By Gregg Erickson
February 26, 2006
Mr. Chairman, members of the board, I appear here today on behalf of the ALASKA BUDGET REPORT. I am the neqsletter's reporter on permanent fund issues, and have held down that beat since 1991.
I hold in my hand seven letters from Mr. Mike Burns your executive director, denying us the right to see public records. The oldest is dated two months ago, December 27, 2005. The most recent was sent last Friday.
I do not criticize Mr. Burns or his staff: they have responded with complete professionalism to my requests. They tell me it is your policy they are executing. That's why I am addressing you.
Regardless of how long your confidentiality law has been on the books, what has happened since December 27 looks to me like a brand new policy. From 1991 to 2003 I requested dozens of APFC documents. Not a single request was denied.
The documents we have requested are important to our ability to report what you as trustees are doing with the public's money. We believe the public needs the information in these documents to assess whether you-and the Murkowski administration-are living up to your responsibilities.
You apparently believe secrecy is now necessary for you to fulfill your responsibilities under the law to "preserve the purchasing power of the fund while maximizing its total return." But the surest protector of the permanent fund's safety is a vigilant public looking over your shoulder. It's a mystery to me how you think you can keep the public in the dark about your most controversial investments without sacrificing that. How many basis points is that worth?
You tell us we can't know the names of the people running your private equity partnership schemes, people to whom you are entrusting hundreds of millions of dollars in public money. For all we know, these could be convicted felons. Can you tell me they are not? Here are the documents you gave us. Here are the black blots where the names were once written.
I've heard you say your new secrecy policy is okay because all the pension funds are doing it. You are not a pension fund. The rules for a pension fund trustee are 100 times more clearly defined than the rules that apply to you. That is why the governor wants you, and not the managers of the state's pension funds, to consider investing in a gas pipeline.
Mr. Vern McCorkle, publisher of Alaska Business Monthly said this about your ability to protect the fund principal while abandoning public scrutiny: "It's bad public policy if we have to operate behind secret closed doors when you're working with public money." Mr. McCorkle noted that just trusting the board is what got ENRON stockholders in trouble. Ms. Achee has McCorkle's exact transcribed words.
And here is what another journalist, the Voice of the Times' Paul Jenkins had to say on the same question: "The fact that there's been a law on the books for 25 years that says they don't have to tell us everything- the more secrecy there is, the more nervous I get. I understand why, in the financial community you can't work with your hands tied behind your back. Still, it just gives me the creeps."
It ought to give you the creeps, too. ALASKA BUDGET REPORT urges you to give up your policy of keeping the public in the dark about your most controversial and risky investments. It's not worth it.
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