A controversial no-bid, sole-source contract awarded to the grandson of a key political donor to Gov. Mike Dunleavy has been cancelled, the Anchorage Daily News reported today.
The decision was made by Clark Penney, the grandson of Bob Penney, to end his $8,000 per month contract with the Alaska Industrial Development and Export Authority for economic development. The four-year contract was valued at $441,000.
The contract came under intense scrutiny from both inside and outside the Legislature over what appeared to be a sweetheart deal to thank Bob Penney for a $350,000 contribution to an independent expenditure group that backed Dunleavy’s election in 2018. It didn’t help, either, that state officials struggled mightily to explain the decision to skirt the state’s competitive bid process or what, precisely, Clark Penney has been doing for the state.
In a statement, Clark Penney said his contract “has become a distraction leading to a challenging environment for my colleagues.”
Legislators have held several hearings scrutinizing the contract and even went on to approve changes to the budget that rebuked the state for the unusual handling of the contract.
“If the governor’s donors happen to be the best and that’s awarded through a competitive process, that’s fine,” said Rep. Zack Fields, D-Anchorage, during the budget hearing. “It’s inappropriate to do that in a sole-source, no-bid process.”
AIDEA head Tom Boutin said it was solely his decision to award the contract and that he knew Clark Penney was the only person able to do economic development work for $8,000 per month. He didn’t offer any evidence backing up his claims and later internal documents obtained by the Alaska Landmine suggested that the governor’s office had some level of involvement in the contract.
Questions about the contract reached Dunleavy during a Feb. 20 news conference where he personally pledged a “deep dive” into the contract. He said he wasn’t personally involved in the decision but didn’t go as far as to say that his office had nothing to do with it.
“We’re gonna find every piece and every detail. We want to be 100 percent sure because the governor’s office is a big office,” he said. “I know there’s the implication that there was a sweetheart deal with an individual. We want to make sure that there’s nothing been overlooked and there’s been no mistakes. We want to look into this thoroughly.”
The status of the investigation or the investigation launched by the Department of Law were not immediately clear on Tuesday.
At that same news conference, Dunleavy lashed out at Fields and Rep. Jonathan Kreiss-Tomkins for questioning the contract in the first place, saying “they really need to look at their own actions.”
After today’s announcement, Fields took to Twitter to retweet a link to the ADN’s story:
“Oversight works,” he wrote.
Though the goal has been to carry out Governor Dunleavy’s mission to work with industry and increase economic activity in Alaska, my participation has become a distraction leading to a challenging environment for my colleagues. I believe in the work the team and I are doing in creating a brighter future for Alaska, but at this time I will be stepping away from this contract effective immediately. My hope is the good work we started will continue.
Alaska is my home and passion. Everything I have done in this position is about giving back to the place I grew up and will raise my family. There are significant projects worth millions of dollars, we are removing barriers to doing business and creating relationships with industry. I leave knowing I helped move this forward as a member of the Alaska Development Team. I am confident they will finish the job. Serving Alaska has been a true honor.
I want to thank Governor Dunleavy, the administration, AIDEA and fellow members of the Alaska Development Team. I will be doing all I can from the sidelines to help our great State grow.
I am recalling Gov Sheffield’s favoritism shown to friend/contributor in sole source contract for $9.1 million lease for Fairbanks building in 1985.