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Earlier versions of this article, including in Thursday's editions of The Post, incorrectly identified a lunch of "bowhead whale" as "bullhead whale". This version has been corrected.
Despite questions over ANCs, many pay out millions in dividends, scholarships, charitable donations

By Robert O'Harrow Jr.
Washington Post Staff Writer
Wednesday, September 29, 2010; 9:27 PM

Alaska native corporations have long struggled to fulfill their mandate to improve life for native shareholders, who are among the poorest people in the United States. Until the ANC federal contracting boom began a decade ago, many of the struggling firms could not even pay dividends, let alone offset the deprivation that characterized the lives of the state's indigenous people.

Now, dozens of Alaska native corporations, benefiting from extraordinary rules that allow them to receive contracts of any size from the federal government without competition, collectively channel millions each back into the communities each year.

The program has been plagued by a lack of government oversight, allowing established businesses to use the native corporations in some cases as fronts to get business without competition, an examination by The Washington Post found. Millions have gone to nonnative executives and companies.

But even as questions about the program mounted over the years, a number of ANCs increased payments to shareholders and other benefits.

The 12 main regional Alaska native corporations paid $171 million in dividends to about 100,000 shareholders in 2008, according to a recent report by the ANCSA (Alaska Native Claims Settlement Act) Regional Association. A congressional study of 19 corporations last year estimated that about 44 percent of their revenue came from federal contracting.

Some also have created jobs at federal contracting operations for their shareholders. Sealaska chief executive Chris McNeil said that his corporation's commitment to that goal means that 21 percent of employees of Sealaska subsidiaries in the SBA 8(a) program are Alaska natives. Some are executives.

"It's a motivation for us to see if we could be sure our people would have the opportunities for these kinds of professional positions," he said.

The benefits vary substantially among the corporations. Many offer scholarships and cultural initiatives via foundations and other nonprofit organizations. In 2008, they paid out $35 million in scholarships and charitable donations, according to the ANCSA report.

The NANA Regional Corp., which has 12,000 shareholders from several tribes, two years ago created an economic development committee that offers $55,000 grants for villages. The corporation spends $200,000 each year on Camp Sivunniigvik, where every summer native elders teach children traditional "subsistence lifestyle" skills such as hunting and gathering. The corporation has spent hundreds of thousands more in recent years on boys and girls clubs, sports tournaments and tribal governments.

Chugach Alaska Corp., which has about 2,200 Eskimo, Aleut and other native shareholders, runs shareholder development programs to draw young people into jobs in Alaska. It also runs a summer "spirit camp" for young people. Recently, Chugach joined Chenega Corp. and Tatitlek Corp. in financing the rebuilding of the historic St. Michael the Archangel Orthodox Church in Cordova.

The Eyak Corp., a village ANC owned by about 428 native shareholders, has used tens of thousands of dollars in revenue from federal contracting to pay for 126 higher education scholarships, including 23 this year. Officials there said in a news release that they have spent $29 million on dividends and other benefits over the years.

Doyon Limited, the largest land owner in Alaska with more than 12 million acres in the heart of the state, has 18,000 shareholders. Its foundation awards education scholarships of up to $7,000 to ambitious students. Last year, the foundation provided almost $600,000 in scholarships to 406 recipients. The corporation also has a "potlatch fund" that helps shareholders facing funeral expenses, and it supports a state nonprofit agency that provides social events for thousands of elders.

Nome-based Sitnasuak has donated 52 scholarships in recent years and $200,000 to the city's public schools. It has also subsidized bulk fuel purchases in 15 villages in the region. Last year, the corporation invested $450,000 in a joint venture that is working to preserve 320 acres of historic property.

In addition to handing out scholarships, Sitnasuak also makes "fish camps" along the Bering Sea available to shareholders who want to catch and dry salmon and pursue other subsistence traditions.

Marjorie Tahbone, a student from Nome, is one of the lucky ones who received scholarships. She is studying native culture and biology at the University of Alaska Fairbanks. She has received about $1,000 from the Sitnasuak Native Corp. in each of the past three years.

Eating a lunch of bowhead whale, seal oil and pilot bread crackers at her family's modest fish camp recently, the 21-year-old Tahbone said that the money has helped her pay for supplies and tuition. Her mom, a shareholder, said that's exactly what she wants from the corporation.

"I don't expect to get rich," Sandra Tahbone said. "I expect my corporation to benefit the whole. We depend on our native culture."

Although some critics note that the donations and dividends represent a fraction of the value of federal contracts awarded to the native corporations, executives, shareholders across the state and others say the contributions have begun to make a difference in some cases.

A report by aides to Sen. Claire McCaskill (D-Mo.), perhaps the harshest critic in Congress of the ANC program, said last year "that federal contracts have provided cash, scholarships, preservation of cultural heritage, or other benefits valued at approximately $720.1 million over the last nine years."

The Native American Contractors Association, an advocacy group, conducted its own survey of 11 major ANCs, finding that they "provided over $530 million in various categories of shareholder benefits to over 67,000 shareholders in years 2000-2008." In testimony during a Senate hearing, NACA Executive Director Sarah Lukin said that included almost $342 million in "shareholder dividends."

The recent ANCSA report suggests the average dividend payment rose sharply in 2008.

In her testimony, Lukin said that "these figures show that Native participation in the 8(a) program is helping some Native communities to compete in the American marketplace, build successful and self-reliant families, develop their tribal member shareholders through training and business supports, provide basic social and community services, and to act as engines of growth in their communities."

Alaska native executives stressed that the corporations do not generally get involved with spending on infrastructure, such as village plumbing and roads, because that's the responsibility of state and federal officials.

Sheri Buretta, chairwoman of the Chugach board, said that the impact of native corporations on the communities' culture can be immense but sometimes hard to quantify. She said that many of the corporations are focused on instilling pride among young people and training them to eventually run the corporations.

One day in July, she flew in a floatplane to the summer "spirit camp" at an ancient Russian trading settlement on Nuchek Island near Prince William Sound. One recent day, a pod of whales cruised within sight of the camp, beneath mountains still marked by snow.

Campers with traditional markings on their faces danced and sang, while others built kayaks the traditional way, with bent wood and stitching. Camp instructors teach 150 kids each week how to smoke salmon, dance, hunt for seal and speak traditional languages.

Buretta said the boost from federal contracting has fueled efforts to help poor shareholders and preserve their native culture.

"It's not a handout. It's a hand-up," she said. "We're investing in our future."

oharrowr@washpost.com

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