The ethical case for the repeal of SB 21

I went to Juneau last January for a weeklong seminar on the legislative process. It was one of the most intense and fast-paced educational experiences of my life. With my class, I was able to meet with 31 different legislators, along with multiple lobbyists, reporters, commissioners, justices, mayors, and even the governor. I came away with not only a greater understanding of the process, but a greater appreciation of the hard work our citizen legislators put in, the personal sacrifices they make to serve, and the transparency of our public processes. Our system, with its thoughtfully crafted Alaska State Constitution, was well conceived.

On Aug. 19, we have the rare opportunity to participate in direct democracy by voting on Ballot Measure 1. Both sides of the debate attempt to craft their arguments as though their side benefits everybody. Both claim that their side is better for the State of Alaska, the permanent fund dividend, education and the economy. Ceteris paribus, Latin for “all things being equal,” is a concept used in economics to compare systems or scenarios. Ceteris paribus, ACES made $8.5 billion more for the State of Alaska than SB 21 would have between 2008 and 2013. This is a fact. Beyond that, I can give you compelling reasons for or against either tax structure. In its simplest terms, what seems clear is that ACES was better for the State of Alaska, and SB 21 is better for the oil companies and the companies who serve them. There is plenty of other analysis out there, superior to my ability to create, to base your decision on economically.

My appeal is systemic and centers on ethics. I grew up in and around Chicago, one of the most corrupt cities in the United States. I was one of a handful of Republicans in a city controlled by a Democratic machine. Chicago is the city where people “vote early and vote often.” Dead people vote in Chicago. It is widely believed that Chicago fixed the 1960 Presidential election to propel Kennedy over Nixon. When Chicago mayor Richard J. Daley was accused of nepotism, he asked, “What father wouldn’t throw his arm around his son and give him a helping hand?”

One of my undergraduate majors was Political Science. I have observed many parallels between the Democratic machine in Chicago and the Republican Party in Alaska. As Lord Acton told us, “Power tends to corrupt, and absolute power corrupts absolutely.” I have watched a U.S. Senator appointed by her father, the governor, and several sitting legislators go to prison for bribery. As a moral and fiscal conservative, I am saddened by our inability to police ourselves. Nepotism is not family values and corporate welfare is not conservative. This is why I — like 54% of registered voters in Alaska who are Nonpartisan or Undeclared — have no party to call home. We are the silent majority, but we will not be silent on Aug. 19.

I am not alone in my observation. Fortune Magazine published a recent study of the 50 states by Indiana University where Alaska was named the 7th most corrupt State in the U.S. when indexed by employment. The study defined corruption as “misuse of public office for private gain.” We have been busy during our 55 years of existence. If we look at the study indexed on population, Alaska is the most corrupt State in the United States. Alaska is No. 1 in several good things like size and natural resources, and at or near the top of some very tragic indexes like violence against women, abuse of children, sexually transmitted diseases and suicide, as well as drug and alcohol abuse. I love my adopted homeland too much to accept the status quo.

Alaska House Speaker Mike Chenault, in response to this study said, “Most Alaskans remember those dark days in the early 2000s. In response to those actions of a few, we now have some of the most stringent ethics rules and reporting requirements to make sure corruption does not darken our doorstep again. We’ve worked hard to restore faith in a clean process; to restore dignity and integrity to our institution.” Watching the series of events that led to the passage of SB 21, I beg to differ. While the direct bribes of VECO may be in the rear-view mirror, crony capitalism is alive and well.

The deck was stacked to pass SB 21.

Exhibit A: Depending on your perspective, the composition of the 28th Legislature was the result of illegal intentional gerrymandering or an accidental failure to comply with the requirements of the Alaska State Constitution. Either way, we have new districts for the 29th Legislature that are more balanced, and a closer approximation to population rather than around voting blocs.

Exhibit B: SB 21 was authored and submitted by Gov. Sean Parnell, former lobbyist for ConocoPhillips, and former attorney for Patton Boggs, who represents ExxonMobil. In church leadership, we talk about the importance of avoiding the appearance of evil. Corruption works the same way. In politics, we need to avoid the appearance of corruption. Because Parnell’s job was once to convince legislators to give ConocoPhillips a better deal, his authorship of SB 21 appears to be a conflict of interest. The best defense attorneys are former prosecutors. Parnell should have been using his previous experience to work for the State of Alaska, not against it. By submitting the bill, there is implied pressure to pass the bill. Several legislators I met with expressed concern that Parnell would require an extra session if they did not pass his bill during the session. Coupled with the veto power the governor possesses, this is direct legislative interference.

I know people who know the governor. All speak highly of him as a person. Our positions on major social issues are nearly identical. I know that we are both born-again, Bible-believing Christians. Since he appears legitimately incorruptible, I wanted to know if perhaps his other career influences were clouding his objectivity. When I finally met with him, I knew I had to ask. I thought carefully about how I crafted my question, because I did not want to be disrespectful. I also figured that there was an angle on the oil tax issue that I had not considered that he might be willing to share, as I was still weighing both sides of the debate, and had not yet decided on my position.

I asked him, “Governor Parnell, we have met with 31 legislators on both sides of the aisle. The consensus opinion is that you are an honorable and ethical man. My question, then, is how you balance what could be perceived as competing interests between your career in the oil and gas industry and your obligations to the State of Alaska?” His smile turned to a snarl as he angrily retorted, “my only interest is in the State of Alaska!” He composed himself a little bit and continued, “My allegiance is to Alaska. I know who I represent.” He did not allow any follow-up questions, nor did he offer any defense of his tax bill. At the end, we shook hands and took our picture together with the rest of the class. I don’t want to hear from the apologists, I want to hear from the governor about why he thought it was appropriate for him to author a tax bill that materially benefits his former employers. I also want to know why he was actively trying to remove ACES every year after taking office, even while it was putting the last of $16 billion into state budget reserves. I want leaders who welcome the tough questions.

Exhibit C: Despite the gerrymandered legislature, and legislative interference from the governor, SB 21 does not pass without two current employees of ConocoPhillips being forced to vote on legislation that materially affects their current employers. Senators Pete Micciche and Kevin Meyer asked to be excused from voting, correctly following the rules governing conflicts of interest. However, the rules also stipulate that they must vote if anyone objects to their requests to be excused. I will concede that their vote aligns with the intent of both of their constituencies. However, if SB 21 demonstrates anything, it’s that our ethics rules need revision. The fact remains that SB 21 passed the Senate 11-9. It does not pass without their votes. As citizen legislators, conflicts of interest are inevitable because most work other jobs the rest of the year. This was anticipated and the rules that govern such situations are clear.

Senators Meyer and Micciche were forced to vote due to the objection of Senator Pete Kelley. We need a better process that does not allow legitimate conflicts to be overridden so simply. They exist in statute, but not in process due to some very loose Uniform Rules. This may need to be our next ballot initiative to fix systemic corruption, since efforts to fix this within the legislature have been unsuccessful.

We have a preponderance of the evidence. The process whereby SB 21 became law is unethical at best, and possibly illegal. Now, the campaign to keep it is being paid for by a multi-million dollar campaign by the same companies who influenced its passage. We have a big decision to make on Aug. 19. Make no mistake, at its core Ballot Measure 1 is a referendum on crony capitalism. This is not a partisan issue. Join with the hundreds of thousands of Republicans, Democrats, Libertarians, Nonpartisans, Independents, conservatives, moderates and liberals who have an idea of an Alaska that is larger than just them and their special interests. Vote Yes on 1. We can then develop a plan that puts Alaska first as we negotiate with our industry partners to develop our resources to the maximum benefit of all Alaskans, not just those with ties to oil and gas.