The Alaska Public Offices Commission on Thursday rejected a proposed $35,000 settlement of alleged campaign law violations during last year's ballot fight over mining rules. The settlement called for the payment to come from Anchorage businessman Bob Gillam, political consultant Art Hackney and several other individuals and organizations.
APOC accused Gillam and the others of conspiring to hide a large portion of Gillam's multimillion-dollar contributions to the campaign to pass Ballot Measure 4, an effort to create stricter rules for water-pollution discharges for large mines. In August 2008, voters rejected the proposed law -- an attempt to block development of the Pebble copper and gold deposit in Southwest Alaska.
Separately, staff for the election-watchdog agency also has proposed fines be paid by two pro-mining groups that campaigned against Measure 4 and allegedly didn't file timely reports of all of their spending.
The commission hasn't yet decided on that case. The campaign was the state's most expensive election battle ever, with the two sides spending $12.5 million total to influence the vote.
The case against Gillam, Hackney and the others was filed by the companies trying to develop the Pebble mine and by the Resource Development Council, an Anchorage-based industry group. In a blistering report, APOC staff agreed with most of those allegations and accused Gillam and the others of additional violations. APOC staff suggested that the commission consider forwarding the case to the state attorney general for criminal prosecution.
By Thursday's hearing, the staff was recommending the case instead be settled for $35,000, with no one admitting guilt.
During the hearing, an attorney for the Pebble Partnership and the RDC criticized the proposed settlement, saying it was a "slap on the wrist" and sent a bad message to future violators.
If APOC had followed original staff recommendations and levied maximum fines, Gillam and the others would have had to pay at least $350,000 in combined penalties, said Jack Dunnagan, the attorney. An APOC attorney pegged the amount at $174,000.
But attorneys for Gillam and the others, as well as the attorney assisting APOC staff, defended the proposed settlement, estimating that the expense of litigating the case would greatly exceed the penalties for the campaign law violations. The litigation could go on for many years, the attorneys said.
"Is it in the public interest to force the parties to go through that?" said Doug Pope, an attorney for Hackney. "Where is there a suggestion in the record that the (APOC) staff has come up with a theory that will withstand a court challenge?"
Commission Chairwoman Elizabeth Hickerson questioned the attorneys on whether it would really be that time-consuming to air some of the legal issues in the case.
She said she didn't see the proposed settlement as resolving any significant legal issues that the case had presented.
Giving Chris Kennedy, the administrative law judge assigned to the case, a chance to rule on some of the pending motions is "not going to take a lot of time, is it?" she asked.
After the hearing, Hickerson announced the commissioners' decision that settling the case was not in the public interest at the time.
She said the APOC staff and the alleged violators can propose a settlement after the commission rules on the pending motions, which include requests for summary judgment and dismissal of some charges.
Those rulings could come as soon as mid-November, according to attorneys involved in the case.
Find Elizabeth Bluemink online at adn.com/contact/ebluemink  or call 257-4317.
By ELIZABETH BLUEMINK