Bob Penney spent more than $300,000 to get Gov. Dunleavy elected. Then his grandson got an $8,000-a-month no-bid contract.

Clark Penney, a grandson of developer Bob Penney, carries a box into the Alaska Division of Elections office in Anchorage in 2015, when he was working on an initiative to ban commercial setnet fishing in certain parts of the state. Penney was recently hired by the state under a no-bid contract — after his grandfather, Bob Penney, donated more than $300,000 to an effort to help elect Gov. Mike Dunleavy. (Alaska Journal of Commerce file photo)

Developer Bob Penney spent more than $300,000 to help elect Republican Gov. Mike Dunleavy.

Now, his grandson’s company has been hired by the state under a no-bid, $8,000-a-month contract.

Clark Penney’s company, Penney Capital, was hired to help with a Dunleavy administration initiative, the New Industrial Development Team, to bring new businesses to Alaska and expand existing ones, according to a copy of Penney’s contract.

The contract was first reported by the Alaska Landmine, a political blog.

Penney is the latest in a series of appointments and hires by Dunleavy’s administration that have raised questions, even among his allies, about whether they’re driven by personal and political allegiance rather than objective qualifications. Last month, a high-level $94,000-a-year labor relations job went to a 25-year-old with no labor relations experience who had worked on Dunleavy’s campaign and as an assistant to Dunleavy’s chief of staff.

Several other Dunleavy picks withdrew from consideration for state positions after generating controversy during the Legislature’s confirmation process.

“The sole-source contract to an individual who doesn’t appear to have the experience to do the job is almost unbelievable when you add in the campaign connection,” Rebecca Logan, a Republican and former candidate for Anchorage mayor, wrote in a Facebook post responding to the Alaska Landmine’s story.

Logan, who supported Dunleavy’s campaign, added: “I hated it when [former] Gov. [Bill] Walker had the friends and family job program — I hate it in the Dunleavy administration also. This is not good government.”

The state has procurement laws and regulations that govern hiring, in order to make sure contracts go to the most qualified people and businesses. Those regulations generally require contracts to be put out to competitive bid.

That didn’t happen when Penney was hired in March by the state’s economic development arm, the Alaska Industrial Development and Export Authority. AIDEA’s executive director, Tom Boutin, signed a waiver in March exempting Penney’s contract from standard bidding requirements.

Penney has worked at Morgan Stanley and Merrill Lynch, and he’s now listed as a financial adviser at a California-based firm, Cypress Wealth Services, that manages money and advises “high net worth families, business owners, and institutions,” according to the firm’s website. Penney has offices in California and Anchorage, according to the website, and Karsten Rodvik, an AIDEA spokesman, said he believes Penney will be able to continue his work at the financial services firm while under contract with the state.

AIDEA, in its written justification of the no-bid contract, said Penney’s experience and network of investors will be “invaluable” to the Dunleavy administration’s economic development team and in “bringing new business and development opportunities to the state.”

A rejection of the waiver would have delayed the governor’s agenda, the justification said.

Penney didn’t respond to requests for comment, while Dunleavy’s office referred questions to AIDEA. Rodvik said he did not know the specific legal or regulatory authority that AIDEA used to hire Penney on a no-bid basis. But he reiterated that the need to go outside the standard competitive process stemmed from the urgency of the work.

“The goal here was to get moving,” Rodvik said. “It was important that there not be any delay in the work of this new industry development team, or delay in achieving tangible results.”

Clark Penney is a grandson of Bob Penney, who gave more than $300,000 to a political group that supported Dunleavy in last year’s election. Before he was elected, Dunleavy said that when it comes to policy, he would treat Bob Penney like any other constituent.

Clark Penney’s contract with AIDEA calls for him to earn $8,000 a month, plus travel expenses, through June. It includes an option for three one-year extensions, with a total budget of $441,000.

Penney is working from state offices in the Atwood Building in downtown Anchorage, Rodvik said.

The money for Penney’s contract comes from the Department of Commerce, which has an existing economic development office that could be reorganized or eliminated this year.

In his budget released in February, Dunleavy proposed to move Alaska’s three economic development specialists from the commerce department into the governor’s office. But now the Legislature is considering eliminating those three jobs altogether.

The commerce department also houses the New Industry Development Team to which Penney belongs. The team has not been officially announced, but a fact sheet lists Penney as its “managing director.” Its 11 other members include several other commerce department employees; Mark Parker, the chief executive of a holding company of an Alaska Native corporation; and Nick Begich, a tech entrepreneur.

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