Gov. Mike Dunleavy led a successful pressure campaign to block a $150 million bond proposal with Wells Fargo Bank proposed by the staff of the Alaska Housing Finance Corporation.

That’s according to Fairbanks Mayor David Pruhs, an AHFC board member, who praised Dunleavy for leading the charge to get the board to kill the deal.

The $150 million plan with Wells Fargo Bank died for political reasons, not for financial reasons. It was “political correctness payback” against Wells Fargo, Pruhs said.

Pruhs described the situation Friday on his Fairbanks radio show, echoing the claims made by Dunleavy over the years that Wells Fargo opposes development in Alaska and doesn’t deserve state business.

“We’re not giving a company who does not let Alaska develop its resource—we’re not giving them a profit from our business. If you’re not gonna do business with us, we’re not gonna do business with you,” said Pruhs.

“Finally, I got a political correctness payback and I enjoyed it,” he said. “So kudos to Governor Dunleavy for leading that. And his staff. Kudos for Bryan Butcher, the executive director, and Brent LeValley, the chairman of the board of the Alaska Housing Finance Corp. Kudos to Mike Cronk who publicized it.”

The AHFC board includes four members appointed by the governor and three Dunleavy employees. It is supposed to be independent, but isn’t.

Nothing in the financial policies of AHFC mentions “political correctness payback” as a valid factor in rejecting a business deal reached through a competitive process. Here are the AHFC fiscal policies.

In 2022, AHFC started the competitive process to find the most qualified entities to sell the bonds for AHFC.

The highest score on the 2022 RFP went to Jefferies, which was named as the senior manager for $125 million in bonds. The second-highest score went to Wells Fargo.

AHFC assigned $125 million to Jefferies in 2923, and the staff recommended that Wells Fargo handle $150 million this time around.

The competitive approach was to achieve the “optimal financing structure and lowest borrowing costs.”

“A committee evaluated all responses based on bond structure, pricing spreads, total costs, banking firm and relationship with AHFC,” AHFC said.

The evaluation did not make allowances for political interference by the governor and his ability to direct a board made up of his supporters.

On Facebook, Cronk lauded Dunleavy for his intervening with AHFC. Cronk also exaggerated the position taken by Wells Fargo, claiming it has an “anti mineral loan development policy for Alaska!”

The bank has a more nuanced position than that. It says it won’t finance companies that make most of their money in coal. And it won’t “provide project-specific direct financing in the Alaska Arctic region for projects that fall within the scope of the Equator Principles.”

The Equator Principles are a financial industry benchmark for the assessment of environmental and social risks. In March, the bank withdrew from the “Equator Principles Association, but said it would incorporate the principles where appropriate.

About mining, Wells Fargo says:

“We recognize the significant environmental, social, legal, regulatory, reputational, and other impacts and risks facing the mining industry. Our tailored approach to assessing risks of financing coal and metal mining clients includes, but is not limited to, their ability to mitigate risk associated with impacts on community, human rights, Indigenous Peoples, tailing ponds, climate impacts, water and waste management, health and safety, natural resources and biodiversity, and sensitive geographies.”

“Wells Fargo will not provide project financing or other forms of asset-specific financing associated with the expansion of an existing, or development of a new, coal mine, or development of a new coal-fired power plant. Coal-fired power plants utilizing carbon capture and sequestration technology will be considered on a case-by-case basis,” the company says.

Dunleavy began talking about refusing to do business with banks that didn’t favor Arctic oil drilling in 2019, but his desire for a state ban never advanced much beyond a few angry press releases and Tweets.

“We do a lot of business with Goldman Sachs. We’re gonna have to re-evaulate that, have a discussion with them,” Dunleavy said in December 2019 on Fox. “We are an oil state.”

He ordered the “removal of Goldman from business relations with the state” in cases where it would not cost the state money, according to a Dec. 20, 2019 letter from Mike Barnhill, then the acting revenue commissioner.

In February 2020, JPMorgan Chase joined the global campaign against bankrolling Arctic oil and gas investment.

JPMorgan, the biggest US bank, was the company that once employed Francis Dunleavy, the brother of Mike Dunleavy, who spent hundreds of thousands on the 2018 gubernatorial election.

On Feb. 25, 2020, Mike Dunleavy said that “Alaska has a right to not invest money in groups like” JPMorgan Chase.

Later that day, Jason Brune, Dunleavy’s commissioner of environmental conservation, complained about the Permanent Fund investing in JPMorgan and posted a photo on Twitter of the pieces of his JPMorgan credit card. “Speaking with my wallet, or rather, no longer with my wallet,” Brune said. He is now the chair of the Permanent Fund trustees.

“Given the company’s recent actions, a change in the relationship should be expected going forward,” Dunleavy PR man Jeff Turner told the Anchorage Daily News about Goldman.

Ten months later Dunleavy claimed he had a bill ready for the Legislature to get the state to stop doing business with any financial institution that refuses to finance oil and gas projects in Alaska.

“It makes no sense for Alaska to allow financial institutions to benefit handsomely from Alaska’s financial activities on one hand, while working against our interests on the other,” said Dunleavy on Dec. 14, 2020.

Refusing to do business with major banks as a political protest against private industry would force Alaska into more costly alternatives, but Dunleavy and his staff never admitted this in public.

I may have missed it, but I don’t believe that there was a Dunleavy bill to ban the state from doing business with private banks that weren’t financing Arctic oil and gas drilling. That didn’t stop him from telling AHFC to ignore its competitive process in trying to get the best bond deal for the state.

Your contributions help support independent analysis and political commentary by Alaska reporter and author Dermot Cole. Thank you for reading and for your support. Either click here to use PayPal or send checks to: Dermot Cole, Box 10673, Fairbanks, AK 99710-0673.

Write me at dermotmcole@gmail.com.