Larry Persily

Larry Persily

Point of View: Letting politics influence permanent fund decisions creates possibilities for misery

An impartial board of trustees is the only vaccine against politicizing the fund.

By Larry Persily

Letting politics influence management decisions of the Alaska Permanent Fund is like inviting an acquaintance with COVID-19 to dinner. You may get lucky and nothing bad happens, but the possibilities for misery are real.

One of the tenets of an endowment fund is to minimize risk, or at least measure the risks against the potential gains. It’s unclear whether the permanent fund’s board of trustees were thinking about that when they voted 5-1 recently to fire Angela Rodell, who had served as executive director the past six years. During her tenure, the state’s main savings account grew from $51 billion to more than $81 billion under solid management practices that avoided political investment decisions.

That may be ending with Rodell’s firing. The trustees provided no explanation for their decision and abruptly ended the meeting after the vote. Her dismissal comes after an audit praised the fund’s management, and after record investment gains in the fiscal year that ended June 30.

As long as the fund succeeds with its investment strategy and elected officials do not overdraw the checkbook to pay bigger Alaska Permanent Fund dividends, the account is projected to reach almost $100 billion 10 years from now. That would be enough to cover most of the state budget for public services, just as intended when voters approved the constitutional amendment establishing the fund in 1976, and also pay out a reasonable dividend to hundreds of thousands of Alaskans each year.

So why fire the director? The trustees aren’t talking, which violates the first rule of honest and open government, in addition to damaging the fund’s relationship with its investment partners, who probably wonder what just happened.

Whatever the secret reasons of the five trustees last appointed by Gov. Mike Dunleavy, it appears the governor’s quest for a larger, pre-reelection campaign dividend was a possible factor, along with his attitude that some of last year’s investment earnings should be spent on bigger dividends rather than kept in the account to protect the fund when bad investment years hit the balance sheet.

Rodell, to her fiduciary credit, has spoken consistently and strongly — but always respectfully and politically cautiously — that overdrawing the fund by several billion dollars, as the governor wants, is not a good idea for the account’s long-term health.

She also spoke up when the governor’s Revenue Department commissioner, who serves on the board of trustees, tried to block performance bonuses for fund employees. The commissioner, in politicizing a budget decision, said it would send a bad signal to pay bonuses when the dividend is smaller than Alaskans deserve. The bad signal was talking about the dividend at all — the Legislature appropriates money for the dividend, not the fund’s trustees.

Legislators are understandably upset that the governor has turned the fund’s earnings into a potential campaign speech. They are calling for hearings into Rodell’s firing and want to understand what happened and why. As they should.

An impartial board of trustees, not beholden to the governor, is the only vaccine against politicizing the Permanent Fund.

Larry Persily is a longtime Alaska journalist, with breaks for federal, state and municipal service in oil and gas, taxes and fiscal policy work. He is currently owner and editor of the weekly Wrangell Sentinel newspaper.

More in Opinion

William Marley’s proposal for a bayfront park on the Sterling Highway. (Illustration provided)
Point of View: Some alternatives for a community center

Entering the City of Homer from Bluff Point has to be one of the most pristine view experiences of geography and nature, ever.

Alan Parks is a Homer resident and commercial fisher. (Courtesy photo)
Voices of the Peninsula: HB 52 would hurt commercial fishing and community

Upper Cook Inlet fishing families have been hit hard by ongoing politics

Opinion: The buck stops at the top

Shared mistakes of Dunleavy and Biden.

A sign welcomes people to Kenai United Methodist Church on Monday, Sept. 6, 2021 in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
It’s time for a federal law against LGBTQ discrimination

When my wife and I decided to move to Alaska, we wondered if we would be welcome in our new neighborhood.

Terri Spigelmyer. (Photo provided)
Pay It Forward: Instilling volunteerism in the next generation

We hope to have instilled in our children empathy, cultural awareness, long-term planning and the selflessness of helping others

Hal Shepherd in an undated photo taken near Homer, Alaska. (Photo courtesy of Hal Shepherd.)
Point of View: Election integrity or right-wing power grab?

Dr. King would be appalled at what is happening today

Nancy HIllstrand. (Photo provided)
Point of View: Trail Lakes is the sockeye salmon hero, not Tutka Bay

Tutka hatchery produces a pink salmon monoculture desecrating Kachemak Bay State Park and Critical Habitat Area as a feed lot

A map of Kachemak Bay State Park shows proposed land additions A, B and C in House Bill 52 and the Tutka Bay Lagoon Hatchery. (Map courtesy of Alaska State Parks)
Opinion: Rep. Vance’s bill is anti-fishermen

House Bill 52 burdens 98.5% of Cook Inlet fishermen.

A sign designates a vote center during the recent municipal election. The center offered a spot for voters to drop off ballots or fill a ballot out in person. (Ben Hohenstatt / Juneau Empire File)
Opinion: The failure of mail-in voting

The argument that mail-in balloting increases voter participation never impressed me

Most Read