Did a Scandal Sink the U.S.S. Palin?

The suddenness of Sarah Palin’s resignation raises questions about whether a coming scandal caused her to leave office. Max Blumenthal looks at one possibility.

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Plus: Read more of The Daily Beast's coverage of Palin's resignation and the GOP implosion.

The suddenness of Sarah Palin's resignation Friday raises the question about whether Palin is leaving to avert a major scandal. One logical place to start looking is the affair that has Alaska political circles buzzing: an alleged scandal centered around a building contractor, Spenard Building Supplies, with close ties to Palin and her husband, Todd.

Many political observers in Alaska are fixated on rumors that federal investigators have been seizing paperwork from SBS in recent months, searching for evidence that Palin and her husband Todd steered lucrative contracts to the well-connected company in exchange for gifts like the construction of their home on pristine Lake Lucille in 2002. The home was built just two months before Palin began campaigning for governor, a job which would have provided her enhanced power to grant building contracts in the wide-open state.

SBS has close ties to the Palins. The company has not only sponsored Todd Palin's snowmobile team, according to the Village Voice's Wayne Barrett, it hired Sarah Palin to do a statewide television commercial in 2004.

Though Todd Palin told Fox News he built his Lake Lucille home with the help of a few "buddies," according to Barrett’s report, public records revealed that SBS supplied the materials for the house. While serving as mayor of Wasilla, Sarah Palin blocked an initiative that would have required the public filing of building permits—thus momentarily preventing the revelation of such suspicious information.

Just months before Palin left city hall to campaign for lieutenant governor, she awarded a contract to SBS to help build the $13 million Wasilla Sports Complex. The most expensive building project in Wasilla history, the complex cost the city an additional $1.3 million in legal fees and threw it into severe long-term debt. For SBS, however, the bloated and bungled project was a cash cow.

Prior to her sudden announcement, Palin gave every indication that she intended to complete her tenure as governor.

On July 1, Palin met with Alaska Senator Mark Begich to discuss funding for the missile-defense systems that would be stationed in Alaska. In May, Palin initiated a plan to circumvent the state legislature by introducing a ballot measure that would ban minors from receiving abortions without parental consent. She vowed to be the first to sign the measure event though it would not be certified until August 2010.

In her press conference, Palin blamed the media for her demise. "You are naïve if you don't see a full-court press on the national level, picking apart a good point guard," she declared, using a basketball metaphor to refer to the flood of critical stories published about her. Following her resignation, Palin's attorney issued a statement calling any link between her decision and an investigation into the construction of the Wasilla Sports Complex a "canard," and that the Palins lawfully purchased materials for their Lake Lucille home from SBS, which was the dominant building supply company in Wasilla. The statement added that Palin would "will be exploring legal options" against anyone who reported as fact the "falsehoods" she resigned because of a federal probe.

On July 1, CBS reported that a story authored by me and journalist David Neiwert for Salon.com in October 2008 about Palin's ties to a secessionist political party caused her deep personal distress, and provoked a rancorous series of exchanges with her campaign manager, Steve Schmidt. Coupled with a withering profile of Palin published in the August 2009 issue of Vanity Fair, the new round of exposés may have been too much for Palin to stomach.

Palin may have resigned from politics altogether. According to NBC’s Andrea Mitchell, Palin "has told some of her biggest backers in the national Republican Party that they are free to choose other candidates for 2012." But those choices are dwindling at a surprisingly rapid pace.

Max Blumenthal is a senior writer for The Daily Beast and writing fellow at The Nation Institute. Contact him at [email protected].