KODIAK —
Afognak Native Corp. filed the lawsuit against National Union Fire Insurance Company last week, The Kodiak Daily Mirror reported Thursday.
The Kodiak-based corporation is seeking $650,000 from National Union to cover legal costs in the whistleblower case the company has allegedly failed to pay for since October 2015.
The corporation also wants to make sure it won’t have to pay back another nearly $2 million in defense costs since the lawsuit began in 2013.
“We believe (Afognak is) entitled to insurance coverage, and the lawsuit asks the court to declare that our insurance policy covers our defense along with other relief,” Afognak Executive Vice President Alisha Drabek said in an email.
The initial lawsuit was brought by Ben Ferris of Virginia, Afognak’s chief compliance officer. Ferris alleges Afognak set up “sham” corporations to take advantage of a federal government contracting program.
The U.S. Small Business Administration runs the 8(a) program, which provides assistance to small businesses to help them compete in the marketplace.
Drabek declined to comment on Ferris’ complaint because the lawsuit is still pending.
“Afognak takes seriously, and adheres strictly to, all rules and regulations governing the contracting activities of Alaska Native corporations established by the Small Business Administration,” Drabek said in the email.
Afognak’s lawyers have said the federal government has continued to award 8(a) contracts to Afognak subsidiaries even as the Ferris case continues.
