ANCHORAGE -- UA Regent Jim Hayes and his wife, Chris, were indicted by a federal grand jury Wednesday for allegedly funneling more than $450,000 in government grants to fund construction of a church where he is the pastor.
The government funds meant for low income youth also were used to buy a plasma TV for the couple's home, pay for a family wedding reception and cover personal bills, the indictment says. The couple faces multiple charges, including money laundering and illegal application of government grants.
The 92-count indictment alleges the couple diverted government funds awarded to a Fairbanks charitable organization run by Chris Hayes to pay for construction and furnishings for the church.
The charges come a year after federal agents searched the Hayes' home, the Lily of the Valley Church of God in Christ and the LOVE Social Services Center. Chris Hayes' parents founded the church.
Calls to the couple Wednesday evening by the AP were not immediately returned. The Sun Star tried to call them Friday, but was unsuccessful.
Jim Hayes, 61, is a member of the Board of Regents and was Fairbanks city mayor from 1992 to 2001. He also has served on the Fairbanks City Council and the Fairbanks North Star Borough Board of Education.
Hayes notified university officials a couple weeks ago that he would not be able to attend the regents' retreat in Anchorage on Friday and Saturday, university spokeswoman Kate Ripley said. He is still a regent, she said, noting that only the Legislature could remove him from the board.
"It's not up to the regents to remove him or anybody," she said. "They don't have that power."
On Saturday, the Fairbanks Daily News-Miner reported that Jim Hayes used his current title of University of Alaska regent to bolster a request for a $750,000 grant from the U.S. Office of Juvenile Justice and Delinquency Prevention for LOVE Social Services.
Hayes supplied a letter of support, in which he listed his credentials as a former mayor of Fairbanks and as a member of the UA Board of Regents.
"As a member of the Board of Directors for the LOVE Social Services Center, Inc. and as a Board of Regents (sic) for the University of Alaska, I can think of nothing but praise for the organization," Hayes wrote.
Alaska law and university policy prohibit public officials from using their positions for personal gain or the gain of their family.
Assistant U.S. Attorney Karen Loeffler said the Hayes' had not been arrested. Loeffler is seeking a court summons for the couple, saying they are not considered a flight risk.
"They're longtime residents of Fairbanks," she said. "They've known about the investigation."
LOVE Social Services Center received more than $2.7 million in federal grants between 2001 and 2005, according to the indictment. The tax-exempt organization was set up in 2000 to provide social and educational services to low-income youth in the Fairbanks area. The grants came at the direction of U.S. Sen. Ted Stevens, R-Alaska, the News-Miner reported.
The indictment says the organization used the original grant money to buy the old Lily of the Valley Church building. A larger church was built across the street. According to the indictment, when the construction cost for the new church exceeded its funding sources, the Hayes' diverted government grant funds.
The indictment says the couple illegally used the funds to pay construction bills and provide furnishings as well as cover operating expenses for the new church. According to the indictment, Chris Hayes, 56, had her organization write checks for cash that she then used to purchase money orders and cashier's checks.
With additional reporting by the Sun Star.