ANCHORAGE, Alaska — ProPublica, a New York based non-profit news organization, has released another report on Alaska Native corporations. This one points out the disparities between communities served by Native corporations in the government contracting business.
ProPublica has been investigating allegations that Native corporations take unfair advantage of the Small Business Administration’s 8(a) contracting program, designed to help minority-owned businesses.
In a report published on Thursday, March 17, ProPublica looked at shareholders in two Alaska Native communities -- and the drastic difference in dividends they earn, despite the fact that both communities are served by corporations which take part in government contracting.
Native Corporation leaders say ProPublica’s report makes some flawed comparisons and presents only a small part of the picture.
Jennifer LaFleur, one of the two ProPublica journalists who traveled to Alaska to write the report on Native corporations, said, “They get benefits that a lot of minority contractors don’t get. So I think it’s also fair to look at whether what’s happening is the best thing for everybody.” LaFleur says Alaska Native Corporations have also become heavily reliant on 8(a) contracting money, and that’s reason for concern from both the shareholder and public’s perspective.
The ProPublica report was essentially a tale of two villages -- Chenega, a community in Prince William Sound, and Napaskiak, near Bethel on the Kuskokwim River. It told the story of a Chenega Village Corporation shareholder who received $65,000 in annual dividends, compared to one in Napaskiak who only received a few hundred dollars from its regional corporation, Calista, which serves Yup’ik villages in Western Alaska.
Native corporation leaders say ProPublica’s comparison is misleading, because one is a village corporation and one is regional, which they say amounts to comparing apples and oranges. While the Chenega Corporation has 170 shareholders, Calista must distribute its profits amongst more than 13,000 shareholders, hence the drastic difference in the amount paid out per person.
But ProPublica says its snapshots of the two corporations are a helpful comparison, because most of their revenues come from government contracting.
The report also notes that former Calista CEO Matthew Nicolai earned $730,000 in 2009, the third highest-paid Native corporation CEO that year, in stark contrast to the 2010 dividend of $210 paid to Calista shareholders, the largest in the corporation’s history.
Will Anderson, President of the ANCSA Regional Association and CEO of the Kodiak-based Koniaq Native Corporation, gives the latest ProPublica report mixed reviews.
He credited the non-profit organization for actually sending two reporters to Alaska to investigate.
“We get a lot of reporters that criticize us, who have never been to Alaska that know nothing about us, so I think, in that respect, it’s good,” said Anderson, who says he welcomes in-depth reporting on Native corporations, because they’re not even well understood in their own state.
“We see as much ignorance about Native corporations in Alaska as we do anywhere else. But from another perspective, I think it’s a bit unfair trying to really draw from two different situations, where you have a village corporation, where you have a small number of shareholders, versus a regional corporation with a large number of shareholders,” said Anderson.
Anderson says with over 200 village corporations and 13 regional corporations, ProPublica’s focus on just a few gives a distorted picture that he fears people have begun to accept as reality.
According to Anderson, ProPublica, as well as other outside media outlets, are missing an important point. “The misperception that only non-natives are benefiting is one of the greatest inaccuracies I see in that story.”
LaFleur says ProPublica has looked at a wider spectrum of Native corporations in previous pieces. “Our intention with this particular article was to give people a little bit better sense of what some of the communities are like.” She said the goal was to show “how 8(a) contracting money translates on the ground, and what those people see in their lives from that.”
LaFleur also said, “This wasn’t meant to be a statistical study of all Alaska Native corporations, but rather one where there’s a small number of people.”
LaFleur said Chenega does a huge amount of contracting and, “They’re benefitting really, really well, as opposed to another one that does not do so large an amount of contracting but has a huge shareholder base to serve.”
LaFleur says ProPublica is planning more investigative reports looking into Alaska Native corporations, but would not say what issues would be explored in the future.