Bob Gillam grew up in Anchorage where his parents owned a liquor store on Fireweed Lane. The family lived in an apartment behind the store. From there his official biographies, and news articles, tell us that he graduated from the prestigious Wharton School of business in 1968. After Wharton, he went on to the Anderson School of Management at UCLA where he obtained an MBA. In 1970, he returned to Alaska and worked for Alaskan branches of two brokerage companies, Foster and Marshall and Boettcher & Co.
Here begins a blank spot in Gillam's official resume, but a bit of digging has revealed some of what is missing. The official version has Gillam quitting the brokerage business in the "late '80s" and starting McKinley Capital Management, his current investment firm, in 1990. In fact, he left Boettcher & Company in 1985 and took a job as an executive at Home Savings Bank. Eventually--or perhaps even immediately--he became Chairman, CEO, and a major owner of the bank. (ADN 1/7/01) At some point, the bank ran into trouble, as did numerous other banks in Alaska. In the first half of 1986, the price of crude oil dropped precipitously and the Alaskan economy sank. Home Savings is reported to have lost $6.3 million in 1987 and had a net worth of only $168,000 at the end of the year. (ADN 3/20/88)
By this time, the Federal Deposit Insurance Corporation was deeply concerned about the troubles facing this federally insured bank. In December of 1987, federal regulators required the bank to sign a "forbearance agreement" forbidding distributing the bank's assets to the officers and shareholders. Despite the agreement, the bank's board set up a $300,000 indemnification fund to benefit Gillam and bank president Joseph Miller--more than the net worth of the bank. The FDIC objected and demanded Gillam and Miller be ousted. At this point--about May or June of 1988--the two granted themselves large severance packages. Gillam took $177,480 and Miller, received $88.000. An administrative assistant got $16,500 and a fourth employee refused the money.
''I'd see people on the street, and they wondered why I wasn't in jail,'' he said. ADN 1/7/01
The Resolution Trust--an organization created by FDIC to take over troubled banks--immediately sued to get the money back. They prevailed in the Federal District Court and the Ninth Circuit Court of appeals. See Resolution Trust v. Gillam, 952 F.2d 1152 (9th Cir, 1992) For his involvement in all of this, a regulatory action was brought against Gillam by the Federal Office of Thrift Supervision. The outcome of that action was a settlement and order whereby Gillam was banned from involvement in banking. But in the end, Gillam may have gotten off easy. Miller was sentenced to a 30 month prison term. (ADN 7/23/94) Gillam's response to the ban: "Nothing in there has ever been proved." Apparently the disputes with the FDIC continued until 1996 when a lawsuit against Gillam to recover the money lost by Home Savings was dismissed.
Gillam claims to have lost almost everything in the Home Savings debacle--$4 million of his personal fortune. And according to news reports, he had to sell his Jaguar to get the money to buy computers for this new business, McKinley Capital Management. Gillam claims to have been virtually broke in 1990 . . . but was he?
The establishment and early years of McKinley Capital seem to reflect the problems with the Federal Government--Gillam seemed to be hiding his money. While the official biographies and promotional literature for McKinley Capital Management say that it was started in 1990, but the State of Alaska's records indicate that it was created on March 11, 1991, with someone named Vern L. Padgett as president and Gillam as the incorporater. The first Biannual Report for the Corporation lists 100% of the shares as being owned by Mary Couch who gives her address as 3301 C Street Suite 110, Anchorage--McKinley Capital's office at the time and a space in the same building that they occupy today. The December 1992 Biannual report lists the owner of 100 percent of the shares as Asset Management Trust. This arrangement continued in 1994 when an article in the Anchorage Daily News described him as a "portfolio manager" at McKinley Capital, rather than an owner. In 1996, after the end of the Home Savings legal problems, Gillam is shown and President and 100 percent owner of McKinley Capital.
Some of what Home Savings was involved in is relevant to Gillam's home on Lake Clark. In the early 1980s, Nondalton Native Corporation--which became Kijik Corporation--developed a large subdivision on their land on Keyes Point on Lake Clark. This is the site of Gillam's lodge. Kijik's ultimate plan was to create up to 500 lots. Big investors such as Hickel investment bought larger tracts for future development. ADN10-26-86 All in all, Keyes Point had the potential to be a significant sized town within the confines of Lake Clark National Park.
Unfortunately, for Kijik Corp, sales began to stall in the mid-1980s while expenses soared. Gillam, who was an early buyer of six lots, came to the rescue. As Home Savings Bank was spiraling towards bankruptcy, it loaned Kijik about $7 million. (Kijik Corporation granted a Deed of Trust to Home Savings in October 1987.) All that in the face of a shattered Alaska economy. Kijik, and at least some of the Nondalton people had good reason to be grateful to Bob Gillam. There is most likely much more to this story, but what is not clear at this time.
It was about 1996 that Gillam began to be a big contributor to Alaska's politicians, both state and federal. He had unsuccessfully tried to persuade the legislature to bail out Home Savings in 1988, but seemed to have relatively little political footprint other than that.
For now, I will leave the rest of the story to the official biographies and available news articles.
