April 9, 2010
Testimony delivered by Jason Brune, RDC Executive Director
Thank you Chairman Ramras, and Members of the Committee. For the record, my name is Jason Brune and I am the executive director of the Resource Development Council. I appreciate the opportunity to testify today regarding SB 284.
RDC and its members have been intimately engaged in initiatives over the years. A few examples from recent history include the Cruiseship Head Tax initiative, the Gas Reserves Initiative, and the Clean Water Initiative.
The industries that were targeted by these initiatives have spent billions of dollars investing in this state. Each industry employs hard working Alaskans and each pays significant taxes to the state treasury. Be it fishing, tourism, oil and gas, or mining, RDC members have a vested interest in defending their investments. By doing business in Alaska, these businesses have demonstrated that they have a dog in any initiative fight and they should be allowed to participate in the process.
However, section 15.13.068 found on pages 5 and 6 appears to potentially impact an investor’s ability to fight an initiative that targets them because they are a domestic subsidiary of a foreign corporation.
In the hearing before Senate Finance, Senator Huggins requested clarification from Leg/Legal on this issue. To this query, leg/legal replied, and I quote, “"[This section] only applies to a domestic subsidiary, to the extent that a foreign national is making the decision or financing that domestic subsidiary's involvement in a state election. It does not prohibit domestic subsidiaries or domestic corporations with foreign parents from involving themselves in state elections if they're using money that was made in the state, made in the United States, and the decision to spend that money is made by American Nationals."
This response raised even more questions in my mind. I’ll bring up a few specific examples. ConocoPhillips Alaska is an American company making money in the state and in the U.S. but their new president is a native of Norway. Would leg/legal’s response preclude ConocoPhillips from defending itself against an initiative if he makes the decision to spend the money? How about Shell or BP, both of which are foreign companies, which have operations in Alaska, one of which is making money in this state, the other which is spending money, but is making money elsewhere in the United States. Who ultimately makes the decision to spend money to defend themselves against initiatives within their companies? What about cruise companies such as Carnival which owns Holland America and Westmark Hotels? How about mining companies? Some, such as Kinross which owns the Fort Knox mine in Fairbanks, or Teck, which partners with NANA on the Red Dog mine near Kotzebue. Both are Canadian companies, and indeed they are making money in Alaska. Finally, what about mining companies that are investing hundreds of millions of dollars in Alaska in exploration such as AngloAmerican, but they are not making any money either in Alaska or the United States. Are you telling me they can spend hundreds of millions of dollars, employing hard working Alaskans, but they can’t defend themselves against an initiative that targets them?
For the record, each of the “foreign companies” I’ve previously mentioned, BP, Shell, AngloAmerican, Teck, Kinross, Carnival, and many more “foreign companies” are owned within the portfolios of our own permanent fund.
Finally, each of these companies helps fund my organization. How would my organization, or similar organizations, be allowed to participate in elections if they receive contributions from such companies?
The language of this bill should be clear, and not raise questions like I’ve brought up. I urge the committee to clarify the language or delete this section entirely.
In conclusion, RDC supports open disclosure and transparency in election campaigns. However, we are very much opposed to any law that would prohibit contributions allowing RDC members to fight initiatives that target their industries. Thank you for the opportunity to testify today. I’d be happy to answer any questions.
