Archive for the ‘ANCSA’ Category

ANCSA Section 7(i), Part 2 of 3 Parts

Sunday, December 23rd, 2012

procedures to the settling corporations than ASRC applies to CIRI.

In the event ASRC entered into a settlement agreement for cash with an aggregate value exceeding $500,000, any amount in excess of that amount would be treated as Net Section 7(i) Revenues, and ASRC would distribute to CIRI a set amount over the $500,000 by an agreed upon formula. CIRI’s president Roy Huhndorf and ASRC’s president Jake Adams signed the agreement on November 20, 1986.
No executive official can formulate Indian policy; every action taken by an Executive official must be authorized by Congress.

Newspaper story on June 10, 1988:

Under the 1983 deal based on acreage only, Arctic Slope traded about 101,000 acres of land surface it owned in the Gates of the Arctic National Park, worth an estimated $5 million, for about 92,000 acres of promising subsurface oil lands in the Arctic Refuge, valued at $388 million. ASRC received $25 million in cash from the oil companies. Another $14 million had been deposited in escrow for release upon enactment of a development bill, and the corporation is receiving about $900,000 a year in rental payments under a 10-year agreement with the oil companies.
The ASRC trade created a rift in the Alaska Native community. They called Arctic Slope’s deal “intolerable for all Alaska Natives. Jake Adams president of ASRC said:

“There is no precedent in American law for a large number of for-profit corporations asking Congress to take away the vested property rights of the shareholders of another corporation. Other ANCSA corporations and their shareholders are the ones who had their property rights taken away.”
GAO Report: As to the point raised by Mr. Rude, that the Chandler Lake Land Exchange was structured in a way to make inapplicable the section 7(i) revenue sharing provisions of ANCSA the Government Accounting Office audit explained as follows:
The Chandler Lake exchange was structured in a way that the other Alaska Native Regional corporations did not participate in its financial benefits. Since 1984, ASRC has received about $30 million from its oil company partners for the exclusive right to conduct exploratory activities and to acquire oil and gas leases on the lands. However, a provision of ANCSA calling for the sharing of oil and gas revenues with 11 other regional corporations was not applicable to the exchange.

When the Congress enacted ANCSA to settle land claims made by the various Alaskan Native groups, it provided for a sharing of income from mineral and timber resources among 12 Native regional corporations. Specifically, Section 7(i) of ANCSA provided that, Seventy per centum of all revenues received by each Regional corporation from the timber resources and subsurface estate patented to it pursuant to this Act shall be divided annually by the Regional Corporation among all 12 Regional Corporations organized pursuant to this section according to the number of Natives enrolled in each region.

If ASRC had acquired the subsurface rights to ANWR under the provisions of ANILCA, it would have had to share 70% of the revenue it received with 11 other regional corporations. However, the Chandler Lake exchange was structured in a way that the revenue sharing provisions of ANCSA did not apply. This occurred because ASRC exchanged surface interests in the Chandler Lake lands for the subsurface estate in ANWR. According to a 1982 Section 7(i) settlement agreement, approved by 12 Alaska regional corporations, the revenue-sharing provisions of ANCSA would apply in this case if subsurface interests had been exchanged for subsurface interests. Thus, because ASRC exchanged surface interests for subsurface interests, none of the other regional corporations have shared in any of the revenue that ASRC has already received from its oil company partners, and they may not share in any of the revenues ASRC will receive in the future for leases, royalties, and other payments involved in this exchange, if ANWR is opened to oil and gas development.

We asked ASRC and Interior officials why the exchange had been structured in this way. ASRC’s attorney said the corporation acted to protect its own interests and retained the subsurface rights of the Chandler Lake lands because they wanted to minimize the revenue sharing effects of the ANCSA provision. The former Deputy under Secretary told us that he was willing to accommodate ARSC on this point.
GAO Report/RCED-90-5: As earlier noted, ARSC traded away surface land interests in the Brooks Range and secured subsurface interests in the coastal plain of the Arctic National Wildlife Refuge under-lying the Kaktovik Inupiat Corp. selections. Our understanding is that ASRC firmly believes that, under the exchange, section 6(g) of the 1982 settlement agreement among the regional corporations governs the land obtained by the corporation under the Chandler Lake Land Exchange, the relevant language of the agreement reads as follows:
Section 6. Disposition of ANCSA Lands by Trade. Where a corporation, by trade with a third party, disposes of land conveyed to it under ANSCA (by patent or interim conveyance), no revenue shall be recognized at the time of the trade and the rules set forth below shall apply concerning recognition of Gross Section 7(i) Revenues. (g) If surface is traded for surface, or for subsurface, revenues from the property received in trade shall not be subject to sharing under this Agreement or [under] section 7(i).

The report concluded with: Under the circumstances, we may expect ASRC to assert that it entered into the Chandler Lake Land Exchange in reliance on language of the comprehensive agreement negotiated among, the presumably satisfactory to, all 12 regional corporations, a settlement has been applied or used by the courts to dismiss protracted litigation among these same parties over resource revenue sharing issues.
The negotiations for the 7(i) agreement were conducted by a small group of corporate officials and the terms of settlement were not disclosed to the ANCSA shareholders and the general public. Most regional corporate directors may not have been aware of the provisions and effects of the agreement and it is believed that many of the Native directors even read the 121 page document before it was signed by the regional corporation presidents. The regional corporation presidents signed the settlement agreement on June 29, 1982. The last regional corporation ratified the 7(i) settlement agreement on November 16, 1982. CIRI ratified the agreement on Sept. 17, 1982. The Agreement was signed by CIRI’s president and before its board meeting on Sept. 12th, 1982.

Anaktuvuk Pass Land Exchange and Wilderness Redesignation Act of 1995 provided in section 103(a) the conveyance of 30,642 acres if Federal land located inside of the boundaries of the park (Gates of the Arctic National Park) to ASRC and the Nunamiut Corporation in exchange for 38,840 acres of corporation land located within the park boundary; the reauthorization of approximately 73,933 acres of existing wilderness within the park; the designation of approximately 56,825 acres within the park as new wilderness; the conveyance by ASRC and Nunamuit Corp. of surface and subsurface development rights approximately 116,435 acres within the boundaries of the park to the United States.
Section 105(a) provided that any lands or interests therein conveyed to and received by ASRC or Nunamuit Corporation pursuant to the agreement shall be deemed to have been conveyed and received under section 22(f) of ANCSA. This subsection states that all of the lands and interests therein conveyed pursuant to this agreement shall be conveyed subject to valid existing rights.
Under the Appendix 8(p) it stated: No member of or delegate to Congress, or Resident Commissioner, shall be admitted to any part of this Agreement or to any benefit that may arise there from; but this provision shall not be construed to extend to this Agreement if made with a corporation for its general benefit.
In the House of Representatives (Jan. 4, 1995): Mr. Young of Alaska introduced the following bill; which was referred to the Committee on Resources. A Bill to amend ANCSA and for other purposes: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled.

Section 5. Native Allotments: Section 1431(o) of the Alaska National Interest Lands Conservation Act (94 Stat. 2542) is amended by adding at the end of the following: (5) Following the exercises by Arctic Slope Regional Corp. of its option under paragraph (1) to acquire the subsurface estate beneath lands within the National Petroleum Reserve-Alaska selected by Kuukpik Corporation, where such subsurface estate entirely surrounds lands subject to a Native allotment application approved under Section 905 of this Act, and the oil and gas in such lands have been reserved to the United States, Arctic Slope Regional Corporation, at its further option, shall be entitled to receive a conveyance of the reserved oil and gas, including all rights and privileges therein reserved to the United States, in such lands. Upon the receipt of a conveyance of such oil and gas interests, the entitlement of Arctic Slope Regional Corporation to in-lieu subsurface lands under section 12(a)(1) of the Alaska Native Claims Settlement Act (43 U.S.C. 1611 (a) (1)) shall be reduced by the amount of corporation for its general benefit.
Newspaper story: The House sidestepped concerns of Alaska villagers and the Interior Department Tuesday and approved a package of Native Legislation containing controversial provisions inserted by the state’s congressional delegation—some without any public debate
While some of the bills provisions were widely supported, several last minute additions in the Senate weren’t. One of them, by Sen. Ted Stevens, wipes out a lawsuit trying to force larger Native regional corporations to share their riches with village corporations from a 1986-87 tax break.
Handbook of Federal Indian Law by Felix Cohen, 1982 edition, page 750: It has been determined that qualifying revenues are subject to the sharing formula even if they were received by the regional corporation before the acquisition of a fee patent to the land from which the revenue was derived. The federal district court has found that the sharing requirements of section 7(i) apply to any revenues or benefits “generated because of, and in exchange for, the acquisition of an interest in the timber resources and sub-subsurface estate received by a regional corporation pursuant to ANCSA.” Thus the sharing of “all revenues [under section 7(i) include[s} benefits of every sort” received by a region from subsurface and timber resources, non-monetary benefits, and revenues received because of the potential existence of resources, whether or not they are ever produced. Accordingly, revenues subject to sharing have been held to include payments for surface damage compensation for consent to enter the surface and for assistance in obtaining the consent of other land owners, and sums paid to the corporations under contractual arrangements that attempt to shield their true nature as revenues from the subsurface estate.
Bayview , Inc. a village corporation and shareholder Lewis Olsen sued all 12 regional corporations claiming the NOLs based on subsurface values (possibly $500,000,000) were shareable under section 7(i) of ANCSA. The court concluded that Congress did not intend to create a direct cause of action for either such village corporations or at-large shareholders against a regional corporation with which neither of them is associated geographically or through ownership. The court concluded that Mr. Olsen had an adequate state law remedy; and by bringing this action against the defendants, Mr. Olsen sued the wrong party. (He should have sued Bristol Bay Corp.). The court concluded that plaintiff Olsen’s complaint against all of the defendants must be dismissed. In reaching this conclusion, the court does not overlook the fact that, unlike Mr. Olsen, a village corporation does not hold stock in a regional corporation and is therefore unable to bring a derivative suit. A shareholder derivative suit is not, however, the only possible remedy available here. The court assumes without deciding that there is at least the possibility of a state law cause of action by villages against their regional corporation for failure to enforce rights under ANCSA as to which the villages have interest. The defendant’s motion to dismiss was granted on July 6, 1995. Motion to dismiss was submitted by defendants, ARSR and Jacob Adams.
To end any possible future legal claims on sharing NOLs under Section 7(i), regional corporations introduced federal legislation which was enacted.

October 14, 1996 report from CIRI CEO on legislation passed by the 104th Congress included: NOL-Confirming NOLs not shareable under section 7(i).

December 15, 1991 newspaper story:
In 1989 Calista Corp., asserted that most of the $576 million that regional corporations earned from selling losses under a 1986 tax law should be treated as 7(i) revenue. Most of the losses were created by selling timber, asbestos and other natural resources for far less than their values when claimed by the regional corporations. Thus, argued Calista, any income resulting from the sale of such resource-based red ink should be distributed under 7(i). Calista officials felt they had a good case but lacked the money for a costly battle to arbitrate the dispute or take it to court. Instead, they worked out a deal. Calista dropped its challenge to the loss sale money. In return, nine other regional corporations agreed to guarantee up to $9.5 million in loans to Calista. There was no disclosure as to how much each regional corporation guaranteed for Calista nor was there disclosure as to whether the loans were repaid.
Placing Section 7(i) sharing provisions into ANCSA gave other shareholders a vested property right in the lands acquired by ASRC. It has been reported that a USGS study estimated there are 10.6 billion barrels of oil and 73 trillion cubic feet of gas in NPR-A and 10.4 billion barrels of oil and 9 trillion cubic feet of gas in ANWR that could be produced. Although, other regions gave up land rights to millions of acres, they are being denied their fair share of possibly multi-billions of dollars.

Senate testimony Senator Stevens testified:
“I don’t think most people understand that because of the situation in terms of the Alaska Land Claims Settlement Act, when one region gets money from natural resources, it must share with the other 11 regions. The 7(i) concept is the most unique concept in America. That is why all of the Natives in Alaska have an interest in ANWR. If the Natives of the North Slope get money—and they will—from this development, they must share with the other 11 regions (underlining added) Thirty-three percent of unemployed Alaskans are Natives. Twenty percent of Alaskan Natives have incomes below the poverty line. Development of ANWR holds the potential to improve their situation. That is why they are in this city now trying to tell Members that they want ANWR developed.

On page 8: Senator Stevens testified:

Above all, a vote for this amendment is against Alaska Natives who overwhelmingly support development in ANWR because they can balance stewardship and conservation with the development. Alaska Natives would use a portion of the revenues to finance schools, water systems, and health clinics while pursuing their way of life. Again, every Alaska Native will share in the money that is received by the North Slope people. (underline added) They all share because of the bill this Congress wrote, the Alaska Native Land Claim Settlement Act.

“Seattle Times” story on ASRC Included:

The Inupiat Eskimo leaders gained access to the refuge through a controversial land trade that reflected their frustrations with the initial terms of the Alaska land claims settlement. Under the Act, the corporation was allowed to choose 5 million acres of its shareholders’ North Slope homeland. But the best oil field —Prudhoe Bay— already was staked out by the state, and the best prospect—the coastal plain—was initially off-limits because of its protested location within the 1.9 million-acre Arctic National Wildlife Refuge. By 1983, a deal was struck. Arctic Slope swapped 101,000 acres within the Gates of the Arctic National Park for 92,160 subsurface acres inside the coveted coastal plain. A separate Inupiat village corporation took title to the surface estate.

Arctic Slope carefully selected the acreage that extended into two large sandstone structures around the Inupiat village of Kaktovik, which sits at the northeast edge of the coastal plain. Some of this acreage was chosen after a review of seismic test data, and included what was then considered to be among the best oil prospects.

The Government Accountability Office, investigative arm of Congress, concluded that the trade was not in the best interests of the federal government, in part due to the Interior Department’s inability to access the secret drilling data that could help determine the worth of future federal land leases. Arctic Slope rejected that conclusion.

End of Part 2 of 3 Parts


Friday, December 14th, 2012


By Frank R Peterson Sr and Frank Pagano

Read on where it appears that Natives from all regions, except Arctic Slope, will be denied benefits from subsurface development proceeds in the Arctic Slope region, which may amount to Billions of dollars!

USGS estimates ANWR has 10.4 billion barrels of recoverable oil and 9 trillion cu. ft. of natural gas.

In NPRA there is an estimated 10.6 billion barrels of oil and 73 trillion cu. ft. of gas, of which the proceeds should be shared with all stockholders of the 12 Alaska regional corporations, under ANCSA Section 7(i).

It is understood that the Arctic Slope leaders promised other regionals if they accepted their “land loss” formula instead of the “per capita” formula for getting lands, they would share their wealth according to Section 7(i). By adopting the land loss formula, the other regions gave up approximately 2.5 million acres they would have gotten if per capita formula was used.

It appears that the Arctic Slope Region used its political connections and false promises to get out of sharing any of the proceeds from the lands they accrued under the land loss formula, in ANWR and NPRA shareholders from the other 12 Regions stand to lose hundreds of billions of dollars, once ANWR and NPRA are opened for oil and natural gas development.


Part 1 of 3 parts

Section 7(i) was one of the last provisions inserted into the original 1971 Alaska Native Claims Settlement Act (ANCSA). It resulted from a deal struck by Arctic Slope leaders and the Native leaders from the rest of Alaska. The initial legislation granted land largely according to population. Other Native leaders agreed to change the formula to give Arctic Slope more of the potentially oil-rich land of the North Slope. But in return they extracted a key concession. Arctic Slope and other potentially resource-rich regional corporations would have to share their wealth. These two provisions, the “land loss” formula and the revenue sharing proposal were the foundation for a settlement acceptable to Native regions having mineral potential and those without, and those having large populations and those only lightly populated.

Section 7(i) of ANCSA states: Seventy per centum of all revenues received by each Regional Corporation from the timber resources and subsurface estate patented to it pursuant to this Act shall be divided annually by the Regional Corporation organized pursuant to this section according to the number of Natives enrolled in each region pursuant to section 5. The provision of this subsection shall not apply to the Thirteenth Regional Corporation if organized pursuant to subsection (c) hereof.

Six regional corporations received lands under the “land loss” formula. Populations and lands were received by: Ahtna, Inc. (1,092), 992,030.93 acres; Arctic Slope Regional Corp. (3,905), 4,011,728 acres; Chugach Natives, Inc. (2,099), 338,665.08 acres; Cook Inlet Region, Inc. (6,243), 1,324,472.72 acres; Doyon, Ltd. (9221), 8,356,571.96 acres; and NANA Regional Corp. (4,905), 746,130.60 acres. Lands awarded the six regional corporations included surface and subsurface estates.

Felix Cohen , a federal official and Native American Advocate wrote: A number of issues arising under section 7(i) have been litigated. It has been held that net revenues, rather than gross revenues, are subject to the section 7(i) distribution formula. The question of what expenses are properly deductible from revenues has produced differing answers from the two courts that have considered it. One district court suggests for determining what expenses are properly deductible. The other suggests that contesting regional corporations establish an arbitration procedure for the same purpose. It has also been determined that qualifying revenues are subject to the sharing formula even if they were received by the regional corporation before the acquisition of fee patent to the land from which the revenue was derived. The Alaska federal district court has found that the sharing requirements of section 7(i) apply to any revenue or benefit generated because of, and in exchange for, the acquisition of an interest in the timber resources and subsurface estate received by a regional corporation pursuant to ANCSA. Thus, the sharing of “all revenues (under section 7(i) include[s] benefits of every sort” received by a region from subsurface and timber resources, non-monetary benefits, and revenues received because of the potential existence of resources, whether or not they are ever produced. Accordingly, revenues subject to sharing have been held to include payments for surface damage, compensation for consent to enter the surface and for assistance in obtaining the consent of other landowners, and sums paid to the corporation under contractual arrangements that attempt to shield their true nature as revenues from the subsurface estate.

In the 1970′s, Arctic Slope helped bankroll re-establishment of the previously abandoned village of Nuiqsut. ARSC gave 27 families $500 to help them move there, and they camped out for a year and a half before houses were built. The village borders the National Petroleum Reserve-Alaska. Doing so allowed ASRC to select lands that otherwise would have been off-limits to it.

Section 1431(e)(3) (ANILCA): To facilitate an exchange provided for in this subsection, the Secretary is authorized to make available to ASRC lands, or interests therein, from public lands within the Arctic Slope Region, as determined pursuant to Section 7(a) of ANCSA, including lands, or interests therein, within the National Petroleum Reserve-Alaska in the event that lands within the reserve are made subject to leasing under the Mineral Leasing Act of 1920, as amended, or are otherwise made available for purposes of development of oil, gas, or other minerals.

Section 1431(o) of ANILCA: Future Option To Exchange, Etc.—(1) Whenever, at any time within 40 years after the date of enactment of this Act, public lands in the NPR-A or in ANWR, within 75 miles of lands selected by a Village Corporation pursuant to the provisions to the provisions of Section 12(a)(1) of ANCSA, are opened for the purposes of commercial development (rather than exploration) of oil or gas, ASRC shall be entitled at its option, within five years of the date of such opening, to consolidate lands by exchanging the in-lieu subsurface lands which it selected pursuant to the provisions of Section 12(a)(1) of the Act for an equal acreage of the subsurface estate, identified by ASRC, beneath the lands selected by the village Corporation. Prior to the exercise of such option, ASRC shall obtain the concurrence of the affected Village Corporation.

Section 1431(p) of ANILCA—All lands of interests in lands conveyed by the Secretary in subsections (d), (f)(1), (g)(3), (h), and (1) of this section to ASRC or a Village Corporation, as the case may be, shall be subject to valid existing rights, and in accordance with, and subject to, the provisions of ANCSA, as amended, as though the lands were originally conveyed under the provision of such Act.

Getty Oil Company (Dec. 14, 1981) letter to ASRC: Acreage Exchange: 1) Upon execution of the Agreement in accordance with the provisions of this letter of intent, ARSC shall effect an exchange between 75,000-100,000 acres of land pursuant to either the provisions of Section 1431(e) or 1302(h) of P.L. 98-487, the Alaska National Interest Lands Conservation Act of 1980 (ANILCA). 2) ARSC shall use its best efforts to make available an additional 100,000 acres of lands within NPR-A acquired pursuant to Section 12(b)(5) P.L. 94-204 and the Terms and Conditions for Land Consolidation Agreement between the Cook Inlet Region, Inc. (CIRI), the State of Alaska and the United States of America. In this regard, ASRC shall consent to CIRI land exchange including lands within the area of jurisdiction of the ASRC.

Arctic Slope Regional Corporation 1981 Annual Report: Most of ASRC’s fee and subsurface lands are under lease to the following oil companies: Chevron USA 2,188,015 acres; Chevron/Mobile 536,717 acres; Union/Amoco 270,567 acres; Shell Oil Co. 1,300,000 acres for total of 4,205,299 acres. Exchange Options: Of particular importance to ASRC at this time are certain land exchange rights written into the Alaska National Interest Lands Conservation Act. (ANILCA), Section 1431(o) and (e) allow ASRC to acquire by exchange, lands within National Petroleum Reserve-Alaska and the Arctic National Wildlife Refuge (ANWR). ASRC and DOL (Dept. of Interior), and affected village corporations have actively pursued negotiations that would lead to such exchanges. These exchanges could make possible the resolution of the “severed estates” problem created in ANCSA (when ASRC was not allowed to acquire village subsurface in NPR-A and ANWR) and could provide a greater measure of local control over village corporation lands. It also makes possible a direct revenue source for the villages affected in the event a discovery is made on or near such lands.

Additional Selections: As the result of a foundry error discovered earlier this year, ASRC has the opportunity to file land selections in a 96,000 acre area along the southeastern Boundary of NPR-A.

Before a 7(i) Settlement Agreement was approved, five villages sought to intervene, claiming that their interests in sand and gravel resources would be impaired if they were not parties to the inter-region litigation. The villages alleged that they filed their motion to intervene as soon as possible after hearing about the Chugach opinion and the proposed settlement discussions. On June 29, 1982, the regions reached a settlement [and on] June 3, 1983, the [United States] district court dismissed the inter-region litigation with prejudice on the basis of the settlement agreement.

The presidents of the Alaska Regional Corporations signed a 121 page 7(i) Settlement Agreement on June 29, 1982. Section 6(g) of the Agreement states: If surface is traded for subsurface, or for surface and subsurface revenues from the property received shall not be subject to sharing under this agreement or Section 7(i). The Agreement effectively negated sharing provisions of ANCSA and prior rulings from the courts. Congress has not amended section 7(i) of ANCSA..

There was no publicly on the Settlement and few Alaska Natives were aware of its provisions or consequences.

ASRC 1982 Annual Report: The Corporation is a co-defendant with six other regional corporations in a suit filed by five regional corporations which alleged, among other things, that amounts received under exploration and lease option agreements and related leases constitute revenues from subsurface estate and thus are subject to the sharing provisions of Section 7(i) of the Act.

On June 29, 1982, the presidents of the 12 regional corporations involved in the litigation discussed above signed a compromise Section 7(i) Settlement Agreement (the Agreement) which, among other things, determined the amounts owed by ASRC to other regional corporations relating to transactions effected prior to June 30, 1981 and defined the accounting for future revenues distributable under Section 7(i) of the Act. The Agreement has subsequently been ratified by the Boards of Directors of the 12 regional corporations, the last ratification being November 16, and shall be effective upon approval of the U.S. District Court.

CIRI officials were told the 6(g) provision was inserted in the Settlement Agreement by ASRC to assist CIRI in their land exchanges for federal surplus properties. CIRI exchanged both surface and subsurface land entitlements for federal surplus properties. There was concern that the subsurface lands exchanged by CIRI voided section 7(i) sharing rights of the other regions.

When the 7(i) Settlement Agreement came before the CIRI Board for ratification on September 17, 1982, the regions and the court had already approved it. At the CIRI Board Meeting, final provisions of the settlement were briefed by CIRI’s corporate counsel and before the vote to ratify the Settlement, CIRI’s President voiced his support for ratification to the Board. The CIRI Board ratified the settlement agreement on September 17, 1982. The CIRI Board did not realize that the provision inserted in the settlement by ASRC to assist CIRI in regards to their federal surplus property exchanges was really intended to benefit ASRC.

In August 1983, ASRC structured a land exchange relying on Section 6(g) of the Settlement Agreement in which it surrendered the corporation’s ownership of the surface estate to certain lands in the vicinity of Chandler Lake within the Gates of the Arctic National Park (established by the 1980 Alaska National Interest Lands Conservation Act) and obtained title to the subsurface estate in four townships in the vicinity of Kaktovik the only village within the Arctic National Wildlife Refuge. ASRC asserts that, because of section 6(g) of the settlement agreement, potential revenues from the development of oil and gas leases in those four Townships need not be shared.

ASRC 1984 Annual Report: During 1984 the most significant development regarding ASRC lands has been the finalization of the acquisition and initial exploration of Kaktovik lands. As reported in the recent past, ASRC, Kaktovik Inupiat Corporation and the Department of the Interior have completed a land exchange (as authorized under certain provisions of ANILCA) leading to ASRC’s acquisition of the subsurface estate beneath lands now conveyed and to be conveyed to Kaktovik Inupiat Corporation pursuant to ANCSA.

In this exchange, ASRC conveyed to the United States approximately equal surface acreage in the Chandler Lake-Kollutarak area on ASRC fee lands. As part of the exchange, ASRC will, in the future, receive additional lands adjacent to Nunamiut Corporation lands, creating a cohesive ASRC- Nunamiut ownership pattern in the Anaktuvuk Pass region.

As was reported, ASRC entered into a comprehensive exploration and lease agreement with Chevron U.S.A., Inc., SOHIO-Alaska, Inc. and British Petroleum Alaska Exploration, Inc. covering the Kaktovik-ASRC lands.

In the month of October, Congress enacted the “Barrow Gas Field Act of 1984″ Certain provisions in this Act authorized an exchange of lands between the United States and ASRC. In this exchange, ASRC received 11,520 aces of surface lands and 57,600 acres of fee lands (except for gas and sand and gravel) south of Ukpeagvik Inupiat Corporation lands. In exchange, ASRC conveyed to the United States nearly 170,000 acres of subsurface lands in the western Arctic and Gates of the Arctic National Park believed to be of little subsurface resource potential.

In 1984, ASRC exchanged 101,272 acres of its surface estate for 92,928 acres of subsurface estate, the surface of which was acquired by Kaktovik Inupiat Corporation within the boundaries of ANWR.

ASRC’s 1984 Annual Report Included: During the year ended June 30, 1984, ASRC exchanged 101,272 acres of its surface estate in the Gates of the Arctic National Park for 92,928 acres of subsurface estate. The surface estate of which is owned or will be acquired by Kaktovik Inupiat Corporation— within the boundaries of the Arctic National Wildlife Refuge. Article II, Section 6(g) of the “Section 7(i) Settlement Agreement” between the Regional Corporations relating to the sharing requirements of section 7(i) of the Act which has been approved by the United States District Court for the District of Alaska, provides: If surface is traded for surface, or for subsurface, or for surface and subsurface, revenues from the property received under the trade shall not be subject to sharing under this agreement or section 7(i).

The exchange was negotiated without congressional scrutiny or approval. Congressman George Miller said the exchange was worked out behind closed doors with the Department of Interior.

In 1984 the Aleut Corporation and Bristol Bay Native Corporation served notice of demand for arbitration on ASRC pursuant to Article VI of the 7(i) Agreement for certain matters relating to ASRC’s fiscal year ended June 10, 1984. Ahtna, Inc. indicated its intent to join the arbitration. Specifically, Aleut and BBNC demanded arbitration with respect to:

a) Did ASRC derive revenues in 1984 from the subsurface of ANCSA lands which were not included in Gross Passive Section 7(i) Revenues for 1984?

b) Die ASRC receive revenues from an exploration and lease agreement of Kaktovik subsurface (Kaktovik Agreement) which should have been reported and included in Gross Passive Section 7(i) Revenue for 1984?

c) Did ASRC receive any non-cash revenues from third parties relating to the disposition of interests in subsurface estate of ANCSA lands which were not reported and not included in Gross Passive Section 7(i) Revenues for 1984?

It had not been determined under the 7(i) Agreement whether a Regional Corporation which elects not to join an arbitration, once initiated, would receive the full benefit of any favorable outcome including disposition by settlement. Nor had it been determined whether any characterization of ASRC’s treatment of revenues and expenses for its fiscal year ended June 30, 1984, should ASRC prevail in its arbitration with Aleut and BBNC, could be challenged in subsequent years when new revenues were received from the same sources or new expenses were claimed on the same grounds as those challenged in the arbitration demanded by Aleut and BBNC.

CIRI and ASRC entered into an agreement where CIRI would not join in the arbitration by Aleut and BBNC. Nor would CIRI lend assistance to Aleut, BBNC, or any other Regional Corporation that joined the arbitration with respect to the said arbitration. CIRI agreed

that ASRC could enter into a “nuisance value settlement” with Aleut, BBNC, Ahtna and any other Regional Corporations that joined the arbitration without incurring any liability to CIRI. For purposes of the Agreement, “nuisance value settlement” was defined as a settlement: 1) the value of which, in the aggregate, does not exceed $500,000; 2) does not involve participation in any revenue or right to receive revenues from the Kaktovik subsurface; and 3) does not result in the application of different, more favorable Section 7(i) accounting

(End Part 1 of 3)

Time to take back control of Alaska Native corporations

Saturday, November 17th, 2012

The claims for recognition of the inherent right to property of the indigenous peoples of Alaska and the furtherance of individual self-actualization arising from that right, that has long been a pre-eminent foundation of America, were envisioned settled by the passage and implementation of the Alaska Native Land Claims Settlement Act (ANCSA) in 1971. The result was the creation of 13 regional corporations encompassing the traditional groupings of 227 village corporations representing the 227 federally recognized Tribal entities in Alaska.

Read More: Time to take back control of Alaska Native corporations


ANCSA Amendment PL 100 – 241

Friday, October 26th, 2012

101 STAT. 1788


Friday, October 26th, 2012



Alaska’s Indigenous people must regain the civil, property and Constitutional rights that have been taken from them by legislative fiat, and, their dignity restored.  Approximately 35% of the original Indigenous shareholders have died and over 1,000 shareholders in a local ANCSA corporation own 10 shares or less and over 450 shareholders own non-voting stock because they are not Native.  In another decade or two Indigenous children and grandchildren will only own small numbers of shares, and, with the corporations selling land and resources at huge losses, what will be left for them?

It is said that several local Indigenous shareholder being sued in Alaska’s Superior Court have never gotten a jury trial or been able to subpoena defendant witnesses in any of the 3 lawsuits that a Regional Native Corporation has filed against them.  One of the shareholders stated that he has posted over $51,000 of his personal savings on the 2008 lawsuit that the local Regional Native Corporation filed against them; and over $26,000 on the 2009 lawsuit they filed against two of them—now they want over $18,000 more from them.  All of this in addition to the approximately $400,000 one of them have put up since 1997.  The 1997 lawsuit against these shareholders cost the corporation over $2.1 million in corporate attorney fees (this is the figure the corporate management quit pulling legal bills) and costed one of the shareholders about $350,000.

Independent ANCSA candidates who run for seats on the corporate boards of directors not endorsed by management, have to pay out of pocket costs for proxy campaigns, travel, and for presenting petitions or “advisory” resolutions for shareholder consideration.  All of this burdensome load for independent shareholder candidates, while management candidate expenses are paid by the corporate treasury.

Alaska’s congressional representatives exempted Native corporations from federal securities laws in 1976 (P.L. 94-204) and extended ANCSA shareholder stock restrictions indefinitely in the 1987 amendments (P.L. 100-241).  Along with the above, Indigenous ANCSA stockholders have lost maximum participation rights (Sec. 2(b) of ANCSA) as well as their Constitutional rights (Sec. 2(c)); equal shareholder rights (Sec. 7(h)(1)); and stock ownership rights (Sec. 7(h)(3), when 21 years after our stock restrictions were supposed to be removed, shareholders are still unable to sell, trade or use our stock as collateral for loans like non-Native stockholders.

In other words, ANCSA’s Indigenous shareholders have essentially been put into corporate reservations, without their knowledge or consent.


Friday, October 12th, 2012

Frank Pagano, Past President, Koniag; Leisnoi, Inc.           October 4, 2012

Landless Natives & Purchase of a Senate Seat.  ANCSA shareholders, we urge you to open your eyes and take a good look at your Native corporation, the State of Alaska and the members of the Alaska Congressional Delegation.  Think about what they have done to you through the ANCSA legislation.  The people involved supported the practice of racial segregation which is discrimination/ racism as defined and understood in Title VI of the Civil Rights Act of 1964.  (The Blacks were segregated and that was identified as discrimination/racism).  Unbeknownst to many of us, the racial prejudice and discrimination has been practiced against Indigenous people for many years since ANCSA was passed into law and since our corporations were set up under Alaska law.

Our Congressional Delegation have purportedly been representing you and your interests in the U. S. Congress.  The ANCSA boards of directors and management personnel have also supposedly been representing you and your interests as well.  In this representation, they have allowed your civil and Constitutional rights to be taken away…you have nothing, you have no property rights…

Prior to the passage of ANCSA in 1971, Alaska’s Indigenous people owned the whole State of Alaska…all 375 million acres!  The ANCSA settlement limited Indigenous land ownership to only those lands that were “used and occupied”, and thus the 44 million acres conveyed to village corporations.  As a Tribal member or a shareholder, how many acres do you actually and personally own from ANCSA?  How many acres does your Tribe own from ANCSA?

And, the law says Natives received 44 million acres of lands?

Remember the recent Alaska Senatorial elections where your Native Corporations gave about $1.3 million of corporate dollars to a certain write-in campaign, even though that candidate lost in the primary?  The purpose of the ANCSA corporate donations was quite obvious…she was  supportive of the corporations’ continued segregation and racism against Indigenous  shareholders, which is in violation of federal law.  She supported the Native corporations to insure that no investigations took place on the SBA Section 8(a) minority contracting program.

As you may realize, the Native corporations have substantial control and influence over what happens in the State of Alaska.  Since the ANCSA corporations have bought themselves a senator, it not only affects the shareholders, believe me, it also affects all Alaskans, White, Black, Asians, Mexican Americans, everybody.  What else have they bought?

Lost Civil Rights and Corrupt Judicial System.  Pagano states, “I am an American citizen of Aleut descent, a lifetime resident of Alaska, military combat veteran of Korea and I do not appreciate my civil rights being taken away because of the greed, power and corruption of many of those select few on the ANCSA boards of directors. They are and have been hiding behind the law, the officers of the law and those in the judicial system, which they have great control and influence over.

Restricted & Inalienable Shareholder Stock.  Why is it critical that the Native Corporations, their leadership and their attorney advisers maintain and keep the shareholders stock restricted?  You should know and be aware that:

(1) you as a shareholders cannot sell your stock;
(2) you cannot go to the bank and borrow on your stock;
(3) you are not required to report your stock on your Income Tax; you report only a taxable dividend if the total dividend distribution is above the total contributed capital;
(4) your stock does not go into probate, but you can will it to whomever.
(5) you only have a stock certificate that show you own shares in the corporation. Many call it a dead Bird around our necks; it is not worth a piece of used toilet paper.
(6) ANCSA Amendment of Feb 3, 1987 extended indefinitely shareholders stock restrictions. These amendments also changed the ANCSA legislation from a contractual agreement into “Indian Law”, between Alaska’s Indigenous people and the U. S. Government on that date.
(7) Shareholder’s dissenter’s rights were also eliminated by the February 3, 1987 ANCSA amendment and made Alaska’s Indigenous shareholders captive shareholders (no different than plantation slavery…you can run but you cannot hide).

As a result of the above, ANCSA Boards have authority and license to dictate, and withhold information from their shareholders; file lawsuits against them, because of Alaska’s racist law, 3 AAC 08.315 False or Misleading statements, all paid for by your corporate treasury.  Interestingly, while shareholders are prohibited from alienating their stock, the corporation Boards of Directors along with their attorney advisers, can sell, trade or borrow, using the corporate assets as collateral, which represent the shareholders stock, and they’re doing this without shareholder vote and without any relevant and related information for shareholder consideration.

ANCSA corporations do not have to comply with securities laws as other corporations are required to by law.  In other words, they have a license to ignore or eliminate you from your corporation.  Many shareholders are deathly afraid to stand up to their corporations and their attorneys.  Shareholders fear being sued or black-balled by their own Native corporation or being referred to and called “dissidents”.

Ask yourself, or any of your shareholder friends or relatives:  At any time since 1971, has the stock restriction issue, ever been discussed or presented to shareholders as an important provision of the ANCSA law?  That, without public hearings, the stock restriction were extended indefinitely by the Congressional amendment of February 3, 1987?  Has this issue ever been put on the table and discussed or debated, in AFN or any of the ANCSA corporations during the past 40 years?

Village & Region Lawsuits: Similar. There are two ongoing lawsuits in two Regions that you should be aware of.  One is against several shareholders by a Regional Corporation.  Another is against a corporate board of directors by a Recall Group of shareholders.  The interesting thing about these two lawsuits is that they are being prosecuted by the same attorney from the same law firm.  It would appear to me that there may be a violation of the Professional Code of Conduct for the practicing attorney’s involved.

Take a close look at these lawsuits: one, in a local Region against its own shareholders. The same attorney represents the Regional Native Corporation in a continuing lawsuit against its shareholders.  This Regional Corporation is one of the largest regional Native corporations. They also have hired other high powered lawyers from California. This Region is spending millions of dollars to keep certain corporate and court information from becoming public.  They have filed all of the litigation documents under seal in the Federal Court in that particular and ongoing lawsuit, in which no shareholder or any public citizen can have access to the sealed information.  They have been very successful against the shareholders, to date.

Malfeasance and/or Misfeasance Exposure.  Many of us would like the U.S. Congress to free up our stock immediately; revoke all amendments passed by Congress without any public hearings before those of us being detrimentally affected.  If our stock was freed up or made alienable, the Native corporations, their boards and management staff, would be subject to state and federal securities laws, meaning that the Board members and staff would be held accountable for their wrong doings.  In my conservative opinion, this would eliminate up to 50% of the corruption in the State of Alaska.,

These issues can only be addressed by the Congress, as our shareholders, who are owners of our corporations, have essentially been silenced by and with threats of lawsuits against them! In order to achieve the needed changes to ANCSA, I believe many of us would and should support candidates against the incumbent delegation.  We should have new representatives to have the Congress immediately return our lands to our federally recognized Tribes, our subsistence rights restored and to free up our ANCSA stock, so that we can get our lives back to normal.

We should demand that the Governor of Alaska and the Legislature abolish the Alaska racist regulation 3AAC.08.315 False or Misleading Statements.  This is the culprit regulation which is a racist, segregationist regulation, because it only applies to Indigenous shareholders!

Regarding ANCSA lawsuits against shareholders, Pagano stated, “I can honestly say that during my tenure as president of my Regional and Village corporations, our attorneys advised me to sue shareholders for saying negative things about the corporation and its managements. My record is clear.  Never have I taken their advice; this type of action only makes the attorneys rich and causes division within our Indigenous ranks.”

Corporate Assets Sold, While Shareholder Stock Remain Restricted. The corporation boards and managements are and have been selling, trading or collateralizeing the assets of the corporation, in which individual shareholders own up to 100 shares of stock, while the shareholder stock remain restricted, without any accountability.  These so-called Native corporate leaders refuse to disclose who they sell our corporate assets to or disclose who the buyers are.  Why is this disclosure important?  We have learned that our assets, which are comprised of our lands, businesses and renewable and non-renewable resources, are being sold under market value, and usually at a loss, etc.  Remember, the Regions own very little surface lands. It is the village corporations that own all or most of the 44 million acres that were conveyed.  It is believed that the non-Native interests are targeting these lands for confiscation, just as they have done with a certain village corporation in the Kodiak region.  A certain law firm now has control over village corporation assets, including its 60,000 acres of land on Kodiak’s 34 mile road system.

SBA Section 8(a) Minority Contracting; Regional Corporate Subsidiary and the Anchorage Port Project. The Small Business Administration (SBA) Section 8(a) program is a good example of this abuse of our shareholder restricted stock. We know that companies upon companies have been created, many of which are and have been “shell” subsidiary companies, of which the shareholders have no idea who the owners or partners are. The “shell” game is a money- laundering scheme!  Example: When a regional corporation sold a wholly-owned 8(a) subsidiary company, it refused to disclose who they sold it to.  However, this company was the 8(a) contractor to Norad for the Anchorage Port project, which they reported they had contracts in excess of $350 million dollars, yet they reported that the subsidiary was sold for $11 million dollars, which sale was sudden, without explanation to the shareholders.  However, it was later learned that only the Anchorage Port contract was sold; the three other subsidiaries under that subsidiary were transferred to another subsidiary, KSI, and is currently based in Chantelly, Virginia.

Best Kept Secret.  Now, do you understand why the restrictions of shareholders stock is critical to the ANCSA boards and attorney’s and is probably the best-kept ANCSA secret?  Part of this secret is the government’s bias, prejudice, discriminatory and segregationist practice against ANCSA Indigenous shareholders. ANCSA as a federal law and the Alaska Securities regulation 3AAC.08.315 False or Misleading Statements APPLY ONLY TO ALASKA’S INDIGENOUS PEOPLE.  I urge all of you shareholders within the reading distance of this information, to carefully read and study this information…it’s our children’s, grand children’s and great grand children’s future!

Setup; False Criminal Allegations. The above are the reasons we on the board of directors who had salvaged my village corporation were set up, framed with false criminal allegations, taken to court with a judge who held a kangaroo hearing, found us guilty; court documents and records indicate evidence of collusion, and maybe serious complicitous conduct in the legal community among certain of the attorney’s and judges.

Who Are the Players in the Hostile Take-over?  I have been involved with The ANCSA Corporations for 40 years. This involvement has become a nightmare with my village corporation, because of the contractor, A-1 Timber and it’s attorney.  Examination of Court records indicate collusion between the owner/manager of A-1 Timber, the Recall group, with their attorney, to take over my village corporation.

“The Superior Court Judge involved is up for a retention vote this year. This Judge must be voted out and removed from the bench, for serious violations of the Canon rules.  The judge also disregarded the law in his ruling concerning the illegal conduct of a shareholder meeting.  His decisions in case 3AN-11-8404 C1 must be voided and a new trial be conducted by an impartial Judge,” Pagano concluded.

More to come!

Segregation. 1. The act or process of separating. 2. The unconstitutional policy of separating people on the basis of color, nationality, religion, or the like. (Black’s Law Dictionary, Third Pocket Edition)
Racism. The practice of racial discrimination, segregation, etc,
Exemptions from federal securities laws mean that the boards of directors and management personnel can commit any crime or wrongdoing without being prosecuted.
Dissidence. Disagreement; dissent
Malfeasance. A wrongful or unlawful act; esp., wrongdoing or misconduct by a public (corporate) official.
Misfeasance. 1. A lawful act performed in a wrongful manner. 2. More broadly, a transgression or trespass
Complicity. Association or participation in a criminal act; the act or state of being an accomplice * Under the Model Penal Code, a person can be an accomplice as a result of either that person’s own conduct or the conduct of another (such as an innocent agent) for which that person is legally accountable.