[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
                      PROPOSED SETTLEMENT OF THE
                     COBELL V. SALAZAR LITIGATION

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

                           OVERSIGHT HEARING

                               before the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                       Wednesday, March 10, 2010

                               __________

                           Serial No. 111-46

                               __________

       Printed for the use of the Committee on Natural Resources



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                     COMMITTEE ON NATURAL RESOURCES

              NICK J. RAHALL, II, West Virginia, Chairman
          DOC HASTINGS, Washington, Ranking Republican Member

Dale E. Kildee, Michigan             Don Young, Alaska
Eni F.H. Faleomavaega, American      Elton Gallegly, California
    Samoa                            John J. Duncan, Jr., Tennessee
Frank Pallone, Jr., New Jersey       Jeff Flake, Arizona
Grace F. Napolitano, California      Henry E. Brown, Jr., South 
Rush D. Holt, New Jersey                 Carolina
Raul M. Grijalva, Arizona            Cathy McMorris Rodgers, Washington
Madeleine Z. Bordallo, Guam          Louie Gohmert, Texas
Jim Costa, California                Rob Bishop, Utah
Dan Boren, Oklahoma                  Bill Shuster, Pennsylvania
Gregorio Sablan, Northern Marianas   Doug Lamborn, Colorado
Martin T. Heinrich, New Mexico       Adrian Smith, Nebraska
George Miller, California            Robert J. Wittman, Virginia
Edward J. Markey, Massachusetts      Paul C. Broun, Georgia
Peter A. DeFazio, Oregon             John Fleming, Louisiana
Maurice D. Hinchey, New York         Mike Coffman, Colorado
Donna M. Christensen, Virgin         Jason Chaffetz, Utah
    Islands                          Cynthia M. Lummis, Wyoming
Diana DeGette, Colorado              Tom McClintock, California
Ron Kind, Wisconsin                  Bill Cassidy, Louisiana
Lois Capps, California
Jay Inslee, Washington
Joe Baca, California
Stephanie Herseth Sandlin, South 
    Dakota
John P. Sarbanes, Maryland
Carol Shea-Porter, New Hampshire
Niki Tsongas, Massachusetts
Frank Kratovil, Jr., Maryland
Pedro R. Pierluisi, Puerto Rico
Vacancy

                     James H. Zoia, Chief of Staff
                       Rick Healy, Chief Counsel
                 Todd Young, Republican Chief of Staff
                 Lisa Pittman, Republican Chief Counsel


                                 ------                                

                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Wednesday, March 10, 2010........................     1

Statement of Members:
    Cassidy, Hon. Bill, a Representative in Congress from the 
      State of Louisiana.........................................    28
    Christensen, Hon. Donna M., a Delegate in Congress from the 
      Virgin Islands.............................................     8
    Faleomavaega, Hon. Eni F.H., a Delegate in Congress from 
      American Samoa.............................................     6
    Grijalva, Hon. Raul M., a Representative in Congress from the 
      State of Arizona...........................................     8
    Hastings, Hon. Doc, a Representative in Congress from the 
      State of Washington........................................     3
    Kildee, Hon. Dale, a Representative in Congress from the 
      State of Michigan..........................................     5
        Prepared statement of....................................     5
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................     7
    Rahall, Hon. Nick J., II, a Representative in Congress from 
      the State of West Virginia.................................     1
        Prepared statement of....................................     2

Statement of Witnesses:
    Cobell, Elouise C., Lead Plaintiff in Cobell v. Salazar, 
      Browning, Montana..........................................    50
        Prepared statement of....................................    53
        Class Action Settlement Agreement dated December 7, 2009.    57
        Agreement on Attorneys' Fees, Expenses, and Costs........    57
    Dorris, William E., Managing Partner, Kilpatrick Stockton 
      LLP, Washington, D.C.......................................    61
    Finley, Hon. Michael O., Director, Inter-Tribal Monitoring 
      Association on Indian Trust Funds, Albuquerque, New Mexico.     9
        Prepared statement of....................................    10
    Hayes, Hon. David, Deputy Secretary, U.S. Department of the 
      Interior, Washington, D.C..................................    33
        Prepared statement of....................................    35
    Monette, Richard, Professor of Law,, University of Wisconsin, 
      Madison, Wisconsin.........................................    17
        Prepared statement of....................................    19
    Nunez, Hon. Austin, Chairman, Indian Land Working Group, and 
      Chairman, San Xavier District of the Tohono O'odham Nation, 
      Tucson, Arizona............................................    13
        Prepared statement of....................................    15
        Response to questions submitted for the record...........    16
    Perrelli, Hon. Thomas J., Associate Attorney General, U.S. 
      Department of Justice, Washington, D.C.....................    37
        Prepared statement of....................................    39

Additional materials supplied:
    Rosebud Sioux Tribe, Statement submitted for the record......    63
    Squire, Percy, Percy Squire Co., LLC, Columbus, Ohio, Letter 
      submitted for the record...................................    66
                                     



  OVERSIGHT HEARING ON ``PROPOSED SETTLEMENT OF THE COBELL V. SALAZAR 
                             LITIGATION.''

                              ----------                              


                       Wednesday, March 10, 2010

                     U.S. House of Representatives

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 10:12 a.m. in Room 
1324 Longworth House Office Building, Hon. Nick J. Rahall, II, 
[Chairman of the Committee] presiding.
    Present: Representatives Rahall, Kildee, Faleomavaega, 
Napolitano, Grijalva, Costa, Sablan, Heinrich, Christensen, 
Baca, Herseth Sandlin, Hastings, Smith, Lummis, and Cassidy.

   STATEMENT OF HON. NICK J. RAHALL II, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF WEST VIRGINIA

    The Chairman. The Committee meets today to hear testimony 
on the Proposed Settlement of the Cobell v. Salazar litigation. 
Under the proposed $3.4 billion agreement, $1.5 billion would 
be used to settle historical accounting claims, as well as 
mismanagement claims.
    The remaining $2 billion would be used to address the 
fractionated Indian lands problem. This settlement agreement 
will end almost 14 years of contentious litigation.
    For the first time ever, the parties have come together and 
agreed upon a proposed settlement. I commend the parties for 
overlooking your differences, trying to resolve the issues, and 
put an end to the court battle.
    While I support settlement of this case, some in Indian 
Country have raised questions and concerns. The parties have 
responded to many of these issues, and I praise Elouise Cobell 
for sending wide-reaching, lengthy e-mails answering questions 
that she has received.
    I encourage the Cobell parties to view this hearing as 
another forum in which to educate not only Congress, but also 
Indian Country, on the agreement. Upon acceptance of this 
agreement, a Secretarial Commission on Trust Reform would be 
established by the Interior Department.
    This is a welcome initiative and long overdue, but it will 
only be successful if the tribes are at the table from the 
beginning, and the Department truly listens to what they have 
to say, and the Department must remember one size does not fit 
all.
    I would be remiss if I did not take a moment to reflect on 
what has brought us to this point. Over 100 years of 
mismanagement of Indian trust funds by the United States and 
decades of ignoring the problem.
    I have been here long enough to remember our former 
colleague, Mike Synar from Oklahoma, back in the mid-1980s 
spending five years on a report detailing the breadth and scope 
of the problem.
    That report started the Congressional focus on fixing the 
problem. Since that time, Congress has held numerous hearings, 
passed legislation, and appropriated millions of dollars to 
reform trusts on management, and give Indian trustees greater 
control over their funds.
    Many times I have sat in this room and heard from the 
Interior Department that they had plans for a new, latest, 
greatest computer system that would fix all the problems.
    Do not misunderstand me. I believe those plans were made 
with the best intentions, but the problem remained that moving 
data to any one system could not fix all the problems, and no 
computer system can recreate documents lost decades ago.
    Many people have worked on the reform issue over the years, 
and they have moved on. The one constant through it all has 
been Elouise Cobell. I have nothing but the utmost respect and 
admiration for Elouise. She has not once faltered in her 
mission to mend the system and ensure that future Indian 
allottees benefit from a well managed trust fund process.
    Elouise, we thank you for your tenacity, and all of your 
hard work. The trust fund mismanagement lawsuit has been very 
frustrating to all involved and, at times, tempers overheated. 
Thankfully, we have with us today only persons dedicated to 
bringing this chapter to a close, and willing to do the work 
needed to see that that happens. I look forward to their 
testimony. I recognize the Ranking Member.
    [The prepared statement of Chairman Rahall follows:]

       Statement of The Honorable Nick J. Rahall, II, Chairman, 
                     Committee on Natural Resources

    The Committee meets today to hear testimony on the proposed 
settlement of the Cobell v. Salazar litigation.
    Under the proposed $3.4 billion agreement, $1.4 billion would be 
used to settle historical accounting claims as well as mismanagement 
claims. The remaining $2 billion would be used to address the 
fractionated Indian lands problem.
    This Settlement Agreement will end almost 14 years of contentious 
litigation. For the first time ever, the parties have come together and 
agreed upon a proposed settlement. I commend the parties for 
overlooking their differences, trying to resolve the issues and putting 
an end to the court battle.
    While I support settlement of this case, some in Indian Country 
have raised questions and concerns. The parties have responded to many 
of these issues and I praise Elouise Cobell for sending wide reaching, 
lengthy e-mails answering questions she has received.
    I encourage the Cobell parties to view this hearing as another 
forum in which to educate, not only Congress, but also Indian Country, 
on the agreement.
    Upon acceptance of this agreement, a Secretarial Commission on 
Trust Reform would be established by the Interior Department. This is a 
welcome initiative and long overdue. But it will only be successful if 
the tribes are at the table from the beginning and the Department truly 
listens to what they have to say. And the Department must remember, one 
size does not fit all.
    I would be remiss if I did not take a moment to reflect on what has 
brought us to this point - over 100 years of mismanagement of Indian 
trust funds by the United States and decades of ignoring the problem.
    I have been here long enough to remember our former colleague, Mike 
Synar from Oklahoma, back in the mid 1980s spending five years on a 
report detailing the breadth and scope of the problem. That report 
started the Congressional focus on fixing the problem. Since that time 
Congress has held numerous hearings, passed legislation, and 
appropriated millions of dollars to reform trust fund management and 
give Indian trustees greater control over their funds.
    Many is the time I have sat in this room and heard from the 
Interior Department that they had plans for a new, latest, greatest, 
computer system that would fix all the problems. Do not misunderstand 
me; I believe those plans were made with the best intentions. But the 
problem remained that moving data to any one system could not fix all 
of the problems and no computer system can recreate documents lost 
decades ago.
    Many people have worked on the reform issue over the years, and 
many have moved on. The one constant, through it all, has been Elouise 
Cobell.
    I have nothing but the utmost respect and admiration for Elouise. 
She has not once faltered in her mission to mend the system and ensure 
that future Indian allottees benefit from a well managed trust fund 
process.
    Elouise, we thank you for your tenacity and all of your hard work.
    The trust fund mismanagement and law suit has been very frustrating 
to all involved and at times tempers overheated. Thankfully we have 
with us today only persons dedicated to bringing this chapter to a 
close and willing to do the work needed to see that happens.
    I look forward to the testimony. Thank you.
                                 ______
                                 

 STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF WASHINGTON

    Mr. Hastings. Thank you, Mr. Chairman, and thank you for 
scheduling this meeting on Cobell v. Salazar, the settlement 
agreement. Mr. Chairman, it was on December 7 of last year that 
this settlement was announced, and it was greeted with 
widespread hope across Indian Country that a resolution was at 
hand.
    I, too, am very hopeful that a fair treatment for 
individual Indians is close at hand. This lawsuit, as the 
Chairman has mentioned, has gone on far too long, and it is my 
first priority that individual Indians are treated fairly in 
this matter.
    However, I must admit a degree of concern that the $3.4 
billion settlement that was announced on December 7 had an 
initial expiration date of December 31, only 24 days later.
    That deadline was subsequently extended to February 28, and 
now to April 16. So my concerns are twofold. First, the urgency 
for action by the parties to the settlement, at least thus far, 
has not been open to any transparent action by this Congress.
    We are over three months after the initial settlement, and 
now we are holding our first public hearing, and I commend 
again the Chairman for doing that. But this hearing does come 
only after this Committee was contacted by individual Indians 
and several Indian organizations simply asking for more 
information on what this settlement means.
    It is troubling that affected Indians have felt concern 
that there may be a rush to action before public hearings were 
held so that they may better understand the settlement. My 
second concern has been the astonishing fact that no actual 
bill to implement the settlement has yet been introduced in 
either house. For three months, there have been no legislative 
attempts before either the House or the Senate, and more 
importantly, there is no introduced bill available to be read 
by those who are directly affected by the settlement.
    So deadlines are being imposed on Congress to act with 
uncharacteristic swiftness, and yet there is no introduced bill 
for Congress to even look at, or those interested parties to 
look at.
    This raises the question of when and how this settlement 
agreement is going to be enacted. Will it be handled in an 
open, transparent manner that respects the rights of individual 
Indians to see and understand what is happening, or will it be 
done in a manner that instead puts the emphasis on speed and 
haste.
    On the details of the settlement itself, there are several 
matters that I certainly would like the witnesses to address, 
issues that have been raised by Indians in their correspondence 
with this Committee.
    First, I want to distinguish between the $1.4 billion 
portion of the settlement agreement that resolves the Indian 
historical accounting class action lawsuit, and also 
extinguishes all potential damages claimed, and the $2 billion 
portion that provides funding to existing authorized Department 
of the Interior programs to purchase fractionated lands. Those 
two issues.
    The $1.4 billion will provide a cash payment of $1,000 to 
each Indian account holder. While the class action case was not 
a money claims case, there is clearly merit in settling it by 
paying cash awards and starting with a clean slate.
    The bulk of the $1.4 billion portion, however, will go to 
settling damage claims, which were not litigated in the Cobell 
case. It is my understanding that a key reason behind the need 
for Congressional action on the settlement agreement is this 
matter of damages claimed.
    The District Court has no jurisdiction over them, and 
legislation is needed to create these claims, while 
simultaneously resolving them. I have to admit that this does 
raise a degree of concern that Congress would serve as the 
lawyer, judge, and jury, in unilaterally dispensing with the 
claims of thousands of individual Indians.
    However, the parties to the settlement agreement have 
concluded this is a critical component, and they should weigh 
very heavily in our consideration. I certainly respect that, 
though it is important to ask for information on how this 
affects individual Indians, and whether they are being treated 
fairly in this process.
    And, second, Mr. Chairman, there is the matter of the 
attorney fees. Reports have said that lawyers could be paid 
between $50 million and $100 million. Now that is a very high 
amount of money. I believe it is important to understand what 
specific justification exists for this large payment to the 
lawyers in this case, and whether they are collecting any fees 
from the settlement of damage claims that they did not 
represent.
    Lawyers deserve to be paid fairly for the actual work that 
they perform, but there appears to be no accounting or records 
to back up this high level of fees. Congress should have that 
information, especially as it is my understanding that the fees 
paid to lawyers come from the same pot of money that 
compensates individual Indians.
    When every dollar that goes into the pocket of a lawyer 
comes out of the pocket of an individual Indian, I think it is 
our responsibility as Members of Congress to look at this very 
closely.
    Last, greater clarity would be helpful on the portion of 
the settlement agreement that provides $2 billion for the 
consolidation of fractionated Indian lands. How is this related 
to the settling of claims?
    Was it included at the request of the Plaintiffs or the 
Government? What oversight will be provided to ensure the best 
benefit to taxpayers, individual Indians, and Indian tribes as 
a result of this portion and this part of the settlement.
    In conclusion, I do want to thank you again, Mr. Chairman, 
for holding this hearing. I believe it is an important step and 
opportunity to improve our understanding and the understanding 
of the affected Indians of this settlement agreement. So, with 
that, I thank you, and I yield back my time.
    The Chairman. Do other Members wish recognition? The Chair 
of our Native American Caucus, Mr. Kildee.

STATEMENT OF HON. DALE E. KILDEE, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF MICHIGAN

    Mr. Kildee. Thank you, Mr. Chairman. First of all, I want 
to commend President Obama, Attorney General Holder, and 
Interior Secretary Salazar, for their attention to this matter, 
and their continued efforts to strengthen the relationship 
between the United States and the tribal nations.
    And I want to commend Elouise Cobell. Tenacity is a great 
virtue, and she certainly has exercised that tenacity for 
justice. When you are going to be a seeker after justice, you 
have to pursue your justice and the justice of those with whom 
you are associated.
    She has done a wonderful job in this, and I think sets an 
example for us in the Congress, which has an obligation to 
pursue justice. And let us take an example from her, who would 
not give up, and pursued this relentlessly with a great 
devotion.
    And I think this is one where we have to give our devotion 
to this, and that this is a moral issue, more than just a legal 
issue. It is a moral issue, and we have to do what is morally 
and legally right, and make these things as right as humanly 
possible.
    We know that records have been lost, and this figure has 
been agreed upon, but I hope that when I stand before my tribes 
that I can present as good a case of having done good as 
Elouise Cobell has done. I yield back the balance of my time.
    The Chairman. The Gentleman from American Samoa, Mr. 
Faleomavaega.
    [The prepared statement of Mr. Kildee follows:]

Statement of The Honorable Dale E. Kildee, a Representative in Congress 
                       from the State of Michigan

    Good morning Mr. Chairman, I want to thank you for scheduling this 
hearing today. I first would like to pledge my support for ending the 
14 years of litigation surrounding this case.
    I commend President Obama, Attorney General Holder and Interior 
Secretary Salazar for their attention to this matter and their 
continued efforts to strengthen the relationship between the United 
States and tribal nations.
    As you know, the Cobell case has been in litigation for over 13 
years. Late last year, the parties reached an agreement to settle the 
case for $3.4 billion. But the agreement will not take effect unless 
Congress passes legislation to authorize and fund the Settlement 
Agreement. Legislation is needed to ensure that the court has 
jurisdiction over the terms of the Settlement Agreement and to ensure 
the availability of Judgment Funds to settle the claims.
    The courts in this case have repeatedly found the United States to 
be in violation of its trust responsibilities to Native Americans. The 
Settlement Agreement resolves the claims of those Native Americans and 
also fixes the problems that caused the mismanagement of over three 
hundred thousand trust accounts held by Native Americans.
    This decision will help make amends for the past mismanagement of 
Indian trust funds by the U.S. Government, as well as bring much needed 
resources to address fractionated Indian lands.
    While this is an important step, this is not the end of the fight 
for justice on behalf of Indian trust assets, and I will continue to 
fight to ensure that our tribes are treated in a fair and equitable 
manner.
    I, along with several of my colleagues will be sending a letter to 
House leadership urging them to provide immediate assistance and 
support in passing legislation to approve and fund the Cobell v. 
Salazar Settlement Agreement.
    As you are aware, the settlement agreement originally required 
Congressional approval by Dec 31, 2009, which was extended until 
February 28, 2010. Fortunately the parties have again agreed to extend 
this deadline until April 16, 2010.
    I want to applaud Chairman Rahall with working the Senate Indian 
Affairs Committee to seek a timely conclusion to this pending 
litigation. I urge my colleagues to support a timely resolution to this 
litigation. I look forward to hearing from the witnesses today. Thank 
you.
                                 ______
                                 

STATEMENT OF HON. ENI F.H. FALEOMAVAEGA, A DELEGATE IN CONGRESS 
                      FROM AMERICAN SAMOA

    Mr. Faleomavaega. Thank you, Mr. Chairman. As a Member of 
our American Indian Congressional Caucus, I do thank the 
Gentleman from Michigan, and also our colleague from Oklahoma, 
Mr. Cole, as Co-Chairmen of our Congressional Caucus for 
American Indians.
    And I do want to thank you and Mr. Hastings for what I 
thought were pretty comprehensive statements in terms of the 
situation that we are now in. The only concern that I have, Mr. 
Chairman, is that 384,000 accounts involving some 250 Indian 
tribes, 100 years of mismanagement, that we can only come up 
with $3.5 billion.
    Something is missing here, Mr. Chairman, I submit, and I 
think that this is one reason why we had the courageous efforts 
by Ms. Elouise Cobell, because not only the Congress was not 
able to resolve the thing. It seemed like getting this $3.5 
billion is like pulling teeth.
    Oh, but we can spend $900 billion in fighting the war in 
Iraq, and the five million Native Americans, and all of the men 
and women who serve in the Armed Forces, and who bleed and die 
for our country, I just want to say that something is amiss 
here, Mr. Chairman.
    And I really honestly believe that $3.5 billion is a 
pittance, and I think that likely what Mr. Hastings was saying 
that paying our attorneys $50 million to $100 million, there is 
something wrong with that, too.
    I do want to associate myself with the comments that Mr. 
Hastings has made. The concerns about how we are proceeding 
with this effort, this so-called settling of these hundred 
years of mismanagement.
    The fact that there were even efforts of reorganizing the 
Bureau of Indian Affairs, nothing has come about in that, on 
that situation. But I do want to say that I do have some very 
serious questions about how we come up with a figure of $3.5 
billion. I felt at least it should have been $9 billion to $10 
billion, and even that was very difficult to ascertain.
    And supposedly we had given every opportunity to the 
Department of the Interior to come up with the numbers, come up 
with the figures, and if they couldn't, then there has got to 
be a better way of calculating exactly what was lost, what was 
stolen, or in terms of the mismanagement on the part of our 
government to be the trustees of the resources that were 
rightfully owned by the Indian tribes.
    Again, I do want to thank you, Mr. Chairman, for calling 
this hearing. I hope that it won't be the last, and there will 
be more in the coming weeks and months, and let us just look 
into it a little more and a little deeper.
    And, I, too, want to say how much utmost respect I have for 
Elouise Cobell for her courage, for her commitment, not only on 
her own behalf, but certainly among all the Indian tribes that 
were affected by the bottom line mismanagement by the Bureau of 
Indian Affairs, and the accounts of our Native American people.
    This is just a real sad commentary. I don't know if I 
should stand up and say hooray for $3.5 billion, or I should 
say that something is wrong here. I think our Indian Americans 
deserve a lot more than this, and I thank you, Mr. Chairman.
    The Chairman. Are there other Members who wish to make 
opening comments? The gentlelady from California.

    STATEMENT OF HON. GRACE NAPOLITANO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Napolitano. Thank you, Chairman Rahall, for the 
hearing. I have sat through these Committee hearings in this 
room for almost 12 years, a little over 12 years, and listening 
to many of the things through the years, it is very apparent 
that we have not paid--and as the comments by Mr. Faleomavaega, 
and my colleague, Mr. Kildee, there is a lot missing, and 
somehow we are not focused on being able to rectify the wrongs 
that have been done to the Native Americans for decades.
    In my Subcommittee on Water and Power, we continue to honor 
the tribes water claims. I think there is a lot of work to be 
done, and I thank the Administration for trying to get moving.
    I just feel that somehow we feel frustrated that we may not 
be moving fast enough, or wide enough, to be able to understand 
that if we help our Native American Tribes that they can take 
care of their own.
    They will be able to succeed in the economy by educating 
their children, and being able to do all the things that we 
have not kept them from, but not helped them. We have taken 
from, but not helped them.
    So not even to see that there has been a benefit settlement 
to reimburse families and communities is really a travesty upon 
our own people, because Native Americans are our first 
Americans.
    We need to bring this to a closure and whatever we can do 
to help, Mr. Chairman, we are ready to do so, and thank you so 
very much for this hearing.
    The Chairman. I thank the gentlelady. The gentleman from 
Arizona, Mr. Grijalva.

    STATEMENT OF HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Grijalva. I want to thank you, Mr. Chairman, and thank 
you for the hearing. Let me briefly just associate myself with 
the comments that Mr. Kildee made, and also take the privilege 
and the opportunity to welcome my good friend, Austin Nunez, 
from back home.
    Welcome, and again, thank you for the hearing. It is 
important, and the sooner that we move, the sooner we can begin 
the resolution to this issue that has been around too long. 
Thank you, sir.
    The Chairman. Any other comments? Opening statements? The 
gentlelady from the Virgin Islands, Dr. Christensen.

STATEMENT OF HON. DONNA M. CHRISTENSEN, A DELEGATE IN CONGRESS 
                    FROM THE VIRGIN ISLANDS

    Mrs. Christensen. Just briefly, Mr. Chairman. I want to 
thank you for holding this hearing, and I have been here for 14 
years. I remember my first joint hearing over at the Senate on 
this issue, and being left to chair what was a very, very 
difficult hearing.
    But I am just glad that we are coming close to ending an 
injustice that has existed for far too long. There is still 
much work to be done, but I want to take this opportunity to 
also applaud Ms. Cobell, and those who supported her, and look 
forward to the testimony of our witnesses this morning.
    The Chairman. OK. If there are no further opening 
statements, we will now recognize--well, before I recognize the 
witnesses, I would like to note that our longtime staff 
director in the Office of Indian Affairs, Marie Howard, is 
retiring at the end of this month.
    This will be the last hearing that she will staff. There 
she is. And for almost 30 years now, Marie has worked on this 
Committee, fighting for Indian Country, and on behalf of all of 
us on the Committee, the Members on the Committee want to 
express our appreciation to Marie, both professionally and 
personally, for her dedication, and her professionalism, and 
the manner in which she has so well conducted herself over 
these 30 years.
    So, Marie, congratulations to you, and we want to wish you 
the best as you continue to work for Indian Country.
    [Applause.]
    Mr. Faleomavaega. Will the Chairman yield?
    The Chairman. Yes, gladly.
    Mr. Faleomavaega. I might also add the fact that just about 
every major piece of legislation affecting our Native American 
community has Marie Howard's signature on it. I also want to 
commend her and thank her for a tremendous service that she has 
given on behalf of our Native American community throughout the 
country. Marie, you deserve every bit of it. Thank you.
    The Chairman. OK. Our first panel is composed of the 
following individuals: The Honorable Michael Finley, the 
President of the Inter-Tribal Monitoring Association on Indian 
Trust Funds, from Albuquerque, New Mexico; The Honorable Justin 
Nunez, Chairman, Indian Land Working Group, Tucson Arizona; and 
Professor Richard Monette, the University of Wisconsin, 
Madison, Wisconsin.
    Gentlemen, we welcome you to the Committee on Natural 
Resources today. We do have your prepared testimony. It will be 
made part of the record as if actually read, and you are 
encouraged to summarize within the five-minute time frame. And 
do you want to go in the order that I introduced you? Mr. 
Finley then.

   STATEMENT OF HON. MICHAEL FINLEY, PRESIDENT, INTERTRIBAL 
MONITORING ASSOCIATION ON INDIAN TRUST FUNDS, ALBUQUERQUE, NEW 
                             MEXICO

    Mr. Finley. Good morning, Chairman Rahall, and Ranking 
Member Doc Hastings, and Members of the Committee, my name is 
Michael Finley, and I serve as Chairman to the Board of 
Directors of the Intertribal Monitoring Association on Indian 
Trust Funds.
    However, I am also Chairman of my own tribe, the 
Confederated Tribes of the Colville Reservation, Northeast 
Washington State. I appreciate the opportunity to be here today 
to present ITMA's views regarding the proposed settlement of 
the Cobell litigation.
    The Committee has my prepared statement, and I would like 
to take the opportunity to highlight a few of those areas. 
Since the onset, ITMA has long supported an honorable and just 
settlement of the Cobell litigation. However, as the Chairman 
has pointed out, we are talking about a hundred years of 
history here.
    It is an emotional issue for many of the Indian 
beneficiaries, and they have many questions. I have heard 
various questions from people across Indian Country, as well as 
my own constituents.
    They want to know what this settlement means to them. They 
want to know how it is going to impact them. However, I don't 
always have the answers to their questions. They want to know 
why is it only recently the mismanagement claims were included 
when all along they were told that they were not, and I believe 
that question was raised a little bit ago.
    So being their tribal leader, they want me to have answers 
to these questions, and I always haven't had the answers to 
those questions. I know that ITMA, as an organization that 
deals with these issues, has been fielding many questions from 
Indian Country, as well as tribal leaders.
    I have heard from various tribal leaders as well who have 
been hearing many of the same questions. Indian beneficiaries 
that are impacted by this just want transparency. They question 
why the haste, and I think that it is a legitimate question 
that needs to be answered, but more importantly, their 
questions need to be answered before this is considered.
    So as a result of that, ITMA may organize the first 
national outreach meeting on a settlement in Las Vegas on 
February 24th. Elouise's attorneys were on-hand, and ITMA and 
the consultants were on-hand. Various tribal leaders and Indian 
beneficiaries across the Nation were on-hand.
    Many questions were asked, and many were answered. However, 
a lot of the issues were not clarified, and questions remain. 
In attempts to address some of those questions and answers, 
ITMA has offered suggestions that is in the written testimony 
that is before you today.
    And I feel though what I would like to highlight is that we 
are asking the Plaintiffs and the Government consider setting 
aside a portion of the settlement fund to provide an option for 
mismanagement claims to be resolved administratively.
    We want to target those people who fall through the cracks, 
and I think if this is considered as we move forward, it would 
give an opportunity for many of those people to have a voice.
    A lot of the Indian beneficiaries that I have talked to, 
they just want their story to be here. Because of the long 
history, many of these people were reared on the very same 
lands that are now included on this Class II action that is 
within the settlement terms.
    So they have an emotional tie to the property. A lot of 
time this property is passed on from one generation to the 
next, and include important cultural areas to the Indian 
beneficiaries.
    There is a long history of mismanagement, and in some cases 
outright capricious activities conducted by the Bureau, and 
many of these individuals just want their story to be heard, 
and they want to see a resolution to the wrongs that were done 
to them in the past, but they want that to happen in the right 
way.
    We also would like the Department to consult with the 
tribal governments on how the $2 billion land consolidation 
fund will be implemented and spent. All too often in the past, 
I think you would see that this was done with the input of the 
tribes.
    The tribes deserve to have a voice in this process. They 
need to be consulted on this. I think the tribes should have a 
better understanding of what those priorities would be other 
than some other group that is based out of D.C.
    We are on the ground working with the land, and we know the 
land, and we know what our priorities are. We want to be given 
that opportunity to decide what those priorities would be if 
this moves forward and the money is allocated in that program.
    We also would like the parties to conduct in person 
outreach to the Indian beneficiaries throughout Indian Country, 
because as I stated, it is an emotional issue. People want to 
be heard. They want their questions answered.
    So I would ask that the parties conduct that as we move 
forward. In conclusion, I would like to thank you for this 
opportunity to testify today. ITMA is grateful for the 
Administration's commitment to ending the Cobell litigation, in 
hopes that this commitment also extends to resolving the scores 
of pending tribal lawsuits and forward looking trust reform. At 
this time, I stand ready for any questions that the Committee 
may have.
    [The prepared statement of Mr. Finley follows:]

 Statement of The Honorable Michael O. Finley, Director, on Behalf of 
     the Inter-Tribal Monitoring Association on Indian Trust Funds

    Good morning Chairman Rahall, Ranking Member Hastings, and members 
of the Committee. My name is Michael Finley and I am the Chairman of 
the Board of Directors of the Inter-Tribal Monitoring Association on 
Indian Trust Funds (ITMA), and will be testifying today in that 
capacity. I am also the Chairman of my own tribe, the Confederated 
Tribes of the Colville Reservation. I appreciate the opportunity to be 
here today to discuss ITMA's views regarding the proposed settlement of 
the Cobell v. Salazar litigation.
    ITMA is an organization presently comprised of 65 federally 
recognized tribes from all Regions of the country, including Alaska. 
For twenty years, we have been actively involved in monitoring the 
activities of the government in the administration of Indian trust 
funds and in the larger trust reform efforts that have grown out of the 
American Indian Trust Fund Management Reform Act of 1994. In 1993, ITMA 
provided the first draft of that Act to Congress and was at the 
forefront of securing the passage of that Act into law. This law is the 
statutory basis for the Cobell lawsuit.
    While ITMA has not endorsed every measure taken by the government 
in the name of trust reform during this period, significant progress 
has been made in the administration of trust funds and trust assets. 
The daily deposit of receipts through a nation-wide lockbox arrangement 
with a commercial bank, the immediate access to Individual Indian Money 
(IIM) accounts through a debit card issued by a major bank, and the 
latest annual audit that reveals no material weaknesses in the 
accounting systems are all major improvements that virtually no one 
would have believed possible when the 1994 Act was being considered by 
Congress.
    On the other hand, significant issues do remain unresolved, and the 
organization continues to work with and to monitor the government's 
progress on other significant trust reform initiatives. Serious 
problems continue to remain in the overall administration and 
management of the Indian trust. Examples include the process by which 
the Department provides appraisals for Indian property, issues related 
to estate planning and will writing assistance to Indian beneficiaries, 
and the unreliability of land records. ITMA continues to work with the 
government and Indian beneficiaries to improve upon these and other 
problem areas.
    ITMA has long supported an honorable and just settlement of the 
Cobell litigation and has provided input and assistance to the 
Committees of jurisdiction in previous settlement efforts. The Cobell 
litigation has consumed enormous resources and attention from both our 
trustee agencies of government and from tribal leaders over the last 
fourteen years. It is fair to say that this lawsuit has deeply affected 
the nature and tone of the tribes' relationship with the government. We 
were particularly pleased when we heard during the last Presidential 
campaign that then-Senator Obama would make settlement of this case a 
priority if became our President. In addition, more than 100 tribes 
have lawsuits pending against the government relating to trust 
administration. ITMA hopes that the proposed Cobell settlement reflects 
a new attitude within the government to actively seek an honorable 
resolution of those cases as well.
    After the proposed settlement was unveiled and individuals had a 
chance to begin reviewing it, ITMA began to field questions from both 
tribal leaders and individual Indians about the settlement and what it 
means for them. In many cases, after being provided with a general 
explanation of the settlement, the tribal leaders and individuals 
making the inquiries raised additional questions and, in many cases, 
concerns about the settlement and its potential effects should it be 
ratified by Congress and approved by the Court in its current form.
    Most questions that ITMA has received revolve around the inclusion 
of Indian trust mismanagement claims in the settlement agreement. 
Unlike an accounting, these claims involve the actions, or inaction, of 
the government in managing Indian trust land, such as ensuring fair 
market value in approving leases or ensuring that timber is not 
overharvested so as to damage the landscape. The inclusion of this new 
and broad category of claims has been a source of confusion and concern 
because land owners have been told for more than ten years those claims 
are not involved in the litigation. In fact, if the court had 
jurisdiction over these claims, the parties would not be asking 
Congress to grant jurisdiction to the court to enter judgment on this 
proposed settlement. Many people are questioning why this case must be 
greatly expanded in order to settle it. Generally speaking, Indian 
landowners will have these claims extinguished in exchange for a base 
payment of $500, with the possibility that that amount might increase 
based on a formula. The settlement agreement allows the individuals 
within this class to opt out.
    Other questions posed to ITMA involve the implementation of the $2 
billion Trust Land Consolidation Fund and the extent, if any, of tribal 
input in how those dollars will be spent. We have also received many 
questions relating to attorney's fees and incentive payments to the 
class representatives. The underlying concern of all of these questions 
is the overriding issue of the impact of the proposed settlement on the 
United States' trust responsibility.
    The original deadline for Congress to act to approve the 
settlement's implementing legislation was December 31, 2009, at 11:59 
pm, just more than three weeks from the time the settlement was 
disclosed. No one understood the reason for the very short timeframe 
and it made people very wary of what was actually being proposed.
    In response to these and other questions, ITMA organized a national 
meeting on February 24, 2010 in Las Vegas, Nevada, to provide a forum 
for tribal leaders and Indian landowners to hear a detailed walk-
through of the settlement agreement and have an opportunity to ask 
questions. Significantly, this was the first outreach meeting of any 
kind that we are aware of regarding the settlement. ITMA is very 
grateful for the participation of all of those who attended, including 
counsel for the plaintiffs, and is hopeful that this meeting will be 
the catalyst for future and extended outreach.
    I cannot emphasize enough how emotional of an issue land and the 
government's trust responsibility are to Indian people and the 
heightened emotion that comes when those are affected in some way, as 
they would be in the proposed settlement. Although the Cobell case has 
been a class action, it goes without saying that to Indian people the 
case is much different than a standard class action involving a 
household appliance. There is a strong cultural connection to Indian 
land and for many, to the trust revenue they may receive as trust 
landowners, even if only a few pennies per year. For active landowners 
living in their respective tribal communities, wrongs for which the 
government is responsible from decades past that resulted in damage to 
their land or their families' land weigh heavily on their minds.
    Many know that their rights will be affected by the settlement but 
very few have fully read and understand the settlement documents. Many 
have no electricity in their homes and limited access in their 
communities, so for them to be told to refer to 
www.cobellsettlement.com for answers is clearly not possible. Up until 
the announcement of the settlement, they had been told or understood 
that any issues arising from their trust lands and resources were not 
any part of the Cobell case. Now that they learn that these claims will 
be presumptively extinguished unless they are prepared to make a 
decision, it creates unease and concern. If they do not make the 
correct decision, something might be forever lost. For some, it means 
that they will have to hire a lawyer that they may not be able to 
afford.
    With respect to tribal government involvement, there are parts that 
directly affect tribes and they have not been consulted or even advised 
by the parties that their interests are being brought into this law 
suit. For example, the land consolidation program will be overlain in 
many cases on similar tribal programs. In the past, the Bureau of 
Indian Affairs (BIA) program has sometimes competed directly with 
tribal land consolidation programs. If a competing program is funded 
with $2 billion, tribal land consolidation and land restoration efforts 
may be severely hampered rather than enhanced. In addition, ITMA is 
advised that Alaska tribes are prohibited entirely from participating 
in the BIA Indian Land Consolidation program. These are just two 
examples where ITMA thinks this proposal could benefit from more 
deliberation.
    ITMA appreciates the complexities associated with creating a rough 
justice settlement formula and understands that no settlement is 
perfect for everyone. Many people have raised questions, however, 
regarding the relationship between the proposed payment and the 
underlying claims that will be extinguished. For example, the formula 
for payments to Indian beneficiaries in the trust administration class 
beyond the $500 base amount for asset mismanagement claims appears to 
have little relation to what actual claims they might possess or to 
damage to their land. They will be paid under a formula that is based 
on the dollar amounts that went through their accounts, not on what 
losses they might have suffered. In other words, those who lost the 
most may actually receive the least and those who received the most may 
be paid even more. The most highly paid of all would very likely be 
those who have sold their trust lands altogether.
    With respect to attorney's fees and costs, ITMA strongly believes 
that these payments should come from the Equal Access to Justice Act 
(EAJA) fund so that such fees and costs do not come out of the 
Settlement Fund set aside for the Plaintiffs. Ordinarily, the EAJA fund 
is available to cover attorney fees and expenses when they prevail in 
litigation against the Federal government and the government's position 
was not substantially justified. In this case, the government attorneys 
have publicly announced that the government's view is that the 
plaintiffs' attorneys should be fairly compensated for their work in 
this case. Thus, it is only right for the United States to absorb these 
fees and costs at its expense not the Plaintiffs.
    With respect to the class representatives incentive awards, ITMA 
has heard some confusion as to whether these awards are limited to 
payment of unreimbursed expenses. ITMA is hopeful that the parties can 
put this confusion to rest and provide an estimate with as much 
specificity as possible of what each class representative intends to 
seek as an incentive award, together with an estimate of what each 
class representative intends to seek as unreimbursed expenses.
    These are some of the considerations that we hope this Committee 
will be cognizant of, and ITMA is willing to assist to the extent we 
are able to continue to facilitate the dialogue so that Indian 
beneficiaries can be as fully informed as possible in making the 
decisions that may be required of them.
    In the interest of ensuring that individuals receive equitable 
treatment, ITMA recommends that the parties consider, or reconsider, as 
the case may be, setting aside a portion of the settlement fund to 
provide an option for members of the Trust Administration Class to have 
their claims resolved administratively, perhaps by a special master. 
The August 4, 2006, staff redraft of S.1439, which was introduced in 
the 109th Congress, included such a mechanism. Should the parties 
determine that the inclusion of such an option in the Settlement 
Agreement is feasible, this option would capture those individuals who 
might otherwise fall through the cracks. More importantly, however, it 
would also provide members of the Trust Administration Class the 
opportunity to have their mismanagement claims resolved in a manner 
that provides acknowledgement and closure from the government for the 
damages that they and their families may have suffered--without the 
expense and pitfalls of filing a separate lawsuit.
    Second, ITMA believes that the Department should commit to consult 
with Indian tribes on the implementation of the $2 billion Trust Land 
Consolidation Fund and involve tribal governments in decisions on how 
the money will be spent. Under the Settlement Agreement, the $2 billion 
would fund the pre-existing Indian Land Consolidation Office (ILCO), 
which has never had more than $35 million to spend in any given year. 
Under the current practice, the ILCO will often purchase the least 
desirable and unproductive ownership interests, and the government has 
to administer these purchased interests until the government liens are 
satisfied. That seems very wasteful and unproductive, especially when a 
more sensible approach is readily available. Indian tribes themselves 
should be able to contract the functions of the ILCO so tribes can 
determine which lands they wish to purchase, and these purchases should 
be made free of any government liens and taken into trust immediately. 
In addition, because this program is not presently available to Alaska 
tribes, ITMA has adopted a resolution urging Congress to extend the 
benefits of the Land Consolidation Program to Alaska tribes.
    To spend such a large amount of money quickly, the Department must 
eliminate the red tape and must take a hard look at the requirement 
that an appraisal be prepared for nearly all trust land transactions. 
Although the Trust Land Consolidation Fund is not related to the 
settlement of claims involved in the Cobell lawsuit, the $2 billion has 
the potential to be beneficial to both Indian landowners and the 
economies of tribal communities alike. ITMA hopes that the Department 
is considering these and other questions and looks forward to providing 
recommendations in this regard.
    Finally, we urge the parties to engage in direct, in-person 
outreach with Indian beneficiaries to explain and answer questions 
about the proposed settlement. Providing a forum for Indian 
beneficiaries to assemble, compare notes amongst themselves, and tell 
their stories is invaluable. Again, the emotional aspect of these 
issues to Indian beneficiaries cannot be overstated and beneficiaries 
deserve to be able to talk to a real person given the gravity of the 
proposed settlement. A website or pre-recorded telephone message is 
simply no substitute for in-person contact. Again, this is not the 
average class action lawsuit.
    ITMA is very grateful for the Administration's commitment to ending 
the Cobell litigation and hopes that this commitment also extends to 
resolving the scores of pending tribal trust lawsuits and to forward-
looking trust reform. Thank you for this opportunity to testify. At 
this time, I would be happy to answer any questions that the Committee 
may have.
                                 ______
                                 
    The Chairman. Thank you, Mr. Finley. Chairman Nunez.

           STATEMENT OF HON. AUSTIN NUNEZ, CHAIRMAN, 
           INDIAN LAND WORKING GROUP, TUCSON, ARIZONA

    Mr. Nunez. Good morning, Honorable Chairman Rahall, and 
Members of the Committee. Thank you for giving me this 
opportunity to address this longstanding, arduous, and divisive 
litigation.
    I am speaking today on behalf of the Indian Land Working 
Group, a nationwide organization founded in 1991, and since 
that time has engaged in issues related to restoration, use, 
and management of the remaining native land base, including 
cost allotments. ILWG continually seeks improvements in the 
protection and management of all Indian trust lands.
    With me today are two board members, Vice Chairwoman Helen 
Sanders, and Board Member Marcella Giles. I am a member of the 
Tohono O'dham Nation, and have served 23 years as the Chairman 
of the Nation's Santa Vera district.
    The district is co-extensive with the Santa Vera Indian 
reservation founded by Executive order in 1874. The reservation 
covers 105 square miles, of which two-thirds, or approximately 
42 thousand acres, were allotted to individuals under the 
General Allotment Act of 1887.
    My family and I are owners of an allotted trust plan, and 
thus within the class of plaintiffs in the Cobell litigation. 
With this background, my remarks today are in my capacity as 
Chairman of ILWG.
    After considerable discussion and deliberations the board 
of directors of ILWG has taken the position for support of the 
December 7, 2009 class action settlement agreement, and the 
implementing legislation which it proposes.
    While the settlement agreement in several ways falls short 
of our initial expectations and hopes. Nevertheless, we believe 
that this settlement agreement is in the best interests of the 
parties, including class members and the government.
    We have concluded that the benefits of the settlement 
outweigh the disappointments. Our reasoning follows that of the 
Plaintiff class counsel set out in paragraph 16 of the opening 
section of the settlement agreement, namely the risk and 
uncertainty of further litigations, the result, and the 
benefits of closure and payment to land owners, many more of 
whom would pass away before seeing any benefits should this 
dispute be further extended.
    The settlement agreement does not provide for all of the 
damages sought by the Plaintiffs, nor does it acknowledge the 
mishandling of trust funds by the government, which has caused 
great hardship to our people over many years and generations.
    Nevertheless, the good faith of the parties is obvious in 
light of the progress of the litigation over the past decade. 
We recognize and are encouraged that the amount of the 
settlement fund is more than twice the amount found by the 
trial court to be the losses resulting from fund mismanagement.
    The uncertainty of further litigating that finding is 
significant. More importantly, this litigation has brought to 
the Department of the Interior and the Bureau of Indian Affairs 
a dramatic change in understanding of the government's 
fiduciary duty.
    Regardless of the amount of damages to be distributed to 
this settlement, this settlement will bring closure to this 
chapter in the United States and Indian relationships. Finally, 
additional investments in land consolidation called for in the 
second aspect of the settlement agreement is long overdue and 
welcomed.
    We have some difficulty in understanding the inclusion of 
the unlitigated issues of the land mismanagement claims into 
the settlement at this point, 14 years into the case. We 
understand the desire of the government to resolve as many 
claims as possible, and acknowledge land mismanagement claims 
that are related to the general allegations of trust 
mismanagement.
    In view of the benefits of the settlement agreement, and 
risks, and uncertainty, and delay in further litigating those 
issues, ILWG can accept this aspect of the settlement 
agreement, but DOI and the Department of Justice should 
extensively consult with IAM account holders, not just the 
tribes, plus the issues of backlog, probate should be addressed 
before the settlement goes forward.
    Last, we do not agree with sunset provisions for 
fractionation. In conclusion, the board officers of the Indian 
Land Working Group acknowledge and thank those who worked hard 
to preserve, and their financial support and sacrifice to 
conclude and deliver the settlement agreement. Thank you for 
the opportunity to address you today.
    [The prepared statement of Mr. Nunez follows:]

  Statement of The Honorable Austin Nunez, Chair, Indian Land Working 
 Group, and Chairman, San Xavier District of the Tohono O'odham Nation

    Honorable Chairman and Members of the Committee, I appreciate the 
opportunity to address this committee today on the proposed settlement 
of this long running, arduous and divisive litigation.
    I am speaking today on behalf of the Indian Land Working Group, a 
nation wide organization founded in 1991, and since that time actively 
engaged in issues related to restoration, use and management of the 
remaining native land base, including trust allotments. The ILWG 
continually seeks improvement in the protection and management of all 
Indian Trust Lands and the revenues derived from them.
    I am a member of the Tohono O'odham Nation, and have served for 22 
years as chairman of that Nation's San Xavier District. The District is 
coextensive with the San Xavier Indian Reservation founded by Executive 
Order in 1874. The reservation covers 105 square miles, of which two-
thirds, or approximately 42,000 acres were allotted to individuals 
under the General Allotment Act of 1887. My family and I are owners of 
allotted trust land, and thus within the class of plaintiffs in the 
Cobell litigation. With this background, my remarks today are in my 
capacity as the chairman of ILWG.
    After considerable discussion and deliberation, the Board of 
Directors of ILWG has taken a position of support for the December 7, 
2009 Class Action Settlement Agreement and the implementing legislation 
which it proposes. While the Settlement Agreement in several ways falls 
short of our initial expectations and hopes, nevertheless, we believe 
that this Settlement Agreement is in the best interests of the parties, 
including class members, and the government. We have concluded that the 
benefits of this Settlement outweigh the disappointments. Our reasoning 
follows that of the Plaintiff Class Counsel set out in paragraph 16 of 
the opening section of the Settlement Agreement, namely, the risk and 
uncertainty of further litigation, certainty of result, the benefits of 
closure and the payment to landowners, many more of whom would pass 
away before seeing any benefit should this dispute be further extended.
    The Settlement Agreement does not provide for all of the damages 
sought by the plaintiffs, nor does it acknowledge mishandling of trust 
funds by the government which has caused great hardship to our people 
over many years and generations. Nevertheless, the good faith of the 
parties is obvious in light of the progress of the litigation over the 
past decade. We recognize and are encouraged that the amount of the 
settlement fund is more than twice the amount found by the trial court 
to be the losses resulting from fund mismanagement. The uncertainty of 
further litigating that finding is significant. More importantly, this 
litigation has brought to the Department of Interior and the Bureau of 
Indian Affairs a dramatic change in understanding of the government's 
fiduciary duty. Regardless of the amount of damages to be distributed 
through this Settlement, this Settlement will bring closure to this 
chapter in United States and Indian relations. Finally, additional 
investment in land consolidation called for in the second aspect of the 
Settlement Agreement is long overdue, and welcome.
    There have been rumblings in Indian country about the amount of 
attorneys' fees and incentive payments to the class representatives. It 
is appropriate for class representatives to be reimbursed for the 
monies they have expended in pursuing this litigation; however, it is 
difficult for most landowners, whose holdings provide little if any 
income, to comprehend litigation costs of the magnitude of $15 million. 
We recognize, however, that it is appropriate to reimburse those native 
people who sacrificed and had the courage and stamina to support this 
endeavor for the past 14 years and without whose contributions there 
would be no settlement fund. It is also hard for many to understand how 
attorneys' fees of up to $100 million can be fair and reasonable. 
However, these amounts in relation to the amount recovered through the 
litigation and negotiation of the settlement may be appropriate. We 
also note that trust beneficiaries are somewhat protected through the 
process outlined in the Settlement Agreement for publication and court 
approval of the amounts to be paid out for attorneys' fees and class 
representative payments.
    We have some difficulty in understanding the inclusion of the 
unlitigated issues of land mismanagement claims into the settlement at 
this point, 14 years into the case. We understand the desire of the 
government to resolve as many claims as possible, and acknowledge the 
land mismanagement claims are related to the general allegations of 
trust mismanagement. In view of the other benefits of the Settlement 
Agreement, and the risks and uncertainty and delay of further 
litigating these issues, ILWG can accept this aspect of the Settlement 
Agreement.
    In conclusion, the Board and Officers of the Indian Land Working 
Group acknowledge and thank those whose hard work, perseverance, 
financial support and sacrifice were able to conclude and deliver the 
Settlement Agreement. I urge the Committee, the House and Senate to act 
quickly to approve the implementing legislation so that the Cobell 
litigation can be put to rest and the Native landowners whose moneys 
were mishandled can be compensated.
    Thank you for the opportunity to address you today.
                                 ______
                                 

 Response to questions submitted for the record by Hon. Austin Nunez, 
 Chairman, San Xavier District Tohono O'odham Nation, and Indian Land 
                             Working Group

March 25, 2010

Hon. Nick J. Rahall, II
Chairman
Committee on Natural Resources
U.S. House of Representatives
Washington, D.C. 20515

Dear Chairman Rahall,

    Thank you again for giving the Indian Land Working Group the 
opportunity to comment on the proposed Cobell Settlement at the March 
10, 2010 hearing. This is to provide our responses to your questions as 
posed to us in your letter of March 15, 2011. I have listed them in the 
same order as your letter.
1.  In the Cobell hearing, during questioning from the Committee, 
        Plaintiff's attorney William Dorris testified that in 2004, the 
        Court invited the plaintiffs to file trust mismanagement 
        claims. Accordingly, the issue of whether or not such claims 
        were included in the Cobell lawsuit appears to be in some 
        dispute. Can you comment on this matter?
    Response: The Indian Land Working Group (ILWG) understands that the 
corpus of the trust includes trust or restricted land and underlying 
natural resources. The Department of the Interior (DOI) mismanagement 
of these resources has been a topic of discussion at many of ILWG's 
conferences that included unlawful trespass, overgrazing or timber cut 
without permission or oil pumped from an allottee's land without 
permission. These were the ongoing issues that led to an incorrect 
payment deposited in each allottees Individual Indian Monies (IIM) 
account.
    During several of ILWG's workshops, individual allottees met and 
asked for assistance to determine correct rental payments from their 
respective leases, to understand probate rulings under AIPRA, and to 
address fractionation complexities. The results from the workshops 
included the understanding that a correction of their IIM accounting 
depended on DOI administratively correcting the management of the 
resource.
    From ILWG's perspective, then, asset mismanagement was always seen 
as a factor in IIM account shortages. We have not been privy, however, 
to the strategic decisions of the counsel for the Plaintiff Class in 
not making those issues explicit in the litigation.
2.  As you testified on the first panel, would you care to comment on 
        the testimony of any other witness at the hearing or to respond 
        to issues raised by any of the witnesses?
    Response: Professor Monette raised an issue of collusion between 
the parties in his testimony. ILWG dismisses this notion and suggest 
this undermines the professor's credibility. ILWG expected the parties 
to negotiate a settlement. The ILWG expected a larger settlement number 
as did most members of the plaintiff class. Despite this 
disappointment, ILWG believes a good faith negotiation occurred and 
gives no logic to an argument that the Cobell parties colluded to bring 
spurious results to individual allottees. The negotiated settlement 
needs to move forward to be approved by Congress.
    Mr. David Hayes stated in his testimony that there would be an 
effort to do more outreach to tribes. ILWG strongly recommends actual 
field meetings to talk to tribes including allottees as well as give 
notice to Bureau of Indian Affairs Regional Directors to hold 
informational discussions with tribes and allottees in each Region. 
Newspapers, TV, radio and speaking engagements should be employed. In 
sum, ILWG does not believe outreach has been adequate.
    Mr. Michael Finley, Chairman of the Inter-tribal Monitoring 
Association (ITMA) and Chairman of the Colville Tribe, did not 
elaborate on how closely ITMA has worked with allottees who are members 
of the class of plaintiffs to this lawsuit. To address allottee issues, 
the ILWG has developed educational videos and manuals in the areas of 
Estate Planning and Probate; Land Exchange & Consolidation; Leasing of 
Indian Land; Land Acquisition and Financing; and Land Data. In response 
to changes in the Indian Land Consolidation Act and the American Indian 
Probate Reform Act, ILWG conducted numerous community based trainings 
over the past several years that included meetings with tribal 
councils/tribal employees and landowner associations. In addition the 
ILWG responds to requests from Tribes and individuals for information 
on a continual basis.
    Representatives from the San Xavier Allottee Association (AZ), the 
Oklahoma Indian Land & Mineral Owners Of Associated Nations--OILMAN 
(OK), the Allottee Association of the Affiliated Tribes of the Quinault 
Reservation (WA), the Ft. Hall Landowners Alliance (ID), and the Lakota 
Landowners Association (SD) are some of the community based entities 
and locations where trainings have been conducted, or individual one-
on-one assistance has been given. In addition, trainings were 
coordinated for Tribal Councils, educational institutions, legal 
entities, and additional tribal communities on a per request basis.
    The ILWG is not aware of one Tribe or tribal organization, such as 
ITMA, that has worked with allottees in the same manner as ILWG for the 
past two decades. Our extensive two-decade work with allottees is the 
basis from which ILWG finds its support of this settlement.

Sincerely,

Austin Nunez, Chairman
San Xavier District Tohono O'odham Nation
  and Indian Land Working Group
                                 ______
                                 
    The Chairman. Professor Monette, welcome.

            STATEMENT OF PROFESSOR RICHARD MONETTE, 
                       MADISON, WISCONSIN

    Mr. Monette. Good morning, Chairman Rahall, and Ranking 
Member Hastings, and Members of the Committee, thank you for 
the opportunity to present this morning on this historic moment 
for the tribes.
    Mr. Chairman, the proposed Cobell settlement, if enacted as 
it is, would itself be a breach of trust, particularly as many 
of you have pointed out with the astounding lack of 
participation of tribes and tribal leaders and what has been 
developed, and the astounding lack of transparency so far, 
especially given the recent urgency and haste with which this 
has been put before you.
    As it is, the proposed settlement runs afoul of the Class 
Action Fairness Act of 2005. It also runs afoul of the Federal 
Rules of Civil Procedure, laws that this Congress has put in 
place to protect class action plaintiffs.
    Now, attorneys in the case have kind of justified all of 
this as though this were sort of any other settlement, and many 
of you have said, and I just want to emphasize, that this is 
not just any other settlement.
    This is a matter of solemn trust between this body and this 
country, and it should be treated as such, and if anything, 
this settlement, if any, should comply with the Federal Rules 
of Civil Procedure, and the Class Action Fairness Act.
    In short, Mr. Chairman, what you have heard is that the 
proposed settlement includes claims that were not made by 
Plaintiff. They do not pertain, and they are not germane, and 
they are not even relevant to the lawsuit at hand.
    The big ticket items, as you know, are the settlement only 
provision that would establish a so-called trust administration 
class. Proposing to settle non-monetary asset claims for all 
those who do not proactively opt out, potential claims relating 
to oil, gas, coal, minerals, water, timber, thereby releasing 
the Department of the Interior of all liability in such 
matters.
    And I want to emphasize water, because we have heard that a 
couple of times here as though perhaps people have missed that. 
That is in here, and to be settled out, individual water 
claims.
    On that point by the way, I also wanted if I could, with 
all the haste, it was difficult to read this all carefully, and 
my reading lasted very late last night. I had to read something 
five or six times.
    I had a call with the solicitor, who I think, if I might, 
and with all due respect to her, and I respect her very much, 
she knows, found it a little stumped as well. In Item 15, and I 
think it is A-15, it talks about the historical accounting 
claims, the ones that are to be settled entirely without an opt 
out.
    This is the thousand dollar settlement, and we are told 
that this is just for the accounting, but the definition says 
historical accounting claims shall remain common law or 
statutory claims, including claims arising under the Trust 
Reform Act, for an historical accounting through the record 
date of any and all IAM accounts and any asset held in trust or 
restricted status, including, but not limited to, land and 
funds.
    Now it takes care of the accounting part and the funds 
part, and so then this land and the assets is something 
different, and they are included in the definition of 
historical accounting claims, the claims that are intended to 
be finally closed.
    So we get this idea that with the trust administration 
class that you can opt out, but on the other hand, we have some 
language that suggests that it doesn't matter if you opt out. 
Those claims are finalized anyway.
    It may just be a matter of drafting ambiguity at best 
perhaps. It really needs to be looked at more closely because 
as it reads now, it doesn't seem corroborate what we are 
hearing in other fora.
    So let me just talk about the point where the Cobell 
lawsuit. Basically, some people think taint basically, and the 
court ordered $455 million, and at that juncture the temptation 
of collusion loomed large.
    And I think it is fair to say that the Cobell lawsuit fell 
victim to some of that collusion. From that point forward the 
record reveals less lawyering for the Plaintiffs, especially 
the absent class members, and more lawyering of the deal they 
struck behind closed doors.
    And frankly at that juncture the record suggests 
inappropriate participation in settlement negotiations by the 
presiding judge, who otherwise would be a trustee for absent 
class members pursuant to Rule 23[e] of the Federal Rules of 
Civil Procedure.
    So as soon as the dollar amount on the negotiating table 
went that high, it was clear that there was more to give than 
to lose, and it seems like it fell victim to collusion. It 
looks that way to those of us who are on the outside.
    And we hope that if the Rules of Federal Procedure and the 
Class Action Fairness Act were abided by, it would answer some 
of these questions. Thank you for the opportunity again. Thank 
you for the bit of transparency that this hearing is bringing 
to the issue. Hopefully, it will be an excellent beginning.
    [The prepared statement of Mr. Monette follows:]

     Statement of Richard Monette, Professor of Law, University of 
     Wisconsin, and Former Tribal Chairman, and IIM Account Holder

    Good Morning Mr. Chairman and Members of the Committee.
    My name is Richard Monette. I am a Professor of Law at the 
University of Wisconsin in Madison. I am also a former twice-elected 
Chairman of the Turtle Mountain Band of Chippewa. Finally, I am also an 
IIM account holder.
    Mr. Chairman, the proposed Cobell settlement, if enacted as is, 
will itself be a breach of trust.
    As it is, this proposed settlement runs afoul of the Class Action 
Fairness Act of 2005 (CAFA), the law enacted by this body to protect 
the interests of all parties in a class action. It also runs afoul of 
the Federal Rules of Civil Procedure (FRCP) governing class action 
lawsuits. That is why the named parties have requested Congress to 
grant broad waivers from the strictures of those laws. Plaintiffs' 
attorneys have justified this settlement as though it were any other 
settlement; but it is not any other settlement and does not involve any 
other trust. This settlement involves the solemn Trust relationship and 
Trust Responsibilities between the United States and the Indian Tribes 
with which it has signed treaties and with whom it has a long and 
sometimes difficult and sometimes thoroughly enlightened history. This 
settlement, if any, should adhere to the FRCP and the CAFA.
    The proposed settlement has two main components and, as usual, the 
devil is in the details. First, the proposed settlement would establish 
an ``Historical Accounting Class'', providing payments of one thousand 
dollars to each class member, without any option to opt in or out. 
Second, the proposed settlement would also establish a ``Trust 
Administration Class'' that would provide payments of five hundred 
dollars to IIM account holders, with a provision to opt out, that would 
be deemed a complete satisfaction of any trust asset claim and wholly 
release the Department from any further liability to those who accept 
such payments. Finally, the proposed settlement would provide for 
fifteen million dollars in ``incentive payments'' for the class 
representatives and exorbitant attorney fees.
    In short, Mr. Chairman, the proposed settlement includes claims 
that were not made by Plaintiffs, including matters that do not 
pertain, that are not germane, or that are not relevant to the lawsuit. 
The three big ticket items in this regard are:
    1)  first, the ``settlement-only'' provision that would establish a 
so-called ``Trust Administration Class'', proposing to settle non-
monetary asset claims for all those who do not proactively opt-out, 
potential claims relating to oil, gas, coal, minerals, water, and 
timber, thereby releasing the Department of the Interior of all 
liability in such matters;
    2)  second, the ``settlement-only'' provision proposing to 
establish and authorize a ``Trust Land Consolidation Fund'' within the 
Department of the Interior to the tune of some two billion dollars;
    3)  third, the ``settlement-only'' provisions establishing an 
Indian Education Scholarship Holding Fund that would divert some 60 
million dollars from the land Consolidation Program to a Holding Fund 
whose monies are to be distributed by non-profit organizations 
nominated by Plaintiffs and confirmed by the Secretary.
    Mr. Chairman, not one of these three provisions belongs in the 
settlement.
    The Department of the Interior has stated that this lawsuit has 
cost it approximately one hundred million dollars every year of the 
fourteen years of this litigation. That is, perhaps not coincidentally, 
1.4 billion dollars, the exact amount of the settlement attributed to 
settling all claims. In other words, I guess the Tribes and individual 
Indians are supposed to be elated that the Department is willing to pay 
them money that was intended to benefit them in the first place.
    This lawsuit was originally filed in District Court as an equitable 
action seeking injunctive relief only with no monetary damages. 
Plaintiffs simply asked the Department to reconcile IIM accounts and to 
produce documentation to corroborate the reconciliation.
    Early in the litigation, in a bout of judicial sensationalism, the 
district court held certain Interior officials in contempt of court 
because they could not and would not produce records aiding an 
accounting. However, if an accounting could not be done, then the 
injunctive relief could not be ordered, and a new theory of the case 
based on monetary relief would become plausible. This is why the 
proposed settlement illustrates a huge leap from making equitable 
claims into settling monetary damages.
    In August 2009, Plaintiff's lawsuit took a steep turn for the 
worse. In many people's eyes, to invoke the vernacular, the case had 
tanked. The Federal District Court ruled that an accounting was not 
possible and ordered Defendants to pay $455 million dollars in 
restitution. Both sides appealed and the Federal Court of Appeals set 
aside the judgment on both points, remanding to the District Court to 
approve a plan that ``efficiently uses limited government resources to 
achieve an accounting.''
    Therefore, at best, the settlement should be limited to the 455 
million dollars that the district court ordered as restitution. At 
worst, the settlement should be void and the Department should set 
about the task of accounting as the Court of Appeals ordered. The 
Representative Plaintiffs' counsel should be paid their actual fees and 
costs up to the point where their case ``tanked'', where they convinced 
the court that an accounting could not be done and that injunctive 
relief was not possible.
    When the district court found a $455 million dollar cause for 
restitution, and the court of appeals ordered an accounting, million 
dollar damage figure, and the Defendant Interior Department looking at 
protracted accounting exercises, both sides found enough incentive to 
pursue a settlement.
    At that juncture, the Cobell lawsuit fell victim to collusion at 
the expense of the American taxpayer. From that point forward, the 
record reveals less lawyering for the Plaintiffs, especially the absent 
class members, and more lawyering of the deal they'd struck behind 
closed doors. And frankly, at that juncture, the record suggests 
inappropriate participation in settlement negotiations by the presiding 
judge, who would otherwise be a trustee for absent class members. At 
that point, who was obliged to look after the best interests of the 
class, especially absent class members, as the federal rules and 
federal law requires?
    As soon as the dollar amount on the negotiation table went above 
455 million dollars, it meant the Plaintiff class was getting more than 
the District Court believed they had made their case for. But the 
government didn't give this away for free; inevitably, Plaintiffs would 
be giving up something more in return.
    Likewise, as soon as the dollar amount went above 455 million 
dollars, Defendants revealed the astounding willingness to pay more 
than they were held liable for. But the government didn't give this 
away for free either; instead, Defendants would surely be getting 
something more in return.
    In short, the proposed settlement would relieve Defendants of more 
liability than Plaintiffs had made claim to, and would provide 
Plaintiffs relief for claims that they did not make. Primarily, what 
Plaintiffs would relinquish, and what Defendants would gain, is a 
settlement of so-called ``Trust Administration'' claims that were never 
part of the lawsuit, claims that Plaintiffs had neither the right nor 
privilege to cede, and that Defendants as Trustees had neither the 
obligation, nor the right, to accept.
    One has to wonder if the class representatives and their lawyers 
had brought this case not as a class action, but by themselves, 
foregoing up to 15 million dollars in ``incentive awards'' and 100 
million dollars in attorneys' fees, and if after 14 years of litigation 
the Department of the Interior and the Bureau of Indian Affairs came to 
them and said, ``Eloise, do we have a deal for you. We'll give you 
$1000 for your accounting claim, and we'll offer to settle any other 
claim you might have for all the years of trust mismanagement,''--one 
has to wonder if they'd have taken the deal.
    Mr. Chairman and members of the Committee thank you for the 
opportunity to testify this morning and the first bit of official 
transparency regarding this whole proposed settlement.
                                 ______
                                 
    The Chairman. I thank the gentleman. Let me ask my first 
questions to Chairman Finley. Your testimony indicates that a 
separate administrative process should be allowed for the trust 
administration class. Would you please explain why the ability 
to opt out of the class to pursue the claims individually is 
not sufficient?
    Mr. Finley. Well, the real reason why is that we tried to 
get out to people who fell through the cracks. Our hope is that 
the parties would recognize the problem and rectify it, and 
making the money available for this third option that we 
proposed within our suggestions and in the written testimony 
that you have.
    And so I guess it being an emotional issue, people want 
emotional closure. I think that would give them an opportunity 
to be heard, and to hopefully see some compensation for their 
losses that they incurred over the years.
    The Chairman. Are you aware of the Equal Access Justice Act 
being used in other litigation settlements against the United 
States?
    Mr. Finley. Yes. Offhand, I don't really know of any others 
other than the one that was previously done in this case. We 
have heard that individuals would prefer that the attorney fees 
come from some other means?
    I think a lot of the concerns that we have heard throughout 
Indian Country, and it has been mentioned here today, that 
people have a problem with that large amount of money coming 
out of the settlement itself.
    The Chairman. All right. Let me ask Chairman Nunez. Upon 
Congressional enactment of the proposed legislation the 
Department of the Interior will begin implementation of the 
Secretarial Commission on Trust Reform. Do you have any 
recommendations as to how the Commission should operate?
    Mr. Nunez. Yes, sir. It certainly should include Indian 
trust landowners, if at all possible, and to make sure that 
there is certainly transparency, and that continual education 
and information be provided to the landowners.
    The Chairman. Thank you for that. Professor Monette, you 
testified that the United States has spent approximately a 
hundred-million dollars per year on attorney costs to litigate 
this matter.
    Yet, you question the Plaintiffs' attorneys' fees, in the 
range of 50 to a hundred million dollars, and that is what you 
question, for the same 14 years. Why do you think the United 
States spent 14 times more for attorneys' fees than the 
Plaintiffs?
    Mr. Monette. I am sorry, I don't understand the question, 
Mr. Chairman.
    The Chairman. Well, according to your testimony, you say 
that the United States has spent approximately a hundred-
million dollars per year on attorney costs to litigate this 
matter.
    And yet you are questioning the Plaintiffs' attorney fees 
in the range of 50 to a hundred-million dollars. Is that 
correct?
    Mr. Monette. Well, it is not correct. I have not really 
questioned the attorneys' fees, although I share the concerns 
that the other panelists have raised. The hundred-million 
dollars that the Department has told us is that what they have 
spent for doing this special trustee work every year out of the 
money that they have otherwise gotten.
    And so what I pointed out is that it is a hundred-million 
dollars for 14 years, which adds up to $1.4 billion, which is 
the exact amount of the settlement. So what I suggested is that 
the tribes--they apparently think the tribes and their members 
are supposed to be elated for getting $1.4 billion of money 
that was otherwise appropriated for their benefit in the first 
place.
    The Chairman. All right. I appreciate that clarification. 
Do you know what the average percentage award for attorney fees 
in other class action settlements is?
    Mr. Monette. I don't know, and they are all over the board. 
It is not uncommon, as you know, in tribal matters for them to 
be 10 percent as we have a Federal statute that is on point. 
They have been as high as 40 percent.
    But generally that has been a percentage of an amount that 
the Court has ordered, and here the Court ordered 455 million. 
Then we got two sides that basically colluded to add more money 
to that, and then for attorneys' fees to be added.
    And it is a very clear sort of rule, Mr. Chairman, that 
deals with that issue. In fact, there are probably three or 
four of them. Generally, and this was part of my testimony 
written to you, Courts particularly look for signs that a class 
action settlement resulted from a reverse action.
    Collusive agreements between the defendants and the class 
representatives often are in exchange for generous attorney 
fees. As the ABA article that I pointed out notes, by this--and 
this is a quote--that by this tactic, the defendant hopes to 
preclude all other claims, which is precisely what is happening 
here with the trust administration claims, which is why I wrote 
them after that paragraph.
    The proposed settlement, at least on this issue, will be a 
poster child of such reverse action settlements. It also flies 
in the face of a very difficult development with settlements; 
that is, attempting to address the question you are asking 
about settlement only provisions.
    As I wrote similarly the United States Supreme Court has 
directed courts to scrutinize settlement only class action 
lawsuits, where classes are certified and claims are made 
solely for the purpose of settlement, which is what we got 
here; without scrutiny and without sufficient information.
    So we have for the first time a second class, a trust 
administration class, that none of us have seen before. Now it 
may be a good idea. It may be the only way to work out the 
kinks in this settlement, but nobody has seen it. I have not.
    I have talked to many tribal leaders, and not a single one 
has even heard of the idea--except for, of course, the very 
small number of tribal leaders that the Plaintiffs are working 
with.
    And so this is the classic settlement only provision. The 
proposed settlement provision establishing a new trust 
administration class at the eleventh hour of claims that were 
neither made nor litigated will become the poster child of the 
settlement only problem that the Supreme Court has frowned 
upon.
    It also likely violates our reverter clauses, although 
quite frankly that provision is so ambiguous in the proposed 
settlement that I couldn't quite understand it. But the court 
disfavors reverter clauses which specify that unclaimed funds 
revert to the defendant.
    First, there was all the incentive to provide more money 
than the claim asked, or more money than the court ordered, I 
am sorry. But then once the claims are made difficult to make, 
that money is reverting back to the defendant.
    That is the kind of reverter clause that precisely this 
body, the Congress, suggested are unfair in class action 
lawsuits, and as I wrote here, this is especially relevant in 
this settlement, since normally plaintiffs would administer 
distribution of awards. They are going to help the plaintiffs.
    The defendants are going to help the plaintiffs administer 
this award. In fact, they will play a key role. These reverter 
clauses allow counsel agree, and this is again out of the ABA 
article.
    These reverter clauses allow counsel to agree to inflated 
settlement amount that serves as the basis for calculating 
attorney fees, while providing an incentive to discourage 
members of the class from making claims.
    With attorney fees based on the overall amount, and the 
defendant administering claim awards, this settlement again 
will be the poster child of this frowned upon reverter clause 
in the rules.
    So my written testimony will point out where I think 
several of the provisions run afoul of two or three laws that 
this body has adopted to protect class participants. This 
settlement is asking this body to play along, to make broad 
waivers of any other applicable law, so that it can reach a 
settlement that otherwise that they could not have reached.
    And to grant jurisdiction to a court in ways that had not 
been granted before in this matter so that money could be on 
the table. and all we are asking is that if we can have the 
transparency and the time to look at these matters to make sure 
that tribes are at the table, and tribal leaders, and 
apparently that we have recognized here in the land 
consolidation fund.
    Tribal leaders are largely absent from the discussion in 
this so-called education scholarship fund. The plaintiffs are 
going to propose nonprofit organizations to administer 
scholarship funds, all without the tribes, and I don't think 
that the tribes would agree with all of that. They may agree 
with some, but quite frankly, with the short timing, we really 
just don't know.
    The Chairman. Mr. Hastings.
    Mr. Hastings. Thank you, Mr. Chairman. My first question is 
to Chairman Finley. Before redistricting, I represented the 
Okanogan County part of the Colvilles. I don't now. I might 
sneak over a little bit there in Grand Coulee, but just a small 
part.
    But at any rate, you are here representing ITMA, and if you 
said it in your testimony, I missed it, but what do you hear 
from your constituents in Washington State on this issue?
    Mr. Finley. I think I pointed that out in my testimony, 
that many of them are questioning how this could be brought 
without their consent. I think that it has been stated earlier 
that this is the first of its kind in Indian Country, and it 
truly is.
    My constituents turned to me for these answers. They expect 
their elected body to bring issues like this to the forefront. 
In this case, this has not happened. So when they turned to me 
and asked me for questions, and I don't have them, it creates a 
difficult situation for me as a tribal leader, because I should 
be doing those things for them.
    Some of their issues are the emotional issues that you have 
heard. Some of them believe the terms as they understand them, 
if they do understand them, aren't fair to them. Some of them 
think that they are good, and they will benefit them in a 
number of areas.
    It is across the spectrum, but I do want to underscore the 
fact that I continually have heard that they expect me as a 
tribal leader to have these answers for them, and I have tried 
to find those answers for them the best that I possibly can.
    Mr. Hastings. You would anticipate that the chairman of 
their tribes would have similar concerns and similar questions 
from their constituents, too?
    Mr. Finley. I have heard similar concerns from other tribal 
leaders.
    Mr. Hastings. Which then raises a question that I wanted to 
ask all three of you. I think there is general agreement that 
this has to be put behind us. We are at a point where there is 
at least a settlement in front of us, and there are some 
questions about that.
    The questions center on transparency and maybe a final 
decision at least, a comfort zone of all of you. So my question 
then to all of you, what would you advise us to do as we move 
forward on this process?
    Now, keep in mind that this settlement was reached on 
December 7, and was supposed to be culminated on December 31. 
It has now been kicked ahead to April 16, and presumably it can 
be kicked ahead again.
    But at what point and what should we be doing in order to 
satisfy the transparency that I sense all of you want to have 
more of and so forth? What advice can you give us? Let us start 
with you, Chairman Finley.
    Mr. Finley. I think if the parties involved would l do 
outreach across the nation, and throughout the various regions. 
That would go a long ways in addressing some of the concerns 
and questions that many of the Indian beneficiaries have, as 
well as tribal leaders.
    Mr. Hastings. OK. Mr. Nunez.
    Mr. Nunez. I certainly agree with the statement from Mr. 
Finley. The plaintiffs actually are scheduled to come out 
within the next two weeks to Arizona to meet with the tribes 
there, but I also think that the Department of Justice, and the 
Department of the Interior also need to do the field hearings 
in conjunction with Ms. Cobell's group.
    But certainly all information that can be granted and 
provided to the individual allottees and tribes needs to get 
out there so that everybody can feel comfortable in moving this 
forward.
    Mr. Hastings. Professor Monette.
    Mr. Monette. I would ask the Committee to bear in mind that 
all of these individual Indian money accounts and the interest 
are derivative of these peoples' membership in tribes, largely 
derivative of their membership in tribes that entered into 
treaties with the United States.
    And those tribes belong and deserve to be at the table. I 
would add that perhaps there could be a judicial referral of 
the money claims to the Federal Court, waiving the United 
States sovereign immunity, so that the Court could actually 
address these matters, and maybe the settlement then would make 
more sense. It would not appear to be as collusive.
    I would ask this body to direct settlement negotiations to 
comply with the Class Action Fairness Act, and the Federal 
Rules of Civil Procedure. They can be waived at the end, 
because obviously that is what we are asking now.
    But right now, we haven't had a settlement with them 
applying. It would be nice if their settlement negotiations 
were in compliance with those laws, maybe with the idea that 
there would be some necessary waivers at the end.
    But right now those laws are requiring the things that I 
mentioned, and very stringent requirements regarding notice. I 
think that it is fair to say that that has not been followed, 
the clear, concise, and easily understood language, and the 
Supreme Court addressing that rule in a recent case requiring a 
desire to actually inform absent class members.
    I am a member of this class, and I can say in no uncertain 
terms that I have never once, in no way, shape, or form, have I 
ever been contacted by a Plaintiffs' attorney or by the named 
Plaintiffs to ask what I thought, to ask what I felt about it.
    This Committee and your staff know that I am pretty easy to 
find. So I think that should be complied with as well.
    Mr. Hastings. Well, ultimately the decision rests with us, 
because we have to have legislation, which by the way has not 
been introduced. At what point, I guess in this whole process, 
should we feel a comfort level that you have all been satisfied 
that the transparency and the procedures are enough to satisfy 
all of Indian Country, or is that the 64-dollar question 
always? Any one of you.
    Mr. Monette. I think when the tribal leaders are given a 
chance to look at it and to talk about it, and right now at 
first blush, we are going to find tribal leaders that 
absolutely oppose this at one end, and those who think, oh, it 
absolutely should go forward, and at the other end, we could 
cherry pick from either end.
    If they all get a chance to talk this out, I think we will 
come up with a consensus, and if the tribal leaders, true to my 
talk here this morning, if they think that this should go 
forward, I am all for it.
    Mr. Hastings. Well, that then lends this opportunity, 
because if we are going to have to ultimately make that 
decision, we are going to have to hear from tribal leaders and 
individuals.
    We have already, and we welcome that. I think that on all 
sides that they welcome that, but if there is some real 
heartburn, so to speak, on this process, we really need to know 
what that heartburn is, and the depth of that heartburn 
throughout this whole process before we can make that decision.
    So I would respectfully ask all of you with the contacts 
that you have throughout Indian Country to share that with us 
as soon as possible so that we can proceed forward. Thank you, 
Mr. Chairman.
    The Chairman. The Gentleman from American Samoa, Mr. 
Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman. I was just going 
to follow up with my good friend from Washington's question, as 
well as his opinion, and I was going to ask all three of you 
gentlemen is it your understanding that in order to move this 
proposed settlement that is now being discussed, that there has 
to be some kind of a Federal legislation to actually implement 
the process, or can this just be done by Executive Authority of 
the Administration?
    Mr. Finley. It is also my understanding that the decision 
rests with Congress to give the Court the authorization to move 
forward on the settlement terms that are before everybody 
today.
    Mr. Faleomavaega. It is also my understanding that 
legislation is required. Mr. Monette.
    Mr. Monette. Earlier on, we were told--we were told 14 
years ago told really about the strategy and genius of the 
strategy of the case, that it was not asking for money. So it 
would not run any red flags up the poles.
    It was simply asking for a correct accounting, a 
reconciliation, and that is why it was able to be brought in 
the Federal District Court as a declaratory and injunctive 
matter.
    But as soon as the accounting--and we were told evidently 
that the appeals court does not agree, but we were told that an 
accounting can't be done, and the monetary damages became more 
plausible.
    But in order to get monetary damages, as you know, that 
requires a waiver of sovereign immunity from the United States, 
likely a judicial referral on this. So the settlement as it is 
cannot be done solely by the Executive Branch, by the 
Administration. It requires this body's stamp of approval as it 
is.
    Mr. Faleomavaega. Well, as you know, in the years that I 
have served as a member of this Committee, we have had this yo-
yo relationship going back and forth between the Administration 
and the Congress in determining exactly how much money is 
involved here in this mismanagement.
    And I believe that this is one of the critical factors as 
to why Ms. Cobell felt that we need to file a lawsuit because 
we are not getting anywhere. Now, 14 years later, we are now at 
this point, and as I said previously in my statements, I cannot 
believe that this is the amount of money that is being 
involved.
    And I honestly believe it is a lot more than $3.5 billion 
or whatever. I wanted to ask you when Ms. Cobell initiated the 
lawsuit, what was the reaction from the Indian Country?
    Did any of these 250 tribes go and give their moral 
support, as well as financially, when she was struggling to put 
this through the Federal Court system? Professor Monette.
    Mr. Monette. I think it is fair to say that my tribe did. 
My tribal leader, who I respect greatly, Twila Martin Kekahbah, 
at that point pulled me aside and talked with me about it.
    I know that there were very warm feelings for the Native 
American Rights Fund at the time, and that we thought that the 
Native American Rights Fund was going to see this case through 
to the end, and win all those $170 billion that Mr. 
Faleomavaega would apply here, and I am all with you on that, 
and NARF would get their fair share of that.
    Looking at the settlement today, the Native American Rights 
Fund is not even listed as class counsel, and I am sure that 
they want to be, but I am also sure that they recognize at this 
point that there are some very sort of dangerous conflicts of 
interest for them putting it in there today. But I can tell you 
at that time that that is the discussion that we had.
    Mr. Faleomavaega. I sense also from reading your statement 
and your comments, Professor Monette, that in your honest 
opinion that the current process has evolved with the 
involvement of the Department of the Interior.
    Is the process agreeable to you, both legally and policy 
wise, or do you have some serious questions on how we came up 
with where we are now, where Secretary Salazar has given 
agreement to this proposed $3.7 billion that we are going to 
provide in the settlement.
    Mr. Monette. One thing that we have not heard yet, and I 
assume that we will, but the Department certainly hasn't been 
with clean hands throughout this process. We have seen them 
basically taking five IAM accounts and massaging them into one 
over time.
    We have seen them preparing for this settlement, where we 
have people who have trust interests in land out there, who had 
no IAM account, and they created an IAM account. All of this is 
to cast the broader net for buy-in, along with the land 
consolidation funds, and scholarships, and all of that.
    There has been authority for land consolidation since 1934 
frankly, since the Indian Reorganization Act. There have been 
authorization from this body for scholarships. They have always 
been under funded, and they should be funded.
    What they have to do at this settlement other than dangling 
a carrot in front of people for buy-in is beyond me. There is a 
better process. We are better than this. This is of a 
historical moment for our people.
    Fifty years from now, we will look back and look at that, 
frankly, indefensible law that this body passed a hundred plus 
years ago, the General Allotment Act, and we will look at this 
as an attempt to fix part of it forever.
    And I hope it would as well, but if we are going to do that 
with that much historical moment, we might as well do it right.
    Mr. Faleomavaega. Thank you, Mr. Chairman. I think my time 
is up. If I could just raise one short comment to Mr. Nunez, 
the Chairman and member of the Tohono Tribe in Arizona.
    I visited your tribal nation there a couple of hears ago 
with my cousins, who played for the University of Arizona 
football team, and I just wanted to ask you if our high school 
football team is coming along OK.
    I am going to ask my cousin, who is currently the defense 
coordinator for the University of Arizona, to pay you another 
visit to make sure that our high school there is coming along 
OK, and if it is OK with my friend, Raul, here, we can do that. 
Thank you, Mr. Chairman.
    The Chairman. The gentleman from Louisiana, Mr. Cassidy.

 STATEMENT OF HON. BILL CASSIDY, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF LOUISIANA

    Mr. Cassidy. Mr. Monette, I heard an expression once that 
the enemy of the good is the better. Now, I think that has a 
lot of truth. I have been here about a year, and it seems like 
it is very hard to get anything done. If you are talking about 
50 years from now, it almost seems like this could still be 
litigated 50 years from now.
    Clearly, there are some problems with the legislation. On 
the other hand, it does seem to redress some things which need 
to be redressed, and it seems to bring conclusions to something 
that seems like it could go on forever.
    What are your thoughts about that statement? And, Mr. 
Nunez, I appreciate both of you gentlemen's perspectives on 
that, too.
    Mr. Monette. I am in agreement that the time is now or near 
to get this all behind us.
    Mr. Cassidy. But it doesn't seem like it is going to happen 
now in a year.
    Mr. Monette. The problem with that is the broad brush that 
this has been done, and the devil is in the details, or the 
devil should be in the details here, and some of the details 
are missing.
    My tribe, for example, the Turtle Mountain Band of 
Chippewa, the reservation was too small when the allotment 
came, when the Allotment Act came about. So, twenty-five 
hundred heads of households were granted allotments 500 miles 
away from the tribe, in South Dakota, in Minnesota, and in 
Montana.
    Those allotments are so far from the tribe that the tribal 
government, as a tribe, as a collective body, has not been able 
to pay attention to those claims and those allotments over the 
years.
    Many of them have been lost. We on occasion find telephone 
lines running through the middle, and we find that some of them 
have had oil pumped out of them without there ever being a 
lease.
    This was all the subject of the Senate Committee on 
Investigations, a long investigation about 20 years ago, over 
three years. Now, none of that has been resolved yet. Some of 
those claims could be worth frankly thousands or millions.
    But this legislation will dangle in front of my tribe and 
my tribal members, where there is 80 percent unemployment, 
dangle $500 in front of them, and say will you take this in 
exchange for whatever has happened in the past, and I am afraid 
that they are going to say yes. And everybody has got their own 
will, but at least I want them to know that.
    Mr. Cassidy. Let me hear from the other two gentlemen.
    Mr. Nunez. I would say that there are some issues that will 
be resolved through the settlement. However, as you mentioned, 
and others have mentioned, there are other issues that will not 
be addressed.
    And it is very uncertain how they will be addressed in the 
future. However, I believe that more support from the 
Department of the Interior needs to be provided so that they 
can assist the tribes and the individual allottee landowners.
    Without that support and qualified staff to be able to 
delve into the fractionation issues, and the boundary issues, 
it will still be there.
    Mr. Cassidy. So we are focusing on the money, but the 
corrective direction to the Interior would be one very good 
part of this settlement, and that going forward theoretically, 
this would not continue to be an issue. So you would focus on 
that as a good that would be a strong reason for supporting the 
settlement?
    Mr. Nunez. Yes, sir.
    Mr. Cassidy. Independent of whether or not we can dispute 
about the money. Mr. Finley.
    Mr. Finley. I agree now or near is the time to do it, but I 
think we need to be deliberate about it. The Indian 
beneficiaries need to be informed. They want transparency. The 
tribal leaders want transparency.
    So if this is to move forward, we need to keep that in 
mind, that that is what we want at the very least, because we 
are talking about a hundred years of history here. Yet, we are 
being asked on the other hand by some to say, well, don't ask 
questions right now. It could prevent things from moving 
forward.
    Your opportunity to ask questions will come later. That is 
a tough sell to people in Indian Country who have experienced 
all the injustices over the years. It is not the same Indian 
Country that once existed then. People are self-empowered, and 
are not afraid to ask questions, and they want their questions 
answered.
    Mr. Cassidy. So, Mr. Finley, and Mr. Nunez, what level of 
outreach have you seen or would you expect prior to this 
settlement? What do your members tell you that they are hearing 
about the benefits that will accrue to them from this 
settlement?
    Mr. Nunez. Well, in our case, the Santa Vera Lodge 
Association has supported the settlement. I am not real sure 
about the allotment owners in Hill River and Salt River, in 
those areas.
    But I believe as I mentioned earlier that just getting out 
there and talking to them, and making the presentations about 
the settlement will go a long ways to helping them understand.
    And through those presentations, then if there are 
questions and concerns, then we will hear about them, and then 
we as the Indian Land Working Group, would also be willing to 
assist them with regard to their concerns.
    Mr. Cassidy. Mr. Finley, you were going to answer?
    Mr. Finley. I would have to agree with that comment. It is 
my understanding that there are outreach efforts currently in 
the works right now with an organization in the northwest.
    Certainly ITMA would be more than happy to help assist in 
that process to get the information out to the people, and I 
think that if the parties involved were to participate in that, 
which it is my understanding that they do plan to, then I think 
that will go a long ways in addressing some of the problems, 
concerns, and questions that I have heard within recent months.
    Mr. Cassidy. Thank you.
    The Chairman. The gentleman from Arizona, Mr. Grijalva.
    Mr. Grijalva. Thank you, Mr. Chairman. I have kind of a 
wandering question for all three, and thank you very much for 
you testimony. it was very edifying. The issue of class 
notification, I have heard it from all three of you that it is 
important that Indian Country be involved in knowing, and being 
notified of what the proposed settlement is.
    The issue of collusion, I don't know how you resolve that 
other than to halt any legislative initiative until that is 
judicially investigated, which I think was a suggestion.
    But at the same time, there is an urgency, and I want to 
deal with that urgency question. Can we accomplish putting 
together the legislation to carry out the settlement with 
urgency, and I think the issue of historical--the hundred 
years--is appropriate, and has to be part of the context.
    The last 14 years has to be part of the context. So, there 
is for many people an urgency to move this settlement forward 
and to close this chapter, and move on to other chapters, which 
requires the Department of the Interior to continue their 
responsibility in a very serious way.
    So is it doable to move forward with urgency, and with 
deliberate speed, or hold the process in abeyance until issues 
of class notification, and collusion, are settled. And I pose 
the question, and I don't mean to make it either/or, but it is, 
because I think--well, never mind. Go ahead.
    Mr. Finley. I would support it moving forward. I would just 
hope that our recommendations that are in the written testimony 
are given due consideration as we move through this process.
    I hope that as many questions that linger out there are 
answered, and I hope that opportunity will be given to those 
who fall through the cracks, and who really aren't included in 
the Class II portion be given an opportunity, instead of just 
or you can opt out.
    I think that the history shows that these people deserve an 
opportunity. They don't always have the means, the financial 
means, or even the physical means, that it takes, the 
wherewithal if you will, to see that through.
    Mr. Grijalva. Describe opportunity for me if you don't 
mind.
    Mr. Finley. Well, in my written testimony, we had offered a 
third option.
    Mr. Grijalva. OK.
    Mr. Nunez. I would say that we could meet the outreach 
efforts within the time frame that we are allotted, and again, 
if we just explain all the aspects of it, and answer the 
concerns as best as possible.
    I believe that we will get to the landowners and the tribal 
governments to be able to bring this to closure.
    Mr. Grijalva. OK. Professor.
    Mr. Monette. You know, there are probably five thousand 
studies out there that all conclude one sentence pretty much, 
and that is that people are OK to lose. They are OK to be 
adversely affected as long as they feel that the process was 
fair.
    And so far, I don't think they feel that way. This is a 
start. I recognize that there is urgency, but deliberation and 
transparency will be important here for what Congress does.
    I note that Congress has plenary power, and so Congress can 
do it at once. My old dad, who was successfully elected to our 
tribal council more times than anybody had ever been, he always 
called it--he always said to me, so Congress has plenty power. 
They do.
    Mr. Grijalva. We don't use it well sometimes, but it is 
plenty.
    [Laughter.]
    Mr. Grijalva. At the end of that deliberate outreach with 
some urgency attached to it is the goal unanimity of opinion or 
is the goal for people to be informed of the people affected?
    Mr. Nunez. I would say both.
    Mr. Grijalva. OK.
    Mr. Finley. I would agree.
    Mr. Grijalva. OK. Thank you. I yield back, sir.
    The Chairman. The gentlelady from Wyoming, Ms. Lummis.
    Mrs. Lummis. Thank you, Mr. Chairman. And I appreciate this 
hearing. I am just trying to help the tribes that reside in 
Indian Country within the State of Wyoming, but Northern 
Arapaho and Eastern Shoshone understand what is being proposed 
here.
    Chairman Finley, I want to clarify a little bit about how 
somebody can opt out. For those within the trust 
administration, or damage claims classification, you raised 
some concerns about what the process would be for an 
individual.
    Can you or either of our other two witnesses today share 
any additional insight with me as to what frame work the 
settlement agreement establishes for an individual who pursues 
the opt out provision?
    Mr. Nunez. My understanding is that if one wishes to opt 
out, then they can seek their own legal counsel to pursue their 
concerns. Granted, however, there are a majority of our Indian 
people that may not have the means to do so. However, we are 
still giving them that option that is there.
    Mrs. Lummis. And I also understand that individuals with 
damage claims, they will be given approximately $500, plus a 
stipend based on a preset formula. Do you know how this payment 
compares to past successful damage claims of this nature, or is 
there a standard that we can look to, to see if this is 
reasonable?
    Mr. Nunez. Personally, I am not aware.
    Mr. Finley. I am not either, but I can say that this is new 
to Indian Country, the class action lawsuit, as it is being 
brought forward now.
    Mrs. Lummis. Thanks, Mr. Finley. Another question for you. 
You mentioned in your testimony that you think the attorneys' 
fees should come out of the Equal Access to Justice Act, the 
EAJA Fund, instead of the judgment fund, which may be 
reasonable, except that I would alert you that each places no 
firm cap on the amount of attorneys' fees that can be 
recovered.
    So how would Congress ensure the level of funding being 
directed toward attorneys in this case is appropriate?
    Mr. Finley. I don't know. As you pointed out, the decision 
rests with you, but if you would like an answer from me, I will 
work on that and get it back to the Committee.
    Mrs. Lummis. Well, thank you, and I will mention to you 
that I, along with two other members of this Committee, 
including Representative Herseth Sandlin, who is here today, 
have recently introduced legislation that would require the 
Federal Government to make transparent the attorneys' fees that 
are paid out under each.
    For the last 15 years, there are no records of how much the 
hourly rate was, to whom they were paid, whether it was a 
settlement or a judgment amount that was paid out under EAJA, 
and to whom, and so we are trying to shine some light on 
attorneys' fees paid out under EAJA.
    And given the amount of attorneys' fees in this settlement, 
it may appear to be somewhat open-ended. It is a pretty broad 
range, 50 a hundred-million. What assurance is there that 
Indian Country will ever know how much attorneys ultimately 
receive as a result of this settlement?
    Mr. Finley. I don't know that we will know. I would like to 
think that we would, considering everything that is at stake, 
and all the individual beneficiaries who will be compensated, 
or who choose to opt out, or whatever happens as we go through 
this process.
    But as you heard today, people are interested in that 
topic. People are concerned about it, and they want to know the 
answers to that. So I would like to think at the end of the day 
that we will be able to see that number and know and look at 
it.
    And you mentioned earlier that you were not aware of what 
the attorneys' fees were, et cetera. I thought our tribe was 
the only one that had that problem, but evidently I was wrong.
    Mrs. Lummis. That is true throughout EAJA, and that is true 
regardless of the Federal Agency that has been sued under EAJA, 
and we hope to rectify that. Thank you very much for your 
testimony. Mr. Chairman, thank you.
    The Chairman. The gentleman from New Mexico, Mr. Heinrich.
    Mr. Heinrich. I have just a comment for Chairman Finley. I 
appreciate you bringing up the issue of consultation with 
tribes on the implementation of the Tribal Land Consolidation 
Fund.
    I think that if we are to approve this, that is a critical 
piece moving forward, and I would certainly welcome the 
opportunity to press for adequate consultation as we move 
forward on this.
    Mr. Finley. I appreciate that.
    The Chairman. The gentlelady from South Dakota, Ms. Herseth 
Sandlin.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman. I don't have 
any questions for this panel, but I want to thank you for 
having this hearing. I thank the witnesses for their 
perspectives and what they have offered to the Committee.
    Mr. Chairman, as you know, I represent nine sovereign 
tribes in South Dakota, and this agreement, if approved by 
Congress, would have a profound impact on the State. There are 
approximately 20 thousand of the accounts that are held by 
individuals within the State's borders, and this is the largest 
number of any State.
    We do know that there are various--either regional or 
national--associations or individual tribes that are weighing 
how this should go forward, possibly looking at resolutions 
desiring more hearings, more consultation, more information.
    In that regard, I do think it is important that as we 
assess the views of the various account holders that they do 
feel, and as the professor indicated, that there was a fair 
process. That they had a chance to fully understand the 
ramifications of this agreement, and in that respect, I do want 
to recognize Ms. Cobell.
    She has taken the time to visit Indian Country in South 
Dakota most recently, in the Pine Ridge and Rosebud 
Reservations, to answer questions. And I think it is just 
important that we ensure fair process, and part of that is 
having this hearing today to get a better and broader 
perspective of the ramifications of the agreement, and the 
perspectives of the Administration, different tribal leaders, 
as well as Ms. Cobell herself. So I thank you, Mr. Chairman, 
for the opportunity.
    The Chairman. Any other Members of the Committee wish to be 
recognized? If not, gentlemen, we thank you for your testimony 
today. The Committee will now hear from The Honorable David 
Hayes, a Deputy Secretary, United States Department of the 
Interior, Washington, D.C., accompanied by The Honorable Hilary 
Tompkins, Solicitor, United States Department of the Interior, 
Washington, D.C.
    And our second panelist will be The Honorable Thomas J. 
Perrelli, Associate Attorney General, United States Department 
of Justice, Washington, D.C. We welcome each of you. We do have 
your prepared testimony. It will be made a part of the record 
as if actually read. David, we will recognize you first. 
Welcome back to the Committee.

     STATEMENT OF HON. DAVID HAYES, DEPUTY SECRETARY, U.S. 
 DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.; ACCOMPANIED BY 
    HON. HILARY TOMPKINS, SOLICITOR, U.S. DEPARTMENT OF THE 
                   INTERIOR, WASHINGTON, D.C.

    Mr. Hayes. Thank you very much, Mr. Chairman, and Members 
of the Committee, it is a pleasure to be here today to respond 
to questions about this very important settlement.
    I want to first at the outset let all of you know that this 
has been from day one an incredibly high priority for this 
Administration to see if we could resolve this long-running 
Cobell lawsuit.
    It has taken 13 years, hundreds of millions of dollars in 
litigation on both sides, 20 appellate opinions, dozens 
literally of hearings and trials, scores in fact of hearings 
and trials, and it has been a corrosive case that has hurt the 
relationship between the United States and Indian Country.
    From day one, Hilary Tompkins, to my left, the first ever 
American Indian Solicitor at the Department of the Interior, 
and I, on behalf of the Secretary, took this on personally to 
see if we could through our personal involvement at the highest 
levels, break through what had been 13 years of failure 
basically to try to reach closure on this.
    We were joined at the hip by Attorney General Eric Holder, 
and his top associate, Deputy Attorney General Tom Perrelli. We 
were personally engaged in these discussions, and we worked 
with a team that represents the class affected by this 
settlement.
    The 300 to 500 thousand individual Indians are represented 
through the class action by a team of lawyers, and the 
relentless and impressive Elouise Cobell, who you will hear 
about, and hear from in the next panel.
    We feel that this settlement is a fair settlement, and an 
appropriate settlement, and I am going to defer to Tom to talk 
about some of the legal aspects that have been raised in this 
hearing.
    Let me just mention a couple of issues of special 
importance to the Department of the Interior, and our trust 
responsibility to the individual Indians who have trust 
accounts and to tribes who have trust accounts.
    It is our view that we need to resolve these historical 
issues and set the course, and turn the page, and look ahead, 
and repair our management of trust assets with the tribes, and 
look ahead and not behind.
    Toward that end it was very important to the United States, 
and we think it is very important for this Congress that this 
chapter be closed, and that the backward looking of historical 
accounting be fully accounted for, and resolved, and that means 
not just the question of whether the accounting has been done, 
but also woven into the issue is the question of in addition to 
the accounting, the green eye shade work, has the assets 
themselves been mismanaged.
    That was all an important element, and we thought if we 
just resolved the question of the accounting, and didn't deal 
with the question of mismanagement, we would be back here 
spending literally $50 million a year as far as the eye could 
see.
    So we went to the class, and the class will work with the 
Judge as Tom will explain, to work through that element of the 
settlement. We wanted to close the book and look ahead.
    And toward that end, Mr. Chairman, and Members of the 
Committee, as explained in my written testimony, as soon as 
this settlement goes forward, we are impaneling a new 
commission to ensure that as we move forward with our trust 
management that we are taking the best of what we have learned 
over the last 13 years.
    We will hire folks. We are going to have a five-member 
panel, well represented by Indian Country. We are going to look 
at what worked and at what didn't, and we are going to see how 
we reorganize the Department, in terms of the trust management 
issues.
    We have an Office of Special Trustee. We have a Bureau of 
Indian Affairs, with different responsibilities, and some 
conflicts in terms of customer service at the least. We want to 
do it right.
    This was a very important point by Elouise Cobell and her 
colleagues here, and we accept it. We want tom move forward and 
do this right going forward. Let me finally--and one aspect of 
doing it right going forward that we were very insistent on--is 
that part of the problem that led to Cobell is the 
fractionation of Indian lands.
    And the fact that over time we now have four million 
individual interests in highly fractionated tracks of land that 
do nobody any good, and the expense is enormous, and the 
opportunity for error and mismanagement is enormous.
    So we worked with the Plaintiffs to have as part of this 
settlement a resolution of that root cause problem of 
fractionation. That is why the $2 billion associated with 
getting money back into the pockets of these individual 
Indians, and at the same time freeing up those lands, and 
taking away the root cause of these errors of these individual 
accounts is so important, and why we are so excited about the 
settlement.
    Let me say finally that in terms of how we implement that 
settlement, we are looking forward to vigorous government to 
government consultations with all of the tribes on how we 
implement.
    And to your point, Congressman Heinrich, the land 
consolidation program, because this is going to be a benefit to 
the tribes, as well as to the individual Indians who are 
settling in this matter, and we want their help, in terms of 
prioritizing lands that should be acquired through this 
program, and working with them every step of the way.
    And as we can talk about in the Q and A, we are anxious to 
make sure that the word and understanding about this settlement 
gets out in Indian Country. We have done a number of outreach 
efforts already. We are ready to do more.
    We frankly thought it presumptuous to go out and assume 
that this settlement would be approved by the Court and by the 
Congress without getting your approval first, and we look 
forward to getting that in the near future. Thank you, Mr. 
Chairman.
    [The prepared statement of Mr. Hayes follows:]

            Statement of David J. Hayes, Deputy Secretary, 
                    U.S. Department of the Interior

    Good morning Mr. Chairman, Mr. Hastings, and members of the 
Committee. Thank you for the opportunity to provide the views of the 
Department of the Interior (Department) regarding the Settlement that 
has been reached between the United States and the plaintiffs in the 
Cobell class-action lawsuit and accompanying legislation, the 
``Individual Indian Money Account Litigation Settlement Act.'' The 
Cobell case, which devolved into contentious and acrimonious litigation 
over the Department's trust management and accounting of hundreds of 
thousands of individual Indian trust accounts, has hindered U.S. 
efforts to work effectively in Indian Country for more than a decade. 
During these years many members of this Committee have signaled a 
desire for the agencies involved in this litigation to find a way to 
bring the case to resolution. And in December 2009, we achieved an 
agreement. I am very pleased to say that the Settlement we have reached 
is a fair one, a forward-looking one, and one that I am certain will 
strengthen the relationship between the federal government and Native 
Americans. This Settlement will enable us to move ahead together and to 
focus on the many pressing issues facing Indian Country.
    The agreement is the product of good faith, arms-length 
negotiations between the United States and plaintiffs. It not only 
resolves litigation over the U.S. government's management of hundreds 
of thousands of individual Indian trust accounts, but also addresses 
one of the root causes of the trust accounting controversy--namely, the 
fact that tens of thousands of individual accounts have proliferated 
through the years due to the continued ``fractionation'' of Indian 
ownership interests in land. This has led to large and growing expenses 
related to the tracking of small trust accounts, opportunities for 
trust accounting errors, and the unavailability of highly fractionated 
lands for productive uses.
    This negotiated agreement lays out a path for the responsible 
management of Indian trust assets in the 21st century. The agreement 
strengthens the trust relationship between the United States and our 
Native American citizens, a relationship that has at times been fraught 
with challenges but a relationship which the members of this Committee 
have long sought to develop into one of mutual respect and 
understanding. In this statement, I will briefly describe the 
components of the proposed Settlement and related steps being taken by 
the Department to improve our management of Indian assets. I am 
accompanied today by Hilary Tompkins, the Solicitor for the Department 
and the first American Indian to hold that post. Ms. Tompkins 
participated actively in the negotiations, which I led on behalf of the 
Secretary of the Interior.
Accounting and Trust Administration Claims Settlement
    The first part of this settlement agreement resolves claims related 
to the class-action lawsuit brought by the plaintiffs in Cobell v. 
Salazar. The case centers around the U.S. government's accounting of 
over three hundred thousand individual American Indian trust accounts. 
The Settlement would resolve not only the plaintiffs' claims for an 
historical accounting for funds that the government holds in individual 
American Indian trust accounts, but also all claims associated with the 
management of these trust funds and the underlying trust assets 
(consisting of land and resources that are held in trust for individual 
Indian members of the plaintiff class). The Settlement addresses all 
existing and potential trust-related claims that the plaintiffs may 
have against the United States to date, and thus brings final closure 
to this long and difficult issue.
    Under the terms of the Settlement regarding trust management and 
accounting issues, approximately $1.4 billion would be distributed to 
the class members, which consist of certain American Indians and Alaska 
Natives, as defined in the Settlement. Each class member with an 
historical accounting claim will receive $1000 and class members may 
also receive additional funds related to trust management claims under 
a formula set forth in the settlement agreement. By addressing alleged 
mismanagement as well as accounting-related claims, this settlement 
fund will fully resolve all potential claims by individual class 
members and avoid all further ``look-backs'' regarding prior fund 
accounting and trust management issues.
    Because the question has come up frequently in discussions about 
this Settlement, I want to briefly address the issue of attorneys' ' 
fees. The Settlement provides a fair structure for determining the 
proper amount of attorneys' fees. Under that structure, attorneys' fees 
would be paid out of the $1.4 billion settlement fund (and so would not 
require additional taxpayer funds), and would be in an amount which the 
court will decide. Under the Settlement, the plaintiffs have agreed 
that they will not ask the court to make an award outside the range of 
$50 million to $99.9 million to compensate plaintiffs' attorneys for 
work they have performed since the case began more than 13 years ago. 
Individual Indians may object to any such requests, and the United 
States believes that as much of the fund as possible should go to the 
individual class members. If the judge awards a figure within that 
range, the parties to the Settlement have agreed that they will not 
appeal the court's determination. The Settlement provides that when the 
federal judge makes a decision regarding the appropriate level of 
attorneys' fees, he will have before him the plaintiffs' attorneys' 
actual records of the time they spent working on this case.
    The plaintiffs' attorneys also have the right under the Settlement 
to ask the court to approve payments for work performed after the date 
of the Settlement, based solely on attorney hours and actual billing 
rates and actual expenses and costs incurred, up to a capped amount of 
$12 million. The government and individual Indians may object to any 
such requests, and the court may award less than the amount requested. 
Negotiating for payments of attorneys' fees is a typical part of the 
resolution of class action cases, and the approach taken in this 
Settlement is a fair and reasonable one.
Correcting Fractionation
    The second part of this Settlement contains provisions designed to 
address the ``fractionation'' issue that is one of the root causes for 
the allegations included in plaintiffs' claims, and which needs to be 
addressed in order to reduce potential liability for Cobell-type claims 
in the future. This problem consists of the continued proliferation of 
new trust accounts as land interests held in trust for individual 
American Indians continue to subdivide (or ``fractionate'') through 
inheritance processes. The Settlement and legislation provide for a $2 
billion fund for the buy-back and consolidation of fractional land 
interests. The land consolidation fund addresses an historic legacy of 
the General Allotment Act of 1887 (the ``Dawes Act'') and other related 
allotment statutes, which divided tribal lands into parcels of between 
40 and 160 acres in size, allotted them to individual Indians, and sold 
off remaining unallotted Indian lands. As original allottees died, 
their intestate heirs received equal, undivided interests in the 
allottees' lands. Today, it is not uncommon to have hundreds of Indian 
owners for one parcel.
    The result of the continued proliferation of thousands of new trust 
accounts caused by the fractionation of land interests through 
succeeding generations is that millions of acres of land continue to be 
held in such reduced ownership interests that only a small percentage 
of the individual owners derive a meaningful financial benefit from 
their ownership. Indeed, as of September 30, 2009, there were 
approximately 140,000 tracts of land owned by individual Indian 
allottees and more than four million interests. It has been estimated 
that these four million interests will expand to eleven million 
interests by the year 2030 if the actions contemplated in this 
Settlement are not taken. This situation creates more harm than good 
for the individual owners, the tribes and the federal government. The 
proliferation of individual interests creates obligations for the 
Department to undertake a detailed accounting for tens of thousands of 
very small accounts, thereby triggering both expense and opportunity 
for errors such as those alleged in the Cobell litigation. In addition, 
because there are multiple owners of land, often with individuals 
having very small shares, it typically is impossible to obtain consent 
from the owners regarding steps to ensure the productive use of such 
lands. As a result, in too many instances, tribes find economic 
development efforts stymied by their inability to utilize heavily 
allotted tracts of land for much needed energy, commercial, and 
agricultural development.
    Under the provisions of the Settlement for land consolidation 
efforts, the Department would use a $2 billion fund for the buy-back of 
fractional land interests. The Department would use existing programs 
and law to make these acquisitions, with additional authority that 
would be provided under the proposed settlement legislation for the 
conveyance of interests held by persons who cannot be located after 
engaging in extensive efforts to notify them and locate them for a 
five-year period.
    Because the value of many highly-fractionated interests in land 
will be very small, and owners of those interests may not be inclined 
to cash out their small interests, the Settlement sets aside up to $60 
million for use in incentivizing the sale of fractionated interests. 
More specifically, contributions can be made on behalf of sellers of 
fractionated interests to an existing non-profit organization that 
provides scholarships and other support for educating American Indians 
and Alaska Natives.
Long-Term Trust Reform
    To address the future of Indian trust management, on December 8, 
2009, Secretary Salazar signed a Secretarial order to establish a five-
member national commission to evaluate ongoing trust reform efforts. 
The commission will make recommendations on the future management of 
individual trust account assets and the need for comprehensive auditing 
of these operations. While the Department has made significant progress 
in improving and strengthening the management of Indian trust assets, 
our work is not over. The Commission will make recommendations 
regarding how to improve trust management services on a going-forward 
basis, such as recommendations regarding the appropriate roles of 
various Interior agencies including the Office of Special Trustee and 
the Bureau of Indian Affairs.
Conclusion
    I hope you will help us to secure swift enactment of the necessary 
legislation. As the members of this Committee are aware, this 
Settlement is a starting point, not an ending point. It is time now to 
move beyond the litigation and to commit to working cooperatively with 
American Indian and Alaska Native communities to address education, law 
enforcement, and economic development challenges. Moving forward, 
Secretary Salazar and I are committed to conducting government-to-
government consultation with tribes to make sure that this Settlement 
is fully understood by the people who will be most impacted by it and 
to seek vital tribal input on, and assistance with, implementation of 
the land consolidation component of the Settlement. With this 
Settlement we will turn the page on a dark chapter in Indian Country 
and begin to move forward, together, towards our common goals.
    Thank you for the opportunity to appear before you today. I look 
forward to answering your questions.
                                 ______
                                 
    The Chairman. Thank you, David. Mr. Perrelli.

   STATEMENT OF HON. THOMAS J. PERRELLI, ASSOCIATE ATTORNEY 
     GENERAL, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, D.C.

    Mr. Perrelli. Good morning, and thank you, Chairman Rahall, 
and Ranking Member Hastings, and other Members of the 
Committee. The litigation, known as now Cobell v. Salazar, has 
lasted 13 years, and has been an extraordinarily important 
issue for this Committee, and for the United States, and it has 
cast a shadow on the United States nation to nation 
relationship with tribal governments and their members.
    We at the justice department view the December 7th 
settlement as historic, and we think that we are given a choice 
of now ending that litigation finally or returning to the 
courtroom, and we think the opportunity presented by the 
settlement is worth seizing, because we think it is fair to the 
Plaintiffs, and responsible for the United States, and provides 
a path as Mr. Hayes said for moving forward in the future.
    We very much welcome the opportunity to answer questions 
and dispel some of the misconceptions about the settlement. As 
has already been discussed, the settlement contains many key 
elements that Members of Congress and both parties have sought 
to address in prior efforts to resolve this matter.
    It resolves historical accounting claims, thereby providing 
a $1,000 check to be sent to each member of the class, and 
bringing the government and each holder of an individual Indian 
money account into agreement on the balance of each account.
    And I would say that that piece of the settlement, and the 
language that was quoted on the prior panel, addresses just 
accounting claims, and not the trust mismanagement claims. So I 
don't think there is any uncertainty there.
    Second, the settlement also addresses trust administration 
or mismanagement claims. Those are claims that allege over the 
years the government has mismanaged hundreds of thousands of 
acres of land and millions of dollars, including proceeds from 
them that it holds in trust for individual Native Americans.
    Over the last 14 years, these claims have long been linked 
with this lawsuit. Much of the litigation over the last 14 
years has been about what has been in the lawsuit, and what has 
been out of the lawsuit.
    Many of the efforts in Congress, including the efforts that 
came out of the One Hundred and Ninth Congress, sought to 
finally resolve both the accounting claims and potential trust 
mismanagement claims altogether, because it was recognized, I 
think, by everyone, that bringing these matters to final 
resolution was a benefit to everyone, and that if we were left 
with the specter of years of litigation about mismanagement 
claims, we really would not have achieved very much.
    Under the settlement, the complaint will be amended to make 
clear that the trust administration claims are part of the 
case, and each and every Plaintiff in the class will receive a 
payment based on a formula, reviewed and approved by the Court.
    The payments, in addition to the thousand dollars for the 
historical accounting for that class, will start at $500, but 
will range up in some cases to hundreds of thousands of dollars 
for individual Native Americans.
    All told, between the accounting and the trust 
mismanagement claims, the Plaintiff class will be receiving 
approximately $1.4 billion. In contrast to what was intimated 
in the last panel, there is no reversion of that $1.4 billion 
to the government.
    That $1.4 billion will go to class members, to the extent 
that there may be unclaimed funds, there is a provision that 
allows that to go for scholarship funds.
    Finally, as Mr. Hayes said, there is a framework for 
addressing the problem of fractionated lands and a path forward 
so that we are not in this position again in five years, in 10 
years, and 15 years, and 50 years.
    We very much appreciate the opportunity to answer questions 
about the settlement, and we have tried to be as transparent as 
possible from the outset of this process. As soon as the 
settlement was reached in December of 2009, the Secretary, and 
Deputy Secretary, and the Solicitor of the Department of the 
Interior, held or how a call with tribal leaders across the 
Nation to inform them about the settlement.
    The Department of the Interior and I have participated in 
hearings before the Senate Indian Affairs Committee, and sat 
before tribal leaders at the National Congress of American 
Indians, and answered all questions that were raised, and 
Federal representatives appeared before other tribal 
organizations.
    And I know that Ms. Cobell and her counsel have engaged in 
similar outreach. Going forward, when we talk about notice to 
class members, and the opportunity for even more outreach, what 
we have done to date is really only the beginning.
    Once the legislation passes, and the settlement is filed, 
formally filed with the Court for preliminary approval, that 
will trigger the notification provisions of Rule 23, and will 
result in a robust notice, and we include that individual 
letter sent to class members that will provide an explanation 
of the settlement.
    And then we envision significant outreach, including radio, 
television, and other means to ensure that there is a maximum 
amount of information to all class members so that they will 
have the opportunity to consider.
    And then they will be able to go before the Judge and 
object to the Judge, and consider opting out, and object to 
particular parts of the settlement, but through the ordinary 
process that occurs with class actions.
    So we think that there are going forward going to be 
enormous opportunities for class members to review and comment 
on the settlement. Thank you to the Committee for this hearing, 
and we look forward to answering your questions.
    [The prepared statement of Mr. Perrelli follows:]

     Statement of Thomas J. Perrelli, Associate Attorney General, 
                       U.S. Department of Justice

    Good morning and thank you to Chairman Rahall, Ranking Member 
Hastings, and the other members of the Committee. The litigation that 
is today known as Cobell v. Salazar has lasted thirteen years, and over 
those years it has been an important issue for this Committee, its 
members, and their constituents.
    That interest is well-placed, as Cobell v. Salazar is one of the 
largest class actions ever brought against the U.S. government. What 
began in 1996 has seen 7 full trials constituting 192 trial days; has 
resulted in scores of judicial decisions; has been up to the Court of 
Appeals ten times; and has been the subject of intense, and sometimes 
difficult, litigation.
    Thanks in large part to the direction and support that the members 
of this Committee have provided over the years, on December 7, Mrs. 
Cobell's attorneys and the United States signed a settlement that would 
turn the page on that history.
    The settlement, which will require legislative and judicial 
approval to become effective, is fair to the plaintiffs, is responsible 
for the United States, and provides a path forward for the future. The 
settlement contains many of the key elements that Members of Congress 
have sought to address in prior efforts to resolve this matter. First, 
the settlement resolves the plaintiffs' claims for an historical 
accounting. The resolution on this issue, like other aspects of the 
settlement, is important both for the past and the future. It is 
important for the past, because it will result in a $1,000 check being 
sent to each member of the class. And it is important for the future, 
because it brings the Government and each holder of an Individual 
Indian Money account into agreement on the balance of each account--
something that has been contested since this litigation began.
    Second, the settlement resolves what have been called the ``trust 
administration'' claims. Such claims allege that over the years, the 
Government has mismanaged the hundreds of thousands of acres of land 
and millions of dollars--including proceeds from those lands--that it 
holds in trust for individual Native Americans. Although to date few 
such claims have been brought, allegations of trust mismanagement have 
remained a possible threat to rebuilding the long-term relationship 
between the Department of the Interior and Native Americans. There has 
always been concern that, even if the Cobell case settled, it would 
simply be followed by a slew of mismanagement cases that would continue 
the acrimony. Under the settlement, the plaintiffs will amend their 
complaint to add these claims, which will then be resolved. Each and 
every plaintiff in this class will receive a payment, in addition to 
the $1,000 check for the accounting claims, based on a formula to be 
approved by the Court. And the Department of the Interior will know 
that it has put those trust administration claims, too, behind it.
    Between the accounting claims and the trust administration claims, 
the plaintiff class will be receiving approximately $1.4 billion.
    Finally, the settlement provides a framework through which the 
Department of the Interior can address one of the principal factors 
that has led down this path. The trust system that the Government 
manages has become increasingly complex over the years, as lands that 
were jointly owned by a small handful of individuals many decades ago 
are now often owned by several times that number, as the individual 
owners have passed away and left those interests to be divided among 
their heirs. Much of this land, divided up among sometimes hundreds of 
owners, has severely limited economic potential.
    To address this problem of fractionated lands, the settlement 
contributes additional funds to a land consolidation program that 
provides critical benefits to every party. For individuals who own a 
fractional amount of land and wish to sell it, it will put money 
directly into their hands. The tribes that will ultimately own these 
newly consolidated interests will have productive assets that they can 
finally put to beneficial economic use. And over time, the Department 
of the Interior will reduce the hundreds of thousands of small accounts 
that it has been managing at a highly disproportionate cost.
    As I mentioned, this settlement is not final. It requires 
authorization from Congress and approval from the court. We hope that 
both will happen quickly.
    The legislation that is required to implement this settlement 
accomplishes a number of things. Among other things, it ensures that 
the United States District Court for the District of Columbia, which 
has been handling the litigation, can continue to assert jurisdiction 
over it after the plaintiffs amend their complaint. The legislation 
also sets up two funds within the Treasury of the United States, 
permits the court to certify a single class of trust administration 
claims, and--much like earlier efforts to resolve Cobell--authorizes 
the Secretary to administer the land consolidation program that is 
critical to the settlement. We believe that Congress should move 
forward with this legislation as quickly as possible.
    The settlement also requires approval from the court. Once 
legislation has passed, the parties will present their proposed 
settlement to the court, and will begin the process of explaining it to 
class members across the country. Those individuals and others will 
have an opportunity to review the settlement and express their views on 
it, and the court will ultimately decide whether it represents a fair 
resolution of the claims. We believe that this formal process of 
explaining the settlement to the class, which the court does not have 
authority to initiate until after legislation passes, will be an 
important opportunity to provide information and answer questions--and 
for the court to ensure that the settlement meets the legal 
requirements of fairness to the class.
    In the meantime, the parties are already engaged in extensive 
active outreach to explain the Settlement, both to the individual 
Indians who are the members of the plaintiff class in the litigation 
and to Indian tribes. Once the Settlement was reached in December 2009, 
the Secretary, Deputy Secretary, and Solicitor of the Department of the 
Interior held a call with tribal leaders across the nation to inform 
them of the Settlement and to answer their questions, followed by a 
widely-publicized hearing before the Senate Indian Affairs Committee. 
Representatives of the government also recently appeared before the 
National Congress of American Indians to answer questions and provide 
information on the Settlement. Similarly, federal representatives have 
appeared before other tribal organizations to provide information 
regarding the Settlement. Mrs. Cobell and the plaintiffs' counsel are 
engaged in similar outreach.
    Throughout our discussions with the plaintiffs, we have been guided 
by two principles. First, we wanted true peace for the parties. We 
wanted to turn the page on history. The resolution of the accounting 
and trust administration pieces of this litigation will do that. And 
second, we wanted to put Interior on a new path for the future, and 
give it tools to address some of the underlying conditions that have 
contributed to its challenges. The land consolidation program will do 
that.
    This settlement is a successful resolution for Native Americans, 
and for all Americans, and I hope that it will receive swift approvals 
so we can bring the litigation fully to an end. We look forward to 
working with the Committee to move the necessary legislation forward, 
and I look forward to your questions.
                                 ______
                                 
    The Chairman. Thank you both for your testimony. I would 
like to ask either one of you a question that I raised this 
morning in our Committee Chair meeting and discussing this 
hearing today, and the overall issue that we are addressing.
    And there was consternation raised among the appropriators, 
needless to say, because CBO has scored this settlement, and my 
question to either or both of you really would be can you help 
Congress identify funds that we can help pay for this 
settlement?
    Mr. Hayes. My understanding, Mr. Chairman, is that we are 
having discussions in the Administration on that point. This is 
an unusual case, in that the judgment fund is available for 
this purpose
    The CBO scoring is in--and I am not a budgeteer, I am happy 
to report, and so I don't understand the vagueness of the 
scoring process. Normally when you have a judgment fund 
situation, you don't have this issue arise, but I can assure 
you, Mr. Chairman, that we are having intense discussions with 
the White House and with OMB, and we will be happy to get back 
to you on that very shortly.
    The Chairman. That would be most helpful, David. Let me 
continue with you then, David, and ask you a question about the 
$2 billion fund that expires at the end of 10 years, with any 
remaining funds, of course, returning to the General Treasury. 
Is that correct?
    Mr. Hayes. Yes, Mr. Chairman.
    The Chairman. What is the rationale for not depositing any 
remaining funds into the education fund, which is also 
established by the proposed settlement agreement?
    Mr. Hayes. We anticipate, Mr. Chairman, that these funds 
will all be spent by buying back fractionated interests. It is 
our intent actually working close with once we get approval 
here, working closely with the tribes, and prioritizing the 
efforts to accelerate those buy backs.
    We would like to have them--most of them occur in the early 
years. We don't see this program going out 10 years at all. The 
$2 billion, we think, is roughly sized to potentially buy back 
most of the parcels that have 20 or more owners.
    But when you get into a fractionated land tracts that have 
anywhere from 5 to 20, all of a sudden, you are getting into 
the likely costs of that buy back being well in excess of $2 
billion. So what we see is this is going to make a huge dent in 
the problem, but it is not going to resolve the problem.
    The Chairman. Could you please explain why you think a 
formula with an opt out clause is more appropriate than an 
administration option with the resolution of the trust 
administration claims?
    Mr. Hayes. Let me defer to the lawyer here on that one if 
you don't mind, Mr. Chairman.
    The Chairman. Sure.
    Mr. Perrelli. There was discussion earlier about a 
streamline process for claimants, and I think we view the class 
action mechanism as the streamline process to give individual 
Native Americans funds recovery for potential trust 
administration claims.
    The opt out would put them in the exact same place that 
they would be otherwise today with respect to those claims, 
claims that to date that very few have been brought. I knew 
that there was a question earlier about prior examples. There 
are very few examples of these kinds of claims being brought.
    So we think that this mechanism through the settlement that 
we have created is that streamline means to offer some measure 
of compensation to individuals. Otherwise, they can choose to 
go to court as they can today.
    The Chairman. Thank you. Mr. Hastings.
    Mr. Hastings. Thank you, Mr. Chairman. You heard the 
testimony of the prior panel, and several Members, including 
me, at least raised the issue of attorneys' fees. My question 
to you is that we could not find it on the website, the 
settlement, or the documents of that, and you responded that 
there was an agreement.
    We haven't seen it, and so would you provide that to us, 
the documents specifically regarding the settlement as to 
attorney fees, and how those were derived?
    Mr. Perrelli. Yes, we will, and just for the record, it 
indicates that the parties will litigate between $50- and $99.9 
million for past attorneys' fees, and we are happy to provide 
the documents.
    Mr. Hastings. OK. Good. How soon can we expect that?
    Mr. Perrelli. We can get it to you today.
    Mr. Hastings. OK. That would be fine. The next question I 
have is that you heard again the prior panel, and the prior 
panel was suggesting that this is a big step forward.
    But there just needs to be more transparency and 
understanding of what this settlement agreement means to 
everybody. Mr. Grijalva asked a question, I think, to Mr. 
Nunez, is the issue transparency or unanimity, and I think the 
response was both.
    You are suggesting, OK, let us pass this, and then we will 
have outreach. How do you reconcile the differences of opinion 
on that?
    Mr. Hayes. I think, Congressman, that is not quite the 
dichotomy. We are engaged in outreach, and we will engage in 
more outreach. I should say that at the Department of the 
Interior that we have received enormous positive feedback about 
this settlement from Indian Country.
    No doubt there are some folks--and you had a couple here on 
the panel who are not happy with the settlement, or who 
question it. I firmly believe that you will not have unanimity 
on anything like this.
    We believe that there is enormous interest in Indian 
Country in resolving this, and enormous credibility with the 
Plaintiff class representatives. Elouise Cobell and her 
representatives, and their attorneys, have enormous credibility 
in Indian Country, because they know how hard they have worked 
in this matter for the last 13 years.
    I hope and think that we are fresh blood, in terms of the 
Department of the Interior. We have not been involved in the 
past, and we have come at this from a fresh look, and I think 
we have some credibility.
    We will continue to work, and I think your hearing here has 
been very helpful, and thank you for holding it, in terms of 
continuing to provide an opportunity for us to explain some of 
this, and we will.
    And we will be happy to do more outreach. I think the point 
that Tom just mentioned is important though. There is a 
judicial process here. The Judge has to approve--has a fairness 
hearing basically, that will resolve a number of these 
questions.
    And then once if he says this is a fair and appropriate 
settlement from a judicial perspective, then the class action 
notice processes start, and we are very anxious to use every 
mechanism available to make sure that everyone in Indian 
Country who wants to understand this fully, fully understands 
their rights, their opportunities, to opt out, to opt in, 
whatever.
    But we can't accelerate that until we continue through this 
process and then we have the Judge approve the settlement in 
the fairness hearing.
    Mr. Perrelli. And if I can just clarify. What we will 
happen is that once legislation is enacted, and the settlement 
goes before the Judge, he will preliminarily approve, which 
will then trigger all of the notice to individual class 
members, and all of the outreach that is contemplated by the 
agreement.
    People will have the opportunity to file objections, raise 
concerns, and then we anticipate a significant fairness hearing 
some months down the road in front of him.
    Mr. Hastings. Well, all of that is after the fact, and 
Congress has the responsibility first. Now, I think that is 
self-evident, although we have not seen any legislation. So we 
don't know exactly what--I am presuming that it is the 
settlement agreement.
    But my point is simply is that this hearing was designed to 
bring out differing views, and different observations on this 
settlement agreement. I think everything that I have heard is 
that this is a very, very big step forward.
    It needs to be addressed, but it needs to be understood, 
and I think the testimony was pretty clear that Indian Country 
in general wants to know more about it before this legislation 
is passed, and our responsibility as Members of Congress 
obviously is to listen to the different views of our 
constituents, because we represent you people.
    I concede that you did a lot of work working on this. I am 
not arguing with that at all, but there is--and there certainly 
seems to be a little different approach, and that is why I was 
asking, but what I am unfortunately hearing is, well, let us 
pass this and we will take that next step.
    And so I hope that I didn't quite hear it that way, but if 
your outreach is aggressive, I am certain that we will hear 
from Indian Country in general that this process has moved 
forward.
    Mr. Hayes. And thank you, Congressman, for those comments, 
and I appreciate the chance to clarify once again. The day of 
the settlement, we were on a conference call with scores of 
tribal leaders around the country explaining the settlement.
    We have tribes visiting our Department as you well know as 
they visit your offices on The Hill week in and week out. We 
have been doing extensive discussions with many, many tribes.
    Just last week, both Hilary Tompkins and Tom Perrelli spent 
a couple of hours in front of a panel with the National 
Congress on American Indians, responding to all comers, all 
questions, about this settlement.
    There are important meetings next week that have already 
been alluded to. We will continue to do that. We appreciate the 
fact that it is very important now to answer these questions, 
and we thank you for this opportunity to hear the issues that 
we heard today, and to respond to them, and to have the 
opportunity for a dialogue with this important Committee on the 
subject.
    Mr. Hastings. OK. I would just conclude that I appreciate 
that, and I encourage you to continue your outreach. I suspect 
since we have the responsibility here to pass this legislation, 
that we will hear back from Indian Country as to the success of 
that outreach, and I think that is probably a fair way to do 
it. Thank you.
    Mr. Faleomavaega. [Presiding]. Thank you for your 
testimonies, Secretary Hayes, and also our Deputy Attorney 
General, and Ms. Tompkins. Welcome. It is a real pleasure and 
certainly I am sure that throughout Indian Country the 
tremendous pride that we finally appointed out first Solicitor 
General who is of Native American ancestry.
    I believe that you are a member of the Navajo Nation?
    Ms. Tompkins. Yes. A proud member of the Navajo Nation, 
yes.
    Mr. Faleomavaega. 250 thousand strong. That is pretty good. 
Secretary Hayes, you mentioned in your testimony that you had a 
copy of a draft bill that the Administration is proposing? Did 
I read that correctly in your testimony?
    Has the Administration developed a proposed bill relating 
to this issue of this settlement?
    Mr. Hayes. Yes, the Administration has, and the President 
sent it up to the leadership a week or two ago.
    Mr. Faleomavaega. So we have it here among the Members?
    Mr. Hayes. As far as I know.
    Mr. Faleomavaega. I think Mr. Hastings says that he has not 
received a copy. Certainly I have not received a copy.
    Mr. Hayes. Well, we will resolve that, Congressman 
Hastings. We will get it to you.
    Mr. Faleomavaega. Yes, I think that would be a tremendous 
help. How many were involved in these negotiations? And I can 
understand that you must have gone through some grueling days, 
and weeks, and months, in finally reaching a settlement in 
December.
    But I am just curious. How many were involved in these 
negotiations? Was it just between Ms. Cobell and her attorneys, 
and the officials of the Department of the Interior?
    Mr. Perrelli. There were Ms. Cobell, and her attorneys, and 
there were attorneys, consultants, as well as maybe up to 10 or 
11 folks from the Departments of the Interior and the 
Department of Justice. We filled a big conference table, or 
two, and more.
    Mr. Faleomavaega. So primarily it was just Ms. Cobell and 
her attorneys, Plaintiffs attorneys, and officials from both 
the Department of Justice and the Department of the Interior; 
is that correct?
    Mr. Perrelli. That is correct.
    Mr. Faleomavaega. OK.
    Mr. Hayes. And, of course, their attorneys represent the 
class. They have been certified. The class has been certified. 
So that they are the appropriate and official representative of 
the hundreds of thousands of individual Indians who hold 
accounts.
    So we thought it appropriate since we have been negotiating 
with them since they brought the litigation as a class.
    Mr. Faleomavaega. How did you arrive at the $3.4 billion as 
the price settlement for this class action suit? I believe it 
is $1.4 billion for the class members, and was it $2-some-
billion for another portion of this? How did you arrive at this 
figure?
    Mr. Perrelli. And I will let Mr. Hayes talk about the $2 
billion.
    Mr. Faleomavaega. The reason why I raise this issue is that 
this is one of the most contentious issues. Over the years, as 
I can remember, not only was there tremendous disagreements 
among the members or in the Congress, both House, and even 
within the Administration.
    In fact, we even I think appropriated over $10 million 
through an auditing company or a firm to find out exactly what 
was involved in the accounting, and even they could not come 
out with it after spending over $10 million to provide some 
kind of an accounting. But I am just curious. How did you 
arrive at this?
    Mr. Perrelli. With respect to the $1.4 billion, it was in 
negotiations, and so certainly a negotiated amount. As we 
looked at it, we looked at quantifications of the case made 
over time.
    The Court had previously suggested a number, approximately 
450 million for the accounting portion of the case. The 
Plaintiffs at different times had argued for significantly more 
money.
    We also looked and made our best estimate to look at the 
entire range of accounts and potential mismanagement claims. We 
had the benefit of looking at settlements in the tribal trust 
area, which gave us some information about the potential size 
of these claims, and we did our best to come up with a 
reasonable settlement amount, but it was certainly a 
negotiation.
    Mr. Faleomavaega. Well, what happened through all these 
years with the--well, in terms of--well, you are supposed to 
have some kind of a computer type accounting system. That was 
not done properly, I suppose.
    But I am just curious. In terms of the numbers, this is 
what was agreed upon? Because it seems to be a lot higher that 
in my humble opinion over the years on the numbers that were 
being thrown around. But $3.5 billion is somewhat a little low 
in my opinion. Secretary Hayes.
    Mr. Hayes. Yes, if I can just make a couple of 
observations.
    Mr. Faleomavaega. Please.
    Mr. Hayes. I think that through the years of this 
litigation that this Congress has supported extensive work in 
terms of accounting work at the Department of the Interior 
through the Office of the Special Trustee, and the Office of 
Historical Accounting, that has provided enormous information, 
and provided the basis for good discussion about the status of 
these accounts.
    So it is not as though these years of litigation have been 
for naught. There has been much more information developed over 
the years. I think that has been very helpful.
    I will say that this was a very tough negotiation. The same 
Plaintiffs' lawyers who have been appropriately aggressive from 
day one, were appropriately aggressive in our negotiations.
    And I am somewhat offended by the suggestion that there was 
some collusion here between the United States and the 
Plaintiffs, particularly when to your point the settlement 
amount is significantly less frankly than this Congress has had 
before it, and that prior Administrations have looked at for 
settlements.
    I view that as a sign of good, hard and appropriate 
negotiating on both sides, and I think the settlement is fair 
and the Plaintiffs do as well, but I encourage you to ask the 
same question of the Plaintiffs' counsel.
    Mr. Faleomavaega. I just have one more question to Ms. 
Tompkins. As you have heard previously from Professor Monette, 
in terms of the legal process, and whatever the legal 
justifications, does this mean that once this settlement is 
done with, with Congressional legislation to put the seal on 
it, that there could be no more class action suits concerning 
this matter.
    Ms. Tompkins. If this settlement is approved by Congress, 
and ultimately by the Court, it will resolve the claims that 
are released in this settlement agreement. So it will resolve 
past claims for historical accounting, past claims for 
mismanagement of funds and assets.
    So those will be resolved, but moving forward, potential 
new claims could arise in the future, and that will always be 
the case. So, those types of future claims would not be 
affected by this settlement agreement.
    Mr. Faleomavaega. My time is up. The gentlelady from 
Wyoming.
    Mrs. Lummis. Thank you, Mr. Chairman, and I would just 
comment that I had a law school professor named Joel Selig, who 
was Department of Justice, Jimmy Carter era, trained, and was 
an expert in class action lawsuits.
    No University of Wyoming Law School graduate should have as 
much class action lawsuit experience as we did, but it was all 
because of Joel Selig. So I highly recommend his particular 
expertise in implementing Rule 23 litigation, and I want to ask 
a couple of questions.
    Deputy Secretary Hayes, could you describe a little bit 
more what arm's-length interaction your Department had with 
those folks whose claims will be extinguished?
    Mr. Hayes. Well, our negotiations were with the class 
representatives, and with their lawyers. They started last 
summer, early in the summer, and we had intense discussions 
throughout the summer and into the fall, leading to this 
settlement.
    Now, I welcome you to ask the next panel, and Elouise 
Cobell, in terms of how they communicated with the class. As 
you well know from your training at the University of Wyoming 
Law School, one of the advantages of a class action is that a 
court has sanctioned a class, and class representatives, and 
counsel for the class, to speak on behalf of the class and, of 
course, they have done that eloquently for the last 13 years, 
and those are the folks that we dealt with.
    Mrs. Lummis. I would like to follow up. You stated that the 
settlement addresses all existing and potential trust related 
claims that the Plaintiffs may have against the United States 
to date.
    What kinds of yet to be litigated claims are being settled, 
and will it be clearer to Plaintiffs in accepting the 
settlement that they are extinguishing yet to be litigated 
claims?
    Mr. Hayes. Well, I appreciate you raising that. That may be 
a misstatement in my testimony. I mean, we are not resolving 
claims for future--that start tomorrow, or the day after the 
settlement.
    Mrs. Lummis. OK.
    Mr. Hayes. In fact, that is why the Secretary has entered 
an order that would become effective at the time of settlement 
at the request of the Plaintiffs. So that we make sure that 
going forward that we learn the lessons that we have learned 
over the last 13 years, and take a fresh look, and make sure 
that we don't make these mistakes again.
    And that is also why we are excited about the land 
consolidation program, because it will minimize both the 
expense of these individual actions, but also the opportunities 
for mistake, and at the same time, it puts money in the pocket 
of individual Indians.
    Mrs. Lummis. OK. Good to know. Thank you very much. In 
visiting with the tribes in Wyoming, they gave me two primary 
messages. One was that there is an absolute need to settle this 
matter, and I am so pleased that this hearing is being held, 
because some settlement proposal has come to fruition.
    And also that many individuals throughout Indian Country 
have questions about the terms and the precedence setting 
impacts of this. What kinds of steps does the Department plan 
to take to educate tribal members on the full scope of the 
settlement?
    Mr. Hayes. Congresswoman, we described a little bit before 
what we have done to date, in terms of our initial outreach to 
the tribes as a group with the Secretary, and with the outreach 
through the National Congress on American Indians, and through 
our individual tribal outreach.
    We had a Senate hearing before the turn of the year, and we 
have this hearing. But I take seriously the points of 
Congressman Hastings, and others here. We will redouble our 
efforts right now to make sure that there is good information 
out there about this settlement.
    This hearing has demonstrated that there is confusion in 
some quarters, and some misinformation, and that does no one 
any good. We are confident that this is an excellent 
settlement, and we will make ourselves available, and 
aggressively put ourselves out there to communicate that as 
forcefully and as frequently as we can.
    Mrs. Lummis. Thank you, and would the Chairman indulge one 
more question, Mr. Chairman?
    Mr. Faleomavaega. Sure. Go ahead.
    Mrs. Lummis. Thank you. Mr. Perrelli, one specific question 
that was asked by a tribal leader in my State was whether or 
not individual payments under the settlement would be taxable.
    And also whether it would affect formulas for other Federal 
payments, such as TANF? Can you respond to that?
    Mr. Perrelli. And I think the settlement itself doesn't 
change the rules that would otherwise apply to those payments. 
So I think that there are--and I will get myself out of my 
depth quickly if I get too far into tax issues, and this may be 
the kind of thing that a written follow-up to you may be 
helpful in talking about the general rules that would apply.
    Mrs. Lummis. That would be great, and the tribes in Wyoming 
would really appreciate it, and I will be sure to pass it on. 
Thank you, Mr. Chairman.
    Mr. Faleomavaega. The gentleman from New Mexico.
    Mr. Heinrich. Thank you, Mr. Chairman. First, welcome to 
all of you. I had an opportunity to work with Solicitor 
Tompkins when we were both working for the State of New Mexico, 
and have nothing but high regard for her legal mind.
    And I want to sort of direct my first question to both Mr. 
Hayes and Mr. Perrelli. From the point of view of your two 
agencies--and I don't want to sidetrack us too much, but I want 
to ask about the tribal trust lawsuits that are also currently 
pending in the Federal Courts.
    And they are based on many of the same problems that are 
inherent in the Cobell case. These are with tribes as 
plaintiffs rather than individuals, and I just want to ask from 
both of you what are you and your agencies doing to make sure 
that those cases are also receiving the same sort of high level 
of attention and potential for resolve that this case has seen?
    Mr. Hayes. I thank you for your question, Congressman, and 
this is a very important point. There are nearly a hundred 
lawsuits that individual tribes have brought in terms of 
management of their tribal trust assets.
    A few have settled. We have been in discussions with the 
Justice Department about how--pivoting off of this settlement 
with a class of individual Indian account holders--we can get 
many, many more of those tribal cases into a settlement mode.
    That will be our sole attention once we resolve this 
matter. We are looking at budgeting adequate amounts of budget, 
and working with the Congress to ensure that we have the 
support needed to do the fact finding, et cetera, that will 
enable these tribal cases to be settled.
    And we have had some preliminary discussions with the 
Justice Department about some process thoughts to help 
facilitate a fast tracking of the settlement process, and I 
defer to Mr. Perrelli for supplementing that.
    Mr. Perrelli. I have two things. I will first clarify what 
I just said, because the settlement does not deal with the tax 
issues. The legislation that we proposed does deal with the tax 
and benefit issues.
    I am sorry that the Congressman had to leave before I could 
clarify that, but when we send up a copy of the legislation, 
there is a specific provision on the tax and benefits 
implication that I think will be helpful to tribal leaders to 
understand that.
    With respect to the tribal trust cases, they are really the 
next step in this path in trying to bring resolution to all of 
these claims. The Solicitor and I recently sent a letter to 
some of the leaders of the groups that are representing 
significant numbers of the tribes, and inviting them to a 
settlement negotiation in which we would participate 
personally.
    And we envision having that schedule in short order, and 
hopefully beginning a process that will allow us to move 
forward in those cases as we have here.
    Mr. Heinrich. I appreciate both of your responses on that. 
I know that there are at least five cases in New Mexico, with 
the Arapaho Nation, the Hickory, and Mescalero and Apache 
Tribes, and the Pueblos of Zia and Laguna that are all involved 
in related litigation.
    The last thing that I would just do is for Ms. Tompkins. I 
wanted to give you the opportunity if you wanted to address the 
matter that Professor Monette brought up at the beginning, 
where he seemed to characterize your view on an issue, and I 
wanted to give you an opportunity to characterize your own view 
on that.
    Ms. Tompkins. Thank you, Congressman Heinrich. Sure. I 
guess my only comment on that was the question that we 
discussed last night was really--it just reminded me of law 
school and one of those convoluted, arcane questions that you 
would get when a professor was throwing you with easing the 
Socratic method.
    But I did look at the issue, and it is not an issue that 
raises any concern in the settlement agreement. It is about 
some very technical language in the definition part of the 
settlement.
    But it is not a problem. It basically includes the words 
lands and assets in the accounting definition, because that is 
an outgrowth of the litigation. There was a time in the 
litigation when the parties were debating whether or not asset 
statements, descriptions of the land, the underlying land, 
should be in the accounting statements. And so that is just to 
ensure that we are addressing that issue in that definition. 
Thank you.
    Mr. Heinrich. Thank you, and Mr. Chairman, I yield back the 
rest of my time.
    Mr. Faleomavaega. Thank you. I would like to turn the time 
over to our Ranking Member for further questions.
    Mr. Hastings. Thank you very much, Mr. Chairman. I don't 
have any other questions, but it is more of a request, because 
you said, and properly so, that this hearing has been very 
good.
    Generally, hearings engender more questions in the future. 
Surprise. Surprise. You were very kind to me in responding to 
the questions in a two week time period on the letter that I 
sent you.
    What I would ask you is that questions that are given to 
you after this meeting, if you would respond in a like time, a 
two week period, because there was a very tight time period on 
that, and as quickly that we can get these questions--our 
answers back for these questions, that would be helpful.
    So if you could set a goal of responding to whatever 
followup questions, that that response would be within a two 
week period.
    Mr. Hayes. Absolutely, Congressman.
    Mr. Hastings. Great. Great. Thank you very much. Thank you, 
Mr. Chairman.
    Mr. Faleomavaega. Well, I have just one followup question 
to the question from the gentleman from New Mexico. I just 
wanted to get it straight and for the record that there are 
tribes who have already filed lawsuits in the same case matter 
that we are talking about.
    Are you suggesting that we are going to do something to 
disallow them from pursuing their efforts in filing a lawsuit 
in that same case matter?
    Mr. Perrelli. No, not at all. Not at all, Congressman, and 
I apologize for any confusion in that regard. There are 
approximately 99 current lawsuits filed by tribes that are not 
affected by this settlement, and this settlement doesn't 
preclude tribes and tribal governments from filing any action.
    Mr. Faleomavaega. All right. Well, thank you very much. I 
believe we have one more panel here, our third one, and this is 
Ms. Elouise Cobell, and I believe she probably has a couple of 
attorneys that will be attending here. We would welcome her to 
testify now, and for the record, please introduce the attorney 
that is here with you.

  STATEMENT OF ELOUISE C. COBELL, LEAD PLAINTIFF IN COBELL V. 
   SALAZAR, BROWNING, MONTANA; ACCOMPANIED BY MR. WILLIAM E. 
DORRIS, MANAGING PARTNER, KILPATRICK STOCKTON LLP, WASHINGTON, 
                              D.C.

    Ms. Cobell. Yes, I will, and with me today is Bill Dorris, 
one of the Plaintiffs' attorneys, and he will be joining me for 
any comments or questions, and I think it is very important to 
tell this Committee that I didn't bring this case on behalf of 
tribes.
    I brought this case on behalf of over 500 thousand 
individual Indians, and many who I know, and many who have 
suffered from the mismanagement of the Indian trust funds, and 
it is the largest class action lawsuit.
    I was a little taken back by the word transparency. This 
has been going on for 14 years, and we have posted constantly, 
and newspapers have covered it, and over, and over about what 
has happened in this court case.
    And I think that there is much more consensus, as Secretary 
Hayes has stated, in individual Indians knowing about this 
case. I flew in late last night from South Dakota, where I have 
been visiting and swiping my own personal credit card, but 
visiting tribes and individual Indians at tribal locations.
    And I was overjoyed because sometimes you feel that there 
are a lot of Monday night quarterbacks, and you are right down 
to the bottom, and getting ready to make a touchdown, and then 
everybody starts yelling and screaming that you did this wrong, 
and you did that wrong.
    Well, it was overwhelming to me to get out to Indian 
Country and to individual Indians, and not that I haven't been 
out to Indian Country before, because I have traveled extensive 
in Indian Country updating individual Indians on this case.
    But I was extremely rewarded by just looking at the people 
that we represented, and the thank you's, and the appreciation 
that was extended by elderly people, young people.
    And I think where the real confusion really existed was 
with the tribes. The tribal council members would get up and 
talk about, oh, you are going to extinguish your rights in the 
Black Hills, and it was constantly correcting misinformation 
that existed out there.
    That was one of the reasons that I actually started going 
out to Indian Country immediately before Congress approved this 
settlement because of the misinformation, and it was important 
for individual Indians to hear the facts, and as they learned 
the facts, you cannot believe the amount of like personal notes 
that were written.
    And, yes, we want to move forward. We feel that this is a 
stepping stone. We understand that this is not the end all to 
all the problems that exist in Indian Country. This is 
something that has been accomplished, and we feel good about 
this victory. We feel very good about this victory.
    I was very impressed by a young man in Pine Ridge, who got 
up and who had been reading since a young man at the beginning 
of this case, and informed all his family members constantly 
about what this case meant, and what it meant for all 
individual Indians.
    Very bright, and it just overwhelmingly gave me the 
satisfaction of the young people that have been affected by 
this case, and that, yes, they do have rights, and they do have 
a voice.
    And that a lot of times what I heard over the last couple 
of days is that tribal councils do not represent them, and they 
wanted me to make sure that I understood that, because 
sometimes they felt that they couldn't trust tribal councils.
    So they wanted me to understand that, and they told me over 
and over, and as we continued to travel South Dakota, and were 
visiting every single reservation in South Dakota, it has been 
overwhelming.
    There is almost no opposition to this settlement as far as 
individual Indians. I think where we really ran into problems 
is just the total misinformation, and that is why we were out 
there.
    I just would like to say that I was deeply hurt by the 
collusion that the Professor alleged, and I want to tell you 
that these negotiations were tough. They were hard, and I think 
that I did the best job that I could, along with my class 
counsel, to negotiate a settlement.
    I felt that we were owed much more money, but this could go 
on for hundreds of years, and people are dying. Individual 
Indians that are owed this money are dying every single day, 
and we had to reach a time that we put the past before us, and 
get some money out to individual Indians that are owed.
    And so the driving force--and I really would like to thank 
Attorney General Tom Perrelli, and Deputy Secretary Hayes, and 
Solicitor Hilary Tompkins, because at times I wanted to walk 
out of the meetings. I said, no, that we are not accepting 
this.
    And once of the issues that I thought was very, very 
important is for the future. What about the future of our young 
people, and worked very hard for a scholarship fund, and that 
it be dedicated to educating our young people so that we never 
have to go through this again.
    We should never have to go through this abuse that the U.S. 
Government has done to individual Indians, and I just don't 
want that to happen, and I want every individual young person 
to be educated so we don't have to.
    You don't know when I was walking over, and you don't know 
how many times I have testified before the Senate Committee, 
this Committee. It has been numerous. I started with Mike 
Synar, who the Chairman recognized, and he was totally 
incredible.
    He was a person that started it, but probably 20 some 
times--and sometimes it just gets so tiring, because you come 
back again, and it is the same thing, and tribes say more 
consultation, and more of this, and more of that.
    Well, for 14 years, I sat in that courtroom and there was 
not too many tribal people that sat there. But we always had 
great input. My tribe was always behind this. They sent letters 
that said that we are behind this 100 percent.
    So I really wanted to address the situation on the 
outreach, because this outreach has been going on. You know, 
should we have gotten more than $3.4 billion? I would have 
liked to have gotten more than $3.4 billion.
    Like the Chairman, I wanted $280 billion at one point in 
time, but what is reasonable. What is reasonable during this 
time before so many people pass away and die, and die of 
poverty.
    I just came from Pine Ridge. I just came from Rose Bud, and 
things are tough. Things are tough in those situations. You 
can't believe the roads that I traveled. They don't even have 
paved roads.
    So I just want to continue to address that. The other thing 
that I did on my own just trying to get information out because 
of the misinformation. You know, oh, the treaties are being 
violated. Oh, this is going to happen. Oh, there are going to 
be no future claims.
    So I just began issuing Ask Elouise letters. Why don't you 
ask us. We know. Don't go to your tribal chairmen that have 
already said they don't know anything about it. Ask us.
    So I started submitting, and this is the fourth Ask Elouise 
letter, and what we do is we collect questions from all the IAM 
account holders, and they give us questions, and we address 
them, constantly address them.
    And so it is a good way of getting out and really working 
with people. I guess I want to talk a little bit about the 
fifteen-hundred dollars, and the accounting portion you all 
know sitting up here, and everybody has talked about it.
    You have allocated hundreds of millions of dollars for an 
accounting, and there just can't be an accounting. There are 
too many missing documents. The documents are gone. So you 
can't do an accounting. So we had to settle on that.
    And we were asking for $48 billion. The Court came back and 
said, no, I think I will give you $455 million, and then the 
Appellate Court said, well, go back to District Court, and 
said, oh, the government can do any type of an accounting that 
they want.
    They can do an accounting for the low hanging fruit and for 
accounts that have a hundred-thousand or more in them. So it 
wasn't a legal accounting, and you can take as long as you 
want. So we could have been looking at another hundred years 
for an accounting.
    And so those are the reasons that we settled, and those are 
the reasons that we fought on the table with the Department of 
Justice and the Department of the Interior to making sure that 
we got the best settlement.
    It was very important to us to have people understand that 
this would not be taxable. Many of the people that are going to 
be receiving this money are poor. They are poor. Entitlement 
programs are very important to them, and the majority of people 
are on SSI, on TANF, on food stamps, and we wanted to ensure 
that those were not disrupted.
    And so in this settlement agreement, we will not be held 
victims to having those go away. I guess maybe the other areas 
that I wanted to talk about is the trust mismanagement claims.
    The government wanted that. The government wanted it, and 
we sat and talked about them. We actually did a study of how 
many claims had been filed on land mismanagement by individual 
Indians. There wasn't that many.
    And the reason there isn't that many is because people 
don't have the money to sue, and that is why I sued the 
government on behalf of the 500 thousand individual Indians, 
and not one tribe gave one penny for this litigation. Let me 
ensure that item to you.
    I went out and raised money so that we could have justice, 
and so I know how difficult it is, and so I know that 
individuals that want to resolve these trust mismanagement 
claims that they have the option to. They can opt out.
    And I think that has been discussed several times over and 
over that there is going to be a fairness hearing. Everybody 
that doesn't like what is happening, then go to the fairness 
hearing. Be heard, and the Judge will determine.
    The Judge played an active role in this. When he called the 
parties together, he said that you can litigate forever. I 
don't see any judicial solution, because he knew that we had 
been in court for 14 years, and we could be in court for 
another 20 years.
    And we don't want to go to the Supreme Court. I mean, that 
option is open for us, and many of you asked why is there a 
sense of urgency. There is a sense of urgency because we have 
timelines, and I know Bill Dorris will discuss that with you, 
where we lose out on our option to go to the Supreme Court, but 
that is our next option, is to go to the Supreme Court.
    You can do the right thing here. You can act and act 
quickly, and get this approved so that we can get money to 
individual Indians that have been abused for so many years. Let 
us move on. Let us get this behind us, and let us move on, and 
I urge this Congress to take me seriously.
    It has been difficult. It has been a difficult 14 years, 
and I thought that the hard part was over when we had a legal 
settlement between the Plaintiffs and the Defendants.
    I thought that all we had to do was come up and talk to 
Congress, because they had so many hearings that they knew 
about this, and it is almost like Congress sometimes acts 
oblivious to all the issues that we have talked about, and I am 
not criticizing, because I need your support to approve this.
    [Laughter.]
    Ms. Cobell. But I would like to stop there, and just take 
any questions.
    [The prepared statement of Ms. Cobell follows:]

  Statement of Elouise P. Cobell, Lead Plaintiff in Cobell V. Salazar

I. INTRODUCTION
    Good afternoon, and thank you Chairman Rahall, Ranking Member 
Hastings, and members of the Committee. I am here today representing a 
class of over 500,000 individual Indians as the lead plaintiff in the 
case initially entitled Cobell v. Babbitt and now referred to as Cobell 
v. Salazar, pending in the United States District Court for the 
District of Columbia and presently presided over by Judge James 
Robertson. Since virtually its inception more than 13 years ago, 
Congress has taken keen interest in this litigation and its key 
objectives--reforming the Individual Indian Trust (``Trust''), ensuring 
that the government accounts for all Trust assets including all trust 
funds, land and natural resources, and correcting and restating each 
individual's account balance.
    By any measure, this litigation has proven exceptional and 
extraordinary. Not only is it one of the largest class actions ever 
brought against the United States as it addresses over 120 years of 
mismanagement of Indian trust assets and involves over 500,000 
individual Indians, but the litigation has been intense and 
contentious. Moreover, there have been more than 3600 docket entries in 
the district court and over 80 published decisions, including ten 
appeals--the most recent appellate opinion is referred to as Cobell 
XXII.
    On each occasion I have appeared before Congress, I have emphasized 
my willingness to explore settlement of this case. But of course, 
resolution takes two parties willing to come to the table to negotiate 
in good faith and attempt to reach an equitable settlement that would 
set the foundation for improved trust management and accountability in 
the future. Until very recently, however, we did not have such a 
willing partner on the other side. President Obama showed great 
leadership during the campaign when he committed to seek a fair 
resolution to this case and, when elected, he followed through and 
charged Secretary Salazar and Attorney General Holder with carrying out 
this commitment.
    Having been through seven failed settlement efforts before, I was 
not optimistic at the outset of these negotiations that we would be 
able to reach agreement. Beginning in the late summer of 2009, though, 
we sat down in good faith and so did the Administration. Associate 
Attorney General Tom Perrelli, Interior Deputy Secretary David Hayes, 
and Interior Solicitor Hillary Tompkins were involved in the day-to-day 
negotiations. The issues to discuss and resolve were gravely 
challenging, and I repeatedly felt we had reached impasse. But both my 
team and the government soldiered on, knowing that resolution was the 
best thing for the affected individual Indian trust beneficiaries and 
for a healthier foundation of the trust relationship for the future.
    Reaching agreement was certainly not easy, and the settlement from 
my perspective is not perfect. I would want more for beneficiaries as I 
think that is what they deserve. But a settlement requires compromise--
by definition, you do not get everything you want. This is the bottom 
line: After months of discussion, I am here to testify that I strongly 
support this agreement. It is time to look forward, not backward. And 
though we must never forget the past, this settlement can move us 
forward together as it represents the best resolution we can hope for 
under the circumstances.
    Although we have reached an historical settlement totaling more 
than $3.4 billion, there is little doubt this is far less than the full 
amount to which individual Indians are entitled. Yes, we could prolong 
our struggle, fight longer, and, perhaps one day, reach a judgment in 
the courts that results in a greater benefit to individual Indians. But 
we are nevertheless compelled to settle now by the sobering reality 
that members of our class die each year, each month, and every day, 
forever prevented from receiving that which is theirs. We also face the 
uncomfortable, but unavoidable fact that a large number of individual 
Indian trust beneficiaries are among the most vulnerable people in this 
country, existing in the direst of poverty. This settlement can begin 
to provide hope and a much needed measure of justice.
    In addition, now that the Cobell case has brought heightened 
attention to this matter, I am optimistic that this settlement will lay 
the foundation for genuine and meaningful reform of the Trust. There 
remains considerable room for improvement, as Secretary Salazar and 
Deputy Secretary Hayes have recognized. I am hopeful that the 
Commission that Secretary Salazar has contemporaneously announced with 
this settlement will ensure that additional critical reforms are made 
and that we set the underpinning for safe and sound management of our 
assets in the future.
    The terms of the settlement have been well publicized. We have 
reached out to Indian Country to insure that beneficiaries are well 
informed of its terms. I just returned from meeting with beneficiaries 
in South Dakota, and our class counsel, as we speak, is traveling to 
meet with beneficiaries in other states. We have met with allottee 
associations, tribal organizations and landowners and will continue our 
efforts. Next week, our class counsel will visit Arizona and New 
Mexico, the following week Montana, Wyoming and North Dakota and the 
weeks after that Oklahoma, Washington, California and Oregon. Further 
meetings with beneficiaries will continue throughout Indian Country in 
March and April to make sure that they are able to receive complete and 
accurate information about the settlement.
    Despite this outreach, there remains misinformation regarding the 
settlement conveyed by a very small number of individuals, many of whom 
are not beneficiaries and do not speak for individual Indian 
beneficiaries. I want to dispel those misunderstandings:
    First, there are those who have stated that under this agreement 
beneficiaries will receive very little. This is not accurate. In fact, 
most beneficiaries who participate in this settlement will receive at 
least--and I emphasize at least--$1,500.00. Many will receive 
substantially more based on the transactional activity in their IIM 
account. To those in Indian Country, receipt of this money is critical, 
both as a recognition of the government's past wrongdoing and as a 
first step in fulfilling the commitment to reforming the trust system. 
Many individual Indians are dependent on this money for the basic 
necessities of life. Its payment should not be further delayed.
    Two other points are important with respect to these distributions. 
First, receipt of these funds shall not be construed as income and thus 
will not be taxable for beneficiaries. This is only fair because 
proceeds from trust lands are generally not taxable. Second, and 
critically important to the poorest among the class, the Cobell 
settlement funds shall not be considered when determining eligibility 
for programs such as TANF, SSI and food stamps. The last thing the 
parties want is to further victimize poorer class members by preventing 
them from receiving benefits from programs for which they would 
otherwise be eligible.
    Second, there are suggestions that the settlement should not have 
encompassed claims for trust administration since it is contended the 
Cobell case did not involve mismanagement of trust assets. This is not 
correct. The Cobell case has always insisted that the government 
account for all trust assets--not just money but the land and natural 
resources that are at the heart of the individual Indian trust. And, 
the district court invited plaintiffs to amend our complaint to include 
these claims in the litigation well before these settlement 
negotiations. In other words, their inclusion should be no surprise. 
Indeed, while true that there are certain trust damages claims that are 
now expressly included that were not before, understand that virtually 
all settlement discussions--including those led by this Committee and 
the Senate Indian Affairs Committee--have contemplated the inclusion of 
all such individual claims. The largest and oldest tribal organization, 
the National Congress of American Indians passed unanimously a 
resolution in 2006 endorsing inclusion of all trust management claims 
if, where as here, there is an opt out.
    I and others were also counseled on this point by the following 
sober reality: Very few trust mismanagement cases have ever been filed 
and those that have are very expensive, extremely time consuming and 
fraught with risk. There is an obvious reason for this. For most 
beneficiaries, the claims are relatively modest when compared with the 
cost of litigating against the government and the legal obstacles in 
doing so. Legal hindrances abound, such as statute of limitations and 
jurisdictional restrictions, and together with the cost prohibitive 
nature of litigation, help explain why so few have been brought. For 
the great majority of beneficiaries, this settlement represents the 
only opportunity for them to receive any compensation for the 
government's mismanagement of their trust assets. For those who wish to 
pursue those claims independently, they have the opportunity to do so 
by opting out of the trust administration portion of the settlement. 
The agreement preserves all legal mechanisms to enable them to do so.
    Third, there are those who criticize the amount that the class 
attorneys may receive by reason of this settlement. That criticism is 
misplaced. This is not a case where attorneys are attempting to get a 
fee based on a quick settlement. The attorneys in this case undertook 
substantial risk in filing and prosecuting this case on behalf of the 
500,000 individual Indian beneficiaries in 1996. Many of the attorneys 
gave up their practices to work solely on it. It has often consumed 18 
hour days, seven days a week. They have engaged in 7 major trials, 
handled countless appeals by the government and reviewed tens of 
millions of pages of documents. They responded when no on else--not 
even Congress--was able to correct the wrongdoing that individual 
Indians endured. As a result of their efforts, for the first time in 
over 100 years, the government has been held accountable for its 
mismanagement of the IIM Trust. Moreover, solely as a result of their 
efforts, reform of the Trust is a real possibility. The benefit to 
class members from their efforts is considerable. They have agreed to 
limit their petition for fees to under $100 million. This is less than 
3% of the total settlement--very modest when compared with fees 
typically awarded in class actions. Class members will have the 
opportunity to object to the fees and those objections will be 
considered by the Court before any fee award. The attempt by some such 
as ITMA to limit the fees further to those available under the Equal 
Access to Justice Act (EAJA) suffers from two infirmities. First, the 
government has made clear that it is not open to paying fees through 
EAJA. Second, if in the end, lawyer fees are so dramatically curtailed, 
then how will individual Indians ever obtain the kind of highly 
competent and dedicated counsel necessary to bring a difficult case 
like this next time? It is already tragically difficult to attract such 
lawyers and ITMA would like to make it all the more challenging. This 
makes no sense.
    Fourth, there are those that have even suggested that the named 
plaintiffs in this case, including me, will profit from this 
settlement. This again is erroneous. The incentive fee contemplated is 
an award to named plaintiffs by the Court for their work in assisting 
in this case and to cover expenses. As you might expect, the work 
required has been considerable. However, most of the money requested 
will be for reimbursement of expenses incurred during the 14 years of 
this litigation. Millions of dollars have been spent in prosecuting 
this case, including payment of experts, and covering charges for 
transcripts and other court costs. I have contributed substantial funds 
to aid in the prosecution of this case. The Blackfeet Reservation 
Development Fund, a non profit, has used millions of its own funds as 
well. Furthermore, many of the grants we received are in the form of 
loans and are repayable. Importantly, any class members not comfortable 
with the incentive award will have a opportunity to have their views 
heard by the Court before any payment is made. However, those who have 
advanced the money to prosecute this case deserve to be reimbursed.
    Finally, some who don't understand the reality of the historical 
data and the lack of reliable information, have criticized the 
distribution scheme contemplated in this settlement. They say it 
doesn't track with precision the losses for each beneficiary. The 
reality is that there is no data to establish actual losses. This is 
indeed rough justice. But it is the best possible way to achieve three 
important objectives: (1) being fair so that all receive a meaningful 
payment of at least $1,500, while rewarding high dollar accounts that 
likely suffered the most losses; (2) permitting for a prompt 
distribution where most beneficiaries will be completely paid within a 
few months; and (3) will not waste significant money on lawyers, 
accountants and Special Masters trying to figure out what is owed to 
each individual. In addition, the Court will hear any objections to the 
distribution scheme and make a determination on its fairness.
    Some have asked to establish an extensive and expensive process 
where beneficiaries can have essentially mini-trials before a Special 
Master. This is absolutely and unequivocally foolish. It would waste 
significant funds on figuring out who gets what and will take years 
before beneficiaries receive their distributions. Moreover, it will not 
be advantageous to those beneficiaries who can prove their case since 
such beneficiaries have the ability to opt out anyway and pursue their 
claims independently. In short, such a proposal would take years, cost 
hundreds of millions and be no fairer than the current model. This is 
precisely why the parties rejected such an approach.
    In summary, this settlement will do a lot of good. It will get more 
than $3 billion in the hands of beneficiaries. It will provide monies 
for land consolidation. It will create a $60 million scholarship fund. 
Moreover, there will be a Secretarial Commission to recommend 
additional trust reforms that are desperately needed. And there is an 
agreement to perform an audit of the Trust. No audit has ever been 
done. To heal the division between individual Indian trust 
beneficiaries and the government that is reflected historically and in 
the nearly 14 years of our litigation and to begin to establish 
confidence that the IIM Trust is managed in accordance with trust law, 
transparency is essential. Too many records have been destroyed. Too 
much deception has occurred. Importantly, this settlement will allow 
individual Indians to look forward and work collaboratively with their 
trustee to ensure a better tomorrow.
    We know this settlement does not solve many of the serious 
underlying problems plaguing this Trust. We know that reform must 
continue and cannot stop here. We will continue our efforts to ensure 
accountability. We have had to spend too much time looking backwards, 
trying to address the terrible wrongs of the past. Now, my hope is that 
we look forward to correct those wrongs so that individual Indian trust 
beneficiaries finally receive that which rightfully is theirs.
    When I embarked on this settlement process, I was skeptical that 
this result could be achieved. But we were able to reach a resolution. 
There has been too much discussion about what we would like to achieve 
for individual Indian beneficiaries. It is now important that we 
implement this historical settlement. I now ask Congress to swiftly 
enact the necessary implementing legislation so we can begin to 
distribute our trust funds without further delay. Hundreds of thousands 
of individual Indians have waited patiently for far too long.
                                 ______
                                 
 NOTE: The 57-page ``Class Action Settlement Agreement'' dated December 
        7, 2009, has been retained in the Committee's official files. 
        It can be found at the following website:
www.doi.gov/documents/ClassActionSettlementCobellvSalazar.pdf

    [The ``Agreement on Attorneys' Fees, Expenses, and Costs'' 
submitted for the record follows:]

                  IN THE UNITED STATES DISTRICT COURT
                      FOR THE DISTRICT OF COLUMBIA

               ELOUISE PEPION COBELL, et al. Plaintiffs,

                                  vs.

       KEN SALAZAR, Secretary of the Interior, et al, Defendants.

                        Case No. l:96CV01285-JR

           Agreement on Attorneys' Fees, Expenses, and Costs

                            December 7, 2009

_______________________________________________________________________

    WHEREAS the Parties entered the Class Action Settlement Agreement, 
dated December 7, 2009 (``Main Cobell Agreement''); and
    WHEREAS the Parties desire that the Class should compensate Class 
Counsel for reasonable attorney fees and related expenses and costs;
    THEREFORE, the Parties hereby enter this Agreement on Attorneys' 
Fees, Expenses, and Costs (``Fee Agreement'').
    1. Unless otherwise defined herein, this Fee Agreement incorporates 
all defined terms in the Main Cobell Agreement and shall be interpreted 
in a manner consistent with the Main Cobell Agreement.
    2. The amount of attorneys' fees, expenses and costs shall be 
decided by the Court in accordance with controlling law and awarded 
from the Accounting/Trust Administration Fund.
    3. The Parties agree that litigation over attorneys' fees, 
expenses, and costs should be conducted with a civility consistent with 
the Parties' mutual desire to reach an amicable resolution on all open 
issues. The Parties agree therefore that all documents filed in 
connection with the litigation over attorneys' fees, expenses, and 
costs shall consist of a short, plain statement of the facts and the 
law with the goal of informing the Court of relevant information for 
its consideration.
    Attorneys' Fees, Expenses, and Costs Incurred through December 7, 
2009.
        a.  Plaintiffs may submit a motion for Class Counsel's attorney 
        fees, expenses, and costs incurred through December 7, 2009. 
        Such motion shall not assert that Class Counsel be paid more 
        than $99,900,000.00 above amounts previously paid by 
        Defendants. Unless otherwise ordered by the Court, Plaintiffs' 
        memorandum of points and authorities in support of such claim 
        shall not exceed 25 pages and shall be filed no later than 
        thirty (30) days following Preliminary Approval, and Class 
        Counsel's reply in support of such claim shall not exceed 15 
        pages.
        b.  Defendants may submit a memorandum in opposition to 
        Plaintiffs' motion. Such memorandum shall not assert that Class 
        Counsel be paid less than $50,000,000.00 above the amounts 
        previously paid by Defendants. Unless otherwise ordered by the 
        Court, Defendant's memorandum shall not exceed 25 pages and 
        shall be filed within 30 days after Plaintiffs' motion.
        c.  Concurrently with any motion for fees, expenses, and costs 
        of attorneys through December 7, 2009, Plaintiffs shall file 
        statements regarding Class Counsel's billing rates, as well as 
        contemporaneous, where available, and complete daily time, 
        expense, and cost records supporting this motion. Defendants 
        may also submit an annotated version or summary of the time, 
        expense and cost records in support of their opposition.
        d.  Plaintiffs disclosure and filing of the records referenced 
        in the preceding paragraph shall not constitute a waiver of any 
        attorney client privilege or attorney work product protections. 
        Plaintiffs may request the entry of an appropriate protective 
        order regarding such confidential records.
        e.  In the event that the Court awards attorneys' fees, 
        expenses, and costs covered by this Paragraph in an amount 
        equal to or greater than $50,000,000.00 and equal to or less 
        than $99,900,000.00, Plaintiffs, Class Counsel and Defendants 
        agree not to file a notice of appeal concerning such award.
    5. Attorneys' Fees, Expenses, and Costs Incurred after December 7, 
2009. Plaintiffs may submit a motion for Class Counsel's attorneys' 
fees, expenses, and costs incurred after December 7, 2009, up to 
$10,000,000.00. Such motion shall be based solely on attorney hours and 
actual billing rates and actual expenses and costs incurred, and may 
not be justified by any other means (such as a percentage of the class 
recovery). Such motion shall be resolved in such manner as directed by 
the Court. Concurrently with any motion for post Agreement attorneys' 
fees, expenses, and costs, Plaintiffs shall file statements regarding 
Class Counsel's billing rates, as well as complete and contemporaneous 
daily time, expense, and cost records supporting this motion.
    6. Should (a) either party terminate the Main Cobell Agreement 
pursuant to the terms thereof, (b) the Main Cobell Agreement become 
null and void because a condition subsequent does not occur, or (c) the 
Main Cobell Agreement not finally be approved by the Court, this Fee 
Agreement shall be null and void, and the parties and Class Counsel 
shall take such steps as are necessary to restore the status quo ante.
    7. Nothing in this Fee Agreement shall affect the right of any non-
party to this Fee Agreement.
    Wherefore, intending to be legally bound in accordance with the 
terms of this Fee Agreement, the Parties hereby execute this Fee 
Agreement:
                               SIGNATURES
    Wherefore, intending to be legally bound in accordance with the 
terms of this Agreement, the Parties hereby execute this Agreement:

                            FOR PLAINTIFFS:

                    Dennis M. Gingold, Class Counsel

                     Keith M. Harper, Class Counsel

                            FOR DEFENDANTS:

             Thomas J. Perrelli, Associate Attorney General

                                 ______
                                 
    Mr. Faleomavaega. Chairman Rahall.
    The Chairman. Thank you. Elouise, you heard my opening 
statement, and I certainly want to reiterate my commendation 
for you, and praise for you. You certainly have demonstrated a 
dogged determination, a persistence and patience, and your 
fight for justice for Indian Country will be long remembered 
after all of us in this room have departed.
    I wanted to also compare the misperceptions that I guess 
that are out there, and salute you as I said in my opening 
statement for your Dear Elouise column, or hotline, that you 
have opened to answer a lot of those misperceptions.
    And fears, and unjustifiable fears, but yet because of all 
of the injustices that have been done, you can understand from 
where it comes. It reminds me very much of our health care 
debate, and the misperceptions that are out there, and those 
for their own reasons that may be stirring up opposition 
unjustifiably on those who stir up the opposition.
    But again the fear you can understand, and the anger and 
frustration, because it has been so long as we all know, 13 or 
14 years. You heard this figure mentioned earlier that there is 
an agreement that establishes a range of 50 to a hundred-
million dollars for attorney fees. Can you help us on how this 
range was developed?
    Ms. Cobell. Well, this range is 3 percent, and I firmly 
believe that the attorneys have to be paid a hundred million 
dollars. You know, the danger that we run into is when you 
start pulling back attorneys' fees.
    I am going to go back a little bit in time before I filed 
this lawsuit. I went shopping for attorneys. I went to those 
big attorney firms here in Washington that represented tribes. 
I asked them to take this case.
    They told me no, we are not taking the case. It is going to 
take too long, and we just are not going to take the case. I 
could not get people to represent me, and these were attorneys 
that made 20 and 30 percent off the Court of Claims 
representing Indian tribes, and they just would not do it.
    And then I finally found the attorneys that would 
represent, and I thought that the amount that they have filed 
for is very reasonable, very reasonable. I have no problem. I 
have done research, and I know that it is 25 percent, 20 
percent, 25 percent for attorneys' fees for large cases.
    And I believe that if we have good attorneys and we won--
and let me tell you that we won. In the 14 years, we won huge 
victories, and it is almost like a surgeon. When my husband and 
I went through a transplant, I gave him a kidney, we had the 
top surgeon. It cost us a lot of money.
    But we got the top surgeon because we wanted to live. I got 
the top attorneys because I wanted over 500 thousand individual 
Indians to live, and I wanted to make sure that they had proper 
representation. So I think that three percent is a bargain 
basement amount to pay the attorneys.
    The Chairman. Could you tell us how this settlement may 
affect future trust management by the Department of the 
Interior?
    Ms. Cobell. Well, I have to believe that if anything that 
this court case has done has shown the breach of trust, that 
the Department of the Interior is unlawful, or that they are 
not doing.
    And so I believe that there is only one way to go, and that 
is to change, and I heard Secretary Hayes talk about the 
Secretarial order that Secretary Salazar is doing, where he is 
going to have a commission and to address trust reform, and 
continue, and I have to believe.
    I met with Secretary Salazar specifically one on one on 
this, because I was very worried about the fact that trust 
reform would not be performed, and I think his leadership--but 
it will take all of us to continue to make sure that trust 
reform is implemented properly for individual Indians.
    And I guess I just have to believe that when I have the 
Secretary of the Interior and the Attorney General telling me 
that they have committed, if I can't believe them, then I don't 
know who I can believe.
    The Chairman. You have touched upon this, but would you 
like to elaborate anymore on what this settlement agreement 
means for future generations?
    Ms. Cobell. Well, I believe that this will, like the panel 
before has stated, this is for the past, compensation for the 
past. I think that the fact that this is the first victory for 
many individual Indians is so empowering for so many individual 
Indians that they do have a voice, and that they can be heard.
    And I feel that the young people are learning from this 
case. They are learning from this case. They are understanding 
that they have to pay attention. That you have to become very 
active in the management of your assets. You cannot be passive.
    And you can't say, oh, the government is going to take care 
of it for us, because they are not. So you constantly have to 
be very active, and I think that this case has done that.
    You know you cannot believe the number of calls that class 
counsel gets, and the number of letters, and the number of 
calls, and I would like to invite each and every one of you to 
my little teeny office at Blackfeet, where I have boxes and 
boxes of letters from people that say thank you. Thank you for 
standing up. Thank you for drawing a line in the sand and 
saying no more.
    And we want to make a change. This change has to happen, 
and I do think that by sitting with the government and coming 
together for a settlement that we can change together. That the 
relationship between the Department of the Interior, and the 
Department of Justice, and individual Indian account holders, 
will improve, and we have to be able to work together to move 
forward.
    The Chairman. Thank you, Elouise. Thank you again.
    Ms. Cobell. Thank you for your nice comments.
    The Chairman. Thank you.
    Mr. Faleomavaega. Our Senior Ranking Member, the Gentleman 
from Washington, Mr. Hastings.
    Mr. Hastings. Thank you, Mr. Chairman, and thank you for 
being here, and certainly I think it needs to be acknowledged 
the long time period by which you have been involved in this.
    I have said in this Committee on other occasions where 
there are settlements, and not necessarily Indian settlements, 
but other settlements, that generally speaking those are very 
tough decisions.
    But the good part about it generally speaking is that they 
are decided by the people that are involved, and I applaud that 
process. I think that generally is good. You heard today, 
however, that there are some questions regarding the 
transparency and the understanding of what this settlement 
means. It is very legitimate, I think.
    And I think that process needs to be followed. Maybe one 
thing that you could do to help that is to share all of your--I 
think you called them Letters to Elouise, with all of the 
people that have questions about that.
    I mean, if there is transparency, then for goodness sakes, 
share all of that information, and you can get to a point of an 
understanding. I think that is what we all want, but there are 
some legitimate questions out there.
    Let me focus a bit though, at least from my understanding 
here of the attorneys' fees, because there was questions that 
were raised on all of that. Now, as I understand it, your 
initial lawsuit was because of the accounting, and you said 
that was impossible, and so therefore you came to a settlement 
on that.
    Now, my understanding of the total amount of dollars of 
that part of it, the accounting, is roughly $300 million. The 
non-litigated claims that is part of that is about $1.1 
billion, nearly three times as much.
    Yet, the attorney fees come out of that portion as I read 
the settlement. So that means that part of the damage claims--
and correct me if I am wrong, but you said that you weren't 
necessarily happy that was part of the settlement agreement, 
but all the attorney fees come out of that portion of the 
money. I am just asking you if that is correct or not.
    Ms. Cobell. I am going to take a run at the first question, 
and then I have Bill Dorris, our attorney, talk about that. But 
it was not just recently that the trust mismanagement was 
included in our case.
    It was a while back, and Bill Dorris will talk about it, 
where the District Court had said that you are now to include 
the accounting of trust assets other than just the funds. So 
that became a part of this case early on, and I can't remember 
the exact date, and I will turn this over to Bill.

 STATEMENT OF WILLIAM E. DORRIS, MANAGING PARTNER, KILPATRICK 
                 STOCKTON LLP, WASHINGTON, D.C.

    Mr. Dorris. Yes. The court did invite the Plaintiffs to 
amend their complaint to add those claims at some point during 
the course of the case, and that was in approximately 2004.
    But one of the things that I think is important to 
understand is that from the very outset when we asked for an 
accounting, one of the natural outgrowths of an accounting once 
you determine how well the trust has been managed or 
mismanaged, you then have a restatement of accounts.
    So in one sense money was always part of this case, in that 
one of the outgrowths from the accounting itself would be a 
restatement of the accounts. Now, one of the great benefits 
that we got for most of the Plaintiff class, and what will be 
the trust administration class, is that they have the 
opportunity now, without further litigation, to collect money 
tax free to settle those claims.
    However, we were very careful in the settlement agreement 
to make sure that if they did not want to take advantage of 
that, they could opt out and have all of their rights still 
preserved, and that is very clear in the settlement agreement.
    Now, one of the issues that the District Court will have to 
determine in deciding what the right amount of attorneys' fees 
is, because that is not decided. That will ultimately be for 
the discretion of the court, is that normally in this district 
ranges are from 20 to 30 percent recovery for attorneys' fees.
    As Ms. Cobell was indicating, if you look at the full $3.4 
billion amount, an award of a hundred million dollars would be 
only 3 percent. But one of the issues that the District Court 
will have to determine after it hears from all of the class 
members, is what percentage is to apply and to what funds.
    Should it only apply to the historical accounting portion 
of the $1.4 billion, or should something be given to the 
attorneys for perhaps not litigating fully the trust 
administration claims, but still getting those benefits for the 
class.
    So that will be an issue for the court to decide, but let 
me also tell you that these claims have been investigated very 
thoroughly before we settled them. As part of our accounting 
claim, we had extensive research and analysis done by experts, 
in terms of how much oil, gas, and other minerals, timbers, 
grazing rights, ranching, all of the various assets from the 
Plaintiff class, what should the government have collected on 
that.
    And we had extensive expert analysis done so that we felt 
like we were in a very good position when we settled these 
claims, though they are subject to an opt out, to get a fair 
settlement for the Plaintiffs.
    Mr. Hastings. Let me respond by simply saying that I am not 
an attorney, and I appreciate your response and legalese. I am 
going to have to go back and digest that in my way with the 
information that I have, and what you are saying.
    If you take the total 3.4, over half of that is something 
in future claims, but yet you are saying that should be part of 
the--or at least as I understand it, that should be part of the 
pot by which attorney compensation comes from. I just have a 
question, and so let me end here, but ask this of both of you. 
As I mentioned earlier to the Department of Justice and the 
Department of the Interior, hearings like this, it is good to 
have these hearings, because it brings out issues that need to 
be resolved.
    There are going to be some questions, obviously, as our 
staff kind of digests what you said, and we would obviously 
send you some questions so that we could further explore so we 
can understand exactly what was said here.
    If we could get your quick response--and I asked Justice 
and Interior because they turned around my questions in a two-
week time period, and if you could follow that, that would be 
very helpful, because, Ms. Cobell, you said that timing is of 
the essence.
    Obviously, timing is of the essence to us, because we are 
part of this whole formula. I mean, again, if it was settled 
without any monetary damages, we would not be part of it.
    But there are monetary damages, and that means it brings us 
into this, and we have to understand what we are going in a 
proper way to make the right decision. We can only do that if 
we have information that satisfies our issues, too.
    And let me just simply conclude as I opened this that 
settlement agreements from my point of view are generally a 
very, very good way to go, simply because the people that are 
involved are the ones that are making the decision.
    But there are always questions that come of that, and we 
certainly heard that today. I think that those things need to 
be resolved so we can feel comfortable in going forward with 
this settlement agreement. So, thank you, Mr. Chairman.
    Mr. Faleomavaega. Thank you. When Ms. Cobell filed a 
lawsuit, and this was in 1996, I had this crazy idea and said 
why can't we just get some of that money from the Interior 
Department since it is owing to Indian Country, and establish 
some kind of a scholarship fund, and hopefully maybe Indian 
Country will give approval to something so that we could 
utilize.
    And this is 14 years ago, an I am just so happy to hear 
that one of the factors that was given into your negotiations 
is that there will be a scholarship fund. Can you elaborate on 
that a little more, Ms. Cobell? How much is going to be 
allocated?
    Ms. Cobell. The scholarship fund is $60 million and, of 
course, I wanted a hundred million, but I had to give in to $60 
million for a scholarship fund, but it is for all individual 
Indians that would like to pursue their education. And no 
matter if it be at tribally controlled colleges, universities, 
or vocational schools, and I think this is a very good move. We 
have already had different private foundations that want to 
match the scholarship fund.
    So it is a great opportunity for individual Indians to get 
educated, and I just hope that every single one of them take on 
land issues, and get educated in that area to continue to 
understand the management of their land.
    And one of these days there, I think that Mr. Nunez talked 
about his association, and I that it is really important to 
have young people start having associations, and having places 
for individual Indians to go, and to learn the expertise that 
has to be known in order to manage your own assets, and to 
improve your own quality of life.
    Mr. Faleomavaega. I for one would certainly absolutely 
support your suggestion that it should be a hundred-million 
dollar pot specifically for scholarship funds, because I 
honestly believe that is only for the betterment, and not only 
the future of Indian Country, but for the young generations 
coming up in the United States.
    I just wanted to share with you a little bit of how much I 
enjoyed reading--I believe he was a Lakota--Dr. Vine Deloria, 
and how much I deeply enjoyed reading some 20 books that he had 
written. One of them was ``Custer Died For Your Sins,'' and I 
think the other book was ``God is Red.''
    I hope my colleagues will have a chance to read those two 
books, because I think it tells a lot about the--and I just say 
that Mr. Deloria is one of my admirers, but I will once again 
say, Ms. Cobell, thank you for our patience.
    I realize that there are a lot of questions raised by what 
is going to happen now and hopefully there will be a better 
understanding in Indian Country about what you have tried to 
do, and what you have achieved, and with the help of the 
attorneys that have been willing to do all of this on behalf of 
Indian Country for some 14 years now. I do want to thank you.
    Ms. Cobell. Mr. Chairman, can I use this special time to 
officially say goodbye to Marie Howard. Marie Howard has been 
one of the bright spots that makes you want to continue to come 
back and testify before these committees, and she has just been 
committed, and I don't know what we will do without her. 
Goodbye, Marie.
    Mr. Faleomavaega. Thank you very much. Without any further 
statements, the hearing is adjourned.
    [Whereupon, at 12:43 p.m., the Committee was adjourne


    [Additional material submitted for the record follows:]

    [A statement submitted for the record by the Rosebud Sioux 
Tribe follows:]

     Statement submitted for the record by the Rosebud Sioux Tribe

    For decades, the Rosebud Sioux Tribe (``Tribe'') has called for 
Congressional commitment of substantial federal funding to solve the 
fractionated interest problem created by the federal government and 
left to tribes to solve. This testimony only concerns the portion of 
the Cobell Class Action Settlement Agreement (``Settlement Agreement'') 
concerning fractionated interests; specifically, the $2 billion Trust 
Land Consolidation Fund (``Fund'').
    As described further herein, our Tribe has been on the cutting edge 
in developing creative, effective and sustainable program for 
consolidation of fractionated interest. The only thing missing has been 
a comparable commitment of federal financial and administrative 
assistance. The federal government has been paltry at best, and at 
times go as far as to undermine the Tribe's efforts. In order to 
facilitate consolidation of fractionated interests, language in the 
Cobell litigation settlement bill must be revised to make the Trust 
Land Consolidation Fund to be used broadly for Indian land 
consolidation purposes. For example, funds should be available to 
eliminate liens already acquired by the Indian Land Consolidation 
Program (``ILCP'') for tribes. Funds must also be available to be used 
to immediately eliminate any and all tribal loan obligation (especially 
to the United Sates) associated with land consolidation efforts and 
programs. This would benefit those Indian tribes, like Rosebud, that 
have already begun consolidation of their own fractionated interests. 
Furthermore, it will ensure that more of the $2 billion is applied 
toward Indian land consolidation before the ten (10) year ``sunset 
date'' established in the Settlement Proposal. (The Tribe sees no 
reason for such a time limit in any case.).
    Brief History of the Fractionation of the Rosebud Sioux Tribe 
Reservation. The Rosebud Sioux Tribe Reservation (``Reservation'') 
occupies only a small portion of the former Great Sioux Reservation. 
Specifically our Reservation consists of what remains after 90 million 
acres were taken from the Tribe and tribal members during Allotment and 
Homesteading. Subsequent cessions to the United States further 
diminished our land base. As with many other tribes, the Tribe is still 
trying to recover land lost through the checkerboarding of our 
Reservation. Consistent with the checkerboarding of Reservations, our 
current Reservation is comprised of tribal land, individual allotments 
and fee land owned by tribal members and others. Additionally, some 
allotments and tribal land fall outside the currently acknowledged 
boundaries of the Reservation. Due to the devastating diminishment of 
our land base, the Tribe has spent decades reacquiring and 
consolidating the scattered holdings, both within and outside the 
Reservation boundaries.
    Federal Government Fractionated Interest Consolidation Efforts. To 
assist tribes with the consolidation of fractionated interests within 
reservation boundaries, the federal government developed the ILCP. The 
ILCP purchases fractionated interests in the name of an Indian tribe. 
However, subsequent to purchase, interests are immediately slapped with 
a lien. These liens make it impossible for the land to be transferred 
to tribes. Lease income generated from ILCP purchased interest is used 
by the ILCP to purchase more fractionated interests. This actually 
results in the generation of debt in the name of tribe for which the 
interest was acquired. As is evident, the practice of placing liens on 
ILCP purchased interests undermines the overall goal of land 
consolidation. Tracts are not placed in trust for tribes, and tribes 
are put in debt for land acquisitions they cannot access.
    The federal government also created a lending program through the 
U.S. Department of Agriculture (``USDA''), under the Farm Service 
Agency, that allows tribes to borrow money to resolve the fractionation 
problem internally with the use of Indian Land Acquisition Loans. 
However, interest rates on these loans become so outstanding that 
tribes are required to pay interest in amounts in excess of several 
times the principal.
    Rosebud Sioux Tribe Fractionated Interest Consolidation Efforts. 
Since 1943, the Tribe has operated a fractionated interest program 
called Tribal Land Enterprise (``TLE''). TLE has been a cutting edge 
program, and the model upon which other tribes have followed. Like the 
ILCP, TLE is working to resolve the fractionated interest problem 
within the Reservation. However, TLE uses new and innovative ways to 
acquire fractionated interest, which have been commended by the 
Department of the Interior. Through TLE, the Tribe has borrowed $8.5 
million in Indian Land Acquisition Loans from the USDA. To date, the 
Tribe has repaid the principal amount on its Indian Land Acquisition 
Loans. However, as previously mentioned, the Tribe has fallen victim to 
interest payments that now total several times more than original loan 
amounts.
    Rosebud Sioux Tribe Proposal for a Mutually Beneficial Solution. In 
the true spirit of consolidation of fractionated Indian land interests, 
the Tribe has time and time again submitted proposals to the Bureau of 
Indian Affairs (``BIA'') for the return of land purchased in the name 
of the Tribe though the ILCP to the Tribe. We continue to demand that 
liens on the ILCP tracts be forgiven, and the ILCP tract lease income 
be transferred to the TLE program.
    Our proposals are just and reasonable. Especially in light of the 
fact that programs like TLE save the federal government money by 
reducing the cost of administering fractionated interests for the 
federal government. Also, since the infrastructure of TLE is already in 
place, and TLE's administrative needs are already met, funds funneled 
through TLE can be used solely to acquire fractionated interests. Our 
proposals are the most economic and efficient way for the federal 
government to execute Indian land consolidation!
    Trust Land Consolidation Fund Created from the Cobell Settlement 
Agreement. The Class Action Settlement Agreement (``Settlement 
Agreement'') for Elouise Pepion Cobell v. Ken Salazar, Secretary of 
Interior, et al., No. Civ. 96-1285 (JR) (``Cobell'') was entered into 
on December 7, 2009. The Settlement Agreement provides for the 
establishment of a Trust Land Consolidation Fund (``Fund''). As defined 
in the Settlement Agreement, the Fund shall have $2 billion ``allocated 
to Interior Defendants and held in a separate account in Treasury for 
the purpose of acquiring factional interests in trust or restricted 
land...''.
    Interior Defendants are to distribute the Fund in accordance with 
the Indian Land Consolidation Program authorized under 25 U.S.C. 
Sec. Sec. 2201 et seq. The Fund shall be used for the purposes of (1) 
acquiring fractional interests in trust or restricted lands; (2) 
implementing the ILCP; and (3) paying the costs related to the work of 
the Secretarial Commission on Trust Reform, including costs of 
consultants to the Commission and audits recommended by the Commission.
    Interior Defendants have no more than ten (10) years from the date 
of the final approval of the Settlement Agreement to expend the Fund. 
If the Fund is not expended at that time, any amount remaining in the 
Fund will be returned to the Treasury.
    Realization of Fractionated Interest Consolidation on the Rosebud 
Sioux Tribe Reservation. As earlier stated, the Tribe has repeatedly 
requested that lands purchased through the ILCP be returned to the 
Tribe lien free. This is authorized under ILCA, as amended by the 
American Indian Probate Reform Act (``AIPRA''), per 25 U.S.C. 
Sec. 2213(b)(3), ``Removal of Liens After Findings.''
    According to ILCA, the Secretary of the Interior (``Secretary'') 
can forgive the repayment of a lien if: (1) the costs of administering 
the interest will equal or exceed the projected revenues; (2) it will 
take an unreasonable period of time for the parcel to generate revenue 
that equals the purchase price; or (3) a subsequent decrease in the 
value of land or commodities associated with the parcel of land make it 
likely that the interest will be unable to generate revenue that equals 
the purchase price paid for the interest in a reasonable time. To date, 
the Secretary has not forgiven the repayment of liens on the Tribe's 
ILCP tracts, nor indicated that our proposal is even being considered.
    Additionally, the Tribe has requested that all interest on the 
Tribe's Indian Land Acquisition Loans be forgiven. Again, to date, the 
interest on the loans are still outstanding, and no discussion are in 
place to settle the outstanding interest issue.
    How the Trust Land Consolidation Fund Could Assist the Rosebud 
Sioux Tribe, TLE, and other Tribes with Programs like the TLE. If the 
Secretary is unwilling to forgive the lien as outlined above, the Tribe 
proposes that funds from the Trust Land Consolidation Fund be used to 
satisfy the liens on the Tribe's ILCP tracts. Additionally, the Tribe 
proposes that funds from the Trust Land Consolidation Fund also be used 
to satisfy the Tribe's outstanding interest on the Tribe's Indian Land 
Acquisition Loan.
    Language in the Cobell litigation settlement bill must permit the 
Trust Land Consolidation Fund to be used for the satisfaction of liens 
on tracts already acquired by the ILCP for tribes, and towards loans 
(both the principal and interest) tribes have taken out for land 
consolidation purposes. Not only would this allowance provide the best 
benefit to tribes who have already begun consolidation their own 
fractionated interests, it would better ensure that the entire Fund is 
actually applied toward Indian land consolidation before the sunset 
date in the settlement. Additionally, allowance of the aforementioned 
use of the Fund will save the federal government money on 
administrative overhead of ILCP tracts and federal loans.
    Conclusion. The fractionation problem has been and continues to be 
very costly to the federal government, which continues to incur 
administrative costs on all ILCP tracts upon which there is a lien, and 
federal loans issued for land consolidation. If liens and loans could 
be satisfied from the Trust Land Consolidation Fund created through the 
Cobell Settlement Agreement, the federal government will be alleviated 
of all administrative costs of the ILCP tracts and federal loans. Both 
the federal government and tribes benefits from this arrangement, and 
the goal of land consolidation is ultimately honored. It is time that 
the federal government heed decades worth of urging from tribes to 
assist in solving a federally created problem--fractionation of Indian 
land. The Cobell Settlement Agreement outlines vehicle with which the 
federal government can make amends for decades of trust mismanagement. 
The Trust Land Consolidation Funds provides a vehicle that can help 
begin healing century long wounds.
    The Tribe thanks you for the opportunity to submit a statement for 
the record.
                                 ______
                                 
    [A letter submitted for the record by Percy Squire, Percy 
Squire Co., LLC, Columbus, Ohio, follows:]

March 10, 2010

The Honorable Nick J. Rahall, II
Chairman
Committee on Natural Resources
1324 Longworth House Office Building
Washington, D.C. 20515

Re:  Full Committee Oversight Hearing on the '"Proposed Settlement of 
the 
Cobell v. Salazar Litigation; Proposed Amendment

Dear Mr. Chairman:

    This correspondence is being sent to you on behalf of the 
Plaintiffs in United States Supreme Court Case No. 09-585. The Harvest 
Institute Freedman Federation, et al. v. United States, now pending. 
The Harvest action was commenced on December 28, 2006, in the United 
States Court of Federal Claims by persons aggrieved by the breach of 
fiduciary duties owed by the United States to Freedman as defined under 
the terms of various treaties entered into between the United States 
and the so-called Five Civilized Indian tribes following the Civil War, 
in 1866. 1 The Cobell settlement as currently proposed has 
profound implications for the Harvest Institute action and countenances 
the perpetuation of historic racial discrimination, unless amended, for 
the following reasons:
---------------------------------------------------------------------------
    \1\ See, Exhibits 1, 2 and 3 for definitions of Freedmen from 
various Administrations.
---------------------------------------------------------------------------
    1.  The Cobell settlements reaffirms the existence of a trust 
relationship between the United States and Native Americans dating back 
to at least 1887, the time of enactment of the General Allotment Act of 
1887, known as the ``Dawes Act'' (the bulk of trust assets alleged 
within the Cobell action to have been mismanaged by the United States 
are proceeds of various transactions in land allotted to individual 
Indians under the Dawes Act), See, Cobell v. Salazar. July 24, 2009, 
Opinion of the United States Court of Appeals for the District of 
Columbia, Circuit No. 08-5500, p. 2.
    2.  Under 1866 treaties between the United States and the Five 
Civilized Tribes, Freedmen were accorded equal civic status in relation 
to the United States as members of the Five Civilized Tribes, whether 
the Freedman were adopted into the tribes or not;
    3.  Since Cobell establishes that trust obligations are owed and 
have been owed by the United States to Indians since the close of the 
Civil War, Freedman having equal civic status under the 1866 treaties 
to members of the Five Civilized tribes are also owed fiduciary duties 
by the United States;
    4.  The Cobell settlement is evidence that the United States has 
never repudiated its fiduciary duty as trustee to Native American 
beneficiaries, i.e. the Cobell Plaintiffs; thus
    5.  Contrary to the rulings of the United States Court of Federal 
Claims in Harvest Institute Freedman Federation, et al. v. United 
States, Case No. 06-907L and its affirmance by the United States Court 
of Appeals for the Federal Circuit, the six year statute of limitations 
applicable to claims against the United States under the Tucker Act 28 
U.S.C. Sec. 2501, does not. under the repudiation rule 2, 
begin to run in relation to claims by the Harvest Institute Plaintiffs, 
et al. until the United States as trustee repudiates its trust 
responsibility to the Five Civilized Tribes, an event which Cobell 
establishes has never occurred.
---------------------------------------------------------------------------
    \2\ There is a general ``repudiation rule"' with regards to 
equitable trusts that says the statute of limitations will not begin to 
run on claims to enforce a trust against a trustee until repudiation of 
the trust relationship. The underlying rationale is that the trustee's 
possession of the trust assets is presumed to be possession for the 
beneficiary (i.e., the cestui que trust), and the time should begin to 
run on claims against the trustee only when the trustee has taken some 
acts or communicated in a way that is inconsistent with that 
presumption, so as to provide notice that the trustee has disavowed the 
trust relationship or is no longer acting in the interests of the 
beneficiary. The repudiation rule is applicable in the Harvest action 
for the reason the Freedmen are seeking recovery of trust property 
itself, and the Government as evidenced by Cobell has not already 
repudiated its trust relationship with the Freedmen.
    The repudiation rule has appeared in cases involving Native 
American trust claims, For example, in Tunica-Biloxi Tribe v. United 
States, 1991 U.S. App. LEXIS 10716 (Fed. Cir. may 17, 1991).
       Under the law of trust, a cause of action for breach of a 
fiduciary obligation owed by a trustee does not accrue until the trust 
is repudiated or terminated. Manchester Band of Porno Indians. Inc. v. 
United States, 363 F. Supp. 1238. 1249 (N.D. Cal 1973) (citing United 
States v. Taylor, 104 U.S. 216(1881)
---------------------------------------------------------------------------
    In light of the above it is inequitable and will result in the 
perpetuation of racial discrimination against the Freedman Plaintiffs 
in the Harvest Institute action (hereinafter ``Harvest Plaintiffs) to 
settle claims accruing to the benefit of members of the Five Civilized 
Tribes, descendants of slaveholders and persons who were disloyal to 
the United States while failing to resolve claims against the United 
States by the Harvest Institute Freedmen's Federation's putative class. 
Accordingly, the Cobell settlement authorization legislation should be 
amended to also include resolution of the claims in Supreme Court 
docket no. 09-585, by adding a subclass to the putative Cobell class 
consisting of the Plaintiffs in the Harvest Institute action and by 
increasing the settlement amount by $600,000,000.00 to account for 
claims by the 120.000 individual descendants of Freedman entitled to a 
recovery by reason of the breach of fiduciary duties owed to the 
Freedmen by the United States. A full discussion of the grounds for 
this relief is below.
A. BACKGROUND 3
---------------------------------------------------------------------------
    \3\ See, Exhibit 4 for actual treaty terms.
---------------------------------------------------------------------------
    During the Civil War, the Five Civilized Tribes entered into 
treaties with the Confederacy, severing their relations with the United 
States. As a result of these acts of disloyalty the Five Civilized 
Tribes forfeited all tribal lands and their status as government wards. 
In 1866, the United States made treaties with each of the Five 
Civilized Tribes, setting the terms on which the tribes would continue 
to exist within the United States, regain their land and trust 
beneficiary status. All of the treaties with the Five Civilized Tribes 
eradicated slavery' within the tribes and provided that the emancipated 
``Freedmen'' would have certain rights within the tribes. Although 
these Treaties had a common purpose, the provisions of the various 
Treaties were not identical. However, under the treaties the Freedmen 
were emancipated and given civic status equal to Indians whether the 
Freedmen were adopted into the Tribes or not. The following is a 
summary of the provisions of the treaties pertinent to this appeal.
    The Seminole Treaty: The United States entered into its first 
antebellum treaty with the Seminole in 1866. 14 Stat. 755. The treaty 
provided that the Freedmen members would have rights equal to those of 
Seminoles by blood:
        And inasmuch as there are among the Seminoles many persons of 
        African descent and blood, who have no interest or property in 
        the soil, and no recognized civil rights, it is stipulated that 
        hereafter these persons and their descendants, and such other 
        of the same race as shall be permitted by said nation to settle 
        there, shall have and enjoy all the rights of native citizens, 
        and the laws of said nation shall be equally binding upon all 
        persons of whatever race or color who may be adopted as 
        citizens or members of said tribe.
    14 Stat. 755, 756. In 1898, the Seminole entered into an agreement 
with the United States to allot its land held in common to individual 
members. 30 Stat. 567. The agreement made no distinction between the 
Freedmen members and the members by blood. All Freedmen members, those 
represented by Harvest here, did not receive allotments under this 
agreement.
    The Creek Treaty: The United States' treaty with the Creek is 
similar to its treaty with the Seminole. It provided that the Creek 
Freedmen would have all the rights of members by blood, including the 
right to share equally in land and funds:
        [A]nd inasmuch as there are among the Creeks many persons of 
        African descent, who have no interest in the soil, it is 
        stipulated that hereafter those persons lawfully residing in 
        said Creek country under their laws and usages...shall have and 
        enjoy all the rights and privileges of native citizens, 
        including an equal inters tint he soil and national funds, and 
        the laws of said nation shall be equally binding upon and give 
        equal protection to all such persons, and all others, of 
        whatever race or color, who may be adopted as citizens or 
        members of said tribe.
    14 Stat. 785, 786. In 1897, the United States and the Creek Nation 
agreed to terms on which the Creek Nation's common lands would be 
allotted. 30 Stat. 496. 514. The agreement made no distinction between 
Creeks by blood and the Freedmen. In 1901, the Creek entered a second 
agreement with the United States. 31 Stat. 861. Like the first, this 
agreement made no distinction between Creek Indian and Freedmen 
members. The Creek Freedmen represented by Harvest here did not receive 
their allotments on the same terms as the Creek members by blood.
    The Cherokee Agreement: The United States entered into a treaty 
with the Cherokee in 1866. The treaty of 1866, inter alia is a basis 
for Appellants' claims here. A treaty with the Cherokee Tribe and the 
United States was concluded on July 19, 1866. Article IV of that Treaty 
provided that"''... [a]ll of the Cherokee freed Negros who were 
formerly slaves to any Cherokee, and all free Negros not having been 
slaves, who resided in the Cherokee nation prior to June 1, 
1861...shall have the right to settle in and occupy the Canadian 
district...and will include a quantity of land equal to 160 acres for 
each person who may so elect to reside in the territory...'' Thus, as 
in the case of the Choctaw and Chickasaw Freedmen, the Cherokee 
Freedmen were ``adopted into the tribe [and! [consequently, they and 
their descendants were entitled to participate in the allotment of 
lands equally with members of the tribe by blood.'' Ross v. Ickes. 130 
F.2d 415 (D.C.C. 1942). It is in the failure of the Cherokee to allot 
land to the Freedmen represented by Harvest in this action that gave 
rise to the Harvest Complaint.
    The Choctaw and Chickasaw Treaty: The United States entered into a 
treaty with the Choctaw and Chickasaw Tribes on April 28, 1866. 14 
Stat. 769. This treaty provided that the tribes had a choice about how 
to deal with their Freedmen. If the tribes made their Freedmen members 
within two years, the tribes would receive a portion of a trust fund, 
and the Freedmen would receive 40-acre allotments once the Choctaw, 
Chickasaw and Kansas Indians had made their selections. If the tribes 
did not adopt their Freedmen and the Freedmen voluntarily removed 
themselves to other land within Indian Territory, the tribes would get 
nothing and the [Freedmen would receive a portion of the trust fund. 
Id] The Choctaw and Chickasaw resisted adopting the Freedmen, so the 
Freedmen were not entitled to the 40-acre allotments. In 1883, the 
Choctaw adopted the Freedmen into the tribe and declared each was 
entitled to 40 acres. The tribe made no allotments at that time either. 
Choctaw Nation of Indians v. United States. 318 U.S. 423, 425 (1943). 
The Chickasaw never did adopt their Freedmen into the tribe.
    In 1897, the United States entered into an agreement with the 
Choctaw and Chickasaw whereby their lands held in common would be 
allotted. 30 Stat. 496, 505-506. This agreement provided that the 
Choctaw Freedmen would receive 40-acre allotments. 30 Stat. 506. Before 
any allotments were made, the United States entered into another 
agreement with the tribes. This second agreement also provided that 
Choctaw and Chickasaw Freedmen would receive 40 acres. 32 Stat. 641.
    While the Choctaw and Chickasaw treaty provided conditional 
property rights, none of the other treaties entitled the Freedmen to 
individual property rights. The Freedmen represented by Harvest here 
did not receive allotments under their tribes' allotment agreements 
with the United States at the turn of the 20th century.
    The allotment process under the Dawes Act of 1887 was not initially 
applicable to the Five Tribes. The allotment process was extended to 
include the Five Tribes by the Curtis Act of 1898. Under the Curtis 
Act, Five Tribes land was allotted. Proceeds from transactions 
involving Five Tribes land, resulted in assets whose mismanagement is 
the subject of the Cobell action. just as with assets emanating from 
the General Allotment Act of 1887.
    The claim of the Harvest Plaintiffs alleges land guaranteed under 
the 1866 treaties to Freedmen by the United States was not delivered to 
the Freedmen, allotments were not received under the Curtis Act of 1898 
which resulted in the resulting failure to establish ``Individual 
Indian Money'' accounts for the ancestors of the Harvest Plaintiffs. 
Approving the Cobell settlement authorization without some amendment to 
address this historic breach of trust will perpetuate past historic 
racial discrimination and have the ironic twist of resolving claims of 
persons disloyal to the United States and slaveholders, while failing 
to address the claims of persons who were not disloyal and guaranteed 
equal civic and political status, separate and apart from tribal 
membership - the Harvest Plaintiffs.
    The United States has clearly accepted and acknowledged its trust 
responsibilities to the Cobell Plaintiffs. In point of fact, the trial 
court in Cobell stated:
      It is clear now that this Court has broad equitable 
authority to deal with a century or more of trustee nonfeasance and to 
fashion appropriate remedies, see, Cobell v. Norton, 240 F.3d 1081, 
1108-10 (D.C, Cir. 2001) (Cobell VI). but it is also clear that the 
authority is constrained by traditional doctrinal limits on federal 
courts that apply in suites against the government, including sovereign 
immunity and separation of powers.
      Accordingly, methods that might be unacceptable in a 
typical trust case, such as statistical sampling, are available here, 
where I am instructed to strike a more forgiving ``balance between 
exactitude and cost.''
      In these unchartered waters, where the trust is of 
enormous scope, the trustee of unusual character, and the data affected 
with such great uncertainty, the law of trusts is a sort of magnetic 
compass; it cannot be expected to point to due north, or to '"map 
directly'' onto this context. Id. at 1078.
      One useful is not very precise pointer provided by case 
law is that a trustee may not hide behind obscurity that he himself has 
created. See, e.g., Rainbolt v. Johnson, 669 F.2d 767, 769 (D.C. Cir. 
1981)
      ``As to a trustee who fails to keep proper records of his 
trust it is usually stated that, 'all presumptions are against him' on 
his accounting, or that 'all doubts on the accounting are resolved 
against him.'"
      The rules that identify and govern a breach of the 
accounting duty for a simple, 25-year trust with a single beneficiary 
cannot be applied, unaltered, to a 121-year old perpetual trust, 
managed by civil servants, with rapidly multiplying beneficiaries and a 
variety of ever-changing assets. Equity seeks ``to do justice to al]--
parties, Bollinger & Boyd Barge Serv., Inc. v. The Motor Vessel. 
Captain Claude Bass, 576 F.2d 595, 598 (5th Cir. 1978) (Emphasis 
added.)
      --``its orders are adapted to the exigencies of the 
case,'' Taylor v. Sterrett. 499 F.2d 367, 368 (5th Cir. 1974), and it 
seeks to make accurate evaluations of difficult evidence, not to 
provide ``windfalls'' for victims or punishment for wrongdoers. See, 
Bollinger v. Boyd, 576 F.2d at598.
      The trustee's irremediable breach of its accounting duty 
has unquestionably harmed individual plaintiffs (if not necessarily the 
plaintiff class): their putative damages claims have been prejudiced by 
the impossibility of assembling accurate data about the disposition of 
their assets.
    These are but a few of the affirmative statements made by the 
Cobell Court concerning its duty to the Cobell Plaintiffs, including 
those Cobell Plaintiffs descended from persons disloyal to the United 
States who forfeited all of their land.
B. SOLUTION
    The Cobell settlement authorization definition of litigation should 
be expanded to include Supreme Court docket no. 09-585, Harvest 
Institute Freedmen Federation, et al v. United States. The settlement 
amount should be increased by $600,000,000.00 to account for the 
120,000 Harvest putative class members. A Harvest subclass should be 
certified in the Cobell action however participation in the subclass 
should not be based exclusively on the ``Final Rolls of Citizens and 
Freedmen the Five Civilized Tribes'' the ``Dawes Rolls. Persons who can 
prove a connection to any of the Congressionally mandated Freedmen 
census should be eligible to apply for Harvest subclass participation, 
including: The Kern-Clifton Roll of Cherokee Freedmen of 1897 and the 
Wallace Roll of Admitted Freedmen 1890-1893. The exclusive authority of 
the Dawes Roll must be abandoned in favor of the addition of the Kern-
Clifton Roll and Wallace Roll and also the ``Ancient documents'' 
exception to the hearsay rule codified into the Federal Rules of 
Evidence which allows into evidence probative statements in a document 
in existence twenty years or more the authenticity of which is 
established.'' Fed. R. Evid. 803(16).
C. CONCLUSION
    It is respectfully requested that the Cobell authorization 
legislation be amended as set forth above in order to avoid the 
perpetuation of historic inequity and blatant racial discrimination.

Sincerely,

Percy Squire

Enclosure

cc: Joshua Pitre; [email protected]
   Clay T. Lightfoot; [email protected]
   Rollie Wilson; rollie [email protected]
   James S. Hall; Jim [email protected]

[NOTE: Attachments have been retained in the Committee's official 
files.]

                                 
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