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GCI recruiting allies as it ramps up campaign to tackle Alaska's fiscal crisis

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  • Updated: September 28, 2016
  • Published December 7, 2015

Telecommunications company GCI wants to rally Alaskans and their lawmakers behind a solution to the state's fiscal crisis, saying a major financial collapse caused by unresolved deficits poses a grave threat to its business model and the economy.

GCI's leaders have approached other big businesses and labor leaders in the state about supporting their efforts, which involve a nonprofit called OneAlaska that could, under federal laws, raise money in secret. But some of those who have heard the company's pitch say they're not ready to commit to joining forces and may end up pursuing their own agendas, though on a similar theme.

"They surely are trying to get a broad-based coalition -- that's no doubt," said Jim Duncan, the executive director of the state's largest public employee union, the Alaska State Employees Association. "We're evaluating the various plans -- at this point there's been no formal joining."

Resolving the fiscal crisis has become a major state issue, with university economists, political, labor and business leaders and numerous interest groups and individuals weighing in on different ideas. Gov. Bill Walker's proposal, set for public release Wednesday, is expected to contain new taxes and some type of change to the way the Permanent Fund's earnings are used -- suggestions he says are necessary, but which will face opposition from at least some lawmakers in Juneau.

GCI, based in Anchorage, is one of Alaska's largest private employers, with 2,250 workers and $910 million in revenue in 2014.

Its customers are primarily Alaskans and its footprint reaches across the state and into rural areas, making the company's operations dependent on the state's economy. That economy is currently being stressed by a crash in the price of oil, which has blown a $3 billion hole in the state government's budget and forced layoffs in the oil and gas industry where 15,000 people are directly employed.

"I have a responsibility to GCI's customers, employees, and their families to make sure that our company provides continued opportunities for growth and innovation for years to come," the company's CEO, Ron Duncan, said in a prepared statement. "I am very concerned about the looming fiscal crisis and what it could mean for GCI, its employees, and all Alaskans."

He added that the company is "working with other Alaskans to form a statewide coalition to ensure Alaskans have the facts and to encourage our leaders to make the tough decisions."

Citing his travel schedule, Duncan, who earned $3.2 million in compensation last year, referred repeated interview requests to Ben Sparks, the executive director of the newly formed nonprofit OneAlaska, to which GCI says it has donated $150,000.

Sparks, who managed U.S. Sen. Dan Sullivan's 2014 election campaign, said OneAlaska will focus on educating voters. He referred to it as a "growing coalition" but refused to identify individual members or describe the extent of GCI's involvement, saying that more information about the campaign and coalition would be released "in the coming months."

And while many different policies could help fix the fiscal crisis, neither Sparks nor GCI would say which ones they prefer.

"There is no single solution," Duncan said in a statement. "Alaskans will have to look at multiple solutions that may challenge the conventional wisdom of the past."

In interviews, a handful of lawmakers and leaders from businesses and labor groups said they'd been approached by Duncan and other GCI employees.

Rep. Bob Herron, D-Bethel, said a group from the company, including Duncan, traveled to his Southwest Alaska community to meet with local officials.

"They talked to all the regional leaders about their concern and how they'd like the Legislature to not postpone the conversation," he said in a phone interview.

Joe Beedle, chief executive of Northrim Bank, said that after hearing from GCI management, his company philosophically supports the campaign, though the bank hasn't made a financial commitment and would be cautious about doing so.

But GCI's effort, Beedle said, is well-intentioned and aligns with the interests of the whole state, since a healthy economy provides jobs and investment.

"They don't do it nefariously -- they're not Bill Allen," he said, referring to the former Veco official convicted of bribing legislators on behalf of his oil-field service company."Their sense of leadership is really a sense of leadership we should all feel."

Others who have been recruited by Ron Duncan include Jim Duncan, the public employee union leader, and Vince Beltrami, who heads the Alaska AFL-CIO, the umbrella labor group made up of more than four dozen unions.

Neither, however, has committed to joining. And the team that's working with GCI could pose an obstacle to collaboration with the AFL-CIO because both Sparks and OneAlaska's Virginia-based political consulting firm, Black Rock Group, worked on the side opposite to labor's in last year's U.S. Senate campaign in Alaska.

During that campaign, one of Black Rock Group's employees accused Beltrami on Twitter of being "unhinged"; Beltrami attacked him as a "D.C. shill" and also described him in more pungent terms.

In a phone interview, Beltrami said that Sparks and Black Rock Group don't give him "the biggest warm fuzzies."

"But it's not to say that we can't work with them," he said.

It's also possible that even if the AFL-CIO decides not to join formally with GCI, the two could end up lobbying for similar policies, said Beltrami. But before deciding to participate, he's still waiting to hear more from GCI's Ron Duncan about others involved.

"I've asked about who the participants are in this potential coalition and I've got nothing so far," he said.

While Sparks said OneAlaska will be focused on educating voters about the fiscal crisis, both Beltrami and Beedle said GCI's campaign may also try to provide lawmakers with political cover to take the tough votes necessary to balance the state's budget -- on unpalatable measures like taxes, or policies that could reduce the size of Alaskans' annual Permanent Fund dividend checks.

Senate President Kevin Meyer, R-Anchorage, said he's been encouraged to hear from GCI and leaders from other businesses that they support using some of the Permanent Fund's earnings to help fund government. The Rasmuson Foundation and Gov. Walker are pushing similar ideas.

It's likely that such a step will be necessary, and when it comes from businesses instead of lawmakers, the argument is more credible to constituents, Meyer said.

"They don't all believe us," he said. "Hearing it from other sources helps validate what we say. We welcome that support."

"If ACS wants to do it, or AT&T, that's great too," he added, referring to two other telecommunications companies.

Sen. Bill Wielechowski, D-Anchorage, said he's heard a lot about GCI's plans, but only secondhand, from people "all around the state."

His understanding of the campaign -- repeated in phone calls and on a political blog, The Midnight Sun -- is that GCI is forming a big political action committee that will push to use the Permanent Fund to help solve the fiscal crisis, and lawmakers will need to "get in line."

"Or else, face the wrath of having a lot of money spent against you" in next year's election, Wielechowski said.

Sparks said that OneAlaska has filed to be a 501(c)(3) nonprofit, the IRS designation that means it can't engage in partisan political activity -- though campaign finance laws do not prohibit GCI from forming or contributing to a different group or political committee to support or oppose legislative candidates.

Wielechowski said that before turning to the Permanent Fund, which could reduce the dividend checks that go to working families, he wants reforms to the state's oil tax system, including to the program that pays $500 million annually in oil and gas tax credits.

The money that could be wrung from those programs is unlikely to approach the full $3 billion deficit. But, Wielechowski asked: "Who's going to bear the burden of this? Is it going to be people who can afford it?"

"I think there are a lot of people and a lot of corporations out there that would love to get in the Permanent Fund right away to solve this problem, and I don't think that's the best approach," he said.

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