The Comings And Goings Of The Private-Jet-Set

Taking investigative journalism where it has never been before, The Wall Street Journal reported this weekend that some very rich people have private jets, and they use them to go places.

As the article in question reported, the movements of private jets (and nearly all other U.S. aircraft) are recorded through the air traffic control system. While this data generally is not accessible to the public, the newspaper obtained access via a Freedom of Information Act request. It is now offering an interactive database of non-commercial jet traffic between 2007 and 2010, including, in many cases, the name of the operator or owner of the jet.

Reporters Mark Maremont and Tom McGinty reviewed a variety of data about flight destinations and high-profile fliers such as Bill Gates. Their story speculates that many of these flights served recreational purposes, opening with an anecdote about Google’s founders flying to see last summer’s solar eclipse in the South Pacific.

Whether this is news is debatable, but it certainly isn’t new. Perhaps the two journalists are not old enough to remember what Carly Simon sang in her 1972 hit “You’re So Vain” about a former lover: “Then you flew your Learjet to Nova Scotia to see the total eclipse of the sun.”

We all like to go places. People who have a lot of money can get there faster and more comfortably than the rest of us. And we all use public facilities – highways, airports, air traffic control – to get where we need to go. Should our comings and goings therefore be matters of public record? If so, why would that principle not apply to everyone, rather than just the people who fly on jet-powered aircraft from general aviation terminals?

A client of mine with a recognizable last name went trekking some years ago in the Andes. I was appalled that she was traveling under her own name. Another client, a highly successful businessman, was interviewed by a major newspaper about his hobby of racing very expensive sports cars on the weekend. He had a teenager living at home at the time. The attention did not thrill me.

I am not alone in feeling this way. Aviation security consultant John L. Sullivan told The Journal that terrorists or criminals can use real-time data to set up an ambush for a high-profile traveler. Even beyond security, there are valid reasons, both business and personal, not to want one’s movements to be subject to public disclosure. A top executive’s arrival in the headquarters city of an acquisition target could, for example, trigger speculative trading in the target’s stock.

The National Business Aviation Association, the organization responsible for implementing the program that has thus far allowed private jet owners to remain anonymous when desired, faces a proposed rule change from the Federal Aviation Administration that would restrict privacy requests to only those flights with a “Valid Security Concern.” If approved, this change would make all flights without such security concerns available to the public, both in real-time and historically. The theory seems to be that without the threat of bodily harm or its equivalent, there is no reason that private travel data should not be available to everyone.

Why stop there, though? If American citizens’ movements should be public when monitored through government agencies, why air traffic specifically? Why shouldn’t the government publish data on our cars, registered by license plate, every time we pass through a toll barrier or when we are captured by street corner video cameras? We’re using public roads and infrastructure, and are subject to traffic laws. That information exists already, should we make the argument to access it. I do not see why the principles governing its disclosure would be any different than that for private flight data.

Many Americans find the increasingly public nature of life unnerving. Questions of driver privacy have predictably emerged as automotive black boxes have become more common, and various technologies have become more integrated. Google is moving toward a partnership with Ford that could upload a vehicle’s driving history to help its GPS predict a route. If these relatively controllable advances can make drivers question how much privacy they still have, imagine having your last four years of automotive travel accessible to anyone who cares to look.

Do Americans expect their use of public highways and airports to be a matter of personal privacy? Should they? Or is a modicum of privacy the right of everyone except the very rich?

The usual object of investigative reporting is to reveal something secret that is either a breach of trust or a matter of public importance. I am not sure how the personal movements of the owners of personal aircraft fall into either of these categories. I emailed the reporters to see if they could explain their reasoning but have not received a response thus far.

I believe in open government and accessible public records. If we conclude that travel on the public infrastructure is, indeed, a public matter, I can live with it. If you want to search my electronic toll records to see when I drive into Miami or Manhattan, be my guest. But before we open up some of these records, let’s see how everyone feels if we all have to play by the same rules.

About Larry M. Elkin 525 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

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