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Native 8(a) Works response to Senator McCaskill’s Native 8(a) Proposal

The genesis of Senator McCaskill’ proposal is misinformation. To gut Native 8(a) does nothing but take away opportunity for Native people across the country.  The proposal is misguided and wrong.

· Senator McCaskill has stated she would rather just give money directly to shareholders. Her suggestion of welfare is not the answer. Rather than suggesting that the solution is to hand out money we offer that the real solution is to continue a program that works, creating business growth and the right to make our own decisions.

· Native 8(a) Works is taken aback by the deliberate ignorance of those like Senator McCaskill who do not understand the unique way of life in rural Alaska, the Alaska Native Claims Settlement Act and/or even the Native 8(a) program and who choose to ignore available data.

· Native 8(a) Provides Taxpayer Value and is working as intended, providing American taxpayers’ value, helping grow the economy and creating opportunity for an impoverished people. Highly experienced government contracting officers, federal auditors and other officials who understand procurement law, regulations and the marketplace, scrutinizes all Native 8(a) contracts. Native 8(a) contractors are awarded work based on price, quality and past performance, providing high-caliber work at great value. When these corporations do well, they help large groups of people, not a single owner or person.

· Calculating benefits to shareholders through Native 8(a) is much more complex than dividing $720 million by 130,000 people. All Native entities approach providing benefit and opportunity for shareholders differently. The simplistic and inaccurate calculation reaching $615 per person per year has several flaws: This calculation does not account for:

    • Stock dilution through shareholder growth
    • Double-counting of shareholders who are members of both regional and village corporations
    • Benefits provided to non-shareholder Alaska Natives (also known as descendants)
    • Benefits by many ANCs are not included in the data
    • The extraordinary growth in shareholders’ equity (meaning the underlying increased value in the corporations) over the last 10 years; or
    • Number of shareholders in ANCs not engaged in 8(a) contracting.

· The timing of Senator McCaskill’s proposal (while Congress is out of session, the changes to the SBA rules are still pending, and legislation would be placed before a lame duck Congress) is sensationalist.  She appears to be driven by headlines, not good public policy.  At this point, there are no others supporters to her proposal.

· Because of participation in the 8(a) program, benefits from Alaska Native Corporations (ANCs) to Shareholders and descendants have grown substantially over the past decade. ANC shareholders have not only received dividend payments but have also been the recipients of college scholarships, apprenticeships, internships and cultural preservation programs. Additionally, profits from ANCs are directed toward business growth, diversification, and business investments, which will ensure a place for the next generation. With business success comes the opportunity for Native people, some for the first time, to have a voice in their own economic future.

Native 8(a) is about opportunity and hope. It is a hand up, not a hand out.

The numbers tell the story! These statistics come from the Alaska Native Corporations Economic Data 2010 report, compiled and published by the ANCSA CEOs Association.

· In 2008, the 12 regional corporations distributed $171 million in dividends to shareholders, representing 66 percent of net profits.

· Of the 13,848 jobs in Alaska provided by these regional corporations, Alaska Native people held 3,577 of those positions, or almost 26 percent of their Alaska employment base.

· Twelve regional corporations paid shareholder dividends in 2008.

· In 2008, $11.1 million in contributions were made to more than 3,200 scholarship recipients as well as endowments.

· These statistics do not take into consideration the significant contributions and employment numbers of village corporations.

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