Alaskans to need to hear from Dunleavy on procurement violations in Penney no-bid contract

The no-bid deal with Clark Penney is no more.

According to the Associated Press, it was Penney who decided to pull the plug this week, immediately ending the $8,000-a-month consulting contract that Gov. Mike Dunleavy does not want to talk about. This will save the state $300,000 or so over the next two-and-a-half years.

Portraying Penney—and not Dunleavy—as the decider may well be an attempt by the governor’s office to prevent full disclosure of how the state violated and ignored many procurement regulations last year in steering a $441,000 contract to the grandson of a big Dunleavy donor, Bob Penney.

Clark Penney, hailed by Dunleavy cheerleader Suzanne Downing as a “rainmaker” who doesn’t really need state money, said the contract had become a distraction. Downing says this started because Dunleavy wanted a “trusted ally” and Penney fit the bill.

The contract cancellation is an effort to distract Alaskans from the circumstances under which the contract was created and the rules that the Dunleavy administration did not follow. It appears to have originated in the governor’s office with negotiations conducted by the commerce department on a deal inked by the Alaska Industrial Development and Export Authority.

While the governor has pleaded ignorance about the contract, he has also promised to reveal all to the public at a future press conference. Pressure from the Legislature will be needed to make sure that happens.

“To answer your question, we’re looking into all of the details surrounding that contract and other contracts and once we are finished with our deep dive, we will come out and will have a presser on it,” Dunleavy told the Juneau AP reporter at a press conference last month.

“We’re looking into it and we will get to the bottom of whether there was anything done improper and we will have a press conference on that,” Dunleavy said on Feb. 19.

“We’re gonna find every piece and every detail. We want to be 100 percent sure because the governor’s office is a big office,” he said. “I know there’s the implication that there was a sweetheart deal with an individual. We want to make sure that there’s nothing been overlooked and there’s been no mistakes. We want to look into this thoroughly.”

It’s not an implication. It was a sweetheart deal. Even the shallowest of dives into the document pool reveal that.

I haven’t seen anything to suggest that Penney did something wrong in accepting a no-bid contract bestowed on him by a grateful governor. But it’s clear that the procurement regulations designed to prevent insider dealing were violated in the process.

Barry Jackson, a retired state employee who supervised the Anchorage office that dealt with state contracts for 25 years, has helped me analyze what happened and when. Jackson has taken all of the public documents released so far and created a chronology that illuminates a disturbing pattern of ignoring procurement rules.

This 63-page chronology includes links to the documents, as well as to state contracting forms and a variety of news reports. This compilation and his accompanying analysis are essential reading for anyone who wants to follow the money.

Jackson has taken the jumble of emails released last summer and tracked the step-by-step process. His painstaking investigation is the best account available to the public.

Jackson did not get paid by anyone to provide this exhaustive review of the documents. He said he spent his career in procurement and believes the rules about competition and no-bid contracts need to be followed.

There are many questions highlighted in his analysis, some of them created because of information gaps in the series of emails, such as who chose Penney in the first place.

A related question is why did top officials of the commerce department negotiate a contract that was intended to be issued by AIDEA, a contract that had not been reviewed or approved for a waiver of competitive bidding rules?

A key finding of his analysis is that the first state contract signed with Penney actually expired on June 30 and the document signed the following day for an extension was illegal because the contract was no longer in place.

The Dunleavy administration, worried about the recall, wants to make all of this go away. It’s too soon for that.

Here is Jackson’s invaluable investigation of the publicly available evidence.

After looking deeply into this transaction to give a sweetheart contract to Penney, and talking with trusted sources with deep knowledge of the contracting practices of Dunleavy appointees, Jackson is convinced that there's more here. 

He says he has reason to believe the Penney contract isn't the only failure to obey the state's rigorous procurement regulations and procedures. He expects to take a "deeper dive" into other potential violations and erosions of the procurement rules that guarantee trustworthy expenditures of state of funds. 

We're going to dive together. Stay tuned.

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