Permanent Fund board chair reappointed to a second 4-year term

Ethan Schutt, a member of the Alaska Permanent Fund’s board of trustees, was reappointed on Thursday to serve a second four-year term.

Schutt, executive vice president and general counsel of Bristol Bay Native Corp., was first appointed to the board by Gov. Mike Dunleavy in 2020. His first term expired on July 1.

Leaked staff emails in April suggested Schutt would not be reappointed. On Thursday, fund managers confirmed in a prepared statement that Schutt would serve a second term.

“I’m honored and humbled to be reappointed by Gov. Dunleavy. It’s a significant responsibility for the people of Alaska, and the state of Alaska,” he said in a Thursday interview.

The governor has sole authority to appoint Permanent Fund trustees. All six current board members were appointed or reappointed by Dunleavy.

Staff emails leaked to political website the Alaska Landmine in April suggested Schutt’s position on the board was in doubt.

In a Feb. 5 email, Marcus Frampton, the fund’s chief investment officer, said he’d been told by trustee Ellie Rubenstein that he “should know that Schutt will not be reappointed by the governor when his term is up this June.”

In a later interview with the Daily News, Schutt said he had no idea if that was the case. He said that decision rested with the governor.

When asked about doubts around his reappointment, Schutt said Thursday that he doesn’t pay attention to “palace intrigue.”

Schutt said he had conversations with Dunleavy and the governor’s staff in recent days about his position on the board. He got a letter formally confirming his appointment on Thursday, he said.

The governor’s office did not immediately respond to a request for comment on the decision to reappoint Schutt, or why the announcement was made 17 days after Schutt’s term expired.

Schutt said Dunleavy did not explain to him why he was being reappointed. When Schutt first took on the role in 2020, he said Dunleavy told him to be “a firewall against politics” getting into the corporation.

“Everyone’s a political appointee,” he said Thursday. “So there’s always the creeping danger of politics, and it’s just not clear where it would always come from.”

Last year, Schutt was in the majority of trustees who decided not to pursue a riskier investment strategy aimed at growing the fund to $100 billion. In May, he was one of two trustees who opposed defying the Legislature’s wishes by keeping an Anchorage Permanent Fund office open.

Schutt said he saw the role of trustees as protecting and growing the fund, supporting “exceptional” corporation staff, monitoring the fund’s performance and conducting an annual asset allocation.

The board picked Schutt to serve as chair in 2022. At next week’s board meeting, trustees could temporarily reappoint him or choose another board member to serve in that position. At September’s annual board meeting, trustees are set to pick a permanent chair for the next year, Schutt said.

State law requires one board member to be the commissioner of the Department of Revenue, alongside another department head. Four public board members are required to have experience in finance, investments or business management-related fields.

The six-member board of trustees guides management of the $80 billion Permanent Fund, which has been the state’s primary source of revenue every year but one since 2018.

Deven Mitchell, CEO of the Permanent Fund, warned a legislative committee in June of a small but growing chance that within the next several years, the fund won’t be able to pay for state services and the annual Permanent Fund dividend.

For the first time, fund managers started the fiscal year in July with planned draws exceeding available revenue from the fund’s spendable account, Mitchell said. Investment earnings over the next year should bridge that fiscal gap, but “a doomsday scenario” would see returns fall short, he added in June.

The leaked April emails sparked added scrutiny of the board and raised ethical concerns about trustee Rubenstein. She was shown to have set up meetings between Permanent Fund staff and business associates or companies with ties to a company she owns. Rubenstein denied wrongdoing.

Since then, board members have discussed changing how investment referrals are made to improve transparency. Decisions on investment referrals and crisis communications could be made at next week’s full board meeting.