[Senate Hearing 109-16]
[From the U.S. Government Publishing Office]



                                                         S. Hrg. 109-16

                          INDIAN TRUST REFORM

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   ON

  VIEWS OF THE ADMINISTRATION AND INDIAN COUNTRY OF HOW THE SYSTEM OF 
  INDIAN TRUST MANAGEMENT, MANAGEMENT OF FUNDS AND NATURAL RESOURCES, 
                           MIGHT BE REFORMED

                               __________

                             MARCH 9, 2005
                             WASHINGTON, DC


                    U.S. GOVERNMENT PRINTING OFFICE
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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

                 Jeanne Bumpus, Majority Staff Director

                Sara G. Garland, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page
Statements:
    Cason, Jim, acting assistant secretary for Indian affairs, 
      Department of the Interior.................................     3
    Colombe, Charles, president, Rosebud Sioux Tribe.............    15
    Dorgan, Byron L., U.S. Senator from North Dakota, vice 
      chairmanm, Committee on Indian Affairs.....................     2
    Gray, Jim, chairman, board of directors, Intertribal 
      Monitoring Association.....................................    12
    Hall, Tex, president, National Congress of American Indians..    10
    Harper, Keith, Native American Rights Fund...................    19
    Hillaire, Darrell, chairman, Lummi Nation....................    17
    McCain, Hon. John, U.S. Senator from Arizona, chairman, 
      Committee on Indian Affairs................................     1
    Swimmer, Ross, special trustee for American Indians, 
      Department of the Interior.................................     3

                                Appendix

Prepared statements:
    Cason, Jim (with attachment).................................    30
    Cobell, Elouise, C., Lead Plaintiff in Cobell v. Norton......    81
    Colombe, Charles (with attachment)...........................    98
    Gray, Jim....................................................    27
    Hall, Tex....................................................   107
    Hillaire, Darrell (with attachment)..........................   117
    Hoopa Valley Indian Tribe (with attachment)..................   204
    Swimmer, Ross (with attachment)..............................    30

 
                          INDIAN TRUST REFORM

                              ----------                              


                        WEDNESDAY, MARCH 9, 2005


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 11 a.m. in room 
485, Senate Russell Building, Hon. John McCain (chairman of the 
committee) presiding.
    Present: Senators McCain, Akaka, Cantwell, Dorgan, Inouye, 
Johnson, Murkowski, Smith, and Thomas.

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

    The Chairman. We will now begin our hearing on trust 
reform.
    Our first witness is Jim Cason, who is the acting assistant 
secretary for Indian affairs. He is accompanied by Ross 
Swimmer, special trustee for American Indians, Department of 
the Interior.
    The subject of Indian trust management reform has been an 
issue of considerable issue to Congress and to this committee 
for over a decade. In 1994, Congress enacted the American 
Indian Trust Fund Management Reform Act with the expectation of 
bringing order to at least one aspect of the Federal 
Government's trust responsibility to Indian people, the 
management of tribal and individual Indian moneys held in trust 
accounts.
    About 2 years later, the Cobell case class action lawsuit 
was filed. In the years since then, we have all learned just 
what a sorry state the trust fund management system was in. The 
reasons for this are manifold, I am sure, but most people would 
agree that for many decades the Federal Government has not been 
held accountable for its management practices.
    This hearing is not directly about the Cobell lawsuit, 
although trust reform should be a component of any legislation 
to resolve the case and problems that led to it. The purpose of 
today's hearing is to listen to the views of the Administration 
and Indian country of how the system of Indian trust 
management, management of funds and natural resources, might be 
reformed. I am interested in hearing from the Administration on 
what it has done to improve trust management and what 
additional steps it intends to take, because it is no secret 
that many in Indian country are not satisfied in whole or in 
part with the Administration's approach and have different 
views about the direction we should be going in reforming the 
system.
    I also look forward to hearing what the tribal leaders and 
Ms. Cobell on the second panel have to say about reforming the 
system.
    One more point before proceeding. Several times in recent 
months I have promised to make trust reform, including the 
settlement of the Cobell case and related issues, a high 
priority during my tenure as chairman of the Committee on 
Indian Affairs, but I will also repeat here that I intend to 
give it only one good shot. If it looks like we are not getting 
anywhere, if the tribes, the Government, or other interested 
parties cannot come to terms on a settlement of the lawsuit and 
on what trust reform should be, then I will leave that task to 
a future Congress and the courts and concentrate my efforts on 
other important issues in Indian country.
    I am hoping that the Administration and Indian country will 
begin working with committee staff immediately to see whether 
something close to a consensus can be reached on the key 
components of trust reform. This will probably require an 
efficient, but representative working group within Indian 
Country to begin helping us shape a bill that can be introduced 
for review and comment by all stakeholders.
    Vice Chairman Dorgan, do you have a statement at this time?

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

    Senator Dorgan. Mr. Chairman, let me say that I share your 
sentiments. It is the case that we cannot solve this issue. 
Chairman McCain and I and other members of this committee 
cannot resolve this issue. The parties to this issue must find 
a way to develop consensus to resolve this issue.
    I do not think there is any question but that what is 
happening now is having a detrimental impact on Indian country. 
We see sharp cuts in some of the tribal programs that are 
critically important to Indian tribes for the welfare of the 
Indian people in this country. We see those sharp cuts in part 
as a result of the litigation. In my judgment, more and more 
funds are going to both sides of the litigation. In some ways, 
I guess in many ways, the Indian people are bearing the burden 
of the costs for both sides of the litigation.
    I think that the settlement of these claims, the settlement 
of this issue is imperative. My hope is that through the 
process of this hearing and through the development of other 
approaches, that we can find a way for us to get all the 
parties together to reach a consensus and put this behind us.
    If we do not, it will have an impact on virtually 
everything this committee does, all the appropriations that we 
are involved in with respect to Indian tribes for years to 
come. I don't think any of us want that. What we want is a 
fair, thoughtful, equitable settlement that all parties can 
agree to, and then we move on.
    So Mr. Chairman, thank you very much for your leadership.
    The Chairman. Thank you very much.
    Welcome, Mr. Cason. Welcome back, Mr. Swimmer. Please 
proceed.

 STATEMENT OF JIM CASON, ACTING ASSISTANT SECRETARY FOR INDIAN 
   AFFAIRS, DEPARTMENT OF THE INTERIOR, ACCOMPANIED BY ROSS 
         SWIMMER, SPECIAL TRUSTEE FOR AMERICAN INDIANS

    Mr. Cason. Thank you, Mr. Chairman.
    My name is Jim Cason. I am the associate deputy secretary 
of the Department, and currently I have delegated authorities 
of the assistant secretary of Indian affairs while we are 
searching for a new assistant secretary. I am accompanied by 
Ross Swimmer, who is the special trustee for American Indians. 
We intend to give a very short opening statement and then go 
ahead and get on with questions.
    We would like to have our written testimony entered into 
the record, if that would be satisfactory.
    The Chairman. Without objection.
    Mr. Cason. We would commend the written testimony for 
reading. We think it gives a pretty detailed explanation of 
some of the problems that we think are inherent to the trust.
    The Indian trusts had origins with the formation with the 
formation and expansion of our country. It first began with 
tribes and in 1887 the United States began a trust relationship 
with individual Indians. The trust relationship is complicated. 
It has many opportunities, problems and challenges. Many of the 
problems stem from conflicting statutory objectives that 
combine a social agenda with demands of a fiduciary trust, all 
to be managed in a government program environment.
    The challenges and problems have been longstanding and 
mostly unresolved. For example, the statutory origin of the 
trust without a trust document is an issue; the long-term 
nature of the trust, it is in perpetuity, and we are 
generations away from when the trust started; the lack of a 
cost-benefit paradigm that marries the interest of the trustee 
delegate and the Indian beneficiaries together; land 
fractionation; the choice of skilled personnel; the lack of 
clear requirements and expectations on all parties that are 
consistent; the duties and funding are not well coordinated; 
and organizational structure is a problem.
    All of these problems basically came to roost with 
litigation that we all talk about as Cobell, and some 
associated 22 or 23 lawsuits filed by tribes, where these 
problems manifest themselves in litigation. One of the problems 
that was the root of this hearing is to talk about 
organizational structure, and how we dealt with reorganization 
of the Department. That effort began about three years ago, and 
it began with our initial discussions about the underlying 
roots of the Cobell lawsuit.
    One of the things that we actually agreed with the 
plaintiffs on is that we were not clearly focused on managing 
the trust that we had as a trust. The reorganization efforts 
that began with the advancement of an idea that was lovingly 
termed BITAM by Indian country, was to try to separate out the 
fiduciary trust duties of the Bureau of Indian Affairs [BIA] 
into a separate organization and place a new assistant 
secretary in charge of that, so we have a very clear focus on 
the Department's trust responsibilities.
    Needless to say, there was broad opposition in Indian 
country to that idea for many reasons. That began an almost 2-
year process of initial discussions with Indians, a whole host 
of meetings, a task force endeavor, lots of written examination 
of different proposals. At the end of that process, we ended up 
at impasse. The issues at impasse were basically a request for 
the United States to waive sovereignty; the interest of Indian 
country in having an external oversight committee that would 
oversee the Secretary of Interior and her implementation of the 
trust; and a request to have delineated trust standards that 
were in excess of what we already had in the Department.
    We reached an impasse and at that point the task force for 
reorganization broke up and the Department went internal at 
that point and attempted to implement in good faith the parts 
of the discussion that we had had in the task force that we 
thought we ended up agreeing on. There is one exception that 
comes to mind, and that is we had reached an agreement on 
pursuing an under secretary for Indian affairs in the 
Department. We did not pursue that because we believed that it 
would take both Indian country and the Department supporting 
that in Congress in order to get that authorization, so we did 
not pursue that part.
    After the reorganization, we are basically complete with 
our reorganization efforts. There are still some staff people 
we need to hire. That is part of our normal personnel process, 
but essentially the reorganization is complete within the 
Department. We have moved our focus since then from 
reorganization efforts to a host of other efforts designed to 
improve the trust. Ross is going to talk a couple of minutes 
about those efforts.
    Mr. Swimmer. Thank you, Jim.
    Thank you, Mr. Chairman and Vice Chairman.
    I appreciate the opportunity to present to you today some 
of the things that are being done in Indian country in regard 
to the fiduciary trust. As Mr. Cason explained, the trust as we 
know it today as a fiduciary trust was not a part of the 1887 
Allotment Act. The original Allotment Act was for the purpose 
of holding title to land to prevent alienation or any other 
form of leasing, mortgaging or using of the land other than by 
the individual him- or herself.
    The attempt would be, then, to move Indian individuals into 
the economy of the day, which was primarily agrarian, to become 
farmers and ranchers like their neighbors, and then of course, 
as we know, the other result was to open the west for 
homestead.
    The intent was to have that title held for 25 years, and at 
such time as that ended, that would be the end of that era and 
fee title would be transferred to all of the allotees. In fact, 
in 1887, the law specifically prohibited an Indian from leasing 
their land or getting income from an outside source of their 
land because the intent was to teach them how to use the land, 
rather than to have money come into it.
    As a result, we have what in law is often referred to as a 
resulting trust. In this case, I may refer to it as an evolving 
trust. In about 1910, there was much greater freedom given by 
Congress to Indian individuals to lease their land. Much of 
this land was not good for production, for agricultural 
production. And there were people that wanted to lease it, and 
we know about the mineral leasing that eventually came about as 
oil and gas became important in Indian country.
    What we have today is what we call a fiduciary trust, but 
over the years was treated more as a programmatic activity of 
the BIA. What we created in the Office of the Special Trustee 
as a result of the work with the tribes, with the BIA and other 
bureaus within Interior, the Bureau of Land Management, 
Minerals Management Service, and others, was a trust model that 
we called the fiduciary trust model. It grew out of 1 year of 
looking at how the BIA and the Department managed this trust. 
Then we spent 1 year on how we should manage it. Out of that 
grew the model that is our basis for managing this trust today.
    Obviously, there are still serious issues when we talk 
about managing the trust. Mr. Cason alluded to a few of those. 
We have highly fractionated interests in land that make it very 
difficult to lease that land, to collect the money, and to 
distribute it to thousands and thousands of people that may own 
a single parcel. However, some of the things I will mention do 
help us do that more effectively. Whether we should or not is 
not a question. At this point, we are obligated by some, it is 
estimated to be 4,000 statutes and regulations that direct how 
we should administer this trust.
    One of the things that we have done as part of the model is 
we created another category of people in Indian country. For 
the first time since 1887 we have fiduciary trust officers 
deployed to the field located at BIA agencies. These are 
trained trust officers. They come many from the private sector, 
several are attorneys, several have been with banks and trust 
companies. They have been trained in the concepts of fiduciary 
trusts. They have also been trained in how we transfer the 
concepts of private sector fiduciary trusts to the Indian 
trusts, because they do not always mesh, but the concept of a 
fiduciary, someone that is faithful to the process of managing 
another's property are basically the same.
    The statute has pretty much set out what that 
responsibility is. We have fiduciary trust administrators that 
we have selected six of those who manage the fiduciary trust 
officers at the reservation level. We have created in addition 
support for the beneficiaries. We have a beneficiary call 
center that has now been in place for nearly 2 months. In the 2 
months, they have received over 10,000 calls from beneficiaries 
asking for information, everything from when is my lease due, 
am I going to lease my land, how much do I have in my account, 
when was my last check given, and this sort of thing; 94 
percent of the calls have been resolved at that time when the 
call center was called. The other calls get referred to the 
trust officer or to a superintendent or a realty person at the 
agency for support.
    We have also noted in the past that we have had trouble in 
ensuring that collections were made timely. It was not unusual 
for a lessee to come into the agency and leave a check, and 
that check may lay on somebody's desk for a few days. We do not 
want that to happen. We have moved into a lockbox system so 
that all moneys that are owed will be collected through a 
lockbox. We will have a receivable system that will indicate to 
the lessee how much that money is supposed to be, and we will 
be able to track it.
    In the year 2000, we completed the conversion from about a 
30-year-old legacy accounting system to a modern trust 
accounting system used currently by the largest private trust 
companies in the United States. That trust system now allows us 
to account for collections and to balance to the penny with 
Treasury on a daily basis.
    In addition to the lockbox system, we have advised and 
continue to stress to individual Indian people that we will 
disburse their funds faster through the use of direct deposits. 
We have worked out with Treasury a system where as soon as the 
money comes in on a person's account, we can send it right out 
again if it is a non-restricted account. In those cases where 
we can do it as a direct deposit, it will go there even 
quicker. Last year, we sent 435,000 checks out to individual 
Indian account holders. We would rather do that in a direct 
deposit, saving both money on checks, as well as getting the 
money to them faster.
    We have and are in the process of replacing legacy IT 
systems. We have just converted fully from a, again, 30-year-
old title system that was very cumbersome to use, to a new 
title system that should allow us to be able to issue title 
status reports much quicker than before.
    We have provided through professional trust training 
centers, trust training not only for employees of the Special 
Trustee, but for the employees of the BIA that may be involved 
in providing trust services, as well as other employees of the 
Department of the Interior, BLM, Minerals Management Service 
and others, in the concepts of fiduciary trusts, and again 
explaining how those concepts relate to the private sector 
fiduciary trustee and the Indian trust.
    The model calls for a streamlining of the probate process 
through combining the probate adjudication. It calls for 
placing of surveyors from the Bureau of Land Management in each 
of the regional BIA offices to provide faster services on 
surveying. We have instituted a records center at Lenexa, 
Kansas that is now a state-of-the-art record center, better 
than anything in the Federal Government. It is a repository 
currently for the records of the BIA and for the trustee for 
the beneficiaries and the tribes. There are millions of records 
currently being stored there and millions of records that will 
go there in the future.
    These are just a few of the things that we have 
accomplished as a result of the fiduciary trust model. We are 
making progress every single day on implementing the model that 
was adopted this past year.
    Mr. Cason. Mr. Chairman, can I just add one other thing? We 
really appreciate the intent of the committee to take on the 
Cobell issue and trust reform during this session. It is a 
really complex and difficult issue and we would really 
appreciate some help with it.
    Thank you.
    [Prepared statement of Mr. Cason appears in appendix.]
    The Chairman. Mr. Swimmer, what are the major remaining 
obstacles to resolving this issue, in your view?
    Mr. Swimmer. In terms of the reform, the real remaining 
work that needs to be done is in the IT sector. We have two 
other programs coming along that will replace legacy 
information technology systems. One of those is in what we call 
the realty, which affects the leasing and managing the land, 
basically. That is a system that we are currently, in fact it 
is scheduled for the end of March, to do a user acceptance 
test. Once that is done and it passes the test, we will begin 
the implementation of that. That should replace what you may 
have heard the acronym before, the IRMS, integrated records 
management system, as well as about eight other legacy sort of 
home-grown system RIMS, DADS, GLADS, and various others.
    That is going to be a major change. What it does, it allows 
us then to fully comply with the Reform Act. It allows us to 
give beneficiary statements with source, type, status of funds. 
Even though a beneficiary may have a 1/1000's of an interest in 
a parcel of land or an allotment, we will list that on their 
statement. We will show whether there is any income received 
from that. We will show the balance of their account and any 
other assets that they may own. On average, a beneficiary today 
has about 10 interests, usually fractionated interests in land 
scattered in multiple States. The new title system I mentioned 
gives us access to that information for the individual on a 
national scale without having to go region by region.
    The other basic tracking systems for the appraisal program 
for the probate program and others that we are replacing legacy 
systems. The other major component, obviously, is we are 
currently hamstrung by the lack of Internet access. This is of 
course a court-ordered issue. We do not have any choice about 
it. We are kept off of the Internet. We cannot communicate with 
beneficiaries via the Internet. It does have a serious impact 
on our ability to perform a lot of these functions in a 
productive manner. We are having to do a lot of work around to 
get there.
    The Chairman. What about the resolution of claims?
    Mr. Swimmer. In terms of the accounting claims, we are 
doing the accounting as we have explained to the committee 
before. My office oversees the accounting. It is done through 
the Office of Historical Trust Accounting which was created by 
this Secretary shortly after she came into office. That office 
has pursued the accounting. They have an accounting plan. They 
have an accounting manual. Currently, I think that they have 
completed accountings or reconciliation of about 36,000 
accounts, primarily judgment accounts and per capita accounts. 
They have ventured into the land-based accounts and are doing 
some of the work there on the larger transactions.
    The plan, as we have described to the committee before, was 
a plan to do a transaction-by-transaction analysis of accounts 
from a date-certain forward that would give us a full 
reconciliation of a person's account and then on transactions 
below a certain threshold, essentially $5,000, we would do then 
a statistical sampling, a broad sample across the Nation to 
give us an indication if in fact there appeared to be any 
serious issues with the account statements of the individuals.
    As you know, that is a process that we started 2 years ago. 
We have continued to ask Congress to fund that. It is 
approximately a $335-million effort. We continue to work along 
those lines on the plan. That was a plan submitted to the court 
January 6, 2003. Recently, the Federal District Court has 
reinstated its structural injunction of last year that would 
require an accounting in the form of a transaction-by-
transaction analysis for every account from the time it ever 
had money in it, which would probably be about 1895.
    The Chairman. What would be the expense involved with that?
    Mr. Swimmer. It has been estimated by our accounting group 
and other professionals that it would be somewhere between $6 
billion and $12 billion.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you.
    Mr. Swimmer, that is the course we are now on, correct? The 
transaction-by-transaction historical accounting ordered by the 
court? If nothing were to interrupt what is now happening, that 
is the direction that we are now moving. Is that correct?
    Mr. Swimmer. That is correct.
    Senator Dorgan. And the end-point of that is the 
expenditure of billions and billions of dollars.
    Mr. Swimmer. Yes.
    Senator Dorgan. It appears to me that much of that would 
come out of otherwise appropriated funds for critically needed 
programs for Indian tribes and Indian citizens across our 
country. Would you agree with that?
    Mr. Swimmer. It has to come from someplace. It would come 
from appropriations. There have been suggestions that it should 
come from the, quote, ``judgment fund'' of the Justice 
Department that is used often to pay off judgments, but that 
does not protect, if you will, the Department of the Interior's 
budget. It still is appropriated funds. It still has to come 
from the appropriations.
    Senator Dorgan. Well, if you look at the President's budget 
this year, what you find is that in that Interior Department, 
you have a certain amount of money that is allocated for these 
Indian programs, and that same Department bears the burden, 
then, of the additional costs here. That looks to me like you 
have a corresponding decrease in certain Indian programs and a 
corresponding increase in the trust issues.
    Let me just ask, you indicated that you have people in the 
field now that will be involved in telephone servicing if 
someone calls and wants some information about their account. I 
do not quite understand how you do that when there is the 
fractionated ownership and the absence of the completion of a 
transactional accounting. How good is the information that you 
provide to people who call and ask for it?
    Mr. Swimmer. What I would distinguish is the historical 
accounting, and say answering a question regarding someone's 
grandfather's account statement in 1930. We would not do that. 
That is a function of the historical accounting that eventually 
will come up with that account statement. At that point, we 
theoretically could do that. What the call center is doing, it 
is a centralized 800 number and the idea is to, and frankly it 
is patterned after the Bank of America's trust call center so 
that when an individual, wherever they might be located, calls 
for information on their account balance today or yesterday or 
back to 2000, we would be able to pull up the information right 
out of the system, out of our trust fund accounting system. Or 
if they ask for information regarding their fractional 
interest, or if they had a relative that was in probate and 
they wanted to know the status of things like that, we could 
answer those questions for them and are able to do that.
    Senator Dorgan. I understand. Mr. Swimmer, what is the 
practical alternative to going back over a century and 
recreating on a transactional basis this historical accounting? 
If doing that is going to cost $6 billion, $8 billion, or $10 
billion, what is the practical alternative do doing that in a 
way that satisfies the interests of all the stakeholders here, 
in your judgment?
    Mr. Cason. I will take the first crack at it. We have 
another alternative that the Department is actually 
implementing, which is the plan that we have proffered to the 
court. That plan depends on the use of statistical accounting 
to try and resolve the issues and questions about the accuracy 
of the systems in the past. So that is a plan that takes a lot 
less time to do. It takes a lot less money to do. If you add 
the caveat at the end of your question, will everyone be 
satisfied? Probably not.
    If we do the plan proffered by the court, will everybody be 
satisfied? Probably not. There is not any plan that will 
satisfy all parties that might be interested in this. But there 
definitely are alternatives that can be pursued to define the 
scope of the accounting and define the level of effort 
required, the level of accuracy of the accounting. All of those 
will dictate the amount of time and resources it takes to do 
the work.
    We have possibilities for a different approach as well, and 
that is discussion about settlement. Is there some way that we 
can cobble together a strategy on settlement that would be 
acceptable to a majority of the parties? Is there any 
settlement approach to satisfy everyone? No, but there are ways 
that we can address most of the problems in a way that is 
reasonable. We would like to work with the committee to explore 
the various options that are there and see if we can work with 
Indian country to bring it to resolution so that in the end, 
whatever benefits come out of this go to Indian people as 
opposed to a host of lawyers and accountants.
    Senator Dorgan. Mr. Chairman, thank you. I might just 
observe that obviously I think working with the Indian people 
takes priority over working with this committee because I think 
the only way this committee is going to play a constructive 
role here is to have brought to us the development of a 
consensus of all the stakeholders. Primary, of course, there 
are the Native Americans whose accounts we are talking about.
    Mr. Chairman, thank you.
    The Chairman. Thank you.
    Out of curiosity, Mr. Cason, where would $6 billion to $12 
billion come from? What is the BIA's budget?
    Mr. Cason. The BIA budget right now, including education, 
is about $2.2 billion. How much we spend on implementing the 
trust for both tribes and individuals is somewhere on the order 
of $500 million a year. So clearly, the Department does not 
have a funding base that could accommodate this.
    The Chairman. I thank you very much. I am sure we will be 
seeing more of each other.
    Mr. Cason. Thank you, Mr. Chairman.
    Mr. Swimmer. Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    The next panel is Tex Hall, who is the president of the 
National Congress of American Indians; Chief Jim Gray who is 
the chairman of the Board of Directors, Inter-Tribal Monitoring 
Association of Albuquerque, NM; Charles Colombe, who is the 
president of the Rosebud Sioux Tribe; Darrell Hillaire, who is 
the chairman of the Lummi Nation; and Elouise P. Cobell, 
Blackfeet Reservation Development Fund, Browning, MT. Welcome.
    We will begin with you, President Hall.

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

    Mr. Hall. Thank you, Mr. Chairman. Again for the record, my 
name is Tex Hall. I am the president of the National Congress 
of American Indians and chairman of the Mandan, Hidatsa and 
Arikara Nation in Fort Berthold, ND. I appreciate Chairman 
McCain and Vice Chairman Dorgan for allowing us to testify on 
the oversight hearing on trust reform.
    Just a brief statement to the response to what was 
testified earlier. At the end of the day, we still have 50,000 
addresses unknown, IIM account holders not known. We still have 
spent nearly $1 billion for trust reform, and we are not at the 
point where we need to be. It still takes in some places 3 
years to get accurate title for landownership. In many places, 
including my reservation, lease checks for grazing are not 
distributed yet in a timely manner and those usually come out 
much earlier.
    So I would like to start my testimony officially by saying 
I am pleased to be on this panel here with the distinguished 
tribal leaders that we have before us and the Cobell plaintiff 
Attorney Keith Harper. I am also pleased to be joined by Chief 
Jim Gray who is the chairman of the Inter-Tribal Monitoring 
Association. We at NCAI and ITMA are going to lead a coalition 
of Indian tribes and organizations that will help draft a 
legislative trust reform and settlement proposal which we would 
like to submit to the committee later on this spring.
    I cannot emphasize how important in Indian country the 
formulation of this proposal is. To that end, I want to make it 
clear that my staff and all of us are ready to work with the 
committee 24-7, whatever it takes to get that task done.
    The trust problem, as we know, has dogged the United States 
for over 100 years, so on behalf of NCAI we want to say that we 
want legislation that will require the United States to 
exercise its fiduciary responsibility to Native Americans. We 
expect that there will be a high standard of accountability and 
responsibility. There really can be no other way. Fiduciary law 
is designed to prevent the trustee from abusing its powers. As 
a fiduciary, the United States cannot treat its relationship 
with Indian tribes as an arms-length or adversarial 
relationship. Instead, the United States must safeguard and 
promote the interests of Indian tribes and individual Indians. 
It has not, and that is why we need the help of this committee 
and Congress.
    Against this backdrop, the NCAI strongly shares the views 
of the leadership of this committee that it is time for 
Congress to establish a fair and equitable process for settling 
the Cobell and doing a trust fix. Tribal leaders have 
consistently supported the goals of the Cobell plaintiffs in 
seeking to correct the trust fund's accounting and overhaul the 
system at the Interior.
    Just a little backdrop, in 2002 in response to the BITAM 
that Jim Cason mentioned that was presented by the Secretary in 
the fall of 2001, it was agreed upon by the tribes through NCAI 
and the Secretary for creation of a task force that met pretty 
much for all of 2002. We did not want a bureaucracy that 
separates the management of our lands from all of the 
activities that take place on our lands. What has instead 
evolved is a two-headed bureaucracy that would never make any 
decisions and would take resources from other important 
programs of the BIA and really limit services to Indian 
recipients.
    Despite our rejection of this BITAM, it seems like our 
worst fears are coming true as trust functions and resources 
are being shifted from the BIA to the Office of the Special 
Trustee. The President's budget for 2006 would cut $139 million 
from BIA, mostly from school construction, and add $76 million 
to OST. On top of this, OST has created trust officers without 
tribal consultation, with basically no job description and 
basically no coordination with tribal governments.
    So after the meeting in Spokane, we reached an agreement to 
create this task force in 2002. After 10 months, the Department 
walked away from the table. However, some of the key 
recommendations that were part of this proposed legislation 
that the Indian tribes will be drafting in the next few months, 
are based on the recommendations and discussions that came out 
of the 2002 task force.
    We had unanimous consent on three key issues. One is the 
creation of an independent entity with oversight responsibility 
for trust reform. The Office of Special Trustee was originally 
envisioned as an independent office that could provide expert 
trust management advice and oversight. Instead, it was placed 
under the Secretary of the Interior and now completely lacks 
independence. It has evolved into a trust management agency 
that was never intended by Congress or the tribes. Tribal 
leadership on the task force are working on a proposal to phase 
out the Office of Special Trustee, and instead replace it with 
an independent commission capable of oversight on the Indian 
trust.
    In the last Congress, you, Chairman McCain, helped 
introduce S. 1459, a bill which would create an independent 
commission that would review Federal trust laws and policies 
for the management of the Indian trust funds and make 
recommendations. NCAI strongly supports an independent agency 
and independence, and that would be of course a great backbone 
of our legislative proposal.
    The second commonality that tribes reached was a high-level 
responsibility for Indian affairs. The Department agreed with 
tribal leaders on the task force about the creation of an under 
secretary for Indian affairs that would have direct line 
authority over all aspects of Indian affairs within the 
Department, including the coordination of trust reform efforts 
across all the relevant agencies within the Department of the 
Interior outside of BIA. Indian country supports the creation 
of an under or deputy secretary in new trust reform 
legislation.
    And number three, the reorganization of the BIA. The 
principal goal of the tribal task force members was to have the 
resources and decision making at the local level of the BIA, 
coupled with an internal oversight mechanism. The Department 
instead has preferred splitting the authority at the local 
level, which is what we are seeing today, the development of 
trust officers. Like BITAM, this is unacceptable to Indian 
country and we ask Congress to put an end to this in proposed 
legislation.
    Tribal leaders also wanted clear trust standards and legal 
obligation. If DOI violates its trust responsibility to Indian 
tribes because DOI is a fiduciary and acts as the bank for 
Indian tribes, Congress must make DOI to commonly accept legal 
standards and accountability as other trustees.
    On adequate resources, we must have adequate resources, 
financial and human resources necessary to perform the trust 
duties. In 1994, the Trust Reform Act called for the Special 
Trustee to review the Federal budget for trust reform and 
certify that it is adequate to meet the needs of trust 
management. In practice, the Special Trustee has no 
independence and certifies whatever is submitted by the 
President. Tribal leaders strongly believe that an independent 
entity should review the Federal budget for trust management 
and provide its views to Congress.
    On core business systems, NCAI believes that Congress 
should also focus oversight efforts on title, leases and sales 
and accounting to ensure that reform efforts meet the 
requirements of the fiduciary trust.
    On fractionation, we at the tribal level, at the 
Administration level and Congress, have great success in the 
Indian Land Consolidation Act. However, we need more funding.
    Finally, last week at the NCAI meeting, Indian country and 
NCAI leaders met and agreed that we must ask Congress to 
consult with Indian country first on any trust reform 
legislation. NCAI strongly believes that any legislative 
proposal on trust reform should be developed with Indian tribes 
prior to being introduced in Congress. So as president, I 
directed a special committee to work on this reform and 
settlement legislation. I will serve as cochair of this 
committee on trust, along with Chief Jim Gray. We will reach 
out to all tribes and tribal organizations, and will welcome 
and encourage participation at these meetings by all.
    We look forward to working closely with the members of this 
committee, the House Resources Committee, and your staffs on 
the development of a lasting solution that will settle the 
litigation and create a lasting trust reform.
    Thank you, Mr. Chairman.
    [Prepared statement of Mr. Hall appears in appendix.]
    The Chairman. Thank you.
    Chief Gray.

  STATEMENT OF JIM GRAY, CHAIRMAN, BOARD OF DIRECTORS, INTER-
                 TRIBAL MONITORING ASSOCIATION

    Mr. Gray. Thank you, Senators. My name is Jim Gray. I am 
the principal chief of the Osage Nation. I am also chairman of 
the Inter-Tribal Monitoring Association, known as ITMA.
    This organization of 60 tribes across the country that have 
vast trust resources that are managed by the Department of the 
Interior, BIA through the OST. Over the course of these past 15 
years of this organization's existence, we have worked 
diligently with both the House and Senate committees that have 
jurisdiction on Indian affairs. We also have worked diligently 
with the Administration over the years in a variety of ways on 
how the administration of the trust resources of Indian country 
is being managed and how it is being appropriated.
    Part of the concerns that ITMA wants to bring before the 
committee today is primarily detailed in our written testimony 
which is being submitted to the committee.
    The Chairman. All written statements will be made part of 
the record.
    Mr. Gray. Okay, thank you.
    So today what I would just like to do is just make brief 
observations about where we are today from ITMA's standpoint, 
and how we can be helpful in contributing to an overall effort 
to achieve real trust reform in Indian country.
    Part of the biggest concerns that our organization has had 
is following the process of the 2-B model and its fiduciary 
trust model, as it is being called today as it is being rolled 
out across Indian country. One of the biggest concerns that our 
organization has had is the lack of adequate tribal input and 
discussion as these policies have been carried out by the 
Administration.
    One of the concerns that I have had just personally is the 
internal workings of this entity before it was rolled out into 
Indian country. What I would like to have been able to have 
been a part of, and of course Chairman Hall had mentioned this 
earlier, that the task force had worked for almost two years on 
this effort to try to find some consensus. But the only thing 
that I think Indian country came out of that was finding the 
areas where there was disagreement. Unfortunately, that 
disagreement has not been, I don't know, sufficiently 
communicated to Congress or to the Administration as these 
proposals have been fully implemented.
    Another concern that we have had is that the process of 
getting input from the people who are most affected by these 
policies, the beneficiaries, the individual account holders, as 
well as the tribes themselves, has been something that ITMA has 
worked very hard to try to find a resolution to. Last year, at 
the very beginning of last year, we started out what I thought 
was a very ambitious and hopeful effort by ITMA to reach out to 
Indian country. We held seven listening conferences in six 
States around the country last year. We have four scheduled to 
be going on this year. This work, as important as it is, it is 
limiting in some respects in that we would like to be able to 
do more. The problem is that the purpose of this is to try to 
find out from individuals across Indian country the impacts of 
the fiduciary trust model is having on Indian country.
    We have made some general observations that are in our 
written testimony, but I would just like to speak to a couple 
of them right now. One of the concerns is obviously the speed 
at which the roll-out is taking place and its impact, and the 
fact that many of these people who are beneficiaries are not 
receiving a full understanding of the changes that are going on 
within the Administration from the OST to the BIA. Most of the 
individual Indians just do not understand what the implications 
of moving these policies and administrative positions around.
    From the tribal leader's standpoint, I am somewhat familiar 
with the moving of the boxes all over and the reorganization. 
As Chairman Hall mentioned earlier, we have concerns that we 
feel like there has been some consolidation at the central 
office of very important functions that normally used to be 
taken care of at the ground.
    Part of what I am most proud of with these listening 
conferences that the ITMA has hosted had to do with being able 
to get top-level presidential-appointed Administration 
officials to come before these hearings. Mr. Swimmer and the 
Deputy Director Donna Erwin attended many of these meetings. We 
tried our best to try to get their counterparts at the Bureau 
to attend these meetings as well. One of the problems that we 
encountered was just scheduling problems, but for the most part 
these two individuals from the OST made themselves available to 
listen to the concerns from both tribes and individuals time 
and time again on their concerns.
    Many of the concerns could be explained with just good 
communication. Some of the concerns were fundamental, and are 
part of our written testimony, that we think need to be 
addressed by this committee.
    So ultimately, and I will just sum up real quick at this 
point, is that we have what I think is probably a good system 
in place right now from ITMA's standpoint to continue this 
effort to get input into Indian country, and to specifically be 
able to address and document some of the concerns that are 
happening in the roll-out of the Department's new fiduciary 
trust model.
    I think what I would like to be able to continue to bring 
before this committee on behalf of this organization over time 
is basically a presence in Indian country that is maintaining 
what the Administration believes is the best trust model that 
they can put together, and just to see its impact on Indian 
country, and be able to come before this committee as needed to 
be able to present to you the views from Indian country as to 
how that is working.
    If Congress does not act on trust reform in the form of any 
legislation, I would hope that you would see that our role 
would be a helpful one. But beyond that, if there is a real 
interest in doing a full-blown legislative solution on trust 
reform, that you will also see that ITMA can be helpful in that 
capacity as well. I do pledge to work with the organizations 
that we have developed relationships with, like the Council of 
Energy Resource Tribes, the Inter-Tribal Timber Council, and 
many other intertribal organizations that are devoted to trust 
resource management as a narrow focus, as well as working with 
Chairman Tex Hall here, who has demonstrated great leadership 
in this area on behalf of NCAI.
    So at this point, I would like to make myself available for 
any questions you may have.
    [Prepared statement of Mr. Gray appears in appendix.]
    The Chairman. Thank you very much.
    President Colombe.

  STATEMENT OF CHARLES COLOMBE, PRESIDENT, ROSEBUD SIOUX TRIBE

    Mr. Colombe. Chairman McCain, Vice Chairman Dorgan, members 
of the committee, my name is Charles Colombe. As tribal 
president, I am honored to testify today on behalf of the 
Rosebud Sioux Tribe of South Dakota.
    I have also submitted written testimony that you have, but 
I am going to shorten that up. I want to thank the committee 
for their ongoing efforts in holding this hearing and in 
attempting to deal with the issue before us.
    At Rosebud, we have approximately 900,000 acres of trust 
land, about 25,000 tribal members, with 21,000 of them living 
on the reservation. We have the second-poorest county in the 
United States there. We are land-poor in a lot of ways. Only 
one out of five of our adults have a job.
    However, we consider ourselves rich in our customs, our 
traditions, and certainly in our land. Land should be the 
foundation of our reservation's economy. Since the reservations 
were created, the United States has had management and control 
of our land. As I am sure you are aware, the BIA's land 
management has been a dismal failure. Land management is 
therefore the heart of trust reform in our region, and I know 
trust land very well.
    I ran our tribe's purchase program during the 1970's when I 
was on the tribal council. From 1979-94, I contracted title 
work to the BIA and oil companies. I completed change of title 
and curative work and computerized all of the land records on 
all trust titles in the Minneapolis area, the Great Lakes area, 
Great Plains, Rocky Mountain, and Northwest regions.
    I also built the title plant data for the Pacific region 
and turned the switch on in Sacramento. I provided the same 
services for 11 of the 19 Pueblos in New Mexico. In that time, 
I also did a lot of work on title relating to legal claims. For 
example, law firms asked me to reconstruct ownership files 
after they had won claims against the United States for timber 
mismanagement. This sometimes required me to construct records 
for land that had been probated 20- or 30-year earlier, some of 
which had passed out of trust.
    Also beginning in 1979, I ran the 28 U.S.C. 2415 claims 
process for South Dakota Legal Services. The United States had 
filed actions against local governments, utility companies and 
others on behalf of tribes and allotees for damaging and 
primarily for using trust lands without first obtaining 
perfected rights-of-way. The 2415 claims process was an effort 
to assist tribal members in filing land claims before the 
statute of limitations expired.
    On a personal level, as a rancher, I have leased and 
permitted thousands of trust acres, bought and used land, and 
mortgaged it. I understand the way the Bureau manages land, not 
only on my reservation, but on many others where I have 
provided contract title services.
    Before I get too far into my testimony, I want to 
acknowledge that almost every tribe has a dog in the fight over 
the ongoing reorganization of the BIA, because most tribes are 
impacted by the deep funding cuts to TPA and school 
construction. The Department of the Interior should collaborate 
with all tribes to reform the Indian trust. The United States, 
the Office of Special Trustee, the BIA and Indian tribes can 
collaborate. One only has to look at the successful passage of 
the American Indian Probate Reform Act of 2004 to see how well 
this can work. I personally believe that this is the most 
significant piece of legislation enacted to benefit Indian 
tribes and their members since the 1934 Reorganization Act.
    The Great Plains and Rocky Mountain region have the 
majority of individual Indian money account holders. We want to 
collaborate with the United States to come up with meaningful 
trust reform. These regions also recognize that other regions 
like Oklahoma may very well have higher dollar values in their 
IIM accounts due to the development of mineral resources on 
their land.
    An example from my reservation demonstrates the land 
management problems we face with the BIA. It also demonstrates 
how unresponsive current reorganization is to tribal trust 
concerns on the Great Plains. In 1943, the BIA created tribal 
land enterprise for the Rosebud Sioux Tribe under a Federal 
charter. It is the only one in existence. The BIA wrote TLE's 
bylaws and still retains supervisory authority over all actions 
by the board of directors. The board is appointed by the tribal 
council and the shareholders. As president, I am also a TLE 
board member.
    The BIA today retains signatory authority over all 
accounts, land transactions, leasing and is responsible to 
ensure that fair market value is received by the allotee when 
he sells his property to TLE. TLE seemed like a good idea at 
the time it was created in 1943. TLE has worked well for the 
BIA and sometimes, but not always, for tribal government. Here 
is how it should work.
    TLE purchases land from individual tribal members, paying 
them with a certificate of ownership in the corporation 
comparable to a stock certificate. These certificates allow 
individual allotees to retain a financial interest in a 
corporation that manages the land that would otherwise be of 
little or no use to them because it was rapidly turned into 
fractionated undivided interests. Thus, TLE consolidated 
fractional undivided land interests and returns those interests 
to tribal ownership.
    TLE manages such lands by leasing most of it for 
agricultural uses. TLE assigned other land to individual tribal 
members. Profits from leased land have been used to buy even 
more fractionated land. Regrettably, the bylaws have not been 
followed for a variety of reasons. TLE board of directors and 
TLE staff are not trained in land management or other 
accounting procedures. TLE has simply failed miserably in 
complying with its own bylaws.
    The BIA has stood on the sidelines and allowed 
shareholders, that is, former allotees, to be defrauded. On 
paper, TLE has been wildly successful, and has apparently 
acquired over 570,000 acres of individual land that it now 
manages for the tribes. It generates approximately $3 million 
every year in gross lease income. After expenses shows a profit 
of close to $2 million a year. In reality, however, TLE has 
become a black hole for the financial interests of individual 
certificate holders.
    Since 1943, TLE has systematically failed to perform the 
annual land valuation mandated by its bylaws. Due to these 
failings, individuals selling certificates issued in 1943 could 
receive less.
    The Chairman. Mr. President, you will have to summarize, if 
you will please.
    Mr. Colombe. Thank you.
    Individuals receiving less than $42 an acre for land that 
is worth about $300 an acre.
    Frankly, Mr. Chairman, what I need from the committee, the 
BIA, U.S. Government, are a couple of very simple things. We 
need to collaborate on how to fix this. This is a case that the 
accounting is there, the records are there, everything is 
before us, and it shows that our people have basically lost 
close to $100 million. It is not one that we have to do a 
historical accounting on and search for records that are not 
there. They are all there.
    [Prepared statement of Mr. Colombe appears in appendix.]
    The Chairman. Thank you very much, sir.
    Mr. Colombe. Thank you.
    The Chairman. Chairman Hillaire.

     STATEMENT OF DARRELL HILLAIRE, CHAIRMAN, LUMMI NATION

    Mr. Hillaire. Chairman McCain, Vice Chairman Dorgan, it is 
an honor to be here. My name is Darrell Hillaire, the chairman 
for the Lummi Nation.
    We have been working in cooperation with the California 
Tribal Trust Reform Consortium, Big Lagoon, Cabazon, Hoopa, 
Karuk, Quilliville Rancheria, Redding Rancheria, Yarok. We have 
also been working with Rocky Boy Reservation of Chippewa Cree, 
ATNI organization, most notably Colville Nation.
    Today, we have drafted and are submitting for consideration 
proposed legislative language that addresses our concerns 
regarding the national conflicts associated with trust reform 
and settlement of the Cobell litigation.
    Riding on both issues is the Office of Special Trustee and 
its failure to limit its activities and scope of work within 
the boundaries set by the 1994 American Indian Trust Fund 
Management reform. The terminationist and paternalistic 
insensitivity that the OST has displayed toward the impacted 
tribes and the damages caused by prior mismanagement of trust 
funds and assets have polarized Indian tribes and leadership 
nationwide. The topic of OST consultation with Indian tribes 
has become a farce that Indian country does not take kindly to.
    Our draft language can be divided up into five synoptic 
topics. The first is the Consortium tribes' concerns that the 
legislation includes protection of treaty rights and self-
determination. The second is the recommendation to create a 
deputy secretary for Indian affairs that will replace any 
counterpart duties and functions assigned to an assistant 
secretary or the Office of Special Trustee, and that the 
funding and resources that were temporarily placed under the 
OST will be completely transferred to said deputy secretary.
    The third concern is that Indian tribes should be provided 
every right and opportunity to fully assume the functions of 
trust fund and asset management, along with the financial 
resources essential to accomplish the tasks. The fourth concern 
was the idea of a commission to provide advisory services to 
the deputy secretary for the purposes of assessing the 
fiduciary and management responsibilities of the Federal 
Government with respect to Indian tribes and individual Indian 
beneficiaries. Although this recommendation has surfaced 
before, our Consortium is concerned that it will simply become 
a commission to circumvent the concerns of the tribes and its 
beneficiaries.
    The fifth issue is associated with the call for mandatory 
mediation of the Cobell litigation. It is sometimes too easy 
for parties that are not plaintiffs to the litigation to 
recommend settlement when the impacts are not directly felt by 
their tribes or their individual membership. However, the 
Consortium at least believes that the subject could be 
submitted for consideration during the hearings. It recommends 
that major plaintiffs and their lawyers are given agenda time 
during the hearing process.
    The most common theme that unites Consortium tribes 
together is the principles of Indian self-determination and 
self-governance. The individual Indian money accounts are trust 
funds that were created as a result of the enactment of the 
General Allotment Act. The Indian lands were divided. The trust 
patterns were created, and the BIA assumed control over the 
estates of all incompetent or non-competent Indians. This even 
included control of tribal trust funds. The Allotment Act 
nearly completely destroyed Indian tribal governance. It did 
destroy tribal reservation economies and impoverished the 
Indian people.
    Since then, the Indian Reorganization Act of 1934 and the 
Indian Self-Determination and Education Assistance Act of 1975 
have been enacted. Then, the latter was amended to provide 
tribes with the opportunity to become self-governing as a 
matter of Federal Indian law. Indian tribal leadership was 
aware that the trust system has been a failure since it began. 
The tribes have always suffered as the wards and the guardian 
has always failed to protect the interests of Indians.
    This failure was why the War Department transferred Indian 
Affairs to the Department of the Interior in 1848. This 
continuing failure is why President Grant in 1872 placed church 
leadership in control of Indian reservations. This is why the 
U.S. Congress has held hearings in the 1870's as to the extent 
of the BIA mismanagement that then resulted in modification of 
the laws that governed legal contracts with Indians. The Cobell 
case is litigation that was simply forming over 100 years ago.
    Throughout this, Indian lands and inheritance have been 
destroyed beyond recovery due to the fractionated ownership 
problems instituted by the Federal BIA mismanagement of Indian 
affairs. The Indian Land Consolidation Act must be fully funded 
by Congress in order to reverse the damages done to Indian land 
titles. Major appropriations should be earmarked specifically 
for the use of the tribes to clear land titles. Clear titles 
are essential to Indian housing development, as well as tribal 
governance and economic development projects.
    This is a concern of self-governance tribes in the 
Consortium. The Consortium tribes want every opportunity to 
develop a tribally based trust fund and asset management system 
that will guarantee the protection of the rights and benefits 
to both the tribes and individual beneficiaries at the local 
level. The standard of the DOI BIA thus far has been 
mismanagement and failure. Indian tribes should not have to 
confront OST or other similar types of officials that work to 
squash tribal efforts to develop honest, fair and equitable 
trust fund and asset management systems.
    In addition, there is inadequate attention paid to the 
difference between the individual trust and the collective 
trust owed to Indian people. The individual trust is associated 
with BIA management of trust assets created by the General 
Allotment Act. Then, there is the sacred trust of civilization 
that is tied to the government-to-government relationship the 
tribes have with the United States. Under the latter, the 
Indian tribes are concerned about assuring that they are given 
access to rights, services and benefits provided to other 
population segments of the United States by the other Federal 
departments and agencies.
    The trust concept has been abused. In history, it was 
always the BIA and only the BIA that serviced Indian tribes and 
Indian people. Indian tribes have treaty relationships with the 
whole United States, and not just the BIA. Trust reform is more 
than simply undoing the damages caused to individual Indian 
money accounts beneficiaries. It is more about providing Indian 
people and Indian tribes the opportunity to really exercise 
Indian self-determination and self-governance. This will take 
the cooperation of the whole United States. It will require 
reestablishment of the government-to-government relationship 
between the Indian tribes and the United States as founded upon 
the U.S. Constitution.
    [Prepared statement of Mr. Hillaire appears in appendix.]
    The Chairman. Thank you very much, sir.
    You are obviously not Ms. Cobell.
    Mr. Harper. I am not, Mr. Chairman. [Laughter.]
    My name is Keith Harper from the Native Americans Rights 
Fund. I am one of Ms. Cobell's attorneys.
    The Chairman. Thank you. For the recorders, repeat one more 
time.
    Mr. Harper. Okay. Keith Harper.
    The Chairman. Thank you very much. Please proceed.

     STATEMENT OF KEITH HARPER, NATIVE AMERICAN RIGHTS FUND

    Mr. Harper. Thank you, Mr. Chairman and good morning to you 
as well, Vice Chairman Dorgan. Ms. Cobell could not make it 
here today, but she did provide written remarks that we would 
like to make part of the record.
    [Prepared statement of Ms. Cobell appears in appendix.]
    Mr. Harper. We want to thank you for providing this 
opportunity to give oral and written testimony. On behalf of 
Ms. Cobell, I want to express our gratitude for your continuing 
leadership in ameliorating the continuing mismanagement of 
Indian trust assets and the commitment to explore a prompt and 
fair resolution of the Cobell case.
    Our views are detailed in Ms. Cobell's testimony, but I do 
want to touch upon a couple of points. Mr. Chairman, you have 
called the mismanagement of Indian trust assets criminal. And 
it is, in every sense of the word. It is a national disgrace. 
If this abuse occurred to any other Americans other than 
Indians, this situation would have been addressed with finality 
years ago.
    Think of it this way. The Congress is presently considering 
various ways to address the future of Social Security. What if 
someone proposed to abandon present management of Social 
Security and instead have it managed by the Department of the 
Interior in the manner they manage our assets? Knowing what we 
know about Interior's management, how many Americans would 
support that proposal? Not many, I imagine.
    If it is unacceptable for other Americans, why is it okay 
for the first Americans? After all, in a very real sense, these 
assets are our property and our financial security, and the 
financial lifeblood of our communities.
    We would like to be absolutely clear on one point. We want 
to resolve this case. We brought the case not for any other 
purpose but to seek redress for these identifiable abuses that 
are occurring to many Indians out there as has been documented 
time and time again in hearing after hearing going back 
generations.
    We have put a quote from a report from 1915 for the 
Congress of the United States that identified fraud, corruption 
and institutional incompetence almost beyond the possibility of 
comprehension, 1915. Those same conditions still exist today.
    There has been talk about the advances in trust reform by 
the Department officials. We still have fundamental problems. 
Let me raise a couple. Collections are largely done on the 
honor system. Think about that, for a trust, for a fiduciary, 
there is inaccurate ownership information that controls who 
gets paid what moneys still today.
    There is no fair market value for leasing. To give you an 
example developed in our case, the special master did a report. 
He showed on the Navajo Reservation for allotees for rights-of-
way going across their land, they get about $9 to $40 a rod, 
the standard measurement for a right-of-way. For a non-Indian, 
living right off the reservation, you get no less than about 
$140 a rod and you probably get more than $590 a rod. Think 
about that difference, 20-, 30-, 40-fold difference. Now, that 
is a pretty serious Indian discount and that kind of stuff is 
not being addressed. So I am not sure what they are talking 
about when they are talking about these reform efforts, but the 
fundamental problems are not being addressed.
    There is still no accounts receivable system. Mr. Chairman, 
we think that trust reform is an integral part to resolution of 
the Cobell case, along with historical accounting. I did not 
intend to talk about historical accounting, but I know that 
there were questions asked and there was some testimony from 
the government officials, so I will just say a couple of 
things, because I understand the concern about spending a lot 
of money, $6 billion to $14 billion, any money, to provide 
something to provide the accounting.
    We do not believe that one red cent should be spent on 
performing this accounting because it simply cannot be done. It 
is absolutely futile. The government admitted that in 1997, but 
now because of their litigation positioning, they do not want 
to admit it today. Why? Because if they admit that it is 
impossible, they admit it is impossible, then we will have to 
go with an alternative method that they know will mean high 
liability for them. But if they cannot do the accounting, then 
we have to look at alternatives that are consistent with trust 
law. So we do not want to spend that money. We say spend that 
money on building schools and all the other desperate needs out 
in Indian country, not for futile accounting.
    The other point is this, the court did reenter the 
structural injunction, but based largely on the fact that the 
government said they could do the accounting. If they cannot do 
the accounting required by law, then we should move on and they 
should admit as much.
    They also have the alternative of getting out of that 
accounting by going to the court and asking the court to change 
its order. They have not done that. They said they have 
appealed and we will see where that goes.
    I do want to mention a couple of points that are described 
in detail in our written testimony. We take a commonsense 
approach to trust reform. We ask this question: How is this 
trust different from all other trusts? There are simple 
answers. There are three critical components that are missing 
from this trust. I appreciate the leadership of Tex Hall on 
this issue, and he said what they are.
    One, you do not have clear standards and you do not have 
standards that are applicable and easily discernible that they 
apply to this trust. In every other trust in this country, 
every single one, you have clear standards.
    Second, those clear standards are enforceable in a court of 
law. It is clear that they are enforceable. You do not have to 
argue about jurisdiction. You do not have to argue that you are 
in the Court of Federal Claims or the Federal District Court. 
They are simply enforceable.
    If you do not have clear standards. If you do not have 
enforceability, and third, you do not have an independent 
oversight with real authority, then you do not have the three 
components that make sure that every other trust in this 
country is run properly.
    We think that these three elements form an essential 
foundation for proper trust management. These proposals are 
detailed in our testimony. All I would like to say is that we 
appreciate the leadership of Chief Gray, Tex Hall and the other 
tribal leaders, and we will work closely with them to get a 
single proposal to resolving the Cobell case, addressing these 
foundational concerns and attempting to ameliorate trust 
management, because we do not want that fraud, corruption and 
institutional incompetence that existed in 1915 to 2015, and we 
want to work with this committee to ensure that it is not so.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    If you do not require an accounting, what is the 
alternative?
    Mr. Harper. We propose one alternative in our January 6, 
2003 plan. What that requires is that the Government and us 
actually agree on an essential point, that within a certain 
given time period, approximately, we differ slightly but 
approximately $13 billion was generated from this trust. That 
is not counting interest, but the point is this, if you take 
that $13 billion and you figure out how much of that money 
actually reached the correct beneficiary, the difference is 
what is owed.
    The Chairman. How do you figure that out?
    Mr. Harper. Well, you have to look at certain transactions. 
They can, for example, produce any disbursement records that 
actually show cancelled checks.
    The Chairman. But they do not have the records.
    Mr. Harper. They do not have the records on a lot of 
things, and to the extent that they do not, then you have to 
use whatever alternative methods are available.
    The Chairman. I go back to my original question. What is 
the alternative?
    Mr. Harper. The trust law answer is this. The trust law 
answer is that if you cannot show it, you owe it. And if the 
Government cannot show that it paid out to a specific 
beneficiary, then to that beneficiary it owes the money that it 
said it paid out but never did.
    The Chairman. And if you went to that alternative, have you 
got an estimate of how much that would cost?
    Mr. Harper. That alternative would mean the $13 billion 
plus interest, minus any kind of disbursement that they show. 
We do not know what the disbursements that they can show are.
    The Chairman. The interest starting to accrue when?
    Mr. Harper. When the moneys were deposited.
    The Chairman. So we would be talking about the late 1800's, 
early 1900's?
    Mr. Harper. That is correct.
    The Chairman. We must be talking about $100 billion.
    Mr. Harper. Over $100 billion is they cannot show specific 
transactions. That is what trust law provides. What the 
Government's alternative is, Mr. Chairman, is to say let's 
change that. Let's change the normal way we figure out these 
problems and find that there is a lesser duty.
    The Chairman. I think they are saying that, Mr. Harper, 
because nobody knows where we are going to come up with $100 
billion.
    Mr. Harper. I understand that, and that is why we have been 
at the mediation table. We are working with this committee and 
others to find a settlement solution. If they cannot do it, 
then let's resolve it by agreeing to a sum certain that is 
fair. We are not saying that no money reached the 
beneficiaries, but they cannot make hardly any demonstration of 
that. Their present accounting plan is essentially absurd. We 
just have to go to something that works, and that does not.
    The Chairman. Thank you.
    Chief Gray, a statement has been made that the, quote, 
``Administration'' has not been communicating or has not been 
listening. Is there anyone more highly regarded than Mr. 
Swimmer? Mr. Swimmer, have you attended a lot of these 
meetings? Go ahead.
    Mr. Gray. Well, specifically in my opinion, I believe that 
what Mr. Swimmer represented the U.S. Government at these 
meetings. To many of these beneficiaries, and specifically in 
the North Dakota region where he did attend the meeting in the 
Three Affiliated Tribes area, that was the first time a 
presidentially appointed official had ever visited the 
reservation to listen to the concerns. I think that was a great 
starting point for actually having the opportunity to look some 
of these beneficiaries right in the eye and explain to them why 
your appraisal did not get done, and why it got moved to OST, 
and then they have to explain what OST is, and then they have 
to explain why it has taken so long.
    I think one of the big problems is that that needed to 
happen, Senator. I really do believe that. I think those 
discussions needed to happen, just for the sheer complexity of 
the work that has been done up here on this very issue, you 
still have to distill it to a point where it is deliverable in 
the sense that people can understand it and have some faith in 
it.
    Part of the problem that I saw was a great disconnect 
because many of the discussions that you have heard today are 
in the abstract, but to the folks back home this could not be 
more real. So what ITMA proposed to do was to continue to hold 
these listening conferences. We may not get complete 
satisfaction out of every meeting, but we know that over time, 
I know Mr. Swimmer can probably attest to this to a degree, 
that the more exposure he got to Indian country, the more he 
was able to really address some of their concerns because he 
was there. I think that was a great starting point.
    You know, as far as I am concerned, no matter if the 
committee decides to take on trust reform legislation or not, 
there is still going to have to be a very important 
communication component to all this to the beneficiaries.
    The Chairman. Chairman Hall, in your testimony you state a 
position that I have many times before: The need for clear 
trust management standards for the Department's trust 
management functions. At the same time, I have heard that the 
imposition of standards without sufficient funding for the 
Department to live up to those standards is a formula for 
further litigation and claims against the Federal Government.
    I guess my question is, is NCAI willing to work with the 
committee and staff and with the Administration to see if in 
the context of comprehensive trust reform, there is some way we 
can find common ground here?
    Mr. Hall. I think so, definitely, Mr. Chairman, because as 
you are looking at a trust fix, we obviously have to have a 
standard for those standards. But there needs to be a time 
period where there can be no litigation as the trust fix is 
being developed with the standards, and that might be two years 
down the road. We do not know. We will not know until this 
thing shakes out.
    So obviously, in Indian country we understand that. In 
establishing that relationship, we do not just want to go back 
the next day if we do a settlement and sue. Instead, we want to 
work with the committee on resolving the standards, whatever 
those standards might be.
    The Chairman. I would just like to mention to the 
witnesses, the main reason why Senator Dorgan and I sought to 
try to achieve some resolution on this issue is that if it is 
left up to the courts, we could be looking at a minimum of 10 
to 15 years before we could possibly get something done. A lot 
of Native Americans are not going to be with us 10 or 15 years 
from now. That is why we want to give this a very, very high 
priority and do the best we can to reach some kind of 
legislative fix or facilitate an agreement without legislation, 
although I am not sure that that is possible.
    We intend to do everything we can to encourage the 
Administration to be forthcoming. This may be probably the most 
difficult issue that I have encountered, not only as far as 
Native American issues are concerned, but in the Congress, and 
I thank all the witnesses for their involvement.
    Senator Dorgan.
    Senator Dorgan. Mr. Chairman, thank you very much. You are 
correct that this is enormously complicated. It probably over 
the many decades involves some criminal activity, substantial 
incompetence, perhaps corruption. When you hear some of the 
stories about the mismanagement, it really I think angers all 
of us. So the question for us now is how do we resolve this and 
how do we create a structure going forward that has some 
credibility?
    Chairman Hall, the National Congress of American Indians 
convened a meeting last week, I understand, to discuss strategy 
for developing a comprehensive resolution of these trust 
issues. What was the outcome of that meeting, in your judgment?
    Mr. Hall. The outcome was we formed a special committee 
that would move quickly and that NCAI would open meetings for 
all tribal leaders and national and regional organizations to 
provide input, because a lot of the answers, we know it is a 
complex issue, but the answers lie within Indian country. I, 
for one, am also an IM account holder and the chairman of a 
tribe, so I have to look out for the tribe's interest and I 
have to look out as an IM account holder and a rancher.
    So a lot of us have those day-to-day activities. We live on 
those 56 million acres of trust land, but we have to talk to 
each other. We have to communicate to know what is best at the 
local level. We just do not see that happening. So the tribes 
at NCAI last week wanted to make sure that we were at the 
table, because as we see the current reorganization, again we 
are not being communicated with and we are spending a lot of 
money at the Federal level, at the congressional level, for a 
plan that really does not address local issues.
    Senator Dorgan. You described your leadership, along with 
Chief Gray's leadership on this issue. Can you tell us what 
that leadership will entail and what activities will be 
involved going forward to try to address this from the 
standpoint of the tribes, as well as the Indian citizens?
    Mr. Hall. NCAI, as you know, Senator Dorgan, comprises 
about 250 tribes. We have area vice presidents for all of the 
12 regions that the BIA has broken out for the United States. 
ITMA, as cochair for Chief Gray, has close to 60 tribes, so 
that is 310 tribes of the 562 tribes. So those two 
organizations by joining forces, we think we will get the 
necessary input from Indian country. Indian country has met 
already with the 2002 task force, so we do not have to reinvent 
the wheel, so to speak. We can pick up the white paper that was 
adopted in 2002. There were many issues we had agreement on, 
standards, oversight commission and accountability for those 
standards.
    And then the legislation that has been done, as I mentioned 
to Senator McCain, who introduced S. 1459. Let's look at the 
trust reform legislation. Let's look at the 2002 task force as 
starting points to go forward and let's see what has taken 
place in reorganization since then, and let's put those 
together.
    Senator Dorgan. Chief Gray.
    Mr. Gray. Yes, Senator; from ITMA's standpoint, we have 
been working on trust reform for a number of years now, and it 
is certainly the number one priority of this organization's 
function. Part of what we have also recognized is that we need 
to work and have relationships with other intertribal 
organizations that have a similar goal in mind, especially 
those Indian organizations that have specific natural resource 
issues that they are gathered around, like the Council of 
Energy Resource Tribes or the Inter-Tribal Timber Council.
    Certain tribal organizations that have a very narrow focus 
are an instrumental part of formulating any kind of overall 
policy that ITMA may present to the committees. Part of what we 
also believe is most important, I think, is that, and I think 
Chairman Hall spoke to this a second ago, and that is that we 
understand that other tribes across the country have specific 
natural resource issues that are specific to their tribe. Our 
tribe, for example, the Osage for example, we have a very 
unique situation among all tribes in Indian country regarding 
our relationship to the IM account holders and the governing 
institutions of the Osage Nation, and our status as a federally 
recognized tribe. Many of the dollar flow through both 
entities' hands, as a tribal government and as individual 
allotment distributions. This makes us a hybrid in Indian 
country. Whether we like it or not, we have one foot squarely 
in the Cobell camp and one foot squarely in the tribal camp.
    These individual kind of instances that occur all across 
Indian country are reflective of these other organizations' 
efforts to try to gather the broadest consensus that there may 
possibly be, but respecting the individual interest of every 
tribe. This is a very difficult line to walk, but this is how 
we are trying to approach it.
    Senator Dorgan. Without substantial leadership from the 
tribes, I do not think this gets resolved. I agree with the 
chairman that it may require legislation ultimately, but 
legislation in my judgment will not successfully occur here 
without substantial leadership at the tribal level on behalf of 
the Indian people. I think you have a significant burden, 
Chairman Hall and Chief Gray. I am pleased that you are 
accepting that burden to try to see if we can find a way to 
bring people together to reach a consensus.
    Chief Colombe, you raised a point in your testimony about 
TSE, TLE, I am sorry. I think, Mr. Chairman, I would suggest 
that we have our staff take a look at the TLE allegations 
raised by Mr. Colombe. If the allegations are as he is 
representing them this morning, I believe it would be 
appropriate to ask the GAO to take a look at that situation. So 
with your permission, I would hope perhaps we could have our 
staff take a look at that specific instance.
    The Chairman. May I mention, maybe we ought to have the GAO 
look at the whole situation and see what their view is of it 
and what the options are. It is pretty big tasking, but we 
might want to do that.
    Senator Dorgan. Yes; I think we should. I do think that the 
specific set of issues with respect to the BIA's management of 
this particular issue, it would probably be instructive for us 
to understand a bit more, but I think we also could use those 
resources to take a broader look as well.
    This has been I think an interesting set of testimony that 
has been offered today. It is a starting point. As I said, in 
order for this to bear some fruit, it is going to require 
substantial leadership on the part of all of you in order for 
us to find a way to develop some consensus.
    It is, in my judgment, a failure on everybody's part if 
nothing happens except we just talk and talk and talk until we 
are all exhausted and we are back in the same position of 
having a historical accounting that is required by a 
transaction-by-transaction analysis, and we spend billions and 
billions of dollars to do that. That would be a horrible 
failure, in my judgment, for everybody, for the American 
taxpayer, and most especially, though, for American Indians and 
the tribes. We really do need to find a way to see if we can 
solve this very complicated issue.
    Mr. Chairman, I want to thank you, and let me thank those 
who have presented testimony today.
    The Chairman. I thank the witnesses.
    This hearing is adjourned.
    [Whereupon, at 11:15 a.m., the committee was adjourned, to 
reconvene at the call of the Chair.]


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                            A P P E N D I X

                              ----------                              


              Additional Material Submitted for the Record

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


   Prepared Statement of Jim Gray, Principal Chief, Osage Nation and 
             President, Intertribal Monitoring Association

    Good morning, my name is Jim Gray, I serve as both the principal 
chief of the Osage Nation and the president of the Intertribal 
Monitoring Association [ITMA]. I appear today to provide testimony in 
my role as ITMA president, but I would be pleased to answer any 
questions the committee may have about the unique trust systems that 
apply to Osage Nation trust resources.
    The ITMA would like to thank Chairman McCain and Vice Chairman 
Dorgan for holding this hearing and for inviting ITMA to participate. 
It is ITMA's understanding that Chairman McCain has made settlement of 
Cobell v. Norton and trust reform one of his highest priorities during 
his tenure as the chairman of this committee. ITMA applauds and thanks 
the chairman for his commitment to seek solutions to this difficult 
subject. ITMA appreciates the opportunity to play a role in this 
process and support this worthy effort.
    There is a widespread view that Congress and both sides of the 
Cobell lawsuit are sufficiently fatigued by this litigation and there 
is some basis for hoping that a settlement can be reached and approved 
by Congress. Based on that belief, there is also hope that the time may 
be ripe to enact comprehensive trust reform legislation during the 
109th Congress.
    If Congress does not enact trust reform legislation, the Department 
may interpret this as a tacit endorsement of its ``To-Be'' trust reform 
effort and the Department's decision to continue to expand the Office 
of Special Trustee [OST]. ITMA can assist the committee with its effort 
to decide whether it wishes to preceed with trust reform legislation or 
allow the field to be occupied by the Department's ongoing efforts.
    ITMA can provide this assistance to Congress because it can draw 
from the collective knowledge of at least 60 individual tribal 
governments that represent the breadth and width of the trust reform 
issues and experience. In addition, ITMA has been a direct participant 
in both inter-tribal efforts to develop trust reform proposals as well 
as recent Federal-tribal efforts to reach a consensus on these matters. 
Finally, and we believe most importantly, ITMA as an organization has 
undertaken an exhaustive effort to go out into Indian country to meet 
with the beneficiaries of the Federal trust obligation. We have and 
continue to gather and analyze this important testimony to guide both 
ITMA's consideration of trust reform and to make this information 
available to Congress.
    Based on this knowledge and experience ITMA would like to make the 
following general observations concerning trust reform. Based on these 
observations this testimony will address the alternatives available to 
Congress.
    First, ITMA believes that Congress should determine the manner and 
direction of trust reform. Only in the absence of Congressional action 
should by the Executive branch lead the way. It is very likely that 
Federal courts will only address discrete issues related to the Federal 
Government's trust obligation bit not the direction or the overall 
character of trust reform. In fact, the recent Court of Appeals 
decision in Cobell recognizes this. Indian tribes certainly prefer a 
future where they work directly with this committee and the House 
Resources Committee to structure meaningful trust reform.
    Second, in light of its trust responsibility to Indians and its 
trust relationship and responsibility to Indian tribes, Congress should 
make every effort to enact trust reform legislation that seeks to hold 
the Federal Government to the highest fiduciary standards applicable to 
a trustee. Any legislation should also be mindful of the Federal 
Government's enlightened policy of tribal self-determination.
    Finally, at least until Congress has successfully enacted effective 
trust reform legislation, Congress should take steps to ensure that IIM 
account holders and tribal governments have a strong voice and some 
affirmative means for monitoring and participating in the Department's 
ongoing reorganization.
    The first question this committee must address is whether it wishes 
to enact trust reform legislation. The ITMA, strongly encourages the 
committee to do so. While the 1994 American Indian Trust Reform Act 
[act] provides some direction, the passage of time has rendered some of 
the act's provisions obsolete. For example, the special trustee was 
originally intended to be a temporary position. There is no indication 
that either that position or the OST bureaucracy is in any way 
temporary. Quite the contrary is true. Tribal leaders fear the BIA's 
demise while the OST flourishes in terms of budget and growth. In our 
listening conferences, we have heard repeated concerns that the OST is 
distant and unresponsive to individual Indian and tribal concerns. The 
question of whether, and if so how, the OST should occupy this large a 
role should be the subject of an informed Congressional decision rather 
than simply the absence of action.
    The growth of the OST and the permanence of the position of special 
trustee is only one of the issues that only Congress can decide.
    ITMA notes that this hearing is by no means Chairman McCain's first 
effort to contribute to the dialog on this topic or the effort to 
achieve meaningful reform of the trust management system. In recent 
years, Senator McCain has introduced several legislative proposals to 
raise issues and to ensure that Congress seriously considered any 
compromise proposals that emerged from the Trust Reform Task Force 
[TRTF] that was formed in 2002. ITMA also notes that each of these 
legislative proposals was a bipartisan effort to bring about trust 
reform.
    ITMA believes that most or all of the essential elements of an 
effective trust reform framework can be gleaned from the following 
sources:
    No. 1. The work of the TRTF;
    No. 2. The bi-partisan legislation I referred to previously; and
    No. 3. By an honest effort, led by this committee and its House 
counterpart, to engage with tribal governments and IIM account holders.
    I would like to briefly address each of these sources.
    The TRTF represented a significant commitment of time and resources 
by tribal leaders. While this process did not result in a consensus 
between the tribal representatives and the Department, it did define a 
number of elements of comprehensive trust reform. More importantly, it 
sharply defined the points of disagreement between Indian country and 
the Department over the extent and nature of trust reform. Some of 
these differences Congress can only resolve. For example, while there 
was a consensus on the idea of establishing a more consolidated line-
of-authority for Indian trust resources, there was no agreement on what 
steps should be taken to ensure that Interior agencies other than BIA 
and OST would be included in this structure. It seems only logical that 
all Department of the Interior employees who are responsible for Indian 
trust resources should be at least presumptively included.
    As I indicated previously, Chairman McCain's legislation from the 
two previous Congresses includes many fundamental and essential 
elements for trust reform. These elements include a strong recognition 
and commitment to self-governance and self-determination. These bills 
also include clear direction to the Department that define the 
Government's obligations as trustee. Many of these directions are the 
most commonsense responsibilities imaginable, such as the need for 
accurate, periodic account balances. If there is any resistance to the 
enactment of these commonsense requirements, this only shows how great 
the need is for this committee to act.
    ITMA has already begun the work of engaging Indian country in a 
serious and important discussion about the direction that trust reform 
must take. This committee has always been the place where such views 
would receive a receptive and supportive audience. I would like to 
provide a summary of some of the emerging issues that have been raised 
in ITMA's seven listening conferences in Oklahoma, North Dakota, 
Oregon, Montana, Wisconsin, and Arizona.
    This is not intended to be an exhaustive listing and we would 
appreciate the opportunity to continue to work with the committee as we 
continue to obtain and analyze this important testimony. These 
observations include the following:
    IIM account holders and allottees are becoming more sophisticated 
and more interested in the management of their trust resources, 
especially land and mineral resources. Yet the BIA still labors under 
an organizational structure and policies and procedures that belong in 
an era where Indian ownership was much more passive. While trust 
beneficiaries do not reject the idea of a trust relationship, they do 
demand that the BIA, especially the local offices, have the staff, 
training, and resources to assist them with identifying their 
interests, providing records, appraisals, and other support services in 
a timely fashion.
    Trust beneficiaries also have the right to demand immediate action 
to prevent the improper, unauthorized use, or exploitation of their 
trust resources, especially trespass.
    There is a widespread belief in Indian country that the BIA needs 
to recognize that it must be accountable to the trust beneficiaries and 
not to the individuals who lease or develop those resources.
    Finally, as trust beneficiaries become more involved in the 
management of their on-reservation assets, they recognize that it is 
wasteful, impractical, and inefficient to hold some of these assets in 
trust status and others in fee. In response, they frequently apply to 
have some assets returned to trust status. But they frequently 
encounter strong resistance, delay and sometimes even opposition from 
the Department.
    Because ITMA funding is derived from the general trust reform line 
item, it is impossible for our organization to make any plans that 
extend beyond the current fiscal year. As a result, ITMA must scramble 
to organize meetings once our funding level is determined. We believe 
that Congress should address this issue by providing a specific line-
item to underwrite ITMA activities. This would also remove the 
temptation to use ITMA's need for Federal support as a method to 
retaliate against ITMA for any constructive criticism it makes about 
trust reform.
    With respect to Indian tribes, ITMA is working directly with its 
member and also non-member Indian tribes that are interested in both 
trust reform and developing a process for resolving tribal claims for 
losses to or mismanagement of trust resources. With respect to the 
resolution of tribal claims, ITMA believes that both Federal and tribal 
interests are served by the creation of a voluntary process ?for 
settling claims. ITMA is working diligently to develop such an 
alternative process, especially for those tribes that do not have the 
resources to commit to initiate or sustain a lawsuit against the 
Federal Government.
    ITMA is also committed to act as a facilitator in inter-tribal 
discussion and through its work with inter-tribal organizations with 
general mandates, like NCAI, as well as those entities that are 
organized around specific resources, such as the Council of Energy 
Resources Tribes and the Intertribal Timber Council. As President Tex 
Hall indicated, part of this effort includes ITMA's willingness to 
serve and participate in a special committee to work with all 
interested and engaged Indian tribes to provide this committee and the 
House Resources Committee with as much direction as possible directly 
from Indian country.
    As a starting point for developing a working relationship with 
Indian tribes and account holders, ITMA strongly encourages the 
Department to identify any known thefts and losses of trust resources, 
proceeds or royalties. There are still instances where one part of the 
Federal Government has prosecuted crimes for such actions, while other 
parts of the Federal Government denies that any theft or losses 
occurred. It is difficult to form a relationship built on trust in such 
a situation. Similarly, as long as the Department is, by its own 
admission, not in compliance with its own trust standards and, 
obligations it is both inappropriate and unseemly for the Department to 
collect administrative fees for its activities. At a minimum a fee 
collection moratorium should be either self-imposed or imposed by 
appropriate Congressional action.
    In the absence of trust reform legislation Congress needs to 
fulfill its trust responsibility to the tribal and individual holders 
of the beneficial title of trust resources by ensuring that strong, 
independent and adequately financed organizations can monitor and 
participate in the Department's trust reform activities. Without such 
oversight, Congress risks the repeated cycle of trust mismanagement and 
reform. ITMA is pleased to be a part of this important effort and with 
the support of this Committee, would like to continue to play this 
role.
    I would like to thank the chairman and vice chairman for their 
dedication to this important, but difficult issue. I would be pleased 
to answer any of the committee's questions.

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