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State: Claims against KRSA unwarranted

Posted: Sunday, June 20, 2004

The state of Alaska has cleared the Kenai River Sportfishing Association of any wrongdoing in connection to how the organization handles revenues from its annual Kenai River Classic fishing event.

An investigation into KRSA's finances was called for last year by Rep. Kelly Wolf, R-Kenai. Among other things, Wolf charged that KRSA was operating the Classic as a fishing derby on the Kenai River and not filing the proper paperwork to operate such an event on the river.

Jay Prather, gaming group manager for the Alaska Department of Revenue, said Friday that his office examined the information about the Classic and concluded KRSA's event is not a fishing derby, and thus not subject to gaming laws that govern derbies.

"Based on that examination and an opinion from the appeals group of the tax division, we concluded it wasn't necessary for them to have a (derby) permit," Prather said.

Since the Classic is an invitation-only fishing event and not a derby that awards cash prizes the state concluded KRSA has done nothing illegal from a gaming standpoint.

KRSA Executive Director Ricky Gease said the state's opinion was not unexpected, and that it's exactly what his organization has been telling people all along.

"In our mind, what came out was what we were trying to explain to people," Gease said Friday.

Gease said the investigation took up valuable time and money for both the state and KRSA.

Defending itself from the allegations, he said, cost the group roughly $10,000.

"It has cost staff time and finances," he said. "It's just expensive."

Wolf said Friday that from the very beginning of his investigation, he knew the state would not find any evidence of wrongdoing on KRSA's part.

"I always knew the state wouldn't do anything," he said.

Wolf said he believes the state's decision was predetermined, and that KRSA holds too much influence over state officials for a fair investigation to have taken place.

"I think the Attorney General has been bought off," he said.

Wolf, who last week said he would not seek re-election for a second term in the House, said he still believes KRSA is using its position as a nonprofit organization to influence state political matters in an improper way.

Among Wolf's claims are that KRSA is using money earmarked for things like habitat preservation to influence the Alaska Board of Fisheries.

He said that's illegal under federal tax guidelines and he believes KRSA will eventually be held accountable.

"We'll see what the IRS and FBI say," he said.

The IRS has not said whether it believes KRSA's activity is in violation of its tax-exempt status. Rules governing 501(c)(3) charities state "no substantial part" of the group's funds can go toward lobbying legislative bodies.

However, KRSA repeatedly has stated that it tracks how much it spends educating the Board of Fish on fisheries policy, and that the level of funding falls well within IRS guidelines.

On Friday, Gease said as far as KRSA is concerned, any investigation into its financial dealings have been answered, and he believes the organization has been vindicated.

"In our mind, it's like the state said," he said. "'The case is closed.'"



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