Comments on Permanent Fund plan take issue with every big item in it

The public comments posted to date on the proposed strategic plan for the Alaska Permanent Fund Corp. provide a great deal of solid advice to the trustees who will meet February 15-16 to act on their goals for the next several years.

We’ll see if anyone is listening.

Here are the comments received by the corporation as of February 6. The corporation should keep updating this daily list to allow members of the public to see what other people are saying.

Read those pages and you will see skepticism and opposition regarding: the notion of borrowing billions so that billions more can be invested to produce billions more in income; the dream of “outperformance through the generation of alpha”; the idea that the corporation needs to keep the names of applicants for its top job secret; and the wish to open satellite offices in the Lower 48 or in foreign lands.

If you have not commented on this plan, please consider doing so. The Fairbanks Daily News-Miner has provided some coverage, but other news organizations have not and the fund has not publicized the chance to make comments on its strategic plan.

Here is the presentation on the strategic plan prepared by the corporation.

Here is the memo that corporation prepared to explain the strategic plan.

Here are my comments on the strategic plan:

I don’t agree with the idea that the fund should borrow several billion dollars so that it will have more money to invest and may generate greater profits, speeding the path to $100 billion.

When you talk about this with the public, you need to say you are trying to make money with borrowed money. Drop the words “tactical leverage at the fund level,” as that disguises the situation with jargon.

I don’t agree that the fund needs changes in the Open Meetings Act. The trustees and the corporation need to be more transparent about what they are doing and exactly what is invested in the names of Alaskans. The trustees need to stop complaining about the burden of meeting in public.

I don’t agree that the names for applicants for the fund leadership should be kept secret. You can interview finalists in public and in private. You are not under a legal obligation to interview people in public.

I don’t agree that the fund needs offices in the Lower 48 or overseas. The fund also does not need an Anchorage office, as clearly demonstrated by the ability to allow people to work remotely. The process by which the Anchorage office was ordered into existence last summer gives me great concern. It was either directed by the governor’s office or decided upon by the trustees in an illegal meeting, which led to the loss of your chief operating officer several months after he took the job.

I do agree with having the fund do much more to inform Alaskans about the fund, its operations and how it is not the dividend fund. This outreach should include explanations in clear English, not in business jargon. Please retire the phrase “outperformance through the generation of alpha” permanently.

I do not agree that the fund needs a global communications plan, whatever that may be. You do not need a “global financial media consultant.”

What the strategic plan lacks is any effort by the trustees to examine the weaknesses in the current structure, which made sense 40 years ago when the fund was tiny and its investments were simple.

Far too much power to control Alaska’s most important financial institution is vested in one individual, the governor, who appoints all six trustees, who do not have to be confirmed by the Legislature.

The law establishing the current structure is long overdue for examination. We need to create a stronger board of trustees to deal with the complexities that no one dreamed of four decades ago. This is essential to build and maintain public trust.

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