December 8, 1996 in Nation/World

Risky Business Thriving Black Market In Bad Parts Plagues Airline Industry

Frank Bajak Associated Press
 

When an American Airlines plane smashed into a Colombian mountainside last December, outlaw salvagers didn’t even wait for all 159 victims’ bodies to be collected before they moved in.

Using sophisticated tools, they extracted engine thrust reversers, cock-pit avionics and other valuable components from the shattered Boeing 757 and then used helicopters to fly the parts off the steep ridge, U.S. and Colombian sources say.

The parts were offered for sale in Miami, a hub of the thriving black market in recycled, stolen and counterfeit aircraft parts.

“They wanted to sell the whole lot, including the landing gear,” a law enforcement source said, speaking on condition of anonymity.

Parts illegally salvaged from crashes, counterfeit parts and other substandard components regularly find their way into the world’s air fleets, sold at bargain prices, often with falsified documents about their origin or composition.

For the flying public, they are a growing peril.

“The whole system is contaminated,” said Peter Friedman, director of quality at an aircraft repair station in Oakland, Calif. “In my position, I find unapproved parts on a daily basis.”

“Unapproved parts” is the Federal Aviation Administration’s term for components not certified as airworthy - from fraudulently produced knockoffs made from inadequate alloys to recycled pieces misrepresented to hide defects, age or crash damage.

In the industry, they are known as “bogus parts.” For people with no qualms about putting the flying public at risk, it’s a lucrative market. The worldwide aircraft parts inventory is worth $45 billion.

Just how many unairworthy parts have claimed lives is not known. Internationally, no one keeps records. In the United States, the number of cases is in dispute.

The worst confirmed accident occurred on Sept. 8, 1989, when at 22,000 feet over the North Sea, the tail section of a Convair 580 turboprop plane began vibrating violently and tore loose. The charter aircraft, carrying 55 people from Oslo, Norway, to Hamburg, Germany, splattered over 3-1/2 miles of sea. Everyone aboard died.

Norwegian investigators painstakingly dredged up 90 percent of the 36-year-old plane and found the cause: bogus bolts, bushings and brackets. The charter company, Partnair, went out of business, and the origin of the parts was never determined.

Most major international airlines have encountered unapproved parts - and the problem is more serious in the developing world, where regulation is lax when it exists at all.

“It’s a real can of worms,” said Michael F. Rioux, chief of engineering and maintenance at the Air Transport Association of America, whose 20 member airlines carry 97 percent of U.S. commercial traffic.

Brian Wall, security chief for the International Air Transport Association, which represents more than 260 airlines, promotes seminars on bogus parts.

“We view this as a potentially dangerous situation. Who knows if we know the whole picture?” Wall said from IATA headquarters in Montreal.

Many industry executives refuse to discuss the issue on the record.

Even officials at United, American and Federal Express, among air carriers widely praised for tightening up their control of parts inventories, would not speak openly about their experiences with bogus parts.

Japan Airlines said the carrier’s quality control chief would only answer questions on the subject in writing, and Air France executives refused to grant an interview to discuss what one spokeswoman called a “touchy subject.” Swissair’s quality control chief also declined to talk on the record.

That the industry is worried shows in American Airlines’ unusual decision to make public a 14-page list, complete with serial numbers, of parts missing from the remains of Flight 965 after it crashed near Cali, Colombia, last Dec. 20.

The list put the industry on alert.

Sold to repair stations or airlines by brokers whose business is unregulated - more than 5,000 are active in the United States alone - black market parts come from theft rings, from counterfeiters, from “strip and dip” shops that mask flaws with a new coat of metal plating. Some even come from the production overruns of legitimate manufacturers - parts that may be airworthy but also can be production line rejects.

The money is so good that one Colombian parts trafficker told a Miami detective she switched to the trade from drug-running.

As the world’s commercial air fleet ages, more overhauls are required and the potential increases for a bad part getting on a big plane.

Yet until congressional pressure and a series of groundbreaking investigative reports by the Cleveland Plain Dealer last year forced a policy shift, the FAA did not treat bogus parts as a serious threat, arguing they had not caused a single U.S. commercial aviation accident.

“Do unapproved parts pose a significant safety problem for the flying public?” then-FAA administrator David Hinson said at a May 1995 Senate hearing. “The answer is no, they do not.”

Howard Davidow, a Miami aviation consultant with 37 years in the industry, warned at the hearing, however, that the potential for a bogus part causing a catastrophic accident “has entered the stage of critical mass.” Three months later, the FAA created a task force on unapproved parts.

A study by the FAA of its accident-incident database done at the request of The Associated Press found that unapproved parts played a role in 174 aircraft crashes or less serious accidents from May 1973 through April 1996, resulting in 17 deaths and 39 injuries. None involved major commercial carriers.

But critics, including outgoing Sen. William Cohen, R-Maine, suggest the FAA may gloss over the role bogus parts played in some accidents because it does not want the onerous responsibility of regulating the parts industry.

James Frisbee, quality control chief at Northwest Airlines until his 1992 retirement, is among those who feel bogus parts have contributed to many more accidents than federal records indicate.

“It’s very, very hard to pin the cause of an accident on a part that failed … especially when the airplane is scattered over five acres,” he said.

Major airlines have as a rule been discreet about bogus parts, not wanting to spook passengers. Frisbee says standard procedure has been to alert other airlines to a discovery by phone call but rarely inform the FAA, which does not require them to report such incidents.

Frisbee said he and colleagues from American, Delta and Federal Express sought stricter regulation of the parts market in 1990 but the FAA didn’t take them seriously.

A. Mary Schiavo did. Appointed the Transportation Department’s inspector-general by President Bush that year, the former federal prosecutor made bogus parts a priority.

Investigations launched under Schiavo have yielded more than 150 convictions in such cases, with jail sentences ranging up to five years and more than $47 million in restitution and fines paid.

Schiavo, who stepped down in July, is proud of the campaign.

A recent catch: Allan L. Ausman of Seattle, sentenced in July to four years in prison for selling thousands of counterfeit Boeing replacement parts over 10 years. Some were what the FAA classifies as “safety category one” parts - such as bolts that hold engines to wings - whose failure could cause an aircraft to crash.

“About $2 million worth of parts were put into the system by Ausman and what happened to them after that I do not know,” said Thomas Wales, the assistant U.S. attorney who prosecuted the case.

Ausman’s biggest customer, Avio- Support, serviced such airlines as American, United, USAir and Aer Lingus, court documents show.

Bogus parts often come from abroad. U.S. agents have seized shipments from Germany, France, Kuwait, England, New Zealand, Japan, China and the Philippines. The Air Transport Association has complained of a mass dumping of questionable aircraft screws, rivets and bolts made in Taiwan and Mexico.

The FAA is now stepping up vigilance and training inspectors better on unapproved parts. And many major airlines are tightening up their parts acquisition - cutting down on suppliers and auditing them better.

In October, SAS airlines replaced wing control wires based on an FAA-issued warning that the parts could be bogus. The airline said it was unable to obtain proof from its supplier that the parts were genuine.

In June 1994, the Air Transport Association petitioned the FAA for regulation of parts brokers, but the agency balked.

Asked its reasons, the FAA said, “There are several thousand parts brokers and distributors and regulating all of them would be a monumental task.”

It put the onus on the industry: “By using accredited brokers and distributors and by closely inspecting parts during incoming inspection, the industry can ensure it meets its responsibility to use airworthy parts.”

No senior FAA official would agree to an on-the-record interview about the situation, but the agency provided answers to written questions submitted by the AP.

The FAA oversees parts’ manufacturers, aircraft repair stations and the airlines themselves - but no one in between. There are no laws mandating, for example, that crash-damaged or life-limited parts be destroyed; the FAA only recommends it.

Many parts, like jet turbine blades and disks, must be replaced after a set amount of hours aloft because of the stress they undergo. Or they must meet hardness standards, which the bolts responsible for the Norwegian crash did not.

Yet criminal dealers in recycled and crash-salvaged parts can circumvent inspections and tests by simply lying about where they got them.

In the Colombia crash last December, salvagers lifted parts from the site via the same helicopters used by the country’s civil aviation authority - ostensibly in control of the mountainside - for ferrying investigators.

The parts were cleaned, boxed up at Cali’s airport and flown out of the country, U.S. and Colombian sources say. What eventually happened to them isn’t known.

American Airlines was amazed to discover that the salvagers used specialized tools, including cutting torches, to extract pieces from the Rolls-Royce engines, company spokesman John Hotard said. U.S. law officers in Miami trying to track down the Cali parts say such salvaging happens often.

For instance, Dennis Brett of Dallas pleaded guilty to wire fraud in 1994 for trying to sell engine turbine disks without mentioning they came from a Varig Airlines Boeing 737 that crash-landed in a Brazilian jungle in 1989. He served five months in prison.

Parts from a British Airways Boeing 747, which was burned in Kuwait by retreating Iraqi troops at the end of the Gulf War, made their way into the inventory of a Chicago company. A Kuwaiti salvage company had dismantled the plane and promised British Airways it would destroy the parts.

Decommissioned aircraft are routinely stripped throughout the world, their parts easy to come by. Often, the paperwork is questionable.

But even the paperwork of new parts can be suspect.

Under Schiavo, a DOT audit of FAA-certified repair stations outside the United States found 43 percent of the parts they obtained from manufacturers lacked documentation proving them airworthy. The same was the case for 95 percent of those they got from brokers.

MEMO: This sidebar appeared with the story: Bogus parts come from many sources, of many types FBI identifies four basic fraud schemes involving bogus aircraft parts: Affixing FAA yellow airworthiness tag, which certifies part as having been rebuilt or overhauled, to used part on which no work has been done. Making part based on manufacturer specifications but with inferior materials, so it resembles genuine item without meeting flight specifications or having been tested. Buying, and then reselling, production overruns from parts makers who supply major aircraft manufacturers. Such parts may be airworthy, but they can be factory rejects. Obtaining parts that are fatigued, worn or damaged to point of being unfixable and selling them as refurbished. - Associated Press

This sidebar appeared with the story: Bogus parts come from many sources, of many types FBI identifies four basic fraud schemes involving bogus aircraft parts: Affixing FAA yellow airworthiness tag, which certifies part as having been rebuilt or overhauled, to used part on which no work has been done. Making part based on manufacturer specifications but with inferior materials, so it resembles genuine item without meeting flight specifications or having been tested. Buying, and then reselling, production overruns from parts makers who supply major aircraft manufacturers. Such parts may be airworthy, but they can be factory rejects. Obtaining parts that are fatigued, worn or damaged to point of being unfixable and selling them as refurbished. - Associated Press


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