AIDEA boss protests too much about why he is keeping $250,000 analysis secret
In a letter to the editor, Randy Ruaro, the executive director of the Alaska Industrial Development & Export Authority, accuses me of making things up, waging a smear campaign and opposing resource development and jobs for Alaskans.
He is wrong on all counts.
I suspect Ruaro didn’t intend to do this, but his broadside actually confirms what I wrote here on November 26—that Anchorage consultant Northern Economics completed its $250,000 study of AIDEA’s economics early this year. I concluded that AIDEA did not like the results and refused to release the findings, claiming it was a draft and therefore secret.
Ruaro’s letter makes it clear that AIDEA is trying to reshape the finished work from Northern Economics by adding political material to the document so that it will be more lavish in its praise of AIDEA.
“The report is being revised to add discussion, reports, and information of the health and other benefits of creating family wage paying jobs for Alaskans, particularly for areas of high unemployment,” Ruaro wrote.
This disclosure by Ruaro, former Dunleavy chief of staff, raises an obvious question about why AIDEA paid Northern Economics in full early this year if the report was deficient.
The contract said AIDEA “shall withhold payment at any time the contractor fails to perform work as required . . .” This was a mandate on AIDEA, not an option.
From the start, however, the $250,000 contract for an independent analysis put Northern Economics in a dicey position regarding its reputation.
That’s because AIDEA announced the results of the future independent analysis six months before it hired Northern Economics for the job. It was as uncertain as a North Korean election.
“AIDEA Debunks Report and Announces Independent Economic Analysis,” the corporation announced on September 29, 2022.
AIDEA said the economic reports on AIDEA prepared by Gregg Erickson and Milt Barker, two experts on Alaska public policy and finances, had undermined the hard work of AIDEA employees with “disinformation being stated as fact.”
In November 2022, AIDEA said it wanted a report that "will independently examine and document the authority’s impressive economic and investment history,” as well as its “central role” in advancing economic growth. It said the report would be done by June 2023.
On February 2, 2023, AIDEA said it had hired Northern Economics and that the debunking study would be available to the public by late 2023.
AIDEA employees and board members said the study would be robust, independent and unbiased. They were confident the report would prove that AIDEA is doing a great job.
“The subject matter experts at Northern Economics understand Alaska. They understand the local terminology and will be able to get started quickly,” Ruaro said on February 2, 2023.
Julie Sande, AIDEA board member and commerce commissioner, said she was very proud of AIDEA’s accomplishments and the report would show why.
“I look forward to reading an independent report detailing the impacts made by AIDEA and their investments from Northern Economics,” she said.
“We want the Alaskan public to know how AIDEA’s longstanding loan and finance programs are benefitting them,” said Morgan Neff, then the chief investment officer of AIDEA. “We look forward to sharing the results with the public as soon as possible.”
Marcus Hartley, the president of Northern Economics, promised an “unbiased economic analysis” that would be as quick and thorough as possible.
This was all to counter the September 2022 report by Erickson and Barker, “AIDEA Cost & Financial Performance— A Long, Hard Look.”
Erickson and Barker said they received a total of $55,000 for the first report and three more released in April this year, analyzing different aspects of AIDEA’s performance.
Ruaro did not wait to read the three 2024 reports before attacking the authors, complaining about “dark money” from the groups backing Salmon State, the environmental organization that contracted with Erickson and Barker.
Here is the AIDEA April 9 press release, in which Ruaro provided links to a right-wing dark money outfit attacking left-wing dark money. The groups backing Salmon State, and by extension, Erickson and Barker, are an “affront to the democratic process,” according to Ruaro.
Ruaro failed to make any mention last spring of the Northern Economics “Economic Study on AIDEA’s Economic, Fiscal and Functional Impacts,” which was already in his hands.
The robust, unbiased, independent and thorough study by a “trusted economic expert in Alaska” apparently did not live up to AIDEA’s expectations.
Northern Economics signed the contract on March 7, 2023. Ruaro signed it on March 31, 2023. The top Northern Economics employees made $215 an hour under the deal.
I think Northern Economics, hired as a debunking agent, knew it would be branded as a patsy had it reached the conclusions that AIDEA had announced in advance, so the company was careful in its year-long review.
The contract, which contains errors in grammar and usage, required Northern Economics to “Draft a final comprehensive report containing the results the robust qualitative and quantitative analyses of the authority’s economic, fiscal and functional impacts made on the State of Alaska its inception in 1967, and present said report to the authority’s management and members of its board.”
The contract also required Northern Economics to estimate the “economic contribution of the authority’s programs on Alaska employment, labor income, business volume, (economic output) and state and local government revenue . . .”
Last spring Ruaro appeared before the Senate Finance Committee to make the same claim that he has now repeated in his letter to the editor.
Below is an exchange between Sen. Bert Stedman and Ruaro, a former employee of Stedman’s. The Northern Economics report was already done and paid for, but Ruaro said it was incomplete.
Bert Stedman: "My understanding is there is a consultant the state has hired to look at the return aspects of AIDEA over time. Is that correct? To, I guess the term is, counter or give us a different view than the earlier report we had today?"
Randy Ruaro: "Through the chair, that's correct. They've been hired and we're working with them and what we're finding is that on projects like Red Dog, if you wanted to truly count the economic impacts, you're going to get into additional benefits such as the construction that's gone into the project since it was built. There's been a number of improvements, hundreds of millions of dollars in improvements, that are part of that mine that, frankly, one could say, are indirectly related to AIDEA's original investment. So, we're trying to be comprehensive and we're trying to give the full picture, which is what we think the public and legislature should see."
Ruaro can’t have it both ways. He wants to say that Northern Economics complied with the contract and earned the $250,000 it received to produce a final report, a public document.
He also wants to say the report AIDEA paid for was not finished and he is adding material to it, so the document remains a secret.
Ruaro told legislators in May that AIDEA was still working with Northern Economics. However, the company submitted its final bill on the contract more than two months before he made that claim.
As I wrote here last spring, for the sake of independence, it would have been better for some entity other than AIDEA to hire a contractor to prepare a positive study about AIDEA responding to criticism of AIDEA: “When the Northern Economics report is finally released, one obvious question will be whether the conclusions contained in the “AIDEA Debunks Report and Announces Independent Economic Analysis” press release on September 29, 2022 determined the outcome in advance.”
AIDEA’s refusal to release the report prepared by Northern Economics answers that question. AIDEA is adding more material because it didn’t like the independent analysis it paid for and wants AIDEA to be presented in a more positive light.
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