A Citizen’s Guide

The splintering of voter populations allows them to be manipulated toward outcomes that sometimes conflict with their community’s best interest. The divided are quickly conquered, while those who are supposed to represent their interests sometimes seek questionable goals.

Gov. Frank Murkowski’s proposed gas contract exemplifies this form of betrayal; those entrusted with our representation abandon their primary duties, instead acting in the favor of corporations and political parties. A variation of taxation without representation emerges.

The contract has no start date, no mandate of completion, demands hundreds of millions of dollars in state money in advance and insists that the gas contract be linked to oil revenues so far below current world market standards that the proposed oil terms simply do not make sense. The producers already enjoy revenue rates well below world market standards, by admission of the Legislature’s own consultants.

In addition to these provisions, Murkowski’s contract would freeze revenue collection rates for decades to come, a blatant violation of our state’s constitution.

The contract states that if Rep. Eric Croft’s gas lease initiative passes this November, and holders of leases are taxed for not developing those leases, that the state will pay their penalties for them. This provision is absurd.

No wonder Frank wanted this contract held in confidence!

But according to a memo from the former commissioner of the Alaska Department of Natural Resources, Tom Irwin, to state Attorney General David Marquez, questions existed concerning the applicability of the stranded gas act to specific gas fields. Mr. Irwin wrote that Murkowski had stated to the Valdez Chamber of Commerce that the gas in question was “unstranded.”

It further appears the provisions within the stranded gas act enabled concealing the contract’s specifics from the public, despite questions about the act’s applicability.

Mr. Irwin’s demonstration of his competence resulted in his resignation, followed by the resignations of a number of others at the department who supported him and protested Murkowski’s handling of this situation.

Murkowski apparently holds the code of silence in higher regard than he does integrity and competence. Perhaps he’s better suited to serve the interests of the oil producers than those of Alaskans.

The lead attorney and consultant for the state in this matter, from the firm of Morrison & Foerster, of Washington, D.C., is Robert H. Loeffler. His firm is the highest paid in this process, holding a $6 million contract, with Mr. Loeffler collecting $545 per hour.

Some remember Mr. Loeffler from his handling of the state’s interests in the trans-Alaska oil pipeline settlement in 1985: a settlement that has been cited three times by the state Regulatory Commission of Alaska as resulting in unreasonable tariffs, now amounting to the state paying over twice what the RCA has indicated are fair market rates for transporting oil in the pipeline—$3.98 per barrel, instead of $1.96 per barrel. It can be safely stated that the oil pipeline settlement has resulted in a loss of at least $2 billion in royalties and tax payments to the state of Alaska.

Now Mr. Loeffler apparently represents Alaska again, negotiating Murkowski’s contract that includes provisions to limit the regulatory commission that was critical of the oil pipeline settlement and that otherwise watches over Alaska’s interests.

The draft contract limits a principal agency that was critical of a major settlement in which Mr. Loeffler represented the state. Now Mr. Loeffler apparently negotiates a new and flawed agreement, while collecting $545 per hour in fees.

People rarely enter into such risky contracts with family members, let alone Big Businesses with histories of getting as much as possible for as little as necessary. A brief consideration of Murkowski’s gas contract brings the game Russian roulette to mind.

The passing seasons will remove Murkowski from office. History will remember his disservice to this state. But this contract would impact Alaska for decades.

Many legislators have lost their paths in execution of their duties. Those legislators supporting this contract no longer represent the best interests of their constituencies or the state constitution and should be removed from office at the earliest opportunity. Supporting Murkowski’s gas contract is synonymous with an assault on Alaska’s integrity and laws.

Dirk Nelson lives in Ester.