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Fairbanks Daily News-Miner: Senate Committee Probes Finances Of Alaska Native Corporations

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Location: Washington, DC

Senate Committee Probes Finances Of Alaska Native Corporations

Originally published in the Fairbanks Daily News-Miner

By: Betty Mills

Leaders of 20 Alaska Native corporations spent last week scrambling to gather financial information for a Senate subcommittee that is probing their participation in a federal contracting program.

The Senate Subcommittee on Contracting Oversight scheduled a hearing for July 16 on federal contracts awarded to Alaska Native corporations under a program administered by the Small Business Administration.

At issue is the participation of Alaska Native corporations in the agency's 8(a) program, which Congress approved in 1986. The Alaska corporations are granted special procurement advantages, including the ability to win contracts without competition.

In 2006, the Government Accountability Office issued a report calling for "tailored oversight" of the increased use of special 8(a) provisions by Alaska Native corporations.

Sen. Claire McCaskill, D-Mo., sent a letter earlier this month to the chief executive officers of 20 Alaska Native corporations, seeking a long list of financial documents and data.

McCaskill, who chairs the subcommittee, requested the following:

• a list of names and 8(a) status of all subsidiaries, joint ventures, partnerships and syndicates since 2000.

• a list of the types and classes of stock and the number of shareholders and outstanding shares for each, for each year from 2000-2008.

• the compensation paid to each of the companies' executive officers and board of directors.

• the number of employees, including the number of those who are shareholders.

• the total revenue, gross profit, operating expenses, net operating revenues and total assets of the corporation and each 8(a) entity for each year from 2000-2008.

• the total revenue received from federal contracts for each year from 2000-2008.

• a table showing the subcontractor name and worth of each subcontract valued at 10 percent or more of the total contract, for each year from 2000-2008.

• the cash dividends declared per share for each year from 2000-2008.

• other benefits provided to shareholders, such as scholarships and training.

The letters were sent to Ahtna Inc., Arctic Slope Regional Corp., Bering Straits Native Corp., Bristol Bay Native Corp., Calista Corp., Chugach Alaska Corp., Cook Inlet Region Inc., Doyon Ltd., Koniag Inc., NANA Regional Corp., Sealaska Corp., the 13th Regional Corp., Afognak Native Corp., Tyonek Native Corp., Cape Fox Corp., Chenega Corp., Eyak Corp., Goldbelt Inc., Olgoonik Corp. and the Aleut Corp.

The information was due to the subcommittee by Friday.

The Alaska congressional delegation asked McCaskill to give the Native corporations more time to gather the data.

"While we welcome fair and just oversight of the Native American 8(a) program to ensure its integrity, transparency and accountability, we are also concerned that Alaska Native corporations will be inadvertently harmed," Sens. Lisa Murkowski and Mark Begich wrote McCaskill.

The Alaska senators also asked McCaskill to visit rural Alaska so she can see the importance of Alaska Native corporations.

In a separate letter, Rep. Don Young asked McCaskill to provide guidance to the Alaska corporations about the scope, purpose and context of the hearing. Young asked if the subcommittee is examining all federal contracting practices.

Young also asked McCaskill to allow Alaska Natives "to tell their story" during the hearing.

Young said the 8(a) program "has provided economic and educational opportunity to some of the most impoverished areas of our country where previously there was none."

The Alaska Native Land Claims Settlement Act of 1971 created 13 regional corporations and awarded 44 million acres of land and about $1 billion. The corporations were established to encourage development opportunities for Alaska Natives.

In their letter to McCaskill, Murkowski and Begich said, "The social and economic health of the indigenous people of Alaska is deeply intertwined with the success of the Alaska Native corporations."

The report by the Government Accountability Office, which is the investigative arm of Congress, stated that many Alaska Native corporations rely heavily on the 8(a) program for revenue while others use many revenue-generating options.

During the GAO review, the Small Business Administration agreed to make improvements to the 8(a) program and to provide better oversight of Alaska Native corporations.

Federal officials consulted with Alaska Native leaders in Fairbanks in October 2007 on the 8(a) program, but the SBA has not issued new regulations.

The inspector general of the SBA is conducting an audit of the subcontracting practices of Alaska Native corporations and the dividend benefits paid to shareholders as a result of participation in the 8(a) program. The audit is scheduled to be released shortly.


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