What the Heck is AIDEA

The inside scoop on a floundering, publicly-funded Alaska corporation

The Alaska Industrial Development and Export Authority — known as AIDEA — was created in 1967 and is a public corporation of the State of Alaska with a supposed mission to, “provide financing for Alaska’s business community, to expand the economy of the state, and to provide jobs for Alaskans.”

On paper, it sounds like a great idea, right? In practice, it’s been a disaster. 

The problems start with the way AIDEA is managed. AIDEA was created as a corporation of the State of Alaska, as well as a political subdivision within Alaska’s Department of Commerce, Community, and Economic Development. However, it operates like it has a completely separate legal existence from the state, with incredibly limited legislative or public oversight. AIDEA has repeatedly asserted that they do not require legislative approval to finance “economic development,” acting as essentially a slush fund used by Alaska’s governors, and lawmakers at times, to subsidize resource extraction.

The problems continue with the way AIDEA has managed funds. Over the years, AIDEA has overly focused on extractive megaprojects and ignored their primary mandate to expand opportunities for Alaskans. Even worse, their extractive focus has utterly failed to create economic growth or jobs. In total, AIDEA has cost Alaskans $10 billion with its poor investment choices. 

Over the last 35 years, AIDEA has:

• Received a net total of $301 million of public money from the State of Alaska, while AIDEA’s development projects have lost $233.3 million
  
• Performed poorly, earning an average of 3.8% on its investments (as contrasted with the Permanent Fund’s 9.4%). Its project “investments” specifically have earned negative 2.6%
  
• Subsidized a large number of projects that flounder or founder
  
• Alaskans would have collected $1.3 billion more in their PFD checks if AIDEA’s money had been invested in the Permanent Fund and disbursed
  
• Demonstrated “fundamental flaws” such as insufficient or unattractive deal flow; overly generous subsidies; and being beholden to outside influence, which has led to its poor performance

Basically, AIDEA’s investments in projects are more likely than not to cost, rather than make, money. 

AIDEA & The Arctic Refuge

When it comes to the Arctic National Wildlife Refuge, AIDEA scooped up drilling leases when most other companies were pulling out of the region. In 2021, AIDEA was one of just three bidders on 11 tracts for the Coastal Plain area leased under Trump’s 2017 Tax Act, winning seven tracts despite overwhelming public testimony in opposition to Arctic Refuge drilling. Since that time, the other two bidders walked away from their leases, leaving AIDEA as the only entity hanging on to this poor investment. They continue to argue that they are a valid leaseholder and that these leases — issued under a fundamentally flawed leasing plan crafted by President Trump — are a wise investment.

However, last week, a U.S. District Court upheld the Department of the Interior’s authority to suspend leases and oil and gas activities on sacred Gwich’in lands on the Coastal Plain of the Arctic National Wildlife Refuge. This means that those leases that AIDEA recklessly went after can be paused and reviewed — an urgent need in such a critical landscape.

What Happens Next?

History has shown that AIDEA is the grim reaper of Alaska megaprojects, and the foolish investment in Coastal Plain leases will be yet another stain on their track record if they don’t change their ways. It’s time for AIDEA to quit bidding on leases in the Arctic Refuge and focus on sustainable drivers of Alaska’s economy. They should focus on the needs of Alaskans, and not their corporate welfare programs that subsidize some of the richest resource extraction corporations around the globe.