Politics & Policy

Murkowski’s Quid pro Quo

Joe Miller would reform a federal contracting program. Lisa Murkowski thinks Alaska is just getting its fair share.

‘Joe Miller has a plan for Alaska,” begins a commercial supporting Sen. Lisa Murkowski, which a new group called Alaskans Standing Together (AST) is spending nearly $600,000 to air in the state. “It erases our fair share of federal dollars.”

What’s not stated explicitly in the ad is that the Alaska Native Corporations (ANC), which are backing AST, are facing prospective legislation that could end the privileges they currently enjoy. Those privileges, which the late senator Ted Stevens (R., Alaska) helped shepherd into law, allow the ANCs to enjoy no-bid federal contracts. That’s proven a boon for ANCs, which have racked up a “fair share” of $29 billion in contracts from the federal government over the past decade.

That haul — and the minimal amount trickling down to the intended Native American beneficiaries — concerns Sen. Claire McCaskill (D., Mo.), who announced in early October that she planned to introduce legislation that would alter the contracting preferences. “We’ve seen that a very small portion of these companies’ profits are reaching native Alaskans, so it’s time to acknowledge the fact that this program is not effective for either native Alaskans or taxpayers,” she said in a statement.

Miller supports this kind of reform, which needless to say has something to do with the big — by Alaskan standards — ad buy against him.

Currently, the ANCs are classified as 8(a)s, which means they are considered small, disadvantaged businesses that are eligible for preferential treatment for federal contracts. To become an 8(a), a business is required to prove economic or social disadvantage (usually meaning that is has been harmed by racial or ethnic prejudice) . If approved, the business is eligible to receive no-bid federal contracts amounting to up to $3.5 million in services or $5.5 million in goods.

But unlike other businesses, the ANCs are automatically considered disadvantaged — and their contracts are not subject to any caps. It’s a lucrative exemption: Many no-bid contracts that exceeded $3.5 million, collectively worth $6.6 billion, were granted to ANCs from 2000 to 2008.

McCaskill believes the ANCs should be subject to the same caps as other 8(a)s and should be required to prove disadvantage. Joe Miller agrees. “There is not proper oversight of these corporations,” he told NRO, “and much of the taxpayer money being poured into the ANC’s does not accomplish the mission of the 8(a) program. No-bid contracts, coupled with a lack of oversight, have created an environment that lends itself to corruption, and does not serve the interests of the shareholders for whom it was created.”

Murkowski has already come out in opposition to McCaskill’s proposed bill. “I would oppose and fight any legislation that strips Alaska Native Corporations, Indian tribes, and native Hawaiians of the contracting preferences afforded to them,” she said. “We must reform the program to ensure it works the way it was intended. Completely removing these contracting preferences would set back the progress we have made to address the poverty experienced by our nation’s first peoples.”

A request to the Murkowski campaign for clarification on what reforms the senator would support was not answered.

While it’s true that the ANCs were originally granted those preferences in order to help native Alaskans, it’s unclear how helpful the program has been. Out of the $23 billion received from federal contracts from 2000 to 2008, about $720 million (or $615 per person per year) went to native Alaskans, in the form of cash, scholarships, or other benefits.

Speaking about the AST ads, Miller argues that they give an “appearance of impropriety,” and look “a lot like quid pro quo.” “The concern is that Murkowski is protecting the 8(a) program,” he says, “and in turn the regional native corporations are taking money that should be going to help disadvantaged shareholders and using it to advance her personal political agenda and their own business interests.”

It’s not clear if Murkowski can halt the legislation. But if she can, that nearly $600,000 in advertising will be a drop in the bucket compared to the billions the ANCs will continue to rake in from the nation’s taxpayers.

— Katrina Trinko writes for National Review Online’s Battle ’10 blog.

Katrina TrinkoKatrina Trinko is a political reporter for National Review. Trinko is also a member of USA TODAY’S Board of Contributors, and her work has been published in various media outlets ...

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