This from Twitter denizen "Hank," not his real name which he declines to give "for business reasons," is a good example:
While they did not earlier in the debate, over time those making the argument effectively have come to concede that they have no legal basis for their assertion Again, "Hank":Brad still doesn't get it. state officials TOLD the companies that they would get fully paid every year. And this was the practice. (1) — Hank (@AKFacts1) August 20, 2017
But they nevertheless claim an entitlement because:4) this does not mean that they have a legal claim against the state for not paying more.— Hank (@AKFacts1) August 20, 2017
Frankly, that rationale is utter nonsense.3) These companies relied on the state's representations. Perhaps they shouldn't have. But they did and feel burned.— Hank (@AKFacts1) August 20, 2017
Even if some state officials did make promises unqualified by references to the statutory limitations (and we doubt that they did), the officials making them had no authority financially to obligate the state beyond the terms of the underlying statutes. And as we consistently have made clear on these pages (and even "Hank" effectively concedes), those statutes limit the state's actual cash obligation each year to a percentage of the revenues the state receives from production taxes. See "How gullible is Alaska," http://bit.ly/2xfvzuI.
To argue that "the companies" somehow were misled into overlooking those statutory limitations isn't credible. All of the companies involved and their lenders -- all of them, every last one -- have lawyers, financial officers and financial advisers. And the first thing that those professionals do when engaging in their "due diligence" before participating in any governmental program is to read the fundamental statutes that establish and govern it.
If those professionals didn't do their reading, or did and nevertheless concluded that some state officials verbally could somehow magically bind the state beyond the terms of the underlying statutes, perhaps the companies have grounds for looking for compensation to the malpractice or liability insurance of their advisers. But the State of Alaska certainly isn't the one on the hook for that.
Some argue that payments beyond the limits of the state's statutory obligations are nevertheless also justified because the state's credibility somehow is on the line. In a recent interview, for example, Senator Cathy Giessel, head cheerleader for the effort to get the state to pay more than what the statutes require, argues:
"There’s now a phenomena out there spoken about by companies and investors called the ‘Alaska risk factor,’ and it refers specifically to the unpredictability of the State of Alaska, particularly in paying off the credits that we agreed to pay, said Giessel."See "Alaska ended cash credits to oil companies, but still owes nearly $1 billion," http://bit.ly/2uvsbL
But that isn't a state issue. If anything, it involves only the individual credibility of those who purported to commit the state to more than the statutes provide. Individual government officials may promise what they think they can deliver or how they may vote when the issue arises, but until the statutes are actually changed the state hasn't agreed to anything.
Those officials -- if there are any who made such "promises" -- shouldn't now be heard to push the state to pay more because their individual credibility is on the line. If they promised -- or in Sen. Giessel's words, "agreed" to do -- more than the statutes provided, any consequences should fall to them. The state's bank account shouldn't be tapped to come flying to the rescue of their tattered individual credibility.
Frankly, the statements made by those who claim the state is obligated to do more than the statutes require increasingly is striking us as the equivalent of the classic child's whine when confronted with a parental "no" -- "but you promissssssed."
As most parents will know, usually that situation arises when the child selectively hears what they want to hear, not what the parent actually said.
That is the case here. The statutes lay out what the state is obligated to do. The claim by the companies that they are "entitled" to more is nothing more than a whine hoping to motivate the state into giving more than the statutes provide.
As we said in an earlier column the relevant question comes down to "just how gullible is Alaska."
We hope the answer is, not at all.