Alaska lawmakers
jump into Hawaii
dry dock dispute
FAIRBANKS, Alaska >> Alaska's congressional delegation is getting involved in a disputed Hawaii dry dock acquired three years ago by the Native village corporation of St. Paul.
The dispute lies in whether Tanadgusix Corp. bought the surplus Navy dry dock with the promise that it would move the dock to Alaska.
The General Services Administration said Tanadgusix officials deceived the agency and the company planned all along to keep it in Hawaii.
"It's just a big scam," said Bill Clifford, chief executive of Honolulu-based Pacific Shipyards International, which competes with the dry dock and which filed a lawsuit last year alleging that Tanadgusix and Marisco Ltd., a Hawaii-based ship repair company, conspired to make false statements to obtain the dry dock. "They knew it had to be used in the state of Alaska."
The GSA has proposed to bar a Tanadgusix subsidiary from federal contracting work because of the alleged fraud.
Rep. Don Young, R-Alaska, inserted language in the House version of a national highway bill that calls for terminating all lawsuits related to the dry dock.
On the Senate side, Sen. Ted Stevens, R-Alaska, says he is trying to find a compromise that would send the dry dock to Samoa.
This month, a conference committee of House and Senate members will begin writing a final version of the bill. The committee will decide whether Young's language stays or goes.
Tom Schlosser, attorney for Tanadgusix, said the GSA debarment is misguided and would destroy the company. Tanadgusix earns about 50 percent of its revenue from government contracts to clean up oil spills and military bombing ranges.
Tanadgusix's shareholders are the Native residents of St. Paul, a village of 700 people on a remote Bering Sea island.
The Native company is the main economic enterprise on St. Paul, but with limited options on the remote island, it has invested elsewhere to create revenue and jobs. The company acquired the Hawaii dry dock in 2001 through a federal surplus program.
The floating dock, the length of almost two football fields, was built in 1944 and required significant cleanup and repairs.
Tanadgusix Chief Executive Ron Philemonoff signed a "transfer document" that promised the corporation would not "sell, trade, lease, lend, bail, cannibalize, encumber or otherwise dispose of the property, or remove it permanently for use outside the state."
He also wrote a letter of intent to the Alaska state official who handled surplus property on behalf of GSA, saying the company planned to put the dry dock to use immediately.
He attached a letter from Marisco that Philemonoff said would rehabilitate the dry dock so it could be "safely transported any long distances."
Neither the transfer agreement nor the letter mentions anything about moving the dry dock to Alaska, though.
Schlosser said that's because Tanadgusix never planned to do so and never tried to dupe anyone into thinking otherwise.
"It was perfectly clear to GSA's officers," Schlosser said. "St. Paul Island isn't really in the shipping lanes."
The reference in the letter to safely transporting the dry dock over a long distance did not mean it was to be moved from Hawaii, according to Kevin Kennedy, Tanadgusix's director of marine operations.
"I drafted the phrase 'transported long distances' ... with the intent of keeping TDX's future options for using the (dry dock)," Kennedy said.
U.S. District Judge Ralph Beistline of Anchorage ruled by summary judgment in late 2002 that Tanadgusix had violated its transfer agreement with the federal government by keeping the dry dock in Hawaii.
Tanadgusix appealed the decision and a three-judge panel heard arguments in the case last week in Anchorage.
In a separate case, the Justice Department is seeking $15 million in damages from Tanadgusix under the False Claims Act. The department alleges that Tanadgusix signed an agreement with Marisco several months before obtaining the dry dock from the GSA, a violation of the transfer document.
Philemonoff said Tanadgusix was never convinced GSA's policy would require the dry dock to be moved.
Sen. Daniel Inouye, D-Hawaii, wrote to the Senate chairman of the highway bill conference committee in late April objecting to Young's proposed solution.
"Aside from undermining and interfering with ongoing legal proceedings, (the House language) establishes bad legislative precedent that undermines the respect for the rule of law in our legislative and legal system," Inouye said.