unless those who stood to profit take their lumps and pay the debts their company incurred, rather than doing the equivalent of walking out on a restaurant check.

Dan Paden has his own excellent take on Brock's op-ed.


Dan Paden said:

Kind words are always very much appreciated, dude.

MD said:

Brock is a simply a tool for others to use. Several years ago he sponsored a full page ad in the paper that cited some "statistics" regarding several candidates in an election. I met with him about the ad and asked him some basic questions about how the data was compiled, and what the statistics meant. He couldn't answer any of my questions. He was simply a mouthpiece.

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This page contains a single entry by Michael Bates published on October 9, 2005 9:32 PM.

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