    [Senate Hearing 109-572]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 109-572

        TRIBAL PARITY ACT; AND THE CHEYENNE RIVER SIOUX TRIBE EQUITABLE
                          COMPENSATION AMENDMENTS ACT

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

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                           ONE HUNDRED NINTH CONGRESS

                                 SECOND SESSION

                                       ON

                                     S. 374

    TO PROVIDE COMPENSATION TO THE LOWER BRULE AND CROW CREEK SIOUX TRIBES
    OF SOUTH DAKOTA FOR DAMAGE TO TRIBAL LAND CAUSED BY PICK-SLOAN PROJECTS
                            ALONG THE MISSOURI RIVER

                                    S. 1535

     TO AMEND THE CHEYENNE RIVER SIOUX TRIBE EQUITABLE COMPENSATION ACT TO
     PROVIDE COMPENSATION TO MEMBERS OF THE CHEYENNE RIVER SIOUX TRIBE FOR
            DAMAGE RESULTING FROM THE OAHE DAM AND RESERVOIR PROJECT

                                   __________

                                 JUNE 14, 2006
                                 WASHINGTON, DC

                        U.S. GOVERNMENT PRINTING OFFICE
    28-188                      WASHINGTON : 2006
    _____________________________________________________________________________
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                          COMMITTEE ON INDIAN AFFAIRS

                         JOHN McCAIN, Arizona, Chairman

                  BYRON L. DORGAN, North Dakota, Vice Chairman

    PETE V. DOMENICI, New Mexico         DANIEL K. INOUYE, Hawaii
    CRAIG THOMAS, Wyoming                KENT CONRAD, North Dakota
    GORDON SMITH, Oregon                 DANIEL K. AKAKA, Hawaii
    LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
    MICHAEL D. CRAPO, Idaho              MARIA CANTWELL, Washington
    RICHARD BURR, North Carolina
    TOM COBURN, M.D., Oklahoma

                   John Tahsuda, III, Majority Staff Director

                    Sara G. Garland, Minority Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page
    S. 374 and S. 1535, text of......................................     3
    Statements:
        Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice
          chairman, Committee on Indian Affairs......................    13
        Frazier, Harold, chairman, Cheyenne River Sioux Tribe........    30
        Jandreau, Michael, chairman, Lower Brule Sioux Tribe.........    22
        Johnson, Hon. Tim, U.S. Senator from South Dakota............    13
        Lawson, Michael L., Morgan, Angel and Associates.............    24
        Malcolm, Jeffery D., assistant director, Natural Resources
          and Environment, U.S. Government Accountability Office.....    14
        McCain, Hon. John, U.S. Senator from Arizona, chairman,
          Committee on Indian Affairs................................     1
        Nazzaro, Robin M., director, Natural Resources and
          Environment, U.S. Government Accountability Office.........    14
        Thompson, Lester, chairman, Crow Creek Sioux Tribe...........    23
        Thune, Hon. John, U.S. Senator from South Dakota.............    21
        Vogel, Sharon, Cheyenne River Sioux Tribe....................    32

                                    Appendix

    Prepared statements:
        Frazier, Harold (with attachment)............................    42
        Jandreau, Michael............................................    39
        Lawson, Michael L. (with attachment).........................    75
        LeBeau, Freddy, vice chairman, Oahe Landowners Association...    86
        Nazzaro, Robin M. (with attachments).........................    87
        Thompson, Lester.............................................   167
        Vogel, Sharon................................................   170

        TRIBAL PARITY ACT; AND THE CHEYENNE RIVER SIOUX TRIBE EQUITABLE
                          COMPENSATION AMENDMENTS ACT

                                  ----------

                            WEDNESDAY, JUNE 14, 2006

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 9:35 a.m. in room
    485 Senate Russell Office Building, Hon. John McCain (chairman
    of the Senate Committee on Indian Affairs) presiding.
        Present: Senators McCain, Dorgan, Johnson, and Thune.

       STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA,
                 CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

        The Chairman. Good morning. The hearing this morning will
    address two measures that are currently before the committee:
    S. 374, known as the Tribal Parity Act, and S. 1535, the
    Cheyenne River Sioux Tribe Equitable Compensation Amendments
    Act of 2005.
        The first two panels of the hearing will be addressing S.
    374, and the third panel will address S. 1535. The principal
    reason for the hearing on S. 374 is to address a recent report
    issued by the GAO at the committee's request. The committee
    marked up this bill back in late June 2005. After that, but
    before a committee report was filed, a representative of GAO
    contacted committee staff expressing some concern about
    language in the bill suggesting that the compensation levels of
    the bill were based on a methodology that had been determined
    inappropriate by the GAO. The GAO staff indicated that in
    certain respects, the methodology used to calculate the
    compensation levels in the bill deviated from the GAO
    methodology used in determining the additional compensation in
    legislation enacted for other Indian tribes impacted by Pick-
    Sloan projects on the Missouri River.
        Therefore, I asked the GAO to analyze the methodology used
    for S. 374 and to prepare the report which is the focus of the
    first part of the hearing today.
        The second matter of the hearing, S. 1535, would amend the
    Cheyenne River Sioux Tribe Equitable Compensation Act that was
    passed by Congress in the year 2000. The principal amendment to
    the 2000 act would accelerate the payment schedule and change
    the funding source from annual appropriations to revenues
    derived from the Pick-Sloan.
        [Text of S. 374 and S. 1535 follow:]

        The Chairman. I would like to express my appreciation to
    Senator Johnson, Senator Thune, and Senator Dorgan for their
    persistence and focus and attention on this issue. It is a bit
    complex. It sounds a bit arcane to many people, but it is
    obviously very, very important to the tribes that reside in
    their States, and I am pleased to see that their commitment and
    dedication to resolving this issue may bring us much closer as
    a result of their hard work.
        Senator Dorgan.

      STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH
           DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

        Senator Dorgan. Senator McCain, thank you very much. I want
    to thank my colleagues Senator Johnson and Senator Thune for
    their leadership on the bills that are important here to the
    tribes in South Dakota. We in North Dakota know a fair amount
    about the Pick-Sloan Missouri River Basin Program and the
    benefits that it was to provide to the residents of the
    Missouri River valley in the upstream States. But those
    benefits have come with very significant costs in many
    instances, particularly and especially for tribal people.
        I know from the tribes in North Dakota how detrimental that
    dam construction was and has been to their communities,
    changing the way of life and the subsistence for many tribes.
    Just for my colleague Senator Johnson's benefit, my father as a
    very young man lived in Elbow Woods, ND herding horses. Elbow
    Woods, ND no longer exists. It is now under water. It was
    inundated with Lake Sacajawea. It has been under water now for
    50 years. That community no longer exist, and all those who
    lived there, including the hospital that existed there, they
    moved, except the hospital didn't reopen anyplace. That is
    another issue we are still working on today, 50 years later.
        The point is, they moved, significant things changed, the
    diets changed, opportunities changed. So I well understand the
    motive and the interest behind this legislation. I think
    Senator Johnson and Senator Thune are to be commended, and I am
    appreciative of the chairman for holding this hearing today.
        The Chairman. Senator Johnson.

     STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA

        Senator Johnson. Thank you, Chairman McCain and Vice
    Chairman Dorgan, as well as the staff of the Committee on
    Indian Affairs, for agreeing to hold this hearing.
        The Tribal Parity Act and the Cheyenne River Equitable
    Compensation Amendments Act are of the utmost importance to the
    tribes involved and the attention the Committee on Indian
    Affairs has given to the Great Plains is appreciated by all the
    tribes in my State.
        I would also like to welcome our South Dakota witnesses to
    the committee. Chairman Jandreau of the Lower Brule Tribe is an
    institution in South Dakota, having served as tribal chairman
    for over 27 years now. His experience and his perspective have
    been both kindly provided and a great benefit to my office over
    the years. Chairman Frazier of the Cheyenne River Tribe has
    been a frequent guest of the committee and a tireless advocate
    for his tribe in Washington. Chairman Thompson of the Crow
    Creek Tribe is new to the job and comes in with the hopes of
    his community for building a better future.
        Sharon Vogel has been a great advocate for economic
    development on Cheyenne River. I also want to extend a big
    welcome to Freddy LeBeau and the others I have met with regard
    to the importance of these two bills to the tribes and the
    individual tribal members involved.
        The legislation to be discussed in this hearing deals with
    the Pick-Sloan project on the Missouri River and the impacts it
    continues to have on three tribes in South Dakota. The Lower
    Brule and the Crow Creek Tribes were both significantly
    impacted by the Fort Randall Dam and the Big Bend Dam, which
    flooded parts of both reservations in 1952 and then again in
    1963, forcing many families to relocate twice.
        Likewise, the Oahe Dam near Pierre, SD was completed in
    1958 and resulted in the loss of 104,420 acres of land to the
    Cheyenne River Tribe. No amount of compensation could ever
    fully account for everything that these tribes lost. However,
    Congress has twice acted to provide some compensation to
    mitigate the loss of each of these tribes. There still is more
    that needs to be done.
        While we can never erase the damage that has been done to
    the tribes and tribal members of the Missouri River, these
    bills go a long way toward helping the Lower Brule, the Crow
    Creek, and the Cheyenne River recover from the harm inflicted
    more than 40 years ago.
        I want to especially thank Senator Thune for introducing
    the Tribal Parity Act and for cosponsoring the Cheyenne River
    Sioux Tribe Equitable Compensation Amendments Act of 2005.
    Their leadership on these issues and presence here today are
    greatly appreciated.
        Again, I want to thank the Indian Affairs Committee for
    allowing this hearing, and I look forward to hearing from the
    witnesses.
        The Chairman. Thank you, sir.
        Our first panel is Robin M. Nazzaro who is the director of
    the Natural Resources and Environment, Government
    Accountability Office. She is accompanied by Jeffery Malcolm,
    assistant director.
        Welcome, Ms. Nazzaro. Welcome, Mr. Malcolm.

    STATEMENT OF ROBIN M. NAZZARO, DIRECTOR, NATURAL RESOURCES AND
     ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY
                           JEFFERY MALCOLM,
                           ASSISTANT DIRECTOR

        Ms. Nazzaro. Thank you, Mr. Chairman and members of the
    committee. I am pleased to be here today to discuss the
    compensation claims of the Crow Creek and Lower Brule Tribes.
        As you know, from 1946 to 1966,the Federal Government
    constructed the Fort Randall and Big Bend Dams as flood control
    projects on the Missouri River in South Dakota. Installation of
    the dams caused the permanent flooding of approximately 38,000
    acres of the tribes' reservations. During construction, the
    tribes entered into negotiations with the Federal Government
    for compensation for that land. In both cases, they were unable
    to reach an negotiated settlement and Congress imposed
    legislative settlements that were less than the amounts that
    the tribes had requested.
        In the 1990's, the tribes sought and received additional
    compensation. Tribes at five other reservations also lost land
    to flood control projects, received compensation for damages,
    and requested and received additional compensation. Prior to
    the Congress authorizing additional compensation to the tribes
    at three other reservations, the GAO was asked to review their
    claims. For these tribes, we found the economic analysis used
    to justify their claims to be unreliable and we suggested that
    the Congress not rely on them as a basis for providing
    additional compensation.
        As an alternative, we suggested that if the Congress
    determined that additional compensation was warranted, it could
    determine the amount of compensation by calculating the
    difference between the tribes's final settlement proposal,
    which we refer to as the tribes's final asking price, and the
    amount of compensation the Congress originally authorized.
        We used the inflation rate and an interest rate to adjust
    the difference to reflect a range of current values, using the
    inflation rate for the lower end of the range and the interest
    rate for the higher end.
        In 2003, the Crow Creek and Lower Brule Tribes hired a
    consultant, Dr. Lawson, to determine if they were due further
    additional compensation based on the method we proposed. As a
    result of his analyses, the tribes are currently seeking a
    third round of compensation totaling about $230 million. The
    tribes assert that their calculations for additional
    compensation will bring them into parity with the additional
    compensation provided to the other tribes on the Missouri
    River.
        After assessing Dr. Lawson's methods and analysis for
    determining additional compensation, we found his approach
    differed from the approach we used in two ways. First, Dr.
    Lawson did not use the tribes's final asking price as the
    starting point. During settlement negotiations for the Fort
    Randall and Big Bend Dams, as was the case with the
    negotiations for the other dams that we reviewed, the tribes
    made a number of settlement proposals.
        In calculating additional compensation amounts, we used the
    tribes's final asking prices because we believed they
    represented the most complete and realistic amounts. In
    contrast, Dr. Lawson used selected numbers from a variety of
    tribal settlement proposals, several that were not from the
    tribes's final asking prices.
        Second, Dr. Lawson calculated only the highest additional
    compensation dollar value, rather than a range of possible
    additional compensation based on different adjustment factors.
    He used the corporate bond rate to develop a single figure for
    each tribe. His justification was that the use of the high end
    of our range would ensure parity with the amounts the tribes at
    Fort Berthold and the Cheyenne River Tribe received.
        However, as our chart shows, the Congress has not always
    chosen to use the highest value in the ranges we estimated. In
    the case of the Standing Rock Tribe, the Congress chose to
    provide additional compensation closer to the lower end of the
    range we estimated.
        Although the additional compensation amounts provided in
    the 1990's were not calculated using our approach, the amounts
    were generally within the ranges we would have proposed.
    Moreover, the additional compensation already authorized for
    the tribes in the 1990's is consistent with the additional
    compensation authorized for the other tribes on the Missouri
    River.
        The chart I brought with me today shows the ranges we have
    calculated for the five tribes on the Missouri River and the
    additional compensation authorized by the Congress. Rather than
    bringing the Crow Creek and Lower Brule Tribes into parity with
    the additional compensation provided to the other tribes, we
    believe that the compensation under consideration would
    catapult them ahead of the other tribes and set a precedent for
    the other tribes to seek a third round of compensation.
        Notwithstanding the results of our analysis, the Congress
    will ultimately need to decide whether additional compensation
    should be provided and, if so, how much it should be. We
    recognize that the issues can be sensitive, complex and
    controversial. Our analysis is intended to assist the Congress
    in this regard.
        Thank you, Mr. Chairman. This concludes my prepared
    statement. I would be happy to respond to any questions that
    you or members of the committee may have at this time.
        [Prepared statement of Ms. Nazzaro appears in apendix.]
        The Chairman. Do you have a number that you think is
    reasonable, or is that out of the scope of your studies here?
        Ms. Nazzaro. Well, what we were asked to do, sir, was to
    look at the compensation proposal. What we did is looked at the
    additional compensation the two tribes previously received, and
    while we didn't calculate that prior to Congress authorizing
    those trust funds, it would have been in the range. So what
    they had already received put them on parity with the other
    five tribes on the Missouri River.
        The Chairman. Which is, roughly?
        Ms. Nazzaro. Which tribes?
        The Chairman. You said, ``to put them on parity.'' How much
    would that be?
        Ms. Nazzaro. We estimated for Crow Creek the range would
    have been between $6.5 million and $21.4 million. Crow Creek
    received $27.5 million, so they were actually a little bit
    above our range. For the Lower Brule, the range would have been
    $12.2 million to $40.9 million, and they received additional
    compensation of $39.3 million, so they were already within our
    range. So we feel both of them are near the high end of what we
    would have proposed had we reviewed it prior to the additional
    compensation. So that is why we are saying the additional
    compensation currently being proposed would actually catapult
    them above what the other tribes received.
        The Chairman. And this bill, as I understand it, as
    proposed would raise it from $39 million to $186 million?
        Mr. Malcolm. That is correct.
        The Chairman. That is a pretty big difference in numbers
    here. How do you account for that?
        Ms. Nazzaro. The additional compensation that they are
    asking for? As I mentioned, the baseline that they used was
    different than the baseline that we used. When we started using
    our methodology, we looked at the final asking price that the
    tribes had asked during the negotiation process. We then
    compared that to the difference in what they had received
    initially. That difference we then applied an interest rate
    which would have then given a reflection of what their spending
    power would have been, as well as a corporate bond rate which
    would have been a high end had they invested the funds.
        That gave the range of what we were proposing would have
    been appropriate for the additional compensation.
        The Chairman. I don't know a lot about this issue, Ms.
    Nazzaro. It is I think appropriate for members of this
    committee to rely on the views of people, the members who
    reside in the States and the various inputs that we receive.
    But it seems to me there is a very large disparity in amounts
    of money. Is it based on acres that were inundated? What was
    the basic formula for this compensation?
        Ms. Nazzaro. The original compensation, there were a number
    of studies that were done. The Corps of Engineers did a study.
    The Department of the Interior did studies. They actually did a
    pretty good job of inventorying all of the assets that the
    tribes had at the time and what was going to be compensated.
    They also looked at what potential earning power the tribes
    would have had from some of these assets such as timber that
    were no longer going to be available to them.
        That was the basis for the original compensation. As I
    said, that was not what the tribes were asking for. Initially,
    the Federal Government gave all the tribes less than what they
    were asking. The five tribes have come back and asked for a
    second round of compensation which was awarded to each one of
    them, and those five would have fallen along the range of what
    we had proposed using our methodology, starting with this final
    asking price, and them somewhere within the range reflecting
    the current value of that money, the difference of the money.
        The Chairman. Well, I guess I would ask the next panel and
    my colleague from South Dakota, is this the last time we are
    going to come back and ask for more money? It looks to me like
    this is the third or fourth trip to the trough here. I would be
    interested in that.
        Senator Dorgan.
        Senator Dorgan. Thank you, Mr. Chairman.
        Just briefly, it is the case both I think in North Dakota,
    because we have been through this, and also with respect to
    South Dakota and other circumstances along the Missouri, when
    the Pick-Sloan project was built and the main-stem dams were
    created and the reservoirs flooded lands that were on Indian
    reservations, the Indians were under-compensated for that. You
    believe as well that the Indians were not compensated
    adequately originally by the Federal Government. Is that
    correct?
        Ms. Nazzaro. We have not assessed whether the original
    authorization was adequate or not. We have looked at the
    studies that were done. We know what the basis was for the
    Government's negotiated price, and we know somewhat about the
    basis for what the tribes were asking. We know the tribes did
    not get compensation that they felt was equitable at that time.
        Senator Dorgan. I think we have been back through this with
    respect to some North Dakota tribes. It is pretty clear that
    back then, one-half century ago when these lands were taken,
    that the compensation was not adequate to respond to the needs
    of the tribes that were going to exist after all of that land
    was taken and flooded and so on. And their lives were changed
    dramatically.
        I was just trying to understand what you are saying with
    this report, and I think I now do understand it.
        Ms. Nazzaro. We never objected to the second round of
    compensation. We just tried to provide a method that should
    Congress determine if a second round was due, what methodology
    they could use to try to put some equity to that, given that
    the tribes did not feel they had parity at that point.
        Senator Dorgan. I understand. The fact is, the chairman's
    question is a legitimate question as well. I mean, there needs
    to be settlement with respect to these issues, and you need to
    establish what is a fair level of compensation, and then all
    the parties need to move on. You can't come again and again and
    again.
        I go back to the point I asked originally. I think it is
    clear, at least it was with respect to our having gone through
    this with the North Dakota tribes, that the original
    compensation was inadequate, and that required the Congress to
    readdress that.
        Mr. Chairman, thank you very much.
        The Chairman. Senator Johnson.
        Senator Johnson. Thank you.
        I think it is important to note that the two tribes we are
    talking about here are relatively modest-sized tribes. The Crow
    Creek is in Buffalo County, SD, which is the poorest county in
    America. And I think it is important than when we base a fair
    price based on the last asking price of tribes, that presumes a
    fair negotiating balance between the tribes and the Federal
    Government at the time. The fact is, at the time the land was
    already flooded. These people were desperately poor. Their
    negotiating capability is not very sophisticated.
        So to this day, they are paying the price for their last
    offer, when in fact I think the last offer may not have been as
    equitable as it needed to be.
        In any event, I want to thank the GAO for its testimony
    today. I want to make it clear that we as members of the
    committee are not seeking to simply augment the trust fund for
    the sake of augmenting the trust fund. What we are attempting
    to do here is to arrive at a systematic, equitable and fair way
    of determining what a fair trust fund compensation ought to be,
    and we want to come to that conclusion with great finality, so
    that as the chairman notes, this isn't going to be some
    perennial issue where we come back and seek additional trust
    fund compensation, but that we come to a final conclusion and
    that will be that.
        The GAO report states that the drawn out negotiations and
    the amounts of the tribes's final asking price do not support
    the conclusion that the tribes simply capitulated and accepted
    whatever the Government offered. The tables this statement
    refers to on pages 18, 19, and 20 do not include initial
    settlement proposals and instead have a settlement figure used
    by the tribes's consultant.
        I see that the additional table on table two that you have
    provided as part of your testimony includes initial settlement
    proposals. What accounts for the differences between the
    initial proposals and the proposals used by the tribes's
    consultant?
        Mr. Malcolm. In a couple of cases, there was actually, he
    did use the tribes's initial settlement offer. For Fort Randall
    Dam and for Lower Brule, in fact, he used the initial offer in
    a couple of instances, I believe for direct and indirect
    damages, which was two of the components. That was from 1954.
        Conversely, for Crow Creek for the same dam, he used
    numbers from 1957. So again, he used selected numbers from a
    variety of offers over points in time. But yes, over the course
    of the negotiations, the offers for individual components
    fluctuated and went up and down. So there was a lot of
    variability. Again, it was just part of the negotiations.
    Either the tribes received additional information through
    negotiations with the Government. They may have been willing to
    accept less for one component as a tradeoff for receiving more
    in another component.
        Ms. Nazzaro. If I could add, though, Mr. Johnson, in total,
    if you look at what the tribes asked in their initial price
    versus their final asking price, the final asking price in
    total was higher. Actually in 12 of the 15 components, the
    indirect, the direct, the rehabilitation et cetera, 12 of the
    15 are either higher in the final asking price or equal to the
    initial proposal.
        We went through extensive records at the archives, as well
    as Department of the Interior's library to get an
    understanding, to make sure that we weren't applying just an
    arbitrary decision to use the final asking price, but to make
    sure that the tribes hadn't capitulated, hadn't been worn down
    through the negotiations, and that the numbers just kept
    falling.
        Senator Johnson. The numbers suggested in this bill are
    within the range of what the negotiations were. Is that fair to
    say?
        Ms. Nazzaro. The number that the tribe is requesting in
    this bill would exceed what we are----
        Senator Johnson. It exceeds what you think is right, but it
    falls within the range of what the negotiations were at the
    time.
        Mr. Malcolm. In one sense. It does in the sense that those
    individual components that were selected were offered as part
    of the tribal settlements at various points in time. However,
    the tribes as a cohesive settlement proposal never had a
    proposal that consisted of those dollar values at a point in
    time. So for example in 1954, if you want to use an original
    settlement, rather than consistently using all the numbers from
    1954, he instead chose to use numbers picking various
    components at different points in time. So historically from
    that point, no, the tribes never made a settlement proposal
    that consisted of the numbers he used as his starting point.
        Senator Johnson. I understand that the GAO's basis for
    using final asking price is the assumption that better
    information will emerge throughout negotiations leading to a
    closer approximation of the amounts asked for, with the value
    of actual loss to the parties. Inconsistency of the amounts
    asked for by the tribes between initial asking price, Dr.
    Lawson's figures, and the final asking price shows considerable
    inconsistency at what was asked for at different points in
    time. How do you justify this inconsistency with the notion
    that better information is the prime factor influencing the
    tribe's settlement proposals or their asking process?
        Ms. Nazzaro. I don't think we said it was just better
    information, but better information and more realistic. As I
    said, in the number of cases, though, we do see where the final
    asking price was higher than the original proposal, so in
    there, we do feel that more information came to light as to the
    value of the assets, particularly where you are talking direct
    damages. For example, in the case of Crow Creek, direct damages
    originally they were asking $566,000, and in the final asking
    price they asked for $641,000.
        Mr. Malcolm. One of the other main components here that is
    the main difference in all this is called ``rehabilitation.''
    That, again, was to enhance the economic standing of all the
    tribe and all of its members. So a lot of the funding, over 50
    percent in most cases for both tribes, were really as a result
    of a kind of a termination era policy in the 1950's and 1960's.
    So the variability you see is really largely in the
    rehabilitation figure, so it is just in one component, and that
    component was not directly related. It was intertwined with the
    negotiations, but it wasn't directly related to damages from
    the dam.
        Senator Johnson. Finally, I know the tribes have serious
    concerns with the conclusion in your report that states:

        While our analysis does not support the additional
    compensation amounts contained in the parity bill, the Congress
    will ultimately decide whether additional compensation should
    be provided, and if so, how much it should be.

        I understand the GAO does not take positions on pending
    legislation, so could you please clarify the role of the GAO in
    this analysis and discuss whether or not this conclusion was a
    policy statement of the GAO?
        Ms. Nazzaro. I would say this was not a policy statement
    because as we said, it is not our decision to decide whether
    the tribes are due additional compensation. What we were asked
    to look at was what was the difference between, or whether the
    numbers put forward by the consultant were consistent with the
    methodology that we had used when we had reviewed prior tribal
    requests.
        In this case, we found there were some differences in the
    methodology that he applied. Ultimately, we looked at what the
    tribes had requested initially, what they received in
    additional compensation, and tried to apply our formula, and
    that is where we came to the conclusion that what they had
    received in the second round of compensation was consistent
    with what we would have proposed had we looked at it prior.
        We do realize that there are other factors that may need to
    come into the discussion over and above the kind of analysis we
    did that would certainly lend itself to your ultimate
    decisionmaking. So we did not intend to usurp that power.
        Senator Johnson. Right. Well, thank you. Obviously, this is
    legislation that has passed the Senate on three occasions and
    it is my hope that we can arrive at a number. It is my
    understanding that the consultants to the tribe concede that
    there was some mathematical error in arriving at the figures in
    the original bill and that they would be inclined to adjust
    that somewhat downward, but it is my hope that we can bring a
    final closure to the disasters that were visited upon these
    tribes, and as the Chairman noted, make this an issue that will
    not need to be revisited and to bring it to final closure.
        So thank you again to the GAO.
        Mr. Malcolm. Thank you.
        The Chairman. Senator Thune, do you have any questions?
        Senator Thune. No; thank you, Mr. Chairman.
        The Chairman. Thank you very much. Thanks for your help on
    this issue. We appreciate it very much.
        Our next panel is Michael Jandreau, who is the chairman of
    the Lower Brule Sioux Tribe; Lester Thompson, who is the
    chairman of the Crow Creek Sioux Tribe; and Michael Lawson of
    Morgan, Angel and Associates, Washington, DC.
        I believe that Senator Thune wanted to make an opening
    comment.

      STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM SOUTH DAKOTA

        Senator Thune. Mr. Chairman, I thank you for giving me the
    opportunity to participate in the hearing today, although I am
    not a member of this committee. I do want to recognize, I know
    that there are a large number of elders in the room who have
    come here from South Dakota because they care passionately
    about this issue. I want to welcome them and thank them for
    being here today.
        Mr. Chairman and members of the committee, Senator Johnson,
    my colleague from South Dakota, I am delighted to be able to
    introduce three of our distinguished tribal chairmen from South
    Dakota and the great Sioux Nation. Chairman Mike Jandreau of
    Lower Brule is the senior chairman in South Dakota and the
    Great Plains region. He has been chairman for 27 years and has
    been on the council for 34 years, which is an extraordinary
    accomplishment for any elected official, particularly in Indian
    country.
        I would also like to commend to the committee's attention a
    recent article by Chairman Jandreau entitled ``Flattening the
    Reservations,'' which outlines a comprehensive economic program
    for Indian country. Picking up on the book ``The World is
    Flat'' by Thomas Friedman, it suggests how the reservations
    might fully participate in our economy. We would do well to
    consider his thoughts.
        Chairman Lester Thompson from Crow Creek is our most junior
    chairman, elected just a few months ago. Buffalo County, SD,
    where the Crow Creek Indian Reservation is located, is now
    ranked the poorest county in America. Obviously, Chairman
    Thompson faces many difficult challenges, but I believe he is
    the right man for the job. His uncle was chair at Crow Creek,
    as was his grandmother. In fact, his grandmother was the first
    woman to serve as tribal chair.
        Both chairmen appear today here in support of the Tribal
    Parity Act. Mr. Chairman, as you know, this legislation passed
    the Senate on three occasions in the 108th Congress, but died
    at the end of the Congress in the House as there was not enough
    time to consider it.
        Although he will be testifying as a member of the next
    panel on the Cheyenne River Sioux Tribe Equitable Compensation
    Amendments bill that I cosponsored with Senator Johnson, I
    would also like to take this opportunity to introduce Chairman
    Harold Frazier of the Cheyenne River Sioux Tribe. Chairman
    Frazier is currently serving his first term as tribal chairman
    of the Cheyenne River Sioux Tribe. He was elected by popular
    vote in 2002, and since 2003 has also served as chairman of the
    Great Plains Tribal Chairmans Association, representing 16
    tribes from South Dakota, North Dakota, and Nebraska.
        Mr. Chairman, I appreciate your holding this hearing so the
    committee might determine what is fair compensation for the
    Lower Brule and Crow Creek Tribes. As the GAO pointed out in
    its report, this is a sensitive and complex issue. The Pick-
    Sloan project resulted in thousands of acres being flooded, and
    the population being relocated not once, but twice. It is
    important to resolve this matter to allow these chairmen to
    successfully prepare their reservation for the future.
        So Mr. Chairman, I thank you for this opportunity to
    welcome the chairmen here to join us at the hearing today.
        The Chairman. Thank you very much, Senator Thune, and thank
    you for your active participation in this issue that I know is
    very important to all the people of your State. I thank you for
    your partnership with Senator Johnson as we try to move this
    legislation forward.
        I welcome the witnesses, and we will begin with our
    youngest witness, Michael Jandreau. [Laughter.]

      STATEMENT OF MICHAEL JANDREAU, CHAIRMAN, LOWER BRULE SIOUX
                                 TRIBE

        Mr. Jandreau. First, let me say thank you very much for
    allowing this opportunity to testify before you today.
        While the irony of this hearing brings into my mind 50 some
    years ago, my mother was a council member and was involved in
    the negotiations regarding the issue of settlement for the
    takings. At that time, the idea that was put forward was that
    the Government knew better than the tribes what their values
    were and what they should be compensated for. That was not
    entirely true. Our people knew what they were asking for and
    wholly and fully expected to receive it.
        Mr. Chairman, beyond the numbers and the methodology, and
    what methodology to use, and how to compound interest
    correctly, there is a policy question and only Congress can
    decide. The GAO says the tribes differ from the approach used
    in its prior reports by not using the tribes's final asking
    price. The clear implication is that there is only one
    standard, only one correct method of evaluation. We do not
    believe that this is correct.
        Congress has never taken the position that there is only
    one way to determine what fair and reasonable compensation is
    for the Missouri River tribes. To the best of my knowledge,
    until this report, the GAO has never said that in their opinion
    there is only one appropriate method to calculate compensation.
        When our lands were flooded, we asked for in current
    dollars $432 million. That is what I believe would be fair
    compensation. We did not ask a high figure with the idea of
    negotiating a true or fair low price. Our tribe thought $432
    million was the correct amount in today's dollars.
        The GAO looks to the final asking price as if that was our
    real bottomline. That may be how a negotiation is conducted on
    Wall Street, but this is not a negotiation. The land was
    flooded. Our people were already displaced. The final asking
    price was a very poor indication of the real and fair value of
    the damage caused to my tribe by the dams on the Missouri
    River.
        If the Congress were to provide Lower Brule with an
    additional $129 million, supplementing our existing trust fund
    of $39.3 million, it is still far below $432 million, but it
    comes closer to fair compensation.
        I ask this committee on behalf of the United States to use
    its discretion and to make a policy decision that provides an
    additional $121 million for Lower Brule and $69 million for the
    Crow Creek Tribe. I ask that not because we want to be a burden
    on this country, but I ask that we may use the values to create
    a real, enduring and long-lasting life for the members of our
    tribe and our reservation.
        The question was asked earlier: Is this going to be our
    final time to come before Congress and ask for, on this issue,
    additional dollars. It is my word to you that I will recommend
    to my tribal council and to the people of our tribe that this
    would be out last our last time at this issue. However, being a
    real democracy, they have a right to state their own opinions
    in this matter.
        Thank you.
        [Prepared statement of Mr. Jandreau appears in appendix.]
        The Chairman. Well, sir, I think they have the right to
    express their opinion, but if we keep revisiting this issue,
    you will not find a great deal of sympathy from the chairman of
    this committee.
        Mr. Jandreau. Thank you very much for your directness.
        The Chairman. Chairman Thompson.

     STATEMENT OF LESTER THOMPSON, CHAIRMAN, CROW CREEK SIOUX TRIBE

        Mr. Thompson. Thank you, Mr. Chairman.
        I would like to thank Mr. Thune and Mr. Johnson for their
    valiant efforts behind this act. I know they put a lot of time
    and committed to a lot of hours into pushing this forward to
    benefit our tribes.
        Mr. Chairman, members of the committee, the statements you
    have heard from Chairman Jandreau are very true and I agree
    with him on the subjects that he had touched on. There was no
    negotiation at the time that the people of both tribes were
    uprooted and displaced. It came down to move or else. The
    detrimental impact that this event had on both tribes, socially
    and economically, has rippled down through time and hit my
    generation with the force of a tidal wave. You really can't put
    a price on this.
        Mr. Chairman, if there is one thing I agree with the GAO on
    is that compensation issues can be sensitive, complex and
    controversial. The GAO also said Congress will decide whether
    additional compensation should be provided. The Parity Act
    presents a policy issue for Congress. The amount that has
    already been awarded to the tribes is minimal, and very minute.
    These awards are only a paper transaction. We only draw a small
    amount of interest off these dollars. This is not enough to
    sustain a true economic base.
        As stated by Mr. Johnson and Mr. Thune, Crow Creek
    Reservation resides in Buffalo County, which is the poorest in
    the country. This, to me, is a national shame. My fellow
    council members and I, as newly elected leaders, have taken
    major steps in dealing with our financial situation. We are
    currently laying a new foundation and focusing on safeguarding
    funding received by our tribe by establishing internal
    processes for accountability and have sought outside advisers
    to assist in financial direction and investments.
        The Parity Act would help greatly with my tribe and
    immensely. I urge the committee to stay the course. The Parity
    Act has passed the Senate three times and this committee twice.
    Please allow the legislation to move forward. The compensation
    would be a building block toward a better future for my tribe.
        With this said, Mr. Chairman, I will lay a challenge down
    to you and to all the other Senators that you serve with, to
    come to South Dakota and to see and to visit the people of Crow
    Creek and Lower Brule. For this way, you see how beneficial the
    Parity Act would be toward our area.
        Thank you.
        [Prepared statement of Mr. Thompson appears in appendix.]
        The Chairman. Thank you very much.
        Dr. Lawson.

      STATEMENT OF MICHAEL L. LAWSON, MORGAN, ANGEL AND ASSOCIATES

        Mr. Lawson. Mr. Chairman and members of the committee, I am
    grateful to have the opportunity to provide testimony today.
    With your permission, I would like to submit my written
    statement for the hearing record.
        The Chairman. Without objection.
        Mr. Lawson. Then I will summarize my findings.
        My name is Michael Lawson and I am a historical consultant
    with Morgan, Angel and Associates. In 2003, I authored a report
    that provided the factual basis for the legislation that was
    reintroduced in the 109th Congress as S. 374. The General
    Accountability Office [GAO] report issued on May 19 was highly
    critical of my study. It concluded that my report did not
    follow the approach recommended by the GAO in two prior reports
    involving Missouri River tribes. This is because it did not
    base the difference on the tribes's final asking price or last
    best offers.
        I did not use the tribes's final asking prices as the basis
    for the difference for three reasons. The first reason was
    because the GAO's previous two reports did not clarify that its
    references to tribal prices ``at the time of the taking'' was
    to be understood as meaning the final asking price.
        The second reason is because I do not believe that these
    so-called ``last best offers'' provide a fair standard on which
    to base additional compensation. It is my view that settlements
    based on final asking prices award the tribes not for the fair
    market value of their losses, but rather for the ability or
    inability of their tribal leaders to negotiate.
        My third reason was because my historical research
    indicated that those final tribal offers were made under
    conditions of duress. The chronology I have developed to
    supplement my statement illustrates the context of the tribes's
    situation at the time their final offers were made.
        The GAO report was also critical that I used only the high
    range of their approach, and did not project the low range
    based on the annual inflation rate, but Congress has
    established no precedent for basing additional compensation to
    the Missouri River tribes at that rate, and calculation at that
    rate has no value.
        The GAO report stated that my calculations of the total
    amounts requested in the current bill incorrectly adjusted for
    the additional compensation received by the Crow Creek Sioux
    Tribe in 1996, and by the Lower Brule Sioux Tribe in 1997. I
    acknowledge these miscalculations and I have adjusted the
    amounts accordingly.
        As a result, the amount for the Lower Brule Sioux Tribe in
    section 3 of S. 374 should be $169,122,085 instead of
    $186,822,140. The amount for the Crow Creek Sioux Tribe in
    section 4 of the bill should be $96,722,084 rather than
    $105,917,853. These new amounts reflect both my adjustments in
    the calculations and the current 2006 value in the differences.
        It is my view that the tribal asking prices that I used in
    my report more accurately reflect what the tribes considered to
    be the fair market value of their losses. They also fall within
    the mid-range of the tribes's total request during the course
    of negotiations. The amounts requested in this bill also fall
    within the mid-range of possible alternative approaches as I
    have outlined in the second table of my written statement.
        While the GAO and I have differed over approaches and
    statistics, this bill is really about the policy of trying to
    establish tribal parity. The additional compensation that
    Congress has provided to seven of the Missouri River tribes
    between 1992 and 2002 appears to be all over the map. Congress
    has applied four different approaches and the perception of the
    tribes is that these settlements have not been equitable.
        After listening to the remarks of the tribal chairmen here
    today, there should be no doubt that the Crow Creek and Lower
    Brule Sioux Tribes suffered irreparable damages and sacrificed
    much of their way of life for the greater progress of this
    Nation. In 1982, the late Sioux author and historian Vine
    Deloria, Jr., wrote:

        Their reservations were so drastically impacted that they
    have never been able to establish viable communities since
    their lands were lost.

        In conclusion, it is my view that S. 374 offers an
    equitable and reasonable approach to providing additional
    compensation to these two tribes. Therefore, I urge the
    committee to support this bill as amended by the adjusted
    calculations. In my considered opinion, this legislation
    represents a fair and final compensation package. It also
    provides a just conclusion to an extremely difficult chapter in
    the history of the relationship between the United States and
    the Crow Creek and Lower Brule Sioux Tribes.
        This concludes my remarks. I would be happy to answer any
    questions you may have.
        [Prepared statement of Mr. Lawson appears in appendix.]
        The Chairman. Thank you very much.
        Senator Johnson.
        Senator Johnson. Thank you, Mr. Chairman.
        I want to thank Chairman Jandreau and Chairman Thompson for
    their excellent testimony here today. I want to thank you for
    traveling to Washington to appear before this committee.
        Let me ask the two chairmen, what do you think would be
    accomplished with the proceeds of the parity bill? And do you
    believe that the parity bill does in fact represent final
    compensation, at least as far as you are concerned as leaders
    of your tribes?
        Mr. Jandreau. First, Mr. Chairman, I also had a written
    statement for the record and I ask that it be made a part of
    the record.
        The Chairman. Without objection.
        Mr. Jandreau. As far as the results of what would happen
    with the trust fund and the dollars that we look to be
    extracted from that, we have done a plan that was submitted to
    Congress and was submitted to Interior. It was submitted to
    every Federal agency with whom we are involved. Under that
    plan, we have identified how we are truly trying to reconstruct
    the total infrastructure of our tribe.
        We have been successful in a large portion of that. We
    still have a long, long way to go. The dollars that we are able
    to utilize, we expend nearly $1 million a year to hire 270
    people to work in our community, providing them jobs that
    otherwise would not be able to be had. We are in the process of
    completing a new detention facility that was funded nearly 40
    percent by the tribe, and the other 60 percent with the
    Department of Justice. It was a detention facility, a
    courthouse, and a police station. Our police station had been
    condemned for the last 20 some odd years. We finally are able
    to get that completed.
        We have completed a community facility. We have completed
    an administration building that houses both the tribe and the
    Bureau of Indian Affairs offices. We have utilized our dollars
    to assist housing, to assist our wildlife program, to assist
    with the development of an opportunity to utilize some of the
    products grown on our corporate farm, to reach a new level of
    employment on our reservation by manufacturing and packaging
    popcorn.
        So the dollars that we do receive will be used further to
    assist with our education, which we also assist with; with
    those opportunities necessary for elders and assisted living
    facilities. The list goes on and on. I did not bring a copy of
    our plan with me today, but I will submit that to the committee
    for your use.
        The dollars that are necessary also allow us to delve
    deeper into economic development in its truest sense, utilizing
    the resources of the tribe to have sustainable and long-range
    employment and economic opportunities. Those are the types of
    things that we would do.
        Thank you.
        Senator Johnson. Chairman Thompson, any observations?
        Mr. Thompson. Yes; with the infrastructure money that has
    been sent down and we have received in the past, we currently
    had purchased a small school in our most outer districts. It
    houses classes one through six, and for this community out
    there which lies about 30 miles south of Pierre and another 30
    miles from Harrold, SD, this was viable for that community to
    help educate our youth and it kept them closer to home.
        Also, we established community centers in two of our
    districts, which play a vital role. These community centers
    serve almost every purpose there is from weddings to funerals
    and other community functions. Also, we have established a
    higher ed program to assist with the education of our people.
    These have been successful so far. With further funding, we
    have established long-range plans for reestablishing our farm
    and also we have looked into forming our own construction
    companies. There is a lot of thought that has gone into how and
    what direction that we want to see our tribe to go in.
        Right now, due to the financial situation that Crow Creek
    is in, it kind of stops this immediately. With this extra
    funding, we would be able to come close to being in parity with
    the local town of Chamberlain. Chamberlain unemployment rate is
    probably 5 percent, which is pretty close to the State's
    average. Am I right, Mr. Thune? Okay. Crow Creek is about 85
    percent unemployment. I think that is the highest in the State
    of South Dakota, if I am right.
        We would be looking forward to establishing new jobs to
    actually start a true economic base for our communities. If you
    look at this in that for years Government has always looked at
    the tribes as a burden. With this Act going through, this would
    help both Lower Brule and Crow Creek come into the modern world
    and be parallel to the economic base of South Dakota and other
    States.
        With that, thank you, and thank you for your time. I will
    close.
        Senator Johnson. All right. For Mr. Lawson, the amount
    called for in your testimony today is lower than the parity
    bill as introduced. I appreciate your explanation of that.
    Finally, the theory behind the GAO's use of final asking price
    in determining the range of compensation is that more
    negotiations lead to better information. However, I think it is
    apparent that this could also be substantially affected by the
    relative bargaining power of the parties.
        Could you please discuss the historical context of the
    negotiations process and how it may have affected that asking
    price?
        Mr. Lawson. Yes, sir; I tried to use asking prices that I
    thought reflected what the tribe considered its fair market
    values. Each one of the tribes when confronted with their lands
    already being flooded by 1952 in some cases, formed tribal
    negotiating committees who over an 18-month period made an
    estimate of what their valuation was for the damages that they
    would receive, and also an estimate of what the cost might be
    to rehabilitate the entire reservation, because a precedent had
    been established for extending those kinds of moneys for
    rehabilitation when Cheyenne River received its compensation
    for the Oahe Dam in 1954.
        So I tried to use the figures that tracked back to those
    numbers that were developed. Now, they were tweaked a little
    bit. After Cheyenne River, for example, got its settlement,
    there is a factor in there for the tribe's expenses in having
    to go through the negotiations, and they were compensated
    $100,000 for that.
        So those are the bases of the prices that I tried to use,
    is what the tribes before they entered a varied amount of
    negotiations, what they considered fair market values to be.
    Now, sometimes those were negotiated, and there was a series of
    negotiations. I mean, some of these values were developed in
    1954 and negotiations continued until legislation was issued in
    1958.
        Some of those asking prices turned out to be the final
    asking prices that the tribe had. Others were negotiated down
    and none of them were negotiated any higher. But that was the
    process and that is the basis of what I used for the amount of
    differences. I didn't consistently use the final asking prices.
        Senator Johnson. Mr. Chairman, I yield back.
        The Chairman. Senator Thune, do you have any questions?
        Senator Thune. Mr. Chairman, I would just, if I might,
    follow up on the question Senator Johnson asked a little bit
    earlier. I appreciate where you are coming from in terms of
    concern about whether or not this is the end, and whether or
    not there would be additional requests in the future, and
    making sure that there is finality associated with this request
    in the level that it is at.
        As you have both noted, these are very difficult economic
    circumstances on the reservations. Buffalo County is the
    poorest county in the country. Many of our reservation counties
    share a similar economic condition.
        I guess my question is this, assume we do this now and the
    infrastructure that you have both addressed in terms of things
    that you want to do to improve the quality of life and the
    opportunity on the reservation, and I want to tie a little bit,
    Chairman Jandreau, to flattening the reservations that you
    authored here.
        In terms of creating a private sector economy, it seems to
    me at least ultimately the only hope that we have long-term on
    the reservations is to create the kind of economic opportunity
    for young people there to enable them to derive a living that
    isn't dependent upon or based upon Government assistance. The
    parity acts, if the right investments are made and
    infrastructure, provides a basis of a foundation for that.
        I am just curious if you could elaborate a little bit, both
    of you, on what steps you could take to help create a private
    sector economy. It seems to me at least part of the problem in
    attracting economic development to Indian Country is lack of
    legal certainty, need for reform in the judiciary system so
    that businesses that come there know with some predictability
    where they are going to be dealing with disputes and conflicts
    and that sort of thing.
        Can you just elaborate a little bit on that? Because I
    think it gives us some direction in terms of if we do this now
    and to make sure that we are not coming back again and asking
    Congress, that the permanent, good paying, private sector jobs
    that we need to bring to the reservations, what steps you all
    might be taking or that could be taken.
        Mr. Jandreau. Thank you.
        We have probably the lowest unemployment rate in Indian
    Country, and it is because we have taken our resources, both
    those resources we raised from land leases from our corporate
    farm, from other activities. We have taken those incomes and
    tried to create to the greatest extent possible employment
    opportunities there on the reservation.
        We just recently moved into the establishment of a popcorn
    packaging and popping plant. We are in the final stages of
    completing the building to start that activity. That is as a
    result of utilizing those assets and those products that are
    renewable on the reservation.
        As far as private sector involvement, we are tied into a
    number of different companies in regard to doing our own
    construction on the reservation, utilizing, leveraging the
    dollars that we receive to do these kinds of things.
        The more that we are able to do that and to create an
    economy there on the reservation, the more self-sufficient we
    are going to become. We are dealing with a company out of
    Oklahoma on our cattle operation. We are doing some things that
    have to do with the type of beef that is produced, and so we
    have an arrangement with an organization called DuckSmith Farms
    of Enid, OK. It is going to be at least a 3- to 5-year
    arrangement and we are doing that today.
        With our popcorn process, we are dealing with a former
    singer, well, I guess he is still a singer, Chubby Checker and
    some of his ventures. It all seems to make the process work, to
    develop those opportunities with individuals who have the
    capability to move products, and that kind of activity.
        We are not about just wanting the dollars to have the
    dollars. The dollars, if they do not work for us, are not at
    all justified in receiving. It is more than just for damages.
    It is about allowing us to create lifestyle with the remnants
    of land that are left, and trying to, a part of the process is
    we have replanted probably 1.5 million trees on the
    reservation, trying to create reforestation projects and trying
    to deal with the ecological problems that occur when areas of
    the country are denuded of timber.
        So our desire to receive this last shot at getting our
    trust fund expanded is about the whole future of our tribe and
    what happens as far as our own individual sustainability and
    capability to become economically independent, economically
    self-sufficient. You know, our people don't like to always come
    back to the trough either. It is wanting to get compensated for
    these losses with adequate justification that we can move
    forward with these dollars without always having to knock at
    the door.
        I don't know how to say it.
        Senator Thune. That is great.
        Chairman Thompson, if you want to add just what steps can
    be taken or are being taken that would help create permanent
    jobs on the reservations.
        Mr. Thompson. Well, both you and Mr. Johnson have been to
    Fort Thompson. We have two major highways that cross right in
    the middle. To me, this is the crossroads of South Dakota. The
    vision that I see, I don't see despair there. I see
    opportunity. I see a lot of it. There is private sectors in
    Fort Thompson. We have a small grocery store, which is
    privately owned; a convenience store. We have a lot of
    gentlemen who do independent contracting, carpentry businesses
    and so on.
        As far as the plan goes, I really thought about that, and I
    thought about how I would be able to benefit our people the
    most. A lot of it is going to come down to reeducating them
    into proper business practices, to make them where they are
    understandable of how business is conducted on the outside of
    our reservations, and apply that back to our communities and
    work on developing programs to help with them, to establish
    their businesses that will end up being around and being major
    players into our communities again.
        Senator Thune. Okay. Good.
        Tim?
        Senator Johnson. [Presiding.] Thank you, Senator Thune.
        I want to thank the panel. Senator McCain has asked that I
    chair this hearing for the remainder of the hearing, and so I
    will be doing that.
        I do appreciate both Chairmen Jandreau and Thompson
    indicating that the goal of the tribe is to create a much
    stronger, more robust private sector economy on the
    reservations in some instances through tribally owned
    enterprises, but in other instances through individual
    entrepreneurship of tribal members. I think that has to be so
    important as we work in a public-private way to find ways out
    of this what has been an unending cycle of poverty on both of
    these reservations.
        I applaud your leadership and your vision for the future.
    It is my hope that we at the Federal side can live up to our
    treaty and trust responsibilities, to work with you to create a
    greater climate of hope and opportunity and fairness in Indian
    Country. So thank you very much for your testimony today.
        Dr. Lawson, thank you for your work as we struggle to find
    the most logical and equitable level of trust fund funding here
    on this legislation. So thank you very much.
        We will have the next panel come forward. Again, welcome to
    Chairman Harold Frazier of the Cheyenne River Sioux Tribe, and
    to Sharon Vogel, who is the manager for Tribal Ventures
    project. This portion of the hearing is given over to a
    discussion of S. 1535, the Cheyenne River Sioux Tribe Equitable
    Compensation Amendments Act of 2005. That legislation would
    allow the tribe to use money deposited in their settlement
    trust fund to compensate individual landowners and their heirs,
    and also to use receipts of the Western Area Power
    Administration, or WAPA, to make the interest on the fund
    available to the tribe at the start of the next fiscal year,
    rather than 2011, as is required under existing legislation.
        Third, it would provide a methodology based on the Lehman
    Government bond index for calculating the total amount at which
    the trust fund is to be capitalized.
        I want to again thank you for your leadership for the many
    things that you have already done providing leadership on the
    Cheyenne River Tribe for your people in that area. We welcome
    you here today.
        We will begin first with Chairman Frazier.

      STATEMENT OF HAROLD FRAZIER, CHAIRMAN, CHEYENNE RIVER SIOUX
                                 TRIBE

        Mr. Frazier. Thank you, Senator Johnson. I would like to
    begin by thanking you and Senator Thune for cosponsoring our
    legislation and also Senators McCain and Dorgan for holding
    this hearing.
        I also want to recognize and acknowledge Freddie LeBeau,
    who is one of our elders and one of the original Oahe
    landowners whose land was taken back in the 1950's.
        In 1948, the United States Army Corps of Engineers began
    construction of Oahe Dam and Reservoir project, a part of the
    Pick-Sloan Program. The program caused massive relocation of
    our tribal members, including relocating our tribal
    headquarters. We lost over 104,000 acres of land and many of
    these lands were tribal and allotted lands within our
    reservation.
        This dam also devastated the tribe's economy and our way of
    life. More than 181 tribal families, or about 30 percent of the
    tribal population, were forced to move. We lost our most
    valuable and fertile lands, and our traditional hunting-
    gathering ceremonial grounds. In 1954, Congress authorized
    payment of $10.6 million to the tribe for compensation, less
    than half of the $23.5 million sought by the tribe.
        In later years, various reports confirmed that the tribe
    had not been fairly compensated for its losses. In 2000,
    Congress enacted the Cheyenne River Sioux Equitable
    Compensation Act as Title I of Public Law 106-511. The act
    created the Cheyenne River Sioux Tribe Tribal Recovery Trust
    Fund to further compensate the tribe. Under current law, the
    fund will not be capitalized until October 1, 2011.
        S. 1535 would make three amendments to Public Law 106-511.
    The first amendment is to take care of our landowners who lost
    land. It would allow the tribe to use the interest from the
    trust fund to pay additional compensation to tribal members or
    their heirs who lost over 46,000 acres due to the construction
    of the Oahe Dam.
        Those landowners have never been provided fair or adequate
    compensation for their losses. Public Law 106-511 does not
    allow the tribe to use any of the proceeds from the trust fund
    to provide compensation to them. In order to respond to the
    needs and wishes of our citizens and consistent with tribal
    sovereignty and the compensatory purpose of Public Law 106-511,
    the tribal council wishes to devote some of the portion of the
    interest from the trust fund to provide additional equitable
    compensation to the tribal member landowners and their heirs.
        This proposed amendment is revenue neutral for the Federal
    Government. As such, compensation would be provided out of the
    trust fund interest and would not require any additional
    appropriation for the landowners.
        The second purpose of S. 1535 is to make earnings from the
    trust fund available sooner. Public Law 106-511 as enacted
    essentially gives the tribe an IOU from the United States
    payable on October 1, 2011 for losses it suffered in the 1950's
    and that it continues to suffer from today.
        The bill would capitalize the trust fund sooner using
    receipts of the Western Area Power Administration, instead of a
    one-time appropriation in 2011. This method was used to
    capitalize trust funds in the other tribal equitable
    compensation acts enacted prior to Public Law 106-511.
        Receipt of the money sooner would allow the tribe to
    address significant unmet needs in the areas of economic
    development, infrastructure, education, health and social
    welfare programs. Capitalizing the fund sooner would also
    reduce the interest to be paid by the United States to the
    tribe on the $290 million now due in 2011.
        The third and final purpose of the bill is to make a
    technical amendment to provide a methodology for calculating
    the total amount of which the trust fund is to be capitalized.
    Under current law, Treasury is to deposit into the trust fund
    some $290 million plus the interest that would have been
    accrued had the fund been fully invested in October 2001, but
    the law provides no methodology to calculate those earnings.
    However, S. 1535 provides a methodology using a Government bond
    index.
        For the reasons I have stated, I respectfully ask on behalf
    of the Cheyenne River Sioux Tribe that this committee approve
    of S. 1535 and send it to the Senate for consideration by that
    body as soon as possible.
        Thank you, and I would be glad to answer any questions you
    may have.
        [Prepared statement of Mr. Frazier appears in appendix.]
        Senator Johnson. Thank you, Chairman Frazier.
        Ms. Vogel.

         STATEMENT OF SHARON VOGEL, CHEYENNE RIVER SIOUX TRIBE

        Ms. Vogel. Thank you.
        Good morning, Senator Johnson and Senator Thune, I too
    would like to thank you for the opportunity to provide
    supportive testimony for the tribe's efforts to obtain
    immediate access to its funds under Public Law 106-511, which I
    will refer to as JTAC funds, to implement the tribe's JTAC
    plan.
        My name is Sharon Vogel. I am an enrolled member of the
    Cheyenne River Sioux Tribe and the administrative manager of
    the Tribal Ventures Project. Tribal Ventures is a planning
    project between the Cheyenne River Sioux Tribe and the
    Northwest Area Foundation out of St. Paul and Minneapolis, MN.
    The process was to develop a 10-year plan to reduce poverty and
    increase prosperity for the families residing on our
    reservation.
        My submitted testimony has a description of the process
    that we undertook on the reservation to look at poverty,
    collect the thoughts of our people, and decide how we would
    proceed with reducing poverty. I would be happy to take
    questions on that aspect of my testimony, but I will use my
    time this morning to focus on the ways our tribe is ready to
    proceed with economic development.
        We have just completed an 18-month strategic planning
    process that resulted in a 10-year commitment to reduce
    poverty. The Northwest Area Foundation has invested $9.5
    million in our effort to reduce poverty. That is a big
    investment from a major foundation.
        As a result, we have a concrete plan to strategically move
    forward to reduce poverty conditions on our reservation. The
    only thing holding us back from true economic development from
    investment and job creation is the lack of capital. I want to
    be clear: We truly are ready to move economic development
    projects forward. We have development plans for infrastructure
    and economic development that are ready to go. We need capital
    to start our economic engines.
        Let me go over an example of projects or programs we are
    ready to undertake. We have identified two priorities. One is
    the infrastructure development and the second is education.
    When we were holding our planning sessions, we also undertook a
    project called Young Voices. We interviewed over 600 young
    adults from 18 to age 30 on our reservation. We found that
    while they wanted to live on the reservation, there were no
    opportunities. Job prospects and educational opportunities are
    much too limiting. As a result, we would like to use our JTAC
    funds to train our young people, provide them with scholarships
    for education, as an incentive to stay on our reservation and
    carry on the culture of our people.
        Our population is overwhelmingly young. Almost one-half of
    these are under 25 years of age. We must act as soon as
    possible to ensure that we don't lose a generation because of
    the lack of opportunity. We have identified that economic
    development requires infrastructure. While the Federal
    Government has an obligation to the tribe to provide roads,
    drinking water, water treatment, and other infrastructure, the
    tribe has a role, too.
        The JTAC funds would be used to leverage infrastructure
    improvements. For example, the tribe has initiated discussions
    with Merrill Lynch to use JTAC funds to finance an advanced-
    funded road construction effort similar to the advanced-funded
    road project that Standing Rock Sioux Tribe did using some its
    JTAC funds. The more infrastructure we have, the better our
    standing will be. We will no longer start with a deficit when
    negotiating development for our tribe.
        With a developed infrastructure, we will be able to use
    that as a bargaining chip when pursuing investments. Of course,
    this is just an example of several plans that we have ready to
    implement. We also plan to create a cultural center, to enter
    the energy industry with wind turbines, to start a credit
    union, to expand our hotel, and to develop tourism.
    Additionally, we want to create partnerships with private
    entrepreneurs who realize the opportunity Cheyenne River
    presents.
        We can no longer wait to develop our economy, communities
    and families in a piece-meal fashion. We must have multiple
    strategies that are linked to establishing a stable economy,
    reducing poverty and improving the quality of life for our
    reservation families. We truly need access to the resources
    promised under JTAC.
        In summary, I would like to stress that JTAC funds will
    result in, one, increased assets of the tribal communities and
    our families. It will develop economic opportunities for our
    families, provide educational opportunities for our tribal
    members. We will have development of comprehensive social and
    health programs and we will increase the capacity of our tribal
    government to develop long-term strategies that will result in
    sustainable economic, community and social development.
        I would also like to note that payments to individual
    landowners such as Mr. LeBeau, our elder that is accompanying
    us, that the tribe is seeking, will also do a lot to reduce
    poverty on the reservation. Obviously, the payments will
    directly counteract the loss of assets aspect of the Oahe
    project. Combined with financial literacy, education and other
    advising, it will eliminate long-term poverty for many
    reservation families.
        Tribal landowners and heirs who receive these payments will
    have the capital to invest in both their families and their
    communities. Some may choose to become business owners that
    employ other tribal members, and some may choose to use their
    funds for their or their families' education.
        I would like to address one final issue. One question you
    may have is why should we be able to access these funds now,
    rather than five years from now. There are several good reasons
    for opening up the interest on our compensation fund. First and
    foremost, it is just a clear issue of time. We have 29 original
    landowners, all of whom are well into their eighties. Frankly,
    some of them may not be around in 5 years to benefit from the
    funds. These lands were taken in 1948, 56 years ago. They have
    been waiting long enough.
        Second, our tribe has urgent needs to address now. We can't
    afford 5 more years of missed opportunity. We will have missed
    the opportunity to put 500 people or more through our workforce
    development programs. We have people who need homes to live in
    today. We have hundreds of young adults who want to attend
    college, but don't have the financial resources to do so. We
    have the need to create a viable infrastructure today.
        These are burning needs and will only be more costly to
    meet further down the road. More importantly, over the next 5
    years, we will have 1,000 children born on the reservation, and
    780 of these babies will be born into poverty. Every year gone
    is a year of missed chances, and we can't afford it.
        Senator Johnson, members of the committee, thank you for
    scheduling this hearing to learn about how we plan to improve
    our tribe with our much-needed JTAC funds. I will be happy to
    take any questions you may have.
        Thank you.
        [Prepared statement of Ms. Vogel appears in appendix.]
        Senator Johnson. Thank you for your testimony.
        Senator Thune has another obligation, another committee
    hearing to attend to, and he has had to excuse himself. I do
    express my appreciation to Senator Thune for his work on these
    issues.
        It is my understanding, Chairman Frazier, that at the time
    that the trust settlement was reached, the legislation was
    passed, all of the interest income from the trust fund after
    2011 would be directed to the benefit of the tribe.
        The tribe now believes that it ought to have the discretion
    to redirect some of that revenue to compensate individual
    landowners, given the fact that as I understand it, about 45
    percent of the land that was flooded did indeed belong to
    individual landowners, as opposed to being tribally owned. Is
    that a fair and correct observation?
        Mr. Frazier. Yes; that is correct.
        Senator Johnson. I appreciate, Chairman Frazier, that you
    have been a tireless advocate for your tribe, and I appreciate
    your commitment to rectifying damages incurred by your people
    almost 50 years and which continue on today. What, if any,
    compensation was provided to those individual landowners when
    the initial cash settlement was reached in 1954?
        Mr. Frazier. On behalf of the landowners, I know when I
    visit with many of them, a lot of them were not happy with the
    amount of money that they received. I think there are reports
    showing that they received around $20 or $21 an acre, when
    right across the river the non-Indian population received over
    $43 to $45 an acre. Many of them just are not satisfied. I
    don't blame them. I personally have experienced the loss of a
    home, some land, and that is why I am here advocating on their
    behalf. I think that in my opinion, as well as theirs, that
    they were not fairly compensated at the end of the 1950's.
        Senator Johnson. It is clear that this legislation is a
    major priority for you and for the tribe. I think one of the
    questions that might occur on the part of some of my colleagues
    on the Committee is that only 6 years ago when the tribe agreed
    to the Equitable Compensation Act, and I appreciate that you
    can't speak for others who made decisions at previous times,
    but 6 years ago that legislation prohibited any per capita
    payments to members of the tribe.
        So why do you think that decision was made by the tribe at
    that time, versus the interest now that the tribe has in
    allowing at least some of this revenue to be redirected toward
    private landowners?
        Mr. Frazier. I can't speak and I don't know what the
    discussion was back then. I do know that the way I understand
    the per capita is that every member of the tribe would be
    getting paid. We look at this as not a per capita payment
    because not every member is going to get paid, just the ones
    who have lost land in this taking. They would be the only ones
    that would be compensated for their losses.
        Senator Johnson. How many landowners remain to this day,
    roughly?
        Mr. Frazier. I believe there were originally 420; now there
    are 29.
        Senator Johnson. And it would be the 29 plus the heirs of
    anybody who did own original land, is what the tribe envisions?
        Mr. Frazier. Yes.
        Senator Johnson. I appreciated your participation in the
    tribal listening session that I held on economic development
    this past April in South Dakota. I think we both share a strong
    vision for the future of your tribe and all our South Dakota
    tribes. I wondered if you could discuss briefly the importance
    of this trust fund to the tribe and the process the tribe will
    pursue to ensure that the trust fund effectively serves the
    development of the tribe. How are you going about that?
        Mr. Frazier. One of the things, as Sharon, Ms. Vogel, she
    has been out to the community several times, to every community
    on our reservation, and gotten the comments of our members. Two
    of the things that really stick out in my mind that are much
    needed on our reservation is capital and infrastructure. I
    believe that if we are ever going to get anywhere in dealing
    with economic development, that is what is needed. That is
    something that is always top.
        I just want to make a quick point. Right now, we are in the
    process of refinancing our buffalo program to the amount of $8
    million. The bank is requiring our tribe, and it is pretty much
    collateralized 300 percent, and yet it is not enough. So I know
    that we have a huge need for capital, so we don't have to deal
    with banks and just pretty much give up the whole farm for a
    loan. So that is something. We know what our needs are. We have
    to plan. If we get the money, we can implement the plan.
        Senator Johnson. Finally, Chairman Frazier, I understand
    this legislation is supported by a resolution of the tribal
    council. Could you please speak to the support of this
    legislation among the tribe and if it is supported by the
    tribal elders?
        Mr. Frazier. Several times last year as well as this year,
    I have discussed this with our members throughout our
    reservation, and every year I have been giving a tribal state
    of the tribe address. Each time, these initiatives are brought
    up on what the tribal council and the tribal government is
    doing. Each time, I have not really heard any negative comments
    from the members of our tribe.
        Senator Johnson. Ms. Vogel, thank you for your testimony. I
    am struck by your observation that of the 1,000 children to be
    born on the reservation in the coming years, that 785, roughly,
    will be born into poverty.
        Ms. Vogel. Yes.
        Senator Johnson. And with all the complications and the
    disadvantages that go with that. So the need to address these
    issues is truly urgent.
        I appreciate the point you made in your written testimony
    about the potential payments counteracting the loss of assets
    aspect of poverty. In terms of the causes of poverty, could you
    please speak to the cultural and psychological effects related
    to the loss of individual lands?
        Ms. Vogel. Well, when our tribal council held the local
    hearing for our tribal government officials to hear from
    original landowners and other individuals that were interested
    or had recommendations about this legislation, I recall the
    testimony of two of our elders that talked about the loss that
    they had, and the loss they had on their children and their
    grandchildren. They owned a piece of land. They were self-
    sufficient on that piece of land. And when they lost that, they
    couldn't replicate that wealth that they had developed on that
    land. They had a home. They had a garden. They had livestock.
    And they made improvement to that land that they owned, that
    they had planned on handing down to their children.
        When they lost that, they were then relocated and they
    could not, that wealth was gone. And there wasn't enough
    compensation to rebuild that wealth.
        So they ended up being in poverty, and their children and
    their grandchildren lived in poverty because of that loss.
    That, I think, is one cultural wrong. We are a proud people. We
    have a history of self-sufficiency. The poverty conditions were
    harsh. It was hard to get out when you live in a place of
    poverty, when there is no opportunity. So that was the reality.
    That was the aftermath of the loss.
        Senator Johnson. Sharon, what sort of financial literacy
    programs are being implemented within the tribe and tribal
    membership to help landowners or their heirs invest and build
    the economy of the Cheyenne River? Obviously, we want financial
    resources to be available to people, but we want to be
    confident those resources are being put to good use.
        So what is your group doing to help ensure that that would
    be the case?
        Ms. Vogel. There are several entities that provide
    financial literacy and consumer education on Cheyenne River.
    One is the Four Bands Community Fund. In addition to providing
    the business training for entrepreneurs, they also provide an
    IDA, individual development account, and that comes with a
    curriculum of education.
        We with the Tribal Ventures Poverty Reduction Plan will
    partner with the Four Bands Community Fund to where we, too,
    will offer reservation-wide financial literacy training, using
    a curriculum that was developed for Native American families
    that was funded in part by Fannie Mae. We also propose that we
    will have a youth IDA so that our young people can start saving
    for scholarships.
        But in addition, there are other reasons why it is
    important for us to have financial literacy on Cheyenne River.
    One is predatory lending. We want to make sure that our people
    are protected from predatory lending and that they are better
    consumers, they make more informed decisions.
        So the value of financial literacy is not just limited to
    just making sure that these individuals that when they receive
    the compensation that they spend that wisely. It is for all of
    our members across the reservation.
        Senator Johnson. Well, thank you, Ms. Vogel, and I thank
    both of you for your testimony. It obviously was very important
    that we make your testimony on the record here for all the
    members of the committee. We have bipartisan staff here. I
    think we all feel that we have gained from your testimony as
    well. It was important that we go through this process in our
    effort to move this legislation along.
        So I want to thank you. I also want to thank others,
    including elders and members of the tribes who have traveled
    long distances and have gone out of their way to be here today.
    We want to welcome you as well.
        So with that, we are going to wrap up this hearing, but we
    will redouble our effort to work in a bipartisan fashion with
    Senator Thune, with Chairman McCain, Vice Chairman Dorgan, to
    see what we can do to take into consideration your testimony
    here today and to use that as support for this legislation.
        So thank you very much. And with that, this hearing is
    adjourned.
        [Whereupon, at 11:12 a.m., the committee was adjourned.]

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

                                A P P E N D I X

                                  ----------

                  Additional Material Submitted for the Record

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

    Prepared Statement of Michael B. Jandreau, Chairman, Lower Brule Sioux
                                     Tribe

        Mr. Chainnan, members of the committee, thank you very much for the
    opportunity to testify on the Tribal Parity Act, S. 374. I am Michael
    Jandreau, the chairman of the Lower Brule Sioux Tribe. I have been
    chairman of the tribe for 27 years, and served on the council for 7
    years before being elected chairman.
        The legislation before you this morning is of great importance to
    our tribe and our people. I would like to thank Senator Thune
    introducing the legislation, and Senator Johnson for cosponsoring. I am
    joined today by members of our Council, other tribal members, and our
    counsel, Marshall Matz with the law firm of Olsson, Frank and Weeda.
        The Lower Brule Sioux Tribe is a constituent band of the Great
    Sioux Nation and a signatory of the Fort Laramie Treaty of 1851 and the
    Fort Sully Treaty of 1865. The reservation is approximately 230,000
    acres in central South Dakota. The Missouri River establishes the
    eastern boundary of the reservation. Historically, the Missouri's
    bottomlands provided food, wood for shelter and fuel, forage for cattle
    and wildlife, and plants utilized for medical purposes.
        In 1944, Congress enacted the Flood Control Act, which authorized
    implementation of the Missouri River Basin Pick-Sloan Plan for water
    development in the Missouri River Basin. Two of its main-stem dams,
    Fort Randall and Big Ben, flooded over 22,000 acres--approximately 10
    percent of the entire reservation and our best bottomland. In addition,
    it required the resettlement of nearly 70 percent of the resident
    population. For the Lower Brule Sioux Tribe, the human and economic
    costs have far outweighed any benefits from the Pick-Sloan project.
        The Congress responded in 1997 with the Lower Brule Sioux Tribe
    Infrastructure Development Trust Fund Act, Public Law 105-132. This
    legislation has been of enormous benefit to our people. It established
    a Trust Fund of $39,300,000 for the benefit of the tribe. With this
    Fund, and using leverage, we invested over $27 million in our entire
    infrastructure. We have built:

       \\\\\\A new community center,
       \\\\\\A tribal administration building,
       \\\\\\A detention center with a courthouse and police
            department, and a
       \\\\\\Wildlife building.

        We have also used the fund to improve tribal housing and employ
    250-270 individuals [both youth and adults] in the summer months. In
    short, the trust fund is allowing us to improve our economy and the
    quality of life on the reservation in many ways.
        The legislation before you today, S. 374, is intended to supplement
    our existing trust fund. It passed the Senate three times in the 108th
    Congress, once as an independent bill and twice as an amendment to
    other bills. All three died in the House. The Parity Act was again
    reported by this committee on June 30, 2005, but has yet to come before
    the entire Senate for consideration.
        Mr. Chairman, in all honesty, I am completely baffled by the recent
    GAO report entitled ``Analysis of the Crow Creek Sioux and Lower Brule
    Sioux Tribes' Additional Compensation Claims''. It is the most
    frustrating Government document I have read in all of my years as
    chairman.
        Essentially, the GAO makes two criticisms of the Tribal Parity Act
    and the approach used by our consultant, Dr. Mike Lawson. First, the
    GAO criticizes us [and it is, in fact, the tribes that the GAO is
    criticizing] for not using ``the final asking price''. Second, the GAO
    is indignant that Dr. Lawson suggests one level of compensation, and
    not a range. I would like to make several points in response:
        No. 1. The Congress never established the final asking price as the
    standard that must be used for determining what is fair compensation
    under the Flood Control Act. In a business transaction when two parties
    are negotiating with equal standing, I can understand how the last
    asking price would indicate the true feelings of the parties. That is
    clearly not the case here. There was no ``negotiation''. Our land had
    been flooded and we were trying to do the best we could. The Congress
    should look at all of the facts when trying to evaluate the appropriate
    level of compensation and not be blinded by the last offer.
        No. 2. GAO criticizes Dr. Lawson for not providing a range of
    reasonable compensation levels based upon different policy assumptions,
    but then the GAO does the same thing and fails to give you, the
    Congress, a range of possibilities.
        No. 3. Beyond the numbers, there is a tone to the GAO report that
    is deeply disturbing. Dr. Mike Lawson is a nationally recognized expert
    on the Flood Control Act and the tribes affected by that legislation.
    Yet, the GAO does not even mention his name anywhere in the document.
    Dr. Lawson is a consultant to two sovereign Indian tribes. The GAO has
    every right to disagree with him, or with me, or with anyone else. But
    I would hope they also recognize that a mechanical application of a
    standard formula may not apply in all cases. The tribes are not one
    size fits all.
        Our best land was taken to benefit America. Our tribe is not
    seeking charity; we are seeking justice and parity with other Missouri
    River tribes that have been adversely affected by the Flood Control
    Act. There has been no one, clear policy decision by the Congress on
    how to determine what is just and fair compensation for Missouri River
    tribes. The Tribal Parity Act is not based upon the ``highest asking
    price''. And we are not seeking parity with the Santee Sioux, who has
    received the highest amount on a per acre basis. We are seeking what
    Dr. Lawson, the recognized national expert, believes to be fair and
    owing from the United States to the people of Lower Brule. The Congress
    has the power and the obligation to make a fair policy decision. You
    are not bound by any one formula or test, as, I believe, the GAO would
    have you believe.
        This legislation would, if enacted, add to our trust fund and allow
    us to aggressively attack the many human challenges we face on the
    reservation. Further, we could more adequately build our infrastructure
    to the point that it would be possible to attract a private sector
    economy.
        As you know, sovereignly is key to tribal existence. But, in the
    long run, for sovereignty to survive, there must be some type of
    economic sovereignty as well. We must develop private sector economy
    and jobs for our people. The legislation before you will allow us to do
    all of that. We will be able to improve education, health care,
    housing, transportation, the justice system, and so many other
    services.
        As much as we need this legislation, let me stress that we are not
    asking for a handout. This legislation is intended to provide more
    complete compensation for the loss of our best land and other costs
    suffered by the tribe. The Army Corps of Engineers has estimated that
    the Pick-Sloan project's overall contribution to the U.S. economy
    averages $1.27 billion per year. The Tribal Parity Act must be seen in
    that context.
        The Lower Brule Sioux Tribe is making great progress. Our
    unemployment rate is the lowest of any reservation in South Dakota, but
    it is still much above the national average. My goal as chairman is to
    see Lower Brule fully participate in the U.S. economy while maintaining
    our heritage and identity. It is very painful for me to read The World
    Is Flat by Thomas Friedman and realize that globalization is passing
    over Lower Brule and the Indian reservations of the United States.
    China and India, for example, are revolutionizing their economy while
    Indian reservations are essentially ignored.
        The reservations are a part of the United States, but we are not a
    part of the U.S. economy. Mr. Chairman, I am not here today to outline
    a comprehensive agenda for Lower Brule or for tribes, generally. I am
    here to say that the Tribal Parity Act is the essential next step to
    improving the quality of life at Lower Brule and it is completely
    justified. We urge you to finally file the committee report and bring
    it to the floor of the Senate as soon as possible. It has been exactly
    2 years since I first testified on the Parity Act. Our tribe needs and
    deserves the benefits of the Tribal Parity Act, as adjusted to reflect
    a more accurate mathematical computation.
        We urge the committee to amend S. 374 to provide $129,822,085 of
    additional compensation to Lower Brule and $69,222,085 of additional
    compensation for Crow Creek. These figures are far lower that our
    highest asking price and are lower than the amount provided to the
    Santee. It is, in short, fair and just compensation for the complete
    disruption to our reservation life and the taking of our best bottom
    lands. Thank you. I would be pleased to answer any questions.

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      Prepared Statement of Freddy LeBeau, Vice Chairman Oahe Landowners
                                  Association

        My name is Freddy LeBeau. I am an enrolled member of the Cheyenne
    River Sioux Tribe, and a resident of the Cheyenne River Sioux
    Reservation. I am one of the tribal members who lost land due to the
    construction of the Oahe Dam and the acquisition of over 44,000 acres
    of tribal members' lands by the United States for the Dam. I am also
    the vice chairman of the Oahe Landowners Association, a group comprised
    of the tribal member landowners who lost lands on our reservation due
    to the Oahe Dam Project. So I am providing this statement not only for
    myself, but also for all of the surviving tribal member landowners who
    lost their lands due to the Dam, and for their heirs. Today there are
    only 29 surviving tribal members who lost their lands because of the
    dam.
        We have waited for almost 60 years to tell our story. When the
    corps took our lands in 1948, we had no choice. The lands weren't
    acquired through agreed upon sales. No one asked if we wanted to sell
    our lands, and we would not have agreed to any sale. The lands were
    simply taken from us to benefit other people. We didn't experience
    sever flooding on the reservation, and the project was of no use to us.
    But the powers that be decided they needed a flood control project, and
    so they authorized a project that required the acquisition of Indian
    lands and the relocation of Indian people.
        I fought for this country in World War II. I spent about 4 years in
    the U.S. Navy in the South Pacific. During the war, I learned that some
    fee lands on the reservation totaling 200 acres had been foreclosed on
    and could be bought. So I sent money to my father and he bought the
    land for me. After the war, I built the land up, raised livestock on it
    and supported my family off of it. I wanted to live there the rest of
    my life. But the Oahe Dam put a stop to that. The Government offered me
    $6,000 for the land. It wasn't enough, but I would have had to go to
    court to get fair compensation, so I accepted the check and signed it
    under protest. I fought for the U.S. Constitution and the American way
    of life, but then the Federal Government turned around and took my land
    and didn't provide fair compensation.
        We landowners know that we were not fairly compensated. We were
    paid less for our lands than the Government paid for comparable lands
    off of the reservation. But for the most part we took whatever the
    Government offered us, because we didn't want to hire lawyers and go to
    court and take our chances with a judge.
        In total, the U.S. Government acquired over 44,000 acres of
    reservation lands from tribal members. Many of us, like myself, had to
    move our families elsewhere and start again. Many of us never got over
    losing our lands. And many of us found that our new lands weren't as
    good as the lands we were forced to leave to provide flood control for
    other people.
        The tribe lost lands too, and it was not fairly compensated either.
    Congress recognized this when it enacted Public Law 106-511, the
    Cheyenne River Sioux Equitable Compensation Act, in 2000. I have a
    problem with that law, however. It says the Federal Government acquired
    some 104,000 acres of land of the tribe for the Oahe Project. But that
    number includes the 44,000 acres taken from tribal members. Only about
    60,000 acres were tribal lands.
        Public Law 106-511 provides over $290 million to the tribe, plus
    interest, to compensate it for its losses, but it doesn't provide any
    compensation to the tribal member landowners for our losses. In fact,
    it says the tribe can only spend the earnings from the Trust Fund for
    certain things, and it doesn't allow the tribe to spend one dime to
    provide any additional compensation to tribal member landowners.
        The landowners don't think this is fair, and our tribal government
    agrees with us. So they have joined with us to ask Congress to change
    the law so that they can provide us just compensation. We are not
    asking for a windfall or a handout--but only for just compensation. We
    urge Congress to allow the tribe to use its earnings from its Trust
    Fund to provide us the compensation we deserve.
        One final thing. Right now, the tribe won't receive any of the
    Trust Funds until October 2011. The surviving landowners have waited
    almost 60 years for just compensation, and we don't want to wait until
    2011. Some of us won't make it to then. We'd like to get our
    compensation now.
        Thank you for your consideration of this bill.

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    Prepared Statement of Lester Thompson, Chairman, Crow Creek Sioux Tribe

        Mr. Chairman, members of the committee, thank you very much for the
    opportunity to testify on the Tribal Parity Act, S. 374. I am Lester
    Thompson, the chairman of the Crow Creek Sioux Tribe. It is an honor
    for me to be here with Chairman Mike Jandreau. Chairman Jandreau is the
    most senior chairman in our State and in the Great Sioux Nation. I am
    the most junior chairman in the Sioux Nation, having been elected
    chairman in April. I took office, along with a new tribal council, in
    May 2006.
        I also would like to thank Senator Thune for introducing the Tribal
    Parity Act and Senator Johnson for cosponsoring. This legislation
    before you is of extraordinary importance to our tribe. I am delighted
    that it is the subject of my first appearance before Congress.
        The members of the Crow Creek Sioux Tribe were relocated after
    Little Crow's War in Minnesota. People were transported on barges from
    Minnesota stopping at Santee and then we moved on to Crow Creek. Many
    lives were lost along the way. We are members of the Isanti and
    lhanktowan divisions of the Great Sioux Nation. We speak Dakota and
    Nakota dialects. We have three districts on the reservation, and are a
    treaty tribe.
        The Crow Creek Sioux Tribe consists of 225,000 acres located in
    Central South Dakota. Our Western boundary is the Missouri River. In
    1944, when the Congress enacted the Flood Control Act and authorized
    implementation of the Missouri River Basin Pick Sloan Plan for water
    control, two of the dams, Fort Randall and Big Bend, flooded over
    16,000 acres of our best and most productive bottom land. It was also
    the very land where a majority of our people lived. The cost to Crow
    Creek in human terms, and economically, was astronomical.
        We lost:

       \\\\\\Our hospital;
       \\\\\\Housing units;
       \\\\\\Tribal Buildings and other structures;
       \\\\\\Schools;
       \\\\\\Businesses;
       \\\\\\Roads;
       \\\\\\Acres of waterbed and timberland, and domestic and
            ranch water systems;
       \\\\\\Food sources, such as fishing, hunting, and
            subsistence farming; and
       \\\\\\Ceremonial grounds and traditional medicines.

        Our way of life was altered irreparably. Before the dams, the
    lifestyle was simple. The people worked in a community garden. In the
    evenings, the people would gather to share that day's catch of fish and
    the food gathered. They would meet to visit, pray, sing, and dance
    where the Bureau officials could not observe. The children attended
    boarding school within walking distance of their homes and family. The
    way of life, the social interactions, the camaraderie and sense of
    being one people--one tribe, was destroyed by the environmental changes
    and forced relocation. The hospital and school were never replaced. The
    traditional medicine that grew solely in the waterbed and the
    Ceremonial Grounds are irreplaceable.
        When the relocation took place, some purchased homes with the $500
    compensation received. Others received homes in low rent housing--a
    project constructed of 50 units in an area smaller than a city block.
        The elders observed that this is when the change occurred. People
    started to watch each other, argue with each other, begrudge each
    other, and become disgruntled. With the loss our school, the next
    option was the Immaculate Conception Boarding School, 13 miles away.
    The students were no longer able to walk to their homes and families on
    a daily basis, and those teaching were not people who believed in the
    heritage, culture, and customs of the students. Abuses that occurred in
    Catholic Boarding Schools are well documented historically, and I will
    not expand, except to say that the loss of our school negatively
    impacted our people on a much larger scale. This impact on the social
    development of our people has rippled down through generations.
        Our reservation is in Buffalo County, SD. Buffalo County is the
    POOREST COUNTY IN AMERICA, and also has the highest cancer rate in the
    Nation. Many Elders believe that the building of the dam and disturbing
    the earth and the water flow released death in the air.
        Chairman Jandreau has spoken eloquently regarding the desire to
    join the global market and seeking economic parity with the rest of
    America. I strongly agree and support those goals. But at Crow Creek,
    we must first achieve parity with Chamberlain, SD, just 25 miles away.
    A small town of just 3,000 people, Chamberlain's unemployment rate is
    approximately the State average--5 percent, while the rate at Crow
    Creek is over 80 percent.
        For us to move forward, we must improve our infrastructure and
    create an environment that is conducive to human and economic progress.
    The Crow Creek Sioux Tribe Infrastructure Development Trust Fund Act
    enacted in 1996 [Public Law 104-223] awarded $27.5 million to the Crow
    Creek Sioux Tribe. Of the $27.5 million, the tribe is allowed to
    utilize the interest. The Tribal Parity Act would greatly enhance the
    trust fund, thus increasing our available moneys and allowing us to
    leverage with the private sector. The first year of the trust fund, we
    received slightly over 1 million dollars. Due to fluctuating interest
    rates, the yield has now dwindled to slightly over $700,000, and is not
    a set or guaranteed yearly amount. We have utilized the interest to do
    a number of things to improve the situation of our people, including
    the following:

       \\\\\\Purchase a small school with a gymnasium in the Big
            Bend District--the furthest outlying district. We are able to
            provide Kindergarten through 6th grade education to students in
            that area, preventing the necessity of an hour-long bus ride
            each way to and from school;
       \\\\\\Construct a Community Building in the Crow Creek
            District, providing a place to gather for socializing,
            celebrations, and funerals;
       \\\\\\Construct a Community Building in the Fort Thompson
            District, utilized for community events, program presentations,
            wakes, weddings, dance, meetings, and as a polling place;
       \\\\\\Set a higher education program to assist students in
            college;
       \\\\\\Purchase land to increase the land base; and
       \\\\\\Improve damaged roads and upgrade our water plant.

        These initiatives just begin to scratch the surface. The
    legislation we are discussing today, S. 374, is intended to supplement
    our existing trust fund. As you know, it passed the Senate three times
    in the 108th Congress, both as a stand-alone bill and as an amendment.
    All three times the measure died in the House. The Tribal Parity Act
    was again reported by this committee on June 29, 2006, but has yet to
    come before the Senate for consideration.
        The Army Corps of Engineers has estimated that the Pick-Sloan
    Project's overall contribution to the U.S. economy averages $1.27
    billion annually. According to the Western Area Power Administration,
    the agency that administers the Pick-Sloan Project, receipts from the
    project in 2006 are likely to total $119 million and the same every
    year after. The $69 million dollar increase to the trust fund requested
    in S. 374 [as amended] would bring the trust fund balance to $96
    million--less than 1 year's receipts the Government receives from the
    Pick-Sloan Project.
        The expanded trust fund would enable the Crow Creek Sioux Tribe to
    make not just significant, but magnificent strides in growth and
    development. Economic development and environmental improvements would
    change the lives of our people, our children, and all future
    generations of Crow Creek Sioux. It would assist in putting
    reservations on parallel ground, enabling us to compete economically,
    with Chamberlain and the rest of the United States, as opposed to
    remaining in our current state, operating below the standards of most
    Third World Countries.
        The recent GAO report entitled ``Analysis of the Crow Creek Sioux
    and Lower Brule Sioux Tribes' Additional Compensation Claims''
    criticizes the tribes for not using ``a final asking price.'' Mr.
    Chairman, there is not a tribe or tribal member that could possibly
    place a monetary value on the loss and detrimental impact the Pick-
    Sloan Project has had on our people. ``Official'' documents use terms
    such as ``Lake Sharpe'' or ``Lake Francis Case'' to identify the land
    overtaken by the Pick-Sloan Project. In the every-day language of the
    tribal people, the land is called ``taken area'' or ``taken land.''
    Because it was taken. The land taken was the richest portion of our
    reservation. There were no offers or deals made to sell the land, and
    no assessment done to determine the value of the land. Even if there
    had been an assessment, the medicinal plants grown on the land and the
    Ceremonial Grounds hold a higher, non-monetary value. The devastation
    this has wrought still remains today for all to see.
        The Crow Creek Sioux Tribe is consulting with experts such as Dr.
    Mike Lawson to estimate a monetary value, but his name or expertise is
    not mentioned in the GAO report. The compensation listed for Crow Creek
    Sioux Tribe in the Tribal Parity Act is not based on the highest asking
    price, or based on the price for the Santee Sioux, the Lower Brule
    Sioux, or any other tribe. Each tribe is unique, but what binds us
    together is our sovereignty. We are asking for the ability to maintain
    our sovereignty.
        A Christian group visited the Crow Creek Sioux Tribe, stating that
    they had read about the poverty on the reservations and the fact that
    Crow Creek is in the poorest county in the America. After visiting, the
    group called the situation a National Shame. As chairman of the Crow
    Creek Sioux Tribe, I want to see the deplorable statistics change. I do
    not want our situation to remain a national shame. We are not asking
    for charity, for a handout, or even for your pity. We are not even
    asking for a helping hand. We are simply asking for fair and just
    compensation.
        For the men, women, and children of the Crow Creek and Lower Brule
    Sioux Tribes, there is nothing more important right now than moving
    forward with the Tribal Parity Act. The new Tribal Council, including
    myself as chairman, understands the challenges that lie ahead. Our
    reason for running for office and our daily motivation is to improve
    the situation and make a positive difference for the people of the Crow
    Creek Sioux Tribe. The Tribal Parity Act is an essential step in our
    efforts to reverse the downward trend and move forward. We urge the
    committee to file the report and bring S. 374 to the Senate floor for
    consideration as soon as possible.
        Thank you for the opportunity to testify before your committee, and
    I will be happy to answer any questions you might have.

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