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Sealaska and corporate socialism

At a recent fundraiser in New York City, Rosita Worl was telling a lawyer from Salomon Brothers about her unusual corporate employer: Sealaska, she explained carefully, is required by federal law to share its profits with less successful Native corporations in Alaska.

"My dear," the lawyer cried out, "that's so un-American!"

"In the corporate world, I don't even know that people fathom this is part of our reality," said Worl, a board member of Sealaska Corporation for over a decade and president of the Alaska Heritage Institute, a non-profit founded by Sealaska in 1981.

Worl knows only too well the dual face of Native regional corporations in the north. Organized to make money like any red-blooded American business, they must also share a part of profits with their less fortunate peers. The result is a strange hybrid that intrigues even Worl, a well-traveled anthropologist with a Ph.D. from Harvard. She calls the odd arrangement "corporate socialism."

The Alaska Native Claims Settlement Act (ANCSA), which created the corporations in 1971, stipulates that they share 70 percent of profits from subsurface and timber sales with resource-poor regional corporations. Those dealing in timber "almost have to double their harvest because of that 70 percent requirement," said Worl, speaking recently from her office in Juneau. "It makes the corporations almost a government entity. It's certainly not a corporate feature to share 70 percent of your profits."

The regional Native corporation for southeast Alaska, Sealaska is owned by more than 16,000 Tlingit, Haida, and Tsimshian shareholders. In 1971, each qualified Alaska Native received 100 shares of stock in a regional corporation, of which Sealaska has the largest bloc of owners. Sealaska's land base, located in the resource-rich Alaskan panhandle, includes 290,000 acres of merchantable timber.

Even with diversified investments timber, telecommunications, plastics in Mexico, and Indian gambling in California, profits at Sealaska have been spotty. The company posted losses of $120 million in 2000 and $22 million in 2001. Last year, Sealaska reported a $40.5 million profit, however, and paid a dividend this April, news that makes Worl and her colleagues buoyant.

Does the complicated profit-sharing formula really work? "We ended up having to throw the lawyers out and said 'we'll figure it out ourselves,'" Worl laughed. All the corporations, she adds, live by the agreement. "At least now they understand the process, and they're making the process work."

Another innovation is Sealaska's shareholder hire policy. The corporate office employs 79 percent shareholders, Sealaska Heritage Institute, 73 percent. If subsidiaries don't employ a significant percentage, said Worl, who is Tlingit, they jeopardize future contracts. Recently, Sealaska adopted an incentive plan to enhance participation. "I don't know of any other corporation that does that."

Since ANCSA stock isn't publicly traded, Native stockholders share many political interests. Sealaska, said Worl, has been at the forefront of protecting subsistence advocacy, a key issue for Alaska Natives since ANCSA was enacted. "Even when [the company] experienced financial losses, it was still contributing to the AFN [Alaska Federation of Natives] coffers to fight for maintaining subsistence protections."

The non-profit Sealaska Heritage Institute channels corporate money to cultural and educational projects, awarding more than 2,000 college, university and vocational scholarships since 1981. Native non-profits linked to corporations also provide governmental services to Alaskan villages and are among the largest statewide employers.

"What we can bring to our brothers and sisters on the reservation is to perhaps show them what can be done by corporations and non-profits alike," advised Worl. And the exchange goes both ways, she pointed out, noting that Sealaska studied the successes of the Pequot in Connecticut while developing their own portfolio.

"There's some misunderstanding about Native corporations from the lower-48's Indian tribes," she confessed. "But those that have come here and worked with us, their concern about corporations ? a lot of that goes away when they've been able to see how we operate."

In June, Worl came to the lower-48 herself to accept a "Women of Courage" award from the National Women's Political Caucus in Washington, D.C. Recognized for her leadership as a scholar, educator, and Native activist, she joined the likes of former U.S. Attorney General Janet Reno to receive a tribute for which she feels "deeply honored and awed."

The long-term fate of Alaska Native corporations is uncertain. Unlike typical corporations, ANCSA entities were artificially created by legislation rather than market demand. Stock is inherited rather than purchased and diluted in value if the population, and number of shareholders, grows. To date, some regional corporations have flourished where others have floundered.

Worl considers it "unfortunate" the National Congress of American Indians doesn't admit ANCSA corporations as members. But "we're moving toward a better relationship," she said confidently. "I would be remiss if I didn't say that we didn't have some tensions between tribal governments and Native corporations. They're there. We can't pretend that they don't exist."

Still, she added firmly, "I know ? that corporations support tribal sovereignty." While a 1998 Supreme Court decision ruled that ANCSA lands are not considered a part of Indian country, numerous federal acts suggest otherwise, Worl affirmed. Such a designation, she says, would help Alaska Natives in their own quest for self-determination.

"There is always this kind of attitude that Alaska Natives aren't really tribes, that they're really different. We see that in efforts where [Washington] tries to diminish our rights such as hunting and fishing. If Congress just made it clear ? that indeed we have a unique political status and there shouldn't be any question about it, definitely it would make life easier."

Of sovereignty as an ultimate goal, Worl said pragmatically, "we've taken a different road, a different model, but we are trying to make it work for us." It's time, she believes, to stop thinking about tribes and corporations as opposites. "Native people are trying to integrate their cultural values into those institutions." Which doesn't seem so very un-American after all.