Nat Herz, Alaska Public Media

Meet the two men who have spent $700,000 trying to make Mike Dunleavy Alaska’s governor

Former state senator and gubernatorial candidate Mike Dunleavy talks to the audience during a Juneau Chamber of Commerce forum on Thursday, September 6, 2018, in Juneau, Alaska. (Photo by Rashah McChesney/Alaska’s Energy Desk)

The signs for Republican gubernatorial candidate Mike Dunleavy are all over Anchorage, paid for by a political campaign.

The same campaign spent hundreds of thousands of dollars on pro-Dunleavy television and radio commercials. It bought ads on political blogs and produced campaign hats and shirts. It even opened its own office.

This pro-Dunleavy campaign, though, was not controlled by Dunleavy himself.

Instead, it was an independent effort coordinated by an Anchorage Republican political consultant, Matt Larkin. And, until a late influx of money in the final weeks before the election, most of its cash came from two people: Dunleavy’s brother Francis, and Bob Penney, the developer and recreational fishing advocate who has long donated to Republican candidates and causes.

The backgrounds and agendas of Penney and Francis Dunleavy have received relatively little attention, even as they’ve combined to spend more than $700,000 to get Mike Dunleavy elected. Dunleavy’s rivals say the external spending was instrumental in propelling Dunleavy to the GOP nomination.

That’s making some Alaskans nervous — particularly commercial fishermen, some of whom see Penney’s ideas as a threat to their livelihoods. Tyson Fick, a Juneau fisherman who catches crab and salmon from the 37-foot Heather Anne, said he’s worried that Penney’s financial support will translate into outsized influence over Dunleavy if the Republican is elected.

Fick is nervous that Dunleavy would, if elected, cut fisheries management budgets and other state programs that are important to the commercial fishing industry. He’s also worried that Dunleavy would take Penney’s recommendations when it comes to appointing a fish and game commissioner, and choosing people to serve on the boards and commissions that divide Alaska’s fish between different types of fishermen.

“The problem that I have is when there’s any amount of wildly out-of-scale donation to a particular candidate — it always makes me question: Who is that candidate going to be answering to at the end of the day?” Fick said. When wealthy individuals’ campaign spending “completely dwarfs everyone else’s opportunity,” Fick added, “you have to wonder who’s driving the bus.”

Protestors critical of Bob Penney and the Kenai River Sportfishing Association, gather on the Kenai River in front of his house in 2015. Rashah McChesney/ Kenai Peninsula Clarion

Dunleavy would not agree to be interviewed about “Dunleavy for Alaska,” the effort funded by Penney and Francis Dunleavy. In a prepared statement sent by a spokesman, Dunleavy said he doesn’t consult with any of his three brothers about state business.

Penney is a friend of Dunleavy’s, but he also won’t get special treatment if Dunleavy is elected, the statement said.

“When it comes to policy, Bob is going to be treated like any other constituent,” Dunleavy wrote. “Fisheries policy is complex, and the state has rules in place to balance the needs of different user groups, consistent with the ‘maximum benefit’ goal in the state constitution.”

He added: “As governor, I will be committed to appointing highly-qualified people to manage our fisheries based on sound science, not politics.”

Dunleavy for Alaska is an “independent expenditure group” — the state-level equivalent of the “super PACs” that can accept unlimited donations, as long as their efforts aren’t coordinated with candidates.

After the U.S. Supreme Court’s 2010 Citizens United decision loosening campaign finance limits, state regulators stopped enforcing an Alaska law that bars individuals from donating more than $500 to groups like Dunleavy for Alaska.

Dunleavy for Alaska was formed in January, and through early October, the donations from Penney and Francis Dunleavy made up most of the group’s revenue.

That changed as the race narrowed from three major candidates to two earlier this month. In the past three weeks, Dunleavy for Alaska collected $850,000, including $200,000 from a construction company, $80,000 from a pair of executives at telecommunications company GCI, $50,000 from transportation company executive Jim Jansen and $25,000 from philanthropist Ed Rasmuson.

The gubernatorial campaign of former U.S. Senator Mark Begich has raised only slightly more money than two wealthy men have given to a group backing his Republican opponent, Mike Dunleavy. (Photo by Rashah McChesney/Alaska’s Energy Desk)

Still, Francis Dunleavy has donated $400,000 to the group, while Penney has given $325,000. Their combined total, $725,000, nearly matches the $760,000 raised by the campaign of the Democratic gubernatorial candidate, Mark Begich.

Francis Dunleavy, who lives in Houston, spent 25 years working at investment bank Bear Stearns before the company collapsed in the 2008 financial crisis. He then moved to Bear Stearns’ buyer, J.P. Morgan.

Francis Dunleavy wouldn’t agree to an interview. And there’s little publicly available information about his political views or background, with one exception: his role in an energy markets controversy that made national news.

A few months before his retirement in 2013, Francis Dunleavy was named in a $410 million settlement that J.P. Morgan agreed to pay after a Federal Energy Regulatory Commission investigation. The commission alleged that a unit led by Dunleavy had engaged in fraudulent practices in energy markets in California and the Midwest.

J.P. Morgan, in the settlement, agreed that Francis Dunleavy’s unit developed specific strategies to sell electricity from aging power plants that were often unprofitable at prevailing market rates. But it neither agreed nor denied the commission’s allegations that those strategies defrauded power markets and broke commission rules. Dunleavy was not personally penalized.

In an emailed response to questions, Francis Dunleavy said he broke no rules and “was never found to have done anything inappropriate by an independent adjudicator of facts.”

He also said he does not expect to have a role in state government if his brother is elected.

“I am not well-informed enough about Alaska policy issues to make any recommendations to my brother,” he said.

Penney, by contrast, has strong opinions on fisheries issues.

The developer moved to Alaska in the early 1950s and got his start in Anchorage selling and manufacturing mobile homes. He then helped develop a tract of land east of downtown that includes the Northway Mall.

For decades, Penney has also been a player in the state’s fish wars between commercial and recreational salmon fisherman, and he’s been a deep-pocketed political donor to politicians.

A number of fishing boats crowded near the mouth of the Kenai River on July 15, 2012 in Kenai, Alaska. A portion of the river, upstream of this one, has been flagged by the state for violating water quality standards for turbidity. (Photo courtesy Brian Henderson)
A number of fishing boats crowd near the mouth of the Kenai River in 2012. (Photo courtesy Brian Henderson)

His advocacy primarily targets commercial setnetters, who string nets along the shore near the mouths of rivers to catch sockeye salmon.

Penney argues setnetters catch too many king salmon mixed in with sockeyes and has pushed the state to crack down, to make more kings available for recreational fishermen on the Kenai River. He recently worked with a group that proposed a ballot initiative to ban commercial setnets in “urban areas,” though the Alaska Supreme Court ruled that was unconstitutional.

Penney wouldn’t agree to an interview. He said in an emailed statement that he’s “committed to helping the salmon resources of Cook Inlet,” which the Kenai River flows into.

“I have lived in Alaska for 67 years and am 86 now. I only have so many years left, so this is about the No. 1 issue in my life,” he said. “The Kenai kings are the largest salmon in the world, but state management treat them as just another salmon instead of managing them as a world-class trophy.”

While Penney is focused on the Kenai River, Fick, the Juneau fisherman, said he’s worried that Penney’s favored policies, if adopted by Dunleavy, could hurt commercial fisherman in other parts of the state.

Dunleavy’s appointees to the Board of Fisheries, for example, will make decisions that affect fisherman statewide, from Southeast to Prince William Sound to Bristol Bay.

Then there’s Dunleavy’s own history as a state senator: He once proposed a 12.5 percent royalty on commercially caught Alaska seafood, which Fick said would be “crippling.” And on the campaign trail, Dunleavy skipped the debate on fisheries issues in Kodiak — typically a mainstay for statewide candidates.

But Dunleavy’s supporters say concerns like Fick’s are overstated.

“It’s not based on facts. It’s based on fearmongering,” said John Moller, a Juneau commercial fisherman who also co-chairs Dunleavy’s campaign.

Dunleavy’s tax proposal came in response to a fishing industry push for state spending on fisheries management, Moller said.

“It was about their own access to their own fishery, and how they actually can participate in helping fund their industry,” Moller said.

Dunleavy’s campaign also noted a recent $200,000 donation to Dunleavy for Alaska from a commercial fishing industry group, the Pacific Seafood Processors Association.

Moller said Dunleavy has been meeting with commercial fishing groups and will represent “all Alaskans and all stakeholders.”

“There is nothing in the record that really justifies that fear,” Moller said.

Begich spent four years as a consultant. As governor, he could sign bills affecting former clients.

After leaving the U.S. Senate, Mark Begich — pictured at a talk during a September campaign visit to Juneau — founded a consulting company, Northern Compass Group. (Photo by Rashah McChesney/Alaska’s Energy Desk)

If Democrat Mark Begich is elected Alaska’s governor, he’ll wield veto power over dozens of bills each year, just like his predecessors.

A major difference from those predecessors, though, are his relationships with the special interests that will be pushing him to sign or reject each bill. In some cases, they could be his former paying customers.

For nearly four years, Begich has owned a public affairs and consulting firm, Northern Compass Group, that’s worked with clients that intersect with both state and federal government. If elected, he’ll likely be faced with decisions that will directly affect the businesses, unions and Native organizations that have been paying his business for advice.

That means Begich should be careful about possible conflicts, according to Anchorage independent Rep. Jason Grenn, who helped lead a successful push for legislative ethics reforms this year.

Rep. Jason Grenn, I-Anchorage, speaks during a House Floor Session in the Capitol in Juneau on Feb. 10, 2017.
Anchorage independent Rep. Jason Grenn. (Photo by Skip Gray/360 North)

“I don’t think anyone should be disqualified just because they’ve been successful in the past,” Grenn said. But, he said, he thinks Begich “should understand that people are going to be maybe more critical than of governors in the past, who had a law firm or had other business dealings.”

“And he should be sensitive to that, and take the steps needed to show these aren’t going to inject themselves into his best vision for Alaska,” Grenn added.

Alaska politicians often emerge from the worlds of public policy and business, and Begich is far from the first with potential for conflicts.

The current governor, Bill Walker, owned a law firm that worked for the city of Valdez, the Kenai Peninsula Borough and the Alaska Gasline Port Authority — a municipal group pushing the construction of a natural gas pipeline from the North Slope to Valdez.

Walker sold his law firm after being elected, but his critics still cited his past relationship with the authority because its gas line plans conflicted with a state-sponsored project to build the pipeline on a different route.

And after the 1990 election of Wally Hickel, a businessman with holdings worth more than $80 million, he pledged to put his interests in a gas line company, Yukon Pacific Corp., into a blind trust.

Begich’s work is significant, though, because of the number of clients he’s had, as well as the recentness of his work, Grenn said.

Northern Compass Group had 17 paying clients last year, generating at least $885,000 in income for the firm, according to a financial disclosure Begich was required to file with the state. Begich himself reported between $300,000 and $700,000 in personal income from his company. (State law requires income to be reported in ranges, rather than specific amounts.)

Several of Begich’s clients, or their employees, have also spent thousands of dollars on political efforts and groups that are trying to get him elected.

One step Begich should take if elected governor is to recuse himself from official actions that would “directly and substantially” affect his company’s clients, said Craig Holman, an expert on campaign finance and governmental ethics at the Washington, D.C. watchdog group Public Citizen.

“That would be one big step that we see flaunted over and over, here in Washington, D.C.,” he said.

Begich’s campaign manager, Nora Morse, would not make him available for an interview.

Former U.S. Sen. Mark Begich announces that he's staying in the race for governor in Anchorage on Tuesday, the deadline for candidates to withdraw and have their names taken off the ballot. Also pictured: His son Jacob Begich, wife Deborah Bonito and lieutenant governor running mate Debra Call.  The three-way race includes Gov. Bill Walker, an independent, former state Sen. Mike Dunleavy, a Republican, and Begich, a Democrat.
Former U.S. Sen. Mark Begich speaks at a campaign event in September. (Photo by Liz Ruskin/Alaska Public Media)

In an email, she said Begich, as an elected official, “is always focused on one singular goal: doing what is in the best interest of Alaskans with a commitment to open and transparent government.”

“And as always, his office and the entire administration would be held to the highest ethical standards – following all laws and state regulations,” she wrote.

The future of Northern Compass Group, and of Begich’s ownership stake, will be determined after the election, she said.

Begich created Northern Compass Group in 2015, less than three months after losing his re-election bid to Republican Dan Sullivan. The company’s website shows five employees working with Begich, several of whom worked in his U.S. Senate office; state corporate filings list Begich as Northern Compass Group’s sole owner.

While state law requires Begich to list his clients on his financial disclosure, and say roughly how much they paid Northern Compass Group, he does not have to describe the work his company did for each one.

Northern Compass Group’s largest source of revenue last year — at least $200,000 — was a Washington, D.C. law and lobbying firm called Brownstein Hyatt Farber Schreck, where Begich was hired as an adviser in 2015.

Brownstein has dozens of accounts, from Walgreens to Amazon to MGM Resorts.

Brownstein, when Begich was hired, said he would work on energy issues and the intersection between business and government. But neither Begich’s campaign nor Brownstein would identify the specific clients Begich has worked with.

Morse described Begich’s work for Brownstein generally as “internal communication and organization,” “bridging the bipartisan team” within the company and “public relations and outreach.” He helped launch and moderate an issue-based podcast series, as well as panels with bipartisan speakers on current events, she said.

What Northern Compass Group did for clients in Alaska last year is a little more clear.

The company researched Alaska renters insurance law for Weidner Apartment Homes, which has more than 5,000 units in the state, said Weidner spokesman Greg Cerbana.

Northern Compass Group worked for Chugach Electric Association on the Anchorage co-op’s proposed merger with a municipal utility, though a spokeswoman, Julie Hasquet — a former Begich press secretary — refused to provide details or documentation.

Grant Aviation, a regional Alaska airline, hired Northern Compass Group to solicit feedback from the communities where the airline works, Grant officials said in a 2015 news report.

And Northern Compass Group has also advised Planned Parenthood in its fights with Congress and the Trump administration, spokesman Andrew Everett said.

While Begich wouldn’t talk about the specifics of his consulting work, he did describe it generally in an interview earlier this year.

“It was varied, every day. Sometimes I’d be traveling to a place in Alaska, meeting with a potential new client, or talking with people about a client,” he said. “Or, the team would be doing other projects, related. So, very eclectic.”

The same issues and entities that Begich’s company has worked with are almost certain to come before state government in the next few years.

Chugach Electric in Anchorage is one of three utilities announcing a preliminary agreement to work together to reduce power costs. (Photo by Elizabeth Harball/Alaska's Energy Desk)
Chugach Electric Association hired Mark Begich’s consulting firm to work on its merger with a municipal utility. (Photo by Elizabeth Harball/Alaska’s Energy Desk)

Eight of Northern Compass Group’s 17 clients pay lobbyists to work with Alaska’s executive branch, which Begich will oversee if he’s elected. Those clients also lobby on specific bills that could come to the governor’s desk.

This year, for example, Chugach Electric Association lobbied against legislation to create an independent entity aimed at cutting consumers’ costs by better coordinating power generation among Alaska’s interconnected utilities, according to one of Chugach’s lobbying reports.

The utilities said the legislation was unnecessary and that they were already working toward the same goal.

While Grenn, the state representative, said he wants Begich to be transparent about possible conflicts if he’s elected, Begich’s opponents have also questioned his loyalty to Alaskans’ interests in his current job — by describing his work for the past four years as “lobbying.”

But that’s a mischaracterization, according to the specific definition of lobbying under federal law.

Begich was barred from lobbying his former Congressional colleagues for two years after he left office. The ban is designed to stop representatives and senators from profiting from the connections they made while in public service, and to prevent them from doing favors for possible future employers while they’re still in office.

After the two-year cooling-off period, if Begich wanted to try to directly influence members of Congress on legislation, he would have had to formally register as a lobbyist. He didn’t.

What Begich did do, in some cases, was give advice to other people who were lobbying and trying to influence Congress.

That’s become a common practice for former government officials. And good government groups are critical of the practice, saying it’s not much different than lobbying.

“Strategic consulting — especially when you’re doing strategic consulting on behalf of a major lobbying firm — is really stealth lobbying,” said Holman, the government ethics expert. Begich, he added, is giving clients “key advice and direction on how to get around the governmental system, both at the federal and state systems. That is lobbying by any other term.”

But Begich’s supporters disagree. One of them, Anchorage tribal lawyer and lobbyist Lloyd Miller, said there’s a big distinction between Begich’s work and what a registered lobbyist does.

It’s one thing to advise lobbyists on how to best approach members of Congress, and another completely to pick up the phone and make those calls yourself, Miller said in an interview.

“It’s not a line, it’s a river,” Miller said. “Because it’s such an enormous gap.”

Miller’s firm paid Northern Compass Group at least $20,000 last year, according to Begich’s financial disclosure. Miller said Begich gave advice about the most effective arguments to use to convince individual senators of the benefits of legislation Miller was pushing.

But Miller said he still had to make those arguments to senators and staffers himself, which was harder than having Begich do it for him.

“I would have loved for him to actually become a registered lobbyist, because he would be great at it. He would be super at it,” Miller added. “People like him who become registered lobbyists earn a million, two million or more a year in Washington, D.C.”

Andrew Kitchenman contributed reporting.

A solar project in rural Alaska takes aim at sky-high electric bills

A group of visitors stands next to the three new solar arrays that are about to go online in the Northwest Alaska village of Buckland on Monday, October 15, 2018. (Photo by Nathaniel Herz / Alaska’s Energy Desk)

A new renewable energy project in the Northwest Alaska village of Buckland aims to demonstrate solar and wind power’s potential to reduce the region’s sky-high utility costs.

The village-run electric utility is set to switch on three new solar arrays this week, and a new battery system next year.

Buckland water plant operator Erik Weber, left, stands inside the village’s powerhouse last week. (Photo by Nathaniel Herz / Alaska’s Energy Desk)

Boosters say systems like Buckland’s have huge potential to reduce the cost of power in rural Alaska, where electricity prices can be six times the national average and monthly light bills can top $1,000. But major obstacles remain, too, from the technology’s cost to the region’s remoteness.

Buckland, which now makes most of its power with generators fueled by barged-in diesel, is a sort of test case. Once the system is fully functional and linked with preexisting wind turbines, the village expects to be able to shut off its diesel generators for hours at a time during the summer, according to the project’s designers.

“Everybody’s for it – everybody wants to get away from the fuel,” said Erik Weber, who runs the village water plant and has helped with the solar installation. “When things like an energy crisis come up and there’s not a lot of fuel to go around, we can keep going here.”

Buckland’s project is part of a regional push toward renewable energy and it’s financially supported by NANA — Northwest Alaska’s Native corporation — as well as the U.S. Department of Energy.

Those backers are eager to see more, similar projects, according to Sonny Adams, NANA’s director of energy.

“One of our goals needs to be building capacity with not only the village and the region, but also the state of Alaska,” Adams said. “This is the starting point.”

Adams flew to Buckland last week to see the brand new solar arrays, along with a group that included a Department of Energy official, a renewable power consultant and a reporter.

Buckland, with about 400 residents, is 75 miles from Northwest Alaska’s regional hub, Kotzebue, and it can only be reached by boat or bush plane.

Like the other villages scattered across Northwest Alaska, Buckland produces its own power with diesel-fueled generators. A state subsidy program, Power Cost Equalization, helps reduce residential electric bills, but only up to a point.

If you use more than 500 kilowatt hours in a month – a little more than half of the average residential power bill nationally — you have to pay full price. In Buckland, that’s 47 cents per kilowatt hour, according to state data, compared to 19 cents in Anchorage and a national average of 13 cents.

Prices are even higher elsewhere in Northwest Alaska. Buckland sits on a river and can have its diesel floated in on a barge, but other villages, like Noatak, sometimes have to fly in their fuel.

Sonny Adams, NANA Regional Corp.’s energy director, stands inside a shipping container that holds up one of Buckland’s new solar arrays. (Photo by Nathaniel Herz / Alaska’s Energy Desk)

“A friend of mine from Noatak sent me one of his electric bills and it was $1,000,” Adams said. “$1,000 for one month – something’s definitely wrong there.”

Adams’ group arrived in Buckland on a frosty morning last week. Weber, the water plant operator, met the visitors at the village’s dirt runway and walked them to the site of the new power project.

Buckland’s three solar arrays were installed this fall, though they haven’t been switched on yet. The equipment came from BoxPower, a California company that sells complete solar power stations that fit inside a shipping container.

At the site, Adams and the rest of the visitors examined the low-tech foundations that the project’s architects designed for the shipping containers: They sit atop three other shipping containers that were buried in the ground and filled up with dirt.

They also discussed a glitch with pumps connected to Buckland’s wastewater system that’s causing the village’s wind turbines to stop working.

“There’s a lot to it that’s just beyond the obvious, what you can see. And villages, in general, have unique power systems,” said Brian Hirsch, a consultant who’s helping with the renewable project.

Afterward, the visitors went in search of the mayor, Tim Gavin Jr. They found him with a crew of men demolishing a burned-out church, then headed toward City Hall as Gavin puffed on a Marlboro.

Inside, over donuts – a hot commodity in a village with just a few tiny stores — the group discussed what will happen once the village’s new solar panels and batteries are turned on. Gavin wondered about a special price tied to the renewable power.

Buckland Mayor Tim Gavin Jr. talks with the visitors last week. (Photo by Nathaniel Herz / Alaska’s Energy Desk)

“We can have a diesel rate and we can have a nature rate,” Gavin said. “Or a winter rate and summer rate.”

Those details still need to be worked out. And Adams, in an interview, said he wants to be careful about people’s expectations for renewable power, in Buckland and elsewhere in Northwest Alaska.

It’s probably not going to slash electric prices overnight, he said. Instead he wants to protect villages against spikes in the price of diesel and heating fuel.

On their way back to the airport, the visitors stopped by the offices of Buckland’s tribal council, where a woman complained about a recent monthly electric bill of $1,100.

Others told similar stories the next day at a regional energy planning meeting in the hub town of Kotzebue. Billy Lee, a tribal leader from the village of Shungnak, said he used to spend $5,000 a year on home heating fuel, which costs $8.25 a gallon.

But recently the Northwest Arctic Borough, as part of a test project, installed something in Lee’s house called a heat pump, which runs on electricity instead of fuel. It saves him $2,000 a year, he said.

Adams’ long-term vision is pushing Northwest Alaska residents toward heat pumps that run on locally-produced renewable power, rather than relying on an expensive, imported commodity – fuel – for electricity and heat.

An aerial view of Buckland. (Photo by Nathaniel Herz / Alaska’s Energy Desk)

“You’re having events around the world that are happening thousands of miles away, and that causes prices to go up,” Adams said, referring to oil price fluctuations. “We need to have an alternative energy source readily available.”

But there are still a lot of hurdles standing in the way of expansion of solar and wind power, and batteries, beyond Buckland to Shungnak and the region’s nine other villages.

First, the new technologies are expensive. A big chunk of the money for Buckland’s renewable system came from grants, and Adams said it’s probably not realistic to expect the same kind of cash to materialize for more villages.

Second, it’s more straightforward to install the renewables in Buckland because the city runs its own utility. Most of the region’s other villages belong to a big rural utility, Alaska Village Electric Cooperative, that serves dozens of other communities.

Third, the structure of the state’s electricity subsidy program means that rural residents may not see much savings from reduced diesel use that stems from renewable power projects.

That’s because the subsidy program pays part of the diesel’s cost — meaning that less consumption will likely result in lower state spending, and only a small reduction in costs to residential customers who keep their use below 500 kilowatt hours.

Proponents of renewable energy say that dynamic discourages utilities from investing in new power projects.

For now, the aim in Buckland is simply to show that the concept will work, Adams said.

“The nice thing about Buckland is they wanted this,” Adams said. “It came from them.”

State regulators to Alaska lobbyist: Stop helping candidates raise money

Lobbyists Royce Weller and Ashley Reed talk in the benches on the second floor of the State Capitol in January, 2017. (Marc Lester / ADN)

Alaska lobbyists have been breaking an anti-corruption law by promoting fundraising events on behalf of political candidates, according to a preliminary opinion from the state’s campaign finance watchdog.

Lobbyist Ashley Reed asked for the formal opinion from the Alaska Public Offices Commission. He wanted to know whether state law allows for lobbyists to email copies of invitations to fundraisers for political candidates.

Jerry Mackie’s portrait from when he was a state senator.

The Legislature banned lobbyists from engaging in fundraising activity more than two decades ago. Proponents of the ban said candidates who get help from lobbyists on their campaigns could, once elected, have a harder time refusing lobbyists’ requests for action on legislation.

But in spite of the ban, as Alaska Public Media reported last week, Reed and another lobbyist, Jerry Mackie, have been sending copies of fundraiser invitations to their clients and friends.

Reed and Mackie are among the state’s most influential lobbyists, and each earns more than $700,000 representing businesses in health care, oil development, mining and other industries.

On Monday, the commission’s staff issued a three-page draft opinion. It addresses Reed’s question about whether he can send invitations to fundraisers.

The short answer: No, because that’s engaging in fundraising activity, which the law bars lobbyists from doing.

The opinion is still a draft — it has to be approved by the commission’s politically-appointed leaders at their next meeting, in January.

Reed, reached by phone Wednesday, wouldn’t discuss the draft opinion.

“I don’t want to fight in the media,” he said. “I want the commission to decide.”

Among the candidates who benefited from the emails from Reed and Mackie are Gov. Bill Walker and House Speaker Bryce Edgmon.

In earlier interviews, the lobbyists cited a section of the law that allows lobbyists to personally advocate on behalf of a candidate. The lobbyists also said they had informal approval to send the emails after talking with an employee of the public offices commission.

Anchorage airport looks at building a new cargo handling center

A Singapore Airlines Cargo plan taxis for departure on Runway 32 at Ted Stevens Anchorage International Airport on April 27, 2013. The airport ranked fifth in the world for the most air cargo to go through it in 2017.
A Singapore Airlines Cargo plan taxis for departure on Runway 32 at Ted Stevens Anchorage International Airport on April 27, 2013. The airport ranked fifth in the world for the most air cargo to go through it in 2017. (Creative Commons photo by BriYYZ)

Managers of the Anchorage airport are looking into construction of a big new warehouse to help boost the volume of air cargo shipped through the city.

Anchorage is already is the world’s fifth busiest cargo airport, just ahead of Dubai. More than 10 planes every day come and go between Anchorage and Shanghai and two-dozen more head to and from Chicago. They’re filled with things like electronics, seafood, flowers, fruit and vegetables.

Now, managers at the state-run airport have an idea to make things more efficient for shipping companies.

Say you’re flying a pallet of iPhones from Asia to the United States. You want to stop in Anchorage to transfer the shipment to another plane, but that other plane won’t arrive for four or five hours and it’s raining.

Right now, there’s no place to stash those phones that’s close to the area where cargo planes park.

“What we want to do is provide a facility where people can store stuff on a quick basis to keep things out of the elements and secure,” Jim Szczesniak, the Anchorage airport manager, said in a phone interview Thursday.

The airport on Thursday issued a formal invitation to companies, asking them to pitch their ideas for building and operating what the airport is calling a “quick cargo center.”

The warehouse would sit close to the cargo plane parking area, and it could even house offices for shipping companies. The airport is looking at two possible sites, one of which would be big enough for a warehouse the size of six football fields.

Szczesniak said the facility could be built with help from the state’s economic development arm, the Alaska Economic Development and Export Authority. Companies have to send letters of interest by mid-December.

Alaska law says lobbyists can’t raise cash for candidates. But lobbyists are still sending invites to fundraisers.

The Alaska State Capitol in downtown Juneau is open for business on Tuesday morning, Jan. 17, 2017, the opening day of the 30th Alaska Legislature.
The Alaska State Capitol in downtown Juneau last year. (Photo by Tripp J Crouse/KTOO)

Some of Alaska’s most prominent lobbyists are boosting the fundraising efforts of political candidates – a practice that, according to a top enforcement official, appears to violate a state law that’s designed to limit lobbyists’ influence over the legislative process.

In the past year, lobbyists Ashley Reed and Jerry Mackie have emailed clients and friends invitations to political fundraisers for candidates including Gov. Bill Walker, House Speaker Bryce Edgmon and state Sens. Kevin Meyer and Lyman Hoffman, both of whom sit in Senate leadership.

That’s in spite of a state law that bars lobbyists from helping with legislative and gubernatorial candidates’ fundraising efforts. Penalties for violations include a fine capped at $1,000 and up to a year in prison.

Both lobbyists said they received permission to send the invitations from the state’s lobbying enforcement agency, the Alaska Public Offices Commission. But the commission’s director, Heather Hebdon, said one of her employees had only issued non-binding, informal advice that won’t protect lobbyists against a complaint.

Lawmakers approved the fundraising ban in 1992 as an anti-corruption measure, according to one of the advocates for the ban, former state Rep. David Finkelstein. When lobbyists help raise money for politicians’ campaigns, it can give them more leverage when they ask those politicians to vote in a particular way, Finkelstein said.

“If someone raises you thousands and thousands of dollars, it’s hard not to feel beholden to them,” Finkelstein said. “I can say that out of personal experience.”

Before the Legislature approved the ban, lobbyists were allowed to participate in political campaigns. And lawmakers often pressured them to help with fundraising, Finkelstein said, since many lobbyists’ clients are business and industry leaders who can write big checks.

The law that Finkelstein helped pass says lobbyists can’t “directly or indirectly collect contributions” for candidates, and they can’t “otherwise engage in the fundraising activity of a legislative campaign or campaign for governor or lieutenant governor.” State regulations implementing the law say that lobbyists can’t solicit, collect, accept or deliver campaign funds or goods.

Reed and Mackie represent some of the state and country’s largest corporations, plus a slew of nonprofits and tribal organizations. Each makes more than $700,000 a year to push the interests of their clients in the state Legislature and with executive branch agencies.

In July, Reed – whose 15 clients include CVS Health, Wells Fargo Bank and Enstar Natural Gas – forwarded an emailed invitation to a fundraising lunch for Hoffman and Meyer.

The event was held at Enstar’s Anchorage offices. The original invitation was written by one of the co-hosts of the lunch, Alaska State Chamber of Commerce President Curtis Thayer. Reed added his own message.

“From my vantage point and perspective, these individuals have served the state well over the years. They are deserving of your support,” Reed wrote. “Please read the invitation below.”

Reed’s email also included a disclaimer that acknowledged the legal prohibition on fundraising. It said: “This correspondence is NOT a solicitation; rather, it is intended to be advisory in nature.”

Reed has also sent invitations on behalf of two Anchorage Republicans – Josh Revak, who’s running for a state House seat on the lower Hillside, and incumbent Sen. Mia Costello, according to copies obtained by Alaska Public Media.

Mackie, meanwhile, last month sent an email that attached an invitation to a fundraiser for Hoffman and House Speaker Bryce Edgmon. Mackie, whose 20 clients include AT&T, Arctic Slope Regional Corp. and cruise line Holland America., did not write a message of his own.

Jerry Mackie’s portrait from when he was a state senator.

He also texted invitations last year to a fundraiser for Walker and to another event jointly benefiting Hoffman and Edgmon, according to a copy of the texts obtained by Alaska Public Media.

In phone interviews, Reed and Mackie both said they thought their activity was authorized by the public offices commission.

Mackie cited a legal interpretation he asked for last year from an employee at the commission, also known as APOC.

The interpretation came from the commission’s lobbyist coordinator, Heather Dalberg, who’s a paralegal, not an attorney. She wrote that Mackie could inform people about fundraisers for candidates that Mackie personally supports, “as long as you are just informing and are in no way connected to the fundraiser.”

The law contains a caveat that allows lobbyists to “personally advocate” for candidates in spite of the fundraising ban, Dalberg wrote.

“Informing others of upcoming fundraisers for a candidate that a lobbyist personally supports is not prohibited,” she said.

Mackie, a former state senator, said in a phone interview: “I did exactly what I was told by APOC that I could do, and nothing more.”

Reed said he did not have any written guidance like Mackie’s. But he said he’s received similar advice in phone calls with commission employees.

Any guidance that the lobbyists received from commission employees won’t insulate them from complaints, though, according to Hebdon, the commission’s executive director.

Hebdon said information from phone calls like Reed’s, and even from a letter like Mackie’s, is non-binding, “informal advice” from staff that hasn’t been approved by her agency’s politically-appointed commissioners.

The lobbyists could have asked the commissioners to issue a formal advisory opinion, Hebdon added. And she said she interprets the law differently from Dalberg, her employee who wrote the letter to Mackie.

“A plain reading of the statute clearly prohibits anything to do with fundraisers,” Hebdon said. It’s pretty clear, she added, that lobbyists are barred from sending invitations.

Lobbyists could cite informal advice to argue for reduced penalties if they’re found to have violated the law, Hebdon said. But, she added, “it certainly doesn’t protect them from a publicly-initiated complaint.”

Reed and Mackie both said they would stop sending emails if Hebdon’s agency asks.

“If the commission says we’re not supposed to do that, I won’t do it and I doubt any of the other lobbyists will do it,” Reed said.

Lobbyists Royce Weller and Ashley Reed talk in the benches on the second floor of the State Capitol in January, 2017. (Marc Lester / ADN)

After the lobbying law was approved in the 1990s, the public offices commission addressed several formal requests for advisory opinions from lobbyists who wanted to understand the limits of the fundraising ban. But even after those opinions, the differences between allowed and illegal activity are still subtle.

Lobbyists can’t work with a candidate or campaign staffer to determine the details of a fundraiser. But they can do limited “clerical” work to help clients, like businesses, that are organizing fundraisers, the commissioners said in a 1994 ruling.

When asked, the commissioners couldn’t agree on whether it’s legal for a lobbyist to prepare a list of guests that their clients would use when sending fundraiser invitations — though the commission’s staff recommended that such activity be considered illegal.

The commissioners have never issued an opinion directly addressing whether it’s legal for lobbyists, under their own names, to send invitations to fundraisers in email or text messages, like Mackie and Reed did.

Reed described that practice as commonplace among lobbyists. He also said that legislators running for re-election often ask him to distribute invitations to their fundraisers.

“When they ask for a favor, you try to help them,” Reed said.

Four of the candidates whose fundraiser invitations were emailed by the lobbyists — Edgmon, Hoffman, Walker and Meyer — didn’t respond to requests for comment.

Revak and Costello, whose fundraiser information was emailed by Reed, both said they didn’t asked him to do that.

“I didn’t ask for his help,” Revak said. “I’m not trying to game the system here.”

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