Amendment would lessen governor's power over PermaFund board

Posted: Thursday, October 19, 2000

JUNEAU (AP) -- The governor's power to pack the Alaska Permanent Fund Corp.'s board of trustees with his own appointees would shrink if voters approve Ballot Measure 3 on Election Day. The constitutional amendment proposed by the Legislature would also give lawmakers confirmation power over board members of some other state-owned corporations.

Both Gov. Tony Knowles and former Gov. Walter Hickel cleaned house at the Permanent Fund board when they took office, installing their own choices to oversee the state's massive oil-royalty savings account.

For Sen. Rick Halford, who sponsored the amendment in the Legislature this year, such sudden upheaval is bad policy for the management of one of the state's most important assets.

''I think the wholesale replacement of the Permanent Fund board is a mistake,'' Halford said. ''It's not just political ideology. You also need continuity.''

Halford wouldn't point to any specific failing of the board Knowles appointed, and said he had been pushing similar measures for about a decade, when he cosponsored an amendment with former Democratic Sen. Jay Kerttula.

Under current law, the six-member board includes two commissioners of principal state departments and four members from the public with experience in finance, investments, or other business-related areas. Trustees serve four-year terms.

Halford's amendment wouldn't give the Legislature confirmation power over the trustees, but it would prevent them from being removed except for cause. It would apply mostly to the four public members because the two commissioners would normally turn over with a new administration anyway.

Knowles opposes the amendment as an infringement on his executive-branch powers.

''The operation and function of the corporations are an executive-branch responsibility,'' said Bob King, Knowles' press secretary. ''If the governor's going to be held accountable, he wants to be able to appoint people he thinks are qualified.''

The other half of the amendment would require legislative confirmation of the boards of state-owned corporations other than the Permanent Fund that manage significant assets. No specific corporations are named, but Halford said he had the Alaska Housing Finance Corp., the Alaska Industrial Development and Export Authority and the Alaska Railroad Corp. in mind.

All three boards are appointed by the governor without confirmation from lawmakers.

''The members of the Board of Barbers and Hairdressers are confirmed and can be protected from discharge without cause, while the boards controlling hundreds of millions of dollars can be replaced in block when the governor changes for purely political purposes and reappointed without any input,'' Halford said.

Again, Knowles contends the change would infringe on his authority to appoint qualified people to the boards.

''If the intent is to depoliticize these appointments, I would think it would have just the opposite effect,'' said King, citing the partisan battles that erupt over appointments to panels such as the Board of Education and the Board of Game. ''By and large the governor is held accountable for their operations and for the job they do.''

Response from the Constitution's framers to the amendment has been mixed.

Former state Sen. Vic Fischer, a delegate to the Constitutional Convention, derides the measure as a power grab by the Legislature.

''The constitution was designed to have a governor who's elected by the people of the state who is responsible for the operations of state government,'' Fischer said.

Fischer also points out that the rules governing the appointment of the Permanent Fund trustees and the boards of other corporations are spelled out in state law the Legislature could change without amending the Constitution.

''You don't need to write that kind of garbage into the Constitution,'' Fischer said.

However, passing a law over the governor's veto requires the same supermajority -- two-thirds of the Legislature -- as putting an amendment on the ballot.

Former Lt. Gov. Jack Coghill, also a delegate to the convention, sides with Halford.

''Frankly, 45 years ago we simply did not foresee the creation of state corporations with the responsibility for hundreds of millions, even billions of dollars of state assets -- your money,'' Coghill wrote in a statement of support for the amendment. ''As a result, there is little or no accountability to the public.''

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