Alaska tribal groups race to spend COVID-19 relief money

Tribal groups that represent Native Alaskans are racing to spend half a billion dollars in federal coronavirus relief payments ahead of a December deadline after a delay that tribal leaders say could become catastrophic for communities now at the epicenter of the pandemic’s latest wave.

Those groups, called Alaska Native Corporations, have only recently begun receiving money allocated by the Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law in March 2020 by then-President Trump.

The $2 trillion package allocated $8 billion to federally recognized tribal governments, of which about $500 million was earmarked for Alaska Native Corporations. But three Native American tribal governments in the lower 48 states sued, arguing that the Alaska Native Corporations were not formally recognized by the federal government and therefore should be ineligible for the funds.

The Supreme Court ruled in June that the corporations were eligible for the funds.

But while tribal governments began receiving funding last year, the court case meant the Alaska Native Corporations could not begin making plans to allocate the funding until this summer. The CARES Act sets a deadline of Dec. 31 to expend the money, giving the corporations an extremely shortened window to plan for, qualify for and spend their shares.

“The delay will be devastating to the entire Alaska native community,” said Shauna Hegna, president of Koniag Inc., one of 13 Alaska Native Corporations, which has 4,300 shareholders and descendants mostly of Alutiiq descent.

Many of Hegna’s shareholders live on Kodiak Island, with pockets around Anchorage and Wasilla and some who live in the contiguous United States. After Koniag became eligible for its share of CARES Act funding — in its case, $6.78 million — the corporation began developing a plan to spend the money, including $1 million to support testing and vaccines on Kodiak and individual relief payments to those who had been impacted by the pandemic.

The application process for individual payments went live last week. Already, more than 1,000 have applied, a third of whom face emergency needs to handle pending foreclosures, evictions or utility shutoffs.

“What this data tells me is that our Alaska Native shareholders and descendants desperately needed this funding,” Hegna said in an interview.

Alaska Native Corporations were established by Congress in 1971 as part of legislation passed to settle and administer financial and land claims. The law that created the corporations divided the state into 12 regions, with a 13th dedicated to Alaska Natives who lived outside the state. While Native American tribal governments count citizens, the Alaska Native Corporations count their populations as shareholders.

The corporations themselves operate for profit; Koniag counts 2,000 employees across businesses that include government contracting, a commercial information technology business and a bear-viewing lodge on Kodiak Island. More recently, they have turned some of their employees into application processors to get COVID-19 relief funding out the door.

“They’ve been a real steady aspect of not just the resource development sector but also diversifying into other elements,” Sen. Dan Sullivan (R-Alaska) said in an interview Wednesday. “They employ tens of thousands of people, native and non-native in Alaska.”

Koniag has half a dozen employees dedicated to communicating with shareholders about their application rights, some of whom travel door-to-door to hand out and help with paperwork in communities where internet broadband is nonexistent. On Kodiak Island, that means sending people to remote communities by boat or plane. Three more do nothing but handle paperwork behind the scenes.

The looming deadline to get funding out the door has caught the eye of Alaska’s congressional delegation, which is working to extend the deadline beyond the end of the year.

Sullivan and Sens. Lisa Murkowski (R-Alaska), Brian Schatz (D-Hawaii) and Mazie Hirono (D-Hawaii) have introduced legislation to extend the deadline for tribes to spend CARES Act funding to the end of 2022. The senators say the measure, currently before the Senate Finance Committee, will help tribal governments in the lower 48, too, more than 80 of which received funding late because of litigation and undercounts of their population.

“I think we’re close, because it’s just the logical request that my legislation that we’re putting forward is making,” Sullivan said. “It’s needed to make wise spending decisions, so this is something that should unite conservative Republicans, liberal [Democrats]. It’s not new money, you want to spend it wisely.”

Reps. Don Young (R-Alaska) and Tom O’Halleran (D-Ariz.) have introduced a similar bill in the House.

“I want to make sure they have the time necessary to collaborate and make smart investments in their community,” Young said in a statement.

But some fear the spending deadline will become a pawn in last-minute budget negotiations, a piece to be given away in a tradeoff for some other program. If that happens, Alaska Natives worry any agreement will come so late that the corporations will have already raced as much money as possible out the door — or, in a worst-case scenario, no deal at all would mean the corporations would have to give some of the sorely-needed funding back.

“If there’s a delay, then I foresee many Alaska Native Corporations being forced to give back money to the Department of the Treasury because they simply will not have enough time to develop a spend plan,” Koniag’s Hegna said.

The funding dispute comes at a critical moment for Alaska, which is suffering from the worst coronavirus infection rates in the nation. The state managed to keep its infection rates low during most of the first year and a half of the pandemic, but now it is suffering its worst surge in the midst of the delta wave.

Alaska is averaging more than 1,000 new cases a day over the last week, or 125 cases per 100,000 residents — about four times the national average. About 220 people are being treated for the coronavirus in Alaska hospitals, straining a health care system so much that some patients are being sent as far away as Seattle for treatment. Alaska hospitals are already operating under crisis-of-care standards that allow doctors to prioritize some patients over others.

Fifty-one percent of Alaskans are vaccinated against the coronavirus, lower than the 56 percent share that has been fully vaccinated nationwide.

Murkowski said on the Senate floor last week that she had witnessed first-hand the strain on her state’s hospitals: She took a relative to Fairbanks Memorial Hospital, where she was told her loved one might have to be sent to Seattle or Portland, Ore., to be treated for a non-COVID-19 emergency.

“That’s what’s happening in Alaska right now. When your hospitals are full, you just can’t put them in an ambulance and take them to another town. We’re taking these folks to another state,” Murkowski said. “It’s tough. Beds are hard to find, and the extraordinary men and women who every day are going in and doing as best they can to provide for the level of care that is needed are doing so.”