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Legislature confirms Rabinow to gasline corporation board

By Rhonda McBride 10:11 AM April 18, 2014
JUNEAU –

Confirmation hearings for the governor’s appointments to state boards and commissions, as well as to the executive branch, are an annual rite of passage at the state Capitol in Juneau.

The governor appoints and the Legislature confirms; an important check and balance in state government.

The Legislature occasionally rejects an appointment, as it did with Wayne Anthony Ross, who was tapped as attorney general by Gov. Sarah Palin in 2009.

But on Thursday, a joint session of the Legislature approved all of Gov. Sean Parnell’s appointments, including one of the most controversial — that of Richard Rabinow, the Texan the governor named to the Alaska Gasline Development Corporation board.

Earlier this week, lawmakers passed a bill to make it legal for Rabinow to serve on the AGDC board. A conflict between state statutes and the Alaska Constitution made it unclear whether an out-of-state resident could serve on the AGDC board. The bill, which the governor has already signed into law, now makes a nonresident appointment legal.

Even so, Democrats fought to block Rabinow’s appointment during the hearings.

Rabinow is from Houston, Texas and has had a long career with ExxonMobil heading up its pipeline company.

Rep. Chris Tuck, the House minority leader, cracked a joke about Rabinow’s residency.

“You see Houston. Don’t be confused,” he said. “That’s not Houston, Alaska. That’s Houston, Texas.”

Tuck, however, was serious in his opposition to Rabinow serving on the AGDC board.

“It just looks questionable,” Tuck said. “We’re talking about Alaska’s future. Making sure these board appointments are Alaskans is an additional firewall in protecting Alaskans’ best interests.”

Sen. Hollis French, the Senate majority leader, called Rabinow’s appointment a conflict of interest.

“He’s spent nearly his entire professional career for one oil company,” French said.

Democrats have said Rabinow shouldn’t be on the board of a state corporation which will be playing a key role in developing a liquefied natural gas project in partnership with ExxonMobil. Two other oil producers, ConocoPhillips and BP, as well as TransCanada, a pipeline building company, are the state’s other partners in a project with a price tag ranging between $45-$65 billion. One of AGDC’s main jobs will be to make sure gas is available for in-state use as well as export.

French said he didn’t see why Exxon should get 25 percent of the project and a seat on the AGDC board.

“I don’t think they should get 20 percent of the board positions on the Alaska Gasline Development Corporation board,” French said.

Others like Sen. Bill Wielechowski, an Anchorage Democrat, questioned whether the governor really needed to look outside the state to fill the vacancy.

“To say that we don’t have expertise in this state, to find one Alaskan who can serve on this board, I think that’s insulting to the people of this state,” Wielechowski said.

Barrow Democrat Ben Nageak said he knows firsthand how outside expertise can make all the difference, as it did for his own Alaska Native corporation.

“If they hadn’t hired these people from outside, I don’t know where we’d be today,” said Nageak, who told lawmakers the outside experts helped to groom a generation of local leaders.

Other Rabinow supporters talked about how the rest of the AGDC board believes the governor made the right call, especially the chairman, former Attorney General John Burns.

“Mr. Burns has said Mr. Rabinow exemplifies why we allow out-of-staters to be serving on the AGDC board,” said Rep. Mike Hawker, an Anchorage Republican.

The governor appointed Rabinow in September and feared Rabinow would quit the board if the legal issues weren’t resolved.

Rep. Ben Herron, a Bethel Democrat, said he spoke with Rabinow, who reassured him that he understood his job on the board was to look out for Alaskan interests, not for the industry.

Herron also spoke with former Senate President Drue Pearce, who also serves on the AGDC board.

“In her explanation, there was almost a sense of relief that we did have someone that was on the other side. We did have someone that wants to make this project the most valuable project we’ll ever develop, that we’ll ever deliver to Alaskans,” Herron said.

After a long debate, Rabinow breezed through the confirmation process with a 43-17 vote.

Another appointment was contested. Democrats said Bernard Washington, who Parnell appointed to the State Assessment Review Board, was another instance of the governor trying to stack key boards and commissions with members friendly to the oil industry.

The review board deals with oil company property tax disputes, mostly involving the Trans-Alaska Pipeline System.

Washington has worked in the oil industry for 35 years and  has expertise in pipeline valuation.

Oil company property taxes are an important source of income to municipalities and boroughs, who have waged battles in court to collect a bigger share of taxes.

In one case, the courts ruled that oil companies undervalued trans-Alaska pipeline properties by billions of dollars.

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