By David G. Hanger
August 09, 2007
Just so the real issue is understood from the get-go, in the event Jerry Jenkins defaults out at Ward Cove our Borough government will be bankrupt, and all you taxpaying citizens of the Gateway Borough will find yourselves in one hell of a mess.
When in April the Borough Assembly decided to go along with Jerry Jenkins's request that he be permitted not to report his $200,000 default to the Borough to prospective lending institutions, he in effect bought himself our Borough Assembly, lock, stock, and barrel. In four months this authorization has not been rescinded. For four months every balance sheet in this state has been as worthless as the paper it is written on, for the governments of the state of Alaska via the Gateway Borough Assembly have usurped unto themselves the right to cheat lending institutions at their whim. If government balance sheets cannot be trusted, what reason is there to assume that private sector balance sheets from Alaska can be trusted either? Indeed, in our current case it is in fact collusion between elected government officials and the owner of a private sector business. When financial institutions become aware that Alaska governments routinely authorize cheating on balance sheets, financial resources available to the citizens of this state will start drying up.
More pertinently, the fact that this Borough Assembly has arrogantly asserted now for four months the right to cheat any banking institution that Jerry Jenkins sees fit puts our Borough Assembly in the unacceptable position of being made participants in a conspiracy to commit bank fraud when Jerry Jenkins so chooses. To allow any single private citizen so much power over our Borough Assembly is insane.
The very reason we have such functionaries as lawyers and licensed accountants and financial advisers is to insure the integrity of financial transactions. A lawyer who dummies up a balance sheet will get disbarred. An accountant or financial adviser will immediately and permanently have his or her license revoked for the same act. Any ordinary private citizen stands a good prospect of going to prison for committing bank fraud.
Our Borough Assembly has in effect asserted that accountants and lawyers, etc. are no longer necessary. They will set the standards as to what information will be made available to lending institutions and what information will not. They, who are above and beyond the law, get to play by their own set of rules.
What makes this interesting at this moment in time is Jerry Jenkins has recently assured us the veneer mill will be up and running some time in August. Does that mean he has recently and finally gotten a loan approved for this project? If so, was the information about his $200,000 default to the Gateway Borough provided to that lending institution? Both questions really do require an answer, and if the latter response is negative, each and every member of the Borough Assembly needs to get an attorney because a crime has most likely been committed.
A lot of damage has already been done by the lies and the cover up associated with Jerry Jenkins $200,000 default. The Borough manager has already and quite appropriately lost his job over it. More terminations are definitely necessary. The first step Jenkins took was to conspire with the Borough Assembly to try to keep this fact off the record. The concern that Mary Lynne Dahl and I shared when this first occurred was why were the basic standards of business integrity being violated by both Jerry Jenkins and our Borough Assembly?
To get her answers Mary Lynne Dahl researched intensely using sources that only a highly skilled specialist even knows about, and what she discovered about Jerry Jenkins just did not add up. Despite being referred to as "light and fluffy" by members of the Borough Assembly, Mary Lynne Dahl's research exposed the lies told about this default and cost the Borough manager his job. There are still way too many unanswered questions.
Between us Mary Lynne and I have almost 50 years of business experience in this town. In one sense or the other we handle your money and your finances, and we have been doing for that for a combined almost 50 years. Jerry Jenkins has been around for a year or so. He wants you to believe we have some reason to be lying to you. He boasts highly of himself, but honest businesspeople don't need to cheat banks.
Part 2: Plug and Play
Who is Jerry Jenkins? What most assuredly he is not is the guy presented to us in this Ketchikan Daily News article of two summers ago; nor is he Christian Joe's "nice young man who is going to bring 20 to 60 jobs to Ketchikan." It turns out that the sole source for the Daily News article proclaiming Jerry Jenkins the great builder of buildings in Boise, Idaho, was Jerry Jenkins himself. The folks in Boise, Idaho, say simply that he is definitely not involved in the ownership of the property and no one recalls Jerry Jenkins being part of the development.
Thereafter he ends up in Vancouver, Washington, with another failed project, and then as recently reported the debacle in Prospect Heights, Illinois. Here again the Daily News does its readership and its community a great disservice with its policy of one-stop shopping when it comes to news sources. For the assurances about Jerry Jenkins' incidental involvement in the Prospect Heights mess the report the Daily News gave the community came from one single source, a lawyer named Michael Zimmerman, who according to reports from Prospect Heights has been paid $25,000 to say nice things about Jerry Jenkins, but who otherwise has every reason to shine on Jenkins detractors because he was deeply involved in this project as the attorney for the City Council of Prospect Heights, and they are the fools who foisted the project on their constituents. Jenkins's involvement in this project was not in any sense peripheral or incidental. Having that city council co-signing a $13.1 million note (stay tuned) is not incidental involvement. Having more than two out of three local voters on a backdoor referendum stopping this project cold is not evidence of incidental or peripheral involvement. Most of Prospect Heights told Jerry Jenkins to go to hell. They are still left with millions in unpaid bond issues, so the Prospect Heights' locals insist, and Jerry Jenkins involvement in all of that was not in any sense incidental or peripheral.
"In my opinion," writes Robert E. Boyer of Prospect Heights, Illinois, "there is a very subtle fraudulent effort by smooth and sophisticated promoters to con revenue dependent municipalities. These promoters prey upon the naïve elected officials of a local government who are grasping at straws to promote income for their communities. This condition is prevalent all over the U.S. Most governments seem to never have enough money to operate. This gives fertile ground for these vultures. These predators find a community that is financially desperate and then look for a situation to promote. Charismatic promoters paint a fantastic dream to these unsophisticated, local officials. When a municipality has no way to create more revenue there is no open land or a way to entice big box retailers, these promoters grasp on a fantasy idea. In the case of Prospect Heights they told our local gullible officials that a Sports Arena would bring in great amounts of revenue hosting sporting events. In your case, it was the re-building of a veneer factory. On the surface, these are legitimate propositions and they will build the facility, if they can. Their first attempt is to try to get private investors. Private investors are not naïve, nor unsophisticated, and are not duped easily. However, these predators usually win both ways. If the enterprise is a success, they have the largest piece of the action and it enhances their reputation, even though the taxpayers paid for it. If it is a failure they walk away with scads of taxpayer money."
Robert E. Boyer is writing about Jerry Jenkins. Overstated or not, it seems the vast majority of voters in Prospect Heights essentially concur with Mr. Boyer. That anyone in Prospect Heights would be so antipathetic toward Jerry Jenkins demonstrates even further that Jerry Jenkins involvement in this Prospect Heights debacle was not incidental or peripheral.
Who is Jerry Jenkins? He's a high school graduate. His claims to "big man" status do not check out very well at all. No evidence has yet surfaced indicating that in the past decade Jerry Jenkins has been involved in any project that was successfully completed by him, but it does appear he has learned to "win both ways." The best description I can come up for him is he's a "plug and play" guy. He plugs in for a while, and he plays. Right now he's playing us.
I doubt seriously that bodes well for us.
Part 3: Mob City?
In the final analysis it does not matter to us how much money Jerry Jenkins made in Prospect Heights, Illinois. Of significance to us and our community is the fact that Jerry Jenkins, despite the misrepresentations to the contrary, apparently does not have a single successful development project completed by him on his resume' in the past 10 years. There is in fact at this time no evidence that he has ever successfully concluded a substantial development project. The four dirtbags who brought us Gateway Forest Products have decades of experience in the forest products industry. Jerry Jenkins has none, yet somehow our Borough Assembly considers this individual capable of developing a veneer mill.
This Borough Assembly is otherwise prepared to make this individual a "big man" in our community. Why? This man has no claim to fame. He is not a successful developer, and the communities he has recently visited have not been pleased with the results. All current evidence indicates he is concerned primarily about Jerry Jenkins, and his level of civic concern is limited to what lines his pockets.
Why is Jerry Jenkins here in Ketchikan? Basically, for one of two purposes. Either he is here to "win both ways," in which case in comparatively short order the community will be poorer as consequence, or he is here to use the money he made elsewhere "winning both ways" to make more money here. Either way, if this is the kind of man the Borough Assembly wants to make a "big man" in our town, it is time to find a new place to live.
What Mary Lynne Dahl uncovered about Jerry Jenkins convinced her that once presented to the Borough Assembly, they would promptly sever relations with Jerry Jenkins, void any existing contracts, and find a more appropriate developer for the Ward Cove property. While I agreed with Mary Lynne that Jerry Jenkins did appear to be the essential problem, even with solid information this Borough Assembly would not necessarily walk away from Jerry Jenkins. I pointed out that in my experience people with failing businesses are so obsessed with the business they will pour their life savings down the rat hole, destroy their marriage, and end all of their personal relationships. Once vested emotionally or otherwise in a project, it is difficult, if not impossible, for many individuals to separate themselves from it. So it has turned out in this case.
We both had numerous conversations with the elected members of the Borough Assembly. Others, in particular John Harrington, went out of their way to avoid us, and never once extended the courtesy of returning our phone calls. It seemed in the early stages several Assembly members were actually disturbed by these revelations, and the weight of this first rush did indeed cost the Borough manager his job. (Roy did not resign, folks. He was forced out. The timing of his departure is a cute bit of gamesmanship that will be discussed later in this article.) But as the issue became public, they wavered.
I had, for example, two separate conversations with Glen Thompson; two conversations the conclusions of which were as different as night and day. In the second conversation Thompson just insisted we had a contract with Jenkins, and that was that. I pointed out that Jenkins was clearly not particularly concerned with his part of the contract, and that there were numerous opportunities for voiding this contract with Jenkins. He just kept insisting we had to honor the contract.
So I asked him simply and straightforwardly, "Knowing what you know now about this man, would you employ this man in your business?" To which he promptly and emphatically responded, "No." Then we got to arguing. So if you won't employ him in your business, why would you even think about doing business with him at the Borough level. Because we have a contract. (A contract modified by the Borough Assembly and the Borough attorney to essentially forgive Jenkins's default.)
So, somewhat exasperated, then I asked, "What's next, Glen, the Russian mob?"
To which he glibly replied, "They're already here."
I hope that revelation makes all my neighbors as comfortable as I feel.
So then I immediately called our mayor, Christian Joe. (I disparage no one with a nickname, and this one is righteously earned, for in talking public policy with this man every second word was a reminder of what a good Christian he is.) I asked him if the Russian mob were in town why weren't efforts underway to get rid of these mobsters? He assured me if they did anything wrong the police could take care of it. What basically I learned from Christian Joe is he is a very naïve and innocent man. He does not seem to understand that the first thing mobsters corrupt is a police force. Nor does he seem in the least concerned that organized crime is setting up shop in this little island community.
To him Jerry Jenkins is a "nice young man who is going to bring 20 to 60 new jobs to Ketchikan." Never before have I heard such a confession of absolute ignorance.
Not merely does he not know the meaning of the word "grifter," he does not even know the word exists.
And members of our Borough Assembly are aware of and could care less that mobsters are setting up shop here. Mob City, anyone?
Part 4: Summary and Conclusions
The Borough Assembly. When the late Ted Falconer first introduced his concept for resurrecting the veneer mill, his proposal called for the renting or leasing of a few acres of contiguous space, and that was it. When Falconer suddenly died, Jerry Jenkins emerged, phoenix-like, and proclaimed he would take on the whole damned cove. From despair to hope in one fell swoop, Jerry Jenkins filled the bill, or at least so it appeared to our Borough Assembly.
But there was no real background check on Jerry Jenkins made by our Borough government, and it turns out Jerry Jenkins has misrepresented himself considerably. Despite that, and because of the fact these elected officials have invested their political futures in Jerry Jenkins, and despite their significant individual misgivings about Jerry Jenkins, they continue to support him. What is good for the community is not important any longer. All that is of concern is what is important to them and their political careers.
This Borough Assembly is the property of Jerry Jenkins. He has compromised them; he has co-opted them; and he has corrupted them. For six months Jerry Jenkins did not pay a dime of the interest he owed the Borough, an accumulated total of $200,000. When that default became public knowledge, the first thing Jerry Jenkins did was to arrange with the Borough Assembly not to tell anyone. This conspiracy to join a private sector individual in violating basic business ethics and the law is sufficient grounds unto itself for the immediate recall of the entire Borough Assembly, mayor included.
Not a member of this Borough Assembly deserves your sympathy. This is the bunch that brought us the Schoenbar disaster, please don't forget, and if you think their judgment in this instance is any better, take a harder and a closer look. These people are in the process of selling out their community to protect themselves. Their judgment cannot be trusted respective Jerry Jenkins and what he is doing out at Ward Cove, and they need to be immediately replaced by individuals who have not been compromised and corrupted by Jerry Jenkins.
New eyes and fresh, open minds need to be involved in reviewing who Jerry Jenkins really is, and whether or not he is the kind of person Borough government should be sponsoring in this town. This Borough Assembly has co-opted itself, and cannot objectively do such a review.
Mike Painter and Glen Thompson cannot be recalled because of the upcoming election cycle. Find someone else to vote for. Mike Painter wanted to forgive newbie Jerry Jenkins's unpaid $200,000 just because. Now if all you who vote for Mike want to pay for the freebies, and the rest of us don't have to? Otherwise, I think you can find someone with better judgment to vote for.
Glen Thompson is a more complicated case, but a flippant attitude toward the encroachment of mobsters is enough for me to want him home. More substantively, he worries about the consequences of some of these things that have happened, but he cannot take that next step to do anything about it. Some lead, some follow. Glen does not lead.
Landis and Kiffer express concern, but show no backbone at all. Apparently, in the case of John Harrington we have an individual who is truly obsessed with the success of the veneer mill operation. It is an absolute imperative, according to reports, requisite to impress certain members of his family with his currently non-existent business prowess. Very strange.
The Borough Attorney and the Borough Finance Director. Both of these individuals need to be fired promptly. We don't need a Borough attorney who is more concerned about covering Jerry Jenkins's ass than he is ours. Nor do we need a Borough attorney who is so brain dead as to allow his Borough Assembly to sign off on Jerry Jenkins not telling prospective lending institutions about Jerry Jenkins' $200,000 default to the Borough.
The Borough Finance Director not only somehow missed $30,000 in unpaid interest payments monthly, but he also totally blew the sales tax projections. We should not be paying big bucks to anyone who is incompetent, no matter the circumstances of their family. A more serious question in the finance director's case is to what extent his "timber" politics affected his actions here.
"Timber Politics." That, of course, is what this veneer mill is really all about, and has always been about. It has now reached a level of ludicrousness that is rather unbounded. What we have is a bunch of septuagenarians and octogenarians who want to resurrect the timber industry's past, and knock down trees by the mile. Just like with the bridge to Gravina Island, it's over, it's not going to happen; and wasting time, effort, and resources on this nonsense is an opportunity cost this region can ill afford. We need to be allocating our resources and our efforts elsewhere.
This recent "National Geographic" article actually pinpoints the reality of our situation pretty nicely. We have 900,000 tourists wanting to be customers stopping by every year. Commercial fishing is good, and around us is a rainforest that will continue to be a national and international political football. It is not going to get cut down, and it is not again going to get cut at the rate it has been cut for a period of 50 or 60 years. The paradigm of the craftsman needs to replace the paradigm of the cutter. The craftsman adds value, the cutter just cuts. Value henceforth must be more a product of craft than of simple cutting volume, and viewsheds should not be cut at all.
For 35 years our local political capital has been wasted on a bridge project that is not going to happen. For more than a decade we have wasted political capital and tens of millions of real dollars trying to resurrect an industry whose time has passed. At this moment we are wasting $27 million to build roads on Gravina Island, so Frank Murkowski can develop his property and Steve Seley and Billy Smart can cut down all the trees over there. Our infrastructure over here is in tatters; there are two-mile long holes in the road; and with this we are trying to encourage tourists to come back and/or tell their neighbors to come give us a visit. (When the trees on Gravina go, the cruise ships will go, too. "It's just too ugly to visit anymore.")
This Borough government seems to think it is its God-given duty to try to resurrect the timber industry. Enough! The decisions made by a committee of boneheads are not better than the decisions made by one bonehead. This Borough Assembly has no capacity to develop a business or an industry, no ability to do so, and no aptitude to do so. All it can do is dole out taxpayer dollars to whatever crumb stands in line next. These people want to be more important than they need to be, and they are wasting all of our time and money doing it.
Let Steve Seley, for example, succeed or fail on his own. Cut off the dole, and see how he does. If he fails, too bad. This economy will be better for it because we no longer have to subsidize a weak, demanding rent seeker. Likewise, this veneer mill whitewash. What barrel we dragged Jerry Jenkins out of is grim enough. The taxpayers of this community do not need to subsidize his nonsense.
The Ketchikan Daily News. Over the decades the Daily News has sued numerous entities, primarily for disclosure purposes, to insist that said entities adhere to the professional standards that are required of that entity. It is sad, indeed tragic, to learn, therefore, that the Daily News does not adhere to the professional standards of journalism or to the journalistic ethics expected from news reporters. Their preferred method is "one-stop shopping." In this case there has been no effort at research on the part of any employee of the Daily News. In the August 2005 article they just regurgitated what Jerry Jenkins said to them; they made no effort to verify what he said.
Even worse is this June 2007 article wherein reporter Andrew Damstedt gives Jerry Jenkins free rein to in effect call both Mary Lynne Dahl and myself liars. There was no effort whatsoever on Damstedt's part to review the information sources that were available to either Mary Lynne or me. All he used was a short letter from Michael Zimmerman, a Jerry Jenkins mouthpiece. No effort has been made by these pretend journalists to research any aspect of Jerry Jenkins's past. They do not even try to verify what he presents them. They just publish it.
There is little point in supporting a newspaper that just shines on its readership and publishes lies that suit the editor's preferred political point of view. If the Daily News wants to be a Chamber of Commerce rag, call yourselves The Chamber of Commerce Rag ("Whatever our masters want, we print."). If you want to make money selling advertising, drop the pretense and just sell advertising: Call yourselves The Local Paper II. What the hell?
Mary Lynne Dahl spent weeks organizing her facts and her information. This is one of the most significant acts of public service (absolutely pro bono) that has been done in this community in quite awhile. Andrew Damstedt wants you to believe she is a liar. She has no reason to lie. She is presenting her concerns to her community because they are of consequence to everyone in this community. For her effort to be discredited by incompetents like Damstedt and Williams, who lack the integrity to even track those sources they have been presented, and then to assert or even infer that Mary Lynne Dahl is lying or misrepresenting the truth is absolutely contemptible. Mary Lynne Dahl deserves the plaudits of her community for her sincere and comprehensive efforts on their behalf.
The Borough Manager. In his letter of resignation the Borough Manager expressed satisfaction at his own performance, then tried to cite a few minor things that would have happened anyway as indications of his success. Well might he be satisfied with his performance since his public sector and private sector personas have long since merged to the point of being unidentifiable, and he and his family have profited considerably thereby. For the rest of us this Borough manager, however, will be remembered as the very worst of an incredibly sordid lot. Inept though they might have been, no other Borough manager earned the nicknames, "The Two Roys," or more simply just "The Roys" for their merging of public and private sector functions.
This guy resigned rather than answer Mary Lynne Dahl's questions. Get him out of there now, and get Mary Lynne's questions answered now. There's a reason he does not want to answer those questions. Wouldn't you like to know what that reason is?
Then, as a community, get actively involved in the search for a new Borough manager. We do not need a Borough manager who uses his public position to line his private pockets, and we do not need a Borough manager who is the property of Jerry Jenkins.
Jerry Jenkins. Name calling time is over, Jerry. Understand that the people who will review your answers henceforth are not boneheads, nor are they members of a clique more concerned about lining their own pockets than their community. Tell us, what substantial development project have you ever completed? Tell us, what experience do you have in the forest products industry? Tell us, why have you misrepresented yourself and your accomplishments so comprehensively? Tell us, have you reported your $200,000 default on your recent loan applications? On any recent successful loan applications?
In response to your query why are people like Mary Lynne Dahl and David Hanger saying these things about you? Because you don't add up at all, Jerry, and I don't trust you. Not only that, but I don't think anyone else in this community should trust you either. Is that straight enough for you? Now, if I get a single honest answer to a single question, I might be willing to reconsider, but all you do is call people names.
David G. Hanger
About: David G. Hanger is a licensed accountant and the owner of First City Tax & Accounts.
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