US senators seek probe into FAA administrator stock sale after Republic merger

WASHINGTON, D.C.―Three Democratic U.S. senators asked a federal watchdog to investigate if the head of the Federal Aviation Administration violated his ethics agreement by delaying a stock divestiture to boost his payout after his departure as CEO of Republic Airways.

Senators Maria Cantwell, Tammy Duckworth and Ed Markey on Thursday asked if FAA Administrator Bryan Bedford misled Congress in explaining why he had failed to fully divest his significant equity stake in Republic by Oct. 7, the date in his ethics agreement.

The senators argued, “Bedford intentionally held on to his shares until the airline completed a lucrative merger, likely significantly boosting the value of his holdings” and asked the Transportation Department Office of Inspector General to investigate.

Bedford completed his divestiture in February. The FAA said it would respond directly to the senators. At the time of his confirmation, Bedford reported holding stock in Republic worth between $6 million and $30 million. On Nov. 25, Republic completed a merger with Mesa Air Group.

Senators earlier pressed Bedford to give up any gains for not selling the stake before a required divestment date.

The senators said Bedford may have received more than $25 million from the sale. “This is likely materially more than Mr. Bedford would have made had he sold his shares on time, on the private market,” the senators said, adding Bedford has refused to say exactly how much he sold these shares for and if he received any gains from the delay.

In December, Bedford said he continued to recuse himself from issues that could impact the airline’s finances as he worked to sell his holdings.

Bedford told lawmakers earlier he believed he had followed the rules when he sought an extension of the deadline and relied on advice from career ethics officials.

Cantwell earlier released a Dec. 8 letter from the Office of Government Ethics that said Bedford had not complied with his ethics agreement and had sought an amendment to extend the divestiture timeframe. OGE said the request did not meet the standard for granting an amendment.

Reporting by David Shepardson; editing by Chizu Nomiyama and Louise Heavens.