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Rural Alaska

Murkowski seeks GAO review of troubled Denali Commission

  • Author: Alex DeMarban
  • Updated: September 27, 2016
  • Published February 28, 2013

Alaska Sen. Lisa Murkowski is calling on the Government Accountability Office to conduct an immediate "top-to-bottom" review of the troubled Denali Commission that includes a look at financial deficiencies, "dysfunction" among top officials, and the management effectiveness of its federal co-chair.

Murkowski's scathing Feb. 15 request to Gene Dodaro, the nation's comptroller general, also blasts the commission's tight-lipped inspector general, Mike Marsh, who recently recommended in what Murkowski termed a "poorly documented report" that Congress withhold funding for the commission after asserting it lost track of village bank accounts it was supposed to monitor.

Joel Neimeyer, Denali Commission federal co-chair, said a Department of Justice decision on ethics is a key reason for some of the difficulties faced by the Denali Commission.

The commission, targeted as grade-A pork by critics, was one of the last of the enduring initiatives created by the late Sen. Ted Stevens to improve life in Alaska. Like the better-known Tennessee Valley Authority that the commission is roughly modeled after, the federal-state partnership is one of seven regional commissions created by Congress to funnel grants to rural areas.

For much of its 15-year existence, the commission has focused on bringing a touch of urban convenience to the makeshift and poor villages scattered throughout the state's hinterlands. Federal grants to city and tribal governments totaling hundreds of millions of dollars have helped fund power projects, clinics and even washeterias that provide public water in communities without flush toilets or running water in homes.

'Strong supporter' of Denali Commission

The Alaska delegation fights regularly to protect the commission, whose funding has dwindled over the years. Murkowski reiterates that she is a "strong supporter" of the commission in her Feb. 15 request to Dodaro, head of the nonpartisan accountability office that works for Congress.

Murkowski seeks the review to identify and resolve "management, financial and organizational deficiencies" and to ensure the commission is a "strong and viable program."

"It is not to provide fodder for those who wish to erode the Denali Commission" because it is the most vulnerable -- infants and elders -- who pay the price when "government programs aimed at alleviating poverty are eliminated," she writes.

Then the gloves come off.

She notes that the commission has been subject to criticisms and questions about such things as spending decisions, transparency and how it manages grants. She wants the accountability office to review the relationship between the "powerful" federal co-chair, Joel Neimeyer, appointed in 2010 by the Commerce Secretary, and the other six commissioners.

"In recent years, the relationship between the federal co-chair and members of the Commission has reportedly been deteriorating," she writes. "My office has received repeated complaints from members of the Commission that they have been denied the opportunity to participate in meaningful oversight of the Commission's work, are denied access to relevant information by the federal Co-Chair, and more generally find themselves marginalized by the federal Co-Chair."

Enabling 'dysfunction'

Some commissioners believe Neimeyer and commission staff have helped enable the "dysfunction" by urging federal ethics agencies to suggest that the commissioners have conflicts of interest that prevent from performing their duties. Efforts by Neimeyer and his staff to "maintain power" are harmful, say commissioners, according to Murkowski.

The commissioners, appointed by the Commerce Secretary, include Alaska Federation of Natives president Julie Kitka; John MacKinnon, executive director of the Associated General Contractors of Alaska; and Vince Beltrami, executive president of the Alaska AFL-CIO, according to Denali Commission's website.

Those organizations "broadly represent" Native villagers as well as rural contractors and laborers, Murkowski writes. The idea that the commissioners have a conflict appears to be "an overly broad construction of federal law in light of the fact that none of the commissioners can be said to materially benefit from any particular decision of the Commission."

The Denali Commission's contracted attorney is Howard Martin, who also serves as general counsel for the Federal Aviation Administration. Martin said the problem is not about maintaining power, but about following the law.

The Department of Justice in 2006 determined that the commissioners are special government employees. As such, they're subject to potential criminal repercussions if they take action that might impact the financial interests of their organizations.

Martin said he's erred on the side of caution to protect the commissioners. As a result, some commissioners have had to frequently recuse themselves from voting. For example, Susan Bell, commissioner of Commerce, Community and Economic Development, serves as the state co-chair, representing Alaska, according to the commission's website. The bulk of the Denali Commission's current efforts are focused on rural energy improvements, and millions of dollars of Denali Commission grants have been granted to the Alaska Energy Authority that's involved in dozens of projects around the state. Because Bell serves on the energy authority's board, she's unable to vote on energy projects, based on Martin's recommendations.

"She is truly committed and has exerted a great amount of care, but she's limited because of this Department of Justice determination," Martin said. "All these commissioners care about Alaska, and I understand their frustration. These people aren't getting big bucks to participate in this, they're busy folks, and they're doing this out of concern for other people. But this ethics determination has been an impediment to their participation."

Neimeyer, who was with the Denali Commission between 1999 and 2005 before returning as co-chair, said commissioners were able to be far more engaged before 2006. But the decision, and the potential criminal repercussions, has had a "chilling effect" on discourse.

"I personally remember how the commissioners were actively engaged in the first five years of the commission and there is nothing more that I would like to see than a return to those days," Neimeyer said in an email. "If the GAO audit request can help put the agency back on a path for more engaged Commissioners, I would be thrilled."

Murkowski blasts inspector general

In her five-page letter, Murkowski lashes into Marsh, one of dozens of inspectors general who audit federal programs and agencies around the country. Marsh, the inspector general tasked with reviewing the Denali Commission, reports to Neimeyer.

Murkowski understands that Marsh was given permission to "telework" from his home in Arizona two years ago and is "rarely present" in the commission's Anchorage office 2,700 miles to the north. Marsh has reported that his office is smaller than other inspector general offices -- Marsh works alone -- and that the commission's workload is too much for one auditor, Murkowski notes.

"While I agree with the Inspector General's assessment that the present situation is untenable, one is left to wonder whether the Inspector General might perform his job more effectively if he spent 40 hours a week in the Commission's office," she notes.

Murkowski: Communication breakdown

On the other hand, Murkowski doesn't know why Neimeyer has not provided the inspector's office with more resources, or attempted to reassign the inspector's responsibilities to a larger inspector general's office, something Marsh has recommended.

That said, Murkowski has lost faith in Marsh, following his recent report to Congress that, she said, was filled with "conjecture, speculation and innuendo."

In the report, Marsh "asserts" that recipients of commission grants for projects such as tank farms did not stash away funds to pay for future repair or replacement of the facilities, as required by grant conditions.

"Yet for reasons never explained," Marsh never audited the grant recipients to determine whether they'd complied. Still, Marsh speculated that millions of dollars could be missing, and recommended Congress not reauthorize the commission until the accounts are found, Murkowski writes.

"Ambiguous language in the report caused one seasoned reporter to publish that the missing money consisted of federal funds," she said, referring to this reporter and a story in Alaska Dispatch that required an update. "The federal Co-Chair was then forced to clarify, after the story was published, that this was not the case."

Emails and a call attempting to reach Marsh for that story, so he could clarify what he meant, were not returned. Neimeyer said then that Marsh "typically does not respond to the media."

Murkowski also slams Marsh for failing to communicate with her staff about his report. His practice of not answering Congressional inquiries is out of line with other inspector's offices and "deserves scrutiny," Murkowski writes.

As for the accounts the Denali Commission was supposed to keep track of, Neimeyer, "to his credit, agreed to undertake the audit work to determine whether the escrow funds are in fact where they should be."

Neimeyer has said the commission will publish the results of that work next month.

Murkowski's office told the Dispatch on Wednesday that the comptroller general has not replied to her letter. A call seeking comment from Marsh was not returned.

Contact Alex DeMarban at

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