AG gives former employer $350,000 no-bid contract to review Crum's $50 million deal

Attorney General Stephen Cox, who once worked for Wilmer, Cutler, Pickering, Hale & Dorr, LLP, gave the Washington, D.C. law firm a $350,000 no-bid contract to review the DigitalBridge investment by Adam Crum.

Cox signed the contract October 21, listing Deputy Attorney General Cori Mills as the project director. Here is the contract.

Cox claims that the amount the state is paying the attorneys per hour is confidential business information and can’t be released to the public. The Dunleavy administration has a pattern of choosing to define the information as confidential.

In 2023, the Dunleavy administration hit on the idea of asking law firms that wanted space at the state trough if they wanted to claim their hourly rates should be hidden from the public.

Dunleavy and former Attorney General Tregarrick Taylor invited law firms to claim their hourly rates were nobody’s business.

Now the Dunleavy administration is extending the courtesy of secrecy without even asking.

Had the AG simply told WilmerHale that if it wanted the $350,000 it would have to reveal how much the attorneys are charging the state per hour, the law firm would have signed up on the spot.

Here is the state claim about why it wants to keep the costs secret.

If Alaska really needed a law firm to conduct this work—which it doesn’t—the attorney general could have found one in Alaska with experience in dealing with Alaska’s investments. And one that does not create a conflict of interest for him.

Cox’s ties to Wilmer Hale extend beyond his direct employment with the giant law firm.

After the end of the first Trump administration, Cox was out of a job as the U.S. attorney for the Eastern District of Texas, a post he had held for seven months.

When Cox took a job with Bristol Bay Industrial in 2021 as senior vice president and general counsel, he said that his job was to establish the general counsel’s position within the company. The company is owned by the Bristol Bay Native Corporation.

He said the “best part of the job” was that he would be working with his friend Mark D. Nelson again. Both had worked in the past at WilmerHale.

The problems with this contract go far beyond the conflict of interest.

The Dunleavy administration gave WilmerHale $450,000 for a cursory review of some issues related to the Permanent Fund following the Gabrielle Rubenstein fiasco.

All that Dunleavy and Co. received for the $450,000 was this five-and-a-half page memo.

It is a superficial document that was not worth $450,000. Dunleavy’s office should have demanded and received something of more value.

Expect a similar superficial document for the $350,000 contract.

The real cost may be higher, however, as the contract says that in addition WilmerHale can employ “other consulting professionals or temporary personnel that may be employed to provide services under this agreement so long as the use of such additional personnel and their rates are approved in advance by the state's project director.”

The alleged goal is to have the law firm tell the Dunleavy administration whether Crum did the right thing in abandoning the investment strategy used for years with the Constitutional Budget Reserve and putting $50 million, or as much as $75 million, into a limited partnership of some kind.

The correct answer is that it was the wrong thing to do. Even the Dunleavy Dunderheads know that, but they won’t confesss.

Dunleavy was Crum’s supervisor and should have prevented the former revenue commissioner from directing $50 million or perhaps as much as $75 million from the Constitutional Budget Reserve into a long-term limited partnership.

It was reckless on Crum’s part to divert that money when Dunleavy and Crum have routinely laid out budget plans that would require spending all the money in the CBR to pay for state services and dividends.

The latest Dunleavy deficit plan is to spend close to $2 billion of the CBR in the next fiscal year, leaving about $1 billion, which is not enough of a cushion.

We don’t need an expensive law firm to tell us he should have kept 100 percent of the Constitutional Budget Reserve in cash or short-term investments that can be turned into cash quickly.

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