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Viewpoints: Letters / Opinions


By David G Hanger


September 02, 2021
Thursday PM

Let’s start with a simple observation: I can sell $4 million worth of cars & trucks or $2 million of tourist trinkets and still only make $30,000 to $80,000 for myself. In actuality such a level of sales would represent $200,000 or so in salaries, so it becomes a question of distribution to employees and the number of employees retained that determines whether an owner-manager of such a business entity earns $30,000 or $80,000. Squeezing it more than that, you are fast into shoddy goods territory.

The main point: Gross sales income can be very high depending upon the cost of the product sold, but the net return on these types of operations is a few pennies on the dollar. The take-home pay in these operations is real ordinary, and sometimes much less so.

So a whole bunch of business operations here in Ketchikan have purportedly been compromised by the lack of cruise ship business, and the first go-round of Trump’s stimulus distributions I found quite objectionable because the majority got nothing at all; those connected or semi-connected to a group of some sort might have been able to snarf $50,000 to $150,000 (fishing groups primarily); and a handful of tourist outfits got hundreds of thousands of dollars, 80% to 90% of which went into owner-manager or family employee pockets.

At this point fishing groups thus supported got a more or less reasonable subsidy, while tourist entities in too many instances were awarded annual salaries three to five times what they make annually when they are actually working.

It gets even more curious the more closely we look.

In a brief phone conversation I had with the Ketchikan Borough Manager back in February on an unrelated subject he volunteered to me the fact that as these government free money programs came on line last year numerous businesses in Ketchikan came in and amended their quarterly sales tax reports to increase their quarterly revenues, apparently some doubling and tripling them. I thought it was kind of silly of him to volunteer such information, but he was quite blithe about it, seemingly unaware of the consequence of what he reported.

The first question, of course, is how many businesses and which businesses? Plural was definitely emphasized; literally shocked at so many.

The more relevant question, of course, is who were these people defrauding, the KetchikanBorough and the City of Ketchikan, or the Feds? (Why nothing was done about this at the time is an interesting sidebar.)

The Trump stimulus stunk because the mal-distribution was horrid and intentional; the rich got richer, then got richer still. Locally, a fair number of new houses have been bought or built. (Don’t you wish.)

Next we have Biden and the Democrats Restaurant Revitalization Fund and as handled locally this is downright looney-tunes. A significant reason for this is management through the Small Business Administration is being run by a bunch of monkeys. Restaurants do not maintain large inventories; they are selling a perishable product. What they do maintain is a very solid distribution network so they can procure what they need on a timed delivery basis.

So this insane crap of basing these restaurant grants on gross income should be apparent to everyone. Restaurants do not maintain large inventories. A legitimate argument could be made that their suppliers might need a subsidy due to lost revenue, but beyond net income and facility cost a non-operating restaurant has no costs at all. Thus when they receive a grant covering their gross income, these folks are lining their personal pockets big time. In each instance they will pay themselves $100,000 a year using government funds for the next three years. Next they will pay their family member employees $100,000 a year for the next three years, and when it comes to a certain outfit at Ward Cove, he has a lot of family members on the payroll or on the board.

Sitting on your rear and doing nothing has suddenly become the most profitable game in town, particularly for those who own or operate something that might conceivably be called a restaurant or on-site eating establishment. Here is a list of our local newly enriched piglets:

The Landing Restaurant, LLC $1,147,010.53
Salmon Capital Inc. 855,810.00
Ketchikan Hospitality Inc. 744,936.68
Florida Bill, LLC 678,616.00
Fish Pirate’s Saloon LLC 507,616.00
Good Coffee Company 460,161.72
The Asylum LLC 259,873.00
Alaska Crepe Company 254,376.23
Dallas Hoffman 216,768.78
Inside Passage Brewing Company, LLC 188,087.94
Porte O’Call LLC 161,023.62
KUB Inc. 148,040.10
Polar Treats Inc. 142,893.00
Asian Garden Sushi Bar 132,355.00
LAM Corporation 112,054.45
Oceanview Restaurant LLC 95,527.00
Victor E. Klose 74,199.00
Debra Rahr 65,080.54
Chicos Mexican Restaurant 29,813.00
Jia-Huei Li 28,513.02
Marjori Jackson Blue Sky Ltd. 20,825.55
New China LLC 9,809.00

Are you getting upset yet? When the remaining professionals in this town see this list you will be even more upset at the consequence.

Local media has been aware of this list for about a month now, maybe a little longer, and there has been considerable consternation already expressed. As well there should be.

Not sure exactly what makes The Landing or Annabelle’s 8 to 12 times the restaurant that Oceanview is, but I think what Oceanview received is a reasonable amount to cover lost net income and some expenses. Chicos should have been good for twice as much at least. Both of these are real restaurants, whereas a lot of these six-figure operations are holes in the wall. Rest assured professional people would be dishing out coffee and doughnuts if they were getting paid $200,000 a year.

I have even had a family member defend the dole-out to The Landing, but that amount represents more than 125 meals a day at $25 a plate, and that is BS insofar as I am concerned. What reinforces that assessment are the substantial property and land purchases made by yours truly, according to local reports by both parties even.

Florida Bill LLC gets a dole-out of $678,616.00. This is a guy who lives in Tennessee who comes up here and cooks crab for tourists in the Salmon Landing Building for a few months a year. Maybe he does gross $675,000 a year, but I am skeptical. The reason for that is I think a lot of these high-end numbers are so out of line because they took their seasonal monthly revenues and annualized them, thereby in effect increasing their gross income by as much as two-and-a-half times. How do you do this? Take what you made in five months, average that monthly, then multiply times 12 months, net effect 2.4X increase. Nifty, and maybe not legal.

So let’s say Florida Bill grosses $675,000 a year. By the time he pays for his facility, his staff, and his crab he is lucky if he makes $50,000, with super efficiency $75,000. Now this person can sit on his rear for three years, pay himself $100,000 a year in salary, then his spouse, his mother or his father, or whomever, the same amount. $600,000 in his pocket by March 2023 while you are scrabbling and busting your rear for what, one-half to one-eighth that amount in the same period of time?

If you want to know what a socialist looks like, just look at the six-figure listees on this list. These are the people who are going to strut their stuff around town for the next five years and then some, for doing nothing at all while how many of you have struggled so desperately.

Salmon Capital Inc. is that operation next to the Coliseum Theater downtown. This is a tourist trinket shop that sells salmon in cans or packets to tourists. At $855,810.00 this outfit is #2 on the SBA’s list. Why? Indeed how? The argument that certain relative made to me about The Landing is they made considerable effort to retain their substantial staff, and that is a reasonable presentation; there is no substantial staff at Salmon Capital Inc. I don’t begin to understand how it calls itself a restaurant. Any locals ever had lunch or dinner there, under the umbrellas where not long ago was a parking lot? He has also installed a back-yard propane grill. Has it ever been used? Is he licensed by the City to prepare and serve food?

Several comparable businesses whose applications were denied have stridently objected to the acceptance of this application on the basis that this guy is an ethnic minority. I don’t buy that for an instant; he may be an immigrant, but he is not a member of a deprived minority group. These comparable businesses have also asserted that their revenues are comparable to his, but their applications, based on prescribed formula, were for much smaller amounts. Were seasonal sales revenue annualized to increase the application amount by 2.4?

Some of these comparable businesses were outraged at me for refusing to change their tourist shop SIC designations (Standard Industrial Code) to restaurant SIC code. I made the simple point, do you want an honest accountant or a dirt bag crook handling your finances? I can assure you my office, and I know the office up the street, would never consider doing something like this. I am not so sure about others, here and elsewhere.

There has been considerable gamesmanship resulting in very disproportionate distributions of funds. This hole-in-the-wall between the Coliseum and our nouveau riche’ Salmon Capital got six-figure money. Polar Treats gets more than $142,000; that is not absurd, that is obscene. This operation normally pays very moderate salaries to its owners.

As reported to me by highly reliable sources in the media, how the hell did Ward Cove get $4 million out of nothing? Last I looked multiply a trillion times zero , and you still end up with zero. But this group who can’t stop tossing their weight around gets $4 million, all of which can be doled out to family members in $100,000 chunks for 2021, 2022, and 2023. My trades are full of instructions on how to hire family members, so do not try to fool me that this is not happening. As accountants we are managing this happening; and the price is going up.

I think there is a lot more to what is going on with the Ward Cove group. If you have not noticed,in my opinion, John Binkley is a bully, big time, and he already owns a fair number of our local politicians, starting with College Boy. (He will never be a college man.) Since when do two U.S. Senators and the Governor of this state show up for a private business affair? That has never happened in Ketchikan’s history so far as I know.

I would suggest to the electorate that the main issue in local politics in determining who to vote for is who is for and who is against what is going on at Ward Cove. Fire everyone who is for because this operation has nothing to offer Ketchikan but a bad reputation and considerable misery. Next, none of the outfits on this list who have been gifted six-figure money or more deserve one more dime of stimulus from any source, and fire or recall any assembly or city council member who thinks otherwise.

I hear the president of Norwegian Cruise Lines was on board for this first landing in Ward Cove. I also heard he got an earful from a whole lot of disgruntled passengers who recognized Ward Cove for the junkyard that it is. So I gather the first step is to bypass the town completely and come in from the north end, so the tourists don’t even see the town. (One local merchant insists Ward Cove has its own post office, so Norwegian advertising Ketchikan as a landing port is false advertising that the City and the Borough should not tolerate. I think he has a very good point that should be acted upon immediately.)

All along John Binkley has been promising the downtown merchants that there would be plenty of shuttle buses moving passengers downtown. I demonstrated succinctly months ago that there is not enough road space between the entrance to the old pulp mill and the post office to even fit the buses necessary to accomplish this, so I am not in the least bit surprised that only now the local merchants are waking up to how much of their market share is being locked up by Godspeed, Inc.

This group from Fairbanks is bound and determined, folks, to run the rest of you into the ground. They offer nothing new and are only taking away from you what you collectively created over 60 years. Nor does it appear to be a fair game in any sense, but rather a rigged deal where we have U.S. Senators, Governors, and millions of government dollars being used against all of you for the benefit of Godspeed,Inc and family, and other interests not in any sense native to Ketchikan or the region.

The Ward Cove Group also welches on their deals. They signed a contract with Steve Thomas for Ketchicandies somewhere in the amount of $300,000; then stole his business name and stiffed him. All those free millions and this group stiffs a distressed local small businessman. I would not make the mistake of expecting them to honor contracts.

Big failure in local leadership here, folks, and I suggest to you it is time for you to pull your collective heads out. Grade schoolers provide very poor leadership, so go find some smarter people. You need to claw back your market from this clown act at Ward Cove, and that requires dealing with dock improvements.

It also requires the stones and the backbone to deal with a group using free government money and a ton of BS political clout (that should mean nothing locally) to screw you. Why? Because the big ships want the tourists to spend all their money on board. An operation like the Ward Cove Group is perfect for this because they have effectively locked the passengers in to the confines of the pulp mill property, a filthy SuperFund site. That means no one buys anything in the local stores, or you are paying grease to relocate your store to their property. Not much of a choice really, is it?

At which point why should we even bother to let the cruise ships land? They will provide the community with no economic benefit at all. The Ward Cove Group operation is a market capture operation, and the only market they can capture is yours. Much of that they will just give away to Norwegian, so I hope Norwegian is giving them a big kickback.

Enough said. Do you start cleaning house thereby ending these giveaways to all the rich pricks, or do you let Bob and College Boy and geniuses like Riley Gass sell you all down the river because they are too stupid or too sold out to do otherwise?

Some serious choices to be made in the next month or two, eh? I do not expect positive results in a state where the state motto is “Dumb is better.”

From our extreme socialist money grubbers I do not ever expect to hear a single anti-socialist word or thought ever again. Nor criticism of someone else’s work ethic when in fact you have none.

David G Hanger
Ketchikan, Alaska


On the Web:

Under open government transparency guidelines, information on recipients of the $799B in forgivable government loans issued through the 2020 Paycheck Protection Program by the US Small Business Administration (SBA) are a matter of public record. has created a powerful search tool that allows public access to the PPP loan database.

Ketchikan Covid Bail Out Tracker

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Editor's Note:

The text of this letter was edited slightly by the SitNews Editor.

Received August 20, 2021 - Published September 02, 2021

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