THE FOUNDATION OF TRUST

Tonight at 8:30 PM, the Alaska House gaveled in for the Special Session. Governor Palin's ACES bill (the revisit to oil taxes and related issues)was read across mthe floor, and assigned to the House Oil and Gas Committee, the Resources Committee, and the Finance Committee. When the "Special Orders" portion of agenda came at the end of the session, I rose to speak on "The Foundation: Steps One, Two, and Three. The following is what I had to say:

"Mr. Speaker,

I don’t want to be here at this Special Session. I doubt that you want to be here, and I could probably say the same for every other legislator in this building, at both ends of the hall. But here we are, like it or not. As we used to say in the military, “We knew the risk when we joined up.”

This Special Session was forced upon us. Not by the governor. Not by you Mr. Speaker, and not by the one of the political parties. This Special Session was forced on us because the Foundation of Trust between the good people of Alaska, and the folks they elect to public office has been seriously damaged.

The damage started with the previous governor’s actions and attitudes, and some in his administration. Then came the searches of several legislators’ offices – none of those legislators are here in the House tonight. Then came the indictments, and the convictions for bribery.

Our hearts and prayers go out to the innocent families of those involved, but dishonor and distrust have been brought to the political process, and that’s reality. In fact, one of the convicted former legislators, in his sentencing memorandum to the court, stated that, and I quote, the “breach of the public trust has undermined confidence in Alaskan government.” Well, I have to agree.

So, if someone thinks this Special Session is too expensive, and thinks we shouldn’t meddle again so soon with oil taxes, don’t blame those of us here tonight. Blame those indicted. Blame those convicted. And blame the VECO executives who have plead guilty to bribery, and blame any other wrongdoer involved – upstream or downstream from VECO.

We’re in Special Session as the “fix-up crew.” We here to continue repairing the damage to the Foundation of Trust brought about by others. And that repair is underway.

Step One for repairing the Foundation of Trust started almost a year ago, when the good people of Alaska elected our new governor – a governor they could trust.

Now let me be clear about that. “Trust” and “agreement” are not necessarily the same. I trust my wife, and she trusts me, but I’m here to tell you we don’t always agree.

And I trust our new governor – but that doesn’t mean I have to agree with everything she does or doesn’t do. Trust doesn’t mean I have to agree with some of her vetoes, or recommended oil taxes, or anything else. In the words of President Reagan, “Trust but verify.” It’s a matter of checks and balances. So rebuilding trust started with election of a new governor.

Step Two in repairing trust was the passage of HB109, the governor’s omnibus ethics bill. Many of us, including both you and me Mr. Speaker, and many others, sponsored our own good ethics legislation, and we had hearings on those bills. But we rolled our individual ethics bills into the governor’s bill so no individual legislator could take credit for improving ethics laws.

In a manner of speaking, the omnibus ethics bill, passed by the legislature and signed into law by the governor, was sponsored by all of our constituents. So, Step Two in repairing the Foundation of Trust was improved ethics legislation, ands that was a very good thing.

This Special Session is Step Three in rebuilding the public trust. We are here to consider ACES – in plain language, oil taxes and other PPT modifications. Once again, this Special Session would not be happening had there not been bribery and corruption.

Now, let me tell you straight up, I support the concept of ACES, and I support the need to revisit oil taxes, and other PPT matters - without the taint of bribery, real or perceived. I should also tell you that, at this point, without the benefit of hearings and debate, and whatever else we may learn during this Special Session, my tax preference is probably between 22% and 25 percent.

Some would tax producers at 30, or 40, or who knows what percent. For some, greed has no limit. But at some point – and that point is debatable - we reach diminishing returns. At some tax rate, oil taxes would amount de facto state ownership of producer profits. Mr. Speaker, this is America. This is Alaska. This is not Venezuela.

The producers are not our enemy. Let me repeat that, the producers are not our enemy. We want to encourage their investments. That’s good business. We want to encourage exploration. That’s good business. The producers have done great things for Alaska, and I expect them to continue to do so. They’re good business people who have an obligation to bring maximum profit to their shareholders. Nothing wrong with that. That’s free enterprise, and I’m in favor of it.

But legislators also report to shareholders. We call our shareholders “Alaskans.” Our legislature has a Constitutional obligation to make sure we utilize Alaska’s natural resources for the maximum benefit of the people. That’s in the Constitution. And that’s also good business.

Alaska is at a turning point, both economically and politically. No doubt about that. Honest and tough negotiation can bring about the results we need – both for business and for Alaska. I’m an optimist. No one should be in the legislature unless they are an optimist!

In summary, Mr. Speaker, we’re here in Special Session to continue repairing the Foundation of Trust between Alaskans, and their elected and appointed officials. We have a new governor, we have much improved ethics legislation, and now we’re taking a needed new look at PPT with the governor’s ACES bill as a guideline. This is a turning point in Alaska history, and it’s a privilege to be one small part of the process."
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Amazingly, I was the only person in the House to address "the elephant in the room" i.e. the bribery and corruption scandals vis a vis the Special Session.