Legislators seek to close Permanent Fund's new 6-employee Anchorage office

The new Anchorage office of the Alaska Permanent Fund Corporation, located just across from the Memorial Park Cemetery on Cordova Street, should be shut down to save about $170,000, according to draft budget language moving through the Legislature.

The proposed intent language from lawmakers is aimed directly at the trustees of the fund:

“It is the intent of the Legislature that the Alaska Permanent Fund Corporation will not establish or maintain new office locations without corresponding budget increments for that purpose. It is further the intent of the Legislature that the Alaska Permanent Fund Corporation shall provide a report to the finance committee co-chairs and the Legislative Finance Division by December 2024 that details any actual expenditures to date related to the Anchorage office.”

The closure of the six-employee office would save about $160,000 or $170,000 in rent, travel, furniture, etc., according to the House budget subcommittee that proposed the reductions.

This is not about the money. It’s about the power of the Legislature to write the budget.

It’s about political interference. It’s about the trustees micromanaging and losing sight of what’s really important in overseeing Alaska’s most important financial institution.

And it’s about the trustees of the fund taking official action in violation of the open meetings act.

Here is a detailed account I wrote about this situation September 5.

Here is a followup post from September 26.

The Anchorage office, which has only six employees, was the result of a political power play last summer by the trustees, who wasted time and money that should have been spent elsewhere.

The fund trustees, led largely by Craig Richards, Gabrielle Rubenstein, Jason Brune and Adam Crum, have been obsessed with the idea of opening an Anchorage office. They made exaggerated claims about how great this would be for recruiting new employees and keeping old ones.

At a public meeting in July, the trustees had agreed to wait to hear a detailed plan in September on a proposal to open an Anchorage office.

They kept their objections to themselves, however, and privately came up with an ultimatum that did not allow for any delay.

On August 5, the trustees ordered the corporation to immediately announce the opening of an Anchorage office in temporary quarters that had been used by the Department of Environmental Conservation, which Brune headed.

This directive led to the immediate resignation of the chief operating officer of the fund, Mike Barnhill.

We know some of what happened because of emails released last summer under a public records request by Jeff Landfield seeking details on Barnhill’s unexplained resignation.

My guess is that Gov. Mike Dunleavy brought pressure on behalf of his political allies on the trustees, leading to the August 5 email at 10:45 a.m. in which Executive Director Deven Mitchell ordered Barnhill to announce the Anchorage office without delay.

Mitchell explained a half-hour later to the fund’s attorney, Chris Poag, why he considered the immediate announcement urgent. The corporation redacted his reasons for urgency, so we don’t know why Mitchell considered the move such a big deal. Again, I suspect some of the trustees called for backup from the governor’s office and got it.

Barnhill, who has shown over the decades that he can adapt his performance in his various state jobs to the politics of whoever is in charge at the moment, did not accept this order the way Mitchell expected he would. He refused to go along with it.

“I probably need to resign,” Barnhill wrote Mitchell on Sunday, August 6 at 8:09 p.m. “I’ll think about it overnight and let you know.”

Mitchell’s reaction was the same that others had later on when learning about Barnhill’s objections.

“Why?! This isn’t you,” Mitchell replied at 8:42 p.m., in an email that included another redaction, that probably explained why “This isn’t you.”

About 25 minutes later Barnhill sent a two-word email to Mitchell: “Hard pass,” followed five minutes later by a note that said, “I am not seeing a way for me to reasonably continue” and “I am heading down to clear out my office.”

Mitchell replied at 9:19 p.m. to say he would call Barnhill Monday morning, “let’s not be too rash at this point.”

Rash or not, Barnhill resigned Monday at 8 a.m., according to an email he sent Mitchell on Tuesday.

On Thursday of that week, the Permanent Fund corporation posted a bizarre press release on its website announcing that the corporation had decided to open a satellite office in Anchorage. The new office would support the recruitment and retention of employees, it claimed.

This announcement did not reveal what really happened or how an ultimatum was given to the corporate staff by the chairman of the trustees, acting on behalf of the entire group, and perhaps with backup from Dunleavy.

On September 1, the trustees posted a press release expanding upon their Anchorage edict, but never mentioning how they had ignored the open meetings act to do so. They said the move had been part of the strategic plan since 2020.

Ethan Schutt, the chairman of the trustees, told me he had not communicated with the governor’s office in all of his time as a trustee. I’m sure that most or all of the other trustees do communicate with the governor’s office.

“I’m fully aware of how the world works, so I assume some, or maybe all, of the three other public members communicate with the governor's office from time to time but I don't want to speculate as to the frequency or topics of those communications,” said Schutt.

In the Juneau budget hearings, the lack of planning that preceded the opening of the new Anchorage office has been made painfully obvious. There is nothing other than the insistence of the trustees backing up the decision—which allows almost any employee to live and work in Anchorage, regardless of what that means to the efficiency of the office.

“When we initially hire employees that might be based in Anchorage, we have built a program where they would first come to headquarters in Juneau for three months to get their feet on the ground, as it were, get a better understanding of the corporation and our culture, and the broader team, prior to moving into the smaller office in Anchorage. And there’s a cost associated with that,” Mitchell told the Senate revenue subcommittee.

“We’ve extended the opportunity to all of our employees. And we extend that opportunity to new employees as well. And we’ve recruited for new employees with an allowance for almost all positions, other than those that might have to be physically doing things in Juneau, that they could work out of either the Juneau or Anchorage office,” Mitchell told the Senate subcommittee on the budget on February 20.

Sen. Forrest Dunbar asked Mitchell what would happen if the Legislature cuts out the money for the Anchorage office.

“That’s an interesting question. I think that we would likely give those employees the opportunity to work remotely from Anchorage. We would give them the opportunity to move back to or move to Juneau, as well, if they wanted to work out of an office.”

Mitchell said he is not sure if the six employees would stay with the corporation, quit or work remotely.

Sen. Kelly Merrick asked if the trustees would move money around in the corporation budget again to pay for the Anchorage office if the Legislature refuses to include this item in the budget.

Mitchell said, “it would not be outside the realm of potential that the board would direct that action again in the future, if there wasn’t otherwise specific funding provided.”

That would be yet another mistake by the trustees. If this office remains open, the corporation will have to assign someone to inform every member of the public who walks in the door or calls that the employees have nothing to do with the Permanent Fund Dividend.

There has been little discussion, if any, in this slipshod process, about the workplace inefficiencies and supervisory problems created by opening an Anchorage office with six employees when 90 percent of the corporation’s employees remain in Juneau.

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