In 2019, Gov. Mike Dunleavy’s office steered a no-bid contract, worth up to $441,000 to the grandson of one of the major financial backers of his 2018 campaign.

Clark Penney, the grandson of Dunleavy megadonor Bob Penney, was chosen by an unidentified state official to supervise the “Alaska Development Team” at $8,000 a month.

The justification for avoiding competition was created after the fact, an attempt to create a paper trail to evade the rule requiring competition.

The reason to have competition is to prevent insider sweetheart contracts like the one given to Penney and his three-month-old company.

Removing the words “by governor’s request” from an original source document was an attempt to separate the Penney contract from the governor’s office and hide the obvious political favoritism.

“We will also need to put together a sole source justification,” the chief financial officer of AIDEA wrote on March 12, 2019. That was at least a month after Dunleavy or someone in his office decided to have the state corporation reward Clark Penney, who had been a co-treasurer of the campaign.

There were numerous other violations of state procurement regulations along the way.

The state money for the Penney contract was laundered by the Dunleavy administration through AIDEA, probably to try to hide the political connection. Tom Boutin, then the head of AIDEA, told his board that although he signed the contract with Penney, the work was not part of AIDEA and Boutin wasn’t supervising him.

Boutin wrote that he told the governor’s press secretary, Matt Shuckerow, to lie about the Clark Penney contract if anyone asked. He said Shuckerow should tell reporters it was an AIDEA contract.

“To date the press calls are few and far between, and entirely manageable. I told Matt that if I were him I would tell the press there are 128 boards and commissions (or how many there are now), and he cannot possibly know of all the contract s and projects of every one of them; this is an AIDEA contract and he could tell the press to call AIDEA,” Boutin wrote to Commerce Commissioner Julie Anderson.

The connection to Bob Penney—who spent $350,000 to get Dunleavy elected—and the lack of competitive bidding for the position created controversy for Dunleavy that didn’t go away until Clark “voluntarily” decided to stop taking state money two weeks after Dunleavy promised a “deep dive” into the matter.

Dunleavy has never answered the simple question of who in the governor’s office decided to reward Clark Penney. Dunleavy has claimed he had no idea.

Alaskans deserve straight answers on this, especially now that Bob Penney has again emerged as a Dunleavy megadonor, giving $100,000 so far to the Dunleavy reelection campaign. Dunleavy’s brother in Texas, Francis Dunleavy, has given him $200,000 so far.

Counting the 2018 donations, Bob Penney and Francis Dunleavy have now spent more than $1 million on Mike Dunleavy’s political campaigns.

Regarding the Clark Penney contract, “we’re looking into all of the details surrounding that contract and other contracts. And once we are finished with our deep dive, we will come out and we will have a presser (press conference) on it,” Dunleavy told reporters in Juneau two-and-a-half years ago.

“We’re gonna find every piece and every detail. We want to be 100 percent sure because the governor’s office is a big office,” he said on Feb. 19, 2020. “I know there’s the implication that there was a sweetheart deal with an individual. We want to make sure that there’s nothing been overlooked and there’s been no mistakes. We want to look into this thoroughly.”

I suspect that even the shallowest of dives would have revealed that the contract was a sweetheart deal.

On Jan. 29, 2021, the day that Treg Taylor was appointed attorney general, he skipped all of the real legal and ethical questions and claimed that AIDEA could do just about whatever it wanted because there are few rules, offering flimsy hoo-ha as whitewashing.

Your contributions help support independent analysis and political commentary by Alaska reporter and author Dermot Cole. Thank you for reading and for your support. Either click here to use PayPal or send checks to: Dermot Cole, Box 10673, Fairbanks, AK 99710-0673.