Posted: Wednesday, March 15, 2006

Blind trust provision back in ethics bill

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JUNEAU - A disputed ethics bill is headed to the Alaska House floor after a committee on Tuesday reinserted the use of blind trusts by state employees.

The bill now says there is no conflict of interest if a state employee conducts official business with a company that he has a significant financial interest in, if that financial interest is held in a blind trust.

In a blind trust, a person's assets are transferred to a bank or manager and the person has no control over it.

The changes by the House Rules Committee include a provision that says the Alaska State Personnel Board can order, in addition to other penalties for conflict of interest, a blind trust be established for a state employee.

But the committee stopped short of including a provision where if a conflict is found, the employee's supervisor could order that employee's financial holdings be placed in a blind trust instead of being reassigned duties or selling his holdings.

The last provision was the most troublesome, said House Minority Leader Ethan Berkowitz, D-Anchorage.

"The part where it says, 'Oops I've got a conflict and I can put it in a blind trust,"' Berkowitz said. "They were trying to create a loophole for blind trusts. We took away that possibility."

House Finance releases state budget draft

JUNEAU - The House Finance Committee on Tuesday introduced its draft of next year's state operating budget, cutting Gov. Frank Murkowski's spending plan by 4.5 percent.

The committee will take public testimony for the rest of the week on the proposed budget for fiscal year 2007, which begins July 1.

House Finance co-Chairman Mike Chenault, R-Nikiski, said he expects the committee to hear amendments to the budget on Monday and he plans to have it on the House floor by the last week of March.

The House Finance budget takes Murkowski's $2.6 billion general fund spending plan and cuts it by $115 million, according to a comparison of the two budgets by the Legislative Finance Division.

"This comparison assumes that the committee will eventually appropriate $90 million more for K-12 education. Language making that appropriation is not currently in the committee substitute," Chenault said.

That $90 million education money is contingent on the Legislature passing a separate bill that increases the public schools' base student allocation by that amount.

The biggest cuts the committee made to the governor's budget plan are in the Department of Commerce, Community and Economic Development, whose budget was cut by 5 percent, and to the Department of Transportation and Public Facilities, whose budget was reduced 4.4 percent.

BP: Small leak caused by corrosion

JUNEAU - Inspectors at BP Exploration Alaska were aware of corrosion in a pipeline that was the source of a massive North Slope oil spill, but they did not expect it would advance as quickly as it did, oil industry officials said Tuesday.

An inspection last fall revealed corrosion in the line and led officials to step up their schedule of inspections, said Maureen Johnson, BP Exploration Alaska's senior vice president of the Greater Prudhoe Bay Unit.

The largest oil spill in Prudhoe Bay history covers two acres of remote and frozen tundra on Alaska's north coast near the Beaufort Sea. As of Monday, crews battling frigid conditions - temperatures were 44 below zero Monday - had recovered about 60,000 gallons of an estimated 201,000 to 267,000 gallons of spilled crude.

Johnson said corrosion was seen in the 34-inch oil transit line in a September inspection but it appeared to be occurring at a "low manageable corrosion rate."

However, spill investigators found significant damage - especially in low spots of the pipe - that likely occurred within the last six to nine months.

TCC delegates look for new leadership

FAIRBANKS - Delegates attending the Tanana Chiefs Conference's annual convention will be selecting a new president who can lead the company through the coming years of declining state and federal dollars.

Five people are running for the top spot. The winner of Thursday's election to replace Harold "Buddy" Brown will take over a nonprofit with an $80 million annual operating budget, which has not been enough to cover growing costs and demands for health care and other services.

The dropping funds are a clear sign that the federal government is not living up to its treaty promises to provide for the health and education of Alaska Natives and American Indians, said Orie Williams, president of Doyon Ltd.

"In the last 15, 20 years federal funding hasn't increased," he said.

The TCC delegate convention and full board meeting starts Tuesday and runs through Thursday.

Brown announced his resignation in February so he could concentrate on his cancer treatments and family. Brown has been fighting the disease since October 2004. The cancer briefly went into remission but returned last year. He is expected to participate in the convention.

Candidates for president are Shirley Holmberg, Jerry Isaac, Will Mayo, Mike Smith and Jim Stevens. Mayo is a past TCC president and Isaac is the current vice president. Smith works for TCC and Stevens is an Anchorage businessman who grew up in Fairbanks. Holmberg is a rural development studies student at the University of Alaska Fairbanks.

Fairbanks area mayors balk at reroute

FAIRBANKS - Fairbanks area mayors are asking the Alaska Railroad Corp. to eliminate all train traffic through the Fort Wainwright Army Post and the city.

The railroad, meanwhile, is advancing a plan to eliminate train travel through the post by laying track around the perimeter of the base.

Railroad President Patrick Gamble says it is possible that both could eventually be built.

The options are the result of five years of planning by the railroad with input from local governments and a volunteer committee. The plan was focused on improving track in, around and between the cities of Fairbanks and North Pole.

Recently, railroad officials learned they will receive money from the Department of Defense to reroute track around the northern and eastern boundaries of Fort Wainwright. The track currently bisects the post and Gamble said Defense officials have expressed concern that freight and passenger trains run directly through a military installation.

Gamble said rerouting track around the base will eliminate between 20 and 30 road crossings while improving a 19-mile stretch of track.

But the mayors of Fairbanks and North Pole, as well as the Fairbanks North Star Borough, worry the railroad's pursuit of the Wainwright option means the corporation will not spend money on their preferred option to eliminate rail crossings in Fairbanks' urban areas.

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