Volume 4, number 7, August/September 2002 An Open Letter to the PFD Board, and the Result Editor’s Note: The following letter was published in the Anchorage Daily News, and resulted in Permanent Fund board members meeting with local citizens to discuss the issues raised. July 15, 2002 Fellow Alaskans: The United States capitalist system, particularly many of its corporations, is now clearly in the midst of a huge corporate crime wave. Enron, Haliburton, Worldcom, and many others have used irregular and dubious accounting schemes in collusion with their accounting partners, to defraud, corrupt and devalue the investments of millions of Americans, all Alaskans, most pension fund participants, and private foundations and citizens. Of course this includes Alaska’s great public treasure, the Alaska Permanent Fund. Our profound concern about the shattering of public confidence and the huge loss of wealth represented by these crimes and their eventual exposure and emergence, is that it puts all Alaskans at risk. This is due to the huge connection we have to corporate America through investment of billions of our dollars in the Alaska Permanent Fund. This situation will worsen. The Alaska Permanent Fund Board should take aggressive and serious steps to protect our future and its major resource through demands for justice, legal protection, and fiscal action. First, the Permanent Fund Board should demand doubling of the enforcement division staff of the Securities and Exchange Commission (SEC) with the most competent people available. You should also consider massive divestiture of stock investments in corporations which refuse to allow stockholder control of the company. Ownership should mean control. Now, corporations control the assets and stockholders are largely powerless to make necessary changes. As a carpenter in Connecticut was recently quoted, "I won’t invest one penny more in any stocks unless I know that brokers or corporate leaders who lie or defraud me will go to jail, AND pay back their fraudulently obtained wealth." That is the justice you should seek. The lost confidence in the stock market, and the declining prices and indices have already cost more than six trillion dollars! The Permanent Fund Board is in a unique position to demand action, protect our public assets, and to apply pressure on the federal government to ensure the well-being and safety of our Permanent Fund. We deserve this and will accept nothing less. You simply cannot allow this theft of our public wealth and the security it provides. If ever there was a time for action it is now. Particularly, you must demand these two actions immediately:
This call to action is urgent. The more you delay, the more will be lost. Respectfully submitted, At the meeting with the board members, Richard Seifert outlined the points raised in the letter and noted, "Some are now quoting the losses in the stock market valuation at $7 trillion." As a mental exercise, Seifert tried to convey to the board just how much $7 trillion really is, by exploring orders of magnitude:
Seifert asked, "How can you reflect or deflect public outrage in the direction of positive change and higher security and promise for the Fund? He suggested that this could only be done by opening fund investment policy to more wide-ranging options:
Seifert had the following observations: "The Permanent Fund Board seems very cognizant and on top of the issue of corporate fraud and responsibility problems. They have recently joined with other large group investors in an organization known as CII, the Council of Institutional Investors. This group includes most major pension fund boards and groups which invest funds in the U.S. for large groups of investors. This reflects a strength-in-unity approach on how to proceed to protect funds and retrieve stolen funds. The PF board plans a major discussion of the latest efforts of this group, which has a conference on corporate responsibility scheduled from Sept. 23-25, and the PF board’s annual meeting is scheduled Sept. 25 and 26 in Juneau. The PF board also has under consideration fifteen proposals from various legal firms for mounting class action and other relevant lawsuits to recover funds lost fraudulently." Tom Richardson added his observations: "It was my general opinion that what the open letter stated was similar to actions that were already being researched by the APF-BOD. The BOD is looking to strengthen its stance on corporate responsibility and appears to be exploring the potential for a class action suit but due to existing laws it becomes nebulous on who legally can be sought as responsible." | ||
 | | |
