Alaska Sen. Begich warns against 'showboat' politics in Native contract hearing

The Anchorage Daily NewsOctober 6, 2011 

Massachusetts Rep. Ed Markey on Wednesday called for hearing to investigate Alaska Native corporation federal contracting in the wake of a massive bribery and kickback scandal involving an executive at a subsidiary of the Eyak Corporation.

Members of Alaska's congressional delegation questioned the move, with the spokeswoman for Alaska Democratic Sen. Mark Begich suggesting it could be a "showboat political hearing."

Markey, the Democratic ranking member on the U.S. House Committee on Natural Resources, wrote the committee chairman, Washington Republican Rep. Doc Hastings and asked for an immediate hearing on the matter.

The $20 million scheme allegedly involved corrupt Army Corps of Engineers officers working with an executive at EyakTek to inflate invoices and pocket kickbacks as part of EyakTek's federal contract. Four people, including the EyakTek contracts director and two Army Corps of Engineers officials, were arrested in the Washington D.C. area on Tuesday.

EyakTek is owned by the Eyak Corp., the village corporation for Native shareholders in Cordova. Alaska Native corporations receive special federal contracting privileges. Critics, particularly Missouri Democratic Sen. Claire McCaskill, argue the Alaska Native corporation privileges lead to waste as the money is funneled to Washington D.C. subcontractors.

Markey wrote that the scam "raises questions about whether there are adequate controls in place to prevent fraud and abuse at ANC's and protect U.S. taxpayers and Alaska Native shareholders. I ask that the Committee immediately schedule a hearing to investigate this matter."

Hastings won't commit to holding the requested hearing but didn't rule it out either. "We're taking a look at this matter but involves many facets beyond the authority of this one committee," said Hastings spokesman Spencer Pederson.

Congressman Tim Bishop, D-N.Y., said he wants a separate hearing before a subcommitee with jurisdiction over the Army Corps of Engineers.

"This oversight hearing should also explore what affirmative steps are being undertaken by the Corps to safeguard against similar abuses of the public's trust and finances, both potential ongoing abuses as well as into the future," Bishop wrote.

Bishop is the ranking Democrat on the subcommittee on water resources and the environment, which has oversight over the Corps of Engineers.

Massachusetts Rep. Markey, in his call for a hearing before the natural resources committee, noted that committee has jurisdiction over Alaska Native corporations. Markey wrote he is "concerned that EyakTek's status as an ANC may have facilitated this scam."

He wrote that the Alaska Native Claims Settlement Act included corporate governance and disclosure requirements for Native corporations.

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