''Jake had forgotten his cellular phone and couldn't be reached,'' said Mr. Kho, a vice president with the National Cooperative Bank. ''This turned out to be a pretty comical event. I would call every couple of days, and the folks at Arctic Slope would respond that Jake was still out whaling.'' It would be three weeks before he finally flew to Portland, Ore., to approve a $15 million loan for Arctic Slope to buy a maker of plastics parts for high-tech companies.
The episode did more than just expose a cultural divide between the button-down American banking establishment and the rough-and-tumble Alaskan frontier. It also highlighted a quandary that Alaska's 87,000 natives have been wrestling with for 25 years: How does a geographically isolated group, with a heritage of living off the land and sea, figure out the smartest way to invest a multibillion-dollar windfall?
In 1971, the Federal Government ceded $962 million in cash and 44 million acres of Alaskan land, including mineral and timber rights, to the state's native inhabitants to help integrate them into the modern economy. The spoils were spread around 12 regional corporations like Arctic Slope and 220 much smaller village companies, which ever since have paid out a portion of their earnings as annual dividends to their stockholders.
Now, though, their efforts finally seem to be paying off. While they have made missteps, the native corporations are diversifying their portfolios as never before. Many are moving aggressively to profit from the stock market boom. Some are buying major stakes in American corporations, or even starting their own ventures in the Lower 48 states.
The investment record of the Sitnasuak Native Corporation, which represents the 2,400 native Alaskan residents of this Bering Sea hamlet, is a striking example of the progress. You cannot travel from one end to the other of Front Street, Nome's main thoroughfare, without putting a nickel in its coffers. The Sitnasuaks (pronounced SIT-nah-socks) control virtually all the prime businesses, from the supermarket and the Napa auto parts store to the heating and rental-car companies, and own seven apartment buildings.
But like the bosses of more conventional companies, Robbie Fagerstrom, the company's chief executive, is under pressure to increase the return on his shareholders' assets. Mr. Fagerstrom avoided trouble by leading his balky directors into the stock market, amassing a $13 million stock and bond portfolio that last year generated 20 percent of the company's operating profit.
''We wanted part of our assets to bring in a steady income regardless of what was happening with our businesses here,'' said the 49-year-old Mr. Fagerstrom, who grew up in Nome and whose training for the chief executive's post included running his own janitorial business. Now, he says, he wants to move from passive ownership of stocks to active control of businesses in the Lower 48. ''If we could get into building construction or rental management, it would make us less dependent on our local economy,'' he said.
Yet, the Sitnasuaks would have missed out on the current bull market had it not been for Mr. Fagerstrom's determination to beat down his directors' resistance to opening a stock portfolio. Because they complained they could not fathom Wall Street lingo, he talked them into taking a course on reading financial reports. Then he waited three years as analysts from the Dean Witter Reynolds Anchorage office molded their class lectures into the right mix of the Harvard Business School and Field & Stream magazine.
''You have to put it in terms they can understand,'' Keith Rivera, senior vice president with Dean Witter Reynolds in Anchorage, said of his clients. ''For example, if they were to go out and experience bad storms while fishing, they wouldn't always turn around and go back. They stick it out.''
Today, the Sitnasuaks' portfolio consists mostly of brand names, with AT&T, Procter & Gamble, Eastman Kodak and Hewlett Packard topping the list. Their directors, who remain very conservative, not only continue to take investment classes, they alsofeel confident enough to help Mr. Rivera with an occasional stock suggestion. Through the end of September, their stock picks were up 21.8 percent for the year.
''Over the next few years, we really hope to increase the amount of money we have in the market,'' Mr. Fagerstrom said. ''It's crucial that it generate a steady income for us.''
Other native Alaskan companies are also spreading their investments ''Outside'' -- local lingo for the 48 contiguous states. Among them are these examples:
*Cook Inlet Region Inc., based on Alaska's southern central coast, recently formed a joint venture with BellSouth of Atlanta to peddle cellular phones and pagers in the Carolinas. CIRI also acquired and later sold majority positions in network television affiliates in Hartford and Nashville, and it plans to buy several Southwestern resort properties and a manufacturing company in Washington later this year. More than half of the company's $56.65 million in operating earnings last year came from its broadcasting and communications holdings in the Lower 48. By contrast, it earned just $2.55 million, after distributions, from oil and gas production and mining.
*Sealaska, a timber-rich native corporation in Alaska's southeastern tip, plans to buy three manufacturing companies in the Lower 48 this year to position itself as a parts supplier to I.B.M. and Motorola Inc. It also has $100 million in cash earmarked for additional acquisitions.
*The Nana Regional Corporation, whose shareholders are primarily whale and seal hunters along the north Bering Sea, signed up with Marriott International Inc. last year to provide housekeeping and food services to Marriott hotels in Alaska and, potentially, in other states. The contract yielded $951,000 in profits last year, almost half the company's total. ''The partnership is generating a lot of cash,'' Shelby Stassy, Nana Regional's vice president for finance, said.
Alaska's native corporations are using several strategies in their heady migration south. The largest hire investment firms to seek out potential acquisitions. CIRI has five full-time executives who only peruse listings of resort properties for sale. Leo Barlow, the chief executive of Sealaska, recently began surfing the Internet for possible deals. But the most common way has been to set up a minority contracting company eligible for jobs set aside by the Government for economically disadvantaged ethnic groups.
Most of the contracts involve grueling work, from sweeping out military bases to refueling jet fighters, but the pay is good. Chugach Alaska, a regional corporation near Prince William Sound, went bankrupt in 1991 but bounded back by landing $300 million in minority contracts with the Army. ''It's been absolutely amazing how we were able to turn ourselves around,'' Michael Brown, Chugach Alaska's chief executive, said. ''The key is that we diversified out of Alaska to stretch from Washington to Honolulu.''
To be sure, some investments have misfired. The Bristol Bay Native Corporation, based along Alaska's southwestern coast, snapped up a 10 percent share in the United Bank of Alaska in the late 1970's. But hammered by bad real estate loans, the bank collapsed in 1986, leaving Bristol Bay with a $2 million loss.
And many companies continue to be plagued by the inexperience of their managers, many of whom have never worked in companies with more than 30 employees. When the Aleut and Nana corporations started a minority contracting subsidiary last year in Charlotte, N.C., for example, they could not find any of their colleagues to accept a top management position at the new venture. The job remains unfilled.
And the Aleut Corporation, hobbled by its board's timidity, allocated only half of its $3.7 million portfolio last year to stocks, with the rest tied up in Treasury and municipal bonds. The portfolio eked out an anemic 7.8 percent gain for the fiscal year ended March, compared with 29 percent for the Standard & Poor's 500-stock index. The Aleuts have since raised their stock holdings in hopes of notching a higher return.
''At a native corporation, any sort of decision -- including investing -- requires an awful lot of hand holding,'' said Dean Parisian, president of Native American Advisors Inc., a money-management firm in Alpharetta, Ga., which advises Indians and Alaska natives. ''Very few of them have college degrees. Most don't know the difference between a preferred stock and livestock,'' neither of which figures much in life in the icy north, he adds. ''That takes some time to overcome.''
Native corporations also face pressure from shareholders to deliver quick cash hits rather than long-term growth. When CIRI's lines of businesses performed exceptionally well last year, shareholders were quick to ask for a greater dividend. CIRI obliged, shelling out $63 million. Stockholders who owned 100 shares, the typical amount, received $10,112.
Further draining profits, companies spend huge amounts on social programs like scholarships and alcohol rehabilitation. Even in bad years, many native Alaskans demand their dividend checks. Especially for those who live in remote villages and get most of their food from hunting and fishing, the money can make the difference between near squalor and reasonable comfort.
''We can live without the dividends,'' said Percy Nayokpuk, who sells ivory necklaces to tourists in the coastal village of Shishmaref, near the Arctic Circle. ''But that extra money makes a tremendous difference in what you can do to improve your house or buy clothes for your children.''