Bank’s Troubles Leave Navy Workers Without Pay

The problems of a Washington, D.C., bank have reached across the country to affect 17 Navy contract workers in San Diego who weren’t paid in December and have little hope of receiving a paycheck soon.

Air Space Technology of Salt Lake City holds a $16-million contract to maintain and operate Navy communications stations at Chollas Heights in San Diego, Guam and Hawaii.

The company has about $50 million in military and Federal Aviation Administration contracts to operate and maintain government communication facilities throughout the United States and in the Pacific Ocean, employing about 300 workers, including 17 in San Diego.

Fred Lindsay, the company’s chief operating officer, said the company’s problems began in November when Sovran Bank, D.C. National was sold to a Delaware bank.

Although Air Space negotiated the contracts, they were assigned to Sovran, which held a $2-million line of credit for the company, Lindsay said. Since Nov. 15, the bank’s new owners have been using government payments on the contracts to pay off Air Space’s line of credit, Lindsay said.

“When the checks come in, they just cash the checks. It’s very frustrating. It’s one thing not to have the money, but another to have the money and not be able to get to it,” Lindsay said. “. . . I’ve got people who need to get paid. I’m in the same situation. I haven’t been paid either,” he said.

According to Lindsay, company officials went to federal court in Salt Lake City on Tuesday in an unsuccessful attempt to persuade a judge to order Sovran to free Air Space’s assets so employees could be paid.

However, the judge refused to release the assets until Air Space officials prove that the company has enough assets to cover its debt to Sovran.

“We’re trying to get an infusion of cash or real estate by Thursday to prove to the judge that we have enough assets to pay these (bank) people,” Lindsay said.

Sovran officials in Washington could not be reached for comment Tuesday.

Meanwhile, Lindsay said the company has turned to the U.S. Department of Labor for help. He said Labor Department officials are investigating to see if the government checks can be sent to a Labor Department account instead of the bank.

“The plan is for the department to use the checks to pay the employees first, and then turn the remaining funds over to Sovran,” Lindsay said.

A San Diego employee of Air Space, who requested anonymity, said employees received their last paycheck Nov. 22. The company’s Dec. 6 checks bounced, and no paychecks have been issued since then, said the employee. Local employees, who are mostly retired Navy personnel, are represented by the Communication Workers of America, Local 9509.

“There was no money for Christmas for some of us. Some people would like to quit, but you can’t collect unemployment payments if you quit,” said the employee.

Local Navy officials said they were not aware of Air Space’s financial problems but stressed that the communication facilities are still operating. The sites are manned 24 hours a day, seven days a week.

Lindsay said the Navy sites maintained by the company handle coded communications between land and Navy ships at sea.