HOME PAGE SUBSCRIPTIONS, Print Editions, Newsletter PRODUCTS READ THE PETROLEUM NEWS ARCHIVE! ADVERTISING INFORMATION EVENTS PETROLEUM NEWS BAKKEN MINING NEWS

Providing coverage of Alaska and northern Canada's oil and gas industry
October 2007

Vol. 12, No. 42 Week of October 21, 2007

Corruption trials are painful, but necessary

By Sen. Gene Therriault

For Petroleum News

The recent jury verdicts in the public corruption trials of former Alaska legislators have been disturbing, to say the least. As a strong supporter of the legislative process in our democratic system of checks and balances, I take no pleasure in seeing Alaskans’ confidence in our representative system of government shaken to its very foundation.

As difficult as this is to bear, I believe it is necessary to begin restoring confidence in the Legislature. For this reason, I recently chose to attend portions of the trial of former speaker of the House Pete Kott to show that members of the Legislature are watching to fully understand the illegal activities that transpired in the recent oil and gas tax debate.

Not just Republicans

While some observers take satisfaction that the current investigations reflect badly on Republican legislators, a review of the past indicates that impropriety by elected officials is not limited to a particular party.

A quick review of Alaska legislators who have crossed legal and ethical boundaries shows that individuals of both major parties have succumbed to the siren song of money, power and influence.

The last legal proceedings against a member of the Legislature for corruption occurred in the early 1980s when both a Democrat and Republican were forced from office. Democratic Sen. George Hohman of Bethel was convicted of bribery in 1981 for trying to steer the state into the purchase of a controversial aircraft for fire suppression efforts. One year later Republican Sen. Ed Dankworth of Anchorage left office after formal charges of corruption were brought against him, although he ultimately avoided prosecution on a legal technicality.

These gentlemen tried to use their positions of influence in the Legislature to obtain a personal monetary benefit with little or no regard for what was best for the state.

There is no surprise that individuals hoping to secure influence in our Legislature search out officials who hold the reins of power at the time. In the cases cited above, Hohman and Dankworth tried to use the strength of their committee positions to enrich themselves. In both instances, those who were interested in circumventing the legitimate process approached legislators in positions to “git er done.”

Reminiscent of North Carolina case

On the day the Pete Kott trial began, I was reminded of a recent conviction in a similar case in North Carolina where a former speaker of the House surrendered to authorities to begin serving a five-year sentence for corruption. The difference was that the corrupt official there had risen to power as a Democrat, whereas Kott is a Republican. The similarity in these cases has reinforced my belief that, although those indicted, searched and questioned here in Alaska have been primarily Republicans, bad actors are not a product of a particular political philosophy or party, but rather a reflection of a general human failing. That failing is susceptibility to the lure of power, wealth and influence.

For the past two years I have been part of a group of senators who openly questioned the previous administration’s petroleum tax proposal. This group cut across party lines in open defiance of Senate leaders at the time, and demanded independent analysis of how to protect the state’s best interest. What transpired in that debate is perhaps the longest and nastiest policy battle since statehood.

Numerous votes and actions in the petroleum tax debate caused me to question the motives and loyalties of both Republican and Democratic colleagues. The ongoing federal investigation and prosecutions have answered some of these questions; however, others are likely to persist until the investigation concludes.

As discomforting as the current situation is, I believe what will emerge is a strengthened legislative process that Alaskans can be proud of.

However, there will always be a need for elected officials to be constantly on guard for the sense of privilege that can sneak up on anyone who is given even a modicum of power.

Sen. Gene Therriault is a Republican from North Pole.





Therriault’s letter goes unanswered

Sen. Gene Therriault, R-North Pole sent the following letter on Aug. 30 to the Legislature’s independent economic consultants via Rep. Ralph Samuels, R-Anchorage, chairman, Legislative Budget and Audit Committee and is still awaiting a response. 

  

Dear Ralph:

Although the Legislature cannot start evaluating Governor Palin’s proposed changes to oil and gas tax law until she presents her plan next week, I believe it would be prudent to ask EconOne to review recent developments that could impact the effectiveness of the current PPT mechanism.

Primarily, I want to know why the economic modeling used during the PPT debate miscalculated expected revenues by such a wide margin. Administration staff have disclosed that the operations and capital expenses on oil and gas activities are significantly higher under PPT than were anticipated. Consequently, I believe we should review the data set that was used in the PPT model to estimate these cost components. I would also like to know if EconOne agrees with the administration regarding how much of the estimated “shortfall” can be attributed to higher costs.

I would also like an opinion on whether the higher than expected costs in Alaska match the escalation in other areas of the world. I would like to determine what portion of the higher costs stem from the expenses associated with the corrosion response and cleanup on the North Slope. This emergency response may be responsible for a “spike” in the cost of doing business in Alaska that outpaces increases in other oil and gas producing regions. If so, knowing whether expenses will come down from a temporary high point could be crucial in our upcoming deliberations.

Because only a portion of the lower than expected revenue appears to be attributable to cost factors, I would like an explanation of other factors that contribute to the difference.

While I expect the Governor to provide this information when she presents her special session package, I would like to know if EconOne agrees with the administration’s assessment of the items that account for the total revenue difference.

I also have the following direct questions for the administration on the subject of revenue modeling during the PPT debate. Because the majority of the model was built in 2005, does that mean the administration used 2004 data? If so, did new cost data become available as we proceeded through the PPT debate in 2006 that would have indicated higher than expected costs? If new data was available, when was it available, and was it used?

Rather than submit questions to the administration separately, it may be advisable for the inquiries to come from the Legislative Budget and Audit Committee. I would welcome your thoughts on this.

Sincerely,

Gene Therriault


Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.petroleumnews.com ---
S U B S C R I B E

Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.