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Change Is a Necessity for Sealaska Board

A column by Ray Austin that calls for for change on the Sealaska board.
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December 18, 2011 marks the 40th anniversary of the passage of the Alaska Native Claims Settlement Act (ANSCA), the anniversary of the “great experiment” that failed many Alaska Native corporations (ANC) shareholders, but allowed a few to benefit. I speak as a shareholder of Sealaska and Goldbelt corps.

In 1971, when Sealaska was formed, I was 18 years old. I remember my father talking of the “land claims” and how this deal with Congress would be for the good of the Tlingit people. At that time, my father was 59 years old, one year older than I am now. His father, Robert Austin, the former clan leader of the Shangukeidi (Thunderbird) supported efforts in the struggle for land rights and in 1947, our people turned to the U.S. courts by filing a land claims lawsuit in the U.S. Court of Claims. He died eight years prior to the birth of Sealaska. Two generations have passed away with optimism the land claims would deliver hope and a brighter future for the Tlingit people.

In 1982, Sealaska filed for bankruptcy, two years later my father passed away. In the following decades the decline continued for Ocean Beauty, SEABIC, Alaska Brick Company, SEACAL, Triquest, Fairbanks Sand & Gravel, Alaska Wireless, Sealaska Permanent Fund (SPF) and the $142 million losses in 2001. The SPF started with $68 million in 1986, $100 million in 1996, and $24 million in 2000 with a declining pattern of financial losses.

In perspective, there are not a lot of jobs created for shareholder hire, nor are there enough ANC businesses created that hire Native shareholders. Based on 2009 data, when the national average is at 9.5 percent, the Alaska Native unemployment rate is still twice as high. Today, there are more Native people that have attained college degrees compared to 1971. Alaska Native median income, based on 2007 data, shows that Natives earned $42,000, compared to an all-Alaska income of $62,000. In 2007, there were 122,000 Native Alaskans or roughly 20 percent of the Alaska population. Alaska Natives are much more likely to go on to college now than in 1970. About 28 percent of Native adults have some college credit, compared with 6 percent in 1970. And 8 percent have earned four-year degrees, compared with just 1 percent in 1970. The percentage of Native college graduates still falls far short of the U.S. average.

My intent is to raise shareholder awareness that we have been denied opportunities in education and employment for too long, and this needs to change. How can we continue on this pattern of business failures by electing the same board members that lead us to this path? Sealaska’s financial losses directly affect shareholders by restricting education and employment opportunities. The statistics prove that ANCs need progressive goals that support more funds for shareholder education and to create employment opportunities for shareholder hire. Education and employment has to be the highest priority of ANC businesses. Brighter futures can be created by all ANC. ANCSA laws need to be passed that take nontaxable money off the top that is specifically earmarked for shareholder education, which can be based on a provision of ANCSA, called Section 7(i), which requires that regional corporations share 70 percent of their resource revenues from their ANCSA lands among the corporations. A large percentage of this money needs to be allocated to educating shareholders to improve job skills in trade, technology, business or higher education.

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There is a need for diversification of our Sealaska board and this can only be accomplished by electing individuals that want change and diversification. Sealaska shareholders are the owners of the corporation; we have the power to elect board members that can be catalysts for change for the Sealaska board. This change has to be made to benefit our children, and their children. Our course to change needs to include means to educate our children and to ensure they succeed in higher education. Change can only happen when shareholders decide to elect their own board members, and do away with management-sponsored candidates.

Byron Mallott was quoted as saying the biggest danger facing Native corporations “is that of surviving in the present, because of the high expectations of shareholders that came from passage of the claims settlement, and the short-term inability of corporations to meet those expectations.”

It is evident that the Native corporations failed to meet shareholder expectations in short- and long-term goals. It is time for shareholders to benefit, not management or the 8(a) middle man, or the subsidiary. The 40-year failures speak for themselves, and the focus needs to be averted to improving education and shareholder hire. Ike Cropley was correct in his February 2001 letter to the Juneau Empire when he wrote, “All ANSCA created was an elite, wealthy group of Natives who are on the Board of Directors, and their hired management, while the vast majority of Natives live below the poverty line. This should not be so.”

The biggest danger facing shareholders is business failures and ignoring ways to improve education and employment opportunities. Look at our Sealaska financial record, the high expectation of shareholders has long passed and the board members have proven their inability to meet the expectations of the shareholders and we cannot afford to continue this path.

Ray Austin is a Sealaska and Goldbelt shareholder who lives in Albuquerque, N.M.