Murkowski to reprimand atty. general

Governor asks former U.S. attorney for advice on how to discipline Renkes

Posted: Thursday, January 27, 2005

Gov. Frank Murkowski said Wednesday he plans to issue a letter of reprimand to Attorney General Gregg Renkes for his role in a trade agreement in which he had a personal interest.

The governor also said he will propose legislation to strengthen the state's ethics laws.

Murkowski has asked former U.S. Attorney Robert Bundy to review the scope of disciplinary action that can be taken against Renkes. The governor said he will take into account Bundy's suggestions and also the corrective actions Renkes has already taken.

"It will be soon. I'm not going to drag this out," Murkowski told The Associated Press. "I anticipate within the next few days to have the recommendations from Mr. Bundy and shortly thereafter I will be addressing an action that I will make public."

Murkowski also said he has asked Bundy to draft a bill to set limits on how much stock a state employee can have in a company when dealing with that company officially. Alaska currently has no such standards written into law.

Bundy wrote a report released Tuesday that detailed the findings of his investigation into conflict of interest allegations against Renkes. The report concluded that Renkes was a player in an international coal deal that could have benefited him financially, but his personal stake was not large enough to be considered lawbreaking.

The report, however, found that Renkes should have halted his work in the negotiations between Taiwan and Alaska until an outside ethics determination was made. By failing to do so, Bundy wrote, Renkes broke the law.

Bundy wrote that the governor could take disciplinary action for the infraction but recommended a complaint not be forwarded to the state personnel board.

Renkes owned stock in KFx Inc., a Denver-based company with a patented coal-drying technology that he promoted as a way to make Cook Inlet coal more attractive to Taiwanese buyers. When news reports broke of his holdings in the company, Renkes sold his stock and donated the profits to charity.

Murkowski, who appointed Renkes to the job in 2002, said that will be considered when he issues his reprimand.

He said the reprimand will be added to Bundy's report, which has been submitted to the state personnel board as the board considers a complaint against Renkes filed by Democratic Rep. Eric Croft of Anchorage and former Wasilla mayor Sarah Palin, a Republican.

Murkowski, a Republican, said Croft should withdraw his complaint in light of Bundy's report.

Croft said he will not withdraw the complaint and that "the governor needs to take a very hard look at whether he should retain somebody who handles ethics so cavalierly."

The effect of the report, Croft said, is Bundy acting as Renkes' lawyer before the personnel board.

"This wasn't an in-depth investigation, this was a defense brief," Croft said.

Bundy was the U.S. Attorney for Alaska from 1994-2001. He is in a private practice in Anchorage and was hired by the governor's office to conduct the investigation.

The legislation Murkowski asked Bundy to draft would set a threshold for a state employee's level of personal investment in a company either by a dollar amount or by percentage of the company's outstanding shares.

Bundy said at a news conference Tuesday that he would advise drawing the line at the lesser of $10,000 or 1 percent of a company's outstanding shares.

"If you set it at $5,000, if you set it at $10,000, if you set it at a percent, then everybody knows what it is, so I'm not going to get hung up on a particular recommendation," Murkowski said.

At the time Renkes sold his KFx stock, it was valued at about $100,000.

Croft questioned the governor considering a limit that Renkes exceeded 10 times over just a day after Murkowski agreed that Renkes' holdings in KFx were insignificant.

"They can't have it both ways, can they?" Croft said. "Yesterday $100,000 was insignificant, and tomorrow $10,000 is inappropriate."

Murkowski said Renkes' stock value is not relevant in setting new criteria for the state.

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