Permanent Fund doesn't want to hear from public about the leadership crisis on the trustees

The trustees of the Alaska Permanent Fund Corporation still have time to correct the serious mistake they’ve made on the agenda for the special meeting Wednesday about the leak of documents related to the meddling of trustee Gabrielle Rubenstein in fund operations.

Missing from the agenda is any chance for public comment at the special meeting that begins at 8 a.m.

The trustees may claim that there is no need for public comment on a matter of internal security that should be kept confidential.

No one has suggested that any of the leaked emails are fakes. What they show is the most serious leadership crisis in the history of the fund. This must be dealt with in the open.

I asked Permanent Fund Executive Director Deven Mitchell who decided that there would not be public comment and why. He replied:

“Public testimony isn’t required for special meetings of the APFC board.  This meeting was planned with short notice and due to the constrained availability of our Trustees and the very narrow agenda which only provides for an executive session there was both a lack of ability and subject matter specifically related to topics to be discussed at this meeting to allow for public comment.  We will, as required, provide time for public comment on May 29 during APFC’s next regular meeting, and would encourage interested parties to provide comments at that time.”

The agenda for the meeting requires an action by the trustees to approve the proposed agenda. If the six trustees fail to amend the document to include public comments, they will be compounding the error.

In any event, there is unlikely to be much public comment because of the lack of notice and because the corporation published an agenda that does not allow public comment.

The board of trustees, controlled by Dunleavy allies, is in a jam. Trustees can only be removed for cause and Dunleavy has signaled that he sees no cause to get involved, the patented “not my job” evasion we’ve come to expect.

I think the trustees do not want to hear from the public about the alarming disclosures regarding Rubenstein. I dealt with these in some detail in this blog post from April 29.

The agenda says the topic for the meeting Thursday concerns the security of “records systems and document management procedures for confidential information.”

Read that as a decision to go after the messenger, not the message. This is another serious mistake by the trustees—Rubenstein, Adam Crum, Jason Brune, Ryan Anderson, Ethan Schutt and Craig Richards.

Crum and Anderson are Dunleavy employees. Richards is a state contractor, serving as Dunleavy’s statehood defense coordinator. Brune is a former Dunleavy employee.

Schutt is the chair and will not be reappointed by Dunleavy, according to one of the disclosures in the leaked emails. Rubenstein, daughter of billionaire David Rubenstein and Alice Rogoff, is the vice chair.

The problem facing the Permanent Fund is not that emails were leaked to the Alaska Landmine.

The problem is what was disclosed about Rubenstein’s behavior, including specifics that show she lacks the judgment, the political knowledge and the temperament for what is one of the most critical volunteer posts in state government.

The main fault here lies with Dunleavy. It is not the job of a trustee to claim who should be fired, who should be hired and who should be interviewed by employees to potentially get contracts for managing money.

The most important job of a trustee is to build and maintain the trust of Alaskans in the integrity of the Alaska Permanent Fund Corporation. Rubenstein doesn’t get it. But she has the backing of Dunleavy.

Investigating the employees of the fund to find and plug the leak is a useless sideshow, though Rubenstein and others may claim it is job No. 1.

The statement released by billionaire David Rubenstein’s PR man to the Landmine on behalf of Gabrielle Rubenstein, in words attributed to her, demonstrates a complete misunderstanding of the real damage to Alaska: “That someone leaked internal messages containing confidential information to the media is disturbing; it is a breach of policy and trust,” the statement said in part.

The big challenge regarding the future of Alaska’s most important financial institution is recognizing that Rubenstein, who was recurited by Dunleavy, does not belong on this board.

The governor, the other trustees and the Alaska Legislature should be examining the Rubenstein conflicts of interest identified by one of the top corporation executives and try to limit the damages.

“I think the most serious topic and perhaps more uncomfortable to address are Trustee Rubenstein’s conflicts of interest in the private credit space,” Permanent Fund Chief Financial Officer Marcus Frampton wrote in one email.

“As we all know she has made dozens upon dozens of investment manager referrals in her 18 months on the APFC board,” Frampton wrote. “Many of these have been in the private credit space and my team has declined to pursue all of them.”

Frampton wrote that Rubenstein has pressured fund officials to make investments and do business with firms in which some of the principals have investments in Manna Tree, Rubenstein’s private equity firm, and are connected to the Carlyle Group, the company co-founded by her father, David Rubenstein.

The management structure of the Permanent Fund, which includes a six-member board of trustees selected by the governor with no legislative confirmation or vetting process, is long overdue for an overhaul. The Permanent Fund is in a leadership crisis.

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