Dunleavy to scrap $50 million AIDEA budget request that would never have been OK'd

The Alaska Industrial Development & Export Authority has invented another story about why it doesn’t need the $50 million from the Legislature that Gov. Mike Dunleavy claimed was an immediate priority in December.

This week the Dunleavy administration is going to officially abandon the effort to give AIDEA—which has plenty of cash reserves—$50 million more, Randy Ruaro, the head of AIDEA, told the Senate Finance Committee Monday.

The reality of this situation is that there was never a chance that the Legislature would approve the $50 million request from Dunleavy because AIDEA already has hundreds of millions.

AIDEA is led by a former Dunleavy employee and a board of Dunleavy supporters, who would like to have more money and avoid the legislative budget process and public hearings.

In January, Ruaro told the House Finance Committee that AIDEA didn’t need the $50 million, but it would be great to get $50 million from the Legislature. (If you ever want to kill an appropriation, say that you don’t need the money.)

Last week Ruaro told a different story to the Senate Resources Committee. He claimed that since AIDEA no longer planned to transfer up to $50 million in advance out of its account, the Dunleavy plan was not needed.

He claimed, “We found a way to do a conditional guarantee that has the funds not leaving AIDEA’s bank, so to speak. Before that, the thought was that we’re gonna have to do a letter of credit, we’re gonna have to transfer funds out of AIDEA’s hands. And that we would lose the ability to earn interest even on those funds.”

“And so because of the changed circumstances from when the appropriation was initially thought of to now, we felt it best not to burden the Legislature with the appropriation request in a tight budget year. We can manage it and get by you know without that added weight, I guess, to the budget."

But Ruaro was spinning a fable about “changed circumstances” because there never was a plan for the money to leave AIDEA's accounts, according to what Frank Richards of AGDC said on Dec. 13 at his board meeting.

Ruaro should burden the Legislature with the truth, which is that AIDEA exists in the land of plenty. The AIDEA board signed off on the $50 million gasline backstop plan in early December on its own, without going through the legislative budget process.

Richards is the president of the Alaska Gasline Development Corp., which wanted the $50 million to guarantee that a pipeline company that does front end engineering and design on a proposed pipeline can get its money back if it drops the project.

“AIDEA in its role will be able to then hopefully provide a standby letter of credit which will stay in the AIDEA accounts, generate interest which remains available to AIDEA, and only draw on this if a final investment decision is not made to move the project forward,” Richards said in December.

This was one day after Dunleavy's budget announcement on Dec. 12, proposing to give AIDEA the $50 million it doesn’t need.

Ruaro’s claim that the $50 million plan was reviewed in public by AIDEA in detail at three public meetings is false.

The topic is not mentioned on the minutes of AIDEA’s Sept. 11 meeting.

The minutes of the Oct. 23 meeting show that AIDEA support for $50 million was not mentioned, but “AGDC is currently raising equity capital to provide for a FEED backstop with a pipeline operator for up to $50 million.”

The minutes of the Nov. 7 meeting do not mention the $50 million plan.

AIDEA approved the $50 million plan December 4.

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