Markey Seeking to Fix a Problem that Does Not Exist
Jan. 9, 2013
/PRNewswire-USNewswire/ -- The Native American Contractors Association, whose members include many of the twelve (12) Alaska Native Regional Corporations ("Regional Corporations") created under the Alaska Native Claims Settlement Act ("ANCSA"), responds to the Government Accountability Office's (GAO)
Regional Alaska Native Corporations, Status 40 Years After Establishment and Future Considerations
report ("Report") and Rep.
(D-MA 12) for his proposal to "fix" a problem that does not exist.
The Report, requested by Rep. Markey, examines the structure, history, and finances of the regional Alaska Native Corporations ("ANCs"). The Report for the most part does an excellent job of outlining the history and structure of ANCs, while discussing the myriad of ways the corporations provide for Alaska Natives--their shareholders—which are unique to ANCs.
However, NACA is disappointed with the focus the Report places on financial reporting, which we believe is misguided. 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 (ANCSA). NACA's Executive Director,
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.
Despite the strong accounting principles utilized by ANCs, 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
. Federal securities laws were never designed to apply to closely held corporations, much less Alaska Native Regional Corporations.
While the Report focuses greatly on financial reporting, it did not include any findings, nor provide any recommendations for Congress to enact. Unfortunately, Rep. Markey announced plans to introduce legislation to "fix" a problem that does not exist. Mr. Allis cautioned, "the Report did not find any fraud or suspicion of fraud with how the Regional Corporations manage their operations, and how they generate shareholder value. I do not understand what purpose such legislation would serve."