Why Legislators Can’t Solve The LIO Mess

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If you’re like me, you’re watching the ongoing debacle that is the Alaska Legislature’s Anchorage Legislative Office (LIO) building saga with a bit of confusion and disgust. The decision on whether to stay in the current facility some have dubbed the Taj-MaHawker or move to another location, such as the state-owned Atwood Building, has now dragged on for months with no end in sight.

Most of us in the public now look upon the lawmakers who sit on the Legislative Council with bewilderment and contempt. How hard can this decision be? Just crunch the numbers and pick the lowest one. Is it really that hard?

What exactly is the problem?

After re-watching all of the Legislative Council meetings since December in an attempt to fully understand the situation, one thing stands out:  Legislative Affairs Agency (LAA) Executive Director Pam Varni is the problem. She seems to be gumming up the works but you’d never know it from reading media reports of the situation.

When legislators want to review something as complicated as a real estate deal, particularly one as large as the $44 million LIO project, they need someone who will give them good information they can trust. It would be foolish for them only to trust the numbers and assertions of the building owners, which includes developer Mark Pfeffer, without independent analysis. Just as you have your own real estate agent when you buy a home, legislators need someone on their side to give them sound information so they can decide what to do.

Ms. Varni is supposed to fill that role for the 60 state legislators as the head of the LAA. However, it has become abundantly clear the members of the Legislative Council have completely lost faith in her ability to give any credible information on this subject.

On December 4th, Legislative Council Chairman Sen. Gary Stevens R-Kodiak offered a memo, based on the work of Ms. Varni, outlining an analysis of the Legislature’s options. Committee members saw nothing but red flags. The ADN reported the meeting this way:

“During its afternoon meeting, the Legislative Council…spent two hours poking holes in an analysis of options, questioning Sen. Stevens, R-Kodiak, and legislative staff about the report’s assumptions.”

and

“The Legislative Council includes some of Hawker’s close allies in the House Majority leadership, but Stevens’ own colleagues in the Senate also questioned the credibility of his report.”

Rather than make a decision with questionable information, the Legislative Council postponed a decision until a meeting on December 19, when supposedly a better analysis, also overseen by Ms. Varni, would be available. That meeting went no better. Here are just a few quotes from a variety of legislators about the information they were given:

Speaker of the House Mike Chenault

“We need all information and options…. I see ulterior motives as to why numbers are how they are.”

Rep. Vasquez R-Anchorage

“We need to explore all the options” and “Looks like we haven’t done our homework.”

House Majority Leader Millett R-Anchorage

“We shouldn’t have half the info… that may be slanted one way or the other.”

Senate Majority Leader Coghill R-North Pole

“I would like to see us head in the direction of getting better numbers.”

Sen. Micciche R-Soldotna

“I want to make sure I have the right information:”

Given the Legislature’s collegial nature that frowns heavily upon individual members calling out each other or staff directly, those statements are pretty damning. Members of Legislative Council were in no uncertain terms saying they didn’t trust the data they were being given and questioned the motivations behind Ms. Varni’s work.

After that meeting on December 19, rumors began to spread that Alaska Housing Finance Corporation’s (AHFC) Deputy Executive Director Mike Buller had sent Ms. Varni a memo challenging her analysis. Mr. Buller was the man who had originally overseen the third party analysis – which was then certified by Ms. Varni, stating the LIO lease was 10% below market rates. His work was key to the original LIO lease being approved, both legally and legislatively.

Some people might question Mr. Buller’s original conclusions, but his thoughts are  both independent and relevant. Legislators must have also thought so too, because at both the meetings on December 4 and 19 they went out of their way to ask for more information and several including Sen. Kevin Meyer and Rep. Millett, specifically asked if AHFC provided any input. Ms. Varni evaded the questions without a direct answer multiple times.

What nobody knew at the time was Mr. Buller had in fact written Ms. Varni a memo the day before the December 4th meeting with two pages of bullet points outlining the flaws in her analysis. To be clear, that means Ms. Varni had input from AHFC on December 3 and withheld it during the Legislative Council meetings on December 4 and December 19 even when asked directly if it had been done.

The December 19 meeting ended with Legislative Council effectively postponing a final decision on the LIO for another 45 days. That period has come and gone with no decision being made, because once again the Legislative Council didn’t feel they had an analysis of their options they could trust. So instead of resolving anything, on February 11 they met and authorized the expenditure of another $35,000 to hire an “independent” analyst.

During that meeting Senator Stevens expressed the sentiment that they needed someone to “Give us some sound advice, financially, and I think that is what we’ve heard from everyone on the Council.”

The Alaska Dispatch News quoted Rep. Mark Neuman R-Big Lake as saying “The legislative process is a discovery process” and “When legislators are comfortable they’ve got the right answers and are making the right financial decisions, then we’ll move forward.”

So in theory, the Council is finally saying they have had enough. They are openly stating they don’t trust what they are getting from Ms. Varni, so they’re getting their own independent analysis. But what is the $35k they are spending independent of? The only logical conclusion is that they want it to be independent of Ms. Varni herself.

However, in vetting the contract for $35k, who do you suppose Sen. Stevens tapped to oversee this independent analysis? You guessed it, Pam Varni!

The Legislature just gave $35k to Ms. Varni to contract and oversee a report needed only because they can’t trust her on the subject. Is there any doubt if she oversees the supposedly “independent analysis” what that report will say? I’d bet my beautiful Wasilla townhouse it comes back that “Ms. Varni was right all along.” Heck, if you gave me $35K to say your real estate analysis was right, I’d probably find some way to agree.

They say insanity is doing the same thing over and over and expecting a different result. Welcome to the insanity of the Alaska State Legislature!

This whole situation has the feel of an administrator trying to rig the system in order to push through an outcome the administrator, and not our elected representatives, has deemed best. Why she would do that we don’t know. Rumors say she has long hated the idea of Anchorage having legislative space that allows them to hold legislative sessions in Anchorage, as the current LIO has. But that is just rumor, the truth is we don’t know her motivations.

If you think hat is an unfair charge to level at Ms. Varni you should listen to this clip of the Legislative Council meeting from March 22, 2012; you have to wait until the end for the payoff, but I guarantee you, it will compete for both the funniest and most disturbing legislative hearing you have ever heard. It is also eerie how reminiscent it is of the LIO discussions we hear today.

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Ms. Varni may be a dedicated public servant, but she has a history of obfuscation, if not outright lies to get legislators to approve her pre-chosen ends. If our legislators are going to find any acceptable way out of the LIO quagmire they have put us in, they need good information and a solid process in which we can all have confidence. As long as Ms. Varni is part of the process, that will never happen.

The Legislative Council should appoint a small committee of its members to be in charge of the process without the participation of Ms. Varni. Only then can we be sure the results are the true will of the elected officials.

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2 Comments on "Why Legislators Can’t Solve The LIO Mess"

  1. None of this relates to the source of the problem which was the sole source procurement process that should have by now precipitated a criminal investigation. As to this latest contract ,this article states: “The Legislature just gave $35k to Ms. Varni to contract and oversee a report….” That is not what the contract states. The contract is signed by Senator Gary Stevens as the Procurement Officer and Project Director. I don’t see how that allows this to be Ms. Varni’s contract.

  2. Rumor had it the initial construction budget was promptly doubled with a single Change Order of an additional $5 million. Any truth to that one?

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