Alaska's Revenue Chief Locked Up $75M, Skipped 7 Required Steps

In July 2025, Alaska's Department of Revenue commissioner signed a private-equity agreement that could pull up to $75 million⧉ from the state's Constitutional Budget Reserve Fund into a five-year minimum lock -- weeks after the legislature's own Senate Finance Committee had warned him the fund would likely be needed within one or two years.▸ He skipped seven of his department's own required investment steps to do it. He resigned the next month. An independent review⧉ found no evidence of self-dealing or crime -- but couldn't clear him on whether he met his fiduciary duty, either.

Alaska's Constitutional Budget Reserve Fund (CBRF) exists to cover state budget shortfalls -- it has ranged from about $297 million to a peak of roughly $12.7 billion since voters created it in 1991⧉, and stood at roughly $2.9 billion as of November 2025.▸ A 2000 statute lets the commissioner move a portion into a higher-yield 'subaccount' -- but only on the legal assumption that the money won't be needed for at least five years. That subaccount had sat empty since 2015.

By early 2025, then-Commissioner Adam Crum had a different idea: revive the subaccount and put CBRF money into private-equity infrastructure funds.▸ The state's own budget office had forecast the CBRF could be fully drawn down within two to three years⧉ -- Crum had seen that forecast himself, at the same quarterly meeting where it was presented. He pursued the investment anyway, framing it as a 'dual mandate': higher returns for the CBRF, and a chance for the fund managers to advise Alaska on in-state infrastructure projects.

Alaska's Division of Legislative Audit later found the commissioner skipped seven of DOR's own written procedures⧉ for exactly this kind of investment: he didn't seek guidance from DOR's investment officers or outside experts, didn't document why the opportunity beat other funding uses, didn't disclose the specific deal to the Investment Advisory Council at its scheduled review, and didn't notify the Office of Management and Budget or the Division of Legislative Audit before signing.▸ DOR's own chief investment officer recommended the CBRF's money stay liquid, given the state's likely need for it within five years. The commissioner signed anyway.

In May 2025, the Senate Finance Committee wrote directly to Crum, warning about the CBRF's liquidity and asking for his investment plans.▸ His June 27 reply never mentioned moving any of the fund into illiquid, longer-duration investments. On July 28, 2025, he signed a binding agreement with DigitalBridge⧉, a private-equity infrastructure manager, providing for up to $75 million in capital commitments -- with an initial $50 million subscription -- and a minimum five-year hold. In March, months before the deal closed, his office had already hired an outside law firm to handle it, bypassing the statutory procurement rule requiring the attorney general to approve legal-services contracts.

On August 7, 2025, the Governor's staff learned the contract had been signed.▸ Crum resigned effective the next day. Governor Mike Dunleavy commissioned law firm WilmerHale⧉ to review what happened; its 191-page report, released in January 2026, found no evidence of conflict of interest, self-dealing, or criminal wrongdoing. But it also found Crum's process 'did not involve rigorous due diligence,' and that he decided against notifying the Finance Committee chairs, OMB, or the Legislative Audit division before investing because he considered that kind of advance notice an 'abdicat[ion] of statutory authority' -- his own words, cited in the report. WilmerHale's conclusion: his deviations from protocol and lack of diligence 'raise significant concerns about whether he met his statutory fiduciary duties.'

Of the $50 million actually committed, $20.6 million was invested⧉ before the state sold the position, according to a letter from Acting Commissioner Janelle Earls reported by the Anchorage Daily News -- recovering most of the money but losing $860,000 to management fees and expenses along the way.▸ The Treasury Division's own February 2026 materials⧉ confirm the subaccount is now fully liquidated, its proceeds back in the CBRF's main account, and that the sale itself -- unlike the original investment -- followed the full non-routine investment process.

Senate Finance Committee co-chair Sen. Bert Stedman said the ex-commissioner 'circumvented his fiduciary duties intentionally, did not follow the statutes and used outside counsel instead of the Department of Law' and that 'he should be personally liable.'▸ Crum's campaign -- he is now running for governor -- responded that 'the Commissioner of Revenue has the authority to invest these funds for stronger, long-term returns.'

Governor Dunleavy signed Administrative Order 362⧉ in January 2026, directing DOR and the Department of Law to write regulations, by July 1, 2026, requiring attorney-general sign-off on fiduciary compliance and documentation of every step of the investment protocol before any future non-routine investment.▸ That deadline passed two weeks before publication. The order does not touch WilmerHale's fourth recommendation, though -- modifying the CBRF's sole-fiduciary structure. The commissioner of revenue remains the fund's only fiduciary, same as when Crum signed the DigitalBridge deal alone.