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87–357 PDF 2003

S. HRG. 108–115

REORGANIZATION OF THE BUREAU OF INDIAN

AFFAIRS

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

ON

PROPOSED REORGANIZATION OF THE BUREAU OF INDIAN AFFAIRS

MAY 21, 2003

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

DANIEL K. INOUYE, Hawaii, Vice Chairman

JOHN McCAIN, Arizona,

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

ORRIN G. HATCH, Utah

JAMES M. INHOFE, Oklahoma

GORDON SMITH, Oregon

LISA MURKOWSKI, Alaska

KENT CONRAD, North Dakota

HARRY REID, Nevada

DANIEL K. AKAKA, Hawaii

BYRON L. DORGAN, North Dakota

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

PAUL MOOREHEAD, Majority Staff Director/Chief Counsel

PATRICIA M. ZELL, Minority Staff Director/Chief Counsel

(II)
(III)

C O N T E N T S

Page

Statements:

Berrey, John, chairman, Quapaw Tribal Business Committee, Quapaw,

OK .................................................................................................................. 23

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

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

George, Keller, president, United South and Eastern Tribes [USET],

Nashville, TN ................................................................................................ 26

Hall, Tex G., president, National Congress of American Indians, Washington, DC ..................................................................................................... 19

Marshall, Sr., Clifford Lyle, chairman, Hoopa Valley Tribal Council,

Hoopa, CA ...................................................................................................... 25

Martin, Aurene, acting assistant secretary, BIA, Department of the Interior .................................................................................................................. 2

Sangrey, Richard, acting chairman, Intertribal Monitoring Association,

Alburquerque, NM ........................................................................................ 29

Swimmer, Ross, special trustee for American Indians, Department of

the Interior, Washington, DC ...................................................................... 2

APPENDIX

Prepared statements:

Berrey, John ...................................................................................................... 36

Conrad, Hon. Kent, U.S. Senator from North Dakota .................................. 33

Daschle, Hon. Tom, U.S. Senator from South Dakota .................................. 34

George, Keller ................................................................................................... 38

Hall, Tex G. ....................................................................................................... 45

Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice chairman, Committee on Indian Affairs ............................................................................... 33

Marshall, Sr., Clifford Lyle (with attachments) ............................................. 53

Martin, Aurene (with attachments) ................................................................ 76

Sangrey, Richard .............................................................................................. 70

Swimmer, Ross (with attachments) ................................................................ 76

(1)

REORGANIZATION OF THE BUREAU OF

INDIAN AFFAIRS

WEDNESDAY, MAY 21, 2003

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

The committee met, pursuant to notice, at 10:08 a.m. in room

SR–485, Senate Russell Building, Hon. Ben Nighthorse Campbell

(chairman of the committee) presiding.

Present: Senators Campbell and Conrad.

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

The CHAIRMAN. The committee will be in session.

Welcome to the committee hearing on the reorganization of the

Bureau of Indian Affairs [BIA] and the Office of Special Trustee for

American Indians.

Senator Inouye will try to be here; he has a conflict this morning.

Senator Daschle sent a statement over that I will include in the

record for him. Several Senators may be coming in and out during

this morning, but we are going to go ahead and start.

The BIA is no stranger to reorganizations. The Congressional Research Service tells us that since the issuance of the Merriam Report in 1928 there have been 18 major attempts to reorganize the

BIA, including the current one. Anyone involved in Indian affairs

knows that the current Indian trust management system needs to

be updated and reformed.

For decades the system was allowed to remain in place without

reform, without improvement, and without much attention being

paid to it. Only in the past 15 years or so have the tribes, the Congress, and the executives looked for ways to update the centuries

old framework. I believe that we need to update the computer and

accounting hardware, but we also need to revisit the basic principles of the trust, such as legislating appropriate standards for

Federal and tribal performance in an era of Indian self-determination, expanding tribal control and decisionmaking for their own assets without saddling the United States with all the liability for the

decisions, and bringing the discipline and advantages of the private

sector to how Indian funds are managed and invested.

From January 2002 to November 2002, the Joint Department of

the Interior—Tribal Task Force on Trust Reform met in exhaustive

consultations and meetings around the country but could not reach
2

consensus on the issues it confronted. In December 2002, Congress

gave the Department the green light to reorganize with $5 million

to begin to carryout the reorganization. That is the subject of today’s hearing.

Our first panel will consist of the newly confirmed special trustee, Ross Swimmer, delighted to see you here, Ross, and the acting

assistant secretary of Indian affairs, Aurene Martin. In the second

panel we will hear from the National Congress of American Indians, the Intertribal Monitoring Association, the United South and

Eastern Tribes, the Quapaw Tribe, and the Hoopa Tribe of California.

Senator Inouye, as I mentioned, will not be here, maybe not at

all, but certainly not until later. So his written testimony will be

included in the record.

[Prepared statement of Senator Inouye appears in appendix.]

The CHAIRMAN. With that, Ross, if you would like to go ahead.

Welcome to the committee. If you would like to depart from your

written testimony, feel free to do so.

STATEMENT OF ROSS SWIMMER, SPECIAL TRUSTEE FOR

AMERICAN INDIANS, DEPARTMENT OF THE INTERIOR,

WASHINGTON, DC, ACCOMPANIED BY AURENE MARTIN, ACTING ASSISTANT SECRETARY, BUREAU OF INDIAN AFFAIRS

Mr. SWIMMER. Thank you, Mr. Chairman. I appreciate this opportunity to appear before you today, and particularly in the capacity as special trustee. I thank the committee for its efforts in that

regard as far as the confirmation is concerned. We do have prepared testimony and would like to submit that for the record.

The CHAIRMAN. It will be included.

Mr. SWIMMER. Mr. Chairman, the primary purpose of the reorganization that we are to talk about today is to improve the Department’s ability to fulfill its trust responsibilities to individual Indians and tribes. It is important that this committee recognize and

understand that the Department has been held in breech of certain

of its fiduciary responsibilities in what is known as the Cobell litigation. In this litigation, individual Indian account holders, as a

class, have sued the Department. They have expressed dissatisfaction, extreme dissatisfaction, with the service they have received

from the Department in the past and with the service currently,

and they are claiming that they are owed tens of billions of dollars

for the mismanagement of the trust. The judge, and I quote, has

held that the Department:

Has indisputably proven to the court, the Congress, and the individual Indian

beneficiaries that it is either unwilling or unable to competently administer the IIM

Trust.

The Secretary takes these allegations very seriously. Regaining

the confidence of the trust beneficiaries and ensuring that the Department is in full compliance with its trust obligations is as serious a challenge as the Department has ever faced. It is for this reason that the Secretary, with the support of the former Special

Trustee, the Assistant Secretary for Indian Affairs, this Special

Trustee, and this Assistant Secretary for Indian Affairs has gone

through a long process toward creating what we believe is the right

organizational framework and structure to make this happen. It
3

has been a journey of some time. The reorganization is a critical

part we believe in making the Department more accountable.

What we have done over the past year, in addition to the reorganization, is develop the first comprehensive trust management plan

to guide the Department’s efforts, and, as I think the committee is

aware, we have engaged in a long-term process of re-engineering

our business processes and how we do trust, how we manage the

trust, and how we account to the account holders and to the tribes.

And this effort is continuing as well.

All of these three efforts, the reorganization, the comprehensive

trust management plan, and the re-engineering, are what it takes

we believe to meet our trust responsibilities for our fiduciary trust

for the fiduciary trust asset management and accountability to both

Indian tribes and Indian account holders.

At this time, I would like to call on Assistant Secretary Martin

to give you some of the background of what it took to get to this

point in our reorganization efforts.

The CHAIRMAN. Okay. Ms. Martin.

Ms. MARTIN. Good morning, Mr. Chairman. Thank you for the

opportunity to appear before the committee today to talk about our

reorganization efforts.

As Mr. Swimmer stated, the reorganization of the BIA and Office

of Special Trustee is a component of a larger plan to improve the

delivery of trust services to tribes and individual Indians. Our strategic plan for improving trust services is outlined in our comprehensive trust management plan and that provides the overall

framework of where we want to go with trust improvement and the

improvement of trust services. It outlines our mission, our vision,

our goals.

The reorganization provides a structure for improved delivery of

services and, as such, is a component of the larger overall plan.

The ‘‘To Be’’ process, the next phase of the development in our

overall reorganization, will result in re-engineered processes that

will ultimately provide the final component for improvement of

trust services.

As you mentioned in your opening remarks, the Department undertook massive efforts to consult with Indian tribes regarding options for reorganization following its proposal to establish the Bureau of Indian Trust Asset Management. Between November 2001

and December 2002, the Department has held 45 meetings all over

the country with tribal leaders to discuss the reorganization efforts.

We spent over $1 million in trying to provide this consultation. We

have done it at every level. We had a number of meetings, actually

12 meetings, a meeting in every region, to talk about, first, the Bureau of Indian Trust Asset Management, and after it initially became clear that there was overwhelming opposition to that, how we

might better reorganize the Department.

It was out of those first meetings that we developed the Joint

Tribal Leader Task Force. And we had a number of joint meetings

all over the country with regard to the Task Force. And as part of

the larger reorganization, the Joint Tribal Leaders-DOI Task

Force, we also held regional meetings with members of the Task

Force in their own region to discuss the efforts of the Task Force

and where we were going with our organizational options.
4

While I am sure you will hear different perspectives today on the

efforts and the results of the Joint DOI-Tribal Leader Task Force

on Trust Reform, the Department worked very hard with respect

to the agreements made with tribal leaders resulting from the discussions of the Task Force. It was our intent in designing the reorganization to try to abide by those agreements to the extent possible.

In other cases where we have not been able to abide by those

agreements, we have tried to fashion from existing lines of authority and existing authorities that we have delegated to the Secretary

some way of trying to honor those agreements as well. For example, one of the recommendations of the Task Force was that we create a single executive sponsor who would oversee all trust projects.

That recommendation was to either create another deputy secretary or an under secretary for Indian affairs. We lack the authority to create such a position without legislative authorization. So

we have increased the authorities of the Office of Special Trustee

to try to carry out some of those what the tribal leaders viewed as

necessary powers for a single executive sponsor.

In developing the new structure, we sought to highlight a number of things.

First, we wanted to keep decisionmaking at the local level where

expertise and knowledge within the Bureau was greatest and

where tribal leaders have the most contact with the BIA and the

Office of Special Trustee.

We wanted to continue the prominent position that self-governance plays in the BIA and we have expanded the role of self-governance and self-determination by elevating the responsibility for

policymaking for all self-determination programs to the Office of

the Assistant Secretary. I think the way we view it is that direct

service, 477, self-determination contracting, self-governance are all

part of a larger continuum that tribes kind of move through in becoming more independent. And we did not see that that was being

looked at as one kind of whole progression that tribes make and

we do not make policy that way. So we want to try to do that in

the future.

We also highlighted the need for accountability within the BIA

by creating the Deputy Special Trustee for Accountability. This

Deputy Special Trustee is responsible for creating trust training

programs for BIA and OST staff, and for developing trust regulations, policies, and procedures for the operation of trust programs.

Within BIA, we have restructured the lines of authority for the

BIA, the Office of the Assistant Secretary, and the Office of Indian

Education Programs. The most notable change is a separation of

the fiduciary trust services from the operation of other Bureau programs. We hope to achieve improved performance of trust services

by eliminating the collateral duties that have been performed by

employees responsible for trust services, a problem which has long

been cited as one of the biggest barriers to improved performance.

Other highlights include the consolidation of direct reports to the

Director of the BIA, formerly known as the Deputy Commissioner

of Indian Affairs, from 21 direct reports to 5. We have consolidated

a number of administrative functions performed by BIA into one

centralized unit, making it more efficient.
5

Many of the structural changes were developed as a result of the

discussions with the Joint Tribal Leaders Task Force and the DOI.

The actual realignment was developed by career and senior management of the BIA and the Office of Special Trustee.

Reorganizations are never easy. They generate understandable

anxiety and concern among the employees who are being asked to

change and improve their performance and whose professional and

personal lives can be significantly affected. We hope the explanation you receive today will accomplish these two things:

First, we hope that it will generate enthusiasm for successfully

meeting the challenges that face us in fulfilling our trust obligations; and

Second, we hope that it will reduce whatever anxiety you may

feel about how the necessary changes will affect you and what they

will require from you. It is imperative, however, that you understand that change is necessary and that business as usual with respect to trust management is not acceptable. To properly serve the

beneficiaries of the trust, we must, and we can, do better. I would

like to note here that that was one of the main things that the

Trust Task Force recognized at the very beginning of their discussions. The tribal leaders said the status quo was not acceptable, we

need to change the way we do business. And we entered into negotiations and discussions to see how we could do that.

As Mr. Swimmer said, the reorganization exists as part of a larger design and represents the structural changes necessary for the

organization to improve the delivery of trust services. The reorganization is a realignment of the functions of the Office of Special

Trustee, the Office of the Assistant Secretary for Indian Affairs,

and the BIA.

As part of the Joint DOI-Tribal Task Force, tribal leaders identified a number of factors necessary to any reorganization effort and

which provided benefits to tribes. These included: Promoting selfgovernance and self-determination; ensuring trust accountability;

focusing trust employees on trust duties; and personal and organizational accountability. The Department also felt that it was important to improve beneficiary services by supporting strong beneficiary-focused service delivery, promoting better uses for trust assets, and standardizing business practices.

The reorganization also provides a number of benefits to the Department and its employees, many of which are also important to

tribes. Decisions about trust assets continue to be made at the

agency and regional levels; effective management controls will be

provided; and performance will be measured, creating personal and

organizational accountability.

Mr. SWIMMER. As we began this reorganization over 1 year ago,

talking and consulting with the tribes about where we were going

after the failed attempt at the Bureau of Indian Trust Asset Management, we reached a conclusion in early December of last year

of the Task Force consultation meetings. At that time, essentially

all the options that had been discussed from November 2001 all the

way through the Task Force consultations and following were evaluated. We looked at where we were, where we had come from,

what had been proposed, and what we could do within the context

of the law as it stood. One of the items that the tribes proposed,
6

as Ms. Martin had suggested, was that the Department have a deputy secretary or an under secretary, neither of which position could

be done without an amendment or an action of the Congress.

Following the conclusion, however, on the December 4, 2002, the

Secretary approved the BIA/OST reorganization recommendations.

Following that, on December 18, the submission was made to the

Appropriations Committees for a very modest reprogramming that

would take us through the reorganization at that particular time.

And then in February, the BIA and the OST management met with

the appropriate unions and the Department of the Interior advised

them and it got through that phase. And then on the April 21,

2003, the reorganization was completed, with the appropriate

amendments to the Department manual.

The question obviously arises, how will the reorganization affect

the BIA and the Special Trustee staff? One of the things that I

think is important to recognize here is, what Ms. Martin just said,

it cannot be business as usual. The status quo is not acceptable.

The suggestion by the plaintiffs in the Cobell case is that we simply eliminate the 3,000 employees that are currently performing

trust activities and replace them all. We all know that is a very

impractical idea but it is one, frankly, that the court may accept.

The court is interested in looking at a receiver of some kind. We

have no idea how that might play out. But certainly, we believe

that the 3,000 or so employees that are working within the BIA

and the Special Trustee’s Office are doing a pretty credible job and

that there needs to be more training, better organizational structure, more focus on the trust activities, and, frankly, more people

well trained in trust activities to help support the performance that

they are doing now.

In addition to the realignment of boxes, as we call it, within the

reorganization, there is more to it than that. We will be adding

new staff at the local level. That new staff comes in the form of

deputy assistant superintendents and deputy regional directors

within the BIA, and also within the Special Trustee’s Office we will

expect to have new staff, as many as 100 or more people, who will

be placed at the local level who will be working directly with the

agency superintendents and deputy superintendents who are responsible for delivering the trust services.

Nearly 3,000 employees have already gone through a formal

Trust Foundation’s training course. There are going to be advancement opportunities for those people as they become certified in

trust operations and trust activities. We will obviously look to people that are within the system now to become qualified to handle

specific trust positions as well as recruit from the private sector to

try to bring in people that have a private sector background in

trust and can hopefully be quickly assimilated into the Indian trust

business as well. So there is a considerable effort here that we intend to grow the organization, train people into the trust world,

and establish a very strong focus on the trust operations and trust

activities which we think is very critical and a critical part of this

reorganization.

Ms. MARTIN. We have designed templates for how we expect this

reorganization to play out throughout the organization and for regional and agency organizations. Each region has had the oppor-
7

tunity to present justifications to deviate from the template, because we recognize that every region has different needs and requirements because tribes are different and every tribe has different needs and requirements itself. We are in the process of reviewing those proposed changes, but most regions will have the following organizational structure:

We have divided, as I stated earlier, our fiduciary trust services

into one direct line of authority, who will report to a deputy director for Trust Services at the regional level. And programs that are

included in the trust services line of authority include natural resources programs—water resources programs, forestry, fire, agriculture, fish and wildlife programs, and also real estate services— land acquisition and disposal, land title records offices, probate,

rights-of-way.

The other line of authority that runs out of the regional office

will be under the deputy director of tribal services. Programs included within that line of authority include transportation, planning and design, construction for transportation services, and other

tribal services such as tribal government services, human services,

and housing.

We have separated out a lot of our administrative services into

a separate organization which is responsible for providing those

services to the BIA and to the Office of Indian Education Programs,

so that the regional director can focus on two things—managing

trust assets and providing services to tribes and individual Indians.

The two deputies are there to concentrate on the specific areas

for which they are responsible, one for trust and one for tribal services. The purpose of that is to have the trust people responsible

only for trust services so that they can better deliver those services.

The agency field offices mirror what the organization is at the regional level. Again, you will have a superintendent who is responsible for overseeing the activities of tribal services and the trust

services, and then a deputy superintendent who is responsible for

the tribal services line of authority and another who is responsible

for the trust services line of authority. If an agency is particularly

small or has no trust assets to manage, it will not need to have

deputy superintendents.

Mr. SWIMMER. The Office of the Special Trustee will likewise go

through some reorganization, although principally the addition of

trust officers and trust administrators is where you will see the differences. The Office of Special Trustee is charged with the oversight responsibility of all of the Department of the Interior trust activities. That activity will continue. The oversight of those agencies

within Interior, including such agencies as Mineral Management

Service, Bureau of Land Management, Office of Surface Mining,

and others will continue to have the oversight of the Special Trustee, particularly as it affects the delivery of trust services. This activity does not change. If we can put up the chart, out to the right

you will see the Trust Review and Audit section, which is very

similar, in fact, to what some of the tribes had recommended, that

there be an independent review and audit function within the Department of the Interior or outside the Department of the Interior.

The only way that we could see that being done was to create it

within Interior and out of the Office of the Special Trustee.
8

The Office of Special Trustee will continue its operational responsibility for the Office of Trust Funds Management and the managing of trust funds and trust assets, as well as the oversight of certain improvement projects. The Office of Trust Funds Management

was moved under the direction of the Special Trustee several years

ago and has established a very quality accounting system that is

in effect today.

As I mentioned earlier, the other change in the Office of Special

Trustee is the addition of operating authority over regional and

agency trust employees. As you will see from the chart, in the regional area, we will have the deputy for trust services, a deputy for

field operations, and a deputy for trust accountability. The deputy

for field operations will be the one responsible then for overseeing

the regional trust administrators. These are folks who have a private sector or Indian trust background. They are expected to be at

the SES level, the highest level in the Government. And we anticipate being able to recruit some very quality people for those positions.

And the same is true for the trust officers. The trust officers will

be located at the agencies. One of the primary functions of the

trust officers, and I understand this has been a point of contention

in some circles, but the trust officers I would estimate at this time

that 80 percent of their work will be in addressing the needs of

beneficiaries. It is things that we do now in an office similar to a

call center where beneficiaries want to know and need to know is

their land leased, how much has been coming in on it, what is my

account balance, where am I, how are we making sure that we reduce the ‘‘whereabouts unknown’’ as much as possible, how do we

track people. When people come into the agency and need those

kinds of services today, the BIA provides that but it may not be

a single person. They may go to a realty officer one day, the superintendent the next day or someone else and whoever is available.

It may take longer than it should to provide the services.

What we are trying to create here is a trust officer who would

be the beneficiaries point of contact for trust services. That trust

officer has to have an intimate knowledge of the agency, we anticipate that they also have to work with and under the guidance of

the agency superintendent, that their work is simply an extension

of what that agency is already doing in the area of trust. It is additional staff. And if you listen to superintendents, they will tell you

that what we really need are more people and more people that understand what this trust is all about. And so we are trying to fill

that through these trust officers that we expect to have in the

agencies.

There will not be trust officers at every agency. What we are trying to do in placing these folks is to look at where our greatest

need is, particularly in terms of IIM accounts, the asset base, revenue, and that sort of thing. In some of our agencies we have very

few fiduciary trust activities.

In the next slide you will see sort of an overview of what happens

from the Office of the Secretary down through the organization. We

do not repeat this slide but I would ask that you just put it to the

side and kind of keep it available to you because, as we go through

and discuss what is on this slide, I think it will help you under-
9

stand these relationships that I have just discussed. In the Office

of the Secretary, the Secretary has designated the Deputy Secretary as being that single executive sponsor for presence. So, my

office reports to the Secretary, the Assistant Secretary for Indian

Affairs reports to the Secretary. If you want to know where the

buck stops, it is with the Secretary and the Deputy Secretary. So

there is that accountable official. And they expect that both the Assistant Secretary and myself have got to work together very closely

to make this organization work and to be responsive.

The relationships between the BIA and the Office of the Special

Trustee at the central level. You see the Deputy Director of Field

Operations for the BIA and the Deputy Special Trustee for Field

Operations of the Office of Special Trustee. As you will note from

the previous slide, these simply parallel each other, as does, as you

will see in the next slides, the regional and the agency. The deputy

directors of our respective field operations basically provide that

trust oversight management for the positions that are at the regional and the agency level as well.

At the regional, which you see is the next slide, as Aurene mentioned, you have the Deputy Regional Director for Trust Services

in the BIA, and we have a Regional Fiduciary Trust Administrator.

While the chart that you saw earlier indicates the parallel nature

of these reporting then up to the Secretary’s office, the intent,

again, is that while you have different reporting relationships in

your line management, there is the dotted line crossover and that

these offices are to be transparent to the tribes. When we have decisions that need to be made at a regional level, we are not expecting tribes to go to the regional trust officer or the regional BIA officer. We are expecting them to follow the system they follow now,

which is going to the Regional Director of the BIA. If the Special

Trustee’s Office has issues that need to be worked out, it is up to

our Regional Director there, the Special Trustees, to work that out

with the Regional Director of the BIA and to have that not as part

of the tribal responsibility. And the same thing at the agency. The

activities of the tribes should essentially not differ from what they

are today in terms of how they interact with the agencies and with

the regional offices.

If you go on down to the next slide, 14, you see at the agency

level what we are talking about, where we have the Deputy Agency

Superintendent for Trust Operations and the Fiduciary Trust Officer. As I said, the Fiduciary Trust Officer is there to provide beneficiary services primarily. He is also there to assist with the Superintendent, the Deputy Superintendent in those areas that one

might call high risk. It is not unusual for a superintendent or a realty officer or another employee of the agency to be a member of

the tribe over which the agency is acting. In those instances, a lot

of times leasing issues, sale of assets, the use of the assets may be

a conflict between the person at the agency making a decision on

that particular subject and the beneficiary. There may be a relationship, a family relationship, there may be an ownership relationship. With fractionation as it is today, the average beneficiary

that owns property has at least 10 parcels of property. It could be

that they have co-owners that number in the thousands. It is up

to the superintendent, realty officer, deputy superintendent then to
10

call upon the Special Trustee and the agency trust officer when

those kinds of conditions arise to ensure that there is impartiality

and that the duty of loyalty is transacted between the agency and

the beneficiary.

Again, we expect that the agency BIA people, superintendent,

deputy, whomever, would call upon the Special Trustee. It is not

a situation where the trust officer will go in and say, wait 1

minute, you cannot make that decision, that is a conflict of interest. We would anticipate that through the training that we are providing to the people dealing with trust that they would know when

there may be a conflict, they would know when there is a high risk

to this transaction and they need to have a third party look at that.

Again though, it is our opinion that this is a very small percentage

of the trust officer’s time and duty, that in fact the trust officer is

going to spend more time working with the beneficiary.

The CHAIRMAN. Ross, I hate to interrupt you, but we have already had one call to vote and we have got about 6 minutes left

on this one. So I am going to have to recess for about 10 minutes.

Hopefully, you will stick with us because I do have some questions

that I need to ask you. And if you are not done, we will continue

with your testimony as soon as I get back.

Mr. SWIMMER. Sure.

The CHAIRMAN. We will recess for about 10 minutes.

[Recess.]

The CHAIRMAN. The committee will be in session.

Ross, would you like to continue? And how much more time do

you think you need?

Mr. SWIMMER. We just need about 5 or 6 minutes. I am turning

the next two slides at least over to the Assistant Secretary and let

her review our timetable and BIA implementation.

Ms. MARTIN. The authority to make the changes that we need to

make to effect the reorganization was granted by the Secretary on

April 21 of this year when she signed the departmental manual

changes that changed the lines of authority for the BIA and the Office Special Trustee. Since then we have been working together,

both the BIA and OST, to put together a timetable and to coordinate our efforts to get the reorganization done.

Because our organizations are so different, the size of the BIA is

so much bigger than the Office of Special Trustee, they are going

to be able to do some of their activities before we are able to do

ours. But we have a team that is working together to try to coordinate when we roll out the reorganization so that we roll it out in

the same places as the same time.

Implementation has begun in some small ways. One of the things

we have begun to do is to take the existing employees that we

have, look at where they are located, an develop what we call a

crosswalk, putting them in the new organization in the correct line

of authority. It is as simple as recoding them in the computer, but

because we have over 9,000 employees, it takes a long time to do

that manual work. We have also begun to change some of the

names. The Deputy Commissioner of Indian Affairs name change

was effective last week. He is now known as the Director of the

BIA. The actual reason for that is because we wanted to make it
11

standard with the directors of the other bureaus and the nomenclature that we use throughout the Department of the Interior.

We are undertaking the following activities at the BIA to implement the reorganization right now:

We have advertised a number of the positions that will report to

the new Deputy Assistant Secretary for Information Resources

Management. These positions are located at Herndon, VA, and Albuquerque, NM.

We have completed our position descriptions for the Deputy and

Regional Directors and the Deputy Superintendents for Trust. We

anticipate advertising for our first agencies that will be rolled out

very soon.

We have received all of the reorganization charts, staffing plans,

and crosswalk outlines from all of our regions and agencies and we

are reviewing those now. We expect to begin transferring not location, but lines of authority and functions in two agencies, Concho

and Anadarko, both located in our southern plains region, in July

of this year. Other regions and agencies will follow and will coordinate with OST in their roll out so that we roll those out at the

same time in the same areas.

Mr. SWIMMER. Now as the Assistant Secretary has said, we are

going to do this as a team and we are going to try to continue that

approach throughout the time it takes for reorganization and full

implementation, and even after that, of course.

The Special Trustee’s timetable, we have appointed acting managers at all levels within the Special Trustee’s Office. We expect

trust officers to be first trust officers, which would perhaps be two

or three to be hired later this year, perhaps as early as September

or October. We have started recruitment activity with advertisements in various trade publications as well as the Government

publications for the Regional Trust Administrator’s positions, of

which there will be six, the Chief Information Officer, Deputy

Trustee for Accountability, and Trust Program Management Center.

The remaining trust officers that would go into the regions, as

I mentioned before, we expect to begin placing those after our two

pilot agencies, which are anticipated to be Anadarko and Concho

in Oklahoma, we will place these trust officers in accordance with

certain conditions, particularly looking at the recurring income that

comes into that particular agency, the number of IIM accounts they

have, and the concentration of account holders in a particular agency, as well as just the general workload issues that affect that

agency.

So we are moving. Things are happening. There are an awful lot

of things going on. Just to recap. We have the three major areas

that we are working with, the comprehensive trust management

plan that gives us a roadmap to going through a more effective

management of the trust and meeting a lot of those concerns that

have been voiced in the Cobell court, we have the ‘‘To Be’’ re-engineering of the trust business processes to try to give us a standardized business process wherever possible, so that when we do introduce information technology systems that these will be workable

and that they can handle the processes, and the reorganization,
12

which we believe allows us to have the compatibility then to carry

out the trust management plan and the re-engineering.

So that concludes my remarks. I would be happy to respond to

any questions that you may have.

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

The CHAIRMAN. Okay. Thank you. I do have some questions. Before I start though, we have been joined by Senator Conrad. Did

you have an opening statement, Senator?

Senator CONRAD. I do. I would like to just put that in the record

if I could, Mr. Chairman, so that we could get to questions.

[Prepared statement of Senator Conrad appears in appendix.]

The CHAIRMAN. It will be included in the record. Good.

Well, it appears that you have put a great deal of thought and

effort into this structure, Ross and Ms. Martin. Let me just ask you

a couple of general questions first. You remember the ill-fated

BITAM proposal a couple of years ago. To play the Devil’s advocate, for those who might say this looks like BITAM in a different

suit of clothes or something, can you quickly describe the differences? One, of course, was that tribes had little prior knowledge

about BITAM. It looks like after 45 meetings, I would not think

that they could say that again. But tell me in a nutshell what the

difference is when people say this looks like to separate structures

just like BITAM.

Mr. SWIMMER. Go ahead.

The CHAIRMAN. Aurene, go ahead.

Ms. MARTIN. Well, it is actually significantly different from the

Bureau of Indian Trust Asset Management proposal. I think the

similarity is that the purpose behind the Bureau of Indian Trust

Asset Management was to place an emphasis on the delivery of

trust services. So there is an attempt to remove all of those services outside of the BIA so that there could be a concentration on

providing them. But one of the things that came out of our discussions with the Joint DOI-Tribal Trust Task Force was the tribes

felt vehemently that trust services should never be removed from

the BIA, in fact, they even resisted the idea that we would separate

out between two deputy assistant secretaries trust services and

other tribal services or non-fiduciary trust services.

What we have done is we have kept the structure of the BIA at

all levels and all of those services continue to be offered at agency,

regional, and central office levels within the same Bureau structure, but they have been separated within that structure so that

people who do trust services will only do trust services, and the

people who do other non-fiduciary tribal services provide those

services only. So they are not separated into a whole other structure or bureau within the Department of the Interior, but they stay

within the BIA. Budget and all of those other administrative items

are developed cooperatively and together, which was our main concern with the Bureau of Indian Trust Asset Management.

Mr. SWIMMER. I think those are very key points. In addition to

that, I would say that it continues the basic functions of the Special

Trustee’s Office and the BIA, continues those to separate organizations. It creates a focus that I think was the intent of the Secretary

in the BITAM proposal, was to create a greater focus on the trust.

And by the realignment within the BIA, I think that happens. And
13

with the introduction of trust officers, that allows that oversight of

the OST to be down to the agency level I think is accomplished.

The other thing is that the oversight of the Special Trustee for

the entire Department continues under the direction of the Special

Trustee. It is not merged in any other organization. So you still

have that independence within the Special Trustee’s Office and the

responsibility for providing oversight to the entire Department for

trust operations.

The CHAIRMAN. Okay. Thank you. This is not a real big issue but

it did kind of just jump out at me. You know we have a terrible

deficit in a lot of Government agencies are having tough times

struggling this year because of the deficit. But on page 6, where it

says we plan to grow, not shrink, I would be careful, you might

want to reword that sentence because I think some of my colleagues may start worrying.

On page 5, explain if you could just really quickly, this Memorandum of Understanding that you have agreed to with the Indian

Educators Association, AFL–CIO, and so on, what does that consist

of?

Ms. MARTIN. Before we undertook the reorganization, we met

with the unions for the employees for the Office of Indian Education and the BIA and got their agreement to move forward with

the reorganization before we started it.

The CHAIRMAN. And that was part of when you mentioned, or

perhaps Ross did, about not losing any jobs?

Mr. SWIMMER. Well, in that instance, any time there is a reorganization of any type, the unions have to be consulted and these

were the unions that were appropriate to the consultation and they

basically signed off on it. Of course, they wanted assurances like

that, is anybody being moved, are they going to lose their jobs,

what else are you going to do. So that was all given to the unions

and they were satisfied.

The CHAIRMAN. Okay. Fine. Thank you. That is good. Also, because your organization is somewhat forward-looking, your testimony indicates that the thrust will be service delivery, and I certainly support that. But service delivery always has a cost to it. I

am a little concerned about the funding to pay for any reprogrammed money from unexpended Bureau funds, or how are you

planning on handling the cost of delivering more services?

Mr. SWIMMER. The additional cost for the reorganization trust reform is in the fiscal year 2004 budget. It is, as all the other trust

reform activities are, it is separately funded money. It does not

come out of the existing program.

The CHAIRMAN. It does not? Okay. Good. You recently solicited

nominations for the Trustee’s Advisory Board. What is the status

of that effort?

Mr. SWIMMER. We are still receiving nominations. We have approximately I think seven or eight from Indian country that qualify

for the various five positions. There are four that are private sector

oriented positions, could come from Indian country as well but we

do not have any specifically for those, but that is the two people

who have the fiduciary trust background and an academic who has

trust management experience.
14

The CHAIRMAN. I see. Good. I know you were criticized some, as

many people have been, about using private sector tools; that is,

accountants, management, and so on, investment experience. But

I think, frankly, that we almost have to do that in my view. I know

that you have taken a little bit of heat about that, but let me share

the heat with you. I do not think that we can do it just with Government entities alone, that we have got to rely on some experts

outside of the Government agencies.

Do you think that there will be under this restructuring plan any

kind of turf problems, for lack of a better word, or if there is a disagreement, let us say tribal members disagree with the decisions

of the Bureau or the OST, is there any possibility that we are going

to get caught in a cross-fire, one being played off against each

other?

Mr. SWIMMER. I do not think there could be any worse turf problems than we have had in the past.

The CHAIRMAN. I will drink to that.

Mr. SWIMMER. The Assistant Secretary Aurene Martin and I both

have a great deal of experience in Indian country and working on

Indian issues, and particularly working on this particular trust

issue. It is my belief that working together we are going to be able

to put a lot of those turf battles aside and that, in fact, if anything,

we are going to approach this as a team and, as I explained before,

to the extent we can make this happen, there will not be the separation but rather it will be a team project between the Special

Trustee’s Office and the BIA to make the improvements that are

necessary and to enhance trust operations throughout the system.

The CHAIRMAN. Well I appreciate that team approach. Obviously,

we are going to be part of that team, too. The members of this committee are very interested in resolving this problem. I look forward

to working with you, and I know Senator Inouye does too, as we

try to move forward.

Senator Conrad, did you have any questions you would like to

ask before we move to the next panel?

Senator CONRAD. I do. Mr. Chairman, thank you. First of all, I

want to thank Mr. Swimmer and the Office of Special Trustee and

representatives of the Bureau for being here. I appreciate the work

that they have done. Let me just say, I do not know how many

times I have been at this hearing dias and heard others present

similar plans and all of it has come to naught. I will tell you honestly, it leaves me with zero confidence that anything fundamental

is going to change here.

Over and over, we have had plans with changes in organization

charts and words about how they were going to finally get their

arms around these problems. And over and over, we are left with

the same old mess. It reminds me very much of rearranging the

deck chairs on the Titanic. We just keep plunging ahead and somehow nothing fundamental changes.

I look at this effort and it is impossible for me to know whether

this has any prospect for success or not. But I have to tell you, my

confidence has been so shaken by previous events. This is not directed at the two of you. I do not know whether you will be successful or not. I hope very much you will, but I have grave doubts. And

the gravest doubt I have is that, to me, one of the fundamental
15

problems is the fractionalization or fractionation, as some call it, of

ownership interest. To me, this is right at the heart of the problem.

And if we do not have a strategy and a plan to deal with that fundamental, I do not think we will ever catch up with this problem.

My own conclusion is this, Mr. Chairman. I have a background

in accounting and business management. I would say to you, I believe we have got a run away train on our hands. I believe the fractionation or fractionalization, as I call it, issue is going to swamp

whatever system is devised. And if we do not find a way to address

this issue, I do not think we can ever catch up with the problem.

And I do not care how well-intentioned the people are or how capable they are, we have got a dynamic occurring here where the interest gets fractionalized or fractionated and the result is a nightmare, an absolute nightmare for anybody to manage. You know, we

just keep letting it go on. We do not go to what I think is right

at the heart of the problem.

So the question I would have for you is, do you have a plan to

deal with that issue? And if not, why not? And if not, what can persuade you that we have got to attack that fundamental dynamic?

Ms. MARTIN. Well, we do have a plan and we do recognize that

fractionation or fractionalization is the problem that is plaguing

the reorganization, any reorganization effort, because unless we address that, things will continue to go out of control. But one of the

things we also are looking at is the fact that all of our systems are

interrelated and fractionation affects our probate system, it affects

our land title records system, and it affects our accounting systems.

What we have done in past years is we developed an Indian

Land Consolidation Pilot Project, which is located in northern Wisconsin, and it is a project whose purpose is to acquire fractionated

interests of land. It has been very successful. We plan on expanding that project nationwide and looking at the types of parcels that

we are purchasing, the fractionated interests, and trying to be

wiser about the fractionated interests that we purchase and looking

at purchasing more of them. For people who want to sell their

fractionated interests, we have always had a number of willing customers, when we have been able to target our funding and get our

funding as necessary, we have been able to buy as many parcels

as we have money.

Senator CONRAD. Can I ask you, when do you intend to take this

nationwide?

Ms. MARTIN. As soon as we can. We are trying to finalize the

plan for the national roll out now. But I think Mr. Swimmer also

has some comments regarding fractionation.

Mr. SWIMMER. I would hope that we could see a national program using whatever moneys we have left from fiscal year 2003

and the 2004 budget, keeping in mind that those are fairly minuscule amounts when we are talking about purchasing these

fractionated interests. If we were to go down the track of simply

that as the only solution is purchasing the interests, we are talking

about a $1- to $2-billion expense or cost. The Indian Land Consolidation Act allows us to do that, to spend the money to buy it, and

then transfer the title over to the tribes. We think there is also an

element here for the tribes. We are working with tribes as we do

the buy-outs that we can do with the limited funds available. In
16

some instances, tribes have their own programs which we can dovetail into and expand on with the money that the Bureau has.

The solutions to fractionation today are the same solutions that

were announced in 1938 and actually were discussed in 1900. We

have articles that were written by scholars back then and it said

fractionation is the Achilles heel, you are going to die from it. We

know that, and we are. If it were not for the limited bit of computers that we have today, we would have more than the disaster we

already have. Just to give a few statistics. We have currently as

a result of the 1994 reform act, we have to maintain accounts for

every interest holder. There are 4 million interests and 400,000 interest holders, each of those having an average of about 10 interests scattered all over the country. We have over 19,000 account

holders today that have less than $1 in their account and no activity for the past 18 months, yet we have to maintain those on a set

of books and report periodically to those account holders. We have

people who we call ‘‘whereabouts unknown,’’ because, frankly, they

are lost. We have returned envelopes from them with ‘‘addressee

unknown,’’ ‘‘no forwarding address.’’ And we have at least four different agencies and private sector companies that are looking for

these people constantly. Over one hundred of these high accounts

have hundreds of thousands of dollars, millions of dollars in them.

Senator CONRAD. Any of them named Conrad? [Laughter.]

Mr. SWIMMER. I will check the list.

The CHAIRMAN. If you would yield for 1 moment, Senator.

Senator CONRAD. I would be happy to yield to the Chair.

The CHAIRMAN. The cost for fiscal year 2004 is going to be about $21 million. I may have my numbers wrong, but I understand if

this were done nationwide, which we need to do eventually, it will

cost over $1 billion. Is that one of the things that is really holding

it up, the fact that we are not providing enough money to be able

to expand it?

Mr. SWIMMER. If that were the only solution. Congress has an opportunity here as well. And obviously working with your staff and

others on the House side, there are several things that I think

could be done that are currently under discussion.

The CHAIRMAN. But the bottom line is that when you do the buyouts, you have got to come up with an awful lot of money.

Mr. SWIMMER. That is right. If the buy-out is the plan, then in

order to reduce the fractionation just with that one solution, it is

in excess of $1 billion to bring it down to a reasonable level.

Senator CONRAD. That is exactly where I was headed. I want to

say this, if I could. To me, we are going down a blind alley because

we are not going to come up with $1 billion or $2 billion for this

purpose, not with the extraordinary needs that are out there for

health care, for housing, for sanitation, for law enforcement. So

that is not going to happen. And the Chairman is right, the Federal

budget deficits, we are going to have a deficit on a unified basis of

over $400 billion this year on an operating basis between $500 and

$600 billion this year. So I do not think that is a fruitful promise

of a solution. And I get a feeling, Mr. Swimmer, that you sense

that as well. There has got to be some other creative things that

we could do. I sense from your comments, Mr. Swimmer, that you

are thinking of something that would involve the tribes and their
17

resources as well and the resources of others who might be interested in the buy-out. I do not think this should just be on the Government’s shoulders here. There is an economic interest in accumulating those fractionated interests and somehow we have got to

capture the power of that. This is going to eat us alive. I do not

care how big a computer one has or how powerful, the fundamental

problem is—I heard you say you have got 19,000 accounts of $1 or

less, I think we ought to give a legal notice, a generalized legal notice and we ought to close out those accounts. It does not make any

sense to maintain 19,000 accounts with $1 or less. That serves no

one’s interest. It just complicates the situation. And I bet you we

have got tens of thousands more that have less than $25. Would

I be right?

Mr. SWIMMER. Absolutely.

Senator CONRAD. Do you have a number on that, Mr. Swimmer,

on how many accounts would we have that have less than $25?

The CHAIRMAN. If I might interject. I understand there are hundreds of thousands; is that correct? And by the way, those $1 accounts, that costs roughly about $200 a year to do all the paperwork to administer those $1 accounts.

Mr. SWIMMER. Yes; most of the accounts, frankly, are very, very

small accounts, I mean in pennies. It is not unusual to have 2,000

people own an 80-acre tract. You lease it for $6 an acre, you divide

$480 among 2,000 people, and you get less than a penny. Under

the law, we are supposed to invest that less than a penny, pay interest on it, account for it, and send out a statement every quarter.

There are some things that you can do, and the operative word

is ‘‘you,’’ that we need. We need some relief and some fix on the

1994 act, because it gives the impression that there is this trust

like a normal trust, that you actually have assets in this trust.

Many of these fractional interests are worth less than a penny

themselves. The piece of ground you could not even measure because it is so tiny if you were to partition in kind. But those are

the kinds of things that I think we could through collaborative

work with the committee and Congress and the Department perhaps fashion some solutions for some of it.

Senator CONRAD. I am going to complete on this note, if I could,

Mr. Chairman. I would like for the committee to give a formal request to Mr. Swimmer to consult with tribes and to give us a recommendation on a series of action steps to be taken by us to alter

the law to start to break through on this question. I just want to

make clear, it may be controversial but I think it should not be

controversial, we ought to take these very small accounts, we ought

to give legal notice, we ought to give 90-days, we ought to spread

the information widely, and then we ought to collapse those accounts, take the money and use it for broad Indian people’s welfare. Because otherwise, this thing is going to eat us alive.

The CHAIRMAN. It already is.

Senator CONRAD. And there is no way to then focus on the larger

amounts of money and the larger problems to begin to solve this

problem. We have got to cut the chaff.

The CHAIRMAN. Yes; it is getting worse with every generation of

youngsters that have an interest in the land.
18

Senator CONRAD. And it is in no one’s interest. Nobody can bene- fit by an account with $18 in it. I think it is time that we really

get serious about bold steps, bold steps to deal with these problems.

The CHAIRMAN. We will take your recommendations off the tape.

I will check with our vice chairman, Senator Inouye, and with his

agreement, we will do that. We will send you a letter, Mr. Swimmer, asking for some recommendations on how you think it could

be solved.

Mr. SWIMMER. If I could just quickly address this point, though.

We have put together a working group at Interior and we have also

put out a Federal Register Notice inviting tribes to send representatives to us who would be interested in working on this problem.

That working group should be put together within the next thirty

days or so and it would follow very much along the lines of what

you are suggesting, it is to come up with those recommendations

then to give the committee. We would be very happy to do that and

look forward to working with you on this.

The CHAIRMAN. And you might also look up S. 519 I believe it

is that we just reintroduced, to establish a tribally-owned bank, the

tribes themselves could belong to, that would be authorized to perform land repurchases, too.

Senator CONRAD. Could I ask one other question as part of this,

Mr. Chairman.

The CHAIRMAN. Yes.

Senator CONRAD. No. 1, I hope you put this on a fast track, not

a slow track. That you ask this group to meet and make recommendations quickly, because otherwise the moments get lost

around here. No. 2, that you also give us a recommendation— again, $21 million and a $1- to $2-billion problem, we are never

going to get the job done. We also need as part of the recommendation what creative ways could be devised using the economic interest of those who might acquire the fractionated interest to pay for

this. I hope that that would be part of the recommendation.

Mr. SWIMMER. We will certainly take those under consideration.

If I could, I would just make one caveat to all of this. That is, as

long as we are involved in this litigation and the Cobell court is

intent on going forward as it is, we do have issues regarding our

responsibility as a trustee no matter how small the piece of property is. So we will continue working on that and at the same time

continue working with the committee on ways in which we can

carry out that trust more effectively.

The CHAIRMAN. Okay. I thank you.

Anything further, Senator Conrad?

Senator CONRAD. Nothing further, Mr. Chairman.

The CHAIRMAN. Well thank you for appearing. I am sorry we had

to hold you up because of a late start and the votes. But we will

follow up with that recommendation after we talk to Senator

Inouye.

Mr. SWIMMER. Good. Thank you.

The CHAIRMAN. We will now move to the second panel and try

and give them equal time, although we are going to be a little

tight. We have five members on the second panel. Tex Hall, president, National Congress of American Indians; John Berrey, chair-
19

man, Quapaw Tribal Business Committee; Clifford Lyle Marshall,

chairman, Hoopa Valley Tribal Council; Keller George, president,

United South and Eastern Tribe; and Richard Sangrey, acting

chairman, Intertribal Monitoring Association, from Albuquerque.

Since we have so many, as I mentioned, I want to give equal

time for the two panels, but because we have so many in the second one, I am going to have to ask you to abbreviate your comments down to about 5 or minutes so we do have some time for

some questions. I do not have anybody to take the gavel for me

here and I have a conflict, too, and I do not want to just leave you

here talking to the wall. So try and abbreviate as best you can.

We will start with President Tex Hall. Go ahead, Tex.

STATEMENT OF TEX G. HALL, PRESIDENT, NATIONAL CONGRESS OF AMERICAN INDIANS, WASHINGTON, DC, ACCOMPANIED BY JOHN BERREY, CHAIRMAN, QUAPAW TRIBAL

BUSINESS COMMITTEE, QUAPAW, OK; CLIFFORD LYLE MARSHALL, SR., CHAIRMAN, HOOPA VALLEY TRIBAL COUNCIL,

HOOPA, CA; KELLER GEORGE, PRESIDENT, UNITED SOUTH

AND EASTERN TRIBES [USET], NASHVILLE, TN; AND RICHARD SANGREY, ACTING CHAIRMAN, INTERTRIBAL MONITORING ASSOCIATION, ALBUQUERQUE, NM

Mr. HALL. [Greeting in native language.] Senator Campbell, Senator Conrad, members of the committee, thank you for giving me

an opportunity to testify on the proposed reorganization of the BIA.

I listened very intently to the comments and the questions from the

Department of the Interior, BIA. As the committee knows, I am

also the chairman of my tribe, the Mandan Hidatsa and Arikara

Tribe, a large trust asset tribe with a large amount of IM account

holders, and I am also from the Great Plains or the Aberdeen area

where 40 percent of all of the trust accounts in the country are in

the Aberdeen area. But today I am going to testify on behalf of the

National Congress for American Indians.

I would like to express my continued appreciation to you, Chairman Campbell and Senator Conrad, for all your hard work and

your dedication to protect the rights of tribes and individuals.

Among the most important of these rights is the Federal trust responsibility. When we signed our treaties we gave up millions of

acres of land, our economic engine, many of which were our sacred

homelands. And for more than a century we have been forced to

put the management of our trust resources in the hands of the

United States Federal Government. And we know so far the situation has been a mess. In our eyes, it shows that it is hard to trust

the Department, the agency based on this historical mismanagement. In many instances, like today, we have to turn to our friends

in Congress for your help. You have stood by us in the past, and

today we are asking you to stand by us again.

The proposed reorganization of the BIA we believe is an affront

to our sovereignty. It is an affront to the fundamental concept of

consultation. And it violates the very essence of government-to-government relationship. We had a Task Force and the Government

walked away from the Task Force last fall and we have not met

since. I would like to state for the record that on May 29 the tribes

will be convening a task force. If it is by ourselves, it will be by
20

ourselves, because we have a vested interest—there are assets in

our accounts.

Tribal leaders, more than anyone, understand that the BIA must

change the way it conducts business. We are invested in their process because it affects us like no one else in America. We not only

want but need to see successful change and improvement within

the BIA. So we come to you today with a simple message, a

straightforward request, and an alternative approach for Congress

to consider.

First, our message is that the Interior Department’s attempts to

reorganize are wrong. Our request is that Congress stop it. The reorganization is wrong for a number of reasons. The foremost concern to us is the fact that we were not consulted since last fall. And

as you know, the Department went ahead with the reorganization

plan by approaching the Appropriations Committee. Only later did

we find out about their plan. We believe this is a breech of the duty

to consult, and they have an executive order that requires them as

a trustee to consult, and given that it is our trust resources that

are at stake, a possible breech of that trust responsibility in itself.

Second, the plan will not work. As the committee knows, the Department has already invested millions of dollars to produce an ‘‘as

is’’ study of trust services, a study which is supposed to drive the

‘‘to be’’ phase of re-engineering of those trust services. Now, however, the Department wants to cut out the re-engineering phase

and just start reorganizing, as we have seen in the charts today.

I ask, what was the point of the ‘‘as is’’ study? Of the millions of

dollars that were spent? It seems to us the Interior Department

and the BIA could have saved Congress and Indian country a

whole lot of money and headache by telling us that trust management cannot have been and never will, we are not going to listen

to you.

Surely, it makes no sense to go ahead with the reorganization before getting the results of its own management study. The new BIA

organizational structure must be driven only after the tribes and

the Department officials have at least had the chance to study this

‘‘as is’’ study. Anything else is putting the cart before the horse.

Then there is the fact that the Department’s reorganization plan

is too expensive, as was echoed by your comments. So not only do

we think the Department’s reorganization plan will not work, but

to add insult to injury, we, the tribes, are being asked to pay for

it. Right now, Interior is asking Congress to nearly double the

budget for trust management in the Office of Special Trustee—

$123 million increase to a projected annual budget in fiscal year

2004 of $275 million. Some $71 million of that comes right out of

tribal pockets, $32 million comes out of school construction. You

could not ask for a more symbolic and ironic example of the Government’s callous indifference to our needs. We are literally being

asked to pay for the Government’s mistakes with our children’s

education money. We do not think this is right that our children

should be forced to continue to study in aging and crumbling school

buildings in order to pay for the reorganization plan. If the Department needs more resources, then, at the very least, they should not

come out of BIA programs.
21

In our view, an effective organizational change must contain the

following three elements:

No. 1, a clear definition of core business processes accompanied

by meaningful standards for performance and mechanisms to ensure accountability. You have to have standards, otherwise it does

not matter.

No. 2, responsive systems that fit with service delivery at the regional and local level where tribal governments interact with the

Department.

No. 3, continuing consultation, an effective and efficient means

for on-going tribal involvement in establishing the direction and

the substance of trust reform.

The multitude of organizational charts that accompany the plan,

as we saw, shows trust officers at nearly every level of the BIA’s

agency offices. The role and authority of these officers has yet to

be fully explained. The fact is that Indian country has not had the

chance to digest and understand what exactly is the BIA doing. I

would respectfully ask, can the committee ascertain what is happening with their reorganization plan, because we cannot.

Today there is a great cry going up across Indian country saying

we gave away our land for this, for this reorganization and this

mismanagement and lack of consultation? We gave up millions of

acres of land for that?

Last, in my testimony NCAI makes a number of specific recommendations regarding title, leasing, and accounting issues. We

also restress the need for accountability. It is our money. We also

offer an alternative approach to reorganization that would create a

structure with three major divisions under the Assistant Secretary:

No. 1, trust funds and trust resource management; No. 2, trust

services such as law enforcement, social services, and road; and No.

3, Indian education. We also recommend the Office of Fund Management and other offices under the Office of the Special Trustee

be phased out and moved back to the BIA. This is what the 1994

Indian Trust Reform Act says.

So in conclusion, we are not opposed to reorganization, we simply

want to do it right and be at the table. We request that Congress

put an immediate stop to the Department’s implementation of its

reorganization plan. We would further request that Congress consider placing language in the fiscal year 2004 appropriation bill

that prevents the Department from spending money on any reorganization effort unless it has consulted with Indian country. When

Indian Country has been consulted and we have rolled up our

sleeves, we have been able to come up with a solution together. We

will do that. All we are asking today, Mr. Chairman and Senator

Conrad, is for Congress to give us that opportunity. Give us that

opportunity to re-engage. Have the Department re-engage in consultation with the tribes. I thank you for this opportunity to

present testimony and I will be happy to answer any questions

after the panel has presented.

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

The CHAIRMAN. Thank you.

Senator CONRAD. Mr. Chairman, might I just make one comment

before we go on?

The CHAIRMAN. Sure.
22

Senator CONRAD. I am going to have leave for another appointment. I would just like to rivet the point that Chairman Hall has

made. My own experience with Chairman Hall is extensive and we

have dealt with some incredibly complicated and controversial

issues. Without exception, sitting down together we have been able

to work things out, without exception. And when he says he is

ready to sit down and others are to work things out and to come

up with a solution, my experience is he is good to his word. And

so I would hope that we would take that very seriously. I thank

the Chairman.

The CHAIRMAN. I agree. The committee has worked with Tex

Hall a long time and I know he is a person of conscience and commitment. As long as we have stopped, before we go on, let me say,

and I am not trying to defend the Bureau, but the Bureau is

caught between a rock and a hard place. They are caught between

the tribes wanting more input, even after 45 consultations, apparently those consultations did not deal with this reorganization, but

they have been held in contempt twice by the Lamberth court and

they have been prodded pretty hard by the courts to do something.

And so when they do something, they run into a buzz saw. When

they do not do anything, they also run into a buzz saw with the

courts. So, I know that it has not been easy for them.

It seems to me we have got to focus time on this problem of the

trust funds, but we are spending more and more time also on fractionation. I do not know how, if the litigation keeps being as contentious as it is, how we focus on one unless the lawsuits are

stayed or held up for a while. What is your position, and maybe

you do not have one, on putting a stay on that litigation so that

they can focus on fractionation?

Mr. HALL. Senator Campbell and Senator Conrad, I think that

possibility exists if there is mutual consultation. We cannot do it

if we are miles apart. And right now, we are miles apart. We are

not talking to each other, we are not consulting with each other,

and we are not coming up with that possibility you just recommended. If we would jointly do that and that was a joint recommendation, I think we could actually come up and move that.

The CHAIRMAN. Out of all of the consultations they have had, I

heard the number 45, I certainly was not at any of them although

staff was at some, you mentioned none since last fall, did any of

those consultations deal with reorganization that we are hearing

today?

Mr. HALL. They dealt with reorganization, you know, like we

talked about the Under Secretary, we talked about the trust officers, and then we started talking about standards, we started talking about oversight accountability, and then it went South.

The CHAIRMAN. Okay. I may get back with you, Tex, to ask some

more questions.

But let us move on now to John Berrey. John, same thing, your

complete testimony will be in the record, if you could condense your

statement, I would appreciate it.
23

STATMENT OF JOHN BERREY, CHAIRMAN, QUAPAW TRIBAL

BUSINESS COMMITTEE, QUAPAW, OK

Mr. BERREY. Okay. I will. Mr. Chairman and Senator Conrad, I

appreciate your inviting me to speak to you today. Like you said,

my name is John Berrey, I am the chairman of the Quapaw Tribe

of Oklahoma and I am also the vice chairman of the Intertribal

Monitoring Association. I believe my role today is to provide a perspective of the current reorganization in light of my active collaborative involvement in this ‘‘as is’’ and now the ‘‘to be’’ re-engineering phases of trust reform. I want to make it clear that I have a

positive outlook, I am also engaged, and I have committed much of

my life to creating a better system. I am not a rock thrower, I am

not negative; I do not always agree, but I have been taught by my

folks that when change is coming about and you do not agree, you

provide positive input and hard work to try to work things out. I

believe that Indian country is married to the Department of the Interior for life and the only way we can work these things out is to

work together.

So what is ‘‘As Is’’? The ‘‘As Is’’ project was last year’s documentation of current trust management business practices. I was

on a team of dedicated people that travelled throughout Indian

country interviewing over 1,000 hard working people who provide

trust services to Native Americans and tribes at every level, every

day. We basically took a snapshot of how the DOI and some tribes

are performing trust services. We identified in detail how they do

their jobs and how the business processes vary from region to region and agency to agency. It was tough work. I was away from my

family and my tribe 204 days last year, but I met a lot of dedicated

people who are dedicated to serving the Native American people.

The detailed ‘‘As Is’’ work product has provided us a map and a

basis for the ‘‘To Be’’ re-engineering project.

So what is ‘‘To Be’’? This is the current project that will redesign

the processes and workflows that make up much of the services

provided by the United States to Native Americans. This re-engineering will create a massive change and I believe congressional

oversight is necessary at each phase to ensure that the trustee delegate, the DOI fulfills the trust responsibility of the United States

to Native American tribes and individuals.

I am a leader of the tribal representatives of this re-engineering

team. We have a great responsibility not only to participate in the

development of these new processes, giving our perspective, our expertise, and our input, but the added responsibility to inform Indian country of our progress and any impact these massive management changes may have on the daily life for the beneficiary. To

date, we have had several meetings and we have really just begun

the task. Re-engineering is not just duct taping or cobbling a system together with bailing wire, it is a total analysis and rebuilding

where needed. It requires that we use our imagination to create as

well as our ability to extract the best practices identified in the ‘‘As

Is’’ model and implement those practices in a redesigned beneficiary centric service delivery model.

So what is beneficiary centric service? For us, it is our mission

as tribal representatives to the ‘‘To Be’’ team, it is the mission of

the ‘‘To Be’’ team. I believe that beneficiary focus is a mission of
24

tribes, individuals, Secretary Norton, Deputy Secretary Griles, the

Special Trustee Chief Swimmer, his deputy Donna Erwin, and all

the respective employees. The definition of beneficiary in this context is: Tribes and individuals, and not just individual IIM account

holders, but also those families that stand behind those account

holders and the unborn future beneficiaries that we are trying to

provide stewardship for.

So why reorganize before we re-engineer? That is a question that

people ask me daily and I think my answer can shed some light

on it. Last year while documenting the current DOI management,

it was very clear that the DOI has a systemic problem causing

much of the delays in trust service delivery. It was not caused by

a single decision or individual, but it was created over a long evolutionary process that developed over time. The problem we identified was that the DOI wears so many different hats and has so

many conflicting responsibilities it often has problems making critical and final decisions on a timely basis. The regional directors had

developed over time kind of an autonomy that resembled small

fiefdoms and the central office was extremely disconnected with the

needs of the regional staffs as well as the beneficiary.

So, after this long last year that we went through and partially

fruitful discussions with the Task Force, I think the DOI decided

that they had to make some changes. Are the changes that are described in the new Department manual going to help? I think in

some ways they are. In this line authority, this accountability, it

is the right step. But there are a lot of issues that still concern me.

What are the effects on the promotion of self-governance and selfdetermination? What are the effects at my agency that desperately

needs resources? When is the issue of lease compliance and enforcement going to result in action at the local level? When can I

get the backlogs in probate for my people caught up? When are my

fee-to-trust applications going to be signed? Without new trust

land, my tribe is condemned to live in America’s largest EPA

superfund site. When is the DOI going to replace the old and worn

out LRIS system with the updated version of TAAMS, the 1.49, so

we can at least have a consistent platform that we can transition

to a better systems architecture?

These are just a few of my concerns. But I commit that I am willing to engage and diligently work with the tribes, the individuals,

and the Department of the Interior to address these issues. I am

willing to work and work hard at fixing these problems. I think it

is also important that we not only improve the lives of the beneficiaries, but we need to create a better Department of the Interior

so young Indian people in this country who have interest in participating in the stewardship of Native America are willing to work at

the Department, because the bench strength at the Department is

weak, they are having trouble finding people to apply for jobs

there, and if we create a better Department, we could create some

opportunities for Indian people to participate in the stewardship.

So with that, I will finish. If you have got any questions, I will

answer them afterwards.

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

The CHAIRMAN. Thank you. We will just go as you are listed on

the witness list. So we will now go to Clifford Lyle Marshall.
25

STATEMENT OF CLIFFORD LYLE MARSHALL, SR., CHAIRMAN,

HOOPA VALLEY TRIBAL COUNCIL, HOOPA, CA

Mr. MARSHALL. Thank you, Mr. Chairman, members of the Committee. I would like to submit written testimony for the record.

The CHAIRMAN. It will be included in the record.

Mr. MARSHALL. My name is Clifford Lyle Marshall and I am the

chairman of the Hoopa Valley Tribe of California. It is an honor

and a privilege to testify before you today. I am here representing

the Pacific Region Tribal Trust Reform Consortium, created by

seven tribes in 1997. These tribes are the Hoopa Valley Tribe, the

Karuk Tribe of California, the Big Lagoon Rancheria, the Yurok

Tribe, the Redding Rancheria, the Guideville Rancheria, and the

Cabazon Band of Mission Indians.

This Consortium has worked together with the BIA Pacific Regional Office to create a unique, successful, and mutually beneficial

relationship. The Pacific region, or California, has historically been

the lowest funded BIA region in the United States. This historical

reality has compelled tribes wanting to develop their governments

and provide much needed services to rely on flexibility in budgeting, to find other sources of income to supplement under-funded

budgets, and, basically, to do more with less.

I am here today to ask that the relationship and the agreements

among the Consortium tribes and with the Pacific Regional Office

be preserved and, if I may say so, protected by establishing a pilot

project that maintains the working relationship with the Consortium tribes and the regional office. In 1997, the Consortium tribes

sought to work together with the regional office to address many

of the issues that the Department of the Interior is still wrestling

with today in its attempts to address trust asset management. A

key component of this successful relationship is the BIA’s reliance

on the tribe’s capabilities to manage trust programs and provide

trust services to their members. An agreement between the Pacific

Regional Office and the Consortium was signed in 1998 that defined the roles and responsibilities of the regional office as it related to the Consortium tribes and a process for participation in the

Consortium. It created a BIA employee selection and evaluation

process, a funding process through the regional office, a joint oversight advisory council, a process for developing ‘‘measurable and

quantifiable trust management standards,’’ methods for resolving

disagreements and disputes, and, finally, a participatory process

for annual trust evaluation. These processes were further defined

in March of this year.

I am not suggesting that the BIA system remains status quo. But

the BIA today is not the BIA that existed when the breaches of

trust occurred that are the basis of the Cobell case. In many parts

of Indian country the BIA has evolved, as tribes have evolved, over

the past 30 years. This evolution has occurred because the SelfGovernance Act and the 1994 amendments to the Indian Self Determination Act provide flexibility in developing tribal budgets to

meet tribal priorities and give the BIA the flexibility to address

those budget requests with the limited funds that are provided.

Tribes then have the added flexibility of matching those funds with

tribal funds or other funds.
26

The DOI trust reform proposal, however, appears to be in direct

opposition to this flexibility that has allowed for the development

of the most progressive reform of trust asset management to date

under self determination and self-governance. I cannot imagine

that any Member of Congress that supported the Trust Fund Management Reform Act of 1994 could have foreseen that the OST

would become a department with a $141-million budget and a projected $300-million budget next year, with trustee offices for every

region and agency, or that the OST would be allowed to take BIA

service dollars and personnel.

The successes resulting from the development of working relationships in California through compacting and contracting are successes not unique to California either. We have discussed this proposal with other tribes, including Salt River, Salish-Kootenai, and

Rocky Boy, each having demonstrated progressive leadership to address trust issues. They have expressed their concern that their

unique agreements in their respective regions and the flexibility

needed to develop new proposals not be undermined by OST’s trust

reform proposals. Interior officials have often responded to us by

saying that we may be doing it right but the rest of Indian country

needs to be fixed.

But real trust reform solutions to date have come from Indian

Country and they have come when tribes take it upon themselves

to create their own solutions.

I implore the committee not to discard a flexible process that has

such a proven successful track record in a large part of Indian

country. Self determination and self-governance are measurably

very successful pieces of legislation that have achieved great things

in a relatively short period of thirty years. Tribes like the ones I

have mentioned stand at the door ready to take the next step forward toward real social and economic independence. It would be a

disaster if Congress were to allow that door to be closed.

On behalf of the Consortium and other tribes in support of this

proposal, I ask you to consider creating a pilot project like the one

that started self-governance and allow tribes like the members of

the Consortium to continue to work with BIA to find their own solutions regarding trust reform if, for no other reason, than to analyze the OST proposal against the success of self-determination and

self-governance. Included with my testimony is draft legislative

language that would create such a pilot project.

Thank you. I am happy to answer any questions.

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

The CHAIRMAN. Thank you, Mr. Marshall.

Now we will go to Keller George.

STATEMENT OF KELLER GEORGE, PRESIDENT, UNITED

SOUTH AND EASTERN TRIBES [USET], NASHVILLE, TN

Mr. GEORGE. Thank you, Mr. Chairman. I appreciate the opportunity to come before you and testify on behalf of the United South

and Eastern Tribes. I am an old member and on the council at the

Oneida Indian Nation of New York and also serve as president of

United South and Eastern Tribes.

USET agrees that the trust and other functions need to be separated. However, in the BIA reorganization structure, two competing
27

organizations have developed—the OST and the BIA. They must

compete against each other for authority, resources, and manpower. We believe that this struggle will always exist unless certain issues are addressed.

Tribes have made it clear that DOI should not use program dollars to help fund the mistakes of the Administration. Tribes have

stressed that the BIA’s funding should not be diminished in order

to fund the trust efforts of the OST. The BIA is in dire straits and

must have additional funds in order to accomplish a truly successful reorganization. Limited funding would be extremely detrimental

to the efficiency of the processes within the BIA’s new organization.

An attempt was made by the DOI and Tribal Trust Reform Task

Force to work through many of the current reorganization issues

and hold consultation meetings with these tribal leaders regarding

the suggestions of the task force. This has failed due to road blocks

in the negotiating process. I was a part of that task force and some

of the things that we worked out we agreed with, but when we

started talking about having standards and trust principles, it

seemed to all fall apart, and that was in December. The DOI officials have stated that they have consulted with the tribes on various reorganization issues that are being instituted. However, this

is not totally true. Consultation is not throwing out an idea into

Indian country, seeing a negative response, and moving forward

with the idea regardless. Consultation is listening to tribal concerns and taking these comments into account.

Two main points tribes wanted addressed, the Under Secretary

position and trust principals, still, this remains untouched. Tribes

have stated from the beginning of the process that these two items

must be incorporated into any reorganization effort in order to establish a sense of accountability within the BIA. Tribes are still

waiting to see these very important priorities given attention.

It all comes down to the issue that the tribes must be re-engaged

if the reform process is going to be successful. Tribes are receiving

confusing information about the reorganization activities, which is

extremely frustrating. Tribes must be involved in the entire process, not just shown the end product. We fear that without meaningful consultation and clear information the new reorganization

structure will be perceived in the same negative light that has

plagued the BIA for years.

Trust principals. Recent Supreme Court decisions have concluded

that the Federal Government has avoided fiduciary trust responsibility and operated with ‘‘bad faith’’ in its business relationships

with Indian tribes. The tribal leadership of the Trust Reform Task

Force made a concentrated effort to get DOI to incorporate a list

of general trust principals that could be used as reference points

for all trust activities. This suggestion was adamantly opposed by

DOI and members of the task force. Both the White Mountain

Apache and the Navajo Nation cases have had opinions written and

both reaffirm, now more than ever, the need for a standardized set

of trust principles.

Indian country should not be held at bay any longer by pending

cases in the Supreme Court. The time is now for the Federal Government and the Secretary of the Interior to be held accountable

for their trust responsibilities. It is critical that continuity and ac-
28

countability be established as cornerstones of the reorganization effort. There can be no oversight of the trust relationship without a

standardized set of general trust principles in place. Indian country

must have a way to hold their trustees accountable for actions

taken that may be contrary to the advancement of Indian people.

Under the Under Secretary position, USET tribes have stressed

from the beginning of the reform process the need to have Indian

Affairs authority elevated to a secretary level within the Department of the Interior. There is a strong need for an Under Secretary

of Indian Affairs position to be established in order to remedy the

ambivalent attitude toward Indian affairs that has been so apparent within the DOI.

Through legislation, USET feels that the creation of an under

secretary could greatly benefit Indian people. Once again, USET

stresses trust principles and oversight must be part of the establishment of an Under Secretary for Indian Affairs. This is the only

way that Indian issues will receive the attention, resources, and respect it deserves from the trust relationship.

Many hypotheses are circulating throughout Indian country as to

how the reorganization of the BIA will actually work. There has

been little direct discussion between the Federal Government and

tribal leaders regarding this level of reorganization despite repeated requests from Indian country. The new Department manual

once again is not clear as to all the multiple and complex relationships expected at the regional level and below. The leaders are confused and need clarification.

Some of the things that need clarification: Will there be trust officers at every regional office? Who will they answer to directly?

What will be their relationship with other BIA regional staff? What

will the relationship be like between the trust officers and BIA officials? Who will have final determination authority? These are the

types of questions the tribes need answered in order to understand

the complexity of the situation.

On the Cobell litigation, it is widely perceived as being the catalyst which first sparked trust reform discussions and exposed gross

mismanagement of Indian trust assets by the Department of the

Interior and the BIA. USET recognizes the need of the Cobell

plaintiffs to seek resolution and obtain an adequate remedy at law.

The litigation, however, is reaching the dangerous point where the

court has threatened to appoint receivership over BIA and trust assets. The plaintiffs have argued that while they appreciate tribal

input, Cobell is an individual Indian plaintiff’s case. If receivership

is appointed, then it becomes everybody’s case. Receivership could

negatively affect numerous Indian programs and service delivery to

all tribes.

We believe that it is time to introduce legislation that will bring

a fair settlement to the ongoing litigation and to work with Congress to develop a resolution of the case. Congress should appoint

a body of legal and financial scholars to recommend a fair and reasonable settlement along with Indian input. The Cobell litigation is

a drain on the Federal Government and is depleting funding that

could go to other Indian programs or to enhance reorganization efforts. We must get beyond Cobell in order to realize true and lasting reform.
29

USET thanks you for this opportunity to testify before you today,

and we are prepared to answer any questions that you may have.

[Prepared testimony of Mr. George appears in appendix.]

The CHAIRMAN. Thank you, Mr. George.

We will go on now to the last testimony from Chairman Sangrey.

STATEMENT OF RICHARD SANGREY, ACTING CHAIRMAN,

INTERTRIBAL MONITORING ASSOCIATION, ALBUQUERQUE,

NM

Mr. SANGREY. Good afternoon, Mr. Chairman. Thank you for inviting ITMA to testify today. I request permission to submit my remarks for the record.

The CHAIRMAN. Your complete testimony will be included in the

record.

Mr. SANGREY. My name is Richard Sangrey. I am chairman of

ITMA. My written testimony has been submitted separately and

will discuss these issues in more detail.

ITMA’s primary objective in the trust reform process is the

strengthening of tribal sovereignty and tribal self-governance while

holding the U.S. Government to their fiduciary obligations in the

administration of the Indian trust. ITMA firmly believes these

principles can and do co-exist. We are working on a legislative proposal to incorporate these principles in the trust reform process.

Before discussing our proposal, I will first address various aspects

of the Department’s plan.

The Department is rolling out its plan in stages, from defining

goals and objectives, to organizational realignment and changing of

management, to implementation of the trust re-engineering plan.

The trust re-engineering will be based on the ‘‘to be’’ and ‘‘as is’’

studies, which includes input and participation from Indian country. ITMA’s Vice Chairman John Berrey has been very active on

this front, and we will be involved in the re-engineering process.

The Department has acknowledged that the Cobell v. Norton

case is the driving factor in the development of its plan. As such,

we believe that the Department has avoided tribal involvement and

tribal consultation. We also note that while the Department’s plan

recognizes a commitment to self-determination and self-governance,

it does not include any specific plans for tribes to assume more

management, control, or authority over the management of trust

resources. Most glaring is the lack of clear trust standards in the

plan. The plan only references the accounting requirements in the

1994 Trust Reform Act. The plan does not recognize Supreme

Court case law establishing enforceable trust standards.

The plan also lacks substance on addressing the fractionation

problem. The legacy of the Allotment Policy has created numerous

modern day trust problems. Any trust reform proposal must address the fractionation problem.

The Department’s realignment and fiscal year 2004 budget request expands the authority of the Office of Special Trustee from

an oversight function to include operational duties of trust management. This expansion raises questions about the effectiveness of

OST’s oversight role, and the need for concrete independent review

of its performance.
30

By contrast, the plan places no emphasis on tribal resources

management. The enhancement of these programs are critical to

the entire trust reform process. Tribal resources, our land, timber,

oil, gas, coal, and other resources comprise the trust corpus. Properly managing these resources forms the basis of the trust. In this

regard, the Department’s plan and fiscal year 2004 budget request

ignores the importance of tribal resources management.

The Department’s plan also disregards the tribe’s continued request for a single line of authority at the local level for trust management programs. The plan proposes that OST will develop a regional and agency presence to ensure that trust standards are followed in the management of these assets. OST will also retain the

responsibility for financial asset management. This approach raises

concerns over the assignment of responsibilities between OST and

BIA and how disputes will be resolved between the agencies.

One of the largest concerns is the cost of the plan. The plan does

not address this issue and ITMA is adamant that Congress not

allow the Department to deplete funding from existing programs

and services to pay for its trust reform proposal.

ITMA supports the plan’s establishment of a trust training unit

within the OST reorganization. Training in the new BIA organization is unclear. ITMA supports agency-wide trust training as part

of the overall trust reform.

The legislative proposal developed jointly by ITMA and NCAI,

along with our member tribes, addresses some of our key concerns.

Our approach would require the secretary to develop an integrated land and resources recordation and title system as an immediate step to focus on the fractionation problem. In addition, we believe the secretary should request more resources to make available

for tribes to consolidate land holdings on an allotment-by-allotment

basis. Tribal attempts to consolidate small fractionated interests

are not keeping pace with the current speed of the land fractionation problem.

Our bill would establish general trust standards regarding the

management of trust funds and assets. Our approach accommodates tribal participation in the development of standards particular to each reservation.

Our proposal creates a statutory framework to allow tribes to

manage tribal trust funds and assets. Our intent is to give tribal

governments greater control over management of trust funds and

resources. We believe that promoting tribal self-governance is consistent with the trust responsibility the United States owes to

tribes. Our intent is to elevate the resource management needs of

our member tribes and to make sure the tribal resource management plans receive adequate funding and attention.

A provision is included in our proposal making clear that the

Federal trust responsibility to the beneficiaries of the Indian trust

shall not be diminished. We are working on provisions specifying

the United States trust obligations, and trust oversight and compliance issues.

ITMA appreciates the dialogue we have shared with committee

staff on our bill and we welcome further collaboration with the

committee. This concludes my remarks. Thank you.

[Prepared statement of Mr. Sangrey appears in appendix.]
31

The CHAIRMAN. Thank you. I have about 30 questions. I have to

tell you, this thing gets more complicated and more difficult all

along. We have been working on it steadily for a couple of years

now and it seems like every avenue we explore we run into some

opposition or a brick wall. We just cannot seem to get all the players involved and going in the same direction to find some solution

to it. I know it is complicated, but, as several people have already

testified, including the Administration, it is getting worse, not better, and it is going to get much more expensive.

I do not even know where to start with some of these questions

I have. So what I am going to do is put these in writing to you.

I will keep the record open longer than we normally do, we normally keep it open for about 2 weeks, but I will keep it open 4

weeks and would ask that you get back to us in writing because

some of these are rather complicated questions. If you could do

that, I would appreciate it.

With that, we will just go ahead and adjourn the hearing. Thank

you.

[Additional statements submitted for the record appear in appendix.]

[Whereupon, at 12:10 pm, the committee was adjourned, to reconvene at the call of the Chair.]

(33)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

I want to thank my chairman for scheduling this hearing today, for everywhere

I have traveled in Indian country in recent days, there has been a keen interest expressed in the reorganization plan and what new responsibilities will now be delegated to the Office of Special Trustee.

There are many detailed questions about this plan, for instance the role of the

trust officers at the local level—many of which we have sent to the Department as

part of this committee’s role in addressing the President’s request for Indian programs for fiscal year 2004.

We look forward today to developing a better understanding of the issues those

questions address.

I want to join the chairman in welcoming our old friend, Ross Swimmer, and the

assistant secretary, Ms. Martin, back to the committee.

PREPARED STATEMENT OF HON. KENT CONRAD, U.S. SENATOR FROM NORTH DAKOTA

Mr. Chairman, thank you for holding this important hearing on the reorganization of the Bureau of Indian Affairs and Office of the Special Trustee.

Last year, the Department of the Interior and Indian leaders undertook a series

of meetings and consultations on trust management reform and restructuring in an

effort to develop an alternative to the ill-conceived Bureau of Indian Trust Assets

Management [BITAM] proposal. Unfortunately, those meetings ended abruptly and,

instead, the Department slipped its proposal under the door.

I am disappointed that the Department has not been forthright about keeping the

committee informed on this reorganization plan. Even though I am a member of this

committee, which has jurisdiction over this matter, I was not informed of the Department’s December 4 reprogramming request for this effort or its subsequent approval on December 18. What is of even more concern to me is that the Indian leaders on the joint tribal/DOI Task Force, who were heralded as the Department’s partners in an effort to craft a solution to the trust management problem, were not informed of it until it was nearly a done deal. Now we are faced with a reorganization

plan that is already in motion, leaving tribes with little opportunity to effect any

changes.

There have been more than 1 dozen attempts to reorganize the Bureau of Indian

Affairs over the years. I am not yet convinced that this latest attempt, which repackages and reshuffles positions and creates new lines of authority, will get at the

root of the problems in the management of the trust funds.

An important item that is missing in this reform discussion is one of the underlying factors that contributes to the challenges in the trust management system—land

fractionalization. Let me just give you two examples that we have found on our reservations in North Dakota. At the Standing Rock Reservation, one 320 acre tract
34

of land has so many owners that the percentage ownership is only.0000025. If this

land was divided among the owners, each individual would be entitled to a piece

7.1 inches square. At Turtle Mountain Indian Reservation, one 7.5 acre tract of land

has so many owners with undivided interests that each person has a .0000192 percentage ownership in the tract; if divided, this would yield a land equivalent of 2.9

inches square. Until this problem is addressed, no reorganization plan will effect the

fundamental change that is needed in the trust management system.

Finally, I am concerned about the budget implications of this reorganization plan.

The Office of the Special Trustee is requesting an 82 percent increase in its budget

while other important programs for education, health care, and housing are being

cut or level funded. This reorganization effort cannot and must not come at the expense of the Government’s other trust obligations.

I recognize that the situation we face was not created overnight. For decades we

have seen evidence that the accounting and recordkeeping processes for these trust

accounts have been in disarray. It is my hope that as this reorganization moves forward the Department will actively consulate with tribes. Consultation must be a key

element of the plan’s implementation. If it is not, I am afraid that this plan will

be doomed to failure.

Thank you again, Mr. Chairman, for holding this hearing.

PREPARED STATEMENT OF HON. TOM DASCHLE, U.S. SENATOR FROM SOUTH DAKOTA

Mr. Chairman, Mr. Vice Chairman and members of the committee, thank you for

holding this hearing on the Secretary of the Interior’s plan to reorganize the Bureau

of Indian Affairs and the Office of the Special Trustee.

This hearing is long overdue. Frankly, it is a hearing I had hoped could have been

held before the House and Senate Appropriations Committees approved the Secretary’s reprogramming request, which they did late last year.

I don’t make that statement to be critical, but rather to echo the concerns of my

South Dakota tribal constituents who expressed to me their frustration upon learning that a reorganization of the Bureau of Indian Affairs [BIA] and the Office of

Special Trustee [OST] had been approved without a Congressional hearing or full

tribal input. They had been operating under the understanding that they would be

involved in the construction of a solution to the trust management problem, only

to discover that the Department officials and Appropriations committee staff cut an

‘‘under the radar deal’’ to move forward without their fall partnership.

While executive, legislative, and judicial branch officials were discussing different

strategies for coming to closure on the trust management issue, one principle upon

which all parties had seemingly agreed was that the trust problem, which affects

tribal leaders and their members so significantly, must be resolved with the full involvement of the Native American community. I was, therefore, both surprised and

disappointed to learn from South Dakota tribal leaders after the fact that, on December 4, the Department of the Interior had sent a reprogramming request to Congress without the knowledge of tribal leadership.

I was also told that Deputy Secretary Steven Griles and other senior Interior Department officials did not even raise the reprogramming request at its 2 day meeting with the Trust Reform Task Force on December 16 and 17 until late on the second day. Adding insult to injury, I understand that neither the membership of the

Senate Committee on Indian Affairs, nor the Senate leadership were informed that

a reprogramming request had been received and approved by the Appropriations

Committee.

Tribal leaders in my State believe strongly that the Department’s plan moves in

the wrong direction. Instead of integrating the trust and ‘‘non-trust’’ functions of the

Department, it separates the functions even further.

In terms of process, they ask what happened to the ‘‘consultation’’ that was so

trumpeted by Interior Department officials earlier in the year?

Mr. Chairman, Mr. Vice Chairman and members of the committee, I acknowledge

your sincere desire to solve the trust management problem in a way that ensures

that stakeholders receive what is due to them in a timely manner. And I greatly

appreciate the attention you are devoting to this matter. However, given the recent

history of the trust reform debate, I have no credible answer to tribal leaders’ lament that the Department appears more interested in affecting the reaction of the

Court in the Cobell v. Norton lawsuit than in considering the opinion of Indian

country.

Since the Department formally unveiled its reorganization proposal 6 months ago,

numerous questions have been raised about exactly how this reorganization, which
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is currently being advanced administratively, will improve the present trust fund

management and accounting procedures.

What is the role and responsibilities of the trust officers who will be dispatched

throughout Indian country, and how will these positions relate to the local and regional BIA offices?

Who has oversight over these positions, and what accountability mechanism is in

place to monitor their performance?

Will Indian preference apply to any new positions that are created by the reorganization and the expansion of the Office of Special Trustee’s responsibilities?

Why is the reorganization effort affecting the Office of Indian Education Programs

when the court mandate affects only trust fund management reform?

Does the plan violate the BIA amendments to the Elementary and Secondary

Education Act reauthorization statute?

This list of questions is long and incomplete. Suffice it to say that there is much

more to be explained to my tribal constituents and to me than can be gleaned from

the 18 pages of organizational boxes that the Department has provided to explain

the rationale for their reorganization plan.

I think it is extremely important for this committee, and indeed the fall Senate,

to reflect on two central facts about the Indian trust debate as they consider this

proposed reorganization of the BIA and the OST.

First, residents of Indian country have been victimized by persistent mismanagement of trust assets by the Federal Government for generations—through administrations of both political parties. Far too many families for far too long have been

denied trust assets to which they are entitled because of Federal mismanagement.

And this situation has adversely affected their quality of life.

Second, frustration with the Federal Government’s failure to come to grips with

this problem has not only lead to litigation [Cobell v. Norton], it has also solidified

the tribes’ determination to be part of the solution to the problem. Effective trust

management reform will remain an elusive goal if the tribes are not fall participants

in this exercise.

Mr. Chairman, Mr. Vice Chairman and members of the committee, the tribes understand that the Interior and Treasury Departments, the BIA, and Special Trustee

for American Indians must be their allies in the search for a solution, not independent actors balancing other agendas. The bottomline is that trust beneficiaries deserve trustees in whom they can have confidence to restore sound accounting principles and integrity to the Federal Government’s management of trust assets.

Last year, Senator Tim Johnson and I worked with Senator John McCain on a

bipartisan alternative to the controversial proposal announced by Secretary Norton

in November 2001 to establish a new ‘‘Bureau of Indian Trust Asset Management’’

[BITAM] within the Department of the Interior. Our effort featured the establishment of a single line of authority within the Department of the Interior for trust

management, trust standards, and the option of co-beneficiary management of trust

assets, all principles I still believe make sense today.

Meanwhile, as BITAM drew a sharp negative reaction, Secretary Norton announced an aggressive outreach program designed to solicit input on trust reform

from Indian country. Regional meetings were held around the country with Indian

leaders and affected stakeholders, and emotions cooled. Yet, abruptly, last Fall, it

all came to a halt. Then, quietly, in mid-December, the phoenix rose from the ashes.

I clearly remember the resounding opposition expressed to me about BITAM 1

year ago, and the main elements of the case against that plan have been raised

about the current reorganization scheme. The proposal this committee is reviewing

today appears to be a reincarnation of BITAM, so I am interested to hear the Department’s explanation of the differences between the two approaches, in substance

and in process.

In my opinion, this debate about the reorganization has been a distraction and

a side-show from the more fundamental challenge of providing a full and fair accounting to Indian people, and ultimately payment of the money that is owed to

them and the Tribes.

Now that the Department has been given authorization to proceed administratively with its reorganization plan, I hope the Department will submit to the Congress a legislative proposal on how to address the underlying, substantive problem

that we have been wrestling with for far too long.

We still do not have a historical accounting, we still do not know if records exist,

and we still do not know how much the United States of America owes to Indian

people and to the Tribes. There has been no proposed mechanism to get to an ultimate solution of this trust debacle. The United States of America continues to fail

Indian people every single day, and to compound the problem by its inaction.
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Finally, Mr. Chairman, Mr. Vice Chairman, and members of the committee, we

need to recognize the human dimension and consequences of trust mismanagement.

The lack of an accounting and payment of what is owed prevents the tribes from

addressing the very real human needs that we are all so painfully aware of in Indian country.

The bottomline is that the tribes do not have the resources they need to adequately address health care, education, unemployment, infrastructure, and the full

range of socio-economic needs. The issue is not simply boxes on an organizational

chart, but lives that literally hang in the balance.

As you can see, I am thoroughly frustrated by this issue. The history of trust

management has been a travesty and, without a concerted effort to address the

issue, the future will not be any better. The United States has a fiduciary responsibility to Indian country based on numerous treaty obligations. We must satisfy our

obligations. We must work together to craft a solution to the underlying trust problem.

I look forward to working with all of my colleagues, the Administration, and representatives of Indian country on this important challenge.

Thank you.

PREPARED STATEMENT OF JOHN BERREY, CHAIRMAN, QUAPAW TRIBE, OKLAHOMA AND

VICE CHAIRMAN, INTER-TRIBAL MONITORING ASSOCIATION

Mr. Chairman and distinguished members of the committee thank you for the invitation to speak to you today. My name is John Berrey, I am the chairman if the

Quapaw Tribe of Oklahoma and vice chairman of the Inter-Tribal Monitoring Association. I believe that my role today is to provide a perspective of the current reorganization in light of my very active collaborative involvement in the ‘‘As Is’’ and ‘‘To

Be’’ re-engineering phases of Trust Reform. I want to make it clear that I have a

positive outlook, I am also engaged and I have committed much of my life to creating a better system. I am not a rock thrower; I am not negative, I don’t always agree

but I have been taught by my folks to help guide change with positive input and

hard work. I believe that Indian country is married for life with the DOI and the

only way to make it work is to work together.

What is ‘‘As Is’’? The ‘‘As Is’’ project was last year’s documentation of current

Trust management business practices. I was on a team of dedicated folks that traveled throughout Indian country interviewing over 1,000 hard working people who

provide Trust services to Native Americans and tribes at every level, every day. We

basically took a snapshot of how the DOI and some tribes are currently performing

Trust services. We identified in detail how they do their jobs and how the business

processes vary from region to region and agency to agency. That was tough work;

I was away from my family and tribe for 204 days but I met so many people who

are dedicated to the Native people that they serve. This detailed ‘‘As Is’’ work product has provided us with a map and basis for the ‘‘To Be’ Trust re-engineering

project.

What is the ‘‘To Be’’ re-engineering? This current project will be the redesign of

the processes and work flows that make up much of the services provided by the

United States to Native Americans. This re-engineering will create a massive

change and I believe requires congressional oversight at each phase ensuring that

the trustee delegate, the DOI fulfills the trust responsibility of the United States

to the Native American Tribes and individuals. I am the leader of the tribal representatives of which we have five members to this re-engineering team. We have

a great responsibility to not only participate in the development of these new processes giving our perspective, expertise and input but we have the added responsibility to inform Indian country of our progress and any impact these massive management changes may have on daily life for the beneficiary. To date we have had several meetings and we have really just begun the task. Re-engineering is not just

duct taping or cobbling a system together with baling wire; it is total analysis and

rebuilding where needed. It requires that we use our imagination to create as well

as an ability to extract the best practices identified in the ‘‘As Is’’ model and implement those practices in a redesigned beneficiary centric service delivery model.

Beneficiary centric Trust service is the mission of the tribal representatives and

the ‘‘To Be’’ team. I believe that beneficiary focus is a mission shared by tribes, Individuals as well as Secretary Norton, Deputy Secretary Griles, The Special Trustee

Chief Swimmer and his deputy Donna Erwin including all their respective employees. The definition of beneficiary in this context is: Tribes and Individuals, and not

just Individual Indian Money Account holders [IIM] but also the families that stand

behind those folks and the unborn future beneficiaries.
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So why reorganize before re-engineering? That is a question that many people

have asked me and I believe my answer may shed some light. Last year while documenting the current DOI management it was very clear that the DOI had a systemic problem causing much of the delays in: Trust service delivery. A single decision or individual did not create the problem but it was the result of a long evolutionary process developed over time. The problem we identified was that the DOI

wears so many different hats and has so many conflicting responsibilities it often

has problems making critical and final decisions on a timely basis. The regional directors had developed over time a sort of autonomy that resembled small freedoms

and the central office was extremely disconnected with the needs of the regional

staffs as well as the Beneficiary. So, after 1 year of time consuming and difficult

but partially fruitful discussions with the Tribal Task Force, I believe that the DOI

decided to implement some necessary changes. Are the changes described and implemented in the recently signed Department Manual going to help? I think in some

ways the answer is yes but I am not yet sure; there are so many issues that concern

me. What are the effects on the promotion of self-governance and self-determination? What are the effects at my agency that desperately needs resources? When is

the issue of lease compliance and enforcement going to result in action at the local

level? When can I get the backlogs in probates for my people caught up? When are

my fee-to-trust applications going to be signed? Without new Trust land my Tribe

is condemned to live in America’s largest EPA superfund site. When is the DOI

going to replace the old and worn LRIS system with TAAMS 1.49 so we can have

a consistent platform that we can transition from to a better systems architecture?

These are just a few concerns that I have and I commit to you that I will engage

with and work diligently with tribes, Individuals and the Department of the Interior

to address these issues and I will not throw rocks. We, tribal leaders, Individuals,

Congressional Representatives and the DOI must work together to not only create

a better system but to provide opportunities for our young people who may have an

interest in participation in the stewardship of Native America.

Thank you for this opportunity to, provide input and I also offer myself to the

committee and its members my help whenever asked.
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