Governor battles oil industry, wins approval of AGIA

Palin says indictments came at 'right time'

Posted: Friday, May 18, 2007

Gov. Sarah Palin and the state's oil industry faced off on two big bills in the legislative session that stretched to deadline Wednesday night. They each won one and lost one.

Palin's signature piece of legislation, the Alaska Gasline Inducement Act, won final approval; but a bill she pushed to bar companies from a tax break for fixing improper maintenance failed.

Palin said she never doubted AGIA, her plan to encourage construction of a natural gas pipeline, would pass.

"I knew it was going to be fine," she said.

Palin acknowledged some dicey moments. The big North Slope oil producers presented a united front against her plan, while some legislators wavered.

Then two Fridays ago, one current and two former representatives were indicted on bribery charges. They included Rep. Vic Kohring, R-Wasilla, chairman of the House Special Oil and Gas Committee.

The following Monday, two oil company executives pleaded guilty to offering those bribes, and AGIA won House and Senate approval.

"The indictments came at just the right time," Palin said.

AGIA then stalled again, however, still needing final technical approval of the combined House and Senate versions. It didn't pass until the final day of the session.

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"AGIA got caught up in the end-of-session shenanigans, but finally passed in much the form Palin wanted," said Rep. Mike Doogan, D-Anchorage.

Kohring, released from federal custody on $20,000 bond, resumed service in the Legislature but was stripped of his chairmanship.

During subsequent votes on AGIA, Kohring left the floor, though he did not have excused absences.

That kept fellow Republican legislators out of a bind. Had Kohring declared a conflict and asked to be excused from voting, they would have had to decide whether to object and force him to vote.

Democrats had earlier called upon Republicans not to force Kohring to vote.

Another oil bill, which would have prevented oil companies from deducting the cost of improper maintenance on North Slope oil fields, failed to pass.

It passed unanimously in the Senate and was co-sponsored by more than half of the House, but it couldn't get out of the House Finance Committee for a floor vote.

"That was a frustration," Palin said.

Sen. Kim Elton, D-Juneau, said he, too, was frustrated that a bill with bipartisan support and a 20-0 vote in the Senate couldn't make it to the House floor for a vote.

"I don't know why it didn't get all the way through. It should have," he said.

Palin's legislative liaison, John Bitney, couldn't explain why it couldn't get out of the House Finance Committee either.

"You'll have to ask Mike Chenault," he said. Chenault is co-chairman of the committee. He has not returned calls on the issue.

Palin said addressing the deductions bill might be a topic for a special session on oil taxes.

The Alaska Gasline Inducement Act is House Bill 177. The deductions bill is Senate Bill 80.

• Pat Forgey can be reached at

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