June 12, 2017, was the 37th anniversary of the legislative coup toppling Juneau’s State House Representative Jim Duncan’s Democratic Majority Caucus. The Legislature had been at a standstill for about three weeks. The Bush Caucus, all Democrats, was unhappy with the share of the legislative pie the Majority was offering.
With all the cloak and dagger of a banana republic regime change, Republicans Rick Halford and Minority Leader Joe Hayes had secretly offered the Bush Caucus everything they wanted and they accepted.
While the Democrats were duking it out behind closed doors, we coup plotters wandered inconspicuously into the House Chambers.
I took my seat, and began counting arrivals while pretending to read a newspaper. Bush Democrats, one at a time, began excusing themselves from their closed caucus for snacks and bathroom breaks.
Anchorage Democrat Russ Meekins was the chair of House Finance and supported the Bush position. He was the highest House officer among us coup plotters, and therefore we agreed that he should take the Speaker’s chair and gavel. When Meekins walked in, we had 22 votes. I then went to the House Clerk’s office and told her she was needed to record events in the House Chambers.
Puzzled, she grabbed her note pad and headed to the House Chambers where Russ Meekins asked her to be seated. As I returned to the House Chambers, I told every page in sight they were needed in Chambers. I reentered and I locked the doors behind me. Russ Meekins pounded the gavel and ordered the pages to “Hold the doors closed.”
About halfway through the motions of removing Duncan and installing Hayes, we heard the screams of Fairbanks Democrat Sally Smith demanding we open the doors. Seconds later, the banging of shoulders against the doors. The doors bulged, and I was surprised they held. I sympathized with the young pages as they struggled pushing back against the doors, preventing the legislators who had given them their jobs from entering.
We finished our business, adjourned for the day, and opened the doors to a hallway full of outraged legislators and staff. I recall one reporter with an obvious bias pushing a microphone in Joe Hayes’ face and yelling “Do you really think you can get away with this?”
The tragedy was that the first bill Speaker Hayes wanted to pass was the reduced oil tax system known as ELF. It had passed the Senate but was dead in the House until Hayes seized the helm.
I was planning to vote against ELF until Speaker Hayes seemed near tears arguing for my vote. Then, Revenue Commissioner Tom Williams, who for the past three decades has worked for BP, assured me that ELF would be revenue neutral and would create a lot of jobs.
The President of BP-owned Sohio also pled poverty in teleconference testimony. (Sohio was the face of BP in Alaska at the time.)
ELF passed with 22 votes, one more than required, mine included. Of the few votes I regret, it is the one I regret the most. Jay Hammond shared my regret. He also was persuaded to sign the bill by Williams. Hammond later said signing ELF was his biggest mistake.
Six months after adjournment, I acquired a memo in which Sohio Chairman Alton W. Whitehouse said “all the numbers are large at Sohio these days because the company’s assets have risen rapidly from less than one billion dollars before it started its Alaskan venture to $9 billion now.” He gave income tax expense, as an example, reporting “income tax expense was up sharply by 301 percent for 1979, rising to $891 million from $222 million in 1978.”
I had been duped. My estimate is that ELF cost Alaska $100 billion. Had ELF never passed, and the additional revenues been deposited in Alaska’s Permanent Fund, it would be five times the size it is today. Revenue from earnings could easily provide an annual dividend of $5,000 and fund government at a handsome level for the next hundred years.
Feeling responsible, I’ve made it my mission to educate Alaskans on oil tax and expose oil’s corrupt influences on our legislators.
• Ray Metcalfe is an Anchorage real estate broker, former U.S. House of Representatives candidate, and former Alaska legislator.
