479 



Senator Murkowski. I am trying to make a record here, as you 

 can obviously see. Was there not a discussion by Shee Atika of the 

 need to obtain approximately $75 million for its 23,000 acres in 

 Kuiu Cove, and did not they ask the Federal Government to pro- 

 vide that money? 



Mr. Smith. Yes, or the government 



Senator Murkowski. Both of which were impossible to do, unfor- 

 tunately. I was there when the attempt to research the possibility 

 of getting $75 million in cash from the government was made, and 

 I can assure you the government had deaf ears. So, the other alter- 

 native. Was it not a land exchange for part of the value or as the 

 value was proposed for the exchange? 



Mr. Senna. Yes, that is correct. 



Senator Murkowski. Was not extensive exploration done on pos- 

 sible land exchanges done by environmentalists and the SEALL 

 group refused to consider an exchange of wilderness land for the 

 Kuiu Cove land? 



Mr. Mallott. I do not recall the Wilderness land or that particu- 

 lar issue. What we were concerned about was getting or obtaining 

 roughly corporate value, and we would have been more than will- 

 ing to terminate our interest on Admiralty Island. 



Senator Murkowski. And go somewhere else? 



Mr. Mallott. And go somewhere else for an equivalent value. I 

 want to explain. Senator, that during the period or at that time 

 when we were going through the exchange, Shee Atika was under 

 a great deal of duress because of lawsuits being brought by various 

 interests that were preventing us from logging on Admiralty Island 

 and, a point of fact, Shee Atika was very near the point of bank- 

 ruptcy. And I think it was the speculation on the part of many that 

 perhaps a land trade really was not necessary in order for Shee 

 Atika to disappear from Admiralty Island. The fact of the matter is 

 that we did persevere, meaning we survived. 



Senator Murkowski. In other words, you are almost broke? 



Mr. Mallott. That is correct. 



Senator Murkowski. And I conclude that the difficulty here was 

 not that you were not willing for a land exchange of equal value 

 that had timber resources on it, in the same manner as the Angoon 

 effort was made with Kotzebue, exchanging value for value, getting 

 off of Admiralty and going down to Prince of Wales where there 

 was already logging. If you would have had valuable timberland, 

 you would have given up your 23,000 acres on Kuiu Cove? 



Mr. Mallott. Yes, that is correct. It was like somebody holding a 

 gun to our heads in the form of terminal lawsuits, so to speak, 

 asking us to trade for a value that was significantly less than the 

 value of the property. 



Senator Murkowski. So, basically, the talks broke down when 

 you could not get fair value in exchange on land, and since they do 

 not make land any more, the question of whose land would be 

 given — would it be land that had been set aside for the pulp mill 

 sales, would it be wilderness — that was never resolved. And I 

 always felt that we could have given up some less desirable wilder- 

 ness in an area not contingent to Admiralty Island to save Admi- 

 ralty Island from logging. Unfortunately, that did not happen. You 



