Sullygate: MOA Dept. of Law analysis; Ethics Board rules against Mayor Sullivan

I’ve acquired a copy of the MOA Department of Law memorandum prepared at the request of Assembly Chair Patrick Flynn for Flynn and the rest of the Assembly by Rhonda Fehlen Westover, Deputy Municipal Attorney, and sent on to them yesterday, & now I’ve uploaded it to my website.

• 3/22/2010. AR 2010-33: “Memorandum to Assembly Chair Patrick Flynn and Assembly Members re: Appropriation for George M. Sullivan Irrevocable Life Insurance Trust” by Rhonda Fehlen Westover, Deputy Municipal Attorney. Municipality of Anchorage, Office of the Municipal Attorney.

I’m on my laptop right now, which doesn’t have the full Adobe Acrobat software on it, so I haven’t been able to make bookmarks in the document for easy navigation.  I’ll do that later from home.  The document includes Westover’s background on the case and how the resolution calling for the $193,000 payout was prepared for the February 2, 2010 introduction in the Assembly; analysis providing the legal reasoning for why the MOA Department of Law believed the Muni to be obligated to pay out; & lots of attachments.  Some of the attachments are ones we’ve already seen, but there are a few additional ones.  For example, we now have the paperwork showing that the original trustee of the George M. Sullivan Irrevocable Life Insurance Trust was former Municipal Attorney Theodore Berns.

I’m still reading it, & I don’t have time to write any real analysis of it.  The legal reasoning makes some sense to me (myself being a non-attorney); though I wonder if it’s a full analysis in light of Alaska Statute of Frauds, AS 09.25.010.  Any attorneys out there who can read the memorandum & the Alaska Statute of Frauds & tell us what you think?

But the opinion of the MOA lawyers is very clearly that the MOA was obligated to pay, given that they could find no indication that MOA had ever informed the Sullivan Trust or its agents that George Sullivan was not in fact covered by the Muni’s group plan with Aetna.  While I remain suspicious of a backroom deal, so far there is no proof of one.  But there are still outstanding questions that to my mind demand investigation, such as why Aetna was apparently never told that Sullivan was a nonemployee until the fact came to light at latest in 2002; why Aetna in 2002 reported never receiving information about Sullivan such that he was not included in the risk for calculating premiums; or why his so-called “premiums” were reduced in 1992 and 1995.  As Harriet Drummond said at the February 16, 2019 Assembly meeting,

I was so concerned about this item that I called my insurance agent today and talked to her quite a bit about it.  I sent her the documents.  She was number one, shocked that in paragraph 3, on the second page where it said the premium varied from $1,042,00 in 82 to $555.00 since 1995, she says how did that happen?  Insurance costs never go down, they always go up.  And, her question to me, was how did the Municipality continue to accept premium payments from whom if there was no policy in existence, it was illegal for the Municipality to accept premium payments because the Municipality is not an insurance company, and is thus acting inappropriately. [Ref #1, page 7]

Even if Mayor Dan Sullivan committed no wrong, it’s worth an investigation to find out why and how the Municipality failed in its reponsibilities.  Many of the questions lead to Susan Lindemuth, who was Manager of Records and Benefits for the Muni from 1970-2002.

Meantime, the Anchorage Daily News has just reported that the Ethics Board has ruled against Mayor Sullivan, stating that

the mayor should have disclosed a potential conflict when he first presented his father’s death certificate to the city benefits department to start processing of the life insurance claim in late 2009.

The mayor should have told the Ethics Board about the potential conflict then because city employees who work under his direction would have to act on the matter, the board said. [Ref #2]

Should be an interesting Assembly meeting tonight.

Update: Livetweeting Assembly Meeting

Assuming the wifi connection at the Assembly Chambers will be decent enough, I’ll be livetweeting the meeting.  See my Twitter feed @yksin.

References

1. 3/22/2010. AR 2010-33: “Memorandum to Assembly Chair Patrick Flynn and Assembly Members re: Appropriation for George M. Sullivan Irrevocable Life Insurance Trust” by Rhonda Fehlen Westover, Deputy Municipal Attorney. Municipality of Anchorage, Office of the Municipal Attorney.
2. 3/23/2010. “Board rules against Sullivan in trust deal” by Rosemary Shinohara (Anchorage Daily News). Story as of 3:23 PM.