The Kenai Peninsula Borough Assembly turned down a $10,000 donation Tuesday that was to have been used to hold a symposium on gravel pit operations, saying the money appeared to have strings attached.
The donation arose from an out-of-court settlement of a case brought by the state of Alaska against Anchor Point gravel pit operator Clif Shafer and his company Dibble Creek Rock Inc. Shafer and the company had been accused of diverting water from a gravel pit without a state permit, allegedly affecting the water-production ability of a neighbor’s well, and failing to comply with an order from the Alaska Department of Natural Resources.
According to Alaska Assistant Attorney General Daniel Cheyette, resolution of the case required Shafer to dig up and seal a buried culvert, and an agreement to donate $10,000 toward a public symposium on gravel pits to the Kenai Peninsula Borough. Shafer did not make that donation, however.
Instead the money came from Shafer’s friend, an engineer familiar with gravel operations and the case named Michael Anderson, who presented the borough with the money as a public interest donation in early July.
With the culvert sealed and the donation check written, Cheyette secured a court dismissal of all charges against Shafer and his company. Cheyette said it did not matter to the state from whose bank account the $10,000 came.
Milli Martin, assembly member from Diamond Ridge, wanted to know if accepting the money somehow absolved all legal issues in the case a case in which the borough had no part.
Borough Attorney Colette Thompson said that though the check was in the borough’s hands, it would not be formally accepted until the assembly acted to do so. In any case, the state’s case had been dismissed, she said.
“The particular case is over regardless of what the borough does with the money,” she said, adding that while there was no written document, there were legal expectations of the borough attached to the funds, namely holding the symposium.
That and other issues left some members of the assembly uncomfortable. For instance, Cheyette had told the Clarion in July that no conditions were attached to the dismissal, but wrote in an Aug. 21 letter to Thompson clarifying the state’s position that “the state agreed to dismiss all the charges in the case on two preconditions” the culvert closure and presentation of the $10,000 check.
Assembly President Ron Long, of Seward, expressed confusion over why the borough would be a party to a conditioned settlement that wasn’t a settlement and didn’t have conditions attached.
“This is not a grant. It is not a donation. It’s hush money that was extorted from a borough citizen and laundered two or three times to keep everybody’s fingerprints off it because the state didn’t step up and do what the state was supposed to do,” Long said. “We are not enriched by accepting this money, we are cheapened.”
Assembly member Dan Chay, of Kenai, said there was a danger the borough would be setting a precedent for accepting donations from out-of-court settlements in future cases.
“I don’t think that would be a good thing,” he said.
Grace Merkes, assembly member from Sterling, said she saw no harm in taking the money and putting on a symposium on gravel issues, considering the problems faced by operators and their neighbors and the fact the borough recently rewrote its materials site code.
“I don’t see it as hush money or whatever you want to call it,” she said.
Efforts to reach Cheyette for comment Thursday were not successful.
For his part, Shafer and his lawyer, Charles Tulin, told the Clarion in July they had been fully ready for their day in court, convinced they would beat the state’s charges.
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