According to the Department of Justice (DOJ), United States-based carrier Delta Air Lines has settled a lawsuit accusing it of misusing federal relief funds allotted to it during the 2020 coronavirus pandemic. The DOJ published the press release on July 15. The statement disclosed that Delta settled the lawsuit with an $8.1 million payment to the U.S.
The result comes after the airline was accused of violating conditions set by Congress for certain recipients of federal relief funds, which capped the compensation of company executives. The DOJ noted conditions applied to executives “who had earned more than $425,000 in 2019.” The source further explained that Congress imposed the compensation cap to prevent those high-earners “from receiving substantial compensation packages after their companies accepted taxpayer-funded support.”
Delta Air Lines received federal relief funds through the Payroll Support Program (PSP), a component of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The DOJ claimed that the PSP allotted $11.9 billion to the airline, “including at least $8.2 billion in the form of grants that did not have to be repaid.” However, one of the funding conditions was that the company abide by the compensation caps.
A whistleblower alleged that the carrier violated those terms between March 2020 and April 2023. The press release further claimed that the company lied about complying with the rules for accepting the PSP funding. Additionally, the DOJ alleged that the airline didn’t notify the Treasury Department about breaching the funding agreement.
What Else Is There To Know About The Lawsuit And The Pandemic Funds Acquired?
The U.S. Attorney’s Office for the Northern District of Georgia, the Civil Division’s Commercial Litigation Branch, and the U.S. Department of the Treasury’s Office of Inspector General all conducted the investigation. Notably, Delta settling the lawsuit via payment doesn’t mean the company has admitted to the allegations of misuse. It also does not mean the airline is guilty.
The settlement grants $825,000 of the $8.1 million sum to the whistleblower involved in the lawsuit. Additionally, Delta Air Lines will have to pay that person’s attorney fees.
“When companies accept federal assistance, especially generous pandemic-relief funds like those at issue here, they owe a duty to the American people to respect the conditions placed on those funds,” said U.S. Attorney Theodore S. Hertzberg in the DOJ’s press release. “We will continue to enforce all available laws to punish the misuse of taxpayers’ money.”
Has Delta Air Lines Commented On The Case Result?
The airline told Patch that it “strongly believes it fully complied with all requirements of the CARES Act.”
“At issue is a disagreement about a technical matter involving the time periods used to measure executive compensation during the pandemic,” added the carrier. “Delta has consistently maintained the claim is without merit and settled to avoid the expense and distraction of litigation. Delta remains grateful for the Treasury Department’s efforts that kept essential airline employees operating our nation’s air travel system.”
