The Palins car wash

From Modern Care

Alaska Gov. Sarah Palin’s ownership in a carwash was nothing more than a real estate investment. Although she and her husband, Todd Palin, did hold a 40 percent stake in a company called Anchorage Car Wash LLC, the business never got off the ground, according to Carolin Wells, one of Palin’s partners in the aborted venture.

“Things happened on both sides, and we never even got it going. We just sold the land and went on our merry way,” said Wells, who held 60 percent of the company with her husband Ray. “There was just nothing really but a land deal. I did go and get an LLC right away just to protect us because, when we first started, we thought we were going to go ahead [with the project].”

The Washington Post reported Sept. 2 that the Republican candidate for vice president had been part of a failed Anchorage carwash while she was mayor of Wasilla. The Post said Palin failed to disclose her interest in the company when filing paperwork as a candidate for governor in Alaska’s 2006 election.

While Anchorage Car Wash LLC was technically still registered with the state when Palin campaigned for the governorship, the Wells and Palins had already sold the property and parted ways by the time Palin filed her financial disclosure forms with the state.

According to state records, Wells filed a certificate of organization for the company in 2004, listing herself as the registered agent. She also outlined in an initial biennial report that the Wells each held 30 percent of the company and the Palins 20 percent. There is no record of a business license for Anchorage Car Wash LLC on file with the state, which would have been required to run an operating business.

Public records show that the Wells and Palins purchased a plot of commercial property in Anchorage on July 1, 2004 and then sold it for a small profit Jan. 4, 2006. Records also show Palin filed financial disclosure forms for her governor’s race June 1, 2006, nearly five months after the land was sold.

So what happened?

“I had always wanted to do a carwash,” Wells said, explaining that her husband knew Todd Palin’s brother, who initially spoke to the Palins on the Wells’ behalf. After some discussion, the Palins agreed to be silent partners, she noted.

The project ran out of steam, however, when the man hired to run the operation backed out. Neither the Wells nor Palins had the desire to run a carwash day-to-day, she said.
“We just decided to disband it,” Wells said. “It was actually just an investment for both of us over a piece of property as it turned out.”

Once the property sold, Wells did not maintain current registration with the state. Alaska requires businesses file biennial reports every two years. Wells did not file a second biennial report for the company, due Jan. 2, 2006, two days before signing deed papers for the sale of the land.

The state’s division of corporations, business and professional licensing didn’t issue a customary, 60-day notice requesting the biennial report and associated fees until Feb. 11, 2007. When Wells did not respond to the letter, the state issued an involuntary dissolution of Anchorage Car Wash on April 3, 2007. Gov. Palin took office Dec. 4, 2006.

While sounding ominous, involuntary dissolutions are fairly common. Alaska averages approximately 675 such terminations each year, according to Gordon Evans, a business registration examiner with the state. Dissolutions occur primarily, he said, due to failure to maintain a registered agent or file biennial reports.

“We have had a number of people actually request to be involuntarily dissolved,” Evans said, noting that even in such cases, the state must still issue a 60-day notice and follow typical involuntary dissolution procedures.
Evans also said it is not unusual for companies to register with the state but never actually conduct business. For example, several foreign corporations are on record in Alaska and maintain current paperwork but do not actively operate businesses. “They’re not even doing business here,” Evans stated, “but they want the corporation in place just in case.”

Companies that ultimately do not maintain a registered agent, file a biennial report or pay associated licensing fees do not need to notify the state or provide any reasons for the inactivity, he said.