Permanent Fund's Anchorage office venture has makings of another scandal

There is nothing about opening a new Anchorage office for the Permanent Fund—in temporary quarters—that should inspire public confidence in the trustees of the Alaska Permanent Fund Corporation.

The opposite is true.

There is more to the situation than has been reported by any Alaska news organization. And there is certainly more than the corporation leaders and the trustees have admitted.

This episode is reminiscent of the debacle created with the firing of Angela Rodell, which had to do in part with the political drive for a new Anchorage office.

The five trustees of the fund—all of them beholden to Gov. Mike Dunleavy—do not appear to have what it takes to be politically independent of the governor.

Or to take official actions in the open, as they are required to do so by law.

The trustees, meeting this week in Juneau, need to explain to Alaskans exactly how they gave a new policy directive to the staff in August, a month after they met in public and declined to take that step.

The policy directive in August was to open a new Anchorage office without delay and without waiting for a report from Chief Operating Officer Mike Barnhill on how it would be implemented.

Barnhill, who was hired early this year, quit his job over this on Aug. 7.

The new plan is to open an office in temporary space, 1,200 square feet, that will be replaced by a bigger permanent office the year after that. This is bungling at a high level.

I suspect that Gov. Mike Dunleavy inserted himself into the process and orchestrated events that led to the bizarre Permanent Fund press release on Aug. 10, the one that promised the fund will "open a satellite office in Anchorage as soon as possible to support the retention and recruitment of professional staff.”

The governor may have intervened on his own or at the request of one or more of the trustees who called him in for political muscle to demand instant action.

Barnhill’s departure raises the important question of why the corporation would open an office without having a plan to staff it. Or any real justification for renting temporary space.

The Aug. 10 press release, and another bizarre press release issued Sept. 1 by the trustees, do not align with the statements the trustees made during their last public meeting. I suspect they held one or more illegal meetings to decide on these missives.

If they did not meet illegally, they can explain how they managed to get a majority to approve these announcements. So-called “bicycle meetings” in which one person talks to another who talks to another, are not allowed under the open meetings law, as any competent local government official knows.

Check out the meeting for yourself. The Anchorage office discussion starts about an hour-and-a-half into the proceedings.

The Sept. 1 press release was probably a response to the column from former Gov. Frank Murkowski taking the trustees to task for the Anchorage office expansion.

The Anchorage Daily News published the Sept. 1 press release on its website Tuesday, asserting it was written by the five trustees. The newspaper has not reported on the contradiction between the marching orders accepted at the July 12 meeting and the press release.

The trustees met one way or another to decide on their response, which came in advance of a two-day meeting in Juneau this week, at which they are set to approve the temporary Anchorage office.

The fund now wants to lease a small space for the balance of this fiscal year for the temporary office, office quarters not used by the Department of Environmental Conservation on Cordova Street.

They plan to spend $30,000 on rent and $22,500 to move three employees to the temporary digs.

For the fiscal year that begins next July, the fund will rent a bigger and better permanent office, costing $200,000 in rent a year, with $100,000 for furniture, $200,000 for “buildout,” $200,000 for wireless services, $20,000 for temporary Juneau housing for Anchorage employees and $38,000 to move employees to Anchorage.

For a $75 billion fund, the “temporary” office is an embarrassing and inept way to handle questions about office space, one that will surely cause potential job recruits to doubt the people setting policy for the fund. The incident reeks of political interference.

At the public meeting in July, the trustees said they were satisfied that Barnhill, the chief operating officer, would report back in September with details on how a handful of fund employees could be moved to Anchorage.

“We need to plan appropriately,” Barnhill said July 12. “But at this point no one is saying no.”

Barnhill said there were three employees who wanted to move in the next two years and two other employees who might want to move. The fund has a workforce of more than five dozen in Juneau.

“There are timing issues with respect to each of these. There are experience issues and obviously we don’t have an Anchorage office at this time, but we do have the possibility of providing remote work options for these people in advance of opening an office,” Barnhill said.

The trustees accepted the Barnhill pledge to report back.

The trustees, with Dunleavy attorney Craig Richards, “Dunleavy investment whisperer" Gabrielle Rubenstein and former DEC Commissioner Jason Brune the most insistent—have it in their heads that a physical Anchorage office is what they need to recruit new employees.

A Permanent Fund policy that allows employees to live in Anchorage, but work in Juneau, is unacceptable to them for some reason.

On Aug. 17, I asked the Permanent Fund corporate office if the governor’s office intervened in this manner with the CEO or the trustees. I also asked when the trustees abandoned the agreement with Barnhill to wait for more details.

The corporation never replied to the question about Dunleavy, merely saying, “This satellite office has been part of the APFC’s strategic plan for the past four years. The board has made the policy decision to act now on expanding the APFC’s in-state presence to improve retention and recruitment of key decision-makers that will help strengthen APFC in the long run.”

That’s not what the board decided in public. It’s what the board decided in secret.

This is a worrisome episode that is far more important than whether and when a temporary Anchorage office is established in vacant office space not being used by the Department of Environmental Conservation.

It illustrates the lack of internal and external controls necessary to insulate the corporation from politics.

Blame this on the individuals selected by Dunleavy and by the structure in state law that allows for no legislative role in the selection process of trustees and no confirmation vote. The trustees haven’t spoken out about why the informal agreement they made in July was abandoned.

Add to that the failure by the Legislature to perform the legally mandated oversight of the Permanent Fund and the danger signs should be obvious to all.

The structure created more than 40 years ago makes the fund susceptible to underhanded pressure tactics if the governor opts to govern that way.

That’s what is happening here. Again.

Opposition by Rodell to the demand by Richards that an Anchorage office be opened was a key reason for her firing in late 2021.

Rodell said in a deposition that she thought it would be a waste of money to have two offices in Alaska and that if a second office would be started it should be in a financial center where the fund actually makes investments, such as New York, Chicago or Toronto.

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