Alaska: The Tycoons of Tyonek

Perched on the rugged shore of Cook Inlet, the remote Alaskan community of Tyonek might well pass for an upper-middle-class Midwestern suburb. Its 60 houses (average price: $25,000), all equipped with modern appliances and television, stand along winding, tree-lined streets. It has a glistening commu nity hall, its own airstrip and guest house. Construction is under way on a modern $737,000 schoolhouse; in the works are a power plant, fire station and store. Yet Tyonek's conspicuous prosperity is a remarkably recent phenomenon: until the last year or so, the Athabasca Indians who largely make up the village's population of 270 lived in dismal shacks, barely subsisting by trapping and fishing. Just a decade ago, residents recall vividly, donated food had to be airlifted from Anchorage to save them from starvation.

The sudden transformation was wrought by the prospect of petroleum deposits on the Tyonek Indians' 27,000-acre Moquawkie reservation. Even so, the ill-clothed, disease-ridden villagers needed pluck as well as luck to reap the benefits. They also needed the dedicated help of Attorney Stanley McCutcheon, 48, onetime speaker of Alaska's territorial legislature, who, as a young man, had befriended the Indians on business trips to Tyonek, and was determined to keep them from being exploited.

Down from Kilimanjaro. The villagers' first intimation of possible underground riches came in the late 1950s; in 1962, oil companies moved onto the Indians' ancestral hunting grounds with rigs and drilling permits from the U.S. Interior Department. The Indians, who had not been consulted, countered by winning a court injunction and $15,000 in fees for the right to drill. But the funds were under the control of the Bureau of Indian Affairs, and when the Tyonek village council tried to tap the account for needed improvements, the bureau was slow to respond. The Tyoneks were even more unhappy when the Interior Department in 1963 began soliciting bids for the long-range leasing of exploration rights on the reservation. Though the proceeds were to be held in escrow pending a decision as to whether the Indians legally owned the rights, Tyonek's elders went to court once again and succeeded in stopping the bids.

At one point in the dispute, Village Chief Albert S. Kaloa dispatched a telegram informing Interior Secretary Stewart Udall: "We are not savages but civilized human beings in need. If we were savages, we would have your bloody scalp in the potlatch immediately." Added Kaloa: "We suggest you come down off Kilimanjaro and attend to the needs of the people of Alaska as we pay you to do." Such badgering had its effect: declaring in 1964 that the Indians were the rightful owners of any mineral deposits, the Interior Department provided federal help in working out an economic-development program for the suddenly wealthy village. The windfall: $11.2 million in exploration rights, plus royalties that could amount to $50 million a year in case of a big strike.