Gov. Bill Walker once again appears to be doing the bidding of the publisher of the Alaska Dispatch News.
In a letter to the U.S. Army Corps of Engineers, Walker has asked that Port Clarence once again be included in plans for an Arctic port. Alice Rogoff, who owns Alaska’s largest newspaper, has long had a desire to see a deep water port built there. She has financial interests through her advisory capacity at PT Capital, an Arctic investment entity, and her husband’s firm, The Carlyle Group, which has developed an Arctic investment strategy.
PT Capital’s cofounder is Hugh Short, who also sits on the board of the Alaska Gasline Development Corporation, which is tasked with building a gasline to tidewater.
During the last legislative session, the capital budget included $1.6 million for the Nome Deep Draft Arctic Port design at the behest of the conservative majority. The money was appropriated to the City of Nome as a grant, allowing Nome to take over as the 50/50 cost sharing partner on the project.
Sen. Anna MacKinnon and the Senate moved the project forward by adding the needed $1.6 million to a very slim capital budget to help the project stay on track.
Once design work is complete, the project will go to Congress for construction funding.
The project goes back many years: In 2011, the U.S. Army Corps of Engineers began studying a port deep enough for large ships that would eventually traverse ice-free Arctic waters.
The option finally chosen by the Corps will expand the Port of Nome, dredging the harbor to a depth of 28 feet. Port Clarence lost out in that decision.
The Department of Transportation had previously been the cost sharing partner but Gov. Bill Walker neglected to include the cost share money in his DOT budget.
Enter Alice Rogoff. She has been a proponent of the Port Clarence project both publicly and privately. And her relationship with the governor is probably closer than any publisher in America has with a sitting governor.
She’s been part of Walker’s financial restructuring advisory team — a group of highly accomplished Alaskans who have met with the governor at his invitation to help him navigate the financial crisis. Many Alaskans believe she also worked hard to get him elected.
Why is Port Clarence not in contention for the project any longer? Because after a year of study and evaluation, the U.S. Army Corps of Engineers selected Nome as more economical and more likely to be an ice-free port first.
While Nome has a protective jetty that shelters a large outer harbor, and boasts a fully functional airport, housing, roads, electricity, Port Clarence has none of these things. In fact, Port Clarence would require a 70-mile road to complete the project.
In his Oct. 20 letter to the U.S. Department of Defense, Walker has asked the federal government to not only re-insert Port Clarence, but to call it the Nome/Port Clarence project.
Funding for two Arctic ports in Alaska is unlikely, but delaying the entire project to open up a two-port alternative could be the result of Walker’s actions.
Why does the governor insist on returning to the Port Clarence discussion?
There are myriad business interests afoot in the Arctic, and Rogoff has ties to many of the known players.
In a 2014 news story in the Dispatch, Sen. Lesil McGuire said she had met with Guggenheim Partners, Carlyle Group, and Citibank Energy. “There’s nearly $100 billion in development planned, but it may not come to Alaska,” she said. Carlyle Group is run by the husband of Rogoff, David Rubenstein.
In Foreign Policy Association blog in 2011, the Carlyle-Guggenheim-Rogoff relationship came to light:
Countries, non-profit organizations, indigenous peoples, and natural resource companies are all interested in obtaining a part of the Arctic. Now, we can add a hedge fund to the list. Guggenheim Partners, the financial services company which manages over $125 billion in assets, has confirmed that it is looking into establishing an investment fund in the Arctic, perhaps with a focus on Alaska. Alice Rogoff, publisher of the online newspaper Alaska Dispatch and wife of the co-founder of the Carlyle Group, David Rubenstein, first announced the news at the World Affairs Council’s “Politics of Global Climate Change” conference at University of Alaska Southeast in Juneau earlier last week. Rogoff also suggested that one investment possibility for Guggenheim would be to privately fund the construction of an icebreaker, which it could then lease out to the U.S. Coast Guard. However, Lawson Brigham, a professor and retired Coast Guard captain, observed that this would likely not be practical, given that the Coast Guard would need full and unrestricted access to a federally-funded ship during war, should it ever break out in the Arctic.
Rogoff added, “The single biggest source of investment dollars in Guggenheim’s or probably anybody’s fund will be China.” This would be an indirect way for China to invest in and potentially profit from the Arctic even though it does not have any territory there. This would not be the first instance of private Chinese investment in the Arctic: Businessman Huang Nubo is planning to buy a swath of land equal to one percent of Iceland to turn into an ecoresort.
Guggenheim spokesman Jeffrey Kelley remarked, “We are in the very early planning stages for an Arctic investment fund. At this point in time it would be premature to comment further about potential structure or investment parameters.” Guggenheim reportedly posted a link to the article in Alaska Dispatch about the fund, but they seem to have removed it from their website, as I am unable to locate it.
With Chinese money in the mix, and in the interests of transparency, Gov. Walker should come clean and tell Alaskans why he is trying to change the Arctic Deep Water Port project, who will benefit from the inevitable delay of the Nome deep water port, and why he’d take such a risk with a project that is already so difficult to fund.