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80–867 PDF 2002

S. HRG. 107–580

MANAGEMENT OF TRIBAL TRUST FUNDS.

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ON

OVERSIGHT HEARING ON THE STATUS OF THE DIALOG BETWEEN THE

DEPARTMENT OF THE INTERIOR AND AMERICAN INDIAN AND ALASKA NATIVE LEADERS ON VARIOUS ALTERNATIVES FOR THE REORGANIZATION OF THE DEPARTMENT OF THE INTERIOR TO IMPROVE THE

DEPARTMENT’S MANAGEMENT OF TRIBAL TRUST FUNDS.

JUNE 26, 2002

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

DANIEL K. INOUYE, Hawaii, Chairman

BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

KENT CONRAD, North Dakota

HARRY REID, Nevada

DANIEL K. AKAKA, Hawaii

PAUL WELLSTONE, Minnesota

BYRON L. DORGAN, North Dakota

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

FRANK MURKOWSKI, Alaska

JOHN McCAIN, Arizona,

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

ORRIN G. HATCH, Utah

JAMES M. INHOFE, Oklahoma

PATRICIA M. ZELL, Majority Staff Director/Chief Counsel

PAUL MOOREHEAD, Minority Staff Director/Chief Counsel

(II)
(III)

C O N T E N T S

Page

Statements:

Akaka, Hon. Daniel K., U.S. Senator from Hawaii ....................................... 4

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, vice chairman, Committee on Indian Affairs .............................................................. 3

Griles, J. Steven, deputy secretary, Department of the Interior, Washington, DC ........................................................................................................... 5

Hall, Tex G., chairman, Mandan, Hidatsa, and Arikara Nation, tribal

cochair, Tribal Leader/Department of the Interior Trust Reform Task

Force ............................................................................................................... 7

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, chairman, Committee

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

Masten, Susan, chairwoman, Yurok Tribe, tribal cochair, Tribal Leader/

Department of the Interior Trust Reform Task Force ............................... 13

McCaleb, Neal A., assistant secretary, BIA, Department of the Interior,

Washington, DC ............................................................................................ 7

Thomas, Hon. Craig, U.S. Senator from Wyoming ........................................ 4

APPENDIX

Prepared statements:

Griles, J. Steven ............................................................................................... 33

Hall, Tex G. (with attachments) ...................................................................... 40

Johnson, Hon. Tim, U.S. Senator from South Dakota .................................. 29

Marshall, Clifford, chairman, Hoopa Valley Tribe ........................................ 29

Masten, Susan (with attachments) ................................................................. 44

McCaleb, Neal A. .............................................................................................. 33

Note: Other material submitted for the record retained in committee

files.

(1)

MANAGEMENT OF TRIBAL TRUST FUNDS.

WEDNESDAY, JUNE 26, 2002

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

The committee met, pursuant to notice, at 10:04 a.m. in room

628, Senate Dirksen Building, Hon. Daniel K. Inouye (chairman of

the committee) presiding.

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

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

HAWAII, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

The CHAIRMAN. The committee meets this morning to receive testimony from the four cochairs of the Task Force that has been established to consider proposals for the reorganization of the Department of the Interior to better address the management of funds

that are held in trust for Indian tribal governments and individual

Indians.

The report issued by the General Accounting Office in 2001 indicates that the Department maintains approximately 1,400 tribal

trust accounts for 315 Indian tribes, with assets in excess of $2.6

billion.

The Department is also currently administering 260,000 individ- ual Indian money accounts with a balance of $400 million as of

September 30, 2000.

In November of last year, the Secretary of the Interior proposed

a plan for the reorganization of the Department and the establishment of a Bureau of Indian Trust Asset Management.

This organizational plan was filed with the District Court in the

ongoing class action litigation of individual Indian money account

holders who assert that the Government has mismanaged their

trust funds.

Reaction to the Secretary’s proposal in Indian country was not

favorable and, ultimately, it was decided that a Task Force should

be established to examine other proposals for the reorganization of

the Department.

The committee is advised that there were 28 proposals in all that

were considered by the Task Force which is composed of representatives of the Department of the Interior and 24 representatives of

Indian country.

Although the committee anticipated that today’s hearing would

focus on one single proposal that had the support of both the Task
2

Force members and most of Indian country, we are advised that

the process has yet to yield consensus.

Accordingly, the committee has scheduled another hearing on

July 30th to receive testimony on what the committee understands

will be a forthcoming consensus proposal. On that day, the committee will also receive testimony on S. 2212, a bill introduced by Senators Daschle, McCain, and Johnson which also proposes a reorganization of the Department to achieve a greater measure of accountability in the management of these trust funds.

In addition to the dialog that is taking place on matters related

to the organization of the Department and its management of trust

funds, there are two cases now before the United States Supreme

Court which call upon the Court to decide the nature and extent

of the United States’ responsibilities and liabilities as they relate

to the management and administration of tribal trust resources.

So we have much on our agenda to address as we proceed to consider the range of issues associated with the our Nation’s trust responsibility.

Finally, I want to observe that after reading the testimonies last

evening, it struck me that the existence of this dialog process and

what the Task Force has set out for itself to accomplish is nothing

less than historic. Over the years, we have witnessed many solutions directed at these endemic and systematic problems but, as

our presence here today acknowledges, none of those solutions has

proven to be ultimate or workable solution.

I think that with this Task Force and the ongoing dialog between

the Department and the tribal governments, we finally have the

potential for developing solutions that will work. This is in no

small part because the Indian beneficiaries are thoughtful people

who know both how the system works and how it ought to work.

And so I wish to commend Secretary Norton and the Department

because I surmise that you have come to the same conclusion that

I have, that the most effective solutions to the challenges confronting Native Americans can be found in Indian country.

And so, on behalf of this committee, I want to thank all of you,

one and all, for the time and the patience and commitment you

have made to this process and to these issues. Whether you have

had the time to step back and take a long view of what you are

engaged in or not, let me assure you that from the vantage point

of this committee you are making history. I dare say that the history you are making is not just your work as it affects the management of the trust funds, but as a model and a precedent you are

establishing in creating a Federal-tribal partnership approach to

the resolution of problems. As difficult and as tortuous as you may

sometimes find the pursuit of this journey together, there is great

potential for such a partnership to address other challenges.

So if I may speak for the committee, I hope you will keep up the

good work and do not allow yourselves to get discouraged. We are

counting on you and looking forward to working with you, and I

have no doubt that together we will find the solutions that will finally work.

May I call upon the vice chairman of this committee.
3

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

INDIAN AFFAIRS

Senator CAMPBELL. Thank you, Mr. Chairman. That was a very,

very fine statement.

In the almost 10 years I have been with this committee, I have

seen the debate on reforming Indian trust management evolve significantly. When I first came to the Senate in 1992, the focus was

on efforts to pass the 1994 American Indian Trust Fund Management Reform Act. In the summer of 1996, attention centered

around Judge Lamberth’s courtroom when the landmark case of

Cobell v. Babbitt was filed. In 1997, when I became the chairman

of this committee, our focus shifted to reviewing a strategic plan

filed by Paul Holman, the first special trustee. Since 1997, we have

debated and discussed the failed TAAMs computer system, two

high-level implementation plans, and millions of dollars spent on

ill-fated trust reforms.

I must say now, Mr. Chairman, as the vice chairman of this committee, I am encouraged the joint tribal leaders and the Department of the Interior trust Task Force consultation process has

begun to seriously hash out the proposals for reform, with tribal

input and tribal consultation.

Though fundamental differences remain between the tribes and

the Department, and I think in some cases between one tribe and

another tribe, I believe the debate is being held exactly where it

should be, between the trustee and the tribes. The tribes and the

Department know the most about the problems that continue to

stand in the way of real trust reform. I am hopeful the Task Force

process is providing an opportunity to negotiate honestly and openly about how we go best about framing a new opportunity in trust

reform.

There have been some points of contention but I know that in my

case I have had a staff person at every single meeting of the Task

Force, I believe that they are making great progress, as you do, and

are agreeing much more than they are disagreeing. This is not an

easy job, as you alluded to, Mr. Chairman. There were nearly 30

reorganization proposals submitted to the Task Force for its consideration. But I am convinced that people of good will who believe,

as I do, that solution is long over-due can find the way through this

morass. Past solutions have not worked because, in my view, Indian people were not involved in crafting a bill. That is one of the

reasons I asked, by the way, to delay any further action on any bill

until we heard from this panel today and until there is an opportunity for other tribes to have their voices heard too. But they are

getting closer to a consensus.

As the Task Force does its work, I believe Congress needs to continue focusing on the core problems we can help with, including

land fractionation, probating Indian estates, and a host of other

matters that will never provide the kind of splash the bigger issues

do. Working together, we have already removed the threat of massive tribal law suits against the United States. With this Administration’s support, the House and Senate passed S. 1857, which we

both worked on, Mr. Chairman, the Act to encourage a negotiated
4

settlement of tribal claims against the United States, which was

signed by the President in March of this year.

I am one who is looking very anxiously to the remaining consultation sessions and hope very much the Task Force will produce

a proposal that the tribes and the Administration support. I am not

looking forward to another exercise in futility writing a bill that we

cannot get signed into law. The only way we are going to start

writing checks to tribes, which they have long waited for, is to get

a bill signed into law. That means that we have got to have something that both the Administration can support and tribes can support. But I remain hopeful that we can find that solution. I am

looking forward to the long over-due resolution of the injustice that

Indian people have faced in the past on this issue. Thank you, Mr.

Chairman.

The CHAIRMAN. Thank you very much.

May I recognize the Senator from Wyoming.

STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM

WYOMING

Senator THOMAS. Thank you very much, Mr. Chairman. I am

sorry I am going to have to go to another committee markup. But

I simply want to express my interest and say how important I

think this issue is. We have been working at it for a very long time.

And I am delighted the Task Force is there.

Sometimes I wonder—I see the title of this hearing is for the reorganization of the Department of the Interior. It seems to me it

goes much beyond the reorganization. The reorganization is almost

secondary to dealing with the issues that are there. We are going

to spend all of our time talking about the reorganization. I think

we ought to really focus on solving the problems. Now I understand

the reorganization is designed to do that, but I am afraid we have

been a little diverted into the structure as opposed to the issues.

It is time. Time has passed for us to deal with these things, and

we must do it. I just wanted to make the point that certainly our

reservations and our tribes in Wyoming, Eastern Shoshone and

Northern Arapaho, have had people involved and want to continue.

I understand the Department and the tribal leaders have scheduled

some meetings in that part of the country and I certainly hope that

can happen.

Mr. Chairman and Mr. Vice Chairman, I appreciate what you do.

It is time we get this issue resolved. Thank you.

The CHAIRMAN. I thank you very much.

May I now recognize the Senator from Hawaii.

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

HAWAII

Senator AKAKA. Thank you very much, Mr. Chairman. I thank

you and the vice chairman for holding this important oversight

hearing on the status of the dialog between the Department of the

Interior and the Tribal Trust Fund Management and Reform Task

Force regarding the handling of assets held in trust for Indian

tribes and individual Indians by the Department of the Interior.

This has become about because of the chairman’s and this committee’s effort to try to do something about the difficulties experienced
5

by the Federal Government regarding the management of Indian

trust assets.

The complexity surrounding Federal management of assets held

in trust for Indians has been an issue before Congress and this

committee for a number of years. As a member of the Senate Energy Committee, I participated in hearings a few years ago addressing the computer systems that were going to be utilized to address the challenges associated with the management of Indian

trust assets.

Mr. Chairman, I am looking forward to hearing from our witnesses this morning as I am deeply interested in the dialog that

has been occurring between the Federal Government and tribal

leaders in an attempt to begin to resolve these issues. I believe that

it is essential for the Government to consult with Indian country

to develop ways to overcome these difficulties experienced by the

Federal Government regarding the management of Indian trust assets. I am pleased to know that the concerned parties have an opportunity to participate in this process, and I commend all of you

for your efforts. Thank you very much, Mr. Chairman.

The CHAIRMAN. I thank you very much, Senator.

The committee is most pleased to welcome the Deputy Secretary

of the Department of the Interior, J. Steven Griles.

Mr. Secretary.

STATEMENT OF J. STEVEN GRILES, DEPUTY SECRETARY, U.S.

DEPARTMENT OF THE INTERIOR, WASHINGTON, DC

Mr. GRILES. Good morning, Mr. Chairman and Mr. Vice Chairman, Senators. Let me just say that we appreciate your opening remarks and your understanding of what is an historic, in my opinion, opportunity to deal with these very complex and very difficult

issues. I would like to ask that my entire statement be submitted

for the record.

The CHAIRMAN. Without objection.

Mr. GRILES. Before I go further, let me just give the committee

a little background. For the last few days I have been out in Arizona with the fire and what was going on out there. I did not get

back until about 4:30 a.m. this morning because United Airline’s

flights were 6 hours delayed. But I just wanted to let you know

that President Bush was there yesterday. He came up to the fire

and declared the area of the fire a disaster area, which includes

about one-half of the area that has been burned is part of White

Mountain Apache Fort Apache Reservation.

The chairman of the tribe, Dallas Massey, met with President

Bush yesterday and discussed the impact of the fire on the reservation, particularly the sawmills, the hunting, and all that the tribe

has as their activities. We are working diligently, Mr. Chairman,

to see that we get a rehabilitation program immediately implemented as soon as we get this fire under control and out. It is an

historic fire in the sense of modern day. We have four teams applied to the fire. Over 300 homes have been burned. We do not

have it under control. We do not have it contained. We need help

from Mother Nature and God. So, we have got some of our best

people in the country fighting this fire right now to try to deal with

that.
6

Let me just say for my testimony, sir, that the relationship that

we have established with the Task Force members, with the two

cochairmen that are here with me today, that I have learned a

great deal from them and the other Task Force members and other

tribal leaders who are participating. This has been a great experience and we have a much greater understanding of Indian country’s needs and I think they have of what our concerns are.

If it would be appropriate, Mr. Chairman, there are a number of

Task Force members who are not testifying today, would it be appropriate to ask them if they could stand and be recognized?

The CHAIRMAN. It would be most appropriate, sir.

Mr. GRILES. Maybe Chairman Hall could introduce you to them

because they have come a long way and their participation has

been absolute. They have spent a lot of their own personal time

and a lot of sacrifice of their time to come to these meetings numerous times, not just Task Force meetings, but subcommittee meetings that go on to try to resolve these complete issues.

[Task force members recognized.]

Mr. GRILES. We really appreciate the opportunity to provide a

status update to you on the report the Task Force did and presented to the secretary on June 4.

The Task Force efforts are basically focused on three things:

Who, that is, what are the organizational options that were presented. I believe that Tex and Sue will be discussing those. The

what, what is the strategic plan, the business operations plan that

we are involved in. We are not only looking, as Senator Craig

Thomas indicated, at the organization, but what is the business of

trust and what is the business that we are engaged in with BIA

and with Indian country. We have got a whole subcommittee that

is involved in that effort to identify that, the ‘‘as is business,’’ what

are we doing. And then how should we go forward to do that business better. So we have got a process, we have got involvement and

consultation with the tribes involved in that.

This Task Force is ongoing. Last week, at the National NCI midyear meeting in Bismarck, the secretary was there and spent a

number of hours in which she listened to Indian country. We have

got 12 additional regional consultation meetings that are starting.

Some have already occurred and more will occur over the next few

weeks, and they are listed in my testimony, the locations and times

of those.

We are not unaware of the legislative calendar, Mr. Chairman,

and we anticipate further feedback to Congress in the near future.

We are pleased to know what date you have set the next hearing

and I know the Task Force members will work toward trying to see

if we can come to some consensus on that.

I would like to allow, if we could, Mr. Chairman, the remainder

of the Department’s comments to come from someone who I have

come to know and have the highest respect for, the Assistant Secretary of Indian Affairs Neal McCaleb.

The CHAIRMAN. I thank you very much, Mr. Secretary, especially

for your status report on the Arizona fires. I wish to assure you

that this committee stands ready to do whatever we can to work

with you in alleviating the pain and suffering caused by this fire.

Mr. GRILES. thank you, sir.
7

The CHAIRMAN. Thank you very much, sir.

Now it is our pleasure once again to welcome the Assistant Secretary of the Bureau of Indian Affairs, Neal McCaleb.

Mr. Secretary.

STATEMENT OF NEAL A. MCCALEB, ASSISTANT SECRETARY,

BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC

Mr. MCCALEB. Thank you very much, Mr. Chairman, members

of the committee. My remarks will be brief. I want to comment not

so much on the substance of what has been accomplished by the

Task Force, and it is considerable to this point, but I would remind

you in our time before you that just a little over a year ago in my

confirmation hearings I made the comment relative to the trust,

the noun ‘‘Trust,’’ with a capital ‘‘T,’’ that there had been a serious

erosion of trust on the part of the BIA, the trustee, and on the part

of the Indian clients. I also said that there was a critical need for

the restoration of the credibility of the trustee with the beneficiaries.

Trust, like respect, and when I say ‘‘trust’’ it is with a small ‘‘t,’’ the verb, trust, like respect, is not something that can be demanded by authority but must be given willingly. And trust, I

think, has been the major work product of this joint committee

which has been fundamentally driven and controlled by the tribal

leadership present on the committee. They have been the primary

movers and have set the agenda as we go along.

In this process of working together, there has blossomed a true

flower of trust from the bud of hope. It is our commitment and my

desire to keep that flower of trust nurtured and well, because without that there can be no organizational trust that will be truly

functional.

I would just close by reminding myself and all those in this room

who have the responsibility of this trust that St. Paul, when he

wrote the second letter to the Corinthians, said, ‘‘To those who

have been given a trust, it is required that they be found faithful.’’

And it is our effort in this committee to be found faithful to our

trust. Thank you.

[Prepared joint statement of Messrs. Griles and McCaleb appears

in appendix.]

The CHAIRMAN. I thank you very much, Mr. Secretary.

Now it is my pleasure to call upon the chairman of the three affiliated tribes of the Fort Berthold Reservation of New Town, ND,

Tex Hall.

Mr Chairman.

STATEMENT OF HON. TEX G. HALL, CHAIRMAN, MANDAN,

HIDATSA, AND ARIKARA NATION, TRIBAL COCHAIR, TRIBAL

LEADER/DEPARTMENT OF THE INTERIOR TRUST REFORM

TASK FORCE

Mr. HALL. [Greeting in Native language.] Thank you, Senator

Inouye and Senator Campbell, for this hearing and giving us an opportunity as a Trust Reform Task Force and as a cochair for the

tribal side, with my colleague, Chairwoman Sue Masten, as well as

Assistant Secretary McCaleb and Steven Griles, the other cochairs
8

on the Federal side. It truly is a joint effort on this very important

issue.

If I could, Mr. Chairman, I would like to introduce the subcommittee and I would like to have them please stand after I recognize their names. Cochairs of the Legislative Subcommittee are

Governor Bill Anoatubby from the tribal side, and David Bernhardt

from the Department side. If they would please stand. Cochairs of

the Business Processing and Modeling Work Group are Tim Martin, executive director of USET, from the tribal side, and Ross

Swimmer from the Department side. And the other subcommittee

is the Proposal Review Subcommittee, and we have Alvin

Windyboy, who is not here I understand, and Jim Cason from the

Department side. And then we have another Task Force member

here, George Arthur from the Navajo Nation. And then, of course,

we have Tom Slonaker from the DOI Office of Special Trustees is

here. I believe that is all of the Task Force members. I hope I did

not miss anybody.

The CHAIRMAN. Before you proceed, Mr. Chairman, I want to

thank all of you for the work you have put into this effort. We appreciate it very much.

Mr. HALL. They really have, Mr. Chairman, Senator Campbell,

and Senator Akaka, they really have been working very hard. I do

not know how many hours I could count up, but it is in the hundreds of hours. All of the Task Force is committed to making this

effort a reality.

It really is a matter of trust, as Mr. McCaleb had indicated, the

verb ‘‘trust.’’ I can remember when we started this Task Force after

the Department rolled out BITAM in November 2001 and it was

unanimously opposed by the tribes. We were at Spokane at the

NCI annual convention where there was over 3,000 participants

that were registered, and we all decided we needed to put our

heads together as tribal nations and decide how we were going to

go about this. Then, of course, the idea of the Task Force was formulated. I am very happy to report that after 7 months we have

come a long way.

But let me get into some of my testimony, Mr. Chairman, if I

could. Again for the record, my name is Tex Hall, chairman of the

Mandan, Hidatsa, and Arikara Nation, and also the NCI president

and cochair of this Tribal-Federal Joint Task Force on the Trust

Reform. I would like to give you a report on how far we have come

in our discussions as tribal leaders and as a Department of the Interior over the past 7 months.

Tribal leaders believe that this matter is every bit as important

as the Enron scandal. I remember being here in February, I believe

the Senate committee hearing was on February 26, and I believe

there was a Senate committee hearing the Enron issue and all the

media was over there. That was what was more important. My

point is this is just as important to the tribal leadership. This has

been an ongoing broken trust for over 100 years and we are now

coming together to finally get some resolution to this issue.

The Task Force itself is made up of 24 tribal leaders from

throughout the country. They were elected from their 12 BIA regions. So that is two tribal leaders and one alternate, for a total

36 that were elected by their tribes. Of course, we had the national
9

consultation last Tuesday, as was mentioned previously by Mr.

Griles, in Bismarck. A great turnout, and we appreciate the Secretary being there and her commitment in coming to Bismarck, not

that it is that hard to find, Bismarck, but there is only a small airport there and there is a lot of scheduling that the staff has to do

to get in and out of Bismarck. Also, we appreciate her coming to

the United Tribes Technical College and talking about education.

So we really appreciate that.

But, again, the Task Force was created as a result of the proposal of reorganization by the Department, filed by the Department

in the Cobell litigation in early November of last year. The Department’s proposal calls for the creation of an entirely new Bureau of

Indian Trust Assets Management, or BITAM, which would have

given BITAM what the Department called trust functions and left

in the BIA all the other services that BIA provides.

Tribes and their leaders were unanimously opposed to this proposal for many reasons. Tribes said, and continue to say, that all

services to tribes provided by the DOI need to be provided within

a single agency, and that agency is the Bureau of Indian Affairs.

Tribes, and especially those in my region, the Great Plains, point

out that the services in the treaties did not distinguish between

trust services and other services. Everything the United States

does for tribes comes from a treaty or a legal obligation. So on that

point, tribal delegates are now in general agreement with the Department, and we are thankful that the Secretary has told us that

she has withdrawn the BITAM proposal in her June 4 letter to the

tribes and also in her opening comments at the national consultation last Tuesday, June 18. Although I am not sure that everything

has been filed in the Cobell litigation to show that DOI has withdrawn that proposal. So that is a point that I would like to leave

for the record.

Reaction to BITAM when it initially came out. At the first meeting with the Secretary at which the BITAM proposal was discussed

in Albuquerque in December 2001, tribal leaders, including myself,

called for a Task Force to develop an alternative to BITAM. And

as the Assistant Secretary and other Department officials continued to tour Indian country and listen to tribal leader after tribal

leader complain that BITAM was not the answer to trust reform,

the Department and tribal leaders proposed that a joint Task Force

should meet to work out an alternative to BITAM that everyone

could support. And, again, Sue Masten, chairwoman of the Yurok,

and myself have been elected cochairs of this Task Force.

As a little bit of background, during the past 6 months we have

met in formal sessions five times, beginning in Shepherdstown, Va,

in the early part of February at the invitation of the Secretary,

then in Phoenix, San Diego, Minneapolis, and just 2 weeks ago in

Bismarck, ND. Our first two or three meetings were intense discussions about just process and protocols, and how do we go about

business, and how do we agree on our issues, and if we disagree,

how do we come to some resolution on that. So the first part of the

meetings were basically just a lot on that and what was the scope

of the Task Force. What was the purpose and what was the scope?

What were we trying to accomplish? And how would the various

tribal leaders be recognized? I mentioned in Shepherdstown it was
10

almost like talking to the U.N. because we had tribal leaders from

many different parts of the country, well, actually, 36, and how

would that recognition be because they were all sovereign nations,

independent sovereign nations.

Then what were the committees that needed to be established?

And what was the process by which we would gain agreement? And

I am happy to add, we agreed on consensus, on that consensus

process. Again, as I mentioned in the introductory, we basically established three main subcommittees; one dealing with the various

alternative proposals to BITAM, one dealing with the legislative

needs, and one dealing with the scope of carrying out the contract

the Department has with EDS, and that is looking at the ‘‘as- is’’ model, what is happening currently at each of the local levels.

Our committees have met by telephone and in person numerous

times. Each Task Force member has spent well over hundreds of

hours in meetings alone on this task of trust reform. And now we

are getting to the heart of the issue of trust reform in our discussions. I can tell you that our efforts are coming into focus now. We

are getting to the very issues in our discussions and I believe we

are making headway toward working out a legislative solution as

well as an administrative solution. Discussions are vigorous and we

are beginning to see that. We have many agreements and some disagreements.

What the Joint Task Force agrees on are as follows:

We agree that trust reform is needed. The status quo is unacceptable.

We agree that the BIA should not be split into two separate bureaus. And we are appreciative again that BITAM is dead and that

the Secretary has indicated that in her June 4 letter and in her

opening comments on June 18 at the national consultation.

We agree that the Department and the BIA must be held accountable to the tribal and individual Indian beneficiaries.

We agree that those responsible for trust reform must answer to

a single person in a chain of command.

We agree that there must be adequate resources to carry out all

those trust functions. If we do not have the resources, all of the reorganization won’t mean anything if we do not have the resources

to do it.

And finally, we agree that there must be some kind of oversight

for those carrying out the trust responsibilities by some independent body.

What I want to emphasize on this last issue concerning the development of an independent entity to ensure accountability to the

beneficiary, this is most likely an area of disagreement between the

tribal members of the Task Force and DOI officials. Last week in

Bismarck, tribal officials from around the country had their first

chance in several months to speak candidly to the Secretary about

what kind of trust reform they wanted. Many tribal leaders in Bismarck on June 18 had expressed their viewpoints of wanting an

independent commission that had real teeth, a commission that

could take actions to make sure that trust funds management and

trust asset management functions would be carried out by the Department. And because tribal leaders believe that the creation of

an independent commission is one of the most important things
11

Congress can do legislatively, if not the most important thing, I

would like to spend the remainder of the time talking about that

independent commission.

First of all, the commission must be independent of the Department of the Interior. Everyone has seen that the Special Trustee

appointed under the 1994 Reform Act is not independent enough

to get the job done. Originally, the 1994 Trust Reform Act was

written to have the Special Trustee be independent. But it did not

happen. And the experts tell me that because it is an executive

branch commission, the President probably has to appoint the

members to this commission.

Second, the commission must have members who know how the

trust should be carried out. These members must be qualified and

understand how fiduciary trust should operate and understand the

issues and responsibilities related to the United States’ trust responsibility to Indian people. The commission needs to have stakeholders on it. It should have Native Americans on it. Quite possibly

those members should be full-time. And how many? Enough to get

the job done. We have not quite decided on that issue. But the

Task Force and the tribal side is working very hard on this issue.

And now comes the hard part. What are the powers of the commission? We all basically agree that the commission should set the

trust standards and establish procedures for carrying out the trust

funds and trust asset management functions. Where we probably

disagree is in determining what the commission should be able to

do to ensure that trust funds management and trust asset management functions are being carried out properly.

The next point is on sanction powers. Most tribal leaders believe

that in order for trust reform to really work, the independent commission must be able to audit financial accounts, investigate allegations that those managing trust responsibilities at the Department

are not doing their job and require compliance. Power to issue

sanctions, monitor performance of carrying out the trust responsibilities by DOI, which includes the power to review decisions by

DOI on trust management and to enforce its points of view if DOI

disagrees. Monitor the DOI budget and report to Congress whether

the DOI budget for trust fund management and trust asset management is sufficient.

DOI has raised questions about these powers and have asked

what happens if the commission orders the Department to do something if it does not have the funds to do it. And that is a very legitimate question. I think part of the answer is to make sure there are

adequate resources. There simply has to be the resources in order

for this to actually happen.

This committee’s efforts and ability to assist in providing adequate resources are critical to the overall success of trust reform.

We are often told that we must live within the resources that are

available. But the tribes and the court in Cobell are saying that

trust functions must continue to be carried out. For example, at the

Fort Berthold local agency, approximately eight positions are needed to fully carry out trust asset management and trust funds management requirements imposed by the regulations that were put in

place in January last year. We do not have those eight positions
12

yet, they are not hired. So we cannot carry out the functions if we

do not have the people.

DOI also I believe thinks there may be some constitutional questions with an independent commission. We are making efforts to

make sure that those questions are answered ahead of time, and

we want to work with them, the Administration, and work with

Congress on this very issue. But I would note that we feel there

is nothing in the Constitution that prevents an Executive Branch

department from being reviewed by an independent commission.

Finally, I think it is only fair to point out some other concerns

we have as we continue to move forward towards a legislative solution.

We remain concerned that the Department is seeking to remove

Mr. Joe Keefer as Court Monitor. We have invited Mr. Keefer to

all of our Task Force meetings as we believe his presence alone

helps keep us on track and focused on what we need to do. And

we have not seen him be biased on any of the issues.

We are also continually concerned about the computer shutdown,

that being LRIS, the Land Records Information System. I understand it is partially fixed. But after 7 months, it is still causing

problems. People are still suffering, probates are stopped, land

transfers are delayed, and this causes harm economically to tribes

and their members because land transfers cannot take place. This

affects us at the Three Affiliate Tribes because we are right in the

middle of a construction season in the norther plains and we all

know how short that construction season is.

We are also concerned that the Justice Department has appealed

trust related cases to the United States Supreme Court which has

accepted the cases for review, that being the White Mountain

Apache case, and the Navajo Nation case. These cases should be

settled in a manner that does not diminish the scope of the United

States’ trust responsibility to tribes. Our treaties and the laws of

this country set forth what trust responsibility is. Congress should

be the one to decide how the trust responsibility gets carried out,

not the U.S. Supreme Court.

We are also concerned about the records destruction. As the case

is winding down for Arthur Anderson, we understand that the

records are being destroyed. And the fact that Arthur Anderson did

the reconciliation reports for tribes and has been convicted now of

obstruction of justice makes us all very uncomfortable. This is important to the Task Force because we still have to have a starting

point for making the system work. We would request assistance

from Congress in making sure these records are safeguarded.

Each account will have to have a beginning balance that we can

all agree on, or at least we will need a process by which we can

get to that starting point. I know that Senator Campbell has offered legislation to get to that starting point, and we appreciate

him for his efforts and look forward to working with him on this

very important issue.

Can we bridge these differences? Time will tell. I know that the

time clock is ticking. The Task Force will continue to meet over the

next several months, but tribal leaders believe we need a legislative solution on some of these issues. We hope to have some kind

of draft legislation within a few weeks coming up.
13

We thank you, Mr. Chairman and Mr. Campbell, for giving us an

opportunity to present testimony on this very important issue. I

look forward to answering any questions you may have.

The CHAIRMAN. Thank you very much, Mr. Chairman.

And now it is my pleasure to call upon the chairperson of the

Yurok Tribe of Indians of Eureka, California, Sue Masten.

STATEMENT OF SUSAN MASTEN, CHAIRWOMAN, YUROK

TRIBE, TRIBAL COCHAIR, TRIBAL LEADER/DEPARTMENT OF

THE INTERIOR TRUST REFORM TASK FORCE

Ms. MASTEN. [Greeting in Native language.] Good morning,

Chairman Inouye, Vice Chairman Campbell. It is an honor to be

before you today to discuss the progress of the Trust Reform Task

Force.

I would like to begin by reiterating the Task Force’s support for

the creation of an independent entity to oversee trust reform. The

Indian trust within the Department of the Interior is the only trust

in the United States that is not subject to any type of external regulation or oversight, and this should not be acceptable to anyone.

We believe that this is one of the major reasons that the Department has mismanaged our accounts and gotten away with it for

decades. The Department has a track record of refusing to perform

audits, or to set specific trust standards which would guide the action of its employees, and has also refused to request adequate

budgets to perform the trust duties which it is responsible for. You

cannot expect that the fox can oversee the hen house.

I serve on the Advisory Board to the Special Trustee. We know

first-hand how important it is to have independent oversight that

is not subject to the direction of the Secretary. This committee has

heard from each of the Special Trustees about their inability to

perform their duties under the 1994 Trust Reform Act because of

the lack of independence. You have also heard from members of the

Advisory Board on this issue.

Congress should create an external, permanent, independent entity that would have the ability to enforce trust standards making

the Department accountable to the beneficiaries.

Mr. Chairman, we cannot have a trust system where the duties

of the trustee are defined by the limitations of a broken system. We

must develop the standards, define the duties of the trustee, provide the resources needed for the systems and staffing. Once this

is completed, we are confident that Congress will provide the necessary funding to accomplish the task.

We need an independent commission to monitor trust management to ensure that standards are met, because history has shown

us that the Department of Interior is incapable of doing it on its

own. Other responsibilities of the independent commission would

include auditing financial accounts, investigations and compliance,

and monitoring corrective actions.

In addition to an independent oversight commission, we also believe that Congress needs to create a position within the Department that will have high-level authority over all Indian trust matters.

The Task Force has reached consensus that it is necessary to create a position of Deputy Secretary or Under Secretary of Interior
14

for Indian Affairs that would have direct line authority over all aspects of Indian affairs within the Department. The creation of this

position will address the major issue raised by both the EDS Report and the court: That the Department of the Interior lacks clear

lines of authority and responsibility to ensure accountability for

trust reform.

The two major entities responsible for trust assets and accounting are the Bureau of Indian Affairs and the Office of Special

Trustee. The lines of authority, responsibility, and communication

between these two entities has been uncertain and at times has

come into direct conflict.

In addition, the Minerals Management Service, the Bureau of

Land Management, the Office of Hearings and Appeals, the Office

of American Indian Trust, and the newly created Office of Trust

Transition and Office of Historical Accounting all have key responsibilities for trust transactions. At this time, there is no single executive within the Secretary’s office who is permanently responsible for coordinating trust reform efforts and trust management

across all of the relevant agencies.

This absence has hurt the progress of those issues that cut across

agencies, such as the development of a system architecture that integrates trust funds accounting with the land and asset management systems. We believe that Congress should create the new position of Deputy Secretary or Under Secretary for Indian Affairs,

and look forward to discussing this with you in greater detail.

The Task Force is still discussing the issue of reorganization of

the Bureau of Indian Affairs to ensure accountability for trust

management throughout all operational levels. At the sametime

working to ensure that resources and decisionmaking are placed at

the local level wherever possible.

The most difficult discussions that we are currently engaged in

are about the reorganization at the regional and agency level. The

Department has insisted that there must be strict separation of

trust resource management in a completely separate organization

from the management of services such as housing and roads. However, tribal leaders have insisted just as strongly that there must

be a single point of decision- making authority at the local level to

deal with issues that cut across both trust resource management

and other trust services.

At the local level, nearly all activities on Indian reservations take

place on trust property—tribal self-government, tribal services, and

trust fund and resources management are all interrelated.

Successful project management requires coordination and timely

decisionmaking at the local level. Tribes have a great concern that

a ‘‘stove piped’’ organization would put an unbearable level of bureaucracy into the system. Imagine having to get central office approval every time that there is a disagreement over construction of

a road or an irrigation ditch. This is something tribes do not want

and we do not think the Department wants it either.

We believe that trust reform reorganization can be effective to

meet its goals and still allow for a single point of decisionmaking

on trust resource management and trust services. We generally

agree with the Department that it would be valuable to group the
15

trust funds management and the trust resource management activities that would have clear lines of responsibility and staffing.

However, accountability is not going to be assured through separate organizational structures alone. It can be assured through:

Identification of duties; adequate funding; qualified staffing and

training; policies, procedures, and standards; internal controls; external audits; transparency; and a focus on responsiveness to the

beneficiaries.

I would like to briefly mention a few more items currently under

discussion by the Task Force for the committee’s consideration.

Adequate funding and staffing for trust management. The Task

Force agrees that a primary issue is getting adequate resources to

perform the trust duties. The BIA has never been provided with an

adequate level of financial and human resources to fulfill its trust

responsibilities to Indian country. This chronic neglect has contributed to the dysfunctional management and financial systems at all

levels of the BIA.

One of the primary concerns of the tribal Task Force members

is that the trust reform effort not result in a mere shifting of resources to trust management, away from the critical tribal services

such as law enforcement, education, alcohol and substance abuse

prevention. Tribes should not be penalized for the Government’s

mismanagement of trust assets. The cost of trust reform should not

be borne by existing tribal programs and services. There must be

new appropriations for trust management if trust reform is going

to be effective.

Under self-determination programs and beneficiary co-management, it is critically important that trust reform not hinder the

progress of the self-determination and tribal co-management of natural resources. It is clear that tribes do a better job of managing

our own resources than the Department does, and we must keep

the long-term vision in mind. The provisions in S. 2212, the Indian

Trust Asset and Trust Fund Management and Reform Act of 2202,

are a good starting point for this discussion.

Ongoing consultation process with beneficiaries for trust reform.

This Task Force was created for a specific purpose—to define reorganizational options to implement trust reform. However, the

Task Force is also serving as a forum for discussion on other related trust reform issues that the Department is facing, such as the

computer shutdown, data cleanup, historical accounting, TAMS, et

cetera. The Task Force has discussed the development of a longterm strategy for ensuring continued communications and consultation between tribal leaders and the Department as trust reform

moves forward.

Process for settling historic account balances. The Task Force has

had discussions about the need to set up a forum for the resolution

of current and subsequent litigation. Trust reform cannot be complete until there is resolution to these historical disputes.

Land consolidation programs. Finally, in order to address the escalating magnitude and complexities of land ownership patterns

and trust fund accounts, Congress must invest in Indian land consolidation programs. According to the BIA, the 56 million acres of

trust and restricted lands under its supervision are divided into

over 2 million different ownership interests. Fractionation of own-
16

ership interests through inheritance has created an accounting

nightmare for the Federal Government, and must be addressed if

trust reform is to occur.

In conclusion, we find ourselves at a unique opportunity that has

put high-level Department of the Interior representatives at the

table with tribal leaders for the first time. Although the problem

of trust management has existed through numerous administrations, never before have we had all three branches of Government,

Judicial, Congress, and the Administration, focused on trust reform.

We are appreciative of the commitment that Secretary Norton,

Deputy Secretary Griles, and Assistant Secretary McCaleb have

demonstrated and for the hard work that they and their staff have

contributed to the Task Force. And of course I would also like to

acknowledge the hard work and contributions of my esteemed colleagues who have also donated staff resources to this effort.

This has not been an easy task for the Department of the Interior or for the tribal leaders. However, we have all been committed

to stay at the table to work on this most important issue. If we continue to maintain this serious level of effort, we firmly believe that

we can reach some policy decisions that will put trust reform effort

on track to a successful conclusion, and we are looking forward to

working closely with you on any legislation necessary to implement

trust reform.

We also would like to thank the Committee, as always, for your

continued interest on this issue and all issues of importance to Indian country. Thank you.

[Prepared joint statement of Mr. Hall and Ms. Masten appear in

appendix.]

The CHAIRMAN. I thank you very much, Chair Masten.

Listening to the testimony, it is apparent much has been accomplished towards meeting the mission of this Task Force. But it also

seems apparent that there are a few more steps to be taken.

My first question is, can this be legislatively handled by separate

bills, or should it be addressed in one bill? Are the issues inseparable or can they be separated?

Mr. Secretary? And I will ask the whole panel here.

Mr. GRILES. I think, Mr. Chairman, it is the right question. I

think if we are looking simply at an organizational structure, that

potentially could be one bill. But as Chairman Masten so appropriately laid out, there are lots of issues that the Task Force is

working on, some like the fractionation issue and things of that nature will require additional legislative support.

So as the Task Force has evolved, as we have developed more

issues and have broadened our breadth and length and scope, I

think that we are finding that there will be other legislative issues

that we need to bring back to you and we would like to invite your

advice on how best to try to address those.

So the immediate issue is the organization, which we do think

would probably need some legislative support. But there are other

issues truly that we are going to need more legislative support on

also.

The CHAIRMAN. Chairman Hall.
17

Mr. HALL. Thank you for the question, Mr. Chairman. I really

think that the hearing that you have laid out I believe you said

July 30 is a real opportune time for the tribes to present their

number one priority in this legislative solution is the independent

commission. And so I think that window is open here for the 107th

Congress and the tribes are wanting to get some sort of legislation

during this session on that issue. So that way everything can continue to move. But that is the first priority right now. And as Mr.

Griles had indicated, there may be some need later on, but right

now that appears to be the priority that the tribes are focused on.

We are hoping we can get something done during this session.

The CHAIRMAN. Are you confident that by July 30 this committee

can study a proposal by the Task Force on this issue?

Mr. HALL. Yes; actually, we are working on it with Governor

Anoatubby and David Bernhardt in the Legislative Subcommittee.

I am confident that the Task Force and that subcommittee will

have a draft for review, I do not know what timeframe before the

30th that would entail. But we would have something.

The CHAIRMAN. In your testimony, Chairman Hall, you noted I

believe about ten areas of agreement.

Mr. HALL. Yes.

The CHAIRMAN. Can they be handled separately or must they

await one bill?

Mr. HALL. I think that those could be handled in one bill, Mr.

Chairman.

The CHAIRMAN. At this time, or until the mission is accomplished?

Mr. HALL. We talked about the BIA should not be split into two

separate bureaus. That is an agreement that is right now. We

agree on that right now. The accountability is another point that

we all agree on. But it is just an accountability thing. A single

sponsor, that can be done, the single person in the chain of command. Adequate resources, I think that as we are looking for the

2004 budget, I think that that is something that can be done there.

Then, of course, the independent commission. So I think the single

sponsor and the independent commission are two I think that could

be handled as of July 30, and the rest of them could be brought

forward in the final bill.

The CHAIRMAN. Well, obviously, we have many questions and

some of the questions have been submitted by other members of

the committee. And because of the apparent love-fest that we have

here. [Laughter.]

I am reluctant to ask questions that may break up this love affair. But there are a few I think I should ask.

Mr. GRILES. Do we get time to consult before we respond?

[Laughter.]

The CHAIRMAN. Secretary Griles, in the Department’s view, what

is the legal standard that the United States must meet in its management of tribal lands and resources that are now held in trust?

Is it the standard applicable to a common law private fiduciary, or

some higher standard, or some lower standard? What standard are

we addressing here?

Mr. GRILES. That is a fundamental question that you are asking

for which we have had a number of statutes, rules, regulations that
18

we have adopted to try to define this trust responsibility. At this

point, I think there are two cases that are before the Supreme

Court. The Supreme Court is going to be addressing the very question you have just asked and will address that in the very near

term. I think, as a non-lawyer, I am best to tell you that we are

looking for those decisions to give us some further guidance.

But we have two Supreme Court decisions already, Mitchell I

and Mitchell II, which give us guidance as to what our trust responsibilities are. And in our principles, and policies, and procedures that we are evolving with the Task Force, we are looking to

the private trust guidance and principles that they have to see how

better we can adopt things that have been successful in the private

sector to apply to our trust obligations. And we are working with

the tribes as well as the Tribal Task Force to put those into place

because they are proven and we can use those to better administer

the trust responsibilities.

The CHAIRMAN. Would it be correct to state that the Task Force

is awaiting the decision of the Supreme Court in the cases before

it, especially the Navajo case, before we can discuss the legal

standard of management? Chairman Hall?

Mr. HALL. Personally, I do not think so, Mr. Chairman. I think

that Congress is the ultimate trustee and sets that standard. We

have heard it over and over that it is the highest fiduciary responsibility that Congress has. So these are very important trust cases

and, as I mentioned in my testimony, I think Congress has that obligation to define that trust responsibility and not have the Supreme Court do that. So we are very concerned about that. I think

that it should be done before it goes to the Supreme Court.

The CHAIRMAN. So your position is that this Congress should act

upon this issue before the court rules?

Mr. HALL. Yes; I believe it should. I believe it should review

these cases before it goes to the Supreme Court because that would

affect everything else. Every other tribe in the country would be affected by this. And so this is a real critical juncture of where we

are at and where we are going in the future in regards to the Congress and carrying out its trust responsibilities to Indian country.

The CHAIRMAN. What is your view, Mr. Secretary, on this independent commission?

Mr. GRILES. First, Mr. Chairman, we support an oversight of

independent-type commission review. What we are trying work

with the tribal leaders on is the definitions that Chairman Hall

was speaking to, setting trust standards, the authority and power

to issue sanctions, that kind of question. How does that interrelate

with the overall authority of the Secretary of the Interior, and separation of powers, and all of those kinds of legal questions. As

Chairman Hall indicated, we are working together. The Task Force

has asked for some legal briefs analysis to be performed.

So we, too, want to support an independent commission or a commission, and the term ‘‘independent’’ carries different meaning to

all of us. We are trying to define that in a consensus mode that

we could bring back to you, hopefully by the 30th of July, and could

indicate to you where we think that works. There will be give and

take. We will have our view and others will have their view and
19

we will try to find a consensus that we can bring back to you, Mr.

Chairman.

The CHAIRMAN. Because you are still in the negotiating stage, I

am reluctant to ask questions. But I have one more. Chairman Hall

mentioned that this commission should have the authority to impose sanctions. Does the Interior Department have any thoughts on

that?

Mr. GRILES. I am not sure, Mr. Chairman, what the word ‘‘sanctions’’ implies at this point.

The CHAIRMAN. I realize that is rather vague because I do not

think you mentioned what sort of sanctions you have in mind.

Mr. GRILES. So I think it is an area which we really need to work

with the Task Force on and say what do we need? Chairman Hall

and Chairwoman Masten both, all of us want to find the best solution so the tribal beneficiaries and the individual beneficiaries have

an assurance that the trust obligations are being honored and

being delivered in an efficient, effective, and in the correct manner.

How do we take that goal and iterate that into a commission and

to the Bureau of Indian Affairs. If we set up, say, and Under Secretary and then the Secretary, how does all that fit together.

The one thing you do not want is two people responsible and nobody held accountable. And so, as we look at this, we have got to

assure accountability and responsibility, and assure that somebody

can be held accountable and should be held responsible for trust

beneficiaries service delivery. And whatever we do here, we have

got to end up with that type of approach. I think that we all want

that to happen, but how do we take the independent oversight body

or a commission with sanctions or whatever and put that to play

so it meets both the constitutional concerns but, more importantly,

the delivery of services and accountability and responsibility.

The CHAIRMAN. So the Department is open as to what steps must

be taken to bring about accountability? If it calls for sanctions, so

be it.

Mr. GRILES. We just need to work together to figure that out, Mr.

Chairman. This Task Force works long hours and many days, and

over the next three or four weeks, or whatever the time is, we are

going to continue to do that. In fact, we are going to meet after this

hearing to pursue some of these thoughts.

The CHAIRMAN. You know, when this is accomplished we will

have a big celebration I think.

Mr. GRILES. I will buy the champagne, Mr. Chairman. [Laughter.]

The CHAIRMAN. Mr. Vice Chairman.

Senator CAMPBELL. Thank you, Mr. Chairman. I have got about

40 questions. Unfortunately, wouldn’t you know it, the conference

committee between the House and Senate on the energy bill is taking place in just a short while, so I only have about another onehalf hour I can be here.

As you know, some of us, me, you, and several others, worked

very hard to get an Indian section in that energy bill. It is not in

the House bill, as you probably know, Tex. Even what we could get

in the Senate side was only really dealing with conservation and

renewables and so on, not with any opportunities for tribes to develop their non-renewable resources. So we are working very hard
20

trying to make sure our colleagues on the other side of the Hill recognize the importance of getting us less dependent on foreign energy by giving some opportunities to Indian tribes which have

roughly a third of all the low-sulphur coal in America under their

reservations, as you know, and oil, and gas, and other resources.

So it is a real important conference and I simply cannot miss

that. So when I skip out a little early, I did not want you to think

I am not concerned about this issue. That one is also really important to Indian country.

You mentioned the date of July 30 of having something maybe

concrete for a draft. I have to remind you that we are supposed to

get out about July 30 or so for a 30-day recess. Since it is election

year, that gives us about 30 days after that. There is some talk

about coming back for a session after the election. But it looks to

me like we only have about a month or a little more to be able to

work on this to try to get it through this year and there is an awful

lot of unresolved things. I would just point out to you so you know

that we are up against a time constraint that we may or may not

be able to reach some consensus to get a bill passed.

My view has been that the Task Force has to help write this

thing. If it is going to be satisfactory to the tribes and to the Administration, they have got to help write it.

I might also, before I ask a couple of questions, tell you, Deputy

Secretary Griles, I am glad you mentioned the fires in Arizona.

What a lot of people do not know is that a lot of good Indian kids

are out there on those fire lines.

Mr. GRILES. Very much sir.

Senator CAMPBELL. I just bumped into one group in Colorado the

other day, a group of Navajo Hotshots, as they are called. We have

about 270,000 or 280,000 acres on fire in Colorado. Not as big as

Arizona, but hugely big. Those kids are all over the country, Indian

youngsters, now fighting those fires, trying to protect lives and

property of all Americans. This Arizona fire, about half of it being

on the White Mountain Apache Reservation, I know that we are

going to make sure that we do our best to return the favor of all

these Indian kids that have tried to protect our lives and property.

Let me get to a couple of questions now, Mr. Chairman. One to

perhaps Neal or Deputy Secretary Griles. Your written statement

says that the Task Force report recommended that the BITAM proposal be replaced by one of the options advanced, which the Secretary has agreed to do. So when we look at the three options that

have been put forward by the Task Force so far, is it fair to say

that one of those is going to be forwarded to the committee that

Congress could act on?

Mr. MCCALEB. Yes; that is our objective and I think it will be

done. We thought it was premature to recommend a specific one of

the three options until after there was an opportunity for national

consultation and a full airing of this in Indian country to see what

their response was to the three options that were presented.

Senator CAMPBELL. I see. Okay. When Chairman Hall mentioned

that one of the bills, if we did several bills, one could deal with the

issue of not splitting the Bureau. I do not think we have to do that

anyway because it can only be split with legislative action. If we
21

do nothing, it does not get split. Simple as that. So that is probably

not necessary to be on the table.

The phase-out of the Special Trustee, I might also ask Neal or

Deputy Secretary Griles, the phase-out of the Special Trustee,

given the lack of success we have had really since 1994 and the

huge amount of money we have spent, I can see why the tribes

want it phased-out and replaced with an independent entity with

oversight regulatory authority. I think you spoke a little bit to that.

Then your view is that it might be an independent entity with

some oversight and advisory capacity but not with regulatory capacity?

Mr. GRILES. Senator, I think that is really the fundamental question is the duties, responsibilities, and authority of a commission.

I think we feel that until the trust reform is actually pretty much

sufficiently completed, we need to have an Office of Special Trustee

still maintain its role and advise the Secretary on what ought to

happen. How those two interrelate, the Office of Special Trustee

and another commission or advisory board and what its authority

and responsibilities are is what we hopefully will be able to come

back to you with some thoughts on in the next thirty days. We

need a lot of work to be done on that.

Senator Campbell, could I just respond to something you said

also.

Senator CAMPBELL. Please.

Mr. GRILES. I just want to tell you that when I was out there

on the fire line there were a lot of Native Americans there. I want

to say that I also had a meeting with the tribal council of the

White Mountain Apaches. They are very concerned about this fire

and the tribal council wants to do everything it can to assure the

communities there that they are partners in those communities

and they are just as affected by this fire as Show Low and the

other communities there. We are working as a partner with BIA,

and the White Mountain Apache has an individual on every one of

these teams to work together.

So this is a huge community, if you will, out there and they are

working together to bring back resolution and a community spirit

of solving this problem. I just wanted to make sure you understood

that the Chairman wanted me to convey that to you and to the

Committee here.

Senator CAMPBELL. I appreciate that. We all know that homeland security and fighting terrorism are one of, if not, our biggest

prioritys right now as a Nation. One thing the tribes fear is that

the reforms we are discussing may take place without the resources to implement them. We can pass any kind of a bill, but if

we do not come up with the money it does not get done. It is as

simple as that.

Is it your position that there will be new resources available to

fund the reform? Or is that going to be covered out of existing Indian programs or taken from other Indian programs? Maybe Neal

might be best to answer that.

Mr. GRILES. Mr. Vice Chairman, Mr. McCaleb can respond, but

I will also respond for you. We recognize that this President has

put over $80 million of additional funds this year alone into trust

reform. At each of these meetings we have had, we have had OMB
22

presence there. They are in the audience, they are a part of the

consultation process. The ‘‘as-is business’’ as well as the ‘‘business

to be’’ planning that we are doing with EDS and with the Tribal

Task Force is intended to—if we are going to do this job properly,

how much resource do we need? What are the types of people we

need? How do we structure it so these services are delivered?

We cannot continue to not provide adequate resources. The President and the Secretary have shown that effort already with this recent 2003 budget that has been submitted. And we are in that

process of evaluating the 2004 budget. But as we go through this,

as the new business processes go forward and we identify these

new resources and what is going to be required, we are going to

be working with the President, OMB, and with you to see how we

can best do that.

Senator CAMPBELL. Well, when we see the President’s 2004 budget, we may be reminding you of that if the resources are not able

to get the job done.

Mr. MCCALEB. Mr. Vice Chairman, I would respond to that. It is

my personal commitment to the Indian Task Force members, and

I am optimistic that this will be supported by the Administration

and the Congress, that we will not cannibalize the already underfunded programs in order to finance the necessary improvements

and resources required for trust reform.

Senator CAMPBELL. Thank you. I am sure the tribes will appreciate that position.

To Chairman Hall and Chairwoman Masten, I understand there

are 29 proposals submitted to the Task Force for its review, many

of them have common themes. Has the Task Force Legislative

Committee, did I understand that Chairman Anoatubby is the

Chairman of that, have they begun the process of framing up anything yet that we can look at?

Mr. HALL. Yes; they have, Mr. Chairman. They have been in existence since March, it was formed in March, so they have begun

the process.

Senator CAMPBELL. With the chairman’s permission, could Chairman Anoatubby maybe elaborate for 1 minute or 2 on what you

have done so far or what we can expect?

The CHAIRMAN. Please.

Senator CAMPBELL. I realize that there are a lot of particulars

you probably have not got ironed out yet.

Mr. ANOATUBBY. Mr. Vice Chairman and Mr. Chairman, thank

you for inviting me to the table. I apologize, I am not fully prepared; however, I do have some comments that I could make in this

regard. We have been working with your staff to keep your staff

informed and they have also been coming to the Task Force meetings. We have what we call a memorandum but it one that we continue to update that gives the various options that have been decided by the Task Force and the various initiatives I guess we will

have to take in order to seek a legislative solution.

I think the cochairs of this Task Force have very well outlined

what we have devised. We have not attempted to actually create

or develop the legislation itself. What we have is a set of principles

and guidelines that we would follow in asking that this Congress

would in fact pass legislation to address these issues. So as far as
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the actual development of legislation, no, we do not have that. But

we do have the guidelines.

The Legislative Committee is working closely with the Proposal

Review Committee. We attend their meetings, we keep abreast of

what is happening there, and then we do our best, and this also

involves the cochair of this committee, David Bernhardt of the Secretary’s Office, where we consult and we develop strategies. One of

the strategies that we have is that after this meeting the co-chairs

will meet with Interior, we will discuss those pending issues, and

as those issues become non-issues and there is some consensus,

then we will forward to you a report which will give you the information that you need to develop legislation.

Senator CAMPBELL. Okay. I thank you. I mentioned a while ago

that time has become important because we have not very much

left in this year. But we want to get it right. Frankly, after all the

broken promises, we want to try to get it right when we write the

thing.

Mr. ANOATUBBY. Mr. Vice Chairman, we feel very committed to

dealing with this. We understand the legislative calendar. We had

hoped by this hearing that we would have one option at least for

the organizational structure available to you. Because the consultation process must be completed before we can actually present that

option, we felt it would be just a little premature for us to forward

one. However, I believe, at least it is my opinion, that the Task

Force has in fact come to agreement on the creation of this one

line, one single individual concept, and the two options, the Deputy

Secretary or Under Secretary, will be a decision that will be more

easily made than what it would have been several months ago.

This can be forwarded to you I believe after the Task Force meeting. There is no way to predict, obviously, that this can be done because there are a lot of dynamics within the Task Force. But I have

great hope that by the Task Force meeting in July there can be forwarded to you a single option as far as the organizational structure

is concerned. Again, that is my hope. I cannot speak for the entire

Task Force, but I am committed to it and I believe that the cochairs are committed to it. And as long as the debate does not

move in a direction that will take us away from it, I surely believe

that can be accomplished.

Senator CAMPBELL. Good. Thank you. I know the Task Force is

working as hard as it can on this. I guess my concern is I want

to see this come to a resolution, but by the same token, I do not

think anybody on the committee wants to do something that is premature without the Task Force’s complete involvement in writing

some kind of draft proposal we can introduce.

Sue, did you have something to add?

Ms. MASTEN. If I could just add that our focus has mainly been

on the Under Secretary and/or Deputy Secretary level for discussions of legislative matter and also on the independent commission.

So we still are flushing out other details. So it is important that

the legislation be able to consider and include those things as we

develop them. We may not have everything by the 30th, but we

will certainly have some items for consideration. And as we move

forward, we will articulate in more detail what the remainder

items would be.
24

Senator CAMPBELL. That will be good in the sense that you will

have the microphone there. Years ago, President Nixon, who

inaugrated the best Indian policys, Indian Self-Determination, that

we deal with now started during the Nixon years, had the idea of

creating a ‘‘Trust Counsel Authority’’ which would have avoided the

conflicts the United States has when it comes to litigating cases

dealing with Indian assets and Indian rights. Has the Task Force

considered that idea or looked up the original Nixon proposal?

Ms. MASTEN. I appreciate your bringing that to our attention because we have not specifically looked at this piece. But we have

had those concerns and discussions regarding the matter and about

the conflict in being able to have a separate council that would

take a look at the effort. So those discussions have happened but

we have not reached any consensus on it. And so I appreciate your

bringing that to our attention because I personally had forgotten

this piece of it and it could help us in our discussions at the table.

Senator CAMPBELL. If you do reach a consensus, will you share

that with the Committee too, please?

Ms. MASTEN. We certainly will.

Senator CAMPBELL. Mr. Chairman, I do not want to hog all the

time. I think Senator Akaka has been waiting patiently, so I will

be happy to yield to him for his questions.

The CHAIRMAN. Thank you very much.

The Senator from Hawaii.

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

Senator CAMPBELL. Senator Akaka, if you would yield just a moment. Since I have to leave in 1 minute or two, I do have some

questions that I am going to submit in writing and ask the Task

Force members if they could get those answers back to us in writing. Thank you. Thank you, Senator.

Senator AKAKA. Mr. Chairman, without question, this is a moment in history when a great challenge and a great opportunity exists for the indigenous peoples of the United States. After all of

these years, we are coming to a point where we are putting the

best minds together at all levels, beginning even from the Executive Branch, here in Congress, as well as the Judicial Branch, to

try to bring together a system or a structure that will help the indigenous peoples of the United States. For me, this is the moment

we are at. That is why it is so important that we take time to really scrutinize what we are doing and to be certain that what we are

doing is in the best interest of the indigenous peoples of the United

States and the United States as well. I am so glad that the executive branch is part of this, the tribes are part of this, and together

we are dialoguing.

The hearing today is to find out what the dialogue has been and

how far you have come and whether we are at a moment where we

can draft and craft legislation that will help bring this about. It appears it is close. And when you give a timeframe to it, I hope something happens in July. It is not impossible, but it means that lots

of work has to be done, a lot of dialoguing has to be done, decisions

will have to be made. So it can be a difficult time for all in this

effort. And I want to thank the Chairman, Senator Inouye, for

bringing this about on our side to try to bring this to a head.
25

It was mentioned about the Under Secretary and the Deputy

Secretary and that you are thinking of establishing the position of

Secretary of Indian Affairs in option 2, and in option 5 to establish

a position for an Under Secretary of Indian Affairs. These will be

appointed by the President. My question is, will there be a process

to ensure that the tribes have a role in advising the President and

Secretary of the Interior as to which candidates might be appropriate for these positions? That is open to any witness, anybody at

the table.

Ms. MASTEN. Speaking from the tribal leadership side, we certainly would hope that provision would be provided for. Because of

the magnitude of importance to Indian country, it is most appropriate that the tribal leadership would have input.

Senator AKAKA. Any other comments?

Mr. MCCALEB. Senator, that is a delicate issue because, clearly,

we would like to see tribal involvement and assessment of the candidates for that position. At the same time, there is I think a need

and a precedent to preserve the power of the Executive to make

that appointment. I think that is something that we need to work

out. We thank you for raising that issue because I think it is something that we need to discuss very fully in our conversations.

Senator AKAKA. The whole dialog is, if there was one word, I

guess the word is reform. When you think of reform you think of

a difficult process at all levels, particularly when you are charged

with the responsibility of finding solutions that may not or will not

please everyone but which are realistic, efficient, and workable. I

think this is where the dialog is going and you are quickly coming

to focus on this. I commend you for your efforts that you have made

up to now.

As I read the report and read the Federal Register, I come to a

question that I would like to ask all of you because this intrigued

me about the cross-cutting principles and the use of the cross-cutting principles. So my question is, do the options recommended by

the Task Force embody the seven cross-cutting principles set forth

by the Task Force?

Ms. MASTEN. What we are saying is that we will need to flush

that out because they are not complete. We specifically did not

complete the work there to allow for Indian country to have meaningful and timely input into just a framework. So that as we develop that, those are the cutting principles that we will ensure are

addressed in any structure that we recommend.

Mr. HALL. Senator Akaka, those cross-cutting principles really

were developed way back in December in response to BITAM. They

started out as seven principles that we all agreed had to be incorporated and became our cross- cutting principles. So this has really

got the support of Indian country to make sure it is incorporated.

Mr. MCCALEB. I think it is the understanding of all the participants that these cross-cutting principles will be embodied in the

final proposal.

Senator AKAKA. Thank you very much for your responses. Mr.

Chairman, thank you.

The CHAIRMAN. I thank you very much.

Like the vice chairman, I will be submitting several questions

here and I look forward to your responses. May I ask one question.
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No one has discussed the matter of pending lawsuits or possible

lawsuits that may come about because of alleged past mismanagement of tribal or personal accounts. Is the Task Force going to set

forth any sort of procedure to resolve these, or are you going to let

the courts proceed with the cases?

Mr. MCCALEB. If I may, Mr. Chairman. In the area of the tribal

lawsuits, and there are about 20 that have already been filed and

the potential for 300 to be filed, through the auspices of this Task

Force, we have established a subcommittee that involves the Intertribal Monitoring Association, which consists of tribes with large

trust assets, and we are working with them to review and to try

to develop some alternative dispute resolution mechanisms that

would obviate the need for litigation to solve these suits and potential suits in an effort to truncate the extended time period that

would be required by litigation and the expense of litigation. That

effort is in the beginning stages.

We are trying to address that on the tribal basis. On the individual Indian money accounts, that issue is very much at issue and

is in the courts now and very far along. We have really tried not

to cross the lines into that and to keep our effort and our eyes forward on the future and what we can do to eliminate some of these

kinds of problems from developing in the future. We have not really dealt so much with the current litigation, the Cobell suit.

Mr. HALL. Mr. Chairman, just a couple of points. One is the Task

Force itself really needs further consultation from tribes to make

sure that is part of our scope. As I mentioned in my testimony, the

scope began with alternatives to BITAM and now we are talking

about tribes that are in litigation in terms of finding some sort of

alternative dispute resolution.

Second, I am hopeful that some sort of alternative dispute resolution can be obtained. But I guess I am concerned that we are not

really moving like I would like to see. We are not moving to get

those tribes who are involved in litigation at the table yet. So as

Mr. McCaleb mentioned, there is an attempt to work on that. But

we are getting calls from tribes that are wanting to know is the Department serious about this alternative dispute resolution, and

what mechanism will be set forth to get their involvement and get

their input to see if some sort of an alternative dispute resolution

could be obtained. And if we are serious, when is it going to happen. So we are still waiting on that issue.

Ms. MASTEN. Mr. Chairman, just to add. In my comments under

the process for settling historic account balances, I did mention the

Task Force has had the discussions about the need to set up a

forum for the resolution of current and subsequent litigation and

that we feel it is important for trust reform to be complete that

there has to be resolution of these historical disputes. However, we

really felt that this was an area where the tribes who are actively

involved need to be a participant and we need to hear from them

as to what they think that structure or forum should look like. So

we are in the process of identifying that.

The CHAIRMAN. I thank all of you again. And if I may repeat

what the vice chairman stated. It is true that after the July 4 recess we have 4 weeks of session remaining and then we go into the

August recess and we will be back on September 4. I think we will
27

be concentrating on limited issues. Thirteen appropriations accounts, that will take up much time. Then you have certain politically hot items such as medicare, medicaid, pharmaceutical needs,

energy, et cetera, et cetera. And so we do not anticipate that this

matter will be resolved in this session of the Congress. I do not

think any of you are anticipating that.

We do not wish to in any way suggest that we are pressuring you

by the July 30 date. We set that July 30th date because if we do

not have it by then, we may not have a hearing in September. But

we want at least a status report on that day and look forward to

your meeting again on July 30.

Yes, Mr. Secretary?

Mr. MCCALEB. Mr. Chairman, with your permission, I made an

oversight and did not identify two of the Department of the Interior

people that were really essential in making all of this happen and

doing the heavy lifting, if you would, and that is Aurene Martin,

who is my deputy, and Phil Hogan, who is the Associate Solicitor

for Indian Affairs. They have been critical and essential in the success that we have enjoyed.

The CHAIRMAN. Thank you very much.

Once again I thank you all and I hope that the love affair continues. Thank you.

[Whereupon, at 11:40 a.m., the committee was adjourned, to reconvene at the call of the Chair.]

(29)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA

Mr. Chairman, thank you for holding this important hearing today to hear from

the Department of the Interior’s Tribal Trust Fund Task Force. I appreciate your

leadership on this important issue, Mr. Chairman, and look forward to hearing from

the Task Force today, as well as future hearings on the management of the Trust

Funds next month, including a hearing on S. 2212, legislation I introduced with

Senators Daschle and McCain.

We have already benefited from the input of many tribal officials in the context

of Department consultation meetings, as well as the Department’s Task Force on

Trust Reform. I have had numerous discussions and meetings with South Dakota

tribal leaders, and I greatly appreciate their insights and leadership. I would also

like to take this opportunity to thank Mr. Mike Jandreau, Chairman of the Lower

Brule Sioux Tribe, a member of the Interior Department’s Task Force on Trust Reform, and Tom Ranfranz, President of the Flandreau Santee and Chairman of the

Great Plans Tribal Chairman’s Association for their sound advice and counsel as we

proceed with trust reform efforts.

While I am pleased the Task Force is giving tribal leaders across the country a

voice in the process of reforming the management of the trust funds, it is unfortunate this consultation and input did not occur before the Secretary of the Interior

announced her plan last November.

I will keep my comments brief, but I want to again thank the Tribal leaders who

are part of the task force and remind them that I look forward to their thoughts

and recommendations on legislation to address this problem, and specifically their

recommendations on how to improve on S. 2212. I would hope we can find consensus

within the Task Force, tribal leaders and Congress to enact legislation this year to

finally put us on a path to correct this inexcusable Trust Fund problem.

Thanks again, Mr. Chairman, for all of your leadership in addressing so many

issues important to Indian country all across America.

PREPARED STATEMENT OF CLIFFORD MARSHALL, CHAIRMAN, HOOPA VALLEY TRIBE

I am Clifford Marshall, chairman of the Hoopa Valley Tribe. I appreciate the opportunity to submit my testimony for the Senate Committee on Indian Affairs hearing record regarding the trust reform and related matters. Because trust reform will

effect the ability of tribes to develop stable governments for the next several decades, I urge the Committee to take the necessary time to assess the impacts on Indian Country before moving forward with proposals that are based on vague short

term concepts rather than addressing longstanding problems.

There have been two forms of trust reform that have been underway for the past

several years, one initiated by tribes and the other by the Federal Government.

These are two very different approaches. The tribal approach focuses on Indian

Country, while the Federal approach has been one focused on inside the Beltway
30

using consulting firms that have little experience in Federal Indian trust and tribal

government matters.

Regarding tribal efforts, tribes have been involved in various forms of trust reform

activities since the first treaty was entered into and the trust relationship was established. At least part of the tribal trust reform efforts have been designed to address problems associated with the underfunded BIA, Indian programs. For example, comparisons between the budgets of Indian programs to those for federally

owned lands and resources demonstrate that Indian forest programs receive only 35

percent of the funds appropriated for management of the United States’ own lands

and that Indian roads maintenance programs only receive 30 percent of Indian road

maintenance needs. It was this type of underfunding, coupled with the lack of local

tribal control over management of reservation affairs, that led to the development

of such laws as the Indian Self-Determination and Tribal Self-Governance Acts.

Information that was submitted to the Task Force by the Tribe demonstrates that

tribal and individual Indian beneficiaries, as well as the United States, receive a

benefit of $3 of non-BIA funds for every $1 of BIA compacted/contracted funds as

a direct result of the Tribal efforts in furthering tribal trust reform activities. Clearly, this information indicates that the Tribal Self-Determination and Self-Governance initiatives are very beneficial to the goals of reforming Indian trust programs.

Regarding Federal trust reform efforts, it has been both frustrating and costly for

tribal governments over the past few years to chase around Indian Country the

most recent recommendation is of consulting firms who have been awarded multimillion dollar contracts by DOI. It certainly is very revealing of the Federal efforts

to have spent over $760 million dollars thus far, but we have yet to find meaningful

solutions and many of the consultant proposals have been universally rejected by

the tribes. Unfortunately, the most recent Federal trust reform efforts have focused

almost entirely on restructuring or eliminating the BIA’s trust management functions without spending any time to analyze whether the new organization will simply fall into the same old problems that brought us to where we are today.

DOI officials say that status quo of the BIA is unacceptable, and restructuring is

necessary if trust reform is to be successful, including ‘‘realignment’’ of the lower

levels of the BIA. (Task Force Report, p. 27). This proposed realignment initiative

includes the probability of segregating trust asset management functions and budgets from the BIA Regional, Agency and Sub-agency offices for transfer to a trust

service centers. While there has been discussion about the local BIA Regional and

Agency offices ‘‘contracting’’ with the trust service center to maintain local trust

asset management functions, it is more likely that these functions will be permanently removed from the local offices since the budgets will no longer be available

to support them.

The American Indian Trust Funds Management Reform Act of 1994 (Reform Act)

established the Special Trustee for American Indians and gave that position a significant amount of control over trust reform efforts. Despite the fact that Office of

Special Trustee (OST) was supposed to only provide an oversight function—not a

program implementation function, Congress began appropriating substantial

amounts of funds for the OST budget. OST then assumed control over the BIA Office of Trust Funds Management, then assumed control of the historic accounting

functions, most recently appraisals, and probates are expected to follow. Today, OST

has stopped being the oversight function as originally contemplated in the Reform

Act and has now become part of the problem. In effect, OST is now what the BIA

was 12 years ago—and the problems continue to escalate and few are being resolved. For example, it was the failures of the OST’s Office of Trust Funds Management system that resulted in the complete shut-down of the DOI computer systems

that were connected to the OTFM systems. In effect, the DOI computer systems had

to be disconnected because proper safeguards were not incorporated in the OTFM

systems that would prevent outsiders from improperly accessing trust information.

Clearly, OST has now become a major part of the problem that must be fixed if

trust reform is ever to be successfully implemented.

Congress mandated in the Reform Act that a comprehensive plan be developed,

in consultation with tribes, and submitted to the House Resources and Senate Indian Committees for review. To complete the framework for trust reform, the Reform Act also contains a mandate that the Special Trustee certify in writing the

adequacy of the trust reform budgets of the BIA, BLM and MMS. Unfortunately,

neither of these statutory requirements has been complied with. I believe that the

present state of the Federal trust reform is in the state of chaos that we see today

largely because of these critical failures by OST in complying with these legal mandates.

To address trust asset management, DOI has proposed to fragment Indian services into two or more agencies. If one fully implemented these proposals, Indian
31

Country would become the only place in the Nation where a tribe or individual Indian will be required to go to multiple agencies just to get permission to start businesses, create employment, implement welfare reform programs, build roads, have

adequate housing, fight fires, use resources and lands, and so on. Despite the fact

that Indian people today are more regulated than any other group around the Nation, separating BIA functions into multiple organizations will require a substantial

amount of new funds just to maintain the same level of services that are being provided today. Indian services will be reduced in favor of paying for more Federal bureaucracy. Unfortunately for tribes, none of the proposals analyzes what impacts

will occur to the regional and agency offices where 95 percent of the services in Indian Country are provided.

Based on an analysis of BITAM submitted earlier by the Tribe, any option that separates the BIA functions into multiple organizations will cost at least $10 million

of new or reprogrammed funds just to hire additional supervisors, assuming that

the same level of BIA employees will be maintained. Additional funds will likely be

necessary once the new organization determines what service it, will provide to

tribes and individual Indians. With respect to contracting and compacting with

tribes, there will likely need to be amendments to various Federal statutes, including the Indian Self-Determination and Self-Governance Act, to provide for mandatory contracting/compacting requirements for any new non-BIA organization.

Restructuring of any Federal agency must be done in accordance with pre-determined plans, with identified and measurable goals and specific timeframes, none of

which presently exist for restructuring Indian affairs today. Restructuring for the

sake of restructuring is typically not the best use of limited resources, funds or time.

Quite simply, changing employee name tags and agency addresses will not fix trust

problems. Over three-quarters of a billion dollars have been spent by Federal officials and numerous consultants in the name of trust reform and little benefits have

been demonstrated from the results. Yet tribes continue to struggle with underfunded programs, largely because of the unwillingness of Federal officials to provide

funding and resources at the local tribal government levels, where clear progress is

being made as tribes have consistently corrected problems and brought stability to

local trust services under the Self-Determination and Self-Governance Acts. It

seems clear that the Federal Government has simply been investing in the wrong

solutions.

With respect to the DOI consultation process for the Task Force report, we are

concerned that the process is not proceeding in a manner that will provide meaningful input from tribes and individual Indians regarding trust reform activities. Quite

simply, DOI cannot expect that having just over 30 days for review and comment

on such a major effort provides any level of reasonable consultation with tribes

across the Nation, even if the Task Force Report were to be expanded to include

sufficient information with which to make an independent assessment of the Task

Force’s recommendations. It has also been explained that the EDS contract is supposed to provide additional substantive information regarding how the options will

impact the local levels of the BIA. Further, no explanation has been provided to reconcile the fact that the Task Force’s report to the Secretary will be submitted in

July while the EDS analysis won’t be completed until December.

Trust Reform Budget Requests. The Tribe does not believe that DOI has given

fair consideration of budget needs to implement trust reform measures. Past needsbased budgets submitted to tribes during national budget meetings indicate that

there is a need of approximately $7.0 billion to adequately fulfill the trust obligations to tribes and individual Indians, as compared to the existing BIA budget of

approximately $2.2 billion. Instead of dedicating more limited funds and resources

toward reorganization of the BIA, the Hoopa Valley Tribe believes that DOI must

aggressively work toward securing adequate funds and resources to implement the

Federal trust obligations to tribes and individual Indians. Without both adequate

funds and a commitment to engage tribes into every phase of the trust reform efforts, no trust reform plan can be successfully implemented.

With respect to S. 2212, the Tribe strongly believes that there must be a legislative solution to trust reform problems if they are ever going to be resolved. Quite

simply, there is presently insufficient legal guidance and authority to address the

trust management issues that we are confronted with today. S. 2212 provides a

sound beginning point for the legislative package.

Our comments on S. 2212 are as follows:

No. 1. We agree with S. 2212 that the BIA structure must be kept in tact. Besides

not having the time or funds to construct a new Indian agency, the exercise of separating trust functions between resource management and other trust services will

undoubtedly become an insurmountable task. The Hoopa Valley Tribe opposes DOI

proposals that fragment the BIA into two or more agencies because we believe that
32

it will ultimately lead to the destruction of Indian services and diminishment of

trust responsibilities owed to tribes and individual Indians by the United States.

No. 2. We disagree with section 307 of the bill that there is a need for a new Deputy Secretary for Trust Management and Reform. We believe that the bill correctly

defines the trust duties for trust asset management and that the existing Assistant

Secretary for Indian Affairs can appropriately address trust reform issues provided

that the necessary funding and resources are made available to the BIA.

No. 3. We wholeheartedly agree with the provision contained in the bill that provides for the development of resource management plans. We believe that this is

one of the key cornerstones to ultimately resolving the differences between tribes,

individual Indians and the United States with respect to management of trust lands

and resources. Again, adequate funding must be made available to accomplish this

goal and adequate flexibility must be provided to tribes and individual Indians to

contract for the development of the plans.

No. 4. We recommend that a provision be added to the bill that will facilitate the

development and submission of adequate budgets necessary to properly manage

trust assets and to fulfill the trust responsibilities of the United States to tribes and

individual Indians. We suggest that language be included that mandates that the

annual BIA Unmet Needs budget be reviewed so that annual budgets provide a reasonable method of increasing the funding levels of the BIA on a regular basis to

meet the unmet needs.

No. 5. We recommend that a section be added that would establish a new Division

of Indian Claims within the DOI Office of Hearings and Appeals. Throughout the

years of tribal deliberations regarding trust reform, tribes have expressed frustration from not having access to information that is controlled by the United States

that would help to facilitate the development of claims, in order to resolve these

claims through mediation, negotiation, litigation or legislation.

No. 6. We recommend that provisions be added to the bill that would facilitate

resolution of the breaches of trust that have been identified by the Cobell Court.
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