Alaska Fund Trust

From Palingates:http://www.blogger.com/img/blank.gif

$arah Palin is protesting that neither she nor her attorney, Thomas Van Flein, have received any money from the Alaska Fund Trust.

I find the notion that I have taken any action pertaining to the legal defense trust fund misguided and factually in error. I am informed that this fund was created by experienced attorneys in DC and was modeled after other similar funds established for senators and others. The fund itself was not created by me nor is it controlled by me.

(The examples of other legal funds given on the AFT's website are all for federal officials and are all regulated according to federal laws. $arah's legal fund appears to fall outside the scope of any laws...)

Neither I nor my lawyer has received a penny from this fund, and I am informed the Trustee was withholding any action or payment pending final resolution with the Personnel Board. This is the hallmark of legal compliance and prudent conduct.

The "transparent" trust, run by Palin's long time friend Kristan Cole, aims at raising an undisclosed amount of money to pay $arah Palin's legal bills. Nobody really knows the total amount of these bills:

Palin's lawyer, Thomas Van Flein, would not give a case-by-case accounting of how Palin has incurred so much legal debt, saying "that type of breakdown is protected by the attorney-client privilege."

The first listing of donors and the amounts given are due in August, although it's not a legal requirement to disclose anything, according to the Newsminer:

Palin's friends and supporters created the legal defense fund in April. It's not known how much it has raised. The trust has no oversight from the state or federal political watchdog agencies.

The Federal Election Commission said the defense fund is a state matter. The Alaska Public Offices Commission, which oversees campaign spending and financial disclosures of state elected officials, has no plan to get involved in regulating it, officials said.

Cole said there are no legal requirements for the trust to register with either agency or to disclose donors. However, Cole said she will list names of all donors and the amounts they gave on the legal defense fund's public Web site four times a year, with the first posting likely in early August.

Without any oversight, are we supposed to take Kristan Cole's word for the total raised to date?

I find the wording of the AFT agreement a bit confusing. Here are the passages I find puzzling:

This Trust Agreement is made in Wasilla, Alaska, as of the22nd day of April, 2009, by and between KRISTAN CHERYL COLE, as Settlor, and KRISTAN CHERYL COLE, as Trustee, establishes THE ALASKA FUND TRUST, a trust for the payment of expenses or amounts incurred, undertaken or paid in connection with claims, allegations, investigations, accusations, complaints, legal inquiries, requests, and proceedings, including the response and defense thereof, arising out of or by virtue of the activities of or performance of duties as, or on Governor Sarah Palin, in her capacity as (or as a result of her being) the Governor of Alaska. Alaska Trust Company shall serve as administrative and custodial manager of the Fund as provided herein below.

Trust Purpose

The sole and exclusive purpose of this Trust is to provide a proper means for the acceptance of money, property, and services, including, if necessary, pro bono legal services, to provide for all reasonable, necessary, and appropriate fees or charges incurred by (i) SARAH PALIN as a result of the fact that she is Governor of the State of Alaska or as a result of the performance of her duties as Governor of the State of Alaska; and (ii) Covered Individuals, that may be selected or designated by the Trustee as provided herein, as a result of or arising out of their association or relationship with or employment by SARAH PALIN, in her capacity as Governor of the State of Alaska.

Rights of Withdrawal

Each of the beneficiaries of this trust, shall, in each calendar year, have an absolute and unrestricted power to withdraw from this Trust up to the lesser of the total additions made to this Trust during each calendar year or an amount in cash or other property equal the lesser of the total additions made to this Trust during each calendar year, divided equally among such beneficiaries, or an amount in cash or other property equal to the maximum amount which qualifies for the Federal Gift Tax exclusion allowed by Section 2503(b) of the Code (currently $13,000 per donor, but such amount shall be adjusted to provide the maximum amount excludable). Except as otherwise provided herein, said power of withdrawal shall not be cumulative from year to year, must be exercised separately for each calendar year in which any such addition or additions are made, and shall be exercisable only by written notice to Trustee of the amount Donee wishes to withdraw, but no purpose for said withdrawal need be shown.

OK, the sole purpose of the fund is to provide for the payment of fees incurred by the governor, her family and other covered individuals, blah blah.

How come the beneficiaries can withdraw up to the maximum amount excludable from the Federal Gift Tax without stating the purpose for the withdrawals?

$arah Palin also protests that she doesn't have anything to do with the running of the trust, so how does she explain this:

Successor Trustees

In the event that the original named Trustee herein shall desire at any time to be relieved of his duties herein, said Trustee may resign by written notice to SARAH PALIN, who may appoint a successor Trustee with the qualifications set forth in paragraph 4 above. In addition, SARAH PALIN shall have the same power to appoint a substitute Trustee in the event of the death, incapacity, or failure to act in accordance with the terms of this instrument of any Trustee. In the event of SARAH PALIN's inability to act as a result of incapacity or other reasonable cause, the proper legal representative of SARAH PALIN shall have the right and authority to seek the appointment of a substitute Trustee.

Another interesting bit:

Trustee's Accounts

The Trustee shall keep (or, in the Trustee's sole and absolute discretion, shall cause others to keep) accurate written records and books of account of the Trustee Estate, showing the manner in which the Trust Estate is invested and all receipts, disbursements, and other transactions involving the Trust Estate. All such records and books of account shall be the property of the Trustee during the duration of this Trust and they, together with the Trust property and all reasonable evidence thereof, plus any accounts, shall not be made available during the Trust term except as hereinabove provided or as may be required by applicable law. Notwithstanding anything contained herein to the contrary, in no event shall any Trustee at any time acting hereunder be required to make any current or final reports, inventories or accountings to any court.

It's quite obvious that I'm not a lawyer, but I can read English. The terms of this trust always seemed contradictory to me. Maybe a lawyer could guide us through the wording of this agreement and tell us how it makes sense? What are the applicable laws for disclosure of the accounts? The last sentence is particularly interesting: Notwithstanding anything contained herein to the contrary, in no event shall any Trustee at any time acting hereunder be required to make any current or final reports, inventories or accountings to any court.

All these points may be moot if the trust is deemed unethical as it may serve no purpose at all. What would happen to the money then? Do they have to give the money back to all the donors? Will they give it to charity? What's the legal status of the trust after July 26?

One more question: even though $arah Palin stated that she has not received any money from the trust, if the trustee made any disbursements for whatever reason, wouldn't it be a no-no? How is the Alaska Trust Company being paid to administer the trust? Are they a charity? If they're not being paid, is the money coming in without anybody keeping a log of the donations?

We know only of $130,000 collected so far, according to the totals published by the people who ran the legal fund begathon. If there's more money in the pot, as John Coale indicated, I would be very curious to know what the total really is and if there were any disbursements since the trust's inception, considering what $arah Palin said: "...and I am informed the Trustee was withholding any action or payment pending final resolution with the Personnel Board."