In Alaska, oil is king. A third of the state’s jobs are tied to the industry. Political campaigns have been won and lost on oil taxation platforms. It is a major part of many media beats: energy, business, courts, and politics, to name a few.
And, at the moment, oil is at the center of a disagreement between editorial employees and top executives at Alaska Public Media, which operates a TV channel, radio station, and website, and reaches 96 percent of the state through an affiliate network.
At issue is whether it’s appropriate for Bernie Washington, APM’s chief financial officer, to sit on a board that plays a key role in determining oil tax revenues. Washington and Steve Lindbeck, the general manager and CEO, don’t see a problem. But a number of journalists in APM’s seven-person newsroom do—and they worry about a conflict of interest and even a loss of public trust in their reporting. “My management doesn’t understand how bad this looks and how bad this actually is,” said Steve Heimel, a senior editor and producer and the host of Talk of Alaska.
To try to summarize the issues here: Companies that use the trans-Alaska pipeline to ship oil pay taxes to the municipalities the pipeline runs through. Those taxes are based on a valuation set by the state Department of Revenue. But when municipalities believe the value is too low, or oil companies believe it is too high, they can appeal to a five-member, nonpartisan State Assessment Review Board. (The board’s rulings, in turn can be appealed in court—a process that can drag on for years.)
Last year, the Department of Revenue assessed the pipeline’s value at $7.2 billion. Both municipalities and oil companies appealed, and the SARB placed the value at $11.9 billion—giving the municipalities millions more in tax revenue more than the oil companies and even the state thought they deserved.
Gov. Sean Parnell, a Republican who has worked to push tax breaks for oil companies through the legislature, believes the SARB valuation was too high. As governor, Parnell also gets to appoint volunteer members to the board. Not long ago, he fired the board’s chairman and announced two new appointees to fill vacancies.
One of these nominees withdrew his name from consideration just before the confirmation hearing almost two weeks ago; it turned out he was not, as state law requires, an Alaska resident. The other nominee was Washington.
Washington’s appointment, which will come up for a vote in the legislature on April 11, has not been broadly controversial. But if he is confirmed, the decisions he and the other board members make could be part of news stories for years to come. The board almost certainly will be in the news for the next several months, as a referendum on the oil tax breaks comes up for a vote in August and Parnell runs for re-election in November. The board itself is not supposed to be political in nature, but, as Lindbeck acknowledges, “there’s a lot of political theater around it right now.”
Journalists at APM are worried about how their coverage of that theater will be received if Washington’s on the board.
“My concern lies with the public’s perception of our independence in that regard,” Lori Townsend, APRN’s news director, wrote in an email. “The SARB is a highly political board that, especially in an election year, with so much heat surrounding the issue of oil taxes, the Parnell administration and the oil companies, could generate a negative perception.”
Another member of the newsroom who asked not to be named called it a “clear conflict,” but one that management couldn’t see.
“It opens us up to a level of scrutiny that we’re going to find difficult to deal with,” this person said. “The people at the top do not realize the full import of this.”
Heimel, the Talk of Alaska host, was blunt: “We are aghast, quite frankly, aghast that our management doesn’t understand that this is a solid, more than apparent conflict of interest.”
APM’s coverage has so far addressed the issue by noting that Washington “has served as the chief financial officer of Alaska Public Media, the parent company of KSKA, KAKM and the Alaska Public Radio Network, since 2010. Prior to that, he worked for ConocoPhillips.”