Thread by @mattbuxton

Hot off Gov. Dunleavy's tantrum over the press refusing to look the other way on the firing of APFC director Angela Rodell, the Legislative Budget and Audit Committee is holding a hearing on the firing of Angela Rodell.

w3.akleg.gov/includes/_play…

#akleg

They're currently in executive session on an unrelated topic (Board of Pharmacy audit).

The Legislative Budget and Audit Committee is coming back together. On the agenda is some RPLs and then invited testimony from the Alaska Permanent Fund Corporation's board of trustees.

Watch here: w3.akleg.gov/includes/_play…

Documents here: akleg.gov/basis/Meeting/…

#akleg #akgov

They're approving some budget requests from the governor that appear to be capital budget items but are amendments to the operating budget. It's not neat bookkeeping, but it's not a huge problem logistically speaking. They approve it with a warning to essentially not to it again.

Alright, now we're into LB&A's hearing on Rodell.

Chair Sen. von Imhof: "This is not an investigation at this time. This committee is on a fact-finding mission."

w3.akleg.gov/includes/_play…

#akleg #akgov

Sen. von Imhof says the goal here is to:
-First, learn about the process APFC uses to evaluate, support and terminate employees and specifically why Rodell was fired so abruptly.
-Keep the Alaska Permanent Fund free from political influence.

#akleg

APFC Board Chair Craig Richards is testifying. He claims privilege over the firing: "It is not appropriate to discuss the specific facts around Ms. Rodell's termination."

Says they should look at her personnel file and check out a hearing where there was "visible tension."

Chris Poag, APFC's general counsel, tells the #akleg that they don't get to find out about Rodell's firing because she's contemplating suing the state.

He says Richards will only talk about three limited topics. Everything else will be found out in the course of litigation.

Rep. Ortiz: You said there was "visible tension" at a hearing. Can you tell us what was the basis of that strained relationship?

Richard: No.

#akleg #akgov

Keep in mind that the LB&A has audit and subpoena powers. They haven't invoked them yet, but it seems like they're edging in that direction already.

The #akleg really likes Rodell.

Sen. von Imhof asks again about the Kodiak meeting, noting it's on the public record. Can he not discuss a public meeting?

Richards: "We can discuss the Kodiak meeting, but we cannot discuss the Kodiak meeting as it was discussed in the executive session."

Rep. Tuck says he'd like to learn more about Richards' explanation of "visible tensions":

"Tensions by itself aren't necessarily a bad thing. Often through tension, we make things better. I'd hate to see this was all about personalities."

Richards says, basically, the board is allowed to do whatever it wants: "At the end of the day this is an at-will employment decision. ... It is wholly and appropriately in our right to remove the employee." and replace one that aligns with the board's vision.

#akleg

Rep. Tuck: "Just because you can, doesn't mean you should."

Rep. Josephson notes that the CIO also reports directly to the Board of Trustees.

Richards explains some weird situation where the board still heard about CIO investment decisions because there was something that Rodell did "that made the board uncomfortable."

Rep. Josephson notes that they were uncomfortable yet still gave her a merit-based raise.

Richards says, actually, giving an employee that makes you uncomfortable a merit-based raise is good management.

And with a hard cut off of 5 p.m., Richards now gets into his presentation.... which covers a history of the creation of the Alaska Permanent Fund Corporation.

Richards is using some old history to basically attack Rodell for raising concerns over whether the board wanted to maintain its independence from politics when Comm. Mahoney wanted to cut investor pay because of the PFD.

Richards says APFC isn't REALLY independent.

Rep. Josephson asks whether the board still supports the 5% POMV limit. He notes Rodell suggests it was her adherence to those rules that led to her ouster.

Richards: "I find myself in a little dystopian world here. ... It doesn't make any sense to me that" she raised this.

Richards says the Board of Trustees could change its resolutions however it wants—including advocating for a one-time ad hoc draw from the Permanent Fund—and the executive director would be bound to follow them.

Sen. von Imhof: Rodell has First Amendment rights.

Richards: Sure, but you also have a boss who can tell you what to do.

Sen. von Imhof asks whether the APFC ever did modeling of a one-time draw.

He says, yes, and it was "intellectually devoid" and Revenue Commissioner Mahoney wanted a new version of it that reflected the Dunleavy plan.

He seems to suggest this was a point of contention w Rodell.

Rep. Ortiz says if the board didn't have a problem with the 5% draw and didn't have a problem with her performance then why?

"Are we gonna get enlightened in any way about what the fundamental reason was? ... What are we doing here?"

Richards basically reiterates that they're not going to talk about anything in specifics.

von Imhof: "That's disappointing. You had a month to prepare."

Sen. Bishop asks why they were modeling a $3B overdraw on the fund in the first place.

Richards can't say who initiated it. Maybe it was a different trustee? Maybe it was Rodell? He can't remember.

(But it seems to part of why they fired her)

Richards said earlier that the most recent round of modelling—which showed that an overdraw was, in fact, cool and fine.

Sen. von Imhof wants to get a deeper answer on who initiated that analysis.

Rep. Spohnholz pops in. Also noting that Richards' statements on the modeling—that the board both does and doesn't have direct say—is at odds.

Spohnholz: "I'm just really confused why you'd invest precious resources and time modeling something that you don't support as a board."

It really seems like the key in a lot of this is the Board of Trustees' satisfaction with various different modeling of what a potential overdraw—a key goal of Gov. Mike Dunleavy—would have on the fund.

They kept pushing until they got a response that supported it.

Sen. Stedman notes that the Board of Trustees claims to support the rules-based management approach, but notes that a trustee—Revenue Comm. Mahoney—was out spending a lot of time trying to build support for ad hoc draws.

#akleg

Stedman: "I think it would make it difficult for any employee (Rodell) to, on that subject, work with the board in absolute harmony because the board is not in harmony."

Richards shrugs and says the resolutions are still in place.

Sen. von Imhof notes that the board is supposed to be insulated. What it's supposed to be insulated from?

Richards says it's supposed to have less direct legislative and executive officer involvement (commissioners are 2/6 of the board) and then talks about travel policies.

Sen. von Imhof asks if the governor's ability to select four members with no oversight and having two commissioners on it really makes it non-partisan?

Richards: Yeah.

Bishop cuts to the quick: "Who terminates a trustee if they breach their fiduciary responsibility?"

Poag, the APFC general counsel, says it's up to the administration (which would be Richards' buddy, Gov. Dunleavy)

Sen. Stedman says they need to address the fact that Revenue Commissioner Mahoney—a supporter of the overdraw—became the Board of Trustees' vice chair and was therefore in charge of Rodell's employment evaluation.

He says all these changes to long-standing policy is significant.

Richards says he's actually pretty sure that that's wrong and that commissioners have frequently served as chairs and vice chairs. He references the first chair.

(The accusation wasn't that it's never happened but that it hadn't happened for decades prior to Mahoney taking over)

Per the Alaska Permanent Fund Corporation's documents, the ONLY time a commissioner or cabinet official served as chair or vice chair prior to Mahoney being vice chair was when the fund was started, when DOR Commissioner Thomas Williams served as chair from 7/80-12/82.

Richards then explains how the executive director evaluation process was changed a bunch of times because they weren't happy with it until it resulted in Mahoney having direction on it, which coincided with them finally firing Rodell.

They're really continuing to dig into the modeling.

Rep. Josephson has a problem with the $3B modeling being precisely what Gov. Dunleavy wanted.

Richards says, basically, what's the problem with fulfilling trustee requests?

Sen. Bishop agrees. He's concerned about the APFC modeling overdraws: "Termination is one thing, protecting the fund for the future generations of Alaska is paramount."

#akleg

Sen. Micciche raises concern about Mahoney's request to cut investor pay over the size of the PFD, which seems to be one of the key factors in the "tension" with Rodell: "Do we actively separate politics from maximum return? A lot this reeks of something else."

#akleg

Richards says that the individuals on the board are individuals: Is the board political? No. Should raises not occur because people aren't getting dividends? That's not something that's driving the discussion at all.

(Though, it very much was driving the discussion)

Backstory on the fund challenging investor pay over the size of the PFD: ktoo.org/2021/10/03/per…

Stedman notes that the performance pay of the permanent fund was proposed by Commissioner Mahoney, who is the board's vice chair. Stedman asks if they ask members to leave politics at home.

Richards: "It's a very gentleman-y, lady board." But the answer is no.

Stedman says that the chair then ought to do a better job at keeping politics out of the situation. He says it's impossible to overlook the fact that Commissioner Mahoney's boss is Gov. Dunleavy, then references some other statements that will be addressed later.

Rep. Spohnholz also on the whole investor compensation beef between Rodell and Mahoney, then notes that her final performance evaluation in 2021 ranked her BETTER than any other year except for her first year on the job.

Spohnholz: "It smells really bad."

Richards says Rodell's improved performance was because they surveyed more people: "She was very popular with the operational side of the house. ... That's not a surprise to me."

Richards then blames the Legislative Budget and Audit Committee for playing politics by keeping bringing up the firing of an at-will employee: "There's politics going both ways here."

Spohnholz: "The legislative process, by definition, is a political process."

Spohnholz says the issue here needs to be the fiduciary responsibility to the Permanent Fund. She notes they fired an executive director who was improving by the survey, posted a record year:

"What is the problem with her performance? You don't want to talk about the process."

Richards says the firing of Rodell was actually "a normal, appropriate, natural process." She was an at-will employee and the board can do whatever it wants.

Richards: "I don't know what to tell you. We made a change and here we are. I've said my peace."

Rep. Tuck says it's only appropriate for the committee to investigate the performance of the fund when the trustees are firing a director who posted record years and by all accounts was doing well.

"We're trying our best to make sure this isn't political."

Rep. Josephson notes that Richards is blaming the #akleg of playing politics "too." He says he's concerned that Richards is confessing that politics are part of the equation.

Richards says he just wants to move on and put Rodell's firing behind them.

Rep. Josephson notes that in the entire report he doesn't see any evidence that there's an "objectively reasonable cause" for firing Rodell. He says you can't even fire a fast-food worker without reasonable clause.

Richards: "I'm not concerned about it."

Richards then says as an attorney, he's been involved in loads of firing, terminations and "I need to go spend time with my family"s.

Sen. von Imhof then reads off several comments that blame the board for ignoring Rodell's efforts to improve things for the board: "Perhaps Has the board failed on its end to properly support and engage with Angela."

Richards: That's not very fair to pick three comments.

Richards: "Did we do enough to bring her along as a board? I think we did but at the end of the day that's not our obligation."

He basically says that if the board can't work with the executive director—for any reason—they should fire her.

Sen. von Imhof: If there were tensions for years, why's there no indication that a work performance improvement plan was created?

Richards: If we did, it was in an executive session and I can't talk about it.

Richards says that they shouldn't weigh the employee survey because a receptionists' opinion doesn't matter as much as the opinion of the CEO, CIO and board.

He says they'll probably "dampen" the use of surveys because it all ended up coming out like this.

Spohnholz: Did you ever consider a performance improvement plan?

Richards with some executive session caveat: No.

The takeaway so far is essentially that the APFC's Board of Trustees is maybe just not very good.

Then Richards says something about how the APFC board "intentionally" didn't write things down.

Richards: "I never came at this process as a CYA kind of thing."

Spohnholz: Did you communicate with the Dunleavy administration about the firing of Rodell in the 6 months leading up to it?

Richards: I'm not going to go into the specific of the interactions or decisions that led up to Ms. Rodell's firing.

S: I'll take that as a yes.

#akleg

Micciche takes issue with Richards' accusation of #akleg politics. He says he's deeply concerned the board will allow politics to slide in and erode the funds' performance into the future. Will they keep politics out and focused on maximum returns?

Richards, with caveats: Yes.

Sen. Bishop says he's concerned that they let go of the executive director when it had posted several huge wins.

Richards says, actually, Rodell wasn't involved with it and can't take credit for the results.

Richards says they're probably not going to do surveys again because it turned out to be subject to a public records request. Says that they probably won't do it in the future because... they don't want the comments getting out in the public.

Sen. von Imhof wonders if there were controls in place to ensure that people weren't tampering with the survey or self-dealing.

Richards calls the accusations "spurious" but concedes there are no safeguards in place to ensure there's no tampering.

Richards says "I would encourage you" not to go down this road of investigating the veracity of the surveys.

Sen. von Imhof says they have, in fact, investigated the survey results. She points out some inexplicable changes in the surveys and notes, it raises some red flags.

Sen. von Imhof: Now that she's out of the way, are you going to apply for the job?

Richards: No. It would be an honor, but no.

Sen. Bishop with some folksy Bishop-ness: "Whatever you say in the darkness, you ought to be able to say it in the light of day."

#akleg

Sen. Stedman says he's very concerned about the accusation that a commissioner said they thought their employment with the governor would be in jeopardy if they didn't support terminating Rodell.

Richards: I don't know anything about that.

#akleg

Richards then says that if he fielded a high-pressure call telling him how to do his job, who to fire and who to hire he'd say "Thank you for your input, I'll consider that."

#akleg #akgov

Sen. Stedman: "I wasn't talking about you. You do not work for the governor."

He's specifically talking about the tail-end of the discussion in @AndrewHalcro's podcast here: adn.com/opinions/2022/…

Sen. von Imhof notes that one of the justifications for terminating Rodell is that her relationship soured with the board, the executive branch and the #akleg. Who said that? Because none at the table were asked.

Richards: "That information is not going to be provided."

Sen. von imhof "Who authorized the release of Ms. Rodell's personnel file?"

Richards doesn't know but notes it was in response to a public records act request by the ADN. He notes Rodell's attorney sought to keep them private, and her request was overridden by the Dept. of Law.

He then praises everyone involved for getting her personnel file out to the public so quickly.

Sen. von Imhof: Should we request the personnel file of Commissioner Mahoney, Commissioner Fiege and yourself (from when you were the AG)?

Richards: I don't think it's good policy! But it's the law.

Sen. von Imhof asks why Dunleavy's spokesman knew precisely when the personnel file would be released?

Richards says he doesn't know who Jeff Turner (Dunleavy's spokesman) is.

Richards suggest that the #akleg ought to change the law.

Sen. von Imhof: A personnel file was released to the media.

Richards: I know, it's terrible.

The background here is while the Dunleavy admin (through the Dept. of Law) raced to release Rodell's personnel file, it's fought tooth and nail to keep the file of former AG Kevin Clarkson private.

This was part of Dunleavy's tantrum against the ADN.

https://twitter.com/kylehopkinsAK/status/1483227041440796673

Sen. von Imhof notes that the executive directors rarely changed. What has changed? The Board of Trustees.

Richards: Just because the board changes, doesn't mean they're not still your boss. ... You know what? The board's the boss.

Rep. Kaufman, the closest thing to a Dunleavy ally on LB&A committee, rambles a bunch without a lot of specifics and says it's interesting.

Rep. Josephson is not as convinced that a Rodell lawsuit is the no big deal that Richards has suggested: "I would've rather paid her for the commensurate work she was doing rather than through the operating budget in Rodell v. the State of Alaska."

Rep. Spohnholz says she believes Richards was "speaking out of both sides" of his mouth. She says she believes it's wrong to label her as a "glorified administrative assistant" as Richards has done when suggesting the success of the fund wasn't hers.

They're in wrap-up now.

Basically everyone is calling for additional hearings and follow-ups on all of this.

Rep. Tuck says he's concerned that Richards' response to the whole situation is to put less stuff in writing, like the employee surveys: "I really don't like hearing that."

Tuck: It may not be political, but it may be personal.

Richards: "I am truly shocked that I am here. This is a new one to me. We have an at-will employee who reports to the board who with years of documented evidence of trust problems going both ways."

Richards: "It's pretty apparent that we have the right to do it. ... To me what it seems is Ms. Rodell is popular and she's making a lot of hay and that's getting a response and feedback."

Richards tells the board to, please, stop looking at whether something untoward happened with the firing of Rodell: "What's best for the fund is to move on."

He says he didn't even do his job this week because he was focused on this.

#akleg

Sen. von Imhof: "It's a tough way to start the session but this will take as long as it takes. We, as a committee, have the statutory and our own fiduciary responsibility to make sure Alaska's largest nest egg is protected from political influence on any side."

#akleg

Sen. von Imhof: "The answers we heard today were not as deep or thorough as we would've liked. ... We would like to know why the governor's office had knowledge of the personnel file. ... Perhaps other trustees, for example, should be invited to this committee."

#akleg

And that's it for this hearing.

von Imhof says they'll be talking with the members and be back with a plan forward.

@threadreaderapp unroll