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State regulators fine opponents of proposed Pebble Mine

Alex DeMarban
Stephen Nowers illustration

Saying a "strong deterrent" is necessary to prevent future abuses, the state's campaign watchdog agency fined an aviation firm owned by anti-Pebble mine billionaire Bob Gilliam $25,500 for violating campaign finance laws.

As part of the decision issued Friday, the Alaska Public Offices Commission also fined two members of the Lake and Peninsula Borough Assembly, who accepted rides from RBG Bush Planes to campaign in villages during two multi-day trips in September 2010.

The two candidates should have paid commercial rates for the flights but only paid for their portion of the gas costs, the commission said. As a result, they each paid hundreds of dollars less than they should have and violated laws associated with in-kind contributions.

The five-member bipartisan panel fined Nana Kalmakoff and Michelle Ravenmoon $6,700 apiece. The fines can be forgiven if they complete an APOC training course on campaign disclosure within six months and meet other obligations, including paying their full share of the flights within six months.

The fines revolve around the long-running feud over development of the massive Pebble copper, gold and molybdenum prospect in Southwest Alaska. Gillam, a fishing lodge owner in that Bristol Bay region, has spent heavily to influence public opinion against the proposed mine.

In its decision, the commission notes that Gillam is "no stranger" to APOC and that he and his companies should be considered "sophisticated" participants well aware of campaign finance rules.

In spring 2010, Gillam and entities associated with him -- Alaskans for Clean Water and the Renewable Resources Coalition -- agreed to pay the commission $100,000 in a settlement related to a citizens' initiative and alleged violations involving an advertising campaign targeting Pebble.

That settlement came about six months before RBG offered the "heavily subsidized transportation" to the candidates. As part of the settlement, Gillam agreed to henceforth comply with all APOC statutes and regulations.

RBG contends that it followed the law, and the commission ignored its own previous opinion that required the candidates to merely pay for their share of the gas. In a press release, Art Hackney, a spokesman for Gillam, said the company will appeal APOC's "flawed" decision to the Alaska Superior Court.

Hackney said in the release that the decision, if allowed to stand, will restrict future air travel for candidates if they must always pay commercial rates for campaign flights in a huge borough that lacks roads between villages.

Candidates who own airplanes will have an advantage, he noted.

"This decision sends a chilling message to Rural Alaskans throughout the state that only the very rich can run for office," he said. 

What is RBG?

Anchorage-based RBG Bush Planes bears Robert B. Gillam's initials. It's a holding company, not a business concern, the commission noted in its ruling. The aircraft in which the candidates flew -- two Piper Navajo Chieftans and a DeHavilland Beaver -- are based at Anchorage International Airport at a hanger owned by Gillam. When he's not flying the planes, they're flown by salaried employees of McKinley Capital Management.

Gilliam is CEO of McKinley, which last year earned about $5 million to manage more than $1 billion of Alaska's investments, including a portion of the Permanent Fund.

The campaign arose in connection with George Jacko, a former state legislator and independent contractor employed by Gillam to educate communities about dangers posed by the Pebble prospect, in Gillam's view. Some residents in the region fear pollution from the mine will threaten the Bristol Bay wild sockeye salmon fishery, the largest such commercial fishery in the world.

Jacko asked Gillam if he could fly the candidates on RBG planes to villages in the region, the commission said. After talking with a lawyer, Gillam "gave permission for the candidates to accompany Mr. Jacko on the flights."

The commission also found that Gillam hired a McKinley Capital employee to track the fuel costs, since he believed that is what a noncommercial aircraft owner must charge.

In arguments filed with the commission, statements from RBG lawyers with Holmes Weddle and Barcott had argued that a past APOC decision required only that the candidates pay for their share of the gas, similar to a hitchhiker who picked up a ride between Anchorage and Fairbanks.

But the commission's decision says that is incorrect: The 2006 advisory opinion requires that the campaigning candidates must pay commercial rates for their flights.

The commission said that it ignored some flights in calculating what the candidates should have paid, because it could not determine if campaigning occurred in association with those flights.

Two of the 13 flights that the commission reviewed, between Chignik Lake and Chignik Lagoon in early September, were made solely for the sake of Kalmakoff, the commission found.

That seems to contradict statements by RBG and Jacko that the candidates had no say over the planes' routes.

If the candidates had paid chartered rates in such cases and for scheduled-flight seats in other areas, they would have owed hundreds of dollars more than they actually paid RBG, the commission decided.

Ravenmoon paid RBG $352 for the flights analyzed by APOC. She owes an additional $789. This in-kind contribution pushed her total contributions from the campaign over $5,000, which she promised not to exceed to avoid certain reporting requirements.

Kalmakoff paid RBG $1,185. She owes an additional $360, the commission decided.

The commission also may require that RBG pay APOC costs associated with the investigation. APOC staff brought the complaint against RBG Bush Planes.

Hackney, Gillam's spokesman, also criticized the commission's decision because the hearing relied on testimony from Lake and Peninsula Borough Mayor Glen Alsworth, who "actively campaigned against the defendants" and "opposed the election of the two candidates." Alsworth owns several planes through Lake Clark Air, which operates in the region.

Alsworth, reached by phone in the village of Port Alsworth in Southwest Alaska, where he lives, said he did not "oppose the election of any candidates." He acknowledged that he told APOC about the flights last year, which led to the investigation.   "I only questioned the fact that Gillam could use his unlimited resources to influence local elections and not have to report it," Alsworth said. "Apparently, APOC agreed with me."

The commission heard the case on Dec. 1. 

(Correction: An earlier version of this article incorrectly said that Bob Gillam's RBG aviation firm was a repeat offender. RBG is not a repeat offender of APOC rules. Neither is Bob Gillam, who was not a defendant in this complaint. The 2010 settlement involving APOC, Gillam and other parties did not constitute an admission or acknowledgement of wrongdoing, according to the settlement's language.)

Contact Alex DeMarban at alex(at)alaskadispatch.com