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Jeff Jessee, Interview 1, Part 3

In this third part of his first interview, Jeff Jessee was interviewed by Bill Schneider with videography by Deborah Lawton and Aaron Elterman of KUAC radio/tv, Fairbanks on November 30, 2009 in a recording studio at KUAC radio/tv on the University of Alaska Fairbanks campus. 

Digital Asset Information

Archive #: Oral History 2006-15-20_PT.3

Project: Alaska Mental Health Trust History
Date of Interview: Nov 30, 2009
Narrator(s): Jeff Jessee
Interviewer(s): Bill Schneider
Videographer: Deborah Lawton , Aaron Elterman
Transcriber: Carol McCue
People Present: Karen Brewster
Location of Interview:
Funding Partners:
Alaska Humanities Forum, Alaska Mental Health Trust Authority
Alternate Transcripts
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Section 1: Key players in the development of the Mental Health Trust Authority framework.

Section 2: His role in the settlement negotiations and how he ended up doing a lot of work on the legislative side of the process.

Section 3: Mentors in the Alaska State Senate that helped Jeff work through the legislative process to get the Mental Health Trust settlement passed.

Section 4: Acceptance and approval of the Mental Health Trust settlement bill, and disagreements between the attorneys over the final outcome.

Section 5: Success of the Mental Health Trust’s Land Office, and how he became the Chief Executive Officer of the Mental Health Trust Authority.

Section 6: Applying the model of the structure of the Mental Health Trust Authority to other state programs, such as education.

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Section 1: BILL SCHNEIDER: So this rather innovative structure and organization, who were some of the people behind it, the drivers that made that happen?
JEFF JESSEE: Well, different parts had different authors. The separate appropriation bill and the conference of integrated mental health plan, I think that goes all the way back to the work that Jim and David did early on with Arliss Sturgulewski in the senate Health, Education and Social Services Committee.

That's where the programmatic pieces were incubated is going way back there.
As far as the asset pieces, Julian, of course, Julian Mason, was leading the discussions about the settlement. And I don't know if they were so much his ideas as sort of the obvious solutions to barriers to making this deal.

For example, on the land, when the development community balked at the idea of a new entity, a new bureaucracy being created, well, that meant they wanted DNR to manage it. And so the issue there was just, you know, could DNR appropriately manage this land. And in fact, that would become a major dispute in the approval process.

Jim and David were adamant that DNR could never properly manage this land under any scenario, and we were more confident if they were entitled to develop regulations that would be different than DNR's normal regulations, that yes, they could.

The Permanent Fund was also sort of a no‑brainer. Again, the legislature didn't want this unknown gang of seven coming out of nowhere to get their hands on $200 million.

And so somebody else had to manage the money. Well, who do we know with the expertise and ability to manage very large sums of money? Hmm. Well, that's a small pool. That's the Permanent Fund Corporation. So those things kind of just fell out naturally as the settlement progressed.

Section 2: BILL SCHNEIDER: Good. Well, let's get back to your career, then.
BILL SCHNEIDER: You were actively involved in these negotiations.
JEFF JESSEE: Yeah, I was. And ‑‑ and in some ways, I had perhaps some of the best access to the legislature.

And the reason for that is I was the only one of the four attorneys who was working for a salary and not being paid by the hour. And there was a fair amount of resentment, particularly of Jim and David, in the legislature for the fees that they were collecting.

I mean, they were substantial because they were doing a lot of work and the state had been ordered to pay interim fees. So they were getting their fees paid, and there was a lot of talk in the legislature about, well, no wonder this case is going on so long.

Now, I always felt that was pretty unfair because, you know, I never thought Jim and David were doing anything other than trying to resolve this as quickly as they could, but you heard that a lot in the legislature.
And even Philip, you know, was collecting interim fees and that came up.

Well, I was making $50,000 a year. And so a lot of times they were more willing to talk to me than they were to talk to some of them. You know. And so that's a period of my career when I got more involved with the legislature.

And ‑‑ and actually, interesting story was the director of the Resource Development Council at the time was Debbie Reinwand, and Debbie had been involved in sort of the Resource Development Council's urging the legislature to settle this case and clear this title and get development moving, and as this was all progressing, I was talking to Debbie saying, yeah, you know, I've got to do this legislative stuff, and you know, I don't really know how things work down there.

She says, well, go talk to my dad. You know, Jerry Reinwand. He's like a big‑deal lobbyist in Juneau.
And so I called Jerry Reinwand up and I said, you don't know me but I'm just this little nonprofit lawyer, but I'm in this big case and I've got to get this legislative stuff going, I have no idea how this works. And so Jerry said, yeah, come on down.

And so I went over and Jerry took me around and explained how the game went, and what's on the surface and what's underneath, and you know, was a really valuable mentor to me. All, of course, at no charge.
BILL SCHNEIDER: Yeah, what was his investment in this?

JEFF JESSEE: Well, Jerry, you know, had been involved sort of tangentially in this when he was the chief of staff for ‑‑ I think it was Hammond. Well, you'd have to check. But you know, Jerry Reinwand was chief of staff. And so he had kind of an interest in it. And I think a sensitivity to the beneficiaries. I think he thought it was a fundamental issue of fairness.

Jerry Reinwand is a very principled person. I mean, yes, he's a lobbyist and he works for clients and he gets paid and he'll lobby for, you know, who will pay him, but I think he did have a soft spot for the beneficiaries, and his daughter had asked him to help me out. So, you know, he was very helpful.

Section 3: As ultimately was interestingly ‑‑ well, of course, one of the ‑‑ the most important legislative mentors I had was Jim Duncan, a Senator from Juneau who carried the mental health bill, settlement bill for many years, and was a leading force in getting the settlement approved.

And in fact, in one of the, I think, little recognized acts of ‑‑ of statesmanship, he allowed the House Bill to be the final vehicle for the settlement, even though he had been primarily the bill carrier for many, many years and, by all rights, was entitled to have his bill be the vehicle.

But just the way the politics were playing out, it needed to be the House Bill. And a number of us went to Jim and explained the situation ‑‑ of course, he ‑‑ he was pretty familiar with it ‑‑ and he did, he receded. Which, you know, acts of statesmanship often don't get the play that more selfish political actions do, but...

And another important player in my relationship, I mean, Jim Duncan, I used to go in all the time and get advice from him. And then Senator Halford was very helpful to me, someone that I could go in and talk to and get advice from.

In fact, I remember once, I don't remember what exactly was happening, but our bill was held up in a committee, and I went into Senator Halford and I said, I think it's a conspiracy. You know, I think these guys are doing this and these guys are doing that and the AG's doing this, and you know, I need to know how to, like, figure this conspiracy out.

And I remember the Senator leaned back and he said, Jeff, you know what I've learned? He says, you know, sometimes when you think there's a conspiracy, simple incompetence can explain the evidence. And I remember thinking, huh. You know, that would fit these facts just as well as some sort of coordinated conspiratorial plan that all of these desperate people have pulled together. So he was very helpful.

So in any event, I ended up doing a lot of the legislative work. Philip didn't like the political end of it as much. So I ended up ‑‑ and he didn't have the time. And I ended up working on this case pretty much full time.

In fact, a big watershed for me was probably about two years after ‑‑ after I intervened, Philip actually came to me and said, Jeff, I bet you haven't thought of this, but you should quit Disability Law and take this case with you, and you'll retire in five years. And you know, I ‑‑ I remember at the time having a big discussion with my closest advisors about it, and decided, basically, I don't think I could live with that because, I mean, everyone would know that's the only reason I did it was for the money.

And, not making the money was what was giving me the access. And we needed somebody that had the access to the legislators to keep working this issue.

Section 4: BILL SCHNEIDER: So then the bill passes?
JEFF JESSEE: The bill passes. The ‑‑ Jim and David, even though Jim had been, oh, incredibly helpful in selecting the land and in helping to shape the language of the final bill, he and David then opposed the settlement.

And ‑‑ and their basis for that was that it was not an adequate asset side, that we had given away too much in order to get the power of the authority.

And again, I think that that's a testimony to both Jim and David's commitment to the beneficiaries is that, when we were in the middle of negotiating this, they were instrumental in helping us get the best deal we could get. And we often used them as a foil to leverage concessions out of the state and others.

But once they had helped us get the best bill we could get, then fundamentally, they still didn't agree it was a good settlement and opposed it as being not enough.
And significantly, Jim in particular, didn't believe DNR could ever manage this land properly.

In fact, one of the more interesting side events, sideshows, if you will, about the hearing that we had on the approval of the settlement in front of the Superior Court here in Fairbanks, Meg Greene, was when Jim tried to qualify Greg Erickson as an expert in bureaucratic psychology and behavior, a little known specialty field.

And Greg was going to testify that basically, no one that worked for DNR could ever really manage this land in the best interests of the beneficiaries. And there was quite an argument over whether he would be qualified in this area.

And I'll never forget after a lengthy voir dire by Julian and Philip who tag‑teamed Greg mercilessly, Judge Greene finally announced that whereas Alaska had a ‑‑ a very low standard to be qualified as an expert witness that she found that in this area Greg met that very low standard, and she would take his qualifications into consideration when she considered the weight to be given to his testimony.

So that was a little touchy for a while getting the settlement approved.

Section 5: As it turns out, these pieces worked even better than we had hoped. The DNR piece, I think the Land Office has done a very good job of managing the land. I think even Jim would probably agree with that today.
And in fact, there was some unintended benefits that came out of that.

One was that if you go into a DNR office and say you want to buy some gravel from the state, or you want to buy some timber for firewood or even a timber sale, you know, the state will tell you, oh, sure, we'll have to go through a public notice process and we'll have to consider other public uses and, you know, here in a year or two, we could probably get you a permit.

But you know, there is this Trust Land Office, and they've got a million acres and they are much more nimble. So you may want to go talk to those guys.
So inadvertently, we ended up with this huge referral network where DNR offices all over the state were referring people to the trust. Still do ‑‑ in order to help people get access to resources. So it's actually worked out very well.

But, of course, the big success is the ‑‑ is the program side. And so when the trustees got appointed, they had no staff, they had no office. And so I actually started acting as their staff, for all practical purposes. I mean, somebody had to draft bylaws and that sort of thing.

And the way the original staffing pattern was set up, there were two positions. There was an executive director, a CEO; and an investment officer. Well, I had avoided studiously becoming the executive director of the Disability Law Center several times.

My feeling was I always wanted to do the work, I didn't want to run the shop and, you know, order pencils and worry about the budget and, you know, I wanted to go out and do stuff.
And so when they started advertising for these positions, I actually applied for the investment officer job, even though I had very little, if any, background in that area.

And of course, I had been working with the trustees for, you know, probably six months while they were getting organized. And I'll never forget, they asked me to interview for that job, and I went in and it was the worst hour of my life. I mean, they grilled me up one side and down the other.

Well, how many portfolios of more than $100 million have you managed? And you know, what about this and what about that? And you know. Just basically making it very clear that I was totally unqualified for this position.
So at the end of that hour, I got up and I sort of was hangdog, and I was heading to the door, and Nelson Page was the chair.

And as I got to the door he said, Jeff? And I said, yeah? And he says, so what are you doing for the next hour? And I said, well, I guess I'm going back to the office. He says, well, if you have another hour, we'd like you to stay and interview for the CEO position. And then I got it. And a very different interview.

And it was a natural fit. I mean, they needed somebody that understood the settlement, you know, why things were set up the way they were; somebody who knew the beneficiaries, and understood the mental health program, and I was in the right place at the right time.

Section 6: BILL SCHNEIDER: Boy, there's a whole chapter here that ‑‑ that we haven't gotten to. What we've got has been really good, but then there's the whole period of, okay, as CEO, for the ‑‑ how many years?
JEFF JESSEE: Almost 15.
BILL SCHNEIDER: ‑‑ almost 15 years, there's probably been lots of issues and lots of successes and things that were a little different and things that we ought ‑‑ ought to record. And so I think we should probably stop at this point and I think we're going to have to do ‑‑ do more later.
JEFF JESSEE: That would be fine.

BILL SCHNEIDER: Is that okay with you?
JEFF JESSEE: Oh, yeah, because the fun part of the story is yet to come.
BILL SCHNEIDER: Oh, okay. Well, we'll ‑‑ this has been fun so far.
JEFF JESSEE: No, I think that if we have a chance to talk about how the trustees figured out how to use this tool, and ‑‑
JEFF JESSEE: ‑‑ and what we've been able to do with it and the strategies we use, it's ‑‑ I mean, this framework is unique ‑‑

JEFF JESSEE: ‑‑ but the use the trustees have put it to is just phenomenal. There's really nothing like it.
And you know, I really ‑‑ I know it's because I'm in this, but I think this type of a model is something that could be applied to public programs on a huge scale.

I mean, I tried to get Tony Knowles, when he wanted to do an endowment for the public schools, you know, I talked to him and I said, Governor, you'll never get enough money, because I kind of understood this stuff now. You know, I said, you'll never get an endowment large enough to generate the $900 million you need for the foundation formula.

And if you don't get enough to do that, it's just like the Mental Health Trust. If it only produces 400 million, then the legislature will just take that 400 million and reduce their appropriation, and you won't end up with any more money.

I said, you'd be way smarter to take a much smaller amount of money, say, 3‑ or $400 million, which you could probably get, and set it up like the Mental Health Trust because now every dollar that education gets ends up having to go right into the classroom because they are always struggling to ‑‑ to meet basic needs. And there's no venture capital.

I mean, everybody wants education to reform, but they don't give school districts any flexible funding to try reform. And I said, you know, if it produced 40‑ or $50 million a year, the way the Mental Health Trust would if you scaled it up a little, that could transform education.

And you know, the only people that have kind of tried that are Gates, and the problem with the Gates Foundation is they have fallen victim to what a lot of foundations fall victim to is they would ‑‑ they are just going to tell them how to do it. You know, so you don't really get innovation from the field, you get alleged innovation from the funder.

And when we get a chance to talk about it, that's one of the lessons that we learned and why, when we work on our focus areas, we do it through stakeholder work groups that basically have, through the trustees, the ability to create strategies to work on these problems and bring the kids home.
It's just one example of publicly driven effort that has been phenomenally successful. We're under 120 kids.

BILL SCHNEIDER: And I think, too, the Harborview example that you gave.
JEFF JESSEE: Harborview, therapeutic courts. You know, I mean, it just goes on and on and on.
BILL SCHNEIDER: Well, we need to get into those with you.
JEFF JESSEE: Yeah. Well, that will be fun.
BILL SCHNEIDER: Thank you very much.