"Grow more moose" is the Alaska Moose Federation's slogan. "Grow more debts" would be more accurate.
Despite receiving millions of dollars in state and federal grants and private donations, the Alaska Moose Federation (AMF) is struggling to pay its debts.
Unable or unwilling to pay its lease on the Tanglewood Chalet in south Anchorage, the AMF was sued in 2013 by the building's owners and appears to have recently settled out of court for an undisclosed amount.
Over the past decade, the AMF has singlehandedly wrested some aspects of moose management from the Alaska Department of Fish and Game. The private, nonprofit organization has demanded custody of orphaned moose calves, attempted to relocate adult moose from Anchorage to rural areas, privatized the salvage of road-killed moose suitable for human consumption, fed wintering moose, packed trails to lead moose from highways and railroad tracks in winter, and made presentations to school children.
It's been difficult to ascertain how well the money was being spent. However, three recent lawsuits and other documents have shed some light on the organization's financial affairs and business practices.
Failed to pay rent for over three years
The AMF moved into the Tanglewood Chalet in October 2004. Then-president Gary Olson named it the Alaska Moose Center. It was going to be his headquarters for an expanding private empire. Olson envisioned building a facility to raise moose calves where visitors could stop by to pet and feed the calves, for a small fee.
Unfortunately, that dream was untenable. The "meadow" north of the chalet turned out to be a marsh inundated by water in late May when moose calves are born. The property also happened to be municipal parkland, and Anchorage Parks and Recreation Department staff raised their eyebrows when they heard Olson wanted to turn a public park into a private petting zoo.
Apparently, according to court records, paying rent was also an unattainable goal. By December 2004, two months after moving in, AMF was in arrears. The organization never made another serious attempt to pay its monthly bill.
Olson had expressed an interest in buying the chalet. However, as stipulated in the lease, after a year, having neglected to pay the agreed-upon purchase option fee, the rent went up. The first year the AMF agreed to pay $6,000 per month plus a share of real property taxes, insurance, and maintenance expenses. The second year the rent and other expenses jumped to $10,000 per month. The third year the monthly rent bumped up to $12,000. In November 2006 the Northwood Group, took back the upper floor of the chalet and reduced the rent to $4,000 a month. The AMF vacated the chalet in April 2008.
By then, according to the Northwood Group, the organization owed a total of $234,092 plus interest. This figure was not contested by the AMF in court.
Chalet owners file lawsuit
That's because in April 2011 the Northwood Group and Olson signed a forbearance agreement in which he agreed to the amount and was given a year to pay it off. After a year, the agreement was extended another year. A second amendment extended the agreement an additional six months. The AMF paid some interest on the debt as stipulated in the agreement; however, the principle amount owed was not reduced.
After waiting more than eight years, the Northwood Group filed suit in August 2013. A year later one of its stockholders, James Fero, replaced Northwood as the plaintiff.
AMF members raised several reasons why they shouldn't have to pay their bill. They asserted that Fero bore "personal animosity" towards Olson, which they believed had colored the terms of the forbearance agreement. Fero's response was that he didn't sign the agreement, the president of Northwood Group, Inc. (NGI), did.
Olson also claimed that a verbal agreement existed between the two parties. He testified he was "told repeatedly by members of the NGI board that if the property sold, the AMF's past due rent would be forgiven." When the chalet was sold in 2013, the AMF claimed it was off the hook. Fero denied that any such agreement existed. Olson was unable to produce any convincing evidence.
Fero consented to an out-of-court settlement. Under the terms of the agreement, Fero and his attorney, Chris Gronning, are not allowed to disclose the amount AMF finally agreed to pay. According to Gronning there is a verbal agreement, but Fero has been waiting a month for the AMF to sign the final paperwork.
A recurring pattern
This wasn't the AMF's first legal contretemps for failure to pay its bills. It was sued by CMM General Contractors in 2012 for refusing to pay an outstanding invoice. According to CMM, Olson had rented several "snowcats" for 464 hours and associated parts and labor. Snowcats are enclosed, fully tracked vehicles designed to operate on snow.
CMM's owners, Robert and Paula Caywood, told the court the AMF had paid $13,715 but was refusing to pay the $22,075 balance. The AMF admitted paying $13,715 after receiving a letter from CMM stating, "... just pay what you think is fair and I will consider it another lesson well learned...."
Robert Caywood has a "life membership" in the AMF, and appears to have made a gentleman's agreement, trusting Olson's verbal promise to pay for using the snowcats. However, Olson's attorney argued that the lawsuit violated the statute of frauds because CMM asked for more than $1,000 without a signed contract. CMM was awarded only $4,128 for cost, prejudgment interest, and attorney fees.
A cavalier use of copyrighted intellectual property resulted in another lawsuit, this time in U.S. District Court. A professional photographer, Mi'chelle Barnes, sued Olson, the AMF, and several board members for using her photograph on AMF letterhead and on a variety of promotional flyers and newsletters soliciting private and corporate donations without her prior written permission, proper photo credit, or payment.
The Anchorage Daily News had published the photo "Stand Off" of a moose standing in front of an Alaska Railroad train with Barnes' permission in 1990. Olson was using a scanned version of the photo from another source. When Barnes learned AMF was using her photo for fundraising and other purposes she hand delivered an invoice to Olson in May 2009, with multiple follow-ups. Olson refused to pay.
Barnes noted in her 2012 lawsuit that Olson and other AMF defendants were familiar with copyright laws, because they claimed copyright protection on AMF's websites, while trampling on the legal rights of those whose images they had pirated.
She asked for the maximum damages allowed under the Copyright Act of 1976 and the Digital Millennium Copyright Act, damage to her professional reputation, to her business, and "for pain and suffering caused by the egregious, intentional and reckless actions" of the defendants. She also asked to be reimbursed for all costs, attorneys' fees, and pre- and post-judgment interest. Barnes eventually settled out of court and isn't allowed to discuss the terms.
One has to wonder whose money is being spent on the AMF's debts, accrued interest, and attorney's fees.
Receiving state grants under false pretenses?
As a private, nonprofit organization the AMF is required to submit an IRS Form 990-PF annually. After failing to submit three years of federal tax returns, the IRS notified the AMF on June 9, 2011, that its tax-exempt status had been revoked retroactively to May 15, 2010.
Nevertheless, the AMF received two state grants in 2011. A $1,304,500 grant funded its orphaned moose rescues. The grant request asked for a $55,000 Ford F-550 4x4 crew cab, a horse trailer, $100,000 for 10 rural holding facilities throughout Alaska, $85,000 for a statewide coordinator, $52,000 for an assistant to the coordinator, $28,500 for fuel, and another $24,000 for a shop to house the truck.
A $573,800 grant funded its purchase of trucks and related equipment for salvaging moose roadkills. AMF already owned three trucks. It wanted 11 more F-350 Powerstroke diesel trucks, a $20,000 tilt-deck trailer, $67,000 for fuel, commercial auto insurance, maintenance, $96,000 to lease shops to park the trucks, $85,000 for a director, $52,000 for an office manager, and $34,800 for office expenses and utilities, $65,000 for a statewide coordinator to oversee operations, and $14,000 for travel to Juneau and conferences.
Former Gov. Sean Parnell signed the capital budget on June 29, 2011. The AMF knew its tax-exempt status had been revoked three weeks earlier, but it spent the money anyway.
By August 30, 2011, Olson was once again "seeking funding in Juneau" according to the minutes of an Alaska Board of Forestry meeting held in Palmer. He asked for the board's support in obtaining a $2 million grant.
According to the Associated Press, the AMF's moose salvage program was "restarted" on Jan. 1, 2012, after funding was restored by the Legislature. The AMF's tax-exempt status wasn't restarted by the IRS, however, until Jan. 15, 2012.
State statutes don't require an organization to be a qualified nonprofit in order to receive state legislative grants. But how many legislators realized they were handing over nearly $2 million so a private corporation could buy trucks, fuel, and office space and pay its salaries?
Have you no sense of decency, sir?
While its 501(c)(3) tax-exempt status was revoked, the AMF actively solicited private donations as well. For example, AMF's website was drumming up donations in November 2011.
Weeks after the IRS reinstated its tax-exempt status, the AMF was still asking donors to make checks out to Alaska Village Initiatives (AVI), another private, non-profit organization that shares office space with AMF.
For example, a colorful handout to BP employees in January or early Feb. 2012 asked for donations to pay for bales of fermented hay. Checks were to be made out to AVI, but mailed to AMF.
AMF pulled a similar stunt at Aquarian Charter School in Feb. 2012, asking kids and parents to donate money to feed moose, but telling them to make the checks out to AVI.
AVI has considered itself a "partner" since at least 2005. Both organizations' logos have been emblazoned on AMF proposals to relocate moose and two AMF advisory board members -- Charles Parker and Tom Harris -- have served as president and CEO of the AVI.
The AMF has also tapped into federal grants in creative ways.
While the AMF's tax-exempt status was revoked, it joined in a "cooperative effort" with the Eyak Corporation and the Native Village of Eyak. The new organization, Orphaned Moose Guardians (OMG), obtained a grant from the U.S. Fish and Wildlife Service for $199,997 in 2011 to build a calf-rearing facility that was never authorized by the Alaska Department of Fish and Game.
No problem. OMG spent at least part of the federal grant on helping its partner, the AMF, relocate and monitor moose calves. The current chairman of the AMF, Bob "Moose" Henrichs, is also a former president of the Native Village of Eyak and Eyak Corp.
The AMF has even secured federal transportation funding. At a March 2011 meeting of the House Transportation Standing Committee, former Alaska Department of Transportation and Public Facilities (DOTPF) deputy commissioner Pat Kemp told legislators that the AMF had received $276,000 from the National Highways Traffic Safety Administration. According to DOTPF, most of this funding was for equipment; however, in 2010 the AMF received $24,100 for "Public Education & Awareness of Moose Collisions and Habitat."
Kemp referred to a letter from DOTPF commissioner Mark Luiken to Olson outlining several reasons why the AMF was unlikely to be eligible for any more transportation funds. The reasons included insufficient documentation or possible double counting of matching funds, mixing eligible and ineligible services, and insufficient documentation of costs.
Despite those reservations, DOTPF is currently negotiating a contract with the AMF for "large animal carcass" removal using federal Highway Safety Improvement Program funds.
Too good to be true
If the AMF was a rousing success story, it might be easier to forgive some of its financial misdeeds and business practices. Unfortunately, its two highest-profile programs -- rescuing orphaned moose calves and salvaging roadkills -- have spent a lot of state and federal money with little to show for it.
According to the Alaska Division of Community and Regional Affairs, the AMF received $673,800 from the legislature in 2011 and 2012 for the moose salvage program, not counting the $276,000 from DOTPF. The AMF's salvage operations appear to be safer than the old system, where carcasses were picked off the road by untrained volunteers. Nevertheless, rather than subsidizing the AMF's program, the state might have put the job out to a competitive bid and let independent entrepreneurs charge individuals or the state for the meat-delivery service.
The AMF has received $1,854,500 in legislative grants to rescue and relocate orphaned moose calves, most of it in 2011 and 2012.
It has often claimed that 75 percent of its calves survive their first winter after release. That's not even close. In the past five years Fish and Game has given the AMF 29 orphaned calves. Seven died or were euthanized due to injuries or diseases acquired before capture. Eleven more were euthanized while being cared for at an AMF facility. Eleven calves were released. At best three calves survived the first winter, which would be 10 percent of the calves acquired by the AMF. However, there seems to be no solid evidence that any actually survived the winter; essentially, they just disappeared.
At best the state has paid only $618,167 to "rescue" each calf, which doesn't include federal funding and private donations. More likely, the money has bought trucks and trailers and paid a few inflated salaries without accomplishing anything.
In 2004 when the Alaska Legislature was preparing to enact the law that allows the AMF to raise and relocate orphaned moose calves, Olson told members of the House Resources Standing Committee, "We will be funding this entire project and reimbursing the state for any expenses that they have." Former Rep. Kelly Wolf, R-Kenai, told Olson that sounded "too good to be true."
In debt, having frittered away several million dollars in federal and state grants and private donations with nothing much to show for it, "Too good to be true" could also be an AMF slogan.
Rick Sinnott is a former Alaska Department of Fish and Game wildlife biologist. The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News. Contact him at email@example.com.
The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com.