Begich withheld important information

November 21, 2009 

Assemblyman Matt Claman has said he didn't see anything to suggest that former Anchorage Mayor Mark Begich was hiding something.

Claman was responding to the city attorney's report looking into whether Begich withheld key information from the Assembly before the body approved long-term union contracts.

Does this mean Claman voted to add almost $200 million to the city's future expenses by approving contracts knowing full well we could not afford them?

Either Claman and his fellow Socialist Six members were grossly irresponsible with taxpayer money or Begich misled them about the state of the city's finances.

The recently released city attorney's report clearly documents how Mr. Begich withheld important information. At least three members of the Socialist Six (Pat Flynn, Sheila Selkregg and Mike Gutierrez) confirmed to me Begich withheld from them the e-mail from his chief financial officer predicting huge deficits just before they voted for the contracts. But the newly released report shows the Begich deception went even further.

A city employee described by the report as an assistant controller refused to reverse a journal entry designed to cosmetically improve the books. City Attorney Dennis Wheeler says the assistant controller told him she objected to reversing a journal entry because it would paint a false picture of city finances. The assistant controller insisted the administration go to the Assembly for more money as required by law instead of cosmetically changing the books. She was overruled.

The reversal of the journal entry -- $5.2 million -- was crucial because it masked Begich's dipping into the city's savings account, or fund balance, as it is called, using 2009 money to pay for 2008 expenses. This of course presented a big problem for the 2009 budget. Assembly member Dan Coffey called the move a clear cooking of the books.

Keep in mind Begich has refused to be interviewed by the city attorney and only agreed to answer questions in writing. And yet, astonishingly, Begich had the audacity to avoid answering some of the questions submitted.

The city attorney asks Begich the following:

"Did you speak to Weddleton (his former CFO) about the risk factors on or after December 9 and if so, when and what did you say?"

The city attorney wanted to know how Begich answered his CFO when she asked him if he wanted her to cosmetically change the books and what to do about a potential $100 million deficit. Begich's answer dodged the city attorney's question.

"Did you discuss the risk factors with any other MOA officials on or after December 9 and if so, with whom and when?"

Begich also dodged this question. Begich's refusal to give complete answers to the questions at the heart of this scandal speaks volumes as to his intent to deceive.

Begich claims the Assembly was fully aware of the city's financial woes. He points to an Oct. 17 workshop when he reviewed the city's financial status with the Assembly.

But the report, which goes into great detail of what was said at the workshop, concludes something different. It reads:

"While CFO Weddleton and Mayor Begich have recently repeatedly referred to the Oct. 17 work session as a critical meeting at which the Assembly received the bad news about municipal finances listed in the risk factors spreadsheet, a close examination of that work session does not support their assertion."

The report clearly shows that on at least nine different occasions between Sept. 26 and Dec. 6, 2008, the Begich team had the opportunity to reveal the city's financial woes to the Assembly but did not. The report thus concludes Mark Begich violated the city charter by withholding information.

You'll remember the e-mail uncovered showing CFO Sharon Weddleton asking Begich whether he wants her to cosmetically change the books. The report concludes Begich took Weddleton up on her offer.

It states:

"Although Mayor Begich did not take all of CFO Weddleton's suggestions, (hiring and spending freeze) there is one notable exception. It appears that Mayor Begich did endorse, or may have endorsed, CFO Weddleton's idea to 'cosmetically' adjust department budgets through a reversal regarding PERS."

Keep in mind there are former Enron executives in jail today for cooking books. At the very least, Mr. Begich should have to answer under oath for what he has done.

Dan Fagan hosts a talk show on AM750, KFQD. You can reach him at

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