Sunday, 28 March 2010

Message to Kristan Cole: It's time to release the records of Sarah Palin's Alaska Fund Trust! - UPDATE!

John McCain recently had a great idea!

"When will Hayworth release the names of his Secret Abramoff Trust Fund donors?"

Well, we don't know the answer either, and we don't really care who has donated to teabagger Hayworth.

But John inspired us and we thought that we at Palingates should have a clock, too!

Why? Because Sarah Palin's best friend Kristan Cheryl Cole is now 249 days overdue with disclosing "the contributions as well as the amounts and categories of expenses" of the "Alaska Fund Trust", Sarah's "legal defense fund". Kristan Cole is the trustee of this fund, and she is obliged to make the disclosure on a quarterly basis, according to the Trust Agreement -from the FAQ:

"8. Will there be any disclosure of contributions and expenses?

Yes. The Trustee will disclose on a quarterly basis the contributions as well as categories of expenses with amounts."

The Alaska Fund Trust was set up on April 22, 2009. The first report was therefore due on July 23, 2009. That's when we start our sweet clock:

Coincidentally, Kristan Cole made a public statement on July 22, 2009 - but this statement had nothing to do with her obligation to release the quarterly report.

Kristan Cole was forced to speak in public after the report of the attorney Thomas Daniel was leaked to the media. He was the investigator for the Alaska Personnel Board during the investigation of Kim Chatman's ethics complaint. Kristan Cole denied that Palin was "involved" in the Alaska Trust Fund. Sure! I think we believe in the Easter bunny as well! Back in July 2009, Mudflats published an excellent article questioning these statements of Kristan Cole.

Investigator Daniel reported that there is "probable cause to believe Palin used or attempted to use her official position for personal gain because she authorized the creation of the trust as the "official" legal defense fund." Download Daniel's original report HERE.

Since then - silence!

However, it's worth to take a closer look at the Alaska Trust Fund again.

It has been noted before that Sarah's practical "Legal Defense Fund" is in fact nothing more than a handy slush-fund for her and her family. The "Trust Agreement" leaves no open questions in this respect:

"3. Rights of Withdrawal

a) Each of the beneficiaries of this trust, shall, in each calendar year, have an absolute and unrestricted power to withdraw from this Trust up to the lesser of the total additions made to this Trust during each calendar year or an amount in cash or other property (including the cash value of life insurance policies, if no other cash or property is available) equal the lesser of the total additions made to this Trust during each calendar year, divided equally among such beneficiaries, or an amount in cash or other property (including the cash value of life insurance policies, if no other cash or property is available) equal to the maximum amount which qualifies for the Federal Gift Tax exclusion allowed by Section 2503(b) of the Code (currently $13,000 per donor, but such amount shall be adjusted to provide the maximum amount excludable) presuming that a donor's spouse, if any, has consented to treat any such eligible gifts as being made one-half by such donor and one-half by such donor's spouse. The holder(s) of such power are hereinafter referred to as "Donee". Except as otherwise provided herein, said power of withdrawal shall not be cumulative from year to year, must be exercised separately for each calendar year in which any such addition or additions are made, and shall be exercisable only by written notice to Trustee of the amount Donee wishes to withdraw, but no purpose for said withdrawal need be shown.

4. Beneficiary.

The beneficiaries of this Trust shall be SARAH PALIN. In addition, the class of potential beneficiaries shall include any "Covered Individual. For purposes hereof, a "Covered Individual shall be any other person determined by the Trustee, in the Trustee's sole and absolute discretion, to (i) hold a "covered staff' position within SARAH PALIN's administration and/or an employee in the office of the Governor of the State of Alaska; and (ii) hold a covered relationship with SARAH PALIN, including without limitation, a family member, such as a parent, spouse, child, grandchild, sibling and other close family relationship. Notwithstanding anything contained herein to the contrary, in no event shall anyone other than the Trustee exercise control over the Trust property and, in no event shall any beneficiary receive tangible or intangible benefit from the Trust other than such benefit that is incident to or may have arisen out of the defraying, payment, or satisfaction of expenses as provided herein."

So: Sarah's whole family and other people can be granted to right to withdraw money - and "no purpose for the withdrawal need to be shown". How useful! A grifters dream. Regina published a detailed article about this topic on Palingates in July 2009 and about possible criminal consequences, which is worth to be revisited. Back then, Regina came to the conclusion:

"The website soliciting donations states that the money raised will be used only to pay certain legal expenses. The agreement says no such thing. The website states the money cannot be used for personal purposes. The agreement contains a clause that says otherwise."

So where are the quarterly reports? Kristan Cole doesn't need the permission of anybody else to release the reports, the "Trust Agreement" is clear in this respect:

"The Trustee is authorized and directed to release the amounts and categories of expenditures for the benefit of any beneficiary hereunder and the public on a quarterly basis."

Kristan Cheryl Cole: What are you waiting for?

Also: What happened to Kim Chatman's ethics complaint? Since July 2009, the public has heard nothing with regard to the outcome of the ethics complaint, despite the grave concerns of investigator Thomas Daniel. Do we need another clock?

Investigator Thomas Daniel expressed grave concerns in his report about the choice of Kristan Cole to become the Trustee:

Alaska Fund Trust - Daniel report screenshot Kristan Cole


In addition, something else caught our eye.

In FAQ of the Trust, we also read:

"10. Where does the unspent money go?

Once the purposes of the Trust no longer exist, the Trustee, in her sole discretion, will donate unspent funds to qualified 501 (c)(3) organizations."

So, we asked ourselves: What exactly is a "501(c)(3) organization"?

Wikipedia knows - the general definition:

"Colloquially, a 501(c) organization or simply "a 501(c)" is a tax-exempt, nonprofit corporation or association. Section 501(c) of the United States Internal Revenue Code (26 U.S.C. § 501(c)), provides that 26 types of nonprofit organizations are exempt from some federal income taxes. Sections 503 through 505 set out the requirements for attaining such exemptions. Many states refer to Section 501(c) for definitions of organizations exempt from state taxation as well."

501(c)(3) in particular means: "Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations"

We found this extremely interesting - and I will tell you why: We recently learned from a reliable source in Alaska that the Palins set up an educational fund for Tripp, and they are directing some of their income to this fund - for example the $ 100,000 that Bristol received for her cover story in "In Touch" magazine! Our information is that this fund is supposed to pay Tripp's college/university expenses in the future.

Bristol Palin "In Touch Weekly" cover story

So - can it be that some of the money of the Alaskan Fund Trust will eventually go in the trust for Tripp or in similar channels that the Palins have created? After all, they are very creative regarding their money affairs, with the invaluable assistance of Sarah's busy lawyer Thomas Van Flein, who is the "registered agent" of Sarah's mystery company "Pie Spy" as well as of Bristol's mystery company "BSMP".

EDIT: We just learned that 501(c)(3) can only benefit an organization, therefore the theory that it could benefit Tripp's educational fund is apparently not valid. Many thanks to our reader "AuntieRuth"!

Our second theory is, by the way, that Sarah Palin will eventually set up her own charitable organization which will then receive the money. ;-)

Kristan Cole, publish the reports! After all, you have nothing to hide, right?



Our reader "mxm" has left a very interesting comment, which I would like to add to the post for the discussion. I would also like to point out that the Alaska Trust Fund is still accepting donations via PayPal (some of our readers made test donations today via PayPal - it worked!). Due to the lack of information and disclosure, we can only speculate what the current situation is with the Alaska Fund Trust. However, we do have Kristan Cole's own statement from July 22, 2009, in which she says:

"I am here to address the unusual letter that was leaked yesterday, the contents of which are unprecedented in the history of our country, suggesting that a legal defense fund could somehow be unethical. This is particularly notable, and concerning, in light of the fact that the Trust, on my instructions, has not paid even one penny to Gov. Palin or her lawyers. I issued that instruction because I was aware the Board was reviewing this matter."

Here is the comment by "mxm":

Kristan Cole is the sole Trustee, and as such she made commitments to the donors to provide quarterly reports. Anything related to trust fund use is under the sole discretion of Trustee Cole. As she has not released any reports in the nearly 12 month duration of the the trust, one has to search out sources of information related to the AFT cash flow. This is what I have found, 2 critical pieces of information:

(1) The bots conducted a webathon for the fund, and reported raising in excess of $115,000.

"You have already achieved 23% of our goal to retire $500,000 in legal bills that Governor Palin is held personally responsible ..."

(2) SarahPAC paid some interesting legal invoices.

The Alaska legal firm Clapp, Peterson, Van Flein, Tiemessen submitted 3 invoices to the PAC.

Legal Services, Political Services, June

Legal Services, September

Legal Services November

Attorneys with Clapp, Peterson, Van Flein, and Tiemessen must have a greater degree of PAC and political experience than the consultants and specialized attorneys Sarah Palin paid to advise her PAC. The firm was paid $65,000 in December 2009.

Diane Cooley provided legal services to the PAC and was paid $4,060.

Baker & Hostetler provided legal services to the PAC and was paid $13,500.

From these two facts, I surmise that the AFT is either frozen or broke. If frozen, as a result of the yet unresolved ethics complaint, then it may hold at least $115,000. If the AFT is broke, and it was used to pay Palin's self-claimed legal bills of $500,000, then the PAC was tapped to pay some more personal legal bills.



In this post, we didn't mention so far that there were actually two ethics complaints filed against Sarah Palin because of the Alaska Fund Trust. It was not only Kim Chatman who filed a complaint, but Andree McLeod filed a second complaint in December 2009. You can download the full text of Andree's complaint HERE.

The outcome of the second complaint is unknown as well - nobody knows what's going on. No information has been given to the public.

Although Sarah Palin has "left the building", her hand-picked appointments like her chief of staff, Attorney General, and every commissioner have not. They are still playing fast and loose with the Alaska Executive Branch Ethics Act, and continue to protect and defend Palin’s political interests when it comes to complaints regarding her "legal defense fund".

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