The saga of the life insurance payout from the city to the trust of late former Mayor George Sullivan continues…

To recap, in 1982, the assembly asked the Salaries and Emoluments Commission to provide life insurance for Sullivan, who had just been replaced by Mayor Tony Knowles. The commission agreed, and theoretically added Sullivan to the municipality’s insurance plan with Aetna. In 2002, the Wuerch administration became aware that Aetna had no policy for Sullivan, though premiums had been paid to the municipality. The Wuerch administration decided the municipality was legally obligated to fulfill the $193,000 policy, and in February, the assembly voted nine to one to pay the policy to the George M. Sullivan Irrevocable Life Insurance Trust, the trustee of which is current Mayor Dan Sullivan, George’s son. Assembly member Harriet Drummond voted against the payout, and Vice Chair Mike Gutierrez was out of state and didn’t vote on the matter.

When the matter came to light in the Anchorage Daily News and the Press last week (“An insurance anomaly,” March 4), there was some outrage that the Sullivan family was receiving a nearly two hundred thousand dollar payout, while the mayor had recently announced $150,000 in cuts to the fire department. For his part, Mayor Sullivan says he and his family did their due diligence and paid the premiums over five different mayoral administrations and no questions were ever raised. “The same paperwork would have been filed and the same actions would have been taken, so just really it ended up being a fairly odd coincidence my father died a couple months after I was elected mayor,” he says. “I’m serving in dual capacity, but the two aren’t really related at all so I don’t feel any qualms about serving as trustee. They’re related public relations-wise, but not really otherwise.”

The questions that have arisen since the February 16 vote on the payout relate to the summary provided by the city’s Department of Law to the assembly, which asserted that the insurance deal had become a contract between the city and the Sullivan trust, and did not reveal that Mayor Sullivan was the trustee of the fund.

So now, at the next assembly meeting on March 23, Drummond is introducing a resolution to authorize a legal review and report on the legality and contractual obligation of the city to pay the $193,000. Drummond’s resolution asks that independent legal counsel answer whether the Salaries and Emoluments Commission had the authority to authorize a special life insurance benefit for a former employee, and whether the assembly had a legal obligation to pay the money. The resolution also questions the authority of the mayor to request an appropriation to a trust that he is the trustee of, without disclosing that fact. And it asks that the mayor, in his capacity as trustee, return the $193,000 to a special fund until the assembly is assured the payout is legally appropriate. Assembly Chair Patrick Flynn says he's asked Rhonda Westover, the deputy city attorney, to prepare a report outlining how the insurance payout was handled prior to its coming before the assembly, and until he sees that report, he won't be supporting Drummond's resolution.

Flashlight doesn’t ordinarily recommend that readers suffer through watching assembly meetings on channel 10 (Flashlight takes that bullet for you, in the interest of the public good), but March 23 ought to be a good day to give it a watch—you can always DVR Lost.

bjk@anchoragepress.com