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S. HRG. 109–572

TRIBAL PARITY ACT; AND THE CHEYENNE RIVER

SIOUX TRIBE EQUITABLE COMPENSATION

AMENDMENTS ACT

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

ON

S. 374

TO PROVIDE COMPENSATION TO THE LOWER BRULE AND CROW CREEK

SIOUX TRIBES OF SOUTH DAKOTA FOR DAMAGE TO TRIBAL LAND

CAUSED BY PICK-SLOAN PROJECTS ALONG THE MISSOURI RIVER

S. 1535

TO AMEND THE CHEYENNE RIVER SIOUX TRIBE EQUITABLE COMPENSATION ACT TO PROVIDE COMPENSATION TO MEMBERS OF THE

CHEYENNE RIVER SIOUX TRIBE FOR DAMAGE RESULTING FROM THE

OAHE DAM AND RESERVOIR PROJECT

JUNE 14, 2006

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

JOHN McCAIN, Arizona, Chairman

BYRON L. DORGAN, North Dakota, Vice Chairman

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

GORDON SMITH, Oregon

LISA MURKOWSKI, Alaska

MICHAEL D. CRAPO, Idaho

RICHARD BURR, North Carolina

TOM COBURN, M.D., Oklahoma

DANIEL K. INOUYE, Hawaii

KENT CONRAD, North Dakota

DANIEL K. AKAKA, Hawaii

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

JOHN TAHSUDA, III, Majority Staff Director

SARA G. GARLAND, Minority Staff Director

(II)
(III)

C O N T E N T S

Page

S. 374 and S. 1535, text of ...................................................................................... 3

Statements:

Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice chairman,

Committee on Indian Affairs ....................................................................... 13

Frazier, Harold, chairman, Cheyenne River Sioux Tribe .............................. 30

Jandreau, Michael, chairman, Lower Brule Sioux Tribe .............................. 22

Johnson, Hon. Tim, U.S. Senator from South Dakota .................................. 13

Lawson, Michael L., Morgan, Angel and Associates ...................................... 24

Malcolm, Jeffery D., assistant director, Natural Resources and Environment, U.S. Government Accountability Office ............................................ 14

McCain, Hon. John, U.S. Senator from Arizona, chairman, Committee

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

Nazzaro, Robin M., director, Natural Resources and Environment, U.S.

Government Accountability Office ............................................................... 14

Thompson, Lester, chairman, Crow Creek Sioux Tribe ................................ 23

Thune, Hon. John, U.S. Senator from South Dakota .................................... 21

Vogel, Sharon, Cheyenne River Sioux Tribe .................................................. 32

APPENDIX

Prepared statements:

Frazier, Harold (with attachment) .................................................................. 42

Jandreau, Michael ............................................................................................ 39

Lawson, Michael L. (with attachment) ........................................................... 75

LeBeau, Freddy, vice chairman, Oahe Landowners Association .................. 86

Nazzaro, Robin M. (with attachments) ........................................................... 87

Thompson, Lester ............................................................................................. 167

Vogel, Sharon .................................................................................................... 170

(1)

TRIBAL PARITY ACT; AND THE CHEYENNE

RIVER SIOUX TRIBE EQUITABLE COMPENSATION AMENDMENTS ACT

WEDNESDAY, JUNE 14, 2006

U.S. SENATE,

COMMITTEE ON INDIAN AFFAIRS,

Washington, DC.

The committee met, pursuant to notice, at 9:35 a.m. in room 485

Senate Russell Office Building, Hon. John McCain (chairman of the

Senate Committee on Indian Affairs) presiding.

Present: Senators McCain, Dorgan, Johnson, and Thune.

STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM

ARIZONA, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

The CHAIRMAN. Good morning. The hearing this morning will address two measures that are currently before the committee: S.

374, known as the Tribal Parity Act, and S. 1535, the Cheyenne

River Sioux Tribe Equitable Compensation Amendments Act of

2005.

The first two panels of the hearing will be addressing S. 374, and

the third panel will address S. 1535. The principal reason for the

hearing on S. 374 is to address a recent report issued by the GAO

at the committee’s request. The committee marked up this bill back

in late June 2005. After that, but before a committee report was

filed, a representative of GAO contacted committee staff expressing

some concern about language in the bill suggesting that the compensation levels of the bill were based on a methodology that had

been determined inappropriate by the GAO. The GAO staff indicated that in certain respects, the methodology used to calculate

the compensation levels in the bill deviated from the GAO methodology used in determining the additional compensation in legislation enacted for other Indian tribes impacted by Pick-Sloan projects

on the Missouri River.

Therefore, I asked the GAO to analyze the methodology used for

S. 374 and to prepare the report which is the focus of the first part

of the hearing today.

The second matter of the hearing, S. 1535, would amend the

Cheyenne River Sioux Tribe Equitable Compensation Act that was

passed by Congress in the year 2000. The principal amendment to

the 2000 act would accelerate the payment schedule and change

the funding source from annual appropriations to revenues derived

from the Pick-Sloan.
2

[Text of S. 374 and S. 1535 follow:]
3

1

II

109TH CONGRESS

1ST SESSION S. 374

To provide compensation to the Lower Brule and Crow Creek Sioux Tribes

of South Dakota for damage to tribal land caused by Pick-Sloan projects

along the Missouri River.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 14, 2005

Mr. THUNE (for himself and Mr. JOHNSON) introduced the following bill;

which was read twice and referred to the Committee on Indian Affairs

A BILL

To provide compensation to the Lower Brule and Crow Creek

Sioux Tribes of South Dakota for damage to tribal land

caused by Pick-Sloan projects along the Missouri River.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Tribal Parity Act’’.

5 SEC. 2. FINDINGS.

6 Congress finds that—

7 (1) the Pick-Sloan Missouri River Basin Pro8 gram (authorized by section 9 of the Act of Decem9 ber 22, 1944 (commonly known as the ‘‘Flood Con-
4

2

•S 374 IS

1 trol Act of 1944’’) (58 Stat. 891)), was approved to

2 promote the general economic development of the

3 United States;

4 (2) the Fort Randall and Big Bend dam and

5 reservoir projects in South Dakota—

6 (A) are major components of the Pick7 Sloan Missouri River Basin Program; and

8 (B) contribute to the national economy;

9 (3) the Fort Randall and Big Bend projects in10 undated the fertile bottom land of the Lower Brule

11 and Crow Creek Sioux Tribes, which greatly dam12 aged the economy and cultural resources of the

13 Tribes;

14 (4) Congress has provided compensation to sev15 eral Indian tribes, including the Lower Brule and

16 Crow Creek Sioux Tribes, that border the Missouri

17 River and suffered injury as a result of 1 or more

18 Pick-Sloan Projects;

19 (5) the compensation provided to those Indian

20 tribes has not been consistent;

21 (6) Missouri River Indian tribes that suffered

22 injury as a result of 1 or more Pick-Sloan Projects

23 should be adequately compensated for those injuries,

24 and that compensation should be consistent among

25 the Tribes; and
5

3

•S 374 IS

1 (7) the Lower Brule Sioux Tribe and the Crow

2 Creek Sioux Tribe, based on methodology deter3 mined appropriate by the General Accounting Office,

4 are entitled to receive additional compensation for

5 injuries described in paragraph (6), so as to provide

6 parity among compensation received by all Missouri

7 River Indian tribes.

8 SEC. 3. LOWER BRULE SIOUX TRIBE.

9 Section 4(b) of the Lower Brule Sioux Tribe Infra10 structure Development Trust Fund Act (Public Law 105–

11 132; 111 Stat. 2565) is amended by striking

12 ‘‘$39,300,000’’ and inserting ‘‘$186,822,140’’.

13 SEC. 4. CROW CREEK SIOUX TRIBE.

14 Section 4(b) of the Crow Creek Sioux Tribe Infra15 structure Development Trust Fund Act of 1996 (Public

16 Law 104–223; 110 Stat. 3027) is amended by striking

17 ‘‘$27,500,000’’ and inserting ‘‘$105,917,853’’.

Æ
6

1

II

109TH CONGRESS

1ST SESSION S. 1535

To amend the Cheyenne River Sioux Tribe Equitable Compensation Act

to provide compensation to members of the Cheyenne River Sioux Tribe

for damage resulting from the Oahe Dam and Reservoir Project, and

for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 28, 2005

Mr. JOHNSON (for himself and Mr. THUNE) introduced the following bill;

which was read twice and referred to the Committee on Indian Affairs

A BILL

To amend the Cheyenne River Sioux Tribe Equitable Compensation Act to provide compensation to members of

the Cheyenne River Sioux Tribe for damage resulting

from the Oahe Dam and Reservoir Project, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Cheyenne River Sioux

5 Tribe Equitable Compensation Amendments Act of 2005’’.

6 SEC. 2. FINDINGS.

7 (a) FINDINGS.—Congress finds that—
7

2

•S 1535 IS

1 (1) the Pick-Sloan Missouri River Basin pro2 gram, authorized by section 9 of the Act of Decem3 ber 22, 1944 (commonly known as the ‘‘Flood Con4 trol Act of 1944’’) (58 Stat. 891), was intended to

5 promote the general economic development of the

6 United States;

7 (2) the Oahe Dam and Reservoir Project—

8 (A) is a major component of the Pick9 Sloan Missouri River Basin program; and

10 (B) contributes to the national economy;

11 (3) the Oahe Dam and Reservoir Project flood12 ed the fertile bottom land of the Cheyenne River

13 Sioux Reservation, which greatly damaged the econ14 omy and cultural resources of the Cheyenne River

15 Sioux Tribe and caused the loss of many homes and

16 communities of members of the Tribe;

17 (4) Congress has provided compensation to sev18 eral Indian tribes, including the Cheyenne River

19 Sioux Tribe, that border the Missouri River and suf20 fered injury as a result of 1 or more of the Pick21 Sloan projects;

22 (5) on determining that the compensation paid

23 to the Cheyenne River Sioux Tribe was inadequate,

24 Congress enacted the Cheyenne River Sioux Tribe

25 Equitable Compensation Act (Public Law 106–511;
8

3

•S 1535 IS

1 114 Stat. 2365), which created the Cheyenne River

2 Sioux Tribal Recovery Trust Fund; and

3 (6) that Act did not provide for additional com4 pensation to members of the Cheyenne River Sioux

5 Tribe that lost land as a result of the Oahe Dam

6 and Reservoir Project.

7 (b) PURPOSES.—The purposes of this Act are—

8 (1) to provide that the Cheyenne River Sioux

9 Tribal Recovery Trust Fund may be used to provide

10 compensation to members of the Cheyenne River

11 Sioux Tribe that lost land as a result of the Oahe

12 Dam and Reservoir Project; and

13 (2) to provide for the capitalization of the Chey14 enne River Sioux Tribal Recovery Trust Fund.

15 SEC. 3. CHEYENNE RIVER SIOUX TRIBE EQUITABLE COM16 PENSATION.

17 (a) FINDINGS AND PURPOSES.—Section 102 of the

18 Cheyenne River Sioux Tribe Equitable Compensation Act

19 (Public Law 106–511; 114 Stat. 2365) is amended—

20 (1) in subsection (a)(3), by striking subpara21 graphs (A) and (B) and inserting the following:

22 ‘‘(A) the United States did not justify, or

23 fairly compensate the Tribe and member land24 owners for, the Oahe Dam and Reservation

25 project, under which the United States acquired
9

4

•S 1535 IS

1 104,492 acres of land of the Tribe and member

2 landowners; and

3 ‘‘(B) the Tribe and member landowners

4 should be adequately compensated for that

5 land;’’; and

6 (2) in subsection (b)(1), by inserting ‘‘and

7 member landowners’’ after ‘‘Tribe’’ each place it ap8 pears.

9 (b) DEFINITIONS.—Section 103 of the Cheyenne

10 River Sioux Tribe Equitable Compensation Act (Public

11 Law 106–511; 114 Stat. 2365) is amended—

12 (1) by redesignating paragraphs (1) and (2) as

13 paragraphs (4) and (3), respectively, and moving the

14 paragraphs so as to appear in numerical order; and

15 (2) by inserting before paragraph (3) (as redes16 ignated by paragraph (1)) the following:

17 ‘‘(1) MEMBER LANDOWNER.—The term ‘mem18 ber landowner’ means a member of the Tribe (or an

19 heir of such a member) that owned land (including

20 land allotted under the Act of February 8, 1887 (24

21 Stat. 388, chapter 119)) located on the Cheyenne

22 River Sioux Reservation that was acquired by the

23 United States for the Oahe Dam and Reservoir

24 Project.
10

5

•S 1535 IS

1 ‘‘(2) POWER PROGRAM.—The term ‘power pro2 gram’ means the power program under the Pick3 Sloan Missouri River Basin program.’’.

4 (c) CHEYENNE RIVER SIOUX TRIBAL RECOVERY

5 TRUST FUND.—Section 104 of the Cheyenne River Sioux

6 Tribe Equitable Compensation Act (Public Law 106–511;

7 114 Stat. 2365) is amended—

8 (1) by striking subsection (b) and inserting the

9 following:

10 ‘‘(b) FUNDING.—

11 ‘‘(1) IN GENERAL.—The Secretary of the

12 Treasury shall deposit into the Fund an amount

13 equal to 25 percent of the amount deposited into the

14 Treasury from the power program during the pre15 ceding fiscal year for the period—

16 ‘‘(A) beginning on October 1, 2004; and

17 ‘‘(B) ending on the last date of the fiscal

18 year during which the total amount deposited

19 into the Treasury from the power program

20 equals the amount described in paragraph (2).

21 ‘‘(2) DESCRIPTION OF AMOUNT.—

22 ‘‘(A) IN GENERAL.—The amount referred

23 to in paragraph (1)(B) is an amount equal to

24 the sum of—

25 ‘‘(i) $290,722,958; and
11

6

•S 1535 IS

1 ‘‘(ii) an amount equal to the amount

2 of interest or earnings that would have ac3 crued on the amount described in clause (i)

4 if that amount had been invested in ac5 cordance with subsection (c) as of October

6 1, 2001.

7 ‘‘(B) CALCULATION OF INTEREST.—The

8 amount of interest and earnings described in

9 subparagraph (A)(ii) shall be determined by ap10 plying the Lehman Government Bond Index (or

11 a similar index, as determined by the Secretary

12 of the Treasury, in consultation with the Tribal

13 Council).’’;

14 (2) in subsection (d)(1), by striking ‘‘Beginning

15 on the first day of the 11th fiscal year after the date

16 of enactment of this Act’’ and inserting ‘‘Beginning

17 on October 1, 2005,’’; and

18 (3) in subsection (f)—

19 (A) by redesignating paragraphs (3) and

20 (4) as paragraphs (4) and (5), respectively; and

21 (B) by inserting after paragraph (2) the

22 following:

23 ‘‘(3) MEMBER LANDOWNERS.—

24 ‘‘(A) IN GENERAL.—The plan may provide

25 for the payment of additional compensation to
12

7

•S 1535 IS

1 member landowners for acquisition of land by

2 the United States for use in the Oahe Dam and

3 Reservoir Project.

4 ‘‘(B) PROVISION OF RECORDS.—To assist

5 the Tribe in processing claims of heirs of mem6 ber landowners for land acquired by the United

7 States for use in the Oahe Dam and Reservoir

8 Project, the Secretary of the Interior shall pro9 vide to the Tribe any record requested by the

10 Tribe to identify the heirs of member land11 owners by the date that is 60 days after the

12 date of receipt of a request from the Tribe.’’.

13 (d) ELIGIBILITY OF TRIBE FOR CERTAIN PROGRAMS

14 AND SERVICES.—Section 105 of the Cheyenne River Sioux

15 Tribe Equitable Compensation Act (Public Law 106–511;

16 114 Stat. 2365) is amended in the matter preceding para17 graph (1) by inserting ‘‘or any member landowner’’ after

18 ‘‘Tribe’’.

Æ
13

The CHAIRMAN. I would like to express my appreciation to Senator Johnson, Senator Thune, and Senator Dorgan for their persistence and focus and attention on this issue. It is a bit complex. It

sounds a bit arcane to many people, but it is obviously very, very

important to the tribes that reside in their States, and I am

pleased to see that their commitment and dedication to resolving

this issue may bring us much closer as a result of their hard work.

Senator Dorgan.

STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM

NORTH DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN

AFFAIRS

Senator DORGAN. Senator McCain, thank you very much. I want

to thank my colleagues Senator Johnson and Senator Thune for

their leadership on the bills that are important here to the tribes

in South Dakota. We in North Dakota know a fair amount about

the Pick-Sloan Missouri River Basin Program and the benefits that

it was to provide to the residents of the Missouri River valley in

the upstream States. But those benefits have come with very significant costs in many instances, particularly and especially for

tribal people.

I know from the tribes in North Dakota how detrimental that

dam construction was and has been to their communities, changing

the way of life and the subsistence for many tribes. Just for my colleague Senator Johnson’s benefit, my father as a very young man

lived in Elbow Woods, ND herding horses. Elbow Woods, ND no

longer exists. It is now under water. It was inundated with Lake

Sacajawea. It has been under water now for 50 years. That community no longer exist, and all those who lived there, including the

hospital that existed there, they moved, except the hospital didn’t

reopen anyplace. That is another issue we are still working on

today, 50 years later.

The point is, they moved, significant things changed, the diets

changed, opportunities changed. So I well understand the motive

and the interest behind this legislation. I think Senator Johnson

and Senator Thune are to be commended, and I am appreciative

of the chairman for holding this hearing today.

The CHAIRMAN. Senator Johnson.

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

SOUTH DAKOTA

Senator JOHNSON. Thank you, Chairman McCain and Vice Chairman Dorgan, as well as the staff of the Committee on Indian Affairs, for agreeing to hold this hearing.

The Tribal Parity Act and the Cheyenne River Equitable Compensation Amendments Act are of the utmost importance to the

tribes involved and the attention the Committee on Indian Affairs

has given to the Great Plains is appreciated by all the tribes in my

State.

I would also like to welcome our South Dakota witnesses to the

committee. Chairman Jandreau of the Lower Brule Tribe is an institution in South Dakota, having served as tribal chairman for

over 27 years now. His experience and his perspective have been

both kindly provided and a great benefit to my office over the
14

years. Chairman Frazier of the Cheyenne River Tribe has been a

frequent guest of the committee and a tireless advocate for his

tribe in Washington. Chairman Thompson of the Crow Creek Tribe

is new to the job and comes in with the hopes of his community

for building a better future.

Sharon Vogel has been a great advocate for economic development on Cheyenne River. I also want to extend a big welcome to

Freddy LeBeau and the others I have met with regard to the importance of these two bills to the tribes and the individual tribal

members involved.

The legislation to be discussed in this hearing deals with the

Pick-Sloan project on the Missouri River and the impacts it continues to have on three tribes in South Dakota. The Lower Brule and

the Crow Creek Tribes were both significantly impacted by the Fort

Randall Dam and the Big Bend Dam, which flooded parts of both

reservations in 1952 and then again in 1963, forcing many families

to relocate twice.

Likewise, the Oahe Dam near Pierre, SD was completed in 1958

and resulted in the loss of 104,420 acres of land to the Cheyenne

River Tribe. No amount of compensation could ever fully account

for everything that these tribes lost. However, Congress has twice

acted to provide some compensation to mitigate the loss of each of

these tribes. There still is more that needs to be done.

While we can never erase the damage that has been done to the

tribes and tribal members of the Missouri River, these bills go a

long way toward helping the Lower Brule, the Crow Creek, and the

Cheyenne River recover from the harm inflicted more than 40

years ago.

I want to especially thank Senator Thune for introducing the

Tribal Parity Act and for cosponsoring the Cheyenne River Sioux

Tribe Equitable Compensation Amendments Act of 2005. Their

leadership on these issues and presence here today are greatly appreciated.

Again, I want to thank the Indian Affairs Committee for allowing

this hearing, and I look forward to hearing from the witnesses.

The CHAIRMAN. Thank you, sir.

Our first panel is Robin M. Nazzaro who is the director of the

Natural Resources and Environment, Government Accountability

Office. She is accompanied by Jeffery Malcolm, assistant director.

Welcome, Ms. Nazzaro. Welcome, Mr. Malcolm.

STATEMENT OF ROBIN M. NAZZARO, DIRECTOR, NATURAL RESOURCES AND ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY JEFFERY MALCOLM,

ASSISTANT DIRECTOR

Ms. NAZZARO. Thank you, Mr. Chairman and members of the

committee. I am pleased to be here today to discuss the compensation claims of the Crow Creek and Lower Brule Tribes.

As you know, from 1946 to 1966,the Federal Government constructed the Fort Randall and Big Bend Dams as flood control

projects on the Missouri River in South Dakota. Installation of the

dams caused the permanent flooding of approximately 38,000 acres

of the tribes’ reservations. During construction, the tribes entered

into negotiations with the Federal Government for compensation
15

for that land. In both cases, they were unable to reach an negotiated settlement and Congress imposed legislative settlements

that were less than the amounts that the tribes had requested.

In the 1990’s, the tribes sought and received additional compensation. Tribes at five other reservations also lost land to flood

control projects, received compensation for damages, and requested

and received additional compensation. Prior to the Congress authorizing additional compensation to the tribes at three other reservations, the GAO was asked to review their claims. For these

tribes, we found the economic analysis used to justify their claims

to be unreliable and we suggested that the Congress not rely on

them as a basis for providing additional compensation.

As an alternative, we suggested that if the Congress determined

that additional compensation was warranted, it could determine

the amount of compensation by calculating the difference between

the tribes’s final settlement proposal, which we refer to as the

tribes’s final asking price, and the amount of compensation the

Congress originally authorized.

We used the inflation rate and an interest rate to adjust the difference to reflect a range of current values, using the inflation rate

for the lower end of the range and the interest rate for the higher

end.

In 2003, the Crow Creek and Lower Brule Tribes hired a consultant, Dr. Lawson, to determine if they were due further additional

compensation based on the method we proposed. As a result of his

analyses, the tribes are currently seeking a third round of compensation totaling about $230 million. The tribes assert that their

calculations for additional compensation will bring them into parity

with the additional compensation provided to the other tribes on

the Missouri River.

After assessing Dr. Lawson’s methods and analysis for determining additional compensation, we found his approach differed from

the approach we used in two ways. First, Dr. Lawson did not use

the tribes’s final asking price as the starting point. During settlement negotiations for the Fort Randall and Big Bend Dams, as was

the case with the negotiations for the other dams that we reviewed,

the tribes made a number of settlement proposals.

In calculating additional compensation amounts, we used the

tribes’s final asking prices because we believed they represented

the most complete and realistic amounts. In contrast, Dr. Lawson

used selected numbers from a variety of tribal settlement proposals, several that were not from the tribes’s final asking prices.

Second, Dr. Lawson calculated only the highest additional compensation dollar value, rather than a range of possible additional

compensation based on different adjustment factors. He used the

corporate bond rate to develop a single figure for each tribe. His

justification was that the use of the high end of our range would

ensure parity with the amounts the tribes at Fort Berthold and the

Cheyenne River Tribe received.

However, as our chart shows, the Congress has not always chosen to use the highest value in the ranges we estimated. In the

case of the Standing Rock Tribe, the Congress chose to provide additional compensation closer to the lower end of the range we estimated.
16

Although the additional compensation amounts provided in the

1990’s were not calculated using our approach, the amounts were

generally within the ranges we would have proposed. Moreover, the

additional compensation already authorized for the tribes in the

1990’s is consistent with the additional compensation authorized

for the other tribes on the Missouri River.

The chart I brought with me today shows the ranges we have

calculated for the five tribes on the Missouri River and the additional compensation authorized by the Congress. Rather than

bringing the Crow Creek and Lower Brule Tribes into parity with

the additional compensation provided to the other tribes, we believe that the compensation under consideration would catapult

them ahead of the other tribes and set a precedent for the other

tribes to seek a third round of compensation.

Notwithstanding the results of our analysis, the Congress will ultimately need to decide whether additional compensation should be

provided and, if so, how much it should be. We recognize that the

issues can be sensitive, complex and controversial. Our analysis is

intended to assist the Congress in this regard.

Thank you, Mr. Chairman. This concludes my prepared statement. I would be happy to respond to any questions that you or

members of the committee may have at this time.

[Prepared statement of Ms. Nazzaro appears in apendix.]

The CHAIRMAN. Do you have a number that you think is reasonable, or is that out of the scope of your studies here?

Ms. NAZZARO. Well, what we were asked to do, sir, was to look

at the compensation proposal. What we did is looked at the additional compensation the two tribes previously received, and while

we didn’t calculate that prior to Congress authorizing those trust

funds, it would have been in the range. So what they had already

received put them on parity with the other five tribes on the Missouri River.

The CHAIRMAN. Which is, roughly?

Ms. NAZZARO. Which tribes?

The CHAIRMAN. You said, ‘‘to put them on parity.’’ How much

would that be?

Ms. NAZZARO. We estimated for Crow Creek the range would have been between $6.5 million and $21.4 million. Crow Creek received $27.5 million, so they were actually a little bit above our

range. For the Lower Brule, the range would have been $12.2 million to $40.9 million, and they received additional compensation of

$39.3 million, so they were already within our range. So we feel

both of them are near the high end of what we would have proposed had we reviewed it prior to the additional compensation. So

that is why we are saying the additional compensation currently

being proposed would actually catapult them above what the other

tribes received.

The CHAIRMAN. And this bill, as I understand it, as proposed

would raise it from $39 million to $186 million?

Mr. MALCOLM. That is correct.

The CHAIRMAN. That is a pretty big difference in numbers here.

How do you account for that?

Ms. NAZZARO. The additional compensation that they are asking

for? As I mentioned, the baseline that they used was different than
17

the baseline that we used. When we started using our methodology,

we looked at the final asking price that the tribes had asked during

the negotiation process. We then compared that to the difference in

what they had received initially. That difference we then applied

an interest rate which would have then given a reflection of what

their spending power would have been, as well as a corporate bond

rate which would have been a high end had they invested the

funds.

That gave the range of what we were proposing would have been

appropriate for the additional compensation.

The CHAIRMAN. I don’t know a lot about this issue, Ms. Nazzaro.

It is I think appropriate for members of this committee to rely on

the views of people, the members who reside in the States and the

various inputs that we receive. But it seems to me there is a very

large disparity in amounts of money. Is it based on acres that were

inundated? What was the basic formula for this compensation?

Ms. NAZZARO. The original compensation, there were a number

of studies that were done. The Corps of Engineers did a study. The

Department of the Interior did studies. They actually did a pretty

good job of inventorying all of the assets that the tribes had at the

time and what was going to be compensated. They also looked at

what potential earning power the tribes would have had from some

of these assets such as timber that were no longer going to be

available to them.

That was the basis for the original compensation. As I said, that

was not what the tribes were asking for. Initially, the Federal Government gave all the tribes less than what they were asking. The

five tribes have come back and asked for a second round of compensation which was awarded to each one of them, and those five

would have fallen along the range of what we had proposed using

our methodology, starting with this final asking price, and them

somewhere within the range reflecting the current value of that

money, the difference of the money.

The CHAIRMAN. Well, I guess I would ask the next panel and my

colleague from South Dakota, is this the last time we are going to

come back and ask for more money? It looks to me like this is the

third or fourth trip to the trough here. I would be interested in

that.

Senator Dorgan.

Senator DORGAN. Thank you, Mr. Chairman.

Just briefly, it is the case both I think in North Dakota, because

we have been through this, and also with respect to South Dakota

and other circumstances along the Missouri, when the Pick-Sloan

project was built and the main-stem dams were created and the

reservoirs flooded lands that were on Indian reservations, the Indians were under-compensated for that. You believe as well that the

Indians were not compensated adequately originally by the Federal

Government. Is that correct?

Ms. NAZZARO. We have not assessed whether the original authorization was adequate or not. We have looked at the studies that

were done. We know what the basis was for the Government’s negotiated price, and we know somewhat about the basis for what the

tribes were asking. We know the tribes did not get compensation

that they felt was equitable at that time.
18

Senator DORGAN. I think we have been back through this with

respect to some North Dakota tribes. It is pretty clear that back

then, one-half century ago when these lands were taken, that the

compensation was not adequate to respond to the needs of the

tribes that were going to exist after all of that land was taken and

flooded and so on. And their lives were changed dramatically.

I was just trying to understand what you are saying with this

report, and I think I now do understand it.

Ms. NAZZARO. We never objected to the second round of compensation. We just tried to provide a method that should Congress

determine if a second round was due, what methodology they could

use to try to put some equity to that, given that the tribes did not

feel they had parity at that point.

Senator DORGAN. I understand. The fact is, the chairman’s question is a legitimate question as well. I mean, there needs to be settlement with respect to these issues, and you need to establish

what is a fair level of compensation, and then all the parties need

to move on. You can’t come again and again and again.

I go back to the point I asked originally. I think it is clear, at

least it was with respect to our having gone through this with the

North Dakota tribes, that the original compensation was inadequate, and that required the Congress to readdress that.

Mr. Chairman, thank you very much.

The CHAIRMAN. Senator Johnson.

Senator JOHNSON. Thank you.

I think it is important to note that the two tribes we are talking

about here are relatively modest-sized tribes. The Crow Creek is in

Buffalo County, SD, which is the poorest county in America. And

I think it is important than when we base a fair price based on the

last asking price of tribes, that presumes a fair negotiating balance

between the tribes and the Federal Government at the time. The

fact is, at the time the land was already flooded. These people were

desperately poor. Their negotiating capability is not very sophisticated.

So to this day, they are paying the price for their last offer, when

in fact I think the last offer may not have been as equitable as it

needed to be.

In any event, I want to thank the GAO for its testimony today.

I want to make it clear that we as members of the committee are

not seeking to simply augment the trust fund for the sake of augmenting the trust fund. What we are attempting to do here is to

arrive at a systematic, equitable and fair way of determining what

a fair trust fund compensation ought to be, and we want to come

to that conclusion with great finality, so that as the chairman

notes, this isn’t going to be some perennial issue where we come

back and seek additional trust fund compensation, but that we

come to a final conclusion and that will be that.

The GAO report states that the drawn out negotiations and the

amounts of the tribes’s final asking price do not support the conclusion that the tribes simply capitulated and accepted whatever the

Government offered. The tables this statement refers to on pages

18, 19, and 20 do not include initial settlement proposals and instead have a settlement figure used by the tribes’s consultant.
19

I see that the additional table on table two that you have provided as part of your testimony includes initial settlement proposals. What accounts for the differences between the initial proposals

and the proposals used by the tribes’s consultant?

Mr. MALCOLM. In a couple of cases, there was actually, he did

use the tribes’s initial settlement offer. For Fort Randall Dam and

for Lower Brule, in fact, he used the initial offer in a couple of instances, I believe for direct and indirect damages, which was two

of the components. That was from 1954.

Conversely, for Crow Creek for the same dam, he used numbers

from 1957. So again, he used selected numbers from a variety of

offers over points in time. But yes, over the course of the negotiations, the offers for individual components fluctuated and went up

and down. So there was a lot of variability. Again, it was just part

of the negotiations. Either the tribes received additional information through negotiations with the Government. They may have

been willing to accept less for one component as a tradeoff for receiving more in another component.

Ms. NAZZARO. If I could add, though, Mr. Johnson, in total, if you

look at what the tribes asked in their initial price versus their final

asking price, the final asking price in total was higher. Actually in

12 of the 15 components, the indirect, the direct, the rehabilitation

et cetera, 12 of the 15 are either higher in the final asking price

or equal to the initial proposal.

We went through extensive records at the archives, as well as

Department of the Interior’s library to get an understanding, to

make sure that we weren’t applying just an arbitrary decision to

use the final asking price, but to make sure that the tribes hadn’t

capitulated, hadn’t been worn down through the negotiations, and

that the numbers just kept falling.

Senator JOHNSON. The numbers suggested in this bill are within

the range of what the negotiations were. Is that fair to say?

Ms. NAZZARO. The number that the tribe is requesting in this bill

would exceed what we are——

Senator JOHNSON. It exceeds what you think is right, but it falls

within the range of what the negotiations were at the time.

Mr. MALCOLM. In one sense. It does in the sense that those individual components that were selected were offered as part of the

tribal settlements at various points in time. However, the tribes as

a cohesive settlement proposal never had a proposal that consisted

of those dollar values at a point in time. So for example in 1954,

if you want to use an original settlement, rather than consistently

using all the numbers from 1954, he instead chose to use numbers

picking various components at different points in time. So historically from that point, no, the tribes never made a settlement proposal that consisted of the numbers he used as his starting point.

Senator JOHNSON. I understand that the GAO’s basis for using

final asking price is the assumption that better information will

emerge throughout negotiations leading to a closer approximation

of the amounts asked for, with the value of actual loss to the parties. Inconsistency of the amounts asked for by the tribes between

initial asking price, Dr. Lawson’s figures, and the final asking price

shows considerable inconsistency at what was asked for at different

points in time. How do you justify this inconsistency with the no-
20

tion that better information is the prime factor influencing the

tribe’s settlement proposals or their asking process?

Ms. NAZZARO. I don’t think we said it was just better information, but better information and more realistic. As I said, in the

number of cases, though, we do see where the final asking price

was higher than the original proposal, so in there, we do feel that

more information came to light as to the value of the assets, particularly where you are talking direct damages. For example, in the

case of Crow Creek, direct damages originally they were asking

$566,000, and in the final asking price they asked for $641,000.

Mr. MALCOLM. One of the other main components here that is

the main difference in all this is called ‘‘rehabilitation.’’ That,

again, was to enhance the economic standing of all the tribe and

all of its members. So a lot of the funding, over 50 percent in most

cases for both tribes, were really as a result of a kind of a termination era policy in the 1950’s and 1960’s. So the variability you

see is really largely in the rehabilitation figure, so it is just in one

component, and that component was not directly related. It was

intertwined with the negotiations, but it wasn’t directly related to

damages from the dam.

Senator JOHNSON. Finally, I know the tribes have serious concerns with the conclusion in your report that states:

While our analysis does not support the additional compensation amounts contained in the parity bill, the Congress will ultimately decide whether additional

compensation should be provided, and if so, how much it should be.

I understand the GAO does not take positions on pending legislation, so could you please clarify the role of the GAO in this analysis

and discuss whether or not this conclusion was a policy statement

of the GAO?

Ms. NAZZARO. I would say this was not a policy statement because as we said, it is not our decision to decide whether the tribes

are due additional compensation. What we were asked to look at

was what was the difference between, or whether the numbers put

forward by the consultant were consistent with the methodology

that we had used when we had reviewed prior tribal requests.

In this case, we found there were some differences in the methodology that he applied. Ultimately, we looked at what the tribes

had requested initially, what they received in additional compensation, and tried to apply our formula, and that is where we came

to the conclusion that what they had received in the second round

of compensation was consistent with what we would have proposed

had we looked at it prior.

We do realize that there are other factors that may need to come

into the discussion over and above the kind of analysis we did that

would certainly lend itself to your ultimate decisionmaking. So we

did not intend to usurp that power.

Senator JOHNSON. Right. Well, thank you. Obviously, this is legislation that has passed the Senate on three occasions and it is my

hope that we can arrive at a number. It is my understanding that

the consultants to the tribe concede that there was some mathematical error in arriving at the figures in the original bill and that

they would be inclined to adjust that somewhat downward, but it

is my hope that we can bring a final closure to the disasters that

were visited upon these tribes, and as the Chairman noted, make
21

this an issue that will not need to be revisited and to bring it to

final closure.

So thank you again to the GAO.

Mr. MALCOLM. Thank you.

The CHAIRMAN. Senator Thune, do you have any questions?

Senator THUNE. No; thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much. Thanks for your help on

this issue. We appreciate it very much.

Our next panel is Michael Jandreau, who is the chairman of the

Lower Brule Sioux Tribe; Lester Thompson, who is the chairman

of the Crow Creek Sioux Tribe; and Michael Lawson of Morgan,

Angel and Associates, Washington, DC.

I believe that Senator Thune wanted to make an opening comment.

STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM

SOUTH DAKOTA

Senator THUNE. Mr. Chairman, I thank you for giving me the opportunity to participate in the hearing today, although I am not a

member of this committee. I do want to recognize, I know that

there are a large number of elders in the room who have come here

from South Dakota because they care passionately about this issue.

I want to welcome them and thank them for being here today.

Mr. Chairman and members of the committee, Senator Johnson,

my colleague from South Dakota, I am delighted to be able to introduce three of our distinguished tribal chairmen from South Dakota

and the great Sioux Nation. Chairman Mike Jandreau of Lower

Brule is the senior chairman in South Dakota and the Great Plains

region. He has been chairman for 27 years and has been on the

council for 34 years, which is an extraordinary accomplishment for

any elected official, particularly in Indian country.

I would also like to commend to the committee’s attention a recent article by Chairman Jandreau entitled ‘‘Flattening the Reservations,’’ which outlines a comprehensive economic program for

Indian country. Picking up on the book ‘‘The World is Flat’’ by

Thomas Friedman, it suggests how the reservations might fully

participate in our economy. We would do well to consider his

thoughts.

Chairman Lester Thompson from Crow Creek is our most junior

chairman, elected just a few months ago. Buffalo County, SD,

where the Crow Creek Indian Reservation is located, is now ranked

the poorest county in America. Obviously, Chairman Thompson

faces many difficult challenges, but I believe he is the right man

for the job. His uncle was chair at Crow Creek, as was his grandmother. In fact, his grandmother was the first woman to serve as

tribal chair.

Both chairmen appear today here in support of the Tribal Parity

Act. Mr. Chairman, as you know, this legislation passed the Senate

on three occasions in the 108th Congress, but died at the end of

the Congress in the House as there was not enough time to consider it.

Although he will be testifying as a member of the next panel on

the Cheyenne River Sioux Tribe Equitable Compensation Amendments bill that I cosponsored with Senator Johnson, I would also
22

like to take this opportunity to introduce Chairman Harold Frazier

of the Cheyenne River Sioux Tribe. Chairman Frazier is currently

serving his first term as tribal chairman of the Cheyenne River

Sioux Tribe. He was elected by popular vote in 2002, and since

2003 has also served as chairman of the Great Plains Tribal Chairmans Association, representing 16 tribes from South Dakota, North

Dakota, and Nebraska.

Mr. Chairman, I appreciate your holding this hearing so the committee might determine what is fair compensation for the Lower

Brule and Crow Creek Tribes. As the GAO pointed out in its report, this is a sensitive and complex issue. The Pick-Sloan project

resulted in thousands of acres being flooded, and the population

being relocated not once, but twice. It is important to resolve this

matter to allow these chairmen to successfully prepare their reservation for the future.

So Mr. Chairman, I thank you for this opportunity to welcome

the chairmen here to join us at the hearing today.

The CHAIRMAN. Thank you very much, Senator Thune, and

thank you for your active participation in this issue that I know

is very important to all the people of your State. I thank you for

your partnership with Senator Johnson as we try to move this legislation forward.

I welcome the witnesses, and we will begin with our youngest

witness, Michael Jandreau. [Laughter.]

STATEMENT OF MICHAEL JANDREAU, CHAIRMAN, LOWER

BRULE SIOUX TRIBE

Mr. JANDREAU. First, let me say thank you very much for allowing this opportunity to testify before you today.

While the irony of this hearing brings into my mind 50 some

years ago, my mother was a council member and was involved in

the negotiations regarding the issue of settlement for the takings.

At that time, the idea that was put forward was that the Government knew better than the tribes what their values were and what

they should be compensated for. That was not entirely true. Our

people knew what they were asking for and wholly and fully expected to receive it.

Mr. Chairman, beyond the numbers and the methodology, and

what methodology to use, and how to compound interest correctly,

there is a policy question and only Congress can decide. The GAO

says the tribes differ from the approach used in its prior reports

by not using the tribes’s final asking price. The clear implication

is that there is only one standard, only one correct method of evaluation. We do not believe that this is correct.

Congress has never taken the position that there is only one way

to determine what fair and reasonable compensation is for the Missouri River tribes. To the best of my knowledge, until this report,

the GAO has never said that in their opinion there is only one appropriate method to calculate compensation.

When our lands were flooded, we asked for in current dollars

$432 million. That is what I believe would be fair compensation.

We did not ask a high figure with the idea of negotiating a true

or fair low price. Our tribe thought $432 million was the correct

amount in today’s dollars.
23

The GAO looks to the final asking price as if that was our real

bottomline. That may be how a negotiation is conducted on Wall

Street, but this is not a negotiation. The land was flooded. Our people were already displaced. The final asking price was a very poor

indication of the real and fair value of the damage caused to my

tribe by the dams on the Missouri River.

If the Congress were to provide Lower Brule with an additional $129 million, supplementing our existing trust fund of $39.3 million, it is still far below $432 million, but it comes closer to fair

compensation.

I ask this committee on behalf of the United States to use its discretion and to make a policy decision that provides an additional

$121 million for Lower Brule and $69 million for the Crow Creek

Tribe. I ask that not because we want to be a burden on this country, but I ask that we may use the values to create a real, enduring

and long-lasting life for the members of our tribe and our reservation.

The question was asked earlier: Is this going to be our final time

to come before Congress and ask for, on this issue, additional dollars. It is my word to you that I will recommend to my tribal council and to the people of our tribe that this would be out last our

last time at this issue. However, being a real democracy, they have

a right to state their own opinions in this matter.

Thank you.

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

The CHAIRMAN. Well, sir, I think they have the right to express

their opinion, but if we keep revisiting this issue, you will not find

a great deal of sympathy from the chairman of this committee.

Mr. JANDREAU. Thank you very much for your directness.

The CHAIRMAN. Chairman Thompson.

STATEMENT OF LESTER THOMPSON, CHAIRMAN, CROW

CREEK SIOUX TRIBE

Mr. THOMPSON. Thank you, Mr. Chairman.

I would like to thank Mr. Thune and Mr. Johnson for their valiant efforts behind this act. I know they put a lot of time and committed to a lot of hours into pushing this forward to benefit our

tribes.

Mr. Chairman, members of the committee, the statements you

have heard from Chairman Jandreau are very true and I agree

with him on the subjects that he had touched on. There was no negotiation at the time that the people of both tribes were uprooted

and displaced. It came down to move or else. The detrimental impact that this event had on both tribes, socially and economically,

has rippled down through time and hit my generation with the

force of a tidal wave. You really can’t put a price on this.

Mr. Chairman, if there is one thing I agree with the GAO on is

that compensation issues can be sensitive, complex and controversial. The GAO also said Congress will decide whether additional

compensation should be provided. The Parity Act presents a policy

issue for Congress. The amount that has already been awarded to

the tribes is minimal, and very minute. These awards are only a

paper transaction. We only draw a small amount of interest off

these dollars. This is not enough to sustain a true economic base.
24

As stated by Mr. Johnson and Mr. Thune, Crow Creek Reservation resides in Buffalo County, which is the poorest in the country.

This, to me, is a national shame. My fellow council members and

I, as newly elected leaders, have taken major steps in dealing with

our financial situation. We are currently laying a new foundation

and focusing on safeguarding funding received by our tribe by establishing internal processes for accountability and have sought

outside advisers to assist in financial direction and investments.

The Parity Act would help greatly with my tribe and immensely.

I urge the committee to stay the course. The Parity Act has passed

the Senate three times and this committee twice. Please allow the

legislation to move forward. The compensation would be a building

block toward a better future for my tribe.

With this said, Mr. Chairman, I will lay a challenge down to you

and to all the other Senators that you serve with, to come to South

Dakota and to see and to visit the people of Crow Creek and Lower

Brule. For this way, you see how beneficial the Parity Act would

be toward our area.

Thank you.

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

The CHAIRMAN. Thank you very much.

Dr. Lawson.

STATEMENT OF MICHAEL L. LAWSON, MORGAN, ANGEL AND

ASSOCIATES

Mr. LAWSON. Mr. Chairman and members of the committee, I am

grateful to have the opportunity to provide testimony today. With

your permission, I would like to submit my written statement for

the hearing record.

The CHAIRMAN. Without objection.

Mr. LAWSON. Then I will summarize my findings.

My name is Michael Lawson and I am a historical consultant

with Morgan, Angel and Associates. In 2003, I authored a report

that provided the factual basis for the legislation that was reintroduced in the 109th Congress as S. 374. The General Accountability

Office [GAO] report issued on May 19 was highly critical of my

study. It concluded that my report did not follow the approach recommended by the GAO in two prior reports involving Missouri

River tribes. This is because it did not base the difference on the

tribes’s final asking price or last best offers.

I did not use the tribes’s final asking prices as the basis for the

difference for three reasons. The first reason was because the

GAO’s previous two reports did not clarify that its references to

tribal prices ‘‘at the time of the taking’’ was to be understood as

meaning the final asking price.

The second reason is because I do not believe that these so-called

‘‘last best offers’’ provide a fair standard on which to base additional compensation. It is my view that settlements based on final

asking prices award the tribes not for the fair market value of their

losses, but rather for the ability or inability of their tribal leaders

to negotiate.

My third reason was because my historical research indicated

that those final tribal offers were made under conditions of duress.

The chronology I have developed to supplement my statement illus-
25

trates the context of the tribes’s situation at the time their final offers were made.

The GAO report was also critical that I used only the high range

of their approach, and did not project the low range based on the

annual inflation rate, but Congress has established no precedent

for basing additional compensation to the Missouri River tribes at

that rate, and calculation at that rate has no value.

The GAO report stated that my calculations of the total amounts

requested in the current bill incorrectly adjusted for the additional

compensation received by the Crow Creek Sioux Tribe in 1996, and

by the Lower Brule Sioux Tribe in 1997. I acknowledge these miscalculations and I have adjusted the amounts accordingly.

As a result, the amount for the Lower Brule Sioux Tribe in section 3 of S. 374 should be $169,122,085 instead of $186,822,140.

The amount for the Crow Creek Sioux Tribe in section 4 of the bill

should be $96,722,084 rather than $105,917,853. These new

amounts reflect both my adjustments in the calculations and the

current 2006 value in the differences.

It is my view that the tribal asking prices that I used in my report more accurately reflect what the tribes considered to be the

fair market value of their losses. They also fall within the midrange of the tribes’s total request during the course of negotiations.

The amounts requested in this bill also fall within the mid-range

of possible alternative approaches as I have outlined in the second

table of my written statement.

While the GAO and I have differed over approaches and statistics, this bill is really about the policy of trying to establish tribal

parity. The additional compensation that Congress has provided to

seven of the Missouri River tribes between 1992 and 2002 appears

to be all over the map. Congress has applied four different approaches and the perception of the tribes is that these settlements

have not been equitable.

After listening to the remarks of the tribal chairmen here today,

there should be no doubt that the Crow Creek and Lower Brule

Sioux Tribes suffered irreparable damages and sacrificed much of

their way of life for the greater progress of this Nation. In 1982,

the late Sioux author and historian Vine Deloria, Jr., wrote:

Their reservations were so drastically impacted that they have never been able

to establish viable communities since their lands were lost.

In conclusion, it is my view that S. 374 offers an equitable and

reasonable approach to providing additional compensation to these

two tribes. Therefore, I urge the committee to support this bill as

amended by the adjusted calculations. In my considered opinion,

this legislation represents a fair and final compensation package.

It also provides a just conclusion to an extremely difficult chapter

in the history of the relationship between the United States and

the Crow Creek and Lower Brule Sioux Tribes.

This concludes my remarks. I would be happy to answer any

questions you may have.

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

The CHAIRMAN. Thank you very much.

Senator Johnson.

Senator JOHNSON. Thank you, Mr. Chairman.
26

I want to thank Chairman Jandreau and Chairman Thompson

for their excellent testimony here today. I want to thank you for

traveling to Washington to appear before this committee.

Let me ask the two chairmen, what do you think would be accomplished with the proceeds of the parity bill? And do you believe

that the parity bill does in fact represent final compensation, at

least as far as you are concerned as leaders of your tribes?

Mr. JANDREAU. First, Mr. Chairman, I also had a written statement for the record and I ask that it be made a part of the record.

The CHAIRMAN. Without objection.

Mr. JANDREAU. As far as the results of what would happen with

the trust fund and the dollars that we look to be extracted from

that, we have done a plan that was submitted to Congress and was

submitted to Interior. It was submitted to every Federal agency

with whom we are involved. Under that plan, we have identified

how we are truly trying to reconstruct the total infrastructure of

our tribe.

We have been successful in a large portion of that. We still have

a long, long way to go. The dollars that we are able to utilize, we

expend nearly $1 million a year to hire 270 people to work in our

community, providing them jobs that otherwise would not be able

to be had. We are in the process of completing a new detention facility that was funded nearly 40 percent by the tribe, and the other

60 percent with the Department of Justice. It was a detention facility, a courthouse, and a police station. Our police station had been

condemned for the last 20 some odd years. We finally are able to

get that completed.

We have completed a community facility. We have completed an

administration building that houses both the tribe and the Bureau

of Indian Affairs offices. We have utilized our dollars to assist

housing, to assist our wildlife program, to assist with the development of an opportunity to utilize some of the products grown on

our corporate farm, to reach a new level of employment on our reservation by manufacturing and packaging popcorn.

So the dollars that we do receive will be used further to assist

with our education, which we also assist with; with those opportunities necessary for elders and assisted living facilities. The list

goes on and on. I did not bring a copy of our plan with me today,

but I will submit that to the committee for your use.

The dollars that are necessary also allow us to delve deeper into

economic development in its truest sense, utilizing the resources of

the tribe to have sustainable and long-range employment and economic opportunities. Those are the types of things that we would

do.

Thank you.

Senator JOHNSON. Chairman Thompson, any observations?

Mr. THOMPSON. Yes; with the infrastructure money that has

been sent down and we have received in the past, we currently had

purchased a small school in our most outer districts. It houses

classes one through six, and for this community out there which

lies about 30 miles south of Pierre and another 30 miles from

Harrold, SD, this was viable for that community to help educate

our youth and it kept them closer to home.
27

Also, we established community centers in two of our districts,

which play a vital role. These community centers serve almost

every purpose there is from weddings to funerals and other community functions. Also, we have established a higher ed program to

assist with the education of our people. These have been successful

so far. With further funding, we have established long-range plans

for reestablishing our farm and also we have looked into forming

our own construction companies. There is a lot of thought that has

gone into how and what direction that we want to see our tribe to

go in.

Right now, due to the financial situation that Crow Creek is in,

it kind of stops this immediately. With this extra funding, we

would be able to come close to being in parity with the local town

of Chamberlain. Chamberlain unemployment rate is probably 5

percent, which is pretty close to the State’s average. Am I right,

Mr. Thune? Okay. Crow Creek is about 85 percent unemployment.

I think that is the highest in the State of South Dakota, if I am

right.

We would be looking forward to establishing new jobs to actually

start a true economic base for our communities. If you look at this

in that for years Government has always looked at the tribes as a

burden. With this Act going through, this would help both Lower

Brule and Crow Creek come into the modern world and be parallel

to the economic base of South Dakota and other States.

With that, thank you, and thank you for your time. I will close.

Senator JOHNSON. All right. For Mr. Lawson, the amount called

for in your testimony today is lower than the parity bill as introduced. I appreciate your explanation of that. Finally, the theory behind the GAO’s use of final asking price in determining the range

of compensation is that more negotiations lead to better information. However, I think it is apparent that this could also be substantially affected by the relative bargaining power of the parties.

Could you please discuss the historical context of the negotiations process and how it may have affected that asking price?

Mr. LAWSON. Yes, sir; I tried to use asking prices that I thought

reflected what the tribe considered its fair market values. Each one

of the tribes when confronted with their lands already being flooded by 1952 in some cases, formed tribal negotiating committees

who over an 18-month period made an estimate of what their valuation was for the damages that they would receive, and also an estimate of what the cost might be to rehabilitate the entire reservation, because a precedent had been established for extending those

kinds of moneys for rehabilitation when Cheyenne River received

its compensation for the Oahe Dam in 1954.

So I tried to use the figures that tracked back to those numbers

that were developed. Now, they were tweaked a little bit. After

Cheyenne River, for example, got its settlement, there is a factor

in there for the tribe’s expenses in having to go through the negotiations, and they were compensated $100,000 for that.

So those are the bases of the prices that I tried to use, is what

the tribes before they entered a varied amount of negotiations,

what they considered fair market values to be. Now, sometimes

those were negotiated, and there was a series of negotiations. I
28

mean, some of these values were developed in 1954 and negotiations continued until legislation was issued in 1958.

Some of those asking prices turned out to be the final asking

prices that the tribe had. Others were negotiated down and none

of them were negotiated any higher. But that was the process and

that is the basis of what I used for the amount of differences. I

didn’t consistently use the final asking prices.

Senator JOHNSON. Mr. Chairman, I yield back.

The CHAIRMAN. Senator Thune, do you have any questions?

Senator THUNE. Mr. Chairman, I would just, if I might, follow up

on the question Senator Johnson asked a little bit earlier. I appreciate where you are coming from in terms of concern about whether

or not this is the end, and whether or not there would be additional

requests in the future, and making sure that there is finality associated with this request in the level that it is at.

As you have both noted, these are very difficult economic circumstances on the reservations. Buffalo County is the poorest

county in the country. Many of our reservation counties share a

similar economic condition.

I guess my question is this, assume we do this now and the infrastructure that you have both addressed in terms of things that

you want to do to improve the quality of life and the opportunity

on the reservation, and I want to tie a little bit, Chairman

Jandreau, to flattening the reservations that you authored here.

In terms of creating a private sector economy, it seems to me at

least ultimately the only hope that we have long-term on the reservations is to create the kind of economic opportunity for young

people there to enable them to derive a living that isn’t dependent

upon or based upon Government assistance. The parity acts, if the

right investments are made and infrastructure, provides a basis of

a foundation for that.

I am just curious if you could elaborate a little bit, both of you,

on what steps you could take to help create a private sector economy. It seems to me at least part of the problem in attracting economic development to Indian Country is lack of legal certainty,

need for reform in the judiciary system so that businesses that

come there know with some predictability where they are going to

be dealing with disputes and conflicts and that sort of thing.

Can you just elaborate a little bit on that? Because I think it

gives us some direction in terms of if we do this now and to make

sure that we are not coming back again and asking Congress, that

the permanent, good paying, private sector jobs that we need to

bring to the reservations, what steps you all might be taking or

that could be taken.

Mr. JANDREAU. Thank you.

We have probably the lowest unemployment rate in Indian Country, and it is because we have taken our resources, both those resources we raised from land leases from our corporate farm, from

other activities. We have taken those incomes and tried to create

to the greatest extent possible employment opportunities there on

the reservation.

We just recently moved into the establishment of a popcorn packaging and popping plant. We are in the final stages of completing

the building to start that activity. That is as a result of utilizing
29

those assets and those products that are renewable on the reservation.

As far as private sector involvement, we are tied into a number

of different companies in regard to doing our own construction on

the reservation, utilizing, leveraging the dollars that we receive to

do these kinds of things.

The more that we are able to do that and to create an economy

there on the reservation, the more self-sufficient we are going to

become. We are dealing with a company out of Oklahoma on our

cattle operation. We are doing some things that have to do with the

type of beef that is produced, and so we have an arrangement with

an organization called DuckSmith Farms of Enid, OK. It is going

to be at least a 3- to 5-year arrangement and we are doing that

today.

With our popcorn process, we are dealing with a former singer,

well, I guess he is still a singer, Chubby Checker and some of his

ventures. It all seems to make the process work, to develop those

opportunities with individuals who have the capability to move

products, and that kind of activity.

We are not about just wanting the dollars to have the dollars.

The dollars, if they do not work for us, are not at all justified in

receiving. It is more than just for damages. It is about allowing us

to create lifestyle with the remnants of land that are left, and trying to, a part of the process is we have replanted probably 1.5 million trees on the reservation, trying to create reforestation projects

and trying to deal with the ecological problems that occur when

areas of the country are denuded of timber.

So our desire to receive this last shot at getting our trust fund

expanded is about the whole future of our tribe and what happens

as far as our own individual sustainability and capability to become

economically independent, economically self-sufficient. You know,

our people don’t like to always come back to the trough either. It

is wanting to get compensated for these losses with adequate justification that we can move forward with these dollars without always having to knock at the door.

I don’t know how to say it.

Senator THUNE. That is great.

Chairman Thompson, if you want to add just what steps can be

taken or are being taken that would help create permanent jobs on

the reservations.

Mr. THOMPSON. Well, both you and Mr. Johnson have been to

Fort Thompson. We have two major highways that cross right in

the middle. To me, this is the crossroads of South Dakota. The vision that I see, I don’t see despair there. I see opportunity. I see

a lot of it. There is private sectors in Fort Thompson. We have a

small grocery store, which is privately owned; a convenience store.

We have a lot of gentlemen who do independent contracting, carpentry businesses and so on.

As far as the plan goes, I really thought about that, and I

thought about how I would be able to benefit our people the most.

A lot of it is going to come down to reeducating them into proper

business practices, to make them where they are understandable of

how business is conducted on the outside of our reservations, and

apply that back to our communities and work on developing pro-
30

grams to help with them, to establish their businesses that will end

up being around and being major players into our communities

again.

Senator THUNE. Okay. Good.

Tim?

Senator JOHNSON. [Presiding.] Thank you, Senator Thune.

I want to thank the panel. Senator McCain has asked that I

chair this hearing for the remainder of the hearing, and so I will

be doing that.

I do appreciate both Chairmen Jandreau and Thompson indicating that the goal of the tribe is to create a much stronger, more

robust private sector economy on the reservations in some instances through tribally owned enterprises, but in other instances

through individual entrepreneurship of tribal members. I think

that has to be so important as we work in a public-private way to

find ways out of this what has been an unending cycle of poverty

on both of these reservations.

I applaud your leadership and your vision for the future. It is my

hope that we at the Federal side can live up to our treaty and trust

responsibilities, to work with you to create a greater climate of

hope and opportunity and fairness in Indian Country. So thank you

very much for your testimony today.

Dr. Lawson, thank you for your work as we struggle to find the

most logical and equitable level of trust fund funding here on this

legislation. So thank you very much.

We will have the next panel come forward. Again, welcome to

Chairman Harold Frazier of the Cheyenne River Sioux Tribe, and

to Sharon Vogel, who is the manager for Tribal Ventures project.

This portion of the hearing is given over to a discussion of S. 1535,

the Cheyenne River Sioux Tribe Equitable Compensation Amendments Act of 2005. That legislation would allow the tribe to use

money deposited in their settlement trust fund to compensate individual landowners and their heirs, and also to use receipts of the

Western Area Power Administration, or WAPA, to make the interest on the fund available to the tribe at the start of the next fiscal

year, rather than 2011, as is required under existing legislation.

Third, it would provide a methodology based on the Lehman Government bond index for calculating the total amount at which the

trust fund is to be capitalized.

I want to again thank you for your leadership for the many

things that you have already done providing leadership on the

Cheyenne River Tribe for your people in that area. We welcome

you here today.

We will begin first with Chairman Frazier.

STATEMENT OF HAROLD FRAZIER, CHAIRMAN, CHEYENNE

RIVER SIOUX TRIBE

Mr. FRAZIER. Thank you, Senator Johnson. I would like to begin

by thanking you and Senator Thune for cosponsoring our legislation and also Senators McCain and Dorgan for holding this hearing.

I also want to recognize and acknowledge Freddie LeBeau, who

is one of our elders and one of the original Oahe landowners whose

land was taken back in the 1950’s.
31

In 1948, the United States Army Corps of Engineers began construction of Oahe Dam and Reservoir project, a part of the PickSloan Program. The program caused massive relocation of our tribal members, including relocating our tribal headquarters. We lost

over 104,000 acres of land and many of these lands were tribal and

allotted lands within our reservation.

This dam also devastated the tribe’s economy and our way of life.

More than 181 tribal families, or about 30 percent of the tribal population, were forced to move. We lost our most valuable and fertile

lands, and our traditional hunting-gathering ceremonial grounds.

In 1954, Congress authorized payment of $10.6 million to the tribe

for compensation, less than half of the $23.5 million sought by the

tribe.

In later years, various reports confirmed that the tribe had not

been fairly compensated for its losses. In 2000, Congress enacted

the Cheyenne River Sioux Equitable Compensation Act as Title I

of Public Law 106–511. The act created the Cheyenne River Sioux

Tribe Tribal Recovery Trust Fund to further compensate the tribe.

Under current law, the fund will not be capitalized until October

1, 2011.

S. 1535 would make three amendments to Public Law 106–511.

The first amendment is to take care of our landowners who lost

land. It would allow the tribe to use the interest from the trust

fund to pay additional compensation to tribal members or their

heirs who lost over 46,000 acres due to the construction of the

Oahe Dam.

Those landowners have never been provided fair or adequate

compensation for their losses. Public Law 106–511 does not allow

the tribe to use any of the proceeds from the trust fund to provide

compensation to them. In order to respond to the needs and wishes

of our citizens and consistent with tribal sovereignty and the compensatory purpose of Public Law 106–511, the tribal council wishes

to devote some of the portion of the interest from the trust fund

to provide additional equitable compensation to the tribal member

landowners and their heirs.

This proposed amendment is revenue neutral for the Federal

Government. As such, compensation would be provided out of the

trust fund interest and would not require any additional appropriation for the landowners.

The second purpose of S. 1535 is to make earnings from the trust

fund available sooner. Public Law 106–511 as enacted essentially

gives the tribe an IOU from the United States payable on October

1, 2011 for losses it suffered in the 1950’s and that it continues to

suffer from today.

The bill would capitalize the trust fund sooner using receipts of

the Western Area Power Administration, instead of a one-time appropriation in 2011. This method was used to capitalize trust funds

in the other tribal equitable compensation acts enacted prior to

Public Law 106–511.

Receipt of the money sooner would allow the tribe to address significant unmet needs in the areas of economic development, infrastructure, education, health and social welfare programs. Capitalizing the fund sooner would also reduce the interest to be paid by

the United States to the tribe on the $290 million now due in 2011.
32

The third and final purpose of the bill is to make a technical

amendment to provide a methodology for calculating the total

amount of which the trust fund is to be capitalized. Under current

law, Treasury is to deposit into the trust fund some $290 million

plus the interest that would have been accrued had the fund been

fully invested in October 2001, but the law provides no methodology to calculate those earnings. However, S. 1535 provides a methodology using a Government bond index.

For the reasons I have stated, I respectfully ask on behalf of the

Cheyenne River Sioux Tribe that this committee approve of S. 1535

and send it to the Senate for consideration by that body as soon

as possible.

Thank you, and I would be glad to answer any questions you

may have.

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

Senator JOHNSON. Thank you, Chairman Frazier.

Ms. Vogel.

STATEMENT OF SHARON VOGEL, CHEYENNE RIVER SIOUX

TRIBE

Ms. VOGEL. Thank you.

Good morning, Senator Johnson and Senator Thune, I too would

like to thank you for the opportunity to provide supportive testimony for the tribe’s efforts to obtain immediate access to its funds

under Public Law 106–511, which I will refer to as JTAC funds,

to implement the tribe’s JTAC plan.

My name is Sharon Vogel. I am an enrolled member of the Cheyenne River Sioux Tribe and the administrative manager of the

Tribal Ventures Project. Tribal Ventures is a planning project between the Cheyenne River Sioux Tribe and the Northwest Area

Foundation out of St. Paul and Minneapolis, MN. The process was

to develop a 10-year plan to reduce poverty and increase prosperity

for the families residing on our reservation.

My submitted testimony has a description of the process that we

undertook on the reservation to look at poverty, collect the

thoughts of our people, and decide how we would proceed with reducing poverty. I would be happy to take questions on that aspect

of my testimony, but I will use my time this morning to focus on

the ways our tribe is ready to proceed with economic development.

We have just completed an 18-month strategic planning process

that resulted in a 10-year commitment to reduce poverty. The

Northwest Area Foundation has invested $9.5 million in our effort

to reduce poverty. That is a big investment from a major foundation.

As a result, we have a concrete plan to strategically move forward to reduce poverty conditions on our reservation. The only

thing holding us back from true economic development from investment and job creation is the lack of capital. I want to be clear: We

truly are ready to move economic development projects forward. We

have development plans for infrastructure and economic development that are ready to go. We need capital to start our economic

engines.

Let me go over an example of projects or programs we are ready

to undertake. We have identified two priorities. One is the infra-
33

structure development and the second is education. When we were

holding our planning sessions, we also undertook a project called

Young Voices. We interviewed over 600 young adults from 18 to

age 30 on our reservation. We found that while they wanted to live

on the reservation, there were no opportunities. Job prospects and

educational opportunities are much too limiting. As a result, we

would like to use our JTAC funds to train our young people, provide them with scholarships for education, as an incentive to stay

on our reservation and carry on the culture of our people.

Our population is overwhelmingly young. Almost one-half of

these are under 25 years of age. We must act as soon as possible

to ensure that we don’t lose a generation because of the lack of opportunity. We have identified that economic development requires

infrastructure. While the Federal Government has an obligation to

the tribe to provide roads, drinking water, water treatment, and

other infrastructure, the tribe has a role, too.

The JTAC funds would be used to leverage infrastructure improvements. For example, the tribe has initiated discussions with

Merrill Lynch to use JTAC funds to finance an advanced-funded

road construction effort similar to the advanced-funded road project

that Standing Rock Sioux Tribe did using some its JTAC funds.

The more infrastructure we have, the better our standing will be.

We will no longer start with a deficit when negotiating development for our tribe.

With a developed infrastructure, we will be able to use that as

a bargaining chip when pursuing investments. Of course, this is

just an example of several plans that we have ready to implement.

We also plan to create a cultural center, to enter the energy industry with wind turbines, to start a credit union, to expand our hotel,

and to develop tourism. Additionally, we want to create partnerships with private entrepreneurs who realize the opportunity Cheyenne River presents.

We can no longer wait to develop our economy, communities and

families in a piece-meal fashion. We must have multiple strategies

that are linked to establishing a stable economy, reducing poverty

and improving the quality of life for our reservation families. We

truly need access to the resources promised under JTAC.

In summary, I would like to stress that JTAC funds will result

in, one, increased assets of the tribal communities and our families.

It will develop economic opportunities for our families, provide educational opportunities for our tribal members. We will have development of comprehensive social and health programs and we will

increase the capacity of our tribal government to develop long-term

strategies that will result in sustainable economic, community and

social development.

I would also like to note that payments to individual landowners

such as Mr. LeBeau, our elder that is accompanying us, that the

tribe is seeking, will also do a lot to reduce poverty on the reservation. Obviously, the payments will directly counteract the loss of

assets aspect of the Oahe project. Combined with financial literacy,

education and other advising, it will eliminate long-term poverty

for many reservation families.

Tribal landowners and heirs who receive these payments will

have the capital to invest in both their families and their commu-
34

nities. Some may choose to become business owners that employ

other tribal members, and some may choose to use their funds for

their or their families’ education.

I would like to address one final issue. One question you may

have is why should we be able to access these funds now, rather

than five years from now. There are several good reasons for opening up the interest on our compensation fund. First and foremost,

it is just a clear issue of time. We have 29 original landowners, all

of whom are well into their eighties. Frankly, some of them may

not be around in 5 years to benefit from the funds. These lands

were taken in 1948, 56 years ago. They have been waiting long

enough.

Second, our tribe has urgent needs to address now. We can’t afford 5 more years of missed opportunity. We will have missed the

opportunity to put 500 people or more through our workforce development programs. We have people who need homes to live in today.

We have hundreds of young adults who want to attend college, but

don’t have the financial resources to do so. We have the need to

create a viable infrastructure today.

These are burning needs and will only be more costly to meet

further down the road. More importantly, over the next 5 years, we

will have 1,000 children born on the reservation, and 780 of these

babies will be born into poverty. Every year gone is a year of

missed chances, and we can’t afford it.

Senator Johnson, members of the committee, thank you for

scheduling this hearing to learn about how we plan to improve our

tribe with our much-needed JTAC funds. I will be happy to take

any questions you may have.

Thank you.

[Prepared statement of Ms. Vogel appears in appendix.]

Senator JOHNSON. Thank you for your testimony.

Senator Thune has another obligation, another committee hearing to attend to, and he has had to excuse himself. I do express my

appreciation to Senator Thune for his work on these issues.

It is my understanding, Chairman Frazier, that at the time that

the trust settlement was reached, the legislation was passed, all of

the interest income from the trust fund after 2011 would be directed to the benefit of the tribe.

The tribe now believes that it ought to have the discretion to redirect some of that revenue to compensate individual landowners,

given the fact that as I understand it, about 45 percent of the land

that was flooded did indeed belong to individual landowners, as opposed to being tribally owned. Is that a fair and correct observation?

Mr. FRAZIER. Yes; that is correct.

Senator JOHNSON. I appreciate, Chairman Frazier, that you have

been a tireless advocate for your tribe, and I appreciate your commitment to rectifying damages incurred by your people almost 50

years and which continue on today. What, if any, compensation

was provided to those individual landowners when the initial cash

settlement was reached in 1954?

Mr. FRAZIER. On behalf of the landowners, I know when I visit

with many of them, a lot of them were not happy with the amount

of money that they received. I think there are reports showing that
35

they received around $20 or $21 an acre, when right across the

river the non-Indian population received over $43 to $45 an acre.

Many of them just are not satisfied. I don’t blame them. I personally have experienced the loss of a home, some land, and that is

why I am here advocating on their behalf. I think that in my opinion, as well as theirs, that they were not fairly compensated at the

end of the 1950’s.

Senator JOHNSON. It is clear that this legislation is a major priority for you and for the tribe. I think one of the questions that

might occur on the part of some of my colleagues on the Committee

is that only 6 years ago when the tribe agreed to the Equitable

Compensation Act, and I appreciate that you can’t speak for others

who made decisions at previous times, but 6 years ago that legislation prohibited any per capita payments to members of the tribe.

So why do you think that decision was made by the tribe at that

time, versus the interest now that the tribe has in allowing at least

some of this revenue to be redirected toward private landowners?

Mr. FRAZIER. I can’t speak and I don’t know what the discussion

was back then. I do know that the way I understand the per capita

is that every member of the tribe would be getting paid. We look

at this as not a per capita payment because not every member is

going to get paid, just the ones who have lost land in this taking.

They would be the only ones that would be compensated for their

losses.

Senator JOHNSON. How many landowners remain to this day,

roughly?

Mr. FRAZIER. I believe there were originally 420; now there are

29.

Senator JOHNSON. And it would be the 29 plus the heirs of anybody who did own original land, is what the tribe envisions?

Mr. FRAZIER. Yes.

Senator JOHNSON. I appreciated your participation in the tribal

listening session that I held on economic development this past

April in South Dakota. I think we both share a strong vision for

the future of your tribe and all our South Dakota tribes. I wondered if you could discuss briefly the importance of this trust fund

to the tribe and the process the tribe will pursue to ensure that the

trust fund effectively serves the development of the tribe. How are

you going about that?

Mr. FRAZIER. One of the things, as Sharon, Ms. Vogel, she has

been out to the community several times, to every community on

our reservation, and gotten the comments of our members. Two of

the things that really stick out in my mind that are much needed

on our reservation is capital and infrastructure. I believe that if we

are ever going to get anywhere in dealing with economic development, that is what is needed. That is something that is always top.

I just want to make a quick point. Right now, we are in the process of refinancing our buffalo program to the amount of $8 million.

The bank is requiring our tribe, and it is pretty much collateralized

300 percent, and yet it is not enough. So I know that we have a

huge need for capital, so we don’t have to deal with banks and just

pretty much give up the whole farm for a loan. So that is something. We know what our needs are. We have to plan. If we get the

money, we can implement the plan.
36

Senator JOHNSON. Finally, Chairman Frazier, I understand this

legislation is supported by a resolution of the tribal council. Could

you please speak to the support of this legislation among the tribe

and if it is supported by the tribal elders?

Mr. FRAZIER. Several times last year as well as this year, I have

discussed this with our members throughout our reservation, and

every year I have been giving a tribal state of the tribe address.

Each time, these initiatives are brought up on what the tribal

council and the tribal government is doing. Each time, I have not

really heard any negative comments from the members of our tribe.

Senator JOHNSON. Ms. Vogel, thank you for your testimony. I am

struck by your observation that of the 1,000 children to be born on

the reservation in the coming years, that 785, roughly, will be born

into poverty.

Ms. VOGEL. Yes.

Senator JOHNSON. And with all the complications and the disadvantages that go with that. So the need to address these issues

is truly urgent.

I appreciate the point you made in your written testimony about

the potential payments counteracting the loss of assets aspect of

poverty. In terms of the causes of poverty, could you please speak

to the cultural and psychological effects related to the loss of individual lands?

Ms. VOGEL. Well, when our tribal council held the local hearing

for our tribal government officials to hear from original landowners

and other individuals that were interested or had recommendations

about this legislation, I recall the testimony of two of our elders

that talked about the loss that they had, and the loss they had on

their children and their grandchildren. They owned a piece of land.

They were self-sufficient on that piece of land. And when they lost

that, they couldn’t replicate that wealth that they had developed on

that land. They had a home. They had a garden. They had livestock. And they made improvement to that land that they owned,

that they had planned on handing down to their children.

When they lost that, they were then relocated and they could

not, that wealth was gone. And there wasn’t enough compensation

to rebuild that wealth.

So they ended up being in poverty, and their children and their

grandchildren lived in poverty because of that loss. That, I think,

is one cultural wrong. We are a proud people. We have a history

of self-sufficiency. The poverty conditions were harsh. It was hard

to get out when you live in a place of poverty, when there is no

opportunity. So that was the reality. That was the aftermath of the

loss.

Senator JOHNSON. Sharon, what sort of financial literacy programs are being implemented within the tribe and tribal membership to help landowners or their heirs invest and build the economy

of the Cheyenne River? Obviously, we want financial resources to

be available to people, but we want to be confident those resources

are being put to good use.

So what is your group doing to help ensure that that would be

the case?

Ms. VOGEL. There are several entities that provide financial literacy and consumer education on Cheyenne River. One is the Four
37

Bands Community Fund. In addition to providing the business

training for entrepreneurs, they also provide an IDA, individual development account, and that comes with a curriculum of education.

We with the Tribal Ventures Poverty Reduction Plan will partner

with the Four Bands Community Fund to where we, too, will offer

reservation-wide financial literacy training, using a curriculum

that was developed for Native American families that was funded

in part by Fannie Mae. We also propose that we will have a youth

IDA so that our young people can start saving for scholarships.

But in addition, there are other reasons why it is important for

us to have financial literacy on Cheyenne River. One is predatory

lending. We want to make sure that our people are protected from

predatory lending and that they are better consumers, they make

more informed decisions.

So the value of financial literacy is not just limited to just making sure that these individuals that when they receive the compensation that they spend that wisely. It is for all of our members

across the reservation.

Senator JOHNSON. Well, thank you, Ms. Vogel, and I thank both

of you for your testimony. It obviously was very important that we

make your testimony on the record here for all the members of the

committee. We have bipartisan staff here. I think we all feel that

we have gained from your testimony as well. It was important that

we go through this process in our effort to move this legislation

along.

So I want to thank you. I also want to thank others, including

elders and members of the tribes who have traveled long distances

and have gone out of their way to be here today. We want to welcome you as well.

So with that, we are going to wrap up this hearing, but we will

redouble our effort to work in a bipartisan fashion with Senator

Thune, with Chairman McCain, Vice Chairman Dorgan, to see

what we can do to take into consideration your testimony here

today and to use that as support for this legislation.

So thank you very much. And with that, this hearing is adjourned.

[Whereupon, at 11:12 a.m., the committee was adjourned.]

(39)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF MICHAEL B. JANDREAU, CHAIRMAN, LOWER BRULE SIOUX

TRIBE

Mr. Chainnan, members of the committee, thank you very much for the opportunity to testify on the Tribal Parity Act, S. 374. I am Michael Jandreau, the chairman of the Lower Brule Sioux Tribe. I have been chairman of the tribe for 27 years,

and served on the council for 7 years before being elected chairman.

The legislation before you this morning is of great importance to our tribe and

our people. I would like to thank Senator Thune introducing the legislation, and

Senator Johnson for cosponsoring. I am joined today by members of our Council,

other tribal members, and our counsel, Marshall Matz with the law firm of Olsson,

Frank and Weeda.

The Lower Brule Sioux Tribe is a constituent band of the Great Sioux Nation and

a signatory of the Fort Laramie Treaty of 1851 and the Fort Sully Treaty of 1865.

The reservation is approximately 230,000 acres in central South Dakota. The Missouri River establishes the eastern boundary of the reservation. Historically, the

Missouri’s bottomlands provided food, wood for shelter and fuel, forage for cattle and

wildlife, and plants utilized for medical purposes.

In 1944, Congress enacted the Flood Control Act, which authorized implementation of the Missouri River Basin Pick-Sloan Plan for water development in the Missouri River Basin. Two of its main-stem dams, Fort Randall and Big Ben, flooded

over 22,000 acres—approximately 10 percent of the entire reservation and our best

bottomland. In addition, it required the resettlement of nearly 70 percent of the

resident population. For the Lower Brule Sioux Tribe, the human and economic

costs have far outweighed any benefits from the Pick-Sloan project.

The Congress responded in 1997 with the Lower Brule Sioux Tribe Infrastructure

Development Trust Fund Act, Public Law 105–132. This legislation has been of

enormous benefit to our people. It established a Trust Fund of $39,300,000 for the

benefit of the tribe. With this Fund, and using leverage, we invested over $27 million in our entire infrastructure. We have built:

• A new community center,

• A tribal administration building,

• A detention center with a courthouse and police department, and a

• Wildlife building.

We have also used the fund to improve tribal housing and employ 250–270 individuals [both youth and adults] in the summer months. In short, the trust fund is

allowing us to improve our economy and the quality of life on the reservation in

many ways.

The legislation before you today, S. 374, is intended to supplement our existing

trust fund. It passed the Senate three times in the 108th Congress, once as an independent bill and twice as an amendment to other bills. All three died in the House.

The Parity Act was again reported by this committee on June 30, 2005, but has yet

to come before the entire Senate for consideration.
40

Mr. Chairman, in all honesty, I am completely baffled by the recent GAO report

entitled ‘‘Analysis of the Crow Creek Sioux and Lower Brule Sioux Tribes’ Additional Compensation Claims’’. It is the most frustrating Government document I

have read in all of my years as chairman.

Essentially, the GAO makes two criticisms of the Tribal Parity Act and the approach used by our consultant, Dr. Mike Lawson. First, the GAO criticizes us [and

it is, in fact, the tribes that the GAO is criticizing] for not using ‘‘the final asking

price’’. Second, the GAO is indignant that Dr. Lawson suggests one level of compensation, and not a range. I would like to make several points in response:

No. 1. The Congress never established the final asking price as the standard that

must be used for determining what is fair compensation under the Flood Control

Act. In a business transaction when two parties are negotiating with equal standing,

I can understand how the last asking price would indicate the true feelings of the

parties. That is clearly not the case here. There was no ‘‘negotiation’’. Our land had

been flooded and we were trying to do the best we could. The Congress should look

at all of the facts when trying to evaluate the appropriate level of compensation and

not be blinded by the last offer.

No. 2. GAO criticizes Dr. Lawson for not providing a range of reasonable compensation levels based upon different policy assumptions, but then the GAO does

the same thing and fails to give you, the Congress, a range of possibilities.

No. 3. Beyond the numbers, there is a tone to the GAO report that is deeply disturbing. Dr. Mike Lawson is a nationally recognized expert on the Flood Control Act

and the tribes affected by that legislation. Yet, the GAO does not even mention his

name anywhere in the document. Dr. Lawson is a consultant to two sovereign Indian tribes. The GAO has every right to disagree with him, or with me, or with anyone else. But I would hope they also recognize that a mechanical application of a

standard formula may not apply in all cases. The tribes are not one size fits all.

Our best land was taken to benefit America. Our tribe is not seeking charity; we

are seeking justice and parity with other Missouri River tribes that have been adversely affected by the Flood Control Act. There has been no one, clear policy decision by the Congress on how to determine what is just and fair compensation for

Missouri River tribes. The Tribal Parity Act is not based upon the ‘‘highest asking

price’’. And we are not seeking parity with the Santee Sioux, who has received the

highest amount on a per acre basis. We are seeking what Dr. Lawson, the recognized national expert, believes to be fair and owing from the United States to the

people of Lower Brule. The Congress has the power and the obligation to make a

fair policy decision. You are not bound by any one formula or test, as, I believe, the

GAO would have you believe.

This legislation would, if enacted, add to our trust fund and allow us to aggressively attack the many human challenges we face on the reservation. Further, we

could more adequately build our infrastructure to the point that it would be possible

to attract a private sector economy.

As you know, sovereignly is key to tribal existence. But, in the long run, for sovereignty to survive, there must be some type of economic sovereignty as well. We

must develop private sector economy and jobs for our people. The legislation before

you will allow us to do all of that. We will be able to improve education, health care,

housing, transportation, the justice system, and so many other services.

As much as we need this legislation, let me stress that we are not asking for a

handout. This legislation is intended to provide more complete compensation for the

loss of our best land and other costs suffered by the tribe. The Army Corps of Engineers has estimated that the Pick-Sloan project’s overall contribution to the U.S.

economy averages $1.27 billion per year. The Tribal Parity Act must be seen in that

context.

The Lower Brule Sioux Tribe is making great progress. Our unemployment rate

is the lowest of any reservation in South Dakota, but it is still much above the national average. My goal as chairman is to see Lower Brule fully participate in the

U.S. economy while maintaining our heritage and identity. It is very painful for me

to read The World Is Flat by Thomas Friedman and realize that globalization is

passing over Lower Brule and the Indian reservations of the United States. China

and India, for example, are revolutionizing their economy while Indian reservations

are essentially ignored.

The reservations are a part of the United States, but we are not a part of the

U.S. economy. Mr. Chairman, I am not here today to outline a comprehensive agenda for Lower Brule or for tribes, generally. I am here to say that the Tribal Parity

Act is the essential next step to improving the quality of life at Lower Brule and

it is completely justified. We urge you to finally file the committee report and bring

it to the floor of the Senate as soon as possible. It has been exactly 2 years since
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I first testified on the Parity Act. Our tribe needs and deserves the benefits of the

Tribal Parity Act, as adjusted to reflect a more accurate mathematical computation.

We urge the committee to amend S. 374 to provide $129,822,085 of additional

compensation to Lower Brule and $69,222,085 of additional compensation for Crow

Creek. These figures are far lower that our highest asking price and are lower than

the amount provided to the Santee. It is, in short, fair and just compensation for

the complete disruption to our reservation life and the taking of our best bottom

lands. Thank you. I would be pleased to answer any questions.
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PREPARED STATEMENT OF FREDDY LEBEAU, VICE CHAIRMAN OAHE LANDOWNERS

ASSOCIATION

My name is Freddy LeBeau. I am an enrolled member of the Cheyenne River

Sioux Tribe, and a resident of the Cheyenne River Sioux Reservation. I am one of

the tribal members who lost land due to the construction of the Oahe Dam and the

acquisition of over 44,000 acres of tribal members’ lands by the United States for

the Dam. I am also the vice chairman of the Oahe Landowners Association, a group

comprised of the tribal member landowners who lost lands on our reservation due

to the Oahe Dam Project. So I am providing this statement not only for myself, but

also for all of the surviving tribal member landowners who lost their lands due to

the Dam, and for their heirs. Today there are only 29 surviving tribal members who

lost their lands because of the dam.

We have waited for almost 60 years to tell our story. When the corps took our

lands in 1948, we had no choice. The lands weren’t acquired through agreed upon

sales. No one asked if we wanted to sell our lands, and we would not have agreed

to any sale. The lands were simply taken from us to benefit other people. We didn’t

experience sever flooding on the reservation, and the project was of no use to us.

But the powers that be decided they needed a flood control project, and so they authorized a project that required the acquisition of Indian lands and the relocation

of Indian people.

I fought for this country in World War II. I spent about 4 years in the U.S. Navy

in the South Pacific. During the war, I learned that some fee lands on the reservation totaling 200 acres had been foreclosed on and could be bought. So I sent money

to my father and he bought the land for me. After the war, I built the land up,

raised livestock on it and supported my family off of it. I wanted to live there the

rest of my life. But the Oahe Dam put a stop to that. The Government offered me

$6,000 for the land. It wasn’t enough, but I would have had to go to court to get

fair compensation, so I accepted the check and signed it under protest. I fought for

the U.S. Constitution and the American way of life, but then the Federal Government turned around and took my land and didn’t provide fair compensation.

We landowners know that we were not fairly compensated. We were paid less for

our lands than the Government paid for comparable lands off of the reservation. But

for the most part we took whatever the Government offered us, because we didn’t

want to hire lawyers and go to court and take our chances with a judge.

In total, the U.S. Government acquired over 44,000 acres of reservation lands

from tribal members. Many of us, like myself, had to move our families elsewhere

and start again. Many of us never got over losing our lands. And many of us found

that our new lands weren’t as good as the lands we were forced to leave to provide

flood control for other people.

The tribe lost lands too, and it was not fairly compensated either. Congress recognized this when it enacted Public Law 106–511, the Cheyenne River Sioux Equitable Compensation Act, in 2000. I have a problem with that law, however. It says

the Federal Government acquired some 104,000 acres of land of the tribe for the

Oahe Project. But that number includes the 44,000 acres taken from tribal members. Only about 60,000 acres were tribal lands.

Public Law 106–511 provides over $290 million to the tribe, plus interest, to compensate it for its losses, but it doesn’t provide any compensation to the tribal member landowners for our losses. In fact, it says the tribe can only spend the earnings

from the Trust Fund for certain things, and it doesn’t allow the tribe to spend one

dime to provide any additional compensation to tribal member landowners.

The landowners don’t think this is fair, and our tribal government agrees with

us. So they have joined with us to ask Congress to change the law so that they can

provide us just compensation. We are not asking for a windfall or a handout—but

only for just compensation. We urge Congress to allow the tribe to use its earnings

from its Trust Fund to provide us the compensation we deserve.

One final thing. Right now, the tribe won’t receive any of the Trust Funds until

October 2011. The surviving landowners have waited almost 60 years for just compensation, and we don’t want to wait until 2011. Some of us won’t make it to then.

We’d like to get our compensation now.

Thank you for your consideration of this bill.
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PREPARED STATEMENT OF LESTER THOMPSON, CHAIRMAN, CROW CREEK SIOUX TRIBE

Mr. Chairman, members of the committee, thank you very much for the opportunity to testify on the Tribal Parity Act, S. 374. I am Lester Thompson, the chairman of the Crow Creek Sioux Tribe. It is an honor for me to be here with Chairman

Mike Jandreau. Chairman Jandreau is the most senior chairman in our State and

in the Great Sioux Nation. I am the most junior chairman in the Sioux Nation, having been elected chairman in April. I took office, along with a new tribal council,

in May 2006.

I also would like to thank Senator Thune for introducing the Tribal Parity Act

and Senator Johnson for cosponsoring. This legislation before you is of extraordinary

importance to our tribe. I am delighted that it is the subject of my first appearance

before Congress.

The members of the Crow Creek Sioux Tribe were relocated after Little Crow’s

War in Minnesota. People were transported on barges from Minnesota stopping at

Santee and then we moved on to Crow Creek. Many lives were lost along the way.

We are members of the Isanti and lhanktowan divisions of the Great Sioux Nation.

We speak Dakota and Nakota dialects. We have three districts on the reservation,

and are a treaty tribe.

The Crow Creek Sioux Tribe consists of 225,000 acres located in Central South

Dakota. Our Western boundary is the Missouri River. In 1944, when the Congress

enacted the Flood Control Act and authorized implementation of the Missouri River

Basin Pick Sloan Plan for water control, two of the dams, Fort Randall and Big

Bend, flooded over 16,000 acres of our best and most productive bottom land. It was

also the very land where a majority of our people lived. The cost to Crow Creek in

human terms, and economically, was astronomical.

We lost:

• Our hospital;

• Housing units;

• Tribal Buildings and other structures;

• Schools;

• Businesses;

• Roads;

• Acres of waterbed and timberland, and domestic and ranch water systems;

• Food sources, such as fishing, hunting, and subsistence farming; and

• Ceremonial grounds and traditional medicines.

Our way of life was altered irreparably. Before the dams, the lifestyle was simple.

The people worked in a community garden. In the evenings, the people would gather

to share that day’s catch of fish and the food gathered. They would meet to visit,

pray, sing, and dance where the Bureau officials could not observe. The children attended boarding school within walking distance of their homes and family. The way

of life, the social interactions, the camaraderie and sense of being one people—one

tribe, was destroyed by the environmental changes and forced relocation. The hospital and school were never replaced. The traditional medicine that grew solely in

the waterbed and the Ceremonial Grounds are irreplaceable.

When the relocation took place, some purchased homes with the $500 compensation received. Others received homes in low rent housing—a project constructed of

50 units in an area smaller than a city block.

The elders observed that this is when the change occurred. People started to

watch each other, argue with each other, begrudge each other, and become disgruntled. With the loss our school, the next option was the Immaculate Conception

Boarding School, 13 miles away. The students were no longer able to walk to their

homes and families on a daily basis, and those teaching were not people who believed in the heritage, culture, and customs of the students. Abuses that occurred

in Catholic Boarding Schools are well documented historically, and I will not expand, except to say that the loss of our school negatively impacted our people on

a much larger scale. This impact on the social development of our people has rippled

down through generations.

Our reservation is in Buffalo County, SD. Buffalo County is the POOREST

COUNTY IN AMERICA, and also has the highest cancer rate in the Nation. Many

Elders believe that the building of the dam and disturbing the earth and the water

flow released death in the air.

Chairman Jandreau has spoken eloquently regarding the desire to join the global

market and seeking economic parity with the rest of America. I strongly agree and

support those goals. But at Crow Creek, we must first achieve parity with Chamberlain, SD, just 25 miles away. A small town of just 3,000 people, Chamberlain’s un-
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employment rate is approximately the State average—5 percent, while the rate at

Crow Creek is over 80 percent.

For us to move forward, we must improve our infrastructure and create an environment that is conducive to human and economic progress. The Crow Creek Sioux

Tribe Infrastructure Development Trust Fund Act enacted in 1996 [Public Law 104–

223] awarded $27.5 million to the Crow Creek Sioux Tribe. Of the $27.5 million,

the tribe is allowed to utilize the interest. The Tribal Parity Act would greatly enhance the trust fund, thus increasing our available moneys and allowing us to leverage with the private sector. The first year of the trust fund, we received slightly

over 1 million dollars. Due to fluctuating interest rates, the yield has now dwindled

to slightly over $700,000, and is not a set or guaranteed yearly amount. We have

utilized the interest to do a number of things to improve the situation of our people,

including the following:

• Purchase a small school with a gymnasium in the Big Bend District—the furthest outlying district. We are able to provide Kindergarten through 6th grade

education to students in that area, preventing the necessity of an hour-long bus

ride each way to and from school; • Construct a Community Building in the Crow Creek District, providing a place

to gather for socializing, celebrations, and funerals; • Construct a Community Building in the Fort Thompson District, utilized for

community events, program presentations, wakes, weddings, dance, meetings,

and as a polling place;

• Set a higher education program to assist students in college;

• Purchase land to increase the land base; and

• Improve damaged roads and upgrade our water plant.

These initiatives just begin to scratch the surface. The legislation we are discussing today, S. 374, is intended to supplement our existing trust fund. As you know,

it passed the Senate three times in the 108th Congress, both as a stand-alone bill

and as an amendment. All three times the measure died in the House. The Tribal

Parity Act was again reported by this committee on June 29, 2006, but has yet to

come before the Senate for consideration.

The Army Corps of Engineers has estimated that the Pick-Sloan Project’s overall

contribution to the U.S. economy averages $1.27 billion annually. According to the

Western Area Power Administration, the agency that administers the Pick-Sloan

Project, receipts from the project in 2006 are likely to total $119 million and the

same every year after. The $69 million dollar increase to the trust fund requested

in S. 374 [as amended] would bring the trust fund balance to $96 million—less than

1 year’s receipts the Government receives from the Pick-Sloan Project.

The expanded trust fund would enable the Crow Creek Sioux Tribe to make not

just significant, but magnificent strides in growth and development. Economic development and environmental improvements would change the lives of our people, our

children, and all future generations of Crow Creek Sioux. It would assist in putting

reservations on parallel ground, enabling us to compete economically, with Chamberlain and the rest of the United States, as opposed to remaining in our current

state, operating below the standards of most Third World Countries.

The recent GAO report entitled ‘‘Analysis of the Crow Creek Sioux and Lower

Brule Sioux Tribes’ Additional Compensation Claims’’ criticizes the tribes for not

using ‘‘a final asking price.’’ Mr. Chairman, there is not a tribe or tribal member

that could possibly place a monetary value on the loss and detrimental impact the

Pick-Sloan Project has had on our people. ‘‘Official’’ documents use terms such as

‘‘Lake Sharpe’’ or ‘‘Lake Francis Case’’ to identify the land overtaken by the PickSloan Project. In the every-day language of the tribal people, the land is called

‘‘taken area’’ or ‘‘taken land.’’ Because it was taken. The land taken was the richest

portion of our reservation. There were no offers or deals made to sell the land, and

no assessment done to determine the value of the land. Even if there had been an

assessment, the medicinal plants grown on the land and the Ceremonial Grounds

hold a higher, non-monetary value. The devastation this has wrought still remains

today for all to see.

The Crow Creek Sioux Tribe is consulting with experts such as Dr. Mike Lawson

to estimate a monetary value, but his name or expertise is not mentioned in the

GAO report. The compensation listed for Crow Creek Sioux Tribe in the Tribal Parity Act is not based on the highest asking price, or based on the price for the Santee

Sioux, the Lower Brule Sioux, or any other tribe. Each tribe is unique, but what

binds us together is our sovereignty. We are asking for the ability to maintain our

sovereignty.

A Christian group visited the Crow Creek Sioux Tribe, stating that they had read

about the poverty on the reservations and the fact that Crow Creek is in the poorest
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county in the America. After visiting, the group called the situation a National

Shame. As chairman of the Crow Creek Sioux Tribe, I want to see the deplorable

statistics change. I do not want our situation to remain a national shame. We are

not asking for charity, for a handout, or even for your pity. We are not even asking

for a helping hand. We are simply asking for fair and just compensation.

For the men, women, and children of the Crow Creek and Lower Brule Sioux

Tribes, there is nothing more important right now than moving forward with the

Tribal Parity Act. The new Tribal Council, including myself as chairman, understands the challenges that lie ahead. Our reason for running for office and our daily

motivation is to improve the situation and make a positive difference for the people

of the Crow Creek Sioux Tribe. The Tribal Parity Act is an essential step in our

efforts to reverse the downward trend and move forward. We urge the committee

to file the report and bring S. 374 to the Senate floor for consideration as soon as

possible.

Thank you for the opportunity to testify before your committee, and I will be

happy to answer any questions you might have.
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