[Federal Register Volume 62, Number 72 (Tuesday, April 15, 1997)]
[Notices]
[Pages 18316-18332]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9586]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration
[I.D. 033197C]


Secretary's Report to Congress on the Pribilof Islands as 
Required Under Public Law 104-91

AGENCY: National Oceanic and Atmospheric Administration (NOAA), 
Commerce.

ACTION: Notice of submission of report to Congress.

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SUMMARY: Public Law 104-91, section 3(c) requires the Secretary of 
Commerce to prepare and submit a report on necessary actions to resolve 
Federal

[[Page 18317]]

responsibility on the Pribilof Islands. The Report was prepared by the 
National Oceanic and Atmospheric Administration and was signed by the 
Secretary of Commerce on March 17, 1997. This Notice is intended to 
publish the main text of the Report and provide information regarding 
its availability.

FOR FURTHER INFORMATION CONTACT: Nancy Briscoe in the Office of General 
Counsel, National Oceanic and Atmospheric Administration, 301-713-1393.

SUPPLEMENTARY INFORMATION: On January 6, 1996, President Clinton signed 
Public Law 104-91. Under Section 3 of the law the Secretary of Commerce 
was directed to undertake certain activities with regard to the 
Pribilof Islands, Alaska. Section 3(c) directed the Secretary to 
prepare a report for Congress which proposed necessary actions by the 
Secretary and Congress to resolve all federal responsibilities on the 
Islands.
    The Report to Congress on the Pribilof Islands was signed by the 
Secretary of Commerce on March 17, 1997. The text of the Secretary's 
Report is attached to this Notice. Full copies of the Exhibits to the 
Report consist of thousands of pages of documents submitted under the 
Report process by local entities and residents. Due to the volume of 
the Exhibits, it was not possible to publish them with this Notice. 
Full copies of all Exhibits are available at the City Office on St. 
Paul (907-546-2331), at the City Office on St. George (907-859-2263), 
at the Regional Archives facility of the National Archives in 
Anchorage, 645 West 3rd Avenue, Anchorage AK, 99501 (907-463-2408), and 
at the Office of General Counsel, NOAA, 1315 East-West Highway, Silver 
Spring, MD 20910 #(301-713-1393).

Secretary's Report on the Pribilof Islands as Required by Public Law 
104-91

Prepared By: The National Oceanic and Atmospheric Administration for 
the Department of Commerce

Final, March 17, 1997.

I. Introduction

    The Pribilof Islands of St. Paul and St. George are islands of 
volcanic origin that lie 800 miles west-south west of Anchorage, Alaska 
in the Bering Sea. Each island has an approximate land area of 44 
square miles generally contained by precipitous cliffs. St. Paul, the 
larger of the two islands, has a current population of approximately 
780 people. The population of St. George is approximately 120 people.
    The Pribilof Islands were discovered by Russian navigators in 1786 
as a result of their search for the breeding grounds of the North 
Pacific Fur Seal (``the fur seal''). The next one hundred years were 
marked by intense harvest of the fur seals to exploit Chinese, Russian 
and European markets. To harvest the commercially valuable species on 
the Islands, the Russians enslaved and relocated Aleuts from the 
southeast who were proficient at killing the seals.
    When the United States purchased the Territory of Alaska from the 
Russians in 1867, responsibility for the welfare of the Pribilovian 
Aleuts fell to the Federal Government. Since 1867, the United States 
Government has worked to promote the autonomy and self-governance of 
the Pribilovian people, and thereby fulfill its obligations to them. 
Following decades of progressive change in the Federal Government's 
administration of the Islands, Congress in 1983 enacted legislation to 
terminate Federal management of the Pribilof Islands.
    On January 6, 1996, President Clinton signed Public Law 104-91 
(``P.L. 104-91''). Section 3(c) of the law, entitled ``Resolution of 
Federal Responsibilities,'' requires the Secretary of Commerce to 
submit to the Committee on Commerce, Science, and Transportation of the 
Senate, and the Committee on Resources of the House of Representatives

* * * a report proposing necessary actions by the Secretary of 
Commerce and Congress to resolve all claims with respect to, and 
permit the final implementation, fulfillment and completion of--
    (a) Title II of the Fur Seal Act Amendments of 1983 (16 U.S.C. 
1161 et seq.);
    (b) The land conveyance entitlement of local entities and 
residents of the Pribilof Islands under the Alaska Native Claims 
Settlement Act (43 U.S.C. 1601 et seq.);
    (c) the provisions of this section; and
    (d) any other matters which the Secretary deems appropriate.''

    This is the Report of the Secretary of Commerce (``Secretary'') as 
required under P.L.-104-91.
    This Report examines the historical and contemporary relationship 
of the United States government to the Pribilovian people to afford the 
context for evaluating current circumstances and Federal 
responsibilities. The Report is organized as follows: Section II 
examines historical Federal involvement; Section III describes the 
current economies on the Islands of St. George and St. Paul and the 
relationship of the Pribilovian people to the Federal Government; 
Section IV describes and categorizes the claims asserted against the 
United States by local entities and residents and, where applicable, 
provides recommendations for additional Federal action; Section V sets 
forth the position of the Department of Commerce (``the Department'') 
and its recommendations for resolution of Federal responsibility on the 
Pribilof Islands.

II. A History of Federal Involvement on the Pribilof Islands

    This Report cannot fully chronicle the complex history of the 
Pribilof Islands.1 It is the aim of this Section to provide 
an historical overview of Federal involvement with the Pribilof Islands 
as they have evolved into independent, self-sustaining American 
communities.
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    \1\ A Century of Servitude (Jones, Dorothy Knee, University 
Press of America, Library of Congress card no. 80-1407--currently 
out of print) and Slaves of the Harvest, published by the Pribilof 
Island School District--no additional citation available) have been 
recommended by the Pribilovian people as guides providing a full 
accounting of the Islands from Aleutian discovery to the people's 
recent struggle with autonomy.
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A. Origins

    The U.S. Government first became directly involved with the 
Pribilof Islands and the Pribilovian people in 1867 when the islands 
were acquired with the Territory of Alaska. Immediately thereafter, in 
1868, the Islands were declared to be a special Federal reserve for 
purposes of management and preservation of fur seals and other fur 
bearing species.
    In the first 40 years of Federal ownership of the Pribilof Islands, 
the lives of the Pribilovians were directed by the companies harvesting 
the seals under contract with the U.S. Government. During this period, 
the Pribilovian people derived their livelihood through employment with 
the fur sealing companies and their lives were subject to the dictates 
of those companies.
    Largely unregulated, the effects of the private, commercial harvest 
were devastating on the fur seal population. By 1890, the effects of 
over-harvest and pelagic sealing 2 brought the population 
close to extinction. At the close of the last private contract in 1909, 
it was estimated that only 300,000 fur seals remained worldwide.
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    \2\ Pelagic sealing is the practice of killing seals at sea. It 
is less selective and less productive than taking seals on land 
where surplus adult males can be identified and females and pups may 
be protected.
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    As a result of the decline in the fur seal population, Federal 
attention paid to the Islands increased. Although the Government's 
focus remained primarily on management of the fur seal harvest, the 
Federal response ensured greater engagement by the United States with 
the lives of the Pribilovian people.

[[Page 18318]]

    Pelagic sealing and mass, commercial-contract sealing in the United 
States was curbed in 1910 when the Sixty-First Congress passed ``An Act 
to protect the seal fisheries of Alaska, and for other purposes'' 
(``the 1910 Act'').3 The effect of the 1910 Act was to 
abolish the lease/permit system of seal harvest open to the general 
trading public and to replace it with a broader government authority 
vested in the Secretary of Commerce and Labor to manage and protect the 
seal population. To promote conservation of the fur seal, the 1910 Act 
prohibited the killing of seals by anyone other than an officer, agent 
or employee of the Federal Government.
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    \3\ See Act of April 21, 1910, 36 Stat. 326.
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    The 1910 Act further directed that whenever seals were killed or 
sealskins taken the Pribilovians were to be employed and were to 
receive fair compensation for their labor. To administer the program, 
the 1910 Act specified that the Secretary had:

    * * * the authority to furnish food, shelter, fuel, clothing, 
and other necessaries of life to the native inhabitants of the 
Pribilof Islands and to provide for their comfort, maintenance, 
education and protection.

    Notwithstanding relatively minor amendments made in 1912 to give 
effect to the Fur Seal Treaty of July 7, 1911 between the United 
States, Great Britain, Japan and Russia, the 1910 Act remained in force 
until repealed by the Fur Seal Act of February 26, 1944 (``the 1944 
Act'').4 The 1944 Act served primarily to vest control over 
the fur seals, salmon, and other fisheries in Alaska in the Department 
of the Interior (``DOI''), which administered the program through the 
Bureau of Commercial Fisheries (``BCF''). It came on the heels of 
Japan's abrogation of the 1911 treaty on October 23, 1941 and 
completion of a provisional fur seal conservation agreement between 
Canada and the United States which followed in 1942.
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    \4\ See 16 U.S.C. Secs. 631a-631q, 58 Stat. 104.
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    War between the United States and Japan was declared in 1941 and in 
1942, the Japanese launched a surprise attack on Dutch Harbor, 
Unalaska. The attack on the Aleutian Chain dramatically exposed the 
United States' vulnerability in the Bering Sea and thrust the Pribilof 
Islands directly into the war zone. Because of the threat of attack, 
the Pribilovians were evacuated from their homes and interned at 
Funtner Bay on Admiralty Island, Alaska. Their internment lasted two 
years and they returned to the Pribilofs at the close of the war in 
May, 1944.

B. The Late 1940s: The Post-War Era

    Internment at Funtner Bay lead to familiarity with other Alaskan 
natives and in 1948 the Pribilovians joined the Alaska Native 
Brotherhood (``ANB''). As a result of the efforts of the ANB on behalf 
of the Pribilof Aleuts, the Secretary of the Interior in 1949 
designated a group to study living conditions of native communities 
around the Bering Sea.5
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    \5\ As cited in Slaves, Ibid. at 143.
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    The DOI study found that living standards on the Pribilof Islands 
were on par with the highest income groups of any native people in 
Alaska and that living conditions there were exemplary. The survey 
group recognized, however, that the role of the Federal Government as 
guardian of their welfare limited the Pribilovian's sense of liberty 
and was inconsistent with the status of wage earning natives elsewhere 
in the Alaska Territory. To temper this disparity, recommendations were 
made to restructure certain operational functions on the Islands. As a 
result of the recommendations, a job classification and cash 
compensation wage plan was instituted. The plan included annual and 
sick leave, retirement benefits and disability insurance. Food, 
housing, clothing, health, education and recreation costs continued to 
be paid by the government.
    Although Pribilovian monetary compensation under the new system 
remained below that of their neighbors, a relatively high standard of 
living was ensured by the offsets provided through the in-kind 
compensation they continued to receive. As demonstrated by the study, 
the result was that during this period the Pribilovians enjoyed greater 
health, recreational, educational and medical benefits than any other 
Alaskan native group.
    The survey group also recommended that the St. Paul community 
receive a charter, constitution and bylaws in compliance with the 1934 
Indian Reorganization Act (``IRA'').6 The St. Paul charter 
was established in 1950 and with it the Pribilovian communities of St. 
Paul and St. George found a voice in Federal and territorial government 
decision-making. They were also given responsibility for handling all 
economic affairs of the community and for safe-guarding the peace, 
safety and morals of the village.
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    \6\ The IRA was developed to help native Americans retain their 
identity through the establishment of tribal self-government, the 
preservation of religious and cultural freedom, and the prevention 
of economic exploitation.
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    In 1951, the St. Paul IRA council exercised its new rights by 
filing a claim for native land rights and compensation for past 
injustices. The land rights were ultimately resolved in 1971 under the 
Alaska Native Claims Settlement Act (``ANCSA''), discussed below. The 
claim for past injustices was ultimately brought under the Fair and 
Honorable Dealings Act, and was settled in 1976.7
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    \7\ On August 10, 1988, the President signed legislation 
authorizing a $21.4 million trust fund for residents of the Aleutian 
and Pribilof Islands. The legislation was intended as compensation 
for Aleuts who were evacuated from their homes during World War II. 
The compensation is part of a larger reparation of $1.3 billion paid 
Japanese-Americans interned during the War.
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    Additional changes that marked the post-war era included the 
establishment of a voting precinct on the Islands and the agreement of 
the Territory of Alaska's Department of Health and Education to provide 
technical guidance to the Federal Government on medical and educational 
services. In 1948, a fourth class post office was established on St. 
Paul and regular mail service connecting St. Paul to the outside world 
was instituted by Reeve Aleutian Airways. In 1949 the first tourists 
were welcomed to the Islands and regular commercial flights were 
instituted. These flights enabled the Pribilovians to travel beyond the 
confines of their Islands. In the early 50's, large electrical 
generators were installed which were capable of providing electricity 
beyond the standard 11:00 p.m. curfew. In short order, modern 
electrical appliances became household fixtures on the Pribilof 
Islands.
    The introduction of modern conveniences, wages and buying power and 
the possibility of travel to the outside world, together with the 
support services still provided by the government, brought them to a 
socio-economic level on par with, if not surpassing, many other 
communities in Alaska and the United States (See A Century of Servitude 
for a good description of this period). In light of these changes, DOI 
began to re-evaluate the role of the Pribilof Island program.

C. The 1950s: Federal Attrition and the Beginning of Autonomy

    From 1942 until 1957, the Pribilof fur seals were protected by the 
interim treaty executed in 1942. In 1957, the Interim North Pacific Fur 
Seal Convention between Canada, Japan, the Union of Soviet Republics, 
and the United States was enacted. It established a Fur Seal Commission 
comprised of representatives of the four governments to coordinate 
research and management of the fur seal resource.
    As the United States' international policy regarding fur seals on 
the

[[Page 18319]]

Pribilofs continued to evolve toward conservation, BCF realized that 
their role and presence on the Islands would diminish. In 1959, BCF 
announced that the Pribilof fur seal harvest would, over time, become a 
seasonal operation. BCF recognized that this change in policy would 
significantly affect the Pribilovian people. They acknowledged that the 
local people would need job training and, given the remoteness of the 
Pribilofs, recommended off-island relocation.
    Preparing for the radical changes that would result from a reduced 
Federal harvest, BCF arranged for general skills training in Anchorage 
through the Bureau of Indian Affairs (BIA). To encourage participation, 
individuals were paid to attend the training. Despite this incentive, 
enrollment was low.
    While the BCF training initiative was largely ignored, their off-
island relocation suggestions were met with intense and vociferous 
opposition. As a result, and recognizing the relative inaccessibility 
and geographic inhospitability of St. George, BCF revised its 
relocation plan to accommodate habitation on St. Paul only. It was the 
opinion of BCF that with the decline in the Federal seal harvest 
program, particularly on St. George, the number of houses ultimately 
needed for employees should be held in check. In the years that ensued, 
the Bureau encouraged the voluntary relocation of St. George residents 
to St. Paul by providing new homes on St. Paul to St. George residents 
who moved there. In further support of this policy, new home building 
on St. George ceased, and all vacant homes there were destroyed.
    BCF dropped its outward relocation efforts after disapproval voiced 
during Committee on Commerce hearings conducted in 1965. The belief 
that the St. George Pribilovians should be relocated, however, would 
survive, and would be reintroduced in the next amendments to the Fur 
Seal Act.

D. The 1960s: Self-Autonomy

(1) The Federal Wage System
    In 1960, BCF appointed Howard Baltzo as the new director of the 
Pribilof Island Program. Mr. Baltzo's primary mandate was to improve 
the overall living conditions of the Pribilof people in light of 
impending program changes. The changes Mr. Baltzo made to the program 
are set forth in his May 1963 report entitled Program for 
Administration of the Pribilof Island Federal Reservation Embracing 
Management of the Fur Seal Resource and Development of the Resident 
Aleut Inhabitants. As result of Mr. Baltzo's work, the Federal Civil 
Service wage scale was introduced in 1962 for all people on the Islands 
working for the Federal Government. With this change, Pribilovian wages 
were brought into parity with the rest of the Federal workforce. In 
turn, in kind compensation such as free rent and food were 
substantially reduced, being provided only to those with insufficient 
wages to cover necessities. The Federal Government did, however, 
continue to maintain and administer the stores, laundries, houses, 
streets, and all public buildings and to fund educational and medical 
services for all Pribilovians on both Islands. To preserve Federal 
jobs, Pribilovian residents continued to be employed in these services.
    While in many ways a boon, the Federal wage-scale system brought 
with it the realities of unemployment. Based on civil service job 
definitions, many people were newly classified as temporary or part-
time employees. Still others lost their jobs. Although they now had 
autonomy and full wages, without the security of in-kind benefits, many 
people were caught in the unfortunate position of not being able to pay 
their bills. Individual indebtedness to the Federal Government for 
rent, food, clothing and fuel began to mount.8 Some 
Islanders left to seek work on mainland Alaska. Most, however, stayed.
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    \8\ Many of these debts were ultimately forgiven. In 1995, 
outstanding municipal debts for fuel and services were settled 
through an agreement for in-kind services.
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(2) The Fur Seal Act Amendments of 1966
    In 1965, Senate hearings were held regarding the role of the 
Federal Government on the Pribilof Islands (``the Bartlett Hearings''). 
At these hearings, the Pribilovians testified that they would feel more 
secure owning their own homes and managing the affairs of their 
villages as self-governed municipalities.
    The product of the Bartlett Hearings was the Fur Seal Act Amendment 
of 1966 (``the 1966 Act'').9 Amendments to Title I of the 
1966 Act incorporated changes that ensured implementation of the 
Interim Convention on the Conservation of North Pacific Fur Seals 
signed February 9, 1957, and amended by protocol dated October 8, 1963. 
Amendments to Title II of the 1966 Act were designed to foster self-
sufficiency and self-governance among the native inhabitants of the 
Pribilof Islands.
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    \9\ P.L. 89-702, 80 Stat. 1091.
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    Recognizing the significant positive changes brought about on the 
Islands since 1950, the Committee on Merchant Marine and Fisheries 
reported in House Report No. 2154:

    During the past 16 years progress has been made in placing the 
resident Aleuts on the same basis as other citizens and other 
Federal employees. They are now compensated on a wage rate basis 
comparable to that in other Alaska communities. They are charged 
reasonable rates for housing, household supplies, and community 
services provided by the Government. A locally elected community 
council manages certain affairs of the community, including the 
implementation of local ordinances. The St. Paul Island Community 
Council operates a cooperative canteen-store facility, and members 
of the Aleut community serve as deputy magistrate, postmaster, and 
local law-enforcement officers. A small number of home-operated 
restaurants and theater enterprises also have developed.

    The Department of Interior and your committee wants to encourage 
the development of the Aleut community still further, and significantly 
reduce Federal expenditures for the fur seal industry operation. 
Accordingly, the Department now plans three gradual changes in its 
program for administration of the islands. These involve: first, the 
transfer to the Aleut community on St. Paul of greater responsibility 
for the administration and management of the village coupled with 
increased opportunities for development of new economic activity within 
the expanded community; second, the consolidation of the St. George 
Island community with that on St. Paul Island on a voluntary basis -as 
housing and other facilities on St. Paul increase; and third, 
transition from year-round to seasonal fur seal industry operations by 
the Bureau of Commercial Fisheries.10
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    \10\ House Report, Merchant Marine and Fisheries Commission, 
House Report No. 2154, Cong. News, Sept. 29, 1966, p. 3630.
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    To accomplish these objectives and give effect to the desires of 
the Pribilovian people, section 206 of the 1966 Act authorized the 
Secretary of the Interior to set apart land on St. Paul Island for the 
establishment of a townsite. The townsite was to be surveyed into lots, 
blocks, streets and alleys and the Secretary was to issue a patent for 
the townsite to a trustee appointed by him. It was the duty of the 
trustee to convey to all individual natives of both islands title to 
improved or unimproved surveyed lots or tracts of land within the 
townsite. These tracts included plots with government homes on them.
    Conveyance was contingent on payment for the property to the 
Secretary. Before issuance of the patent

[[Page 18320]]

and any conveyance, the Secretary was required to make a determination 
that a self-governing community on St. Paul was in existence, or was 
likely to be imminently and successfully established. Adhering to their 
policy of consolidation of the Pribilovians on St. Paul Island, no 
townsite set-aside was authorized for St. George.
    Proceeds from the sale of the lands, together with other available 
funds such as tax revenues, were to be given to the established local 
governing body on St. Paul to enable it to provide needed municipal 
services. In addition, section 206 provided for a sliding-scale 5 year 
payment to the community to fund municipal services. The first payment 
was in the sum of $50,000.00. At the close of each succeeding 4 fiscal 
years, the payments would be $40,000.00, $30,000.00, $20,000.00, and 
$10,000.00, respectively. Finally, all unsold property remaining after 
5 years and no longer required by the Government was to be conveyed to 
the incorporated municipality, together with all surveyed streets and 
alleys.
    In 1967, just one year after passage of the 1966 Act, a team of 
researchers from the University of Alaska came to the islands to study 
St. Paul's economy in light of their emerging self-governance. Based 
upon available information, the researchers estimated that the average 
household income on St. Paul was approximately $9,830, while the 
expenditure for living expenses was $1000 less. They concluded that 
there was an income and savings base with potential to provide economic 
self-sufficiency through responsible local leadership.
    The report concluded:

    The future of St. Paul rests with the people of the community 
regardless of what determinations are made by others or what 
development plans may be prepared. It will be up to the local people 
to decide whether or not to incorporate as a municipality, and 
without a positive vote, the town-site provisions of the Fur Seal 
Act will not apply. Likewise, the carrying out of the development 
programs, the broadening of the economic base, and other potentials 
that exist are all dependant on support by the local population * * 
* St. Paul has the potential for emerging as a vital community. In 
the long run, however, the future of the Pribilofs rests to a large 
degree on the attitudes of the young people. How they see their 
future will determine the future of St. Paul.11

    \11\ Foote, Dan C., V. Fischer, George W. Rogers. St. Paul 
Community Study, Institute of Social, Economic and Government 
Research, University of Alaska, Fairbanks, Alaska, 1968, p. 72, as 
cited in Slaves, ibid. At 159.
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    Over the ensuing five years, the community failed to incorporate as 
a municipality. As a result, the Secretary was unable to make the 
requisite determination of self-governance to permit the land transfers 
and the realization of the people's desire for home ownership was 
delayed.
    Despite this delay, a number of positive changes were brought to 
bear on the Islands as a result of the 1966 Act. Effective in 1966, 
responsibility for some community services, including police and fire 
protection, were transferred to the local council. The first public 
tavern opened its doors on St. Paul the same year, and the community 
took over operation of the hotel that summer. Soon, the community 
equipped and was operating a maintenance and repair shop and a 
recreation hall. St. Paul established two movie houses, four 
refreshment stands, and a barber shop. In 1967, the U.S. Coast Guard 
Loran Station and the Weather Bureau began to train local residents for 
jobs. And for the first time, Pribilovian residents enjoyed private car 
ownership as vehicles were sold by departing Federal employees and 
construction contractors.
    The 1966 Act also served to enhance the retirement benefits of the 
Pribilovian people. Under a 1951 ruling, the Civil Service Commission 
had advised the Secretary of the Interior that the resident Aleuts 
performing services for the Government were considered Federal 
employees only as of 1950 when they received compensation in the form 
of wages. Under that ruling, elder Aleuts of retirement age would not 
receive credit service before 1950. Section 208 of the 1966 Act changed 
the administrative ruling of the Civil Service Commission by extending 
retirement credit for service prior to 1950. It also eliminated deposit 
requirements by those individuals for the accrual of benefits.

E. The 1970s: Self Governance

    Effective October 30, 1970, ``Reorganization Plan No. 4 of 1970'' 
(35 F.R. 15627; 84 Stat. 2090) transferred the functions of BCF to the 
Secretary of Commerce. As a result, the responsibilities of the Federal 
Government for continued administration of the Pribilof Island Program 
were assumed by the National Marine Fisheries Service (``NMFS'') of the 
newly organized National Oceanic and Atmospheric Administration 
(``NOAA'').
    In 1971, a resolution to accept a charter to incorporate St. Paul 
was finally passed. On June 29, 1971, the village of St. Paul became a 
fourth class Alaskan city and assumed all responsibility to provide 
public services to its residents. Meanwhile, the voices of combined 
Alaskan native groups had succeeded in bringing about reforms regarding 
the status of land ownership throughout the State. On December 18, 
1971, Congress moved to resolve all Alaskan aboriginal land claims by 
enacting the Alaska Native Claims Settlement Act 
(``ANCSA'').12
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    \12\ 43 U.S.C. 1601, et seq, 85 Stat. 688, Pub.L. 92-203.
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    In 1973, the Fur Seal Commission adopted the United States' 
recommendation to establish a major research program for fur seals by 
setting aside St. George Island as a research reserve. The goal of the 
research was to compare population dynamics and behavior between the 
harvested population on St. Paul and an unharvested population on St. 
George. As a result, the commercial harvest of seals ceased on St. 
George after 1972. Economically, the effect was to further diminish 
Federal employment on St. George. The decision was within the 
Secretary's authority and lent further support to the administration's 
declared policy of relocating the St. George islanders because of the 
relative inability of that remote island to support any kind of 
economy.
    ANCSA required the establishment of Regional and Village native 
corporations through which the claims of all entitled natives, 
including the Pribilovians, would be settled. The settlement included 
the distribution of 40 million acres of land throughout the State and 
the payment of $962,500,000.00 over an eleven-year period. Transfer of 
title for all ANCSA conveyances was made through the Department of the 
Interior, Bureau of Land Management (``BLM'').
    To comply with the village corporation provisions of ANCSA, the 
people of St. Paul established the Tanadgusix Corporation (``TDX'') 
while the people of St. George established the Tanaq Corporation. TDX 
received the right to select 138,240 acres of land in the Aleutians, 
Alaska Peninsula, and St. Paul. Ultimately, 113,000 acres conveyed to 
TDX. Tanaq received the right to select 115,200 acres. 106,000 acres 
were ultimately conveyed. A full discussion of remaining ANCSA land 
entitlements to be resolved is included in the statement and comments 
from the Department of Interior at Exhibit A.
    Under sections 1610(b), 1611(a) and 1613(a) of the ANCSA, 
conveyances to the native corporations were to include surface rights 
to the core township lands where each village was located. ANCSA also 
directed that subsurface rights be transferred to the regional 
corporations.13 On the Pribilof Islands,

[[Page 18321]]

these provisions created an immediate impasse to the pending transfer 
of the townsite under the 1966 Act. Under section 206 of the 1966 Act, 
the Federal Government was obligated to sell tracts of Federal property 
to Pribilovian individuals as part of the townsite concept. Under 
ANCSA, the Federal Government was directed to convey interim title to 
the townships and other lands to the native corporations at no cost. 
The corporations, in turn, were to transfer title to their 
shareholders. In both instances, the property to be transferred 
included government housing.
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    \13\ The regional corporation for both villages is the Aleut 
Corporation, currently ranked as the 32nd largest revenue generator 
in the State.
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    Faced with a choice of having residents purchase their own land and 
homes under the 1966 Act or receiving them at no cost under ANCSA, the 
City of St. Paul voted to take the property and houses through the 
ANCSA process. Meanwhile, the Department of Interior ruled that the 
townsite provisions of section 206 of the 1966 Act were preempted by 
the conveyance provisions of ANCSA.14
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    \14\ See Alaska District Council of the Assemblies of God, Inc., 
8 IBLA 153, 155 (Nov. 22, 1972), and opinion of February 5, 1975 
from the Regional Solicitor to the BLM State Director (attached as 
Exhibit 1).
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    Having resolved ANCSA as the appropriate mechanism for transfer, 
NMFS released the majority of property on St. George and St. Paul for 
corporate selection. Under section (3)(e) of ANCSA, the Federal 
Government was allowed to retain certain property necessary for its 
public mission. Accordingly, the Federal Government retained the fur 
seal rookeries and a number of facilities required for the continued 
administration of the Islands as a special reserve.
    Viewing ANCSA as a guarantee for a more prosperous and secure 
future on the Islands, the people found renewed vigor and support for 
their desire to remain on St. George and St. Paul. Recognizing the 
economic limitations of the ANCSA settlement, the Federal Government 
continued to encourage the voluntary relocation of St. Georgians to St. 
Paul and the voluntary migration of unemployed Pribilovians to mainland 
Alaska and the rest of the United States.
    The practical effect of ANCSA and its interplay with the 1966 Act 
was to establish six entities competing for limited resources on two 
remote islands. While opportunities for economic growth and self-
governance were promoted under both acts, the underlying tensions 
between the entities arising in subsequent disputes over money, 
facilities, land and land use would create as many problems as it 
resolved. That tension would prove to divide the community in enduring 
fashion, fostering attitudes that would ultimately diminish the bright 
prospect envisioned by the University of Alaska researchers in 1967. 
Ultimately, these tensions have affected the ability of the islands to 
self-govern efficiently and cooperatively.

F. The 1980s: Termination of Federal Responsibility

(1) The Fur Seal Act Amendments of 1983
    With the mechanisms for the transfer of land in place and 
operational under ANCSA, and systems of self-government established 
commensurate with ANCSA and the 1966 Act, the attention of Congress in 
the early eighties turned to the promotion of a self-sufficient and 
self-sustaining economy on the Pribilof Islands.
    Despite the programmatic decline of Federal involvement on the 
Islands, annual funding for the Pribilof program had doubled between 
1970 and 1982 to $6.3 million annually. Approximately 95 per cent of 
each year's funds were spent in support of social welfare programs. 
Recognizing the autonomy of the Pribilovian people and faced with tight 
budget constraints and an increasing national deficit, the 
Administration's 1983 budget proposed to phase-out Federal support on 
the Pribilofs over four years at a cost of $15.8 million.
    In a joint effort to derive a better solution than a slow phase-
out, the Secretary of Commerce and the Governor of Alaska formed a 
working group composed of State, Island and Federal representatives. At 
the first meeting of the work group, State and Island positions 
advocated that the Federal Government provide annual appropriations for 
5 more years at current levels. Recognizing that continued Federal 
appropriations for social welfare programs would do nothing to create a 
stable and self-sustaining economy on the Islands, the Administration 
proposed that one answer was to build upon the Pribilof's location in 
the midst of the Bering Sea fisheries. To capture this potential, the 
Secretary suggested the creation of a one-time $20 million trust to 
replace the annual appropriations for social welfare and support. 
Combined with a commitment by the State to construct harbors on both 
Islands, the trust would give the Pribilovians the resources needed to 
make the transition to a self-sustaining economy. In addition, the 
Secretary proposed the transfer of previously exempt ANCSA properties. 
15
---------------------------------------------------------------------------

    \15\ Under the proposal, responsibility for commercial harvest 
of the fur seal remained with the Federal government; subsistence 
harvest, however, would continue to be allowed.
---------------------------------------------------------------------------

    During subsequent meetings, the Administration advanced its 
proposal. The State responded by supporting harbor construction on both 
Islands. The State also expressed its willingness to assume normal 
State functions related to transportation and community services, 
including the provision of schools and educational services and 
responsibility for airport services. (The State's commitments along 
these lines are articulated in correspondence dated May 11, 1982 and 
September 28, 1982 from Governor Hammond to Administrator Calio, and in 
a Memorandum of Understanding signed by the State dated February 10, 
1984. All of these documents are attached at Exhibit 2.)
    Over the course of the next several months, the Administration 
worked with State and Island leaders to develop a Memorandum of Intent 
(``MOI'') describing the concept of a phase-out linked to the Federal 
trust appropriation, the transfer of Federal property and State 
assistance for the construction of a harbor on each Island. Under the 
MOI, all parties acknowledged that the United States desired to 
terminate Federal program funding on the Pribilofs under Title II of 
the Fur Seal Act (``FSA'') while at the same time maintaining its 
Treaty obligations under Title I. (A copy of the MOI is attached as 
Exhibit 3.) To ensure that there was no misunderstanding about the 
intent of the United States to terminate all Title II Federal 
responsibility on the Islands, the MOI and a letter carefully 
explaining the Administration's position were sent to every household 
on the islands. (A copy of the letter is attached as Exhibit 4).
    As a result of negotiations and consultation conducted within the 
framework of the MOI, the Administration set forth in draft legislation 
its proposal to provide for the orderly termination of Federal 
management of the Islands. The bill, H.R. 2840, was based on 
legislation presented in the House of Representatives on April 28, 
1983. It was supported by all of the parties affected by it.
    Recognizing the need to bifurcate responsibility for the provision 
of socio-economic welfare development under Title II of the Act from 
NOAA's responsibility for protection and conservation of the fur seal 
under Title

[[Page 18322]]

I, then NOAA Deputy Administrator Anthony Calio testified to the 
Committee on Merchant Marine and Fisheries that:

    The principal purpose of amending the Fur Seal Act is to end 
Federal administration, as you have indicated, in the Pribilof 
Islands, while continuing to fulfill the obligation of the United 
States under the Interim Convention on the Conservation of North 
Pacific Fur Seals * * * I believe that the conceptual basis of these 
amendments is sound and that the time is ripe for the islands to 
become independent of Federal control * * * If the funds are 
appropriated, the Department of Commerce will seek no further funds 
for the Pribilofs other than those needed to maintain an adequate 
research and conservation program and to implement the Fur Seal 
Convention.16
---------------------------------------------------------------------------

    \16\ Hearings Before the Subcommittee on Fisheries and Wildlife 
Conservation and the Environment of the Committee on Merchant Marine 
and Fisheries--Pribilof Islands, H.R. 2840, 98th Congress, House of 
Representatives, May 19, 1983, pp. 260-263.
---------------------------------------------------------------------------

    From the outset, it was the Administration's position that the one-
time trust appropriation be used solely to replace social welfare and 
support services on the Islands and that the success of the proposal 
was contingent on the commitment by the State for harbor development. 
This position was shared by all negotiating entities. The ANCSA village 
corporations and the governing entities of both Islands, together with 
the Department of Commerce, agreed in the 1983 MOI that:

    * * * the State of Alaska's appropriation of the monies 
necessary to construct boat harbors on St. Paul and St. George 
Islands and the State's assumption of the responsibilities for 
airports, roads, and other facilities upon the Islands in accordance 
with applicable laws and regulations is an indispensable 
contribution to achieving the goal of self-sufficiency on the 
Pribilofs.

    And, as stated by NOAA during Congressional hearings on the 
proposed 1983 amendments:

    * * * $20 million was proposed in addition to the $6.5 million 
available for fiscal year 1983. We estimate that $4 million is 
needed annually to provide for basic community needs on both Islands 
during the transition to a self reliant economy. Assuming that the 
$20 million is placed in an interest bearing account, the 
appropriation should last 5-7 years. We thought this would be ample 
time to develop a new economic base.17
---------------------------------------------------------------------------

    \17\ Ibid. At 290.
---------------------------------------------------------------------------

    In response to questions raised during those hearings about whether 
the $20 million would be used for the development of the harbor 
facilities, former NOAA Administrator Anthony Calio stated that:

    The purpose of the $20 million was to try to provide some sort 
of independence for the islanders, to provide them with some capital 
to pay their current expenses and for future development. We would 
not try to constrain the use of those funds in any way as far as the 
executive branch is concerned. It is essentially a capital fund for 
their own use. If they feel that in their best interest that is the 
way to utilize that money, we would not put a constraint on it. We 
feel that this should not be done, however.18
---------------------------------------------------------------------------

    \18\ Ibid. at 273.

    Legal counsel for St. Paul Island concurred with this position. 
Responding to a question concerning use of the trust money for the 
---------------------------------------------------------------------------
harbor during the hearings, Attorney Tony Smith stated:

    It is our expectation that the $20 million will be used in other 
areas, not for the harbor. We have done a careful analysis of just 
maintaining the utilities on the island, and on St. Paul it is going 
to cost, as best we can determine, about $2.9 million a year during 
the transition to maintain the sewer, water, light, power, and 
essentially the airport, the roads, the infrastructure. Our analysis 
indicates $4.1 million on both islands * * * [The Bill] does not 
preclude it [use of the trust for harbor construction], but one of 
our concerns * * * is that the infrastructure and the harbor both 
need to proceed down parallel tracks. I am very concerned about an 
effort to take part of the $20 million to construct the harbor * * *
    St. Paul's intention is to maintain the infrastructure and get 
the harbor completed, and we have figured out how to do that with a 
State appropriation and to have those two run parallel. And 
hopefully 3 to 4 years down the road we will have a viable, robust 
entrepreneurial endeavor.19

    \19\ Ibid. at 335.
---------------------------------------------------------------------------

    As pointed out by the State during the hearings, development of the 
harbors was decidedly in the best interests of the State. As stated by 
the Deputy Director of the Alaska's Division of Community Planning:

    This is an internationally significant fishery, as you know, and 
studies done by the State Department of Commerce confirm that those 
two harbors could have the linchpin [sic] of a very successful 
fishing industry in the Bering Sea.20

    \20\ Ibid. at 299.
---------------------------------------------------------------------------

    As conceived by engineering firms hired by the islands to consult 
on the project, construction of the harbors was to be accomplished in 
three phases. Phase I consisted of the building of breakwaters and a 
wharf on each island. Phase II consisted of the development of on-shore 
processors. Phase III consisted of on-going harbor improvements. 
Estimates of the amount of time to complete the projects ranged from 
the conservative (8 years) to the optimistic (3-4 years).
    As initially presented, the consultants' estimates for construction 
of the two harbors was in the range of $24 to $30 million. By the time 
of the hearings, the State had already appropriated and committed $7 
million. That money was used to start construction of the Phase I 
breakwaters. In addition, the State, through the subsequent 
administration, had submitted a budget request for an additional $10.4 
million.
    During the hearings, it was the State's position that any shortfall 
between the money they were able to obtain and what was needed would 
have to be borne by Federal or private sources. Responding to the 
State's position, John Phillips, Special Assistant to Administrator 
Calio, stated that when the engineering firms learned of the State 
funding limit, their plans had been modified and that even at the $17 
million level, harbor completion to Phase I was obtainable. The harbor 
consultants also expressed their opinion that once the Phase I 
breakwaters were built, private investors would be drawn to the islands 
and would prove to be a ready source of private funding for Phase II 
and Phase III on-shore development and improvements. In support of this 
assumption, they cited private willingness to invest in the development 
of fisheries resources which had been achieved at Dutch Harbor and 
Akutan, areas considerably more limited in terms of resource proximity.
    Satisfied that the State's initial commitment and emerging private 
investment would support harbor development, and that the one-time 
federally funded trust would be used for infrastructure, the Fur Seal 
Act Amendments of 1983 (``the 1983 Act'') 21 was enacted. 
Under the 1983 Act, the Department of Commerce's responsibilities with 
regard to the Islands were limited to (1) Establishing the one-time 
trust (``the Trust'') to be administered by a non-government trustee in 
order to promote the development of a stable, self-sufficient, enduring 
and diversified economy not dependent on sealing (section 1166); (2) 
transferring formerly withheld Federal property to Island entities 
under a Transfer of Property Agreement (``TOPA'') (section 1165); (3) 
continuing to administer retirement benefits (section 1168), and (4) 
continuing management of the rookeries to ensure compliance with the 
Fur Seal Convention (Title I and section 1161). The State was given 
responsibility for providing standard educational needs (section 1163) 
and the Secretary of Health and Human Services was given

[[Page 18323]]

responsibility for providing medical and dental services (section 
1164).
---------------------------------------------------------------------------

    \21\ 16 U.S.C. 1161 et seq.
---------------------------------------------------------------------------

    A Master Trust Agreement under the 1983 Act was signed on November 
21, 1983. Separate trusts for St. Paul and St. George were established 
on March 14, 1984 and March 27, 1984, respectively. In accordance with 
his authority, and at the request of people of St. George, the Trust 
was divided into two portions. Using a formula devised by the 
Secretary, $12 million was allotted St. Paul, $8 million to St. George.
    Faced with declining oil revenues in 1985, the Sheffield 
administration was ultimately unable to secure the requested $10.4 
million it sought to finish the harbors. As a result, despite previous 
commitments, no more than the original $7 million was invested by the 
State in harbor development in the first five critical years of the 
final phase-out.
(2) Harbor Development and Emerging Economies
    (a) St. Paul. Using a significant portion of the $7 million 
appropriated by the State, St. Paul was able to complete their Phase I 
project. The result was construction of a 750 foot breakwater and 200 
foot dock by 1986. Over time, the breakwater was susceptible to damage 
from overtopping during winter storms. With no available State funding 
for harbor improvements, the City turned to the Army Corps of 
Engineers. Taking advantage of the newly enacted Water Resources 
Development Act (WRDA),22 the City in 1986 applied for 
authorization to construct a larger harbor. Their request relied on a 
1979 Corps navigability feasibility study that recommended an 1800 foot 
breakwater, a 900 foot dock, and a channel dredged to 23 feet below 
mean low water. Once completed, the harbor would accommodate nine to 
ten 100-foot crab vessels.
---------------------------------------------------------------------------

    \22\ Public Law 99-662, enacted November 17, 1986.
---------------------------------------------------------------------------

    The City's request for the harbor was approved under section 204(e) 
of WRDA in June of 1988. Following minor modifications to the General 
Design Memorandum, the total Federal share for the project in 1989 was 
$19,635,200. The City of St. Paul was able to secure matching funds 
through State appropriations and local investment. Meanwhile, in 1986, 
St. Paul's trustee had begun Phase II processing initiatives by 
contacting major seafood processors and seeking their investment in a 
diversified fish processing capability. As a result of the trustee's 
efforts, St. Paul had drawn four seafood processors to its shores by 
1994.
    In addition to ensuring the harbor project under WRDA, the City 
undertook maintenance of infrastructure needs of St. Paul as envisioned 
by the 1983 Act. They also assumed responsibility for a number of 
other, non-traditional municipal roles including providing utilities, 
selling bulk and marine fuel, and operating a snack and gift shop. In 
the late eighties, as a result of committing trust funds to harbor 
development following the State's inability to appropriate monies, St. 
Paul requested supplemental trust appropriations totaling approximately 
$3 million. These funds were used to support City infrastructure needs.
    While the City solidified its responsibilities for trust-related 
municipal ventures, TDX was able to expand their investments with 
outside companies. As a result, TDX built their own 300 foot dock, 
leased facilities and land to the processors, and developed a crab-pot 
storage facility. They also pursued numerous off-island ventures 
including development of hotels in Anchorage and Seattle.
    The Corps of Engineers Harbor project was completed in 1990. By 
1995, St. Paul had grown to become the number two fishing port in 
Alaska. As reflected in shared fisheries and fisheries landing taxes 
and fees in the State, St. Paul is second only to Unalaska in 
generating revenues. It is also the primary crab processing location in 
the Bering Sea.
    (b) St. George. With ANCSA and the 1983 Act bolstering their intent 
to sustain a foothold in the Bering Sea, the City of St. George 
incorporated as a second class city on September 13, 1983. Acting 
expeditiously, they obtained State approval and initial funding to 
construct a State harbor in 1984. Despite their ambition, they 
ultimately received little State support. In 1985, their State grant of 
$3 million for harbor development was reduced to $1 million as a result 
of budget cuts. To meet ongoing dredging demands, the City of St. 
George followed St. Paul's lead and immediately requested assistance 
from the Army Corps of Engineers. Because the City of St. George was 
unable to raise local or state matching funds, no Army Corps projects 
could commence. In 1986, unanticipated site conditions led to the 
default of a State recommended harbor contractor and the City had to 
take over as general contractor. By 1987, the breakwaters were still 
not complete and winter storms threatened much of the existing 
structure. That same year the State notified the City that no further 
State funding would be appropriated before 1989.
    In 1988, Army Corps of Engineers dredging assistance of $4 million 
was finally approved. To raise matching funds, the City issued general 
obligation bonds in the amount of $3 million, sold $1.2 million of 
municipal and construction equipment and borrowed $700,000 from the 
Tanaq Corporation. In 1989, with dredging underway, All Alaska Seafoods 
Company committed to process on a floating fish-processing plant in the 
harbor when dredging was completed. Ultimately, dredging delays in the 
narrow channel prevented startup. Meanwhile, local fisheries-related 
businesses failed as a result of limited markets and lack of fisheries 
infrastructure.
    With its Trust nearly depleted, the City of St. George in 1988 
requested a $3.7 million authorization from Congress for basic human 
needs assistance. They received $1.1 million. In 1990, they requested 
$2.6 million. As they requested the second appropriation, the City was 
contemplating permanent closure based on significant debt. Their 
request explained that their harbor was set to support self-sufficiency 
by 1992. Today, the inhospitable shoreline and inclement weather of the 
island continues to contribute to the inability of St. George to 
complete their harbor.
    By 1990, the St. George Trust was nearly depleted. Efforts to 
attract private industry to the remote island had failed, and the City 
has since survived solely through ongoing funding through State and 
Federal construction projects. As stated by Peter Hocson, the trustee 
for the St. George trust, in his 1988 annual report to former 
Administrator Calio:

    The single obstacle standing in the way of a self-sustaining 
economy, as envisioned by the Fur Seal Amendment Act of 1983, is the 
lack of the State of Alaska's funding to complete the boat harbor.

    In 1993, the Army Corps of Engineers contributed an additional $3 
million to conduct in-blasting and dredging operations designed to 
secure the harbor. Together with the $8 million trust allocation, the 
$3 million supplemental needs trust appropriations, the initial Army 
Corps of Engineers investment of $4 million and a $1 million facilities 
upgrade appropriation, a conservative estimate of the Federal 
Government's contribution to St. George's economy since 1983 totals $19 
million.

III. The Cities Today

(A) St. Paul

    As the continued growth of the harbor brought increasing prosperity 
to St. Paul, it also made the resources required

[[Page 18324]]

for a sustained economy more scarce and valuable. The unfortunate 
result was that the relationship between the City of St. Paul and TDX 
Corporation grew increasingly adversarial. Having assumed 
responsibility for so many daily activities through administration of 
trust related activities, the City's need for land, particularly 
harbor-side, grew. Under ANCSA, ownership and control of available 
lands vested with TDX. Frustrated by their inability to obtain lands 
from TDX, the City brought a law suit against TDX in 1985 challenging 
the distribution of property under section 14(c) of ANCSA. Settlement 
was achieved in three years.23
---------------------------------------------------------------------------

    \23\ The City filed suit on November 21, 1996 against the 
Secretary of Commerce and Under Secretary of NOAA to abrogate that 
agreement, as well as transfer decisions reached under the 1983 ACT 
TOPA. TDX joined the dispute in a parallel proceeding against the 
Secretary and Under Secretary filed December 20, 1996. Copies of the 
Complaints in each case are attached as Exhibits 5(a) and 5(b).
---------------------------------------------------------------------------

    Continually deadlocked in similar disputes over terms and 
conditions of land use, TDX and the City have historically blocked each 
other from or delayed each other's goals. Today, the continued and 
heightened inability of island leaders to share their island's 
resources and to work cooperatively has created an atmosphere of 
mistrust and divisiveness. During testimony taken on St. Paul in 
preparation for this Report, St. Paul citizens repeatedly informed 
Commerce personnel that the City's single-minded focus on harbor 
construction, TDX's unwillingness to make land and property available 
to its shareholders, and the two entities inability to get along as the 
source of much resentment and frustration.
    In oral statements made for purposes of this Report, St. Paul 
citizens and shareholders of TDX referred to incidents of intimidation, 
bullying and coercion by TDX officers to influence land dispute 
settlement and shareholder proxy votes. Several local citizens and one 
TDX representative stated that TDX would not sell any land to local 
citizens, and that land use and business development was available only 
through leases with TDX. The leases set rental rates on par with those 
of industrial properties surrounding the Anchorage Airport. They also 
included provisions for mandatory building development and improvements 
to be relinquished without compensation at expiration of the lease. 
Faced with these terms, local entrepreneurs wait for more reasonable 
leases of limited government properties. As a result, the local, small 
business economy is effectively chilled by the citizen's own village 
corporation. Without these opportunities, unemployment persists and the 
costs of goods and services from off-island remain high.24
---------------------------------------------------------------------------

    \24\ Evidence of these attitudes is reflected in the TDX 
newsletter attached as Exhibit 6 which was distributed to all 
shareholders and ultimately dispersed across the small island.
---------------------------------------------------------------------------

    Finally, St. Paul is also experiencing the effects of imported 
labor within its local infrastructure. Local residents allege that they 
were promised management positions and as a result have refused to work 
any front line positions. As a result, vacancies at the processing 
facilities have been filled by workers from Asia and the Phillipines. 
This foreign labor pool is housed and fed aboard the processors. 
Overall, they contribute relatively little to the economy.
    Despite these difficulties, evidence of St. Paul's commercial 
success is readily apparent. The City's annual operating budget is 
roughly $18 million. According to 1990 Census Bureau information, the 
median income per family is $49,900.00. The average income as of 1994 
was $34,000.00. In the words of St. Paul's former City Manager, success 
has outstripped all expectations. In a letter to Trustee Jay Gage at 
the termination of the St. Paul Trust, the City Manager and Trust 
Advisor wrote:

    * * * [W]e wish to * * * put in the record our acknowledgment 
and gratitude for your service to St. Paul. In retrospect, had it 
not been for your foresight and fortitude in administering the St. 
Paul Trust, we may not have the robust economy we have today. 
Through your wisdom, you directed most of the Trust funds towards 
establishing a port on St. Paul while assuring that our people did 
not endure undue economic hardship.
    In short, you have accomplished your mission to assist St. Paul 
Aleuts achieve [sic] economic independence and diversification away 
from seal harvesting above and beyond anyone's expectations. Indeed, 
what you have accomplished is nothing short of an economic miracle, 
considering that this was all done in less than half a generation 
under very adverse circumstances.

(A copy of the City Manager's letter is attached as Exhibit 7)

    Increased activity in the harbor and the expanse of the Bering Sea 
fishery has prompted the City to explore additional international 
markets. They now seek to establish a Free Trade Zone, and look forward 
to continued harbor improvements through the Army Corp of Engineers. 
Toward this end, and as a result of unprecedented growth, a second 
Corps feasibility study was commissioned in 1995. That report caused 
Congress in September, 1996 to authorize an additional $18.9 million to 
modify and improve the harbor.
    Together with the previous $19 million commitment, the $12 million 
trust portion under the 1983 Act, the $1 million share of funding for 
facilities improvements in 1984, and the $3 million in supplemental 
needs appropriations granted the trust in the mid-eighties, a 
conservative estimate of the total Federal contribution to St. Paul's 
economy since 1983 totals nearly $55 million.
    While the last five years have seen a growth in the economy of St. 
Paul, they have also seen a decline in fur seals, harbor seals, sea 
lions and several species of sea birds throughout the 
Pribilofs.25 These declines are particularly alarming on St. 
Paul because of the possibility of cumulative effects brought to bear 
by rigorous weather conditions, increased opportunity for oil spills, 
general marine disturbance, rodent introduction, and effluent 
discharges of fish processing wastes. The fur seals are currently 
listed as a depleted species under the Marine Mammal Protection Act 
(``MMPA'') and the red-legged kittiwake, whose population has declined 
to 40-50 per cent of its 1970 level and is being considered for listing 
under the Endangered Species Act (``ESA''). Roughly 80 per cent of the 
world's population of each of these species make their home on the 
Pribilof Islands. Together with the myriad of other wildlife species 
that inhabit the Islands, they are the primary reason the Islands are 
referred to as ``the Galapagos of the North.''
---------------------------------------------------------------------------

    \25\ See Final Conservation Plan for the northern fur seal 
(Callorhinus ursinus), prepared by the National Marine Mammal 
Laboratory/Alaska Fisheries Science Center for the National Marine 
Fisheries Service, 1993.
---------------------------------------------------------------------------

(B) St. George

    While St. Paul has grown and prospered, St. George has struggled. 
The Island's rugged topography and foggy climate have effectively 
frustrated the provision of goods and services since Russian 
occupation. Possessing no natural geography to accommodate a harbor, 
shipments by sea have traditionally been limited. Mail service by air 
proved equally confounding, and in the 50s and 60s was limited to air 
drops due to the risks associated with aircraft landing. Modern 
technology has brought only minor advances and treacherous island 
conditions continue to contribute to the difficulties of establishing 
an independent economy. In November, 1996, after a $6 million State 
investment in runway expansion, the FAA ruled the Island's airstrip too 
dangerous to permit any plane larger than a six-seater Piper Navajo to 
land.

[[Page 18325]]

    With no protective shoreline, St. George's harbor continuously 
requires major dredging and expansion to fend off the inhospitable and 
over-powering Bering Sea. Despite assurances that their harbor would 
reach sufficiency and provide a self-sustaining economy by 1992, the 
ongoing need for harbor dredging and improvement has instead compounded 
existing debt. To complete 1994 dredging and harbor improvements, the 
City sold revenue bonds in the amount of $865,000.00. In addition, the 
City was forced to draw down its surplus cash, thereby resulting in a 
working capital deficiency. To meet their debts, the City has budgeted 
reductions in its work force, deferred building maintenance, and 
reduced engineering, legal and travel expenses.26
---------------------------------------------------------------------------

    \26\ Additional liabilities associated with the harbor's 
development include delays from inclement weather and unforeseen 
site conditions. In the late eighties, the City was named a third 
party defendant in a law suit brought by a dredging contractor 
against the Army Corps for increased costs associated with 
unforeseen site conditions. The contractor prevailed and was granted 
a judgement of $1,095,187 for which the Corps now seeks contribution 
from the City.
---------------------------------------------------------------------------

    Having significantly extended its debt, St. George faces an 
uncertain economic future. Faced with the need for substantial ongoing, 
sustained improvements the St. George harbor remains effectively 
unfinished and without significant draw to shore-side fish processors. 
As a result, the City continues to need supplemental infrastructure and 
human needs assistance.
    At the close of 1994, the City's long-term debt was assessed at 
$3,081,039. By the start of the year 2000, it is estimated that 
$2,802,877 will still be required to clear the City's debt. As stated 
in an independent auditor's report dated May 18, 1995:

    * * * the City experienced significant costs in excess of grant 
revenues in the construction of its harbor dredging and improvement 
project in prior years causing a working capital deficiency, which 
raises substantial doubt about its ability to continue as a going 
concern.27
---------------------------------------------------------------------------

    \27\ Undependent Auditor's Report: City of St. George prepared 
by Mikunda, Cottrell & Co., C.P.A., May 18, 1995.
---------------------------------------------------------------------------

IV. The Claims Asserted

    The Statements of the State of Alaska and the Department of 
Interior required under Public Law 104-91 are attached at Exhibit A. In 
addition, the Department of Interior has included its request for 
resolution of the Terms and Conditions of its agreement with the 
Islands under the Migratory Bird Treaty Act. That claim is included as 
part of Interior's submission at Exhibit A.
    A copy of all local entity and resident statements of claims is 
attached as Exhibit B. The process for collecting the statements is 
described in section (I) below. The essence of the information 
submitted as claims by local entities and residents may not necessarily 
be rights that are enforceable in court but, in some instances can be 
more appropriately described as assertions that are inherently 
equitable and arise out of the past intergovernmental relationship. The 
claims are what the Pribilovians expect from the Federal Government to 
resolve alleged harms caused as a result of the United States history 
with the Pribilovian people.
    We do not interpret P.L. 104-91 as raising a claims process of 
potential lawsuits against the United States. Nevertheless, this is the 
tenor that was created throughout the process based on the nature and 
form of claims submitted. Accordingly, what follows is a general 
outline of the types of claims raised by the Pribilovians and the 
Department's response. In some cases, the Department has determined 
that no further action is necessary and in others, the Department makes 
specific recommendations.
    Given the magnitude and nature of submissions, an individual 
response to each of the over 85 claims was not possible. To focus and 
present the Report, local entity and resident claims have been 
categorized according to eight broad areas of concern. A summary of the 
statement of claims is attached as Exhibit 8. The categories of claims 
are: continued economic growth, failed transition, real property, trust 
issues, fisheries issues, retirement issues, seals/rookeries issues, 
environmental cleanup issues, and P.L.104-91 process issues. 
Submissions were also received regarding health care and the settlement 
reached under the Fair and Honorable Dealings Act case for past 
injustices. Because these areas are outside of the Secretary's 
authority, these issues are not addressed in this Report, but have been 
referred to the appropriate agency for their review.
    Some of the claims submitted seek specific performance; the 
majority seek monetary damages. Conservative estimates of the total 
claims is roughly $500 million. During an October, 1996 public meeting 
to summarize the claims, Island spokespersons indicated that ``amount 
to be determined claims'' would likely bring the total to $1 billion.
    In the sections below, each category of claim is generally 
described, followed by a description of federal activities related to 
the claims and the Secretary's response and recommendations. Where 
applicable, relevant and applicable laws and regulations are provided, 
together with a discussion of the Agency's implementation of the law.

(A) Continued Economic Growth

    These claims relate to assertions that the U.S. Government has an 
ongoing obligation to ensure the sustained and economic growth of the 
Pribilovian people. They include claims for past expenses incurred as 
their economy grew (building renovations, upgrades and construction, 
housing repairs), as well claims for current costs of maintaining homes 
and the municipal infrastructure.
    The Secretary has undertaken an analyses of his responsibilities 
under Title II of the 1983 Act and has concluded that no ongoing 
obligations of the Secretary exist which would direct the Secretary to 
seek appropriations for these collective claims. As discussed in 
Section III, the $20 million trust established under the 1983 Act was a 
one-time payment to ``promote,'' not guarantee, an independent economy 
on the Pribilof Islands. The trust funds were to be used to cover 
infrastructure expenses (income maintenance, human needs and municipal 
services) for approximately 5-7 years as harbor development was pursued 
by the State. Accordingly, it is the opinion of the Secretary that 
requests for reimbursement of costs associated with successful 
municipal growth are without merit.
    Because housing repair and municipal infrastructure costs account 
for the majority of the ``Continued Economic Growth'' claims asserted, 
they are discussed in greater detail below.
(1) Housing
    These claims raise the assertion that the U.S. Government promised 
to repair, or has an inherent obligation to repair, all homes conveyed 
to the Pribilovian people under ANCSA and the 1983 Act.
    Under the 1966 Act, townsite properties on St. Paul were to be 
purchased by local residents according to a patent issued by the 
Secretary (see section III(E)). During discussions with the City of St. 
Paul regarding the transfers in 1971, NOAA stated its policy that it 
would be incumbent upon the Aleut residents purchasing the homes to 
provide for their continued repair and maintenance. NOAA's policy 
reflected the intent of Congress that the autonomy of the Pribilovian 
people include paying for goods and services previously provided by the 
government. The City's ``Community Development Plan of 1971'' prepared 
and distributed

[[Page 18326]]

later that year includes a statement articulating NOAA's position.
    Ultimately, the transfer of homes was accomplished under the terms 
of ANCSA. During negotiations with the TDX and Tanaq Corporations in 
1974 regarding the transfer of property under ANCSA, NOAA agreed to 
make major repairs to five houses on St. Paul and three on St. George. 
Additionally, NOAA agreed to make minor repairs to all houses on both 
islands on a priority basis. The provisions for minor repair are 
contained in a December 22, 1976, Memorandum of Understanding (``MOU'') 
between TDX, Tanaq and the Department of Commerce/NOAA. (A copy of the 
MOU is attached as Exhibit 9).
    Pursuant to the agreement, NOAA agreed to be responsible for 
exterior water leaks, storm windows, means of ingress and egress in the 
event of fire, broken or leaky fixtures, the satisfactory operation of 
heating units, ventilation, electrical outlets, structural integrity, 
cabinetry, and insulation. Areas outside NOAA's responsibility included 
remodeling, additions, floor coverings, painting, tile repair and the 
finishing of basements. Repair of houses pursuant to the MOU was 
completed in 1977.
    The policy of Pribilovian responsibility for home repair and 
maintenance was announced again by NOAA in a letter to island leaders 
on April 22, 1976. (A copy of the letter is attached as Exhibit 10). 
Citing the MOU, the letter states that:

    The Government will not be responsible for repairs and 
maintenance on the houses and other quarters except as noted above 
after interim title is granted. In the future there will be a need 
and desire to repair, remodel and build homes. The Government does 
not intend to act as wholesale or retail supplier nor as contractor 
for construction and repair of private homes. We are suggesting that 
these functions would be better handled by some individuals or the 
Corporations who may wish to set up home construction and building-
supply businesses such as are available in most other communities. 
We believe this would be the best way to meet this future need for 
both communities.
(2) Code Compliance and Facilities Upgrades
    During the State, Federal and local working group meetings held in 
1983 to formulate a plan for phase-out under the 1983 Act, NOAA and the 
State discussed the need to bring Federal facilities up to code prior 
to transfer. Based on requirements set out in a facilities report 
prepared by the State in 1982, NOAA spent 1983 Pribilof Island Program 
funds to correct minor fire and safety deficiencies which brought the 
facilities up to code.
    On August 22, 1984, President Reagan signed H.R. 6040, the 
Supplemental Appropriations Bill for fiscal year 1984. The bill 
appropriated $2 million to NOAA to upgrade Federal property prior to 
transfer under the 1983 Act. In the interests of equity, Administrator 
Calio decided that the $2 million would be split equally between the 
two islands. During subsequent discussions with State and local 
entities regarding funding of future upgrades, all entities agreed that 
it was incumbent on the State and local government to seek additional 
funding to upgrade facilities. The State's commitment is reflected in a 
report to then Governor Sheffield summarizing discussions about use of 
the $2 million appropriation 28 Department of Transportation 
estimates of required funding to upgrade facilities on St. Paul and St. 
George at that time were $6.5 million and $4.8 million, respectively.
---------------------------------------------------------------------------

    \28\ The report is attached as Exhibit 11.
---------------------------------------------------------------------------

    To make the best use of the immediately available Federal funds, 
the Cities of St. George and St. Paul were asked to prepare priority 
lists of upgrade projects. These lists were submitted to NOAA in early 
October, 1984. St. Paul's initial list reflected long-term capital 
improvements designed to accommodate the Cities impending growth. Its 
upgrades list included improvements to the airport and the expansion of 
existing sewer, electrical and water distribution systems. The 
accompanying report included an analysis of multiple funding sources 
including grants, loans and private investment. The City's estimate of 
total expenditures required approximated $50 million. St. George's 
original upgrades list reflected improvements to existing structures 
based on current needs. The St. George project list totaled 
approximately $2 million.
    During meetings over the following two weeks, priority projects 
obligating $1million per island were chosen for funding through 
cooperative agreements. Financial assistance awards under the 
agreements were issued October 26, 1984.
    It is the Secretary's position that the 1983 Act trust and transfer 
of property constituted the entirety of the Federal government's 
responsibility to promote and foster an enduring economy on the 
Pribilof Islands under the Fur Seal Act. The Secretary finds no 
additional law, regulation, agreement or implied duty to continue the 
repair and maintenance of homes or facilities on the Pribilof Islands.

(B) Failed Transition

    These claims assert that the transition from a sealing-based 
economy to one independent of sealing has failed as a result of 
improper or insufficient government support during phase-out. Examples 
of claims include assertions that the Federal Government defaulted on 
harbor construction, that the government caused undue economic and 
social hardship by infringing on Pribilovian rights to engage in 
commercial harvest of seals during transition, that the government 
failed to provide income maintenance through the period of transition, 
and that the Department failed to properly administer the transition.
    It is the opinion of the Secretary that the trust served its 
purpose to St. Paul most effectively. Accordingly, it is the opinion of 
the Secretary that the transition of the City of St. Paul to an 
independent economy has been successful and that any claims to the 
contrary are without sufficient basis.
    Section 1166(d) of the 1983 Act provided that the trust authorized 
could be divided based on the goals and objectives of the Pribilovian 
people. That split was not mandatory, but was chosen by the people of 
St. George despite practical realities and evidence that a self-
sustained existence was practically impossible given the island's harsh 
climate and inhospitable geography.
    Evidence indicates that the establishment of a self-sustaining 
economy on St. George is an unrealistic venture. It is the Secretary's 
opinion that an in-depth evaluation of the possibility of achieving 
self-sufficiency is warranted with regard to the Island, but is beyond 
the scope of this Report. Accordingly, the Secretary recommends that an 
independent economic and cost analysis be undertaken to assess the 
viability of continued public support.

(C) Real Property Claims

    These claims relate to the distribution of real property under 
ANCSA, the 1983 Act and accompanying TOPA and subsequent private 
agreements between entities redistributing their allotments. In sum, 
the claims collectively seek a complete redistribution of property 
amounting to a total abrogation of all that has been accomplished under 
pre-existing legislation and associated agreements. It is the 
Secretary's opinion that the real property transfers required have 
been, or are being, fulfilled in accordance with law and that the real 
property claims are without merit. The

[[Page 18327]]

history and status of land transfers on the Pribilof Islands by the 
federal government follows.
    A Memorandum of Understanding (MOU) dated December 22, 1976, by and 
among NOAA, on behalf of the Department of Commerce, St. George Tanaq 
Corporation, and Tanadgusix Corporation, was instituted to resolve 
conflicts concerning land ownership on the Pribilof Islands, under 
ANCSA. The MOU identified 47 tracts of land to be retained in federal 
ownership by the Department on the islands of St. Paul and St. George. 
Page 3, paragraph (1) of the MOU identified these tracts as ``* * * 
land and any improvements thereon to be retained in fee simple by the 
Federal Government as the smallest practicable tracts enclosing land 
actually used in connection with the administration of a Federal 
installation, within the meaning of Sec. 3(e)(1) of ANCSA, 43 U.S.C. 
1602(e)(1).'' The MOU thereby constituted a Section 3(e) determination 
of the Department of Interior, as defined by ANCSA, designating federal 
lands withdrawn from selection under ANCSA, to be retained by the 
Department of the Commerce.
    Section 205(a) of the 1983 Act authorizes the Secretary of Commerce 
to transfer real and personal property held by the Department of 
Commerce on the Pribilof Islands, ``[p]rovided, [t]hat such property is 
specified in a document entitled `Transfer of Property on the Pribilof 
Islands: Descriptions, Terms and Conditions,' . . . .'' (Emphasis in 
original.) Section 205(b) further sets forth the contents of the TOPA.
    Under authority of the 1983 Act, negotiations were conducted and 
agreement was reached between the Department of Commerce, the 
Tanadgusix and St. George Tanaq Corporations, the City of St. Paul, the 
City of St. George, the Aleut Community of St. Paul, the Aleut 
Community of St. George and the State of Alaska on properties 
previously retained by the Department of Commerce under ANCSA to be 
transferred by the Secretary to the other parties. The TOPA was 
executed on February 10, 1984.
    To date, nearly all of the transfers specified in the TOPA for 
properties on the Island of St. George have taken place. Actual 
transfer of title to the properties was performed through the 
Department of the Interior's Bureau of Land Management (BLM). The 
transfers were effected through BLM based on that agency's experience 
in conveying Federal lands under ANCSA and its resources, including 
surveying, available for the job.
    Most of the parcels on the Island of St. Paul to be transferred 
under the TOPA were surveyed by the BLM in 1983. Additional survey work 
was conducted by BLM in 1993 and 1994. However, the legal descriptions 
of some of the properties are not yet adequate for transfer to occur 
and some additional survey work may be required in 1997 to complete the 
descriptions.
    The Department will continue to work with the Alaska office of BLM 
in Anchorage in order to effect the conveyance of title to the native, 
municipal and state entities on St. Paul as expeditiously as possible, 
in fulfillment of the TOPA.
    Section 205(d) of the 1983 Act requires that, within sixty (60) 
days of the transfer of property under TOPA, the Secretary transmit a 
report to the appropriate Senate and House committees stating the fair 
market value of the real and personal property conveyed, as of the date 
of conveyance. The Department will timely request that the General 
Services Administration, or a contractor qualified to provide property 
appraisals, perform a property valuation survey of the St. Paul 
property to be transferred, to ensure that the fair market value report 
will be ready for transmittal to the Congressional committees within 
the 60-day deadline.

(D) The Trust

    These claims relate to assertions that the 1983 Act trust was 
insufficient, improperly administered, misused or generally 
misunderstood. It is the opinion of the Secretary that the trust 
responsibilities set forth in the 1983 Act were properly executed by 
NOAA, that the trust purposes were effectively met with the funds 
appropriated, and that all steps were taken to ensure that the trust 
was fully understood by the Pribilovian communities. Accordingly, it is 
the opinion of the Secretary that all allegations suggesting that the 
trust was misused or poorly administered by the government are without 
merit.
    The 1983 Act created a $20 million trust (``the Trust'') to ``-- 
promote the development of a stable, self-sufficient enduring and 
diversified economy'' on the Pribilof Islands. 16 USC section 
1166(a)(1). The objective of the Trust, as stated throughout 
Congressional hearings on the topic, was to end Federal administration 
of the Pribilof Islands. It was a logical and sequential step following 
the 1966 Act which took the initial step toward Federal phase-out by 
promoting municipal self-governance by the Pribilovian people.
    Under the 1983 Act, responsibility for establishing and 
administering the Trust was given to the Secretary of Commerce. 16 USC 
1166(a). To effectuate trust responsibilities, Congress directed that 
at least one trust instrument be established by the Secretary to 
address matters relating to standards and procedures associated with 
the Trust. 16 USC 1166(c). Additionally, Congress provided that the 
trust appropriation could be divided between the two Islands and that 
two separate trust portions could be set up under the original trust 
instrument to reflect individual Island goals and objectives. 16 USC 
1166(d). To effectuate St. George's desire for autonomy, the Trust was 
bifurcated and two additional documents were created, the St. Paul 
Trust Agreement and the St. George Trust Agreement. These documents 
governed the duties, obligations and rights of the Trustor, the St. 
Paul and St. George Trustees, and all beneficiaries under the 
respective trusts.
    The primary trust instrument (hereinafter ``the Master Trust 
Agreement'') was signed on November 21, 1983. As stated in Article II, 
the purpose of the Master Trust was:

    ``__to promote and foster the transition on the Pribilof Islands 
of St. Paul and St. George from welfare and sealing economies to 
stable, self-sufficient, enduring and diversified economies. Such 
purpose includes but is not limited to the provision of basic and 
essential human services * * *''

    The St. Paul Trust Agreement was signed March 14, 1984. The 
designated Trustee was Mr. Jay Gage. The St. George Trust Agreement was 
signed March 27, 1984. Peter D. Hocson was designated Trustee on July 
18, 1984.
    Varying only in minor detail, both Trust Agreements established the 
appointment of a Trust Advisor responsible for recommending 
distributions from the Trust. The Advisor was to be appointed by the 
Secretary and was to be an entity located and functioning on the 
Islands, which, in the opinion of the Trustor, was knowledgeable 
concerning the Islands' economies and needs, and which could adequately 
represent the interests of the Pribilovians. It was the duty of the 
Advisor to provide written recommendations to the Trustee specifying 
the projects or uses to which distributions from the trusts should be 
made.
    Throughout the administration of the Trusts, both Islands had local 
representatives as Advisors. The Advisors chosen were, for St. Paul, 
the City Manager and for St. George, the Mayor and their respective 
staffs. These entities were chosen based on their status as City 
leaders and their understanding of the needs of their people.

[[Page 18328]]

    The Trustee's obligations under both trust agreements were to 
invest the Trust and to direct disbursements. Unless the Trustee was 
qualified at investment functions, an Investment Advisor was to be 
consulted prior to Trust investments. With regard to disbursements, the 
Trustees were responsible for evaluating each Advisor's 
recommendations. The Trustees were to approve the Advisor's 
disbursement recommendations unless they determined that the projects 
or uses set forth in the Advisor's Recommendation were not consistent 
with the purposes of the Trust or would not best achieve the goal of 
furthering the trust purposes. In determining that the proposed use was 
not in the best interest of the purposes of the trust, the Trustees 
were granted sole discretion as the ultimate fiduciaries of the trusts. 
The Trustees were also responsible for providing annual reports to the 
Secretary and Congress regarding the use of the Trusts and progress 
being made.
    As Trustor, the Secretary's roles and responsibilities were limited 
to establishment and oversight of the Trust, including the authority to 
remove the Trustee if warranted, and selection of the Trust Advisors.
    Both the St. Paul and St. George Trust Agreements contained 
automatic termination clauses effective 10 years after initiation 
unless extended by consent of all parties. The St. George Trust was 
terminated in the Spring of 1994. At termination, the trust corpus had 
been fully distributed. The St. Paul Trust was terminated in the Spring 
of 1994, with the exception of the distribution of final assets from 
the sale of an interest in the fishing vessel Northern Eagle 
consummated in December 1996.
    It is the opinion of the Secretary that the Federal Government's 
responsibilities under the 1983 Act to establish and oversee the Trust 
have been completed in accordance with law. Accordingly, it is the 
Secretary's opinion that the claims asserted regarding administration 
of the trust are without merit. With regard to the sufficiency of the 
Trust, it is the opinion of the Secretary that the success of St. Paul 
evidences that sufficiency.

(E) Fisheries Issues

    The communities of St. George and St. Paul have expressed the 
opinion that the fishery resources surrounding the Pribilof Islands 
should be set aside for their exclusive use, and that NMFS 
inappropriately allocated fisheries resources surrounding the Pribilof 
Islands to offshore fleets through the Inshore-Offshore program and to 
other Community Development Quota (``CDQ'') communities through the CDQ 
programs.
    In a May 29, 1996 legal opinion, NOAA General Counsel concluded 
that the 1983 Act did not create any specific fishing privileges for 
the residents of St. George or St. Paul, and that the North Pacific 
Fishery Management Council (``the Council'') and Secretary have 
provided fishing opportunities to the Pribilovians through the CDQ 
programs. The NOAA General Counsel legal opinion regarding these issues 
can be found at Exhibit 12. In essence, the CDQ programs have been 
administered by NOAA without privilege or prejudice to any native 
entity or tribe. The Pribilovians are no exception to this rule. The 
fisheries program in the Bering Sea is administered as follows.
    The U.S. groundfish fisheries of the Bering Sea and Aleutian 
Islands Management Area (BSAI) in the exclusive economic zone (EEZ) are 
managed by the Secretary pursuant to the Fishery Management Plan (FMP) 
for groundfish in the BSAI. The FMP was prepared by the Council 
(Council) pursuant to the Magnuson-Stevens Fishery Conservation and 
Management Act (Magnuson-Stevens Act) at 16 U.S.C. 1801, et seq., and 
is implemented by Federal regulations at 50 CFR part 679. General 
regulations that also pertain to U.S. fisheries are codified at 50 CFR 
part 620.
(1) Pollock CDQ Program
    The pollock CDQ program was developed by the Council as part of 
Amendment 18 to the BSAI FMP (the Inshore-Offshore program). The final 
rule implementing Amendment 18 (57 FR 23321, June 3, 1992) allocated 
pollock for the CDQ program only for a temporary period from 1992 
through 1995. The amendment allocated seven and one-half percent of the 
Bering Sea pollock Total Allowable Catch (TAC) to a Bering Sea pollock 
CDQ reserve, plus seven and one-half percent of the Aleutian Islands 
pollock TAC to an Aleutian Islands CDQ reserve. Eligible Western Alaska 
communities could apply for CDQ allocations from the pollock CDQ 
reserves by submitting a Community Development Plan (CDP) to NMFS. 
Regulations (57 FR 54936, November 23, 1992) implemented the pollock 
CDQ program for 1992 and 1993 by specifying the process for applying 
for a CDQ allocation and the required contents of the Community 
Development Plans (CDPs). A subsequent regulatory amendment (58 FR 
32874, June 14, 1993) implemented the pollock CDQ program for 1994 and 
1995.
    The Council recommended re-authorizing the pollock CDQ program in 
the BSAI for an additional 3 years as part of Amendment 38 to the BSAI 
FMP, and NMFS approved this amendment on November 28, 1995. Regulations 
implementing the pollock CDQ program for 1996 through 1998, were 
published on December 12, 1995 (60 FR 63654, corrected 61 FR 20, 
January 2, 1996).
    The CDQ program was developed to provide the eligible CDQ 
communities with a means for starting or supporting commercial 
fisheries business activities that will result in an ongoing, 
regionally based, commercial fisheries-related economy. Both St. George 
and St. Paul are eligible communities under the pollock CDQ program, 
and have participated and benefited from the CDQ program since its 
establishment in 1992. St. George is a member of a CDQ group named the 
Aleutian Pribilof Island Community Development Association (APICDA), 
which includes the communities of Atka, False Pass, Nelson Lagoon, 
Nikolski, and St. George. APICDA was allocated 18 percent of the 
pollock CDQ reserves for 1992 through 1998.
    St. Paul is the sole member of the CDQ group named the Central 
Bering Sea Fishermen's Association (CBSFA). CBSFA was allocated ten 
percent of the pollock CDQ reserves for 1992 and 1993, eight percent of 
the reserves for 1994 and 1995, and four percent for 1996 through 1998. 
A description of the CDQ projects that benefit St. George and St. Paul 
through APICDA and CBSFA activities can be found at Exhibit 13.
(2) Halibut and Sablefish CDQ Program
    St. George and St. Paul also participate in the halibut and 
sablefish CDQ program. However, the Council's authority to manage 
halibut is not derived from an FMP as is the case with pollock and 
sablefish. The domestic fishery for halibut in the BSAI is managed by 
the International Pacific Halibut Commission (IPHC) as provided by the 
Convention between the United States and Canada for the Preservation 
for the Halibut Fishery of the Northern Pacific Ocean and the Bering 
Sea (Convention), and the Halibut Act. The Convention and the Halibut 
Act authorize the Council to develop regulations that are in addition 
to, but not in conflict with, regulations adopted by the IPHC affecting 
the U.S. halibut fishery. Under this authority, the Council may 
develop, for approval by the Secretary of Commerce, limited-access 
policies for the Pacific halibut fishery in the BSAI.

[[Page 18329]]

    The Council proposed adding the halibut and fixed gear sablefish 
(H/S) fisheries to the CDQ program beginning in 1995, as part of the 
Individual Fishery Quota (IFQ) program. The IFQ final rule (58 FR 
59375, November 9, 1993) implemented the H/S CDQ program with no 
expiration date. St. George and St. Paul are the sole participants in 
the CDQ group named Pribilof Island Fishermen (PIF), for the purpose of 
harvesting a halibut CDQ allocation. For 1995 through 1997, PIF has 
been allocated 50 percent of the halibut that is available in IPHC area 
4C. For 1995, this amounted to 385,000 pounds of halibut. Halibut CDQ 
harvest in St. George and St. Paul is accomplished by the small local 
fishing fleet, and the halibut are sold to local shoreside processors. 
Therefore, the benefits from the halibut CDQ fishery in the Pribilof 
Islands accrues directly to the local residents.
    The community of St. George participates in the sablefish CDQ 
program through APICDA. APICDA has been allocated 10 percent of the 
Aleutian Islands sablefish CDQ reserve for 1995 through 1997. The 
benefits to St. George resulting from participation in the sablefish 
CDQ program are described in APICDA's H/S CDP, which is available from 
the NMFS Alaska Regional Office (907-586-7228).
    It is the opinion of the Secretary that no special or exclusive 
fisheries rights have been created for the Pribilovian people under the 
1983 Act, the Magnuson-Stevens Act, or any other law or regulation. It 
is the further opinion of the Secretary that the Federal government has 
properly and legally implemented the requirements of the Magnuson-
Stevens Act, the 1983 Act and all applicable and associated 
regulations. Accordingly, the Secretary finds the communities' requests 
for specific performance and monetary damages without merit.

(F) Seals and Rookeries

    These claims involve complaints and requests regarding subsistence 
fur seal harvest and the continued management of the fur seal rookeries 
by NOAA, and suggestions from the St. Paul Stewardship Program for the 
overall protection of the ecosystems of the Pribilof Islands in a 
balanced and integrated fashion.
    The Pribilof Islands are a world-class special reserve established 
to ensure the conservation and protection of the northern pacific fur 
seal and other wildlife species. Perhaps the single most important 
aspect of the Islands is their use as the primary breeding and pup 
rearing habitat of the northern fur seal. The Fur Seal Act (``the 1983 
Act''), Marine Mammal Protection Act, (``MMPA'') 29 and the 
Endangered Species Act (``ESA''),30 and their implementing 
regulations all require a significant commitment from NOAA for the 
protection, conservation and management of marine mammal species 
dependent on the Pribilof region.
---------------------------------------------------------------------------

    \29\ 16 U.S.C. 1361 et seq.
    \30\ 16 U.S.C. 1531 et seq.
---------------------------------------------------------------------------

    On June 17, 1988, NMFS declared the Pribilof Island's stock of 
northern fur seals depleted under the MMPA. Amendments to the MMPA 
enacted November 23, 1988 (Public Law 100-711) directed the Secretary 
of Commerce to develop a conservation plan on northern fur seals 
``conserving and restoring the species or stock to its optimum 
sustainable population'' (``the Plan''). The Plan was finalized and 
approved by the Assistant Administrator for Fisheries in June, 1993. It 
serves as the guide for those activities believed necessary to restore 
the northern fur seal to pre-depleted levels.
    The broad-based objectives of the Plan in achieving pre-depletion 
goals are (1) to conduct extensive research on the health, mortality, 
physiology, sociology, and habits of the seals and the effects of 
disturbances to their habitat and the Pribilof ecosystem; (2) to assess 
and avoid or mitigate possible adverse effects of human-related 
activities on or near the Pribilof Islands and on other habitat, and 
(3) to enforce existing regulations.
    Under the Plan, the efforts of the Agency must be coordinated with 
the Aleut communities and other resource management agencies and user 
groups on each island. Conversely, whenever any significant activity is 
proposed, planned or contemplated by the community or any other group, 
NMFS input should be obtained to ensure that the actions will not 
jeopardize the seals or damage their habitat.
    Examples of NMFS coordinated efforts to prevent negative impacts on 
the Pribilof fur seal herd and the Bering Sea ecosystem include working 
with EPA to develop Clean Water Act Section 402 discharge permits that 
will reduce the impact of seafood processing wastes in local waters; 
working with the Coast Guard to promote their presence during heavy 
fishing seasons, and assisting the Department of Interior with its rat 
control program. With regard to coordination with the local community, 
NMFS has hired local residents to patrol the rookeries to minimize 
disturbance, encouraged the establishment of co-management bodies such 
as the Aleut Fur Seal Commission, and participated in St. Paul's 
Interagency Work Group established to coordinate economic growth and 
development and joint use of island property.
    In the path of overwhelming growth on St. Paul Island resulting 
from the mandates of Title II of 1983 Act, NMFS' mission of protecting 
the Island's resources under Title I of the Act and the MMPA is growing 
increasingly difficult. With limited resources, the program faces the 
potential inability to effectively monitor and provide input and 
guidance on the multitude of plans for development on the Island. The 
difficulty that NMFS faces in carrying out the directives of the Plan 
are exacerbated by the demands of the local leadership to support 
continued growth under the alleged 1983 Act authorities of Title II. 
That the tenor of these requests is adversarial further restrains the 
Agency's goals of effective coordination among Island entities. 
Ironically, the insistence of the Pribilovian people for NOAA's ongoing 
commitment to provide economic growth ultimately stands to effectively 
impede and interfere with the Agency's statutory responsibilities to 
manage the fur seal reserves.
    NOAA values the environmental knowledge of the indigenous people of 
the Islands and is committed to continued coordination and the sharing 
of experience that will help to achieve a balance in the use of the 
Islands' natural resources. Toward this end, the Agency appreciates the 
Stewardship Program's comments and supports many of the concepts 
presented. NOAA looks forward to resolution of the issues underlying 
this Report so that viable coordination amongst all entities can be 
achieved.
    With regard to claims that the fur seal subsistence harvest is 
improperly or unfairly administered, it is the opinion of the Secretary 
that the program is being conducted properly and legally under the 
regulations implemented under section 105(a) of the 1983 Act.

(G) Retirement Benefits

    The Pribilovian people have asserted that the Federal Government 
has failed to provide sufficient retirement benefits, has improperly 
credited those benefits, or has otherwise failed to inform the people 
of their benefits.
    The first Federal retirement benefits were granted the Pribilovians 
in 1950 under the cash compensation and wage plan instituted by the 
Department of Interior. Under that system, full time Federal employees 
engaged in the commercial fur seal harvest or in support services 
received retirement

[[Page 18330]]

benefits for work conducted from 1950 forward. Under the Bartlett Act 
of 1966, the retirement benefits bestowed in 1950 were expanded to 
include compensation for work performed prior to 1950. Deposit 
requirements to accrue pre-1950 benefits were not required.
    The provisions of the 1983 Act significantly enhanced and expanded 
retirement benefits to the Pribilovian people by extending benefits to 
all Pribilovians who had worked for the Federal Government, regardless 
of whether they had previous coverage under the Civil Service 
Retirement System (``CSRS'') (e.g., temporary or seasonal). These 
benefits were granted only to those employees who were on the rolls of 
the Federal government on October 28, 1983, and who transferred without 
a break in service to one of the six Island entities (The Cities of St. 
Paul and St. George, the village corporations, and the IRA councils). 
The intent of the Act was to provide continuity of retirement benefits 
to those Pribilovians who met this criteria.
    For entity employees to be eligible for extended, full-time 
benefits, Pribilovian individuals only had to have worked one day in 
any calendar year to receive retirement credit for the entire year. 
This one day system is both unique and generous. To balance the 
inequities posed to pre-1983 retirees with part-time, seasonal, and 
temporary service, their benefits were recalculated to give them full-
time credit to enhance their annuities.
    In September, 1983, representatives from the NOAA's Western 
Administrative Support Center's Human Resources Division (``HRD''), the 
Pribilof Program Office of NMFS and participating island entities 
negotiated a memorandum of understanding (``MOU'') explaining the Act 
and establishing the process by which the program would be 
administered. (A copy of the MOU is attached as Exhibit 14.) Under the 
MOU, the entities agreed to maintain pay records of each employee 
entitled to the transfer of federal employee benefits and to forward 
this information to HRD together with a check for the amounts withheld 
from the employees' pay. The entities also agreed to provide matching 
funds for benefits. HRD agreed to maintain all records of the 
employees, to annually certify a master list of eligible employees, to 
serve as the liaison between the entities and the Office of Personnel 
Management (``OPM''), and to serve as the point of contact regarding 
all Federal personnel issues.
    In October 1983, HRD and NMFS representatives spent several weeks 
on the Islands explaining the new provisions and their impacts to 
participating employers. They also assisted the entities in setting up 
their reporting systems to ensure that they would comply with and 
implement the Act.
    In 1984 HRD staff and a retirement program manager from OPM 
returned to the Islands to explain the provisions of the Act and the 
process for implementing it to the general public. Meetings were held 
with residents on both islands. Teleconferences were conducted to 
inform off-island recipients.
    At OPM's request, HRD returned to the Islands in 1985 to work with 
the entities to ensure that all annuity and survivor paperwork was 
correctly completed and submitted for recomputation purposes. Since 
that time, the MOU continues to work effectively as written.
    During NOAA's visit to the Islands in June, 1996, many individuals 
questioned the Agency's calculation and crediting of benefits. A list 
of individual complaints was subsequently investigated by HRD. HRD 
found no instances of improper crediting of retirement service nor any 
errors in other benefits calculations. To alleviate specific concerns, 
HRD contacted all individuals with specific questions by telephone.
    HRD is scheduling a trip to the Islands in the Spring of 1997 to 
re-explain the retirement benefits. In the meantime, HRD continues to 
resolve benefits issues on an individual, needs-based basis.

(H) Environmental Clean-up

    Public Law 104-91 section 3(a) directs that the Secretary ``* * * 
cleanup landfills, wastes, dumps, debris, storage tanks, property, 
hazardous or unsafe conditions, and contaminants * * *'' on lands 
previously owned and administered by NOAA. In addition, the Secretary 
is responsible under section 120 of the Comprehensive Environmental 
Response, Compensation and Liability Act (``CERCLA'') for the 
assessment and remediation of hazardous wastes on any property to be 
transferred.
    In the summer of 1989, the Alaska Department of Environmental 
Conservation (``ADEC'') issued a Notice of Violation against NOAA as a 
result of a small oil spill at the Salt Lagoon on St. Paul Island. 
Investigations ensued, the site was boomed, and, over time, the seep 
was abated. As a result of the incident, TDX notified NOAA that it was 
concerned about potential environmental compliance issues on property 
being transferred to them under the TOPA. Initial concern surrounded 
the underground storage tanks at the gas station and at the power 
plant. General concern was later expressed about leaking drums and 
potentially contaminated soil. Although all property transfers had been 
completed on St. George, public leaders there voiced similar concerns 
about property on their island.
    In 1992, the United States Environmental Protection Agency 
(``EPA'') undertook a preliminary investigation of St. Paul and St. 
George to assess potential contamination and liability under the 
Comprehensive Environmental Response, Compensation and Liability Act 
(``CERCLA'') and the Resource Conservation and Recovery Act (``RCRA''). 
EPA determined that site conditions on St. George warranted no further 
action and proceeded with an expanded site investigation on St. Paul. 
In November, 1994, EPA issued its finding that no contamination posing 
a risk to human health or the environment under Federal law existed on 
St. Paul. Accordingly, the Agency issued a second ``no further action'' 
determination.
    Despite the EPA's findings, island entities continued to allege 
that the United States government had caused and created island-wide 
hazardous waste contamination. In response to these ongoing 
allegations, NOAA approached ADEC to negotiate a Two-Party Agreement 
which would address cleanup of all potential contamination on the 
island. The Two-Party Agreement was signed on January 26, 1996. (A copy 
of the Two-Party Agreement is attached as Exhibit 15.) Its four corners 
effectively establish the basic framework, cleanup objectives and time 
lines for NOAA's environmental cleanup of the islands. To date, no 
ongoing sampling has revealed contamination posing a threat to human 
health or the environment. The majority of work under the Agreement 
focuses on the removal of solid waste and debris, and on the closure of 
existing landfills.
    P.L. 104-91 defines cleanup activities to be achieved under section 
3(a) to mean the planning and execution of remediation actions for land 
described under the law and the redevelopment of landfills to meet 
statutory requirements.31 With the exception of the sealing 
plant stabilization, the

[[Page 18331]]

cleanup obligations of section 3(a), including activities related to 
the landfills are being met under the terms of the Two-Party Agreement.
---------------------------------------------------------------------------

    \31\ In the Department of Commerce and Related Agencies 
Appropriations Act, 1996, Public Law 104-134, a portion of the 
Department's 1996 $10 million appropriation for cleanup was intended 
for stabilization of the historic sealing plant on St. George (see 
H. Rep. No. 104-378, explanatory statement at p. 132).
---------------------------------------------------------------------------

    In response to the directives of section 3(d) of Public Law 104-91 
requiring, to the maximum extent practicable, the use of local hire to 
effect cleanup, the Department published a notice of availability for 
Federal assistance in the Federal Register on May 22, 1996. The notice 
solicited applications from local entities and residents and explained 
the selection process.32 Priority was given to those 
projects that were defined in the Two-Party Agreement. To assist the 
Pribilovians, the Department also held meetings on the Islands to 
explain the grants process. The Department also held a workshop in 
Anchorage, Alaska, to provide instruction to interested parties on 
preparing the required Federal forms.
---------------------------------------------------------------------------

    \32\ 61 Fed. Reg. 25632 (May 22, 1996).
---------------------------------------------------------------------------

    As a result of the solicitation, two cooperative agreements were 
implemented with local entities to promote the use of local hire in 
achieving cleanup as directed by section 3(d) of PL-104-91. The 
agreements, totaling over $5 million, were executed between NOAA and 
Tanaq on St. George and the joint venture of Bering Sea Ecotech (a TDX 
subsidiary) and Bristol Environmental Corporation on St. Paul. Both 
agreements require the removal of surface debris (vehicle hulks and 
other assorted solid waste) and the excavation of abandoned underground 
fuel storage tanks (``USTs'') and associated petroleum contaminated 
soils. Work under the cooperative agreements is being conducted 
pursuant to the Two-Party Agreement and is expected to be completed by 
June, 1997 on St. George and September, 1997 on St. Paul. All field 
work under the Two-Party Agreement is expected to be completed by the 
close of FY 1998. The Department also intends to fund an award to 
stabilize the sealing plant on St. George Island upon receipt of an 
acceptable proposal from any local entity or resident of the Islands. 
Other cooperative agreements may also be executed for additional 
projects identified in the Two-Party Agreement and other projects 
authorized under P.L. 104-91, as the Secretary determines necessary.
    The State of Alaska has agreed that satisfaction of the terms of 
the Two-Party Agreement will entitle NOAA to certification from ADEC 
that all necessary and required work to ensure compliance with 
environmental laws has been met. Moreover, completion of work 
associated with the landfills and stabilization of the sealing plant 
will result in satisfaction of the Secretary's obligations under P.L. 
104-91.
    Section 3(c)(2) of P.L. 104-91 requires the Secretary to include in 
this Report the estimated costs for conducting necessary actions to 
resolve Federal responsibility on the Islands. Congress has 
appropriated $20.1 million for Pribilof Island activities. Total 
project costs under the Two-Party Agreement are estimated to range from 
$21.1 to $25.5 million (which includes up to $3.4 million contingency 
to accommodate uncertainties associated with unforeseen site conditions 
during remediation, variable work seasons based on weather conditions, 
and the availability of skilled workers). The FY 1998 budget request 
includes no new funds for the Pribilof Islands cleanup. Any 
requirements above currently available funds would be accommodated with 
funds requested for NOAA in the President's FY 1998 budget.
    Further, based on guidance provided by Congress, at least $2.7 
million is needed for stabilization of the sealing plant and activities 
related to landfills under P.L. 104-91. Should additional projects be 
required under P.L. 104-91, or as a result of this Report, funds above 
$2.7 million will be required. Funding for P.L. 104-91 projects is not 
included in the $20.1 million appropriated for Pribilof Island 
activities to date.
    With the exception of ongoing administrative costs associated with 
processing retirement benefits and completing property transfers under 
the TOPA, these costs constitute the entirety of funds required to 
finalize current Federal responsibilities on the Islands.

(I) Public Law 104-91 Process

    Representatives of the Pribilovians have alleged that the process 
for input to this Report has been unfair in that inadequate notice and 
funding was provided to permit a timely response.
    Section (3)(c) of Pub. Law 104-91 directs the Secretary of Commerce 
to prepare this Report proposing necessary final actions to resolve 
Federal responsibility on the islands and to include the ``statements 
of claims of local entities and residents.'' A description of the 
Report purpose and process were set forth in explicit detail, including 
an approved form for submission of statements, in the Federal Register 
on April 30, 1996. A copy of the Federal Register Notice together with 
a letter explaining the notice was sent to every resident of the 
islands on April 29, 1996. (The letter and Federal Register notice are 
included as Exhibits 15 and 16.)
    As set forth in the Federal Register notice, local entities and 
residents were initially given three months to submit their statements. 
In April, 1996, local entities and residents sought and obtained an 
extension for preparation of the Report and for their submission of 
claims. As a result, the deadline for submission of statements was 
extended from July 6, 1996 to October 6, 1996 and final Report 
submission was moved to January 6, 1997. Notice of the extension was 
provided through a televised public meeting on the Islands in May, 
1996. To accommodate an extremely tight turn around and the practical 
difficulties of coordinating the Report through several agencies over 
the holiday season, NOAA requested and obtained two additional 30 day 
extensions for the Report. Notice of these extensions were provided 
counsel to the local entities and in no way prejudiced the rights of 
local entities or residents.
    In the course of preparing the Report, NOAA personnel conducted 
five public meetings on the Islands. In addition, NOAA personnel 
conducted informal meetings at the Community Elder Center and at the 
TDX annual shareholder's meeting. NOAA also conducted several impromptu 
meetings during their visits at the request of island leaders. Written 
notice of the formal meetings were provided to all residents. The first 
formal meetings, conducted in May, 1996, explained the Report purpose 
and process. The second formal meetings, in June, 1996, provided for 
the taking of oral statements of local residents. The final formal 
meeting in October, 1996, summarized the submissions made by local 
entities and residents.
    It is the opinion of the Secretary that the Department provided 
timely notice and opportunity to submit statements and that the P.L. 
104-91 process was executed in compliance with all applicable 
principles of due process.

V. Summary and Final Recommendations

    The legislation directing this Report resulted from ongoing 
discussion between NOAA and representatives of the Islands regarding 
the responsibility of the Federal Government to continue to provide for 
and guarantee the future of the Pribilovian people. Unable to 
articulate specific legal claims or otherwise establish a basis for 
continued appropriations through negotiations with NOAA in 1996, this 
report mechanism was introduced by the Pribilovian representatives to 
give voice to those issues perceived to be

[[Page 18332]]

inhibiting the Pribilovians' ability to arrive at a self-sustaining 
economy.
    It is the opinion of some of the Pribilovian people that the 
Federal Government has not concluded its obligations to the Pribilovian 
people. It is the Secretary's opinion that the Federal Government has 
fulfilled, or is in the final stages of fulfilling, all obligations to 
the Pribilovian people as directed by Congress through legislation 
enacted over the last 50 years.
    At least one-third of the claims submitted for this Report express 
dissatisfaction with the way land or the 1983 Act trust has been 
controlled, used or distributed by a competing island entity. An equal 
number of claims allege the past or present failure or unwillingness of 
the Federal Government to act to resolve these disputes. As this Report 
is being written, both TDX and the City of St. Paul have initiated 
separate lawsuits against the Secretary of Commerce and the Under 
Secretary of NOAA to resolve a land dispute previously resolved in two 
distinct settlement agreements. (A copy of the complaints filed are 
attached as Exhibits 5(a) and 5(b)).
    After several visits to the Islands by NOAA and Department 
personnel, including meetings for the taking of the statements of the 
local people, and as a result of an analysis of the claims submitted, 
it is the opinion of the Secretary that these claims are without 
adequate foundation in law, or under any existing policy or agreement.
    The debate over administration of ongoing Federal obligations is 
also detracting from the Department's ability to meet its 
responsibilities under Title II of the 1983 Act. As the Federal agency 
responsible for protecting the welfare and habitat of the fur seal 
under Title I of the 1983 Act, a role as provider of indefinite and 
ongoing support for economic (e.g., commercial) development under Title 
II creates an internal paradox. Any interpretation that Title II of the 
1983 Act guaranteed the Pribilovian people an unrestrained and 
indefinite economy administered through the Department is at odds with 
the clear intent of the Act and places the Department in an untenable 
and incommensurable position. The depleted status of the fur seal 
demands that the Department be permitted to pursue statutory 
obligations goals unfettered.
    Conditions on St. George are widely divergent from those on St. 
Paul and the Secretary recognizes the difficulty of assessing the 
struggles of one entity in the shadow of another's success. To ensure 
that due consideration is given to the entirety of the Pribilovian 
question, the Secretary recommends that Congress authorize and direct 
an independent economic assessment of the practical realities facing 
the Island of St. George. The Secretary further suggests that such 
analysis be undertaken within the parameters of a clearly articulated 
economic objective. The Department is unable to estimate the costs of 
this analysis.
    The Secretary also recognizes that the opinions and positions 
presented in this Report will not be widely accepted by those entities 
and residents who submitted statements. We do not believe that it was 
Congress' intent that the P.L. 104-91 process be used as a claims 
process representing potential lawsuits against the United States 
government. As set out in the Federal Register notice commencing this 
process (attached as Exhibit 17), it was not the intent of the 
Secretary that this Report serve as a claims process. Despite repeated 
attempts to dissuade the claims concept, the Pribilovian people adhered 
to it. It is the Secretary's view that section 3(c) is best understood 
as encompassing ``claims'' associated with Pribilof Island land 
transfers and grants and cooperative agreements to promote 
environmental cleanup. It seems clear that, regardless of Congressional 
intent, the larger, well-supported Island entities will persist in 
pursuing claims against the United States and the Department. To 
minimize the extensive and consuming administrative and transactional 
costs associated with the defense of these potential claims, the 
Secretary recommends that Congress establish a claims process to be 
administered through the United States Court of Federal Claims.
    The Department is unable to predict how many of the 85 potential 
claims that have been raised under the P.L. 104-91 process will be 
actively pursued by Pribilovian representatives in a formal, 
adjudicative setting. The Department is therefore unable to estimate 
the costs of this recommendation.
    This Report was signed by the Secretary of Commerce on March 17, 
1997.

    Dated: April 1, 1997.
Terry Garcia,
Assistant Secretary for Oceans and Atmosphere, National Oceanic and 
Atmospheric Administration.
[FR Doc. 97-9586 Filed 4-14-97; 8:45 am]
BILLING CODE 3510-22-F