in Houston, Texas

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Cue the sandy-white beaches: This is where the British Virgin Islands comes in.

HAS Development Capital Corp. is registered there -- along with many other American firms. The BVI, as they're known, aren't quite as infamous as their Caribbean Commonwealth cousins, the Cayman Islands, as a place where rich Americans go to hide their dough from Uncle Sam, but they're almost there. (President Obama was recently quoted speaking about the 12,000 companies supposedly based in a single building in the Caymans: "Either this is the largest building in the world or the largest tax scam.")

The Houston company was set up there, Vacar said, to protect HASDC's assets if the Quito airport were nationalized. Ecuador has a treaty with Great Britain, he said, that promises to compensate British firms if their assets are taken over by the government.

Nationalization is serious business -- HASDC's Canadian-based business partner, Airport Development Corp., stood to lose billions of dollars when the Hungarian government nationalized Budapest's Ferihegy Airport in 2002; an international tribunal later made the Hungarian government pay ADC and its partner $84 million.

And it's a real threat for businesses in that part of the world. Venezuela's Hugo Chavez enjoys nationalizing industries in between staging "Death to America!" rallies. Plus, Ecuador isn't the most politically stable country on earth -- just ask the 3,000 Ecuadorans who stood on the tarmac at Mariscal Sucre in 2005 and tried to block the plane carrying President Lucio Gutierrez to asylum in Brazil after he dissolved the Supreme Court and called out the army after being accused of major embezzlement.

Exactly what HAS Development Capital Corp. does, how many employees it has, and how it operates is not clear from available public records. Indeed, the only way Texas Watchdog learned of its existence was by spotting a one-line transfer of $1,000 noted in the very back of HASDC's 2007 filing to the Internal Revenue Service.

As a company in the British Virgin Islands, there's no real way to procure information about its corporate structure from the BVI government; when Texas Watchdog asked HASDC for its contracts with HAS Development Capital Corp., among other documents, under the Texas Public Information Act, the nonprofit responded that it is not a government entity and doesn't have to conform to the public records law.

Two other firms in the HASDC orbit are apparently heading up the $600 million project to build a newer, bigger Quito International Airport further outside of town, and are running the older Mariscal Sucre airport until it is shut down and replaced by the new facility.

One is Corporacion Quiport S.A., based in Ecuador, whose shareholders, according to online reports, include HASDC, its Canadian business partner ADC, Aecon Construction Group Inc. and Andrade Gutierrez Concessoes.

(Story continues below map. Click here to jump down.)

HAS Development Corp. and its broad reach
An interactive map of various projects involving HAS Development Corp. and its partners and affiliated firms. Click on the airport icons to learn more.

View HAS Development Corp. and its broad reach in a larger map

Another is ADC & HAS, a for-profit joint venture between HAS and ADC that was incorporated in Texas in 2008. The company's Web site says it runs Mariscal Sucre and will take over the new Quito International when it is finished next year. The only two principals named in the incorporation papers ADC & HAS filed with the Texas Secretary of State's office were Scheferman and ADC chief Michael Huang, whose company is again running Budapest's airport as well as Toronto's Pearson International.

Vacar told Airport Business magazine in January that there's also a Virgin Islands offshoot of that joint venture as well:

"We created a company, it's called ADC & HAS Management BVI. And it is there for the purpose of working in these consortiums; principally, trying to lead them to do investments at airports around the world, with a focus on the Americas. But we could do things in places like India or China.

"That corporation is currently 51 percent owned by HASDC and 49 percent owned by Airport Development Corporation of Canada," says Vacar.

ADC & HAS' current president and CEO is Scheferman, the former Marine colonel who used to be president and CEO of HAS Development Corp. But he didn't have to go far when he changed jobs -- ADC & HAS' office has a listed address that is the same as that of HASDC, a suite in an office building at 3838 N. Sam Houston Parkway E.

A search of Google also turned up a mention in the Costa Rican press of another HASDC joint venture, similar to Quiport -- this time, it's Coriport, and it is, or was, a consortium in a $35 million deal to expand the airport in Liberia, Costa Rica (not to be confused with the nation of Liberia, which is in Africa). A Costa Rican business publication said it included the Houston Airport System, the "Canadian MMM Aviation Group S.A. and three Costa Rican companies."

Which brings up another point: It's not clear to what extent the public in these countries understands the involvement of the Houston Airport System itself, as opposed to HAS Development Corp., the nonprofit that wants everyone to believe it has an arms' length relationship with the city.

The good name of the Houston Airport System was evident in a telephone conversation Texas Watchdog had Tuesday with Ken Villanueva, director of finance at ADC & HAS Management in Quito. "We are in a partnership with Houston,” Villanueva said. “It is an arm of the Houston Airport System in a partnership with" ADC, he said.

Likewise, Texas Watchdog found numerous mentions by the English-language press in Latin America in which the Houston-based entity involved in the transactions was referred to as "the Houston Airport System," not as the development corporation or its offshoot firms.

The issue may have been brought up in 2006, when HASDC and a Colombian partner called MHC were angling for the concession contract at Bogota's El Dorado airport. A story from El Tiempo on May 21, 2006, described "claims being made that (MHC's) US partner HAS Development Corporation (HASDC) does not have the backing nor the experience of the Houston Airport System (HAS) behind it as suggested."

Continued on ...
Page 4: City's auditors say nonprofit has "crossed threshold"
Page 5: Despite public employees' labor, nonprofit says it's private

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