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State of Alaska’s Deep State — ‘Division of Work Around It’

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By ART CHANCE

I keep waiting for the day that there is someone in the Dunleavy Administration who is ideologically and personally loyal to the governor and the agenda he ran on, and who also actually knows something about how State government works.

It is that first part that is really tough for a Republican governor. This will be long and tedious, but readers need to know it, and Gov. Michael Dunleavy especially needs to know it, now that he has been persuaded by the bureaucracy to veto HB 48, which eliminated “temporary exempt” employees and so-called “exception pay.”

[Read: Governor vetoes HB 48, which would take away his hiring authority]

First, people who actually know something about how State government should run are pretty scarce. The government grew exponentially in the late 1970s and early ’80s.  A lot of people hired in those days got their jobs in the time-tested Alaska way: They conned their way into the job and tried to see how long they could keep it.

By the time I came to State government in 1987, it was pretty much a cult of personality.  There was a hard kernel of experienced or well-connected people who had developed experience and authority over time and who kept things running.  

Most were Salary Range 20-something, merit-system employees who were direct reports to directors or a level or two below directors. Most were in their late 30s or early 40s and had come to Alaska in the 1970s or early ’80s.  

I spent my early career with a Range 22 or 23 supervisor who was a direct report to a Range 26 director. Below that Range 20-something level the vast majority of employees knew their job by rote and few knew why their job was done; they just knew that somebody told them what to do and how to do it; that somebody was usually one of those Range 20-something classified employees. Directors and commissioners came and went, but the classified service stayed on with the change of administrations.

The only consistent exception to the coming and going of directors were the administrative services directors; they seemed to have eternal life.   

Everything in State government that involves money, people, and stuff rolls up to the administrative services director (ASD) of each department. They technically report to a deputy commissioner or commissioner, but it is the rarest commissioner or deputy who has the necessary subject matter expertise to effectively supervise an ASD.   

Most ASDs are subject matter experts, but even if they aren’t, all the people who are subject matter experts in personnel, finance, budget, and procurement report to them.  ASDs have all that expertise available to them plus historically they have been well enough known and connected to survive and be able to charmingly and convincingly lie to commissioners, to the Office of Management and Budget, to governors, and to the Legislature.

Historically, ASDs were Range 26 division directors, the same rank and range as other program division directors and all directors are subordinate to a commissioner or deputy commissioner.  

However, few program directors have real expertise in personnel, procurement, budget, and finance matters and all have to rely on the administrative services director and his/her direct reports for any anything that involves money, people, or stuff. Effectively the ASD has tremendous power over most other directors and truly has no supervision other than a commissioner’s general direction.

Most commissioners and their deputies have to be shown their office and told where the light switches and restrooms are.   Frankly, most commissioners are at the mercy of the ASD for the day-to-day operations of their department.

About the only thing that can remove an ASD from his/her lofty perch is getting truly cross-threaded with a commissioner, a governor, or with a powerful legislator, although they’re immune to legislators so long as the governor supports them, at least until there is a new governor.   

The way to get cross-threaded with your boss is to tell him/her “no.” Yet, it is the job of the ASD and his/her direct reports to tell people “no.”  

Those direct reports used to be called certifying officers, their title included the word officer, and statutorily they have real authority.  A finance officer has to certify under oath that there is money for an expenditure and that it comes from an appropriation that is intended to support that expenditure.

I’m going to use old titles here because they best describe the functions. In recent years they’ve changed a lot of job titles in part to follow fashion, in part to justify salary increases, and in part to obfuscate the actual duties of the position.  

It is the job of the ASD and his/her deputy, sometimes called an administrative services manager or an operations manager or something else that sounds cool, to make sure that everything a department does that involves money, people, and stuff is legal.   

A personnel officer, variously called human resources manager or some similar title, must certify under oath that a hire, promotion, pay rate, or other personnel action is legal.   

A procurement officer must certify under oath that a purchase has been made in accordance with applicable law.  

 All of these authorities come down by delegation from the commissioner of Administration through the directors of the ministerial divisions of Administration, such as Finance, Personnel, and General Services and Supply.  A departmental officer can stay the hand of any one in his/her department, including the commissioner. A director of a ministerial division in the Department of Administration can stay the hand of anyone in the government, including the governor. It has been a long time since anyone has, however. 

For those who remember the sad story of Gov. Frank Murkowski’s jet, it was three or four directors’ job to tell him there was no legal way to buy that jet other than getting the Legislature to appropriate the money.  Instead, they all “helped” him with a work-around.

In terms of the organizational culture of the State, the Administrative Services Divisions are the maw of the beast, the State of Alaska’s version of “deep state.”   

What was statutorily established as a ministerial function has become the “Work-around Division.”  Saying “no” to powerful people is an impediment to having eternal life as a division director or even an assistant or deputy commissioner, positions that some of the ASDs have arrogated themselves to.  

Assistant commissioner is a particularly attractive position that was created only because some long-ago director of personnel created it for somebody because it is a partially-exempt position that allows a career employee who has worked his/her way up to ASD to become an assistant commissioner at a higher salary range than director and slip the surly bonds of the statutory salary for an exempt deputy commissioner, though I think now they may have made deputies partially exempt too, so they can keep those beautiful, never ending longevity steps they got for themselves back in the Palin Administration.  

While we’re on that subject, let me assure you that anybody in a politically appointed position who has made it more than one or two steps into longevity pay has at best very flexible principles, if any at all.  I’ve known a few ASDs or former ASDs who made it all the way out to Step M, as high as you could go in the pre-Palin scheme as a division director.  That tells you all you need to know about them.

The State’s personnel administration system has long been the land of the work-around.  “Helping” a director or the commissioner to hire whomever s/he want to hire, whether or not qualified, was a surefire way to become and remain a personnel officer and it was the ASD’s job to make sure that happened.   

The same was true for finance officers; the job was to figure out a way to get around the rules and laws so a director or commissioner could spend money where and how s/he wanted.   

Likewise, procurement officers had to see that the “right” person or company got the contract, and not only could you get and keep the job, you might get some perks out of it — and if you were so inclined, maybe make a little money on the side.   

I learned early in my career that the difference between the lifestyle of a range 20-something in a ministerial agency like Labor Relations and the lifestyle of a range 20-something out in the departments was predicated on whether or not you had procurement authority.

Some of us had “had it” with the abuses of the personnel system, which reached its nadir during the Knowles Administration. I don’t know when or even if it has really been an honest system but I believe there was a greater effort to enforce the rules and laws in the Hammond Administration and before. There was some sketchy stuff in the Sheffield Administration.   

We had all sorts of problems exercising any Department of Administration or Office of the Governor authority over the departments in Cowper and Hickel.   The floodgates opened in Knowles when they delegated all personnel authority and most labor relations authority out to the departments and began “streamlining” and re-engineering” finance and procurement so anybody could spend any money they wanted wherever they wanted and on whatever they wanted. Personnel and Labor Relations became so corrupt that I quit and went to work for the Legislature in 1996 rather than be a part of it.   

The Knowles Administration was very successful at neutralizing or running off anybody who stood in their way, especially those troublesome classified range 20-somethings who had some clue how things were supposed to work.  Along the way, Knowles’ first director of Personnel discovered that some “temporary exempt” employees appointed under AS 39.25.110(9) weren’t really temporary and were entitled to the full benefit package that permanent employees received, such as leave, health insurance, and retirement, plus they remained exempt so their job could be anything somebody wanted it to be, their qualifications could be whatever somebody wanted, and they could be paid whatever somebody was willing to pay them.   

Before long everybody with a friend or lover in high places was a temporary exempt making $100,000 a year or more.  The “friend with benefits” position was created by an email from the then-director of personnel to the ASDs and the department Human Resources managers.  I saw the email one time back in the late 1990s; there is no record of the conferring of benefits on temporary exempts other than that email, unless they’ve come up with some policy on it since I retired, which wouldn’t obviate the fact that it is illegal.

The Knowles Administration also discovered something I’ve never found in the statutes or rules. It’s called “exception pay,” which enabled them to pay even those subject to a statutory or contractual salary more than they were legally entitled to. What made “exception pay” so convenient was that the person would show in the personnel system at a legal range and step, but they were being manually paid some other salary.  

That way, if some legislator or reporter inconveniently called and asked what director so-and-so’s pretty little friend that was just hired was being paid, the State could answer that she was a Range 20, Step A – A is the initial hire step if you do it legally.   If the legislator or reporter didn’t know to ask what she was actually being paid every pay period, they’d never know h/she was being paid half again more than a Salary Range 20A should be making.

Next: Where the State is today and what it means for the Dunleavy Administration.

Art Chance is a retired Director of Labor Relations for the State of Alaska, formerly of Juneau and now living in Anchorage. He is the author of the book, “Red on Blue, Establishing a Republican Governance,” available at Amazon. 

‘The fight’s on,’ as Dunleavy recall gets national attention

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Gov. Michael Dunleavy wrote an opinion piece that appeared on Fox News, he was interviewed on the Joe Pags talk radio show, the Lars Larsen show, featured in a long article in Breitbart, a conservative news website, last week.

It’s just the beginning of the counter-offensive operation. Dunleavy has clearly hit the national stage in his fight against being recalled by those who didn’t vote for him in the first place.

Alaskans might expect to see him on Fox and Friends in coming weeks and in a much more visible role in the national media.

He also has a StandTallWithMike.com website set up to begin the fight of his political life.

From Breitbart:

“The fight is on in the northernmost American state as its newly elected GOP Gov. Mike Dunleavy faces an effort pushed by leftist special interests to recall him after he delivered on his promises to reduce the size and scope of government and reignite the state’s economy.

“Dunleavy, an ally of President Donald Trump, faces an effort in his state to recall him because he has cut the state budget significantly and got the economy booming again—a very similar fight to the national impeachment battle that Trump faces.

“Dunleavy, just like Trump, is fighting through it. He has launched a website to rally voters to his side amid the recall push and appeared on Breitbart News Sunday on SiriusXM 125 the Patriot Channel this weekend to make his case for why he believes the leftist special interests are targeting both him and Trump.”

[Read the entire Breitbart story at this link]

Dunleavy is drawing the parallels between himself and Trump: Democrats, Socialists, and other resisters, rather than accepting the results of an election, are trying to overturn the election and disenfranchise voters through creating chaos with impeachment or recall. It’s a win-win for Leftists either way because it requires the target — whether it’s Trump or Dunleavy — to focus energy and play defense.

The recall effort is starting to influence the governor’s schedule, too. On Saturday night, he had to choose between attending the Alaska Outdoor Council, a group of “friendlies,” (where he has hero status for his support of the Sturgeon vs. Park Service lawsuit) and the HIPOW (Happiness is Paying Our Way) Catholic school fundraiser in Fairbanks, where he could use more political help.

Dunleavy went to HIPOW, and sent his senior policy adviser Brett Huber to stand in for him in Wasilla with the sportsmen.

WEBSITE STANDS UP

The Stand Tall With Mike group registered with the Alaska Public Offices Commission, although it doesn’t actually have to register at this point. Its treasurer is Bob Griffin, an education advocate who serves on the Alaska Board of Education and who is a senior fellow at the Alaska Policy Forum. No other big names have been announced.

The Stand Tall With Mike group is starting to raise money through the spartan website, with the goal of opposing the signature collection for the recall effort. From the looks of it, the effort is just getting going.

Under law, these recall and no-recall efforts now under way have no actual reporting requirements at this stage. They can raise and spend money as they wish until the recall petition is approved for the ballot, and that will be weeks or months away.

[Read: Wild, Wild West of recall campaign laws]

Attorney General Kevin Clarkson has until Nov. 4 — three more weeks. — to decide if the group wanting to recall the governor has a legitimate case.

Photo of Attorney General Kevin Clarkson and Governor Michael Dunleavy
Gov. Michael Dunleavy and Attorney General Kevin Clarkson

Regardless of Clarkson’s decision, the case will go to the Alaska Superior Court on appeal from one side or the other. That court will quickly kick the matter up to the State Supreme Court.

But Dunleavy and his supporters are evidently not waiting, and not counting on the Supreme Court to turn down the petition.

And the small-dollar donations that come in from the website are not going to be enough to step up a strong message. Dunleavy will need to secure national dollars — big money — to fight the big money being spent against him.

WHAT ABOUT THE COMM TEAM?

This fight against the recall will likely consume more of the governor’s time, and take away from his policy agenda. As he makes his case on the national stage, groups not attached to the Governor’s Office itself will begin to work on his behalf.

Mary Ann Pruitt

For this reason, it would make sense if Mary Ann Pruitt, Dunleavy’s “communication director on contract,” decides to step away from her contract with the Governor’s Office, and roll back into her primary business at PS Strategies, where she has a contract history with the Republican Governor’s Association.

The RGA has already come out with a statement of support for Dunleavy and will most likely be looking to PS Strategies once again to execute a campaign on in support of the governor in the event of the recall going to the ballot.

[Read: Republican governors take notice of recall]

Pruitt’s departure, however, would leave the governor without a strategic leader on his communication team. He may have to add this challenge to his growing “to do” list.

MRAK Almanac: Unity Gala Save the Date

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The Alaska Republican Party’s Unity Gala, planned for Dec. 6 at the Dena-ina Center in downtown Anchorage, may have a big-name national-level speaker, but organizers are not yet saying who.

Tickets are now on sale at this link. Must Read Alaska will be there, possibly in a gown and kitten heels. No word if “Unity” itself is going to attend, but Republicans are a hopeful bunch.

Dog attacked by otters at Taku Lake is injured, but OK

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A family of river otters seemed playful when observed Oct. 8 frolicking in Taku Lake, along C Street just north of Dimond Blvd, as seen in the video below.

But two days later, an Anchorage couple walking their dog were shocked when the otters attacked their dog as he fetched a tennis ball in the water.

The Alaska Department of Fish and Game posted a sign next to the lake the next day, warning of the incident so people will keep their dogs out of danger. The dog that was attacked needed medical care, but survived after her owner jumped in the water to save her and fend off the attacking otters.

Fish and Game spokesman Rick Green said it is unclear if it’s a family of otters, with adults protecting the young, or a gang of juvenile otters. River otters are smaller than sea otters, and are members of the weasel family. They generally feast on fish and small mammals. But there are instances of river otters ganging up on dogs.

[Read: Alaska Public Media’s story on the incident]

[Read: Angry otters attack, try to drown golden retriever]

Road to the White House: Fun facts as Dem-debate roadshow heads to Ohio

WHY WESTERVILLE FOR DEMOCRATS? STRATEGY

The fourth Democratic presidential debate is planned for Otterbein University in Westerville, Ohio on Tuesday, Oct. 15, beginning at 4 pm Alaska Time.

For most of America, the event takes place on CNN; it is moderated by CNN and the New York Times.

If you haven’t heard of Westerville, here are the Cliffs Notes: It was founded in the 1800s, but is now a suburb of Columbus, the somewhat liberal capital of the state. In 1859, the city of Westerville became “dry,” with the passage of a law prohibiting the sale of alcohol. The Anti-Saloon League, a major player in the Prohibition movement, moved its headquarters there.

Today, it’s a city of 40,000 that boasts of a city-owned smart grid comprised of an underground fiber network connected to a city-owned data center and delivering 100 Gbps connectivity to municipal service providers, businesses, schools, the local university and research institutes.   

Democrats chose this community because they see it as a rising progressive area in a state that is a “must win” for presidential candidates. Plus, it’s a demographic they need — well-off, progressive whites. The town is over 86 percent white, families are stable, crime is low, and 69 percent of the people who live in Westerville were born in Ohio. The town has 26 Christian churches, so homogeneousness is a major characteristic.

Those characteristics would typically mean it’s Republican territory, but perhaps the Democrats have some polling to tell them otherwise. Donald Trump won Ohio with by 8 percentage points in 2016, but has a net negative job approval rating now in Ohio, according to a new poll from Emerson College. Three of the top Democratic candidates beat him in a the poll’s head-to-head matchup, although just within the margin of error.

[Read the Emerson poll results for Ohio here]

THIS DAY IN 2015

While this Tuesday, Democrats are on their fourth debate, jump back to Oct. 13, 2015, when the Democrat field of candidates had its first debate for the coming presidential election cycle, starring the eventual nominee Hillary Rodham Clinton, along with Bernie Sanders, Martin O’Malley, Jim Webb and Lincoln Chafee.

The debate among the five, held in Las Vegas, was sponsored by CNN/Facebook and most analysts gave the win to Clinton. Westerville, Ohio could not be more different from Las Vegas.

WHO HAS QUALIFIED FOR TUESDAY’S DEBATE?

Candidates who met the Democratic National Committee’s threshold for the Tuesday debate include 10 who debated each other in September, plus the addition of billionaire Tom Steyer and Hawaii U.S. Rep. Tulsi Gabbard, who met fundraising and polling thresholds.

This means there will be the most ever candidates on stage for this debate series:

  • Former Vice President Joe Biden
  • U.S. Sen. Elizabeth Warren, of Massachusetts
  • U.S. Sen. Bernie Sanders, of Vermont
  • U.S. Sen. Kamala Harris, of California
  • South Bend, Indiana Mayor Pete Buttigieg
  • Businessman Andrew Yang
  • U.S. Sen. Cory Booker, of New Jersey
  • Former U.S. Rep. Beto O’Rourke, of Texas
  • U.S. Sen. Amy Klobuchar, of Minnesota
  • Former U.S. Secretary of Housing and Urban Development Julian Castro
  • Billionaire investor and activist Tom Steyer
  • Hawaii U.S. Rep. Tulsi Gabbard

AGE A FACTOR?

Pollster Nate Silver points out that the leading Democrats are old by presidential standards: Elizabeth Warren will be 71, Joe Biden 78, and Bernie Sanders 79 on Election Day, 2020.  Sanders would be 83 years old at the end of his first term. President Reagan was 77 when he finished his second term. (Donald Trump will be 74 years old next June).

WHERE LEADING CANDIDATES STAND ON THE ISSUES

IMPEACHMENT:

Support impeachment – Joe Biden, Cory Booker, Pete Buttigieg, Julian Castro, Kamala Harris, Amy Klobuchar, Beto O’Rourke, Bernie Sanders, Tom Steyer, Elizabeth Warren, Andrew Yang.

Does not support impeachment: Tulsi Gabbard.


MEDICARE FOR ALL:

Support Medicare for all – Cory Booker, Julian Castro, Tulsi Gabbard, Kamala Harris, Bernie Sanders, Elizabeth Warren, Andrew Yang. Pete Buttigieg supports Medicare “For All Who Want It.”

Support reform of the Affordable Care Act: Joe Biden, Amy Klobuchar.

Support universal health care: Tom Steyer, Beto O’Rourke.


GUN CONTROL:

Support federal gun licensing: Cory Booker, Pete Buttigieg, Julian Castro, Kamala Harris, Beto O’Rourke, Tom Steyer, Elizabeth Warren, Andrew Yang.

Support ‘assault weapons’ ban: All 12 – Biden, Booker, Buttigieg, Castro, Gabbard, Harris, Klobuchar, O’Rourke, Sanders, Steyer, Warren, Yang.

Supports gun seizure: Beto O’Rourke, who in the last debate said: “Hell yes we’re gonna take your AR-15, your AK-47.”

Support federal universal background checks: All 12 – Biden, Booker, Buttigieg, Castro, Gabbard, Harris, Klobuchar, O’Rourke, Sanders, Steyer, Warren, Yang.


GREEN NEW DEAL:

Support Green New Deal: 11 of the 12 – Biden, Booker, Buttigieg, Castro, Harris, Klobuchar, O’Rourke, Sanders, Steyer, Warren, Yang.

Does not support Green New Deal: Tulsi Gabbard.

OFFSHORE DRILLING:

Support ban on offshore drilling, fracking, and ending oil/gas leases on public land: All 12 – Biden, Booker, Buttigieg, Castro, Gabbard, Harris, Klobuchar, O’Rourke, Sanders, Steyer, Warren, Yang.


IMMIGRATION

Support making illegal border crossing into a civil, rather than criminal violation: Booker, Buttigieg, Castro, Harris, Sanders, Steyer, Warren, Yang.

Support raising the current cap on refugees: All 12 – Biden, Booker, Buttigieg, Castro, Gabbard, Harris, Klobuchar, O’Rourke, Sanders, Steyer, Warren, Yang.

Support expanding the DREAM Act, and making easier pathways to citizenship: All 12- Biden, Booker, Buttigieg, Castro, Gabbard, Harris, Klobuchar, O’Rourke, Sanders, Steyer, Warren, Yang.


TAXES

Support higher taxes on wealthy: Booker, Buttigieg, Castro, O’Rourke, Sanders, Steyer, Warren.

Not committed to higher taxes on wealthy: Biden, Gabbard, Harris, Klobuchar, Yang.

Time to ratify U.S.-Mexico- Canada agreement

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By GOV. MICHAEL DUNLEAVY

(This op-ed originally ran at FoxNews.com.)

As the governor of Alaska – a state with a flourishing international trade sector – I am pleased to stand with 27 of my fellow governors in calling on Congress to ratify the United States-Mexico-Canada Agreement negotiated by President Trump.

Alaskans export nearly $5 billion worth of commodities each year – enough goods to put the Last Frontier among our nation’s largest exporters on a per capita basis. After factoring in an additional $2 billion of imports, trade accounts for over 12.5 percent of Alaska’s gross domestic product.

Of this trade activity, Alaskan businesses deliver $707 million worth of products to our Canadian neighbors, making a continental free trade agreement critical to our state’s economy. But the raw dollar values only tell half the story.

Over 70 percent of Alaska’s goods exporters are small- to medium-sized companies, and 37,100 jobs depend on these exports. Many of these jobs are located at Ted Stevens Anchorage International Airport, which handles 87,000 landings and up to 6 million tons of snow each year.

Located within 9.5 hours of nearly all destinations in the industrialized world, Anchorage International is the fifth-busiest cargo hub in the world.

As a steward of this great state, I am committed to supporting Alaska’s trade sector.

This summer, the Alaska Department of Transportation announced hundreds of millions of dollars in infrastructure upgrades at Anchorage International Airport. My office is also in the early stages of negotiating a rail link with Alberta that would allow for the safe transportation of crude oil from landlocked Canadian oil fields to Alaskan refining centers.

But the harsh reality is that state governments are limited in their ability to promote international trade. Congress must act to ratify a new trade deal. To that end, President Trump successfully renegotiated the aging North American Free Trade Agreement (NAFTA) nearly a year ago.

While NAFTA served Alaska well for a number of years, there is no doubt the 25-year-old agreement is past its prime. It is increasingly hurting Alaskan businesses with lax enforcement of illegal, unreported and unregulated fishing; failure to police fishing subsidies; and outdated intellectual property and digital trade rules.

Trump’s USMCA makes historic improvements in these areas. Since the 1990s, the United States has worked to eliminate fishing subsidies, which often cause dangerous overfishing problems. Unfortunately, much of the world has not followed suit.

These subsidies allow foreign canneries to operate at a loss and market their products at discounted prices, giving them a market edge over U.S. fishermen and processors. While the largest offender is plainly China, the USMCA would ensure that our continental neighbors are not destroying our shared oceans or the economies of our Alaskan fishing communities.

The updated agreement also strengthens customs inspections, making it more difficult for bad actors to engage in unregulated fishing. Additionally, new rules on pollution from ships would help protect our fisheries by holding our trade allies to the same high standards we apply to ourselves.

Combined, these benchmarks would help guarantee the future viability of North America’s commercial and sport fishing industries. And while fish may be Alaska’s largest export, many innovators would also benefit from the USMCA’s new intellectual property protections.

The unique challenges presented by Alaska’s sheer size and rugged environment have long driven technological progress. Examples of Alaskan’s pioneering spirit include GPS-based landings that were developed in the fjords of southeast Alaska; the 800-mile Trans-Alaska Pipeline, which features an assortment of groundbreaking safety features; and countless oil exploration breakthroughs.

The USMCA would protect advancements like these by requiring our continental trade partners to adopt our intellectual property laws. New measures include 15 years of protection for industrial designs, automatic patent extensions to mitigate bureaucratic delays, and further remedies when state-owned companies steal trade secrets.

Each of these protections requires no new legislation in the United States and would even the playing field across North America. Unfortunately, these commonsense measures are being blocked by House Speaker Nancy Pelosi, D-Calif., who refuses to bring the USMCA to the House floor.

Despite Mexico’s ratification of the deal in June, Democrats remain content to harm businesses in Alaska and other states by using the trade deal as a political pawn – a sharp contrast from when Republicans voted to give President Obama wide berth in negotiating the failed Trans-Pacific Partnership.

The good news is that Democrats may be ready to reverse their policy of economic obstruction, with Pelosi reporting that she is “on a path to yes.” After a nearly yearlong delay, let’s hope her path is a brief one.

It’s past time for Congress to set aside political games and deliver American workers the economic victory they deserve.

The billion-dollar, high-speed internet scam

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ELIZABETH PIERCE STARTED SERVING HER FIVE-YEAR SENTENCE LAST WEEK. A LOOK-BACK AT HOW SHE GOT THERE

By BLOOMBERG BUSINESSWEEK

When he discovered that the ship’s underwater plow was stuck at the bottom of the Arctic Ocean, 50 miles off Alaska’s coast, Frank Cuccio thought of Ernest Shackleton. In October 1915, the British explorer was forced to make a desperate escape from the Antarctic after pack ice and floes crushed his ship, the Endurance.

The vessel Cuccio was aboard, the Ile de Batz, had been laying fiber-optic cable along the inhospitable route known as the Northwest Passage. But the Ile de Batz’s 55-ton excavator, which had been cutting a trench for the cable, had dug too deep in the hard-clay seabed. If they didn’t unclench it fast, the ocean surrounding them would soon freeze. “I realized we don’t have time to fool around, or we’re going to get trapped in a Shackleton situation,” Cuccio recalls. “The weather was getting uglier, and other ships had been gone for weeks.”

Cuccio worked for Quintillion Subsea Holdings LLC, a telecommunications startup in Anchorage that was trying to build a trans-Arctic data cable it said would improve web speeds for much of the planet. This idea captivated the public, but by the time the Ile de Batz’s plow got stuck, in September 2017, the company was struggling. Co-founder Elizabeth Pierce had resigned as chief executive officer a couple months earlier amid allegations of fraud.

[Read: Ambition above the law: Quintillion CEO sentenced]

Pierce had raised more than $270 million from investors, who had been impressed by her ability to rack up major telecom-services contracts. The problem was that the other people whose names were on those deals didn’t remember agreeing to pay so much—or, in some cases, agreeing to anything at all. An internal investigation and subsequent federal court case would eventually reveal forged signatures on contracts worth more than $1 billion.

[Read this long-form story at Bloomberg Businessweek]

Alaska Democrats endorse another non-Democrat

THIS TIME, A NON-DEMOCRAT FOR U.S. SENATE

The Alaska Democratic Party has done it again: This time, the party has endorsed a nonpartisan, rather than a Democrat, as its candidate for U.S. Senate.

Al Gross received the State Central Committee’s endorsement on Thursday. It was announced Friday without details about how the endorsement was arrived at, who participated, or where the State Central Committee had its vote.

In the past, the party has endorsed no-party candidate Bill Walker for governor in 2014, and no-party candidate Alyse Galvin for U.S. House in 2018.

Gross is running against Sen. Dan Sullivan, and with the Democrats’ solid endorsement, that will likely clear the field for him of any serious primary challenges. He says he has raised over $1 million this quarter, which will give him a leg up on any other Democrat contenders.

“Dr. Gross’s support from the party stems from his strong knowledge of and advocacy for accessible and affordable health care for all Alaskans, robust public education, responsible resource development of both our renewable and non-renewable resources, strong public safety, and the economic well-being and welfare of both rural and urban Alaska,” the party said in a statement.

No mention was made of why Gross refuses to simply register as a Democrat, rather than run as a quasi-Democrat.

In 2016, Alaska Democrats changed party rules to allow nonaffiliated and undeclared candidates to run in their primary and then proceed to the General Election, where they appear under the Democrats’ label, with a qualifier by their name to indicate they are confused.

Casey Steinau, Alaska Democratic Party chairwoman, called Sullivan a “yes-man for Donald Trump” in the announcement about the party’s support for Gross, who in his thank you to the Alaska Democratic Party said he will work hard to “flip the Senate” and get rid of Senate Majority Leader Mitch McConnell.

Governor vetoes HB 48, which would take away his hiring/pay authority

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Alaska Gov. Michael Dunleavy has vetoed House Bill 48, legislation to reclassify state employees in temporary or special positions and take away authority given to commissioners and the governor to authorize higher pay for certain positions.

“Reaching this decision was difficult. I agree with the original intent of the bill that Representative [Tammie] Wilson brought forward. We both identified it as a change that needed to occur in our Personnel Act; I introduced the same provision in a bill I brought forward this past session.

“What we struggled with, as we had departments look at the bill after passage, was the repeal of the valuable tool that the Executive branch may utilize in unique cases. There are certain positions in departments that require a significant amount of experience and professional qualifications, such as petroleum land managers and commercial analysts in the Department of Natural Resources, the Chief Financial Officer for Retirement and Benefits and the ChiefTechnology Officer in the Department of Administration, and the Tax Division Director in the Department of Revenue.

“On one hand, the bill fixed a significant problem. On the other hand, it eliminated a tool that is used to address the State’s ability to recruit and retain employees of the highest level of qualifications and experience. As I am not able to partially veto a bill, I have committed to working with Rep. Wilson in the future to address the use or creation of temporary or special positions.”

“HB 48 as introduced by Rep. Wilson proposed to reclassify people employed in a temporary or special position, from the exempt service to the partially exempt service. This move would require the use of statutory salary schedule, enrollment in PERS and other healthcare benefits and entitle the individual to accrue leave. 

“HB 48 was amended through the committee process and a provision was added that repealed an important tool that allowed Commissioners and the Governor to authorize a higher level of pay for certain positions where the employee must possess exceptional qualifications and professional experience, and the department can verify that recruitment difficulties exist for a certain position and that an action is warranted due to competitive salaries in the labor market. “