Alaska legislators will hold investigative hearing on removal of Permanent Fund’s executive director

Alaska legislators are demanding answers from the trustees of the Alaska Permanent Fund, asking why they abruptly fired the fund’s executive director.

The joint House-Senate Legislative and Budget Audit Committee will hold an investigative hearing in January, its leader said Friday, and the leaders of the House Rules Committee and Senate Rules Committee issued a joint letter asking why Angela Rodell was relieved Thursday after the fund’s best year on record, and expressing “grave concern” over the action.

“We strongly believe that the public and the Legislature deserve an explanation for the action the board took yesterday,” said the letter, signed by Sen. Gary Stevens, R-Kodiak, and Rep. Bryce Edgmon, I-Dillingham.

The trustees who dismissed Rodell have refused to explain their reasoning, citing personnel confidentiality. Lawmakers say that’s unacceptable.

The Alaska Permanent Fund supplies two-thirds of Alaska’s general-purpose revenue, more than $3 billion annually, to be used for services and dividends.

[Alaska Permanent Fund board removes executive director Angela Rodell]

“What new direction do the trustees want to take the fund? Because right now, no one knows anything. No one’s talking, and in a vacuum, rumors swirl. I believe that Alaskans should be given better answers with such a high-profile position,” said Sen. Natasha von Imhof, R-Anchorage and chair of the budget and audit committee.

Von Imhof said her committee will invite the trustees to testify and explain themselves at a meeting Jan. 17. Rep. Chris Tuck, D-Anchorage, is vice chair of the committee and said he supports the investigation.

Under Rodell, the fund grew from $51 billion to more than $83 billion, and next week the corporation was expected to be named the best place to work among financial services businesses and organizations in the United States.

An independent audit, presented in September, found no major problems.

Rodell herself last month was named chair of the International Forum of Sovereign Wealth Funds, a network of governmental organizations whose members control trillions of dollars in assets.

Sen. Bert Stedman, R-Sitka, is chairman of the Senate Finance Committee and a member of the budget and audit committee. He said he requested a hearing on the firing and finds it suspicious.

“There is a lot of concern that this clearly politically related in that the Permanent Fund board is being set up and pushed to become more of a political arm of whoever the sitting governor is. And that is something that we have avoided for years and should continue to avoid,” he said.

“I think it’s very, very important that the fund remain independent. That will lead to success, and it cannot be politicized,” von Imhof said, explaining that she is particularly worried about the fund’s performance if inflation continues to rise.

Stedman was among several lawmakers who on Thursday and Friday drew a line between Thursday’s decision and Gov. Mike Dunleavy’s proposals to overdraw the Permanent Fund to pay a larger dividend. In public testimony, Rodell has urged elected officials to avoid overdrawing the fund.

In Thursday’s 5-1 vote to remove Rodell, all five votes came from trustees who were last appointed by Dunleavy. (Three of the those trustees had previously served under other governors.)

“I think they didn’t like her conservative approach to spending from the Permanent Fund,” said Rep. Andy Josephson, D-Anchorage.

In light of the trustees’ action, Josephson said he intends to draft legislation that would require future trustees to be appointed by a multi-member panel instead of the governor directly. The panel would include members selected by the House and Senate, as well as the governor.

The idea would be to insulate the Permanent Fund from political decisions like the one he thinks led to Rodell’s removal.

“Maybe I’m wrong,” Josephson said. “Maybe something else happened internally. Who knows? But it doesn’t look right to me.”