The $50,000 Witch Hunt.
So, let’s say that you’ve got a roofer, and he says that your building leaks. And you say that it doesn’t. And he says it does. And you say that every year you have a certified roof inspector with all kinds of credentials get up on the roof and check it out, and you pay him a ton of money to do it just to be sure. He crawls up in the attic, and examines every little possible crack and crevice, and you get a nice certificate saying all is well. And he says that he’s still really worried because something just doesn’t seem right. He has unanswered questions. There are mysteries. “Did you ask the roof inspector what he did” you query? Well, no. But still… there are these concerns… these unanswered vagueries… I’m so confused. “So let’s compromise,” he says. You pay me $50,000 and I’ll have someone else come check it out.
Now, mind you – you’ve already spent hundreds of thousands to the certified fancy dancy roof inspector, but this guy wants to cut you a deal for a mere $50,000.
Boy, oh boy. Don’t you feel like you got a deal? If you’re answering yes, then have I got a nice little cabal of politicians for you. May I present Mayor Dan Sullivan, and Assemblypersons, Dan Coffey, Bill Starr, Debbie Ossiander, and Jennifer Johnston.
Of course, this story doesn’t have to do with roofing. It does have to do with auditing the city’s finances. The ridiculous witch hunt directed against Mark Begich continues.
The city of Anchorage just underwent its annual audit like it always does. And the very reputable firm of Mikunda Cottrell did the audit. And the very reputable Standard & Poor’s just gave us a double A bond rating. But, the Sullivan/Starr folks are not satisfied. They’re still whining years later, accusing the previous city administration and then mayor (now U.S. Senator) Mark Begich of financial funny business. “We ended up with less money than we thought! We have no money! The previous administration didn’t predict how bad it was going to be! Their forecast was wrong!!” they screech over, and over, and over. And over.
News flash for the Sullivan administration and Assemblymembers – NObody predicted how bad it was going to be. Not the Begich administration, not his financial people and not even the chairman of the Federal Reserve. Those darn crystal balls were on the fritz. But Assemblyman Bill Starr believes that if your crystal ball IS on the fritz, and you can’t accurately predict economic disaster, it means you’ve committed bank fraud. Actually, he probably doesn’t really believe that at all. But that’s not the point.
If the Begich folks had been able to predict that the economy was going to crash, and that we’d have the second worst economic collapse since the Great Depression at the end of 2008, I imagine that they all would have taken their 401k money and moved it into cash. Happily for the city, things have gone better since then, but they did not get better between November 17 and December 31 of 2008. They got better in 2009.
So looking at the city’s investments at the time, as long as we didn’t sell anything, we didn’t realize a loss. Time was on our side, because we knew the recovery would come. It was only a matter of time and patience. People understand this. They watched that phenomenon happen with their own 401k’s and those that could afford to wait it out have seen a measure of recovery from its worst point.
But let’s look back to October of 2008. The Begich people met with the Assembly and put the cards on the table. The economy had crashed and things couldn’t have been worse. They showed the Assembly the city’s portfolio and explained that we had a combination of problems . We had some money invested in Lehman Brothers and Washington Mutual (WaMu). Unfortunately, as we all know, those companies had gone belly up and taken our investments with them. That was money we were not going to get back. But, the administration explained, we also had investments that were backed up by perfectly good companies that would pay 100 pennies on the dollar. But right then the market was so dysfunctional that nobody wanted to pay the right price for these, so we had at that time what is known as a ‘paper loss’. But with that particular loss, we were absolutely certain we’re going to get our money back. As long as long we didn’t have to sell, we were OK.
So where are we now? Fortunately, the city has fully recovered. But nobody seems to be talking about that. For accounting wonks, you’ll be happy to know that we had budgeted $0 in 2009 for realized gains and unrealized gains, and we’ve actually made millions. So we’re not only back on track, we’re more than back on track. And yet, Mayor Dan Sullivan keeps cutting and cutting, and laying people off. AND while he’s doing all this, our mayor is voluntarily taxing $10 million below the tax cap. This is a choice he’s decided to make. But, instead of taking responsibility for it, he’s just blaming the guy before him for financial woes that no longer exist.
Nowhere in the first 60-page report from the city attorney Dennis Wheeler, nor in the follow-up report does it mention those unbudgeted gains, which may be as high as $25 million. He’s been charged to paint a gloomy picture despite reality which is actually pretty good right now, so we can understand that little omission.
These guys know exactly what they’re doing. They’re hoping by breaking out their tiny sad violins, and presenting a bleak picture of a previously corrupt administration, and telling everyone we have no money, they’ll be able to get concessions from the unions, cut services to the poorest members of the community, and pave the way to topple our first Democratic Senator in decades and replace him with the current mayor. They hope that the masses will be so busy looking at this “conspiracy” that they won’t actually notice that the city has its money back and more, that the previous administration did what they were supposed to do, that Dan Sullivan is taxing below the cap, and cutting essential services, and that they (to quote another infamous Alaskan) keep “makin’ things up.”
There’s a whole laundry list of accusations with little or no merit, which will get swatted down one by one. A list, after all, looks really incriminating, even if each individual item has no merit. And why is there a list of these issues that will now be investigated with a $50,000 audit? Because Dennis Wheeler, never actually picked up the phone to ask anyone from the previous administration any questions. He just decided to make a list and leave it at that. That’s way gloomier and doomier than getting your questions answered and finding out that everything is fine.
After all, what’s a witch hunt without some good fear-mongering propaganda?
As regards the latest development, [Begich] said: “It’s frustrating to see the Assembly and Sullivan administration continue to play political games and spend $50,000 or more of taxpayer money that could be used to fund critical projects and services. Standard & Poor’s recent affirmation of the Municipality’s AA bond rating has already substantiated the professionalism and integrity of the budget and finance information provided by my administration.”
But, he said, if the city goes along with an audit, he will supply information and answer questions.
Here’s what worries me: is Sullivan like George W. Bush – says one thing and does the exact opposite?
If so, I think the good folks in Anchorage ought to be worrying if your dear Mayor is protesting too much – using the magician’s trick of distraction – by pointing one way and taking money himself behind your backs.
He is the one who should be audited – or at the very least sent to some accounting courses. He seems as if he doesn’t understand basic accounting principles.
Better yet, why not recall this clown?
If he’s so convinced there is bank fraud, why not invite in the feds to look things over? I mean, if there’s nothing to hide, it might be cheaper than continuing to fire auditors whom he continues to ignore.
Infuriating, but illustrates to us the common sense free-market conservatism being bandied about by a party with a severely partisan agenda.
Tax cuts and cutting services are such a bizarre contradiction! Remember Reagan cutting mental health programs and unleashing a frightening homeless epidemic of enormous proportion?
Anchorage home owners need to examine more than their propert tax reductions, recognize that the slash in spending equals a very unhealthy community in which you live. A sales tax needs to be instituted to share the tax burden on all residents.
Sullivan and his faithful conservative members of the assembly’s tactics are reminescint of the ‘Dick’ Cheney years in the big house. Sadly, fear-mongering is a powerful tool that paved the way for war v Iraq. As a resident of Anchorage I have noticed the mayor’s cut-backs on… nearly everything. To slash city services and positions without need goes beyond negligent and borders on criminal.
I guess this means he’s going to give back that $12,000 he got paid by the city before he was even mayor, right?
It would appear that the cut and slash routine is not only there..but going to build ..as the group..currently so full of political bile..is unable..to deal with anything like calm and reason. When people have..narrow vision..they cannot see wide vistas, full time-frames and such. They vibrate within..a tiny spectrum..and the blood chemistry..becomes so filled with the fight or flight option..(in this case..full-fight mode)..that they have..no more control. It would take..taking each of those named members..out for 2 weeks..each to a solitary campsite..and being left to make journals..and deal..with why they are doing..what they are doing..for a genuine..Reality to set in. They are now..and for the forseeable future..simply ‘ping ponging’ the words that inspire hate and fury, back-and-forth…back-and-forth……they cannot..stop. They have passed the level..of..disengaging.
I cannot wait for Dan’s chickens to come home to roost. And they will.
For those of you who have read Stephen King’s “Under the Dome” – does Sullivan remind you of Selectman Rennie?
When I read Ossiander’s name, I shudder. She is one of the bad guys.
Jeanne, you forgot to add Assembly member Patrick Flynn to the list of those supporting the audit. Honest mistake? Or deliberate misrepresentation?
That’s why it was a “compromise.” There have to be two parties for that. I didn’t mention lots of things. Not sure I understand your point. Flynn did not call for the audit. AKM
@BS
For those of you who have read Stephen King’s “Under the Dome” – does Sullivan remind you of Selectman Rennie?
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Read the book — I don’t know enough about Sullivan to make that call —
However – I did see an awful lot of Palin “going rogue” politics in there — Instead of throwing them under the bus – he just ” killed” them, including buring down the (liberal press) newspaper — meth capitol ? friends getting positions ? lol
Yet another reason to not let the capital move anywhere within 200 miles of Anchorage.
What I find astounding is that this witch hunt is going on there in Anchorage and bona-fide war criminals are free to go on Sunday talk shows and lie though their smirks, or give inspirational speeches to people they know nothing about, or land prestigious and lifetime appointments to the courts, teach ‘law’ at respected universities and so on and so on, and nobody at all is ‘going after them’.
How’s that open season on the gas pipeline going? And what about the slush fund? Wasn’t anyone around to notice when those truckloads of building materials happened to fall off at the future site of the Palin chateau while on their way to the sports complex?
It makes one think that government, at least from the city level up to the national is so thoroughly corrupted… well, I just can’t go on. I think the time for hope is past. Now it is time to make change happen.
Here’s another thought, not to go off topic and I don’t really think it is because afterall this is an endemic problem. I has some experience with statistics, I have been using them for more than 30 years to try to understand sampling programs. Suppose I own a little company that does public opinion polls and we are just keeping our heads above water with the usual qualified commissions. Suppose some friendly sort of cove sidles up to me at some get together and writes out a check for a few million and then sez – I’d like to commision a series of polls – I have a few special conditions but that won’t trouble you will it? So for the next 4 years my little outfit conducts polls of “likely voters”. But we have all the specifics. We always claim they are “random”. However, we can gradually skew our results without batting an eye. We simply use all of the R leaning sources of response in the next poll and randomly select the portion remaining, we get a certain kind of distribution. Suppose we poll 1000 individuals and in the first poll we get 27% R 65% D and 7% I. In out next poll we start with the 5% of those who responded R most strongly to all our questions in the previous poll, that leaves only 950 for our random sample. If nothing has changed and we get the same result, and we then add that with the 5% of ringers we included, we get this result: 31% R 62% D 7% I. Repeat. Handled with judicious skill, even a constant or improving polity of “public opinion” can be readily manipulated to show the exact opposite of reality.
Are we to suppose that if the supposedly public service offices of government are not immune to influence that I would not take such a deal?
Does any honesty prevail in a den of thieves?
@Krubo
Agree that polls & stats can be skewed to serve the direction of what a company is wanting or not wanting.
I wonder so much about the health care polls – how can so many ppl be against a “single payer” system? It boggles my mind. I, for one, believe that the mandate to purchase insurance is the problem – not the single payer or universal coverage. I don’t know how it would be done – but seems that if you pay an extra 5% income tax – you should have 75% coverage, up to maximum 10% income tax for 100% health care. So someone making $24K a year would pay a minimum $1200 to a max of $2400. per year / per household for coverage. $100K = 10K in additional tax. I would vote for that!!!! I certainly don’t know who these Repubs are talking to that say “NO HEALTH CARE”
I never believe the polls. Even if it’s in my side’s favor. When the polls said McCain got a two week spike, I just refused to believe my fellow Americans could be that stupid. I have faith in “us.”
Enjay -
When you put it that way it is pretty surprising is it not that people will instead pay exorbitant premiums for years and then discover when they have a major health crisis that the “insurer” has arbitrarily disqualified them? Do they not have the capacity to understand their situation?
The facts are a little shocking. The government pays for about half of all the healthcare in the country already. The other couple of trillion dollars gets filtered through the voracious gastric systems of the insurance companies and the banks that own them. Out of it is extracted a bare minimum 15% profit. 30 billion dollars. But that is of course assuming that the 15% profit is an accurate accounting. One has to wonder, if they will lie about socialized medicine, would they not also lie about their actual profits?
The system is based on investment, and the major share of that investment is held by a few entities, but the balance is still delicate.
My general reaction to learning that I am being coerced is to take aggressive but well considered counter action.
Wondered if the local media has picked up this story. Most people don’t have a clue about what is going on day to day unless it becomes a news story.
Recently my husband had a bursitis cyst drained in the drs office – needle drawing off the fluid – (less than 10 min. procedure) Dr billed it as “in office surgery” – charged insurance $900. Insurance paid …… less than $600.
We have insurance thru employer – we pay $428 a month (actually pretty inexpensive for Med / Dental / Optical ) while our employer pays another $900 or so for the coverage.
I understand the mathematics of health care – Medicare would only pay maybe $450 for the procedure – Uninsured would pay -0- (or whatever the Dr could get) so we get billed for $900 to make up the difference. In “THEORY” if everyone had insurance, the costs should go down, since everyone will get at least a portion of the procedure cost.
However, going back to insurance – between 25-40% is wasted on insurance overhead. ( Lobbyists / Corp. trips & bonus’s / etc.) And if a corporation like Enron / Lehman Bros / WaMu can skew the books to make it look better than it is ……. am sure the insurance can skew them to make it look worse.
@17 All I Saw — Excuse me, but that is not a useful comment. While I fully support your right to anonymity, and understand that in some cases it’s hard to provide specifics without possibly compromising anonymity, if you expect to be taken seriously when making an accusation you have to provide at least enough context for the reader to infer what the heck you’re talking about.
As it stands, the entire informational content of your comment is “Begich is a crook, and so is Sullivan”. If you do indeed have knowledge of corruption, might I suggest an anonymous, snail-mail, letter to AKM with some specifics?
all i saw…please, please don’t publish your email address like this.
it’s a very dangerous thing to do.
mods, where are you !!!!
#16 Enjay- It is interesting to see what health ins actually pays. Sometimes their explanation of benefits shows (using in your example)”benefit” $880.00. copay $20.00
as if they paid the entire amount. They show the discount as a benefit because it is. Those without insurance do not get the benefit of a discount unless they work something out with the doctor/hospital and pay for the service in advance. If they do not have the money to do that, they would be expected to pay more than insurance paid. They would be billed for the entire $900.00.
Unpaid medical bills can show up and damage a person’s credit. This hurts them when they try to rent an apartment, buy a car, etc.
ok, all i saw, i won’t worry.
just had a nasty little feeling about your revelations and the consequences that befall some folk when they are unawares.
looks like you’re on top of things
16 Enjay in E MT Says:
February 16th, 2010 at 8:13 PM
[snip] I understand the mathematics of health care – Medicare would only pay maybe $450 for the procedure – Uninsured would pay -0- (or whatever the Dr could get) so we get billed for $900 to make up the difference. In “THEORY” if everyone had insurance, the costs should go down, since everyone will get at least a portion of the procedure cost.[/snip]
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I have to second what Laurie @ 18 says. No insurance does NOT mean “$0″ paid *by* the patient. I’ve a family member with no health (or dental or vision) insurance, no savings, no job, and, in this economy, no prospects for a job. FM was toying with going to the ER last weekend for extreme pain…couldn’t. Couldn’t afford it. How sad is that? I even checked w/ the hosp. to see if something could be ‘worked out’.
The answer? “Well, yes. FM will see the financial counselor and then get right in to be checked out by the Dr. Whatever the bill is, FM can pay for it on an installment plan. We can go as low as $25 a week repayment.” When I asked what the ‘no frills’ visit to the ER would come to for a patient with no health insurance, the answer was: “Typically, it starts around $750 but once you consider what services the patient might need, like heart monotoring, IV fluids, wound cleaning and suturing, pain medications, and such, the cost will go up; it all depends on what services the patient needs. Don’t worry, the bill can be paid in installments.” Riiiight…as if that was going to be possible.
By law, yes, the hosp *must* treat you. And, by law, you *must* pay for services rendered. If you *don’t*, as Laurie points out, among other nasty and undesirable things, you are hounded relentlessly for payment and/or your credit is ruined for years on end for being a ‘deadbeat’/scofflaw.
What the hosp/Dr ‘loses’ in revenue from ‘deals’ made with insurance companies, they can easily make up -in some measure-, by charging *full* price to those *without* insurance. And they do. For example, where we live, someone being picked up in an ambulance (no matter the distance of the ride) ‘costs’ an insurance company $200…the uninsured? $450. On *top* of that, if the patient requires EMS meds/monitoring pre-ambulance loading and/or in the ambulance, the insurance co is additionally ‘charged’ a set rate for those itemized services….the uninsured is charged *full* price for them *in addition to* the *full* cost of the ambulance ride [keeping in mind, the 'full price' is a highly *inflated* figure ~ one the hosp has used as a *starting point*/'base' from which to negotiate w/ the insurance co a price that will *still* be profitable to the hosp.] beth.
@All I Saw — Thanks for responding. I have sent you an email from my “Bob” account.
There will be rallies for health care around the country this week. I hope everyone here concerned about our broken health care/insurance system can make it to a rally. The president has not quit and we shouldn’t either. It’s not over yet. Please put your senator and representative on your weekly call list until it’s done. Make some noise!
Since they are so in favor of audits, I’m sure they would back us with a resolution requesting congress to audit the Bush administration. I’ll look for it at the nest Assembly meeting.
If Sullivan, Ossiander and friends are so certain that the prior independent audit is wrong and that S&P is wrong, why don’t they pay for the new independent audit out of their own pockets with the following contingency: Only if a new audit confirms their assertions of wrongdoing/fraud/corruption will they be paid back for the cost of the otherwise unnecessary re-audit. I guarantee that if that idea was publicly proposed to them that the issue would cease to exist pretty darn quickly. Manipulating and forcing taxpayers to foot the bill for what certainly appears to be nothing more than a campaign strategy — and a really disgusting and criminally dishonest one at that — is a revolting abuse of power!
There were a few comments from ‘All I Saw’ which I’m following up on, but have removed for the time being. I hate to leave allegations of corruption and criminal activity without specifics to back it up at this point. All I Saw and I have been corresponding about this via email. Just wanted to let anyone know who may have come back looking for the comments. Thanks!
#2 I See Villages from my House says:
“A sales tax needs to be instituted to share the tax burden on all residents.”
The tax burden is already shared by all residents – even those who rent instead of owning property. How do you think the property taxes on rental property gets paid? I can assure that property taxes on apartments and other rental properties are paid from rental income so even renters share our current tax burden, albeit indirectly.
While property taxes may not be the best solution to funding city government, sales taxes are an even worse solution. Sales taxes are regressive – they hurt low income families and they help high income families. If Anchorage were to institute a sales tax in place of property tax, do you think that rental property prices all over town would fall because of the elimination of property taxes? Hell no, the rental property owners would get a windfall and low income families would get screwed.