Drawing by Ismael Roldan, Wall Street Journal
What Investors Should Know Prior to Investing in FedEx:
Passage of the Sarbanes-Oxley Act of 2002 was meant to hold Corporate CEO’s (Chief Executive Officers) of publicly traded corporations ultimately responsible for the accuracy of their corporation’s financial, managerial and operational records. These records are submitted to the United States Securities and Exchange Commission and are required by law to be made available to the public and potential investors.
The following is a story in the Memphis’ Commercial Appeal specific to FedEx Founder and CEO, Fred Smith, which provides details concerning his federal indictment on forgery charges, the warrant issued for his arrest and his unrelated arrest later that same evening for leaving the scene of an accident after he struck and killed George C. Strughill, a 54 year old black handyman, while driving through Orange Mound.
The Commercial Appeal February 4, 1975
From The Commercial Appeal Little Rock Bureau
Jury Indicts Freight Flyer In Bank Loan
LITTLE ROCK, Feb 3  Fred W. Smith, 30, president and chief operating officer of Federal Express Corp. of Memphis, has been indicted by a federal grand jury in Little Rock on charges of submitting forged documents in support of a $2 million bank loan he secured on Feb. 5, 1973.
The grand jury for the Easter District of Arkansas indicted Smith Friday, but did not make it known publicly until Monday when a warrant for Smith’s arrest was issued and he posted bond before federal authorities in Memphis.
The one-count indictment charges Smith submitted forged documents in support of the $2 million loan made in 1973 by Union National Bank of Little Rock.
Federal statutes provide that Smith, if convicted could be fined $5000 or sentenced up to two years in prison or both.
Federal Express is a private air express company started by Smith in 1973. Smith the son of the late Frederick Smith, president of Dixie Greyhound Lines, has been charged in a court suit by his two sisters, of mismanaging the fortune left by their father.
The suit, filed last November by the sisters, Fredette Smith Eagle and Mrs. Laura Ann Patterson, charges Smith, the National Bank of Commerce and three trust executives of mismanaging the assets of a holding company, Frederick Smith Enterprise Company, Inc., to a loss of more than $14 million.
The suit specifically charged that the defendants had sold profitable stock to finance Federal Express, which the suit said is on the verge of bankruptcy.
It also referred to the $2-million loan, saying Smith used forged documents to pledge Enterprise’s credit for the loan.
Smith, reached in Memphis in connection with the Arkansas indictment, said, ‘The original money to fund Federal Express came from myself and my family’s holding company. To do this, I scraped up and borrowed every nickel I could. In February, 1973, while we were attempting to raise the money from our current institutional investors and our banks, Federal Express needed additional money if it were to survive.
“Accordingly, I borrowed a large sum of money from a Little Rock bank using a buy-back agreement of my stock in the family company.
“Since making Federal Express into a large and profitable company was initially hindered by high interest rates, the oil crisis and the country’s worst financial downturn in decades, my two half-sisters, who strongly supported Federal Express in the beginning, instigated a very complicated lawsuit.
“Largely as a result of this suit, and the efforts of my sisters and their eastern attorneys to influence this pending civil litigation involving the family holding company, the U.S. Grand Jury in Little Rock today returned an indictment alleging that I had improperly prepared the documents involving the family company to secure the loan from the Little Rock bank.
“It is my opinion that the actions of my sisters were designed to discredit both myself and Federal Express in hopes of influencing the civil action.”
“Although it would be improper for me to comment further on the merits of this case while it is before the court, I know my intentions were absolutely correct and am confident that this complicated matter will be decided favorably.”
Smith was involved late Friday night in a hit-and-run accident at Airways near Park in which George C. Strughill, 54, of Memphis was killed.
Smith was charged with leaving the scene of an accident and driving with an expired license. He is free on $250 bond and the case has been continued.
[Original Commercial Appeal story below]
Tue Nov 9, 2010 3:09 AM EST
In this photo released by Interpol Saturday Nov. 6 2010 shows the FEDEX Express package seized at Fedex Cargo Handling Centre, Dubai Airport , which was shipped via commercial cargo aircraft from Yemen with final destination the USA. On Oct. 29 2010 two freight packages were seized in separate incidents in the United Arab Emirates and the United Kingdom containing IEDs secreted inside computer printers. In both incidents, the printers had been packed inside freight boxes which also contained personal goods such as clothing, ornaments and compact discs. (AP Photo / HO).
WASHINGTON — Despite knowing for decades that terrorists could sneak bombs onto planes, the U.S. government failed to close obvious security gaps amid pressure from shipping companies fearful tighter controls would cost too much and delay deliveries.
Intelligence officials around the world narrowly thwarted an al-Qaida mail bomb plot last month, intercepting two explosive packages shipped from Yemen with UPS and FedEx.
But it was a tip from Saudi intelligence, not cargo screening, that turned up the bombs before they could take down airplanes. Company employees in Yemen were not required to X-ray the printer cartridges the explosives were hidden inside. Instead, they looked at the printers and sent them off, U.S. officials said.
The scare is prompting officials in Washington and around the world to rethink air cargo security. On Monday the Obama administration announced new cargo rules banning freight out of Yemen and Somalia. It also restricted the shipment of printer and toner cartridges weighing more than a pound on all passenger flights and some cargo flights. Overall cargo security rules were unchanged.
In Congress, the Senate Homeland Security and Governmental Affairs Committee plans a hearing Nov. 16 to look at whether changes are needed to improve air cargo security. Transportation Security Administration Administrator John Pistole has been asked to testify.
Lobbying by the multibillion-dollar freight industry has helped kill past efforts to impose tough rules.
In 2004, when the Transportation Security Administration considered requiring screening for all packages on all flights, the Cargo Airline Association downplayed a terrorist threat. It argued slowing down shipping for inspections would jeopardize the shipping industry and the world's economy.
"As a practical matter, all-cargo aircraft operators today are permitted to accept freight from all persons and entities all over the world, including unknown shippers, precisely because of the lack of any credible threat to all-cargo aircraft," the association, whose members included FedEx, UPS and other shippers, told the agency.
The government agreed.
"TSA believes that a requirement to inspect every piece of cargo could result in an unworkable cost of more than $650 million" in the first year, the agency wrote in 2004. The government wanted security, TSA said, "without undue hardship on the affected stakeholders."
The U.S. requires all packages be screened before being loaded onto passenger flights originating in the U.S. But there's no such requirement enforced for all cargo loaded onto U.S.-bound international passenger flights or on cargo-only flights, such as UPS and FedEx planes.
Jetliner bombings in the 1970s and the explosion of Pan Am Flight 103 over Lockerbie, Scotland, in 1988 led the U.S. to examine cargo security long before the Sept. 11, 2001, attacks on New York and Washington made counterterrorism measures a top priority.
Those efforts came in fits and starts. For example, the Federal Aviation Administration and U.S. Postal Service once had such a poor relationship that neither agency carried out their part of a mail security agreement they reached in 1979 after a mail bomb blew up on an American Airlines flight, congressional investigators reported in 1994.
In 2007, a coalition of more than a dozen business groups lobbied against requiring close inspections of packages, arguing in a letter to then-Senate Commerce Committee Chairman Daniel Inouye, D-Hawaii, that applying the same rules to passenger baggage and air cargo would set "an unachievable standard."
Only in August, nine years after 9/11, did the U.S. require that all cargo be screened on U.S. passenger flights. That rule drew heavy lobbying from airlines, air cargo carriers and trade groups. They devoted at least $32 million last year and $28 million so far this year to lobbying in Washington on that and other matters.
The air transportation industry, meanwhile, donated at least $8.3 million to congressional candidates in the 2009-10 election cycle, split almost evenly between Democrats and Republicans, an analysis by the nonpartisan Center for Responsive Politics found.
The TSA, carrying out a 2007 law requiring the screening of all cargo on passenger planes within three years, decided that starting last August it would mandate the screening of cargo on passenger planes loaded in the United States. It said its rule wouldn't apply to cargo placed on U.S.-bound passenger flights overseas, or to cargo-only flights.
In leaving cargo loaded onto passenger flights outside the U.S. from the August requirement, the agency said it would work with other countries to try to standardize screening requirements and apply "risk assessment" to cargo headed for the U.S.
That decision drew praise from the International Air Cargo Association, whose members include FedEx, UPS and other major shippers.
The industry has long contended that requiring the careful inspection of every package would cost too much and take too long. Its companies want to be able to screen items quickly and they want the government to bear as much of the cost as possible.
A wide range of businesses and organizations have a stake in cargo screening rules. Among those lobbying, the National Funeral Directors Association wants to make sure the requirements do not delay the shipping of human remains and that remains are treated with dignity. The Association of Zoos & Aquariums doesn't want screening to harm animals as they are transported to zoos and other wildlife institutions, or endanger the people inspecting them.
Monday's announcement of new cargo rules came after Homeland Security Secretary Janet Napolitano held a conference call last Wednesday with cargo industry giants FedEx, UPS, German-based shipper Deutsche Post DHL AG and Netherlands-based TNT. On the call, Napolitano "underscored her commitment to partnering with the shipping industry to strengthen cargo security," her agency said.
The air cargo industry isn't short of political connections. FedEx spent $19 million lobbying from January through September alone; its chief executive, Frederick W. Smith, raised campaign money for Republican President George W. Bush and President Barack Obama's 2008 GOP rival, Sen. John McCain, and has made the White House guest lists of at least three presidents: Obama, Bush and Bill Clinton.
FedEx and UPS have served on various federal agency advisory panels over the years, and the head of the Cargo Airline Association has been part of an aviation security advisory committee. Association lobbyist Gina Ronzello used to work for the U.S. Transportation Department's inspector general, with a focus on aviation issues, and was a congressional aide. A Bush administration Customs and Border Protection official, Michael Mullen, lobbied last year for the Express Association of America, whose members included FedEx, UPS, DHL and TNT.
End of Story
Since December of 2009 not as single journalist has been allowed access by the Memphis - Shelby County Airport Authority to verify the damage to the five walls directly beneath Runway 27 at Memphis International Airport. The following are images taken of the damaged walls in April of 2010. You can clearly see how the walls are being crushed by the weight of the new runway that passes over the top of the tunnel. Click the photos to see videos of the damage. – Guy Cobb
On March 24, 2010 two lanes of Interstate 240 collapsed in Memphis. A collapse of Runway 27 at Memphis International Airport will be 180 feet long and 150 feet wide. (Commercial Appeal)
Tennessee is Faulted in Collapse of Bridge (New York Times 1990)
7 Bodies Recovered in Tennessee Bridge Collapse (LA Times 1989)
In 1980 a large section of the Perkins Road Bridge collapsed in Memphis killing one person. The location of the Perkins Road Bridge Collapse is only three miles from the Hurricane Creek Tunnel / Runway 27 intersection.
The following presents examples of questionable conduct by government agencies and other entities specific to the Memphis International Airport Cover-Up. All documentation and additional details can be found here -> Tracking.
1. Federal Express Corporation (FedEx)
2. United States Senator Lamar Alexander (US Senate)
3. Federal Bureau of Investigation (FBI)
4. United States District Attorney, Ed Stanton III (DOJ)
5. Federal Aviation Administration (FAA)
6. Memphis Shelby County Airport Authority (MSCAA)
7. Transportation Security Administration (TSA)
8. National Transportation Safety Board (NTSB)
“Companies are capable of improving workplace safety without constant OSHA intervention and oversight. My company, FedEx Express, is an example of how a company can continually improve worker safety.”
- Scott Mugno, Director FedEx Corporate Safety
Safety and Health Magazine (February 2002)
FAA proposes FedEx fine for hazardous shipping (FAA Press Release July 14, 2011)
The FedEx Spy Network (Wall Street Journal)
FedEx Safety Director’s Letter Against Package Screening (Nov. 25, 2008)
FedEx Safety Director’s Radiation Leak Letter (Dec 18, 2008)
The FedEx Trent Lott Washington Lobby (Commercial Appeal)
Shippers Fought Full Screening of Cargo (Washington Times)
As far back as 2005 I was warning FedEx Express and FedEx Safety about the dangers of IED’s entering FedEx’s global package flow. I submitted the following recommendations as a part of my FedEx 2020 document which was consistently ignored.
Diagram of the United States’ allocated radio spectrum. This includes cell phone frequencies which are the primary mechanism used for remotely detonating IED’s
Currently there is no manual or systematic process in place for detecting Improvised Explosive Devices (IED’s) passing through primary FedEx sort facilities including the Memphis SuperHub. Our BCDR area has been actively working with the U.S. Military’s Joint IED Defeat Organization (JIEDDO) by submitting potential solutions for defeating IED’s in Iraq (IED’s are the leading cause of death or injury in Iraq today).
The preferred method for remote detonation of IED’s by terrorists in Iraq today is by cell phone. The cell phone hidden in a package acts as a triggering device when called. To countermeasure the calls, the military is jamming specific frequency/radio waves as they move through hostile areas.
Within the SuperHub environment there is so much wireless radio traffic, including cell phones that a jamming solution would not be recommended. A more active/passive solution would be to incorporate a spectrum analyzer tool along the conveyor beltways to detect any packages entering the sort that have a live cell phone inside. These packages could be automatically flagged or pushed out and handled appropriately.
June 8, 2010: Lauren Caldwell with U.S. Senator Lamar Alexander’s office contacts the Memphis Airport Authority to ask what is being done to address the damage to the Hurricane Creek tunnel walls. The Memphis Airport Authority tells her that the funding to correct the problem was already included in their April 2010 funding request for earthquake proofing a taxiway at Memphis International.
US Post Office certified mail receipts are used to show proof that the addressed recipient did in fact receive the letter or package sent. The certified mail receipt shown above contains an illegible signature and the “Received By” section has been left blank.
February 22, 2010 I mailed my documentation and cover letter to Special Agent My Harrison, Bureau Chief for the Memphis FBI Office. My cover letter stated that I had been asked to suppress and destroy information specific to the Runway 9/27 and Hurricane Creek Tunnel defect which, based upon the following, is a criminal activity.
"Whoever knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both.”
My cover letter also specifically asked Ms. Harrison to contact me upon receipt of this information so that I could go through the details with one of her agents. Instead no one contacted me for a month so on March 21st, 2010 I posted the certified mail receipt you see above on this documentation page.
24 hours after posting the receipt I received a call from Agent Mike Saltsman with the Memphis Bureau. When I spoke to Agent Saltsman it was clear that he had been given this task of contacting me so quickly that he had not even had an opportunity to read my documentation. He stated that Ms. Harrison had given my “package” (my documentation apparently still in the envelope) to his Supervisor and his Supervisor had passed it on to him to make the call. He stated that when he spoke to his Supervisor that “we could not see any criminal activity” and that someone like the FAA should probably be the ones to investigate. I explained that I would normally agree but that the FAA was working with the Airport Authority and FedEx Express to cover up the defect and that the FAA had never contacted me after having received my documentation from Mike Moon with Federal OSHA.
I told him that Brian Kuhn, the Shelby County Attorney had written me an email explaining that the Airport Authority was working with multiple agencies to take steps to resolve the issue but he would not say who the agencies were. Agent Saltsman said that it sounded like those agencies were the ones who I should work with. I told him that I would agree but the problem again is that the Airport Authority won’t identify who they are. As I explained my documentation to him he became more interested primarily because this was the first time for him to be able to read it and discuss it with me in detail; something I had tried to get the agency to do for a month. I could tell every time his Agent’s instinct kicked in he started to think about what I was saying but then would fall back to “my Supervisor and I could not see any criminal activity”.
I told him that a few days earlier I had seen on the national news where an airport in the US had had all of its terminals closed for 30 minutes after someone found a prescription bottle in an empty wheelchair at the airport. It turned out that the person had simply left it in the chair by accident but that it had caused a major disruption. In comparison I told him that here I am sending every government agency, politician and media source over 100 pages of credible evidence of a problem with our runway and I can’t even get any proof of any kind of inspection having taken place going on four months. He said he could understand my frustration.
For the record I believe Agent Saltsman realized during our conversation that he had been set up with this task after someone called Ms. Harrison and requested she respond. This type of behavior within the Bureau was described by FBI Whistleblower Coleen Rowley in her now infamous 13 page memo following September 11th. Read it here:
For his part, Agent Saltsman immediately connected to my cover-up webpage multiple times after our conversation and began studying my documentation. Here is the activity report below:
Just two weeks after receiving FBI Agent Saltsman’s phone call and posting the above information here on my website, this headline appeared in the Memphis Commercial Appeal:
Read the FBI’s response to my request to investigate Ms. Harrison’s actions in Memphis just before her sudden transfer to Washington, D.C. Click Here.
Memphis Bureau Chief My Harrison Transferred to Washington, D.C. Commercial Appeal link:
I mailed a certified letter to FBI Director Mueller on April 14, 2010: Read Letter I received this receipt back on May 4, 2010. No response as of today’s date.
On March 03, 2011 I mailed this letter (click to read) to the new US District Attorney for the Western District of Tennessee, Edward Stanton III, asking for help. I was both hopeful and skeptical as to whether or not I would receive any response because I knew that Mr. Stanton was a FedEx Attorney prior to his new appointment by President Obama.
On March 07, 2011 I received a call from Lori Frederick with Ed Stanton’s office at 11:23am. She said that Mr. Stanton’s office does not investigate corruption cases, they only prosecute them. She said she would “refer” my letter and documentation about the Memphis Shelby County Airport Authority to the FBI which we agreed she should do.
On March 31, 2011, not having received any communication from the FBI, I sent a certified letter to Lori Frederick with US Attorney Ed Stanton’s office asking her to send me a letter in writing confirming she sent my corruption letter and information I had sent to Ed Stanton to the FBI like she said she would. Read Letter. Below is my certified mail receipt.
On July 13, 2011, I sent this certified letter to Ed Stanton asking that he respond. Read Letter.
I have not received a response as of today’s date.
The following is a list of campaign contributions by FedEx employees to Edward Stanton III for Congress in 2005 and 2006.
Frederick W Smith (FedEx Corp/President & CEO)
Alan Jr Graf (FedEx/Executive VP - CFO)
Barak Babcock (FedEx/Attorney)
Ann Dickey (FedEx/Staff Vice President)
Pamela Pitts (FedEx/Vice President)
Clint Saxton (FedEx/Managing Director)
Ann Dickey (FedEx/Staff Vice President)
Justin Ross (FedEx/Attorney)
Kathleen Chambers (FedEx/Staff Director)
Ernest Cherry (FedEx/Attorney)
Virginia Connors (FedEx/Attorney)
Daniel D'all (FedEx/Managing Director)
Alan Dabdoub (FedEx/Attorney)
James Ferguson (FedEx/Staff VP)
Thomas Grow (FedEx/Attorney)
Gregg Gumbert (FedEx/Attorney)
Michael Hagan (FedEx/Managing Director)
Michael Higginbotham (FedEx/Attorney)
Connie Lensing (FedEx/Vice President)
Cynthia Matthews (FedEx/Engineer)
Richard McConnell (FedEx/Attorney)
Michelle Miller (FedEx Trade Networks/CFO)
Rush O'Keefe (FedEx/Sr. Vice President)
Robbin Page (FedEx/Attorney)
Francis Paulson (FedEx/Attorney)
Penelope Register (FedEx Trade Networks/VP & Gen. Coun)
Richard Roberts (FedEx/Managing Director)
Robert Ross (FedEx/Attorney)
Steven Taylor (FedEx/Vice President)
Paige Williams (FedEx/Attorney)
Scott Young (FedEx/Staff Director - Legal)
Derrick Morris (Memphis City Schools/Accountant)
Justin Ross (FedEx/Attorney)
Ernest Cherry (FedEx/Attorney)
Michael Gabel (FedEx/Attorney)
Connie Lensing (FedEx/Vice President)
Richard Roberts (FedEx/Attorney)
Justin Ross (FedEx/Attorney)
G.C. Washington (FedEx/Attorney)
Edward Stanton III and Kenneth Star campaign contributions to Harold Ford Jr.’s US Senate campaign in 2006. Link to Federal Election Commission page -> Click here.
March 2, 2011 Kenneth Starr conviction.
The FAA’s Whistleblower Protection Program was sent my documentation by Federal OSHA investigator Mike Moon on 12.15.2009. Ron Rifenberg, Manager of the FAA’s Whistleblower Protection Program left me a voicemail on 05.06.2010 explaining that they did receive my information related to a “potential runway collapse” but it was “lacking some detail” so it was never assigned to an investigator. Click to hear Mr. Rifenberg’s voicemail (.wav file).
When I wrote to my Federal OSHA Investigator Michael Moon about this, this was his response:
A copy of the original complaint is the only document OSHA sends to the FAA regarding AIR-21 complaints we receive. I forwarded a copy of your November 30, 2009 email complaint (sent at 2:27 p.m.) to the FAA on December 15, 2009.”
I attempted to contact Mr. Rifenberg four more times but he would not return any of my calls and sent me a letter on May 11, 2010 stating the following:
“After reviewing your complaint, it appears it does not contain any safety specific allegations that are necessary to initiate an investigation.”
Manager, FAA Whistleblower Protection Program
By May 18th, 2010 (one week later) Mr. Rifenberg had suddenly reversed his May 10th decision and sent me this updated response:
“Your complaint has been forwarded to the FAA’s Office of Airports for investigation of any safety issues mentioned in your complaint with instructions to report back to this office with the preliminary results of their investigations within 45 days.”
Manager, Whistleblower Protection Program
Watch Congress grill FAA Director who believes the rights of FAA employees are more important than those of the flying public. Scary.
April 15, 2010: A FedEx Pilot on the Airline Pilots Central website confirms that FedEx Express and the Memphis Airport Authority Engineers conducted their own runway inspections [without any FAA oversight]. Only the FAA can certify or “conclude” that a runway is safe. Here is his post:
“The FedEX and MIAC engineering departments have all reviewed Mr. Cobb's reports and have concluded that there is no threat to RWY 09/27 operations nor is there a threat to commercial or private aircraft.”
May 19, 2010: The Memphis Airport Authority pays $70,000 to their existing contractor, Kimley-Horn, to produce a study of the Hurricane Creek tunnel. The report states that there is a misaligned wall in the tunnel caused by a misaligned form when the wall was constructed. The study does not report that all five walls are misaligned in the same place and that location is directly beneath Runway 9/27.
June 29 2010: After reporting the damaged walls to the FAA’s Whistleblower Protection Program and the FAA’s Hotline, we now know that the FAA chose not to inspect the runway or the tunnel for damage. The FAA, to avoid any liability and negligence, deferred to the Kimley-Horn report.
This New York Times story provides some insight into why the FAA would have allowed Memphis International’s Runway 9/27 to pass inspection for more than a decade in the condition you will see in photographs below: FAA Inspectors Say FAA Ignored Violations.
Look safe to you? Google Earth satellite image of Runway 9/27 at Memphis International taken on February 28, 2004. Red arrows clearly show location of large fractures directly above the Hurricane Creek tunnel. The Memphis Shelby County Airport Authority identified these fractures as “open cuts” from 1985 (made nineteen years earlier).
Same 2004 image reversed to a negative to show runway fractures more clearly.
Below is the FAA’s June 2004 Runway Safety Inspection & Airport Certification for Memphis International Airport. Despite the serious fractures clearly shown in the 2004 Google Earth images above, no “Cracks” or “Surface Variations” were reported. A check in the first column represents “Satisfactory”. See full 2004 inspection report below.
Page 2 of FAA Inspection Report
This is a Microsoft Bing image of the old asphalt runway in 3D. This section of the runway is directly above the tunnel. The elevation readings from left to right in this location are 264’,263’,262’,261’,262’,261’. This section of the runway is where the lowest part of the “profile deficiency” was located described by Ajax Pavement in Wayne Risher’s Commercial Appeal story:
“The contractor, Ajax Paving Industries, and subcontractors also corrected a "profile deficiency," a dip of as much as three feet in a 1,500-foot-long section at the eastern end of the runway.”
Based on this structural diagram below of the new runway at this same location, the “profile deficiency” was not three feet, it was actually more than seven feet. The top surface of the new runway is now at 268’ where it was previously at 261’.
“Dear Mr. Cobb:
I am writing in response to your December 30, 2009, letter regarding the National Transportation Safety Board’s (NTSB) investigation of the September 19, 2004, accident in Memphis, Tennessee, involving a FedEx MD-11 that struck the runway with its tail during a go-around maneuver.
In your letter, you expressed concern about the condition of runway 9/27 at the Memphis International Airport and the effects of a tunnel that runs beneath the runway. A review of the NTSB’s investigation revealed that the accident airplane had already experienced the bounced landing and tailstrike before reaching the areas of concern described in your letter. However, I appreciate you bringing this matter to our attention, and I thank you for your interest in aviation safety.
Thomas E. Haueter
Director, Office of Aviation Safety”
Watch Congressman Oberstar question the NTSB about the deadly bridge collapse and NTSB investigation in Minnesota.
Mr. Haueter’s letter is quick to dismiss the FedEx MD-11 accident in 2004 to a “bounced landing” and makes no attempt to address the condition of the 60 year old runway at the time of the accident nor the fact that the runway was immediately repaved after the accident.
The NTSB states in their report that the accident was pilot error caused by a bounced landing but the reality is that the MD-11 landed 30 feet off-center which would not have been a problem on a modern concrete runway but because the plane landed on a runway Memphis Airport Authority President Larry Cox called “antiquated” the plane’s tires became offset from the runway’s two separate keel beams which are like 8 foot wide concrete paths for the airplane’s rear tires. A landing 30 feet off-center would have placed the MD-11’s rear tires onto the asphalt sections of the runway which, as you can see in the photographs below, was in very poor condition at the time of the accident.
This off-center landing combined with the “antiquated” condition of the runway could have been the reason both pilots reported that the plane landed normally but then suddenly “pitched upward”. The NTSB report states the plane pitched upward about three feet then came back down causing it to bounce. I would think that this set of events would exclude the use of the term “bounced landing”.
In addition, the length of Runway 9/27 is just under 9000 feet. Once a plane lands on the Runway 9 end from the West (Runway 27 is the same runway but on the opposite end for landings from the East) it will have covered a third of the runway, or approximately 3000 feet. The NTSB report states that once the tailstrike took place, the tail was dragged for between 3000 and 4000 feet. This would mean that although Mr. Haueter will not acknowledge the condition of the runway, the evidence shows that the tailstrike would have dragged across the Hurricane Creek tunnel which may have caused additional damage to the tunnel’s structure at the point directly below the runway.
This may be one of the reasons the Memphis Airport Authority has prevented any inspections of the tunnel for damage over the past four months as well as blocking our FedEx BCDR team from viewing the two inner tunnels in 2006.
This is a satellite image of Runway 9/27 taken in February of 2004. The FedEx MD-11 accident took place seven months later on September 19th. The two red lines above represent the outer edges of the 60 foot wide “keel landing zone” which runs down the center of the runway.
Same photograph but red lines represent the path of the FedEx MD-11’s landing which was 30 feet off center. This particular location of Runway 9/27 is directly above the Hurricane Creek tunnel. The MD-11’s tailstrike was stated as having started further to the left and then dragged from 3000 to 4000 feet which would have carried the tail directly across this section.
This is a 2005 satellite photograph of the repaved asphalt runway following the FedEx MD-11 accident in September of 2004. You can see where the asphalt is beginning to have problems in the same location where the 1985 “open cuts” were made to install the Hurricane Creek tunnel.
Here is the link to the NTSB’s narrative for the accident: NTSB number DCA04MA082. Note the discrepancy in the report as to whether the plane landed 20 feet off center or 30 feet off center.
One other note about the MD-11 accident. As much damage as there was to the MD-11’s airframe and the near catastrophe to the heavily populated area surrounding the airport, I have been unable to find any mention at all of the accident in the local press. This is suspect in that either the press buried the story or the FAA, FedEx Express, and the Airport Authority were able to keep the accident quiet.
The Memphis Shelby County Airport Authority has been unable to prove that the $45 million dollar revolving credit line that they applied for and received from Regions Bank was legal under their current charter.
The Memphis Shelby County Airport Authority’s 2009 Comprehensive Annual Financial Report states:
The Authority has the power to issue bonds to accomplish any of the purposes authorized by the Metropolitan Airport Authority Act of Tennessee. All bonds shall be payable solely from the revenues, income and charges of the Authority and such bonds shall not constitute an obligation of the City or County.
Within this same report you will find this statement specific to replacement of Runway 9/27:
The Authority has obtained a $45,000 revolving line of credit with a bank. The purpose for this line of credit is to provide temporary funding for the reconstruction of runway 9/27 and improvements to taxiways alpha and victor. At June 30, 2009, the Authority had not drawn on this line of credit. Future draw downs, if any, will be repaid with Federal grant reimbursements received by the Authority.
I cannot locate any documentation which states that the Airport Authority has the authority to apply or pay for a revolving credit line from a Commercial/Retail bank. The Airport Authority has been unwilling to confirm if the Memphis Shelby County Airport Authority Board of Directors approved this loan prior to the application with Regions Bank.
The follow is the response from Sara Hall, the Airport Authority’s Legal Counsel:
“First, FedEx did not loan MSCAA any money for reconstruction of Runway 9/27 or for any other purpose. MSCAA obtained a 45 million dollar line of credit from Regions Bank as a precautionary measure as we had and have a number of FAA grant eligible projects for which we were and are receiving grants, including Runway 9/27. Because the timing of those grant reimbursements from the Federal government cannot be predicted with certainty, we obtained a line of credit which would be more than sufficient to accommodate the most extreme of delays in grant reimbursement. The obtaining of a line of credit, which we have yet to draw upon, was a prudent financial decision which protected MSCAA from potential delays in federal reimbursement. “
“MSCAA received FAA entitlement grants for the reconstruction of Runway 9/27 and did not receive any federal stimulus funds. MSCAA funds on hand were used to fund Runway 9/27 costs and periodic reimbursement requests were made and funds received from the FAA.” – Sara Hall
Here is the 2009 Financial Report Link:
In addition, the Airport Authority never asked for a second party to check the AFRAM Corporation’s calculations. Instead the same engineer, Benjamin Bovee, submitted an updated version of their report.
‘We have an active contract to evaluate the ability of the airfield and all supporting infrastructure to safely handle the B777. This includes the structural integrity of all drainage structures under the taxiways and runway. In effect we will have a Afram's calculations and recommendations under this contract’ check
– Tom Clarke (former Memphis Airport Authority Chief Planner).
Original structural diagram of the Hurricane Creek tunnel’s interior walls showing the #4 @ 12” rebar locations. The original AFRAM study stated the interior walls would need to have at least #8 @ 6” spacing to support an aircraft of the size and weight of an A-380 Airbus.
On November 28, 2008, just three weeks after I sent my original Enterprise Vulnerability Report to FedEx Express’ Randy DiGirolamo, the following interview with MSCAA CEO Larry Cox suddenly appeared in the Memphis Daily News announcing the complete replacement of the 65 year old Runway 9/27:
Larry Cox, airport authority president and CEO, said the runway is simply too antiquated to serve the needs of a 21st-century airport and needs to be updated.
“The runway was built by the military after World War II, and it just simply is not capable of continuing to handle the amount of traffic that we have, particularly the very heavy, wide-bodied airplanes of FedEx,” he said. “This project is extraordinarily crucial to us to maintain our role as the engine of the local economy and to support the continued growth of FedEx Express.”
The Memphis Airport Authority has been unwilling to provide the name of the insurance carrier for their $540 million dollar policy nor how they arrived at the coverage amount.
They have also been unwilling to provide any contact information at Regions Bank to confirm the specifics of their $45 million dollar line of credit.
Why wouldn’t the TSA’s Security Director at Memphis International respond to my Hurricane Creek Report for 47 days and then suddenly FedEx me a letter to stating the TSA is the wrong department, I need to contact the FAA? For the record, the FAA has already had my report since December 15, 20009 (for almost four months and has never contacted me). The reason Tennessee Homeland Security sent my report to the TSA in Memphis is because the FAA is one of the primary sources of fraud taking place at the airport. Here is Director McCarthy’s letter:
April 7, 2010
RE: Enterprise Vulnerability Study 001, Memphis Runway 9/27 at Hurricane Creek
Dear Mr. Cobb
The Tennessee Department of Homeland Security forwarded a copy of your study [47 days earlier on February 19, 2010] to my office. This was in error as the subject of your study is not within the statutory purview of the Transportation Security Administration (TSA). By law, TSA is responsible for aviation and transportation security. Aviation safety and air carrier operations are properly within the purview of the Federal Aviation Administration.
Please understand that TSA Memphis will take no action on your study. You should not expect any further response from my office.
Kevin G. McCarthy
Transportation Security Administration
Federal Security Director
Memphis International Airport
This is a November 1, 2006 photograph of the Hurricane Creek Tunnel at Memphis International Airport. The three walls at the center of the tunnel are the only supports beneath Runway 9/27 which crosses directly over the tunnel. The tunnel was constructed in 1985 and is maintained by both FedEx and the Memphis-Shelby County Airport Authority.
IF YOU HAVE INFORMATION YOU WOULD LIKE TO SHARE ABOUT HURRICANE CREEK, ANONYMOUSLY OR OTHERWISE, YOU MAY CONTACT ME AT email@example.com
This documentation and the author, Guy Cobb, are protected by the United States Sarbanes-Oxley Act of 2002 Section 806 -- Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud; the False Claims Act; the Wendell H. Ford Aviation Investment and Reform Act For the 21st Century (AIR21) Public Law 106-181, April 5, 2000 49 USC Section 42121 Subchapter III – Whistleblower Protection Program and the American Reinvestment & Recovery Act, Article 4 Section 1553.