Anchorage, Alaska, Is At The Center Of A Burgeoning Scandal

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In August 2021, two city of Anchorage officials toured the wood-paneled halls of the Golden Lion Hotel, known for the 200-pound taxidermied lion that once stood among the teal lounge chairs in its lobby.

At the time, Anchorage was seeing a soaring number of overdoses. The city faced a deadline to use proceeds from a utility sale to launch a new treatment center and needed a place to put it. The hotel, built in the 1970s, had 85 rooms, including suites that might house visiting doctors. The ballrooms could serve as meeting areas or host group therapy sessions. There was even an old salon that could be used for job training.

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Best of all, the city already owned the building. A previous mayor had bought it as part of a plan to overhaul homeless services in Alaska’s largest city.

But the city’s new mayor, Dave Bronson, had ridden a wave of support from voters frustrated by COVID-19 mandates and those opposed to the city’s approach to homelessness. Among his supporters were people who lived in the neighborhoods surrounding the Golden Lion, and Bronson promised on the campaign trail to sell the building.

Municipal Real Estate Director Christina Hendrickson and Operations and Maintenance Director Saxton Shearer held out hope that they could make a case for using the hotel based on savings to the public, according to a letter Hendrickson later sent to the Anchorage Assembly. After visiting the hotel that August day, they began working on a proposal.

The next day, Shearer appeared at Hendrickson’s office, alarmed, she said in an interview. “He sits at my desk and closes the door.”

Shearer had been at City Hall for a meeting on another matter and excitedly told the mayor’s good friend and top adviser, Larry Baker, about the potential to transform the Golden Lion into a treatment center run by the Salvation Army, according to Hendrickson’s letter.

Hendrickson said Shearer told her that Baker said the project was a no-go. Baker “told him not only ‘no,’ but ‘hell no, that’s not happening,’” Hendrickson said in an interview.

“He didn’t want a treatment center in his neighborhood,” she said.

The hotel remains empty. It became neither a shelter nor a treatment center, though Bronson recently reversed himself and said the hotel would be used for housing.

Baker’s role in the Golden Lion decision and other actions taken by the Bronson administration have been at the center of a burgeoning scandal at Anchorage City Hall, in which numerous top officials have been fired or resigned. Hendrickson was fired in September 2021, two days after delivering a whistleblower complaint to the city Assembly accusing the mayor of violating the city code. She has filed a lawsuit accusing the city of retaliation.

The city has denied that Bronson fired Hendrickson for acting as a whistleblower, and it said in an answer to the lawsuit that she had been insubordinate and that “the decision to terminate Hendrickson was made prior to the Mayor’s office learning of her ‘whistleblower’ complaint to the Assembly.”

Municipal Manager Amy Demboski was fired in December, and she subsequently wrote an 11-page letter to the city accusing the mayor and his administration, including Baker, of corruption, illegal contracting and blatant sexism. Bronson has never publicly said why Demboski was fired.

Demboski, Hendrickson and other City Hall employees speaking on the condition of anonymity to protect their jobs allege that the mayor allowed Baker to further his self-interests using the power of City Hall. Among the allegations is that Baker and the mayor attempted to use their influence to protect a man accused of domestic violence and pressured Shearer to sign off on millions of dollars of construction work in violation of city code.

Bronson and Baker are so close that the mayor boasted to employees that he personally drove to Baker’s home with a gun to help with a trespassing call on Nov. 26. The mayor’s office later asked the Police Department to review 911 dispatch tapes of the incident to see why police didn’t respond sooner.

Since a December interview about her firing, Demboski has declined to speak to reporters and has not answered questions about her letter; Shearer did not respond to requests for comment. Baker initially referred questions to a spokesperson for the mayor and has not responded to phone calls, texts or emailed questions.

Bronson declined to be interviewed and did not answer specific questions about Baker and the accusations involving his top adviser. The mayor, through a spokesperson, instead sent reporters a statement on Jan. 10:

“Larry Baker was asked to join the Administration on a contract basis due to his vast background in both the executive and legislative branches of our government. Mr. Baker has served as an Anchorage Assembly member, state legislator, and Chief of Staff under former Mayor Dan Sullivan. There are very few people who have this amount of experience. The Mayor thinks that having this historical perspective is invaluable.”

Since receiving Demboski’s letter, Bronson has refused to talk about Baker, the domestic violence cases or any of the accusations leveled by his former municipal manager. Through a spokesperson, he has said that the acting city attorney advised him not to comment on “potential litigation.”

The questions have thrown Anchorage City Hall into turmoil for the second time in recent years. In October 2020, then-Mayor Ethan Berkowitz resigned after a television news reporter revealed he had texted her a photo of his naked backside. Berkowitz acknowledged his “unacceptable personal conduct” in messaging the reporter. At the time, he was the top elected Democrat in Alaska.

What’s happening at City Hall is affecting the city’s operations, insiders say. In one example, the city Finance Department, hobbled by vacancies, is asking the Assembly for an extra $2 million to hire contractors to help with routine bookkeeping. The department had operated without a permanent chief financial officer for months, until a new CFO was confirmed in January. Many departments are working under acting supervisors, including the Law Department, which hasn’t had a permanent city attorney since June.

The mayor’s human resources director resigned Monday as this story was being prepared for publication.

“I can no longer continue to serve in what has become an increasingly toxic, hostile, and demoralizing work environment,” he wrote.

A Lifetime in Business and Politics

Baker, now 80, has played many roles in Anchorage over the years. He opened the first Burger King franchises in Alaska in 1975 and ran them until his business declared bankruptcy in 2003. Worried that a rival burger chain owner might run for city office, he ran for the Anchorage Assembly himself and served five years before an unsuccessful run for mayor. He was a state legislator and, for six years, chief of staff to former Anchorage Mayor Dan Sullivan. (Not to be confused with the Alaska U.S. senator with the same name.)

For decades, Baker has lived in a Midtown neighborhood known as Geneva Woods. A collection of houses built in the late 1960s and early 1970s — old by the standards of the 49th state — the subdivision is also home to a former Assembly chairman who helped run an independent expenditure group for Bronson, as well as a former Republican mayor, a retired president of one of the largest oil companies in Alaska and an owner of state’s biggest shopping mall.

Baker’s home is a few hundred yards from the Golden Lion.

Some of the homeowners became alarmed in June 2020 when they learned of a proposal by then-Mayor Berkowitz, a Democrat, to buy the nearby Golden Lion and turn it into a substance abuse treatment center.

The city had recently sold its publicly owned power utility. As part of the sale, the municipality agreed to spend $15 million of the proceeds to create an addiction services center. In the meantime, the COVID-19 pandemic had created new urgency among service providers to house hundreds of residents, with drug and alcohol treatment considered a crucial step in reducing homelessness.

Baker and five others in August 2020 formed a nonprofit called Alaskans for Real Cures to Homelessness, which opposed the plan. Baker served as a director.

Berkowitz’s resignation in October 2020 created a leadership opening. Enter Bronson, a former U.S. Air Force and commercial pilot whose campaign drew momentum from a backlash against city leadership.

When Bronson won the election in May 2021, he chose Baker to co-chair his transition team.

Until recently, Baker had his own office on the top floor of Anchorage City Hall. But he isn’t a city employee.

Under Bronson, the city has awarded Baker three $29,500 contracts to work for the mayor as a “policy adviser.” In each of the contracts, the city signed the agreements after Baker had already started working and took the unusual step of removing an indemnity clause that would have made Baker legally liable for his work.

As a result, any lawsuit settlements or judgments against the city of Anchorage, based on Baker’s actions on behalf of the mayor, would be paid by the public rather than Baker himself. Working as a contractor, instead of an employee, could also allow Baker to argue he is not subject to the city ethics code, which says “a public servant shall place the public interest above any financial or private interest when taking official action.”

For Bronson, who had no experience in municipal government, Baker brings an understanding of its inner workings. Where Bronson fought all-or-nothing battles with the progressive Assembly, Baker worked behind the scenes as a peacemaker. City Hall executives say the two men talk every day.

“Unlike Bronson, he knows he needs to get along with people and relationships matter,” said Assembly member Austin Quinn-Davidson, who filled in as mayor for several months after Berkowitz resigned.

“I like him,” she said of Baker. “I think he relies on that, which is smart. People sort of trusting him or liking him as a person to get things done.”

“Not an Honest Communication”

Baker’s most public role was to help decide where to place shelters, housing and services for homeless people.

Unhoused people had fewer options for emergency shelters after Bronson closed the city’s main low-barrier entry, the Sullivan Sports Arena, for three months last summer and moved homeless people to a campsite that attracted black bears.

All the while, the Golden Lion remained vacant.

In August, the Bronson administration arranged to meet with the regional director for the state Department of Transportation at Baker’s office to discuss a highway project that had been planned for more than a decade and happened to be located right next to the Golden Lion.

Bronson’s chief of staff asked DOT to write a letter describing the status of the project and how it might impact the hotel. The final draft of the letter included a key sentence that Bronson used to justify denying the treatment center: that the highway work would likely result in a total “take” of the hotel property. It was signed by Wolfgang Junge, the DOT’s central region director.

What he meant, Junge said in an interview, was that because the road project would gobble up some of the hotel’s parking spots, it would likely no longer be viable as a commercial hotel, which would affect its resale value.

But that’s not how Bronson framed the letter in a Sept. 8 news release suggesting the building was doomed to be condemned by the highway project.

“Based off of this new information from the DOT&PF to eventually take the Golden Lion Hotel property, it does not make sense to set up a treatment facility in a location that will be taken away,” Bronson said.

Junge said that the mayor’s description of his letter was not accurate.

“The way the (Bronson) administration communicated to the assembly was not, it was not an honest communication,” he said. “If my letter was weaponized or used as a pawn somehow in trying to achieve an outcome of an administration, that’s a choice that the administration used.”

In addition, in her letter, Demoboski said Baker and the mayor pressured Shearer, the maintenance and operations director, to sign off on up to $4.9 million in construction work on a mass homeless shelter and navigation center without Assembly approval. Demboski alleges that sidestepping the approval process amounted to a “knowing violation” of city law. (A navigation center provides low-barrier access to a variety of resources and homeless services, like case management, health care, food and housing programs.)

Bronson and Baker assumed that if the illegal activity was discovered, Shearer would “take the fall” as the subordinate city worker, she claims.

According to Demboski, Bronson said that the city couldn’t wait for the proper approvals to start pouring concrete on the project, and that “we can’t stop once the pour is started.”

The administration green-lit millions in construction work over the summer under what was initially a $50,000 contract. In October, a Bronson official conceded the administration had made an “error.”

The Assembly later rejected Bronson’s belated request for approval of the contract upgrade, citing doubts about the project and the administration’s competence. That, essentially, left the partially constructed project dead.

Now the city must pay millions for a project that may never be finished or risk a lawsuit, city attorneys say.

A Business Partner Accused of Domestic Violence

Though Baker and Bronson are close political allies, Baker’s closest business associate is Brandon Spoerhase. Baker and Spoerhase together created a trio of limited liability companies in 2015. All are named BSI for Baker Spoerhase Investments.

When the companies were created, Baker had just finished working as chief of staff to Sullivan, the mayor at the time. Spoerhase had been working for several years as a commercial real estate broker and had been named one of state’s “Top Forty Under 40” by the Alaska Journal of Commerce. Sullivan had appointed Spoerhase to the influential city planning and zoning commission.

Baker and Spoerhase were partners in BSI Commercial Real Estate, according to cached versions of the company website. (The website went dark in January as reporters asked for interviews with Baker and Spoerhase.)

Demboski alleges that with the mayor’s “support and blessing,” Baker tried to get the city attorney to drop domestic violence charges filed against Spoerhase. The victim in the cases was a member of the mayor’s own executive team at City Hall.

Spoerhase was accused of kicking in the bedroom door of a woman he’d been dating in June 2019. The victim, Kolby Hickel, described the night in a request for a protective order. (She has given the Daily News permission to use her name given it was already in the public record.)

Hickel woke that night to Spoerhase hitting her in the face “with a piece of processed game beef stick,” city prosecutors later wrote in a probable cause statement charging Spoerhase with misdemeanor assault and criminal mischief. Spoerhase grabbed Hickel’s wrist and tried to stop her from walking to another room, the charges said.

At a hearing at which she requested a restraining order, Hickel said she went back to her room and locked the door.

“He said, ‘I’m going to kick it in’ and he did,” she testified. “He broke the door and the hardware. And the inside of the door frame.”

A judge granted Hickel the long-term protective order on July 19, 2019. Spoerhase was charged with violating that order six days later.

All told, Spoerhase was charged in three separate city cases of domestic violence and one state case of felony first-degree stalking. (In Anchorage, city prosecutors typically file misdemeanor charges while felonies are charged by the state.)

After one arrest, Baker paid his partner’s bail using the name Larry Willis, according to the receipt filed in state court. He later acknowledged using this name when paying the bail but said Willis is his middle name and disputed that it was an alias.

All four criminal cases were pending against Spoerhase when Bronson announced Baker would be the co-chair of the mayoral transition team.

Since then, one city case has been dismissed entirely. Spoerhase pleaded no contest to criminal mischief (for kicking in the bedroom door) and to violating a protective order, in an agreement with city prosecutors to resolve the two remaining cases. Prosecutors dropped four other charges: counts of violating conditions of release, unlawful contact, stalking and misdemeanor assault.

The state felony first-degree stalking case against Spoerhase is awaiting trial.

Hickel, Spoerhase and his current attorney, Michael Branson, have all declined to comment, citing the ongoing felony case.

Around late May or early June of 2021, Municipal Attorney Patrick Bergt first told Demboski that Baker had asked him to dismiss the pending criminal charges against Spoerhase, according to Demboski’s letter to the city.

“Patrick Bergt … reported to Ms. Demoboski that he was approached by Baker — both during the transition and after the administration took office — to get these charges dismissed,” Demboski wrote. “Mr. Bergt came to Ms. Demboski expressing shock and discomfort about Mr. Baker’s request.”

According to emails obtained through a public records request to the city, the municipal attorney sent or received at least 88 pages of emails related to the Spoerhase cases between September 2021 and February 2022. It’s unclear what most of the emails said. The city redacted all but 19 pages of the messages, including 14 separate emails between the city attorney and prosecutors on his staff who were handling the Spoerhase cases.

The few unredacted emails show a back-and-forth between Bergt and Spoerhase’s defense lawyer that appears to start mid-conversation, in which the defense attorney sends the city attorney pages of court documents outlining the charges against Baker’s business partner. Bergt responded to one of the emails by asking for a copy of the felony indictment in the state’s case against Spoerhase.

Bergt declined to say whether Baker pressured him to drop or reduce the city charges against Spoerhase, citing concerns that he could break legal rules protecting confidential communications between attorneys and clients.

In his first public statement about Demboski’s claims, Bergt provided a written statement last week.

“I can assure the public that at no time during my tenure as Municipal Attorney did I direct or attempt to influence criminal prosecutions for unethical or improper purpose,” he said. “I took very seriously my ethical obligation to my client — the Municipality of Anchorage — and always acted in its best interest.”

Demboski wrote that Baker also had tried to prevent her from hiring Hickel, the victim in Spoerhase’s cases. It didn’t work, Demboski wrote, and the new mayor announced Hickel as his new director of enterprise services.

City Hall employees said Bronson was well aware Spoerhase was awaiting trial and talked openly about the cases. Bronson said he knew he might one day be forced to “choose” between Hickel, his new executive, and Spoerhase, the business partner of his friend and adviser.

The conflict triggered a confrontation among the crowd at Bronson’s inauguration day celebration. In an email to an Office of Victims’ Rights attorney, Hickel wrote that Spoerhase appeared at the event on her first day on the job despite court orders to stay away from Hickel at all times.

“(Spoerhase) saw me, smirked, looked over at me, stood around for a few minutes and then engaged in conversation with Larry Baker,” Hickel wrote that night in the email.

Hickel said a friend asked Spoerhase to leave the event. After initially protesting, he departed, she wrote to the Office of Victims’ Rights. (The office is an agency of the state Legislature that provides legal services to crime victims and advocated for Hickel in the cases.) No charges were filed.

In October, Spoerhase was quietly appointed to a city advisory committee created by the mayor, despite his pending trial on the felony stalking charge. The mayor was aware of the appointment, according to the chairman, and Spoerhase remained on the committee until the Daily News began asking questions about it the week of Jan. 9, when he resigned.

“It’s Almost Magical to Behold”

Bronson once told a city Rotary Club that the best thing about coming to City Hall each day was watching his hand-picked team at work.

“We’ve got young, we’ve got old, and they work together,” Bronson said. “We’ve got a 21-year-old who’s virtually a genius and I watch him and Larry (Baker) work together day in and day out and it’s almost magical to behold.”

“And I’ll be honest with you,” he said. “I don’t run the city. Amy Demboski runs the city.”

Now, key pillars of Bronson’s team are either gone or threatening to sue him. Other executives and City Hall staff are actively seeking new jobs while attempting to stay out of the fray. All asked for anonymity, saying they feared retaliation if they spoke on the record.

After Demboski went public with her allegations, the city ombudsman warned that one of Bronson’s staff might have been spying on employees to see who was talking to investigators and referred the accusation to prosecutors for investigation. The ombudsman described the complaints city staff had lodged against a Bronson executive in a public memo.

Bronson’s young “genius,” Deputy Chief of Staff Brice Wilbanks, who is now 23, resigned in mid-January — as multiple City Hall workers alleged he had spoken openly about reviewing surveillance footage to see who might be whistleblowing to the ombudsman or Assembly members.

After quitting, Wilbanks immediately tried to rescind his resignation and demanded paid administrative leave in a letter from his lawyers. The letter accused the ombudsman of acting inappropriately and of denying Wilbanks due process and violating confidentiality — even though the ombudsman never publicly named Wilbanks as the accused executive.

At the time, Wilbanks did not respond to interview requests and one of his attorneys declined to comment. His attorneys did not return another phone call and request for comment on Thursday.

The city’s acting municipal attorney gave the mayor her letter of resignation on Jan. 23.

Many City Hall workers have continued to describe an ongoing atmosphere of low morale, fear and suspicion in the top levels of Anchorage government.

The ombudsman, Darrel Hess, said he is investigating six or seven open cases lodged by current and former employees. He also said that between November and the end of January, he’d received 12 to 14 complaints from current and former city employees, all raising a variety of concerns. Some made allegations of purposeful violations of the city code by staff. But by far, the most common concern raised by complainants is a hostile work environment — in unusually high numbers, he said.

Hess has been the ombudsman for 10 years.

“I would say in the last year, we’ve seen more allegations of a hostile work environment than the other nine years put together,” he said.

As Hess spoke to a Daily News reporter last week, he glanced at his email inbox and said, “As we’re speaking, I just got an email from a municipal employee alleging a hostile work environment.”

“I’d better respond to it,” he said.

Source: https://www.propublica.org/article/alaska-anchorage-larry-baker-mayor-dave-bronson

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