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'Native' Corporations Nudge Alaska Indians Into Capitalistic Ways

October 02, 1987|DAVID LAMB | Times Staff Writer

FAIRBANKS, Alaska — From his third-floor office in Doyon Ltd.'s unpretentious corporate headquarters, Morris Thompson oversees a financial empire unique to the 49th state.

Doyon, created just 16 years ago, has assets of $61 million. That figure doesn't include the 12.5 million acres of land, much of it rich in timber and minerals, that Doyon owns, making the corporation Alaska's largest landlord after the federal and state governments. Other ventures include oil-drilling rigs and real estate.

But Doyon is different from most ordinary companies, for its 9,000 shareholders are all Alaskan natives, predominantly Athabascan-speaking Indians, and their wealth was bestowed by Congress, which wanted to settle native land claims in the early 1970s in order to speed approval for the construction of the Alaska pipeline.

Not anxious to repeat the failures made in establishing Indian reservations in the American West, Congress in 1971 gave 44 million acres of federal land and nearly $1 billion in cash to 13 newly created regional and about 200 village corporations. Each of Alaska's natives--34,000 Eskimos, 34,000 American Indians and 8,800 Aleuts--received 100 shares in a regional corporation and 100 in a village corporation. In order to protect native ownership and to nudge the natives into the mainstream of a capitalistic society, Congress decreed that none of the shares could be sold for 20 years. Now, that deadline is less than four years away.

Thus far, native capitalism has been less than a full-fledged success. Many corporations have been plagued by inexperience--some of the board members didn't even have high school degrees--and by bad management and unwise investments. Three filed bankruptcy petitions last year and others just are keeping afloat. But Doyon, which showed a $1.7-million profit last year on revenue of $22 million, has been among the winners, which gives hope to Congress' bold experiment. The corporation has made a profit in all but three years.

Powerful Role

"We've operated with two strong philosophies," said Thompson, Doyon's president and the former federal commissioner of Indian Affairs from 1973 to 1976. "First, we want to create employment opportunities for our shareholders; and second, we want a strong and growing company. We were in the position of having land and capital but not management expertise. Now we're developing the expertise to go with our assets, and that's put us in the strongest position today we've been in for many years."

Almost everyone agrees that the corporations will play an increasingly important role in Alaska, and not just because they are politically active as a group. Their money is invested locally; their shareholders' concerns are exclusively local, unlike those of typical corporations whose interests may be spread over several continents, and their assets are enormous, ranging from ownership of the Hilton and Sheraton hotels in Anchorage to car washes and small businesses to vast land holdings and mineral rights. As Thompson put it: "We're here to stay, and if we're economically healthy, so will be Alaska."

But now an obstacle threatens the very survival of the corporations. In 1991, the shareholders will be allowed for the first time to sell their stock, and because most of the corporations are not paying dividends, many natives may be tempted to sell their undervalued shares to outside interests in exchange for a one-time windfall. Such a transaction would, in effect, negate the accomplishments of the Native Claims Settlement Act of 1971 and could transfer control of indigenous lands into the hands of whites and non-Alaskan multinational corporations.

Also in 1991, the native lands, currently tax-exempt, will become taxable, and some observers fear large tracts of land may have to be sold to pay off taxes. Already 24% of the corporate shares belonging to natives who have died since 1971 have passed to non-natives. Others have been transferred because of divorces.

"Sure I'd be tempted to sell," said Henry Swanson, a 92-year-old Aleut bachelor who lives in Dutch Harbor. "I've gotten one dividend check for $200 and one for $100 since 1971--that's all. There's lots of things I could use the money for, but what those shares are worth, I don't know. No one does."

1991 Issue Is Crucial

Swanson lives on about $1,000 a month provided by the state and federal governments. He rolls his own cigarettes, has a 60-year-old cast-iron stove that he has rigged up with an oil burner to provide heat and built his two-room home himself, partly out of plywood taken from abandoned World War II army buildings. His modest existence underscores the fact that few aboriginal Alaskans have achieved real economic gain because of the Native Claims Act.

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