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Edward A. Burke (Burke) came to Alaska in 1971 as an
investigator for the U.S. Customs Service. Later, Burke served
as an investigator for the U.S. Drug Enforcement Agency (DEA)
until he was dismissed for misconduct. Eventually, with
petitioner’s assistance, Burke was reinstated by the DEA, with
backpay. During the interim period, Burke worked as a
construction superintendent for the U.S. Public Health Service,
supervising the building of laundry facilities and the erection
of water tanks in native Alaskan villages. During this period,
Burke developed contacts with the native Alaskan village of
Shaktoolik.
In 1983, petitioner and Burke organized INI for the purpose
of building water and sewer systems for native Alaskan villages.
Prior to May 23, 1984, the outstanding shares of INI were owned
50 percent each by petitioner and Burke.
In August 1983, INI entered into the first of two contracts
with the village of Shaktoolik to construct water and sewer
systems (Shaktoolik I). In April 1984, INI and Shaktoolik
entered into the second contract (Shaktoolik II). Burke was
instrumental in obtaining these contracts and was designated the
project manager of Shaktoolik I and II.
The contract price for Shaktoolik I was $1,328,800. Under
the terms of the contract, Shaktoolik agreed to pay $400,000 on
execution of the contract, so that INI could commence operations.
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