Questions persist about the small company linked to Houston’s airport system and chaired by the city’s airport director.

HOUSTON – Last March, KPRC 2 Investigates provided Houstonians with an in-depth look at the Houston Airport System’s Development Corporation (HASDC), a small business with three employees earning more than $800,000 a year in total. “I appreciate you bringing this forward, but without you I wouldn’t have known about it,” Mayor John Whitmire said.

KPRC 2 Investigates continues to spotlight HASDC, which helps Latin American countries improve their airport operations. Its main revenue generator is the international airport in Quito, Ecuador, which generates about $2.1 million, according to Agustin Arellano, president and CEO of HASDC.

Our initial report showed how HASDC is “affiliated” with the Houston airport system but has no legal or financial responsibility. Arellano adds: HASDC is a private, non-profit corporation, self-funded with no contributions from the city or Houston airport system. The company was established nearly twenty-five years ago with the approval of the Houston City Council.

Less than 24 hours after our first report, the HASDC website was taken down and reorganized, removing mentions of affiliation with the Houston airport system and adding a new politics section. “We decided to clean this up because we are certainly not affiliated, which we work for, but we are not affiliated,” Arellano said.

During our months-long investigation, we discovered numerous emails showing collaboration between high-ranking executives in the city’s airport system and Arellano’s team. Notably, the Houston Airport System’s director of aviation also serves as chairman of the HASDC board of directors. Jim Szczesniak, who became the city’s new aviation director following the abrupt resignation of former director Mario Diaz, sent Arellano a letter asking many of the same questions we previously asked Szczesniak .

Diaz, the former airport director has no connection to KPRC 2 is investigating Mario Diaz.

Our investigation reveals that the private nonprofit organization reported aggregate net assets of approximately $20 million to the IRS. IRS filings with HASDC state: “The organization seeks to promote air transportation, commerce and economic development for the benefit of the Houston airport system” as it provides support globally under the name Houston Airport System Development Corporation.

“Do you know when we saw money coming back from Ecuador on this,” we asked Houston City Attorney Arturo Michel.

He responded with the mayor at his side: “We’re asking the finance department and the legal department to look into this to see what’s going on.” »

Arellano mentioned that over the past several years, HASDC has awarded a $5 million grant to Collins Aerospace, an anchor tenant at the Houston Spaceport. This happened even though the spaceport has its own development corporation whose members are appointed by the mayor.

Arellano emphasized the airport’s involvement in the subsidy process: “They go to HAS and make the request, and then HAS can bring these files,” Arellano said.

When asked if this was a grant open to any business, Arellano admitted, “No, no, it’s not open to any business. »

However, the Houston Airport System tells KPRC 2 Investigates it has no records regarding grant applications after we filed a request under the Texas Public Information Act for the applications Arellano mentioned.

We presented our findings to former U.S. Attorney Ryan Patrick, who told us bluntly: “Looking at these documents, you can’t tell exactly what this nonprofit is for and what it does. »

Patrick, who has experience reviewing IRS records to ensure compliance with federal law, said, “I would start asking a lot of questions. I would like to see the records, understand which officials are working on these projects, and support these IRS records.

Although he’s only been on the job for a few months, Szczesniak believes the private nonprofit organization, separate from the city but whose activities he helps oversee, is beneficial.

“What we’re trying to do is use it to generate economic activity for the Houston area. Whether we invest this in the airports or the spaceport, it’s all about growing Houston’s economy,” Szczesniak said.

The Houston Airport System says HASDC provided a $250,000 grant to San Jacinto College for an aviation program and $50,000 for a new chapel at William P. Hobby Airport.