    [Senate Hearing 107-580]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-580

                       MANAGEMENT OF TRIBAL TRUST FUNDS.
    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

    OVERSIGHT HEARING ON THE STATUS OF THE DIALOG BETWEEN THE DEPARTMENT OF
     THE INTERIOR AND AMERICAN INDIAN AND ALASKA NATIVE LEADERS ON VARIOUS
     ALTERNATIVES FOR THE REORGANIZATION OF THE DEPARTMENT OF THE INTERIOR
         TO IMPROVE THE DEPARTMENT'S MANAGEMENT OF TRIBAL TRUST FUNDS.

                                   __________

                                 JUNE 26, 2002
                                 WASHINGTON, DC

                           U. S. GOVERNMENT PRINTING OFFICE
    80-867                          WASHINGTON : 2002
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                          COMMITTEE ON INDIAN AFFAIRS

                       DANIEL K. INOUYE, Hawaii, Chairman

                BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

    KENT CONRAD, North Dakota            FRANK MURKOWSKI, Alaska
    HARRY REID, Nevada                   JOHN McCAIN, Arizona,
    DANIEL K. AKAKA, Hawaii              PETE V. DOMENICI, New Mexico
    PAUL WELLSTONE, Minnesota            CRAIG THOMAS, Wyoming
    BYRON L. DORGAN, North Dakota        ORRIN G. HATCH, Utah
    TIM JOHNSON, South Dakota            JAMES M. INHOFE, Oklahoma
    MARIA CANTWELL, Washington

            Patricia M. Zell, Majority Staff Director/Chief Counsel

             Paul Moorehead, Minority Staff Director/Chief Counsel

                                      (ii)

                                 C O N T E N T S

                                  ----------
                                                                       Page
    Statements:
        Akaka, Hon. Daniel K., U.S. Senator from Hawaii..............     4
        Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado,
          vice chairman, Committee on Indian Affairs.................     3
        Griles, J. Steven, deputy secretary, Department of the
          Interior, Washington, DC...................................     5
        Hall, Tex G., chairman, Mandan, Hidatsa, and Arikara Nation,
          tribal cochair, Tribal Leader/Department of the Interior
          Trust Reform Task Force....................................     7
        Inouye, Hon. Daniel K., U.S. Senator from Hawaii, chairman,
          Committee on Indian Affairs................................     1
        Masten, Susan, chairwoman, Yurok Tribe, tribal cochair,
          Tribal Leader/Department of the Interior Trust Reform Task
          Force......................................................    13
        McCaleb, Neal A., assistant secretary, BIA, Department of the
          Interior, Washington, DC...................................     7
        Thomas, Hon. Craig, U.S. Senator from Wyoming................     4

                                    Appendix

    Prepared statements:
        Griles, J. Steven............................................    33
        Hall, Tex G. (with attachments)..............................    40
        Johnson, Hon. Tim, U.S. Senator from South Dakota............    29
        Marshall, Clifford, chairman, Hoopa Valley Tribe.............    29
        Masten, Susan (with attachments).............................    44
        McCaleb, Neal A..............................................    33

    Note: Other material submitted for the record retained in
      committee files.

                       MANAGEMENT OF TRIBAL TRUST FUNDS.

                                  ----------

                            WEDNESDAY, JUNE 26, 2002

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 10:04 a.m. in
    room 628, Senate Dirksen Building, Hon. Daniel K. Inouye
    (chairman of the committee) presiding.
        Present: Senators Inouye, Campbell, Thomas, and Akaka.

     STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII,
                 CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

        The Chairman. The committee meets this morning to receive
    testimony from the four cochairs of the Task Force that has
    been established to consider proposals for the reorganization
    of the Department of the Interior to better address the
    management of funds that are held in trust for Indian tribal
    governments and individual Indians.
        The report issued by the General Accounting Office in 2001
    indicates that the Department maintains approximately 1,400
    tribal trust accounts for 315 Indian tribes, with assets in
    excess of $2.6 billion.
        The Department is also currently administering 260,000
    individual Indian money accounts with a balance of $400 million
    as of September 30, 2000.
        In November of last year, the Secretary of the Interior
    proposed a plan for the reorganization of the Department and
    the establishment of a Bureau of Indian Trust Asset Management.
        This organizational plan was filed with the District Court
    in the ongoing class action litigation of individual Indian
    money account holders who assert that the Government has
    mismanaged their trust funds.
        Reaction to the Secretary's proposal in Indian country was
    not favorable and, ultimately, it was decided that a Task Force
    should be established to examine other proposals for the
    reorganization of the Department.
        The committee is advised that there were 28 proposals in
    all that were considered by the Task Force which is composed of
    representatives of the Department of the Interior and 24
    representatives of Indian country.
        Although the committee anticipated that today's hearing
    would focus on one single proposal that had the support of both
    the Task Force members and most of Indian country, we are
    advised that the process has yet to yield consensus.
        Accordingly, the committee has scheduled another hearing on
    July 30th to receive testimony on what the committee
    understands will be a forthcoming consensus proposal. On that
    day, the committee will also receive testimony on S. 2212, a
    bill introduced by Senators Daschle, McCain, and Johnson which
    also proposes a reorganization of the Department to achieve a
    greater measure of accountability in the management of these
    trust funds.
        In addition to the dialog that is taking place on matters
    related to the organization of the Department and its
    management of trust funds, there are two cases now before the
    United States Supreme Court which call upon the Court to decide
    the nature and extent of the United States' responsibilities
    and liabilities as they relate to the management and
    administration of tribal trust resources.
        So we have much on our agenda to address as we proceed to
    consider the range of issues associated with the our Nation's
    trust responsibility.
        Finally, I want to observe that after reading the
    testimonies last evening, it struck me that the existence of
    this dialog process and what the Task Force has set out for
    itself to accomplish is nothing less than historic. Over the
    years, we have witnessed many solutions directed at these
    endemic and systematic problems but, as our presence here today
    acknowledges, none of those solutions has proven to be ultimate
    or workable solution.
        I think that with this Task Force and the ongoing dialog
    between the Department and the tribal governments, we finally
    have the potential for developing solutions that will work.
    This is in no small part because the Indian beneficiaries are
    thoughtful people who know both how the system works and how it
    ought to work. And so I wish to commend Secretary Norton and
    the Department because I surmise that you have come to the same
    conclusion that I have, that the most effective solutions to
    the challenges confronting Native Americans can be found in
    Indian country.
        And so, on behalf of this committee, I want to thank all of
    you, one and all, for the time and the patience and commitment
    you have made to this process and to these issues. Whether you
    have had the time to step back and take a long view of what you
    are engaged in or not, let me assure you that from the vantage
    point of this committee you are making history. I dare say that
    the history you are making is not just your work as it affects
    the management of the trust funds, but as a model and a
    precedent you are establishing in creating a Federal-tribal
    partnership approach to the resolution of problems. As
    difficult and as tortuous as you may sometimes find the pursuit
    of this journey together, there is great potential for such a
    partnership to address other challenges.
        So if I may speak for the committee, I hope you will keep
    up the good work and do not allow yourselves to get
    discouraged. We are counting on you and looking forward to
    working with you, and I have no doubt that together we will
    find the solutions that will finally work.
        May I call upon the vice chairman of this committee.

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

        Senator Campbell. Thank you, Mr. Chairman. That was a very,
    very fine statement.
        In the almost 10 years I have been with this committee, I
    have seen the debate on reforming Indian trust management
    evolve significantly. When I first came to the Senate in 1992,
    the focus was on efforts to pass the 1994 American Indian Trust
    Fund Management Reform Act. In the summer of 1996, attention
    centered around Judge Lamberth's courtroom when the landmark
    case of Cobell v. Babbitt was filed. In 1997, when I became the
    chairman of this committee, our focus shifted to reviewing a
    strategic plan filed by Paul Holman, the first special trustee.
    Since 1997, we have debated and discussed the failed TAAMs
    computer system, two high-level implementation plans, and
    millions of dollars spent on ill-fated trust reforms.
        I must say now, Mr. Chairman, as the vice chairman of this
    committee, I am encouraged the joint tribal leaders and the
    Department of the Interior trust Task Force consultation
    process has begun to seriously hash out the proposals for
    reform, with tribal input and tribal consultation.
        Though fundamental differences remain between the tribes
    and the Department, and I think in some cases between one tribe
    and another tribe, I believe the debate is being held exactly
    where it should be, between the trustee and the tribes. The
    tribes and the Department know the most about the problems that
    continue to stand in the way of real trust reform. I am hopeful
    the Task Force process is providing an opportunity to negotiate
    honestly and openly about how we go best about framing a new
    opportunity in trust reform.
        There have been some points of contention but I know that
    in my case I have had a staff person at every single meeting of
    the Task Force, I believe that they are making great progress,
    as you do, and are agreeing much more than they are
    disagreeing. This is not an easy job, as you alluded to, Mr.
    Chairman. There were nearly 30 reorganization proposals
    submitted to the Task Force for its consideration. But I am
    convinced that people of good will who believe, as I do, that
    solution is long over-due can find the way through this morass.
    Past solutions have not worked because, in my view, Indian
    people were not involved in crafting a bill. That is one of the
    reasons I asked, by the way, to delay any further action on any
    bill until we heard from this panel today and until there is an
    opportunity for other tribes to have their voices heard too.
    But they are getting closer to a consensus.
        As the Task Force does its work, I believe Congress needs
    to continue focusing on the core problems we can help with,
    including land fractionation, probating Indian estates, and a
    host of other matters that will never provide the kind of
    splash the bigger issues do. Working together, we have already
    removed the threat of massive tribal law suits against the
    United States. With this Administration's support, the House
    and Senate passed S. 1857, which we both worked on, Mr.
    Chairman, the Act to encourage a negotiated settlement of
    tribal claims against the United States, which was signed by
    the President in March of this year.
        I am one who is looking very anxiously to the remaining
    consultation sessions and hope very much the Task Force will
    produce a proposal that the tribes and the Administration
    support. I am not looking forward to another exercise in
    futility writing a bill that we cannot get signed into law. The
    only way we are going to start writing checks to tribes, which
    they have long waited for, is to get a bill signed into law.
    That means that we have got to have something that both the
    Administration can support and tribes can support. But I remain
    hopeful that we can find that solution. I am looking forward to
    the long over-due resolution of the injustice that Indian
    people have faced in the past on this issue. Thank you, Mr.
    Chairman.
        The Chairman. Thank you very much.
        May I recognize the Senator from Wyoming.

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

        Senator Thomas. Thank you very much, Mr. Chairman. I am
    sorry I am going to have to go to another committee markup. But
    I simply want to express my interest and say how important I
    think this issue is. We have been working at it for a very long
    time. And I am delighted the Task Force is there.
        Sometimes I wonder--I see the title of this hearing is for
    the reorganization of the Department of the Interior. It seems
    to me it goes much beyond the reorganization. The
    reorganization is almost secondary to dealing with the issues
    that are there. We are going to spend all of our time talking
    about the reorganization. I think we ought to really focus on
    solving the problems. Now I understand the reorganization is
    designed to do that, but I am afraid we have been a little
    diverted into the structure as opposed to the issues.
        It is time. Time has passed for us to deal with these
    things, and we must do it. I just wanted to make the point that
    certainly our reservations and our tribes in Wyoming, Eastern
    Shoshone and Northern Arapaho, have had people involved and
    want to continue. I understand the Department and the tribal
    leaders have scheduled some meetings in that part of the
    country and I certainly hope that can happen.
        Mr. Chairman and Mr. Vice Chairman, I appreciate what you
    do. It is time we get this issue resolved. Thank you.
        The Chairman. I thank you very much.
        May I now recognize the Senator from Hawaii.

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

        Senator Akaka. Thank you very much, Mr. Chairman. I thank
    you and the vice chairman for holding this important oversight
    hearing on the status of the dialog between the Department of
    the Interior and the Tribal Trust Fund Management and Reform
    Task Force regarding the handling of assets held in trust for
    Indian tribes and individual Indians by the Department of the
    Interior. This has become about because of the chairman's and
    this committee's effort to try to do something about the
    difficulties experienced by the Federal Government regarding
    the management of Indian trust assets.
        The complexity surrounding Federal management of assets
    held in trust for Indians has been an issue before Congress and
    this committee for a number of years. As a member of the Senate
    Energy Committee, I participated in hearings a few years ago
    addressing the computer systems that were going to be utilized
    to address the challenges associated with the management of
    Indian trust assets.
        Mr. Chairman, I am looking forward to hearing from our
    witnesses this morning as I am deeply interested in the dialog
    that has been occurring between the Federal Government and
    tribal leaders in an attempt to begin to resolve these issues.
    I believe that it is essential for the Government to consult
    with Indian country to develop ways to overcome these
    difficulties experienced by the Federal Government regarding
    the management of Indian trust assets. I am pleased to know
    that the concerned parties have an opportunity to participate
    in this process, and I commend all of you for your efforts.
    Thank you very much, Mr. Chairman.
        The Chairman. I thank you very much, Senator.
        The committee is most pleased to welcome the Deputy
    Secretary of the Department of the Interior, J. Steven Griles.
        Mr. Secretary.

         STATEMENT OF J. STEVEN GRILES, DEPUTY SECRETARY, U.S.
               DEPARTMENT OF THE INTERIOR, WASHINGTON, DC

        Mr. Griles. Good morning, Mr. Chairman and Mr. Vice
    Chairman, Senators. Let me just say that we appreciate your
    opening remarks and your understanding of what is an historic,
    in my opinion, opportunity to deal with these very complex and
    very difficult issues. I would like to ask that my entire
    statement be submitted for the record.
        The Chairman. Without objection.
        Mr. Griles. Before I go further, let me just give the
    committee a little background. For the last few days I have
    been out in Arizona with the fire and what was going on out
    there. I did not get back until about 4:30 a.m. this morning
    because United Airline's flights were 6 hours delayed. But I
    just wanted to let you know that President Bush was there
    yesterday. He came up to the fire and declared the area of the
    fire a disaster area, which includes about one-half of the area
    that has been burned is part of White Mountain Apache Fort
    Apache Reservation.
        The chairman of the tribe, Dallas Massey, met with
    President Bush yesterday and discussed the impact of the fire
    on the reservation, particularly the sawmills, the hunting, and
    all that the tribe has as their activities. We are working
    diligently, Mr. Chairman, to see that we get a rehabilitation
    program immediately implemented as soon as we get this fire
    under control and out. It is an historic fire in the sense of
    modern day. We have four teams applied to the fire. Over 300
    homes have been burned. We do not have it under control. We do
    not have it contained. We need help from Mother Nature and God.
    So, we have got some of our best people in the country fighting
    this fire right now to try to deal with that.
        Let me just say for my testimony, sir, that the
    relationship that we have established with the Task Force
    members, with the two cochairmen that are here with me today,
    that I have learned a great deal from them and the other Task
    Force members and other tribal leaders who are participating.
    This has been a great experience and we have a much greater
    understanding of Indian country's needs and I think they have
    of what our concerns are.
        If it would be appropriate, Mr. Chairman, there are a
    number of Task Force members who are not testifying today,
    would it be appropriate to ask them if they could stand and be
    recognized?
        The Chairman. It would be most appropriate, sir.
        Mr. Griles. Maybe Chairman Hall could introduce you to them
    because they have come a long way and their participation has
    been absolute. They have spent a lot of their own personal time
    and a lot of sacrifice of their time to come to these meetings
    numerous times, not just Task Force meetings, but subcommittee
    meetings that go on to try to resolve these complete issues.
        [Task force members recognized.]
        Mr. Griles. We really appreciate the opportunity to provide
    a status update to you on the report the Task Force did and
    presented to the secretary on June 4.
        The Task Force efforts are basically focused on three
    things: Who, that is, what are the organizational options that
    were presented. I believe that Tex and Sue will be discussing
    those. The what, what is the strategic plan, the business
    operations plan that we are involved in. We are not only
    looking, as Senator Craig Thomas indicated, at the
    organization, but what is the business of trust and what is the
    business that we are engaged in with BIA and with Indian
    country. We have got a whole subcommittee that is involved in
    that effort to identify that, the ``as is business,'' what are
    we doing. And then how should we go forward to do that business
    better. So we have got a process, we have got involvement and
    consultation with the tribes involved in that.
        This Task Force is ongoing. Last week, at the National NCI
    mid-year meeting in Bismarck, the secretary was there and spent
    a number of hours in which she listened to Indian country. We
    have got 12 additional regional consultation meetings that are
    starting. Some have already occurred and more will occur over
    the next few weeks, and they are listed in my testimony, the
    locations and times of those.
        We are not unaware of the legislative calendar, Mr.
    Chairman, and we anticipate further feedback to Congress in the
    near future. We are pleased to know what date you have set the
    next hearing and I know the Task Force members will work toward
    trying to see if we can come to some consensus on that.
        I would like to allow, if we could, Mr. Chairman, the
    remainder of the Department's comments to come from someone who
    I have come to know and have the highest respect for, the
    Assistant Secretary of Indian Affairs Neal McCaleb.
        The Chairman. I thank you very much, Mr. Secretary,
    especially for your status report on the Arizona fires. I wish
    to assure you that this committee stands ready to do whatever
    we can to work with you in alleviating the pain and suffering
    caused by this fire.
        Mr. Griles. thank you, sir.
        The Chairman. Thank you very much, sir.
        Now it is our pleasure once again to welcome the Assistant
    Secretary of the Bureau of Indian Affairs, Neal McCaleb.
        Mr. Secretary.

     STATEMENT OF NEAL A. McCALEB, ASSISTANT SECRETARY, BUREAU OF
       INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC

        Mr. McCaleb. Thank you very much, Mr. Chairman, members of
    the committee. My remarks will be brief. I want to comment not
    so much on the substance of what has been accomplished by the
    Task Force, and it is considerable to this point, but I would
    remind you in our time before you that just a little over a
    year ago in my confirmation hearings I made the comment
    relative to the trust, the noun ``Trust,'' with a capital
    ``T,'' that there had been a serious erosion of trust on the
    part of the BIA, the trustee, and on the part of the Indian
    clients. I also said that there was a critical need for the
    restoration of the credibility of the trustee with the
    beneficiaries.
        Trust, like respect, and when I say ``trust'' it is with a
    small ``t,'' the verb, trust, like respect, is not something
    that can be demanded by authority but must be given willingly.
    And trust, I think, has been the major work product of this
    joint committee which has been fundamentally driven and
    controlled by the tribal leadership present on the committee.
    They have been the primary movers and have set the agenda as we
    go along.
        In this process of working together, there has blossomed a
    true flower of trust from the bud of hope. It is our commitment
    and my desire to keep that flower of trust nurtured and well,
    because without that there can be no organizational trust that
    will be truly functional.
        I would just close by reminding myself and all those in
    this room who have the responsibility of this trust that St.
    Paul, when he wrote the second letter to the Corinthians, said,
    ``To those who have been given a trust, it is required that
    they be found faithful.'' And it is our effort in this
    committee to be found faithful to our trust. Thank you.
        [Prepared joint statement of Messrs. Griles and McCaleb
    appears in appendix.]
        The Chairman. I thank you very much, Mr. Secretary.
        Now it is my pleasure to call upon the chairman of the
    three affiliated tribes of the Fort Berthold Reservation of New
    Town, ND, Tex Hall.
        Mr Chairman.

     STATEMENT OF HON. TEX G. HALL, CHAIRMAN, MANDAN, HIDATSA, AND
    ARIKARA NATION, TRIBAL COCHAIR, TRIBAL LEADER/DEPARTMENT OF THE
                    INTERIOR TRUST REFORM TASK FORCE

        Mr. Hall. [Greeting in Native language.] Thank you, Senator
    Inouye and Senator Campbell, for this hearing and giving us an
    opportunity as a Trust Reform Task Force and as a cochair for
    the tribal side, with my colleague, Chairwoman Sue Masten, as
    well as Assistant Secretary McCaleb and Steven Griles, the
    other cochairs on the Federal side. It truly is a joint effort
    on this very important issue.
        If I could, Mr. Chairman, I would like to introduce the
    subcommittee and I would like to have them please stand after I
    recognize their names. Cochairs of the Legislative Subcommittee
    are Governor Bill Anoatubby from the tribal side, and David
    Bernhardt from the Department side. If they would please stand.
    Cochairs of the Business Processing and Modeling Work Group are
    Tim Martin, executive director of USET, from the tribal side,
    and Ross Swimmer from the Department side. And the other
    subcommittee is the Proposal Review Subcommittee, and we have
    Alvin Windyboy, who is not here I understand, and Jim Cason
    from the Department side. And then we have another Task Force
    member here, George Arthur from the Navajo Nation. And then, of
    course, we have Tom Slonaker from the DOI Office of Special
    Trustees is here. I believe that is all of the Task Force
    members. I hope I did not miss anybody.
        The Chairman. Before you proceed, Mr. Chairman, I want to
    thank all of you for the work you have put into this effort. We
    appreciate it very much.
        Mr. Hall. They really have, Mr. Chairman, Senator Campbell,
    and Senator Akaka, they really have been working very hard. I
    do not know how many hours I could count up, but it is in the
    hundreds of hours. All of the Task Force is committed to making
    this effort a reality.
        It really is a matter of trust, as Mr. McCaleb had
    indicated, the verb ``trust.'' I can remember when we started
    this Task Force after the Department rolled out BITAM in
    November 2001 and it was unanimously opposed by the tribes. We
    were at Spokane at the NCI annual convention where there was
    over 3,000 participants that were registered, and we all
    decided we needed to put our heads together as tribal nations
    and decide how we were going to go about this. Then, of course,
    the idea of the Task Force was formulated. I am very happy to
    report that after 7 months we have come a long way.
        But let me get into some of my testimony, Mr. Chairman, if
    I could. Again for the record, my name is Tex Hall, chairman of
    the Mandan, Hidatsa, and Arikara Nation, and also the NCI
    president and cochair of this Tribal-Federal Joint Task Force
    on the Trust Reform. I would like to give you a report on how
    far we have come in our discussions as tribal leaders and as a
    Department of the Interior over the past 7 months.
        Tribal leaders believe that this matter is every bit as
    important as the Enron scandal. I remember being here in
    February, I believe the Senate committee hearing was on
    February 26, and I believe there was a Senate committee hearing
    the Enron issue and all the media was over there. That was what
    was more important. My point is this is just as important to
    the tribal leadership. This has been an ongoing broken trust
    for over 100 years and we are now coming together to finally
    get some resolution to this issue.
        The Task Force itself is made up of 24 tribal leaders from
    throughout the country. They were elected from their 12 BIA
    regions. So that is two tribal leaders and one alternate, for a
    total 36 that were elected by their tribes. Of course, we had
    the national consultation last Tuesday, as was mentioned
    previously by Mr. Griles, in Bismarck. A great turnout, and we
    appreciate the Secretary being there and her commitment in
    coming to Bismarck, not that it is that hard to find, Bismarck,
    but there is only a small airport there and there is a lot of
    scheduling that the staff has to do to get in and out of
    Bismarck. Also, we appreciate her coming to the United Tribes
    Technical College and talking about education. So we really
    appreciate that.
        But, again, the Task Force was created as a result of the
    proposal of reorganization by the Department, filed by the
    Department in the Cobell litigation in early November of last
    year. The Department's proposal calls for the creation of an
    entirely new Bureau of Indian Trust Assets Management, or
    BITAM, which would have given BITAM what the Department called
    trust functions and left in the BIA all the other services that
    BIA provides.
        Tribes and their leaders were unanimously opposed to this
    proposal for many reasons. Tribes said, and continue to say,
    that all services to tribes provided by the DOI need to be
    provided within a single agency, and that agency is the Bureau
    of Indian Affairs. Tribes, and especially those in my region,
    the Great Plains, point out that the services in the treaties
    did not distinguish between trust services and other services.
    Everything the United States does for tribes comes from a
    treaty or a legal obligation. So on that point, tribal
    delegates are now in general agreement with the Department, and
    we are thankful that the Secretary has told us that she has
    withdrawn the BITAM proposal in her June 4 letter to the tribes
    and also in her opening comments at the national consultation
    last Tuesday, June 18. Although I am not sure that everything
    has been filed in the Cobell litigation to show that DOI has
    withdrawn that proposal. So that is a point that I would like
    to leave for the record.
        Reaction to BITAM when it initially came out. At the first
    meeting with the Secretary at which the BITAM proposal was
    discussed in Albuquerque in December 2001, tribal leaders,
    including myself, called for a Task Force to develop an
    alternative to BITAM. And as the Assistant Secretary and other
    Department officials continued to tour Indian country and
    listen to tribal leader after tribal leader complain that BITAM
    was not the answer to trust reform, the Department and tribal
    leaders proposed that a joint Task Force should meet to work
    out an alternative to BITAM that everyone could support. And,
    again, Sue Masten, chairwoman of the Yurok, and myself have
    been elected cochairs of this Task Force.
        As a little bit of background, during the past 6 months we
    have met in formal sessions five times, beginning in
    Shepherdstown, Va, in the early part of February at the
    invitation of the Secretary, then in Phoenix, San Diego,
    Minneapolis, and just 2 weeks ago in Bismarck, ND. Our first
    two or three meetings were intense discussions about just
    process and protocols, and how do we go about business, and how
    do we agree on our issues, and if we disagree, how do we come
    to some resolution on that. So the first part of the meetings
    were basically just a lot on that and what was the scope of the
    Task Force. What was the purpose and what was the scope? What
    were we trying to accomplish? And how would the various tribal
    leaders be recognized? I mentioned in Shepherdstown it was
    almost like talking to the U.N. because we had tribal leaders
    from many different parts of the country, well, actually, 36,
    and how would that recognition be because they were all
    sovereign nations, independent sovereign nations.
        Then what were the committees that needed to be
    established? And what was the process by which we would gain
    agreement? And I am happy to add, we agreed on consensus, on
    that consensus process. Again, as I mentioned in the
    introductory, we basically established three main
    subcommittees; one dealing with the various alternative
    proposals to BITAM, one dealing with the legislative needs, and
    one dealing with the scope of carrying out the contract the
    Department has with EDS, and that is looking at the ``as- is''
    model, what is happening currently at each of the local levels.
        Our committees have met by telephone and in person numerous
    times. Each Task Force member has spent well over hundreds of
    hours in meetings alone on this task of trust reform. And now
    we are getting to the heart of the issue of trust reform in our
    discussions. I can tell you that our efforts are coming into
    focus now. We are getting to the very issues in our discussions
    and I believe we are making headway toward working out a
    legislative solution as well as an administrative solution.
    Discussions are vigorous and we are beginning to see that. We
    have many agreements and some disagreements.
        What the Joint Task Force agrees on are as follows:
        We agree that trust reform is needed. The status quo is
    unacceptable.
        We agree that the BIA should not be split into two separate
    bureaus. And we are appreciative again that BITAM is dead and
    that the Secretary has indicated that in her June 4 letter and
    in her opening comments on June 18 at the national
    consultation.
        We agree that the Department and the BIA must be held
    accountable to the tribal and individual Indian beneficiaries.
        We agree that those responsible for trust reform must
    answer to a single person in a chain of command.
        We agree that there must be adequate resources to carry out
    all those trust functions. If we do not have the resources, all
    of the reorganization won't mean anything if we do not have the
    resources to do it.
        And finally, we agree that there must be some kind of
    oversight for those carrying out the trust responsibilities by
    some independent body.
        What I want to emphasize on this last issue concerning the
    development of an independent entity to ensure accountability
    to the beneficiary, this is most likely an area of disagreement
    between the tribal members of the Task Force and DOI officials.
    Last week in Bismarck, tribal officials from around the country
    had their first chance in several months to speak candidly to
    the Secretary about what kind of trust reform they wanted. Many
    tribal leaders in Bismarck on June 18 had expressed their
    viewpoints of wanting an independent commission that had real
    teeth, a commission that could take actions to make sure that
    trust funds management and trust asset management functions
    would be carried out by the Department. And because tribal
    leaders believe that the creation of an independent commission
    is one of the most important things Congress can do
    legislatively, if not the most important thing, I would like to
    spend the remainder of the time talking about that independent
    commission.
        First of all, the commission must be independent of the
    Department of the Interior. Everyone has seen that the Special
    Trustee appointed under the 1994 Reform Act is not independent
    enough to get the job done. Originally, the 1994 Trust Reform
    Act was written to have the Special Trustee be independent. But
    it did not happen. And the experts tell me that because it is
    an executive branch commission, the President probably has to
    appoint the members to this commission.
        Second, the commission must have members who know how the
    trust should be carried out. These members must be qualified
    and understand how fiduciary trust should operate and
    understand the issues and responsibilities related to the
    United States' trust responsibility to Indian people. The
    commission needs to have stakeholders on it. It should have
    Native Americans on it. Quite possibly those members should be
    full-time. And how many? Enough to get the job done. We have
    not quite decided on that issue. But the Task Force and the
    tribal side is working very hard on this issue.
        And now comes the hard part. What are the powers of the
    commission? We all basically agree that the commission should
    set the trust standards and establish procedures for carrying
    out the trust funds and trust asset management functions. Where
    we probably disagree is in determining what the commission
    should be able to do to ensure that trust funds management and
    trust asset management functions are being carried out
    properly.
        The next point is on sanction powers. Most tribal leaders
    believe that in order for trust reform to really work, the
    independent commission must be able to audit financial
    accounts, investigate allegations that those managing trust
    responsibilities at the Department are not doing their job and
    require compliance. Power to issue sanctions, monitor
    performance of carrying out the trust responsibilities by DOI,
    which includes the power to review decisions by DOI on trust
    management and to enforce its points of view if DOI disagrees.
    Monitor the DOI budget and report to Congress whether the DOI
    budget for trust fund management and trust asset management is
    sufficient.
        DOI has raised questions about these powers and have asked
    what happens if the commission orders the Department to do
    something if it does not have the funds to do it. And that is a
    very legitimate question. I think part of the answer is to make
    sure there are adequate resources. There simply has to be the
    resources in order for this to actually happen.
        This committee's efforts and ability to assist in providing
    adequate resources are critical to the overall success of trust
    reform. We are often told that we must live within the
    resources that are available. But the tribes and the court in
    Cobell are saying that trust functions must continue to be
    carried out. For example, at the Fort Berthold local agency,
    approximately eight positions are needed to fully carry out
    trust asset management and trust funds management requirements
    imposed by the regulations that were put in place in January
    last year. We do not have those eight positions yet, they are
    not hired. So we cannot carry out the functions if we do not
    have the people.
        DOI also I believe thinks there may be some constitutional
    questions with an independent commission. We are making efforts
    to make sure that those questions are answered ahead of time,
    and we want to work with them, the Administration, and work
    with Congress on this very issue. But I would note that we feel
    there is nothing in the Constitution that prevents an Executive
    Branch department from being reviewed by an independent
    commission.
        Finally, I think it is only fair to point out some other
    concerns we have as we continue to move forward towards a
    legislative solution.
        We remain concerned that the Department is seeking to
    remove Mr. Joe Keefer as Court Monitor. We have invited Mr.
    Keefer to all of our Task Force meetings as we believe his
    presence alone helps keep us on track and focused on what we
    need to do. And we have not seen him be biased on any of the
    issues.
        We are also continually concerned about the computer
    shutdown, that being LRIS, the Land Records Information System.
    I understand it is partially fixed. But after 7 months, it is
    still causing problems. People are still suffering, probates
    are stopped, land transfers are delayed, and this causes harm
    economically to tribes and their members because land transfers
    cannot take place. This affects us at the Three Affiliate
    Tribes because we are right in the middle of a construction
    season in the norther plains and we all know how short that
    construction season is.
        We are also concerned that the Justice Department has
    appealed trust related cases to the United States Supreme Court
    which has accepted the cases for review, that being the White
    Mountain Apache case, and the Navajo Nation case. These cases
    should be settled in a manner that does not diminish the scope
    of the United States' trust responsibility to tribes. Our
    treaties and the laws of this country set forth what trust
    responsibility is. Congress should be the one to decide how the
    trust responsibility gets carried out, not the U.S. Supreme
    Court.
        We are also concerned about the records destruction. As the
    case is winding down for Arthur Anderson, we understand that
    the records are being destroyed. And the fact that Arthur
    Anderson did the reconciliation reports for tribes and has been
    convicted now of obstruction of justice makes us all very
    uncomfortable. This is important to the Task Force because we
    still have to have a starting point for making the system work.
    We would request assistance from Congress in making sure these
    records are safeguarded.
        Each account will have to have a beginning balance that we
    can all agree on, or at least we will need a process by which
    we can get to that starting point. I know that Senator Campbell
    has offered legislation to get to that starting point, and we
    appreciate him for his efforts and look forward to working with
    him on this very important issue.
        Can we bridge these differences? Time will tell. I know
    that the time clock is ticking. The Task Force will continue to
    meet over the next several months, but tribal leaders believe
    we need a legislative solution on some of these issues. We hope
    to have some kind of draft legislation within a few weeks
    coming up.
        We thank you, Mr. Chairman and Mr. Campbell, for giving us
    an opportunity to present testimony on this very important
    issue. I look forward to answering any questions you may have.
        The Chairman. Thank you very much, Mr. Chairman.
        And now it is my pleasure to call upon the chairperson of
    the Yurok Tribe of Indians of Eureka, California, Sue Masten.

      STATEMENT OF SUSAN MASTEN, CHAIRWOMAN, YUROK TRIBE, TRIBAL
    COCHAIR, TRIBAL LEADER/DEPARTMENT OF THE INTERIOR TRUST REFORM
                               TASK FORCE

        Ms. Masten. [Greeting in Native language.] Good morning,
    Chairman Inouye, Vice Chairman Campbell. It is an honor to be
    before you today to discuss the progress of the Trust Reform
    Task Force.
        I would like to begin by reiterating the Task Force's
    support for the creation of an independent entity to oversee
    trust reform. The Indian trust within the Department of the
    Interior is the only trust in the United States that is not
    subject to any type of external regulation or oversight, and
    this should not be acceptable to anyone. We believe that this
    is one of the major reasons that the Department has mismanaged
    our accounts and gotten away with it for decades. The
    Department has a track record of refusing to perform audits, or
    to set specific trust standards which would guide the action of
    its employees, and has also refused to request adequate budgets
    to perform the trust duties which it is responsible for. You
    cannot expect that the fox can oversee the hen house.
        I serve on the Advisory Board to the Special Trustee. We
    know first-hand how important it is to have independent
    oversight that is not subject to the direction of the
    Secretary. This committee has heard from each of the Special
    Trustees about their inability to perform their duties under
    the 1994 Trust Reform Act because of the lack of independence.
    You have also heard from members of the Advisory Board on this
    issue.
        Congress should create an external, permanent, independent
    entity that would have the ability to enforce trust standards
    making the Department accountable to the beneficiaries.
        Mr. Chairman, we cannot have a trust system where the
    duties of the trustee are defined by the limitations of a
    broken system. We must develop the standards, define the duties
    of the trustee, provide the resources needed for the systems
    and staffing. Once this is completed, we are confident that
    Congress will provide the necessary funding to accomplish the
    task.
        We need an independent commission to monitor trust
    management to ensure that standards are met, because history
    has shown us that the Department of Interior is incapable of
    doing it on its own. Other responsibilities of the independent
    commission would include auditing financial accounts,
    investigations and compliance, and monitoring corrective
    actions.
        In addition to an independent oversight commission, we also
    believe that Congress needs to create a position within the
    Department that will have high-level authority over all Indian
    trust matters.
        The Task Force has reached consensus that it is necessary
    to create a position of Deputy Secretary or Under Secretary of
    Interior for Indian Affairs that would have direct line
    authority over all aspects of Indian affairs within the
    Department. The creation of this position will address the
    major issue raised by both the EDS Report and the court: That
    the Department of the Interior lacks clear lines of authority
    and responsibility to ensure accountability for trust reform.
        The two major entities responsible for trust assets and
    accounting are the Bureau of Indian Affairs and the Office of
    Special Trustee. The lines of authority, responsibility, and
    communication between these two entities has been uncertain and
    at times has come into direct conflict.
        In addition, the Minerals Management Service, the Bureau of
    Land Management, the Office of Hearings and Appeals, the Office
    of American Indian Trust, and the newly created Office of Trust
    Transition and Office of Historical Accounting all have key
    responsibilities for trust transactions. At this time, there is
    no single executive within the Secretary's office who is
    permanently responsible for coordinating trust reform efforts
    and trust management across all of the relevant agencies.
        This absence has hurt the progress of those issues that cut
    across agencies, such as the development of a system
    architecture that integrates trust funds accounting with the
    land and asset management systems. We believe that Congress
    should create the new position of Deputy Secretary or Under
    Secretary for Indian Affairs, and look forward to discussing
    this with you in greater detail.
        The Task Force is still discussing the issue of
    reorganization of the Bureau of Indian Affairs to ensure
    accountability for trust management throughout all operational
    levels. At the sametime working to ensure that resources and
    decisionmaking are placed at the local level wherever possible.
        The most difficult discussions that we are currently
    engaged in are about the reorganization at the regional and
    agency level. The Department has insisted that there must be
    strict separation of trust resource management in a completely
    separate organization from the management of services such as
    housing and roads. However, tribal leaders have insisted just
    as strongly that there must be a single point of decision-
    making authority at the local level to deal with issues that
    cut across both trust resource management and other trust
    services.
        At the local level, nearly all activities on Indian
    reservations take place on trust property--tribal self-
    government, tribal services, and trust fund and resources
    management are all interrelated.
        Successful project management requires coordination and
    timely decisionmaking at the local level. Tribes have a great
    concern that a ``stove piped'' organization would put an
    unbearable level of bureaucracy into the system. Imagine having
    to get central office approval every time that there is a
    disagreement over construction of a road or an irrigation
    ditch. This is something tribes do not want and we do not think
    the Department wants it either.
        We believe that trust reform reorganization can be
    effective to meet its goals and still allow for a single point
    of decisionmaking on trust resource management and trust
    services. We generally agree with the Department that it would
    be valuable to group the trust funds management and the trust
    resource management activities that would have clear lines of
    responsibility and staffing.
        However, accountability is not going to be assured through
    separate organizational structures alone. It can be assured
    through: Identification of duties; adequate funding; qualified
    staffing and training; policies, procedures, and standards;
    internal controls; external audits; transparency; and a focus
    on responsiveness to the beneficiaries.
        I would like to briefly mention a few more items currently
    under discussion by the Task Force for the committee's
    consideration.
        Adequate funding and staffing for trust management. The
    Task Force agrees that a primary issue is getting adequate
    resources to perform the trust duties. The BIA has never been
    provided with an adequate level of financial and human
    resources to fulfill its trust responsibilities to Indian
    country. This chronic neglect has contributed to the
    dysfunctional management and financial systems at all levels of
    the BIA.
        One of the primary concerns of the tribal Task Force
    members is that the trust reform effort not result in a mere
    shifting of resources to trust management, away from the
    critical tribal services such as law enforcement, education,
    alcohol and substance abuse prevention. Tribes should not be
    penalized for the Government's mismanagement of trust assets.
    The cost of trust reform should not be borne by existing tribal
    programs and services. There must be new appropriations for
    trust management if trust reform is going to be effective.
        Under self-determination programs and beneficiary co-
    management, it is critically important that trust reform not
    hinder the progress of the self-determination and tribal co-
    management of natural resources. It is clear that tribes do a
    better job of managing our own resources than the Department
    does, and we must keep the long-term vision in mind. The
    provisions in S. 2212, the Indian Trust Asset and Trust Fund
    Management and Reform Act of 2202, are a good starting point
    for this discussion.
        Ongoing consultation process with beneficiaries for trust
    reform. This Task Force was created for a specific purpose--to
    define reorganizational options to implement trust reform.
    However, the Task Force is also serving as a forum for
    discussion on other related trust reform issues that the
    Department is facing, such as the computer shutdown, data
    cleanup, historical accounting, TAMS, et cetera. The Task Force
    has discussed the development of a long-term strategy for
    ensuring continued communications and consultation between
    tribal leaders and the Department as trust reform moves
    forward.
        Process for settling historic account balances. The Task
    Force has had discussions about the need to set up a forum for
    the resolution of current and subsequent litigation. Trust
    reform cannot be complete until there is resolution to these
    historical disputes.
        Land consolidation programs. Finally, in order to address
    the escalating magnitude and complexities of land ownership
    patterns and trust fund accounts, Congress must invest in
    Indian land consolidation programs. According to the BIA, the
    56 million acres of trust and restricted lands under its
    supervision are divided into over 2 million different ownership
    interests. Fractionation of ownership interests through
    inheritance has created an accounting nightmare for the Federal
    Government, and must be addressed if trust reform is to occur.
        In conclusion, we find ourselves at a unique opportunity
    that has put high-level Department of the Interior
    representatives at the table with tribal leaders for the first
    time. Although the problem of trust management has existed
    through numerous administrations, never before have we had all
    three branches of Government, Judicial, Congress, and the
    Administration, focused on trust reform.
        We are appreciative of the commitment that Secretary
    Norton, Deputy Secretary Griles, and Assistant Secretary
    McCaleb have demonstrated and for the hard work that they and
    their staff have contributed to the Task Force. And of course I
    would also like to acknowledge the hard work and contributions
    of my esteemed colleagues who have also donated staff resources
    to this effort.
        This has not been an easy task for the Department of the
    Interior or for the tribal leaders. However, we have all been
    committed to stay at the table to work on this most important
    issue. If we continue to maintain this serious level of effort,
    we firmly believe that we can reach some policy decisions that
    will put trust reform effort on track to a successful
    conclusion, and we are looking forward to working closely with
    you on any legislation necessary to implement trust reform.
        We also would like to thank the Committee, as always, for
    your continued interest on this issue and all issues of
    importance to Indian country. Thank you.
        [Prepared joint statement of Mr. Hall and Ms. Masten appear
    in appendix.]
        The Chairman. I thank you very much, Chair Masten.
        Listening to the testimony, it is apparent much has been
    accomplished towards meeting the mission of this Task Force.
    But it also seems apparent that there are a few more steps to
    be taken.
        My first question is, can this be legislatively handled by
    separate bills, or should it be addressed in one bill? Are the
    issues inseparable or can they be separated?
        Mr. Secretary? And I will ask the whole panel here.
        Mr. Griles. I think, Mr. Chairman, it is the right
    question. I think if we are looking simply at an organizational
    structure, that potentially could be one bill. But as Chairman
    Masten so appropriately laid out, there are lots of issues that
    the Task Force is working on, some like the fractionation issue
    and things of that nature will require additional legislative
    support.
        So as the Task Force has evolved, as we have developed more
    issues and have broadened our breadth and length and scope, I
    think that we are finding that there will be other legislative
    issues that we need to bring back to you and we would like to
    invite your advice on how best to try to address those.
        So the immediate issue is the organization, which we do
    think would probably need some legislative support. But there
    are other issues truly that we are going to need more
    legislative support on also.
        The Chairman. Chairman Hall.
        Mr. Hall. Thank you for the question, Mr. Chairman. I
    really think that the hearing that you have laid out I believe
    you said July 30 is a real opportune time for the tribes to
    present their number one priority in this legislative solution
    is the independent commission. And so I think that window is
    open here for the 107th Congress and the tribes are wanting to
    get some sort of legislation during this session on that issue.
    So that way everything can continue to move. But that is the
    first priority right now. And as Mr. Griles had indicated,
    there may be some need later on, but right now that appears to
    be the priority that the tribes are focused on. We are hoping
    we can get something done during this session.
        The Chairman. Are you confident that by July 30 this
    committee can study a proposal by the Task Force on this issue?
        Mr. Hall. Yes; actually, we are working on it with Governor
    Anoatubby and David Bernhardt in the Legislative Subcommittee.
    I am confident that the Task Force and that subcommittee will
    have a draft for review, I do not know what timeframe before
    the 30th that would entail. But we would have something.
        The Chairman. In your testimony, Chairman Hall, you noted I
    believe about ten areas of agreement.
        Mr. Hall. Yes.
        The Chairman. Can they be handled separately or must they
    await one bill?
        Mr. Hall. I think that those could be handled in one bill,
    Mr. Chairman.
        The Chairman. At this time, or until the mission is
    accomplished?
        Mr. Hall. We talked about the BIA should not be split into
    two separate bureaus. That is an agreement that is right now.
    We agree on that right now. The accountability is another point
    that we all agree on. But it is just an accountability thing. A
    single sponsor, that can be done, the single person in the
    chain of command. Adequate resources, I think that as we are
    looking for the 2004 budget, I think that that is something
    that can be done there. Then, of course, the independent
    commission. So I think the single sponsor and the independent
    commission are two I think that could be handled as of July 30,
    and the rest of them could be brought forward in the final
    bill.
        The Chairman. Well, obviously, we have many questions and
    some of the questions have been submitted by other members of
    the committee. And because of the apparent love-fest that we
    have here. [Laughter.]
        I am reluctant to ask questions that may break up this love
    affair. But there are a few I think I should ask.
        Mr. Griles. Do we get time to consult before we respond?
    [Laughter.]
        The Chairman. Secretary Griles, in the Department's view,
    what is the legal standard that the United States must meet in
    its management of tribal lands and resources that are now held
    in trust? Is it the standard applicable to a common law private
    fiduciary, or some higher standard, or some lower standard?
    What standard are we addressing here?
        Mr. Griles. That is a fundamental question that you are
    asking for which we have had a number of statutes, rules,
    regulations that we have adopted to try to define this trust
    responsibility. At this point, I think there are two cases that
    are before the Supreme Court. The Supreme Court is going to be
    addressing the very question you have just asked and will
    address that in the very near term. I think, as a non-lawyer, I
    am best to tell you that we are looking for those decisions to
    give us some further guidance.
        But we have two Supreme Court decisions already, Mitchell I
    and Mitchell II, which give us guidance as to what our trust
    responsibilities are. And in our principles, and policies, and
    procedures that we are evolving with the Task Force, we are
    looking to the private trust guidance and principles that they
    have to see how better we can adopt things that have been
    successful in the private sector to apply to our trust
    obligations. And we are working with the tribes as well as the
    Tribal Task Force to put those into place because they are
    proven and we can use those to better administer the trust
    responsibilities.
        The Chairman. Would it be correct to state that the Task
    Force is awaiting the decision of the Supreme Court in the
    cases before it, especially the Navajo case, before we can
    discuss the legal standard of management? Chairman Hall?
        Mr. Hall. Personally, I do not think so, Mr. Chairman. I
    think that Congress is the ultimate trustee and sets that
    standard. We have heard it over and over that it is the highest
    fiduciary responsibility that Congress has. So these are very
    important trust cases and, as I mentioned in my testimony, I
    think Congress has that obligation to define that trust
    responsibility and not have the Supreme Court do that. So we
    are very concerned about that. I think that it should be done
    before it goes to the Supreme Court.
        The Chairman. So your position is that this Congress should
    act upon this issue before the court rules?
        Mr. Hall. Yes; I believe it should. I believe it should
    review these cases before it goes to the Supreme Court because
    that would affect everything else. Every other tribe in the
    country would be affected by this. And so this is a real
    critical juncture of where we are at and where we are going in
    the future in regards to the Congress and carrying out its
    trust responsibilities to Indian country.
        The Chairman. What is your view, Mr. Secretary, on this
    independent commission?
        Mr. Griles. First, Mr. Chairman, we support an oversight of
    independent-type commission review. What we are trying work
    with the tribal leaders on is the definitions that Chairman
    Hall was speaking to, setting trust standards, the authority
    and power to issue sanctions, that kind of question. How does
    that interrelate with the overall authority of the Secretary of
    the Interior, and separation of powers, and all of those kinds
    of legal questions. As Chairman Hall indicated, we are working
    together. The Task Force has asked for some legal briefs
    analysis to be performed.
        So we, too, want to support an independent commission or a
    commission, and the term ``independent'' carries different
    meaning to all of us. We are trying to define that in a
    consensus mode that we could bring back to you, hopefully by
    the 30th of July, and could indicate to you where we think that
    works. There will be give and take. We will have our view and
    others will have their view and we will try to find a consensus
    that we can bring back to you, Mr. Chairman.
        The Chairman. Because you are still in the negotiating
    stage, I am reluctant to ask questions. But I have one more.
    Chairman Hall mentioned that this commission should have the
    authority to impose sanctions. Does the Interior Department
    have any thoughts on that?
        Mr. Griles. I am not sure, Mr. Chairman, what the word
    ``sanctions'' implies at this point.
        The Chairman. I realize that is rather vague because I do
    not think you mentioned what sort of sanctions you have in
    mind.
        Mr. Griles. So I think it is an area which we really need
    to work with the Task Force on and say what do we need?
    Chairman Hall and Chairwoman Masten both, all of us want to
    find the best solution so the tribal beneficiaries and the
    individual beneficiaries have an assurance that the trust
    obligations are being honored and being delivered in an
    efficient, effective, and in the correct manner. How do we take
    that goal and iterate that into a commission and to the Bureau
    of Indian Affairs. If we set up, say, and Under Secretary and
    then the Secretary, how does all that fit together.
        The one thing you do not want is two people responsible and
    nobody held accountable. And so, as we look at this, we have
    got to assure accountability and responsibility, and assure
    that somebody can be held accountable and should be held
    responsible for trust beneficiaries service delivery. And
    whatever we do here, we have got to end up with that type of
    approach. I think that we all want that to happen, but how do
    we take the independent oversight body or a commission with
    sanctions or whatever and put that to play so it meets both the
    constitutional concerns but, more importantly, the delivery of
    services and accountability and responsibility.
        The Chairman. So the Department is open as to what steps
    must be taken to bring about accountability? If it calls for
    sanctions, so be it.
        Mr. Griles. We just need to work together to figure that
    out, Mr. Chairman. This Task Force works long hours and many
    days, and over the next three or four weeks, or whatever the
    time is, we are going to continue to do that. In fact, we are
    going to meet after this hearing to pursue some of these
    thoughts.
        The Chairman. You know, when this is accomplished we will
    have a big celebration I think.
        Mr. Griles. I will buy the champagne, Mr. Chairman.
    [Laughter.]
        The Chairman. Mr. Vice Chairman.
        Senator Campbell. Thank you, Mr. Chairman. I have got about
    40 questions. Unfortunately, wouldn't you know it, the
    conference committee between the House and Senate on the energy
    bill is taking place in just a short while, so I only have
    about another one-half hour I can be here.
        As you know, some of us, me, you, and several others,
    worked very hard to get an Indian section in that energy bill.
    It is not in the House bill, as you probably know, Tex. Even
    what we could get in the Senate side was only really dealing
    with conservation and renewables and so on, not with any
    opportunities for tribes to develop their non-renewable
    resources. So we are working very hard trying to make sure our
    colleagues on the other side of the Hill recognize the
    importance of getting us less dependent on foreign energy by
    giving some opportunities to Indian tribes which have roughly a
    third of all the low-sulphur coal in America under their
    reservations, as you know, and oil, and gas, and other
    resources.
        So it is a real important conference and I simply cannot
    miss that. So when I skip out a little early, I did not want
    you to think I am not concerned about this issue. That one is
    also really important to Indian country.
        You mentioned the date of July 30 of having something maybe
    concrete for a draft. I have to remind you that we are supposed
    to get out about July 30 or so for a 30-day recess. Since it is
    election year, that gives us about 30 days after that. There is
    some talk about coming back for a session after the election.
    But it looks to me like we only have about a month or a little
    more to be able to work on this to try to get it through this
    year and there is an awful lot of unresolved things. I would
    just point out to you so you know that we are up against a time
    constraint that we may or may not be able to reach some
    consensus to get a bill passed.
        My view has been that the Task Force has to help write this
    thing. If it is going to be satisfactory to the tribes and to
    the Administration, they have got to help write it.
        I might also, before I ask a couple of questions, tell you,
    Deputy Secretary Griles, I am glad you mentioned the fires in
    Arizona. What a lot of people do not know is that a lot of good
    Indian kids are out there on those fire lines.
        Mr. Griles. Very much sir.
        Senator Campbell. I just bumped into one group in Colorado
    the other day, a group of Navajo Hotshots, as they are called.
    We have about 270,000 or 280,000 acres on fire in Colorado. Not
    as big as Arizona, but hugely big. Those kids are all over the
    country, Indian youngsters, now fighting those fires, trying to
    protect lives and property of all Americans. This Arizona fire,
    about half of it being on the White Mountain Apache
    Reservation, I know that we are going to make sure that we do
    our best to return the favor of all these Indian kids that have
    tried to protect our lives and property.
        Let me get to a couple of questions now, Mr. Chairman. One
    to perhaps Neal or Deputy Secretary Griles. Your written
    statement says that the Task Force report recommended that the
    BITAM proposal be replaced by one of the options advanced,
    which the Secretary has agreed to do. So when we look at the
    three options that have been put forward by the Task Force so
    far, is it fair to say that one of those is going to be
    forwarded to the committee that Congress could act on?
        Mr. McCaleb. Yes; that is our objective and I think it will
    be done. We thought it was premature to recommend a specific
    one of the three options until after there was an opportunity
    for national consultation and a full airing of this in Indian
    country to see what their response was to the three options
    that were presented.
        Senator Campbell. I see. Okay. When Chairman Hall mentioned
    that one of the bills, if we did several bills, one could deal
    with the issue of not splitting the Bureau. I do not think we
    have to do that anyway because it can only be split with
    legislative action. If we do nothing, it does not get split.
    Simple as that. So that is probably not necessary to be on the
    table.
        The phase-out of the Special Trustee, I might also ask Neal
    or Deputy Secretary Griles, the phase-out of the Special
    Trustee, given the lack of success we have had really since
    1994 and the huge amount of money we have spent, I can see why
    the tribes want it phased-out and replaced with an independent
    entity with oversight regulatory authority. I think you spoke a
    little bit to that. Then your view is that it might be an
    independent entity with some oversight and advisory capacity
    but not with regulatory capacity?
        Mr. Griles. Senator, I think that is really the fundamental
    question is the duties, responsibilities, and authority of a
    commission. I think we feel that until the trust reform is
    actually pretty much sufficiently completed, we need to have an
    Office of Special Trustee still maintain its role and advise
    the Secretary on what ought to happen. How those two
    interrelate, the Office of Special Trustee and another
    commission or advisory board and what its authority and
    responsibilities are is what we hopefully will be able to come
    back to you with some thoughts on in the next thirty days. We
    need a lot of work to be done on that.
        Senator Campbell, could I just respond to something you
    said also.
        Senator Campbell. Please.
        Mr. Griles. I just want to tell you that when I was out
    there on the fire line there were a lot of Native Americans
    there. I want to say that I also had a meeting with the tribal
    council of the White Mountain Apaches. They are very concerned
    about this fire and the tribal council wants to do everything
    it can to assure the communities there that they are partners
    in those communities and they are just as affected by this fire
    as Show Low and the other communities there. We are working as
    a partner with BIA, and the White Mountain Apache has an
    individual on every one of these teams to work together.
        So this is a huge community, if you will, out there and
    they are working together to bring back resolution and a
    community spirit of solving this problem. I just wanted to make
    sure you understood that the Chairman wanted me to convey that
    to you and to the Committee here.
        Senator Campbell. I appreciate that. We all know that
    homeland security and fighting terrorism are one of, if not,
    our biggest prioritys right now as a Nation. One thing the
    tribes fear is that the reforms we are discussing may take
    place without the resources to implement them. We can pass any
    kind of a bill, but if we do not come up with the money it does
    not get done. It is as simple as that.
        Is it your position that there will be new resources
    available to fund the reform? Or is that going to be covered
    out of existing Indian programs or taken from other Indian
    programs? Maybe Neal might be best to answer that.
        Mr. Griles. Mr. Vice Chairman, Mr. McCaleb can respond, but
    I will also respond for you. We recognize that this President
    has put over $80 million of additional funds this year alone
    into trust reform. At each of these meetings we have had, we
    have had OMB presence there. They are in the audience, they are
    a part of the consultation process. The ``as-is business'' as
    well as the ``business to be'' planning that we are doing with
    EDS and with the Tribal Task Force is intended to--if we are
    going to do this job properly, how much resource do we need?
    What are the types of people we need? How do we structure it so
    these services are delivered?
        We cannot continue to not provide adequate resources. The
    President and the Secretary have shown that effort already with
    this recent 2003 budget that has been submitted. And we are in
    that process of evaluating the 2004 budget. But as we go
    through this, as the new business processes go forward and we
    identify these new resources and what is going to be required,
    we are going to be working with the President, OMB, and with
    you to see how we can best do that.
        Senator Campbell. Well, when we see the President's 2004
    budget, we may be reminding you of that if the resources are
    not able to get the job done.
        Mr. McCaleb. Mr. Vice Chairman, I would respond to that. It
    is my personal commitment to the Indian Task Force members, and
    I am optimistic that this will be supported by the
    Administration and the Congress, that we will not cannibalize
    the already underfunded programs in order to finance the
    necessary improvements and resources required for trust reform.
        Senator Campbell. Thank you. I am sure the tribes will
    appreciate that position.
        To Chairman Hall and Chairwoman Masten, I understand there
    are 29 proposals submitted to the Task Force for its review,
    many of them have common themes. Has the Task Force Legislative
    Committee, did I understand that Chairman Anoatubby is the
    Chairman of that, have they begun the process of framing up
    anything yet that we can look at?
        Mr. Hall. Yes; they have, Mr. Chairman. They have been in
    existence since March, it was formed in March, so they have
    begun the process.
        Senator Campbell. With the chairman's permission, could
    Chairman Anoatubby maybe elaborate for 1 minute or 2 on what
    you have done so far or what we can expect?
        The Chairman. Please.
        Senator Campbell. I realize that there are a lot of
    particulars you probably have not got ironed out yet.
        Mr. Anoatubby. Mr. Vice Chairman and Mr. Chairman, thank
    you for inviting me to the table. I apologize, I am not fully
    prepared; however, I do have some comments that I could make in
    this regard. We have been working with your staff to keep your
    staff informed and they have also been coming to the Task Force
    meetings. We have what we call a memorandum but it one that we
    continue to update that gives the various options that have
    been decided by the Task Force and the various initiatives I
    guess we will have to take in order to seek a legislative
    solution.
        I think the cochairs of this Task Force have very well
    outlined what we have devised. We have not attempted to
    actually create or develop the legislation itself. What we have
    is a set of principles and guidelines that we would follow in
    asking that this Congress would in fact pass legislation to
    address these issues. So as far as the actual development of
    legislation, no, we do not have that. But we do have the
    guidelines.
        The Legislative Committee is working closely with the
    Proposal Review Committee. We attend their meetings, we keep
    abreast of what is happening there, and then we do our best,
    and this also involves the cochair of this committee, David
    Bernhardt of the Secretary's Office, where we consult and we
    develop strategies. One of the strategies that we have is that
    after this meeting the co-chairs will meet with Interior, we
    will discuss those pending issues, and as those issues become
    non-issues and there is some consensus, then we will forward to
    you a report which will give you the information that you need
    to develop legislation.
        Senator Campbell. Okay. I thank you. I mentioned a while
    ago that time has become important because we have not very
    much left in this year. But we want to get it right. Frankly,
    after all the broken promises, we want to try to get it right
    when we write the thing.
        Mr. Anoatubby. Mr. Vice Chairman, we feel very committed to
    dealing with this. We understand the legislative calendar. We
    had hoped by this hearing that we would have one option at
    least for the organizational structure available to you.
    Because the consultation process must be completed before we
    can actually present that option, we felt it would be just a
    little premature for us to forward one. However, I believe, at
    least it is my opinion, that the Task Force has in fact come to
    agreement on the creation of this one line, one single
    individual concept, and the two options, the Deputy Secretary
    or Under Secretary, will be a decision that will be more easily
    made than what it would have been several months ago.
        This can be forwarded to you I believe after the Task Force
    meeting. There is no way to predict, obviously, that this can
    be done because there are a lot of dynamics within the Task
    Force. But I have great hope that by the Task Force meeting in
    July there can be forwarded to you a single option as far as
    the organizational structure is concerned. Again, that is my
    hope. I cannot speak for the entire Task Force, but I am
    committed to it and I believe that the co-chairs are committed
    to it. And as long as the debate does not move in a direction
    that will take us away from it, I surely believe that can be
    accomplished.
        Senator Campbell. Good. Thank you. I know the Task Force is
    working as hard as it can on this. I guess my concern is I want
    to see this come to a resolution, but by the same token, I do
    not think anybody on the committee wants to do something that
    is premature without the Task Force's complete involvement in
    writing some kind of draft proposal we can introduce.
        Sue, did you have something to add?
        Ms. Masten. If I could just add that our focus has mainly
    been on the Under Secretary and/or Deputy Secretary level for
    discussions of legislative matter and also on the independent
    commission. So we still are flushing out other details. So it
    is important that the legislation be able to consider and
    include those things as we develop them. We may not have
    everything by the 30th, but we will certainly have some items
    for consideration. And as we move forward, we will articulate
    in more detail what the remainder items would be.
        Senator Campbell. That will be good in the sense that you
    will have the microphone there. Years ago, President Nixon, who
    inaugrated the best Indian policys, Indian Self-Determination,
    that we deal with now started during the Nixon years, had the
    idea of creating a ``Trust Counsel Authority'' which would have
    avoided the conflicts the United States has when it comes to
    litigating cases dealing with Indian assets and Indian rights.
    Has the Task Force considered that idea or looked up the
    original Nixon proposal?
        Ms. Masten. I appreciate your bringing that to our
    attention because we have not specifically looked at this
    piece. But we have had those concerns and discussions regarding
    the matter and about the conflict in being able to have a
    separate council that would take a look at the effort. So those
    discussions have happened but we have not reached any consensus
    on it. And so I appreciate your bringing that to our attention
    because I personally had forgotten this piece of it and it
    could help us in our discussions at the table.
        Senator Campbell. If you do reach a consensus, will you
    share that with the Committee too, please?
        Ms.  Masten. We certainly will.
        Senator Campbell. Mr. Chairman, I do not want to hog all
    the time. I think Senator Akaka has been waiting patiently, so
    I will be happy to yield to him for his questions.
        The Chairman. Thank you very much.
        The Senator from Hawaii.
        Senator Akaka. Thank you very much, Mr. Chairman.
        Senator Campbell. Senator Akaka, if you would yield just a
    moment. Since I have to leave in 1 minute or two, I do have
    some questions that I am going to submit in writing and ask the
    Task Force members if they could get those answers back to us
    in writing. Thank you. Thank you, Senator.
        Senator Akaka. Mr. Chairman, without question, this is a
    moment in history when a great challenge and a great
    opportunity exists for the indigenous peoples of the United
    States. After all of these years, we are coming to a point
    where we are putting the best minds together at all levels,
    beginning even from the Executive Branch, here in Congress, as
    well as the Judicial Branch, to try to bring together a system
    or a structure that will help the indigenous peoples of the
    United States. For me, this is the moment we are at. That is
    why it is so important that we take time to really scrutinize
    what we are doing and to be certain that what we are doing is
    in the best interest of the indigenous peoples of the United
    States and the United States as well. I am so glad that the
    executive branch is part of this, the tribes are part of this,
    and together we are dialoguing.
        The hearing today is to find out what the dialogue has been
    and how far you have come and whether we are at a moment where
    we can draft and craft legislation that will help bring this
    about. It appears it is close. And when you give a timeframe to
    it, I hope something happens in July. It is not impossible, but
    it means that lots of work has to be done, a lot of dialoguing
    has to be done, decisions will have to be made. So it can be a
    difficult time for all in this effort. And I want to thank the
    Chairman, Senator Inouye, for bringing this about on our side
    to try to bring this to a head.
        It was mentioned about the Under Secretary and the Deputy
    Secretary and that you are thinking of establishing the
    position of Secretary of Indian Affairs in option 2, and in
    option 5 to establish a position for an Under Secretary of
    Indian Affairs. These will be appointed by the President. My
    question is, will there be a process to ensure that the tribes
    have a role in advising the President and Secretary of the
    Interior as to which candidates might be appropriate for these
    positions? That is open to any witness, anybody at the table.
        Ms. Masten. Speaking from the tribal leadership side, we
    certainly would hope that provision would be provided for.
    Because of the magnitude of importance to Indian country, it is
    most appropriate that the tribal leadership would have input.
        Senator Akaka. Any other comments?
        Mr. McCaleb. Senator, that is a delicate issue because,
    clearly, we would like to see tribal involvement and assessment
    of the candidates for that position. At the same time, there is
    I think a need and a precedent to preserve the power of the
    Executive to make that appointment. I think that is something
    that we need to work out. We thank you for raising that issue
    because I think it is something that we need to discuss very
    fully in our conversations.
        Senator Akaka. The whole dialog is, if there was one word,
    I guess the word is reform. When you think of reform you think
    of a difficult process at all levels, particularly when you are
    charged with the responsibility of finding solutions that may
    not or will not please everyone but which are realistic,
    efficient, and workable. I think this is where the dialog is
    going and you are quickly coming to focus on this. I commend
    you for your efforts that you have made up to now.
        As I read the report and read the Federal Register, I come
    to a question that I would like to ask all of you because this
    intrigued me about the cross-cutting principles and the use of
    the cross-cutting principles. So my question is, do the options
    recommended by the Task Force embody the seven cross-cutting
    principles set forth by the Task Force?
        Ms. Masten. What we are saying is that we will need to
    flush that out because they are not complete. We specifically
    did not complete the work there to allow for Indian country to
    have meaningful and timely input into just a framework. So that
    as we develop that, those are the cutting principles that we
    will ensure are addressed in any structure that we recommend.
        Mr. Hall. Senator Akaka, those cross-cutting principles
    really were developed way back in December in response to
    BITAM. They started out as seven principles that we all agreed
    had to be incorporated and became our cross- cutting
    principles. So this has really got the support of Indian
    country to make sure it is incorporated.
        Mr. McCaleb. I think it is the understanding of all the
    participants that these cross-cutting principles will be
    embodied in the final proposal.
        Senator Akaka. Thank you very much for your responses. Mr.
    Chairman, thank you.
        The Chairman. I thank you very much.
        Like the vice chairman, I will be submitting several
    questions here and I look forward to your responses. May I ask
    one question. No one has discussed the matter of pending
    lawsuits or possible lawsuits that may come about because of
    alleged past mismanagement of tribal or personal accounts. Is
    the Task Force going to set forth any sort of procedure to
    resolve these, or are you going to let the courts proceed with
    the cases?
        Mr. McCaleb. If I may, Mr. Chairman. In the area of the
    tribal lawsuits, and there are about 20 that have already been
    filed and the potential for 300 to be filed, through the
    auspices of this Task Force, we have established a subcommittee
    that involves the Intertribal Monitoring Association, which
    consists of tribes with large trust assets, and we are working
    with them to review and to try to develop some alternative
    dispute resolution mechanisms that would obviate the need for
    litigation to solve these suits and potential suits in an
    effort to truncate the extended time period that would be
    required by litigation and the expense of litigation. That
    effort is in the beginning stages.
        We are trying to address that on the tribal basis. On the
    individual Indian money accounts, that issue is very much at
    issue and is in the courts now and very far along. We have
    really tried not to cross the lines into that and to keep our
    effort and our eyes forward on the future and what we can do to
    eliminate some of these kinds of problems from developing in
    the future. We have not really dealt so much with the current
    litigation, the Cobell suit.
        Mr. Hall. Mr. Chairman, just a couple of points. One is the
    Task Force itself really needs further consultation from tribes
    to make sure that is part of our scope. As I mentioned in my
    testimony, the scope began with alternatives to BITAM and now
    we are talking about tribes that are in litigation in terms of
    finding some sort of alternative dispute resolution.
        Second, I am hopeful that some sort of alternative dispute
    resolution can be obtained. But I guess I am concerned that we
    are not really moving like I would like to see. We are not
    moving to get those tribes who are involved in litigation at
    the table yet. So as Mr. McCaleb mentioned, there is an attempt
    to work on that. But we are getting calls from tribes that are
    wanting to know is the Department serious about this
    alternative dispute resolution, and what mechanism will be set
    forth to get their involvement and get their input to see if
    some sort of an alternative dispute resolution could be
    obtained. And if we are serious, when is it going to happen. So
    we are still waiting on that issue.
        Ms. Masten. Mr. Chairman, just to add. In my comments under
    the process for settling historic account balances, I did
    mention the Task Force has had the discussions about the need
    to set up a forum for the resolution of current and subsequent
    litigation and that we feel it is important for trust reform to
    be complete that there has to be resolution of these historical
    disputes. However, we really felt that this was an area where
    the tribes who are actively involved need to be a participant
    and we need to hear from them as to what they think that
    structure or forum should look like. So we are in the process
    of identifying that.
        The Chairman. I thank all of you again. And if I may repeat
    what the vice chairman stated. It is true that after the July 4
    recess we have 4 weeks of session remaining and then we go into
    the August recess and we will be back on September 4. I think
    we will be concentrating on limited issues. Thirteen
    appropriations accounts, that will take up much time. Then you
    have certain politically hot items such as medicare, medicaid,
    pharmaceutical needs, energy, et cetera, et cetera. And so we
    do not anticipate that this matter will be resolved in this
    session of the Congress. I do not think any of you are
    anticipating that.
        We do not wish to in any way suggest that we are pressuring
    you by the July 30 date. We set that July 30th date because if
    we do not have it by then, we may not have a hearing in
    September. But we want at least a status report on that day and
    look forward to your meeting again on July 30.
        Yes, Mr. Secretary?
        Mr. McCaleb. Mr. Chairman, with your permission, I made an
    oversight and did not identify two of the Department of the
    Interior people that were really essential in making all of
    this happen and doing the heavy lifting, if you would, and that
    is Aurene Martin, who is my deputy, and Phil Hogan, who is the
    Associate Solicitor for Indian Affairs. They have been critical
    and essential in the success that we have enjoyed.
        The Chairman. Thank you very much.
        Once again I thank you all and I hope that the love affair
    continues. Thank you.
        [Whereupon, at 11:40 a.m., the committee was adjourned, to
    reconvene at the call of the Chair.]
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                                A P P E N D I X

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                  Additional Material Submitted for the Record

    =======================================================================

     Prepared Statement of Hon. Tim Johnson, U.S. Senator from South Dakota

        Mr. Chairman, thank you for holding this important hearing today to
    hear from the Department of the Interior's Tribal Trust Fund Task
    Force. I appreciate your leadership on this important issue, Mr.
    Chairman, and look forward to hearing from the Task Force today, as
    well as future hearings on the management of the Trust Funds next
    month, including a hearing on S. 2212, legislation I introduced with
    Senators Daschle and McCain.
        We have already benefited from the input of many tribal officials
    in the context of Department consultation meetings, as well as the
    Department's Task Force on Trust Reform. I have had numerous
    discussions and meetings with South Dakota tribal leaders, and I
    greatly appreciate their insights and leadership. I would also like to
    take this opportunity to thank Mr. Mike Jandreau, Chairman of the Lower
    Brule Sioux Tribe, a member of the Interior Department's Task Force on
    Trust Reform, and Tom Ranfranz, President of the Flandreau Santee and
    Chairman of the Great Plans Tribal Chairman's Association for their
    sound advice and counsel as we proceed with trust reform efforts.
        While I am pleased the Task Force is giving tribal leaders across
    the country a voice in the process of reforming the management of the
    trust funds, it is unfortunate this consultation and input did not
    occur before the Secretary of the Interior announced her plan last
    November.
        I will keep my comments brief, but I want to again thank the Tribal
    leaders who are part of the task force and remind them that I look
    forward to their thoughts and recommendations on legislation to address
    this problem, and specifically their recommendations on how to improve
    on S. 2212. I would hope we can find consensus within the Task Force,
    tribal leaders and Congress to enact legislation this year to finally
    put us on a path to correct this inexcusable Trust Fund problem.
        Thanks again, Mr. Chairman, for all of your leadership in
    addressing so many issues important to Indian country all across
    America.
                                     ______

     Prepared Statement of Clifford Marshall, Chairman, Hoopa Valley Tribe

        I am Clifford Marshall, chairman of the Hoopa Valley Tribe. I
    appreciate the opportunity to submit my testimony for the Senate
    Committee on Indian Affairs hearing record regarding the trust reform
    and related matters. Because trust reform will effect the ability of
    tribes to develop stable governments for the next several decades, I
    urge the Committee to take the necessary time to assess the impacts on
    Indian Country before moving forward with proposals that are based on
    vague short term concepts rather than addressing longstanding problems.
        There have been two forms of trust reform that have been underway
    for the past several years, one initiated by tribes and the other by
    the Federal Government. These are two very different approaches. The
    tribal approach focuses on Indian Country, while the Federal approach
    has been one focused on inside the Beltway using consulting firms that
    have little experience in Federal Indian trust and tribal government
    matters.
        Regarding tribal efforts, tribes have been involved in various
    forms of trust reform activities since the first treaty was entered
    into and the trust relationship was established. At least part of the
    tribal trust reform efforts have been designed to address problems
    associated with the underfunded BIA, Indian programs. For example,
    comparisons between the budgets of Indian programs to those for
    federally owned lands and resources demonstrate that Indian forest
    programs receive only 35 percent of the funds appropriated for
    management of the United States' own lands and that Indian roads
    maintenance programs only receive 30 percent of Indian road maintenance
    needs. It was this type of underfunding, coupled with the lack of local
    tribal control over management of reservation affairs, that led to the
    development of such laws as the Indian Self-Determination and Tribal
    Self-Governance Acts.
        Information that was submitted to the Task Force by the Tribe
    demonstrates that tribal and individual Indian beneficiaries, as well
    as the United States, receive a benefit of $3 of non-BIA funds for
    every $1 of BIA compacted/contracted funds as a direct result of the
    Tribal efforts in furthering tribal trust reform activities. Clearly,
    this information indicates that the Tribal Self-Determination and Self-
    Governance initiatives are very beneficial to the goals of reforming
    Indian trust programs.
        Regarding Federal trust reform efforts, it has been both
    frustrating and costly for tribal governments over the past few years
    to chase around Indian Country the most recent recommendation is of
    consulting firms who have been awarded multi-million dollar contracts
    by DOI. It certainly is very revealing of the Federal efforts to have
    spent over $760 million dollars thus far, but we have yet to find
    meaningful solutions and many of the consultant proposals have been
    universally rejected by the tribes. Unfortunately, the most recent
    Federal trust reform efforts have focused almost entirely on
    restructuring or eliminating the BIA's trust management functions
    without spending any time to analyze whether the new organization will
    simply fall into the same old problems that brought us to where we are
    today.
        DOI officials say that status quo of the BIA is unacceptable, and
    restructuring is necessary if trust reform is to be successful,
    including ``realignment'' of the lower levels of the BIA. (Task Force
    Report, p. 27). This proposed realignment initiative includes the
    probability of segregating trust asset management functions and budgets
    from the BIA Regional, Agency and Sub-agency offices for transfer to a
    trust service centers. While there has been discussion about the local
    BIA Regional and Agency offices ``contracting'' with the trust service
    center to maintain local trust asset management functions, it is more
    likely that these functions will be permanently removed from the local
    offices since the budgets will no longer be available to support them.
        The American Indian Trust Funds Management Reform Act of 1994
    (Reform Act) established the Special Trustee for American Indians and
    gave that position a significant amount of control over trust reform
    efforts. Despite the fact that Office of Special Trustee (OST) was
    supposed to only provide an oversight function--not a program
    implementation function, Congress began appropriating substantial
    amounts of funds for the OST budget. OST then assumed control over the
    BIA Office of Trust Funds Management, then assumed control of the
    historic accounting functions, most recently appraisals, and probates
    are expected to follow. Today, OST has stopped being the oversight
    function as originally contemplated in the Reform Act and has now
    become part of the problem. In effect, OST is now what the BIA was 12
    years ago--and the problems continue to escalate and few are being
    resolved. For example, it was the failures of the OST's Office of Trust
    Funds Management system that resulted in the complete shut-down of the
    DOI computer systems that were connected to the OTFM systems. In
    effect, the DOI computer systems had to be disconnected because proper
    safeguards were not incorporated in the OTFM systems that would prevent
    outsiders from improperly accessing trust information. Clearly, OST has
    now become a major part of the problem that must be fixed if trust
    reform is ever to be successfully implemented.
        Congress mandated in the Reform Act that a comprehensive plan be
    developed, in consultation with tribes, and submitted to the House
    Resources and Senate Indian Committees for review. To complete the
    framework for trust reform, the Reform Act also contains a mandate that
    the Special Trustee certify in writing the adequacy of the trust reform
    budgets of the BIA, BLM and MMS. Unfortunately, neither of these
    statutory requirements has been complied with. I believe that the
    present state of the Federal trust reform is in the state of chaos that
    we see today largely because of these critical failures by OST in
    complying with these legal mandates.
        To address trust asset management, DOI has proposed to fragment
    Indian services into two or more agencies. If one fully implemented
    these proposals, Indian Country would become the only place in the
    Nation where a tribe or individual Indian will be required to go to
    multiple agencies just to get permission to start businesses, create
    employment, implement welfare reform programs, build roads, have
    adequate housing, fight fires, use resources and lands, and so on.
    Despite the fact that Indian people today are more regulated than any
    other group around the Nation, separating BIA functions into multiple
    organizations will require a substantial amount of new funds just to
    maintain the same level of services that are being provided today.
    Indian services will be reduced in favor of paying for more Federal
    bureaucracy. Unfortunately for tribes, none of the proposals analyzes
    what impacts will occur to the regional and agency offices where 95
    percent of the services in Indian Country are provided.
        Based on an analysis of BITAM submitted earlier by the Tribe, any
    option that separates the BIA functions into multiple organizations
    will cost at least $10 million of new or reprogrammed funds just to
    hire additional supervisors, assuming that the same level of BIA
    employees will be maintained. Additional funds will likely be necessary
    once the new organization determines what service it, will provide to
    tribes and individual Indians. With respect to contracting and
    compacting with tribes, there will likely need to be amendments to
    various Federal statutes, including the Indian Self-Determination and
    Self-Governance Act, to provide for mandatory contracting/compacting
    requirements for any new non-BIA organization.
        Restructuring of any Federal agency must be done in accordance with
    pre-determined plans, with identified and measurable goals and specific
    timeframes, none of which presently exist for restructuring Indian
    affairs today. Restructuring for the sake of restructuring is typically
    not the best use of limited resources, funds or time. Quite simply,
    changing employee name tags and agency addresses will not fix trust
    problems. Over three-quarters of a billion dollars have been spent by
    Federal officials and numerous consultants in the name of trust reform
    and little benefits have been demonstrated from the results. Yet tribes
    continue to struggle with underfunded programs, largely because of the
    unwillingness of Federal officials to provide funding and resources at
    the local tribal government levels, where clear progress is being made
    as tribes have consistently corrected problems and brought stability to
    local trust services under the Self-Determination and Self-Governance
    Acts. It seems clear that the Federal Government has simply been
    investing in the wrong solutions.
        With respect to the DOI consultation process for the Task Force
    report, we are concerned that the process is not proceeding in a manner
    that will provide meaningful input from tribes and individual Indians
    regarding trust reform activities. Quite simply, DOI cannot expect that
    having just over 30 days for review and comment on such a major effort
    provides any level of reasonable consultation with tribes across the
    Nation, even if the Task Force Report were to be expanded to include
    sufficient information with which to make an independent assessment of
    the Task Force's recommendations. It has also been explained that the
    EDS contract is supposed to provide additional substantive information
    regarding how the options will impact the local levels of the BIA.
    Further, no explanation has been provided to reconcile the fact that
    the Task Force's report to the Secretary will be submitted in July
    while the EDS analysis won't be completed until December.
        Trust Reform Budget Requests. The Tribe does not believe that DOI
    has given fair consideration of budget needs to implement trust reform
    measures. Past needs-based budgets submitted to tribes during national
    budget meetings indicate that there is a need of approximately $7.0
    billion to adequately fulfill the trust obligations to tribes and
    individual Indians, as compared to the existing BIA budget of
    approximately $2.2 billion. Instead of dedicating more limited funds
    and resources toward reorganization of the BIA, the Hoopa Valley Tribe
    believes that DOI must aggressively work toward securing adequate funds
    and resources to implement the Federal trust obligations to tribes and
    individual Indians. Without both adequate funds and a commitment to
    engage tribes into every phase of the trust reform efforts, no trust
    reform plan can be successfully implemented.
        With respect to S. 2212, the Tribe strongly believes that there
    must be a legislative solution to trust reform problems if they are
    ever going to be resolved. Quite simply, there is presently
    insufficient legal guidance and authority to address the trust
    management issues that we are confronted with today. S. 2212 provides a
    sound beginning point for the legislative package.
        Our comments on S. 2212 are as follows:
        No. 1. We agree with S. 2212 that the BIA structure must be kept in
    tact. Besides not having the time or funds to construct a new Indian
    agency, the exercise of separating trust functions between resource
    management and other trust services will undoubtedly become an
    insurmountable task. The Hoopa Valley Tribe opposes DOI proposals that
    fragment the BIA into two or more agencies because we believe that it
    will ultimately lead to the destruction of Indian services and
    diminishment of trust responsibilities owed to tribes and individual
    Indians by the United States.
        No. 2. We disagree with section 307 of the bill that there is a
    need for a new Deputy Secretary for Trust Management and Reform. We
    believe that the bill correctly defines the trust duties for trust
    asset management and that the existing Assistant Secretary for Indian
    Affairs can appropriately address trust reform issues provided that the
    necessary funding and resources are made available to the BIA.
        No. 3. We wholeheartedly agree with the provision contained in the
    bill that provides for the development of resource management plans. We
    believe that this is one of the key cornerstones to ultimately
    resolving the differences between tribes, individual Indians and the
    United States with respect to management of trust lands and resources.
    Again, adequate funding must be made available to accomplish this goal
    and adequate flexibility must be provided to tribes and individual
    Indians to contract for the development of the plans.
        No. 4. We recommend that a provision be added to the bill that will
    facilitate the development and submission of adequate budgets necessary
    to properly manage trust assets and to fulfill the trust
    responsibilities of the United States to tribes and individual Indians.
    We suggest that language be included that mandates that the annual BIA
    Unmet Needs budget be reviewed so that annual budgets provide a
    reasonable method of increasing the funding levels of the BIA on a
    regular basis to meet the unmet needs.
        No. 5. We recommend that a section be added that would establish a
    new Division of Indian Claims within the DOI Office of Hearings and
    Appeals. Throughout the years of tribal deliberations regarding trust
    reform, tribes have expressed frustration from not having access to
    information that is controlled by the United States that would help to
    facilitate the development of claims, in order to resolve these claims
    through mediation, negotiation, litigation or legislation.
        No. 6. We recommend that provisions be added to the bill that would
    facilitate resolution of the breaches of trust that have been
    identified by the Cobell Court.
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