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...

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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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Looking at $arah Palin's legal fund from a criminal law perspective

I received a very interesting e-mail regarding the Alaska Fund Trust website, the AFT agreement and how the two together may have implications in Alaska criminal law.

The AFT website, which exists to solicit donations to the fund, states in the FAQs page:

9. Can the funds be used for personal purposes?

No. Donations can only be used for legal expenses incurred by counsel on behalf of the Governor, her family, and staff as approved by the Trustee.

13. Why is this fund being created?

The Trust Fund is being created to assist the Governor, her family, and staff in paying legal expenses and costs incurred from previous investigations as well as future complaints filed. Her staff is similarly being targeted by these complaints and has also incurred and is incurring significant costs.

As we have previously seen, the agreement fails to state that the purpose of the trust fund is to pay legal expenses, saying instead that its exclusive purpose is to provide a proper means for the acceptance of money, property, and services, including, if necessary, pro bono legal services, to provide for all reasonable, necessary, and appropriate fees or charges incurred by (i) SARAH PALIN as a result of the fact that she is Governor of the State of Alaska or as a result of the performance of her duties as Governor of the State of Alaska; and (ii) Covered Individuals, that may be selected or designated by the Trustee as provided herein, as a result of or arising out of their association or relationship with or employment by SARAH PALIN, in her capacity as Governor of the State of Alaska.

Further, it includes a clause regarding rights of withdrawal up to the maximum yearly amount to fall within the Federal Gift Tax exclusion. It applies to each beneficiary 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.

I'm sorry if I keep quoting the text of the agreement in so many posts, but bear with me, here comes the juicy bit:

Alaska Statutes 11.46.100 defines an assortment of theft crimes, including alternative means of committing theft which include a person who: "(1) with intent to deprive another of property or to appropriate property of another to oneself or a third person, . . .obtains the property of another; (2) the person commits theft of lost or mislaid property under AS 11.46.160; (3) the person commits theft by deception under AS 11.46.180; (4) the person commits theft by receiving under AS 11.46.190; (5) the person commits theft of services under AS 11.46.200; [or] (6) the person commits theft by failure to make required disposition of funds received or held under AS 11.46.210."

In turn, for example, theft by deception (false pretenses) is defined in Alaska Statutes11.46.180: "(a) A person commits theft by deception if, with intent to deprive another of property or to appropriate property of another to oneself or a third person, the person obtains the property of another by deception."

"Deception," in turn, is defined in Alaska Statutes 11.81.900(18); while it "does not include falsity as to matters having no pecuniary significance," is fairly broadly defined to include: "knowingly (A) creat[ing] or confirm[ing] another's false impression that the defendant does not believe to be true, including false impressions as to law or value and false impressions as to intention or other state of mind; (B) fail[ing] to correct another's false impression that the defendant previously has created or confirmed; (C) prevent[ing] another from acquiring information pertinent to the disposition of the property or service involved; (D) sell[ing] or otherwise transfer[ring] or encumber[ing] property and fail[ing] to disclose a lien, adverse claim, or other legal impediment to the enjoyment of the property, whether or not that impediment is a matter of official record; or (E) promis[ing] performance that the defendant does not intend to perform or knows will not be performed."

Summing up: 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.

Perhaps it would help clarify things if an Alaskan citizen or person from elsewhere who contributed to this fund would challenge the whole arrangement in a court of law--or if an impartial Alaskan prosecutor would investigate the matter under state criminal law.

An important point: the State of Alaska is obliged to prosecute any appropriate criminal action. The victims and witnesses in a criminal action should bear no costs whatsoever. Prosecuting authorities bring those cases not on "behalf of" a given victim but on behalf of all the people of the State of Alaska, against whom criminal activities are considered a transgression. A larceny is not viewed so much as an offense against the individual as against the community.

There's more.

A little more food for thought regarding official pronouncements from a certain governor's associates concerning the purposes of this "trust fund": it appears that where a "trust fund" has been set up expressly to counteract citizen requests for clarification of state ethics laws (including at least some number of them under pending investigation at the time) and to deter additional lawful citizen filings essentially by pre-judging every one of them as "frivolous" and unworthy of the Board's attention, attention should be paid under both federal civil rights laws and state law.

Where representatives of the subject of any such request for clarification expressly invites a "backlash" against citizens who exercise their rights to file such requests for clarification, it seems that there should be some consideration of whether other Alaska laws apply.

Under Alaska Statutes 11.56.510, interference with official proceedings is a class B felony:

"(a) A person commits the crime of interference with official proceedings if the person

(1) uses force on anyone, damages the property of anyone, or threatens anyone with intent to
(A) improperly influence a witness or otherwise influence the testimony of a witness;
(B) influence a juror's vote, opinion, decision, or other action as a juror;
(C) retaliate against a witness or juror because of participation by the witness or juror in an official proceeding; or (D) otherwise affect the outcome of an official proceeding; or

(2) confers, offers to confer, or agrees to confer a benefit
(A) upon a witness with intent to improperly influence that witness; or
(B) upon a juror with intent to influence the juror's vote, opinion, decision, or other action as a juror or otherwise affect the outcome of an official proceeding."

I have emphasized the relevant bits of the statutes that apply in this case and it appears the website presents the purpose of the trust fund as one thing while the trust fund agreement presents a very different one, thus at least arguably leading people to part with money, services or property under false pretenses.

The purpose of the fund, as stated on the website, together with several press releases from the governor's office, her twits, etc, may infringe the civil rights of the citizens of Alaska both under state law and federal law.

This post was possible thanks to invaluable input from a criminal prosecutor. Thanks SG, we owe you!
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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 is so transparent...

When Sarah Palin was elected governor of Alaska she wasted no time in appointing her cronies or having them go for interviews to fill important positions in the state's offices.

Jon Schmidt, Kristan Cole, Brad Cole and others were appointed to various boards and commissions.

Debbie Richter, a good friend and business associate, applied for the job of director of the Permanent Fund Dividend Division. She's now called Debbie Bitney.

Debbie's husband, John Bitney, was a key aide in Sarah Palin's 2006 gubernatorial campaign. When she took office, she gave Mr. Bitney a job as her legislative director, and a few months later stood beside him at a news conference and praised his work. Seven weeks later she fired Mr. Bitney for what her spokeswoman described as "poor job performance." What really happened? Governor Palin got a call from another old friend, Scott Richter, informing her that his wife, Debbie Richter, and Mr. Bitney were having an affair. Scott and Sarah's husband Todd are great friends.

I found some articles on Bloomberg and Juneau Empire.

Bloomberg:

Shortly after she was elected governor, Palin's office signed off on hiring Deborah Richter -- who attended college for a year then worked in bookkeeping and finance jobs -- as director of a division that distributes dividends to Alaskans from the state's oil-wealth savings account. Richter, who said she's known Palin for 13 years, was Palin's gubernatorial campaign treasurer and ran her inaugural committee.

The Richters and Palins also shared an investment: 30 acres of rural property near a lake in Petersville, Alaska, worth $47,300, according to Matanuska-Susitna Borough data.

"It sounds like a patronage deal for someone who ran your campaign; that's pretty normal,'' said Bill Buzenberg, executive director of the Center for Public Integrity in Washington. "What's not normal is that they have business dealings together.''

No evidence has emerged to suggest that laws were broken in the appointment.

"She was qualified,'' said Pat Galvin, commissioner of the Department of Revenue and Richter's boss. Galvin said he also interviewed other people for the job and that Richter has done well. He said Palin's office approved his selection of Richter.

Palin's gubernatorial spokesman, William McAllister, said the decision to hire Richter was Galvin's. "I have no knowledge of land ownership or college degrees,'' he said.

What would anybody expect them to say? "The governor told us to hire her friend and she turned out not to be terribly qualified but she was very nice, so we hired her." Yeah, right.

Juneau Empire:

Alaska Permanent Fund dividend checks barely made it out on time last year after a computer technician accidentally wiped out a data file containing hundreds of thousands of dividend applications.

After desperately trying to recover the file with help from Microsoft Corp., the Permanent Fund Dividend Division of the Department of Administration went to the backup tapes.

Then things got worse.

"The problem was, there was some file that linked information wasn't backed up," said Debbie Richter, division director. "That was an essential piece of the puzzle."

Eventually, the reports were released - minus the explanation of what had happened at the Permanent Fund Division.

Juneau freelance reporter Bob Tkacz was one of the reporters asking for the transition reports. He was dismayed at the response from a governor who had campaigned on openness.

"No other governor in my experience has ever kept those reports confidential, and certainly never censored them in the way the Palin administration did," he said.

Recovering from the Permanent Fund Division data loss involved calling in temporary workers to reconstruct lost data. Applications from the increasing number of applications filed online were able to be recovered; but paper applications had to be reconstructed by hand.

A snippet from the Bloomberg article appeared on TPM Muckraker and in one of the comments I found quotes from the Juneau Empire article and these questions:

Three thoughts:

Excuse me, but "manually reconstructing" thousands of several hundred dollar payments from a state royalty fund? That sounds like it could be open to abuse.

Who was the "contractor" hired to help sort it out? How much were they paid?

Why did the Governor refuse to allow disclosure of the mandated state audit report on the computer failure?


If it sounds fishy, it probably is. Sarah Palin specializes in fishy.

Link to FBI

(Hat tip to JMGUIZZ1)
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Sarah Palin is not a state employee

Sec. 39.20.060. Exclusion of governor and lieutenant governor from personnel laws.

Notwithstanding the provisions of any other law, the governor and lieutenant governor are not considered employees of the state for the purpose of state personnel laws relating to hours of employment, annual leave, sick leave, overtime, compensatory time, and travel allowances. This section does not deprive the governor and lieutenant governor of the right to participate in the state retirement system or in state group insurance plans.

There is a very big contradiction regarding this statute.

The governor is not considered an employee of the state. In which case the entitlement to collection of per diem and travel allowances as detailed in the Alaska Administrative Manual - Accounting Travel does not apply to her. The whole manual refers to the entitlement and rules for state employees or approved travellers on state business.

Is there a separate manual for the governor? If she is not a state employee for the purpose of travel allowances, she falls outside the scope for collecting the said allowances. In other words, she should not be entitled to collect per diems or charge the state for travel expenses. By the same token, her family should not be entitled to reimbursements because they are not state employees or approved travellers either.

Sarah Palin can't have it both ways. The statute excludes her from the provisions detailed in the manual, but she claims expenses according to the manual?

Obviously there is a possible get-out clause.

The statute may be interpreted as exempting the governor from complying with the rules in the manual, but retaining entitlement. So there should be a separate set of rules that applies to her regarding travel and other expenses.

If there are not clearly stated rules covering these expenses, does the statute mean that the governor is simply not accountable?

Why did the Personnel Board go through the pretense of investigating the ethics complaint filed by Frank Gwartney against the governor when they could have quoted the statute and end the matter there and then?

None of this makes any sense!

To read article by Lisa Demer and access links to statute, manual and other bits, click here.
The image is my little joke, any rule book is better than none...
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Sarah Palin blessed with large, loving family

Dear friends over the pond, do you believe Sarah Palin's expenses for herself and her family appear to be a bit dodgy? Do you think she's entitled to charge the state $60 for a phone call from the comfort of her own home? Or to be reimbursed for her children's travel because she is blessed with a big, loving family and wants to spend time with them? Do you consider her children to be state officials, conducting state business on these trips?

No?

Would you like some tax experts to have a good look at all her expenses claims since she took office? Tim Petumenos, on behalf Personnel Board, did go through forty out of seventy-two of Sarah Palin's claims and found that in only nine instances the children were not really serving the interests of the state of Alaska. Have they been appointed by the governor to perform specific state duties? Maybe Mr Petumenos is not as knowledgeable as the guys from the IRS and decided to cut a deal and put the matter to bed because he was out of his depth and it would be too much hard work to take it any further, who knows?

The press release from the Governor's office regarding this matter is quite interesting, here is a fine justification offered by Sarah Palin:

“This is a big state, and I am obligated to — and intend to — keep Alaskans informed and meet with them as much as I can, from Barrow to Marshall to Ketchikan,” Palin said in a written statement. “At the same time, I am blessed to have a large and loving family, and the discharge of my duties should not prevent me from spending time with them.”

So they're not state officials, they're just loving children? The state has to pay for travel so they can be together? Something is not right...

To find out exactly what is legitimate and what isn't, once and for all, ask the experts!

If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by completing Form 3949-A. You may fill out Form 3949-A online, print it and mail it to: Internal Revenue Service Fresno, CA 93888 If you do not wish to use Form 3949-A, you may send a letter to the address above. Please include the following information, if available:

• Name and address of the person you are reporting.

Sarah Palin, 1140 W Parks Hwy, Wasilla AK 99654

• The taxpayer identification number social security number for an individual or employer identification number for a business. (Not known)
  
• A brief description of the alleged violation, including how you became aware of or obtained the information. (Describe the best way you can)
  
• The years involved. (From December 2006)
  
• The estimated dollar amount of any unreported income. (In excess of $22,000)
  

Your name, address and daytime telephone number. Although you are not required to identify yourself, it is helpful to do so. Your identity can be kept confidential.


Simple, uh? If a lot of people do it, they're bound to take an interest. Go on... do it. The worst that could happen is for the IRS to agree with Sarah Palin and decide that it's OK for people to charge their employers for their children's travel so they can perform their duties and have their large, loving, blessed families with them, everywhere. Hey, that would be good news for working parents!

Changing the subject a little bit, the Palin children must have an abysmal school attendance record, don't you think?

To go to the IRS page, click here.
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When is fraud not fraud?

Something has been bugging me about Sarah Palin giving part of her children's travel expenses back to the state. It bugged me since I wrote the previous post about a pretend slap on the wrist.

ADN updated their report to include the following:


"Nothing in this agreement constitutes an admission of wrongdoing, and none has been found," the document said.

Palin's lawyer, Thoman Van Flein, took it a step further.

"The governor has been exonerated of all wrongdoing in this ethics act complaint. There is no finding of wrongdoing and there is no ethics violation," Van Flein said in a news conference.

As Petumenos described it, the governor agreed not to contest certain charges. He agreed not to file a formal accusation or take the case to a hearing.


Let's put this whole business in a clearer context, starting with a quote from Sarah Palin:

"I'm the mayor, I can do whatever I want until the courts tell me I can't." Now she's the Governor. She charges $60 per diem to make a phone call from her own home.

1. Sarah Palin filed expenses claims that included the cost of her children's travel to several events, when the children were clearly not attending them on state business.
2. Charges were challenged by reporters.
3. The governor had forms amended, changing the language to make it clear that the children were invited to events as part of First Family.
4. Ethics complaint filed.
5. Complaint investigated by the Personnel Board. All members of the board are appointed by the governor.
   
6. The same person who "investigated" Troopergate on behalf of the Personnel Board is asked to look into the claims.
7. They come to an arrangement where she pays "x" amount back and no further questions will be asked and no charges brought against the Governor.
   

If the reporters had not asked some questions, if the ethics complaint had not been filed, she wouldn't have to reimburse the state for anything. She would have kept the money for at least nine of the children's trips. Sarah Palin was aware that the expenses claims were fishy and deliberately had them amended so she could keep the money. The simple fact that she has been asked or offered to pay the money back shows that the claims were false.

Where I come from, this is called fraud. When an employee, any employee, files inaccurate expenses claims from their employers, gets the expenses reimbursed, have them challenged in some way, proceeds to amend the claims to try and validate them, the claims are investigated and this person is asked to pay the money back, the employee doesn't just pay the employer back, the employee gets fired and possibly faces criminal charges for fraud. No deals.

What makes this case any different? The claims were false, money was paid, claims were deliberately amended, claims were found to be indeed inaccurate and money has to be returned.

I believe it's about time Sarah Palin's ethics violations were investigated by an independent body, people a bit higher up who won't make any deals on terms dictated by Sarah Palin herself. She has to be investigated by an authority that won't validate fraud.

Updated report: ADN
Image: FBI logo
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