[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






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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

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 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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