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Vacation for your vote

Hawaii trip the prize for best reasons to oppose gas reserves tax

Posted: Tuesday, October 17, 2006

A group sporting financial backing from two of Alaska’s largest oil companies and dedicated to defeating the proposed gas reserves tax has launched a contest asking Alaskans for their top 10 reasons to vote no on Ballot Measure 2 on Nov. 7.

Top prize, says AlaskaFirst.Org, is an all-expenses-paid week in Hawaii for two at a four-star hotel. Other prizes include thousands of Alaska Airline miles.

Ballot Measure 2, the Alaska Gasline Now initiative, is a controversial measure. It would oblige North Slope natural gas leaseholders that have been sitting on gas reserves for years to begin paying an annual tax on those reserves until a gas pipeline is built.

Tax credits available after a pipeline is functioning would allow those leaseholders to recoup at least part, and perhaps all, of their tax payments. Supporters say such a law would not only provide $900 million or more in yearly revenue to the state, it would present producers with considerable motivation to launch a gas pipeline project as quickly as possible.

Opponents say that the $10 billion such a tax could add to the overall cost of a pipeline over the next decade would be a major disincentive to companies who might finance its construction. And if no pipeline were built, they argue, Alaska would have no way to move its gas to market.

Further, opponents say companies with no incentive to explore would never uncover the oil reserves some experts predict should be found while hunting for gas — oil enough, they say, to keep the TransAlaska Oil Pipeline operating for years.

The major oil companies are sinking significant money into a variety of media in an effort to dissuade voters from approving Ballot Measure 2. The AlaskaFirst contest is the latest wrinkle in that campaign. E-mail messages advertising the contest went out this week.

Republican political consultant Arthur Hackney chairs the 501c6 corporation. Interviewed Monday, Hackney described AlaskaFirst as a trade association with just one purpose — to defeat Ballot Measure 2. The 501c6 status, he said, allows the group’s members to collect unlimited amounts of money and to use it all on communications efforts opposing the ballot measure.

“It’s what is known as grassroots lobbying,” he said.

The IRS allows 501c6 organizations to engage in direct and grassroots lobbying and campaigning on issues, though their expenses are not tax deductible. This is different from 501c3 groups whose lobbying efforts are restricted and who would face loss of tax status and tax penalties for active campaigning, or 501c4 groups who can engage in no partisan lobbying whatsoever except among their members.

Hackney said he launched the group, its Web site and the contest because he was frustrated with how entrenched some voters appeared to be with regard to the reserves tax and concerned that Ballot Measure 2 might succeed.

He insisted that a host of facts were available that would likely lead informed people to vote against the ballot measure. The contest, he said, was a way to encourage voters to begin reading about the gas reserves tax on the theory they’d have to know something to have a chance at winning the contest.

According to APOC records, AlaskaFirst lists only three contributing members. Their contributions, however, represent the kind of money many lobbying groups only dream about.

The Oct. 9 APOC filings show ConocoPhillips Alaska donated $250,000 on Oct. 3. Three days later ExxonMobile Corp. followed with another $400,000. Hackney’s company, Hackney & Hackney, contributed $200 on Sept. 25.

The organization’s expense report listed only two expenses — $160,000 to Hackney & Hackney for television advertising and $2,500 to Moore Information, a political research company based in Portland, Or.

Campaign debts listed by the organization included $200,000 still owed to Hackney & Hackney and $12,500 owed to a Web site design firm called The November Company.

APOC official Chris Ellingson said that as far as Alaska election law was concerned, the unique approach to promoting a position on a ballot measure with a contest appeared to be legal.

“Under the disclosure aspect (of Alaska campaign statutes), they can only spend money on things that are reasonably related to the election,” Ellingson said.

She said she did not know if the approach violated any federal campaign strictures. A call to the Federal Elections Commission in Washington, D.C., was not returned by late Monday afternoon.

The organization’s Web site lists the current top 10 reasons to vote against Ballot Measure 2. Hackney said they’d been provided by “friends and family” as a way to get the contest off the ground. They ranged from a poke at the environmental lobby: “A yes vote will do more to shut down Alaska’s industry than Greenpeace ever could,” to predictions and dire warnings, like, “Alaska needs more lawyers — this will cause a stampede,” and, “This will help Anchorage and Fairbanks return to a subsistence lifestyle.”

Rep. Eric Croft, D-Anchorage, a prime sponsor of the ballot measure, said AlaskaFirst was a front group for Exxon.

“Whether they send you to Hawaii or not, the point is what we have been doing hasn’t been working,” he said. “Exxon needs to know that we’re serious.”

Croft said he was considering sending in some of his own top 10 reasons to vote against Ballot Measure 2.

“One, ‘Because you can trust Exxon,’ and two, ‘I like the gas line we’ve had the last 20 years,’” he commented.

“The humor is fine, but the problem is that they have been treating us like a joke for 20 years. They can make more jokes, but I’m serious about getting a gas line,” he said.

Ballot Measure 2 and the effort to promote a gas pipeline is much like the statehood fight, Croft said, likening the present situation to the time when salmon interests (“king salmon”) didn’t want Alaska to become a state.

“Now, big oil wants us to give away our sovereignty,” he said. “This is a fight for Alaska’s soul.”

Hackney said it seemed only logical to approach the big oil companies for backing, but he told them only that he was launching an organization dedicated to defeating Ballot Measure 2, not how he would do it. ConocoPhillips and Exxon willingly joined, he said, adding he wasn’t sure what they thought about the contest.

Dawn Patience, spokesperson for ConocoPhillips, said the company hoped that AlaskaFirst’s campaigning would encourage public involvement in the important public policy debate.

“However, we believe Alaskans who know the facts will come to the same conclusion as the three gubernatorial candidates and vote ‘no’ on measure number two,” she said.

Hal Spence can be reached at harold.spence@peninsulaclarion.com.



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