Jan 29: The madness of Mat Maid and the media

Last week the Department of Natural Resources released a report analyzing the operations of Matanuska Maid for a thirty month period between January 2005 and July of 2007.

Both the media and the DNR have reported it as an audit on Matanuska Maid. However the firm that conducted the report, specifically stated that they "were not engaged to and did not conduct an audit". 

An audit means they would have investigated any questionable expenses by conducting interviews with past management to fully understand the nature of the charges.

They didn't.

"Mat Maid audit tallies management spending" KTUU news stated as they went on to describe the 66-page document as showing company CEO Joe Van Treeck was reimbursed for almost $8,000 of expenses in August of 2005.

Did they ask what that $8,000 was for? No.

Did they know that since Mat Maid had no company credit cards, that Van Treeck and other routinely paid for parts and other company bills only to get reimbursed. No.

They didn't even mention that in August of 2005 when these  charges took place, the person in charge of Matanuska Maid was  none other than Tom Irwin.

The same Commissioner who is now waving around this $30,000 witch hunt and calling it an audit.  

So the question has to be asked; was Tom Irwin asleep at the wheel for nineteen of the thirty months the analysis covered?

In an Anchorage Daily News article, "Mat Maid failures detailed in audit" they wrote that over the 30-month study period, employees  were reimbursed more than $235,000 for travel, lodging, meals and expenses.

Over a 30 month period this averages $7,800 per month for a $15 million a year company. But more importantly, the press doesn't tell you how much was travel, how much was meals and how much was reimbursement for equipment and supplies since Matanuska Maid didn't have any lines of credit.

Again, was even one Mat Maid executive interviewed as to the nature of these charges? No. Because as Mikundra, Cottrell & Company stated in their cover letter, this was not an audit.

However the ADN story did show how transparent the attempt to tarnish the former executives and board members when you read the quote from the guy who Governor Palin brought in to turn the dairy around.

"The reason Matanuska Maid was financially not a viable organization and didn't have much of a future was because the cost of the milk went up. That turned their margins upside down," said Ralph Carney.

So now we know that none of these questionable expenses had any bearing on the fate of the dairy. So why bring them up and allow them to be reported as such. Ironically under Carney's watch, the dairy lost more money in one single month than any time in the previous 23 year history of the dairy.

The legislative audit which includes the Palin administrations role in Matanuska Maid, will be released by the Legislative Budget & Audit Committee this week.

This is just another attempt by the Palin administration to cover up their poor handling of Mat Maid and to villify the former executives at Mat Maid and the former Creamery Board after all of their predictions came true.

 

More inside comments on Matanuska Maid:

 

On the report by Mikundra,Cottrell & Company:

 

Of course right in the beginning it says no managers were interviewed to get their side of the story.  $235,000 over 30 months in expenses.  Let me tell you that Mat Maid had no company credit cards so anything that was needed for the operation that they did not have an account for had to be paid for on employee personal credit cards and then  be reimbursed.  That included parts, equipment pieces that wore out supplies, etc. That included car allowances, travel, everything lumped together.  Remember, they had no line of credit ever so this is they way they had to conduct business.  Year after year of audits by Shramek Hightower showed no irregularies.  No letter reprimand from any board in 23 years.  The expenses if you break them down the normal way instead of the way the news presented it would show average if not low expenses for a $15 million dollar company. 
 
Every single item mentioned on the news can be explained.  This is all a red herring and the fact that company executives never got to defend themselves. It is easy to paint a picture without telling why certain things were done.  Kristan Cole and the Governor got their desired result for the $27,000 they paid.  They were instructed to stop short on getting the other side of the story.  So unfair and spiteful.  Not sure where all this will end up for us. 
 

What about this board who in 6 months gave the farmers an additional $250,000 in milk money?  What about the hundreds of thousands of dollars they gave to the new dairy plant owners for a mere $200 a month?  What about the $20.50 a hundredweight  they voted to pay farmers for milk being dumped into the fields?  What about the $200,000 additional they want to give them?  Where is the mismanagement there?

 

 

On the backroom dealings to liquidate Mat Maid's assets: 

 

MM is heading for lawsuits if they don't watch it more carefully. i cannot believe this robbery and basically legal looking embezzlement activities are going on; this smacks of so much of what was wrong with Alaskan politics that SP was suppose to clean up.
SP has been totally quiet on this as far as I am seeing; she basically has given up and is letting the insiders pick what they want to do, using pioneer age law and rules, not legal system; but breaking contracts and such is coming to bite them.

 

On the Valley Milk Farmers threatening to sue the state:

 

Andrew....Know you must have just seen the news about the dairy
farmers ready to sue the state!    They just will not take NO for an
answer---That has been the problem, no one ever says no to them.  They
have farm rallys and make threats and in the end get their way.  The newly
appointed  board decided to shut down at the end of the year because the
new dairy co-op said they would be ready to accept milk starting December
14.  So why are they not suing Kyle Beus and Rob Wells who got the Federal
grants and said they would be up and running? Why are they not
accountable? 
Where will this all end?  Will the Hay Farmers also sue for
having their market taken away?   And what about Alaska Mill and Feed,
will they sue? And what about the Mat Maid employees who have not found
employment yet---can they sue too? 
All this could have been voided if the governor had listened to the old Creamery Board and trusted that they had studied the problem to death and that was the correct decision. This new development will now cost millions and millions. 
They may just ask for the money to have the cows culled, take the $$ for the
meat and then sell their land to developers.  They would be happy.  In the
meantime----------creditors STILL are not being paid.  How will they be
paid???  Guess they will all have to sue too

 

Now you have the dairy farmers ready to sue.  This was predictable.  They have learned how to work this system, from loan write downs, to loan moratoriums, to getting money given by this State to them to be paid out at $2/per hundredweight until the $500,000 ran out.  Every time they ask....they get.  They seem to be the untouchables.
 
The reason Mat Maid was asked  to stay  open a week longer than scheduled was to make sure Kyle Beus and the South Central Dairy Joint Venture group would be "ready to begin accepting milk on December 14." 

 

So, how on earth is that suddenly the State's fault? They now say they are MONTHS away from being ready. 

 

Sarah Palin even stated on December 8 that they had "provided ample time for the farmers to prepare". This group was granted hundreds of thousands of dollars of equipment for a few hundred dollars a month on the promise they would be "up and running in December."  As you can see from the news they are all over the board with their start-up dates.  Where is the accountability there? 
 
And make no mistake...despite what Don McLean (Valley dentist who is representing this group) has to say, there is not one word in the appropriation language about sharing that money with the farmers. Dick Lefebvre at DNR even confirmed that on KTUU  on the 1-11-08 news.  Their inefficiencies over their years have remained even though at times they were paid double and more what lower 48 farmers were making.  They bark all the time that Mat Maid never gave them a price increase in 20 years.  The national milk price average is only up approx 30 cents from 20 years ago. 

 

These farmers never had to ride the "lows" like lower 48 farmers did.....The valley farmers  had an inflated , steady "high" price paid to them the entire 20 years.   That is unheard of in a commodity business.  Their cash cow" (Mat Maid) has left the scene so they know now they had a good thing going and they blew it by constantly bickering and fighting about the price of milk.  Now, they were relying on this new venture and they are finding out they don't know what they are doing.  They were in begging Mat Maid employees in the final days to come out and work for them as "they didn't know how to run any of the equipment." 

 

That is scary.......people going into the food business and they have no one who knows how to run the equipment?  And they are now asking the public to step up and buy "cheese in advance?"  This is the same bunch who was demanding a "Severance package" from Mat Maid!? Unbelievable.   Mat Maid was not a co-op, they were structured as a private corporation owned by the state.  No Mat Maid employees were "state employees" nor received any State benefits.  Most people do not realize that.  And despite popular folklore, Mat Maid did not get one cent of help or subsidies from this state since 1988.
 
This is a sorry, sorry mess with no easy solution.  Four farmers are continuing to sell 40% of their milk to Northern Lights Dairy---a fact they try to keep out of the news.  So.......why don't they go take out a small loan to keep them going until the South Central Dairy Joint Venture is up and running?  Stand up and take responsibility for the career they have chosen and let the State off the hook.  Once you start giving them free $$$, there will be no end to the assistance they will continue to ask for. 
 
So now the State is being strong armed into an appeal where an answer has to be produced within just a few short days and the pressure is now on the Legislative body to decide.  How much money are they going to allow to be given to 4 people?  If the money is given, who else will sue?

On what is happening today:

Div. of Ag has ordered another set of appraisals to be done!  What a waste of money.  Why are they being REAPPRAISED when it was just done this last summer?  

copyright 2007 Andrew Halcro, All Rights Reserved.