"To many small business owners, the preferences granted Alaska native corporations in federal contracting might appear unwarranted. But, in rural Alaska, where a gallon of milk can exceed $10 and gasoline prices are the highest in the nation, the advantages are viewed not as a government handout but as an opportunity for a better way of life.

"Western Alaska is an economically depressed area, but because of the [contracting] program they have been able to train and employ people from the villages and the profits go to native shareholders," said Democratic Sen. Mark Begich, Alaska's junior senator.

Alaska natives are among the poorest citizens in the United States, with a poverty rate of more than 20 percent, according to the 2000 census. That figure far exceeds the national average and is higher than the rate for any other racial or ethnic group, with the exception of American Indians.

"The rationale is that these are organizations [that] have an obligation to entire communities and they provide a benefit [for] the whole community," said Karen Atkinson, executive director of the Native American Contractor Association, a Washington trade group.

Advocates point out that the 13 regional and more than 200 village corporations created by the 1971 Alaska Native Claims Settlement Act do not operate like typical small businesses, in which all the revenue goes to the company's owners. Native corporations disperse a significant portion of their profits in the form of dividends to local shareholders, and invest in the larger community through economic, social and cultural programs."

Get the Story:
Alaska native corporations defend their programs (Government Executive March 2009)

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