McGuire earned consulting fees, panel concludes

APOC member says work still created a conflict

Posted: Thursday, December 20, 2007

ANCHORAGE - The Alaska Public Offices Commission has dismissed a claim that state Sen. Lesil McGuire did nothing to earn $10,500 in consulting fees from Providence Health System.

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But commission member Elizabeth Hickerson said Tuesday the work done by the Anchorage Republican four years ago amounted to lobbying the state for Providence.

"To me this is conflict, conflict, conflict. Sen. McGuire should not have engaged in developing a lobbying strategy," said Hickerson, a retired state attorney and a Democrat.

According to documents released as part of the APOC investigation, McGuire's consulting job included working with Providence's lobbyist, former state Rep. Eldon Mulder, on how the hospital could get funds from the state as part of a deal involving the old Alaska Psychiatric Institute.

Hickerson wanted the commission to refer the matter immediately to the Legislative Ethics Committee, but she was outvoted 3 to 2. Commissioners voted instead to postpone any possible referral until their February meeting. Commission staffers will look into the matter in the meantime.

Assistant attorney general Jan DeYoung told the commission that she did not believe McGuire's actions count as lobbying under the law. State lawmakers are not allowed by law to act as lobbyists.

Charles Dunnagan, McGuire's attorney, said the commission shouldn't suddenly just charge off on a brand new probe of McGuire after spending months on an investigation that cleared her of the previous allegations. McGuire did no lobbying and he does not see conflict of interest in what she did, he said.

"I think it is exceedingly unfair," he said.

McGuire got a $10,500 contract from Providence Health System in Alaska in October 2003 for three months of consulting work. She was in the state House at the time.

McGuire was hired to develop a plan "that requires the state of Alaska to release the existing Alaska Psychiatric Institute to Providence and pay Providence the sum of $7 million for said structure."

In return, Providence would release the state from its obligation to demolish the building, according to McGuire's contract with the hospital.

That all occurred about a year after McGuire's contract ended.

Providence bought the old API property from the Alaska Mental Health Trust Authority for $8 million.

The state was supposed to demolish and remove the old asbestos-filled building at a cost estimated up to $14 million. But Providence decided the building would be salvageable as administrative offices after removal of the asbestos. State agencies then reached a written agreement in December of 2004 to pay Providence $7 million to waive the state's liability to take out the asbestos and demolish the building.

The Public Offices Commission began investigating McGuire's contract over the summer after a complaint from Ray Metcalfe, who is now a Democratic candidate for the U.S. Senate. Metcalfe lost to McGuire in a 2000 race for the state House.

Metcalfe's initial complaint said McGuire kept changing her description of what she did for the money. The commission expanded the investigation to whether McGuire actually did any work to earn it.

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