Crime & Courts

Convicted tax evader won’t vacate Skagway assembly seat, sparking a storm

A Skagway Borough Assembly member sentenced to prison for failing to file income taxes has outraged many voters in the Southeast Alaska municipality after he refused to step down from his post so they could pick his replacement in the next election.

Dan Henry, owner of the Skagway Fish Co. restaurant, is supposed to surrender to federal authorities no later than Nov. 1 to begin the 366-day sentence handed down in August by U.S. District Judge Timothy Burgess.

In February, Henry agreed to plead guilty to four counts of willfully failing to file tax returns.

But Henry, 61, has said he won't leave his seat until the last possible moment.

"I have planned on serving my town until such time that I can't, and I promise you that I won't defecate on my desk, or urinate in my waste paper basket," Henry wrote in a letter to The Skagway News last month.

In the letter, Henry describes his lengthy civic service, including nearly two decades in local office, and his work to improve the city's financial standing.

"I have served my community diligently for 26 years, so if anyone who would like to come down from the cheap seats, question my love and respect for Skagway, and match scorecards, bring it! 'You're a daisy if you do!' " wrote Henry, quoting Doc Holliday when he faced a man with a gun.

The letter prompted angry responses in the local newspaper and, according to Haines radio station KHNS, at Assembly meetings.

Some demanded Henry step down in time for voters to choose a successor in the Oct. 4 municipal election. But that opportunity came and went.

Two of the Assembly's at-large seats are on the ballot, but not the one occupied by Henry, whose term expires in October 2017. The situation involving the Assembly was first reported by KHNS.

Three candidates are in the running for the two seats: Assembly incumbent Tim Cochran, David Brena and Orion Hanson.

Letter-writer Mavis I. Henricksen shot back in the newspaper, saying Henry "selfishly denied" the public a chance to vote for his replacement. She said everything he's done has been "self-serving."

Henricksen noted Henry still faces a hearing before the Alaska Public Offices Commission on Oct. 25 over a complaint alleging he falsified financial disclosure reports for four years.

Asserting that he lied on his APOC submissions and avoided income taxes, Henricksen asked, "Have you been honest with the Municipality of Skagway?"

In February, Henry signed a plea agreement that said he did not file individual income tax returns from 2004 to 2012. Henry agreed to pay $600,064.

While the charges are only for Henry's conduct between 2009 and 2012, prosecutors say he admitted to relevant conduct dating back to 2004.

From at least 2008 to 2012, Henry and a family member made cash deposits at a bank — always between $9,000 and $9,900 — in an attempt to avoid the federal cash reports required at $10,000, the plea deal said. It also said Henry filed financial disclosure reports with APOC from 2009 to 2012 claiming he made no more than $1,000 from self-employment in each of those years.

Carlin "Buckwheat" Donahue, former director of Skagway's convention and visitors bureau, said the issue has divided the community over those who support Henry and those, like Donahue, who say he should have stepped down.

"It's people in Skagway against people in Skagway that have never fought each other publicly," he said.

Donahue said Skagway has become the "butt of a lot of jokes" among Southeast communities surprised a convicted tax-dodger is still serving. Donahue said he supports the idea floated by many that Mayor Mark Schaefer choose the third-place candidate to replace Henry, once he goes to prison.

"It's real simple, Mr. Henry should have resigned his seat, and the city council and the mayor should have encouraged him to step down, and they haven't," Donahue said.

"People make jokes about the criminality of politicians all the time and here we have this guy who won't put the community in front of him."

Henry could not be reached by phone Wednesday and did not return an email seeking comment. The mayor did not return phone calls.

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