Editor's note: This story was first published Nov. 17, 2011.
Anti-Pebble mine billionaire Bob Gillam's aviation firm violated state law by flying at sharply reduced rates two campaigning Lake and Peninsula Borough candidates, alleges a complaint filed by Alaska Public Offices Commission staff.
The complaint, filed in July, has touched off a firestorm of accusations involving some of the key figures in the multi-million-dollar battle over proposed development of the region's massive Pebble copper, gold and molybdenum prospect.
The staff complaint argues that RBG Bush Planes -- owned by Robert B. Gillam Revocable Trust and bearing the man's initials -- should have charged Nana Kalmakoff and Michelle Pope Ravenmoon commercial charter rates for a pair of multi-day trips. The trips allowed them to barnstorm villages during their successful campaigns to serve on the Lake and Pen Borough Assembly in September 2010.
The original complaint zeroes in on the first of the excursions, this one for two days to the villages of Chignik, Levelock, Nondalton and Kokhanok. That trip alone was enough for the aviation company, as well as Kalmakoff and Pope, to violate the law, APOC staff argue.
Had they paid for a chartered flight in Southwest Alaska, as they legally should have, they each would have coughed up several thousands dollars, APOC staff contend. Instead, they paid RBG Bush Planes just $306 to pay for their share of the fuel.
Companies can endorse candidates through advertising, but they can't legally contribute directly to candidates or their campaigns, including with in-kind contributions, said Paul Dauphinais, APOC's executive director. APOC staff allege the reduced fare was an in-kind contribution.
Defense: Gillam family plane can't charge for charters
In arguments filed before the commission, RBG lawyers with Holmes Weddle and Barcott don't dispute the flights occurred. But they say RBG is not a commercial airline, and the trips did not resemble chartered flights -- in part because the candidates had no control over the airplanes' schedules. Also, the company is not allowed to charge for chartered flights because it's not permitted to do so by the Federal Aviation Administration.
Generally, the airline is generally used by Gillam’s family and on business related to his investment firm, McKinley Capital Management, said Art Hackney, a political consultant and spokesman for Gillam. McKinley Capital Management earned about $5 million to manage more than $1 billion of Alaska's investments, including a portion of the Permanent Fund.
The airplane rides -- in a Piper Navajo and a DeHavilland Beaver -- began at the invitation of George Jacko, a former state legislator paid by Gillam at the time to "educate villagers" about the dangers a mine poses to the world’s most valuable wild salmon fishery.
Jacko was already planning to fly to the villages. He regularly flew around the Bristol Bay region in RBG planes doing "community outreach" not intended to influence any election, he says in an affidavit filed before the commission.
Jacko let the two candidates know about the trip and said they could fly with him, he testified in the affidavit. The candidates had no control over the trip, and he was not involved in their campaign activities.
"They went their way, and I went mine," Jacko said, noting that he understands the candidates campaigned door to door in the villages.
Lawyers representing RBG Bush Plane argue that the candidates were charged what they should have been -- the cost of their share of the fuel. That's based on a past APOC decision, they say. They liken the situation to a hitchhiker on the Alaska road system.
"Therefore, 'hitching a ride' on someone's plane that is already flying for other purposes is akin to getting a lift from Anchorage to Fairbanks from someone who is already going that way. Under such circumstances, the hitch-hiker would only be expected to pay the cost of gas," they argued in a response.
APOC statutes and regulations provide little guidance on how flight costs should be allocated in these circumstances, said attorney Timothy McKeever with Holmes Weddle and Barcott.
"RBG believes it used an appropriate calculation based on a 2006 advisory opinion from the commission," he said.
The APOC staff complaint is a recent wrinkle in the vehement back-and-forth fusillade over the proposed mine. Supporters say a mine would provide much-needed jobs in a region largely dependent on commercial fishing. Fishermen say arsenic, mercury and other toxins from the mine will poison salmon spawning grounds that help fill subsistence larders and support the valuable commercial fishery.
Gillam, one of Alaska's richest citizens and the owner of a sprawling fishing lodge near the proposed Pebble mine, has been a central figure in the fight against it. The original complaint filed by APOC staff also accused Gillam and his investment firm of violating campaign disclosure laws.
The pilots who flew the candidates worked for McKinley Capital. Gillam had already donated the $500 yearly limit he could legally give to each candidate. RBG's in-kind donation for the campaign trip pushed Gillam beyond that limit, APOC staff alleged. But in September, the commission dismissed Gillam and McKinley from the complaint. The candidates were flown by RBG, not McKinley, and Gillam did not contribute personally to the candidates, the commission decided.
Gillam's been in trouble with APOC before
This isn't Gillam's first dealing with APOC. In spring 2010, Gillam, Alaskans for Clean Water and the Renewable Resources Coalition agreed to pay the commission $100,000 in a settlement related to a citizens' initiative and alleged violations involving an advertising campaign targeting Pebble.
This time, APOC staff recommends a $27,850 fine against RBG Bush Planes, a limited liability company under state law. APOC staff also recommends $1,000 fines for each candidate as well as an APOC training course on campaign disclosure laws.
Kalmakoff and Ravenmoon had promised not to raise more than $5,000 under APOC rules. They each exceeded those limits by accepting in-kind contributions worth thousands of dollars, the complaint argues.
Nana Kalmakoff, a health aide who works at the clinic in the village of Chignik Lake, said she had no comment about the matter.
Ravenmoon, who lives in Pope-Vannoy Landing, an unincorporated community near the east end of Iliamna Lake, said she didn't know she was doing anything wrong.
"I wasn't trying to illegal to do anything illegal. I was just campaigning," she said. She didn't try reaching APOC to determine what she should pay, she said. "I didn't realize that's something I could do."
The five-member, bipartisan APOC commission will make the final call. Its hearing is scheduled to start at 8:30 a.m. Dec. 1 at the Professional Teaching Practices Commission Office at 344 W. Third Ave. in Anchorage.
The hearing was originally scheduled to be heard at APOC's offices in midtown Anchorage, but was moved to accommodate a larger audience, said Dauphinais.
Contact Alex DeMarban at alex(at)alaskadispatch.com