The House and Senate passed the final version of the State’s operating budget for the fiscal year starting July 1. Now, adjournment is just some formalities away.
With $3.1 billion in unrestricted general funds added to a previously passed $1.28 billion education budget, the total is $4.39 billion, plus $1 billion for Permanent Fund dividends of $1,600 each to qualifying Alaskans.
The minorities of each body voted against the budget, (Republicans in the House voted no, and two Democrats and two Republicans in the Senate did the same. Sen. Begich and Wielechowski, both Ds, voted for the budget, with Republicans Shelley Hughes and Mike Shower voting against it.)
This year’s operating budget inched higher than last year’s by $170 million, but is still $1 billion less than 2015.
The budget increases come in large part from the Department of Health and Social Services due to the Walker administration actively recruiting applicants for the traditional part of Medicaid (not the expansion), where the state must pay 50 percent of the cost.
The budget draws $600 million from the Constitutional Budget Reserve and covers some of the gap with a structured, sustainable drawdown of $2.7 billion from the earnings portion of the Permanent Fund, based on an endowment model approach called POMV — percent of market value. The Legislature earlier had passed the structure necessary to limit the amount of money lawmakers can spend from the Permanent Fund’s earnings.
None of this came with the multiple taxes that have been sought by Gov. Bill Walker and the House Democrats since 2015. The budget is also smaller than that requested by the governor; he asked for $4.7 billion.
And legislators set a Permanent Fund dividend that is more than 30 percent larger than what Gov. Walker proposed in December; he wanted dividends set at $1,216.
“The Legislature prioritized the state’s constitutional obligations in this budget,” said Sen. Anna MacKinnon, co-chair of the Senate Finance Committee. “There’s still much work to be done. The Legislature must continue to pursue legislative reforms to reduce the size of government and fix the structures and programs that aren’t providing the maximum return for Alaskans.”
“A lot of thought and hard work went into this budget,” said Senate President Pete Kelly (R-Fairbanks). “I am grateful for the work of my colleagues as well as the patience of Alaskans throughout this process.”
The operating budget passed the Senate by a vote of 15 to 4 and the House 21 to 19 for a combined vote of 36 to 23.
The unrestricted general funds for agency and statewide operations — those funds that the Legislature has control over — is the $4.39 billion amount. Add in designated funds and federal funds, along with the Permanent Fund dividend payments, and the budget swells to $10.3 billion, or about $14,000 per Alaskan.
Quintillion, a relatively new company in the wild-wild world of fiber-optic telecommunication business in Alaska, was in the news this week.
Like telecommunications itself, it was complicated. The news involved lots of money, the FCC, Congress, the Russians, and Robert Mueller.
A congressman from Illinois sent a letter to the chairman of the Federal Communications Commission, asking questions about the appointment to a federal advisory body of the former Alaska CEO of Quintillion, who is now under Department of Justice investigation. Elizabeth Ann Pierce served on the FCC’s Broadband Deployment Advisory Committee.
Pierce abruptly resigned months later after being charged by the Justice Department for fraud involving how she persuaded investors to plow large amounts of money into Quintillion.
In her role as CEO of Quintillion Networks LLC, Pierce was building an undersea fiber optic telecommunication network under the Arctic Ocean, which was eventually to link Asia and Europe, across the top of North America. She acquired investors, some of them Alaska Native Corporations.
In April of 2017, FCC Chairman Ajit Pai appointed Pierce be the chair of the committee that advises the FCC on the deployment of high-speed internet access.
A year later, on April 12, 2018, Pierce was arrested for wire fraud. According to the Justice Department, between May and July of 2017, Pierce “engaged in a scheme to induce two investment companies to invest more than $250 million in the Fiber Optic System by providing them with forged broadband capacity sales contracts.”
A customer of Quintillion’s began questioning invoices and contracts they thought were forged by Pierce in April 2017.
According to the Justice Department’s complaint, on July of 2017, Pierce deleted the forged contracts from her Google account. Soon, she resigned from Quintillion, and the following month, resigned from the FCC committee.
Now, partisan politics has entered the fray. Rep. Keith Ellison, a Democrat from Illinois with ties to Louis Farrakhan, asked the FCC to explain the timing of the events more clearly.
“But if the allegations are true, it appears that Ms. Pierce may have been engaging in fraudulent behavior related to her own telecommunications company at the same time she was chosen by you to lead— and was leading — an important FCC committee. This is deeply troubling, raising questions about the process by which members of the committee were chosen, its deliberations, and its recommendations to the FCC commissioners,” Ellison said.
A key question he is asking is who recommended her to the committee because that would involve political connections.
Meanwhile, the investigation into Donald Trump’s Russia connections has also put its glove on Quintillion’s universe.
Quintillion investor Leonard Blavatnik, who holds dual U.S. and British passports, but who is originally Ukranian, donated funds to the inaugural committee last year. Special Counsel Robert Mueller is especially interested in any donors with ties to Russia, Saudi Arabia, the United Arab Emirates, and Qatar.
Leonard Blavatnik
Blavatnik was raised in Moscow, and emigrated to the U.S. in 1978. He made his wealth selling his stake in a Russian oil company for $7 billion. He owns Warner Music and Access Industries, and also is behind Cooper Investments, a private equity fund in New York, which owns Quintillion through a series of intermediate trust funds and Delaware holding companies.
Len Blavatnik was one of the wealthiest donors to President Obama and also contributed to Mitt Romney. He has given tens of millions to Harvard, Yale and Oxford universities.
Between 2015-2016, he donated $7.35 million to six Republican political candidates, including South Carolina Senator Lindsey Graham, Florida Senator Marco Rubio and Arizona Senator John McCain, according to Wikipedia. He also gave over $1 million to an anti-Donald Trump GOP group, but another $1 million to the committee for the inauguration of Donald Trump.
He and his wife donated to the Democratic Party in equal measure, and candidates Kamala Harris, Chuck Schumer and Hillary Clinton. His money, it appears, always flows toward perceived power.
Mark Begich was in Juneau last week and met with the governor and lieutenant governor, although there was a great deal of question as to whether the meeting would take place.
Must Read Alaska has learned it was not pleasant and at one point Lt. Gov. Byron Mallot had a bit of a temper. The report back to us is that Begich told Gov. Bill Walker that he (Begich) would not run for governor, but he had some advice for the pair on how to win the statewide election.
That was the part that set off Mallott, who was indignant. After all, he reportedly said, the Walker-Mallott team had won the last statewide election and Begich had lost his election to Sen. Dan Sullivan, who had never even run for office before. The meeting was uncomfortable after that outburst.
Two days later, Walker and Mallott filed to run on the Democrats’ primary ballot. A defensive move or business as usual? No one can say.
Is that the end of the story? That’s the part that MRAK can verify. But there’s more to come in the coming weeks as the June 1 filing deadline nears.
The Daily Kos (left-leaning political blog) says, “Former Sen. Mark Begich has spent months flirting with a bid, and he reaffirmed over the weekend that he’s still considering.”
Begich told National Journal’s Zach Cohen, that he “has not made a decision” and “the only things impacting his decision-making process are his family and the future of Alaska.”
The Daily Kos wrote: Begich almost certainly knows that he’d face very tough odds in the general election if he had to face both a Republican and Walker, and maybe he’s hoping that if he defeated the governor in a primary, Walker would drop out rather than invite mutually-assured destruction.”
Begich on Friday was the keynote speaker at the IBEW convention in Anchorage, where he tested the waters with a group that would comprise his base: Labor
“Good paying jobs build the economy and support working families. The labor movement is alive and well in Alaska!” he said.
Begich would be a formidable opponent for Walker in the Democrats’ primary.
Grier Hopkins, right
REP. GUTTENBERG OUT / HOPKINS FILES
Grier Hopkins has filed for the seat now occupied by his uncle, Rep. David Guttenberg,who is getting long in the tooth and not running again to represent Fairbanks, District 4.
A Democrat, Hopkins is the son of former North Star Borough Mayor Luke Hopkins, and works for the National Education Association in Alaska. He is related by marriage to Gov. Bill Walker’s Chief of Staff Scott Kendall. He was a legislative aide in the past. Selena Hopkins-Kendall, married to Scott, is one of his treasurers; the other is Elyse Guttenberg.
This is a legacy political family in Fairbanks.
The Republican in the race is Jim Sackett. Sackett, a Republican, graduated from the University of Alaska Fairbanks in 1991 with a business management degree. He earned a master’s degree in business administration in 2000.
RUFFNER OUT OF SEATON RACE
Robert Ruffner has pulled out of the race for Rep. Paul Seaton’s Lower Kenai, District 31 seat.
This means either Seaton has changed his mind and is running, or Ruffner just isn’t ready to take on Sarah Vance and John Cox in the primary.
Seaton lost favor from the Republican Party after he flipped the House to Democrats’ control after the 2016 election. He has been told by the party he cannot run on its primary ballot, although the Division of Elections says it will force the party to accept him.
Ruffner is on the Board of Fisheries. He is a new Republican testing the waters, and may have found support tepid.
House Finance Committee, led by Rep. Paul Seaton, is looking to stuff some $87 million more in the Capital budget today — these are items that are not related to capital projects:
AHFC: $2 million for weatherization
DEED: $20 million more than base student allocation
DEEC: $6 million for pre-K, preschool
DEED: $403,400 for three education specialists
HSS: $48 million for Medicaid, supplemental
HSS: $18 million for clean up of a drafting error
University of Alaska: $7 million for deferred maintenance
DCCED: $20 million for Port of Anchorage and $1.6 million for Port of Nome
DCCED: $200,000 for Goldstream Valley Restoration project
DCCED: $15,000 for Fairbanks volunteers for policing
DCCED: language change on cruise ship berth expansion
The Democrat majority says it will accept these reductions from minority Republicans:
DCCED: -$250,000, a reduction taking away the increase added for the Healthcare Transformation Project.
(This information comes from a confidential document slipped to Must Read Alaska from the House Majority.)
The Anchorage mayoral race might not have been decided by media coverage, but the media certainly played a role. It took a keen interest in reporting on certain issues in the past of mayoral candidate Rebecca Logan, but were oddly silent about issues relevant to incumbent Ethan Berkowitz.
On Feb. 20, KTVA led with a story about mayoral candidate Rebecca Logan. She had been arrested for driving under the influence in 2010. She had been part of a messy divorce in 2006 and had owed a few thousand dollars, which took her a long time to pay off after her divorce. A collection agency was involved.
The report was an airing of a candidate’s dirty laundry, and it occurred right about the time when voters were paying attention in advance of receiving their ballots on March 15.
The Anchorage Daily News then followed with its own coverage. But no reporter seemed interested in the personal difficulties of the incumbent mayor, and his family’s deadly past.
They could have written a book.
Mayor Ethan Berkowitz’s wife, Mara Kimmel, had been the driver of a Volvo station wagon on March 1, 2007, when her vehicle struck a man in a cross walk at the corner of Arctic Blvd. and International Airport Road. The man died.
The mayor comes into the picture in that incident because at the time he had just finished several years service as a well-known legislator, and at least one witness said that Kimmel received special treatment from Anchorage Police investigators due to her connection to powerful politicians. And he was preparing for another campaign — for Congress.
Police told the media at the time, “the driver of the Volvo was likely blinded by the sun as she was turning at the green light.”
One of hundreds of pages of court filings in the case of Thompson family vs. Mara Kimmel.
Thompson, on the other hand, was powerless. He was dead, although the police still ended up issuing a citation for him because he improperly crossed the street. It was mid-morning, bitter cold, and he may have been staggering.
His family, in their wrongful death lawsuit, said they could not even get Kimmel’s name from police until March 21. The case, the family alleged, “is already compromised in favor of Mara Kimmel. It is ironic that the police are advocating against the victim’s request for expressed purpose of protecting the victim’s investigation.”
Meanwhile, Kimmel was asking to have all information related to the case quashed. Her attorneys practically called the Thompson family gold-diggers for wanting access to her insurance records and telephone records.
THE ACCIDENT
When Kimmel, who is a lawyer and who has a Ph.D., approached the intersection to turn, she seemed to be in a hurry to beat the light, said one of the witnesses, who was less than three feet away from the accident. The victim, George Thompson, ended up on Kimmel’s windshield.
Witness John Fox, a North Slope worker, jumped out of his car to render aid to Thompson, while Kimmel went over to the side of the road and started making phone calls on her cell phone. She never approached the dying man to render assistance, witnesses said.
Shortly thereafter, Fox would be told by the first officer on the scene to go over to a parking lot and wait, which Fox presumed meant that police would want a statement from him, since he saw everything from close up. Instead, police at that location shooed him off.
Media coverage was slight, mentioning the victim’s name, but not the driver:
It wasn’t until the family of the deceased man brought the wrongful death lawsuit against Kimmel that a private investigator contacted Fox and interviewed him. And only after that did Fox get a call from the police, and they interviewed him as well.
POWER COUPLE
Berkowitz was the Democratic Minority Leader in the Alaska House from 1999 to 2007. He had just unsuccessfully run for lieutenant governor at the time, and Mark Begich, his political ally, was mayor of Anchorage.
A year after the lawsuit was initiated by the Thompson family, Berkowitz was on another campaign and the local media was nowhere to be found. The wrongful death case was still in court, Kimmel was trying to protect her phone records, trying to deny culpability, and trying to protect the family’s assets.
After all, Ethan and Mara had interests in several small businesses, including Snow City Café and a real estate venture. Mara taught political science at the University of Alaska Anchorage and was a senior fellow at Institute of the North.
The dueling filings show the pattern of plaintiffs trying to gain information, and defendants trying to protect it. The Thompson family wanted those cell phone records to determine if defendant Kimmel had been on the phone at the time of the collision, and who she may have talked to after the accident. The family’s investigator would want to depose whoever spoke to her on the phone and see if she had admitted guilt to them.
These are the types of things that can create hundreds of pages of documents in the court system, and indeed, they did in this case. Must Read Alaska looked through them and discovered that there was certainly enough to add to any political story of the era that involved Berkowitz’s aspirations for higher office.
Witness John Fox said at the time, and still believes that Kimmel got off because she was connected to a powerful politician. Fox believes he is one of the best witnesses because the accident occurred right next to his vehicle in the intersection and he saw it all unfold. To this day he feels there was a cover-up.
Critics might say that the death caused by Kimmel in 2007 and the lawsuit against her that lasted into 2008 is not relevant to a campaign in 2018. But then, the same could be said of Rebecca Logan’s 2006 divorce and 2010 DUI.
Yet, the mainstream media appeared to consider it irrelevant in 2008, when Berkowitz ran against Rep. Don Young. The Kimmel lawsuit was still in the courts. There was no mention of the tragic occurrence, which could have had serious consequences for Kimmel — even jail, if the investigation had broken a different way.
Meanwhile, Mayor Begich, in charge of the Anchorage police, was running against Sen. Ted Stevens in 2008. Both Begich and Berkowitz are ambitious Democrats, and both had a lot to lose if this wrongful death and its handling in favor of Kimmel came to light. It never did.
Kimmel’s wrongful death history also wasn’t relevant to the media when Berkowitz ran for governor in 2010, nor when he ran for Anchorage mayor in 2015, and won against Amy Demboski, who the media had hounded mercilessly over a statement she had never made about Berkowitz’s sexual proclivities.
And in 2018, the media went after Logan, but once again was silent on Anchorage’s First Lady, Mara Kimmel.
And although Kimmel is not the candidate running for office, she has a distinct political role in the city, advises the mayor on matters involving immigration, and has even been given her own page on the municipality’s official web site, where she attaches a video of herself titled, ironically, “Creating Our Collective Impact.”
A section in the controversial Senate Bill 91 that had that low- to moderate-risk defendants released without bail has been reversed in a new bill, HB 312.
On Thursday, the Alaska Senate voted to give judges their authority back so they may order bail when they think there’s a risk of repeat offending, or if they think the defendant will skip court. This puts the brakes on what has become known as the “catch-and-release” clause of SB 91, one of the problematic aspects of the bill signed by Gov. Bill Walker in 2016.
Alaska has seen crime — especially property crime — grow at an alarming rate in the past two years, and some attribute the crime wave to SB 91. But only since January have people charged with misdemeanors been nearly automatically released without bail.
Anchorage Republican Sen. Mia Costello wants to make sure judges can use their judgment again.
Remove mandatory release requirements; judges have discretion;
Make it a crime to attack medical professionals who are trying to help people;
Grant judges more flexibility to hold offenders in jail while they await trial;
Empower the attorney general to use emergency orders to ban dangerous new drugs;
Ensure judges can take into account out-of-state criminal charges when making pre-trial release decisions.
“I heard from many Alaskans who said they are frustrated when the criminal who victimized them is caught, only to be immediately released, and then there are additional victims,” Costello said.
(Update: The above video is my acceptance of his apology.)
This is what happens when you poke the liberal dragon. Assembly District 1 is represented by Christopher Constant, who cleverly wrote on his Facebook page his latest opinion of a fellow resident and voter in Anchorage, someone who probably should not look to him for assistance with legislation in the future.
Constant ran from a platform of ending homelessness and his term ends in 2020. To review the donors to his campaign, which include many Democratic women and Mark Begich, click here.
Readers may not initially see what he has written, but to be clear, he is not calling the woman in question a “calumnious unfit noisome turd.”
Nope. It’s a much stronger and more misogynistic term formed by the acronym, hidden in plain sight:
Evidently, that was a second version of his efforts. He spent some time thinking this up. The first version, where he advises readers to “Read between the lines,” shows creativity at play:
Such a clever boy.
By day, Constant is director of grants, contracts and marketing at Akeela Inc., an agency funded by the State of Alaska and dedicated to helping people recover from addiction. Interested readers may sent a note (respectful only, please, no references to female anatomy) to Akeela CEO, Courtney Donavan, here.
CUTTING THE LEGS OUT FROM UNDER CRAFT TASTING ROOMS
BY ANDREW JENSEN ALASKA JOURNAL OF COMMERCE
Chronicling political hypocrisy is typically no more difficult than shooting the idiomatic fish in a barrel.
And sometimes the fish jump in front of the bullets.
Such is the case with the 11th-hour hijacking of a bill to update Alaska’s alcoholic beverage regulations known as Title 4.
In the works for six years to develop points of consensus among stakeholders, Senate Bill 76 was sent to the House in a unanimous vote on April 30.
Less than a week later, a former bar owner, Rep. Louise Stutes of Kodiak, and a current bar owner, Rep. Adam Wool of Fairbanks, were aided in passing an amendment aimed at cutting a leg out from under popular craft tasting rooms by the reliably anti-business Rep. Andy Josephson of Anchorage and the reliably unremarkable Rep. Gary Knopp of Kenai.
Rep. Adam Wool
A parade of bar owners testified on May 2 to the House Labor and Finance Committee with their complaints about the success of craft beer and spirit tasting rooms.
Despite having very limited hours to serve no more than 36 ounces of beer or 3 ounces of spirits to a single customer, and prohibited from offering any entertainment such as televisions, live music or even a pool table, these craft tasting rooms have apparently unlocked the secret to success: offering a product people want in an atmosphere they enjoy.
To hear the bar owners tell it, though, these crafty craft room owners are simply succeeding because they have the unfair advantage of not paying upward of $250,000 for a beverage dispensary license.
These sneaky entrepreneurs have apparently discovered a loophole in the system whereby they can pay $3,000 for a brewery license to sell those three beers per day per customer after investing a half-million dollars or more in tanks, equipment, ingredients, payroll, construction and transportation costs.
Were it not for the real world implications of such a transparent effort to pinch the profitability of another part of the industry he inhabits, Wool’s naked self-dealing would be laugh-out-loud comedy.
Local governments build their budgets around adopted lists of priorities and community concerns. While most of us agree that education and to a lesser degree, recreation, parks, and arts are important, ensuring public safety is the No. 1 priority in most Alaskans’ minds.
First responders — police, EMTs, and firefighters — should be considered before other less important “wants” are fully funded.
Win Gruening
This is playing out now in a very visible way in our state as rising crime rates, increasing homelessness, and rampant opioid abuse are overwhelming public safety providers.
In Juneau, Mayor Ken Koelsch recognized the urgency of the problem and appointed a public safety task force, choosing Deputy Mayor Jerry Nankervis (a former police captain) to chair it. Their task was to examine the issue and make recommendations to the full Assembly. The final report was recently presented to the Assembly by Nankervis and is available online at juneau.org.
The task force recommendations ranged from staffing changes to drug treatment and diversion programs to possible legislative actions.
VACANCIES EXCEED 20 PERCENT
One of their most important findings was the growing national shortage of persons qualified and interested in serving as sworn police officers. In Juneau, this shortage has led to a critical situation where almost 15 percent of Juneau Police Department (JPD) officer positions are vacant. When subtracting new hires in training, this number exceeds 20 percent.
Even more concerning: eight positions are now eligible for retirement with another eight eligible within five years. During one of the Task Force meetings last November, Deputy Chief David Campbell went so far as to describe these numbers as “starting to get kind of scary.”
JPD has faced similar vacancy levels before, but now they are challenged by a diminished pool of candidates at a time when they should be focused on dealing with an epidemic of property crimes. While JPD is doing an admirable job in meeting their primary mission, this situation has raised stress levels in the department and is overtaxing their existing work force.
Task force members did not evaluate whether a staffing increase is warranted at this time, but strongly recommended increased efforts toward recruitment and retention of police officers to fill vacant slots. When JPD approaches a full complement of sworn officers, it will be easier to determine whether staffing increases are necessary.
NEED TO RECRUIT LOCALLY
Last month, Chief of Police Ed Mercer and members of his staff gave a presentation to the Assembly on their plans to recruit more vigorously throughout the region and local area.
Their rationale for doing this is twofold. First, competition for these candidates among other law enforcement agencies will be less. And second, they believe there are local candidates who may not have considered a career in police work but could be hired and trained more quickly than external candidates. These candidates could be younger, possibly looking for their first or second job. They could also be older, more nontraditional candidates who have no law enforcement experience but are looking for a change and view police work as important and fulfilling.
Alternatively, experienced law enforcement officers in the region and other parts of Alaska may see JPD as a logical next step in broadening their background and career options.
Regardless of their experience level, retention of these individuals is likely to be more assured than individuals recruited outside Alaska.
While many of the ideas noted won’t be expensive to implement, the JPD presentation included other possible changes to improve recruitment and retention, including signing and longevity bonuses, hiring of civilian staff to alleviate officer workload, and an extensive public recruitment campaign in our region and state. These changes, if implemented, would necessarily increase existing budget levels.
Current and past Assembly members have been very supportive of JPD budget requests in the past.
Given Juneau’s escalating levels of crime and drug abuse, these needs shouldn’t be considered discretionary but imperative.
Win Gruening retired as the senior vice president in charge of business banking for Key Bank in 2012. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is active in community affairs as a 30-plus year member of Juneau Downtown Rotary Club and has been involved in various local and statewide organizations.
