Native Corporations:
An Epic Story Benefiting Alaska
Carl Marrs
President of the ANCSA CEO Association
COMMONWEALTH NORTH FORUM

March 21, 2002
Questions and Answers

JOE GRIFFITH: Carl, could you discuss the pros and cons of the Alaska model versus the Nunavit (ph) model, that's the Canadian one up in the Canadian Northwest with respect to the aspirations of the Native people?

CARL MARRS: Well, I really can't, but I don't have a good understanding of where the Canadian people are going as far as the corporate side is. But I think their concerns are the same as all of ours, you know. Even though the corporations are doing fairly well across the board there are still many, many problems with Alaska Natives that need to be worked on in education and health. Those are still big issues, and I know those are the same type of issues that the Native people of Canada have.

MR. GRIFFITH: Good. From a practical standpoint are there simply too many village corporations and can we expect to see this number decline or, perhaps, go if the answer is not that there are. And I think the concern is related to the so-called shell corporations.

MR. MARRS: Well, I don't know if I want to take that one on. I don't know that there's too many village corporations. There's that many villages. I know that there's been mergers of village corporations. In fact, I don't remember the total number that have merged together, but I think all of those in the NANA region merged into one. And I think just a matter of economics of the size of the economy of the state I think we'll see additional mergers in the future.

MR. GRIFFITH: Here's one I don't know the answer to either. Do Native corporations pay state taxes?

MR. MARRS: Native corporations that once they're through their NOLs (ph) pay state taxes. Any other questions?

MR. GRIFFITH: I suspected that was the answer. What is the most important thing the State can do to stimulate further growth and investment of the Native corporations in Alaska?

MR. MARRS: Well, I think that as most all of us know these are always touchy issues, but the problems that we're having today with what we have dubbed the urban/rural divide. And I know Anchorage has spent a lot of time working on it and trying to work with Alaska Natives and other minority groups here in Anchorage and how we work with the Bush in developing ways to continue to support Bush area of Alaska. We tend to sort of look at Anchorage, Fairbanks, Juneau as the thriving economies, but when you look at them in reality we don't produce a lot. It's really Bush Alaska that produces it. I mean we don't produce oil in Anchorage. We don't produce mining in Anchorage. We don't produce timber, fisheries. We have a large population. And we have people in Juneau that tend to cut rural Alaska out of funding and create an imbalance it tends to create that problem. And it's just not Native people. Remember in Bush Alaska, rural Alaska is more than 50 percent non-Native and it affects them as well as it affects Alaska. It tends to focus back on Alaska Natives more than anything. But I think, you know, we've argued for a long time if we can just get to vote on subsistence and solve that problem I think things will come together much quicker because subsistence really is an economic benefit to rural Alaska, and it's something that's absolutely necessary not only to just Alaska Natives in those areas, but also non-Natives in those areas.

MR. GRIFFITH: Great answer, one that Commonwealth North has taken a position on repeatedly as most of you recall. I hope you tell the Legislature that while you're down there the rest of the day. And.....

MR. MARRS: I'm taking my pictures with me.

MR. GRIFFITH: And by the way, good luck down there. Why is the 13th corporation not included?

MR. MARRS: Not included in what?

MR. GRIFFITH: I don't know. I guess it wasn't in the list there or something.

MR. MARRS: The 13th regional corporation -- oh, not included in the list. Well, what we tried to do is focus on what the impact of the corporations are in Alaska and on the economy of Alaska. The 13th regional corporation is based on Seattle and it drives up and works in that economy.

MR. GRIFFITH: Okay. Yeah, that's that same sign in Seattle that says Gateway to Alaska. That's one that always gets me. Is there any impetus to sell corporations to n non-Native shareholders, any move in that area?

MR. MARRS: I haven't seen anywhere that that's done. There's always a group which we have also, a small group of people, that would like to be able to sell their stock in the corporations but yet a vast majority want to continue to hold on to that stock. So I don't see that vote coming for sometime. CIRI went through a vote about three years ago, maybe four years ago and it was overwhelmingly no, we want to stay as we are.

MR. GRIFFITH: Here's a relevant question regarding mineral resources. Calista's been in the news with their Donlen Creek effort. Mineral resources are a significant part of Alaska's money, the Native corporations and produce, can you comment on the future support and investment by Native corporations in exploration and development of the resources and these things that could be especially important to rural Alaska?

MR. MARRS: Well, again, I think that to the maximum extent possible we ought to be supporting development where it's economically feasible and environmentally doable throughout the state and rural Alaska because again, Anchorage really wouldn't survive without rural Alaska because we wouldn't have the transportation needs here, the banking needs here, without the developments that you have in rural Alaska and it takes working together to make that happen. And something like Donlen Creek to really help out western Alaska, if that can get going that would be a big boom to their economy also ours here in Anchorage, so to the extent that we can support those kind of developments, whether it's there or in northwestern Alaska, in central Alaska, southeastern Alaska, those projects need to get moving. We also understand probably better than anybody the environmental sensibility of development. The land is what makes us.

MR. GRIFFITH: Good answer. In urban Alaska we often think of Native regional corporations as pretty much connected to rural Alaska and perhaps they are. Would you care to comment on the economic importance of rural Alaska to urban Alaska? I think part of your prior question answered that, but maybe you could elaborate on it.

MR. MARRS: Well, again, all I can say is urban Alaska really wouldn't be here in its prosperous nature without rural Alaska. Again, most all the economies that we have today are driven from development in rural Alaska. Now, it's true that, you know, that there are areas of Alaska that don't have any kind of development going today, but that doesn't mean that we should forget them. I think that they have potential in the future. We need to continue to support those areas. I think there's ways of doing it that may be better, but again, that all takes work and it takes combined work of the communities of Anchorage, Fairbanks, Juneau, the larger cities working with rural Alaska. We have a lot to do on just regional lands in the way of development that's going to benefit everybody. And I can't for the life of me see why we should be battling over the dollars that go into supporting rural Alaska because that's where our future comes from.

MR. GRIFFITH: Not withstanding the subsistence issue, would you say that the ANCSA corporations are getting the support from the urban areas that they should?

MR. MARRS: I think in general, yes.

MR. GRIFFITH: Good. What is being done to prepare the next generation of leaders besides just scholarships?

MR. MARRS: Well, I think all the corporations have mentoring programs or summer intern or intern programs. And all of them, I think, are focused on education from K through 12. I think all of us realize that, you know, if we're going to make it in the future the younger generations starting at the very youngest need to have the education to get there. I mean we don't have to lose our culture to gain the education. We can do both. And I think most of the corporations do very effectively focusing on both.

MR. GRIFFITH: Will the Native corporations increase entrepreneurial investment in Alaska?

MR. MARRS: Wherever we think we can make money we will.

MR. GRIFFITH: Good answer. Typical businessman and that's good, too. What do you see for the future of life in the villages? What's going to happen in the future with them with respect to economy, subsistence, all the other questions that are out there?

MR. MARRS: Well, I think it's going to be a struggle in areas for some village. I think that that struggle is made a lot easier by solving the subsistence problem so that people out there know what they have, know what they can do, and don't have to worry about me flying out of Anchorage and shooting a moose in their back yard when there's, you know, not enough to feed a village in the area. I think that's the crux of the issue here. And again, I think that those villages in certain areas of Alaska will continue to struggle for awhile because there isn't any economies. Fisheries are down, something that they depend on heavily. Southeast timber is down. Mining's down. And we need to figure out ways to work with and boost -- help boost those economies in those areas. It's going to take some time, but we can't give up on them. You don't want to lose the ability to be able to develop in the future out there.

MR. GRIFFITH: Very true. There's a widespread perception that much of rural Alaska depends heavily on the Permanent Fund Dividend checks. First, is this accurate, and if so how will the effect or decreases or cuts in dividend checks affect the rural economies?

MR. MARRS: Well, I think that, you know, studies have shown that rural Alaska does depend heavily because, you know, pumping $2,000 a head, or whatever the number is, into an economy that has nothing is a big impact. And decreasing that number will have an impact. Decreasing any numbers in rural Alaska will have an impact on those economies. And that's why we have to be so careful in the way we do it. I don't believe that we can continue to pay Permanent Fund Dividends the way we are and add taxes and everything else to it because most of that in my mind just ends up, at least a third of it goes to Uncle Sam. And I try to find ways to keep money in Alaska, not send it to Washington. So -- but it's going to have a negative impact.

MR. GRIFFITH: Another question in sort of the same vein. Is rural Alaska preparing itself for the time that federal funding supported by Senator Stevens, the Denali Commission, things of that nature diminish or go away?

MR. MARRS: Well, Senator Stevens will be there until 2016.

MR. GRIFFITH: Let's hope.

MR. MARRS: Yeah, I think there are a lot of concerns and even while Senator Stevens is there, I mean he can't carry the load of everything -- all of our needs in Alaska. He sure tries and does a damn good job at it. But I think it's getting tougher and tougher for him to get these issues through Congress as the problems of the nation continue to mount, but we do need to -- and we are working on that. All of the regional corporations are working on ways to bolster these economies. But it also takes working with the State and the State Legislature and our working relationship with them has not been great.

MR. GRIFFITH: Carl, so you don't think this is going to go on all morning I've got about three or so more questions here and then we'll wrap it up and get you on your way to Juneau. We've heard a bit about outside work being done by the Native corporations outside the state of Alaska. Is there quite a bit of that? Is the opportunity being maximized? Specifically, I guess, Chugach Alaska has some bases they're running in Washington, things like that.

MR. MARRS: Well, I think most of the regional corporations have operations outside of the state of Alaska. A lot of those 8A (ph) programs. I know that there's construction companies. We've investments in telecommunications. I think you see the joint venture that Arctic Slope/Sea Alaska (indiscernible) have with AT&T. And the wireless area is a major investment in the Lower 48. That's been tied up in court, but I think eventually that'll come about and they'll do well off of that. Hotel resorts, tourism, the litany goes on of investments in the Lower 48. And the economy here is too small for these corporations to invest all their money in Alaska. I mean there's just not enough places yet to invest just strictly in Alaska.

MR. GRIFFITH: Do you think other Native corporations will opt to enroll shareholders born after '71?

MR. MARRS: I think that that will be a continuing trend, yeah.

MR. GRIFFITH: What do you see for the future, Carl, for CIRI, for the regional corporations, for the economy on the whole, Fire Island, things like that?

MR. MARRS: Well, I guess I'm always the optimist. I see a real positive future out there. I think because we continue to fight all of us collectively for projects that we want done. We've got some powerful people in Washington, D.C. that can get those done. I look at the gas pipeline. I believe that that will go. I think that the Congress is working on ways to incentivize the industry to do that project. I think with that going I think that, you know, we'll wear down Daschle and get ANWR. People think I'm crazy but I think we've shown that we can do things in Alaska in environmentally sensitive ways and get them done. And I think that'll prevail over time. I think that with missile defense, tourism, I really think that Alaska's got a bright future. I think we send a very confusing message out of Juneau though, and that's one of the problems. I mean people want to move into the state, but, you know, they don't know what their tax bill is going to be and, you know, what kind of environment they're coming into. We don't have a resource policy, you know. We don't have a long-term fiscal policy. And that makes it difficult to try to bring in people, corporations from the Lower 48. It's not a great environment to look at and invest, so we need to fix it.

MR. GRIFFITH: Well, Carl, these are some enlightening and interesting and timely information you've given to us today as well as host of tough questions. And perhaps on your trip down there today you can have some influence on Juneau and start to fix some of these problems that we know that are out there.

Carl Marr's speech to Commonwealth North
may be reproduced but credit must be given to
Commonwealth North.