JUNEAU, Alaska (AP) — The grandson of a prominent donor to a group that supported Alaska Gov. Mike Dunleavy's election said Tuesday that he has opted out of his controversial $8,000 a month contract with a state corporation. Clark Penney said he'd become a distraction.

The Alaska Industrial Development and Export Authority last year entered into the sole-source contract with Penney. Some lawmakers questioned the contract — which was to help a government industry development team in its efforts to boost jobs and diversify Alaska's economy — and whether the Republican Dunleavy was involved in any way.

Penney is a grandson of Bob Penney, who was a major donor to a third-party group that supported Dunleavy's 2018 election.

Tom Boutin, executive director of the authority, told a House subcommittee last month he never spoke to Dunleavy about Penney or the contract. Boutin signed the contract with Penney.

The contract included options for three, one-year extensions with costs not to exceed $441,000 through June 2022. Under terms of the contract, costs from July 1, 2019 through June 30, 2020 were not to exceed $132,000. That included $8,000 a month and travel expenses.

Boutin told The Associated Press he spoke with Penney Tuesday after the AP inquired about the contract's status, and he said Penney confirmed he had terminated the contract.

Penney, in an email, said his participation had “become a distraction leading to a challenging environment for my colleagues. I believe in the work the team and I are doing in creating a brighter future for Alaska, but at this time I will be stepping away from this contract effective immediately. My hope is the good work we started will continue.”

"I will be doing all I can from the sidelines to help our great State grow," he added later.

An email seeking comment on how much had been paid under the contract so far was sent to Karsten Rodvik, a spokesman for the Alaska Industrial Development and Export Authority.

Dunleavy spokesman Jeff Turner said Penney had notified the governor's office that he was ending his contract.

Attorney General Kevin Clarkson told Reps. Zack Fields and Jonathan Kreiss-Tomkins in a letter last month that in response to concerns they had raised about the contract and at Dunleavy's request he had directed the Department of Law to review the matter. An email seeking details on the status of that was sent to Law spokeswoman Maria Bahr Tuesday.

Fields said he considered it a victory “that we aren’t going to be squandering any more money” on the contract. But he said an answer still is needed on who directed the contract.