“This area is a food desert.”
– Anchorage Mayor Ethan Berkowitz at a Scenic Foothills Community Council meeting on Oct. 5. Berkowitz was making the case for a grocery store-office park planned development planned for Elmore Blvd. and Tudor Road. The site is a current transportation facility for school buses, which the municipality is trying to move. Residents at the meeting told him that food is readily available and that everyone knows where the grocery stores are in Anchorage.
Alaska Public Media may not have gotten it quite right, says the Pebble Limited Partnership in a response issued today to a news report.
Pebble CEO Tom Collier released the following statement regarding Governor Walker’s position, which was reported by Alaska Public Media earlier this week as “doubling down” on his opposition to the Pebble Mine:
“We have long stated that our mine must co-exist with the salmon fishery in Bristol Bay or we should not receive a permit to develop it. This week, Governor Walker elaborated on his position regarding Pebble and stated that we have a high burden in convincing him that Pebble should go forward. The Governor is correct. He should be skeptical, ask hard questions of us, and allow the permitting agencies to do their work.
“Governor Walker specifically said he did not have sufficient information for him to be comfortable or supportive of Pebble. He emphasized the burden was on us to prove the project can be done without a risk to the fish in that area. He went on to say it is a high burden that we have not yet met.
“And he is correct.
“The next step is for Pebble to file a comprehensive plan with the state and federal regulatory agencies and for them to do their work. This agency review should be done without prejudging our work either in support or in opposition. As the head of Alaska’s executive branch in charge of these reviews, Governor Walker’s position is well stated.
“Alaska Public Radio portrayed this appropriate skepticism by the governor as doubling down on his opposition to Pebble, a misleading and incorrect portrayal of his position that remains uncorrected.
“The Alaska mining community knows Governor Walker supports mining. We also know he supports fishing. And above all we know he supports a fair process for projects that could contribute to growing Alaska’s economy, providing new jobs, and contributing to local and state government revenue.”
The Pebble Partnership presented the concepts for its proposed mine during a Resource Development Council meeting earlier this week. Before that, the governor made his remarks showing his strong doubts about the project.
The governor did not issue a response contradicting the Alaska Public Media report.
But his statement to the reporter this week before he even reviewed the new plan was nearly the same statement reported by Alaska Journal of Commerce three years ago: “Based on what I know at this point I’m not in favor of Pebble,” Walker said on Oct. 10, 2014.
A sitting governor has an advantage in a re-election campaign. But never has a sitting Alaska governor had such an advantage as this one has.
Gov. Bill Walker’s campaign adviser and special assistant John-Henry Heckendorn is the latest name to be listed as a deputy treasurer for the Walker-Mallott ticket, along with Scott Kendall, the governor’s chief of staff and several others on the official roster of the Governor’s Office.
Both Heckendorn and Kendall were hired within the last year by the Office of the Governor. The only significant experience either one of them has had is running campaigns. Kendall, now as chief of staff, is suddenly running the entire state. He came fresh off the Lisa Murkowski re-election campaign, but has no real policy experience.
Heckendorn, who founded the Ship Creek Group, was hired by Walker in January. He left the company he founded on Jan. 30, but no one outside Ship Creek Group knows if those ties are actually severed or just swept under the carpet. His cofounders have picked up his 52 percent ownership.
The breadcrumb trail shows direct connections between the Office of the Governor, the Ship Creek Group, and the Walker-Mallott campaign.The treasurer for the Walker-Mallott campaign is Paula DeLaiarro, a principal of the Ship Creek Group. Another deputy treasurer is Shea Siegert, who was with the Ship Creek Group, where he picked up the campaign of Palmer District 11 Rep. DeLena Johnson. Siegert then went to work for Johnson as a legislative research assistant after her election. Correspondence relating to fundraisers for Walker has shown up with his name attached and he is still listed as Johnson’s staff member in the State employee directory, although he has left to work on the Walker campaign. His 2016 filing with the Alaska Public Offices Commission showed his home address as the same as Democrat Sen. Minority Leader Berta Gardner.
In the political world, this is what is called embedding. The Ship Creek Group is handling the day-to-day campaign for Walker-Mallott, and Heckendorn is being paid by the public treasury at the cost of at least $100,000 a year to run the Walker campaign as he stands to the side of Walker at every official event.
“This is classic corruption,” said Steve Strait, an Anchorage media professional. “We’re ranked as the seventh most corrupt state out of 50, and this is an example of that.”
On the Ship Creek Group web site, a disclaimer has recently been posted to clarify the relationship between the company and its founder:
“Note: Founder and former Projects Director John-Henry Heckendorn is currently serving as Special Assistant to Alaska Governor Bill Walker, and is not active in SCG projects or operations. Additionally, SCG wishes to recognize the exemplary work of our 2016 election cycle staff: Genevieve Mina, Jillian Banner, Max Neale, Mark Simon, Peter Heckendorn, and Shea Siegert.”
Heckendorn has, however, been recently overheard telling Alaskans he is leading the Walker-Mallott re-election strategy.
Heckendorn’s photograph is still on the Ship Creek Group’s web site under the “About” tab, which also credits him for the company’s “break the mold” model.
He has also been featured by the dark-money Lottsfeldt Strategies group as in the talent pool of Jim Lottsfeldt, who ran an independently funded campaign to get Walker elected in 2014 and who owns and operates the political blog MidnightSunAk.
August was the 23rd consecutive month of job losses in Alaska, according to the Alaska Department of Labor. Employment opportunities slid another 1.4 percent from a year ago, with the North Slope losing the most jobs year over year — 4.9 percent of the jobs in the far north evaporated. Those are oil patch jobs.
The economic tea leaves, from declining home prices to the meager number of new car imports, tell Alaskans that September will make 24 months in a row of tough job hunting conditions.
But Alaska’s downward slide may be close to the bottom. In the 1980s, during the last big Alaska recession, Alaska had 25 straight months of employment decline, according to the Department of Labor.
In August of 1986, however, unemployment reached an alarming 11 percent. In August of this year, unemployment was 7.2 percent. Nationwide, unemployment is a low 4.4 percent.
While Alaska continues to have the highest unemployment rate in the nation, North Dakota is the place to go for job seekers, with just 2.3 percent of the workforce unemployed.
The unemployment rate in Alaska is hard to gauge because many people leave the state for greener pastures when jobs are scarce, and they are not considered in the overall unemployment count.
In fact, between 2015 and 2016, more than 4,200 people left the state, according to the Labor report. Due to births, the population grew by .4 percent, but school enrollment has dropped or flattened. Population estimates for 2017 will be released in January.
In other economic indicators, personal bankruptcies in Alaska increased by 20 percent from August 2016 to August 2017. Initial filings for unemployment are down 20 percent year over year, to 4,603, according to the report, indicating the downward trend is leveling off.
While Alaska’s downward economic trends may be showing signs of leveling off, some economic and business observers caution against assuming the pattern of the late 1980s will repeat itself. There are many differences between then and now.
Business leaders in the telecommunications, transportation and resource development sectors point to the massive state fiscal gap we are facing today, which policymakers have been unable to close. Combined with the steady drumbeat of new tax proposals coming out of the Walker Administration, new business investment in Alaska — hundreds of millions if not billions — remains on the sidelines until the fiscal environment stabilizes.
Joel Clement was among the first three dozen to be reassigned in the Department of Interior after Donald Trump became president. Clement was considered part of the “swamp” that was obstructing progress in the nation; he was not aligned with what the president had promised the nation.
Clement was reassigned from being a climate change expert to counting money coming into the Interior Department from oil royalties.
He complained. Loudly and publicly. He threatened.
After all, Clement was part of the Senior Executive Service, a class of federal workers who are hard to fire. Many of them end up feeling entitled to the jobs they have. These are federal workers who also can’t be fired without cause, and they have union protection.
Reassigning members of what is known as the SES had to wait, by law, until Interior Secretary Ryan Zinke had been in office for 120 days. Clement and 35 other Interior officials were reassigned on June 28 — 120 days to the day.
This week, Clement had enough of bean counting. He quit his federal job, and sent his blistering resignation letter to the Huffington Post. In it, he calls out Zinke and Trump for “poor leadership” and continues to threaten to make their lives miserable.
“Retaliating against civil servants for raising health and safety concerns is unlawful, but there are many items to add to your resume of failure,” Clement blasted in his letter Zinke, a letter any future potential employer might want to review.
Those failures, Clement said, include “muzzling scientists and policy experts,” conducting an “arbitrary and sloppy review of our treasured National Monuments,” and for altering an Obama-Jewell-era plan for the conserving the greater sage grouse.
“Secretary Zinke, your agenda profoundly undermines the [Interior Department’s] mission and betrays the American people,” wrote Clement, who had worked for Interior seven years. He ended his letter by encouraging Interior Department employees to “resist when necessary.”
KIDS, DON’T TRY THIS AT HOME
Clement’s letter, shown below, is a textbook case of what not to do when leaving a job — and is a good indication of why he was not seen as a good fit for the Zinke team:
Secretary Zinke: It is well known that you, Deputy Secretary David Bernhardt, and President Trump are shackled to special interests such as oil, gas, and mining. You are unwilling to lead on climate change, and cannot be trusted with our nation’s natural resources. – Joel Clement
The Pebble Mine is smaller, won’t use cyanide, will have no waste rock piles, will have super-safe soil liners, and will impact one fewer drainages that flow toward Bristol Bay.
There will be no mine facilities in the upper Talarik drainage, which was an area of concern for the Environmental Protection Agency in years past.
The current plan for the mine itself is 5.4 square miles, with a total footprint of 12.7 miles, which includes mining facilities and all else associated with the project, which is larger than Alaska’s Fort Knox mine but smaller than the proposed Donlin Mine.
The Environmental Protection Agency had projected that the previous plan was over 13 square miles for the mine itself, although no plan had ever been allowed to be submitted by the agency, which took a dim view of any mine in the area.
To compare, the Ted Stevens International Airport is 7.2 square miles.
The Pebble Limited Partnership says the footprint of the plan is very close to the size that EPA has previously said would be acceptable.
In a presentation this morning in Anchorage, company CEO Tom Collier said the tailing dam, which is described by the company as a type of engineered land mass more than an actual dam, is designed to withstand the greatest possible seismicity predicted by science.
Without cyanide for secondary treatment of the ore, this means the company will go after the less expensive gold, and leave the rest in the ground.
The company also has a plan to expand the partnership by sharing revenue with the people who live in the region through a new corporate entity that would be created. Five percent of the profit would go to that entity, which would be owned 50-50 by local Native village corporations and local residents. The new company includes five local village corporations that would receive an estimated $500,000 per year each.
The approximately 5,000 local residents would get a windfall payment of $500 per year, the company estimates, which would supplement any distributions they might receive directly from their regional or village Native corporations.
As an apparent gesture of goodwill, the company is also saying it will help the people of the region buy back salmon driftnet permits, most of which are owned primarily by people and companies outside the state.
Pebble will also perform business mentoring with village corporations to help them compete for construction and operating contracts associated with the mine. The contracts are worth hundreds of millions of dollars, the company says.
What the company could not do this week is get Gov. Bill Walker to hold back his advance judgment of the plan before it was even presented in its conceptual state.
Walker went on record with Alaska Public Media earlier this week saying he doesn’t support the Pebble Mine, even though he hadn’t seen the plan yet.
Walker, who once had a “wait-and-see” view on mining in Western Alaska, made a deal with the Alaska Democratic Party to run as a nonpartisan candidate with ADP’s support. In exchange for the party withdrawing its own elected Democratic nominee, Walker had to make promises. One was to oppose the proposed Pebble Mine.
“I am not supportive of the Pebble Mine,” Walker told the reporter this week, prior to the Pebble Partnership plan’s official “reveal,” although PLP reportedly had briefed the governor privately.
Walker said the Pebble Partnership had not yet proven to him that the project would not harm the salmon fishery at Bristol Bay.
“I do not have information sufficient for me to be comfortable or supportive of the Pebble Mine. The burden is on them to prove that it can be done without a risk to the fish in that area. It’s a high burden – it’s the highest burden, and to me, they have not met that yet,” Walker said.
Walker ran on a pro-job platform that included ads of him operating a gravel-loader, such as this one that was released just a couple of days before he created a “Unity” ticket with the Alaska Democratic Party.
Mike Heatwole, spokesman for Pebble, said that “high burden” is what the permitting process is for: “The governor is correct that the burden is on us to demonstrate we will not impact the fish resource in the region. While we believe our plan meets this hurdle, the next step is to have our plan thoroughly and objectively evaluated via the permitting process to determine if we meet the high standards Alaskans expect for development.”
Tom Collier, the CEO, echoed Heatwole’s comments in response to a question at a Fairbanks forum later that day.
In May, the EPA reached a legal settlement with the Pebble Partnership, after the Obama Administration had scuttled the project before the company had even had a chance to present it for permitting.
[Read: Battle-tested Pebble CEO earned his chops as Clinton Interior official]
Under the Trump Administration, Pebble is being allowed to undergo the rigorous federal environmental review process. But the company must also get state permits before it can begin construction.
With Walker prejudging the project, is there space for him get behind it in the end if it does indeed meet his “high burden” of proof?
Gov. Bill Walker on Wednesday said the State of Alaska will do everything in “our power to protect Alaska’s State rights.”
He was referring narrowly to State rights. Walker expressed frustration with the Ninth Circuit Court of Appeals decision in what is now a legendary hunting access case in Alaska that has gone on for more than a decade.
The court decision was so stunning in its overreach that even Alaska’s usually appeasing governor had to object to the newly expanded federal authority over the State’s navigable waters that run in and around national parks and refuges in Interior Alaska.
There’s not all that much that Walker can do, however. He could file a friend-of-the-court brief when Sturgeon once again goes back to the U.S. Supreme Court for relief from the U.S. Park Service, which Sturgeon most certainly will.
The State can’t take over the case, or pay for the case, or even join the case, even though Alaska has a dog in the fight because if Sturgeon can’t freely navigate the rivers of the Yukon-Charley Rivers National Preserve, then neither can the rest of us.
Walker’s Facebook pronouncement came after the Ninth Circuit ruling had been digested a bit and Alaska’s outdoor access community began to realize how much it impacts every hunter, fisherman, Native corporation, land owner, and even Alaska’s very state sovereignty.
The Ninth had not only emboldened federal overreach over an expanded swath of Alaska, and it also opened up the door on a controversial case known as “Katie John 1.” The ruling said that “Katie John 1” relied on the wrong set of laws, but since it had done so, the Sturgeon case would reflect that ruling.
It all started when hunter and outdoorsman Sturgeon attempted to used his hovercraft to access hunting grounds in Alaska in 2007.
Sturgeon assumed, as many had for decades before him, that navigable waters in Alaska are governed by the State, even though they run through federal land. That was part of the deal with the Alaska National Interest Lands Conservation Act signed by President Jimmy Carter in 1980.
BACKGROUND ON ANILCA
Congress struck a deal when it passed ANILCA and added 104 million acres to national parks, refuges, and wilderness.
Sen. Ted Stevens and Congressman Don Young had spent four years fighting for the rights of Native corporations and the State of Alaska to have economic and cultural opportunity on the lands acquired at Statehood and under the Alaska Native Claims Settlement Act.
ANILCA wasn’t perfect, but with Stevens’ and Young’s help, Congress at least had excluded navigable waterways from the 1980 ANILCA provisions.
But in 1996, the National Park Service adopted a regulation that gave it the authority to regulate activities on state waterways across the nation. They started using this authority in Alaska in spite of ANILCA’s “Alaska exception.”
Fast forward to 2007, when Sturgeon was stopped by the Park Service from using the Nations River as a water highway to hunting grounds. He sued the Park Service and lost in the Ninth Circuit Court, which said that federal regulations can be applied to all lands within the “exterior” boundaries of the parks.
Sturgeon appealed to the U.S. Supreme Court. They took the case.
The Supreme Court sided with Sturgeon unanimously, and said “Alaska is different.” But the high court remanded the case back to the Ninth Circuit so it could review its work, which the justices said was wanting.
The Ninth Circuit this week thumbed its nose at the Supreme Court and expanded federal authority to not only include Native corporation-owned and state-owned lands and waters within the boundaries of national parks in Alaska, but also on waterways outside of national parks and refuges.
The decision would affect abilities of Native corporations to establish commercial developments on their lands and the ability of the State to manage its lands as well as lands the State conveys to municipalities and individual Alaskans.
This is contrary to what ANILCA intended and what Congress promised 37 years ago.
KATIE JOHN CASE RAISES ITS HEAD?
The Ninth Circuit court based this expansion on a ruling the it made in what is known as “Katie John I.” In that lawsuit, the definition of “public lands” in ANILCA includes state waterways so that the subsistence laws applying to federal lands could be applied to state waterways.
That case languished without being taken further when Gov. Tony Knowles refused to defend state sovereignty back in the 1990s. Although Gov. Sean Parnell sought to clarify provisions of Katie John, Gov. Bill Walker walked away from it.
The ruling this week expanded federal authority. But in making its decision, the three-judge panel on the Ninth also implied that its own ruling on the Katie John decision was flawed because it was based on the United States Reserved Water Rights Act, rather on what it now says is more proper: The Commerce Clause.
That ruling may open the door to a future challenge or clarification of the Katie John decision, which gives the federal government control over Native subsistence hunting and fishing on navigable waters owned by the State, when those waters are adjacent to or inside of federal land holdings.
Katie John was an Athabascan elder who had sought to continue fishing along the Copper River, as her people had always done. Her case was meant to clean up a contradiction between federal law and the Alaska constitution. Federal law gives subsistence priority to rural Alaskans, while the state consitution gives equal access to resources.
As for John Sturgeon, he has a few days to decide on whether he’ll appeal to the U.S. Supreme Court once again. So far, his case has cost $750,000.
“I wish it was called an income tax, because that’s really what it is.”
– Sen. Dennis Egan, remarking on Gov. Bill Walker’s “payroll tax,” which the Legislature will consider during the fourth special session called by the governor this year to try to enact new taxes on Alaskans. Egan was talking on KINY radio’s Action Line on Tuesday, Oct. 3.
Is Alaska seafood propping up the nuclear ambitions of North Korea’s Kim Jong Un?
According to a new report by the Associated Press, that is likely the case, as labor from North Korea is pervasive in the Chinese factories processing salmon and crab from the Northwest. That workforce has its wages largely skimmed off by the North Korean government. Forced labor is an important source of hard currency for the regime.
Because of the secrecy surrounding the labor force in the Chinese city bordering North Korea where seafood processing plants are located, the team of reporters were only able to partially verify that North Korean workers are, indeed, in the workforce.
Reporters observed portraits of North Korean leaders on worker dormitory walls, examined passports, identified the distinct accents of North Koreans, and interviewed numerous business persons in the Chinese city of Hunchun, on the border of North Korea.
The possibility of North Korean labor in the fisheries supply chain worries John Connelly, president of the National Fisheries Institute, enough that he is urging all of his associated companies to re-examine their supply chains “to ensure that wages go to the workers, and are not siphoned off to support a dangerous dictator.”
Of course, there would be no way a midsized company in Alaska could ever determine that North Koreans were picking bones out of pink salmon.
Facing growing imports of farmed seafood, Northwest processors have increasingly been shipping frozen, wild-caught Alaska salmon and Dungeness crab to China for processing. It returns to the U.S., Japan, or Europe and is purchased by consumers shopping the frozen section of grocery aisles.
How much Alaska seafood is being processed in China is hard to pin down, as Craig Medred explains.
Trident, for example, ships about 30 million pounds of its 1.2 billion-pound annual harvest to China for processing, which drives labor costs down by 80 percent.
NORTH KOREANS LABOR CONDITIONS IN CHINA
According to Radio Free Asia, North Korean workers sent to China are being forced to labor in unsafe conditions and are frequently deprived of part or all of their pay.
As many as 1,000 North Koreans work at a factory in Hunchun city in the “Yanbian Korean Autonomous Prefecture” in northeastern China’s Jilin province, the site reported two years ago.
Radio Free Asia, for which Sec. of State Rex Tillerson serves as a board member, reported that workers are not allowed to keep most of their salaries, but are given leftover seafood that they can take back to North Korea and sell, which provides them a source of income.
North Korean labor at the processing factories are giving over anywhere from half to 70 percent of their paychecks to the North Korean government, with workers making as little as $90 per month — or roughly 46 cents per hour for 12-hour days. Workers typically get one day off a week, according to Radio Free Asia.
“At some factories, laborers work hunched over tables as North Korean political slogans are blasted from waist-high loudspeakers,” the Associated Press reports.
AP named three seafood processors that employ North Koreans and export to the U.S.: Joint venture Hunchun Dongyang Seafood Industry & Trade Co. Ltd. & Hunchun Pagoda Industry Co. Ltd. distributed globally by Ocean One Enterprise; Yantai Dachen Hunchun Seafood Products, and Yanbian Shenghai Industry & Trade Co. Ltd.
The website for Ocean One says it mainly processes frozen and smoked salmon from Alaska and Hokkaido, Japan; squid from China and Argentina; cod and yellowfin sole from Alaska; and red fish from the North Atlantic.
In 2002 and 2001, Hunchun Export Processing Zone and Huichun Sino-Russia Trade Zone was established in Hunchun, which is strategically located between China, Russia and North Korea. The city’s focus is on seafood processing, electronic product manufacture, bio-pharmacy, and textiles.
China is Alaska’s largest seafood export market, accounting for 35 percent of tonnage and 27 percent of export value in 2015, according to a McDowell Group report.
The organization estimates that 80 to 90 percent of the exports to China are to processing factories that re-export the product to global markets.
“Most of Alaska’s exports to China consists of frozen H&G (headed/gutted) fish, which are then filleted in China where labor costs are considerably lower,” the report stated.
Alaska exported $1.2 billion in seafood, minerals, oil and other products to China in 2016, a quarter of the state’s exports.
GOVERNOR WALKER COURTS CHINA
Earlier this year, Gov. Bill Walker courted the Chinese government both in Alaska, and through a week-long junket that First Lady Donna Walker and her daughter and daughter-in-law took to China, fully funded by the Chinese government.
In September, Walker and an entourage of several from his administration traveled to China to market Alaska natural gas that Walker hopes will soon flow down a gas line he hopes to build, estimated to cost between $40-60 billion. Walker has made the gas line the cornerstone of his agenda as governor.
