WASILLA -- A Washington D.C.-based public interest watchdog group is targeting Alaska Rep. Lynn Gattis over a $65,225 easement payment paid by the Mat-Su Borough on part of her family's Point MacKenzie hay farm that Gattis kept even though the borough never used the land.
Citizens for Responsibility and Ethics in Washington issued a letter Monday asserting the Wasilla Republican and her husband may have broken state and federal laws by keeping the money even though the borough didn't end up needing the easement.
The liberal-leaning nonprofit on Monday filed requests asking the U.S. Attorney's Office in Alaska and the Alaska Attorney General's Office to investigate whether the situation involved violations of theft, fraud, or misappropriation of property laws.
Gattis, a freshman lawmaker running for a second term, issued an angry statement Monday calling the request a politically motivated attack and "old hash served up warm again."
"My family did not 'decline' to return the money that the borough paid us. The Borough is honoring a business contract and we were never asked to give the money back," the statement said. "I have great distain [sic] for Washington DC getting involved in Alaskan projects, especially in such a baseless and inflammatory manner."
She also said there's nothing secret about the easement transaction, which she said she claimed on Alaska Public Offices Commission filings last year.
The problems with the easement first surfaced publicly days before the Republican's easy 2012 win to her first state House seat against Democratic challenger Blake Merrifield.
Borough officials in 2011 had approached the Gattises because they wanted to build a haul road across part of their farm as part of the $300 million rail extension from Port MacKenzie to the Parks Highway. The Gattises agreed to the payment to compensate them for lost hay production, among other things.
Complicating matters: the property is part of the Point MacKenzie Agricultural Project. The state in the 1980s offered up parcels of the shallow-soiled project acreage at low cost, but forced buyers to follow rigid farming-only covenants.
State and borough documents indicate that both the borough and the Gattises knew the limits on land use could pose a problem.
Borough officials have said they knew about the agriculture covenants but went ahead with the easements because there were already other, never-used public easements across the area.
The Gattises asked for, and received, a "hold harmless" clause in the agreement with the borough, Gattis has said.
Regardless, documents show that in May 2012 state agriculture officials notified the couple that the easements violated farming-only covenants on their property as well as provisions of farm loans from Alaska's Agricultural Revolving Loan Fund.
They issued a dire warning: get rid of the easements or pay back more than $600,000 in loans, according to a letter sent in June 2012. Within a few weeks, a contractor on the rail project decided that particular haul road wasn't necessary. The borough lifted the easements without ever using the land.
Borough officials never asked the Gattises to return the money.
They never did.
The more than $65,000 Gattis and her husband received is "not an insignificant amount of money," Melanie Sloan, CREW's executive director, said by phone Monday. "Her response at the time, which is 'I have no intention to give it back. I'll just keep it,' when she'd gotten these loans at reduced rates, it's just not the kind of conduct an elected official should be engaged in."
The Gattis easement got CREW's attention after someone spotted a story about it in a November 2012 edition of the Mat-Su Valley Frontiersman, Sloan said.
Gattis, asked as part of that story whether she had considered returning the money given her status as a political candidate, said she had not.
She said the easement payment was fair -- as was keeping it.
The haul road would have taken land out of hay production, Gattis said. The agreement and corresponding payment should stand, even if the borough didn't end up using the property.
Gattis, who manages rental properties, said she collects rent even if the tenant isn't always there.
"We did what we said we would do. The end," she said.
She said at the time that she and her husband felt the rail project was inevitable and wanted to support the development but also needed to protect their own interests.
CREW, in its letter requesting an investigation from the state and federal attorneys, said Gattis and her husband appear "to have engaged in a scheme to defraud the state of Alaska by selling a property right that belongs to the government."
The group contends the couple knew what they were doing was wrong.
"The deliberate nature of the deception is supported by the Gattises' insistence that the easement include a clause holding them harmless for violations of the agricultural restrictions," the letter states.
The couple may have committed theft, it continues, by selling the borough an easement that infringes on the state's property interest.
CREW has spent years dogging Rep. Don Young, seeking investigative files from the U.S. Department of Justice under the Freedom of Information Act.
Asked why CREW chose to target a state legislator in Alaska over something that happened before she took office, Sloan said the group has gone after legislators in Florida and Pennsylvania in recent years and that Alaska's history of political corruption makes it a good candidate for outside agitation.
"We want to make sure people are aware of all the conduct of their state legislators perhaps before they move to Washington," Sloan said.
Reach Zaz Hollander at firstname.lastname@example.org or 257-4317.
By ZAZ HOLLANDER