The Corporate Whale: ANCSA, The First 10 Years Program

Program 6 of 10
McPherson, Karen Michel 1982

5...4...3...2...1. LADIES AND GENTLEMEN OF THE AFN, THIS IS THE WHITE HOUSE IN WASHINGTON CALLING. I PRESENT THE PRESIDENT OF THE UNITED STATES...

[President Nixon] I APPRECIATE THIS OPPORTUNITY TO EXTEND MY GREETINGS AND BEST WISHES TO THE CONVENTION OF THE ALASKA FEDERATION OF NATIVES. I WANT YOU TO BE AMONG THE FIRST TO KNOW THAT I HAVE JUST SIGNED THE ALASKA NATIVE CLAIMS SETTLEMENT ACT. THIS IS A MILESTONE IN ALASKA'S HISTORY.

[Narrator] THE CORPORATE WHALE: ANCSA, THE FIRST 10 YEARS.

[] The Reverend Merculieff from St. George Island...

This land of Alaska, which thou gave to our ancestors, who have come and gone before us, is now being handed to us a second time, by the Act of the United States Congress and our untiring efforts. A second chance is given to us by thee to be the new custodians and caretakers.

OF THE 13 REGIONAL NATIVE CORPORATIONS THE ALASKA NATIVE LAND CLAIMS SETTLEMENT ACT CREATED TO BE OVERSEERS OF THE ACT'S BENEFIT, SOME HAVE TAKEN BETTER CARE THAN OTHERS OF THEIR SHARE OF CONGRESS' GRANT. NEARLY ONE BILLION DOLLARS AND CLOSE TO 44 MILLION ACRES OF LAND GIVEN IN EXCHANGE FOR RELINGUISHING FURTHER LAND CLAIMS.

IN THE TEN YEARS SINCE PRESIDENT RICHARD NIXON SIGNED THE ACT, ANCSA, INTO LAW ON DECEMBER 18, 1971, MILLIONS OF DOLLARS HAVE BEEN MADE AND EVEN MORE MILLIONS LOST IMPLEMENTING THE ACT IN THE BUSINESS STRUCTURE IT MANDATES. BUSINESS CORPORATIONS THAT DIFFER FROM THE USUAL IN A NUMBER OF WAYS. THEY ARE OVERSEEN BY BOTH THE STATE AND THE SECRETARY OF THE INTERIOR. SHAREHOLDERS ARE DETERMINED BY ENROLLMENT AND RECEIVE EQUAL NUMBERS OF SHARES WHICH THEY MAY NOT SELL FOR 20 YEARS. IDENTIFYING AND OBTAINING LAND IS A MAJOR ACTIVITY AND THE INITIAL CAPITALS, NOW ALL RECEIVED, CAME FROM CONGRESS AND THE STATE OF ALASKA, NOT PRIVATE INVESTORS. A FACT THAT CAUSED SOME DELAY IN STARTING UP THE NEW BUSINESS ENTERPRISES.

JOHN SCHAEFFER FIRST BECAME PRESIDENT OF NANA REGIONAL CORPORATION IN KOTZEBUE IN 1972...

We had an Act, but no money.

THAT SITUATION HAS CHANGED DUE TO THE RECEIPT OF THE CASH PART OF THE LAND CLAIMS SETTLEMENT, AND FOR SOME CORPORATIONS [IS RESULT] OF PRUDENT INVESTMENT. IN 1980, NET WORTH FOR THE 13 REGIONAL CORPORATIONS RANGED FROM SEALASKA'S CLOSE TO $200 MILLION DOWN TO CHUGACH'S SEVEN MILLION, THE ONLY CORPORATION THAT HAS NOT YET RECEIVED ANY OF ITS LAND ENTITLEMENT. THE PROFITS AND LOSSES VARY WIDELY AS WELL, FROM SEALASKA AND COOK INLET REGION AT THE TOP WITH PROFITS CLOSE TO SIX MILLION EACH TO CALISTA CORPORATION'S 1980 LOSSES IN EXCESS OF SEVEN MILLION DOLLARS.

IN THIS PROGRAM, THE SIXTH IN A TEN PART SERIES, THE CORPORATE WHALE, LEADERS FROM NANA, THE NORTHWEST ALASKA NATIVE ASSOCIATION REGION, AND CALISTA CORPORATION WILL PROFILE THEIR CORPORATION'S ACTIVITIES IN MANAGING ANCSA'S BENEFIT.

ØDividin' the maktak is they way it's always been
Dividin' the maktak between family and friends
We're sailin' toward to future, we're anchored in the past
Rich in our tradition, our ways will surely last Ø

BALANCING THE TRADITIONS OF THE IÑUPIAQ ESKIMO PEOPLE OF THE NORTHWEST ARCTIC WITH MAKING PROFITS IS A MAJOR CONCERN FOR NANA, THE NORTHWEST ALASKA NATIVE REGIONAL CORPORATION, BASED IN KOTZEBUE. WILLIE HENSLEY, WHO FIRST ORGANIZED NANA IN 1966, IS NOW PRESIDENT OF NANA DEVELOPMENT CORPORATION...

Of what real value is it to work for a Native corporation unless you feel that you're helping contribute to their willingness to survive as a people? You know, otherwise you can go to work for Exxon or, you know..uh, some other corporation.

NANA PRESIDENT JOHN SCHAEFFER...

A profit is not a great motive. We..we look at other things, providing jobs essentially or providing services. And then if we can make it a profit..make a profit on it, we will. And..but usually we..we look for a longer period of time before we get our investment back.

INVESTMENTS ARE BASICALLY OF TWO TYPES: WHAT SCHAEFFER CALLS REGIONAL EFFORTS, DESIGNED TO PROVIDE SERVICES AND JOBS TO THE REGION'S ELEVEN VILLAGES AND 5,000 SHAREHOLDERS; INVESTMENTS SUCH AS REINDEER HERDS TO PROVIDE JOBS, MEAT, AND THE SALE OF ANTLERS TO THE FAR EAST FOR USE IN MEDICINES; FUEL DEPOTS, A BUILDING SUPPLY STORE, A MUSEUM, HOTELS, THE SEAFOOD PROCESSING PLANT, AND A JADE MANUFACTURING FIRM THAT USES JADE MINED LOCALLY, BUT CARVED IN THE FAR EAST TO LOOK LIKE ESKIMO CARVINGS. THOSE REGIONAL INVESTMENTS ARE BALANCED WITH WHAT ARE REFERRED TO AS STATE EFFORTS MANAGED FROM ANCHORAGE. THEY ARE SEEN AS STRICTLY BUSINESS, AS PROFIT MAKING VENTURES...

Our biggest investment is..uh..in the oil field service area. We have..uh..we have a camp at Prudhoe Bay. Uh..we have a security company that does most of its work up there. We have..uh..catering operations. Uh..we have a construction firm that..uh..works..uh..around the state. And..uh..recently..uh..uh..a company that..uh..we own a part of that's..uh..a drilling company that owns ..[clears throat].. drill rigs that work on the slope. Uh..we..we own small portion of some leases on the slope.

THERE IS MORE DEVELOPMENT IN THE ARCTIC SLOPE THAN NANA'S OWN LANDS. 1,900,000 ACRES OF SURFACE AND SUBSURFACE ENTITLEMENT, PLUS SUBSURFACE RIGHTS ON ANOTHER 365,000 ACRES. ONE IN-REGION DEVELOPMENT IS A LEAD ZINC MINE WHICH WILL IMPACT CARIBOU MIGRATION.

That even has a greater conflict than any oil development might have, a more direct conflict with the way our people live. But..uh..it's..we...we brought the question to our people, and basically..uh..told them what environmental considerations they should have and what..uh..changes that they should expect in their lifestyle. And they said, "We can't live anymore on just..uh..a land alone. We've got to have cash, too. We need the jobs. Go and develop the mine!" So we're busily developing a mine that's in direct conflict with our way of life but at the insistence of our shareholders.

SHAREHOLDERS THAT HAVE RECEIVED DIVIDENDS SINCE 1979. FROM A CORPORATION THAT SHOWED A BIT OVER $200,000 IN PROFITS FOR 1980, DOWN FROM 636,000 THE YEAR BEFORE, AND A 1980 NET WORTH OF $44 MILLION. A CORPORATION THAT ACTIVELY SEEKS TO PRESERVE WHAT HENSLEY AND SCHAEFFER CALL THE "SPIRIT OF THE PEOPLE", WHILE STILL MAINTAINING THE PROFITABILITY OF THE PEOPLES' CORPORATION.

We don't consider NANA being different than the people in the villages. NANA is made up of the people. And our goals are for all of the people.

Ø

THE CALISTA CORPORATION HAS THE SECOND LARGEST MONEY ENTITLEMENT OF ALL ALASKA NATIVE REGIONAL CORPORATIONS, 165 MILLION. A 1980 NET WORTH OF NEARLY $60 MILLION, SECOND ONLY TO SEALASKA; IT'S SECOND AGAIN TO SEALASKA IN NUMBER OF SHAREHOLDERS, 13,500; SECOND IN LAND ENTITLEMENT AFTER DOYON LIMITED; AND FIRST IN NUMBER OF VILLAGES IT OVERSEES AND IN LOSSES. MORE THAN $7 MILLION LAST YEAR.

NELSON ANGAPAK IS CALISTA'S EXECUTIVE VICE-PRESIDENT AND CHAIRMAN OF THE BOARD.

Calista Corporation is a region that's..uh..located in West..Southwest Alaska. Starting from Lime Village on down to Platinum; going along the coastal areas up to Kotlik; going..going along both river..riverine..uh..areas.. uh..Kuskokwim up to ..uh..uh.. Stony River and up to Lime Village; on the Yukon River up to ..um..uh..uh.. Russian Mission Yukon covering approximately 56,000 square miles. We have ..uh.. 56 villages ..uh.. scattered ..uh.. in an area that's about the size of State of Washington.

THE CALISTA REGION'S LAND ENTITLEMENT IS NEARLY SEVEN MILLION ACRES AND ANGAPAK FEELS THAT GETTING TITLE TO ALL OF IT WILL BE A BIG HEADACHE. PARTLY BECAUSE ONE-THIRD OF ALL LAND IN THE REGION IS SUBMERGED AND PARTLY DUE TO THE QUANTITY.

Thinking very optimistically, they're looking at approximately 150 years until such time all of the entitlements of the village corporations and/or Calista Corporation are conveyed to us.

OBTAINING THE LAND, HOWEVER, HAS NOT BEEN CALISTA'S BIGGEST HEADACHE. INVESTING WISELY HAS. IN YUP'IK ESKIMO, CALISTA MEANS, "THE WORKER". FINDING THE RIGHT WORKERS, COMPETENT MANAGERS, HAS EVADED THE CORPORATION WHICH HAS HAD BETTER THAN HALF A DOZEN CHIEF EXECUTIVE OFFICERS SINCE 1973. ALL WERE FROM THE REGION.

It was very difficult, on our part, to finally recognize a fact that ..uh.. we need..we needed a professional businessman to head a companies, as complex as Calista Corporation. And real..when we came to that realization ..uh.. we swallowed some of our pride.

We raised a lot of hell is what we did...

BEV HOFFMAN OF BETHEL IS AN ACTIVE MEMBER OF A GROUP CALLING THEMSELVES "THE CONCERNED SHAREHOLDERS", A GROUP INSTRUMENTAL IN OUSTING THE FORMER MANAGEMENT...

My sister's in Cook Inlet, right, and she gets all these wonderful checks. And in the Southeastern, their Native corporation's doing real good. And it makes you wonder, "Well, why isn't our corporation doing real good?"

The challenge there, I think, and then somewhat bullish in that that my expertise in all the various field that the Calista corporation is involved in will serve them well...

ALEX RAIDER, A CANADIAN ATTORNEY, CAME ON BOARD AS CALISTA'S PRESIDENT IN MID-1981, AND BUSIED HIMSELF TO VEST [??] SOME OF IT'S LOSING INVESTMENT, INCLUDING TRAVEL AGENCIES APPEAR IN SEATTLE THAT PREVIOUS MANAGEMENT INTENDED TO DEVELOP INTO A TOURIST FACILITY AND SHOPPING CENTER, AND A GEOPHYSICAL SUBSIDIARY WHICH CALISTA SOLD TO A VILLAGE CORPORATION IN THE REGION. NONE OF THE CORPORATION'S INVESTMENTS ARE IN BETHEL, THE AREA'S REGIONAL CENTER, NOR ARE THE CORPORATE OFFICES, A FREQUENT CRITICISM. BUT AT THE MOMENT, ALL OF THE INVESTMENTS ARE IN-STATE.

We own the Sheraton Hotel in the city of Anchorage. We have a major project in Wasilla called, "Settler's Bay Village" which is a land and residential development. And we are also involved in the fishing industry in the name of "Calista Fisheries". We think the hotel is a good investment, but one understands that a hotel doesn't turn itself around in a day. It's a long-range investment and will prove to be a very profitable one for the company. Calista Fisheries has made money consistently. Uh..Settler's Bay has had a shaky start, but that is going to be turned around, and that will also become a very successful profit center for the company. These are the three main assets that we have at this particular moment, in addition to our development of natural resources which is a future item.

NELSON ANGAPAK...

Calista Corporation has made some mistakes ..uh.. and we made our financial decisions. Uh..uh.. that's a fact. I..I'll be the first to admit that fact. But with this..with the new leadership that we have, those mistakes that we have ma..made in the past are being corrected. And it took us ..uh.. something like six years to make those mistakes.It'll..it will take some time to..to correct those mistakes, but I would think that ..uh..uh.. all the corrections necessary to make this company into a profit making corporation have already began.

CALISTA PRESIDENT ALEX RAIDER...

We will be successful, there's no doubt about that.

YOU'VE BEEN LISTENING TO THE CORPORATE WHALE: ANCSA, THE FIRST 10 YEARS. THE SIXTH PROGRAM IN A TEN PART SERIES WRITTEN AND PRODUCED BY KAREN MICHEL MCPHERSON, WITH TECHNICAL ASSISTANCE FROM PHILLIP KAKOWSKI (sp?). FUNDING WAS PROVIDED BY KUAC SPONSORS AND THE ALASKA NATIVE HUMAN RESOURCE DEVELOPMENT PROGRAM OF THE COOPERATIVE EXTENSION SERVICE OF THE UNIVERSITY OF ALASKA.

SPECIAL THANKS TO KYUK, AND MUSICIANS HERBIE VENT, BUDDY TABOR, THE KOTZEBUE NORTHERN LIGHTS DANCERS, AND JOHN ANGAIAK.

Part 1
"This 10 part series, The Corporate Whale, will listen to some of the events leading to the Land Claims Settlement, the mechanisms that were employed to manage the Act, government agencies, and Native corporations, hear how leaders assess the first 10 years, and predictions for 1991."

Part 2
"Both restrictive provisions included in the Act, what the Alaska Native Land Claims Settlement is, and how it divides up the land and the money will be discussed in this program, the second in a ten part series: The Corporate Whale."

Part 3
"In this program, the third in a ten part series, The Corporate Whale, Native leaders and others involved with the framing of the Land Claims Settlement give some of their thoughts on the corporate concept and how well that mechanism works for dividing the benefits of ANCSA: The Whale."

Part 4
"This program is the fourth in a ten part series, The Corporate Whale: ANCSA, The First Ten Years. Agency representatives and Native corporation leaders will give their perspectives on the land's aspect of the Land Claims Settlement."

Part 5
"In this program, the fifth in a ten part series, The Corporate Whale, leaders of Sealaska and Cook Inlet Region, Inc., will profile their activities in dividing the benefits of ANCSA into profits for shareholders."

Part 6
"In this program, the sixth in a ten part series, The Corporate Whale, leaders from NANA, the Northwest Alaska Native Association region, and Calista Corporation will profile their corporation's activities in managing ANCSA's benefit."

Part 7
"Both the Land Loss Formula and 7(i), the revenue sharing provision, were intended to be equalizers in the Settlement providing resource revenues to regions without rich lands and additional land to those without large populations. This program, the seventh in a ten part series, The Corporate Whale, will examine two regional corporations particularly affected by the provisions, the Arctic Slope Regional Corporation in the north and Doyon Limited in the interior."

Part 8
"In this program, the eighth in a ten part series, The Corporate Whale, village and regional corporation leaders will discuss centered approaches to managing ANCSA's land and money entitlements, and impact."

Part 9
"This program, a ninth in a ten part series, The Corporate Whale, will examine the role of the Alaska Federation of Natives and its efforts to survive and continue to be a unifying body for the corporations who manage ANCSA's benefits."

Part 10
"In this program, the last in a ten part series, The Corporate Whale, leaders involved in land claims implementation assess the bill that Barrow activist Charlie Edwardsen, Jr., Etok, once referred to as 'a new harpoon.'"

Alaska Native Knowledge Network is responsible for the transcription of this series. We would like to humbly apologize for any misspellings in advance.