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<DIV style="MARGIN-LEFT: 1em; MARGIN-RIGHT: 1em"><A
href="http://www.latimes.com/news/la-na-palinrecords24-2008oct24,0,5536047.story?track=ntothtml">http://www.latimes.com/news/la-na-palinrecords24-2008oct24,0,5536047.story?track=ntothtml</A><BR>
<DIV class=body><I>From the Los Angeles Times</I></DIV>
<H1>Palin appointed friends and donors to key posts in Alaska, records show</H1>
<DIV class=storysubhead>100-plus jobs went to campaign donors or their
relatives, sometimes without apparent regard to qualifications. Several donors
got state-subsidized loans for business ventures of dubious public
value.</DIV>By Charles Piller<BR><BR>October 24, 2008<BR><BR>Reporting from
Anchorage — Alaska Gov. Sarah Palin, plucked from relative obscurity in part for
her reform credentials, has been eager to tout them in her vice presidential
campaign.<BR><BR>"I took on the old politics as usual in Juneau when I stood up
to the special interests and the lobbyists and the big oil companies and the
good old boys," Palin told the Republican National Convention in her acceptance
speech. She said that as a new governor she "shook things up, and in short order
we put the government of our state back on the side of the people."<BR><BR>By
midway through her first term, she had signed an ethics reform bill, increased
oil profit taxes and tweaked Big Oil again by awarding a gas pipeline contract
to a Canadian company.<BR><BR>In some other respects, a Los Angeles Times
examination of state records shows, her approach to government was business as
usual. Take, for example, the tradition of patronage. Some of Palin's most
controversial appointments involved donors, records show.<BR><BR>Among The
Times' findings:<BR><BR>* More than 100 appointments to state posts -- nearly 1
in 4 -- went to campaign contributors or their relatives, sometimes without
apparent regard to qualifications.<BR><BR>* Palin filled 16 state offices with
appointees from families that donated $2,000 to $5,600 and were among her top
political patrons.<BR><BR>* Several of Palin's leading campaign donors received
state-subsidized industrial development loans of up to $3.6 million for business
ventures of questionable public value.<BR><BR>* Palin picked a donor to replace
the public safety commissioner she fired. But the new top cop had to resign days
later under an ethics cloud. And Palin drew a formal ethics complaint still
pending against her and several aides for allegedly helping another donor and
fundraiser land a state job.<BR><BR>Most new governors install friends and
supporters in state jobs. But Alaska historians say some of Palin's appointees
were less qualified than those of her Republican and Democratic
predecessors.<BR><BR>University of Alaska historian Steve Haycox said Palin has
been a reformer. But he said she has a penchant for placing supporters, many of
them ill-prepared, in high posts. He called it "cronyism" far beyond what
previous governors have done and a contradiction of her high-minded
philosophy.<BR><BR>Terrence Cole, an Alaska political historian, said Palin had
in some cases shown "a disrespect for experience."<BR><BR>Administration
officials disputed such criticism. They said campaign contributions were not a
factor in state appointments. Frank Bailey, the state's director<B></B>of boards
and commissions, in speaking for Palin, who was not available to answer
inquiries from The Times, said, "We are always seeking the best-qualified
folks."<BR><BR>In a little-noted sequel to Palin's controversial dismissal of
her public safety commissioner, the governor replaced Walt Monegan with former
small-town Police Chief Charles Kopp of Kenai. The appointment unraveled almost
immediately in what Cole called a vetting catastrophe.<BR><BR>A previous sexual
harassment complaint came to light and Kopp had to resign two weeks after taking
over. Alaska paid him $10,000 in severance.<BR><BR>After another of Palin's
campaign donors and fundraisers landed a civil service job with the state
department of transportation, GOP activist Andree McLeod filed <A
href="http://community.adn.com/sites/community.adn.com/files/McLeod%20Ethics%20Complaint1.pdf">an
ethics complaint</A> against the governor and several aides, alleging that
improper pressure was used to help Tom Lamal.<BR><BR>Lamal, a public school
teacher in Fairbanks until he retired in 2006, was hired as a right-of-way agent
despite reports of internal conflicts over whether he was qualified under state
law.<BR><BR>E-mail messages between Palin aides, obtained by McLeod under the
state public records act, indicate that the hiring was pushed "through the
roadblocks" by a deputy to one of Palin's appointees. And Palin aide Bailey sent
Lamal a congratulatory note saying, in part, "Well now your foot's back in the
door and maybe we can tap you for other things."<BR><BR>Lamal declined to be
interviewed for this article.<BR><BR>Palin spokesman William McAllister declined
to comment because of an ongoing state personnel board inquiry.<BR><BR><A
href="http://www.adn.com/front/story/486163.html">Palin told the Anchorage Daily
News</A> in August that her office merely worked to fix a "glitch" that
prevented Lamal's hiring because of outdated job requirements, and that no
favors were given.<BR><BR>In other state appointments, records show that all
five Palin selections for the powerful Natural Gas Development Authority, which
oversees a proposed gas pipeline project, were donors. They included Kathryn
Lamal, wife of Tom Lamal.<BR><BR>She appointed Kristan Cole, a school friend and
a campaign donor, to the Board of Agriculture and Conservation, a farm
regulatory position that by state law must go to people with strong business
experience. Cole is a real estate agent.<BR><BR>All three appointees to the
Board of Public Accountancy, which oversees the accounting industry, gave to her
campaign for governor, as did all three appointees to the Local Boundary
Commission, which regulates contentious land annexations by local
governments.<BR><BR>Palin reappointed donor Steve Frank to the Alaska Permanent
Fund Corp., which manages Alaska's $29-billion oil revenue nest egg. Frank, a
former Republican legislator, is married to another leading donor, Linda
Anderson, a lobbyist for power and tourism companies, among others.<BR><BR>The
Permanent Fund position earns a $400-a-day honorarium. Most other board and
commission appointees receive per diem and travel expenses. Regardless of
compensation, experts said, such appointments are coveted for their power and
prestige, or as a political stepping stone.<BR><BR>Palin spokesman McAllister
said that most Cabinet-level officials she appointed were not donors. In every
state, he added, people who "apply to serve in a voluntary role are typically
supporters of the governor."<BR><BR>Records show that Palin donors obtained
state-subsidized business loans from the Alaska Industrial Development and
Export Authority, or AIDEA, whose mission is to encourage "economic growth and
diversification of the state, including expansion of small
businesses."<BR><BR>In one case, Jae G. Lee, a former Los Angeles businessman
who is the proprietor of Party Time, a rundown grocery store and bottle shop in
Anchorage, sought a $2.7-million state loan to buy an aging strip mall in
midtown Anchorage. It was on the market because of a glut of similar malls in
the area, all of them losing customers to big-box stores.<BR><BR>Lee and his
wife, who had contributed $3,000 worth of office space to Palin's 2006 campaign,
won the low-interest, state-backed mortgage although it was unclear how the old
mall would add jobs. Lee said he did nothing to improve his acquisition, but
with the cheap loan his profits have been robust.<BR><BR>Lee said he did not
seek Palin's help to obtain the loan.<BR><BR>Two other state-backed loans with
favorable terms and questionable development benefits went to Palin contributor
and local dentist Scott Laudon and his partners. The investors got $1.2 million
to refinance debt on Northern Lights Village -- a gritty collection of shops
including massage and tattoo parlors, a secondhand-clothing store and a video
arcade. Its neighbors along a 1 1/2 -mile stretch of Northern Lights Boulevard
in midtown Anchorage include a dozen strip malls.<BR><BR>Laudon and other
partners also received $3.6 million to buy two automated car washes in
Anchorage. The benefit to Alaska, according to the approval documents, was the
retention of five jobs -- which would have remained without the subsidy. Laudon
declined to comment.<BR><BR>The Times requested documentation on the Lee and
Laudon loans, including interest rates, from AIDEA on Sept. 25, but the agency
has not released the materials and has declined to discuss details.<BR><BR>The
agency "probably looked at it this way: 'This is a good loan that will be paid
back,' " said Bob Poe, former AIDEA chief. "That helps them produce income to
make other loans, much like a bank." As economic development, however, both
loans sound questionable, he said.<BR><BR>Three Palin appointees to the AIDEA
board also gave to her campaign for governor. This year the board picked Palin
donor Ted Leonard as chief executive of the $1.2-billion agency. His principal
credential was having been financial manager of tiny Wasilla, Alaska. Palin
appointed him to the city post when she was mayor.<BR><BR>Agency spokesman
Karsten Rodvik said that Palin was not directly involved in the selection and
that Leonard was the top applicant because of his long and diverse experience in
finance and economic development. He also said that AIDEA managers were "not
aware" of any influence by Palin or her aides on any loans.<BR><BR>Some of
Palin's other appointments have been controversial.<BR><BR>Franci Havemeister,
one of several of Palin's childhood friends tapped for leadership jobs, heads
the state agriculture division. A former real estate agent, she was ridiculed in
Alaska after <A
href="http://www.nytimes.com/2008/09/14/us/politics/14palin.html">it was
reported</A> that she had cited among her qualifications for the job a childhood
love of cows.<BR><BR>And Palin's choice for attorney general, Talis Colberg,
stirred considerable puzzlement: He was virtually unknown beyond her circle near
Wasilla. Colberg, who had a solo law practice and little management experience,
now oversees 500 professionals.<BR><BR>Colberg was criticized by both Republican
and Democratic legislators for his handling of the recent investigation of
Palin's actions in a controversy involving her ex-brother-in-law -- a state
trooper -- and Monegan. A Superior Court judge overruled Colberg's move to quash
investigative subpoenas in the case.<BR><BR>Piller is a Times staff
writer.<BR><BR><A
href="mailto:charles.piller@latimes.com">charles.piller@latimes.com</A><BR><BR>Times
staff writer Doug Smith and researchers Janet Lundblad and Maloy Moore
contributed to this report. </DIV></FONT></DIV></BODY></HTML>