[Senate Hearing 107-648]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-648

                       HOOPA-YUROK SETTLEMENT ACT

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   ON


OVERSIGHT HEARING ON THE DEPARTMENT OF THE INTERIOR SECRETARY'S REPORT 
                   ON THE HOOPA YUROK SETTLEMENT ACT

                               __________

                             AUGUST 1, 2002
                             WASHINGTON, DC


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                            WASHINGTON : 2003
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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:
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      vice chairman, Committee on Indian Affairs.................     2
    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, chairman, 
      Committee on Indian Affairs................................     1
    Jarnaghan, Joseph, tribal councilman, Hoopa Valley Tribal 
      Council....................................................    14
    Marshall, Sr., Clifford Lyle, chairman, Hoopa Valley Tribal 
      Council....................................................    12
    Masten, Sue, chairperson, Yurok Tribe........................    20
    McCaleb, Neal, assistant secretary, BIA, Department of the 
      Interior...................................................     3
    Schlosser, Thomas, counsel, Hoopa Valley Tribal Council......    16

                                Appendix

Prepared statements:
    Jarnaghan, Joseph............................................    29
    Marshall, Sr., Clifford Lyle (with attachments)..............    33
    Masten, Sue (with attachments)...............................    62
    McCaleb, Neal (with attachments).............................    82
    Schlosser, Thomas............................................    30
Additional material submitted for the record:
    Hoopa-Yurok Settlement Act Funding History...................    89

 
                       HOOPA-YUROK SETTLEMENT ACT

                              ----------                              


                        THURSDAY, AUGUST 1, 2002


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to other business, at 10:18 
a.m. in room 485, Senate Russell Building, Hon. Daniel K. 
Inouye (chairman of the committee) presiding.
    Present: Senators Inouye, Campbell, and Reid.

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

    The Chairman. This is the oversight hearing on the 
Department of Interior Secretary's report on the Hoopa Yurok 
Settlement Act submitted to the Congress in March 2002 pursuant 
to Section 14 of Public Law 100-580.
    As with almost all matters in Indian affairs, there is a 
long history that preceded enactment of the legislation the 
Secretary's report addresses. It is a history of deception, I 
am sad to say, of a Senate that apparently met in secret 
session in 1852 and rejected the treaties that had been 
negotiated with California tribes, and didn't disclose their 
action for another 43 years.
    In the interim, the California tribes proceeded in good 
faith, relying upon their contracts with the U.S. Government. 
In 1864, the Congress enacted legislation to establish four 
reservations in the State of California with the intent that 
these reservations would serve as the new homeland for tribes 
that had no cultural, linguistic, or historical ties to one 
another. The Hoopa Valley Reservation was one such reservation 
that was established for ``the Indians of the Reservation.''
    Litigation later spawned a series of a series of court 
rulings, which while resolving the issues before each court, 
engendered considerable uncertainty into the daily lives of 
those who resided on the reservation, and soon,, the Congress 
was called upon to bring some final resolution to the matter.
    Today, as we receive testimony on the Secretary's report, 
it is clear that a final resolution was not achieved through 
the enactment of the Hoopa-Yurok Settlement Act in 1988, and 
that the Congress will once again have to act. Accordingly, we 
look forward to the testimony we will receive today so that the 
committee and members of Congress may have a strong substantive 
foundation upon which to construct a final solution.
    May I call upon the vice chairman.

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

    Senator Campbell. Thank you.
    I think you have explained very well the situation Mr. 
Chairman but just a couple of minutes for my opening statement. 
I'd like to broaden it to something that has always bothered me 
and many others because I was born and raised in California in 
the foothills among many of the Me-wok Tribes, a small tribe 
that has a number of bands in the foothills and valley country 
around Sacramento.
    As you alluded, I can tell you that the story of the 
American Indian in the State of California was one of the most 
gruesome and bloody chapters in the history of this country. 
They say before the gold rush, there was about five times more 
Indian people in California than non-Indian people. It was 
literally a paradise. The weather was nice in most areas, the 
production of natural plants, fruits and things was abundant, 
people ate well, people lived well, they were at harmony with 
their neighbors and at that time, as I understand there were 
over 100 tribes in that area. In fact, some estimates say about 
one-tenth of all American Indians lived in the California area 
because living was a bit easier.
    In 1848 when gold was discovered in a little place now 
called Coloma on the north fork of the American River, it 
started a wholesale change in their lifestyle. In fact, there 
have been documented instances of Indian people in those days 
being hired by gold miners and when payday came, they would 
shoot them, throw them in a hole and just get some more Indians 
to do the work again. So they know what real tragedy is, the 
people who are descendants of the Native Americans who lived in 
that area before the gold rush.
    Even before that time if you look at California history, as 
early as the late 1700's when Father Junipero Serra came north 
from Mexico and developed what was later called the El Camino 
Real, or the King's Highway, and the chain of missions from San 
Diego all the way north of San Francisco, almost all those 
missions were built with indentured Indian labor, if not slave 
labor. If you visit some of those missions right now, like the 
mission in Monterey, if you turn the roofing tile over and look 
under the old, old roofing tile, you can find the skin imprints 
of Indian people in that clay where they would take the wet 
clay and bend it over their leg to make that curved feathered 
kind of roof structure on all the old missions. They were never 
paid for that and some of them were kept around the missions 
for so long, many against their will, that some of the smaller 
tribes in southern California lost their original identity. I 
can remember when I was a boy many of them were called mission 
Indians which was a kind of generic name for people who had 
lost their identity but had been in the servitude of the 
missions for so long.
    There is no question that people who are descendants of the 
Native peoples of California have a real gripe and a history of 
mistreatment by both the Federal Government and people that 
made millions, if not billions of dollars, from the wealth of 
California. I'm just glad that two of the major tribes are here 
today, the Hoopa and the Yurok and I know this hearing will 
focus on their settlement but I wanted to put that in the 
record of my own personal experiences in California.
    The Chairman. I'm glad that your remarks were made for the 
record because though it is rather sad, we who are the 
successors to the Senators two centuries ago must remember that 
our predecessors were a part of this terrible conspiracy.
    With that, may I call upon the Assistant Secretary of the 
Bureau of Indian Affairs, Department of the Interior, Neal 
McCaleb. It's always good to see you, sir.

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

    Mr. McCaleb. Thank you, Chairman Inouye. I am pleased to be 
here this morning to bring to you a report pursuant to section 
14 of the Settlement Act.
    Although I will not read my introductory background remarks 
because you did such an excellent job of presenting the 
history, I would have my entire testimony become a part of the 
record.
    The Chairman. Without objection, so ordered.
    Mr. McCaleb. Prior to the Settlement Act, legal 
controversies arose over the ownership and management of the 
Square, that being the 12 square miles that were provided by 
the United States Government for the Indians of California, 
that ultimately became the Hoopa Reservation and its resources. 
Although the 1891 Executive order joined the separate 
reservations into one, the Secretary had generally treated the 
respective sections of the reservation separately for 
administrative purposes. A 1958 Solicitor's Opinion also 
supported this view.
    In the 1950's and 1960's, the Secretary distributed only 
the timber revenues generated from the Square to the Hoopa 
Valley Tribe and its members. All the revenues from the Square 
were allocated to the Hoopa Valley Tribe. In 1963, Yurok and 
other Indians, eventually almost 3,800 individuals, challenged 
this distribution and the U.S. Court of Claims subsequently 
held that all Indians residing within the 1891 reservation were 
Indians of the reservation and were entitled to share equally 
in the timber resources proceeds generated from the Square. 
Short v. United States was the embodiment of that litigation.
    Following the decision, the Department began allocating the 
timber proceeds generated from the Square between the Yurok 
Tribe, approximately 70 percent, and the Hoopa Valley Tribe, 30 
percent. The 70/30 allocation was based upon the number of 
individual Indians occupying the joint reservation that 
identified themselves as members of either the Yurok or the 
Hoopa Valley Tribe respectively.
    Another lawsuit challenged the authority of the Hoopa 
Valley Business Council to manage the resources of the Square 
among other claims. These and related lawsuits had profound 
impacts relating to the tribal governance and self 
determination, extensive natural resources that compromised the 
valuable tribal assets and the lives of thousands of Indians 
who resided on the reservation.
    In order to resolve longstanding litigation between the 
United States, Hoopa Valley, Yurok, and other Indians regarding 
the ownership and management of the Square, Congress passed the 
Hoopa-Yurok Settlement Act in 1988. This act did not disturb 
the resolution of the prior issues through the Short 
litigation. Rather, the act sought to settle disputed issues by 
recognizing and providing for the organization of the Yurok 
Tribe by petitioning the 1891 Yurok joint reservation between 
the Hoopa Valley and the Yurok Tribes and by establishing a 
settlement fund primarily to distribute moneys generated from 
the joint reservation's resources between the tribes.
    Section 2 of the act provided for the petition of the joint 
reservation. Upon meeting certain conditions of the act, the 
act recognized and established the Square, the original 12 
square miles, as a Hoopa Valley Reservation to be held in trust 
by the United States for the benefit of the Hoopa Valley Tribe. 
The act recognized and established the original Klamath River 
Reservation and the connecting strip as the Yurok Reservation 
to be held in trust by the United States for the benefit of the 
Yurok Tribe.
    In accordance with the conditions set in section 2(a), the 
Hoopa Valley Tribe passed a resolution, No. 88-115 on November 
28, 1988 waiving any claims against the United States arising 
from the act and consenting to the use of the funds identified 
in the act as part of the settlement fund. The BIA published a 
notice of the resolution in the Federal Register of December 7, 
1988. These actions had the effect of partitioning the joint 
reservation.
    As for the settlement fund itself, section 4 of the act 
established a settlement fund which placed the moneys generated 
from the joint reservation into an escrow account for later 
equitable distribution between the Hoopa Valley and Yurok 
Tribes according to the provisions of the act. The act also 
authorized $10 million in Federal contribution to the 
settlement fund primarily to provide lump sum payments to any 
Indian on the reservation who elected not to become a member of 
either tribe. It allocated about $15,000 to any individual 
Indian who elected not to claim tribal membership of either 
tribe.
    As listed in section 1(b)(1) of the act, the escrow funds 
placed in the settlement fund came from moneys generated from 
the joint reservation and held in trust by the Secretary in 
seven separate accounts, including the 70 percent Yurok timber 
proceeds account and the Hoopa 30 percent timber proceeds 
account. The Secretary deposited the money from these accounts 
into the Hoopa-Yurok Settlement Fund upon the enactment of the 
act. The settlement fund's original balance was nearly $67 
million. At the beginning of fiscal year 2002, the fund 
contained over $61 million in principle and interest.
    Even with the previous distributions as described below, 
appendix I to the report provides the relevant figures from the 
fund. The act sought to distribute the moneys generated from 
the joint reservation and placed in the settlement fund on a 
fair and equitable basis between the Hoopa Valley and Yurok 
Tribes. The Senate committee report briefly described what was 
then believed to be a rough distribution estimate of the fund 
based upon the settlement role, distribution ratios established 
in the act. Twenty-three million, roughly one-third of the fund 
would go to the Hoopa Valley Tribe pursuant to Section 4(c); a 
similar distribution to the Yurok Tribe under Section 4(d) as 
described below assuming roughly 50 percent of those on the 
settlement roll would accept Yurok tribal membership; and the 
remainder to the Yurok Tribe after individual payments 
discussed below.
    Substantial distributions have already been made from the 
settlement fund in accordance with the act. The Department 
disbursed to the Hoopa Valley Tribe just over $34 million 
between passage of the act and April 1991. The total amount 
determined by the BIA to be the tribe's share under 4(c) of the 
act. The Department also distributed $15,000 to each person on 
the settlement roll who elected not to become a member of 
either tribe under the act. Approximately 708 persons chose the 
lump sum payment option for a total distribution for this 
purpose in the amount of approximately $10.6 million, exceeding 
the $10 million Federal contribution authorized by the act for 
this payment.
    Section 4(d) of the act provided the Yurok Tribe's share of 
the settlement fund similar to the determination of the Hoopa 
Valley share under section 4(c). Section 7(a) further provided 
the Yurok Tribe would receive the remaining moneys in the 
settlement fund after distributions were made to individuals in 
accordance with the settlement membership options under section 
6 and to successful appellants left off the original settlement 
roll under section 5(d).
    Under section 1(1)(4), the condition that the Hoopa Valley 
Tribe and Yurok Tribe received these moneys requiring the 
tribes adopt a resolution waiving any claim against the United 
States arising from the act. The Hoopa Valley Tribe adopted 
such a resolution but the Yurok Tribe did not. In November 
1993, the Yurok Tribe passed Resolution 93-61 which purported 
to waive its claims against the United States in accordance 
with section 2(c)(4). The tribe, however, also brought a suit 
alleging that the act affected a constitutionally prohibited 
taking of its property rights as described below. In effect, 
the tribe sought to protect its rights under section 2 of the 
act to its share of the settlement fund and other benefits 
while still litigating the claims as contemplated in section 14 
of the Act.
    By a letter dated April 4, 1994, the Department informed 
the tribe that the Department did not consider the tribe's 
conditional waiver to satisfy the requirements of the act 
because the waiver acted to preserve rather than waive its 
claims. Instead of waiving its claims as the Hoopa Valley Tribe 
did, the Yurok Tribe as well as the Karuk Tribe and other 
individual Indians brought suit against the United States 
alleging the act constituted a taking of their vested property 
rights in the lands and resources of the Hoopa Valley 
Reservation contrary to the Fifth Amendment of the U.S. 
Constitution.
    In general, the complaints argued that the 1864 Act 
authorizing Indian reservations in California and other acts of 
Congress vested their ancestors with compensable rights in the 
Square. Alternatively, plaintiffs argued that their continuous 
occupation of the lands incorporated into the reservation 
created compensable interest. Potential exposure to the U.S. 
Treasury was once estimated at close to $2 billion. This 
litigation began in the early 1990's and was only recently 
ended.
    The U.S. Court of Federal Claims and the Federal Circuit 
Court of Appeals disagreed with the positions of the Yurok and 
other plaintiffs. The Federal courts generally followed the 
reasoning provided in the committee reports of the bills 
ultimately enacted as the Settlement Act. Unless recognized as 
vested by some Act of Congress:

    Tribal rights of occupancy and enjoyment, whether 
established by Executive order or statute may be extinguished, 
abridged or curtailed by the United States at any time without 
payment of just compensation.

    The courts concluded that no act of Congress established 
vested property rights and the plaintiffs or their ancestors in 
the Square. Rather the statutes and Executive orders creating 
the reservation allowed permissive, not permanent occupation. 
Thus, the courts held the act did not violate the takings 
clause. Plaintiffs petitioned the U.S. Supreme Court for a writ 
of certiorari to review the lower court decision and on March 
26, 2001, the Court denied certiorari thereby concluding the 
litigation.
    On the Department's report, section 14 of the act provides:

    The Department shall submit to Congress a report describing 
the final decision that an illegal claim challenging the act as 
affecting a taking of property rights contrary to the Fifth 
Amendment to the U.S. Constitution or as otherwise providing 
inadequate compensation.

    The Court's denial of the certiorari triggered this 
provision. The Department solicited the views of the Hoopa 
Valley and Yurok Tribes regarding future actions of the 
Department with respect to the settlement fund as required 
under the act. The report briefly describes issues both leading 
up to the subsequent act, attaches the written positions of the 
tribes and provides recommendations of the Department for 
further action with respect to the settlement fund.
    In July 2001, the Hoopa Valley Tribe submitted its proposed 
draft report for consideration by the Department. After 
describing the history of the disputes, the Settlement Act and 
subsequent actions, the Hoopa Valley Tribe provided various 
recommendations and observations. The Hoopa submission noted 
that the separate lawsuit determined that only 1.26 percent of 
the settlement fund moneys were derived from the Yurok 
Reservation, with the remainder of the moneys derived from the 
Hoopa Reservation.
    The Hoopa Valley Tribe has continued to assert its right to 
a portion of the benefits offered to and rejected by the Yurok 
Tribe. Prior to its July submission, the tribe previously 
requested the Department recommend the remaining funds from the 
Hoopa Square be returned to the Hoopa Valley Tribe. The Hoopa 
submission ultimately suggested the following recommendations.
    First, the suspended benefits under the act, including the 
land transfer and land acquisition provisions for the Yurok 
Tribe and the remaining moneys in the settlement fund be valued 
and divided equally between the two tribes.
    Second, the economic self-sufficiency plan of the Yurok 
Tribe be carried forward, including any feasibility study 
concerning the cost of the road from U.S. Highway 101 to 
California Highway 96 and other objectives of the self 
sufficiency plan.
    Third, that additional Federal lands adjacent to or near 
the Yurok and Hoopa Valley Reservation be conveyed to and 
managed by the respective tribes.
    The Yurok position. In August 2001, Counsel for the Yurok 
Tribe submitted the tribe's position and proposed a draft 
report. The Yurok Tribe submission similarly outlined the 
history of the dispute and other considerations in its 
recommendations for the Department to consider. In general, the 
Yurok Tribe takes the position, among others, that its 
conditional waiver was valid and became effective upon the 
Supreme Court's denial of certiorari in the taking litigation.
    The Yurok submission discusses the tribe's concern with the 
process leading up to and ultimately resulting in the passage 
of the Settlement Act. In the tribe's view, the act nullified a 
large part which allowed all Indians of the reservation to 
share equally in the revenues and resources of the joint 
reservation. ``The tribe, not formally organized at the time, 
was not asked and did not participate in this legislative 
process'' and had the act imposed on the Yurok who were left 
with a small fraction of their former land resources.
    In its view, the act divested the Yurok Tribe of its 
communal ownership in the joint reservation lands and resources 
and relegated that much larger tribe to a few thousand acres 
left in trust along the Klamath River with a decimated fishery, 
while granting to the Hoopa Tribe nearly 90,000 acres of 
unallotted trust land and resources including the valuable 
timber resources thereon.
    With respect to the waiver issue, the Yurok submission 
considers the Department's view discussed above as erroneous. 
The tribe references a March 1995 letter from the Department in 
which the Assistant Secretary of Indian Affairs indicated the 
tribe could cure the perceived deficiencies with its 
conditional waiver by ``subsequent tribal action or final 
resolution of the tribes lawsuit in the U.S. Court of Federal 
Claims.''
    The tribe takes the position that it made a reasonable 
settlement offer and would have dismissed its claim with 
prejudice but the Department never meaningfully responded. Now 
the tribe considers the Supreme Court's denial of certiorari as 
a final resolution suggested as curing the waiver. As a support 
for its position, the tribe states, ``The text of the Act and 
the intent of Congress make clear that filing a constitutional 
claim and receiving the benefits of that act are not mutually 
exclusive.'' The tribe suggests that principles of statutory 
construction, including the canon ambiguities be resolved in 
favor of the tribes and that the provisions within the statute 
should be read so as not to conflict or be inconsistent 
requires that a broader reading of the waiver provision in 
section 2(c)(4) in light of the act's provision allowing a 
taking claim to be brought under section 14.
    The tribe considers the Department's reading of the statute 
to be unfair and unjust. For these and other reasons, the tribe 
is of the view that it is now entitled to its benefits under 
the act.
    Because the Yurok Tribe litigated its claims against the 
United States based on the passage of the Act rather than 
waiving those claims, the Department is of the view that the 
Yurok Tribe did not meet the conditions precedent to the 
establishment of section 2(c)(4) of the act for the tribe to 
receive its share of the settlement fund or other benefits.
    The Department is also of the view that the Hoopa Valley 
Tribe has already received its portion of the benefits under 
the act and is not entitled to further distributions from 
settlement funds under the provisions of the act.
    Ultimately, this situation presents a quandary for the 
Department and for the tribes. We believe the act did not 
contemplate such a result. The moneys remaining in the 
settlement fund originated from seven trust accounts which held 
revenues generated from the joint reservation. Thus, the moneys 
remaining in the settlement fund should be distributed to one 
or both tribes in some form. Moreover, the Department 
recognizes that substantial financial and economic needs 
currently exist within both tribes and their respective 
reservations. Given the current situation, the report outlines 
five recommendations of the Department to address these issues.
    First, no additional funds need be added to the settlement 
fund to realize the purpose of the Act.
    Second, the remaining moneys in the settlement fund should 
be retained in a trust account status by the Department pending 
further considerations and not revert to the General Fund of 
the U.S. Treasury.
    Third, the settlement fund should be administered for the 
mutual benefit of both tribes and their respective reservations 
taking into consideration prior distributions to each tribe 
from the fund. It is our position that it would be 
inappropriate for the Department to make any general 
distribution from the fund without further action of Congress.
    Fourth, Congress should fashion a mechanism for the further 
administration of the settlement fund in coordination with the 
Department and in consultation with the tribes.
    Fifth, Congress should consider the need for further 
legislation to establish a separate permanent fund for each 
tribe from the remaining balances of the settlement fund in 
order to address any issue regarding entitlement of the moneys 
and fulfill the intent and spirit of the Settlement Act in 
full.
    This concludes my testimony and I will be happy to respond 
to any questions at the appropriate time. We have attached a 
schematic for the committee with a flow chart of the funds and 
the dates funds were disbursed pursuant to the short litigation 
in the 1988 Act.
    [Prepared statement of Mr. McCaleb appears in appendix.]
    The Chairman. Thank you very much, Mr. Secretary.
    The chart you speak of, entitled ``Hoopa-Yurok Settlement 
Act Funding History,'' received by the committee yesterday will 
be made a part of the record.
    [The information appears in appendix.]
    The Chairman. At this juncture, there will be a recess for 
10 minutes.
    [Recess.]
    The Chairman. We will resume our hearings.
    The vice chairman of the committee has a very urgent matter 
to work on this afternoon, so he will have to be leaving us in 
about 10 minutes, so may I call upon him for his questions.
    Senator Campbell. Thank you. I apologize for having to 
leave, we have some terrible wildfires out west and some of 
them are in Colorado, so I'm doing a joint event with some of 
the other Colorado delegation on our fire problem. It just 
closed Mesa Area in our part of the State which is a big 
tourist attraction, so I probably won't be able to ask the 
representatives from the two tribes questions. I'll submit 
those in writing if they can get those back to me.
    This is a very tough one for me because to me this is like 
refereeing a fight among family. Some folks on both sides of 
this issue I've known for years and years and am real close to 
from my old California days. Let me ask you just a couple.
    We have two reservations, one allotted, one not allotted, 
and this is certainly a sad history but the Yurok land and 
resources were allotted and dissipated. The Hoopa lands and 
resources remain in tact. Why were they treated so differently 
when they are so geographically close in our history? Do you 
happen to know that?
    Mr. McCaleb. I don't have personal knowledge of that, 
Senator. Let me get that information and respond in writing to 
you. I have an impression but I don't have a real factual 
answer to that.
    Senator Campbell. Let me ask another general question. 
We've been through a lot of disagreements between tribes and it 
seems to me those that can settle their issues without 
intervention from the courts are a lot better off than the ones 
who are not. I have no problem with the legal profession but 
let me tell you, the attorneys end up getting paid very well 
from the Indians that are fighting with each other. In keeping 
with the spirit of the settlement in 1988, shouldn't we try to 
bring this to a conclusion that both tribes can live with 
without fighting it out in courts?
    Mr. McCaleb. That would certainly be my desire, Senator 
Campbell.
    Senator Campbell. Have you personally tried to impress on 
both sides your sentiments?
    Mr. McCaleb. I have met with representatives of both sides, 
yes, and made those kinds of suggestions.
    Senator Campbell. I understand there is a lot of money 
involved. Let me ask about the account balance. What is the 
balance of revenues of the settlement fund and can you trace 
where the moneys from the fund came from?
    Mr. McCaleb. Aside from interest that had accrued over 
time, the source of all the funds was timber sale proceeds.
    Senator Campbell. Did they come primarily from Hoopa or 
Yurok lands or both?
    Mr. McCaleb. I'm advised a little over 98 percent of the 
funds derived from the Square, are on Hoopa land.
    Senator Campbell. Before they were put in the settlement 
fund, was there any audit performed to verify the accuracy of 
the transactions?
    Mr. McCaleb. I'm not aware of that but I will investigate 
that and reply in writing to you.
    Senator Campbell. In the Secretary's report, I read part of 
it and the staff read all of it, but they make two key 
findings, that the Hoopas have been made whole and have no 
claims against the United States and that because the Yuroks 
failed to provide necessary waivers, they are not entitled to 
benefits under the act.
    My question is, with a multimillion dollar fund sitting in 
the Treasury, how should it be divided?
    Mr. McCaleb. Senator, I was hoping you'd have some 
suggestion for me on that. I don't mean to be flip about it but 
it is a very difficult answer. The two extreme positions of the 
tribes are the Hoopas want half of all the proceeds and the 
Yuroks think they should have all of the funds.
    Senator Campbell. Would you recommend some kind of 
development fund for both tribes be established?
    Mr. McCaleb. I think that would be a good solution. As 
opposed to per capita payments, you mean?
    Senator Campbell. Yes.
    Mr. McCaleb. Yes; I almost always favor that kind of 
investment as opposed to per capita payments.
    Senator Campbell. Thank you, Mr. Chairman. I have no 
further questions. I appreciate you giving me that time.
    The Chairman. Thank you.
    Mr. Secretary, I have a few questions for clarification. Do 
the funds in the settlement fund represent revenues derived 
from the sale of timber located on the Square?
    Mr. McCaleb. Over 98 percent. According to the facts 
furnished to me, only about 1.26 percent were not derived from 
timber on the Square.
    The Chairman. Were those revenues generated from the Square 
while members of the Yurok and Karuk Tribes were still 
considered ``Indians of the reservation''?
    Mr. McCaleb. The money in the settlement fund is there 
pursuant to the Short litigation that was resolved in 1974 and 
the subsequent timber cuttings. Would you restate your question 
so I can make sure I understand it?
    The Chairman. Were those revenues generated from the Square 
while members of the Yurok and Karuk Tribes were still 
considered ``Indians of the reservation''? That is the phrase 
in the statute.
    Mr. McCaleb. Yes.
    The Chairman. So they were Indians in the reservation at 
the time the revenues were generated in the Square?
    Mr. McCaleb. Yes; that's my understanding.
    The Chairman. Because the Short case instructs us that if 
there is to be a distribution of revenues, the distribution 
must be made to all Indians of the reservation. Would that mean 
Hoopa, Yurok, Karuk?
    Mr. McCaleb. Yes, sir.
    The Chairman. The Hoopa Valley Tribe contends it is the 
only tribe entitled to the funds in the settlement fund, so 
your response does not agree with that?
    Mr. McCaleb. No; for the reasons you just said. The Short 
case is, I think, specific on that point.
    The Chairman. So it seems it may be critical to the 
resolution of the competing claims of entitlement to funds in 
the settlement fund to know whether the timber revenues that 
were placed in the fund were generated after the reservation 
was partitioned or whether they were generated while there were 
three tribal groups making up the ``Indians of the 
reservation,'' isn't that correct?
    Mr. McCaleb. The revenues that make up the original amount, 
almost $17 million in the chart, were generated prior to the 
partitioning of the reservation, while other revenues were 
generated from the timber fund after 1988, the partitioning 
actually occurred in 1988 by act of Congress.
    The Chairman. There are two time periods?
    Mr. McCaleb. Yes; there are.
    The Chairman. Can you tell the committee what disbursements 
have been made from the settlement fund, when the disbursements 
were made and to whom these disbursements were made?
    Mr. McCaleb. From the settlement fund, $15 million was 
disbursed to individual Indians who elected to become Yurok. 
There was another $10.6 million distributed to individual 
Indians who elected to buy out. That $10.6 million was offset 
by a $10-million direct appropriation of Congress. There has 
been another $1.5 million distributed to the Yurok Tribe since 
1991 given they were provided about $500,000 a year for 3 years 
to help them in the process of establishing their tribal 
government.
    The Chairman. Anything distributed to the Karuk Tribe?
    Mr. McCaleb. None directly to the Karuk to my knowledge. 
There was another $34 million distributed to the Hoopa Tribe, 
$34,651,000 pursuant to their signing their waiver in keeping 
with the act.
    The Chairman. Given the Department's position as set forth 
in the Secretary's report that neither the Hoopa Valley Tribe 
nor the Yurok Tribe is entitled to the balance of the funds 
remaining in the HYSA fund, what benefits of the act or 
activities authorized in the act does the Department envision 
should be carried out and funded by the recommended two 
separate permanent funds to fulfill the intent of the original 
Act in full measure?
    Mr. McCaleb. I think all the funds should be distributed 
that are in the settlement fund. I don't think there is much 
debate over that. I think the issue is over the distribution, 
how the money should be distributed.
    The Chairman. How shall the distribution be made?
    Mr. McCaleb. I guess if you go to our third recommendation, 
it touches as closely as anything on that:

    The settlement fund should be administered for the mutual 
benefit of both tribes and the reservations taking into 
consideration prior distributions to each tribe from the fund.

    If you assume that 30-70 percent distribution was 
appropriate originally and take into consideration the prior 
distribution of the funds, that would provide some guidance in 
that area.
    The Chairman. In your opinion, were all the provisions of 
the Act benefiting the Hoopa Valley Tribe implemented?
    Mr. McCaleb. Yes.
    The Chairman. Would you say the same of the act benefiting 
the Yurok Tribe implemented?
    Mr. McCaleb. No; that's not correct.
    The Chairman. So the Hoopa Valley got all the benefits, 
Yurok did not?
    Mr. McCaleb. One of the provisions was the partitioning of 
the tribal lands. That was done, that was accomplished but the 
Yuroks got none of the money except for the $1.5 million I 
indicated. There were other provisions for economic development 
that were supposed to be carried out pursuant to an economic 
development plan submitted by the Yuroks. The plan was never 
submitted, so it was never implemented. For example, there was 
some roadbuilding to be done pursuant to that economic 
development plan that has never been done. The Yurok only 
received a partitioning of tribal lands plus the $1.5 million.
    The Chairman. Because of the obvious complexities, may we 
submit to you questions of some technicality that you and your 
staff can look over and give us a response?
    Mr. McCaleb. I would appreciate that because I really need 
to rely on the historical and technical views of the staff to 
answer the meaningful questions that are attendant to this 
really sticky issue.
    The Chairman. Thank you very much, Mr. Secretary.
    Mr. McCaleb. May I be excused at this point?
    The Chairman. Yes; and thank you very much, sir.
    The second panel consists of the chairman of the Hoopa 
Valley Tribal Council of Hoopa, California, Clifford Lyle 
Marshall, Sr., accompanied by Joseph Jarnaghan, tribal 
councilman, Hoopa Valley Tribal Council and Thomas Schlosser, 
counsel, Hoopa Valley Tribal Council and Sue Masten, 
chairperson, Yurok Tribe, Klamath, CA.

   STATEMENT OF CLIFFORD LYLE MARSHALL, Sr., CHAIRMAN, HOOPA 
VALLEY TRIBAL COUNCIL, ACCOMPANIED BY JOSEPH JARNAGHAN, TRIBAL 
 COUNCILMAN, HOOPA VALLEY TRIBAL COUNCIL AND THOMAS SCHLOSSER, 
                            COUNSEL

    Mr. Marshall. I am Clifford Lyle Marshall, chairman of the 
Hoopa Valley Tribe.
    At this time, I ask that our written testimony be included 
in the record.
    The Chairman. Without objection.
    Mr. Marshall. Thank you for this opportunity to present the 
Hoopa Tribe's position on the Interior Report on the Hoopa 
Yurok Settlement Act. I am here today with council member 
Joseph Jarnaghan and attorney Tom Schlosser.
    First, let me express the Hoopa Tribe's deepest gratitude 
to Chairman Inouye, Vice Chairman Campbell and the other 
members of this committee for the leadership in achieving 
passage of the landmark Hoopa Yurok Settlement Act. We also 
acknowledge and appreciate the hard work of your dedicated 
staff. This act could not have occurred without your decision 
to resolve the complex problems that had crippled our 
reservation and tribal government for more than 20 years.
    The years since its passage have demonstrated the 
outstanding success of the Settlement Act. It resolved the 
complex issues of the longstanding Jesse Short case, the act 
vested rights and established clear legal ownership in each of 
the tribes to the respective reservations. It also preserved 
the political integrity of the Hoopa Tribe by confirming the 
enforceability of our tribal constitution.
    The Hoopa Tribe waived its claims against the United States 
and accepted the benefits provided in the act and since then we 
have accomplished a number of tribal objectives. We immediately 
embarked on a strategy to reestablish control of our small 
Indian nation and were one of the self-governance tribes. We 
believe that tribal self-governance is the true path to trust 
reform.
    Although the Yurok Tribe rejected the settlement offer 
provided in the act, it nevertheless provided a means for 
organization of the Yurok Tribe, use of Federal properties for 
establishment of tribal government offices and the ability to 
obtain Federal grants and contracts. The act ultimately enabled 
the Yurok Tribe to join the ranks of self-governance tribes. 
The Yurok Tribal Council could not stand before you today as 
tribal government officials without this act.
    The Settlement Act called for an end to litigation. It 
provided benefits to the Hoopa Tribe and the Yurok Tribe on the 
condition that they waive all claims which they might assert 
against the United States as arising from the act. The Hoopa 
Tribe accepted that offer. The Yurok Tribe rejected that offer 
and sued the United States and so the act as applied did not 
authorize payments to them. As a result, the Yurok Tribe is now 
clearly prohibited by the act from receiving a portion of the 
settlement fund. Congress should not now conclude that the act 
was unfair due to the fact the Yurok Tribe did not receive the 
benefits of the act. The Yurok Tribe made a conscious decision 
to sue and thereby chose to forego nearly 13 years of potential 
development and economic opportunity.
    The Hoopa Tribal Council would be remiss in our duties to 
our members if we did not see return of the timber revenues 
derived exclusively from the Hoopa Valley Indian Reservation. 
Over 98 percent of the settlement fund balance comes from Hoopa 
escrow accounts derived from logging on Hoopa lands. I must 
respectfully disagree with Secretary McCaleb's referring to 
this fund as the Yurok account. The act refers to the money as 
Hoopa escrow moneys.
    In 1988, the Hoopa Tribe enacted a resolution authorizing 
the use of these Hoopa escrow moneys as a settlement offer to 
end the effects of the litigation leading to the act. That 
consent was required in the act. The Hoopa Tribe's resolution, 
however, does not authorize use of these moneys for purposes 
not provided in the act. The Hoopa Tribe's agreement that the 
act provided a settlement offer of Hoopa moneys to the Yurok 
Tribe was withdraw by operation of law when the Yurok Tribe 
sued the United States.
    The answer to the question what happens now to the 
settlement fund must be found outside the act. Federal law 
provides for payment of proceeds from logging on tribal lands 
to the tribe whose reservation was logged. It is clear that the 
Hoopa Valley Indian Reservation belongs to the Hoopa Tribe and 
that the Hoopa Tribe is the only governing body concerned with 
the sale of timber on the unalloted trust land of the Hoopa 
Reservation.
    It simply follows that to the extent money remaining in the 
settlement fund came from the Hoopa Tribe's Reservation, the 
Hoopa Tribe is the only tribe entitled to those proceeds. 
Certainly a party to any other legal dispute which rejected the 
settlement offer, sued instead and lost could not come back and 
claim the previously made settlement offer. The Hoopa Tribe 
should not now be forced to pay for prior injustices that 
resulted during the allotment era or from the Yurok Tribe's 
decision to sue.
    Using the settlement fund remainder for such purposes 
forces the Hoopa Tribe to be liable for the Federal 
Government's actions. Moreover, it would force the Hoopa Tribe 
to pay for the poor judgment of the Yurok Tribe's decision to 
litigate. We know of no other situation where Congress has 
taken resources and resource revenues derived from one 
reservation and simply given it to another reservation.
    Congress was thorough in developing the Settlement Act. 
Congress considered history, aboriginal territory, demographics 
and equity. Likewise, Federal courts have held that the Hoopa 
Valley Indian Reservation was historically the homeland of the 
Hoopa Tribe as a matter of history and as a matter of law. We 
know today that the Yurok Tribe would attempt to claim 
otherwise.
    These are not new issues and after 40 years of litigation, 
the courts have heard and determined this issue and every other 
possible issue to be raised in regard to this piece of 
legislation. The litigation is now over. We ask Congress now to 
respect these judicial decisions and move forward.
    In conclusion, the Interior report to Congress is 
disappointing. Interior concludes that neither tribe is 
entitled to the fund under the act but recommends that they 
administer the fund for the benefit of both the Hoopa and Yurok 
Tribes. This is clearly contradictory. We have long and hard 
experience with such administration during the Short v. United 
States era. As another witness will testify, Interior lacks the 
legal authority and the competence to carryout such 
responsibilities fairly.
    We believe the issues now before Congress should be 
resolved through considered thought and hard work over some 
period of time, not necessarily years but long enough to ground 
any new legislation on substance and reason rather than 
emotion.
    We have attempted to negotiate and remain open to 
negotiation.
    Thank you for your time.
    [Prepared statement of Mr. Marshall appears in appendix.]
    The Chairman. Thank you, Mr. Chairman.
    Would your councilman and the counsel wish to say 
something?
    Mr. Marshall. Yes.

  STATEMENT OF JOSEPH JARNAGHAN, COUNCIL MEMBER, HOOPA VALLEY 
                             TRIBE

    Mr. Jarnaghan. My name is Joseph Jarnaghan. I thank you for 
the opportunity to speak before you. I consider it a great 
honor.
    I am a council member of the Hoopa Valley Tribe. Before 
being elected to the council, I worked for the tribe's timber 
industry for many years. I have a written statement and request 
that it be included in the record.
    The Chairman. Without objection, so ordered.
    Mr. Jarnaghan. Our forests are invaluable to our tribe. I 
want to tell you with the use of some slides why the return of 
the Hoopa escrow moneys to the Hoopa Valley Tribe is 
particularly appropriate in this case now that the payment 
provisions of the act have been exhausted.
    The first slide is a map of the roads built on the Hoopa 
Valley Reservation beginning in the 1940's. There are 550 miles 
of road on the reservation. These roads are a major source of 
sediment production and contamination of our waters because the 
Bureau of Indian Affairs' maintenance of these roads was 
grossly inadequate.
    When the BIA clearcut our forests, which ultimately 
generated the settlement fund, the BIA was more interested in 
the volume of timber going to the mill to create the settlement 
fund account than it was in the environmental state of our 
reservation.
    Today, the Hoopa Tribe is still faced with the forest 
resource management and rehabilitation costs that were left 
undone. As a result, we have been spending $200,000 to $400,000 
per year from tribal revenues to fix this road system. This 
year in the Pine Em Timber Sale, we have over 100 culverts that 
need to be installed as a result of the job not being done when 
the BIA harvested our timber between 1972 and 1988. That was 
424 million board feet of timber.
    The road construction standards the BIA used when 
harvesting our timber were deplorable and created ongoing 
problems that we continue to deal with today. The road erosion 
is devastating to our fisheries, water quality and riparian 
organisms. As you can see by this slide which shows a log jam 
that blocks fish passage, you will also notice the unit went 
right into the creek itself. The BIA logged 33,000 acres of 
tribal timber before the Settlement Act was passed. Most of the 
rest of our reservation is difficult to log because of steep 
slopes and in many cases, it is impossible to log because of 
ESA and National Marine Fisheries Service restrictions. Most of 
the easy units were logged to create the settlement fund.
    These slides show that the BIA simply clearcut our 
reservation. This degraded cultural resources and created large 
areas for the tribe to now rehabilitate. Assistant Secretary 
McCaleb said Tuesday at the trust reform hearing that most 
tribes would not clearcut their land and that is a fact but 
unfortunately, the BIA did clearcut our forest. Timber stand 
improvements cost us over $500 per acre to treat. At 2 to 3 
years old, we grub around trees for conifer release; 10 to 15 
years after the harvesting, these clearcuts are invaded by 
brush and must be brushed by hand because we don't allow 
herbicide spraying. We do this at increased cost to promote 
tree growth as well as to ensure water quality.
    We have suffered terrible forest fires. The Megram fire of 
1999 shown here destroyed 4,500 acres of our reservation, 
mostly 30 year old stands that had been previously treated at 
the cost of $1,000 per acre.
    Our tribe must not be forced to withstand losing escrow 
moneys that came from timber cuts on our reservation and having 
to finance the forest restoration and rehabilitation costs 
resulting from forest fires or poor BIA timber mismanagement. 
The settlement fund remainder was generated almost exclusively 
from timber from our reservation. Our forest has been ravaged 
by the BIA, our money has been taken from our people to create 
this fund and we have been forced to fight clear to the Supreme 
Court to defend our reservation, costing the Hoopa Tribe much 
money, time and lost opportunity.
    Now the Yurok Tribe wants the settlement fund anyway. Is 
that fair? The fund that was left on the table by the Yurok 
Tribe's refusal to waive its claim should be returned to us so 
we can rehabilitate our aboriginal territory and our forests 
after the damage that was done to them by the BIA clearcutting.
    Thank you.
    [Prepared statement of Mr. Jarnaghan appears in appendix.]
    The Chairman. Thank you very much.
    Mr. Schlosser.

                 STATEMENT OF THOMAS SCHLOSSER

    Mr. Schlosser. My name is Thomas Schlosser. I thank the 
committee for the opportunity of submitting testimony on the 
Secretary's report.
    I have been honored to serve as the litigation counsel for 
the Hoopa Valley Tribe for over 20 years. During that time, I 
have represented the Tribe in the Short litigation and in the 
litigation concerning the Settlement Act.
    I have several points I would like to make. First, the 
Secretary's report threatens a return to the situation the 
tribes were in prior to passage of the Settlement Act. The 
Settlement Act was necessitated by complex litigation among the 
United States, the Hoopa Valley Tribe and a large number of 
individual Indians, most of whom but not all, have become 
members of the Yurok Tribe.
    The chairman mentioned the Karuk Tribe and there are a few 
members of the Karuk Tribe who were involved in the Short 
litigation and were held to be Indians of the reservation. It 
is a very small fraction of the Karuk Tribe, I would guess less 
than 10 percent. Whereas of the people who were held to be 
Indians of the reservation who elected to join the Yurok Tribe 
in 1991, the base roll of the Yurok Tribe was entirely made up 
of Indians of the reservation.
    There is another large fraction of Indians of the 
reservation that Mr. McCaleb referred to who chose to 
disaffiliate from both tribes, the so-called lump sum option 
under section 6(d). The Secretary's report mistakes the 
Settlement Act as having primarily been a boundary resolution 
act and instead suggests that the settlement fund be 
administered for the mutual benefit of both tribes.
    Boundary clarification was only a small part of this act 
and the efforts to administer the fund for mutual benefit were 
dramatically unsuccessful prior to the Settlement Act. For 
years, long proceedings were necessary to get a tribal budget 
approved. Sometimes the tribal budget would get approved in the 
last month of the fiscal year because of Interior's inability 
to adopt standards and to determine whether things affected the 
reservation fairly. This led to conflicts between rulings in 
the Short case and the Puzz case over which kinds of 
expenditures were permissible.
    For example, the Short case in 1987 held that money that 
was distributed to the tribe for tribal governmental purposes 
did not damage the Short plaintiffs, was not an injury to the 
Indians of the reservation and did not invade their rights. The 
Puzz court, a district court in the Northern District of 
California, held to the contrary, that funds used by the Hoopa 
Valley Tribe did damage the Indians of the reservation. So 
there are insufficient standards and not enough expertise to 
make that recommendation work well. As George Santayana said, 
``Those who cannot remember the past are condemned to relive 
it.'' There is an error found in Interior's recommendation.
    Under the Settlement Act, there are some benefits 
potentially available to the Hoopa Valley and Yurok Tribes. 
Only 22 Short plaintiffs were adjudicated to be Indians of the 
reservation in 1973, so the court embarked on a long process 
which actually is still underway of identifying the eligible 
Indians of the reservation and their heirs for inclusion in per 
capita payments.
    This ruling precipitated other lawsuits, precipitated 
administrative actions that brought tribal government to a 
standstill, jeopardized public health, and made necessary the 
Hoopa Yurok Settlement Act. The Settlement Act originated in 
the House and in the House two hearings were conducted, one by 
the Interior and Insular Affairs Committee and another by the 
Judiciary Committee, and this committee conducted two hearings 
on its bill. And as you recall, at least three law firms 
appeared and participated in the proceedings on behalf of 
various groups of what have become Yurok tribal members. This 
included the Faulkner and Wunsch firm which represented most of 
the Short plaintiffs, many who became Yurok tribal members, the 
Heller, Ehrman White & McAuliffe firm which represented the 
Short plaintiffs, the Jacobsen, Jewitt & Theirolf firm which 
represented the Puzz plaintiffs, and so although the Yurok 
Tribe had not organized in a fashion to designate its own 
attorney, its members participated completely and fully.
    With the committee's guidance, after all these legal issues 
were discussed and the equities were considered, the parties 
came together on a settlement package to be laid before each 
one of the contestants. At the request of the House, the 
Congressional Research Service analyzed the House bill to 
determine whether Congress could lawfully do this or whether it 
would involve a taking of property. The Congressional Research 
Service concluded that because of the unique background of this 
reservation and the litigation, it was possible that a court 
would conclude that non-tribal Indians, Indians of the 
reservation, had some vested interest in reservation property.
    Ultimately, the courts didn't conclude that but the fact 
that there was a risk there is part of why the committee and 
Congress in the Settlement Act went to great pains to offer 
benefits in exchange for waivers of claims. So the settlement 
fund, for example, was allocated essentially in three ways, 
partly to the Hoopa Valley Tribe and the Yurok Tribe, if those 
tribes waived their claims, and partly to Indians as 
individuals who qualified as Indians of the reservation and 
appropriated money was provided which defrayed most of the cost 
of the lump sum payments.
    As Mr. McCaleb correctly said, the appropriated money was 
not sufficient for the people who disaffiliated from both 
tribes, so some of the Yurok and Hoopa escrow funds went to 
that payment.
    This act nullified the Short rulings. That was the purpose 
of the act. The act, this committee said in its report, was not 
to be considered a precedent for individualization of tribal 
communal assets but rather, sprang from the realization that 
there were some judicial decisions that were unique and the 
committee concluded,

    The intent of this legislation is to bring the Hoopa Valley 
Tribe and the Yurok Tribe within the mainstream of Federal 
Indian law.

    That is in the committee's report on page 2.
    The Settlement Act preserved the money judgments that had 
been won by the individual Short plaintiffs, so they ultimately 
recovered about $25,000 each from the treasury in addition to 
the payments that were made to them in exchange for claim 
waivers under section 6 of the act.
    The committee said while it didn't believe the legislation 
was in conflict with the Short case, ``To the extent there is 
such a conflict, it is intended that this legislation will 
govern.'' The reason that is important now is because it is 
indisputable that over 98 percent of the remainder in the 
settlement fund is derived from Hoopa escrow funds, from Hoopa 
timber sales, trees cut on the Hoopa Square. That proportion in 
our view belongs to the Hoopa Valley Tribe.
    The Short case is not to the contrary. The Hoopa Valley 
Tribe has a right to timber proceeds for trees cut on the 
Square. As a historical matter, tribes didn't have a right to 
proceeds for timber sales on reservation until 1910 when 
Congress passed a general timber statute now enacted in section 
407. In 1964, Congress changed the designation of beneficiaries 
from the 1910 Act which said the proceeds would be used for the 
benefit of Indians of the reservation. In 1964 that was changed 
to say that proceeds would be used for the benefit of Indians 
who are members of the tribe or tribes concerned.
    At that time, the Department of the Interior, which 
advocated that technical correction, explained that Indians of 
the reservation didn't really describe anyone and that in fact 
members of the relevant tribe shared in the proceeds of sale of 
tribal properties. In the Short case, the 1983 opinion, the 
court held to the contrary and said Congress, when it used the 
term tribe here meant only the general Indian groups communally 
concerned with the proceeds and not officially organized or 
recognized tribes.
    So another important part of the Settlement Act was 
correcting the damage done to the general timber statute. A 
section of the Settlement Act amended section 407 to say the 
proceeds of sale shall be used as determined by the governing 
bodies of the tribes concerned.
    In the litigation that came after the Settlement Act, the 
Yurok Tribe and other plaintiffs continued to presume the 
correctness of some of the rulings in the Short case, in 
particular, the 1891 Executive order. The Short case did not 
support their claim that they had a right to the Hoopa escrow 
funds generated from timber cut on the Hoopa Square. Instead, 
in two opinions in 1987, an opinion discussed in this 
committee's report, and later in 1993, in the sixth published 
Short opinion, the Short court held that the plaintiffs there 
did not have a right to the trust funds, the escrow funds. 
Instead, the court made very clear that all it held in Short 
was that if money is distributed to individuals, not 
distributions to tribes but individualization of money, gave 
rise to a right by Indians of the reservation to share.
    The Federal courts rejected this most recently in the 
litigation concerning the Hoopa Yurok Settlement Act. Without 
the theories of the Short case that as Indians of the 
reservation, they have some claim to the timber revenues of the 
Square, without that theory, there is no connection between the 
Yurok Tribe and the Hoopa escrow moneys. The Hoopa escrow 
moneys were part of a settlement package and that is the only 
method by which they could have had access to them.
    As the court ruled in the most recent case, Karuk Tribe of 
California v. United States, this litigation is the latest 
attempt by plaintiffs to receive a share of the revenues from 
timber grown on the Square. The Settlement Act nullified the 
Short rulings by establishing a new Hoopa Valley Reservation. A 
necessary effect of the Settlement Act was to assure payment of 
the timber revenues from the Square exclusively to the Hoopa 
Valley Tribe.
    It was the purpose of the Settlement Act to return these 
tribes to the mainstream of Federal Indian law. In the 
mainstream of Federal Indian law, the proceeds of trees cut on 
a tribe's reservation go to that tribe.
    I want to mention one other issue that comes up recurrently 
and that is the assertion that a portion of the Hoopa Square 
was actually traditional Yurok Tribe territory or some even say 
traditional Karuk Tribe territory.
    As the chairman pointed out, this is not a new issue, it is 
an issue that has been litigated specifically and in the just 
completed litigation concerning the Settlement Act, Karuk Tribe 
v. United States, the court's ruling was that both as a matter 
of history and as a matter of law, the record does not support 
the Yurok's claim to Indian title to the site of the Square. 
This issue is adverted to in this committee's report concerning 
the Settlement Act where the committee pointed out that the 
Settlement Act's choice of the Bissell Smith Line as the 
dividing line between the two reservations had the effect of 
putting a traditional Yurok village into the Yurok Reservation 
where it might previously have been in the Square.
    With that, I would conclude my remarks and would be happy 
to answer questions.
    [Prepared statement of Mr. Schlosser appears in appendix.]
    The Chairman. Thank you.
    One of the first issues confronting me as chairman of this 
committee was this matter. Obviously I knew very little about 
Indian country or Indian history or relationship. I spent 2 
whole days in Sacramento conducting hearings, I visited the 
Valley, I would never fly back again and I must say that I 
thought the committee did pretty well.
    But this committee was a successor of other committees in 
the U.S. Senate that felt that all the answers were in 
Washington, that the answers were in the minds of lawyers and 
government officials. What we have here today is the product of 
government officials and lawyers, starting off with deception 
and based upon the deception coming forth with conclusions and 
then obviously wanting to justify the deception.
    In the years that followed my tenure as chairman beginning 
in 1987, I have become much more dependent upon the wisdom of 
Indian country, to tell me and to tell Washington what the 
solutions should be. We have too often tried to impose our will 
upon Indian country and this is one example.
    In looking at the activities of 1852 and 1864, one must 
assume that the Indians were well organized with a whole array 
of lawyers who knew the Constitution inside and out and 
therefore they had their rights and liabilities all determined 
and that was not so. The Government of the United States went 
out of its way to make certain that Indians never got 
organized. I wish we could start all over and I could tell the 
Hoopa and the Yuroks why don't you all get together as you did 
in the old days. In the old days, it was either war and kill 
each other and decide or you sit down, have a big conference. 
In some places they smoked tobacco or exchanged gifts. Maybe 
the time has come for the restoration of the old method because 
as certain as I sit here if the Congress of the United States 
should come forth with Settlement Act No. 2, we will be back 
here in about 20 years trying to draw up Settlement Act No. 3.
    I have a series of technical questions but those are all 
legal questions. It is good to know the history but I was 
trained to be a lawyer myself and when one presents his case, 
you make certain you don't say good things about the other 
side, you speak of the good things about your side. That is 
what you are paid for. I would expect lawyers to do the same.
    With that, I will be submitting questions of a technical 
nature for the record.
    May I thank you, Mr. Chairman and your staff.
    Our next witness is the most distinguished member of Indian 
country, the chairperson of Yurok Tribe of Klamath, California, 
Sue Masten.

       STATEMENT OF SUE MASTEN, CHAIRPERSON, YUROK TRIBE

    Ms. Masten. Good morning.
    I have the distinct honor to serve as the chairperson of 
the Yurok Tribe. The Yurok Tribe is the largest tribe in 
California with over 4,500 members of which 2,800 members live 
on or near the reservation.
    Thank you for holding this hearing. We appear today with 
deep resolve and a commitment to working hard toward addressing 
the issues before you.
    I know you can appreciate that the issues here run deep and 
are heart felt. I also know that when the act was passed 
Congress believed that the act reached equity for both tribes. 
Thank you for your willingness to hear our concerns that those 
goals were not achieved.
    We especially thank you, Chairman Inouye, for taking this 
very significant step toward addressing our concerns for equity 
under the Hoopa Yurok Settlement Act to look at what has been 
achieved or not achieved during the last 14 years and for 
asking what now may need to be done.
    We are deeply appreciative of your October 4, 2001 letter 
where you invited both tribes to step beyond the act to address 
current and future needs. We know this committee sought to 
achieve relative equity for both the Hoopa Valley Tribe and the 
Yurok Tribe in 1988.
    During the course of our many meetings with members of 
Congress and their staff, we have been asked why Congress 
should look at this matter again. The answer to this question 
is clear, the act has not achieved the full congressional 
intent and purpose and Congress often has to revisit issues 
when its full intent is not achieved.
    Additionally, we believe that the Departments of the 
Interior and Justice did not completely or accurately inform 
Congress of all the relevant factors. Congress did not have the 
full assistance from the departments that you should have had.
    In reviewing the Department's testimony and official 
communications, we were appalled that the Yurok historic 
presence on the Square was minimized or ignored and that the 
relative revenue and resource predictions for the tribe were 
also wrong. Furthermore, we are also concerned about the 
significant disparity of actual land base that each tribe has 
received.
    Can you imagine in this day and age an Assistant Secretary 
addressing a serious dispute between tribes by describing one 
tribe as a model tribe and dismissing the other, as some sort 
of remnant who would only need 3,000 acres because only 400 
Indians remain on what would become their reservation.
    Interior also told Congress that the income of the tribes 
was comparable. The Hoopa Tribe would earn somewhat over $1 
million a year from timber resources and the Yuroks had just 
had $1 million plus fishery the year before. Here are the real 
facts.
    Several thousand Yuroks lived on or near the reservation, 
on or near is the legal standard for a tribe's service 
district. There is a serious lack of infrastructure, roads, 
telephones, electricity, housing on the Yurok Reservation and 
we have 75 percent unemployment and a 90-percent poverty level. 
Further, there is a desperate need for additional lands, 
particularly lands that can provide economic development 
opportunities, adequate housing sites and meet the tribal 
subsistence and gathering needs.
    The Department gave the impression that the Short 
plaintiffs who were mostly Yurok had left our traditional 
homelands, were spread out over 36 States, were perhaps non-
Indian descendants and were just in the dispute for the 
dollars. This impression was highly insulting to the Yurok 
people and a disservice to Congress.
    There are at least as many Yuroks on or near the 
reservation as are Hoopas. With respect to the relative income 
or resource equity projected for the new reservations, it is 
true there was a commercial fishery shortly before the act, 
true but also very misleading. Commercial fishing income, if 
any, went predominantly to the Hoopa and Yurok fishermen. The 
fact was that in most years, there was no commercial fishery 
and in many years, we did not meet our subsistence and 
ceremonial needs.
    Since the act, Klamath River coho salmon have been listed 
as an endangered species and other species are threatened to be 
listed. In fact, the Klamath River is listed as one of the 10 
most threatened rivers in the Nation and has lost 80 to 90 
percent of its historic fish populations and habitat. Today, 
the fish runs we depend on are subject to insufficient water 
flows and in spite of our senior water right and federally 
recognized fishing right, we continue to have to fight for 
water to protect our fishery.
    The average annual income of the Yurok Tribe from our 
salmon resource was and is nonexistent. To be fair, we should 
note that since the Settlement Act, the Yurok Tribe has had a 
small income from timber revenues, averaging about $600,000 
annually. With respect to the land base, the Yurok Tribe's 
Reservation contains approximately 3,000 acres of tribal trust 
lands and approximately 3,000 acres of individual trust lands. 
The remainder of the 58,000 acre reservation is held in fee by 
commercial timber interests.
    The Hoopa Tribe Reservation has approximately 90,000 acres 
with 98 percent in tribal trust status. Regarding the $1 
million plus in timber revenues projected for the Hoopa Tribe, 
testimony of the Hoopa tribal attorney in 1988 indicated the 
annual timber revenue from the Square was approximately $5 
million. Since the act, the Hoopa timber revenues have been $64 
million. The point is the projected revenue comparison that 
should have been before the committee in 1988 was zero 
fisheries income for the Yurok Tribe and more than $5 million 
in annual timber and other revenues from the Square for the 
Hoopa Valley Tribe, not the comparable $1 million or so for 
each tribe the committee report relied upon.
    This disparity of lands, resources and revenues continues 
today and hinders our ability to provide services to our 
people. Unfortunately, the Yurok Tribe in 1988 unlike today was 
unable to address misleading provisions of key information. The 
Yurok Tribe, although federally recognized since the mid-19th 
century, was not formally organized and had no funds, lawyers, 
lobbyists or other technical support to gather data or analyze 
the bill, to present facts and confront misinformation.
    It is important to acknowledge the positive provisions of 
the Act which provided limited funds to retain attorneys and 
others to assist us in the creation of the base roll, the 
development of our constitution and the establishment of our 
tribal offices. We also appreciated the Senate committee report 
recognized and acknowledged that the tribe could organize under 
our inherent sovereignty which we did.
    Had we been an organized tribe, we would have testified 
before you in 1988 and we would have pointed out that while it 
is true the Square is part of the Hoopa peoples' homeland, it 
is also true that the Square is part of the ancestral homelands 
of the Yurok people.
    Almost without fail throughout the testimony received in 
1988, the Square is described as Hoopa and the addition is 
described as Yurok. The Yurok ancestral map provided to you 
shows that our territory was quite large and included all the 
current Yurok Reservation, 80 percent of Redwood National Park, 
as well as significant portions of the U.S. National Forest.
    Yurok villages existed in the square and these sites have 
been verified by anthropologists. This fact should not be a 
matter of dispute. The Justice Department and the Hoopa Valley 
Tribe in Yurok v. United States agreed in a joint fact 
statement that the Yuroks were always inhabitants of the 
Square. We are not claiming that we had Indian title to the 
whole square but that we have always been a part of the Square. 
The Short cases reached that same determination.
    We think these different perspectives are important as we 
consider today's issues. However, it is critical for everyone 
to understand that we are not asking Congress to take back 
anything from the Hoopa Valley Tribe that they received under 
the Settlement Act. What we do want is for the committee to 
look at the relative equities achieved under the act, 
understanding the Yuroks have always been inhabitants of the 
Square and have never abandoned our connection to our 
territories, our culture and traditions.
    We have already noted the significant disparities between 
the tribes in income, resources, land base and infrastructure 
after the act. The data provided by Interior Department today 
supports our position. To reiterate, the Hoopa Valley Tribe 
received a 90,000-acre timbered reservation of which 98 percent 
is held in tribal trust. The Yurok Tribe received a 58,000-acre 
reservation with 3,000 acres in tribal trust, containing little 
timber. The map we have provided to you shows this extreme 
disparity.
    We have already noted that the projected income for the 
tribes were incorrect. Time has verified that the predictions 
of a bountiful or restored Yurok fishery has not happened. It 
is also a fishery that we share with the non-Indians as well as 
Hoopa. Hoopa timber resources however have produced substantial 
income exceeding the 1988 predictions as reflected in the 
Interior Department's records. In addition, as this committee 
is aware from your recent joint hearing on telecommunications, 
infrastructure on the Yurok Reservation is virtually 
nonexistent.
    In our response to Senator Inouye's letter of October 4, 
2001, we have submitted an outline of an economic development 
and land acquisition plan to you and the Department of the 
Interior. The plan is based on our settlement negotiations with 
the Department in 1996 and 1997. We would like to request from 
you today the creation of a committee or a working group 
composed of tribal administration and congressional 
representatives and hopefully, under your leadership, Senator.
    We recommend that the committee's responsibility be to 
develop legislation that would provide a viable self sufficient 
reservation for the Yurok people as originally intended by the 
Settlement Act. As you can see, our issues are broad based and 
focus on equity for the Yurok Tribe. The Department's report 
has prompted this hearing to address access by the Yurok Tribe 
to the Yurok Trust Fund. The Interior Department has said that 
neither tribe has legal entitlement to the Yurok Trust Fund. 
Our view is simple.
    The financial equities and the actual distributions of 
timber revenues from 1974 to 1988 clearly demonstrate that the 
Yurok Tribe should receive its share of the settlement fund as 
the act intended. Arguments based on where the revenue came 
from on the joint reservation are wrong. These revenues 
belonged as much to the Yuroks of the Square and the Yuroks of 
the extension as they did to the Hoopas of the Square. This is 
the key point of the cases both tribes lost in the Claims 
Court.
    The point is that prior to 1988, the Hoopa Valley 
Reservation was a single reservation intended for both tribes 
and whose communal lands and income were vested in neither 
tribe. Short also means that the Department could not favor one 
tribe above the other in the distribution of assets. These are 
pre-1988 moneys. We should not have to reargue what Yuroks won 
in the Short cases.
    After the final 1974 decision in Short I, the Department 
ceased to distribute timber revenues only to the members of the 
Hoopa Valley Tribe and began to reserve 70 percent of the 
timber revenues for the Yurok plaintiffs. The remaining 30 
percent of the revenues were for Hoopa and were placed in a 
separate escrow account which the Department disbursed to the 
Hoopa Valley Tribe. When we discussed the 1974-88 timber 
revenues with the Hoopa Tribal Council, they asserted that all 
of the timber revenues should have been theirs. Legally as the 
committee knows, that is not what the courts have said. No 
Indian tribe, before 1988, had a vested right to the Square or 
its assets. In 1974, the Federal courts had finally determined 
that the Secretary had since 1955 wrongfully made per capital 
distributions to only Hoopa tribal members and the plaintiffs, 
mostly Yurok, were entitled to damages against the United 
States. Damages were eventually provided to the plaintiffs for 
the years 1955-74 but not for 1974-88. The point is that 
neither tribe had title to timber or a constitutional right to 
the revenues from 1974-88. If the revenues were distributed to 
one group, the other group was entitled to its fair share. It 
did not matter what percentage of the timber proceeds came from 
the square or came from the addition because according to the 
Federal courts, neither revenues were vested in either tribe.
    In 1974-88, revenues were distributed to the Hoopa Tribe, 
first under the 30 percent Hoopa share totaling $19 million and 
second under the Settlement Act. As you are aware, the 
Settlement Act placed the 70 percent escrow account which was 
$51 million, the small balance of the Hoopa 30 percent escrow 
account, some smaller joint Hoopa Yurok escrow accounts, Yurok 
escrow accounts, as well as the $10 million Federal 
appropriation all in the settlement fund.
    In 1991, the Department split the settlement account 
between the two tribes based on our enrollments. The Hoopa 
Valley Tribe was allocated 39.5 percent of the settlement fund 
or $34 million. Because the Hoopa Valley Tribe had executed its 
waiver, the Department provided these funds to the tribe. The 
Yurok Tribe was allocated $37 million and it was put in a Yurok 
trust account and was not provided to us.
    From 1974 to 1988, timber revenues and interest was 
approximately $64 million of which the Hoopa Tribe received a 
total of $53 million or 84.2 percent of this total. Also in 
1991, the claims attorneys for the Short cases sued the United 
States to try to recover attorneys fees from the settlement 
account. Two other Yuroks and I intervened in this case as co-
defendants to protect the Yurok share of the settlement funds. 
The United States approved this intervention and the Justice 
Department attorneys encouraged our participation and we won 
this case.
    As you are aware, in 1993, the Yurok Tribe sued the United 
States for a takings claim under the Settlement Act. We lost 
this case in 2001 when the Supreme Court declined to review a 2 
to 1 decision by the Federal Court of Appeals. We lost this 
case for the same reason that the Hoopa Tribe lost all of their 
pre-1988 cases. No part of the pre-1988 Hoopa Valley 
Reservation was vested to any Indian tribe and none of us had 
title against the United States. We could argue that the case 
was unfair and historically blind and that it is outrageous to 
use colonial notions of Indian title in these modern times but 
it doesn't matter. We lost, as the Hoopa Tribe lost before us, 
and in this legal system, the only appeal we have left is an 
appeal to equity and justice before Congress to fix these 
wrongs.
    At the same time in 1993, we adopted the conditional waiver 
which provided that our waiver was effective if the Settlement 
Act was constitutional. The courts have determined that the act 
is constitutional. That determination should have been 
sufficient to meet the condition of our waiver but the 
Department held that our waiver was not valid. Although we 
disagree, we have not challenged the Department's judgment in 
the court and will not take the committee's time to debate it 
today.
    The Department determined that the Hoopa waiver was 
effective and they received their funds under the Act. 
Therefore, they have no legal right to additional funds. The 
Department has reported to Congress that you should resolve 
this issue. Among other things, the Department sees itself as 
the administrator of the funds for both tribes. In resolving 
these issues, the report indicates that Congress should 
consider funds already received and focus on the purpose of the 
act to provide for two self sufficient reservations. A better 
solution would be to permit the Yurok Tribe to manage our own 
funds. We, of course, would be willing to submit a plan for 
review and approval. In fact, our constitution mandates that a 
plan be developed and approved by our membership before any of 
these funds are spent.
    As we have stated, a complete review of the record 
indicates that almost all of the trust lands, economic resource 
and revenues of the pre-1988 joint reservation have to date 
been provided almost exclusively to the Hoopa Valley Tribe. A 
final point to consider is that in 1996, we negotiated an 
agreement with the Hoopa Valley Tribe to support H.R. 2710 in 
return for their support of our settlement negotiation issues 
specifically the balance of the settlement funds. Apparently 
the Hoopa Valley Tribal Council now believes that its end of 
the deal ended with the collapse of our settlement 
negotiations. We lived up to our end of the bargain and the 
Hoopa Valley Tribe received an additional 2,600 acres of trust 
land. This almost equals the total tribal trust lands we 
received under the act. Copies of both of our 1996 commitment 
letters have been provided with our written testimony.
    In closing, back home our people are preparing for our most 
sacred ceremonies, the White Deer Skin dance and the Jump 
dance. These ceremonies are prayers to the Creator to keep 
balance in our Yurok world. When our people are in balance, we 
are strong, our children's futures are bright, life is as it 
should be, good. When our people are not in balance, we are 
weakened, our people are disheartened and we worry about what 
will become of our children. Life is not good.
    In a way, this hearing is a kind of ceremony. We come 
seeking balance for our people, we come seeking strength, we 
come seeking a stable future for our children, we come seeking 
a good life for our tribe. Sadly, our people are not now in 
balance. Though our dances help our spiritual well being, the 
resources given to us by the Creator so that we would never 
want for anything have been taken from us. Once we were a very 
wealthy people in all aspects in our Yurok world, in our 
spirituality, in our resources and in our social-economic 
affairs. The sad irony is that because of our great wealth, we 
were targeted heavily by the Government's anti-Indian policies 
for termination and assimilation. Many of our elders have 
passed on never having received the benefits they were entitled 
to under Short and under the Hoopa Yurok Settlement Act. We 
hope Congress will not let more pass on without benefiting from 
the settlement fund.
    Be that as it may, we pray Congress will use its power to 
bring balance back to our people, that it will relieve our 
fears about our children's futures and make us strong once 
again, that it will make our lives good as they should be.
    Once more, Senator, thank you for the honor of appearing 
before the committee today and would welcome any of your 
questions.
    [Prepared statement of Ms. Masten appear in appendix.]
    The Chairman. Thank you very much.
    If the Congress is called upon to resolve this matter, I 
can assure you that the Congress can and will do so but I would 
hope that all of you assembled here would realize under what 
circumstances these decisions would be made. Here I sit alone 
before you. This is a committee of 15 members. The vice 
chairman unfortunately had to leave because of other 
commitments and other issues. As a general rule, we are the 
only two who sit through all of these hearings.
    Second, I think you should take into consideration that the 
sanctuary that Indian country once held in the Supreme Court 
may not be available. Supreme Court decisions of recent times 
have indicated that they are not too favorably inclined as to 
the existence of Indian sovereignty. I need not remind you of 
Nevada v. Hicks and the Atkins on Trading Post cases. Keeping 
that in mind, I wasn't being facetious when I said if you left 
it up to us for Settlement Act No. 2, you may get it but it may 
be worse than Settlement Act No. 1.
    Solutions for Indian problems coming from Indian country 
are always the best and I know you have attempted to sit 
together in the past but it has not succeeded but I would hope 
you can do so and come forth with a joint recommendation that 
both of you can approve and support because if we do it, 
somebody is going to get hurt. I have no idea who is going to 
get hurt but I can guarantee you somebody is going to get hurt.
    If you have the patience and the wisdom to get together and 
sit down, have negotiations and discussions and if you want to 
have the help of this committee to some mediation, we are happy 
to do so but to try to do this legislatively at this stage, I 
don't think is a wise thing because the foundation is shaky to 
begin with and this is not the kind of solution that lawyers 
can make, only Indians can make it. I would hope that you can 
sit together, begin a process. We would be very happy to help 
you and hopefully come forth in the not too distant future, 
maybe 6 months from now, with some solution. I can assure you 
that I will act speedily and expeditiously.
    The way it is now, I am the only one sitting here but this 
is the way the Congress of the United States acts 
unfortunately. If you want people who have no knowledge, no 
idea of your issues acting upon your case, you can have it but 
I think that's the wrong way.
    I will not ask you any questions at this time. We will just 
confuse it and maybe anger people further and that's not my 
mission here, to anger Indians. I think the time has come for 
Indians to get together. You have big problems ahead of you. If 
you can't solve the immediate problems at home, then you will 
have real problems on the big ones.
    With that, Chairperson Masten and Chairman Marshall, just 
for us, would you please stand up and shake hands?
    Ms. Masten. We have no problem with that, Senator. We work 
on many issues together where we have mutual benefit but I 
would like to say before I do that, we would request the 
committee's assistance because in our prior negotiations there 
has been a breach of trust because after our last negotiations, 
the Hoopa Tribe issued a press release.
    The Chairman. When you have negotiations, I will make 
certain there is a representative from this committee.
    Ms. Masten. Appreciate that, Senator. Thank you again.
    The Chairman. If you can keep your rhetoric reasonable and 
rationale and friendly, I think we can work out something.
    Mr. Marshall. I'm sorry, Senator. I cannot shake hands 
after being offended in that way. We did not offend them in the 
last negotiation and I cannot be that hypocritical.
    The Chairman. I think we should start the process.
    With that, this hearing is adjourned.
    [Whereupon, at 12:04 p.m., the committee was recessed, to 
reconvene at 2 p.m. the same day.]
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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 Joseph Jarnaghan, Councilman, Hoopa Valley Tribe 
                             of California

    My name is Joseph Jarnaghan and I am a member of the Hoopa Valley 
Tribal Council. Our tribe has lived on and governed its affairs in the 
Hoopa Valley for over 10,000 years. I testify as a tribal official 
elected in a democratic process by the tribal membership, and 
expressing the views of our people.
    On behalf of the Hoopa Valley Tribe, I want to thank this committee 
for the opportunity to be here today and to testify in this oversight 
hearing. I want to tell you why the return of the Hoopa escrow moneys 
to the Hoopa Valley Tribe is particularly appropriate in this case, now 
that the payment provisions of the Hoopa-Yurok Settlement Act have been 
exhausted.
    My first slide is a map of roads built on the Hoopa Valley Indian 
Reservation beginning in the 1940's. There are over 550 linear miles of 
road on the reservation. These roads are a major source of sediment 
production and contamination of our waters because the Bureau of Indian 
Affairs' maintenance of these roads was grossly inadequate, virtually 
nonexistent, when it clear-cut timber from our reservation. The Bureau 
was more interested in getting the trees down and to sale rather than 
forest resource management and rehabilitation. Now, the Hoopa Valley 
Tribe spends approximately $200,000 to $400,000 per year from tribal 
revenue to fix this road system. Simply put, the BIA road construction 
standards employed in harvesting timber from our reservation created a 
huge ongoing problem. The roads erosion is devastating to fisheries, 
water quality and riparian organisms. The tribe continues to 
rehabilitate old logging roads and landings that are major contributors 
to sediment production and which thereby affect fish habitat and water 
quality.
    The BIA cut down approximately 33,000 acres of tribal timber before 
the Hoopa-Yurok Settlement Act was passed. Most of the remainder of the 
reservation cannot be logged. As the photos illustrate, clear cutting 
management techniques were practiced by the BIA. This type of 
harvesting disregarded cultural resources and created large areas that 
the tribe must now rehabilitate through timber stand improvement 
projects. Even 10 years after harvesting, clear cuts have led to 
invasion by brush species, understocked timber regrowth, and unhealthy 
conditions susceptible to fire or insects. Timber stand improvement 
costs the tribe over $500 per acre to treat. Thin and release programs 
conducted by hand produce substantial improvements in growth rates.
    Our reservation has also been substantially damaged by forest 
fires. The Megram fire of 1999 resulted in approximately 4,500 acres 
being destroyed through fire suppression efforts on the reservation. 
About one-half of the damage was the result of ``back bum'' operations. 
The rest of the damage occurred through creation of a ``contingency 
fire line.'' The fire line was up to 400 feet wide and approximately 11 
miles long.
    The Hoopa Valley Tribe must not be subjected to the double hit of 
losing both the Hoopa escrow moneys derived from timbering activities 
on our reservation and having to finance the restoration and 
rehabilitation costs resulting from the BIA's poor timber harvest 
projects and forest fires. The potential application of Hoopa escrow 
funds to settlement costs never came to pass, instead we had to incur 
tremendous defense costs to protect our reservation. The Hoopa escrow 
funds from our reservation should be restored to meet the needs of our 
people.
                                 ______
                                 

Prepared Statement Thomas P. Schlosser, Counsel, Hoopa Valley Tribe of 
                               California

    My name is Thomas P. Schlosser and I am an attorney for the Hoopa 
Valley Tribe. I thank the committee for the privilege of presenting 
testimony concerning the report to Congress submitted by the Secretary 
of the Interior in March 2002, pursuant to Sec.  14(c) of Pub. L. 100-
580, as amended, the Hoopa-Yurok Settlement Act.
    I have been honored to serve as litigation counsel to the Hoopa 
Valley Tribe for over 20 years and, during that time, have represented 
the tribe in the hopelessly misnamed case of Short v. United States, a 
suit still pending after 39 years. Along with numerous lawyers 
representing various sides of the controversy, I participated in the 
proceedings of the 100th Congress and this Committee that fashioned the 
landmark Hoopa-Yurok Settlement Act.
    1. The Secretary's Report Threatens a Return to Pre-1988 
Conditions.
    The Settlement Act was necessitated by complex litigation between 
the United States, the Hoopa Valley Tribe, and a large number of 
individual Indians, most, but not all of whom were of Yurok decent. 
Those who do not recall the applicable court rulings or the conditions 
from which the Settlement Act emerged will not fully appreciate the 
strengths and weaknesses of the Secretary's Sec.  14(c) report. Thus, 
the Secretary's report mistakes the Settlement Act as having been 
enacted ``with the primary objective of providing finality and clarity 
to the contested boundary issue,'' and concludes with the 
recommendation that the Settlement Fund ``would be administered for the 
mutual benefit of both the Hoopa Valley and Yurok Tribes.'' The 
Secretary's report is not all wrong but boundary clarification was only 
an aspect of the Hoopa-Yurok Settlement Act. If administration of the 
Fund for the joint benefit of the tribes is the outcome of this process 
we will have returned to the difficult era between 1974 and 1988 that 
required passage of the Settlement Act in the first place. As George 
Santayana said, ``those who cannot remember the past are condemned to 
repeat it.'' The error of establishing a ``Reservation-wide'' account 
is clear from comparing Sec.  1(b)(1)(F) with Puzz v. United States, 
1988 WL 188462, *9 (N.D. Cal. 1988).
    Under the Settlement Act there are potential benefits currently 
unavailable to the Yurok and Hoopa Valley Tribes because of the Yurok 
Tribe's decision to reject the conditions of the act. The Hoopa-Yurok 
Settlement Fund is only one of the undistributed assets, and probably 
not the most valuable one, by comparison to the hundreds of acres of 
Six Rivers National Forest land within and near the Yurok Reservation, 
the money appropriated for Yurok land acquisition, the Yurok self-
sufficiency plan which was never submitted or funded, and the statutory 
authority to acquire land in trust for the Yurok Tribe. Thus. a second 
shortcoming of the Secretary's Sec.  14(c) report is that it focuses 
myopically on the Hoopa-Yurok Settlement Fund. Nevertheless, because 
the Settlement Fund is the only asset in which the Hoopa Valley Tribe 
has a continuing interest, my testimony will focus on it.
    2. The Short Case Was an Aberration From Federal Indian Law.
    The Settlement Act brought to an end a long detour from a correct 
decision of the Interior Department on February 5, 1958, the Deputy 
Solicitor's memorandum regarding rights of the Indians in the Hoopa 
Valley Reservation, California. The Solicitor's opinion found that a 
group of Indians had been politically recognized as the Hoopa Tribe by 
the United States in 1851 and were the beneficiaries of administrative 
actions in 1864 and an Executive order in 1876 setting aside the Hoopa 
Square for the benefit of any Indians who were then occupying the area 
and those who availed themselves of the opportunity for settlement 
therein. (Those Indians were, as this committee found in 1988, 
primarily Hoopa Indians, but the Hoopa Valley Tribe included other 
individuals who joined the community and ultimately became enrolled 
tribal members.) The Solicitor found that Commissioner of Indian 
Affairs had been correct in recognizing tribal title to the communal 
lands in the Hoopa Square to be in the Hoopa Valley Tribe. The Federal 
Government's action a generation later, in 189 1, to append to the 
Hoopa Valley Reservation the old Klamath River Reservation and the 
intermediate Connecting Strip, as an aid to the administration of those 
areas, could not have had any effect on the rights of Indians to 
property within the Reservation because Hoopa Valley rights attached in 
1864 and Klamath River Reservation rights attached in 1855.
    Unfortunately for all concerned, the Court of Claims differed with 
the Interior Department's 1958 view in Short v. United States, 202 Ct. 
Cl. 870 (1973), cert. denied, 416 U.S. 961 (1974) (``Short 1''). Short 
I ruled that the Secretary violated trust duties to non-Hoopa ``Indians 
of the Reservation,'' when he excluded them from tribal per capita 
payments. Nearly 4,000 individuals were plaintiffs in Short, and Short 
I found only 22 ``Indians of the Reservation'' and left a very 
difficult job (which is still underway) for the courts to perform 
determining which other ``Indians of the Reservation'' and their heirs 
were entitled to damages from Treasury for breach of trust. Short I 
precipitated a series of crises and related lawsuits that jeopardized 
public health and welfare and nearly destroyed tribal government before 
Congress stepped in with the Hoopa-Yurok Settlement Act.
    The Settlement Act originated in the House as H.R. 4469. The 
Interior and Insular Affairs Committee and the Judiciary Committee of 
the House conducted hearings on that bill, in addition to the two 
hearings conducted by this committee. As you may recall, at least three 
law firms represented factions of Yurok tribal members at those 
hearings, including Faulkner & Wunsch, Heller Ehrman White & McAuliffe, 
and Jacobsen, Jewitt & Theirolf. Many legal issues were argued but, 
with this committee's guidance, the warring factions came together on a 
settlement package to lay before all parties.
    At the request of the House, the American Law Division of the 
Congressional Research Service prepared an analysis of H.R. 4469 which 
pointed out that because of the unique statutory and litigation 
background, a remote possibility existed that litigation concerning 
H.R. 4469 could create a new Federal Indian law precedent, holding that 
if the Reservation was established for non-tribal Indians, Indians of 
the Reservation would have a vested interest in Reservation property. 
The courts did not ultimately reach that conclusion, but it is useful 
to recall that issue now in order to realize how the Secretary's Sec.  
14(c) report oversimplifies the Settlement Act as merely a division of 
assets between the Hoopa Valley and Yurok Tribes. Actually, the 
Settlement Act initially divided the Hoopa-Yurok Settlement Fund 
between the Hoopa Valley Tribe and the Yurok Tribe, subject to 
surrender of claims, and then added appropriated funds to finance lump-
sum payments to Indians who did not elect to join the Yurok Tribe or 
the Hoopa Valley Tribe. Because of the long history of Yurok Short 
plaintiff opposition to organization of the Yurok Tribe and the wide 
geographic dispersal of Yurok Indians it was simply unknown how many 
persons on the Hoopa-Yurok Settlement Roll would elect Yurok tribal 
membership.
    3. The Settlement Act Nullified the Short Rulings.
    This committee emphasized that the Settlement Act should not be 
considered an individualization of tribal communal assets and that the 
solutions in the Settlement Act sprang from a series of judicial 
decisions that are unique in recognizing individual interests that 
conflict with general Federal policies and laws favoring recognition 
and protection of tribal property rights and tribal governance of 
Indian reservations. The committee concluded: ``the intent of this 
legislation is to bring the Hoopa Valley Tribe and the Yurok Tribe 
within the mainstream of Federal Indian law.'' S. Rep. 564, 100th 
Cong., 2d Sess. (1988) at 2.
    The Settlement Act preserved the money judgments won by qualified 
plaintiffs in the Short case, and they ultimately recovered about 
$25,000 each from the United States Treasury in 1996. They also 
received the payments provided by Sec.  6 of the Act. But this 
committee noted that while it did not believe ``that this legislation, 
as a prospective settlement of this dispute, is in any way in conflict 
with the law of the case in the Short cases, to the extent there is 
such a conflict, it is intended that this legislation will govern.'' 
Id. at 19.
    The interplay of the Settlement Act and the Short case is important 
to allocation of the Settlement Fund now for this reason: is 
indisputable that over 98 percent of the funds remaining in the Hoopa-
Yurok Settlement Fund originated in trees cut from the Hoopa Square, 
now the Hoopa Valley Reservation. That proportion of the funds belongs 
to the Hoopa Valley Tribe.
    4. The Hoopa Valley Tribe Has a Right to its Timber Proceeds.
    As an historical matter, Indian tribes did not generally have a 
right to logging proceeds until Congress, by the Act of June 25, 1910, 
authorized the sale of timber on unallotted lands of any Indian 
reservation and provided that ``the proceeds from such sales shall be 
used for the benefit of the Indians of the reservation in such manner 
as he may direct.'' See 25 U.S.C. Sec.  407. In 1964, Congress changed 
the identity of the beneficiaries of proceeds in the statute from 
``Indians of the reservation'' to ``Indians who are members of the 
tribe or tribes concerned.'' As the Interior Department testified in 
support of that amendment, this was a technical correction because the 
term ``Indians of the reservation'' did not describe anybody and 
actually members of the relevant tribe shared in the proceeds of the 
sale of tribal property. However, in Short v. United States, 719 F.2d 
1133, 1136 (Fed. Cir. 1983), cert. denied, 467 U.S. 1256 (1984) 
(``Short III''), the court rejected that explanation and held that 
``Congress, when it used the term `tribe' in this instance, meant only 
the general Indian groups communally concerned with the proceeds--not 
an officially organized or recognized Indian tribe--and that the 
qualified plaintiffs fall into the group intended by Congress.'' Thus, 
another important portion of the Settlement Act was the correction to 
the Short--caused distortion of 25 U.S.C. Sec.  407 to provide that 
``the proceeds of the sale shall be used--(1) as determined by the 
governing bodies of the tribes concerned and approved by the 
Secretary----'' This amendment restored tribal control over enrollment 
and use of timber proceeds.
    The Short case, as explained in some detail in this committee's 
report, found that no vested Indian rights existed at the time the 
Hoopa Valley Reservation was extended to include the Connecting Strip 
and Klamath River Reservation in 1891, and that therefore all Indians 
of the reservation, as extended, had to be included in per capita 
distributions from reservation revenues. In the litigation that 
challenged the Settlement Act as a taking of plaintiffs' vested rights, 
the Yurok Tribe, its members, and the Karuk Tribe of California 
logically presumed both the propriety of President Benjamin Harrison's 
1891 Executive order and the correctness of the Court of Claim's 
decision in Short I. In other words, those plaintiffs assumed that 
President Harrison acted lawfully in expanding the Hoopa Valley 
Reservation to include the Addition, and that the effect of 1891 
Executive order was to give all Indians having an appropriate 
connection to the reservation as so expanded an equal claim to all of 
the expanded reservation's income. If either of those propositions was 
incorrect, then the Settlement Act could not be thought to deprive 
plaintiffs of anything to which they were ever entitled. However, those 
propositions depended in turn on the assumption that the 1876 Executive 
order did not confer property rights on the inhabitants of the Hoopa 
Square, as the reservation was then defted, since if such rights were 
conferred they would have been taken by the 1891 Executive Order, at 
least as construed in Short I.
    Here we are again hearing the Yurok Tribe contend that they have a 
right to receive timber proceeds from the Hoopa Valley Square. The 
courts have correctly rejected this, not once, but time after time in 
Short IV, Short VI, and Karuk Tribe of California. In Short IV, 12 Cl. 
Ct. 36, 44 (1987), the Court held that the escrow fund did not belong 
to Short plaintiffs but was held in the Treasury subject to the 
discretion of the Secretary of the Interior. That ruling was reaffirmed 
in Short VI, 28 Fed. Cl. 590, 591, 593 (1993), where the Court recalled 
that prior to 1987 the Short plaintiffs claimed a right to the entire 
escrow fund but that claim was rejected in Short IV and remained the 
law of the case. The Federal courts rejected plaintiffs continued 
effort to capitalize on Short. Karuk Tribe of California, et al. v. 
United States, et al., 209 F.3d 1366, 1372 (Fed. Cir. 2000), cert. 
denied, 523 U.S. 941 (2001).
    Without the theories of the Short case, the Yurok Tribe has no 
claim to portions of the Settlement Fund derived from Hoopa escrow 
funds and timber on the Square. As the Court ruled in Karuk Tribe of 
California, ``This litigation is the latest attempt by plaintiffs to 
receive a share of the revenues from timber grown on the Square. . . . 
[but] the Settlement Act nullified the Short rulings by establishing a 
new Hoopa Valley Reservation. . . . A necessary effect of the 
Settlement Act was thus to assure payment of the timber revenues from 
the Square exclusively to the `Hoopa Valley Tribe.''' 209 F.3d at 1372. 
It was the purpose of the Settlement Act to return the Yurok and Hoopa 
Valley Tribes to the mainstream of Federal Indian law. The twisted 
logic of the Short case can have no further effect on these tribes. 
Under mainstream law, the proceeds of Indian timber sales must go to 
the tribe whose trees were cut.
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