Alaska lawmakers, candidates and Gov. Dunleavy call for state to sell Russia investments and say they plan further actions

JUNEAU — Days after Alaska officials said they had no immediate plans to sell investments in Russia, Gov. Mike Dunleavy has “directed state agencies to identify and divest, if and when appropriate, from Russian assets,” and he called on the Alaska Permanent Fund Corp. to do the same.

The corporation said earlier this week that it has no plans to divest, and an official said Thursday that its position has not changed.

“APFC recognizes the situation regarding Russia and Ukraine as a significant geopolitical event, an escalating tragedy unfolding as the world bears witness,” said Paulyn Swanson, the corporation’s communications officer. “Together with our managers and custodial bank, APFC is closely monitoring the events that are still developing and is continually assessing the appropriate response.”

Since Monday, there has been a growing outcry from elected officials and candidates for office, each urging state officials to sell Russian investments to punish that nation for its invasion of Ukraine. Support for divestment has come from independent, Democratic and Republican lawmakers. Some joined an antiwar demonstration Friday in front of the Capitol.

House Speaker Louise Stutes, R-Kodiak, said the House plans to introduce legislation Monday to order the corporation to sell its Russian investments. As an interim step, 18 members of the state House signed a letter asking the corporation to do so voluntarily.

A bill would have been introduced sooner, Stutes said, but staff in charge of drafting bills are busy with the state budget.

“There seems to be a lot of support, at least in the House. And I’m sure in the (Senate), too. I can’t imagine that there wouldn’t be,” she said.


The legislation could include steps beyond divestment. The Alaska Senate is considering resolutions that ask Congress to ban the importation of Russian oil and intensify sanctions. On Thursday, Dunleavy asked Alaska businesses to stop buying Russian products, asked the state’s universities to cut contacts and directed state agencies to identify contracts with Russian corporations in order to end them.

“We don’t want their ships here. We don’t want their vodka here. We want to be done with it,” Stutes said. “They need to understand that we’re part of the free world.”

As of the last day of January, Alaska’s investments in Russia were worth at least $274 million, divided between accounts held by the Department of Revenue and the state-owned Permanent Fund Corp.

The value of those investments has fallen significantly since that estimate, and trading on public markets in Russia has been halted, which makes it impossible to say when the state will be able to sell.

Nevertheless, officials say, it’s important to do so quickly.

“The issue is more of a moral case today,” said Les Gara, the Democratic candidate for governor.

“Holding on to Russian stocks, hoping that Russian corporations will return in value and make us money off war, is stomach-churning,” he said.

Sen. Bill Wielechowski, D-Anchorage, said the Russia issue “raises the bigger question of, what were we doing investing in these companies in the first place?”

No restrictions on Alaska investments

Alaska has no laws or policies setting political, ethical or moral restrictions on state investments. In the financial world, those are known as “environmental and social governance,” or ESG.

Most states have some form of ESG policy, according to figures published in 2019 by the National Conference of State Legislatures. Alaska does not, in part because of worries that those policies will reduce financial returns. The investments of the Alaska Permanent Fund provided two-thirds of general-purpose state revenue in the budget passed last year.

“Are you willing to possibly forgo some returns? That’s the moral question we all face,” said Larry Persily, a former oil and gas consultant and Department of Revenue official who now works as a journalist.

The Alaska Permanent Fund and the Alaska Department of Revenue operate under what’s known as the “prudent investor rule.” State law declares that the primary duty of their investments is to make money, and they are allowed to take actions as long as a prudent investor would do so.

That has occasionally resulted in ethically questionable decisions. In 2018, the Permanent Fund invested $41 million with a company called Novalpina Capital. That company combined Permanent Fund money with millions from other sources to buy a majority share of NSO Group, an Israeli firm that manufactures smartphone spyware. The United States is now trying to ban that spyware, in part because it has been used by totalitarian governments to track opponents. In some cases, those opponents have been killed.

Craig Richards, chairman of the Permanent Fund’s governing board, said that without an ESG policy, the Permanent Fund needs direction before it makes a political decision, like divesting from Russia.

“I understand it’s a noble cause. It’s just one that I don’t think the board is particularly well-situated to engage in,” he said.

Earlier this week, he suggested that an order from the governor, a bill from the Alaska Legislature or a regulatory action by the Department of Revenue could be necessary.

“Some people like your actions, and some people dislike them, and the political ramifications could be real. I think that is playing into the position that the fund is between a rock and a hard place,” Richards said.


Prior debates resulted in no divestment

In 2009, in response to requests from legislators and then-Gov. Sarah Palin, the corporation’s board voted to support a bill requiring the state to divest from companies operating in Sudan. That legislation didn’t pass and the corporation didn’t divest. China Petroleum, one of the companies targeted by legislation from Palin and lawmakers, remains part of the corporation’s public holdings.

Three years after the Sudan vote, then-Gov. Sean Parnell asked the Permanent Fund Corp. to divest from companies doing business in Iran. The fund didn’t divest, and the latest available listing of publicly traded companies shows the Permanent Fund Corp. still holds the stocks of companies discussed at that time.

“APFC has no record of having divested due to a political action, unless otherwise required by federal law,” Swanson said.

The corporation’s former executive director, Angela Rodell, said in November that the Alaska Legislature retaliated against the corporation after those divestment debates by restructuring its budget in a way that made administration more difficult. That retaliation made the corporation less likely to become involved in political issues, she said.

The reluctance has been compounded by arguments over environmental divestment.

Alaskans testifying at quarterly Permanent Fund Corp. meetings have repeatedly urged board members to divest the fund of fossil-fuel investments, citing the threat posed by climate change.

The Dunleavy administration has taken the opposite approach, saying in December 2020 that it would introduce legislation requiring divestment from banks and financial institutions that refuse to finance Arctic oil and gas drilling.

That divestment push never emerged. The governor’s administration did not introduce the legislation, and it has refused to say why. In the year since the governor’s announcement, the administration has tried a charm offensive, flying commissioners and other officials — including Senate President Peter Micciche, R-Soldotna — to New York City to talk to bankers and investors.


During a quarterly board meeting last month, Richards said the divestment debate was above the heads of the Permanent Fund board.

“None of that should be on the board. If the Legislature wants to have those kinds of policies, they should adopt them,” he said.

James Brooks

James Brooks was a Juneau-based reporter for the ADN from 2018 to May 2022.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at