caused us a number of problems, because several years ago we established a small, a very small, business development loan fund, $175,000 to serve 14,000 people, to supplement other funds that would be available to us, either through banks or SBA or through the Bureau of Indian Affairs.

In interpreting the regulations now the BIA has ruled that since we are an Indian tribe that has a loan program, our people are ineligible to receive credit assistance through the BIA. We feel that this is unfair, simply because we have a limited program.

In addition they have ruled that existing IRA councils that have outstanding loans through the Indian Revolving Loan Fund are also ineligible, and the people that reside in those communities, which are most of the communities of Southeast Alaska, are ineligible for funds under the Revolving Loan Fund.

Because of this we have contemplated dropping our own loan program, simply to give more people the benefit of receiving credit and loans and grants through the Indian Financing Act, but the intent has still not been clarified and needs to be clarified somewhere in the central office in Washington, because our own area director interceded in our behalf and attempted to get a clarification and an exception from the central office on our behalf. He was unable to do so.

But throughout Alaska our people are not being fairly treated and it is impossible for young or ambitious Indian entrepreneurs to get started without assistance from the BIA, and then are ruled ineligible over a technicality that I don't think was intended by the Congress.

I would also like to talk about the problems which we had relating to Indian education, attempting to deliver Indian education programs. Previously the Alaska Federation of Natives had a contract with the Bureau of Indian Affairs to deliver Johnson-O'Malley programs on a statewide basis. Following passage of the Self Determination Act, it became very obvious to us that they would not be able to effectively deliver the program, so we began a planning process that would allow us to contract directly under the Indian Self Determination Act, and since Mr. Wilson is the person who was dealing most closely with this, the frustrations that we have had attempting to do this, I would like him to explain the process that we went through. We still do not have a contract for Johnson-O'Malley programs and our villages are still not being served by Johnson-O'Malley programs.

Mr. WILSON. The central council, when the Alaska Federation of Natives announced that they would no longer administer or have a contract to provide for the Johnson-O'Malley program to all of Alaska, the central council executive committee passed a resolution to the effect that the central council should be the entity to submit a proposal to the Bureau of Indian Affairs to contract for the JohnsonO'Malley program and any other educational programs in our region. The contract proposal was submitted and through the Southeast Agency involved all planning with all the communities in our region and resulted in the central council obtaining resolutions of endorsements that the central council, through the Southeast Alaska Agency contract, would be the entity to administer the Johnson-O'Malley programs in our region.

Our proposal was submitted and has not been acted on as to this date, and at the present time it boils down to the interpretation that

the Bureau has in regard to the ability for the central council to administer the program under 93-638, section 271A, and they are proposing that we must contract under 93-638, 271C, or 273, which poses quite a burden on the central council to administer effectively the Johnson-O'Malley program in our region. We have appealed this decision. It is being reviewed by the Solicitor's Department right now and we anticipate that we should receive some decision with regard to our appeal some time next week.

However, the predicament that this has placed the central council in is one that where we should be now implementing the JohnsonO'Malley programs in respective communities in our region. The delay is causing some concern in the communities because school has already started and they are losing confidence in the central council by the virtue of the delay.

I doubt, from our discussions with the contracting officer for the Bureau and the Solicitor, that we will receive a favorable decision on our appeal.

Mr. PADDOCK. Thank you, Joe. Back to the Indian Financing Act problem, I do have a document that I would like to submit for evidence. It's the legislative history of the Indian Financing Act as it relates to our problem and has been researched this summer by a member of our staff, Lillian Peters. [See app. I, p. 201.]

If there are any questions, we would be happy to respond, Senator. We will submit a more detailed report on this also.

Senator ABOUREZK. Why do you feel that your organization is the best representative of the T. & H. people to qualify your particular organization as the tribal governing entity?

Mr. PADDOCK. As I stated before, there are a number of problems with the other definitions which the Bureau of Indian Affairs has defined as having equal status with us. Tlingit and Haida, by its own jurisdictional act, identifies us technically and racially. We have a constitution that has been accepted by the Secretary of Interior, and rules of election that have been adopted and accepted by the Secretary of Interior. We have a democratically elected process, which is a requirement of how the central council elects its officers and represents its communities.

By comparison, there are problems that cannot be immediately resolved with the other three equal entities that have been offered by the Bureau of Indian Affairs. The shareholding problem must be resolved, because it does not represent ethnically the Tlingit and Haida people. In fact, there are non-Natives now holding shares. It's possible in the future that the State of Alaska will hold shares simply because somebody had no heirs and passed away in a nursing home or a pioneers' home or something of that sort. There are many legal problems that I am sure that Sealaska is working on and will be resolved eventually. village corporations are in the same situation and must deal with this problem, and until that is finally resolved, the status is not an equal one.

The IRA corporation, many of them are defunct, have not met and are inactive, so we feel that we are in the best position and have the legal precedent to represent our people for the delivery of social service programs.

Senator ABOUREZK. OK, thank you. If there are no questions from other members of the panel-John?

Mr. BORBRIDGE. Yes. Mr. Chairman, I would like to ask Mr. Paddock-although you have alluded to, currently the central council under contract with the Bureau of Indian Affairs is administering the entire services previously performed by the Southeast Agency of the Bureau of Indian Affairs?

Mr. PADDOCK. Yes.

Mr. BORBRIDGE. One of the concerns you have expressed is that with the somewhat ambiguous or unfavorable attitude of the Bureau with respect to the definition of "tribe," thus in effect a determination of who is eligible to contract for those services, you feel that there may well be a direct or an unfavorable impact in terms of the ability of the central council to so contract and to so provide your services? Will you touch on that, please?

Mr. PADDOCK. Yes. If the question remains up in the air and is not resolved finally by the Bureau of Indian Affairs in a very forthright way, the question will remain in the minds of many other organizations that we are not united, and I would like to resolve once and for all that we are a united body and that laying that to rest in the minds of the Bureau of Indian Affairs, and of our own people.

Senator STEVENS. Well, Mr. Chairman, as I understand it, the Bureau is taking the position that these four entities that would qualify, and that your organization is one of them?

Mr. PADDOCK. Yes.

Senator STEVENS. And you seek exclusive designation?

Mr. PADDOCK. Well, we want a clarification of the designation. Senator STEVENS. Are there others who also seek rights under the determination that they-well, Sealaska, do I understand that Sealaska, a village corporation under ANCSA, IRA organizations previously_recognized-are any of those competing with you now?

Mr. PADDOCK. At the moment we have a working relationship with Sealaska in that we are doing human service programs on behalf of the people of southeast Alaska. The village corporations are not competing with us, as far as definition of tribal status. There is some competition going on in some villages for programs, which the Bureau will have to resolve itself, who they are dealing with.

Senator STEVENS. Well, Congress is going to have to face this question, and I am sure Senator Abourezk is one of those who will be involved.

Senator ABOUREZK. Ray, how do you deal with the local village? I mean, how do you have the interface, who do you recognize and what kind of input do they have into your structure?

Senator STEVENS. Before you get into that, I would like to ask Ray one thing more.

Senator ABOUREZK. Sure.

Senator STEVENS. Don't you think it would be helpful if we devised some means for a recognition referendum, so to speak? I mean, as I understand it, what you are saying is that Congress ought to declare that T. & H. is in fact a tribal entity.

Mr. PADDOCK. Yes.

Senator STEVENS. And down here that might be proper, but we have to face the question of an act that takes care of problem in the other

11 regions. Should we not address this by asking Mr. Abourezk to get us a vehicle whereby there would be a referendum in each one of the 12 regions-what is the tribal entity that the BIA must deal with?

Mr. PADDOCK. The matter of a referendum, this has come up in discussion with the area director. I think that is possibly the most straightforward way we could do it, in dealing with this problem, to allow the communities to decide for themselves what is the tribal governing body. We have a constitution that recognizes Tlingit-Haida community councils on a representative basis. For instance, Pelican will have one, Juneau has 10, based on population, delegates to our convention. That is a fair way in which to elect, but there are other existing entities within a community which attempt to deal with the Bureau of Indian Affairs also, and possibly through a referendum—that may be a solution that we can address.

Senator STEVENS. I am sure you recognize the impact of what we do down here, in view of the fact that this has historically been done by either in some of these areas, if Congress makes the selection-I'm not sure I would want them to make that selection in some other regions. I would rather have them make the selection themselves.

Mr. PADDOCK. In some other regions there is a question, a trick selection of a traditional village which muddies it up even further.

Senator ABOUREZK. I have got a question, Ray. Reading the area director's letter, he says there are four conceivable entities that could be recognized as representing the people in this area: the Central Council of Tlingit and Haidas of Alaska, Sealaska Corp., the village corporations pursuant to the Native Claims Act, and an IRA organization created pursuant to section 16 of the Alaska Reorganization Act. Now, as I take it, the village corporations would like that pushed up to a regional level of some sort is that correct?

Mr. PADDOCK. Well, currently the village corporations, Senator, are involved in profitmaking ventures and were created in the villages for profitmaking purposes. The nonprofit problems in the villages are currently being handled by city councils, municipal governments, and so on, established under State laws, so a village corporation then becomes very ambiguous in the way it's currently being addressed in Alaska.

Senator ABOUREZK. Well, my question is, Ray, who do the villages want to represent them?

Mr. PADDOCK. Well, that question has not been addressed, and Senator Stevens' suggestion of a referendum might be the way that we could resolve this thing, but it would have to be through the assistance of the Bureau of Indian Affairs and the Congress.

Senator ABOUREZK. I see. The IRA organizations, you say, are mostly defunct?

Mr. PADDOCK. Yes.

Senator ABOUREZK. Is that only true down in southeast?

Mr. PADDOCK. We have one very active IRA corporation down here, the community of Klukwan, which is not organized under the laws of the State of Alaska but runs in fact its village by an IRA council. It's the only community we have like that.

Senator ABOUREZK. When you say "an IRA organization," that's pursuant to the 1934 act?

Mr. PADDOCK. Yes.

Senator ABOUREZK. When constitutions were formed?

Mr. PADDOCK. Yes.

Senator ABOUREZK. Then what you are really boiling it down to is, Do we chose between Sealaska Corp. and the Central Council? Mr. PADDOCK. That's about what it amounts to.

Senator ABOUREZK. Now, what is the Sealaska Corp.?

Mr. PADDOCK. Sealaska Corp. is the corporation established under the Alaska Native Claims Settlement Act. The Claims Settlement Act named the central council as the authority to establish a profitmaking corporation.

Senator ABOUREZK. Sealaska is the profitmaking corporation? Mr. PADDOCK. Yes.

Senator ABOUREZK. Well, why should Sealaska even come into consideration if they are a profitmaking corporation? Is it a democratic sort of thing?

Mr. PADDOCK. They are elected by shareholders, as any other corporation is. The only reason it comes into question, Senator, is

Senator ABOUREZK. Are there non-Natives, non-Indians, in Sealaska Corp.?

Mr. PADDOCK. Yes; there are.

Senator ABOUREZK. What about the central council? I think you said the central council was elected by different villages? Mr. PADDOCK. That's right, and communities.

Senator ABOUREZK. How is that specifically done?

Mr. PADDOCK. The election process-election notices are sent out. The people in turn meet and decide who they want to have run their local community councils for Tlingit-Haida. They in turn elect, or the villages also elect, delegates to the convention, based on population.

When we hold an annual convention, and every 2 years an election, from these delegates-it is handled very much like the House of Representatives, with representatives on a population basis. The body itself elects its own leadership.

Senator ABOUREZK. That's a fairly democratic process.

Mr. PADDOCK. Yes.

Senator ABOUREZK. Well, I have to confess that I don't know the history of the Alaska Natives all that well. I know in South Dakota that when a tribe chose its leader it didn't do it by ballot or by election, it was done by consensus, and there was a man that everybody thought ought to be leader and everybody pretty much agreed upon it and he would be the head man of the tribe or the camp or whatever. The 1934 act kind of changed that for everybody, and a lot of traditional Indians are not used to that yet and they refuse to recognize that kind of an election process.

Now, so far as selecting the Central Council of Tlingit-Haida, how much of a departure was that from the traditional way of doing things in Alaska?

Mr. PADDOCK. That has to go back to the early days of the Alaska Native Brotherhood. Shortly after the missionaries arrived in this country they impressed on our people how important it was to become expert in Roberts Rules of Order, and they did in very short order, and adjusted very quickly, and that has become the tradition in the last 75 years or 70 years now, that we conduct our meetings in that manner.