GAO Reviews 12 Alaska Native Regional Corporations
Native American Contractors Association Says Markey Seeking to Fix a Problem that Does Not Exist
By MARY KAUFFMAN
January 10, 2013
(SitNews) - The Native American Contractors Association, whose members include many of the twelve Alaska Native Regional Corporations created under the Alaska Native Claims Settlement Act ("ANCSA"), responded to the Government Accountability Office's recent report and Rep. Edward Markey (D-MA) for his proposal to "fix" a problem that does not exist.
The report, "Regional Alaska Native Corporations, Status 40 Years After Establishment and Future Considerations", requested by Rep. Markey, examines the structure, history, and finances of the regional Alaska Native Corporations ("ANCs"). The Native American Contractors Association said for the most part, the report does an excellent job of outlining the history and structure of ANCs, while discussing the myriad of ways the corporations provide for Alaska Natives - their shareholders - which are unique to ANCs.
The twelve Alaska Native Regional Corporations: Ahtna, Incorporated,
The Aleut Corporation,
Arctic Slope Regional Corporation,
Bering Straits Native Corporation,
Bristol Bay Native Corporation,
Chugach Alaska Corporation,
Cook Inlet Region, Inc.,
NANA Regional Corporation, Sealaska Corporation
Source of Map: U.S. Government Accountability Office
According to the Native American Contractors Association, while the Government Accountability Office's report highlights much of the good that Alaska Native Regional Corporations perform for shareholders and employees, its focus on financial reporting requirements that do not apply to non-publicly traded companies unfortunately has created an effort to single out these closely held corporations. The Native American Contractors Association said the Alaska Native Regional Corporations have served their shareholders well, and operate in the commitment of self-determination. Congress should allow these companies to perform as Congress intended them to operate, rather than pursue legislation that does not benefit Alaska Native shareholders.
The Government Accountability Office was asked to review these corporations. The GAO report examines (1) governance practices of the regional Alaska Native corporations, (2) requirements for and oversight of the corporations' financial reporting practices, (3) benefits provided by the corporations to their shareholders and other Alaska Natives, and (4) questions to consider for the future. GAO reviewed relevant federal and state laws and regulations, as well as the corporations' annual reports, proxy materials, and other documents. GAO interviewed representatives from each of the 13 regional corporations and visited seven of the Alaskan regions.
GAO is making no recommendations in the report.
In a letter to U.S. Senator Lisa Murkowski (R-AK), U.S. Senator Mark Begich (D-AK) and to the ranking member of the Committee on Natural Resources Rep. Edward J. Markey, the GAO stated "To inform your understanding of the financial information being reported by the regional Alaska Native corporations and how these corporations are addressing the needs of Alaska Natives, you asked us to describe various corporate practices. This report examines (1) governance practices of the regional Alaska Native corporations, (2) requirements for and oversight of the corporations’ financial reporting practices, (3) benefits provided by the corporations to their shareholders and other Alaska Natives, and (4) questions to consider for the future."
The Government Accountability Office examined the corporations’ annual shareholder reports from 2010 and proxy materials from 2011(the most recent years for which consistent information was available across the corporations). The Government Accountability Office also asked SEC staff to provide observations on the corporations’ 2010 annual shareholder reports. The Government Accountability Office conducted aperformance audit from October 2011 to December 2012 in accordance with generally accepted government auditing standards.
Responses provided on behalf of the corporations made several points about their financial reporting and operations that are more fully discussed in the report.
However, the Native American Contractors Association (NACA) is disappointed with the focus the Report places on financial reporting, which they say is misguided. They say there are two ways the Report is flawed.
First, the Report fails to realize and recognize the mandate of self-determination that Congress built into the Alaska Native Claims Settlement Act. NACA's Executive Director, Kevin Allis stated, "It's this important policy of 'self-determination' that shapes the structure of the Regional Corporations, whereby shareholders that are all Alaska Natives vote to elect boards of directors to govern the ANCs." He continued, "Second, with respect to financial reports, the Report does not properly recognize the fact that the Regional Corporations all follow generally accepted accounting principles (GAAP), have annual audits conducted in accordance with generally accepted auditing standards (GAAS), and are not entities whose shares are publicly traded." The tenor of the Report could cause a reader to surmise that something is amiss, based solely upon the flawed notion that the Regional Corporations are not filing reports under securities laws that were designed for publicly-traded entities.
In a news release, the Native American Contractors Association said despite the strong accounting principles utilized by Alaska Native Corporations, the Report and Rep. Markey attempt to find something wrong, insinuating that the Regional Corporations are not transparent to shareholders, nor to the state agency that regulate all corporations in Alaska. Federal securities laws were never designed to apply to closely held corporations, much less Alaska Native Regional Corporations said the association.
While the Report focuses greatly on financial reporting, it did not include any findings, nor provide any recommendations for Congress to enact. Unfortunately, Rep. Markey announced plans to introduce legislation to "fix" a problem that does not exist and Allis cautioned, "the Report did not find any fraud or suspicion of fraud with how the Regional Corporations manage their operations, and how they generate shareholder value. I do not understand what purpose such legislation would serve."
NACA is a national Native advocacy organization based in Washington, D.C., and represents Tribal, Alaska Native Corporations, and Native Hawaiian Organizations across the country. NACA's members represent and provide benefits for nearly 700,000 Tribal members, Alaska Natives, and Native Hawaiians.
In 1971, the Alaska Native Claims Settlement Act was enacted to resolve long-standing aboriginal land claims and to foster economic development for Alaska Natives. This federal law directed that corporations be created under Alaska state law, which were to be the vehicles for distributing the settlement. As directed by the act, 12 for-profit regional corporations were established, representing geographical regions in the state. Later, a 13th regional corporation was formed to represent Alaska Natives residing outside of Alaska. Eligible Alaska Native applicants who were alive on December 18, 1971, became shareholders in the corporations. The Settlement Act, as amended, authorizes the corporations to provide benefits to shareholders and to other Alaska Natives.
On the Web:
Download the GAO Report: Regional Alaska Native Corporations, Status 40 Years After Establishment and Future Considerations (76 pages, pdf)
Sources of News:
Native American Contractors Association
U.S. Government Accountability Office
E-mail your news &
photos to email@example.com
Contact the Editor
Publish A Letter in SitNews
Stories In The News
photographs that appear in SitNews may be protected by copyright
and may not be reprinted without written permission from and
payment of any required fees to the proper sources.