Anchorage Daily News  3/26/99
Spill funds aren't end of trouble
Money has downside anthropologist says

By NATALIE PHILLIPS - Anchorage Daily News reporter

Over the past five years, five Native communities have seen instant wealth trickle down from the money Exxon paid to atone for its 1989 oil spill. The windfall has fueled a spending spree on items like new television satellite dishes, computers, cars and skiffs, according to an anthropologist tracking the money.

But at the same time, "the influx of big money has created considerable havoc and internal community strife in places such as Akhiok-Kaguyak and Chenega Bay;" said Craig Mishler, who recently retired from the state Department of Fish and Game.

Mishler is following how Native corporations spend money earned by selling land to the Exxon Valdez Oil Spill Trustee Council. He presented preliminary findings at the Egan Center on Thursday during a four-day conference marking the 10th anniversary of the Prince William Sound oil spill.

MONEY: Sudden wealth has caused strife in some villages, researcher says

Several people in the Native corporations have lost their jobs over spending decisions and disagreements, Mishler said.

"Some communities have seen households use the money to move away. And in all communities (the money has) given residents an opportunity to improve their standard of living because most of the corporations are investing at least half of their proceeds into trusts funds for future, long-term dividends."

In 1992, Exxon paid $1 billion to settle government lawsuits following the spill. The Exxon Valdez Oil Spill Trustee Council was created to oversee spending most of that money. Roughly $400 million was used to purchase Native corporation lands that were in holdings in national parks and refuges or abutting national forests.

The managers of the forests, parks and refuges were eager to purchase the lands because they worried about development, Mishler said. The Native villagers offered to sell because they didn't want to see development and "felt that it was the only way they could lift themselves up out of poverty and dependency on government transfer payments," he added.

Last summer, a priest attending a Native conference in Cordova cautioned that the "tidal wave of money" from the spill might destroy villages, Mishler said.

"While almost everyone recognized that the spill itself has caused tremendous ecological and social damage, few have acknowledged that the restoration process itself, however well intended, has already had negative impacts on residents of these communities," Mishler said.

Out of six Native corporations, only the one representing Port Graham refused to sell land to the Trustee Council. "Clearly a different set of values prevail here," Mishler said. "One major difference is that it is Port Graham's policy to encourage shareholders to resettle their ancestral" lands."

Shareholders of Native corporations in Old Harbor, Tatitlek, and Nanwalek mostly agreed with corporate spending decisions, according, to Mishler. However, in Chenega Bay and dissident shareholder's challenged corporate decisions.

In Old Harbor on Kodiak Island, much of the $14.5 million the corporation received was invested in Seattle real estate and is returning annual dividends of up to $10,000 to shareholders, Mishler said. The money came as many of the community's commercial fishermen were suffering from a drop in fish prices. The money cushioned the loss of fishing income and has allowed boat owners to continue making boat payments, he said.

In Tatitlek in Prince William, complaints were few, Mishler said. Some of the $34.5 million windfall was invested, some distributed to shareholders. "On the downside, one bachelor elder, a popular member of the community, has left in part because of the money," Mishler said. He moved to Valdez.

In Nanwalek on Kachemak Bay, most of the $15.3 million the Native corporation received for its land was placed in a permanent trust fund for its shareholders. However, $500,000 was set aside to study cultural resources, Mishler said.

On Kodiak island "has seen a great deal of internal feuding" over how the $46 million it received for its lands is spent. A lawsuit was filed by dissident shareholders. The corporation's longtime president was voted out by petition, Mishler said. A trust fund pays shareholders about $500 a month and corporate investments pay out another $500 a month. There are still disagreements on how corporate money should be spent or invested.

In Chenega Bay in Prince William Sound, the land sales are "especially controversial and divisive," Mishler said. A corporate executive who opposed the land sale lost her job, as did her husband, who was a village administrator. After the corporation sold its lands for $34 million, it distributed checks for $30,000 to $40,000 to shareholders. A portion of the money was placed into a fund that pays an annuity to shareholders and some money was set aside to build a new Russian Orthodox church in Chenega, Mishler said.

Mishler said binge drinking reportedly has become more serious since the spill. One Chenega shareholder who received a pay-out check in January 1997 headed straight for Anchorage, then died after a drinking and spending binge, Mishler said.

Reporter Natalie Phillips can be reached at

Anchorage Daily News

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