Why the Permanent Fund Corp Turmoil?

I hear the train a-comin’

Back in the 1960s my father went to great lengths to build an elaborate electric train setup on a piece of 4x8x3/4 plywood. It had plaster-of-paris mountains and a lake and all kinds of track to drive the trains on. After I and my siblings put milk and cookies out for Santa Claus and went to bed, Dad had to move that wonderful work of art and engineering into the living room of our home in Albuquerque, NM. He set it up, had it all plugged in and running pretty good, when he accidently hit the WHISTLE BUTTON. It was loud! It woke us all up.

Christmas was on…

That’s what has happened recently with the Alaska Permanent Fund Corporation (APFC) firing of Chief Executive Officer, Angela Rodell. Release of Rodell’s personnel file after she was fired shows she had been standing her ground against a board that may believe it is accountable only to too-tall Mike. For background: Alaskans who have an ownership stake in our State’s resources were blissfully sleeping, happy to be getting the statutorily set Permanent Fund Dividend over 40 years, when somebody elected Bill Talker as governor. In 2016 the governor vetoed the $2,052.00 amount and Alaskans received $1,096.38. Ultimately the Juneau gang changed payout rules for the PFD to give Alaskans crumbs instead of cake as required by law.

And, recently the good ‘ol boy Alaska Permanent Fund Board (APFB) is telling us the shrieking train whistle that woke us all up was just a silly accident.

Not to Worry?

Some people have been asking for a long time why appointed board members of APFB are NOT confirmed by the Alaska Legislature. Now, with pending legislation calling for legislature confirmation of APFB members (HB 412)–and the sudden firing of Angela Rodell—perhaps we need to start asking some more questions about how The Peoples’ Permanent Fund Corporation is being run. [1]

Sure, the fund is making money–but what else is going on with this publicly-held corporation garrisoned at its own Juneau fort?

I have a couple of other questions, too:

• Why aren’t there any regular people besides those who are part of the monied entitlement class on the APFB?

• Why can’t individual Alaskans invest in the Permanent Fund with their own money and get the nice returns the State of Alaska uses to increase government spending?

• Shouldn’t Alaskans be able to roll our individual annual PFD into this wealth fund for something more valuable in the future?

• How can this six-member board go behind closed doors, sac the executive director of the APFC, then stiff-arm the lap-dog media–which includes Republican Party of Alaska spokeswoman Must Read Alaska, with nothing more than a 300-page personnel file showing Rodell stood her management ground–as an excuse? [2]

Alaskans don’t want turmoil at the Permanent Fund. Now we are all waiting for the next shoe to drop.

S0, who ARE these Alaska Permanent Fund Board Trustees?

William G. Moran, Chairman was appointed by outgoing Gov. Frank Murkowski on 11/15/06. All other APFB members have been appointed by incoming governors, but Gov. Sarah Palin kept Moran. He served as vice-Chair for three years (2007-2010) and Chair eight years (until 09/27/18). He was reappointed by Gov. Sean Parnell for two four-year terms (2010 & 2014). Gov. Mike Dunleavy reappointed Moran 07/01/18 and his term is through 07/01/22.

Steve Rieger, was re-appointed 05/13/20 to replace Carl F. Brady, Jr. who passed away 04/06/20. He became Vice-chair 09/24/20. Rieger previously served as trustee of the Alaska Permanent Fund Corporation from 2009-2013. He has served six years in the Alaska House of Representatives and four years in the Alaska Senate.

Corri Feige, Commissioner of Natural Resources, is a geophysicist and engineer with more than two decades of management level experience in the energy business.

Lucinda Mahoney, Alaska Commissioner of Revenue, is former Anchorage Municipal Chief Fiscal officer under Mayor Dan Sullivan. She replaced Bruce Tangeman who left the Dunleavy Administration 11/15/19.

Craig W. Richards, (9/27/17-9/24/20) A law partner of Bill Walker, Richards was appointed to the APFB by Gov. Walker in 2017 for a four-year term. He had previously been confirmed by the legislature as Gov. Walker’s Alaska Attorney General 02/01/14 to 06/23/16 and simultaneously served on the APFB during that same time.

Ethan Schutt was appointed to the APFB in 08/12/20 by Gov. Dunleavy. He is CEO of the for-profit Alaska Native Resource Development LLC, subsidy of Alaska Tribal Health Consortium, of which he was previously Chief-of-Staff between 2018-2020. For almost 13 years Schutt was Senior Vice-President, Land & Energy Development, Cook Inlet Region, Inc. He has held other distinguished positions with other Alaska Native corporations.

Is the APFB adequately insulated from political influence?

The APFC board is subject to much political influence. Any new Alaska governor would appoint half of the trustees (the two department heads and one public member) during his or her first year and a clear majority (with the second public member) by the second year. One-third of the trustees, the department heads, report to and serve at the pleasure of the governor. In comparison, a new U.S. president would not have appointed a majority to most federal independent commissions until the third or fourth year of his or her first term. Finally, for similar federal independent commissions, approval by the U.S. Senate provides a check on presidential authority and also involves a confirmation process whereby appointee qualifications are publicly reviewed.[3]

The pending legislation being considered in Juneau might at least give the public some comfort in knowing people in charge of our wealth fund are scrutinized beyond one elected governor.

Gov. Dunleavy has now appointed four of the six APFB Trustees.

I have also learned that some believe Trustee Moran–a wealthy banker from Ketchikan–may have profited personally from being on the APFB. I requested all of APOC filings for Moran and have received only some of them.  At this writing I cannot reach any conclusions on such allegations, but we should expect members of this Board to have business and investment savvy. The mere fact someone becomes wealthier while serving on the APFB should be expected over 16 years.

The question I have is, how does one guy get to serve on a public board for that long? There are other examples of this, including the Alaska Railroad Board where former Gov. Bill Sheffield continues to serve as director emeritus after having been a member since April of 1995.[4]

Lessons Learned

During the time I lived in Juneau I had a similar thing happen to me as what has happened to Rodell. Management and the board of the union of General Government Unit state employees I was working for (ASEA/AFSCME Local 52) was engaged in practices they didn’t want to be held accountable for from members. Silly things like corrupt elections, you know, were shined on. I witnessed corrupt practices by the Business Manager.

Juneau was where ASEA was hatched and it remains to this day the center of gravity for that, the largest state union. Over time, my boss in Anchorage set me up and fired me, using my personnel file as part of his excuse to do that. In that file he had admonished me on several occasions for being too assertive as a Union Business Agent fighting for member expectations under the Collective Bargaining Agreement with the State of Alaska. I believed he was too close to State management under Gov. Tony Knowles.

Ultimately the BM who fired me was soon also fired. His best buddy, Jim Duncan, Commissioner of the Alaska Department of Administration responsible for negotiating 12 state employment labor agreements with state unions–soon become the new ASEA Business Manager!

That’s how it works in backwater Juneau.

I spent most of my retirement fund suing the union, and now wish I hadn’t. I never got my day in court because no Juneau judge would hear my case–since I was declared a “public person” and the judges all knew me personally. So, my case was assigned to a Sitka judge. The business manager who had fired me was born and raised as the son of a legislator from Sitka. That judge dismissed my case from 95 air miles away.

That’s how our Alaska Court System works.

But I still filed an Public Official Ethics Complaint with the Alaska Department of Law regarding the occurrence of a former commissioner of Administration jumping out of that job and into the job as Business Manager of the largest union he previously negotiated against as management’s representative of The People. Of course, the Department of Law also shined me on.[5]

That’s how our State of Alaska government works.

The lesson: Never set your expectations too high when dealing with Alaska government. Expect people elected to represent those who voted for them to self-serve . Water seeks its own level.

This should bring no comfort to anybody watching recent turmoil at APFC, but we’re awake now.

Christmas is on…

References:

[1] HB 412

“An Act relating to the confirmation of appointees to the Board of Trustees of the Alaska Permanent Fund Corporation; relating to the appointment of public members of the Alaska Industrial Development and Export Authority; and providing for an effective date.”

http://www.akleg.gov/PDF/32/Bills/HB0412B.PDF

[2] Angela Rodell Personnel File shows troubles, Must Read Alaska

[3]Is it time for a more independent permanent fund board of trustees, Ralph Townsend, ADN 01/20/22

https://www.adn.com/opinions/2022/01/20/is-it-time-for-a-more-independent-permanent-fund-board-of-trustees/

[4]Is This any way to run a Railroad?

[5]Ethics Complaint Against Jim Duncan