Sarah Palin's Dairygate is back in the news

The investigation into the Dairygate shenanigans made the news a couple of days ago. One of the people at the centre of the investigation drew attention to some financial irregularities:

[Kay] Schaugaard, who hasn’t bought creamery milk since she was ordered to leave the premises Dec. 5, 2008, said Monday she strongly suspects her termination is directly related to her allegations that company executives misspent federal funds.

“Some of the financial transactions that I was in the process of researching were extremely suspicious,” Schaugaard said Monday. “I couldn’t track where the grant money had been deposited. Kyle Beus and Karen Olson would not give me the data I needed or the answers I needed to make sense of their finances.”

I quoted Andrew Halcro in a previous post:

There is no question that the Valley Dairy is being run by people with a track record of defaulting on government loans. Between Kyle Beus and Karen Olson, they've defaulted on $4 million in loans.

This past fall, after discovering that Beus had made a draw of $15,000 from the dairy's account, Olson was heard by her former office administrator saying, "we're all f--ked...probably doing some jail time," as she paced the floor.

According to the former Milk Room Supervisor, the dairy has continued to dump milk in their septic system as well as spilling milk behind the dairy, after promising DEC that it would be cleaned up before it drains into the Wasilla Creek.

Beus has been seen by employees making cash sales to customers in the ice cream room and pocketing the money, as well as paying employees in cash.

If Karen Olson was pacing the floor over $15,000, I can imagine what she must be like today, as the the figure has risen to over $600,000!

Did the private sector people pocket the money? Was it used to say thank you to the people who provided them with such a wonderful business opportunity?

Sarah Palin, in her quitting speech on the shores of lake Wasilla, proudly announced:

"We took government out of the dairy business and put it back into private-sector hands - where it should be."

By March 2009, this fantastic business had received:

$600,000 - August 2007
$200,000 - December 2007
$624,000 - March 2008 (this money was juicy pork from uncle Ted Stevens)
$630,000 - September/ November 2008
$200,000 - March 2009

Since then, they have borrowed more money from the Agriculture Revolving Loan Fund, which they used to pay previous loans to clear the way so they could apply for further loans. It makes sense, no? They take the revolving part very seriously.

These loans are facilitated by a bunch of Sarah Palin's cronies, appointed when she sacked the previous Board of Agriculture. Former beauty queen Kristan Cole and cow lover Franci Havemeister are among them.

Ms Schaugaard gives us some hope by referring to an investigation by the FBI:

Schaugaard said Monday the Federal Bureau of Investigation is conducting an investigation into the alleged funds misuse. When contacted earlier this year, the FBI would neither confirm nor deny such an investigation exists, as is its policy.

Let's keep our fingers crossed that this investigation is actually happening.

I just noticed something funny in the passage about Karen Olson above:

According to the former Milk Room Supervisor, the dairy has continued to dump milk in their septic system as well as spilling milk behind the dairy.

This is from a recent post:

...the BAC is also considering loaning these folks even more money to facilitate the transition. According to news reports, the Creamery is asking for an additional $300,000 from the state for moving expenses and needed upgrades to the property.

According to a recent article in the Mat Su-Valley Frontiersman, Matanuska Creamery CEO Karen Olson said the business needs to leave its current location because high rent, lack of public water and sewer and other issues are hurting the business.

It looks like they clogged the septic system themselves and are now asking for $300,000 to help them relocate to Palmer. This woman is something else and it doesn't surprise me that Sarah Palin thought she was a fitting CEO for the new business, as did the rest of the cronies board.

Dairygate is like a major soap opera and it's very difficult to keep track of all the twists and turns, but if the Feds are on the case, it's bound to get very exciting indeed!

Follow the money, as we say so often. I do hope it leads directly to Sarah Palin and/or her cronies...

Recent bits and pieces about Sarah Palin

Sarah Palin has been relatively quiet and not seen very much seen since the very hectic weekend when she attended media parties, chose life and extracted money from a fledgling special needs organization. She attended all those weekend's events with Todd Todd Todd, her new handy prop.

Meanwhile, a book looking into her lies was published, an article by Joshua Green made some impact, Trump and Huckabee dropped out of the 2012 presidential race and Sarah Palin is making renewed efforts to fleece her followers.

Sarah PAC sending direct mail on 2012

Former Alaska governor Sarah Palin is sending direct mail solicitations nationwide to raise money for her political action committee titled “2012 Can’t Come Fast Enough,” a move that is certain to re-stoke talk of whether she will run for the presidential nomination.

“Taking back control of the House last year was only the first step,” Palin writes in the mailer. “Now you and I must fix our eyes on 2012. Our goal is to take back the White House and the Senate.”


The bloggers have continued to focus on her less than savoury past and tall stories.

The article by Joshua Green, "The Tragedy of Sarah Palin," was brilliantly debunked by Jeanne Devon and highlighted by Andrew Sullivan.

The Real Tragedy of Sarah Palin

The real question he’s asking is – What could Palin have achieved if she had a different personality, if she were not a political opportunist and had actual integrity, if she were qualified, if she knew her stuff, if she were an effective leader, if she knew how to manage people, if she were intellectually curious, if she didn’t quit? The question Green asks is really what Sarah Palin might have achieved if she hadn’t been Sarah Palin. And it’s why “What went wrong?” is a false question. “What went wrong” was Palin being who she is – consistently and predictably opportunistic. There are times when opportunity comes from doing the right thing, but there are times when opportunity comes from doing the wrong thing. It doesn’t mean that Palin changed, it just means she was true to what drives her always – her own self-interest.


Laura Novak had another conversation with Brad Scharlott, this time taking a closer look at the Sponge Bob Square Pants baby bump Sarah Palin sported in a documentary filmed by Elan Frank.



Sponge Sarah Square Pillow

Brad: I uniformly lightened the picture – I did not move any pixels nor did I give isolated areas special treatment. So the relative flatness you perceive in the stomach area is an accurate depiction of reality – her belly really does look more like a first-base bag than a basketball.

[Laura is working on another good post, where a doctor is going to give an opinion about certain photos...]

Andrew Halcro returned to one of my favourite themes: Dairygate. He discusses the problems faced by the city of Palmer if Matanuska Creamery moves to their city centre, but recaps some of the financial details of this sorry saga and we can clearly see that something is amiss...

Palmer's Problem: Same spill, closer to home

Almost three years ago the Matanuska Creamery opened its doors on the strength of federal government handouts and loans from the state's agriculture loan fund. Over the the same amount of time, the Creamery has repeatedly returned to the Board of Agriculture and Conservation (BAC) for loan restructuring and payment deferrals on almost $650,000 because they have failed to turn a profit.

Today, with the Creamery citing high operating costs and the need to move from its existing facility in Wasilla, the BAC is on the verge of leasing a valuable piece of property in the heart of Palmer to the Matanuska Creamery for $1 per year.

In addition to the low cost lease, the BAC is also considering loaning these folks even more money to facilitate the transition. According to news reports, the Creamery is asking for an additional $300,000 from the state for moving expenses and needed upgrades to the property.

These additional funds would drive the current outstanding loan balance owed by the Creamery to almost one million dollars. All of this to a private enterprise who as recently as February was six months behind on their current loan payments.

According to a recent article in the Mat Su-Valley Frontiersman, Matanuska Creamery CEO Karen Olson said the business needs to leave its current location because high rent, lack of public water and sewer and other issues are hurting the business.

[Question: Didn't a certain mayor improve the sewer system of Wasilla?]

The bail-out initiated by fiscal conservative Sarah Palin is set to continue. She destroyed the former CEO Joe Van Treeck, who ran the state owned dairy for 23 years faultlessly, to put it in the private, greedy hands of the utterly incompetent Karen Olson. Sarah also fired the entire agriculture board and appointed a bunch of her cronies from the Valley, who, coincidentally, oversee all these endless, no collateral loans that are never paid back.

Halcro asks:

Does Olson honestly believe we forgot about Kristen Cole, Ralph Carney and the cast of characters who after taking charge of Mat Maid lost more money in one month than in the dairy's previous 23 year history?

And remember, in the 23 year history of Matanuska Maid, never once did it receive a state handout. Contrast that to the Matanuska Creamery which can't keep it's doors open without continued state assistance.

In addition, the Creamery benefited from the closing of Mat Maid because it was the beneficiary of the closed dairy's milk producing equipment for almost nothing. Questions still remain today about the status of the lease agreement and the subsequent payments due to the state.

Dairygate stinks more than the tainted cheese this hopeless creamery produced a while ago...

*****

The governor's shoes were too big for Sarah Palin and now she's considering filling the even bigger, presidential shoes. It's a recipe for disaster.

(Please click on image
to see it in full glory)

Dairygate refreshed

I promised to review some of original gates involving Sarah Palin and put them into the context of more recent events. Only her record as a politician would produce gates as such. The suffix entered the English language because the first of all gates, Watergate, involved a politician, not a celebrity. Celebrities may produce scandals, not gates and are not accountable to voters. That's why we can't have a Twittergate or a Facebookgate. Sarah Palin doesn't hold any political office at the moment. She was chosen by half a dozen people to do what she's doing now as a celebrity. But she was elected by the people of Alaska to be their governor and will remain accountable to them for a few more months. Let's take a trip down memory lane and shine a fresh light on some of her deeds.

Dairygate

"We took government out of the dairy business and put it back into private-sector hands - where it should be." From Sarah Palin's resignation speech, July 3, 2009.

Since her resignation, Sarah Palin has criticized every effort president Obama has made to get the economy back on track and preserve jobs in some important industries. Sarah Palin doesn't like goverment and doesn't like bailouts.

Matanuska Maid was a state run dairy. It was failing and the management board at the time had voted to close it down. Enter the governor, our very own Sarah Palin, to save the day. In a series of ambushes and staged media opportunities, she destroyed the reputation of the people who had been running the dairy for many years, fired all the members of the Board of Agriculture and Conservation (BAC) and replaced them with old friends from high school (including a woman whose sole qualification for the job was having a liking for cows when she was a child). The new board, chaired by Kristan Cole (Sarah Palin's legal fund sole trustee), immediately voted themselves as the operating board for the dairy business, eliminating a whole tier in the management chain. Money was pumped into the new venture in the form of several bailouts. After staging a dodgy auction to make some capital from the old equipment, the dairy turned private, now in the hands of assorted incompetent people who favoured a handful on dairy farmers from the Valley (one of them related to a member of the Board).

The shiny new private dairy couldn't make money and kept applying for some more, in the form of loans from the Agriculture Revolving Loan Fund. These loans are considered and approved by that lovely bunch of friends of the new owners. It couldn't be a more comfortable arragement for them. Some of the loans were taken without any collateral and some were loans to pay for earlier loans. One of the new managers was caught doing some dodgy cash deals and a nasty smell of fraud lingered around the place.

When searching for more recent news about Matanuska Creamery, I found two articles from the local the media. ADN and The Mat-Su Frontiersman interviewed Karen Olson, the CEO of the company, and the articles read as free PR for the creamery, with Olson waxing lyrical about their success. It seems to have been a trend throughout the fiasco. While we read Andrew Halcro's well documented articles about all the wrongdoings of these enterprising people and their inability to make ends meet, the media ran their success stories, marvelling at them for helping Alaskan children drink real Alaskan milk produced by real Alaskan cows from the Valley!

Back to Sarah Palin for a recap. She took a failing but honestly run state business and gave it to a bunch of incompetent people who happened to be her friends from high school or from the Valley. State and Federal money was poured into the new venture and it still failed to show any results despite obtaining generous (but somewhat suspect) loans on several occasions. Money and equipment were used in many fiddles and things were not properly accounted for. Dare I say that Sarah Palin made a bad situation worse for the state but a lot better for her cronies? Some fiscal conservative, ethical governor!

I'd like to make a parallel between Sarah Palin's actions to save her local dairy and Obama's bailout of the auto industry. I didn't read or hear anything about Obama replacing the management of any of the car factories with his high school buddies or appointing a director whose only qualification for the job was a passion for his Hot Wheels when he was a little boy...


Who would you rather have making decisions or giving opinions about the economy, the American industry and other equally important issues?

***

Previous posts about Dairygate, containing full details about all the people involved in the fiasco, their shady dealings and very useful links may be read HERE.

Should you wish to concentrate on different details of the case, bit by bit, instead of reading all four Dairygate posts at once, here's a guide to the contents of each post in the series:

Original Dairygate post: First overview.

First recap: Strange cash deals going on.

Second recap: The loans.

Third recap: Dodgy auctions, the loans and full cast of characters.

Andrew Halcro wrote extensively about this topic. The results of the search for Matanuska Creamery may be found HERE and the posts should help give you a good idea about the extent of the corruption going on over the years.

If you'd like to read the e-mails from the Crivella West database, click on THIS LINK, then click on search and enter the terms "dairy" and "mat-maid" in the search box. The database is still live and working, but searching it is not terribly intuitive.

Sarah Palin's Dairygate : Kristan Cole's Mat-Maid Christmas giveaway - UPDATE

Dairygate is a very complicated topic. When I think I have finally made sense of the whole mess and have the complete picture, another piece of the puzzle appears from somewhere. I may not have the complete picture yet, but each time I add another piece, it becomes clearer... and uglier.

Thanks to our resourceful readers, a pdf of the minutes of one of the Board of Agriculture (BAC) and Conservation was posted, among other useful information, drawing my attention to something I had not yet realized: Sarah Palin's pal Kristan Cole and her gang call the shots in approving the loans made by the Agriculture Revolving Loan Fund.

It's a very neat arrangement. Kristan Cole, Franci Havemeister, Ray Nix and a few other cronies consider and approve loans made by the ARLF, including those to the new Matanuska Creamery, owned by Valley Dairy Inc., headed by Karen Olson, Kyle Beus and Bob Wells.

Kristan Cole is assisted on the legal front by an Anchorage attorney called Jon Givens who, by sheer coincidence, is the attorney for Sarah Palin's "legal" fund, The Alaska Fund Trust. Kristan Cole is the sole trustee of the fund and has not produced a single quarterly report as promised on the AFT's website.

Kristan Cole with Jon Givens

I will attempt to put Dairygate in a nutshell, including information contained in older posts, so anybody not familiar with the story can have a quick overview without the need to click on several different links.

The Alaska Creamery Board, a sub-committee of the BAC, which oversaw the dairy, then called Matanuska Maid Dairy (Mat-Maid for short), met in May and discussed privatizing or possibly closing the dairy. It subsequently voted to close it, and on June 13 the Board rejected Sarah Palin's public request that it keep the dairy open, saying it stood by its decision to close the dairy plant as of July 7.

Sarah Palin made a big show regarding a visit to the Mat-Maid plant in Anchorage on June 13, knowing perfectly well that the management was holding a meeting in downtown Anchorage to decide the fate of the state run dairy business. Meg Stapleton was at the Westmark Hotel , monitoring the movements of the CEO, Mr Joe Van Treeck. Without his presence at Mat-Maid, the visit could not go ahead. Two of Todd Palin's cousins, Nick and Roger Voorhees, kept Meg informed about how things were developing at the dairy, where Sarah Palin and her entourage were huffing and puffing for the benefit of every TV camera in town. The media had been invited to cover the pre-planned non-event, known to just about everybody, except for the dairy's CEO. By the time Mr Van Treeck managed to leave the Westmark and headed to plant, about eight minutes away, the Palin circus had been tipped-off by Todd's cousins and left before Van Treeck could park his car upon his arrival at the dairy.

On June 18, Palin fired the entire membership of the BAC, and replaced them with an assortment of Mat-Su Valley residents, all without any experience in running a dairy, but with family or business connections with the Valley's milk producers, which then installed itself as the Creamery Board, removing a whole tier in the management chain.

The new management quickly announced profits of $60,000, showing how efficient they were in putting the business back in the black. In August, it was revealed that the dairy had in fact sustained record losses of $300,000.

On August 29, 2007, Palin announced that the business could not be made profitable and would be offered for sale. She said that the board could use $600,000 of state money to help with the transition to a private operator.

On December 7, with a required minimum bid of $3.35 million for the dairy, no bids were received and all dairy operations were scheduled to close later that month. Two of the Valley's dairy farmers came forward and offered to lease the equipment to start their own dairy and a further loan of $200,000 was made available to them, provided they started production at the now renamed Matanuska Creamery by the end of December. They only started operations in March 2008, but received the money anyway.

Matanuska Creamery is owned by one of the biggest milk farmers in the area, Kyle Beus, and Robert Wells, a Mat-Su Borough Assemblyman, who is also president of Alaska Farmers and Stockgrowers Inc. The CEO, Karen Olson, doubles as CFO, which enables her to write fat checks backed by several generous "loans" from the ARLF to herself...

Kristan Cole, forever helpful to her valley friends, offered them a nice Christmas present, worth close to $1,000,000!



Joey Austerman went to school with Sarah Palin. Donna was the Company Controller, second in command at the old Matanuska Maid, and they didn't want her to see what was going out of the door. The crates alone were worth $5 each and there were thousands of them. They wanted to appear to be thrifty by recycling the crates and yet they failed to turn a profit. This Christmas pillage happened before the equipment of the old Matanuska Maid was officially auctioned!

For the details of what exactly went missing in this "Christmas pillage", see the update 2 below!

On top of the two loans provided by the state, Ted Stevens arranged a $634,000 USDA grant for Beus and Wells' new venture, Matanuska Creamery, in March of 2008.

Between September and November 2008 Matanuska Creamery applied for a further loan from the state. After much wrangling over personal guarantees, which were removed in a meeting on November 21, the Board, which is comprised of Governor Palin's appointed friends and neighbours, ended up voting to give the Mat-Su Valley business a $630,000 loan. The BAC approved the unsecured operating loan in the full knowledge that the business did not have the cash flow to make the payments.

Matanuska Creamery didn't have a very good start. 30,000 pounds of cheese in their cold storage, which had already been sold in "cheese futures" deals without insurance, were found to be contaminated with e.coli, listeria and staph and had to be thrown away. Matanuska Creamery made a loss of $250,000.

These are some of the main characters in this farce:



Photo 1, Kristan Cole, chairwoman of the Board of Agriculture and chairwoman of the Creamery Corporation Board. Daughter of Cheryl Mosely convicted felon... caught embezzling over $700,000 from two trust funds in Canada and Iowa, Sole Trustee of the Alaska Fund Trust and best friend to Sarah Palin.

Photo 2, Franci Havemeister, Director of Agriculture, previous soccer mom, had a basket business and loved cows as a child. Her father-in-law is Bob Havemeister, who owns the largest dairy farm. Went to high school with Sarah and now makes $95,000 a year

Photo 3, Kyle Beus, co-owner of the new Matanuska Creamery, previous dairy farmer who defaulted on a $2,000,000 dairy loan with the state

Photo 4, Karen Olson, CEO and CFO, co-owner of Matanuska Creamery. Previous dairy farmer who also defaulted on a $2,000,000 dairy loan in the past. She said on KTVA that they are now selling all they produce, so if that is the case and they have not been able to pay the farmers all they are owed for the milk, how are things going to get any better?

Photo 5, Rob Wells, previous Director of Agriculture, currently wearing an ankle bracelet for hitting a young boy on a snow machine and leaving the scene of the accident. Was involved with cranking out 30,000 lbs of cheese that had listeria and e. coli.

The latest instalment in this saga is the approval of yet another loan from the ARLF for $200,000, which Ms Olson said is going to be used to repay a previous loan and the milk suppliers.

Andrew Halcro gives us an insight into their business practices:

There is no question that the Valley Dairy is being run by people with a track record of defaulting on government loans. Between Kyle Beus and Karen Olson, they've defaulted on $4 million in loans.

This past fall, after discovering that Beus had made a draw of $15,000 from the dairy's account, Olson was heard by her former office administrator saying, "we're all f--ked...probably doing some jail time," as she paced the floor.

According to the former Milk Room Supervisor, the dairy has continued to dump milk in their septic system as well as spilling milk behind the dairy, after promising DEC that it would be cleaned up before it drains into the Wasilla Creek.

Beus has been seen by employees making cash sales to customers in the ice cream room and pocketing the money, as well as paying employees in cash.

The ARLF page on the State of Alaska website has clear rules regarding their loans:



Let's have a look at the total received from the state so far:

$600,000 - August 2007
$200,000 - December 2007
$630,000 - September/ November 2008
$200,000 - March 2009

The initial $600,000 loan was very likely written off as a loss when the dairy was still run by the state, so we can't officially consider it when calculating whether they are over the limit. The latest loan does take them above the limit, but all they have to do is repay $30,000 and go on their merry way, producing sub-standard over-priced products that cause food poisoning, paying the farmers twice what their milk is worth, until they have an itch to apply for another loan from their chums at the ARLF, in an endless loop.

The rules regarding ARLF loans are clearly laid out here. Pay particular attention to item (f).



Whatever equipment escaped the Christmas pillage was leased to them for $1,900 a month. Halcro touches on how they met these payments:

After less than a year in business, the Valley Dairy has successfully produced 30,000 pounds of contaminated cheese, failed to pay lease and tax payments promptly, mishandled milk waste around the Wasilla Creek and obtained state loans through fraudulent information and insider dealings on behalf of the Director of Agriculture and the Chair of the Agriculture Board.

The people involved in this private enterprise obviously don't know the first thing about the dairy business. Despite the $2,264,000 poured into it, they still haven't got their act together. Their track record makes them much more suitable to run a laundry business.

Sarah Palin's proud announcement when she quit as governor puts the cherry on the cake:

"We took government out of the dairy business and put it back into private-sector hands - where it should be."

Look at her face after she finished her quitting speech:

Sarah Palin looks like the cat who got the cream...

+++

UPDATE:

We are grateful that our readers have posted so many additional investigative details in the comments and would like to encourage everyone to keep digging. However, today we can only add a short update. More will follow in due course.

We have created a compilation of links which are connected to Dairygate - you can download them HERE.

Alaska Dispatch has reported on this story.

Note: Although this post has some new revelations, the bulk of it is simply an easy to follow overview of Dairygate. It would have been impossible to write it without referring to Andrew Halcro's blog, where a vast number of well researched, all sourced posts can be found. To read a lot more about Dairygate, please search Mat-Maid on Andrew's blog and let your heads spin!

UPDATE 2:

As a nice way to close this post, I'm going to share a comment on Andrew Halcro's blog with you. Somebody had a fairly accurate idea of what Santa-Kristan Cole-Claus put under her valley friends' Christmas trees:

Why on the Division of Ag website is # 4 under "Mat Maid Disposal" been DEACTIVATED? It was the complete list of inventory. Why was that removed a week ago? They don't want anyone to know what is missing???

They can't have it both ways...either they are a State Agency or a Private Corp.......they need to pick....they go back and forth almost weekly.

Auctioneers should be interested to know that the homogenizer, pasteurizer, gallon filler, stainless steel tanks, 3,000 linear feet of stainless piping, 15,000 milk cases, forklifts, all laboratory equipment numerous trucks and trailers, all the cheese equipment are all gone. They will not be available for the auction. All this is in the hands of the new Valley Dairy in Wasilla.

No one was given the opportunity to bid on any of this. In three days flat it was all hacked out of Mat Maid and delivered to three private individuals, Kyle Beus and Karen Lee Olson (defunct dairy farmers) and Rob Wells.

Sarah Palin knows how to cover her tracks and always assigns other people to do the dirty work. But if we put the pressure on her school friends appointed to high positions in her administration, I wonder... would these people be prepared to serve time in other government institutions for her?

(Andrew Halcro's article "The Valley Dairy: Got Fraud?" also appeared on Alaska Free Press.)
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Sarah Palin's Dairygate - Business 101

Dairygate rears its head again...

As in all Dairygate things, it makes your head spin. The creamery, whatever they call themselves these days, have just received another loan of $200,000 from the state, which they're going to use to pay an older loan and the milk producers.

I don't have a head for business and my ideas may be naive, but the way I understand it, a business pays the suppliers with money classed as profits, no? If a business has to borrow money to get started, they invest it in the business, produce whatever their industry is about, sell their product, make some profit and pay their debts, be it loans or what they owe their suppliers.

Our Dairygate friends are in a different business. It appears to me that the only purpose of this industry is to raise money, then more money, and just in case they didn't raise enough of it, they ask for some more money.

They get their money from the Agriculture Revolving Loan Fund. It's revolving alright.

re·volv·ing (r-vlvng) adj.
1. Tending to revolve or happen repeatedly.
2. Available at regular intervals.

Here's a breakdown of all the money received by this thriving business so far:

$600,000 - August 2007
$200,000 - December 2007
$624,000 - March 2008 (this money was juicy pork from uncle Ted Stevens)
$630,000 - September/ November 2008
$200,000 - March 2009

Sarah Palin is very proud on her achievement in privatizing a failing state business, as she stated in her quitting speech:

"We took government out of the dairy business and put it back into private-sector hands - where it should be."

Yes, she put it right into the greedy hands of her cronies.



Please read the previous Dairygate posts. Two of them, written on 26 February and 18 July 2009 give the names of these highly competent business people and will help you understand the background to this sorry saga.

(H/T to so_many_unanswered_questions)
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$arah Palin's Dairygate revisited

$arah Palin said in her resignation speech:

"We took government out of the dairy business and put it back into private-sector hands - where it should be."

Some highlights from a long article by Andrew Halcro about Dairygate:

After less than a year in business, the Valley Dairy has successfully produced 30,000 pounds of contaminated cheese, failed to pay lease and tax payments promptly, mishandled milk waste around the Wasilla Creek and obtained state loans through fraudulent information and insider dealings on behalf of the Director of Agriculture and the Chair of the Agriculture Board.

The Valley Dairy operations
There is no question that the Valley Dairy is being run by people with a track record of defaulting on government loans. Between Kyle Beus and Karen Olson, they've defaulted on $4 million in loans.

This past fall, after discovering that Beus had made a draw of $15,000 from the dairy's account, Olson was heard by her former office administrator saying, "we're all F--ked...probably doing some jail time," as she paced the floor.

According to the former Milk Room Supervisor, the dairy has continued to dump milk in their septic system as well as spilling milk behind the dairy, after promising DEC that it would be cleaned up before it drains into the Wasilla Creek.

Beus has been seen by employees making cash sales to customers in the ice cream room and pocketing the money, as well as paying employees in cash.

In December, Office Administrator Kay Schaugaard was let go after voicing concerns about Olson's derogatory language concerning her religion. "We're not hiring any more f---ing Mormons," Olson said a number of times. After Schaugaard was let go she filed a complaint with the Human Rights Commission for wrongful termination.

On January 3, 2009 at 1:30, Amy Moore, the Valley Dairy's Milk Room Supervisor, told Beus that she had been contacted by the Human Rights Commission to testify in the case of Schaugaard. She told Beus that she was going to have to talk about the things that have been going on in the creamery, including the repeated derogatory comments by Karen Olson.

One hour later, Moore was handed a letter of termination by Olson.

Ironically, the Valley Dairy, which is a private dairy, has asked for more help from the state in three months than the state owned Matanuska Maid did in twenty three years.

If Governor Palin was at all honest about open and transparent government, she would have never appointed such an incestuous group of people to manage the purse strings of Alaska's agricultural community.

But then again what did we expect?

After falsely accusing the prior Matanuska Maid management of corruption and mismanagement in order to justify getting rid of them, is it a surprise that she has allowed her friends and neighbors to get fat off the government trough?


I have said in a previous post that Dairygate is an extremely complex affair. The snippets above simply provide some background to help put $arah Palin's statement into some kind of context.

Dairygate in a nutshell:

Early in June 2007, the board of Mat Maid met and decided to recommend the dairy ceased operating due to projected losses in excess of $2 million.

The Board of Agriculture and Conservation heeded the advice and passed it on to the governor.

$arah Palin disagreed and fired the entire board, replacing all members with unqualified friends and neighbours from the Valley, some with obvious conflict of interest, such as Franci Havemeister (More about her in Andrew Halcro's article). The new board, chaired by Kristan Cole (the legal fund trustee), immediately voted themselves as the operating board for the dairy business, eliminating a whole tier in the management chain.

After bail-outs, many shenanigans and heavy losses, the dairy closed down and the equipment put up for auction in December 2007. No bids were received. Matanuska Creamery offered to lease the equipment and opened for business in March 2008, headed by people known to have defaulted on previous loans.

More shenanigans ensued, further loans advanced, grants obtained, the losses continued and not a dime of the loans have been paid back.

"We took government out of the dairy business and put it back into private-sector hands - where it should be."

$arah Palin failed to add that this transition from the government to the private sector cost the state around $1.5 million and that they have since operated at a loss with bail-out money from the state plus some pork from Ted Stevens ($624,000)

Where has the money gone?


The new Board of Agriculture and Conservation tried to pin all of Mat Maid's shortcomings on the previous management once they took over. But new evidence shows they were set up even before they recommended the dairy's closure. Guess who played a prominent role in the set up? Our dear Meg Stapleton!

Read more about fraud and the set up from Andrew Halcro.
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Sarah Palin's Dairygate

Dairygate is a very complicated story. Researching it made me dizzy, so I'll try to keep it as concise as possible and provide links for further reading. I could be here all night and not make much sense at all. So what's new? Most of the accounts concerning Sarah's gates seem to elicit the same question, "Does this make any sense to you?"

Take a deep breath, here we go!

In 2007, the state Board of Agriculture and Conservation (BAC) considered a request for $600,000 to the state for a review of the operating expenses of the Matanuska Maid Dairy, an unprofitable state-owned business. Milk prices were too high and competition from national brands was impossible to match. The Alaska Creamery Board, a sub-committee of the BAC, which oversaw the dairy and made the request, met in May and discussed privatizing or possibly closing the dairy. It subsequently voted to close it, and on June 13 the Board rejected Sarah Palin's public request that it keep the dairy open, saying it stood by its decision to close the dairy plant as of July 7.

On June 18, Palin fired the entire membership of the BAC, and replaced them with an assortment of Mat-Su Valley residents, all without any experience in running a dairy, but with family or business connections with the Valley's milk producers, which then installed itself as the Creamery Board, and voted to keep the dairy open for 90 days while reviewing options. The loan was immediately approved and payments to the milk farmers connected to the Board continued uninterrupted. On August 29, 2007, Palin announced that the business could not be made profitable and would be offered for sale. It had suffered $300,000 losses. She said that the board could use the $600,000 help with the transition to a private operator.

On December 7, with a required minimum bid of $3.35 million for the dairy, no bids were received and all dairy operations were scheduled to close later that month. Two of the Valley's dairy farmers came forward and offered to lease the equipment to start their own dairy and a further grant of $200,000 was made available to them, provided they started production at the now renamed Matanuska Creamery by the end of December. They only started operations in March 2008, but received the grant anyway. Matanuska Creamery is owned by one of the biggest milk farmers in the area, Kyle Beus, and Robert Wells, a Mat-Su Borough Assemblyman, who is also president of Alaska Farmers and Stockgrowers Inc.

On top of the two grants provided by the state, Ted Stevens arranged a $634,000 USDA grant for Beus and Wells' new venture, Matanuska Creamery, in March of 2008.

Between September and November 2008 Matanuska Creamery applied for a further loan from the state. After much wrangling over personal guarantees, which were removed in a meeting on November 21, the Board, which is comprised of Governor Palin's appointed friends and neighbours, ended up voting to give the Mat-Su Valley business a $630,000 loan. The BAC approved the unsecured operating loan fully knowing that the business did not have the cash flow to make the payments.

Matanuska Creamery didn't have a very good start. 30,000 pounds of cheese in their cold storage, which had already been sold in "cheese futures" deals without insurance, were found to be contaminated with e.coli, listeria and staph and had to be thrown away. Matanuska Creamery made a loss of $250,000.

This is an extremely simplified account of all the shenanigans that went on in the transition from state owned MatMaid to privately owned Matanuska Creamery.

The cost of privatizing MatMaid cost the state of Alaska more than $1,4 million so far. Add the $634,000 in federal grants and the costs are astronomical, considering that it was seen as a failed operation as far back as April 2007.

Hey, it's only taxpayers money and it keeps Sarah's pals in Wasilla and Palmer in business, so what seems to be the problem?

For further reading, click here.
If you want to read loads of posts about it, go to Andrew Halcro's blog and search Mat Maid or Matanuska Creamery.
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