[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
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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.

                                  
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