AIDEA releases a promotional brochure, claiming this is the $250,000 economic study kept secret for two years

To no one’s surprise, the Alaska Industrial Development & Export Authority claims that a study by Northern Economics portrays AIDEA as a great financial success.

The executive summary released Tuesday is not so much a study, however, as a self-promotional brochure that cost the state more than $250,000 and falls short in every respect.

Northern Economics finished its study two years ago and was paid in full, but the Dunleavy administration buried the document and it has never been released. We have no idea what it contains because AIDEA had the document rewritten by Northern Economics, which is still allegedly making changes to the full study.

The company has kept its name on the summary, but no names of researchers are included. No one from Northern Economics appeared at the legislative committee Tuesday to explain its conclusions.

AIDEA says it will release the full report “quite shortly,” perhaps in a week or so.

Northern Economics was paid in full two years ago, but AIDEA gave the company $18,000 more last fall for this report and the company is allegedly still working on the finishing touches.

AIDEA says the “cumulative economic output” of AIDEA’s direct investments and its loan programs is $60.1 billion, with the Red Dog mine responsible for $23.7 billion of that amount.

This is a major point of contention.

In September 2022, Alaska economists Gregg Erickson and Milt Barker, two of the leading experts on the history of Alaska’s state government, did a financial analysis of AIDEA.

As I wrote at the time, their review paints a paints a devastating portrait of AIDEA’s financial performance, where politics has almost always trumped economics.

One of the major points by Erickson and Barker was that even AIDEA’s consultants had concluded that the Red Dog project would have gone forward with or without a state subsidy.

“If there is a poster child for AIDEA playing an active role in financing economic development, it is the Red Dog Mine. But, an AIDEA consultant for the project, SRI International, expected the mine to be highly profitable even under the unrealistic assumption that it would be wholly financed with private equity,” Erickson and Barker said.

“AIDEA makes economic development expensive in part because of the poor financial performance of AIDEA’s economic development investments,” they wrote in AIDEA Cost & Financial Performance— A Long, Hard Look.

“We documented that since AIDEA’s inception, the majority of its 26 projects have either produced no new jobs, floundered or gone bankrupt,” Erickson wrote in February 2023.

AIDEA hired Northern Economics with a political goal—attacking the conclusions of Erickson and Barker.

“I would like to see what Northern Economics produced, not AIDEA,” Barker said Tuesday.

Alaskan deserve no less because this is public money we’re talking about. The brochure released Tuesday makes no mention of the argument that Red Dog could have been built without a state subsidy.

Before hiring a contractor for the “unbiased independent” study, AIDEA said: “AIDEA Debunks Report and Announces Independent Economic Analysis.”

On February 2, 2023, AIDEA said it had hired Northern Economics for its debunking campaign and that the study would be available to the public by late 2023.

Northern Economics was paid in full for the $250,000 “independent” debunking report, with its last invoice submitted March 1, 2024. Last fall AIDEA paid Northern Economics $18,000 more to work on the debunking report.

Northern Economics of Anchorage finished a “long form report” about the economics of the Alaska Industrial Development and Export Authority two years ago.

We need to see that report, not this glossy 16-page summary that AIDEA released to the Senate State Affairs Committee.

Legislators should demand to see the original Northern Economics report and compare it to the AIDEA version.

I began writing about this topic in November 2024. AIDEA has claimed repeatedly that the report was never completed, which is a lie.

Company President Marcus Hartley has never replied to questions that I began submitting to him in late 2024 about why the report has been suppressed.

Northern Economics claims to be Alaska’s expert for “meaningful, unbiased analyses,” but everything about the suppression of this report suggests that if there was a meaningful, unbiased analysis, the Dunleavy administration didn’t approve of it.

Perhaps Northern Economics is happy with the AIDEA revisions and believes that whoever pays the company for a meaningful, unbiased study can decide what it should say. Or perhaps the company wants to keep doing business with AIDEA and has to follow orders from the state.

Is this what the company means with its slogan of “Helping Society Make Better Decisions”?

Hartley’s silence harms the company’s reputation.

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