$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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