Alaska Native Claims Settlement Act by Morris Media Network

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Alaska Journal of Commerce Telephone: 907-561-4772 Fax: 907-563-4744 Web site: www.alaskajournal.com Regional Vice President

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A yearlong series looking into ANCSA:

40 years later

Finding the oil was what did it. After a millennia of living in the Great Land, the indigenous peoples of what is now Alaska had become familiar with change – the Russians, the English, missionaries, gold seekers, fur traders, the disease and death. Disputes for lands, cultures and the languages had been ongoing since the first white settlement in the late 1700s, when the Russians set up camp in Kodiak. In the years that followed, Russian, English and later American governments “settled” the lands. Mission schools from a variety of religions opened along coastal regions. Children had to leave their families to learn new languages, new customs and eat new foods. In those years, Natives were not treated as citizens; they were not even considered “civilized” according to the settlers’ standings. Storefronts in settlements and mining towns posted signs in the windows: “No dogs or natives allowed.” The Alaska Native people didn’t just roll over and take it. They fought for, and gained, certain rights. The Alaska Native Brotherhood led many of the earliest efforts, after the group formed in 1912. In 1945, Alaska passed an anti-discrimination law, the first of its kind in America. It provided for equal treatment of Natives and whites in businesses and public places. Still, battles for aboriginal lands continued. The U.S. government in 1867 had purchased Alaska from Russia for $7.2 million. Various laws had passed Congress allowing American Indians, and in turn, Alaska Natives to retain their rights to long-occupied lands. Disputes over who owned what lands – specifically – continued, however. But when big oil struck in Prudhoe Bay in 1968, Alaska

Natives suddenly had some leverage. Oil companies needed a pipeline to move oil from the North Slope to Valdez for transport to major markets. Alaska Natives and government agencies were arguing over vast areas along that route. The land claims issue had to be settled. That is how, in 1971, the Alaska Native Claims Settlement Act came to be. This legislation took a group of people who had survived off the land for centuries and suddenly dropped them into the white man’s world of business and finance. ANCSA offered Alaska Natives 44 million acres of land – the specifics of which are still being worked out today – and $962.5 million. The law formed 12 for-profit corporations, one for each region of the state. A 13th was formed later for Natives living Outside. It was a great experiment – nothing like it had ever been done. Over the past year, the Alaska Journal of Commerce has explored the regional corporations formed under ANCSA. This publication is a compilation of that effort. We found that the great experiment resulted in great successes. The vast majority of those corporations have prospered over the years, both financially and in preserving their cultures. Success has not come without controversy, and some battles continue, but the spirit of the Alaska Native people have proven that they are a force to be reckoned with. Melissa Campbell Managing Editor Alaska Journal of Commerce editor@alaskajournal.com

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an c h o r a g e al ask a’s l arge st pri v at e l an d owner An ANCSA village corporation developing the economic landscape of the Anchorage area

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Ahtna buffeted by

recession in 2009 but still shows

growth, profit By Tim Bradner 2009 was not an easy year for Ahtna Inc., the Alaska Native regional corporation for the Copper River area. Ahtna’s business activities, mostly out-of-state, were buffeted by the recession that has plagued the world economy. Still, the corporation, one of the state’s smaller regional corporations in terms of geographic area and population, managed to show growth in several of its businesses and to net a profit for the year, although a profit that was lower than

Ahtna Inc.

President: Michelle Nutter Anderson Headquarters: P.O. Box 649, Glennallen, 99588, (907) 822-3476 406 W. Fireweed Lane., Anchorage, (907) 868-8250 Website: www.ahtna-inc.com Shareholders: About 1,500

Ahtna Inc. President/CEO Michelle Nutter Anderson Photo by Michael Dinneen, For the Journal

in pre-recession 2008. In addition to its operating businesses, Ahtna, based in Glennallen, has a land-selection entitlement of 1.77 million acres in the region through the Alaska Native Claims Settlement of 1971. The corporation has been conveyed fee title to more than 1.5 million acres of its selection entitlement. It has about 1,500 shareholders but is now doing a new enrollment to encourage people born after 1971, when the Native claims act passed, to enroll. “Many of our subsidiaries were able to navigate against the grain (of the recession) in many areas, the effects of a struggling economy impacted our overall performance,” Ahtna President and CEO Ken Johns wrote in the corporation’s 2009 annual report. “What we saw in 2009 were increases in competition, delays in contract awards and negative trends in government spending in certain sectors,” which caused setbacks in the finances of some of Ahtna’s subsidiaries, Johns wrote. Michelle Nutter Anderson in September 2011 was named Ahtna president, replacing the retiring Johns. Johns and other Ahtna executives were not available for an interview on the corporation’s 2009 business activities. The annual report, however, shows that despite the recession, Ahtna enjoyed an 18 percent growth in revenues in 2009, increasing revenues by $35 million to a total of $231 million. Expenses also rose, from $189.2 million in 2008 to $226.5 million in 2009. Operating profits totaled $4.5 million, but a deferred tax expense of $1.1 million left the corporation with a $1.7 million final profit for the year, Johns wrote in the annual report. The 2009 net profit of $1.7 See Ahtna, Page 5

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PHOTO Courtesy of Ahtna Heritage Foundation

Ahtna: Continued from Page 4 million compares to a $2.87 million net profit in 2008. Still, assets of the corporation showed growth, totaling $62.76 million in 2009, compared to $55.26 million in 2008, according to the annual report. The corporation’s board declared a 2009 dividend of $2.79 per share, or $279 for a typical shareholder with 100 shares. In addition, the board approved Ahtna’s first special dividend of $300 for elders among shareholders. “Although some positive financial strides were taken in 2009, we did experience setbacks and lost opportunities; throughout the year we found ourselves making profits in certain areas and losing them in others,” Johns wrote. The proxy statement filed by Ahtna in connection with its annual meeting showed that the corporation paid $2.09 million in salaries and bonuses in 2009 to five presidents and vice presidents of the corporation and key subsidiaries, including $391,309 to Johns. A total of $5.78 million was paid in compensation to officers and directors, a total of 39 people. Directors are paid monthly stipends of $2,000, according to the proxy statement. Besides dividends to shareholders and compensation to its top executives, Ahtna’s business activities also result in wages being paid to shareholders who are em-

ployed. The total wages paid for 2009 was not available but one example is $2 million paid in shareholder wages during the year by one subsidiary engaged in trans-Alaska oil pipeline support. While its operating businesses provide

One of Ahtna’s unusual expenses is in protecting its lands from trespass. Ahtna is the only regional corporations with all of its eight villages on the road system, so there are serious problems with trespass on the corporation’s lands.

the bulk of Ahtna’s revenues and profits, management of extensive landholdings in the region represent both future profit prospects and expenses in terms of protecting the lands. One of Ahtna’s unusual expenses is in protecting its lands from trespass. Ahtna is the only regional corporations with all of its eight villages on the road system, so

there are serious problems with trespass on the corporation’s lands. Regulated hunting and fishing access to Ahtna’s lands is allowed, for shareholders and non-shareholders, under a permit system, but there are still abuses, and Ahtna has to spend money on security. One bright spot for 2010 is an agreement with a mineral exploration company, Raven Gold Alaska, to explore for gold on Ahtna’s lands near Raven Creek. The agreement gives Raven Gold rights to explore 75,500 acres over six years. Revenues to Ahtna from any gold production resulting from a discovery would be paid on a sliding scale royalty. “We should be well compensated if the price of gold remains high,” Johns wrote in the annual report. Ahtna would also get a preference for contracting in any development work, and the company also has agreed that 55 percent of the workforce of any mine would consist of Ahtna shareholders or family members. The 55 percent figure is similar to the shareholder percentage achieved at the only operating large mine on Alaska Native lands, the Red Dog Mine in Northwest Alaska where NANA Regional Corp. is the landowner. One disappointment for Ahtna, in terms of resource development, has been with exploration for natural gas. A Texasbased independent company drilled a well on corporation lands west of Glennallen. See Ahtna, Page 6

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Ahtna: Continued from Page 5 Gas was discovered, but technical problems in the well and complications presented by the presence of unusual high-pressure hot water prevented the development of commercial gas production. Like every other Alaska Native regional corporation and many village corporations, Ahtna is heavily engaged in support contracting for federal facilities, taking advantage of the U.S. Small Business Administration’s 8(a) minority preference program. Some Ahtna subsidiaries are engaged in support work for Alyeska Pipeline Service Co., operator of the Trans-Alaska Pipeline System, which crosses Ahtna lands on its route from Interior Alaska to Valdez. Ahtna Construction and Primary Products Co., a 35-yearold subsidiary now heavily engaged in Alyeska support work, achieved $7.1 million in operating revenues in 2009. Its management cited a superior safety record in 2009, going an entire year without a recordable lost-time incident due to injury in the pipeline support work. A 65 percent average Native-hire was achieved, with $2 million paid in wages to Ahtna shareholders through Alyeska-related work. Ahtna also performed support work for Alyeska in 2009 through a separate joint venture with Price-Gregory. Another subsidiary, Ahtna Contractors LLC, was formed in 2005 to perform non-pipeline civil construction. Also a major focus of Ahtna Contractors has been training and certification of shareholders in construction skills. In late 2009 the subsidiary’s focus was shifted to equipment services and leasing. One other Ahtna subsidiary that focused on activity within the

region was Ahtna Development Corp., which offered a popular Copper River adventure tour that operated from the Copper River Princess Wilderness Lodge. The all-terrain vehicle tour offered scenic river overlooks from the famous Copper River bluffs, wildlife viewing and demonstration of fishing techniques. It also gave Ahtna the opportunity to share information on Ahtna lands and culture with out-of-state visitors. The tours achieved a 100 percent approval rating from customers, and despite an industry-wide decline in Alaska tourism in 2009, the Ahtna tours enjoyed a 40 percent increase in riders. Tourism showed recovery in 2010 and is forecast to recover more in 2011 and 2012 with the return of cruise ships bringing visitors to Alaska. Ahtna also has seven subsidiaries that specialize in providing facility support services to government agencies. While most of these operate within the Small Business Administration’s 8(a) minority contracting program, one subsidiary, Ahtna Government Services Corp., graduated from the 8(a) program in October 2009 and continues to compete successfully against competitors in the federal contracting industry. The technical nature of the federal agency support contracts and the operating locations around the U.S. have resulted in fewer Ahtna shareholders employed compared to Ahtna’s operating businesses within Alaska. For example, Ahtna Engineering Services LLC, a company that provides engineering and design services mainly to federal agencies, has 258 employees in total, but only six shareholders are employed. The shareholders include one management and one engineering student intern, as well as a scientist. ✦

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Photo by Michael Dinneen, For the Journal

Aleut Corp. President/CEO Thomas Mack

Aleut Corp. defies recession, shows

strong growth in revenues,

profits

By Tim Bradner The Aleut Corp.â&#x20AC;&#x2122;s region covers more water than actual land. The region encompasses the remote Aleutian Island chain, an area that is spread over more than 1,000 miles, from Sand Point to Attu. But the Aleut Corp. was a leader in federal contracting efforts, and has grown to be one of the more diverse organizations in the state. The corporation has about 3,600 Native shareholders, twothirds of whom live in the state and with about a third living in Aleut region in small communities. Like most other Alaska Native corporations, Aleut Corp. is heavily engaged in federal contracting, mainly in facility management work, See Aleut, Page 8

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Aleut: Continued from Page 7 but also owns operating companies and is in real estate in Alaska and the Lower 48. The corporation is small in the size of its business compared to some other Native regional corporations, but the Aleut Corp. is in a strategic location among some of the world’s major fisheries, in the Bering Sea, and what many predict will someday become one of the world’s major shipping routes as the polar seas open more to navigation. In financial performance, the Aleut Corp. is doing well, with gross revenues of $159.4 million in its 2010 financial year, up from $146.95 million in 2009 and $116 million in 2008. The growth of net income before taxes followed a similar trend, with $20.29 million in 2010, up from $17.9 million in 2009 and $13.34 million in 2008. There was an increase in net income before taxes of 13 percent from 2009 to 2010, not bad considering the state of the national and world economy over the past two years. Net income in 2010 also absorbed a sharp reduction in mineral resource revenue sharing from other Native regional corporations. The Aleuts’ share of this was $2.06 million in 2010, compared with $6.37 million in 2009. The reduction was due mainly to declines in zinc and oil prices, which have since recovered. In general, the Aleuts and other Alaska Native corporations have weathered the recession relatively well, due to the diversification of investments and businesses, mainly in federal contracting and natural resources production. “Our corporate strategy is to continue growth through mergers and acquisitions as well as through internal growth,” Thomas Mack, president of the corporation, told the Anchorage Chamber of Commerce in an Oct. 4, 2010, presentation. Mack said the corporation’s social responsibilities haven’t been neglected. Through contributions to the Aleut Foundation, scholarships for 140 shareholders and descendents were provided in 2010. The Aleut Corp. also supports “cultural camps” for youths and a program to preserve the Aleut language.

Federal contracting brings bulk of revenues Federal contracting provides the bulk of the Aleuts’ revenues. Other operating companies, including fuel oil sales and storage, real estate, industrial services, gravel operations and shared mineral revenues from other Native regional corporations, add more to net profits, which pay dividends to shareholders and provide the money for investment in new business opportunities. The Aleuts actually pioneered the 8(a) industry for other Alaska Native corporations, using minority contracting opportunities to develop expertise in facility management among its subsidiaries. The 8(a) program certifies small, minority and disadvantaged businesses through the Small Business Administration, allowing greater access to lucrative government contracts. Alaska Native and American Indian corporations have a special exemption where they have no monetary limits on the contracts they can receive. Aleut Corp. still has 8(a) companies, but now competes successfully for management contracts outside the minority-contracting field, according to Dave Gillespie, CEO of the corporation. Among its operating companies, two new acquisitions in 2009, Alaska Instrument Co. of Anchorage and C&H Testing Service of Bakersfield, Calif., reflect a strategic move into oilfield maintenance work, a growing industry in Alaska, Gillespie said. Another strategic move, under way for

The Aleut Corp.’s region covers more water than actual land. The region encompasses the remote Aleutian Island chain, an area that is spread over more than 1,000 miles, from Sand Point to Attu. several years now, is to provide support and service to marine shipping, mainly related to fisheries and defense, on Adak Island, in the Aleutians. Adak houses a closed naval air service base, where substantial lands, buildings and other infrastructure were acquired by the Aleut Corp.

Aleut Corp.

President/CEO: Thomas Mack Headquarters: 4000 Old Seward Highway, Ste. 300, Anchorage, (907) 561-4300 Website: aleutcorp.com Shareholders: 3,600

Aleut Enterprise, a subsidiary, now operates a commercial fueling and storage operation on Adak in support of vessels working in the region. It also operates other support facilities on the island, including a hotel. There are still numbers of military personnel moving into and out of Adak on different missions, and the hotel does a good business. Support work for the mobile advanced radar warning station operated by the Missile Defense Agency is also provided by Aleut Enterprises. The radar unit, built on a modified floating oil drilling platform, moves to different locations in the North Pacific, but is based in Adak and Hawaii. The corporation provides tender services, crew transfer and other support for the facility. Adak fuel business has been volatile The fuel business and fisheries have been volatile, which has created challenges on Adak. In 2010, Aleut Enterprise saw a 41 percent decrease, from $15.33 million in 2009, in revenues from fuel sales and other work. The decline was largely attributed to fewer bulk fuel transactions, which have traditionally low margins. It was partly offset by a $1.9 million gain in revenues from fuel storage leasing. Storage capacity in Adak totals 550,000 barrels, or 21 million gallons. Much of the fuel is delivered by tanker from a refinery in the Russian Far East. A new venture is beSee Aleut, Page 9

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Aleut: Continued from Page 8 ing explored for Adak involving shipment of bulk water to Asia. The Aleuts also have a community development quota allocation of pollock harvests for Adak, which is currently leased to the operator of a fish processing plant in Adak. The plant is currently closed – it has been in bankruptcy – but there are plans to reopen it, Gillespie said. Gillespie said the corporation hopes to grow its business in Adak, taking advantage of increased interest in northern and Arctic sea routes that are opening as the sea ice recedes. There may also be oil and gas development in the Aleutians region someday, he said. If that happens, Adak would be a good support center. Land owners In terms of real estate, the Aleut Corp. owns several properties in Alaska, including Anchorage and Valdez, as well as in Adak, where the corporation’s real estate subsidiary manages buildings and other property acquired from the Navy. There are also real estate holdings in Colorado Springs, where Aleut Management Services, the government contracting subsidiary, is based. “We like real estate. It has nice, steady earnings. We’re currently evaluating whether we want to get more actively involved in managing properties. We currently use third-party managers for our existing properties,” but a plan to provide management in-house, by corporation staff, is under consideration. The real estate subsidiary is Aleut Real Estate. The corporation is also in the gravel business in several Southwest Alaska villages. Gravel is provided mainly for governmentfinanced construction in the region. It is managed by the real estate company. 8(a) federal contracting will get tougher The Aleut Corp. expects more competition and possible restrictions in federal 8(a) minority contracting, but a diversification away from 8(a) subsidiaries will provide a safety net. Aleut Management Services, the government contracting subsidiary, helps support several federal facilities in Colorado, including the Air Force Academy. However, a state contract with the California court system to manage 25 court buildings, which is a fully competitive contact and carries no 8(a) advantages, is an example of how the program helps minority-owned firms develop expertise and grow out of the program. “It shows how the 8(a) program is still an important tool to help disadvantaged businesses grow their capabilities,” Gillespie said. “It’s a good platform to develop a commercial business. Through the 8(a) companies, the Aleuts learned how to manage facilities and people far removed from Alaska. That’s now being put to good use in the contract for the California court system, Gillespie said. Aleut Management Services, or AMS, was formed in 2005 when two previous facility management subsidiaries, SMI International and Global Solutions, also known as TekStar, were merged. In 2007 the corporation transferred its share in other federal con-

tracting company, Combat Support Associates, to AMS. The 8(a) minority contracting business has been good, but there are increasing challenges, the corporation noted in its annual report. “The company’s operations and maintenance business is expected to face increasing competition, increased proposal costs (the time spent getting new business) and potential adverse changes to the U.S. Small Business Administration 8(a) program,” the annual report said. ✦

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Arctic Slope helped

inspire, prosper

from Native claims settlement ASRC CFO Butch Lincoln

ASRC President/CEO Rex Rock Sr.

By Tim Bradner Over four decades, the Alaska Native Claims Settlement Act has brought millions of acres of lands into private ownership and hundreds of millions of dollars in new investment capital into Alaska. A lot of this started on the Arctic Slope, where a handful of Inupiat people, some young, some older, pressed claims for ancestral lands. It was a time when the young state of Alaska was selecting lands given it at statehood by Congress and selling off oil leases on the North Slope. Arctic Slope Native Association formed to file a land claim as the forerunner of Arctic Slope Regional Corp., one of 13 regional corporations formed when Congress ultimately approved a settlement of land claims in 1971. Today ASRC has grown to become one of the state’s major business corporations and employers, with about $2 billion in annual revenues and 11,000 employees worldwide, including 4,500 in Alaska, according to Rex Rock Sr., ASRC’s president. Much of the corporation’s business now is with major oil companies producing oil and gas from lands once claimed by the Inupiat. The Arctic Slope isn’t the only region where land claims activity started early: the Athabascan people of the Interior were also organizing and pressing land rights in response to early state land selections. In Southeast Alaska, before Alaska statehood, the federal government had awarded the Tlinget-Haida people of the region a small cash settlement, but no land, for lands taken for the huge Tongass National Forest. Arctic Slope, however, holds a special place in the history of the claims act. In 1965 people there pressed the first large land claim in Alaska over the entire Arctic Slope, from the Brooks Range north and from the Canada border in the east to Point Hope in the west, and including lands where oil companies were beginning to explore. The sweeping scope of the Arctic Slope claim over an entire region of the state, and the sheer audacity of it, inspired other Alaska Native regions to file similar large claims, sharply accelerating the pace of the effort. Northwest Alaska Native Association, or NANA, filed a claim over much

of Northwest Alaska. Tanana Chiefs Conference, the forerunner to Doyon Ltd. in Fairbanks, filed a claim over much of Interior Alaska. Other regional Native groups followed suit, and soon the entire state was blanketed by land claims. The sheer scope, and audacity, of Arctic Slope’s large regional claim was a result strong convictions and leadership of a handful of young Inupiats who acted, at times, against the more cautious counsel of older, most conservative Inupiat leaders. History of foresight Charles Edwardsen Jr., Joe Upicksoun and Sam Taalak formed the Arctic Slope Native Association and filed the land claim. As the initiative got under way Eben Hopson, a state senator for the region and later the first mayor of the North Slope Borough, joined the effort. Edwardsen had the insight – this was in 1964 – that there would someday be large oil discoveries on the North Slope and that oil would be the decisive factor in getting Congress to settle the claims. A major oil discovery was indeed made on the Slope in 1968. The rest is history. In 1966, Edwardsen and Hopson, Willie Hensley, Emil Notti, Morris Thompson other Native leaders formed the Alaska Federation of Natives and the quest for a land settlement began in earnest against the opposition, at the time, of the state and Alaska’s business community. Interior Secretary Stewart Udall imposed a freeze on transfers of federal lands to the state or anyone else. The cloud on lands blocked the building of the trans-Alaska oil pipeline, and the economic underpinning of the young state of Alaska, its rights to develop natural resources on state-owned lands, was threatened. It turned out well, however. Goaded by an alliance of Alaska Natives and the oil companies that needed the pipeline, Congress passed the claims act. The pipeline was built. Regional and village Native corporations, includSee ASRC, Page 11

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Arctic Slope Regional Corp. President/CEO: Rex Rock Sr. Headquarters: Arctic Slope Regional Corp. P.O. Box 723, Barrow, Alaska 99723 Website: www.asrc.com Shareholders: 11,000

ASRC: Continued from Page 10 ing those of the Arctic Slope, formed and began investing their settlement funds and developing their lands. The alliance formed between the petroleum industry and Native corporations was to develop into mature business partnerships. The result is that many of the state’s major oil services and drilling companies are today owned by Alaskans, with Arctic Slope Regional Corp.’s subsidiary Arctic Slope Energy a major company in the oil services industry. However in 1971, as the final form of the claims settlement was taking shape, Arctic Slope opposed it. People there felt the per-capita form of the settlement discriminated against the region, where there were relatively few people but a large land area. More important was that Arctic Slope’s leaders felt that their region was where the oil was and the need for the oil had motivated Congress to finally resolve the claims. Arctic Slope’s unique contribution needed to be better recognized in the final settlement, it was argued. It was to be in the end, however, at least to the satisfaction of Arctic Slope’s leaders. “We viewed the settlement as giving up too much too soon (in terms of land),” said ASRC’s Rock. “Nevertheless, the bill passed and we had to make it work.” Building the business Arctic Slope Regional Corp. has grown and prospered, and largely because of its proximity to the oil on the North Slope. Oil producers were acutely aware that providing contracting opportunities to the newly formed Native corporations made for good politics because it provided revenues, jobs and business experience for the corporations, including Arctic Slope. Interestingly, Arctic Slope was initially slow to develop business relations with the industry, at least in comparison with ASRC’s neighbors, NANA Regional Corp. of Kotzebue, which

launched joint ventures in catering and camp and fuel services, and Doyon, in the Interior, which invested in drilling. Part of this resulted from the oil industry’s actions to oppose and litigate against the formation of the North Slope Borough, a municipality formed to provide public services based on taxes of the industry, and with the same boundaries of ASRC. Many of ASRC’s early leaders were active in forming the new borough, including Hopson, his brother Eddie Hopson, Jacob Adams and Oliver Leavitt, and the lawsuit strained their early relations with industry. The Alaska Supreme Court upheld the borough’s formation, however, and eventually settlements over other disputes, such as on taxes, were negotiated. Over time, relations became more cordial. However, there was a standoffish attitude toward doing business with the industry that continued for some time. ASRC snubbed proposals from Doyon to join in its drilling joint venture (now Doyon Drilling) and from NANA to be a part of a consortium of several Native corporations joining with BP to bid in a 1979 state offshore lease sale. BP and its Native partners won key leases in what is now the Endicott oil field. ASRC, meanwhile, was getting business experience in construction, setting it on the path leading eventually to the creation of subsidiary Arctic Slope Energy. One early initiative was SKW Eskimos Inc., which specialized in village civil construction projects. ASRC’s strategic decision was to focus on construction when it began doing oil field work, leaving catering, security and drilling to other Native corporations. Gradually ASRC began buying oilfield construction companies, some of them on the cheap in the lean years just after building of the TransAlaska Pipeline System and the oil field production facilities. One key acquisition was Houston Pipeline Co., a veteran pipeline builder. Another strategic acquisition was Petro Star, which owned two small refineries near Fairbanks and Valdez. Petro Star put ASRC in the heating oil and jet fuel business. Things weren’t always easy. There were some rough times. One came after ASRC grouped its oil services holdings under one subsidiary, Natchiq Inc. A Natchiq venture in the Russian Far East did not go well and ASRC became disenchanted with the management team. The team was fired, an unusual example of quick action by a Native

corporation top managers to effect a major business course change. New management was brought in and to make the point to ASRC’s customers that things were different, and more attuned to the parent company, Natchiq became Arctic Slope Energy Services, later Arctic Slope Energy. Another challenge came when fire destroyed part of Petro Star’s Valdez plant. The refinery was rebuilt. Arctic Slope Energy built a core business of oil field maintenance services, facility construction (the company builds modules in a fabrication plant in Anchorage) and pipelines, but has further refined its business in recent years with a range of technical services in well engineering and geologic services. For the independent companies coming to Alaska in recent years, Arctic Slope Energy became a provider of a package of services so a company without the extensive support staffs of major companies could operate on the North Slope. Arctic Slope can even be a partner in new oil development, too. The corporation has an equity stake and partnership with Savant Resources, for example, in the restart of the small Badami oil field east of Prudhoe Bay. The field is now producing. ASRC also partnered in exploration with Doyon Ltd. In the Nenana Basin of Interior Alaska, where the drilling results were mixed, and with Anadarko Petroleum in a North Slope test well that was unsuccessful. The corporation has also diversified into fields like federal contracting like other Alaska Native corporations, but ASRC’s extensive land base on the North Slope is its greatest long-term asset. The corporation owns mineral rights in the Alpine oil field in the Colville River delta, which is producing, as well as in the nearby National Petroleum Reserve-Alaska. ASRC also has extensive undeveloped lands with natural gas potential, as well as oil in the southern North Slope foothills. There are extensive coal resources on the western North Slope owned by ASRC, which include some of North America’s largest deposits of high-quality bituminous coal that also has a very low sulfur content, an attractive environmental quality. Absent a major stumble of some kind, the extensive fossil fuel resources, combined with the technical capabilities developed by Arctic Slope Energy, are likely to give ASRC as place as one of the nation’s major industrial groups. ✦

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BBNC President/CEO Jason Metrokin and Board Chairman Joseph Chythlook

Bristol Bay Native Corp. posts near-record 2010 fiscal year

By Tim Bradner Hard times? Economic uncertainties? What could those be? One wonders, given the financial performance of many of Alaska’s Nativeowned development corporations. Bristol Bay Native Corp., one of Alaska’s 12 regional Native corporations, had its second-best year in Fiscal 2010, the corporation’s financial year ending last March. BBNC earned net profits of $32 million last year, a sharp turnaround from the previous year when earnings sagged due to the recession, according to its president, Jason Metrokin. BBNC’s top year in profits came in 1997 when it sold its Hilton Hotel in Anchorage to Hilton Corp. A hefty profit on the sale pushed up earnings in that year. In contrast, 2010 profits were based on the broad performance of BBNC’s diversified operating companies as well as a rebound in stock markets and portfolio investment earnings, Metrokin said in an interview. It’s a coincidence, but a telling one, that the 2010 net profit is close to the $33 million BBNC received in 1972 in its settlement of land claims through the Alaska Native Claims Settlement Act, Metrokin said. ANCSA is the congressional act that created the Alaska Native corporations, with land and cash settlements. Besides the $33 million BBNC received in the settlement the corporation also took ownership of about 3 million acres of subsurface mineral rights to lands in the Bristol Bay region. Surface lands went to village corporations in the region, under terms of ANCSA. Like everyone with investments, BBNC took a huge hit in 2009 when markets alSee BBNC, Page 13

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BBNC: Continued from Page 12 most collapsed and the national recession set in. The portfolio dropped a third in value, Metrokin said. What carried the day for BBNC in 2009 was strong performance of the corporation’s operating companies, particularly constuction, which helped the corporation net a $5 million profit that year despite the hard times nationally, he said. Although profits dipped in 2009 BBNC’s total revenues grew to a record $1.4 billion. Revenues actually dipped a bit in 2010 to $1.38 billion, although profits were sharply up. BBNC’s revenues have grown sharply over the last four years. In 2006 they were $732.4 million. Things were a lot better in 2010 because financial markets recovered – the portfolio’s gain of 38 percent helped recover most of a 36 percent loss in 2009 – and BBNC’s operating companies continued to do well. It was a strong enough year that the corporation overcame a major loss in a construction project a BBNC subsidiary was managing in Iraq. CCI Inc., a BBNC company, won the contract with the U.S. Army Corps of Engineers through competitive bidding. The project was to build a major port facility near Basra, Iraq. It is now complete. “The Iraqi navy has a fine port,” Metrokin said. There were cost overruns, however. “We had financial safeguards in place but decided to support the project through the parent company,” Metrokin said. BBNC had been the banker for CCI Inc. on the project, so the parent corporation wound up financing the loss. The loss may be eventually recovered, however. The experience hasn’t soured BBNC from doing overseas work, but lessons were learned, Metrokin said. BBNC’s current overseas work is mostly on U.S. military installations and in

Bristol Bay Native Corp. President/CEO: Jason Metrokin Headquarters: 111 W. 16th Ave., Ste. 400, Anchorage, 99501 (907) 278-3602 Website: www.bbnc.net Shareholders: 8,500

fields other than civil construction. The corporation has always had operating subsidiaries working in Alaska – two of its bestknown companies are Bristol Engineering and CCI, a veteran North Slope contractor – but there are others at work inside and outside of Alaska. Many are qualified as Small Business Administration 8(a) companies for government contracts but this doesn’t mean they only do work under federal minority-preferences. “Not all of our awards are ‘advantaged’ contracts,” Metrokin said. “The 8(a) program is just a vehicle. Our strategy is to utilize the

“We’re in a growth mode, and we’re looking for new opportunities,” — Jason Metrokin

8(a) program to help our companies learn to compete for government contracts.” Two of BBNC’s companies, Vista International and SpecPro, have graduated from the program (there are limits to the length of time minorityowned firms can have 8(a) status, and their size) and are now competing for contracts without any preference, Metrokin said. Other BBNC 8(a) companies are on the verge of graduating. BBNC now groups its operating companies into four areas: petoleum distribution, mainly PetroCard, a wholesale fuel service company that sells in Washington and Oregon; construction, which includes a number of firms specializing in niche fields; government services, which includes the 8(a) companies; and oil field and industrial services, which include CCI as well as Kakivik Asset Management, a firm specializing in oil field technical services. PetroCard is consistently a strong performer for BBNC. The company, based in Kent, Wash., sells about 300 million gallons of fuel yearly and generates revenues of about $800 million. Profit margins are thin – only a few pennies per gallon, Metrokin said – but volume makes the difference. The future looks good for all of BBNC’s business. “We’re in a growth mode, and we’re looking for new opportunities,” Metrokin said.

Included in that are possibilities close to home, in Bristol Bay. For many years BBNC focused its business investments and activities in other parts of Alaska and the Lower 48 because it wanted to leave the opportunities in the region to village corporations. “Our intention was not to compete,” with the village corporations, Metrokin said. Not competing is still the plan but there may now be opportunities near home that weren’t there several years ago, and where the capabilities of BBNC’s operating companies can be put to work. There are some interesting new developments in the region, such fisheries related investments and possibly tourism. BBNC was once in the fishing business, as an owner of Peter Pan Seafoods. The company was sold years ago at a reasonable profit but BBNC has since pursued other lines of business. Doing business in the region may require accepting a lower rate of return, however. Some in-region investments, such as tourism for example, may produce lower returns than typically generated through our other operating businesses, Metrokin said. There would be other benefits, however, such as employment for shareholders. BBNC’s shareholder hiring is healthy as it is. The corporation now pays about $2 million per year in wages to shareholders employed in various BNNC businesses, Metrokin said. The corporation pays out steady dividends, too. A policy set by the board provides that over time, 35 percent of the corporation’s net earnings be distributed to shareholders as cash dividends. Historically BBNC has surpassed that target. This year the dividend payouts are $13.80 per share, or $1,380 annually for a typical shareholder with 100 shares. By coincidence the dividend is about the same as the Alaska permanent fund dividend. The total payout is about $7 million this year. By the end of 2010, BBNC had paid its shareholders more than $95 million in cash dividends since its first dividend payout in 1978. Because almost half of BBNC’s 8,400 shareholders live in the Bristol Bay region, and another 38 percent live elsewhere in Alaska, mostly Southcentral, the quarterly dividend payments provide personal income and a nice boost to the state’s economy. ✦

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Out from under a financial cloud, Bering Straits now on a

fast-growth track By Tim Bradner Bering Straits Native Corp. of Nome has come out from under a cloud of financial worries from earlier problems. “That is now behind us,” said Bering Straits President and CEO Gail Schubert. The corporation is now one of Alaska’s fastest-growing firms. It has 6,333 original Native shareholders from its Western Alaska region. Bering Straits’ operating revenues grew from $162.3 million in fiscal year 2009 to $190 million in 2010, a reflection mainly of rapid growth of the corporation’s government contracting work, but also its other businesses. Schubert gives a lot of credit for Bering Straits’ turnaround to its board and senior officers, which include Board Chairman Henry Ivanoff and former President Tim Towarak. A lot of the government contracting was done under the federal government’s Small Business Administration 8(a) minority contracting program, but not all of it, Schubert said. For example, one of the corporation’s big projects this year, a joint venture on construction of the new $90 million Nome hospital, is not an 8(a) project. Inuit Services, the subsidiary doing the job, bid on the project in a partnership with Anchoragebased Neeser Inc. The subsidiary is an example of the success of the 8(a) program because it graduated from its 8(a) status and now competes for government contracts on its own, Schubert said. Under the federal program, minority companies have a certain amount of time to enjoy preferential bid procedures or must remain at a certain size. Like many Alaska Native corporations, Bering Straits has had companies in the business for some time, so subsidiaries like Inuit Services are graduating. This proves the purpose of the 8(a) program — helping minority firms get experience so they can grow out of the program and compete head-on for business. Banner Wind is another success story for Bering Straits, Schubert said. This is a joint venture with Sitnasuak Native Corp., Nome’s village corporation, which built and operates a wind energy farm. The project’s 18 wind towers are fully operational, supplying electricity to Nome’s cityowned utility and reducing the need to burn high-cost diesel for power generation. “This is an example of our investing profits from our 8(a) activities within the region, and to help lower the cost of local energy,” she said. The Banner Wind venture also involved a gutsy decision by Bering Straits’ board when a hopedfor government grant that would have helped the project was delayed. The board decided not to wait for the grant, but to move ahead with the project. The result was to save a year in its schedule. Bering Straits’ board launched the corporation on its course of aggressively going after 8(a) work a few years ago. Government contracting work has grown sharply, up 43 percent between 2008 and 2009, and up 24 percent between 2009 and 2010. The $178 million in revenues earned from contracts in 2010 constituted 94 percent of Bering Strait’s operating revenues. Bering Straits currently has nine subsidiaries active in government contracting. A result of this is that Bering Straits is now earning consistent profits, which are $8.1 million in 2009 and $6.6 million in 2010. Net earnings in 2010 were affected by an $8 million drop in the sharing of natural resource revenues from other Native corporations, which affected Bering See Bering Straits, Page 15

Bering Straits Native Corp. President/CEO Gail R. Schubert

Bering Straits Native Corp. President/CEO: Gail R. Schubert Headquarters: 110 Front St., Ste. 300/PO Box 1008, Nome (907) 443-5252; 4600 Debarr Rd., Ste. 200, Anchorage, (907) 563-3788 Website: www.beringstraits.com Shareholders: 6,700

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Bering Straits: Continued from Page 14

rights at Big Hurrah, a gold deposit east of Nome that was to have been developed by NovaGold along with Rock Creek. Big Hurrah is a small Straits’ profit picture directly because these revenues go right to the cor- deposit with higher-grade gold ore than at Rock Creek, and the deposit poration’s bottom line. is located close to a road, a big advantage, said Matt Ganley, Bering Alaska Native regional corporations are required to share 70 percent Strait’s vice president of land and resource. of their net earnings from minerals, oil, gas and timber activities under Big Hurrah’s time for development may be coming. If developed, Big terms of the 1971 Alaska Native claims act. These revenues dipped after Hurrah would be a surface mining operation. NovaGold’s plan was to prices for zinc and oil dropped during the recent recession. truck the ore to the processing mill at Rock Creek. The same whirlwind in the global economy Bering Straits is working with other minthat brought metals and oil prices down resulting companies, as well. Millrock Resources is Gail R. Schubert ed in losses in Bering Straits’ stock portfolio, a exploring ground near Council, White Mounsaid minerals is problem shared with other Native corporations. tain and Bluff. The lands are a combination Financial markets have since shown recovery. an area of keen of properties owned by White Mountain and Those problems aside, the effect of Bering council village corporations where BSNC owns interest to Bering Straits’ turnaround, mainly a result of 8(a) conthe majority of the subsurface estate. Straits because its tracting work, has been dramatic in terms of Valdez Gold and Kinross Gold, the latter region, mainly the net earnings per share, one indicator of financompany the owner and operator of the Fort Seward Peninsula cial performance. Between 2005, the first year Knox gold mine near Fairbanks, have partnered of profits after four years of losses, and 2009, with Millrock. Kinross is involved in Millrock’s earnings per share grew from $1.65 to $12.75, exploration program on Council lands, while an increase of nearly 800 percent, according to Bering Straits’ 2009 an- Valdez Gold is working on the Bluff prospect. nual report. There are also known tin deposits in the region. Tin was mined on a During the same period, shareholders’ equity increased from $19.3 mil- small-scale beginning in 1903 at a location appropriately dubbed “Tin lion to $48.5 million. City,” where a small community was also established. Although government contracting is important, Bering Straits is also Schubert hopes to see more mineral exploration done there. She is diversified, owning commercial and residential real estate in Anchorage, interested in increasing the industry’s knowledge of rare earth elements Nome, Unalakleet and Valdez, as well as a vehicle and equipment rental in the BSNC region, which have been reported but not fully explored business in Nome. See Bering Straits, Page 16 The 56-room Aurora Inn in Nome is owned and operated by subsidiary Bering Straits Development Corp. Stampede Ventures, a subsidiary of that company, has a rental fleet of about 60 vehicles in Nome. Despite its upturn, there are still challenges for BSNC. The temporary closure of the Rock Creek gold mine near Nome has been a big setback, not only because Bering Straits owned some of the subsurface mineral rights but also because its subsidiaries were doing substantial mining support work. “Had it stayed in operation, the mine would have employed 160 people, which is substantial for a community like Nome, with its population Aerospace and of about 3,500,” Schubert said. Technology Services Rock Creek may yet restart, probably under new owners. NovaGold Resources, which owns the mine, is working to find new buyers and Construction and with gold prices at high levels there is interest. Engineering The mine is a good asset because it has substantial gold resources, Telecommunications and recent exploration by NovaGold has added to the resource. NovaGold had a streak of hard luck when the mine started up due to water Hospitality and accumulating behind the mine tailings dam after unusually heavy snows Support Services and construction cost overruns. NovaGold decided to sell the mine so that it could focus on developMarketing and Our family of companies ment of the large Donlin Creek gold mine near the Kuskokwim River Communications has both the resources where it is half owner. and the experience to Real Estate Schubert said minerals is an area of keen interest to Bering Straits provide the services because its region, mainly the Seward Peninsula, has a long history in Nonprofit you need. mining and the shareholders have had a lot of experience with the industry. The corporation owns about 1.6 million acres of subsurface minCalista Corporation, 301 Calista Court, Ste. A, Anchorage, AK 99518 eral rights in region, much of it in areas of high potential. t: (907) 279-5516 ★ f: (907) 272-5060 ★ calista@calistacorp.com Besides its Rock Creek holdings the corporation owns subsurface

OUR HISTORY

YOUR FUTURE

WE’VE BUILT A LOT IN 40 YEARS AND WE’RE STILL BUILDING.

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Bering Straits: Continued from Page 15

INVESTING IN OUR COMMUNITIES STIMUlaTING ECONOMIES IN RURal alaSKa

CREaTING FIShING OppORTUNITIES IN KaKE

Haa Aaní, LLC is a Sealaska subsidiary that seeks to create sustainable economies and employment across the region, such as oyster farming, fishing and even information technology.

The fish plant in Kake is a new endeavor to create jobs in this small community of 700. The plant is expected to employ 30 to 35 people and hopes to expand regionally over time.

CONVERTING TO RENEwablE ENERGy

OySTER FaRMING FOR a SUSTaINablE FUTURE

Haa Aaní, LLC helped convert Sealaska Plaza, our corporate headquarters, from oil-based energy to renewable wood pellets, a sustainable, green energy initiative.

Our oyster farms provide employment for people in Yakutat and Kake. By 2013 the farms are expected to yield one million oysters.

bUIldING FOR ThE FUTURE

GOING GlObal IN KaKE

Alaska Coastal Aggregates (ACA) supplies the sand, gravel and other material that underly complex projects such as airport runways. ACA invests in new initiatives each year that benefit our tribal member shareholders and communities.

Managed Business Solutions (MBS) is a Sealaska Haa Aaní initiative that provides information technology services. The Kake office employs five people and will employ more as the business grows.

Haa Aaní, LLC is a wholly owned subsidiary of Sealaska. These are just a few of Haa Aaní’s projects that are designed to strengthen all Southeast Alaska communities. Learn more about our efforts on behalf of the region at www.sealaska.com.

and analyzed. These elements are now of strategic importance to the U.S. and rare earth elements are often found near where tin is found. Rare earth elements are used in high technology industries and are very important to the high-tech weaponry of the U.S. military. China is a now the source of most rare earths being mined and that nation, which is building up its own military, has recently limited rare earth exports. The entire Bering Straits region is highly mineralized but most of the exploration that has been done has been focused on precious metals like gold and silver. The widespread presence of thorium and uranium, combined with reported occurrences of monazite, tin, and other elements commonly found in association with REE’s indicates strong potential for larger rare earth deposits, said Matt Ganley, the corporation’s vice president for land and resources. That’s not to say a lot more gold won’t be found. In fact, the geologic source of the rich Nome beach placer deposits that sparked the original gold rush in the region near the turn of the 20th century has never been discovered, Ganley said. It is somewhere inland in the hills, and a lot of people, including Bering Straits, would like to find it. A long-term project the corporation is working on involves potential geothermal development at Pilgrim Hot Springs, a long-known geothermal source northeast of Nome. The hot springs has been used for years as a recreation area and was once the location of a Catholic school. Bering Straits, which is one of the owners of Pilgrim Hot Springs and which owns land in the area, is working with the University of Alaska Fairbanks to map the local geology to better define the geothermal potential. Bering Straits hasn’t ignored its charitable responsibilities or its role in helping further the education of its shareholders and their children. In its most recent financial year the corporation gave $232,354 to the Bering Straits Foundation, which supports scholarships. Since 2000 the corporation has given $932,890 to the foundation. Bering Straits also contributed $200,000 in 2010 and $200,000 in 2009 to the Northwestern Alaska Career and Technical Center, which provides vocational education to all residents of the region, Native or non-Native. Other charitable donations in 2010 totaled $103,491, according to the corporation’s annual report. ✦

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Calista Corp.

aims to cut dependence on 8(a)s, add jobs

Calista Corp. President/CEO Andrew Guy Photo by Michael Dinneen, For the Journal

By Tim Bradner Things are going well for Calista Corp., the Alaska Native regional corporation for the Yukon-Kuskokwim region of Southwest Alaska. Revenues are up significantly and profits are steady. There are challenges out there – the need to diversify among them – but for now all the indicators are up, says Calista President and CEO Andrew Guy. Calista has had its bumps in the past, like many other Alaska Native corporations, when a series of business investments in the 1970s and 1980s did not perform as expected. See Calista, Page 18

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Calista: Continued from Page 17 That’s in the past now, and Calista appears to be on a steady growth track. Guy was named president of Calista in October 2010, replacing Matthew Nicholai. Guy was previously Calista’s executive vice president and general counsel, and he brings a mixture of personal experience and professional preparation to the job. He is representative of a new generation of young, educated Alaska Natives who have professional training and are moving into the senior management positions in the Alaska Native corporations. Guy is a Calista shareholder, born in a small village in the region. He attended high school in Bethel, the regional hub community, received his bachelor’s degree from the University of Alaska Fairbanks in 1985 and a law degree from the University of Colorado School of Law in 1995. He is a member of the Alaska Bar Association. Calista’s numbers tell a good story. Revenues in 2010 were at about $234 million, Guy said. That’s up from 2009 revenues of $203 million. The total for 2010 will be confirmed when audits are completed later this spring, he said. Net after-tax profits will be similar to 2009, although final numbers cannot be announced until the audit is finalized. Calista paid a dividend of $2.25 per share in 2009 and its board will likely declare a dividend this spring for 2010. Calista was able to navigate the national recession of 2009 without substantial adverse effects, although there were challenges. Calista region The corporation represents a large area of Southwest Alaska, about 10 percent of the total state land area, including the middle and lower Kuskokwim River, the lower Yukon River, large river delta areas and a big section of coast between the two river systems. Calista has 65 villages and 13,000 original shareholders. The corporation owns 6.5 million acres in the region that were selected under terms of the 1971 Alaska Native Claims Settlement Act. Calista’s region is not the largest in total

area – Doyon Ltd., in Interior Alaska, holds that distinction – but it has the largest Alaska Native resident population of any region. Communities in the region are populated mostly by Yup’ik people with some Cup’ik and Athabaskans. In many families, Yup’ik is still the first language learned and spoken by children. The culture is still dependent on a subsistence lifestyle. The Calista region is also one of the most economically depressed parts of Alaska. Subsistence is the primary food source and helps sustain people, but cash is still needed for heating oil, basic utilities and other equipment needed for rural living. Basic living costs a r e much

h i g h e r than in Alaska’s urban communities, however. Jobs are scarce, and Guy is keenly aware of the need. One of his goals as president is to increase Calista’s activity to create jobs in the region. There is a plan to do that, too. The Donlin Creek gold project, inland from Crooked Creek village on the Kuskokwim River, is on land where Calista owns the mineral rights. The surface lands are owned by The Kuskokwim Corp., which is owned by 10 villages in the immediate area. If Donlin Creek’s developers, a joint venture of Barrick Gold, a major mining company, and NovaGold Resources, a minerals exploration company, proceed with construction, the mine will be one of the world’s largest gold producers. Donlin Creek could provide the kind of job-creating stimulus to the Y-K region that the Red Dog Mine, where NANA Regional Corp. is the landowner, has provided to Northwest Alaska communities. Business plan Aside from mining, the opportunities for investing in the region are few, and until Donlin Creek gets on line, Calista must focus its

Calista Corp. President/CEO: Andrew Guy Headquarters: 301 Calista Court, Anchorage 99518 (907) 279-5516 Website: www.calistacorp.com Shareholders: 13,300

business investments in other parts of Alaska and in the Lower 48. Calista’s businesses are diverse, and include construction, oil and gas drilling, telecommunications, publishing, commercial printing and advertising, as well as holdings in several real estate title companies. And, as with other Native corporations, Calista has a number of companies that specialize in federal facility contracting under the U.S. Small Business Administration’s 8(a) minority business programs. Calista has done well with its 8(a) contracting. In fact, 80 percent of the corporation’s revenues in 2009 and 2010 were through its 8(a) companies. One of the corporation’s goals is to reduce that percentage. “I’d like to get the number down, but federal contracting will continue to be important in our business,” Guy said. Two new acquisitions by Calista in 2010 — the purchase of Brice Inc., a construction company, and Yukon Equipment Inc., a dealer in construction equipment — will have the effect of reducing the 8(a) dependence to about 60 percent of our revenues, Guy said. The purchase of Brice and Yukon Equipment were also strategic moves in preparing Calista to play a larger role in construction and operation activities in the region, as well as for the potential of the Donlin Creek mine, assuming it is built. Brice is a 40-year-old company founded in Fairbanks. The company specializes in airport, road and port construction and has experience in handling the difficult logistics of supporting rural projects. Brice also owns its own fleet of barges and tug equipment. Brice also has experience in hiring and training people from villages where projects are being done. Brice has a strong record for hiring of Alaska Native workers. See Calista, Page 19

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Calista: Continued from Page 18 Calista already had a foothold in construction through two companies, Tunista Inc. and Tunista Construction LLC. The addition of Brice strengthens that position. Established in 1945, Yukon Equipment is another experienced Alaska firm. The company has supplied equipment for most every major Alaska construction project since the building of the Alaska Highway in World War II. Yukon also provides a much of the heavy and snow removal equipment used on airports throughout the state. Calista’s other enterprises and business investments are diverse. Nordic-Calista Services operates three drilling rigs on the North Slope. Calista owns 20 percent of the company. Calista has employed shareholders on the drill rigs; drilling jobs are among the highest-paid in the state. Another relatively new acquisition for Calista is Alaska Telecom Inc., a communications company that specializes in serving North Slope oil field customers, projects and operations working in remote locations. Guy said Calista’s plan is for the firm to expand into new geographic areas and take advantage of opportunities under the 8(a) program. Chiulista Services Inc. is a camp services, logistics support and expediting company that specializes in supporting remote industrial projects. In recent years, Chiulista Services has worked to support the field exploration and development work at Donlin Creek, and has expanded to support of other projects around the state. Among other companies, Calista is a part owner of NorthStar Gas LLC along with NANA Development Corp. and 16 village corporations. NorthStar provides fuel services to Western Alaska, and is about to take delivery of a new fuel barge built for shallow water conditions that will be operated in a partnership with Delta Western, a veteran marine fuel operator. NorthStar Gas will also offer deck-freight services with the barge. Calista also operates a number of companies specializing in 8(a) contracting with federal agencies in fields like facility maintenance, fueling, laboratory services, aerospace technology and testing, and aviation support services as well as construction. Calista this spring sold its holdings in its printing and newspapers. Mining for jobs But development of the Donlin Creek gold project is one of Calista’s highest priorities because of its potential for providing high-paying jobs in the region and business opportunities for Calista’s companies and shareholders. Calista Corp. itself discovered the gold mineralization at Donlin Creek. The corporation engaged geologists to survey federal lands that were available for selection after the Native claims act was approved by Congress in 1971 to identify areas with mineral potential. Calista hired its own geologists to provide in-house expertise. Mining had always been an important activity in the northern parts of the Calista region. The area was a center for placer mining. Given this, it was logical for Calista to consider selecting lands with mineral potential. Calista’s geologists identified lode gold mineralization at Donlin Creek and felt it could have enough resources for a lode gold mine, a much larger operation than the placer mines that traditionally oper-

ated in the region. Calista began efforts to attract an experienced mining company as a partner. Two companies worked on the property but backed out. Eventually the corporation attracted Placer Dome, an experienced gold mining company. Placer Dome began work to explore the prospect in the 1990s and the initiative led to the current joint venture. Placer Dome was purchased by Barrick Gold and NovaGold Resources came in as a partner. Like all resource extraction projects on regional corporation lands, 70 percent of Donlin Creek royalties will be shared with other Alaska Native corporations, a requirement of the Native claims settlement act. Building a stronger regional economy will take more than a mine, however. “Calista understands that ANCSA corporations were formed in part to improve each region’s socioeconomic standing,” Guy said. Calista is focusing on three goals to accomplish this. First is building and strengthening the transportation infrastructure in the region. Second is to build renewable energy, the region has some of the highest energy costs in the nation. Guy said Calista and its leaders are now pushing for a hydroelectric facility, which could serve Bethelarea communities. Finally, educational and job training opportunities are needed for a region with low graduation rates and few employment choices. “The Calista Heritage Foundation was created in part to strengthen the scholarship fund and increase internship and training opportunities for students,” Guy said. ✦

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From Tundra to Technology Preserving the knowledge of the Alaska Native Claims Settlement Act for future generations December 18, 2011, will mark the 40th anniversary of the passage of the Alaska Native Claims Settlement Act. The ANCSA@40 Committee, a group of volunteers, was formed to highlight the significance of ANCSA during this anniversary and to educate the general public of the struggles and sacrifices Alaska Native people made in achieving this historical “living document.” To achieve this goal, we have recorded the stories of some of the chief architects of ANCSA. A lot has been accomplished in 40 years. Today Alaska Native corporations provide a solid foundation for the state’s economy with a broadly diversified mix of business activities both inside and outside Alaska. Native corporations are major employers and as the largest private landowners are actively engaged in promoting economic development, including mineral, oil and gas and timber resources on Native-owned lands and state-owned lands as well. Young Native men and women, many with the benefit of advanced education, are now moving into Oliver Leavitt leadership positions of these enterprises. And yet there are challenges. Several of these were touched on the in last of five forums sponsored in 2010 and 2011 by the ANCSA@40 committee, held on Sept. 9. Alaska Congressman Don Young, Oliver Leavitt, an early leader of the Arctic Slope Native Association (and later Arctic Slope Regional Corp.) and Sheri Buretta, current president of Chugach Alaska Corp. were on the panel. Buretta noted the special challenges Sheri Buretta Alaska Native corporations face as they move into national and international markets, particularly misunderstandings of the Alaska Native 8(a) businesses that do work with federal agencies. The activities of these companies are bringing dividends and benefits to thousands of disadvantaged people in small rural communities, Buretta said. Congressman Young said that the ANCSA corporations must work harder to bring benefits to younger Native people, and to extend shareholder rights to more young people. Otherwise some corporations will wind up being owned by only a part of Alaska’s Native community, descendents of the original 1971 shareholders, Young warned. Oliver Leavitt said there are tribal groups in rural communities who still feel bypassed by ANCSA, and who feel they are not benefiting. “There are those who feel left behind,” Leavitt said. This is problem that must be dealt with, he said.

ANCSA @40 PANEL SERIES HOWARD ROCK ENERGIZES ALASKA NATIVES (1) Alaska Museums and Historical Society Conference, Fairbanks September 17, 2010 Panelists: Emil Notti Mary Jane and Bud Fate Richard Frank Mike Bradner Al Ketzler, Sr. Tim Bradner HOWARD ROCK ENERGIZES ALASKA NATIVES (2) Anchorage Loussac Library, Anchorage • November 16, 2011 Panelists: Willie Hensley Judy Brady Emil Notti Tim Bradner THE MISSING CHAPTER: WOMEN BEHIND THE ACT UAA, Anchorage • March 18, 2011 Panelists: Marlene Johnson, Sealaska Frances Degnan, Bering Straits Brenda Itta-Lee, Arctic Slope Agnes Brown, Cook Inlet ANCSA AND THE PIPELINE UAA, Anchorage • April 8, 2011 Panelists: Senator Mike Gravel Mayor Edward Itta, North Slope Borough Jack Roderick, former Mayor of Anchorage Tim Bradner ALASKA NATIVE CORPORATIONS OVERCOME CHALLENGES, ENTER THE GLOBAL MARKET UAA, Anchorage • September 9, 2011 Panelists: Congressman Don Young Sheri Buretta, Chairperson of Chugach Alaska Oliver Leavitt, former Chair of Arctic Slope Regional Transcripts of the panel discussions will be posted to the ANCSA@40 website and archived at the University of Alaska Anchorage. 360North, a program of KTOO-TV in Juneau, will broadcast 30-minute video excerpts of several panels statewide in October and November. Photos by Rob Stapleton

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Interior Athabascans led early efforts to get settlement Alaska Museums and Historical Society Conference, Fairbanks September 17, 2010: Emil Notti, Mary Jane and Bud Fate, Richard Frank, Al Ketzler Sr. Early leaders in the Native claim effort describe their experiences.

Al Ketzler led early efforts to restart the Tanana Chiefs Conference helping organize claims of Native land rights in Interior Alaska.

Al Ketzler:

I was born and raised in Nenana and was active in its Native Council, being the chief and council member off and on. I spent a lot of time on the trap line, and spent a winter by myself when I was 16 years old on the trapline. My sense of right and wrong is every strong, and I had a sense that we were not being treated fairly. This was after statehood and Nenana was the center for state selection of lands. So we became very concerned about how the tribes could maintain hunting, fishing and trapping rights in the area. We talked with our chief, Frank Alexander, about inviting all the Interior villagers to the dog races in February in Nenana to talk about the land claims and what we could do to work on the state taking our lands. About 10 villages showed up to the meeting at the chief’s house. I advocated very strongly for reinvigorating Tanana Chiefs (now Tanana Chiefs Conference) because it had not been active since 1915, and this was 1962. I called to the village of Tanana and they said that is great because we are just about to reestablish (a traditional) series of Indian games and celebrations. In discussion we coordinated our meetings and wrote to every village in the state, every Native organization we could think of and invited them. About 40 tribal representatives came. We talked about our rights, jobs, fishing and found a similarity of problems across the state. We decided that each village would make a claim of land they used. Over the winter we sent out maps, and we had a group who did a lot of the legwork getting maps and instructions together with petitions to be signed by folks claiming ownership of land. In 1963 we sent the petitions to the President (John F.) Kennedy. We got a letter back, thanking us for our letter and referred the matter to Stewart Udall, the secretary of the Interior. As time went on Secretary Udall declared a land freeze and he used those petitions and those maps as the basis for his land freeze. Soon after the pipeline construction was being considered, and Stevens village filed suit to stop it. Alfred Starr (of Nenana) was another influence. He had never gone to school but he had a real interest in Native rights and traveled out of state and to different places to see how people operated. He advocated that we had to own land. PAGE 2 | From Tundra to Technology

Al Ketzler

He was always there saying his piece. And he influenced me. I never had a chance to say thanks to him for his leadership.

Bud and Mary Jane Fate helped organize the Fairbanks Native Association to promote improved education and social services for Alaska Natives.

Bud Fate:

In 1962 I started a dental practice in Fairbanks, and down the street a young Native person, who was a friend; his name was Ralph Purdue. He had a little jewelry shop in the old Nordale Hotel and he produced beautiful jewelry. In the meantime he and a friend of his, Nick Grey, came up with the idea of a Native association in Fairbanks because a lot of Native people were living in the larger urban centers. That was the kickoff for the Fairbanks Native Association. Its prime goal was education. At that time, the Lower Kuskokwim River achievement level was third grade. The only other Native association with any advanced knowledge of education was the long-enduring Alaska Native Brotherhood, basically in Southeast Alaska, though it did have camps in other parts of the state. We had real issues. Most of our talented Native kids had to go out of the state to get high school education, which was not even up to standard, because those BIA (Bureau of Indian Affairs) schools had a policy that simply said, “Graduate those people at any cost.” Mount Edgecumbe (in Sitka) was within the state and considered by many as a pretty good school, even though it was run by the BIA. Even then if you had to go from Barrow to Edgecumbe it a very long way to go. So the Fairbanks Native Association came up with its banner a regional high school program basically to get those rural Native kids educated.

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Mary Jane Fate:

I was born and raised and lived seasonally on the trap line. Every year in the winter we missed our school and education, and in the summer we had our fish camps out of town. And we also “muskratted” (hunted muskrats) behind Stevens Village in the spring. And then we had to bring the logs down the river. And, truly, it wasn’t very easy, but we pulled together as a team and we had our cash on hand after this. The steam boats were taking the logs we brought down on the rafts. This goes way back and the important thing about it is we were told (by our parents) that education is our food and they really meant it: “Education is our food.” That came into our heads over and over. We had some great people in our town of Rampart. For years when we were little kids Chief Matthews of Rampart said, “We have to make money and have to get education.” Some people told us “just leave (for school) and don’t come back, you must get educated.” Our school in Rampart just went through third to fifth grade. So, we went to boarding

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Emil Notti was the first president of the Alaska Federation of Natives and helped coordinate much of the congressional work that led finally to passage of ANCSA in December 1971.

Emil Notti:

I first came to Fairbanks in 1940, when I was 7 years old, and came to get my tonsils out. We came up the river on the steamer Nenana as far as Nenana, and then we took a two-car train from Nenana to Fairbanks. Many of us were born in Alaska when Natives were in the majority. According to demographers, Natives became a minority in 1939, because in the 1940 census, there were 72,000 people and we were in the minority for the first time. At that time we had free uses of land, we wandered anywhere where we needed to and we hunted and fished when and where we wanted to, summer included. But there was no harm done to the game because there were not that many people who hunted. Being in the minority was a big change and a hard one for people to get adjusted to and to accept, to be in the minority and having laws imposed on people restricting their lifestyle that they had no say in. As long as people had free use of the land there was no conflict, but with statehood came the right to the state of Alaska to select 103 million acres of land. The first selections were along the highway system, mainly. And you could drive down the highway and see a little poster nailed on a tree that had a

Mary Jane Fate

schools and I went Mount Edgecumbe (in Sitka) and traveled around the Southeast. I wanted to learn about the people and the islands. At Edgecumbe we had to be on our own and we had no telephone, and we couldn’t talk or see our parents for long periods. But what we did is we organized some groups that some of us women set up. Several of us women were interested in education, health, economics and planning for our villages. When we were in school at the beginning, in Rampart, I saw a picture that looked very different than any other picture I had seen. It was in a magazine, and I asked the teacher, “Please tell me what is this?” He said, “Well, it is a train, and you’ll never see it.” Later on in life, I saw him again, when I was on the board of Alaska Airlines’ Alaska Air Group. For 25 years I was on Alaska Airlines’ board, the only woman for 23 years on the board. Just think, I told him, “Now I am flying in the trains up there,” (in the sky).

Emil Notti

number on it. You could go to the land office, put $50 down, and pay $50 a month and you could buy that piece of land. The argument against statehood was that we could not support the state — we were too poor, we had no industry, and we did not have an economic or a population base. So, state government was run on the sales of land. To get that land the state started selecting the best land. Native villages are by and large on the best sites, and there came a conflict. The state was selecting land, people started being restricted in the See Fairbanks, Page 4

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24 SPECIAL EDITION • SELECT Fairbanks: Continued from Page 3

S T O R I E S F R O M A bill. Y E A RThen L O N Geverybody SERIES got into the act. The Senate Interior Com-

use of the land, and then protests were filed against the state selection of land. There was a lot of activity leading up to AFN. Regional groups were being formed. Any way you sliced the data Native people were on the bottom, with short life spans, so they advocated all of those social issues. I was a young engineer and knew nothing about politics. I had just returned from Los Angeles, where I was working on the Minuteman missile electronic guidance system. I was fascinated with Nick Gray (an early Native leader). He was a great speaker and he took me under his wing. I used to go to with him to radio and newspaper interviews and I was fascinated by his use of language. He was a great speaker. Nick got leukemia and went into the hospital, and so there was another election at CINA and I became its president. In 1965 Bob Bennett, who was then director of BIA in Juneau, was nominated to be commissioner of BIA in D.C. In January 1966 they were holding confirmation hearings in the Senate. Bennett was an Oneida Indian. Scoop Jackson (the senator from Washington state), said, “Mr. Bennett, you are an Indian yourself. And the United States spends several hundred million dollars a year to solve the Indian problem,” which across the U.S. was the same as in Alaska – poor education, bad housing, no jobs, poor health statistics. Richard Frank of Minto “You are an Indian! What would you do about that to solve those problems?” Bennett started to answer, and Scoop Jackson stopped him and told him he didn’t want an off-the-cuff answer, and that he wanted him to go and come back in 90 days with a written report for the Congress to consider. In April of 1966, Bob Bennett, now the BIA commissioner, was before the committee again with his report. I don’t know how I got hold of the report, but I read the one page on Alaska. It said the BIA was drawing up the final solution to the land problem in Alaska and I wondered what that was all about. I read it and sat on it. Finally, in July, I wrote a letter to 14 people around the state that I knew either personally or by reputation. I said if we have any rights to land we should get together and talk about it, because BIA is drawing up a “solution.” So we called a meeting for October 1966. Howard Rock (publisher of the Tundra Times) got my letter and printed it first in August, and he wrote about it every week. Instead of 14 people, 300 showed up in Anchorage for our first statewide meeting. We agreed that we needed to organize and have a unified voice to deal with the land issue. So while the regional groups were meeting about social issues, the Alaska Federation of Natives was formed for a single issue: land. And our first position paper was to became Senate Bill 2020, the first land claims PAGE 4 | From Tundra to Technology

mittee wrote a bill, the House Interior Committee wrote a bill, and the state of Alaska wrote a bill. There were others, eight bills in all, and the result was this compromise 4 1/2 years later that resulted in the land claims settlement. There were some outstanding points along the way. One was the land freeze. I was in our attorney’s office in Anchorage, who was Stanley McCutcheon, and while I was there he made a phone call to Stewart Udall. Udall was the outgoing secretary of the Interior because (Richard) Nixon had just been elected. Stan convinced Udall to protect whatever rights to lands that the Native people were claiming and that he should stop transfer of land from the federal government to the state, to miners and homesteaders, for airport sites, home manufacturing site and just stopped everything. And Udall agreed to it. So that was the land freeze. When Scoop Jackson held hearings he said we wanted that land freeze held, because if Congress ever got around to solving the problem he wanted the corpus intact, so to speak. He wanted to have something to divide up. So the land freeze held. We had a lot of opposition. The (Alaska) Chamber of Commerce took a stand against us statewide, as did the miners. Surveyors, strangely enough, took a stand against us. But later, when they found out 40 million acres of land was going to be surveyed, they became our friends. We happened to hit a window of time, in 1971, where we were able to maximize land and money. Ten years earlier we probably could have gotten more land. Then oil was discovered and land became much harder to get. Ten years later there was a lot of money coming from oil and so we could have gotten more money, but less land. So I think we maximized land and money. At the time it was the biggest land claim the United States had ever settled. Forty million acres, I think, is bigger than all the reservations in the United states put together. There were a lot of people involved and a lot of sacrifices made in getting the land claims passed. I’ll share one story. Harvey Samuelson (from Bristol Bay) is not with us now, but when he was involved he would take time off from work and pay his way to Anchorage, or wherever the meetings were and in the end he had about $30,000 of his own money invested. Cecil Barnes mortgaged his house. There are many people like them who never got the recognition or thanks for their effort. But they did because they thought it was the fair thing to do. I took the job (AFN president) on because I knew it had to be done. AFN had $9 in the bank when I quit a full time job. I got three months behind on the house payment, and three months behind on the car payment. And literally, one week, my wife and I ate out of one pot of beans! ~

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Anchorage Loussac Library, Anchorage, November 16, 2011 Don Wright, Emil Notti, Willie Hensley, Roy Huhndorf

Roy Huhndorf worked in the land claims effort and was the first president and CEO of Cook Inlet Region Inc.

Roy Huhndorf:

Just before Alaska became a state, Native people were becoming more concerned about what was happening to the promise made in the Treaty of Cession with Russia and in the Organic Act (U.S. Organic Act of 1884) that set forth the governance of Alaska. Transferring land to the Native people who were using and occupying it was left to a later Congress. When Alaska became a state it starting selecting its state land entitlement, about a third of the state, and before that a lot of land, about another third, had gone out of the hands of the Native people for other purposes that never could be retrieved. Native people were becoming concerned. There were about 36 or 37 associations formed statewide and from time to time the leaders would come to Anchorage and would need a place to meet. Eventually CINA, the predecessor of CIRI, became a kind of incubator. In 1966, several of these young men and women decided it was time to create a statewide organization. AFN was formed and charged with the job of securing a land settlement. The times were fortuitous. A village along the pipeline (Stevens Village) successfully filed a lawsuit saying that the Secretary of the Interior was not entitled to set aside land for the oil pipeline. He first needed to settle the claims of Native people who were using and occupying that land, and so the United States set out in earnest to make a settlement with Alaska’s Native people. CINA was an incubator at that time because the other asso-

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Willie Hensley

from selecting more land and lands going into other hands. There were many deliberations not the least was whether we should have more of a tribal settlement where we had tribal rights and land rights bound up together and a settlement made in that fashion. There was a lot of opposition from the federal government to that, and there was a lot of reluctance on the part of the Native leadership at the time, because so many treaties have been broken. The time was right to talk about corporations. The idea was to have tribal members become shareholders in corporations and doing this legislatively (instead of by treaty). And that was kind of appealing at the time because you can change legislation but you couldn’t change a treaty very easily. That is precisely what happened after the legislation was passed in 1971, providing for the largest land settlement for any aboriginal group in America. The legislation has been changed many times to improve it to make it more workable for not just us but the United States. The genius of all had to do with the leadership at that time.

Willie Hensley was active in the formation of the Alaska Federal of Natives and in the effort to pass the Native claims settlement.

Willie Hensley:

Emil Notti, first AFN president

ciations were remotely located and didn’t have the convenience of a large population center and transportation so people could easily get together. Fairbanks, of course, was another center and a similar thing happening there. Out of CINA in 1966 grew the AFN and then the settlement effort proceeded. The timing was right, the lawsuit and the land freeze had successfully stopped the state

It was a challenge (to hold the AFN together) because we had ancient cultures, many of which had been at war with one another for millennia. And then we didn’t have real knowledge, cultural-wise, about each other because Alaska is big and there were different experiences. Some regions were more westernized than others, more familiar with private property and western world than others. And we had limited communications, we had no phones. People don’t even know what a mimeograph is anymore, but we used those. We had clunky old typewriters. So it really was a challenge to try to hold it together. Part of the reason we stuck together was that we felt we were under siege because the specifics of the statehood act were being implemented, seven years after statehood, and the assumption that we (Native people) didn’t have any rights to land was prevaSee History, Page 6

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26 SPECIAL EDITION • History: Continued from Page 5

S E L E C T S T O R I E S F R O M A might Y E A R Lhave O N G Sreceived E R I E S a few cents an acre, after they took it all. It

was no solution. NottI: Some things that persuaded us to do it was the record lent. No politician who wanted to be elected to statewide office of the BIA at that time. We watched the way the BIA operated. In would even suggest that we had any right or aboriginal title. But I think overall it was desperation that helped us stay to- the 1940s Indian Reorganization Act federal corporations were augether and I think we were never sure of the extent to which thorized to give help to people who wanted to put in canneries, esthe “system” would come down on us in some way that would pecially in Southeast Alaska. Many villages in Southeast never had negate our hopes for some kind of land claim. So, we just were IRA canneries. Fishing was a money-making business. For some inexperienced; many of us had the minimum of historical or legal reason under BIA management, IRA canneries in Southeast really knowledge. I think what we were united in was that we all sensed made money. So, we didn’t want the government to make our decithat this was our last hope of getting something of our former land sions for us. We wanted to be able to make our own mistakes. HENSLEy: My first exposure to the notion of corporations and holdings for our people. So that is in part what held us together. Indians was when I was a college student It was tough time for us when Gov. and I went to a hearing dealing with the isHickel was elected because he was a fightsue of fractionated land in the Indian world er for statehood and he was full of piss and where these allotments ended up with hunvinegar said and he was going to bulldoze dreds of owners, which is probably what (opponents) out of the way. We were beginwould have begun to happen here. ning to thwart the hopes and of people who Congress was looking for some way to fought for statehood, who saw huge dolhave that land put into a form that could be lar signs and great and had aspirations for (economically) used or leased. So we were Alaska. Here we were throwing sand in the going to form a corporation to which these gears of that system through our regional fractionated ownerships could be vested. land claims. There was something called the Land We also had to convince some of our Claims Task Force that Gov. Hickel created. own that we had legitimate rights, and some We had been at loggerheads with the state were afraid of standing up to the system bewhen Wally came in. And it was clear to cause we were in fact taking on the world, us that if the Native people were at odds so to speak—the state, federal government, (with each other) it was the perfect excuse developers, business people—the majority. (for the state and Congress) not to do anyAnd so we had to work this literally night thing, but it was also true that if the state and day once we got into it. and Native were at odds it was unlikely that There were some who were very much the Congress would do anything. So it was afraid of the legislative route because hisincumbent upon us to find some way to tory had been that Natives got screwed in move forward. We had the state in a kind of legislation, when you looked at what the stranglehold if it was going to survive with history had been and the compensation the land that was to go to the state. There schemes of the Court of Claims or the InDon Wright dian Claims Commission, or when you saw Don Wright was given special thanks at the Novem- was a land freeze on at that time the state what had happened in Southeast Alaska ber panel for his service to AFN. Wright was presi- was not making it. It was poor and running with the taking of Tongass (National Forest). dent during the critical, final stages of the ANCSA a deficit government in those days. There was an interest on the part of After 35 years the people there ended up passage in 1971 and negotiated critical elements of the final legislation. the state to move forward, too. When Gov. with $7 million and not a square inch of Hickel was running for office in 1966 he land. That just didn’t seem fair. But some of us believed that legislation was worth the effort promised a Department of Native Affairs. He was reaching out to in spite of the dangers of that approach. Some think we pulled 40 the Native world. In those days we had no money—AFN had no million acres out of thin air but we had actually pushed for 60 money – and we couldn’t even get our people together, and didn’t million acres. The (AFN) board’s position towards the end was for have money for hotel rooms. What Wally did do is create a Rural 60 million acres, but we had plenty of tensions within our federa- Affairs Commission instead of a department and he used that as tion and a lot of different issues. And yes it is true that the initial a vehicle. We got him to put the entire AFN board on the comlegislation was going to throw us into the court of claims in which mission and then out of the commission we selected the drafting we’d have been totally screwed. Maybe 50 or 100 years later we committee to try to work out some sort of mechanism for the state to do something that was positive (toward the land claim issue). NottI: We want to explain how difficult this whole thing was. Remember that in 1966 there were no phones in rural AlasAt the November panel, Tyonek Native Corp. was thanked ka. We communicated through Fairbanks radio “Tundra Topics” for its action in funding the organizational meeting of the where at 6 p.m. and 9 p.m. you could put messages on the radio AFN and making a loan to the new organization. Saraphin and people in the rural areas listening to the radio would get the “Slim” Stephan, the last surviving member of the Tyonek messages. That was one way we communicated. The Tundra Times council who approved the AFN loan, was on hand to receive the “Thank You.” See History, Page 7

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History: Continued from Page 6

S P E C I A L E D I T I O N • Sthat E L E is C Tthe S T big O R I Echallenge. S F R O M A But Y E Awe R L Ogot N G so S E wound R I E S up in business2that 7

newspaper played a big role in communication. At one time with a grant we bought a subscription for every village. That is a way we communicated once a week about what we were doing. We started our effort for land at 80 million acres and we were told we were unreasonable. The lawyers advised us to back down a little if we wanted to get state support, so as a group we voted and decided to push for 40 million acres. And wasn’t long after that we were advised by lawyers again that we were asking for too much and that we should ask for 20 million acres and that we’d get support from the governor (Hickel). We said no, that we had already backed down from 80 million to 40 million and if we went to 20 we’d soon be bargaining for 10, and so we stayed at 40. We had number of meetings with the governor. I liked Wally Hickel. If you walked in to see him he’d pound the table and say, “I’m not gonna support you” or he’d say, “Okay, boys, what do you want and I’ll help you.” There was no question about where he stood and you knew what you had to do. In Juneau he agreed to support the 40 million acres of land. We all flew back to Washington, D.C., but one night we got a call at our hotel and were told the governor wanted to talk with us. He didn’t come in the room, but some of his people came in, the officials from the Department of Natural Resources, and we got into a hair-raising argument. They said the governor is not going to support us. Finally, about 11 p.m the DNR person left the room and said the governor wants to talk with us. So we went around the corner to his room and sat down and said this is what we are here for. Willie said, “Well, Governor, you promised to support 40 million acres and your guys are telling us you are not going to do it.” Hickel looked around the room and said, “Did I promise that?” And we said, “Yeah.” And he said, “Okay, I’ll support 40 million acres.” NottI: I have mixed emotions. (On ANCSA, overall) We knew economic development was coming but we probably didn’t realize how quickly Alaska was going to grow, but we wanted to participate in the economy. We didn’t want to be bystanders or be left out. All wealth comes from the land. If you don’t have land you don’t have wealth. That was our stand. I’m happy the way some of it happened but I’m disappointed about the way some of the corporations operate. So, nothing is perfect. And, perfection requires fine-tuning and I think there is some fine tuning that needs to be done. HENSLEy: I think every one of us probably had a different vision of what might happen because we came from different walks of life. For instance, Don Wright was into construction and operating equipment. Some of us grew up in sod houses and tents and used dog teams. And that was the way of life and so there are lots of different points of view of where we might be going but my early thought was that we just wanted our space. We want to control our land and our space. I thought we might have the luxury of finding our own way into the new world that was coming. But that wasn’t going to happen, because change was overwhelming in every way imaginable. The corporate, business and capitalist thing was not exactly something we had in mind. In the beginning we were after the land, and I think underneath that, because some of us were too young to have enough wisdom and knowledge, I think we were hoping our people would continue to identity with our culture. To me, that seemed to be the hopes and aspirations of the majority. This capitalist system is very seductive in the sense that it takes all of your energy and effort just to make the bottom line. To me

we forgot what we were, that we don’t have to play that game. However, it is a tool for the betterment of our people, and I have always looked at the ANCSA corporation as a tool for the betterment of our people. ~

The

committee wishes to thank: FiNANCiAL SuppORt:

The CIRI Foundation Alyeska Pipeline Service Company UAA College of Business and Public Policy Chugach Alaska Corporation Eyak Corporation Sealaska Corporation Sitnasuak Native Corporation Bering Straits Native Corporation UAA Diversity Action Council Wells Fargo Bank First National Bank Alaska ExxonMobil Corp. Tyonek Native Corporation Bethel Native Corporation Huna Totem Corporation Koniag Corporation Jack Roderick BP Exploration (Alaska) Inc.

iN-KiND SuppORt: Alaska Humanities Forum Alaska Pacific University BP Exploration Alaska Inc. Cook Inlet Region, Inc. UAA Native Student Services Koahnic Broadcasting Company Alaska Business Monthly Magazine Alaska Journal of Commerce Alaska Newspapers, Inc. First Alaskans Magazine UAA Native Studies Anchorage Public Library UAA Institute of Social and Economic Research Northrim Bank

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At the November panel, Frances Degnan of unalakleet; Christine Yazzie, first woman president of a Native regional corporation (Athna, inc.); Agnes Brown of tyonek, Brenda itta of Barrow and Marlene Johnson, of Juneau

Womens’ roles, behind the scenes, were crucial to ANCSA University of Alaska Anchorage March 18, 2011: Marlene Johnson, Frances Degnan, Brenda Itta-Lee, Agnes Brown Brenda Itta of Barrow is a former state legislator from Barrow, former North Slope Borough assemblywoman and board member of Arctic Slope Regional Corp. She was active in the 1960s ANCSA efforts

Brenda Itta:

On core values and early activity: Those of us who were involved in the ANCSA debate before the settlement of the claims shared a deep belief and a core value that we were and still are the land owners. And whatever we said was based on that core value, a belief that we had lived in the Arctic Slope region, that the boundaries were ancient and were passed on down to us from generation to generation. We were gripped with fear when Prudhoe Bay was discovered and then the trans-Alaska pipeline was to be built through our region as well as three other Native regions in the state. And Prudhoe PAGE 8 | From Tundra to Technology

Bay has always been included in our ancient boundaries. Our fear was the fear of the unknown. We did not know the oil industry, and neither was the state government or the federal government dominant in our area. We were virtually by ourselves, so whatever we said, and the position that we took, and the strategy we used were all based on the deep belief that we are the landowners. The ancient boundaries were set there by our ancestors and we’ve always respected that.

Frances Degnan, of Unalakeet, is a former board member of Bering Straits Native Corp. and the Alaska Federation of Natives, and was active in the early ANCSA efforts.

Frances Degnan:

On early history: I come from Unalakleet in the Norton Sound area. Unalakleet, according to my grandmother, was Yup’ik until trade started when the RusSee Women, Page 9

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S P E C I A L E D I T I O N • SIEbecame L E C T S T Oinvolved. R I E S F R OASCAP M A Y E Acame R L O N Gto Sour E R I area E S and helped us2cre9

sian came in. Later whalers also began going through to the Arctic Slope. That led to commerce and trade with the Indians, Eskimos in Siberia, and Port Clarence, Kotzebue and St. Michael. New technologies also came in and Eskimos from our area were always interested in adapting. One thing about our Native people is that we use the best of whatever is available to us. During the time of my grandmother, we lived underground in subterranean homes during the winter, and we came up out of the ground in the summer time. She said we lived in harmony with the earth, the animals and with the people. Anyone passing through, no matter which direction they were coming from was welcomed, and we took care of them. Trade and commerce were normal like today and even though it was a different technology. When I was growing up the village (Unalakleet) had 250 people. We have 750 people today. We didn’t have high schools then so we just went up to the eighth grade. My parents and their colleagues only studied up to the third grade because they were needed at home to bring in the subsistence food, and that was the only operating economy we had. We also took care of gold miners going to Nome and helped them on their way, and also anyone who came through. But we continued our subsistence way of life. There was one phone in the village (when I was young) for long distance and the rest were crank (operated). We communicated through word of mouth. And we had mail service by dog team. And in the summer time (we had) ships, and schooners going back and forth. We got jets only when the military moved in to put in the DEW line and we had the jet service as long as the DEW line was in. When that folded up in 1972 the jet service also went away. So we are back to small planes again that can fly depending on the weather.

Marlene Johnson, of Hoonah, was active in the early ANCSA efforts, chaired Sealaska’s board for 10 years and was also a member of the University of Alaska Board of Regents.

Marlene Johnson:

On early communications: We didn’t have telephones and we got our first telephone service when the White Alice sites were built around the state. We had one commercial telephone at the store and everybody could turn on their radio and listen to what was being said back and forth. And they did. It was the really old-fashioned, one-way CB radio. I worked at the store and was one of the bookkeepers and I operated our schedule with ACS, which was the Alaska communications part of the Army, for messages. I was KWF92 Hoonah, those were my call letters, and I would talk with them and everyone in town listened. That is how we communicated. DEGNAN: It was difficult (communicating when the land claims movement started). We had to rely on the regional associations. Those came in when Lyndon Johnson had his war on poverty; and ASCAP (the Alaska Community Action Program under the war on poverty) came into our region. Marlene (Johnson) was very involved with ASCAP (now RuralCAP), and that is how

ate the nonprofit Inupiaq Development Corp., the predecessor of the Bering Straits Native Association and currently Kawerak today. We had no funds but we were impassioned about lifting up and bringing everybody forward together. In our culture we don’t leave anybody behind. JoHNSoN oN EARLy LIFE: When I first moved back to Hoonah, which is my hometown and where I was born and raised, I had just become a single mother and I had to work. And it was really tough getting proper childcare. We had a crab cannery in the village but the women who worked there did not have proper childcare. At the school some of the teachers were not certified and so I became active in the educational system. We wanted certified teachers because we wanted our children to have the same education that any child is entitled to across the nation. And so I got involved with the state to get childcare into the village and to ensure that children did not get seriously hurt. At that time we had a lot of children getting seriously hurt because there was no proper childcare and parents had to work and couldn’t watch over them. We were a very large fishing village, the largest fishing village in Southeast and the men were all out of town all summer and the women took care of the village. My mother was a leader of the village, as was my uncle Harry Douglas and so I just followed behind them, plus our society in Southeast is clan based and we have clan leaders. My clan leaders would come and we’d have meetings and they would say, “This what we need to do and Marlene you do it.” And so I did it. IttA oN tHE RoLE oF WomEN: The women were always involved in (land claims) meetings, sponsored by either the elders — the church elders or our tribal entities, our traditional way of government. The issue of land had been around for quite a while. It started in Barrow with the federal government and the state and was very pronounced when Prudhoe Bay was discovered and then when the pipeline (was to be built). The women always attended the meetings right there with the men. And, if the women didn’t speak out they spoke to their husbands at home and formed their own position. In some families the woman was the predominant speaker for that family and we can rest assured that when a woman spoke she had conferred with her husband and family first. And it was the same thing with the men; they often talked about the issues as a family before coming to meetings. I’d seen my mother and my father do that a number of times before any public meeting on important issues like land and subsistence. I often overheard some of my aunts and women talk about the concern for the land. And you know we used furs from the caribou, seals for our clothing as well as our food so the women were just as concerned, especially as mothers who thought when Prudhoe Bay was discovered about how do we feed our children and how are we still going to catch our caribou? So the women were very much involved in our meetings. Many of us throughout the state were raised in the traditional way and were taught to live in harmony with the land, the oceans, the rivers. It was very natural for us to speak up very easily because we were speaking up for our rights. I really admire the intelligence of our leaders and our forefaSee Women, Page 10

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thers. They were so intelligent, they learned the English language, and they learned how to read. Our leaders were very studious. They studied the law and what our rights were — our civil rights. JoHNSoN oN HoW LAND WAS tHE DRIvING PRINCIPLE: To all the regional groups the land was the big thing. We had to have land — we are a land-based people. I know young people today don’t understand a lot of it. They just want dividends. When we were back lobbying, I was the only woman on the Tlingit and Haida executive committee and had been for a number of years, so I was the only woman lobbying with all these men. They were great guys and good friends, really good to me: Roger Lang, Richard Kito, Gilbert Gunderson, Charlie Nelson. These guys were really dedicated to our getting a just settlement and not only for Tlingit and Haida but for the state of Alaska. Don Wright was also there, he played an important role for all of us, and he brought the leadership together. John (Borbridge) was a schoolteacher and he was absolutely meticulous with his speech and what he said and how he said it. We relied upon him. IttA oN DIFFERENCES bEtWEEN tHE REGIoNS: (Land vs. cash) was difficult to negotiate because it was our view that we owned all the land and we needed all the land to survive. I recall when we were in Washington, D.C., there was a huge discussion among the regions, very volatile, and some of us ended up being the peacemakers among the regions to help bring about a resolution of that debate. One of the best benefits of the AFN was that it brought us all together. We were able to sit at the table, in the same room, and get to know each other and negotiate. That really strengthened our desire to be absolutely united in the land claims effort especially in light of what was at stake — all the land that we used traditionally was being restricted. I had really learned a lot from our elders. I once did a little research on leadership by asking a couple of elders — men in our community — about what our people look for in electing a person or appointing a person into leadership. A really wise elder told me that if you get to serve your people it will be based on your qualities and your character and you have to be proven. And one of the values was ilumutuugnik, which means the absolute truth as you know it in your heart; and so ilumutuugnik is a person who values truth and who stood on the truth before making decisions. That really helped me. Another thing that really helped me during the land claims effort was his telling me about iglutuugnik. This means the ability to withstand a lot of hostile opposition and, in the midst of extreme hostility and resistance, to stand firm on the position of your people so long as it was the right decision and was based on the truth. So long as you know it’s the right thing to do and you’ll succeed. It was that determination that helped me with the little involvement that I had during the land claims. JoHNSoN oN bEING A WomAN LEADER: When I was nominated to become Sealaska’s chairman the first time we had one of our board members who was an elder who talked to the board and said, “We cannot have a woman be the chairman, Sealaska is just too important to our community, to our shareholders.” And, PAGE 10 | From Tundra to Technology

November panel, Loussac Library in Anchorage.

that really was the feeling at that time. I challenged him and I was elected. I stayed the chairman for over 10 years until I decided to step down myself to bring young people in. But it was tough to be a woman and be a leader. DEGNAN oN FINANCIAL SACRIFICES: I worked to save my money so I could pay for my father’s and my travels when AFN couldn’t do it. And we lived a subsistence way of life so our food was out there and we could catch it. The cash went strictly for our travels, cab fare, hotels, and I made always sure that I had a budget, also things didn’t cost as much then as they do today. My father always said, “We are rich but we are just cash poor.” JoHNSoN: We had a lot of bake sales; potlucks where we’d sell our meals. We had a lot of support from outside the Native community also. Barry Jackson, of Fairbanks, was one. DEGNAN: I have some people I want to acknowledge. In order for us to lobby we had to have money other than what the families and communities contributed. The AFN board initially got funded for lobbying from the village of Tyonek and I want to thank them. The Yakima Indian Nation (gave) a quarter of a million dollars. The Tlingit and Haida Central Council graciously loaned us the money for lobbying and for attorneys and the consultants. IttA: I recall that we traveled to different places in the United States. Whenever the American Congress of American Indians congregated we solicited their support of AFN’s position on the land claims. And we got their support. On a lighter note, Frances mentioned the loan that we got from the Yakima Indian Nation, I remember Joe Upicksoun and I attended that meeting. We took part in their ceremonies and danced and listened to them play their drums. I came back earlier (to Alaska) than Joe Upicksoun. When he came back I met him in Anchorage and he presented me with this beautiful Yakima-made belt with the most beautiful bead work and leather, I think it was elk. “This is a gift from Chief Robert Jim and we just got a loan from the Yakima Indian Nation and the chief told us he needed a collateral for the loan he was giving to AFN,” Joe See Women, Page 11

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S P E C I A L E D I T I O N • Sways E L E Cthought T S T O R I Ethat S F the R O M“justice A Y E A Rfor L O Nall” G S applied E R I E S to all of us!

said. He said he told him “We don’t have any cash, we don’t have any title to the land, and so we don’t have anything to give you.” I don’t know who talked to the chief, but apparently everyone understood that the chief of the Yakima Indian Nation at that time could have more than one wife. And the best the men could do was to come up with three young Alaska Native women to use as collateral for AFN. And I believe Frances Degnan was named, I was named and so was Laura Bergt. We were apparently used as a collateral. That made me very determined to see the land claims settled! It was all a joke, of course. IttA oN PERSEvERING: We never gave up. I happened to be with Etok (Charlie Edwardsen) who was very involved and he and I had been assigned to cover certain members of the House of Representatives in Washington D.C. They were not very open to our position and it seemed like they slammed the door on us at times. They were very closed to our way of life. And remember that this was in the ‘60s, at the same time that African-Americans were beginning their civil rights movement and then there was some unrest among the Native Americans about their rights. So, there we

Frances Degnan

were in the late ‘60s promoting our land claims settlement. There was some discrimination and very little regard for our way of life, our language, our land and where we came from. But we did not give up. I remember walking from the U.S. House of Representative over to the Senate. Etok and I were walking and we stopped in front of the Library of Congress, near the Supreme Court Building, and we looked up the stairs and up there was an inscription that I’ll never forget. It said, “We are one nation under God, endowed by our Creator with the unalienable rights to life, liberty and the pursuit of happiness.” Because we were Americans we had those same rights endowed to us. The other thing that I recall is remembering what we all learned in school, and that is the Pledge of Allegiance to the flag. I must have truly believed the words that say we are “one nation under God, indivisible with liberty and justice for all.” And I al-

It became very clear to me that we had these basic rights. And during that moment of discouragement, where were we? It seemed that all of America was enjoying that Bill of Rights. But where were we as the Alaska Native people? There were some moments like those that made us very determined to push for the land claims settlement regardless of some opposition. I think unity and respect allowed us to accomplish that.

Agnes Brown :

On what Tyonek was like: I was born and raised in Tyonek. Tyonek was fortunate in that it had some good thinkers and I want you to know that Tyonek was matriarchal society. My mother was Athabascan and her mother was our matriarch. Tyonek was thoroughly subsistence. We lived from the fish and the berries and the trees and the birds and so on. It was beautiful, just beautiful. We were “keepers.” What we took we put back and left it in better shape for future generations. And that was a common theme during my school days and after Tyonek received some settlement monies (from oil litigation). Tyonek sent out some visitors to other neighborhoods and villages to find out how we could best help. There were many needs. But the common theme was ownership of the land. And I’m proud to say that Tyonek did that. Tyonek hosted the first statewide meeting (of the Alaska Federation of Natives), built a couple of buildings, and they loaned office space at no charge for all of those meetings and helped in any way necessary to pursue what was really a swift land claim settlement. And we are today very proud of all of that. And proud of all of the people who set aside their personal lives to pursue this very lofty goal. Brown on the ease of her people working together: Our villages had a flow with the seasons and shared, there was a lot of sharing: sharing of food resources and sharing when there were outside threats they would come together and work well together. If there was a potential problem, it was not unheard of mass groups to travel by foot in winter to a multi-day potlatch to discuss the issues. And it worked. And it happened. People worked well together during the good times and often times during the bad times. But it was an incredible feeling that people trusted and shared and I can’t remember any selfish times. And as our outreach expanded to other parts of Alaska it was all the same. The giving was the same. It was just phenomenal. Brown on the resiliency of the Native people: People were very, very resilient and keep in mind some of us were a little bit younger and more enthusiastic. But those women, and some of them had children at home, no resources necessarily but they did what had to be done. Alice Brown’s daughter worked late nights all by herself, back when we didn’t have the technology that we have now, and getting everything ready so that literally papers were going in hands as people were getting in airplanes. We took up collections for plane fares. I was a young mother during those early days, and I would go pick people up from the airport even though I had never met them before, got them to where they had to go and sometimes even took them to my house for lunch. That’s the way we did it. I don’t think that there was necessarily a sense that “oh this is too much work and I’m going to give up.” I think there were some small differences about what we might want as an outcome for our particular area but we got over those hurdles and did what we had to. ~ From Tundra to Technology | PAGE 11

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ANCSA and the pipeline: Each made the other possible UAA, Anchorage April 8, 2011: Senator Mike Gravel, Mayor Edward Itta, Jack Roderick, former Mayor of Anchorage, Tim Bradner

North Slope Borough Mayor Edward Itta described the importance of his learning about land claims as a young man: I had just gotten out of the Navy in ’69 or ’70, during the Vietnam conflict. As a young man I missed out on quite a bit of the initial (land claim) efforts. I knew a little because I had an uncle who was a prolific letter writer, and he kept me informed on what was going on and in his mind. In one of his letters he wrote, “They are giving our land away,” and he was very concerned that this was not right. (I was) off in a ship halfway around the world (when) that was going on and I still regret it to this day that I was not an active part of it. I tried to get caught up as best I could on what had been happening and what ANCSA was all about. My uncle influenced me in a lot of ways – he told me that the “Inupiats life as you know it is about to change significantly,” (because of the oil discoveries) and he said, “My way of life is not going to be there anymore.” He begged me, “Don’t sign off on this,” (oil) because he lived off the land and said, “It’s not their land, it’s our land.” He was blessed being a prolific reader and understood a lot of things. I use that point to illustrate two points. It was not harmonious, the issues of Prudhoe Bay right next door, and what was likely to happen. That was where I got introduced to ANCSA.

Itta spoke of the opposition of Arctic Slope to the settlement: I looked at a letter that was signed by then-president of Arctic Slope Native Association dated December, 18, 1971, (the day the ANCSA bill was signed) to the president of the United States of America, the honorable Richard M. Nixon. And the first line is a call for, in the strongest possible terms, a veto of the Land Claims Settlement Act passed by Congress on December 14, 1971. We hear the number of 40 million acres. Our land claim was for 56.5 million acres just on the North Slope. And at that time I was working in Prudhoe Bay and the leases had been sold — 400,000 acres to the oil industry for $900 million, and without anybody asking us or telling us. In the sense of use and occupancy, our leaders had a very strong belief and conviction that this is ours — the U.S. Constitution says so. We were very fortunate to have the people that we had as our leaders back then. There were differences within our own people but they had the good sense to come to agreement. To this day our region continues to feel that we were shortchanged by a big, big, amount. And while we don’t dwell on it, we still say that something that was inherently PAGE 12 | From Tundra to Technology

ours was given away. I looked at this letter almost 40 years ago now, at the statement back then by the leaders of Arctic Slope Native Association, which was created to deal with the impending land claims. It said back then that the “Inupiat Eskimos of Arctic Slope hold Aboriginal title to perhaps the most valuable land on the North American continent.” That was 40 years ago. I’m so impressed. I cannot fathom how some of our leaders — many didn’t reach high school — were able to deal with the complexities, because nobody knew about corporations or the levels of government. No question that we on the Arctic Slope were responsible for the delay in agreeing to the land claims. We told AFN (the Alaska Federation of Natives), “No, everybody is not getting their fair share.” A section said that you will be paid in value for your land and we never were. Fundamentally our leaders never wavered from

Edward itta

their belief as first users and occupants of the land, which all basis of law is based on, (that it) was a fundamental right that we would not waiver from. To this day the issue is still there. There is the connection to the Native community of land, the spiritual aspects of what we have. The value of land and this thing that we’re going to get money for it, was totally alien. There is a connection of all Natives, not just Inupiats, to the land and, in the case for those of us in the coastal communities, to the sea. But you look at me as a Native, as an Inupiat, you’re looking at land and ocean. You cannot separate the three; we are the land, we are the sea. That is a concept that is always a challenge for me to get across. While many people have feelings about what ANCSA offered and took away, in the end we probably got as good a deal we could have given the circumstances. There is no question that the transAlaska pipeline wouldn’t have happened without the settlement of the land claims. There is another challenge ahead of us and that is the ocean See Pipeline, Page 13

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and the offshore issues. I’ve said that if we can do ANCSA for land, there is a similar claim using the same “use and occupancy” to do for an oceans claims. Legally understood, it is the premise that the users and the occupants have to be dealt with, to have a seat at the table. I hear in Washington that the Treaty of the Law of the Sea is being discussed and is going to be settled. There may be not be legal basis, but there must be some moral responsibility to address, at the very least, the concerns of our coastal people.

Historian Jack Roderick on the lack of knowledge of land claims and opposition from Alaska’s non-Native community, and what changed it: My recollection was that there was not much discussion in Anchorage about Native claims or rights. The business community wanted it to go away — it was an annoyance, they didn’t understand it. However, in late September 1970, Ed Patton, the president of Alyeska Pipeline, came to the Anchorage Chamber of Commerce and said the Native land issue has to be settled by Congress or we’re not going to get a pipeline right-of-way. I was there. The business community said, “Oh my god, if Patton says it’s true.” And everyone got on board, “Settle this thing, whatever it is, and we get the right-of-way.”

Former Alaska Sen. Mike Gravel on early days of the claims movement, after he had been elected to the U.S. Senate in 1968: The visibility of the claims issue was really not around. When I was campaigning in rural areas, this was not a subject that was brought up. It was not a subject we discussed, which communicates the fact that even within the Native community it was not that big an issue (in the beginning.) If you look to the urban areas, it wasn’t even known. Still, here was a group of people, a political power, a constituency that was just coming alive. The key on the Native side was the formation of the AFN (Alaska Federation of Natives), which provided a central clearing house where the disparate groups could come together and argue, discuss, and coalescence. Without that you wouldn’t have seen anything happen. That began to set the stage. With the political awareness I became very sensitive to the land claims right after I got elected. For both (former Alaska Sen. Ted Stevens) and I, this was it. This was going to be the biggest issue we had in front of us from the get-go. And that was as a result the Native leadership. You can just tick off the names (of Native leaders); they were coming to Washington. They were having difficulty raising money, too. Probably the most single significant event was the coalition of the Native community itself into a political force, into a cultural force to demand change. If you ever hear an Inupiat talk, they are very blunt, very straightforward: “Stop stealing my land!” they

Jack Roderick

would say. (The settlement) started out with 100,000 acres, 1 million acres, 2 million acres. I was in Ketchikan and I was asked about it and said, “They want 40 million acres, and to me that sounds like justice.” By that time I was way out, and when the urban community became aware of it, I thought I was in difficulty. But a short time later Walter Hickel came out for 40 million acres. So once that got locked in, a Democrat saying 40 million acres and a Republican saying 40 million acres, that was the number. Once the number was agreed upon in the political community, 40 (million acres) became acceptable. But keep in mind that is not acceptable to others. The urban areas became aware of the land claims when they were hurting and they were angry because what was holding up the development of Alaska was the land freeze by (Interior Secretary) Stewart Udall, which was a very extremely strategic event (in forcing action on the settlement).

Sen. Gravel on his role in the U.S. Senate’s historic vote to approve the Trans-Alaska Pipeline System, which was crucial to the settlement of Alaska Native claims: We were delayed in the courts (by environmental lawsuits.) That delay occasioned a $3 million study of how to do it (build the pipeline) and the delay was good, very good. They (industry) learned how to do it properly. During the delay in court the oil companies were obviously going to the chairman of the Interior committee, which was “Scoop” Jackson (Sen. Henry Jackson). Most people weren’t aware that Scoop Jackson was running for president. What he did was tell the oil companies not to worry about a thing. “We’re going to take care of this pipeline issue in a conference committee.” To me it was the stupidest thing that the oil company executives believed that. What Scoop had on his mind was See Pipeline, Page 14

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S T O R I E S F R O M A Y E ASo R L Othey N G Swalk E R I E out S down the hill but then Patton came back. I

that he had the environmental community, which he needed to get elected as president, and on the other side he had the oil companies, which weren’t in good shape (politically) at that time. But in their arrogance they thought, “Oh, he’s gonna go for the fix!” Jackson was promising that. The (oil companies) think that with their lobbyists they know what they’re doing. I’m thinking of this saying, “Hey, we’re going to get screwed, because he’s (Jackson) just putting up an amendment up for the right-of-way, and we want the authority of the court system to be put aside under NEPA. Congress is the ultimate authority in our society, and we make the decision that we think it’s time to build the Alaskan pipeline.” Now, what happens? In February of that year, ’73, I was about to take a foreign trip, so my staff and I worked up an amendment (to exempt the pipeline from NEPA). I called Ted (Stevens) and said, “To hell with the committee, let’s put this judiciary aside. I’m leaving town and would you look at it from a legal point of view and then dump it in the hopper?” I go on my trip, come back and it’s in the hopper. All of the sudden Jackson accosts me and said, “What the hell are you doing? Get rid of your amendment.” I said, “What are you talking about? I’m a senator and have just one vote like you, and that amendment is staying in.” But Stevens and Jackson, Republican and Democrat — this is very interesting — they were very, very close. Jackson went to Stevens and said, “Get your name off of that amendment,” and Stevens took his name off. All you have to do is read the newspapers from February to July 17 (1973) and you will see what happened. I spent most of my time running back and forth to Alaska to cover myself. (Governor William) Egan was opposed to it; the labor unions were opposed to it and I was being destroyed. Everybody said Scoop Jackson, who brought us statehood, is going to “take care” of us. Of course it was rumored that this was Gravel’s amendment. I never made a public speech on the floor of the Senate during that whole battle. I did everything behind the scenes. What happened is there was an aide of Jackson’s, when (he was) on the atomic energy joint committee, who came to me six months before the oil problems with the Arabs (the embargo) and briefed me on our dependency if the Arabs were to act (to cut off our oil). He had an econometric model. I looked at it and said this is why we have got to get going in Alaska. I made a deal with him. I said, “Don’t tell Jackson you briefed me on this but do me a personal favor. If you believe what we both want to accomplish, go brief, one-on-one, every senator. As soon as you brief a senator, give me a call and tell me who you just briefed. I’ll go to that senator one-on-one.” The briefings scared the bejesus out of them. I knew what they just heard from the briefing. I said, “Look we have a lot of problems. We need the Alaska pipeline. If you will vote for the Alaska pipeline I will give you a vote as long as I’m in the Senate and as long as it doesn’t affect my morals, you can get any vote you want in the future.” This is log rolling at its best! Then Ed Patton then comes into my office with a lobbyist and said you need to pull back your amendment, that Jackson is going to take care of us. I said, “Jackson is going to take care of us? You’re too dumb to see what’s going on.” Patton said, “We’re important in Alaska.” I said, “Fine, I got elected by my Alaska constituency and I’m going to exercise my independence of what I think is best for Alaska.” PAGE 14 | From Tundra to Technology

said to him, “Look, if I can show you 25 senators who will vote for the Alaska pipeline will you join forces and help us?” In March I have a list in my hand. I called in Alyeska’s lobbyists and said, “Look at this list, they are going to vote for the pipeline. Go check them personally.” And they did. The companies had the muscle and went to President Nixon, and said, “We think we could pull this off, would you try this?” He took the concept of the amendment, and Rogers Morton made a speech in Baltimore, ran it up the flagpole, and nobody caused a problem. So, Richard Nixon weighed in, used his power in the White House full bore, went right in and got the rest of the votes. Ted came back on the amendment with me and he was the one who made the speech on the Senate floor. I never made a speech on the floor of the Senate. (Note: This was a difficult fight with Scoop Jackson, who had authored the National Environmental Policy Act of 1969 and now opposed this amendment, in 1973, to exempt the Alaska pipeline from NEPA, its first big test.) We had the votes to beat Jackson and it was never in his mind that he would lose to a freshman. But I lost people like Bob Dole, who had pledged to me that he would vote for the pipeline, and I did not get Alan Cranston. He was a friend and he told me he couldn’t vote with me, but said he would just leave the chamber.

Sen. Mike Gravel

He took 20 minutes out and never came back in (to the senate chamber). The vote was tied and, then not tied. We maneuvered, and had another vote. Ted Kennedy went out in the hall, grabbed Cranston by the scruff of the neck and brought him in (to vote) but the vote was still tied. (Vice President) Spiro Agnew was in the chair and voted for it. We won by that one vote. Today I believe that with ANILCA coming and the environmentalists becoming stronger in the nation, that we would have never gotten the Alaska pipeline had it not passed then. And had we not done that then Alaska would be a very different community than it is today, and the Alaska Natives would not have been able to prosper. Note: The pipeline was needed because federal oil revenues from the North Slope funded $500 million of the $962 million ~

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TIMELINE TO THE

Alaska Native Claims Settlement Act 1728 1778 1784 1799 1802 1843 1867

Vitus Bering, of Russia, sites St. Lawrence Island. Capt. James Cook of England explores Arctic Ocean. First white settlement in Alaska on Kodiak Island. Czar Paul claims Alaska as Russian possession. Aleksandr Baranov named first Russian governor of Alaska. Baranov moves his headquarters to Sitka. First mission school for Eskimos was established in Nushagak by Russian-Greek Orthodox Church. Russians sell Alaska to United States for $7.2 million.

1961 1962 1966 1968 1968 1969 1969 1970 1971

Walter Hickel

1880 1884 1898 1900 1906 1906 1912 1912 1924 1924 1936 1945 1945 1948 1956 1959

protesters

Gold is discovered near Juneau. The Organic Act makes Alaska a district with appointed governor and other officers; protection for lands used and occupied by Natives promised. Gold rush escalates, with findings in Klondike and Nome. Gold seekers swarm to the territory. Congress authorizes transfer of government seat to Juneau. Native Allotment Act is passed, allowing the secretary of the Department of the Interior to allot up to 150 acres of non-mineral land to Alaska Natives who applied. Congress authorizes Alaska to send a non-voting delegate to Congress. First is Frank Waskey. Alaska Native Brotherhood founded the first modern Alaska Native organization. Alaska becomes a territory with its own legislature. Indian Citizenship Act grants citizenship to Native Americans, including Alaska Natives, without terminating tribal rights and property. First Native, William L. Paul, elected to territorial legislature. Indian Reorganization Act is expanded to include Alaska Native governments. An Act establishing Feb. 16 as “Elizabeth Peratrovich Day” Alaska passes an antidiscrimination law, the first such law in America, providing for equal treatment of Natives and whites in businesses and public places. The Venetie and Arctic Village Reservation is formed, the largest in Alaska. Voters approve the Alaska Constitution. President Eisenhower signs Alaska Statehood Bill into law. Includes provision to not take lands of Native peoples.

1972 1973 1976

Alaska Natives organize to protest “Project Chariot” - a plan to use nuclear weapons to blast an artificial harbor into existence in Northwest Alaska. The Tundra Times is established, the first statewide newspaper devoted to representing the views and issues of Alaska Natives. Alaska Federation of Natives formed in Anchorage. Arco Alaska Inc. and Humble Oil (now ExxonMobil) strike oil on the North Slope. The corporations, plus BP, form the Trans-Alaska Pipeline System. Final judgment on Tlingit/Haida case established Native claims basis. $7.5 million awarded. Formal land freeze in Alaska/Native rights need to be defined. State of Alaska vs. Udall holds; Secretary of Interior needs to define Native possessory rights first, pre-state selection. North Slope oil lease auction, bids total $900 million. Congress passes the Alaska Native Claims Settlement Act, granting Natives 44 million acres of land and $962.5 million. The Marine Mammal Protection Act becomes law with the provision that Alaska Native would be able to continue traditional use of marine mammals. President Richard Nixon signs into law a bill authorizing the construction of the trans-Alaska oil pipeline. It ultimately cost $8 billion. The so-called “Molly Hootch” (Tobeluk vs. Lind) case is settled with the commitment by the state to provide local schools for Alaska Native communities as it had in

uAA students

1977 1980

1982 1982

ASRC building

predominately white communities in the state. First oil flows through the trans-Alaska oil pipeline. The Alaska National Interest Lands Conservation Act becomes law creating more than 80 millions acres of additional parks, preserves and monuments in Alaska. It also contains language supporting continued traditional and customary use on designated federal lands. Alaska voters uphold subsistence laws $962.5 million in ANCSA moneys paid to corporations. Sources: www.alaskool.org, Alaska Stylebook From Tundra to Technology | PAGE 15

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PAGE 16 | From Tundra to Technology

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Photo Courtesy of Cook Inlet Region Inc.

The Regal Cinemas Stadiums at the Tikahtnu Commons.

CIRI defies recession,

Maintains Profits By Tim Bradner

If ever there were a bad hand of cards dealt, it was that given to Cook Inlet Region Inc. when Congress passed the Alaska Native Claims Settlement Act in 1971. No bad intent, necessarily. Just bad geography. CIRI got the short end of the stick. In the settlement with Congress, other Alaska Native regional corporations received millions of acres of federal lands. Not so with CIRI. All the good lands in Southcentral Alaska had long been taken by homesteaders, the state of Alaska and municipal governments, the Kenai moose range (now Kenai National Wildlife Refuge), and of course those big military installations, Elmendorf Air Force Base and Fort Richardson. In the end, though, it all turned out well for CIRI, mainly due to the acumen of its leaders. It was a bumpy road, however. The Southcentral Alaska lands available for CIRI in the settlement were mountainous and remote, and included ice-fields. To resolve this, an agreement was negotiated for a complex land exchange involving the fedSee CIRI, Page 38

CIRI President/CEO Margaret L. Brown

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CIRI: Continued from Page 37 eral and state governments. CIRI wound up with mineral rights on lands adjacent to producing oil and gas properties, a plan worked on by Margaret Brown, who is currently CIRI’s president and CEO. Brown worked in the corporation’s land department in the 1970s. Early cash income from oil and gas royalties was crucial in helping CIRI get off the ground, and it was important to other Alaska Native corporations as well because resources revenues are shared among the corporations under terms of the claim settlement act. Oil and gas income and earnings from properties acquired in the Lower 48 through the agreement set the stage for CIRI’s growth into one of the most financially successful of the regional corporations. By the mid-1980s, CIRI had turned its attention to business investments outside of Alaska, acquiring interests in television and radio groups, becoming the largest minority broadcaster in the United States. In the 1990s, CIRI entered what was then an emerging business: wireless telephony. “We acquired spectrum licenses through auctions held by the Federal Communications Commission to encourage minority participation in this new technology in a joint venture with VoiceStream and then T-Mobile USA,” Brown said. The CIRI/T-Mobile joint venture still owns 36 FCC licenses in 35 cities across the U.S.

Photo coutesty of CIRI

Margie Brown in the late 1970s.

with its lack of progress in securing a power sales agreement with Southcentral Alaska electric utilities for the proposed Fire Island wind project. That is planned on Fire Island in Cook Inlet, three miles offshore the Ted Stevens Anchorage International Airport. Preliminary construction began last year and CIRI is geared up to start major construction of roads and buildings this summer. By late 2012, Fire Island could be putting up to 35 megawatts, and ultimately more, into the regional power grid.

CIRI already has about $9 million invested in Fire Island, but a power sales agreement is necessary before the corporation can commit to the full $160 million construction of the project. The negotiations have gone slowly, however, because of the utilities’ concerns over technical problems of integrating a variable wind power into the regional grid. Brown hopes the agreements can come in time for major construction to be done this summer. It would put about 200 people to work. See CIRI , Page 39

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CIRI: Continued from Page 38 “There is no better time to build the Fire Island Wind than now,” Brown said. “The major Railbelt utilities have urged the construction of a major Fire Island wind project in the past when they were the project proponents. What we have now is a much tighter gas supply situation and the best pricing we will likely ever see on the wind turbine and construction costs – to the benefit of the ratepayers.”

cruise ships and the recession but things actually turned out to be very positive,” she said. “We give a lot of credit to the CATC management for this, particularly Paul Landis, CATC’s chief operating officer, who initiated an aggressive marketing campaign aimed at group and independent travelers. CATC also instituted a yield management program that has been successful.”

CIRI Outside Outside of Alaska, CIRI is taking advantage of opportunities in real estate in areas where prices are still depressed, It has partnered with national CIRI subsidiaries firm Dean Weidner to acquire Class-A residential multifamily housing. CIRI’s other main businesses — in tourism, real estate and retail — The Weidner/CIRI partnership recently acquired five multifamily are performing well. Financial results for 2010 weren’t yet available but housing complexes in Phoenix and Tucson, Ariz., and is looking for opCIRI had a strong 2009, a turnaround from a poor 2008. The corporation portunities in other areas. earned a $24.5 million profit in 2009, a reversal from $22.8 million in The properties were acquired for less than the cost of new conlosses in 2008 due mainly to the plunge in financial market. struction, plus they are occupied, which gives CIRI an immediate inThe downturn caused CIRI to redevelop come stream, she said. its strategy and take advantage of distressed Some Outside property initiatives made markets, which are now paying off. CIRI also before the recession are being affected, alPresident/CEO: Margaret L. Brown made strategic decisions to invest in clean techthough CIRI believes they will meet expectaHeadquarters: nologies in terms of acquisitions and Alaska tion as the national economy recovers. 2525 C. Street, Suite 500, projects like Fire Island and an innovative new CIRI owns a 32.4 percent interest in 492Anchorage, 99501; (907) 274-8638 energy project, underground coal gasification. room Hyatt Regency Lost Pines Resort and Website: www.ciri.com Shareholders: 7,300 However, CIRI has a strong foundation Spa near Austin, Texas. The project is with in traditional Alaska industries, like oil and three other partners, including Hyatt Develgas. CIRI owns 1.3 million acres of mainly opment Corp. It opened in 2006. subsurface mineral rights in Southcentral Alaska, mostly lands with oil Another partnership is in the 126-room Hyatt Place North Stone Oak and gas and minerals potential. An exploration well is being drilled look- at Sonterra, which opened in 2010 in San Antonio. ing for natural gas on CIRI-owned subsurface lands on the Kenai Peninsula this winter. Clean tech The corporation has a big stake in oil support work and construction, Another Outside acquisition, North Wind Inc., an environmental sertoo. In a 50-50 partnership with Nabors Industries, CIRI owns two long- vices company, has turned out well, Brown said. As part of CIRI’s straestablished and well-known construction and oil-support contractors, tegic plan to invest in clean and environmental-related technologies, the Alaska International Constructors and Peak Oilfield Services. corporation acquired North Wind at the end of 2009. The company’s per-

Cook Inlet Region Inc.

CIRI-MAX CIRI’s most substantial Anchorage-area investment is Tikahtnu Commons, a 950,000-square-foot, $100 million retail shopping mall. CIRI partnered with Browman Development Co. of Oakland, Calif. Retail malls nationwide have suffered because of the economic recession, but Alaskans were spared that. They are still shopping, going to the theater, eating in restaurants and that has been good for Tikahtnu Commons. Regal Theater’s new IMAX screen — the only one in Alaska — opened in mid-2010, has been a big draw, strengthening business for the mall’s restaurants and shops. CIRI is developing some of its other land holdings in Anchorage. A new 40,000-square-foot office building in south Anchorage has been built and leased, and 22 acres of CIRI-owned adjacent acreage are being prepared for mixed-use office and retail. CIRI also owns 7.8 acres in midtown Anchorage, where the old Fireweed Theater stood. CIRI is now working on a development plan, Brown said. CIRI also owns Pacific Tower Properties Inc., a subsidiary that provides management services on about 50 properties statewide including CIRI’s corporate offices on C Street in Anchorage. CIRI’s tourism division, CIRI Alaska Tourism Corp., or CATC, has done surprisingly well given the dire predictions for that industry, Brown said. “We were expecting a dismal year in 2010 because of the cutbacks in

formance in 2010, its first year under CIRI ownership, was strong. North Wind specializes in hazardous waste cleanup at private and government sites and had projects under way at about 400 locations in 2010. CIRI ownership enabled North Wind to qualify for 8(a) minority contractor status, but Brown said the vast majority of its work is competitively bid and a lot of it is for large U.S.-based corporations. The company employs about 400. Two other 2009 investments, following the clean technology strategy, was $10 million invested in Codexis, a California-based biotech company, and $5 million invested in Westly Capital Partners Fund L.P. for clean technology investment. Through Westly Capital Partners CIRI has invested in, among others, Tesla Motors, a high-performance electric car manufacturer. CIRI’s most innovative, project, however, is its underground coal gasification project on CIRI-owned coal lands about 60 miles west of Anchorage. The concept involves a process of combustion of coal in the underground coal seams to produce a synthesis gas, which can then be used for power generation or manufacturing. The process is attractive because it allows coal to be commercialized without having a coal mine. Also, the impurities and toxic metals in coal are left underground. CIRI has test drilling under way to select a site for the first UCG project. If the project proceeds as planned, it could be the first underground coal gasification project operated commercially in the U.S. ✦

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Chugach Alaska overcomes betrayals, bankruptcy to

reach success By Tim Bradner

If challenges could also be seen as opportunities, as the old saying goes, Chugach Alaska Corp. would have had difficulties seeing anything rosy about its future amid the problems it confronted after Congress approved the Alaska Native claims settlement in 1971. More about those problems later. The important thing now is that Chugach has developed a thriving enterprise with a bright future. In 2009 Chugach crossed the billion-dollar threshold in terms of gross revenues. Chugach’s after-tax net earnings were $33.5 million that year. Chugach Alaska Corp. is the Alaska Native regional corporation for the Prince William Sound and lower Cook Inlet areas. While all the Alaska Native corporations, Chugach among them, made mistakes in their early, formative years, what’s happening now is that a generation of educated Alaska Natives is taking the reins at the corporations, said Sheri Buretta, Chugach’s board chair. Photo by Michael Dinneen, For the Journal

See Chugach, Page 40

Chugach Alaska Corp. Board Chair Sheri Buretta

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Chugach: Continued from Page 40 Buretta points to herself, as well as Chugach CEO Ed Herndon as examples. There are still challenges, the national spotlight now on the Small Business Administration’s 8(a) program, aimed at helping small, disadvantaged and minority businesses. Buretta sees the positive in this, however. “We have to look at this as an opportunity to strengthen our corporations,” by demonstrating good performance, increasing benefits to our shareholders and achieving the intent of the 8(a) program, which is to evolve into successful companies, she said. Chugach is in several lines of business, including commercial real estate in Anchorage and a metal component manufacturing company in Virginia, but its major focus is providing facility operation service and support, as well as construction and educational, mainly Job Corps operations. The corporation was one of the early leaders among Alaska Native corporations in taking advantage of 8(a) contracting opportunities, and most of Chugach’s support companies have graduated from the government minority preference program and are now competing for business on their own. Chugach owns 100 percent of all of its operating subsidiaries, of which nine have graduated from the 8(a) program, Buretta said. Only one is still in the program. Together these companies manage more than 60 support contracts worldwide. “A lot of our work is in base operations and maintenance. We do everything from cutting the lawn to engineering and architectural design, and we’ve developed a broad range of expertise over the years,” Buretta said. There is a track record of performance. “This really shows up in our ability to get more work from customers. The regulatory requirements are very rigorous,” she said. Automatic extensions can’t be assumed. Extensions of contracts must be earned, and Chugach consistently earns them. Although Chugach is less dependent on the 8(a) preferences these days, Buretta is a fierce defender of the program for Native corporations that have recently formed 8(a) subsidiaries. Although margins are slim – 8(a) contract amounts can be large but what counts is the net profit, which isn’t so much – the contracts do provide some cash flow for Native corpora-

tions and, more important, an opportunity to get business experience, particularly in working with joint venture partners. Buretta also admits there are some problems. “There’s no doubt people have (in the past) taken advantage of Alaska Native corporations, their tendency to trust people and their lack of experience in running businesses,” she said. The corporations now have more experience and professional management, and many educated Native managers, but there’s more to be done. Buretta said it’s important for the corporations to recruit board members with business experience. Federal contracting was crucial in helping Chugach recover from devastating early events, particularly the 1989 Prince William Sound oil spill, which ruined the corporation’s fish processing business and pushed it into bankruptcy. However, developing its 8(a) business wasn’t easy for Chugach and Buretta hopes that, having been early in the field, Chugach made it easier for those Native corporations following. It takes several contracts to get the economies of scale to make it work. “It took us six years, from 1992 to 1998, before we started to see meaningful net profits from our investment into this business,” she said. “You have to get a critical mass because often the margins are so low. The contracts can have huge revenues but it’s what you get to keep that counts.” The net after-tax profit on government contracts are typically 3 percent to 5 percent, Buretta said. Chugach also had to invest substantially in the infrastructure to administer government contracts and to get established. The corporation used its 7(i) resource revenue from other corporations as well as income earned from a timber sale in Icy Bay. A $1 million line of credit also helped. It was a real gamble for Chugach at the time because the corporation was still in bankruptcy. In 2000, Chugach finally paid off the last of its bankruptcy-related obligations and started paying dividends to shareholders. Dividends have steadily increased in recent years, from $2.13 million paid in 2005 to $3.56 million in 2009. Chugach isn’t totally dependent on government contracting today. The corporation owns

part of the JL Towers office building in Anchorage’s midtown, where Chugach also has its corporate offices, as well as office buildings on 34th Avenue and one it built on 36th Avenue, which are now leased. The corporation also provides support services to Alyeska Pipeline Service Co.’s oil spill response fleet in its own region of Prince William Sound. The contract was recently renewed with a five-year extension by Alyeska. It took some tough bargaining and attention to costs, Buretta said. This is the most significant contract Chugach has had with Alyeska, she said. The manufacturing company Chugach owns is Wolf Creek Fabrication Services in Norfolk, Va. Chugach started the company in 2009 with a goal of diversification and further capacity development. “The 8(a) program has helped us achieve the ability to be a strong company,” Buretta said. “To me it is the missing link of the Alaska Native Claims Settlement Act, which provided land and cash but no real means to be a successful operating company.” Rising above past betrayals Buretta doesn’t like to dwell on Chugach’s past problems but she isn’t shy about talking of them. Like some other regional corporations – Cook Inlet Region Inc. and Sealaska Corp. for example – Chugach was dealt a bad hand when See Chugach, Page 42

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Chugach: Continued from Page 41 Congress settled the Native claims. Much of its home region is taken up by the Chugach National Forest, much like Sealaska’s region in Southeast Alaska is taken up by the Tongass National Forest. “We were left with mountain tops and glaciers to select,” Buretta said, echoing Cook Inlet’s Margie Brown of lands available to CIRI in 1971. Chugach sued and eventually gained title to alternate land tracts but, as if to rub salt in a wound, the U.S. Forest Service essentially blocked access across national forest land when Chugach tried to harvest commercial timber on a land tract it owned adjacent to the forest. The corporation was eventually able to harvest other lands it owned in the Icy Bay area to the east. But another development that adversely affected Chugach, even before 1971, seemed a script right out of the 19th century history of broken promises to American Indian tribes in the Lower 48. According to a history of the incidents compiled in 2000 for Chugach by a senior Chugach manager, Mike Williams, in 1968 U.S. Bureau of Land Management officials withheld information from the Bureau of Indian Affairs and the Chugach Natives on the status of then-federally owned lands where the Valdez Marine Terminal now sits. Chugach had land claims pending in the area. The action effectively prevented Chugach’s desired selection of the acreage as a part of its land settlement. It also allowed the state of Alaska to select the lands. The state later sold the land to the Trans-Alaska Pipeline System owners for $7 million. Also, just before the 1971 land claims settlement, Chugach worked with the TAPS pipeline owners and other Native associations on an agreement to withdraw Native protests on federal land actions along the pipeline corridor. The protests prevented BLM from processing the oil industry’s applications for a pipeline right-of-way. By waiving their protests the Native groups, including Chugach, allowed the companies to proceed with their work to get a right-of-way. The pipeline was eventually delayed by environmental lawsuits anyway. The pipeline companies, however, committed to jobs and contracts for the Native groups

in return for withdrawing the protests. With Chugach, a plan for a Native-owned tug and barge company that would support the oil terminal operations was discussed and agreed to informally, according to Williams’ history. It was not to be, however. Chugach formed the tug company but wound up dealing with people in the pipeline group who were not party to the original discussions. Chugach did get some minor projects around the Valdez pipe yard, but nothing on the scale that was originally discussed. In 1975, when pipeline construction was under way, a new procurement team at Alyeska Pipeline set up stringent new requirements on contracts. The upshot was that Chugach got no more work. The tug contract ultimately went to Crowley Marine Corp. Buretta said all that is in the past. The 1989 oil spill provided a wake-up call for the industry on the importance of having good relationships and commercial dealings with Native communities in the Prince William Sound region. Chugach now has excellent relations with Alyeska, she said. Today Chugach is investing substantially in the future of its people, in education and sustaining of the Native culture of its sharehold-

Photo Courtesy of Chugach Alaska Corp.

ers. Expenditures on student internships have increased from $200,806 in 2005 to $571,300 in 2990; spending on apprenticeship programs are up from $212,613 in 2005 to $509,193 in 2009; scholarship support is up from $207,095 in 2005 to $690,010 in 2009. The corporation maintains and operates the Nuuciq Spirit Camp on Chugach’s Nuchek Island in Prince William Sound. The camp is a summer retreat for young shareholders or descendents of shareholders to learn about their culture from elders, an important tradition that has helped them survive in their homeland for generations. ✦

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A Fairbanks-based Doyon marks quarter-century of

profitability By Tim Bradner With 12.5 million acres, Doyon Ltd., the Interior Alaska Native regional corporation, is one of the nation’s largest private landowners with a land base bigger than some states. The boundaries of the Doyon region are immense, stretching from the Canadian border in the east to the Lower Yukon River on the Seward Peninsula in the west, the Alaska Range to the south and the Brooks Range to the north. Doyon’s region includes some of the nation’s largest national parks and wildlife refuges, as well as a large amount of land owned by the state and local municipalities and the military bases. And don’t forget a big section of the Trans-Alaska Pipeline System snakes through Doyon’s holdings. Although Doyon’s own lands are scattered through this area, the corporation has a stake in virtually everything that happens across this vast region. Doyon now has 18,200 shareholders, having opened its rolls to younger Alaska Natives born since the Alas-

ka Native Claims Settlement Act was passed in 1971. There were originally 9,000 Doyon shareholders. “We have been profitable for 26 years, we must be doing something right,” said former Doyon President Norm Phillips. Phillips retired in September 2011. Aaron Schutt was appointed as his replacement. Doyon’s before-tax net income was $31.27 million in 2010, and the corporation has set a goal of increasing its net income to $50 million by 2015. Like all of the Native regional corporations, Doyon has a diversified mix of investments and businesses, including industrial and government services, real estate and a small holding in tourism. And like other Native corporations, it is active in promoting minerals and oil and gas exploration, although Doyon is also exploring for oil and gas with partners on state lands. What is distinctive about Doyon is that the corporation has successfully penetrated one of the nation’s highest-tech industries — oil and gas drilling — and is See Doyon, Page 44

Former Doyon Ltd. President/ CEO Norman Phillips

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Doyon: Continued from Page 43 well launched in a second high-tech industry — power plant operation and construction. Doyon also has diversified its oil field and institutional services group with related services like engineering, pipeline maintenance, catering and security. Drilling, the crown jewel For now, the drilling company is Doyon’s crown jewel. Doyon Drilling Inc. is one of two drilling companies that drill the bulk of oil wells in Alaska’s oil fields – the other company is Nabors Alaska Drilling – and the company has built such a solid reputation since it started in the 1980s that rig activity, and earnings, have held up through the periodic bumps in the state’s petroleum industry. Doyon Drilling expanded its rig fleet from six to seven in 2010, when a new rig was built for BP. That rig, which required a substantial investment, is now at work on a seven-year contract with BP. A smaller rig Doyon owns, the Arctic Fox, was brought south to Cook Inlet and is to drill a new gas well for ConocoPhillips and its partners in the Beluga gas field near Anchorage. Doyon Drilling brought the parent corporation $10.1 million in net operating income in 2010, down from $19.9 million in operating income in 2009 and $14.5 million in 2008. The decline in 2010 was due to the drilling company not having all of it rigs working. 2011 will be a good year for Doyon Drilling, with all seven of its rigs at work. One of Doyon’s singular achievements in drilling is a steady focus on recruitment and training of its shareholders, many from small Interior villages, some of whom have now been with the drilling company for years and have moved up into supervisory positions. Utilities, power plant operation Doyon Utilities, 50 percent owned by Doyon Ltd. in a partnership with Fairbanks Sewer and Water LLC, now operates power plants for the U.S. Army at three Alaska installations: Fort Wainwright in Fairbanks, Joint Base Elmendorf-Richardson at Anchorage (the merged Elmendorf Air Force Base and Fort Richardson) and Fort Greely near Delta, which supports the nation’s only operational missile interceptor base. The three power plants use different fuels, with coal used at Fort Wainwright, fuel oil at Fort Greely and natural gas at Elemendorf-

Richardson. This gives Doyon experience with three different types of power systems. This is a 50-year contract that began in 2008. In 2010 the venture brought in $11 million in operating income for Doyon, up from $7.1 million in 2009. As part of the operations contract Doyon Utilities, the subsidiary involved, managed a number of systems upgrades in the plants and the development of new infrastructure at the Fort Wainwright power plant. The utility company is now diversifying its client base in a relationship with Matanuska Electric Association in MEA’s planned new gasfired power plant in Eklutna, north of Anchorage, Phillips said. Some of the gas for this is expected to come from Anchorage’s landfill, which is also in Eklutna, he said. In his message to shareholders in Doyon’s 2010 annual report, Phillips described Doyon’s new strategic organization plan, with the adoption of a business “pillar” model. “These pillars are areas of emphasis that our corporation will be built upon going forward, and include oil field services, government contracting and natural resources development,” he wrote. “We will be evaluating all of our current business undertakings and potential ventures on a set of criteria that must be met for inclusion in our company. This criterion includes competitive advantage, management capabilities and competency, potential for material and financial contribution, and shareholders opportunities.” A policy on shareholder training For the first time Doyon has adopted an explicit shareholder policy. “Within each of these pillars, we will focus on workforce development – recruiting and retaining the most qualified individuals, with a focus on expanding shareholder employment opportunities,” Phillips wrote in the annual report. This means the potential for shareholder hire and training will part of the criteria Doyon uses to evaluate the performance of its companies and partnerships. Doyon Drilling’s shareholder training program has set an example for Doyon’s other companies. A shareholder training program was initiated at the drilling company when Doyon first got into the business in the 1980s. Today about 45 of Doyon Drilling’s 320 employees are shareholders, according to Ron Wilson, Doyon Drilling’s president, and about half of those have been with the company since the 1980s.

Turnover has been low and that is helped by good pay – $65,000 to $75,000 a year for a roustabout (an entry-level rig worker) and salaries in the six figures as employees move up into supervisory ranks, which many shareholders have done, Wilson said. The two-week on, two-week off or even threeweek on, three-week off work schedules allows for time with families, subsistence hunting and fishing and community activities, he said. An attractive benefits package also has helped. Oil, gas, minerals exploration Doyon also encourages exploration on its 12.5 million acres of land. In 2010, three minerals companies were engaged in exploration under licensing agreements, including Full Metals Minerals, FreeGold Ventures and the North American exploration arm of Newmont. The focus of exploration is on both precious metals like gold and silver and base metals like zinc, lead and copper. The corporation is also active in oil and gas exploration both on its own lands and, through partnerships, on state-owned lands in the Doyon region. One focus is on the Nenana Basin, where Doyon and several partners hold an exploration license in an area with high potential for natural gas and perhaps oil as well. The partners have drilled one exploration well, and are evaluating the results, which may include new seismic exploration. On Doyon-owned lands, the focus is on an area in the Yukon Flats near Stevens Village and Birch Creek, where the corporation has sponsored seismic work. The area has potential for oil as well as gas, and Doyon plans to do enough work to attract a petroleum company partner for further exploration. In its exploration, Doyon worked closely with the two village corporations, Ch’izhur LLC of Stevens Village and Tihteet Aii Inc. of Birch Creek. Doyon and Ch’izhur also worked closely with the Stevens Village Tribal Council. All worked together to provide support services and jobs for local shareholders. ✦

Doyon Ltd. President/CEO: Aaron Schutt Headquarters: 1 Doyon Pl., Ste. 300, Fairbanks, (907) 459-2000 Website: www.doyon.com Shareholders: 18,000

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PHOTO CREDIT HERE

Cutline to go here.

Koniag Inc. CEO: Will Anderson Headquarters: 194 Alimaq Dr., Kodiak, 99615 (907) 486-2530 Website: www.koniag.com Shareholders: 3,700

Koniag Inc. strives for

steady growth with base in technology industries

By Tim Bradner Kodiak is an emerald gem of an island across Shelikof Straits and off Alaska’s southern coast. It is home to big salmon, bigger bears, wild buffalo, a thriving commercial fisheries port and a commercial rocket launch facility. It’s also home to Koniag, Inc., an Alaska Native corporation that owns companies working at the leading edge of U.S. high technology industries. Koniag is the Native regional corporation for the Kodiak Island region off Alaska’s southern coast. Its lands, selected under the 1971 Alaska Native Claims Settlement Act, are on Kodiak Island itself and parts of the Alaska Peninsula, on the mainland across Shelikof Strait. In 1971 Koniag received $24 million as its share of the $962 million cash settlement approved by Congress, along with 161,664 acres of surface lands and 773,687 acres of subsurface rights as its share of approximately 45 million acres of lands transferred to newly formed Alaska Native corporations in the settlement act. Koniag has about 3,700 shareholders, about half who live in Alaska and half in the Lower 48 states. With a modest endowment compared to what some other Alaska Native See Koniag, Page 46

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Koniag: Continued from Page 45 corporations received, Koniag has built itself over four decades into a solid, steadily performing company with a diversified mix of operating companies, most of them in the technology fields and most in the Lower 48. “We view our business operations like the salmon with which we are most familiar,” Koniag President Will Anderson wrote in his annual letter to shareholders in 2010. “Our business units go out into the world, become stronger, and return the benefits home to our shareholders.” That concept is not well understood among most Alaskans. Like other Native corporations that invest Outside well as within Alaska, Koniag’s investments result in revenues and income flowing back to Alaska from Alaska capital invested elsewhere. It’s a reversal of the historic trend where out-of-state companies invested in Alaska and took the profits out, often reinvesting them elsewhere. Koniag’s dividends broke $10 a share last year, growing from $1.18 per share paid in 2006, and the trend is something the corporation’s management is proud of, Anderson said. Koniag’s most recent published annual re-

port, for the 2010 financial year, showed the corporation doing fairly well in a year when many businesses struggled, and recovering from a tough year in 2009. Koniag’s net after-tax earnings in 2010 were up a modest 4 percent to $6.37 million, compared to 2009, according to its annual report. But before-tax earnings, a more important indicator, were $10.9 million, up from a $2.9 million loss in 2009. The corporation’s investment portfolio recovered from 2009 also, earning $5.5 million and nearly erasing investment losses in 2009. While revenues and net income were up in 2010 compared to 2009, the year did not match 2008, which was a strong year for the U.S. economy. Koniag’s before-tax earnings were $12.3 million that year, only marginally higher than 2010, but net earnings were $12 million, about twice the net earnings of 2009 and 2010. Koniag’s revenues grew by 29 percent in 2010, with growth fueled mostly from its operating companies, which provided 22.5 percent of revenue growth. Businesses in information technology and telecommunications saw revenues climb by 82 percent over 2009. It’s too early for details of Koniag’s performance in its 2011 financial year, which ended

in March, Anderson said, but it was a profitable year with continued growth. “It was a strong year for us, a little better than last year,” he said. “Our revenues and net income were both up. We are striving for solid, steady growth and this was a reasonable increase. Like for everyone else our investment portfolio has recovered. We stuck it out (through the downturn) and benefited from the upswing.” Working and change Like other Alaska Native corporations, Koniag is active in 8(a) government contracting and about half of the dozen businesses the corporation owns are qualified as minority-owned contractors to the federal government. The Small Business Administration’s 8(a) program allows minority-owned disadvantaged businesses special consideration in receiving federal contracts. Anderson said his company is using the 8(a) program carefully, however. “We see it as a tool, not an industry,” he said. “It is a way to get established and get experience in a field,” but it’s not something that can be counted on. The 8(a) work can generate subSee Koniag, Page 47

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Koniag: Continued from Page 46 stantial revenues, and in its 2010 financial year, 70 percent of Koniag’s revenues came from 8(a) work, according to its annual report, but profits can be modest. Koniag prefers to own companies, even non-8(a) firms that compete without preferences, and which offer services and products of high value, and that’s because margins are usually higher. Technology companies can fit into this category, and it is one reason why Koniag’s strategy has been charted in this direction. However, there are always opportunities for mid-course corrections and a fine-tuning of strategy, and one such change is under way now for Koniag, Anderson said. “We’re in the midst of a subtle change of strategy. Until a year ago we focused on diversification, but now we want to sharpen our focus on core business areas that will offer opportunities to build strength, and then move in new directions,” he said. “An example of this is in information technology. We had a number of holdings in the field but they were not well integrated. We want to reorganize this, to better ‘brand’ our services,” Anderson said. Similar moves are being made in other fields in which Koniag has invested. Some assets are being sold off, too. In March Koniag finalized the sale of Washington Management Group, or WMG, and its subsidiary, FedSources Inc. to Delrek Inc., an IT company. Koniag acquired WGM in 2000. The company had three decades of experience in providing consulting services to companies seeking federal contracts, while FedSources provided market intelligence about federal contracting to clients. The change will allow Koniag to concentrate

on companies with potential for higher margins. Examples include Angeles Composites Technologies Inc., now majority owned by Koniag after it bought out Doyon Ltd.’s share earlier this year. Doyon is the Native regional corporation for Interior Alaska and was until then Koniag’s partner in the company. Angeles Composites Technologies develops composite technologies mostly for the aerospace industry. Another Koniag company is Digitized Schematic Solutions LLC, which works in highly specialized maintenance for defense and aerospace companies; others include Clarus Technologies LLC and Clarus Fluid Intelligence LLC, work in design and of equipment to clean and reprocess petroleum fluids and lubrication systems. There are other Koniag technology companies but one well-known Alaska company among Koniag’s holdings is Dowland-Bach, a firm which designs and builds control systems for industrial and commercial operations. The company, founded in Alaska in 1974 and purchased by Koniag in 2009, has done extensive work in development, installation and maintenance of petroleum production facilities, including wellhead safety systems, and has recently branched out into serving utilities and commercial clients. Anderson said that as Koniag focuses on core areas it is in the market for acquisitions in those fields. “We’re looking for firms which have a substantial competitive advantage, not a ‘low-cost’ vendor. If we can use 8(a) status to get a foothold in an area we’ll use it, but that won’t be the core of our business strategy,” he said. Building at home Koniag is also now making a special effort to look at opportunities within Alaska,

including in the Kodiak area so shareholders can be involved. The corporation is developing a granite quarry on Kodiak near Ouzinkie that would produce large armor rock for use in protective seawalls in port projects. There is a shortage of such construction material and Koniag believes there are opportunities for sales of granite both within and outside Alaska. Shipments to the Lower 48 would be affected by the U.S. Jones Act, which requires cargo movements from one U.S. region to another to be in U.S.-built vessels. That means U.S.-built barges would have to be used to move the granite to out-of-state. “Armor rock of this quality isn’t all that available, so we may be able to make sales to the Lower 48,” Anderson said. Another initiative in the region is a highend ecotourism project, establishing facilities to view Kodiak’s famous brown bears in safety and comfort. Koniag is now building a lodge on an island in Karluk Lake, where cabins will also be available, from which visitors will go by boat to view brown bears along nearby rivers. Koniag owns land around the lake and along the Karluk River. Some of these lands are protected against development by conservation easements, and the acreage is also adjacent to the Kodiak National Wildlife Refuge, all of which mean that clients are guaranteed a Kodiak wilderness experience. The lodge will be near two Koniag villages, Karluk and Larson Bay, so there will be seasonal employment opportunities, Anderson said. Cabin rentals are now available at the location, and the lodge will be open in 2012. Karluk Wilderness Adventures, a new Koniag subsidiary, will operate both the Karluk River Cabins and Kodiak Brown Bear Center. ✦

Check for updates everyday! www.alaskajournal.com

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Find Meaningful Work Close To Home Growing up in Savoonga, I saw so many young people leave for education and jobs and never return home. I’m glad I found a job that lets me work close to home.

“Helping others makes me feel good.” There are hundreds of jobs available throughout Alaska to help people with mental illness, developmental disabilities, chronic alcoholism and other substance related disorders, Alzheimer’s disease and related dementia, and traumatic brain injury. Jobs for high school graduates to professionals with advanced degrees. Training is available. Curious? Find out more at aadsc.org. Join us on Facebook

www.aadsc.org

The Alaska Mental Health Trust Authority www.mhtrust.org

Panganga Laura Pungowiyi is a brain injury awareness advocate. She lives in Nome and works for Kawerak, Inc., the regional non-profit corporation for the Bering Straits Region.

The Alaska Native Claims Settlement

Act was enacted on Dec. 18, 1971.

Years of Opportunity

CIRI honors the vision of the Alaska Federation of Natives and those who worked long and hard for ANCSA’s passage. The Act established 12 Alaska Native regional corporations and more than 200 village corporations that are creating opportunities for generations of Alaska Native people.

AN ALASKA NATIVE CORPORATION

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NANA profits

NANA Regional Corp.

with diversification strategy

NANA President Marie Greene

CEO: Marie N. Greene Headquarters: PO Box 49, Kotzebue (907) 442-3301; 1001 E. Benson Blvd. Website: www.nana.com Shareholders: 12,500

By Tim Bradner A strategic business plan adopted in the mid-1990s by NANA Regional Corp. for its business subsidiary, NANA Development Corp., has served the company well through the ups and downs of the economy, including the sharp national recession that began in 2009. “Eighty percent of our business income was from oil and gas support services in 1995, which made us very vulnerable to the periodic swings in that industry,” said Helvi Sandvik, president of NANA Development Corp. “A lot of the work we were doing was also in the low end of the business in terms of margins. We felt we needed to change our strategy and diversify into other businesses with higher margins, and in other geographic markets,” Sandvik said. This turned out to be a wise decision. “We would be in a world of hurt if we were still 80 percent dependent on Alaska oil support work today given the current state of the industry in Alaska,” Sandvik said. NANA is doing well, thanks to royalty earnings from the Red Dog lead and zinc mine, which is on lands owned by the corporation, as well as good performance by NDC-owned businesses. NANA earned a $41.17 million net profit on $1.59 billion in revenues in 2010 and paid about half of its earnings in dividends to its 12,700 Inupiat shareholders. Earnings in 2011 are expected to be similar. NANA Development’s strategic business diversification was done intelligently. The corporation built off the expertise it had developed in oil and mining support, in services like catering, facility management and security to branch out into related industries. For example, an early diversification into hotels took advantage of NANA’s experience in housekeeping and catering services gained See NANA, Page 50

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NANA: Continued from Page 49 from its North Slope support work. In the 1990s NANA built three hotels in Anchorage in a joint-venture with Sodexo, and in 2001, one in Fairbanks that includes a consortium of village corporations among the owners. Engineering was another key diversification, and one that also promised higher margins. NANA made two acquisitions of two veteran Alaska civil engineering firms, DOWL Engineers, in 1999 and Arctic Slope Consulting Group, from Arctic Slope Regional Corp., in 2005. DOWL became DOWL/HKM in 2008 when HKM, a Lower 48 company, was acquired. This allowed DOWL to expand into other states. NANA Development further diversified into oilfield engineering, an industry where it felt at home, with joint ventures with Colt Engineering in 1997. This became NANA/Colt Engineering, owned 50-50 by both companies and eventually NANA WorleyParsons, when WorleyParsons, an international company, bought Colt Engineering’s stake in the joint venture in 2007. The company operates separately from WorleyParsons’ worldwide operations and is legally a separate company, but uses WorleyParsons’ resources and expertise. Parsons Engineering, now WorleyParsons, has an Alaska history that goes back to the design and engineering of the early North Slope production facilities in the 1970s. Many of NANA Development’s legacy North Slope oil subsidiaries, like NANA Oilfield Services, which sells fuel and lubricants, still operate. NANA Management Services and Purcell Security still provide catering, housekeeping and security for North Slope producing companies, which they have for more than three decades. NANA Regional Corp. also continues to own a small working interest percentage, less than half of 1 percent, in the Endicott oil field on the North Slope. This came about when NANA participated with a number of other Alaska Native regional corporations in a consortium with BP in bidding for leases in a 1979 state lease sale. The group won the leases, a discovery was made, and an oilfield was developed. Not all of NANA Development’s early oil service initiatives were continued. NDC was once part of a joint venture owning and operating drill rigs with Veco Alaska and two North Slope village corporations, Kuukpik and Kaktovik Inupiat Corp. The rigs worked for several years but were sold when the major producing companies pushed for a consolidation in the Alaska drilling industry. Moving to ships, film NANA Development’s experience in the Alaska oil patch has led it now to its latest acquisition, Louisiana-based Grand Isle Shipyard, a major provider of offshore platform maintenance services in the U.S. Gulf of Mexico. This deal not only grows NANA Development by about 10 percent, in terms of revenues and workforce, but it is more significant than that number indicates, Sandvik said. Grand Isle has about $200 million in annual revenues, which when added to NANA’s own revenues, will bring the parent corporation close to $1.8 billion per year, possibly more. “The numbers of the Grand Isle deal underestimate the significance of this to us,” Sandvik said. “This is a strategic acquisition that strengthens us in the oil and gas sector, and in the Lower 48. It will also provide new opportunities for our other companies that now provide support services to the petroleum industry.” For the current year, NANA Development is seeing a modest, and encouraging uptick in business for many of its subsidiary companies. NANA

Management Services has long been diversified into serving institutions like hospitals, schools and university campuses, as well as its core business in support of petroleum companies. The company will see a modest gain in revenues and margins this year. Margins have been under pressure in recent years due to budget constraints among its customers. NANA Management Services has a long history. The company was started as NANA Commercial Catering in 1974 to provide services to the North Slope oil producers. In 1986, the partnership changed to NANA-Marriott. Sodexho purchased Marriott’s ownership interest and the partnership continues with NANA owning 51 percent of NMS and Sodexho 49 percent. NANA Development’s hotels in Anchorage and Fairbanks are doing better, Sandvik said, helped partly by the modest increase in tourism in 2011 after that industry dipped in 2010. NDC owns 100 percent of the University Lake Springhill Suites and 60 percent of the Courtyard Marriott near the Anchorage airport and the Springhill Suites and Residence Inn in midtown Anchorage, with Sodexho as the partner. All of the hotels are operated by NANA Management Services. The Marriott-brand hotels are aimed more at business travelers and Alaskans than tourists, Sandvik said, but the lift that tourism is providing almost all hotel operators this year is helping NANA Development as well. What’s also encouraging is an increase of demand for engineering services this year; particularly engineering that supports oil and gas. “This is a good indicator because engineering work means new projects will be moving into the pipeline for construction,” Sandvik said. One recent acquisition, however, did not fit NANA Development’s overall strategy but was still done. It is an example of the benefits of remaining flexible enough to pursue new opportunities when they present themselves. “We stepped outside out plan with an investment in Evergreen Films in 2010, which we felt represented an opportunity for us in a growing industry, film production. It is almost like a venture capital deal but it also complements our other businesses. All the services needed in making a movie, providing equipment, construction services, hotel, food services and security, are things that we do,” Sandvik said. “It was a bit of a wild card that was not on the horizon for us earlier.” Evergreen Films is an Alaska-based independent film production company that has developed 3D production and post-production studios in both Anchorage and Los Angeles using advanced technologies. In recent project for Evergreen has been working with BBC Earth to develop a film on dinosaurs. Government work Like most other Alaska Native corporations, NANA Development has delved into government contracting work. The company began delivering services to the government by participating in the Small Business Administration’s 8(a) program in 1996. Over time, as it has developed expertise — many of the subsidiaries have graduated from the 8(a) program and are now competing without preferences, while some of the companies are still eligible for the program. Sandvik said the government services group continues to grow, and over time are transitioning beyond the 8(a). “Last year, 56 percent of our government contract revenues were captured through the 8(a) program, whereas this year only 42 percent of our government contract revenues will be captured through the 8(a) program,” Sandvik said. See NANA, Page 51

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NANA: Continued from Page 50 Revenues from government contracting are growing fast, however. In 2010 these totaled about $600 million, Sandvik said, but are expected to reach $875 million in 2011. “Also, 90 percent of the work we are contracting for in government services is competitively bid. Not only have many of our companies now graduated from the 8(a) program, but there is also competition within the 8(a) world, where one 8(a) company is competing against another,” Sandvik said. NANA Development will be less dependent on 8(a) but will still be in the business. “The 8(a) world is changing, but it’s not gone,” Sandvik said. “What 8(a) means to us is access to markets, for us to learn how to deliver services. We want it to be a strong, growing part of our portfolio,” but not dominant.

“Our strategic diversification is our strength and it has allowed us to ride out downward swings in the economy, like that in 2009,” Sandvik said. A few NANA Development companies were affected by the recession, including one focused on real estate, but in general NANA came through the recession unscathed. Growth resumed in 2010 and the trend has continued in 2011, Sandvik said. “We have built a nice, diversified portfolio and we expect to see growth in each of our business areas,” she said. Another new initiative NANA Regional Corp. has under way is a pending agreement with NovaGold Resources to combine NANA-owned mineral holdings in Bornite, on the Kobuk River, with those owned by NovaGold in the Ambler mining district farther east. The properties that would be combined include the Arctic deposit, a volcanogenic massive sulfide deposit which contains copper, zinc, lead, and precious metals. NovaGold has said that the Arctic VMS is one of the highest grade undeveloped deposits of its type in the world. The agreement, approved in concept by NANA’s board last January, is expected to be signed soon. ✦

www.alaskausa.org

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By Tim Bradner Sealaska Chair Albert Kookesh

Sealaska President & CEO Chris McNeil

Sealaska navigates the recession with

revenues up, but uncertainties loom

Like most Alaska Native regional corporations, Sealaska Corp. of Juneau has navigated the recession with a successful strategy of business diversification, but there are major uncertainties out there. The economic recovery is weak, which has caused slower growth than expected in some Sealaska businesses, Sealaska President and CEO Chris McNeil says. While that has been offset by stronger growth in Sealaska’s business with government agencies, possible federal budget cuts may have a dampening effect this next year. Meanwhile, Sealaska is still tied into one market that is strong. Demand for timber in Asia is still growing and this has allowed Sealaska Timber Corp. to maintain steady harvests from Southeast Alaska forestlands owned by the corporation, McNeil said. Timber harvesting has been a core business for Sealaska since 1980, and Sealaska Timber currently employs about 400. Legislation now pending in Congress would allow Sealaska to sustain these harvests and also avoid harvesting in ecologically sensitive areas that the corporation now has rights to but would prefer to preserve in their natural state. So far, Sealaska’s revenues remain on a growth track. About $223.8 million earned in 2010 are up from $196 million earned in 2009, and significantly up from $169.8 million earned in 2006. Net profits took a dip in 2010, however, with $15.1 in 2010 profits compared with $20.2 million in 2009. Sealaska suffered a $40.8 million net loss in 2008, but there were strong profits of $41 million and $30 million in 2006 and 2007. Sealaska has been an economic engine for Southeast Alaska. Since the corporation was formed in 1972, it has distributed $463.5 million to approximately 20,000 shareholders and to village corporations in the Southeast region, and has paid $317.1 million in shared resource revenues, the bulk of it from timber sales, to other Alaska Native regional and village corporations. See Sealaska, Page 53

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Sealaska Corp. President/CEO: Chris McNeil Headquarters: One Sealaska Plaza, Ste. 400, Juneau, 99801 (907) 586-1512 Website: www.sealaska.com Shareholders: 20,000

Sealaska: Continued from Page 52 One new venture for Sealaska is the formation in 2010 of its Haa Aani LLC subsidiary, which has a focus on Southeast business development. Haa Aani’s goal is to work toward sustainable industries for the region, particularly in helping shareholders’ small businesses and tribal enterprises. McNeil said Sealaska’s revenues are expected to continue growing in 2011, but the new uncertainties over the federal budget could affect 2012. “This is very difficult to forecast. The uncertainties in federal procurement will affect all Native corporations doing business with the government as well as ourselves,” he said. For Native corporations that have subsidiaries with an 8(a) disadvantaged business certification, including Sealaska, there are also changes in federal minority contracting. There is more competition in these programs, for one thing, with Native 8(a) companies now competing with each other for contracts and there is less sole-source negotiations, McNeil said. The rules of the program are also more stringent. A lot of this has resulted from recent criticism of the 8(a) federal contracting. “Most Alaska Native corporations including Sealaska are adjusting rapidly to these changes, and it’s still a business where we would like to grow,” he said. Federal spending may be cut but the government will still buy and build things. Sealaska is proud of the accomplishments of its subsidiaries. For example, Sealaska Environmental Services is testing and installing a device that will help detect radiation at U.S. border crossings, a development that is important for national security. Another subsidiary, Security Alliance, was named the 2010 Prime Small Business Contractor to the U.S. Department of State. Sealaska’s plastics design and manufacturing holdings include a partnership with Nypro Inc. in a jointly owned company, Nypro Kanaak, which

has plants in Iowa, Alabama and Mexico. Within Alaska, McNeil said Sealaska has high hopes for Haa Aani with its focus on regional development. “Our goal is for this to be a catalyst for sustainable development in our villages, where we’ve seen a steady decline in jobs and population in recent years,” he said. For example, Haa Aani is now working with small oyster farms in Southeast. “We want these to be locally owned enterprises, but there are areas where we can help with our experience in marketing to large customers and expertise in logistics,” McNeil said. Another initiative by Haa Aani this year is working with Kake Tribal Corp. with a seafood cold storage plant at Kake. The plant has not operated for a number of years but was able to open this year, creating opportunities for local fishermen. “In this case, we were able to take the oper-

Chris McNeil said Sealaska’s revenues are expected to continue growing in 2011, but the new uncertainties over the federal budget could affect 2012.

ating risk in opening the plant, which had been mothballed,” McNeil said. Haa Aani has also been working to expand wood biomass heating to give Southeast communities an alternative to heating with expensive fuel oil. Sealaska itself led the way on this with conversion of its corporate office building in Juneau from oil to wood-pellet heat. There are now two public buildings in Ketchikan heating with wood pellets, and Haa Aani is working with building owners on several other possible conversions. Rick Harris, Sealaska’s executive vice president, said wood heat has allowed Sealaska to save about $18,000 so far this year on the heating bill for its corporate office. Sealaska decided to make the conversion to demonstrate that large buildings could be retrofitted and reliably served by wood biomass. One challenge is that there are not yet enough buildings in Southeast using wood biomass to justify building a pellet-manufacturing facility in the region, so for now the pellets have

to be shipped in from Washington state. “A pellet plant will need to produce about 15,000 tons per year to be economically viable and with what we have on-line right now and probable conversions in the near future, we’re about one-fourth of the way there,” Harris said. If all schools and public buildings in Southeast were to make the conversion there would be sufficient demand, however. Wood pellet manufacturing is done mainly with residue from other timber harvesting. It wouldn’t make sense to go out into the woods and cut trees just for pellets, but it could work if done as part of an integrated wood products manufacturing, such as at a sawmill. Meanwhile, Sealaska is continuing its harvesting on corporation-owned lands in Southeast at a rate of about 50 million board feet per year. “Five years ago we were harvesting 100 million board feet yearly but we slowed things down,” to keep the harvest sustainable, Harris said. One new development is that Sealaska is now harvesting second-growth timber, or trees that have grown up since an area was previously logged. Sealaska used selective harvesting with the use of helicopters for the second-growth harvest in an area near Grace Harbor. The initiative proved Sealaska can economically harvest second-growth trees, and introduced these kind of trees to customers, mainly international. Harris said it was surprising to learn that many customers actually preferred the smallerdiameter, second-growth logs of less than 20 inches in diameter, mainly because their mills were set up to handle these sizes of logs more efficiently than larger-diameter logs. This has prompted Sealaska to rethink how second growth harvesting could be done. “It has caused us to step back and think about the proper rotation,” between first and second harvest, Harris said. “We’re still learning a lot about these forests in Southeast. Unlike in the Pacific Northwest, we don’t have a century of experience to draw on,” he said. McNeil said, “The forest industry is changing, and Sealaska intends to be part of the transition.” Passage of the federal legislation is critically important to this, however, because it will allow Sealaska to avoid cutting in watersheds that are See Sealaska, Page 54

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Sealaska: Continued from Page 53 important to fish habitat and community subsistence activities. Under the 1971 Native claims act Sealaska was given rights to select 375,000 acres of federal lands. Now, 40 years later, only 290,000 acres has been conveyed to the corporation. With 85,000 acres left to select in its 1971 entitlement, Sealaska can choose from within a large 327,000-acre “withdrawal” area set aside by the government. However, much of this is in roadless wild areas, high-value fish and wildlife habitat or

watersheds that are important to communities. Sealaska believes that much of this area is more suited to public ownership. In its legislation, the corporation has proposed an alternative selection area of 85,000 acres, 70 percent of which is in areas served by roads with sufficient timber to allow Sealaska to continue harvesting at a rate of 50 million board feet per year. The bills would also set aside 8,600 acres as sites for cultural and historic preservation and, most significantly, would allow Sealaska to gain ownership of more than 200 sites with cultural, historic and archeologi-

cal significance to Native people. McNeil said the House version of the bill was approved last May, on a bipartisan vote, in the House Natural Resources Committee. A vote on the Senate version, in the Senate Resources Committee, is still pending. “We’re very encouraged by the bipartisan vote in the House and the support we’re getting overall,” McNeil said. Congress has a lot of other things on its plate, like the effort to reduce the federal deficit. “Our concern is now timing, in terms of getting final action this year,” he said. ✦

13th Regional seeks land as way out of insolvency By Andrew Jensen Insolvent and in no position to help itself, the 13th Regional Corp. is looking to Congress and its fellow Alaska Native regional corporations for a solution that would allow it to participate in revenue sharing by receiving a land allocation of as much as 1.2 million acres. The land could come from areas already withdrawn from federal lands for earlier rounds of selections by Native corporations but not chosen for various reasons. The 13th Regional was created for Alaska Natives no longer living in the state after the passage of the 1971 Alaska Native Claims Settlement Act, or ANCSA, which created Native regional and village corporations and put 44 million acres of Alaska lands into private ownership. The 13th regional corporation was incorporated in 1975 with about 4,200 shareholders. It received $54 million of the $962 million payment through ANCSA, but was not given any land conveyed to the other 12 regional and 200 village corporations. Because it did not receive land, the 13th could not participate in the revenue sharing among Native corporations provided for in section 7(i) of ANCSA. Section 7(i) requires regional corporations with minerals, timber or oil and gas production to share 70 percent of the revenue with other Native corporations, except the 13th regional corporation. Now, 36 years later and with an estimated 5,000 shareholders to serve, a series of bad business deals and poor management has left the company near ruin. It hasn’t had an annual

meeting since 2007 or provided audited financial statements since 2006. The company website went dark in 2009 and the last four lots in a Spokane, Wash., subdivision owned by 13th subsidiary Alindeska Development Services LLC were foreclosed on earlier this year. Without a proper shareholder election in years, the current board of directors, including President Mike Rawley, serves on a volunteer basis thanks to the forbearance of the Alaska Banking and Securities Division, which has held off on declaring the 13th out of compliance with corporate governance regulations as it attempts to reorganize. The 13th, with the backing of the Alaska Federation of Natives, is seeking help from the Bureau of Indian Affairs, a part of the U.S. Department of the Interior. Rawley said the company doesn’t have the money to hire an auditor, hold an annual meeting or conduct elections. “We’ll do an audit when we can pay for it,” Rawley said. “That’s the state of affairs there. We have no other accounting available, and we have no revenues or operations.” Rawley, originally from Ketchikan, is also CEO of the National Tribal Development Association, which works on economic development with Lower 48 Native American tribes. In a letter to BIA Director Larry Echo Hawk, AFN President Julie Kitka urged the Interior Department to consider the request to provide funding for a reorganization, “within their (BIA’s) trust responsibility to look out for the Alaska Natives who are so disenfranchised. Please use everything within your power to help.” While not speaking to the merits of the 13th

corporation’s land proposal, Kitka said the reasoning behind a lack of land conveyance to the 13th Regional needs to be revisited. “The policy reasons for doing that (denying the corporation land selection rights) are no longer valid,” Kitka said. “The Congress and committees assumed they’d never want to have ties to Alaska. There’s been a great in-migration of Alaska Natives back into Alaska. People move back and forth. It was a faulty assumption they wouldn’t want to move back to Alaska.” Many 13th shareholders also live in Washington state, and Rawley said the number makes them the largest Native American tribe in that state. The shareholder records are secure, housed at the 13th Heritage Foundation office in Seattle. The 13th Heritage Foundation is the nonprofit subsidiary of the corporation. Rawley became president of 13th Regional in 2006, when former President Norman Ream resigned along with the rest of the board of directors following a $2 million unauthorized investment, allegations of self-dealing and a resulting $10 million liability on the books of the 13th. In a letter to shareholders in 2008 — the last formal communication from the 13th Regional — the new board wrote that the damage done to the company finances by the previous officers and board prevented it from securing construction jobs and Small Business Administration 8(a) federal contracts that have been a boon to Alaska Native corporations. The letter also cited the devaluation of real estate prices for its losses at the Talon Ridge See 13th, Page 55

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13th: Continued from Page 54 subdivision in Spokane. A series of default judgments in favor of contractors and suppliers were declared against Alindeska in 2008 related to work at Talon Ridge, and AmericanWest Bank of Spokane foreclosed on the development earlier this year. Rawley said all revenue from lot sales went toward servicing the Talon Ridge loan and no profits flowed through to the 13th. He also said Aug. 30 that AmericanWest Bank is not pursuing any further claims against Alindeska. The 2008 letter to shareholders further blamed the plight of the 13th on poor corporate management that resulted in unfavorable terms for SBA 8(a) contracts, as well as its inability to share in 7(i) revenue derived from resource development by other Alaska Native corporations. The pursuit of a land allocation that would allow for 7(i) revenue sharing for the 13th Regional led Alaska U.S. Rep. Don Young, along with Washington U.S. Rep. Norm Dix, to introduce legislation in 2008 that would have allowed selection of up to 1.16 million acres subject to approval of the state, or regional and village corporations that may have a priority claim. Rawley said he’s had recent discussion with staff in Sen. Lisa Murkowski’s office about the

idea of a land conveyance to the 13th, and said he hopes to speak with her in person when he visits Washington, D.C., in mid-September. Rather than the 13th Regional selecting and managing the lands as was proposed in Young’s legislation, the company is now proposing that the 12 regional corporations select and manage the lands. That would give an incentive for the regional corporations to maximize the 7(i) benefit for all, as well as bring to bear their wealth of management expertise and more mature, transparent corporate governance. “It’s our recommendation that (management of any lands selected by the 13th corporation) not occur. It will only slow down generation of 7(i) revenue from that land if we have to build that (land) knowledge from scratch, and build a management team,” said 13th Regional board member Tom Harris, who is also serving on the volunteer board. Harris is the former CEO for Tyonek Native Corp. and Alaska Village Initiatives, a nonprofit that works with Native village corporations. “Our preference is to meet with the 12 and have them choose where the land should be,” Harris said. “They will know better and will put forward their best opportunity and say, ‘this should be selected.’ As a combined group with a 70 percent interest (through revenue sharing) they’d make the best decision.”

Rawley said the resource departments of the various regional corporations could manage the lands in exchange for a fee from the 13th, and that the 7(i) revenue could have a “big impact” for all Alaska Native corporations. The economic value of the unselected lands could be substantial. “The number could definitely raise some eyebrows,” Rawley said. Naturally there may be challenges in getting established Alaska Native corporations to aid the 13th in getting back on its feet. “The 13th doesn’t want to harm our relatives,” who also are Alaska Native shareholders of the corporations within Alaska, Harris said. “There are legitimate concerns of someone living up here, one of the original 12. They don’t want the 13th coming up here, into their region, selecting lands in competition with them and setting up businesses that are not complementary and making their life more difficult. We don’t want to do that either. “At the same time, we believe there is a solution, and it is this,” he said. Rawley said the 13th proposal could be a “win-win” for the state and fellow Native corporations, and especially for the shareholders whose last remaining ties as Alaska Natives are linked to the 13th Regional. “They motivate us to keep doing it,” Rawley said. ✦

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Southcentral Foundation – Where Alaska Native People Continue to Shape Health Care

MILESTONES 1982 - Southcentral Foundation is established as a 501c(3) nonprofit under the tribal authority of CIRI 1985 - Enters into its first self-management contract (dental and optometry), as authorized by the Indian SelfDetermination Act 1987 - Expands dental and optometry, and adds behavioral health services 1994 - Opens the first orthodontic clinic in Alaska for Native children; adds psychiatric care and family medicine 1998 - Assumes management and ownership of the entire primary care system in Southcentral Alaska 1999 - Assumes co-management and co-ownership of the Alaska Native Medical Center with Alaska Native Tribal Health Consortium 2000 – Introduces relationship-based Nuka System of Care: integrated care teams, same-day access to care and much more 2003 – New Fireweed Building opens to house state-of-the-art dental, optometry and behavioral health services 2009 – Anchorage Native Primary Care Center opens new 80,000-square-foot wing 2011 – Over 150 health care leaders from around the world attend SCF’s inaugural Nuka System of Care Conference

www.southcentralfoundation.com

2012 – Second annual Nuka System of Care Conference in June, and celebration of SCF’s 30th anniversary