Saturday, July 17, 2010

Alaska House Closed

The Alaska House opened the day Lehman Brothers fell. It too met the vagaries of Wall Street. Anchorage Daily News reported:

The Alaska House art gallery in Manhattan has closed. The doors are locked, the lights are off, and a large square sign with red lettering advertises 'space for rent.'

The gallery in New York's trendy SoHo neighborhood, which also served as a travel service and cultural center, opened with great fanfare on Sept. 15, 2008. Guests at the event included Gov. Sarah Palin's husband, Todd, Alaska U.S. Sen. Lisa Murkowski and Alaska artists Sylvester Ayek, Perry Eaton and Poldine Carlo.

Supporters included billionaire New York City Mayor Michael Bloomberg and philanthropist Daisy Soros, sister-in-law of international money fund mogul George Soros. The gallery and its partner organization, the Alaska Native Arts Foundation, were founded by Alice Rogoff Rubenstein, former chief financial officer of U.S. News and World Report and wife of The Carlyle Group's co-founder, David Rubenstein.

Despite political star power and billionaire support, the Alaska House closed less than two years after opening. Why? Poor timing and lack of money.

Rogoff-Rubenstein's plan to raise $1 million per year from Alaska Permanent Fund money managers mired in Wall Street's meltdown. Oddly, while her husband's personal finances recovered in 2009 and Carlyle monetized affiliates, donors remained hard to find.

Alice Rogoff-Rubenstein turned to the government, which did not deliver. Senator Murkowski failed to submit a $1.5 million federal earmark to fund operations. The Alaska State Legislature passed on a requested $600,000 appropriation.

Oddly, billionaire husband David Rubenstein made big money off Alaskan natives.
In 1984, a law was passed allowing native corporations in Alaska—that is, Eskimo owned companies created by Congress to manage native lands—to sell their losses to businesses looking for tax write-offs. The Marriott executives, working with David Rubenstein at Shaw Pittman, discovered the Eskimo clause and vigorously bought the losses to offset gains. The adventure has become known in some quarters as the Great Eskimo Tax Scam.

Nervousness will help him do so again. The Alaska House opened in the thunderclap of the financial storm. Is its closing a harbinger of the next stage of financial manipulation?

Update 10-17-20:  David Rubenstein was presented with the Award for Philanthropic Distinction in support of his understanding of how philanthropy can change the world.