Report To Congressional Requesters: United States Government Accountability Office

GAO
December 2012
United States Government Accountability Office
Report to Congressional Requesters
REGIONAL
ALASKA NATIVE
CORPORATIONS
Status 40 Years after
Establishment, and
Future Considerations
GAO-13-121
December 2012
REGIONAL ALASKA NATIVE CORPORATIONS

Status 40 Years after Establishment, and
Future Considerations
Highlights of GAO-13-121, a report to
congressional requesters
Why GAO Did This Study
What GAO Found
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.
Incorporated under Alaska state law, regional Alaska Native corporations share
fundamental characteristics, although they have chosen a variety of governance
practices. Like other Alaska corporations, the regional corporations are subject to
the states corporate laws (with limited exceptions) and are run by an elected
board of directors. Nevertheless, each regional corporation has chosen its own
organization and governance approach in terms of board operations, executive
and board compensation, board elections, and shareholder involvement.
GAO was asked to review these

corporations. 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.
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
this report. Responses provided on
behalf of the corporations made
several points about their financial
reporting and operations that are more
fully discussed in the report.
View GAO-13-121. For more information,
contact Anne-Marie Fennell at (202) 512-3841
or fennella@gao.gov.
Alaska Native corporations are subject to some financial reporting requirements

under federal and state law, but oversight of the reporting is limited. The Alaska
Native Claims Settlement Act generally exempts the corporations from complying
with federal securities laws while requiring them to annually provide a report to
their shareholders that contains substantially all the information required to be
included in an annual report to shareholders by U.S. Securities and Exchange
Commission registrants. The Settlement Act does not provide for a federal role to
monitor the corporations compliance with this requirement, and oversight by the
state of Alaska is generally limited to enforcement of state securities laws and
proxy regulations.
GAO found that the corporations provide a wide variety of monetary and
nonmonetary benefits to their shareholders and other Alaska Natives. Monetary
benefits include shareholder dividends, elder benefits, scholarships, memorial
benefits, shareholders equity, and charitable donations. Nonmonetary benefits
often offered in partnership with village corporations, tribal organizations, and
nonprofit organizations within the regioninclude employment opportunities,
cultural preservation, land management, economic development, and advocacy
on behalf of Alaska Natives and their communities.
During this review, GAO identified three questions regarding the ambiguity of
existing federal financial reporting requirements, the role of the federal
government in maintaining the corporations solvency, and the implications of
defining who is eligible to be a shareholder. These questions may warrant
consideration and discussion by the federal government, the state, the regional
corporations, shareholders, or a combination of these entities.
Should the substantially all federal reporting requirement be clarified and

overseen? GAO was unable to determine whether the corporations are
meeting the substantially all requirement in the Settlement Act because the
phrase is not defined.
What is the appropriate role of the federal government in maintaining the

solvency of Alaska Native corporations? The federal government has
intervened in the past to help maintain the financial solvency of the
corporations. The 13th Regional Corporation has been insolvent since 2007.
Who should be a shareholder? As authorized by amendments to the

Settlement Act, shareholders of 5 of the 13 regional corporations have voted
to issue shares to Alaska Natives born after December 18, 1971, who meet
certain criteria. In deciding to offer new shares to more people, corporations
and shareholders face a number of considerations such as, potential effects
on dividends and shareholder involvement.
Contents
Letter
1
Background
The Corporations Have Adopted a Variety of Governance
Practices
The Corporations Are Subject to Some Federal and State Financial
Reporting Requirements and Limited State Oversight
The Corporations Provide Diverse Monetary and Nonmonetary
Benefits to Their Shareholders and Other Alaska Natives
Questions to Consider for the Future
Agency and Third-Party Comments and Our Evaluation
3
16
29
38
48
54
Appendix I
Objectives, Scope, and Methodology
58
Appendix II
Comments on Behalf of the 12 Regional Alaska Native

Corporations
63
Comments from Volunteers for the 13th Regional

Corporation
68
GAO Contact and Staff Acknowledgments
71
Appendix III
Appendix IV
Tables
Table 1: Characteristics of the Regional Alaska Native
Corporations When Established in the 1970s
Table 2: Size and Scope of the 12 Regional Alaska Native
Corporations in Alaska
Table 3: Regional Alaska Native Corporation Shareholder
Demographics as Reported by the Corporations
Table 4: Characteristics of the Boards of Directors, Regional
Alaska Native Corporations
Table 5: Election Information for the Regional Alaska Native
Corporations, 2001-2011
Table 6: Financial and Dividend Information as Reported by the
Regional Alaska Native Corporations, 2010
Page i
7
13
16
18
24
39
GAO-13-121 Regional Alaska Native Corporations
Table 7: Scholarship Information as Reported by the Regional

Alaska Native Corporations, 2010
Table 8: Employment of Alaska Natives by the Regional
Corporations and Their Subsidiaries, as Reported by the
Corporations
Table 9: New Classes of Shares Authorized by the Regional Alaska
Native Corporations
Table 10: Regional Alaska Native Corporations and Communities
Visited
Table 11: Regional Alaska Native Corporations Fiscal Years
Corresponding to the 2010 Reporting Period
41
46
53
59
60
Figures
Figure 1: The Twelve Geographic Regions for the Regional Alaska
Native Corporations in Alaska
Figure 2: Examples of Benefits Supported by the Regional Alaska
Native Corporations
5
44
Abbreviations
SBA
SEC
Small Business Administration

U.S. Securities and Exchange Commission
This is a work of the U.S. government and is not subject to copyright protection in the
United States. The published product may be reproduced and distributed in its entirety
without further permission from GAO. However, because this work may contain
copyrighted images or other material, permission from the copyright holder may be
necessary if you wish to reproduce this material separately.
Page ii

Washington, DC 20548
December 13, 2012

The Honorable Edward J. Markey
Ranking Member
Committee on Natural Resources
House of Representatives
The Honorable Mark Begich
United States Senate
The Honorable Lisa Murkowski
United States Senate
On December 18, 1971, the Alaska Native Claims Settlement Act was
enacted to resolve long-standing aboriginal land claims and to foster
economic development for Alaska Natives. 1 This federal law directed that
corporations be created under Alaska state law, which were to be the
vehicles for distributing the settlements land and monetary benefits to
Alaska Natives. The Settlement Act permitted the conveyance of about
44 million acres of land to the corporations, along with cash payments of
almost $1 billion, in exchange for extinguishing aboriginal land claims in
Alaska. As directed by the act, 12 for-profit regional corporations were
established representing geographical regions in the state, with each
region composed as far as practicable of Alaska Natives who have a
common heritage and share common interests. 2 In addition, a 13th
regional Alaska Native corporation was subsequently formed to represent
those Alaska Natives residing outside of Alaska.
The Settlement Act was intended to conform with the real economic and
social needs of Alaska Natives, without establishing any permanent
racially defined institutions and without creating a reservation system,
Pub. L. No. 92-203, 85 Stat. 688 (1971), codified as amended at 43 U.S.C. 16011629h. By settling aboriginal land claims in Alaska, the Settlement Act permitted the
development of the vast energy potential of the state to aid in meeting the energy
shortage the United States faced in the 1970s.
2
Under the Settlement Act, over 200 village, urban, or group Alaska Native corporations
were also formed to participate in the settlement. This report discusses only the regional
corporations.
Page 1
among other aims. 3 Toward these ends, the Settlement Act, as originally
enacted, entitled certain Alaska Natives to be shareholders in the
corporations and prohibited sales of the corporations stock for 20 years.
Subsequent amendments, however, have authorized issuance of stock to
other Alaska Natives and their descendants, extended the prohibition on
the sale of stock, and generally exempted the corporations from
regulation by the U.S. Securities and Exchange Commission (SEC).
Under the Settlement Act and state law, the corporations are required to
provide certain information to shareholders, such as annual reports
including the corporations audited financial statements. The Settlement
Act, as amended, also authorizes but does not require corporations to
provide benefits to their shareholders and other Alaska Natives to
promote their health, education, or welfare.
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. 4
To conduct this work, we reviewed the Alaska Native Claims Settlement
Act, as amended; the Alaska Corporations Code; and other federal and
state laws and regulations relevant to corporate governance and financial
reporting by regional Alaska Native corporations. We 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). We also asked SEC staff to provide
observations on the corporations 2010 annual shareholder reports. In this
report, we define an SEC registrant as a corporation subject to the
registration and reporting requirements of the Securities Exchange Act of
1934. We reviewed documentation provided by the regional corporations
43 U.S.C. 1601(b).
4
We were also asked to determine shareholders level of satisfaction with the regional
corporations. To answer this question, we proposed surveying regional corporations
shareholders on their perspectives of the regional corporations. We were unable to
conduct a systematic and independent survey of shareholders, however, because the
regional corporations declined to provide us with their shareholder lists.
Page 2
on their governance practices and on monetary and nonmonetary

benefits provided to shareholders and others. Throughout this report, we
refer to the corporations 2010 reporting period to describe each
corporations fiscal year corresponding most closely to calendar year
2010. We report all dollar amounts as they were reported to us by the
corporations for the period in question; none have been adjusted for
inflation. We interviewed representatives from all 13 regional corporations
and visited multiple locations across 7 of the 12 Alaskan regions. During
our site visits, we met with corporate executives and board directors,
tribal officials, representatives from nongovernmental organizations, and
shareholders to discuss their perspectives on the regional corporations
and benefits provided. In addition, from the Alaska State Division of
Banking and Securities, we obtained information on inquiries and
complaints received by the division, and steps the division took to
investigate and act on these claims, including administrative orders
issued by the state. Appendix I describes our scope and methodology in
greater detail.
We conducted this performance audit from October 2011 to December
2012 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
Background
The Alaska Native Claims Settlement Act required the Secretary of the
Interior to divide Alaska into 12 geographic regions, with each region, as
far as practicable, composed of Alaska Natives having a common
heritage and sharing common interests (see fig. 1). 5 The Secretary of the
Interior was also required to enroll into a region every Alaska Native alive
when the Settlement Act was enacted on December 18, 1971, generally
according to residence. As defined by the Settlement Act, an Alaska
Native is a person with 25 percent or more of Alaska Indian, Eskimo, or
Aleut blood or combination thereof (called a blood quantum requirement).
Each region in the 1970s established a regional corporation as directed
by the Settlement Act, and the Alaska Natives enrolled into the region
H.R. Rep. No. 94-729 at 13 (1975).
Page 3
became its shareholders. Certain Alaska Native villages were also eligible
to form village corporations under state law. In addition, Alaska Natives
who were not residing in Alaska could elect to enroll in a 13th region.
Such a corporation, referred to as the 13th Regional Corporation, was
established by a vote of nonresidents, and only those nonresident Alaska
Natives who voted for the 13th Regional Corporations formation were
enrolled in that region and became its shareholders (nonresidents who
did not vote for it were enrolled in another region and became
shareholders of that regional corporation). 6 Enrolled Alaska Natives
received no more than 100 shares of their regional corporations stock
and, if they were enrolled in a village, no more than 100 shares of their
village corporations stock. Under the original Settlement Act, shares
could be inherited upon a shareholders death, but inherited shares
entitled the new shareholder to vote only if the shareholder was an Alaska
Native with a blood quantum of 25 percent or more. 7
Initially, the Department of the Interior determined that a majority of all eligible
nonresidents had not elected to form a 13th regional corporation, but a federal court found
that basic fairness and equity compelled the creation of the 13th Regional Corporation
because Interiors handling of the election was marked by bureaucratic inconsistency
and lassitude. Alaska Native Association of Oregon v. Morton, 417 F.Supp. 459, 464-71
(D. D.C.1974).
7
If a shareholder dies without a will or heirs, the shares revert back to the corporation.
Additionally, the 1988 amendments to the Settlement Act permitted shareholders to
transfer their shares to Alaska Natives or their descendants during the shareholders
lifetime by giving the shares as a gift to specified family members. Under the 1988
amendments, shares have voting rights if they are inherited, transferred, or gifted to an
Alaska Native or descendant of an Alaska Native.
Page 4
Figure 1: The Twelve Geographic Regions for the Regional Alaska Native Corporations in Alaska
The corporations established under the Settlement Act were to receive

title to about 44 million acres of land in exchange for the extinguishment
of Alaska Native aboriginal land claims. 8 Specifically, the 12 regional
In addition to extinguishing all aboriginal claims of the Alaska Native people, including
any aboriginal hunting and fishing rights, the Settlement Act revoked all existing Indian
reservations or reserves in Alaska except one, the Annette Island Reserve of the
Metlakatla Indian community.
Page 5
corporations received rights to the subsurface and some surface lands,

and certain village corporations received title to surface lands. 9 Under the
act, the 13th Regional Corporation is not entitled to any land or
subsurface rights. Under section 7(i) of the act, 70 percent of all revenues
annually received by each regional corporation from the timber and
subsurface resources conveyed to them under the Settlement Act is then
divided among the 12 regional corporations according to the number of
Alaska Natives enrolled in each region. 10 The 13th Regional Corporation
does not share in this natural resource revenue, known as the 7(i)
distribution.
In addition, each of the regional and village corporations established
under the Settlement Act received a portion of the nearly $1 billion
monetary settlement (see table 1). The portion of the settlement money
given to each regional corporation was based on the relative number of
Alaska Natives enrolled in the region. The 12 regional corporations in
Alaska were required to distribute to shareholders each year until 1976
not less than 10 percent of the settlement money and all other net
income, including the 7(i) distribution. After 1976, the regional
corporations must distribute 50 percent of funds from such sources
among the village corporations in the region and regional corporation
shareholders who are not residents of those villages. 11 The 13th Regional
Corporation was required to distribute to its shareholders not less than
50 percent of its settlement money. As a House committee report
accompanying the Settlement Act stated, the money provided by the
settlement was intended to provide the capital necessary to raise the
In addition to regional and village corporations, the act allowed groups not qualifying to
establish an Alaska Native village corporation to establish Alaska Native group
corporations and Alaska Natives living in Sitka, Kenai, Juneau, and Kodiak to establish
urban corporations. Both group and urban corporations were eligible to receive title to
surface land.
10
The 7(i) distribution was the subject of much litigation in the 1970s and is now governed
by the Section 7(i) Settlement Agreement finalized in 1982 (and subsequently amended).
Under this settlement agreement, the regional corporations share 70 percent of all net
revenues received from timber and subsurface resources conveyed to them under the act.
11
43 U.S.C. 1606(j). Specifically, the amount distributed as dividends to shareholders
who are not village residents bears the same ratio to the amount distributed among the
village corporations that the number of shares of stock registered on the books of the
regional corporations in the names of nonresidents of villages bears to the number of
shares of stock registered in the names of village residents. 43 U.S.C. 1606(m).
Page 6
standard of living of Alaska Nativesmany lived in extreme poverty and

underprivileged statusthrough their own efforts. 12
Table 1: Characteristics of the Regional Alaska Native Corporations When Established in the 1970s
Land entitlement
a
(acres in millions)
Total cash
distributions
(thousands of dollars)
Ahtna, Incorporated
1.78
$13,365
1,074
The Aleut Corporation
1.43
40,537
3,249
13
Arctic Slope Regional Corporation
5.00
46,889
3,738
Bering Straits Native Corporation
2.28
80,067
6,333
17
Bristol Bay Native Corporation
3.07
67,443
5,401
29
Calista Corporation
6.52
166,100
13,306
56
Chugach Alaska Corporation
0.95
24,153
1,908
Cook Inlet Region, Inc.
2.41
77,797
6,264
Corporation
Doyon, Limited
Number of
b
shareholders
Number of village
c
corporations
12.22
113,160
9,061
34
Koniag, Incorporated
1.16
41,675
3,342
NANA Regional Corporation
2.25
60,269
4,828
11
Sealaska Corporation
0.59
198,649
15,787
46,601
4,426
39.66
$976,705
78,717
The 13th Regional Corporation

Total
206
Source: Department of the Interior.

a
Approximate totals include both surface and subsurface estates; surface amounts are generally
owned by the village corporations within the region. Total acres do not include 4 million acres that
villages elected to take title to as revoked reserves under section 19 of the Alaska Native Claims
Settlement Act. Until late 1973, village corporations could elect to acquire title to the surface and
subsurface estates in certain reserves established before the Settlement Act, reserves the Settlement
Act revoked. Village corporations that elected to take title to revoked reserves were not eligible for
any distributions from the regional corporation, and their shareholders were not eligible to become
regional corporation shareholders. Seven village corporations elected to take title to five former
reserves: Elim (Elim Native Corporation), Klukwan (Klukwan Corporation), St. Lawrence (Gambell
Native Corporation and the Savoonga Native Corporation), Tetlin (Tetlin Native Corporation), and
Venetie (Neetsai Corporation and the Venetie Indian Corporation). The Klukwan Corporation,
however, later chose to receive benefits from the settlement rather than taking title to the former
reserve, and under section 16(d) of the Settlement Act, as amended, the Klukwan Corporation
received settlement land after conveying title to its former reserve lands to the Chilkat Indian Village
tribal government.
Figures represent the number of shareholders determined to be eligible after reopening eligibility as
of December 31, 1982; the numbers do not include 1,522 eligible shareholders who were enrolled in
village corporations that elected to take title to the revoked reserves.
12
H.R. Rep. No. 92-523 at 5-6 (1971).
Page 7
These numbers do not include the seven village corporations that elected to take title to the revoked
reserves, and they represent the number of village corporations before any village corporation
consolidations or mergers with their regional corporation. For example, 10 of the 11 village
corporations in the NANA region merged with NANA Regional Corporation.
The 1980 amendments to the Settlement Act authorized seven additional village corporations in the
Koniag region with modified settlement entitlements. Pub. L. No. 96-487, 1427(e) (1980).
e
There were a total of 220 eligible village corporations under the Settlement Actthe 206 included in
the table, plus the 7 that elected revoked reserves, plus the 7 additional Koniag village corporations.
Alaska Native Claims

Settlement Act
Amendments
Although the Settlement Acts basic structure has not changed in the last
40 years, the act has been amended several times. Some of the
amendments pertain to the expansion of eligible shareholders, extended
restrictions on the sales of stock, exemptions from federal securities laws,
and participation in the Small Business Administrations 8(a) program, as
follows:
Expansion of eligible shareholders. The Settlement Act was amended

in 1988 to permit the addition of new shareholders under certain
circumstances. Specifically, corporation shareholders could vote to
amend the articles of incorporation to authorize the issuance of
additional shares to (1) eligible Alaska Natives who missed
enrollment, (2) Alaska Natives born after the Settlement Acts
enactment, or both. 13 A subsequent amendment in 1992 also
permitted corporation shareholders to vote on amending the articles of
incorporation to authorize the issuance of additional shares to
descendants of Alaska Natives born after December 18, 1971. This
provision allows corporations to issue stock to descendants of its
original shareholders without regard to blood quantumas long as
shareholders vote to amend the articles of incorporation to authorize
such action.
Restrictions on sales of stock. The 1988 amendments also extended

the prohibition on sales of stock unless and until the shareholders of
the corporation decide to allow them. The Senate committee report
accompanying the amendments recognized that by the end of 1991
13
The 1988 amendment also authorized shareholders to vote on amending the articles of
incorporation to authorize the issuance of additional shares to Alaska Native shareholders
who are 65 years old or older. In addition, the amendment authorized shareholders to vote
to amend the articles of incorporation to authorize the issuance of other classes and
series of stock to permit the corporation to raise equity capital by selling stock in traditional
capital markets.
Page 8
the date when stock could be sold under the original actmany
Alaska Native shareholders would not have acquired sufficient
experience dealing with corporate activities to sell their stock on the
open market without risking the loss of continued Alaska Native
corporate ownership. 14 The amendment allows the shareholders to
vote to amend the articles of incorporation to lift restrictions on stock
sales.
Federal securities laws. In 1976, the act was amended to exempt the
corporations from certain federal securities laws during the 20-year
prohibition on the sale or disposition of stock. Specifically, the
amendment exempted the corporations from the Investment Company
Act of 1940, 15 the Securities Act of 1933, 16 and the Securities
Exchange Act of 1934. 17 Because of this exemption, the corporations
are also not subject to any amendments to these laws, including
amendments in the Dodd-Frank Wall Street Reform and Consumer
Protection Act 18 and the Sarbanes-Oxley Act of 2002. 19 These laws,
and their implementing regulations, require certain corporations to
register with and report periodically to the SEC, which regulates the
securities industry. In 1988, when the act was amended to extend the
prohibition on stock sales, the act was also amended to extend the
exemption from securities law until after the corporation offers shares
of its stock to the public, shareholders vote to allow stock sales, or the
corporation registers with the SEC.
14
S. Rep. No. 100-201 at 20 (1987).
15
Investment Company Act of 1940, 54 Stat. 789, codified as amended at 15 U.S.C.

80a-1 to 80a-64.
16
Securities Act of 1933, 48 Stat. 74, codified as amended at 15 U.S.C. 77a-77bbbb.
17
Securities Exchange Act of 1934, 48 Stat. 881, codified as amended at 15 U.S.C.

78a-78pp.
18
Pub. L. No. 111-203 (2010). The purpose of the act is to promote the financial stability of
the United States by improving accountability and transparency in the financial system,
among other aims.
19
Pub. L. No. 107-204 (2002). The act is intended to protect investors by improving the
accuracy and reliability of corporate disclosures made under securities laws, among other
purposes.
Page 9
Small Business Administrations (SBA) 8(a) program participation. In

1988, the Settlement Act was amended to designate Alaska Native
corporations as minority and economically disadvantaged business
enterprises owned and controlled by Alaska Natives if Alaska Natives
and descendant shareholders represent a majority of both the
corporations total equity (shares) and voting power. Furthermore, the
amendment designated any direct and indirect subsidiary
corporations, joint ventures, or partnerships of these Alaska Native
corporations as minority and economically disadvantaged business
enterprises if Alaska Natives and descendant shareholders represent
a majority of both the total equity and voting power of the subsidiaries,
joint ventures, or partnerships. Alaska Native corporations qualifying
subsidiaries, joint ventures, or partnerships are eligible to participate
in the SBAs 8(a) programone of the federal governments primary
means for developing small businesses owned by socially and
economically disadvantaged individuals. 20 Under the 8(a) program,
Alaska Native corporations, along with other tribal entities, have been
afforded special advantages, which have come under congressional
scrutiny in recent years. 21 Some of the regional corporations generate
a high percentage of their revenues from their subsidiaries
participation in the 8(a) program.
Regional Corporation
Organization
The regional corporations are organized as for-profit corporations under

Alaska state law and are separate and distinct from the Alaska Native
tribal governments recognized by the federal government as Indian
20
43 U.S.C. 1626(e).
21
GAO, Contract Management: Increased Use of Alaska Native Corporations Special 8(a)
Provisions Calls for Tailored Oversight, GAO-06-399 (Washington, D.C.: Apr. 27, 2006),
and GAO, Federal Contracting: Monitoring and Oversight of Tribal 8(a) Firms Need
Attention, GAO-12-84 (Washington, D.C.: Jan. 31, 2012). Special advantages include the
ability to receive sole-source 8(a) contracts for any amount, whereas sole-source awards
to other 8(a) firms must generally fall under certain competitive dollar thresholds ($6.5
million for manufacturing or $4 million for all other acquisitions). Section 811 of the
National Defense Authorization Act for Fiscal Year 2010enacted in October 2009
mandated changes to the Federal Acquisition Regulation to require a written justification
of sole-source 8(a) awards over $20 million. An interim rule amending the Federal
Acquisition Regulation to implement section 811 was issued on March 16, 2011, and
finalized on April 18, 2012. Previously, no justification was required for sole-source 8(a)
awards of any amount.
Page 10
tribes. 22 Incorporated under Alaska state law, regional corporations share

fundamental characteristics with other corporations in Alaska. For
instance, to form a for-profit corporation, articles of incorporationwhich
contain basic information about the corporation and its structuremust
be filed with the state and a fee paid. The articles of incorporation specify,
for instance, how many shares the corporation is authorized to issue,
whether the shares will be divided into classes, who is eligible to receive
shares, and who serves on the initial board of directors. 23 Corporations
are required to submit biennial reports to the state containing information
about the current board of directors, number of shares issued, and other
related information. The state can dissolve corporations involuntarily for
several reasons, such as failure to file required biennial reports or pay a
biennial corporation tax. 24
The Settlement Act confirms that management of the regional
corporations is the responsibility of their boards of directors and generally
subjects the Alaska Native regional corporations to state law, although
the state does not have a role in overseeing any corporations corporate
governance or business decisions. According to the Settlement Acts
legislative history, board members and officers were expected to avoid
abuses of the acts intent; any unreasonable staff, officer, board member,
consultant, attorney, or other salaries, expenses, and fees; and
expenditure of funds for purposes other than those reasonably necessary
in ordinary business operations. 25 State corporate law does not authorize
22
The term recognize means the federal government acknowledges that a particular
Native American group is a tribe by conferring specific legal status on that group,
establishing a government-to-government relationship between the United States and the
tribe, imposing on the government a fiduciary trust relationship to the tribe and its
members, and imposing specific obligations on the federal government to provide benefits
and services to the tribe and its members. See H.R. Rep. No. 103-781 at 2-3 (1994).
23
Corporations also have bylawswhich contain the details of the corporations internal
governance arrangementsbut bylaws are not filed with the state.
24
As of this report, Alaska had never dissolved a regional corporation involuntarily,

although in 2010 the state did issue the 13th Regional Corporation a notice of potential
involuntary dissolution. Before a final notice was issued by the state, however, a state
official said that the corporation submitted necessary documentation and paid the required
fees. Although not involuntarily dissolved by the state, the 13th Regional Corporation has
largely been insolvent since 2007.The state has exercised its authority in the past to
dissolve several village corporations involuntarily. However, Alaska state law contains
provisions regarding reinstatement Alaska Native corporations. See Alaska Stat.
10.06.960(i), (k).
25
H.R. Conf. Rep. No. 92-746 at 37 (1971).
Page 11
the state to oversee such actions of any corporations directors, and the
act did not establish any oversight mechanism for the regional
corporations.
Under state corporate law, a corporations board of directorswho are
fiduciaries of the corporation and owe it the duties of good faith, care, and
loyaltymanages the corporation and makes business decisions. The
board hires and monitors corporate officers, such as president and
secretary. In contrast to the board of directors role, shareholders have
limited power to participate in management and control of a corporation.
Shareholders do not make business decisions for the corporation, but
they are responsible for electing the directors who do. Except for the
initial board, directors are elected by shareholders at an annual meeting.
The elections are usually conducted by an independent third party, such
as an accounting firm. In order for a shareholder election (or other action)
to be valid, a certain number of sharesspecified in state law or the
articles of incorporation and known as a quorummust be voted in
person or by proxy at the meeting. Voting by proxy means that a
shareholder who cannot attend the annual meeting in person directs
someone elsea proxy holderto vote his or her shares. Shareholders
and the corporation can solicit shareholders to serve as their proxy
holders in what is known as a proxy solicitation. Proxy solicitations from a
corporation generally consist of an annual report to shareholders, a proxy
statement containing information on nominees for the board, and a proxy
form, among other things. In addition, shareholders must vote to approve
any amendments to the articles of incorporation and certain other actions
proposed by the board. Shareholders can also make recommendations to
the board on various matters by presenting and voting on resolutions at
annual meetings.
Overview of the Regional

Corporations
Over the past 40 years, the 12 regional corporations in Alaska have

grown into diverse and often large businesses, important to Alaskas
economy. Although many of the corporations struggled financially when
they were first created and into the 1980s and 1990swith at least
2 declaring bankruptcyby 2011, the 12 corporations were ranked as top
businesses in Alaska. For example, in October 2011, Alaska Business
Monthly reported that the 12 regional corporations were ranked within the
top 25 Alaska-owned businesses in Alaska on the basis of 2010
Page 12
revenues. 26 Furthermore, the Arctic Slope Regional Corporation has been

ranked as the number one Alaska-owned corporation for 17 consecutive
years, with gross revenues of $2.3 billion in 2010. Collectively, the
12 regional corporations revenues in 2010 reached almost $8.2 billion,
and the corporations have extensive operations both within Alaska and
around the world. For example, NANA Regional Corporation owns the
land on which one of the worlds largest zinc-lead mines is situated, and
the Arctic Slope Regional Corporation is a major producer of oil on
Alaskas North Slope. The regional corporations have multiple
subsidiaries operating in Alaska, the lower 48 states, and several other
countries. Specifically, the corporations reported to us that they
collectively operate more than 330 wholly owned subsidiaries, ranging
from fewer than 10 at one regional corporation to more than
50 subsidiaries at another. 27 Total employees as reported by the
corporations ranged from more than 500 at one corporation to almost
11,000 at another. Table 2 summarizes the regional corporations major
business operations, gross revenues, and net incomes.
Table 2: Size and Scope of the 12 Regional Alaska Native Corporations in Alaska
Dollars in thousands
Gross revenue
(2010)
Net income
(2010)
Facilities management, construction services, environmental

services, professional services and staffing, pipeline maintenance,
range support and training, land management and protection
services, land and natural resource development
$243,430
$1,739
Fuel oil distribution, commercial real estate, government services,

mechanical contracting, oil field services, water quality testing
143,046
8,381
Arctic Slope Regional

Corporation
Petroleum refining and marketing, government services, energy

support services, construction, resource development
2,331,681
164,433
Bering Straits Native

Corporation
Facility operations and maintenance, construction services,

computer facilities support and information technology, supply
logistics, administrative support, security equipment, aircraft
services and maintenance
197,706
8,848
Corporation
Major business operations
Ahtna, Incorporated
26
Debbie Cutler, 2011 Top 49ers: Superheroes of Success, Alaska Business Monthly,
October 2011.
27
The regional corporations reported that collectively they are also involved as partial
owners of, or in joint ventures or partnerships with, approximately 150 subsidiaries.
Page 13
Dollars in thousands
Gross revenue
(2010)
Net income
(2010)
1,667,200
43,017
Federal contracting, construction equipment and excavating,

communications and media, real estate, energy, engineering and
environmental services
234,866
18,301
Base operation services, construction, information technology and

telecom services, education, engineering, oil and gas services,
mineral extraction
936,975
26,492
Real estate, oilfield and construction services, environmental

remediation, government contracting, tourism and hospitality
properties and attractions, telecommunications, resource and
energy development
188,357
16,535
Doyon, Limited
Oil and gas services, government contracting, tourism, natural

resource development
280,268
15,678
Marine construction, aerospace manufacturing, information

technology services, resource development and extraction, naval
marine services
131,052
8,654
Government contracting, oilfield and mining services, professional

services including engineering, hospitality, natural resources
1,592,826
41,173
Plastics manufacturing and molding, environmental services and

remediation, construction services, information technology
services, security services, timber harvest and forest
management, freight management and logistics
$223,823
$15,154
Corporation
Major business operations
Petroleum distribution, oil field services, construction, government

contracting services, natural resource management and
development, tourism
Calista Corporation
Source: GAO analysis of information from the regional Alaska Native corporations.
Note: Gross revenue and net income amounts are as reported by the regional corporations for the
2010 reporting period.
a
Listed are the major business operations of the regional corporations as provided to us by the
corporations in October 2012; the corporations may also undertake many other business activities not
listed here.
In contrast to the 12 regional corporations, the 13th Regional Corporation

has experienced long-standing financial difficulties and has largely been
insolvent since 2007. 28 In a 2009 letter to shareholders, the corporations
board of directors explained that a series of eventsincluding litigation
involving the corporations former chief executive officer and changes in
the construction and real estate markets where the corporation had
operationsnegatively affected the corporation to the point of insolvency.
28
In 1986, the 13th Regional Corporation filed for bankruptcy.
Page 14
The last annual meeting held to elect board directors was in 2006; as of
October 2012, advocates for the 13th Regional Corporation are working
without compensation to explore options for bringing the corporation back
into solvency. (We discuss this issue more fully in the last section of our
report.)
Over time, the number and demographics of the regional corporations
shareholders have changed. For example, shareholders initially
numbered around 79,000 and now exceed 111,000. In addition, in over
half the regions, 25 percent or more of the shareholders now reside
outside Alaska (see table 3), but throughout the regions, many
shareholders reside in one of over 200 isolated villages in the state, often
located near the sea or rivers. Most villages are accessible only by small
planes, boats, or snow machines; 82 percent of the rural communities in
Alaska have no road system. Costs are high in the villages, particularly
for food, gas, and heating sources. Residents get much of their food from
a subsistence lifestylehunting, fishing, and gathering wild plants for
foodwhich remains a vital part of Alaska Native culture. Often, basic
infrastructure such as housing and water are far below the standards of
urban Alaska. For instance, some rural Alaskan homes lack running water
and flush toilets and instead use washaterias that provide laundry,
shower, and toilet facilities for a fee. In addition, employment
opportunities are scarce, and gaining access to health care and
educational opportunities is often challenging.
Page 15
Table 3: Regional Alaska Native Corporation Shareholder Demographics as Reported by the Corporations
Number of
shareholders
Number of
shareholders
residing in Alaska
Number of
shareholders
residing outside
Alaska
Percentage of
shareholders
residing outside
Alaska
Ahtna, Incorporated
1,751
1,430
321
18%
3,750
2,195
1,551
41
11,090
9,052
1,620
15
6,455
4,865
1,590
25
Corporation

Calista Corporation
8,660
7,090
1,570
18
12,602
10,559
830
2,520
1,380
1,010
40

Doyon, Limited
7,986
4,900
3,086
39
18,536
13,891
4,645
25
3,696
1,990
1,706
46
12,923
11,155
1,768
14
21,263
11,159
10,104
48
111,232
79,666
29,801
27%
Total
Source: Regional Alaska Native corporations.
Note: These data represent the regional corporations shareholder numbers as reported by the
regional corporations as of dates occurring from December 2011 to October 2012.
a
Current shareholder numbers for the 13th Regional Corporation were not available. According to one
of the corporations shareholders, a former director, as of 2008, a total of 5,371 shareholders
remained in the 13th Regional Corporation, of whom 695 resided in Alaska and 4,676 outside Alaska.
The Corporations
Have Adopted
a Variety of
Governance Practices
Incorporated under Alaska state law, regional corporations share

fundamental characteristics, although they have chosen a variety of
governance practices. Like any other Alaska corporation, the regional
corporations are subject to the states corporate laws, with a few limited
exceptions, 29 and are run by a board of directors elected by shareholders.
Nevertheless, as allowed under state law, each of the regional
corporations has adopted its own set of governance practices. In
reviewing these practices for the regional corporations, we found a range
of similarities and differences in terms of board composition and
29
Regional corporations are subject to Alaska corporate law with the exception of certain
provisions relating to capitalization, issuance of shares, and other topics identified in
Alaska Stat. 10.06.960.
Page 16
operation, executive and board compensation, board elections, and

shareholder involvement; we did not review governance practices of the
13th Regional Corporation because it has largely been inactive since
2007.
Board Composition
and Operation
Under the Settlement Act, all regional corporation board directors must be
shareholders of their corporations and over the age of 18, but otherwise
the corporations have taken various approaches in composing and
operating their boards. For instance, board sizes range from 9 to 23
directors, and the corporations have established differing restrictions
relating to the directors employment with the corporation or their
subsidiary companies. A few corporations specify that directors may not
be employed by the corporation or any of its subsidiaries, while others
specify that directors may not be employed by the corporation but may be
employed by certain subsidiary companies. In contrast, several
corporations do not restrict director employment with the corporation, but
one restricts certain director involvement with entities that may compete
with the corporation, and yet another requires that the position of
corporate president be filled by a director. For those corporations that do
not restrict director employment, we found several instances where board
directors were also employed by the corporation or its subsidiaries.
We also found that the age, sex, professional business experience, and
board tenure of the corporations boards varied. 30 Very few directors were
younger than 40, although directors ages ranged from 29 to 82 years.
Males made up a majority of all directors, but some boards were more
evenly divided by gender than others (see table 4). The professional
business experiences listed by the directors represented diverse fields
and professions, including commercial fishermen, construction operators,
medical doctors, school teachers and university professors, and business
managers and executives. Similarly, a directors tenure on a board
ranged considerably across and within the corporations, from less than
1 year to 39 years.
30
State regulation requires regional corporations to include certain information for board
candidates and current board directors in their board proxy solicitations for director
elections, such as name, age, and address; all positions and offices presently held with
the corporation; and business experience during the past 5 years, including principal
employment or occupation and employer. 3 Alaska Admin. Code 08.345(b)(1)(A), (B),
(F). In some of the proxy solicitations we reviewed, some of this information may not have
been fully reported, in which case we referred the issue to the state.
Page 17
Table 4: Characteristics of the Boards of Directors, Regional Alaska Native Corporations

Number of directors by total time served
Corporation
Number of
directors
Male:female
ratio
Less than
10 years
From 10 to
20 years
More than
20 years
13
7:6
Ahtna, Incorporated
5:4
15
9:6
15
11:4
12
10:2
Calista Corporation
11
9:2
5:4
15
11:4
10
Doyon, Limited
13
7:6
7:2
13:9
12
13
9:4
23
Note: The information on board directors reported here is based on the directors in place with each
corporation before its annual shareholder meeting held in calendar year 2011.
a
The 13th Regional Corporation has nine board director positions.
At the time NANA held its 2011 annual shareholder meeting, there was one vacancy on the board
because one director had passed away; the data presented in this row apply to the 22 directors then
serving.
In terms of board operations, the corporations boards are led by a chair

and have designated committees, often with written charters spelling out
their operating rules and procedures, although the types of committees
and authority granted to each committee vary among corporations.
Eleven of the corporations boards have audit committees to oversee the
corporations financial reporting practices. 31 Other common committees
31
The Sarbanes-Oxley Act of 2002 requires companies listed on national securities

exchanges and with national securities associations to have an audit committee that is
directly responsible for the appointment, compensation, and oversight of the work of any
registered public accounting firm employed by that company for the purpose of preparing
or issuing an audit report or related work. Because the regional corporations shares are
not listed on exchanges or with associations, they are not subject to this requirement.
Page 18
include executive, lands, compensation, and shareholder relations. 32 In

some instances, committee membership is determined by a vote of the
board, while in others, committee members are appointed by the board
chair. Depending on the specific corporation and board committee, a
particular committees authority may be advisory, or it may have some
decision-making authority granted by the board.
In addition, almost all of the corporations boards have written codes of
ethics outlining the directors responsibilities, including legal duties and
business practices, restricted activities (such as restrictions relating to
individual contributions to political campaigns), and the avoidance or
disclosure of potential conflicts of interest. Many of the corporations
codes of ethics discuss how conflicts of interest or the appearance of
conflicts of interest should be avoided and what information is to be
disclosed to the board in case of a potential conflict, such as when the
corporation may be considering a business transaction with a member of
a directors family. Additionally, in their annual proxy statements, the
corporations generally disclose the family relationships of directors, board
nominees, or executive officers of the corporation and its subsidiaries and
certain financial transactions by the corporation with a director or
directors family, as required by state regulation. 33
Executive and Board

Compensation
The regional corporations report compensation information for certain

corporate officers and board directors, although the type of information
reported varies. Under Alaska state regulation, boards proxy statements
must contain certain information on compensation distributed to or
accrued by corporate officers and directors over the previous fiscal year,
32
State regulation requires regional corporations board proxy solicitations to list any board
committees that perform audit, nominating, and compensation functions; briefly describe
the functions actually performed; and indicate the membership of each committee and
number of meetings held during the last fiscal year. 3 Alaska Admin. Code 08.345(b)(7).
33
Specifically, state regulations for Alaska Native corporations board proxy solicitations
for director elections require the disclosure of any family relationship between (1) board
nominees for director or incumbent directors and (2) any director, nominee, or executive
officer of the corporation and its subsidiaries. 3 Alaska Admin. Code 08.345(b)(1)(E).
In addition, the regulations require a brief description of financial transactions by the
corporation with any entity since the beginning of the last fiscal year and any presently
proposed transactions if (1) the transactions in the aggregate exceed $20,000 and (2) the
nominee, director, executive officer, or a family member is employed by, is an officer or
director of, or owns an interest in the entity. 3 Alaska Admin. Code 08.345(b)(1)(H),
(b)(3).
Page 19
although the regulation does not prescribe the specific format to be used
or require information to be included about the methods used to
determine compensation. 34 We heard concerns from several
shareholders that clear information about executive or director
compensation was lacking. 35 Our review showed that the regional
corporations proxy statements provide varying levels of detail on
compensation amounts and methods used to determine compensation.
For the regional corporations 2010 reporting period, all the corporations
reported in their proxy statements the total remuneration paid or accrued
to their five most highly compensated officers or directors for services to
the corporation and any subsidiaries, as required by state regulation. 36
The top reported compensation amount for any one officer or director
ranged from $137,578 to $2,514,961. For seven of the corporations,
corporate officers were generally the five most highly compensated
individuals, while at the other five, officers of subsidiaries were commonly
the five most highly compensated. Some corporations provided annual
salary, bonus, or pension amounts, whereas others reported a total
without specifying what made up the total or what amounts were
distributed versus accrued during the time period.
Similarly, state regulation requires the corporations to report the total
remuneration paid to or accrued by all their officers and directors as a
group, as well as the number of persons in the group; the regulation does
not, however, specify whether this group is to include officers and
directors of any of the corporations subsidiaries. 37 For the corporations
2010 reporting period, total reported compensation ranged from
34
The state regulation defines executive officer as the president, secretary, treasurer, a
vice president in charge of a principal business function, such as sales, administration, or
finance, or any other person who performs similar policymaking functions for the
corporation. 3 Alaska Admin. Code 08.365(6).
35
Throughout this report we cite shareholder views that we obtained through four primary
means: (1) our site visits to communities and villages in Alaska, (2) phone interviews we
held with shareholders who contacted us or whom we contacted on the basis of referrals,
(3) a feedback e-mail mailbox we set up, and (4) social media websites and other news
sources. Because we were unable to conduct a systematic and independent survey of
shareholders, we were limited to using these views, which are anecdotal and not
generalizable to all shareholders.
36
3 Alaska Admin. Code 08.345(b)(2)(A).
37
3 Alaska Admin. Code 08.345(b)(2)(B).
Page 20
$1.4 million for 14 officers and directors to $19 million for 115 officers and
directors. Five corporations indicated that corporate and subsidiary
officers and directors were included in their totals; two indicated they
included corporate officers and directors only; and for the five others, it
was not clear whether the totals included officers and directors of
subsidiaries.
In addition, for their boards of directors, the regional corporations reported
in their annual proxy statements general information on the fees directors
were paid for their service on the board and the types of expenses for
which they could be reimbursed. The way compensation was reported
varied by corporation; the regulations do not specify a format for
reporting. Three corporations provided the total amount they paid to each
director for the reporting period (amounts reported ranged from less than
$17,000 to more than $49,000). Five reported monthly or annual salaries
for the directors, along with a description of other expenses for which
directors could be reimbursed, such as travel and technology expenses.
At these five corporations, salaries reported ranged from $1,500 per
month to $48,000 per year. The other four corporations reported director
compensation per day or per half day for attending board meetings
(sometimes in addition to a monthly or annual fee), along with a
description of expenses for which they could be reimbursed. These
corporations did not report the total number of days the directors spent in
meetings, however, making it difficult to estimate total compensation for
the directors. Further, several corporations reported that directors serving
as board chair, as chair of board committees, or on subsidiary board
committees received additional compensation in varying amounts,
depending on the corporation.
Although not required to by state regulation, several regional corporations
provide additional information in their proxy statements about their
executive pay practices. In the wake of public concern, executive
compensation at private and publicly traded companies has received
considerable scrutiny in recent years, and we heard similar concerns from
several regional corporation shareholders, particularly about the
transparency of compensation amounts or methods for determining such
Page 21
amounts as reported to shareholders. 38 We found that several

corporations detailed the process they used to make executive
compensation decisions in their proxy statements, including how the
corporations evaluated management performance. For example,
one corporation reported in its 2011 proxy statement that its
compensation committee recommended a compensation plan after
reviewing national independent labor market studies of compensation
paid by comparable companies, including other regional corporations.
This corporation reported that it used independent compensation
consultants to assist its compensation committee in developing a
performance-based executive compensation plan, which included a base
salary plus potential additional performance-based compensation. In
contrast, although the other corporations did not include detailed
information in their proxy statements, when we asked the corporations to
describe their executive compensation policies, many of them reported
that they rely on outside corporate salary surveys and studies; a few
reported that they strive to set their compensation levels near the
midpoint of the market for comparable positions. Similarly, several
corporations reported that they had detailed methods in place to monitor
and evaluate the performance of their executive officers and described
incentive plans or bonuses available for meeting specific performance
targets.
Board Elections
For each of the regional corporations, board directors terms are 3 years
and staggered, so that generally one-third of the director positions are up
for election every year. Five corporations also require representation on
their boards from specific geographic areas within the region
(see table 5). For example, one corporation requires that at least one
director come from each of the regions villages, whereas another
established units corresponding to certain villages or communities and
38
In their annual proxy statements and other reports, SEC registrants must provide a
comprehensive discussion and analysis of executive compensation policies, including
(1) the specific items of corporate performance taken into account in setting compensation
policies and making compensation decisions and (2) how specific elements of
compensation are structured and implemented to reflect the companys performance and
the executives individual performance. In addition, under the Dodd-Frank Act, SEC
registrants generally must conduct a shareholder advisory vote to approve executive
compensation at least once every 3 years. This requirement does not apply to the regional
corporations. According to one corporation, advisory resolutions regarding executive
compensation are put forth by shareholders at most of the corporations annual meetings.
Page 22
specified a minimum number of directors who must come from each unit.
In addition, the corporations have varied in how they evaluate and
recommend candidates and conduct their elections. For instance, about
half the corporations boards have nominating committees to assess
potential candidates and develop or recommend to the board a slate of
nominees. These corporations often pay campaign expenses for their
board slate, but most of them also provide information in their proxy
statements on other candidates, known as independent candidates, and
include the independents names on their proxy at no cost to the
candidates. Independent candidates may also run for election using their
own proxy solicitations. Successful independent candidates may or may
not be reimbursed by the corporation for their campaign expenses,
depending on the corporation.
In contrast to those corporations with a board slate, five corporations
boards do not develop a board slate but, rather, generally include in their
proxy statements all interested and qualifying candidates, as long as the
candidates submit certain required information, such as biographical and
conflict-of-interest information and, in the case of one corporation, petition
signatures by at least 10 voting shareholders other than the candidate.
These corporations pay for the proxy solicitations, but similar to those
corporations with board slates, candidates may or may not be reimbursed
by the corporation for other campaign expenses. A few shareholders we
heard from said it is expensive to run for a board position. For example,
they said, sending campaign information through the mail to all
shareholders could cost thousands of dollars, given the shareholders
dispersed and often remote locations. We heard from a few shareholders
that the corporations will share only mailing addresses and campaigning
via e-mail or other electronic means may therefore not be an option for
Page 23
interested candidates. 39 Several corporate officials we spoke with noted

that their corporations do not use e-mail to solicit proxy solicitations and
that they provide only shareholder mailing addresses to interested
independent candidates because the corporations solicit proxies by mail.
Table 5: Election Information for the Regional Alaska Native Corporations, 2001-2011
Number
of board
directors
Corporation
Ahtna, Incorporated
Geographic
representation
requirements
Board
slate
13
Yes
No
Number of
2001 directors
serving in 2011
5
No
No
15
Yes
No
15
No
No
12
No
Yes
Calista Corporation
11
Yes
Yes
No
Yes
15
No
Yes
Doyon, Limited
13
Yes
Yes
3
a
4
b
No
Yes
23
Yes
No
13
No
Yes

a
Through its 2005 election, the Arctic Slope Regional Corporation identified board-endorsed
candidates.
In August 2010, Doyon, Limiteds board voted to cease developing a board slate, starting with its
2011 elections.
39
Alaska corporate law requires a corporation to make its record of shareholders and
books and records of account reasonably available for inspection and copying by a
shareholder of the corporation, upon a written demand stating with reasonable particularity
the purpose of the inspection. In 2011, the Alaska Supreme Court ruled that this statute
provides shareholders with a right only to inspect and copy and not a right to have books,
records, or documents delivered electronically, by mail, or otherwise. The court also ruled
that this statute does not require corporations to keep phone and e-mail addresses in its
shareholder records, so the law does not require corporations to permit shareholder
inspection of them. Henrichs v. Chugach Alaska Corp., 260 P.3d 1036, 1041-42 (Alaska
2011). A state trial court also ruled in 2011 that on the basis of the statutes language,
case law, and statutory history, a regional corporation was not obligated to divulge
information on individual executive compensation in response to a shareholder request.
Pederson v. Arctic Slope Regional Corp., No. 3AN-09-10971 CI (Alaska Superior Ct. Feb.
4, 2011) (order on reconsideration of motions for summary judgment).
Page 24
All of the corporations use cumulative voting for their elections of

directors. Cumulative voting means that each shareholder has a number
of votes equal to the number of shares he or she owns multiplied by the
number of directors to be elected. For example, if a shareholder owned
100 shares and four directors were up for election, the shareholder would
have 400 votes and could cast all 400 votes for one candidate or divide
his or her votes among the candidates. In addition, nine corporations
allow their shareholders to return a discretionary proxy, meaning that
shareholders may grant the board or other specified proxy holders
discretion to cast their votes as the proxy holders see fit; for the
three corporations that do not solicit discretionary proxies, any votes that
are not directed to a particular candidate are counted only toward
reaching a quorum.
Several corporations indicated that achieving a quorum for their annual
elections can be challenging, but they have been successful over the last
several years in obtaining the required participation of shareholders to
elect directors for the board. To have a valid election, a quorum of
shareholders must be represented at the meeting in person or by proxy.
Four corporations quorum is one-third of voting shares, and the other
eight corporations quorum is a majority of voting shares. 40 To encourage
shareholders to vote, all 12 corporations offer monetary prizes or other
incentives to shareholders voting in the annual election of directors. 41
Seven corporations also allow shareholders to vote online; a few
corporations said they have considered online voting but determined it
may not be feasible or worthwhile, because, for example, many of their
shareholders live in remote locations where Internet access is limited.
In reviewing the regional corporations election outcomes during the
10-year period from 2001 to 2011, we found that more board-endorsed
candidates or incumbents have won elections than independent
40
According to the bylaws of the 13th Regional Corporation, its quorum is one-third of
voting shares.
41
The Alaska Department of Commerce, Community, and Economic Developments

Division of Banking and Securities position is that prizes for shareholders returning
proxies are allowable only when they are available to all voting shareholders regardless of
the proxy chosen. In 2011, the Alaska Supreme Court ruled that a regional corporations
bylaws authorized the board to offer a prize as an incentive for shareholders to return their
proxies by a specified deadline for any proxyholder or candidate and that the prizes were
not illegal distributions or vote buying, since the incentive did not favor any candidate.
Heinrichs v. Chugach Alaska Corp., 260 P.3d 1036, 1044-45 (Alaska 2011).
Page 25
candidates but that board director positions have also changed hands
numerous times. Some shareholders we spoke with said that their
corporations use of a board slate and discretionary voting has made it
difficult to elect independent candidates. We found that for the
corporations with board slates, elections were won mostly by board slate
nominees. We also found, however, that at least one independent
candidate was elected during the 10-year period at all but one of these
corporations; one corporation elected no independent candidates.
Similarly, for the corporations without board slates, we found that
incumbent directors who ran for reelection largely won, but it was not
uncommon for at least one incumbent candidate to be unseated across
these corporations during any one election cycle. In addition, in most
elections across the 10-year period, candidates outnumbered the
available seats on the board of directors, although we found that for the
corporations with village-specific or other geographical restrictions on
certain board seats, a specific seat went uncontested in several elections.
Across the 12 corporations, director positions have turned over several
times during the last 10-year period. Roughly half or fewer of the directors
who were serving in 2001 were still serving in 2011 (see table 5).
Turnover has occurred for a variety of reasons, including resignations,
deaths, nominating committees not selecting incumbent board directors
for reelection, and incumbents losing board elections.
Shareholder Involvement
Legally, the role of shareholders in a corporation is limited, although the

regional corporations have developed a number of methods to seek
feedback from and encourage the involvement of their shareholders. For
instance, in addition to annual shareholder meetings, most regional
corporations annually hold informational meetings in all or a portion of the
villages located in their region and in other locations where significant
numbers of shareholders reside, such as Anchorage or the Pacific
Northwest. For these meetings, corporate officials or board directors
travel to communities to update shareholders on the corporations
business activities and finances and to enable shareholders to ask
questions, raise concerns, and offer comments and suggestions. The
corporations also provide news, updates, and other information to their
shareholders via corporate websites, electronic or printed monthly or
quarterly newsletters, and online social media like Facebook. In addition,
nine regional corporations stream their annual meetings online, allowing
shareholders to participate remotely. Several corporations reported that
they have received good online participation, allowing some shareholders
to participate who might not otherwise be able to attend. For instance,
one corporation reported to us that shareholders could view its 2012
Page 26
annual meeting via webcast for the first time, and approximately
400 shareholders participated.
Three corporations have established shareholder advisory committees
comprising volunteer shareholdersrepresenting shareholders living both
within and outside of Alaskato learn about what matters to
shareholders, hear how the corporations can improve communications
and interactions with shareholders, and educate shareholders about
corporate policies and procedures, among other things. For example, one
corporation has established three shareholder committees to represent
shareholders living (1) in Anchorage, (2) in Alaska but outside Anchorage,
and (3) in the lower 48 states. Each committee consists of nine members
who are chosen by a random drawing from the names of those who
indicated interest in serving on the committee; chosen members serve
3-year terms. Two current directors from this corporation previously
served on the shareholder advisory committee, one of whom told us that
it was a great opportunity to learn more about the corporation and
become interested in serving on the board.
Further, six of the corporations open at least a portion of their regular
board meetings to shareholders. In a few instances, a request to attend
must be made in advance; in others, any interested shareholders may
attend. A few other corporations said they offered limited instances when
shareholders are invited to attend specific board meetings, such as when
the board may be meeting with visiting dignitaries or discussing a cultural
artifact. Additionally, many corporate officials we spoke with said they
have an open door policy, whereby shareholders can call or come to
their corporate offices to directly express concerns or obtain information.
Corporate officials also noted that many of the directors live in villages in
their region, and they receive feedback on corporate matters from
shareholders on a daily basis because their families, neighbors, and
coworkers are also shareholders.
We found that most regional corporations have surveyed their
shareholders for feedback over the past several years, although obtaining
a high survey response rate has been a challenge. All but two
corporations reported to us that they have surveyed their shareholders; a
few reported that they survey their shareholders on a regular basis, such
as every other year. Regional corporations have surveyed their
shareholders to gauge their general satisfaction with the corporation or to
obtain their views on specific topics, such as opening enrollment to
Alaska Natives or descendants born after the law was enacted in
December 1971, training or employment preferences, or special
Page 27
payments to elders. In the survey results we reviewed for the handful of

corporations that shared them with us, the corporations reported that
most shareholders expressed satisfaction with their corporation. For
example, in a survey conducted in 2008, 67 percent of shareholder
respondents for one corporation expressed positive overall feelings
toward their corporation, and 62 percent of the respondents said the
corporation did a good job of telling shareholders what the company was
doing. We also noted, however, that in many instances survey response
rates were fairly low, ranging from 6 to 46 percent. A few corporate
officials we spoke with acknowledged the participation challenge and said
they typically offer incentives, such as prize drawings, to improve the
response rate. We also spoke to several shareholders, who said they
were generally satisfied with their regional corporation and stayed abreast
of corporate activities by regularly reading corporate reports. On the other
hand, we also heard concerns from several other shareholders that
access to meaningful corporate information was lacking or that some
shareholders do not participate in surveys or other corporate activities
because they were frustrated or disappointed with the corporation.
In addition to participating in meetings and surveys, shareholders may
submit resolutions for inclusion in a board proxy solicitation regarding
corporate matters for a shareholder vote. Many corporations have specific
requirements for including proposed resolutions, such as setting time
frames for submission or limiting the number of resolutions that can be
submitted during any one year, and shareholder resolutions have often
been advisory. We found that from 2001 through 2011, shareholders from
five corporations submitted 1 or more resolutions during any one year (for
a total of 14 resolutions across the five corporations during this period). 42
Examples of submitted shareholder resolutions included limiting terms for
the board of directors to two consecutive terms, designating a specific
location for the corporations next annual meeting, and establishing a
settlement trust.
Another option available to shareholders if they are dissatisfied with
corporate policies or activities is to file a lawsuit against the corporation.
During our review, we identified several lawsuits that shareholders
brought against regional corporations, including challenges to the
42
The corporations boards of directors may also include in the proxy board-sponsored
resolutions for a shareholder vote. We found that from 2001 through 2011, 21 boardsponsored resolutions were put forward across eight corporations.
Page 28
corporations denial of shareholder access to corporate books and

records, 43 the settlement agreement governing the 7(i) distribution, 44 and
payments to elders made through a settlement trust or elder benefits
program. 45 Shareholders lost the lawsuits we identified except one case
that settled out of court and two cases that, as of this report, were still
pending. Nevertheless, in a few of these cases, neither federal nor state
law authorized shareholders to bring lawsuits challenging the
corporations action, and under state law, successfully challenging a
corporate boards business judgment is difficult. A few shareholders we
heard from expressed frustration that filing a lawsuit was their only
recourse, which can be very costly.
The Corporations Are

Subject to Some
Federal and State
Financial Reporting
Requirements and
Limited State
Oversight
The regional corporations are subject to some financial reporting

requirements under federal and state law, although oversight of the
reporting is limited. The Settlement Act generally exempts the
corporations from complying with federal securities laws while requiring
them to annually transmit a report to their shareholders that contains
substantially all the information required to be included in an SEC
registrants annual report to shareholders. 46 The act does not provide a
federal role for monitoring the corporations compliance with this
requirement, and the states oversight is generally limited to enforcement
of state securities laws and proxy regulations.
Federal and State

Financial Reporting
Requirements for Alaska
Native Corporations
Under federal law and state securities laws and regulations, the regional
corporations are subject to some financial reporting requirements. At the
federal level, the Settlement Act generally exempts the corporations from
complying with federal securities laws. As explained in a House
committee report accompanying an amendment to the Settlement Act,
43
Heinrichs v. Chugach Alaska Corp. 260 P.3d 1036 (Alaska 2011); Pederson v. Arctic
Slope Regional Corp., 3AN-09-10971 (Alaska Superior Ct.). (In a trial held in September
2012, a shareholder challenged the corporations denial of access to corporate documents
concerning a business transaction and executive compensation.)
44
Oliver v. Sealaska Corp., 192 F.3d 1220 (9th Cir. 1999).
45
Notti v. Cook Inlet Region, Inc., Nos. 01-35521, 01-35569. (9th Cir. 2002); Bodkin v.
Cook Inlet Region, Inc., 182 P.3d 1072 (Alaska 2008); Broad v. Sealaska Corp., 85 F.3d
433 (9th Cir. 1996).
46
43 U.S.C. 1625(c)(1).
Page 29
this exemption was based on the understanding that federal regulation of

the corporations was not necessary to protect Alaska Native shareholders
or the public during the period when Alaska Native-owned stock could not
be sold. 47 The report also noted, however, that if this assumption proved
invalid in light of experience, the committee was prepared to reimpose
provisions of federal securities laws as necessary and that the 20-year
exemption should be viewed by the Alaska Natives as an experiment
which would be stopped if abused. In 1988, the act was amended to
extend the exemption from securities law until after a corporation issued
shares of its stock to the public, shareholders voted to terminate the
restriction on sales, or the corporation registered with the SEC. As of this
report, none of these events had occurred, and the 13 regional
corporations therefore continue to be exempt from federal securities laws.
In discussing the federal securities exemption, the House committee
report recognized that the Securities Exchange Act of 1934 was designed
to inform the investing public about securities and also provided useful
information to shareholders. 48 Accordingly, the Settlement Act was
amended to require Alaska Native corporations to annually transmit a
report to their shareholders that contains substantially all the information
required to be included in an SEC registrants annual report to
shareholders. In addition, the Settlement Act required that the accounts of
the regional corporations be audited annually in accordance with
generally accepted auditing standards and that the corporations provide
shareholders with a copy, or a fair and reasonably detailed summary, of
the audit report. 49
The SEC has characterized an annual report to shareholders as the
principal document used by most public companies to disclose corporate
information to their shareholders. 50 Regulations promulgated under the
Securities Exchange Act of 1934 prescribe the information that SEC
47
H.R. Rep. No. 94-729 at 20 (1975).
48
H.R. Rep. No. 94-729 at 19 (1975).
49
43 U.S.C. 1606(o).
50
See http://www.sec.gov/answers/annrep.htm.
Page 30
registrants must provide in their annual reports to shareholders. 51 These

annual reports are to include, among other things, detailed information
about the financial performance of the corporation, audited consolidated
financial statements for the corporation and its subsidiaries, and a
presentation of selected financial data highlighting certain significant
trends in the companys financial condition and results of operations for
each of the last 5 fiscal years. A management discussion and analysis of
the corporations financial condition and results of operations are also
required. The SEC describes the management discussion and analysis
as an opportunity for management to help shareholders see the
corporations financial performance through the eyes of management; to
provide context within which the financial statements should be analyzed;
and to provide information about the quality of, and potential variability of,
a companys earnings and cash flow, so that investors can ascertain the
likelihood that past performance is indicative of future performance.
At the state level, regional corporations are subject to financial reporting
requirements included in the Alaska Securities Act and its implementing
regulations. This act requires that copies of all materials related to a proxy
solicitation must be filed concurrently with the states Division of Banking
and Securities if the solicitation has been made available to at least
30 Alaska resident shareholders of an Alaska Native corporation with
500 or more shareholders and total assets exceeding $1 million. 52
Documents related to a proxy solicitation that must be filed with the state
include annual reports to shareholders, proxy statements, proxies that are
mailed to shareholders, as well as materials distributed by other means
such as e-mail or websites. Proxy solicitation materials filed with the state
are available for public review, although the state maintains only printed
and not online copies. 53
51
Specifically, Rule 14a-3(b) establishes requirements for the information that is to be

included in annual reports to shareholders that must accompany or precede an SEC
registrants proxy solicitation for a shareholder meeting to elect directors. 17 C.F.R.
240.14a-3(b). This required annual report to shareholders differs from the more detailed
annual report (Form 10-K) that SEC registrants must file with the SEC.
52
Alaska Stat. 45.55.139. This provision applies only to Alaska Native corporations.
Although other corporations incorporated in Alaska are not required to file their proxy
solicitations with the state, state regulations govern their issuance of securities.
53
On September 27, 2012, the state proposed changes to the proxy solicitation
regulations to allow for electronic filing of annual reports and proxy solicitation documents
relating to certain Alaska Native corporations, among other things.
Page 31
Alaska Native corporations that meet the threshold requirement for filing
proxy solicitation materials are also subject to specific state regulations
governing the content of and process for proxy solicitation. 54 State
documentation describes these regulations as intended to protect both
the corporations and shareholders from unscrupulous individuals, by
promoting transparency in the solicitation process and the fairness of
elections. The regulations prohibit proxy solicitations from containing
material misrepresentationsgenerally defined as a statement that is
false or misleading with respect to a material fact or that omits a material
fact necessary to make a statement not false or misleadingand also
provide guidance and examples of what might constitute false or
misleading statements. In addition, the regulations require proxy
solicitations to be preceded or accompanied by a written proxy statement
including certain information. What information is required depends on
whether the solicitation comes from the boards of the regional
corporations or someone else, such as an independent candidate running
for a seat on the board, although the requirements overlap considerably.
For example, both types of proxy solicitations must be preceded or
accompanied by background information on board of director nominees,
such as involvement in any adverse legal proceedings with the
corporation, along with certain financial transactions between the
corporation and any entity in which the nominee, a board director, or a
member of the nominees or directors family is employed or has an
ownership interest. Proxy solicitations from a regional corporations board
of directors must also contain detailed information about the corporations
current directors and committees, among other information.
Federal and State

Oversight of Alaska
Native Corporations
Financial Reporting
The Settlement Act does not provide a federal role in ensuring that the
regional corporations comply with the acts reporting requirements; there
is limited oversight of the regional corporations financial reporting carried
out at the state level. Although the Settlement Act requires the regional
corporations to annually provide their shareholders with a report that
contains substantially all the information required to be included in an
SEC registrants annual report to shareholders, the act does not define
what substantially all means. In addition, the act does not authorize any
federal entity to monitor whether corporations are complying with this
54
3 Alaska Admin. Code 08.300-08.365.
Page 32
reporting requirement. 55 Although annual reports to shareholders are not

required to be filed with or reviewed by the SEC, a House committee
report indicated that Alaska Native leadership would comply fully with the
intent of this provision and submit annual reports to their shareholders
which are as effective in disclosing corporate activities as those prepared
by SEC registrants, and that Alaska law would provide protection for
Native shareholders from any corporate mismanagement and
misrepresentations or omissions in connection with sales of securities. 56
Because regional corporations are required to provide substantially all
the information required of SEC registrants in their annual shareholder
reports, we asked staff of the SEC to provide observations on the extent
to which the corporations 2010 annual shareholder reports include the
information required to be disclosed by SEC registrants. The SEC staffs
observations were subject to a number of limitations, as follows:
SEC staff did not evaluate the merits of any of the regional
corporations investments or determine whether an investment was
appropriate for any investor, consistent with the scope of its disclosure
review program of publicly reporting companies.
SEC staff did not interpret the Settlement Acts requirement that
regional corporations annual shareholder reports contain
substantially all the information found in an SEC registrants annual
report. Instead, in providing its observations, SEC staff assumed that
the regional corporations were required to include all of the
information required to be provided in an SEC registrants annual
report to shareholders.
SEC staff did not consider any information outside of what was
contained in the annual reports or engage in a dialogue with corporate
officials about any of their observations, as they normally would in
their regular disclosure review program. According to SEC staff, this
55
The Settlement Act originally required the corporations audited financial statements, or
a fair and reasonably detailed summary, to be transmitted to the Secretary of the Interior
and to the Committees on Interior and Insular Affairs of the Senate and the House of
Representatives. This requirement, however, did not authorize the Department of the
Interior to take any action with respect to the financial statements and was repealed in
1988. See Pub. L. No. 100-241, 12(a) (1988).
56
H.R. Rep. No. 94-729 at 20 (1975).
Page 33
additional information would have further informed their observations.

Accordingly, SEC staff noted that they were unable to determine
whether certain observations did in fact represent deficiencies or
noncompliant accounting or disclosures or whether they were able to
identify all material issues in providing us with their observations.
Nevertheless, SEC staff made a number of observations and raised
several questions where the information contained in the regional
corporations annual shareholder reports differed from what they would
have expected to see in an SEC registrants annual report. For example,
SEC staff noted that the management discussion and analysis
disclosures in most of the corporations annual reports did not fully
explain material uncertainties reasonably likely to affect future trends and
prospects, as they would have expected to see in an SEC registrants
report. SEC staff also noted that it was not clear to what extent certain
generally accepted accounting principles applied to the regional
corporations preparation of their financial statements. SEC registrants
are generally considered public and must follow accounting standards
for public corporations, whereas nonpublic corporations may not have to
follow certain accounting standards required for public companies. Since
the regional corporations are exempt from SEC regulation but are
required to produce annual shareholder reports containing substantially
all the information found in a report prepared by an SEC registrant, SEC
staff noted that it is unclear in some circumstances which accounting
standards and disclosures the corporations should follow.
Under state securities law, the state has the authority to regulate various
issues related to the regional corporations, primarily oversight of proxy
solicitations. According to state officials, the state has received a number
of inquiries about proxy solicitations from both shareholders and regional
corporations over the years. For instance, according to state officials, the
state received 59 inquiries about regional corporationsquestions
relating to proxy materials filed with the statefrom July 2011 through
June 2012. The inquiries covered a range of topics, including questions
from shareholders on how to file proxy materials or what materials,
including communications via social media, are considered to be proxy
solicitations, as well as questions from corporate officials seeking
clarification of the proxy solicitation regulations requirements. The state
also received inquiries about areas outside its jurisdiction, such as a
shareholder contesting the results of an election, in which case the state
advised the individual to seek legal counsel. According to state officials,
they were able to respond to and resolve all the inquiries within their
jurisdiction during this time period, and no further action was necessary.
Page 34
The state has the authority to review all proxy solicitations but largely
reviews only those solicitations for which a corporation or a corporations
shareholder has filed a complaint (i.e., a written request for the state to
investigate). Specifically, the state does not investigate to determine
whether all Alaska Native corporations meeting the threshold
requirements for filing proxy solicitations with the state actually do so, but,
rather, the state relies on self-reporting by the corporations. In addition,
state officials we spoke with said they do not automatically review the
proxy materials submitted by the regional corporations or their
shareholders because they do not have the resources to routinely review
proxy filings to assess compliance with the requirements. 57 Instead, the
state mostly relies on the corporations or their shareholders to monitor
filed proxy materials and to submit complaints if concerns of violations
surface, such as proxy materials containing materially false and
misleading statements.
According to information provided by state officials, from January 2010
through June 2012, the state received nine complaints involving four
regional corporations. Of these, one was filed against a shareholder of a
regional corporation by a corporate officer, seven were complaints filed
against a regional corporation by a shareholder, and the other was an
investigation initiated by the state into a regional corporations use of
social media. The state determined that four complaints involved matters
outside the states jurisdiction, and the state declined to open an
investigation into two others because the complaints included allegations
that were part of ongoing litigation between the parties; state officials told
us that to the extent that litigation may occur over an issue for which they
have also received a complaint, the state generally does not pursue its
own investigation but instead defers to the courts. The state opened an
investigation for the three other complaints but closed them without taking
further action.
For investigations where the state determines that a violation has
occurred, it has the authority to issue an administrative order to parties
57
The proxy solicitation regulations expressly state that the filing of proxy materials does
not constitute a finding by the state that the filings are accurate, complete, or not false or
misleading or that the state has passed upon the merits of or approved any statement in
the solicitation; see 3 Alaska Admin. Code 08.315(b).
Page 35
found to be in violation. 58 According to information provided to us by the

state, from 1978 through 2011, the state issued administrative orders in at
least 29 investigations of a regional corporations or a regional
corporation shareholders compliance with the states proxy regulations. 59
Six of the investigations involved a regional corporations board
solicitation, and 22 were related to shareholder solicitations. 60
Administrative orders issued have generally found one or more of the
following violations:
Failure to file with the state proxy material that meets the
requirements for filing.
Failure to include in proxy material information required by the proxy

regulations, the omission of which might also be materially false and
misleading.
Inclusion in proxy material of materially false and misleading

statements. For example, the state found a solicitation to be false and
misleading because it stated that the proxy holder was engaged in a
lawsuit against the corporation involving the corporations failure to
provide a shareholder list in a timely fashion, even though at the time
the solicitation was disseminated, the court had already ruled that the
corporation had timely provided the list.
In almost all orders, the state ordered the violator to cease the violation;
in many instances, the state ordered that any future proxy solicitations,
either indefinitely or for a specified time period, be filed with the state
before distribution to shareholders, and in some instances, the state
imposed a fine on the violator, with most fines set at $500.
58
The state notifies in writing the person who filed the initial complaint, the alleged violator,
and the corporation at issue of its decision whether to issue an order or take no action.
Before issuing any final orders, the state must provide reasonable notice of and
opportunity for a hearing.
59
Five of the investigations were resolved through consent agreements whereby the
alleged violator agreed to the sanctions.
60
One investigation involved a village corporations failure to comply with state proxy
solicitation requirements when it placed ads in a local newspaper requesting that
shareholders vote for two candidates seeking election to a regional corporations board of
directors.
Page 36
In addition, corporations or shareholders may file a lawsuit over their

concerns about a proxy solicitation. During our review, we identified a few
lawsuits brought by shareholders alleging that proxy solicitations
distributed by their regional corporations violated the law or regulations.
We also identified a number of lawsuits brought by regional corporations
alleging that shareholder solicitations contained false and misleading
statements. In the cases we identified brought by shareholderswho
alleged that the corporations proxy solicitation did not include required
information, contained false and misleading statements, or boththe
courts ruled in favor of the corporations, that is, that the corporations
solicitations were not false or misleading, although two cases were still
pending as of this report, and one settled out of court. 61 In contrast, in the
cases we identified brought by regional corporations, the courts ruled that
the shareholder solicitations contained false and misleading statements,
although one case was still pending in an appellate court as of this report,
and one settled out of court. For example, in one case, the court ruled
that a shareholders solicitation, which claimed that board directors
appointed themselves to top executive positions regardless of
qualifications, was false and misleading. 62
61
See Henrichs v. Chugach Alaska Corp., 260 P.3d 1036 (Alaska 2011) (Appeal of 3AN05-11014Cl), and Rude v. Cook Inlet Region, Inc., 3AN-10-09493CI (2012).
62
Arctic Slope Regional Corporation v. Rodney S. Pederson, 3AN-11-05733CI

(AK Superior Court).
Page 37
The Corporations
Provide Diverse
Monetary and
Nonmonetary
Benefits to Their
Shareholders and
Other Alaska Natives
The regional corporations provide a wide variety of benefits to their

shareholders and other Alaska Natives. Under the Settlement Act, the
corporations are authorized to provide benefits to promote the health,
education, or welfare of shareholders and other Alaska Natives, but they
are not required to do so. 63 As diverse as they are themselves, the
corporations provide an equally diverse array of benefits depending in
part on their financial means and on priorities related to shareholder
needs. 64 The articles of incorporation and mission statements of the
regional corporations establish their intent to provide economic, cultural,
social, or all three types of benefits, which the corporations have chosen
to do in both monetary and nonmonetary forms; benefits go to
shareholders, shareholders descendants, and others. We do not include
the 13th Regional Corporation in our discussion because, without
operating revenues, it has not provided tangible benefits to its
shareholders for many years.
Monetary Benefits
The 12 regional corporations provide a variety of monetary benefits to

their shareholders and others, including dividends, elder benefits,
scholarships, memorial benefits, shareholders equity, and charitable
donations, as follows:
Dividends. The most broadly dispersed monetary benefit consists of

cash dividends paid per share to shareholders. Shareholders and
officials from several regional corporations told us that dividends are
often considered the most important benefit shareholders receive from
the corporations. We heard from several corporations that dividend
payments to shareholders provide a critical source of income to help
63
Amendments to the Settlement Act in 1998 confirmed the corporations authority to

provide benefits to promote the health, education, or welfare of shareholders and their
family members and that such benefits may be provided on a basis other than pro rata
based on share ownership. Pub. L. No. 105-333, 12 (1998), codified as amended at 43
U.S.C. 1606(r).
64
On February 11, 2011, SBA issued a final rule making changes to the regulations
governing the 8(a) program, including a new requirement for Alaska Native corporations
with subsidiaries participating in the program to annually submit information demonstrating
how their participation has benefited Alaska Natives, the Native community, or both
(76 Fed. Reg. 8222 (Feb. 11, 2011)). While the final rule took effect on March 14, 2011,
SBA delayed implementation of the benefits reporting requirement until September 9,
2011. However, as of this report, SBA had not yet finalized its method for collecting the
benefits information. SBA reported that in the absence of a finalized format, subsidiaries
have submitted the information using their own formats.
Page 38
defray living expenses, such as high heating costs during the winter.
The total dividends per share paid by each of the 12 regional
corporations during the 2010 reporting period varied considerably,
ranging from $2.35 per share at one corporation to $64.26 at another
(see table 6). The regional corporations boards annually determine
and approve dividend amounts on the basis of factors including the
corporations financial performance, and some have established
formulas, such as a targeted percentage of net income, or a
permanent fund out of which dividends are to be paid.
Table 6: Financial and Dividend Information as Reported by the Regional Alaska Native Corporations, 2010
Corporation
Ahtna, Incorporated
Gross revenue
(thousands
of dollars)
Net income
(thousands
of dollars)
$243,430
$1,739
Actual dividends
and distributions
paid in total
(thousands
b
of dollars)
Actual dividends
and distributions
as a percentage of
net income
$880
51%
92
Declared
dividends
per share
a
(dollars)
$4.00
143,046
8,381
21.00
7,670
2,331,681
164,433
64.26
73,667
45
197,706
8,848
2.35
1,488
17
1,667,200
43,017
13.80
7,307
17
23
35
Calista Corporation
234,866
18,301
2.75
936,975
26,492
41.92
9,270
188,357
16,535
35.42
22,236
d
46
45
4,161
Doyon, Limited
280,268
15,678
4.21
131,052
8,654
10.50
3,903
14.00
53
$7,690
51%
1,592,826
41,173
$223,823
$15,154
$3.56
7,253
135
21,714
Source: GAO analysis of data from the regional Alaska Native corporations.
Note: The regional corporations financial information presented in this table reflects a single-year
snapshot and may not be representative of past or future financial performance or dividends and
distributions paid to shareholders. Unless otherwise noted, the numbers in this table represent
amounts reported by the corporations in their audited consolidated financial statements and
accompanying notes, both of which were contained within the corporations annual reports to
shareholders for the 2010 reporting period.
a
Amounts in this column represent the corporations declared dividends per share during the 2010
reporting period, which are amounts authorized by the board of directors to be paid to shareholders.
For corporations that issue more than one class of shares, these declared dividend amounts may or
may not correspond to declared dividends for each class of shares.
Amounts in this column represent the total dividends paid by the corporations during the 2010
reporting period, including, for some corporations, distributions to elder shareholders.
Declared dividend amounts for this corporation were contained in the corporations annual report to
shareholders but outside of its audited consolidated financial statements.
Page 39
These amounts were declared in the 2010 reporting period but were paid the following year.
Cook Inlet Region, Inc., does not base its dividend payments on its net income but, rather, pays a
dividend equal to 3.5 percent of shareholders equity, that is, the monetary value of the corporations
assets minus its liabilities.
In analyzing the corporations financial data for the 10-year period

from 2001 through the 2010 reporting period, we found that not all
corporations provided dividends every year. Each of the
12 corporations paid dividends in recent years, but a handful of
corporations did not provide dividend payments in the early 2000s;
some corporations struggled financially or declared bankruptcy in the
past. 65 Our analysis showed that for the 10-year period, the
cumulative total in dividends per share ranged from $5.50 per share to
over $600 per share; for half the corporations, the cumulative total
amounted to approximately $34 to $100 per share over the period.
Thus, a shareholder owning 100 shares could have received from
$550 to as much as $60,000 over the period; typically, however,
shareholders would have received about $3,400 to $10,000.
Elder benefits. In addition to dividends, almost all the regional

corporations provide monetary payments to elder shareholders.
Specifically, 11 corporations make cash payments, often quarterly or
annually, to their elder shareholders, starting at age 60, 62, or 65,
depending on the corporation. The regional corporations provide
these paymentswhich ranged from $300 to $4,000 per individual
during the 2010 reporting periodthrough various mechanisms,
including from designated trusts, as a separate class of shares, or in
cash payments authorized by the corporations boards. 66 Several
corporate officials we spoke with commented that these payments
65
Regarding the 13th Regional Corporation, one shareholder we spoke with, who actively
tracked and maintained documentation on the corporations activities, said that since the
corporation was established, it twice provided dividends to its shareholders: once in 1989
at 11 cents per share and another in 2000 at 50 cents per share.
66
At least two corporations have established settlement trusts to provide cash distributions
to elder shareholders. In 1988, the Settlement Act was amended to authorize Alaska
Native corporations to establish a settlement trust under Alaska state law if shareholders
approved a resolution to convey corporate assets, except subsurface estates, to the trust.
The 1988 amendment also authorized shareholders to vote to issue additional shares to
Alaska Natives who were 65 years old or older. Shareholders who voted to do so have
voted to establish a separate class of shares known as elder shares.
Page 40
often constitute an important source of income for elder shareholders,

who may not otherwise have a retirement income.
Scholarships. The 12 regional corporations support a variety of

educational scholarships to their shareholders and, in some cases, to
descendants of shareholders. In general, the corporations provide
funding to closely affiliated nonprofit organizations, such as
foundations endowed by the corporations, which then award
scholarships to qualifying undergraduate, graduate, or vocational
students. During the corporations 2010 reporting period, each of the
12 corporations reported to us that they provided funding to support
individual scholarship awards made by the nonprofit organizations, in
amounts varying by corporation and by type of scholarship award
(see table 7). In some cases, scholarships are competitive; in other
cases, corporate officials said they try to provide funding to as many
eligible applicants as possible.
Table 7: Scholarship Information as Reported by the Regional Alaska Native Corporations, 2010
Corporation
Scholarship provider
Ahtna,
Incorporated
Ahtna Heritage
Foundation
The Aleut
Corporation
Aleut Foundation
Scholarship support
Higher education scholarships to shareholders
Students may receive $2,000 each per semester for full-time study, $1,000
each per semester for part-time study
Total of $187,000 provided to foundation
Arctic Slope
Regional
Corporation
Arctic Education
Foundation
Bering Straits
Native Corporation
Bering Straits Foundation
Bristol Bay Native

Corporation
Bristol Bay Education

Foundation
Calista Corporation Calista Scholarship Fund
Page 41
Higher education and vocational scholarships to shareholders or shareholder

descendants
Total of $615,315 provided by foundation for almost 200 scholarships
Higher education, training, and leadership scholarships to shareholders,
shareholder descendants, or other Alaska Natives living in the region
Total of $3.4 million provided to foundation, which awarded 425 scholarships
descendants
Students may receive $400 to $1,000 per semester or quarter
Total of $209,514 provided by foundation for 148 scholarships
Higher education and vocational scholarships to shareholders
Students may receive $1,500 to $5,500 per year
Total of $400,000 provided to foundation for 156 scholarships
Higher education scholarships to shareholders or shareholder descendants with
ties to the Calista region
Students may receive $500 to $1,000 per semester, depending on grade point
average
Total of $293,250 provided by fund for more than 200 scholarships
Corporation
Scholarship provider
Scholarship support
Chugach Alaska
Corporation
Chugach Heritage
Foundation
Cook Inlet Region,

Inc.
CIRI Foundation
Doyon, Limited
Doyon Foundation
Koniag,
Incorporated
Koniag Education
Foundation
NANA Regional
Corporation
Aqqaluk Trust
Sealaska
Corporation
Sealaska Heritage
Institute
Higher education scholarships to shareholders or shareholder descendants

Students may receive $4,800 to $6,000 per academic year for undergraduate
study to $12,000 per academic year for graduate study
Total of $851,632 provided by foundation to more than 200 recipients
descendants
Students may receive up to $5,000 per academic year for full-time study and up
to $4,500 per academic year for part-time study
Total of $292,592 provided to the foundation for 431 recipients
descendants
Students may receive $400 per semester to $7,000 per year
Total of $482,771 provided by foundation to about 400 recipients
Students may receive up to $2,500 per year for general scholarships
Total of $153,450 provided to the foundation
Higher education and vocational scholarships to shareholders, shareholder
descendants, or dependents of shareholders or their descendants
Students may receive $2,000 per term for full-time study and $1,000 per term
for part-time study
Total of $803,920 provided by trust to 275 recipients
Total of $298,000 provided by the institute for roughly 400 scholarships
Source: GAO analysis of information from the regional Alaska Native corporations.
Memorial benefits. Most regional corporations provide financial

assistance to their shareholders and, in some cases, to shareholder
descendants or other family members to help with funeral-related
expenses related to the death of a shareholder, spouse, or
descendant. 67 Financial assistance can be used for burial or funeralrelated expenses, including travel by family members, which may
allow shareholders to maintain Alaska Native burial traditions and help
offset the high costs of travel in Alaska. Most corporations reported
that they set a cap on the amount of financial assistance available per
individual or family, ranging from $500 to $3,000, depending on the
corporation.
67
Memorial benefits may be provided directly from the regional corporations or through
corporation-affiliated nonprofit organizations.
Page 42
Shareholders equity. Shareholders equity has been described by

some of the regional corporations as a benefit, but because
shareholders cannot currently sell their shares for a monetary return,
they may not view such equity as a benefit. Shareholders equity is
the net assets of the company, that is, the value of a companys
assets minus its liabilities. According to a Department of the Interior
study on Alaska Native corporations, the values of the regional
corporations are difficult to estimate in the absence of a market for
their shares. 68 Moreover, absent a market value, shareholders cannot
in effect express confidence or lack of confidence in the corporations
management of the shareholders assets by buying or selling their
shares. Nevertheless, in their 2010 reporting period, the 12 regional
corporations reported total shareholders equity values ranging from
$15 million to about $1.1 billion (6 regional corporations reported
equity per share, which ranged from about $83 to nearly $1,000 per
share). In contrast to the corporations view, a number of shareholders
we heard from said that shareholders equity has little real value to
them since they cannot sell shares for a tangible monetary benefit.
Charitable donations. The regional corporations each make a variety

of charitable monetary and in-kind donations to regional nonprofit
organizations and other entities that offer services to corporation
shareholders and others in the communities. For instance, most of the
corporations reported that they provide funding or other support to
housing authorities, health organizations, or vocational schools
located in their regions. One corporation, for example, provides
funding to a flight school that trains private and commercial pilots, a
particularly useful skill given that many Alaska Native villages are
accessible only by plane (see fig. 2). Flight school officials told us that
a local airline hires nearly all of the schools graduates. Another
corporation provides funding to a vocational facility in the region,
which offers junior and high school students varied training, such as
drivers education, metal welding, and small-engine repair.
Representatives at some of the nonprofit organizations we visited
stressed the importance of the regional corporations support in
maintaining their operations and programs. The corporations also
make in-kind donations, such as firewood for winter heating, including
68
Department of the Interior, Alaska Native Claims Settlement Act (ANCSA): ANCSA 1985
Study (Washington, D.C.: 1985).
Page 43
delivery to elders and others unable to haul it themselves, or gravel

for village infrastructure from corporation-owned gravel pits.
Figure 2: Examples of Benefits Supported by the Regional Alaska Native Corporations
Nonmonetary Benefits
Nonmonetary benefits offered by the regional corporationsoften in

partnership with village corporations, tribal organizations, and nonprofit
organizations within the regioninclude employment opportunities;
cultural preservation; land management; economic development; and
advocacy on behalf of Alaska Natives and their communities. Specific
benefits may include, but are not limited to, the following:
Page 44
Employment and related opportunities. The 12 regional corporations

or their subsidiaries may employ Alaska Native shareholders in
preference over others (see table 8). 69 They may also offer
internships and other employment support. Some regional corporation
officials told us that employing shareholders is an important priority to
them, and they actively train and employ shareholders in their
businesses. For example, according to one regional corporation,
55 percent of the employees at its zinc-lead mine are shareholders.
According to corporation officials, employment opportunities for
shareholders living within the region were an important consideration
in initially determining whether to develop the mine. Officials from a
few other regional corporations, in contrast, told us that their
corporations have not emphasized creating employment opportunities
because it has not been a high priority for their shareholder base or
that business and employment opportunities may not be readily
available where shareholders reside. In addition to hiring shareholders
and other Alaska Natives directly, the corporations have internship
programs for shareholders and, in some cases, for shareholder
descendants or spouses. Internships vary from 6- to 12-week summer
internships to longer internships or apprenticeships that can lead to a
permanent position with a regional corporation. Several corporations
also offer other employment support to their shareholders, such as
providing career counseling, job fairs, and leadership training to retain
shareholders as managers and leaders within the corporation.
69
To facilitate Alaska Native shareholder employment programs, the 1988 amendments to

the Settlement Act excluded Alaska Native corporations and some entities owned by the
corporations from the provisions in civil rights laws prohibiting discrimination in
employment. Pub. L. No. 100-241, 15 (1988), codified at 43 U.S.C. 1626(g); S. Rep.
No. 100-201 at 39 (1987).
Page 45
Table 8: Employment of Alaska Natives by the Regional Corporations and Their Subsidiaries, as Reported by the
Corporations
Number of employees
Corporation
Subsidiaries
Total
employees
Shareholder
a
employees
(percentage)
Total
employees
Shareholder
a
employees
(percentage)
Ahtna, Incorporated
29
11 (38%)
1,780
68 (4%)
14
9 (64)
523
33 (6)
63
22 (35)
1,031
46 (4)
34
22 (65)
3,486
88 (3)
Corporation

c

Calista Corporation

Doyon, Limited
53
30 (57)
1,351
52 (4)
307
51 (17)
5,086
56 (1)
79
40 (51)
1,276
51 (4)
74
51 (69)
2,761
438 (16)
57
23 (40)
695
12 (2)
102
97 (95)
10,846
1,147 (11)
71
56 (79)
1,309
67 (5)
Source: GAO analysis of data from the regional Alaska Native corporations.
Note: These data represent the regional corporations employment numbers as reported by the
corporations as of dates occurring from March to October 2012.
a
Unless otherwise noted, numbers of employees in this column include the regional corporations own
shareholders plus descendants of those shareholders; in some cases, these numbers may also
include shareholders or descendants of shareholders of other regional corporations. Numbers in
parentheses represent employees who are shareholders or descendants of shareholders as a
percentage of all employees of the corporation or of its subsidiaries.
Data not provided.
This corporation does not track the number of employees who are descendants of shareholders.
Cultural preservation. The regional corporations have supported

numerous cultural activities focused on preserving and maintaining
Alaska Native traditions and heritage. Nearly all of the corporations
have established nonprofit organizations or heritage centers, many
with the express purpose of administering cultural and educational
programs to preserve and honor unique Native cultures. Cultural
activities supported by regional corporations include programs for
youth and elders, Alaska Native community events, and language and
artifact preservation. For example, several corporations sponsor
youth-elder camps, featuring activities such as language learning and
gathering and preparing subsistence foods that help transmit Native
Page 46
traditions from one generation to the next. Other corporations support

groups or events centered on traditional art forms and languages,
such as crafts, Native songs and dances, and the development of a
compact disc teaching an Alaska Native language. Still other
corporations have focused on protecting sacred and historical sites
and Native artifacts. For example, one corporation helps protect more
than 80 sacred historical sites located throughout the region on behalf
of tribal entities that are the traditional owners of the sites, which
include historical burial grounds, forts, petroglyphs, and villages.
Land management. The regional corporations actively manage their

surface lands for subsistence and recreation by their shareholders
and other Alaska Natives, as well as for natural resource use and
protection. Many corporations indicated that subsistencewhich
plays a key role in Alaska Natives livelihoods and traditional culture
is often a primary or highest-priority use of their lands; subsistence
activities include hunting, trapping, fishing, and food gathering and
camps associated with these activities. Natural resource use and
protection include a wide variety of activities such as working with
research partners to study topics related to sustainable management
of corporate natural resources, including timber, wildlife, and
renewable energy potential; harvesting and marketing of corporate
natural resources; managing property leases, and easements;
developing strategies to promote outdoor tourism; and patrolling
corporate lands against trespassing, particularly for those
corporations with road systems in the regions.
Economic development. With their size and relative profitability, the

regional corporations take actions to foster economic development in
their regions, typically working in partnership with other regional or
community organizations. For example, one corporation is working
with a regional Native health association to build a 33,000-square-foot
multidisciplinary health facility on corporation-owned land (which is
leased to the association for 50 years at $1 per year). The facility is to
house dental and health clinics, as well as behavioral health, tribal
community, and environmental health services. Another corporation
has established a joint business venture with a village corporation to
bring an out-of-use seafood plant back into production. The regional
corporations are also involved in various wayssuch as seeking
funding or procuring physical resourcesin infrastructure or energy
development. Several regional corporation officials told us that energy
development is a high priority for them, to help reduce the high costs
of energy in Alaska Native villages. These corporations, for example,
are exploring renewable energy development opportunities, including
Page 47
wind power generation on varying scales, and others are exploring or

investing in other alternative heating sources, such as solar power,
geothermal heat, or wood pellet heating.
Questions to Consider
for the Future
Advocacy. Officials from several regional corporations said they serve

as advocates for Alaska Natives and the communities they live in,
partly because they have lobbying resources and legal expertise that
local populations may not. 70 The regional corporations may lobby
state and federal legislatures directly on behalf of their shareholders,
or they may work through other Alaska Native advocacy
organizations. One corporation, for example, successfully lobbied the
Alaska state legislature to pass a bill in support of a commercial
oyster industry in its region, which established a loan program for
entrepreneurs wishing to engage in this industry. Officials from
another corporation routinely attend meetings with the Alaska
Department of Fish and Game to represent village interests in
subsistence fishing and hunting rights. In addition, each of the
regional corporations is a member of the Alaska Federation of
Natives, the largest statewide Native organization in Alaska. The
organizations mission includes, among other goals, advocating for
Alaska Native people, fostering and encouraging preservation of
Alaska Native cultures, promoting understanding of Alaska Natives
economic needs, and encouraging development consistent with those
needs.
Over the last 40 years, the regional corporations have evolved along with
the Alaska Native Claims Settlement Act, which has been amended
several times. Given the evolution and growth of the regional
corporations, we identified three questions that may warrant consideration
and discussion by the federal government, the state, the regional
corporations, shareholders, or a combination of these entities, as the
corporations move into the future. We identified questions regarding the
ambiguity of existing federal financial reporting requirements for the
corporations, the role of the federal government in maintaining the
corporations solvency, and the implications of defining who is eligible to
70
Under Pub. L. No. 108-199 (2004), as amended, the Director of the Office of
Management and Budget and all federal agencies are required to consult with Alaska
Native corporations on the same basis as Indian tribes under Executive Order 13175. This
order directs the heads of federal agencies, other than independent regulatory agencies,
to consult with Indian tribes on policies that have tribal implications, such as regulations or
rulemakings that may directly affect tribal treaty rights, lands, or governments.
Page 48
be a shareholderthis last question specifically for the corporations and

their shareholders to consider. We pose these questions only for
consideration and discussion and not to advocate a particular response or
outcome.
Should the Substantially

All Federal Reporting
Requirement Be Clarified
and Overseen?
Under the original Settlement Act, the corporations were to remain

exclusively Native owned for a period of 20 years, and after a 1976
amendment, they were to be exempt from federal securities laws while
they were Native owned. The 1988 amendments extended the Settlement
Acts prohibition on sales of stock and continued the corporations
exemption from federal securities laws until certain events occurred.
Nevertheless, the corporations are required to annually transmit a report
to their shareholders that contains substantially all the information
required to be included in an SECs registrants annual report to
shareholders. We were unable to determine whether the corporations are
complying with this reporting requirement because the phrase
substantially all is not defined. As a result, it is not clear which
information is required or the extent to which any required information
must be included in regional corporations annual reports. Furthermore,
the Settlement Act does not establish a mechanism for federal oversight
of the corporations reporting.
Corporate officials we spoke with acknowledged that substantially all is
not defined in the Settlement Act and that the phrase could be clarified.
They also stated that they do not believe they should have to comply with
all of the reporting requirements for SEC registrants because many of the
requirements are not relevant to Alaska Native corporations. Specifically,
corporate officials said, many SEC requirements are directed toward
providing information to potential investors, which is not directly relevant
to regional corporations as long as the corporations remain Native owned
and closed to outside investors. However, in their observations about the
corporations annual shareholder reports, SEC staff noted that additional
information in the annual reports could inform shareholder voting on
directors and resolutions and allow shareholders to better understand the
regional corporations financial performance.
Page 49
What Is the Appropriate

Role of the Federal
Government in
Maintaining the Solvency
of Alaska Native
Corporations?
Over the past 40 years, some regional corporations have experienced

periods of financial crisis, and legislation has been enacted to help ensure
their continued financial solvency. For example, in the 1980s the
corporations were authorized to sell their net operating losses, even
though other corporations were generally prohibited from doing so, 71 and
more recently they were provided with special contracting advantages
under the SBAs 8(a) programadvantages that have come under
congressional scrutiny in recent years. 72 At this time, the 12 regional
corporations in Alaska are on relatively sound financial footing, and they
also have both land holdings and natural resource revenue sharing
through the 7(i) distribution to help contribute to their revenues. If,
however, one of these 12 regional corporations became insolvent, it is not
clear what would happen to its land holdings and shareholders.
On the other hand, given the insolvency of the 13th Regional Corporation,
its advocates have sought assistance from the Department of the Interior
and the Congress. Specifically, the Alaska Federation of Natives on
behalf of the 13th Regional Corporation requested accounting, legal, and
administrative assistance from the Department of the Interiors Bureau of
Indian Affairs, as well as funding to assist the corporation in its efforts to
reorganize, prepare for new elections, and pursue land claims. In
response to questions about Interiors responsibility to shareholders of the
Alaska Native corporations and specifically to shareholders of the 13th
Regional Corporation, Interiors Assistant Secretary for Indian Affairs
stated that the Bureau of Indian Affairs currently has neither a statutory
nor a regulatory responsibility to Alaska Native corporations. The
Assistant Secretary further stated that the bureau has no responsibility to
ensure that Alaska Native corporations are meeting their legal obligations
71
In 1984, an amendment to the tax code prohibited corporations, except for Alaska
Native corporations, from selling net operating losses, a tax-sheltering device whereby a
profitable company buys the losses of an unprofitable company and sets off those losses
against its own taxable income. For example, an Alaska Native corporation could sell for
$10 timber valued for tax purposes at $110. The Alaska Native corporation could then sell
the $100 loss to a profitable corporation, which could in turn apply the $100 loss against
its taxable income and thus lower its own tax burden. According to the legislative history of
the 1984 amendment, sales of net operating losses could bring an infusion of capital to
help many Alaska Native corporations that were in poor financial shape and had large net
operating losses. By some accounts, 11 regional corporations sold around $1.5 billion in
net operating losses for $425 million in revenue before the exception authorizing Alaska
Native corporations to do so was repealed in 1988.
72
GAO-06-399 and GAO-12-84.
Page 50
and that it does not have the authority to assist the 13th Regional
Corporation (or any other Alaska Native corporation) in any
reorganization efforts.
In addition, advocates for the 13th Regional Corporation have also sought
assistance through Congress. Specifically, legislation was proposed in
2006 and 2008 that would have authorized the conveyance of over
1 million acres of land in Alaska to the 13th Regional Corporation for it to
manage and required that it share a portion of natural resource revenue
derived from the land with the other regional corporations. 73 More
recently, representatives from the 13th Regional Corporation have
promoted an alternative proposal they would like to see as a bill
introduced in Congress. Under this proposal, the 13th Regional
Corporation would receive over 1 million acres of land, which the other
regional corporations would manage and share a larger portion of that
lands associated natural resource revenue. As of this report, however,
this proposal had not been acted upon.
Also, several shareholders we spoke with suggested that the 13th
Regional Corporations shareholders be allowed to become shareholders
of one of the other 12 regional corporations. Amendments to the
Settlement Act, however, would be necessary to authorize such an
action. The debate about the future of the 13th Regional Corporation
raises the question as to what role, if any, the federal government is to
play in addressing solvency issues for Alaska Native corporations.
Who Should Be a
Shareholder?
A question specifically for the regional corporations and their

shareholders to consider is who should be a shareholder in the future,
particularly given the implications that shareholder ownership of the
corporations has on the corporations future operations, benefits, and
direction. Shareholder eligibility criteria have changed since the
corporations were established and may continue to change under the
1988 and 1992 amendments to the Settlement Act. Under the original act,
only those Alaska Natives with at least a 25 percent blood quantum who
were alive on December 18, 1971, were eligible to become shareholders,
and these restrictions were to end in 1991. The 1988 amendments,
however, extended these restrictions until and unless a majority of a
73
H.R. 5617, 109th Cong. (2006), and H.R. 5403, 110th Cong. (2008).
Page 51
corporations shareholders voted to lift them and allow sales of stock to

the public. As of this report, none of the corporations had voted to lift the
restrictions on the sale of stock, and many of the corporate officials we
spoke with expressed their strong desire to remain Alaska Native
owned. 74
In addition, amendments to the Settlement Act allowed the corporations
shareholders to vote to amend the articles of incorporation to authorize
the issuance of shares to Alaska Natives born after December 18, 1971,
or to descendants of Alaska Natives; to eligible Alaska Natives who
missed enrollment; or to Alaska Native shareholders who are 65 years old
or older. Shareholders of 6 of the 13 corporations have voted to issue
shares to some or all of these classes of shareholders, although who is
eligible to receive the shares varies considerably among the corporations
(see table 9). Some of the other corporations are still studying the issue of
opening enrollment. For example, in 2011, Calistas shareholders
approved a resolution calling on the corporation to examine, formulate,
and recommend for shareholders a program for approval of the issuance
of a new class of stock to descendents of shareholders born after
December 18, 1971. As result, the corporation has embarked on a 20- to
26-month process to examine, formulate, and recommend such a
program. If the proposed timetable is adhered to, the recommendation
could be voted on in 2013.
74
Critics of the stock-transfer restriction have suggested that the restriction prohibits
shareholders from selling their shares in instances where they may not be satisfied with
the corporation and that corporate management therefore has more leeway to pursue
objectives that might not be in the best interest of the shareholders. See, e.g., Stephen
Colt, Alaska Natives and the New Harpoon: Economic Performance of the ANCSA
Regional Corporations, 25 J. of Land, Resources, and Envtl Law 155 (2005).
Page 52
Table 9: New Classes of Shares Authorized by the Regional Alaska Native Corporations
Corporation
Natives who
Native shareholders
Natives born after
Dec. 18, 1971, or missed the original who have attained
a
b
c
enrollment
the age of 65
descendants
Ahtna, Incorporated
Arctic Slope Regional

Corporation
Doyon, Limited
g
i
Number of
shareholders
in 1982
Number of
shareholders
in 2011-2012
1,074
1,751
3,738
11,090
9,061
18,536
3,342
3,696
4,828
12,923
15,787
21,263

a
43 U.S.C. 1606(g)(1)(B)(i)(I). The eligibility requirements for these shares vary among the
corporations. For example, most of the corporations have blood quantum requirements for these new
shares, while one does not. In addition, all of the corporations issued these as life estate shares. The
holders of life estate shares would receive the benefit of those shares during their lifetime, but the
shares would revert back to the corporation upon their death because life estate shares cannot be
passed to heirs through inheritance.
43 U.S.C. 1606(g)(1)(B)(i)(II). Only one regional corporation (Sealaska) has issued these shares
as life estate shares.
43 U.S.C. 1606(g)(1)(B)(i)(III). These shares are issued as life estate shares.
Athna, Incorporated, has issued a class of shares to descendants of Natives who were original Ahtna
shareholders and are one-fourth degree or more Alaska Native and born after December 18, 1971.
The Arctic Slope Regional Corporation issued Class C shares to Natives who (1) were born after
December 18, 1971, to a parent who has been enrolled pursuant to the Settlement Act to the
corporation or a parent who has received Class E shares from the corporation and (2) are, at the time
of issuance, a resident of the United States. The Arctic Slope Regional Corporation has also issued
Class D shares to descendants of an Arctic Slope Native (defined as someone who is not a Native
but meets other qualifications) who (1) were born to or adopted by a parent who has been enrolled to
the corporation pursuant to the Settlement Act and (2) are, at the time of issuance, citizens of the
United States.
Doyon, Limited, has issued a class of shares to any Native or descendant of Native who is one-fourth
degree or more blood quantum; who was born after December 18, 1971; who is the child of an
original Class A, B, C, or D shareholder; and was neither issued nor holds stock in another regional
corporation unless that stock was acquired through inheritance, inter vivos gift, or purchase.
g
Koniag, Incorporated, shareholders recently voted to amend the articles of incorporation to allow any
Native who is not enrolled under the Settlement Act but who was eligible on December 18, 1971, for
enrollment to the Koniag region; who is a citizen of the United States; and who submits or, if
deceased, on whose behalf an application is submitted to the corporation prior to December 31,
2013, to receive shares.
h
NANA Regional Corporation issued a class of shares to any Native, as defined in the Settlement Act,
who is a citizen of the United States; who was born after December 18, 1971; and is a child of a
parent who was enrolled pursuant to the Settlement Act to the Northwest Alaska region, or which
parent, if not originally enrolled under the Settlement Act, was issued Class C Settlement Common
Stock, or is the child of a parent who was issued Class D Settlement Common Stock.
Page 53
i
NANA Regional Corporation has issued a class of shares to any Native, as defined in the Settlement
Act, who is not enrolled under the Settlement Act; who was eligible on December 18, 1971, for
enrollment to the northwest region; who is a citizen of the United States; and who submits or, if
deceased, on whose behalf an application to receive shares was submitted to the corporation prior to
December 31, 1995.
j
The Sealaska Corporation issued a class of shares to Natives who were born after December 18,
1971; are 18 or older beginning June 23, 2007; are lineal descendants of an original shareholder
(meaning a direct descendant such as a child or grandchild); are one-fourth degree or more Alaska
Indian (including Tsimshian Indians not enrolled in the Metlakatla Indian Community), Eskimo, or
Aleut blood or combination thereof; are U.S. citizens; and are not shareholders of another regional
Alaska Native corporation (except by gifting or inheritance).
In evaluating the decision whether to offer new shares in the corporation

to more people, the corporations and their shareholders face a number of
considerations and potential future challenges, including the following:
Reduced dividends. Executives with several corporations told us that

their shareholders have been reluctant to issue shares to new
shareholders partly of out of concern that, with more shareholders in
total, each shareholders dividend amount would be smaller.
Disenfranchising those born after December 18, 1971. Some

shareholders are concerned about disenfranchising the younger
population by excluding those born after December 18, 1971. Others
counter that issuing new shares is unnecessary because existing
shares can already be passed through gifts or inheritance to those
born after this date.
Decline in overall number of shareholders in each corporation. Other

shareholders we spoke with expressed concern that if shares were
not issued to new shareholders, then over time fewer people would
qualify as voting shareholders, and participation and engagement in
the corporation might suffer.
Deciding whether to make changes to shareholder eligibility criteria will

have implications for each corporations future operations and direction.
Agency and ThirdParty Comments and

Our Evaluation
We provided the Department of the Interior, SBA, SEC, the state of

Alaska, the ANCSA Regional Association, and volunteers for the 13th
Regional Corporation a draft of this report for review and comment. The
federal agencies and the state of Alaska responded that they had no
comments. The ANCSA Regional Association provided written comments
(reproduced in app. II) on behalf of the 12 regional corporations in Alaska.
Volunteers for the 13th Regional Corporation also provided written
comments, which are reproduced in appendix III. The ANCSA Regional
Page 54
Association also provided technical comments, which we incorporated

into the report as appropriate. In addition, the Cook Inlet Region, Inc.,
provided separate technical comments, which we also incorporated into
the report as appropriate.
In its written comments, the ANCSA Regional Association made a
number of points, including that our report gives some voice to the
suggestion to end the exemption from SEC oversight and stating that the
corporations do not feel an end to the exemption is warranted. We did
not, however, review any advantages or disadvantages of the
corporations SEC exemption from federal securities laws, and as the
association noted, we are not making any recommendations in our report.
The ANCSA Regional Association went on to say that the corporations
believe they are meeting not only the substantially all requirement, but
also the spirit and intent of [the Settlement Act]. In particular, the
association states, the corporations have chosen to adopt accounting
policies and disclosures that generally are the same as those required
of publicly traded companies (i.e., SEC registrants) by SEC regulations.
The association also states that the corporations determined that they
would provide the most relevant information that they have, given the
nature of their shareholders. Our report notes, however, that because the
substantially all reporting requirement in the Settlement Act, as
amended, is not defined or overseen, it is not clear what information must
be included in the regional corporations annual reports to shareholders.
As a result, we could not determine whether the corporations are
complying with the Settlement Acts reporting requirement.
In addition, the association wrote that, under section 1606(o) of the
Settlement Act, the corporations financial statements are audited and
certified by independent public accountants. 75 Section 1606(o) of the
Settlement Act requires the regional corporations accounts to be audited
in accordance with generally accepted auditing standards. Under the
Sarbanes-Oxley Act, however, SEC registrants are required to be audited
in accordance with other standards, which differ, and may continue to
75
The association wrote that the draft report makes the important point that, pursuant to
43 USC 1606(o), the accounts of the Corporations shall be audited annually in
accordance with GAAP [generally accepted accounting principles]. Our report correctly
notes that 43 U.S.C. 1606(o) requires the regional corporations accounts to be audited
annually in accordance with generally accepted auditing standards.
Page 55
differ, from the generally accepted auditing standards that previously

applied to SEC registrants and that section 1606(o) requires the
corporations to use. According to SEC staff, at present, the generally
accepted auditing standards and the standards SEC registrants are
required to use are not contradictory but the standards for SEC
registrants have some additional or supplemental requirements. These
standards may continue to diverge more in the future, and, if so, the
corporations practices may also diverge more from what is required for
SEC registrants.
The ANCSA Regional Association also raised concerns with the scope of
the report, stating that three of our questions to consider for the future
were beyond what we were asked to review. In our report, we state that
we were asked to describe various corporate practices of the regional
Alaska Native corporations. We added our questions to consider on the
basis of the work we did during our review and believe the discussion
provides information to Congress and the public about issues that may
warrant consideration and discussion by the federal government, the
state, the regional corporations, shareholders, or a combination of these
entities. We chose to include a wide breadth of issues to be as
comprehensive and informative as possible.
Written comments from volunteers for the 13th Regional Corporation
focused on the question posed in our report regarding the appropriate
role of the federal government in maintaining the solvency of Alaska
Native corporations. They stated that the 13th Regional Corporation did
not receive a fair and just settlement under the Alaska Native Claims
Settlement Act and requested that Congress take action to address the
issue.
As agreed with your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from the
report date. At that time, we will send copies to the Secretary of the
Interior, the Administrator of the Small Business Administration, the
Chairman of the U.S. Securities and Exchange Commission, the
Governor of the state of Alaska, the ANCSA Regional Association,
volunteers for the 13th Regional Corporation, the appropriate
congressional committees, and other interested parties. In addition, the
report will be available at no charge on the GAO website at
http://www.gao.gov.
Page 56
If you or your staff members have any questions about this report, please
contact me at (202) 512-3841 or fennella@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this report. Key contributors to this report are listed in
appendix IV.
Anne-Marie Fennell
Director, Natural Resources and Environment
Page 57
Appendix I: Objectives, Scope, and

Methodology
Methodology
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. 1
To conduct our work, we interviewed officials from all 13 regional
corporations by phone and in person. We also visited multiple
communities, villages, and cultural or historical sites across seven of the
regions (see table 10). We selected these locations on the basis of
various factors, including the size of the regional corporation shareholder
base; geographic location and number of villages in the region;
characteristics of the regional corporations such as gross revenue, net
income, and whether they have opened enrollment to those born after
December 18, 1971; and regional corporations availability. During our
site visits, we met with corporate officials and board directors,
shareholders, tribal officials, representatives from regional and community
nongovernmental organizations, and others to obtain information about
the regional corporations. We also visited a number of villages and
cultural sites to identify the type of work undertaken by the corporation for
the benefit of shareholders and others in the communities and to gain
shareholder perspectives. In addition, we attended a shareholder
information meeting held by one corporation in the Pacific Northwest. We
assessed the reliability of the information provided to us by the
corporations by interviewing corporate officials and cross-checking
information across various sources; we determined that the information
was sufficiently reliable for the purposes of our report. We report all dollar
amounts as they were reported to us by the corporations for the period in
question; none have been adjusted for inflation. We also researched and
analyzed issues raised in private litigation between the regional
corporations and their shareholders that we identified during the course of
our review.
1
We were also asked to determine shareholders level of satisfaction with the regional
corporations. To answer this question, we proposed surveying regional corporations
shareholders on their perspectives of the regional corporations. We were unable to
conduct a systematic and independent survey of shareholders, however, because the
regional corporations declined to provide us with their shareholder lists.
Page 58

Methodology
Table 10: Regional Alaska Native Corporations and Communities Visited

Corporation
Community
Ahtna, Incorporated
Gakona
Glennallen
Nome
Dillingham
Kokhanok
Calista Corporation
Akiachak
Akiak
Bethel
Kwethluk
Anchorage
Doyon, Limited
Fairbanks
Minto
Hoonah
Juneau
Kake
Source: GAO.
We interviewed officials from the Department of the Interiors Bureau of

Indian Affairs and from the Small Business Administration. We also
interviewed representatives from various organizations with interests in
Alaska Natives, including the Alaska Federation of Natives, ANCSA
Regional Association, First Alaskans Institute, Native American Rights
Fund, and attended the October 2011 conference of the National
Congress of American Indians. To obtain shareholder perspectives
beyond those obtained through our site visits, we conducted phone
interviews with shareholders who contacted us or whom we contacted on
the basis of referrals, set up an e-mail Alaska Native corporation
feedback mailbox, and reviewed corporate or shareholder social media
websites and other news sources. The views we received from
shareholders are anecdotal and not generalizable to all shareholders.
Throughout this report, we refer to the corporations 2010 reporting
period, which was the most recent year for which consistent information
was available across the corporations. Because the corporations fiscal
years do not all begin or end on the same dates, we refer to the
corporations 2010 reporting period as each corporations fiscal year
corresponding most closely to calendar year 2010 (see table 11).
Page 59

Methodology
Table 11: Regional Alaska Native Corporations Fiscal Years Corresponding to the
2010 Reporting Period
Corporation
Beginning date
End date
Ahtna, Incorporated
Jan. 1, 2010
Dec. 31, 2010
Apr. 1, 2010
Mar. 31, 2011
Jan. 1, 2010
Dec. 31, 2010
Apr. 1, 2010
Mar. 31, 2011
Apr. 1, 2010
Mar. 31, 2011
Calista Corporation
Jan. 1, 2010
Dec. 31, 2010
Jan. 1, 2010
Dec. 31, 2010
Jan. 1, 2010
Dec. 31, 2010
Doyon, Limited
Oct. 1, 2009
Sept. 30, 2010
Apr. 1, 2010
Mar. 31, 2011
Oct. 1, 2009
Sept. 30, 2010
Jan. 1, 2010
Dec. 31, 2010
To examine the governance practices of the regional Alaska Native

corporations, we reviewed the Alaska Native Claims Settlement Act, as
amended; the Alaska Corporations Code; other relevant federal and state
laws and regulations; the regional corporations articles of incorporation,
bylaws, and corporate proxy statements provided to shareholders during
2011 (the most recent year for which consistent information was available
across the corporations); and other documentation from the corporations
on their board composition and operations, executive and board
compensation, board elections, and methods for involving shareholders.
To further examine and describe board of director elections and
shareholder resolutions, we analyzed corporate proxy statements
provided to shareholders from 2001 through 2011.
To examine the requirements for and oversight of the regional
corporations financial reporting practices, we reviewed relevant federal
and state laws and regulations, focusing primarily on the Alaska Native
Claims Settlement Act and federal and state securities laws. Because of
the substantially all federal financial reporting requirement, we asked
staff from the U.S. Securities and Exchange Commissions (SEC) Division
of Corporation Finance to provide observations on the extent to which the
corporations 2010 annual shareholder reports included information
expected from a corporation subject to the Securities Exchange Act of
1934 (we refer to such corporations as SEC registrants). We interviewed
Page 60

Methodology
SEC staff about their work and analyzed the written observations they
provided for each corporation, as well as a summary of recurring themes.
We also interviewed officials from the Division of Banking and Securities
within Alaskas Department of Commerce, Community, and Economic
Development to determine any actions they take to monitor and enforce
state financial reporting requirements. We obtained from the state of
Alaska summary information on inquiries and complaints relating to proxy
materials received by the state from the regional corporations from July
2011 through June 2012 and January 2010 through June 2012,
respectively. In addition, the state provided administrative orders issued
by the state from 1978 through 2011. We assessed the reliability of the
inquiry, complaint, and administrative order information by interviewing
state officials about their record-tracking system and determined that this
information was sufficiently reliable for the purposes of our report.
To determine the benefits provided by the regional corporations to their
shareholders and other Alaska Natives, we reviewed the corporations
articles of incorporation, mission statements, annual shareholder reports
for the 2010 reporting period, and newsletters and other documentation
from the corporations describing monetary and nonmonetary benefits.
Specifically, to obtain financial informationincluding the corporations
gross revenues, net income, and dividendswe reviewed the regional
corporations audited financial statements from their annual reports for
2001 through the 2010 reporting period. In addition, we analyzed
documentation from the corporations on other benefits, including benefits
provided through trusts or permanent funds, and we identified other
benefits through our interviews and site visits with the regional
corporations, shareholders, tribal officials, and representatives from
nongovernmental organizations.
Finally, on the basis of our analysis of federal and state laws and
regulations; interviews with federal and state officials, regional corporation
officials, and shareholders; and past congressional actions and bills
addressing Alaska Native corporation issues, we developed questions
that may warrant consideration and discussion by the federal
government, the state, the regional corporations, shareholders, or a
combination of these entities.
We conducted this performance audit from October 2011 to December
2012 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
Page 61

Methodology
our findings and conclusions based on our audit objectives. We believe

that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
Page 62
Appendix II: Comments on Behalf of the

12 Regional Alaska Native Corporations
Appendix II: Comments on Behalf of the 12
Regional Alaska Native Corporations
Page 63

Page 64

Page 65

Page 66

Page 67
Appendix III: Comments from Volunteers for

the 13th Regional Corporation
Page 68

Page 69

Page 70
Appendix IV: GAO Contact and Staff

Acknowledgments
Appendix IV: GAO Contact and Staff
Acknowledgments
GAO Contact
Anne-Marie Fennell, (202) 512-3841 or fennella@gao.gov
Staff
Acknowledgments
In addition to the individual named above, Jeffery D. Malcolm, Assistant

Director; Ellen W. Chu; Clayton Clark; Emily Eischen; Cody Goebel; Ryan
Guthrie;, Alyssa M. Hundrup; Michael Meleady; Anu K. Mittal; Danny
Royer; Jeanette Soares; Andrew Stavisky; and Tatiana Winger made key
contributions to this report.
(361340)
Page 71
GAOs Mission
The Government Accountability Office, the audit, evaluation, and

investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding decisions.
GAOs commitment to good government is reflected in its core values of
accountability, integrity, and reliability.
Obtaining Copies of
GAO Reports and
Testimony
The fastest and easiest way to obtain copies of GAO documents at no

cost is through GAOs website (http://www.gao.gov). Each weekday
afternoon, GAO posts on its website newly released reports, testimony,
and correspondence. To have GAO e-mail you a list of newly posted
products, go to http://www.gao.gov and select E-mail Updates.
Order by Phone
The price of each GAO publication reflects GAOs actual cost of

production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAOs website,
http://www.gao.gov/ordering.htm.
Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537.
Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional information.
Connect with GAO
Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts.
Visit GAO on the web at www.gao.gov.
To Report Fraud,
Waste, and Abuse in
Federal Programs
Contact:
Website: http://www.gao.gov/fraudnet/fraudnet.htm
E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470
Congressional
Relations
Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 5124400, U.S. Government Accountability Office, 441 G Street NW, Room
7125, Washington, DC 20548
Public Affairs
Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, DC 20548
Please Print on Recycled Paper.

Report To Congressional Requesters: United States Government Accountability Office

Uploaded by

Copyright:

Available Formats

Report To Congressional Requesters: United States Government Accountability Office

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Report To Congressional Requesters: United States Government Accountability Office

Uploaded by

Copyright:

Available Formats

GAO

United States Government Accountability Office

Report to Congressional Requesters

REGIONAL ALASKA NATIVE CORPORATIONS

Why GAO Did This Study

What GAO Found

In 1971, the Alaska Native Claims

GAO was asked to review these

Alaska Native corporations are subject to some financial reporting requirements

Should the substantially all federal reporting requirement be clarified and

What is the appropriate role of the federal government in maintaining the

Who should be a shareholder? As authorized by amendments to the

United States Government Accountability Office

Objectives, Scope, and Methodology

Comments on Behalf of the 12 Regional Alaska Native

Comments from Volunteers for the 13th Regional

GAO Contact and Staff Acknowledgments

GAO-13-121 Regional Alaska Native Corporations

Table 7: Scholarship Information as Reported by the Regional

Small Business Administration

GAO-13-121 Regional Alaska Native Corporations

United States Government Accountability Office

December 13, 2012

GAO-13-121 Regional Alaska Native Corporations

GAO-13-121 Regional Alaska Native Corporations

on their governance practices and on monetary and nonmonetary

H.R. Rep. No. 94-729 at 13 (1975).

GAO-13-121 Regional Alaska Native Corporations

GAO-13-121 Regional Alaska Native Corporations

The corporations established under the Settlement Act were to receive

GAO-13-121 Regional Alaska Native Corporations

corporations received rights to the subsurface and some surface lands,

GAO-13-121 Regional Alaska Native Corporations

standard of living of Alaska Nativesmany lived in extreme poverty and

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

The 13th Regional Corporation

Source: Department of the Interior.

H.R. Rep. No. 92-523 at 5-6 (1971).

GAO-13-121 Regional Alaska Native Corporations

Alaska Native Claims

Expansion of eligible shareholders. The Settlement Act was amended

Restrictions on sales of stock. The 1988 amendments also extended

GAO-13-121 Regional Alaska Native Corporations

S. Rep. No. 100-201 at 20 (1987).

Investment Company Act of 1940, 54 Stat. 789, codified as amended at 15 U.S.C.

Securities Act of 1933, 48 Stat. 74, codified as amended at 15 U.S.C. 77a-77bbbb.

Securities Exchange Act of 1934, 48 Stat. 881, codified as amended at 15 U.S.C.

GAO-13-121 Regional Alaska Native Corporations

Small Business Administrations (SBA) 8(a) program participation. In

The regional corporations are organized as for-profit corporations under

GAO-13-121 Regional Alaska Native Corporations

tribes. 22 Incorporated under Alaska state law, regional corporations share

As of this report, Alaska had never dissolved a regional corporation involuntarily,