LAFAYETTE, Ind. A ruling by a regional administrator for the Federal Transit Administration says the Lafayette public transit agency has been blatantly and consistently violating federal charter service rules and it was aided and abetted in many of the violations by two private bus operators.

The FTA ordered the transit agency to cease and desist from providing illegal charters and, because there was a "pattern of violations," it said it planned to withhold federal funds equal to the amount of the illegal bus services.

The full extent of the illegal charters is not yet clear but the general manager of Greater Lafayette Public Transportation Corp. admitted in a newspaper interview last June his agency earned $87,000 from "subcontracted" charters.

The ruling is one of the boldest yet by a regional FTA administrator and legal counsel because it probed both the scope and details of the sham dealings by the transit agency and the private operators, revealing how documents were doctored to hide the shady activities.

In many cases, Greater Lafayette Public Transportation falsified private operators' requests for buses, claiming they needed wheelchair-accessible vehicles when they did not.

The FTA referred the fraud allegations to the U.S. Department of Transportation Office of Inspector General, which investigated and referred them back to the FTA.

In the past, the FTA has not initiated or pressed criminal charges against transit agency employees who engaged in such fraud in first-time cases.

Other violations, too

But the charter violations at Greater Lafayette Public Transportation were not limited to its slimy dealings with private operators. The FTA decision also noted how the transit agency issued deficient charter service notices and failed to follow proper procedures once the notices had been issued, and it provided illegal charter bus service to Purdue University.

The ruling was issued by FTA regional administrator Marisol Simon and her regional counsel, Nancy-Ellen Zusman, and stemmed from complaints filed by Imperial Travel Services, a Lafayette-based motorcoach operator.

Imperial has long suspected Greater Lafayette Public Transportation was engaging in illegal charter services but it wasn't until 18 months ago that it had amassed enough information to file a complaint with the FTA regional office in Chicago.

Subsequent to filing the complaint, Imperial learned from a variety of sources that the transit agencys illegal charter operations were far more extensive than initially believed and it was engaging in sham dealings with private operators Morgan Coaches and Cliff Hall Inc.

The FTA investigation determined Greater Lafayette Public Transportation was using Morgan Coaches and Cliff Hall Inc. as brokers. The arrangement was designed to look like a "subcontracting" deal whereby Greater Lafayette Public Transportation was providing charter service to customers and the transaction was passing through Morgan Coaches and Cliff Hall. Instead, the arrangement was a sham and a clear violation of federal charter rules, according to the FTA.

All sorts of charters

The variety of charters run by Greater Lafayette Public Transportation was astounding. The FTA decision cited evidence of such charters as weddings, special events, university functions, trips for private schools, YMCA outings, student shuttles, and others.

The FTA decision also knocked Greater Lafayette Public Transportation's annual charter service notices up one side and down the other, saying they were suspect from the get-go.

And the FTA said the charter service Greater Lafayette Public Transportation provided to Purdue University violated federal regulations because it did not meet any of the charter rules' exceptions.

For its part, Greater Lafayette Public Transportation claims its services are not charters. In their decision, FTA officials Simon and Zusman shot down every bit of the reasoning, logic and excuses put forth by the transit agency.

One of Greater Lafayette Public Transportation's defenses was that everything it did was okay because recent FTA Triennial Reviews of the agency did not find any charter violations.

Many public transit agencies have tried that excuse in the past when wrongdoing has been uncovered. Simon and Zusman weren't buying, however. "The (Triennial Review) process is an overview of a (transit agency's) operations; it's not a detailed examination of day-to-day operations," the regional officials wrote.

Nevertheless, Greater Lafayette Public Transportation has filed an appeal of the FTA regional decision and, in the process, set in motion the "burning of more taxpayer money," said James Calloway, president of Imperial Travel Services.