Oil and politics blend in Knowles' resume

THIRD TERM: Son of a wildcatter looks to return to Juneau.

By TOM KIZZIAS
Anchorage Daily News
First of two parts

With grease stains from his early days in the oil fields and battle scars from three decades in politics, Tony Knowles is presenting himself to voters this year as the ideal candidate to build a new pipeline across Alaska.

Knowles is telling voters about his childhood among Oklahoma oil prospectors as he campaigns to get his governor's job back. He came to Alaska to work on a drilling rig in Cook Inlet.

"I have a personal understanding at the grass-roots level of what the industry means to people," he says.

That insider knowledge, he says, coupled with his two terms as governor give him the credibility and experience to negotiate with the oil industry over construction of a natural gas pipeline from the North Slope. The gas line is widely seen as having the potential to provide a big construction boom, be a long-lasting source of state government revenue and be a foundation of Alaska's future economy.

Critics say Knowles, a Democrat, was too close to the oil industry and gave away too much when he was governor. But Knowles is nevertheless choosing to emphasize those personal ties, reminding voters that he was something other than just a politician.

He has less to say about his days as a two-term Anchorage mayor and a restaurant owner, not to mention as an Ivy League classmate of George W. Bush. But the oil-field pedigree is for real.

In fact, according to old newspaper accounts, when the 63-year-old Knowles was the first baby of the year born in his Oklahoma hometown, he was given the title "Mr. Tulsa of 1943."

Call it Mr. Tulsa against Miss Wasilla.

Knowles' Republican rival, former Wasilla mayor (and pageant winner) Sarah Palin, is turning up the heat under the other part of his resume: his eight years as governor.

The Juneau years between 1994 and 2002 were acrimonious ones, especially as the sourness between Knowles and Senate leaders grew more personal. Up against Republican-led legislatures every year, Knowles vetoed more bills than any governor except Jay Hammond. No Alaska chief executive ever had so many vetoes overridden.

There is plenty of controversial material for opponents to mine from those years. Subjects range from old standards like Knowles' income tax plan and his subsistence efforts to the more complicated -- and for this campaign, arguably more relevant -- questions about how tough a negotiator Knowles was with the oil companies.

Knowles tried to thrive as a centrist Democrat in a red state by declaring Alaska "open and ready for business." Critics said some of the incentives and lease changes he proposed went beyond what was necessary to keep the companies working.

He had a way of annoying his liberal base, dancing nervously away from labels like "progressive" and, in one memorable episode, snubbing Jimmy Carter when the former president came in 2000 to celebrate Alaska's parks. On the other hand, liberals liked his social policies and credit him with opening up jobs and commission seats to environmentalists and others often shunned in Republican circles.

Knowles' campaign strategy this time around has been to look ahead, offering reams of position papers about education, health care and other issues of the next four years. He's trying to contrast his preparedness to the less-developed platforms of Palin, who wants to turn the discussion to her opponent's past.

Knowles offers a spirited defense of his old policies, but he also argues that those were different times.

Oil prices were low, the oil industry was skittish about making new investments in Alaska, the gas line appeared to be uneconomic. The state faced a huge budget gap every year. Addressing new taxes or tapping Permanent Fund earnings was the responsible thing to do, Knowles says.

Today, with oil prices high, the landscape looks different. The incentives he offered to reverse the decline in North Slope oil production are no longer so necessary, he says.

"This is not a temporary blip," he says. "Clearly, Alaska is in the driver's seat. It gives Alaska a lot more negotiating power and leverage on developing the gas line."

As if to underline the point of his greater independence, Knowles chose a tough crowd of oil company employees at BP's Anchorage headquarters last July to announce he was going to consider more than just the gas pipeline deal their bosses had worked up with Gov. Frank Murkowski.

"I think it's time for Alaskans -- and I speak to you as Alaskans -- it's time for us to assert our sovereignty and say these are the terms by which we want to see a gas line developed," Knowles said that day.

Mr. Tulsa's tough-talking campaign was under way.

 

OIL UNDER HIS NAILS

Tony Knowles' father, Carroll Knowles, was a third-generation oilman, an independent "wildcatter."

"He was always counting on the next well to be his big strike," Knowles said in a recent interview.

His mother, Ruth Sheldon Knowles, once told a reporter that the older generations of Knowles men had tended to drill dry holes and "all died broke."

Ruth Sheldon Knowles was an expert on the type. A world-traveling oil business journalist, consultant and author, she wrote a best-seller called "The Greatest Gamblers: The Epic of American Oil Exploration." She worked in Mexico, Indonesia and Venezuela, and had just stepped down from a job with the Petroleum Administration for War when Knowles was born in 1943.

When her son was Anchorage mayor, she gave an interview to the Anchorage Times in which she warned that environmentalism -- or "petrophobia," as she called it -- threatened to cripple oil development. She died in 1996.

Tony Knowles worked in the oil fields while he went through school and after finishing college. He tells campaign audiences this helped build up his grubstake to go into the restaurant business in Anchorage.

"People have images of what you are. They might have forgotten that part of him," says campaign manager Leslie Ridle. His familiarity with the industry is significant, she says, because "he knows their language, the way they work. He won't make the rookie blunders in dealing with them."

On this year's campaign trail, voters are more likely to hear from Knowles that he was kicked out of school twice than that the school was Yale University. In fact he followed his mother east after his parents separated, and in ninth grade enrolled in an exclusive prep school, "wearing a shiny suit on Sunday, and everybody else wears worsted wool," as he once described it.

Knowles says he developed a bad attitude toward authority and was asked to leave Yale, where his father and grandfather had gone. Bad grades and a stunt with water balloons were factors.

A college friend, Bill Greenwood, said in a 1984 interview that financial reversals hit the Knowles family just as Tony got to the university.

"I've watched him in debate as a young man just destroy some pretty bright characters," Greenwood said. "In those days, he was kind of a William F. Buckley-type conservative. He comes across like this Oklahoma country boy. And he is an Oklahoma country boy. Except he's an extremely bright Oklahoma country boy."

Knowles says he only got straightened out after enlisting in the 82nd Airborne, which including a year working intelligence in Vietnam.

"After getting kicked out of school, only the Army would put you in intelligence," is a favorite Knowles line.

He returned to school and graduated in 1968 with an economics degree from Yale, where his fraternity president at Delta Kappa Epsilon was George W. Bush.

"I don't know whether your governor has admitted it or not, but he went to Yale," President Bush said in a speech at Elmendorf in 2002, drawing laughter from the crowd and from Knowles. "He probably slurs his words so it sounds like 'jail.' "

Despite his slow academic start, Knowles has through the years been called an engaged, detail-oriented administrator. Ridle, who has run his campaigns since 1994, says he enjoys hashing out the fine points of policy, like his one-time protege, Anchorage Mayor Mark Begich.

"He thinks the gas line is the most exciting thing in 30 years, and he says working on it would be fun," she says.

 

STEPPING INTO POLITICS

After graduation, Knowles had a job on a platform off the California coast when he got an offer of drilling work in Alaska. He quickly asked his college girlfriend, Vassar student Susan Morris, to marry him.

"She said, 'Yes; where are we going?' We headed to Alaska," Knowles said.

In a year, he had quit the oil field and opened his first Grizzly Burger, on Northern Lights Boulevard in Anchorage.

Knowles got his first taste of public policy when he was appointed to a committee drawing up a comprehensive plan for Anchorage. In 1975 he ran for a seat on the Anchorage Assembly and was elected by 30 votes. The one-time backer of Barry Goldwater was now one of the city's liberals, advocating for quality-of-life issues in a town growing helter-skelter during the pipeline boom.

His attention to trails and greenbelts as well as roads and police got Knowles elected mayor in 1981. He came from behind in that race to win a runoff against conservative House Speaker Joe Hayes, his one-time partner in Grizzly Burger and today one of Juneau's biggest lobbyists.

Not unlike his opponent from Wasilla, Knowles took over a city exploding with growth and devoted his efforts -- and the city's budget -- to catching up on everything from roads and traffic lights to unseen necessities like the Eklutna water pipeline and a new landfill.

The face of Anchorage was remade during Knowles' two terms as mayor. The city built and opened major state-funded civic landmarks such as the Sullivan Arena, the Egan Civic & Convention Center and the Loussac Library, many of them drawn up under his predecessor, 14-year Mayor George Sullivan. Knowles also built the coastal trail that was later named for him.

As mayor, he also promoted many women to executive city positions, supported gay rights and promoted mass transit. He had to handle 3,000 employees and a $200 million budget.

Knowles took much of the blame for big cost overruns at the Alaska Center for the Performing Arts, whose price tag rose from $45 million to $72 million. Critics said the mayor rode roughshod to clear away blocks of seedy-looking bars in downtown and build parking edifices. And when oil prices and state spending plummeted in the middle of his six-year run, Knowles and the Assembly began to spar over spending. Together they reduced the city budget by more than 10 percent.

His opponents said Knowles could be overly concerned with his image -- they gave him the nickname "Mayor Slick." He could turn on the charm but also be remarkably thin-skinned about criticism. He became less off-the-cuff, at times almost strangled, in talking to reporters.

Press accounts at the time say he learned consensus-building to get what he needed from the Assembly. He issued seven vetoes in six years and none of them was overridden. By contrast, his successor, Tom Fink, had more than a dozen vetoes overturned in his first three years.

Knowles' closest political adviser through those years, according to people who know him best, was his wife, Susan. She served an 18-year career as a commissioner on the old Alaska Public Utilities Commission, stepping down before Knowles became governor and raising three children. Susan Knowles continues to play a central role in his career: for example, making final decisions on campaign ads and other matters when her husband is out of town.

He finished his mayoral stint in 1988 and went back to running his one remaining restaurant, the Downtown Deli, which he co-owned with Dave Rose, longtime executive director of the Alaska Permanent Fund. The former mayor stayed busy busing dishes in a white apron.

But Knowles already had his eye set on the governor's mansion.