This story has been updated with additional information about members of the public accessing the board’s executive session.
Accusations of threats, closed-door decisions and other improper actions by members of the Alaska Permanent Fund Corporation’s board of trustees during the past couple of years were raised during a combative special meeting of the board Wednesday following a leak of documents focusing on one member in particular.
The agenda for the meeting was about APFC’s security procedures involving confidential information, rather than the leak’s allegations of board Vice-Chair Gabrielle Rubenstein arranging meetings between APFC staff and her business associates, including her billionaire father David Rubenstein. Leaked emails also suggest she called for the firing of a Permanent Fund investment analyst her father was displeased with and that board chair Ethan Schutt will not be reappointed to his position when his term expires in June.
[Permanent Fund board calls special meeting Wednesday due to leaked emails alleging improper behavior]
But the discussion quickly focused on alleged improprieties, including suggestions of a wider pattern of such behavior by board members responsible for oversight of Alaska’s $80 billion savings account.
“I think we’re seeing some behavior that is direct communications with staff at a level we’ve never seen before and I think that that again is having some negative consequences in the sense of it’s making some of the managers feel a little undermined,” said Craig Richards, who was first appointed to the board in 2015 and has twice served as its chair. “And also that there have been probably some indirect threats about people…(making them) feeling threatened about their employment or their status with the company, which is why we’re seeing leaks.”
Richards said he’s seen “a large increase in the number of referrals that staff are getting from (some trustees) related to investments and investment managers” during the past 18 to 24 months. Such incidents “increased in volume to the point the staff is obviously feeling uncomfortable and that’s been communicated, and yet the behavior still occurred.”
Rubenstein, co-founder and managing partner of the investment company Manna Tree, was appointed to the APFC board in June of 2022 by Gov. Mike Dunleavy. She offered no comments during the public portion of Wednesday’s meeting, speaking only to second a motion related to going into executive session and casting votes on such related motions. In a statement issued last week she declared “I have always followed the Permanent Fund Board’s ethics rules and disclosure requirements.”
However, pushback to Richards’ comments was offered by some other board members, including two appointed to commissioners positions by Dunleavy. Adam Crum, commissioner of the Department of Revenue, challenged the claim about threats.
“Those threats occur in board meetings? I’m not actually familiar with that at all,” Crum said.
“Well that has been my observation,” Richards replied.
Jason Brune, who resigned last year as commissioner of the Department of Environmental Conservation, disputed a claim by Richards that “things are getting decided a little bit more behind closed doors.”
“I have never gotten together with folks behind closed doors outside of the Open Meetings Act,” Brune said. Also, “as far as threats to staff, absolutely not.”
The allegations were first publicly reported by the Alaska Landmine in late April, with owner Jeff Landfield declining to reveal who leaked a series of emails to him. Schutt, following an executive session at Wednesday’s meeting, stated “during the executive session the trustees received a few reports from staff about IT and we can confirm that we have had no external IT breach of our IT systems.”
However, later that day APFC issued a statement that members of the public had accessed the virtual executive session.
”The Alaska Permanent Fund Corporation (APFC) was alerted to the fact that the Board of Trustees’ executive session held during the May 8, 2024, Special Meeting was accessed by members of the public,” the statement notes. “APFC is concurrently assessing and conducting a forensic analysis of the compromised session.”
The Landmine, which received what it called extensive notes about the executive session from a person who observed it, stated the discussion focused largely on the source of the leaks and suspicions about specific individuals.
Schutt, just before ending the meeting, also said he was notified about staff’s concerns with Rubenstein in January, and he and other APFC officials have stated those concerns are being reviewed.
The virtual meeting, scheduled with only one day’s advance notice, did not include a public comment period since it was not required as part of a special meeting. However, at the urging of Schutt and some other board members the opportunity for public comment was officially added, although that proved ineffective since there were no in-person public attendees at the Juneau APFC office where some officials gathered and the opportunity for people to submit comments via the online chat system was belatedly added.
Schutt did read three emails sent by members of the public to the board before the meeting, all expressing concern using phrases such as “you’re actively working against Alaskans” and trust in the board is in “grave jeopardy.” Two called for Rubenstein’s resignation or removal.
Further investigation into the allegations against Rubenstein and the broader issues about APFC’s operations appears imminent, both by the board which has stated as much and potentially by state lawmakers.
Crum said he agrees with board members that it’s important for the board to scrutinize the matter to maintain public trust, but there are further considerations.
“We also have to work to establish the set of facts and the circumstances around that, as well find out what is the best way to protect the corporation and its interests going forward,” he said. In terms of confidentiality “do we have information, like a system breach, that we need to be concerned about and make sure that we’re protecting the state’s interests from an investment standpoint, as well as any future investors or partners we may have in the future?”
Richards said the allegations against Rubenstein “I presume will ultimately be handled through the state’s ethics process.” Sen. Bill Wielechowski, an Anchorage Democrat, said this week legislative hearings about the allegations are warranted.
Dunleavy, who has the authority to remove public board members for cause, said during a press conference last week “this is a discussion internally for the Permanent Fund board and that’s all I can say.”
• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.
