Bloated political egos and the Permanent Fund's rushed plan for temporary quarters in Anchorage

The Alaska Permanent Fund Corporation’s makeshift plan for a temporary new 1,200-square-foot office in Anchorage is what happens when bloated political egos get in the way of what should be the only priority of the trustees—overseeing the management of a $75 billion fund.

The corporation staff threw this mishmash together in less than a month, facing political pressure from the governor and individual trustees who live in or near Anchorage and want the corporation to have an office in Anchorage.

The corporation lost its chief operating officer a month ago because of the turmoil. He had been tasked by the trustees in July to develop details for the Anchorage expansion in a way that would best meet the needs of the fund.

But that was lost in the back-channel campaign to open a satellite office—any office in Anchorage—to please trustee Craig Richards, who worked for Dunleavy opposing the recall, and has been joined in the Anchorage obsession by Gabrielle Rubenstein and Jason Brune.

Ethan Schutt, the chairman of the trustees, who is the best of the bunch, warned his fellow board members in July about micromanagement, advice that the entire group should have heeded.

“I think we need to give you space to do the things that you are working on,” Schutt said to Barnhill July 12, “because we are way down into the weeds of trying to direct your every little move here. From what I have seen in the back and forth, you understand what the objective is. And I would just urge my fellow trustees, let’s let them do their work and figure it out.”

“I’ve been on the other end of this where boards tell management what to do down to the little details and it’s very frustrating,” Schutt said.

Richard, Rubenstein and Brune were way down below the weeds, claiming that all job vacancies for the Permanent Fund be listed with Anchorage as a place of work as that’s the only way to get employees.

Rubenstein complained that the proposed policies about remote work the staff wants the trustees to consider and work through were too complicated.

That is ridiculous. Any competent person applying for work at the Permanent Fund could understand these options. The trustees haven’t done their work.

Schutt should have held his ground in the secret exchanges that followed with other trustees and the staff, but he did not, joining the other trustees in the two press releases that came about because the trustees refused to allow the Permanent Fund staff to “do their work and figure it out.”

As Schutt warned, the trustees went “way down into the weeds of trying to direct” every little move. The consequence of doing so is that there is less time to think about that $75 billion responsibility.

The trustees will claim they did not meet in secret. Perhaps they used telepathic communication.

Here is a memo that Barnhill wrote last spring on issues related to the Anchorage move.

The documents prepared for the meeting today in Juneau include conflicting statistics about the immediate cost of the temporary quarters in Anchorage.

On one page the corporation says it is asking to transfer $22,000 from consulting to rent payments for temporary space from October 1 until next June. The fund will sublease space from the Department of Environmental Conservation on Cordova Street in Anchorage.

Two pages later, the corporation says the rent for this fiscal year will be $30,000, not $22,000. It says the fund will pay an estimated $22,500 to move employees to Anchorage.

One of the three who wants to move is Marcus Frampton, the chief investment officer. The corporation says that Frampton “is supportive of the opening of an Anchorage office to optimize the potential for recruiting and retaining talent. Given the number of Investments staff remaining in Juneau, he intends to spend meaningful time in both offices.”

The permanent office in Anchorage could cost $200,000 a year for rent. There would be $100,000 for furniture, $200,000 fore wireless equipment, and $38,000 more for moving employees.

The fund plans to pay $20,000 to provide temporary Juneau housing for new Anchorage employees when they are in Juneau for training.

The travel budget for this year is $800,000. That would go up by $223,000 in large part because fund managers would have to travel to Anchorage to work with employees in that office.

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