For decades, the Alaska Industrial Development and Export Authority has operated with impunity. It’s steadily chipped away at legislative oversight and lost big on the majority of its investments. That wasn’t what was promised when AIDEA was created in the 1960s. AIDEA was supposed to invest in projects to benefit Alaska’s economy, like oil and gas development, mining, or giving loans to businesses that otherwise would struggle to launch.
Today, AIDEA amounts to little more than an industry slush fund sitting on a $1.4 billion endowment of public money. Its board is appointed by the governor without legislative approval, and AIDEA has whittled away so much oversight that it can now issue bonds up to $25 million without legislative approval, and it’s exempt from provisions of public record and open meetings laws.
AIDEA was able to usurp this power because it’s fundamentally complicated. Research shows most Alaskans don’t know what AIDEA is. But recently, more Alaskans are starting to take notice of AIDEA’s waste and abuse of public funds. SalmonState commissioned several economic reports analyzing AIDEA’s paltry return on investment. Alaska Wilderness League launched a campaign to call out legislators for supporting and shielding AIDEA.
Now, the 907 Initiative is launching a paid communications campaign to educate the public on AIDEA, its board of directors, and the systemic waste of public dollars. This funding could instead fund public education, a larger PFD, energy security, or the myriad of underfunded state services.
The “AIDEA Are Losers” campaign will put a spotlight on AIDEA, its board, and their misguided investments that are harming Alaska. AIDEA created a legacy of failure stretching back decades. AIDEA loaned out nearly $100 million on the Mustang oil project to a company that couldn’t repay the loan because it didn’t produce significant oil. The Anchorage seafood processing plant AIDEA invested in went belly-up, and is now home to a megachurch. Hundreds of millions were invested in coal and mineral projects that failed. What AIDEA has done more than anything else is work to industrialize and pollute Alaska without economic returns.
This money belongs to Alaskans. Yet, at a time when our schools are underfunded, our ferries are docked, our infrastructure is crumbling, and we are facing an energy shortage, AIDEA is investing in out-of-state borrowers and half-baked business plans. Every time an AIDEA project fails, it’s the public left holding the bag.
A recent economic report from two long-time Alaska economists found that giving AIDEA public funding, rather than investing in something more in-line with the U.S. stock market like the Permanent Fund, resulted in a $10 billion loss for the state. Yet, AIDEA continues to take. Now, AIDEA is asking to increase the amount it can borrow without legislative approval from $25 million to $100 million. Just recently, it asked the state for $300 million to support “mining” in Alaska but failed to name a specific project.
It’s past time we put an end to AIDEA’s reckless gambling with our public funding.
Aubrey Wieber is the executive director of the 907 Initiative.
