The state has reached a settlement with GOP Chairman Randy Ruedrich on charges that he violated state ethics law while working as a member of the Alaska Oil and Gas Conservation Commission.
Ruedrich admitted to three violations of the state Ethics Act and has been fined $12,000 - believed to be the largest civil penalty ever imposed in a state ethics case, according to the attorney general's office.
Chief Assistant Attorney General Barbara Ritchie, who headed the investigation, said her office had two requirements for settlement: that Ruedrich admit his conduct violated the Ethics Act and that he pay substantial civil penalties.
"We negotiated a settlement that satisfies both of these goals," she said in statement Tuesday night.
Ruedrich could not be reached for comment.
The Republican Party of Alaska chairman, who received a vote of confidence at his party's state convention in May, admitted to three violations:
Misuse of official position by engaging in partisan political activity in his Alaska Oil and Gas Conservation Commission office.
Improper disclosure of confidential information to a third party without authority. Ruedrich forwarded a confidential attorney-client privileged e-mail and attachment to attorney Kyle Parker, who represented Evergreen Resources on matters pertaining to methane gas development in the Matanuska-Susitna Borough.
Incompatible outside voluntary service for the Republican Party of Alaska by acting contrary to the manner he said he would in his Ethics Act disclosure statement.
Ruedrich was fined the maximum $5,000 for the first two violations and $2,000 for the third. The fine has been paid, state documents said.
The state agreed not to pursue a fourth charge against Ruedrich, that accused him of carrying out his voluntary Republican Party service in a manner inconsistent with his duties as a state supervisor.
In addition to the civil fines, Ruedrich agreed that he will not accept a job with the state as long as he holds any office in a political party or group.
State investigators acknowledged that they found no evidence that Ruedrich used his position as commissioner to raise money for partisan politics.
Ruedrich took over as unpaid chairman of the Republican Party in June 2000.
Ruedrich was appointed to the oil and gas commission in February 2003 by newly elected Gov. Frank Murkowski. The commission job paid $118,000 per year.
Ruedrich said at the time he would continue political work on behalf of the Alaska Republican Party, but on his own time, and that he would focus on federal politics.
Ruedrich resigned from the commission in November a few days after the attorney general's office initiated the investigation based on a complaint from the commission chairwoman, Sarah Palin, that he engaged in party business at his state office.
Until Tuesday, Ruedrich had admitted no wrongdoing other than improperly sending the confidential e-mail. He said he did not realize it had been marked confidential until after he sent the memo.
The oil and gas commission is a quasi-judicial regulatory agency that oversees underground operations of the state's oil industry on private and public lands and waters.
Ruedrich has a doctorate in chemical engineering and had worked in the oil and gas industry for more than 30 years. In Alaska, he worked for ARCO as a senior drilling engineer and was general manager of Doyon Drilling.
However, his appointment to the oil and gas commission brought immediate cries of conflict of interest by Alaskans who said he would be regulating the same industry from which his party had obtained substantial donations.
Democrats on Tuesday night said they were as concerned with Gov. Murkowski's next move as they were with details of the settlement.
"I want to know if the governor is going to excuse this serious ethics breach from a member of his administration, and I'm curious as to what steps he intends to take," said House Minority Leader Ethan Berkowitz, D-Anchorage.
"I look forward to some sort of public statement from the governor acknowledging that he made a serious lapse of judgment in appointing a man like Mr. Ruedrich to a position of trust and then excusing what has clearly been acknowledged as unethical conduct," Berkowitz said.
Berkowitz and state Sen. Hollis French, D-Anchorage, both had called for an independent prosecutor to look into Ruedrich's conduct. French said he was disappointed in the settlement.
"As a former prosecutor, it was not my practice to settle good cases," he said.
He said there was plentiful evidence indicating Ruedrich's ethics violations. French said he still believed an independent prosecutor was in order.
"You have to ask whether the governor's defense of Mr. Ruedrich had any bearing on the department's decision to settle the case," he said.
"Which trooper investigated this case?" he asked. "Who exactly did the forensic examination of his computer? Who did the forensic examination of the documents? ... I think the answer may be nobody."
Palin expressed surprise that an agreement had been reached and said she had been told by the Department of Law last week that a settlement could be weeks or months away.
She had no immediate reaction to the terms.
"It's appropriate that the Department of Law did take this seriously," she said. "It took a long time, it seems, for the wheels to start turning in terms of when I first started talking to Randy about the conflict of interest."
She said there was evidence of Ruedrich's conflict from "Day One."
She said fellow Republicans would probably be upset she said it, but critics of Ruedrich's appointment to the commission, including Berkowitz and French, were right.
"Ethan Berkowitz, Hollis French, those guys were right at the beginning, and those who were bold enough to say this in the party," she said.