[Senate Hearing 108-466]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-466
 
                     REORGANIZATION WITHIN THE BIA

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                                   ON

  PROPOSED REORGANIZATION OF MAJOR AGENCIES AND FUNCTIONS RELATED TO 
   INDIAN TRUST REFORM MATTERS WITHIN THE DEPARTMENT OF THE INTERIOR

                               __________

                             MARCH 10, 2004
                             WASHINGTON, DC


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                           WASHINGTON : 2004
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                      COMMITTEE ON INDIAN AFFAIRS

              BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

                DANIEL K. INOUYE, Hawaii, Vice Chairman

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

         Paul Moorehead, Majority Staff Director/Chief Counsel

        Patricia M. Zell, Minority Staff Director/Chief Counsel

                                  (ii)


                            C O N T E N T S

                              ----------                              
                                                                   Page
Statements:
    Anderson, Dave, assistant secretary for Indian Affairs, 
      Department of the Interior.................................     7
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      chairman, Committee on Indian Affairs......................     1
    Daschle, Hon. Thomas A., U.S. Senator from South Dakota......    11
    Frazier, Harold, president, Great Plains Tribal Chairman's 
      Association................................................    25
    Hall, Tex, president, National Congress of American Indians..    16
    Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice 
      chairman, Committee on Indian Affairs......................     1
    Marshall, Clifford Lyle, chairman, Hoopa Valley Tribal 
      Council....................................................    27
    Shirley, Joe, president, Navajo Nation.......................    20
    Swimmer, Ross O., special trustee for American Indians, 
      Department of the Interior.................................     2
    Thomas, Edward, president, Central Council Tlingit and Haida 
      Indian Tribes of Alaska....................................    23

                                Appendix

Prepared statements:
    Anderson, Dave (with attachment).............................    59
    Frazier, Harold..............................................    37
    Hall, Tex (with attachment)..................................    44
    Marshall, Clifford Lyle......................................    33
    Shirley, Joe.................................................    35
    Swimmer, Ross O. (with attachment)...........................    59
    Thomas, Edward...............................................    77


                     REORGANIZATION WITHIN THE BIA

                              ----------                              


                       WEDNESDAY, MARCH 10, 2004


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
485, Russell Senate Building, Hon. Ben Nighthorse Campbell 
(chairman of the committee) presiding.
    Present: Senators Campbell and Inouye.

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

    The Chairman. The committee will come to order.
    Good morning and welcome to today's oversight hearing on 
what is going on within the Department of the Interior 
regarding trust management reform.
    In June 2003, Senator Inouye and I laid out our vision for 
overcoming the challenges before us in trust matters. The four 
elements that we envision are enacting the Indian probate 
reforms to help stop land fractionation; launching a large-
scale buy-back of fractionated lands to return those parcels of 
lands to the tribes; settling the Cobell v. Norton case; and 
building a forward-looking trust management system that is 
state-of-the-art and can be tailored to the many differences 
between tribes in terms of their needs, and one that respects 
Indian self-determination. I am happy to see that on the first 
three of these elements, probate reform, the buy-back and 
settling Cobell, we have indeed been making progress.
    Today's hearing is about the last element and we will hear 
from the Department and Indian country on whether the 
reorganization is going the right direction or not.
    In the interests of time, I will submit my complete 
testimony for the record and yield to Senator Inouye for any 
opening statement he may have.

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

    Senator Inouye. I thank you, Mr. Chairman.
    I, too, in the interest of time would like to submit my 
full statement for the record. However, I wish to assure the 
witnesses today that I reviewed their submissions to their 
committee following the trust summit that was held on February 
25. I think it is safe to say that there is strong opposition 
in some regions of Indian country to the Department's proposal.
    Mr. Chairman, I also want to say on behalf of our colleague 
Senator Johnson, who is at home recuperating from surgery, that 
he wants to assure the witnesses today that he will reading all 
of their testimony and he is sorry that he cannot be here in 
person today.
    So with that, Mr. Chairman, thank you very much.
    The Chairman. Senator Daschle has requested time. He has a 
very, very tight schedule, so we may interrupt the first 
panel's testimony when he comes in, if you do not mind. Until 
he gets here, we will go ahead and proceed with panel 1, Dave 
Anderson, the aAssistant secretary of Indian Affairs. He is 
accompanied by Ross Swimmer, the special trustee for the 
American Indians.
    If you would like to go ahead, Dave, please proceed. Your 
full written testimony will be in the record. Are you going 
first, Ross?
    Mr. Swimmer. Mr. Chairman, if you do not mind, I would like 
to proceed with a review of where we are with the different 
reform initiatives, and Secretary Anderson would follow then 
with some comments that he would like to provide to the 
committee as well.
    The Chairman. That would be fine.
    Mr. Swimmer. We have a joint statement that was prepared 
and we offer that to the committee for its acceptance. We would 
like to have that put into the record.
    The Chairman. Your complete testimony will be included in 
the record.

  STATEMENT OF ROSS O. SWIMMER, SPECIAL TRUSTEE FOR AMERICAN 
      INDIANS, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC

    Mr. Swimmer. Mr. Chairman and Senator Inouye, it is a 
pleasure to appear before you today.
    We appreciate the opportunity given us to present at these 
hearings and to inform the Congress on the progress that we are 
making regarding the subjects that you discussed in your 
opening statement, probate reform, land consolidation, the 
Cobell matter and the reform of the fiduciary trust.
    I want to thank the committee and I want to recognize the 
extraordinary work being done by the committee and the staff of 
the committee to develop the uniform probate bill and to 
resolve many of the problems that have plagued us since the 
2000 amendments on the Indian Land Consolidation Act. There is 
probably nothing that is more important in terms of trust 
reform than figuring out how we can resolve fractionation, the 
buy-back at least, or the re-consolidation of many of the 
fractionated land interests held by tens of thousands of Indian 
individuals in Indian country.
    This has been an extraordinary work that has been done by 
the committee staff. We recognize that and we think we are 
making tremendous headway in getting legislation that is going 
to substantially improve on the current operations. We have a 
few concerns yet about the bill, but we feel that those can be 
resolved and we appreciate the opportunity of working with the 
staff on this committee because it is extremely important.
    Mr. Chairman, in March 2003 the first comprehensive trust 
management plan was developed by the Department of the Interior 
to address those issues that were cited by the Cobell court for 
almost 8 years prior. It was a requirement of the special 
trustee in the 1994 legislation to develop such a comprehensive 
plan. It was done and it followed in the footsteps of a 1-year 
long consultation that was held with tribes, many, many 
meetings throughout the country attended by the highest level 
officials in the Department of the Interior.
    Several components of the comprehensive plan include, 
first, the organizational structure or realignment, as we like 
to say, of some of the offices within the Department of the 
Interior, within the Bureau of Indian Affairs [BIA], and within 
the Special Trustee's office. The realignment is there to focus 
on the need for resources to reform the fiduciary trust 
management. Where those resources are to be placed is 
critically important.
    We are trying to put them where the need is greatest at the 
local agency, but at the same time within the BIA to create a 
clearer focus on the fiduciary trust obligations of the 
Government; to segregate those trust operations, if you will, 
from other service bureau operations and from the education 
operations within the BIA that have already been separated out 
for purposes of greater focus on those particular issues.
    We think that the streamlining that is being done within 
the BIA, having direct line authority for trust operations from 
the agency, with deputy superintendents reporting to deputy 
regional directors, reporting to senior officials in the 
central office for trust operations is a significant 
improvement so that people understand where they are in the 
structure and what their responsibilities are, and what they 
are supposed to be doing.
    The structure also includes an addition to the Office of 
the Special Trustee in the form of fiduciary trust officers. 
These are positions that have been criticized by some as, well, 
they are not necessary, they are just additional management, 
they are people who are not there really to perform day-to-day 
activities.
    There is nothing further from the truth. We have now 
scattered throughout all of the agencies individual Indian 
money management clerks who are basically supervised out of 
Albuquerque. That is not a good way of doing business. Much of 
the work that has to be done at the agency offices has to then 
be approved by someone in Albuquerque. We hear this regularly.
    Well, it had to go to Albuquerque; it had to go to the 
central office; it had to go to the regional office.
    The idea of having trust officers and deputy 
superintendents for trust at the agency level is so that 
nothing has to go out of that agency. Decisions can be made 
right there. The trust officers would have the delegated 
authority to sign off on matters that previously would have to 
go up the chain to get approval by a higher level.
    In addition, the trust officers are what I call worker 
bees. They are not there to manage just the IM clerks. They are 
there to provide access to beneficiaries. So when a beneficiary 
walks into the agency office, they are able to get their 
questions answered. They are able to get information on their 
land accounts, on their financial accounts. They are able to 
ask questions, when is my check due; what happened to my last 
check; how much land do I own; where do I own land; someone in 
my family just died, what is the status of the probate.
    The trust officer, like a trust officer in a commercial 
operation, will we hope with the technology available, and even 
without it, manually, be able to search the records to find 
that information and provide it to the beneficiary.
    In addition, as issues come up at the agency that may 
require approval by a trust officer or superintendent, that 
approval can be made right there. There may be spending plans, 
for instance, for miners that need to be approved. Today, they 
go in some instances all the way to Washington. We are hoping 
to get that resolved right there at the agency.
    Other initiatives involved in the plan include new funding 
requested to support the BIA agency operations, as I said, with 
the addition of the trust officers, deputy superintendents and 
the support staff. Nearly all of year 2002 was spent 
documenting trust business processes. The one thing that had 
not happened previously as we worked on trust reform and as was 
ordered by the court, was an assessment of where we are now in 
the process; how does fiduciary trust work; how do we lease the 
land; how do we lease the minerals; how do we collect revenues 
that are due from the leases of the land; how do we cut the 
timber; how do we cruise the timber; how do we account for the 
timber; what do we do after it is cut; how do we do our 
financial operations; what happens when money is collected; 
does it go immediately into the bank; is it held at the agency; 
does it have to be mailed to the regional office.
    All of these kinds of issues we said we have to know how 
business is done today and that is what we called the ``As-Is'' 
trust business processes. We spent 2002 mapping those trust 
business processes. Virtually 1,000 pages of material came out 
of that, where we went out to every region, most of the 
agencies and the tribes. We said, we want to know how you do 
business, literally from moving this piece of paper to this 
person to that person; where do you go when you go out to 
cruise timber; who does it; what are the certifications 
required; what kind of lease people do we have; what is 
required if you are approving a farm and ranch lease; what kind 
of skills are necessary; and who is doing the job today.
    After we completed that exercise in year 2003, we began the 
effort of creating a model that we call the ``to be'' model. We 
went back to the same people and said, you have told us how you 
do it and here is how we have mapped it out. Now, you have 15 
steps to do this activity; can we do it in five steps; can we 
reduce either through technology; either through better 
training or some other activity; can we cut out many of these 
steps that it takes to get from A to B to C to D?
    What we have found is that there is great receptivity out 
there to do things better and to do things in a much more 
organized and standardized way within the BIA and the Special 
Trustee's Office. Such things as probate, leasing, mineral 
production, accounting, ownership, information technology, 
records management, some of the very fundamental things it 
takes to run any business, but particularly a trust business, 
are the kinds of things that we are talking about reengineering 
in the ``to be'' process; things as simple as what is a records 
retention schedule.
    This is a big issue in the Cobell case. They said that over 
the years, the Bureau of Indian Affairs did not keep its 
records very well. We did not have a system of records. We did 
not have retention schedules. We did not have anything that 
tells a superintendent, here is how long you are supposed to 
maintain this particular record. We do have those things now 
and they came about because of the reengineering that I am 
talking about, the things that we have done.
    One thing I do want to emphasize, however, is that for the 
most part the reengineering of the trust business processes in 
the Department of Interior are internal to the operations of 
the Department. The idea is to improve the overall fiduciary 
trust management of the Department of the Interior, whether it 
is Minerals Management Service, the Bureau of Land Management, 
the USGS, BIA, Special Trustee, Office of Hearing and Appeals. 
Whoever touches trust, we are trying to reengineer where 
necessary to improve the process that we use now to administer 
that trust.
    This is not to say, nor have we proposed in any form or 
manner, that an Indian tribe must adopt our business process. 
We recognize that Indian tribes have a unique position in the 
management of their trust assets when they accept that 
responsibility. They may have systems that work extremely well 
on their reservation, yet they may not be adaptable to the 
universe at large, whereas the Bureau of Indian Affairs and 
Special Trustee in the Department is looking at it nationwide.
    We are trying to work out the processes that work across 
the board, making allowances for those unique instances through 
law, regulation or tribal statute, that may require a 
particular way of doing business in a particular area, but the 
tribes are still able, and will continue to be, to adopt the 
systems that they think fits their way of doing business.
    Trust is only one of the areas the tribes operate. They are 
in economic development. They are doing things in social 
services. Tribes are out building roads. They are doing 
educational activities. They may have systems that work in a 
unified manner that they use for their trust business processes 
as well. We do not have any intention of asking them or forcing 
them into a process that we may choose that works for the 
Bureau or the Special Trustee.
    It is not to say that those systems are not available. One 
example of that would be the new title system that we are 
developing now. We want a title system that allows a person to 
go into the system, look up a name, and find out what they own. 
That sounds pretty simple. You would think we could do that 
today. Well, we almost can on a case-by-case basis, but give me 
400,000 names, it would take a long time.
    We have people that own land on many different 
reservations. I can go into a title plant in Anadarko and I can 
tell you who owns what in Anadarko. But that person may own 
land on Rosebud. He may own land in the State of Washington. He 
may own land out in Arizona. Those will not show up on the 
title plant in Anadarko. The title plant and the title system 
that we are implementing right now and hopefully will have 
fully converted by the end of the year or shortly thereafter, 
will allow us to go in and look at the nationwide ownership and 
be able to do those things that are basic to a beneficiary's 
needs, where do you own land; what is the legal description; 
how much do you own; what are the encumbrances against it; if 
it is leased, how much money is coming in on it; whether it is 
in Rosebud, South Dakota; whether it is in the State of 
Washington; or whether it is in New Mexico or Arizona.
    The tribes most likely would want to align their title 
system if they are operating one, and we have a couple that do, 
with that title system so they could have the same ability, 
because people on their reservation own property on other 
reservations as well. There may be other areas where the tribes 
would want to join our system, so to speak, but that is their 
choice. I might add, however, that we will continue to require 
the tribes who operate or manage fiduciary trust activities, to 
meet the same trust standards required of the Secretary when 
those tribes assume responsibility through contract or compact. 
The organizational structure that has been the subject of much 
discussion in the last two years is now in place. There is no 
such thing as stopping organizational realignment or 
reorganization. It is done. Most of the remaining jobs at the 
agencies that the trust officers and some of the deputy 
superintendents will be filled by the end of this calendar 
year. They are presently being advertised on the street right 
now.
    The purpose of this organizational alignment that we have 
chosen for the BIA and Special Trustee and other Interior 
offices is to create an organization that is transparent to the 
beneficiaries of the trust, yet provides beneficiaries with the 
services not previously available. When I say ``transparent,'' 
what we want is when a beneficiary walks into an agency office, 
they do not go to the OST or the BIA or the MMS. When they walk 
into the agency office, they ask a question and they get an 
answer. They do not care who that particular person is being 
paid from, or what budget. They want an answer to a question. 
That is what we want to give them. So we do not want this 
division to be apparent. We want it to be a team approach. I 
think that Secretary Anderson has fully committed to that, as 
previously others in the BIA.
    This did not happen easily, this organization that we are 
talking about. Thousands of hours of meetings and countless man 
hours have brought us to the point where we truly believe that 
the trust initiatives that I have discussed are what we must 
have if we are to correct the problems of trust management and 
move this trust program into the 21st century.
    We do not want to stop there. We want the tribes to enjoy 
the benefits of these initiatives, including the organization. 
They also spent considerable time attending consultation 
sessions, reading the thousands of pages of the ``as is'' and 
the thousands pages of the ``to be'' reports, and providing us 
with valuable comments. We also recognize the fear of change 
and that not everyone is likely to get on board until they see 
the evidence that our trust initiatives will do the job.
    We also recognize that there is a finite amount of money to 
spend for anything. While I am convinced that the money has not 
been taken from existing service programs to fund trust reform, 
one cannot help but wonder whether $109 million as requested 
for historical accounting is not affecting the budgets of all 
Interior programs.
    We are very grateful for the role this committee has played 
to help during the Cobell to bring the parties to the mediation 
table. We embrace this effort and we believe it is an 
opportunity to resolve the accounting issue, which even the 
plaintiffs have publicly stated they do not really want. Again, 
your help with this process is greatly appreciated.
    I might add that several of the tribes that have been most 
vocal about the proposed trust initiatives and trust reform are 
also those tribes that have lawsuits pending against us for 
breach of trust. The status quo is not the answer before and it 
is not the answer now. Well thought-out planned initiatives 
that have gone through an extensive consultation process are, 
we believe, the way to have true trust reform. We believe we 
have done that. We have spent 2\1/2\ years doing just that, 
careful planning; lengthy consultation; meetings after meetings 
throughout Indian country; engaging tribes; engaging employees 
and beneficiaries in this process.
    We appreciate the time the committee has given us this 
morning and again I compliment the committee and its staff on 
the work it is doing on trust reform. I would be pleased to 
answer questions, or Secretary Anderson may make his statement 
at this time.
    [Prepared statement of Mr. Swimmer appears in appendix.]
    The Chairman. Thank you, Ross.
    Mr. Assistant Secretary, if you have comments go ahead and 
proceed.

  STATEMENT OF DAVE ANDERSON, ASSISTANT SECRETARY FOR INDIAN 
      AFFAIRS, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC

    Mr. Anderson. Thank you. Mr. Chairman and Vice Chairman 
Inouye and other members of the committee and the tribal 
representatives here, good morning.
    First of all, I would like to start out by saying that I am 
grateful for the support that everyone in this room has shown 
me in support of my new position. I thank you all for that.
    Today, we are here to discuss a major effort on behalf of 
the BIA and the Office of Special Trustee to meet the need for 
a change within the BIA to provide better services to the 
tribes. While I may be new at this since I have been on board 
only for a few weeks, a lot of my time has been spent with the 
staff in reviewing all of the work that has been done before my 
time, to better understand this reorganization.
    One of the things that I have come to realize is that 
change has to happen. In just watching the day-to-day 
activities, many times I have stopped and asked, why are we 
doing things like this? Another one of my questions is, has 
this been the same for other assistant secretaries who have 
been here before me? And then I asked, at what point do we stop 
the merry-go-round and call time-out and say things have to 
change? Because many times when I am looking at how things get 
processed, it is no wonder that sometimes things take 6 months 
to 1 year to go through the system.
    I really believe that we have a responsibility to Indian 
tribes as well as Indian individuals to provide services the 
same way that I am used to providing services in the outside 
world. I believe that can happen. I believe that the people 
within the BIA and the Office of Special Trustee all have a 
recognition to provide better services in their heart. I 
believe that we all understand that change has to happen.
    In better understanding the Cobell lawsuit, many of the 
problems that have been pointed out by this case is that many 
times in the past it has been difficult to identify who 
specifically was responsible to carry out these tasks, which is 
one of the reasons why I think things appear sometimes to be 
mismanaged. I really believe that in looking at this 
reorganization that we are and have attempted to identify 
positions that would be specific to providing trust services to 
tribes and individuals in a timely manner and in an organized 
fashion, where we can provide the best services possible.
    One of the most important things that has come out of this 
reorganization is better computer systems for accountability. I 
am amazed as I go through my daily activities, how many times 
our different regions are on different automated systems. Then, 
I am even more amazed at how many of the different departments 
within the agencies are on different automated systems. I 
really believe that this reorganization provides the 
standardization that we need to see come into play in order for 
us to enter the 21st century.
    What has happened in the past can no longer continue. The 
BIA, I believe when I came on board that historically there has 
almost been a certain mustiness to this thing, and things have 
always been done this way. There is a good-old-boy system of 
doing things and things have worked like this for many years; 
why do we have to change? This is often the comment that I 
hear, well, things are working fine out here in the field; why 
do you have to change it up there, because you do not really 
understand what is happening out here, and things have been 
going on all right. But in fact, when we look at the picture on 
the whole, things have not been happening for the benefit of 
Indian people the way they should have.
    I think change, at times, is difficult. It has been said if 
you always did what you always did, you are always going to get 
what you always got. And then a lot of us when looking at the 
way we do business, people often shake their heads at the way 
we have done business. It reminds me of the definition of 
insanity. If you do the same thing day in and day out and 
expect different results, it is going to result in insanity.
    I think for too long we have been doing the same things day 
in and day out, and expecting different results. Tribes have 
come to us and have asked us to be more accountable. Tribes 
have asked us to provide services in a more timely fashion. We 
have not been able to do this.
    I believe that standardization has to become a way of life 
for us. We have to be able to communicate with our different 
offices out in the field. I have talked with tribal leaders and 
they have commented many times that we do not believe that we 
should be standardized because we are different; our needs are 
different; we are different people here; our regions are 
different. I understand that. We are not trying to standardize 
tribes, but we do have a need to standardize the computer 
systems that we communicate.
    I really believe that today in this age of change we have 
seen more change happen globally in an unprecedented fashion 
than we have ever seen before. We are living in a day of change 
where more change is happening in 1 day of your life than in 10 
years of your parents' lives. I really believe that today we 
have to be about the business of change. We have to understand 
change so that we are no longer victims of change, but we 
become the architects of our destiny.
    I really believe that today we need to bring uniformity. We 
need to bring standardization of the computer systems that will 
provide us the accountability so that we can provide better 
services to our tribes.
    Is this change good? I believe it is. Does everyone agree 
with this change? No, I think the answer could be very 
definitely no. You will hear testimony where it is. But the one 
thing that I know today is that, again, we must be about the 
business of change. I really believe that the people who have 
worked many long hours to try and figure this out, in their 
hearts believe that we are doing the right things.
    I believe that we have listened to the tribes. It is very 
difficult to take what some tribes think is appropriate for 
them in one area, and what other tribes believe is appropriate 
for them in another area, and then try to bring it all together 
and make sense. It has been very difficult.
    Today, I believe that what we have to offer has been the 
best that we have been able to do to bring this all together so 
that we can bring about the change we all recognize needs to 
happen. With that, I do not believe that this is the end of it. 
I believe there is tweaking that has to go along with it, and I 
believe that we are open to listening. I believe that we are 
open to working with the tribes so that we can make the work 
that we have to do be appropriate for what has to happen out 
there.
    I believe that in my new position and my new job that one 
of the things that I represent is the change that has to happen 
in Indian country. When I came on board, I said, what am I 
going to do differently than what has been recognized by the 
other assistant secretaries? I believe there has to be a breath 
of fresh air, to be about the business of change.
    When I go out and start visiting with the tribes, that is 
one of the things that I make sure that I do is to not only 
talk to tribal leaders, but get out into the school systems and 
let our Indian youth know, because they are the leaders of 
tomorrow, that in this great country we live in, that as Indian 
people our children can have dreams, and they can accomplish 
their dreams, and they believe in themselves. If they are going 
to believe in themselves, they have to understand that they 
have to stop the cycle of what has been happening heretofore. 
Today is a brand new day, and today if things are going to 
change, we have to be about the business of change.
    Thank you for your time in listening to me. Thank you.
    [Prepared statement of Mr. Anderson appears in appendix.]
    The Chairman. Thank you.
    Senator Inouye had the double hearing this morning. He had 
to leave early. If he has any questions, he will submit them to 
you in writing, as other members who may or may not appear this 
morning. But thank you to both of you for your detailed 
testimony.
    I agree in one respect, and that is very clear that 150 
years of what has happened to Indian tribes certainly has not 
made things better for them from the standpoint of, as you said 
Dave, helping our children grow.
    I was interested in your definition of insanity. It clearly 
parallels and describes some of the legislative process around 
here. The two of you might know that.
    You also talked a great deal about change. I certainly do 
not blame tribes for being very, very careful about change, 
knowing the Federal Government's past record in dealing with 
American Indians. The Indian tribes, probably more than any 
other group in America, they have seen almost every change as 
reducing their sovereignty or reducing the status they once 
had.
    I sometimes look at Indian people in terms of what are just 
generally called ``minority movements'' in America. But most 
minorities in America when they came to this country, it was 
really for upward mobility in some respects. They looked for a 
better life. They tried to gain things that the majority 
culture had, whether in modern society it is a house and a car 
and a good job, or something of that nature, in the olden days 
maybe a piece of land to farm.
    I think Indian people are probably the only ones in the 
Nation that had nothing to gain and everything to lose, and 
they have lost and they have lost and they have lost. And 150 
years of dependency on the Federal Government clearly has not 
worked very well for them. They just continually lose, so I can 
understand why they are very, very careful about change.
    Ross, you mentioned in detail the amount of consultation 
process that is going on, and I appreciate that. But I have 
been here long enough to know, and maybe this is not just with 
Indian people, but no matter how much you consult, somebody 
will say afterwards, you did not ask me; or I was not at the 
table; or I didn't know about it, or something. So I just 
encourage you to do much more of that in every step of the 
process of reorganization.
    We are going to hear some comments today that people that 
are not at all thrilled about it because they think it is top-
heavy, creating many more jobs at the top level and not enough 
actual workers, but we will get into that in a few moments.
    I notice that Senator Daschle, our distinguished Minority 
Leader, has been able to show up. So before I ask any 
questions, I would like to ask Senator Daschle to sit down and 
make a statement. Senator Daschle has been a great supporter of 
Indian programs, as most of the people in this room know, and 
we are delighted to have him here in front of the committee.
    Senator Daschle. Mr. Chairman, just on a personal note, let 
me say that I know you have had to make a very difficult 
decision about your career in the Senate. On a bipartisan 
basis, as I said to you in person, I know I speak for everybody 
in this room and the entire Senate in congratulating you on a 
remarkable Senate career.
    The Chairman. Thank you.
    Senator Daschle. I just want you to know you have friends 
here for as long as you live, and we hope that your next year 
will be every bit as productive as the last years you have 
served in the Senate. We are proud to call you our friend, and 
I am honored to be here before you this morning.
    The Chairman. Thank you.
    I got a call from our tribe right after I made that 
decision. They said it is clear that I need to go to the 
mountain, and I think I do. [Laughter.]
    Senator Daschle. Having read your book, I know what that 
means. So, thank you.

 STATEMENT OF HON. TOM DASCHLE, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Daschle. Two weeks ago, tribal leaders from nearly 
every Indian nation in America traveled to America, Mr. 
Chairman, as you know, for a meeting of the National Congress 
of American Indians. Their urgent plea to all of us was that 
the Federal Government work with native people to find an 
honorable and equitable solution to the Indian trust fund 
dispute. This hearing is a first step in honoring that request, 
and I applaud you for holding the hearing. I want to thank 
others on the committee as well for their leadership in 
scheduling it so quickly, especially Senator Inouye.
    I represent South Dakota, home of the great Sioux Nation. 
More than 30,000 men and women in South Dakota are individual 
Indian money account holders. Most are elders in their sixties, 
seventies, eighties, and even ninties. Many have lived all 
their lives in the kind of grinding poverty that most Americans 
don't even know exists in this Nation. When their land is 
leased, it is usually for grazing rights. Those rights do not 
produce much income, but for many Indian trust account holders 
in South Dakota, it is half of their annual income.
    Maida LeBeau is one of the 30,000 trust account holders in 
my State. She lives in Eagle Butte on the Cheyenne River 
Reservation. She is the matriarch of an extended family that 
includes more than 40 kids. She considers them all her 
grandchildren. Last year, Mrs. Lebow had planned to use a good 
part of her annual lease payment to buy Christmas presents for 
the children. She expected her check to arrive in October, as 
it has for several years. By December, there was still no check 
and no explanation. Mrs. Lebow spent hours on the telephone 
trying to reach someone in the Office of Special Trustee who 
could help, but she could never get beyond the endless 
voicemail messages. So in her words, Christmas did not come 
this year for her grandchildren.
    In early January, Ross Swimmer the Special Trustee for 
American Indians, who I am delighted and honored to join on of 
this panel held a meeting on trust reform in Rapid City, SD. On 
January 13, Mrs. LeBeau drove more than 3 hours to get to that 
meeting. She then waited another 8 hours as nearly 100 other 
account holders stood up and one-by-one described problems they 
were having with their accounts. Finally after all of that, 
Maida LeBeau got a few minutes to plead her case. Weeks later 
after Mr. Swimmer's personal intervention, Mrs. LeBeau's check 
finally arrived.
    Mr. Chairman, there are 300,000 Indian trust account 
holders in our country. Most of them do not have Maida LeBeau's 
strength. Many are in fragile health. They cannot drive 3 hours 
to speak directly to the head of the Office of Special Trustee 
to resolve problems with their trust accounts, and they should 
not have to.
    For years, Congress has deferred to the executive branch, 
administrations of both political parties, to resolve the 
Indian trust management dispute. Yet the problems are no closer 
to being solved now than they were a decade ago, when Congress 
first directed the Interior Department to conduct an accounting 
of trust assets. It is time for Congress to admit that this 
hands-off approach is not working and accept our share of the 
responsibility for planning a fair and timely solution.
    This morning before this committee, Chairman Tex Hall, the 
president of the National Congress of American Indians, will 
call on Congress to become a more active participant in the 
effort to broker a just and equitable solution to the trust 
management problem. He is right. When I look at the long 
history of the trust management problem, I see three basic 
paths to its resolution. Congress, the Interior Department and 
the tribes can work together as co-equal partners to fashion a 
consensus solution. We can seek a mediated solution to the 
problem. Or, we can throw our hands up in despair and allow the 
issue to be resolved in the courts. These paths are not 
mutually exclusive. They are three distinct routes to the same 
goal.
    I am here today to offer some specific suggestions for how 
I believe we can move the trust management issue forward in a 
constructive way. First, congressional meddling in the Cobell 
case must end. Interventions such as the rider blocking Judge 
Lambert's ruling do not simply delay justice for Indian trust 
account holders, they undermine the delicate balance of power 
that is at the heart of our system of government.
    Second, as soon as possible, I believe this committee 
should initiate three-way discussions involving Congress, the 
Administration and tribal leaders to search for a consensus 
solution to the trust dispute. I know the Interior Department 
maintains that its reorganization has been shaped at least in 
part by ``listening sessions'' it held in Indian country. Yet 
the fact remains that tribal leaders around the country do not 
accept the premise that those meetings represent true 
consultation. And neither do I. This problem cannot be solved 
by Interior Department officials simply by redrawing lines on a 
BIA organizational chart. The search for a settlement must 
include real, meaningful, ongoing consultation with tribes and 
tribal leaders. It is, after all, Indian people's money.
    Congress should become more of an active partner in the 
efforts to broker such a consensus solution. I suggest that 
putting on the table the Interior Department's plan, the Great 
Plains regional proposal for trust reform outlined today by 
Chairman Harold Frazier, and the bill introduced by Senators 
McCain and Johnson, would be a good place to start.
    At the same time, all parties should seriously explore the 
possibility of a mediated settlement. I commend Chairman 
Campbell and Vice Chairman Inouye for the leadership that they 
have shown in beginning this mediation process. It is my view 
that in order for the mediation process to be effective, it 
should be headed by leaders of great stature who are 
experienced in difficult negotiations and whose integrity is 
unquestioned. The Indian trust dispute is not a partisan issue, 
and resolving it must not be viewed as a political effort. For 
that reason, I strongly urge that the mediation process be 
cochaired by a prominent Republican and a prominent Democrat.
    Finally, Congress must begin budgeting now for the eventual 
resolution of this dispute. Last year, I introduced the Indian 
Payment Trust Equity Act [S. 1540], which would create a $10-
billion fund to begin making payments to trust holders who have 
received an objective accounting of their trust assets. The 
fund could be expanded if necessary.
    So I ask the committee to begin now to look seriously at 
that proposal or perhaps others. Many people who are owed money 
are elders. They cannot wait for years to learn their account 
balances and years more to receive their money. They do not 
have that many years. Maida LeBeau should not be forced to 
worry about her next Christmas. There should be a mechanism in 
place to issue regular payments to account holders in case 
negotiation or mediation fails to produce a consensus solution.
    Nearly 1 year ago, the distinguished chairman and vice 
chairman of this committee wrote a letter to the parties in the 
Cobell case expressing their concern that continuing the 
litigation would only further delay justice for trust account 
holders. I would like to read one paragraph from that letter, 
quote:

    We believe that the most effective and equitable way to 
resolve this threshold matter is to engage the services of an 
enhanced mediation team that will bring to bear trust 
accounting and legal expertise to develop alternative models 
that will resolve the Cobell case fairly and honorably for all 
parties. If within a reasonable amount of time there is no 
progress made on such a resolution, we intend to introduce 
legislation that will accomplish the goal of resolving the 
Cobell matter in a mediated fashion.

    The time has come for Congress to become a more active 
partner in the search for a just and equitable settlement.
    So Mr. Chairman, again I want to thank you and members of 
the committee for holding this hearing. I look forward to 
working with the committee, the Administration and the tribes 
to find a solution that all parties can support.
    Thank you very much.
    [Prepared statement of Senator Daschle appears in 
appendix.]
    The Chairman. Thank you for your testimony. I am sure you 
are aware that we have introduced a bipartisan bill, S. 1770, 
and I know I am speaking for Senator Inouye when I say that we 
certainly would appreciate your support in helping us craft 
final legislation that can go to the President to resolve this 
problem.
    I would also say before you have to run, because I have so 
many relatives in your State, Senator Daschle, I know very well 
a lot of the problems and often use the plight of Indian people 
in South Dakota when we hear a dialog on, say, unemployment at 
5 or 6 percent nationwide, and I suggest maybe they go to Eagle 
Butte and see what it is like to live with a 60-percent 
unemployment; or when we talk about problems that our 
youngsters are facing and I suggest maybe they go to Pine Ridge 
and see how many youngsters are driven to suicide or try it 
because of the lack of opportunity; or when we talk about 
health, I suggest maybe they go to Rosebud and see what it is 
like to see people who have lost their limbs because of 
diabetes where the diabetes rate is probably near 50 percent. 
The problems Indian people face are just horrendous compared to 
the population at large. I just wanted to thank you for all 
your efforts in trying to help our people. Thank you.
    Senator Daschle. Thank you very much, Mr. Chairman.
    The Chairman. I do have a few questions for our witnesses, 
if I can get back to those for a little bit. Ross, you did 
speak at length about how this is going to be reorganized, but 
there is some question, as you know, I think you alluded to it, 
that some tribes are saying that this is really going to be a 
top-heavy bureaucracy, and that there are few new dollars for 
staff at the local level. Would you care to respond to that 
again?
    Mr. Swimmer. Certainly. It is everything but top heavy. I 
do not know of any jobs created at the central office level, 
for instance, and very few at the regional office. Most of the 
new jobs that are created are at the agency offices, and that 
is where we need the most.
    The Chairman. Would that result in more or less 638 
contracting?
    Mr. Swimmer. It should not have any impact on 638 
contracting. We have that as a major goal within the trust 
management plan. We encourage it. We want it to happen. We do 
believe that the tribes will have to be held accountable if 
they assume trust management activities, but we want them to 
take those activities over to the greatest extent possible.
    The Chairman. Did I understand that you are consulting with 
the tribes on the decisions regarding staffing levels, too?
    Mr. Swimmer. The overall organizational plan that was 
presented includes staffing levels at the agencies, 
particularly the trust officers and the deputy superintendents 
and the staff that would be there. That has been discussed at 
quite some length on the way in which they would perform their 
activities.
    The Chairman. And for new staffing levels, will that be 
Indian preference staffing?
    Mr. Swimmer. It is except in the Office of the Special 
Trustee for the offices that would be added or the work that 
would be added at the BIA level, it would be Indian preference.
    The Chairman. Okay, thank you.
    Frankly, I think a lot of the questions I had, you actually 
answered in your testimony, so I do not want to belabor it. It 
is the committee's understanding and maybe I do not have it 
right, but under the reorganization, there are certain 
functions that were once handled at regional level that are 
going to be pulled back to the central office here in 
Washington, DC at the BIA. Is that true or not?
    Mr. Swimmer. That is true. It is not the function per se. 
It is the authority for making the decision. For instance in 
the area of administration, some of the ultimate authority is 
at central office, and it is simply to get the standardization. 
It is not pulling jobs up to the central office. The people are 
still in place at the regions and the agencies. But when they 
spend the money, so to speak, it is important that we know 
where it is being spent and how it is being spent, and that we 
use systems that are standardized so that we get reports back 
from the regions and the agencies that we can make sense out 
of, and the bureau can.
    So what the bureau did is that they elevated the ultimate 
responsibility for some of these activities to the central 
office. It has been a point of contention because in the past, 
the regions particularly have pretty much run the regions 
independent of each other. If we are going to have effective 
and efficient management, we have to have some standardization 
in the processes. I think this is the basis for which the BIA 
restructured that line authority within those administrative 
functions.
    The Chairman. You touched on one other thing while I was 
writing some notes here, and I know it is a concern to Senator 
Inouye and I both, and that is that we do not want money that 
goes into the reorganization to take away from other areas that 
are extremely important in Indian health or Indian education or 
so on. It is my understanding from both of you that that will 
not be the effect. Is that true?
    Mr. Swimmer. It is not our intention to reprogram existing 
moneys beyond what we had asked for in the original $5 million 
last year. We have asked for new money for new positions, and 
we do have that money for 2004 and we have I think it is a 
total of about between the two agencies around $7 million that 
we are asking for in 2005 to finish up the rest of the 
employment.
    But the organizational structure is not itself taking money 
and we do not expect to have an obligation.
    The Chairman. Okay. I thank you both for appearing. I will 
probably have a few additional questions that I will submit in 
writing, as will other members, too. If you could get those 
back to us at your earliest convenience, I would appreciate it. 
Thank you for being here.
    Mr. Anderson. Senator, if I could just take a quick minute 
to respond briefly to Senator Daschle. I am very familiar with 
the case that he mentioned. What I would like to say is that 
the reorganization and the trust reform initiatives we are 
talking about does exactly what he asked for. It takes care of 
the Maida LeBeaus. She could get an answer at the agency and 
she would not have to come to the Special Trustee.
    The Chairman. Good.
    Mr. Anderson. Thank you very much.
    The Chairman. Perhaps the staff, if they are still here, 
can carry that message to him.
    Now we will proceed to panel 2, which will be Tex Hall, 
president of the National Congress of American Indians, I do 
not see Tex here, but would you look out in the hall? Perhaps 
he is out there; Joe Shirley, president of the Navajo Nation 
from Window Rock; Edward Thomas, president of the Central 
Council of Tlingit and Haida Indian Tribes in Alaska; Harold 
Frazier, president of the Great Plains Tribal Chairman's 
Association from Eagle Butte; and Clifford Marshall, chairman 
of Hoopa Valley Tribe in California.
    If you gentlemen would all sit down. We will start in that 
order with President Tex Hall beginning. Nice to see you Tex. I 
did not see you in the audience. I was worried that you might 
not be able to appear this morning. I am glad you are here.
    All of your complete written testimony will be in the 
report for all of our colleagues to read, so you do not need to 
read that thing word for word because most of us, we can read 
pretty well.
    We will do that. So if you would like to abbreviate or ad 
lib some of your comments, please feel free to do so.
    Tex, why don't you go ahead and begin.
    Mr. Hall. Good morning, Senator Campbell and Senator Inouye 
and members of the committee. Thank you for holding this 
hearing.
    I would like to make just a quick plea to you to reconsider 
running again. Really, we are shocked that you are not running, 
and really appreciate your leadership, Senator Ben Nighthorse 
Campbell.
    The Chairman. Thank you.
    Mr. Hall. So if you could reconsider at some time, we 
really would encourage you to do that.
    The Chairman. I appreciate that. After 38 years of 
marriage, my wife says she has been a single mom for 22 years 
and been married at the same time. [Laughter.]
    Three of my grandchildren do not know who I am and I have a 
dog that growls at me when I come home. [Laughter.]
    So I think it is perhaps time to get back to Colorado and 
back to the pow-wow circuit if nothing else. Thank you, though, 
for your nice thoughts.
    Mr. Hall. Thank you.

STATEMENT OF TEX HALL, PRESIDENT, NATIONAL CONGRESS OF AMERICAN 
                            INDIANS

    Mr. Hall. Again, I want to thank the committee for having 
this hearing today. On February 25, of course, NCAI held a 
trust reform summit in this very room to talk about this very 
important issue. We heard from all 12 regions and they all 
opposed the current reorganization as the way it is presented. 
So we specifically asked each region as they presented. They 
wanted to develop agency-specific plans versus the top-heavy 
bureaucratic plans. So again, all tribes in all regions are 
opposed to the reorganization plan.
    So we feel that DOI has focused its efforts on the top of 
the organization, rather than on the bottom, on the local 
grassroots level where reorganization should really begin. So 
this ongoing reorganization at the top-heavy bureaucratic level 
is really now at the expense of local agencies and Bureau of 
Indian Affairs programs. A top-heavy organization does not 
address the desperate need for trust account resource 
management at the agency and local level.
    Trust management requires people and systems at the agency 
level addressing resource management, range unit compliance, 
inspections, enforcement, title, appraisal and probates. This 
work cannot be done by bureaucrats and accountants in 
Washington, DC or Albuquerque, NM. It has to occur at the 
agency level.
    Tribes have always been and continue to be willing to work 
with DOI on trust reform, but DOI has chosen to shut the tribes 
out of the consultation process. Tribal leaders want change, 
contrary to what you may here. We want change. We want 
improvement in the system and in the way DOI manages trust 
funds and trust resources. However, tribal comments and 
suggestions concerning reorganization have fallen on deaf ears. 
We believe now is the time for congressional intervention. We 
are really at the crossroads, Mr. Chairman. We really feel that 
it is so important now that Congress take the lead in this 
because we simply are not getting anywhere.
    If I could add up the number of dollars that have been 
spent on reorganization since the last 12 years, we would 
probably exceed $1 billion. Yet, what are the results? What are 
the results of the reorganization? We have not seen those 
moneys, those $1 billions really effect change at the local 
level, and that really the critical crying point that tribes 
come to appeal to the committee today. That is really where we 
need to go.
    The second thing is the money that is being shifted from 
BIA that is jeopardizing programs that are so critical, human 
services, Indian child welfare, education, resource management.
    These are people behind those cuts that are being taken 
from the BIA funds to fund OST and the reorganization.
    So as was mentioned earlier, I heard Senator Daschle's 
testimony about one IM account holder in Eagle Butte. There are 
so many people like that, and so many people are passing on and 
their estates are not being processed, and still looking to see 
where their check is at, still not knowing what that check was 
appraised at, how much was that resource done.
    So we actually did a needs assessment on Fort Berthold, Mr. 
Chairman. We have actually studied this on Fort Berthold. Many 
of the tribes are now looking at needs assessment at the agency 
level. At one point at Fort Berthold, we employed 23 people in 
range alone. Today, we have three people in range. This 
shortfall in staff is a direct result of the neglect of 
providing adequate appropriations.
    For example, 25 CFR 166.305 requires the BIA to conduct a 
range assessment on every range unit on a reservation prior to 
issuance of a permit. The last range assessment completed on 
Fort Berthold was in 1982. So we have been neglected since 
1982. 25 CFR 166.312 requires the BIA to develop a conservation 
plan for each range unit. No conservation plans have been 
developed or approved by the BIA despite the issuance of 
grazing permits. So we continue to issue permits without 
conservation plans.
    Range technicians are responsible for ensuring permit 
compliance and policing the ranges for trespass and 
overgrazing. We have one range technicians to manage over 1 
million acres, with the river and the lake, as you know, that 
runs right in the middle of Fort Berthold, with grazing lands 
spread over 1,376 square miles, and again, one range 
technician. There is no way that they could make sure that the 
IM account or the tribal lands are in compliance.
    There is no appraiser at the Fort Berthold agency, despite 
the fact that appraisals are required for farm pasture leases, 
grazing permits, right-of-ways, oil and gas leases, land 
exchanges, land sales, gift deeds, land consolidation and 
trespass damage. Appraisals for the Great Plains region are 
presently handled by one appraiser out of Rapid City and he 
does it with a desktop appraiser.
    He does not do an on-site appraisal. Again, in our local 
agency-specific plan, it requests an appraiser on each of our 
reservations.
    There is a 3-year backlog of over 150 probate cases at the 
Fort Berthold agency. It takes approximately 2 years to pay out 
the estate proceeds to heirs after the case is decided. There 
is only one probate specialist at the agency. We estimate that 
the Fort Berthold agency needs three additional probate 
specialists to handle the backlog of cases and estate 
distributions.
    The Fort Berthold agency handles approximately 1,000 title 
records annually. Certified title requests take 6 months to 
complete because they are done at the regional office.
    Finally, the Fort Berthold agency has a approximately 300 
oil and gas leases, 100 pending on the reservation. There is a 
huge delay in leasing and in payouts of lease income. Although 
my tribe is in the middle of a known oil field, the Williston 
Basin, and oil fields are developed all around us, the Fort 
Berthold agency has no professional staff to handle mineral and 
oil and gas transactions.
    Other regions, Cheyenne River Sioux Tribe, Winnebago Tribe 
in Nebraska are all developing agency-specific plans. DOI 
itself has acknowledged that personnel resources are inadequate 
to address the current workload that is being done at the 
agency office today. DOI actually stated this in their 
fiduciary compliance plan submitted to the Federal district 
court in January 2003.
    So rather than making plans to hire the necessary workers, 
the Office of Special Trustee has announced it will hire six 
regional trust administrators and 60 trust officers and related 
support staff. The BIA is planning to hire 25 deputy regional 
directors for trust and a number of deputy trust 
superintendents in 2004.
    It is difficult to tell exactly the amount from the budget 
that has been submitted, but it appears that OST and BIA have 
substantial funds budgeted to hire staff to fill these 
supervisory positions. I simply ask, who are these managers 
going to supervise? We do not need more managers at the agency 
level. We need workers to fulfill these trust transactions.
    So as tribes are looking to develop an agency-specific 
plan, the Great Plains Region and the Rocky Mountain Region 
both have passed and adopted resolutions to do that. We have 
not gotten the support of OST or BIA. So again, we are coming 
to the committee to ask for the Senate Committee on Indian 
Affairs to assist tribes in this manner and we are very hopeful 
that we can move toward a resolution.
    We feel, in closing that this reorganization is obviously 
putting the cart before the horse and we have some great 
principles that we think will help fix the system, but again, 
Senator Campbell, we are shut out of the consultation process.
    Thank you for giving me the opportunity to present.
    [Prepared statement of Mr. Hall appears in appendix.]
    The Chairman. Thank you.
    Since I do not have questions for all of the committee, I 
will go ahead with a couple for you, President Hall. It is 
clear you do not believe that the tribes have been involved 
enough in the consultation process. So that is correct, right?
    Mr. Hall. That is correct.
    The Chairman. Have the concerns that you have addressed to 
the committee right now been made known to the bureau or the 
Special Trustee during any of the consultation process?
    Mr. Hall. On January 13, I believe was the exact date in 
Rapid City, Senator. I wanted to attend for that specific 
reason, to put it on the record because it was a taped 
consultation on the ``to be''reengineering. I asked Ross 
Swimmer. I said I just have a simple question, and my question 
is, as tribes we are looking to develop agency local specific 
plans because of all the issues that I said in my testimony; 
would you support it? And his answer was no. I said, well then 
we have no other recourse but to talk to Congress about seeing 
if we can get a plan that looks locally at developing it, 
versus top-heavy.
    The Chairman. You mentioned that the Great Plains Region, I 
think it was maybe the Tribal Chairman's Association, passed a 
resolution concerning the reorganization, and that was then 
sent to the Administration, to the agencies. Is that correct?
    Mr. Hall. Yes; Harold Frazier is the chairman of the Great 
Plains Chairman's Association.
    The Chairman. Okay. And did you get a response from that 
after you turned that in?
    Mr. Hall. No.
    The Chairman. You did not get a response.
    Mr. Hall. I have not.
    The Chairman. You mentioned a big concern about allocation 
of manpower. I think you probably were not in the room when 
Special Trustee Swimmer testified that most of the manpower 
that we are dealing with, and I think I asked him specifically 
about where it was going, he said it would be going to local 
levels. You believe, however, it will not be. It is still going 
to be too centralized.
    Mr. Hall. They will be managers and they will not be people 
that will actually do day-to-day trust transactions, so we 
disagree with that.
    The Chairman. Also, I asked specifically about if there 
would be any movement of existing funds from other programs, 
and was assured in testimony by the earlier panel that there 
would not. You still have a concern about that, too, that it 
might raid other needed programs to children or elders or 
whatever.
    Mr. Hall. Absolutely. Mr. Chairman, when we are talking to 
the National Indian Education Association and all of the school 
administrators and the school boards, they are all upset that 
$65 million is being taken from school construction because of 
the backlog, as we all know. So they are very concerned about 
that, as well as the Indian Child Welfare Act, the Water 
Settlement Act and all of those funds that are being taken 
away, and of course the overall $52 million that is being taken 
from BIA in 2005. People are very upset that there is money 
being eroded from the BIA budget.
    The Chairman. I note with interest that people from the 
Administration are still in the room. Do you believe that there 
is still an opportunity to have a dialog to try to work some of 
these differences out between the tribes and the 
Administration?
    Mr. Hall. Mr. Chairman, I would hope so, but I really feel 
that we are at that crossroads right now. We have been trying 
to, but we were virtually shut out of the consultation process. 
So we would hope that Congress would help us, the committee 
would help us with an intervention.
    The Chairman. We will try to. Thank you very much for your 
testimony.
    President Shirley, if you would go ahead and continue. All 
your testimony will be included in the record, by the way.

       STATEMENT OF JOE SHIRLEY, PRESIDENT, NAVAJO NATION

    Mr. Shirley. Thank you, Senator Campbell, chairman of the 
committee, Vice Chairman Senator Inouye, and members of the 
committee.
    I am honored to present testimony today on behalf of my 
Navajo people. The issue under consideration, the proposed 
reorganization of major agencies within the Department of the 
Interior related to Native American trust is complex, and its 
results will have a tremendous impact on Navajo people. We 
appreciate the opportunity to express our position to the 
Senate Committee on Indian Affairs. Thank you.
    There are five objectives that must be met before any 
proposed reorganization, as we see it: First, commitment from 
Congress to fund any proposed reorganization with new dollars, 
do not do it at the expense of Native American programs; 
second, commitment to a full, complete and good faith 
government-to-government consultation with Native American 
nations; third, the establishment of clear trust standards; 
fourth, identification of major agencies to confirm whether 
reorganization is necessary; and fifth, to be cognizant of the 
fact that Native American nations differ dramatically in 
government structure and land base, in order to avoid the one-
size-fits-all approach to reorganization.
    Regarding a commitment to appropriate new dollars, a 
reasonable inference drawn from the President's budget request 
for fiscal year 2005 is that the Administration is committed to 
reorganizing the BIA and funding the Office of Special Trustee 
with Native American program dollars. The Navajo Nation was 
informed by the Administration that there would not be such 
reallocated funding. However, our inference is drawn from the 
request to decrease Indian health facilities construction by 
$52 million and BIA education construction by $65 million, 
while within the same fiscal year 2005 request, increase the 
Office of the Special Trustee's budget by $130 million.
    The Navajo Nation believes that the objective that must be 
met is Congress' commitment to appropriate new dollars and not 
use Indian program dollars for any proposed reorganization. We 
seek this committee's support for such a commitment.
    Now, regarding the full, complete and good faith 
consultation, we feel the foundation of our government-to-
government relationship with the United States has not been 
adhered to. The Navajo Nation appreciates those members of 
Congress and those departments within the Administration who 
try their best to meet the obligation of government-to- 
government consultation. The recent reorganization at the BIA 
and the Office of Special Trustee indicates that government-to-
government consultation is replaced with the process that 
limited notice, inadequate response time, and the replacement 
with presentation of the reorganization for consultation about 
the reorganization. Full, complete and good faith consultation 
with all Native American nations is essential to any successful 
reorganization.
    The Navajo Nation seeks Congress' commitment to such 
consultation, and seeks this committee's support in securing 
such a commitment. The task of proposing the reorganization of 
major agencies affecting Native American trust is daunting, but 
it is a task that together we can accomplish.
    Regarding the establishment of clear trust standards, the 
next question that must be answered before any proposed 
reorganization is what are the trust standards. The Navajo 
Nation continues to argue that the Secretary of the Interior 
has the trust responsibility. We also continue to ask for 
accountability to this trust responsibility, but the U.S. 
Government continues to sway on the clear definition of trust 
responsibility. The Cobell litigation is a backdrop for the 
discussions of trust reform. Although we support those 
individuals in asserting their claims before the courts, we 
recommend Congress, not prematurely proposed trust reform, in 
reaction to such litigation.
    Although Congress and the Administration may not agree with 
all Native American nations and vice versa on trust standards, 
we would like Congress' commitment to entertain trust standards 
that the government and all Native American nations can agree 
to, prior to any proposed reorganization of major agencies. 
Without clear trust standards, any reorganization would be 
based on a system that lacks responsibility and accountability. 
Thus, any proposed reorganization would falter and result in 
the same lack of responsibility and accountability. Let us work 
together on the proposed trust reform. Who better to provide 
you with what works and what does not work than the trustee of 
this relationship?
    Regarding the reorganization of the major agencies under 
the Department of the Interior, in the past we have worked with 
the government in a way where the Navajo Nation reacted to the 
government's proposals, rather than be proactive. The Navajo 
Nation believes today is truly historic. This committee is 
providing us the opportunity to proactively work with the 
government's proposals by allowing us to provide suggestions 
prior to proposing trust reform. The Navajo Nation requests a 
list of those major agencies that may be proposed for 
reorganization.
    We also recommend Congress provide adequate time for Native 
American nations to review the list. The Navajo Nation would be 
greatly impacted because we work with several agencies within 
the Department of the Interior, like the Bureau of Land 
Management and the Bureau of Reclamation. It is also important 
to know when an agency is working as intended, not requiring 
reorganization. Let us work together and know when 
reorganization is not the answer.
    Regarding the avoidance of the one-size-fits-all approach, 
finally the Navajo Nation stresses to this committee and 
Congress to avoid a one-size-fits-all approach to any proposed 
reorganization. As Vice Chairman Senator Inouye noted in his 
statement at the NCAI legislative summit 2 weeks ago, we must 
be wary of any trust reform. We must take a thorough look at 
all differences among all Native American nations. What works 
for one Native American nation may not work for another. Let us 
not go down the road of dividing Native Americans by proposing 
a one-size-fits-all approach. Let us work together to identify 
the differences and address those differences through 
meaningful consultation. Congress and Native American nations 
will then realize our common goal: trust responsibility and 
accountability.
    In summation, I want to reiterate those points of utmost 
concern to Navajo people, and if addressed appropriately, will 
ensure a successful reorganization and improve relations 
between the Native American nations and the Federal Government. 
First, we seek a commitment from Congress to fund any proposed 
reorganization with new dollars. Do not do it at the expense of 
Native American programs. Secondly, we seek a commitment to 
full, complete and good faith government-to-government 
consultation with Native American nations. Third, together we 
must establish clear trust standards or our labor will be for 
nothing.
    Fourth, we must work together to identify those major 
agencies subject to reorganization, to confirm that 
reorganization is necessary. Finally, as we begin this journey, 
let us be mindful that Native American nations differ 
dramatically in government structure and land base. A sure road 
to failure will be to attempt a cheap or quick fix. We must 
avoid a one-size-fits-all approach to reorganization.
    Thank you.
    [Prepared statement of Mr. Shirley appears in appendix.]
    The Chairman. Thank you. I think you have made a very 
important observation in this statement about one size fits 
all, and maybe it is the weakness of the Federal Government 
that we often forget here that all those individual treaties, 
even though they were all broken, they were not made with one 
monolithic Indian group nationwide. They were made nation to 
nation, with each tribe being their own entity and land base 
and character, as you have mentioned, which is the equivalent 
of signing contracts or agreements or treaties with foreign 
nations.
    If we apply that logic that one size fits all, that would 
say that maybe the treaties we have signed with France and 
England and Germany and Australia and wherever, we should treat 
them all alike. We do not. They are different countries. They 
are different nations. They have their own structure. I think 
we need to remember that more in the Federal Government when we 
are trying to seek resolution to differences between tribes and 
the Federal Government. They are all different and should be 
treated accordingly, with the dignity each tribe has as a 
nation in itself.
    I understand, however, the difficulty of doing that. Not so 
difficult with the Navajos because they have 280,000 or more 
people, but in other States like the Dakotas with maybe 30,000 
Lakota, as was mentioned. But there are some tribes in America 
that only have five members or four members, and I can 
understand the difficulty in dealing with some that have very 
few members, but still that is the deal. If there were 
individual treaties, they should treat them individually as 
nations in their responsibility to it.
    Thank you for your testimony.
    We will now move to the Honorable Ed Thomas, the President 
of the Tlingits. Thank you for being here, Ed. Okay, you first. 
Why don't you go ahead. I would note that Senator Murkowski 
sent a message over. She is occupied in two other hearings this 
same time, and she apologizes for not being here to hear your 
statement, but she sent a note that said she will read it very 
carefully.

STATEMENT OF EDWARD THOMAS, PRESIDENT, CENTRAL COUNCIL TLINGIT 
               AND HAIDA INDIAN TRIBES OF ALASKA

    Mr. Thomas. Thank you very much. Thank you very much, Mr. 
Chairman, first for having this hearing and your deep 
commitment to our problems.
    I am going to recite a little bit of my background, not to 
toot my own horn, but just to kind of give you an overview of 
my involvement in this issue. First of all, I have been 
president of my tribe since 1984. We have 25,000 citizens. I 
represented Alaska on the BIA Reorganization Task Force that 
ran from the mid- to late-1980's to the early 1990's. It was 
through that process that I became aware and my tribe became 
aware of the problems in trust fund management. We were one of 
the first tribes to join the Inter-Tribal Monitoring 
Association. This association worked toward legislation to fix 
those trust management problems.
    One of the proposals we put forth back at that time was to 
take or remove the entire program from out of the BIA to repair 
it, fix it, put it in order and put it back again. We got the 
idea from what happened when the Federal Government addressed 
the issue of the savings and loan scandal at the very same 
time, and saw how quickly and efficiently the Federal 
Government addressed those problems, appropriated dollars and 
fixed those problems with the savings and loans, and now it is 
operating like it should.
    I must state that we all know that the trust management 
system within the BIA is broken and has been for quite some 
time. So while I am not going to talk a lot about that since 
other testifiers have, I will zero in on a couple of other 
issues. One is the issue of reorganization. Back when we talked 
about the reorganization efforts in the 1980's and early 
1990's, tribes and tribal leaders were very hesitant to buy 
into the reorganization plan put forth at that time, for 
several reasons. Pardon me if some of this sounds like BIA 
bashing. It is not intended to. It is simply a reciting of what 
we went through back then.
    First of all, it was clear that in most organizational 
problems are hardly ever solved simply by moving boxes around 
on the organizational chart. It appeared that that was what was 
happening. There were a couple of statements that came forward. 
One was, Indian tribes are tired of seeing people rotated 
throughout the system. It is like rotating worn out tires. That 
was one statement. The other one is that when you do any 
reorganization in government, the deadwood always floats to the 
top. People that once could not do the job down on lower levels 
then become escalated and becomes the ones in charge at the 
upper levels. We have seen that happen more than once, so I 
wanted to point those things out.
    Now, there is no doubt that in the minds of many of us, the 
funding for trust reform comes from BIA tribal programs, those 
programs you talked about in your comments. When you see the 
overall BIA budget just barely keeping flat and you see one 
line item increase and the others go down, it becomes very 
apparent to us in a finite budget that the money shifted from 
one program to another.
    Now, is that a big deal? The $109 million that Special 
Trustee Swimmer spoke of sounds like a lot of money, and it is 
when it comes from a finite underfunded BIA budget. But when 
you compare it to what happened in the savings and loan scandal 
issue, they were not talking about millions, they were talking 
about billions. And these appropriations, I think the lowest 
one that I recall was about $5 billion and the highest was 
about $82 billion, appropriated all in the span of 1 year to 
fix the savings and loan problem.
    So I maintain that if the Federal Government had funded 
tribal programs at least to keep pace with inflation, we would 
not be so worried about the extra dollars being used to 
reorganize the BIA and to fix the Federal trust problems.
    When I look at the way land and resources are managed by 
States and other entities, I see that the moneys that are put 
aside for these tasks in the BIA and even in BLM is very, very 
meager compared to what is being used to fund land management 
by States or dollars being managed by Federal bank systems for 
non-Indians.
    The point being is that even if we were to fully fund our 
programs as presented by the Special Trustee or the Secretary, 
I do not personally believe that is enough money to manage 
these resources. We need more resources to manage all of those 
properties all the way down to the tribe/agency level. That has 
to happen at some point in time.
    So Mr. Chairman, once again I thank you for your dedication 
to our issues over your tenure here in Congress. I join others 
in saying I am sorry that you have made your choices, but I 
certainly understand them, particularly with the dog growling. 
[Laughter.]
    But I think that your history from our point of view will 
be a kind history, and I want to say that. I hope that as we 
leave this era in our relationship with the Federal Government 
that we can see some of those dollars restored to make whole, 
if you may, the tribal programs and to create enough of a 
system so that our trust resources can be managed in a 
professional manner and adhere to the standards that are being 
adhered to by other parts of this government for non-Native 
assets.
    Thank you very much.
    [Prepared statement of Mr. Thomas appears in appendix.]
    The Chairman. Thank you. I want to tell you that in my last 
year as the chairman of this committee, I intend to do 
everything I can to make sure that we leave it a little better 
for Indian country than we found it. I know I can speak for 
Senator Inouye, too, who may also be leaving the committee.
    Thank you.
    Mr. Thomas. There are other parts of my written testimony 
that I hope you will read that builds on some of the comments.
    The Chairman. Yes; we will. It will be included in the 
record and we will read it very carefully. Thank you.
    Now, we will go to President Frazier, please.

  STATEMENT OF HAROLD FRAZIER, PRESIDENT, GREAT PLAINS TRIBAL 
                     CHAIRMAN'S ASSOCIATION

    Mr. Frazier. Thank you. Good morning, Mr. Chairman and 
honorable members of the committee.
    I am honored to be here today to testify on the Department 
of the Interior's reorganization. I thank you for holding this 
hearing. I am here representing not only the Cheyenne River 
Sioux Tribe, but the Great Plains Tribal Chairman's 
Association, in which 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. We know that we will suffer greatly under the 
current reorganization plans of the Department of the 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. Trust functions cannot be separated. The current 
Department of the Interior reorganization plan is a waste of 
money and resources which are much needed at the local agency 
levels to provide trust functions. Every day, we see problems 
multiplying because of fractionation of line authority. I could 
go on and on and tell you stories to justify that, but I 
believe that the people who testified earlier, their stories 
are similar and are throughout Indian country.
    Presently, many of our people cannot access their records 
in a timely manner. When they call the Special Trustee office 
in Albuquerque, they get phone recordings. We need the face-to-
face relationship restored, which our people depend upon.
    Trust officers from the Office of the Special Trustee will 
be only duplicating services that the BIA superintendents are 
currently providing. We also see that they will be operating 
independently from local control. We question, who are they 
going to be accountable to? Upper-level bureaucracy will be 
creating delays and backlogs in trust functions. Right now, the 
way the BIA reorganization was explained to us, the computer 
specialist on the Cheyenne River agency, his boss sits here in 
Washington, DC. And before he is to do any work, he has to get 
a work order from Washington, DC.
    The system that they are trying to impose on our people 
relies heavily on a computer system. So we know and we foresee 
a lot of delays in transactions and for our people to find out 
the status of their assets. We know that policies and plans 
need to come from local grassroots levels up, not from upper-
level down. The solutions are in Indian country. We know what 
is best for our people. Our plan was developed in Indian 
country, by Indians, for Indians. Only a few trust functions 
can be nationalized. The others need to be modified to fit 
appropriate regions, because one size does not fit all.
    Based on 2001 statistics, the Great Plains region had over 
67,000 IIM accounts, more than any other regions. We have a 
plan. We are requesting a pilot program similar to the 
legislative rider that the Self Governance Tribes received in 
the 2004 Interior appropriations bill. Our plan would give more 
authority, funding and functions back to local agencies.
    Based on article V and article XI of the 1868 Fort Laramie 
Treaty, the United States guaranteed that they would provide 
services at the local level to our people and reimburse the 
tribes for any services lost. Right now, as you heard President 
Hall speak about backlogs in appraisals, I want to say that 
also, that right now in the Great Plains region, there is one 
appraiser. We need one at every agency.
    There are probate backlogs. We agree that there needs to be 
a nationalized system that reports all asset transactions at 
all agencies. But more importantly, we need more positions at 
the local levels to input data into the systems. We need range 
and soil conservationists, lease compliance officers, realty, 
probate, rights-of-way specialists, and accountant positions to 
better manage our assets.
    Also in our plan, the Office of Special Trustee will be 
only given functions that were intended for them in the 1994 
Trust Reform Act. They would only provide monitoring and 
oversight of trust reform, not operational functions. Our 
agency superintendents would be given back all authorities, 
including education and law enforcement because in our 
treaties, all of these functions are trusts.
    We request your support for our plans and we ask that the 
reorganization be driven to benefit Indians in Indian country, 
not bureaucrats in Washington, DC, Albuquerque, or Virginia. 
Remember, one size does not fit all.
    Thank you.
    [Prepared statement of Mr. Frazier appears in appendix.]
    The Chairman. Thank you.
    We have had some contact with the committee. You mentioned 
the 1994 Act that authorized the Office of Special Trustee. 
That was supposed to be a temporary position until we resolve 
this problem, but some of the contacts we have had are telling 
us it appears that it is becoming an institution of government 
now, and there is some concern about it.
    Let me ask you about consultation. Mr. President, I assume 
you do not feel there was adequate consultation with the Great 
Plains Tribal Chairman's Association or individual tribes. Is 
that correct or no?
    Mr. Frazier. Yes; I heard about this ``to be,''these 
meetings going around when I was in an ITMA meeting in Las 
Vegas. I was quite amazed that in the Great Plains region, 
there were no meetings scheduled for our region, even though we 
have the highest amount of IIM accounts.
    The Chairman. There was no meeting scheduled at all?
    Mr. Frazier. No; not at that time.
    The Chairman. So you, as tribal chairman within your 
association, have not had any meetings with them?
    Mr. Frazier. No; we had to bring that issue up, and then 
they did come on January 13 to Rapid City, but we do not view 
that as consultation. It always seemed like we are always 
defending issues. They come to the table and say, they inform 
us of what they are going to do, and there is no dialogue 
there, I believe.
    The Chairman. I see. Okay. Thank you. I appreciate your 
testimony and there will be probably some written questions to 
you, too.
    Mr. Frazier. Thank you.
    The Chairman. We now move to Clifford Marshall, chairman of 
the Hoopa Valley Tribal Council.

  STATEMENT OF CLIFFORD LYLE MARSHALL, CHAIRMAN, HOOPA VALLEY 
                         TRIBAL COUNCIL

    Mr. Marshall. Thank you, Mr. Chairman.
    Mr. Chairman, members of the committee, I am Clifford Lyle 
Marshall, chairman of the Hoopa Valley Tribe. I thank you again 
for inviting me to testify on trust reform.
    I last testified before this committee on May 21, 2003 on 
the subject of trust reform. I testified on behalf of the 
California Consortium on Trust Reform, a consortium of seven 
tribes in California, including Hoopa. At that hearing, I 
presented an attachment with my testimony, the operating 
agreement between the BIAs' Pacific Regional Office and the 
California Trust Reform Consortium.
    At that time, I testified about the positive activities 
that the Consortium and the BIA Pacific Regional Office had 
undertaken and that the Consortium tribes had collectively 
found ways to work with the BIA to successfully implement one 
of the most progressive trust resource improvement programs 
that exists anywhere in Indian country today. I also testified 
that other tribes, like the Salt River Pima Maricopa in 
Arizona, the Confederated Tribes of Salish and Kootenai, and 
the Chippewa Cree of Rocky Boy Montana had accomplished 
positive trust reform through their own unique working 
relationships with their respective BIA agencies.
    I asked at that time that the California Consortium be 
allowed to continue implementing our BIA-Consortium effort and 
work collectively to solve trust management problems at the 
local level. I also asked that the committee consider 
establishing a tribal trust reform pilot project that would 
preserve and protect these established working relationships 
between these tribes and the BIA.
    Last year, this pilot project was established in section 
139 of the Department of the Interior and Related Agencies 
Appropriations Act of 2004. This act provided that the 
California Consortium, which includes Hoopa, the Salish and 
Kootenai, Rocky Boy, and the Salt River Pima Maricopa Tribes, 
were designated by Congress to operate separate and apart from 
the Department of the Interior's trust reform reorganization.
    Section 139, however, had a proviso added that it stated 
that the tribes referred to in section 139 had to demonstrate 
to the satisfaction of the Secretary of the Interior that they 
had the capability to carry out the responsibilities under the 
same fiduciary standards as those to which the Secretary of the 
Interior is held. I believe you heard Mr. Swimmer say that 
today.
    We were told that this meant that we had to meet the 
Secretary's proper discharge of trust responsibilities to the 
United States as set forth in part 303, chapter two of the 
departmental manual for the Department of Interior. In 
discussion with Interior staff prior to the introduction of 
section 139, we believed that this would be a cursory review of 
our most recent trust evaluations and audits. However, we were 
later informed that we would be assessed, and our assessment 
would be as against the ``as is'' and ``to be'' models. We felt 
that this was entirely unfair and imposition of the 
department's trust management infrastructure, and what we felt 
was a clear violation of the intent of Congress, which was that 
the tribes remain separate and apart from trust reform.
    We countered that under the Self-Governance Act, self-
governing tribes were required to comply with Federal law and 
standards set forth in Federal regulation. Between December 
2003 and February 2004, each of the 10 tribes were visited by 
an assessment team of the Office of Special Trustee for Indian 
Programs, Office of Trust Review and Audit. The teams consisted 
of four to six auditors and attorneys. The assessments lasted 1 
to 4 days. Hoopa's review lasted 2 days. When asked what we 
were being evaluated against, the response was they were not 
sure, but they were there to collect information. We were later 
told that we were being compared to a trust company.
    Our fiscal management program policies and procedures, 
records management program policies and procedures, and our 
land and resource management program policies and procedures 
were scrutinized. On March 8, 2004, the Hoopa Valley Tribe 
received the final draft of the Department of the Interior's 
assessment. The Hoopa Tribe now has 30 days to provide 
comments. For forestry, the assessment concluded that no 
discrepancies were noted in the timber sales transaction file 
review. For wildland fire protection, the assessment noted that 
the fire suppression unit is sound, but funding level is one-
third of what is necessary to protect the timber resource. The 
assessment noted that our roads department maintains 108 miles 
of road, but is funded at 11 percent of need. The assessment 
also noted that the Pacific Region has not processed one 
probate for a Hoopa Indian in the last 7 years.
    For the records management, the assessment noted that the 
tribe maintains all California Indian rolls from the 1920's and 
census records on Indian rancherias going back to 1882; have a 
record schedule policy for all departments; maintain a records 
inventory; uses a Doc Star computer system to electronically 
store records on CD rom discs; and uses an interdisciplinary 
approach for developing new policies and procedures. The 
assessment concluded that, ``in appearance, all records are 
well organized, labeled and secured.''
    The assessment of our fiscal department concludes that the 
fiscal department appears to have excellent records management 
systems and superior internal controls operation. Regarding 
information technology, the assessment states that Hoopa uses a 
fully integrated fund accounting system, Windows 2000 server 
with sonic wall firewall software, trackit software to keep an 
inventory of the software and hardware used; perform security 
testing, maintains strict controls on software installation; 
maintains virus scanning updates; and backs up and stores its 
data weekly on CD rom disc and stores it in a safety deposit 
box in a fireproof safe at a local bank.
    The executive summary concludes that the tribe is capable 
of performing trust functions. It goes on to say the tribe had 
some minor weaknesses that need attention, but do not prevent 
them from meeting section 139 requirements. Specifically, the 
tribe should seek an external evaluation of their information 
technology systems, policy, and procedures to certify 
compliance with applicable information security mandates.
    I would like to address these alleged weaknesses. First, 
there are no section 139 requirements. Section 139 specifically 
said that the 139 tribes were to remain separate and apart from 
trust reform. Second, there are no applicable information 
security mandates. Third, the BIA and OST do not have an 
information technology system that works. OST has spent over 
$70 million on the TAMS system that has never worked, is not on 
line, and the BIA is still operating without Internet access. 
Fourth, the Department of Interior has paid $60 million on 
external evaluations to produce the ``as is'' and ``to be'' 
models, and are not any closer to implementing a system.
    In fiscal year 2003, like every previous year for the past 
15 years, the Hoopa Tribe was audited by a certified accounting 
firm, evaluated by the Pacific Regional Office pursuant to the 
Self Governance Act, and assessed by the Office of Special 
Trustee. It is hard to understand why OST would now conclude 
that we need another external evaluation. Hoopa considers the 
OST assessment an external evaluation.
    It appears that OST is holding us to a standard that the 
BIA and the Secretary have never achieved. Hoopa Tribe's 
computer systems, used to manage 57 departments, have been an 
investment that has accumulatively over the past 10 years cost 
hundreds of thousands of dollars. We have put our funding into 
developing an infrastructure and developing our capability. We 
have used our funds to build a system that works for us. It 
also works for our auditors and it works for the BIA regional 
office who does our trust evaluations. Why does Hoopa need 
another evaluation? More importantly, who is going to pay for 
it? If there are minor weaknesses in Hoopa's management, and I 
do not read in the assessment any finding that there is, it is 
because of inadequate funding. I believe that the other section 
139 tribes would say the same.
    I believe that the section 139 assessment was in fact an 
application of the trust reform ``to be'' model and turned the 
intent of section 139 on its head. But the importance of 
section 139 is that it shielded the section 139 tribes from 
trust reform reorganization changes and preserved the operating 
agreements and working relationships of the 10 tribes and their 
agencies. Section 139 required that the tribes demonstrate to 
the Secretary that they have the capability to meet the 
fiduciary duties of the Secretary.
    I am proud to say to this committee today that Hoopa's 
assessment and, to my knowledge, all the other section 139 
tribes state, the tribe is capable of performing trust 
functions. We passed this arduous test and proved our 
capability.
    In conclusion, since trust reform continues to be a mystery 
wrapped in an enigma to most of us, and the section 139 tribes 
have shown that they are managing at the same level or above 
that of the BIA, I ask that you support extending section 139 
for another year. The purpose of section 139 was to maintain 
what is working now in Indian country.
    Thank you for this opportunity to speak to you today.
    [Prepared statement of Mr. Marshall appears in appendix.]
    The Chairman. Thank you. Let me ask you a couple of 
questions, Chairman Marshall.
    Just as a sidebar, do you know the Risling family out 
there?
    Mr. Marshall. I will tell you a story, sir.
    The Chairman. You better not do that. It is on the record 
here. [Laughter.]
    Mr. Marshall. I have known you for many years. When I was 
in law school and clerking here in Washington, DC and when I 
was a tribal councilman, I would shake your hand and you would 
say, ``where are you from?'' And I would say, ``I am from 
Hoopa.'' And you would always say, ``Do you know the Risling 
family?''
    The Chairman. Well, tell them hello.
    Mr. Marshall. ``And do you know David Risling?'' And I 
would always answer, ``That is my uncle.''
    The Chairman. Yes; I am sorry. I forgot that. We were on 
the board of D-Q University years and years ago together and he 
is a fine man, as is the family. Give them my best. I promise 
not to ask you the next time I see you if you know the Risling 
family. [Laughter.]
    Mr. Marshall. I appreciate that you connect me. [Laughter.]
    The Chairman. Okay.
    Your tribe has been operating under the so-called ``section 
139 pilot project,'' you spoke about, for several months now, 
and I assume that you want that to continue in the future. 
Based on your experience so far, what changes would you 
recommend to make it a better project for your tribe and do you 
think it could be replicated for other tribes, the pilot 
project that has worked for you, without getting into this so-
called one-size-fits-all syndrome?
    Mr. Marshall. The program that we operate under is the Self 
Governance Act. I believe it is a very successful piece of 
legislation, and in fact 46 percent of all tribes now are Self 
Governance tribes.
    I am concerned that the way that trust reform is 
restructuring the bureau, that decisionmaking is being moved to 
being centralized within the Beltway, that our relationships 
that we have developed over the past 15 years with our local 
and regional offices, that the decisions that have been made to 
make the program successful, those decisions will not be able 
to be made at the local or regional level.
    So I guess that is what section 139 was about as a pilot 
project. Keep what the tribes have developed, and what the 
tribes are saying loudly are working at the local level, in 
place. I believe that a lot of tribes would come forward and 
say the same thing.
    The Chairman. You heard the testimony of the agencies. As I 
understand them, there will be more people at the local level, 
but it is your position that even though there may be more 
people at the local level, the decisions still will not be made 
at the local level. They will be filtered to a central 
decisionmaking process. Is that correct?
    Mr. Marshall. I heard the testimony today that these would 
be worker bees. I know that everyone at this table, and what 
would exist in California, is understaffed and underfunded. The 
way that the Consortium tribes and the Hoopa Tribe makes things 
work is that they have to take what little they get from the 
bureau, what we get from the bureau, and we have to find other 
sources of funding and then we build programs. We use indirect 
cost money, compact money, and tribal revenues, as well as 
other grant funding.
    Trust evaluation, we asked, what are you evaluating? Are 
you evaluating just what the bureau gives us or are you 
evaluating the rest of the program? I mentioned our roads 
program. We get 11 percent of our funding from the bureau. The 
rest of it comes from a business that the tribe built, an 
aggregate plant that the tribe built, and from timber sales 
contracts, maintaining roads for timber sales.
    Are you evaluating the money against the money that we put 
into it or the money you give us? Salish Kootenai used the 
example of a fisheries program where they get $60 from the BIA 
and put $200,000 more into the program.
    What is the trustee going to evaluate, the special trustee? 
And is he there to evaluate us or help us or provide us with a 
service? We are not sure. We know that at this point, what we 
do and the decisions we make, work. So we are really not sure 
if they can help us.
    The Chairman. Okay. I thank you. We will followup with some 
written questions. President Shirley, just so you will know 
that the only friends that I have are not just at Hoopa, please 
tell the Benn family, old spiritual leaders and sand painters 
at Navajo, I am still here and look forward to seeing them 
again back when I am in my private life. Thank you.
    With that, we will keep the record open for 2 weeks and we 
certainly appreciate everybody appearing.
    This hearing is adjourned.
    [Whereupon, at 11:20 a.m. the committee was adjourned, to 
reconvene at the call of the Chair.]
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                            A P P E N D I X

                              ----------                              


              Additional Material Submitted for the Record

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


 Prepared Statement of Clifford Lyle Marshall, Chairman, Hoopa Valley 
                                 Tribe

    Mr. Chairman, members of the committee, I am Clifford Lyle 
Marshall, chairman of the Hoopa Valley Tribe. I thank you for again 
inviting me to testify on Trust Reform. I last testified before this 
committee on May 21, 2003 on the subject of Trust Reform. I testified 
on behalf of the California Consortium on Trust Reform, a consortium of 
seven tribes in California including Hoopa. At that hearing I presented 
as an attachment with my testimony the ``Operating Agreement Between 
the Bureau of Indian Affairs Pacific Regional Office and the California 
Trust Reform Consortium.''
    At that time I testified about ``the positive activities that the 
Consortium and BIA Pacific Regional Office had undertaken,'' and that 
``the Consortium Tribes had collectively found ways to work with the 
BIA to successfully implement one of the most progressive trust 
resource improvement programs that exists anywhere in Indian country 
today.'' I also testified that other tribes like the Salt River Pima 
Maricopa in Arizona, the Confederated Tribes of Salish and Kootenai, 
and the Chippewa Cree of Rocky Boy Montana had accomplished positive 
trust reform through their own unique working relationships with their 
respective BIA agencies. I asked, at that time, that the California 
Consortium ``be allowed to continue implementing our BIA/Consortium 
effort and work collectively to solve trust management problems at the 
local level.'' And I also asked that the committee consider 
establishing a Tribal Trust Reform Pilot Project that would preserve 
and protect these established working relationships between tribes and 
the BIA.
    Last year this pilot project was established in sec. 139 of the 
Department of the Interior and Related Agencies Appropriations Act of 
2004. This Act provided that the California Consortium which includes 
Hoopa, the Salish and Kootenai, Rocky Boy, and the Salt River Pima 
Maricopa Tribes were designated by Congress to ``operate separate and 
apart from the Department of the Interior's trust reform 
reorganization.''
    Sec. 139, however, had a proviso added to it that stated that the 
tribes referred to in sec. 139 had to ``demonstrate to the satisfaction 
of the Secretary of the Interior that they have the capability to 
carryout their responsibilities under the same fiduciary standards as 
those to which the Secretary of the Interior is held.'' In discussions 
with Interior staff prior to the introduction of sec. 139 we believed 
that this would be a cursory review of our most recent trust 
evaluations and audits. However, we were later informed that we would 
be assessed, and our assessment would be as against the ``As-Is'' and 
``To-Be'' models. We felt that this was entirely unfair, an imposition 
of the Department's trust management infrastructure, and what we felt 
was a clear violation of the intent of Congress which was that the 
tribes remain separate and apart from trust reform. We countered that 
under the Self Governance Act, Self Governance tribes are required to 
comply with Federal law and standards set forth in Federal regulations.
    Between December 2003, and February 2004 each of the 10 tribes were 
visited by an assessment team of the Office of Special Trustee for 
Indian Programs, Office of Trust Review and Audit. The teams consisted 
of four to six auditors and attorneys, the assessments lasted for 1 to 
4 days. Hoopa's review lasted 2 days. When asked what we were being 
evaluated against the response was that they weren't sure; that they 
were there to collect information. We were later told that we were 
being compared to a trust company. Our fiscal management program, 
policies and procedures, records management program, policies and 
procedures and our land and resource management programs, policies, and 
procedures were scrutinized.
    On March 8, 2004 the Hoopa Valley Tribe received the final draft of 
the Department of the Interior's assessment. The Hoopa Tribe now has 30 
days to provide comments. For Forestry, the assessment concluded that 
``no discrepancies were noted in the timber sales transaction file 
review.'' For Wildland Fire protection the assessment noted that ``the 
fire suppression unit is sound'' but funding level is one-third of what 
is necessary to protect the timber resource. The assessment noted that 
our Roads Department maintains 108 miles of road but is funded at 11 
percent of need. The Assessment also noted that the Pacific Region has 
not processed one probate for a Hoopa Indian in the last 7 years.
    For records management the assessment noted that the tribe 
maintains all California Indian Rolls from the 1920's, and census 
records on Indian rancherias going back to 1882; have a record schedule 
policy for all departments; maintain a records inventory, uses a Doc 
Star computer system to electronically store records on CD Rom disks; 
and use an interdisciplinary approach for developing new policies and 
procedures. The assessment concludes that, ``in appearance, all records 
are well organized, labeled, and secured.'' The assessment of our 
fiscal department concludes that ``the fiscal department appears to 
have excellent records management system and superior internal controls 
operation.'' Regarding information technology the assessment states 
Hoopa uses a ``fully integrated fund accounting system; windows 2000 
server with sonic wall firewall software; trackit software to keep an 
inventory of the software and hardware used; performs security testing, 
maintains strict controls on software installation; maintains virus 
scanning updates; and backs up and stores its data weekly on CD Rom 
disc and stores it in a safety deposit box in a fireproof safe at the 
local bank.
    The executive summary concludes that, ``The Tribe is capable of 
performing trust functions. The tribe had some minor weaknesses that 
need attention but do not prevent them from meeting section 139 
requirements.'' Specifically, the tribe should seek an external 
evaluation of their information technology systems, policy, and 
procedures to certify compliance with applicable information security 
mandates.''
    I would like to address these alleged weaknesses. First, there are 
no sec. 139 requirements. Sec. 139 specifically said the 139 tribes 
were to remain separate and apart from trust reform. Second, there are 
no ``applicable information security mandates.'' Third, the BIA and OST 
don't have an ``information technology system'' that works. OST has 
spent over $70 million on the TAMS system that has never worked, is not 
on line, and the BIA is still operating without internet access. 
Fourth, the Department of the Interior has paid $60 million on external 
evaluations to produce the ``As Is'' and ``To Be'' models and aren't 
any closer to implementing a system.
    In fiscal year 2003, like every previous year for the past 15 
years, Hoopa was audited by a certified accounting firm, evaluated by 
the Pacific Regional Office pursuant to the Self Governance Act; and 
assessed by the Office of Special Trustee. It is hard to understand why 
OST would conclude that we need another ``external evaluation.'' Hoopa 
considers the OST assessment an external evaluation.
    It appears that OST is holding us to a standard that the BIA and 
the Secretary has never achieved. The Hoopa Tribe's computer systems, 
used to manage 57 departments, have been an investment that has 
accumulatively over the past 10 years have cost hundreds of thousands 
of dollars. We've put our funding into developing an infrastructure and 
developing our capability. We've used our funds to build a system that 
works for us. It also works for our auditors and it works for the BIA 
Regional Office who does our evaluations. Why does Hoopa need another 
evaluation? More importantly, who is going to pay for it? If there are 
minor weaknesses in Hoopa's management, and I don't read in the 
assessment any finding that there is, it's because of inadequate 
funding. I believe that the other sec. 139 tribes would say the same.
    I believe that the sec. 139 assessment was, in fact, an application 
of the trust reform ``To Be'' model and turned the intent of sec. 139 
on its head. But the importance of sec. 139 is that it shielded the 
sec. 139 tribes from trust reform/reorganization changes and preserved 
the agreements and working relationships of the 10 tribes and their 
agencies. Sec. 139 required that the tribes demonstrate to the 
Secretary that they have the capability to meet the fiduciary duties of 
the Secretary. I am proud to say to this committee today that Hoopa's 
assessment and, to my knowledge, all the other sec. 139 tribes state, 
``The tribe is capable of performing trust functions.'' We passed this 
arduous test and proved our capability. In conclusion, since Trust 
Reform continues to be a mystery wrapped in an enigma to most of us, 
and the sec. 139 tribes have shown that they are managing at the same 
level or above that of the BIA, I ask that you support extending sec. 
139 for another year. The purpose of sec. 139 was to maintain what is 
working now in Indian country.
    Thank you for this opportunity to speak today.
                                 ______
                                 

      Prepared Statement of Joe Shirley, President, Navajo Nation

    Chairman Nighthorse Campbell, Vice Chairman Inouye and members of 
the committee, I am honored to present testimony today on behalf of the 
Navajo people. The issue under consideration, the proposed 
reorganization of major agencies and functions related to Native 
American trust reform matters in the Department of the Interior, is 
complex and its results will have a tremendous impact on the Navajo 
people. We appreciate the opportunity to express our position to the 
Senate Committee on Indian Affairs. The Navajo Nation requests that the 
following written testimony be submitted in the record:
    There are five objectives that must be met before any proposed 
reorganization:
    No. 1. Commitment from Congress to fund any proposed reorganization 
with new dollars, not at the expense of Native American Programs.
    No. 2. Commitment to full, complete, and good faith government-to-
government consultation with Native American Nations.
    No. 3. Establishment of clear trust standards.
    No. 4. Identify the ``major agencies,'' and their ``functions,'' 
and confirm whether reorganization or reform is necessary.
    No. 5. Be cognizant of the fact that Native American Nations differ 
dramatically in government structure and land base, in order to avoid a 
``one size fits all'' approach to reorganization.
    A reasonable inference drawn from the President's Budget Request 
for fiscal year 2005 is that the Administration is committed to 
reorganizing the Bureau of Indian Affairs, and funding the Office of 
the Special Trustee, with Native American Program dollars. Navajo was 
informed by the Administration that there would not be such reallocated 
funding. Our inference is drawn from the request to decrease Indian 
Health Facilities Construction by $52 million, and BIA Education 
Construction by $65 million, while within the same fiscal year 2005 
request, increase the Office of the Special Trustee's budget by $42 
million. The Navajo Nation believes that one objective that must be met 
is Congress' commitment to appropriate any proposed reorganization only 
with new dollars and not Indian Program dollars, and we seek this 
committee's support of such commitment.
    The foundation of our government-to-government relationship with 
the United States, specifically the Congress and the Administration, we 
feel, has not been adhered to. The Navajo Nation appreciates those 
Members of Congress and those departments within the Administration who 
try their best to meet the obligation of government-to-government 
consultation. However, the recent reorganization of the BIA and OST 
indicates that government-to-government consultation is replaced with a 
process of limited notice, inadequate response time, and the 
replacement with ``presentation'' of the reorganization for 
``consultation'' about the reorganization. Full, complete, and good 
faith consultation with all Native American Nations is essential to any 
successful reorganization, and Navajo seeks Congress' commitment to 
such consultation, and seeks this committee's support in securing such 
commitment. The task of proposing the reorganization of the major 
agencies and functions affecting Native American trust is daunting; but 
it is a task that together we can accomplish.
    The next question that must be answered before any proposed 
reorganization goes forward, is WHAT ARE THE TRUST STANDARDS? We, along 
with other Native American Nations continue to argue that the Secretary 
of the Interior has a Trust Responsibility. We also continue to ask for 
accountability to this Trust Responsibility, but we, including the U.S. 
Government continue to sway on the clear definition of this Trust 
Responsibility. The Cobell litigation is a backdrop for these 
discussions of reorganization and trust reform and, although we support 
those individuals in asserting their claims before the courts, we 
recommend Congress not prematurely propose reorganization and trust 
reform in reaction to such litigation.
    Although the Congress and the Administration may not agree with all 
Native American Nations, and vice-versa, on the Trust Standards, we, at 
a minimum, would like Congress' commitment to entertain Trust 
Standards, and possibly establish clear trust standard, that may be in 
agreement by the Government and all Native American Nations, prior to 
any proposed reorganization of major agencies and their functions or 
trust reform. Without clear trust standards, any reorganization or 
reform would be based on a system that lacks responsibility or 
accountability. Thus, any such proposed reorganization or trust reform 
would still falter, and result in the same lack of responsibility or 
accountability. Let us work together in any proposed reorganization or 
trust reform. Who better to provide you with what works and what 
doesn't work, than the trustee of this relationship.
    In the past, we have worked with the Government in a way where we, 
the Navajo Nation reacted to your proposals rather than proactively 
with your proposals. The Navajo Nation believes that today is truly 
historic. This committee is providing us the opportunity to proactively 
work with any of your proposals, by allowing us to provide suggestions, 
prior to approaching proposed agency and function reorganization and 
trust reform. The Navajo Nation requests a list of those major agencies 
and functions that may be proposed for reorganization. Further, we 
recommend the Congress provide adequate time for Native American 
Nations to review the list and functions. The Navajo Nation would be 
greatly impacted, as we, along with other Native American Nations, work 
with several agencies within the Department of the Interior, that is, 
the Bureau of Land Management, Bureau of Reclamation, and Parks and 
Service, to name a few.
    It is also important to know when an agency and its functions are 
working as intended, thus, not requiring reorganization. Let us, the 
Congress and Native American Nations, as we work together, know when 
reorganization is not the answer and hold steadfast in our possible 
agreements to not reorganize an agency or its functions.
    Finally, the Navajo Nation stresses to this committee, and the 
Congress, to avoid a ``one size fits all'' approach to any proposed 
reorganization or trust reform. As Vice Chairman Senator Inouye noted 
in a statement at the NCAI Legislative Summit 2 weeks ago, we must be 
wary of any trust reform. We must take thorough look at all the 
difference among all Native American Nations. What works for one Native 
Amen*can Nation may not work for another. Let us not go down the road 
of dividing us by proposing a ``one size fits all'' approach. Let us 
work together to identify the differences and address those differences 
through meaningful consultation, which I commented on earlier in my 
testimony. We, both Congress and Native American Nations, will then 
realize our common goal. Trust Responsibility and Accountability.
    In summation, I want to reiterate those points of utmost concern to 
Navajo People and, if addressed appropriately, will ensure a successful 
reorganization and improved relations among the Native American Nations 
and the Federal Government. First, We seek a commitment from Congress 
to fund any proposed reorganization with new dollars, not at the 
expense of Native American Programs. Second, we seek a commitment to 
full, complete, and good faith government-to-government consultation 
with Native American Nations. Third, together we must establish clear 
trust standards or our labor will be for naught. Fourth, we must work 
together to identify those ``major agencies,'' and their ``functions,'' 
subject to reorganization to confirm that reorganization or reform is 
necessary. Finally, as we begin this journey, let us be mindful that 
Native American Nations differ dramatically in government structure and 
land base. A sure road to failure will be to attempt a cheap or quick 
fix; we must avoid a ``one size fits all'' approach to reorganization.
    Thank you.

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