FAIRBANKS — Banker Bill Stroecker made a fortune in Fairbanks during his 90 years and left most of it to charity at his death, listing 50 organizations in his will that he supported.
He directed the trustees of his foundation to make the key decisions on how to allocate funds but warned that he wanted not a single dollar given to "any qualified charitable organization which is or has become what I would characterize as 'left wing' or 'greenie'; the trustees shall abide by my directions in this regard."
In time, the foundation will be paying out a total of more than $1 million a year, under IRS rules, much of it to groups in Alaska.
But nearly four years after Stroecker's death, his estate, estimated at more than $23 million, has yet to be settled. It's not the prospect of supporting greenies that has proved to be the hangup, however.
Rather, the trustees of his foundation can't agree on the need for an independent review of attorneys' fees and all other settlement costs — estimated to total $750,000.
Three members of the seven-member board — lawyer Cory Borgeson, surveyor Richard Heieren and banker Jerry Walker — have gone to court seeking an independent review. They say it is needed to protect the beneficiaries of the foundation.
"They're going to turn over almost $25 million to the foundation," Borgeson said.
"We think someone has to review what's happened. The attorney general's office has not stepped in," Borgeson said, adding that "we think they need to."
Here's the rub: The review would in part assess the performance of two other members of the foundation board — lawyer Richard Hompesch and the Alaska Trust Co. — who have also served as "personal representatives" of the Stroecker estate and are to be among the major recipients of payments for their work on the estate over the past 3.5 years.
The final two board members — Don Dennis, a longtime official of the Alaska Goldpanners baseball club and retired accountant Ted Cox, a longtime leader of the Fairbanks Curling Club Foundation — sided with Hompesch and the Alaska Trust Co. in opposing an external review.
Pending the final settlement of the estate, the personal representatives approved the distribution of $500,000 in 2012 and $500,000 in 2013, benefiting dozens of charities in Fairbanks alone.
The foundation members allowed each of the seven board members to direct one-seventh of the total in both years. Among the larger beneficiaries of the Stroecker Foundation so far are the Salvation Army, the Goldpanners and the Curling Club Foundation.
The minority members have charged in court documents that Hompesch and Alaska Trust formed a working alliance with Dennis and Cox to prevent a review of the books.
"What has occurred is that Alaska Goldpanner baseball and the Fairbanks Curling Club are the top distributees of Hompesch, Alaska Trust, Dennis and Cox," the minority members said.
Dennis cannot direct funds to the Goldpanners and Cox cannot direct funds to the curling club foundation because of their close involvement with those groups. Dennis has directed about one-third of his share of funds to the curling club, while Cox directed something similar to the Goldpanners.
Hompesch and Alaska Trust both directed significant portions of their "one-seventh" shares to the Goldpanners and Curling Club Foundation.
"By trading distribution of money to Dennis' and Cox's charities of choice, Hompesch and Alaska Trust have created a block of votes that will prevent any review of accountability for Alaska Trust or Hompesch as personal representatives," the minority members said.
In his response, Dennis said that it was Borgeson who said that "I could allocate money from my one-seventh of the $500,000 to the Fairbanks Curling Club Foundation Inc. and that Ted Cox could allocate money from his one-seventh of the $500,000 to the Goldpanners."
He said it is ironic that the three minority members accused Hompesch and Alaska Trust from preventing any review of the actions of Hompesch and Alaska Trust since "Borgeson first suggested 'trading distribution of money' in the first place.'"
The four-member majority says the three-member minority has no standing to demand an external review or to pursue an action in Fairbanks Superior Court because the majority rules. They also argue that the court has the power to review expenses charged to the estate, but not the duty to do so.
The minority counters by saying that the foundation beneficiaries can only be protected by making sure that the $750,000 has been spent wisely and that all the math has been checked.
In an April meeting of the trustees, according to minutes filed with the court, Doug Blattmachr, president of the Alaska Trust, spoke against a motion for an external review.
He "interpreted the motion as if they had done something wrong. They felt that the motion was harming Alaska Trust's integrity and they were offended," the minutes said.
The minority says that because Hompesch and Alaska Trust have a conflict of interest on this question of an external review they should not have voted on the motion. Removing their votes would have turned the three-member minority into a majority. But the four-member majority argues that four votes would have been required to take any action, so three would still not be enough.
Hompesch said there is no legal authority to show why he and Alaska Trust should have abstained. Robert's Rules of Order allows conflicts of interest.
"While the rules discourage members from voting on matters that will result in direct personal pecuniary gain, they nonetheless make the abstention optional," Hompesch wrote.
He also said that by naming Hompesch and Alaska Trust as his personal representatives, Stroecker created the conflict and "implicitly waived the conflict."
One thing that the majority and minority agree on is that Stroecker, who kept everything about money low key and preferred working behind the scenes, would be appalled at what has transpired among those he chose to carry out his wishes. They also hope that the disputes can be settled and the foundation can become a major force for good in Fairbanks and other parts of the state.
The disagreements stem in part from what appear to be basic differences over how the foundation will operate.
According to the minutes of a foundation meeting this spring, Hompesch said that while he was alive, Stroecker never brought in an outside auditor in to review the books of the foundation he set up in honor of Stroecker's sister, "hence the word private foundation."
Hompesch addressed Heieren, saying, "I don't see why or how you have to answer to the public on any matter. Simple as that."
"I have a different mindset than you do," Heieren said.
The beneficiaries of the foundation have a "right to know what we're doing and I think it's a way to extend Bill's legacy," Heieren said.
Jerry Walker said that all charities of any size are required to have annual audits.
"It seems like with assets of this size in this complexity and this cost to administrate over the last three-and-a-half years warrants an independent look," he said.
Heieren said he has had a lot of contact with the public and the charities named by Stroecker in his will.
"I just wanted to make sure that there was somebody else looking over everything," he said. "I've had people walk into my office and say, 'You're being watched,' and that's a little unnerving. Some of them are representatives of charities."
By any measure, Stroecker played an outsized role in the development of Fairbanks through his work as a banker and his involvement with institutions ranging from Fairbanks Memorial Hospital to the Salvation Army.
Born in 1920, he grew up in Fairbanks, served in the Army at Ladd Field and worked at the family bank, First National Bank of Fairbanks, for decades, even after it was sold and became a part of larger institutions.
He played trumpet with the Frigidaires band, helped keep summer baseball going by backing the Alaska Goldpanners and enjoyed raising dogs and hunting.
Stroecker was like a walking encyclopedia on Fairbanks history. He walked to work every day for 60 years and covered countless miles on snowshoes, visiting the string of 18 cabins across a wide section of Interior Alaska that served as weekend retreats.
Upon his death in 2010, he still had his prized 1959 Studebaker pickup with factory four-wheel-drive, along with a vast library about Alaska and the Arctic.
"I can't imagine going someplace that would be as good," he told a reporter in 2003 about his fondness for Fairbanks. "The isolation, the woods, the outdoors and above all the friendship."
Cole can be reached at dermot(at)alaskadispatch.com.