Goldman Sachs, in Arctic drilling tiff with Alaska governor, hires veteran Juneau lobbyist

Alaska Gov. Mike Dunleavy speaks at a news conference at his Anchorage office last year. (Photo by Nat Herz / Alaska’s Energy Desk)

In December, investment firm Goldman Sachs said it would no longer do business deals that support oil drilling in the Arctic — and in Alaska’s Arctic National Wildlife Refuge in particular.

[Read more: Goldman Sachs becomes first major U.S. bank to rule out funding for Arctic oil]

In response, Alaska Gov. Mike Dunleavy suggested he could cut off the millions of dollars a year that the state pays to the Wall Street firm. Now, Goldman is playing defense: Last week, it hired a lobbyist, Wendy Chamberlain, to represent its interests in the state.

Chamberlain, one of Juneau’s most successful lobbyists, will advocate for Goldman on “issues relating to financing, investment strategies and advisory activities in Alaska,” according to a report she filed with state regulators.

Chamberlain and a Goldman spokesman, Andrew Williams, both declined to comment. But Chamberlain’s hiring should help the company preserve its business in Alaska, said Larry Persily, a former deputy revenue commissioner for the state.

“They’re an investment house — it is a smart investment,” Persily said. “They’re not going to change their policy on Arctic, oil and gas, green energy, renewables — that’s something they’ve decided they’re going to stick with. But for $75,000, they can make sure they don’t make too many enemies up here that would cost them a lot of money.”

Goldman’s new environmental policy says it will “decline any financing transaction that directly supports new upstream Arctic oil exploration or development,” including in the Arctic Refuge.

The policy says climate change — which scientists agree is driven by the consumption of oil and other fossil fuels — is “one of the most significant challenges of the 21st century.” And it cites potential impacts of Arctic drilling on habitat for endangered species and indigenous people’s subsistence livelihoods.

Producing oil from the Arctic Refuge has long been a goal of Alaska’s political leaders and the oil industry, and Congress formally opened the area to leasing in 2017. After Goldman’s announcement, Dunleavy told Fox News that the policy is “unfortunate,” adding that Alaska is an “oil state.”

Alaska Gov. Mike Dunleavy on Varney & Co.

Goldman Sachs will no longer finance arctic drilling as part of a larger effort by the investment bank to combat climate change. Alaska Gov. Mike Dunleavy joined Varney & Co. Wednesday to discuss what this means for his state.

Posted by Fox Business on Wednesday, December 18, 2019

“We do a lot of business with Goldman Sachs,” he said. “We’re going to have to reevaluate that, have a discussion with them.”

The next day, Dunleavy’s administration fired Goldman from a group of Wall Street firms it had hired to help borrow money to pay off state tax credits owed to oil companies. The borrowing plan has been stalled by a lawsuit, but if it moves ahead, the decision could cost Goldman between $200,000 and $300,000 in compensation, said Deven Mitchell, the state’s debt manager.

Far more valuable, however, is Goldman’s relationship with the Alaska Permanent Fund, a $67 billion pool of state-owned investments originally seeded with state oil revenue. The fund, managed by the Alaska Permanent Fund Corp., generates the cash used to pay Alaskans’ annual dividend checks.

Over the past three years, the corporation has paid Goldman a total of $16.9 million in fees for managing a chunk of the Permanent Fund’s assets. The firm currently manages some $400 million for the fund.

Goldman’s management fees declined last year as one of the Permanent Fund’s investment programs was discontinued. But beyond that, the fund’s relationship with the company doesn’t appear to be in jeopardy, and Dunleavy does not appear to be pushing the fund’s board of trustees to take any action, according to Craig Richards, the chair.

“I’ve had no conversations with the governor or the governor’s staff at all on the subject,” Richards said. “There’s been no proposal, that I’m aware of, to act in any way. My personal point of view is that there’s a very strong sense of not getting involved in politics.”

After Dunleavy, on Fox News, referenced his desire to have a “discussion” with Goldman, he did have an hour-long phone call with the company’s chief executive, David Solomon, according to Dunleavy’s public schedule. Dunleavy’s spokesman, Jeff Turner, did not respond to a question about what was discussed.

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