AIDEA diverts $225 million in final days of Dunleavy with little or no outside scrutiny
The Alaska Industrial Development & Export Authority has been shoveling public money out the door as fast as it can during the final days of the Dunleavy regime with little or no outside scrutiny.
It’s clear that AIDEA’s drive to lock up more than $225 million of public funds with little or no outside scrutiny is driven by the fear that the next governor will block projects favored by Dunleavy.
This irresponsible approach will automatically trigger reviews by the next governor and Legislature.
AIDEA’s current leaders want to make binding deals with the money now on things that Dunleavy likes, such as $86 million for the Ambler Road, $10 million of equity in a geothermal company, $25 million in a nuclear research venture and $75 million to create a fiber company.
Needless to say, this guarantees that the next governor, who is likely to be JKT, will be less satisfied with AIDEA than he is now.
And there will be a great appetite from the governor and Legislature to finally inject some long-overdue transparency and accountability measures into the organization.
“I think there will be a top to bottom leadership change at AIDEA,” JKT said at a campaign event in Fairbanks in October. “I don’t know if there is another agency or acronym in the State of Alaska that sort of better represents the frustration and loss of faith and lack of transparency in government than AIDEA over the last four years.”
He’s exactly right about this.
The hurried AIDEA cash deals are comparable to the proposed 20,000-acre land transfer to AIDEA of state land. Legislators have pushed back on that one, but these last-minute investments have drawn little attention.
AIDEA has added another special meeting to its schedule—this one November 19 at 9 a.m.—perhaps to approve some additional spending before Dunleavy departs in December.
AIDEA is making a big mistake with this, as the new administration must examine all of these deals closely, determine why there was so little public review and perhaps cancel some or all of them on grounds that the process stinks.
Miffed at what JKT said, one of the rubber-stamp AIDEA board members, Randy Eledge, attacked the candidate at an October AIDEA meeting. Eledge went on to pompously portray his complaint against JKT as a biblical lesson justified by Leviticus 5 and Ephesians 5:11.
“If anyone sins because they do not speak up when they hear a public charge to testify regarding something they have seen or learned about, they will be held responsible,” Eledge preached.
“I cannot be silent concerning the work or AIDEA,” said, Eledge, who is also an AGDC board member. He claimed that AIDEA is a fantastic agency that operates in the open, does nothing wrong, never decides anything in secret and has had a fantastic economic history.
(I believe the study was kept secret because the “independent” Anchorage consultant gave some credit to the theory that the Red Dog mine could have been built without a state subsidy and therefore AIDEA cannot claim credit for all of the economic impacts of the Red Dog Mine, the biggest AIDEA success story. I don’t know that for sure because AIDEA has illegally kept the study secret.)
The AIDEA rush job this fall is worse than Adam Crum’s reckless move to put $225 million into questionable investments without asking for advice or consulting experts.
Some of these projects may make sense. But the lack of transparency and public involvement demand a second look by the next administration.
The cheapest of the AIDEA last-minute deals would continue a pet project of Dunleavy’s—the annual so-called sustainable energy conference.
Dunleavy does not have the ability to order the next governor to continue to hold this event, but he thinks he does have the ability to force the next governor to do so because Dunleavy has shifted the cost to AIDEA.
On September 21, the AIDEA board agreed to spend $400,000 on the 2027 edition of the Dunleavy energy conference, with the board directing a no-bid contract be awarded to pay for it.
On August 26, AIDEA put $25 million toward geotechnical drilling on the West Susitna access road project. Delaying the $25 million “risks compressing or losing a field season with attendant cost escalation and schedule impact to final design,” AIDEA said.
On October 21, AIDEA said it would put $25 million into a nuclear research project. Here is what I wrote about that a couple of weeks ago.
On October 23, AIDEA said it would put up to $75 million into a new wholly-owned LLC to support the expansion of fiber infrastructure, “to transform Alaska into a global digital hub.”
On November 4, AIDEA agreed to put $7 million into expanding the Wrangell Port and offer a $15 million loan.
On November 4, AIDEA also agreed to put $86 million into agreements for the Ambler Road project. The resolution says the “Executive Director shall negotiate terms and sign binding agreements related to the Ambler Access Project.”
It’s likely that the “binding agreements” will be signed before Dunleavy is gone.
On November 4, AIDEA also approved a direct equity investment of up to $10 million in GeoAlaska LLC, a company that hopes to develop geothermal energy at Augustine Island and Mount Spurr. Here is the company’s latest state filing.
Here is the GeoAlaska presentation, which does not explain why state funding is needed. A federal grant for up to $8 million was tentatively approved in September.
“Seeking financing for exploratory drilling of any type in the oil patch or in geothermal patch is extraordinarily difficult,” GeoAlaska Paul Craig told the Anchorage Daily News regarding the federal grant. “People just don’t want to put their money at risk for exploratory drilling.”
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