Open Letter to the Anchorage Assembly

Is it your desire to live in a corrupt state? A state where the measure of your success is judged by how much you can steal rather than how much you can contribute? If so, all you have to do is stay the course because the FBI cannot clean up Alaska or its largest city, if Alaska’s community leaders dig in their heels to resist the cleanup.

I spent several years forcing every member of the Alaska Legislature to look at the corruption in their midst. Most said they couldn’t see what I was talking about. Some said, “not my job” while others said, “There is nothing I can do.” Not one single Legislator was willing to stand against corruption.

When our forefathers created three branches of government it was their expectation that when one of the three branches stepped out of line, the other two branches would take use their collective powers to restore the wayward branch’s compliance with a system of laws. It is a duty of the office you hold to take action.

Had our state’s system of checks and balances functioned properly, had Murkowski’s Attorney General not attempted to obstruct justice, the FBI wouldn’t be in the middle of our state’s business, cleaning up the mess made possible by elected officials saying “not my job.” When the executive branch of government fails to clean its own house, there is no person with a greater obligation to confront corruption in the executive branch of government than you.

When rational people appear to make irrational decisions, it's usually because they have a hidden incentive you didn't know about. For twenty five years, a majority of both houses of Alaska’s Legislature appeared to make an irrational decision to let oil companies take Alaska's oil for a tiny fraction of what it was really worth. However, their decision wasn’t irrational at all. A majority of Alaska’s Legislature justified that the gratuities they took from Veco were worth the tens of billions of dollars the state lost because they did.

Now at seven convictions and counting, the cost of twenty five years of corruption is obvious. Alaska went from massive deficits to massive surpluses on the heels of Veco’s exposure. Those who attribute the surpluses to rising oil prices would be wrong as millions of barrels were leaving Alaska un-taxed. Zero tax equals zero income to Alaska regardless of the price of oil.

About nine months ago, Mayor Begich gave away the city’s economic interest in a Municipal parking garage through a cleverly written lease. A gift worth about ten million dollars to the developers of a 22 story building next door. In the absence of intervention, Jerry Neeser and Mark Pfeffer will be in position to tell prospective tenants of their 22 story building that they control the parking, facing those prospective tenants with the prospect of riding bicycles to work or renting from the only landlords with parking.

Ponder for a moment the reaction from Penny’s shoppers had the Mayor given all the parking within three blocks of the downtown mall to Nordstroms. Would other store owners sue the city? Of course they would.

The days that a mayor can give away a parking garage with confidence jail time won’t follow are gone and it is time for you to decide which side your on. If you want a government run by white collar crime all you have to do is pretend you don’t know what I’m talking about.

Four years ago I wrote an article published in most Alaska newspapers suggesting that Veco was paying bribes to large numbers of legislators and that their bribery was costing this state tens of billions of dollars. The name calling from the rich and powerful throughout the state started before the ink was dry on the newsprint. Since that day you have seen five confessions and three convictions by jury, all from within the ranks of those who said I was dead wrong.

Three years ago I accused Ben Stevens of taking bribes from Veco. His protests were quite similar to Mark Begich’s protests today. Had I not done so, neither Mark nor I would be running for the US Senate because Ben would have already filled his daddy’s shoes in Washington.

Two years ago I wrote an article detailing how Ted Stevens was laundering federal money into the pockets of his boy and his boy’s business partner Trevor McCabe, by funneling the money through a handful of Seattle based fish processing companies, who were funneling money back to Trevor McCabe and Ben Stevens through consulting fees. Six months later the offices of the processors were raided by the FBI and Trevor McCabe is now cooperating with the FBI’s ongoing investigation with hopes of shortening his jail time. ----(Anchorage Daily News, Feb. 10, 2008, McCabe 's attorney, Michael White of Seattle, said, " Trevor has been instructed by his lawyer to continue to cooperate with investigators and make no public comments.")

Over the past year, I have written extensively about John Rubini and the several real estate investments he has made with Mark Begich and Ted Stevens. Through the hand in hand cooperation of Rubini’s carefully selected business partners, Rubini has secured hundreds of millions of dollars worth of real estate that once belonged to the federal government and tens of millions in tax breaks through the passage of special legislation Ben Stevens pushed through the Legislature and a companion ordinance pushed through by Mark Begich.

Begich said the tax breaks were for the troops living in the base housing Ted Stevens had earmarked into the hands of Jon Rubini and Ted Stevens’ brother-in-law for free. However, the only thing Mark’s Tax breaks achieved, was an increase to the bottom line for his business partner Jon Rubini and the brother-in-law of Ted Steven’s, while they raised the rents on the troops.

The other excuse Begich used was that he wasn’t sure if the Municipality could tax Rubini’s privately owned military housing setting on ground Rubini leases from the federal government for one dollar per year. Before you buy into that argument, read the clip below on taxation, directly from Alaska’s constitution:

Article 9 - Finance and Taxation § 5. Interests in Government Property: Private leaseholds, contracts, or interests in land or property owned or held by the United States, the State, or its political subdivisions, shall be taxable to the extent of the interests.

Rubini’s rewards were well worth the $52,000 Rubini dressed up as real estate deals to pay Mark Begich. He gave Begich a small interest in two high-rise office buildings so he could buy him out when he needed a favor, much like he did with Ted Stevens when he bought Ted out of the Arctic Slope Regional Corporation building for $1,050,000. (All public record).

I highly doubt that there is anyone left on the Assembly who isn’t aware that the National Archives purchased Jon Rubini’s eight acres between your chambers and Lowe’s Hardware, believing it was zoned B-3. They paid him $3,525,000 for property he had picked up one year earlier for $1,550,000. They based their purchase price on the belief that the property was zoned B-3 and had been appraised at $4,495,000. The property was R-3 not B-3 and it was not appraised anywhere near $4,495,000.

When was the last time you saw a real estate professional, a mayor, or private investor get caught perpetrating or assisting in the sale of property to the federal government under fraudulent pretenses and not go to jail? – Are you willing to risk the possible consequences of helping Mark sweep this one under the rug?
(For any assembly member who will take the time to look, I will be happy to review documentation that demonstrates decision makers at the National Archives had been advised that the property they purchased was zoned B-3. They were advised of that before they started looking, and during their comparative evaluations, and after the purchase was complete.)

I recently asked assembly chair Matt Claman to review the agreement to eliminate Jon Rubini’s taxes. Claman couldn’t have ran any faster from the subject. That’s exactly what I meant by community leaders digging in their heels to resist the cleanup. When honest people compromise their principles in favor of victory or unity, they have also lost sight of their reason for having cared in the first place.

Turning back to Municipal gifts of parking garages, I am going to sue the Municipality for the illegal appropriation of public assets into the hands of a private person, If the assembly fails to intervene in Mark Begich’s gifts of the Sixth and Seventh Avenue parking garages to Mark Pfeffer and Jerry Neeser.

The appropriation lacks public purpose, was not voted on by the body with the authority to appropriate, and even if the assembly had done so, the assembly would have violated Alaska’s constitutional prohibition barring grants and special privileges of special appropriations to individuals without a public purpose. See clips from Alaska’s constitution below. For details on the gift of the parking garage, go to:
http://citizens4ethics.com/docs/Gift of Parking Garage Explained.doc

Article 1 - Declaration of Rights § 15. Prohibited State Action:
No bill of attainder or ex post facto law shall be passed. No law impairing the obligation of contracts, and no law making any irrevocable “grant of special privileges” or immunities shall be passed. No conviction shall work corruption of blood or forfeiture of estate.

Article 9 - Finance and Taxation § 6. Public Purpose:
No tax shall be levied, or appropriation of public money made, or “public property transferred,” nor shall the public credit be used, except for a public purpose.

Before Begich gave Mark Pfeffer and Jerry Neeser a parking garage, he required the parking authority to lease 67 parking spaces from them at $432 per space, ($29,000 per month) while arranging to rent parking spaces to Mark Pfeffer and Jerry Neeser on the other side of the street at $75 per space.

Before that Mark Begich attempted to persuade the Municipal Assembly to purchase City Hall from Jerry Neeser for about ten million dollars more than it was really worth.

After Jerry Neeser, Mark Pfeffer, and John Rubini landed the contract to build the new convention center, Mark Begich fattened their bottom line by waving dozens of inspection and code compliance requirements that any other developers in town would have been forced to comply with. Begich also gave Jerry Neeser free access to fifteen acres in the heart of downtown to store equipment and construction materials. I highly doubt that Mark Begich would have arranged wavers or free storage for any other developers.

If Mark Begich’s appetite for doing favors for Jerry Neeser, Mark Pfeffer, and John Rubini doesn’t raise every red flag for corruption in your body, there is something dreadfully wrong with your moral compass.

As you may recall, in the case of Ben Stevens, I first tried to recall him for doing Legislative favors for Veco. The Division of Elections, APOC, several Legislators, the Attorney General, and Alaska’s Superior Court, all said he had broken no laws and no crime had been committed. Now even former Governor Murkowski’s chief of staff has pleaded guilty to participating with Veco’s criminal activities and it’s a good bet he won’t be the last.

It would be disingenuous to pretend you don’t sense corruption. And I can only think of one reason why you would say you didn’t. The buck stops with you. Should you fail to act, I will take the city to court and be as relentless at uncovering who is doing what for whom and why as I was with Ben Stevens and Veco.


Ray Metcalfe