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United Pays $2.25 Million Penalty but No Free Ticket for Smisek in Port Authority Investigation

United Airlines has reached an agreement for Non-Prosecution with the United States Attorney’s Office for the District of New Jersey (the “USAO”) with respect to the investigation of corruption in the deal known as, “The Chairman’s Flight”, which led to the abrupt resignation of the airline’s previous CEO, Jeff Smisek.

USAO agreed that United could pay a penalty in lieu of prosecution of $2.25 million and required that United complies with the full terms of the agreement for two years.

“United accepted responsibility for certain conduct related to the establishment of the flight between Newark and Columbia,” the airline states in its announcement of the Agreement.

United agreed to improve its corporate anti-bribery and anti-corruption program policies and procedures, and to report on its compliance each year.

“As we move forward, continuing to earn and keep the trust of our employees, customers, shareholders, and the communities we serve around the world remains critical to our success,” said Oscar Munoz, President and Chief Executive Officer of United.

No Free Ticket for Former United CEO

The USAO agreement, however, includes the stipulation that United collaborate with the investigation into the conduct of its employees in the matter.

Specifically, the agreement requires:

“United’s extensive, thorough, timely, and voluntary cooperation, including: disclosing the conduct of its employees and agents related to the Newark/Columbia Route, including United’s confirmation that it has disclosed all non-privileged information regarding the conduct of its employees and agents; conducting an internal investigation; making its employees available for interviews; producing documents and other materials; and making multiple presentations to this Office.

The document further states:

“This Agreement also applies only to United and its present or former parents, subsidiaries, and affiliates as of the date of this Agreement, and not to any other entities or to any individuals.”

And stipulates:

“United shall: (a) use its best efforts promptly to secure the attendance and truthful statements or testimony of any officer, executive, director, agent, or employee of United at any meeting or interview or before the grand jury or at any trial, or other court proceeding; and (b) provide this Office, upon request, all non-privileged information, documents, records, or other tangible evidence.”

The full agreement between United and USAO is here.

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