Eyak Corporation Comments on Recent Media Report

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Oct 04, 2010, 07:00 ET

ANCHORAGE, Alaska, Oct. 4 /PRNewswire/ -- The Eyak Corporation ("Company"), an Alaska Native Corporation, today responded to the recent articles published by The Washington Post concerning Alaska Native Corporations ("ANCs") and about The Eyak Corporation in particular. The Eyak Corporation was formed in 1973 as a for-profit corporation under Alaska law pursuant to the Alaska Native Claims Settlement Act ("ANCSA") enacted by Congress on December 18, 1971.

Rod Worl, Chief Executive Officer of The Eyak Corporation, an Alaska Native, commented, "We embrace a solemn responsibility to protect the interests of our shareholders. As Congress intended, we have utilized the structure of ANCSA to participate in the modern Federal marketplace to create a corporate entity that has prospered and which is now in a position to create value for the many generations of our Alaska Native shareholders. We are proud to have observed both the letter and the spirit of the legal requirements of all of the government programs, specific contracts, and relevant legislation pertaining to our business."

The Company noted that The Eyak Corporation is fully owned and controlled by Alaska Natives. In addition to Mr. Rod Worl, the Company's Chief Executive Officer, the entire board of directors of The Eyak Corporation is comprised of Alaska Native shareholders. Their mandate is to build a substantial business which can offer a degree of near-term financial support as well as long-term value for each of its 428 shareholders and their descendants.

The Company's first significant distribution of benefits to its shareholders followed the oil spill from the Exxon Valdez tanker in 1989. This event devastated the livelihood of many of the Company's Alaska Native shareholders, most of who depended on the commercial or subsistence fishery in Prince William Sound. Following that disaster, The Eyak Corporation decided to sell almost 76,000 acres of its ancestral land, about a half of what it had been granted under ANCSA, back to the federal government and the State of Alaska. Each Alaska Native with 100 shares of The Eyak Corporation received approximately $77,000 in cash out of the proceeds of the land sale, for a total distribution of approximately $25 million.

Following that distribution, a dispute arose with the Internal Revenue Service and an unforeseen $16 million tax liability was levied against The Eyak Corporation in connection with the land sale transaction. This action threatened to bankrupt the Company and thus permanently end its ability to benefit the Eyak Alaska Native shareholders. Several years prior the Company had formed Eyak Technology, LLC ("EyakTek"), also the target of criticism in the Washington Post article, to further diversify the Company's business operations. The Company noted that the CEO of EyakTek is also an Alaska Native.

Mr. Worl commented, "Our subsidiary, EyakTek, is an excellent example of the successful execution of what Congress envisioned when it passed ANCSA. Its creation has enabled us to benefit the Eyak and other Alaska Native people of Cordova, Alaska. EyakTek has garnered numerous awards for excellence in federal contracting and for high levels of service to our customers while utilizing the advantages provided by and following all the guidelines of ANCSA and the Small Business Administration's mentor-protege program. The company's many employees, both Native and non-native, are working for the benefit of the Alaska Native shareholders and are building an outstanding, highly regarded and enduring business."

The Company takes seriously its mandate to return benefits to its shareholders. The Company's initial investment in EyakTek, formed in 2002, has returned over $29 million in benefits to The Eyak Corporation's Alaska Native shareholders. It has enabled the Company to completely retire the IRS levy, payment of which was finally completed in 2009. In total, The Eyak Corporation and its Alaska Native Settlement Trust have paid $35 million in dividends to its Alaska Native shareholders since inception. This is equal to more than $108,000 per shareholder (holding 100 shares).

As noted in an August 3rd press release from The Eyak Corporation, the Eyak companies combined contributions to The Eyak Foundation, a 501(c)(3) non-profit corporation created by The Eyak Corporation for the educational and cultural benefit of its shareholders and their descendants, have enabled the foundation to provide scholarship support to 126 Alaska Natives seeking higher education and technical training. In 2010 100% of applicants received benefits from the foundation.

The Company has also provided land to its Alaska Native shareholders. Each original shareholder has received two acres of property from the Company land holdings and 50 of its shareholders have taken advantage of a very low cost 99-year leasing program to obtain an additional 1.5 acres of land.

Mr. Worl continued, "We regard the recent articles in the Washington Post as highly selective, misleading, and inaccurate and believe that they constitute baseless negative accusations regarding our business practices and the virtues of ANCSA itself. Congress saw fit, nearly four decades ago, to establish a permanent set of corporate and legal structures to help people who it recognized had been unfairly and severely disadvantaged, primarily by the acquisition of ancestral Alaska Native lands by the US Federal Government. It is highly discouraging and deeply troubling to see our successful and compliant efforts to provide a better future for our shareholders under these long-standing and carefully considered structures unfairly attacked."

Mr. Worl concluded, "We will continue to operate our business with a high level of ethics and a clear sense of responsibility to serve the needs of our customers, our partners and our shareholders."

About Eyak Corporation

The Eyak Corporation was formed in 1973 as a for-profit corporation under Alaska law pursuant to the Alaska Native Claims Settlement Act "(ANCSA") enacted by Congress on December 18, 1971.

ANCSA authorized the formation of twelve regional corporations in the State of Alaska as well as a number of village corporations within each region. Eyak is the village corporation for the Cordova area and is one of five village corporations located within the Chugach region.

The original act did not include reference for the Native village in the Cordova area. Cecil Barnes was the Native leader who pushed the petition and enrollment drive that resulted in the formation of The Eyak Corporation. Eyak was incorporated in 1973 representing 326 original shareholders, the majority of which were of Aleut descent. The Eyak Corporation was so named at the suggestion of Cecil Barnes to honor the area's Eyak Natives who had as a group been decimated by disease and poverty as a result of the development of Cordova.

For more information about the Eyak companies, please visit our websites at eyakcorporation.com, eyakfoundation.org, and eyaktek.com.