Pebble players may face APOC penalties for proposition fight

MEASURE 4: Most expensive battle in state's history could prove costly for both sides.

September 30, 2009 

Both sides in last year's ballot box ruckus over mining -- the most expensive election battle waged in Alaska history -- may have to pay state regulators major penalties for campaign law violations.

After months of investigation, state regulators are wrapping up their cases against the groups and individuals involved in the $12.5 million fight over Ballot Measure 4, which sought new limits on water pollution from large mines.

The proposed law -- rejected by voters in August 2008 -- was an attempt to block development of the massive Pebble copper and gold prospect, but its opponents said that the law would harm other Alaska mines, too. Their disagreement over the law's implications for the future of Alaska's mining industry fueled an ad war that choked the state's airwaves and stuffed mailboxes for months.

Months after the election, it became clear that the spending on the Measure 4 fight had eclipsed the most expensive race in state history: the 2004 U.S. Senate race in which Lisa Murkowski beat Tony Knowles. In that race, the two candidates spent a combined $11.2 million.

But was the money for the mining-initiative fight raised legally? The Alaska Public Offices Commission (APOC) has been investigating both sides on allegations of serious campaign violations. This summer, its staff suggested that some groups in favor of Measure 4 may have even committed misdemeanor crimes by hiding the source of their contributions.

THE ANTI-MINING CASE

Late last week, the commission settled charges against one of the pro-Measure 4 groups it was investigating: The Washington, D.C.-based Americans for Job Security. The group provided much of the money used to push for the stricter mining law. The problem, according to APOC, was that the true source of the money was hidden. Pebble opponent Bob Gillam, an Anchorage businessman with a home near the Pebble deposit, was the deep pocket.

The commission settled its charges against AJS for $20,000. In the settlement, AJS doesn't admit any guilt, and the commission did not forward criminal allegations along to the state attorney general.

In the settlement, APOC said that one of its reasons for settling was to avoid expensive litigation.

APOC is also in final settlement negotiations with Gillam and other individuals and groups involved in backing Measure 4 this week, according to lawyers involved. They are accused, among other charges, of conspiring to hide most of Gillam's donations.

In settlement documents now being signed, the groups have agreed to pay a collective $35,000, according to Art Hackney, one of the sponsors of Measure 4.

THE PRO-MINING CASE

The regulators aren't neglecting the other side of Measure 4, the mining industry's successful effort to defeat the proposed law.

APOC staff has proposed hefty fines against the Alaska mining firms and others that lobbied against Measure 4. The commission staff recommended a $21,000 fine against the Council of Alaska Producers, a coalition of mining companies, and a $61,200 fine against Alaskans Against the Mining Shutdown.

The accusation is that these pro-mining groups only fully disclosed their spending well after the election.

This spending totaled $8.9 million, dwarfing the $2.9 million campaign of their opponents. Separately, NANA Regional Corp., a Kotzebue Native corporation that owns the Red Dog zinc mine property, spent $689,000 to fight Measure 4, but APOC staff say NANA didn't break any laws.

FINGER POINTING

Both sides say what the other did was egregious, while their own behavior, they thought, was legal.

"We reported everything when we thought it was required to be reported. They purposely chose not to report things, to make it appear that Mr. Gillam was spending substantially less than he did. It's a very different type of violation, ours is less serious," said Tom Amodio, an attorney for the Council of Alaska Producers and Alaskans Against the Mining Shutdown.

But Hackney, said the opposite is true. "The public always knew how much money we spent. There was an allegation about where it came from -- it being hidden -- but my position is that we filed everything correctly."

The biggest fine APOC ever levied was $98,500 in the 1990s against Alaska Interstate Construction over its illegal campaign contributions to seven candidates for the state Legislature.


Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

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