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ANCSA Regional Association Responds to US Senator Claire Mccaskill’s Call for Oversight of Alaska Native Corporations

(Anchorage, Alaska) – The Alaska Native Claims Settlement Act (ANCSA) Regional Association is surprised and disappointed that U.S. Senator Claire McCaskill has rewnewed her attacks targeting Alaska Native Corporations (ANCs) and their participation in federal government 8(a) contracting. As Chair of the Subcommittee on Financial & Contracting Oversight, Senator McCaskill “demanded answers from the Small Business Administration (SBA) about rules designed to improve oversight of Alaska Native Corporations” focusing on the regulations implemented in 2011 regarding follow-on contracts, joint ventures and benefits ANCs provide to their shareholders. Senator’s McCaskill’s recent press release is indicative of the ongoing misperceptions and lack of understanding surrounding ANCs and their participation in federal government 8(a) contracting.

"Over the past three years, ANCSA corporations have experienced losses in federal contract revenues which have had a significant impact on shareholder benefits including dividends, elder benefits, employment, scholarships, and other economic, social, and cultural development programs that were part of the original intent of the business development model required by ANCSA. Despite such losses in contracting revenues, ANCSA Corporations remain dedicated to providing economic benefits back to their communities," said Jason Metrokin, Chairman of the Association.

While 8(a) procurement is important to ANCSA Corporations, it still represents a mere 1.26 percent of all federal contracting. During the last four years, the ratio of 8(a) to total revenue has ranged from a high of 45.67 percent in 2009 to the current ratio in 2012 of 35 percent. With typical profit margins on federal government contracts of less than five percent, 8(a) contracts are not a path to great wealth, but they have been a successful path to cash flow and capacity development within the ANCSA Corporations – Regional and Village.

In 2012 the U.S. Government Accountability Office (GAO) did an extensive review into ANCs governance practices and benefits provided to shareholders. The GAO’s Regional Alaska Native Corporations (ANCs): Status 40 Years after Establishment, and Future Considerations report summary states: “GAO found that the corporations provide a wide variety of monetary and nonmonetary benefits to their shareholders and other Alaska Natives. Monetary benefits include shareholder dividends, Elder benefits, scholarships, memorial benefits, shareholders’ equity, and charitable donations. Nonmonetary benefits – often offered in partnership with village corporations, tribal organizations, and nonprofit organizations within the region – include employment opportunities, cultural preservation, land management, economic development, and advocacy on behalf of Alaska Natives and their communities.”

Among the Alaska Native benefits provided by ANCs as outlined in the ANCSA Economic Impact Report from 2009-2012:

• ANCSA Regional Corporations paid a total of $678.4 million in dividends to shareholders.
• Alaska Native Regional Corporations paid out an average of 62.4 percent of net income to dividends, social/cultural programs, and scholarships. From 2010-12 this has averaged nearly 75 percent of net income — at a time when the average American company dividend payout rate is 32 percent.

About the ANCSA Regional Association: Incorporated as The Association of ANCSA Regional Corporation Presidents and CEOs, Inc.; and includes a membership of the chairperson, president, or CEO/COO from each of the 12 Regional Native Corporations, as well as the president of the Alaska Federation of Natives. The Association exists to promote the understanding and intent of ANCSA and the role of the Regional corporations in creating a sustainable socioeconomic future for Alaska Native people.

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