Stephanie Prokop

Fresh in the frozen Arctic

Back in 2011, Dan Perpich was somewhat shocked to find rows of wilted lettuce in the local grocery store, retailing for $18 a head. He was visiting Resolute Bay, a town of 130 individuals in northern Canada. Yet he really wasn’t that shocked, because he knew many rural communities in Alaska had exactly the same situation, due to the challenges of local production, a severe lack of skilled labor and support industries, and highly seasonal weather patterns.  So this West Point graduate and commodities trader decided to do something about it: he founded Vertical Harvest Hydroponics. The company’s vision is to make produce in the north be as fresh, crisp and as healthy as possible, grown on-site and year-round.  Strategizing with his dream team, Cameron Willingham and Linda Janes, the trio came up with a 40-foot insulated shipping container with a hydroponic growing system, designed especially for Arctic environments. Because produce can be grown within the container, produce can actually be grown anywhere — at least where there is power and access to water. The system is deemed to eliminate the need for a long supply chain. That is key for a state where agriculture was less than 1 percent of the gross state product in 2012 and 14 percent of Alaskan households are considered food insecure. In addition, according to a 2014 report commissioned by the Alaska Department of Health and Social Services in collaboration with the Alaska Food Policy Council, 95 percent of the food that Alaskans purchase is imported. That amounts to $2 billion dollars spent on food brought in from the Lower 48 and other countries. What about the taste? Clayton Jones of Eagle River, a chef with eyes on owning his own mobile restaurant one day, can personally attest to the quality of the hydroponic produce, explaining that each vegetable he has used to cook with has been top notch, featuring a vibrant, clear flavor.  “It all comes down to flavor,” he insisted, noting that the easiest way to make better meals is to obtain better ingredients. “Seeing more fresh produce in more people’s hands, it works well for me because people eat better, and they expect better and I get to do a little more than just hash and eggs,” he said. Kyle Belleque, owner of Belleque’s Family Farm in Dillingham, was even more enthusiastic. “It’s the difference between a crème brulee and a ding dong,” he said. His farm installed a Vertical Harvest system and immediately realized the difference between the hydroponic vegetables and products which have been shipped from the Lower 48. Transported produce has been cut, dipped in chemicals, frozen on the tarmac and arrives looking bad and tasting bad, he said. In contrast, what Belleque now grows is “fresher than fresh” and surprising to many customers when they bite into the lettuce and actually taste flavor. Belleque’s services the Dillingham school district, the AC Value Center and just started delivering to the area’s local hospital. Plans are being considered to provide produce to nearby villages as well. “We harvest with the root still attached,” he said. “It’s live. It’s incredible.” It’s also more nutritious and healthy than produce which has died somewhere in the procurement process, he said. And customers who take home live produce can keep it going for several additional weeks. How it works Each turnkey container is designed to be modular, to keep it as repairable as possible, and as simple as possible for the customer who does not have to be a horticulturalist or obtain specialized training to run the system. Customers can choose from a large variety of herbs and greens, from mint, parsley and basil to butterhead and romaine, kale and arugula. Seeds are placed in racks inside a growroom, with 1,800 separate slots available. A control room automates the nutrients needed, circulates water, controls the LED lighting and maintains the HVAC. Seven days after planting, a seedling blooms, growing bigger by three weeks in, and ready for market by week six. A 40-foot container can produce up to 39,000 plants per year for commercial scale schedules and consistency in quality. Vertical Harvest estimates that one system can support roughly 1,000 individuals yearly. However, projections are difficult because of the breadth of products that can be grown in one system which may or may not meet the demands of traditional Alaskan native foods. Each unit runs for $130,000 to $150,000, not including delivery. (With a shipping weight of 15,000 pounds, a system may require transport via a C-130.) Containers are currently located in Dillingham and Kotzebue, as well as several locations in Anchorage. “You have probably eaten some of this product,” Perpich said. Going forward Breaking through various obstacles to market over the last several years, Vertical Harvest is now a mature player in an immature industry. As of now, there are not a lot of players. However, Perpich anticipates that there will be, followed by private equity buying up and consolidating the competition within five years. Recently, Vertical Harvest was one of four finalists in the American Farm Bureau Foundation’s 2017 Rural Entrepreneurship Challenge. The company competed with other companies from around the country for a share of start-up funds. If 2016 is any indication, more good news is on the way for Vertical Harvest, and rural communities around the state. Stephanie Prokop can be reached at [email protected]  

Governor has power over PFD, judge says

Gov. Bill Walker had every right to cut Alaskans’ Permanent Fund Dividend in half, according to a state court judge. The court has ruled in favor of the state in the PFD case filed by Sen. Bill Wielechowski, D-Anchorage, and former state Sens. Rick Halford and Clem Tillion. Oral arguments were heard in Superior Court Third Judicial District in Anchorage on Thursday, Nov. 17. Judge William Morse ruled immediately following the arguments. The plaintiffs asked the court to order the state to transfer about $666 million from the Permanent Fund earnings reserve account to the Dividend Fund for a supplemental PFD check for all eligible Alaskans. The lawsuit was in response to Gov. Bill Walker’s line item veto from earlier in the year, which cut the amount due to the Dividend Fund down to $695 million, reducing the PFD to $1,022 from just more than $2,000 per Alaskan. The case to restore the PFD Wielechowski served as co-counsel with Andrew Erickson on behalf of the plaintiffs. The main contention was the Permanent Fund is a dedicated fund with money dedicated in and dedicated out; otherwise it is just a bank account. “Not necessarily,” Judge Morse interrupted. “Dedicated in, but not necessarily dedicated out.” “If you don’t have money dedicated out, it’s essentially a bank account,” Wielechowski responded, stressing that it was not what the original framers intended. He noted the Legislature intended to have Permanent Fund income dedicated to the General Fund by default, and as provided by law. “Do you think ‘otherwise provided by law’ plainly says appropriation by the governor is no longer necessary? Or the governor can no longer veto appropriation?” asked Judge Morse, one of many questions. Wielechowski again defined what a dedicated fund is and how plain language applies to “as provided by law" to which the judge replied: “In terms of the plain meaning, you can’t seriously tell me that that has anything to do with the appropriation.” The judge and attorney went back and forth on this matter. The case for governor authority over state spending Margaret Patton Walsh took the lead for the state, with co-counsel William Milks and Angela Rodell of the Alaska Permanent Fund Corp. seated at the defendant’s table. The Constitution provides very clear rules on how it may spend money, rules which give both the governor and Legislature the maximum possible discretion over how to spend state money each and every year, said Patton Walsh. In addition, all spending must be authorized by appropriation. A variety of state spending formulas, such as the one used to calculate the annual transfer of funds into the Dividend Fund, are essentially recommendations that guide the Legislature to appropriate funds on an annual basis. To suggest the Legislature amend those statutes every year in order to adjust its spending, instead of just reducing spending for that year, does not make any sense, she noted. The judge asked why the need for formula statutes in the first place if they did not mean anything and were not honored. “It can mean something without being an absolute command,” Patton Walsh replied, citing the example of a complicated calculation formula used for education spending.  While the formula may determine what is needed in this area, it does not mean the Legislature is going to appropriate that exact amount. Patton Walsh also argued that the Permanent Fund is not a dedicated fund where money is spent on a particular purpose, despite the plaintiffs’ claim. “Something that is provided by law is implicitly, explicitly even, in conformity with existing law, not in defiance of existing law.” The existing law in this case would be the governor’s authority to veto spending. In addition, there is no automatic provision for an annual payment from the earnings reserve to the Dividend Fund. This transfer must be made by appropriation, not magic. On a positive note, because the earnings reserve has not been treated like a general fund, she said, there is still $8.5 billion dollars still in that account, as opposed to zero dollars. The judge decides Judge Morse thanked both parties for their high quality, expedited briefs and succinct presentations. Both sides had strong arguments, to the point he thought each side could win. However, after giving it a lot of thought and reviewing precedents, he said, he ruled in favor of the state. Alaska’s framers created a unique and rare situation which gives the governor more authority over spending than any other governor in the United States, he explained. The governor can’t choose to add spending, but he or she can reduce spending, and restrict the legislature’s ability to override that veto by requiring three fourths requirement (as opposed to two thirds.) “That is an enormous dislocation of legislative power,” Judge Morse said, concluding that the Permanent Fund amendment is not intended to eliminate the governor’s role. So the case is now headed to the Supreme Court. “It’s obviously an extraordinarily important decision for the people of the state of Alaska and I am not the final arbiter on this one,” Judge Morse said. While Wielechowski said that it not that unusual for Superior Court to expedite rulings, “Normally a case that goes to the Supreme Court takes several years.” Patton Walsh was far more optimistic. “We asked the judge to rule by Dec. 2 and we thought that was a reasonable request, and he’s done way better than that in giving us a ruling so we can move it along quickly,” she said. “Everybody needs to know the answer to this question before session starts.” Will the case move to the Supreme Court before January? “I really hope so,” she said. Stephanie Prokop can be reached at [email protected]

PFD lawsuit on the docket

Oral arguments are scheduled for Thursday, Nov. 17 in the Superior Court Third Judicial District in Anchorage for the lawsuit filed by Sen. Bill Wielechowski, D-Anchorage, and former state Sens. Rick Halford and Clem Tillion. The plaintiffs are demanding a full dividend payout for 2016 and have asked the court to order the Alaska Permanent Fund Corp. to transfer funds from the Permanent Fund earnings reserve account to the Dividend Fund. Proceeds would then be disbursed to eligible residents in the form of a supplemental PFD check. Earlier this year, the Legislature initially passed an appropriation bill that authorized a transfer of $1.3 billion into the Dividend Fund. This amount was based on estimates as calculated according to statutory formulas. Gov. Bill Walker, citing the "gravest fiscal crisis in state history," vetoed a portion and cut the authorized amount down to $695 million, reducing the PFD to $1,022 from just more than $2,000 per Alaskan. The plaintiffs filed the lawsuit against the Permanent Fund Corp. and the State of Alaska on Sept. 16, arguing that Walker’s veto was unconstitutional because the amount to be made available for distribution is not arbitrary but calculated according to statute. The APFC is thus required to transfer this amount, according to their argument, and is not subject to the governor’s line item veto authority. In addition, the plaintiffs note the governor improperly deleted language in the appropriations bill: “authorized under AS 37.13.145(b)” and “estimated.” The state, in its motion for summary judgment filed Oct. 28, counters that: One, every year, an appropriation bill is passed to authorize the transfer of income from the Permanent Fund to the Dividend Fund. Unappropriated funding is unconstitutional. Two, the APFC is not required to transfer the amount calculated according to two separate statues. Instead, the APFC is required to transfer funds that are appropriated in the operating budget. Three, the Legislature had the opportunity to override the veto, but did not, despite holding a special session in July. Four, the constitutional amendment that established the Permanent Fund in the first place is ambiguous when it comes to specifying a dividend program or how funds are to be used. The Dividend Fund is not dedicated, the defendants claim. Money may be spent for any program, not just distributions or administration of the fund. Five, deleted language in the appropriations bill did not alter the purpose of the appropriation, and was neither unconstitutional nor improper. Decision time In their motions to the court, both sides submitted lengthy history lessons, from the origins of the Permanent Fund to public perception and the modern day dividend dilemma. The bottom line is the plaintiffs want money transferred to the Dividend Fund so proceeds can be disbursed to Alaska residents via the Department of Revenue. The defendants want the governor to retain the right to control state spending through the line item veto. “If this Court were to uphold the governor's line-item veto in this case it would subject Alaskans to the ephemeral whims of the governor, who would possess the unilateral power to set the PFD each year, subject only to a legislative override requiring three-fourths of the state's elected representatives,” the plaintiffs claim. The state responded that the case is without merit, and myopic, focused narrowly on statutory language and missing the larger picture of the constitutional purpose of the governor’s veto power. Wielechowski is serving as co-counsel for the plaintiffs, along with Andrew Erickson. Judge William F. Morse is presiding. Both sides agreed to seek summary judgment, which is a case in which the facts are not in dispute but only the question of legal interpretation. As such, only oral arguments and motions to the court will be presented with no testimony from witnesses. Ultimately the Alaska Supreme Court will have final say on the matter as the losing side in Superior Court will undoubtedly appeal. Stephanie Prokop can be reached at [email protected] For a more detailed background on the case, read the PFD Lawsuit explained.

Live Election Results

While the nation elects a president, Alaska will decide whether it votes for familiar faces or throw out the incumbents in the Legislature. Although there is a total of 50 races, the competititve races are far fewer. Republican Sen. Lisa Murkowski is running against the Libertarian candidate Joe Miller, Democrat Ray Metcalfe and independent Margaret Stock. Going for his 22nd term as the state’s lone representative in the U.S. House, Don Young, Republican, faces off against the Democrat candidate, Steve Lindbeck, a former Anchorage newspaper journalist and more recently, a general manager of Alaska Public Media, and Libertarian candidate Jim McDermott of Fairbanks. Fairbanks senator and Republican Majority Leader John Coghill of North Pole is challenged by former Democrat mayor Luke Hopkins. Anchorage Sen. Cathy Giessel is challenged by Vince Beltrami, president of the Alaska AFL-CIO. Justin Parish and Cathy Muñoz, once considered a safe incumbent, are battling it out for House District 34 More than a dozen races are not being contested because there are no party opponents. (For example, Dean Westlake of District 40, who won a hotly contest primary, will automatically represent House District 40 instead of North Slope Rep. Benjamin Nageak.)  The Alaska Journal is on the scene: 12:30 a.m. FInal update: With 100 percent of the votes in, Democrats failed to knock off most all of their big targets. Former House Majority Leader Lance Pruitt won by just more than 100 votes against Harry Crawford; current House Majority Leader Charisse Millett held off Pat Higgins by 45 votes; Sen. Cathy Giessel defeated AFL-CIO President Vince Beltrami by nearly 600 votes; and Sen. John Coghill of Fairbanks had no problem with former Democrat Mayor Luke Hopkins with a winning margin of 10 percent, or about 1,300 votes. 11:40 p.m. With 100% precincts reporting, Cathy Muñoz loses House District 34 to Justin Parish. 11:33 p.m. With just 39 votes separating Beltrami from Giessel in state Senate district race N, perhaps those write-in votes may have made a difference. (With 64.7% reporting, 58 write in votes have been tallied.) 11:19 p.m. Watching Trump's speech, Williwaw in Anchorage is as silent as it's ever been. Nobody moves except to hug the person next to them or lift a drink. Or to shake or hang their heads. A pair of indigenous Alaskans expressed fear for the future but resilience. "I feel motivated. I feel like it's a fight," said Aiko Brandon. "There's more of an urgency for it. I'm scared of how it might empower racist people. As an Alaska Native I've experienced a lot of racism." "Seeing what's happened in this election has made me scared for the next four years," said Maka Monture, "but It's our duty to not give up and abandon ship." 10:57 p.m. Beltrami has overtaken Giessel in state Senate district race N with lead of about 70 votes....but still a long way to go. 10:48 p.m. Regarding Donald Trump winning, Sen. Lisa Murkowski said, "This is an opportunity on the energy front to move ahead. We don't know what he'll do about energy but what he said is very encouraging." And, "Count me among the millions of Americans who were suprised by what's happening. My sense is they (Democrats) are pretty stunned." 10:45 p.m. Hillary Clinton has called Donald Trump to concede election. Trump to speak soon, but even Alaska is falling asleep. 10:40 p.m. Party seems to be losing steam at Williwaw in Anchorage. Democrats are putting on coats and going home while the national results linger. Meanwhile, Alaska Young Democrats president Laura Herman ran down the results for local elections. Only a handful wanted to keep the national coverage going. (And no one cared what John Podesta had to say. He spoke at the Javits Center in New York, advising Clinton supporters to go home and get some sleep.) 10:28 p.m. Vince Beltrami pulls ahead of incumbent Anchorage Sen. Cathy Giessel. 10:13 p.m. Incumbent North Pole Republican Sen. John Coghill has a comfortable lead over challenger and former Fairbanks Borough Mayor Luke Hopkins with more than half the precincts tallied. 9:47 p.m. Song mix at Sen. Lisa Murkowski event ranges from Miley Cyrus' Party in the USA, to Neil Diamond's Coming to America, to Staying Alive by the Bee Gees. Festive. 9:34 p.m. State Senate incumbent ANC Republican Cathy Giessel has a strong lead over independent challenger Vince Beltrami with about 20% of precincts reporting 9:30 pm. A cheer went up at 49th State Brewing Co. as the first numbers in the Alaska US Senate race show Lisa Murkowski with a large early lead. As she headed in to her party she offered a quick take on the national races. "I just got confirmation we're still in the majority, which is a good thing." (She was referring to Pat Toomey of Pennsylvania who won relection, clinching the majority hold.) 8:55 p.m. What could Trump's win mean for Alaska? At Republican watch party on prospect of Trump pulling it off, Eagle River Rep. Dan Saddler said he's "tremendously excited to have a federal machinery that is even fair in evaluating our resource development projects, a huge win for Alaska." "Just having a fair shot, that's all we can ask for." House Speaker Mike Chenault said it "might not mean opening ANWR but it's a much better outlook. Let us as a state develop our resources and we'll be less of a burden on the rest of the country." (Alaska has highest per capita fed spending.) 8:48 p.m. The young progressive crowd sips wine and shakes their heads. "I don't know how you can support a person supported by the KKK," said Victoria Manning, a University of Alaska anchorage student. Manning chalks up Trumps strong numbers to white males afraid of losing control. "If this was a man saying the same things and doing the same things it wouldn't even be close," she said. "I think they're voting out of fear. Fear of losing control. White men have been in power in this country ever since it started. They already lost it for eight years to a black man. They don't want to lose it again to a woman." 8:30 p.m. The Republican party at the ANC Hilton is just getting underway with Trump in the lead. 8:25 p.m. Democrats at Williwaw in Anchorage seem pessimistic and gearing up for a loss as Trump is within striking distance of the presidency. "Tonight sucks so far," said Laura Herman, president of the Alaska Young Democrats. "But there are lots and lots of local elections that are actually more important to our everyday lives." A singer playing songs in a vein similar to Woodie Guthrie echoed the sentiment. "If this plays out like we're afraid it plays out, it just means job security for the next four years. You'll all have a lot of work to do." 7:45 p.m.: "Nationally, things are going great, but we are monitoring our race," said Robert Dillon, campaign manager for Sen. Lisa Murkowski. "We've been focused on Alaska and that hasn't changed."  7;34 p.m. Restrained happiness for Trump happening at the 49th State Brewing Co. However, the camp is more than delighted about Ron Johnson, the Republic incumbent from Wisconsin. Robert Dillon campaign manager for Sen. Lisa Murkowski, said Johnson did a "miraculous job" because many polls had him for a loss. Without this seat, the Republicans could have lost the Senate. Now, should Murkowski win, she will remain Chair of the Senate Energy and Natural Resources Committee, a crucial position for Alaska.  7:30 p.m. The numbers are closer than Democrats would like. "How's everybody doing?" said Wigi Tozzi, a spokesperson with the Anchorage Democrats, the party's sponsor. "Not so good, I know." Tozzi implored the crowd to get in all the votes they can still muster, asking to text friends and family to fill still open voting booths. "If you haven't voted, take a moment, go down the street and vote...There's still lots of ways we can win this." 7:25 p.m. Senate races are shaping up well for GOP Majority as Sen. Murkowski looks to join victory party at 49th State Brewing Co. in Anchorage.   7:12 p.m. All eyes at Anchorage's Williwaw are glued to MSNBC's analysis. With the West Coast reporting, Clinton pulls ahead. If Trump wins Wisconsin and Michigan, he wins the presidency, they say. There are audible hisses of people taking in nervous breaths. 7:08 p.m. The official Republican election party at the Anchorage Hilton is quiet, but the same cannot be said for the Trump party as Fox projects him leading with 216 electoral votes to Clinton's 202 after she claims California. 6:56 p.m. The Trump party at Flattop pizza erupted when Fox News projected North Carolina and Ohio as wins for their Republican candidate. "I was in the U.S. Military," said Taylor Feece, who cheered the loudest. "That should say enough. I'm not voting for Hilary." 6:30 p.m. This election has ended friendships - both on and off Facebook.  Frenetic conversation carried a desperate edge at Anchorage's Williwaw where the Alaska Democrats are holding their viewing party for the national, and later the local, elections. Democrats in pantsuits and flannel plaid and business attire rehashed arguments they've had for months. “We're not voting for her just because she's a woman; we voted for Obama over her before.” “We don't want to take anybody's guns. We don't want a redo on Roe v. Wade. We fear for the Supreme Court. We fear for the LGBTQ community and for women and for people of color. "She knows how to work. She knows how to get things done. She's the right person for a job, this job." "She can't even forward a Yahoo article on relationship advice without her aides, let alone mastermind a complex server takeover." "Benghazi wasn't her fault. If she'd been evil for so long, why is she still in politics?" A single thread emerged while they watched the numbers roll in, the familiar tune of the lesser of two evils the 2016 election has amplified to a justification of its own. "I just don't want this election to be about electing Hilary just because we don't want Trump," said Dr. Christine Hallas, an Anchorage pediatric nurse practitioner. Clinton takes Virginia and the crowd lets out a roar.

Follow the money: how indirect expenditures amount to billions in lost revenue

Thomas Hobbes called government a leviathan, a sea monster, and that was centuries ago. History has repeatedly proven that governments will grow unless stopped by revolution or war. That is because government, centered on public policy to manage society and its economy, is designed to regulate for the greater good, a frequently changing ideal based on the will of the people. Despite its relatively young status in the union, Alaska has been consistently able to fund programs at a higher level per capita than any other state, thanks to a steady stream of oil and gas revenue. But at what cost? The budget increased from $4.1 billion in 1990 to $7.4 billion in 2002 to $10.2 billion in 2016. (These amounts, which have not been corrected for inflation, also include federal funds.) Although Gov. Bill Walker vetoed $1.29 billion for the current fiscal year 2017 budget, there will still be a shortfall of several billion dollars. In a mandated effort to understand how resources are allocated, the Department of Revenue released its Indirect Expenditure Report in July. The report details 231 exemptions, credits, deductions and other forms of “lost revenue” totaling $1.7 billion for fiscal year 2014 and so far, $870 million for fiscal year 2015, or nearly $2.6 billion over just two years. (The calculations for 2015 are not complete.) The Division of Legislative Finance will spend the next few months analyzing the data and making recommendations whether to terminate, revise or keep these credits. A report with a similar title is expected to be distributed to legislature by the first day of session in January 2017. Going after the green Two years ago, Rep. Steve Thompson wanted to “follow the money.” He introduced House Bill 306, signed into law, that called for biennial reports on indirect expenditures - funds that are forfeited in the name of policy. In an interview with the Journal, Thompson called in his chief of staff, Brody Anderson, the “brain behind the bill.” As Anderson explained during the same interview, “We knew there was a fiscal crisis. The one thing that sort of jumped out at the time: Alaska was only tracking 12 major tax credits.” For other credits, he said, there was “no information whatsoever.” The first report, published by the Department of Revenue in July 2014, covered fiscal years 2009 through 2013. The second report, published by the department this past July, covered fiscal years 2011-2015. Due to the required workload and in-depth research required, the finance committee decided to stagger the analysis process, concentrating on a different group of departments from each report. Analysis by Legislative Finance was distributed to the legislature in January 2015, focusing on: • Commerce, Community and Economic Development • Fish and Game • Health and Social Services • Labor and Workforce Development • Revenue Expenditures from these five departments will come up again for official review in 2018, but any recommendations to sunset or modify credits may be brought up in the next legislative session through individual bills. Is that likely? “I think everyone is looking for ways to balance our budget,” Thompson replied, adding that if a lot of dollars are involved, representatives need to take a serious look at previous suggestions and introduce bills based on those recommendations. In the meantime, Anderson is scheduled to present data on Alaska’s indirect expenditures at an annual seminar in Washington, D.C., this week. The conference is designed for states to get a better understanding of how foregone revenue has an impact on budgets. He estimates that representatives from 32 different states will attend. Some economists say…. “It does at least identity the indirect expenditures but it is very difficult to estimate the value and what they are costing the state’s treasury,” said Scott Goldsmith of the University of Alaska Anchorage Institute of Social and Economic Research, regarding the reports. For example, it is hard to determine how oil credits increase activity or merely provide additional revenue to the industry, he explained. “How much of a subsidy goes into the pockets of industry and how much stimulates activity that generates revenue?” asked Goldsmith. If you look at what’s been happening this past year, he said, the debate is divided over the value of oil tax credits and what it will be in the future. The only thing certain in this regard, then, is uncertainty. Now semi-retired, Goldsmith has been studying Alaska’s fiscal position for decades. ISER has been recommending budget cuts for equally as long, stating that the dependence on oil revenue is not sustainable. Back in 1986, for example, ISER recommended that $1.2 billion be cut from future budgets. That was when oil sold for $15 a barrel. Today, oil is at $50 a barrel, down from a high of around $100 just a couple of years ago. Revenue from this volatile commodity accounts for more than half of the state’s total budget and 90 percent of Alaska’s unrestricted general funds. One-fifth of the budget comes from federal dollars, which is subject to the whims of Congress. An additional 19 percent comes from investment earnings. What would Alaska look like today without the oil found at Prudhoe Bay? Tens of thousands of private sector jobs would never have been created and the government would not have had the revenue to hire tens of thousands of state employees or the money to spend on infrastructure, education, capital grants to municipalities, pet projects and other investments for a population that more than doubled since the 1970s. According to a report authored by Goldsmith in 2009: “State petroleum revenues, through 2008, have been $141 billion, in today’s dollars. Of that total $35 billion has been saved in the PF (Permanent Fund) and the CBR (Constitutional Budget Reserve). We have spent the other $106 billion.” That was eight years ago, and the amounts have increased since. Consumption theory says that the more one makes in income, the less one spends as a proportion of income. Governments, however, seem to be immune to this theory. What they do is move money, redistributing the funds into programs that serve selected constituents. More revenue has equaled more spending and probably always will. “The perceived needs are boundless,” Goldsmith said. “Politically speaking, if revenues are available it’s very difficult for the legislature and governor to say no when a case is made for an expenditure. It’s easier to argue for the need than to argue that money should be set aside.” The survey process How does it work? Dan Stickel, assistant chief economist with the State of Alaska, explained to the Journal that a survey is sent to each agency, department and public corporation, statewide. Each recipient is provided the definition of what constitutes an “indirect expenditure” and a list of questions to answer, as dictated by statute. For example, what is the intent behind the expenditure? What is the estimated revenue impact? (The amount of funds the state would have received if the credit was not in place.) Clarifications have been necessary when it came to classifying whether an expenditure was indirect. For instance, the Alaska Housing Finance Corp. offers home ownership loans. “Is it an express provision of state law? In this case, the answer is no but they have the power to establish the program,” Stickel said. So, although this may be technically defined as an indirect expenditure, it is not included in the report. Out of all those surveyed, the Department of Revenue has the majority of indirect expenditures, a total of 78, accounting for $1.5 billion for fiscal year 2014; fiscal year 2015 is still being calculated. While every agency and department is required to report back, the following did not have any indirect expenditures for the fiscal years 2011-2015: Alaska Aerospace Corp. Alaska Energy Authority and the Alaska Industrial Development and Export Authority Alaska Gasline Development Corp. Alaska Housing Finance Corp. Alaska Mental Health Trust Alaska Municipal Bond Bank Authority Alaska Railroad Alaska Seafood Marketing Institute University of Alaska Department of Corrections Department of Law Department of Military and Veterans Affairs Department of Public Safety Into the sunset Is Thompson’s goal to “follow the money” and pinpoint potential sources of revenue going in the right direction? “Not yet,” Thompson said, adding, “We did not get the bill passed.” Thompson was referring to House Bill 155, which passed the House, made it to Senate Rules Committee, then died on the floor earlier this year. Should it have been signed into law, it would have repealed various credits including exploration incentives, and discounts on the motor fuel tax and tobacco tax, among other credits. Not much came out of the 29th Legislature that spent 149 days in session, including special and extended sessions to address the fiscal situation. According to the governor’s office, the legislature managed to reduce the operating budget by $400 million, “solving 10 percent of the problem and leaving 90 percent of the work undone.” The Winn Brindel Scholarship Contribution Credit, at least, had a sunset attached and expired without renewal. Authorized by AS 43.05.095, the credit was enacted in 1986 to promote education in fisheries. It allowed a 100 percent credit for all contributions made up to a maximum of 5 percent of the contributor’s tax liability. Roughly seven companies benefited, with $914,756 in forfeited revenue to the state over fiscal years 2009-2013. Going forward, Thompson is optimistic that the next Legislative Finance report will have a big effect on the legislature. In addition, he thinks representatives will take a good long look at previous recommendations to introduce bills that modify or terminate the credits. “So far we haven’t fully succeeded but we are bringing attention to it and more attention will come to it this year,” he noted. However, not everyone is going to like it when proposed bills involve eliminating or modifying existing tax credits. Education, in particular, will be controversial, Thompson said. A Small Loan Company Exemption, as authorized by AS 06.20.030a, will probably not be. The exemption literally only helps one company, and in the amount of just $50. “Legislation like that is a nuisance,” said Thompson. However, because the legislative process takes time, such a provision cannot be immediately stopped. And for a government used to receiving billions of dollars in funds annually, it is hard to go on a crash diet. It is up to the public to scrutinize, ask questions, and stay informed. Or the sea monster will continue to grow. The full report may be viewed here. Stephanie Prokop can be reached at [email protected]

Social media is the new weapon

Classical war involved nations fighting nations, with two clearly demarcated sides. Contemporary war, in contrast, may pit one against the many, or a nebulous network of alliances fighting for a cause rather than a geo-political territory or economic interest. And unlike its predecessor, contemporary war includes cyber warfare which may take many forms, including the Oct. 21 widespread denial of service attack that affected more than a thousand websites and tens of millions of users. Cyber warfare is not new, although it is hardly publicly acknowledged by nations. The British Military, however, has recently stated that it is disrupting mobile communications in the city of Mosul as part of its efforts to fight ISIS. But cyber criminals do not need a particular reason to go to war against the enterprise, and now they have more weapons in the arsenal. Cyber criminals can use social media tools to gather intelligence, access assets, and disseminate misinformation, or in other words “control the narrative.” Social media has been weaponized. “Most realize cyber security is a major issue but do not associate social media as relevant to that overall position,” said Nick Hayes, an analyst with Forrester Research, in an interview with the Journal. Organizations in the U.S. are actually all over the map, Hayes said, when it comes to reducing online exposure. There are currently four ways to exploit social media, he explained, and companies have to be aware of these tactics: Reconnaissance. Cyber thieves will gather intelligence about specific leadership such as senior level executives or key personnel to run social engineering campaigns. At the very least, such info can help criminals understand behaviors of the individual in question, for use later on. Deliver technical exploits. Social media is a prime channel of sending out malware and payloads (viruses). Brand hijacking. Impersonators take over accounts, and wreak havoc. Example: replying to customer complaints in inappropriate ways, or creating fake promotional content, making a situation worse for the company, and potentially liable. Threat coordination. Using messaging apps to recruit, raise funds, and plan an attack is not uncommon. This is not the dark web either. Hundreds of groups are currently operating in broad daylight, on popular social media sites. Hayes advises companies to first Identify their social media and digital assets that are publically facing (brand accounts, points of presence, locations, key personnel, etc.) and then implement different types of controls, including technical and policy related rules. What are employees allowed to post, for example? Restrict access to social media accounts and monitor for malicious or suspicious behavior. The friendly enemy within Cyber threats are both external and internal. And while there are known malcontents that turn against their employers — Edward Snowden comes to mind — many employees are simply unaware of how their public profiles may inadvertently, yet negatively, affect the company. “The issue is even when you have employees trying to do the right thing, their public behavior can make the organization vulnerable,” said Hayes. He offered Anthem as an example. In 2015, the healthcare provider was hit with the largest data breach in history, affecting close to 80 million individuals. As Hayes explains, a large data breach like this can start with something simple: collecting data on key IT personnel. Even if a company has a strict social media policy in place, rules which limit employees from discussing their job functions online in any capacity, a cyber thief can still piece it together. How? Via online resumes: comparing what that person was responsible for in the past with current job titles. Cyber criminals can then figure out who to target in order to gain credentials for privileged accounts. A majority of cyberattacks involve these types of accounts which grant the ability to access and alter sensitive and strategic info, intellectual property, customer data, and other pieces of proprietary information. Privileged accounts are an attractive target, yet companies do not manage them well, some do not even know how many they have, said Steve Kahan, CMO, Thycotic, in an interview with the Journal. Thycotic is a Washington, D.C.-based security solutions provider with clients around the world. Once attackers get their hands on passwords, they can operate laterally and unnoticed, to cause great damage and harm, Kahan stressed. Businesses must therefore manage and control what employees have access to, track enforcement and ensure that employees understand the policies in place. A business unaware of its online assets, and who may be exploiting them, is a company at risk. Yet commonly, and frustratingly, employees are often still sharing passwords, using the standard 1234 defaults, or the same password for every account. (In the Oct. 21 attack, the botnet relied on accessing devices with default passwords.) Stephanie Prokop can be reached at [email protected]

When the internet is under attack

Cyber terrorism, cyber warfare, cyber vandalism, cyber crime, are all now part of the lexicon. In an age where everything is connected to everything else, cyber security is as equally multi-layered but businesses are not staying cyber safe. October is Cyber Security Awareness Month, and to end in a celebratory fashion, Dyn, a DNS service provider, was attacked on Friday, Oct. 21. It was an example of the dark side of the Internet of Things, where smart appliances, including webcams and DVRs, were infected with malware to distribute a massive denial of service attack. The incident affected more than 1,000 websites including Twitter, Reddit, Netflix, major media outlets and government entities as tens of millions of IP addresses were used to flood the target. The FBI confirmed to the Journal that it is aware of the attack and investigating all potential causes. Flashpoint, a security firm working with Dyn and law enforcement, has identified the Mirai botnet as being partly responsible. Additional analysis is ongoing. Does this portend a dry run in advance of a second, larger event before or on Election Day? “We cannot speculate on their motives or when the next attack will happen,” said Flashpoint via e-mail.  “We just had a record-breaking attack on Krebs on Security 2-3 weeks ago. Now we’re having another attack that was huge. So we can clearly see that these attacks are getting bigger and closer together, and we don’t see any indication that they will stop any time soon.” The Department of Homeland Security did not have any details to share about who the culprit may be, but did say in a statement released Oct. 24 that it is “working to develop a set of strategic principles for securing the Internet of Things.” In the meantime, a group called New World Hackers has claimed responsibility in a cryptic tweet, alluding to future events yet threatening to retire from the hacking business. The group’s involvement has not been verified by Flashpoint or any agency for that matter. Widespread web Dyn is just one provider of internet traffic monitoring and performance services. The company does not host websites or own wireless infrastructure, yet an attack on the company affected its clients, and in turn, millions of users did not have access to various sites. While such users may have missed seeing their favorite social media feeds for a few hours, companies have other worries: the serious risks to their business. “A cyberattack can cripple America’s infrastructure and economy,” said Steve Kahan, CMO, Thycotic, in an interview with the Journal. Thycotic is a Washington, D.C.-based security solutions provider with clients around the world, including several in Anchorage. Kahan said cyberattacks are the most immediate danger to the country, and one would “have to be hiding under a rock” to not be aware of the numerous incidents in recent years. Just turn on the television or turn the page of a newspaper to see the latest event and its implications, he said. And companies are rightfully concerned. But are they doing anything about it? At the 2016 RSA Conference held earlier this year in San Francisco, where more than 40,000 gathered, Thycotic surveyed attendees. Ninety-two percent of respondents believed that U.S. companies need more security and alarmingly, 63 percent believed a catastrophic cyberattack on the country was possible within one year. So while the goal of Cyber Security Awareness Month is important, Kahan said, it’s actually more important to take protective measures or face severe consequences. Stephanie Prokop can be reached at [email protected]

Cranky and cantankerous debate comes to a close

With less than three weeks until Election Day, presidential hopefuls Sec. Hillary Clinton and businessman Donald Trump met in the swing state of Nevada for the third and final presidential debate. Held on Wednesday, Oct. 19 at the University of Nevada, Las Vegas, the debate featured just six topics: the Supreme Court, immigration, economy, foreign hot spots, the national debt and fitness to be president. Fox News anchor Chris Wallace served as moderator. Not as hostile as how the second one played out, this final round started as a back and forth set of monologues, and quickly devolved into a series of swipes, this time with each candidate standing behind a podium instead of wandering around a stage. Trump made digs about the 33,000 deleted e-mails as well as the Clinton Foundation being a “pay to play” criminal enterprise. Clinton referred to Trump’s caustic comments, his egregious remarks about women, and his unreleased tax returns. One question of note, Wallace asked Clinton about a statement she had previously made regarding being in favor of open markets and open borders. “You’re very clearly quoting from WikiLeaks,” Clinton said, immediately going on to accuse the highest levels of Russian government of espionage against Americans, hacking the websites of individuals and institutions to hand off intel to WikiLeaks to influence the election. Will Trump finally admit and condemn that Putin is doing this, she asked? “That was a great pivot off the fact that she wants open borders,” Trump said. Clinton then accused Trump of being Putin’s puppet, what she referred to as an unprecedented situation. Seventeen civilian and military agencies can confirm that Russia is behind the WikiLeaks, she said. “Putin has outsmarted her every step of the way,” Trump replied, suggesting that is why she does not like the Russian president. Groping for Answers Wallace asked both Trump and Clinton why would women make up accusations of sexual misconduct against Trump himself, and Clinton’s husband? “I didn’t know any of these women,” Trump said, wondering if they wanted fame, or perhaps were campaign plants. Clinton dodged the question regarding her husband’s affairs, preferring to focus on Trump’s alleged misogyny and his penchant to belittle women to make himself feel bigger. More Bickering Questions regarding the Supreme Court dived into issues about the 2nd Amendment and abortion. Trump cited Chicago, having the strictest gun laws in the country yet high rates of violence and murder. He noted he will place pro-life judges on the Court. “I will defend Planned Parenthood. I will defend Roe v. Wade,” Clinton said. Trump replied that late-term abortion is terrible and ripping the baby out of a mother’s womb just days prior to the birth is unacceptable. “Hillary can say that’s okay but that is not okay.” “That is not what happens in these cases and using this kind of scare rhetoric is just unfortunate,” Clinton said, adding that it’s the worst choice a woman has to make. It’s not taken lightly. And FInally “She should never have been allowed to run,” Trump replied, in response to a question about his claims that the election may be potentially rigged. Clinton noted that Trump believes everything is rigged, from the FBI to the Emmy awards because his show, The Apprentice, did not win for best reality show. For many voters, Election Day (Tuesday, Nov. 8) can’t come soon enough. Early voting has already begun and millions have cast their ballots, in record numbers in some states. It’s now up to you America, to decide. Stephanie Prokop can be reached at [email protected]

IT professionals to be recognized at inaugural gala

The first ever Alaska IT Awards Gala will take place at the Anchorage Marriott on Nov. 4. About 200 tech executives and business leaders are expected to be in attendance to recognize professionals who drive technology in the state. The event is organized by ConnX Event Solutions President J.R. Cantrell, who is working in conjunction with the Alaska Chief Information Officers Council. Cantrell, who previously managed the Interface Conference, the biggest and longest running IT event in Alaska, was often asked, “Wouldn’t it be great to do an awards banquet?” At the time he was kept busy by various responsibilities, but once he started his own business, the first call he made was to Jim Bates, the former CIO of Alaska, and then other IT executives. Together, they wanted to create an event that would allow IT community and business to recognize itself. “The event is to recognize the drivers, those who are pushing and progressing ideas outside Alaska and within,” Cantrell said. “It’s the guys in the trenches, the IT service providers, the companies doing great work.” There are eight awards categories in total, “recognizing the right people in the right ways.” A few more categories could have been added, Cantrell noted, but keeping it focused on the core eight makes it easier for participants to nominate individuals. Winners have been chosen by a committee of IT professionals and association leaders representing different sectors and levels. Nominations were judged based on various factors, but according to Cantrell, the judges know firsthand what it takes for each position to be successful. The Community Hero award can look at accomplishments and impact in the immediate vicinity, for example, while the IT service provider award looks deeper into capabilities and what they are doing with both companies and communities. Other award categories include: Alaska IT Leader of the Year, Military IT Leader of the Year and the World Visionary Award given to an IT leader who is not only driving technology within the state, but to the Lower 48 and beyond. The evening begins with a 6 p.m. reception followed by dinner and the awards ceremonies. A post event “After Glow” reception will feature live jazz and the opportunity to speak with some of the award recipients. The event is emceed by Bates and Richard “R.C.” Woodson, the CIO of Doyon Ltd. Tickets can be purchased online through Conn X Event Solutions or by phone: (360) 936-9388. Discounts are available for military and IT association members. In addition, a portion of the sponsorship dollars will benefit a scholarship fund to help with tuition assistance for UAA Students in the information Technology related programs. Stephanie Prokop can be reached at [email protected]

Alaska Federation of Natives celebrates 50 years

On the morning of Oct. 18, 1966, Emil Notti, an Athabascan born in Koyukuk, called the first gathering of the Alaska Federation of Natives to order. Almost exactly five decades later, he is slated to give the keynote speech Oct. 20 at the 50th annual convention in Fairbanks. “No, it does not feel like 50 years has gone by,” said Notti, now in his 80s, reflecting on a whirlwind of change. Playing a pivotal part in what eventually became the Alaska Native Claims Settlement Act that passed 45 years ago in 1971, Notti first became interested in Native issues — including education, housing, healthcare, and open discrimination — after serving his country in the U.S. Navy and working as an electronic engineer for the Federal Aviation Administration. “I had young kids and I thought, I got to make a better day for them,” he explained. He served as the president of the Cook Inlet Association and chair of the Alaska Native Housing Committee. Soon after becoming involved with these organizations, the Bureau of Indian Affairs produced a decision-making report regarding how tens of millions of acres of federal land would be handled in Alaska. “I had no idea what to do with it,” Notti said. “I did not know anything about the law. I was an engineer.” Concern was building in the villages because this was not the first time in their history, he said, that government decisions would have a major and negative impact on their lifestyle. Notti explained how there would be more competition for food in terms of hunting and fishing, and there was uncertainty about what would happen with the ancestral property, even burial grounds, if the state was selling off vast tracts without consulting the residents. After carefully thinking about it, he concluded, “If we had any rights and land, we should have something to say about what that final solution should be.” So that summer, he wrote a letter to 14 leaders around Alaska, suggesting that they all meet to discuss the pending problems. Support for change Howard Rock, the prominent editor and publisher of the Tundra Times, drew attention to the topic through frequent articles. As an editorial in the Sept. 16, 1966, issue said, “We think the October conference of Native Association leaders will spark action where lethargy existed heretofore.” Indeed, not just a dozen or so individuals arrived in Anchorage, but several hundred convened to establish the AFN, the largest gathering of Native leaders in the state to date. “I was surprised,” Notti said of the turnout, “but when I think about it, conditions were right for people to get involved.” The organization, which officially formed within six months of the gathering in Anchorage, created the perception of a single voice that could not be ignored by the Department of the Interior or state representatives. The AFN, with Notti serving as its first president, acquired a seat at the table. Four years and many, many meetings and hearings later, both around Alaska and in Washington, D.C., the Alaska Native Claims Settlement Act was signed into law by President Richard Nixon. Were there any regrets? “The settlement was not negotiated,” said Notti. “There was no give and take. It was a unilateral settlement handed out by Congress. True, we had our say, we had testimony, we had positions,” he said, but the lack of real negotiation is the primary point he would change if he could go back in time. Positively, however, the state-chartered regional and village corporations that were created as part of the act are now integral to Alaska’s economy, with payroll serving Native and non-Natives alike, he said. “Look at their office buildings; they are part of the structure of the city, part of the landscape,” Notti said. “I think the corporations have a big opportunity and should strive to become models of corporate governance.” So what does Notti, father of six and grandfather of eight, say to the current generation and those who will follow in his footsteps? “Stay involved, get your training and get your education,” he replied. And how does he envision the future? “Well in the next 50 years, I hope the Natives are on equal footing with the rest of the citizens as far as jobs are concerned,” he said. There are high unemployment rates and economic development has not diminished these rates, he noted, pointing out that 400,000 have come to Alaska since the discovery of oil at Prudhoe Bay, but villages are still disproportionally unemployed. “Welfare is not the answer,” he stressed, a point he has publically made for decades. “They need job training, they need to be hired.” That starts with opportunity and adequate job training centers in various regions, with the state taking the lead in funding these centers and keeping them up and running, he said: “To have a healthy state, we have to have people working.” And they can be in any industry, construction, teaching, etc., that is pertinent to an industrialized, first world economy. The next generation on stage The AFN convention is the largest representative gathering of Natives in the U.S. While the initial meeting in 1966 attracted a few hundred participants, thousands now gather annually to share stories, discuss important topics, learn from leaders and set the course for the future while facing the challenges ahead. A representative of today’s generation and sharing the stage with Notti is Megan Alvanna-Stimpfle, who was born and raised in Nome. Alvanna-Stimpfle was on a trip to Iceland when the Journal contacted her for comment. She graciously shared her thoughts via e-mail. With a master’s in applied economics from Johns Hopkins, Alvanna-Stimpfle served as a legislative assistant for Sen. Lisa Murkowski in Washington, D.C.  She also took part in organizing the Arctic Imperative Summit to bring arctic and coastal Alaskan issues to the forefront of American policy. She serves on the Nome Port Commission and is an elected member of the King Island Traditional Council. “What a blessing it is to know who we are,” she wrote. “I am a King Island Inupiaq woman. The strength of my identity has survived colonization by the U.S. government. It has survived a forced relocation off our island. It has survived generations of racism in the wild west community of Nome. “Yet the joy, love and pride that lives within our King Island community spirit remains strong. It is alive when we come together to sing and dance. It is alive when we come together to share our Native foods. It is alive when we share our humor with our cousins and family relations.” What are the challenges for the next generation? “The next generation of Alaska Natives is to inherit our traditions, our languages, and our lands,” she wrote. “We also will inherit the responsibility to manage city and tribal governments, Native corporations, health and fishery institutions. These institutions collectively represent billions of dollars of wealth. “By their very nature they are western democratic institutions, which require us to be engaged citizens and active shareholders. The responsibility of my generation is to ensure that our institutions remain firmly guided by our traditional values. Our responsibility is to the land and to our way of life.” Alvanna-Stimpfle explained that this means actively participating in and demanding accountability from governing boards, including law enforcement. “Traditional access to our lands, rivers, and oceans must be honored within the law as our inherent right as indigenous people,” she wrote. “Our recent history as Alaska Native people has not only been traumatic to our human spirit, but it has resulted in a complex regulatory structure that impedes our way of life. “Our hunters face criminal penalties by federal and state agencies. This must stop. Our leaders must navigate management bodies for fish, birds, and land and sea mammals to ensure that we have continued access to live our way of life.” Every Native plays a part in building the future, she noted. “Alaska Native peoples as well as the institutions that represent us will remain pillars of strength and stability in the Alaskan economy,” she wrote. “We are not only blessed with knowing who we are, but my generation is blessed with the political and economic power to define a future on our terms. It is time we assert it.” Stephanie Prokop can be reached at [email protected]

Kickstarter for functional and fun fashion

FisheWear has a vision to change women’s outdoor wear forever. Founder Linda Leary, who has a long career in logistics, sales and executive leadership in the state, turned her attention to her lifelong passion — fly fishing — when she started the business last year. Today the apparel company offers products that are designed to be comfortable and colorful, functional and fashionable. But FisheWear — pronounced “fishy wear” with an emphasis on “she” — would like to offer more. So a Kickstarter launch party was held Oct. 4 at the Double Shovel Cider Company in Anchorage to raise money for a new wool collection, including tops, tubes and skirted leggings as well as a “Troutrageous” design inspired by rainbow trout. The fundraising event, which runs through Nov. 3, raised $7,000 towards its $50,000 goal in the first two days alone. To kick off the campaign, patrons packed into the Double Shovel, sampling hand-crafted, hard ciders from long rows of tables. Bear Mace Bites served sweet potato fries and spicy sandwiches from its food truck outside. “I love that it’s all local,” said one attendee, Cari Leyva, a former Miss Alaska and now a photographer and makeup artist. She was referring to the group of women — passionate about fishing and style — who came together to conceptualize the product line. Leary’s biggest fan, however, is perhaps her husband of 32 years, Michael Leary. An avid fisherman since the day he was born, he and his spouse have been fishing together through their entire marriage. While he never had trouble finding suitable clothing, for his wife, he said, it was a labor of love to find gear that would both fit and work in the cold, wet weather.  Waders were especially hard to come by. “You want it to be thin, you want it to be able to move. It’s not like you’re going out on a snowmachine and sitting, you have to physically be able to move,” he said. Michael Leary knows a thing or two about snowmachines, having raced in the Iron Dog, using duct tape on his face to prevent frostbite. Furthermore, the classic idea of “pink it and shrink it” just doesn’t cut it, he said, explaining that it’s not designed for function and fashion and makes little sense for an active woman. It’s just putting pink trim on what is normally made for a man, reducing the waist size, and calling it “girl gear.” Valerie Walsh, who promotes FisheWear through social media, noted that gear for women has always been available, but products are often plain and dull and look terrible after many uses. “It’s just nice to have fun,” she said, enthused about the creative patterns and quality materials that FisheWear takes time to choose. And the entire product line is not just for fishing. Walsh has seen women wearing FisheWear in everyday situations around town, including most recently, both a bartender and a patron who were each dressed completely in the company’s clothes. She also hears similar stories from customers who come in to the showroom on West 41st Avenue in Anchorage. Meanwhile, Linda Leary, who is the president of Fairweather LLC and the Deadhorse Aviation Center, not only wants functional fashion but encourages more networking opportunities for female executives. Fishing can be exactly one of those opportunities. “Just like golfing or attending a sporting event, you get time away from the office to get to know people on a more personal level. Always a good thing!” she said. Stephanie Prokop can be reached at [email protected]

Supreme Court hears House District 40 case

The case to decide who will represent House District 40 has gone to the Alaska Supreme Court. Oral arguments were presented Oct. 12 on behalf of Rep. Benjamin Nageak, D-Barrow, and the state Division of Elections. What is in question is who will ultimately take the seat. Nageak’s opponent, Dean Westlake, originally won the August Democrat primary by eight votes: 825-817. After a certified recount, which Nageak contested, Anchorage Superior Court Judge Andrew Guidi reversed the decision on Oct. 6. Citing ballot errors, the judge reduced the vote count for a final of 815-813, this time in Nageak’s favor. The Supreme Court will now determine if the Superior Court’s decision stands, or if Westlake will be the ultimate winner or if an alternate remedy will be ordered all together. Making the Case Each side had 45 minutes to present arguments. Attorney Laura Fox, representing Lt. Gov. Byron Mallot who oversees state elections, opened arguments with a simple statement. This case is about a mistake made by a poll worker, she said. The question for the court is “what to do?” “We can’t go back in time, there is no way to do over the primary without this error,” she said, adding that the options are either to accept the results of an imperfect primary or do something even more disruptive. The trial court made several legal errors, she said, and did not apply the heavy burden required of the plaintiff. The court should not weaken the burden. Chief Justice Craig Stowers asked for clarification on the term “heavy burden,” noting, “I’m struggling to see if the trial court applied these presumptions.” Nageak's camp had a heavy burden to substantively prove an election result based on misconduct such as corruption or reckless indifference, Fox said. Without meeting this burden, indulgences should be in validity of the election. Justice Daniel E. Winfree inquired about the evidence originally presented at trial, as packets went to precincts, and “intentionally, deliberately, each and every person got both ballots.” It was sufficient to show negligence, but not reckless indifference, Fox said. Fox also argued that if the plaintiff did not prove deviations from standard norms, enough to change the result, the original results should stand. Justice Susan M. Carney asked whether it is not a significant deviation to hand everyone two ballots? Tom Amodio, counsel for Westlake, joined in the state’s argument that there has been no evidence to suggest voters would have selected someone else. In addition, no one could have cast more than one ballot. Referring to the “real world impact of the court’s decision,” Amodio suggested the message is vote even though your vote may be thrown out. “Surely this is not the message we want to send to Alaskan voters,” he said.  Amodio added that he has heard from voters from the rural Alaskan villages in question. “What happened to my vote? Why doesn’t it count? What did I do wrong?” they asked. They should not be punished because of poll workers’ mistakes, he argued. And on the Other Side Attorney Stacey Stone, representing Nageak, said poll workers chose to ignore instructions for the ballots. “We argue it is reckless indifference to ignore everything that is in the packet.” Further, the Division of Elections had a duty to train these workers and failed to do so adequately, she added. A voter may only vote once, an essential element of an election, Stone said. Allowing more than one vote per voter flies in the face of the Constitution and shows reckless indifference and knowing non-compliance. Stone asked the court, should it not be compelled to decide based on the selected evidence presented at trial, to consider that 22 out of 23 precincts had errors that denigrate the integrity of the election? Regarding what Nageak's attorney called perceived bias in certain precincts, Justice Susan M. Carney asked, “If a precinct is so overwhelming for Westlake, did it matter at all?” Chief Justice Stowers said the public is going to ask where the common sense is, since “every voter voted their choice.” When asked why a second primary was not ordered by the lower court, Stone replied that a pro-rata reduction approach was chosen to disenfranchise the least amount of voters. She conceded however, the remedy could be considered legal error. However, she did not agree that a specially ordered, new primary election was the best choice, as it was also an extreme remedy. Unprecedented, it may also cause logistical complications, she said. Justice Susan M. Carney asked if it was more "extreme" to select and discount a number of voters, substituting what the judge believed the voters did, instead of how they voted. The Supreme Court will now deliberate the matter, making every effort to make a decision by Friday, said Chief Justice Stowers. Stephanie Prokop can be reached at [email protected]

Arctic investment firm makes play for Iceland telecom

“Our investment is potentially the largest in Iceland since the 2009 crash,” said Pt Capital Advisors founder and CEO Hugh Short in an interview with the Journal. The Anchorage-based private equity firm has just announced it will acquire the leading mobile provider in Iceland: Nova. Subject to notice, the final sale price is not being disclosed. Local press in Iceland values the sale at 15 billion krona, which equates to about $130 million U.S. dollars. A finalized deal is expected within the next few months. According to the World Bank, Iceland’s GDP in 2015 was just more than $16 billion. Although it represents only a fraction of the world’s economy, Iceland’s GDP is growing faster than the U.S. Given the current uncertainty and challenges in the state’s economy, Short said, it seemed prudent to look to other areas. Iceland, he noted, was at the top of the list. Feeling bullish about future growth in the area, Short said the significant investment should be a point of pride for Alaska. “There is a lot of experience our team brings in the telecommunications business here that will help grow the company,” he said. Owning and operating its own nationwide network, Nova already has the largest market share in Iceland at 34 percent according to the Post and Telecommunication Administration, a telecom regulator. In a prepared statement, Liv Bergthorsdottir, CEO of Nova, said, “Pt’s investment in Nova is a recognition of our success and vision.” While Short would not speculate on other developments in Iceland, investing in telecom is investing in infrastructure, and is usually a leading indicator that economic development is about to take place in a region. In terms of Iceland, that may mean a staging ground for future growth in the Arctic, including increased shipping lanes or natural energy to be found, but this is not confirmed. Ten years ago, the Journal asked Short where he’d hope to be today. At the time, he said, “I could only to hope to make a difference in Alaska and the Native community, and hopefully raise well-balanced and responsible children.” Since then, he has overseen more than $500 million in investments in oil, gas, mining and real estate that directly affects the state. If he was to set a goal for the next 10 years, he said he wants to continue growing his private equity firm, creating even more opportunities and jobs. (And, he said, he hopes his kids continue to be well balanced.) Now in its fourth year of operations, Pt Capital Advisors is a subsidiary of Pt Capital. Focusing on opportunities in Alaska, Canada and Greenland, this is the firm’s first investment in Iceland. Stephanie Prokop can be reached at [email protected]  

Second presidential debate is tough and tense

Normally a debate starts with two contenders shaking hands. Even boxing matches have opponents acknowledge each other before a fight begins. Hillary Clinton and Donald Trump did not, indicating how the next 90 minutes of the second presidential debate in St. Louis would play out. In a series of spars less than a month before Election Day, Trump and Clinton took turns insulting and attacking each other, personally and politically as the moderators - Anderson Cooper and Martha Raddatz - either prodded further or chastised and interrupted the candidates, demanding that they stick to their allotted two minutes per question. According to Clinton, Trump creates diversion because his campaign is exploding and Republicans are leaving him in droves. According to Trump, Clinton should apologize for the 33,000 e-mails she deleted and acid washed. “It’s just awfully good that someone with the temperament of Donald Trump is not in charge of the law in our country,” Clinton said. “Because you’d be in jail,” Trump replied. The moderators admonished the audience for applauding the candidates' comments, “wasting time” as a result. Trump noted that if he wins, he is going to appoint a special prosecutor to look into the e-mail situation. “I’d like to know, Anderson, why aren’t you bringing up the e-mails? I’d like to know.” Cooper insisted that the topic has been brought up. By the end of the evening, an audience member asked the candidates to please say one nice thing about the other. Clinton said she respects Trump's children, while Trump said, “She never gives up. She never quits.” A Ton of Topics Mandated healthcare, taxes, Supreme Court justices, Wikileaks, immigration and the situation in Syria were all on the table, among numerous issues. The debate, however, immediately referenced tapes which caught Trump talking lewdly about women with Billy Bush back in 2005, on the set of "Access Hollywood." (NBC has recently suspended Bush for his role.) Trump apologized to his family and the American people for his crass remarks, referring to it as locker room talk that he was not proud of and embarrassed by. Asked several times to clarify whether or not Trump indeed groped or kissed women without consent, Trump said, “No I did not.” Raddatz called the tape issue the single most talked about story on Facebook in the entire 2016 election. Clinton said Trump is not fit to be president. “I think it’s clear to anyone who heard it, it represents exactly who he is.” “If you look at Bill Clinton, far worse,” Trump replied. “Mine are words, his were actions. What he has done to women, there has never been anyone in the history of politics, in this nation, that has been so abusive to women…Hillary Clinton attacked those same women, and attacked them viciously, four of them here tonight.” In the audience were four women who have accused the former president of rape and unwanted advances, including Paula Jones and Juanita Broaddrick. Prior to the debate, Trump appeared on his Facebook page with them. The third presidential debate is scheduled for Wednesday, Oct. 19. Stephanie Prokop can be reached at [email protected]  

Protests planned as Alaskans digest effects of smaller PFD

While a lawsuit contesting the amount of this year’s dividend continues in the courts, Permanent Fund distributions will be sent out to eligible residents on Oct. 6. What was going to be a $2,052 check is now $1,022, after Gov. Bill Walker partially vetoed this year’s appropriations bill and authorized $695 million to be transferred from the Alaska Permanent Fund Corporation instead of $1.3 billion. In response, a group on Facebook has formed “Alaskans Against Gov. Walker's PFD Theft” and has so far attracted close to 12,000 members in less than a dozen days. A protest is scheduled for Oct. 1 outside the Wendy Williamson Auditorium in Anchorage where Walker is scheduled to speak. Members represent every area of the state, and have voiced concerns about not being able to meet energy bills, renew car leases, and purchase snow tires due to the dividend which has been cut in half. According to messages on the group’s public wall, members are hoping to receive publicity from the media at the upcoming protest. It is not clear, however, how the event is being publicized, outside of social media sharing. The Alaska Journal reached out to group moderators. Cameron Cowles of Anchorage told the Journal, via Facebook, that he recently joined to “help get Alaskans’ voices heard on the matter of the PFD.”  Cowles serves as co-administrator along with Brandi Wadkins and Cameron Bush of Eagle River, who originated the group. Back to the budget The budget gap — whether Alaska should rely on a volatile commodity or implement a stable tax system — has been debated since the days of Gov. Jay Hammond, who oversaw the creation of the Permanent Fund in the late 1970s. Annual dividend payouts have been as high as $2,072 (2015) and as low as $331 (1984). “This year’s $1,022 dividend is actually pretty close to the historical average of $1,100 since the program’s inception,” wrote Abigail Enghirst via e-mail. Enghirst is the Special Assistant in the Office of the Commissioner for the Department of Commerce, Community and Economic Development. The department does not track economic data on the PFD, she noted. So the Journal turned to Gunnar Knapp, who lives in Anchorage and recently retired from the Institute of Social and Economic Research. He is now Professor Emeritus of Economics at the University of Alaska Anchorage. “The PFD is a significant boost to Alaskans’ income. In turn we all have more money to spend, and we spend a lot at local businesses,” he said, explaining that a smaller portion will purchase items online, take vacations, save for college tuition or pay off that credit card. What makes the dividend a distinct source of income is that it arrives all at once. “It’s different than the usual paycheck which quickly gets used to pay rent, buy groceries,” he said. Generally, one will use income on what is most essential. Millionaires might buy a second luxury car or perhaps a yacht, but for everyone else, even if one is in absolute poverty, the first bit of income goes towards food, diapers, medicine, whatever you most have to have, along with basic rent and so on, he said. Because the dividend offers a lump sum, for many, this is a way to make big purchases, car down payments, buy snow machines, etc.   “I do not buy more cereal because I received a dividend check, but I might buy a nicer TV set,” he said. This is why retailers love the dividend: its significant purchasing power. When there is less received, Knapp expects a correlation in less spending at local businesses.  “But it may not be in some obvious way, and it does not apply to everyone,” he said. Someone planning to save, for example, has no bearing on the neighborhood furniture store. However, when the dividends do come out, sectors such as automotive, sales, electronics, furniture, restaurants, etc. are going to see a boost in activity, but not as big as in previous years, he said. Furthermore, when someone says, that stinks, $1,000 is disappearing from the local economy, Knapp offers this advice: “Keep in mind that the money has been saved by the state and does not mean it will not show up in the economy later. “ “We are taking the hit this year in lieu of a future hit,” he said. “That is not any consolation to businesses this year nor is it any consolation to a family of four that is receiving $4,000 less. That hurts. God, that hurts.” It’s possible though, he said, that a s a result of a lower PFD this year, the family won’t be receiving a $4,000 higher tax bill in the future, or their kids are not going to have more classmates because school budgets are cut, or the neighborhood will not be packed in snow because services were reduced. “I’m not saying you should like this, but we can’t see it as a total loss to the economy, it’s a shift.” Stephanie Prokop can be reached at [email protected]

Nageak’s lawsuit against state election officials to proceed

The case of Rep. Ben Nageak, D-Barrow, vs. Lt. Gov. Byron Mallott and Director of Elections Josie Bahnke will start on Tuesday, Sept. 27. Superior Court Judge Andrew Guidi has ruled that the trial must begin next week and end no later than Oct. 3 so that the Division of Elections will have proper time to mail ballots ahead of the general election. Attorney Stacey Stone, representing Nageak, requested additional time to put together a comprehensive witness list, as rural witnesses must be both properly vetted and logistically organized, continue the discovery process, and issue the necessary subpoenas. “The reality is that absentee voting starts on Oct. 24,” countered Assistant Attorney General Margaret Paton-Walsh. “That means ballots need to be mailed out by Oct. 17 which means we probably need a decision by the Supreme Court by Oct. 14.” In order for that to happen however, Guidi would need to make a decision by Oct. 7. “This sort of litigation is always expedited. That is something that the plaintiffs have to embrace when they file a lawsuit like this,” said Paton-Walsh. “We assert that the Division of Elections violated the law,” said Stone. “Essentially they created this issue,” she added, referring to the need to expedite proceedings. Tom Amodio, counsel for Dean Westlake, who defeated Negeak by eight votes in the Democrat primary after a recount, said his client supports the state’s position. The District 40 race does not have another candidate for the seat, meaning the winner of the primary will be heading to the Legislature next year. The election was marred by improper distribution of ballots which included some voters being given both the Republican and Democrat ballots. Contested ballots Bahnke, Nageak attorney Tim McKeever and Assistant Attorney General Elizabeth Bakalar all appeared in court by phone. McKeever requested that a dozen “special needs ballots” — submitted by elders of Buckland — be forwarded so that his team may inspect the originals prior to the start of trial, specifically for unobscured signatures. The judge ordered that copies be forwarded and originals be sent via courier to the Department of Law. Referring to the request as a fishing expedition, Paton-Walsh did not understand the concern, saying that redacted copies have already been provided. “I don’t understand why they are particularly concerned about these ballots,” she told the Journal following the status hearing. “I don’t think there is any basis for suspicion about the special needs ballots at all.” What happens next House District 40 has various “absentee voting in person” locations that need to have ballots available by Oct. 24. If the case is not resolved by the Supreme Court by Oct. 14, Westlake will appear on the ballot, creating potential disenfranchisement, and at the very least, confusion on the part of voters if it turns out that Nageak is the actual candidate, Paton-Walsh explained to the Journal. Furthermore, if there needed to be a special election because deadlines were not met, then it becomes an election where it’s just this one race on the ballot. In that case, she said, “far fewer people turn out to vote” as those who came out for the primary in August may not be able to come to a special election. Stephanie Prokop can be reached at [email protected]

Better Business Bureau Recognizes Whitfield Benefit Solutions of Anchorage

Whitfield Benefit Solutions of Anchorage is the Alaska winner of the 2016 Better Business Bureau  Torch Awards for Ethics. The five companies named from the Pacific Northwest region were chosen for “meeting BBB’s Standards of Trust and for their dedication to honoring their employees, clients and the community.” Pamela Whitfield, president and owner, as well as district general agent of Colonial Life, was originally based in the Puget Sound area until 2012. That’s when she won a bid for the Kenai Peninsula Borough. As it turned out, this now 56-year-old was a trapper and fishermen in Kodiak, and used to fish for halibut in Homer decades ago. So when she won the bid to replace Kenai’s benefits carrier at the time, Whitfield felt like she was coming home. She immediately fell back in love with Alaska and its people, the salt of the earth, good, kind working folks. Upon realizing there was an underserved market, with only one carrier for 25 years, she decided to move her agency here. Concentrating on growing the Anchorage office, Whitfield Benefit Solutions now has more than 150 accounts across the state. (Another 150 accounts remain in Washington.) She took a colleague’s advice, to “do what you say you are going to do,” and in 2015, sales doubled from 2014, partly due to securing a key Native corporation client and other businesses. “What creates success? Is it about doing the right thing in the right way every day? I really think that is the case,” she said. Although Whitfield Benefit Solutions does not sell medical, dental or vision, the rising costs of healthcare affects the need for her company’s portfolio of voluntary benefits, making them even more timely. In Alaska, there are tons of out of pocket costs, and unforeseen medical expenses are one of the biggest reasons for bankruptcy, she said. “If you have injury or illness, there is travel cost,” she explained, noting how difficult it is for rural residents to see specialists. The array of products offered, from accident to cancer insurance, are therefore designed to “lessen financial risk for really pennies a day,” she said. Working only through businesses and brokers, Whitfield Benefits Solutions adheres to a high standard of ethics across the board, the main reason the company was recognized by the BBB. Sales reps are required to present options only in informational ways, for example, and never misrepresent what is being offered. After all, the local marketplace does not appreciate pushy salespeople, overselling and heavy sales tactics, Whitfield said. “For Alaska it has to be simple, personal, and modern,” she said. With the fourth quarter approaching, Whitfield Benefits Solutions is gearing up for its busy season, when 50 percent of business takes place. Whitfield is very encouraged going in to 2017, as her agency is talking with significant large public and private sector clients, continuing to build on tech solutions for enrollment options, all while recruiting top talent and getting more involved in the community. “We really enjoy what we do and feel blessed to make a difference in people’s lives,” she said. “And it doesn’t hurt to live in such a gorgeous place.” 

Coulter talks campaign, crisis and Comedy Central at Anchorage event

Ann Coulter, a best-selling author and potential powder keg, depending on which side of the political aisle one sits on, had an entire audience on their feet when she spoke Sept. 17 at the Egan Center in Downtown Anchorage. Comedian Glenner Anderson flew down from Fairbanks to warm up the crowd with homegrown humor, and received an equally enthusiastic response. Sen. Lesil McGuire, who hosted the evening, suggested that Anderson should run the next Comedy Central roast, as the highly publicized Rob Lowe episode that aired recently - in which Coulter was a guest roaster - was a “despicable disgrace.” After a brief speech by Alaska Trump Campaign Chair Jim Crawford, Coulter took the stage and dove into a variety of topics from current events to the firebrand presidential election and the likelihood that the United States is toast should Donald Trump lose to Hillary Clinton this November. Regarding Trump and Clinton Before June 2015, Coulter did not know anything about Trump, and once the campaign progressed, wondered, “Why couldn’t it be someone elegant and well spoken, like Mitt Romney? But as soon as that thought enters your head, you realize, that is a creature that does not exist in nature. Romney could not have survived 30 seconds of the abuse…I can’t believe the attacks Trump has come under.” Trump, who does say “stupid things” at times, does not fall into identity politics, shoots from the hip and speaks to the entire working class, she said. He is “the only hope we had in a long time,” and wants to put America first, “whereas our betters in Washington want to put our country in the Top 10, maybe the Top 20.” On the other hand, if Clinton wins, she said, there will be nine Ruth Bader Ginsbergs on the Supreme Court and tens of millions of illegal immigrants will be granted amnesty changing the political landscape forever. Liberals, however, will probably start loving America because it’s not America anymore, she said. Regarding Immigration While taking a trolley tour during her time here in Anchorage, Coulter was somewhat shocked to learn that 94 different languages are spoken in local schools. “I would say 20 years ago, even Democrats would say that’s insane.” How do people communicate with one another, how is there money for school pageants and textbooks, when funds have to go to English as a Second Language classes? she asked. Unless immigration policies are dramatically changed, the country will turn into the Tower of Babel where Americans are being outvoted by foreigners, she said. Regarding the Media Coulter lambasted the mainstream media for controlling the narrative, citing various personalities and several outlets including a prominent local newspaper. It would be better to buy a V-chip than watch cable news, and better to cancel that subscription, she said. The elites, beside themselves with rage, are trying to destroy Trump, and rarely are they interested in what she has to say, unless it’s criticism of her candidate. “Also, the absolute hysteria on the left, I don’t know if any of you like to hate-watch TV like I did, but I noticed all of the hosts’ voices are getting several octaves higher. I don’t think this is confidence that their gal, the pouty pantsuit, is about to win in a landslide.” Regarding Republicans and Democrats Both parties are for the DREAM Act, what Coulter referred to as ‘Leave No Child Behind in Central America,’ and both parties are for the Trans Pacific Partnership trade deal that “will take any job that has not been shipped to Mexico and send it to Asia.”  So Republicans have not been much better than the Democrats, she said. “I didn’t realize it until Trump came along. I suppose I was naïve. I thought my party did care about the middle class.” Also, the RNC and consultant class have been forcing Republican political candidates to take suicidal positions forever, she said. Now, this election is the elite against the people. “For years now, when Republicans would win an election, that didn’t mean you win. No, your kid is still boxed out of college by affirmative action for immigrants, and your job is still outsourced. You still have to train foreign workers taking your job. And your community will still be flooded by illegal immigrants bringing in crime and drugs. That is what a ‘win’ looks like for the Republican party.” Regarding that Comedy Central Roast Thing “I got to advertise my book. Second, now that I have demonstrated to the left what it is like not to be a delicate snowflake who gets upset by words, I can say ANYTHING. No more weeping and fainting when I say ‘illegal aliens.’” Stephanie Prokop can be reached at [email protected]

PFD Lawsuit to proceed

A Superior Court Judge has agreed to expedite the trial on the request of plantiffs and the state. Anchorage Democrat Sen. Bill Wielechowski, along with former Republican Sens. Rick Halford and Clem Tillion, are suing the State of Alaska and the Alaska Permanent Fund Corporation to comply with legal obligations, mainly, to pay what is owed to the Dividend Fund and subsequently, to Alaskans. The civil lawsuit was filed before the Superior Court in Anchorage closed at noon, Friday, Sept. 16. The plaintiffs and the state have asked the Superior Court to expedite this case.  Because discovery is not required, both sides have agreed to file cross summary briefs by Oct. 28, with response to briefs due by Nov. 10th and oral arguments to be presented Nov. 14-18, should the court agree to the schedule. In addition, all involved parties have asked for a decision to be issued by Dec. 2, allowing several weeks for the presiding judge to deliberate. According to a tweet posted by Wielechowski on Oct. 4, "Judge Morse has agreed w our proposed schedule to expedite the PFD lawsuit. Date for court decision is not yet finalized." Why the Lawsuit? “I think it’s pretty self-explanatory,” said Halford, when asked why he and two others were suing and what the hoped for outcome may be. The state’s statutes, he said, makes it a case of the governor violating existing law. “It’s a constitutional dedication that starts with the language in the permanent fund itself,” he said. Prompting the lawsuit is Gov. Bill Walker’s partial veto of this year’s appropriations bill, which authorized a transfer of $695 million by the APFC instead of an estimated $1.3 billion. What is under contention is Walker vetoing what "cannot be vetoed." Yes, the governor has line item veto power, Halford readily acknowledged. However, that applies to items that actually require appropriations. The Permanent Fund is an exception to the rule, he said, explaining that appropriations were never necessary because funds are supposed to be automatically transferred to the state based on a specific calculation. Instead, the governor signed his initials after crossing out the line “authorized under AS 37.13.145(b)” and slashing the amount due in half. The $695 million was based on an estimated payment of $1,000 to every eligible PFD recipient this year. Walker had reduced APFC’s liability in an attempt to “ensure a PFD program continues for generations to come,” according to statements issued by the governor’s office. “It’s not an easy choice for me,” Halford said of proceeding with the lawsuit. “But I feel an obligation to stand up for what we put in place a long time ago.” The former senator does have sympathy for and agrees with most of what Walker is trying to accomplish, he said, but this is not one of them. “He is taking bad advice.” Heading to Court “I’m disappointed that an incumbent legislator who failed to work towards a solution to our fiscal crisis—a solution that would protect the long-term viability of the PFD—has decided instead to pursue this lawsuit eight weeks prior to his re-election bid,” said Gov. Walker in a statement issued Sept. 16, referring to Wielechowski. “This suit detracts from the real issue: solving Alaska’s fiscal crisis so we can then begin to grow Alaska.” In an interview with the Journal, Wielechowski stressed that he is filing as a private citizen, not as a sitting Senator, and is certainly not using state resources to pursue the matter. (His office, however, is fielding tons of phone calls pertaining to the PFD.) In early August, Wielechowski started the process by first sending a letter to Angela Rodell, Chief Executive Officer of the APFC, asking the corporation to transfer not the amount the governor had used executive power to okay, but the funds as mandated by the state’s constitution. The corporation is obligated, under Sec. 37.13.145, to transfer 50 percent of available income from the earnings reserve to the dividend fund at the end of each fiscal year. Income available for distribution, as stipulated in Sec. 37.13.140, is “21 percent of the net income of the fund for the last five fiscal years.” According to a preliminary draft presented to APFC’s Board of Trustees during a Sept. 2 Audit Committee meeting, however, “the dividend transfer is subject to appropriation by the Legislature.” The APFC sent a response to Wielechowski on Aug. 12, and also issued a statement the day the lawsuit was filed: “This year, when the time came to transfer a portion of the earnings generated by the Permanent Fund to the dividend fund, APFC transferred the amount authorized by the appropriation, just as APFC has done for the past three decades. We look forward to final resolution of this issue by the court.” Wielechowski reiterated that these funds are not subject to appropriations and so cannot be vetoed. "The question here is can you legally do this? I don’t think he (Walker) can. The legislature can change the law regarding the matter, but they didn’t."   This story originally ran Sept 21 and has been updated with information as of Oct. 4. It has also been corrected to say the APFC did send a response to Wielechowski's letter. Stephanie Prokop can be reached at [email protected]  

Pogo keeps production steady in 2016, embraces tech

Production at Pogo Mine near Delta Junction remains steady, with 280,000 ounces projected for 2016, down just 1,000 ounces from 2015. One reason for decreased production figures is an unscheduled interruption during the summer. (Daily production is roughly 850 ounces, and the mine operates year-round.) Lasting 18 days, the delay was caused when a GVEA power bump caused an under-voltage issue in the mill’s exciter controller. This year, $14.1 million has been allocated for operational capital, including purchases of underground Kubotas, several zoom booms, and the installation of an isomill. Capital expenditures were primarily for incremental improvements, rather than large-scale construction projects. For example, upgrades have been made to the gate house and Off River Treatment Works, while drifters on the bolters have been replaced to reduce maintenance cost and increase longevity. In addition, Pogo has finished up its paste pipeline - a mixture of cement and mine tailings pumped underground – to provide ground stability and the ability to mine adjacent to existing locations, filling voids underground. The paste was already in place in the main areas, and is new for the East Deep expansion. “We had a busy year in terms of projects,” said Pogo External Affairs Manager Lorna Shaw. Although operations are not currently affected by the state’s budget crisis, Pogo is concerned there will not be an adequate level of staffing at agencies in the future, as a decrease in personnel could delay the mine’s permit process for various projects. There is also concern about changes to the mining tax structure. “Have more mines, not an increase in taxes on existing mines,” Shaw said. New technology In the early days of Pogo, only one type of ore was mined, from the Leise Zone. Currently, Pogo has four main types of ore, each with additional variations, in several locations. Because it was difficult to determine a type’s origins once it arrived at the mill, and because each type of ore requires adjustments in process for maximum recovery, a geologist recommended an RFID system. Implemented eight months ago, and now in its final phase of automation, the tags now allow Pogo to track different grades and thus, plan for different rates of success and extract more gold from the same ore. The company recently purchased 4,500 tags for a six-month supply. (Each tag is one-time use.) According to Shaw, the RFID technology has been used extensively in the coal industry but is considered cutting-edge technology for a hard rock mine. Unrelated to the tags, LED lighting has also been installed on site.  The lighting does not affect operations but is a financial savings. Looking forward Pogo Mine is owned by Sumitomo Metal Mining Pogo LLC., a joint venture between Sumitomo Corporation and Sumitomo Metal Mining Co., Ltd. of Japan. Earlier this year, Yoshiaki Nakazato, president of Sumitomo Metal Mining, said the parent company is looking to boost overall gold production, and wants to double output by 2021. “There is no expectation that Pogo is going to double production,” Shaw said. “We put together a three- year budget and a three-year plan. It’s a little bit different than other North America mining companies.” While some may define “long-term” as three to five years, she said, Sumitomo defines it as five decades. As a result, Pogo, now in its 10th year of operation, is slightly more insulated by the fluctuating price of gold, Shaw noted. “Pogo has continued to invest in exploration, even when other mining companies have not,” said Shaw. The company is spending $10 million in 2016, down from $15 million in 2015. The labor force remains steady at 320 full-time employees, with 70 percent local residents. (A percentage of employees were initially local but have since moved out of state and continue to commute.) To celebrate those who have been with the mine for years, the company launched a series of videos to tell the story of Pogo through the eyes of its “Pogo Pioneers.” Fort Knox Fort Knox produced 401,553 ounces in 2015 and poured its seven millionth ounce of gold in July of 2016. The mine, owned by Fairbanks Gold Mining Inc., a wholly owned subsidiary of Kinross Gold Corporation, has 680 employees. “We believe Alaska is an attractive mining jurisdiction and a good place to do business — we have successfully operated Fort Knox for more than 20 years, have contributed significantly to the local economy through wages, taxes and support of local businesses, and have strong relationships with local stakeholders,” said External Affairs Officer of Fort Knox Anna Atchison via email.  According to the annual activities report presented to the Department of Natural Resources in March, the Fort Knox mine has plans for various projects, including construction of a 17-foot raise of the TSF dam, and conducting bend and pilot testing for a future water treatment system. Stephanie Prokop can be reached at [email protected]

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