Ex-British Airways executive indicted over alleged JFK Airport bribery scheme

By Jonathan Stempel

NEW YORK (Reuters) - A former British Airways executive who oversaw the carrier's operations at New York's John F. Kennedy International Airport has been indicted for accepting bribes to help a ground handling company win contracts, New York's attorney general said on Tuesday.

The charges announced by Attorney General Letitia James against Steven Clark, who she said directed British Airways operations at JFK Terminal 7, arose from "Operation Greased Runway," a probe into contracting and procurement at JFK.

Jeff Kinsella, a former chief executive of Ground Services International (GSI) accused of making improper payments to Clark, was also charged in the case.

Both defendants pleaded not guilty, according to their respective lawyers. British Airways, part of International Consolidated Airlines Group SA <ICAG.L>, was not charged.

James said Clark received more than $5 million and a secret 5% stake in GSI over several years from Kinsella, in exchange for promoting that company's services.

According to court papers, payments were concealed from Britain's flag carrier with fake invoices, and sometimes laundered through companies that Clark or Kinsella created.

James said Clark also received improper sums from another vendor, while Kinsella paid an executive who helped run JFK Terminal 1, which houses several airlines, to win his support.

Clark, 61, of New York, and Kinsella, 59, of Naples, Florida, were each charged with several counts, including bribery and money laundering, and arraigned before a New York state judge in Queens.

"Mr. Clark is innocent of the charges to which he pleaded not guilty, and expects to be vindicated," Clark's lawyer Kevin O'Brien said in a phone interview.

Kinsella's lawyer Brian Legghio said his client was also innocent, looked forward to clearing his name, and had been awarded his JFK contacts on merit and based on his reputation. He said Kinsella sold GSI three years ago.

GSI agreed with James' predecessor Barbara Underwood last December to a $12.3 million settlement related to the probe.

"Today's indictment sends a clear massage to airline companies and airport vendors: pay-to-play schemes will not fly in New York," James said in a statement.

(This story corrects defendant's name to Jeff Kinsella from John Kinsella in third paragraph)

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)