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Corruption Chronicles

Mayor Steals Federal Earmark Money

A former Alaska mayor has been indicted for embezzling at least $450,000 of Congressional earmark money, provided by his close friend in the U.S. Senate and intended for educational services to low-income youth.

The money was part of the nearly $3 million earmarked over five years to a Fairbanks tax-exempt organization called LOVE that provided social and educational services to the area’s needy youth. Instead, former Fairbanks mayor Jim Hayes used much of the money to pay credit card bills, buy an expensive plasma television and throw a lavish wedding reception. Some of the cash was also used to build a church, where Hayes is a pastor.

A 92-count federal indictment charges Hayes and his longtime wife, Chris, with money laundering and illegal application of government grants for stealing the public funds that had been awarded to a charitable organization. The millions in federal money came from earmarks that Hayes’ longtime friend, Republican U.S. Senator Ted Stevens, directed through the Department of Housing and Urban Development and the Department of Justice.

Once the money was distributed, the federal agencies did not review how it was spent, according to documents obtained from an Alaska newspaper through a Freedom of Information Act request. Detailed budgets were required before the money was released, but with no follow-up the agencies have no clue whether the budgets were followed.

Hayes, a Democrat who became Fairbanks’ first black mayor in 1993, founded and operated the nonprofit organization he stole money from. He held seats on the local school board and city council before ascending to mayor and he always credited his mother for instilling in him a strong work ethic.


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