Sarah Palin's Alaska Milkgate
"We took government out of the dairy business and put it back into
private-sector hands where it should be."
- Sarah Palin
Alaska is home to the Matanuska Maid Dairy farm.
When Palin (Alaska's ex-governor) was on the ticket running for the
Vice-Presidency, the Mat-Maid dairy farm got into extreme financial difficulty
and was going to shut its barn doors.
The Alaska Creamery Board (ACB) oversaw the dairy and discussed a state subsidy
of the farm, but the financial difficulties were so severe that the ACB voted to
close the dairy.
Palin was outraged that the ACB was not willing to spend taxpayer funds to bail
out a private company, so she fired the board and replaced board members with
her friends and members of the community in which the farm was located. None of
the new members had dairy farm experience, but they did have something even more
important: financial ties to the farm's owners.
One of the new members of the board was a very close friend of Palin's, attorney
Kristan Cole. Cole's colleague was Jon Givens, the attorney for Sarah Palin's
personal legal fund.
Upon taking over ACB, the new (connected) board analyzed dairy farm records and
announced that the dairy farm had improved their operation and showed a $60,000
profit. Later, an independent audit showed that the farm actually has sustained
record losses of $300,000.
Upon learning the facts, Sarah Palin approved the new board's use of $600,000 in
state funding to help the in-need dairy farm so that it could pay off its debts
and be sold to the highest bidder. An auction was held and there were no
bidders, so the farm was scheduled to close, but a second loan of $200,000 was
made to keep the dairy farm operational.
Additional state loans have raised the subsidy to a not-so clean million. How
much worse could things be? Palin helped to arrange a USDA grant (subsidy
payment) of $634,000 to the Matanuska Dairy.
After all of the above, Matanuska applied for and received an additional state
loan of $630,000 which was secured by...ok...it was not secured by anything, but
nobody in Alaska seemed to know or care. The farm could not possibly keep up
with the loan payments.
Comedy of errors? It gets worse.
Matanuska produced surplus milk which was converted to surplus cheese which was
placed into storage because there was no market for it. The 30,000 pounds of
cheese was found to be infected with staph, listeria, and e. coli bacteria. The
farm declared a $250,000 loss.
The saddest part of this story is that it is being repeated in 48 other states
with different players and the same corrupt system. To my knowledge, the story
of Dairygate cannot be told in Hawaii. That's because Hawaii (once home to 40
dairies) has only two dairy farms left and imports 80 percent of its milk and
most of the feed for the cows.