The Corporate Whale: ANCSA, The First 10 Years Program
Program 5 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.
UNDER THE TERMS OF THE ALASKA NATIVE LAND CLAIMS SETTLEMENT ACT,
ANCSA, THE $962.5 MILLION AND NEARLY 44 MILLION ACRES OF LAND GIVEN
IN EXCHANGE FOR RELINGUISHING ABORIGINAL LAND CLAIMS, WERE TO BE
DISTRIBUTED TO ELIGIBLE ALASKA NATIVES, SHAREHOLDERS TO A BUSINESS
CORPORATION. TWELVE REGIONAL PROFIT-MAKING CORPORATIONS WERE MANDATED,
ARRANGED ROUGHLY ALONG ETHNIC DIVISION, WITH A POSSIBILITY OF A
13TH FOR ALASKA NATIVES LIVING OUTSIDE THE STATE. IN ADDITION,
EACH OF THE MORE THAN 200 VILLAGES LISTED IN THE BILL WAS REQUIRED
TO FORM EITHER PROFIT OR NON-PROFIT CORPORATIONS. ALL CHOSE THE
PROFIT OPTION.
INEVITABLY, AS WITH ALL BUSINESSES, SOME HAVE BEEN MORE PROFITABLE
THAN OTHERS. PERHAPS, MOST REMARKABLY, ALL HAVE SURVIVED THE TEN
YEARS SINCE PRESIDENT RICHARD NIXON SIGNED THE ALASKA NATIVE LAND
CLAIMS SETTLEMENT ACT ON DECEMBER 18, 1971. [DECEIVING] PREDICTIONS
THAT SOME AT LEAST WOULD SOON GO BACKRUPT. BERING STRAITS REGIONAL
CORPORATION, BASED IN NOME, NEARLY DID IN 1978, AND CONTINUES TO
FLOUNDER. AND THE 13TH REGIONAL CORPORATION, HEADQUARTERED IN SEATTLE,
WASHINGTON, RECENTLY DISCONTINUED NEARLY ALL OPERATIONS. DEBT PAYMENTS
WERE NEGOTIATED IN ORDER TO AVOID CLOSURE, IN ATTEMPT TO TURN AROUND
FROM 1980 LAWSUITS EXCEEDING $9 MILLION. BUT THERE ARE SUCCESSES
AS WELL, BIG ONES. NOTABLY SEALASKA CORPORATION IN JUNEAU, THE
FIRST OF THE CORPORATIONS ESTABLISHED UNDER ANCSA TO MAKE THE FORTUNE
1000.
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.
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
The [Growth] Star was a newcomer, Sealaska Number 951, a seafood
products concern headquartered in Juneau, Alaska. It's sales soared
684% from 17.6 million in 1979 to 137.9 million last year. For
several years, it dabbled cautiously....
FORTUNE MAGAZINE, IN ITS ANNUAL ASSESSMENT OF THE CORPORATE GIANTS
OF THE COUNTRY, GAVE THAT REPORT IN THE JUNE 15, 1981, ISSUE. SEALASKA
HAS MORE SHAREHOLDERS, CLOSE TO 16,000 TLINGIT, HAIDA, AND TSIMSHIAN
INDIANS, AND GREATER NET WORTH, ALMOST $200 MILLION, THAN ANY OF
THE 13 REGIONAL NATIVE CORPORATIONS. THE CORPORATE OFFICE IS LOCATED
IN ITS OWN HIGH RISE BUILDING IN THE STATE'S CAPITOL, JUNEAU. IN
1959, THE COURT OF CLAIMS AWARDED THE TLINGIT AND HAIDA INDIANS
A CASH SETTLEMENT FOR LANDS TAKEN. ANCSA IS THE SECOND LAND CLAIMS
SETTLEMENT. TWELVE VILLAGES ARE WITHIN THE REGION, WHICH IS ELIGIBLE
TO RECEIVE 280,000 ACRES OF LAND IN SOUTHEAST ALASKA, INCLUDING
TIMBERLANDS AND THE TONGASS NATIONAL FOREST.
BYRON MALLOT, A PAST PRESIDENT OF THE ALASKA FEDERATION OF NATIVES
AND FORMER STATE COMMISSIONER OF COMMUNITY AND REGIONAL AFFAIRS,
IS THE CHAIRMAN OF THE BOARD...
Sealaska had standing timber, a valuable asset that could be taken
to market very quickly. Uhh..and..uh..having 16,000 shareholders
under the formulas of ANCSA, we got the largest chunk of cash.
And so Sealaska had a real opportunity to marshall and utilize
its assets quickly..uh...that most other Native corporations..uh..didn't.
PAST PRESIDENT OF THE ALASKA FEDERATION OF NATIVES, CURRENT PRESIDENT
OF THE ALASKA NATIVE FOUNDATION, AND SEALASKA BOARD MEMBER ROGER
LANG...
We happen to be in fish and timber. And there's no conjecture
about timber. [Them] things are standing there, you don't have
to wonder how many trees you got, you go out there with a counter
and you count them, ya know. And if the resource it can be marketed
and developed quickly. It's not like oil, gas, or..or gold or any
of the...either..uh..any of the subsurface, you know, so. Our resources
are visible, easy to get to, and..uh..easy to..easy to get into
business with, build roads and cut trees.
THERE ARE OTHER BUSINESS OPERATIONS BESIDE SEALASKA TIMBER CORPORATION
AND OCEAN BEAUTY SEAFOODS. SEALASKA ALSO OWNS OR HAS INTEREST IN
ALASKA [BRICK] COMPANY, UNITED BANK ALASKA, A WHOLLY NATIVE OWNED
BANK, SEALASKA BUSINESS INVESTMENT CORPORATION, AND A ONE PERCENT
INTEREST IN BEAUFORT SEA OIL AND GAS LEASING IN CONJUNCTION WITH
SOHIO/BP AND THREE OTHER NATIVE CORPORATIONS. BUT PROFITS AREN'T
THE ONLY MOTIVE. ROGER LANG...
No, there's [not anymore] factors into...to what we do than pure..pure
profit. If, for instance, Sealaska wanted to be [truly] a profit
mode, you have nothing at all to do with fish. And we have $58
million tied up in that end. And it happens to be something that
our people are good at, that our people can work in, and..uh..that
kind of stuff. That's a large part of what we did.
BUT AS IN ANY CORPORATION, THERE ARE DISGRUNTLED
SHAREHOLDERS WHO WOULD PREFER LESS ALTRUISM AND MORE CASH IN
THE FORM OF DIVIDENDS.
SITKA COMMUNITY ASSOCIATION EXECUTIVE DIRECTOR, SHEE ATIKÁ CORPORATION
DIRECTOR, AND SEALASKA SHAREHOLDER ANDY HOPE III...
They didn't give out any of it out in dividends. You know, Sitka
come out and made 5.7 million in..uh..profits last year. And they..uh..gave
900,000 of that as dividends. Sealaska made 5.9, it gave the village.
SHAREHOLDER MARY ITTA WILLIAMS...
The things that have going like a big company..uh..and are they
really..are we really getting things out of this? Are we really..um..going
to get something out of this, I mean eventually?
ACCORDING TO MALLOTT PEOPLE ARE GETTING A GREAT DEAL NOW. SEALASKA'S
DEVELOPMENT TEND TO IMPACT VILLAGE LANDS. AND RATHER THAN PROCEED
IN A MANNER THAT MAY BE COST EFFECTIVE, BUT ENVIRONMENTALLY DESTRUCTIVE,
SEALASKA CHOOSES TO SPEND MORE MONEY AND MINIMIZE THE NEGATIVE
EFFECTS TO SAVE TIMBER HARVESTING.
You know, if you're a Native corporation, you come down on the
side of the Native even if it does impact your..uh..bottom line.
Sealaska is trying to be the kind of business corporation that
can be utilized as a tool by our shareholders as Native people.
Native people still have not been able to grasp the brass ring
of the American Merry-Go-Round. Uh..and..uh..and that's what we're
setting out to do.
CLOSE BEHIND SEALASKA IN TERMS OF PROFITABILITY IS THE COOK INLET
REGION, INCORPORATED, LOCATED IN AN ARCHITECTURALLY COMMANDING
BUILDING IT OWNS NEAR DOWNTOWN ANCHORAGE, THE STATE'S LARGEST CITY.
CIRI, AS ITS CALLED, HAS A SET OF AMENDMENTS TO ANCSA DEVOTED TO
ITS PARTICULAR LAND NEEDS. COOK INLET REGION, INCORPORATED, 6,300
SHAREHOLDERS ARE PRIMARILY URBANS RESIDENTS, SO SOME LIVE IN VILLAGES
AND OTHER SITES NEARBY. IN 1980 CIRI'S NET WORTH WAS A BIT OVER
$46 MILLION AND NET PROFITS FOR THAT YEAR WERE $5.7 MILLION, UP
FROM 3.4 MILLION THE YEAR BEFORE. A YEAR THAT CORPORATION LED ALL
OTHERS CREATED UNDER ANCSA. ROY HUHNDORF HAS BEEN PRESIDENT SINCE
1975...
Our geographic area is the southcentral part of Alaska. Um..the..the
land entitlement of the region and its villages is approximately
2.3 million acres. Um..we have seven villages..uh..each entitled
to..uh..some of the surface estate. Uh..essentially about a million
acres of the..a million of the surface acres of the 2.3 million
acres..um..are..uh..part of the village entitlement.
ONLY 1,500 OF CIRI'S SHAREHOLDERS LIVE IN VILLAGES AND ARE ENROLLED
IN VILLAGE CORPORATIONS. THE REST ARE SO CALLED AT-LARGE AND RECEIVE
PAYMENTS FROM THE SETTLEMENT DIRECTLY RATHER THAN HAVING THEM DIVERTED
THROUGH VILLAGE CORPORATIONS. CIRI SHAREHOLDERS, BEING PRIMARILY
URBAN, ARE ALSO LESS INCLINED TO URGE CORPORATE LEADERSHIP TO GET
INVOLVED IN THE SUBSISTENCE ISSUE, OR [FEELING] STRONGLY ABOUT
THE BALANCE BETWEEN RESOURCE DEVELOPMENT ON CORPORATE LANDS VERSUS
ITS IMPACT ON TRADITIONAL LIFESTYLES.
We're going to be careful, and we're worried about how their land
is used. But..but..uh..we..we have..um..um..slightly different
priorities. Uh..for example..um..um..it's quite likely that CIRI
might develop a mineral..uh..resource on its land before another
region might de..might develop a mineral resource on..on village
land in rural Alaska. And this is because the village..the village
will no doubt be consulted, and they may have some objections to..to
bringing development into their subsistence area. Um..here we..we
don't see much of that kind of a conflict.
A LARGE MEASURE OF COOK INLET'S CONFLICT IS CENTERED ON THE LAND,
ON GETTING THE ANCSA ENTITLEMENT.
In our case, unlike other regional corporations, much of the land
which was prescribed for..for the villages and the regions had
already been patented to the state and is therefore not..not available
for selection by us. So therefore we were thrown into this..into
this..uh..category..um..of discretion that the Secretary had. And
he..he would..um..as the Act requires, withdraw land of similar
kind and character, of which we would..um..we would select our
entitlement. And of course we disagreed with how he exercised that
discretion. We ultimately went to court..um..and we settled..um..out
of court..um..by engaging in a three-way land exchange, the state,
the federal government, and CIRI in 1976. Um..it was challenged
in court subsequently. Um..it cleared the courts in nine..late
1978. And we have been in the process of implementing the exchange
since then.
INSTEAD OF THE UNACCEPTABLE, INACCESSIBLE MOUNTAINTOPS AND GLACIERS,
CIRI HOLDINGS NOW INCLUDE SURPLUS FEDERAL PROPERTY IN THE SOUTHEAST
AND IN THE INTERIOR, SUBSURFACE LANDS IN THE KENAI MOOSE RANGE
WITH GOOD COAL, OIL, AND GAS POTENTIAL, AND THE BELUGA COAL FIELD.
CIRI is primarily a..a natural resource company, that is an energy
and minerals company. Um..we have broadened that definition of..of..uh..of
the corporation's business somewhat by adding that we are in the
business of energy and minerals and service industries that are
attendant to the development of..of these resources, such as oil
and gas drilling..um..engineering and design of..um..of remote..um..energy
related facilities. Um..we've recently become involved in..in specialized
pipeline construction plus resource development are our main areas
of..of interest. Additionally, the fourth area is naturally real
estate. We have some commercial real estate..uh..and..uh..and that
is a part of our portfolio. But of course the..the real profit,
the real cash flow from mineral development will come if the..if
development of a mine occurs and you begin to get production payments.
Or development..uh..or development continues and expands in oil
and gas..in the area of oil and gas and coal.
NEXT YEAR ROY HUHNDORF EXPECTS COOK INLET REGION, INCORPORATED'S
PROFITS TO TOP $10 MILLION AND SHAREHOLDERS CAN ANTICIPATE DIVIDENDS.
I think this is the net, the end result of..of those early decisions.
Uh..uh..there's been a number of correct decisions made by people
at CIRI..uh..uh..since the Act had passed in 1971..and..and then..and
a lot of luck. A lot of luck rolled into it. We're..naturally we're
located right..uh..in Southcentral Alaska where the majority of
the people live and therefore..uh..the bulk of the economy is.
And..and we should be expected to do better than..than the average
corporation, I suppose.
YOU'VE BEEN LISTENING TO THE CORPORATE WHALE: ANCSA, THE FIRST 10 YEARS. THE
FIFTH 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 DAVID HARDING, JOHN NEWSTROM AND CATHY CODY
OF KCAW, PATTI GINSBERG OF KTOO, AND MUSICIANS HERBIE VENT, BUDDY
TABOR, THE GAJA TEEN DANCERS, AND WILL ACKERMAN. 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.
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