Anchorage Daily News

Debbie Kellogg wondered last month whether the Native-owned corporation she's belonged to for more than 30 years had disappeared into a black hole.

A bad sign: Its phone lines were disconnected.

Public records indicated the company had gone "inactive."

And the company's ties to the state's main Native organization -- the Alaska Federation of Natives -- had become fractured after its failure to pay dues.

In recent months, the leaders of The 13th Regional Corp. have been mostly silent -- not making a required annual financial report to their 5,500 shareholders in Alaska and Outside, and not returning calls from some of Alaska's top Native leaders.

In recent interviews, two of The 13th's directors confirmed that the company is enduring difficult times.

"We're not going to give up," said Mike Rawley, The 13th's board chairman, said late Friday.

Shareholders and former executives of the 13th say they are anxious about what's happening to their company.

A June financial statement recently provided to one shareholder, upon his request, showed the company to be struggling with debt, generating little revenue and piling up losses.

"I can't get any information," said Liz Ross, a former 13th president who lives in Florida but whose family comes from the Bering Straits region.

"I'm not a spy, I'm a shareholder, for crying out loud," she said.

'LOST' SHAREHOLDERS

Kellogg finally got fed up with the silence.

In late October, she got in her car and drove about 50 miles to the 13th's headquarters, in a Seattle area office park near the interstate, a stone's throw from the banks of the sinuous Green River.

She wasn't surprised to find the office lights out and the doors locked.

She knocked anyway. A light flipped on. A board director, George Samuels, appeared at the door.

Kellogg said she talked to Samuels, who is in his late 70s, for a little while.

What happened to the company's money, she asked.

Lawsuits, he said, according to Kellogg.

Kellogg drove home thinking the corporation was in "pretty dire straits."

Samuels declined to talk for this story.

When Kellogg talks about the 13th, she is disgusted and angry. She isn't sure if it's worth trying to keep the company alive.

"It was destined to fail," she said.

LOST NATIVES

The 13th Regional Corp. is an oddity among the Alaska Native corporations that Congress set up in the 1970s to settle Native claims to most of the land in Alaska.

Unlike the 12 other regional corporations, the 13th is based outside Alaska, owns no land in the state and doesn't share in the resource profits of the other companies. It wasn't even formed directly by Congress like the others -- Natives had to vote to create it.

The so-called "lost" Natives who had moved Outside before the land-claims negotiations pressed Congress to allow the formation of the 13th. The matter went to a vote but was eventually settled in court.

The 13th did get money -- about $54 million of the total $962.5 million distributed to Native corporations after passage of the Alaska Native Claims Settlement Act in 1971.

But the federal law did not endow it or other Native corporations with experienced business leaders. Many of the companies struggled for years. Two of the Alaska-based regional corporations spent time in U.S. Bankruptcy Court before rebounding.

The 13th had its own stint in bankruptcy in the mid-1980s and appears to have struggled the most.

In a brief phone conversation more than a year ago, Rawley, the board chairman, complained about his company's isolation from other Native corporations that have become successful.

"We're not part of the Anchorage coffee clique," Rawley said.

In the company's early years, "We blew through millions and millions of dollars," said Carl Hart, a shareholder whose Aleut mother enrolled him in the 13th when he was a child. It took stabs at a variety of businesses, including fish processing and real estate.

Later on, the company tried federal contracting and owned a Mailboxes Etc. franchise, but in the last four years, it has struggled with debt as cash flow dwindled. It settled a lawsuit with a former business partner for $550,000 and had to pay the IRS another half-million dollars in delinquent taxes.

Compared to some other Native corporations, the 13th has paid little cash to its shareholders -- less than $70 total to a typical shareholder over the last 33 years, Hart said.

Also, in the past few years, the 13th has churned through several executives, some leaving after just a year or two.

The company's most recent annual report detailed its financial performance in 2006. The report showed the 13th lost $2.5 million that year, its fifth year of losses in the previous seven. The report said the company had $6 million in assets.

In comparison, a recent financial statement -- posted on Hart's shareholder Web site -- showed the company's assets had decreased to $1.8 million in June.

LEGAL RISK?

The 13th's failure to file a 2007 financial report prompted the state of Washington -- where the company is based -- to revoke its authority to do business. The company's deadline to file the report was in February, said Pam Floyd, corporations director for Washington state.

The 13th's "inactive status" is not a death knell. Its ability to do business could be restored in the future, Floyd said.

But for now, the revoked status poses a big legal risk for the 13th, said a law school dean who practiced corporate law in Washington for several decades.

"If it got sued, it couldn't defend itself. ... It puts their assets at risk," said Eric Chiappinelli, the dean of the Creighton University School of Law in Nebraska.

The company has not announced whether it plans to seek reauthorization.

Hart, a long-time 13th activist, said the company has been shirking its responsibility to shareholders -- a problem he thinks results from lax government oversight and a shareholder base that is scattered around the country.

UNCERTAIN FUTURE?

Former 13th president Norman Ream, who ran the company during a profitable period from 1994 to 2003, said he thinks the company's leaders are facing tough times.

"I wish they would put something out to let people know what is going on, for the love of Pete," he said.

Ream, in his 80s, said he doesn't keep track of the company's financial status anymore but he has been trying to help the 13th obtain land in Alaska through Congress.

For that reason, Ream loaned the 13th $100,000 recently, he said.

Ream said gaining land in Alaska might help save the corporation. "If they can get (it), I think they can turn it around," he said.

The other Native corporations previously opposed the 13th's bid for land. Now most of them support it. Legislation introduced in Congress by Reps. Don Young of Alaska and Norm Dicks of Washington would let the 13th select more than 1 million acres around Alaska that the state and other corporations haven't already claimed.

That bill was the product of years of discussion with Alaska Native leaders, Nelson Angapak, vice president of the Alaska Federation of Natives, said two years ago, following the bill's first introduction.

Angapak said giving land to the 13th would benefit other Alaskans because it puts additional federal land into private ownership. The bill also could provide some development opportunities for the 13th, though the company wouldn't be allowed to obtain logging land in national forests or oil and gas prospects in the National Petroleum Reserve-Alaska.

Despite gaining support from other Native corporations for the lands bill, and despite spending at least $860,000 to lobby Congress on the matter since 2000, the 13th's prospects are murky.

The U.S. Department of the Interior opposed the bill, which has not moved anywhere in Congress since 2006.

Ream is hopeful.

"If the 13th will just hang on," he said.

"I'd hate to see them go out of business completely when we are on the verge of getting the land."

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Find Elizabeth Bluemink online at adn.com/contact/ebluemink or call 257-4317.

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The 13th Regional Corp. shareholder site:

www.the13thregion.com/

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Facts about The 13th Regional Corp.

A little background:

HEADQUARTERS: Tukwila, Wash.

SHAREHOLDERS: 5,500

FOUNDED: 1975

INITIAL FUNDS: $54 million out of the total $962.5 million paid to Alaska Natives by the state and federal government to settle land claims.

LAND ENTITLEMENT: None

SHAREHOLDER DIVIDEND SINCE INCEPTION: Less than $70 for a typical shareholder

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