Governor Bill Walker will brief the Alaska Legislature on the deal he has signed with the People’s Republic of China. The briefing is at 9:15 pm.
Bloomberg is reporting that the Alaska Gasline envisioned by Gov. Bill Walker is part of a $250 billion package of deals, memorandums and handshakes that President Donald Trump is brokering in China.
The AK-LNG agreement with Sinopec, the Chinese government-owned oil and gas company, or Sinochem, the government chemical company, could reduce the trade deficit between the countries by $10 billion a year if built, according Bloomberg’s sources. The trade imbalance issue is important to the president.
The details from Bloomberg:
The White House expects to announce upwards of $250 billion in business deals in China this week, the sort of U.S. jobs-based diplomacy that President Donald Trump likes.
Commerce Secretary Wilbur Ross mentioned the number in a meeting with chief executives in China on Wednesday, but offered few details, according to two people who attended the meeting. A U.S. official confirmed the amount.
Many of the deals are expected be in the form of nonbinding memorandums of understanding, not contracts.
“Addressing the imbalance in China trade has been the central focus of collaborative discussions between President Trump and President Xi,” Ross said. “Achieving fair and reciprocal treatment for the companies is a shared objective.”
Alaska Gasline, and representatives from more than 20 companies planned to accompany Trump, who arrived in Beijing on Wednesday and sits down for formal talks with President Xi Jinping on Thursday.
Among the CEOs taking part in the visit are Kevin McAllister of Boeing Commercial Airplanes, Steve Mollenkopf of Qualcomm and Keith Meyer of the Alaska Gasline Development Corporation, according to a list provided to U.S. companies in China taking part.
Trump has complained that China engages in unfair trade practices and has pledged to close the trade deficit.
The deals are expected to focus heavily on the energy sector.
One of the biggest deals the Trump administration is currently negotiating is a multibillion-dollar energy investment from Chinese oil and gas giant China Petroleum & Chemical Corp., known as Sinopec, that would bring thousands of new jobs to hurricane-ravaged areas in Texas and the U.S. Virgin Islands. This deal, too, would be a memorandum of understanding.
According to a government document obtained by Bloomberg News, the announcement will include agreements between Alaska Gasline Development Corp. and Sinochem.
For the past three years, the Walker Administration has paid only lip service to a huge debt owed to small oil explorers that came to Alaska to look for oil in Cook Inlet and the North Slope.
Instead of paying the credits owed, Gov. Bill Walker has stiffed the companies by paying only the required minimums.
The impact on Alaska’s reputation as a stable oil province has been felt around the world.
One company owed money by the State of Alaska has filed for bankruptcy, while others are getting nervous the State of Alaska could simply starve them to death.
Walker has another chance to get it right as he prepares his next budget for the Dec. 15 deadline. As he cuts a deal with China on the gasline this week, banks around the world are watching to see if he makes good on current promises. Bankers are waiting and growing impatient as they have to keep refinancing small oil companies who can’t make their own timely payments because of Walker’s actions.
A SHIFT IN APPROACH?
Last week, a slight shift of message occurred during a Senate Finance Committee meeting, when Sen. Anna MacKinnon asked Commissioner of Revenue Sheldon Fisher whether the Walker Administration understands that the State actually is obligated to pay these bills.
In a week full of dramatic hearings on criminal justice reform and opening the Arctic National Wildlife Refuge Coastal Plain for oil development, the nuanced answer Fisher gave might have been lost in the din.
“Yes, we acknowledge we owe the credits,” Fisher said. “And the only question is what is the rate of which we are going to pay them off and something we need to work on.”
It signaled a change in the Walker Administration doctrine, which has developed a hostile stance with not only major multinationals like Exxon, but now with small independent oil companies.
Fisher and the Office of Management and Budget are in the final stages of budget preparation. Gov. Walker must present to the Legislature his FY19 budget by Dec. 15, a budget that will be debated and signed during his re-election cycle.
THE BLUE CREST CASE
For the past three years, Walker has vetoed payments due to small oil explorers like Caelus Energy, Glacier Oil and Gas, ASRC, and Blue Crest.
These are among the companies lured north by the State of Alaska with promises of certain tax credits to entice them to explore for oil in Alaska. But, since the Walker Administration stopped paying those credits as soon as it took office, those small independent companies are having to explain to their own lenders why they are not getting paid the now-delinquent tax credits they were planning to use to service their bank debt.
In August of 2016, Blue Crest Energy of Fort Worth, Texas hit the pause button on its oil wells in Cook Inlet. It was getting ready to lay off 150 or more full-time workers. It could not afford to continue if the State was not going to pay it the money owed Blue Crest for getting the Cosmopolitan Unit into production.
“What (the governor’s action) did is create a tremendous distrust of the state’s integrity going into the future,” BlueCrest President J. Benjamin Johnson told Petroleum News in 2016. “Unless something is worked out to help the small oil companies work through the payment delay, this is going to have a long term negative impact to the state and will surely come into play as the state tries to obtain financing for new capital programs.”
HENDRIX
John Hendrix
At the time, the governor’s oil and gas adviser, John Hendrix, said the Administration needed to see some production from the field so the state could get some royalties. The problem was, Blue Crest was producing and needed cash to keep going and it needed the State to pay its bill.
But John Hendrix took a hard line on the small companies. He told the Alaska Dispatch News:” We want them to have success and they’ve been working hard, but we need to see some production also. Drill for oil, not tax credits.”
It was a slap in the face.
Earlier this year, BlueCrest planned to suspend development drilling at the Cosmopolitan unit, saying the $75 million to $100 million the State owes it are too big a concern to ignore.
The hard line that Walker has taken against the small explorers has many observers concerned. Hendrix not only implied that Blue Crest wasn’t producing out of Cosmopolitan (which it has been), but he’s been badmouthing Caelus Energy, too, dismissing their massive find at Smith Bay. Hendrix’s attitude toward the Smith Bay field is now lore being passed through industry representatives in Alaska whenever they gather to discuss the future of oil in Alaska.
“I know Mr. Hendrix was around and he was not so happy about it being pitched as a find,” Gara said. “As he described it, it was maybe a couple of wells and nobody knew of whatever pools of oil they saw were blocked off by formations that would make the field too difficult to drill.”
No one knows why Hendrix turned from an advocate for the oil exploration sector to someone now viewed as an adversary. He was brought into the Governor’s Office to be a powerhouse and help the governor get his priorities right. He came directly from Apache Corporation, a company that took tax credits payments from the State of Alaska, produced nothing, and left the state. He has served on the board of the Alaska Oil and Gas Association.
WALKER IN CHINA MAKING NEW DEALS
This week, Gov. Bill Walker is in China trying to complete a deal for the gasline he imagines will be built across Alaska. But while he’s signing ink to a memorandum of understanding, Walker has a string of broken deals and broken companies behind him.
While he travels back to Alaska from China, his budget people may want to hammer out a plan for paying those delinquent tax credits, because the banks who would finance his gasline — Bank of America, Credit Suisse, ING — are watching to see if his administration is even credit-worthy in light of its lack of performance on current debts.
In the past, Walker has proposed ways to pay down the tax credit debt, but it’s always been a lever against oil companies: He won’t pay them unless there’s a broad-based tax, and a higher oil taxes. He’s always said he had to have his whole fiscal plan — all the marbles — before he’ll make good on his obligations.
“The policy gyrations have also not been lost on our banks, Glacier Oil & Gas CEO Carl Giesler told the Alaska Business Monthly. “Many of the banks we’ve talked to about a revolving credit facility literally end the conversation when we mention that our assets are in Alaska. The state’s oil and gas sector has relatively few operators. The current fiscal policy uncertainty compounds the difficulty banks have committing human and financial resources to a relatively small market for lending services. Also, some banks have been burned by making loans against earned cashable tax credits that have not been paid.”
The reputation problem Alaska has is real. Walker’s challenge now is to show that Alaska is open for business, not only to China, but to small American companies and the banking community.
A longtime member of the Juneau Assembly filed a letter of intent with the Alaska Public Offices Commission to run for House District 34, a seat held by Democrat Justin Parish.
Jerry Nankervis, who serves as deputy mayor in Juneau, filed for the Mendenhall Valley seat earlier today. He is a Republican.
Juneau Democrats and Republicans alike see Parish as a weak legislator, and it’s possible he’ll face a primary in August if local Democrats think he can’t beat Nankervis, a retired police captain who has served on the Assembly since 2012.
Parish took office in January of 2017 after beating longtime Juneau Rep. Cathy Munoz, a Republican. Parish, a former school crossing guard, had run unopposed in the Democratic primary.
Rep. Justin Parish
Nankervis spent 24 years on the Juneau Police force, and has also been active in youth hockey in Juneau, in addition to his work on the Assembly. His bachelor’s degree is in science with a conservation emphasis. He’s married and has two sons.
Nankervis listed his main priorities as keeping Juneau affordable, maintaining the capital in Juneau, and jobs.
“On issues like crime, taxation and developing our natural resources, I believe my views very much reflect those of my Mendenhall Valley neighbors,” he said in a statement. “I don’t think we can tax our way out of a recession, and I am a firm believer in individual rights and personal property rights.”
Every fiscal hawk is looking for cuts to State government. Sometimes those cuts are right in front of a legislator — on a plate in a restaurant, perhaps. In Juneau, that’s not cheap.
The State Officers Compensation Commission reduced legislators’ per diem during a short work session in October. Lawmakers typically get between $20,000 and $35,000 a year to cover meals and lodging while in session. The commission chopped that about in half, although the calculation is unclear and the recommendations must still be approved by the Legislature.
The commission, however, did not touch the per diem of members of the Executive Branch during its review. That’s not in its purview, except for that of the governor and his cabinet.
Gov. Bill Walker, who is eschewing some of his own salary by donating it to charitable causes, has driven up legislative per diem costs by failing to veto over-spending and then calling lawmakers into numerous special sessions, during which they collect the extra per diem for being herded into Juneau.
An analysis of State per diem shows the Executive Branch, which includes the Governor’s Office and thousands of state workers, is 10 times that of the entire Legislature, which has traveled back and forth to Juneau to meet the requirements of the Special Sessions.
In all, Executive Branch state employee per diem exceeds that of all other branches of government — University, Legislature, and Judiciary — combined.
HOW DOES PER DIEM WORK FOR LEGISLATORS?
An explanation of how legislative per diem is awarded is in the Alaska Legislature 2016 Salary and Business Expense Report, detailing salaries, per diem and travel expenses during the calendar year 2016:
Legislators are reimbursed per diem for lodging and meal expenses during a session. During the regular session held in the capital city, the 57 Legislators whose place of permanent residence is not Juneau were reimbursed $223 per day from January 19, 2016 through February 29, 2016, and $213 per day from March 1, 2016 through April 30, 2016 and $247 per day from May 1, 2016 through May 18, 2016. Juneau Legislators received $167.25, $159.75 and $185.25 per day, respectively. In 2016, the 29th Legislature convened for 121 days in regular session.
a. Regular session per diem amounts received by Juneau Legislators should not be compared to session per diem amounts received by Legislators whose place of permanent residence is not Juneau as the daily rates are lower for Juneau Legislators.
The 29th Legislature convened in two Special Sessions during 2016. The first Special Session ran from May 23, 2016 through June 19, 2016, and lasted for 28 days. The Juneau per diem rate was $247 per day. Juneau Legislators received $185.25.
The second Special Session of 2016 (the 5th Special Session of the 29th Legislature) ran from July 11, 2016 through July 18, 2016, and lasted for eight days. The Juneau per diem rate was $247 per day, and Juneau Legislators received $185.25.
Legislators in travel status to a place other than their place of permanent residence are reimbursed a short term per diem rate or actual lodging expenses plus a meal allowance to cover costs associated with their business travel.
The 2016 legislative payroll and expense breakdown can be found here:
“Again we are looking at a way to provide fiscal certainty, connect the economy to the state services received, get significant fiscal certainty. But we will continue to have the question of increased revenue or reduced services as we go forward.”
– Pat Pitney, Director of Management and Budget, answering questions in the House Finance Committee, admitting that the $325 million the Walker Administration seeks to gain in a payroll tax will cover only half of the fiscal gap she anticipates the state having on an ongoing basis.
In other words, this is just a start. The Walker Administration will be back for more next year.
Jerry Ward, a former state senator from Southcentral, has been named the state director for rural development in Alaska at the Department of Agriculture.
Ward was an early and active supporter of President Donald Trump, and was co-chair for Trump’s Alaska campaign. An Alaska Native, he served in the State Senate from 1997 to 2002.
He was on the president’s transition team, where he served as the liaison to the 500-plus federally recognized tribes. He also was on the “beachhead” team at the Department of Education for the Trump transition.
“It is a honor to be selected by the President to fill the extremely important role of State Director of Rural Development in Alaska. I look forward to working with the President, Secretary of Agriculture, and the Assistant to the Secretary for Rural Development to increase rural prosperity and enhance customer service through innovation and partnerships in our state,” Ward wrote in a note.
Under Barack Obama, the state director position was held by Jim Nordlund, who resigned in January.
The Rural Development program added $2.1 billion into rural communities in Alaska during the eight years of the Obama era, for everything from business startups to sanitation systems in remote villages.
Bryan Scoresby was named director of the department’s Farm Service Agency for Alaska. From Wasilla, Scoresby began his career with the USDA in 1987 and came to Alaska in 1992 to serve as District Director of the Farm Service Agency.
If you didn’t take the training before Oct. 31, signing up for spring classes at the University of Alaska system just got harder.
Students at Alaska’s public university are now required to complete “Title IX” training months before they take courses.
“Title IX Training: Sex and Gender Based Discrimination” is intended to create a safer and healthier campus environment, where everyone “can live, study, work and have fun safely,” according to the university web site. It’s now mandatory for all faculty, staff, and prospective students, who have to clear the hurdle well in advance.
“I have never done a training so jam packed with such a high amount of illogical false-science and propaganda. There are more efficient and personal ways to combat the issues this training addressed,” said Chaz Rivas, a student at the University of Alaska Anchorage. The senior political science major is involved with campus Republicans and works as a political consultant, and he’s got a keen antenna for all things that are political in nature.
Rivas suggests a simple course in manners is all that’s really needed.
But this is 2017, and manners went out with the ’60s. Now, before attending college, students are taking courses in how not to rape each other.
Rivas said that the training modules portray men as predatory. As bystanders, the students are trained to assume that men have predatory intent and to deputize themselves to thwart them.
One scenario presented in the modules has a normal-looking male and female student at a party, and when the male steps away to get the female a drink, bystanders (the test taker) should immediately be suspicious he might drug her. The student taking the course is asked to rate how likely they are to protect Jane from predator Matt.
The undercurrent of all this is that Jane cannot take care of herself. Helpless and gullible, she needs protection from presumptive predator Matt, who could be a serial rapist.
“They are basically creating a culture of suspicion, so that anyone trying to do anything is perceived as being predatory,” Rivas said. “They take very normal situations and train you to be an advocate.”
The training also breaks down how to communicate with various gender identities such as gay, transgender, transqueer, non binary, and the other ever-multiplying forms of gender expression. These people need to be communicated with differently than straight people, according to the training.
Accomplished online within an hour and a half, the mandatory training includes scenarios to consider and surveys to measure participants’ attitudes and behaviors.
Plus there are prizes for taking the mandatory course:
Anyone who is made to feel uncomfortable by the training is instruction to stop it and “contact our Employee Assistance program at ComPsych® directly 24 hours a day, 7 days a week, at (866) 465-8934 or use the TDD at (800) 697-0353, or the Student Health and Counseling Center at 907-786-4040, option 3.”
Although the training deadline has passed for Spring enrollment, prospective University of Alaska students can make arrangements through their campus Title IX coordinator to take the course in person.
At exactly 1 am Tuesday, and on a vote of 32-8, the Alaska House of Representatives passed Senate Bill 54, which reimposes harsher penalties for crimes ranging from vandalism to assaulting an officer.
The Senate, which had passed a slimmer version of the bill in April, will take up the version the House has sent it and must complete its work by the end of next week.
A staccato of amendments were offered over the course of the evening. Nearly every amendment failed, but none so spectacularly as one offered by Rep. David Eastman, which went down 40-0, with even Eastman voting against his own amendment.
In the end, those voting against SB 54 passage were Republicans Eastman, DeLena Johnson, Mark Neuman, George Rauscher, Colleen Sullivan-Leonard, and Cathy Tilton — from the Mat-Su Valley, and they were joined by Democrats David Guttenberg of Fairbanks and Sam Kito of Juneau.
The bill went too far for “soft-on-crime” Democrats Guttenberg and Kito, but for the Republican “Mat-Su Six,” the bill likely didn’t crack down hard enough on crime.
On Saturday, Tilton, from Wasilla-Chugiak, introduced an amendment repealing nearly all of Senate Bill 91, the criminal justice reform bill that many blame for the crime wave that has swept across Alaska. It was a bridge too far for most legislators and the effort failed by a 13-27 vote.
Amendments that passed the House over the past few days include one that allows judges to hand down longer sentences for Class C felonies. Those are the least heinous felonies and account for more than one third of the prison population in Alaska.
Rep. Lora Reinbold was able to win support for increasing sentences for up to two years for the first Class C offense, up to four years for a second offense, and five years for a third.
SB 54 has some important fixes to what many see as a flawed SB 91, but it also may have set up a constitutional problem by having the same punishment for different levels of crimes. That will have to be hashed out in the Senate and then in a conference committee between the bodies.
Gov. Walker from China issued an immediate press release saying he approves of the bill as passed by the House and will sign it in its current form if it gets to his desk.
Meanwhile, the payroll tax that Walker wants, which prompted him to call a Special Session in the first place, hasn’t gained much traction. House Finance Committee today will hear from Office of Management and Budget Director Pat Pitney at 1 pm.
Senate Finance will take up SB 54 tomorrow at 2 pm in a joint session with Senate Judiciary.
When Rep. David Eastman was censured by the Majority of the House of Representatives in May of 2017, it’s because he set off a firestorm of indignation over his remarks about the use of Medicaid by rural residents.
Rural women, he implied, were glad to be pregnant so they could get a free trip to the city for a publicly funded abortion.
“You have individuals who are in villages and are glad to be pregnant, so that they can have an abortion because there’s a free trip to Anchorage involved,” Eastman told Alaka Public Media.
The rebukes were harsh and swift from every quarter. It seems no one agreed with him. Eastman was called a racist and misogynist on the floor of the House and in the halls of the Capitol.
Rep. Ivy Spohnholz led the charge to have him censured. No House member had ever been censured before in Alaska; Eastman’s censure made history and it also made national news. Women excoriated him on Facebook.
Legislators heard during that time that Eastman and his famiy were receiving threats.
“They were everything from ‘You should die,’ to ‘I hope your kid dies and gets raped in the process,” Eastman said. He reported one of the threats to Capitol Security and the Legislative Affairs Agency, but there were many others.
“Everyone knew because I said it on the floor on camera. No legislator thought it proper to acknowledge the threats at the time, in the two hours or so of railing against me on the floor, or the six months since,” he said.
It’s true: No mention was made by the House Speaker back then about the threats. Speaker Bryce Edgmon remained silent in the face of death threats against a member of the House minority.
One legislator’s spouse approached his wife, Jennifer, and told her she just needed to get a thicker skin.
FAST FORWARD TO NOVEMBER
This weekend, it was different ballgame. Speaker Edgmon issued a warning to the public not to threaten legislators.
That admonition came after a Facebook post from a riled-up Ashley Dahm, who called for Alaskans to steal the cars of legislators who voted against a repeal of SB 91. And to vandalize the cars. And to shoot thieves. He posted a list and directed it at Rep. Chris Birch’s Facebook page:
It was unwise for someone associated with the U.S. military to make such threats and no doubt there will be disciplinary action of some sort at JBER, where Dahm works.
But the reaction from the House Speaker was swift:
“Any sort of suggestion of retaliation, for lack of a better word, toward any member of this body from anybody in the general public will be dealt with swiftly and immediately,” Speaker Edgmon said. “We’re going to treat this matter very seriously, and if it happens again, we’ll treat it in a like-minded way.”
Rep. Cathy Tilton used her Facebook page to encourage decorum and responsible dialogue, and to remind people not to threaten anyone.
Rep. Eastman has been threatened before, he said, by a member of the Libertarian Party of Alaska. That man is now serving a 74-year sentence for murder.
“I raised the threat at the time, and was brushed off then, too. I’ve learned never to rely on what ‘other’ people think about the threats that are made,” Eastman said.
Eastman took this spring’s threats seriously enough that when a friend offered to do a bomb check on his car every day during the heat of the legislative debates, Eastman readily agreed.
“And my wife didn’t get much sleep during that period,” he said.
