Delta has paid $8.1 million to the federal government to settle claims it misused pandemic-era business relief funds.
According to the U.S. Justice Department, Delta accepted money from the temporary Payroll Support Program and failed to abide by rules that placed a cap on compensation paid to executives. The airline then falsely certified that it had complied with the payment limit, government attorneys said.
The settlement was announced by the U.S. District Court for the Northern District of Georgia on Tuesday.
“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. “We will continue to enforce all available laws to punish the misuse of taxpayers’ money.”
Delta received about $11.9 billion as part of the Payroll Support Program, including at least $8.2 billion in the form of grants it did not need to pay back. By accepting the money, the airline agreed to program rules limiting payments to any executives who earned over $425,000 in 2019. That stipulation, written to ensure that executives were not misusing or diverting taxpayer-provided support, remained in force until April 2023.
A third-party financial researcher later filed a whistleblower complaint in federal court alleging Delta had violated the False Claims Act, triggering an investigation by the Justice Department. The complaint claimed Delta paid some corporate officers more than was permitted, then “allegedly falsely certified its compliance with the caps” and failed to inform the U.S. Treasury Department of its error.
The whistleblower will receive $825,000 from the settlement, plus attorney’s fees.
The Justice Department noted that the claims resolved by Delta’s payment are “allegations only,” and there has been no determination of liability.
