South Anchorage Senate candidates confront pasts

Alaska Republicans suddenly feared they were losing control of the state's political institutions when Gov. Bill Walker, a Republican-turned-independent, was elected in 2014 after linking his campaign with Democrat Byron Mallott, now the lieutenant governor.

That joining of two candidates from different political backgrounds was floated publicly and endorsed by Vince Beltrami, the head of Alaska's largest organized labor group, prompting speculation by Republicans that Walker would be beholden to Beltrami and the state's public employee unions.

Now Beltrami is running for elected office himself — and trying to unseat one of the GOP's loyal members, state Sen. Cathy Giessel, who represents a Southeast Anchorage seat. The "calamitous" prospect, as Republican Party chair Tuckerman Babcock recently put it in an email to GOP leaders, leaves Beltrami "poised to totally control the House and Senate."

[Alaska AFL-CIO backs Walker in SuperPAC]

The two candidates are among the most polarizing figures in Alaska politics — Giessel is known for her unabashed boosterism of the state's oil industry — and their race is expected to be a heated and expensive one.

Giessel reported $140,000 in her campaign account in her last financial disclosure in August, a huge sum for a legislative race, while Beltrami has been criss-crossing the state to raise cash.

"This is the heavyweight title fight in the state of Alaska right now," said John-Henry Heckendorn, an Anchorage political consultant and friend of Beltrami's.

At his unfinished, rented campaign headquarters off Tudor Road, crammed with lumber for signs, Beltrami, who's running as an independent, warmed up more than three dozen volunteers Thursday evening before sending them to drop off fliers.

He gave them a shortened version of the spiel he delivers at doors — a political and personal attack on Giessel, a member of the Senate's Republican-led majority.

Incumbent lawmakers were derelict in their duty this year, Beltrami said, leaving the state with a multibillion-dollar budget deficit. They wasted time, staying in Juneau for months past the scheduled end of their 90-day session.

And, Beltrami said, his opponent is just not all that friendly.

"A lot of people don't like her," he said.

Beltrami, meanwhile, is a goateed, gregarious grandfather of three whose own personality, according to his friends, will be an asset in his campaign. He touts his experience as a labor negotiator, and his job leading the Alaska branch of the AFL-CIO, as evidence he can work out compromises.

He's the kind of guy you'd want to drink a beer with, Heckendorn said.

"You can't help but like him," Heckendorn said.

In the November election, Beltrami hopes to ride the same anti-incumbent wave that tossed seven legislators from their seats in the August primary.

But Giessel says lawmakers running for re-election are being unfairly attacked by their opponents.

They've been criticized for not passing a comprehensive, long-term financial plan to balance the budget. But the very idea of a multiyear program is no more than a "bumper sticker statement" because of the Alaska Constitution's ban on dedicating more than one year's worth of revenue at a time, Giessel said.

"We completed legislation that in any other year would have been considered a huge accomplishment," she said. "And yet because of unrealistic expectations by people that have never done this work, we're being vilified for not having done more."

Among the Legislature's accomplishments this year, Giessel said, are major changes to the Medicaid health care program that could save as much as $113 million annually by 2022, according to the Senate majority.

The Senate also passed legislation to restructure the Alaska Permanent Fund, directing some of the investment earnings away from dividends to help balance the budget. Giessel, who chairs the Senate Resources Committee, was one of 13 majority members to vote for the legislation, though it ultimately failed in the House.

Giessel and her staff also played key roles in the passage of House Bill 247 — oil tax legislation that scaled back cash subsidies for companies, primarily those developing natural gas projects in Cook Inlet in Southcentral Alaska.

Giessel has raised ample campaign cash from oil company executives and contractors, and she's been accused of being too soft on the industry. But officials with Cook Inlet oil companies said Giessel did them no favors this year.

"I think she's generally in favor of having a healthy industry in Alaska, but man, she doesn't cut anybody any slack," said Benjamin Johnson, whose company, Bluecrest Energy, is developing an oil and gas prospect off Anchor Point on the Kenai Peninsula. "When it came time to decide what to do, they basically just killed us in Cook Inlet — they took away the credits and they started taxing again."

Giessel's critics, however, point out that the oil tax legislation backed by her Senate majority left untouched a key tax deduction for the state's big North Slope producers like BP, ConocoPhillips and Exxon Mobil.

"I expect major producers to advance positions to optimize their shareholder wealth; I just expect for the people that we elect to fulfill their duty to protect our interest as well, and that's what isn't happening," said Robin Brena, an oil and gas attorney who's worked for Cook Inlet companies. He used his expansive South Anchorage home for a fundraiser for Beltrami this week.

Giessel said it wouldn't make sense to try to raise more tax money from the big oil companies when the industry is already suffering from low prices. And she argued that the impact of further industry cost-cutting would ripple through the Alaska economy.

"They're shutting down rigs. They're laying off people. Yeah, we could raise taxes and they could do that even faster," Giessel, a nurse practitioner, said in an interview at the Brother Francis Shelter, where she volunteers at a weekly clinic for the homeless. "Here in this facility are people that need help finding productive work. And the more constrained our economy becomes, the less these folks have a chance at a productive life."

Giessel doesn't have much to say about her opponent, but she does think that her constituents should be concerned about Beltrami's candidacy because of his job.

The Alaska AFL-CIO is made up of dozens of private and public sector employee unions, including some that represent state workers, whose contracts ultimately go before the Legislature for approval.

Beltrami, Giessel said, "is proposing to be on both sides of the negotiating table for state employees."

Republican Party leaders take the criticism even further, describing Beltrami as a political mastermind who orchestrates Democratic legislative candidates' campaigns, and whose own election would pose a massive conflict of interest.

"Look at it this way: If the president of Exxon were running for the state Senate, what would the reaction of the state Democrats be?" ARP chair Babcock said in a phone interview. "It is a fierce, bold play for control that he's going for. He is not interested in going down and being one of the guys or girls — he is interested in being the one who calls the shots."

Beltrami has pointed to the two Republican senators who work for ConocoPhillips outside the legislative session. And he scoffed at Babcock's criticism, saying that the party leader has a "bizarre fixation" with his candidacy.

"The amount of power he ascribes to me — it's almost comical," Beltrami said. Republicans, he added, are "scared of not being in complete control of the Legislature."

Beltrami was a Democrat until he changed his registration two years ago, and says he'd represent the interests of working families, not just union members.

He said it would be reasonable to remain in charge of the AFL-CIO if elected, given that Alaska has a part-time Legislature.

Beltrami wouldn't give an unequivocal pledge to recuse himself from votes on union contracts, or promise not to seek a position on the Senate's labor committee.

But he said his "first inclination" would be to refrain from voting on labor contracts, and he thought he'd prefer a spot on the resources committee, with its jurisdiction over development of oil, gas and other natural resources.

For now, Beltrami is focused on door-knocking, fundraising and other facets of his campaign — relying on a network of more than 100 volunteers, about one-fourth of whom will turn out to help on a given night.

Giessel, meanwhile, says she's knocked on more than 5,000 doors herself. She's using a powerful voter database, i360, and still has her massive campaign war chest of $140,000.

Giessel, who's paid a political consulting firm $2,400 for work that includes opposition research, said she'd be "foolish" to tell a reporter exactly how she planned to spend her cash — whether she'd make big purchases of television or radio ads, send bulk mailers or use other media.

But she promised that the money would help voters hear from her somehow.

"I'll be using it to communicate with my constituents," she said.