Alaska News

New ads in Alaska's U.S. Senate race take on Begich's mayoral legacy

Many of the attacks on incumbent Democratic U.S. Sen. Mark Begich have come from a national angle, seeking to tie him to his vote for the 2010 health care overhaul, and to the flagging popularity of President Barack Obama.

But a new set of negative ads has a decidedly local bent, taking aim at the time Begich spent as mayor of Anchorage, the largest city in the state, with 300,000 people.

The commercials focus on the last few months of Begich's tenure, reviving a years-old debate over his mayoral legacy that pits Begich and his supporters against Republican Dan Sullivan and his allies -- though in this case, the Republican Dan Sullivan is the former city Assembly member who replaced Begich as mayor in 2009, not the former state attorney general and natural resources commissioner who's running as the Republican nominee for Begich's Senate seat.

Begich's opponents say he hid information about Anchorage's shaky finances as the country plunged into a recession in late 2008, and teamed up with his allies on the 11-member Assembly to push through a set of lengthy, lucrative union contracts on his way out the door.

"As mayor, Mark Begich increased spending big time," says Chris Birch, a former South Anchorage assemblyman and vocal Begich detractor, in a recent TV commercial sponsored by the National Republican Senatorial Committee. Another critic says Begich "gave away the farm."

Begich and his backers say no information was hidden, and that a $17 million budget deficit announced two weeks after he left the mayor's office stemmed from a one-time hit based on poor investment returns -- not from the union contracts.

"It wasn't like we were giving away some exorbitant amount," Begich said in a phone interview. "If the economy wouldn't have crashed as quickly as it did, our investment income wouldn't have dropped as rapidly, and we would not have had the gap."

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The Assembly, he added, could have voted to reject the labor contracts but didn't. And while Republicans complain about a rise in city spending over the course of Begich's nearly two full terms, his supporters point out that Assembly members voted six times to approve Begich's budgets, three times unanimously -- with even Sullivan himself at one point concurring and noting he was "particularly pleased on the emphasis that we're a winter city and we need our sidewalks cleared."

Begich was elected mayor in 2003 and in his first year faced his own $33 million deficit, which was closed with a combination of cuts and layoffs, and boosted fines and enforcement.

He's generally credited with spurring construction of the Dena'ina Civic and Convention Center downtown, as well as improving an array of city roads -- all while issuing just a single veto in five-and-a-half years in office.

The attacks against Begich nearly always return to his last few months in office, which coincided with the onset of the 2008 financial crisis. Between August and December of that year -- a period that also spanned the final weeks of Begich's U.S. Senate campaign and nearly two months after his election -- the Begich administration negotiated and the Assembly approved a half-dozen five-year labor contracts.

Begich left office Jan. 3, 2009. By Jan. 14, the new acting mayor, Matt Claman, had announced the city faced a $17 million gap between expected revenues and expenses on its $400 million annual budget, and he and the Assembly were ultimately forced to make cuts to city services and to negotiate concessions from some of the unions that had just been granted raises.

In the aftermath of that process, a series of probes examined whether Begich's administration had access to more information about the financial health of the city that could have been disclosed earlier, when the Assembly was considering the union contracts.

One of the reports, from Municipal Attorney Dennis Wheeler -- an appointee of Sullivan, who replaced Begich -- said the relevant information shared with the Assembly was "greatly minimized by the administration." A subsequent audit by a consulting firm said Begich's administration failed to practice "prudent fiscal management" in certain areas of accounting and reporting on the city budget to the Assembly, though the audit also faulted the Assembly for failing to demand proper reporting.

Begich's opponents cite an email from his chief fiscal officer warning that the city's investment returns for November 2008 had been "horrible," along with an an attached report projecting the amount of a potential budget shortfall; those figures weren't provided to the Assembly at the time.

Begich has said the information in the email was a snapshot that hadn't been discussed by his senior staff, and that Assembly members were already considering cost-cutting measures.

He dismissed the inquiries in a phone interview as "totally politically motivated" and "all about how to describe Sullivan as the great savior for budgets."

Sullivan refused to be interviewed but said in an email: "The investigations revealed serious fiscal mismanagement by Mayor Begich – that's not political, it's reality."

In interviews, several current and former Assembly members offered differing interpretations of Begich's last few months in office.

Claman, who succeeded Begich as mayor and was one of his allies on the Assembly, said he "always was satisfied with the answers" he was getting from the Begich administration, adding that he and his Assembly colleagues had been mindful of the potential impacts of the recession as they debated the contracts.

"That was a question we were asking pretty consistently, all through the budget process, through the course of the fall," Claman said in a phone interview. "In the inquiries I did on the Assembly, I don't think we had enough information to start making cuts and changes."

But Debbie Ossiander, a moderate Assembly member from Eagle River, said she'd relied on "financial acumen and advice of the Begich administration" only to discover afterward that "if there were not lies, there were certainly overt omissions that would have helped me."

"It shook my trust pretty profoundly," she said.

In a phone interview, Ossiander said it was true the Assembly bore some responsibility for approving the union contracts, though she said she and her part-time colleagues did not have the same degree of expertise on financial issues as the professionals in the Begich administration, who had been pressing for the contracts' approval.

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And Ossiander also acknowledged that when it comes to another line of attack against Begich's mayoral legacy -- the consistent rise in city spending during his term, from a $300 million budget in 2003 to more than $400 million in 2009 -- the Assembly was also a partner.

"The Assembly has the last say on this," said Mike Abbott, who served as city manager and deputy city manager under Begich.

"Don't get me wrong: We advocated for yes votes," he added. But when it came to the union contracts, according to Abbott, the Assembly "could have said, 'We're going to slow this down.'"

Begich and union officials defend the five-year union contracts as creating stability in the city workforce.

"You're not sitting there every six months, worrying about their pay," Begich said. "Most big businesses do long-term contracts."

Asked to describe the lasting impact of the union contracts, Sullivan, the current mayor, said in his emailed response that the agreements had boosted the city's labor budget by $15 million a year. Assemblyman Bill Starr, a longtime Begich administration critic, noted the city's rainy-day funds had taken a hit during the recession, and that it "really did take us a while to catch back up."

"I took it personally that this happened on my watch," Starr said in a phone interview.

Patrick Flynn, a moderate Assembly member who's been supportive of Begich, said that in retrospect, "we probably moved a little bit faster than we should have."

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But, he added, "the folks who claim more negative comments are probably being somewhat overly dramatic."

"Had there not been an unprecedented economic event, or series of events, it wouldn't have been a particularly big deal. And even with it, we've managed," he said.

Flynn said the controversy surrounding the union contracts and Begich's departure mirrored the furor that erupted early last year when Sullivan worked with his allies on the Assembly to push through a new law limiting the power of organized labor, over the strenuous objections of union workers.

In local government, Flynn said, "usually everyone's playing from the same rulebook, and things go OK."

"Every now and again, someone gets cute," he added. "And it usually doesn't end well."

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at natherz.substack.com

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