    [Senate Hearing 111-538]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 111-538

                      S. 1690, TO AMEND THE ACT OF MARCH
                    1, 1933, TO TRANSFER CERTAIN AUTHORITY
                        AND RESOURCES TO THE UTAH DINEH
                      CORPORATION, AND FOR OTHER PURPOSES

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

                                    HEARING

                                   before the

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                         ONE HUNDRED ELEVENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                DECEMBER 9, 2009

                                   __________

             Printed for the use of the Committee on Indian Affairs

                      U.S. GOVERNMENT PRINTING OFFICE
    57-187                    WASHINGTON : 2010
    -----------------------------------------------------------------------
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512�091800
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                          COMMITTEE ON INDIAN AFFAIRS

                    BYRON L. DORGAN, North Dakota, Chairman
                     JOHN BARRASSO, Wyoming, Vice Chairman
    DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
    KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
    DANIEL K. AKAKA, Hawaii              TOM COBURN, M.D., Oklahoma
    TIM JOHNSON, South Dakota            MIKE CRAPO, Idaho
    MARIA CANTWELL, Washington           MIKE JOHANNS, Nebraska
    JON TESTER, Montana
    TOM UDALL, New Mexico
    AL FRANKEN, Minnesota
          Allison C. Binney, Majority Staff Director and Chief Counsel
         David A. Mullon Jr., Minority Staff Director and Chief Counsel

                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on December 9, 2009.................................     1
    Statement of Senator Dorgan......................................     1
    Statement of Senator Franken.....................................    24
    Statement of Senator Udall.......................................    16

                                   Witnesses

    Bennett, Hon. Robert F., U.S. Senator from Utah..................    19
        Prepared statement...........................................    20
    Billie, Hon. John, President, Aneth Chapter, Navajo Nation;
      Chairman, Navajo Utah Commission...............................    11
        Prepared statement...........................................    12
    Maryboy, Hon. Kenneth, Navajo Nation Council Delegate;
      Commissioner, San Juan County..................................     2
        Prepared statement...........................................     3
    Shelly, Hon. Ben, Vice President, Navajo Nation..................     8
        Prepared statement...........................................     9

                                    Appendix

    Adakai, James, Vice President, Oljato Chapter, Navajo Nation,
      letter.........................................................    53
    Begaye, Ray, State Representative for District 4, Santa Fe, New
      Mexico, letter.................................................    54
    Grayeyes, Willie, Chairman, Utah Dineh Corporation, letter.......    55
    Morgan, Lawrence T., Speaker, Navajo Nation Council, letter with
      attachments....................................................    33
    Response to written questions submitted by Hon. Tom Udall to:
        Hon. Robert F. Bennett.......................................    59
        Hon. Ben Shelly..............................................    61
    San Juan County Commission, prepared statement...................    27
    Shirley, Jr., Dr. Joe, President, Navajo Nation, letter with
      attachment.....................................................    29

        S. 1690, TO AMEND THE ACT OF MARCH 1, 1933, TO TRANSFER CERTAIN
     AUTHORITY AND RESOURCES TO THE UTAH DINEH CORPORATION, AND FOR OTHER
                                    PURPOSES

                                  ----------

                          WEDNESDAY, DECEMBER 9, 2009

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 9:15 a.m. in room
    628, Dirksen Senate Office Building, Hon. Byron L. Dorgan,
    Chairman of the Committee, presiding.

              OPENING STATEMENT OF HON. BYRON L. DORGAN,
                     U.S. SENATOR FROM NORTH DAKOTA

        The Chairman. Good morning. We will call the Committee to
    order this morning.
        This Committee was intending to have a business meeting
    today. We are postponing the two items on the business meeting
    until next week in order to resolve a couple of issues.
        I want to just say this morning quickly that the
    announcement yesterday by the Attorney General and the
    Secretary of the Interior on the settlement of the Cobell case
    I think is good news. It has been a long and tortured trail for
    that case, beginning 13 years ago. It has been in the court
    system and been the subject of many trial days and
    negotiations.
        I want to compliment the work of Secretary Salazar and the
    Attorney General, and all of the others that have worked to try
    to reach a settlement.
        My hope is that the settlement in the Cobell case would
    allow us to move beyond that case, and begin to address other
    issues. As you know, there are issues that I feel very strongly
    about, for example, promises and trust responsibilities for
    health care, housing, education, law enforcement and more, that
    I think have not been met. And my hope is that, again, the
    settlement of this case will unlock opportunities to do other
    things that this Country has a responsibility and an obligation
    to do for the First Americans.
        The Committee is going to hold a hearing this morning on S.
    1690, a bill to amend the Act of March 1, 1933, to transfer
    certain authority and resources to the Utah Dineh Corporation.
    Senator Bennett introduced that bill on September 21, 2009. The
    bill would designate a new trustee to oversee the Utah Navajo
    Trust Fund. This fund consists of oil and gas revenues
    generated from Navajo Nation land in Utah. Revenue from the
    fund is used to support the health, welfare and education of
    Navajo Indians living in San Juan County, Utah.
        Current law names the State of Utah as the trustee for the
    fund. In recent years, the State has sought to limit its role
    as a trustee. S. 1690 would remove the State of Utah as a
    trustee and designate the Utah Dineh Corporation as the new
    trustee.
        The Utah Dineh Corporation is a State-chartered non-profit
    corporation organized for the specific purpose of fulfilling
    the 1933 Act.
        Today, we are going to hear from Senator Bennett, the
    sponsor of the legislation, and from representatives of the
    Navajo Nation. I want to mention that although the
    Administration is not a witness at today's hearing, we will
    seek their formal views on the bill before moving forward.
        And I will encourage other interested parties to submit any
    written comments they might wish to submit to the Committee.
    The hearing record, as usual, will remain open for two weeks
    from today.
        With that, I welcome the witnesses. I know that they have
    traveled some distance to be with us. We will hear from the
    Honorable Kenneth Maryboy, Navajo Nation Council Delegate, and
    the Honorable Ben Shelly, Vice President, Navajo Nation from
    Window Rock, Arizona. We will hear them first, and then we will
    call Senator Bennett to hear from him.
        So let me thank both of you for traveling to be with us.
    You may, Mr. Shelly, introduce the person who is accompanying
    you.
        Let me hear first from the Honorable Kenneth Maryboy.
        Mr. Maryboy?

       STATEMENT OF HON. KENNETH MARYBOY, NAVAJO NATION COUNCIL
                DELEGATE; COMMISSIONER, SAN JUAN COUNTY

        Mr. Maryboy. Good morning. [Greeting in native tongue.]
        This morning, Chairman Dorgan, and the esteemed Members of
    the Committee. My name is Kenneth Maryboy, member of the Navajo
    Nation Council, San Juan County Commissioner. And I have
    traveled here from San Juan County, Utah, which is one of the
    seven Utah chapters of the Navajo Nation. I am one of only two
    of the Utah Navajo Nation council of 88 members, legislators.
        I am also a member of the Board on the Utah Dineh
    Corporation.
        On behalf of the San Juan County resident who is Utah
    Navajos, I implore you not to authorize the Navajo Nation to
    become the trustee of the royalty that are intend to be held in
    a trust for the benefits of the Utah Navajos.
        The President of the Navajo Nation, Joe Shirley, is not
    here to testify before the Committee today because the Navajo
    Nation Council has placed him and the most of his cabinet on
    administrative leave. Pending the outcome of the criminal
    investigation into the Navajo contract, this is the latest
    chapters in embarrassment history of how Navajo government
    leaders betrayed the trust of the Navajo people.
        I believe the Navajo Nation government in Window Rock,
    Arizona does not have the best interests of Utah Navajos at
    heart when it tried to convince you to give them the control of
    the trust fund that belongs to the tribal members whom the
    Navajo Nation government was otherwise forgotten.
        I have prepared a written testimony that has been submitted
    for the record. I would like to briefly outline why and other
    members of the Utah Dineh Corporation and the San Juan County
    Commission believe that the Navajo Nation should not be
    entrusted with this responsibility.
        I know the Navajo Nation has a history of being poor
    trustee. The Navajo road funds is the trust fund composed of
    the fuel excise tax by the Navajo Nation government. It is
    supposed to help the local chapters build local projects.
    Unfortunately, the money has stayed in the Navajo Nation at the
    capital at Window Rock, Arizona.
        Furthermore, elaborate that the Navajo Nation submitted the
    stimulus package, how the Navajo Nation in that package no
    where did we find the Utah Chapters and the Utah projects.
        Unfortunately, the history is too long for me to quote the
    short time I have with you this morning. I have provided
    details for you in my written testimony today. I will simply
    read some of the season's local headlines coming to Window
    Rock, news nobody in the Navajo Nation likes, but we all have
    to live with.
        October 26th, President Joe Shirley put on administrative
    leave. November 12th, slush fund totaling over $35 million.
    November 13th, special prosecutor appointed. December 3rd,
    tribal discretionary fund to be audit for the first time ever
    in history.
        We know the Navajo Nation has history of negligence to the
    Utah Navajos. San Juan County, Utah has had to step up to the
    plate to provide essential government service for the Utah
    Navajo because Window Rock does not.
        Quickly glimpse to the map of the Navajo Nation government
    office located, and it will show you Window Rock, overlooking
    the Navajo portion of the Navajo reservation. There are Navajo
    Nation law enforcement, justice, health, education, welfare
    office. North of the Arizona borders, which is why San Juan
    County is providing law enforcement for our protection,
    emergency medical service, senior services, road maintenance
    and telecommunication and water services to the seven Utah
    Navajo chapters.
        I implore you not to abandon the Utah Navajos the way
    Window Rock has. I beg you not to contribute to the next
    embarrassing headlines that could likely read, Congress allows
    Navajo Nation loss, Utah Navajo trust fund. Please support S.
    1690 to transfer administrative to the trust fund of the Utah
    Navajo Corporation.
        I am happy to answer any questions. And furthermore, Mr.
    Chair, I have my Board members from the Utah Dineh Corporation,
    which has paid their way out of their own expense to be here to
    this very important meeting here today.
        Thank you.
        [The prepared statement of Mr. Maryboy follows:]

       Prepared Statement of Hon. Kenneth Maryboy, Navajo Nation Council
                    Delegate; Commissioner, San Juan County

    Introduction
        My name is Kenneth Maryboy and I am one of only two Navajo Nation
    Council Delegates representing Utah Navajos within in the Navajo
    Nation's 88 member legislature. I am also a San Juan County
    Commissioner and a member of the Board of Directors of the Utah Dineh
    Corporation, a nonprofit organization created to be a trustee of the
    Utah Navajo Trust Fund for Navajo Indians residing in San Juan County.
    I submit this testimony to you on behalf of the San Juan County
    Commission to bring to this Committee's attention the inappropriateness
    of the Navajo Nation government to be a trustee of the Utah Navajo
    Trust Fund, given the Navajo Nation's pattern of malfeasance and
    neglect.
        San Juan County believes that the Navajo Nation government, which
    is located in Window Rock, Arizona, and provides few if any government
    services to Utah Navajos, does not have the best interest of Utah
    Navajos at heart when it asserts a vague argument of tribal sovereignty
    to wrestle away control of the Utah Navajo Trust Fund from Utah
    Navajos.
        The Navajo Nation's heretofore disinterest in its own members who
    reside within the Utah strip of the Navajo Nation is the very reason
    why San Juan County has stepped up to the plate to deliver essential
    government services to Utah Navajos who live within the 1,550,000 acres
    of the Navajo reservation that constitute the southern region of our
    7,821 square mile county. San Juan County has provided law enforcement,
    fire protection, emergency medical services, senior services, road
    maintenance, telecommunication and water services to the seven Utah
    Navajo chapters because the tribe in Window Rock does not. The prospect
    of being able to control millions of dollars generated in Utah, for the
    benefit of Utah Navajos, seems to have awakened Window Rock's otherwise
    dormant interest in its tribal members who live north of the Arizona
    border.
        The Special Trustee for American Indians, Ross Swimmer, testified
    last year to the House Resources Committee that the Department of
    Interior would defer to the Navajo Nation in this matter to honor the
    government to government relationship. Mr. Swimmer notably said that a
    trustee for the Utah Navajo Trust could be a non-profit organization
    composed of Navajos, with a third party to handle the trusts' corpus.
    Utah Navajos have heeded the Special Trustee's suggestion by forming
    the Utah Dineh Corporation, whose Board of Directors represent each of
    the seven Utah Navajo Chapters and have voting interests proportional
    to their chapter's Navajo population, in relation to San Juan County's
    total Navajo population.
        San Juan County believes the Utah Dineh Corporation is best
    situated to benefit Utah Navajos as the new trustee of the Utah Navajo
    Trust Fund because it is a not for profit organization who cannot hide
    behind the shield of tribal sovereignty. The Navajo Nation should not
    be allowed the privilege of administering the fiduciary trust of the
    Utah Navajo Trust Fund because:

            1. The Navajo Nation has a history of withholding funds for the
            benefit of the Navajo people;

            2. The Navajo Nation has a history of neglecting Utah Navajos;
            and

            3. The Navajo Nation has a history of malfeasance.

    The Navajo Nation Has Already Failed To Be a Competent Trustee for Utah
            Navajos
        The Navajo Nation Road Fund reveals how the Nation fails as a
    trustee. Since 2003, the Navajo Nation has collected fuel taxes
    pursuant to memorandums of agreement (MOA) with Arizona, New Mexico,
    and Utah. These monies are to be held in trust to improve the
    transportation infrastructure of Navajo Chapters, but no such monies
    have been distributed to the Chapters since 2006.
        The State of Utah entered into an MOA with the Navajo Nation in
    October 2000 and agreed to reduce the amount of gasoline taxes Utah
    collects on the reservation by the amount of taxes the Nation collects.
    For example, instead of collecting 24 and a half cents per gallon, Utah
    agreed to collect only 6 and a half cents per gallon so that the Navajo
    Nation could impose an 18 cent per gallon tax without passing a higher
    cost to consumers.
        In 2003, the Navajo Nation created the Navajo Nation Road Fund that
    is based upon the anticipated revenue projection for fuel taxes for a
    given year as determined by the Comptroller of the Navajo Nation. Since
    2003, the Navajo Nation has budgeted $47,401,256.05 in Navajo Nation
    Road Fund projects, of which, only $19,614,356.12 have actually been
    spent. Of that $19,614,356.12, the Navajo Nation has kept
    $8,527.225.64, or nearly half, in the Navajo Nation capitol Window Rock
    rather than distributing those funds to local chapters who apply for
    the money.
        In the six years the Navajo Nation has been the trustee of the Road
    Funds, the Navajo Nation has granted only two awards for a total of
    $396,358.76 for projects within Utah, despite multiple requests from
    Utah Navajo chapters for infrastructure needs that cost millions. The
    August 26, 1999 resolution that the MOA between Utah the Navajo Nation
    is premised upon states that the Navajo Nation will annually
    communicate to the Governor of Utah about the Nation's plans to address
    the infrastructure deficit within the Utah section of the reservation.
    The Navajo Nation has never collected, much less communicated, the road
    infrastructure needs of Utah Navajos to the Governor of Utah.

    The Navajo Nation Deprives Utah Navajos of Services It Provides
            Elsewhere
        A look at the Navajo Nation government services reveals how Window
    Rock overlooks the Utah portion of the Navajo reservation.
        No Navajo Nation Public Safety and Justice Services offices are in
    Utah:

       Navajo Division of Public Safety Locations: 30 in Arizona,
            13 in New Mexico
       Emergency Medical Services: 9 in Arizona, 4 in New Mexico

       Fire and Rescue Services: 6 in Arizona

       Criminal Investigation Section: 5 in Arizona, 2 in New
            Mexico

       Corrections: 4 in Arizona, 3 in New Mexico

       Victim Assistance: 2 in Arizona, 2 in New Mexico

       Police Districts: 4 in Arizona, 2 in New Mexico

       Judicial Branch District Locations: 5 in Arizona, 5 in New
            Mexico

       Office of Chief Prosecutors: 3 in Arizona, 4 in New Mexico

        No Navajo Nation Health, Education and Welfare offices are in Utah:

       Division of Health: 22 in Arizona, 11 in New Mexico

       Navajo Area Agency on Aging: 4 in Arizona, 2 in New Mexico

       Behavioral Health Services: 4 in Arizona, 2 in New Mexico

       Communicable Disease Program: 5 in Arizona, 2 in New Mexico

       Food Distribution Program: 5 in Arizona, 3 in New Mexico

       WIC Program: 4 in Arizona, 2 in New Mexico

       Division of Dine Education: 17 in Arizona, 8 in New Mexico

       Office of Dine Youth: 4 in Arizona, 2 in New Mexico,

       Dept. of Head Start: 4 in Arizona, 2 in New Mexico

       Office of Special Education/Rehabilitation: 5 in Arizona, 2
            in New Mexico

       Office of Scholarship/Financial Assistance: 4 in Arizona, 2
            in New Mexico

       Division of Social Services: 12 in Arizona, 9 in New Mexico

       Regional Offices: 5 in Arizona, 3 in New Mexico

       Sub Offices: 7 in Arizona, 6 in New Mexico

        Only two Navajo Nation Resources and Infrastructure offices are in
    Utah:

       Navajo Division of Transportation Locations: 3 in Arizona, 2
            in New Mexico

       Division of Natural Resources Locations: 13 in Arizona, 9 in
            New Mexico, 1 in Utah

       Archaeology: 2 in Arizona, 1 in New Mexico

       Land Dept.: 3 in Arizona, 2 in New Mexico, 1 in Utah

       Water Resources Dept.: 8 in Arizona, 6 in New Mexico

        Three Navajo Nation Human and Economic Development offices are in
    Utah:

       Navajo Division of Economic Development: 4 in Arizona, 2 in
            New Mexico, 1 in Utah

       Division of Human Resources: 11 in Arizona, 6 in New Mexico,
            1 in Utah

       Navajo Veterans Affair: 4 in Arizona, 2 in New Mexico

       Dept. of Workforce Development: 7 in Arizona, 4 in New
            Mexico, 1 in Utah

    The Navajo Nation Has a History of Failing to Operate With the
            Transparency, Integrity and Stability That Utah Navajos Need
            and Deserve in any Future Trustee
        The President of the Navajo Nation, Mr. Joe Shirley, cannot testify
    before this Committee because the Council has placed him and most of
    his cabinet on administrative leave pending the outcome of a criminal
    investigation into Navajo contracts. Unfortunately, his administration
    is not the first where a Navajo leader has been removed from office.
    The following list of headlines, bylines, and summaries from the press
    detail Window Rock's sad history of neglect, malfeasance, and
    incompetence in just the past twenty years:

            President Joe Shirley Put On Administrative Leave
            Navajo Times
            October 26th, 2009

            The Navajo Nation Council put President Joe Shirley Jr. on
            administrative leave during the investigations and possible
            prosecution of ethical, civil and criminal charges pending from
            alleged wrongdoing by the president and key members of his
            staff relative to the Nation's contracts with the private
            companies, OnSat and BCDS.

            Others also under investigation are the president's chief of
            staff, and the directors of the divisions of Economic
            Development, Community Development and Public Safety. Also
            included in the investigation are former Shiprock Chapter
            President Duane ``Chili'' Yazzie, and Ernest Franklin, former
            employee with the Division of Community Development.

            The Navajo Nation entered into a $1.9 million contract with the
            Utah-based OnSat Network Communications in 2001. OnSat agreed
            to provide satellite Internet services to all 110 chapters on
            the Nation, but service was disrupted after the tribe stopped
            making payments, claiming the company overbilled for services.

            The Navajo Nation owns 51 percent of Biochemical
            Decontamination Systems, or BCDS, a corporation created to seek
            federal contracts for the sale of metal fabrication products.
            The Nation in 2006 approved using the Navajo Dam Escrow Fund to
            back a $2.2 million loan to finance an expansion of the plant.
            But by 2008, the company was defunct and $4.7 million in debt.

            Navajo Chairman and Son Convicted of Bribe-Taking
            Washington Post
            October 18, 1990

            Suspended Navajo Chairman Peter MacDonald Sr. has been
            convicted of 41 counts of bribery and other crimes for taking
            money and favors from business people operating on the
            reservation. His son and codefendant, Peter ``Rocky'' MacDonald
            Jr., was convicted of 23 similar counts.

            In 1989, the Navajo Tribal Council placed Peter MacDonald on
            paid leave from his Navajo Chairmanship position because of
            bribery and corruption charges relating to the real estate deal
            in 1986. Two realtors gave the Navajo Chairman $25,000 to pay
            down on his $70,000 bank loan, and a 1 year old BMW 735I
            automobile, from the profit they made on the land sale to the
            tribe.

            Peter MacDonald's removal led to five months of internecine war
            on the Navajo Nation and on July 20, 1989 he and his supporters
            tried to overthrow the Navajo Nation government.

            In February 1993, Peter MacDonald, was sentenced to 14 years in
            prison for trying to over throw the tribal government and
            inciting a fatal riot in Window Rock, Arizona, which caused two
            deaths, and for fraud, racketeering and conspiracy convictions.

            Navajo President Forced to Resign
            High Country News
            March 2, 1998

            Facing up to 50 criminal charges, Navajo President Albert Hale
            resigned from office Feb. 19. By resigning, Hale avoided
            prosecution for misusing tribal money.

            Special prosecutor for the tribe, Fred Chris Smith, and Hale's
            attorney, Henry S. Howe, presented a stipulated agreement to
            the tribe's ethics committee, which accepted Hale's
            resignation. The agreement states that President Hale accepted
            gifts from corporations doing business with the tribe,
            including Xerox and Conoco.

            The agreement also states that Hale and Thomas Atcitty, tribal
            vice president, accepted gifts at the Democratic National
            Convention in Chicago from Navajo political appointees and some
            employees of the tribe. In addition, it is stipulated that Hale
            used a credit card and tribal vehicles for personal use.

        Headlines from just this past month detail exactly the kind of
    government that hopes to administer the Utah Navajo Trust Fund. The
    Navajo Nation has no capacity to mange its own funds, both oversight
    ability and the willingness to enact such are lacking.

            Tribal Discretionary Funds to be Audited for First Time Ever
            Navajo Times
            December 3, 2009

            Tribal auditors to audit discretionary funds of the executive
            offices and legislative branch, as well as the Office of the
            First Lady. The audit will focus on up to $10 million a year in
            tribal revenues and are subject to few rules and almost no
            oversight. It will be the first audit of discretionary funds
            for either branch, although annual audits of legislative branch
            funds were mandated in 2007.

            Shiprock Fair Saga Remains Unexplained
            Farmington Daily Times
            November 25, 2009

            The Shiprock Navajo Fair Board is not a tax-exempt organization
            and hasn't been paying its taxes. The fair is held in a dirt
            field that has no parking, bathrooms, or trash cans. A
            conservative estimate gives the Shiprock Fair $650,000 in
            annual gross receipts. No one is sure how much money the fair
            actually makes, so there's no way of knowing if money is being
            siphoned off. The fair board continues to refuse all requests
            to examine their records.

            Special Prosecutor Appointed
            Gallup Independent
            November 13, 2009

            The Navajo Nation Attorney General to appoint a special
            prosecutor to investigate allegations of legal violations by
            tribal officials, including President Joe Shirley Jr., and
            employees arising from the tribe's contractual history with
            OnSat and BCDS.

            Slush Funds Total Over $35 Million
            Navajo Times
            November 12, 2009

            More than $35 million has been poured into the discretionary
            funds of the Navajo Nation Council, speaker's office and
            president's office from 2005 to 2009, according to financial
            records from the Navajo Nation's Office of Management and
            Budget.

            The Navajo Times has repeatedly asked President Joe Shirley Jr.
            and Speaker Lawrence Morgan for information about their
            discretionary funds. Morgan pointed out that he could not share
            documents because it would violate the privacy rights of those
            individuals receiving financial assistance. Shirley's Chief of
            Staff Patrick Sandoval said that the executive office has no
            policies and procedures.

            For their efforts, the Arizona Press Club awarded the Navajo
            Nation President, Speaker, and Council as co-recipients of the
            Brick Wall/Arpaio First Amendment Disservice Award. An award
            given annually to the public servant and/or government agency
            whose egregious efforts to thwart the public's right to know
            must be brought to light.

        San Juan County implores this Committee not to contribute to the
    next headline--

            Congress Allows Window Rock to Loot Utah Navajo Trust Fund

    Conclusion
        Congress established the Trust Fund in 1933 to benefit Utah
    Navajos. Congress must not now abandon Utah Navajos by ignoring the
    history of neglect, unaccountability and malfeasance that the Navajo
    Nation continues to demonstrate.
        In his June 19, 2008 testimony to this committee Ross Swimmer
    stated that the Office of Special Trustee lacks the capacity to
    administer the Utah Navajo Trust Fund. He also stated that the Navajo
    Nation or a nonprofit organization made up of Navajo citizens is more
    appropriate to take on the Trust Fund.
        The Navajo Nation itself shows that it too lacks the capacity to
    administer the Utah Navajo Trust Fund. San Juan County supports S. 1690
    to transfer administration of the Trust Fund to the Utah Dineh
    Corporation. Any other conclusion would in itself be malfeasance.

        The Chairman. Mr. Maryboy, thank you for your trip to
    Washington, D.C. to provide this testimony. We appreciate it.
        Mr. Ben Shelly, the Honorable Ben Shelly, you may proceed.

      STATEMENT OF HON. BEN SHELLY, VICE PRESIDENT, NAVAJO NATION

        Mr. Shelly. Thank you very much.
        Good morning, Chairman Dorgan and Members of the Committee.
    I am Ben Shelly, the Vice President of the Navajo Nation.
        We strongly disagree with S. 1690. The Navajo Nation wants
    to be the trustee of the Utah Navajo Trust Fund. We want to
    work with Congress, this Committee and the Utah delegation to
    make the Navajo Nation a strong, accountable, and transparent
    trustee.
        With me is Mr. John Billie, the President of the Aneth
    Chapter and the Chairman of the Navajo Utah Commission. Mr.
    Billie is here to inform the Committee that the Aneth Chapter
    does not S. 1690 and is available to answer any questions.
        The Navajo Nation is adamantly opposed to S. 1690.
    Chairman, again, we adamantly oppose S. 1690.
        This bill would give the Federal trust responsibility for
    royalties from Navajo Nation mineral leases to a non-profit
    corporation. This corporation did not exist when this bill was
    introduced.
        This bill will give control over approximately $30 million
    in trust fund to a corporation with zero experience, with
    absolutely no outside capital. Every year, an additional $6
    million to $8 million is added to the trust fund. In the event
    of any breach of trust by the corporation, the beneficiaries
    would have no remedy against the corporation.
        This bill is bad for the following reasons. Number one, Mr.
    Chairman, there is no accountability and transparency in the
    use of trust fund money. Number two, it fails to provide for
    benefits for future Navajo children. Three, it wrongly expands
    the original purpose of the trust and would lead to misuse and
    misappropriation of the trust fund. Four, it violates the
    common laws of trusts by appointing beneficiaries as trustees
    and is a conflict of interest. Five, lastly, this bill was
    introduced by Senator Bennett without even a single phone call,
    meeting or simple email by the Senator or his staff to the
    Navajo Nation government. There was no consultations.
        Chairman, Senator, there was no consultation.
        Frankly, Senator, this bill is a recipe for disaster.
        On the other hand, the Navajo Nation is the best trustee
    for the following reasons. One, we would be an accountable,
    responsible and transparent trustee. Two, as agents for the
    trust fund, we have never breached our fiduciary responsibility
    in the past 30 years. Three, we have successful records of
    managing, investing and increasing the value of many trust
    accounts, including multi-million dollar accounts. Four, we
    have a well-established budget and auditing process for trust
    funds. Five, lastly, unlike the corporation, the Navajo Nation
    has sufficient outside funds to be accountable to our Navajo
    people.
        Senator, Chairman Dorgan, again, I am grateful, very
    grateful for this opportunity to provide testimony in regard to
    S. 1690. With your permission, I would like to turn over my
    remaining time to Mr. John Billie. Should you have any
    additional question, I have provided written testimony with
    further details of the Navajo Nation position in this matter.
        Thank you.
        [The prepared statement of Mr. Shelly follows:]

      Prepared Statement of Hon. Ben Shelly, Vice President, Navajo Nation

        Good Morning Chairman Dorgan, Honorable Members of the Committee on
    Indian Affairs. I am Ben Shelly, Vice President of the Navajo Nation. I
    am here to provide testimony in regard to the future of the Utah Navajo
    Trust Fund (UNTF) and S. 1690 introduced by the Honorable Senator
    Robert Bennett.
        As the Committee knows, the State of Utah has declared its desire
    to withdraw as trustee of the UNTF. The State of Utah passed
    legislation in 2008 that effectively ends most disbursements from the
    UNTF, ends the trust fund administration, and moves the trust assets to
    a new fund pending selection of a new trustee. The Utah legislation
    specifically calls on Congress to appoint a new trustee for the UNTF.
    In the meantime, Navajo Nation will no longer have a role in the
    planning of expenditures from the UNTF, as is mandated under the 1933
    Act. Consistent with federal policy toward Indian tribes, the Navajo
    Nation is requesting that Congress designate the Navajo Nation as the
    new trustee of the UNTF.
        Please be aware that the Navajo Nation has many elected officials
    at various levels of government, all of whom have individual agendas
    that may or may not coincide with the broader goals and policies of the
    Navajo Nation. However, the Navajo Nation has its own law that governs
    who may speak on behalf of the Navajo Nation and our People. Pursuant
    to the Navajo Nation Intergovernmental Relations Committee legislation
    the Navajo Nation seeks to be the trustee of the Navajo Nation Utah
    Trust Fund. See attached letter from Speaker Morgan to Senator Bennett.
    The Navajo Nation Executive Branch Office of the President and Vice-
    President supports the Navajo Nation as the Trustee of Utah Trust Fund.
    See attached letter from President Shirley to Senator Bennett. Pursuant
    to Navajo Nation law, only my testimony today can provide the official
    Navajo Nation position and policy in this matter.

    History of Utah Navajo Lands and UNTF
        The Utah portion of the Navajo Nation has a complex history of
    additions, withdrawals, restorations and exchanges. The United States
    added the lands in the Utah Territory that lay south of the San Juan
    and Colorado rivers by Executive Order on May 17, 1884. Navajo People
    have a historic tie to this area and have continuously occupied this
    land since long before the captivity of Navajos in 1864. On November
    19, 1892, four years before Utah was awarded statehood, then President
    Benjamin Harrison, by executive order, took back those lands in the
    Utah portion of the Navajo Nation which lay west of the 110+ parallel
    (what is called ``the Paiute Strip''), and placed those lands back in
    the public domain. Navajo lands in the Utah Territory which lay east of
    the 110+ parallel remained part of the Navajo Nation. On May 15, 1905,
    by executive order, President Theodore Roosevelt added the Aneth area
    in Utah to the Navajo Nation. In 1908, the Department of the Interior
    made an administrative withdrawal of the Paiute Strip from the federal
    public domain, designating those lands again for exclusive use by the
    Navajo. In 1922, the Department of the Interior again took the Paiute
    Strip away from the Navajo, and put the lands back into the public
    domain. The Paiute Strip was again withdrawn from the public domain in
    1929.
        The federal legislation that created the UNTF was the result of
    negotiation and agreement between the Navajo Nation, the State of Utah,
    and the United States Government. In 1930 and 1931, the Navajo Tribal
    Council asked the Commissioner of Indian Affairs to negotiate on its
    behalf to permanently restore the Paiute Strip to the Navajo Nation,
    based on the previous set asides of this area by the Federal Government
    and on historic Navajo occupation. On July 7 and 8, 1932, at its annual
    meeting in Fort Wingate, the Navajo Nation Council gave its support to
    proposed federal legislation which would restore the Paiute Strip to
    the Navajo Nation and to add lands to the Aneth area of the Nation,
    between Montezuma Creek and the Colorado border (what is referred to as
    the Aneth Extension).
        After Utah citizens voiced opposition to the proposed addition of
    the Aneth Extension and the Paiute Strip to the Navajo Nation, the
    Commissioner of Indian Affairs negotiated on behalf of the Navajo
    Nation with a Utah committee made up of San Juan County representatives
    to satisfy their concerns. In order to gain the Utah committees'
    support for the 1933 Act, the Commissioner of Indian Affairs made
    several concessions to the Utah committee. These concessions included
    prohibitions on further Native American homesteads or allotments in San
    Juan County, fencing of Native allotments outside the new Navajo Nation
    boundaries, fencing of the Aneth Extension's northern boundary, and
    agreement that state game laws would apply to Navajos hunting outside
    the Nation's boundaries. The proposed legislation also included an
    unusual provision that in the event oil and gas was discovered in the
    Aneth Extension and the Paiute Strip, instead of all net oil and gas
    royalties going to the Federal Government to administer on behalf of
    Navajo citizens, 37\1/2\ percent of those royalties would instead go to
    the State of Utah to be administered for ``the tuition of Indian
    children in white schools and/or in the building of roads across [the
    newly added lands], or for the benefit of the Indians residing
    therein.'' A final concession to Utah in the proposed legislation
    provided that Utah could exchange any state school trust lands inside
    the Aneth Extension and the Paiute Strip for equivalent federal lands,
    and that any fees or commissions for the exchange would be waived. The
    Federal Government enacted the legislation Congress in 1933, as Pub. L.
    No. 403, 47 Stat. 1418 (1933) (``1933 Act'').
        In 1958, by Act of Congress, the Navajo Nation was further expanded
    within San Juan County. Under the 1958 Act, the Navajo Nation and the
    United States government exchanged Navajo Nation lands at Glen Canyon
    Dam and Page, Arizona for federal lands northwest of and adjacent to
    the Aneth Extension, including the McCracken Mesa area. In 1949 and
    1998, with the Navajo Nation as party to the negotiations, state school
    trust lands within the Navajo Nation were made Navajo Trust Lands in
    exchange for other federal lands given to Utah. Currently, negotiations
    are under way to exchange school trust lands in the Aneth Extension
    with other federal lands under authority of the 1933 Act.
        In 1968, Congress amended the 1933 Act, redefined the purposes of
    the UTNF, and expanded its class of beneficiaries to include all
    Navajos in San Juan County. The amended legislation provided that trust
    monies can be used ``for the health, education and general welfare of
    the Navajo's residing in San Juan County.'' The 1968 Amendments also
    provided that trust funds could be used for projects off the Navajo
    Nation provided that the ``benefits'' were proportional to the
    expenditures from the trust. This vague term ``proportional'' provided
    one of the main vehicles for mismanagement of the trust monies.

    The Navajo Nation Has Sovereignty over Its Lands, Resources and
            Citizens
        The Navajo Nation is a sovereign Native Nation located in the
    southwestern United States with territory in the States of New Mexico,
    Arizona and Utah. Numerous Executive Orders, Acts of Congress and
    Treaties have guaranteed the rights of our Nation to the surface use,
    and the subsurface mineral resources, of much of our traditional lands.
    For over forty years, the Navajo Nation has enjoyed a government-to-
    government relationship with the United States, respectful of the
    Nation's sovereignty and self-determination in its own affairs, and
    free of the policies of paternalism which have blemished the past. It
    remains critical to the sovereignty and self-determination of the
    Navajo Nation that the United States respect our government-to-
    government relationship in deciding matters that uniquely concern and
    affect Navajo lands, resources and citizens. It is also crucial to the
    integrity of our Nation and its political institutions that passage of
    any federal legislation directly affecting our interests is done with
    the consent of the Navajo Nation government.
        The Utah Navajo Trust Fund is capitalized completely by royalties
    from Navajo Nation mineral leases on Navajo Nation lands in Utah which
    were added to the Navajo reservation in 1933. Since the 1970s, the
    Navajo Nation has been the fiscal agent for all UNTF royalties,
    distributing money every year to the State of Utah out of the Nation's
    general funds, for investment in the UNTF. The beneficiaries of the
    UNTF are those Navajo citizens residing in San Juan County, Utah. Only
    members of the Navajo Nation are eligible beneficiaries of the UNTF.
    The future of the UNTF is clearly a Navajo Nation issue and Congress
    should respect our sovereignty in this matter.

    The Navajo Nation Was Never Consulted and Is Adamantly Opposed to S.
            1690
        In spite of the Navajo Nation's considerable interest in the future
    of the Utah Navajo Trust Fund, including who will be designated as the
    new trustee, S. 1690 was introduced by the Honorable Senator Bennett
    without even a single consultation by the Senator or his staff with the
    Navajo Nation government.
        The Navajo Nation is adamantly opposed to S. 1690. S. 1690 would
    give the federal trust responsibility for royalties from Navajo Nation
    mineral leases to a non-profit corporation, the Utah Dineh Corporation,
    which was not even in existence when the bill was introduced. S. 1690
    would give control over approximately thirty (30) million dollars in
    trust funds and assets, as well as an additional 6 to 8 million dollars
    a year of royalties from Navajo mineral leases, to a corporation with
    zero experience as a trustee, and absolutely no outside capital. In the
    event of any breach of trust by the Utah Dineh Corporation, the
    beneficiaries would have no remedy against the corporation. S. 1690
    fails to ensure any accountability or transparency in the use of trust
    fund monies and fails to ensure that the trust will exist into
    perpetuity for the benefit of future generations of Navajo
    beneficiaries. S. 1690 broadly expands the original purposes of the
    trust and would lead to misuse and misappropriation of trust funds. S.
    1690 would violate the common law of trusts by designating a handful of
    beneficiaries as the trustee and causing countless conflicts of
    interest. S. 1690 is a recipe for disaster.
        On the other hand, the Navajo Nation would be an accountable,
    responsible and transparent trustee of the Utah Navajo Trust Fund. In
    the over 30 years as fiscal agent for the royalties for the UNTF, the
    Navajo Nation has never breached its fiduciary responsibilities to the
    trust fund. The Navajo Nation also has a successful record of managing,
    investing, and increasing the value of multiple Navajo Nation trust
    accounts, including many multi-million dollar accounts. The Navajo
    Nation has a well established budgeting and auditing process for the
    appropriation of funds. Importantly, unlike the Utah Dineh Corporation,
    the Navajo Nation has sufficient outside assets to be accountable to
    the beneficiaries.
        With the Navajo Nation as trustee, the Office of the Utah Navajo
    Commission, centrally located in Montezuma Creek in Aneth, Utah, would
    be the trust administrator. The Office of the Utah Navajo Commission
    already administers and leverages money from the Utah Navajo
    Revitalization Fund, the UNTF, Navajo Nation funds, and federal funds
    for projects in Navajo Country in San Juan County, Utah. Having the
    Office of the Utah Navajo Commission as trust administrator would thus
    create economies of scale, and would greatly reduce administrative
    costs for the Utah Navajo Trust Fund.
        The Navajo Nation is very concerned that there is a rush to
    designate a non-profit corporation as the new trustee of the UNTF
    especially where there is no transparency or accountability. The trust
    must be grown and managed successfully not only to pay for needed
    expenditures in the short term, but for the benefit of future
    generations of Navajos in San Juan County as well. The trust also
    should be managed to ensure its survival in perpetuity. The Navajo
    Nation is committed to ensuring that the UNTF continues to grow and
    benefit current and future generations of Utah Navajos and the Navajo
    Nation should be made the new trustee.

    Conclusion
        Designating the Navajo Nation as trustee of the UNTF is the only
    position consistent with the policy established by the United States
    Congress to recognize the sovereignty of the Navajo Nation and the
    right of the Navajo Nation to self-determination in matters which
    concern the Nation's lands, resources and citizens. S. 1690 was
    introduced without a single consultation with the Navajo Nation
    government and would give the important federal trust responsibility
    over the Nation's resources and citizens to some non-profit
    corporation. S. 1690 is an affront to the Navajo Nation's sovereignty
    and right to self determination and this Committee should oppose it.
        I have appreciated this opportunity to provide testimony to the
    Senate Committee on Indian Affairs. The Navajo Nation looks forward to
    working with Congress, this Committee and the Utah delegation in a
    government-to-government relationship as reasonable legislation is
    introduced to secure the future of the Utah Navajo Trust Fund. Thank
    you.

            STATEMENT OF HON. JOHN BILLIE, PRESIDENT, ANETH
             CHAPTER, NAVAJO NATION; CHAIRMAN, NAVAJO UTAH
                               COMMISSION

        Mr. Billie. Good morning, Chairman. My name is John Billie.
    I am the President of the Aneth Chapter and the Chairman of the
    Navajo Utah Commission. And the Chapter opposes S. 1690 for the
    following reasons.
        There was no consultation on this bill. Second, there was
    no adequate public hearing on this bill. Third, a resolution
    was presented to community to support this bill and
    corporation, but that resolution failed.
        We, as Aneth Chapter, support the Navajo Nation as trustee
    with adequate representation of the Aneth Chapter in the
    decision-making furthermore.
        Thank you for your time.
        [The prepared statement of Mr. Billie follows:]

       Prepared Statement of Hon. John Billie, President, Aneth Chapter,
                Navajo Nation; Chairman, Navajo Utah Commission

        Chairman Dorgan and Honorable Members of the Committee on Indian
    Affairs,
        My name is John Billie, I had the opportunity and honor of
    participating in the U.S. Senate Committee on Indian Affairs'
    Congressional hearing on S. 1690 on December 09, 2009. The Honorable
    Senator Robert Bennett is the sponsor of S. 1690. As a leader of the
    Navajo people of Utah, I currently hold the positions of Aneth Chapter
    President and Chairman of the Navajo Utah Commission. I sincerely thank
    the Committee for my participation. In the short amount of time
    allotted for testimony, I was unable to expand on my remarks or offer
    clarification on some of the statements I thought were misleading. I am
    respectfully submitting additional written comments relative to the
    issues discussed. I also would like to apologize for an inappropriate
    remark made by one of the presenters. This is explained further in the
    first capsule. Expanded comments on the other issues follows as well.

    Kenneth Maryboy Introduction
        As an elected leader of the Navajo people, I took an oath to uphold
    the laws of the Navajo Nation and represent the people to the best of
    my ability. It is due to this oath that I took offense at some of
    Council Delegate Kenneth Maryboy's remarks including utilization of a
    Navajo phrase spoken in the Navajo language at the beginning of his
    introduction. Mr. Maryboy used a Navajo phrase generally meaning he was
    addressing the enemy and going into battle. Many Navajo people
    listening to the hearing's webcast were offended. This is a phrase
    utilized by Navajo medicine people in ceremonies preparing warriors
    going off to war against a real enemy. Many found this disturbing and
    inappropriate because it was basically a threat to individuals who were
    not the enemy. Mr. Maryboy was elected to his duel capacity as Navajo
    Nation Council Delegate and San Juan County Commissioner by the Navajo
    people of Utah. Mr. Maryboy owes an apology to the Navajo people,
    members of the Senate Indian Affairs Committee, San Juan Commission,
    and people of Utah.

    Special Interest Group
        The special interest creating the Utah Dineh Corporation include
    former tribal leaders, a non-Indian CPA, and Zions Bank. Mark Maryboy,
    one of the former leaders worked exclusively with CPA Phil Lyman to
    develop the Corporation with ultimate intent to install the two
    individuals as CEO and CFO. The plan was outlined in an unsuccessful
    request for funding from the state's Utah Navajo Revitalization Fund.
    Zions Bank of Utah revealed its interest with a contribution of $10,000
    in this application. Phil Lyman also owns an investment firm and has
    created strong ties with Zions Bank. Mr. Lyman basically created the
    Corporation single-handedly. Mr. Lyman also conducted a media campaign
    with misinformation and made-up quotes of support. The Navajo people
    found Mr. Lyman's cavalier attitude about tribal sovereignty equally
    disturbing. The board for the Dineh Corporation was hand-picked
    supporters--there was no process in selecting the board.

    Navajo Nation Consultation
        The Navajo people do not agree with Sen. Bennett's definition of
    consultation. Sen. Bennett introduced S. 1690 on September 21, 2009.
    The Senator did provide a courtesy listening session with Navajo
    officials on October 2009. Sen. Bennett simply indicated he was moving
    forward with his legislation after a brief visit. The Navajo Nation
    considers the federal policy on Indian consultation to be a more
    meaningful concept that involves recognition of a government to
    government relationship, respect, and interactive dialogue. Sen.
    Bennett certainly didn't provide this in drafting an ill-advised
    legislation.

    Navajo Nation Services to Utah
        During his many years in Congress, Sen. Bennett has never visited
    the Navajo Nation including the Utah portion of the reservation. It is
    simply not true for Sen. Bennett to claim Navajo Nation disinterest or
    lack of service in the Utah section of the Navajo Nation. With all due
    respect, Sen. Bennett is listening only to a small fraction of Navajos
    and relying on misinformation instead of deeper exploration of the
    issues in order to craft proper and responsible legislation. The 62.5
    percent collected by the Navajo Nation from the Utah oil royalties goes
    into the tribal treasury. These funds supplement revenues from other
    tribal sources to create a general fund budget. This budget provides
    basic services to all chapters including Utah chapters. The Navajo
    Nation is further providing a share of federal health care dollars to
    the Utah Navajo Health System through a Pubic Law 638 contract. The
    Navajo Nation also created a Utah district court in 2007 to serve the
    Utah portion of the Navajo Nation. The Navajo Nation established and is
    still operating a Regional Business Development Office in Utah to
    assist Utah chapters with economic endeavors. The Navajo Nation
    developed the Utah Navajo Commission in 1992 to specifically address
    and represent the interest of Utah Navajos. This tribal sub-unit has
    provided a much-needed voice and advocacy for Utah Navajos. It has
    leveraged significant non-tribal funding for the benefit of Utah
    Navajos. No other region on the Navajo Nation has a Commission of this
    nature and mandate.

    Supporting Chapter Resolutions
        Sen. Bennett's assertion that there is overwhelming support for
    designating the Utah Dineh Corporation as trustee is not true. Two of
    the seven Utah chapters including Aneth Chapter and Dennehotso Chapter
    are opposing the Utah Dineh Corporation. A supporting resolution from a
    Navajo chapter requires only 25 votes--no where near the chapter's
    total membership. A significant number of the Navajo people do not read
    or write. This is the population that attend chapter meetings
    regularly. It is easy to manipulate the vote with fear-mongering. This
    was the tactics utilized by a small group of vocal supporters creating
    the Utah Dineh Corporation. The Navajo people were told the Navajo
    Nation would steal their money and that tribal leaders have the ability
    to disregard existing laws including federal rules and regulations. The
    U.S. Congress knows this is not true. This is the tactic found in
    Kenneth Maryboy's oral and written testimony. Mr. Maryboy is trying to
    mislead the Senate Indian Affairs Committee with selective,
    sensationalized headlines.

    Navajo Nation Collaboration with Utah Chapters
        The Navajo Nation established the Navajo Utah Commission in 1992 to
    represent the Utah chapters collectively in regards to issues and
    interest impacting the Navajo people of Utah. All seven chapters have
    an elected representative on the commission. The Navajo Nation has
    worked with the Navajo Utah Commission since the state of Utah
    announced its decision to resign as trustee of the Utah Navajo Trust
    Fund. The commission passed resolution no. NUCMAY-445-08 in May 2008
    supporting the position of the Navajo Nation regarding designation of a
    new trustee. Kenneth Maryboy's claim that only two Navajo Nation
    Council delegates represent the Utah Navajos is erroneous. Most Utah
    chapters straddle the Utah-Arizona state line. The Council delegates do
    not discriminate against certain sections of their chapter
    jurisdiction. In fact, two other chapters (Oljato and Navajo Mountain)
    currently have Council delegates from Arizona despite a larger Utah
    Navajo population. Representation is the choice of the people.

    Support for Alternate Federal Legislation
        The Navajo Nation enacted resolution no. IGRMY-107-08 on May 19,
    2008 establishing the Navajo Nation's official position on designation
    of a new trustee for the Utah Navajo Trust Fund. Moving forward, the
    Navajo Nation enacted resolution no. IGRF-24-09 on February 10, 2009
    proposing federal legislation for selection of a new trustee. The
    Navajo Nation made every attempt to work with the Utah Congressional
    delegation to no avail. Sen. Bennett's introduction and advocacy for S.
    1690 includes absolutely no consultation with the Navajo Nation. The
    Senator's attitude has been that ``we created legislation that doesn't
    need your participation'' despite the fact that there's a government to
    government relationship in existence and that the issue involves lands,
    resources, and citizens on Navajo Nation trust lands. The Navajo Nation
    has now focused efforts on working with the Congressional delegations
    from Arizona and New Mexico to introduce alternate federal legislation
    in naming the Navajo Nation as trustee for the Utah Navajo Trust Fund.

    Utah Resignation as Trustee
        Sen. Bennett is correct in stating that the state of Utah's
    relationship with the Utah Navajo Trust Fund beneficiary has not been
    harmonious. There has been four major lawsuits with the fourth case
    Pelt v. Utah currently in settlement mediation. The cases have involved
    mismanagement, misappropriations, and lack of accountability regarding
    expenditures of trust fund revenues. It is unfortunate to say Navajo
    individuals are involved in the Pelt V. Utah litigation. This is why
    the right trustee is absolutely critical. Fiduciary responsibilities
    makes it imperative to make the right choice for the Utah Navajo Trust
    Fund. The next trustee must have proper credentials, capacity, internal
    assets, and legal mechanism to fulfill trust responsibilities. It is
    essential to manage the Utah Navajo Trust Fund in perpetuity for future
    generations.

    Utah Dineh Corporation Capacity
        As the Senate Indian Affairs Committee was informed, the Utah Dineh
    Corporation was not even incorporated when S. 1690 was introduced by
    Sen. Bennett. The incorporation documents and by-laws have not been
    made available to the Utah Navajo Trust Fund beneficiary. There was no
    process for the so-called public hearing. Meetings termed as public
    hearings lack transcripts. The Navajo Nation was never invited to
    participate. Despite clear self-interest, personal gain, conflict of
    interest, and lack of proper credentials, a select group of individuals
    organizing the Utah Dineh Corporation are already appointing themselves
    as CEO, CFO, and who knows what. The selection of a non-profit as
    trustee will mean enormous administrative burden on the trust fund,
    resources that should be more appropriately spent on the beneficiary.
    Sen. Bennett's assertion that the Navajo Nation is requesting a fee to
    serve as trustee of the Utah Navajo Trust Fund is not entirely correct.
    It is true there will be a need to spend some trust fund monies for
    administrative purposes. However, what the Navajo Nation will utilize
    for management will not be as extensive as the Utah Dineh Corporation.
    This non-profit is a totally new experience with no capital or assets
    of its own. The Navajo Nation has funded the Navajo Utah Commission
    since 1992. This amount will be matched with trust fund appropriations
    to staff and administer the trust fund in appropriate manner. It does
    not make sense to designate an inexperienced, un-capitalized, and
    secretive non-profit to serve as trustee. The Utah Navajos deserve full
    protection and the highest level of fiduciary responsibility for care
    of limited and valuable resources.

        The Chairman. Thank you very much.
        As I indicated earlier, Senator Bennett is here and will be
    providing his perspective on the legislation.
        Senator Bennett authored the legislation and had requested
    a hearing. I was happy to do that. It appears to me that we
    have significant differences of opinion here at the witness
    table, so let me ask a few questions.
        Mr. Maryboy, my understanding is that the State of Utah
    decided that they didn't want to be managing these trust funds.
    At some moment, they made that decision and took some action by
    State legislation to accomplish that. Is that correct?
        Mr. Maryboy. Yes, sir.
        The Chairman. And so with the State deciding that they
    don't wish to manage these funds, then the question is, who
    should manage the funds and how do you develop a consensus for
    deciding who should manage the funds. How would you have
    proceeded to do that were you able to do it by fiat?
        Mr. Maryboy. Well, Mr. Chairman, it is very simple, that
    the turmoil that the San Juan County, Utah has been faced with
    many years, and there's several of mismanagement here and
    there. So we took it upon ourselves that this would be the best
    solutions for the Utah Navajos.
        And mind you, Mr. Chairman, we do have seven supporting
    resolutions, and this consists of 10,500 residents in San Juan
    County, Utah. And to also say that Mr. Billie here represents
    Aneth Chapter and his Chapter passed a resolution. So he is
    representing less than a handful out of that 10,500
    representatives.
        The Chairman. You indicated that six of the seven chapters
    have expressed some level of support for this?
        Mr. Maryboy. Yes, they did.
        The Chairman. Have you provided the Committee with whatever
    documents exist for that?
        Mr. Maryboy. I think the document is out there. Yes, sir.
        The Chairman. Mr. Shelly, what about that? Mr. Maryboy
    suggests that there is fairly substantial support and that you
    represent a much smaller segment of the population in terms of
    opposition.
        Mr. Shelly. That would be a question, for me, Mr. Chairman,
    is that the Navajo Nation wants to be a trustee to the Navajo
    Utah Trust Fund and we have proven that before. From the
    community, I believe Mr. Billie probably would answer that. If
    you don't mind, I would like to give him that question that you
    are asking.
        The Chairman. All right.
        Mr. Billie. Mr. Chair, we know that the seven chapters
    passed a resolution not going to the Navajo Nation, but the
    bill has been introduced and therefore it was brought back to
    some of the community members. And as they find out that a
    small special interest group is spearheading this whole thing
    and there was no consultation on this bill representing from
    our community.
        The Chairman. Mr. Maryboy, what is the governance of the
    Utah Dineh Corporation? How is it constructed, to the best of
    your knowledge? I will ask the question of Senator Bennett as
    well.
        Mr. Maryboy. Mr. Chairman, this particular government is
    put together as any simple government non-profit corporation.
    But in there, we are stand for audit from the United States
    OMB. The Nation, whomever, is we are open for that.
        And furthermore, the Vice President alluded to the common
    law. I believe that in some of the testimony that our Attorney
    General of the Navajo Nation did highlighted that, the Navajo
    Nation common law was never been focus by the Navajo Nation
    itself, along with the legislative and the executive branch.
        The Chairman. What measures would the Utah Dineh
    Corporation have in place to prevent mismanagement or misuse of
    trust funds?
        Mr. Maryboy. Mr. Chairman, we stand to be corrected by any
    oversight as the auditors, the attorneys. In the bylaw, it does
    state that.
        The Chairman. My guess is both of you would agree with the
    proposition that what you really want, no matter what the
    organization is that provides this management, you want to make
    sure these funds are managed appropriately; that you are not
    cheated out of income or assets that belong to the Navajo
    Nations. Right?
        I say that on the morning following the announcement about
    the Cobell case. The most important issue here, in my judgment,
    is not so much which specific organization does this, but that
    finally, at last, at long, long last, we no longer have
    mismanagement of Indian funds by anybody, the Interior
    Department or the Federal Government, or a State that has
    responsibilities, that doesn't manage it properly.
        So, you know, the debate is not about proper management. We
    all support that and expect that, I assume.
        Let me ask, what is the enrolled membership of the Navajos
    in Utah? Can someone tell me?
        Mr. Shelly. Ten thousand people is what I hear from Mr.
    Billie.
        The Chairman. Okay. If the Navajo Nation does not support
    the bill, as Mr. Shelly, you indicated. Mr. Maryboy says that
    the bulk of the Utah Navajos do. But, if the Navajo Nation
    would not support the bill introduced by Senator Bennett, are
    there alternative proposals that you see Congress should act on
    that would avoid loss of trust funds?
        Mr. Shelly. Support from I would say--can you repeat that
    question again?
        The Chairman. Yes. If in fact the Navajo Nation decides not
    to support this, a proposal by Senator Bennett to have this
    non-profit, Utah Dineh Corporation, managing the funds, if you
    do not support that, then what are the alternatives that you do
    support in order to avoid any loss of trust fund benefits?
        Mr. Maryboy?
        Mr. Maryboy. Mr. Chair, I am here representing the Utah
    Navajos. And I think our position is very simple when you pose
    that question. I think the Utah Navajo is ready to be the
    trustee of this funding as the Dineh Corporation and it is very
    simple. The Utah Navajos have been neglected for many, many
    years and that is one of the concerns of the Utah Navajos. And
    I believe that we are ready and we are consistent with every
    chapter all the way from Aneth to Navajo Mountain that we are
    ready to do this.
        The Chairman. Senator Udall, do you wish to inquire?

                     STATEMENT OF HON. TOM UDALL,
                      U.S. SENATOR FROM NEW MEXICO

        Senator Udall. Thank you, Chairman Dorgan, and thank you
    for this hearing.
        Mr. Billie, you use the term, and I think, and just correct
    me if I am describing this incorrectly, but I think you said
    that the chapters did vote on it. And then when they learned
    that there was, I think, a small special interest group heading
    up the whole thing, there has been a reaction against that.
        Is that correct? Did I hear you say that?
        Mr. Billie. Yes, Senator, that is correct.
        Senator Udall. And so could you tell us who the small
    special interest group heading up the whole thing on the
    otherwise, I guess you are talking about, that you are opposed
    to? Who is that? Who is behind that?
        Mr. Billie. Senator, I believe that it is the Dineh
    Corporation that has been established. They are the small
    special interest group, with the interests of subcontracting
    their own CEO to themselves, and those are the special interest
    group, the committee themselves also.
        And the proper protocol on this is that the Navajo Nation
    has to establish this corporation by law from the Navajo
    Nation, and that is how it is done properly, protocol.
        Senator Udall. So what interests are the group, the Utah
    Dineh Corporation? What interest are they representing? Who is
    behind the incorporation of that?
        Mr. Billie. Do you want names?
        Senator Udall. Yes. Well, or interests. I mean, it is oil
    and gas? What are the special interests?
        Mr. Billie. Well, special interests by meaning is the Dineh
    Corporation, some of the Board Members and the future CEO, and
    also so-called the CEO from former UNDC members, which used to
    be part of the trustee before the Navajo Utah Trust became
    established in 1997, I think it was.
        So those are the people that are spearheading this non-
    profit corporation without any consultation to the community,
    and that is why there was a big reaction regarding this bill.
        Senator Udall. And the reaction was a result of learning
    who was behind the corporation?
        Mr. Billie. Yes.
        Senator Udall. And it sounds like you are saying that there
    are seven chapters in the Utah area. Is that correct?
        Mr. Billie. Yes.
        Senator Udall. Within the part of the Navajo Nation, local
    form of government, but also within the State of Utah. And what
    I heard Council Delegate Maryboy say is that the seven had
    voted to support this effort. I heard him say that, and you are
    saying that they are having second thoughts now.
        Mr. Billie. Yes, they are having second thoughts because of
    this Utah Dineh Corporation that is being established, which
    was never given back to the community how it is going to be
    established and how it will be run. It was never consulted to
    the community. That is why there has been a big reaction to
    that, including the bill.
        Senator Udall. Now, Vice President Shelly, has there been
    an attempt by the Navajo Nation, working with these local
    chapters, to work this whole thing out and to try to come up
    with a solution that the Navajo Nation wants? Has there been an
    attempt? Has there been a committee appointed by the Council?
    Has there been any action on that part? Is the President or
    have you appointed people to go out and try to work this issue
    out?
        Mr. Shelly. Thank you, Senator. Yes. We, the Navajo Nation
    responded to the community concern. They have expressed their
    interest and tried to manage their own. This particular fund,
    in the past there were a lot of the people out there in the
    Utah portion, the Utah Navajo people were denied, and there is
    places where they were very concerned about some of this money
    never really came down to them.
        So they are the one that is voicing out. And there is a
    commissioner already in place, and for the past so many years,
    they have been ignored. And these are the people that are
    coming up and opposing S. 1690, and these are the people at the
    local level, the grassroots level that are saying that.
        We still didn't get the money that supposed to be used for
    us. It never came down to us. And that is what they are saying.
        Senator Udall. Vice President Shelly, is there a piece of
    Federal legislation that you are supporting that would resolve
    this issue?
        Mr. Shelly. Not this legislation, no.
        Senator Udall. Not S. 1690, no.
        Mr. Shelly. No, we are not supporting it.
        Senator Udall. But is the Navajo Nation supporting another
    piece of legislation? Is there something that you think would
    resolve this issue?
        Mr. Shelly. What it is, we want the Chapter, the Utah
    people to determine how they want to manage this particular
    fund. We want to be the trustee to manage for them, and let
    them tell us how they want to manage this and how they want to
    set themselves up on this particular trust fund.
        Senator Udall. Yes.
        Thank you very much, Chairman Dorgan.
        The Chairman. Senator Udall, thank you very much.
        I am going to thank the witnesses for being with us, and if
    we have additional written questions, we will submit written
    questions to you.
        We will ask the Administration, as well, for its formal
    views before moving forward.
        Yes, Mr. Maryboy, you wanted to make another comment?
        Mr. Maryboy. Mr. Chairman, yes, the question for Senator
    Udall. The Board are elected by the chapters. We have
    representatives from TeecNosPos and Mexican Water, Red Mesa,
    all the way down to Navajo Mountain, Blue Mountain Dineh. And
    the 1690 had been a public hearing at the Chapters. That is how
    they have appointed these individuals. Our Chair is from Navajo
    Mountain, Willie Gray Eyes, and I have my Vice Chair here with
    me, and of course, the Secretary Treasurer from Blue Mountain
    Dineh.
        And nowhere at the public hearings and other hearings that
    we have held, the Navajo Nation came to be part of the
    hearings. And as you know, that the Navajo Nation does not
    support this because the 88 of the Council and furthermore the
    Navajo Utah Commission, there is only two true Utah Navajos.
    The rest is Arizona.
        The Chairman. You said the Navajo Nation does not support
    this. What does that mean? Doesn't support what?
        Mr. Maryboy. The Navajo Nation does not support S. 1690.
    That is what I am alluding to, that the record shows that.
        The Chairman. How many members are on the Board?
        Mr. Maryboy. On the Utah Dineh Corporation?
        The Chairman. Yes.
        Mr. Maryboy. There is two representative from Aneth, one
    from Blue Mountain, and one from TeecNosPos, one from Red Mesa,
    one from Mexican Water, which I represent, two from Ojato, and
    one from Navajo Mountain.
        The Chairman. Are all the members of the Board enrolled
    members?
        Mr. Maryboy. Yes, they are.
        The Chairman. All right.
        Yes, sir?
        Mr. Billie. Again, Chair, what Mr. Maryboy is talking about
    is this Dineh Corporation. The Aneth Chapter did not endorse
    this Dineh Corporation and that is why that resolution has come
    to the table of the Aneth Chapter community, and that
    resolution failed, not to support the Dineh Corporation.
        The Chairman. All right.
        Mr. Shelly?
        Mr. Shelly. Mr. Chairman, Senator Udall, the beneficiary is
    controlling this trust fund. I believe that is a conflict of
    interest. And this is the biggest problem for the Navajo
    Nation. And this is what I said in my statement.
        The Chairman. All right.
        Next, we are going to hear from Senator Bennett. We thank
    the witnesses very much for being with us. Thank you so much.
        Senator Bennett, would you come up and take your place at
    the witness table? And we appreciate very much your being here
    today and your willingness to testify on the legislation.
        While Senator Bennett is coming up, we are having a hearing
    on two pieces of legislation today. This bill and the second is
    a hearing on the subject of oversight on the Interior
    Department backlogs on the use of tribal lands; that is, the
    applications for taking land into trust and so on. And we will
    have three witnesses there.
        Senator Bennett, welcome. You have had the opportunity to
    hear your fellow Utahans testify and we are anxious to hear
    your testimony as well.

                 STATEMENT OF HON. ROBERT F. BENNETT,
                         U.S. SENATOR FROM UTAH

        Senator Bennett. Thank you, Mr. Chairman, and I have a
    formal introduction which I would ask to be included in the
    record.
        The Chairman. Without objection.
        Senator Bennett. Let me give you a little bit of background
    with respect to this and do my best to try to clear up some
    ambiguity that may still be hanging over it.
        There is a sense of urgency with respect to resolving this
    issue. It is a Utah issue and it requires, I believe, a Utah-
    based solution. And as it became clear that this issue was
    going to arise last year, Mr. Ross Swimmer, who is the former
    Special Trustee for American Indians, recommended that there
    were two options for resolving the issue. One would be the
    Navajo Nation would take over; or the other would be the
    setting up of a non-profit with a Board of Navajo citizens.
        And as has been indicated here, the people directly
    affected in Utah overwhelmingly chose to go the route of the
    non-profit. It is true that there is one group out of this, and
    you have heard from them, that says no, but the vast majority
    of the Navajos in Utah have said they prefer the second
    recommendation from Mr. Swimmer and they have set it up. They
    have established a non-profit. They have established the Board
    of Directors with oversight and transparency and worked with
    lawyers to make sure that it is done properly.
        Now, here is the background of how we got here. This goes
    all the way back to 1933. Congress added approximately 52,000
    acres of land north of the San Juan River to the Navajo Nation.
    It was not part of the Navajo Nation prior to 1933, but it was
    added to compensate for reservation land that would be
    withdrawn by the creation of Lake Powell.
        So, the State of Utah at that time insisted that the future
    oil and gas revenue that would come off of this land be
    reserved for Utah Navajos. It was, after all, Utah Navajos who
    were losing their land, and they wanted to be sure that the oil
    and gas revenue that would come off this land would be
    dedicated to the Utah Navajos. And this was done with the State
    as the trustee. So, it was set up that the oil and gas revenue
    would be handled by the State solely for the benefit of the
    Utah Navajos.
        Now, by coincidence, all of this came up for review some 35
    years later, in 1968, and there was an amendment to the 1933
    Act to expand the class of beneficiaries to include all Navajos
    residing in San Juan County, Utah. The author of that amendment
    was the Senator from Utah, Wallace F. Bennett, with whom I was
    quite intimately acquainted. So that is a strong reason for me
    to stay interested in this issue.
        Now, I have heard from the Navajo Nation. They came to see
    me. The idea that there has been no consultation and no
    conversation is not entirely accurate. And they say, we
    guarantee you that if we get control of all of these funds, we
    will see to it that they still flow to the Utah Navajos. We
    will just take a small administrative fee for handling them.
        And you have heard the testimony, causing the Utah Navajos
    to say we are not entirely satisfied with that. We are not sure
    that that is what is going to happen; that if all of this money
    now goes to the Navajo Nation, which has responsibilities far
    beyond Utah, the temptation to take some of this money away
    from the Utah Navajos and use it for other imperatives of the
    Navajo Nation, we are afraid will be overwhelming.
        And indeed, that was one of the reasons why, given the two
    choices that were outlined by the Special Trustee, Mr. Swimmer,
    they thought it makes more sense for us to establish the non-
    profit corporation that will be in charge of this; that will
    see to it that all of the money that comes from these oil and
    gas revenues will be available to the Utah Navajos.
        Now, as I understand it, there are seven different groups
    involved in the Utah Navajos that have examined this. All seven
    voted for it. The reconsideration that you heard about is
    coming in one of the seven, but the other six remain firmly
    solid in their support for this legislation and this particular
    approach.
        So that is the history of it. There is some urgency because
    the State has said we can no longer perform this function, and
    we will withdraw from this function at the end of this year,
    that is December 31st. I have a letter from the State
    supporting going forward in the manner that this bill would go
    forward. I believe if we show any kind of progress here in the
    Congress, the State will say, well, we will continue to manage
    this for a few more months while it gets resolved in the
    Congress.
        But the problem if, if it does not get resolved, there will
    be students who are planning on going to college on the basis
    of funds that have historically been made available from this
    source of revenue that will not be able to go to college. There
    will be health care that has historically been funded from this
    that will not be made available.
        The whole thing will come to a halt if we don't get this
    resolved, and it is for that purpose that I have introduced the
    legislation.
        That is the background and history of it, and I will be
    happy to respond to any questions you might have.
        [The prepared statement of Senator Bennett follows:]

      Prepared Statement of Hon. Robert F. Bennett, U.S. Senator from Utah

        Good Morning Mr. Chairman, Senator Barrasso, and members of the
    Committee. I appreciate you taking the time to hold a hearing on this
    important issue in my home state.
        In 1933, Congress added approximately 52,000 acres of land north of
    the San Juan River to the Navajo Reservation in Utah to compensate for
    land that had been taken to accommodate what would become Lake Powell.
    This area is known as the Aneth Extension. It was believed that this
    land held a high potential for oil and gas production. In anticipation
    of this development, and as part of an agreement between the Federal
    Government and the state of Utah, the 1933 legislation created a
    permanent trust specifically for the benefit of Utah Navajos, funded by
    a portion of any royalties from oil and gas development in the Aneth
    extension. The act mandated that 37.5 percent of the royalties from
    this 52,000 acre area be used for the education of Navajo children, the
    construction and maintenance of reservation roads, and other benefits
    of the Navajos living in the Aneth Extension. The remainder of the
    royalties would be sent to the Navajo Nation. The legislation
    designated the State of Utah as the trustee responsible for managing
    this fund, named the Utah Navajo Trust Fund.
        The State of Utah only consented to removing the Aneth lands from
    the public domain and adding them to the Navajo Reservation when an
    agreement was reached to dedicate a portion of the revenue generated
    from the harvesting of oil and gas resources to the areas in Utah where
    the resource was produced. The State insisted on this arrangement to
    ensure that the Navajos living on the Utah portion of the Navajo
    Reservation received some direct benefit from the development in their
    back yards, and did not have to solely rely on the historically
    inadequate appropriations from the Nation's general funds. Congress
    recognized this distinction in the 1933 Act and did so again in 1968
    when my father, Senator Wallace F. Bennett, amended the law to broaden
    the class of beneficiaries to include all Navajos residing in San Juan
    County. My father's amendment also expanded the purposes of the fund to
    include the health, education and general welfare of the beneficiaries.
        The Utah Navajos and the State of Utah have often clashed over the
    management of the trust fund and several lawsuits have resulted from
    this discord. As a result of this sometimes acrimonious relationship,
    the Utah State legislature allowed the law that created the mechanism
    for distributing the Utah Navajo Trust Fund benefits to sunset. In
    2007, Governor Huntsman notified the Utah Congressional Delegation that
    the state desired to be relieved of its trustee responsibilities.
    December 31, 2009 is the last day that Utah will have a legal mechanism
    in place to distribute funds to the various programs established for
    the benefit of San Juan County Navajos. The cessation of those
    distributions will shut down the housing and scholarship programs that
    provide the bulk of assistance to the Navajos of San Juan County
    resulting in even greater hardship in one of the poorest regions in
    Utah.
        The Navajos residing in San Juan County are my constituents. At the
    beginning of this year I received resolutions from six of the seven
    Utah Navajo Chapters (the seventh chapter has fewer than fifty members
    residing in Utah) endorsing the idea of designating a new trustee as
    long as that trustee is not the Navajo Nation. The response to my
    question of why they did not want the Navajo Nation to serve as trustee
    was that they believe the Navajo Nation will use the Utah Navajo Trust
    Fund for purposes other than what the 1933 Act and 1968 amendments
    require.
        These Chapter resolutions also endorsed the idea of allowing the
    San Juan Navajos to manage their own resources. Because I represent
    their interests as Utahns in the United States Senate and share their
    desire to grant them the ability to determine their own future, I
    agreed to work with them in resolving this problem.
        S. 1690 respects the precedent established by the Congress in 1933
    and reaffirmed in 1968 that the Utah Navajos are unique in this one
    respect from the rest of the Navajo Nation. I believe Congress'
    recognition that the Utah Navajos residing in San Juan County are
    entitled to receive a direct share of the revenue from resources
    developed within the Aneth Extension is evidence that this is a Utah
    issue and therefore, a Utah based trustee should be the solution.
        On June 19, 2008, Mr. Ross Swimmer, Special Trustee for American
    Indians, testified before the House Committee on Natural Resources in
    an oversight hearing for the Utah Navajo Trust Fund. He noted in his
    testimony that his office did not have the capacity to administer this
    fund in the manner required by the 1933 Act. He concludes by stating it
    would be appropriate for either the Navajo Nation or a nonprofit
    organization made up of Navajo citizens to serve as the trustee.
        This second option identified by Mr. Swimmer opens the door for a
    unique solution to this problem that will allow the Utah Navajos an
    opportunity they have never been able to fully experience--that
    experience known as self determination.
        To this end, the Utah Navajos have used the non-profit organization
    option recommended by the Special Trustee for American Indians as their
    model in creating the Utah Dineh Corporation. This corporation has a
    board of directors comprised of members from each Utah Chapter. The
    Utah Dineh Corporation is a Utah Nonprofit Corporation organized for
    the specific purpose of fulfilling the mandate of the 1933 and 1968
    Acts. The Corporation will contract with a private investment firm for
    money management and establish processes whereby the money collected
    and investment earned will be used to further the intent of the trust
    fund.
        The intent of S. 1690 is to designate a new trustee in the manner
    recommend by Mr. Swimmer and, in doing so, allow the Utah Navajos to
    manage their own assets. For far too long the Utah Navajos have been
    poorly served by a paternalistic system that is often abused. While no
    system of trust responsibility is exempt from the potential of
    mismanagement, I trust that the San Juan County Navajos are capable of
    acting in the collective good for today's and future generations of
    their people. I believe the Congress should do the right thing by fully
    enabling self determination for them. S. 1690 would accomplish that
    goal. Thank you allowing me to testify and holding today's hearing on
    this important legislation.

        The Chairman. Senator Bennett, thank you very much.
        Let me ask you about the issue of consultation. I think you
    referred to it at the start of your testimony.
        Senator Bennett. Yes.
        The Chairman. Some have said that this was a surprise to
    them. There had been no consultation. You indicated you had had
    meetings with the Navajo. So would you amplify on that?
        Senator Bennett. Well, a group of them came to see me in my
    office after the introduction of the bill to discuss it. And we
    talked it through, and they outlined their reasons for wanting
    the other alternative. That is, that all of the money should go
    to the Navajo Nation. And that was the meeting in which they
    promised me if you allow it all to come to us, we assure you
    that after we have taken our administrative fee, it will all
    flow back to the Utah Navajos. The Utah Navajos, to be very
    blunt about it, put very little stock in those assurances.
        The Chairman. The Board of Directors of the non-profit, as
    I asked earlier, they are all enrolled members of the Navajo
    Nation?
        Senator Bennett. Yes, as Mr. Maryboy indicated, they are
    chosen by the various groups, but there is a mechanism for, I
    suppose in Federal terms we might call it an Inspector General
    or something of that kind, to see to it that the money is
    properly handled and there is proper accounting and
    transparency here.
        The comment that was made that it is the beneficiaries that
    are administering it, it is indeed the representatives of the
    beneficiaries that are administering it. But their concern is
    that if it goes to the Navajo Nation, the people who are
    administering it have little or no interest in those people who
    have historically been the beneficiaries and that they will
    lose the money. I can't put it any more bluntly than that.
        The Chairman. Now, you have described also what you
    consider the urgency of getting this resolved, because the
    State is withdrawing. Is that correct?
        Senator Bennett. Yes. That is correct.
        The Chairman. Tell me where the assets are when the State
    withdraws at this point at the end of December?
        Senator Bennett. Well, I have a list of the assets that I
    will be happy to supply the Committee as to where they are and
    what might happen to them.
        The Chairman. If you would do that for the record, I would
    appreciate that.
        Senator Bennett. Surely. We will do that.
        The Chairman. Senator Udall?
        Senator Udall. Thank you, Senator Dorgan.
        And thank you, Senator Bennett for coming forward and being
    available to answer questions on this.
        From your description of the history, it sounds like the
    State of Utah has been involved in this since 1933.
        Senator Bennett. That is correct.
        Senator Udall. And so why are they withdrawing at this
    point in time? Clearly the way it was set up and then the way,
    is it your father that amended it in 1968?
        Senator Bennett. No. There have been clashes.
        Senator Udall. Whoever amended it, through this entire
    period of time, you are talking 75 years, you have seen the
    State of Utah be involved in this. And I assume that it takes
    some level of understanding of this whole industry and how to
    do this. Why at this point is Utah just kind of walking away
    from it?
        Senator Bennett. Well, I wish I could say that the
    relationship had been harmonious through the entire period of
    time, but it is not. There have been some clashes between the
    Utah Navajos, saying to the State, we would prefer it to go
    here and go there. And the State legislature in this last
    session just said, look, instead of continuing to deal with
    this, why don't we just back out and let it happen?
        So it was an action on the part of the State legislature to
    say we want to simplify our lives, not have anything to do with
    this anymore and walk away from it.
        Senator Udall. But would you consider, from a financial
    perspective, a pretty sophisticated thing to manage, the assets
    that we are talking about here? Utah probably has over time
    developed some expertise in this area.
        Senator Bennett. I will not claim to have examined every
    aspect of the non-profit corporation, but I have looked into it
    to the extent of feeling comfortable with the governance that
    has been set up. And feel that it would be a responsible agency
    for handling these funds.
        Senator Udall. And you feel that the managers that the
    State of Utah had and the expertise that they brought to it,
    this non-profit, this Dineh Corporation would have the same
    kind of talent and expertise and everything in order to manage
    these funds, to make sure that the beneficiaries get a fair
    deal.
        Senator Bennett. They would contract with professional
    money managers, as the State has done. Yes, I think it would be
    handled properly.
        Senator Udall. Now, does the State taken an administrative
    fee?
        Senator Bennett. No.
        Senator Udall. They have never taken an administrative fee?
        Senator Bennett. Not that I know of.
        Senator Udall. So this would be a new development where you
    have the Navajo Nation taking an administrative fee.
        Senator Bennett. Correct. And the question of what
    constitutes a small fee is at the moment an unresolved number,
    and one of the circumstances that is here. I would refer you to
    the New Mexico State Legislature. I understand that they have
    taken a position in support of S. 1690 for some reason that I
    do not understand.
        And I have been told that Senator Bingaman is in support of
    this legislation, but I better leave it at that for you to find
    out the full details because I didn't come with all of that
    directly ready to respond.
        But because this does involved Navajos in all of the
    States--New Mexico, Arizona and Utah--I think there is some
    background in New Mexico that you might find useful.
        Senator Udall. Senator Bennett, did the Governor also
    endorse Utah getting out of this? Did he express any
    reservations in terms of the long-term history here?
        Senator Bennett. The Governor did endorse this, and the
    Governor urged the members of the corporation to meet with my
    staff, which they have at considerable length.
        Senator Udall. Thank you very much, Senator Bennett, for
    being here today and trying to clarify these issues.
        Thank you, Chairman Dorgan.
        The Chairman. Senator Franken?

                     STATEMENT OF HON. AL FRANKEN,
                      U.S. SENATOR FROM MINNESOTA

        Senator Franken. Mr. Chairman, thank you for convening this
    important hearing. While today's hearing focuses on the
    challenges of one tribe in the West, the issues we are facing
    and discussing today are much larger and impact tribes in my
    home State of Minnesota and tribes across the Country.
        Appropriate management of tribal assets is vitally
    important to the long-term economic well being and self-
    sufficiency of all tribes. It is troubling to see persistent
    problems and disputes in the management of tribal funds and
    lands, and this hearing is just one step. I look forward to a
    continuing dialogue with tribal governments and thank you,
    Senator Bennett, for being here. I am sorry I missed the
    testimony. I was at another hearing.
        I guess my one question for you, Senator, is in that the
    Utah legislature has passed legislation to remove itself from
    the role of trustee, what will happen if Congress doesn't act
    to designate a new trustee for the Utah Navajo trust fund?
        Senator Bennett. My understanding that under the present
    circumstance, the funds will be lost to the Utah Navajos. The
    money that is being spent--oh, I am sorry. I stand corrected.
        The State will still be the trustee, but by virtue of the
    action of the State legislature, there will be no mechanism for
    the distribution of the funds. So the effect is the same, as I
    was about to say, that the funds will be lost to the Utah
    Navajos at that point.
        Senator Franken. Okay. So it is obvious that Congress has
    to act and we will do so in the best interest of the Utah
    Navajo.
        Senator Bennett. Yes, as I said at the beginning, this is a
    Utah problem that I think can be solved within Utah. But as the
    testimony indicated and as the history has indicated, there has
    been a fairly long history of, shall we say, tension between
    the Utah Navajos and the Navajo Nation, and it is not unusual
    here that the Utah Navajos would say we are in favor of this
    legislation, and the Navajo Nation would say we are not.
        Senator Franken. I understand that from the written
    testimony, and I thank all the witnesses, and thank you,
    Senator.
        The Chairman. Senator Franken, thank you very much.
        Senator Bennett, we appreciate your testimony, and you had
    visited with me previously asking for a hearing. I think it is
    useful to have all of this information on the record. And we
    will, as I indicated, also seek the comments from the
    Administration on your legislation, and we will continue to
    consult with you as we proceed as well.
        Senator Bennett. Thank you very much, and I want to thank
    you for the prompt way you responded to my request. It is a
    courtesy that I thoroughly appreciate on the part of you
    personally and the Committee as a whole.
        The Chairman. Senator Bennett, thank you very much.
        [Whereupon, the Committee proceeded to other business.]

                                A P P E N D I X

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         Response to Written Questions Submitted by Hon. Tom Udall to
                             Hon. Robert F. Bennett

        Question 1a. If the legislation passed, what implications would it
    have on tribal sovereignty?
        Answer. The 1933 law did not establish a tribal interest in the
    37.5 percent royalty derived from oil and gas production within the
    Aneth Extension. In Pelt v. State of Utah, 104 F.3d 1534 (10th Cir.
    1996), the Court of Appeals addressed the issue of whether the Navajo
    Tribe had standing to request intervener status in a suit brought
    against the State of Utah by the beneficiaries of these royalty funds.
    The court used the following rationale in upholding the District Courts
    rejection of the Navajo tribe's motion:

            ``Contrary to the Tribe's claims, we do not believe that the
            Navajo Nation has any ownership in the 37.5 percent of the
            royalties generated by the Aneth Extension. We note that prior
            to the addition of these lands to the Navajo Reservation, these
            lands were public lands. See Babbitt, 53 F.3d at 1147; 47 Stat.
            1418. Contemporaneous with adding these lands to the
            reservation, Congress chose to reserve a portion of any oil and
            gas revenues. Congress then transferred the ownership interest
            in these proceeds to the State of Utah to hold as trustee for
            the benefit of the Aneth Extension Navajos. Therefore, since
            the Tribe never possessed an ownership interest in these
            proceeds, (citation omitted) the Tribe could not have a federal
            common-law claim based on its ownership interest.'' (104 F.3d
            1534 *1544.)

        The 1933 act required that these funds be spent for the benefit of
    the Navajos residing within the Aneth Extension and provided no role
    for the Navajo Nation in fulfilling the intent of the legislation. S.
    1690 does not alter the relationship established in 1933 therefore
    passage of this legislation would have no effect on tribal sovereignty.

        Question 1b. Would this legislation set precedent for decisions
    regarding other tribes and their constituencies, those who may have
    issues regarding the distribution of benefits?
        Answer. I do not believe S. 1690 will create a new precedent for
    constituencies within Native American Tribes to question the
    distribution of resources within their Tribe. In fact, if there is a
    precedent that leads to this type of discussion, I believe it was set
    in 1933 with the addition of the Aneth extension to the Navajo
    Reservation. Again, I refer to the Court of Appeals in Pelt v. State of
    Utah. ``During the committee proceedings in 1930 considering the
    predecessor of the bill that was finally passed in 1933, there was a
    discussion of the unique heritage of the Navajos who resided on the
    Aneth Extension and the divergence of their interests with the Tribe as
    a whole. Moreover, the 1933 Congress and Utah's governor were cognizant
    of the Aneth residents' separation from the Tribe and wished to provide
    for these individuals.'' (104 F.3d 1534, *1540)
        Furthermore, in justifying Congress' 1933 recognition of the
    historically poor relationship between the Utah Navajos and the Navajo
    Tribe, the State of Utah was chastised by the court in Sakezzie v. Utah
    for relying too much on the Navajo Tribal government in identifying the
    needs of the Navajos residing in the Aneth Extension. ``That the
    determination of the needs and desires of the beneficiaries should not
    be dependent upon the views of officers or members of the Navajo Indian
    Tribe as a whole. . .. It is necessary to bear in mind that the tribe
    as a whole is not the designated beneficiary of this fund and that its
    interests and views may in some respects be in conflict with the more
    pertinent interests and views of the beneficiaries.'' (198 F. Supp. 218
    D. Utah 1961)

        Question 2. To what extent was the Navajo Nation consulted about
    the content of S. 1690 prior to introduction?
        Answer. The State of Utah notified me in 2008 of its desire to be
    replaced as the trustee of the 37.5 percent Aneth royalty. The governor
    did not recommend a new trustee but made it clear that his major
    concern was ensuring the trust fund be maintained in Utah for the
    benefit of the Utah Navajos. In January of 2009, leaders of the Utah
    Navajos requested my assistance in addressing this problem. The Utah
    Navajos asked that I address this issue in a manner that accomplished
    two goals--first; the Navajo Nation not be designated as trustee and,
    second, provide the Utah Navajos the ability to manage their own
    affairs in regards to the 37.5 percent royalty. Based on the history
    noted above it is easy to see why the Utah Navajos feel this way about
    this matter.
        My office received a copy of a resolution of the Intergovernmental
    Relations Committee (IGR) of the Navajo Nation Council outlining the
    Navajo Nation's position on this matter in February of 2009. The
    resolution also included proposed legislation drafted by IGR. Both the
    position and proposed legislation were/are incompatible with the
    commitment I have made to protect the interests of my San Juan County,
    Utah Navajo constituents. Knowing at the outset that our goals were
    incompatible, I chose to work closely with my constituents in Utah in
    drafting the specifics of what became S. 1690.
        For the reason noted above, I did not have a formal consultation
    with the Navajo Nation regarding this matter until after introduction.
    However, prior to introduction there was ample opportunity for the
    Navajo Nation to learn about the model I chose to follow in addressing
    this issue. Contrary to the claims of a small handful of Utah Navajos
    opposed to S. 1690 because they prefer a return to the 1933 language
    wherein this small group would be the sole beneficiaries of the 37.5
    percent, this proposal was not developed in a vacuum. The two Utah
    Navajos who are elected members of the Navajo Nation Council were aware
    of what we were doing and on this past August 26th my staff met with
    the presidents of the various Utah Chapters to outline the options
    available for addressing this issue. All of the Chapter officials
    present at this meeting urged me to follow the option (nonprofit
    corporation) contained in S. 1690.

        Question 3. What was the impetus of the 1968 amendment to the
    original 1933 Act that created the Utah Navajo trust Fund?
        Answer. The report accompanying S. 391 (the 1968 amendment)
    identifies three problems in the 1933 Act that needed further
    clarification as a result of litigation over the State of Utah's
    implementation of the provisions of the statue. The problems centered
    on the tightly prescribed uses of the funds--``tuition of Indian
    children in white schools and/or the building or maintenance of roads
    across the lands described in section 1 (Aneth Extension)'' and the
    requirement that beneficiaries reside on land within the Aneth
    Extension. (47 Stat. 1418) The facts that only a few Navajos actually
    lived on the Aneth Extension lands and that most families who used
    these lands lived elsewhere, moving back and forth as necessary, made
    identification of beneficiaries extremely difficult. The 1968 amendment
    provided the flexibility necessary to meet the intent of the 1933 Act--
    ensuring that the Utah Navajos received some benefit from the
    development of resources on their lands.
                                     ______

         Response to Written Questions Submitted by Hon. Tom Udall to
                                Hon. Ben Shelly

        Question 1. If the legislation is passed, what implications would
    it have on tribal sovereignty? Would this legislation set precedent for
    decisions regarding other tribes and their constituencies, those who
    may have issues regarding the distribution of benefits?
        Answer. This legislation was introduced without consultation with
    the Navajo Nation. It is a unilateral action by the Federal Government
    which is contrary to long standing federal policy concerning self-
    determination by Tribes.
        This legislation does not necessarily set precedent as it relates
    to the distribution of benefits and the class of beneficiaries this is
    because the Navajo Nation was consulted initially and gave its consent
    to the previous distribution of royalties and has approved maintaining
    the status quo as it relates to the class of beneficiaries. However if
    the Federal Government were to unilaterally alter the distribution of
    benefits to tribal members then this would violate tribal sovereignty.
        This legislation does set precedent as it relates to the assignment
    of the Trust responsibility from the State/Federal Government to a non-
    profit entity. Please remember that these royalties are from Navajo
    Nation gas and oil leases from Navajo Nation Land for the benefit of
    Navajo members. Furthermore, the Navajo Nation is already the fiscal
    agent for these royalties.
        Any unilateral action by the Federal Government without any
    consultation and consent from the tribe is an abrogation of tribal
    sovereignty. The Federal Trust responsibility should not be transferred
    to another entity without the consent of the Navajo Nation.

        Question 2. To what extent was the Navajo Nation consulted about
    the content of S. 1690 prior to introduction?
        Answer. The Navajo Nation was not consulted about S. 1690 prior to
    its introduction. The Navajo Nation contacted Senator Bennett's office
    after discovering that S. 1690 was introduced. The Navajo Nation
    immediately requested to meet with the Senator's office. Senator
    Bennett's office initial response was no because this was a State of
    Utah matter and not a Navajo Nation issue. Senator Bennett's office,
    after the Navajo Nation's request, changed its position and agreed to
    meet in Shiprock. The Navajo Nation further requested a meeting with
    Senator Bennett in Washington, D.C. and Senator Bennett agreed to the
    meeting. The Navajo Nation was not consulted about S. 1690 prior to its
    introduction. Senator Bennett only met with Navajo Nation officials
    after Navajo requested a meeting with the Senator to discuss S. 1690.
    This practice is inconsistent with the previous practice of the Federal
    Government as it relates to consulting with the Navajo Nation.

        Question 3. If made trustee, would the Navajo Nation charge a fee
    for administration of the Utah Navajo Trust Fund? What would this fee
    consist of? To your knowledge, does the State of Utah currently take a
    fee for the administration of the Utah Navajo Trust Fund?
        Answer. Please be aware the Navajo Nation is recommending that the
    Navajo Nation Office of the Controller administer the Trust. The
    Controller manages several accounts for the Navajo Nation and will
    effectively administer this trust at a minimal amount due to the fact
    that the Navajo Nation has the infrastructure readily available to
    incorporate the Navajo Utah Trust Fund. It is anticipated that the
    Navajo Nation will not differ, substantially, in its administration
    costs than that of the State of Utah and maybe substantially lower
    based upon the Nation's infrastructure.
        It is our understanding that the State of Utah utilizes trust fund
    monies to hire staff and office space in Utah to administer the trust.
    The State of Utah has anywhere between four and six support staff.
    Under the Navajo proposal, the Office of the Navajo Utah Commission
    will also hire support staff and have office space to administer the
    trust fund.