Palin returns to a changed Alaska

When she left Alaska in August to run as the Republican vice presidential candidate, Sarah Palin was a much-loved governor with approval ratings near 90 percent; a record for pursuing centrist, bipartisan policies; and a reputation as a corruption-fighter.

Her home state was awash in money, thanks to record oil prices, and residents were set to get big checks in the form of dividends from the Alaska Permanent Fund and a state tax rebate. The economic future seemed secure, with Governor Palin advancing the case for a big, new, natural-gas pipeline.

What a difference a couple of months make.

Upon her return to Alaska Nov. 5, Palin’s nonpartisan reputation is in shreds, a side effect of her role as chief attacker of Democratic rival Barack Obama. Damaged, too, is her image as ethics reformer, with questions lingering over an abuse-of-power scandal involving a feud against her sister’s ex-husband, alleged circumvention of public-records laws, concerns about state payments for her children’s travel and nights spent in her own home, and even how she acquired the haute-couture wardrobe she sported on the campaign trail.

Palin, in her first moments back as full-time governor, urged opponents to let bygones be bygones.

“Nobody should have hurt feelings,” she said at the Anchorage airport the night she returned to Alaska. “My goodness, this is politics. Politics is rough and tumble, and people need to get thick skins, just like I’ve gotten.”

That goes for the incoming president, she added. “The voters have chosen their leader. Now it’s our opportunity to reach out to President-elect Obama, get him to see the light in terms of what Alaska has to contribute, to offer. I can’t wait to get to work with him.”

Mending fences may not be that easy. The governor’s old bipartisan coalition is gone, says state Rep. Les Gara, a Democrat who was a Palin ally on key oil and gas issues.

“You probably now have a lot of Republicans who like our governor and a lot of Democrats who are offended about the things she said about President-elect Obama. I’m offended that she said he was a terrorist sympathizer,” says Mr. Gara, an Obama supporter.

Alaska is not the same now, either. Oil prices have tumbled back to earth from the record levels that had padded the state treasury, meaning budget deficits may lie ahead. The global financial crisis is worsening prospects for the $30 billion North Slope natural-gas pipeline that Alaskans have sought to build since the 1970s. And it’s not yet certain that Sen. Ted Stevens, who has represented Alaska in the US Senate almost as long as Palin has been alive, will prevail in his reelection bid.

Senator Stevens, the longest serving Republican in the Senate, was clinging to a 3,257-vote lead as of Nov. 5. Vote counting will resume Nov. 12, according to the Alaska Division of Elections.

The vote results, in the face of the guilty verdict returned against Stevens two weeks ago in his federal corruption trial, showed an unshakable reservoir of loyalty to the senator, says Andrew Halcro, a former Republican state legislator who publishes an Alaska political blog and hosts a radio talk show. “I don’t know if it should make you proud or make you a little uncomfortable,” Mr. Halcro said as the results rolled in on election night.

Palin’s approval ratings are now in the 60 percent range, lower than she previously enjoyed but still in positive territory. Her job at home has just been made harder, though, by global oil markets.

The current budget assumes that North Slope crude prices will average $83 a barrel. Because prices were so high earlier this year, they would have to fall below $60 a barrel for the rest of the year to put the state into a budget hole, says Revenue Commissioner Pat Galvin. “It’s been way up, so that gave us a cushion,” he says. (Oil on the global market closed Friday at $61 a barrel.)

Prospects have dimmed, too, for continued federal largess.

Stevens, famous for the billions of federal dollars he has steered to Alaska, campaigned on the message that Alaska needs his continued representation in the Senate.

“We’re about ready to enter a recession, maybe even a depression, and this state is supported to a great extent by federal activities. Almost 40 percent of the jobs in this state are directly related to annual appropriations. Now why would you want to send a new person down to try to enter into that field, a person with no experience at all?” Stevens said Oct. 30 in his only face-to-face debate against his rival, Anchorage Mayor Mark Begich.

Stevens vowed he will continue to get that money for Alaska despite his Oct. 27 conviction on seven felony corruption counts – a problem he has dismissed as a technicality, along with Senate colleagues’ pledges to eject him from the Senate. “This business about not seating me is wrong. They’re not going to reject me in the Senate. I have great standing across the aisle.... I don’t think there’s any senator who’s sitting right now who has the friendships that I do across the aisle,” Stevens said during the debate.

At a “welcome home” rally two days after the verdict – held at the Anchorage airport that is named for Stevens – the tone was defiant. Several Stevens supporters wore T-shirts with an unprintable slur against “the Feds.” National politicians who have called for Stevens to resign “can kiss my Alaska moose-hunting behind, because I know Ted and I’m sticking with him,” Rick Rydell, an Anchorage radio talk-show host and the emcee at the rally, told the crowd. “Twelve jurors in D.C. don’t know Ted. I know Ted.”

No matter what happens to Stevens, the US government can no longer afford the generous budget earmarks he used to secure for Alaska, says state Rep. Beth Kerttula (D), minority leader in the Alaska House of Representatives. “We could reelect Ted Stevens all day long, but that’s not going to change the fact that the earmarks are gone,” she says.

The Stevens quandary may ultimately create an opening for Palin to return to the national stage. She has called for him to resign. If he ekes out a victory but then resigns or is ejected from the Senate, Alaska will have to hold a special election within 90 days to fill the seat.

Though she has denied interest – “I tell you, this is the best job in the world, being the governor of the state,” Palin said on her first day back at work in her Anchorage office – the governor is a likely Republican candidate.

Palin’s supporters here have their eyes on a bigger prize.

“Two thousand twelve! Two thousand twelve!” chanted fans who met the governor at the Anchorage airport when she returned from the campaign trail. Arianne Herglotz and Starr Bynum, longtime Palin friends from the Beehive Beauty Shop in Wasilla, were among those wearing buttons displaying a lipstick imprint of a kiss and the slogan: “Palin for President 2012.”

“She’ll go further now that this has happened,” Ms. Bynum says. “I think it just energized her more to do a better job here, the best she can and keep on going.”

Some Alaska leaders expect Palin’s national ambitions to affect actions at home.

“I believe that Sarah Palin, Governor Palin, will make a run for president in four years. I’m trying to just determine how long it’s going to be before she begins a campaign,” says House Speaker John Harris, a Republican. “Does it start with our next gubernatorial election, or does it start before then?”