Nome Native Corp. adds fourth name to lawsuit


Sitnasuak Native Corporation filed a lawsuit last month to remove three of its 11 directors for breaking corporate election law. Now it has added a fourth name to the lawsuit — Marie Tozier of Nome.

Tozier is not on the board, but is a candidate for a board seat in the scheduled Sept. 30 election.

The Nome-based corporation says the three board members breached their fiduciary duties to the corporation and its shareholders when they coordinated to send out anonymous mailings to corporation shareholders. Tozier knew of the mailer, the corporation alleges.

If true, that would be a violation of Alaska banking and securities law, which Native Corporations must follow. The corporation is asking that the court decide if the four broke the law.

Charles Fagerstrom, one of the three board members the corporation is seeking to remove, said he alone was responsible for the anonymous mailer that was sent prior to the June 3 meeting. That meeting failed to reach a quorum and has been rescheduled for Sept. 30.

The mailer in question was sent from the unidentified “SNC Shareholders for Free Speech” to 1,000 shareholders. The mailer supported board members Barbara Amarok and Helen Bell for reelection. It opposed the reelection of Jason Evans, who is running for his second term and is the corporation treasurer.

It also gave the readers false and misleading information regarding voting and how the discretionary proxy voting system works, the lawsuit alleges.

With discretionary proxy voting, shareholders cast all their votes for the board of directors’ nominees, essentially signing over their votes to the board to appoint proxies for. A ballot like this is typically signed but not marked.

One of the three accused of violating the board election process and attempting to remove Evans is Edna Baker, who is a former Division of Elections supervisor.  Until last year, Baker oversaw elections in Western Alaska. She retired from her position prior to the voting fraud scandal that rocked District 40.

The other two that Sitnasuak is requesting be removed for colluding on the mailer are Barbara Amarok and Fagerstrom.

“Our number one priority is to protect the rights of all shareholders and we cannot do that if our elections are compromised,” said Sitnasuak Chairman Bobby Evans, who is the brother of Jason Evans.  “Today, we must look to the future and work together to protect our shared legacy while strengthening our values.”

The lawyer from Holland & Knight said it was about complying with banking and securities laws.

“In order to comply with state securities law, Sitnasuak Native Corporation needed to take appropriate legal actions to protect shareholders’ rights and the integrity of future elections,” said Howard Trickey of the law firm representing Sitnasuak.

The lawyer for the defense said it was about power, and the “litigation is a last-ditch effort by the current majority of the Sitnasuak board of directors to retain political control by silencing directors and shareholders speaking out against discretionary proxy voting practices.”

But the corporation’s lawsuit appears to be more about the manner that shareholders would influence elections and whether board elections will be done in a transparent manner. Without calling a halt to anonymous mailings, board elections could devolve into a war of unsigned accusations that besmirch the reputation of those running for a seat.

The new date for the Sitnasuak annual meeting is Sept. 30. On the agenda is the election of four directors to the board. But the timing of the lawsuit could push that date into the future.

Sitnasuak shareholders number more than 2,800 and most originated in Nome and villages in the Bering Strait region of Northwest Alaska.  The are Iñupiaq, Yup’ik and St. Lawrence Island Yupiks. The corporation paid more than $2 million in  economic benefits to shareholders in 2016, including special elder dividends, bereavement benefits, heating fuel and rent discounts, and regular dividends.