Commentary: Permanent Fund invites political corruption with unwarranted secrecy on in-state investments

By Dermot Cole

For The Cordova Times

With no public review or public discussion, the state bought part of Peter Pan Seafood Co. a year ago, through an investment fund largely bankrolled by the Alaska Permanent Fund.

The same state-backed fund also bought a small part of Astra Space Inc., the company that leases the state-owned Kodiak rocket range, again without public involvement or discussion.

Alaska Permanent Fund CEO Angela Rodell and the trustees of the Alaska Permanent Fund treat these transactions as state secrets.

We only know about the Peter Pan and Astra deals because one of the companies assigned to invest $100 million in Alaska for the Permanent Fund decided it was in its best interest to publicize a few facts, absent dollar amounts and other important specifics.


A second investment company also assigned to invest $100 million of public money in Alaska has announced only two deals — $10 million for a Tetlin mining venture and an undisclosed amount for a new cargo terminal at the Anchorage airport.

Additional information about the dispersal of public money — the running total is above $124 million so far — is being withheld by the state.

The Permanent Fund management and trustees get away with this because the Legislature is not paying attention. And Alaska’s major news organizations are not paying attention.

The state will argue that all of the in-state investments are good ones and that the two investment companies will be judged on their overall performance. The problem is secrecy and the risk of political favoritism.

The Alaska Landmine reported on this secrecy in August, but no other news organization and no one in the Legislature has called for a change.

As a result, Alaskans have no idea what the Permanent Fund is doing on behalf of Alaskans in Alaska.

The Permament Fund trustees are to hold their quarterly meeting in Anchorage Dec. 8 and 9 at the Marriott Anchorage downtown. At 11:45 a.m., the trustees are to hear an update from the two firms investing the $200 million.

The management of the fund and the trustees should end their secrecy about Alaska investments and reveal to Alaskans what specific investments have been made so far, including how much money the state has invested with Peter Pan and Astra.

There are more things to think about regarding the Permanent Fund than the size of the dividend, which is the lowest common denominator in Alaska politics.

Relying mostly on $100 million from the Permanent Fund, McKinley Capital Management created what it calls the “Na’-Nuk Investment Fund.” Separately, the Permanent Fund gave $100 million to Barings for what that company calls the “Alaska Future Fund.”

Peter Pan Seafood says that the Na’-Nuk Investment Fund LP and two other companies acquired the seafood company 11 months ago.

McKinley Capital Management, an Anchorage company now headed by Rob Gillam, son of the late Bob Gillam, manages the Na’-Nuk Investment Fund.

The goal of the fund is to generate a market return, he said. Based on this 2020 disclosure brochure, the Permanent Fund appears to be the principal investor not only in Na’-Nuk, but in other “private investment funds” run by McKinley Capital.

The Na’-Nuk fund does not just contain money from the state. According to an April SEC filing, in addition to the Alaska Permanent Fund, there were three other investors in the Na’-Nuk fund, supplying $17 million.

Gillam told the Anchorage Economic Development Corp. in June that the acquisition of Peter Pan Seafood was “an opportunity to take our brand and our resource back.”

“We were pretty excited and honored to bring a storied name back to Alaska, back to the United States from a Japanese conglomerate, great group, great firm, lots of respect for them, but they didn’t really care about Alaska,” Gillam told AEDC.

“And yet all the resources of Peter Pan come from Bristol Bay, come from Valdez, come from Port Moller, you know … come from King Cove. They didn’t care about King Cove.”

“Again, with respect, we are friends and neighbors with King Cove. We care about King Cove. That really is an opportunity to use our resources for our benefit and our job opportunities,” he said.

Gillam may be exactly right. The investment in Peter Pan by the Alaska Permanent Fund Corp., anchor of the Na’-Nuk Investment Fund, may be a profitable use of state funds.

Likewise, the investment in Astra for launching rockets could be a great thing for the state. And what appears to be a third investment — a new airline proposing Aleutian service — may also be warranted, though it’s not clear from the company press release what exactly the Na’-Nuk role is.

No matter how attractive these investments may be, treating the details like state secrets is dangerous for the future of the Permanent Fund and for Alaska. It’s an invitation to political corruption.

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