This story was originally published by Dermot Cole, reporting from Alaska.
On April Fools’ Day, the head of AIDEA said the long-delayed $250,000 “independent” review of the agency would be released by mid-April after the contractor inserted revisions prepared and demanded by AIDEA.
“I would hope that it could be done in the next two weeks,” Randy Ruaro told a joint meeting of the state affairs committees of the Legislature on April 1.
However, AIDEA continues to keep the report by Northern Economics secret, both the original document from 2024 and the revised version.
AIDEA hired Northern Economics to counter what it claimed was “disinformation” in a report by Gregg Erickson and Milt Barker that was highly critical of AIDEA’s economic record.
But even before AIDEA hired the contractor it announced: “AIDEA Debunks Report and Announces Independent Economic Analysis.”
Northern Economics was paid in full for the $250,000 “independent” debunking report, with its last invoice submitted March 1, 2024.
But it appears that the $250,000 “independent” debunking effort did not contain enough debunking to satisfy the Dunleavy administration.
To my repeated requests for the report over the past two months, AIDEA has said: “Your request has been forwarded to the appropriate AIDEA staff.”
This was my mistake in dealing with AIDEA.
Thinking that an informal public records request was sufficient, I didn’t bother with making a formal request until June 10. The agency says it will take at least 20 working days to reply.
The report has been buried for more than a year, a sure sign that someone in the Dunleavy administration did not like the contents.
The April 1 statements by Ruaro were, indirectly, a confirmation of that assertion. At that hearing, Ruaro said the agency wanted revisions in the report before anyone outside AIDEA could see it.
This, despite a state law that says the debunking report completed last year is a public document.
Ruaro mentioned two specific changes he wanted in the independent report.
One, the report needs to say that jobs make people’s lives better and reduce suicides.
Two, that AIDEA wants Northern Economics to use a different method to calculate the benefits of the Red Dog mine.
Ruaro said that AIDEA did most of the work that it wants inserted in the “independent” study.
He said he doesn’t think Northern Economics will charge a “significant amount” to insert the material.
“I think we have the numbers on Red Dog to put together an analysis of what a rate of return is on a resource development project. So I think we can get there pretty quickly,” he said.
Northern Economics, headed by Marcus Hartley, has refused on multiple occasions to comment on the delay or the report, perhaps because it wants to keep doing business with the Dunleavy administration.
The credibility of Northern Economics, which bills itself as “Alaska’s Trusted Economics Expert,” is on the line here. The company says that it “performs meaningful unbiased analyses throughout Alaska and around the world.”
The much ballyhooed report will not be “independent” at all if AIDEA tells Northern Economics to change its calculations and the public is prohibited from seeing the revisions.
Ruaro blames all of this delay on the company. But that’s not fair.
“There’s been a number of issues with the contractor, turnover at the contractor, and then I’ve asked the contractor to add in some information about the social benefits of jobs and other things as we discussed a bit earlier,” Ruaro said.
“I think that’s a really important area and again I’m not trying to steer the, the, the findings of that report to say that jobs are the only solution needed for suicide, but I think we do want to get a good handle on that. It is a benefit that is provided by AIDEA. I believe that can be documented. We have the research pulled. And we’re looking forward to getting that completed and out.”
“The other area that we’ve asked the contractor to take a look at is this concept of net return financially from AIDEA investments. So, you could measure AIDEA’s investment return against investment return, but you should also look at, we believe, you should look at these projects, resource development projects in the return being not just a financial return to AIDEA, say at an 8 percent loan or an investment in equity. But the royalties, the production taxes, the corporate income taxes, the private investment or the private returns in the form of 7i or other things. Kind of what are the dollars that are truly generated by an AIDEA resource project?”
“So we’ve asked the contractor to broaden that scope out and look at an internal rate of return or a rate of return when all those things are considered. And the bit of in-house work that we’ve done so far on that topic just on Alyeschem is showing a return of around 22 percent. So we think it’s important to understand that number.”
“In the study we’ve asked the contractor to do that,” Ruaro said.
The problem here is that the contract with Northern Economics called for a full analysis of AIDEA’s finances and economic benefits. The company either delivered or it did not.
After paying the contractor the full amount—with no penalty for failing to produce—the state only began to claim the work was not finished when I began asking to see the report last fall.
Here is the original contract, earlier amendments and the company’s invoices.
Here is the latest amendment and the AIDEA instructions for revisions.
In 2023, AIDEA officials said they were excited about having Northern Economics take on the robust job. The AIDEA press release was headlined “Northern Economics to Conduct Independent Analysis of AIDEA.”
“Our team of economists is the best in the business and we look forward to providing this third-party unbiased economic analysis of AIDEA as quickly and thoroughly as possible,” Hartley said in the 2023 press release.
The report was supposed to be complete by late 2023. Last June AIDEA extended the contract until the end of 2024, even though all the money had been spent.
Here is an AIDEA April 9, 2024 press release, in which Ruaro provided links to a right-wing dark money outfit attacking left-wing dark money. The groups backing Salmon State, and by extension, Erickson and Barker, are an “affront to the democratic process,” according to Ruaro.
Dermot Cole has worked as a newspaper reporter, columnist and author in Alaska for more than 40 years. Support his work here.
