Alaska: The Tycoons of Tyonek

Perched on the rugged shore of Cook Inlet, the remote Alaskan community of Tyonek might well pass for an upper-middle-class Midwestern suburb. Its 60 houses (average price: $25,000), all equipped with modern appliances and television, stand along winding, tree-lined streets. It has a glistening commu nity hall, its own airstrip and guest house. Construction is under way on a modern $737,000 schoolhouse; in the works are a power plant, fire station and store. Yet Tyonek’s conspicuous prosperity is a remarkably recent phenomenon: until the last year or so, the Athabasca Indians who largely make up the village’s population of 270 lived in dismal shacks, barely subsisting by trapping and fishing. Just a decade ago, residents recall vividly, donated food had to be airlifted from Anchorage to save them from starvation.

The sudden transformation was wrought by the prospect of petroleum deposits on the Tyonek Indians’ 27,000-acre Moquawkie reservation. Even so, the ill-clothed, disease-ridden villagers needed pluck as well as luck to reap the benefits. They also needed the dedicated help of Attorney Stanley McCutcheon, 48, onetime speaker of Alaska’s territorial legislature, who, as a young man, had befriended the Indians on business trips to Tyonek, and was determined to keep them from being exploited.

Down from Kilimanjaro. The villagers’ first intimation of possible underground riches came in the late 1950s; in 1962, oil companies moved onto the Indians’ ancestral hunting grounds with rigs and drilling permits from the U.S. Interior Department. The Indians, who had not been consulted, countered by winning a court injunction and $15,000 in fees for the right to drill. But the funds were under the control of the Bureau of Indian Affairs, and when the Tyonek village council tried to tap the account for needed improvements, the bureau was slow to respond. The Tyoneks were even more unhappy when the Interior Department in 1963 began soliciting bids for the long-range leasing of exploration rights on the reservation. Though the proceeds were to be held in escrow pending a decision as to whether the Indians legally owned the rights, Tyonek’s elders went to court once again and succeeded in stopping the bids.

At one point in the dispute, Village Chief Albert S. Kaloa dispatched a telegram informing Interior Secretary Stewart Udall: “We are not savages but civilized human beings in need. If we were savages, we would have your bloody scalp in the potlatch immediately.” Added Kaloa: “We suggest you come down off Kilimanjaro and attend to the needs of the people of Alaska as we pay you to do.” Such badgering had its effect: declaring in 1964 that the Indians were the rightful owners of any mineral deposits, the Interior Department provided federal help in working out an economic-development program for the suddenly wealthy village. The windfall: $11.2 million in exploration rights, plus royalties that could amount to $50 million a year in case of a big strike.

What followed was a spending spree —but one plotted with care. Tyonek Business Manager Seraphim Stephan Sr. took a course in tribal-business administration in New Mexico. An outside accounting firm was hired. Carefully investing their fortune, the Indians bought into the Anchorage construction firm that built their new homes, are acquiring an interest in an air-taxi service whose owner flew countless mercy missions for them before prosperity struck.

Taking the Hint. Having won their struggle with the Federal Government with such heady results, the new-found tycoons of Tyonek were ready for other challenges. When their decision to construct a $1,000,000 office building in Anchorage was blocked by the city council, the Indians pointedly went to Seattle to buy $1,500,000 worth of home furnishings. Local merchants took the hint, pressured the authorities in Anchorage into issuing a permit for the building—whose first tenant will be the Bureau of Indian Affairs. Tyonek next outflanked an electrical cooperative that had been pushing for higher rates for serving the village. By a stroke of luck, gas had just been discovered, and the village decided to use it to generate its own electricity. If all goes well, the Tyonek Indians may become Alaska’s biggest power producers.

Even more promising is the emphasis that Tyonek elders have put on education and jobs. The village council authorized a $5,000 grant for everybody on the tribal roll, specified that most of it had to be applied toward home construction—except when invested in schooling. Already three Tyonek Indians have enrolled to study oil-rig work in California, another has learned diesel engineering in Chicago. Moreover, every construction contract entered into by the village provides for the hiring of local residents, many of whom are thereby learning to be carpenters, plumbers and electricians.

In fact, the Tyoneks expect to fish and trap only for sport in the future. “We will always work,” said Village Council Secretary Emil McCord, 33, as his two sons watched a TV Western last week in their new living room. “Of course, it won’t be so hard.”