The Presbyterians And the North Slope Borough
The first baby to arrive at the newly constructed Public Health Service hospital at Barrow was Eben Hopson, born November 7, 1922. Eben was the son of Al and Maggie Hopson and the grandson of Alfred Henley Hopson, a whaler from Liverpool, England, who settled in Barrow in 1886. Grandfather Hopson’s photographs turn up frequently among the pictures saved by Ann Bannon, the Presbyterian “praying nurse” of the Arctic. The Hopson family has long been active members of the Utkeagvik Presbyterian Church at Barrow.
Young Eben's formal education began and ended at the Bureau of Indian Affairs' Barrow Day School. His political consciousness was raised while still at the day school. When he was 15, Eben wrote to the Commissioner of Indian Affairs in Washington, D.C., to complain about the school principal's use of unpaid student labor on small BIA public works projects. When the BIA forwarded the letter to the principal in Barrow, Eben was branded a troublemaker and was prevented from boarding the BIA ship, North Star to travel to the boarding high school. His formal education ended.
No matter. His political education was just beginning. Eben grew to manhood in his hometown of Barrow, married, served in the U.S. Army, returned to Barrow and eventually entered the political process on a very adult level. He served in the Alaska Territorial Legislature and as a first chairman of the Arctic Slope Native Association. He was active in the Land Claims Movement and was among those who fought for the formation and continued life of the North Slope Borough. He served as the borough’s first mayor and was the founder of the international Inuit Circumpolar Conference. He fought cancer for several years before dying at the Barrow hospital where he was born. He expired June 28, 1980 at the age of 57.
The North Slope Borough, of which Hopson was the founding mayor, came into being on June 22, 1972. In Alaska, a “borough” is roughly the equivalent of a “county.” This “county” is 88,000 square miles in size and is home today to about 9,000 persons. Within its borders are also vast mineral deposits, most particularly oil.
The Navy explored the area for oil during World War II and set aside Petroleum Reserve IV. Nothing more had been done regarding the oil supposedly contained below the surface until the discovery of oil on the Kenai Peninsula of Alaska in 1957. Eyes turned once more to “The Slope” and the search for more deposits intensified during the early 1960s. Discoveries at Prudhoe Bay on the North Slope precipitated in 1969 the largest oil lease sale ever held -- netting $900,000 for the State of Alaska.
“In 1958, when the people of the North Slope area voted overwhelmingly for Alaskan statehood, they did so for the same reason as nearly all Alaskans voted for statehood. They wanted to right to determine for themselves what they would do and when they would do it,” Hopson wrote in 1973.
Among the first priorities were local control of public education, the provision of health and sanitation services, and environmental planning and conservation. The overriding goal was “to determine for ourselves the nature of our destiny ... that is why we established our North Slope Borough,” Hopson said. To accomplish any of the above, the local residents would have to establish a local tax base. The mechanism available to them through the Constitution of the State of Alaska was the formation of a local governmental unit called a “borough.”
The oil companies fought the formation of the North Slope borough at every turn. Such a governmental entity would have local taxing authority and the land leased by the oil companies in 1969 would be within the boundaries of that entity. The goal of the oil industry was to curb, if not entirely eliminate, the taxing authority of this upstart local government controlled by Inupiat Eskimos. The war was on.
While the oil companies did battle with the Inupiat at the Boundary Commission level, the State Legislature, and in the courts -- the fledgling government still needed funds with which to establish their government and begin governmental services. Their taxing power was tied up in court.
Here is where the United Presbyterian Church, USA, enters the picture.
Normal commercial sources for local government financing were unavailable to the North Slope borough because of the oil company litigation. They needed short term financing pending the resolution of the taxing authority issue in the courts.
The Borough adopted a resolution authorizing the sale of $500,000 worth of “revenue anticipation bonds” on November 7, 1972. They were to be paid back at six percent interest in full, on or before June 30, 1973, the end of the borough’s first fiscal year of operation.
Eben Hopson, now mayor and also an elder in the Utkeagvik Presbyterian Church, had already begun exploring the appropriate manner in which to approach the Presbyterians. On November 30, 1972, Lloyd Ahvakana, the mayor’s administrative officer, wrote the Rev. Charles White of the Utkeagvik:
"Since our Borough area is predominantly of Presbyterians," he said, “We are requesting that the session initiate a request of the Synod of Washington-Alaska to purchase Revenue Anticipation Notes for investment, and some of the request of National Presbyterian Funds,” Ahvakana continued.
“It is essentially important to the Borough to have the session consider this matter seriously, due to difficulty in securing private funds for operation of the borough’s activity.... This is one more time that we can depend on their help during our period of non-cash flow, due to lateness of tax bill mailouts, and civil action 72-834...”
Hopson himself followed up with a letter to Reverend White December 4, indicating that the borough would need approximately $800,000 in revenues for operation of the first fiscal year. To date, $100,0000 had been sold to the State of Alaska; $50,000 to various Alaskan banks, and $25,000 to supportive individuals.
The process began winding its way through the Presbyterian channels, with numerous letters sent in support of the proposal, as well, as letters suggesting “reality therapy” as to whether or not the borough would actually be able to repay the notes.
It wasn’t until July 14, 1973, that the United Presbyterian General Assembly Mission Council voted to purchase $150,000 of bonds “to help residents in a remote section of Alaska maintain their own government”.
The vote was 15 to 14. And the bonds were purchased.
As mentioned in the previous section, the most significant part of the story came during the 1974 General Assembly, when Elder John Upicksoun of the Arctic Slope Native Association -- which included two-thirds of the session of the Utkeagvik Presbyterian Church -- hand delivered a check in the amount of $245,000. The borough had received their long expected oil monies and were repaying both an earlier grant which helped fund the Land Claims fight itself and the borough’s revenue anticipation bonds in one lump check.
Press Release, Presbyterian Office of Information:
DENVER, July 14 -- The purchase of $150,000 in revenue anticipation bonds to help residents in a remote section of Alaska maintain their own government was approved today by the United Presbyterian General Assembly Mission Council.
The investment, made in concord with actions of local, area, and regional bodies of the denomination, is designed to help the North Slope Borough function until litigation concerning its authority to exist and to levy ad valorem taxes is settled.
The borough, which encompasses the Prudhoe Bay oilfields, covers about 88,000 square miles across the extreme edge of Alaska. It was incorporated officially in February 1972, after approval by the Alaska State Boundary Commission.
A short time later seven petroleum companies (Mobil, Exxon, BP, Union, AMOCO, Amerada Hess, and Phillips) filed a petition asking a review of the boundary commission’s action, contending that the borough did not meet the state’s incorporation standards. The state’s Superior Court upheld the Boundary Commission. The oil firms appealed to the state Supreme Court, which is expected to rule on the question next fall.
Last month the oil firms also obtained a preliminary injunction prohibiting the collection of taxes levied on the companies’ equipment and non-producing oil holdings in the borough, stopping tax collection on about three-fourths of the borough’s assessed valuation.
Until these questions are settled, the borough is dependent largely upon the sale of revenue anticipation notes for its operating expenses.
`The Mission Council’s action came eight months after the investment was endorsed by the United Presbyterian Council on Church and Race, and after two months of intensive study by the Mission Council’s Committee on Mission Responsibility Through Investment. The vote today followed extensive discussion on the issue.
The margin was 15 to 14. (Emphasis added.)
Proponents of the church investment cited these reasons, among others, for supporting it:
• The desire for self-government on the part of the approximately 3,500 residents of the isolated region, which constitutes a workable and historically related unit.
• The need for a regional high school for students of the North Slope, who have to travel as far as Oregon and Oklahoma for their education, staying for nine months in boarding schools and in cultures markedly different from their own.
• The desire of the North Slope residents to have the oilfields in the area developed uniformly with careful planning, including the protection of the Eskimos' traditional way of livelihood and life.
• The support of other levels of the church for the investment, including the session of the Utkeagvik Presbyterian Church of Barrow, Alaska; the Presbytery of Yukon; the Synod of Alaska-Northwest; and the Council on Church and Race.
• The stimulation of funds from other sources, including the agreement by the State of Alaska to purchase one dollar in North Slope revenue anticipation bonds for every two dollars of purchases by other groups.
Opposition to the purchase centered on the availability of funds for such undertakings, the concern that the nation’s fuel supply not be adversely affected, and the concerns expressed by oil companies:
• It was noted that funds not already earmarked for particular causes are currently estimated at $2,650,000; and that these funds should not be further reduced at this time.
• Concern was expressed that the investment might have -- or be interpreted to have -- limiting effects on petroleum supplies.
• The oil companies (as noted in the investment committee's report to the Mission Council) have opposed the creation of the borough based on the belief that "the only reason the borough included the oil fields was to tax the oil, the fear that they will be excessively taxes and have strict planning imposed upon their operations, and the belief that the borough will not provide services (such as planning, police protection, road planning, and environmental protection) in return for the tax revenues."
• The oil firms contend that the borough does not meet state geographical standards because of the distance of the oilfields from the enter of population.
• The risk involved in the bond purchase may be high, in that court decisions going against the borough could jeopardize the possibility of any repayment on the bonds.
• The additional feeling was expressed that “tax revenues from oil rightfully belong to all the residents of Alaska and should be used to benefit the entire state.”
In the report the investment committee expressed -- and the majority of the Mission Council agreed -- that the investment would be “consistent with the mission goals of the church,” noting that “we affirm the right of self-determination” as “central to our understanding of mission in the ‘70s.” The report added that “it is consistent with our mission to stand with the less powerful,” that “it is clearly the mission of the church to use its invested funds as investment rather than as grant money,” and that “this situation is an investment opportunity that will help us forward our mission and provide a 7.5 percent financial return as well.”
A motion to reconsider the investment matter was made later in the Mission Council meeting, and was defeated by a 15 to 12 vote.
--end of release --
Mayor Eben Hopson's 1976 Testimony Before the Berger Inquiry On the Experience Of the Arctic Slope Inupiat With Oil and Gas Development In the Arctic
A Canadian Royal Commission, headed by Supreme Court Justice Thomas Berger, conducted the Mackenzie Valley Pipeline Inquiry, an exhaustive two-year study of the likely impact of oil and gas development throughout the Western Canadian Arctic.
Mayor Eben Hopson was invited to testify before the "Berger Com-mission." Following are pertinent excerpts from that testimony:
... We Inupiat of the Arctic Slope and Northwest Alaska provided much of the leadership of the Alaska Native Land Claims Movement in the 1960s that led to the passage of the Alaska Native Claims Settlement Act of 1971.
... I got actively involved in the Movement in 1965, and served as the first Executive Director of the Arctic Slope Native Association. Later, I served as Executive Director of the Alaska Federation of Natives. I was in a good position to view the Land Claims Movement from the inside. We sought an equitable solution to our land claims.
... The Alaska Native Claims Settlement Act provided for 40 million acres in fee simple, and $1 billion in cash, plus interest, over twenty years. My regional corporation will receive roughly one twelfth of that.
... But the Land Claims Movement involved more than a complex real estate transaction. While we worked toward a settlement, we also worked for local government. At the same time that our Arctic Slope Native Association filed our Land Claims, we began organizing our regional, home-rule municipal government under the terms of our State Constitution, and the Alaska State Municipal Code, which I had a hand in drafting when I serve in our State Senate. So we were familiar with how to organize local regional government in rural Alaska.
... Beginning in 1965, our work for local government resulted in the creation of the North Slope Borough in 1972.
... Local government is resisted at every turn by the oil industry in the name of tax avoidance....
... Alaska has a Local Boundary Commission to oversee the organization of local government, and the decision and rulings of this Commission are final unless modified or overturned by the courts or the State Legislature.
... The rules to follow in borough organization are fairly simple. We followed them, and filed a petition for a first-class borough for our entire Arctic Slope regional community, which included Prudhoe Bay.
... Oil corporation lawyers appeared before the Local Boundary Commission to oppose our petition, saying that it was improper for our small, widely-scattered population to organize such a large area into a single municipal government capable of imposing property taxes upon Prudhoe Bay industrial property, especially in light of the fact that none of our community lived within 150 miles of the Prudhoe Bay oil field. They said that our petition was not fair to the oil industry.
... When our Local Boundary Commission considered our petition, I was employed as a special assistant to Governor Egan, who had regained the governorship in the elections of 1970. I was able to watch after our borough petition, and saw it through all the steps through which it had to pass. When the Local Boundary Commission finally approved our petition in 1972, I resigned from the Governor's staff to run for Mayor of the new North Slope Borough.
... I ran for an office that I was not sure would actually exist, for some oil corporations went to court to challenge the constitutionality of our Local Boundary Commission's approval of our petition.
... Under our law, upon the Local Boundary Commission's approval of our petition to organize borough government, the State was required to hold elections to submit borough organization to referendum for all registered voters within our proposed borough area, and to elect borough officials.
... The oil corporations tried to get the courts to enjoin the State from holding this election, but failed. When our Superior Court held for the Borough's constitutionality, the decision was appealed by the oil corporations to our State Supreme Court. When our State Supreme Court upheld our Borough's constitutionality, we thought that we had won, but not so' the oil corporations carried the battle against local government in the Arctic into the political arena of the State Legislature.
... The oil pipeline would have to cross State-owned land, putting the State in a good position to derive maximum benefits for our citizens from Prudhoe Bay oil production. In 1972, the State Legislature enacted a package of oil and gas revenue and regulation legislation designed to maximize State revenue, and reinforce the State's role in environmental protection and insuring maximum employment of resident Alaskans on pipeline construction.
... This legislative effort caught the oil industry unprepared, so the industry threatened not to build the pipeline unless the 1972 oil package was repealed or heavily modified. These threats were taken seriously.
... The 1973 oil shortage was in full swing around the United States. This all contributed to a political climate in Alaska in which Governor Egan, who had kept the Legislature in session in 1972 until they had enacted his oil package, now had to negotiate with the oil industry.
... The result of these negotiations was the 1973 special session of the Legislature that was called to enact new oil tax and regulatory legislation that repealed or modified much of the 1972 oil package, and destroyed the North Slope Borough's revenue authority.
... We responded to this move by engaging the best legislative consultant and lobbyist in Alaska. He had an offer from one of the oil corporations, but he elected to represent the Borough instead -- for ideological reasons.
... We were able to reach a compromise that enabled the Borough to retain its revenue authority, but we were limited in our ability to tax oil property to $1,000 per capita. The State levied a 20 mill property tax on all oil production property in the State, and taxes paid to the North Slope borough up to our $1,000 per capita limitation would be credited to the new Sate ad valorem oil tax. Our previous authority to tax oil in the ground, and the proven oil reserves, was nullified.
... The oil corporations play rough politics. They do not much care about the welfare of local government, and are even willing to go to the highest authority to undermine local government in the Arctic.
... Soon after the 1973 special session of our State Legislature, we got together with the oil corporation lawyers and lobbyists and agreed to the terms of a truce. We settled a $15 million tax dispute for $5 million; agreed to suspend our sales and use tax for a period of time; and the oil corporations agreed not to oppose our Capital Improvement Program and our municipal bond sales. We planned to sell bonds to raise the money we needed to build new homes, utility systems, schools and other community facilities in our villages, and the industrial utility system at Prudhoe Bay.
... While all this legal and political combat with the oil industry was going on for nearly two years, we had to implement regional borough government from scratch.
... While we fought to defend the Borough's continued existence, we had to build a completely new regional governmental admin-istration. We had to develop our tax rolls; begin establishing assessed valuation for all property within the borough; build a regional educational system from the parts left us by the BIA and the Department of Education; and build a planning department able to deal with oil and gas development, as well as those things that planning and zoning departments usually do.
... Truce with the oil industry meant that ... we could begin a $140 million Borough-wide Capital Improvements Program that would mean full employment in all our villages for the coming decade. We began the C.I.P. in 1974, and construction began in 1975.
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