AIDEA's new leadership will correct this misunderstanding propagated by Dunleavy's crew

The next person hired to lead the Alaska Industrial Development & Export Authority must understand that every dollar the state-owned corporation handles belongs to the public.

The current AIDEA executive, former Dunleavy chief of staff Randy Ruaro, consistently claims that the hundreds of millions of public funds under AIDEA’s control are not state funds. He’s wrong about that.

It is politically convenient to pretend that AIDEA money is not state money. It allows Ruaro and AIDEA employees to try to avoid the checks and balances built into a system in which the Legislature retains the power of appropriation over all state funds.

I am confident that the next governor, Jonathan Kreiss-Tomkins, will correct this situation by appointing board members with a better understanding of how AIDEA fits into the overall picture of state government. That won’t destroy AIDEA. It will make it more responsive to the public and rid the state agency of some of its worst habits.

On November 4, at one of Ruaro’s final meetings as executive director of AIDEA, the AIDEA board opened the public comment period—not by listening to a member of the public—but by inviting Ruaro to speak about AIDEA.

After eight years under Dunleavy, the AIDEA board acted as if it was normal for a public comment period to consist of a self-serving lecture from the executive director about things he claims the public is too dense to understand.

Ruaro opined at great length about the many things about AIDEA that he claims are “persistently misunderstood” by some members of the public.

The long-time state employee claimed one of those things is the nature of the money handled by the state-owned corporation and who it belongs to.

“AIDEA’s funds are not state funds. They are not controlled by the Legislature, except for our operating budget, which is an exception in the law. And also our dividend can be allocated to whatever uses the Legislature wishes to approve. So if people are writing in or gonna testify that they’re concerned about use of public funds, state funds, that’s actually not the law and it’s inaccurate. Although it's often put out there by people that oppose AIDEA or oppose resource development. They’ll make that argument that AIDEA is using state funds and it’s not accurate,” said Ruaro.

Ruaro received no pushback on his deceptive claims from the rubber-stamp AIDEA board.

It is true that the Alaska Legislature long ago inserted a line in state law that says, AIDEA’s funds “may not be considered or constitute money of the state.”

But that line has been “constitutionally suspect” even longer, according to legislative attorneys, because it allows AIDEA earnings to be treated as a dedicated fund, which is banned by the Constitution.

“Opinions from both the attorney general and the Alaska Supreme Court align with the conclusion that the legislature has the constitutional power to appropriate money from AIDEA,” Legislative Counsel Ian Walsh wrote to Rep. Ky Holland in a memo dated February 2.

Contrary to Ruaro’s claims, that makes AIDEA funds state funds.

“A statute that violates the dedicated funds clause is unconstitutional and unenforceable,” Walsh wrote.

Milt Barker, one of the few Alaskans who qualifies as an expert on AIDEA history, says it has always been clear that the Legislature has the ultimate authority, not the AIDEA board. Barker has more than a half-century of experience with the finances of our state government as an employee and consultant.

“AIDEA's first breaths of life were succored by the dissolution of not one, but three, independent state corporations, and the transfer of all of their assets and liabilities to AIDEA. AIDEA would not be immune to the same treatment,” said Barker, a former AIDEA board member.

The latest AIDEA audit says the agency had $468 million in cash as of June 30, with $132 million of that committed for loans to HEX Energy LLC and Alyeschem LLC.

That left $336 million, but AIDEA has rushed several investments since then that may consume most of that money before Dunleavy leaves office next month. The agency has diverted more than $225 million into various projects in the final days of the administration.

It appears the goal is to lock up as much money as possible into projects supported by Dunleavy. There has been little to no public review of how AIDEA is handling this state money.

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