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The Daily Need

Fallout continues for Alaska native corporations

Photo: Nikki Kahn, Washington Post

This week, the federal government suspended two more companies as part of an ongoing investigation into alleged abuses of a federal contracting program. According to Robert O’Harrow Jr.’s story in the Washington Post today, “The action is part of an expanding investigation by the Small Business Administration into allegations that small companies are being used by large companies to obtain small-business set-aside contracts.”

These suspensions are just the latest enforcement action to follow in the wake of O’Harrow’s reporting about what are known as Alaska native corporations, or ANCs. Last month, Need to Know profiled Robert O’Harrow and his nine-month investigation into the workings of ANCs.

A bit of background: Alaska native corporations were created by Congress 40 years ago to help native Alaskan tribes rise above the poverty they’d suffered for decades. Thanks to some remarkable privileges granted to ANCs in the 1980s and 1990s, these companies have received $29 billion dollars in federal government contracts over the last decade.

Supporters of the ANC program argue that these companies provide a wealth of benefits to their native communities, but O’Harrow’s reporting raised serious questions about whether native Alaskans are, in fact, getting a fair deal. His series also featured allegations that non-native Alaskan companies had inappropriately piggybacked on ANCs to gain access to those lucrative federal contracts.

The day after O’Harrow’s series ran in the Washington Post, the Small Business Administration suspended one of the nation’s biggest federal contractors, a company called GTSI. The agency alleged that GTSI had improperly used other firms to land contracts, though it didn’t mention those other firms by name.

Today’s suspension involved two companies – EG Solutions and MultimaxArray – both of whom had formed partnerships with GTSI. EG Solutions is a subsidiary of an ANC called The Eyak Corporation, which was one of the ANCs covered extensively in O’Harrow’s series.

In another development this week, Sen. Claire McCaskill (D-Mo.) followed through on her promise to draft a bill that would strip Alaska native corporations of their unique contracting privileges. On Wednesday, she introduced legislation which would do just that. In a statement, McCaskill said: “We’ve seen that a very small portion of these companies’ profits are reaching native Alaskans, so it’s time to acknowledge the fact that this program is not effective for either native Alaskans or taxpayers.”

Both of Alaska’s senators – Democrat Mark Begich and recently re-elected Republican Lisa Murkowski are strongly opposed to McCaskill’s reforms.

“The participation by Alaska Native corporations in the … program creates hundreds of jobs for Alaskans and provides benefits to some of the most remote, high-cost communities in America,” said Senator Begich.


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  • Akech

    This is the oldest swindling trick in the “exploitation” play in the books, a game effectively played by IMF and World Bank Group that claim to loan developmental funds to third world countries!
    Once the funds are allocated, the IMF and World Bank send their own small contracting companies accompanied by their own experts who claim to have knowledge of administering developmental programs on behalf of these poor countries! The contracting companies and their so called experts extract huge fees from these developmental projects such that the countries for which these funds are alleged to serve do not get anything other than being left with huge debts and no developments! In other words, IMF and World Bank give the funds with the right hands and extract back these funds with the left hands after performing shoddy work using their highly paid experts!

    The people supporting these kinds of behavior do not give a damn to the employment of Native Americans or development in third world countries. The have, however, constructed tentacles to suck the life out of the local tribes! They are not interested in building roads, hospitals or any form of healthcare leave alone creating jobs!!