United pays $2.4 million 'Chairman's Flight' fine

United Airlines' parent company has been fined $2.4 million by the Securities and Exchange Commission for setting up a money-losing flight to curry favor with the former chairman of the Port Authority of New York and New Jersey.

The CEO of United Continental Holdings, Jeff Smisek, and two senior colleagues resigned last year in the wake of an internal company probe into the route, set up in 2012 between Newark and an airport in South Carolina close to former Port Authority Chairman David Samson’s second home.

The SEC, which regulates publicly traded companies, said that the route lost $945,000 for the airline by the time it ended, when Samson stepped down from the agency in March 2014.

Andrew Calamari, director of the SEC’s New York office, said in a statement: “United initiated a money-losing flight solely to curry favor with a public official, and failed to reflect in its books and records a fair and accurate depiction of the rationale behind the decision and its projected financial impact.”

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Earlier this year, Samson pleaded guilty to federal bribery charges related to the flight, which left Newark on Thursdays and returned to New Jersey on Mondays.

Federal investigators found that Samson threatened to use his power as chairman of the bi-state agency to hold up a hangar project at Newark Liberty International Airport, which was important to United, unless the flight was instituted.

In a 2011 email referring to his efforts to pressure United executives to sign off on what he dubbed “the Chairman’s flight,” Samson wrote: “I hope they dance to my tune."

The recipient of that email, Jamie Fox, a former state transportation commissioner acting then as a United lobbyist, was charged with conspiring with Samson to commit bribery. He maintains his innocence and is awaiting trial.

Samson, who is in his mid-70s, is to be sentenced in federal court in Newark early next year.

The $2.4 million SEC fine is in addition to a $2.25 million fine United agreed to pay to the Justice Department earlier this year.

United’s total operating revenue for 2015 was $37.9 billion.

Megan McCarthy, a spokeswoman for United, said: “We are pleased to resolve this matter with the SEC.”