A follow-up/re-telling of my post from yesterday, with actual links at the bottom.
Sarah Palin is touted as a "clean government" reformer whose insistence on fiscal responsibility has been shaking up Alaska’s corrupt political culture.
The truth, as the Matanuska Maid story illustrates, is quite different, and far stranger.
Matanuska Maid was a failing, state-run dairy that had lost about $600,000 over two years when the state Creamery Board finally decided to shut it down in the spring of 2007.
Sarah Palin felt so strongly that Matanuska Maid should continue operating that she fired the entire state Board of Agriculture and Conservation, which appoints the Creamery Board, just to install new members who would reverse the Creamery Board’s decision and keep Matanuska Maid alive.
Sustaining a money-losing state-run business certainly doesn’t sound like fiscal responsibility. But neither does increasing the price the hemorrhaging enterprise pays for milk, which is precisely what the Creamery Board did, making it even more likely Matanuska Maid would not be able to continue as a viable entity.
In June of 2007, Matanuska Maid eked out a small profit. In July, however, it lost almost $300,000. So, after first going to extraordinary lengths to keep Matanuska Maid alive, then imposing the equivalent of a death sentence (raising the dairy’s already high expenses), Sarah Palin came to the same decision the fired Creamery Board had several months before – Matanuska Maid had to be shut down.
There are several puzzles here crying out to be deciphered. Why would someone so frugal that she sold off the former Governor’s plane support a failing state-run business? Why would she then raise its expenses and, when the expected result occurred - a large loss – abruptly decide to shut the operation down? Was her intention all along to get rid of a white elephant? If so, why didn’t she simply go along with the original Creamery Board’s decision in the spring?
Things just continued to get stranger that fall. Rather than sell off the assets of an obviously doomed enterprise, Palin decided to auction off Matanuska Maid as a going concern because "they would get more that way". Why any frugal businessman or prudent investor would want to purchase a concern that couldn’t make money even with hefty state subsidies apparently didn’t occur to Palin, who set the minimum bid for Matanuska Maid at $3.3 Million. The auction, held in December 2007, attracted exactly no bids, while the doomed dairy continued to operate at a loss. The equipment of the Dairy was finally sold off for $1.4 million.
Most of the equipment, anyway.
For while the state was attempting to arouse interest in the Matanuska Maid that winter, Kyle Beus, who had been one of Alaska’s biggest dairy farmers in more flush times, took over another struggling operation November 1st outside Palmer, near Palin’s own hometown of Wasilla.
Beus faced what seemed like impossible odds: if a state-subsidized dairy was already losing hundreds of thousand of dollars, what were the odds he could make a go of it on his own, when all around him other farmers were going out of business? Not to mention the possibility that someone with deep pockets and a lot of optimism might buy the Matanuska Maid at auction and immediately threaten his livlihood.
But by December the remote possibility of competition(if it in fact even existed) was gone. And by March, Beus began purchasing milk from local farmers, because things really started going his way. According to a March 31st article from the Anchorage Daily News, "the state Creamery Board, which controls Mat Maid property, provided 71 pieces of equipment to Beus' nascent dairy for a monthly fee of $1,966 a month, or $23,601 a year," a lease figure based on an appraisal for most of the equipment at half its market value.
In other words, the Creamery Board appointed by Palin the prior June to give Matanuska Maid a new lease on life ended up giving Beus his own very favorable lease.
Perhaps this was coincidence, but it starts to look like Beus getting back into the dairy business was meant to be.
Even better for Beus, more help was on the way. The Anchorage Daily News reported May 31st that Matanuska Creamery "got off the ground with help from a $643,000 U.S. Department of Agriculture grant and a lot of support from Stevens and from state Senate President Lyda Green, R-Wasilla". Stevens and Don Young even turned out for a big ribbon-cutting ceremony, their presence testifying to the uncorrupt, newly responsible way things now work in Alaska, thanks to Sarah Palin’s vigorously cleaning house.
But while Dairygate looks definitely sleazy to me, maybe I’m taking a parochial, Lower 48 view. To an Alaskan, what Sarah Polin did just looks like an innovation in fiscal management. After all, what happened here, aside from a little deception, insider-dealing and rank hypocrisy?
A failing state-run enterprise supported by Alaskan taxpayers ends up reborn as a private enterprise, run by a struggling local businessman and subsidized by Federal taxpayers.
To the locals, what a win/win: why should Alaskans have to support the local dairy farmers that bring them fresh milk and cheese, after all, when they have Uncle Ted and Uncle Don (and Aunt Sarah) around to make sure Uncle Sam picks up the tab?
Now for some links:
Palin Board firing:
http://dwb.adn.com/...
Milk Price increase:
http://dwb.adn.com/...
Mat Maid sale/no bids:
http://dwb.adn.com/...
http://dwb.adn.com/...
http://dwb.adn.com/...
Mat Maid equipment auctioned off:
http://www.adn.com/...
Beus leases Mat Maid equip:
http://www.adn.com/...
Matanuska Creamery opening/Grant:
http://www.adn.com/...
As I mentioned yesterday, going to adn.com and searching for "Matanuska Maid" gives plenty of related stories. One unexplored angle is the many suppliers, contractors and laborers who provided goods and services to Matanuska Maid and were apparently never compensated.
In reality, not all the locals ended up winning - just the well-connected ones.