Remote Island Dealt Economic Blows By Uncle
Sam
An impoverished
Alaskan island in the Bering Sea has suffered severe economic setback through
federal neglect and unfair action. In early 2017, the Interior Department
rejected the pleas of the Aleut Community of St. Paul Island for an opportunity
to take fish.. The tribe has no choice but to subsist on marine resources
surrounding the island but finds itself locked out of the fishery by federal
management. The tribe believes that the
special federal reservation established around the Pribilof Islands included a
set-aside of fishing rights which still exists today. The
Aleut Community's request has been passed from one attorney to another in
the Interior Solicitor's office since 1996 and it has generated many questions
but no solution for tribal fishermen thus far. The Tribe’s submissions include
the 1996 summary of the legal right to an allocation of Bering Sea fisheries,
available at http://bit.ly/2bHtC4L. This is the best statement of the tribe's
rights that arose when the special reservation was established in 1869. That
summary is supported by a detailed 1997 historians’ report on federal responses
to Pribilof Aleut dependence on fisheries. However, on
January 19, 2017, the Interior Department merely acknowledged that the
Island was treated unfairly but it refused to recognize any fishing right. The
tribal government is considering further actions.
Earlier, the St. Paul Island’s
Native Corporation, Tanadgusix, was nearly bankrupted by the General Service
Administration’s economic sanctions against it.
The documents that follow show the tortured paper trail of Tanadgusix
Corporation’s acquisition of the de-commissioned
Navy drydock Ex-Competent for use
in Hawaii, which has led to that peril.
The
Ex-Competent was acquired from the
Federal General Services Administration (“GSA”), which acted through its agent
in Anchorage,
the Alaska State Agency for Surplus Property (“SASP”). The sworn
statement of Kevin Kennedy, Director of Marine Operations for Tanadgusix
Corporation (“TDX”), dated June
26, 2002, describes what happened and lists exhibits in support of
TDX’s claims. The sworn
statement of Brian Ashton, who acted on behalf of the Alaska SASP and GSA,
dated February 11, 2003,
confirms those events.
At
the center of the drydock use controversy is TDX’s Letter of
Intent, Exhibit 29, dated January
19, 2001, which, together with its attachments, proposes use of the
drydock with TDX’s partner in Hawaii, Marisco Ltd., and their plans to “utilize
it for services to our various clients.”
The Letter of Intent became part of the Vessel
Conditional Transfer Document, also dated January 19, 2001, Exhibit 30. However, three weeks later, the SASP transferred
ownership of the drydock to TDX’s subsidiary, Bering Sea Eccotech (“BSE”)
on February 14, 2001,
as shown in Exhibit 31. E-mails between
the SASP and officials in the Federal General Services Administration and Small
Business Administration (“SBA”) reveal confusion among the agencies over
how the drydock could be transferred to BSE but the SASP decided to “proceed
with the transfer to BSE.” Exhibit
33. However, in May 2001, the SBA had
determined that it could not help BSE because “the Federal Surplus Property
Program under the 8(a) Program is on hold pending resolution of certain policy
concerns.” Exhibit 53. Evidently this reactivated either an October
2000 or January 2001 transfer to TDX; it is not clear which set of documents
applies.
Matters took an
ominous turn on June 25,
2001, when a Federal GSA official in Philadelphia announced to Senator Daniel
Inouye that they believed TDX “plans to have the vessel transported to Alaska between the
months of September and November 2001 . . . . [T]he dock will
not remain in Honolulu.” Exhibit
59. That letter was sent without TDX’s
knowledge and it made promises that were contrary to both TDX’s Letters of
Intent and Vessel Conditional Transfer Documents. Twenty-one
key documents reveal exactly what happened during the critical period, October 19, 2000 through March 30, 2001, during
which the federal agencies, TDX and BSE sought to transfer the drydock to one
of the Pribilof Aleut corporations.
Upon
completion of the most urgent repairs of the Ex-Competent, TDX and Marisco entered into the Interim
Agreement, dated January
2, 2002, before the Ex-Competent
began operations. Later in January, the Ex-Competent lifted the Coast Guard
cutter JARVIS,
allowing emergency
repairs and saving the cutter a trip to the West Coast. Photographs show
the Ex-Competent,
its control
room, machine shop
and kitchen
available for TDX’s Aleut Apprenticeship Program, heavy-lift cranes,
and pumps
and old electrical
systems still under repair. After
learning of this, in February 2002, the SASP sent TDX the final contract to
sign to complete the donation, called the “Distribution Document.”
The
Lawsuits
Pacific
Shipyards International, a competitor of TDX’s partner in Hawaii fired the first shots in what has
become a multi-front litigation battle against TDX’s drydock in Hawaii. PSI v.
TDX and Marisco was filed in Federal
District Court in Honolulu.
The PSI case claimed that TDX
and its partner were guilty of racketeering.
However, Judge Ezra
dismissed the PSI complaint on May 31, 2002, and rejected claims that the Letter of
Intent and related documents were fraudulent.
When PSI amended the
complaint, Judge Ezra dismissed
it again on January 31, 2003. He
subsequently entered an order
amending his second dismissal on April 4, 2003. PSI
appealed, but in August 2005, the Ninth Circuit Court of Appeals affirmed
the dismissal.
TDX
and BSE sued Deidre Huber, the federal agencies (GSA and SBA) and the state
SASP on February 14, 2002,
by filing a complaint in Federal
District Court in Anchorage.
On December 5, 2002,
newly-assigned Judge Ralph Beistline dismissed the Huber complaint and entered summary
judgment against TDX. However, a few
months later, when GSA sought to seize the drydock, Judge Beistline stayed
(placed on hold) his decision on March 4, 2003. On December 12, 2003, he
established a $10,000.00 per
month rental value to be paid by TDX into an escrow account and
authorized use of the drydock while his 2002 decision is under appeal. TDX
submitted a brief
to the Court of Appeals asking that Judge Beistline’s December decision be
reversed.
The Court of
Appeals held a hearing on July
7, 2004 (listen to the arguments). On July 29, 2004, TDX asked the Court of Appeals to reopen
the case and consider two new documents critical to the transfer of the
Ex-Competent, documents that had been hidden by GSA officials in Alaska. The federal agencies opposed
that request. The Court refused the new
documents. On April 21, 2005, a three judge panel
of the Court of Appeals issued an opinion
affirming Judge Beistline’s decision and ruling that the Ex-Competent’s
ownership has reverted to GSA. The court
found plausible evidence that “the people involved—on GSA’s side as well as
TDX’s—knew full well that they were transferring to the St. Paul village
corporation a vessel that would stay in Hawaii, and that the only
misrepresentation made by anyone was when GSA told a senator from Hawaii that
the vessel was going to be taken to Alaska.”
However, they ruled that a key document required TDX to move the vessel
to Alaska for
four years, failing which ownership reverted to the federal government. (In
fact the provision they cited says nothing of the kind.) TDX petitioned
for rehearing, which was denied, and it is considering further appeal
options.
Meanwhile,
back in Hawaii, members of the Pacific Shipyards workforce sued TDX claiming
TDX lacked the necessary water permit to operate the drydock. Federal District Judge Helen Gillmor denied
both plaintiffs’ and TDX’s motions for summary
judgment in the Rodrigues case on
January 5, 2004. Judge Gillmor issued a stay,
delaying trial until the Court of Appeals rules in the Huber case.
Matters
turned threatening on September 26, 2003, when the United
States filed a complaint against TDX and Marisco charging them with making
false statements to obtain federal property, an action under the Federal False
Claims Act that seeks damages of more than $15 million dollars, for a drydock
the Navy classes as scrap. On August 16, 2004 the
District Judge denied cross motions for summary
judgment as to the value of the “conditional title” to the drydock given to
TDX; instead Judge Gillmor issued a stay of proceedings until the Court of
Appeals issues a ruling in the Huber
case, discussed above.
GSA,
piling injury on top of insult, issued
a proposed debarment order on May 28, 2004, crippling TDX, BSE and Marisco and
prohibiting new federal contracts with any of those companies. Incredibly, the
debarment began just weeks after GSA
wrote to Congressman Don Young assuring him that GSA had not interfered
with federal agencies wishing to contract with TDX to use the drydock. TDX and BSE responded on June 28 showing that
GSA has no basis for debarment. The proposed debarment, while under appeal,
applied regardless of any connection between a contract and the drydock that is
in dispute. Finally, on August 16, 2004 GSA canceled
the proposed debarment. While not admitting error, GSA indicated it would
only resume debarment action if new information or developments call for action
to protect the government’s interests.
Congress
finally stepped in on August
10, 2005, enacting Section
4401 of Pub. L. 109-59. That law
required TDX immediately to relinquish all rights to the Ex-Competent to GSA. The law also required GSA to sell the vessel,
subject to a condition that it cannot be used again in United States
waters. (Congress wanted to prevent GSA
from repeating this fiasco with another “donee.”) As a result, TDX conveyed its rights to GSA
and, on September 1, 2005,
the vessel was towed back to Pearl Harbor for
sale. The new law also reauthorized
the Pribilof Islands Transition Act and it authorized $4 million in
appropriations to reimburse TDX for its expenses, repairs and improvements made
to the Ex-Competent. Unfortunately, however, no moneys have been
paid to TDX and further appropriations legislation will be necessary.
Never
have the residents of St. Paul Island had so much attention from the federal
government. Sadly, but perhaps not
unexpectedly, that attention as been aimed at blocking them from dealing with
the harsh hand that history has given to islanders. This comes at a time when the Senate is
debating a resolution that would have Congress apologize to Native people for
the way the federal government has treated them. If Washington needs a reason to apologize,
then our lawmakers need to look westward to St. Paul Island.
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