United States Government Accountability Office

GAO Testimony 

Before the Committee on Indian Affairs, 

U.S. Senate

INDIANS’ ADDITIONAL 

COMPENSATION CLAIMS 

Calculations for the Crow 

Creek Sioux and Lower 

Brule Sioux Tribes Differ 

from Approach Used in 

Prior GAO Reports 

Statement of Robin M. Nazzaro, Director 

Natural Resources and Environment 

For Release on Delivery

Expected at 9:30 a.m. EDT

Wednesday, June 14, 2006 

 

GAO-06-849T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 14, 2006

INDIANS’ ADDITIONAL COMPENSATION 

CLAIMS 

Calculations for the Crow Creek Sioux 

and Lower Brule Sioux Tribes Differ from 

Approach Used in Prior GAO Reports 

Highlights of GAO-06-849T, a testimony 

before the Committee on Indian Affairs, 

U.S. Senate 

From 1946 to 1966, the government

constructed the Fort Randall and 

Big Bend Dams as flood control 

projects on the Missouri River in 

South Dakota. The reservoirs 

created behind the dams flooded 

about 38,000 acres of the Crow 

Creek and Lower Brule Indian 

reservations. The tribes received

compensation when the dams were

built and additional compensation 

in the 1990s. The tribes are seeking

a third round of compensation on

the basis of a consultant’s analysis. 

The Congress provided additional 

compensation to other tribes after

two prior GAO reports in 1991 and 

1998 (GAO/RCED-91-77 and 

GAO/RCED-98-77). For those 

reports, GAO proposed that one 

recommended approach to

providing additional compensation 

would be to calculate the 

difference between the tribe’s final 

asking price and the amount that

was appropriated by the Congress

and then adjust that difference

using the inflation rate and an

interest rate to reflect a range of

current values. 

This testimony is based on GAO’s 

report, Indian Issues: Analysis of 

the Crow Creek Sioux and Lower 

Brule Sioux Tribes’ Additional 

Compensation Claims (GAO-06-

517, May 19, 2006). Specifically, 

this testimony notes that the tribes’ 

consultant did not follow the 

approach in GAO’s 1991 and 1998

reports. The additional 

compensation amounts calculated

by the tribes’ consultant are 

contained in H.R. 109 and S. 374. 

The approach the tribes’ consultant used differed from the approach used in 

prior GAO reports by (1) not using the tribes’ final asking prices as the 

starting point of the analysis and (2) not providing a range of additional 

compensation. First, in calculating additional compensation amounts, GAO 

used the tribes’ final asking prices, recognizing that their final settlement 

position should be the most complete and realistic. In contrast, the 

consultant used selected figures from a variety of tribal settlement 

proposals. For example, for the rehabilitation component of the tribes’ 

settlement proposals, the consultant used $13.1 million from proposals in 

1957, rather than $6.7 million from the tribes’ final rehabilitation proposals in 

1961. Second, the tribes’ consultant calculated only the highest additional 

compensation dollar value rather than providing the Congress with a range 

based on different adjustment factors, as in the earlier GAO reports. 

Based on calculations using the tribes’ final asking prices, GAO’s estimated 

range of additional compensation is generally comparable with what the 

tribes were authorized in the 1990s (see figure below). GAO determined that 

the tribes’ final asking prices were a reasonable starting point for the 

calculations, as was the case for the tribes GAO reviewed in two prior 

reports. By contrast, the consultant estimated about $106 million and $186 

million for additional compensations for the Crow Creek Sioux and Lower 

Brule Sioux tribes, respectively (in 2003 dollars). Rather than bringing the 

Crow Creek Sioux and Lower Brule Sioux tribes into parity with the 

additional compensation provided to other tribes, GAO believes that the two 

bills under consideration in the 109th Congress—H.R. 109 and S. 374—would 

have the opposite effect. The bills would catapult the Crow Creek Sioux and 

Lower Brule Sioux tribes ahead of the other tribes and set a precedent for 

the other tribes to seek a third round of compensation. While our analysis 

does not support the additional compensation amounts contained in H.R. 

109 and S. 374, the Congress will ultimately decide whether or not additional 

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

GAO’s Estimated Range of Additional Compensation Versus the Additional Compensation 

the Tribes Were Authorized in the 1990s 

6.5 21.4 

27.5 

12.2 40.9 

39.3 

Dollars in millions

Additional compensation that the Congress authorized for the tribes in 1996 and 1997 

0 10 30 20 40 50

Crow Creek Sioux (GAO range in 1996 dollars) 

Lower Brule Sioux 

(GAO range in 1997 dollars) 

Source: GAO. 

Tribe

www.gao.gov/cgi-bin/getrpt?GAO-06-849T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Robin M. 

Nazzaro at (202) 512-3841 or 

nazzaror@gao.gov. 
Mr. Chairman and Members of the Committee: 

Thank you for the opportunity to discuss our work on the additional 

compensation claims for the Crow Creek Sioux and Lower Brule Sioux 

tribes. As you know, during a 20-year period, 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 the construction of the two dams, the tribes 

entered into negotiations with the federal government for compensation 

for their land that would be flooded by the reservoirs that the dams 

created. In both cases, the tribes and the federal government were unable

to reach a negotiated settlement, and the legislative settlements imposed 

by the Congress were for less than the amounts that the tribes’ had 

requested. 

In 1958, the Congress authorized the payment of $2.6 million to the two 

tribes for damages and administrative expenses related to the Fort Randall

Dam.1

 Similarly, in 1962, the Congress authorized the payment of about 

$7.7 million to the two tribes for damages, rehabilitation (funds for 

improving the tribes’ standard of living), and administrative expenses 

related to the Big Bend Dam.2

 However, the tribes did not consider the 

compensation they received in 1958 and 1962 to be sufficient, and they

sought additional compensation to address the effects of both dams. As a 

result, in 1996 and 1997, the Congress authorized the Crow Creek Sioux 

and the Lower Brule Sioux tribes additional compensation of $27.5 million 

and $39.3 million, respectively, through the establishment of development 

trust funds for each tribe.3

In addition to the Crow Creek Sioux and Lower Brule Sioux tribes, Indian 

tribes at five other reservations also (1) lost land to flood control projects 

on the Missouri River, (2) received compensation for damages in the mid1900s, and (3) requested and received additional compensation in the 

 1

Crow Creek, Pub. L. No. 85-916, 72 Stat. 1766 (1958); and Lower Brule, Pub. L. No. 85-923, 

72 Stat. 1773 (1958). 

2

Crow Creek, Pub. L. No. 87-735, 76 Stat. 704 (1962); and Lower Brule, Pub. L. No. 87-734, 

76 Stat. 698 (1962). 

3

Crow Creek, Pub. L. No. 104-223, 110 Stat. 3026 (1996); and Lower Brule, Pub. L. No. 105-

132, 111 Stat. 2563 (1997). 

Page 1 GAO-06-849T Indians' Additional Compensation Claims 
1990s or early 2000s.4

 Before the Congress authorized additional 

compensation to Indian tribes at three—Fort Berthold, Standing Rock, and 

Cheyenne River—of these five other reservations, we were asked to 

review their additional compensation claims. In 1991, we reported on the

additional compensation claims for the Three Affiliated Tribes of the Fort

Berthold Reservation and the Standing Rock Sioux tribe, and, in 1998, we 

reported on the additional compensation claims for the Cheyenne River 

Sioux tribe.5

 For the tribes at these three reservations, we found the 

economic analyses used to justify their additional compensation claims to 

be unreliable, and we suggested that the Congress not rely on them as a 

basis for providing the tribes with 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 tribe’s final 

settlement proposal (referred to in this report as the tribe’s “final asking 

price”) and the amount of compensation the Congress originally 

authorized the tribes. 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. 

Using this approach, we calculated how much additional compensation it 

would take today to make up for the difference between the tribes’ final 

asking prices and the original compensation provided. 

In 2003, the Crow Creek Sioux and Lower Brule Sioux tribes hired a 

consultant to determine if they were due even further additional 

compensation based on the method we proposed in our two prior reports. 

As a result of the consultant’s analysis, the two tribes are currently seeking 

a third round of compensation totaling an additional $226 million (in 2003 

 4

Fort Berthold and Standing Rock, Pub. L. No. 102-575, title XXXV, 106 Stat. 4600, 4731 

(1992); Cheyenne River, Pub. L. No. 106-511, title I, 114 Stat. 2365 (2000); and Yankton and 

Santee, Pub. L. No. 107-331, title II, 116 Stat. 2834, 2838 (2002). 

5

GAO, Indian Issues: Compensation Claims Analyses Overstate Economic Losses, 

GAO/RCED-91-77 (Washington, D.C.: May 21, 1991); and Indian Issues: Cheyenne River 

Sioux Tribe’s Additional Compensation Claim for the Oahe Dam, GAO/RCED-98-39 

(Washington, D.C.: Jan. 28, 1998). 

Page 2 GAO-06-849T Indians' Additional Compensation Claims 
dollars).6

 The tribes assert that their new calculations for additional 

compensation will bring them into parity with the additional compensation 

provided to the other tribes on the Missouri River. The additional 

compensation amounts the consultant recommended are included in two 

bills pending in the 109th Congress, H.R. 109 and S. 374, referred to as the 

Tribal Parity Act. Our testimony today is based on our May 2006 report in

which we assessed whether the tribes’ consultant followed the approach

in our prior reports in calculating the additional compensation amounts 

for the Crow Creek Sioux and Lower Brule Sioux tribes.7

To assess the consultant’s methods and analysis for determining additional 

compensation for the Crow Creek Sioux and Lower Brule Sioux tribes, we 

used standard economic principles and the analysis we conducted in our 

two prior reports on additional compensation. In order to ensure that we 

obtained and reviewed all relevant data, we conducted a literature search

for congressional, agency, and tribal documents at the National Archives

and the Department of the Interior’s library. We used original documents 

to learn about the negotiation process and to identify the appraised land 

prices and various proposed settlement amounts. As a result, we 

determined that the data were sufficiently reliable for purposes of this 

report. We met with representatives of the two tribes and the tribes’ 

consultant to discuss the analysis that was the basis for the tribes’ 

additional compensation claims. Our May 2006 report, on which this 

testimony is based, was prepared in accordance with generally accepted 

government auditing standards. 

In summary, 

• The tribes’ consultant differed from the approach used in prior GAO 

reports by (1) not using the tribes’ final asking prices as the starting point 

of the analysis and (2) not providing a range of additional compensation. 

First, in calculating additional compensation amounts, GAO used the 

 6

Michael L. Lawson, Ph.D., Morgan Angel & Associates, The Lower Brule and Crow Creek 

Sioux Tribes of South Dakota: Parity Compensation for Losses from Missouri River 

Pick-Sloan Dam Projects (Washington, D.C.: June 15, 2004). See S. Hrg. No. 108-620, at 34-

112 (2004). The consultant calculated a gross amount of additional compensation of $292.3

million (in 2003 dollars)—$105.9 million for the Crow Creek Sioux tribe and $186.4 million 

for the Lower Brule Sioux tribe. After subtracting the $66.8 million in additional 

compensation that the tribes received in the 1990s, the consultant arrived at a net 

additional request of $225.5 million.

7

GAO, Indian Issues: Analysis of the Crow Creek Sioux and Lower Brule Sioux Tribes’

Additional Compensation Claims, GAO-06-517 (Washington, D.C.: May 19, 2006). 

Page 3 GAO-06-849T Indians' Additional Compensation Claims 
tribes’ final asking prices, recognizing that their final settlement position 

should be the most complete and realistic. In contrast, the consultant used 

selected figures from a variety of tribal settlement proposals. For example, 

for the rehabilitation component of the tribes’ settlement proposals, the 

consultant used $13.1 million from proposals in 1957, rather than $6.7 

million from the tribes’ final rehabilitation proposals in 1961. Second, the 

tribes’ consultant calculated only the highest additional compensation 

dollar value rather than providing the Congress with a range of possible 

additional compensation based on different adjustment factors, as in the 

earlier GAO reports. 

• Using the approach we followed in our prior reports, we determined in 

this analysis that the additional compensation the Congress authorized for 

the tribes in the 1990s was already at the high end or was above the range 

of possible additional compensation. For the Crow Creek Sioux tribe, we 

estimated that the difference—adjusted to account for inflation and 

interest rates through 1996—would range from $6.5 million to $21.4 

million, compared with the $27.5 million the Congress authorized for the 

tribe in 1996. For the Lower Brule Sioux tribe, we estimated that the 

adjusted difference would range from $12.2 million to $40.9 million, 

compared with the $39.3 million the Congress authorized for the tribe in 

1997. We determined that the tribes’ final asking prices were a reasonable 

starting point for the calculations, as was the case for the tribes GAO 

reviewed in two prior reports. By contrast, the consultant estimated about 

$106 million and $186 million for additional compensation for the Crow 

Creek Sioux and Lower Brule Sioux tribes, respectively (in 2003 dollars). 

Rather than bringing the Crow Creek Sioux and Lower Brule Sioux tribes 

into parity with the additional compensation provided to other tribes, GAO 

believes that the two bills under consideration in the 109th Congress—

H.R. 109 and S. 374—would have the opposite effect. While our analysis 

does not support the additional compensation amounts contained in H.R. 

109 and S. 374, the Congress will ultimately decide whether or not 

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

should be. 

The Flood Control Act of 1944 established a comprehensive plan for flood 

control and other purposes, such as hydroelectric power production, in 

the Missouri River Basin.8

 The Pick-Sloan Plan—a joint water development 

program designed by the U.S. Army Corps of Engineers (the Corps) and 

the Department of the Interior’s (Interior) Bureau of Reclamation—

Background 

 8

Pub. L. No. 78-534, 59 Stat. 887 (1944). 

Page 4 GAO-06-849T Indians' Additional Compensation Claims 
included the construction of five dams on the Missouri River, including the 

Garrison Dam in North Dakota, and the Oahe, Fort Randall, Big Bend, and 

Gavins Point Dams in South Dakota. The construction of the Fort Randall 

Dam, located 7 miles above the Nebraska line in south-central South 

Dakota, began in May 1946 and was officially dedicated in August 1956. 

The dam is 160 feet high, and the reservoir behind it, known as Lake Case, 

stretches 107 miles to the northwest. (See fig. 1.)

Figure 1: The Fort Randall Dam and Lake Case (February 2006) 

In September 1959, the Corps began work on the Big Bend Dam, which is 

about 100 miles northwest of the Fort Randall Dam on land belonging to

both the Crow Creek Sioux and Lower Brule Sioux tribes. The Big Bend 

Dam is 95 feet high and was completed in September 1966. The reservoir 

behind the dam, known as Lake Sharpe, is 20 miles long. (See fig. 2.) 

Source: GAO.

Page 5 GAO-06-849T Indians' Additional Compensation Claims 
Figure 2: The Big Bend Dam and Lake Sharpe (July 1998) 

The Crow Creek Sioux and Lower Brule Sioux tribes reside on

reservations located across the Missouri River from one another in central

South Dakota. Each reservation includes about 225,000 acres. The major 

economic activities for both the Crow Creek Sioux and Lower Brule Sioux 

tribes are cattle ranching and farming, and both tribes provide guided 

hunting for fowl and other game. Each tribe also operates a casino and a 

hotel. Both tribes are governed by a tribal council under their respective 

tribal constitutions, and each tribal council is led by a tribal chairman. The 

major employers on the reservations are the tribes, the casinos, the 

Bureau of Indian Affairs, and the Indian Health Service. 

The construction of the Fort Randall Dam caused the flooding of more 

than 17,000 acres of Crow Creek and Lower Brule reservation land and the 

displacement of more than 100 tribal families. After these two tribes 

sustained major damage from this project, the construction of the Big 

Bend Dam inundated over 20,000 additional acres of their reservations. 

This flooding displaced more families, some of whom had moved earlier as 

a result of flooding from the Fort Randall Dam. (See table 1.) Flooding 

from the installation of both dams resulted in the loss of valuable timber 

and pasture and forced families to move to less desirable land, which 

affected their way of life.

Source: U.S. Army Corps of Engineers. 

Page 6 GAO-06-849T Indians' Additional Compensation Claims 
Table 1: Acreage Lost and Families Displaced by the Fort Randall and Big Bend

Dams 

Fort Randall Dam Big Bend Dam 

Tribe

Acreage

 lost

Number of 

Families 

displaced Acreage lost

Number of 

families 

displaced

Crow Creek Sioux 9,418 84 6,179 27

Lower Brule Sioux 7,997 35 14,299 62

Total 17,415 119 20,478 89

Sources: House and Senate reports. 

During the 1950s and 1960s, the Corps, Interior, through its Missouri River 

Basin Investigations Unit (MRBI),9

 and the tribes—represented through 

tribal negotiating committees—developed their own estimates of the 

damages caused by the Fort Randall and Big Bend dams. The settlement 

negotiations for the Fort Randall Dam stretched over several years, and 

the tribes put forward a number of different settlement proposals. The 

settlement negotiations for the Big Bend Dam were conducted in a much 

shorter time frame, but there still were a number of settlement proposals 

and counter-proposals. See table 2 for summary of the tribes’ initial 

settlement proposals and final asking prices for both dams. 

 9

The Secretary of the Interior created this unit in 1945 to study the impact of the various 

Missouri River flood control projects. 

Page 7 GAO-06-849T Indians' Additional Compensation Claims 
Table 2: Initial Settlement Proposals and Final Asking Prices by the Crow Creek 

Sioux and Lower Brule Sioux tribes for the Fort Randall and Big Band Dams

Current year dollars

Settlement components, by

dam and by tribe

Initial settlement proposals

(1954, 1960, and 1961) 

Final asking prices 

(1958 and 1961)

Fort Randall Dam 

Crow Creek Sioux

Direct damages $566,967 $641,588

Indirect damages 1,132,452 1,463,433

Administrative expenses 100,000a100,000

 Subtotal $1,799,419 $2,205,021

 Rehabilitation $2,560,000 $0

 Lower Brule Sioux

Direct damages $739,904 $771,998

Indirect damages 1,790,568 788,904

Administrative expenses 100,000a200,000

Subtotal $2,630,472 $1,760,902

Rehabilitation $2,530,000 $0

Subtotal $4,429,891b$3,965,923

Big Bend Dam 

Crow Creek Sioux

Direct damages $494,890 $355,000

Indirect damages 421,034 467,004

Administrative expenses 125,000 125,000

Rehabilitation 2,790,000 4,002,000

 Subtotal $3,830,924 $4,949,004

Lower Brule Sioux 

Direct damages $1,111,910 $825,000

Indirect damages 783,998 884,472

Administrative expenses 125,000 125,000

Rehabilitation 1,620,000 2,670,300

New school 350,000 350,000

Subtotal $3,990,908 $4,854,772

Subtotal $7,821,832 $9,803,776

Total $12,251,723b $13,769,699

Source: National Archives. 

a

Administrative expenses were first proposed in H.R. 3544 and H.R. 3602, 84th Cong., 1st Sess., 

introduced on February 3, 1955. 

Page 8 GAO-06-849T Indians' Additional Compensation Claims 
b

To avoid double counting the rehabilitation component, the rehabilitation amounts for the Fort 

Randall Dam are not included in the subtotal for the Fort Randall Dam nor in the total for the entire 

table. During the negotiations for the Fort Randall Dam, the tribes agreed to defer the negotiations on

the rehabilitation component to the settlement negotiations for the Big Bend Dam. The initial 

settlement proposals for rehabilitation for the Fort Randall Dam totaled $5,090,000, compared to 

$4,410,000 for the initial rehabilitation proposals for the Big Bend Dam. Using the higher rehabilitation 

amounts from the Fort Randall Dam negotiations, the total would increase to $12,931,723, which is

still less than the total of the tribes’ final asking prices. 

Tribes at five other reservations affected by flood control projects along 

the Missouri River incurred losses ranging from about 600 acres to over 

150,000 acres. These tribes received some compensation, primarily during 

the 1950s, for the damages they sustained. However, beginning in the 

1980s, some of these tribes began requesting additional compensation. The 

Congress responded to their requests by authorizing the establishment of 

development trust funds. (See table 3.) The tribes at the Fort Berthold, 

Standing Rock, and Cheyenne River reservations received compensation 

within the ranges we had suggested the Congress consider in our reviews 

of the tribes’ additional compensation claims. The ranges were based on 

the current value of the difference between each tribes’ final asking price 

and the amount that the Congress authorized. We were not asked to 

review the additional compensation claims for the Crow Creek Sioux and 

Lower Brule Sioux tribes in the 1990s or for the Santee Sioux and Yankton

Sioux tribes in 2002. 

Table 3: Additional Compensation Authorized by Congress for Tribes on the Missouri River 

Current year dollars in millions

Tribe Dam Acreage lost

Year additional 

compensation

enacted

Additional

compensation

authorized

Three Affiliated Tribes of the Fort Berthold Reservation Garrison 152,360 1992a$149.2

Standing Rock Sioux Oahe 55,994 1992a 90.6

Crow Creek Sioux Fort Randall;

Big Bend

15,597 1996b 27.5

Lower Brule Sioux Fort Randall;

Big Bend

22,296 1997c 39.3

Cheyenne River Sioux Oahe 104,420 2000d 290.7

Yankton Sioux Fort Randall 2,851 2002e 23.0

Santee Sioux Gavins Point 593 2002e 4.8

Source: GAO analysis of the additional compensation acts. 

a

Pub. L. No. 102-575, title XXXV, 106 Stat. 4600, 4731 (1992). 

b

Pub. L. No. 104-223, 110 Stat. 3026 (1996). 

c

Pub. L. No. 105-132, 111 Stat. 2563 (1997). 

Page 9 GAO-06-849T Indians' Additional Compensation Claims 
d

Pub. L. No. 106-511, title I, 114 Stat. 2365 (2000). The development trust fund for the Cheyenne 

River Sioux tribe will not be created until the first day of the 11th fiscal year after enactment, or

October 1, 2011.

e

Pub. L. No. 107-331, title II, 116 Stat. 2834, 2838 (2002). The development trust funds for the 

Yankton Sioux and Santee Sioux tribes will not be created until the first day of the 11th fiscal year 

after enactment, or October 1, 2013. 

The approach used by the Crow Creek Sioux and Lower Brule Sioux 

tribes’ consultant differed from the approach we used in our prior reports. 

The consultant used a variety of settlement proposals, instead of 

consistently using the tribes’ final asking prices, in calculating the 

difference between what the tribes asked for and what the Congress 

authorized. As a result, the consultant’s proposed compensation estimates 

are higher than if he had consistently used the tribes’ final asking prices. In

addition, the consultant provided only the highest additional 

compensation value, rather than a range of possible additional 

compensation from which the Congress could choose. 

Consultant’s

Compensation 

Analysis Differs from 

the Approach GAO 

Previously Used for 

Other Tribes 

Consultant Used Various 

Settlement Proposals 

Rather Than Consistently

Using the Tribes’ Final 

Asking Prices 

To arrive at an additional compensation estimate, the consultant did not 

consistently use the tribes’ final asking prices when calculating the 

difference between what the tribes asked for and what they finally 

received. In determining possible additional compensation for the tribes at 

the Fort Berthold and Standing Rock reservations in 1991, and Cheyenne

River reservation in 1998, we used the tribes’ final asking prices to 

calculate the difference between what the tribes asked for and what they 

received. In our prior reports, we used the tribes’ final position because

we believed that it represented the most up-to-date and complete 

information and that their final position was more realistic than their 

initial asking prices. In contrast, the consultant used figures from a variety 

of settlement proposals—several of which were not the tribes’ final asking

prices—to estimate additional compensation for damages (including direct 

and indirect damages), administrative expenses, and rehabilitation. As a 

result, the consultant’s estimate of the tribes’ asking prices in the late 

1950s and early 1960s was about $7.7 million higher than it would have 

been if he had consistently used the tribes’ final asking prices. Choosing 

which settlement proposal to use to calculate the difference between what 

the tribe asked for and what it finally received is critically important, 

because a small numerical difference 50 years ago can result in a large 

difference today, once it is adjusted to reflect more current values. 

With respect to the Fort Randall Dam, the consultant used amounts from a 

variety of settlement proposals for damages and administrative expenses. 

To determine additional compensation, the consultant used a $2.2 million 

Page 10 GAO-06-849T Indians' Additional Compensation Claims
settlement proposal by the Crow Creek Sioux tribe and a $2.6 million 

settlement proposal by the Lower Brule Sioux tribe. (See table 4.) The 

Crow Creek proposal was from May 1957, and was the same as the tribe’s

final asking price requested about 1 year later, in February 1958. However, 

the Lower Brule proposal was from the first compensation bill introduced 

in the Congress in July 1954, almost 4 years before the tribe’s final asking 

price of about $1.8 million in March 1958-—a difference of more than 

$850,000. 

Table 4: Comparison of the Settlement Figures Used by the Tribes’ Consultant Versus the Tribes’ Final Asking Prices for the 

Fort Randall Dam 

Current year dollars

Type of compensation, by tribe

Settlement 

figure used by 

the tribes’ 

consultanta

Date of 

settlement

 figure

Tribes’ final 

 asking prices 

Date of final 

asking price Difference

Crow Creek Sioux 

Direct damages $641,588 May 1957 $641,588 Feb. 1958 $0

Indirect damages 1,463,433 May 1957 1,463,433 Feb. 1958 0

Administrative expenses 100,000 May 1957 100,000 Feb. 1958 0

Subtotal $2,205,021 $2,205,021 $0

Lower Brule Sioux 

Direct damages $739,904 July 1954 $771,998 Mar. 1958 ($32,094)

Indirect damages 1,790,568 July 1954 788,904 Mar. 1958 1,001,664

Administrative expenses 100,000 Feb. 1955 200,000 Mar. 1958 (100,000)

Subtotal $2,630,472 $1,760,902 $869,570

Total $4,835,493 $3,965,923 $869,570

Sources: National Archives and the consultant’s analysis. 

a

The consultant’s figures for the Crow Creek Sioux tribe were from H.R. 7758, 85th Cong., 1st Sess., 

(companion bill S. 2152) introduced on May 24, 1957. The consultant’s damage figures for the Lower 

Brule Sioux tribe were from H.R. 9832, 83rd Cong., 2nd Sess., (companion bill S. 3748) introduced 

on July 8, 1954. The administrative expenses figure for Lower Brule was from H.R. 3544, 84th Cong., 

1st Sess., (companion bill S. 953) introduced on February 3, 1955. The direct damages in H.R. 3544

were reduced to $708,493.29, and the indirect damages were reduced to $788,904. 

For the Big Bend Dam, the consultant also used amounts from different 

settlement proposals for damages and administrative expenses. To 

determine additional compensation, the consultant used amounts from 

congressional bills introduced in March 1961 for direct damages, but used 

amounts from proposed amendments to the bills in June 1961 for indirect 

damages. The tribes’ asking prices from June 1961 can be considered their 

final asking prices because the proposed amendments are the last 

evidence of when the tribes requested specific compensation (indirect 

Page 11 GAO-06-849T Indians' Additional Compensation Claims
damages) or agreed to a compensation amount (direct damages). The 

consultant would have been more consistent had he used both the indirect 

and direct damage settlement figures in the proposed amendments from 

June 1961, rather than a mixture of these figures. As a result, the total 

amount for damages the consultant used to calculate the difference 

between what the tribes requested and what it finally received is about 

$427,000 (in 1961 dollars), which is higher than if the tribes’ final asking 

prices from June 1961 had been used consistently. (See table 5.) 

Table 5: Comparison of the Settlement Figures Used by the Tribes’ Consultant Versus the Tribes’ Final Asking Prices for the 

Big Bend Dam 

Current year dollars

Type of compensation, by tribe

Settlement

 figure used by 

the tribes’ 

consultanta

Date of 

settlement 

figure

Tribes’ final 

 asking prices 

Date of final 

asking price Difference

Crow Creek Sioux 

 Direct damages $494,890 Mar. 1961 $355,000 June 1961 $139,890

 Indirect damages 467,004 June 1961 467,004 June 1961 0

 Administrative expenses 125,000 Mar. 1961 125,000 June 1961b0

Subtotal $1,086,894 $947,004 $139,890

Lower Brule Sioux 

 Direct damages $1,111,910 Mar. 1961 $825,000 June 1961 $286,910

 Indirect damages 884,472 June 1961 884,472 June 1961 0

 Administrative expenses 125,000 Mar. 1961 125,000 June 1961b0

 New school 350,000 Mar. 1961 350,000 June 1961b 0

Subtotal $2,471,382 $2,184,472 $286,910

Total $3,558,276 $3,131,476 $426,800

Sources: National Archives and the consultant’s analysis

a

The consultant used figures from H.R. 5165 (companion bill S. 1252) and H.R. 5144 (companion bill 

S. 1251) for direct damages and administrative expenses for the Crow Creek Sioux and Lower Brule 

Sioux tribes, respectively. The figure for the new school for the Lower Brule Sioux Tribe was also 

from H.R. 5144 (companion bill S. 1251). The figures for indirect damages were from proposed 

amendments to these bills. An Assistant Secretary for the Department of the Interior included a 

composite of the recommended amendments of the Secretary of the Interior, the Secretary of the 

Army, and the tribes to H.R. 5144 and H.R. 5165 in a letter to the Chairman of the House, 

Subcommittee on Indian Affairs, Committee on Interior and Insular Affairs, on June 16, 1961. 

b

The tribes’ final asking prices for administrative expenses and the new school for the Lower Brule 

Sioux tribe were represented in congressional bills introduced in March 1961. No changes were

proposed to these figures in the proposed amendments to the bills, so we assumed these figures

represented the tribes’ final asking prices as of June 1961. 

Lastly, the consultant did not use the tribes’ final asking prices for the 

rehabilitation component of the settlement payment. The consultant used 

Page 12 GAO-06-849T Indians' Additional Compensation Claims
a $6.7 million rehabilitation figure that the Crow Creek Sioux tribe’s 

negotiating committee proposed in May 1957 and a $6.3 million 

rehabilitation figure that was proposed in congressional bills in 1955 and 

1957 for the Lower Brule Sioux tribe. (See table 6.) Both of these figures 

were developed during the negotiations for the Fort Randall Dam. 

However, the tribes agreed in their February and March 1958 proposals—

their final asking prices for the Fort Randall Dam—to defer consideration 

of their rehabilitation proposals until after land acquisitions were made for 

the construction of the Big Bend Dam. The Big Bend Dam’s installation 

would once again result in the flooding of their lands. In our view, the 

consultant should have used the final rehabilitation figures proposed by 

the tribes in 1961—that is, $4 million for the Crow Creek Sioux tribe and 

$2.7 million for the Lower Brule Sioux tribe. 

Table 6: Comparison of Rehabilitation Figures Used by the Tribes’ Consultant Versus the Tribes’ Final Asking Prices 

Current year dollars

Rehabilitation payment, by tribe 

Settlement 

figure used by 

the tribes’ 

consultanta

Date of 

settlement

 figure

Tribes’ final 

 asking prices 

Date of final 

asking price Difference

Crow Creek Sioux $6,715,311 May 1957 $4,002,000 Mar. 1961 $2,713,311

Lower Brule Sioux 6,348,316 Apr. 1957b2,670,300 Mar. 1961 3,678,016

Total $13,063,627 $6,672,300 $6,391,327

Sources: National Archives and the consultant’s analysis. 

a

The consultant’s rehabilitation figure for the Crow Creek Sioux tribe was from H.R. 7758, 85th Cong., 

1st Sess., (companion bill S. 2152) introduced on May 24, 1957. The figure was also presented by

the tribe’s negotiating committee in May 1957. The consultant’s rehabilitation figure for the Lower 

Brule Sioux tribe was from H.R. 6569, 85th Cong., 1st Sess., introduced on April 2, 1957. 

b

The same rehabilitation figure was also included in settlement proposals from February 1955 (H.R. 

3544 and S. 953) and March 1957 (H.R. 6074). As shown in table 5, the damage settlement figures

the consultant used were from H.R. 9832 (companion bill S. 3748) in 1954, years earlier than the date 

of the rehabilitation figure that was used. In 1954, H.R. 9832 and S. 3748 both included a 

rehabilitation figure of $2.53 million—over $3.8 million less than the figure the consultant used. 

During the settlement negotiations for the two dams, the tribes never 

submitted a settlement proposal at a singular point in time that consisted 

of the settlement figures that the tribes’ consultant grouped together for 

the purposes of his calculations. 

Page 13 GAO-06-849T Indians' Additional Compensation Claims
In our two prior reports, we suggested that, for the tribes of Fort Berthold, 

Standing Rock, and Cheyenne River, the Congress consider a range of 

possible compensation based on the current value of the difference 

between the final asking price of each tribe and the amount that it 

received. In calculating the current value, we used two different rates to 

establish a range of additional compensation. For the lower end of the 

range, we used the inflation rate to estimate the amount the tribes would 

need to equal the purchasing power of the difference. For the higher 

range, we used an interest rate to estimate the amount the tribes might 

have earned if they had invested the difference in Aaa corporate bonds as

of the date of the settlement.10 The consultant did not follow this approach 

when he calculated the compensation estimates for the Crow Creek Sioux 

and Lower Brule Sioux tribes. Instead, he used the corporate bond rate to 

develop a single figure for each tribe, rather than a range.

Using the approach we followed in our prior reports, which was based on 

the tribes’ final asking prices, we found that the additional compensation 

the Crow Creek Sioux and Lower Brule Sioux tribes received in the 1990s

was either at the high end or above the range of possible additional 

compensation. For both tribes, we calculated the difference between the

final asking prices and the compensation authorized in 1958 and 1962. We

then took the difference and adjusted it to account for the inflation rate 

and the Aaa corporate bond rate through either 1996 or 1997 to produce a 

possible range of additional compensation to compare it with the 

additional compensation the Congress authorized for the tribes in 1996 

and 1997. For the Crow Creek Sioux tribe, we estimated that the 

difference adjusted to 1996 values for both dams would range from $6.5

million to $21.4 million (see table 7), compared with the $27.5 million the 

Congress authorized for the tribe in 1996. The $27.5 million in additional 

compensation already authorized for the Crow Creek Sioux tribe is 

therefore higher than the amount that we would have proposed in 1996 

using our approach. 

Consultant Developed a 

Single Compensation 

Estimate for Each Tribe, 

Rather Than a Range of 

Estimates 

Amounts Calculated 

by GAO Are Similar to 

the Amounts 

Received by the 

Tribes in the 1990s 

 10Aaa is the highest grade of corporate bonds in the estimate of bond rating services, such 

as Moody’s Investment Services. 

Page 14 GAO-06-849T Indians' Additional Compensation Claims
Table 7: Estimate of Additional Compensation Range for the Crow Creek Sioux Tribe

Current year dollars

Additional compensation range

 (in 1996 dollars) 

Type of payment 

Tribes’ final 

asking prices 

(1958 and 1961)a

Payment 

authorized (1958 

and 1962)b

Difference 

Low end 

 (inflation rate)

c

High end

(interest rate)d

Fort Randall Dam 

Damages $2,105,021 $1,395,812 $709,209 $3,848,314 $13,369,732

Administrative 

expenses

100,000 100,000 0 0 0

Subtotal $2,205,021 $1,495,812 $709,209 $3,848,314 $13,369,732

Big Bend Dam 

Damages $822,004 $564,302 $257,702 $1,338,508 $4,094,541

Administrative 

expenses

125,000 75,000 50,000 259,701 794,433

Subtotal $947,004 $639,302 $307,702 $1,598, 209 $4,888,974

Rehabilitation $4,002,000 $3,802,500 $199,500 $1,036,206 $3,169,789

Total $7,154,025 $5,937,614 $1,216,411 $6,482,729 $21,428,495

Source: GAO analysis of National Archives legislative files and the consultant’s analysis. 

a

The damages figure for the Fort Randall Dam is from the Statement and Estimates of the Crow

Creek Sioux Tribal Council and Negotiating Committee, dated February 21, 1958, presented at a 

hearing on H.R. 10786 before the House Committee on Interior and Insular Affairs, Subcommittee on

Indian Affairs, March 25, 1958. The tribe’s final asking price for the damages caused by the Fort 

Randall Dam was embodied in H.R. 10786, 85th Cong., 2nd Sess., (companion bill S. 3225) 

introduced on February 18, 1958. The administrative expenses figure for the Fort Randall Dam is

from H.R. 10786. The damage figure for the Big Bend Dam is from proposed amendments to H.R. 

5165, dated June 16, 1961, and the figures for administrative expenses and rehabilitation are from

H.R. 5165 (companion S. 1252) because the tribes did not ask for any changes to these components

in the June 1961 proposed amendments. 

b

Fort Randall Dam, Pub. L. No. 85- 916, 72 stat. 1766 (1958); and Big Bend Dam, Pub. L. No. 87-

735, 76 Stat. 704 (1962). 

c

Data in this column reflect the annual inflation rate (consumer price index for all items) from 1959 

through 1996 for the Fort Randall Dam items and from 1962 through 1996 for the Big Bend Dam 

items and rehabilitation. 

d

Data in this column reflect the annual average rate of interest earned on investments in Aaa 

corporate bonds from 1959 through 1996 for the Fort Randall Dam items and from 1962 through 1996 

for the Big Bend Dam items and rehabilitation. 

For the Lower Brule Sioux tribe, we estimated that the difference adjusted 

to 1997 values for both dams would range from $12.2 million to $40.9 

million (see table 8), compared with the $39.3 million the Congress 

authorized for the tribe in 1997. The $39.3 million falls toward the high end 

of the range that we would have proposed in 1997 using our approach. 

Page 15 GAO-06-849T Indians' Additional Compensation Claims
Table 8: Estimate of Additional Compensation Range for the Lower Brule Sioux Tribe

Current year dollars

Additional compensation range

(in 1997 dollars) 

Type of payment 

Tribes’ final 

asking prices 

(1958 and 1961)a

Payment 

authorized

(1958 and 1962)b

Difference 

Low end 

(inflation rate)c

High end

(interest rate)d

Fort Randall Dam 

Damages $1,560,902 $976,523 $584,379 $3,243,892 $11,816,283

Administrative 

expenses

200,000 100,000 100,000 555,101 2,022,024

Subtotal $1,760,902 $1,076,523 $684,379 $3,798,993 $13,838,307

Big Bend Dam 

Damages $1,709,472 $1,225,715 $483,757 $2,570,431 $8,244,275

Administrative 

expenses

125,000 75,000 50,000 265,674 852,109

 New school 350,000 0 350,000 1,859,716 5,964,764

Subtotal $2,184,472 $1,300,715 $883,757 $4,695,821 $15,061,148

Rehabilitation $2,670,300 $1,968,750 $701,550 $3,727,669 $11,955,943

Total $6,615,674 $4,345,988 $2,269,686 $12,222,483 $40,855,398

Source: GAO analysis of National Archives legislative files and the consultant’s analysis. 

a

The damages figure and administrative expenses for the Fort Randall Dam are from the Lower Brule 

Proposed Program in Support of H.R. 6074, which was presented at a hearing on H.R. 6074 before 

the House Committee on Interior and Insular Affairs, Subcommittee on Indian Affairs, March 25, 

1958. The tribe’s final asking price for damages caused by the Fort Randall Dam was embodied in 

H.R. 6074, 85th Cong., 1st Sess., introduced on March 18, 1957. The damages figure for the Big 

Bend Dam is from proposed amendments to H.R. 5144, dated June 16, 1961, and the figures for 

administrative expenses and rehabilitation are from H.R. 5144 (companion bill S. 1251) because 

there were no changes requested by the tribe to these components in the June 1961 proposed 

amendments. 

b

Fort Randall Dam, Pub. L. No. 85-923, 72 Stat. 1773 (1958); and Big Bend Dam, Pub. L. No. 87-734, 

76 Stat. 698 (1962). 

c

Data in this column reflect the annual inflation rate (consumer price index for all items) from 1959 

through 1997 for the Fort Randall Dam items and from 1962 through 1997 for the Big Bend Dam 

items and rehabilitation. 

d

Data in this column reflect the annual average rate of interest earned on investments in Aaa 

corporate bonds from 1959 through 1997 for the Fort Randall Dam items and from 1962 through 1997 

for the Big Bend Dam items and rehabilitation. 

Our estimates of additional compensation for the two tribes vary 

significantly from the amounts calculated by the tribes’ consultant. Our 

estimated range for the two tribes combined is about $18.7 million to $62.3 

million. The consultant calculated an additional compensation figure for 

Page 16 GAO-06-849T Indians' Additional Compensation Claims
the two tribes of $292.3 million (in 2003 dollars)—that is, $105.9 for the 

Crow Creek Sioux tribe and $186.4 for the Lower Brule Sioux tribe—

before subtracting the amounts received by the tribes in 1996 and 1997,

respectively.

In conclusion, the additional compensation already authorized for the 

Crow Creek Sioux and Lower Brule Sioux tribes in 1996 and 1997, 

respectively, is consistent with the additional compensation authorized for 

the other tribes on the Missouri River. Rather than bringing the Crow 

Creek Sioux and Lower Brule Sioux tribes into parity with the other tribes, 

the two bills under consideration in the 109th Congress—H.R. 109 and S.

374—would have the opposite effect. As such, should the Congress rely on 

our analysis in this report and not provide these two tribes a third round of 

compensation, then the additional compensation provided to five of the 

seven tribes affected by Pick-Sloan dam projects on the Missouri River 

would generally be within the ranges we have calculated. (See fig. 3.) 

Accordingly, we believe our approach would provide more consistency 

among the tribes. 

Page 17 GAO-06-849T Indians' Additional Compensation Claims
Figure 3: GAO’s Estimated Range of Additional Compensation Versus the Additional Compensation Authorized for Five 

Tribes Since 1992 

6.5 21.4

170.0

290.7

27.5

12.2 40.9

39.3

51.8 149.2

64.5

90.6

78.2

Dollars in millions

Additional compensation authorized in Pub L. No. 102-575, title XXXV, 106 Stat. 4600, 4731 (1992)

Additional compensation authorized in Pub L. No. 104-223, 110 Stat. 3026 (1996)

Additional compensation authorized in Pub L. No. 105-132, 111 Stat. 2563 (1997)

Additional compensation authorized in Pub L. No. 106-511, title I, 114 Stat. 2365 (2000)

0 50 100 200 150 300

Cheyenne River Sioux

(GAO range in 1996 dollars)

Crow Creek Sioux

(GAO range in 1996 dollars)

Three Affiliated Tribes of the 

Fort Berthold Reservation 

(GAO range in 1990 dollars)

Standing Rock Sioux

(GAO range in 1990 dollars)

Lower Brule Sioux

(GAO range in 1997 dollars)

Source: GAO.

Tribe

Providing a third round of compensation to the Crow Creek Sioux and 

Lower Brule Sioux tribes, in the amounts proposed in the bills, would 

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

tribes to seek a third round of compensation. Our analysis does not 

support the additional compensation amounts contained in H.R. 109 and S. 

374. Notwithstanding the results of our analysis, the Congress will 

ultimately decide whether or not additional compensation should be 

provided, and if so, how much it should be. Our analysis will assist the 

Congress in this regard. 

Mr. Chairman, this completes my prepared statement. I would be happy to

respond to any questions you or other Members of the Committee may 

have at this time. 

Page 18 GAO-06-849T Indians' Additional Compensation Claims
For further information, please contact Robin M. Nazzaro on (202) 512-

3841 or nazzaror@gao.gov. Individuals making key contributions to this 

testimony and the report on which it was based are Greg Carroll, Timothy 

J. Guinane, Susanna Kuebler, Jeffery D. Malcolm, and Carol Herrnstadt 

Shulman. 

Page 19 GAO-06-849T Indians' Additional Compensation Claims

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