Former Alaska Revenue Commissioner Adam Crum deviated from state policy when investing $50 million in a private equity fund, according to an outside review released Monday. The investigation, conducted by D.C. law firm WilmerHale at Gov. Mike Dunleavy’s direction, found that Crum failed to perform necessary due diligence before committing the funds to DigitalBridge and violated fiduciary duties under state law. The state ultimately lost roughly $859,000 on the investment after selling it to an Israeli insurance company.
The findings highlight accountability concerns when government officials fail to follow required procedures before investing public funds, raising questions about oversight of major financial decisions and the need for stronger investment protocols.
What the review found
A D.C. law firm’s investigation, conducted at Gov. Mike Dunleavy’s direction, examined former Revenue Commissioner Adam Crum’s decision to commit $50 million from Alaska’s Constitutional Budget Reserve to DigitalBridge, a private equity firm. The investigation, released Monday after Crum had left office to run for governor, found failures in procedure.
WilmerHale said Crum’s selection of DigitalBridge and two other private funds “did not involve rigorous due diligence” and failed to follow Department of Revenue protocols designed to protect the state’s savings. The firm raised concerns about whether Crum met his fiduciary duties under state law.
Investigators also found that Crum engaged outside lawyers to represent the state in the investment without obtaining approval from the attorney general, which the report said was “in apparent contravention” of state law.
However, the report found no evidence of criminal wrongdoing or self-dealing. It acknowledged that Crum had the authority as revenue commissioner to commit money to private equity funds—but only if he had completed the proper due diligence.
The investment and the loss
Crum intended to invest $75 million with DigitalBridge, but only $50 million was ultimately committed. The state later sold the investment to an Israeli insurance company. The sale resulted in a loss of roughly $859,000, according to a letter sent to the state House and Senate finance committees. A portion of the uninvested funds yielded $325,000 in interest, offsetting some of the loss.
“Clearly, this was an unsuitable investment for the Constitutional Budget Reserve. No question about it,” said Sitka Republican Sen. Bert Stedman. “The ex-commissioner broke his fiduciary duty to execute it.”
Stedman introduced legislation this month to bar the state from doing business with DigitalBridge.
The outside review itself cost the state an additional $350,000.
Response and reform
In a phone interview, Crum said he had tried to keep everything above board and maintained communications with the Department of Law and the governor’s office about the investment. “I would send emails and ask the questions that say, have we met all of the legal duties in order to actually fulfill this?” he said.
According to the investigation, however, Crum chose not to inform the governor’s budget office, the legislative auditor, or members of the Legislature as state policy required.
Crum characterized the investigation’s findings as procedural details. “It’s not about being technically proficient on all that stuff. It’s knowing the overall concepts,” he said. “That’s why you have staff.”
Gov. Dunleavy issued an administrative order implementing the review’s recommendations, placing additional checks on the revenue commissioner’s authority to invest in unconventional assets. In the order, Dunleavy said the changes were intended to “enhance the transparency of investment decisions.”