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Friday, October 7, 2011
Like Hawaii, Alaskan Native Corps Front for Government Contractors while Natives Get Short-Changed
By Selected News Articles @ 1:59 AM :: 6492 Views :: Energy, Environment, National News, Ethics

Washington Post: In deals between Alaska corporation and D.C. area contractor, a disconnect

by Robert O'Harrow Jr. Washington Post Staff Writer Friday, October 1, 2010

(Just substitute “Hawaiian” for “Alaskan” and you can see what CNHA is all about.)

…The mandate of the Alaskan Native Corporation (ANC) program is to improve life for Alaska's struggling indigenous people. But much of the money has gone instead to nonnative people and companies in the lower 48 states.

The story of Eyak provides a case study of how Alaska native corporations and their subsidiaries have been used to pass on work to large Washington area firms, sometimes under circumstances that have been questioned, a Washington Post examination found.

One nonnative executive at Eyak Technology wrote to an established firm as they discussed how to split profits that they had to take care to avoid activity that might be construed as "contractual fraud," according to an internal e-mail obtained by The Post.

"We cannot put our Company at risk of being accused of [being] a front for a large company, end up on the front pages of the Washington Post," the executive wrote to a vice president at the large contractor in Fairfax County.

Eyak Corp. is one of more than 200 ANCs formed four decades ago to settle native land claims. Through a Small Business Administration program, they are able to receive federal contracts of unlimited size without competition.

In 2002, Eyak teamed with the contractor, GTSI Corp., to form Eyak Technology, better known as EyakTek. It has become one of the top 100 federal contractors, racking up about $1 billion in set-aside contracts from the Pentagon and other agencies for communications equipment, information technology, engineering and health-care services, said Paul Murphy, a senior analyst at Bloomberg Government.

All ANCs are exempt from oversight by the U.S. Securities and Exchange Commission. Eyak also does not have to file documents with Alaska state financial regulators because it has fewer than 500 native shareholders. As a result, much of the information about EyakTek's finances, including executive salaries, is not public.

The Post examination drew its picture of Eyak from interviews, visits to Cordova and Eyak's corporate office in Anchorage, an Eyak annual report, the IRS filings for Eyak's private foundation, internal Eyak and GTSI documents contained in court filings, and financial filings from GTSI, a public corporation.

Eyak and EyakTek officials have cited the benefits they say are flowing back to Alaska as examples of "fulfilling our promise to provide socio-economic benefits for our community of native shareholders." In statements, the companies said they have provided 126 scholarships, 14,500 used books and warm-up suits for a youth basketball team. Last year, EyakTek donated $266,000 to the corporation's foundation, according to IRS documents.

Last year, when EyakTek recorded $409 million in federal revenue and Eyak reported a payroll of almost $18 million for all of its operations, the native shareholders got direct dividend payments in December totaling about $109,000, according to Post analysis of data contained in a copy of the company's annual report obtained by the newspaper.

Some of Eyak's 428 shareholders said that did not seem like a lot.

"We have no idea how much they're making or who they are," said shareholder Dune Lankard, a 51-year-old native and environmental activist who lives a few miles from the yellow building in Cordova. "Our native culture has been replaced by the money culture. So where's the money?"

read … Washington Post

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