02/09/2008 11:00 AM House STATE AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB277 | |
| HB287 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 277 | TELECONFERENCED | |
| *+ | HB 287 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE STATE AFFAIRS STANDING COMMITTEE
February 9, 2008
11:09 a.m.
MEMBERS PRESENT
Representative Bob Roses, Vice Chair
Representative John Coghill
Representative Kyle Johansen
Representative Craig Johnson
Representative Andrea Doll
MEMBERS ABSENT
Representative Bob Lynn, Chair
Representative Max Gruenberg
COMMITTEE CALENDAR
HOUSE BILL NO. 277
"An Act establishing a permanent absentee voting option for
qualified voters."
- MOVED CSHB 277(STA) OUT OF COMMITTEE
HOUSE BILL NO. 287
"An Act relating to certain investments of the Alaska permanent
fund, the state's retirement systems, the State of Alaska
Supplemental Annuity Plan, and the deferred compensation program
for state employees in companies that do business in Sudan, and
restricting those investments."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 277
SHORT TITLE: PERMANENT ABSENTEE VOTING
SPONSOR(s): REPRESENTATIVE(s) BUCH, LYNN, HOLMES, CHENAULT,
GRUENBERG
01/04/08 (H) PREFILE RELEASED 1/4/08
01/15/08 (H) READ THE FIRST TIME - REFERRALS
01/15/08 (H) STA, FIN
02/02/08 (H) STA AT 11:00 AM CAPITOL 106
02/02/08 (H) -- MEETING CANCELED --
02/09/08 (H) STA AT 11:00 AM CAPITOL 106
BILL: HB 287
SHORT TITLE: DIVEST INVESTMENTS IN SUDAN
SPONSOR(s): REPRESENTATIVE(s) LYNN, GARA
01/04/08 (H) PREFILE RELEASED 1/4/08
01/15/08 (H) READ THE FIRST TIME - REFERRALS
01/15/08 (H) STA, FIN
02/02/08 (H) STA AT 11:00 AM CAPITOL 106
02/02/08 (H) -- MEETING CANCELED --
02/09/08 (H) STA AT 11:00 AM CAPITOL 106
WITNESS REGISTER
REPRESENTATIVE BOB BUCH
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 277 as joint prime sponsor.
GAIL FENUMIAI, Director
Division of Elections
Office of the Lieutenant Governor
POSITION STATEMENT: Answered questions during the hearing on HB
277.
LARRY BENSON, President
American Postal Workers Union AFL-CIO
Midnight Sun Area Local 2756
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing on HB 277.
DORSEY ROLAND, National Association of Letter Carriers
Eagle River, Alaska
POSITION STATEMENT: Testified during the hearing on HB 277.
DIRK MOFFATT, Staff
Representative Bob Lynn
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 287 on behalf of
Representative Lynn, co-prime sponsor.
REPRESENTATIVE LES GARA
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As co-prime sponsor, provided comments
during the hearing on HB 287.
KELLY NIXON
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of herself during the
hearing on HB 287.
TAMAR SHAI
(No address provided)
POSITION STATEMENT: Testified on behalf of herself during the
hearing on HB 287.
MAX CROES, Divestment Associate
Genocide Intervention Network (GI-Net)
Washington, D.C.
POSITION STATEMENT: Testified on behalf of GI-Net during the
hearing on HB 287.
NINA McMURRY, Divestment Analyst
Genocide Intervention Network (GI-Net)
Washington, D.C.
POSITION STATEMENT: Provided information during the hearing on
HB 287, on behalf of GI-Net.
LAUREN TIBBETTS-TRAVIS, President
Students Taking Action Now: Darfur (STAND)
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of STAND during the
hearing on HB 287.
MICHAEL SCHULDINER, Member
Representative Assembly of United Academics
American Association of University Professors/American
Federation of Teachers (AAUP/AFT)
Local 4996
Fairbanks, Alaska
POSITION STATEMENT: Testified on behalf of AAUP/AFT during the
hearing on HB 287.
PATRICIA MOSS
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of herself in support
of HB 287.
ROGER A. SEVERSON
Douglas, Alaska
POSITION STATEMENT: Testified on behalf of himself in support
of HB 287.
LINDA LAYFIELD
Douglas, Alaska
POSITION STATEMENT: Testified on behalf of herself in support
of HB 287.
JOYANNE BLOOM, Board Member
American Jewish World Service
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the American Jewish
World Service during the hearing on HB 287.
ASHLEY STRALEY
(No address provided)
POSITION STATEMENT: Testified on behalf of herself in support
of HB 287.
MICHAEL J. BURNS, Executive Director
Alaska Permanent Fund Corporation
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of the corporation
during the hearing on HB 287.
LAURA ACHEE, Director of Communications
Alaska Permanent Fund Corporation
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Provided clarification on behalf of the
corporation during the hearing on HB 287.
BRIAN ANDREWS, Deputy Commissioner
Treasury Division
Department of Revenue
POSITION STATEMENT: Testified on behalf of the department
during the hearing on HB 287.
ACTION NARRATIVE
VICE CHAIR BOB ROSES called the House State Affairs Standing
Committee meeting to order at 11:09:01 AM. Representatives
Coghill, Johansen, Johnson, Doll, and Roses were present at the
call to order.
VICE CHAIR ROSES reported on the health of the committee chair.
HB 277-PERMANENT ABSENTEE VOTING
11:10:27 AM
VICE CHAIR ROSES announced that the first order of business was
HOUSE BILL NO. 277, "An Act establishing a permanent absentee
voting option for qualified voters."
11:10:37 AM
REPRESENTATIVE JOHNSON moved to adopt the committee substitute
(CS) for HB 277, Version 25-LS1095\E, Bullard, 1/25/08, as a
work draft. [No objection was stated, and Version E was treated
as before the committee.]
11:11:03 AM
REPRESENTATIVE BOB BUCH, Alaska State Legislature, introduced HB
277 as joint prime sponsor. He said the proposed legislation
would create a permanent absentee voting option for Alaskan
voters, whereby an absentee ballot would be sent to anyone who
applied for permanent absentee voting status. The voter would
not have to reapply for an absentee ballot for every election,
but would only have to apply once. The intent of the bill is to
make voting more convenient for Alaskans, many of whom have
seasonal jobs in the fishing and mining industries or on the
North Slope. Those people would have the comfort of knowing
that they would receive their ballot in the mail and be able to
vote, no matter where they are, he said. Furthermore, HB 277
would streamline the absentee voting process for the Division of
Elections by cutting down on paperwork and administrative costs.
REPRESENTATIVE BUCH reported that permanent absentee voting has
gaining popularity all over the country; currently eight states
allow it, while 21 other states have some version of it, for
example, no-excuse absentee balloting or mandatory vote by mail
systems. He specified that HB 277 would facilitate absentee
voting only for those voters who choose it. Voters would still
have the option of requesting a one-time absentee ballot, and
they could also choose to vote at their regular polling place.
REPRESENTATIVE BUCH said HB 277 would not change any of the
existing statutes that govern absentee balloting, except to
provide for a permanent option. He indicated that the same
statues that currently govern regular absentee ballot use would
extend to govern permanent absentee ballots. The bill would
apply only to state elections - not local elections. The
proposed legislation would take effect [January 1], 2009. He
relayed that HB 277 is supported by the Division of Elections,
whose representatives are on hand to answer questions related to
the absentee process and how this option would be implemented.
The bill also has the support of the U.S. Postal Service and
postal carriers, who are available via teleconference for
comment. Furthermore, HB 277 has bi-partisan support. He urged
the committee to support the bill.
11:13:59 AM
REPRESENTATIVE BUCH, in response to a question from
Representative Johansen, described the current process by which
a person votes absentee. In response to a follow-up question,
he indicated that Alaska does not have a [mandatory] mail-in
ballot system, although some states are moving in that
direction. He said, "This, by increment, gives us an
opportunity to look at this system and see if it's something
that we would approve of and will work here. And so, slowly, by
giving voters options, we may eventually get there - I don't
know."
REPRESENTATIVE JOHANSEN said he is curious whether "we're
inching towards that sort of a system."
REPRESENTATIVE BUCH responded, "This is just another option."
11:15:40 AM
REPRESENTATIVE DOLL turned to information included in the
committee packet [on page 3 of a 14-page handout of information
compiled by Project Vote], which read: "When fraud is found,
absentee ballots are often indicated." She paraphrased the
ensuing information, which read [original punctuation provided]:
Absentee ballot fraud takes four general forms, (1)
forging signatures or signing fictitious names; (2)
coercing or influencing a vote; (3) vote buying; and
(4) misappropriating absentee ballots. Absentee
ballot fraud by members of both major political
parties has been substantiated in several high-profile
civil and criminal cases.
REPRESENTATIVE DOLL asked Representative Buch for his comments.
11:16:33 AM
REPRESENTATIVE BUCH noted that there is testimony to that effect
available from those who are caretakers of "those security
issues," and he deferred comment to them.
11:17:01 AM
VICE CHAIR ROSES asked what kind of safeguards are in place to
prevent a situation in which a person might mail his/her
absentee ballot early, forget it has been done, and go to the
polling place to vote, thereby inadvertently voting twice.
11:17:38 AM
REPRESENTATIVE BUCH said there is a security system currently in
place throughout the Division of Elections that allows duplicate
votes to be found; however, he said he does not know the exact
procedure involved. He said other options, such as voting at a
polling place and voting absentee in front of a registrar, would
not be precluded because of this option.
11:18:24 AM
VICE CHAIR ROSES asked if, under the bill, a person who is
signed up for permanent absentee voting and then chooses another
option of voting would have to sign up again for the permanent
absentee voting.
11:18:37 AM
REPRESENTATIVE BUCH offered his understanding that the answer to
that question is no; however, he said he would like confirmation
from someone from the Division of Elections.
11:19:09 AM
GAIL FENUMIAI, Director, Division of Elections, confirmed that
the division supports HB 277 and that there would be no fiscal
impact on the division for implementing the proposed process.
She said the division currently has a strong absentee by mail
program. In the 2004 election, she noted, over 71,000 people
voted using one form of absentee voting or another. She
recollected that the division processed over 50,000 by mail
applications during the 2004 presidential election. In response
to a question from Representative Coghill, she said she does not
have statistics regarding the number of voters whose addresses
have changed since applying resulting in returned mail to the
division. She stated, "I believe the way the bill is drafted,
that if we mail a ballot to a voter who wants to be a permanent
absentee voter and it comes back undeliverable, we would cease
mailing any future ballots to that voter until they notify us
... of a different ballot mailing address."
11:21:14 AM
REPRESENTATIVE COGHILL said an essential factor in considering
the proposed legislation would be the federal requirement
related to maintaining and purging a voter list. He asked if
there have been any problems to date regarding the credentialing
of absentee voters, and whether the proposed legislation would
create further problems related to the definitive identity of
those filling out the absentee vote.
MS. FENUMIAI said currently a person must provide some form of
identification in his/her by mail application, such as the last
four digits of the social security number, date of birth,
driver's license, state identification number, and he/she must
sign an oath regarding identity. Furthermore, when the voter
votes that ballot, it must be witnessed by somebody who is
authenticating that that person is really the person who is
signing the open affidavit on the back of that envelope. She
said the process would not change because of HB 277.
11:22:36 AM
REPRESENTATIVE COGHILL emphasized the importance of trying to
second-guess how someone could scam the process. He said he
likes the idea, but even in open and absentee voting, where
voters self-identify, there is the opportunity for fraud, such
as using someone else's identity. He said voting in person
increases the chances to ensure authenticity.
11:23:31 AM
REPRESENTATIVE BUCH responded, "This isn't the first time this
has been put in effect; there is some history on this ...." He
said he shares Representative Coghill's concern regarding fraud.
11:24:08 AM
REPRESENTATIVE COGHILL asked if a cross-check system is already
in place.
11:24:24 AM
MS. FENUMIAI responded that the same procedures used now for the
annual vote by mail applications would be applied to the
permanent absentee voter. She said there are currently statutes
on the books regarding voter fraud, including related penalties.
11:25:04 AM
REPRESENTATIVE COGHILL commented that he could buy the
division's list [of addresses] for those voters in his district
and mail something to everyone on that list, and he would
anticipate receiving 30 percent of that mailing returned
"undeliverable." He said that is a problem.
11:25:30 AM
MS. FENUMIAI responded that the onus would be on the voter to
provide an updated address, and if it was a new permanent
mailing address, the division would make that correction on its
voter registration records. She said the absentee by mail
application serves a dual purpose; it is an initial registration
form and source for updating any information on the voter's
current voter's registration record.
11:26:00 AM
REPRESENTATIVE DOLL asked how long it takes the division to
conduct a crosscheck.
11:26:26 AM
MS. FENUMIAI explained that when the division reviews the
ballots, it would note in its system if a person had already
voted through an early voting process, and the ballot would not
be counted. In response to a question from Representative Doll
regarding military ballots, she explained that currently
military and overseas citizens have the option to apply to vote
by mail and have a ballot sent to them for the next two general
elections. She offered her understanding that that law changed
in 2006. The onus is still on the voter to let the division
know that he/she has a new ballot mailing address. She stated,
"This would be a further extension of that, and it would put
them on as a permanent absentee voter indefinitely." She said
she does not know how the division could simplify the process to
make it easier on the voter.
11:28:56 AM
MS. FENUMIAI, in response to a question from Representative
Johnson, stated her understanding that 71,000 people voted in
one form of absentee voting in the 2004 presidential election.
In response to a follow-up question, she said she does not know
how many absentee by mail forms were sent out, but she said she
could find out.
REPRESENTATIVE JOHNSON confirmed that he would like to know the
answer.
11:29:36 AM
MS. FENUMIAI, in response to Representative Johnson, offered her
understanding that if a voter does not make an attempt to vote
in any form in two election cycles, the division sends
notification that he/she will be removed from the list of
voters.
11:30:14 AM
REPRESENTATIVE JOHNSON remarked that he thought "it was much
more difficult than that." He asked how many years there are in
two election cycles.
11:30:24 AM
MS. FENUMIAI said she believes that would be a 4-year cycle.
She said she would like to look up the statute and provide
further information.
11:30:34 AM
REPRESENTATIVE JOHNSON asked if a voter on the permanent
absentee voting list, as proposed by the bill, would be removed
from the list if he/she did not vote [for two election cycles].
11:30:56 AM
MS. FENUMIAI responded that she does not believe so, because
that voter would have maintained a form of contact by indicating
that he/she wished to be a permanent absentee voter; however,
she suggested the need for legal interpretation.
11:31:12 AM
REPRESENTATIVE JOHNSON asked for clarification that if he were
to apply [for permanent by mail voting], he could never be taken
off the list of voters.
11:31:18 AM
MS. FENUMIAI said she needs to look at the list maintenance laws
to confirm that. She suggested that the bill sponsor may wish
to consult with Legislative Legal and Research Services.
11:31:32 AM
REPRESENTATIVE JOHNSON remarked that there are places where
voting turnout is low. He expressed concern regarding adding
people to a list off which their names can never be taken. He
said, "There's going to come a point where it's just not going
to function well for us to know what we're doing as a
democracy."
11:32:22 AM
MS. FENUMIAI told the committee that she had just been supplied
with the applicable statute, which read as follows:
Sec. 15.07.130. Voter registration list maintenance.
(a) Periodically, at times of the director's
choosing, but no less frequently than in January of
each calendar year, the director shall examine the
master register maintained under AS 15.07.120 and
shall send, by nonforwardable mail to the voter's
registration mailing address, a notice requesting
address confirmation or correction to each voter
(1) whose mail from the division has been
returned to the division in the two years immediately
preceding the examination of the register;
(2) who has not contacted the division in the two
years immediately preceding the examination of the
register; or
(3) who has not voted or appeared to vote in the
two general elections immediately preceding the
examination of the register.
(b) If a registered voter has not, within the
preceding four calendar years, contacted the division
and has neither voted nor appeared to vote in a local,
regional school board, primary, special, or general
election during the last four calendar years and a
notice sent to the voter under (a) of this section was
returned as undeliverable, the voter shall be advised
by a notice sent by forwardable mail to the voter's
last known address that registration will be
inactivated unless the voter responds to the notice no
later than 45 days after the date of the notice sent
under this section. The director shall maintain on the
master register the name of a voter whose registration
is inactivated. The director shall cancel a voter's
inactive registration in accordance with the
procedures set out in 42 U.S.C. 1973gg-6 (sec. 8,
National Voter Registration Act of 1993) after the
second general election that occurs after the
registration becomes inactive if the voter does not
contact the division or vote or appear to vote.
MS. FENUMIAI offered her understanding that the list that a
legislator has access to is one showing only active voters.
11:33:54 AM
REPRESENTATIVE JOHNSON concluded that the bill would not really
create a permanent list.
11:34:10 AM
MS. FENUMIAI indicated that that appears to be the case.
11:34:35 AM
REPRESENTATIVE JOHANSEN asked what percentage of voters has
utilized absentee voting in the last couple elections.
11:34:52 AM
MS. FENUMIAI said other than the aforementioned number of
approximately 50,000 people who applied to vote by mail in 2004,
she does not know the return rate or how the overall percentage
equates in terms of those who vote in person at the polling
locations.
11:35:12 AM
REPRESENTATIVE JOHANSEN drew attention to [page 6 of the
aforementioned Project Vote handout] and noted that eight states
are listed as having ["Permanent No Fault Absentee" voting]. He
said he is trying to figure out how many Alaskans are voting
absentee currently and what sort of impact [HB 277 would have on
that number]. He said the possibility of a considerable
increase in the number of people who vote through the absentee
by mail process leads to concern regarding security measures and
how the division would keep an accurate list. He asked Ms.
Fenumiai if she has studied "the other states" in terms of how
they "handle the questions" that [Representatives Coghill and
Johnson] have put forth thus far.
11:36:22 AM
MS. FENUMIAI answered that she has not seen the list of "other
states," but would definitely look into the matter.
11:36:33 AM
REPRESENTATIVE JOHANSEN said he would like to understand how
other states function that have "very high levels of doing this
method," rather than leaving it to the Division of Elections to
figure the matter out on its own.
11:37:06 AM
REPRESENTATIVE BUCH offered his understanding that [included in
the committee packet] there is testimony related to this concern
from the postal service, and that testimony would provide
answers to some of the previously stated questions.
11:37:29 AM
MS. FENUMIAI asked for confirmation that the aforementioned
eight states are "permanent ... by mail voting only." She said
the bill's proposal differs from a system that has all by mail
elections. She pointed out that Oregon is a state that requires
every voter to vote by mail. The proposed legislation would
give the option for a person to apply only once if he/she wanted
to vote by mail.
11:38:08 AM
REPRESENTATIVE JOHANSEN admitted that he does not know the
definition of permanent no fault absentee voting, but reiterated
his wish for studies to be done to learn about the processes of
other states, as well as to anticipate how the change will
affect Alaska's system.
11:39:01 AM
REPRESENTATIVE JOHNSON asked how many people were deleted from
the list of voters since the last two presidential cycles.
11:39:30 AM
MS. FENUMIAI said she would get that statistic for the
committee.
11:39:47 AM
REPRESENTATIVE BUCH said, "The hope ... of the other states was
that this would improve voter participation." He said Oregon,
the only state to currently have [required] voting by mail, has
close to an 80 percent voting rate. He continued:
Now, this process here hasn't had the same kind of
response, and even though it gave a certain level of
convenience and added that, they haven't seen the
increments, even though that was the hope. So, being
realistic with this, I also have to report what's in
your packet, that it doesn't testify to that fact that
it has increased the participation to the extent that
people had wished.
11:40:50 AM
REPRESENTATIVE JOHNSON asked Ms. Fenumiai to confirm that there
would be no additional cost incurred if the bill is passed.
11:41:10 AM
MS. FENUMIAI suggested perhaps the fiscal note should have been
an indeterminate fiscal note. She said, "Many of these people
may be those who apply and vote every year anyway. It's very
difficult to gauge, I believe, how much this will increase the
by mail voting program."
11:41:35 AM
REPRESENTATIVE JOHNSON noted that the bill would be heard by the
House Finance Committee.
11:41:43 AM
LARRY BENSON, President, American Postal Workers Union AFL-CIO,
Midnight Sun Area Local 2756, said state election ballots would
be sent indefinitely to the homes of those voters who had
registered as permanent absentee voters. The safeguard built in
to HB 277, he said, is the requirement that permanent absentee
voters vote in every election. Mr. Benson stated his
understanding that when a permanent absentee voter fails to vote
in any election, that voter's name would be removed from the
list of permanent absentee voters and he/she would no longer
receive a ballot in the mail in the future. However, he noted
that the bill would also allow the permanent absentee voter who
has been removed from the list of permanent absentee voters to
reregister. Permanent absentee ballots would not be forwarded
to a voter's new address. He said, "In the case of a voter
moving to a new home location, the postal service would return
those ballots to the Division of Elections for final
determination." The voter, after moving, would be allowed to
reregister for permanent absentee voter status. He said that
would give the division the ability to clean up the list of
voters.
11:44:02 AM
MR. BENSON stated that the Postal Inspection Service and the
Office of the Inspector General are the law enforcement
divisions within the postal service, and both agencies have a
high conviction rate related to all criminal mail matters.
Regarding on-time delivery, Mr. Benson described the postal
service as a professional delivery service with over 200 years
of experience in sortation and the delivery of mail.
Furthermore, he said the postal service has no problem with high
volumes of First Class mail that must be processed within a
deadline. He offered federal income tax season mail as an
example. At present, the postal service in Alaska has an on-
time delivery rating of 96.15 percent.
MR. BENSON, regarding voter turnout, said in the state of
Oregon, where it is mandatory to vote by mail, and where voter
turnout has increased, vote by mail has an 81 percent approval
rating. He stated that offering permanent absentee vote by mail
in Alaska will increase voter turnout, although it is hard to
gauge what that increase will be. In Alaska, absentee votes
will be beneficial to many of the state's citizens who work in
areas away from the polling places, such as working parents, the
elderly, and the disabled.
MR. BENSON said the states of Washington, Oregon, and California
report a savings in the cost of elections through the use of
vote by mail, and he predicted Alaska will also experience a
cost savings. He stated that permanent absentee vote by mail
would provide greater procedural integrity; there would be a
paper trail for each vote cast, unlike electronic voting
machines, which are susceptible to computer hackers. Vote by
mail has shown no increase in voter registration fraud, despite
19 different states having used it in at least one election, he
reported. Furthermore, he cited, "There are no reports that
indicate that permanent absentee vote by mail has any direct or
indirect effect on partisan composition of the electorate."
MR. BENSON named some benefits of permanent absentee by mail
voting. First, receiving a ballot in the mail two weeks before
an election reminds the voter that an election is imminent.
Second, it allows voters to research candidates and issues and
vote at their convenience. Furthermore, it would eliminate
decisions within the voting booth. Mr. Benson stated:
The American Postal Workers Union brings this bill
forward to ensure that all Alaskans have equal access
to voting, and for all the other reasons I presented
here, I ask you for your support of passing HB 277.
11:47:50 AM
MR. BENSON, in response to a question from Representative Doll,
said if a person moves out of state and has a forwarding address
on file with the postal service, a ballot that was sent out
would be returned to the Division of Elections, because it
cannot be forwarded.
11:48:53 AM
MS. FENUMIAI confirmed that the outgoing envelope in which a
ballot is sent has written instructions on it that let the
postal service know that the mail is not forwardable.
11:49:15 AM
DORSEY ROLAND, National Association of Letter Carriers,
acknowledged the previously stated concerns regarding how the
proposed bill would function. He said the bill merely proposes
that voters, who are already allowed to vote by mail, be allowed
the option of making their absentee by mail voting method
permanent. It would provide "an ease for the voter" and cut
down on some of the paperwork that must be done by the Division
of Elections. Mr. Roland said when a voter provides an
application to the division, he/she provides proof of identity
and a signature for verification. When a ballot is mailed into
the division, it is verified by that signature. By doing this,
the division is creating a verifiable paper trail. He said, "It
definitely doesn't produce any missing ballots." He said Oregon
has not had any instances of fraud [related to the vote by mail
system]. In fact, such a system helps to purge a voting list,
which results in a truer figure of the percentage of the voter
turnout in elections. He stated that he is not certain how that
happens but could "track that information down" for the
committee. Mr. Roland said he looks at HB 277 as a way to
increase voter turnout.
11:53:16 AM
REPRESENTATIVE JOHANSEN said he agrees with doing what is
possible to get more people involved. He noted that the postal
workers seem to be testifying on the functions of the Division
of Elections, and he said he is curious as to their involvement.
11:53:53 AM
MR. ROLAND said the issue is of interest to him. He told the
committee that he has a friend who is a postal carrier in
Portland, Oregon, who was instrumental in getting Oregon's vote
by mail laws passed in that state. He clarified that he is not
an expert on the law.
REPRESENTATIVE JOHANSEN complimented Mr. Roland for being a
citizen who is active in government and who took the time to
find out how the regulations work.
11:54:43 AM
REPRESENTATIVE JOHNSON asked Mr. Roland how much more mail the
postal service in Oregon has received since the vote by mail was
instituted.
11:55:03 AM
MR. ROLAND responded that the postal service has seen a revenue
increase of approximately $450,000.
11:55:50 AM
VICE CHAIR ROSES, after ascertaining that there was no one else
to testify, closed public testimony.
11:55:59 AM
REPRESENTATIVE JOHNSON directed attention to page 2, [lines 25-
29], which read as follows:
(c) For each state primary, general, and special
election, and each other election for which the state
has responsibility for the conduct of the election,
the director or an election supervisor shall send an
absentee ballot to each voter designated as a
permanent absentee voter for that election and who is
otherwise qualified to vote in that election.
REPRESENTATIVE JOHNSON asked Ms. Fenumiai to "outline the other
elections that the state is responsible for."
11:56:15 AM
MS. FENUMIAI responded that the other elections the division
oversees are those held in unincorporated areas of the state
where the division conducts school board elections and regional
educational attendance area elections. It also oversees local
liquor option elections, dissolution elections, and
incorporation elections on behalf of the local boundary
commission.
11:57:04 AM
MS. FENUMIAI, in response to a question from Representative
Johnson, confirmed that the permanent absentee by mail voting
would pertain to state elections only; if local municipalities
want to offer this kind of voting, they would have to adjust
their local ordinances. In response to a follow-up comment from
Representative Johnson, she stated her belief that it would be
the responsibility of the division to make it clear to voters
that the option would only be for state elections.
11:58:07 AM
REPRESENTATIVE JOHNSON stated concern that there may be a
disenfranchisement of voters, and he asked if there is any way
to have a unified election process.
11:59:08 AM
MS. FENUMIAI explained that the current system requires people
to apply separately for local elections. Since voters are used
to applying separately for the two kinds of elections, she said,
she is "not sure if this would really, truly have that much of a
negative impact on the current process."
11:59:48 AM
REPRESENTATIVE JOHNSON said, "The 'I'm not sure' part causes me
some concern, because neither am I, and I would like to be
sure."
11:59:58 AM
MS. FENUMIAI, in response to Representative Johnson, said the
municipalities use the state voter registration list; however,
they don't use the absentee voter list, since it is only
applicable to state elections.
12:00:23 PM
REPRESENTATIVE DOLL stated that although she has concerns about
fraud, the thought of being able to bring more people to vote is
a strong argument in favor of the proposed legislation;
therefore, she stated her support of HB 277.
12:01:30 PM
REPRESENTATIVE BUCH said the intent of the bill is to provide
another option - a convenience to voters. He expressed
appreciation for the comments of the committee.
12:02:13 PM
REPRESENTATIVE JOHNSON reiterated that he likes the concept of
increasing voter participation, but is concerned that the bill
would set up a separate system that would be confusing to
voters. He said he is not yet comfortable with HB 277.
12:03:16 PM
REPRESENTATIVE DOLL moved to report CSHB 277, Version 25-
LS1095\E, Bullard, 1/25/08, out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 277(STA) was reported out of the House State
Affairs Standing Committee.
The committee took an at-ease from 12:03:56 PM to 12:04:03 PM.
HB 287-DIVEST INVESTMENTS IN SUDAN
12:10:11 PM
VICE CHAIR ROSES announced that the last order of business was
HOUSE BILL NO. 287, "An Act relating to certain investments of
the Alaska permanent fund, the state's retirement systems, the
State of Alaska Supplemental Annuity Plan, and the deferred
compensation program for state employees in companies that do
business in Sudan, and restricting those investments."
12:10:56 PM
DIRK MOFFATT, Staff, Representative Bob Lynn, Alaska State
Legislature, introduced HB 287 on behalf of Representative Lynn,
co-prime sponsor. He presented the sponsor statement, which
read as follows [original punctuation provided]:
Alaska should not invest money in companies that have
a business relationship and are complicit with the
Sudanese Government's policy of genocide in the Darfur
region of Western Sudan.
More than 400,000 people have been killed, an
additional 2.5 million have been forced from their
homes, and untold thousands of women and children have
been abducted and raped, since Sudan began sponsoring
attacks on innocent civilians in Darfur.
On July 22, 2004 the U.S. Congress declared that "the
atrocities unfolding in Darfur, Sudan are genocide."
This is the first time in history that the United
States government has recognized genocide while it's
still occurring.
HB 287 mandates targeted divestment and prohibits
future investment of the state managed PFD and Pension
funds in targeted companies that do business with
Sudan. The overall objective of this legislation is to
pressure Sudan economically until it ends it's
genocide in Darfur.
There are few things an individual state can do to end
genocide. Targeted Divestment is one promising
strategy to do just that: Pressure the Sudanese
government to end it's genocide in Darfur. The State
of Alaska can do this with slim to no impact on the
fund manager's wise investment mandate to invest
principal while maximizing total return.
Alaska has very little invested in Sudan, about 36
million, or 0.1% of total assets and it's important to
note that none of the targeted businesses currently
operating in Sudan are American.
U.S. Senator Sam Brownback and former republican
presidential candidate, said: "We've said often 'never
again' and taken up the pledge of 'not on our watch.'
We also need to take up the pledge of 'not on our
dime.'"
To date, 20 states have already divested assets from
companies doing business with the government of Sudan.
Alaska is the 49th State to join the union, but it
should not be the last to say: "No to genocide, not on
our dime."
12:13:46 PM
REPRESENTATIVE JOHANSEN asked if any of the 20 states that have
divested have an entity similar to the Permanent Fund
Corporation.
12:13:58 PM
MR. MOFFATT offered his understanding that the answer is no.
12:14:24 PM
REPRESENTATIVE JOHANSEN noted that the Genocide Intervention
Network's (GI-Net's) web site lists eight areas in the world [in
addition to Darfur] that are trouble spots: Iraq, Burma, Sri
Lanka, Somalia, Kenya, the Democratic Republic of Congo, Central
African Republic, and Chad. He asked if the bill sponsors had
considered offering legislation that would guide the investment
policy [of the Permanent Fund Corporation] rather than singling
out [Sudan] in statute.
12:15:32 PM
REPRESENTATIVE LES GARA, Alaska State Legislature, as co-prime
sponsor of HB 287, responded that there is no atrocity worse
than genocide, and both the United States Congress and the
President of the United States have determined that what is
going on in Darfur is genocide. By focusing on the genocide in
Sudan, the bill targets a "discreet number of companies" to
divest in Sudan. He said 70 percent of the money that is used
by the military in Sudan to commit genocide comes from Sudan's
oil revenues and tax revenue. The bill targets mineral
companies primarily, none of which are American, because by
federal law, no U.S. company is allowed to participate in
activities which support Sudan's genocide. He pointed out that
BP runs gasoline stations in Sudan, but the bill is carefully
targeted to not take away investments from companies that
produce consumer goods. In response to Representative
Johansen's previous question, he said other states do not have a
permanent fund; however, they have entities that are banned from
investing in companies that support the genocide in Sudan.
12:19:20 PM
REPRESENTATIVE GARA, in response to Representative Johansen,
clarified that the co-prime sponsors have not considered
including the aforementioned other countries in the bill. He
reiterated that Sudan's situation is the greatest atrocity:
200,000 have been killed and 2 million stuck in refugee camps
where they don't have water or food. He stated, "You don't
decide not to solve a problem just because there are other
problems that you're not solving." He said the co-prime
sponsors have avoided "going down a slippery slope" by
identifying what they think is the most crucial focus for the
bill. He said there are a number of companies that have
divested in Sudan since this movement has begun. Representative
Gara said he thinks Alaska can make a difference. He stated,
"You never know what your impact is on the world by yourself,
but you know when you join with others, there is an impact."
12:21:34 PM
REPRESENTATIVE JOHANSEN explained that it is difficult for him
to figure out who is going to make the call regarding what is
atrocious enough to be included in a proposed bill. That is
what the slippery slope is, he said. He expressed appreciation
for the work of both co-prime sponsors in bringing HB 287 before
the committee.
12:22:04 PM
REPRESENTATIVE JOHNSON asked whether BP would be targeted if it
is discovered that the military [in Sudan] is using BP's gas for
its vehicles.
12:22:16 PM
REPRESENTATIVE GARA reiterated that the proposed bill lists only
those companies that are providing resources and equipment to
the Sudanese government; BP is providing consumer goods.
12:23:07 PM
REPRESENTATIVE GARA, in response to a question from
Representative Johnson, said he does not know how many other
states have gone on to include other countries for divestment.
He noted that in the past the disinvestment movement was focused
on South Africa, during apartheid.
12:24:12 PM
REPRESENTATIVE JOHNSON offered his understanding that there are
six other states or funds that have included other areas for
divestment. He stated his concern is regarding the
aforementioned slippery slope, he mentioned issues related to
abortion and hospitals, and he indicated that he has doubts
about the wisdom of the legislature involving itself with the
issue of investing. He said [what is happening in Sudan] is
heartbreaking and terrible, but he is concerned that once the
legislature starts directing investment based on politics, there
will be no end in sight.
12:26:27 PM
REPRESENTATIVE DOLL said she understands where Representative
Johnson is "coming from." She spoke about embargos. She said,
"See where the power's coming from, and ... usually it comes
from the giving of money." She said, "So, I am sympathetic to
this and I'm looking forward to further testifying today."
12:27:51 PM
REPRESENTATIVE GARA told Representative Johnson that he
understands the slippery slope, which is, he explained, "why
we're not walking on it." The bill is purposely being limited
to address one country. He stated, "The people of the state of
Alaska I don't think want to make money off of genocide and
right now we are." Other legislation can be filed to regulate
other issues. He said, "... You'll find out that the things
that are less important, that involve less violence, that don't
involve genocide are [going to be] much more controversial; but
this is genocide, and this one, I think, should be less
controversial."
12:28:27 PM
REPRESENTATIVE JOHNSON responded that he could line up people to
testify that abortion is genocide.
12:29:00 PM
REPRESENTATIVE GARA, in response to a question from
Representative Johnson, stated:
It's not just support of the military that we're
saying is the criteria for deciding whether your
company is on the bad list. It's support of the
government. But, ... given that the major support for
the government is through mineral revenue in Sudan,
... it's partially the extracting companies that have
chosen to help make money off the genocide in Sudan.
There are other places to invest in the world.
... Companies ... often cannot decide where to invest
based on a social conscience. ... The corporate
charter in every state says the companies have to
maximize the benefit of their shareholders; it doesn't
say they have to make philosophical decisions. That's
our job. ... But the definition is: support of the
Sudanese government in a way that helps the Sudanese
government engage in the genocide. It excludes
consumer goods; it excludes companies that provide
humanitarian help; it excludes companies that are
doing things that are not support for the Sudanese
government that relates to the funding of their
military.
And the other states that have done this have largely
adopted language similar to ours. Some have banned
all investments in Sudan, but that's ... messy - then
all of a sudden you're banning investments in
companies that are providing services that people in
Sudan rely on.
12:30:33 PM
VICE CHAIR ROSES asked, "Were these six companies that you're
targeting investing in that company prior to ... the atrocities
reaching to the level of concern that they've reached?"
12:30:43 PM
REPRESENTATIVE GARA said he does not know how long the companies
have been involved in Sudan, but it is only recently that
pressure has been applied through legislation. He outlined that
genocide started in 2003, and other states began enacting laws
in 2006. Those laws tend to have a lag period of 18 months,
with the exception of executive orders.
12:31:19 PM
REPRESENTATIVE ROSES indicated that companies that began their
business with Sudan after the atrocities began certainly would
be directly involved with funding the genocide.
12:32:02 PM
KELLY NIXON read her testimony as follows:
I am a member of Save Darfur Anchorage. Our group
consists of Alaskans from the communities of
Anchorage, Eagle River, and Wasilla, who believe
strongly that we have an ethical responsibility to do
what we can to end the Darfur genocides.
The government in Sudan continues to refuse to
cooperate with the United Nations, and the instability
in the Darfur Region has caused most humanitarian
efforts to pull out. There are, therefore, very few
avenues for facilitating an end to this genocide or
offering support to the people of Darfur. Targeted
divestment is one of the few.
This international effort acknowledges the debt-ridden
government of Sudan's reliance on foreign direct
investment to finance its military and Janjaweed
militias and goes after the foreign companies that are
most egregious in their support of the current
Khartoum regime without sacrificing investment profit.
So far, 22 states have adopted a policy of targeted
divestment, and 17 others will consider this policy
this year. Through targeted divestment, we can
collectively exert enough pressure on the government
of Sudan through these foreign companies to compel a
shift in focus from destruction and annihilation to
one of stability.
We understand that some perceive HB 287 as a threat to
how our state invests. We know that there's
resistance to passing this legislation. But we ask,
as you consider HB 287, that you remain mindful of how
easily our state can implement this policy and how
truly horrific genocide is.
Genocide calls for all of us to look hard and deep at
ourselves - at our actions and inactions - and ask
ourselves if we, as humans, are doing what we can to
fight against it. Are we offering support, relief, or
hope to the people of Darfur, who are right now -
right this minute - facing a very deliberate and
systematic destruction of their culture and their
lives. This genocide will end one day, and the true
horrors faced by the millions affected will be
revealed. Many Americans will reflect on this time
and will wish they had done more - that they had done
something - but at that point it will be too late. We
hope that when that day of reflection comes, Alaskans
will be able to say proudly that we took a stand
against genocide.
12:35:14 PM
TAMAR SHAI, noted that she is a member of Save Darfur Anchorage.
She said she thinks it can be difficult to imagine the death of
hundreds of thousands or the displacement of millions. She
proffered that what helps her to do so is to imagine a woman her
own age, who is also married and has children, and to think
about what that woman's days are like living in a refugee camp
with an older daughter, having lived through the beating deaths
of her husband, older sons, and infant. Ms. Shai said that this
woman's refugee camp is not safe, because if she goes past the
periphery of the camp to find water or wood, she risks being
gang raped by those same men who murdered her husband and
children. Ms. Tamar said she focuses on that scenario and
multiplies it by a million.
MS. SHAI said a lesson from the Holocaust is that "the
perpetrators of genocide depend on good people standing by and
allowing the atrocities to happen." She said the president of
Sudan needs people to ignore what is going on in order to
systematically eliminate the people of Darfur.
MS. SHAI said she understands that management of the permanent
fund is complex, and that it is the role of the managers to
maximize profits for the people of Alaska. Regarding
[Representative Johnson's] previously stated comment regarding a
"slippery slope," she stated:
You may be able to find people who feel that abortion
is genocide or think that we should include other
atrocities, but our President and the U.S. Congress
have declared Darfur and only Darfur to be a genocide.
That's where the slippery slope can stop.
So, my question: Is there nothing really too awful,
too cruel, or too inhumane for us to financially
support? Isn't genocide in a class of its own? And
if the permanent fund had been operating during the
Holocaust, would we have invested in the final
solution, so long as it was profitable? One thing is
for certain: history is going to judge us. Will we
be viewed as profiteers of ethnic cleansing or will we
be remembered as a community that refused to be
exploited by the perpetrators of genocide?
MS. SHAI described herself as a typical Alaskan who likes to
receive a permanent fund dividend (PFD). She said some of her
PFD money will be financing her children's college education,
and she requested, "Don't let their future be financed by
genocide."
12:38:45 PM
MAX CROES, Divestment Associate, Genocide Intervention Network
(GI-Net), testifying on behalf of GI-Net, told the committee
that of the eight countries listed on GI-Net's web site as being
in conflict [other than Sudan, as previously noted], none of
those conflicts have been categorized as genocide. The
situation in Darfur is unique because the federal government,
the President, and Congress have all declared that the ongoing
atrocities in Darfur are genocide. He stated that this is the
only time in American history that such a declaration has been
made; it was not declared during the Holocaust or the Rwandan
tragedies.
MR. CROES, regarding the identification of companies and the
efficacy of divestment, stated:
This is not a feel-good action. Nine corporations
have withdrawn or substantially altered their policies
in Darfur and throughout Sudan to reflect the fact
that their contributions to the Sudanese government
may be and probably are being funneled directly
through the Sudanese military to wage the campaign
there. These corporations have developed humanitarian
programs or refused to continue offering their money
to the government of Sudan.
As everyone in Alaska I'm sure knows, every time the
pipeline doesn't transit oil, the state loses money.
And similarly, the government of Sudan knows that
every time a corporation pulls out or restricts its
access to their markets, ... they, as well, lose money
and lose the ability to wage the genocide in Darfur.
Companies are targeted on three criteria that are
specifically noted: First, whether or not they
contract with the government of Sudan or its projects;
second, whether or not they assist any of the
marginalized populations in Sudan; and third, whether
or not they address specifically the fact that their
dollars could be contributed to the genocide there.
The example that we can pull out of this is, of
course, the BP reference that was made earlier. We
could draw a similar analogy to Coca Cola: Does the
Sudanese government and the military drink Coca Cola?
Most likely they do. But the situation is that Coca
Cola does not contract directly with the government of
Sudan and does not contribute their profits to the
genocide in Darfur. Specifically, what we do is
target those corporations, and as we see through the
holding in the permanent fund, this is [a] miniscule
amount that is capable of being divested.
I think that one of the major things we should address
is that this is a policy that's effective at ending
the genocide in Darfur, and also one that can safely
and responsibly be implemented without harming returns
of the permanent fund or any other organization.
12:41:28 PM
NINA McMURRY, Divestment Analyst, Genocide Intervention Network
(GI-Net), indicated that although there are "some other calls
for divestment" and "potential other issues where divestment
could come up," targeted Sudan divestment is the only strategy
that has been explicitly authorized the U.S. Government with the
recent passage and signing of the Sudan Accountability and
Divestment Act, which she said "explicitly encourages and
authorized states to enact targeted Sudan divestment along the
same lines as HB 287."
12:42:59 PM
LAUREN TIBBITTS-TRAVIS, President, Students Taking Action Now:
Darfur (STAND) - Juneau Chapter, testified on behalf of Students
Taking Action Now: Darfur (STAND). She indicated that her
father taught her that actions speak louder than words. She
emphasized the importance of taking action to effect change in
Darfur. She mentioned divesting in companies that support
genocide in Darfur. Ms. Tibbitts-Travis defined murder as the
killing of a person. She emphasized the importance of making
others aware that the permanent fund investment is not
necessarily funding genocide, but it funds companies that do
support genocide. Pulling out from those companies will free
the state from guilt. She described the atrocities taking place
in Darfur, telling the committee that everyone there is being
systematically killed for no other reason than that they are of
the Black African race and practice either Christianity,
Animism, or traditional tribal spirituality in a country that is
mainly Islamic. She talked about the PFD as being a legacy that
will be passed down through generations, and reiterated her
request that none of the money earned in the fund be associated
with the genocide in Darfur.
12:46:51 PM
VICE CHAIR ROSES told Ms. Tibbitts Travis that she represented
the students well and he hopes she will encourage other students
to get involved.
12:47:18 PM
MICHAEL SCHULDINER, Member, Representative Assembly of United
Academics - American Association of University
Professors/American Federation of Teachers (AAUP/AFT) Local
4996, testifying on behalf of AAUP/AFT, told the committee that
it could inspire moral integrity in today's students by its
actions today. He said he teaches Holocaust literature, so he
is "close" to the issue at hand. Mr. Schuldiner revealed that
his parents lived through the Holocaust; his in-laws were
Auschwitz survivors. He stated, "The way genocide happens is
when good people like yourselves stand by and do nothing."
MR. SCHULDINER cited a resolution passed by the United Academics
AAUP/AFT, which read as follows [original punctuation provided]:
WHEREAS the government of Sudan has engaged in a
policy of genocide against its own civilians in Darfur
through the use of its military and through
sponsorship of attacks by armed militias known as
janjaweed; and
WHEREAS the janjaweed and military of the Sudanese
government are responsible for razing over 80% of
Darfur's villages, gang-raping civilians, slaughtering
a minimum of 200,000 victims, displacing 2.5 million
more, using forced starvation as a weapon of war, and
impeding access of humanitarian aid to the up to 3.5
million Darfurians that are now reliant on assistance;
and
WHEREAS the Sudanese government and janjaweed militias
have continued their attacks despite the signing of
the Darfur Peace Agreement; and
WHEREAS the Darfur crisis represents the first time
that the US Congress, State Department, and President
have declared a genocide while the atrocities are
ongoing; and
WHEREAS the International Criminal Court in The Hague
has charged Sudanese officials with 51 counts of
crimes against humanity and war crimes in Darfur,
including the murder, rape, torture, and persecution
of civilians;
WHEREAS certain international companies operating in
Sudan bring significant revenue, cover, and arms to
the Sudanese government while providing little benefit
to the majority of Sudan's citizen; and
WHEREAS Khartoum has funneled the majority of foreign
direct investment from these companies into military
expenditures used to perpetuate the genocide while
neglecting needed development projects in the Darfur
region; and
WHEREAS the current Sudan divestment movement now
encompasses nearly 100 universities, cities, states,
and private pension plans.
WHEREAS the divestment movement has already gained the
attention of the Sudanese government and altered the
behavior of some companies operating in Sudan;
WHEREAS House Bill NO. 287, introduced January 4,
2008, in the Legislature of the State of Alaska is a
bill for "An Act relating to certain investments of
the Alaska permanent fund, the state's retirement
systems, the State of Alaska Supplemental Annuity
Plan, and the deferred compensation program for state
employees in companies that do business in Sudan, and
restricting those investments";
THEREFORE, BE IT RESOLVED that United Academics-
AAUP/AFT, representing the upper-division teaching
faculty and research faculty of the University of
Alaska system, support the passage of House Bill No.
287, introduced in 2008 into the Twenty-Fifth
Legislative Session-Second Session of the State of
Alaska.
12:53:36 PM
PATRICIA MOSS, testifying on behalf of herself, noted that she
founded an international writers' group called, "When Does Never
Again Begin," the name of which she indicated was posed as a
question from her son after he had studied the Holocaust and the
Rwanda genocide." In response to Representative Johnson's
previously stated concern about avoiding a slippery slope in
terms of the State of Alaska's involvement, she said, "This is a
divestment issue, and ... our money is involved, as we all well
know." She continued:
The people of Alaska want to know: Will you make us
financially complicit in a genocide by refusing to
divest from Sudan? Will you force us to be the German
village with ashes of our complicity falling upon us
through daily media reports and through our PFD
checks? Is part of our children's inheritance from
Alaska going to be the ... same sort of knowledge that
weighs upon the hearts of the people of Europe? Or
will you act as liberators of the Darfur victims
through targeted divestment?
May I suggest that applying the multiplication table
to a genocide could be viewed as immoral in post
legislation debates should you fail to pass this bill.
And may I also suggest that the ... issue of future
reparations is a major liability for the State of
Alaska and a reality in the post situations for other
genocidal events.
The people of Alaska do not support genocide; the
people of Alaska did not support the Holocaust. Will
you associate your good names and the good names of
your constituents with financial support for the
genocidal policies of ... Sudan, when 22 others states
have chosen to divest? If the accountants for the
State of Alaska are savvy enough to create a wealth
equal to the ninth richest country on earth, then
surely they can recover ... the $10 million risk
associated in the language opposing this action. You
have a responsibility to protect and to oversee the
applications of the moral principles of the people of
Alaska.
This bill is not a profit and loss decision; it is
about who we are, whether we are arrogant or whether
we are compassionate. Please keep in mind that all
that is necessary for the triumph of evil is for good
men to do nothing. When does never again begin? In
this matter before you, I want it to begin with
divestment, and I ask you support this bill.
12:57:46 PM
ROGER A. SEVERSON, testifying on behalf of himself, stated that
what impresses him about HB 287 is that "it seems to be a
surgical strike" of six companies. He said he thinks it makes
sense to do that. He said he does not want to offend anyone,
but the proposed legislation is "a no-brainer." He explained,
"We can't really continue activities that propagate or
perpetuate this kind of behavior in Darfur, and frankly, I
think, elsewhere as well." He encouraged the legislature to
pass HB 287.
12:58:54 PM
LINDA LAYFIELD, testifying on behalf of herself, said she thinks
previous testimony has made it abundantly clear that "the
situation in Darfur is the greatest atrocity that is happening
in the world today." She expressed gratitude that the U.S.
Government has declared the situation in Darfur as genocide.
She emphasized the time-sensitive nature of the issue, stating
that she does not think there is time to consider other versions
of the bill or to add other countries to the bill language. She
reminded the committee that although it took only 90 days for
approximately one million people to be killed in Rwanda in 1994,
the atrocities really started in 1988 and continued clear
through to 2002. She said she thinks the situation in Darfur
had been worsening for some time before it came to the attention
of the U.S. Government. She said already approximately one
quarter the number of people who were killed in Rwanda has been
killed in Sudan, and she warned against waiting for those
numbers to increase to the point that they may be as great as or
greater than the numbers of those killed in Rwanda. She said in
Rwanda today, there are "grim reminders of the shameful neglect
of the Western World in not recognizing the genocide that
happened there."
MS. LAYFIELD shared that she had attended the Olympic Games in
Munich. The day after the Israeli athletes were killed, there
was a moratorium whereby every event was pushed a day later. On
that day, she related, she visited the museum at the Dachau
concentration camp, where she read a quote by [George Santayana,
from The Life of Reason, Volume 1], which read: ["Those who
cannot remember the past are condemned to repeat it."] She said
the proposed legislation offers the opportunity for Alaska to
not allow the world to repeat what happened in Rwanda. She
stated that she is great believer that "every little bit helps,"
and she urged the committee to support the passage of the bill.
1:02:54 PM
JOYANNE BLOOM, Board Member, American Jewish World Service, told
the committee that the American Jewish World Service is an
organization that has been a leader in the movement to end
genocide in Darfur and was one of the first national
organizations to endorse targeted divestment from Sudan. She
said her involvement with this issue has taken her to
Washington, D.C. and New York, and now before the House State
Affairs Standing Committee. She showed the committee bracelets
and a pin that she has received [that promote the abolishment of
genocide], and she said although these items may be considered
gimmicky, what the House State Affairs Standing Committee is
doing by considering HB 287 is not gimmicky. She stated,
"You're letting the world know that Alaska will not be silent in
the face of crimes against humanity; that it's not okay to fund
companies whose business with the Sudanese government helps to
fuel a genocide that has taken the lives of ... at least 200,000
people and cause 2.5 million people to lose their homes and to
live in fear of their lives every day.
MS. BLOOM opined that the fiscal note attached to the bill is
absurd. She admitted that she is not an economist, but said the
estimated cost of $10-$14 million to divest less than one-tenth
of one percent of [the permanent fund's] portfolio "sounds like
gobble-dee-gook math." She said she understands that [those who
manage] the permanent fund do not wish to be dictated by
political whims, but HB 287 is about ethics, not whims. Ms.
Bloom posited that Alaskans want to show that they can do the
ethical thing, and they want to join the federal government and
the 22 other states that have done their part to intensify the
pressure on the Sudanese government to end genocide now. She
concluded:
I've lost family members in another genocide, and I'm
here to bear witness. Please, let's do what ever we
can - big and small, directly and indirectly, with
words and with dollars - to stop the genocide in
Darfur.
1:07:32 PM
ASHLEY STRALEY testified that each person has the responsibility
to "acknowledge the fact that there's a genocide going on." She
said HB 287 is a good bill, although she indicated that she does
not think the fiscal note should reflect such a high cost. She
said Alaskans take pride in receiving their PFDs; however, she
does not think they would approve of earning PFD dollars through
investments made in companies that support genocide.
1:09:39 PM
REPRESENTATIVE JOHANSEN noted that Ms. Straley had worked as a
page for the legislature.
1:10:38 PM
MICHAEL J. BURNS, Executive Director, Alaska Permanent Fund
Corporation, Department of Revenue, relayed that the corporation
appreciates the sponsor's motivation in introducing the proposed
legislation. He stated that the corporation respects that it is
the prerogative of the legislature to direct the corporation
regarding its investments in the permanent fund. He said, "If
the legislature directs the trustees and staff to divest assets
from the fund in the manner prescribed in this bill, we will do
so; however, we urge you not to take this step." He continued:
In 30 years, the Alaska Permanent Fund has only been
invested for the financial benefit of the people of
Alaska and never to enact a social or political
agenda. Placing a social investment directive on the
fund would be a significant change to our core
mission. We believe that the prudent course of action
is to make investment decisions on strictly economic
grounds, and we do not believe that investment
decisions made for social or political reasons are in
the best interest of the permanent fund.
After the question of prudence is the question of
efficacy. We are discouraged at the prospect of
placing a socially motivated directive on the
permanent fund - a directive that will have some costs
- when we have not seen definitive proof that these
divestment efforts are effective.
MR. BURNS noted that included in the committee packet is a
summary [from the second page of the segment of the
corporation's handouts entitled, "The Effect of Socially
Activist Investment Policies on the Financial Markets: Evidence
from the South African Boycott."] He said, "The researchers
concluded that it was not divestment, but rather many other
forms of pressure brought to bear on the South African
government that caused a change in their practices.
MR. BURNS said both the U.S. Department of Treasury and the U.S.
Department of State are actively involved in bringing about an
end to the genocide in Darfur, and he said he would like to
"touch on some concerns held" by both departments. He
continued:
We don't speak for these ... agencies ..., but
choosing to enact divestment legislation is a
significant decision that will affect our state's
investments and investment policies well into the
future, and we think you should have all the facts as
you deliberate. We have included testimony in our
packet from representatives of both of these federal
agencies before the Senate Banking Committee, and you
will find that the common theme is that treasury and
state believe that individual divestment policies at
the state level, rather than helping, will in fact
hinder their efforts.
1:13:44 PM
REPRESENTATIVE JOHNSON acknowledged that the amount of permanent
fund investment being questioned is only a small portion of the
entire investment portfolio, but the point is that if a company
in which the permanent fund is invested pays taxes to the
Sudanese government, those taxes go to the military, and the
military of Sudan is involved in the genocide. Taking that idea
to the extreme, any company that does business in or with Sudan
is complicit, he said. Representative Johnson asked what the
effect would be if Alaska were to not invest in any company that
pays taxes to the Sudanese government.
1:14:59 PM
MR. BURNS explained that there are 6 companies in the permanent
fund corporation's portfolio today, but there are 60-80
companies on the list that are not currently part of the
portfolio, and the cost comes from monitoring that broader list.
He said he does not have an answer to Representative Johnson's
question.
1:16:07 PM
REPRESENTATIVE JOHNSON said his point is, "If we're going to do
this, let's do it." He asked about the possibility of
encompassing all companies that have anything at all to do with
countries that commit genocide. Regarding indirect holdings, he
directed attention to language beginning on page 3, line 30,
through page 4, line 2, which read as follows:
(e) Indirect holdings of the fund in assets of a
company on the scrutinized companies list that has
active business operations need not be divested if the
assets are part of a separate, actively managed
commingled fund in which other investors also own
shares or interests.
REPRESENTATIVE JOHNSON asked if there is a potential for the six
companies to become indirect holdings, so "we're really going to
have no effect." He asked for an explanation of indirect
holdings.
1:17:19 PM
MR. BURNS said the permanent fund corporation owns 100 shares of
ConocoPhillips Alaska, Inc. directly. He said, "I think what
they're talking about there is a comingled fund, which we do
have several." He said it is not a preferred method. He said
the corporation owns one international mutual fund, whereby it
actually owns shares in the fund and the underlying assets are
held by that fund. He said the corporation holds two comingled
funds, one of which is a pure mutual fund. He stated that the
corporation would probably have to "get out of" those funds,
because it does not control the investment decision - it makes
those decisions with other owners. In response to a follow-up
question from Representative Johnson, explained that the
companies on the list do not make the decision to become part of
a comingled fund; someone selects them, and that selection is
out of [the corporation's] hands.
1:19:00 PM
REPRESENTATIVE JOHNSON asked if any of the six companies are in
comingled funds.
MR. BURNS said the corporation does not know.
1:19:09 PM
LAURA ACHEE, Director of Communications, Alaska Permanent Fund
Corporation, Department of Revenue, stated that the corporation
has not done any screens on its investments. She said, "We post
our holdings on line and this is what we're being told by the
folks that have screened." She said it is very possible that
some of the companies on the scrutinized list could be in those
two comingled funds. They are actually non-U.S. comingled
funds, so they could potentially be in there, and if they are,
this legislation would require us to divest from them." She
said on any given day, the permanent fund holds shares of 3,000
companies, and that number changes daily. She said:
We haven't looked at all at the potential cost with
regard to investment losses of divesting from any
company; we've only looked at the administrative costs
of ensuring that we would divest from any companies
that were on the list and that we wouldn't purchase
them again. ... If this legislation were to take
effect between now and the point in time when you
would have to go to divest, it could still be six
companies, but it could be six entirely different
companies. So, this isn't a static thing. And that's
how we're approaching it from an administrative
(indisc. - overlapping voices).
1:20:51 PM
MR. BURNS clarified that the corporation did not put into its
fiscal note any opportunity costs of divesting of any company.
The fiscal note, he emphasize, "is strictly the administrative
cost of trying to develop a system to screen 3,000 companies
through a list of 60 to 80 at our level and at the manager
level."
1:21:26 PM
REPRESENTATIVE JOHNSON commented on the good track record of the
corporation, and he surmised that the six companies are likely
in a comingled fund because such a fund is profitable. He
asked, "We chose them for a reason, and wouldn't the fund
managers also have chosen them for reason?"
1:21:47 PM
MR. BURNS said he is not certain how to answer that question.
He proffered, "It could very well be that they're in a comingled
fund. I'm not sure exactly which managers have them now. ...
They're held in a separate account at this point, and if that is
a similar style to similar comingled funds, it could very well
be there. But we have people buying a selling the same stock on
a daily basis in two different accounts, and that is what makes
a market."
1:22:33 PM
REPRESENTATIVE JOHNSON suggested:
We still don't know if we're going to have any impact
on these six companies, because they could be
receiving capital from a comingled fund. So, we
really don't know that we're going to have a positive
impact, one way or the other.
1:23:01 PM
MR. BURNS responded:
We have no effect on the company. The day they sold
their stock to the public - whether it was to us or
someone else and we've ultimately bought that stock -
they receive the value at that point in time. If we
sell our stock to the retirement system of Minnesota
or we sell it to an individual here in Juneau, it has
no effect on the company. Their capital has been
raised.
1:23:32 PM
REPRESENTATIVE JOHANSEN asked who would be responsible for
discovering and then notifying the corporation's managers if
"three companies that are not identified" decided to start doing
business with Sudan.
MS. ACHEE said the bill directs the corporation to be
responsible for identifying which companies are believed to
directly support the government of Sudan. She continued:
Most of the management firms that the permanent fund
[corporation] hires we do hire to create a single
account that has our name on it, and we hold all those
stocks directly. Then there is another type of
account that we set up that is [a] comingled account.
We buy into them; other people buy into them. And so,
that's just kind of a description of how those two
different types of investments work. ... Out of the
47 stock and bond accounts we have, only two of them
are comingled funds.
1:25:19 PM
VICE CHAIR ROSES said one of the challenges of investing is in
keeping a portfolio diversified. He said at the time when he
was involved with the Alaska Retirement Management (ARM) Board,
contracts were made with money managers who were given a certain
dollar amount for investing and offered parameters around which
the investments must be made; however, the managers had the
latitude to go out and work within those investments to try to
maximize the gain. The success of those managers in being able
to continue in that capacity is dependent upon their production
of a "reasonable expectation on the return for those
investments."
[MS. ACHEE and MR. BURNS nodded.]
VICE CHAIR ROSES asked, "Do those contracts include tracking of
these types of investments or is that part of where the fiscal
note comes because this would be an additional contract that you
would have to go back and purchase from those money managers
that don't currently exist?"
1:27:03 PM
MR. BURNS responded that that is precisely what would happen.
He said managers are contracted for specific areas, including:
international, global, domestic, value, growth, and
capitalization. Mr. Burns mentioned "basis points" and said
there is a different fee arrangement that has to be made to
arrange, for example, for a manager to "do everything, but
this." He spoke of "passive funds" in which money is invested
passively, which is inexpensive unless there is customized
index. When a request is made to passively manage an index, but
with the exception of certain names, then the fund is "custom
passive."
1:29:01 PM
MR. BURNS, in response to a question from Vice Chair Roses,
confirmed that the permanent fund corporation has a general
consultant that monitors for accuracy the performance of each of
the managers as reported by those managers. He said limiting a
manager's judgments means limiting his/her ability to perform.
He added, "But, again, we have taken none of that into the
equation."
VICE CHAIR ROSES asked for confirmation that the corporation did
not include the cost of the consultant oversight of money
managers in its fiscal note.
MS. ACHEE answered no.
MR. BURNS offered his understanding that that is correct.
1:30:03 PM
MS. ACHEE added, "It wouldn't change the functions the account
associates [provide] for us." She indicated that the
corporation did account for potential manager searches.
1:30:14 PM
REPRESENTATIVE JOHNSON, after hearing what is not included in
the fiscal note, said it seems that the total could be
substantially more.
1:30:41 PM
MR. BURNS responded:
The people that have looked at this said our exposure
today is about $22 million. So, the lost earnings
from that probably wouldn't change that much. If you
start extrapolating to this list that currently has
somewhere between 60 and 80 [companies] - I really
don't know the number - or a broader list, you may
really have some impact at that point, by not being
able to ... have the full investment world to look to.
... Somehow this has been portrayed as we're
profiteering off of this, and we're not. These are
just administrative costs to implement this bill.
1:31:30 PM
REPRESENTATIVE DOLL said she thinks most people in the state
want to have an impact on genocide and feel that divesting is
the way to do it. However, she offered her understanding that
the testimony of [Mr. Burns] is that divesting would have very
little impact.
1:31:56 PM
MR. BURNS said he thinks that is what he is saying. He referred
again to the aforementioned report regarding divesture in South
Africa, and reiterated that in retrospect, people said it had
little if any effect on ending apartheid. He said once
companies raise the capital, they don't care who owns shares of
the stock; it's "out of their hands." Regarding the fiscal
note, Mr. Burns acknowledged that the numbers are large;
however, he said it must be kept in mind at all times:
"Everything we do has a lot of zeros involved." He said the
permanent fund is the twelfth to thirteenth largest sovereign
wealth fund in the world. He added, "We are kind of the proxy
for a U.S. sovereign wealth fund."
1:33:06 PM
REPRESENTATIVE DOLL asked if there is a better way of impacting
what happens [in Sudan] other than through the permanent fund.
She remarked, "I know it's kind of a huge, impossible thing."
1:33:30 PM
MR. BURNS said the corporation is not a foreign policy maker.
He added that although he is sure there are things that can be
done, [divesting in Sudan] is not the way to do it.
1:33:48 PM
REPRESENTATIVE JOHANSEN asked Mr. Burns if he has ever before
come before the legislature to discuss legislation that would
have impacted the fund through social decisions rather than
strictly through economic decisions.
MR. BURNS replied that he thinks there have been several
instances. He mentioned legislation regarding state-sponsored
terrorism, tobacco issues, and whether the state should invest
in the ExxonMobil Corporation.
MS. ACHEE interjected that she does not believe "Exxon has come
up with a legislative issue." She noted that there was a bill
introduced to divest the permanent fund from South Africa, but
it did not pass. She remarked that she was still in Middle
School at the time and, thus, did not testify. She said the
corporation testified two years ago on legislation that "would
have encouraged us to divest from Iraq."
1:35:14 PM
REPRESENTATIVE JOHANSEN asked if there have been bills
introduced in the past that would have guided the corporation
"more toward a social investment policy rather than strictly
economic."
MS. ACHEE said she is not aware of any.
MR. BURNS said he is not aware of any either other than "the
handful that we've talked about this morning."
REPRESENTATIVE JOHANSEN said, "I'd like to be able to try and
research that and get more of an understanding of the
conversation of that whole idea."
1:36:06 PM
VICE CHAIR ROSES recounted a suggestion made to the ARM Board in
the past that recommended that the board consider investing in
more environmentally and socially conscientious companies. He
stated, "I'll tell you: it was the most difficult fund to find
investments in; it was the most difficult fund to find a money
manager for; and it was also the one in which we had the least
amount of return."
1:36:50 PM
REPRESENTATIVE COGHILL questioned whether any of the other
sovereign world funds have been asked to [divest in Sudan]. He
offered his understanding that the largest of those is the
Norwegian fund. He concurred with those who testified
previously regarding the awfulness of the atrocities occurring
in Sudan. He said there have been many other atrocities that
have occurred during the 20th Century that would make the events
in Sudan look small by comparison, which he said is very sad.
He said it looks as though [the proposed legislation] would
bring about, at best, a minimal impact. He stated that he does
not want to use the permanent fund to dictate social policy. He
stated, "It's not my thinking that you intentionally have
invested money to propagate genocide, and I would hope that
those testifying today do not think that that is ever your
intention to invest in profit off of genocide. There are
companies that may, but I don't know that we've reached down
into their boardrooms to find out their motive on business
investment." He said he thinks the legislature is a good venue
through which the public can ask whether or not anything can be
done through the permanent fund or if something can be done
otherwise.
REPRESENTATIVE COGHILL asked if other sovereign wealth funds
have invested based on social policies.
1:40:36 PM
MR. BURNS responded that the Norway fund monitors a lot of
social issues. He said that fund is similar to the permanent
fund in that it is built on natural resources; however, it
differs from the permanent fund because it uses the money to
fund many of Norway's social programs. Mr. Burns offered his
understanding that a study is being done that judges the three
dozen sovereign wealth funds on two issues that are important on
the national and international level: Are the investments being
made for political or economic reasons and how transparent are
the funds? Alaska, Alberta, and Norway, he said, are the models
of transparency and economic investment.
1:42:25 PM
REPRESENTATIVE COGHILL said Mr. Burns brings up a good point.
He said, "I think the blindness with which we put on this as ...
[an] economic policy is kind of important. I suppose, if you
really wanted to make a comparison, it would be like making
profit by using the Internet when we know that many people are
violated by the Internet." He reiterated that he does not think
the fund should be made a tool to change social policy, but
emphasized that he thinks governments should be such tools.
1:44:13 PM
MR. BURNS reemphasized that although the mission is just, the
proposed legislation is not the right tool.
1:44:31 PM
BRIAN ANDREWS, Deputy Commissioner, Treasury Division, prefaced
his own testimony by saying he agrees with Mr. Burns' testimony.
Mr. Andrews paraphrased a passage from an article in Pensions
and Investments, dated 3/5/07, [entitled, "Performance of a bad
idea"], which read as follows [original punctuation provided]:
In Illinois, the Legislature is to blame and ought to
reimburse public pension plans in the state for the
cost of the divestment law. The $39 billion Teachers'
Retirement System of the State of Illinois, for
instance, estimates the law cost it $2.1 million so
far, including transaction costs; the Illinois State
Board of Investment, more than $850,000.
MR. ANDREWS questioned who would make up for the loss to the
employees and citizens of Illinois. He referred to another
section of the aforementioned article, which read as follows
[original punctuation provided]:
But Judge Matthew F. Kennelly, of the U.S. District
Court, Chicago, on Feb. 23 overturned the Illinois law
ordering funds in that state to divest. He wrote in
his decision: "First, the restrictions on … pension
funds' ability to invest in many equities and mutual
funds unquestionably constitutes irreparable injury.
Second, the plaintiffs have no adequate remedy at law.
Defendants are state officials who have sovereign
immunity from suits for damages."
MR. ANDREWS reported that currently the State of Alaska's
pension plans are underfunded by $8.6 billion. Any additional
expense or loss of investment performance will only increase
that amount, leading to even higher annual contribution rates,
he said. He reminded the committee that the average
contribution rate to the Public Employees' Retirement System
(PERS) is currently 35.2 percent, and the rate to the Teachers'
Retirement System (TRS) is 44.2 percent. Mr. Andrews said it is
difficult to determine what the overall cost impact of the
proposed divestiture would be to the retirement system, but he
said there would be a tangible and significant cost in
implementing and monitoring such a directive: approximately $3
million. That does not even take into consideration "under
performance" and "the increased volatility to the portfolios."
MR. ANDREWS concluded by stating that "all of us here" sincerely
wish to help the afflicted of Sudan and bring an end to the
conflict there, but unfortunately, he related, he does not
believe that HB 287 would have an impact towards that end. He
urged the committee to consider the tangible and intangible
economic impacts that the proposed legislation would have on the
state's pension plans and "the far-reaching, potential,
detrimental, long-term effects on its participants." He stated,
"The legislation is well-intended, and the desire to make a
difference is noble, but mixing moral and political agendas at
the expense of our citizens' financial security is not a good
combination."
1:48:13 PM
REPRESENTATIVE DOLL asked what the impact of that $10 million
would be on each person's permanent fund dividend. She said her
understanding is that it would be about $9.
1:48:32 PM
MR. ANDREWS deferred to Mr. Burns.
1:48:49 PM
REPRESENTATIVE JOHNSON said he wonders about the fiduciary
responsibility of Mr. Andrews as a manager and of the Permanent
Fund Board, and whether the proposed legislation would require
those entities to violate their fiduciary responsibilities.
1:49:26 PM
MR. ANDREWS replied that that is a good question for which he
does not have an answer; he suggested that the question of
fiduciary responsibility would require interpretation from the
Department of Law or from the legal community.
REPRESENTATIVE JOHNSON said that is a key issue, for which he
would like an answer.
1:50:00 PM
VICE CHAIR ROSES asked Mr. Andrews to confirm that none of Vice
Chair Roses' previous remarks regarding the investment
strategies of the ARM Board were misstated.
MR. ANDREWS indicated that he had not been present during those
remarks and, thus, could not respond.
1:50:46 PM
VICE CHAIR ROSES closed public testimony.
VICE CHAIR ROSES announced that HB 287 was heard and held, at
the request of Representative Lynn - the co-prime sponsor of HB
287 and chair of the House State Affairs Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
State Affairs Standing Committee meeting was adjourned at
1:51:39 PM.
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