Ailing 13th Regional Corp. shrouded in mystery

Unable to learn the whereabouts of corporation records, gain access to financial statements or get face and phone time with corporation board members, fed up shareholders in Alaska's 13th Regional Corp. are searching for ways to force action and get answers.

The corporation's disarray and disconnectedness to its shareholders is bad enough that a former board president, Liz Ross, has gathered paperwork to file a grievance against the corporation in federal court.

"You file and force them to come into compliance," Ross explained, adding that the corporation, against its own rules, hasn't held a required annual meeting in three years.

Unlike the 12 other regional corporations established under the Alaska Native Claims Settlement Act, the 13th Regional Corporation was not given any land, and only received a $54 million cash payment from Congress. The 4,500-plus original shareholders, comprised of Alaska Natives who no longer resided in Alaska, each received 100 shares of stock. Today the corporation has 5,500 shareholders. There have only been a few small dividend payments over the years, and over its lifetime the corporation has suffered from poor investments, near bankruptcy, questionable deals, lawsuits and sporadic oversight.

In a December 2008 letter to shareholders, posted on the 13th Regional Corporation's now defunct Web site, board members pointed to three "lightning strikes" that "undermined" the corporation's ability to recover: litigation; maxed credit lines and an inability to keep a subsidiary for-profit construction operation afloat; and a failed land deal investment in Spokane. Despite the grim outlook, the board stated it believed "there can be a very viable future of no small significance for the 13th and its shareholders that is worth pursuing."

One year later, there are no tangible signs of improvement.

The corporation's business offices in Washington are closed, the phones are dead, the Web site is disabled, and e-mail addresses for board members at the corporation bounce back undeliverable.

Alert shareholders are appalled.

"It's complete irresponsibility and complete lack of knowledge," Ross said.

She's tried for months to learn where the corporation's decades' worth of physical records, including shareholder data, are now stored. And she and others have tried for years to gain access to quarterly financial reports and schedule annual audits and shareholder meetings.

Two board members declined to comment, referring all questions to the corporation's president, Mike Rawley. Reached by telephone in Washington, Rawley declined to speak substantively about the state of the corporation's affairs, instead directing us to read the Alaska Native Claims Settlement Act. When we clarified that we wanted to know the corporation's current status as a functioning entity, he said the corporation is still in existence, and added that he wasn't going to engage in any kind of written discourse with the press. When we clarified even further that we wanted to know the corporation's financial health, future plans and whether it was in the process of collapsing, he replied, "that's for our shareholders to know."

When asked if shareholders have access to that information, he said "the ones that contact us individually do."

At least one shareholder begged to differ, however.

"He is just outright lying," Ross said. "Mike has not shared one bit of information."

In recent months, Ross has sent e-mails to the board asking for information and requesting meetings. She arranged and paid for a conference call so all board members, located in multiple states, could attend, but ended up sitting on the phone alone for 30 minutes when no one called in. She has placed other phone calls, and tried unsuccessfully to meet with individual board members during the Alaska Federation of Natives conference in Anchorage in October. She has sent a letter requesting the corporation's financial statements, but has had no response. She's also offered to help facilitate an audit utilizing graduate students in accounting to help save on the cost, but never received an indication of interest.

"I just think it's pretty disgusting what the current board is doing in not issuing a statement and not providing communication," she said -- and she's not alone.