Page 1662 – Must Read Alaska

Quintillion CEO out, new one in, as project nears completion

The 907

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August 4, 2017

The Anchorage-based company laying 1,800 kilometers of fiber optic cable under the sea and across the top of Alaska, as well as a terrestrial link down the Dalton Highway, has named George M. Tronsrue III as its interim CEO, effective immediately.

That means former CEO Elizabeth Pierce is out, also immediately. Pierce has been with the company since 2012. Before that, she was with Alaska Communications System.

Quintillion is described as a “middle-mile telecommunications company” that develops, constructs, and operates fiber optic infrastructure, offering wholesale high-speed Internet services for carriers through fiber optic cables. The company incorporated in 2012 and is headquartered in Anchorage, Alaska.

The company recently reported that the extensive subsea cable installed last summer, which included miles of subsea fiber into Nome, Kotzebue, Utqiagvik (Barrow), Point Hope and Wainwright, Alaska, is secure in the testing phase.

“The Quintillion network management team is monitoring the system 24/7 and is pleased with the performance of the system. Quintillion looks forward to completing the burial work on its Subsea Fiber Optic Cable System this summer and is on schedule to deliver wholesale capacity service later in 2017,” the company wrote.

“Quintillion’s fiber optic network will operate at the speed of light and offers wholesale capacity rates at 50-90% less than existing wholesale backhaul over satellite or microwave. Remote Alaskan communities are in serious need of true broadband and Quintillion is excited to bring lower-cost, world-class connectivity to the North American Arctic…”

WHO IS GEORGE TRONSRUE?

George Tronsrue III has decades of sales and  operational experience in wireless, fiber optic and telecom infrastructure in over 70 major U.S. markets, according to a press release from Quintillion. He has held executive leadership roles at Monet Mobile Networks, the first commercial 3 G data company in the world, and with leading public and private Competitive Local Exchange Carriers (CLEC’s), including XO/Nextlink Communications.

A graduate of the U.S. Military Academy and retired Army captain, he has served as CEO for MainNerve Federal Services, Inc., which he founded, and as chairman and CEO for Telseon Inc. He is the co-founder, and CEO of ICEntertainment.

Tronsrue co-founded the Jericho Fund, LLC, and served as its president and manager. At a company called e.spire, Mr. Tronsrue built and managed the first eight cable TV joint ventures at Teleport Communications Group, and was part of the initial senior management team at MFS Communications. He has a Bachelor of Science, Applied Sciences and Engineering.

COMPANY GROWING FORCE IN ALASKA

Quintillion started with the multi-million dollar investment of the Ukranian-born financier Leonard Blavatnik, now a U.S. citizen, and has since attracted two main Alaska-based corporate partners: ACS (Alaska Communication Services) and ASRC (Arctic Slope Regional Corporation). The project is a subsea cable that will stretch through the Arctic, from Japan to London. It will have five off-take points for Alaska communities — Nome, Kotzebue, Point Hope, Wainwright, and Barrow.

Blavatnik owns Warner Music and a multitude of other businesses. He made millions in the Russian oil industry after the break up of the Soviet Union, and has associates who have been tied to the Russian underworld. BP’s former President John Browne mentions him in his memoir, Beyond Business: An Inspirational Memoir From a Visionary Leader, as does Tom Bower, in his book, Oil: Money, Politics, and Power in the 21st Century.

[Read: Who is Len Blavatnik and why is the governor helping him?]

The majority owner of Quintillion is Cooper Investment Partners, whose CEO, Stephen Cooper, is also the CEO of Warner Music. Cooper is also related, at least historically, to the Carlyle Group, whose CEO, David Rubenstein is the husband of the publisher of the Alaska Dispatch News, Alice Rogoff.

Cooper’s previous management experience includes Enron and Krispy Kreme. Cooper was hired by Carlyle to help turn around Hawaii Telecom, a Carlyle property formed in 2005. The venture eventually filed for bankruptcy and was reorganized.

The stakes in the telecommunications sector are high, the regulatory requirements are complicated, and the financial relationships are not always discernible. But no reason was given for Pierce’s departure at a time when the Alaska Phase 1 section of the project is said to be ready to become operational and ready to deliver high speed service along the wild north and northwestern coastline of Alaska, home to just a few thousand hearty, internet-starved Alaskans.

*This story has been updated to reflect that Blavatnik is Ukranian born, but a U.S. citizen.

Lynn Gattis files for lieutenant governor

Suzanne Downing

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August 4, 2017

6

Former Rep. Lynn Gattis filed a letter of intent to run for lieutenant governor on Aug. 3.

Gattis grew up homesteading in the Gulkana area and attended the University of Alaska, where she earned her bachelor’s degree in aviation technology. She has worked for several aviation companies around the state and is a pilot. Until recently, she grew hay on her farm outside of Wasilla and has run her own businesses.

Gattis, a Republican, moved to the Mat-Su Valley over 25 years ago. Before being elected to the Alaska House of Representatives in 2012, she was elected to the Mat-Su School Board, served on the Goose Creek Citizens Advisory Board, worked on the Pt. Mackenzie Comprehensive Plan, and was named to the Alaska Transportation Council. She has also been active in the Boy Scouts, supporting scouting endeavors for many years.

While in the Legislature, she served as Chair of the House Education Committee, Co-Chair of the Mat-Su Valley Delegation, and as a member of the Transportation, Fisheries, State Affairs, and Economic Development & Tourism Committees. She also served as Co-Chair of the Statewide Sustainable Education Task Force and was appointed as a member of the Education Commission of the States.

Gattis says she’s been talking with people from around the state and forming her thoughts on what kind of lieutenant governor can best serve Alaska.

“I think leadership is needed, and the elections are certainly an important part of the job. I’ve talked to city clerks from around the state, some of whom I’ve known for almost my entire life, and they say we have problems with some of our election machines, that we’re going to have a meltdown if we don’t address that. I also think being an ambassador for our economic growth is important, especially because we’re at a crossroads. And of course I would be supporting the governor as this state moves forward.”

Gattis, who lost to David Wilson in 2016 when they both ran for the Senate seat that Sen. Charlie Huggins vacated, has identified a campaign manager and has her core team working on the foundations of a statewide campaign.

Earlier this week, Republican Sen. Gary Stevens of Kodiak was the first to file for lieutenant governor. The primary is Aug. 21, 2018.

Heads and Tails: Murkowski, Zinke make up; Meyer mulls run for LG

Suzanne Downing

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August 4, 2017

1

*Sec. of Interior Ryan Zinke and Sen. Lisa Murkowski chose an ice cold Alaskan Big Mountain Pale Ale to refresh their relationship.*

MAKE-UP BREW: Secretary of the Interior Ryan Zinke took a photo of himself and Sen. Lisa Murkowski sharing a beer and being convivial. Evidently the two mended fences after their political dust-up over Obamacare repeal last month.

Murkowski’s vote on health care drew the ire of President Trump, who charged that the senator, chair of the Senate Energy and Natural Resources Committee, had let the country and Alaska down.

After her Obamacare vote, Zinke called Murkowski and Sen. Dan Sullivan and advised that health care was the president’s priority, and all Alaska-centric projects would be taking a back seat.

KEVIN MEYER MULLING LG RUN: Senate Rules Chair (and former Senate President) Kevin Meyer is said to be considering a run for lieutenant governor. And why not? In addition to Rules, Finance, Senate Majority Leader and President, he’s somewhat of a household name, at least in the Railbelt and Juneau.

So far, it appears he is just talking to potential key supporters and will not decide until after Labor Day. Sen. Gary Stevens of Kodiak has already announced he is running.

If Meyer runs, that leaves his South Anchorage Senate seat open. Either Rep. Charisse Millett or Rep. Chris Birch are the likely candidates for that spot.

WALKER-MALLOT MAKE IT OFFICIAL ON KINY RADIO: “We have both decided that we will run again,” Mallott told KINY’s Pete Carran on Wednesday’s talk radio show.

“You never say that in an absolute term because we have no idea what will occur,” he said, but when asked directly if they’d made up their minds, Mallott said “Yes.”

Walker is a former Republican who left the party, ditched his running mate, and worked with the Alaska Democratic Party to win the governorship in 2014. Mallott was a Democrat who ran for governor, but then ditched his running mate and became Walker’s running mate, with the encouragement of the AFL-CIO and Alaska Democrats. In turn, his policies have been well aligned with those left-of-center backers.

The only Republicans to have filed for governor are Sen. Michael Dunleavy of Wasilla and Michael Sheldon of Petersburg.

GOV. JUSTICE, GOP: Democrats have been unravelled at the state and local level across the nation. Tonight, Gov. Jim Justice of West Virginia just made it worse by announcing he will switch to the Republican Party on Friday. He is the first governor to switch from Democrat to Republican in over 25 years.

Republicans hold a record-high number of governors offices (34), and Democrats have a record low (15). Republicans control both the governors’ mansions and state legislatures in 26 states. Democrats control both in just 6 states.

Justice announced the pending change Thursday in a surprise appearance with President Donald Trump in Huntington, West Virginia.

“Today, I will tell you, with lots of prayers and lots of thinking, I can’t help you anymore being a Democrat governor,” Justice said. “So tomorrow, I will be changing my registration to Republican.

UTAH DEFENDS HISTORICAL TRAILS AND ROADS: Unlike the Walker Administration in Alaska, which is negotiating away Alaskans’ access rights to Klutina Lake and other areas in Alaska, Utah is fighting for public access on historic roads and byways.

The State of Utah and most of its counties have filed 22 lawsuits in federal court seeking judicial determinations of their rights to use some 12,000 roads and trails.

The Utah Attorney General’s Office gives a clear and concise explanation of the importance of defending the access to land.

It applies to Alaska. Someone might find it worthy to forward to the Alaska Attorney General, who has chosen to negotiate access on a case by case basis with tribes. The public comment period on the Walker Administration’s Klutina access plan ends Aug. 30.

[Read: Governor rolls over on access to Klutina Lake]

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In Alaska, it’s unions vs. workers in the private economy

Suzanne Downing

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August 3, 2017

2

**Union made:** Alaska Governor Bill Walker, and AFL-CIO Alaska President Vince Beltrami pose in this 2015 AFL-CIO photo. The union supported Walker, who has shut down private sector union jobs in favor of public employee unions. Unions supported Beltrami’s bid for state senate with dues converted to campaign contributions through a political action committee.

It’s been a tough few years for unions in Alaska. The dues have been siphoned off by bad actors. Membership is dropping. Unions backed a governor who caters to the green lobby and won’t build anything.

UNION DUES GO TO GAMBLING, BOOZE, MOM & MORE

Jeffrey Davies, former president of American Federation of Government Employees Local 183 (railroad), was sentenced last month in Anchorage federal court to serve one year in prison and three years on parole for embezzling $92,000 in union funds between 2011 and 2014. He will also have to pay restitution of $92,766.

Ann Reddig, former secretary and treasurer of the International Alliance of Theatrical Stage Employees Local 918 in Anchorage, was charged with embezzling more than $193,000 in union funds, plus a count of forgery.

Reddig is known in the Alaska theatrical scene. During the years when Alaska paid tax credits for filmmakers to use Alaska as a location, the little union that could grew from a few dozen stage hands to as many as 84. Reddig is accused of helping herself to the dues. With fewer than 50 members and about $45,000 in dues each year, the theft just about broke the union’s back.

Then-union President Richard Benavides* noticed that his signature appeared on checks he didn’t remember signing, and that they were written out to people like Reddig’s mother — who had no connection to the union.

That’s when Benavides contacted U.S. Department of Labor, which conducted an investigation and concluded that Reddig was on the take.

Reddig was arraigned in U.S. District Court on July 13. She was released, with conditions, pending her trial.

In 2015, another former union secretary was sentenced in federal court in Juneau for embezzling funds from Carpenters Local Union 2247.

Jonathan H. Smith, 42, of Juneau, was given five years of probation, four months of that in community confinement, 250 hours of community work service, and restitution of $41,770.47.

Between June 2006 and May 2012, Smith held the post of financial secretary for the labor union, representing approximately 150 members. An elected volunteer, he deposited dues in the union’s bank account, paid bills, and managed the day-to-day business of the union. Smith was also working as the Alaska Regional Council of Carpenters’ business agent, earning between $66,000 to $93,000. With his five-year streak of embezzling, he padded his lifestyle comfortably, with ATM withdrawals, bar tabs, restaurant meals, booze and shopping, as well as gambling in casinos in Las Vegas and Washington state.

In 2010, Kevin McGee was sentenced for misuse of union funds when he was president of the American Federation of Government Employees Local 3028. He double billed for travel and then tried to cover his tracks. McGee was given probation and had to pay restitution. Today he is the president of the Anchorage chapter of the National Association for the Advancement of Colored People.

Between the four cases mentioned here, about $330,000 in union funds were embezzled from 2010 through 2015. That we know about.

UNIONS WASTED MONEY ON ANTI-PROGRESS CANDIDATES

With all the stealing going on, it’s no wonder that union membership is on the decline in Alaska, dropping to an all-time low. The Federal Bureau of Labor and Statistics released data in February showing that the union workforce is now just 18 percent of all Alaska workers, including government employee unions.

But even more stunning than the thefts are the amounts that unions have spent getting Democrats and Indie-Democrats elected. Unions are pouring hundreds of thousands of dollars into candidates that oppose the very projects that put unionized men and women to work in Alaska.

The AFL-CIO dedicated hundreds of thousands of its union dues to electing Gov. Bill Walker in 2014. But in the end, Walker kicked the unions while they were down by not approving shovel-ready projects, such as Juneau Access Project and Knik Arm Crossing. Other than his doomed gas pipeline dream, Gov. Walker has yet to get behind a single major infrastructure project.

Those two projects alone — Juneau Access and Knik Arm — would have employed hundreds of union-paying workers during a time of recession.

Then there’s Laborers’ 341 – Working Families of Alaska PAC, which also went all-in for anti-work Democrats and Indie-Democrats in the 2016 campaign cycle. The WFA-PAC contributions:

Opposed:

$ 2,498.14 – Cathy Giessel
$ 515.00 – Lance Pruitt

Supported:

$ 23,422.56 – Adam Wool
$ 1,500.00 – Bryce Edgmon
$ 17,946.54 – Dan Ortiz
$ 1,500.00 – Gabrielle LeDoux
$ 3,212.50 – Harriet Drummond
$ 37,740.02 – Harry Crawford
$ 3,212.50 – Ivy A Spohnholz
$ 49,598.88 – Jim Colver
$ 2,712.50 – Matt Claman
$ 65,544.20 – Vince Beltrami, AFL-CIO Alaska president who ran a failed campaign against pro-development Sen. Cathy Giessel.

AFL-CIO will have to beef up its credibility with the last remaining stronghold it has: Government workers. State of Alaska employees are about 40 percent union, which gives Beltrami tens of thousands of dollars to work with in union dues each year to elect more anti-development Democrats and kill more construction jobs. And there’s no doubt that’s where Beltrami is heading.

This doesn’t bode well for private-sector union workers, which by next year will see further job losses due to the “study-don’t-build” capital budget just signed by Gov. Walker.

On present trends, with private sector unions hemorrhaging membership as Alaska Democrats drift ever-leftward, the AFL-CIO Alaska chapter may face the need for a name change, to something like the AFGE — the Alaska Federation of Government Employees. Truth-in-labeling advantages would go there.

(*Benavides, well-known in political circles as a longtime legislative aide, died of cancer last month. Burial and services are Aug. 4.)

Heads and Tails: Palin suit awaits judge, Gary Stevens files for lieutenant gov

Suzanne Downing

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August 3, 2017

1

PALIN BEAT: New York federal judge Jed Rakoff said this week he’ll decide this month whether former Alaska governor Sarah Palin’s defamation lawsuit against The New York Times has legs.

Rakoff announced his plans after hearing oral arguments Monday and listening to the lawyers from The Gray Lady ask for dismissal.

The Times is claiming it made an “honest mistake” in an editorial that linked Palin to the 2011 shooting of Rep. Gabby Gifford. Palin had posted an ad that had a crosshairs logo on a few Democratic districts. The newspaper accused her of “inciting a mass shooting at a political event in January 2011.”

“In 2011, Jared Lee Loughner opened fire in a supermarket parking lot, grievously wounding Rep. Gabby Giffords and killing six people, including a 9-year-old girl,” the Times editorial board recently wrote. “At the time, we and others were sharply critical of the heated political rhetoric on the right.

“Before the shooting, Sarah Palin’s political action committee circulated a map that showed the targeted electoral districts of Ms. Giffords and 19 other Democrats under stylized cross hairs.”

The editorial was published a day after House Majority Whip Steve Scalise and four others were shot at a baseball practice in Virginia. The Times issued corrections after a storm of criticism came its way.

NO MAN IS AN ISLAND: Kodiak Republican Sen. Gary Stevens has filed to run for lieutenant governor in 2018, skipping over the “letter of intent” process and filing directly with the Division of Elections.

Stevens has served in the Alaska Legislature for nearly 18 years, and in the Senate since 2004. He was Senate President for four years. He was also mayor of the City of Kodiak and the Kodiak Island Borough.

Stevens told KMXT radio that he’s interested in helping the election process, and may want to explore the viability of mail-in ballots.

Stevens was born in Oregon and moved to Alaska in 1970. He is a retired professor and retired Army officer. His lengthy political chops are posted here.

No other Republicans have filed for the position. Sen. Mike Dunleavy of Wasilla has filed for governor.

THE BOSTON GLIB: The Boston Globe thought it was being cute when it asked: “Is the eclipse throwing shade at Clinton supporters? The path of ideal viewing spots for this month’s highly-anticipated total solar eclipse cuts overwhelmingly through places that voted for President Trump in November.”

“There are about 240 counties roughly along the central path of the eclipse, a 70-mile-wide trail extending across the country where people will be able to see a total eclipse, meaning the sun will appear completely obscured by the moon.

“And about 92 percent of those counties swung in Trump’s favor, while fewer than two dozen counties voted for his opponent, Hillary Clinton.”

Alaskans, clearly living in Trump Country, won’t be able to see the total eclipse on Aug. 21, but the sun will appear dim for a while, starting at 8:21 am on Aug. 21. The eclipse will be in the 45 percent range for much of Alaska. Trump won with 51.3% of the general election vote.

BLUECREST HALTS WORK DUE TO NO TAX CREDIT PAYMENTS: BlueCrest Energy Inc. is putting its Anchor Point Cosmopolitan Project on hold after the State of Alaska decided not to pay cash credits owed to the company.

BlueCrest Energy’s CEO and President Benjamin Johnson broke the news to KTVA on Tuesday.

“Without the money that the state owes us from the tax credit payments, we frankly just can’t continue spending that money that we don’t have in the short-term,” Johnson said.

In June, Caelus Energy put its Smith Bay project on the North Slope on hold because of erratic decisions by Alaska’s government.

BlueCrest Energy drilled its first well last June after being courted by the State of Alaska Department of Revenue under the Parnell Administration. But rather than the $125 million the company expected, the state has paid just $27 million. The project has cost over $400 million in company investment so far.

WHALE PROJECT NAMED FOR BILL OVERSTREET: A sculpture of a humpback whale and the park that surrounds it is now named Mayor Bill Overstreet Park after a former mayor of Juneau who died in 2013.

His widow, Jean Overstreet, was present during Monday’s meeting of the Juneau Assembly when the body voted unanimously in favor of the name.

The whale sculpture was a longtime dream of Overstreet, who headed up the whale committee. The committee raised $600,000 for the park and the city has spent $1.2 million, plus has set aside hundreds of thousands of dollars in legal fees to defend the project against a lawsuit.

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Puerto Rico governor complains to Walker about working conditions

The 907

Suzanne Downing

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August 3, 2017

5

*Puerto Rico Gov. Ricardo Rosselló Nevares hands Alaska Gov. Bill Walker a letter on July 15 outlining complaints about seafood processing jobs in Alaska.*

The job description for a seafood processor for Silver Bay Seafoods is straightforward: You’ll work some 12-18 hours a day during the height of the season.

“The season is short but busy. This job requires working constantly with hands, some heavy lifting, and standing for long periods of time. Employee must work quickly in order to meet production deadlines and shall have the ability to understand and follow instructions and safety rules. The work environment can be very wet, and cold.”

The description goes on from there, but doesn’t improve. This is heavy work, long hours, repetitive motion, fast-moving, dangerous, wet, cold, involving sharp instruments on slippery surfaces, and generally a miserable way to spend a day, if one is to interpret Silver Bay Seafoods’ web page for prospective seafood processor employees.

THE WORK IS HARD BUT THE PAY IS LOW

If the work is tough and slimy, the pay is not something you’ll raise a family on: Minimum wage plus 25 cents, or $10 per hour, and close to $15 for overtime; more for those with experience. Summer only.

So when seafood processors in Bristol Bay couldn’t find workers this summer, and when a record number of salmon hit Bristol Bay nets, it was an embarrassment of riches, and a dearth of willing workers on the slime lines.

The job of “slimer” is a rite of passage for many Alaskans who are now a bit long in the tooth. Even Hillary Clinton came to Alaska one summer to work in a cannery. She washed out after trying to organize workers into a union. College students and Filipinos used to flock to the canneries.

But slime line work has never been a career; it’s been a path to some quick cash and being in an isolated place where you’ll have a chance to save that cash. Few people do it for more than a season or two. The company typically charges you $10 a day for room and board, and you get raingear and boots and gloves to wear. You just need to bring warm clothing.

Maybe you’ll even meet a fishing permit holder and get a job aboard a boat the following year.

Younger Alaskans, and regionally close Alaska Natives, are not signing up for summer slime line jobs, even though unemployment in Alaska averages 6.8 percent.

Americans in general won’t sign up for the work in the numbers needed, especially with low unemployment in the Lower 48. So recruiters go off-shore.

This year, wary of the wisdom of bringing foreigners in on work visas, they recruited in the territory of Puerto Rico, where the unemployment rate is over 11 percent. Some 250 Puerto Ricans came to Bristol Bay to work.

At least three of them returned to Puerto Rico quickly and described the conditions as subhuman, exploitative, and virtual slavery. In other words, just another day on the slime line.

A news story was written in the Puerto Rican daily El Nuevo Dia last month. One complained of persistent backache and hives from the experience:

“The pain in the back I feel even in the bones. I have a severe pain in the area of the kidneys. I got some hives in the body that I never knew where they came from,” the 25-year-old told the newspaper.

Earlier this summer, the man had left his job loading cargo at Luis Muñoz Marín International Airport, where he earned the minimum wage, $7.25 an hour. He headed to Bristol Bay, where he said he’d been promised he would generate $10,000 for up to three months of work.

“The memories of the three Puerto Ricans are full of terror,” the newspaper wrote. “When they remember those days, their voices break, their gazes are far away, their heads drop, or they cover their faces with their hands. “

“We do not want any Puerto Ricans to go through what we go through,”‘ one of the men said.

“Three days in a factory of “zombies.”‘

Peter Pan Seafoods also describes fish processing work as long, arduous, and repetitive: “Working in a fish cannery is not an experience for everyone, and everyone should understand their limitations.”

Anyone who has done it can attest to that — this is not work for the old, infirm, or for someone in poor condition. It’s intense when the fish come in. Everyone gets tired. Foremen get grumpy.

PUERTO RICAN GOVERNOR ESCALATES THE MATTER

But with the complaint from the three Puerto Ricans, Gov. Ricardo Rosselló Nevares, of Puerto Rico arrived in Rhode Island to a meeting of the National Governor’s Association, and confronted the governor of Alaska on July 15.

Nevares handed Gov. Bill Walker a letter asking for an investigation of working conditions at Alaska’s seafood processors, specifically Silver Bay Seafoods. And, politician that he is, he made sure that he was photographed serving notice on Gov. Walker. And as governors do, he published a press release about the event.

“It is alleged that 250 Puerto Rican workers were recruited by this factory and, according to several reports, are working in deplorable and inhuman conditions,” Gov. Nevares said in the letter.

His letter went on to say that if the allegations are true, Silver Bay Seafoods would be in violation of the United States Fair Labor Standards Act, the Occupational Safety and Health Act. And maybe even qualified as a human trafficking operation.

“As the governor of Puerto Rico, I am committed to ensuring the well-being of all residents of the island, including those who move temporarily to other jurisdictions within the United States in search of better opportunities,” the letter stated.

According to Puerto Rican news reports, Gov. Walker thanked Nevares for letting him know, and said he had no knowledge of the situation, but would follow up.

It didn’t take long for Alaska’s own OSHA investigators to show up in Naknek to check it out. Their report won’t be finalized for months, and until then it’s going to be under wraps — and not fish wraps.

But when OSHA shows up, you can bet they will find something wrong, and this could be a tough year for Silver Bay Seafoods, if OSHA decides to fine the group of fishermen that own the company.

The company began in 2007 as a single salmon processing facility in Sitka, but has grown into one of the largest seafood companies in Alaska, with five domestic processing facilities.

“Silver Bay’s primary strength is in its combination of having a state of the art processing plant and favorable logistics to support its operations; competent management and key personnel; an established fish buying system; and ownership by fishermen who represent over 80% of the committed fishing effort,” according to its web site.

Read Alaska Public Media: “State OSHA investigation targets Silver Bay Seafoods in Naknek”

We’ll leave the rest to Craig Medred to explain why Alaska seafood is becoming less competitive in the global market place, with the cost of labor being just one of the issues and farmed salmon now ubiquitous:

[Read Craig Medred: Fish-o-nomics 101

***

DO YOU LIKE GETTING THE OTHER SIDE OF THE STORY? Must Read Alaska is truly crowd-sourced by Alaskans who appreciate an independent view of the news. We welcome your donations, whatever the amount.

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Is now the time for a new Juneau arts, cultural center?

Suzanne Downing

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August 2, 2017

2

By WIN GRUENING
SENIOR CONTRIBUTOR

As community debate continues how best to allocate Juneau’s sales tax dollars, there were necessarily some disappointed people when the City and Borough of Juneau Finance Committee made its final cuts two weeks ago.

Assuming voters renew Juneau’s 1 percent sales tax in October, nearly $47 million should be available over five years for needed projects around our community.

After ranking $120 million in potential requests, funding was limited to rehabilitation of drinking and waste water systems, and facility upgrades and maintenance at our airport, harbors and municipal buildings. Some funds were also allocated to promote affordable housing and recycling initiatives.

Left off the list was money for the new Juneau Arts and Culture Center building — one of the largest potential community projects proposed.

Estimated to cost $26 million, the arts and cultural center’s supporters had asked for $5 million to assist in construction. This is in addition to the $1 million the city had previously provided.

In their deliberations, Assembly members explored and ultimately nixed a staff recommendation to borrow an additional $10 million to allow room for more projects. Finally, a proposal to allocate $1.6 million to the new arts center by raising the hotel bed tax from 7 to 9 percent was debated and passed by a 6-3 vote. Voters will get the final say in October.

IS IT THE RIGHT TIME TO CONSIDER IT?

Arguably, raising this tax makes Juneau more expensive to visit — running counter to ongoing efforts to make the capital more affordable and accessible. While Juneau’s current bed tax is less than Anchorage and Fairbanks, increasing it 2 percent on top of the 5 percent sales tax would result in total taxes of 14 percent on visitor accommodations — one of the highest in the state.

The new arts center, in the planning and design stage for four years, would be a state-of-the-art, 37,000-square-foot facility providing shared event, performance, education and gallery space for Juneau’s arts and cultural community.

To their credit, project sponsors have provided Juneau residents with an extensive outreach effort and professionally prepared presentations to achieve their ambitious fundraising plan.

Despite this, the project to date has only raised about 20 percent of its goal.

Some supporters believe the project has hit a wall with fundraising. Government and oil company cutbacks have impacted nonprofits throughout the state and there is intense competition for fewer dollars.

The arts center board, largely disconnected from the business community, is faced with the uncomfortable task of soliciting donations and support from many industries, companies and organizations promoting or dependent upon economic development that is rarely supported in return.

OTHER QUESTIONS LINGER

Juneau Arts and Cultural Center spokespeople have avoided discussing parking issues in the Willoughby District and they remain unresolved. The proposed facility would remove 50 parking spaces and need many more to comply with city parking requirements. City officials have estimated $8 million would be needed as “seed money” for a parking project sufficient to meet future demands. A funding source for this has yet to be identified.

How would the project impact currently operating community facilities? Proponents say it wouldn’t compete with Centennial Hall and the high school auditorium — two event venues that rely on city funding. Centennial Hall currently loses over $600,000 annually and is persistently underutilized. But a new arts and cultural center would likely benefit by hosting existing Juneau events that would only deepen taxpayer subsidies.

WHERE DO WE GO FROM HERE?

Some community leaders are exploring alternatives. One possibility being suggested is for the city to enter into a public-private partnership allowing the Juneau Arts and Humanities Council to manage Centennial Hall.

Centennial Hall is now under city Parks and Recreation management and many believe that to be a poor fit, at best. Juneau Arts and Humanities Council has demonstrated efficiency and expertise in managing and promoting events and this would allow cost savings to the city and coordination — not competition — among various facilities.

Once operations are stabilized, plans to demolish the existing arts and cultural center building for needed additional parking would be coupled with a major renovation and addition to Centennial Hall that would include a large theater and other cultural amenities.

Obviously, many details about operating responsibilities need to be worked out but the advantages are considerable. The Juneau Assembly recently dedicated $4.5 million for upgrades and renovation of Centennial Hall. Combining that with other funding would help ease the transition of Centennial Hall to a multi-use facility that would eventually include the Arts and Culture Center. The standalone project and fundraising could be scaled back since funding to accomplish this would be far less than a new facility, as currently envisioned by supporters.

This seems like a more pragmatic and achievable concept that most in Juneau can support and still results in significant enhancements for the arts and culture community.

Win Gruening retired as the senior vice president in charge of business banking for Key Bank in 2012. He was born and raised in Juneau and graduated from the U.S. Air Force Academy in 1970. He is active in community affairs as a 30-plus year member of Juneau Downtown Rotary Club and has been involved in various local and statewide organizations.

Hoffbeck out: Revenue commissioner heads for the exit

Suzanne Downing

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August 1, 2017

2

*Randy Hoffbeck, right, is retiring from the Walker Administration, where he has served as Revenue Commissioner since January, 2015.*

Alaska State Department of Revenue Commissioner Randy Hoffbeck is completing his last few weeks in the Walker Administration. His last day will be Aug. 17. He will have lasted two and a half years and survived tumultuous fiscal battles with the Legislature as he has attempted to make the case for higher taxes.

Hoffbeck said in a statement, “…as time goes on, I realize I need to refocus my life on the call God has put on my heart; that I can no longer tell God, ‘Just a minute. I am almost done here.'”

Hoffbeck had studied and earned his master’s degree in divinity in 2014 before joining the Walker Administration.

The resignation is no surprise. It was widely discussed in political circles that he would leave after the Alaska Legislature completed its 2017 session. But the session dragged on into two special sessions, delaying his expected departure.

“It is with mixed emotions that I have reluctantly accepted Randy’s resignation as revenue commissioner,” Walker said in a statement. “For three years, Randy has been an integral member of this administration, spearheading the state’s efforts to create a plan that steers Alaska toward a sustainable future.”

Hoffbeck was appointed on Dec. 16, 2014, but he was delayed coming into the Walker Administration because he and his wife were volunteering in Kenya.

He started working in late January of 2015. Back then, he was quoted by the Alaska Journal of Commerce saying, “Now we know we have a problem, and people are more willing to talk about it than in the past. We’re seeing now what is inevitable, that oil will decline, and at some point we’ll have to deal with this. We have to decide what our state government should be doing,” he said. “The opportunity here is to get ahead of this game. This is not a crisis. It’s a cash-flow problem.”

He was talking about taxes and more revenue that he’d need to collect. His first year with Walker he was tasked with fighting for a tax that would raise about $200 million for the state, but cost $20 million or more to execute, and include an addition of 60 state employees as revenue collectors. That didn’t work.

By 2017, Hoffbeck and the governor worked behind the scenes to have the new House Finance Committee leadership, now run by a Democrat-controlled caucus, offer an even bigger income tax, which would have raised up to $700 million from working Alaskans. The tax plan was designed by an East Coast tax attorney, that his Revenue Department had contracted with, and was modeled after the IRS’ bracketed tax system.

That offer also failed in the Republican-controlled Senate.

Hoffbeck’s letter to the governor was warm and endorsing of the governor’s leadership:

WHO WILL REPLACE HIM?

Gov. Walker is already in full-election-season mode. He’s in on record saying he’ll bring another tax proposal forward and call the Legislature into special session this fall to consider it. He’s going to need a “conservative tax proponent” to help him sell the tax, and that combination is hard to find.

Walker has known of the impending resignation, and no doubt his Chief of Staff Scott Kendall has been scouring the political landscape for the right tax warrior.

The choice is not likely to be Tax Division Director Ken Alper, who fits the bill of a tax proponent, and who has been promoting an income tax for years. Alper would hurt Walker’s chances for re-election.

One political observer suggested Steve Rieger, former state legislator of both the House and Senate, and former member of the Alaska Permanent Fund Corporation’s Board of Trustees. Rieger is a Republican who might come out of retirement to work to work the fourth quarter of the Walker Administration, which could be as little as 17 months.

In the meantime, Deputy Commissioner Jerry Burnett of Juneau will step into the role of interim commissioner. Burnett has been spending a lot of time on his boat in Southeast Alaska this summer, has enough time on the books to retire comfortably, and has been discussing his plans to leave State government.

It would fall to Burnett to be the salesman for an income tax until Walker finds a commissioner who will wholeheartedly embrace the task.

An uncomfortable question: Where is David Rubenstein?

The 907

Suzanne Downing

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August 1, 2017

3

When it comes to the balance sheet of the Alaska Dispatch News, there is the obvious: Alice Rogoff, owner of the Dispatch, is married to one of the richest men in the America, and yet she cannot seem to pay her bills.

Nobody is talking about the “D word.” As in David Rubenstein. The person who would be most interested in bailing out the mother of his three children.

As founder of the Carlyle Group, he was a couple of years ago ranked at 500th among the world’s billionaires, give or take a few royals. The East Coast billionaire has been a genius when it comes to making money. He is a self-made man with a remarkable life story.

He’s also a philanthropist. He purchased the last privately owned copy of the Magna Carta in North America. He funded the restoration of the Washington Monument. As he turns 68 next week, his net worth sits at $2.7 billion.

Rubenstein is in the global private equity investment business. He knows how to leverage investments, take calculated risks, and buy and sell at the right time. Either that or he’s very, very lucky.

His wife does her own thing in Alaska as she has for the better part of two decades. She started a Native art gallery in New York City, and another in Anchorage, funded by the State. They both closed. She learned to fly, and wrecked her planes. She bought controlling shares in a news website and then purchased the largest daily newspaper in Alaska, the 68-year-old Anchorage Daily News.

By all accounts, the newspaper, now called the Dispatch, is now foundering under high operating costs, unbusinesslike decisions, and an industry that is on the ropes. In 2015, she told a Chamber of Commerce crowd in Anchorage that if the people in the room wanted better news coverage, then they should pony up and buy ads, because ads pay for personnel. Therefore, the responsibility for her success was all on them — business leaders of Alaska.

Business leaders did not bite. They didn’t see it in their best interest to buy ads.

This year, Rogoff announced that the paywall that she had taken down early on (which prevent people from reading without paying) would have to go back up because she has a payroll to make.

Then the Saturday edition went away.

[Read Craig Medred’s “Newspaper gone?]

Meanwhile, she is in court defending against her former business partner, Tony Hopfinger, who says she owes him the better part of a million bucks for his share of the news empire they built with her money. The contract between the two was written on a napkin.

The rumors of its demise may be overstated, but the impending sale of the newspaper is the talk of the town these days. It was supposed to sell by July 15, but then it didn’t. Something fell through.

Pending suitors included a Native corporation and Morris Communications. But so far, nothing seems to pencil out in the return-on-investment napkin calculation.

THE PHILANTHROPIST HUSBAND

Rubenstein is among the first 40 wealthy people who pledged to donate more than half of their wealth to charity or philanthropic causes as part of The Giving Pledge, a group started by Bill Gates and Warren Buffet. According to Wikipedia, Rubenstein has:

Purchased the last privately owned copy of the Magna Carta at Sotheby’s auction house in New York for $21.3 million. It is on loan to the National Archives in Washington D.C.
Gave $13.5 million to the National Archives for a new gallery and visitor’s center.
Purchased rare Stone copies of the Declaration of Independence, the Emancipation Proclamation, the 13th Amendment, and the Constitution. They are on loan to the State Department, the National Archives, the National Constitution Center, the Smithsonian and Mount Vernon.
Was elected Chairman of the Board of the Kennedy Center.
Was Vice Chairman of the Board of the Lincoln Center for the Performing Arts in New York, and chairman of its fundraising drive. A new atrium was named for him.
Is a board regent for the Smithsonian Institution.
Donated $4.5 million to the National Zoo for its giant panda reproduction program.
Donated $7.5 million towards the repair of the cracked Washington Monument.
Bought a copy of the Bay Psalm Book for $14.1 million, which was the highest price ever paid for a printed book.
Donated $10 million to Montpelier, to support the renovation of the home of James Madison.
Gave $18.5 million to the National Park Foundation to expand educational resources, foster public access, and repair and restore the Lincoln Memorial on the National Mall in Washington, DC.
Agreed to cover the cost of elevator upgrades to the Washington Monument.

CAPTAIN OBVIOUS QUESTION

So if his wife is struggling in her business, and there is a preponderance of evidence that she is, why doesn’t Rubenstein come to her aid? What kind of guy would buy the Magna Carta and not the Alaska Dispatch News debt owed by his wife?

Relations between husbands and wives is unknowable to those on the outside, but a reasonable person might ask if all is well in the Rubenstein-Rogoff house, (or houses — Maryland, Nantucket, Colorado, Alaska). It’s not a stretch to arrive at the conclusion that Rubenstein doesn’t bail Rogoff out of her financial situation because he simply doesn’t want to.

After all, he didn’t become a billionaire with a streak of bad business decisions. Rubenstein is a calculated risk taker, an investor, and a savvy business leader. With a curious mind and intellectual leanings, he studies organizational leadership.

In fact, his two-year-old show, “The David Rubenstein Show: Peer-to-Peer Conversations,” focuses on leaders and their personal and professional choices, what makes them tick and what makes them get up in the morning.

The second episode of season three features Phil Knight, Nike co-founder and chairman emeritus. Earlier he interviewed David Petraeus, Jamie Dimon and James Gorman, and Bill Gates.

In the strangest turn of events, the private equity investor-philanthropist has become a late-in-life TV journalist, whose chosen beat is the topic of “How to Succeed in Business.” His show has been well received; it’s the talk of the town on Wall Street.

Meanwile, his journalist wife with a penchant for the Arctic, floatplanes, and traditional print journalism, is drowning in newsprint debt and mounting litigation on the Last Frontier.

Quite possibly in Rubenstein’s “personal and professional choice” estimation, the problems at the Alaska Dispatch News are far worse than a crack in the Washington Monument. But at some point, something’s got to give, and it might just be in his best interest to once again be a philanthropist, and help out what is now clearly a not-for-profit enterprise.

Quintillion CEO out, new one in, as project nears completion

Lynn Gattis files for lieutenant governor

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Heads and Tails: Palin suit awaits judge, Gary Stevens files for lieutenant gov

Puerto Rico governor complains to Walker about working conditions

Is now the time for a new Juneau arts, cultural center?

Hoffbeck out: Revenue commissioner heads for the exit

An uncomfortable question: Where is David Rubenstein?

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