Whither the Alaska Development Team?

In 2019, Gov. Mike Dunleavy’s office helped engineer a no-bid contract with Clark Penney to supervise the Alaska Development Team, with a cost of up to $441,000 through June 2022.

Penney, grandson of a big Dunleavy benefactor, was hired to be managing director of the team, promoting everything from gambling to the Alberta railroad. He said he had “Conversations with the Governor on Vision” at the start of his $8,000-per-month gig.

The sole-source justification for the Penney contract was created after the decision had been made to give Penney a contract.

Suzanne Downing, the voice of the Republican Party, said Penney was a “trusted ally” and Dunleavy wanted him because he was a “rainmaker,” who didn’t need state money.

Clark and the Dunleavy administration ended their relationship a year ago after state officials declined to give straight answers at legislative hearings on the origins of the contract and numerous violations of state procurement regulations.

“The commissioner of the Department of Commerce and Economic Development and the CEO/executive director of AIDEA provided conflicting, inconsistent, and in some cases false statements about this contract to legislative committees,” Reps. Zack Fields and Jonathan Kreiss-Tomkins wrote a year ago Wednesday.

“We request that you correct the record and provide a simple answer to the question: Who directed the state to issue this contract?”

At a press conference Feb. 19, Dunleavy refused to reveal the role of his office in the contract, but made several false allegations about Fields and Kreiss-Tomkins. He promised he would eventually say where the Penney contract came from.

“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 we will have a presser on it,” Dunleavy told reporters in Juneau.

“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.

“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 on Feb. 19. “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.”

Penney tried to end the discussion of his contract two weeks later by terminating his participation, saying it had become a “distraction.” The attorney general’s office told the Associated Press that at Dunleavy’s request the state was still reviewing the contract.

“Fields, an Anchorage Democrat, said he considered it a victory ‘that we aren’t going to be squandering any more money’ on the contract. But he said an answer still is needed on who directed the contract,” the Associated Press reported on March 4, 2020.

I suspect that even the shallowest of dives would have revealed that the contract was created, as Downing said, by the governor for a trusted ally, which is why nothing more has been heard about the dive or the long-promised “presser.”

In December 2019, Dunleavy’s 10-year budget outlook claimed that the development team would be an essential element in creating a stronger economy for Alaska.

“Instead of subsidizing desirable but unprofitable activities, the ADT (Alaska Development Team) is directed to work with Alaska businesses, state and federal agencies and departments, economic development organizations, industry organizations, and chambers of commerce (collectively “Alaska’s Stakeholders”) to identify and facilitate the removal of barriers to doing business in Alaska, to help retain and grow existing industries, to attract new opportunities to Alaska, and to deliver the message to investors and industry participants the benefits of doing business in Alaska,” the state said.

In December, 2020, the development team was entirely gone from the 10-year budget outlook.

It’s possible the team is on the way out. The governor plans to eliminate one team vacancy and transfer two state jobs to the governor’s office.

Dunleavy has proposed eliminating a vacant “development associate” team position established in 2019, but never filled, while transferring development team employees to the governor’s office to “manage economic development activities at the statewide level.”

“This realignment will allow cabinet-level focus on engaging the business community and outreach, as well as direct coordination with the governor’s office and the governor on the economic impact of policies across departments,” the proposed state budget says.

This is bureaucratic doubletalk because the Dunleavy administration said it created the Alaska Development Team to manage economic development activities at the statewide level and is now transferring it for the same reason.

In February 2020, John Springsteen, deputy commissioner of the commerce department, told legislators the development team would bring statewide coordination, above. In February 2021, as seen below, the state says transferring jobs to the governor’s office will bring statewide coordination.