Palin's Ethics Scrapes May Undercut Pledge to End Old Politics
Timothy J. Burger and Tony Hopfinger
Thu Sep 11, 12:01 AM ET

Sept. 11 (Bloomberg) -- John McCain's choice of Sarah Palin as his
running mate sent a signal that he would end business as usual and
cronyism in government. Her record shows the Alaska governor engaged
in some of the same practices she and McCain now condemn.

Palin's office approved a state job for a friend and campaign aide
with whom she shared a land investment, financial records and
interviews over the past two weeks show. She hired a former lobbyist
for a pipeline company to help oversee a multibillion-dollar deal with
that same company.

She named a police chief accused of harassment to head the state
police. And she sent campaign e-mails on her city hall account while
serving as mayor of Wasilla -- conduct for which she later turned in
an oil commissioner on ethics charges.

These incidents raise ``some serious questions about her judgment and
serious questions about her standards of ethics in public service,''
said James Thurber, director of American University's Center for
Congressional and Presidential Studies in Washington. Suggesting a
real estate investment partner for a job ``may be acceptable in
Alaska; it would not be acceptable in Washington, D.C., a place whose
norms she wants to change.''

Palin defeated an incumbent governor, a fellow Republican, in 2006
charging that her party's old guard had committed ethical lapses and
become too cozy with special interests, including oil companies. A
central theme in this year's presidential campaign has been that
Palin's record demonstrates the change a McCain administration would
bring to Washington.

Recent statements by the governor may erode that claim. In her
acceptance speech last week, she suggested that she opposed the
infamous ``Bridge to Nowhere,'' a $223 million earmark for a bridge to
an island where only 53 people lived.

For It, Against It

When Palin, 44, campaigned for governor, however, she said she was in
favor of the bridge. In 2007, she canceled the project in the face of
national outrage. The state never returned the money allocated by the
federal government, with some of the funds going toward other state
and local projects.

And as mayor of Wasilla, a job she held for six years until 2002,
Palin hired lobbyists to get federal funding for local projects.
Wasilla secured $27 million in earmarks for the town of about 9,000
that included a rail project and a youth center.

Shortly after she was elected governor, Palin's office signed off on
hiring Deborah Richter -- who attended college for a year then worked
in bookkeeping and finance jobs -- as director of a division that
distributes dividends to Alaskans from the state's oil-wealth savings
account.

Richter, who said she's known Palin for 13 years, was Palin's
gubernatorial campaign treasurer and ran her inaugural committee.

Sharing an Investment

The Richters and Palins also shared an investment: 30 acres of rural
property near a lake in Petersville, Alaska, worth $47,300, according
to Matanuska-Susitna Borough data.

``It sounds like a patronage deal for someone who ran your campaign;
that's pretty normal,'' said Bill Buzenberg, executive director of the
Center for Public Integrity in Washington. ``What's not normal is that
they have business dealings together.''

No evidence has emerged to suggest that laws were broken in the
appointment, and Richter said she ``didn't go in there with any
promises from the governor or the chief of staff or anybody. I turned
in my resume'' to the governor's transition team ``and I didn't know
if anyone was going to call me.''

``She was qualified,'' said Pat Galvin, commissioner of the Department
of Revenue and Richter's boss. Galvin said he also interviewed other
people for the job and that Richter has done well. He said Palin's
office approved his selection of Richter.

Not Palin's Decision

Palin's gubernatorial spokesman, William McAllister, said the decision
to hire Richter was Galvin's. ``I have no knowledge of land ownership
or college degrees,'' he said.

Deborah Richter gave up her share of the property last September in a
divorce settlement that followed an affair with Palin's legislative
director, John Bitney. Bitney and Richter both acknowledged the affair
in interviews. Bitney said Palin fired him over it; Richter is still
on the job. They are now married.

Last month, Palin signed a law granting TransCanada Corp., Canada's
largest pipeline company, an exclusive state license and up to $500
million in subsidies to proceed with work on a $27 billion pipeline,
which would carry natural gas from Alaska to other U.S. markets.

Once a Lobbyist

Marty Rutherford, the chief coordinator behind Palin's pipeline
effort, once worked as an Alaska lobbyist for a TransCanada pipeline
subsidiary, according to state records. Rutherford, deputy
commissioner at the Alaska Department of Natural Resources, earned
$40,200 as a lobbyist for 10 months in 2003 working for Foothills, the
subsidiary.

Rutherford said in an interview that she only did consulting work for
the company, including reviewing natural gas legislation. She said the
work had no bearing on her future job as coordinator of Palin's
pipeline team.

``I intended to leave state government when I went to Jade North, but
as time went on I realized my heart was in government,'' she said,
referring to the firm she briefly worked for.

Palin told the Anchorage Daily News last December that Rutherford's
work with Foothills wasn't a conflict because it had been five years
earlier.

Trooper Investigation

The governor already has triggered an investigation by the Alaska
legislature into whether she fired the state commissioner of public
safety, Walt Monegan, for not removing a state trooper involved in a
contentious divorce from Palin's sister.

Palin has denied exerting any pressure on Monegan and said she
dismissed him because she wanted to take the department in a new
direction.

Since McCain picked Palin, seven Palin aides have declined to be
interviewed on the matter by an investigator hired by the Alaska
legislature, according to the House and Senate Judiciary committees.

Earlier this year, Palin found herself apologizing for her handling of
Monegan's replacement. About six weeks before she learned McCain
wanted her to be his vice president, she named Kenai, Alaska, police
chief Charles Kopp to replace Monegan.

On July 25, two weeks after being appointed, Kopp resigned amid
scrutiny over a 2005 sexual-harassment complaint against him while he
was chief in Kenai. The complaint resulted in a letter of reprimand
from the city, which Palin told reporters she never knew about and had
believed that the allegations were unsubstantiated, according to the
Anchorage Daily News.

Not a Harasser

In a July press conference, Kopp denied any harassment. ``I've always
done every job I've ever done with honor and integrity,'' he said.
``There is one thing I am not. I am not a sex harasser.'' Attempts to
reach him were unsuccessful.

Asked about these episodes in Palin's career, McCain campaign
spokesman Tucker Bounds lauded her reform efforts. Bounds said Palin
has allowed the public to scrutinize state financial information,
``cut wasteful spending by a quarter of a billion dollars just last
year and ushered in landmark ethics legislation.''

The moment that crystallized her image as a reformer came when she
turned in state Republican chairman Randy Ruedrich after discovering
he was using his state e-mail account to conduct party business.

Palin and Ruedrich were serving together as commissioners on the
Alaska Oil and Gas Conservation Commission, a state regulatory agency,
at the time. Ruedrich resigned from the commission in November 2003,
and was later fined $12,000, according to a 2004 article in the
Anchorage Daily News.

In 2006, Palin found herself asking forgiveness for a similar offense
from her past, according to a July 28, 2006, article in the Anchorage
Daily News. She had sent campaign e- mails from her Wasilla mayor's
office in 2002, when she made an unsuccessful run for lieutenant
governor.

``For any mistakes like that (were) made, I apologize,'' Palin said of
the e-mail controversy in July 2006, according to the Anchorage Daily
News.