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Legislator still questions KRSA

Update From Juneau

Posted: Monday, March 29, 2004

As your legislator, my job is to represent the constituents of District 33 on the Kenai Peninsula. I have worked to do that to the best of my ability, taking into consideration all the different interactions of our sometimes very diverse community. One thing I promised when I took this job was that I would not ride the fence. As a child, I was taught right from wrong and to take responsibility. I also was taught to stand up for what I believe, no matter what the odds.

As your representative, I want to explain to you what I see as the difference between what's right and wrong.

Since 1994, Kenai River Sportfishing Association has been holding a "fishing derby" under the name "Kenai River Classic." The group's former executive director who assisted in starting the Kenai River Classic clarifies this event as a "fishing derby" in his letter dated April 29, 1994, requesting a permit from the state Department of Revenue for this event.

Since this time, Kenai River Sportfishing Association has failed to report gross receipts and the net proceeds on the (schedule AO) operate/multiple-beneficiary permit activity report, as required under the terms and conditions and issuance of a gaming permit in the state of Alaska.

From the beginning, in 1994, management of the Kenai River Classic has raised questions within our community over expenditures and the board members' agenda governing their three top priorities: allocation, conservation and education.

In my investigation of Kenai River Sport-fishing Association's Kenai River Classic, I have discovered several questionable issues surrounding this "fishing derby."

1. A fishing derby is an event that awards prizes to contestants for catching fish.

2. Kenai River SportFishing Association awards prizes to winners of the Kenai River Classic in three categories. These trophies are not of cash, but hand carved trophies having a moderate value between $ 100 and $300 per current market value and the artist's reputation and

popularity. They hand carve these one-of-a-kind trophies for this special event.

3. Kenai River Sportfishing Association's "Release a Hog Program" is a year-round event that pays an individual $900 toward an artificial

mount of equal size for king salmon that is caught and released which is categorized as a "hog" by KRSA's pre-approved guides. The Kenai River Classic also has a catch-release trophy and encourages catch and release of fish categorized as "hogs." This brings up the question of whether players of the event have ever been awarded funds for such a mount, which without question has a value?

4. This event looks to be a lightly veiled political action committee, or PAC, event for lobbyists to present their issues to powerful elected officials while under the guise of a gaming event. Information from past members of the organization state that pairing of players with elected officials takes place during the event. As well as questions about accounting of event funds, questions are raised as to the creditability of board members and their particular agendas.

5. This investigation has gathered legal information pertaining to the handling of gross revenues and net proceeds from gaming events. Gaming revenues are to be deposited in gaming accounts and reported annually to the Department of Revenue. Net proceeds from gaming events must be dedicated within one year to one or more uses as defined in regulations. An excise tax is required to be paid on all net proceeds of gaming activities.

6. Under the Department of Revenue gaming regulations, only net proceeds may be used for education for the organization's and/or membership's well being.

7. A "fishing derby association" means a civic, service or charitable organization in the state, not for pecuniary profit, whose primary purpose is to promote interest in fishing for recreational purposes, but does not include an organization formed or operated for gaming or

gambling purposes. By definition, a fish derby means a contest in which prizes are awarded for catching fish.

Kenai River Sportfishing Association previously reported to the Internal Revenue Service on its 990 forms that it does not engage in any political activity during prior time periods. KRSA has in past years certified that the organization did attempt to influence public opinion

on legislation or referendums.

More recently, the current executive director on Feb. 19 testified to the Kenai River Special Management Area board that less than 2 percent of the program expenses go toward efforts to influence the Board of Fish. While this action raises the question over the annual amount of these political expenditures, KRSA has continually failed to report these expenditures on its 990 forms.

Additional questions continue to rise concerning why this gaming event is using revenues under program expenses to influence legislation and promote allocation. The most recent point is that during testimony on House Bill 396 both the executive director and KRSA's president identified themselves as members from Kenai River Sportfishing Association as they attempted to influence legislation by testifying against a House bill, which is currently in the Alaska State Legislature.

The department regulates political activities by nonprofit organizations that raise revenues from charitable gaming events, if those organizations are filing their reports. The salary of the director and expenses for their volunteer board members who continually attend Board of Fish meetings and hold legislative receptions for elected officials here in Juneau raises a stark alarm as to where these funds are being generated. Which brings into question the honored reputation of the organization and possibly its members.

These questions and a great many others have been raised during this investigation in regard to the accounting of the Kenai River Classic revenues which generates its entirety of funds from a public resource within a critical habitat area with little to no government oversight. Up to now KRSA enjoyed strong political support until one lone legislator had the fortitude to make a stand against the political consequences and questionable actions of the KRSA board of directors.

Rep. Kelly Wolf, R-Kenai, represents District 33 in the Alaska House of Representatives. He was elected in 2002.



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