This article was originally published on dermotcole.com.
The repeated failures of the Regulatory Commission of Alaska, Gov. Mike Dunleavy and the Alaska Legislature will be on full display Tuesday when the Alaska Supreme Court hears a case about whether the public deserves to be informed about some of the many secrets behind the biggest single business transaction in state history—the sale of BP’s Alaska business to Hilcorp.
What I wrote here on Oct. 24, 2019, unfortunately, turned out to be true: “The hands-off approach taken by the state of Alaska to the sale of BP’s Alaska’s assets to Hilcorp is evident in the lack of any coherent public process to examine the wide range of issues related to the sale.”
“One of the most important items getting no public attention is the request by Hilcorp that its financial records be treated by the Regulatory Commission of Alaska as confidential.”
Hilcorp is a private “family owned business” controlled by Texas billionaire Jeff Hildebrand, a tycoon with a penchant for secrecy.
Nearly three months after Dunleavy was elected governor the first time, Hildebrand donated $25,000 to the campaign group largely funded by Dunleavy’s brother and Bob Penney.
Later, the governor and the RCA gave Hilcorp the secrecy the company craved. Attorney Robin Brena, representing the City of Valdez, is before the Alaska Supreme Court arguing the case for public disclosure.
Dunleavy, BP, Hilcorp and the RCA claim the lawsuit is moot on technical grounds, but they don’t even try to justify why Alaskans should be denied access to crucial information about the pipeline and Hilcorp.
Had Dunleavy, Attorney General Tregarrick Taylor and the RCA commissioners done their jobs, they would have fought for and demanded transparency. Instead, they fought for secrecy, siding with Hilcorp. The Legislature, meanwhile, paid little attention.
The Anchorage Daily News has this overview of the court case. UAF History professor Phil Wight offers this cogent analysis.
Oral arguments are set for 1:30 p.m. in Anchorage. The proceeding will be carried on Gavel to Gavel.
Here is the brief from the state, defending the secrecy that Hilcorp insists upon.
Here is the brief from BP, defending secrecy.
I want to thank BP for reminding the court, and all Alaskans for that matter, that it is possible to challenge the secrecy given Hilcorp by the RCA with the blessing of our attorney general and governor.
As BP notes, Hilcorp has to file new quarterly financial statements with the RCA three times a year. This presents anyone with “numerous future opportunities to challenge the RCA’s interpretation of AS 42.06.445(c),” BP said in its court filling, repeating some version of that statement four times.
“The issue will not evade future review should a person wish to diligently challenge the RCA’s interpretation of AS 42.06.445(c),” BP said.
At a minimum, someone should take BP up on its suggestion and ask that the documents Hilcorp is constantly filing with the RCA be made public. Plus, the Legislature should revise the law to eliminate the assumption that secrecy is warranted whenever the feds don’t demand a specific document about the pipleline.
Hilcorp filed its latest request for pipeline secrecy last week, telling the RCA that since the documents it is filing do not have to be filed with the Federal Energy Regulatory Commission, they have to be kept secret because of the protection in AS 42.06.445(c).
Hilcorp says it operates as privately owned “family” company to avoid disclosure of information that would help competitors.
This is a similar argument to those it made in Juneau this spring when legislators debated a plan to end the Hilcorp tax loophole so that the company pays the same tax as other large oil companies.
Luke Saugier, vice president for Hilcorp Alaska, said if the state enacts one of two tax bills, SB 114 and SB 122, or the individual pieces of those bills, which include the income tax provision, “Hilcorp would be forced to scale back in Alaska, especially in the Cook Inlet where the investment and operating enviroment is most challenged.”
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Dermot Cole has worked as a newspaper reporter, columnist and author in Alaska for more than 40 years. Support his work here.
