A records request sent to the Alaska Industrial Development Export Authority (AIDEA) revealed that businesses associated with three board members and one employee received over $400,000 in CARES Act grants. AIDEA has seven board members. AIDEA board member and chair Dana Pruhs received $90,630 for Icy Strait Aviation and Quality Sand & Gravel. AIDEA board member Bernie Karl received $100,000 for Chena Power. AIDEA board member and former State Senator Anna MacKinnon’s brother-in-law Neil MacKinnon received $100,000 for Alaska Laundry. And AIDEA Commercial Loan Officer Leona Hakala’s husband Steve Hakala received $114,069 for Canoe Bay Outfitters and Commercial Fishing.
All of the applications were submitted between August 27 and September 2. The applications associated with the three board members (Anna MacKinnon, Bernie Karl, Dana Pruhs) were submitted within a two day period from August 31 to September 2. According to the Alaska Department of Commerce, Community, and Economic Development website, anyone who applied on or after September 2 after the program was oversubscribed should “be aware that there is a high likelihood your application may not be funded.” Applications were closed on September 15 after more than $100 million in excess of the $290 million allocated had been requested.
In May the AIDEA board unanimously passed a resolution that created AK CARES Funding Program. This was funded from the $1.25 billion in CARES Act money Alaska received from the federal government. According to their press release the program was created “to support small Alaska businesses that have been impacted by the COVID-19 pandemic. This program is in partnership with the Alaska Department of Commerce, Community, and Economic Development (DCCED), and Credit Union 1.” The press release also included:
We recognize the serious harm that has come to Alaska’s small businesses as a result of the COVID-19 economic crisis,” said AIDEA Board Chairman Dana Pruhs. “With direction from DCCED and partnership with Credit Union 1 in this critically important effort, we are committed to helping bring relief to businesses throughout the state.
It concluded with, “The Alaska Industrial Development and Export Authority is a public corporation of the state. AIDEA’s purpose is to promote, develop and advance the general prosperity and economic welfare of the people of Alaska.”
A business license search showed the following breakdown in ownership for the businesses who received grants.
Alaska Laundry ($100,000)
Alaska Laundry has several shareholders. Neil MacKinnon is the president. John MacKinnon, who owns 23.2% of the business, is Neil’s brother and the husband of Anna MacKinnon. John MacKinnon is also the current Commissioner of the Department of Transportation and Public Facilities.
Chena Power ($100,000)
Chena Power is 100% owned by Chena Holdings, Inc. Bernie Karl is the agent, director, president and treasurer of Chena Holdings.
Icy Strait Aviation ($11,375)
Icy Strait Aviation is 100% owned by Meridian Investments, which Dana Pruhs owns 100% of.
Quality Sand & Gravel ($79,255)
Quality Sand & Gravel is 100% owned by Dana Pruhs.
Canoe Bay Outfitters ($81.723)
Canoe Bay Outfitters is 50% owned by Steve Hakala, husband of AIDEA employee Leona Hakala. Leona Hakala is listed as the business’s agent.
Commercial Fishing $32,346)
I assume this was a for a commercial fishing permit.
An interesting legal question would be: Does Alaska Statute 39.52.150., Improper Influence in state grants, contracts, leases, or loans apply to these grants? In May the AIDEA board voted to create the AK Cares Funding Program and then, months later, board members applied for grants.
Do you know if these are outright grants or are they loans that will need to be repaid?
Grants
Got it. Looks like a legally questionable, morally bankrupt, transfer of wealth to the already affluent.Why am I not surprised?
AIDEA should be disbanded.
To those in the smaller government, no welfare kind of politics in that group. Ironic, no?
FYI, the MacKinnon family has owned Alaska Laundry since 1890. It was founded by John & Neil & Debbie’s (Sund) great grandparents (Jane MacKinnon is their mother, the other shareholders are her children & grandchildren).
The company also has substantial Juneau commercial real estate holdings. Thanks to great-grandpa, the family also owns (and receives royalties from) claims that comprise a major portion of the Kensington Mine.
Bernie Carl? Throwing money away.
The AIDEA is one of the main reasons Alaska is Billions of dollars in debt. Delta Barley Farms, Valdez & Seward Grain Terminals. Mackenzie Dairy Farms, loans for “businesses” that are really realestate speculation. Virtually everything AIDEA gets involved with is a loser for taxpayers and the State of Alaska. AIDEA needs to be audited by a reputable auditing company and sleazy loans(gifts?) and ridiculous investments exposed. Alaska would be better off if AIDEA had never gotten a dime of State money. Shut AIDEA down now.
Marlinm,
Also, AIDEA is a vehicle purposefully intended to destroy competition using political influence. There will be no “level playing field” once AIDEA gets involved.
Thanks again Jeff! Of course this is improper political influence. Yet, that is the entire purpose of AIDEA – direct public funds to reward political loyalty and eliminate competitors. So who “looks into this”? Our appointed Attorney General? The Legislature? Not going to happen unless political damage can be be inflicted on the “enemy”. Afraid it will have to be the Feds (again).
You raise fair questions. I tend to give the benefit of the doubt to people who are providing a public service. These grants do not seem excessive. But the principle raised here is fair, however large the act. I personally would never seek a benefit from an agency I am directing or had oversight. But not everyone shares that view. If the purposes are legitimate and the businesses are eligible, why not? I have more issues with the public largess that has been forked out to Churches like the Anchorage Baptist Temple. They are politically partisan, in violation of their… Read more »
You could answer your own question about AS 39.52.150 by finding out whether these individuals took official action related to the grants and disclosed their interests. If you did that and found something, then you’d have an interesting story. As it is, it just seems like it could be an interesting story.
What part of “In May the AIDEA board unanimously passed a resolution that created AK CARES Funding Program.” did you not understand?
Disclosures were not made until AFTER they received funds and it was questioned. An email went out to all AIDEA/AEA staff asking if anyone had applied for or received the funds.
Lol and my business couldn’t get 5k to help with rent
According to AIDEA, those individuals received AG approval to receive those funds. Just wondering, did they receive that approval prior to applying for the funds or after they were caught? There is definitely an appearance of conflict of interest. Also, as a group of individuals who have bragged how they only want to help the Alaskan people; if you knew small businesses were going out of business because of lack of funding, and you knew you could keep your business doors open, would you not allow those small businesses to receive the money? Obviously those millionaires needed the money more… Read more »
Alaska CARES funding is not the only thing current and past Board Members and Employees are receiving from AIDEA. They are also more likely to receive AIDEA Business Loans. All a Board Member has to do is recuse himself/herself from the vote. However, that doesn’t keep those loans from seemingly getting preferential treatment. As part of the Alaska CARES funding, isn’t there also an AIDEA program that allows businesses to defer costs or have loans reconstructed? I would assume some of these same businesses are receiving these advantages as well. What information has AIDEA gathered from the program?… A lot… Read more »
This hasn’t gotten much press. https://www.alaskajournal.com/2020-11-11/audit-finds-225m-mustang-loan-%E2%80%98inappropriate%E2%80%99-legal