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Palin's Small Alaska Town Secured Big Federal Funds

By Paul Kane
Washington Post Staff Writer
Tuesday, September 2, 2008

ST. PAUL, Minn., Sept. 1 -- Alaska Gov. Sarah Palin employed a lobbying firm to secure almost $27 million in federal earmarks for a town of 6,700 residents while she was its mayor, according to an analysis by an independent government watchdog group.

There was $500,000 for a youth shelter, $1.9 million for a transportation hub, $900,000 for sewer repairs, and $15 million for a rail project -- all intended to benefit Palin's town, Wasilla, located about 45 miles north of Anchorage.

In introducing Palin as his running mate on Friday, Sen. John McCain cast her as a compatriot in his battle against wasteful federal spending. McCain, the Republican presidential candidate, hailed Palin as a politician "with an outstanding reputation for standing up to special interests and entrenched bureaucracies -- someone who has fought against corruption and the failed policies of the past, someone who's stopped government from wasting taxpayers' money."

McCain's crusade against earmarks -- federal spending sought by members of Congress to benefit specific projects -- has been a hallmark of his campaign. He has said earmarks are wasteful and are often inserted into bills with little oversight, sometimes by a single powerful lawmaker.

Palin has also railed against earmarks, touting her opposition to a $223 million bridge in the state as a prime credential for the vice presidential nomination. "As governor, I've stood up to the old politics-as-usual, to the special interests, to the lobbyists, the big oil companies, and the good-ol'-boy network," she said Friday.

As mayor of Wasilla, however, Palin oversaw the hiring of Robertson, Monagle & Eastaugh, an Anchorage-based law firm with close ties to Alaska's most senior Republicans: Rep. Don Young and Sen. Ted Stevens, who was indicted in July on charges of accepting illegal gifts. The Wasilla account was handled by the former chief of staff to Stevens, Steven W. Silver, who is a partner in the firm.

Palin was elected mayor of Wasilla in 1996 on a campaign theme of "a time for change." According to a review of congressional spending by Taxpayers for Common Sense, a nonpartisan watchdog group in Washington, Wasilla did not receive any federal earmarks in the first few years of Palin's tenure.

Senate records show that Silver's firm began working for Palin in early 2000, just as federal money began flowing.

In fiscal 2000, Wasilla received a $1 million earmark, tucked into a transportation appropriations bill, for a rail and bus project in the town. And in the winter of 2000, Palin appeared before congressional appropriations committees to seek earmarks, according to a report in the Anchorage Daily News.

Palin and the Wasilla City Council increased Silver's fee from $24,000 to $36,000 a year by 2001, Senate records show.

Soon after, the city benefited from additional earmarks: $500,000 for a mental health center, $500,000 for the purchase of federal land and $450,000 to rehabilitate an agricultural processing facility. Then there was the $15 million rail project, intended to connect Wasilla with the town of Girdwood, where Stevens has a house.

The Washington trip is now an annual event for Wasilla officials.

In fiscal year 2002, Wasilla took in $6.1 million in earmarks -- about $1,000 in federal money for every resident. By contrast, Boise, Idaho -- which has more than 190,000 residents -- received $6.9 million in earmarks in fiscal 2008.

All told, Wasilla benefited from $26.9 million in earmarks in Palin's final four years in office.

"She certainly wasn't shy about putting the old-boy network to use to bring home millions of dollars," said Steve Ellis, vice president of Taxpayers for Common Sense. "She's a little more savvy to the ways of Washington than she's let on."

Silver, reached by phone at his Vienna home, declined to comment. Wasilla's town offices were closed Monday for the Labor Day holiday.

Maria Comella, Palin's campaign spokeswoman, said Palin sought the Wasilla earmarks because she was "working in the best interests of Alaska, working within the confines of the current system."

Palin became a staunch reform advocate after her 2003 appointment to the state's Oil and Gas Commission. She accused another commissioner -- Alaska Republican Party Chairman Randy Ruedrich -- of raising campaign contributions from industries he was regulating. "She realized that the environment around her was no longer what it once was, and elected officials were abusing their power," Comella said.

Sen. Barack Obama, the Democratic presidential nominee, used to secure earmarks for public nonprofits in Illinois, but he announced last year that he would no longer seek earmarks for any entity. Sen. Joseph R. Biden Jr. (Del.), Obama's running mate, co-sponsored $85.6 million in earmarks for 2008, according to one study.

The Palin earmarks came when Stevens was chairman of the Senate Appropriations Committee and Young was a senior member of the House transportation committee.

In hiring Silver, Wasilla found someone who was a member of each lawmaker's inner circle. Silver has donated at least $11,400 to Stevens's political committees and $10,000 to Young's reelection committee in the past decade, according to Federal Election Commission records.

Sliver's firm employed Stevens's son, Ben Stevens, in the late 1990s as a federal lobbyist, according to multiple media accounts. Ben Stevens was not listed on lobbying disclosure forms as having worked on Wasilla earmarks.

The firm became ensnared in the wide-ranging federal investigation of corruption by Alaska Republican officials. Federal agents reviewed records about its other municipal clients, as well as fishing companies represented by Robertson, Monagle & Eastaugh that were close to Ben Stevens.

The investigation has increasingly focused on Veco, a now-defunct energy services company whose chief executive, Bill Allen Jr., pleaded guilty in May 2007 to bribing Alaska officials.

Ted Stevens is awaiting trial on charges that he accepted more than $250,000 in unreported gifts from Allen. Ben Stevens, who has not been charged, has been identified in court documents as having accepted more than $240,000 in consulting payments in exchange for legislative favors while he served in the state Senate.

A Veco executive testified last year in a criminal trial that Allen had ordered him to arrange annual fundraisers for Young. The congressman has not been charged with any crimes.

After becoming governor, Palin became a critic of Young and the Stevenses. She endorsed Young's opponent in a Republican primary last week that is still too close to call, and last year she demanded Ben Stevens's resignation as Alaska's member of the Republican National Committee. She has also criticized Ted Stevens.

In addition, Palin has reversed course on at least one major earmark: After initially supporting the $223 million bridge, which was to connect the town of Ketchikan with a remote island, she reversed course last year and canceled the project because of cost overruns. Critics have dubbed the project the "Bridge to Nowhere."

But her administration remains eager for many other earmarks.

In February, Palin's office sent Sen. Stevens a 70-page memo outlining almost $200 million worth of new funding requests for Alaska.

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