In January of 1982, when outgoing mayor George M. Sullivan had just ceded the reins of power to Tony Knowles, the Anchorage Assembly had a novel proposal. Assemblyman Gerry O’Connor presented a resolution recommending the municipality continue life insurance benefits for the former mayor, citing Sullivan’s recent triple bypass surgery which had the potential to render him unable to pass a physical to qualify for private coverage. From the minutes of the meeting, the proposal doesn’t seem to have been controversial; only one assembly member voted against it.

The Salaries and Emoluments Commission approved the measure, and Sullivan was added to the municipality’s group life insurance plan with Aetna. It was a $193,000 policy, and Sullivan paid the premiums on the plan to the city.

Flash forward to 2002, and Aetna informs the city that the former mayor is ineligible for coverage under the plan because he was no longer an employee, according to a recent memorandum from the office of current Mayor Dan Sullivan (the elder Sullivan’s son). The insurance company said it wasn’t carrying an individual policy on him and he wouldn’t qualify for one anyway due to his age. But Sullivan kept paying his premiums to the municipality, totaling $19,662.84.

Late last September Sullivan—who’d served from 1967 to 1981 and presided over the unification of the city and Greater Anchorage Borough in 1975—died from complications of lung cancer.

After his death, the city’s Department of Law prepared a resolution appropriating the $193,000 from the city’s general fund to be paid to the George M. Sullivan Irrevocable Life Insurance Trust.

The resolution passed at the February 16 assembly meeting, but not without controversy. West Anchorage Assemblywoman Harriet Drummond, the only “no” vote on the resolution, said she had spoken to her insurance agent that day, and her agent believed it was illegal for the city to accept the premiums.

“The city pretending to be an insurance agency and accepting premiums for a policy that’s not in place is ridiculous,” Drummond says. “Those are highly regulated organizations.” The memorandum also states that the premium amount dropped from a high of $1,042.20 a year in 1982 to $555.84 since November 1995. This has Drummond alarmed as well. “The premiums went down; that never happens. Insurance premiums always go up.”

Nonetheless, with the resolution approved, the city will pay $193,000 to the George M. Sullivan Irrevocable Life Insurance Trust.

But what does that trust do? Is it charitable? Who are the beneficiaries? Mayor Dan Sullivan’s office referred Flashlight to the legal department, which had the name of the attorney in charge of the trust, but no other information. The attorney, Suzanne McVicker, said information about the trust is confidential.

Flashlight joins Drummond in thinking this is a screwy deal. Particularly when we’re paying out nearly two hundred grand to a fund associated with the current mayor’s family right after the administration cut $150,000 from the fire department’s budget.

“There’s something super fishy about that whole thing and I wish somebody would sue them about it,” Drummond says. “I would have been upset about this if it was to the estate of Tony Knowles or Mark Begich; it’s the principle of the thing. Every employee ought to have this benefit if George Sullivan got it.”

bjk@anchoragepress.com