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Permanent Fund vote passes, governor takes credit

Suzanne Downing
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10
Permanent Fund vote passes, governor takes credit

Both House and Senate today approved Senate Bill 26, limiting the use of the Alaska Permanent Fund’s earnings, while using a rules-based portion of the fund for government services, and ensuring qualifying Alaskans a dividend.

The House voted 23-17, and the Senate 13-6 to concur with the substitute version developed in conference committee.

Gov. Bill Walker issued an immediate press release declaring victory, although SB 26 had been changed substantially from the version he introduced last year. It is still a rules-based approach to tapping the Permanent Fund Earnings Reserve Account, and he indicated he will sign the bill. He sat in the House gallery as debate occurred before the final vote was taken.

Gov. Bill Walker, far left, along with his chief of staff Scott Kendall, deputy chief of staff Grace Jang (hidden), Rep. Gabrielle LeDoux in green, and Revenue Commission Sheldon Fisher, during an at-ease in the Alaska House of Representatives, prior to the vote on SB 26.

 

A sticking point for some Alaskans is the change from a simple word — “shall” to “may,” referring to how the Permanent Fund dividend is calculated. The word “may” was dropped from the final version.

But in fact, after the legal case brought by Sen. Bill Wielechowski, the State Supreme Court has already decided that the dividend is and always has been subject to appropriation, and so the wording simply reflects that reality, some senators said.

“Failure to act would have jeopardized the survival of the dividend,” said Sen. Hoffman of Bethel, co-chair of the Senate Finance Committee. “This bill establishes a responsible draw from the earnings reserve to preserve the dividend program, while helping fill our budget gap during these difficult fiscal times.”

The bill adopts an endowment management approach and caps the amount of money legislators may withdraw each year from the Permanent Fund Earnings Reserve Account, keeping the original dividend formula intact.

The Permanent Fund Board of Trustees has asked for this rules-based approach for over a decade, to allow fund managers to make prudent decisions, be more nimble, and get greater returns on investments. Without such a rules-based approach, the fund was forced into shorter term, more risk-averse decisions.

SB 26 limits, for three years, the annual draw from the Permanent Fund to 5.25 percent of the fund’s market value for five of the last six fiscal years (effectively 4.35 percent this year).

The Permanent Fund Corporation says this rate of drawdown is sustainable. After three years, the draw decreases to 5 percent.

The law allows lawmakers on an annual basis to decide how that drawdown is split between the dividend program and government spending.

Using the original formula, 2018’s dividend would have been $2,700 this year, but was reduced to $1,600 through earlier legislation. But by leaving the formula in place, future lawmakers could fully fund the dividend according to the original formula when the fiscal outlook gets better or when a new governor takes office.

ELECTIONS HAVE CONSEQUENCES

Many well-intentioned conservative voters may have voted for Bill Walker in 2014 because he promised to cut government spending right away and not take away the people’s dividends.

But Walker has been unwilling to use his veto pen for anything other than the dividend itself and tax credits to small oil exploration companies, both of which have been harmful to the economy.

Must Read Alaska reached out to thought leaders in the Senate and learned that for Senate Republicans, at least, the hope is that voters will send a conservative governor to Juneau who will actually use his veto pen next year, and that voters will also restore the House to Republican leadership.

With SB 26, some conservative legislators are looking at it as a temporary crisis, while in the future, the dividend could go back to the traditional formula when the state comes under “new management.”

Over in the House, this is an election year, and cutting the dividend is not popular with many conservative voters. The vote today will send about $2.7 billion into the State’s general fund.

The House votes crossed the political spectrum, with Rep. Harriet Drummond, one of the hardest left of the Democrats voting the same way as Rep. David Eastman, who anchors the far right:

DIVIDEND THROUGH THE YEARS

Established in 1976 after oil started flowing through the Trans-Alaska Pipeline, Alaskans voted to amend the state constitution to set aside a share of oil revenues in a sovereign wealth fund that would help pay for government in the future.  Later, after the Fund was established, the dividend program was added as a way to share oil wealth with Alaskans and protect the Fund itself from irresponsible spending schemes.

The largest dividend was in 2015 at $2,072 and the smallest was in 1984 at $331.29. It has historically been based on a five-year average of the Alaska Permanent Fund’s earnings performance.

 

Trump’s Iran sanctions could rock oil markets

Suzanne Downing
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1
Trump’s Iran sanctions could rock oil markets

President Donald Trump today announced the U.S. will pull out of the Iran deal signed by President Barack Obama in 2015, and will reimpose stringent economic sanctions against the country.

CNN headlined the story, “Trump announces withdrawal from Iran nuclear deal, isolating him further from world.”

But Must Read Alaska reached Bob Gillam, chief executive officer of McKinley Capital Management, to get his view on how the decision will impact financial investment decisions around the world. McKinley is a privately-held investment company specializing in global and international growth equity strategies, and is focused on targeting risk factors.

Gillam, who manages billions of dollars of investments around the world, favored the president’s decision, in spite of the uncertainty it causes.

“This deal was one-sided, and allowed Iran to get nuclear weapons at the end of the agreement,” Gillam said. “The reality is that Iran having nuclear weapons is not in the long-term best interest of the U.S. or Europe.”

Bob Gillam

Gillam said he had dinner with Trump last month and the topic came up. He said Trump didn’t confide in him exactly what he would do, but was concerned the Iran deal was executed without the approval of the U.S. House or Senate, and clearly needed to be addressed because it was not a good deal.

“He wants a better deal for the world,” Gillam said of the president.

But for the short term, restoring sanctions will create a lot of volatility in the price of oil, something that matters to Alaska’s economy.

“Volatility impacts investment decisions. The higher the level of volatility, the less willing investors are to make investments — that’s true in the oil field or the cereal factory,” he said.

Gillam said oil prices are rising but he expects volatility in both directions as a result of the president’s decision. The price of Alaska North Slope crude hit $75.26 on Monday.

There are other forces impacting oil, however: “The world economy is on fire,” said Gillam, who had just returned from Europe and described the boom he witnessed “with construction cranes everywhere. Even with domestic shale production up, that has to make up for the increase in world demand, which is everywhere. You can’t point to a country in the world not doing better than it was two years ago.”

Many leading Democrats in Congress criticized the Obama deal with Iran back in 2015, “but it was a way of Obama kicking the can down the road. There was always going to be a day of reckoning, but it would come for the next president,” Gillam said.

Alaska petroleum engineer Randy Ruedrich said the sanctions — if they curtail Iran’s oil production — coupled with Venezuela’s current economic condition, could produce a spike in prices in the short term. But he added that OPEC and Russia can replace Iran’s oil fairly quickly.

Sen. Dan Sullivan

DAN SULLIVAN, LONG A CRITIC OF IRAN DEAL

Sen. Dan Sullivan, a critic of the Iran deal when Obama signed it in 2015, was in meetings and not available for comment today, but  told NPR in October that he still had issues with the deal put together by Obama and then-Sec. of State John Kerry:

“It’s not just the violations that I’ve had problems with with regard to the agreement. It’s the overall structure of the agreement. Remember; even if Iran is completely abiding by all elements of this nuclear deal, by the end of the decade, even less if they’ve complied with it, the agreement almost allows them to legally be on the threshold of being part of the community of nations that have nuclear weapons. I think having another rogue terrorist regime on the verge of having nuclear weapons is not in the interest of the United States. It was one of the big flaws of the deal. And right now they’re showing that they’re not in compliance with it,” Sullivan said.

President Donald Trump

TRUMP, IN HIS OWN WORDS

Trump said the Iranian regime is the leading state sponsor of terror.

“We will be instituting the highest level of economic sanction. Any nation that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States. America will not be held hostage to nuclear blackmail,” he wrote on Twitter.

In his statement today, he said:

“[Iran] exports dangerous missiles, fuels conflicts across the Middle East, and supports terrorists’ proxies and militias, such as, Hezbollah, Hamas, the Taliban, and al-Qaeda. Over the years, Iran and its proxies have bombed American embassies and military installations, murdered hundreds of American service members and kidnapped, imprisoned and tortured American citizens. The Iranian regime has funded its long reign of chaos and terror plundering the wealth of its own people. No action taken by the regime has been more dangerous than its pursuit of nuclear weapons. And the means of delivering them. In 2015, the previous administration joined with other nations in a deal regarding Iran’s nuclear program. This agreement was known as ‘Joint Comprehensive Plan of Action’ or JCPOA.

“In theory, the so-called ‘Iran deal’ was supposed to protect the United States and our allies from the lunacy of an Iranian nuclear bomb, a weapon that will only endanger the survival of Iran to continue enriching uranium and over time reach the brink of a nuclear breakout. The deal lifted crippling economic sanctions on Iran in exchange for very weak limits on the regime’s nuclear activity. And no limits at all on its other malign behavior, including its sinister activities in Syria, Yemen and other places all around the world.

“In other words, at the point when the United States had maximum leverage, this disastrous deal gave this regime — and it’s a regime of great terror — many billions of dollars. Some of it in actual cash. A great embarrassment to me as a citizen and to all citizens of the United States. A constructive deal could easily have been struck at the time. But it wasn’t. At the heart of the Iran deal was a giant fiction, that a murderous regime desired only a peaceful, nuclear energy program. Today, we have definitive proof that this Iranian promise was a lie. Last week, Israel published intelligence documents long concealed by Iran conclusively showing the Iranians’ regime and its history of pursuing nuclear weapons. The fact is this was a horrible one-sided deal that should have never, ever been made.”

 

 

Elections Division kept hacking attack secret

Suzanne Downing
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6
Elections Division kept hacking attack secret

It wasn’t until Anchorage Daily News reporter Nat Herz caught wind of irregularities in the 2016 General Election that the Division of Elections admitted its computers had been hacked not once, but twice.

The second attack was at 5:37 am on Election Day, 2016.

In what could be viewed as a cover-up by the Division of Elections, Election Division Director Josie Bahnke said she didn’t disclose it because the attack had no effect on the outcome of the elections.

Emails uncovered by Herz support that assertion but do not explain why no report was made to the public in the year and a half that followed, especially after the September, 2017 notification of Russian intrusion into Alaska’s Election Division data, which had also occurred in 2016.

REPUTATION MANAGEMENT FIRST

Yet there were other factors at play in 2016: The division, which operates under the supervision of Lt. Gov. Byron Mallott, had been under criticism after the primary because division staff had allowed some rural voters to vote two ballots — the Republican primary ballot and the “other” ballot. The double voting in Shungnak was first identified by Must Read Alaska.

The rural voting irregularities likely led to the narrow defeat of Rep. Ben Nageak of Barrow, replaced by Rep. Dean Westlake, the Democrats’ favored candidate. (Westlake was forced to resign in January of 2018, after allegations of harassment were made against him.)

[Read: Byron Mallott’s terrible, horrible, very bad, no good election]

The extent of failings in the 2016 Primary process were significant. Westlake won by just 8 votes, and at least 50 people in Shungnak were given both Republican and “other” ballots. Through a challenge by the Alaska Republican Party, a Superior Court judge reversed the election and gave Nageak the win, but the Supreme Court upheld the election of Westlake.

Division of Elections Director Josie Bahnke / screen shot of KTVA interview

After the stain of election irregularities and having to have the election decided by the Supreme Court, Bahnke was under pressure to have a clean General Election.

Bahnke is sticking to prepared statements now, most likely heavily vetted by the Department of Law.

A MISSED OPPORTUNITY TO BE TRANSPARENT

On Feb. 27, 2018, Bahnke responded to media reports of the 2016 Russian cyber scan of the Election Division, saying, “Many businesses and governments have had threat actors scan systems, which is like a robber rattling the door knob or trying to peek in the windows. But scanning a system, versus breaking and entering, are two very different scenarios. We have extensive procedures to secure our information, with multiple layers of security which include a combination of people, processes and technologies to help us conduct secure, trustworthy and accurate elections.”

By the time she made that statement, she had known for more than a year that there had been a second attack, but did not reveal it, instead reassuring the public of the “secure, trustworthy and accurate elections.”

Former Lt. Gov. Loren Leman read the story and said, “My reaction was one of surprise when I read that story. Of course, when things like that happen, we have to decide if releasing the information helps the bad guys. In this case, I would have asked Laura Glaiser and Whitney Brewster at the Division of Elections to discuss this with IT and Risk Management staff and then direct them to be as candid as they could that a system attack occurred, but we were able to defend against it. We wouldn’t have revealed details about the protections we use, but would want to give the public confidence that we are on top of our game in protecting the integrity of elections.”

The Elections Division website has a devoted a section on its front page relating to the Russian attack, which was revealed by the Department of Homeland Security, but makes no mention of the second attack.

Bahnke is sticking with her account of the 2016 election and saying there was no need to inform the public because the election was not “impeded” by the attack. Still not known is what Lt. Gov. Byron Mallott knew and when he knew it, or whether the governor himself was informed.

WAS THE ELECTION WORK GROUP INFORMED?

Mallott convened an election work group last year to advise him and the Elections Division on changes to the way Alaskans vote, including the possible move to a mail-in ballot.

The issue of hacking has not been on the group’s agenda, and has not been discussed at any of its meetings. It appears this high-level working group, which includes a representative from the Department of Law, has not been made aware of the Election Day hack of state computers, or the subject has been kept off of official minutes by Mallott and Bahnke.

[View Election Working Group meeting packet of Jan. 30, 2018]

The group is meeting today and tomorrow in Anchorage to review vendors for a new ballot system.

Tuckerman Babcock, chair of the Alaska Republican Party, said that members of the working group are reviewing vendors without knowing what they need to protect against.

“Here she and Byron Mallott have had ongoing meetings about changing the election system. You can’t have an ongoing discussion about changing the election system, while you are not telling people what the problems are. You have to go overboard with transparency and honesty when you run elections,” said Babcock, who started his career working at the Division of Elections in high school.

When Sean Parnell was lieutenant governor, he convened an election security project, which was an ongoing study of Alaska elections, done in cooperation with former Lt. Gov. Fran Ulmer, who was the chancellor of the University of Alaska Anchorage. Later, Lt. Gov. Mead Treadwell kept the project going.

The focus during those administrations was on security of the elections, a focus that has shifted under the Walker-Mallott regime to expanding voter turnout in rural Alaska.

 

Governor announces price agreement on gas

Suzanne Downing
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16

‘THE BINDING DEAL’ MAY HAVE OBLIGATED THE STATE FOR BILLIONS

Gov. Bill Walker has been courting China for the past year. Through the Alaska Gasline Development Corporation, he is preparing to sign loan agreements with the Bank of China to finance a $40-60 billion gasline project.

In November, he signed a joint development agreement between AGDC, Sinopec, CIC Capital, and Bank of China, and large LNG buyers in China, Korea, and Japan.

He only needs a few things in place, such as the Legislature’s approval of AGDC’s authority to borrow $1 billion of “stay afloat” money. Senate Republicans have balked, while House Democrats have given their blessing.

Walker also was told by Goldman Sachs and the Bank of China, the global capital coordinators for the project, that he needed to have some gas to sell. He didn’t own the gas. This was going to make it hard to sell the project to investors.

It was time for a good-news press release.

WALKER SIGNS TO BUY GAS AT A PRICE

Today, Walker says he has a binding agreement with BP to buy their share of North Slope and Pt. Thomson gas. The press release issued by his office says AGDC and BP Alaska have agreed to the “key terms” as they relate to price and volume in a gas sales agreement.

The volume is unknown. No one even knows how much BP has in gas in Pt. Thomson.

The price? Also unknown. No one has revealed the price AGDC President Keith Meyer has agreed to pay for that gas, and what the variables might be for cost overruns, or the multitude of risk escalators. Part of this is because there are two other producers who must sign off on any agreement — ConocoPhillips and ExxonMobil. Along with BP, they have complicated gas balancing agreements between them that must be factored in.

The timing of the news release, 10 days before the end of the legislative session, shows both a political purpose and a commercial one, because if AGDC and BP were close to an actual gas sales agreement, they would have said so. That agreement will be truly binding, whereas this “precedent agreement” is “binding lite.”

The carefully worded “precedent agreement” is a bit of progress, and Walker needed to get it out there to keep the project alive.

STILL A FRAGILE PROJECT

Not even the appropriating body, the Alaska Legislature, knows today what the agreed price is or the terms that surround it; legislators will have lots of questions in coming days. The Senate has yet to sign off on AGDC’s ability to borrow $1 billion from China to continue.

Governor Walker made an announcement in March of 2016 that things were not going that well on the gasline. The partners stood by stoically as he said he would take it over from the producers.

Alaskans recall that in 2016, Walker made it impossible for ExxonMobil, BP, and ConocoPhillips to remain as the lead partners in the project, which was advancing slowly due to an unfavorable market, one flooded in natural gas. They were shown the door by the Walker Administration, which chose to go it alone.

But BP remained as a technical adviser to the project, and continues in that role today, which makes it no surprise that the company would also be the one to step forward first and say: “Give it your best shot, Gov. Walker, and we’ll sell you gas.”

 

With Walker’s campaign season in full swing, AGDC has been in the field polling Alaskans about what it would take for them to get back on board with the gasline. The agency has sifted through polling data and come up with ways to court public opinion. Alaskans told AGDC that they hope the project pennies out, but they have their doubts as to whether it’s viable.

Because Gov. Walker needs some good news to get the wind in the sail of his re-election campaign, now was as good a time as any to announce an agreement to keep working toward an agreement.

 

Franken-bill: ‘LeDoux’s Hour of Power’ to gum up legislation

Suzanne Downing
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1

A MOVE TO ALLOW FELONY DUI CONVICTIONS TO NOT MATTER AFTER 10 YEARS

Monday is Day 112 in the Alaska Legislature; the constitutional deadline for sine die is next Wednesday. Not much of interest is on the calendar today, as most negotiations are going on in fits and starts behind the scenes.

But one item caught the attention of Must Read Alaska. It’s the “LeDoux Hour of Power,” House Rules Committee on Monday at 9:30 am.

Legislative spectators will be watching as Rep. Gabrielle LeDoux stuffs unrelated amendments into Senate Bill 81.

The bill comes from the governor and makes some changes to background checks for the Department of Health and Social Services. It’s a normal cleanup bill, with this title:

An Act relating to criminal and civil history record checks and requirements; relating to licenses, certifications, appeals, and authorizations by the Department of Health and Social Services; relating to child protection information; and providing for an effective date

But now it’s in LeDoux’s hands. Rather than add her amendments in the Judiciary Committee, where the changes are supposed to take place and be debated under Chairman Matt Claman, LeDoux has saved her changes for her own committee, the last stop before the House floor.

What does she want to do to SB 81?

She wants to remove driving restrictions for people who have been convicted of multiple felony DUIs.

In her own words, “The House Rules Committee substitute (CS) for SB81 (version U) would affect persons who have had their driver’s license permanently revoked for a felony DUI conviction and who also had a post-revocation driving-related criminal offense. Under current law there is no pathway for anyone with this set of convictions to ever have their driver’s license restored unless they were to reoffend. The House Rules CS would allow for persons who did not kill or seriously injure another person in connection with the felony DUI conviction or in any subsequent driving-related criminal offense(s) to have their driver’s license restored if 10 years have elapsed since their last driving-related criminal offense.”

There appears to be something wrong with the committee substitute, however: “Under current law there is no pathway for anyone with this set of convictions to ever have their driver’s license restored unless they were to reoffend.” It does not make sense.

But more to the point, this amendment has nothing to do with the purpose and intent of the bill. Why LeDoux is making major, substantive changes in the last-stop committee, a place where she has been known to squelch other amendments or discussion, is curious.

Politicos have offered two theories:

1. She is doing a favor for a donor to her Gabby’s Tuesday PAC. A scan of her donors might reveal that information.
2. She is trying to kill the bill for some unknown reason, because even if it passes the House, when it gets back to the Senate, they’re likely to take a dim view of it due to the “single subject rule.”

It’s not the first time LeDoux has made bills into Franken-bills as they came through the Rules Committee. Last year, she bruised up a simple resolution for Sexual Abuse Awareness Month and provided drama for viewers on 360North.org.

[Read: Four minutes of Kim Jong LeDoux]

Republican chairman asks Election Division to reconsider decision

Suzanne Downing
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1
Republican chairman asks Election Division to reconsider decision

THE PARTY SETS RULES, AND IT WANTS TO ENFORCE THEM

The chairman of the Alaska Republican Party has asked the Division of Elections to reconsider its stance on refusing to honor the party’s rules prohibiting Reps. Gabrielle LeDoux, Paul Seaton, and Louise Stutes from running as Republicans in the August primary.

Division of Elections Director Josie Bahnke last month responded to Tuckerman Babcock’s request to respect the party’s rules, and she said without a court order she would not agree.

The matter stems from a series of actions the party took after LeDoux, Seaton, and Stutes left the elected Republican majority in 2016 and formed a coalition with Democrats, giving them control of the House of Representatives for the first time since 1993.

[Read: Democrats may expand their ballot but Republicans not allowed to contract theirs]

After Bahnke said she would not enforce the party’s rules, Babcock returned to the State Executive Committee for a decision, and the group wholeheartedly supported taking legal measures to protect the party from the three rogue Republicans.

“As you know, the controlling case in freedom of association and political parties is Tashijan.In that case the Republican Party of Connecticut desired to expand those eligible to vote in the Republican primary and the State of Connecticut refused. The freedom of association argument won. In Alaska, the Alaska Republican Party desired to restrict, not expand, those eligible to vote in the Republican primary — contrary to state law. The State of Alaska recognized the constitutional authority inherent in  Tashijan and recognized the right of the party to restrict those who could participate in Republican primary,” Babcock wrote on Saturday in a letter to Bahnke.

Tuckerman Babcock

Babcock was referring to the Republicans’ closed ballot in the Alaska primary, where people who are undeclared with a party or nonpartisan may vote in it along with registered Republicans, but others — registered Democrats, for instance — may not vote the GOP primary ballot.

“Now we have the Superior and Supreme Courts in Alaska ruling in favor of the constitutional right of a political party to expandthe candidates eligible to run in the primary. Once again the constitutional principle is the freedom of association. Once again the courts acknowledge and recognize that right. The response from the Alaska Republican Party was to apply the constitutional principle identified by the courts to restrict known turncoats and frauds from the Republican primary,” he wrote.

“We are shocked that the Division of Elections flatly refuses to treat the right of association equally between the Democrat and the Republican Parties.  Or to follow the precedent set subsequent to Tashijan,” Babcock wrote. “What is the constitutional principle relied upon by you to differentiate between the Democrat and Republican Party internal party rules? Is it the State’s position that every subsection and paragraph of state election law must be litigated before you will recognize when a clear constitutional right has been identified by the courts?”

Babcock asked Bahnke to reconsider her decision and honor the party’s rules.

“The State Executive Committee of the ARP has authorized me to pursue all legal means to enforce our Rules. However, a lawsuit, besides needless expense and a waste of court time, would leave the candidacies of LeDoux, Seaton and Stutes in limbo and their eligibility in question. There is no harm to the electorate at large, nor any harm to the three apostate incumbents, from enforcing our Rule insofar as those three individuals can still run for office as petition candidates in the general election or as candidates of another political party.”

 

Mail-in election was spendy for Anchorage taxpayers

Suzanne Downing
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2

Mail-in elections are expensive. How expensive? A brief look at recent Anchorage mayoral election turnouts and how much they cost the taxpayers:

2012 – 71,099 cards cast, election cost taxpayers $400,000
2015  – 70,650 cards cast, election cost taxpayers $451,000
2018 –  79,295 cards cast, election cost taxpayers $1,040,300

Additional ballots cast in 2018 over ballots cast in 2015: 8,645
Additional cost to taxpayers: $589,300
Cost to taxpayers for votes exceeding the 70,650 cast in the 2015 election: $68 dollars per vote.

Bottom line: A massive increase in cost and a small increase in turnout coupled with a heightened risk of fraud? The municipality could have hired four more police officers instead.

Assimilation is complete: Walker to run in Dems primary

Suzanne Downing
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12

IS WALKER NOW EFFECTIVELY A DEMOCRAT?

The man who first ran for governor as a pro-life Republican, then switched to “undeclared” and ran with the full backing of the Alaska Democratic Party, has been fully transitioned.

Can an endorsement from Planned Parenthood be far behind?

Gov. Bill Walker, with his poll numbers in the tank, is trying to hang on for a second term by joining the Democrats’ primary ballot.

In what’s known as a Friday night news dump, Walker’s campaign made the announcement after the evening news cycle on Friday, a well-worn tactic for keeping stinky news out of the mainstream in the hopes that something else will capture the attention of reporters; the Anchorage Daily News does not publish on Saturday, so Friday night was the place to bury this particular news.

The move to join the Democrats appears to be one part strategy, but one large part desperation: Walker is afraid he can’t win in a three-way contest, which would happen if Mark Begich files. If this was news he was proud of, he would have announced it earlier in the day and taken advantage of earned media.  No, this was not one of his prouder moments, and it left him wide open for criticism.

But Walker’s campaign manager, John-Henry Heckendorn, says this alliance with the Democrats, like last time, is without strings. After the primary, Walker will continue as an independent, he says.

Heckendorn, who founded the Ship Creek Group of Democrat campaign services, brought Alaska the likes of disgraced Reps. Zach Fansler and Dean Westlake, both of whom were forced to resign from office within a year.

Walker and the Democrats supported the two drink-and-kinkers, and they ousted family men Bob Herron of Bethel and Ben Nageak of Barrow, both who had served in the Legislature honorably.

That Heckendorn-Democrat effort allowed the Democrats to flip the House of Representatives to Democrat control with the help of three turncoat Republicans.

Gov. Bill Walker is still undeclared, but he’ll run on the Democrats’ primary ballot and, if he wins, have the full support of the Democrats, including funds from the Democratic Governors Association.

But winning the primary is a big “if.” There’s always the Mark Begich factor.

MAN WITHOUT A COUNTRY

Bill Walker was a Republican for most of his life, but failed in his attempt at winning the governorship in 2010. Back then, although spending hundreds of thousands of dollars on his campaign, he was unable to knock off the incumbent Sean Parnell. Walker finished second in the primary, with 34 percent of the vote, while Parnell won the nomination with 50 percent.

Walker’s next try was different. In 2013, he filed as a Republican, but then took the advice of former Gov. Wally Hickel and decided to skip the Republican primary and run as an undeclared, or independent as he calls it.

Bill Walker and Byron Mallott file for office on Aug. 21, 2017, as an undeclared and a Democrat.

DEMOCRATS PLAY MIX AND MATCH

But immediately following the primary election, the Democrats, with the prompting of public employees unions, kicked their own winner off the top of the ballot. After all, a three-way race gave the governorship back to Parnell.

On Sept. 2, 2014, the deal was sealed: There would be no Democrat running at the top of the ticket.

With Democrats pulling the strings, Byron Mallott would run instead as Walker’s running mate, and Walker’s running mate, Craig Fleener, would drop his candidacy and accept a job in the Walker Administration as an ambassador without portfolio.

At the same time, the Democrats kicked Hollis French from their ballot — he was the candidate who had won for lieutenant governor. He was promised a job, too. Eventually, they found a spot for him running the Alaska Oil and Gas Conservation Commission.

In 2014, with Democrats running the campaign operation, Walker and Mallott brought an unconventional ticket. The court upheld the hijinks and voters gave the new ticket a win, although the Walker-Mallott ticket only gained 48 percent of the general election vote. Libertarian and Constitution parties, which lean conservative, peeled off enough votes from Parnell to leave him with 46 percent.

Less than a year ago, Gov. Walker headlined a symposium sponsored by the Centrist Project, which promotes breaking up the political parties in favor of non-party candidacies. He touted the benefits of not being associated with a party and said at the time he’d remain a solo act.

Then, a few months later in 2017, the Alaska Democratic Party changed its rules to allow undeclared candidates to run under its banner.

The courts upheld the decision, and the Alaska Supreme Court’s concurrence with Judge Philip Pallenberg’s October decision was what Walker need not to go it alone through the summer. And the decision came just in time. Although he has released two questionable polls that show him in the lead, credible polls, such as Dittman Research and Morning Consult, show him deeply unpopular. Another national poll by Republican gives Walker just a 22 percent approval rating.

As an undeclared running in the Democrats’ primary, he now won’t have to collect signatures. If he finds himself unopposed in the primary, he will be able to utilize all the Democrats’ resources, including access to national funds that come through organizations like Act Blue, and the National Democratic Governors Association.

BEGICH FACTOR

But all that only works if Mark Begich stays out of the race. Begich, a Democrat and one-term U.S. senator with some of the best name recognition in the state, may challenge a weak Walker. If so, polling shows Begich would win, and he is in a stronger position to challenge the Republican nominee, whoever that is.

Walker and Begich are never seen together. While Begich went to China a few weeks ago, he didn’t sign onto the governor’s trade mission to China in May. He doesn’t show up at Walker fundraisers or on any of his donor lists. His name is not among the endorsements. And in September, he wrote to his supports and told them to “keep your powder dry.”

Begich has recently penned newspaper commentaries that say Alaska is on the wrong track. In other words, he has not lent one iota of support to the current governor.

WILD WILD WEST OF ELECTIONS – QUESTIONS 

1. Will Begich jump into the primary on the last day of filing, June 1. In a head-to-head, Begich would win the primary, and many Democrat Walker supporters would switch allegiances. Smelling blood in the water, they’ll go with the perceived winner.

If so, then Walker’s administration would be effectively over on Aug. 21. Already, senior Walker officials are starting to peel away; look for at least one major departure in the next few days.

2. Has Begich already given Walker his blessing? One scenario says he stays out — that’s what his brother Tom Begich is peddling.

3. With so many Democrats in Alaska identifying as Bernie Sanders believers, another candidate could jump into the Democrats’ primary. Nonpartisan Tom Gordon has already announced. Bill Wielechowski is a known foe of Walker’s, and is circling. Can the Democrats keep Ray Metcalfe out?

4. In the Democratic primary, Lt. Gov. Byron Mallott will have to run separately, and can pair with whomever emerges as the winner. There’s no provision to run a joint campaign for the primary, so this is a question for the Alaska Public Offices Commission and the Division of Elections to determine if and how a “ticket” can proceed in the primary.

5. Walker and Mallott have separate APOC accounts and have $280,000 and $162,000 respectively. But they started with $50,000 each saved from their November, 2014 victory. These are not large numbers for an incumbent ticket.

6. If Walker and Mallott win, they go forward to the general election as the candidates who won in the Democrat primary. It will be up to Division of Election Josie Bahnke to devise a label that does not confuse voters, according to the court’s decision. Will she do that so late in the cycle that Republicans cannot effectively sue her if she tries to disguise Walker’s Democratic ties? Since her boss is the lieutenant governor, how will the public be assured she is operating fairly?

7. If a registered undeclared  wins as governor in the Democratic primary and a registered Democrat wins for lieutenant governor, how will Division of Elections label them as a ticket?

WALKER ANNOUNCES CAMPAIGN TEAM

Earlier in the day on Friday, the Walker-Mallott campaign released the names of people on their campaign staff. They include:

  • John-Henry Heckendorn, campaign manager, founder, Ship Creek Group
  • Paula DeLaiarro, treasurer and principal at Ship Creek Group
  • Lindsay Hobson, spokesperson and daughter of governor
  • Kevin McGowan, fundraising director
  • Joshua Corbett, creative director and principal at Ship Creek Group
  • Bob Walker, sign manager and brother of governor

Unemployment still sticking it to Alaska economy

Suzanne Downing
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Unemployment still sticking it to Alaska economy

U.S. unemployment dropped to 3.9 percent last month, well within the range considered to be full employment by federal agencies that monitor such data.

But the Alaska job market is still in the doldrums, with unemployment the highest in the nation at 7.3 percent, even while  nearly 9,000 people left in the last year.

A year ago in April, Alaska’s unemployment rate was 6.6 percent.

The national economy added 164,000 jobs in April, according to the Labor Department, on top of the 135,000 jobs added a month earlier, and private sector earnings in the country increased by 2.6 percent year over year.

Workers also took more home in their paychecks due to federal tax cuts passed by Congress and signed into law by President Donald Trump. For someone making $50,000 a year, they were able to keep an additional $1,440 per year, typically.

In Alaska, March was the 29th consecutive month of job losses recorded by the State Department of Labor and Workforce Development. Wages dropped 4.7 percent.

Some 26,400 Alaskans are considered to be unemployed in a civilian workforce that is estimated at 363,000 by the federal Bureau of Labor Statistics. One out of five jobs in Alaska is a government job, for a total of more than 81,000 Alaskans working for local, state, or federal agencies.

A bright spot for the employment scene is the marijuana industry, which grew its workforce to 536 by December of 2017. As Alaska heads into its growing season, it may continue to be the “growth” sector for the state’s economy. And it’s just in time for all those college students who are heading home and looking for that summer job.

Monthly jobs in the marijuana industry in Alaska (from the Department of Labor and Workforce Development.)

READERS WEIGH IN

After three years of persistent job losses in Alaska, what do you think Alaskans should do to take control of their economy and grow jobs again? Add your ideas — big and small — in the comment section.

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