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Watchdogs question loose rules for inaugural fundraising, disclosure

  • Author: Nathaniel Herz
  • Updated: September 28, 2016
  • Published December 8, 2014

Starting next month, Alaska's new governor, Bill Walker, will host a series of inaugural balls across the state. Details have not yet been released, but past inaugural celebrations have featured live bands, smoked salmon mousse, and specific instructions that attendees leave their Carhartts at home.

The public doesn't foot the bill for those events -- instead, a nonprofit inaugural committee typically raises money from sponsors that include for-profit corporations, lobbyists and unions. And as Walker prepares for his own series of events, watchdog groups warn that such fundraising can provide special interests with an avenue to cultivate goodwill with a new administration, while a loophole in state campaign finance law leaves contributions unregulated and allows the incoming governor to decide how much information to release about his inaugural funders.

"This is influence peddling -- and apparently unregulated and largely undisclosed," said Craig Holman, who lobbies for campaign finance and government ethics reforms with the advocacy group Public Citizen. "This is an opportunity for those who have very large resources to try to curry favor with the executive."

Typically, incoming gubernatorial administrations commemorate their inauguration with celebrations across the state. The outgoing governor, Sean Parnell, held eight events with his lieutenant governor, Mead Treadwell, including parties in Soldotna, Palmer, Kodiak, Fairbanks, Juneau, Nome and Anchorage. The previous governor, Sarah Palin, hosted a similar set of events.

Walker's administration will host balls across the state between January and March, though exact dates and locations have not been decided, according to spokeswoman Grace Jang.

Treadwell, the outgoing lieutenant governor, said the parties offer a new administration a chance to meet elected officials and regular people across the state -- which is useful given the degree of interplay between local communities and state government, he added.

"It's, in essence, a way to use a social event to introduce the Cabinet and say, 'We want to work with you,' " Treadwell said in a phone interview. "Government works when people feel government is approachable."

But the events come at a price -- one that in the past has been paid, at least in part, by deep-pocketed donors.

Sponsors for Parnell's inaugural parties in 2011 that gave $10,000 or more include the state's "big three" oil producers -- ConocoPhillips, BP and ExxonMobil Corp. -- as well as mining company NovaGold, the Alaska Cruise Association, telecommunications company GCI and Arctic Slope Regional Corp. Donors who gave less than $10,000 include hospitals, other oil and gas companies, and a pair of lobbyists.

That information was made public even though the Parnell administration was not legally required to disclose the identities of the donors or the amount of their contributions.

Sponsors for Palin's inaugural balls in 2007 included two unions; development firm JL Properties; law firm Birch, Horton, Bittner and Cherot; and Coeur Mining, among others. An archived version of Palin's inaugural website doesn't disclose the size of the contributions.

Many of those donors have frequent interactions with state government. The oil companies, for example, worked with the Parnell administration on a controversial tax overhaul, while the state oversees some permits and authorizations for a major gold mine run by Coeur Mining near Juneau. NovaGold is trying to develop its own mine in Southwest Alaska.

All told, the nonprofit committee used by the administrations to fundraise for the inaugural events reported $340,000 in contributions and grants in its 2011 tax filings with the Internal Revenue Service, and $505,000 in contributions and grants in 2007.

The tax filings do not, however, detail the sources of those funds, and the Alaska Public Offices Commission, which regulates campaign fundraising and disclosure for state elections, does not conduct any oversight of inaugural donations.

"It's not campaign related," said the commission's executive director, Paul Dauphinais.

Walker made transparency a central plank of his gubernatorial candidacy. Jang, his spokeswoman, said discussions have not yet taken place about who will organize the inaugural balls, or about fundraising and disclosure details.

Asked if the identities of the inaugural donors and the size of their contributions would be made public, Jang responded in an emailed statement: "I believe that, in keeping with transparency, the Alaska Inaugural Committee will disclose details of contributions."

Reform groups like Public Citizen and the National Institute for Money in State Politics advocate legislation compelling disclosure of donations for inaugural events.

"Barring any requirement in Alaska that they provide the information like that, you could lose that disclosure because it is voluntary," said Pete Quist, the institute's research director. "And more detail is always good."

Holman, at Public Citizen, also suggested that the size of donations could be capped, and corporate contributions be banned -- or alternatively, he said, inaugural events could be publicly funded. He pointed out that at the federal level, former president Bill Clinton limited contributions to $100 for his second inauguration.

There's no legal limit on contributions for presidential inaugurals, though, and President Barack Obama drew criticism for accepting corporate contributions after his re-election in 2012. There's also no single standard at the state level; in contrast to Alaska, for example, New Jersey law limits contributions to inaugurals to $500.

Asked whether legislation had ever been considered to regulate inaugural fundraising, Sen. John Coghill of Fairbanks, the Senate's majority leader, responded: "Flat-footedly, I haven't really thought about it."

"I think it's a legitimate question, if something has an impact on the most powerful office in the state," Coghill, a Republican, said in a phone interview. "And if it has policed itself, why? Or could we have better disclosure?"

Treadwell, the former lieutenant governor, said he didn't view the contributions to the inaugural balls as having influenced the state's interactions with donors.

"There's probably 10 businesses who made major contributions in Fairbanks," he said. "But nobody was keeping a list around the office to say, 'Hey, you'd better take so-and-so's phone call because they sponsored the inauguration.' "

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