ANCSA at 30
Lecture Series, Number Three
Page Seven
John Shively: I also want to talk a little bit about 7(i). As Guy mentioned, it’s an incredibly important part of the Settlement Act. People understand it as sort of a Native concept, the whole concept of sharing, because Native cultures are based on the concept of sharing. Of course, people didn’t know who was going to have the valuable resources, perhaps with one exception. By the late 1970s, it was clear that oil in particular would have major impact for those who owned the rights. With the help of Stan McCutcheon, Tyonek was able to get about $14 million for the mineral rights under their lands. They used that money to finance the Settlement Act, among other things. They were key in getting the first meeting organized in 1966.
The other reason that people knew there was a lot of value to subsurface was that the state sold some of its in Prudhoe Bay for $900 million in 1969. My recollection from being around meetings was that it was well accepted that the whole Native community would share in the development of resources. In one of the bills, there was one statewide corporation to control all the subsurface. The one exception to that was Arctic Slope. I don’t know if Joe talked much about that when he was here, but they were never very pleased about 7(i) for obvious reasons. They thought they were going to have a lot of oil. It was a lot easier to share when there wasn’t anything to share.
As people began to divide into two camps -- the haves and the have-nots -- the people who thought they had resources had many reasons not to share, and the people who didn’t think they were going to have anything, of course, wanted everything shared. It became very difficult. Early on, NANA and Doyon sued each other in what was called a friendly lawsuit to try to look at some of the issues. Later on, because Arctic Slope had gotten about $33 million in bonuses from oil companies for the right to their land, it determined that none of that was sharable, and there was a lawsuit that involved all the corporations.
There were a variety of difficult issues. First of all, this is captured in two sentences in the Settlement Act, and so there wasn’t a lot of explaining done by Congress as to what was meant. There were questions about whether they meant all revenues, gross revenues, or if corporations could deduct certain expenses. You know, there’s a difference between active and passive development. How do you deal with that? Can losses be written off? What about tax benefits? How do you deal with regional corporate overhead, interest, lobbying fees? How is sand and gravel treated? All of these were very difficult issues, and the corporations were spending hundreds of thousands and ultimately millions of dollars trying to answer those questions. Of course, the legal profession helped make those questions even more difficult to answer.
That’s where I think I gained my distaste for some of what goes on in that profession. Not that I dislike all lawyers, despite what I said today, but I certainly watched as lawyers took advantage of their clients and argued over things that didn’t need to be argued over. It was in the courts and it was in the hands of the lawyers and it sat there for a number of years. Then Byron Mallott, who was CEO of Sealaska at the time, and Roy Huhndorf got together and they said look, we’re spending tons of money of this and we’re getting nowhere in the courts. So Byron issued an invitation to all the regions to come to a place that was neutral. They choose actually Kah-Nee-Ta, which was a lodge on the Warm Streams Reservation in Oregon.
Byron said he invited two representatives from each region, excluding the lawyers. He offered to pay the way of any corporations who felt they did not have the wherewithal to send two representatives. That meeting started about a year and a quarter of meetings where leaders, lawyers, accountants, but primarily Native leaders, sat around a table and turned the two sentences into 125 pages, some of which is pretty legalistically written. It stopped the litigation. A couple major arbitrations have taken place since then, but it took the whole thing out of the courts.
After those two arbitrations, the system designed by the Native leadership worked. What fascinated me about it was that the issue was solved only when the Native leadership took it back from the lawyers. If it had been left in the lawyers’ hands, it would still be there today. That takes us back to one of the things people often forget about the Settlement Act. It really was the first national act that said Natives can run their own affairs. At the time the Settlement Act was passed, the Bureau of Indian Affairs ran virtually everything that went on for tribal governments in the Lower 48. It’s safe to say they ran it poorly. It’s one of the reasons the Native leadership was not interested in looking at tribal government models in those days, because if you looked -- went around and looked at reservations run by tribal government -- it didn’t look like things were going well.
This was a real piece of self-determination legislation. The boards were to be Native. They were to hire the people. There was to be no federal oversight other than regulatory oversight. The Natives got to make the decisions. That’s why, I think, it’s been a success. Now, it hasn’t been 100 percent successful. It hasn’t solved every social or economic problem in rural Alaska, but there are very successful institutions around today that have a lot of important influence in this state. I believe Native Alaskans have far greater influence in Alaska, despite the inability to solve things like subsistence, than Native Americans have in other states.
So with that, Tom, I’ll be happy to stop. Oh, I did want to mention one thing about Laura. She was probably one of the most stunningly beautiful women I have ever met. She was incredible. And she certainly had an influence on some of the Republicans she had to deal with in Washington, D.C.
Tom Richards: We heard some comments in the last seminar about Laura. I’ve forgotten who made the comment about when the Yakimas loaned AFN the $250 or $225 thousand. The security they wanted was Laura Bergt and Mary Jane Fate. I was thinking I have some friends who are attorneys, and it’s easy to pick on them. In fact, it was so cold yesterday that the attorneys had their hands in their own pockets. I also appreciate what you said about Nick Gray. I have Nick’s exact words here, some excerpts anyhow. Nick said, “It is gratifying to observe the awakening of our people to the necessity of cooperative effort by forming associations, brotherhoods to protect our heritage. Our hereditary claims can hardly be denied since they extend far into the dim pages of history, far outdating the beginnings of most currently established nations. The next logical step for these separate and far flung groups is affiliation and then eventually a harmonious, whole department dedicated to achieve the most good for all.” That was just prior to the formation of AFN.
I also appreciated your comments about the efforts it takes to make a Native corporation work and be responsive to the needs of its shareholders.
You mentioned Byron Mallott. I’d like to quote something that Byron said back about 15 years ago when he was president of the Sealaska Corporation. Byron talked of the overwhelming reality of what it takes to make a business corporation work. He said, “It is an all-consuming effort that requires the kind of focus on business that virtually precludes a focus on other things that are important, because for one minute you take your mind off the business, all sorts of things begin to go awry, because your competitors aren’t doing the same thing.” Would you like to comment a little bit further about what it takes to make a Native corporation a success?
John Shively: I think it’s a lot harder than most business people think, because if you’re doing it right, you have to do exactly what Byron said, which is you have to pay attention to business. If you don’t, there are all sorts of pitfalls that even some of the biggest corporations in the country have shown us recently. I think responsible Native leaders also recognize that they have a responsibility beyond just the profit or the business or the service, and that is to protect and enhance Native culture. They have responsibility to provide shareholders with some avenues of employment and other things that other corporations don’t have.
If you look back at what the state was like in 1971 -- at the AFN conventions in the late 1960s and early 1970s, it was hard to find any Native dance groups. There were a few, but there weren’t very many. Now you have to turn them away. To me that’s an incredible story. A lot of people thought some parts of our culture were gone, especially in places like Kodiak where western influence had been around for a long time. It shows strength of character of Native people. It’s all part of the picture. The Settlement Act is a piece, a very important piece, but not the only piece. That’s why it’s so hard to run a Native corporation, because you’ve got a lot more than just business to keep your mind on.
Tom Richards: You mentioned when you went to work for NANA. I spent a number of years in the Yukon-Kuskokwim Delta in the Bethel area. I know you’ve traveled through a lot of those communities. Gene Peltola, one of my good friends and one of the four presidents of the Association of Village Council Presidents, and I often talked about NANA and Calista. He has told me several times that the worst mistake we ever made was letting John Shively go to work for NANA instead of Calista. Do you ever have any regrets about your work with NANA?
John Shively: I don’t have any regrets at all about my work in NANA. It was an incredible situation with John Schaeffer with his military background and his ability to organize things. Willie Hensley, like me, came around the on communist side of things, the social things. Robert Newman, who was the chairman of the board, was a respected elder. It was great to have this mix of culturally important things. I think NANA had the first elders’ conference, and the first Spirit Camp.
Would things have turned out any differently for Calista if I had gone to work there? I certainly would not even attempt to answer that question!
Tom Richards: I’m a NANA shareholder, and I think we’ve been pretty fortunate about the folks that have worked for us. Let’s see. Don Arsinger is listening to us today. He’s also contributed a lot to the success of NANA. I’ll ask one more question that I’ve asked the other speakers with respect to the implementation of the Alaska Native Claims Settlement Act. What is there that needs to be done to fully implement ANCSA?
John Shively: I don’t have anything much to add to what the others have said. I do believe that the subsistence issue needs to be resolved. I guess I respectfully disagree with my friend Sam. I still think that it’s worth looking at a Native preference. I think there are some people in the legislature, a few surprising people, who recognize that maybe that’s what this is really all about, which of course it is. There wouldn’t be any subsistence debate up here if it weren’t for Natives being in the state, so that is something that continues to be looked at.
It’s an issue that needs to be resolved. To be perfectly frank, for people in the villages it doesn’t need to be resolved at all, because they’re out hunting. They’re going to hunt and fish and feed their families. This has largely become, to me, a political argument. It’s unfortunate because it signals how little people in urban Alaska care about people in rural Alaska.
I would agree that although small village corporations still survive, the issue of whether or not they should be combined with tribal governments is something I’ve always thought. The corporate structure was not the appropriate thing for many villages, and I think that needs to be looked at.
I think the regional corporations, particularly the ones that are most successful, have a ways to go on shareholder hire. There have been some great examples. I think Red Dog Mine, which has always been about 60 percent or more Native hire, is an incredible example of what you can do in resource development. And look at some of the examples Sam mentioned of Doyon and others. The Native employment numbers should be higher, and I think there are ways to get there, but you can’t look at jobs the way westerners look at jobs. The best example we have for village employment, to me, is firefighters. And why does it work? Because we hire people as a group, not as individuals. The team is run by somebody from the village. It’s going to become more of a challenge for corporations to look at the people who were born after 1991. Janie will explain some ways for people if they want to deal with that, but I think it’s an issue that people have to talk about.
Lastly, you know, what the exact role of tribal governments is in the state. Although there’s certainly a growing recognition that the tribes exist, what they can and should do is an issue that still is under debate.
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