Afognak Native Corp. and its family of companies is a burgeoning enterprise generating millions of dollars under a nationwide umbrella of companies, resulting in large payouts to shareholders and benefits that are having a widening social and cultural impact in Alaska and Kodiak.

Latest financial data shows Afognak with a consolidated revenue of $537.9 million, a net income of $18.8 million and individual dividends of $21,688 paid to approximately 700 shareholders per year, totaling $11.1 million.

That compares to $521.9 million in 2005, a net income of $15.9 million, and average dividends of $17,000.

Afognak is one of 13 Native regional corporations and three village corporations formed under the 1971 Alaska Native Claims Settlement Act in which Congress transferred about 45 million acres of federal land and $962 million in a settlement of long-standing aboriginal claims on Alaska lands.

ANCSA was created as a better way for Congress to meet its trust responsibility to Natives than what many viewed as a failed Lower 48 reservation system that had been barely functioning for decades.

One of the keys to success of the Native corporations has been a profitable system initiated by U.S. Sen. Ted Stevens that allows them to get no-bid contracts, known as the 8(a) program, of unlimited size based on legislation that gives them the status of small and disadvantaged firms.

In 2005, Alaska Native corporations came under heavy scrutiny for the special consideration they get in federal contracting and were being investigated by the congressional oversight arm, the Government Accountability Office. Findings cleared the corporations of any mismanagement.

“None of the findings were specific to Alaska,” Sarah Lukin, director of external operations for Afognak Native Corp. and Alutiiq, LLC, said Monday, although GAO investigators had flown to Anchorage to collect data and interview Native corporation executives.

Singled out was a need for the Small Business Administration to have more funding and increased staffing to help handle the contracts.

The Native American Contractors Association, a powerful group formed to protect Native contractors and lobby members of Congress, supported the need for increased oversight.

“The program has worked and the intent of Congress is successful,” Lukin said.

Lukin was responding to questions on a recent report delivered to the Anchorage Chamber of Commerce in November, showing major gains in revenues and profits. The report was compiled by the ANCSA Regional Corporation Presidents and CEOs, an association of chief executives of the Native regional corporations.

Delivered by Sheri Buretta, president of the ANCSA Regional Corporation Presidents and CEOs group, the report showed revenues for the group of 16 corporations totaled $5.85 billion in 2005, a 38.5 percent increase of over $4.22 billion in revenues earned by the same corporations in 2004. Net income totaled $361 million in 2005, up from $125 million in 2004.

Dividends paid out in 2005 were $88.7 million, down from $113.7 million in 2004, due to reinvestment of earnings.

The corporations also employed 13,604 Alaskans in 2005, mostly in business operations of subsidiaries, including 3,380 Alaska Native workers.

Dean Clowers, Afognak’s senior vice president of operations, said the 8(a) program has allowed Afognak to diversify so that it is now expanding into more contracts in the private enterprise sector rather than just federal contracts alone.

“In 2007, we started a private and commercial initiative,” Clower said.

“We are taking what we have learned from the federal market to provide more development in the private markets,” Lukin said. “One of the goals of the 8(a) program was to eventually expand in the private areas.”

Afognak headquarters employs approximately 300 workers with $19.5 million in revenues in Alaska. It employs 4,200 workers nationwide.

Lukin said the Afognak workforce is changing, employing more people in professional and higher-level jobs as the company expands. The higher-level positions, which pay more but involve fewer workers, are reflected in 2005 figures showing 360 Alaska employees, compared to about 300 in 2006.

The Alutiiq, LLC, family of companies includes such areas of business as security and law enforcement, operations and maintenance services, logistics support services, information and technology and technical support services, engineering and information solutions, construction and youth training services.

Individual businesses include Alutiiq Management Services, Alutiiq Security & Technology, Alutiiq Global Solutions, Alutiiq Manufacturing Contractors, Alutiiq International Solutions, Alutiiq-Mele and Alutiiq Professional services.

Afognak awarded $115,000 to 45 recipients of scholarships in 2005 for college and vocational training.

“We are growing a younger generation of leaders,” Lukin said.

Each year, Afognak provides donations to organizations promoting Alutiiq culture, traditional language revitalization and community unity. Donations in 2005 include $55,000 to the Alutiiq Museum and Archaeological Repository for its language program; $37,000 for Dig Afognak Cultural Camps; and $15,000 for the Native Heritage Center.

Afognak also has a shareholders permanent investment fund, similar to the Alaska Permanent Fund concept, with $1.2 million invested in 2005, bringing the total value of that fund to $68 million. The same fund in 2006 was valued at $78 million.

In 2006, 47 scholarships were awarded for a total of $117,500, and $1 million funded construction of a 1,200-square-foot museum, added to Afognak’s Anchorage office.

In addition, Afognak provides qualified shareholders, their descendents, Alaska Natives and American Indians, positions within the family of companies including internship opportunities.

Mirror writer Bryan Martin can be reached via e-mail at bmartin@kodiakdailymirror.com.