APOC rejects settlement for ballot initiative

Case was filed by companies trying to develop Pebble Mine

Posted: Sunday, October 18, 2009

ANCHORAGE - The Alaska Public Offices Commission has rejected a $35,000 payment proposed to settle allegations of campaign violations during a ballot fight last year over mining rules.

The proposal Thursday called for the payment from Anchorage businessman Bob Gillam, political consultant Art Hackney and other individuals and organizations backing Ballot Measure 4, an effort to create stricter rules for water-pollution discharges for large mines.

The APOC enforces state law on the publishing of financial information regarding the activities of election campaigns.

The case against Gillam, Hackney and the others was filed by the companies trying to develop the Pebble Mine and by the Resource Development Council, an Anchorage-based industry group.

The campaign was the state's most expensive election battle ever, with the two sides spending $12.5 million total to influence the vote.

APOC investigators accused Gillam and the others of conspiring to hide a large portion of Gillam's multimillion-dollar contributions.

Voters in August 2008 rejected the proposed law, which could have been used to block development of the Pebble copper and gold deposit in southwest Alaska.

APOC staff at first suggested that the commission consider forwarding the case to the state attorney general for criminal prosecution. By Thursday, however, the staff was recommending the case instead be settled for $35,000 with no one admitting guilt.

Jack Dunnagan, an attorney for the Pebble Partnership and the development council, said that would be a mere "slap on the wrist" and would send a bad message. If the APOC had followed original staff recommendations and levied maximum fines, Dunnagan said, Gillam and the others would have had to pay at least $350,000 in combined penalties.

An APOC attorney said the amount would have been $174,000.

Attorneys for Gillam and the others defended the proposed settlement. They estimated that the expense of litigating the case would exceed the penalties. They also said the litigation could go on for years.

Commission Chairwoman Elizabeth Hickerson questioned whether it would take that long to air legal issues in the case. The proposed settlement, she said, did not resolve the significant legal issues.

Hickerson after the meeting announced the commissioners' decision: settling the case was not in the public interest at the time.

She said the APOC staff and the pro-initiative side can propose a settlement after the commission rules on pending motions. Those rulings could come by mid-November.

APOC staff also has proposed fines be paid by two pro-mining groups that campaigned against Measure 4. They are accused of failing to file timely reports.

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