- A WilmerHale review says former Alaska Revenue Commissioner Adam Crum showed an “overall lack of diligence” and fell short on fiduciary and procedural standards in pursuing up to $225 million of long-term infrastructure investments from the Constitutional Budget Reserve.
- Only the $75 million DigitalBridge deal was completed, and the state exited it with about an $860,000 loss from fees and expenses and no remaining obligations.
- The report cites failures including limited due diligence, insufficient expert and Department of Law involvement, irregular procurement of outside counsel, and inadequate disclosure to oversight officials.
- Governor Dunleavy responded with Administrative Order 362 adopting the report’s recommendations to tighten documentation, transparency, and investment authority and oversight.
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The independent review by law firm WilmerHale casts significant doubt on the judgment and procedural rigor exercised by Adam Crum during the DigitalBridge investment process. While there was no finding of illegality or self-dealing, the report finds that Crum’s decisions raised “significant concerns” over his meeting of statutory fiduciary obligations given his role as the sole actor approving and managing these non-routine investments.
Key issues include: Crum approved moving short-term money from the Constitutional Budget Reserve (CBR) into longer-term, illiquid private equity infrastructure funds, which runs counter to concerns about the need for liquidity, especially when state revenues are unstable and the CBR is viewed as a buffer for budget shortfalls.
Despite policies in place since a 2020 audit for “non-routine investments” — requiring external expertise, documentation, and legislative notification — Crum is found to have deviated from multiple protocol steps. For example, the procurement of outside counsel was done outside established procedures, legal review from the Department of Law for fiduciary duties was neither requested nor fully informative, and legislative leaders were not given full disclosure.
The financial outcome was modestly negative: about $860,000 lost on the DigitalBridge portion due to fees and expenses. Although the dollar amount is small relative to the size of the fund, the risk profile and procedure lapses are described as particularly egregious given the size of Alaska’s rainy-day fund and its likely role in funding operations amid declining revenue.
Strategically, this situation exposes several risk vectors for state financial governance: concentration of decision-making authority without structured oversight; lack of procedural safeguards in executing nonroutine investments; potential political fallout for Crum as a gubernatorial candidate; and broader questions about the structural legal authority over the CBRF, liquidity requirements, and accountability mechanisms.
Open questions include: How will the suggested changes (especially modifying the sole fiduciary role) be implemented in law, and by what timeline? What liabilities — legal, political, or reputational — may arise for Crum or other decision-makers? Will future commissioners refrain from making similar investments? And given projections that the CBRF could be depleted in 2-3 years, how will state policy balance yield vs. liquidity going forward?
Supporting Notes
- Up to $225 million was planned by Crum for long-term, private equity infrastructure investments—three proposed funds at $75 million each—of which only DigitalBridge was completed.
- The state sold its DigitalBridge investment, terminating obligations, and lost approximately $860,000 due to management fees and expenses.
- Crum is criticized for failing to follow the “non-routine investment protocol” fully: conducting limited due diligence, not using expert external advice prior to selecting funds, and deviating from procurement and disclosure requirements.
- Other investments with two additional fund managers (likely Blackstone and I Squared Capital) were cancelled by the acting commissioner after Crum’s resignation.
- The Constitutional Budget Reserve Fund had about $2.9–3 billion in assets as of fall 2025; legislators estimate depletion in 2-3 years unless policy changes.
- The report’s recommendations: modify sole fiduciary structure; formalize documentation of steps in nonroutine protocol; require revenue commissioner to consult Department of Law; and regulate procurement of outside legal services even when other parties bear fees. These were adopted immediately via Administrative Order 362.