RDC’s 23rd Annual Conference Presentations
Norman Ream, President, The 13th Regional Corporation, Seattle, WA
GOOD MORNING LADIES AND GENTLEMEN. I CONSIDER IT A GREAT HONOR AND PRIVILEGE TO APPEAR BEFORE YOU TODAY. I WILL BE SPEAKING A LITTLE ABOUT THE ALASKA NATIVE CLAIMS SETTLEMENT ACT IN GENERAL, AND THEN MORE SPECIFICALLY ABOUT THE 13TH REGIONAL CORPORATION. IT IS PROBABLY THE LEAST KNOWN OF THE CORPORATIONS ESTABLISHED UNDER ANCSA.
CONGRESS PASSED ANCSA IN DECEMBER 1971. ANCSA CREATED 12 NATIVE REGIONAL CORPORATIONS FOR THE 12 TRADITIONAL NATIVE REGIONS OF ALASKA, AS WELL AS MORE THAN 200 VILLAGE CORPORATIONS AND LATER THE 13TH REGIONAL CORPORATION. THE 13TH IS AN ALASKA CORPORATION ESTABLISHED FOR NON-RESIDENT ALASKA NATIVES.
ANCSA HAS BEEN REFERRED TO AS "THE GREAT EXPERIMENT" BECAUSE IT ESTABLISHED "FOR PROFIT" CORPORATIONS INSTEAD OF THE TRADITIONAL RESERVATIONS, AND IT ALLOWED FOR PROPERTY OWNERSHIP AND WAS NOT TO BE ADMINISTERED BY THE BUREAU OF INDIAN AFFAIRS. THIS WAS AN EXPERIMENT ON A LARGE SCALE AND A RADICAL DEPARTURE FOR CONGRESS. PREVIOUSLY, TREATIES AND RESERVATIONS WERE THE NORM. ONE ADVANTAGE OF ANCSA IS THAT IT CAN BE ALTERED BY AMENDMENT WHENEVER THE NEED ARISES. TREATIES CANNOT BE ALTERED AND OVER TIME WERE OFTEN BROKEN.
AFTER YEARS OF NEGOTIATIONS, THE 1971 ANCSA SETTLEMENT WAS BASED ON $12,200/S/H, 540 ACRES OF LAND AND PARTICIPATION IN 7(i) REVENUE SHARING. UNDER SECTION 7(i) OF ANCSA, 70% OF NET REVENUES FROM RESOURCE DEVELOPMENT ON LANDS GRANTED TO REGIONAL CORPORATIONS ARE CONTRIBUTED TO A FUND THAT IS THEN DISTRIBUTED TO THE OTHER ANCSA CORPORATIONS (EXCEPT THE 13TH REGIONAL CORPORATION) ON THE BASIS OF THE NUMBER OF SHAREHOLDERS. MANY CORPORATIONS ESTABLISHED UNDER ANCSA WOULD NOT HAVE SURVIVED WITHOUT THESE 7(i) DISTRIBUTIONS. THE BIG DIFFERENCE BETWEEN THE 13TH REGIONAL CORPORATION AND THE OTHER NATIVE REGIONAL CORPORATIONS IS THAT THE 13TH DID NOT RECEIVE LAND AND DOES NOT PARTICIPATE IN 7(i) REVENUE DISTRIBUTIONS. THIS DIFFERENCE WAS LITTLE UNDERSTOOD BY THE 13TH SHAREHOLDERS WHEN ANCSA WAS ENACTED. ANCSA WAS VERY COMPLICATED LEGISLATION THAT FEW UNDERSTOOD IN ITS ENTIRETY. IT WAS, HOWEVER, UNDERSTOOD THAT IT WOULD BE NECESSARY TO ENACT AMENDMENTS AS UNFORESEEN PROBLEMS AROSE.
SEALASKA, THE NATIVE REGIONAL CORPORATION FOR SOUTHEAST ALASKA, HAS THE LARGEST NUMBER OF SHAREHOLDERS WITH APPROX. 16,000 AND DOYON, LIMITED, LOCATED IN FAIRBANKS HAS THE MOST LAND WITH 12.5 MILLION ACRES.
MOST NATIVE REGIONAL CORPORATIONS HAD A ROCKY START AND SOME BARELY SURVIVED. THE POLITICAL ACTIVISTS WHO DID SUCH A GOOD JOB OF GETTING ANCSA ESTABLISHED NATURALLY ASSUMED LEADERSHIP POSITIONS IN THE NEW CORPORATIONS, BUT THEY WERE GENERALLY NOT TRAINED TO BE GOOD BUSINESS PEOPLE. AS THE VALUE OF THE CORPORATIONS SLIPPED, IT BECAME OBVIOUS THAT IT WAS TIME FOR EXPERIENCED BUSINESS LEADERS. NOW, I AM HAPPY TO SAY THAT MOST NATIVE CORPORATIONS ARE QUITE WELL RUN. IT PLEASES ME TO SEE BUSINESS EXPERIENCE AS A REQUIREMENT FOR THE BOARD OF DIRECTORS OF MOST OF THE CORPORATIONS.
IN THE YEARS SINCE 1971, ANCSA CORPORATIONS HAVE HAD AN AMAZING GROWTH HISTORY, AND IN THE YEAR 2000 THEIR COMBINED REVENUE TOTALLED 2.5 BILLION DOLLARS. THIS HAS MADE A HUGE CONTRIBUTION TO THE ECONOMY OF ALASKA. NOT ONLY ARE THE EARNINGS PHENOMENAL, BUT STATEWIDE EMPLOYMENT IS APPROXIMATELY 10,600 AND ALASKA NATIVE EMPLOYMENT IS 3,400.
A GOOD SHARE OF THE REVENUE FOR ANCSA REGIONAL CORPORATIONS COMES FROM BUSINESS ACTIVITIES, NOT ONLY IN ALASKA, BUT ALSO IN THE LOWER 48 AND ELSEWHERE IN THE WORLD. MUCH OF THE PROFIT COMES BACK TO ALASKA IN THE FORM OF DIVIDENDS, CHARITABLE CONTRIBUTIONS AND TAXES. NOT ONLY HAVE THE CORPORATIONS BEEN SUCCESSFUL IN THE PAST, I CAN SEE A LARGE GROWTH FACTOR IN THE FUTURE.
NOW I WANT TO TALK SPECIFICALLY ABOUT MY CORPORATION, THE 13TH REGIONAL CORPORATION.
BACK IN 1971, MANY NON-RESIDENT ALASKA NATIVES WANTED A CORPORATION OF THEIR OWN, LOCATED OUTSIDE OF ALASKA. THEY FELT IT WOULD BE MORE RESPONSIVE TO THEIR NEEDS. THESE NATIVES HAD LEFT ALASKA FOR SEVERAL REASONS. SOME WERE STUDENTS, SOME WERE SERVING IN THE MILITARY, SOME LEFT TO FOLLOW THEIR SPOUSES, AND MANY WERE SEEKING BETTER JOB OPPORTUNITIES THAN WERE THEN AVAILABLE IN ALASKA. SOME WERE EVACUATED BY THE MILITARY DURING THE EARLY PART OF WORLD WAR II. MY PARENTS FELL INTO THIS CATEGORY. IN 1942, THEY WERE EVACUATED FROM KODIAK NAVAL BASE.
THE BUREAU OF INDIAN AFFAIRS INITIALLY OBJECTED TO ESTABLISHMENT OF A 13TH REGIONAL CORPORATION, STATING THAT NOT ENOUGH ALASKA NATIVES WERE INTERESTED. LEGAL ACTION, HOWEVER, ULTIMATELY DETERMINED THAT NON-RESIDENT ALASKA NATIVES HAD A RIGHT TO THEIR OWN CORPORATION, AND THUS THE 13TH WAS BORN IN DECEMBER 1975.
MOST NON-RESIDENT ALASKA NATIVES WERE GIVEN THE CHOICE OF JOINING THE CORPORATION WHERE THEY HAD LIVED IN ALASKA, OR JOINING THE 13TH. SOME, HOWEVER, WERE JUST ASSIGNED TO THE 13TH BY THE BUREAU OF INDIAN AFFAIRS.
THE 13TH HAD 4537 ORIGINAL SHAREHOLDERS. WE NOW HAVE ALMOST 6000. OUR SHAREHOLDERS ARE LOCATED IN EVERY STATE OF THE UNION. WASHINGTON HAS THE MOST WITH ABOUT 1500. CALIFORNIA NEXT WITH 850 AND THEN OREGON WITH 650. IN THE STATE OF ALASKA, WE HAVE ABOUT 500 SHAREHOLDERS. AT A SHAREHOLDERS MEETING IN ANCHORAGE DURING THE LAST ALASKA FEDERATION OF NATIVES CONVENTION, WE HAD A LARGE TURNOUT. OUR ALASKA RESIDENT SHAREHOLDERS HAVE ALWAYS PROVIDED THE LARGEST TURNOUT FOR ANY OF OUR MEETINGS. OUR ALASKA SHAREHOLDERS ARE ALSO OUR MOST ENERGETIC IN THEIR QUESTIONS AND THEIR CONCERN FOR THEIR CORPORATION AND ARE GENERALLY QUITE SUPPORTIVE OF WHAT WE ARE DOING. WITH 6000 SHAREHOLDERS, I FIGURE EACH OF US HAVE AT LEAST 6 RELATIVES IN ALASKA. THIS MEANS WE ARE TOUCHING THE LIVES OF AT LEAST 36,000 RESIDENT ALASKANS. MANY OF OUR RELATIVES ARE SHAREHOLDERS IN OTHER REGIONAL OR VILLAGE CORPORATIONS. AS A DIRECTOR OF AFN, IT IS MY JOB NOT ONLY TO LOOK OUT FOR THE INTEREST OF OUR SHAREHOLDERS IN ALASKA, BUT ALSO TO SUPPORT OTHER ALASKA NATIVE ISSUES. YES, WE HAVE STRONG TIES TO ALASKA AND ALWAYS WILL!
EVEN THOUGH THE LARGEST NUMBER OF OUR SHAREHOLDERS LIVE IN THE STATE OF WASHINGTON, OTHER NATIVE CORPORATIONS ALSO HAVE LARGE NUMBERS OF WASHINGTON RESIDENTS. THERE ARE OVER 9000 ALASKA NATIVES LIVING IN WASHINGTON WHO ARE MEMBERS OF ANCSA CORPORATIONS. OVER 30,000 ALASKA NATIVES LIVE IN THE LOWER 48 STATES.
THE STRENGTH OF THE 13TH REGION IS THAT WE ARE AN ALASKA CORPORATION AND ALWAYS WILL BE. THIS STRENGTH RESTS IN HOW FIRMLY WE ARE ANCHORED IN ALASKA. THE 13TH ACTS AS A BRIDGE FOR OUR SHAREHOLDERS TO THEIR ALASKA HERITAGE. WITH THIS GIVEN FACT, THE 13TH HAS AND WILL CONTINUE TO ESTABLISH BUSINESS RELATIONSHIPS IN ALASKA WITH OTHER ALASKA COMPANIES.
WE ORIGINALLY PLANNED ON AVOIDING 8(a) GOVERNMENT JOBS IN ALASKA SINCE THERE ARE MANY 8(a) FIRMS ALREADY IN THE MARKET HERE, AND WE DID NOT WANT TO COMPETE WITH THEM. NOW WE ARE THINKING THAT WE WILL ENTER THE MARKET IN PLACES WHERE WE CAN PROVIDE SUPPORT FOR ALASKA-BASED COMPANIES. OUR DESIRE IS TO JOINT VENTURE WITH OTHER COMPANIES WHERE WE BOTH CAN BENEFIT FROM SUCH A UNION. WE ALREADY HAVE ONE JOINT VENTURE WITH AN ALASKA NATIVE COMPANY, BUT NOT IN ALASKA. WE ARE JOINT VENTURING WITH CHUGACH NATIVE CORPORATION ON A PROJECT KNOWN AS THE “NORTHWEST REGIONAL JOC.” THIS IS A 50 MILLION DOLLAR 5-YEAR CONTRACT TO PROVIDE CONSTRUCTION SERVICES FOR THE NAVY IN THE NORTH WEST STATES. BY FORMING THIS JOINT VENTURE, WE WERE ABLE TO OFFER THE NAVY A STRONG PACKAGE THAT PERSUADED THEM TO GO FOR A SOLE SOURCE NEGOTIATED BID. EVERYONE BENEFITED.
THERE ARE MANY REFERENCES TO SBA SECTION 8(a) CORPORATIONS, BUT NOT MANY KNOW WHAT THAT MEANS. THE SMALL BUSINESS ASSOCIATION'S 8(a) SMALL BUSINESS DEVELOPMENT PROGRAM IS NAMED FOR A SECTION OF THE SMALL BUSINESS ACT, AND IS A PROGRAM CREATED TO HELP SMALL DISADVANTAGED BUSINESSES COMPETE IN THE AMERICAN ECONOMY AND ACCESS THE FEDERAL PROCUREMENT MARKET. UNDER CERTAIN CIRCUMSTANCES THE GOVERNMENT CAN NEGOTIATE ON A SOLE SOURCE BASIS FOR A GOVERNMENT CONTRACT. FOR CONSTRUCTION THERE ARE VARIOUS PROGRAMS SOME KNOWN AS SABER CONTRACTS, ALSO THERE ARE JOCS, BOAS IDIQS, BOSS AND MANY OTHERS.
THERE ARE MANY REQUIREMENTS THAT MUST BE MET FOR APPROVAL BY THE SBA AND LOTS OF PAPERWORK. TO MEET A 2-YEAR EXPERIENCE REQUIREMENT, WE PURCHASED 51% OF A SMALL CONTRACTOR THAT MET ALL THE REQUIREMENTS. IT CAN EASILY TAKE FROM ONE TO TWO YEARS FOR THE CERTIFICATION AND APPROVAL OF A BUSINESS PLAN. THIS PHASE FOR OUR FIRST 8(a) VENTURE TOOK US 1-1/2 YEARS. SBA 8(a) CERTIFICATION DOES NOT INSURE THAT A COMPANY WILL GET PROJECTS. A COMPANY CAN REMAIN IN THE 8(a) PROGRAM FOR A MAXIMUM OF 9 YEARS. SOME GRADUATE WITHOUT EVER BEING AWARDED A CONTRACT. THE KEY IS TO AGGRESSIVELY MARKET YOUR COMPANY.
ALASKA NATIVE CORPORATIONS AND TRIBAL CORPORATIONS HAVE A BIG ADVANTAGE OVER OTHER MINORITY PARTICIPANTS IN THAT THERE IS NO LIMIT TO THE SIZE PROJECT THAT CAN BE AWARDED. I AM SURE THAT YOU HAVE SEEN IN THE LOCAL PAPER WHERE ALASKA NATIVE REGIONAL OR VILLAGE CORPORATIONS HAVE BEEN AWARDED CONTRACTS IN EXCESS OF A BILLION DOLLARS. WE ARE NOT YET IN THIS LEAGUE. OUR CONSTRUCTION SUBSIDIARY HAS A 4 YEAR SABER CONTRACT AT VANDENBERG AFB, CALIFORNIA, THAT RUNS ABOUT 2.5 MILLION DOLLARS A YEAR AND ONE AT DYESS AFB, IN ABILENE, TEXAS ABOUT THE SAME SIZE. AT PUGET SOUND NAVAL SHIPYARD WE HAVE ABOUT A DOZEN ACTIVE CONTRACTS THAT TOTAL ABOUT 15 MILLION DOLLARS. ALSO WE HAVE NON 8(a) WORK AT MCCHORD AFB IN THE STATE OF WASHINGTON. ALL IN ALL, THE SBA 8(a) PROGRAM IS AN EXCELLENT PROGRAM FOR ALASKA NATIVE CORPORATIONS AND THEIR VENTURE PARTNERS. IT NOT ONLY ALLOWS THEM TO BUILD UP THEIR NET WORTH, BUT ALSO ALLOWS THEM TO GAIN THE EXPERIENCE TO COMPETE ON THE OPEN MARKET ONCE THEY GRADUATE FROM THE 8(a) PROGRAM.
IN GENERAL, THE GOVERNMENT REALLY LIKES THE 8(a) PROGRAM. ONE EXAMPLE IS WHERE THE NAVY GOT A RUSH ORDER TO REMODEL A BUILDING AT PUGET SOUND NAVAL SHIPYARD, BREMERTON, TO BE USED FOR A NEW COMPUTER OPERATION. NORMALLY IT WOULD TAKE IN EXCESS OF ONE YEAR TO DESIGN, SOLICIT BIDS, AND AWARD A CONTRACT PLUS CONSTRUCTION TIME. THEY CAME TO US AND SAID THEY HAD TO HAVE THE FACILITY IN 4 MONTHS. WE GAVE THEM A PRICE ON A DESIGN-BUILD BASIS. THEY AWARDED THE CONTRACT, AND WE FINISHED AHEAD OF SCHEDULE. THIS WAS A 1.5 MILLION DOLLAR CONTRACT FOR US.
BESIDES THE WORK WE PERFORM BY OURSELVES FOR THE GOVERNMENT, WE ARE CURRENTLY INVOLVED IN FOUR JOINT VENTURES. THESE ARE CASES WHERE TWO CONTRACTORS JOINED FORCES TO PROVIDE A STRONG PACKAGE TO THE GOVERNMENT.
IN ADDITION TO OUR CONSTRUCTION SUBSIDIARY, WE HAVE A COMPANY CALLED NORTHWEST BUSINESS SERVICES GROUP, LLC. IT HAS THE FRANCHISE FOR MAILBOXES ETC. FOR THE STATES OF OREGON, MONTANA AND WESTERN WASHINGTON. THIS COMPANY IS ALSO 8(a) CERTIFIED AND IS NOW ENTERING THE INFORMATION TECHNOLOGY FIELD. ALSO WE OWN 12.5 ACRES OF PRIME REAL ESTATE AT COLD BAY, ALASKA. THIS WAS DEVELOPED ORIGINALLY AS A FISHING BASE, BUT IS NOW VACANT. I BELIEVE IT WILL EVENTUALLY BE FEASIBLE TO DEVELOP THIS PROPERTY AND WE ARE LOOKING FOR PARTNERS TO WORK WITH US ON THIS PROJECT.
EVEN THOUGH WE ARE ONE OF THE SMALLER ALASKA NATIVE REGIONAL CORPORATIONS, WE ARE PROUD OF THE FACT THAT WE WERE ABLE TO AWARD 12 SCHOLARSHIPS TO OUR SHAREHOLDERS IN THE YEAR 2002; AND WE EXPECT TO AWARD 30 IN 2003. THE VALUE OF THESE WILL VARY FROM $250 TO $1000.
WE HAVE A QUARTERLY NEWSLETTER THAT KEEPS OUR SHAREHOLDERS INFORMED OF THE CORPORATION’S ACTIVITIES. WE PROVIDE A SMALL CONDOLENCE BENEFIT WHEN THERE IS A DEATH IN A FAMILY, AND WE HAVE AN ANNUAL PICNIC THAT BRINGS SHAREHOLDERS TOGETHER TO SOCIALIZE.
NOW, LOOKING TO THE FUTURE (SAY 100 YEARS) I CAN FORESEE ALL OF THE ALASKA-BASED NATIVE REGIONAL CORPORATIONS HAVING A MAJOR INFLUENCE ON BUSINESS WORLDWIDE. GROWTH, HOWEVER, MAY BE LIMITED SOMEWHAT BY THE DEMAND FOR DIVIDENDS BY SHAREHOLDERS, WHICH WILL REDUCE WORKING CAPITAL. THEY WILL, HOWEVER, REMAIN BASED IN ALASKA AND WILL PROVIDE OPPORTUNITIES FOR ALL ALASKANS AND WILL CONTINUE TO HAVE A MAJOR IMPACT ON THE ECONOMY OF ALASKA.
I ENVISION THE 13TH REGIONAL CORPORATION WITH A MAIN OFFICE IN ALASKA TO ADMINISTER THEIR MANY RESOURCES, WITH A SUBSIDIARY OFFICE IN SEATTLE. WE WILL CONTINUE TO HAVE INTERESTS IN A LARGE VARIETY OF BUSINESSES, ALL SUCCESSFULLY OPERATED. TOWARD THIS END, WE HAVE JUST OPENED AN OFFICE IN ANCHORAGE.
I CAN SEE WHERE CONGRESS WILL EVENTUALLY TAKE ACTION ON A BILL TO CORRECT THE LAND INEQUITY FOR THE 13TH WITH THE HELP OF GOVERNOR MURKOWSKI, ALASKA’S CONGRESSIONAL DELEGATION AND ALASKA BUSINESS LEADERS, I BELIEVE CONGRESS WILL EVENTUALLY AMEND ANCSA TO ALLOW THE 13TH REGION TO HAVE LAND IN ALASKA – THE HOME OF OUR ANCESTORS. THIS MAY HAPPEN AS EARLY AS THE YEAR 2003.
FROM A PERSONAL VIEWPOINT, IN 100 YEARS, I CAN SEE MYSELF RETIRED AND SPENDING MUCH OF MY TIME FISHING.
THANK YOU FOR BEING SUCH A GREAT AUDIENCE, AND FOR INCLUDING A REPRESENTATIVE OF ALASKA’S NATIVE CORPORATIONS ON YOUR PROGRAM!
