The Mudflats

OK, as much as I want to just copy and paste the entire thing here, I don’t want to make the Anchorage Daily News mad at me.  They live off clicks, and I don’t so I’ll send you over there, and then you can come back here.  And while you’re over there, do leave a comment.  They’re filling up fast.

The ADN has weighed in on Mayor Dan Sullivan’s latest ethical lapse.  I refer to the fact that he accepted payment for a faux insurance policy for his father that came out of city coffers.  Despite apparent attempts to make this one fly under the radar, it didn’t.

And when the Anchorage Assembly tried to put a hold on the payment of $193,000 until we figure out if it’s even legal – oops!  Bad news.  Looks like the city cut that whopping huge check at the speed of light, and it got “disbursed” by the Trustee….aka Mayor Dan Sullivan.  Most of us have to wait six weeks for a check.  Strange.

For all the background, I refer you HERE.  And don’t forget to follow the links!

So, Anchorage is $193,000 poorer, and Mayor Dan Sullivan and unnamed parties (we were told it’s none of our business by the Mayor) are $193,000 richer.  And the “contractual obligation” the Assembly was told about doesn’t appear to exist.  Cries of “Show us the contract!” have gone unanswered.

Hmmmmm.

So here’s the “bottom line” from the ADN editorial staff:

In defending his actions, the mayor stresses his fiduciary responsibility as trustee to seek payment. What about his fiduciary responsibility to the taxpayers of Anchorage? That comes first.

Mayor Sullivan didn’t seek these circumstances, but he should have been able to deal with them in a straightforward and ethical way.

After heated public reaction, the administration says it has no problem with an independent legal review. Late, but good. We’ll wait for the outcome of that review before we pass judgment on the propriety of the insurance payout.

But this much is clear now: Where there’s a conflict of interest, the mayor has to make clear that he serves the citizens of Anchorage first and foremost. In this case, he did not.

BOTTOM LINE: The mayor’s conflict of interest was clear.

(clap clap clap clap clap)  Well done, ADN.  You nailed it.

[Don't forget to tune in to The Shannyn Moore Show today HERE from 11am-2pm Alaska time. I'll be Shannyn's guest for the weekly "Thursdays in the Mud" segment from 1pm-2pm. Today's special guest is Anchorage Assembly Chair Patrick Flynn! Wonder what we'll be talking about?]

Well, one thing you can say about “Sullygate” is that it’s a big fat mess. And I hesitate to even call it “Sullygate,” because I remember back when I called the mysterious and fishy firing of Sarah Palin’s Commissioner of Public Safety “Palingate.” Then, of course, there were so many gates, they all needed their own name and the firing of Monegan became known as “Troopergate.” So, on the hunch that we may be seeing more “gates” in the future from our not-so illustrious mayor Dan Sullivan, we might need to think of another name. But, until we come up with one,  ‘Sullygate’ will do. Lord knows we all feel “sullied.”

When we last left Mayor Dan Sullivan and the Anchorage Assembly, confusion reigned. The only one who seemed to have a clear head about things was Assembly Member Harriet Drummond. While everyone else was scratching their heads, and looking at the ceiling, and walking around in circles, Drummond said, “Hold on a minute.”

And then she said this: (my interpretation)

So, Mayor Dan. Your father who used to be the mayor died. And now you’re the mayor. And you keep telling us that we have no money and that the city is hurting, and you’re cutting all kinds of things like the fire department and the library among other things. And now, you’re telling the Assembly that back in the 1980s, the Assembly decided that your father was so swell that he deserved a life insurance policy from the Municipality for the rest of his life, even though no other Municipal employee gets this perk.

And then, in 2002, when the insurance company said they wouldn’t insure him any more because he wasn’t actually a municipal employee, and when age and pre-existing conditions made him ineligible for insurance from an insurance company, the city decided to pretend to be one. And you have been paying a premium between $500-1000 a YEAR for this coverage for a total of about $20,000. And now the payout that’s coming to you after your father died is $193,000.

*************************

(Intermission) – We’re taking a little “irony break” to appreciate how Mayor Dan Sullivan has criticized conress’ attempts at health care reform, and yet is happy to take money from the government to cover health issues that disqualified his father from private sector coverage.  We also appreciate the “entitlement” of George Sullivan to get this big payout that is not an option for other former municipal employees.  Just sayin’.

*************************

And then, you tried to slip past the public that this payout from city coffers was about to happen. And you told the Anchorage Daily News that you didn’t even know about this. And then when evidence was uncovered that you did know about it, you said you thought the reporter meant something else.

And then you wouldn’t tell us that you were the trustee when we voted at the Assembly. And now you admit you’re the trustee but you still won’t tell us who’s getting the money.  And you don’t think there’s any reason to investigate this.  And you tell us that there’s a contractual agreement, but you cannot or will not show us the contract, if there IS even a contract.  And we can’t stop the process to figure out what the heck is going on, because you’ve already disbursed the money to people you refuse to identify,  and you won’t give it back?

And then Dan Sullivan said this: (my interpretation)

Neener, neener neener!

And then he gave us this: (my interpretation)

Now, back to Harriet Drummond. She’s asked for something OTHER than the little present above. She’d like someone independent of the current administration to take a look at things and let us know what they find out.

Harriet Drummond, who was the lone Assembly vote against appropriating the money, has introduced a resolution calling for an independent counsel to investigate its legality.

Assembly Chairman Pat Flynn, meanwhile, asked the city attorney’s office to put together a report providing more details on how it all happened. [snip]

Drummond said her resolution should come up at the Assembly’s March 23 meeting. It asks the mayor to return the money to the city “until the Assembly is assured by independent legal counsel that payment of $193,000 in public funds is legally appropriate.”

Dan Sullivan said Tuesday that it wouldn’t be possible for him as trustee to give the money back. “The funds have been disbursed. … it would be violating my fiduciary responsibility to disburse it in any other means other than what is outlined in the trust.”

Sullivan will not list the beneficiaries of the trust, saying that it’s not public information.

For more details on this evolving story, read the latest at the Anchorage Daily News HERE.

And for a very detailed summary and analysis, nobody has taken it farther or done better than Mel Green HERE.

Thanks to Sean Cockerham and Mel Green for diving in. Gifts of virtual soap and Brill-O pads are on the way from the Mudflats.

[Don't miss Anchorage Assembly Member Harriet Drummond on The Shannyn Moore Show HERE or on 1080am in Anchorage.  She'll be Shannyn's guest in the 11:00 hour Alaska time, Noon Pacific, 3pm Eastern]

He’s back in the news again, our mayor is.  It’s like an ongoing reality show, and every day’s a new episode.

Mayor Dan Sullivan has signed a check that empties almost $200,000  from the coffers of his supposedly financially beleaguered city.  That check will go to the beneficiaries of his father, former Mayor George Sullivan’s life insurance policy. Dan Sullivan is the trustee of this tidy sum. This “life insurance policy” isn’t really a life insurance policy at all though, and the contract that is claimed to exist by the mayor’s office, may or may not exist. And the mayor may or may not be a beneficiary of this trust.  We have not seen a contract, and the mayor will not tell us who is getting the money.  Is it him?  We don’t know.  His daughter?  Not sure.  His wife?  His siblings?  We can only guess.

Does this supposed “contract” actually exist?  The Assembly thought so when they voted to release this money, but nobody seems to be able to produce it.  And if it does exist, does the Assembly even have the legal authority to pay the claim to the Mayor’s family?   The Municipality of Anchorage, after all, is not an insurance company.  And what about the legality of entering into this “contract” with a former mayor who was no longer in office at the time, and therefore not a municipal employee? And what makes former Mayor George Sullivan so special anyway?

Dan Sullivan tells us that his father has “literally given his heart” to the city.

Yes, the late Mayor Sullivan devoted himself to public service, but what about the many others in our community who have done the same? What about those who have served as Anchorage Police officers, Anchorage Firefighters, and other municipal employees?  Some of them risk their lives every day for the safety of others. Many have actually given their lives protecting us. What about those who have served for decades doing hazardous duty?  What do they get?   The answer is that they are compensated for their service, and when they leave municipal employment, they do not get an ongoing life insurance policy. 

And the current mayor, in this fiscal environment where municipal workers are losing their jobs, and public services have been cut, is nevertheless perfectly comfortable writing his own family a check for $193,000.

Keep in mind that in 1982, $193,000 was an enormous sum of money, comparable to half a million or more today. And how do we explain the fact that the premium went DOWN from just over $1,000 a year to about $550 a year?  When was the last time your life insurance premiums went down?   Dan Sullivan and his family paid less than $20,000 over twenty eight years for a payout of almost 10 times that amount. “We wouldn’t even be having this conversation today if someone had done this right in 1982,” said Assembly Member Harriet Drummond.

And when she proposed a resolution yesterday to be read at the Assembly meeting of March 23, which asks that serious legal questions about this situation be addressed, what does he say?  He says this:

It’s unfortunate that Ms. Drummond is playing politics with the death of my father. For 28 years, in good faith, we made payments to meet the obligation of this contract. Five administrations have had no problem with this.

Oh, yes. He went there.

One wonders if this policy had belonged to a certain former Congressman Nick Begich, and the trustee of the “policy” was the previous Mayor Mark Begich, would Dan Sullivan be galloping to his defense accusing Ms. Drummond of “playing politics with the de ath of his father?”   Think about that long and hard, because if the answer to this question is “no,” then the obvious conclusion is that Dan Sullivan is doing that very thing himself.

And as far as meeting “the obligation of this contract” we say…. What contract?   May we see it, please?  Show us the contract.

Finally, I’m going to hazard a guess that the reason these other administrations didn’t have a problem with it is because they didn’t know about it.  And none of them had to write a check for $193,000 that tipped them off.

Here is Drummond’s resolution that will be read to the Assembly on March 23.  We should all be thanking her for standing up and asking the tough questions. 

Submitted by: ASSEMBLY MEMBER Drummond

For reading: March 23, 2010

ANCHORAGE, ALASKA
AR NO. 2010–91

A RESOLUTION OF THE ANCHORAGE MUNICIPAL ASSEMBLY TO AUTHORIZE ENGAGING THE SERVICES OF INDEPENDENT LEGAL COUNSEL TO REVIEW AND REPORT TO THE ASSEMBLY ON THE LEGAL AND CONTRACTUAL OBLIGATIONS, IF ANY, AND THE AUTHORITY OF THE ASSEMBLY, IF ANY, REGARDING PAYMENT OF $193,000 IN MUNICIPAL FUNDS TO THE GEORGE M. SULLIVAN IRREVOCABLE LIFE INSURANCE TRUST, AND PROVIDING FOR AN APPROPRIATION.

WHEREAS, pursuant to Assembly Memorandum No. AM 76-2010, the Assembly was requested by and on behalf of the Mayor to appropriate One Hundred Ninety Three Thousand Dollars ($193,000.00) from the Areawide General Fund (Fund 101) for disbursement to the George M. Sullivan Irrevocable Life Insurance Trust; and

WHEREAS, Assembly Memorandum No. AM 76-2010 declared that disbursement would be made under a life insurance contract; and

WHEREAS, Assembly Memorandum No. AM 76-2010 did not disclose that the George M. Sullivan Irrevocable Life Insurance Trust was administered by the Mayor in his private capacity as the son of George M. Sullivan and Trustee of the life insurance trust; and

WHEREAS, Assembly Memorandum No. AM 76-2010 did not disclose that no life insurance policy was in place and no written life insurance contract existed; and

WHEREAS, AR 2010-33 was passed and approved by the Assembly, on February 16, 2010, authorizing disbursement subject to receipt of proper documentation from the George M. Sullivan Irrevocable Life Insurance Trust; and

WHEREAS, the full circumstances purporting to legally obligate the Municipality to make a payout of $193,000.00 in public funds are more complicated than provided in the summary under AM 76-2010; and

WHEREAS, the payout of $193,000.00 in public funds for life insurance without a life insurance policy in place has raised many concerns in the mind of the public and one or more Assembly Members, including these questions:

· What is the legal basis for asserting the existence of a life insurance policy or contract?

· What is the legal basis for asserting a contractual obligation in the absence of a written contract?

· What is the legal authority of the Salary and Emoluments Commission to authorize an employee benefit after employment has terminated?

· Were the legal requirements, procedures and process under Charter Section 5.08 (c) properly followed?

· What, if any, is the extent of a municipal obligation to make payment of $193,000 in life insurance without a life insurance policy?

· What is the current Assembly’s authority to approve or disapprove a life insurance payment in the absence of a life insurance policy?

· Is this disbursement recognized in the FY 2010 General Government Operating Budget?

· What process should be used under the Ethics Code to ensure that an elected public official does not sit on both sides of a municipal transaction?

· Under what public purpose are public funds being disbursed as life insurance? and

WHEREAS, the current Mayor is also actively serving as Trustee of the George M. Sullivan Irrevocable Life Insurance Trust, creating a situation in which he serves on both sides of a significant financial transaction involving public funds; and

WHEREAS, as Mayor, the incumbent is required to represent and act in the Municipality’s best interests; and

WHEREAS, as Trustee of the George M. Sullivan Life Insurance Trust, the Trustee has a fiduciary duty to the Trust to represent and act in the best interests of the Trust and its beneficiaries;

NOW, THEREFORE, the Anchorage Assembly resolves:

1. Because the events surrounding the creation and administration of a special benefit for the Honorable George M. Sullivan occurred after he was no longer in office and over the course of several mayoral successions without a full and public review before the Assembly, the Assembly authorizes an independent legal review to include the following:

· The authority of the Salary and Emoluments Commission, after the mayor or other elected official has left elected office, to authorize a special life insurance benefit;

· Whether a special life insurance benefit was legally effectuated for George M. Sullivan, when, and by whom or under what actions;

· The legal obligations and risks to the Municipality concerning the special life insurance benefit (prior to payment);

· The authority of the Mayor to request an appropriation when the Mayor also currently serves as Trustee of the George M. Sullivan Irrevocable Life Insurance Trust, without disclosure of the potential for conflict of interest;

· The public purpose under which disbursement of public funds is allowed as life insurance proceeds, without a fair market life insurance policy or premium payments.

· The authority of the Anchorage Assembly to approve an appropriation of public funds for this purpose.

2. The services of independent legal counsel shall be selected by the Internal Auditor, the Municipal Clerk and Assembly Counsel under a small procurement contract not to exceed [$5,000 – $10,000], and an appropriation of [$ 10,000] for this purpose is approved.

3. Until the Assembly is assured by independent legal counsel that payment of $193,000.00 in public funds is legally appropriate, the Mayor, in his private capacity as Trustee for the George M. Sullivan Irrevocable Trust, is respectfully requested to return any funds disbursed under AR 2010-33 to a special account to be held by the Municipality.

PASSED AND APPROVED by the Anchorage Assembly this ______day of ____________, 2010.

______________________________
Chair
ATTEST:
____________________________
Municipal Clerk

“I would have questioned this and voted the same way if it had been the Begich Trust, the Knowles Trust, or the Wuerch Trust. It’s that simple,” said Drummond, who expressed her concern about any mayor being on both ends of a significan financial transaction.

Assemblyman Matt Claman will also be introducing a resolution that will send this whole convoluted mess to the Ethics Commission.  So, stay tuned, settle in and pop the corn.  There is more to come.

So, we know at this point that Anchorage Mayor Dan Sullivan just can’t bring himself to fully fund the Anchorage Fire Department. $150,000 is just too darn much money to spend on saving people that fall through the ice, or get lost in the back country, or stuck in the mud, or whatever horrible thing the HazMat team might have to save you from.

So, where SHOULD we be spending our money? Shannyn Moore asks the question.

What the H-E-Double Hockey Sticks?

So, the mayor “respectfully submitted” the purchase of two Zamboni machines, but doesn’t think the “fall through the ice” rescue team should be funded during the winter months? I wonder if his friendship with Assemblyman Dan Coffey has anything to do with it. Coffey is one of the owners of the Alaskan Aces hockey team.

Hey, Anchorage, with the Zambonies we can make ice, just be careful you don’t fall through any if you’re outdoors having a “Big Wild Life.”

What have we learned?

1) There is actually a Mr. Zamboni and his first name is Frank. Who knew?
2) These Zambonies have a tight turning radius which is really impressive.
3) We got these Zambonies at a screamin’ deal because they usually cost more than $77,000 a piece.
4) My city is spending the same amount of money it’s cutting from vital city rescue services that save people’s lives, on having nice shiny indoor ice.
5) My head hurts after I bang it on the desk.