Monday, July 06, 2009

Why She Suddenly Quit: Palin's Dealings With Building Firm Under Scrutiny

Despite FBI's Denial That It's investigating Her, Questions Remain Over Whether Alaska Governor and Her Husband Steered Lucrative Contracts to Construction Company That Built the Palins' Home While She Was Mayor of Wasilla in Exchange for Political and Business Favors

Alaska -- and the rest of the nation -- remain abuzz over the abrupt resignation Friday of Governor Sarah Palin (at podium) with just 18 months remaining in her tenure. While some of her hard-line conservative supporters believe that she's "clearing the decks" for a run for the 2012 Republican presidential nomination, her political star may instead be about to burn out: Federal investigators were reportedly probing alleged favoritism by the governor and her husband Todd (right) toward a construction firm that built their home in 2002 while she was mayor of her hometown of Wasilla. The FBI denied that it's conducting such an investigation, but questions about the Palins' dealings with the company remain. (Photo courtesy KTVA-TV, Anchorage)

(Posted 5:00 a.m. EDT Monday, July 6, 2009)
(Updated 10:30 a.m. EDT Monday, July 6, 2009)


How many more damaging political earthquakes can the Republican Party sustain?

That's the question uppermost in the minds of many of the party faithful in the wake of Alaska Governor Sarah Palin's bombshell announcement on Friday that she is resigning with 18 months remaining in her term.

Lieutenant Governor Sean Parnell will take over as governor on July 26.

Palin's announcement came just two days after her political arch-nemesis in the "Troopergate" scandal that has dogged her administration for more than a year filed papers with the state elections board that he plans to run for governor next year.

After getting swept away by a Democratic tsunami last November, the Republicans have been rocked by one political disaster after another. Already reeling from scandals that have taken down two other potential 2012 presidential hopefuls, the news of Palin's sudden departure hit the GOP with the force of an 8.0-magnitude earthquake -- after getting slammed by temblors of 5.8 and 6.2 on the Richter scale, in the form of infidelity scandals that took down Senator John Ensign of Nevada and Governor Mark Sanford of North Carolina.

Palin made the stunning announcement at a hastily called press conference at her Wasilla home as the Independence Day weekend began. During her announcement, Palin cited a rash of new ethics complaints filed against her and public ridicule of her family -- particularly her unwed teenaged-mom daughter, Bristol, who broke off her engagement with her longtime boyfriend, Levi Johnston, the father of her baby -- among her reasons for stepping down.

She also blamed the national media. "You are naïve if you don't see a full-court press on the national level, picking apart a good point guard," she declared, using a basketball metaphor to refer to the flood of negative publicity about her and her family since she was catapaulted into the national spotlight last summer as GOP presidential nominee John McCain's vice-presidential running mate.

Palin's remarks on the media follows a devastating profile of the soon-to-be-former governor in the August issue of Vanity Fair magazine, in which Palin’s closest colleagues ridiculed her with nicknames like “Little Shop of Horrors” and accused her of incompetence and of having a personality disorder.


Only hours earlier, Palin announced that she would not seek re-election as governor next year, fueling immediate speculation in Republican circles that she was "clearing the decks" for a shot at the Republican presidential nomination in 2012 the same way as Minnesota Governor Tim Pawlenty -- another possible GOP presidential contender -- who announced in June that he, too, would not seek re-election.

But Palin's announcement of her abrupt resignation caught everyone by surprise -- and touched off fears among Republicans that yet another one of their party's 2012 White House hopefuls is about to be taken down by the same kind of scandal that took down Ensign and Sanford.

However, the Alaska governor is stepping down under a cloud, as questions continue to swirl over allegations of improper -- and perhaps illegal -- dealings between Palin and an Anchorage-based construction company while she was mayor of her hometown of Wasilla.

According to the online news journal The Daily Beast, federal investigators are probing whether the Palins steered lucrative contracts to Spenard Builders Supply (SBS), a company with close personal and business ties to the couple.

SBS was allegedly awarded several construction contracts by Palin while she was mayor of her hometown of Wasilla in exchange for gifts -- including the construction of the Palins' home on the shores of Lake Lucille in 2002, just months before she launched her unsuccessful run for lieutenant governor.

The Daily Beast reported that federal investigators "have been seizing paperwork from SBS in recent months, searching for evidence" of improper -- and possibly illegal -- dealings between the company and the Palins.

An FBI spokesman denied, however, that the bureau was conducting any investigation of the Palins. "There is absolutely no truth to those rumors that we're investigating her or getting ready to indict her," Special Agent Eric Gonzalez told the Los Angels Times on Saturday. "It's just not true." He added that there was "no wiggle room" in his comments for any kind of inquiry.

Gonzalez would not comment, however, on whether other federal agencies were conducting similar probes.


Public records revealed that SBS supplied the materials for the Palins' house. "While serving as mayor of Wasilla, Sarah Palin blocked an initiative that would have required the public filing of building permits -- thus momentarily preventing the revelation of such suspicious information," The Daily Beast's Max Blumenthal reported.

In a highly-publicized, 2,400-word e-mail she wrote shortly after Palin became McCain's running mate last August, Ann Kilkenny, a longtime civic leader and observer of local politics in Wasilla who has known Palin for 16 years, wrote that a $12 million contract then-Mayor Palin awarded to SBS in 2002 to build the town's sports complex ended up blowing the small city's budget by over $3 million.

Wasilla's population was just over 5,400 during Palin's six-year tenure as mayor, according to the Census Bureau, which now estimates it at just over 9,700. The most expensive building project in Wasilla's history, the sports complex ran up huge cost overruns, including $1.3 million in legal fees, plunging the small city into severe long-term debt.

"Fifteen million dollars-plus for construction of a multi-use sports complex which she [Palin] rushed through to build on a piece of property that the city didn't even have clear title to, that was still in litigation seven years later -- to the delight of the lawyers involved!" Kilkenny wrote.

"The sports complex itself is a nice addition to the community, but it's a huge money pit, not the profit generator Palin claimed it would be," she continued.


The timing of Palin's resignation announcement is even more shocking in that it came just two days after her arch-nemesis in the "Troopergate" scandal, state Senator Hollis French (D-Anchorage), filed papers with the Alaska Public Offices Commission that he intends to run for governor next year.

French was incredulous with Palin's decision to step down. "She's my governor just like she's every Alaskan's governor and to have her quit midstream is kind of un-Alaskan," he told the Anchorage Daily News.

French, who chaired a joint legislative committee investigating the governor's controversial firing of the state's top cop, said his filing was merely "a technicality" and that he had not yet reached a final decision to seek the Democratic gubernatorial nomination. and doesn't mean he will run for sure next year.

"It's just simply a preliminary step towards making a final decision but also keeping the dialogue going ... continuing the conversation I've been having with a lot of people about what sort of governor they want to have in the next election," he said.

French's filing -- similar to that of a potential presidential candidate forming an exploratory committee -- enables him to legally start raising funds for a future campaign. But French said he doesn't intend to raise any money until he makes a final decision on his possible candidacy, which he said he would make "sooner rather than later."


French drew national attention for his leadership in the Alaska Legislature's probe into whether Palin abused her authority as governor in dismissing Public Safety Commissioner Walter Monegan after Monegan refused to fire Michael Wooten from his job as a state trooper. The Palin family had been pressuring Monegan to dismiss Wooten, the govenror's former brother-in-law, because they saw him as a threat to the Palin family following Wooten's bitter divorce from Palin's sister.

The final report by the Legislature's chief investigator, Stephen Branchflower, concluded that Palin wrongfully allowed her husband to use state resources to pursue having Wooten fired, stating that "Palin knowingly permitted a situation to continue where impermissible pressure was placed on several subordinates in order to advance a personal agenda..."

The report also recommended some clarifications of ethics statutes for the future.

However, a separate investigation by the Alaska Personnel Board -- whose three members are appointed by the governor -- determined that Palin had not violated ethics laws, contrary to the Legislature's investigation. The board's chief investigator, Tim Petumenos, concluded in his final report that "There is no probable cause to believe that the governor, or any other state official, violated the Alaska Executive Ethics Act in connection with these matters."


Palin's sudden resignation also follow new tabloid allegations that the governor engaged in an extramarital affair while she was mayor of Wasilla in 1996 with her husband Todd's former business partner.

The National Enquirer claims that it obtained three sworn affidavits from relatives of Brad Hanson -- who co-owned a snowmobile dealership with Todd Palin -- that Hanson had an affair with Palin for several months and that Todd Palin severed his business partnership with Hanson when he learned of the affair.

Both Governor Palin and Hanson have vehemently denied the alleged affair. For his part, Todd Palin has refused to comment about it. But Jim Burdett, a Hanson family spokesman, insists the affair did take place, according to the Enquirer. “I’ve known about Brad having had an affair for a long time, but it wasn’t until just recently that I learned his affair was with Sarah Palin,” the tabloid quotes Burdett as saying.


With a major scandal likely to explode any day now, Palin's sudden departure from politics has sent the GOP's already-murky 2012 presidential prospects into even murkier waters. According to NBC’s Andrea Mitchell, Palin "has told some of her biggest backers in the national Republican Party that they are free to choose other candidates for 2012." But those choices are dwindling at a surprisingly rapid pace."

Palin's sudden departure from politics did nothing to shake what GOP pollster Whit Ayers called "the 'lightweight' monkey on her back." Ayres told the Anchorage Daily News that quitting the governorship was the worst thing Palin could have done if she was serious about running for president in 2012.

"If you're a serious politician and you're seriously interested in higher office, the best thing you can do is as good a job as possible in the current office," Ayers said. "I suppose it frees her from the responsibility of a full-time job. It does nothing to enhance the image she has that she's not material for the president of the United States."

Perhaps Palin is no longer interested in seeking the presidency, suggested Fred Malek, a prominent Republican fundraiser and an adviser to the governor.

"I did have the impression she was not happy in the role in she was in," Malek told the Daily News. "We see her through a political prism, but I think we sometimes forget she's a wife and mother of five kids and has responsibilities that are very dear to her."

Palin's resignation was Topic A on the Sunday TV talks shows. One of Palin's potential presidential rivals, former Arkansas Governor Mike Huckabee, said resigning form the governor's office won't help her dodge scrutiny -- and that, to the contrary, would likely increase it.

Appearing on "Fox News Sunday," Huckabee said that for Palin to not seek a second term as governor was one thing, but to step down with 18 months remaining in her first term "simply doesn't make sense in a conventional political setting."

On the same program, Karl Rove, former President George W. Bush's chief political adviser and a Fox News Channel political analyst, said if Palin's aim by resigning as governor was to "clear the decks" for a presidential run in 2012, then he called it "a risky strategy" -- even as Rove acknowledged that Palin "has never been a conventional candidate."


McCain expressed support for his former vice presidential running mate.
"I have the greatest respect and affection for Sarah, Todd, and their family," McCain wrote in a statement e-mailed Saturday to the Reuters news agency. "I was deeply honored to have her as my running mate and believe she will continue to play an important leadership role in the Republican Party and our nation."

For their part, Democrats could barely hide their glee with Palin's resignation.

"It continues a pattern of bizarre behavior," said Hari Sevugan, a spokesman for the Democratic National Committee. "Either Sarah Palin is leaving the people of Alaska high and dry to pursue her long-shot national political ambitions, or she simply can't handle the job now that her popularity has dimmed and oil revenues are down."

Lanny Davis, a Democratic consultant and a former Clinton White House adviser, said, "The problem that Sarah Palin has with her resignation is the credibility that she can do more as a non-governor than as a governor. That simply makes no sense."

David added that Palin's main problem as a potential presidential candidate "is not her intellect. I think her problem is most Americans, including a lot of Republicans, do not believe she is qualified to be president."

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Volume IV, Number 53
Copyright 2009, Skeeter Sanders. All rights reserved.


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