Palin's split with Alaska GOP opened opportunity

ANCHORAGE, Alaska Instead, Palin worked aggressively to clear her name, and her advocacy for clean government helped propel her into the governor's seat.

"She kind of became the go-to person for ethics and that kind of kept her in the limelight," said Judy Patrick, a Palin friend who was her deputy mayor in Wasilla from 1998 to 2002.

Her image as a reformer-on-the-rise was a big part of Palin's cachet when John McCain went looking for a running mate.

McCain, himself, became a stickler for ethics after his own behavior was questioned in what became known as the Keating Five scandal two decades ago. As a freshman senator, McCain was rebuked by the Senate Ethics Committee for "exercising poor judgment" in intervening with regulators on behalf of savings and loan financier Charles Keating. McCain later called it "the worst mistake of his life," and he worked assiduously to rebuild his reputation.

Palin's tussle over ethics began when she confronted Randy Ruedrich, the state GOP chairman who was her colleague on the Alaska Oil and Gas Conservation Commission, about behavior she saw as inappropriate. Not only that, she took the matter to the office of the governor at that time. To outsiders, however, it looked as if she might be trying to hide something.

It was a sticky situation for an ambitious woman. Her crisis management ultimately proved so deft that she earned a reputation for ethical reform that could carry her to Washington and the vice presidency. It sure didn't seem that way at the time.

Back in 2002, Palin was a small-town mayor who had come out of nowhere to finish second in the GOP's lieutenant governor's primary.

After Frank Murkowski became governor, she was short-listed to fill Murkowski's Senate seat but lost to his daughter Lisa.

Instead, Palin got the plum appointment to lead the regulatory commission.

That's where Ruedrich was writing questionable e-mails -- seeming to conduct GOP business on commission time, against ethical rules, and lobbying for the industry he was regulating.

Palin talked to Ruedrich and the Murkowski administration about the situation, associates said, but nothing immediately changed.

"She was just incredulous that even after being confronted, Randy Ruedrich wouldn't stop sending e-mails from his computer," said Patrick. "Nobody acknowledged any wrongdoing."

But after a few months, Ruedrich stepped down.

Reporters were pressing Palin to speak out about the Ruedrich investigation, which continued after he left. The governor, who had appointed both of them, kept Palin in the dark about an investigation by the attorney general and told her to stay mum, according to reports at the time.

The third member of the commission, Dan Seamount, said Palin started hearing accusations that she was part of a cover-up.

"I think that really frustrated her," Seamount said. "She was frustrated that the Murkowski administration would not say anything about it. So she quit."

Having taken on the head of her party, Seamount said, Palin also worried about the price she may have paid.

"One of the things she told me was that her political career was destroyed, she had no future in politics because she would never get any money from the party," he said.

The investigation led to a settlement in which Ruedrich admitted to leaking confidential information to an energy company and conducting party business on the state's time. He was fined $12,000, the largest civil fine levied in Alaska for an ethics case.

Freed from her gag order, Palin set about restoring her name. She spoke out about how she tried to bring the complaints against Ruedrich to the attention of the governor's office. Her reputation grew as a reformer.

"She may have been thinking her political career was over, but she never dropped back into the shadows," Patrick said.

It seemed the more unpopular Murkowski became in public opinion polls, the higher Palin's star rose. Then she decided to challenge Murkowski in the 2006 election.

Her campaign, with its theme of change, coincided with criminal investigations into several GOP luminaries that ultimately led to numerous indictments, including that of Sen. Ted Stevens. She acknowledged having fortune on her side during her run for governor.

"I've been blessed with the right timing here," she told The Associated Press in October 2006.

Palin steamrolled Murkowski in the primary, then beat former Gov. Tony Knowles in the general election.

Seamount said Palin's biggest weapon is that people underestimate her -- a lesson for those who say now that she lacks the experience to be vice president.

"I noticed she uses her adversaries' arrogance against them," Seamount said.

Ruedrich, still Alaska GOP chairman, declined to comment on that point. But he says he supports her campaign and feels no rancor.

"If there was a grudge, I probably couldn't stay on with the party, could I?" he said. "I am looking forward to supporting her, and she is looking forward to our help."


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