[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
THE CURRENT REORGANIZATION OF TRUST MANAGEMENT AT THE BUREAU OF INDIAN
AFFAIRS AND THE OFFICE OF THE SPECIAL TRUSTEE
=======================================================================
OVERSIGHT HEARING
before the
COMMITTEE ON RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
__________
Wednesday, May 12, 2004
__________
Serial No. 108-94
__________
Printed for the use of the Committee on Resources
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
or
Committee address: http://resourcescommittee.house.gov
______
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COMMITTEE ON RESOURCES
RICHARD W. POMBO, California, Chairman
NICK J. RAHALL II, West Virginia, Ranking Democrat Member
Don Young, Alaska Dale E. Kildee, Michigan
W.J. ``Billy'' Tauzin, Louisiana Eni F.H. Faleomavaega, American
Jim Saxton, New Jersey Samoa
Elton Gallegly, California Neil Abercrombie, Hawaii
John J. Duncan, Jr., Tennessee Solomon P. Ortiz, Texas
Wayne T. Gilchrest, Maryland Frank Pallone, Jr., New Jersey
Ken Calvert, California Calvin M. Dooley, California
Scott McInnis, Colorado Donna M. Christensen, Virgin
Barbara Cubin, Wyoming Islands
George Radanovich, California Ron Kind, Wisconsin
Walter B. Jones, Jr., North Jay Inslee, Washington
Carolina Grace F. Napolitano, California
Chris Cannon, Utah Tom Udall, New Mexico
John E. Peterson, Pennsylvania Mark Udall, Colorado
Jim Gibbons, Nevada, Anibal Acevedo-Vila, Puerto Rico
Vice Chairman Brad Carson, Oklahoma
Mark E. Souder, Indiana Raul M. Grijalva, Arizona
Greg Walden, Oregon Dennis A. Cardoza, California
Thomas G. Tancredo, Colorado Madeleine Z. Bordallo, Guam
J.D. Hayworth, Arizona George Miller, California
Tom Osborne, Nebraska Edward J. Markey, Massachusetts
Jeff Flake, Arizona Ruben Hinojosa, Texas
Dennis R. Rehberg, Montana Ciro D. Rodriguez, Texas
Rick Renzi, Arizona Joe Baca, California
Tom Cole, Oklahoma Betty McCollum, Minnesota
Stevan Pearce, New Mexico
Rob Bishop, Utah
Devin Nunes, California
Randy Neugebauer, Texas
Steven J. Ding, Chief of Staff
Lisa Pittman, Chief Counsel
James H. Zoia, Democrat Staff Director
Jeffrey P. Petrich, Democrat Chief Counsel
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C O N T E N T S
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Page
Hearing held on Wednesday, May 12, 2004.......................... 1
Statement of Members:
Kildee, Hon. Dale, a Representative in Congress from the
State of Michigan, Prepared statement of................... 47
Pallone, Hon. Frank, Jr., a Representative in Congress from
the State of New Jersey.................................... 2
Letter and response submitted for the record............. 29
Pombo, Hon. Richard W., a Representative in Congress from the
State of California........................................ 1
Prepared statement of.................................... 2
Rahall, Hon. Nick J., II, a Representative in Congress from
the State of West Virginia, Prepared statement of.......... 68
Statement of Witnesses:
Benjamin, Melanie, Chief Executive, Mille Lacs Band of
Ojibwe, `Minnesota......................................... 61
Prepared statement of.................................... 64
Frazier, Harold, Chairman, Great Plains Tribal Chairman's
Association................................................ 48
Prepared statement of.................................... 50
George, Keller, President, United South and Eastern Tribes,
Inc........................................................ 55
Prepared statement of.................................... 57
Response to questions submitted for the record........... 60
Gray, Jim, Principal Chief, Osage Tribe, Oklahoma............ 51
Prepared statement of.................................... 53
Martin, Aurene, Principal Deputy Assistant Secretary for
Indian Affairs, U.S. Department of the Interior............ 4
Joint prepared statement of.............................. 14
Response to questions submitted for the record by the
Bureau of Indian Affairs............................... 19
Swimmer, Ross, Special Trustee for American Indians.......... 22
Joint prepared statement of.............................. 14
Response to questions submitted for the record by the
Office of the Special Trustee.......................... 20
OVERSIGHT HEARING ON THE CURRENT REORGANIZATION OF TRUST MANAGEMENT AT
THE BUREAU OF INDIAN AFFAIRS AND THE OFFICE OF THE SPECIAL TRUSTEE.
----------
Wednesday, May 12, 2004
U.S. House of Representatives
Committee on Resources
Washington, D.C.
----------
The Committee met, pursuant to notice, at 10:04 a.m., in
Room 1324, Longworth House Office Building, Hon. Richard W.
Pombo [Chairman of the Committee] presiding.
Present: Representatives Pombo, Hayworth, Osborne, Renzi,
Pearce, Pallone, Christensen, Kind, Inslee, Tom Udall and Mark
Udall.
STATEMENT OF HON. RICHARD W. POMBO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
The Chairman. The Committee on Resources will come to
order. The Committee is meeting today to hear testimony on the
current reorganization or trust management at the Bureau of
Indian Affairs and the Office of the Special Trustee for
American Indians.
Under Rule 4(g) of the Committee Rules, any oral opening
statements at hearings are limited to the Chairman and the
Ranking Minority Member. This will allow us to hear from our
witnesses sooner and help Members keep their schedules.
Therefore, if other Members have statements, they can be
included in the hearing record under unanimous consent.
The purpose of today's hearing is to give members of this
Committee an opportunity to examine a major reorganization that
is underway at the Bureau of Indian Affairs and the Office of
Special Trustee for American Indians. This reorganization is
intended to implement a comprehensive approach for reforming
and improving trust management on behalf of individual Indians
and tribes.
The significance of the reorganization cannot be
understated. It affects the ability of the Federal Government
to manage its fiduciary trust responsibilities to Indians. One
of the most far-reaching lawsuits against the Federal
Government over the last decade is one with which we are all
familiar, the Cobell Indian Trust Fund case. No one will
disagree that reforming and improving trust management in the
Department is a necessary part of resolving the Indian trust
fund problems.
Reforming the Department's management of its trust duties
is not only necessary to prevent another Cobell lawsuit, but to
improve the lives of Indians. It is needed to promote more
self-governance by the tribes, self-governance which can lead
to economic development and economic freedom.
Is the current reorganization launched by Secretary Norton
the right approach? I think no one disputes the need for the
Department to develop a comprehensive approach to trust
management that is in line with the 21st Century standards and
expectations. But having met with a number of tribal leaders on
this matter, I think it is safe to say that in Indian country,
there are strong concerns with the Secretary's plan and many
Members here need to evaluate this plan in depth.
I hope the witnesses from the Administration will provide
Members with an overview of what started the reorganization,
its current status, how it has attempted to consult with the
tribes, and what expectations of success are. The Committee
will then turn to several leaders in Indian country to share
their perspectives with the reorganization and what must be
done to improve it.
I would like to now recognize Mr. Pallone for an opening
statement.
[The prepared statement of Mr. Pombo follows:]
Statement of The Honorable Richard Pombo, Chairman,
Committee on Resources
The purpose of today's hearing is to give Members of this Committee
an opportunity to examine a major reorganization that is underway at
the Bureau of Indian Affairs and the Office of the Special Trustee for
American Indians. This reorganization is intended to implement a
comprehensive approach for reforming and improving trust management on
behalf of individual Indians and tribes.
The significance of the reorganization cannot be understated. It
affects the ability of the federal government to manage its fiduciary
trust responsibilities to Indians. One of the most far-reaching
lawsuits against the federal government over the last decade is one
with which we are all familiar: the Cobell Indian Trust Fund case. No
one will disagree that reforming and improving trust management in the
Department is a necessary part of resolving the Indian trust fund
problems.
Reforming the Department's management of its trust duties is not
only necessary to prevent another Cobell lawsuit, but to improve the
lives of Indians. It is needed to promote more self-governance by
tribes, self-governance which can lead to economic development and
economic freedom.
Is the current reorganization launched by Secretary Norton the
right approach? I think no one disputes the need for the Department to
develop a comprehensive approach to trust management that is in line
with 21st-century standards and expectations. But having met with a
number of tribal leaders on this matter, I think it is safe to say that
in Indian Country there are strong concerns with the Secretary's Plan,
and many Members here need to evaluate this plan in depth.
I hope the witnesses from the Administration will provide Members
with an overview of what started the reorganization, its current
status, how its has attempted to consult with the tribes, and what its
expectations of success are. The Committee will then turn to several
leaders in Indian Country to share their perspectives with the
reorganization and what must be done to improve it.
______
STATEMENT OF HON. FRANK PALLONE, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Mr. Chairman. I didn't realize I
would be giving an opening statement, but I would be glad to
oblige in the sense that I think it needs to be said that I
personally, and I know many of the members of the Native
American Caucus and on this Committee are very, I would say,
insulted by what the BIA and the Department have done in terms
of the way they have handled the whole issue of trust reform,
and I don't use the word insulted loosely and I don't mean it
in a partisan way at all, because I don't think there is
anything partisan about this.
The problem that I see from the very beginning is that I
felt that the issue of trust reform should have been primarily
handled in total consultation with the tribes and that even
though the BIA and the Department claim that they had meetings
and hearings, and I heard Secretary Norton endlessly tell this
Committee about all the forums that she has had, there was
never really any serious consultation or any effort certainly
to come to a consensus with the tribes on how to deal with
trust reform.
Given that there was a suit out there, the Cobell suit, and
clearly the tribes and the national organizations that
represent the tribes were not comfortable or didn't feel that
they were having any say in terms of what the BIA is doing, I
could never figure out why the BIA continued to proceed and
every other year come up with a new way of reforming the system
at the same time that Congress, certainly this Committee, which
was never consulted, and the tribes and the courts were all
saying that they shouldn't proceed in this fashion.
It continues unabated. I mean, obviously, every year, you
come before, and I am not saying you personally to the panel,
but every year, the BIA and the Interior Department put in a
budget, massive amounts of money to continue with a
reorganization plan that takes money from other important
concerns, whether it be education, housing, health care, and
says, of course, now that they are negotiating and they are
trying to work with the Cobell plaintiffs and the tribes to
come up with a consensus. Meanwhile, every effort was made
behind the scenes, and we were told that it wasn't true but we
know that it was based on testimony before the Committee, that
the Department was going to the appropriators or individual
Members of Congress to try to get them to move legislation or
reprogram money that would thwart the Cobell plaintiffs and
what the tribes and this Committee wanted to do with trust
reform.
I have to admire your persistence in the sense that you
paid no attention to this Committee or really to the tribes or
to the courts, but I do think it is wrong and you are going to
have a hard time convincing me that you should be proceeding at
all with this. I frankly think there should be a total
moratorium on the BIA and the Department proceeding with any
trust reform until these negotiations with the Cobell
plaintiffs and the tribes are resolved, and I think it is very
wrong for you to continue with it, to take funding away from
other issues that are important to Indian country.
But most of all, Mr. Chairman, I go back to what I said
before, which I think it is highly insulting for this process
to continue without this Committee being informed about what
you are doing, how you are doing it, and who is paying for it.
So I do want to thank the Chairman for having this hearing
today because I think this is very important, that they be
brought here before this Committee and asked some serious
questions about what they are doing. And so again, I want to
thank the Chairman and I believe that we are acting in a
bipartisan basis. This isn't Democrats versus Republicans.
Thank you.
The Chairman. Thank you.
I would now like to introduce our first panel of witnesses,
Aurene Martin and Ross Swimmer. Ms. Martin is the Principal
Deputy Assistant Secretary for Indian Affairs and Mr. Swimmer
is the Special Trustee for American Indians. Mr. Swimmer is
accompanied by Mr. Henry Ware, the Fiduciary Trust Officer for
the Concho Agency in Oklahoma.
I would like to take this time to remind all today's
witnesses that under our Committee Rules, oral statements are
limited to 5 minutes. Your entire written testimony will appear
in the record.
If I could have our witnesses stand and raise their right
hand.
Do you solemnly swear or affirm under the penalty of
perjury that the statements made and responses given will be
the whole truth and nothing but the truth, so help you, God?
Ms. Martin. I do.
Mr. Swimmer. I do.
Mr. Ware. I do.
The Chairman. Let the record show they all answered in the
affirmative.
Thank you very much. Welcome back to the Committee. I think
we are all very interested in the subject of today's hearing.
It is something that we all have heard a lot about and to take
this opportunity to hear from these panels here today, I think
will be very informative for the Committee.
So Ms. Martin, we are going to begin with you, and if you
are ready, you can begin.
STATEMENT OF AURENE MARTIN, PRINCIPAL DEPUTY ASSISTANT
SECRETARY FOR INDIAN AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR;
AND ROSS SWIMMER, SPECIAL TRUSTEE FOR AMERICAN INDIANS;
ACCOMPANIED BY HENRY WARE, FIDUCIARY TRUST OFFICER, CONCHO
AGENCY, OKLAHOMA
STATEMENT OF AURENE MARTIN
Ms. Martin. Thank you, Mr. Chairman. Good morning, and
members of the Committee. I would like to thank you first for
the opportunity to appear today to discuss the Department of
Interior's realignment of trust functions.
As discussed by Congressman Pallone, this realignment has a
lengthy and detailed history. We have undertaken tremendous
efforts to try to work with tribes in coming to an agreement
with regard to the realignment, but ultimately we were not able
to and we did move forward with a realignment, trying to
incorporate as many of the concerns the tribes had as possible.
What I want to discuss today are the details of the
realignment and the highlights of the realignment at the Bureau
of Indian Affairs. We have provided Committee staff with
several materials and I would just like to go through them for
you because I will be referring to them throughout my comments.
First of all, you have a color handout which is the new
structure of the Bureau of Indian Affairs. It is the 8.5 by 14
inch document.
[The handout submitted by Ms. Martin follows:]
[GRAPHIC] [TIFF OMITTED] T3632.001
Ms. Martin. And then you also have a handout which has on
the very top page where the locations of the trust officers for
the Office of Special Trustee will be located, along with some
organizational charts at the region and agency levels.
[The information submitted by Ms. Martin follows:]
[GRAPHIC] [TIFF OMITTED] T3632.002
[GRAPHIC] [TIFF OMITTED] T3632.003
[GRAPHIC] [TIFF OMITTED] T3632.004
[GRAPHIC] [TIFF OMITTED] T3632.005
[GRAPHIC] [TIFF OMITTED] T3632.006
[GRAPHIC] [TIFF OMITTED] T3632.007
Since establishment of OST, many of the functions that
served OST offices and directed trust reform efforts evolved
within OTFM. These functions--training, policies and
procedures, information technology and records--were
reorganized into their oven offices. OTFM was also divided
between Field Operations staff and Trust Services staff to
provide for a separation of duties and more dedicated service
to fiduciary trust beneficiaries. The additional staff within
the reorganization were Regional Fiduciary Trust Administrators
and Fiduciary Trust Officers.
[GRAPHIC] [TIFF OMITTED] T3632.008
[GRAPHIC] [TIFF OMITTED] T3632.009
Ms. Martin. In designing the realignment, the Department
sought to achieve two goals, and these two goals were developed
both prior to the discussions with tribal leaders and after as
a result of discussions with tribal leaders. The first was the
improvement of trust asset management at the Department and the
second was, after discussing with tribal leaders through the
task force discussions, their concerns with overall BIA
management. So the second goal was to improve BIA management,
as well.
In order to improve overall trust management, we wanted to
make sure that trust employees were able to focus on their work
and trust services. In the past, throughout the BIA, individual
employees had a tendency to assume duties that were outside of
their scope of authority. That is, we would oftentimes have
people who were responsible for working on trust matters, like
forestry or other resource management issues, end up having to
assume other job responsibilities, collateral duties, when
there wasn't staff available to do that, things like
administrative duties, answering the phone or assuming IT
responsibilities. One of the things we wanted to do in doing
the realignment was ensure that trust employees do trust work.
We also wanted to make sure that there was focus on serving
the beneficiary, be it tribal or individual. In the past,
beneficiaries have had problems getting information about their
accounts, about their assets, exactly what those were, and they
have been having trouble getting that information on a timely
basis and we wanted to concentrate on improving those services.
We also wanted to improve the accountability of individual
employees and the larger organization itself through better
training and ongoing monitoring and review of performance. In
going through our workforce planning efforts and our review of
our human resources processes, we learned that we simply don't
have the resources to train employees, nor have we established
a consistent way of reviewing job performance.
We felt also that it was important to keep decisions at the
local level whenever possible and to look at ways--over the
past several years, we have had a tendency to shift
decisionmaking at the central office level and we wanted to
look at ways to push some of those decisionmaking processes
back out to the regions where they have the best expertise
possible to make those decisions.
The other goal of realignment was to improve the management
of Indian affairs itself by consolidating support functions,
making programs more consistent across the board, and providing
effective management controls.
Prior to the realignment, the Director of the Bureau of
Indian Affairs, who was formerly known as the Deputy
Commissioner, had 22 people who reported directly to him. As a
result, he spent a lot of time managing personnel when he
should have been dealing with policy issues.
The BIA and the Office of the Assistant Secretary also had
responsibilities that overlapped. That is, we would deal with
an issue at the BIA and then it would be brought up to central
office for the Assistant Secretary to deal with. We wanted to
take care of some of those problems.
We also had and continue to have two programmatic
structures within Indian Affairs, the Office of Indian
Education Programs, which is responsible for 184 schools in 23
States, and the Bureau of Indian Affairs, which was responsible
for program issues with regard to the whole other range of
issues we handle--social services, roads, trust services, law
enforcement.
The BIA provided services to both of those structures, that
is, the Office of Indian Education Programs and BIA, and this
included human resources, facilities management, budget
execution, those types of things, accounting services. There
were consistent complaints throughout our organization that the
other organizations weren't being served. The Office of the
Assistant Secretary would sometimes have problems and the
Office of Indian Education in getting accounting work taken
care of, something as simple as that. We wanted to improve
delivery of those services, as well.
So in looking at all of those things, we have made a number
of changes. With regard to some of the specifics of those
changes, I will just go through the chart that we have handed
out, the color chart. I will start at the very top with the
Office of the Assistant Secretary and the box that is labeled
Assistant Secretary of Indian Affairs.
There was historically a Deputy Assistant Secretary who was
senior at the Department or at the Bureau of Indian Affairs and
who handled duties of the Assistant Secretary when he was out.
We formalized that position in the Principal Deputy Assistant
Secretary for Indian Affairs. That is my position. That person
serves as operational officer for Indian affairs and assumes
the duties of the Assistant Secretary when he is not available.
At the very left-hand side of the chart, you will see some
orange boxes. We created a new position in the Office of the
Assistant Secretary who is responsible, the Deputy Assistant
Secretary for Policy and Economic Development, responsible for
economic development policies and self-determination policies.
That office has also assumed responsibility for the Office of
Indian Gaming Management, which was previously located in the
Bureau of Indian Affairs. The reason for that change was that
that office mainly dealt with the Office of the Assistant
Secretary in the past and didn't have Bureau of Indian Affairs
operations within the Bureau. So it was simpler just to have it
moved to where they did all of their work.
The yellow boxes as you move toward the right are the
responsibilities or oversight of the Principal Deputy Assistant
Secretary. That is the Office of External Affairs, which
combine the former Offices of Legislative Affairs and the
Office of Public Affairs. That is just combined into one office
now. The Principal Deputy Assistant Secretary also assumed
responsibility for the Office of Federal Acknowledgment, which
was previously known as the Bureau of Acknowledgment and
Research. That also was located previously in the Bureau of
Indian Affairs and was moved up because their interaction was
mainly with the Assistant Secretary's office, as well.
New lines of authority were created--if you look at the
green boxes, moving to the right--for management services.
These are the services that are provided both to the BIA, to
the Office of the Assistant Secretary, and to the Office of
Indian Education Programs. These are the accounting, the human
resources services I referred to earlier.
And then finally at the Assistant Secretary's level, there
was created a Deputy Assistant Secretary for Information
Resources Management. This was highlighted because of the
information technology problems that the Department, the Bureau
of Indian Affairs specifically, has suffered in the past. We
wanted to highlight those issues and make sure that there was a
line of authority specifically responsible for dealing with IT
issues.
And then moving down, you will see that there are blue
boxes. The blue boxes are all responsibilities within the
Bureau of Indian Affairs. There were some changes made with
regard to the Bureau of Indian Affairs. Their direct reports
were reduced for the Director of the Bureau of Indian Affairs.
Two new positions were created there, the Deputy Director of
Field Operations, responsible for regional offices, and the
Indian Land Consolidation Center, which is responsible for
operating the Indian Land Consolidation program. That is the
program responsible for purchasing fractionated interests.
The rest of the boxes that you see are actually just
extensions of the central office function and how they are
organized in the field. So the light blue is at the regional
level and the darker blue is at the agency level.
We have--there has consistently been a criticism that this
reorganization is very top heavy. I think the reason that there
is some confusion about that is the chart that you see really
focuses on the organization at the high level, but it is an
organization which is replicated at both the regional and
agency levels, and, in fact, at central office, there are only
four new positions that have been created. The majority of all
positions have actually been created out in the field at the
regional and agency level. There are 12 new positions at the
regions and I believe 47 positions out in the agency offices
that are to deal with trusts.
In speaking with some of the staff from the Committee,
there was a concern about the detail that has been provided to
the Committee in the past about the reorganization and that is
why we submitted the organizational charts for the field and
for the regional offices. I won't go into much detail. I just
wanted to refer to a couple of items.
We have placed Deputy Directors at the regional level and
Deputy Superintendents at the agency level whose responsibility
it is to oversee and personally handle trust issues at those
levels. Those people are the officials responsible for
coordinating with the Office of Special Trustee on those
issues, for elevating issues of importance, or actually just
personally resolving issues if they are not getting handled at
the level that they are located, either at the agency or at the
region.
We have currently, up to now in 2004, hired four of our
Deputy Superintendents at the agency level for trusts. We will
be hiring 33 more persons this year. We expect to hire, as I
said earlier, about 47 people at the agency level to handle
trust duties. We expect to hire 12 at the regional level. We
have six trust officers who are Deputy Regional Directors for
Trust. I am sorry, we are hiring six more. We have a couple of
openings at the central office. The Deputy Director for Field
Operations is doing double-duty as Acting Director of the
Bureau of Indian Affairs right now.
That is the current status of the reorganization at the
Department. We have largely completed the realignment
organizationally. There are some tasks that we need to clean up
within the Departmental manual with regard to law enforcement
services and how that is organized, and also just some coding
in our computer system to make sure that people continue to get
paid.
But we are largely completed with the reorganization and I
would be happy to answer any questions if the Committee has
any.
The Chairman. Thank you.
[The joint prepared statement of Ms. Martin and Mr. Swimmer
follows:]
Joint Statement of Ross O. Swimmer, Special Trustee for American
Indians, and Aurene Martin, Principal Deputy Assistant Secretary,
Indian Affairs, U.S. Department of the Interior
Mr. Chairman and Members of the Committee, we are pleased to be
here today to discuss the trust initiatives for the 21st Century of the
Office of the Assistant Secretary--Indian Affairs, the Bureau of Indian
Affairs (BIA), and the Office of the Special Trustee for American
Indians (OST). The roadmap that guides the Department's trust
initiatives for the 21st Century is the Comprehensive Trust Management
Plan. The Comprehensive Trust Management Plan is being used to guide
the design and implementation of the trust reform efforts. The first
component of this plan was the alignment of trust functions within the
Department.
In January 2002, the Secretary of the Interior, through the Office
of Indian Trust Transition (OITT), launched an effort to develop a
comprehensive approach for improving Indian trust management. Working
with the OST and BIA leadership, the OITT staff developed a set of
goals, objectives, and tasks for reforming Indian trust management.
This work was based upon statutes, regulations, guiding principles in
the Departmental Manual, and reports prepared by an outside contractor.
In May 2002, this effort was expanded and a DOI-wide strategic
planning team was created that included representatives from national
and regional offices of the OST, BIA, Minerals Management Service
(MMS), and Bureau of Land Management (BLM). From May 2002 through
December 2002, the DOI strategic planning team met regularly to review
and update the goals and objectives. It also presented them to the
Joint DOI/Tribal Leaders Task Force for review. After several meetings,
the task force's subcommittee on planning approved the goals and
objectives.
The goals and objectives of the Comprehensive Trust Management Plan
include:
An organizational structure in the Office of the
Assistant Secretary--Indian Affairs, the BIA, and the OST, to support a
new service delivery model;
The implementation of a new land title records system to
keep ownership records accurate and current;
The improvement of land and natural resource and trust
fund asset management including a nationwide plan for eliminating
fractionated interests of land that are burdening the trust and taking
resources away from profitable activities;
The promoting of Self-Governance and Self-Determination;
and
The review and improvement of our trust business
processes (the As-Is/To-Be process).
Through the examination of the ``big picture'' of the fiduciary
trust management, the Department created a coordinated and integrated
system in which all pieces of the fiduciary trust management function
as a coherent whole. We recognize that strategic plans are dynamic and,
therefore, we will regularly evaluate and update this plan to ensure
its responsiveness to the ongoing needs of the Department's trust
operations and to adapt to changing environments. We are confident that
the goals and objectives of the Comprehensive Trust Management Plan
will enable the Department to provide important services to Indian
country more efficiently and effectively than in the past. We are sure
that our trust initiatives under the plan will result in a positive
enhancement to the level of service our organizations currently
provide.
The organizational realignment of the Office of the Assistant
Secretary--Indian Affairs, BIA, and OST was one component of this plan.
On April 21, 2003, Secretary Norton made effective an historic trust
initiative by signing the Department of the Interior Manual
establishing clear lines of responsibility by which BIA will provide
trust services and OST will provide fiduciary trust oversight. In
addition, the Secretary added OST staff at BIA agencies to support the
work of BIA's Deputy Agency Superintendents for Trust. We are pleased
to announce that our efforts to align Interior's staff to undertake our
trust mission have largely been completed.
ORGANIZATIONAL REALIGNMENT
In August 2001, during our formulation of the FY 2003 budget,
various proposals and issues were identified concerning the trust asset
management roles of BIA, OST, and other Departmental entities carrying
out trust functions. By that time, the Department had heard from many
sources--e.g., the Special Trustee, the Court Monitor in Cobell v.
Norton, and through budget review--and all recommended a multi-bureau
consolidation of trust functions throughout the Department. In short,
the Department realized it had to provide an organizational structure
that focused on its responsibilities to both individual Indians and
tribal beneficiaries.
Tribal representatives agreed with the Department that the status
quo was not acceptable, and that the Department's long-standing
approach to trust management needed to change. Moreover, this change
had to be reflected in a system that is accountable at every level with
people trained in the principles of fiduciary trust management.
After intensive review of five organizational proposals from
tribes, the Secretary chose to realign the organization capturing as
much as possible from the extensive consultation process. The resulting
organizational alignment complied with the concepts developed during
the consultation process that were determined to be critical to
improving the delivery of fiduciary trust services, including:
Keeping specific management decisions about trust assets
at the agency level. This allows greater decisionmaking at the agency
level where expertise and knowledge of a Tribe's or an individual's
need is greatest;
Creating a Trust Center and staffing it with trust
officers. The realignment created an opportunity for increasing support
at the local agencies by adding trust officers and expertise from the
Office of the Special Trustee and Deputy Superintendents from BIA to
the agencies dedicated to fiduciary trust management;
Promoting the idea of Self-Governance and Self-
Determination. We created a new Deputy Assistant Secretary for Policy
and Economic Development reporting to the Assistant Secretary, Indian
Affairs. We moved the Office of Self-Governance under this Deputy
Assistant Secretary and expanded the office's role to include policy
development and coordination for all self-determination programs; and
Creating a new Office of Trust Accountability. Within
OST, the position of Deputy Special Trustee for Trust Accountability
has been created to be responsible for trust training, trust
regulations, policies and procedures, and a Trust Program Management
Center. In addition, a new division of Review and Audit was created.
This division reports directly to the Special Trustee and performs
trust-related reviews of fiduciary trust administration to ensure the
Secretary's trust principles are followed.
In addition to ten months of meetings of the Joint Tribal Leader/
Department of the Interior Task Force on Trust Reform, there were over
45 meetings held with Tribal leaders in which senior level officials
from the Department were in attendance.
Initiatives of the Office of the Assistant Secretary--Indian Affairs
and the Bureau of Indian Affairs
The Principal Deputy Assistant Secretary for Indian Affairs, who,
subordinate to the Assistant Secretary, has line authority over the
Deputy Assistant Secretary for Management, the Director of the Office
of Indian Education Programs, the Director of the Bureau of Indian
Affairs, a new Deputy Assistant Secretary for Economic Development
Policy and a new Deputy Assistant Secretary for Information Resources
Management. This structure elevates economic development and the
federal acknowledgment process to the Assistant Secretary level. It
separates the IT functions of BIA allowing for greater oversight and
overarching management in these areas. In addition, consistent with the
President's management agenda, administrative functions previously
performed in a decentralized fashion at the central, regional and
agency levels, have been consolidated under the management structure.
Within the DOI structure, BIA retains all natural resource trust
asset management. The management of the trust functions at the BIA
regional and agency levels has been separated by creating the positions
of Deputy Regional Director for trust services and Deputy Regional
Director for tribal services. The Deputies report to their Regional
Director who, in turn, reports to the Director, Bureau of Indian
Affairs (formerly the Deputy Commissioner). A similar structure has
been created at the agency level. Seven of our Regions have Deputy
Regional Directors for trust services on board, and we are in the
process of adding the additional five positions. Six of the twelve
Deputy Regional Directors for tribal services have been named, and we
are in the process of adding the six additional positions.
At the Agency level, most Agencies will have a Deputy Agency
Superintendent for trust, who will manage the trust functions. We have
hired four Deputy Agency Superintendents, at Concho, Anadarko, Pima,
and Pine Ridge Agencies, and have advertised for several more. The BIA
is working in concert with the OST on this effort, so that we hire
Deputy Agency Superintendents and Trust Officers at the same locations
and at the same time. We expect to hire approximately 33 Deputy Agency
Superintendents.
Initiatives of the Office of the Special Trustee for American Indians
OST continues to be responsible for the management of financial
assets and certain reform projects, and maintains its statutory
oversight responsibilities. The Secretary has delegated operating
authority, including line authority over regional fiduciary trust
administrators and fiduciary trust officers to OST. These new positions
are intended to be filled by skilled trust administrators and staff
trained for these responsibilities. A staff of six trust administrators
will oversee a staff of trust officers and trust account managers in or
near BIA field office locations.
We are pleased to report that the first recruitment efforts for
these positions have been successful. Recruitment activity for the
trust officer positions also began during FY 2003, and two were hired
last year. We expect to have 50 Trust Officers and support positions on
board by the end of FY 2004. A recent advertisement provided a
certification list of several candidates. However, due to the
difficulty of finding highly qualified candidates, OST plans to engage
the services of an executive search firm to support the effort of
recruiting fiduciary trust officers. A listing indicating where Trust
Officers will be hired and where they will be located is attached as an
exhibit to this statement. They will be co-located with BIA agency
personnel, or in close proximity to these offices. Trust officers also
will be located in urban centers that have large beneficiary
populations. Trust officers will work together with BIA agency
superintendents and staff and will eventually become the first line of
contact for tribal and individual Indian beneficiaries for issues
related to ownership of trust assets, account balances, and trust
transactions. Trust Officers and associated support staff will serve as
a resource to agency personnel in the performance of fiduciary trust-
related duties. They also will serve as a primary point of contact for
local collections, and ensure that proper documentation for trust
transactions and internal controls are followed. The majority of a
Trust Officer's time is expected to be spent with beneficiaries,
locating beneficiaries (particularly those whose whereabouts are
unknown) supporting the BIA probate effort, distributing funds put into
special deposit accounts, and offering counseling and advice on
managing assets and answering inquires.
We now place additional emphasis on the implementation of a
comprehensive and coordinated audit and risk management function to
improve overall fiduciary trust accountability. The Office of Trust
Review and Audit is working with agencies to develop a rating system
that indicates the level of compliance with fiduciary trust activities
and measures our success in meeting the fiduciary responsibilities of
the Secretary. It also will indicate those areas where additional
oversight is required.
Coordination and Outreach
Once a decision was made on reorganization, Indian Affairs and OST
created Trust Initiative Implementation Teams consisting of staff from
both organizations. The teams met regularly in 2003 to discuss the
status of their respective reorganizations. These meetings allowed for
the coordination and communication of internal organizational
activities, which greatly aided our reorganization efforts. The strong
working relationship that was created through these teams is ongoing.
Indian Affairs and OST continue to closely coordinate ongoing trust
initiatives. Tribal representatives selected by the 2002 Joint Tribal/
DOI Task Force on Trust Reform met with these teams and provided
information to Tribes.
In June 2003, Indian Affairs and OST jointly held presentations to
explain the trust initiatives to BIA and OST staff and to Tribal
leaders. A total of 45 presentations were held throughout the United
States, particularly in the cities where Regional offices are located
and in other cities where there are large concentrations of staff. In
fact, three to four regional or agency offices received the
presentation each week
Three different types of outreach presentations were conducted.
Some presentations were held just with Superintendents. Those meetings
were designed to present the Superintendents with written information
regarding the reorganization, so that they could in turn educate their
Agency staff. Presentations were held for BIA and OST employees to
answer their questions about the reorganization. In addition,
presentations were held for Tribal Leaders and individuals in each
Region. The regional offices distributed information and a schedule for
those briefings to employees as well as to tribes. Unfortunately, in
some Regions, Tribal Leaders chose not to participate and walked out of
the presentations we had scheduled.
Based on the questions we received during our presentations in June
2003, we drafted a Frequently Asked Questions document, which was made
available to all Indian Affairs and OST employees and to Tribal Leaders
in October 2003.
In addition to the presentations, Indian Affairs and OST held
change-management meetings to help their affected staff plan for and
deal with the changes in the organization. Both Indian Affairs and OST
have also sent periodic e-mails to all employees, informing them of the
status of the reorganization throughout the reorganization process.
Regional Consultations
Prior to implementing the organizational changes at the Regions and
Agencies, we wanted to have further discussions with Tribal Leaders
about the specific changes that would be occurring in their Regions.
We, therefore, held consultation meetings with the Tribal Leaders from
each Region in September and October of 2003 regarding the new
structure for their respective Region. We held the sessions for the
Eastern, Eastern Oklahoma, Southern Plains, and Midwest Regions on
September 24 and 25, 2003, in Tulsa, Oklahoma. We held the sessions for
the remaining eight Regions the week of October 27, 2003, in Las Vegas,
Nevada. We also took written comments from Tribes in each Region for
several weeks following the Las Vegas meetings. Following these
meetings, we made some changes to the proposed Regional and Agency
charts to reflect comments we received at, or after, the meetings.
Pilot Agencies
To begin implementing the trust initiatives, BIA and OST identified
two ``Pilot Agencies'' during 2003. The two pilot agencies were at
Concho and Anadarko. In FY 2003, both the Concho and Anadarko agencies
realigned staff and added fiduciary Trust Officers as well as Deputy
Agency Superintendents. These locations were chosen based on a number
of criteria including: the number of beneficiaries served; the high
volume of recurring trust income generated; and local workload
indicators. The success is already apparent. A close working
relationship is present between the OST and BIA staffs. Outreach
meetings are now being held by the Trust Officers to become better-
connected with beneficiaries and more decisions are being made at the
agency level. A major challenge is getting reconnected to the Internet
and having the information technology systems fully operational so that
information can be readily available to all personnel at the agency to
solve problems, answer beneficiary questions, and assure correct
ownership of assets.
Remaining Tasks
Although most of the organizational realignment has been completed,
some tasks still remain. The Indian Affairs Federal Financial System
(FFS) is being modified to reflect the changes made to the organization
and staffing. FFS will be fully converted on October 1, 2004, but this
project will continue until December 2004 to ensure that FFS is
functioning properly.
As we mentioned above, several positions are still in the process
of being filled. BIA and OST need to complete the hiring of Indian
Affairs Deputy Regional Directors, the sixth OST Regional Fiduciary
Trust Administrator, Indian Affairs Deputy Agency Superintendents for
Trust Services, and OST Fiduciary Trust Officers. We anticipate hiring
approximately 45 Trust Officers and 33 Deputy Agency Superintendents
during the remainder of FY 2004 (including those currently advertised,
as discussed above), with the rest to be hired in FY 2005.
Finally, although the Secretary signed the revisions to the
Department Manual on April 21, 2003, making the changes effective, we
are currently preparing a further revision to some non-fiduciary trust
operations. The revision will formalize the structure of Indian
Affair's law enforcement program, create a separate Central Office
Division for Tribal Courts as requested by Tribes, create a separate
Central Office Probate and Estate Services Division to focus on
reducing our probate backlog, clarify the reporting structure for our
environmental programs, and make other technical changes.
Organizational realignment, coupled with our other trust
initiatives is enabling the Department to provide reliable beneficiary
focused services. We are continuing to implement the Comprehensive
Trust Management Plan. We are nearing the completion of the review and
improvement of our business processes (``As-Is'' ``To-Be'') with
implementation to follow; implementing a new land title records system;
and improving our land, natural resource, and trust fund asset
management through the reduction of fractional interests.
OTHER TRUST INITIATIVES
``As-Is''--``To-Be''
As part of the comprehensive trust reform, the Department undertook
a project to determine exactly how fiduciary trust business processes
were being performed. Through this effort, various business processes
were identified that were required to be performed to meet our
fiduciary duties, including determining ownership of trust assets,
accounting for the income from trust assets, putting trust assets to
work such as leasing of land and harvesting timber, supporting the
self-determination and self-governance goals of the Department, and
providing direct beneficiary services. We met with representatives from
every BIA region and many Tribes to determine how they conducted these
processes at their locations. BIA agency employees, regional employees,
and representatives from the BLM and the MMS were interviewed to
collect this information. After a year's work, over a thousand pages
were written that documented the ``As-Is'' business fiduciary trust
processes.
The next step was to develop a ``To-Be'' Model. The concept was to
have many of the same people who provided information for the ``As-Is''
meet and offer suggestions on how the current process could be
improved. Again, meetings were held during all of 2003 to glean
information from BIA regions, agencies, and tribes to develop a model
of best practices that could replace the ``As-Is'' way of doing
business.
The draft ``To-Be'' Model was completed on September 30, 2003.
Since that time, it has been presented throughout Indian country for
review and comment. Although comments were due by January 31, 2004, at
the request of tribal leaders, the comment period was extended to March
31, 2004. This model, now considered the Trust Initiatives for the 21st
Century, will be a major improvement in the way fiduciary trust
business is performed in the Department. Not only is it expected to
improve the communications with beneficiaries, but also to streamline
the management of fiduciary trust assets and result in a more efficient
and effective trust organization. The final model is expected to be
completed by May 31, 2004.
Title System
The Department is currently working on establishing new technology
to maintain a system of land title records using new software that
should enable beneficiaries to obtain information regarding their
Indian land trust assets in a timely manner. We also are working on
ways to invest tribal and individual Indian trust funds to make the
trust account productive for the beneficial owner consistent with
market conditions existing at the time the investment is made. Through
improvements to our record systems, we hope to be able to communicate
better with beneficiaries regarding the management and administration
of their trust assets.
Reducing Land Fractionation
Addressing the rapidly increasing fractionation on Indian land is
critical to improving management of trust assets. Purchase of
fractional interests increases the likelihood of more productive
economic use of the land, reduces record keeping and large numbers of
small-dollar financial transactions, and decreases the number of
interests subject to probate. The BIA has conducted a pilot
fractionated interest purchase program in the Midwest Region since
1999. As of March 31, 2004, the Department has purchased 78,321
individual interests equal to approximately 49,155 acres. The
Department is in the process of expanding this successful program
nationwide. We also plan, where appropriate and to the extent feasible,
to enter into agreements with Tribes or tribal organizations and
private entities to carry out aspects of the land acquisition program.
The 2005 budget request includes an unprecedented amount of money for
this program.
CONCLUSION
These trust initiatives are a major undertaking, and we expect the
benefits to be widespread. The Department realized it needed an
organization that focused on its fiduciary duties as trustee to both
individual Indians and tribal beneficiaries. The completion of the
organizational alignment effort provides a major step forward in our
ability to provide an efficient and successful trust management system
within the Department of the Interior for our individual and tribal
beneficiaries. The completion of the ``To-Be'' business model will be a
major improvement in the way fiduciary trust business is done in the
Department. Improving our title systems and reducing fractionated
interests will lead to better record keeping, an improved probate
system, and a more productive and economic use of Indian land. We are
confident that all these efforts, which are part of the Department's
Comprehensive Trust Management Plan, will improve the performance and
accountability of our management of the trust.
This concludes our opening statement. We look forward to answering
any questions the Committee may have.
______
[Responses to questions submitted for the record by the
Bureau of Indian Affairs follow:]
Response to questions submitted for the record by the
Bureau of Indian Affairs, U.S. Department of the Interior
Follow-up Questions from Chairman Richard W. Pombo
QUESTION 1: BIA's budget is shrinking, while the budget for the
Office of the Special Trustee is growing. Are funds used for providing
services to tribes being diverted from the BIA into funding the Office
of the Special Trustee?
ANSWER: Fulfilling our Trust responsibilities remains one of the
Department's greatest challenges. The Department has responsibility for
the management of approximately 100,000 leases for individual Indians
and Tribes on a land trust that encompasses approximately 56 million
acres. Revenue from leasing, use permits, sale revenues, and interest,
totaling approximately $195 million was collected in FY 2003 for
approximately 240,000 individual Indian money accounts, and about $375
million was collected in FY 2003 for approximately 1,400 tribal
accounts. In addition, the trust manages approximately $2.8 billion in
tribal funds and $400 million in individual Indian funds. Interior
maintains thousands of accounts that contain less than one dollar, and
has a responsibility to provide an accounting to all account holders.
Unlike most private trusts, the Federal Government bears the entire
cost of administering the Indian trust accounts. As a result, the usual
incentives found in the commercial sector for reducing the number of
accounts do not apply to the Indian trust.
The increases requested in the Office of the Special Trustee's
(OST) budget relate to historical accounting and the purchase of
fractionated interests of land. Addressing the rapidly increasing
fractionation on Indian land is critical to improving management of
trust assets. Purchase of fractional interests increases the likelihood
of more productive economic use of the land, reduces recordkeeping and
large numbers of small dollar financial transactions, and decreases the
number of interests subject to probate.
While increases for these programs appear in the OST budget, funds
appropriated for these programs are ultimately transferred to the
Office of Historical Trust Accounting and the BIA.
The BIA is working closely with the OST on the Secretary's ongoing
efforts to reform current trust systems, policies, and procedures. The
BIA has proposed increases totaling $42 million for trust improvements
in the areas of information technology, trust services, probate,
forestry, and workforce improvements in the Department's FY 2005
Unified Trust Budget, which incorporates all of the fiduciary Indian
trust programs of the BIA and OST.
In addition to the trust improvement increases, the BIA has also
requested increases in FY 2005 for newly recognized tribal governments,
new and expanded tribal contracting, tribal economic development, the
Indian school program, tribal law enforcement, new tribal community
colleges, and the tribal school construction demonstration program.
From FY 2001 to FY 2004, the BIA's funding grew from $2.1 billion to
$2.3 billion.
Follow-up Questions from Ranking Member Nick J. Rahall, II
QUESTION 1: Did BIA request that these OST trust officers be placed
in BIA Agency and Regional offices? Is there a justifiable need to have
both BIA and OST employees in Agency offices? How will this speed up
responses to Individual Indians and tribal requests?
ANSWER: The Comprehensive Trust Management Plan is being used to
guide the design and implementation of the trust reform efforts. The
first component of this plan was the alignment of trust functions
within the Department.
In January 2002, the Department launched an effort to develop a
comprehensive approach for improving Indian trust management. In short,
the Department realized it had to provide an organizational structure
that focused on its responsibilities to both individual Indians and
tribal beneficiaries.
Tribal Representatives agreed with the Department that the status
quo was not acceptable, and that the Department's longstanding approach
to trust management needed to change. Moreover, this change must be
reflected in a system that is accountable at every level with people
trained in the principles of trust management.
After intensive review of five organizational proposals from
tribes, Secretary Norton chose to realign the organization capturing as
much as possible from the extensive consultation process. Over 45
meetings were held with Tribal leaders in which senior level officials
from the Department were in attendance during the Joint Tribal Leader/
Department of the Interior Task Force on Trust Reform. The Department's
trust reorganization plan is closely aligned with, and is a product of,
the insight gained from the intensive consultation process.
Trust officers are an integral part of improving beneficiary
services at the local level. The Special Trustee for American Indians
and the Assistant Secretary for Indian Affairs jointly agreed on the
manner in which the trust officers would interact with the Bureau of
Indian Affairs (BIA) staff and the locations where these staff persons
would be placed. The BIA staff will continue to manage the land and
natural resources. The Office of the Special Trustee (OST) staff will
provide an additional resource for working directly with the
beneficiaries and will assist BIA in making decisions that affect the
fiduciary well-being of the beneficiaries. Co-locating OST and BIA
staff at the Agency offices will allow for enhanced communication
between the staff and more thorough and efficient responses to
beneficiary questions and requests for information.
QUESTION 2: Since most, if not all, agencies have severe backlog
problems. For example, in some areas there is a great need for on-site
field appraisals not more managers in the office. Please explain why
your plan is not top heavy with managers and how you will have enough
staffing and budgeting authority to meet the needs of the tribes?
ANSWER: As discussed above, the Department, after extensive
consultation with Indian country, felt that decision making at the
agency level where expertise and knowledge of a Tribe's or an
individual's needs is greatest was an integral part of effective trust
management. The realignment created an opportunity for increasing
support at the local agencies by adding Trust Officers and expertise
from OST and Deputy Agency Superintendents from BIA to the agencies.
Although they may perform some managerial functions, we expect them to
be providing and improving our ``on the ground'' service to the
beneficiaries.
QUESTION 3: Is BIA planning to use roll over funds for its portion
of reorganization and, if so, how will you fund the plan in years to
come?
ANSWER: No, the BIA is not planning on using roll over funds for
its portion of reorganization. Under the Secretary's approved
reorganization plan, the BIA is planning for a total of 104 Deputy
Superintendents over a span of several years. To date, thirty-five
Deputy Superintendent positions have either been filled or are at some
stage of being filled. In addition, OST provided start-up funds to
assist with the initial reorganization implementation. The FY 2005
President's Budget includes a request for $5.5 million in appropriated
funds in General Trust Services for filling 25 additional positions.
______
[Responses to questions submitted for the record by the
Office of the Special Trustee follow:]
Response to questions submitted for the record by the Office of the
Special Trustee (OST), U.S. Department of the Interior
Follow up Questions from Chairman Richard W. Pombo, House Committee on
Resources
QUESTION 1: One criticism of the reorganization plan is that the
Office of the Special Trustee will handle certain trust functions even
though the Office is only specifically authorized by Congress to
conduct oversight of the BIA's administration of such functions. What
is the statutory authority for assigning OST its trust duties under the
Department's plan?
Answer: In addition to the statutory responsibilities for the
Office of the Special Trustee as outlined in the American Indian Trust
Fund Management Reform Act of 1994, the Secretary of the Interior has
delegated certain functions and operating authority to the Special
Trustee. This was in conjunction with the FY 1996 appropriations
language.
QUESTION 2: Between the OST and BIA plans, 78 new officers will be
added in the field. 45 OST trust officers and 33 BIA Deputy
Superintendents for Trust. Who is in charge? When a decision on trust
resources is made in the field--for example, approval of a farming
lease--does the chain of command go up to the Assistant Secretary for
Indian Affairs, or to the Special Trustee? Or both? Will the two really
be able to work effectively together?
Answer: The OST Trust Officers and BIA Deputy Superintendents for
Trust are expected to work constructively and closely together to
address the vast majority of tribal and individual Indian matters at
the local level and in a more timely manner. BIA will continue to
manage all natural resource trust asset functions, including the
approval of leasing activities. OST Trust Officers manage the financial
aspects of the fiduciary trust. OST Trust Officers will be a resource
to support the BIA Deputy Superintendents for Trust, and will serve as
the first line of contact for tribal and individual Indian
beneficiaries for issues such as those relating to ownership of trust
assets, account balances, trust transactions and local collections. The
chain of command for the OST Trust Officer ultimately ends with the
Special Trustee, and the chain of command for the BIA Deputy
Superintendent for Trust ultimately rests with the Assistant
Secretary--Indian Affairs. In those locations where a Trust Officer and
Deputy Superintendent for Trust already have been hired, a close
working relationship has developed between the OST and BIA staff.
QUESTION 3: Under the comprehensive trust management plan, who sets
the standards that self-governance tribes must meet in managing trust
assets under a self-governance compact? How are the standards set?
Answer: Consistent with P.L. 98-638, compacts with self-governance
tribes for the management of federal programs are negotiated between
the tribe and the BIA or OST, as appropriate. Self-governance tribes
must meet the same standards for the management of trust assets as
those in effect for the Department. The Department Manual outlines
those principles. Standard auditing practices also review accounting
activities for proper documentation that supports management of
fiduciary assets and timely receipt and disbursement of trust funds.
Follow up Questions from Ranking Member Nick J. Rahall, II
QUESTION 1: Each agency and region has its own needs and
requirements. How will placing over 75 BIA and OST trust officers in
the field meet the individual needs of Indian tribes? Have you
incorporated enough flexibility in your plan to meet tribal needs?
Answer: It is precisely because each agency and region has
individual needs and requirements that placing additional OST and BIA
personnel in the field is a critical component of this reorganization
effort to assure accountability. OST and BIA agency and regional
personnel are expected to work closely with tribes and individual
account holders so that they can meet their individual needs
appropriately and efficiently. One goal of these local BIA and OST
personnel is the timely formulation of decisions at the local level,
where these personnel will be familiar with any special needs and
circumstances that are apparent.
QUESTION 2: As I understand the reorganization plan, there will be
some 78 new officers placed in the field--45 OST Trust Officers and 33
BIA Deputy Superintendents for Trust. How will the chain of command
work for example when an agriculture lease needs to be approved? How
will reorganization speed up the process from how it is handled now?
Answer: The OST Trust Officers and BIA Deputy Superintendents for
Trust are expected to work constructively and closely together to
address the vast majority of tribal and individual Indian matters at
the local level and in a more timely manner. Clarifying
responsibilities and providing beneficiaries definite points of contact
we hope, in turn, will speed up the process. BIA will continue to
manage all natural resource trust asset functions, including the
approval of leasing activities. OST Trust Officers manage the financial
aspects of the fiduciary trust. OST Trust Officers will be a resource
to support the BIA Deputy Superintendents for Trust, and will serve as
the first line of contact for tribal and individual Indian
beneficiaries for issues such as those relating to ownership of trust
assets, account balances, trust transactions and local collections. The
chain of command for the OST Trust Officer ultimately ends with the
Special Trustee, and the chain of command for the BIA Deputy
Superintendent for Trust ultimately rests with the Assistant
Secretary--Indian Affairs. In those locations where a Trust Officer and
Deputy Superintendent for Trust already have been hired, a close
working relationship has developed between the OST and BIA staff.
QUESTION 3: As Special Trustee, how will you meet your important
oversight functions authorized under the Trust Fund Reform Act of 1994
now that you have all these additional programmatic duties added on?
Answer: I intend to continue to meet the oversight obligations
authorized by statute, and will utilize the new funding and staff
provided to perform the additional duties delegated by the Secretary of
the Interior to OST. As in any organization, both private sector and
government, at some point within the organization we have review,
oversight and operations reporting to the principal. The Special
Trustee has these individuals reporting through separate chains of
command to him.
QUESTION 4: OST's budget is growing rapidly while BIA's budget is
shrinking. Over 30% of the OST budget is earmarked for historical
accounting connected to the Cobell lawsuit. Where is this funding
coming from and how can you assure this Committee and Indian country
that funds for trust fund reform is not coming out of other Indian
programs?
Answer: Each budget year the Administration looks at the merits of
program needs and makes decisions based on this review. The increases
requested in the OST budget for the historical accounting and purchase
of fractionated interests of land are consistent with the January 2003
Historical Accounting Plan for Individual Money Accounts filed with the
district court and trust fund reform. Funding for all programs must
come from Interior appropriations budget, and the appropriations
subcommittee addresses the Interior budget within the allocation they
receive. In fact, from 2001 to 2004, the BIA's funding grew from $2.1
billion to $2.3 billion.
QUESTION 5: BIA has clearly defined rules and regulations setting
up its responsibilities and accountability to Indian people. Most of
these have been worked out over decades with much input from Indian
tribes. OST has none of this. How can those you serve have a comfort
level that OST will be accountable to them?
Answer: OST Trust Officers and Regional Trust Administrators will
be working with Indian tribes and individual account holders on a daily
basis and are expected to develop a constructive relationship with
these beneficiaries. OST and BIA are expected to provide full
transparency in their decisions to beneficiaries, which will increase
their comfort level and ensure accountability. OST is bound by the same
trust principles as BIA. OST has established regulations, policies,
procedures, interagency handbook and Desk Operating Policies in
coordination with BIA. In addition, the OST works closely with its
Advisory Board pursuant to section 306 of the American Indian Trust
Fund Management Reform Act of 1994.
QUESTION 6: Can Indian tribes compact under the Indian Self-
Determination Act programs under OST in the same manner they can BIA
programs?
Answer: Yes. Tribes can enter into compacts or contracts with OST
for trust fund management and/or appraisal functions.
QUESTION 7: Who will have final authority at the agency level an
OST staffer or a BIA staffer?
Answer: It is anticipated that OST and BIA at the regional level
will work closely together and agree upon the vast majority of trust
asset management decisions. If an agreement cannot be reached at the
agency level, decisions will be appealed up the OST and BIA respective
chains of command, ultimately to the Special Trustee and Assistant
Secretary--Indian Affairs, for resolution. This is due to different
roles, one being financial and beneficiary and the other being land and
natural resource based. The majority of the time we are finding that
appropriate delegations are now at the agency level with adequate
authority to resolve issues without the elevation to a higher level
decision maker.
______
The Chairman. Mr. Swimmer?
STATEMENT OF ROSS SWIMMER
Mr. Swimmer. Thank you, Mr. Chairman and members of the
Committee. I appreciate the opportunity to be here today and
present some information to the Committee. I will try to be
brief, but thorough. I am anxious to hear questions that the
Committee might have.
I also want to recognize to my left the Trust Officer, Mr.
Henry Ware, from the Concho Agency in Oklahoma. He is one of
the first hired trust officers to be placed at the local level
and I think he can also enlighten the Committee a lot on the
function of the Trust Officer and what they see from day to day
as far as their duties and how that is impacting positively the
operations at the BIA agency level.
In just a quick review of the trust reform efforts, in
1994, the Trust Reform Act was enacted by Congress which
provided for the Office of the Special Trustee. As part of the
duties of the Special Trustee at that time, it was to produce a
comprehensive trust reform plan that would take all of the
various operations of the fiduciary trust, basically where the
Federal Government holds the land interest and financial
interest of the individual Indians and tribes in trust and
manages on their behalf. We were charged with doing a plan for
that. We were also charged with preparing an accounting as
provided for in the Act. These two items have been the subject
of, primarily the subject of the work of the Special Trustee
since that time.
The comprehensive Trust Management Plan was produced. This
was done after the consultation on the organizational concepts
took place in 2002. We worked through 2002, having meetings
with what was called the DOI Tribal Task Force made up of
approximately 24 tribal representatives and alternatives and
senior management of the Department. That consultation process
was completed toward the end of 2002, and 2003 in March, we
developed the comprehensive plan. Some of the planning elements
had been discussed during that consultation process, including
the concept of trust officers and the reorganization concepts
that were developed and were included, to the extent possible,
in the comprehensive plan.
As Ms. Martin has testified, the organizational alignment
was essentially completed last year with the Special Trustee's
Office organizing itself with a Principal Deputy and three
major categories of effort, one being trust accountability,
that would be a group leading the reform, meeting the
requirements of the comprehensive plan to help restructure the
way that the trust services were offered and all of the
business processes, if you will, the management systems, the
leasing systems, the financial systems, probate, and all those
items tied into the trust, how they would be reengineered to be
more efficient and more effective.
The second was in the financial area, and this is an area
that the Special Trustee was directed to assume. In 1996 under
Secretarial order, they were directed to assume the
responsibility of the Office of Trust Funds Management, which
had then been in the Bureau of Indian Affairs. The Office of
Trust Funds Management at that time and currently is
responsible for the investment and accounting of the trust
funds that are received from the resources of the land and
financial resources belonging to individual Indian people and
the tribes. We continue in that road today, and as part of the
reorganization effort continue to work in the financial area
primarily, that is the effort that the Special Trustee has that
they did not have as part of the 1994 Act.
And the third area is in the area of field services, which
is the implementation and the deployment of the trust
administrators and trust officers.
This is, we think, essential, and it was discussed. It has
been discussed at length with the tribes over the past 2 years.
The essence of the trust officer is to provide what you would
normally see in a private sector trust relationship. You would
have a trust officer. If you went to a trust company and you
asked them to manage your assets, for instance, financial,
land, oil and gas, timber, whatever, you would be talking to a
trust officer who would help lay out a plan for you and
determine how best those resources might be managed for your
best interest.
This is a concept of a trust officer at the agency level,
is to work directly with the beneficiaries to let them know
what is happening to their trust resources. This is not a
position that has ever been there before with the Bureau of
Indian Affairs, with the Department or any agency in the
Department. In the past, if someone wanted to know about their
oil and gas, they would either go to the Minerals Management
Service, to the BLM, or the BIA, or wherever they might go to
try to find out what it is. If they wanted to deal with their
financial resources, they could go to the Bureau of Indian
Affairs. Sometimes they would go to the agency level. Sometimes
they may have to go to the Washington level. If they wanted to
try to find out what the status of probates are, what the
status of their investments are, they would again go to
multiple resources.
What we believe is that the concept of a trust officer
being there on the ground at the agency allows that information
to be provided to those beneficiaries. It also provides a
higher level decisionmaker at the agency level so that instead
of having either the superintendent or others in the Bureau
have to move decisions to a regional office or even to the
central office, decisions are able to be made right there on
the ground at the agency level. There is no need to go to
Albuquerque, as we have heard, or to go to Washington or even
go to the regional office because the decisions can be made
right there by the trust officer.
The role of the Special Trustee has been discussed many
times in many meetings by tribes and there has been a concern
that the role of the Special Trustee has been expanded greatly
and that all the money, or a lot of the money, anyway, is being
moved from the BIA budget to the OST budget. That is simply a
mistake. It is not true. It is not happening.
Our budget, as you will see from some of the documents we
have submitted, is approximately $100 million. Our budget does
add to that some monies that we do receive through
appropriations that are transferred to the Bureau of Indian
Affairs. For instance, this year, the BIA will spend
approximately $30 million on the Indian Land Consolidation
program, purchasing fractionated interests. This money is
coming out of our budget, but we move it directly to the BIA's
budget. Likewise, $10 to $15 million in information technology
resources is again moved from our budget to the BIA budget.
The largest amount of money, I might add, that is being
spent in this area of trust today that is different, new money,
is in the accounting that has been directed by the court,
ordered by the court, and it is an effort that the Department
is making to do the historical accounting. It is estimated that
our plan for this historical accounting will cost in the
neighborhood of $300-plus million. We have, in fact, asked in
the 2005 budget for $109 million. Of that, approximately a
third of that money to move the accounting forward. We had
asked for a substantial increase last year and the
Appropriations Committee had reduced that in the 2004 budget.
But that money also shows up in our budget. That is in the
Special Trustee's budget. I don't consider that our money. That
is a Department initiative actually directed by the U.S.
District Court. We have little choice but to comply, subject to
whatever the Congress may choose to do with that. Or, if our
mediation efforts are successful or if there is something else
that happens, obviously, that money would not be spent in that
manner.
The Special Trustee's Office primarily is engaged, in
addition to the financial effort, into the oversight. What we
are doing is trying to look over the trust reform effort. We
were charged with putting together not only the comprehensive
plan, but the execution of the plan. We have done a major study
of all of the trust business processes that I mentioned
earlier. We called it the ``as is'' study. We are moving now
into a ``to be'' phase.
We are working jointly with the Bureau of Indian Affairs,
and I think this is the most significant thing that has
happened in trust reform in the last several years, is that I
consider the Special Trustee's Office and the BIA to be linked
at the hip. We are working together. Whatever money is spent in
the Special Trustee's budget is spent in the BIA's budget.
Whatever the BIA is doing in trust reform is what we are doing
in trust reform. There is not an ``us'' and ``they.''
We are moving down this path together and the comprehensive
plan allows that to happen. In fact, it directs it to happen,
so that when we add trust officers and they add the Deputy
Superintendents, they are able to work jointly on all of the
issues that are out there, and we will hear from tribes and we
have heard from tribes that our members of our tribes have
problems getting information. They have problems getting their
money distributed to them. They have problems getting their
land leased. It is all these things, and that is what the
purpose of these Deputy Superintendents and trust officers are
there to address.
There are intractable problems and this Committee needs to
understand that because it makes our life difficult as it makes
your life difficult. The intractable problems stem primarily
from fractionation. We have approximately $4 million interest
dealing with approximately ten-plus-million acres of land that
are owned by over 400,000 individual Indian people. We have
land the size of 80 acres that may--it is not unusual for that
land to be owned by 100 to 1,000 individual people. Even though
that land interest may be a one-one-thousandth of an interest,
for instance, in 80 acres, that interest has to be probated.
Our probate cost for doing a normal, average probate is
about $3,000. We are distributing land interest through that
probate that costs us $3,000 when that interest is worth maybe
$5 at most and sometimes five cents.
These are things that we have to deal with on a daily
basis, and not often do the tribes even understand that we are
going through those kinds of issues and having to make critical
decisions about where we spend our money. Because of that,
probate in the past didn't take a high priority. We got backed
up on probates. There are over 20,000 probates that are in
backlog status now and we are having to make a major effort to
do that, because even if it is a one-one-thousandth interest
that is going to go to seven heirs, we have still got to
determine who those seven heirs are and distribute the money.
The title system, we are dealing and the BIA is dealing
with antiquated IT systems. These systems go back 30 years. We
don't have a title system that can tell us at one glance who
owns what property where. We can tell you who owns what
property where, but it is on an individual basis, one on one,
and we may have to go to four different title systems to do
that. That is being brought up and that is a significant cost.
The recruitment--
The Chairman. Mr. Swimmer, I am going to tell you to wrap
it up.
Mr. Swimmer. Yes, sir. The recruitment and placement of
trust officers has been difficult because we have been looking
for trust officers that are highly qualified in the area of
trust, either through legal or financial experience. Just
bringing these people on board is a major effort that we are
going through today.
We appreciate the Committee's interest in this and we want
to work with the Committee to do what we can to satisfy your
concerns about where we are going with the trust reform effort.
Thank you very much.
The Chairman. Thank you.
Ms. Martin, one of the major complaints that I have heard,
one of the things that has been brought up repeatedly to the
Committee is the level of consultation between the tribes and
the individual tribal members and the Department on this
reorganization. Can you give me an idea of what kind of
consultation process you went through and how did that
influence the final recommendation that we are talking about?
Ms. Martin. Well, I think that the Department has undergone
a tremendous amount of effort in attempting to work with tribes
to come to some kind of a consensus vehicle on the realignment,
reorganization.
Several years ago, in late 2001, the Department announced
its plans to reorganization the Bureau of Indian Affairs with a
proposal called BITAM. Prior to announcing that proposal, they
had not spoken with tribal leaders and they took the proposal
out for consultation with tribal leaders and they unanimously,
universally opposed it.
After hearing about this opposition, the Secretary formed a
task force that was charged with looking at realignment
proposals and making recommendations to the Department with
regard to those proposals. They held, I think the list that I
looked at was about 40 meetings with the full task force in
every region, every BIA region. They held regional meetings to
inform tribal leaders about the progress of the task force. But
ultimately, the task force could not come to consensus on a
vehicle for reorganization and--
The Chairman. Let me stop you right there. Who was on the
task force?
Ms. Martin. There were 24 tribal leaders who were on the
task force and there were 12 alternates. There were two--
basically three people from each region. Two members of the
task force, I think are testifying today, Ms. Melanie Benjamin
and Mr. Keller George, to name a few--
The Chairman. And they participated in these meetings?
Ms. Martin. Yes, they did.
The Chairman. And at the 40-plus meetings, all of the
members of this task force participated in that, or as many as
they could attend?
Ms. Martin. It really depended. I think that there were
seven meetings, I want to say, of the full task force, and not
all of the members always attended all the meetings, but for
the most part, they did. They were also attended by some of the
alternates. But then we also had regional briefings and the
members from those regions largely attended only the meetings
in their region.
Unfortunately, we could not come to consensus on a vehicle.
Some other issues were brought into the discussion and
discussions broke down. At that point, the Department felt that
it needed to move forward with realignment and put together a
proposal based on the discussions with the task force and with
tribal leaders over time and that resulted in the Departmental
manual changes that the Secretary adopted in April of last
year.
After that, we felt very strongly that we needed to let
tribal leaders know about what the reorganization plans were
and we embarked on a process of information sessions. We had
about 45 information sessions, 15 specifically for tribal
leaders, the remainder for BIA staff.
And then finally, before implementing the reorganization at
the regions, late last year, in September and October of last
year, I felt it was very important to go out to let tribal
leaders know what the plans were for their specific region,
present the charts to them, and give them an opportunity to
make changes or make comments on the reorganization as it
pertained to their region and their agencies, and those were
held in Oklahoma, Tulsa, and in Las Vegas in October of last
year. There were 12 meetings then.
Then we implemented the reorganization at the field level--
The Chairman. And with that input that you got in those
meetings, did the plan change?
Ms. Martin. The overall direction of the reorganization,
the realignment, did not change, that is, the--well, with
regard to BITAM, we changed and that proposal actually
separated trust outside of BIA. After the discussion with the
task force, we kept trust in BIA, but separated it out so that
it had its own line of authority.
With regard to the fields, we did make a number of changes
based on tribal comments, but we did not have a lot of comments
from tribes on changing the structure at the field or regional
level.
The Chairman. All right. In looking at your chart, we have
two major issues. One is the trust responsibility and the other
is the bureaucracy and how difficult it is to get something
approved and to go through that process. Isn't there a way to
eliminate a bunch of these steps in this thing? I mean, is it
absolutely necessary to have this many steps to go through if
somebody wants to get something approved?
It seems to me, and maybe you are addressing this, and if
you are you can tell me, but there ought to be a way to get a
decision made faster on stuff. I think this Committee deals so
much with delays and tribes or individual Indians going through
years of waiting for an approval on something. Isn't there a
way to speed up that process?
Ms. Martin. Well, the reorganization doesn't specifically
address that issue--
The Chairman. But it should, shouldn't it?
Ms. Martin. Well, the structural. Some of the other things
we are doing with trust reform and reorganization deal with
that, but there are really two things at issue here. One is
that, over time, we have brought decisionmaking more and more
to the central level and we are looking at ways to push
decisionmaking back out to the regional level, things like fee-
to-trust applications, tribal constitutions, liquor ordinances.
Those all come to myself or Mr. Anderson for signature now.
They should stay out at the region. We are looking at pushing
those kinds of decisions back out so that they don't take so
many years.
The other problem, though, is simply a resources issue. We
don't have the personnel to process some of the paperwork that
we have to complete to get something done, even if it is pushed
out at the regional level. For example, one of the problems we
have in the Midwest region is fee-to-trust applications and the
fact that they take years and years to be processed. Well, part
of the problem is--
The Chairman. I am going to have to stop you. I have gone
way over my time. But one of the things I hear all the time is
that we don't have enough people to do this. If you didn't take
years to make a decision, those people could be making a lot of
decisions. But you have got one guy who spends 5 years to make
a decision, so he is busy for 5 years making that decision. Why
doesn't he just make the decision and go on to the next one?
You guys have enough people. Just make the decisions.
It is real frustrating for me. You know, I had one group in
here that has been waiting for 30 years for a decision on
something and they have been dealing with two people over 30
years. Well, if they had made the decision 30 years ago, they
could have made another 100 decisions in the meantime.
You guys need to work on the process that is in place. If
you are going to go through all this reorganization, work on
the process that is in place so that you make the decisions and
get it over with. Don't spend years talking about it. It either
works or it doesn't work. It either fits or it doesn't fit.
Tell them yes or no and move on to the next decision. If you
are going to go through a reorganization, let us get something
out of it.
I mean, I know we have got some very complicated and big
issues here that you guys are trying to handle and trying to
deal with and I respect that and I understand that. But if we
are going to go through all of this, let us change the system
so the decisions get made.
I am going to recognize Mr. Pallone.
Mr. Pallone. Thank you, Mr. Chairman, and let me associate
myself with your remarks 100 percent.
It disturbed me that Mr. Swimmer claims that the money, or
the extra money that is going to OST is not being moved from
other tribal needs. Now, I understand that there is not a
transfer slip that says, take money from IHS, transfer $2
million to OST. But the bottom line is that that is what is
happening effectively.
I sent a letter, Mr. Swimmer, to you last week and I would
ask if I could--it is about the money and how the money is
divided, and I would ask unanimous consent to have it included
in the record. I would hope that you could respond to it in a
timely fashion.
[Mr. Pallone's letter to Mr. Swimmer and his response
follow:]
[GRAPHIC] [TIFF OMITTED] T3632.010
[GRAPHIC] [TIFF OMITTED] T3632.011
------
United States Department of the Interior
Office of the Special Trustee for American Indians
Washington, D.C. 20240
June 8, 2004
Honorable Frank Pallone
House of Representatives
Washington, D.C. 20515
Dear Mr. Pallone:
Thank you for the opportunity to respond to your May 6, 2004,
letter concerning the budget of the Office of the special Trustee
(OST). I am happy to provide you with some details on the OST
reorganization and the activities funded by the OST budget. First,
however, I would like to address the following assertions included in
your letter:
The OST budget was substantially increased to better
implement its plan to reorganize Bureau of Indian Affairs (BIA) trust
responsibilities.
Funds are being transferred from existing BIA programs to
pay for OST increases.
The Department of the Interior should request new funding
to support trust reform.
OST has no plan to work with Tribes or individuals whose
accounts are at stake.
OST Budget
The President's FY 2005 budget for OST does not call for any
increase in OST's operational funding. In fact, under the FY 2005
request, OST's operational funds would decrease by 3.24 percent in
comparison with the FY 2004 enacted level. This decrease is larger than
the 2.24 percent decrease proposed for the BIA. I have attached a
comparison of OST's FY 2004 enacted level and the FY 2005 proposed
level.
The areas of OST's budget where there are funding increases are the
areas where funds pass through OST and are then controlled by other
organizations within Interior. Included within this category are the
funds for the Office of Historical Accounting. The FY 2005 budget does
include a 146.14 percent increase for that office, with funding in the
amount of $109.4 million, to cover the cost of historical accounting
ordered by the Cobell court.
Another increase in ``pass-through'' funding is the increase to $70
million for the Indian Land Consolidation Program managed by the BIA.
One of the greatest problems facing the administration of Indian lands
is the fractionation or continuing subdivision of individual Indian
interests in the land that the Federal government holds in trust for
them.
With each successive generation the individual interests in the
land become further divided and subdivided among heirs, each of whom
get smaller and smaller interest in the land. As the number of
fractionated interests increase, the cost and difficulty to manage
those interests increases each year. As this number of ownership
interests grows, the cost of federal resources necessary to undertake
accounting and management responsibilities grows accordingly. As these
interests pass to successive generations, the estate of the decedent
interest holder is processed through the DOI probate process, a quasi-
judicial procedure which transfers title and funds from the estate to
the heirs. In addition to determining the holdings of the decedent, the
Department must track down all heirs of the decedent, and either
establish new IIM accounts for them or add interests to their current
accounts.
In FY 2004, the Bureau of Indian Affairs (BIA) and the Office of
the Special Trustee for the American Indian (OST) are estimated to
spend about $220 million on activities related to fractionation. These
costs are expected to grow 6-fold in 20 years, to almost $1.2 billion
annually. Based on the lessons that Interior has learned through a
pilot acquisition program, Interior intends to initiate an expanded
national program with the requested increase in funds.
Trust reform is one of the Department's highest priorities. We are
making real and substantial progress on both reforming our trust
management practices and on moving forward with an appropriate
accounting. With regard to the issue of ``new money'' for trust reform,
the allocation of funds within the Interior and government-wide budget
is ultimately a question for Congress, not the Office of the Special
Trustee.
Trust Reform
Interior does have a plan for trust reform. In January 2002, we
began a meticulous process to develop an accurate model of our current
trust business processes. Through this process, we gained a
comprehensive understanding of our old trust business operations, the
areas where we needed improvements, the variances of practice that had
grown over the years among different geographic regions, and the causes
for those variances. Using this knowledge and an examination of
standard industry practices in trust management, we are carrying out
our Comprehensive Trust Management Plan, which embodies a coordinated
and integrated system in which all pieces of trust management function
as a coherent whole. We are confident that the goals and objectives of
the plan will enable us to provide efficient and effective trust
services to Indian country.
On March 31, 2004, the extended comment period closed on the draft
``To-Be'' Model, the model system under which the Department will
operate. As a result of tribal requests, an additional sixty days, was
provided for receipt of comments. The final model will represent nearly
two years' worth of work. When implemented it is expected to result in
notable improvements in the delivery of fiduciary trust services.
With the steady support of the Congress, the Department has made
great improvements since 1994 in the overall services provided to
Indian beneficiaries. Prior to 1994, no statements of account were sent
on a regular basis to account holders. Today, quarterly statements of
account are sent to all account holders with known addresses. Prior to
1994, the accounting system used by the Bureau of Indian Affairs was
not auditable, nor could it be reconciled and balanced on a regular
basis. Today, the trust accounting system in place, Trust 3000, is used
by many of the largest trust companies in the United States. It
provides the opportunity to reconcile and balance the system to the
penny on a daily basis with Treasury, which we do. Prior to 1994, there
was no fiduciary trust training provided by or available at the
Department. Today, every person involved with fiduciary trust, over
3,000 employees, has had a trust foundations course. Executive-level
personnel have taken a course given by the Cannon Financial Institute
on the principles of fiduciary trust and the Indian trust. Cannon is
the leading trust organization for private sector banks and trust
companies. These are just a few of the many changes we have made. We
have also recruited new employees with extensive private trust
experience, instituted an annual audit, and, as mentioned above,
undertaken a total reengineering of our trust business processes.
Trust Realignment
There has been much discussion about the Secretary's realignment of
personnel within the Indian programs of the Department. A major element
of this has been the concept of placing trust officers at the agency
level. This is not a new idea. The first Assistant Secretary for Indian
Affairs, Forrest Gerard, convened a BIA Reorganization Task Force in
1977. That task force included representatives of the National Congress
for American Indians and the National Tribal Chairmen's Association. In
fact, Mr. Earl Old Person, as a representative of the National Tribal
Chairmen's Association, signed the transmittal letter to the Secretary
conveying the Task Force's report. Recommendation 23 of the report was
as follows:
``The Bureau and Department trust responsibility functions
should be strengthened and extended in Washington and the
field.''
It then went on to specify:
``...Rights Protection units should be established in the field
with trust advocates at each agency.''
The concept of providing trust officers at the local level should
be embraced by the Congress. These trust officers will be the first
point of contact for individuals and tribes with concerns related to
asset ownership, account balances, and trust transactions. This will
relieve the BIA program staff from those duties and will allow them to
focus on their primary functions, including providing the expertise
necessary for the maintenance of trust assets.
I hope this response serves to assist you in better understanding
Interior's mission with respect to trust reform. I would be happy to
meet with you personally to discuss these matters further.
Sincerely,
Ross O. Swimmer
Special Trustee for American Indians
Enclosure
______
[NOTE: The attachments to Mr. Swimmer's letter have been
retained in the Committee's official files.]
The Chairman. But in the letter, it says that according to
the Administration's budget request, outlays for OST in Fiscal
Year 2005 would be a 54.4 percent increase over Fiscal Year
2004. At the same time, under the President's budget, BIA
receives a net decrease of $52 million. Specifically, contract
support costs are decreased by $2 million, BIA education
decreased by $4.8 million, tribal colleges and universities
receive a $5 million cut. The list goes on and on.
So I understand what you are saying, that you are not
transferring money from these other needs to the OST, but
effectively speaking, that is what is happening because of the
fact that there is less money for these other things and there
is more money going to OST.
I don't want to ask a question about that. I would just
like if you could answer this letter maybe in the next few
weeks, if possible. I would appreciate that.
What I did want to ask, though, and this is just the one
question, Mr. Chairman, I have thanked the former Special
Master in the Cobell case, Alan Baleran, who, as I think many
of you are aware, brought out the gross mismanagement by the
Department of the Interior in the leasing of Indian lands to
oil and gas companies. He did an investigative report that said
that private oil and gas companies paid Native Americans just a
fraction of the amounts they paid private land owners for the
right to run pipelines across their property.
Mr. Swimmer, you previously stated that these inequities
exist because Indian trust lands will likely be less valuable
to utility companies because of the bureaucracy involved in
leasing land with the Federal Government. But it just seems to
me that what you are saying here is that the government takes
Indian land in trust and with it comes a ton of red tape that
devalues the land, and it just seems like it is another example
of where the Federal Government fails to live up to its trust
responsibility.
So I wanted to ask, considering this case with the
pipelines coupled with the overall mismanagement of the trust
accounts, what is the benefit of having the Federal Government
manage Indian lands? It would seem to me that beneficiaries
would be better served by managing the properties themselves,
having the tribes manage the properties themselves, maybe with
some Federal Government oversight. I mean, we know the tribes
have taken over other services, such as health services, TANF.
We have had hearings on it.
Wouldn't we have more success if we just allowed the tribes
to administer their own trust fund accounts, maybe with some
Federal oversight, and manage their own lands? What do we need
OST for at all? Why don't we just forget about it, let the
tribes manage their own lands. You can have a little oversight.
I mean, I listen to this bureaucracy and I am just amazed
because it just seems to go on and on and on without any
positive outcome that anybody in Indian sees is beneficial to
them.
Would you advocate simply letting them manage their own
trust funds? What would be your answer to that?
Mr. Swimmer. I certainly would. In fact, the 1994 Trust
Reform Act specifically permits Indian tribes to remove their
funds from the trust fund that is managed by the Secretary and
to manage it themselves. I have advocated that for many years
because I think that they could probably get a better return on
it. We are limited in what we can invest their funds in to
government securities or the equivalent. With a modest amount
of risk, they could probably make 50 to 100 basis points more
on their money.
I don't know why the tribes haven't taken advantage of
that. There is about $2 billion that the tribes could take and
manage on their own.
In regard to the management of their own resources, the
statutes provide that the individual beneficiaries actually do
have control. They can tell us what they want to do.
Mr. Pallone. But what if we did it en masse? In other
words, rather than have them individually apply, we just
abolish the OST and we just said you are going to have to do it
on your own?
Mr. Swimmer. It is not the OST that does that--
Mr. Pallone. No, I understand.
Mr. Swimmer.--Natural Resources in BIA--
Mr. Pallone. Right. What about if we just did it carte
blanche? Do you support that?
Mr. Swimmer. Personally, I would have no problem with that.
I think that the Indian community would have a lot of problem
with that and you would receive a lot of push-back from tribes
because they look at the Bureau of Indian Affairs as the
protector more than an obstacle in their resources. As many of
us have seen in litigation over this issue, oftentimes, the
Department is sued because we allowed individuals or tribes to
make their own decisions and that comes back to haunt us. I
don't think the tribes would support that, but if they would,
we would certainly support it. I would support it.
Mr. Pallone. Thank you.
The Chairman. Mr. Hayworth?
Mr. Hayworth. Thank you, Mr. Chairman. Let me thank Ms.
Martin, Mr. Swimmer, and Mr. Ware for coming down this morning.
Maybe we are arriving at a point of consensus here, because
many of you have heard me talk about this before and Mr. Renzi,
now given the realignment of districts, has spent a lot of time
with the Sovereign Navajo Nation, as did I before him in what
was the old Sixth Congressional District. As I hear the
discussion, I go back to what a tribal elder told me at a town
hall meeting when he said, ``Congressman, as far as we are
concerned, BIA stands for 'Bossing Indians Around.'''
I know that is not the intent. There are a lot of well-
meaning people, and Ms. Martin, I appreciate the energy it took
to deal with something that seems to be a problem that doesn't
have solutions, but hearing the comments of the Chairman and my
friend from New Jersey, again, it invokes reminiscence of a
remark in an earlier Congress from the gentleman who is now the
Governor of New Mexico, who used to share the Navajo Nation
with me back in the previous incarnation, and that is former
Congressman Richardson.
We said, well, here we have yet another reorganization, and
I realize you are dealing with the pressures of court cases,
and let me thank Secretary Norton and others at the Department
who have been serious, in stark contrast to some other folks
who said, well, let us just let it ride when we had contempt
citations proffered by a Federal judge.
But Ms. Martin, I guess you touched on this before and
maybe you can amplify it for me. How does the creation of trust
officers in BIA and separate trust officers in OST really
differ from the BITAM, or some said the ``bite 'em'' proposal,
which the tribes rejected, which Secretary Norton later
renounced? Maybe you can articulate that, but it leads to the
second question. Wouldn't it be easier to streamline the
services provided and put the other monies into direct services
rather than into a lot of Federal salaries, which are typified
here by the reorganization plan?
Ms. Martin. Well, first, with regard to how this is
different from the BITAM proposal, the BITAM proposal proposed
to create a entirely different bureau within the Department of
Interior which would deal with Indian trust services, and it is
significantly different in that the trust function remains in
the Bureau of Indian Affairs.
I know one of the biggest fears that tribes had with regard
to BITAM was they thought it was just another way to do
termination. That is, once you take the trust services out,
eventually, the other services would stop being funded and they
would never be provided to Indians anymore. That is the first
difference.
But what adding the trust people in the regions and in the
field does is it puts more bodies out there to do trust
services, to provide those direct services to the
beneficiaries, and that is our main goal. We want to make sure
that things happen out in the field. So I think that is really
what our main purpose is here. We like to promote self-
governance. We want tribes to take those things on, but we also
want to be able to do what we need to do effectively.
Mr. Hayworth. So from the view of BIA, this reorganization
gets the people out, whether in Washington, or in our case,
gee, we have got to wait on Albuquerque--I think Mr. Swimmer
brought that up again in his testimony--because it seems like a
lot of times, we are waiting on regional offices.
Again, though, we need a bottom line. How many new
employees are being created and what is a rough estimate of the
total cost of these new employees?
Ms. Martin. Well, for the Bureau of Indian Affairs, there
are four at central office here in Washington. There are 12 at
the regional offices, 12 regional offices, and then there are
47 in the field at agencies. The rough estimate is between $12
and $15 million annually, and that is the cost of salaries for
those staff. That is at the BIA.
Mr. Hayworth. OK, so $12 to $15 million. Forty-seven folks,
I guess in the field is what you are telling me, right? OK.
I have got a lot more questions, Mr. Chairman, but I don't
know where the clock is. I am probably in my final 30 seconds.
I thank the Chair for this indulgence.
We are looking at yet another reorganization, and I
appreciate and we have traveled through that before. But we
talked about the Self-Governance Act. Allow the tribes that
have proven their ability to successfully manage their own
resources and stand in the shoes of the DOI to do so. Most
often, these tribes had to contribute their own monies to
augment those provided by DOI.
An example in my own district, Salt River Pima-Maricopa
Indian community. They contract out their trust management
system from DOI, and frankly, I have to tell you, I appreciate
the attempts, but the Salt River Pima-Maricopa folks are doing
a better job. Their system has become a model for not only
other tribes, but I believe for the Department as it studies
wholesale trust reform.
One example I will leave you with. The tribe can cut checks
to allottees in seven to 10 days. The same checks can take
months and sometimes a year for the Department to process. One
question I will leave with you, and thanks, Mr. Chairman. Why
are these tribes being included in any reorganization of the
Federal systems when they have proven they are doing as good a
job, I think even a better job, than the Department? Why do we
see these tribes folded in with everybody else in this
reorganization?
Ms. Martin. Well, I believe that Salt River is specifically
excluded from the reorganization, but self-governance tribes,
the reorganization doesn't really affect them because they take
their money out of the BIA and they provide those services in
the way that they see fit. So the reorganization does not apply
to self-governance tribes because they take that money out of
the BIA.
Mr. Hayworth. Thanks for that clarification. I guess, Mr.
Chairman, in closing, we have got an example where if you want
to get it done, do it yourself, and I think that may be a point
we agree on here across the aisle.
The Chairman. Mr. Tom Udall?
Mr. Tom Udall. Thank you, Mr. Chairman, and I thank the
panel for being here today. Let me also associate myself with
your frustration, Mr. Chairman, in terms of the decisionmaking
over there at the Department and the comments you made earlier.
I also want to thank the Chairman for holding this hearing,
because I think that the way the Department has handled this is
really an affront to the authorizing committee. As Mr. Swimmer
knows, when everything broke down with the task force meetings,
you all waited for the Congress to adjourn and then you came
over here to the appropriators and went in and reprogrammed
this when we were out of town, completely ignoring the
authorizing committee. And the first time the authorizing
committee has even heard about any of this has just been in the
last couple of days. I mean, this stuff has been going on for 2
years. So I applaud the Chairman for weighing into this and
asserting some authority in terms of the authorizing committee
here.
Now, the issue that I would like to ask you about, first
make a little statement about, has to do with consultation. I
think, Mr. Swimmer, you know that there is nothing more basic
to be done than consult with the tribes when you are talking
about a major, major reorganization of the Department,
especially when you are dealing with the BIA, which has been
the main agency in the government that deals with the tribes
and has dealt with the tribes over the years.
This, to me, this consultation that Ms. Martin described
here looks to me like a charade and I want to ask you about
that, because here you convene a task force, you have 40
meetings. Ms. Martin, your comment was the meetings broke down.
I mean, the other side of the coin from--I had constituents
that were in those meetings and served in them. They said the
Department walked out--walked out. They had the 40 meetings and
just rejected everything that was being recommended.
These task forces had very, very specific things that they
were asking for which have now been completely ignored in the
reorganization. And to just give you a couple of examples, they
asked that you not take the programs out of the BIA. They asked
that you not cut other programs in the Department. There is now
a big education cut of tens of millions of dollars and you are
moving money over into this reorganization. They asked for some
kind of outside oversight of the Department's activities. None
of the things that this task force was trying to get done have
been followed.
None of the recommendations have been followed, and that is
why I say, and it is probably a strong word to say ``charade,''
but I don't see how you--I think it needs a strong word,
because I don't see how you can call this a consultation. You
have 40 meetings. You have tribes from all over the country
participating. They make all of these recommendations, and then
you walk out of the meetings and you go on and do what you are
going to do and then you don't even tell this Committee and you
go over to the Appropriators Committee and get it reprogrammed
and you put out a press release that says, Congress approves
historic reorganization plan for the Bureau of Indian Affairs.
To me, that is an outright affront to this Committee.
So can you tell me, Mr. Swimmer, if you did all of this
consultation, you know, this great consultation where you
reached out and you tried to hear from the tribes and what the
tribes wanted, why is there just so much opposition out there
to this reorganization proposal? Could you tell me that?
Mr. Swimmer. I probably can't tell you why there is so much
opposition. I am not sure myself. We--
Mr. Tom Udall. I think it is because you didn't do a
consultation. The consultation was a charade. Why would you
engage in a consultation that was a charade?
Mr. Swimmer. Well, it was certainly not intended,
Congressman, to do so. As Aurene, Ms. Martin, explained, we did
start off and we admitted that shortly before I came to the
Department, the Secretary and some folks had decided that a way
of dealing with the issues at hand was to create a separate
department within DOI, within Interior, to house all of the
trust functions so it could be addressed. The court, frankly,
had indicated it needed to be.
The first Special Trustee's plan, I might add, was to
remove the fiduciary trust, what we have talked about here,
totally from the Department and to create something analogous
to the Resolution Trust Corporation, where all of the trust
items would be taken out of DOI, the Bureau of Indian Affairs,
and the Special Trustee's Office and put into a separate
agency.
The Secretary believed at that time that the concept of
BITAM, which was a separate agency within Interior, would make
more sense. The tribes didn't receive consultation on that. As
a result of that, I think that was really why the tribes
opposed that concept, because they never really heard that
concept. And so the Secretary immediately thereafter, in
January of 2002, convened this task force and asked for
representatives from each of the 12 regions to be available to
meet and discuss.
A lot of things did come out of that task force. That was
consultation. The first thing that happened was that the tribes
came together and presented their plans to the Secretary. There
were approximately 40 different plans, maybe a few more than
that, that were submitted on how best to reorganization the
Department of Interior and the Bureau of Indian Affairs. Those
plans eventually were winnowed down to about five.
The essence of the reorganization and those plans was
captured in the subsequent reorganization that was done. One of
the key points was, we want to ensure that the Bureau of Indian
Affairs retains the responsibility for all of the resource
management functions in the Department, the oil and gas, land,
timber, and those things. The financial side of it would remain
in the Special Trustee's Office. That was adopted. There were
other things, the assurance that the self-governance tribes
would not be impacted, that they would continue to operate, be
able to run the programs as they had before.
The things where it broke down were on demands made by
tribes--some tribes, not all of them, but some of them--toward
the end of the consultation process when we thought we had
reached agreement on one of those five plans, and I think that
was at our Alaska consultation. The things that were not on the
agenda but caused the breakdown were about three items.
One was that a group of tribal leaders said, we want the
U.S. Government to give us an unlimited waiver of immunity from
suit. We want the U.S. to stand liable for any breach of trust
that might happen and just give us a general waiver of
sovereign immunity to sue the U.S. Government. We want these
trust principles, these trust standards, common law standards.
So any time you violate what we consider to be the duty of
loyalty, we can sue.
The other thing was, and it was mentioned, that we want
outside control over the Secretary. We want an external agency
that says if the Secretary of Interior is not following the
mandates of the statutes in administering the trust properly,
then this outside agency can, again, hold her accountable, or
the Secretary accountable. Well, we have got constitutional
issues with that and determined that that was not appropriate.
None of these items had anything to do with reorganization,
and that is why we had these task force meetings. We got to the
point where we had the reorganization. We thought we had the
principles down that the tribe wanted, and we felt that we went
forward with that after these consultation sessions to put that
together.
We then went back to the tribes in multiple meetings at all
of the regional offices, sending out newsletters, sending out
information, inviting the tribal leaders in to talk about this.
Frankly, I think that the organizational alignment that was
done, which did not cost a great deal of money--as Ms. Martin
explained, they are spending about $15 million on new employees
and about the same amount in the Special Trustee's Office--but
what we achieve in this organization is tremendous. It is
putting decisionmaking at the agency level. It is improving the
management of the natural resources, trust resources.
I just feel strongly that we believe that we did achieve
through those consultation sessions in 2002 what we felt the
tribes and what we heard from the tribes that they wanted in
the ultimate organization within these agencies.
The Chairman. The gentleman's time has expired.
Mr. Rehberg?
Mr. Rehberg. Thank you, Mr. Chairman, and thank you for
your outrage, and to Mr. Udall, yours, as well. There is an old
joke about the definition of a bureaucrat is a Democrat that
has a job that a Republican wants, and sometimes you feel that
way when you finally get a Republican Administration that can't
do anything but create another bureaucracy. It certainly does
make you angry.
I have the advantage, perhaps, over some of my colleagues
of having served in the executive branch as a Lieutenant
Governor in the State of Montana and have had the experience of
reorganizing many agencies and trying to fix problems. And what
I find unique or perhaps indefensible on the part of this
reorganization, and certainly you can label any prior
Administrations that haven't solved the problem and prior
Congresses, but this is our opportunity to change it.
My question to you, Mr. Swimmer, is did you bring business
into this at all? Did you ask anyone outside of government for
any advice as to how to set up an agency that can, in fact,
manage this kind of a problem? Ms. Martin, I would ask you the
same thing. First of all, what is your background? Are you
outside of government, come in to save the Bureau of Indian
Affairs from themselves, or are you from within, trying to
create the same government solution to the same problem that
has existed since the 1800s?
Mr. Swimmer. Is that addressed to me?
Mr. Rehberg. Yes. First of all, what is your background?
Are you from government or from business?
Mr. Swimmer. It is a little bit of everything. I started in
1967, practicing law in the State of Oklahoma. I went into the
banking business in the early 1970s and became Principal Chief
of the Cherokee Nation of Oklahoma in 1975. I served there
for--
Mr. Rehberg. OK. Then let me ask you, from a business
standpoint, would you run a business the way this agency is
being run now?
Mr. Swimmer. Absolutely not.
Mr. Rehberg. Then I guess the second question is to Ms.
Martin. I would ask your background, as well. Do you come from
business or do you come from government?
Ms. Martin. I come from mainly government. I graduated from
law school in 1993, represented the Oneida Tribe of Indians of
Wisconsin for 6 years before moving to the Senate to work for
Senator Campbell.
Mr. Rehberg. I respect the desire to bring the tribes in,
because that is important. You have got to have ownership by
the people that are truly affected. Did you bring anybody else
into the discussions on the structure so that you could create
a situation that could deal with the fractionalization, because
I don't find any recommendations coming to us to solve the
problem, and the problem is the fractionalization.
When we tried to deal with the same exact issue in Montana,
albeit on a much smaller scale. The same issue of
fractionalization of mineral rights came up and we didn't just
look for a government solution. We went back and said to
business, what would you do to try and change it? They made
tremendous recommendations to the State Legislature and to us
in the executive branch to fix it.
What have you guys done to bring things to Congress,
because we don't deal with this other than we have oversight
hearings. We need ideas from you. Have either one of you
brought ideas forward to us to deal with the fractionalization
issue?
Mr. Swimmer. Do you want me to do that? The
fractionalization issue has, in fact, been addressed, is being
addressed currently by the private sector. We have hired
several months ago, a year ago, Booz Allen to study the issue
and they have been working with the BIA lead person on
fractionalization to see if there are some solutions.
We do have some proposals on the table for Congress. Right
now, they are being considered in the Senate. I believe the
Senate Indian Affairs Committee is bringing forth a bill that
will help on some of the structural issues that are dealing
with fractionation. But tied into fractionation, of course, is
the probate issues, the title issues, a lot of other things
that have to be considered.
We are burdened by statute on fractionation. Right now, the
solution to the fractionation is to purchase those fractionated
interests and then turn them back to the tribe, in essence, re-
tribalize those lands. That is, right now, the interim
solution. As you, I am sure, know, have--Congress has helped in
the past and tried. We tried to escheat small interests and the
Supreme Court said you can't do that, so we have gone back to
trying to pay for these very small interests and purchase them
so that we can have tracts of land back under a single
ownership of the tribe, make it a lot easier for us to manage
or the tribe to manage.
In terms of private sector support also in our
reengineering of the business processes that we have gone
through in the last couple of years and are getting ready to go
through now, the adoption of those, we have invited two private
sector trust companies. We talked to probably five private
sector trust companies about how best to set up a trust
organization and whether or business processes that we go
through now in leasing land, collecting money, investing money,
whether these make sense and how they would change it, and then
we try to look at that compared to what we can and can't do.
For instance, I mentioned on the investment, we do have
limitations on what kinds of investments we can make with the
trust money. It can only be--
Mr. Rehberg. Mr. Chairman, could I ask one other quick
question? I have a background in banking, as well, and so I
clearly understand the concept of accounting, computers, and
government audits.
So my question is, if your computers are out of date, don't
come back to us and ask for more computers. Why don't you
contract the service out? There are entities that are available
that can do this so much faster and better than you ever could
possibly do within the government. For those of us who own
stocks and have fractionalization, as well, we may have ten
stocks in Coca-Cola. That is a pimple on their back, and yet
they can figure out how to get hold of us. Why don't you
contract that service out with a private entity?
Mr. Swimmer. Some of that work is, in fact, being done.
When the Special Trustee's Office was charged with assuming the
accounting responsibility for the trust fund and the throughput
of the money, the Special Trustee did go to the private sector,
a company called SEI, and they now have working for them
basically the major trust system that is used by private sector
and we call it the Trust Funds Accounting System, or TFAS. It
is a system of the private sector managed by the private
sector. It works very well. We are able to account. We balance
to the penny every day. We are able to--someone mentioned that
checks get paid out by some tribes in 7 days. We pay out within
24 hours of receipt of the money.
So it is working quite well, and I think that the same
concept is being adopted by the BIA in trying to bring other
systems up that they have to have to replace their legacy
systems. In fact, I know it is. The title system again is from
the private sector and we are looking at a realty system and a
probate tracking system and those kinds of things. They are all
being contracted by the private sector.
Mr. Rehberg. Thank you, Mr. Chairman.
The Chairman. Mr. Udall?
Mr. Mark Udall. Thank you, Mr. Chairman. I wanted to
acknowledge, Ms. Martin and Mr. Swimmer, you have done
something that rarely happens on this Committee which is to
create unanimity. This Committee normally goes at issues hammer
and tong and we seldom agree. But today, you hear across party
lines and on different sides of the dais grave concerns about
what is unfolding and what has unfolded in the past.
In saying that, I understand you all are working hard and
doing everything you think that we can possibly do, but Mr.
Swimmer, when I hear you talking about an intractable problem,
I then wonder if this Gordian knot has to be sliced by some
other government agency or some other effort. I did, I think,
hear you suggest a few minutes ago that possibly some
legislative approach may be necessary, and I have had
conversations with my colleague, Mr. Hayworth, and my
colleague, Mr. Udall of New Mexico, and Mr. Renzi and others
about our feelings of frustration and that at some point, with
100-plus years of this situation, we are going to have to step
up and solve it.
We spend enormous amounts of money and time just trying to
understand, as my colleague, Mr. Rehberg, just pointed out,
what the accounts look like. At some point, all of us have to
be held accountable by the American people for the amount of
money that has gone out the door, not to the tribes and not to
the individuals but to our friends in the legal community and
other administrative undertakings.
In that context, I wanted, if I could, just to talk a
little bit about a bill I introduced last year that deals with
the Interior Department's handling of trust accounts. The
Ranking Member of the Committee, Mr. Rahall, cosponsored it,
and probably it is also worth noting that in the Senate, the
bill was introduced, an identical bill, by Senators McCain,
Daschle, and Johnson. Are you familiar with the legislation
that has been introduced, the McCain-Daschle-Johnson bill?
Mr. Swimmer. It has been some time since I did review it,
Congressman. I think it was last year, and I am not familiar
with the conditions of it.
Mr. Mark Udall. If I might, I would like to ask you a
couple of questions. Before I do that, on the general theme of
the bill, it would make some changes in the organizational
structure of the Interior Department. It would also do two
other things. It would spell out the standards that would apply
to the discharge of trust responsibilities, and it would,
second, set up a commission to review the Federal Government's
handling of the trust responsibilities and submit a report and
a recommendation to Congress and the Administration. Do you
have a comment on any of those three pieces of the legislation?
Mr. Swimmer. On the first, on the standards, we believe
that the standards are pretty well set forth in statute. There
are thousands of provisions that apply to the trust that give
us direction on what we have to do. Any time we see that there
is a gap in those duties, then we can apply common law
standards to fill those gaps. I am not sure that we need a lot
more direction on standards.
I am sorry, what was the--
Mr. Mark Udall. Let me ask you, if I could, to focus on
some of the specific standards and see if you would agree that
they would be appropriate. The bill says that the Interior
Department should protect and preserve Indian trust assets from
loss, damage, unlawful alienation, waste, and depletion. Would
you agree with those?
Mr. Swimmer. Yes. We have that by statute now.
Mr. Mark Udall. How about a second set of standards. The
Interior Department should ensure that any management of Indian
trust assets promotes the interest of the beneficial owner and
supports to the maximum extent practicable, in accordance with
the trust responsibility of the Secretary, the beneficial
owner's intended use of the assets.
Mr. Swimmer. For the most part, I think that is
appropriate. In the trust world, you get into a lot of issues
between beneficiaries that may--taken in the context of trust
law, that is a standard that is probably acceptable. Where we
have conflicts with joint owners and individuals and tribal
owners in the same plot of land and we have to make decisions
that are in the best interest of both parties.
Mr. Mark Udall. The bill also says, third, that the
Interior Department--this is standards--should promote tribal
control and self-determination over tribal trust land and
resources without diminishing the trust responsibility of the
Secretary. Do you see a problem with that?
Mr. Swimmer. I don't see a problem with that, but it does
present the conflict because obviously if the tribe is given
the full control over the asset and the Secretary still have to
approve what the tribe has done, then it does leave the
Secretary responsible for decisions that she or he has no
control over. So it can be a problem.
I like the first part. I am not sure I like the second. And
we do--are very much in agreement on the self-governance. We do
encourage that and will continue to do so.
Mr. Mark Udall. If I might, Mr. Chairman, I have other
questions that I would like to extend to the witnesses for them
to answer outside the Committee hearing today.
And again, I want to thank you for holding this hearing. I
want to associate myself with your comments and commitment to
solving this and also your frustration. I think enough is
enough, and maybe this is something the whole Committee could
work together on solving with your leadership, my cousin's
leadership, Mr. Hayworth, Mr. Renzi, and others who are so
intimately involved with this.
The Chairman. We will leave the record of the hearing open
to allow written questions to be submitted to the witnesses.
Mr. Renzi?
Mr. Renzi. Thank you, Mr. Chairman. I am not going to join
in the chorus today on the frustration because I think Ms.
Martin, as far as my experience goes, I am going to hold back
and show you patience and deference, because the personal
experience that we have had in my office has been one of a
first-class work ethic.
We came to you within 30 days with a problem of a school
that the roof had collapsed. You found shelter for those
children and we will now have a new school, have five new
schools on Navajo, both Republican and Democrat districts. We
will have a new hospital for the San Carlos, who had children
with abscessed teeth and with disease that were 30 days in
seeing. I can normally be a pretty tough guy but I am going to
show you deference and patience because your work ethic has
been phenomenal.
We were up on Navajo Nation with a bipartisan committee,
Jim Matheson out of Utah, and we had a good time going through
all of the different kinds of issues that are affecting Native
American Indian housing. One of the things that came out was
the fact that there is a backlog of 113 staff years as it
relates to title searches on trust land. We talked to banks and
we talked to Realtors. We talked to people in the housing
industry who typically will close land that is in fee title,
but when it comes to closing or going through the escrows or
the title searches as related to trust land, they are looking
at a 2-year backup.
Now, 113 staff years at the BIA, even though you guys have
done a decent job of decentralizing that, I am told, and it
goes down to the regional offices, means we would have to hire
113 people to get it done in a year, just to get it done within
a year, cleaning it all up.
In addition, we have got this issue that was talked about
earlier that I think Mr. Pallone talked about as it relates to
economic development and what I call this business site leasing
approvals, which is even over 2 years. We are seeing a two- to
3-year backlog as it relates to economic development, small
businessmen and women.
We had a situation up on the Navajo Nation. An individual
had the money to open a Denny's restaurant. It took two or 3
years to get the business site leasing approved on trust land
so he could open the restaurant, hire Navajos, and it is really
the only restaurant up there near Window Rock that we all go
to.
And so I would ask, please, and give you a moment here to
talk about the improved effectiveness, the improvement for
efficiency that you see, particularly within the area of
economic development, and I am guessing here in the Division of
Real Estate Services, which I am thinking is where this title
search and the backlog will be.
Ms. Martin. Thank you for your comments, sir. With regard
to title searches specifically, we are talking today about the
restructuring of the BIA and OST, but there are also a number
of other projects. We are changing our processes and we are
trying to improve our systems, make them more modern.
One of the problems we have with title searches is we have
to update title when we have a probate and we also have to,
when we have a probate, we actually have to check all 12
regions separately to find out if title is current because of a
probate. So it takes a long time to do a title search. We are
trying to improve our system so that we have one central system
so that when we do a title search, we just have to go to one
computer terminal and do that title search. So that should
significantly shorten the amount of time that that takes, and
we expect to roll that system out within the next 15 months. It
is in the process of being rolled out and will be complete in
15 months.
With regard to business leases, we are trying to improve
that process, as well, make it easier to do business leases, to
push those decisions out to the field so that they don't have
to come to the central office or take as long as they take now.
Mr. Renzi. I appreciate your comments. I am going to hold
off and look forward to seeing the new rollout on the
technology. I would lend my position in support to the idea
that at some point, we are going to need to turn over, within
the idea of self-determination, the idea of economic
development, business leasing approval, I think, to the Native
American people themselves at some point, even if it is
gradually so there isn't a real shock there. I think it is
something we have to work toward and I appreciate your comments
and your hard work especially.
Ms. Martin. Thank you.
The Chairman. Mr. Inslee?
Mr. Inslee. I have no questions.
The Chairman. Mr. Pearce?
Mr. Pearce. Thank you, Mr. Chairman. I would express
similar frustrations on the decisionmaking process. I think
that issue had come up previously and would return to that.
The tasks, I know, are just exceptional, and though I don't
agree with all the findings that we are seeing here, I would
tell you that, Mr. Swimmer, when you make your comments about
the unreasonable request for immunity, unlimited right to sue,
outside control over the Secretary, I think you will find me
supportive on your position there, even though I have got some
observations about the whole process that I think are
applicable.
The Mescaleros are in my district and they had submitted in
October and November of last year about seven pages of concerns
about the changes, and those were not addressed and I would
appreciate it if you could address these, Ms. Martin. It gives
the perception that the opinions were not listened to by the
Native Americans, and these are not those unreasonable requests
that you are referring to. These seem to be balanced concerns.
One of the concerns that they express is that this
reorganization is going to require that the timber sales go
into trust rather than tribal services, and I will tell you
that the Mescaleros have been my example to the Forest Service
of what to do in the forest that they are exceptional. And so
when the crown fires have been raging in New Mexico, they get
to the Indian lands and they drop down and burn on the ground
because they have done properly. And yet we are going to take
that timber sales department away from them. Right now, if my
understanding is correct, they have a timber sales department
of two, and in the same area, the Forest Service has 20, so you
are going to undo the very positive thing that they are
succeeding at and that concerns me greatly.
Also, the expression that they have removed themselves out
of the management plans, they have taken their funds or
whatever out and so it looks like the fiduciary Trust Officers
are going to be sent to them anyway even though they don't have
any disbursements. So those are problems that they have
expressed.
I guess the Offices of Trust Services and Tribal Services,
the two new Deputy Superintendents that appear to be placed out
with the tribe, the tribe has expressed that they feel like
they are doing many of the management things OK. They need more
things on the worker bee level and they wonder if there is any
flexibility in your program here.
So those are my concerns. If you would address those, I
would appreciate it.
Ms. Martin. With regard to the timber sale issue, timber
sales were always in trust, so I don't know that that
necessarily would have been moved, but I will look into that
specifically.
I will let Mr. Swimmer address the Trust Officer question,
but with regard to the Deputy Superintendents, those people are
expected to perform some management activities, but we expect
them to be hands-on in resolving beneficiary concerns. So they
should be dealing with people every day and being hands on with
regard to solving problems, also coordinating with any Special
Trust Officer who might be located in the area. But we also at
some point expect those, if they are compacted or contracted by
the tribes, to be able to be compacted or contracted, as well.
Mr. Pearce. Your information that the timber sales have
always been in trust is in direct opposition to what my staff
has said, that they show those to previously have been in
travel services, that the new categorization will put them into
trust and therefore will take the responsibility away from the
tribe. So we need clarification on that, if you would.
And again, I guess the understanding of exactly what
tangible benefits does the OST reorganization provide when the
tribe doesn't have any fractional interests and has removed its
trust funds from the Department.
Mr. Swimmer. The Trust Officers are placed at the local
agencies to support those trust activities, whether it is
tribal beneficiary, individual beneficiary. We are trying to
place those Trust Officers at the agencies where the greatest
amount of trust work is, and if that is a fact that at
Mescalero agency there are no individual beneficiaries, then we
are not likely to put a Trust Officer there right away. The
Trust Officers generally are responding to the beneficiaries'
request.
For instance, at the Concho Agency, Mr. Ware can tell you
that we had nearly 1,000 phone calls a month that come in there
for issues on oil and gas properties and service leasing. They
have special deposit accounts that need to be distributed to
individuals. We have whereabouts unknown. The Trust Officers
are going out to the community, trying to work with the
individual beneficiaries to help locate people, help get their
money to them quicker, make sure that the questions get
answered.
Mr. Pearce. Thank you, Mr. Chairman, and I will submit the
rest of my questions and this document from the tribe. Thank
you.
The Chairman. Thank you.
[NOTE: The information submitted for the record by Mr.
Pearce has been retained in the Committee's official files.]
The Chairman. Before I excuse this panel, I wanted to give
Mr. Ware an opportunity to address the question that Mr. Pearce
just asked in terms of what is happening on the ground and
possibly get an idea from you, since you are doing it right
now.
Mr. Ware. Yes, I am, Mr. Chairman. I would like to thank
the other members of the Committee for allowing me to be here
today to give you some idea about what my responsibilities have
been since becoming a Trust Officer. I have been a Trust
Officer for 6 months now at the Concho Agency. We deal with a
substantial number of oil and gas leases there. We have farming
and grazing leases that are ongoing all the time.
We have anywhere between 1,000 and 1,500 calls a month to
our IM staff that have to be answered. Many of them are just
routine calls. Others require research and getting, doing all
kinds of work to try to get these answers taken care of. We
polled the realty people and the Bureau of Indian Affairs
agency folks and they estimated that close to 35 to 37 percent
of their time up to recent times have been dealing with the
beneficiary calls and referrals and things like that.
I am a person who--I am a worker bee. I know somebody
mentioned something about a worker bee. My primary
responsibility is beneficiary services. What I am doing is I am
dealing face-to-face with the constituents that come in,
beneficiary folks. I am taking telephone consultations. I am
taking referrals from the IM staff and also the Bureau of
Indian Affairs realty people.
We discuss things from the probate process, people wanting
to know what the status of their probate is, to things such as
wanting to know what their remedies were if they thought there
was something wrong with the oil and gas payments. We can get
some of the information together, and then other times we work
with the other agencies, Bureau of Land Management, Minerals
Management Service. So there is a lot going on every day at the
agency.
We have questions that come up specifically about IM
accounts. Beneficiaries will call in. We even have sometimes
folks will call about tax questions, things like that.
My background is that I worked as a legal services lawyer
for 7 years and I was also in private practice for an
additional 7 years. I would say anywhere from 90 to 95 percent
of my practice was dealing with Indian people, so I feel right
at home dealing with Indian people and I think that is
important, that when you are dealing with Indian people, you
have to--they have to have some trust in you. I am developing
that relationship with the Indian beneficiaries, at least
within the Cheyenne-Arapaho Reservation in Oklahoma.
One of the big things that we have been able to accomplish,
what we have had is we have had a number of community meetings
within the original reservation boundaries of the Cheyenne-
Arapaho Tribes. We realized that some of our Indian people
don't have the resources to be coming to the agency all the
time, so what I have done is I have gone out there to see them.
I have set up meetings out there to talk about issues. We have
brought the Bureau of Land Management, Minerals Management
Service to go along with our group of people to inform the
public about what services were available.
During this process, too, we are learning about some of the
issues that are of great concern to our beneficiaries and we
are planning to have a series of these community meetings as we
go along. I expect that we will have one sometime during the
summertime when we will go back out again.
One of the big responsibilities, and Mr. Swimmer alluded to
it, is we want to make sure that the IM accounts are paid out,
the monies are paid out promptly. One of the responsibilities I
have is to watch over the staff, the people who are the worker
bees who make sure that everything is done correctly. I
supervise them. I review transactions, and the whole idea is to
try to present these--the paperwork that needs to be presented
one time so that the payments can actually be done on an
expedited basis.
What I have also done is I have worked with the
superintendent there at Concho Agency and her name is Galila
Johnson. She is a wonderful person to work with. We sit down
every week to talk about some of these special deposit accounts
that we have to deal with, supervised accounts. We meet with
the realty people. It is an open-door policy, so if I am out at
some point, out of the office doing something, then when I get
back in, there are usually requests made for technical
assistance by agency staff.
Some of these requests that come in to the realty staff
would take a lot of time away from them processing their daily
work, so what I have been able to do is I have been able to
take some of these larger issues that actually will take days
to deal with. I am taking on those functions and helping the
agency on that end.
And, of course, the other function that I am doing, too, is
helping the Office of Special Trustee with the special programs
that are going on. We are trying to deal with the probate
backlogs. We are trying to deal with the special projects,
whereabouts unknown. We have--in the future, what we are
planning to have is we are going to have some estate planning-
type seminars and forums for our beneficiaries.
So we have a lot. We have a lot to do. I feel like that I
am a worker bee out there and I work real hard. I have only
been on here for 6 months, but I can tell you that there is a
lot of work to be done. Beneficiaries need someone to advocate
for them, and I feel like I am able to do that. If there are
any questions, I will be glad to answer them at this time.
The Chairman. Thank you. I want to thank this panel for
their testimony. Obviously, there is some frustration on the
Committee in trying to deal with this issue and I look forward
to working with all of you to hopefully smooth out this process
as we go through it, so thank you very much.
I would like to call up our second panel, Chairman Harold
Frazier of the Great Plains Tribal Chairman's Association;
Keller George, President of the United South and Eastern
Tribes; Principal Chief Jim Gray of the Osage Tribe; and the
Honorable Melanie Benjamin, Chief Executive of the Mille Lacs
Band of Ojibwe Indians.
I ask unanimous consent that the statement of Mr. Kildee be
entered into the record at the appropriate point, without
objection.
[The prepared statement of Mr. Kildee follows:]
Statement of The Honorable Dale E. Kildee, a Representative in Congress
from the State of Michigan
Good morning. Mr. Chairman, I want to thank you for scheduling this
hearing today.
For more than a century, the United States Government has done a
poor job managing the Indian trust. Congress has attempted to rectify
the many bureaucratic practices that had stalled the proper
administration of trust fund accounts.
In 1994, we passed a law to reform the management of trust funds
and established the Office of Special Trustee for American Indians
within the Department of Interior. The purpose of this office is to
oversee trust fund management reform among the other departments within
the Interior Department.
In 1996, Eloise Cobell filed a federal class action lawsuit against
the Department of Interior over the trust fund mismanagement of
individual Indian money accounts.
The Federal court ruled that the Federal Government breached its
trust responsibilities to the Indian account holders.
And last fall, the judge ordered the Department of Interior to
conduct a full historical accounting of the Indian trust.
As a result of the Cobell litigation, the Department has been
compelled to develop a trust reform plan. In 2001, the Department
attempted to create a new Bureau of Indian Trust Assets Management
(BITAM), which was met with strong opposition.
The Department abandoned that proposal and created a tribal task
force.
Despite not having a consensus of the tribal task force, the
Department submitted a $5 million reprogramming request to the House
and Senate appropriators during the December 2002 holiday recess so
that it could go forward with another reorganization plan.
The appropriators approved that request despite the fact that the
Department failed to share details of the plan with the authorizing
Committee.
Simultaneous to the Department's efforts, this Committee has
repeatedly fought attempts by the appropriators to limit the
Department's responsibility to provide a full historical accounting of
the Indian trust and diminish the rights of Indian trust beneficiaries.
Mr. Chairman, while I agree that there is an urgent need for trust
reform, tribes have raised numerous concerns about the plan. I look
forward to developing a better understanding of the plan and of the
tribes' concerns. Thank you.
______
The Chairman. I want to welcome our second panel. I know
that this has been a long hearing so far. I appreciate your
patience, but obviously this is an extremely important issue to
all of us and the Committee does need to spend the time
necessary to fully understand and make recommendations on this.
Before I begin with this panel, I would like to ask you to
stand, raise your right hand.
Do you solemnly swear or affirm under the penalty of
perjury that the statements made and the responses given will
be the whole truth and nothing but the truth, so help you, God?
Mr. Frazier. I do.
Mr. George. I do.
Mr. Gray. I do.
Ms. Benjamin. I do.
The Chairman. Thank you very much. Let the record show they
all answered in the affirmative.
Welcome. Mr. Frazier, we are going to begin with you.
STATEMENT OF HAROLD FRAZIER, CHAIRMAN, GREAT PLAINS TRIBAL
CHAIRMAN'S ASSOCIATION
Mr. Frazier. Good morning, Mr. Chairman and honorable
members of the Committee. I am honored to be here today to
testify on the Department of Interior's reorganization and I
thank you for holding this hearing.
I also want to thank you, Chairman Pombo, for coming out
and visiting Sioux country out on the Rosebud Reservation. I
really appreciate you coming out there.
I am here today not only representing the Cheyenne River
Sioux Tribe, but the Great Plains Tribal Chairman's
Association. There are 16 tribes in the Great Plains Region.
They encompass the States of North Dakota, South Dakota, and
Nebraska. We are treaty tribes and many of us have large land
bases and we know that we will suffer greatly under the current
reorganization plans of the Department of Interior. We tribes
are unique and we know that one size does not fit all.
Trust comes from treaties, and it is time that our treaties
are honored. The current Department of Interior reorganization
is a waste of money and resources which are much needed at the
local agency level to provide trust management. The Trust
Officers that are planned to be located on reservations is one
example. They will be only duplicating services that are now
being provided by the agency superintendents. Why do we need
$100,000-a-year positions at our agencies when we could better
utilize the funding to hire appraisers, range techs, range
conservationists, accountants, surveyors to better manage our
lands and our assets.
Another example is the Deputy Superintendents. Their
positions are being funded from Fiscal Year 2003 carryover
dollars. That funding for their salaries will not be there next
year, so we question, where are they going to get their
salaries funded from, education, social services, road
maintenance? Our people cannot take any more cuts from our
programs to fund this reorganization. And also question, is
this good management practices, to fund permanent positions
with carryover dollars, knowing that the next fiscal year,
there will be no longer any funding from that source?
For these reasons, we ask Congress to immediately halt this
reorganization and look to Indian country for alternative
solutions. We in the Great Plains Region have agency-specific
lands that are more cost effective and that would benefit our
people more.
More tribes and associations have passed resolutions
calling for a halt to this reorganization until their concerns
are addressed. There are probably more tribes joining this
effort, especially since Senator Johnson is requesting the
General Accounting Office to investigate the entire management
and administrative system of the Office of Special Trustee.
We feel that it is crucial that an examination be made of
the Office of Special Trustee's ever-increasing role in the
reorganization and the circumstances that have led it to go far
beyond the statutory duties given it by Congress. We strongly
believe that the Office of Special Trustee has overstepped its
statutorily mandated role of overseeing reform by implementing
measures that would shrink the BIA's management functions at
the agency level.
Mr. Chairman and Committee members, for these reasons, I
urge you to join Senator Johnson in requesting a formal General
Accounting Office investigation of the Office of Special
Trustee.
In closing, the idea of reforming the trust management is a
good one. I believe all tribes, not only my own, realize that
the system is flawed. It is not change that tribes fear, it is
change without consultation or consideration for each region's
unique assets that we dispute.
I, too, can sympathize with the Mescalero Tribe. In the
consultation in Las Vegas in October 2003, we in the Great
Plains submitted a letter to Aurene Martin. To date, we have
heard no response. If any of our comments are going to be taken
into consideration, thrown out, we haven't had any response.
On behalf of the Cheyenne River Sioux Tribe and the Great
Plains Tribal Chairman's Association, I want to thank you for
the opportunity to testify here today and I look forward to
answering any questions you may have.
The Chairman. Thank you.
[The prepared statement of Mr. Frazier follows:]
Statement of Harold Frazier, Chairman, Cheyenne River Sioux Tribe,
Chairman, Great Plains Tribal Chairman's Association
Good Morning, Mr. Chairman, Mr. Vice Chairman and honorable members
of the Committee. I am honored to be here to testify regarding the
Department of Interior's ongoing reorganization of the Bureau of Indian
Affairs and the Office of the Special Trustee for American Indians. I
am here today representing not only the Cheyenne River Sioux Tribe, but
also the Great Plains Tribal Chairman's Association. The Great Plains
Tribal Chairman's Association represents 16 tribes in the Great Plains
region, encompassing the states of North Dakota, South Dakota and
Nebraska. The Great Plains Tribes--Cheyenne River Sioux, Standing Rock
Sioux, Crow Creek Sioux, Turtle Mountain Band of Chippewa, Lower Brule
Sioux, Three Affiliated Tribes, Yankton Sioux, Spirit Lake Sioux,
Oglala Sioux, Rosebud Sioux, Santee Sioux, Sisseton-Wahpeton Oyate,
Winnebago, Flandreau Santee Sioux, Omaha and Ponca--are major
stakeholders in the Department of Interior's efforts to ``reorganize''
the Bureau of Indian Affairs and the Office of the Special Trustee for
American Indians.
On March 10, 2004, I testified before the Senate Committee on
Indian Affairs on the very same issue: reorganization. In that
testimony, I underscored that a majority of Indian tribes were against
reorganization, not only because it was put into effect without
meaningful tribal consultation, but also because a ``one size fits
all'' approach to trust management reform is certain to fail. Since
that time, there has been little progress toward resolution of many of
the problems I highlighted in my testimony, including the problematic
expansion of the OST, imposition by trust officers with dubious
authority at the local level, and shrinking of the BIA's presence on
the reservation, among other concerns. However, there has been a
positive development, at least from the tribal perspective: More tribes
have voiced a desire to take a hard look at how they would reform the
system in their region, based on factors that are unique to them.
For instance, the Great Plains Regional Proposal for Trust Reform,
which I presented for the first time before the Senate Committee in
March this year, is a viable alternative to reorganization that fits
our needs as a region. Our detailed plan for our region, along with
specific legislative language to accomplish it, is attached to my
written statement. The Great Plains region has developed a proposal for
a pilot program, similar to that set up by the legislative rider in the
FY 2004 Interior Appropriations bill for Self Governance tribes.
Differences between regions in population, employment, revenue
foundation and even geographic location impact how trust reform
measures should vary and be flexible to fit the needs of the particular
region. Three of the Great Plains region tribes have developed plans:
Cheyenne River Sioux Tribe, Three Affiliated Tribes and Winnebago.
These agency-specific plans compare costs associated with the
Department's proposed changes and our own assessment of current and
future needs for reforming the trust asset management system. The plans
present a simpler, clearer and more cost-effective use of already
scarce resources.
I am pleased to report that the Great Plains Region has been joined
by the Montana-Wyoming Tribal Leaders Council and the Fort Peck Indian
Tribe in our effort. These organizations have passed resolutions
renouncing reorganization in its present form and demanding a halt to
any reorganization activity until tribal concerns are considered.
Moreover, I am quite optimistic that more tribes from other regions
will be encouraged to join our efforts in light of Senator Tim
Johnson's request that the Government Accounting Office (GAO)
investigate the entire management and administrative system of the OST,
including its implementation and budget process. We think that it is
crucial that a fair and impartial examination be made of the OST's ever
increasing role in reorganization, and the circumstances that have led
it to go far beyond the statutory duties given it by Congress. We
strongly believe that the OST has overstepped its statutorily-mandated
role of overseeing reform by implementing measures that would
significantly shrink the BIA's management functions at the agency
level. Mr. Chairman, for these reasons, today I encourage you to join
Senator Johnson in requesting a formal GAO investigation of the OST.
In sum, the idea of reforming the trust management system is a good
one. I believe all tribes, not only my own and those in my region,
understand that the system is flawed. Despite reports to the contrary,
it is not change that tribes fear--it is change without consultation or
consideration for each region's unique trust assets, including those
tribes' ideas for change, that we dispute. The Department's plan for
reorganization, including the ``To-Be'' reengineering process, has
noteworthy goals. No one disputes that land consolidation is essential
if Indian lands are to be prudently managed, nor is there any
disagreement with the idea that there is a need to establish better
systems to keep track of leases and receivables. Upgrading the computer
systems in use would be of substantial benefit, however, going forward
with the present program without addressing fundamental deficiencies in
basic services provided at the agency level is doomed to be a useless
exercise.
We would like to work with the Department to put into effect those
elements of reform that we believe will benefit our region. Our
legislative proposal would allow that to be done on an expedited basis.
We would welcome a cooperative effort to develop regional systems that
both region-tribes and the Department can agree upon. We can work
together to effectuate positive change for the benefit of all. I am
happy to report that on April 26, 2004, Special Trustee Ross Swimmer
met with a number of tribal leaders here in Washington to explain the
present process and to listen to tribal concerns. While no agreements
were reached at that meeting, there are future plans for similar
meetings. I sincerely hope that we can resolve some of the issues of
concern through further dialogue.
Conclusion
On behalf of the Great Plains Tribal Chairman's Association and the
Cheyenne River Sioux Tribe, thank you for the opportunity to present my
views on reorganization. I look forward to answering any questions you
may have.
______
The Chairman. Mr. Gray?
STATEMENT OF JIM GRAY, PRINCIPAL CHIEF,
OSAGE TRIBE, OKLAHOMA
Mr. Gray. Chairman Pombo, members of the House Resources
Committee, I am Jim Gray, Principal Chief of the Osage Tribe
based in Pawhuska, Oklahoma. I am honored to be here today to
testify today before this Committee and provide the vies of the
Osage Tribe.
Before I begin, I would like to thank the Committee for
voting out the Osage membership and government form legislation
last week. The legislation would be an enormous step forward
for the Osage people.
Mr. Chairman, I appreciate the Committee holding this
important hearing on trust reform and the efforts of the
Department of Interior to implement trust reform through the
reorganization of the Bureau of Indian Affairs and the Office
of the Special Trustee. I appreciate your willingness to take a
close look at these serious issues. You have already held
several hearings over the last year in different parts of the
country on trust management and trust fund issues, including
the Indian trust fund lawsuit, which is the reason that we are
all sitting here today.
The Cobell case served as a wake-up call to the Federal
Government about its gross mismanagement of trust assets and
trust funds that Indians have known for over 100 years, but
whose efforts to rectify or reform the system were met with a
deaf ear. The Cobell case set off a chain reaction of events,
including the reorganization at the Department of the Interior
that will reverberate for decades to come.
The issue of trust reform strikes close to the heart of the
Osage. The Osage Tribe continues to receive nearly all Federal
services directly from the Bureau of Indian Affairs and the
Office of the Special Trustee, not through self-governance
contracts or compacts. While I am firmly of the view that the
Osage Tribe should take over many of these functions, there are
reasons why our tribe has not done this on a significant scale.
First, because of the environmental damage from minerals
production on our reservation and the Federal Government not
enforcing or cleaning up this pollution as it should. There may
be significant environmental liabilities associated with
contracting certain Federal programs.
Second, these programs are so badly underfunded that taking
them over only places an expensive obligation in our lap we do
not yet have the resources to supplement and make work as they
should. With reference to Congressman Udall's position or
concerns that he has raised I think in the Salt River example,
I think you also see a situation where you have a tribe that
has the resources to be able to supplement these programs, and
that is certainly not the case with other tribes across the
country.
Third, over a century of the Federal Government operating
through the BIA in the daily lives of our people have created a
conditioning, a mindset, that a pervasive BIA role is more
comfortable than the unknown. These are difficult problems for
a tribe with very limited tribal resources to ensure efficient
service delivery to our people. Nonetheless, the movement
toward a greater tribal role in decisionmaking and
administration of services is a concept I wholeheartedly
embrace.
I also agree with the view of the National Congress of
American Indians that the determination of how to best manage
trust obligations to tribes and Indians should focus on the
most local level, BIA agencies. The BIA Osage Agency is an
example of an agency specific plan tailored to meet the
specific minerals production needs of the Osage. One hundred
percent of the Osage Reservation's sub-surface is held in trust
for the Osage Tribe. Income from minerals production purports
to be paid into the Federal trust fund system, then out
primarily to individual Indians.
Although non-Indians and corporations also receive funds
from our trust asset, because of the tribal and Federal
priority of Osage minerals production, the BIA Osage Agency
administers all Osage minerals development without the
involvement of the Minerals Management Service or other
agencies. We believe that this focus of the Osage Agency leads
to greater efficiencies in Osage minerals production.
It remains to be seen whether the BIA and OST
reorganization will refocus on providing better front-line
trust services to tribes and Indians at the local level rather
than hunkering down against potential trust liability.
Effective choosing and placement of trust officials are
critical.
My private and public sector experience informs me that
service providing can only be as good as the people you put in
those positions. I am disappointed that the tribes have had so
little input in the hiring of key Federal positions. I am
concerned that avoiding trust liability may be overcoming the
commitment to proper administration of moral and legal trust
obligations to tribes and Indians.
But focusing on trust reform only through the lens of BIA
and OST reorganization risks losing sight of the big picture of
trust reform. Real trust reform begins with Congress. The
United States Constitution specifically empowers Congress to
regulate commerce between the different sovereigns, States,
foreign nations, and Indian tribes. The United States Supreme
Court has established that Congress has enormous powers over
Indians and tribes. Working with the tribes, it is Congress
that must unshackle the BIA and OST from statutory directives
requiring BIA officials to look over the shoulders of tribal
leaders and post-judge tribal decisionmaking.
The shameful Federal policies of yesteryear that presumed
Indian and tribal incompetence and sought to control Indian and
tribal resources and decisions are still found in today's laws,
and therefore, also, the daily obligations of Federal
employees. The easy route for both Congress and the tribes is
to scold the BIA and OST in harsh terms, which both usually
deserve when it comes to trust management. The more difficult
step in this task is stepping back, taking a broader look at
the problems, and seeking consensus from possible solutions.
This is in the political environment of dealing with tribes who
have learned the hard way to fear what Congress might do.
The Osage Tribe offers several ideas. Revisit anachronistic
laws--the BIA and OST continue to do what Congress has told
them to do when it comes to pervasive control over the lives of
Indians and second-guessing tribal decisionmaking. Congress
recently freed both the tribes and the BIA of most contract
approvals under 25 U.S.C. 81. Furthermore, the new Navajo
leasing statute limits the BIA role in Navajo leasing
decisions. These are excellent examples of assisting both
tribes and the Federal agencies, reliving them of unwanted and
unnecessary duties that have nothing to do with the core
missions of either entity. Reforming the broader leasing
statute and enacting the Indian energy provisions that were
negotiated last year would be steps in the right direction.
Fractionation--enact a new law addressing fractionation of
Indian lands, with the policy of tribal self-governance guiding
this law.
Accountability--there must be ways to hold Federal
decisionmakers accountable for failure to properly administer
trust obligations. For too long, Congress has treated the BIA
and OST as welfare distributors and overseers rather than
agencies with more legal duties to tribes and Indians.
Funding--appropriate the funds the agencies need to do
their jobs effectively and maintain the treaty and moral
obligations of the United States to Indians and tribes.
We believe Congressional initiatives in this direction
would help create a more efficient, more effective reform of
the BIA and OST.
Thank you for the opportunity to testify today. I would be
pleased to answer any questions you may have.
The Chairman. Thank you.
[The prepared statement of Mr. Gray follows:]
Statement of Jim Gray, Principal Chief of the Osage Tribe
Good morning, Chairman Pombo, Ranking Member Rahall, and other
members of the House Resources Committee. I am Jim Gray, Principal
Chief of the Osage Tribe based in Pawhuska, Oklahoma. I am honored to
be here to testify today before this Committee and provide the views of
the Osage Tribe. Before I begin, I would like to thank the Committee
for voting out the Osage membership and government form legislation
last week. This legislation would be an enormous step forward for the
Osage people.
Mr. Chairman, I appreciate the Committee holding this important
hearing on trust reform and the efforts of the Department of the
Interior to implement trust reform through the reorganization of the
Bureau of Indian Affairs and the Office of the Special Trustee. I
appreciate your willingness to take a close look at these serious
issues. You have already held several hearings over the past year in
different parts of the country on trust management and trust fund
issues, including the Indian trust fund lawsuit, which is the reason
that we are all sitting here today. The Cobell case served as a wake-up
call to the Federal government about its gross mismanagement of trust
assets and trust funds that Indians have known for over a hundred years
but whose efforts to rectify or reform the system were met with a deaf
ear. The Cobell case set off a chain reaction of events, including the
reorganization at the Department of the Interior that will reverberate
for decades to come.
The issue of trust reform strikes close to the heart of the Osage.
The Osage Tribe continues to receive nearly all Federal services
directly from the Bureau of Indian Affairs and Office of Special
Trustee, not through self-governance contracts or compacts. While I am
firmly of the view that the Osage Tribe should take over many of these
functions, there are reasons why our Tribe has not done this on a
significant scale. First, because of the environmental damage from
minerals production on our Reservation and the Federal government not
enforcing or cleaning up this pollution as it should, there may be
significant environmental liabilities associated with contracting
certain Federal programs. Second, these programs are so badly
underfunded that taking them over only places an expensive obligation
in our lap that we do not yet have the resources to supplement and make
work as they should. Third, over a century of the Federal government
operating through the BIA in the daily lives of our people has created
a conditioning, a mind-set, that a pervasive BIA role is more
comfortable than the unknown. These are difficult problems for a Tribe
with very limited tribal resources to ensure efficient service delivery
to our people. Nonetheless, the movement toward a greater tribal role
in decisionmaking and administration of services is a concept I
wholeheartedly embrace.
I also agree with the view of the National Congress of American
Indians that the determination of how to best manage trust obligations
to tribes and Indians should focus on the most local level, BIA
agencies. The BIA Osage Agency is an example of an ``agency specific
plan'' tailored to meet the specific minerals production needs of the
Osage. 100% of the Osage Reservation subsurface is held in trust for
the Osage Tribe. Income from minerals production purports to be paid
into the federal trust funds system then out primarily to individual
Indians, although non-Indians and corporations also receive funds from
our trust asset. Because of the tribal and federal priority of Osage
minerals production, the BIA Osage Agency administers all Osage
minerals development, without the involvement of the Minerals
Management Service or other agencies. We believe that this focus of the
Osage Agency leads to greater efficiencies in Osage minerals
production.
It remains to be seen whether the BIA and OST reorganization will
refocus on providing better frontline trust services to tribes and
Indians at the local level rather than hunkering down against potential
trust liability. Effective choosing and placement of trust officials
are critical. My private and public-sector experience informs me that
service providing can only be as good as the people you put in those
positions. I am disappointed that the tribes have had so little input
on the hiring of key federal positions. I am concerned that
overreaching to avoid trust liability may be overcoming the commitment
to properly administering moral and legal trust obligations to tribes
and Indians.
But focusing on trust reform only through the lens of BIA and OST
reorganization risks losing site of the big picture of trust reform.
Real trust reform begins with Congress. The United States Constitution
specifically empowers Congress to regulate commerce between the
different sovereigns: states, foreign nations, and Indian tribes. The
United States Supreme Court has established that Congress has enormous
powers over Indians and tribes. Working with the tribes, it is Congress
that must unshackle the BIA and OST from statutory directives requiring
BIA officials to look over the shoulders of tribal leaders and post-
judge tribal decisionmaking.
The shameful federal policies of yesteryear that presumed Indian
and tribal incompetence and sought to control Indian and tribal
resources and decisions are still found in today's laws and therefore
also the daily obligations of federal employees. The easy route for
both Congress and the tribes is to scold the BIA and OST in harsh terms
(which both usually deserve when it comes to trust management). The
more difficult task is stepping back, taking a broader look at the
problems, and seeking consensus from possible solutions. This in the
political environment of dealing with tribes who have learned the hard
way to fear what Congress might do.
The Osage Tribe offers several ideas.
Revisit Anachronistic Laws. The BIA and OST continue to
do what Congress has told them to do when it comes to pervasive control
over the lives of Indians and second guessing tribal decisionmaking.
Congress recently freed both the tribes and the BIA of most contract
approvals under 25 U.S.C. Sec. 81. Furthermore, the new Navajo leasing
statute limits the BIA role in Navajo leasing decisions. These are
excellent examples of assisting both tribes and the Federal agencies
through relieving them of unwanted and unnecessary duties that have
nothing to do with the core missions of either entity. Reforming the
broader leasing statute and enacting the Indian energy provisions that
were negotiated last year would be steps in the right direction.
Fractionation. Enact a new law addressing fractionation
of Indian lands, with the policy of tribal self-governance guiding this
law.
Accountability. There must be ways to hold Federal
decisionmakers accountable for failure to properly administer trust
obligations. For too long, Congress has treated the BIA and OST as
welfare distributors and overseers, rather than agencies with moral and
legal duties to tribes and Indians.
Funding. Appropriate the funds the agencies need to do
their jobs effectively and maintain the treaty and moral obligations of
the United States to Indians and tribes.
We believe Congressional initiatives in this direction would help
create a more efficient, more effective reform of the BIA and OST.
Thank you for the opportunity to testify today. I would be pleased
to answer any questions you may have.
______
The Chairman. Mr. George?
STATEMENT OF KELLER GEORGE, PRESIDENT,
UNITED SOUTH AND EASTERN TRIBES, INC.
Mr. George. Good morning, Mr. Chairman, and thank you for
this opportunity. Honorable members of the Committee, my name
is Keller George. I am a member of the Oneida Indian Nation
Men's Council and President of the United South and Eastern
Tribes, known as USET. On behalf of the 24 member tribes of
USET, I thank you for this opportunity to present our
perspective on the reorganization of Indian trust management.
The Administration, in our view, has taken it upon
themselves to make drastic and sweeping changes in the Bureau
of Indian Affairs in programs and services, functions and
activities, regardless of the opposition from Indian country.
DOI officials stated that they had consulted with tribes on
various reorganization issues that are being instituted.
However, this is not totally true. DOI has made consultation a
mere ritual they must go through to push their agenda. USET
believes that currently, there is still time to implement
tribal needs into the process and to gain tribal support.
We heard this morning that there was over 40 meetings with
the tribal task force working in trust reform. I was a member
of that task force and only missed one of those meetings during
the entire almost a year process. In my view, we in the Indian
country viewed this as negotiation, not consultation, because
we were there trying to come up with a plan that could be used
for reorganization in the trust management.
That is why there was great opposition to the BITAM process
that was brought forth by the Secretary of Interior. We made a
lot of progress as we went through this. There were over 25 or
30 plans put forth. We got down to either between two and five
plans that we could support.
However, after a whole year of meetings, in December of
2002, we had put forth an initiative to create a position of
under secretary. The DOI officials, Federal officials that were
at table agreed with that. The problem was that we wanted
oversight and trust principles or standards put in place, which
they were opposed to doing, and that was the breakdown in
December of 2002 of that almost a year long process.
After that meeting in December, we didn't meet again. The
next notice I get is there is a roll-out of the reorganization
that was going to be presented to the Eastern tribes in
Nashville, Tennessee. The decisions about the reorganization
were made. I will agree, however, that there was a lot of
issues that were agreed upon by consensus, and I don't see a
whole lot of those issues in this reorganization that we have.
These are some of our recommendations, solutions, and to
make these changes for smoother and more effective change. No
funds should be diverted from the BIA's programs, finances, to
finance the reorganization efforts in regards to the expansion
of OST's programming. Tribes have made it clear that DOI should
not use program dollars to help fund the mistakes of the
Administration. Further, there has been little discussion
between the Federal Government and tribal leadership regarding
the level of reorganization, despite repeated requests from
Indian country.
Rehabilitating the trust requires the DOI to address
financial management and land and natural resource management.
The current reorganization only addresses financial management
issues and will have little impact on DOI's ability to offer
improved trust services to tribes that have not allotted
substantial portions of their reservations.
Additionally, the reorganization does not provide for the
staffing necessary to address the appraisal, surveys, and
compliance abilities required to improve the management of land
and natural resources.
Carryover funds from previous years should be not used for
the reorganization effort. As Chairman Frazier has pointed out,
these trust officers are being funded with carryover money.
What happens in the next year when that money runs out? Is it
the usual way it happens, borrow from Peter to pay Paul? Well,
quite frankly, Indian tribes throughout this country are tired
of being Peter, and it is true that every time the tribes are
denied money to administrative programs that are so vital to
Indian country to pay for other programs that have not been
allotted in the budget. Is this going to happen again if
Congress does not, the appropriators do not have the funding
for these trust officers and Deputy Aministrators throughout
the country? There have been over 47 hired already. Where is
that money coming from?
So that is what our concerns are. The ``to be'' process
must be passed into the reorganization effort. The ``to be''
process determines the best practices for business processes
and resources needed to accomplish these goals. USET suggests
that one process be introduced per year over a 5-year period,
allowing the Department to refine processes as they are
introduced. This allows the BIA to request multiple-year
appropriations instead of a single-year appropriation from
Congress.
Tribes must know how the reorganization is going to affect
the regional agency level operations and once and for all. The
regional reorganization chart currently in place does not
accurately portray the current situation at the local level.
Further, tribes cannot be expected to comment on the
reorganization where there is no information available on which
to base comments. Tribes are not being fully informed of
pending changes.
It is time for the Federal Government to be held
accountable for their trust responsibility. Indian country must
not be held at bay any longer by pending cases in the courts.
Recent Supreme Court decisions have concluded that the Federal
Government has avoided fiduciary trust responsibilities and
operated with bad faith in its business relationship with
Indian tribes. Tribes no longer should be forced to find
remedies through the courts.
USET tribes support reform and understand reorganization is
necessary for the government to fulfill its fiduciary
responsibilities. Tribes must no longer receive ambiguous and
confusing information about the reorganization process. Future
generations of Indian people are depending on tribal leaders to
take a stand and to approach reform with a united voice.
I would be happy to answer any questions that you may have.
The Chairman. Thank you.
[The prepared statement of Mr. George follows:]
Statement of Keller George, President, United South and Eastern Tribes,
Inc., and Member, Oneida Indian Nation
Good morning, Mr. Chairman and Honorable Members of the U.S.
Committee on Resources.
My name is Keller George. I am a member of the Oneida Indian
Nation's Men's Council, and President of United South and Eastern
Tribes, Inc. (USET). On behalf of the 24 member tribes of USET, I thank
you for this opportunity to present our perspectives on the current
reorganization of Indian Trust Management.
USET has played an extremely active role in and continues to
monitor the reorganization process since the Administration first
approached Tribes with the Bureau of Indian Trust Asset Management
(BITAM) vision. At that point, we stood with all Tribes across the
country in opposition to BITAM in the hopes of finding a better plan
that would more effectively meet the needs of Indian Country. USET
spent many hours analyzing the various issues of reorganization and
trust reform in an effort to provide insight and tribal perspectives on
the changes that are currently taking place and those that are forecast
in the years to come. While USET does not agree with everything that is
being implemented, we recognize that the ``status quo'' is no longer an
acceptable way of doing business.
The Administration has taken it upon themselves to make drastic and
sweeping changes to the Bureau of Indian Affairs (BIA) Programs,
Services, Functions, and Activities (PSFA's) regardless of the
opposition from Indian Country. Tribes want to participate in a joint
effort that can benefit everyone, but those attempts have been
suppressed time and time again. DOI officials stated that they have
consulted with the Tribes on various reorganization issues that are
being instituted; however, this is not totally true. Consultation is
not throwing an idea out into Indian Country, seeing a negative
response, and moving forward with the idea regardless. Consultation is
listening to tribal concerns and taking those comments into account.
DOI has made consultation into a mere ritual they must go through to
push their agenda. Negotiation is an essential part of consultation and
while you will never be able to please everyone, the majority opinion
must prevail in the end. USET believes that currently there is still
time to implement Tribal needs into the process and gain Tribal
support.
It is USET's belief that the BIA restructuring has been based more
on the National Association of Public Administration (NAPA) report of
several years ago than on the research conducted through the As-Is and
now the To-Be Process. The OST build-up is leaving very little room for
the BIA to achieve adequate staffing levels due to funding going into
OST and not into the BIA. These issues must be addressed now before the
Administration inadvertently creates a BIA so weak that it would be
easy for the Office of Special Trustee (OST) to fill the vacuum,
thereby, by taking over all trust functions and dissolving the BIA
completely.
We would ask for your consideration of the following areas of
concern and recommended solutions to make these changes soother and
more effective:
No funds should be diverted from BIA PSFA's to finance the
reorganization efforts in regards to the expansion of OST PSFA's. From
the beginning, Tribes have made it clear that the DOI should not use
program dollars to help fund the mistakes of the Administration.
Reorganization must be contingent upon new appropriations from
Congress. Taking money from BIA PSFA's will only damage the level of
service that the reform process is designed to protect. USET Tribes are
very concerned about the future of the regional office, and would
emphasize once again how important the regional level is to the daily
operation of programs. Because 90% of the eastern Tribes contract for
services from BIA, the regional office is extremely important and acts
in place of an agency level office. Many hypotheses are circulating
throughout Indian Country as to how the regional reorganization of the
BIA will actually work. There has been little direct discussion between
the federal government and Tribal Leaders regarding this level of
reorganization despite repeated requests from Indian Country. The new
Departmental Manual once again is unclear as to the entire multiple and
complex relationships expected at the regional level and below. Tribal
leaders are confused and need clarification. Will there be Trust
Officers at every regional office? Who will they answer to directly?
What will be their relationship with other BIA regional staff? What
will the relationship be like between the Trust Officers and BIA
officials? Who will have final determination authority? These are the
types of questions that Tribes need answered in order to understand the
complexity of the situation. Both Trust Services and Trust Resources
must be funded at the appropriate levels to maintain a satisfactory
level of business. USET urges the Administration not to hire new
management staff without having basic operational in place. USET is
perplexed and asks, ``How can a Trust Officer effectively oversee the
trust obligations of an agency that doesn't have the manpower and
resources to carry out those trust obligations?''
USET suggests that the staffing/hiring initiatives of OST be
paralleled with a build up of the BIA regional/agency offices in order
to bring those offices up to certain standards regarding adequate
staffing and adequate funding levels to diminish backlogs of PSFA's.
USET suggests that instead of OST hiring all the trust oversight
positions immediately, they only hire one-half of those positions in
FY2005. The Department should take the remaining funds from those
unfilled positions and ``invest'' it in the regional/agency offices.
Trust officer positions are for oversight, not management, of the
Trust. Rehabilitating the Trust requires the Department of the Interior
(DOI) to address financial management and land and natural resource
management. The current reorganization only addresses financial
management issues and will have little impact on the DOI's ability to
offer improved trust services to Tribes that have not allotted
substantial portions of their reservations. The reorganization is being
driven by the number of IIM account holders in an area, not the total
volume of trust work that is being performed. Only the OST Trust
Officers have been funded, BIA Deputy Superintendents have not yet been
authorized. The reorganization does not provide for the staffing
necessary to address the appraisals, surveys and compliance activities
required to improve the management of land and natural resources.
Reorganization is a slow process involving more than just ``staffing
up.'' USET fears that the vacuum created by the large OST staff versus
the small, inadequate BIA staff will lead OST to try to fill those
positions through their organization, thus taking the Tribes back to
the BITAM plan which has been strongly opposed by Indian Country.
Carryover funds from previous years should not be used for the
reorganization effort. The President's FY05 Budget Proposal has a
reduction of $5.4 million in program operations to ``redirect funds''
to high priority programs. USET believes that the thought process is
that the Administration can take the $5.4 million cut and use it for
``high priorities'' such as reform because the anticipated FY04
carryover funds can help sustain the operation of programs. Once again,
the Administration's ``high priorities'' are not necessarily the ``high
priorities'' from Indian Country. The Administration must not take from
the programs in hopes that there will be enough carryover to cover the
loss. Tribes must have the carryover funds for the already unfunded or
underfunded programs they administer. USET believes that the
Administration must make a concerted effort to gain new appropriations
for their ``high priorities'' rather than take from the operation of
programs.
The To-Be Processes must be phased into the reorganization efforts.
The To-Be process determined the best practices for business processes
and the resources needed to accomplish these goals. In the March 8,
2003, Federal Register Notice, OST asked for comments on The To-Be
Trust Business Model which identified five processes. Indian Country
and Tribal Leaders are unable to comment on how these multiple changes
will affect them. USET again will stress that while we support change
from the ``status quo,'' the implementation or reengineering and
reorganization must be slowed. USET suggests one process be introduced
per year over a five -ear period. allow the Department to refine
processes as they are introduced. This will also allow BIA to request
multiple year appropriations instead of large single year
appropriations from Congress.
Tribes must know how the reorganization is going to affect the
regional/agency level operations once and for all. The Administration,
the To-Be Process, and the OST have yet to determine how these upper-
level changes are going to affect the regional and agency levels. The
regional organization charts currently in place do not accurately
portray the current situation at local levels. USET Tribes were
notified of positions at the Eastern Region that will be changing their
reporting relationship directly to Central Office. No organizational
charts show these new relationships, the impact on the region, impacts
to tribal shares and budgets, and impacts to future funding levels.
Tribes cannot be expected to make comments on the reorganization where
there is no information available on which to base the comments. Tribes
are not being fully informed of impending changes. USET would propose
to work with the Administration to put into place an organizational
system that works with the unique needs of the Eastern Region.
It is time for the Federal government to be held accountable for
their trust responsibility. Indian Country must not be held at bay any
longer by pending cases in the Courts. It is critical that continuity
and accountability be established as a cornerstone of the
reorganization efforts. Indian Country must have a way to hold their
trustee accountable for actions taken that may be contrary to the
advancement of Indian people. Recent Supreme Court decisions have
concluded that the Federal government has avoided fiduciary trust
responsibilities and operated with ``bad-faith'' in its business
relationships with Indian Tribes. In United States v. Navajo Nation,
the Supreme Court stated that the Mitchell I and Mitchell II analysis
must focus on a specific right-creating or duty-imposing statute or
regulation. In this case, the Court held against imposing a trust
obligation on the government. It reasoned that the existence of a trust
relationship alone is not sufficient to support a claim for damages
under the Indian Tucker Act (28 U.S.C. ss 1505). Conversely, in United
States v. White Mountain Apache, the Court acknowledged the Statue at
issue did not expressly subject the government to fiduciary duties of a
trustee. Nonetheless, the Court determined that the Fort Apache
property was expressly subject to a trust. In so doing, the Court drew
a ``fair inference'' to find an obligation on the part or the
government to preserve the property as a trustee, and determined that
its branch of trust was enforceable by damages.
From these cases, we have learned that unless a statute or
regulation imposes a specific fiduciary obligation on the part of the
government toward Tribes and their resources, the Court will look
unfavorably on the imposition of such a duty. We have also learned that
trust principals must be clearly defined in order for the government to
be held accountable for a breach of trust duties. In a sense, Indian
Country was fortunate that the Court felt compelled to infer a trust
obligation in the White Mountain Apache decision; Indian Country was
not so lucky in Navajo Nation. The dichotomy of rationales created by
these decisions indicates that without clear guidelines and definition
of trust principles, the Court will continue to infer--or ignore as the
case may be--the government's fiduciary responsibility toward Indian
Tribes. Indian Tribes must be allowed to hold their trustee accountable
for mismanagement of their resources. We must begin by defining trust
principles that create consistency in application across all trust
activities. Tribes should no longer be forced to find remedy through
the courts.
USET Tribes support reform and understand that reorganization is
necessary for the government to fulfill its fiduciary responsibilities.
Many Tribes feel that efforts to this point have been futile and DOI is
moving forward with their own agenda. Tribes must no longer receive
ambiguous and confusing information about the reorganization process.
USET recognizes the urgent need for Tribes to be actively engaged in
the reorganization process, not just shown the end process. Future
generations of Indian people are depending on Tribal Leaders to take a
stand and approach reform with a united voice.
Once again, I would like to emphasize the great importance of
proper trust accountability and the federal trust obligation.
Efficiently operated trust programs could benefit Indian Country
greatly and we have all seen what a poorly operated trust system can
produce. Indian people have given so much to the Federal government
based on the promise of adequate management of assets through the
Trustee relationship. That relationship has been severely damaged, and
must be mended. USET stands ready to assist in the processes of mending
relationships, establishing accountability of trust, and reorganization
of the BIA. USET Tribes have the experience and knowledge to work
through these issues.
USET Tribes understand the political pressures associated with
completion of the reorganization, but we ask that the Administration
look at the far-reaching effects these changes will have on Indian
Country today and in the future.
Thank you and I would be pleased to answer questions at this time.
______
[Mr. George's response to questions submitted for the
record follows:
Response to questions submitted for the record by Keller George,
President, United South and Eastern Tribes, Inc., and Member, Oneida
Indian Nation
Responses to Chairman Richard Pombo's Questions
1. Can you expand on your comments regarding how the reorganization
is driven by the individual Indian money account holders, and why it
doesn't work for Eastern Tribes?
The current re-organization of the BIA is completely reactionary to
the IIM Account Holders and the Cobell case. The Bureau has made no
attempts to be forward-thinking or proactive in their implementation of
the re-organization. On-going procedural structure research plans have
been ignored in the process and the BIA continues to push their ideas,
not the Tribes' ideas forward. An example would be that the ``To-BE''
process is currently funded by the Office of the Special Trustee (OST)
to study the best practices for business processes within the BIA and
what staff would be needed to operate at ultimate capacity. The ``To-
BE'' study has not been complete, yet the BIA continues to move forward
with their reorganization implementation. This is not a cost effective
policy and proves that the reorganization is purely driven by
reactionary tactics and the Cobell case.
USET would like to see meaningful, long lasting change through a
reorganization of the BIA. While we recognize the importance of
identifying IN Account holders and their proper payment for the use of
their land, this is not the only issue that needs to be addressed. The
Eastern Region Tribes do not have the numerous IIM Accounts like those
areas in the-West and thankfully do not have to deal with the many
problems caused by fractionated land interests. USET wants to ensure
that all important aspects of reorganization are identified and
discussed.
2. Many Tribes want to develop trust reform plans based on factors
that are unique to them. Such trust reform plans would then be
implemented on a tribe-by-tribe or region-by-region basis, through the
local BIA agency, through a self determination contract, or through a
self governance compact. Under such a proposal, the Secretary
ultimately bears a trust responsibility for this. To what extent should
a tribe be able to develop and implement its own trust reform plan and
still hold the Secretary fully liable if something should go wrong with
its implementation?
USET has always maintained that there needs to be a set of
standardized overarching trust principles. The BIA continually refuses
to put trust principles in legislation because that would make the
Secretary directly responsible to the Tribes in a more defined way.
USET believes that as long as the overarching principles are in place,
and the Secretary's responsibilities are finally clearly defined by
law, then Tribal/ Regional implementation plans could be instituted.
The Tribal/ Regional implementation plans would need to, at the least,
meet the standards defined in the over arching principles in order for
the Secretary to maintain the trust responsibility. Of course, USET
believes that any principles developed and/or Tribal/Regional trust
plans implemented should be incorporated through meaningful
consultation with the Tribes.
Responses to Ranking Member Nick Rahall, II, Questions
QUESTION: In order for any of this reorganization plan to work
there must be excellent communication between OST staff and the BIA
staff at all levels. Do you agree? Have you seen a good working
relationship between OST and BIA thus far? For example, when Tribes
recently met with the Department on reorganization matters, how did the
Special Trustee and the Assistant Secretary for Indian Affairs
communicate with the Tribes in attendance?
It is true that the OST and BIA must learn to communicate in order
to make the reorganization a success, but the level of communication
needed depends on to whom you speak. The OST was brought into existence
for the purpose of monitoring the trust activities of the BIA. This
oversight function does not always foster great communication. There is
no protocol for communicating between agencies and many times
information about meetings is not communicated between the two
agencies, causing Tribal leaders to show up at meetings with no sign of
the important people they came to meet and discuss issues with. This
was the case at the recent DOI/Tribal leaders meeting regarding the
reorganization. Neither the Assistant Secretary nor the Deputy
Secretary for Indian Affairs were in attendance, because of a lack of
communication. The Deputy Assistant Secretary, Aurene Martin, when
asked by Tribal Leaders why she was not in attendance, stated that she
was not aware that any meeting was even going on that day. The only
person attending the meeting from the BIA was Mr. Brian Pogue. This is
just a single example of the lack of communication between BIA
officials internally and between the two organizations.
In the current reorganization process, communication between the
two offices has been viewed more as a necessary evil. Neither the OST
nor BIA have really communicated what reorganization actions they are
taking with each other. It is like they are working on two separate
projects instead of one reorganization effort. In fact the BIA, moved
forward with the reorganization effort despite the ongoing ``TO-BE''
trust reengineering efforts of the OST. The BIA has said that they are
moving forward with their plan for reorganization regardless and
whatever OST and the ``TO-BE'' recommendations come back with, they
will try to implement those changes as best they can. This is a
wasteful and sporadic method of implementing true change in the BIA.
USET believes that the BIA needs a structured and thoughtful process,
based on tribal input and good communication, in order to have a
successful BIA reorganization.
Should your office have any further questions regarding these
responses, please contact the USET office at (615) 467-1553. Thank you
for the opportunity to comment and have the USET Tribal views
considered ire this process.
______
The Chairman. Ms. Benjamin?
STATEMENT OF MELANIE BENJAMIN, CHIEF EXECUTIVE,
MILLE LACS BAND OF OJIBWE, MINNESOTA
Ms. Benjamin. Chairman Pombo and members of the Committee,
my name is Melanie Benjamin and I am the Chief Executive of the
Mille Lacs Band of Ojibwe. Mille Lacs Band is a federally
recognized tribe located in East Central Minnesota and has
enrollment of approximately 3,600 members.
It is our pleasure to provide testimony before the
Committee this morning on the Bureau of Indian Affairs' trust
reform process from the perspective of a self-governance tribe.
This morning, I will talk briefly about tribal self-governance
policy, the Federal trust responsibility, and the interplay of
the current BIA reform as it relates to the self-governance
policy and practice.
In 1990, the Mille Lacs Band of Ojibwe was one of the first
tribes to participate in a tribal self-governance demonstration
project authorized by the Indian Self-Determination Act. We
first compacted for 30 programs from the Bureau of Indian
Affairs, and today, we are compacted for all authorized BIA
programs through our annual funding agreement and provide
direct services to our membership.
We were likewise among the first tribes to negotiate a
self-governance compact for programs in the Indian Health
Service. As a general matter of policy, the Mille Lacs Band has
strongly advocated for the self-governance of all federally
supported Indian programs. The United States Federal trust
responsibility to Indian tribes has been established through
our treaties with the United States, Federal statutes,
executive orders, Supreme Court decisions, and the general
course of dealings with tribes. The Federal trust
responsibility extends a trust obligation from the United
States to Indian tribes and further recognizes a unique
government-to-government relationship between each federally
recognized tribe and the United States.
Within the Indian Self-Determination Act, provisions of
Tribal Self-Governance Act of 1994, and the Tribal Self-
Governance Amendments of 2000 provides specific statutory
protection for the trust responsibility by prohibiting the
Secretary from waiving, modifying, or dismissing the Federal
trust responsibility of the United States. The intent of
Congress to uphold its Federal trust responsibility to and the
government-to-government relationship with self-governance
tribes have not been changed by further Congressional action to
date.
The BIA exists to advance tribal interests in broad Federal
Indian policy matters and has a specific duty to administer
programs and services for the benefit of all federally
recognized tribes and their members. While self-governance
tribes like the Mille Lacs Band believe we can do a better job
to administer the same program and services to our members
through our self-governance compact, the fact remains that the
BIA has a continuing obligation to advance self-governance
interests the same as other tribes.
While the Mille Lacs Band and other self-governance tribes
have assumed more authority and control over compacted
programs, it is important to remember what self-governance laws
provide. The Federal trust responsibility of the United States
continues to apply to all tribal resources and programs, not
just those specific to trust resources or management of trust
resources.
In November 2000, President Clinton signed Executive Order
13175 that established the Federal policy of consultation and
coordination with Indian tribal governments, the policy
extended to all Federal agencies. The purpose of the
consultation policy was and is to allow for tribal input on all
matters that affect tribal interests.
When the trust reform process first began, tribes were
involved through a tribal task force, on which I was a member.
The Department suddenly dissolved the task force in late 2002
and proceeded with the trust reform without any further tribal
involvement. The action has set the tone for the trust reform
process as we see it playing out today.
Although the BIA and the new Office of Special Trustee,
OST, have conducted tribal consultation sessions throughout
Indian country on the trust reform, these sessions take place
following major policy decisions. Tribes are told what changes
have been made and what to expect from those changes. From the
tribal perspective, when a consultation takes place after the
fact of a major decision affecting tribal interests, it is not
consultation.
Last fall, a consultation was scheduled for a combined
council of the BIA regions in the Central United States.
Because the notice was very late, the Mille Lacs Band was just
about the only tribe in attendance out of the entire Midwest
United States. One has to ask what meaning tribal consultation
has if most of the affected tribes cannot be present to receive
any information.
This lack of meaningful tribal consultation is illustrative
of the mixed message that come from Interior and the BIA. On
one hand, we are told that the BIA wants to work with tribes.
On the other hand, the Department is overhauling an entire
agency and creating a new one in the process without working
with tribes at all. To tribes, the Departmental action without
tribal consultation indicates a shift back to the paternalistic
policies that appear to replace tribal self-governance and
tribal self-determination. In a trust reform process, the
consultation policy has become meaningless to tribes.
The Office of the Special Trustee was first authorized as
an oversight body for trust reform 10 years ago. Today, the OST
is a new agency with new duties and responsibilities beyond
trust reform oversight. Transferring BIA trust functions to OST
is a major component of the latest trust reform effort, which
is a quick fix to an old problem. To achieve this quick fix,
most tribes believe we were removed from the trust reform
process so the Interior could implement its changes as quickly
as possible without any interference.
For the Mille Lacs Band and other self-governance tribes,
it seems that the proposed transfer of the BIA function limits
the scope of trust responsibility in a number of ways. The
following are a few examples.
First is the fee to trust land acquisition of tribes. There
is a distinction between tribal fee lands and trust lands.
Unless land is in trust status, its treatment as a trust
resource is questionable.
Second, we will not have direct access to the proposed
integrated data system. We are told we can access the data
system if we adopt the Federal model. The Federal trust
responsibility would have the OST provide access to this data
to us in one manner or another.
Third, our annual funding agreements are with the BIA and
not the OST. We wonder whether our access to funding would be
affected when a BIA program is now under OST. As a result,
self-governance tribes face uncertainty as to the terms of our
funding agreements. One solution is to authorize self-
governance tribes to compact with OST.
These examples illustrate specific problems for self-
governance tribes which have not been fully addressed by either
BIA or OST. Under the current trust reform, the Mille Lacs Band
seriously questions what measures of Federal trust
responsibility can be expected when we believe self-governance
concerns and interests are overlooked as changes take place.
Self-governance policies and laws were designed to move the
U.S. Government away from the paternalistic policies and
practices in the administration of Indian programs. The current
trust reform is taking us back to the paternalistic policies
that leave tribes out of the process. Self-governance is being
dismantled by the changing processes by not allowing tribes to
adapt as they see fit. As it is, changes are being forced upon
tribes that we were told we must live with. This policy from
the Department of Interior is not consistent with self-
determination or self-governance policies established by law.
If the BIA and the OST were serious about wanting to work
with tribes, our concerns would be given consideration prior to
a decision, not after the fact. Working with us would result in
tribes gaining increased authority to compact for more
programs. Instead, tribes are frequently told that we cannot
compact for certain programs because they are an inherent
Federal function. As stated earlier, the Mille Lacs Band
strives to compact all of our Federal dollars for all programs.
Increased authority to compact additional programs would allow
us to work toward that goal.
The Mille Lacs Band and other self-governance tribes
continue to assert that we are willing to work together and
assist with the trust reform process. Tribes must be part of
the solution that addresses the problem involving our
interests. Until then, the paternalistic actions and policies
that are evolving under the current trust reform are moving
tribal self-governance in a direction that Congress did not
envision when it enacted self-governance.
Finally, the trust reform means taking administrative
action to limit the Federal trust responsibility of the
Department of Interior over tribal resources and assets. That
action is inconsistent with the existing Federal Indian laws
and policies that define that responsibility. The Mille Lacs
Band asserts this action amounts to a significant diminishment
of Federal trust responsibility.
On behalf of the Mille Lacs Band of Ojibwe, thank you for
your consideration.
The Chairman. Thank you.
[The prepared statement of Ms. Benjamin follows:]
Statement of Melanie Benjamin, Chief Executive,
Mille Lacs Band of Ojibwe
Good Morning Chairman Pombo, Ranking Member Rahall, and members of
the Committee. My name is Melanie Benjamin and I am the Chief Executive
of the Mille Lacs Band of Ojibwe. The Mille Lacs Band is a federally-
recognized tribe located in East Central Minnesota and has an
enrollment of 3,602 members. The Mille Lacs Band was one of the first
tribes to have entered into a self-governance compact with the United
States government. It is our pleasure to provide testimony before the
Committee this morning on the Bureau of Indian Affairs (BIA) trust
reform process from the perspective of a self-governance tribe. This
morning I will talk briefly about early self-governance policy, the
federal trust responsibility, and the interplay of the current BIA
reform and reorganization as it relates to self-governance policy and
practice.
Early Self-Governance Policy
The Mille Lacs Band of Ojibwe has struggled for many years under
changing federal Indian policies. From the beginning of the Indian
Self-Determination and Education Act of 1975, and with the shift to
tribal governments operating federal programs, the Mille Lacs Band saw
the importance of implementing these concepts. In the early 1980s, the
Mille Lacs Band government implemented a new approach to dealing with
these changing policies. Following a full review of the Band
governmental structure, the Mille Lacs Band adopted a separation of
powers governmental structure.
At the 200th anniversary of the signing of the United States
Constitution, ten tribal leaders from across the United States
recognized the importance of reviewing the tribal relationship with the
United States government. Through a series of national tribal meetings
in 1986 and 1987, it became clear that tribal governments prioritized
the reestablishment of a government-to-government relationship with the
United States, very much like the relationship in the treaty-making
era. This new direction in federal Indian policy would treat tribal
governments more like brothers with the United States, rather than
children of the great white father.
At the request of Congress, tribes developed an improved framework
and system that would better meet tribal needs at the local level. The
Mille Lacs Band and several other tribal governments responded by
developing the Tribal Self-Governance Demonstration Project, which
Congress supported and subsequently adopted into federal law. Tribes
understood this federal legislative action to mean that a more formal
relationship would exist to discuss and improve issues for tribes and
their reservations. In effect, tribes would be recognized as sovereign
governments that could address their respective education, health,
social, and economic needs. Implicit in this recognition of tribal
self-determination and self-governance was that the new federal law
would not diminish the treaty or trust obligations of the United States
to the Indian tribes.
In 1990, the Mille Lacs Band of Ojibwe was one of the first tribes
to participate in the Tribal Self-Governance Demonstration Project
authorized by the Indian Self-Determination Act. We first compacted for
thirty (30) programs from the BIA and today we are compacted for all
authorized BIA programs through our Annual Funding Agreement and
provide direct services to our membership. We were likewise among the
first tribes to negotiate a self-governance compact for programs in the
Indian Health Service. As a general matter of policy, the Mille Lacs
Band has always strongly advocated for the self-governance of all
federally-supported Indian programs.
Federal Trust Responsibility
The United States' federal trust responsibility to Indian tribes
has been established through our treaties with the United States,
federal statutes, Executive Orders, Supreme Court decisions, and the
general course of dealings with tribes. The federal trust
responsibility extends from the United States a trust obligation to
Indian tribes and further recognizes a unique government-to-government
relationship between each federally-recognized tribe and the United
States.
The federal trust responsibility has long been interpreted to be
very broad in scope and is expressly acknowledged in self-governance
laws whose policies strive to maintain, improve, and ensure the
continuation of the United States' relationship with and responsibility
to Indian tribes. These broad policies underlying the self-governance
laws make clear Congress' intent in promoting tribal self-governance as
one of the primary means to strengthen the federal trust responsibility
to tribes.
The Tribal Self-Governance Act of 1994, Title IV to the Indian
Self-Determination Act provides specific statutory protection for the
trust responsibility in Sec. 403(b)(9) by prohibiting the Secretary
from waiving, modifying, or diminishing the federal trust
responsibility of the United States. Later, Congress reaffirmed its
commitment to upholding the federal trust responsibility in the Tribal
Self-Governance Amendments of 2000 to the Indian Self-Determination
Act, by providing that ``[t]he Secretary is prohibited from waiving,
modifying, or diminishing in any way the trust responsibility of the
United States with respect to Indian tribes and individual Indians that
exists under treaties, Executive orders, other laws, or court
decisions.'' 25 U.S.C. Sec. 458aaa-6. Clearly Congress intended to
uphold its federal trust responsibility to and government-to-government
relationship with self-governance tribes, a policy which has not been
changed by further congressional action to date.
The BIA exists to advance tribal interests in broad federal Indian
policy matters, and whose specific duty is to administer programs and
services for the benefit of all federally-recognized tribes and their
members. While self-governance tribes like the Mille Lacs Band believe
we are better able to administer the same programs and services to our
members, via our self-governance compacts, the fact remains that the
BIA has a continuing obligation to advance tribal self-governance
interests on par with those of all other tribes.
While the Mille Lacs Band and other self-governance tribes have
assumed more authority and control over compacted programs, we must
emphasize what the statute itself emphasizes: The federal trust
responsibility of the United States continues to apply to all tribal
resources and programs, not just those specific to trust resources or
management of trust resources. Only on this condition, and based upon
this understanding of the federal trust responsibility, has the Mille
Lacs Band chosen to enter into self-governance compacts in order to
better serve our members.
Trust Reform and Reorganization Impacts to Self-Governance
Tribal Consultation
In November 2000, President Clinton signed Executive Order 13175
that indicated a federal commitment to tribal sovereignty and the
formalizing of a government-to-government relationship between
federally-recognized tribes and the United States. The policy of
consultation and coordination with Indian tribal governments extended
to all federal agencies. Where it concerns tribal consultation, the
Executive Order provides the following:
Sec. 3. Policymaking Criteria. [A]gencies shall adhere, to the
extent permitted by law, to the following criteria when
formulating and implementing policies that have tribal
implications:
...
(c) When undertaking to formulate and implement policies that
have tribal implications, agencies shall:
(1) encourage Indian tribes to develop their own policies to
achieve program objectives;
(2) where possible, defer to Indian tribes to establish
standards; and
(3) in determining whether to establish Federal standards,
consult with tribal officials as to the need for Federal
standards and any alternatives that would limit the scope of
Federal standards or otherwise preserve the prerogatives and
authority of Indian tribes.
The trust reform process and reorganization seem to be in a
perpetual state of motion as a result of Cobell litigation. Initially,
tribes were part of the process through a task force of which I was a
member of. Although that task force attempted to develop a tribal
solution, the Department of Interior suddenly dissolved the task force
and proceeded with the trust reform process without any further tribal
involvement. That action has since set the tone for the trust reform
and reorganization as we see it playing out today, creating an
atmosphere of distrust, sporadic paralysis, and uncertainty.
Consequently, the Interior and BIA tribal consultation policy has
become, with all due respect, meaningless to tribes who reasonably
expect to have a voice in policy matters and decisions that affect us.
Although the BIA and the new Office of Special Trustee (OST) have
conducted ``consultation'' sessions throughout Indian Country on the
trust reform and reorganization, the sessions are more accurately
characterized as informational updates that tell tribes what changes
have been made (as the result of prior policy decisions) and their
effects upon tribes. From the tribal perspective, if a ``consultation''
takes place after the fact of a major decision that directly affects
tribal interests, it is not a consultation. At most, it is an
informational briefing.
In many instances, federal notices to tribes for BIA and OST
consultations have been so late that tribal attendance was abysmal. On
one such occasion last fall, a consultation was scheduled for a handful
of the BIA regions in the central United States. The Mille Lacs Band
was just about the only tribe in attendance out of the entire Midwest
region. One has to ask what meaning tribal consultation has if most of
the affected tribes cannot be present to receive any information.
This lack of meaningful tribal consultation is illustrative of the
mixed messages that come from Interior and the BIA. On one hand, we are
told that the BIA wants to work with tribes. On the other hand, the
Department is overhauling an entire agency, and creating a new one in
the process, without working with tribes at all.
Where it concerns the BIA's management of trust resources, the
Cobell litigation has shown that the Interior and BIA have failed to
properly manage resources held in trust for tribes. It is ironic that
tribes are being asked to blindly trust Interior and BIA decisions on
how to repair the damage to trust assets when the original damage was
caused by Interior and the BIA. It makes no sense at all, unless the
policies of federal paternalism have returned to replace tribal self-
determination and self-governance.
The Office of the Special Trustee
The Mille Lacs Band first points out that Congress never intended
for the Office of Special Trustee (OST) to be a permanently-funded
operational program. The OST was initially authorized by the American
Indian Trust Fund Management Reform Act of 1994 (Public Law 103-412) as
an oversight body that would oversee and coordinate departmental
reforms. Today, the OST is assuming all trust functions and will
administer a number of programs. It is from this that the OST has drawn
its statutory authority, and the expansion of OST duties and
responsibilities is being created through administrative rather than
legislative action.
Despite this lack of congressional authority, a major component of
the latest trust reform effort is based on a transfer of many BIA
functions to the Office of Special Trustee. In the opinion of many
tribes, this transfer of functions to a new agency with new duties and
responsibilities amounts to a quick fix to a long-standing problem
within Interior and the BIA that is taking place too quickly for any
real effective change to occur. It is the further opinion of many
tribes that this is why tribal involvement was removed from the
process, so that the Department could implement its changes as quickly
as possible to satisfy the Cobell sanctions imposed through court
orders.
Caution must be considered with this latest BIA reorganization.
History tells us that the latest trust reform and reorganization
proposal is the most recent in a long line of failed proposals. Dozens
of reorganization plans have been unfurled with great fanfare over the
years and countless millions of dollars have been consumed studying and
procuring and preparing them. None have been implemented with any
measure of success. None. No one has considered that it may be the
tribal beneficiaries themselves who may ultimately develop a successful
solution to the trust mismanagement problem. This would be consistent
with the premise of tribal self-governance--that those who govern best
are those who govern closest to the people most affected.
One concern to the Mille Lacs Band and other tribes is that the
transfer of functions proposed by the Department also appears to be
limiting the scope of the trust responsibility to more limited duties
and to promoting paternalistic policies. An example of this is the fee-
to-trust land acquisition of tribes. Land acquisition is a major
objective for many tribes, yet under the trust reform process there is
a distinction between tribal fee lands and trust lands. The problem is
that until a piece of tribal land acquires trust status, it would not
fall under the OST's responsibilities and its treatment as a trust
resource is very questionable.
Placing tribal lands into trust has become very difficult for
tribes in recent years, and so there is a growing concern for the Mille
Lacs Band and other tribes that Interior is working to minimize its
overall trust responsibility to tribes (i.e., less trust resources to
manage means less trust responsibility to that resource and its
beneficiary). The net effect of separating fee lands and trust lands
between the BIA and OST is that tribal priorities of land acquisition
and increased self-governance of those lands is undermined and
generally not being supported by the very agencies charged with acting
in our best interests.
A second concern to the Mille Lacs Band concerns the proposed
Integrated Data System which the OST is relying upon as the basis for
this entire trust reform process, a system that the Mille Lacs Band and
other self-governance tribes will not have access too. The OST
officials have told compacted and contracted tribes that we do not have
to adopt the proposed model, but that doing so will ensure access to
the system and the information within that system. A recommendation of
this sort requiring self-governance and contracting tribes to adopt a
system in order to have information access undermines self-
determination policies and promotes a paternalistic policy that leaves
tribes with no choice in data information access. Surely the technical
capacity is available for a variety of tribal models and approaches
that can create access to the data.
A third concern for the Mille Lacs Band is the fact that our Annual
Funding Agreements are with the BIA and not the OST. We have questions
whether our access to funding will be impacted if a program used to be
under the BIA but is now in the OST. This issue has not been addressed
by either the BIA or OST, and consequently self-governance tribes face
uncertainty as to the terms of our funding agreements when a program
has been transferred to the OST.
Related to the matter of our funding agreements is that Central
Office funds have been withheld from our Annual Funding Agreements, and
therefore self-governance tribes will not be able to participate in the
trust reform efforts insofar as they involve an expansion of funding
for Central Office programs, functions, services, and activities. These
problems raise questions about the trust reform's effect upon the self-
governance process as a whole. Again, the issue is not being directly
addressed.
A fourth concern for the Mille Lacs Band and other self-governance
tribes is that we want the option to compact with the OST in light of
the repeated messages that changes made under trust reform will
continue to move forward and will remain so. If true, self-governance
policy must remain consistent and authorize tribes to compact for the
same programs that were once in the BIA but have been transferred to
the OST. In this manner, self-governance policies and interests would
be preserved rather than undermined.
With these examples illustrating specific problems for self-
governance tribes, the Mille Lacs Band seriously questions what measure
of federal trust responsibility can be expected from a new departmental
agency with our trust resources and assets under our self-governance
compacts. Because these issues, and others, have not adequately been
addressed by the BIA and OST, self-governance tribes have come to
believe this latest trust reform process is bypassing our particular
concerns and interests as changes continue to be implemented.
Conclusion
Self-governance policies and laws were designed to move the United
States government away from paternalistic policies and practices in the
administration of Indian programs. Today, self-governance is being
dismantled by the changing processes under the ongoing trust reform and
reorganization. Self-governance was designed to allow tribes to adapt
to changes as they see fit, but the latest trust reform is imposing
changes upon tribes that we are told we must live with. Such a policy
from within the Department of Interior is not consistent with self-
determination or self-governance and the reorganization is removing
tribal participation out of the entire trust reform process.
If the BIA and OST were serious about wanting to work with tribes,
our concerns would be given consideration prior to a decision, not
after the fact. Working with us would result in tribes gaining
increased authority to compact for more programs. Instead, we are
frequently told that certain programs are not compactable due to their
status as an untouchable, inherently federal function. As stated
earlier, the Mille Lacs Band strives to compact all of our federal
dollars for all programs. Increased authority to compact additional
programs would allow us to work towards that goal.
The Mille Lacs Band and other self-governance tribes continue to
assert that we are willing to work together and assist with the trust
reform process. Tribes must be part of the solution that addresses the
problem involving our interests. Until then, the paternalistic actions
and policies that are evolving under the current reorganization plan
are moving tribal self-governance in a direction that Congress did not
envision when it enacted self-governance.
Further, any administrative action taken to limit the federal trust
responsibility of the Department of Interior as part of the trust
reform process is also inconsistent with existing federal Indian laws
and policies that define that responsibility, which the Mille Lacs Band
would assert amounts to a significant diminishment of the federal trust
responsibility in effect.
On behalf of the Mille Lacs Band of Ojibwe, thank you for your
consideration.
Mii Gwetch.
______
The Chairman. I thank this entire panel for your testimony.
It was extremely informative.
I know I have a number of questions for this panel, but in
lieu of the fact that we have been called over to the Floor for
a series of votes, I will submit those to you in writing, and
if you can answer those in writing for the Committee, I will
hold the Committee record open.
With the indulgence of my colleagues, because this hearing
did run longer, we have been called for a series of votes. It
is probably going to be about an hour to an hour and a half
before we are back. Seeing that, I am going to request that if
my colleagues ask their questions in writing, as well, those
can be submitted to the panel.
Mr. Pallone. That is fine, Mr. Chairman. I appreciate it.
If I could just say, though, that I know Mr. Frazier mentioned
this GAO request for a study of certain practices at OST that
Senator Tim Johnson has requested, and I just wanted to say
that I would like to join that and I will talk to Senator
Johnson about joining that, because I think that that makes a
lot of sense. But I would like to ask some additional questions
in writing and I appreciate the opportunity.
The Chairman. Thank you, and I want to thank the panel for
your testimony. I apologize for the length of the hearing, but
I tried to give you all a lot of time for your oral testimony.
The questions will be submitted to you in writing, if you could
answer those in a timely fashion so they can be included in the
record.
Thank you very much. The hearing is adjourned.
[Whereupon, at 12:16 p.m., the Committee was adjourned.]
[A statement submitted for the record by Mr. Rahall
follows:]
Statement of The Honorable Nick J. Rahall, II, a Representative in
Congress from the State of West Virginia
Mr. Chairman, it is with eager anticipation that I believe we all
wait to hear more about the latest, greatest, be-all, end-all, fix to
the Indian trust fund mismanagement saga.
The Interior Secretary has decided she will take a chunk of
authority from the BIA and slide it over to the Special Trustee, then
move some management boxes around at the agency offices, create several
new one-size-fits-all boxes, and pull some strings to direct different
line authorities.
Keep an eye on those boxes and that moving authority because
somewhere under this shell game lies the trust responsibility, self-
governance contracting, and the government-to-government relationship
worked on and fought out for over one hundred years.
I am here to suggest that magic wands or sleights of hand will not
adequately address the problem. And without the strong support of
Indian country, this reorganization is bound to fail.
It is true that after being prodded by Congress several high-
ranking officials of the Department spent months working with Indian
tribes on reform matters.
It is also true that these officials walked away from these
negotiations, waited until Congress adjourned, and then sought a
reprogramming of $5 million to support the reorganization.
Reaching consensus with Indian country on this issue is something
that I feel strongly about.
These tribal leaders are not wide-eyed children holding cotton
candy, ready to accept the next administrative ruse as pure magic. They
are hardworking, elected governmental leaders who know what the
specific needs are of their tribe and expect nothing less than the
right to have those needs addressed and respected by our Federal
government.
Moving full speed ahead with this massive restructuring of the
trust relationship will no doubt get the Administration through to the
next election busily claiming it is fixing the trust fund management
problems.
But when the political leaders of this Department fold up their
tent and move on, the mess left behind will once again be left to those
affected by this situation in Indian Country to try and clean up.