Alaska Permanent Fund leaders vote to hire law firm to investigate whistleblower and themselves

Updated: 1 an hour ago ^ Published: 7 Hours ago

The board of Alaska’s $80 billion trust has decided to hire an outside law firm to investigate who leaked internal emails suggesting board member Gabrielle “Ellie” Rubenstein may have engaged in self-dealing.

The law firm, whose hiring was approved unanimously by a 6-0 vote on Thursday, will also investigate interactions between Alaska Permanent Fund Corp. employees and members of the company’s board of trustees over six years to determine the extent of problems within the company.

The leaked internal emails, first published by Alaska Landmine in April, suggest Rubenstein arranged meetings between employees and her own business partners. In a message, Chief Investment Officer Marcus Frampton says: “I would note that a reasonable person looking at the facts here might question whether she is involved in any conflicts that cloud the independence of her positions here.”

In an editorial written after the publication of these emails, the Anchorage Daily News called on the fund to “divest” itself from Rubenstein, the daughter of billionaire David Rubenstein.

Rubenstein has said in prepared statements that she follows the fund’s ethics rules.

(Permanent Fund leaders defy Alaska legislation and keep their offices in Anchorage)

Jeff Landfield, owner of the Alaska Landmine and author of the article that made the emails public, said the Permanent Fund’s approach misses the mark.

“I think they should be more concerned with the substance of the allegations than with finding the source of the leak,” Landfield said Friday after the vote.

“There has been little discussion about their conflicts of interest and the statements of several employees. It is more about reacting rather than reflecting,” he said.

The Alaska Legislature, which has oversight authority, has not taken any substantive action. Rep. Cliff Groh (D-Anchorage) has requested a hearing of the Legislature’s Budget and Audit Committee on the issue.

Before Thursday’s vote, trustee Adam Crum, also commissioner of the Alaska Department of Revenue, said the Permanent Fund board must “find a way to grow back into a high-trust environment. And right now, we’re not quite there yet.”

Trustee Craig Richards said it was right for a trustee to appoint an outside lawyer to conduct the investigation.

“If the public perception is that we are not proactive both with regard to the leak and with regard to some of the concerns raised in the leaked materials, we will be in an even worse position litigation-wise,” he said.

In his speech on Friday, Crum said it was important for the trustees to understand how the emails became public because their employees handle billions of dollars worth of financial transactions.

“We have a lot of confidential deal flow information that cannot be leaked,” he said.

CEO Ethan Schutt said the law firm – which one has not yet been determined – would “independently investigate both the contents of the internal emails and how they may have leaked out of the company.”

Trustee Jason Brune, a former commissioner of the Alaska Department of Environmental Conservation and now a public servant on the board, suggested the company investigate contacts over the past six years because he remembers being warned about interactions between employees and board members when he became a trustee.

“There were significant concerns at the time about threats and contacts and lack of communication between staff and trustees. And of course this is an ongoing problem,” Brune said.

Brune said after the meeting that he believed the problems existed before Rubenstein or his arrival and that a “holistic review” would ensure that trustees address both current and past issues so that the board’s governance committee can address them.

Since Landfield’s article, the foundation’s board has been reviewing its governance – there are rules in place that block trustees and protect employees.

“This is not something we have ignored. We have talked about it, tried to address it and are trying to find the best way to do this,” Crum said.

Originally published by Alaska Beaconan independent, nonpartisan news organization covering Alaska state government.