Legislature(1999 - 2000)
02/08/2000 02:10 PM Senate MER
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
JOINT SPECIAL COMMITTEE ON MERGERS
February 8, 2000
2:10 P.M.
MEMBERS PRESENT
Senator Rick Halford, Chairman
Representative Joe Green, Vice-Chairman
Senator Drue Pearce
Senator Johnny Ellis
Representative Beth Kerttula
Representative Brian Porter
Representative Jim Whitaker
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
Discussion of BP Amoco ARCO merger
PREVIOUS ACTION
See the Joint Special Committee on Mergers minutes dated 6/11/99,
7/28/99, 9/24/99, 9/25/99, 11/18/99, 11/19/99, 1/12/00, 1/18/00,
1/19/00, and 1/25/00.
ACTION NARRATIVE
TAPE 00-10, SIDE A
Number 001
CHAIRMAN HALFORD called the Joint Special Committee on Mergers
meeting to order at 2:10 p.m. and said since the Committee's last
meeting, the Federal Trade Commission (FTC) had filed an
injunction. He recapped also that they had the committee report
and the staff report that was before them, but didn't reach a
conclusion.
SENATOR ELLIS moved that the Joint Special Committee on Mergers
oppose the merger of British Petroleum Amoco with ARCO as embodied
in the amended Charter for the reasons stated by our consultants as
not in the best interests of Alaskans.
CHAIRMAN HALFORD said that he personally didn't think they needed
to go that far in their recommendation. The staff report lays out
reasons and considerations with regard to both the Charter and
original merger. He didn't necessarily disagree with the
conclusions, but he thought there would be enough differences
before them in the negotiating process that they would want to be
a little more open to something that could truly represent a
resurrection of ARCO.
SPEAKER PORTER agreed with his approach and at a minimum wanted to
"underscore the fact that my intent of that motion would be the
merger as defined originally being non-competitive and not being
suitably assisted by the charter agreement. What might
subsequently come through negotiations is yet to be determined, and
I want to, colloquially speaking, keep my powder dry on that one,
because it might be something that would be in the best interests
of the State."
SENATOR ELLIS said that was the "moving target" argument and he
doesn't agree. If that argument prevails, we'll never take a
definitive position in time for it to have any effect, whatsoever.
A definitive action by this body is about two weeks late. He
thought the Committee might consider going further by encouraging
the Legislature to intervene in some manner so they are a party to
further discussions and maybe a negotiated settlement in the future
that would amend the current version of the Charter where they
could find some common ground.
REPRESENTATIVE KERTTULA agreed with Senator Ellis saying she
thought they should be forthright. She also thought the "target"
had stopped with the FTC's filing of an intervention request. It's
clear that one of the arguments is whether the Charter, itself, is
going to meet the antitrust requirements. Our consultants'
recommendations focused heavily on that point. She thought
adopting their report was timely and speaks well to what is going
on. She thought they would do well by embodying both feelings and
suggested: "oppose the merger as explained in the final report to
the Joint Special Committee on Mergers by our consultants, and add
the date." That explains carefully what the consultants and
lawyers found and clearly opposes the merger at this point and
would be easily understood.
If something subsequent happens, she hoped the Committee would keep
working. She thought there would be other issues.
CHAIRMAN HALFORD said he would have less concern with those words,
because they are said at this point in time.
SENATOR ELLIS responded that he would like to amend the motion to
state, "We oppose the merger as explained in the final report to
the Joint Special Committee on Mergers by our consultants, dated
January 24, 2000, as our formal Committee report on the proposed BP
Amoco/ARCO merger." He, then, asked the committee secretary if she
got all the words and then he repeated his motion as follows: "The
Joint Special Committee on Mergers opposes the merger of BP Amoco
with ARCO as embodied in the amended Charter for the reasons stated
by the Committee's consultants as not in the best interests of
Alaskans." He said he was open to further discussion.
Number 536
REPRESENTATIVE GREEN agreed that the "moving target" concept is
weak, but the Administration has already made their position clear.
They could make a decision among ourselves, but that wouldn't mean
the Legislature was in concurrence. He thought there would be
divisions of purpose in both the minority and majority. He was
concerned they would say they are against something, unless they
specified what was clearly the Charter, not necessarily the merger.
That could conjure a lot of false feelings in some people's minds.
They definitely want what's best for the State.
CHAIRMAN HALFORD noted that the committee report dealt with both
the Charter and the merger. He reminded them that the committee
report they have before them is a distillation of a very complete
report including a lot of confidential information.
SPEAKER PORTER suggested instead of saying "the merger" saying "the
merger configuration" as embodied in the amended Charter.
CHAIRMAN HALFORD called an at ease from 2:20 p.m. - 2:24 p.m.
CHAIRMAN HALFORD said he thought the staff report was much more
important than any political statement that might sound better. He
intended to have something that was one sentence long that they
could get some consensus on. Every element is going to sound good,
but the critical point is what is the committee report.
SENATOR PEARCE asked if the committee report sticks to the original
merger or to both (the Charter).
CHAIRMAN HALFORD answered that it sticks to both.
SENATOR PEARCE said she thought that should be made clear.
REPRESENTATIVE KERTTULA agreed with Chairman Halford on the
underlying reason. It's more important to be embodying what is
said in the report, but the report does refer to both. They could
say they oppose the original merger and the merger configuration as
embodied in the amended Charter for the reasons enumerated in the
consultants' report, and give the date to cover both ends. She
thought that wording would make it clearer for the public.
SENATOR ELLIS moved the latest version of his motion as follows:
"I move that the Joint Special Committee on Mergers oppose the
original merger and the merger configuration of BP Amoco and ARCO
as embodied in the current version of the amended Charter, dated
December 2, 1999, for the reasons enumerated in the consultants'
report, dated January 24, 2000, as not in the best interests of
Alaska."
There were no objections to the motion and it carried.
CHAIRMAN HALFORD noted they had a copy of the State's motion to
intervene, the Summary of Actions with Regard to Other States:
California, Oregon, and Washington. He asked if there was anything
else anyone wanted to go through. He hoped to continue the
dialogue.
SENATOR PEARCE noted the lack of a fiscal note.
CHAIRMAN HALFORD responded the fiscal note they requested in July
or August and that was also requested in December, he assumes the
Administration will tell them that the paper they presented at the
last meeting was that. However, he said that was indeterminate.
SENATOR ELLIS said the Governor stated that one of the reasons he
intervened was to have participation in a negotiated settlement
that might come between the FTC and the companies. He asked how
the Legislature might have a role in the settlement to strengthen
the entire state hand.
CHAIRMAN HALFORD said he didn't know the answer to that off the top
of his head. There was interaction at the staff and Commission
level on things they are interested in that come out of the
Committee's confidential report. He didn't know that they had any
standing independent from the Administration to take any legal
action. He thought the Legislature could consider resolutions back
and forth, but he didn't know what the outcome of that would be.
He stated that they don't have a formal standing in any way, but
because of the confidential information they are privy to, they
will be asked questions and may be asked to participate in some
way. "Every time the Legislature tries to take legal action
outside of the Administration, we lose. We lose on standing cases
before they ever get started."
SENATOR ELLIS agreed, but he wanted to explore the possibilities
with their legal counsel to see if they had any suggestions for
even an informal role in what he thought would be a negotiated
settlement. He wanted to make sure all the bases are covered.
Number 816
REPRESENTATIVE KERTTULA agreed, although she thought they didn't
have any formal standing rights. There might be an avenue for an
amicus or at least something informal. It would be helpful to know
what they think.
CHAIRMAN HALFORD said with the concurrence of the presiding
officers and the ability to pay the bill, he hoped they would keep
at least some level of activity of our attorneys so they can inform
us of what happens. As he reads the newspapers, it changes almost
every day. The last thing he heard is that the process for a
temporary injunction has been set aside so they can go to the
permanent injunction.
SENATOR PEARCE asked that the D.C. attorneys and Mr. Boness be
asked to prepare in layman's terms something that could be
distributed to all the members of the Legislature, not just to
those who have signed the confidentiality agreement. She wanted to
know where they and the FTC are and what the schedule looks like.
Number 1328
SENATOR PEARCE, in reference to Senator Ellis' comment about them
intervening into the negotiation to a settlement with the court,
said she hadn't heard of anything like that. She didn't think the
FTC had done anything like that before, either. They don't listen
to very many people. She wanted them to discuss that. If the
State intervenes, does that give them some position before either
the court or the administrative hearing officer. She didn't quite
know the question to ask. She didn't know how intervening gave
them any standing.
CHAIRMAN HALFORD said his question was, you can file an amicus at
one level, but you can actually be an intervener beyond that. He
thought the Administration had chosen to be an intervener in an
effort to be a party to the case versus a friend of the court.
SENATOR PEARCE thought they should schedule a time for the Attorney
General to come before them and explain their intention and
filings.
CHAIRMAN HALFORD said she could request a fiscal note, again.
SENATOR PEARCE agreed and added if nothing else, the legal costs
are getting high.
CHAIRMAN HALFORD said they could probably get a status report from
their attorneys and request a presentation by the Administration
within the time schedule. It looked like March 13 was the first
date of anything happening now.
REPRESENTATIVE GREEN asked if he intended to have it before the FTC
hearing.
CHAIRMAN HALFORD said it would definitely be before the 13th of
March. He adjourned the meeting at 2:35 p.m.
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