U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

85–179 PDF 2003

S. HRG. 108–22

NOMINATION OF ROSS O. SWIMMER

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

ON

CONFIRMATION HEARING OF THE NOMINATION OF ROSS O. SWIMMER

TO BE SPECIAL TRUSTEE FOR AMERICAN INDIANS, DEPARTMENT OF

THE INTERIOR

FEBRUARY 12, 2003

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

DANIEL K. INOUYE, Hawaii, Vice Chairman

JOHN McCAIN, Arizona,

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

ORRIN G. HATCH, Utah

JAMES M. INHOFE, Oklahoma

GORDON SMITH, Oregon

LISA MURKOWSKI, Alaska

KENT CONRAD, North Dakota

HARRY REID, Nevada

DANIEL K. AKAKA, Hawaii

BYRON L. DORGAN, North Dakota

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

PAUL MOOREHEAD, Majority Staff Director/Chief Counsel

PATRICIA M. ZELL, Minority Staff Director/Chief Counsel

(II)
(III)

C O N T E N T S

Page

Statements:

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, chairman,

Committee on Indian Affairs ....................................................................... 1

Carson, Hon. Brad, U.S. Representative from Oklahoma ............................. 4

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice chairman, Committee on Indian Affairs ............................................................................... 2

Johnson, Hon. Tim, U.S. Senator from South Dakota .................................. 2

Nickles, Hon. Don, U.S. Senator from Oklahoma .......................................... 3

Russell, Majel, attorney and consultant, Intertribal Monitoring Association ................................................................................................................. 19

Sangrey, Richard, acting chairman, Intertribal Monitoring Association ..... 8

Swimmer, Ross, nominee to be Special Trustee for American Indians,

Department of the Interior ........................................................................... 6

APPENDIX

Prepared statements:

Sangrey, Richard .............................................................................................. 23

Swimmer, Ross (with responses to questions) ............................................... 29

(1)

CONFIRMATION HEARING ON THE NOMINATION OF MR. ROSS O. SWIMMER AS SPECIAL TRUSTEE FOR AMERICAN INDIANS,

U.S. DEPARTMENT OF THE INTERIOR

WEDNESDAY, FEBRUARY 12, 2003

U.S. SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, DC.

The committee met, pursuant to notice, at 10:30 a.m. in room

485, Senate Russell Building, Hon. Ben Nighthorse Campbell

(chairman of the committee) presiding.

Present: Senators Campbell, Inouye, Johnson, and Thomas.

STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

The CHAIRMAN. Good morning. The Committee on Indian Affairs

will be in session.

Welcome to the committee’s first hearing of the 108th Congress.

Congressman Brad Carson will be making an introduction of Mr.

Swimmer today, and speak, of course, in favor, and Senator Nickles

will too. Before they make their statements, the vice chairman and

I will make out statements. Do you have a schedule that is going

to allow you to stay here for a few minutes? Okay.

On February 4, 2003, President Bush submitted to the Senate

the nomination of Ross Swimmer to be Special Trustee for American Indians, an office located within the Interior Department. Mr.

Swimmer is an enrolled member of the Cherokee Nation of Oklahoma. As we heard from several of his friends, Ross Swimmer has

had quite an extensive career.

Having known him myself for a good number of years since he

was with the Department of the Interior once before when I first

came in, I asked him somewhat jokingly, are you sure you want to

do this? Are you sure you want to come back? He is sure, and that

is good enough for me, but he certainly has an extensive background. He has practiced law. He has been a banker. He has been

a general counsel. He was elected Principal Chief of the Cherokee

Nation. He was a CEO of the Cherokee Nation Industries, and

later founded the Cherokee Group. He was also cochairman of

President Reagan’s Commission on Reservation Economies and was

Assistant Secretary of Indian Affairs between 1985 and 1989.
2

Currently, Mr. Swimmer is the Director of the Office of Indian

Trust. If he is confirmed, which I fully expect, he will be the third

special trustee in 8 years, which does not bode well for the job description.

We have received numerous letters regarding this nominee. Most

have been favorable, and in all honesty, some have been opposed.

That is to be expected. These and other letters that are received

in the next 2 weeks will be made part of the record.

At the confirmation hearing of Tom Slonaker I expressed some

frustration of the pace of the trust reform. Here we are 2 years

later and, very frankly and I am not impressed with what has occurred since. The Trust Reform Task Force has failed. The Cobell

litigation continues. The Indian account holders have not received

a penny, although I have to say the attorneys for the plaintiffs

have received over $1 million, which tells me at least some people

would like to keep this going on forever. I am sure that does not

make them happy, but that is my view on it. The Federal Government continues to spend hundreds of millions of dollars a year on

the litigation and in trying to upgrade the systems. I think we certainly need a very strong hand and strong leadership and a new

direction for trust reform.

So I am anxious to hear from Mr. Swimmer and the witnesses

today. I will tell all members that are here with us today that it

is not my intention to take a vote on this nominee today, but do

hope to move it through as quickly as we can.

Senator Inouye, did you have a statement you would like to

make?

STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM

HAWAII, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

Senator INOUYE. Thank you very much.

I wish to join you in welcoming our colleagues from Oklahoma,

the distinguished senior Senator from the State, Senator Nickles,

and Congressman Brad Carson, as we meet to consider the President’s nomination of Ross Swimmer to serve as Special Trustee.

I also wish to welcome our old friend Ross Swimmer to the committee today. Over the years, this committee has worked with Mr.

Swimmer on a variety of issues, and we look forward to working

with you again, sir.

Thank you.

The CHAIRMAN. Senator Johnson, did you have an opening statement?

STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM

SOUTH DAKOTA

Senator JOHNSON. Thank you, Mr. Chairman.

Chairman Campbell, Vice Chairman Inouye and members of the

committee, I appreciate holding this hearing today. The tribes from

my home State of South Dakota are deeply impacted and concerned

about the present and future challenges faced by the Department

of the Interior, Bureau of Indian Affairs, and the Office of Special

Trustee.

By law, the Federal Government must protect the interests of

tribes and its members as their trustee. The facts have dem-
3

onstrated that the Federal Government in fact has not lived up to

its responsibilities to tribes. Understandably, many tribes are angered by the fact that the trust fund accounting problems are still

not yet remedied. Perhaps born out of the frustration, many tribes

are expressing, frankly, a lack of faith in Mr. Swimmer’s ability to

turn the current situation around. Many of the tribes’ concerns are

longstanding and I feel compelled to address them at this time.

The first concern stems from the fact that Mr. Swimmer appears

to be caught in an inherent conflict. I understand that as Director

of the Office of Indian Trust Transition, Mr. Swimmer is largely responsible for the Fiduciary Obligations Compliance Plan submitted

last month by the Department of the Interior, in accordance with

an order by Judge Lamberth.

I am concerned by the appearance, if not the reality, of conflict

of interest created by Mr. Swimmer’s past involvement with trust

reform. In his current role, Mr. Swimmer finds himself largely defending the Department’s actions in litigation. If he is confirmed,

he must turn around and then serve as many of the plaintiffs’ Special Trustee. I hope to hear from Mr. Swimmer today regarding

how he intends to reconcile that conflict.

My second concern regards whether Mr. Swimmer intends to utilize an appropriate trust standard. Pursuant to the 1994 Act, the

Special Trustee is charged with the duty of monitoring the reconciliation of tribal and individual Indian money trust accounts to

ensure that the Bureau provides the account holders with a fair

and accurate accounting of all Trust accounts. If the Department

assumes that tribal accounting claims must go through an administrative review, this could mean that Mr. Swimmer will be in charge

of determining that the accountings provided are fair and accurate.

This would be the responsibility of the same individual who has advocated for the privatization of trust management outside the government, without the government first providing an accounting.

Once again, there are concerns about conflict of interest.

My final concern regards consultation. I am hopeful that Mr.

Swimmer and the Department have learned the lesson of BITAM.

Consultation is of paramount importance to the tribes. Tribes want

to be consulted before the government takes action. Without consultation, it is simply impossible to know whether the trust reform

program appropriately serves tribal interests.

I look forward to hearing from Mr. Swimmer and the witness

today. I hope today’s hearing will help to continue the dialogue between the Department and the tribes relative to these important

issues.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you, Senator Johnson.

Now we will turn to Senator Nickles for his introduction, and

then to Congressman Carson.

STATEMENT OF HON. DON NICKLES, U.S. SENATOR FROM

OKLAHOMA

Senator NICKLES. Mr. Chairman, thank you very much. It is a

pleasure for me to be with you again on this committee. Senator

Inouye and Senator Johnson, it is a pleasure.
4

I am very happy today to introduce my friend, a person I have

had the pleasure of knowing, working with and respecting for

many years. I have had the pleasure of knowing Ross Swimmer for

more than 20 years.

Senator Johnson, the President could not have picked a better

person for maybe one of the most difficult, thankless jobs in Government. We all know that these trust management funds have

been a mess for a long time. The President could not have picked

a better person anywhere in the country, in my opinion, than Ross

Swimmer, to help resolve and solve some of these questions. Some

people say it is insolvable, but I say, with Oklahoma having the

second-largest Indian population in the Nation, that Ross Swimmer

has the experience to help solve the problems.

Ross Swimmer has the experience. He has been Principal Chief

of the Cherokee Nation for 10 years, one of the largest tribes in the

Nation. He has been Assistant Secretary of the Interior for many

years, in charge of Indian Affairs. He also has a private sector

background. He has been a banker. He has been head of Cherokee

Nation’s Industries, a multimillion dollar company employing a lot

of Native Americans. He is a member of one of the most prestigious

law firms in the State of Oklahoma.

Those assets, attributes, qualifications, all of which are vitally

important to resolving and untangling some of the very difficult

things that we have in Indian trust funds and management of

funds.

Mr. Chairman, I am delighted to be here to recommend wholeheartedly my friend Ross Swimmer for this very difficult job. I appreciate your having the hearing. I appreciate your moving the

nomination very quickly. This is a job that we need an individual

such as Ross Swimmer to take this responsibility and meet this

challenge head-on. So it is a pleasure for me to join the committee

today to recommend his confirmation.

The CHAIRMAN. Thank you for your statement. Depending on

your schedule, I invite you if you have the time to sit with us here

at the dais if you would like. We would enjoy having you.

Senator NICKLES. Thank you.

The CHAIRMAN. Now, we will turn to Congressman Carson, who

in addition to being a Congressman from Oklahoma is also a member of the Cherokee Tribe, too—one of the two House Members who

belong to a federally recognized tribe. Welcome, and please proceed.

STATEMENT OF HON. BRAD CARSON, U.S. REPRESENTATIVE

FROM OKLAHOMA

Mr. CARSON. Thank you, Chairman Campbell, and good morning

to you, to Vice Chairman Inouye and to Senator Johnson as well.

I want to join with the distinguished Senator from Oklahoma,

Senator Nickles, in thank you for having this hearing today, and

to join him in offering my support for the nomination of Ross

Swimmer to the position of Special Trustee for the Office of Special

Trustee for American Indians within the Department of the Interior.

Like me, as you mentioned, Mr. Chairman, Mr. Swimmer is an

enrolled member of the Cherokee Nation. He hails from the Second

District of Oklahoma, which I have the pleasure of representing in
5

Congress. Many tribes in my District—indeed, my District is more

Native American than any in the entire country—but many tribes,

including the Cherokee Nation, support the nomination of Mr.

Swimmer.

We are pleased today to be joined by his wife, Margaret, who is

sitting behind me, who is one of the most distinguished lawyers in

Oklahoma and practices for a very well known and large firm in

the State, too.

As everyone in this room knows, the responsibilities of Special

Trustee are daunting, to say the least. Accounting for Indian trust

moneys has been an insurmountable challenge to this Administration and to previous Administrations. While, like Senator Nickles,

I do not envy the task that is being put on Mr. Swimmer, I do admire him for once again answering the call to service to help sort

through the challenges in managing and accounting for Indian

funds held in trust by the Federal Government.

Mr. Swimmer’s experience in the public and private sectors make

him uniquely suited to confront Indian trust fund management and

accountability. On the tribal level, Mr. Swimmer has served three

successive terms as the Principal Chief of the Cherokee Nation, the

second-largest tribe in the country. On the Federal level, Mr.

Swimmer served as the Assistant Secretary of Indian Affairs from

1985–89. In the private sector, as Senator Nickles outlined, Mr.

Swimmer served as the president of two banks in Oklahoma, the

First National Bank of Tahlequah and the First State Bank of

Hulbert.

Without a doubt, the Department of the Interior’s Indian Trust

management operations must be brought into the 21st century.

This will require a concerted effort by individuals knowledgeable

about Indian trust funds from the tribal and from the Federal perspective. I believe Mr. Swimmer’s professional background brings

to the Special Trustee position a combination of experience and

knowledge necessary to confront the task of improving the accountability and management of Indian trust funds. Indeed, I would

dare say there are few people in the entire country, much less Indian Country, who combined the unique political, legal and financial experience that Mr. Swimmer offers us.

I certainly respectfully request that this committee support the

nomination of Ross Swimmer as Special Trustee for American Indians. I believe that all of the many valid concerns raised by the committee today, especially Senator Johnson, will be well addressed in

forthcoming years by Mr. Swimmer in this position.

I thank the committee for their indulgence.

The CHAIRMAN. Thank you for your very positive statement. Congressman Carson, if you can stay, please do so. If you cannot, I

would just also remind you if you have not joined the American Indian Caucus yet, please do so.

Mr. CARSON. I am vice chairman over on the House side, Senator, so thank you so much.

The CHAIRMAN. Thank you.

Since we only have one person on the first panel and one on the

second, I think I will ask both of them to take seats at the table

the same time. That is, Richard Sangrey, the acting chairman of
6

the Intertribal Monitoring Association from Albuquerque. Welcome,

Richard. And of course, Mr. Swimmer, our nominee.

Mr. Swimmer, perhaps we ought to take your testimony first. If

you would go ahead and proceed, we will follow with Mr. Sangrey,

then we will ask questions in different rounds.

STATEMENT OF ROSS O. SWIMMER, NOMINEE TO BE SPECIAL

TRUSTEE FOR AMERICAN INDIANS, U.S. DEPARTMENT OF

THE INTERIOR

Mr. SWIMMER. Thank you, Mr. Chairman, and Senators on the

committee. I greatly appreciate the opportunity of being here this

morning. I also so greatly appreciate the committee setting this as

one of the first actions for the new Congress.

I think it goes without saying that the Senate Indian Affairs

Committee is one of the most important to American Indians, if not

the most important in the U.S. Government, the U.S. Congress,

certainly. I think that has been demonstrated through the work of

the staff. Your committee staff has been excellent in addressing

issues in Indian Country and, of course, the Senators themselves

have obviously taken a very active interest and worked very hard

on these sometimes intractable issues that we face in Indian Country.

I was asked to take this position in a moment of interest about

1 year ago. The Deputy Secretary and Secretary of the Department

had visited with me on another matter. I happened to send a note

back and said I had a lot of experience in the Trust matters, and

I still have an interest in seeing that these issues get resolved; if

there is anything I can do to help, let me know. They did. They invited me to come up and take on some of the issues and get involved once again. It has been a very interesting and rewarding experience.

What I bring to this job and I think a result of my presence and

ultimately the nomination that I received, is much about my background, Mr. Chairman. As both Senator Nickles and Congressman

Carson mentioned, I have been in the Indian world working one

side or the other, trying to support the sovereignty of tribes, trying

to work out litigious issues, trying to reach settlement on claims

of my own tribe as well as others, and even working in the area

of recognition. That has been going on for nearly 30 years.

During that time, I had also the privilege of having a law degree

from the University of Oklahoma. I practiced private law for about

5 years before I was invited to join the Cherokee Nation Housing

Authority, actually, as my first legal experience in Indian Country.

That was in about 1971, I think.

Following that, however, I was then invited by then-Chief W. W.

Keeler of the Cherokee Tribe to become attorney for the Cherokee

Nation. We were in the process of rebuilding the tribe, or building

a tribe, as many of the tribes were in the early 1970’s. We did not

have a constitution. We had a one-person government. The Principal Chief was it. I believed firmly that we needed a more democratic form of government. When I ran for election as Principal

Chief in 1975, I ran on a platform that I would bring a constitution

forward. It would have a tribal council. It would have a tribal

court, and there would be a sharing of power with that Principal
7

Chief. After my election, we did have a vote on the constitution. It

was overwhelmingly approved, and I was elected to two more terms

after that.

My experience with the Cherokee Nation gave me my first insight into the trust funds matters. We had trust funds on deposit.

We still do today. I looked and observed what was going on there,

and I had some concern about that, mainly at that time with the

investments. As a tribe, we pretty well managed our own accounting for those trust funds, but I was not always satisfied that the

investment of the trust funds was what it should be. Following that

experience with the Cherokee Nation, I was invited by Secretary

Hodel and President Reagan to come to Washington as the Assistant Secretary, at which time I had many, many things on the agenda. The Indian Gaming Act was passed at that time. I began a

move toward what became known as self-governance, trying to

bring tribes to the next level of assuming leadership and responsibility over Federal funds that were being appropriated for their

benefit. That was very successful, ultimately resulting in many

tribes assuming a greater role and responsibility for the Federal

funds.

My role in the trust funds’ management area really began in

1988. I investigated the work that was being done in Albuquerque

at that time. I looked at our accounting system, our investment

system. I said, this cannot be tolerated. We have to do something.

I inquired about what it would take to bring new technology into

the BIA. I was told it would happen long after I left, because it

would not be possible to do in the short time of that Administration. I said, what we need is an accounting system that is similar

to what the private sector uses. I suggested we go out and try to

find that system. It has been called various things, whether it is

outsourcing, privatizing, or whatever. The idea was to bring an accounting system and an investment system into the BIA.

I understand that after I left the Bureau, those efforts were not

successful until much later. In fact, I believe it was in the late

1990’s that an outside system was actually adopted for the Bureau

of Indian Affairs trust fund accounting. It is a system today being

operated by a company known as SEI Investment Company. They

operate what is known in the industry as a Trust 3000 system. It

is an accounting system. It is state of the art. It is now employed

for the benefit of keeping account of trust funds, and I think is

doing a very capable job. It was very similar to what I had intended to have happen back in 1988, but obviously it did not happen.

With that kind of a background, I feel a need to do this particular job. I believe that I have the credentials to provide the oversight. I believe that I really have the commitment to seeing that

we reach an end goal here of managing the trust funds, accounting

for those trust funds, and making sure that Indian people that oftentimes even now rely on this income from the trust assets for

their daily living, that they receive that income timely and in the

proper amount.

As for the tribes, I feel the same way, having been a tribal leader. It is our responsibility to see that those tribal trust funds are
8

accounted for, paid out as the tribes desire, and are properly managed and vested, et cetera.

So that is why, that and a love of public service and a willingness to finish the job that I think so many have started and tried

to get moving. Things are happening in the Department. It is an

advantage that I have. I have in the past year actually assumed

the responsibility that was in the Special Trustee, and that was to

file the quarterly court reports that the litigation requires. So I

have been able to track a lot of the improvements and the reforms

that in fact are going on.

With that, I have a prepared statement I would like to submit

for the record. I would be happy to take questions.

[Prepared statement of Mr. Swimmer appears in appendix.:]

The CHAIRMAN. Thank you. Your statement will be included in

the record.

Mr. Sangrey.

STATEMENT OF RICHARD SANGREY, ACTING CHAIRMAN,

INTERTRIBAL MONITORING ASSOCIATION

Mr. SANGREY. Good morning, Mr. Chairman, Mr. Vice Chairman,

members of the committee.

My name is Richard Sangrey. I am a member of the Chippewa

Cree Tribe, Rocky Boy’s Reservation, Montana. I serve as chairman

of the Intertribal Monitoring Association, ITMA.

I thank you for this opportunity to testify on the nomination of

Ross Swimmer for this position of Special Trustee for American Indians. ITMA was organized in 1990 to actively monitor the activities of the Federal Government to ensure fair compensation to

tribes and individual Indians for the government’s management of

trust funds. ITMA membership includes 58 federally recognized Indian tribes who represent the largest trust fund accountholders in

Indian Country.

According to recent statistics, Indian tribes in the United States

own the majority of the trust corpus currently under Department

of Interior supervision and management. Our mission is to represent and advocate for these tribal governments.

Before expressing ITMA’s view on Mr. Swimmer’s nomination, I

would like to briefly list our recent and ongoing trust reform activities. We have been monitoring the proposals to restructure the Bureau of Indian Affairs as a method of trust reform. We are working

with the tribal governments to develop alternatives to resolve the

longstanding trust fund and asset management claims. We have

been a presence for tribal governments in the recent trust reform

efforts of the Joint Tribal/DOI Task Force. We are working to ensure that efforts to reorganize the Department of Interior not infringe on sovereign rights of tribal government to govern within

their jurisdiction and not drive wedges between tribal governments

and their members.

For instance, we submitted an amicus brief in the Cobell case expressing concern that a third party receiver could result in an interference and infringement on tribal self-government. We are now

reviewing the amicus brief submitted by the National Congress of

American Indians to the proposed plan for trust reform submitted

by the Department of the Interior and the Cobell plaintiffs. We
9

have drafted a trust reform legislative proposal that establishes

strong trust standards for trust funds and trust asset management,

strengthens tribal governance in the trust reform arena, while ensuring the protection of individual Indian rights over their assets

and funds.

We are also working on crafting legislation to resolve tribal trust

fund and trust asset management plans, and we look forward to

working closely with this committee on this critical piece of legislation.

Regarding the current nomination of the Special Trustee for

American Indians, the ITMA Board of Directors is committed to

working closely with the person selected for this position. ITMA

has determined that as an organization, it will take no position on

the nomination of Ross Swimmer, and that each of our member

tribes must act in their own capacity regarding his nomination.

ITMA is committed to continue to work with the Office of the

Special Trustee to improve the delivery of trust services to Indian

tribal governments and to the individual Indian beneficiaries, and

to make sure that Department of the Interior fulfills its trust obligation owed to these Indian beneficiaries.

ITMA has compiled specific recommendations for the new Special

Trustee with regard to what is known as the ‘‘re-engineering process’’ currently underway at the Department of the Interior. Accordingly, ITMA recommends that OST undertake and implement the

following: An effective and timely consultation method regarding

the necessary responsibilities and business process element

changes resulting from trust management re-engineering; systems

that will effectively manage the critical data regarding all trust

and restricted land managed by Department of the Interior, including a central data warehouse that protects and stores all of the

land data, included but not limited to survey, ownership, heirship,

value and all data regarding land encumbrances, codes and restrictions; a financial system that manages all collections, deposits,

transfers, disbursements, imposition of third-party obligations and

statements of earnings, investment instruments, and closure of all

accounts that relate to the trust assets; a strategy of trust management, education and training so the Department of Interior employees, tribes and individual beneficiaries clearly understand the

many business process elements and responsibilities of trust management.

Training must include, but not be limited to obligations, controls,

inputs, outputs and process flows related to the ways that the Office of Special Trustee conducts trust service management; a process for clear accountability for trust responsibilities, included but

not limited to clear line of authority and responsibility, timeliness

and dedication to quality work; programs that promote self-determination, governance and planning.

One final, but critical issue relating to the funding ITMA receives from the Office of the Special Trustee. Our current level of

funding is $350,000 in fiscal year 2002. Based on the increased

level of trust reform activity, the Administration requested

$450,000 in fiscal year 2003. ITMA has requested $500,000, based

on our workload. As a minimum, we need the level requested by

the Administration, and we need assurance from the Special Trust-
10

ee that the Office of Special Trustee will distribute the full amount

of funding appropriated by Congress. In prior years, the Office of

Special Trustee has withheld a portion of our funding—$40,000 in

fiscal year 2002—and essentially required us to prove that we need

the money. This additional level of scrutiny is not only unnecessary, but also has caused a strain on our relationship with the Office of Special Trustee.

Therefore, ITMA is seeking specific report language in fiscal year

2003 and 2004 appropriation bills directing the Office of Special

Trustee to release and distribute the full amount of funding appropriated by Congress for ITMA. We want to make sure that the new

Special Trustee and the committee are aware of this past problem

and are willing to work with us in resolving this issue.

This concludes my remarks. Thank you.

[Prepared statement of Mr. Sangrey appears in appendix.]

The CHAIRMAN. Thank you.

Before I go to some questions, I would like to invite Senator

Thomas if he has an opening statement, if you would like to make

that.

Senator THOMAS. Thank you, Mr. Chairman.

I am sorry I am late. We had some other hearings going on. I

did want to try to be here. Mr. Swimmer was good enough to stop

by my office and we had a good long visit about the issue that is

here. It is a very difficult one, certainly. There are lots of things

we really have to come up and resolve. It seems to me that he is

going to be a real addition to that.

I just wanted to thank you for this hearing and thank Mr. Swimmer for being the candidate for this job.

The CHAIRMAN. What we will do, since there are several of us up

here, we will just do several rounds. I would like to start with Mr.

Swimmer by telling you that we have a number of letters of support, one from the Cherokee Nation, the Creek Nation, the Choctaw Nation, the Chickasaw Nation, the Seminole Nation, the

Quapaw Tribe, and the Confederated Salish and Kootenai Tribes of

Montana. We also have letters of opposition from the Navajos, the

Oglala Sioux, the Confederated Tribes of Warm Springs, the Iowa

Tribe of Oklahoma, and the Absentee Shawnee.

In looking at some of the letters, they almost always what some

of them believed was your effort to privatize the trust funds. But

as I listen to your opening statement, it seemed to me what you

were doing was trying to use a model of the private sector and use

that model within the government. Would you clarify what it was

you really wanted to do?

Mr. SWIMMER. It has been discussed quite often in Indian Country, more of late than it was then, in my opinion. What I had hoped

to do when I investigated where we were in the Bureau of Indian

Affairs, as I said, it was apparent that we needed some modern

systems. We also were being challenged as far as accounting, and

that was as far back as 1988. There was concern about whether the

accounting system that we were using and the investment system

was adequate and was giving adequate information to the individual Indian participant.

In terms of the investment, you may recall, those of us who were

in the banking industry certainly do, during the 1980’s it was not
11

a particularly good time for banks. One of the comments that was

made by the FDIC was that we always know where the next failed

bank is; that is where the BIA keeps its money. That is not all bad,

because the weaker banks were always bidding high for the BIA

money. The statute on investments says that the Bureau can invest

its funds in government securities or securities that are guaranteed

by the government. As a practice, what was going on then was that

several hundred banks would be called every couple of weeks and

asked what they would bid on a $100,000 CD. Then the bank

would fail and BIA would collect its money from the FDIC, and collect the interest sometime later, usually. It was not a system that

I felt was very professionally run.

What I suggested was that we look at an investment program

more like the private sector would use, and that we go out and solicit advice and that we find private sector companies that could invest those funds on our behalf—not put money in somebody’s bank,

but be as an investment adviser, using investment systems for government securities that were common in the industry, and at the

same time look at an accounting system that again is commonly

used in the private sector, and see if we could not contract for those

services.

There were a couple of efforts made at that, but ultimately the

company that bid on the contract was Security Pacific. I understand after I left the Bureau in 1989 that there were a lot of problems with that. I do not know what they were, but it apparently

did not go anywhere. It actually became part of the whole issue

with trust reform, which I think is positive from that point of view.

The fact was, as I mentioned, we ultimately did manage to engage

a firm that has a Trust 3000 system that we were able to put all

the accounts on. We do today in the Special Trustee’s Office, because the Office of Trust Funds Management was moved over to

the Special Trustee’s Office, they do manage those funds. Once the

funds are received, they are properly invested. We have a government securities program that invests those funds in U.S. Treasuries, notes and bonds and what have you. From there, the accounting is done on the investments and the distributions are made to

the individuals, as they should be.

So that was really the genesis of those comments and the criticism. It just was an effort to modernize the systems at the time

that the Bureau needed to.

The CHAIRMAN. Basically, you are saying some of the things that

we are actually doing now were out of those early suggestions in

the 1980’s.

Mr. SWIMMER. Absolutely.

The CHAIRMAN. We have moved a long way through Senator

Inouye’s leadership, and perhaps mine too, in that we try not to

move legislation, as an example, until we hear very carefully from

the tribes about how they think it is going to affect them. When

you made these suggestions in the late 1980’s, did you suggest that

through the bureaucratic channels, or did you suggest that directly

to the tribes?

Mr. SWIMMER. I think it was pretty widely discussed. I do not remember that there was a lot of comment in Indian Country about

it. I did have a lot of discussion with then-Congressman Mike
12

Synar. I would tell the committee, Mike Synar and I were personal

friends. We were politically at odds, sort of at the extreme of the

spectrum, but Mike was then the Congressman from the Second

District of Oklahoma. He worked very closely with the Cherokee

Nation while I was the Principal Chief. I had great respect for him.

Where we differed was, when I proposed to him that I thought

we should move into an accounting system, and that we should

take the accounts that we have, that we know begin with those balances, and move forward. His opposition was that if you do that,

you will never get to an accounting of the ones behind. He said,

I do not think we should go forward with that plan to start a new accounting system now unless we are sure that we have accounted and have accurate opening balances for everyone.

We had a difference of opinion on that. I thought that we should

go ahead and get the system underway and do it correctly, at least

for the future, while we went back and did the accounting. It was

a friendly disagreement, but he felt strongly that it was a government responsibility, that the government should do this accounting,

and that one way of making that happen was not to change systems until we had actually done the backward accounting as well.

The CHAIRMAN. Thank you.

As you know, we have had two previous Trustees. They both had

a very difficult job and they both left, either resigned or were pressured. You can use whatever terminology you want, depending on

your perspective. Each of them attributed their problems to the

lack of independence within the Department; lack of independence

from the Secretary. Can you tell the committee whether you think,

first of all, that independence of the Trustee is necessary; and second, what in the Secretary’s proposed reorganization gives you the

confidence that you will have that independence?

Mr. SWIMMER. I think the Special Trustee must have the freedom

to tell the Secretary there are problems, but the Special Trustee is

obligated to seek solutions. He cannot simply say we have identified a problem. We are going to think of ways to get it fixed. I

think there are a lot of ways, and part of it is because of the requirements of the Special Trustee. There are a lot of ways that the

Special Trustee can interact with the Secretary. The statute even

says that he must interact with the Director of the BIA. The Special Trustee has to be responsible for trust reform, and at the same

time be able to get the backing of the Secretary and the cooperation. Again, I feel very strongly that the Secretary and the Deputy

and the other leadership in the Department is very willing to do

what is necessary to advance the trust reform and listen very closely to the Special Trustee.

The CHAIRMAN. Let me ask one more before I turn to Senator

Inouye. That is, there are several bills that have been floated. Senator McCain has a bill, S. 175, that would eliminate the Special

Trustee’s Office and replace it with a Deputy Secretary. Have you

looked at that bill?

Mr. SWIMMER. Just in passing, I have.

The CHAIRMAN. Okay.

Mr. SWIMMER. I am aware of it.

The CHAIRMAN. I would appreciate it if you would look at it and

give us some feedback on it. For a couple of years, I have been fool-
13

ing with some language with a bill, too, that would basically—and

I do not have a background in banking and I do not have a background in law—but I have a background in Indians, and I will tell

you what, I have seen them die waiting for their money, and that

is wrong. One of the things that I suggested, and Senator Inouye

and I have talked about, is that in the private sector when you

have a class action lawsuit, usually there is a provision in there

somewhere that if people get tired of waiting for the class action

lawsuit, they can opt out and settle individually. That was one of

the ideas we were floating.

Obviously, the attorneys for Cobell do not like that, but we have

talked to the National Congress of American Indians and some individual tribes, and the Administration, and they all believe it has

some merit. What would your thoughts be on that?

Mr. SWIMMER. I would say anything that helps resolve the litigation would be a tremendous help to Indian Country and certainly

to the Department of the Interior. It is one of the most debilitating,

if not the most debilitating issue as far as trust reform today. It

certainly is a great concern throughout Indian Country.

The CHAIRMAN. If we pursue that, I might ask you to help us

with some of the language.

I would like to turn to Senator Inouye. I do want to tell you before I do, however, that we do not need an answer for the letters

of support, but in some of the letters of opposition to your nomination, I would like that to be part of the record. The letters are, but

I am going to submit on behalf of the committee the questions that

came up in those letters, and have you answer them in writing, if

you would.

Mr. SWIMMER. Certainly.

The CHAIRMAN. Senator Inouye.

Senator INOUYE. Thank you very much, Mr. Chairman.

Before I proceed, may I note the presence of the Deputy Secretary of the Department of the Interior, Secretary Griles. Welcome, sir.

Both prior Special Trustees in testimony before this committee

suggested that the reconciliation of trust accounts be conducted by

an entity totally outside the Department. We have been told that

there are some in the Department who feel that if the United

States is to retain full responsibility and the legal liability for the

management of the resources and accounting of assets, then the

management and the assets must be conducted by the Department.

What are your thoughts on this?

Mr. SWIMMER. I think that trying to take the, as I believe you

are referring to, the historic accounting part out of the Department

for trust funds management would be extremely difficult because

of the interrelationship within the Department of all the other

agencies that have an impact on Indian matters. I just do not believe that it would be a practical solution to attempt to take a portion of the accounting situation and try to separate it from the government—if that was the question. I may not have understood the

question.

Senator INOUYE. So you believe that since the government is to

retain full responsibility and legal liability, then the management

should be in your hands within the Department?
14

Mr. SWIMMER. Yes.

Senator INOUYE. And not even part of that goes out?

Mr. SWIMMER. I am sorry?

Senator INOUYE. You do not expect even part of that to go out

to a third party?

Mr. SWIMMER. No.

Senator INOUYE. Then don’t you think that this would somehow

be in conflict with the proposals that you have been supporting all

along on self-governance and self-determination?

Mr. SWIMMER. I think that it should go out of the Department

in terms of going to the tribes, and certainly the management of

tribal trust funds I have always advocated should go to the tribes

whenever and wherever possible. The 1994 reform Act permits that

to be done. I fully support that. I always have and always supported the concept of self-governance.

I firmly believe that all of the management of the trust assets

should be under the management of the tribes whenever they feel

comfortable in doing that. I am sure, as you have heard from some

of the tribes, there are some that describe themselves as under the

responsibility of the Bureau of Indian Affairs, and they do not accept self-governance. I think that is fine. I think that as long as

we need to provide those services to those tribes directly, as direct

service tribes, then we should do that. But as tribes gain the confidence, the ability and the desire to manage their trust funds and

their trust assets, then I fully support that and believe we should

provide whatever assistance to those tribes we can to help that

happen.

Senator INOUYE. Mr. Swimmer, as former Assistant Secretary

and an attorney, in your opinion is the legal standard that governs

the United States when it manages assets held in trust similar to

the standard that is applicable to a private fiduciary?

Mr. SWIMMER. In many respects, it is. As a trustee, you are always held to a high level of fiduciary responsibility. You have a

duty of loyalty. You have a duty of care. You have a duty to communicate with your beneficiaries. All of those responsibilities and

all of those trust standards that we talk about, however, are all

modified by statute. The statutes that govern the Indian trust are

many. An example of that is in the 1994 reform Act, we have to

provide an accounting under normal trust law to a beneficiary. The

1994 Act actually not only tells us to do an accounting, it says how

to do that accounting. It specifically tells the Department what

goes on that statement.

There are other examples. For instance, in the prudent investor

rule, normally a trustee is required to invest and do so prudently,

but also with moderate amounts of risk so that the return to the

beneficiary is reasonable. The statutes that we have to deal with

there require that we invest only in government securities or the

equivalent. That, of course, is not only the lowest risk investment,

but it is the lowest return. Again, I suggest that tribes probably

would do better using investment advice from the outside, taking

their money and investing it, than what the Bureau can do because

of those kinds of statutory restrictions.

There is a common duty that says you cannot commingle funds

with the trustee. We do that every day because we invest the bene-
15

ficiary’s money in government securities. As the trustee, we are

putting it in the U.S. Treasury by law.

So there are, in terms of the different normal trust standards

that you might see in the private sector, they do exist in the Indian

Trust as well, but generally are modified quite a bit by different

statutes. We are much different. In the private sector, you tend to

look at the trust document for guidance. If as a banker I have a

trust set up, I usually have a document that backs it up and says,

here are the things you are going to do; here are the beneficiaries;

here is how I want you to distribute the funds; and here are the

limitations on investing.

In our world, it is governed by statute. We do not have that document, but we do have a set of laws and regulations that govern

how we manage that trust.

Senator INOUYE. I asked that question because in my reading of

the arguments before the Supreme Court in the Navajo case, the

government suggests that it has no fiduciary standard, and that

the United States has no legal obligations to the beneficiaries beyond that set forth explicitly in the law. Would you go along with

that?

Mr. SWIMMER. It is an argument that is going on right now

among the lawyers and in the litigation. I do believe that our trust

is governed by statute, and I think that we are responsible to administer that trust in accordance with the statutes. Oftentimes,

there can be different interpretations of a statute, about the degree

of responsibility and whether we have exercised that responsibility

appropriately, and that may be an issue in the Navajo case.

I believe that we do have the fiduciary duty and that we have

to overlay that duty with every statute and every regulation that

we administer. We have to do it. If the law says we are to collect

the money for beneficiaries, our duty is that we collect it timely

and we invest it timely. We cannot simply collect it and leave it

on somebody’s desk for 1 month while it is not gaining interest.

So we do have the additional responsibility as a trustee not only

to collect, but to be sure that it is invested timely and appropriately accounted for. In that sense, I believe that the trustee does

have the additional responsibility of being a fiduciary in the administration of the statutory responsibilities.

Senator INOUYE. It has been long suggested that the trustee

should be able to exercise independent judgment. Do you believe

that under the laws as they apply, you will be able to exercise independent judgment?

Mr. SWIMMER. Senator, I feel very comfortable about that. I really do believe that I can exercise independent judgment and give advice freely.

Senator INOUYE. We have been advised that you were deposed

regarding the Department’s issuance of coal leases to Peabody Coal

in the Navajo case, and also as part of the Administration involved

in the Cobell v. Norton case. Do you believe that this would in

some way compromise you?

Mr. SWIMMER. I do not believe so. I do not believe I was deposed

in the Navajo case. I would have to check the record on that. I was

deposed in Cobell 1 month or so ago. I do not think it would have

any impact on my judgment.
16

Senator INOUYE. These questions appeared in some of the letters

that we have received.

So you do not believe that your involvement in these cases would

somehow compromise your ability to serve as an independent

voice?

Mr. SWIMMER. I do not believe so. As far as Cobell, whoever is

selected as Special Trustee is going to become involved very quickly. So the fact that I have given a deposition in that case I do not

feel would compromise my ability at all to be objective and to exercise the duty as the Trustee.

Senator INOUYE. Thank you, Mr. Chairman. I have a few other

questions, but I think there are others.

The CHAIRMAN. Senator Thomas, did you have some questions?

Senator THOMAS. Yes; very briefly. I note that we had the Secretary up yesterday for a budget hearing in Energy. I noticed that

the budget for your work here has gone up considerably—$130 million. What basically do you see happening different as a result of

that budget?

Mr. SWIMMER. A significant amount of the budget increase for

trust has to do with the backward accounting. It basically has to

do with the Cobell litigation and to do the historic accounting.

There are, however, substantial increases in parts of the budget

that as part of the reorganization will permit the Office of Special

Trustee to have trust officers, and these will be people trained in

the law of trust and in the management of trust, to have trust officers actually located at the local and regional levels of the Bureau

of Indian Affairs, basically to provide advice and guidance and to

work collaboratively with the agency superintendents and the regional directors on trust issues, and infuse within the trust management the fiduciary relationship that sometimes is not present

when decision are made; just to ensure that those issues are highlighted.

The other major impact of the trust officers would be to have a

link with the beneficiaries directly so that there is not a question

when a beneficiary comes to an agency office, to know what their

balance is in their account; when they last got paid; what assets

do they own and where. Now, we have many Indian people who

own properties on different reservations. The trust officer, we anticipate having that information available in one place so the beneficiary can get all of their questions answered.

This is the first time that there has really been that established

beneficiary relationship within the trust area. There is what we

call sort of a one-stop shop where they can come to get the information.

Senator THOMAS. That is good. That is interesting. I am not as

close to it as all of you are, but it just seems like those are things

that should have been done a long time ago in terms of getting this

resolved.

In any event, having read over your resume and so on, you have

done a number of things with the tribes, Cherokee Nation, and in

your own professional life as a banker and a lawyer and secretary

and so on. Special Trustee is a difficult job. What is your vision to

be able to repair the relationship between Indian Country and the

Federal Government?
17

Mr. SWIMMER. I am sorry?

Senator THOMAS. What do you think can be one of the most important things you can do to strengthen the relationship between

Indian Country and the Federal Government?

Mr. SWIMMER. It is a whole host of things that need to happen.

It needs to be in partnership. Whatever the Federal Government

does, and particularly agencies that have a relationship with Indian tribes, whether the BIA, Indian Health Service, HUD, Department of Labor. There are a lot of different Federal agencies today

that deal directly with Indian tribes. They need to have the partnerships there. They need to have the communication with the

tribes.

Within our agency at Interior, because we are the closest with

agencies actually on the ground working with individual tribes, we

need to have better working relationships; better communication;

the word ‘‘consultation’’ is used constantly. We do need to have a

method of doing that. I think what Chairman Sangrey had mentioned, having ITMA as a sounding board and advice to us is important. We spent a year working with the Tribal Task Force in

consultation and negotiations.

So I think the way that we improve that relationship is in partnership, developing a sense of trust in the larger sense, and then

encouraging to the extent that we can—I just firmly believe this— the opportunity, the right to build on the self-governance of Indian

tribes, trying to help them succeed in managing their own affairs

and being governments in the truest sense and doing things that

are governmental.

Senator THOMAS. That is good. I certainly wish you well, and I

am sure most everyone thinks this problem needs to come to some

conclusion in the relatively near future. Thank you.

Thank you, Mr. Chairman.

The CHAIRMAN. I might suggest that one of the best ways I know

of in repairing relationships between the feds and the Indian tribes

is give them the money that we owe them. That would help. We

can only do that with some pretty aggressive efforts on your part

in your new position.

I am going to submit the rest of my questions to you, Ross, in

writing. As you probably know, Secretary Norton appeared at our

Energy Committee hearing the other day on the fiscal year 2004

budget. She informed us that the trust reform request for fiscal

year 2004 is 17 times larger than the original request back in 1996.

It is just skyrocketing. So I think that in this day when we are facing perhaps a 10-year deficit, as you probably know, it worries

some of us when we talk about the potential of throwing more good

money after bad and not making progress on finding a solution. So

I would hope you make that a very strong part of your agenda.

I am going to ask you to do something, maybe you might have

to do it in conjunction with Deputy Secretary Griles, and maybe I

already should have asked him, but February 26 is when we are

going to do our budget hearing, too. By that time, I would like to

have a breakdown, if I could, of the funds spent on both litigation

and trust reform since 1995.

In addition to that, because many of our people who are on both

sides of the issue seem to be just almost locked out and doing
18

verbal battle without very much resolve, I would like to know—as

you know, there have been a number of mediation sessions. I would

like to know what the results of those mediation sessions have

been and the outcomes, too. We do get some periodic updates, but

if you could provide the committee with the latest results of that,

and the efforts that have been made to enter it under the supervision of Judge Lambert, too. If you could do that, I would appreciate it.

Mr. SWIMMER. Sure.

The CHAIRMAN. Senator Inouye, did you have any more questions?

Senator INOUYE. Mr. Chairman, I would like to submit other

questions, but I have just one more.

In the 1994 Trust Fund Management Reform Act, it says that

the Special Trustee must review departmental budget proposals

and must certify in writing, and I quote:

The adequacy of such requests to discharge effectively and efficiently the Secretary’s trust responsibilities and to implement a comprehensive strategic plan.

I am not certain whether you have had an opportunity to look

over the historical accounting plan of individual Indian money accounts and the fiduciary obligations compliance plan, which was

prepared by the Department as part of the Cobell case.

Now, will these plans allow the Secretary to effectively and efficiently discharge her trust responsibilities regarding individual Indian money accounts at issue?

Mr. SWIMMER. The two plans that you refer to were developed,

created specifically in response to particular litigation issues. The

Department has been working for nearly 1 year on developing a

comprehensive trust asset management plan. That plan contains a

going forward look at trust reform, trust improvement, doing a lot

of things in a lot of areas, some of which are not covered by the

litigation.

The plan also takes into consideration the larger plan, the work

that has been done during the past nine months on what we call

the ‘‘as is’’ study, which is defining what all the trust business

processes are and looking at them across the board from agency to

agency and region to region, and then developing what we call the

‘‘2-B’’ model, how are we going to reconcile a lot of the differences

in the way people do business. It is not meant to try to centralize

management. It is meant to try and make the processes consistent

wherever possible, which then helps us in bringing technology software to support those business processes.

I think that plan will lay out the strategy and the business plan

for the trust management for the long term. It should be finished

sometime in the next couple of months. The process, however, of

completing the ‘‘as is’’ and the 2-B and actually going out and making some of these improvements at the local level is estimated to

take up to 2 years to fully implement.

One of the most important things that we have to consider now

in trust management is a very methodical, and sometimes it appears slow, approach, but it is to ensure that we use the money

wisely that is being appropriated for this purpose, and that we are

sure the kind of actions that we are taking are good for the future.
19

Senator INOUYE. So you are saying that as far as you are concerned, you would be able to certify that this new plan that you

just described will allow the Secretary to effectively and efficiently

carry out her trust responsibilities.

Mr. SWIMMER. I believe that is correct.

Senator INOUYE. Thank you very much, sir.

The CHAIRMAN. Thank you, Mr. Swimmer. We really appreciate

your appearance. We will now move to Mr. Sangrey. Let me start

by asking you a little bit about your views on fractionated Indian

lands. Most of us know that that is really one of the main obstacles

to reforming trust management.

A few years ago, we did move a bill that was signed into law to

do a, for lack of a better word, a demonstration project among several tribes to allow them to consolidate some of their lands. It

seemed to work very well, but we have not done that nationwide

for tribes. What is your organization’s belief on the best way to stop

this fractionation, or how we should proceed to try to resolve it? If

you have somebody with you, if she would identify herself for the

record.

Mr. SANGREY. Mr. Chairman, I have Majel Russell who is an attorney and consultant to ITMA who has been working on that.

The CHAIRMAN. Ms. Russell, maybe you would like to answer

that if you can.

STATEMENT OF MAJEL RUSSELL, ATTORNEY AND

CONSULTANT, INTERTRIBAL MONITORING ASSOCIATION

Ms. RUSSELL. Yes; thank you. ITMA has just recently begun a dialog to discuss fractionation problems in Indian Country. We have

identified several different issues that we would like to pursue.

One of them is to do effective probate-type planning or assist tribes

or to basically provide technical advice to tribes on effective probate

planning. We would like to look at a uniform-type probate code

that would work throughout Indian Country.

Back to probate planning, estate planning, we would like to see

tribes assist their members to do knowledgeable wills that would

transfer lands on a one-over-one interest to the individual members, rather than the common wills or lack of wills which just generally create the fractionation problem even to a greater degree.

So we are looking at some probate reform. We are also looking

at technical advice to tribes on estate planning and development of

wills.

The CHAIRMAN. Okay. Thank you.

I would tell you, then, that in another couple of weeks after the

break, we will be introducing a bill that I hope addresses many of

the things you have spoken about. Senator Inouye and I are trying

to proceed with that. In a couple of weeks you will have that bill

to look at. If you would give us some feedback on it, I would appreciate it.

I talked early on a little bit about reaching settlement. I would

like to know, on your Association, would they support congressionally led efforts to reach settlement by individual Indians?

Ms. RUSSELL. ITMA has been involved for a number of years on

attempting to develop a legislative solution to claims from tribes

for trust fund mismanagement. In fact, some years back, ITMA had
20

developed H. Res. 4485 in an attempt to develop a mechanism that

tribes could use for the settlement of claims. We have recently

begun a dialog this past year through the Task Force, again with

the Department of the Interior, to come up with a solution for

tribes who would like to settle their claims.

The CHAIRMAN. Basically, you are talking about the tribes’ solutions and basically, as I understand you, it would delegate the

management functions to the tribes.

Ms. RUSSELL. Yes.

The CHAIRMAN. Is that right? Well, my original question really

was, individual Indian people that would like to settle with the

Federal Government, should they be allowed to opt out of the class

action lawsuit? I guess that is the clearest way I could ask it.

Ms. RUSSELL. Intertribal Monitoring Association Board of Directors has discussed that issue at great length. There are some Board

members who support that opportunity for individual Indians to

have an opportunity to opt out of the class and resolve their claims,

yes.

The CHAIRMAN. Thank you.

Senator Inouye.

Senator INOUYE. Mr. Sangrey, in your presentation and discussion with the chairman, you mentioned that you have recommendations for specific legislation involving the management of trust assets. If you do, can you share it with us?

Mr. SANGREY. Yes, we will. We are having our final drafting session this afternoon and we will share it.

Senator INOUYE. We would like to look it over. Thank you very

much.

Thank you, Mr. Chairman. Are we ready to vote? [Laughter.]

The CHAIRMAN. Yes; I am too, basically, but some members have

asked us to hold this off until our next meeting to actually vote on

your confirmation. So we will postpone that until the next meeting

but from my perspective you should not have any trouble whatsoever. It will be right after the break, February 26. I look forward

to your confirmation. I know you will do a terrific job. I look forward to working with you, and hope that you will have the patience of Job because it is going to require that, and the strength

of Hercules, too, to get you through that new job. I hope that your

wife will be able to put up with that. We had a terrific Oklahoman

here. As you know, Neal McCaleb has resigned. He is also a personal friend as well as a professional colleague of mine. Interestingly enough, his wife is a personal friend of my wife, too, and they

often discussed the trials that you go through when you are in

Washington, D.C.

Let me close by saying I admire you for offering to come back

and try and resolve this problem we are having, Ross.

Mr. SWIMMER. Thank you very much, Mr. Chairman. I think we

bring our wives to these sessions so that you will not beat up on

us too badly. [Laughter.]

The CHAIRMAN. Good thinking.

Mr. SWIMMER. I did want to respond to Senator Inouye’s question

once again. I honestly do not recall that I was deposed in that Navajo case. I would like to research that and I would like to keep that

open. I will not say I was or I was not. I just do not remember it.
21

But I appreciate very much, again, the committee’s work, the staff

of the committee. There are some legislative things that can be

done, and certainly fractionation, I look forward to working with

ITMA and others on those kind of issues, and probate issues. They

are most, most critical to moving forward on the trust reform.

The CHAIRMAN. Thank you, Mr. Swimmer and Mr. Sangrey, for

appearing. This committee is adjourned.

[Whereupon, at 12 noon, the committee was adjourned, to reconvene at the call of the Chair.]

(23)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF RICHARD SANGREY, CHAIRMAN, INTERTRIBAL MONITORING

ASSOCIATION ON INDIAN TRUST FUNDS

The Intertribal Monitoring Association on Indian Trust Funds (ITMA) is a representative organization of the following 58 federally recognized tribes: Central

Council of Tlingit & Haida Indian Tribes, Kenaltze Indian Tribe, Metlakatla Indian

Tribe, Hopi Nation, Tohono O’odham Nation, Salt River Pima-Maricopa Indian Community, Fort Bidwell Indian Community, Ewiiaapaayp Band of Kumeyaay Indians,

Hoopa Valley Tribe, Yurok Tribe, Soboba Band of Luiseno Indians, Southern Ute

Tribe, Coeur D’Alene Tribe, Nez Perce Tribe, Passamaquoddy-Pleasant Point Tribe,

Penobscot Nation, Lac Vieux Desert Band of Lake Superior Chippewa, Sault Ste.

Marie Tribe of Chippewa Indians, Grand Portage Tribe, Leech Lake Band of Ojibwe,

Red Lake Band of Chippewa Indians, Blackfeet Tribe, Chippewa Cree Tribe of

Rocky Boy, Confederated Salish & Kootenai Tribe, Crow Tribe, Fort Belknap Tribes,

Fort Peck Tribes, Northern Cheyenne Tribe, Winnebago Tribe, Fallon Paiute-Shoshone Tribes, Walker River Paiute Tribal Council, Jicarilla Apache Nation, Mescalero Apache Tribe, Pueblo of Cochiti, Pueblo of Laguna, Pueblo of Sandia, Three Affiliated Tribes of Fort Berthold, Turtle Mountain Band of Chippewa, Absentee

Shawnee Tribe, Alabama Quassarte Tribe, Cherokee Nation, Kaw Nation, Kiowa

Tribe of Oklahoma, Muscogee Creek Nation, Osage Tribe, Quapaw Tribe,

Thlopthlocco Tribal Town, Confederated Tribes of Umatilla, Confederate Tribes of

Warm Springs, Cheyenne River Sioux Tribe, Sisseton-Wahpeton Sioux Tribe, Chehalis Tribe, Confederated Tribes of Colville, Quinault Indian Nation, Forest County

Potawatomi Tribe, Oneida Tribe of Wisconsin, Eastern Shoshone Tribe, and the

Northern Arapaho Tribe.

Mr. Chairman and members of the Committee. As the newly elected Chairman

of the Intertribal Monitoring Association Board of Directors, I thank you for this opportunity to testify on the nomination of Mr. Ross Swimmer, a presidentially appointed position created by the 1994 Indian Trust Fund Management Act. My name

is Richard Sangrey. I am a member of the Chippewa Cree Tribe from the Rocky

Boy’s Reservation in Montana and serve my tribe as Chief of Staff.

ITMA is an intertribal organization composed of 58 tribes across the United

States who organized in 1990 to actively monitor the activities of the Federal Government to ensure fair compensation to tribes and individual Indians for the mismanagement of trust funds. ITMA’s membership consists of a large number of those

tribes with significant funds and assets at stake in the trust reform debate. As statistics recently submitted to the Court in the Cobell v. Norton lawsuit confirm, the

tribes in the United States own the majority of the trust corpus currently under Department of the Interior Management, although tribes have not been parties to the

Cobell suit.

ITMA’s mission has evolved over the years to include the monitoring of the Federal Government’s proposals to restructure the Bureau of Indian Affairs to address

the trust mismanagement issues identified by the Cobell v. Norton lawsuit. ITMA

has worked extensively with tribal governments to develop alternatives for settle-
24

ment of tribal historic trust fund mismanagement claims and most recently has

been a voice for tribal governments in the recent trust reform efforts of the Tribal

DOI Task Force.

Throughout this last year of heightened trust reform efforts, ITMA has been most

concerned that reorganization of the BIA not infringe on tribal sovereign rights to

govern lands within tribal jurisdiction. Additionally, ITMA has been most concerned

that reorganization efforts do not drive wedges between tribal governments and

their members. ITMA developed an amicus brief to the Court in the Cobell suit expressing concerns that a third party receiver could result in an interference and infringement on tribal self-government. Further, ITMA has joined with the National

Congress of American Indians in the amicus brief submitted as a tribal response

to the proposed plans for trust reform submitted by DOI and the Cobell plaintiff’s.

The Board of Directors of ITMA is committed to working with the Office of the

Special Trustee of American Indians to improve the delivery of Trust services to Native American Tribes and the individual beneficiaries. ITMA believes that the OST

can effectively resolve issues that have—and will—arise from the re-engineering

process currently underway at the Department of the Interior. The following is a

non-exclusive list of objectives that ITMA believes the Department of the Interior

and the OST must implement if ‘‘trust reform’’ is to mean anything:

1. Establish and implement clear methods to account for the management of Trust

Funds, Trust Lands, Trust Assets and Trust Resources by, at a minimum creating comprehensive Trust Fund, Trust Land, Trust Asset and Trust Resource

ownership, location, and use inventories that provide a method for accounting

to any beneficiary Indian or tribe of what land is being effectively managed, and

where problems or exceptions require greater attention.

2. Establish and implement reasonable methods for consulting with Indian and

Tribal beneficiaries to establish effective plans to manage Trust Funds, Trust

Assets, Trust Lands and Trust Resources that implement the intent of the Indian or Tribe where such implementation is reasonable.

3. Consult with each Indian beneficiary and Tribe in the management of the Trust

Funds, Trust Assets, Trust Land, or Trust Resources managed by the Secretary,

and implement the objectives identified by the Indian Beneficiary or Tribe for

any resource managed for them to the extent practical.

4. Establish clear guidance on what functions with regard to Trust Funds, Trust Assets, Trust Land and Trust Resources are inherently executed by the Secretary

and the OST, and how these functions are to be executed by a Tribe upon the

execution of Tribal Compacting and Contracting agreements under P.L. 95–638

which establishes consistency in the execution of such agreements.

5. Provide a yearly program of education and communication for the Secretary’s and

the OST’s Trust service delivery personnel as well as for the beneficiaries, providing the Secretary’s and the OST’s personnel, the relevant staff of Indian

tribes, and interested individual beneficiaries with an understanding of the Secretary’s and OST’s role and responsibilities with relation to the management of

Trust Funds, Trust Land, Trust Resources and Trust Assets.

6. Build a common data store for all Trust Funds, Trust Land, Trust Resource and

Trust Assets related information. Such a data store shall, at a minimum operate in the following manner:

• Provide a single method of entry for updates and maintenance;

• Avoid redundant or inconsistent data in multiple systems;

• Provide query capability by many organizational units; and

• Provide accurate information for reporting.

7. Establish a Memorandum of Agreement with each tribe regarding the privacy to

be afforded tribal family information.

8. Establish an office to coordinate investigative efforts intended to establish the location of beneficiaries whose whereabouts are unknown.

9. Create an office of Inter-Bureau Communication and Coordination to oversee

daily operations and facilitate communications and issue resolution between

each of the Secretary’s bureaus on issues related to the management of Trust

Lands, Trust Assets and Trust Resources.

10. Segregate the staffing and management of probate responsibilities from all other

Trust Funds, Trust Land, Trust Resource or Trust Asset management activities

to ensure that the decedent’s interests are appropriately balanced with overall
25

Trust objectives, while still providing for the use of integrated data in probate

matters.

11. Establish that the substantive laws or customs any Indian Tribe relating to Probate shall apply first to provide for the distribution of a decedent’s estate. To

the extent there are no tribal laws or customs to apply, such descent shall be

made in accordance with the laws of the state in which the decedent resided

at the time of their death. Where relevant tribal law or custom applies, and allows for estate planning methods to be employed to avoid the need to probate

estates it shall apply and any Indian beneficiary shall have the right to use

such laws to avoid probate to provide for the distribution of Trust Funds,.Trust

Land, Trust Resources or Trust Assets; or where no tribal law or custom applies, any Indian beneficiary shall have the right to elect to provide for an estate plan for themselves under the laws of the state of their legal residence that

includes providing for the distribution of Trust Funds, Trust Land, Trust Resources or Trust Assets.

12. Consolidate all Indian beneficiary probate adjudication activities into a single organization, moving all Deciding Officials into a single organization to simplify

and make uniform the administration of Probate activities.

13. Establish uniform regulations to govern all probate adjudication activities.

14. Implement integrated, nation-wide title and realty information systems that accurately identify Trust Lands, Trust Resources, and Trust Assets, and the complete ownership thereof, all legal encumbrances (mortgages, life estates, etc.),

and non-expiratory rights.

15. Create a single archive system based upon electronic information (and where

electronic information is not available, paper information) provided by the Bureau that complies with Federal record retention policies.

16. Streamline and consolidate, to the extent practicable, recordation and encoding

procedures, eliminating duplicate efforts and data, in an effort to free resources

to ensure that Trust Funds, Trust Land, Trust Resource, and Trust Asset information is maintained in a timely manner.

17. Eliminate redundant staff functions to eliminate inconsistencies across systems

and to reduce the existing backlogs.

18. Implement digital imaging technology at all levels under the Secretary’s and the

OST’s authority, using this technology to maintain a complete and accurate

record of Trust Funds, Trust Lands, Trust Resources, Trust Assets and the ownership and utilization of such funds, land, resources and assets.

19. Develop regulations that provide for an expedited procedure for the acquisition

of fee interests in Trust parcels.

20. Develop regulations that ensure beneficiary consultation, consent and compensation for all rights of way, easements and mineral access agreements that related

to Trust Lands.

21. Establish a specific source of funds to address ‘‘unperfected Rights of Way,’’ that

will be used to remedy Unperfected Rights of Way that negatively encumber

Trust Lands.

22. Establish an office of beneficiary consultation and support services that provides

individual Indians and tribes with a point of contract for all consultation questions regarding the Secretary’s management of Trust Funds, Trust Lands, Trust

Resources and Trust Assets.

23. Develop guidelines for beneficiary consultation to improve the inherent partnership between the Secretary and beneficiaries.

24. Develop guidelines for appraising Trust Assets, Trust Lands, or Trust Resources

that defines appraisal principles, appraisal terminology, the appraisal process,

and the volatility of the real estate market.

25. Implement Trust Assets, Trust Lands, or Trust Resources appraisal training

that all persons who work for the Secretary and who deal with land valuations

must attend. Such training must include a written examination, and no person

who scores below a reasonable standard established by the Secretary shall appraise Trust Assets, Trust Lands, or Trust Resources.

26. Develop guidelines and procedural manuals to provide more specificity regarding

the Forest Management Deduction process, requirements and timelines.
26

27. Reform 25 C.F.R. part 163 to provide more specificity for procedures and requirements of collecting Forest Management Deductions.

28. Consult with Tribes to enhance the regulations, guidelines, policies and manuals

to include clear and specific roles, procedures, formats, reporting and schedules

for the oversight of federally managed and tribally managed forestry programs.

29. With consultation from the Tribes, develop regulations that promote Tribal control and self-determination while at the same time ensuring the Secretary’s obligation to provide oversight and review of Indian Trust asset management programs.

30. Develop and implement regulations that adequately define rangeland trust management.

31. Implement a Geologic Information System based management information data

base and reporting system for all Trust Lands, Trust Assets, and Trust Resources.

32. Develop regulations that regularly monitor and audit the management of Trust

Lands, Trust Assets, and Trust Resources for compliance with the principles of

the Trust Responsibility enunciated herein.

33. Consult with Tribes to develop comprehensive guidelines for the uniform management of all rangeland under the Secretary’s jurisdiction.

34. Initiate a program of workshops for Tribes and individual Indians that provides

information about leading animal husbandry and land management practices,

assists in counseling and problem solving.

35. Identify the most valuable Trust Lands, Trust Resources and Trust Assets and

develop specific strategies for the development of this potential.

36. Create standard procedures and decision criteria for selecting appropriate longterm encumbrance vehicles (lease, permit, assignment, information agreement,

etc.) for Trust Lands, Trust Resources and Trust Assets that applies to and is

enforced within all Bureau regions. Develop standardized consent forms that reinforce Indian Land Consolidation Act consent requirements. Develop regulations to be published in 25 C.F.R. 162 subparts C and D (the Residential and

Business subsections currently ‘‘reserved’’ but blank’’) that clarify procedures for

determining which encumbrance vehicles should be used in each circumstance,

and how such encumbrance is to be uniformly documented.

37. Record monetary liens against lessees if rental payments are delinquent.

38. Enforce against un-consented trespasses on Trust Lands.

39. Restructuring existing lease agreements upon renewal to meet the obligations

imposed by this statute and any regulations promulgated hereunder. Nothing

in this statute shall be construed as terminating or invalidating an existing

lease or agreement related to Trust Land that was otherwise in compliance with

the regulations or practices of the Secretary at the time of its signature.

40. Initiate formal information-sharing programs between the Bureau, Tribes, contracted service providers, and Individual Indian owners of agricultural lands.

41. Conduct a thorough review of key Federal statutes and regulations which can

negatively affect the management and use of Trust Land, Trust Resources and

Trust Assets and provide such report to Congress and all Indian Tribes. Such

report shall include remedies to remove or refine those statutes and regulations

in conflict with the management of Trust Lands, Trust Assets, and Trust Resources.

42. Develop regulations to delegate to Tribes the authority to provide environmental

assessments where such assessments are required for the management of Trust

Lands, Trust Assets, and Trust Resources.

43. Standardize consent forms and develop a single set of criteria triggering the performance of the consent process for the leasing of agricultural Trust Lands.

44. Integrate agriculturally related billings and collections the Integrated Trust

Management system.

45. Develop new regulations that provide a more equitable approach to funding

Trust Asset development strategies among all tribes.
27

46. Review Trust Asset water resources to develop target groups, focused in two areas:

• In areas where water rights are most at risk of being abused—develop rights

communication, negotiation and protection strategies. • Areas where water resources are most valuable to the Trust or may be critical

to the financial well-being of beneficiaries—finance water resources development projects proactively as part of an economic development strategy.

47. Reengineer, streamline, and standardize the Bureau minerals leasing processes

to conform with the principles set fort herein.

48. Update and standardize lease forms, and develop regulations that create an integrated approach to minerals lease management with common systems, data

stores and a documented communications plan.

49. Compile and publish all existing Memorandums of Understanding or Agreement

(an ‘‘MOU/A’’) related to the management of Trust Lands, Trust Assets, and

Trust Resources. This compilation shall include an indication of applicability or

category of each MOU/A, a brief summary of contents, and a reference to who

is the designated responsible party under the Secretary for each MOU/A.

50. Revise and establish clear guidelines for establishing bonding levels for Indian

trust mineral leases that address the conflict between reclamation requirements

and competitiveness of Indian trust mineral assets.

51. Provide training to all persons who work for the secretary related to bonding

mineral leases to ensure that each person is fascicle with and can enforce the

bonding guidelines. The Secretary shall establish a minimum of competence in

this area, and shall test all persons to oversee the bonding of mineral assets.

Only those persons to meet or exceed the Secretary’s standards shall be authorized to oversee bonding for mineral leases for Trust Lands, Trust Assets, and

Trust Resources.

52. Implement electronic document imaging and retrieval capabilities so beneficiary

documents and records can be scanned once and made available to appropriate

Secretarial staff nationwide on demand.

53. Implement workflow or case management technology combined with imaging capability to manage the information and processing flow and ensure that essential steps and controls are taken, as well as minimize process loops and rework.

Decentralize account maintenance through enhancements to information systems and appropriate dual controls, so account administration authority resides

with designated field officials.

54. Develop methods to contract with private banking institutions to accept lease

payments, deposit such funds received , in accounts, provide lock box services,

and document the receipt, storage and investment of funds, and transfer such

documentation to the Integrated Trust Management System.

55. Establish a centralized collection, deposit, and posting information collection

process for documenting the depositing and posting of funds to beneficiary accounts in a timely manner.

56. Develop the guidelines to determine when surveys of Trust Lands, Trust Assets,

and Trust Resources are needed, what type is warranted, and who should perform the survey.

57. Inventory the survey needs for Trust Lands, Trust Assets, and Trust Resources,

with such data becoming a part of the Integrated Trust Management system.

58. Coordinate with other bureaus under the DOI to centralize all survey and land

record keeping activities into one bureau under the Secretary’s direction. Create

one unified automated land information and record processing system that is

compatible with other record systems and easily accessible by everyone needing

the information. The system could include survey and land ownership information and be integrated with other Federal automated record systems, such as

title systems. Encourage Tribes to provide private survey records in the system

so their land information is included.

Regarding the current nomination for the Special Trustee for American Indians,

the ITMA Board of Directors is committed to working closely with the person selected for this position. ITMA has determined, that as an organization, it will take

no position on the nomination of Ross Swimmer and that each of our member Tribes

must act in their own capacity regarding his nomination. ITMA is committed to con-
28

tinuing to work with the Office of the Special Trustee to improve the delivery of

trust services to Indian Tribal governments and the individual Indian beneficiaries

and to make sure that the Department of the Interior fulfills its trust obligations

owed to these Indian beneficiaries.

One final but critical issue relates to the funding ITMA receives from OST. Our

current level of funding is $350,000 in FY 2002. Based on the increase level of trust

reform activity, the Administration requested $450,000 in fiscal year 2003; ITMA requested $500,000 based on our workload. At a minimum, we need the level requested by the Administration, and we need assurance from the Special Trustee

that OST will distribute the full amount of funding appropriated by Congress. In

prior years, OST has withheld a portion of our funding ($40,000 in FY 2002) and

essentially required us to ‘‘prove’’ that we need the money. This additional level of

scrutiny is not only unnecessary but also has caused a strain in our relationship

with OST. Therefore, ITMA is seeking specific report language in the FY 2003 and

2004 appropriations bills directing OST to release and distribute the full amount of

funding appropriated by Congress for ITMA. We want to make sure that the new

Special Trustee and this Committee are aware of this past problem and are willing

to work with us on resolving this issue.

Thank you for the opportunity to submit written and oral testimony. We look forward to continue working with the Office of Special Trustee and Congress.
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56Æ