Alaska News

On heels of EyakTek scandal, renewed 8(a) scrutiny

Rep. Ed Markey, a Democrat from Massachusetts, says he's calling for a Congressional hearing on the "kickback scandal" involving the U.S. Army Corps and an Alaska Native corporation.

The U.S. Attorney's Office in Washington, D.C. released information yesterday about the alleged scheme, noting that four people had attempted to defraud the federal government of $20 million. Criminal charges were brought against two Army Corps contracting officers and Harold Babb, an executive from EyakTek. The company is a subsidiary of an Alaska Native village corporation representing Cordova.

Rod Worl, chief executive of parent company Eyak, said in a written statement Tuesday that Babb was "immediately terminated."

Markey made the request in a letter to Rep. Doc Hastings, chair of the Natural Resources Committee and a Republican from Washington state. The letter immediately raises issues about the controversial 8(a) program that offers Native corporations an edge when they bid for federal contracts. Markey wonders whether the program includes enough oversight to protect U.S. taxpayers and Alaska Natives who are shareholders in the companies.

"The exposure of a massive bribery and kickback scam involving Eyak Technology (EyakTek), an Alaska Native Corporation (ANC) subsidiary that served as prime contractor for the U.S. Army Corps of Engineers, raises questions about whether there are adequate controls in place to prevent fraud and abuse at ANCs and protect U.S. taxpayers and Alaska Native shareholders," Markey wrote in the letter dated this morning.

The letter names only Babb, and focuses on EyakTek. It doesn't mention the others who are charged: Army Corps contracting officers Michael A. Alexander and Kerry F. Khan, as well as Khan's son, Lee A. Khan.

"I am concerned that EyakTek's status as an ANC may have facilitated this scam," Markey writes.

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"An investigative hearing on this matter would give the committee an opportunity to investigate whether these requirements were observed at EyakTek, what internal controls the corporation has in place to protect against bribery or other malfeasance by company employees, and whether additional protections are needed," Markey wrote.

Read the full letter here. Here's the press release from Markey's office:

Contact Alex DeMarban at alex(at)alaskadispatch.com

Alex DeMarban

Alex DeMarban is a longtime Alaska journalist who covers business, the oil and gas industries and general assignments. Reach him at 907-257-4317 or alex@adn.com.

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