Since the Alaska Permanent Fund Corporation board voted to fire executive director Angela Rodell in December, some state lawmakers have been concerned that the decision was politically motivated.
On Monday, members of the Legislative Budget and Audit Committee met with the corporation’s board of trustees chair, Craig Richards, with the intent to better understand the decision. Richards maintained that Rodell was an at-will state employee but declined to give details about why she was fired. A corporation lawyer noted that Rodell has talked about suing the board.
Richards said the meeting with lawmakers itself was political.
“You brought up the chairman of the board to grill me pretty good, I might say, about essentially a personnel decision involving an at-will employee,” he said. “It’s your right to do it, but … you know, there’s politics going both ways here.”
Soldotna Republican Senate President Peter Micciche said the corporation should be focused on growing the fund. And he said he’s concerned that board members are straying from that focus.
“Do we actively separate politics from maximum returns, which is your mission, your vision?” he said. “Because a lot of this sort of reeks of something else.”
Micciche pointed to recent comments by a trustee as a source of concern. Trustee Lucinda Mahoney said she opposed an increase in the financial incentives paid to investment managers at a time when the Legislature has paid for smaller permanent fund dividends than what would be paid under the formula in a 1982 state law.
Gov. Mike Dunleavy has proposed a change to the dividend formula that would make them lower than the amount in the current formula but higher than have been paid over the past six years.
The fund has more than $80 billion. For more than 30 years, the main way that money was spent from the fund was for permanent fund dividends. But since 2018, it’s paid for most of the state budget. And the competition between paying for dividends and for state services has been controversial.
Anchorage Democratic Rep. Ivy Spohnholz pointed to the large growth in the fund and pointed out that the corporation was recently named one of the best places to work by a trade publication.
“It’s really difficult for us to understand what is the problem with her performance if she’s meeting all of these benchmarks?” Spohnholz said of Rodell.
In response to Richards’ comment that the meeting was political, Spohnholz said that while the Legislature is political by nature, the trustees shouldn’t be.
The fund grew by $30 billion during Rodell’s six years leading the corporation.
Richards said the growth shouldn’t be credited to Rodell, who didn’t manage investments.
Nome Democratic Rep. Neal Foster said Rodell would have been held responsible if the fund had done poorly.
“I just wanted to say that I think she deserves some of the credit,” Foster said.
Richards acknowledged his point: “And I apologize if that was either exactly what I said or what was taken by it. As the executive director, she was a critical part of the team, and she did a lot of things very well that contributed to the fund’s success — some of the administrative stuff was really good for the fund. And that helped the fund, and it contributed to the fund. My point was only that her responsibility was not the direct supervision of the investments.”
While Richards didn’t give details of why the board fired Rodell, he did say he was concerned by a proposal Rodell made a few years ago to combine her position with that of the chief investment officer.
“That was the incident in which, for me, huge red flags went up,” he said.
Richards said firing Rodell was appropriate. He pointed to negative reviews in her personnel file from some trustees that date back four years.
“I am truly shocked that I am here,” he said. “This is, this is a new one to me, OK? We have a at-will employee that reports to the board who years of documented evidence demonstrates that there were trust problems going both ways between the board and the executive director.”
Anchorage Democratic Rep. Andy Josephson said Rodell may be able to win a lawsuit against the state.
“And I would rather have paid her to do the capable work she was doing than paid her through an operating budget in a case called Rodell v. Alaska,” he said.
Committee chair Sen. Natasha von Imhof, an Anchorage Republican, said the committee would take whatever time is needed to fulfill its oversight duties as it continues to look into Rodell’s firing.
Richards said it would be best for the permanent fund to “move on.”
The first day of the legislative session is Tuesday.