Voices from the Flats – Undisclosed: What Palin’s Financial Report Left Out
29 10 2009Blue Oasis
***************************
Sarah Palin filed her final POFD (Public Officer Financial Disclosure) on time according to APOC (Alaska Public Offices Commission) rules.
However, Palin has proven herself to be selective as to which rules she chooses to follow and how completely she follows them.
For example, we’ve seen nothing “disclosed” nor have we heard anything about Palin’s AK Fund Trust (for which her website is still collecting money) since the summer revelation that Investigator Daniel found Palin cannot spend the Fund Trust without probably violating a pesky Statute or two. While the Personnel Board is a separate issue from APOC, it is still important to note that the Board IS NOT following the Executive Branch Ethics Act. How do we know?
…the attorney general shall initiate formal proceedings by serving a copy of an accusation upon the subject of the accusation. The accusation shall specifically set out the alleged violation. After service, the accusation is a public document open to inspection. Except as provided in AS 39.52.370(c), all subsequent proceedings are open to the public.
1) Palin “blew off” Investigator Daniel in July. By sometime in August, he should have “served a copy of an accusation” upon Palin. If he had, the Personnel Board would no longer be able to hide behind the “confidentiality” claim, as all further proceedings would be public.
2) If Palin and the Board, as Debra English may have hinted they were trying to do during the last Personnel Board Meeting, had reached a “settlement,” that too would become public information and would have required an announcement.
According to the ADN, Kristan Cole (fund trustee) did not respond to their questions. Back in July, she said the fund would be “frozen” until the legal issues were “resolved.”
Readers may remember that an East Coast lawyer did an exhaustive analysis of the “trust agreement” that Palin’s people have out for inspection on the AK Fund Trust website:
There is NOTHING in the official purpose of the AFT related to legal defense or legal proceedings or ethics complaints. In fact, the purpose of the trust is for any expense at all incurred by Sarah Palin “as a result of the fact that she is Governor . . . or as a result of the performance of her duties as Governor.” Those are the only limitations instilled by the purpose clause.
So the purpose of the AFT is to collect money for…basically anything and everything, short of overt criminal activity. This includes legal expenses, of course, along with everything else under the sun. It also covers her family and staff, as well as “any other person determined by the Trustee.”
Like I said, the Personnel Board is a separate issue from APOC. However, Why was this trust not listed on her APOC Financial Disclosure?
Trusts valued at more than $1,000 must be identified on the Public Officer’s Financial Disclosure (POFD). Palin didn’t bother to list a Trust containing hundreds of thousands of dollars designated for her and her family’s personal use.
So, what is the future of this debacle?
It seems the Personnel Board is paralyzed, I’m guessing by fear: Palin won’t budge and give up the money and they are loathe to drag her as a national figure back to Alaska for a hearing that could forever damage any political aspirations. After all, she keeps making those erroneous claims that she cleans up corruption. (Also, it seems that everyone and their friggin’ cat thinks that Palin is going to “take them with her” when she makes it big.)
The AK Fund Trust faces other hurdles. Again, according to legal analysis:
The AFT’s purpose, as ambiguous as it may be, is clear about one thing – the purpose was set up for Palin “as Governor.” As soon as she resigns, the trust loses its purpose. Even if she drags her feet and says that the funds are being used for expenses “as a result of” her being Governor, that excuse will only last for so long. For example, even if she says that moving expenses and consulting lawyers about new ethics complaints and a hiring a masseuse to relieve her stress all resulted from her actions as Governor, eventually, at some point in the future when her excuses run out, the AFT will have to be dissolved and the funds donated. I originally thought that Cole could just set up a new trust; but according to the trust language, the funds would have to be given away to charity.
So, since she is no longer Governor, they will have to dissolve the Trust and donate it to charity. However, I doubt they can do anything with the money until the legal issues are “resolved.”
And now we have a brand new business reported on the Disclosure form and started by Palin/Stapleton–”Pie Spy, LLC.” Paperwork claims it will be a “marketing business” geared towards “Services for the Elderly and Persons with Disabilities.”
I have speculated all along that:
1) Palin quit when she found out she couldn’t access the AK Fund Trust in order to start making money to pay her legal debts
2) Palin has absolutely no intention of letting go of that money whether or not it’s legal, because,
3) If the Personnel Board does not move forward, she can just let the money sit there for a very short statute of limitations of two years (from July 26th)…and;
4) She can simply donate the Trust to whatever “friendly” 501C3 happens to be around **coughSamaritan’sPursecough** who would probably be only too willing to make donations to a business geared towards “the elderly and disabled.” 501C3 donations are not public information.
Unless, of course, they can actually turn the LLC into a 501C3.
Of course, this is only speculation…
(next installment…Sarah Palin’s letter to APOC contradicts her Financial Disclosure form.)
October 29th, 2009 at 11:22 PM
Indictments much?
October 30th, 2009 at 5:23 AM
A couple of things…I doubt that the ATF is a 501(c)3 because of its political nature. You can also search the IRS for charitable organizations and it’s not listed. Most 501(c)3’s are required to file Form 990 and if requested this must be made available for public inspection. They are also required to spend a certain amount of their income on their charitable purpose or they will eventually be taxed out of existence. They are also required to report all related party transactions.
The ATF appears to be set up as a Trust, and as such would be required to file Form 1041. This would not need to be made public unless the trust document called for it…trusts are governed by the trust document which should tell how the income is to be distributed and for what purposes…i.e. living expenses for a widow, educational expenses for grandchildren, or in this case stolen money for a grifter. The ATF tust document can be found here:
http://www.thealaskafundtrust.com/site/downloads/alaska_fund_trust.pdf
In a nutshell, if the trust was set up correctly and is legal (which appears to be questionable) then this document spells out how the trust must distribute its income. The income of the trust is reported to its beneficiaries via Form K-1 and they are required to pay taxes on it. The question that pops to my mind is whether the legal fees would be an expense to the trust, thereby reducing the income that could be dsitributed to the beneficiaries; or whether the legal fees would be an expense for the beneficiaries, in which case they may or may not be deductible, and would be reportable on their individual taxes on Form 1040. In the case of a salaried individual incurring the expense because of their job I would imagine that the deduction would then be subject to the 2% limitation on Schedule A for itemized deductions. In other words, McQuittyPants would have to report ALL of the money given to her by the trust as income and then would get to deduct her legal fees as an itemized deduction.
Obviously, if the expense was incurred because of illegal activities then it would not be deductible at all.
Also too, I believe if a trust does not distribute a certain amount of its income then it may be subject to an excise tax on the undistributed amount over a calculated percentage. (Take this all with a grain of salt…it’s been at least 5 years since I’ve done any trust returns.) Trusts are NOT tax exempt organizations.
There was an extensive discussion of this on the forum when the ATF was set up.
October 30th, 2009 at 5:43 AM
You are a great writer and researcher, Linda. Your information is thorough with references. Usually, what Lawyers like. But like others, I feel the Lawyer would need to be someone from the Outside of Alaska that
wouldn’t and couldn’t be easily influenced.
Like others, I visit your site. My thoughts are that the
information would do more if placed on a wider screen. For people to still consider, Palin, a honest person means that the information isn’t reaching enough people. You might want to think about going on television (National not local); sorry, but I don’t have much faith in the media, especially, the local media. You would have many viewers in the US and beyond.
Your efforts and concerns are legit. However, they are being ditched by your local Officials. The only way to really bring your efforts to fruition is to start bringing them ( your articles and Local Officials) to the Headlines. You worked hard and have actually PAID, the price . Dust off that information and give it into some fresh light.
Would be nice if you could be on Oprah after Palin’s interview. There are 2 sides to a story. Let yours be heard. Maybe you can have equal time like Palin, one hour, imagine what can be told!!
October 30th, 2009 at 6:06 AM
I think mainly the problem here is taxes. Todd wants his snowmachine racing income treated as business income so he can get the tax deductions on what he spends on what is really a hobby. But if you take a business loss too often for this sort of thing, that triggers an IRS audit.
Now, the sponsorship deal throws another iron in the fire. Todd can’t take off his taxes anything he gets for free AND has to declare as gifts (and pay tax on) amounts received in discounts, gear, clothing, travel/lodging over a certain amount, which I think is either $12,000 or $13,000 PER DONOR (which personally I think is way too high), and the Arctic Cat deal in 2008-2009 very conceivable exceeded that.
Now, throw into the fire the iron where your wife is governor and by law has to declare all this stuff.
This means paper trail from APOC disclosure forms to IRS tax returns should match.
We have both for previous years to examine, but I have a question: Since she WAS governor for all of 2008, does she have to disclose her 2008 taxes? She quit in 2009, so I’m pretty sure we’ll never see those.
I’m afraid to take what as legitimate business expenses (such as Business Use of Home) because I’m afraid that an auditor will find one little personal paper clip in the section I use as an business office and disallow all the expenses, yet these people haven’t been audited.
October 30th, 2009 at 8:20 AM
Thank you AKM for posting Linda’s work here and on Huff Po.
Thank you Linda for your endless work gathering documents, attending meetings, and all you do.
It’s times like this that the sheer size of this state stands in the way of more of us being able to do some of these things.
I hope you know how many of us are at your shoulder…
Thank you neighbor.
October 30th, 2009 at 11:27 AM
Freakout…………great information. Thanks!
October 30th, 2009 at 12:07 PM
Yet, the working class has yet to realize that Free Market manipulators and opportunists like Palin reap the benefits of colorful and blurry interpretations of value.
The Wall Street melt-down occurred because of HER way of thinking, wheeling and dealing – “It’s only unethical if you point it out.”
My god, the time and effort Alaskan bloggers put into investigation and dogged follow-through is humiliating for reporters. Or it should be.
Well done CD and AKM, question is, what does that joke of a personnel board, APOC and / or the legislature do with all these descrepancies? What about the legitimate press?
October 30th, 2009 at 6:05 PM
Was glad to see this story posted on HuffPo…but I’m wondering if they’re suppressing the comments over there? At any rate; great job ladies on getting the facts out and diligently wading through the muck of Alaskan politics. Remain ever-vigilant…for you have cast a light into many high stake areas of impropriety.