Report 8-14, Non-Native Managers Secured Millions of Dollars from 8(a) Firms Owned by Alaska Native Corporations through Unapproved Agreements that Jeopardized the Firm’s Program Eligibility

On August 7, 2008, the OIG issued Report 8-14, Non-Native Managers Secured Millions of Dollars from 8(a) Firms Owned by Alaska Native Corporations through Unapproved Agreements that Jeopardized the Firm’s Program Eligibility, which identified two 8(a) participants owned by Alaska Native Corporations (ANC) ─ APM, LLC (APM) and Goldbelt Raven, LLC (Goldbelt) ─ who did not comply with the terms and conditions of their Participation Agreements, creating grounds for their termination from the 8(a) Program. APM is owned by Cape Fox Corporation, and Goldbelt is owned by Goldbelt, Inc.

The firms entered into unapproved agreements that resulted in millions of dollars in 8(a) revenues being paid to companies owned by their two managers. These managers were non-Alaska natives (hereafter referred to as non-natives) who had significant ownership interests in the 8(a) firms. The OIG identified these issues during an ongoing audit of SBA’s oversight of ANC-owned firms in the 8(a) Program based on concerns raised by Congress and the Government Accountability Office (GAO) that ANC-owned firms may be serving as conduits for large businesses.

The OIG recommended five actions to suspend the participants from the 8(a) Program, improve procedures and strengthen program oversight.