Millions for billions

Political alchemists practice turning cash into influence

Posted: Friday, February 16, 2007

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Billions of dollars were at stake, and lobbyists spent millions of them last year trying to influence the Petroleum Profits Tax, the gas line and other issues before the Alaska Legislature.

Lobbyists spent more than three times as much to sway public policy in 2006 as they did the year before, according to preliminary figures from the Alaska Public Offices Commission, which tracks lobbying activity for the state. The figure doesn't include lobbyists' salaries.

That spending jumped from $2.7 million the previous year to nearly $9 million in 2006. It covers activities such as issue advertising and receptions for lawmakers.

The vast bulk of the money came from the oil industry, said Brooke Miles, executive director of the commission.

Those in the industry say that the numbers are to be expected, given what was at stake with a gas line deal that foundered, a Petroleum Profits Tax that passed and the gas reserves tax that made it to the ballot, but then failed.


"I think our activity level matched the importance of those issues," said Daren Beaudo, spokesman for BP-Alaska.

"Certainly 2006 was a very important year for BP and BP shareholders," he said.

Judy Brady of the Alaska Oil and Gas Association agreed that last year was almost unprecedented in terms of lobbying activity.

"There was probably more heavy-duty action focused on oil and gas last year than there ever had been since the oil pipeline was built," she said.

Brady estimated there was $60 billion on the table last year in the combined value of various issues before the Legislature.

BP is the biggest producer of North Slope oil and was the biggest spender on lobbying. It spent more than $4.7 million last year, almost half the total.

The figures take into account what companies pay for expenses other than lobbyists' salaries. For BP, that included hundreds of thousands of dollars on issue advertising and travel to Juneau for experts to answer lawmakers' questions.

It also included $17,966 for a gas pipeline booth at the Alaska State Fair.

BP rented five apartments in Juneau. It brought in administrative employees from Anchorage and oil field roughnecks from Prudhoe Bay to bolster the company's presentations before lawmakers.

Beaudo said the effort enabled the company to show legislators what impact their actions would have on real people.

Brady said that even the oil company's professional lobbyists are mostly Alaska-based company employees, many born and raised in the state, who can communicate with legislators.

During the year, salaries for all lobbyists rose from $13.4 million to $15.9 million.

Brady said that was an indication that industry lobbyists are mostly the same people who have dealt with the Alaska Legislature for years, not high-powered lobbyists from Outside.

"This wasn't gunslinger lobbyists pressuring anybody," she said. "These were all Alaskans, all people the legislators know."

Rep. Les Gara, D-Anchorage, said the outcome of the sessions last year show the industry got its money's worth in what it spent on lobbyists.

The new oil tax, while an increase over past years, is about $1 billion less than the average worldwide tax rate, he said.

Beaudo called last year "mixed" for BP. The company was disappointed that it wasn't able to get approval for a gas line contract, but it did manage to persuade voters not to adopt the gas reserves tax.

The Petroleum Profits Tax was adopted, but BP doesn't like the rate, he said.

"We think the tax is too high," he said. "We think the structure has merit, but a better model is a low tax regime, not the regime we have."

Industry pours money into lobbying

Lobbyist Individual Lobbying

Year salaries expenses expenditures

2005 $13.44 million $581,942 $2.73 million

2006 $15.87 million $1.30 million $8.99 million

Increase 18.1% 123.6% 229.4%

Note: Individual expenses include airfare, etc. Lobbying expenditures include the cost of receptions, advertising, etc.

Source: Alaska Public Offices Commission

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