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I told a Juneau Empire reporter while talking about Kake Tribal Corp. and Pelican that there were several factors that led to Kake Tribal's financial crisis. Many were not mentioned in the stories in Sunday's edition.
First, anytime you lose a leader, it causes a lot of uncertainty and crisis. We lost Sam Jackson to cancer in May of this year. He was our president and chief executive officer the past five years but was very ill since late 2003. His death at 41 years was a shock to all of us. You need only to look at Martha Stewart Enterprises to see what a loss of leadership can do. To leave out this fact from a story about Kake Tribal Corp. is unfortunate. We still mourn his death at such a young age and loss of his leadership.
Second, we spent over $15 million in legal fees and settlements in the shareholder lawsuits known as the Hansen and Tagaban cases. The case dealt with inequities in shares for eligibility in our shareholder security plan. Similar litigation was brought by attorneys against other Native corporations in the mid-1990s sapping them of several million in legal fees.
Third, dividends were one of the factors but not the only factor in our financial crisis. Large dividends at that time were the norm for most Native corporations. It would have been a better story if the reporter put together another graph showing our loss of $15 million through legal fees and included other Native corporations in Southeast. They lost many millions defending themselves for programs that targeted our elders and youth.
Fourth, there was a huge downturn in the logging and fishing industry in the 1990s. More than 90 percent of KTC's investments were in those industries. Most of the Southeast Native corporations are experiencing the same "life without" logging crisis even today.
House Resoluation 2000 was introduced in the U.S. Congress in the late 1990s to address the aggressive litigation Kake Tribal experienced relating to alleged "inequity" of shares. Budding litigation addressed "inequities" with programs relating to scholarships, elderly, shareholder hire, and even investments. We supported and testified in favor of passage so other Native corporations will not be drained of money on this issue. It passed and effectively "inoculated" all of the other Native corporations from this sort of litigation. Because of the bill, Native scholarships and programs for our elderly will have little fear it may be litigated. The only Native corporation not "inoculated" was Kake Tribal Corp. If there was a positive element to this litigation, it is our relief other Native corporations will not be subject to this sort of litigation. We still get letters of "thank you" for our efforts to solve this and being the "poster child example" for its passage.
The story spent a lot of time blaming our financial woes on the large dividends in the mid-1990s. KTC was healthy at the time with good investments and lots of cash. We preferred establishing a settlement trust for the future but shareholders optioned for investing the money themselves, much like Alaska residents prefer with some portion of the Alaska Permanent fund. But the policy relating to our trust did not pass. If it did we would be getting dividends from the State and KTC's settlement trust. And anytime we tried to touch it, we would hear screams from our shareholders not to touch it-much like we hear from state residents, "Don't touch our permanent fund" when there are proposals to use some portion of it on government or other things. I still wish every day we passed this policy but the shareholders spoke and we implemented their desire.
A second bankruptcy is not an option with the current board of directors. But, if the final land exchange appropriations from the U.S. Congress is not achieved this year, then it might become an option. We have every reason to be optimistic at this time.
Our CEO Sam Jackson made a trip to Washington, D.C., a few days before he died of cancer. His message was, "We need the final $4 million to settle our land exchange," which was the basis for settling all of our debt to our creditors several years ago. He secured the commitment from our congressional delegation as a last wish. Sam's goal was a profitable corporation so his children and grandchildren can achieve the goals of Alaska Native Claims Settlement Act. His vision is our vision and we are doing our best to achieve them for Sam and our shareholders.
I appreciate the Empire's attempt at a fair and balance story. It is complex. But I believe my information will fill in some holes and will be easier to understand by your readers.
Gordon Jackson is chairman of the board for Kake Tribal Corp.