Pensions funds lose out to cargo airline investment

COURT documents filed last week in the US have revealed details on how two businessmen convinced pension trustees to loan them US$30 million to buy a cargo airline that went bust.

Donald Watkins and Donald Stukes persuaded the Detroit, US, trustees to loan them the money in under three weeks but TradeWinds Airlines subsequently went bust in only seven months.

About $27 million of the cash paid off TradeWinds’ debts, $1 million went to Stukes’ financial advisory company, ASI Advisors, leaving only $2 million to run the airline.

Although Watkins has a past as a civil rights lawyer he is also well-known for pitching large-scale business ventures only to have them collapse. Forbes magazine dedicated an investigative article on him back in 2002 questioning his claims that he was a billionaire. He is also a close contact with Delford Smith, founder and owner of Evergreen International Aviation, the allegedly CIA-front company. Stukes also has a chequered business record.

Watkins told the Detroit Free Press: “The only blemish on my 36-year business career record is the TradeWinds dispute, which was precipitated by my refusal to participate in an unlawful pay-to-play scheme forced upon me by certain trustees of the Retirement Systems of the City of Detroit and their surrogates.” He claims these were requests for funds to fuel trustees’ election campaign and to use his personal jet.

Watkins says that ASI Advisors is a reputable firm that has advised on many aviation deals. “We are aviation experts,” he said. “I’m not the bad guy in this thing,” he said.