Court Is Now In Session

Judge Patricia Collins instructs potential jurors in the first trial held in the renovated Territorial Courtroom at the McCabe Building on March 28. See story below. Dimitra Lavrakas

City reacts to accusation of embezzlement, illegal hire
Police close investigation, Mayor orders audit


Mayor John Mielke responded swiftly and decisively to an accusation that the city had been accused of embezzlement and illegal hiring practices on Tuesday.
Mielke released a statement to the public: “I can assure you that this kind of activity is not and has not occurred at City Hall. Nonetheless, because of the relentless accusations of theft, misappropriation of city funds, employee incompetence and unprofessionalism, I have initiated the start of an audit of all city accounts.”
He also stated he “will not rest until the source of these ridiculous, hurtful and false accusations is revealed.”
Mielke figures the audit will cost close to $10,000 including expenses and travel.
The city’s books were never seized, and await the auditors’ arrival on April 23.
“All I’m trying to do is make sure the community knows there are no misdeeds going on here,” said City Manager Bob Ward.
After conducting several interviews, Skagway Chief of Police Dennis Spurrier determined that he was unable to locate any evidence or witnesses that would give him probable cause to continue with an investigation, and closed the case.
The City of Skagway was accused of embezzlement and illegal hiring practices, according to a report from the Alaska State Troopers, and signed by Sgt. W.S. Ellis.
“On 3-2-01, at 1434 hours, Trooper (Christopher)Umbs received a report from Amanda Stossel of possible illegal practices being conducted by the Skagway city government,” according to the report.
Stossel is the Skagway KHNS radio reporter.
“Stossel wanted to know what can be done in the case of persons on the Skagway city government using funds and then replacing them at a later date. Stossel inferred that she had information that certain members of the city government were personally using city funds. She also had complaints about the unfair hiring practices going on in the city and the need for an audit of the city. She inquired who audits the city government.”
Stossel was advised to contact the Skagway Police Department or the White Collar Crimes Unit if she had a complaint about the city government, but Umbs states in the report that she led him to believe she had already, because of her comment that an “unfair investigation would be conducted because the city government controls the police department.”
When Stossel was asked about her involvement, she told The Skagway News she is in the habit of calling the Troopers for information about laws governing city governments. She said she talked to Sgt. Ellis, and does not remember the name Umbs.
“I asked if municipal governments were required to have their budgets overseen by the state and if so, what department,” Stossel said. “The guy said, ‘I don’t know,’ call the Governor’s office.”
Stossel said she doesn’t remember the name Umbs, only Ellis.
Trooper Ellis confirmed by phone from Juneau that Stossel never filed a formal complaint.
Stossel was interviewed by Spurrier twice, once on March 28 and again, March 29.
In the first interview, Stossel told Spurrier that she had no intention of filing a complaint, but that “because of all the flack surrounding the budget numbers not matching up, she wanted to know who oversees municipal government and the way monies are managed.”
It was on March 9 that the Skagway News published what would later be learned were incorrect figures on sales tax revenues. Those figures caused a blizzard of faxes between local bookkeeper Sharon Bolton and City Manager Bob Ward. But Stossel’s call to the Troopers was six days prior to publication.
In the second interview, Stossel said her only reason for calling the Troopers was to get information, and that she had “a ‘friend’ who wanted to know whom ‘she’ could talk to without getting herself into any trouble.”
Stossel also told Spurrier that when she calls the Troopers she identifies herself as being from KHNS, but in Umbs’ report, he states that she did not identify herself as being from the media.
Spurrier also interviewed Ward,City Clerk Marjorie Harris and Economic Development Director Candice Wallace.
In Ward’s interview on April 2, he told Spurrier that he had a department directors’ meeting on March 28 and informed them of the allegations and also discussed the budget briefly. After the meeting, Wallace came to his office and said that she has no control over what her friends do. Wallace said she had spoken with Stossel earlier that morning, and Stossel reassured her that her contact with the Troopers was informational only. Ward stated that he thought this strange because he had only told Mayor John Mielke, a couple of city council members and his immediate staff that Stossel was involved.
In her interview, Wallace stated to Spurrier that Ward brought Stossel’s name up at the directors’ meeting.
Later in the day on March 28, Stossel went to Ward’s office to assure him that her call to the Troopers was strictly for information, and not a formal complaint.
Wallace could not be reached for comment for this story on Wednesday. She had taken a sick day.

Smith gets time and fine
First trial to be held in new courtroom
About 45 citizens showed up at the Skagway City Council chambers in the McCabe Building on March 28 in response to their summonses as jurors.
Matt Smith of Skagway faced trial for two counts of third-degree assault, one count of failure to stop for a police officer in the first degree, and driving while intoxicated.
On the night of July 1, at about 2:45 a.m., Police Officers Brent Moody and Robb Johnson were parked at First and State, when they observed a car going down State, then driving around the Police Station, spinning its wheels so that gravel was kicked up onto parked police cars. The car, driven by Smith, then crashed into a yard, and he was arrested.
It was his luck to be the first defendant to go on trial in the newly-renovated McCabe, back in the old territorial courtroom.
Each and every one of the jurors were interviewed throughout the day. This was an enlightening process for many residents who learned about people they had only seen drive by in a truck.
Superior Court Judge Patricia A. Collins out of Juneau said she realized that in a small town it was sometimes impossible to try a case because everyone knows everyone else.
And so it was that jurors fell one by one: the defendant’s former roommate, a wife of one of the investigating police officers involved in the case, the son of the owners of the yard that Smith crashed into.
Finally, when the total was whittled down to the prerequisite 14 – 12 jurors and two alternates – a deal was struck and the jurors were excused.
The charges were reduced from the original felonies, to misdemeanor charges of driving while intoxicated, assault and eluding an officer.
After all the jurors had been thanked and dismissed, the prosecutor, Assistant District Attorney Susan McLean and Smith’s attorney, Louis Menendez examined the main witness, Skagway Police Sgt. Brent Moody.
Moody said that he parked his patrol vehicle at a 90-degree angle on State, turned on the flashing lights and then flashed the spotlight into the car as Smith’s vehicle came at the police car and within inches of him.
In a unique attempt to get his client a more lenient sentence, Menendez argued that Smith was actually traveling in a straight line, albeit under the influence, and it was the police car and the bright search light that threw him off his course, causing him to go up on the sidewalk, crash through Wayne Perry’s fence and come to rest in their woodpile.
The judge did not buy it.
For the DWI, Collins sentenced Smith to 185 days with 125 suspended and credit for time served, a fine of $3,000 with $2,000 suspended, a $75 surcharge to be paid to the court, and Smith was ordered to seek outpatient alcohol treatment in Haines 30 days after sentence was imposed, to not consume alcohol or go where alcohol is sold or served, and to violate no laws. Smith is also on probation for two years and his driver’s license revoked for three years.
For the assault and eluding an officer charges, Smith received a sentence of 180 days with 150 suspended, $1,000 fine with $1,000 suspended, and a $50 surcharge. The last sentence is to be served in addition to the DWI sentence, for a total of 90 days.
Smith must also contribute 200 hours to Community Work Service at 10 hours per week and report those hours to the Skagway Court once a month.
In giving the sentence, Collins talked about how the attitude of the community towards Smith that she evidenced in the courtroom helped her come to her decision for a more lenient sentence.
“Again, from words I heard from the jury box, you have great potential to be a leader in this community,” she said.
Noting that it was Smith’s third DWI and that his blood alcohol level was .264 percent out of a state limit of .10 percent.
“Another factor I usually consider in a case like this isolation for the safety of the community,” said Collins. “The emphasis of this sentence will be on treatment and not isolation. For communities like Skagway that know so little about crime, it (Smith’s actions) takes away from the community, and you can give that back through community service.”
After the court adjourned, Moody went up and shook Smith’s hand.
Outside the building, Smith said he felt justice was served.
“I got off lighter than I thought,” he said. “I do feel bad about the effects on the community and hope to make it up.”

Chamber distances itself from Bolton Cabin
Directors meet and agree separation is needed

Five of the six members present of the directors of the Skagway Chamber of Commerce board voted to send a letter to City Manager Bob Ward clarifying the board’s position on a recent fax sent by its administrator, Sharon Bolton.
Several weeks ago, Bolton, under the heading of her business Bolton Data Processing, sent a broadcast fax questioning the accuracy of figures prepared for The Skagway News for its annual report on city revenues from tourism sales. It turned out that Bolton was correct in questioning the figures, as inaccurate inputting of figures into the city’s Excel spreadsheet program caused the error. The numbers, however, were not part of the city’s official treasurer’s report.
Bolton does her work for the chamber at the cabin at 15th and State, and board meetings are also held there.
The board decided to meet and discuss if the fax reflected negatively on the chamber.
Board members Tina Cyr, Alvin Gordon, Buckwheat Donahue, Reed McCluskey, and Craig Jennison voted yes, with Erik Niebuhr, no.
The directors also decided to begin meeting at the city library and directed that the chamber sign be taken down from the cabin.
In the future, Bolton was asked to include a disclaimer when faxing about issues on a personal basis.
However, after the general chamber luncheon meeting this Monday, the directors changed the wording of the letter to Ward (see letters).
“What we were trying to address was the wording of the letter that seemed to imply there was unanimity,” said McCluskey, president of the board.
Bolton this week said she had no comment on the board’s action. –DL

Three resign from Gas Pipeline Committee

Three members of the Gas Pipeline Committee – Mayor John Mielke, City Manager Bob Ward, and WP&YR vice president Gary Danielson – have resigned.
The committee was formed by the Economic Development Commission to prepare for the possibility of Skagway playing a role in the proposed Alaska Highway gas pipeline.
Mayor Mielke said the committee was “too top heavy with city people.” He said he was concerned there would be a lack of credibility in the public’s eye if it perceived the committee as an extension of the city government.
“The committee needs to function independently of the city, so it can give the council recommendations,” he said. He said he made the decision the night of the March 6 public meeting.
City Manager Ward resigned for the same reason.
“People have the presumption that the committee is the last word, and that is not the case,” said Ward. “The committee is another advisory body that should be digesting information and presenting it to the council.”
Another reason, Ward said, was the pipeline ad that ran in this paper on March 9 that talked about a Community Infrastructure Development Plan.
“I certainly do not concur with the statements in that ad that suggests a Community Infrastructure Development Plan, which I do not believe exists,” he said. “Only the council can approve such a plan.”
He also said the ads should be approved by the committee before they go to press.
Danielson, spokesperson for White Pass & Yukon Route Railroad, said he resigned for similar reasons as Ward: he also did not approve of his name being included in the ad without his permission.
Candice Wallace, EDC director, said all of the members of the committee had seen the ad wording and all had approved it, except for Mielke who was not present and Ward who was out of town.
The ad, Wallace said, was a reprint of part of a handout for the March 6 community meeting. The handout section printed in the paper indicates the points of discussion to be the gas pipeline and the Community Infrastructure Plan.
As the committee is appointed by the mayor, new members would have to be chosen by him, Wallace said. – DL

Budget approved by school board
The proposed Fiscal Year 2002 budget was approved by the board at its March 27 regular meeting.
The $1,700,701 budget will have to be approved by the city council during its budgetary hearings.
The breakdown of the budget is: instructional, $1,079, 448; school administration, $76,392; district administration, $104,066; district administration supplies and service, $88, 556; operation and maintenance, $256,526; student activities, $95,713.
Because the state requires schools dedicate 65-70 percent of their total budget to student instruction, the school falls short at 63.47 percent.
“Most small districts can’t make it, because it takes so many people to run the building,” said Telles.
“This is the highest (percentage) yet,” said Michelle Carlson, board president.

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