pilotss

Or should I say the lowest standard of the industry.

Air Group is pointing to a company executive for deleting computer data related to a lawsuit filed by Hawaiian Airlines, saying Peter Murnane accidentally erased key files when he was purging pornographic material from his computers.Hawaiian Airlines alleges that Murnane, the Phoenix-based regional airline's chief financial officer, destroyed evidence including Hawaiian's business plan that could show that Mesa Air misused confidential information to launch interisland carrier go! airlines. Mesa put Murnane on administrative leave last week.Hawaiian contends that Mesa Air violated a confidentiality agreement by using proprietary information it gathered as a potential investor during Hawaiian's
"He (Murnane) was cruising on adult Web sites," Blecher said, adding that Murnane was simply trying to delete the porn sites on three computers when the Hawaiian documents were deleted.Hawaiian attorney Sidney Levinson called Mesa's reference to pornography "a transparent effort to distract the court's attention and undermine the credibility of one of Mesa's most senior officers.""You have to wonder why Mesa thinks that smearing their own star witness with allegations of pornography benefits them," Levinson said.Chris Pappaioanou, Mesa's vice president of legal affairs, recalled an incident from 2003 or 2004 in which he came into work on a Saturday and noticed Murnane looking at adult content on a computer."It's a substantial embarrassment to have porn on the computer because of his position in the community and the company," Blecher said.Blecher said he's optimistic about Mesa's chances of prevailing when the actual trial begins."They can't point to anything deleted that doesn't exist," Blecher said. "In our view, they're chasing a ghost."Levinson accused Mesa of being less than truthful, adding, "We're never going to be in a position to get assurance that we've gotten everything we would need."In addition to monetary damages, Hawaiian is seeking an injunction barring go! from selling tickets for one year.Since go! started in June 2006, interisland airfares have dropped by as much as half, increasing the number of interisland passengers and affected the bottom lines of Hawaiian and Aloha airlines. Hawaiian and Aloha lost a combined $82.1 million last year.

Source: http://www.kpho.com/news/14212979/de...s=pho&psp=news

I am guessing this is a cover up for deleted files. Sorry we were deleting porn not the files that would incriminate us.
Fortunately nothing is ever deleted on a hard drive and all the files should be recoverable...even that GOATSE picture.

N2rotation

Monday October 1, 2007 Mesa Air Group was dealt a setback Friday by a US federal judge who ruled that it had misused confidential information obtained from Hawaiian Airlines when it was considering investing in the financially ailing carrier. The pre-trial ruling affirms the basic thrust of Hawaiian's lawsuit against Mesa and pushes the sides to a trial slated to begin in a US Bankruptcy Court in Honolulu tomorrow.
Hawaiian is seeking $173 million in damages and wants the court to ban Mesa subsidiary go! from operating for a full year. Mesa touched off an acrimonious inter-island fare war when it launched go! last year, offering prices far below those of Hawaiian and Aloha Airlines. Hawaiian alleges that Mesa launched go! on the basis of confidential information to which it was privy during Hawaiian's bankruptcy restructuring. Mesa has denied using any information other than that which is publicly available.
But Judge Robert Faris ruled Friday that "Mesa misused confidential information when deciding to enter the Hawaii market. The misuse was a substantial factor in Mesa's decision on entering the Hawaii market." He also stated that Mesa CFO Peter Murnane wrongly destroyed evidence pertinent to the case. Murnane is on administrative leave (ATWOnline, Sept. 28). Faris said he did not believe that anyone at Mesa other than Murnane participated in the destruction of evidence but that Mesa bore responsibility since Murnane is its third-ranking executive.



by Sandra Arnoult






http://atwonline.com/news/other.html...=10%2F1%2F2007

ERJ Driver

Enjoy some light reading...

Here are some facts and figures you should be aware of if you are still 'sitting on the fence' on whether or not Mesa will be in operation in the near future.

• By the end of this November over 250 pilots will have timed out for the year. Just in time for the busy holiday season.
• The company continues to lose on average 25 to 35 pilots a month. Link: http://tinypic.com/view.php?pic=14vtp4i&s=2 (be sure to click on 'Full Size')
• Average IOE time for new pilots coming online is between 50 to 85 hours. Some pilots are even taking over 100 hours to be line qualified.
• Based on only 2 days of testimony I think we can safely say that some type of monetary judgment will be levied against Mesa. Also, remember that this is only the first trial, Mesa goes up against Aloha next.
  
• Mesa use to have $300 million dollars in liquid cash which was raised through a number of institutional investors. In the last year and a half the company has burned through $122 million of that reserve and needless to say many of Mesa's investors are none to happy about the financial situation of the company.
  

Day 1 Testimony is a little dry but Day 2 is pure Jonathan. Enjoy.
__________________________________________________ ____

Day 1:

Englander testified that he was provided with 3 hard drives from Murnane's computers. Two were eoffice laptops and one was a home computer. The two office hard drives had evidence of only a few deleted files, while the home drive had about 169,000. The latter is typical of a normal computer. The first two were obviously reformatted recently and wiped clean. There was evidence that Murnane asked a co-worker via e-mail “How do I permanently delete files from my hard drive so that it cannot be detected that I have deleted them?” There was evidence that Murnane used Drive Scrubber software to replace all of the deleted files on the two hard drives and some on the third (home) drive with a hexcharacter. While this did, indeed, make the deleted files completely unrecoverable, it stood out because normally when a file is deleted it actually stays on the drive until another file is written over it. OnMurnane's drives there was about 10 gigabytes of '3030303030 . . .

There was testimony that Murnane also back-dated the computer. The expert looked at the system logs on the drive which are organized sequentially in order of occurrence, not by date. He noticed that somefiles had been modified 1 year BEFORE their creation date. He then determined that the clockr esetting happened while the computers were in Murnane's possession because he had (1) bid on an e-bay item during the period in which the clock-resetting/ file deletion happened, and (2) he had logged into Mesa's network using his personal login information during that period, the fact of his login being logged in the system log.

On cross examination Mesa's attorney, Max Blecher asked if perhaps Murnane was deleting the files because he knew that the computer was broken and he was trading it in for a new one. Englander responded that Murnane knew he could swap out the drive and that it was unlikely that he would scrubthe drive and back date the computer clock for this reason. Blecher also asked if Murnane delete the items to hide the fact that he had been viewing porn on the computer. Englander said that this was very unlikely as he had never seen this scale of deletion just to hide porn surfing

Files were deleted from the 'H:' drive on Mesa's server. These files were in a directory entitled “M & A Opportunities/ Hawaiian” There was also an “Island Air” folder. (Aloha not mentioned). Mesa stated that they had backups of the files from this directory and that the files were provided to HAL, however,Blecher's cross examination on this point was disconnected and almost incoherent. Clearly he is not familiar with the workings of computers

As Englander was an 'expert witness' he was allowed to provide his opinion. He concluded:
1) Murnane used Sys Mechanic Pro 6/ Drive Scrubber to overwrite unallocated space on laptops 1& 2 and then tried to set the clock backwards to hide evidence of use of the program.
2) Murnane actively researched how to delete files permanently and without trace
3) Murnane was the user at the time the files were deleted and scrubbed and the clock was reset
4) The actions by Murnane were deliberate. ---

Mesa's witnesses:

1. Jennifer Johnson is one of Max Blecher's paralegals who helped prepare documents for production to HAL. She testified that all of the deleted documents from the H: drive were produced to HAL in some form or another. Her testimony was based on two lists that she was shown. On cross it was determined that she did not make the lists herself, and that some of the documents produced were not exact reproductions of the missing docs

Pappaianou, Mesa's V.P. of Legal testified that Murnane's home computer was sequestered after March 2006, (but not the two office laptops), that one of Murnane's laptops broke in July, 06, at which time he was provided with another one, and that he walked in on Murnane and observed porn on Murnane'scomputer. He testified that he did not know that Murnane had deleted documents until September of this year. He testified that after the Preliminary Injunction hearing last year, when it was determined that Murnane was lying in court (both Pappaianou and Blecher stated this!) Murnane's home laptop was sequestered. HAL's attorney Sid Levinson wisely cross-examined Pappaianou asking “if you knew he was dishonest, why did you not try to investigate/ prevent him from deleting files/ destroying evidenceon the other two laptops and the company server?”

On cross Murnane's testimony that he had copied everything onto his home computer except documents with HAL/ HA/ Hawaiian was discussed. (This evidence directly contradicted earlierevidence that laptop 3 had HAL/ HA/ Hawaiian docs on it).

Levinson got Pappaianou to admit that although he asked J.O., Lotz, and Murnane to preserve evidence for discovery, he never asked the I.T. department to save files until after the preliminary injunction (9/06), more than 6 months after the case had been filed and 6 months after he sent the e-mail to J.O.,Lotz, and Murnane asking them to preserve files.

Other testimony:A critical document entitled the “HAL Offering Memo” was alluded to.

Mesa's initial document production was only 1209 pages for the Preliminary Injunction. After themotion 25,000+ pages were produced. IT department was not asked to help search for HAL-related documents.

IT department was not asked to help determine if HAL-related documents had been deleted.
__________________________________________________ _____

Day 2:

The evidentiary portion of this motion is complete. There will be closing arguments for the motion tomorrow, followed by the commencement of trial. The judge has stated that he will not rule on the motion until after the trial. When he does rule on this and other matters, keep in mind that the legal standard to find liability is NOT “beyond a reasonable doubt”. That is a criminal standard. Instead Judge Faris only has to find that “it is more likely than not” that Mesa did the things that HAL alleges. Given Mesa's lack of credibility, it is probable that issues that are 50 – 50 will go against Mesa. The real question is: what is the appropriate sanction?

On day 2 of the trial we discover that:

1. Mesa wanted to forestall Yucaipa from investing in Aloha by issuing a press release on 9/23/05, just prior to Yucaipa's announcement that they were investing in Aloha. In J.O. 's lexicon “Forestall” means “Cooperate and Invite”. J.O. lied under oath about this announcement in a deposition, calling the timing "coincidental".

2. Murnane is J.O.'s long-time pal, he's “honest” and “good quality people” but when push comes to shove, under the Mesa bus he goes, porn, hard-drives, laptops and all.

3. Mesa wanted to 'block sell seats' for Aloha as J.O. had done with Virgin/ Sabena in Europe, by creating 'Aloha express' and reducing Aloha's 737 capacity in Hawaii.

4. Although J.O. is the CEO of Mesa and was personally responsible for advising Mesa to start go! in Hawaii, he could not be bothered to read the “Hawaiian Information Memorandum” or other relevant materials from within and without his company.

5. That J.O. does not understand legal or computer jargon. (A.K.A. the Ken Lay defense “I'm just the CEO how should I know what is going on at my company?) This in spite of J.O.'s statement that "My grandfather was a lawyer".

6. Mesa's attorneys cannot control J.O.'s mouth: While J.O. probably took the stand thinking he was going to show HAL and Aloha how strong Mesa's case is, perhaps in an attempt to settle the case before trial with HAL, he was so thoroughly discredited by HAL and by his own testimony that, if anything, he has probably put a new bounce in HAL's legal step. In just one afternoon it was determined that J.O. has no regard for Judge Faris or his court, that he has condoned unethical behavior at his company, lied under oath, thrown his 30+ year friend under the bus with ridiculous allegations of porn viewing, and demonstrated to Judge Faris that Mesa will do just about anything to win.

7. That HAL can bite back -- they raised Sarbanes/Oxley issues regarding Mesa's CFO and his destruction of documents.


LONG SUMMARY

On day two Mesa finished Pappaianou's testimony and then presented three witnesses: Mesa's IT manager, McKay Monson, their V.P./ Chief Info Officer Jeffery Hornberg, and CEO Jonathan Ornstein. I'll abbreviate the first two witnesses, as J.O.'s testimony outshines anything that they testified to.

Pappaianou testified that he was able to see from 40+ feet away that Murnane was looking at porn, but stated that he took no action against Murnane at the time. [Some in the gallery suggested that we should do a CSI-like porn/ not-porn test from the same distance away in the courtroom. . .]

There was more testimony from Pappaianou and the other two that basically discredited Mesa's porn theory and made it quite obvious that the story was concocted recently. For example, the alleged porn that Pappaianou and Hornberg saw Murnane looking at happened in 2004. Since then the next time that Hornberg even thought of it was when he was asked to come and testify, last week. The evidence destruction happend n 2006.

Hornberg also testified that the porn issue was made aware to him due to a virus on Murnane's computer in 2004. When asked about it I think I heard him say that the cause of the virus was an “adult content website that we went . . .that was on there.” ** In other words, I think they know that Murnane was looking at porn because they were looking at it together. Just MHO though. **

It became apparent that one of Mesa's servers was on the fritz around February or March of 2006, while the other ones seemed to be alright. This server was the one on which the backups of Murnane's files were kept. ** As this was around the time of the filing of HAL's case against Mesa, this is particularly inconvenient for HAL, and suspicious for Mesa. **

continued...

ERJ Driver

Mesa admitted that they did not follow an electronic document retention policy and that the IT department was not made aware that they should be looking for or retaining documents until August of this year when the Murnane issue arose. Pappaianou did inform J.O., Lotz, and Murnane that they should be preserving docs in March of last year. The company relied on voluntary copying of files into a network folder, and did not ffirmatively search for relevant documents until recently.

Notes: Mesa's argument is that although Murnane deleted documents, these documents were produced by Mesa through backups or other means and therefore Mesa should not be sanctioned for the lack of production. Levinson/ HAL did a credible job of showing that the documents produced by Mesa were not complete, and were not exactly the same as the ones deleted by Murnane. Yesterday's testimony that Murnane asked how to delete files so that the fact of their deletion was undetectable, his e of drive-scrubing software, and his back-dating of the computer clocks was unchallenged. HAL will probably also argue that Murnane's recent unavailability due to possible criminal charges is his and Mesa's own fault/ intentional doing and should not prejudice HAL's case. Murnane was obviously a central player in the HAL misconduct/ Hawaii launch of go!

JONATHAN ORNSTEIN's testimony.

[Some of spectators briefly hummed the Darth Vadar theme song as J.O. strolled up to the stand]

Comment: The proceedings evidence a lack of client control by Max Blecher who was at various times flustered by J.O.'s presentation of evidence. I suspect that it was J.O.'s idea to take the stand, as he really had nothing to offer that in any way exculpated Mesa in this motion. I suspect he was trying to show how strong Mesa's case is to convince both HAL and Aloha to back off of their lawsuits and settle. To say that he failed miserably is an understatement.

When J.O. first took the stand, Blecher reminded him that the testimony he was giving today was strictly in relation to the motion for sanctions for spoliation of evidence, and was not the same as general trial testimony which would begin later. This admonition was a waste of time, though, as the first hour of J.O.'s testimony was spent discussing various aspects of Mesa's entry into the Hawaii market.

HAL spent a good deal of time getting J.O. to admit that Murnane played a key role in Mesa's entry into the Hawaii market, while J.O. tried to minimize Murnane's participation. (To mitigate the perceived damage of Murnane's document deletion.)

J.O. testified that Mesa's entry into the Hawaii market was based on a QSI (Quality Service Index) formula that would mathematically determine profitability. He argued that using .5 for aircraft load factor in the formula, instead of .9 resulted in Murnane's conclusion that 'this project makes no sense with 4 airlines in the market.'

J.O. stated a few times that he had known Murnane for 30 years that they had gone to college together, out to dinner, knew families, etc., and that Murnane was always honest. In this vein J.O. also mentioned that he had gone to Iraq with Murnane and that Murnane helped J.O. with his handicapped son. (Not a dry eye in the house. . . ) On cross examination it was established that J.O. was the driving force behind bringing Murnane on board, that Murnane reports to J.O., and that they work in adjacent offices.

Murnane prepared an offering memo which used information that was identical in every way to HAL information that Mesa was supposed to have destroyed. J.O. explained that Murnane said the info probably came from others in bits and pieces and that he had destroyed the docs.

When asked about the evidence destruction by Murnane last year, J.O. said that Murnane's explanation was convoluted and that he did not understand that computer jargon. He said that he referred this to outside counsel. It was determined that Murnane should have his own attorney.

Murnane was put on 90 days paid administrative leave on 9/18/2007, one week prior to trial commencing, per J.O.'s recommendation to the Board of Directors.

HAL raised Sarbanes Oxley issues when they showed J.O. a recent Mesa press release (http://phx.corporate-ir.net/phoenix.zhtml?c=78947&p=irol-newsArticle&ID=1054417) in which, while stating that Mesa maintains the "highest ethical standards," Mesa fails to disclose to shareholders that Mesa's CFO – the person responsible for public shareholder reports – was facing allegations of destruction of evidence that he was federally-mandated to preserve. J.O. admitted that he had reviewed and approved this press release. J.O. got flustered here and blurted out that they had no responsibility to issue any information at all under NASDAQ rules.

HAL then established that in spite of Mesa's “highest ethical standards” they did nothing in the face of Faris' ruling that Murnane had lied. HAL brilliantly confronted J.O. with the Wall Street Journal article in which J.O. stated that 'he took exception with the court's conclusions'. As 'the court' was Judge Faris -- the very man that J.O. was sitting in front of -- this caused a bit of squirming on the Mesa bench.

When asked about Murnane's copying of HAL's confidential info, J.O. defended it as an 'honest mistake'. (HAL has a brilliant counter for this, discussed later.) He stated that Murnane is the 'highest quality people'. He stated that other than asking Murnane to re-write the declaration that Faris found to be untruthful, he did nothing to investigate Murnane until July of this year when the drive scrubbing issue arose.

Next there was discussion of a 9/23/05 press release (http://starbulletin.com/2005/09/23/news/story1.html) that was curiously timed in light of Aloha's announcement of Yucaipa's investment (http://starbulletin.com/2005/09/23/news/index2.html). HAL proved that J.O. had lied when he said that the timing of this press release was coincidental and that it was not intended to forestall investment in Aloha by investors. Mesa Board of Directors minutes from a meeting attended by J.O. in which the impact of the announcement on a potential investment in Aloha was discussed. J.O. countered that they were trying to send a message to other investors that they should work with Mesa, not against Mesa. Murnane wrote an e-mail to Mesa's consultant, Mo Garfinkle stating “Mo – wanted to give you a quick heads-up. In an effort to forestall any potential investment in Aloha we have decided to issue a press release.”

At this point J.O. was thoroughly ridiculed when he tried to argue that “forestall” meant “cooperate and invite”. Some of us almost fell off our benches laughing.

Levinson: “Does your own false testimony make you less likely to investigate Murnane?” J.O.: “No.”

More brilliant questions. “Does tampering with and manipulating evidence constitute “highest ethical standards?”

Q: “Why was Murnane not put on admin leave until 9/18 when the report of his tampering first surfaced in July?”

Note: I think that HAL is trying to analogize the skillful timing of the 9/23 press release which dropped a bomb on the Aloha-Yucaipa deal, with the timing of this administrative leave – one week before the trial – as an obvious attempt to influence the court. They make another good analogy later.

One of the many J.O. inconsistencies: While decrying the legal mumbo-jumbo, and going so far as to say that he had not read any of the court's opinions, was not sure what the preliminary injunction motion was about last year, and was not sure what this motion was about, when asked why Murnane should seek independent counsel J.O. stated “My grandfather was a lawyer, and he told me that if you're paying for legal advice you should take it.” Surely Mesa's attorney Blecher must be wishing at this point that J.O. would take his own advice, listen to his attorneys, and shut his yapper . . .

It was determined that J.O. recommended to the B.O.D. to enter the Hawaii market. J.O. waxed romantic about how he had wanted to come here for a long time, that it was an attractive place, etc. He stated that an analysis was prepared by Mesa executives and employees. Mickey Bowman (marketing V.P.) prepared the QSI showing that Hawaii could be profitable for Mesa. While J.O. tried to argue that Murnane was not involved, it is apparent that he was very involved. J.O. also testified that in spite of his romantic pining for Hawaii he did not review the Hawaiian Information Memorandum (“H.I.M.”), and did not review charts showing that Mesa could bleed money longer than Aloha in a fare war. This in spite of the fact that the H.I.M. was sent to him as an e-mail attachment.

On re-direct J.O. testified that he was “good friends with Yucaipa” that he had dinner on them the night of the closing of the Aloha deal. He testified that as Burkle is worth over $3.5 billion he did not think his 9/23/05 press release would dissuade Burkle from investing in Aloha. He testified that he offered $20 million to participate in the Aloha deal, but “unfortunately our offer did not reach [Mr. Burkle].”

He testified that at the time of the 9/23 press release Mesa was not interested in coming to Hawaii independently but rather wanted to participate in a 'block seat sale' with Aloha, as 'Aloha Express' wherein Aloha would pull some 737s off of the routes, allowing Mesa to operate its R.J.s. There was a great deal of discussion as to whether Mesa intended to put Aloha out of business. Again, J.O. reiterated that the .5 vs. .9 figure in the QSI formula was the reason that Mesa concluded that Aloha had to go out of business for Mesa to succeed. Mesa observed that at the time of Discovery Air, air fares were only $28 while at this time the lowest was $86, due to reduced competition due to Aloha/HAL cooperation to reduce capacity.

Finally Trial Exhibit #1 was presented. This was the NISD/SEC conviction of J.O. for securities violations 17 years ago. This was again brilliantly presented by HAL to show that J.O. is a lifetime liar with no regard for the law or the courts. The SEC found that J.O. had not been forthright in their investigation. They did not believe J.O.'s explanation that this was a 'misunderstanding.' When Blecher objected due to the age of the conviction, Levinson pointed out that the 10 year rule referred to by Blecher applies in criminal cases, and that this information was being offered to show that as Murnane's supervisor, J.O. was doing the exact same thing he had done 17 years ago. Dismissing illegal conduct as an 'honest mistake' and lying to a tribunal. Brilliant.

= we're done for.

N2rotation

More doom and gloom for MESA. I love it.

http://starbulletin.com/2007/10/02/news/story01.html

Ellen

most people won't read this because it's TOO long for their attention span, but the overall ramifications are running rampant in the airline as well as other industries.

Executive leaders across the country are cheating and lying their way to riches at the expense of employees and shareholders. To see that MESA is getting what it deserves, should send a smoke flare to other airlines . . .

boilerpilot

Definitely. However, the way the regionals have been acting doesn't bother me the most. After all, to at least a slight majority of regional pilots, the regionals are simply a stepping stone, and while regionals aren't the most aged establishment in the airline industry, it's hard to argue that there were no bottom feeders in past days.

What bothers me the most is the seeming glee that the Legacy and Major airline Boards are taking in imitating not only the increasingly cutthroat non-aviation world, but stooping down to the levels of regionals to modify and circumvent ALL employee contracts, negotiate underhanded deals with officials, and maintain less than ethical everyday relationships with their employees.

It quite literally is a change from "pay them so they'll want to stay" to "pay them just enough not to leave".

And all this during times of unprecedented global and US aviation growth.

chitownpilot

Correct me if I'm wrong, but isn't 50 hours the MAXIMUM amount of time one can spend on IOE? When I went through new hire training at my company, we were told 25 minimum, 50 MAX, according to FAA rule.

trunk junk

I read the whole thing. I thought it was a great post.

ToiletDuck

Doesn't matter what he tried to delete there's only one way to actually get rid of it and that's to delete it then have the computer write over the actual data pits several times. If he's actually smart enough to find a program to do that then he's already guilty as it takes time and isn't easy to do. Anything less and a computer forensics specialist and retrieve the data very easily using a few key programs.