Making sense of '17 years of profitability'

My turn

Posted: Thursday, February 01, 2001

Sealaska said, 'We have enjoyed 17 years of profitability. However, we have had recent significant losses...' If it was established in 1991, during the recall, that Sealaska had never been a profitable company, then how do they now claim, '17 years of profitability?'

Recently the Empire published a Sealaska article saying, "For the last 17 years Sealaska has enjoyed financial profitability." Our reasoning was this: Since the 1971 Alaska Native Claims Settlement Act passed in Congress, almost 20 years had gone by and shareholders never received a dividend from Sealaska. To date, shareholders have received about $10,000, or $300 a year, or an average of $28 a month for 30 years. (This amount would not even be enough for a bag of groceries a week).

In 1991, Sealaska paid out only $2,000. Their action caused a shareholder revolt when we became aware of their exorbitant board salaries and bonuses over the last 20 years. A shareholder group called "Shareholders for Shareholders" was organized to call a special meeting to vote to remove the entire board for what we considered gross mismanagement.

The hearing lasted almost five hours and a startling fact came out which the shareholder groups had been claiming all along. Sealaska had never made a profit on any of the businesses and the only one showing a profit was Sealaska Timber Corporation, which was selling trees that were a gift because of the 1971 Alaska Native Claims Settlement Act, and that every business they had ever owned lost money, such as Alaska Sand and Gravel and the Tug & Barge Company. One business went bankrupt, United Bank Alaska. Kake Tribal sued Sealaska and settled out of court for an undisclosed amount of money.

Larry Carroll, then senior securities officer, asked the most crucial question of all: Had Sealaska ever been profitable without the sale of their net operating losses in 1986-89? The answer was, "no." He had also asked why they were showing the NOL's as a profit? Since the NOL's were a congressional bailout to failing Native corporations, which inserted about $200 million into Sealaska. Their answer was that they considered their losses to be profits. Without the money from NOL, Sealaska would be broke.

I am giving a history because of what Sealaska said, "We have enjoyed 17 years of profitability. However, we have had recent significant losses because of the acquisition of Tri-Quest Plastics of Tualatin, Puget Plastics of Vancouver, Wash., and the mining operation on the Prince of Wales Island."

If it was established in 1991, during the recall, that Sealaska had never been a profitable company, then how do they now claim, "17 years of profitability?"

We are asking the board to make public the amount of those recent losses. It is rumored that this amount is in the millions, if not hundreds of millions of dollars. Also, please tell us how much you paid out in bonuses to management. They have a fiduciary responsibility to shareholders. If not, we can call another special meeting to remove the board and get the 1,572 signatures right here in Juneau. Then they will have to open the books of Sealaska to its shareholders. We should be able to confiscate their homes, bank accounts, property, etc... to recover some of the loses. But, historically, we have had no legal recourse to recoup the hundreds of millions of dollars lost by Sealaska.

That is one of the greatest reasons that, after 30 years, shareholders want to vote to liquidate Sealaska, put all the land in a settlement trusts, and elect a Board of Trustees to oversee our lands. Why not? The only Native Alaskans getting rich are board members and their hired staff. Sealaska does not benefit shareholders. How can an average of $28 a month over a period of 30 years benefit shareholders? Yet, the board sets its own pay and benefits which are quite a bit above $28. They pay themselves lavishly. The most disturbing fact is that they have no vision.

All ANSCA created was an elite, wealthy group of Natives who are on the Board of Directors, and their hired management, while the vast majority of Natives live below the poverty line. This should not be so.

Finally, we also want to know if Sealaska still owns their building.

Ike Cropley, a member of Shareholders For Shareholders, is a resident of Juneau.

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