The Federal Aviation Administration is facing the prospect of two outside reviews and a push from Congress for greater transparency after a report found that decades of lax oversight had left the United States vulnerable to drug dealers and even terrorists who seek to anonymously register planes here.
The Globe Spotlight team’s “Secrets in the sky” investigation revealed that the owners of more than 50,000 planes have used tactics that can help hide their identities in FAA registration papers, making it easier to fly anonymously. Critics warn that the United States is becoming a haven for people who want to hide their ownership of planes, including corrupt politicians and South American drug cartels.
Now, the Government Accountability Office, the investigative arm of Congress, is reviewing how the FAA registers planes that fly under the US flag, and two congressional committees have asked a second agency to investigate. Meanwhile, US Representatives Stephen Lynch of Massachusetts and Peter King and Carolyn Maloney, both of New York, have introduced a bill requiring the FAA to keep on file the true owners of all foreign-owned aircraft.
“There are very serious national security risks posed by the current aircraft registration system, which leaves us vulnerable to smuggling and illicit activity by criminals, and possibly terrorism,” said Lynch, who has long promoted efforts to increase corporate transparency.
FAA officials have said they are developing a plan to increase the vigilance of its Oklahoma City-based Civil Aviation Registry, which certifies and monitors more than 300,000 US-registered planes. They admit that they don’t have the resources to determine whether all the information aircraft owners provide is accurate.
On Friday, the FAA released a statement welcoming the GAO review, which it said should “help to identify ways to further strengthen the integrity of the aircraft registry information.”
But Harry Schaefer, the former director of investigative programs for the US Department of Transportation, said he was unimpressed by the FAA’s avowed commitment to tighter controls. His office has been warning about the FAA’s lack of ownership information, especially about foreign nationals, for more than a decade, he said.
“Basically, it is uncontrolled,” said Schaefer, who retired in 2006. “It’s gotten so far out of hand that they don’t know how to wrap their arms around it.”
For decades, foreign nationals have exploited loopholes in the Civil Aviation Registry to obtain coveted US plane registrations without revealing their identities. Technically, only US citizens can register a plane here, but the FAA allows foreigners to register as long as a US citizen represents them. In practice, that has allowed the names of foreign owners of aircraft to be kept out of registration papers, sometimes making it difficult to find them.
When a US-registered plane piloted by a twice-convicted drug trafficker crashed into a home in Venezuela in 2008, killing several people, law enforcement officials were unable to find the owner. The plane was registered to a Texas-based company, Aircraft Guaranty, which said the real owner was in Miami. But a court official who went to the address found only cobwebs and a package addressed to someone else.
Others who want to hide their ownership of planes set up shell companies in Delaware and other states that allow the owners to conceal their identities. For example, the Venezuelan air force shot down a US-registered plane loaded with cocaine in 2015 off the coast of Aruba. But FAA records showed it was registered to a Delaware shell company managed by an elderly Florida lawyer.
That lawyer, who did not respond to numerous requests for comment, has not been charged in connection with the attempt to transport drugs.
Records obtained by the Globe show that at least a quarter of the 100 aircraft seized by the Drug Enforcement Agency since 2013 were registered using noncitizen trusts, shell corporations, or other tactics that can be used to hide the owners’ names.
FAA critics say that with evasion so easy and with so little official oversight, there may be more dangerous people in control of US-registered planes whose names have not come to light. The 9/11 conspirators considered using private crop-dusting planes to launch terror attacks before deciding to hijack commercial planes.
Convicted 9/11 terrorist Zacarias Moussaoui even tried to buy one in Oklahoma, not far from the Civil Aviation Registry.
In December, Senator John Thune, the South Dakota Republican who chairs the Commerce, Science, and Transportation Committee, called for a review of the registry.
“Recent media reports have raised significant questions about the accuracy and completeness of the FAA’s registry, whether or not the agency has a firm grasp of who actually owns and operates US-registered aircraft, and how the use of trustees and complex financial agreements are affecting the agency’s core responsibilities,” Thune wrote in requesting an investigation by the Department of Transportation’s inspector general.
The House Transportation and Infrastructure Committee made a similar request to the inspector general late last year.
A spokesman for the inspector general declined to say whether the agency will audit the aircraft registry.
Meanwhile, at the request of Lynch and King, the GAO is also looking at weaknesses in the FAA registration system. The request came in July after Lynch learned of the issues from the Spotlight Team, whose report was published in September.
Lynch said the public urgently needs to know whether there are potential terrorists among the thousands of unknown individuals who control US-registered planes. Under the Aircraft Ownership Transparency Act that Lynch filed in 2017 and plans to refile this year, the FAA must require that foreign owners disclose their name, nationality, address, and provide a unique ID, such as a passport, before the agency could issue a certificate of US registration.
Members of a pro-transparency coalition applauded Lynch’s bill, noting that all the secrecy surrounding plane ownership opens the door to criminal activity, including money laundering and human trafficking.
“Narrowly, the FAA not collecting ownership information poses a national security risk, but it goes to the bigger question of not knowing who forms” corporations generally, said Clark Gascoigne, deputy director of the Financial Accountability & Corporate Transparency Coalition.
Currently, trusts representing foreign owners must disclose the clients they represent, but the names are not kept within the aircraft’s public file at the FAA and the agency does not always verify the accuracy of the information.
Schaefer, the former special agent for the Department of Transportation, said the FAA has proven to be quite resistant to reform in the past. He helped prepare a 2007 presentation for the Drug Enforcement Agency that detailed the FAA’s lack of vigilance in oversight of planes, making it easier for US planes to be used for money-laundering and other criminal activity, while also compromising safety standards.
“It’s a systemic problem. They’re just very lackadaisical in their approach to things,” Schaefer said.
The companies that actually set up trusts on behalf of foreigners defend the system, saying they are a valuable tool for businesses led by noncitizens that have their own jets. But they have been relatively quiet about alleged crimes committed by some of their clients.
For example, last July, the DEA seized a plane after agents found 560 pounds of methamphetamine in a storage unit in Santa Rosa, Calif. Australian authorities allege that the substance, commonly known as “ice,” was destined for their country with a street value estimated at $225 million.
FAA records showed the registered owner of the plane was TVPX Aircraft Solutions, acting as the trustee for a foreign owner.
TVPX officials did not respond to several requests for comment.
After a joint investigation by the Australian Federal Police and the DEA, the actual owner of the aircraft, 72-year old Australian Hugh John Gorman, was arrested at Melbourne Airport and charged with conspiracy to import a controlled substance.