Indian Issues: Damages and Compensation for Tribes at Seven Reservations Affected by Dams on the Missouri River
Published: 2007-11-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: From 1946 to 1966, the government constructed five dams as flood control projects on the Missouri River in North Dakota and South Dakota. The reservoirs created behind the dams flooded portions of seven Indian reservations--Fort Berthold, Cheyenne River, Standing Rock, Lower Brule, Crow Creek, Yankton, and Santee. The tribes at these seven reservations received compensation when the dams were built as well as additional compensation over the years that followed. Since 1991, GAO has issued three reports on additional compensation claims for tribes at five reservations: (1) 1991--Fort Berthold and Standing Rock (GAO/RCED-91-77); (2) 1998--Cheyenne River (GAO/RCED-98-39); and (3) 2006--Crow Creek and Lower Brule (GAO-06-517). In these reports, GAO proposed that one recommended approach to providing additional compensation would be to calculate the difference between the tribe's final asking price and the amount that was appropriated by Congress and then adjust the difference using the inflation rate and an interest rate to reflect a range of current values. This testimony is based on GAO's three prior reports, and summarizes the damages estimated by the Department of the Interior and the compensation authorized by Congress, for dams constructed on the Missouri River.
section_title: What GAO Found
paragraphs: The reservoirs created by the dams on the Missouri River permanently flooded over 350,000 acres of land on seven Indian reservations, ranging from over 150,000 acres flooded on the Fort Berthold reservation to less than 600 acres flooded on the Santee reservation. In addition to the valuable river bottom land that was lost, the tribes also lost any natural resources and structural improvements on the land. The natural resources lost included timber, wildlife, and native plants. The structural improvements lost included such things as homes and ranches. In some cases, entire towns were lost. In addition to the direct damages, Congress has recognized that the tribes also suffered indirect or intangible damages for the loss of assets of unknown value. These losses included spiritual ties to the lands (for example, cemeteries and tribal monuments); tribal claims to a homeland; and benefits derived from living along the Missouri River. The tribes at the seven reservations that lost land due to the flood control projects on the Missouri River originally received compensation for their damages between 1947 and 1962, and they subsequently requested and received additional compensation between 1992 and 2002. For the tribes at the five reservations that we have reported on in the past, the original compensation was based on detailed assessments by the U.S. government and the tribes of the damages caused by the dams and, in some cases, protracted settlement negotiations. The U.S. government and the tribes were ultimately unable to reach settlement agreements, and Congress decided the compensation amounts. In each case, the original compensation authorized was less than what the tribes had requested, leading the tribes to request additional compensation. The three largest additional compensation amounts--Cheyenne River, $290.7 million in 2000; Fort Berthold, $149.2 million in 1992; and Standing Rock, $90.6 million in 1992--were all within the ranges calculated in GAO's 1991 and 1998 reports. Congress did not ask GAO to review the methodologies used to calculate the four smaller additional compensation amounts, all less than $40 million, before enacting the bills in 1996 (Crow Creek), 1997 (Lower Brule), and 2002 (Yankton and Santee). The Crow Creek Sioux and Lower Brule Sioux tribes were authorized additional compensation commensurate, on a per-acre basis, with the additional compensation provided to the Standing Rock Sioux tribe in 1992. Similarly, the additional compensation authorized in 2002 for the Yankton Sioux and Santee Sioux tribes was also partially based on a per-acre calculation.

section_title: Letter
paragraphs: Thank you for the opportunity to discuss our work on reviewing the  additional compensation claims by tribes at seven Indian reservations for  lands taken by flood control projects on the Missouri River. As you know,  between 1946 and 1966 five dams were constructed on the Missouri  River—the Garrison Dam in North Dakota, and the Oahe, Fort Randall, Big  Bend, and Gavins Point Dams in South Dakota—that damaged seven  reservations. The reservoirs created behind the dams permanently flooded  portions of the Fort Berthold, Cheyenne River, Standing Rock, Lower  Brule, Crow Creek, Yankton, and Santee reservations. While the dams  were being constructed, Congress enacted a number of laws that  authorized payments to the tribes residing on the affected reservations as  compensation for the damages caused by the dams. However, beginning in  the 1980s, some of these tribes began requesting additional compensation.  As part of their pursuit of additional compensation, the tribes generally  hired consultants to develop economic analyses or perform other  calculations to form the basis for their requests for additional  compensation. In the 1990s and early 2000s, Congress responded to these  requests for additional compensation by establishing development trust  funds for the tribes at each of the seven reservations.
However, today, more than 45 years after the last original compensation  bill was enacted and almost 5 years after the last additional compensation  bill was enacted, lingering questions remain about various aspects of the  tribes’ compensation. Most notably, questions have been raised about  whether the tribes have been adequately compensated for the damages  they sustained and whether they have been treated consistently. For  example, two bills pending in the 110th Congress, H.R. 155 and S. 160,  would provide the Crow Creek Sioux and Lower Brule Sioux tribes with a  third round of compensation totaling an additional $132.2 million.  Specifically, the Crow Creek Sioux tribe would receive an additional  $41.7 million over and above the $27.5 million in additional compensation  authorized in 1996 (unadjusted for inflation) and the Lower Brule Sioux  tribe would receive an additional $90.5 million over and above the  $39.3 million in additional compensation authorized in 1997 (unadjusted  for inflation). Also, pending in the 110th Congress is the Cheyenne River  Sioux Tribe Equitable Compensation Amendments Act of 2007, H.R. 487.  This bill would make a number of amendments to the 2000 act that  authorized additional compensation for the Cheyenne River Sioux tribe,  including allowing individual tribal members to be eligible for payments  and changing how the trust fund is capitalized and invested.
Since 1991, we have issued three reports on additional compensation  claims for tribes at five reservations: (1) in May 1991 we reported on  claims by the Three Affiliated Tribes of the Fort Berthold Reservation and  the Standing Rock Sioux Tribe; (2) in January 1998 we reported on the  claim by the Cheyenne River Sioux Tribe; and (3) in May 2006 we reported  on the most recent additional compensation claims by the Crow Creek  Sioux and Lower Brule Sioux tribes. In each report, we raised questions  about the approach and calculations used in developing the tribes’  additional compensation claims, and, as an alternative we calculated a  range of possible additional compensation for Congress to consider should  it determine that additional compensation was warranted. In addition, we  testified in April 1991 on our work related to our first report and more  recently, we testified on June 14, 2006, on our May 2006 report. Our  testimony today is drawn from our three prior reports and summarizes the  damages incurred, and the compensation received, for dams constructed  on the Missouri River.
We compiled information from our three prior reports to prepare this  testimony. In reviewing the additional compensation claims for the tribes  at the five reservations covered by our prior reports, we met the tribes’  consultants to discuss the damages caused by the dams and the analysis  that was the basis for the tribes’ additional compensation claims. We also  reviewed other pertinent information regarding the economic condition of  the tribes at the time the land was acquired, including reports prepared by  the Department of the Interior. In addition, for our 1998 and 2006 reports,  in order to ensure that we obtained and reviewed all relevant data, we  conducted a literature search for congressional, agency, and tribal  documents at the National Archives and the Department of the Interior’s  library. We used original documents to learn about the tribes’ settlement  negotiations process and to identify the appraised land prices and various  proposed settlement amounts. As a result, we determined that the data  were sufficiently reliable for purposes of this testimony. We also met with  representatives of the Cheyenne River Sioux, the Crow Creek Sioux, and  the Lower Brule Sioux tribes. Our three prior reports, on which this  testimony is based, were prepared in accordance with generally accepted  government auditing standards.
The reservoirs created by the dams on the Missouri River permanently  flooded over 350,000 acres of land on seven Indian reservations. Two  reservations lost more than 100,000 acres while the remaining five  reservations each lost less than 56,000 acres. In addition to the valuable  river bottom land that was lost, the tribes also lost any natural  resources and structural improvements on the land. The natural  resources lost included timber, wildlife, and native plants and berries.  For example, the Crow Creek reservation lost 94 percent of its  timberland and the Fort Berthold reservation lost 100 percent of its  irrigable land. The structural improvements lost included such things  as homes and ranches. In some cases, entire towns were lost. In  addition to the direct damages, Congress has recognized that the tribes  also suffered indirect or intangible damages for the loss of assets of  unknown value. These losses included spiritual ties to the lands (for  example, cemeteries and tribal monuments); tribal claims to a  homeland; and benefits derived from living along the Missouri River.
The tribes at the seven reservations that lost land due to the flood  control projects on the Missouri River originally received  compensation for their damages between 1947 and 1962 and they  subsequently requested and received additional compensation between  1992 and 2002. For the tribes at the five reservations that we have  reported on in the past, the original compensation was based on  detailed assessments by the U.S. government and the tribes of the  damages caused by the dams and, in some cases, protracted settlement  negotiations. For example, the settlement negotiations for the Crow  Creek Sioux and Lower Brule Sioux tribes involved two dams and  stretched over about 9 years, from 1953 through the enactment of their  settlement legislation for the Big Bend Dam in 1962. The U.S.  government and the tribes were ultimately unable to reach settlement  agreements and Congress decided the compensation amounts. In each  case, the original compensation provided was less than what the tribes  had requested, leading the tribes to request additional compensation.  The three largest additional compensation amounts—Cheyenne River,  $290.7 million in 2000; Fort Berthold, $149.2 million in 1992; and  Standing Rock, $90.6 million in 1992—were all within the ranges we  calculated in our 1991 and 1998 reports. Congress did not ask us to  review the methodologies used to calculate the four smaller additional  compensation amounts, all less than $40 million, before enacting the  bills in 1996 (Crow Creek), 1997 (Lower Brule), and 2002 (Yankton and  Santee). The Crow Creek Sioux and Lower Brule Sioux tribes were  authorized additional compensation commensurate, on a per-acre  basis, with the additional compensation provided to the Standing Rock  Sioux tribe in 1992. Similarly, the additional compensation authorized  in 2002 for the Yankton Sioux and Santee Sioux tribes was also  partially based on per-acre calculation. In addition to the per-acre  calculation, an adjustment was made for these two tribes to provide an  amount for severance damages and rehabilitation that was not included  in their original compensation.
subsections: section_title: Background
paragraphs: The Flood Control Act of 1944 established a comprehensive plan for flood  control and other purposes, such as hydroelectric power production, in  the Missouri River Basin. The Pick-Sloan Plan—a joint water development  program designed by the U.S. Army Corps of Engineers and the  Department of the Interior’s Bureau of Reclamation—included the  construction of five dams on the Missouri River, including the Garrison  Dam in North Dakota, and the Oahe, Fort Randall, Big Bend, and Gavins  Point Dams in South Dakota (see fig. 1). The dams were constructed  during a 20-year period from 1946 to 1966.
For tribes at five of the seven reservations, Congress asked us to review  the additional compensation proposals developed by tribal consultants.  Our reviews for tribes at three reservations—Fort Berthold, Standing  Rock, and Cheyenne River—were conducted before Congress authorized  their additional compensation. In 1991, we reported on the additional  compensation claims for the Three Affiliated Tribes of the Fort Berthold  Reservation and the Standing Rock Sioux tribe, and, in 1998, we reported  on the additional compensation claims for the Cheyenne River Sioux  tribe.
More recently, we reviewed the additional compensation claims for the  Crow Creek Sioux and Lower Brule Sioux tribes. The Crow Creek Sioux  and Lower Brule Sioux tribes were affected by the Fort Randall and Big  Bend dams. The tribes received their original compensation for the  damages caused by these two dams in 1958 and 1962. However, the tribes  did not consider their original compensation to be sufficient, and they  sought additional compensation to address the effects of both dams. As a  result, in 1996 and 1997, Congress authorized additional compensation for  the Crow Creek Sioux and the Lower Brule Sioux tribes, respectively. In  2003, the Crow Creek Sioux and Lower Brule Sioux tribes hired a  consultant to determine if they were due additional compensation based  on the method we proposed in our 1991 and 1998 reports. As a result of  the consultant’s analysis, the two tribes are currently seeking a third round  of compensation. In our 2006 report we assessed whether the tribes’  consultant followed the approach in our prior reports in calculating the  compensation for Congress to consider in determining whether additional  compensation was warranted for the Crow Creek Sioux and Lower Brule  Sioux tribes.
section_title: Damages Caused to the Tribes at Seven Reservations as a Result of Dams on the Missouri River
paragraphs: The reservoirs created by the dams on the Missouri River permanently  flooded over 350,000 acres of land on seven reservations, ranging from  over 150,000 acres flooded on the Fort Berthold Reservation to less than  600 acres flooded on the Santee Reservation (see table 1). In addition to  the valuable river bottom land that was lost, the tribes lost any natural  resources and structural improvements on the land. The natural resources  lost included timber, wildlife, and native plants and berries. The structural  improvements lost included such things as homes and ranches. In some  cases, entire towns were lost.
The damage that each tribe sustained was unique depending, on the land  that was lost, the resources and structures on the land, and the overall  impact on the community. For example, the Department of the Interior  estimated at one point that 78 percent of the families living on the Fort  Berthold reservation, or 289 families, lived in the area that was going to be  flooded, a number that was generally two to three times higher than on the  other reservations. On the Crow Creek and Lower Brule reservations, the  Fort Randall Dam displaced 119 families, and the Big Bend Dam displaced  89 families. In some cases the same families were displaced by both dams.  The Crow Creek reservation lost 94 percent of its timberland and the Fort  Berthold reservation lost 100 percent of its irrigable land.
In addition to the direct damages, Congress has recognized that the tribes  also suffered indirect or intangible damages for the loss of assets of  unknown value. These losses included spiritual ties to the lands (for  example, cemeteries and tribal monuments); tribal claims to a homeland;  and benefits derived from living along the Missouri River.
section_title: Compensation Provided to the Tribes on the Missouri River for the Damages Caused by the Dams
paragraphs: The tribes at the seven reservations that lost land due to the flood control  projects on the Missouri River originally received compensation for their  damages between 1947 and 1962, and they subsequently requested and  received additional compensation between 1992 and 2002 (see table 2).  For the tribes at the five reservations that we have reported on in the past,  the original compensation was based on detailed assessments by the U.S.  government and the tribes of the damages caused by the dams and, in  some cases, protracted settlement negotiations over how much the tribes  should be compensated for their losses. The settlement negotiations for  the Cheyenne River Sioux tribe lasted about 4 years from the date  settlement negotiations were authorized to the date the settlement  legislation was enacted. The settlement negotiations for the Crow Creek  Sioux and Lower Brule Sioux tribes involved two dams and stretched over  about 9 years, from 1953 through the enactment of their settlement  legislation for the Big Bend Dam in 1962. The results of the settlement  negotiations were that the U.S. government and the tribes were unable to  reach an agreement. As a result, the settlements were left for Congress to  decide. For each of the tribes at the five reservations that we have  reported on in the past, the original compensation provided was less than  what the tribes’ believed their lands were worth.
During our prior reviews, we have recognized the problems with the  original settlement negotiations, namely that the tribes may have been at a  disadvantage during the negotiations and that they were not willing sellers  of their land. We also recognized the inherit difficulties with trying to  perform new economic analyses on the damages the tribes sustained  50 years after the fact. In our 1991 and 1998 reports, for the tribes at three  reservations, we found the economic analyses used to justify their  additional compensation claims to be unreliable, and we suggested that  the Congress not rely on them as a basis for providing the tribes with  additional compensation. Instead, we suggested that if Congress  determined that additional compensation was warranted, it could  determine the amount of compensation by calculating the difference  between the tribe’s final settlement proposal (referred to in our 2006  report as the tribe’s “final asking price”) and the amount of compensation  Congress originally authorized the tribes. We used the inflation rate and an  interest rate to adjust the difference to reflect a range of current values,  using the inflation rate for the lower end of the range and the interest rate  for the higher end. Using this approach, we calculated how much  additional compensation it would take today to make up for the difference  between the tribes’ final asking prices and the original compensation  provided. The three largest additional compensation payments—Cheyenne  River, $290.7 million in 2000; Fort Berthold, $149.2 million in 1992; and  Standing Rock, $90.6 million in 1992—were all within the ranges we  calculated.
The four smaller additional compensation payments were calculated using  a different approach. We were not asked by Congress to review the  additional compensation claims for the Crow Creek Sioux and Lower  Brule Sioux tribes in the 1990s when they received their additional  compensation. The Crow Creek Sioux and Lower Brule Sioux tribes did  not base their additional compensation claims in the 1990s, on an  economic analysis as the tribes did for the three other reservations that we  reviewed. Rather, the Crow Creek Sioux and Lower Brule Sioux tribes’  consultant asserted that since the tribes suffered the same type of  damages as the Standing Rock Sioux tribe, they should be provided with  additional compensation commensurate, on a per-acre basis, with the  additional compensation provided to the Standing Rock Sioux tribe in  1992. In our 2006 report, where we reviewed the additional compensation  claims by the Crow Creek Sioux and Lower Brule Sioux tribes, we found  that the additional compensation provided to the Crow Creek Sioux tribe  in 1996 was slightly above the range we calculated and the additional  compensation provided to the Lower Brule Sioux tribe in 1997 was within  the range we calculated. The additional compensation dollar ranges we  calculated for the tribes at five reservations covered in our three prior  reports are summarized in figure 2. (The dollar amounts in figure 2 are  generally from different years and they should not be added together or  compared without first making adjustments for changes in the purchasing  power of money over time.)
The additional compensation authorized in 2002 for the Yankton Sioux and  Santee Sioux tribes was also partially based on a per-acre calculation.  Congress followed a two-part calculation in authorizing additional  compensation for the Yankton Sioux and Santee Sioux tribes. The first  part involved taking the additional compensation provided to the Lower  Brule Sioux Tribe in 1997, on a per-acre basis ($1,763), and multiplying  that times the acreage the Yankton Sioux and Santee Sioux tribes lost  (Yankton Sioux, $1,763 × 2,851.4 acres = $5.027 million; Santee Sioux,  $1,763 × 593.1 acres = $1.046 million). The second part of the calculation  involved multiplying the results of the first part by 4.58 to add an amount  for severance damages and rehabilitation (Yankton Sioux, $5.027 million ×  4.58 = $23.02 million; Santee Sioux, $1.046 million × 4.58 = $4.79 million).  We have not performed any reviews of the additional compensation claims  for the Yankton Sioux and Santee Sioux tribes.
Rehabilitation funds had been provided to tribes on four of the seven  reservations as part of their original compensation in the 1950s and 1960s  (see table 3). While rehabilitation was a significant component of the  original compensation package for four tribes, we believe it should be  considered separately from the comparison for damages because  rehabilitation was not directly related to the damage caused by the dams.  Funding for rehabilitation, which gained support in the late-1940s, was  meant to improve the tribes’ social and economic development and  prepare some of the tribes for the termination of federal supervision.  From the late-1940s through the early-1960s, Congress considered several  bills that would have provided individual tribes with rehabilitation  funding. For example, between 1949 and 1950, the House passed seven  bills for tribes totaling more than $47 million in authorizations for  rehabilitation funding, and considered other bills, one of which would  have provided $50 million to several Sioux tribes, including Crow Creek  and Lower Brule. Owing to opposition from tribal groups, the termination  policy began to lose support with Congress in the late 1950s, and  rehabilitation funding for individual tribes during this time was most often  authorized by Congress in association with compensation bills for dam  projects on the Missouri River. However, the granting of rehabilitation  funding for these tribes was inconsistent. Some tribes did not receive  rehabilitation funding along with compensation for damages, while others  did.
In closing, I would caution against looking solely at the acreage lost and  the authorized compensation amounts to try and determine if the tribes  were treated consistently. Such comparisons have led to perceived  inequities between the tribes. For example, questions could be asked such  as, Why was the original compensation for the Standing Rock Sioux tribe  almost as much at the original compensation for the Three Affiliated  Tribes of the Fort Berthold Reservation when the Fort Berthold  reservation lost three times as much land? or Why was the additional  compensation provided to the Yankton Sioux tribe almost as much as the  additional compensation provided to the Crow Creek Sioux tribe when the  Crow Creek reservation lost more than five times as much land? The type  of land lost, the resources on the land, the structures on the land, the  settlement negotiations, the compensation bills, and the dates when  compensation was provided, has varied by tribe. Looking at just the total  compensation amounts masks the underlying differences in each of the  compensation bills.
Mr. Chairman, this completes my prepared statement. I would be happy to  respond to any questions you or other Members of the Committee may  have at this time.
section_title: Contact and Acknowledgments
paragraphs: For further information, please contact Robin M. Nazzaro on (202) 512- 3841 or nazzaror@gao.gov. Individuals making key contributions to this  testimony and our 2006 additional compensation report are Greg Carroll,  Tim Guinane, Susanna Kuebler, Jeffery D. Malcolm, and Carol Herrnstadt  Shulman.
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