DENVER -- City auditors are accusing Denver International Airport of violating state law by giving airlines $10.7 million in credits last year.

The bulk of the money went to major DIA tenant United Airlines, which received $5.2 million. Frontier, SkyWest, Delta and American Airlines were among the top five recipients of credit funded by DIA's state fuel tax money.

At a Thursday hearing, City Audit Committee members pressed DIA managers to get the money back and criticized their failure to document how airlines spent the millions.

"At a time when DIA is in need of funds to do ongoing maintenance or make necessary improvements to the airport we cannot afford to simply give this money away," City Auditor Dennis Gallagher said.

Audit Committee members agreed.

"I think you're operating pretty loose out there in terms of documentation of millions of expenditures," said committee member Timothy O'Brien, a former state auditor.

"I'm kind of concerned about the whole operation out there. And this isn't the first time that we've had this kind of report in front of us," O'Brien added. He was referring to past subsidies to Hertz rental car and Lufthansa Airlines.

DIA managers and the airport's city attorney said they don't consider the money an illegal subsidy to airlines, because they didn't "give" carriers money. Instead airlines were allowed to use "credit memos" to reduce their landing fees and facility rental bills at DIA.

"We did not give them money. We gave them a credit. That's a key distinction," DIA Deputy Manager Patrick Heck told the committee.

"I think we're parsing words," said Committee Member Jeff Hart. "That (DIA credit) frees up other airline money to be used however they choose. This seems to be a subsidy to me."

Heck did agree that documentation of how such funds are spent "needs to be beefed up. We have to have a better audit trail of where we spent the money."

State law says that the fuel tax money can be used to benefit the "state aviation system." This includes allowing airports to use the money to pay for airfield expansion, access roads, runway construction and safety equipment.

But the law warns that "subsidization of airlines is expressly prohibited as an aviation purpose except for the promotion and marketing of air service at airport facilities."

DIA officials note that an informal email opinion from the State Attorney General's Office stated: "So long as the monies were not provided directly to airlines it does not appear that the use of monies from the (fuel tax) fund to offset airport fees constitute a subsidy."

"We were satisfied that these credit memos issued to the airlines do not constitute subsidies within the meaning of this particular state statue," said Assistant City Attorney Helen Raabe, who represents the airport.

But committee members weren't buying it. They want a formal opinion from the attorney general on the legality of giving airlines millions in credit.

“The average citizen is tired of seeing what they believe to be a double standard: Wall Street gets bailed out but homeowners in foreclosure are losing their jobs and their homes; the auto industry gets bailed out, and now they see big airlines getting bailed out with subsidies,” Gallagher added. "Citizens don’t like it, and neither do I."

But a DIA spokesman said the airport's practice of providing up to $40 million annually in revenue-sharing with airlines that have long-term leases helps DIA stay competive, and keeps airlines' costs and airfares low.

"Southwest is a perfect example of why it's important for us to keep those costs low," said DIA spokesman Jeff Green. Southwest pulled out of Denver's old Stapleton Airport and didn't return to DIA until 20 years later in 2006.

"They decided it was good to operate here. They're growing like gang-busters and it's created jobs and it's keeping airfares low and it's bringing new sales revenue into the city," Green said.