How Sarah Palin busted Alaska crony capitalism

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Kimberly Strassel of the Wall Street Journal describes in depth how Sarah Palin, first as an oil and gas commissioner and then as Governor, busted up an insider sweetheart deal involving a natural gas pipeline from Alaska to the lower 48. Here's the heart of the story:

And so it came as no surprise in 2004 when former Republican Gov. Frank Murkowski made clear he'd be working exclusively with three North Slope producers--ExxonMobil, ConocoPhillips and BP--to build a $25 billion pipeline to move natural gas to the lower 48. The trio had informed their political vassals that they alone would build this project (they weren't selling their gas to outsiders) and that they expected the state to reward them. Mr. Murkowski disappeared into smoky backrooms to work out the details. He refused to release information on the negotiations. When Natural Resources Commissioner Tom Irwin suggested terms of the contract were illegal, he was fired.

What Mr. Murkowski did do publicly was instruct his statehouse to change the oil and gas tax structure (taxes being a primary way Alaskans realize their oil revenue). Later, citizens would discover this was groundwork for Mr. Murkowski's pipeline contract--which would lock in that oil-requested tax package for up to 40 years, provide a $4 billion state investment, and relinquish most oversight.

Enter Mrs. Palin. The former mayor of Wasilla had been appointed by Mr. Murkowski in 2003 to the state oil and gas regulatory agency. She'd had the temerity to blow the whistle on fellow GOP Commissioner Randy Ruedrich for refusing to disclose energy dealings. Mr. Murkowski and GOP Attorney General Gregg Renkes closed ranks around Mr. Ruedrich--who also chaired the state GOP. Mrs. Palin resigned. Having thus offended the entire old boy network, she challenged the governor for his seat.

Mrs. Palin ran against the secret deal, and vowed to put the pipeline back out for competitive, transparent, bidding. She railed against cozy politics. Mr. Murkowski ran on his unpopular pipeline deal. The oil industry warned the state would never get its project without his leadership. Mrs. Palin walloped him in the primary and won office in late 2006. Around this time, news broke of a federal probe that would show oil executives had bribed lawmakers to support the Murkowski tax changes.

Among Mrs. Palin's first acts was to reinstate Mr. Irwin. By February 2007 she'd released her requirements for pipeline bidding. They were stricter, and included only a $500 million state incentive. By May a cowed state house--reeling from scandal--passed her legislation.

The producers warned they would not bid, nor would anyone else. Five groups submitted proposals. A few months before the legislature awarded its license to TransCanada this July, Conoco and BP suddenly announced they'd be building their own pipeline with no state inducements whatsoever. They'd suddenly found the money.

Mrs. Palin has meanwhile passed an ethics law. She's tightened up oil oversight. She forced the legislature to rewrite the oil tax law. That new law raised taxes on the industry, for which Mrs. Palin is now taking some knocks, but the political background here is crucial.

I'm excited at the thought of having this kind of energy and passion for what's right at work on behalf the entire nation, not just Alaska. I'm hopeful that Palin's actions in this case become a model for politicians of every level, ever party, in every part of the country. If this kind of reform can launch Palin to the second highest office in the land, perhaps aspiring pols will decided that busting up the Good Ol' Boys is a better strategy for advancement than becoming one of them.

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2 Comments

Bob said:

Lasting reform is very, very hard to sustain in government.

Remember, the 1994 Republican Revolution was swept into office giving the GOP the House of Reps and the Senate on the clarion call of:

REFORM.

It took a mere 12 years for the Republican brand to become tarnished, due to an inept President who couldn't say know to higher spending, and a Earmarkful, corrupt GOP-controlled Congress.

And, rest assured, the Democrat Congress is even worse, with an approval rating of below 20%.

The brother of crime boss and fugitive hitman Whitey Bulger was former Massachusetts Senate Majority Leader William "Billy" Bulger. A state judge once referred to him as the "Corrupt Dwarf".

Brother Billy then had the state budget zero out appropriations for the Judge's office.

Brother Billy, who got his start in Boston politics as a political hack and coat holder, had a favorite saying:

"Reformers NEVER come back".

Hitman Whitey had a saying, too:

Dead men tell no tales.

After retiring from the State Senate, he rolled into a highly lucrative job as the Chancellor of Massachusetts State University System.

Until he became an embarrasment after it was learned in testimony concerning corrupt FBI ties to the Boston Mafia that Brother Billy had neglected to inform the law enforcement authorities when phoned by fugitive killer brother Whitey.

The state paid Billy a $1,000,000 as incentive to immediately resign.

Billy's career in politics paid much better than fugitive brother Whitey' life of crime.

P.S. The FBI recently doubled the reward on fugitive Whitey Bulger.

Whitey ordered the professional hit on local Telex millionaire Roger Wheeler. Shot on the parking lot of SHCC in broad daylight.

AK Resident said:

The Alaska-Centric Palin Book…

Sarah takes on Big Oil: The compelling story of Gov. Sarah Palin's battle with Alaska's 'Big 3' oil companies, as told by the state's top oil and gas editors

“Sarah takes on Big Oil” is a book about Alaska Gov. Sarah Palin and her battle with the state’s three largest oil producers—ExxonMobil, BP and ConocoPhillips.

A 216-page hardcover, “Sarah takes on Big Oil” is being released Oct. 12 by PNA Publishing, an affiliate of Petroleum News, an independent news-driven weekly newspaper based in Anchorage, Alaska.

The authors, Kay Cashman and Kristen Nelson, are uniquely qualified to tell the story of Palin’s dealings with the oil industry, and the unusual circumstances that bracketed her unprecedented rise to power.

Cashman, publisher and executive editor of Petroleum News, is a people person. She knows the people in Palin’s story, and they know her as someone who can be trusted with sensitive information.

Nelson, editor-in-chief of Petroleum News, has a long record of covering the State of Alaska’s interaction with the state’s most lucrative industry.

Cashman and Nelson bring a perspective to Palin’s story not available to general news reporters that makes for lively, but factual reading.

“Sarah takes on Big Oil” includes an 8-page color insert with photos of Alaska’s oil industry by noted Alaska photographer Judy Patrick, a personal friend of Sarah Palin and Kay Cashman.

PRESS AVAILABILITIES: Book cover and jacket images, and photos of Cashman and Nelson, and book collaborators Steve Sutherlin, Candice Ngo and Amy Spittler are available at www.sarahtakesonbigoil.com.

Anchorage press contact and book collaborator: Steve Sutherlin steve@petroleumnews.com
Washington D.C. press contact and collaborator: Candice Ngo cango@petroleumnews.com
London press contact and book collaborator: Amy Spittler aspittler@petroleumnews.com

PNA Publishing is a division of Petroleum Newspapers of Alaska LLC.

Sarah takes on Big Oil: The compelling story of Gov. Sarah Palin's battle with Alaska's 'Big 3' oil companies, as told by the state's top oil and gas editors
Kay Cashman and Kristen Nelson

ISBN 978-0-9821632-0-7 (hardcover)
Printed in the United States of America by RR Donnelly
First Edition Printing October 2008

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This page contains a single entry by Michael Bates published on September 6, 2008 12:55 PM.

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