Legal opinion sought on Sullivan life insurance policy [Anchorage Daily News, Alaska]

Apr. 14--The Anchorage Assembly has voted 6-5 to spend up to $10,000 to seek an independent legal opinion on issues related to the city's recent payment of $193,000 in life insurance to a trust for the late Mayor George Sullivan, father of current mayor Dan Sullivan.

The resolution, proposed by Assembly member Harriet Drummond, asks for an examination of the legality of actions taken decades ago to set up the eventual payment, and more recently when the Assembly agreed to carry through with it.

One issue: Assembly members say they did not know that Dan Sullivan was administrator of the trust for his father, and was the one who requested the life insurance payment from the city.

Other questions raised are whether a life insurance benefit was legally established for George Sullivan, and whether it was legal for the Assembly to appropriate public funds for the purpose.

Drummond said it would be good to put the matter to rest.

But the resolution, approved Tuesday night, divided the Assembly.

"Make no mistake, this is wasted political theater," said Assemblyman Chris Birch, who opposed it. He said a 68-page report from the city's law department addresses all the issues.

Those voting for the resolution were Drummond, Elvi Gray-Jackson, Mike Gutierrez, Sheila Selkregg, Matt Claman and Patrick Flynn.

The payment to the trust fulfilled a deal the city agreed to in 1982 after George Sullivan left office, to give the elder Sullivan life insurance through the city for life at the same premiums and coverage level he had had as mayor.

In 2002 the city's insurance carrier, Aetna, said it had no policy for Sullivan and wouldn't cover him as he was not an active employee, but the city decided to continue collecting premiums and providing coverage.

George Sullivan died last September, about three months after his son, Dan, became mayor.

The city Ethics Board in March advised Mayor Dan Sullivan that he did not properly disclose a potential conflict of interest in his roles as mayor and trust administrator when he presented his father's death certificate to the city benefits department.

The mayor should have told the board about the potential conflict because city employees who work for him would be required to act on the matter, the Ethics Board decided. The board also concluded Dan Sullivan did not have a financial conflict of interest because he is not a beneficiary of the trust.

Sullivan has said he was unaware at the time that the life insurance payment would come from city funds; he thought it was Aetna life insurance.

Drummond, at Tuesday night's meeting, proposed a second resolution to ask the Ethics Board to review more questions related to the life insurance deal, beyond whether Dan Sullivan had a potential conflict.

The Assembly voted to refer the second resolution to its own Ethics Committee for further consideration.

Find Rosemary Shinohara online at adn.com/contact/rshinohara or call her at 257-4340.

To see more of the Anchorage Daily News, or to subscribe to the newspaper, go to http://www.adn.com.

Copyright (c) 2010, Anchorage Daily News, Alaska

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.