Proposed legislation would allow the federal government to dictate Alaska Native Corporations (ANCs) reporting requirementsBy MARY KAUFFMAN
January 10, 2013
The report, entitled: "Alaska Native Corporations: Status 40 Years after Establishment and Future Considerations,” was issued by the Government Accountability Office (GAO). “While I appreciate Congressman Markey’s interest in Regional Alaska Native Corporations, I do not agree that it is the role of Congress to define what is in the best interest of their shareholders,” said Begich. “Since its passage 41 years ago, the Alaska Native Claims Settlement Act has allowed for each regional corporation to establish reporting and governance requirements for their shareholders that that work best for its people. Attempts to change federal reporting requirements for regional ANCSA corporations are unfounded and will fall on deaf ears. This is yet another example of how so many individuals in the federal government lack a real understanding of our unique state.” U.S. Sen. Begich and U.S. Sen. Lisa Murkowski (R-AK) became co-requesters of the report late last year. Sen. Begich notes he is a vocal advocate for Alaska Native priorities, including the successful 8a contracting program. Rep. Young said in a prepared statement, “This is yet another useless study asked for by the Ranking Member of the House Natural Resources Committee Rep. Ed Markey], and unfortunately a waste of the GAO’s valuable time.” Young said. "The advocacy and concern for Alaska Natives by the Congressman from Massachusetts is appreciated, but it is difficult to find any sincerity in his actions." “Following the release of the study which contained no recommendations or findings requiring further action, the Ranking Member has suggested problems where none exist, and proposed extreme government oversight and regulation by the Security and Exchange Commission (SEC)," said Young. Young said, "ANCs are governed by state law, and are required to prepare financial documents that are substantially in compliance with SEC reporting requirements. Notably, the accounting and audit field that is currently employed by ANCs is highly regulated, and noncompliance with standards would be reported to the Board and shareholders. Additionally, Compliance with federal securities laws, Sarbanes-Oxley and Dodd-Frank will cost Regional Corporations millions in fees to lawyers and accountants." “In the end, the Congressman from Massachusetts is proposing to save Alaska Natives from themselves by costing their own ANCs millions of dollars. If this is his form of advocacy, he can give lessons on how to lose friends and alienate people,” said Young. ANCSA requires ANCs to provide annual reports to their shareholders that contain "substantially all" of the information the US Securities and Exchange Commission (SEC) would require. As non-publicly traded companies, ANCs are not required to comply with federal securities law. Like other Alaska corporations, ANCSA regional corporations are subject to the state's corporate laws with limited exceptions, and are run by an elected board of directors. The report, "Regional Alaska Native Corporations, Status 40 Years After Establishment and Future Considerations", requested by Rep. Markey, examines the structure, history, and finances of the regional Alaska Native Corporations ("ANCs"). The Native American Contractors Association (NACA) is disappointed with the focus the Report places on financial reporting, which they say is misguided. They say there are two ways the Report is flawed. First, the Report fails to realize and recognize the mandate of self-determination that Congress built into the Alaska Native Claims Settlement Act. NACA's Executive Director, Kevin Allis stated, "It's this important policy of 'self-determination' that shapes the structure of the Regional Corporations, whereby shareholders that are all Alaska Natives vote to elect boards of directors to govern the ANCs." He continued, "Second, with respect to financial reports, the Report does not properly recognize the fact that the Regional Corporations all follow generally accepted accounting principles (GAAP), have annual audits conducted in accordance with generally accepted auditing standards (GAAS), and are not entities whose shares are publicly traded." The tenor of the Report could cause a reader to surmise that something is amiss, based solely upon the flawed notion that the Regional Corporations are not filing reports under securities laws that were designed for publicly-traded entities. The Native American Contractors Association, a national Native advocacy organization based in Washington, D.C., said despite the strong accounting principles utilized by Alaska Native Corporations, the Report and Rep. Markey attempt to find something wrong, insinuating that the Regional Corporations are not transparent to shareholders, nor to the state agency that regulate all corporations in Alaska. Federal securities laws were never designed to apply to closely held corporations, much less Alaska Native Regional Corporations said the association.
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