REGIONAL 

ALASKA NATIVE 

CORPORATIONS

Status 40 Years after 

Establishment, and 

Future Considerations

Report to Congressional Requesters

December 2012

GAO-13-121

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-121, a report to 

congressional requesters

December 2012

REGIONAL ALASKA NATIVE CORPORATIONS

Status 40 Years after Establishment, and 

Future Considerations

Why GAO Did This Study

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.

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. 

What GAO Found

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 state’s 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.

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 region—include 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.

View GAO-13-121. For more information, 

contact Anne-Marie Fennell at (202) 512-3841 

or fennella@gao.gov.
Page i GAO-13-121 Regional Alaska Native Corporations

Letter 1 

Background 3

The Corporations Have Adopted a Variety of Governance 

Practices 16

The Corporations Are Subject to Some Federal and State Financial 

Reporting Requirements and Limited State Oversight 29

The Corporations Provide Diverse Monetary and Nonmonetary 

Benefits to Their Shareholders and Other Alaska Natives 38

Questions to Consider for the Future 48

Agency and Third-Party Comments and Our Evaluation 54

Appendix I Objectives, Scope, and Methodology 58

Appendix II Comments on Behalf of the 12 Regional Alaska Native 

Corporations 63

Appendix III Comments from Volunteers for the 13th Regional 

Corporation 68

Appendix IV GAO Contact and Staff Acknowledgments 71

Tables

Table 1: Characteristics of the Regional Alaska Native 

Corporations When Established in the 1970s 7

Table 2: Size and Scope of the 12 Regional Alaska Native 

Corporations in Alaska 13

Table 3: Regional Alaska Native Corporation Shareholder 

Demographics as Reported by the Corporations 16

Table 4: Characteristics of the Boards of Directors, Regional 

Alaska Native Corporations 18

Table 5: Election Information for the Regional Alaska Native 

Corporations, 2001-2011 24

Table 6: Financial and Dividend Information as Reported by the 

Regional Alaska Native Corporations, 2010 39

Contents 
Page ii GAO-13-121 Regional Alaska Native Corporations

Table 7: Scholarship Information as Reported by the Regional 

Alaska Native Corporations, 2010 41

Table 8: Employment of Alaska Natives by the Regional 

Corporations and Their Subsidiaries, as Reported by the 

Corporations 46

Table 9: New Classes of Shares Authorized by the Regional Alaska 

Native Corporations 53

Table 10: Regional Alaska Native Corporations and Communities 

Visited 59

Table 11: Regional Alaska Native Corporations’ Fiscal Years 

Corresponding to the 2010 Reporting Period 60

Figures

Figure 1: The Twelve Geographic Regions for the Regional Alaska 

Native Corporations in Alaska 5

Figure 2: Examples of Benefits Supported by the Regional Alaska 

Native Corporations 44

Abbreviations

SBA Small Business Administration

SEC 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 1 GAO-13-121 Regional Alaska Native Corporations

United States Government Accountability Office

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 settlement’s 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

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, 

In addition, a 13th 

regional Alaska Native corporation was subsequently formed to represent 

those Alaska Natives residing outside of Alaska.

 

1

Pub. L. No. 92-203, 85 Stat. 688 (1971), codified as amended at 43 U.S.C. §§ 1601-

1629h. 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 2 GAO-13-121 Regional Alaska Native Corporations

among other aims.3

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.

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.

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 

 

3

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 3 GAO-13-121 Regional Alaska Native Corporations

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 

corporation’s 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.

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

 

5

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

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 

Background 
 

Page 4 GAO-13-121 Regional Alaska Native Corporations

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 Corporation’s 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 corporation’s stock 

and, if they were enrolled in a village, no more than 100 shares of their 

village corporation’s stock. Under the original Settlement Act, shares 

could be inherited upon a shareholder’s 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

 

6

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 Interior’s 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 shareholder’s 

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 5 GAO-13-121 Regional Alaska Native Corporations

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

 

8

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.

Specifically, the 12 regional 
 

Page 6 GAO-13-121 Regional Alaska Native Corporations

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

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.

The 13th Regional Corporation 

does not share in this natural resource revenue, known as the 7(i) 

distribution.

11

 

9

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.

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 

10The 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.

1143 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 7 GAO-13-121 Regional Alaska Native Corporations

standard of living of Alaska Natives—many lived in extreme poverty and 

underprivileged status—through their own efforts.12

Table 1: Characteristics of the Regional Alaska Native Corporations When Established in the 1970s

Corporation

Land entitlement 

(acres in millions)a

Total cash 

distributions 

(thousands of dollars)

Number of 

shareholdersb Number of village corporationsc

Ahtna, Incorporated 1.78 $13,365 1,074 8 

The Aleut Corporation 1.43 40,537 3,249 13

Arctic Slope Regional Corporation 5.00 46,889 3,738 8 

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 5 

Cook Inlet Region, Inc. 2.41 77,797 6,264 7 

Doyon, Limited 12.22 113,160 9,061 34

Koniag, Incorporated 1.16 41,675 3,342 9d

NANA Regional Corporation 2.25 60,269 4,828 11

Sealaska Corporation 0.59 198,649 15,787 9 

The 13th Regional Corporation 0 46,601 4,426 0 

Total 39.66 $976,705 78,717 206e

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 (Neets’ai 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.

b

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.

 

12H.R. Rep. No. 92-523 at 5-6 (1971).
 

Page 8 GAO-13-121 Regional Alaska Native Corporations

c

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.

d

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 Act—the 206 included in 

the table, plus the 7 that elected revoked reserves, plus the 7 additional Koniag village corporations. 

Although the Settlement Act’s 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 Administration’s 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 Act’s 

enactment, or both.13

• 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—

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 quantum—as long as 

shareholders vote to amend the articles of incorporation to authorize 

such action.

 

13The 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.

Alaska Native Claims 

Settlement Act 

Amendments 
 

Page 9 GAO-13-121 Regional Alaska Native Corporations

the date when stock could be sold under the original act—many 

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

• 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,

The amendment allows the shareholders to 

vote to amend the articles of incorporation to lift restrictions on stock 

sales.

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 Act18 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.

 

14S. Rep. No. 100-201 at 20 (1987).

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

§§ 80a-1 to 80a-64.

16Securities Act of 1933, 48 Stat. 74, codified as amended at 15 U.S.C. §§ 77a-77bbbb.

17Securities Exchange Act of 1934, 48 Stat. 881, codified as amended at 15 U.S.C. 

§§ 78a-78pp.

18Pub. 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.

19Pub. 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 10 GAO-13-121 Regional Alaska Native Corporations

• Small Business Administration’s (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 

corporation’s 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 SBA’s 8(a) program—one of the federal government’s 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.

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 

 

2043 U.S.C. § 1626(e).

21GAO, 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 2010—enacted 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.

Regional Corporation 

Organization
 

Page 11 GAO-13-121 Regional Alaska Native Corporations

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 incorporation—which 

contain basic information about the corporation and its structure—must 

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 Act’s 

legislative history, board members and officers were expected to avoid 

abuses of the act’s 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

 

22The 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).

State corporate law does not authorize 

23Corporations also have bylaws—which contain the details of the corporations’ internal 

governance arrangements—but bylaws are not filed with the state.

24As 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).

25H.R. Conf. Rep. No. 92-746 at 37 (1971).
 

Page 12 GAO-13-121 Regional Alaska Native Corporations

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 corporation’s board of directors—who are 

fiduciaries of the corporation and owe it the duties of good faith, care, and 

loyalty—manages 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 shares—specified in state law or the 

articles of incorporation and known as a quorum—must 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 else—a proxy holder—to 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.

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

grown into diverse and often large businesses, important to Alaska’s 

economy. Although many of the corporations struggled financially when 

they were first created and into the 1980s and 1990s—with at least 

2 declaring bankruptcy—by 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 

Overview of the Regional 

Corporations 
 

Page 13 GAO-13-121 Regional Alaska Native Corporations

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 world’s largest zinc-lead mines is situated, and 

the Arctic Slope Regional Corporation is a major producer of oil on 

Alaska’s 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

Table 2: Size and Scope of the 12 Regional Alaska Native Corporations in Alaska

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.

Dollars in thousands

Corporation Major business operationsa Gross revenue(2010)

Net income

(2010)

Ahtna, Incorporated 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

The Aleut Corporation 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

 

26Debbie Cutler, “2011 Top 49ers: Superheroes of Success,” Alaska Business Monthly, 

October 2011.

27The regional corporations reported that collectively they are also involved as partial 

owners of, or in joint ventures or partnerships with, approximately 150 subsidiaries.
 

Page 14 GAO-13-121 Regional Alaska Native Corporations

Dollars in thousands

Corporation Major business operationsa Gross revenue

(2010)

Net income

(2010)

Bristol Bay Native Corporation Petroleum distribution, oil field services, construction, government 

contracting services, natural resource management and 

development, tourism

1,667,200 43,017

Calista Corporation Federal contracting, construction equipment and excavating, 

communications and media, real estate, energy, engineering and 

environmental services

234,866 18,301

Chugach Alaska Corporation Base operation services, construction, information technology and 

telecom services, education, engineering, oil and gas services, 

mineral extraction

936,975 26,492

Cook Inlet Region, Inc. 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

Koniag, Incorporated Marine construction, aerospace manufacturing, information 

technology services, resource development and extraction, naval 

marine services

131,052 8,654

NANA Regional Corporation Government contracting, oilfield and mining services, professional 

services including engineering, hospitality, natural resources

1,592,826 41,173

Sealaska Corporation 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

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

 

28In 1986, the 13th Regional Corporation filed for bankruptcy.

In a 2009 letter to shareholders, the corporation’s 

board of directors explained that a series of events—including litigation 

involving the corporation’s former chief executive officer and changes in 

the construction and real estate markets where the corporation had 

operations—negatively affected the corporation to the point of insolvency. 
 

Page 15 GAO-13-121 Regional Alaska Native Corporations

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 lifestyle—hunting, fishing, and gathering wild plants for 

food—which 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 16 GAO-13-121 Regional Alaska Native Corporations

Table 3: Regional Alaska Native Corporation Shareholder Demographics as Reported by the Corporations

Corporationa 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%

The Aleut Corporation 3,750 2,195 1,551 41

Arctic Slope Regional Corporation 11,090 9,052 1,620 15

Bering Straits Native Corporation 6,455 4,865 1,590 25

Bristol Bay Native Corporation 8,660 7,090 1,570 18

Calista Corporation 12,602 10,559 830 7 

Chugach Alaska Corporation 2,520 1,380 1,010 40

Cook Inlet Region, Inc. 7,986 4,900 3,086 39

Doyon, Limited 18,536 13,891 4,645 25

Koniag, Incorporated 3,696 1,990 1,706 46

NANA Regional Corporation 12,923 11,155 1,768 14

Sealaska Corporation 21,263 11,159 10,104 48

Total 111,232 79,666 29,801 27%

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 corporation’s 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.

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 state’s corporate laws, with a few limited 

exceptions,29

 

29Regional 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.

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 

The Corporations 

Have Adopted 

a Variety of 

Governance Practices
 

Page 17 GAO-13-121 Regional Alaska Native Corporations

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.

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

 

30State 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.

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 director’s tenure on a board 

ranged considerably across and within the corporations, from less than 

1 year to 39 years.

Board Composition 

and Operation
 

Page 18 GAO-13-121 Regional Alaska Native Corporations

Table 4: Characteristics of the Boards of Directors, Regional Alaska Native Corporations

Number of directors by total time served

Corporationa Number of directors

Male:female 

ratio

Less than 

10 years

From 10 to 

20 years

More than 

20 years

Ahtna, Incorporated 13 7:6 6 5 2 

The Aleut Corporation 9 5:4 4 5 0 

Arctic Slope Regional Corporation 15 9:6 6 8 1 

Bering Straits Native Corporation 15 11:4 5 5 5 

Bristol Bay Native Corporation 12 10:2 6 2 4 

Calista Corporation 11 9:2 5 2 4 

Chugach Alaska Corporation 9 5:4 5 4 0 

Cook Inlet Region, Inc. 15 11:4 10 1 4 

Doyon, Limited 13 7:6 8 4 1 

Koniag, Incorporated 9 7:2 7 2 0 

NANA Regional Corporation 23b 13:9 12 7 3 

Sealaska Corporation 13 9:4 6 2 5 

Source: Regional Alaska Native corporations.

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.

b

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 

corporation’s financial reporting practices.31

 

31The 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.

Other common committees 
 

Page 19 GAO-13-121 Regional Alaska Native Corporations

include executive, lands, compensation, and shareholder relations.32

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 director’s 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 

director’s family, as required by state regulation.

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 committee’s authority may be advisory, or it may have some 

decision-making authority granted by the board.

33

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, 

 

32State 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).

33Specifically, 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). 

Executive and Board 

Compensation 
 

Page 20 GAO-13-121 Regional Alaska Native Corporations

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

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.

Our review showed that the regional 

corporations’ proxy statements provide varying levels of detail on 

compensation amounts and methods used to determine compensation.

36

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.

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.

37

 

34The 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).

For the corporations’ 

2010 reporting period, total reported compensation ranged from 

35Throughout 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.

363 Alaska Admin. Code § 08.345(b)(2)(A).

373 Alaska Admin. Code § 08.345(b)(2)(B).
 

Page 21 GAO-13-121 Regional Alaska Native Corporations

$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 22 GAO-13-121 Regional Alaska Native Corporations

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.

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 region’s villages, whereas another 

established units corresponding to certain villages or communities and 

 

38In 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 company’s performance and 

the executive’s 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 corporation’s annual meetings.

Board Elections
 

Page 23 GAO-13-121 Regional Alaska Native Corporations

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 24 GAO-13-121 Regional Alaska Native Corporations

interested candidates.39

Table 5: Election Information for the Regional Alaska Native Corporations, 2001-2011

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. 

Corporation

Number 

of board

directors

Geographic 

representation 

requirements

Board 

slate

Number of 

2001 directors 

serving in 2011

Ahtna, Incorporated 13 Yes No 5 

The Aleut Corporation 9 No No 3 

Arctic Slope Regional Corporation 15 Yes Noa 8 

Bering Straits Native Corporation 15 No No 9 

Bristol Bay Native Corporation 12 No Yes 4 

Calista Corporation 11 Yes Yes 6 

Chugach Alaska Corporation 9 No Yes 3 

Cook Inlet Region, Inc. 15 No Yes 4 

Doyon, Limited 13 Yes Yesb 5 

Koniag, Incorporated 9 No Yes 1 

NANA Regional Corporation 23 Yes No 5 

Sealaska Corporation 13 No Yes 7 

Source: Regional Alaska Native corporations.

a

Through its 2005 election, the Arctic Slope Regional Corporation identified board-endorsed 

candidates.

b

In August 2010, Doyon, Limited’s board voted to cease developing a board slate, starting with its 

2011 elections.

 

39Alaska 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 statute’s 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 25 GAO-13-121 Regional Alaska Native Corporations

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

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 

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.

 

40According to the bylaws of the 13th Regional Corporation, its quorum is one-third of 

voting shares.

41The Alaska Department of Commerce, Community, and Economic Development’s 

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 corporation’s 

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 26 GAO-13-121 Regional Alaska Native Corporations

candidates but that board director positions have also changed hands 

numerous times. Some shareholders we spoke with said that their 

corporation’s 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.

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 corporation’s 

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 

Shareholder Involvement
 

Page 27 GAO-13-121 Regional Alaska Native Corporations

annual meeting via webcast for the first time, and approximately 

400 shareholders participated.

Three corporations have established shareholder advisory committees 

comprising volunteer shareholders—representing shareholders living both 

within and outside of Alaska—to 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 28 GAO-13-121 Regional Alaska Native Corporations

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

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 

Examples of submitted shareholder resolutions included limiting terms for 

the board of directors to two consecutive terms, designating a specific 

location for the corporation’s next annual meeting, and establishing a 

settlement trust.

 

42The 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 29 GAO-13-121 Regional Alaska Native Corporations

corporation’s 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 

corporation’s action, and under state law, successfully challenging a 

corporate board’s 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 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 

registrant’s annual report to shareholders.46 The act does not provide a 

federal role for monitoring the corporations’ compliance with this 

requirement, and the state’s oversight is generally limited to enforcement 

of state securities laws and proxy regulations.

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, 

 

43Heinrichs 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 corporation’s denial of access to corporate documents 

concerning a business transaction and executive compensation.)

44Oliver v. Sealaska Corp., 192 F.3d 1220 (9th Cir. 1999).

45Notti 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).

4643 U.S.C. § 1625(c)(1).

The Corporations Are 

Subject to Some 

Federal and State 

Financial Reporting 

Requirements and 

Limited State 

Oversight 

Federal and State 

Financial Reporting 

Requirements for Alaska 

Native Corporations
 

Page 30 GAO-13-121 Regional Alaska Native Corporations

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

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.

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.

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 registrant’s 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

 

47H.R. Rep. No. 94-729 at 20 (1975).

Regulations promulgated under the 

Securities Exchange Act of 1934 prescribe the information that SEC 

48H.R. Rep. No. 94-729 at 19 (1975).

4943 U.S.C. § 1606(o).

50See http://www.sec.gov/answers/annrep.htm.
 

Page 31 GAO-13-121 Regional Alaska Native Corporations

registrants must provide in their annual reports to shareholders.51

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 state’s 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.

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 company’s financial condition and results of operations for 

each of the last 5 fiscal years. A management discussion and analysis of 

the corporation’s 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 

corporation’s 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 company’s earnings and cash flow, so that investors can ascertain the 

likelihood that past performance is indicative of future performance.

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

 

51Specifically, 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 

registrant’s 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.

52Alaska 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. 

53On 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 32 GAO-13-121 Regional Alaska Native Corporations

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 misrepresentations—generally 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 misleading—and 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 nominee’s or director’s family is employed or has an 

ownership interest. Proxy solicitations from a regional corporation’s board 

of directors must also contain detailed information about the corporation’s 

current directors and committees, among other information.

The Settlement Act does not provide a federal role in ensuring that the 

regional corporations comply with the act’s 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 registrant’s 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 

 

543 Alaska Admin. Code §§ 08.300-08.365.

Federal and State 

Oversight of Alaska 

Native Corporations’ 

Financial Reporting
 

Page 33 GAO-13-121 Regional Alaska Native Corporations

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 staff’s 

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 Act’s requirement that 

regional corporations’ annual shareholder reports contain 

“substantially all the information” found in an SEC registrant’s 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 registrant’s 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 

 

55The 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).

56H.R. Rep. No. 94-729 at 20 (1975).
 

Page 34 GAO-13-121 Regional Alaska Native Corporations

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 registrant’s 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 registrant’s 

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 corporations—questions 

relating to proxy materials filed with the state—from 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 35 GAO-13-121 Regional Alaska Native Corporations

The state has the authority to review all proxy solicitations but largely 

reviews only those solicitations for which a corporation or a corporation’s 

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

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 corporation’s use of 

social media. The state determined that four complaints involved matters 

outside the state’s 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.

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.

For investigations where the state determines that a violation has 

occurred, it has the authority to issue an administrative order to parties 

 

57The 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 36 GAO-13-121 Regional Alaska Native Corporations

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 corporation’s or a regional 

corporation shareholder’s compliance with the state’s proxy regulations.59

Six of the investigations involved a regional corporation’s board 

solicitation, and 22 were related to shareholder solicitations.60

• Failure to file with the state proxy material that meets the 

requirements for filing.

Administrative orders issued have generally found one or more of the 

following violations:

• 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 corporation’s 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.

 

58The 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.

59Five of the investigations were resolved through consent agreements whereby the 

alleged violator agreed to the sanctions.

60One investigation involved a village corporation’s 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 corporation’s board of 

directors.
 

Page 37 GAO-13-121 Regional Alaska Native Corporations

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 shareholders—who 

alleged that the corporations’ proxy solicitation did not include required 

information, contained false and misleading statements, or both—the 

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 shareholder’s solicitation, which claimed that board directors 

appointed themselves to top executive positions regardless of 

qualifications, was false and misleading.62

 

61See 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).

62Arctic Slope Regional Corporation v. Rodney S. Pederson, 3AN-11-05733CI 

(AK Superior Court).
 

Page 38 GAO-13-121 Regional Alaska Native Corporations

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.

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 

 

63Amendments 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). 

64On 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.

The Corporations 

Provide Diverse 

Monetary and 

Nonmonetary 

Benefits to Their 

Shareholders and 

Other Alaska Natives

Monetary Benefits
 

Page 39 GAO-13-121 Regional Alaska Native Corporations

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

Gross revenue

(thousands

of dollars)

Net income

(thousands 

of dollars)

Declared

dividends 

per share 

(dollars)a

Actual dividends 

and distributions 

paid in total 

(thousands 

of dollars)b

Actual dividends 

and distributions 

as a percentage of 

net income

Ahtna, Incorporated $243,430 $1,739 $4.00c $880 51%

The Aleut Corporation 143,046 8,381 21.00 7,670d 92

Arctic Slope Regional Corporation 2,331,681 164,433 64.26 73,667 45

Bering Straits Native Corporation 197,706 8,848 2.35 1,488 17

Bristol Bay Native Corporation 1,667,200 43,017 13.80 7,307 17

Calista Corporation 234,866 18,301 2.75c 4,161d 23

Chugach Alaska Corporation 936,975 26,492 41.92c 9,270 35

Cook Inlet Region, Inc. 188,357 16,535 35.42 22,236 135e

Doyon, Limited 280,268 15,678 4.21 7,253d 46

Koniag, Incorporated 131,052 8,654 10.50 3,903 45

NANA Regional Corporation 1,592,826 41,173 14.00 21,714d 53

Sealaska Corporation $223,823 $15,154 $3.56c $7,690 51%

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.

b

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.

c

Declared dividend amounts for this corporation were contained in the corporation’s annual report to 

shareholders but outside of its audited consolidated financial statements.
 

Page 40 GAO-13-121 Regional Alaska Native Corporations

d

These amounts were declared in the 2010 reporting period but were paid the following year.

e

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 corporation’s 

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 payments—which ranged from $300 to $4,000 per individual 

during the 2010 reporting period—through various mechanisms, 

including from designated trusts, as a separate class of shares, or in 

cash payments authorized by the corporations’ boards.66

 

65Regarding the 13th Regional Corporation, one shareholder we spoke with, who actively 

tracked and maintained documentation on the corporation’s 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.

Several 

corporate officials we spoke with commented that these payments 

66At 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 41 GAO-13-121 Regional Alaska Native Corporations

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 Scholarship support

Ahtna, 

Incorporated

Ahtna Heritage 

Foundation

• 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

The Aleut 

Corporation

Aleut Foundation • Higher education and vocational scholarships to shareholders or shareholder 

descendants

• Total of $615,315 provided by foundation for almost 200 scholarships

Arctic Slope 

Regional 

Corporation

Arctic Education 

Foundation

• 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

Bering Straits 

Native Corporation

Bering Straits Foundation • Higher education and vocational scholarships to shareholders or shareholder 

descendants

• Students may receive $400 to $1,000 per semester or quarter

• Total of $209,514 provided by foundation for 148 scholarships

Bristol Bay Native 

Corporation

Bristol Bay Education 

Foundation

• 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

Calista Corporation Calista Scholarship Fund • 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
 

Page 42 GAO-13-121 Regional Alaska Native Corporations

Corporation Scholarship provider Scholarship support

Chugach Alaska 

Corporation

Chugach Heritage 

Foundation

• 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

Cook Inlet Region, 

Inc.

CIRI Foundation • Higher education and vocational scholarships to shareholders or shareholder 

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

Doyon, Limited Doyon Foundation • Higher education and vocational scholarships to shareholders or shareholder 

descendants

• Students may receive $400 per semester to $7,000 per year

• Total of $482,771 provided by foundation to about 400 recipients

Koniag, 

Incorporated

Koniag Education 

Foundation

• Higher education scholarships to shareholders or shareholder descendants

• Students may receive up to $2,500 per year for general scholarships

• Total of $153,450 provided to the foundation

NANA Regional 

Corporation

Aqqaluk Trust • 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

Sealaska 

Corporation

Sealaska Heritage 

Institute

• Higher education scholarships to shareholders or shareholder descendants

• 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.

 

67Memorial benefits may be provided directly from the regional corporations or through 

corporation-affiliated nonprofit organizations.
 

Page 43 GAO-13-121 Regional Alaska Native Corporations

• 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 company’s 

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 corporation’s 

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 school’s graduates. Another 

corporation provides funding to a vocational facility in the region, 

which offers junior and high school students varied training, such as 

driver’s 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 

 

68Department of the Interior, Alaska Native Claims Settlement Act (ANCSA): ANCSA 1985 

Study (Washington, D.C.: 1985).
 

Page 44 GAO-13-121 Regional Alaska Native Corporations

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 offered by the regional corporations—often in 

partnership with village corporations, tribal organizations, and nonprofit 

organizations within the region—include 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:

Nonmonetary Benefits
 

Page 45 GAO-13-121 Regional Alaska Native Corporations

• 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.

 

69To 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 46 GAO-13-121 Regional Alaska Native Corporations

Table 8: Employment of Alaska Natives by the Regional Corporations and Their Subsidiaries, as Reported by the 

Corporations

Number of employees

Corporation Subsidiaries

Corporation

Total 

employees

Shareholder 

employeesa

(percentage)

Total 

employees

Shareholder 

employeesa

(percentage)

Ahtna, Incorporated 29 11 (38%) 1,780 68 (4%)

The Aleut Corporation 14 9 (64) 523 33 (6)

Arctic Slope Regional Corporation b b b b

Bering Straits Native Corporation 63 22 (35) 1,031 46 (4)

Bristol Bay Native Corporationc 34 22 (65) 3,486 88 (3)

Calista Corporationc 53 30 (57) 1,351 52 (4)

Chugach Alaska Corporation 307 51 (17) 5,086 56 (1)

Cook Inlet Region, Inc. 79 40 (51) 1,276 51 (4)

Doyon, Limitedc 74 51 (69) 2,761 438 (16)

Koniag, Incorporated 57 23 (40) 695 12 (2)

NANA Regional Corporation 102 97 (95) 10,846 1,147 (11)

Sealaska Corporation 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 corporation’s 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.

b

Data not provided.

c

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 47 GAO-13-121 Regional Alaska Native Corporations

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 subsistence—which 

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 ways—such as seeking 

funding or procuring physical resources—in 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 48 GAO-13-121 Regional Alaska Native Corporations

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.

• 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 

organization’s 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 

 

70Under 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.

Questions to Consider 

for the Future
 

Page 49 GAO-13-121 Regional Alaska Native Corporations

be a shareholder—this 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.

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 

Act’s 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 SEC’s registrant’s 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.

Should the “Substantially 

All” Federal Reporting 

Requirement Be Clarified 

and Overseen? 
 

Page 50 GAO-13-121 Regional 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 SBA’s 8(a) program—advantages that have come under 

congressional scrutiny in recent years.72

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 Interior’s 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 Interior’s responsibility to shareholders of the 

Alaska Native corporations and specifically to shareholders of the 13th 

Regional Corporation, Interior’s 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 

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.

 

71In 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.

72GAO-06-399 and GAO-12-84. 

What Is the Appropriate 

Role of the Federal 

Government in 

Maintaining the Solvency 

of Alaska Native 

Corporations? 
 

Page 51 GAO-13-121 Regional Alaska Native Corporations

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

Also, several shareholders we spoke with suggested that the 13th 

Regional Corporation’s 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.

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 

land’s associated natural resource revenue. As of this report, however, 

this proposal had not been acted upon.

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 

 

73H.R. 5617, 109th Cong. (2006), and H.R. 5403, 110th Cong. (2008).

Who Should Be a 

Shareholder? 
 

Page 52 GAO-13-121 Regional Alaska Native Corporations

corporation’s 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, Calista’s 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.

 

74Critics 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 Envt’l Law 155 (2005).
 

Page 53 GAO-13-121 Regional Alaska Native Corporations

Table 9: New Classes of Shares Authorized by the Regional Alaska Native Corporations

Corporation

Natives born after 

Dec. 18, 1971, or 

descendantsa

Natives who 

missed the original 

enrollmentb

Native shareholders 

who have attained 

the age of 65c

Number of 

shareholders

in 1982

Number of 

shareholders

in 2011-2012

Ahtna, Incorporated d 1,074 1,751

Arctic Slope Regional 

Corporation

e  3,738 11,090

Doyon, Limited f   9,061 18,536

Koniag, Incorporated g 3,342 3,696

NANA Regional Corporation h i 4,828 12,923

Sealaska Corporation j   15,787 21,263

Source: Regional Alaska Native corporations.

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.

b

43 U.S.C. § 1606(g)(1)(B)(i)(II). Only one regional corporation (Sealaska) has issued these shares 

as life estate shares.

c

43 U.S.C. § 1606(g)(1)(B)(i)(III). These shares are issued as life estate shares.

d

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.

e

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.

f

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 54 GAO-13-121 Regional Alaska Native Corporations

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 shareholder’s 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 corporation’s future operations and direction.

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 

Agency and ThirdParty Comments and 

Our Evaluation
 

Page 55 GAO-13-121 Regional Alaska Native Corporations

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 Act’s 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

 

75The 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. 

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 
 

Page 56 GAO-13-121 Regional Alaska Native Corporations

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 57 GAO-13-121 Regional Alaska Native Corporations

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
Appendix I: Objectives, Scope, and 

Methodology

Page 58 GAO-13-121 Regional Alaska Native 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.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.

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 59 GAO-13-121 Regional Alaska Native Corporations

Table 10: Regional Alaska Native Corporations and Communities Visited

Corporation Community

Ahtna, Incorporated Gakona

Glennallen

Bering Straits Native Corporation Nome

Bristol Bay Native Corporation Dillingham

Kokhanok

Calista Corporation Akiachak

Akiak

Bethel

Kwethluk

Cook Inlet Region, Inc. Anchorage

Doyon, Limited Fairbanks

Minto

Sealaska Corporation Hoonah

Juneau

Kake 

Source: GAO.

We interviewed officials from the Department of the Interior’s 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 corporation’s fiscal year 

corresponding most closely to calendar year 2010 (see table 11).
Appendix I: Objectives, Scope, and 

Methodology

Page 60 GAO-13-121 Regional Alaska Native Corporations

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

The Aleut Corporation Apr. 1, 2010 Mar. 31, 2011

Arctic Slope Regional Corporation Jan. 1, 2010 Dec. 31, 2010

Bering Straits Native Corporation Apr. 1, 2010 Mar. 31, 2011

Bristol Bay Native Corporation Apr. 1, 2010 Mar. 31, 2011

Calista Corporation Jan. 1, 2010 Dec. 31, 2010

Chugach Alaska Corporation Jan. 1, 2010 Dec. 31, 2010

Cook Inlet Region, Inc. Jan. 1, 2010 Dec. 31, 2010

Doyon, Limited Oct. 1, 2009 Sept. 30, 2010

Koniag, Incorporated Apr. 1, 2010 Mar. 31, 2011

NANA Regional Corporation Oct. 1, 2009 Sept. 30, 2010

Sealaska Corporation Jan. 1, 2010 Dec. 31, 2010

Source: Regional Alaska Native corporations.

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 Commission’s (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 
Appendix I: Objectives, Scope, and 

Methodology

Page 61 GAO-13-121 Regional Alaska Native Corporations

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 Alaska’s 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 information—including the corporations’ 

gross revenues, net income, and dividends—we 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 
Appendix I: Objectives, Scope, and 

Methodology

Page 62 GAO-13-121 Regional Alaska Native Corporations

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.
Appendix II: Comments on Behalf of the 12 

Regional Alaska Native Corporations

Page 63 GAO-13-121 Regional Alaska Native Corporations

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 64 GAO-13-121 Regional Alaska Native Corporations
Appendix II: Comments on Behalf of the 12 

Regional Alaska Native Corporations

Page 65 GAO-13-121 Regional Alaska Native Corporations
Appendix II: Comments on Behalf of the 12 

Regional Alaska Native Corporations

Page 66 GAO-13-121 Regional Alaska Native Corporations
Appendix II: Comments on Behalf of the 12 

Regional Alaska Native Corporations

Page 67 GAO-13-121 Regional Alaska Native Corporations
Appendix III: Comments from Volunteers for 

the 13th Regional Corporation 

Page 68 GAO-13-121 Regional Alaska Native Corporations 

Appendix III: Comments from Volunteers for 

the 13th Regional Corporation 
Appendix III: Comments from Volunteers for 

the 13th Regional Corporation 

Page 69 GAO-13-121 Regional Alaska Native Corporations 
Appendix III: Comments from Volunteers for 

the 13th Regional Corporation 

Page 70 GAO-13-121 Regional Alaska Native Corporations 
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 71 GAO-13-121 Regional Alaska Native Corporations

Anne-Marie Fennell, (202) 512-3841 or fennella@gao.gov

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.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(361340)
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. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s 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.”

The price of each GAO publication reflects GAO’s 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 GAO’s 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 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. 

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations 

Public Affairs

Please Print on Recycled Paper.