May 7, 2010
This website is an effort to allow Alaskans to get the facts about how corrupt and what a bad example Alaska Permanent Fund Board (APFB) really is. You as an Alaskan are supposed to own Alaska Permanent Fund. Your APF Dividend is not a gift but an entitlement of residency. APFB is appointed by the Governor but not confirmed by Alaska Legislature so that is no system of checks and balances which is essential for any level of accountability. Checks and balances are what make United States and can make our great State of Alaska strong. Who should be the “watch dog” of APFB? Currently, no authority in Alaska is responsible for making certain APFB practices are based on the public interest instead of self-interest. Alaskans might think Alaska Permanent Fund has made money but that is just propaganda and deal-making among financial institutions. How much would APF be worth if it were cashed out? That is what is important. Alaskans as well as Americans should realize that Alaska Permanent Fund Board of Trustees control such a large amount of money currently as to influence the Stock Market on Wall Street, the Federal Reserve Board, and major business institutions in United States, not to mention every bank in Alaska and Alaska financial management companies. Alaska media which is over 95% owned in many states of the Lower 48 has been asked for many years to investigate APFB without response. We have been told that unless we can prove a direct conflict of interest in that the investments of APFB can be directly traced to the investments of APF staff, there will be not be local Alaska media coverage. We do not have enough access to APFB dealings in order to make that determination. “Res Ipsa Loqitur.”
The lack of investigative reporting regarding the corrupt and unaccountable practices of APFB is especially Mr. William G. Moran, Jr. shows us that Alaska media is a front for APFB’s unaccountable practices. Only a handful of Alaskans primarily Mr. Moran and Company are making an enormous amount of money off our Fund. In fact, Mr. Moran’s two banks, First Bank Ketchikan and Community Bank, Joseph, Oregon, made a whopping $557,503,303 from 12/06 to 12/09 which is at the top of homepage of this site. The Governor is the only level of accountability. Why do you think everyone wants to be Governor? Answer:Control of the Alaska Permanent Fund money. Let’s make our Fund a major campaign issue. We found it unbelievable that former Governor Sarah Palin brought up Alaska Permanent Fund as something she is proud of during the only Vice-Presidential Debate October 2, 2008 at Washington University in St. Louis. The media and Alaska Legislature should expose the lack of supervision of APFB. Please call our Alaska Legislators and ask them why they let this corruption continue.
Alaska Statue 37.13
Please read Alaska Statute 37.13 by way of background. A.S. 37.13.050 “Composition and qualifications of board of trustees” must be rewritten immediately by Alaska Legislature. Currently, it reads:“(a) the Board of Trustees of the Alaska Permanent Fund Corporation consists of six members appointed by the governor.” Current A.S. 37.13.050 continues:”Two of the members must be heads of principal departments of state government, one of whom shall be the commissioner of revenue.” Why is the appointed Alaska Attorney General allowed to be a member APFB? The Office of Alaska Attorney General should be the “watchdog” of APFB. Please review the file at the top left side of the homepage entitled:”2007 Request for Alaska Investigation.” Alaska’s newly appointed Attorney General by former Governor Sarah Palin before she resigned in July, 2009, Daniel S. Sullivan, is not a member, APFB. Alaska is the only state in U.S. where there is no elected attorney by designation including Alaska Attorney General. Per National Association of Attorneys General, 43 of the 50 U.S. states have elected Attorneys General.
Continuing A.S. 37.13.060 “Term of office” states: “... four years, and they may be reappointed.” That would be a total of eight years. Mr. Eric Wohlforth was a member and Chair, APFB, 1995-2006 or 12 years. APFB really do not have “terms of office.” Mr. Wohlforth commented on February 25, 1999 at Arco Alaska to a room full of Alaskan economists: ”Dr. Obermeyer, I entirely agree that the Board should be appointed by the Governor, confirmed by the Legislature. . . Not be subject to firing as will as they currently are so I completely agree with your position and I think it is unfortunate that we have a system where each Administration throws all the old Trustees out and the new Trustees sit there with the notion: ’My God, I am responsible for $25 Billion bucks’ and the people of the State suffer for six or eight months while they achieve a learning curve so I agree with you 100 Percent.”
Governor Frank Murkowski when he was elected in 2002 left Mr. Eric Wohlforth as the single incumbent APFB member replacing all five of the other APFB seats. When former Governor Tony Knowles was elected in 1994, he replaced all six members including Mr. Wohlforth. Outgoing Governor Frank Murkowski lost the Gubernatorial Election in November, 2006. He replaced Mr. Wohlforth on November 15, 2006 with Mr. William G. Moran, Jr. When Sarah Palin was sworn in December 5, 2006, she could have changed Frank Murkowski’s appointment of Mr. Moran but she did not.
“Individual Investment Transaction Disclosures (IITDs)”
A.S. 37.13.110 “Conflicts of interest” refers to A.S. 39.50.010 “Findings and purpose. “. . .to discourage public officials from acting upon a private or business interest in performance of a public duty.” This website attempts to show that the practices of APFB for many years have been to make investments in the Stock Market on Wall Street to enrich their private banks accounts based on the most solvent amount of money in the U.S. Stockbrokers are hired by APFB to advise them about the most advantageous stock investments so that APFB can “pick their brains” and make “Individual Investment Transaction Disclosures (IITDs)” that anywhere else in the U.S. would be labeled “Insider Trading.” APFB members currently have a right under State of Alaska law to make investments in the Stock Market per A.S. 37.13.110(b). Why are APFB allowed to do this? We must start asking questions like are the APFB members’ investments on margin accounts or are they investing their own money? We are unable to get any information on what is really going on with APFB’s astronomical investments currently.
Also, Mr. Michael J. Burns, Executive Director, has not released an “Individual Investment Transaction Disclosures” since March 3, 2009 but when one reviews his “2010 APOC Financial Disclosure Statement” at the bottom of the file, under “Schedule B Business Interest,” Mr. Burns lists 11 pages of stock investments. Therefore, we allege that Mr. Burns has deliberately broken for over one year A.S. 37.13.110 (b) “If a member of the board or an employee of the corporation acquires, owns, or controls an interest, direct or indirect, in an entity or project in which fund assets are invested, the member shall immediately disclose the interest to the board. The disclosure is a matter of public record and shall be included in the minutes of the board meeting next following the disclosure.” Each “IITD” form refers to A.S. 37.13.110 (b) at the top on the right hand side. Mr. Burns filled this form out from 10/28/04 until 3/3/09 so he followed the law for five years and then stopped submitting them. It is his responsibility to collect these forms from the Board members and his staff.
We have begun posting “2010 APOC Financial Disclosure Statements” and “IITDs” APFC staff. There are 33 APFC employees but only 17 submitted "2010 APOC Financial Disclosure Statements.” Why were some employees required to submit Financial Disclosure Statements and others not? On what basis are APFC employee paid?
Mr. Jeffery Scott, Chief Investment Officer is paid $325,000 yearly whereas Mr. Burns, Executive Director, is paid $275,000. Mr. Scott’s “2010 APOC Financial Disclosure Statement” attests to the fact that he does not even live in Alaska. We Alaskans are supposed to prove that we have not been out of Alaska for 90 days or we do not get a Dividend, and yet, the highest paid employee of APF does not live in Alaska.
Several employees on their “2010 APOC Financial Disclosure Statements” did not list their and/or their spouses salaries at all including Mr. Kendziorek (who is married to an Assistant Attorney General) (submitted 4/1/10), Ms. Duran, and Ms. Martinez. Others only listed ranges including Mr. Parise, Mr. Burger, and Ms. Plett. What are their exact salaries?
We Alaskans have let APFB and staff get away with corrupt practices that do not even make sense for years. We must establish a system of checks and balances in our Alaska State Government. We live in the only state in U.S. that does not have a law school or, as stated above, any elected attorney by designation. Buzzwords like Attorney General, Prosecuting Attorney, District Attorney, Administrative Law Judge, etc. are used. Those in power want to make certain that Alaskans do not figure out that APFB should not have a right to enrich their private bank accounts “off” our Alaska Permanent Fund. If Alaska Legislature enacts legislation to confirm APFB, these issues will be discussed publicly during the confirmation process. Confirmation would show respect for public office for the first time in Alaska. Alaska Legislature should create accountability by rewriting and updating A.S. 37.13.050, A.S. 37.13.110(b), and A.S. 37.13.060. The issues of confirmation, terms of office, “Individual Investment Transaction Disclosures,” whether APFB should include our appointed Alaska Attorney General (AG) rather than designating him/her as the “watchdog” for APFB should be addressed publicly, revised, and codified into Alaska Statutes.
APFB currently does not practice American law. It is impossible to get a transcript of the minutes of APFB Meetings. Minutes create a record of accountability. When the meetings are held, packets are mailed to anyone who would like to get a copy but they are not paginated and are clamped together as separate pages like “gobbly-gook.” At most APFB Meetings Outside experts are represented. Local citizens are not hired by the Board. The primary example is Mr. Michael O’Leary, Executive Vice-President, Callan Associates, Denver, Colorado who comes to Alaska several times a month to advise municipalities, Anchorage Police & Fire Retirement Board, and other groups which all “feed off” Alaska Permanent Fund money. APFB routinely puts out propaganda that students are hired as Summer Interns. Who are they? Why does APFB not hire local Alaskans for investment advice? The answer is Alaskans would quickly figure out how corrupt and un-American the practices of APFB are.
Please review our efforts to bring what APFB is doing to U.S. Securities and Exchange Commission (SEC). We have written SEC as recently as April, 2009 without response. We contacted Federal Trade Commission and received a response in April 29, 2009. The definition of “Insider Trading” is well spelled out at SEC,1998 speech and wikipedia. Simply put, “Insider Trading” is buying and selling of stock by those with access to information not held by the general public. APFB must be doing this with their investments but it is perfectly legal because Alaska law is silent on this issue.
Martha Stewart has been the most famous and highly publicized person charged on June 4, 2003 of “Insider Trading.” She avoided a loss of about $51,000 by selling nearly 4,000 shares of ImClone stock on December 27, 2001 rather than the next trading day when the stock tumbled. In March, 2004 she was convicted by a jury of conspiracy, obstruction of an agency proceeding, and making false statement to federal investigators. She went to jail for five months and served two years of supervised release. Her conviction and that of her Merrill Lynch Broker, Peter Bacanovic, were upheld by the U.S. Court of Appeals fore the Second Circuit in New York. Also, Dennis Koziowski and Mark Swartz were charged with looting Tyco of $600 million; John Rigas and his sons were charged with stealing millions from Adelphia, the cable company Rigas founded; and the collapse of Enron and WorldCom led to billions of dollars in losses for investors and thousands of job losses.
In Fall, 2009 a Hong Kong judge convicted Du Jun, a former Morgan Stanley banker, on nine counts of “Insider Trading” over investments of $4.3 million in a landmark case for Hong Kong securities regulators. The judge reserved some of his harshest words for Morgan Stanley, which approved Mr. Du’s purchases, brokered his trades, and offered him leverage on his stock purchases.
Alaska Public Office Commission
Alaska Public Offices Commission (APOC) per "Ethics Legislation 2007" SCS CSHB 109(FIN) am S has still not posted the yearly APOC Financial Disclosure Statements of APFB so we continue to post them as this site.
Ethics Legislation 2007" SCS CSHB 109(FIN) am S Page 28 of 43 states in the middle of the page:
Section 45. AS 24.60.2120 is amended by adding a new subsection to read:
“(c) The Alaska Public Offices Commission shall require that the reports required under this section be submitted electronically. . ." The Ethics Law has been codified. The respective statutes which apply are: AS 39.50.050(a) (Public Official Financial Disclosure); AS 15.13.040(m) (Campaign Disclosure); AS 24.60.210(c) (Legislative Financial Disclosure); and AS 24.45.061(c) (Lobbyist reporting). In all cases filers are to submit reports electronically, unless an exception is warranted. Some filers are filing electronically now via a pdf format.”
A presentation was made to APOC on February 6, 2008 per.
APOC is only reimbursed $50 a day for their meetings so we have recommended that their compensation for this very important work be the same as the compensation of APFB Alaska Statute Sec. 37.13.090 or $400 plus travel. APFB reports to APOC. Please review 26th Alaska Legislature SB 113 and HB 165 sponsored by Senator Kevin Meyer and then Representative John Coghill respectively to increase the compensation of APOC to $150 per day and “Sponsor Statement.” Since these bills did not make any progress, they will have to be reintroduced in the 27th Alaska Legislature 1st Session .
History of Alaska Permanent Fund
Alaska Permanent Fund was created by voter referendum in November, 1976 in order that the substantial money from oil development in Alaska be saved for future generations of Alaskans. The intent of the voters that year was to avoid squandering money and to create a legacy when Alaska natural resources would not produce the kind of astronomical wealth unknown in Alaska previously. Alaska Permanent Fund has been labeled Alaska’s “rainy day account” or an endowment, neither of which are true based on current practices. Money from the very solvent Alaska Permanent Fund is the result of litigation in the 1970s from oil flowing down Trans-Alaska Pipeline System (TAPS). TAPS current ownership is British Petroleum 46.93%, ConocoPhillips 28.29%, Exxon Mobil 20.34%, Unocal 1.36%, and Koch Alaska 3.08%. Alaska has given too much to the multi-national oil companies. It is time for Alaskans to put our state back in Alaskans hands. It is appropriate that our elected Alaska Legislators be given this responsibility. This is why APFB should be confirmed. Fair Alaska law licensure would strengthen local Alaskans being in control of our own destiny..
Only four banks in Alaska are chartered and regulated by Comptroller of the Currency, Administrator of National Banks, U.S. Department of Treasury which ensures a safe and sound national banking system for all American per US Treasury Dept. Please review the list and by bank name. Only First National Bank Alaska, Keytrust Company National Association, Wells Fargo Alaska Trust Company National Association, and Wells Fargo Bank South Central National Association, are listed. Please review a complete list of “2009 Alaska Directory of Banks and Financial Institutions.” Mr. William Moran’s First Bank of Ketchikan and Community Bank, Joseph, Oregon are privately held so these banks do not participate in the regulations of the American banking system by the Comptroller of the Currency.
Some of the documents here include a smattering of the investment companies that are in business based on Alaska Permanent Fund money just like all the local Alaska banks are. There was a paid advertisement in Anchorage Daily News February 24, 2002 as regards $1,774,117,000.00 Alaska Permanent Capital Company then owned by David Rose (now deceased). Alaska Permanent Capital Company today has assets of “almost $2 Billion.” The company was founded by Mr. Dave Rose after he had been Executive Director, APFB, 1982-1990. Mr. Rose was never on APFB so how was he allowed to control that kind of money when he left his paid position as employee to APFB?
Mr. Bob Gillam, McKinley Capital Management Company, wrote a letter on February 27, 2002 after the advertisement of Alaska Permanent Capital Company appeared in Anchorage Daily News stating that McKinley Capital Management Company “has assets under management that are approximately double that reported (by) Alaska Permanent Capital Management Company.” This meant McKinley Capital had assets of about $4 Billion in 2002. Mr. Gillam advertised in Anchorage Daily News in June, 2006 that stated:”McKinley Capital manages over $10 Billion in assets for clients worldwide (and) employs over 70 staff members.” Mr. David Gottstein, Co-Chair with Governor Walter Hickel, Backbone, to create accountability regarding Alaska Natural Gas Pipeline owns Dynamic Capital Management Company which in 2002 had assets of about $40,000,000. The assets have probably risen like those of the other companies. How have these companies been able to exist off APFB which is not confirmed by Alaska Legislature?
Also, Mr. Joseph Moran, brother of Mr. William Moran, is the Agent for Service of Process for Alaska Growth Capital BIDCO, Inc., which is a subsidiary of Arctic Slope Regional Corporation, 3900 C Street #302, Anchorage, Alaska 99503-5965 (907)339-6760, toll free (888)315-4904. per Page 68. Mr. Eric Wohlforth, former 12 year member and Chair, APFB, who was replaced by Mr. Bill Moran, is a current Board member, Alaska Growth Capital BIDCO per. Alaska Growth Capital BIDCO has $140 million portfolio and receives its money from Small Business Administration and U.S. Department of Agriculture. ADN reported on 4/18/10 “U.S. Small Business Administration said its Alaska lending volume totaled $27.1 million in the first six months of federal fiscal year, which ended March 31. In the same months a year earlier, the loan total was $10.3 million, SBA said. The federal stimulus act last year included language to guarantee repayment of up to 90 percent of small-business loans and eliminated guaranty fees for borrowers, SBA said. Alaska Growth Capital BIDCO was the top SBA lender in Alaska through the second quarter with almost $12 million in loans.” It has been reported that Alaska will get the highest per capita Stimulus Funds but ”Congress changes cut state earmarks” ADN 2/22/10 states “Alaska's congressional delegation landed $227 million in earmarks in 2009, compared to $87 million in 2010.”
Please analyze the issue of bonded indebtedness which is only to make a few Alaska Bond Counsels especially Mr. Eric Wohlforth and Company wealthy. The chart of Wohlforth Johnson Brecht Cartledge & Brookings which shows how many State of Alaska agencies have had this law firm as their Counsels. Very little has changed recently. On this site are a few articles published in ADN which regard to bonded indebtedness. Alaska is a monopoly of interest. Why do we need school bonds, road bonds, park bonds, municipal government projects bonds, private-public partnerships bonds, etc. when there is Alaska Permanent Fund per ? We read all the time in our media that is owned in the Lower 48 that Alaska bond ratings are A+ or excellent. Why? Outside financial interests control Alaska with the exception of a handful of Alaska attorneys and business people. All we have as Alaskans are bonds to pay beck instead of owning our own public buildings, roads, public works projects, etc. Bonded indebtedness is “a smoke screen” to make Alaskans think there is very little money here when we have a Fund worth over $36 Billion currently without any “checks and balances.”
Alaska Permanent Fund Dividend
Please read some of the propaganda about Alaska Permanent Fund that has been reported in Alaska media. HB 166 sponsored by Representative Bill Thomas regarding “Pick, Click, and Give” or legislation that requests Alaskans to give part of our Dividend to non-profits per passed Alaska Legislature and was signed into law on May 30, 2008 by then Governor Sarah Palin. It will expire on December 31, 2011 unless Alaska Legislature continues it. This law is very poor public policy when APFB is totally unaccountable. Please read that Senator Hollis French and Representative Harry Crawford are running for Governor and U.S. House of Representatives respectively on a platform of enshrining the Dividend in Alaska Constitution per.
There is a wikipedia listing for the Dividend which lists the amount of each Dividend since it was first distributed. Percent of Market Value (POMV) is discussed which would also amend Alaska Constitution so that only 5% of the Fund’s value each year could be spent at the discretion of Alaska Legislature. Alaska Permanent Fund staff puts out that a five year profit/loss average is the calculation of how much Alaska Permanent Fund Dividend will be although it is never released more than a few months in advance of distribution. The amount is contrived. Alaskans are not even considered in the decision-making about Alaska Permanent Fund issues especially the Dividend. We must rise up and become responsible for our own resources.
Under Governor Murkowski, Alaska Permanent Fund Dividend was cut in half or one-third even though Alaska Permanent Fund value increased each year he was Governor 2002-2006. The ruse is that a very large Alaska Permanent Fund Dividend bureaucracy has been established to monitor check distribution and there are extensive State of Alaska court cases about qualifications to obtain the Dividend at the same time, APFB has been allowed to make astronomical “Individual Investment Transaction Disclosures.” Long time Alaska residents explain that they have been investigated if they leave State of Alaska because it is required that they only be out of state for 90 days throughout the year in order to receive the Dividend. Can we Alaskans figure out how much APF Dividend office is spending on investigating average Alaskans as we do not even notice how corrupt APFB has become? Alaska Permanent Fund and the Dividend became such a joke in the rest of U.S. that the Dividend was the subject of “The Simpsons Movie” in the Summer, 2007.
Today, at Alaska Permanent Fund is presumably worth about $36,000,000,000.00. Per Ms. Debbie Bitney, there were about 653,140 applicants in 2009. If each Alaskan had received a $10,000 Dividend based on the number of applicants, the cost would have been $6,531,400,000.00. Alaska Permanent Fund Board and Mr. Mike Burns, Executive Director, would still have $29,468,600,000.00 with which to enrich their private bank accounts after the $10,000 Dividend was paid. Alaskans received a paltry $1.305.00 at a cost of $853,347,700.00. The deadline for the next Dividend application was 3/31/10. It has been announced that this year’s Dividend will be less than last year.
Please research the country of Norway that established a “Government Pension Fund” in 1990 which had been worth $354,5 Billion a year of so ago although it has probably lost revenue in the last year. The revenues of this Fund are generated mainly from corporate taxes on petroleum companies, exploration licenses, and from revenues of StatoilHydro which is partially owned by the country of Norway. Fund administration is the responsibility of Norges Bank Investment Management, which is an agency of Norges Bank, the Norwegian central bank.
Fair Alaska Law Licensure
If there were fair Alaska law licensure, the corrupt and unAmerican practices of APFB would change. Please review this for an analysis of current issues about Alaska Bar Association. Also, check. Per Todd Communications Alaska Directory of Attorneys Fall, 2009 Chart Page 3
We conclude that the 556 or 18.5% Alaska Active Out of State Attorneys out of 2,999 total Alaska attorneys are feeding off Alaska wealth. In the last two years, 45% of the Alaska Bar Association licensees have been by reciprocity rather than by Alaska Bar Exam. Why do all these out of state attorneys want to be licensed in Alaska? Alaska Out of State licensed attorneys are making money off Alaska. Alaska Active Out of State attorneys are probably the highest number of any state bar association in the nation. Alaska Bar Association has given our great State of Alaska away to the most powerful law firms in the U.S. The same chart lists Alaska Government total 783 out of Alaska In State Total 2,443 attorneys or almost 32% of Alaska In State Attorneys are listed as working for the Government including 12% Federal (100), 78% State of Alaska (618), and 10% local Municipal (65) Government.
Ethics complaints are supposed to be investigated as a result of “Ethics Legislation 2006.” After a complaint was filed with Select Committee on Legislative Ethics of Alaska Legislature, we were referred to the State of Alaska Attorney General’s Office of Opinions, Appeals, and Ethics. A formal complaint was filed “Alleging a Violation of the Alaska Legislative Ethics Law A.S. 24.60” on September 22, 2007. Ms. Julia Bockmon, Assistant Alaska Attorney General, threatened economic sanctions if the “Ethics Complaint” was released per her letter of October 1, 2007 ”Request for Alaska Investigation 2007”.
Additionally, there was an effort to get grant funding from Ms. Barbara Jones, Chair, Law Related Education (LRE) Committee of Alaska Bar Association in 2007 but the application was rejected. Since then, LRE Alaska Bar Association applications have not available to us. We also wrote a grant proposal in 2007 to Alaska Community Foundation for funding which was rejected. In the past, we have written proposals to Alaska Humanities Forum without success. We have let Foraker Group know about this website. There have been a few advertisements in the Alaska Bar Association Bar Rag, UAA Northern Light, and ongoing advertisements in the Catholic Anchor since September, 2007.
Mr. Moran has become the primary focus of APFB. Are his investments which have increased the value of his two banks in the three years over a half billion dollars or $557,503,303.00 he has been a member, APFB, been for the public interest or self-interest? Mr. Moran’s “term of office” expires in July, 2010. He should not be reappointed. Do Alaskans really think the APFB members care about our “rainy day account?” Alaska Permanent Fund is not an endowment currently but simply a front for Mr. Moran and Company to amass more wealth. Currently, “Insider Trading” of APFB is legal and practiced monthly by the Board, primarily Bill Moran.
We do not believe that our great State of Alaska can have good business development with the antics of Alaska Permanent Fund stifling progress. This at the same time there is unfair and only preferential Alaska law licensure. What goes on with our Fund as Alaskans is un-American and accountability must be created. If the current practices of Alaska Permanent Fund Board continue, Alaska Permanent Fund Corporation must be taxed.