A Paperless Paper Trail For Alaska Billions
October 24th, 2005 Comment on this articleWhen you have a state where:
- More than $20 billion is invested, half in blue-chip stocks, the rest in government and corporate bonds and real estate;
- It’s expected to produce $1.5 billion a year, including a dividend for every man, woman and child who’s a legal resident of your state – making yours the only one of the 50 United States to give money to its residents instead of collecting money from them;
- and because we live in a litigious age, when stockholder lawsuits are as commonplace and familiar as the mailman,
It was just common sense for The Alaska Permanent Fund Corporation to install an electronic watchdog, Laserfiche, to keep an eye on its portfolio of stocks in thousands of corporations, domestic and foreign.
“We’re going to use Laserfiche document imaging to maintain a paper trail, a paperless paper trail.” said David Riccio, Information Systems Manager of the Alaska Permanent Fund, which collects and invests the royalty payments collected from oil companies extracting and exporting the oil from Alaska’s bountiful North Slope field.
Those payments, beginning in 1976, along with special appropriations and reinvestment of a portion of annual earnings transferred to principal to protect the Fund against inflation, had piled up to a total of more than $20 billion by December, 1996. Invested in a mammoth portfolio of stocks, bonds and commercial real estate, the investment pool has produced more than $14 billion in net income since its inception. Every fall the legislature appropriates a dividend, payable to every person who’s lived in the state for a year or more. In 1996, 542,000 Alaskans collected more than $1,100 apiece. The amount has not been under $900 since 1989.
But where there are stocks, there are stockholder lawsuits. According to Fund spokesman Jim Kelly, there are now 3,500 different issues in the Fund’s portfolio and some of them are involved in stockholder class-action litigation. “In order to receive its share of any settlement resulting from a lawsuit, the APFC must provide proof of ownership, of the stock during a certain period of time,” he said. “That’s where Laserfiche will come in. We intend to use the system to maintain electronic records of purchase and sale.”
When it is operational, a high-speed scanner will record the official confirmations of purchase or sale – “confirms” in Wall Street jargon — and then, when there’s an announcement of a stockholder suit against the management of a company in which the Fund is invested, it will be the work of a moment to type a few code numbers and letters into the Laserfiche system. Instantly, the confirm will appear on screen, alerting Fund management that they are entitled to a share of any settlement.
“Last year, we ended up with about $500,000 from class action litigation.” Mr. Kelly said. In 1995, according to a Fund statement, the amount was over $300,000; in 1994, it was $230,000, and in 1993, $250,000.
The Alaska Permanent Fund Corporation retained Mike Staso, of Alaska Computer Solutions, a Juneau company, to design and implement a document imaging system – the Fund’s first. He selected the imaging software and hardware. Document Technology, Inc., of Anchorage, a full-service imaging bureau, installed the system in the Fund’s offices in Juneau, last October 1996, and began scanning thousands of confirms and stock-custody reports into it, converting words on paper into electronic impulses.
That job is nearly complete: what had filled eight filing cabinets now resides in three 5 1/2-inch optical disks mounted in a “juke box” the size of a small office-type refrigerator. That juke box has bays that can accommodate 16 such disks, and the Fund purchased a second 16-bay box, in anticipation of expanding the system to cover other scanning-and-retrieval functions for other departments of the Fund.
“The APFC has always been a first-class corporation,” said Ellen Tingley, general manager of DTI, who is supervising the operation, “Using Laserfiche will reduce the processing time and enable the APFC to enhance the revenue obtained by the speedy retrieval of documentation for the Proof of Claim to the court. It will also provide a good recovery system in case of a fire.”