Alaska: Poster state for crony capitalism

Crony capitalism thrives in Alaska, center stage held by the Alaska Native Corporations (ANC).

From the pending shakedown of taxpayers through a wholesale land grab (S.730 and H.R.1408) to recent arrests of four people in one of the “most brazen federal contracting scandals in our nation’s history,” there seems to be no end to the scams, a consequence of an ANC system run amok.

It’s not enough that over $29 billion of taxpayer money has been transferred to the ANCs under the 8(a) minority no-bid federal contracting scheme. The state’s seemingly permanent political class has recently orchestrated sister bills in each chamber of Congress (S.730 and H.R.1408) to extend the literal reach of a single, billion-dollar ANC – Sealaska. Anyone concerned with the rampant growth of corporate giveaways in D.C. should be outraged over this land-grab legislation.

Lisa Murkowski, beneficiary of millions from ANCs for her write-in campaign last fall, sponsored S.730 that was introduced barely four months after her improbable write-in victory was finalized. This bill has just one co-sponsor (besides Alaska’s junior senator), and the House version, voted out of committee in July, has just five voting co-sponsors.

Sealaska is one of 13 ANCs that were set up under the 1971 land claims settlement, originally conceived with a unique and noble idea: profit-making enterprises to create economic independence for the native populations. However, they have failed miserably to improve the lives of the vast majority of natives, while at the same time enriching the executives who then brazenly support the politicians who grease this cozy arrangement. It seems anyone who speaks out against the corruption is promptly silenced, whether it is a concerned native or a politician.

Most Americans should have major problems with these bills. For starters, the interests of a large cross section of the public are being subjugated to the interests of a single corporation. Small-business owners and other Alaskans engaged in tourism, hunting and fishing are directly and negatively impacted. Many of Sealaska’s proposed parcels of land will interfere with the historic commercial and recreational activities in the area and stunt private-sector economic activity and growth.

If Sealaska’s directors were choosing lands within the sections they told Congress they wanted in 1975, that would be one thing. That’s what everyone expected and relied on. However, in this unprecedented congressional move shepherded in large part by Sen. Murkowski, Sealaska is cherry-picking a patchwork quilt of parcels that lie, in some cases, well over 100 miles outside of Sealaska’s original boundaries. The bill even acknowledges that the land is “outside the areas for selection by ANCSA” (in typical legislative jargon).

Many small-business owners relied on the notion that a deal is a deal when they invested in recreational and business opportunities in Southeast Alaska. They were flabbergasted when their own congressional delegation chose to renege on the 1975 deal and put Sealaska in their front yard. Should this bill become law, hunters, fishermen and tourism operators will be locked out of prime areas they rely on for their business.

The proposed land-grab areas also contain high concentrations of some of the largest red cedar and spruce in the Tongass National Forest. Well over a dozen people, hand-to-hand, would not even encircle the enormous girth of these giants, some of which were alive during the Roman Empire. Obviously, this timber has exceptional profit potential, especially if it’s given away.

Moreover, the proposed giveaway includes tens of millions of dollars for hundreds of miles of public roads, bridges and other infrastructure. Not only does Sealaska want title to the land outside its original selection, it also feels entitled to the taxpayer-funded improvements to boot.

During the 2010 senate election in Alaska, I took positions that the ANCs perceived as threatening to their independence from shareholder oversight, sweetheart (unique federal 8a) contracts and special-interest legislation pending before Congress. The gravy train is poised to continue with this Sealaska bill, unless concerned parties intervene.

Last fall, Murkowski’s write-in advocates organized a “super PAC” (Alaskans Standing Together) and successfully raised in excess of $1.25 million dollars from contributions from the native corporations, convinced the corporations to expend millions for in-kind contributions for the write-in effort, mailed thousands of newsletters calling the vote a referendum on native civil rights and sent scores of workers to native villages to recruit write-in votes. Vote totals and now a land grab seem to go hand and hand.

I wrote about this unnamed crony capitalism during my Senate campaign last fall. Murkowski herself said that it wasn’t enough for those ANC “CEOs to stand up and give me your support. I would need to know that it goes out into every village.” And now the “return favor” is pending in both the Senate and the House.

The aggressive intervention of Sealaska in last year’s election no longer seems bizarre once the crony- capitalism connections come into focus. And if the Sealaska land-grab bill passes, the quid pro quo will be complete.