[Senate Hearing 112-637]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-637

 
  FULFILLING THE FEDERAL TRUST RESPONSIBILITY: THE FOUNDATION OF THE 
                 GOVERNMENT-TO-GOVERNMENT RELATIONSHIP

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

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 17, 2012

                               __________

         Printed for the use of the Committee on Indian Affairs




                  U.S. GOVERNMENT PRINTING OFFICE
76-551                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  

                      COMMITTEE ON INDIAN AFFAIRS

                   DANIEL K. AKAKA, Hawaii, Chairman
                 JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN HOEVEN, North Dakota
MARIA CANTWELL, Washington           MIKE CRAPO, Idaho
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
      Loretta A. Tuell, 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 May 17, 2012.....................................     1
Statement of Senator Akaka.......................................     1
Statement of Senator Barrasso....................................     2
Statement of Senator Crapo.......................................     4
    Prepared statement...........................................     5
Statement of Senator Johanns.....................................     5
Statement of Senator Udall.......................................     2
    Prepared statement...........................................     3

                               Witnesses

Atcitty, Shenan, Legal Counsel, Jicarilla Apache Nation..........    77
    Prepared statement of Hon. Levi Pesata, President, Jicarilla 
      Apache Nation..............................................    78
Baptiste, Hon. Brooklyn, Vice-Chairman, Nez Perce Tribal 
  Executive Committee............................................    72
    Prepared statement...........................................    74
Fletcher, Matthew L.M., Professor of Law/Director, Indigenous Law 
  and Policy Center, Michigan State University College of Law....     9
    Prepared statement...........................................    12
Halbritter, Ray, Nation Representative, Oneida Indian Nation.....    49
    Prepared statement...........................................    51
McCoy, Melody, Staff Attorney, Native American Rights Fund.......     6
    Prepared statement...........................................     7
Rey-Bear, Daniel, Partner, Nordhaus Law Firm LLP.................    30
    Prepared statement...........................................    32
Sharp, Hon. Dawn, President, Quinault Indian Nation..............    67
    Prepared statement...........................................    69

                                Appendix

Kitka, Hon. Julie, President, Alaska Federation of Natives, 
  prepared statement.............................................   101
Masten, Hon. Leonard, Chairman, Hoopa Valley Tribe, prepared 
  statement......................................................   113
Steele, Hon. John Yellow Bird, President, Oglala Sioux Tribe, 
  prepared statement.............................................   128
Thomas, Hon. Edward K., President, Tlingit and Haida Indian 
  Tribes of Alaska , prepared statement..........................   125


                     FULFILLING THE FEDERAL TRUST 
    RESPONSIBILITY: THE FOUNDATION OF THE GOVERNMENT-TO-GOVERNMENT 
                              RELATIONSHIP

                              ----------                              


                         THURSDAY, MAY 17, 2012


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:15 p.m. in room 
628, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.

          OPENING STATEMENT OF HON. DANIEL K. AKAKA, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. The Committee will come to order.
    Aloha and welcome to all of you. Today, the Committee will 
hold an oversight hearing to examine the Federal trust 
responsibility.
    The Federal trust relationship that exists between the 
Federal Government and the Indian Tribe goes back to the very 
first days of this Country. All branches of the Government, the 
Congress, Administration and the courts acknowledge the 
uniqueness of the Federal trust relationship. It is a 
relationship that has its origins in international law, 
colonial and U.S. treaties and agreements, Federal statutes and 
Federal legal decisions. A trust relationship carries with it 
legal, moral and fiduciary obligations that is incumbent upon 
the Federal Government to uphold.
    When the trust responsibility is acknowledged and upheld by 
the Federal Government, a true government-to-government 
relationship can exist and thrive. When the trust 
responsibility is not upheld, Tribal sovereignty is eroded and 
undermined.
    I have been pleased by the actions of the Obama 
Administration settling long-standing litigation brought by 
Tribes against the U.S. Government. Some of these cases involve 
claims that go back over 100 years. It is only in acknowledging 
the lapses in the trust relationship that we can move forward 
in a way that is beneficial to the Government, Tribes and 
Tribal Indians.
    Today, we hear from legal scholars and practices to discuss 
the trust relationship, its formation, how it has changed 
throughout the years and where it stands now. I am also pleased 
to have the Tribal leaders with us who can share their 
perspective of what the trust relationship looks like on the 
ground and what it means to your Tribal members.
    The hearing record for today's hearing will remain open for 
two weeks from today. I know this a topic of great interest to 
many Tribes and other stakeholders. So, please submit any 
written comments to be included in the hearing record.
    Senator Barrasso, for any remarks that you may have.

               STATEMENT OF HON. JOHN BARRASSO, 
                   U.S. SENATOR FROM WYOMING

    Senator Barrasso. Thank you very much, Mr. Chairman. Thanks 
for holding this hearing on this very important topic.
    I just want to thank you for your continued leadership in 
this area. You do a magnificent job and, as you stated, there 
is a long history between the United States Government and 
Indian nations. And I appreciate your willingness to look in, 
and look back to the past and then to provide leadership into 
the future.
    While much of the history has not been good, the 
relationship, I believe, and under your leadership, has 
certainly improved. In the past few decades, we have seen much 
improvement. And I think it has been a direct result of the 
Federal policy of Indian self determination, to which you are 
very, very well committed.
    Now, that policy has led to unprecedented Tribal 
participation in decisions that affect the future of Indian 
communities. Greater participation has in turn led to greater 
accountability. Greater participation and accountability has 
been good for Indian Country in so many different ways. Tribal 
governments have become far more sophisticated and more capable 
and better able to serve their people.
    That is why I have introduced my Indian Energy Bill, S. 
1684, which is co-sponsored by the Chairman. Our bill 
recognizes the undeniable fact that no one can better manage 
Tribal energy resources than the Tribes themselves. If nothing 
else, the Cobell litigation and many of these Tribal trust 
mismanagement cases illustrate an important point. The point is 
that the United States has not been a very effective manager of 
Indian trust assets and, in fact, I do not believe that the 
Federal Government will ever be able to manage these assets 
better than the Tribes themselves. I am convinced of that and I 
think an ever growing number of Tribes are convinced of that as 
well.
    So, I want to thank all of the witnesses for being here 
today and for providing the Committee with your thoughtful 
testimony.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, very much, Vice Chairman Barrasso.
    Now, I call on Senator Tom Udall for any remarks he might 
have.

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

    Senator Udall. Thank you, Senator Akaka, and thank you, 
Senator Barrasso. I think it is important to hold this hearing, 
a very important hearing for Indian Country. And this hearing 
is a historic event that is vital to establishing an official 
record describing the responsibilities of the Federal 
Government to the Tribes.
    I hope that this Oversight Hearing on the Federal trust 
responsibility will help reiterate the extent of this long-
standing obligation in every branch of Government. As Tribes 
increasingly engage in self governance, as the Supreme Court 
continues to take up Tribal cases, and as Federal budgets are 
trimmed, the question of the Federal Government's 
responsibility to Tribes is worth examining. And that is why it 
is important that we are doing what we are doing today.
    In drafting budgets, the Executive Branch often falls short 
of fulfilling its trust responsibility. As construction budgets 
and healthcare needs go unmet, in recent years the Supreme 
Court has made rulings that have significantly impacted the 
relationship between Tribes and the Federal Government to the 
detriment of Tribes and erosion of trust responsibility.
    In June 2011, the Supreme Court decision of Jicarilla 
versus the United States, they ruled on a case called Jicarilla 
versus the United States, is of particular interest to me and 
my constituents in New Mexico. This case is one such example of 
the Court's questionable interpretation of the trust 
responsibility and one of many issues that I look forward to 
discussing with the panelists today.
    I was looking forward to welcoming the president of the 
Jicarilla Apache Nation to the Committee today but, 
unfortunately, President Levi Pesata is under the weather and 
unable to make the trip to Washington. We hope you feel better 
soon, President Pesata. But I do, however, want to welcome 
Shenan Atcitty who is standing in for the president.
    And I also want to welcome Daniel Rey-Bear, a partner at 
the Nordhaus Law Firm in Albuquerque, New Mexico, and look 
forward to hearing the testimony of all of the witnesses. And I 
want to thank Daniel for his work for New Mexico Tribes.
    So, with that, I have shortened everything. I will put my 
full statement in the record and really look forward to hearing 
the witnesses.
    Thank you, Chairman Akaka.
    [The prepared statement of Senator Udall follows:]

   Prepared Statement of Hon. Tom Udall, U.S. Senator from New Mexico
    I would first like to thank Senator Akaka for holding this 
important hearing. This is a historic event that is vital to 
establishing an official record describing the responsibilities of the 
Federal Government to Tribes.
    I hope that this oversight hearing on the federal trust 
responsibility will help reiterate the extent of this longstanding 
obligation in every branch of government.
    As Tribes increasingly engage in self-governance, as the Supreme 
Court continues to take up Tribal cases, and as federal budgets are 
trimmed, the question of the Federal Government's responsibility to 
Tribes is worth examining.
    In drafting budgets, the executive branch often falls short of 
fulfilling its trust responsibility, as construction budgets and 
healthcare needs go unmet. In recent years, the Supreme Court has made 
rulings that have significantly impacted the relationship between 
tribes and the Federal Government, to the detriment of Tribes and 
erosion of trust responsibility.
    The June 2011 Supreme Court decision Jicarilla vs. the United 
States is of particular interest to me and my constituents in New 
Mexico. This case is one such example of the Court's questionable 
interpretation of trust responsibility, and one of many issues that I 
look forward to discussing with the panelists today.
    I was looking forward to welcoming the President of the Jicarilla 
Apache Nation to the committee today, but unfortunately President Levi 
Pesata is under the weather and unable to make the trip to DC. We hope 
you feel better soon President Pesata. I do, however, want to welcome 
Shenan Atcitty, who is standing in for the President.
    I also want to welcome Daniel Rey-Bear, a partner at Nordhaus Law 
Firm in Albuquerque, New Mexico. I look forward to hearing your 
testimony and thank you for your work with tribes in New Mexico and 
elsewhere.
    Thank you.

    The Chairman. Thank you.
    Senator Michael Crapo, your remarks.

               STATEMENT OF HON. MICHAEL CRAPO, 
                    U.S. SENATOR FROM IDAHO

    Senator Crapo. Thank you, Mr. Chairman, and I, too, 
appreciate your leadership and the leadership of Senator 
Barrasso. The two of you are providing strong leadership for 
the proper approach that we should take in managing our trust 
responsibilities and I appreciate this hearing as well.
    I apologize, I will not be able to stay for the hearing. 
But I wanted to get here to introduce one of our witnesses in 
the second panel who is from Idaho. And I appreciate the 
opportunity to introduce Nez Perce Tribal Executive Committee 
Vice Chairman Brooklyn Baptiste to the Committee.
    Brooklyn is a very good personal friend of mine and we work 
very well together and he is a great leader in Idaho. I want to 
commend him for his leadership both to the Tribe and to the 
State of Idaho and, frankly, to the Nation as his presence here 
indicates.
    In his tenure on the Nez Perce Tribal Executive Committee, 
Brooklyn has served on the Budget and Finance Subcommittee, the 
Enterprise Board, Law and Order, Youth Affairs Subcommittee and 
the Land Enterprise Commission. In addition, he is an 
accomplished artist and has been commissioned to produce art 
for numerous organizations, including the Tribe's gaming 
enterprise.
    Throughout my time in the Senate, I have had the 
extraordinary opportunity to work with Vice Chairman Baptiste 
on many pertinent issues that directly affect the Federal trust 
responsibility. A couple of quick examples.
    The Nez Perce Tribal Big Horn Recovery Project assists the 
Federal Land Management Agencies in their regulatory 
responsibilities to Nez Perce treaty rights through Big Horn 
Sheep restoration on Federal lands. This project, which has 
never received Federal appropriations, will hopefully preclude 
an Endangered Species Act listing for Big Horn Sheep which will 
be a much more effective way to approach the issue while 
protecting the necessary interests that we have.
    Additionally, Vice Chairman Baptiste has played a 
significant role in the Nez Perce Tribe's efforts to find 
consensus agreement among Federal Land Management issues with 
regard to the Clear Water Basin Collaborative in Idaho.
    Today, the Committee will discuss how the Federal 
Government can effectively reaffirm the important trust 
relationship between the United States and the Tribes. And I am 
sure that Vice Chairman Baptiste will have significant wisdom 
to give us as we approach that responsibility.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Crapo follows:]

   Prepared Statement of Hon. Michael Crapo, U.S. Senator from Idaho

    Thank you, Mr. Chairman, Vice Chairman Barrasso, and members of the 
Committee. I appreciate the opportunity to introduce Nez Perce Tribal 
Executive Committee Vice-Chairman, The Honorable Brooklyn Baptiste, to 
the Committee.
    First, I want to commend Vice-Chairman Baptiste for his great 
leadership to both the Nez Perce Tribe and the State of Idaho.
    In his tenure on the Nez Perce Tribal Executive Committee, Brooklyn 
has served on the Budget & Finance Subcommittee and Enterprise Board; 
Law & Order, Youth Affairs Subcommittee; and the Land Enterprise 
Commission.
    In addition, Brooklyn is an accomplished artist, and has been 
commissioned to produce art for numerous organizations, including the 
Tribe's Gaming Enterprise.
    Throughout my time in the U.S. Senate, I have had the extraordinary 
opportunity to work with Vice Chairman Baptiste on many pertinent 
issues that directly address federal trust responsibility.
    For example, the Nez Perce Tribe Bighorn Recovery Project assists 
the federal land management agencies in their regulatory 
responsibilities to protect Nez Perce Treaty Rights through bighorn 
sheep restoration on federal lands.
    This project, which has never received federal appropriation, will 
hopefully preclude an Endangered Species Act listing for bighorn sheep, 
a much more costly restoration effort for the Federal Government, while 
providing recreational and economic benefits for Idaho and the nation.
    Additionally, Vice-Chairman Baptiste has played a key role in the 
Nez Perce Tribe's efforts to find consensus agreements to federal land 
management issues with regard to the Clearwater Basin Collaborative.
    Today, the Committee will discuss how the Federal Government can 
effectively reaffirm the important trust relationship between the 
United States and tribes. As such, I would urge you to listen to Vice-
Chairman Baptiste, as he is ideally suited to understand how to enhance 
and strengthen this connection.
    Thank you, Mr. Chairman.

    The Chairman. Thank you very much, Senator Crapo.
    Now, Senator Mike Johanns, with your remarks.

                STATEMENT OF HON. MIKE JOHANNS, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Johanns. Mr. Chairman, thank you. I also can be 
here just for a limited time so I will abbreviate my comments 
and submit anything additional that I would like to say in my 
opening statement for the record. But I do want to just say to 
the panel, and the second panel, thank you for being here.
    Mr. Chairman, I know of no other issue that is more central 
and bedrock to our relationship than this issue which is the 
subject matter of this hearing, the trust relationship. And so, 
I am very anxious to hear the panel members speak to it and I 
compliment you for holding this hearing. I think this hearing 
is due. I think it is important that we air this and I am 
anxious to hear from our witness.
    Again, thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Johanns, for 
your remarks.
    I would like to invite our first panel to the witness table 
and to introduce them as well.
    Ms. Melody McCoy, Staff Attorney of the Native American 
Rights Fund in Boulder, Colorado; Mr. Matthew Fletcher, 
Professor of Law and Director of the Indigenous Law and Policy 
Center at Michigan State University College of Law in East 
Lansing, Michigan; and Daniel Rey-Bear, a partner at the 
Nordhaus Law Firm in Albuquerque, New Mexico.
    Welcome, Ms. McCoy, please proceed with your testimony.

  STATEMENT OF MELODY McCOY, STAFF ATTORNEY, NATIVE AMERICAN 
                          RIGHTS FUND

    Ms. McCoy. Thank you, Mr. Chairman, members of the 
Committee. Good afternoon.
    I am Melody McCoy, enrolled member of the Cherokee Nation 
in Oklahoma and a staff attorney for coming up on 26 years now 
at the Native American Rights Fund in Boulder.
    I appreciate the opportunity to testify today regarding the 
statutes and the cases that govern the accounts, funds and 
assets that are held by the United States Government in trust 
for American Indian and Alaska Native Tribes.
    NARF has been representing over 40 Tribes in their 
historical claims for breaches of trust accounting and 
management duties. Some of these cases have been in court for 
20 years and all of them have recently been in settlement 
negotiations with the Government.
    Of course, the Government's holding of trust accounts for 
Tribes dates back to an 1820 Federal policy. When the 
Government purchased land from Tribes by treaty, it did not 
directly pay the Tribes. The Government chose to hold the 
payment in trust, the money itself in trust, unless and until 
it distributed to the Tribes.
    These old treaty funds, over time, evolved into statutes by 
which today the Government holds in trust judgment awards, 
which are pure monetary awards or claims settlements to Tribes 
typically from entities like the historic Indian Claims 
Commission, and proceeds of labor accounts, which are trust 
accounts based on income earned from land, natural resources, 
trust assets that are under trust management for Tribes by the 
Government. And today, the Government purports to hold about 
2,900 accounts in trust for Tribes.
    Government management of Tribal trust accounts, funds and 
assets are governed by several statutory schemes. There are 
statutes that address the accounting duties and issues. There 
are statutes that address the investment of the Tribal trust 
funds. And there are statutes that address the management of 
the trust assets and natural resources. By these statutes, by 
and large Congress has delegated authority for these trust 
duties to the Department of the Interior and the Treasury.
    In the investment statutes, the history of that is that 
typically early on there were Tribe specific treaties or 
statutes that ensured that, as I said, when the Government held 
the funds in trust for Tribes as payment for the treaty lands, 
the Government was obligated to earn interest on those funds. 
Throughout the 20th Century, the statutory fiduciary investment 
duties and beneficiary protections increased for these Tribal 
trust funds. Today, the statutes are codified in Title 25 at 
four separate sections, 161, 161a, 161b and 162a.
    In general, the Interior Department has discretion to 
deposit Tribal trust funds in the Treasury or to invest them in 
a range of statutorily approved financial investments outside 
of the Treasury. If they are deposited in the Treasury since 
1984, they must earn interest at rates determined by Treasury 
considering, as the statute says, current market yield on 
comparable marketable obligations. Since 1974, regulation of 
the Interior Department have required judgment awards, the pure 
monetary funds, to be invested outside of the Treasury.
    The resource management statutes for Tribal trust assets 
and resources are numerous and they typically deal with the 
management of Tribal land and natural resources such as oil and 
gas, minerals and timber. I refer to the Handbook of Federal 
Indian Law. They have, perhaps, a good summary of those.
    In the accounting statutes, this is probably Congress' most 
recent foray into those, and there have been three separate 
series of statutes involving accounting issues for Tribal trust 
funds and those are set forth.
    And on the cases, I briefly want to go through three 
points. The historic Indian Claims Commission was a statutory 
scheme, a unique statutory forum set up by Congress, in the 
1940s, 1950s and 1960s and, after three decades, ultimately the 
Indian Claims Commission awarded over $1.2 billion to Indian 
Tribes in the form of these judgment awards that again were 
held in trust until they were distributed.
    The Indian Claims Commission has ended and the Supreme 
Court, without that kind of a forum, has made it difficult for 
Tribes to bring these cases although, as we have seen now, 
there are 100 Tribes that have brought cases involving these 
historical mismanagement claims. We have settled perhaps about 
half of those, most of those under the current Administration.
    So, I think it very timely that this Congress take a look 
at this issue in the wake of these historic settlements. And we 
really appreciate this hearing and the opportunity to assist 
the Congress and, most importantly, we urge Congress to work 
with Tribes in a government-to-government fashion and in 
respect of Tribal sovereignty to see what needs to be done 
next. That is what needs to happen.
    Thank you.
    [The prepared statement of Ms. McCoy follows:]

  Prepared Statement of Melody McCoy, Staff Attorney, Native American 
                              Rights Fund

Introduction and Overview
    Good afternoon Members of the Committee. I am Melody McCoy, an 
enrolled member of the Cherokee Nation and a Staff Attorney at the 
Native American Rights Fund (NARF). NARF thanks the Committee for the 
opportunity to testify today regarding the statutes and cases that 
govern the accounts, funds and assets that are held by the United 
States government in trust for American Indian and Alaska Native 
Tribes. NARF represents over 40 tribes in their historical claims for 
breach of trust accounting and management duties. Some of these cases 
have been in court for 20 years and all them have been in settlement 
negotiations with the government.
    The government's holding of trust accounts for tribes dates back to 
an 1820 federal policy. At that time when the United States by treaty 
purchased land from tribes the government did not make direct payment 
to tribes; rather, it held the money in trust for tribes unless and 
until it distributed the money to the tribal beneficiaries. Over time 
this policy and practice evolved into statutes by which the government 
holds in trust ``Judgment Awards,'' which are monetary awards or claims 
settlements to tribes typically from entities like the historic Indian 
Claims Commission, and ``Proceeds of Labor'' accounts, which are based 
on income earned from land and natural resources that are under trust 
management for tribes by the government. Today the government purports 
to hold about 2,900 trust accounts for about 250 tribes.

Tribal Trust Statutes
    The government's management of tribal trust accounts, funds, and 
assets are governed by several statutory schemes. There are statutes 
that address tribal trust accounting duties and issues. There are 
statutes that address the investment of tribal trust funds. There are 
statutes that address the management of tribal trust assets and natural 
resources. By these statutes Congress has delegated authority for 
fiduciary duties regarding tribal trust fund accounts, funds, and 
assets primarily to the Departments of the Interior and the Treasury.
    Investment Statutes. Nineteenth century treaties and statutes 
usually ensured that while it held funds in trust for tribes, the 
government was obligated to earn interest on the funds. Throughout the 
twentieth century, statutory fiduciary investment duties and 
beneficiary protections increased for tribal trust funds. The statutes 
governing the government's investment of tribal trust funds are 
codified at 25 U.S.C.    161, 161a, 161b and 162a. Generally, the 
Interior Department has discretion to deposit tribal Proceeds of Labor 
account funds in the Treasury or invest them outside of the Treasury in 
a range of statutorily approved financial instruments. If deposited in 
the Treasury, since 1984 they must earn interest at rates determined by 
Treasury considering current market yields on comparable marketable 
obligations. Since 1974 Interior regulations have required Judgment 
Awards to be invested outside of Treasury.
    Resource Management Statutes. A good summary of the general 
statutes governing the management of tribal land (including leases for 
agriculture, grazing and rights of way) and natural resources such as 
oil, gas, minerals and timber that the government holds in trust for 
tribes can be found in Felix S. Cohen, Handbook of Federal Indian Law  
  17.01-17.04 (2005 ed.). These statutes typically include provisions 
for the government's collection of income from the management of tribal 
trust assets and deposit of that income in Proceeds of Labor accounts 
for tribal beneficiaries. There are also a few ``tribe specific'' 
statutes that govern the government's management of the trust assets or 
natural resources of a specific tribe.
    Accounting Statutes. Congress recently has addressed tribal trust 
account accounting matters in several ways. Since 1987 Congress has 
mandated that the government perform and provide tribal trust account 
accountings, audits and reconciliations. Pub. L. No. 100-202 (1987). 
The accounting and audit mandates are key features of the American 
Indian Trust Fund Management Reform Act of 1994. Pub. L. No. 103-412; 
25 U.S.C.    4044, 4011(c). In addition, since 1990, in the so-called 
Indian Trust Accounting Statutes, Congress has provided that, with 
respect to tribal trust fund mismanagement claims, the general six year 
statute of limitations for claims against the government does not begin 
to run unless and until the government has provided tribal 
beneficiaries with proper trust fund accountings. Pub. L. No. 101-512 
(1990)--Pub. L. No. 112-74 (2011). In the wake of the provision of 
reports to tribes in 1996 as a result of a government contract with the 
accounting firm of Arthur Andersen to perform tribal trust accountings, 
in 2002 and 2005 Congress provided that for purposes of applicable 
statutes of limitations the date on which tribes received their Arthur 
Andersen reports is deemed to be December 31, 1999 and December 31, 
2000 respectively. Pub. L. No. 107-153 (2002), Pub. L. No. 109-158 
(2005). These last two sets of statutes are intended to toll the 
commencement of statutes of limitations on tribal trust accounting and 
mismanagement claims and defer the accrual of such claims.

Tribal Trust Cases
    Indian Claims Commission. Historically tribes had limited access to 
federal courts and had to get special acts of Congress authorizing 
their claims against the government. In 1946 Congress created the 
Indian Claims Commission (ICC). Pub. L. No. 79-726. The ICC was 
authorized generally for a limited time period to hear and adjudicate 
historic claims of tribes against the government that accrued before 
August 13, 1946. It had jurisdiction only to award money damages. There 
were over 600 ICC claims filed. When the ICC began, the government was 
holding about $28 million in trust for tribes. The ICC ultimately 
awarded over $1.2 billion to tribes as Judgment Awards held in trust by 
the government unless and until distributed.
    Supreme Court. Tribal access to federal courts today is generally 
more available but the U.S. Supreme Court has set strict requirements 
for tribes suing the government for money damages for alleged breaches 
of trust. The Court requires tribes to show a substantive statute or 
regulation that (1) imposes specific fiduciary duties or creates 
specific beneficiary rights and (2) can be ``fairly interpreted'' as 
mandating compensation by the government in the event of a breach. 
United States v Mitchell, 445 U.S. 535 (1980) (Mitchell I); United 
States v Mitchell, 463 U.S. 206 (1983) (Mitchell II); United States v 
Navajo Nation, 537 U.S. 488 (2003) (Navajo I); United States v Navajo 
Nation, 556 U.S. 287 (2009) (Navajo II).
    Post-AA Reports. As noted above, tribal trust account holders were 
provided Arthur Andersen reports in 1996. The Arthur Andersen reports 
examined some transactions in some tribal trust accounts for a 20 year 
period (1972 to 1992). Also as noted above, for limitations statute 
purposes, in 2005 Congress deemed these reports to have been received 
by tribes on December 31, 2000. Without further addressing of the 
matter by Congress, by the end of 2006, over 100 tribes had filed 
claims in federal courts for historical trust accountings or for 
damages for trust funds and asset mismanagement.
    Due to threshold issues of jurisdiction, discovery, evidence and 
procedure very few tribal trust cases have proceeded to determinations 
regarding the merits of a tribe's claims or remedies. To this day there 
are no final unappealed court decisions on the merits of government 
liability for historical failure to account or for funds or assets 
fiduciary mismanagement. There are no final decisions with appeals 
exhausted regarding the existence or scope of remedies or relief that 
may be judicially awarded. Tribal trust cases are costly and time 
consuming.
    Settlements. Between 2001 and 2009 there were four full or partial 
negotiated settlements of tribal trust claims. From 2010-2011 there 
were another three negotiated settlements. In 2012 there have been 
negotiated settlements in 42 tribal trust cases.

Conclusion
    Many reports from federal agencies including the Government 
Accountability Office and the Department of the Interior's Office of 
the Inspector General have been highly critical of the government's 
historical failure to account for and properly manage tribal trust 
funds and assets. Government contractors including Arthur Andersen and 
Price Waterhouse have reached similar conclusions. The 1994 Trust 
Reform Act was preceded by House Report No. 102-488 (1992), entitled 
``Misplaced Trust: The Bureau of Indian Affairs' Mismanagement of the 
Indian Trust Fund.''
    In light of these reports, court cases and settlements, NARF 
believes that it is timely for Congress to review the government's on-
going fiduciary management of tribal trust accounts, funds and assets. 
While it is not for NARF to make specific recommendations, in keeping 
with tribal sovereignty, the federal policy of government-to-government 
relations with tribal nations and the recent United Nations Declaration 
on the Rights of Indigenous Peoples--which includes the right of 
indigenous peoples to ``free, prior and informed consent'' to approve 
or reject proposed actions or projects that may affect them and their 
land and resources--NARF urges Congress to work with tribes regarding 
any needed trust reform. The new Secretarial Commission on Indian Trust 
Administration and Reform is tasked with providing advice and 
recommendations to the Secretary of the Interior on trust management. 
As part of its comprehensive evaluation of government trust management 
the Commission is seeking the input of tribes and Indian organizations 
at a scheduled series of public meetings this year. Tribes and national 
and regional tribal organizations have invaluable experience and 
expertise on tribal trust accounts, funds and assets that can be shared 
with the Commission, and with Congress through hearings such as this.
    Thank you for the opportunity to assist the Committee at this 
Oversight Hearing.

    The Chairman. Thank you very much, Ms. McCoy, for your 
testimony.
    Mr. Fletcher, will you please proceed with your testimony.

STATEMENT OF MATTHEW L.M. FLETCHER, PROFESSOR OF LAW/DIRECTOR, 
  INDIGENOUS LAW AND POLICY CENTER, MICHIGAN STATE UNIVERSITY 
                         COLLEGE OF LAW

    Mr. Fletcher. Thank you. Chairman Akaka and Members of the 
Committee, it is a pleasure to testify today on the Federal 
trust responsibility to Indian nations and I say chi-miigwetch 
for the invitation to testify.
    I am a member of the Grand Traverse Band of Ottawa and 
Chippewa Indians which is located in the center of the 
universe, Peshawbestown, Michigan. I am the co-author of the 
sixth edition of Cases and Materials on Federal Indian Law with 
the late David Getches, Charles Wilkinson and Robert Williams, 
and the author of American Indian Tribal Law, the first 
casebook for law students on Tribal law.
    In 2010, I was elected to the American Law Institute and my 
colleague, Wenona T. Singel and I currently head up the effort 
to initiate an ALI restatement project on American Indian Law. 
Chapter one of this proposed project will be on Tribal Federal 
relations. So, it is very fortuitous that I have been called to 
testify today.
    I am going to talk a little bit about the historic 
underpinnings of the trust responsibility to begin. The Supreme 
Court interpreted the meaning of the Indian Commerce Clause and 
how it interacts with Indian treaties in the so-called Marshall 
Trilogy of early Indian law cases. In Johnson v. M'Intosh, an 
early Indian lands case, Chief Justice Marshall held that the 
Federal Government had exclusive dominion over land transaction 
with Indian Tribes, exclusive as to individual American 
citizens and as to State government.
    In Cherokee Nation v. Georgia, Chief Justice Marshall held 
that while Indian Tribes were not State governments as defined 
in the Constitution, nor were they foreign nations. They were 
something akin to domestic dependent nations.
    And finally, in Worcester v. Georgia, Chief Justice 
Marshall confirmed that the laws of States have no force in 
Indian Country and that the Constitution's Supremacy Clause has 
powerful, gives powerful effect, to Indian treaties as the 
supreme law of the land.
    The latter half of the 19th Century and first half of the 
20th Century was a low point in Federal Tribal relations, 
however. In cases like United States v. Kagama and Lone Wolf v. 
Hitchcock, the Supreme Court adopted a guardian-ward concept of 
Federal Tribal relations. The guardian-ward concept gave 
license to the Executive Branch and Congress to interfere with 
internal Tribal affairs, undermine and even expropriate without 
just compensation Tribal property rights and to eliminate the 
ties between Tribes and the Government during what we now call 
the Termination Era.
    The trust responsibility never completely disappeared, 
however. In 1942, the Supreme Court held in Seminole Nation v. 
United States that the U.S. should be held to the most exacting 
fiduciary duty when handling trust funds. I will quote from the 
Court at this time.
    ``Under a humane and self imposed policy which has found 
expression in many acts of Congress and numerous decisions of 
this Court, it has charged itself with moral obligations of the 
highest responsibility and trust. Its conduct, as disclosed in 
the acts of those who represent it in dealings with the 
Indians, should therefore be judged by the most exacting 
fiduciary standards.''
    In 1970, President Nixon's message to Congress announced a 
fundamental shift in Federal Indian policy, self-determination. 
The message renounced the termination policy, established that 
adherence to the Federal trust responsibility would now guide 
Federal Indian policy, and proposed a structure to dramatically 
reduce Federal control over internal Tribal relations by 
recognizing greatly increased Tribal authority to manage 
affairs on their reservations as a replacement for Federal 
bureaucratic control.
    Congress has generally adhered to the concepts of the trust 
responsibility in virtually all modern Indian affairs 
legislation, from 1971 with the Alaska Native Claims Settlement 
Act to the present with various water settlements and the 
Tribal Law and Order Act. Appendix 1 of my testimony lists many 
of these statutes.
    There have been no termination acts or similar statutes for 
over 50 years. I have to thank Reid Chambers for reminding me 
of this continually. This history of Executive and 
Congressional voluntary adherence to a trust relationship is at 
the heart of the Federal Tribal relationship in modern times. I 
will add that the Solicitor General's decision making record in 
acting as a trustee for Tribal interests since 1970, before the 
Supreme Court, largely has been exceptional.
    But not all is well with the trust responsibility. 
Conflicts of interest undermine the Federal Government's duties 
and the Supreme Court has enabled the Executive Branch to avoid 
responsibility for consequences of trust breach to Indian 
Country . I am the author and editor of a blog called Turtle 
Talk where I have been following a lot of these conflicts of 
interest and I am more than happy to talk about them during the 
question and answer period.
    And I will add, as you can see in my summary, that there 
are many examples of this including the current relationship 
with the, excuse me, the National Labor Relations Act as to its 
application to Indian Tribes and casino interests, the conflict 
within the Department of Interior about the San Francisco Peaks 
and the trust responsibility in terms of, in that regard as 
well.
    I thank you for your time and for the Committee's 
leadership in this area. I welcome your questions. Chi-
miigwetch.
    [The prepared statement of Mr. Fletcher follows:]

Prepared Statement of Matthew L.M. Fletcher, Professor of Law/Director, 
Indigenous Law and Policy Center, Michigan State University College of 
                                  Law





























Appendix 1--Selected Acts of Congress in Indian Affairs Since 1970
    American Indian Probate Reform Act of 2004
    American Indian Religious Freedom Act of 1978
    American Indian Trust Fund Management Reform Act 1994
    Coal Leasing Amendments 2005
    ``Duro Fix'' (1991 Amendments to the Indian Civil Rights Act)
    Indian Arts and Crafts Act of 1990
             Amendments 2011
    Indian Dams Safety Act 1994
    Indian Education Act 1972
    Indian Elementary and Secondary School Assistance Act 1970
    Indian Employment, Training, and Related Services Demonstration Act 
2000
             Technical Corrections 2000
    Indian Environmental Regulatory Enhancement Act of 1990
    Indian Environmental General Assistance Program Act 1977
             1992 amendments
             1996 amendments
    Indian Financing Act of 1974
             1984 amendments
             1988 amendments
             2002 amendments
    Indian Health Care Improvement Act 1976
             1992 amendments to the Indian Health Care Improvement Act 
        extended the Title III self-governance demonstration to the IHS 
        and IHS programs.
             Technical corrections 1996
             Tribal Self-Governance Amendments of 2000-Title V of the 
        Act, making tribal self-governance permanent within the IHS
             The amendments of 2000 also added Title VI to the Act, 
        requiring that the Secretary of HHS ``conduct a study to 
        determine the feasibility of a tribal self-governance 
        demonstration project for appropriate programs, services, 
        functions, and activities (or portions thereof) of the agency 
        [HHS].'' This Title applies to non-IHS programs administered by 
        the Department. Title VI also delineates what the Secretary 
        must consider in conducting the study and requires a joint 
        federal/tribal stakeholder consultation process.
    Indian Gaming Regulatory Act of 1988
    Indian Land Consolidation Act of 1983
    Indian Mineral Development Act of 1982
    Indian Self-Determination and Education Assistance Act
             Tribal Self-Governance Demonstration Project Act 1991
             In 1994, Congress amended the Act to create a permanent 
        self-governance authority in BIA.
             1996 amendments to allow tribes to take over control and 
        management of programs in the DOI outside the BIA.
    Indian Tribal Economic Development and Contract Encouragement Act 
of 2000
    Indian Tribal Energy Development and Self Determination Act 2005
    Indian Tribal Government Tax Status Act of 1982
    Native American Housing Assistance and Self Determination Act of 
1988
             Native American Housing Assistance and Self Determination 
        Reauthorization 2002
    National Indian Forest Resources Management Act 1990
    Omnibus Indian Advancement Act 2000
    Tribal Law and Order Act of 2011
Appendix 2--Supreme Court Cases Since 1970: Federal Government's 
        Position
Supporting Tribal Interests as Amicus
    Choctaw Nation v. Oklahoma, 397 U.S. 620 (1970)
    Mescalero Apache Tribe v. Jones, 411 U.S. 145 (1973)
    McClanahan v. Arizona State Tax Commission, 411 U.S. 154 (1973)
    Tonasket v. Washington, 411 U.S. 451 (1973) (per curiam)
    Mattz v. Arnett, 412 U.S. 481 (1973)
    Puyallup Tribe, Inc. v. Dept. of Game, 414 U.S. 44 (1973)
    County of Oneida, N.Y. v. Oneida Indian Nation of N.Y., 414 U.S. 
661 (1974)
    Antoine v. Washington, 420 U.S. 194 (1975)
    DeCoteau v. District Court, 420 U.S. 424 (1975)
    Bryan v. Itasca County, 426 U.S. 373 (1976)
    Rosebud Sioux Tribe v. Kneip, 430 U.S. 584 (1977)
    Puyallup Tribe, Inc. v. Dept. of Game, 433 U.S. 165 (1977)
    Oliphant v. Suquamish Indian Tribe, 435 U.S. 191 (1978)
    Washington v. Yakima Indian Nation, 439 U.S. 463 (1979)
    Idaho ex rel. Evans v. Oregon and Washington, 444 U.S. 380 (1980)
    Washington v. Colville Confederated Tribes, 447 U.S. 134 (1980)
    Central Machinery Co. v. Arizona State Tax Commission, 448 U.S. 160 
(1980)
    White Mountain Apache Tribe v. Bracker, 448 U.S. 136 (1980)
    Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982)
     Ramah Navajo School Board v. Bureau of Revenue of New Mexico, 458 
U.S. 832 (1982)
    New Mexico v. Mescalero Apache Tribe, 462 U.S. 324 (1983)
    Rice v. Rehner, 463 U.S. 713 (1983)
    Solem v. Bartlett, 465 U.S. 463 (1984)
    Three Affiliated Tribes v. Wold Engineering, 467 U.S. 138 (1984)
    Kerr-McGee Corp. v. Navajo Tribe, 471 U.S. 195 (1985)
    National Farmers Union Ins. Cos. v. Crow Tribe, 471 U.S. 845 (1985)
    Montana v. Blackfeet Tribe, 471 U.S. 759 (1985)
    South Carolina v. Catawba Indian Tribe, Inc., 476 U.S. 498 (1986)
    Iowa Mutual Ins. Co. v. LaPlante, 480 U.S. 9 (1987)
    Duro v. Reina, 490 U.S. 676 (1990)
    Oklahoma Tax Commission v. Citizen Potawatomi, 498 U.S. 505 (1991)
    County of Yakima v. Yakima Indian Nation, 502 U.S. 251 (1992)
    Oklahoma Tax Commission v. Sac and Fox Nation, 508 U.S. 114 (1993)
    South Dakota v. Bourland, 508 U.S. 679 (1993)
    Hagen v. Utah, 510 U.S. 399 (1994)
    Dept. of Taxation and Finance v. Milhelm Attea, 512 U.S. 61 (1994)
    Oklahoma Tax Commission v. Chickasaw Nation, 515 U.S. 450 (1995)
    Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996)
    Strate v. A-1 Contractors, 520 U.S. 438 (1997)
    South Dakota v. Yankton Sioux Tribe, 522 U.S. 322 (1998)
    Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc., 523 
U.S. 751(1998)
    Cass County v. Leech Lake Band of Chippewa Indians, 524 U.S. 103 
(1998)
    Minnesota v. Mille Lacs Band of Chippewa Indians, 526 U.S. 172 
(1999)
    C&L Enterprises v. Citizen Potawatomi, 532 U.S. 411 (2001)
    Atkinson Trading Co., Inc. v. Shirley, 532 U.S. 645 (2001)
    Nevada v. Hicks, 533 U.S. 353 (2001)
     Inyo County v. Paiute-Shoshone Indians of the Bishop Indian 
Colony, 538 U.S. 701 (2003)
    Sherrill v. Oneida Indian Nation of N.Y., 544 U.S. 197 (2005)
    Wagnon v. Prairie Band Potawatomi Nation, 546 U.S. 95 (2005)
    Plains Commerce Bank v. Long Family Land and Cattle Co., 556 U.S. 
316 (2008)
Opposing Tribal Interests as Amicus
    Santa Clara Pueblo v. Martinez, 436 U.S. 49 (1978)
    Mountain States Tel. & Tel. Co. v. Pueblo of Santa Ana, 472 U.S. 
237 (1985)
    Amoco Production Co. v. Village of Gambell, 480 U.S. 531 (1987)
    Arizona Dept. of Revenue v. Blaze Construction Co., 526 U.S. 32 
(1999)
    El Paso Natural Gas Co. v. Neztsosie, 526 U.S. 473 (1999)
     South Florida Water Mgmt. Dist. v. Miccosukee Tribe of Florida, 
541 U.S. 95 (2004)
Appendix 3--Selected Cases in Which the United States Served as Trustee 
        to Tribal Interests
    Colorado River Conservation Dist. v. United States, 424 U.S. 800 
(1976)
    Cappaert v. United States, 426 U.S. 128 (1976)
    Wilson v. Omaha Indian Tribe, 442 U.S. 653 (1979)
     Washington v. Washington State Commercial Passenger Fishing Vessel 
Assoc., 443 U.S. 658 (1979)
    United States v. Clarke, 445 U.S. 253 (1980)
    Andrus v. Glover Construction Co., 446 U.S. 608 (1980)
    Montana v. United States, 450 U.S. 544 (1981)
    Arizona v. California, 460 U.S. 605 (1983)
    Nevada v. United States, 463 U.S. 110 (1983) *
---------------------------------------------------------------------------
    * Nevada involved a federal conflict of interested in which the 
Supreme Court relieved the government of its trust obligations to 
Indian tribes where an Act of Congress authorizes the government to act 
to the detriment of the tribal trust beneficiary. See Nevada, 463 U.S. 
at 128 (``The Government does not `compromise' its obligation to one 
interest that Congress obliges it to represent by the mere fact that it 
simultaneously performs another task for another interest that Congress 
has obligated it by statute to do.'').
---------------------------------------------------------------------------
    Arizona v. San Carlos Apache Tribe of Arizona, 463 U.S. 545 (1983)
    Escondio Mutual Water Co. v. La Jolla Indians, 466 U.S. 765 (1984)
    Oneida Indian Nation of N.Y. v. Oneida County, N.Y., 470 U.S. 226 
(1985)
    Wyoming v. United States, 492 U.S. 408 (1990)
    Montana v. Crow Tribe of Indians, 523 U.S. 696 (1998)
    Arizona v. California, 530 U.S. 392 (2000)
    Dept. of Interior v. Klamath Water Users Protective Assn., 532 U.S. 
1 (2001)
    Idaho v. United States, 533 U.S. 262 (2001)
    United States v. Lara, 541 U.S. 191 (2004)
    Carcieri v. Salazar, 555 U.S. 379 (2008)
    Salazar v. Patchak, __ U.S. __ (2012) (pending)
Appendix 4--Selected Cases in Which the United States Defended against 
        Tribal or Indian Trust Breach or Other Claims
    United States v. Southern Ute Indians, 402 U.S. 159 (1971)
    Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 
(1972)
    United States v. Jim, 409 U.S. 80 (1972)
    United States v. Mason, 412 U.S. 391 (1973)
    Delaware Tribal Business Committee v. Weeks, 430 U.S. 73 (1977)
    United States v. Mitchell, 445 U.S. 535 (1980)
    United States v. Sioux Nation of Indians, 448 U.S. 371 (1980)
    United States v. Mitchell, 463 U.S. 206 (1983)
    United States v. Dann, 470 U.S. 39 (1985)
    United States v. Mottaz, 476 U.S. 834 (1986)
    United States v. Cherokee Nation, 480 U.S. 700 (1987)
    Hodel v. Irving, 481 U.S. 704 (1987)
    Lyng v. Northwest Indian Cemetery Protective Association, 485 U.S. 
439 (1988)
    Lincoln v. Vigil, 508 U.S. 182 (1993)
    Babbitt v. Youpee, 519 U.S. 234 (1997)
    Chickasaw Nation v. United States, 534 U.S. 84 (2001)
    United States v. White Mountain Apache Tribe, 537 U.S. 465 (2003)
    United States v. Navajo Nation, 537 U.S. 488 (2003)
    Cherokee Nation of Oklahoma v. Leavitt, 543 U.S. 631 (2005)
    United States v. Navajo Nation, 556 U.S. 287 (2009)
Appendix 5--Selected Provisions of the United Nations Declarations on 
        the Rights of Indigenous Peoples
    Recognizing the urgent need to respect and promote the inherent 
rights of indigenous peoples which derive from their political, 
economic and social structures and from their cultures, spiritual 
traditions, histories and philosophies, especially their rights to 
their lands, territories and resources,
Article 4
    Indigenous peoples, in exercising their right to self-
determination, have the right to autonomy or self-government in matters 
relating to their internal and local affairs, as well as ways and means 
for financing their autonomous functions.
Article 5
    Indigenous peoples have the right to maintain and strengthen their 
distinct political, legal, economic, social and cultural institutions, 
while retaining their right to participate fully, if they so choose, in 
the political, economic, social and cultural life of the State.
Article 8
    1. Indigenous peoples and individuals have the right not to be 
subjected to forced assimilation or destruction of their culture.
    2. States shall provide effective mechanisms for prevention of, and 
redress for:

         (a) Any action which has the aim or effect of depriving them 
        of their integrity as distinct peoples, or of their cultural 
        values or ethnic identities;

         (b) Any action which has the aim or effect of dispossessing 
        them of their lands, territories or resources;

         (c) Any form of forced population transfer which has the aim 
        or effect of violating or undermining any of their rights;

         (d) Any form of forced assimilation or integration;

         (e) Any form of propaganda designed to promote or incite 
        racial or ethnic discrimination directed against them.

Article 11
    1. Indigenous peoples have the right to practise and revitalize 
their cultural traditions and customs. This includes the right to 
maintain, protect and develop the past, present and future 
manifestations of their cultures, such as archaeological and historical 
sites, artefacts, designs, ceremonies, technologies and visual and 
performing arts and literature.
    2. States shall provide redress through effective mechanisms, which 
may include restitution, developed in conjunction with indigenous 
peoples, with respect to their cultural, intellectual, religious and 
spiritual property taken without their free, prior and informed consent 
or in violation of their laws, traditions and customs.
Article 19
    States shall consult and cooperate in good faith with the 
indigenous peoples concerned through their own representative 
institutions in order to obtain their free, prior and informed consent 
before adopting and implementing legislative or administrative measures 
that may affect them.
Article 20
    1. Indigenous peoples have the right to maintain and develop their 
political, economic and social systems or institutions, to be secure in 
the enjoyment of their own means of subsistence and development, and to 
engage freely in all their traditional and other economic activities.
    2. Indigenous peoples deprived of their means of subsistence and 
development are entitled to just and fair redress.
Article 23
    Indigenous peoples have the right to determine and develop 
priorities and strategies for exercising their right to development. In 
particular, indigenous peoples have the right to be actively involved 
in developing and determining health, housing and other economic and 
social programmes affecting them and, as far as possible, to administer 
such programmes through their own institutions.
Article 25
    Indigenous peoples have the right to maintain and strengthen their 
distinctive spiritual relationship with their traditionally owned or 
otherwise occupied and used lands, territories, waters and coastal seas 
and other resources and to uphold their responsibilities to future 
generations in this regard.
Article 26
    1. Indigenous peoples have the right to the lands, territories and 
resources which they have traditionally owned, occupied or otherwise 
used or acquired.
    2. Indigenous peoples have the right to own, use, develop and 
control the lands, territories and resources that they possess by 
reason of traditional ownership or other traditional occupation or use, 
as well as those which they have otherwise acquired.
    3. States shall give legal recognition and protection to these 
lands, territories and resources. Such recognition shall be conducted 
with due respect to the customs, traditions and land tenure systems of 
the indigenous peoples concerned.
Article 27
    States shall establish and implement, in conjunction with 
indigenous peoples concerned, a fair, independent, impartial, open and 
transparent process, giving due recognition to indigenous peoples' 
laws, traditions, customs and land tenure systems, to recognize and 
adjudicate the rights of indigenous peoples pertaining to their lands, 
territories and resources, including those which were traditionally 
owned or otherwise occupied or used. Indigenous peoples shall have the 
right to participate in this process.
Article 28
    1. Indigenous peoples have the right to redress, by means that can 
include restitution or, when this is not possible, just, fair and 
equitable compensation, for the lands, territories and resources which 
they have traditionally owned or otherwise occupied or used, and which 
have been confiscated, taken, occupied, used or damaged without their 
free, prior and informed consent.
    2. Unless otherwise freely agreed upon by the peoples concerned, 
compensation shall take the form of lands, territories and resources 
equal in quality, size and legal status or of monetary compensation or 
other appropriate redress.
Article 29
    1. Indigenous peoples have the right to the conservation and 
protection of the environment and the productive capacity of their 
lands or territories and resources. States shall establish and 
implement assistance programmes for indigenous peoples for such 
conservation and protection, without discrimination.
    2. States shall take effective measures to ensure that no storage 
or disposal of hazardous materials shall take place in the lands or 
territories of indigenous peoples without their free, prior and 
informed consent.
    3. States shall also take effective measures to ensure, as needed, 
that programmes for monitoring, maintaining and restoring the health of 
indigenous peoples, as developed and implemented by the peoples 
affected by such materials, are duly implemented.
Article 32
    1. Indigenous peoples have the right to determine and develop 
priorities and strategies for the development or use of their lands or 
territories and other resources.
    2. States shall consult and cooperate in good faith with the 
indigenous peoples concerned through their own representative 
institutions in order to obtain their free and informed consent prior 
to the approval of any project affecting their lands or territories and 
other resources, particularly in connection with the development, 
utilization or exploitation of mineral, water or other resources.
    3. States shall provide effective mechanisms for just and fair 
redress for any such activities, and appropriate measures shall be 
taken to mitigate adverse environmental, economic, social, cultural or 
spiritual impact.
Article 40
    Indigenous peoples have the right to access to and prompt decision 
through just and fair procedures for the resolution of conflicts and 
disputes with States or other parties, as well as to effective remedies 
for all infringements of their individual and collective rights. Such a 
decision shall give due consideration to the customs, traditions, rules 
and legal systems of the indigenous peoples concerned and international 
human rights.

    The Chairman. Thank you very much, Mr. Fletcher.
    Mr. Rey-Bear. please proceed with your testimony.

  STATEMENT OF DANIEL REY-BEAR, PARTNER, NORDHAUS LAW FIRM LLP

    Mr. Rey-Bear. Chairman, Vice Chairman, Members of the 
Committee, thank you all for very much for paying attention to 
the important issues that are presented here. Thank you, 
Senator Udall, for your kind introduction.
    This hearing presents basically three questions. What is 
the trust responsibility? What is the problem, if any? And 
what, if anything, should be done about it?
    In this, I am guided by the recognition that if there is no 
trust responsibility or no meaningful trust responsibility, 
little else matters. So because of this, I am addressing 
foundational issues but not also important policy issues that 
flow from them, for example, regarding the Carcieri fix, energy 
resource development, tax policy, the HEARTH Act, facts and so 
forth.
    So, what are the foundational principles? One, the trust 
responsibility, as noted at the outset, is founded on settled 
international law. The United States necessarily assumed 
meaningful fiduciary duties over Indian Tribes, regarding 
Indian Tribes, which remain sovereign. Second, Tribes fully 
bought and paid for meaningful, ongoing trust responsibility 
via land cessions and peace. Third, strict ``fiduciary trust'' 
duties, in the words of the Department of Interior, extend 
beyond express statutory and regulatory mandates because that 
is simply the nature of the relationship.
    And finally, while the relationship has sometimes been 
described as a guardianship, it properly should not be. But 
even it if were, that merely supports self-determination of 
Tribes as recognized by Congress repeatedly, and in the United 
Nations Declaration on the Rights of Indigenous Peoples.
    So, what is the problem regarding these foundational 
issues? Well, the problem is that in Indian trust cases, where 
Tribes seek to enforce the responsibility, that the Executive 
Branch has repeatedly misrepresented facts and law in efforts 
to avoid liability. This is not simply an issue that comes up 
in these cases, but is an issue that undermines Federal and 
Tribal working relationships that should be more aligned.
    Just to give a few examples. No fewer than seven times 
Federal courts have expressly rejected the argument by the 
Executive Branch that there are no fiduciary duties whatsoever 
beyond express statutory and regulatory mandates. No fewer than 
15 times have Federal courts expressly rejected the Federal 
argument that an arbitrary and capricious standard of care 
applies, instead of strict fiduciary duties.
    And in the Navajo Nation case and in the Jicarilla Apache 
Nation case, two recent cases by the Supreme Court, the United 
States misrepresented their own regulations, their own 
established policy, in order to achieve a desired result.
    So, what is the solution? In essence, it is to reaffirm the 
full meaning of the trust responsibility. As happened 
previously with the Cobell litigation, the fact that there is 
pending litigation does not preclude meaningful Congressional 
oversight.
    As noted already by another speaker, first and foremost 
Tribes themselves must be consulted. It is also notable that 
there is the pending Secretarial Commission on Indian Trust 
Administration and Reform. Pending such consultation and such 
input from the Commission, I can only offer a few preliminary 
suggestions for the Committee in terms of oversight to the 
Executive Branch.
    First, the Executive Branch must stop disregarding history 
and express Congressional directions in denying that meaningful 
fiduciary duties exist. As a related matter, the Executive 
Branch must stop asserting that an arbitrary and capricious 
standard applies rather than strict fiduciary duties.
    Second, the Executive Branch must acknowledge that the 
trust responsibility supports, and does not conflict, with 
self-determination.
    Finally, for situations where there are conflicts of 
interest, because they can in fact happen, because Congress 
indeed does impose them sometimes, for example, in the 
situation with the NRLB and San Francisco Peaks, I recommend 
re-establishing the practice of split briefing so that at least 
some part of the Executive Branch can adhere to the trust 
responsibility.
    In sum, I simply ask that the Executive Branch 
consistently, as it does most of the time, respect the 
foundation and restore the honor to defending the trust 
responsibility.
    I would be happy to take any questions.
    [The prepared statement of Mr. Rey-Bear follows:]

 Prepared Statement of Daniel Rey-Bear, Partner, Nordhaus Law Firm LLP






















    The Chairman. Thank you very much, Mr. Rey-Bear.
    To the panel, as you know, fixing the Carcieri decision is 
one of my top priorities. My question to this panel is, what is 
your view on how the Carcieri fix will strengthen the Federal 
Government's trust relationship with Tribes? Ms. McCoy?
    Ms. McCoy. Thank you, Mr. Chairman. I think it is important 
that Congress proceed to address the situation in the wake of 
the decision that has put the matter back to Congress. And I 
think it is important that, again, it goes back to the history 
and what can be done, I think, to treat all Tribes equally and 
fairly with their most important resource, the land.
    So, we urge again, you know, that the work that needs to 
done to accomplish that continue to be done in consultation 
with Tribes on that.
    The Chairman. Thank you very much. Mr. Fletcher?
    Mr. Fletcher. Thank you for that question, Mr. Chairman. 
The Carcieri case is near and dear to my heart. I am a member 
of a Michigan Tribe, one of six that had been administratively 
terminated. We are all treaty Tribes and the Department of the 
Interior in the 1870s chose not to return our phone calls 
anymore, for about 100 years. As a result, Carcieri potentially 
has applicability to some of the Michigan Tribes.
    I think that a Carcieri fix, especially a simple one, 
simply reversing the Supreme Court's decision, would accomplish 
a very important task which is for Congress to demonstrate to 
the United States Supreme Court how serious they are in their 
trust relationship.
    Carcieri is a direct rejection of the Department of 
Interior's seven decade long interpretation of Section 5 of the 
Indian Reorganization Act. Seven decades of consistent 
regulatory interpretation of the statute. And the Supreme Court 
said that it is fundamentally irrelevant to our decision.
    And I think for Congress to fix Carcieri would be a 
statement, not only on the question of Carcieri, but from 
Congress directly to the Supreme Court saying we are very 
serious about the trust responsibility and we are very serious 
about reducing the Supreme Court's interference in the trust 
responsibility. Thank you.
    The Chairman. Thank you very much. Mr. Rey-Bear?
    Mr. Rey-Bear. I completely agree with the comments that 
have been made already. I would only add that the importance of 
enacting Carcieri fix legislation, I think, is well illustrated 
by the fact that it will significantly help enhance prospects 
for Tribal self-determination and economic development and it 
will cost taxpayers nothing.
    The Chairman. Thank you. I agree with you that fixing 
Carcieri is vital. It is vital to ensuring a strong trust 
relationship. I want to announce that a report on this 676, the 
Carcieri Fix legislation, is being filed today and will contain 
a great deal of information based on the record built by this 
Committee on the need for this legislation to pass this 
Congress. We will be working diligently on that.
    Let me now ask other members for their questions and I may 
be back with further questions. Vice Chairman Barrasso?
    Senator Barrasso. Thank you, Mr. Chairman. And like you, I 
have a question for the panel.
    Recently, the Government moved to settle trust 
mismanagement disputes with 41 Tribes, I think totaling over $1 
billion. Will this large settlement address many of the 
outstanding mismanagement claims by Tribes against the 
Government or are there still many pending claims that need to 
be resolved beyond this?
    Ms. McCoy. Mr. Vice Chairman, I appreciate the question. 
The landscape of the cases, I think, is such at this time. At 
one point, there were over 100 pending cases and the previous 
Administration settled three of those. And from 2010 to 2011, 
this Administration settled another three. And then, most 
recently, another 42 were announced. So, I think that cuts the 
number in half of the pending cases.
    Back in 1996, Arthur Andersen contract reports on the 
effort to reconcile the Tribal Trust Funds were distributed to 
311 Tribal account holders. So, that seems to put the number of 
Tribes that chose to bring claims to about one-third of the 
Tribal account holder population.
    Senator Barrasso. The 100 of the 300, one-third.
    Ms. McCoy. That is correct.
    Senator Barrasso. Well, some of the, if anyone wants to 
jump in on that, or another question. Mr. Rey-Bear, did you 
have something you wanted to add to that?
    Mr. Rey-Bear. Yes.
    Senator Barrasso. Go ahead.
    Mr. Rey-Bear. As I believe may have been noted earlier, 
there are about 100 Tribes that filed breach of trust claims. 
Forty or so have been settled.
    Senator Barrasso. Yes.
    Mr. Rey-Bear. So, there are quite a number that are 
pending. In particular, the Nordhaus Law Firm where I work 
represents the Navajo Nation which has the largest claims of 
any Tribe. We also represent the Pueblo Laguna, which has 
substantial claims in large part because of what was at one 
time the world's largest open pit uranium mine. Ms. Atcitty 
will be testifying on behalf of the Jicarilla Apache Nation. 
Their case is also pending. In particular, the Jicarilla Apache 
case had a trial last November for which closing argument is 
scheduled in two weeks. A decision in that case is expected 
this year.
    Senator Barrasso. So, half of them are settled, 
essentially. Are the other half that are left over much more 
complicated or simpler? Or how do you weigh this so we get a 
better understanding of what is still out there?
    Mr. Rey-Bear. I would say both are still pending, both 
types of claims are still pending.
    Senator Barrasso. You know, some of these mismanagement 
lawsuits are based on the claim that the Government has sold 
Tribal resources for below fair market value in violation of 
really what would be a trust responsibility. You know, sold too 
low.
    Is this a problem that is still occurring today even as we 
go on, or is the Government taking the proper precautions now 
to make sure that it is no longer happening, so we do not face 
additional problems and suits? Anyone have a thought?
    Mr. Rey-Bear. I hesitate to make a categorical statement, 
but the situation has certainly improved in large part because 
of the increased capacity of Indian Tribes to essentially 
police what the United States does.
    Senator Barrasso. Okay. Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Barrasso. Senator Udall?
    Senator Udall. Thank you, Chairman Akaka. And this 
question, couple of questions, are just for the first panel 
here in general.
    Many of you mentioned the recent Jicarilla Supreme Court 
decision in your testimony and I would like to open up a little 
more discussion on that. What do you believe the current and 
future impact of the Jicarilla decision will be? Does the 
Jicarilla decision erode Tribal rights and/or Federal trust 
responsibility to Tribes? And do you believe the Jicarilla 
decision needs a legislative fix and what would that 
legislative fix look like?
    Mr. Fletcher. I will speak generally about the Jicarilla 
decision. I follow the Supreme Court's pronouncements on Indian 
law pretty carefully.
    Jicarilla is a case of relatively limited precedential 
value. But its statements about the trust responsibility are 
incredibly broad and, for the first time since, well, perhaps 
for 20 or 30 or many more years than that, the Supreme Court 
has begun to cite to a case called Lone Wolf versus Hitchcock, 
which is the classic case of establishing or recognizing a form 
of guardian-ward relationship between the Federal Government 
and Indian Tribes.
    Now, a ward suing a guardian really has no authority, has 
no right to force any kind of activity or certainly to win 
money damages for a breach of a guardianship whereas the trust 
beneficiary does. Now, if the Supreme Court is starting to 
rethink the trust relationship as more of a guardian-ward 
relationship and to limit it, Jicarilla is really a bell 
weather for future trust cases and it gives you a sense of 
where the Court is heading in that direction. And for Tribal 
interests, it is not very good.
    Senator Udall. Do the other two panelists, do you have any 
thoughts on that?
    Ms. McCoy. I think part of this stems from the, it is such 
a unique relationship. We have a sovereign, the United States, 
serving as a trustee for another sovereign, the Indian Tribes. 
And there really is no comparable. So, it puts a seemingly 
ordinary relationship in these extraordinary situations.
    I think that the history is important. I mean again, I will 
go back to, if the Indian Claims Commission in three decades, 
when Tribes were allowed an opportunity to present their claims 
and that resulted in awards of $1.2 billion and we are seeing 
the settlements now also over $1 billion to Tribes that have 
brought their claims, something about that says something that 
these matters can be addressed.
    As far as the future and the Supreme Court's rule on that, 
this Supreme Court does not need the United States Government 
to guide its views on Indian rights. But, that tends to happen.
    Mr. Rey-Bear. The short answer is, it depends. There are 
practical implications. Part of my own practice, apart from 
litigating breach of trust claims, is handling trust 
acquisitions for Tribes. For a dozen years, when I would do 
this, in the process of handling these matters we would have to 
address title issues raised by preliminary title opinions. And, 
as a matter of course, the Department of Interior and the 
Bureau of Indian Affairs would provide those so that I, as the 
attorney for the Tribe, would know what title issues needed to 
be resolved to complete a transaction.
    Ever since the decision by the Federal Circuit in this 
case, the United States has stopped providing those preliminary 
title opinions because, as they stated it, they are attorney-
client privileged communication that I am not allowed to see. 
So, that is just one practical working relationship sort of 
impact.
    Since the remand, the United States has used the decision 
to specifically argue that that decision essentially overturned 
decades of substantial case law, including case law that 
specifically recognizes Congressional legislation. For example, 
the Indian Trust Reform Act specifically holds and recognizes 
that the United States must maximize revenue from Indian Trust 
Funds. The United States has argued in cases that, 
notwithstanding that express Congressional statute, it has no 
such duty because of the Jicarilla decision by the Supreme 
Court.
    So, there can be substantial impact. However, it depends on 
how the Executive Branch acts going forward. If they reform, so 
to speak, then there should not be an impact.
    In essence, to quote Peterson Zah as stated in my written 
testimony, we need protection from our protector. And when the 
Executive Branch does not protect the interest of Tribes, we go 
to the Supreme Court. And now that the Supreme Court has said 
that it is not willing to protect the Tribes, the Tribes 
understandably come back to Congress.
    Senator Udall. Yes, and I think that it is fair to say that 
there was a period in history where the Supreme Court was 
really a champion in terms of Native rights and now it has 
turned the other way and, in may cases, I think, the pleas fall 
on deaf ears.
    So, thank you for those answers. Thank you, Chairman Akaka.
    The Chairman. Thank you very much, Senator Udall.
    I do have a question for each of you. Ms. McCoy, the Native 
American Rights Fund has been instrumental in working with the 
Tribes over the years in litigation and protecting the scope of 
the trust responsibility. What do you think we in Congress can 
do to ensure the trust responsibility is as strong as it needs 
to be throughout the Federal Government?
    Ms. McCoy. Mr. Chairman, again I will emphasize that it 
really, while NARF works with Tribes, we do not speak for them. 
And I urge, I urge the Committee and Congress to seek these 
answers from the Tribes themselves. That is the only way to 
really implement the government-to-government relationship. I 
am happy to facilitate that but I think the answer best comes 
from the Tribes.
    And I appreciate Mr. Rey-Bear's reference, too, to the new 
Secretarial Commission on Indian Trust Administration and 
Reform. The Native American Rights Fund, on behalf of its 
clients, looks forward to working with that Commission which is 
charged with advising the Secretary of the Interior but which 
can also, of course, the work of the Commission can be shared 
with Congress and that would be specifically on the nuts and 
bolts trust issues that I had talked about, the trust accounts, 
the trust funds, the trust assets.
    Getting into other areas of the trust, education, health, 
and many other areas, Tribal courts and things like that, I 
think there are processes in place for that. And it is an 
ongoing relationship and as Tribal nations evolve, so must this 
Nation to step up and deal with that.
    It is a difficult task but it can be done. So, we 
appreciate opportunities like this hearing, and the Tribe 
leaders that are going to speak on the next panel, to really 
direct the work of this Committee.
    The Chairman. Thank you. Thank you. Mr. Fletcher, I know 
you host a blog that provides information on ongoing litigation 
and legal issues to Indian Country . My question to you is, how 
would you characterize the state of the trust relationship 
today based on your analysis and what improvements could be 
made to strengthen the trust relationship?
    Mr. Fletcher. Thank you for the question. Yes, we have been 
watching what has been going on in Indian Affairs for the last 
several years. The blog started in September 2007.
    The first thing I would have to say, and it sounds like I 
may sound like what I am going to say is facetious, but I am 
very serious. I do not envy the Federal Government in its 
obligations toward Indian Tribes and Indian Nations and its 
trust responsibility. It is rote with inherent conflicts of 
interest. You could say they are both vertical and horizontal 
in that the Federal Government, especially the Executive 
Branch, must deal with conflicts between Tribes, within Tribes. 
These are conflicts that are not necessarily areas in which the 
Federal Government has a dog in those fights. But, in some 
cases, the Federal Government's actions historically have 
created these fights.
    The other conflicts, of course, are within the Federal 
Government itself, most obviously within the Department of 
Interior where you have, perhaps, I do not know, the 
Environmental Protection Agency has a view in protecting the 
environment and the Bureau of Indian Affairs in relation to its 
trust responsibility to Indian Tribes that may conflict with 
the EPA on something.
    And we see that almost every week. Another case, another 
conflict arising, maybe in the news or maybe in a new decision 
that has come out. And what we are seeing, I think, are these 
conflicts are becoming, maybe, they are becoming much more 
serious, I think in part because Congress and the Executive 
Branch are taking their trust responsibilities seriously in 
most instances.
    What you are seeing, however, is a clampdown, certainly, on 
any kind of claims by Indian Tribes for money damages. 
Absolutely, a clampdown. And what Mr. Rey-Bear is talking about 
in terms of the actions of the Department of Interior and other 
Federal agencies in some of these cases has been going on a 
long time. Judge Lamberth in the early years, really the first 
10 years of the Cobell litigation, repeatedly raised these 
issues of sort of, you know, dirty pool in litigation between 
Tribes and individual Indians and the United States.
    I think a couple of things that we are seeing, that we are 
going to see in the future that are very, very serious involve 
the natural resource extraction and environmental protection. 
There are a lot of Tribes around the United States that have 
been sitting on natural resources for a long time. Sometimes, 
those resources have been stolen out from underneath them and 
they are only now beginning to take control over those 
resources and begin to actually profit from them in a way that 
they normally should. And, at the same time, some of those 
resources are direct contributors to climate change and global 
warming as the best science would tell us.
    And so, and I have to do a call-out to my colleague 
Professor Singel again, who gave a talk recently at Montana Law 
School where she talked specifically about this new phenomenon, 
maybe it has been around for a while, but a newly important 
phenomenon called fracking. We do not know what the impacts of 
fracking are. A lot of it is going on in Indian Country. It is 
incredibly lucrative. But there have been reports that fracking 
has polluted drinking water extensively and perhaps even caused 
earthquakes here in D.C., although who knows.
    And so you see this kind of conflict. There are going to be 
interTribal conflicts and there are also going to be 
interagency conflicts. I would just conclude with I do not envy 
the Federal Government in this way because these are very 
complex and difficult issues.
    I know that Congress, in assessing priorities, can do a 
great deal of important work in this area. And I think probably 
perhaps, and I mentioned this before, perhaps its greatest 
impact may be to reconsider some of the cases that the Supreme 
Court has decided recently in terms of the trust responsibility 
and to just remind the Supreme Court that Congress and the 
Executive Branch, and particularly Congress, are really the 
primary interpreters of the Federal Indian law and policy and 
they are the policymakers in this question, not the judiciary. 
Thank you.
    The Chairman. Thank you very much, Mr. Fletcher. Let me 
make this my final question to Mr. Rey-Bear. What would you 
consider the lessons learned from the Jicarilla case and what 
actions would you like to see from Congress or the 
Administration following the Jicarilla decision?
    Mr. Rey-Bear. The cynical answer, unfortunately, is that 
when called to task for violations of fiduciary duties, the 
Executive Branch cannot be trusted to act honorably in its own 
defense. Its own departmental manual specifically requires 
informing Tribes and communicating with Tribes regarding the 
administration of their trust assets. And a Secretarial Order 
specifically recognizes that the administration of trust assets 
necessarily includes solicitor's opinions.
    Notwithstanding the established policy of the Department of 
Interior which is mandatory and failure to comply with can 
result in termination, the Department of Interior, through the 
Department of Justice, argued that it had no such duty to the 
Supreme Court. So, that is one effect of the decision.
    As I noted already, it undermines working relationships 
with Tribes and the Federal Government when they should be 
aligned, for example, with the trust acquisition process that I 
noted already but also in disputes with third parties. 
Essentially, if the Federal Government does not take its trust 
responsibility seriously, why should anybody else?
    In terms of what Congress can do, I agree with the 
statement made already by Professor Fletcher that now is the 
time for Congress to reassert that, under the Constitution, it 
is Congress which is the primary repository for setting policy 
regarding Indian Tribes. The Indian Commerce Clause is in 
Article I, not in Article III. And so, that should be clear and 
the Supreme Court should respect Congress' authority, just as 
the Executive Branch should.
    The Chairman. Thank you, Mr. Rey-Bear.
    Are there any further questions?
    Senator Udall. Mr. Rey-Bear, if I could just ask one. Did 
you not mention the practice of split briefing in your 
testimony and how that was successful in the 1970s? Could you 
expand on that for the Committee and describe how this was 
successful and why the process was stopped and then what the 
current benefit of split briefing would be for the Tribes?
    Mr. Rey-Bear. The practice was instituted in the 1970s 
essentially as a stopgap measure, sort of an administrative way 
to implement a policy recommended by President Nixon in his 
Special Message to Congress in 1970 which called for 
establishment of what was to be called an Indian Trust Counsel 
Authority. The idea being that, recognizing that the United 
States sometimes has conflicts, there should be a specific 
representation of Tribes by the Federal Government which 
adheres to the trust responsibility, even if there are 
conflicts.
    So, what happened was that there was essentially an 
agreement between the Department of Interior and the Department 
of Justice, at the behest of the White House, providing that 
where there was a conflict between agencies, for example the 
Bureau of Indian Affairs representing Tribes and another 
agency, I cannot recall the specifics but an example current 
day might be the National Labor Relations Board. Where this is 
a difference of opinion, the Department of Interior would file 
a brief sort of respecting the trust responsibility for Indian 
Tribes and the other agency, through the Department of Justice, 
would file their brief stating the opposite position. And in 
the six cases where this was done, every single time the Tribal 
position prevailed.
    The practice was stopped at the behest or direction of 
Attorney General Bell in 1979. I do not know what the specific 
reasons were, but I think it is notable that the policy behind 
it regarding the Indian Trust Counsel Authority was not enacted 
by Congress in large part because the Executive Branch 
represented that it was not necessary because the Executive 
Branch knew what its trust responsibilities were and it would 
respect them in litigation.
    So, the benefits for the current day are in situations like 
San Francisco Peaks and the NLRB situation.
    Senator Udall. Mr. Fletcher, you look like you might have a 
comment on that, or not.
    Mr. Fletcher. I do not know the specifics. I had not heard 
about the split briefing. I think it is a great idea. I do also 
recognize that I think Tribes are in a much better position to 
state their own positions on the trust responsibility in the 
Supreme Court and in Federal courts as amice and as interveners 
as well. That is probably, possibly a big change as well. But I 
am in total agreement with Mr. Rey-Bear.
    Senator Udall. Thank you. I do not have any additional 
questions for this panel.
    The Chairman. Well, thank you very much, first panel. Thank 
you for your answers and you have been helpful. We may have 
further questions for you that we will place in the record and 
there also may be some from some other members of the 
Committee.
    So, thank you very much for being here.
    I would like to invite the second panel to the witness 
table.
    The Honorable Ray Halbritter, Nation Representative of the 
Oneida Indian Nation from Verona, New York, the Honorable Fawn 
Sharp, President of the Quinault Indian Nation in Taholah, 
Washington, the Honorable Brooklyn Baptiste, Vice Chairman of 
the Nez Perce Tribe in Lapwai, Idaho, and Ms. Shenan Atcitty, 
Legal Counsel here on behalf of President Pesata of the 
Jicarilla Apache Nation in Dulce, New Mexico. Unfortunately, 
the President, as was mentioned earlier, was unable to be here 
with us today.
    So, welcome, Mr. Halbritter, please proceed with your 
testimony.

  STATEMENT OF RAY HALBRITTER, NATION REPRESENTATIVE, ONEIDA 
                         INDIAN NATION

    Mr. Halbritter. I commend this Committee for holding this 
hearing as the topic is both complex and fundamental to the 
unique relationship of our governments. The consequences of a 
half-hearted and flawed implementation of the trust 
responsibility are many. But the resulting impact on Tribal 
sovereignty is a central concern to Tribal governments across 
the United States.
    Although this Congress and the current and some past 
Administrations have been generally supportive of Tribal 
sovereignty and have aspired to honor the trust relationship, 
States and local governments often contradict and resist the 
uniquely Federal relationship, instead often exploiting 
opportunities affirmatively to undermine it.
    In the case of the Oneida Nation, our trust relationship 
begins with our being the United States' first ally in the 
Revolutionary War. The United States' obligations derive from 
the Treaty of Canandaigua, which was signed in 1794 by our 
friend, President George Washington. The United States 
continues to recognize our Treaty of Canandaigua, among the 
oldest of still valid treaties.
    It says two things that are mostly relevant for today's 
hearing. First, the Treaty states that the United States 
acknowledges the lands of the Oneida, called our reservation, 
to be our property, and the United States will never claim our 
lands, nor disturb us in the free use and enjoyment of our 
lands.
    We agreed also to the following key provision from the 
Treaty. Less the firm peace and friendship now established 
should be interrupted by the misconduct of individuals, the 
United States and Six Nations agree that for injuries done by 
individuals on either side, complaint shall be made by the 
party injured to the other and such prudent measures shall then 
be pursued as shall be necessary to preserve our peace and 
friendship unbroken. Significantly, the Treaty of Canandaigua 
provides safeguards to both parties, the Oneida Nation and the 
United States.
    As contemplated by the treaty, when non-Federal parties 
overreach, such as in the case of New York's use of its own tax 
codes to stop transfer of the lands into trust, the duty of 
addressing those issues falls on the United States pursuant to 
its treaty obligations. The United States sometimes fulfills 
its obligations, oftentimes it does not and, when it does, it 
frequently comes after the damage is done.
    In response to my insistence that local counties follow the 
law with respect to the nation's sovereignty, the Chairman of 
the Madison County Board used the public platform of official 
state of the county address to incite extremist and dangerous 
reactions against our nation, referring to me as a third world 
dictator, with language which in turn directly affects the 
quality of life of our members and more particularly our 
children in the communities and schools where we are trying 
best to live peacefully and together.
    In light of the harsh realities faced by Indian nations 
within our local communities, this may be an opportune time for 
the United States to work with Indian nations to develop a 
framework to ensure the Federal Government's fulfillment of its 
trust obligation. There is substantial evidence that empowering 
Tribal governments leads to economic success, providing many 
benefits to surrounding communities. In the Oneida situation, 
the Federal Government's own independent economic study 
concluded that due to the presence of the Oneida Nation, local 
communities received back $16.94 per dollar.
    Some Tribes like the Oneida Nation have assumed important 
governmental functions. For example, creating court systems, 
fire protection, emergency service, housing and educational 
programs. That also relieves, as a result of this the Tribes 
also relieve local governments from having to spend their 
government dollars spending money on those programs. It is a 
multiplier effect showing real benefits when communities work 
together.
    We respectfully submit that this Committee ensure that our 
discussion today leads to the development of a new and 
constructive paradigm to guide Indian nations and the United 
States for the next future generations by creating a new 
bipartisan American Indian Policy Commission.
    Our recommendations to the commission would address how the 
trust relationship would work to ensure an acceptable level of 
habitability on the present reservations, on the poorest 
reservations, including the adequacy of education, healthcare, 
public safety and infrastructure.
    It could also address how the trust relationship could work 
to empower Indian nations that are on the cusp of economic 
self-sufficiency to redefine their trust relationship to fit 
their needs of success.
    The charge to the commission should not be finalized 
without additional consideration but it could also include 
recommendations regarding an appropriate mechanism to ensure 
that the funding of critical Indian programs are not subject to 
arbitrary reductions, potential legislation to create a strong 
presumption in favor of land being accepted into trust at the 
request of the Tribe, and the potential establishment of 
additional high level positions within the Administration to 
represent Indian Country .
    This Committee has already played a central role in 
advancing this discussion through this hearing and for that, we 
thank you.
    [The prepared statement of Mr. Halbritter follows:]

  Prepared Statement of Ray Halbritter, Nation Representative, Oneida 
                             Indian Nation




































    The Chairman. Thank you very much, Mr. Halbritter.
    President Sharp, would you please proceed with your 
testimony.

STATEMENT OF HON. DAWN SHARP, PRESIDENT, QUINAULT INDIAN NATION

    Ms. Sharp. Thank you, Chairman, distinguished Members of 
the Committee. We truly appreciate the opportunity to appear 
before you today.
    I represent not only the Quinault Indian Nation, but am the 
President of the Affiliated Tribes of the Northwest Indians. 
And I also have a unified and complementary role as Chairman of 
the new Trust Commission on Administration and Reform. So, I 
hope to interweave perspectives into this presentation and 
testimony, representing all three of those hats that I 
currently wear.
    I would like to begin by addressing the relationship itself 
that Indian Tribes have with the United States Government. And 
then I want to speak a little to the natural resources, and 
then wrap it up with our people.
    The relationship itself, we have determined out of the 
Northwest, out of the Quinault Indian Nation as well as 
beginnings of a discussion towards that end at the Commission 
that we need to define trust and trusteeship. It is long 
overdue for a very clear, succinct definition of what that 
means, not only what it means in the minds of those in this 
Congress, in the minds of those sitting on the U.S. Supreme 
Court, but first and foremost, in the minds of Indian people 
and Tribal leaders.
    To that end, we are working toward out of the Northwest 
through a series of sovereignty summits and meetings at the 
Affiliated Tribes of Northwest Indians, in concert with USET, 
to come up with a definition of trust and trusteeship from our 
perspective. And we believe that will be very helpful to not 
only this Congress, but the Court and others to define our 
perspective.
    Right now, that definition has been diluted, and as pointed 
out by Senator Udall, it is being further eroded through this 
term of the Congress. The old definition is based on this 
notion of dependency, it is based on this notion of 
incompetency, that we are wards of a guardian.
    We have always been very capable of managing our own 
affairs from the beginning of time. We have always been a 
competent people. We had very complex ecosystems that we 
managed as good stewards. We had very sophisticated economic 
structures within our communities. We had trade. We had many 
good things in our communities. It was only with the imposition 
of another sovereign into our lands and territories that 
corrupted that value system, that continues to corrupt that 
value system.
    This last Congress, a bill was passed in the House 
purporting to convey 2,400 acres to a multi-national 
corporation outside of the United States to mine copper in an 
area that is very sacred to the San Carlos Apaches. It is a 
place where they continue to do sacred dances. It is a place 
where they continue to gather traditional foods. An acorn that 
takes 100 years to mature in that area is threatened to be 
desecrated for profit, for gain, not to benefit those within 
this Country but to benefit those outside of the United States.
    It is a sad commentary that in this modern time, even over 
the objections of Indian people and our leadership, we continue 
to see an erosion not only in Congress but in the courts and 
even within the Administration. There are many good friends 
that we have been able to ally with within the Administration. 
Some that have good hearts, good minds, that see things from 
our value systems.
    But there is a structure in place that, even with the best 
of intentions and even with the best mind and heart, they are 
still incapable of discharging their duties along that sacred, 
solemn commitment that the United States has with Indian 
people. It is that Federal bureaucracy that needs change.
    And it needs change that is guided by sound principles that 
are deeply rooted within the values of our people so that we 
can not only set a good example for today to correct the past 
wrongs, but that we lay a strong foundation for future 
generations, that when they look back at this era and this 
time, they will see that it was that point in history when the 
United States not only recognized the past wrongs, but truly 
viewed Indian people as equal sovereigns with their own unique 
set of values and principles.
    Joe DeLaCruz, our Chair at Quinault, once stated that there 
is no right more sacred than a people to freely govern their 
lands, their people, their territories without external 
interference. Right now, even with self-governance, we are 
simply managers of Federal dollars. Under 638, we administered 
Federal dollars. We now manage. We cannot spend those dollars 
in a way where we can freely determine our future because of 
the bureaucratic barriers that we continue to confront today.
    So, with having an opportunity to be able to come to this 
Congress to redefine that relationship and set a new course, we 
believe that we are at a post self-governance era. We will 
always be self-determining, but we need to set a new course on 
the relationship and the definition, and that includes engaging 
with this Congress on agreements, renewed agreements, to build 
that stronger foundation.
    So, on behalf of the Quinault Nation, the Affiliated Tribes 
of the Northwest Indians and the Trust Commission, we thank you 
for this opportunity.
    [The prepared statement of Ms. Sharp follows:]

   Prepared Statement of Hon. Dawn Sharp, President, Quinault Indian 
                                 Nation

    Good afternoon distinguished Committee Members and esteemed 
witnesses joining me today to provide testimony on Fulfilling the 
Federal Trust Responsibility: The Foundation of the Government-to-
Government Responsibility. My testimony addresses this topic from 
several, unified perspectives: as the President of the Quinault Indian 
Nation and President of the Affiliated Tribes of Northwest Indians 
regarding natural resources under authorities of Self-Determination and 
Self-Governance, and as the Chairperson of the Secretary of the 
Department of the Interior's National Commission on Indian Trust 
Administration and Reform.
    First and foremost I would like to applaud this Committee for 
continuing such a vigilant effort to address the plethora of 
disparities Indian people are forced to deal with on a daily basis. It 
is because of these hearings and the Roundtable Sessions that Congress, 
the Administration and the American public are being educated about our 
issues. Mase' [Thank you]!
Prologue and Vision
    Five centuries ago, Europeans relied upon the notion of the 
``Doctrine of Discovery'' to provide a quasi-religious, political 
justification for colonialism. This Doctrine led to the expropriation 
and exploitation of the natural resources of this land with little 
regard for the impacts on the cultures and economies of the Indian 
peoples that had relied upon for them for countless millennia.
    When the United States was founded two and a half centuries ago, 
alliances were sought with Tribal nations to try to free the colonies 
from European powers. For nearly a half century after Independence, the 
United States entered into treaties to formalize relations with Tribal 
nations. In exchange for promises to protect Tribal peoples from 
depredation and provide for their needs, Tribal nations relinquished 
claims of title to their traditional territories and agreed to relocate 
to small areas of land that were to be set aside for their exclusive 
use and occupancy. These promises, and subsequent laws such as the 
General Allotment Act, form the foundation of the trust responsibility, 
a concept that was rooted in the fundamental notion that Tribal nations 
are dependent on the largesse of the dominant government, somehow 
incompetent and incapable of managing their own affairs.
    Yet, even the solemn treaty promises of the United States were 
broken repeatedly.

   Treachery, fraud, and corruption of Indian agents assigned 
        to serve the needs of reservation communities were common.

   Indian children were removed from their homes and placed in 
        boarding schools where they were forbidden to speak their 
        native languages.

   As non-Indians coveted the land and resources such as gold 
        which were found on reservations, Tribal nations were forced to 
        relocate or accept diminished land bases.

   Tribal lands were flooded to create reservoirs to provide 
        water and power and to try to protect non-Indian property.

   A policy of allotment was adopted to ``civilize'' Indians 
        while opening reservations to settlement and development by 
        non-Indians. The confused and complex ownership and occupancy 
        of Indian reservations created a jurisdictional morass that 
        allows developers to ignore laws and regulations intended to 
        protect the environment and perpetrators of crimes such as rape 
        or the manufacture and distribution of illegal substances to 
        evade prosecution.

   Tribal lands have become dumping grounds for hazardous 
        materials that non-Indian communities would not tolerate.

   Tribes are being required to compensate for environmental 
        deterioration caused by non-Indian development on and off 
        reservations, infringing upon our prerogatives to utilize 
        reservation resources for the benefit of our own communities.

   When the duty to fulfill treaty obligations became 
        burdensome, the United States pursued a policy of termination 
        to try to ``get out of the Indian business''.

    Until just a few decades ago, when a new era of Self-Determination 
and Self-Governance was ushered in, the Indian policy of the United 
States was centered on conquest, removal, dislocation, and extirpation.
    The purpose of highlighting this litany of wrongs against Indians 
is not to dwell on the past, but to serve as a prelude to discussion of 
the future form and substance of relations between Indian Tribes and 
the United States. The trust responsibility and government-to-
government relationships are central to our deliberations. I say 
``our'' because decisions cannot be made unilaterally by the United 
States. Our discussion should include consideration of the implications 
of the United Nations Declaration on the Rights of Indigenous Peoples 
(UNDRIP), particularly articles relating to free, prior, and informed 
consent. As sovereigns, Indian Nations and the United States must 
engage in substantive dialogue to collectively establish a common 
vision and policy to guide our path to tomorrow.
    In 1977, the American Indian Policy Review Commission issued a 
report to Congress noting, ``The Relationship of the American Indian 
tribes to the United States is founded on principals of international 
law . . . a relationship founded on treaties in which Indian tribes 
placed themselves under the protection of the United States and the 
United States assumed the obligation of supplying such protection.'' 
\1\ This relationship is not working! The implementation of the United 
Nations Declaration on the Rights of Indigenous Peoples is essential, 
the inability to pass amendments to the DOI Self-Governance amendments 
and the lack of funding to allow Tribes to protect our borders and 
communities are but a few of the elements of the current dysfunctional 
trust responsibility to American Indian and Alaska Native peoples. The 
United States trust responsibility has not evolved with the changed 
political relationship between the United States government and Indian 
governments. It must be changed to reflect the realities in Indian 
Country in the 21st century.
---------------------------------------------------------------------------
    \1\ American Indian Policy Review Commission Report, 1977, p. 11
---------------------------------------------------------------------------
    The following comments center on Self-Determination and natural 
resources, the particular area on which the Committee is seeking 
comments from the Quinault Nation:

   A Different Kind of Trust Responsibility. Historical notions 
        of dependency and incompetency must be abandoned. Our dialogue 
        should be focused on the forgotten trust responsibility of the 
        United States--the responsibility to support the capacity of 
        Tribes to take their place alongside the American system of 
        governments. For natural resources, recognition and acceptance 
        of Tribes as capable, responsible resource managers will be 
        essential to enable us to protect our cultures and economies 
        and to work collaboratively at the local, state, regional, 
        national, and international levels to sustain the environment.

   Self-Determination and Self-Governance. The Quinault Nation 
        was one of the first Tribes to employ Self-Determination 
        contracting and Self-Governance compacting to improve its 
        ability to manage its natural resources. The devastation of our 
        forests, salmon, lands, and waters wrought by decades of 
        mismanagement by the United States could no longer be tolerated 
        and spurred our determination to embark on the newly opened 
        path to Self-Determination. For years, buy-Indian and Self-
        Determination contracts provided a means for us to perform 
        activities in lieu of the Bureau of Indian Affairs (BIA). We 
        had little latitude to establish objectives and goals, but were 
        rather limited to those imposed and supported by the federal 
        administration and BIA. We found it necessary to turn to 
        Congress to enable us to establish a demonstration program for 
        a Tribal forestry program that was designed to address resource 
        management problems that had accumulated over decades of BIA 
        administration. Our ability to develop our own programs and 
        priorities for forestry, fisheries, health, and social programs 
        has been greatly enhanced through the use of Self-Governance 
        compacting. Quinault was in the first tier of Tribes to 
        participate in the Self-Governance program. While Self-
        Governance has provided us with the flexibility to tailor 
        programs to best fit the needs of our own communities, several 
        improvements, noted in H.R. 2444, the Department of the 
        Interior Self-Governance Amendments, are needed.

    The Quinault Indian Nation compacted to manage our forest lands but 
we have not received the additional funding or increases in our formula 
to manage existing obligations. We are further challenged by the 
increased cost of fuel to perform these services.

   A New Focus for Federal Administration: Support for Tribal 
        Self-Government. There is a need to expand our vision of the 
        nature of the trust responsibility to see beyond the 
        accustomed, narrow confines of fiduciary duties and 
        obligations. In some respects, this requires the term trust 
        responsibility to be turned on its head. Instead of a policy 
        that perpetuates paternalism and dependency, trust 
        responsibility should be viewed as the responsibility to 
        administer Indian Affairs in a manner deserving of the trust of 
        Indian Country. The time has come to transform the role of the 
        United States from guardian to enabler, to make the primary 
        function of the trustee that of supporting and assisting the 
        capacity of Tribes to truly exercise Self-Determination. Tribes 
        that are ready for this step should have the opportunity to 
        establish relationships with the United States that move beyond 
        tutelage to a position of sovereign equality. To make this 
        transformation, fundamental, seminal issues must be addressed.

    Paternalistic procedures, practices, and policies for management of 
the trust corpus that perpetuate paternalism, dependency, and 
bureaucracy while trying to shield the United States from financial 
liability for mismanagement have debilitating effects on the ability of 
Tribes to manage and develop their own lands and resources and greatly 
increased the costs of federal administration. Federal bureaucracy and 
administration has left Indian Country dirt poor despite the abundance 
of natural resources that blesses many reservations.
    These administrative measures should be reformulated through a 
collaborative process between Tribal governments and the United States 
with the over-arching objective of strengthening the ability of Tribes 
to fully and exclusively exercise their inherent sovereign authorities 
to manage the lands and resources within reservation boundaries.
    This discussion should include clarification that Indian lands are 
private lands that are held in trust with a fiduciary responsibility of 
the United States to manage the trust corpus for their beneficial 
owners. Trust lands are not subject to the federal nexus that triggers 
application of laws and regulations intended to govern public lands, 
such as NEPA and the ESA.
    Tribal authority to make and enforce laws and regulations of their 
own making, including taxation authority, against Indians, non-Indians, 
and non-Tribal members alike must become a reality.
    Currently, the Department of the Interior is in the position of 
being both ``pitcher'' and ``umpire'' for trust administration; 
independent oversight is needed.
    Consideration should also be given for the need for, and value of, 
establishing a high-level ombudsman position, to help overcome 
recalcitrance in federal administration of Indian Affairs.

   Land consolidation and Jurisdiction. A major focus of trust 
        responsibility and government-to-government relations should be 
        directed at assisting Tribes to restore the integrity of 
        reservation land bases as permanent homelands for their peoples 
        and to establish viable land bases for newly federally-
        recognized Tribes. Funding provided under the recent Cobell 
        settlement could provide critical resources for land 
        consolidation, but efforts and priorities must be Tribally, not 
        administratively-driven. Chaos caused by the Supreme Court's 
        decision in Carcieri must be rectified legislatively.

   Off-Reservation Co-Management. The ability of Tribes to co-
        manage resources within their traditional ceded territories off 
        reservation needs and deserves support. Arbitrary restrictions, 
        such as those employed by the EPA for development of Tribal 
        water quality programs restrict use to on-reservation 
        activities, failing to recognize Tribal needs to protect off-
        reservation resources that are essential to their ability to 
        exercise treaty and other federally reserved rights. The United 
        States should provide financial, technical, and political 
        support for Tribal governments to formally engage and 
        substantively participate in international deliberations 
        involving natural resources and environment, e.g., climate 
        change, biodiversity.

   Consultation. Federal entity requirements for consultation 
        with Tribal governments on matters pertaining to Tribal rights 
        and interests should be made mandatory and enforceable. 
        However, it is crucial, that consultation be implemented as 
        part of a true government-to-government process that involves 
        respectful dialogue to identify and try to overcome 
        differences, not as a pro-forma checklist that reserves 
        decisionmaking authority solely to the federal entity.

   Formalize Trust Agreements. The foundations for trust 
        administration of natural resources need to be poured. 
        Consideration should be given to enacting a suite of laws 
        pertaining to Tribal natural resources. The National Indian 
        Forest Resources Management Act and Indian Agriculture Act 
        enunciated the federal trust responsibility and set forth 
        certain standards for management. Comparable laws are needed 
        for fish and wildlife, energy, and water resources.

    Fiduciary standards expressed in Section 303 of the Department of 
Interior manual should be cooperatively and collectively reviewed by 
Tribal and administrative representatives and revised as needed.
    The ability to establish formal contractual intergovernmental 
agreements between the United States and Tribes which would clarify 
duties, obligations, and responsibilities should be explored. These 
Agreements would establish performance standards for programs operated 
by both Tribes and federal agencies. A variety of arrangements could be 
considered, such as the option for Tribes to place their lands in a 
special form of trust that would protect them from taxation or 
jurisdictional intrusions by local, state, and federal governments. 
This option could reduce burdens, liabilities, and costs of federal 
administration and remove impediments in securing financing for Tribal 
natural resource development. The concept of converting Tribal trust 
lands to a new type of ownership, Tribal restricted fee, is presently 
under discussion by the House of Representatives (American Indian 
Empowerment Act of 2011 , H.R. 3532). President Rob Porter (Seneca 
Nation of New York) testified at a recent hearing on this proposed 
legislation: ``[I]t would do this by enabling Indian nations and Tribes 
to voluntarily convert some or all their existing Tribal lands from 
Tribal trust lands held by the United States to Tribal restricted fee 
status held by the Tribal government and thereby enjoy the enhanced 
flexibility that attaches to restricted fee land holdings. That 
flexibility should produce great savings in time and cost that 
otherwise would burden development on Tribal trust land.'' The 
advantages and disadvantages, pros and cons of providing such an option 
deserve thoughtful, serious deliberation by Tribal governments, 
Congress, and the Administration.
National Commission on Indian Trust Administration and Reform
    The work of the National Commission on Indian Trust Administration 
and Reform is underway. As Chairperson I am joined by a cadre of 
Leadership and Academia who has listened and been engrained in the 
trust reform issues for many decades. Ours is a charge that we all 
consider very serious and with the help of this Committee, we will take 
the first step to improving the system that we can all agree is ``not 
working''! We held our first meeting on March 1-2, 2012 and will begin 
to convene field Listening Sessions in June 2012. We are seeking the 
input of Indian Country regarding the Department's administration and 
management of trust assets and carrying out its fiduciary trust 
responsibility for individual Indians and Tribes.
    Again, thank you to the Committee for allowing me to testify before 
you today on this important issue.

    The Chairman. Thank you very much, President Sharp.
    Vice President Baptiste, will you please proceed with your 
testimony.

 STATEMENT OF HON. BROOKLYN BAPTISTE, VICE-CHAIRMAN, NEZ PERCE 
                   TRIBAL EXECUTIVE COMMITTEE

    Mr. Baptiste. [Greeting in Native tongue.] To the Chairman 
and the Committee, I would like to thank you for allowing us 
this opportunity to provide testimony, but also such a large 
target but also something that is important to us that provides 
a mechanism for Tribes to be resilient and be able to define 
themselves in the manner that we would like rather spiritually, 
culturally, you know, economically.
    I think it is important as far as the Tribes are concerned 
that we are allowed to define those for ourselves and, in this 
Committee, I know you have had a series of roundtables and 
discussions that allow the Tribes to kind of provide testimony 
and provide some guidance for the Tribes themselves to allow 
you yourself and the Committee members to provide that guidance 
that we give you to the rest of your peer group as well. To 
provide leadership for us is important, and we thank you for 
your leadership and the Committee's leadership in that manner.
    As was kind of mentioned in the previous panel, you know, 
the Nez Perce Tribe and many other Tribes recently settled 
lawsuits with the United States over Government's mismanagement 
of the trust assets of the affected Tribes. The settlement was 
the culmination of six years of litigation that had been 
preceded by working groups, meetings that were trying to avoid 
the court system.
    The Nez Perce Tribe itself, you know, finds itself in the 
courtroom a lot. We would rather not. We do not think that 
helps. We do not find that the justice for the Tribes is found 
in the court system. We think it is in this specific forum 
right here that we can find the things that we need to define 
that trust obligation rather than depending on an individual 
that is not versed in Indian law or in the culture and life 
ways of Indian people as a whole across the Nation.
    So, we would like to, you know, we thank the Administration 
and we thank this Committee as well because you are providing 
that avenue for us as well.
    So, the issue I would like to talk, to discuss, today is 
how to move the relationship between Tribes and the United 
States forward to a better place. I believe we can use the 
remarkable achievement of the settlement, these lingering trust 
claims, as momentum to focus on the collaborative efforts of 
the Tribes and the United States on truly fixing the trust 
relationship, eliminate the need for costly, protracted 
litigation and the us versus them mentality.
    The Nez Perce Tribe would propose several courses of action 
that it believes would help enhance and strengthen the trust 
relationship between the United States and the Tribes. These 
actions include one, clear and unequivocal affirmation of 
Tribal sovereignty and the treaty relationships between the 
parties, two, prioritization of funding for Tribally related 
Federal programs operated by the Tribes, three, Congressional 
and Executive Branch supported efforts to protect long-standing 
Indian law concepts that are being eroded through the courts, 
four, reaffirmation and support of Indian self-determination, 
and last, continued refinement of government-to-government 
consultation set forth in Executive Orders and Executive 
Memorandums of past and current Administrations.
    We feel that the last consultation process which served the 
Tribes is one of most important because that communication will 
provide the foundation for the understanding between Tribes. In 
my past seven years as a leader of my people, I have noticed 
that you do not always have to agree. But if you understand, it 
makes things a lot easier.
    So, as a Tribal leader on this panel, I think we have the 
ability to transcend some issues or some topics that are not 
always talked about, the hardships of social, the social wrongs 
in our Country but also in our own communities as well, the 
spiritual detriment that the Tribes are facing now that affect 
their Tribes long standing.
    Kind of an analogy I have used before was that before we 
met as government to sovereigns we would bring pipes and that 
would represent our belief system, our walk with the creator, 
God, Jesus, whichever way you looked at it. That was our way of 
agreeing and saying this is going to be our truth to our word 
and it was a written language that we were foreign to but we 
believed and had faith and trust in these treaties that we 
signed that are held, of course, supreme law, you know, by the 
Constitution.
    We no longer bring pipes no more because that does not, it 
is hard to quantify that type of relationship. So, now we bring 
attorneys, our people are attorneys, and we bring that to the 
table to try to implement the letter of the law when it is our 
treaties, the trust obligation with a Federal agency or in that 
it is with the sovereign as well as the States.
    So, we hope that the protection of our treaty is a 
protection, that the implementation of those treaties will 
continue. I think this subject is fairly large compared to what 
we can offer. But I appreciate the opportunity to come here and 
allow some insight to us as leadership. I know you take a 
larger burden representing us and the public sector as well and 
we appreciate all that do you for the Tribes and the Nations.
    [Closing in Native tongue.] Thank you.
    [The prepared statement of Mr. Baptiste follows:]

Prepared Statement of Hon. Brooklyn Baptiste, Vice-Chairman, Nez Perce 
                       Tribal Executive Committee

    Honorable Chairman and members of the Committee, as Chairman of the 
Nez Perce Tribal Executive Committee, I would like to thank you for the 
opportunity to provide testimony on behalf of the Nez Perce Tribe to 
this Committee on the issue of the trust responsibility of the United 
States to Indian tribes. As you may know, the Nez Perce Tribe, and many 
other tribes, recently settled lawsuits with the United States over the 
government's mismanagement of the trust assets of the affected tribes. 
The settlement was the culmination of six years of litigation that had 
been preceded by scores of meetings and workgroups that had been formed 
to try and address the problem outside of a courtroom setting. This 
entire effort was a long and arduous process that consumed the time and 
resources of the tribes involved. I would like to thank the United 
States and the Obama administration for finally being willing to engage 
the tribes on this issue with a goal towards resolving the long 
standing dispute.
    It is good that the settlement of the trust mismanagement cases 
provide for a path forward and a ``clean slate'' between the tribes and 
the United States with regard to its management of the trust assets of 
tribes and how future disputes over those assets will be handled. 
However, the settlement does not address the larger question of the 
current status of the trust relationship between tribes and the United 
States. The process itself was indicative of some of the issues that 
are adversely affecting the important trust relationship between tribes 
and the United States. Although the Nez Perce Tribe was well 
represented in the litigation and settlement by the Native American 
Rights Fund and our own in-house legal counsel, at one point in the 
settlement process, I found myself in a room alone with approximately 
20 governmental representatives working on finalizing an agreement. At 
that time I thought that this was very symbolic of how tribes sometimes 
feel when working with the government, outnumbered and facing an 
opponent with unlimited resources. A common phrase among tribal leaders 
when referencing the relationship with the United States is that tribes 
used to bring weapons to battle with the United States and now we bring 
a quiver of attorneys. That is a sign of a relationship that is not 
functioning properly, especially a trust relationship. So the issue I 
would like to discuss today is how to move the relationship between 
tribes and the United States forward to a better place. I believe we 
can use the remarkable achievement of the settlement of these lingering 
trust claims as momentum to focus the collective efforts of the tribes 
and the United States on truly fixing the trust relationship and 
eliminate the need for costly protracted litigation and the ``Us versus 
them'' mindset that exists.
    The Nez Perce Tribe would propose several courses of action that it 
believes would help enhance and strengthen the trust relationship 
between the United States and tribes. These actions include: (1) clear 
and unequivocal affirmation of tribal sovereignty and the treaty 
relationships between the parties, (2) prioritization of funding for 
tribally related federal program and programs operated by tribes, (3) 
Congressional and Executive Branch supported efforts to protect 
longstanding Indian law concepts that are being eroded through the 
courts, (4) reaffirmation and support of Indian Self-Determination and 
(5) continued refinement of government to government consultation set 
forth in Executive Orders and Executive Memorandums of past and current 
administrations.
    I. Reaffirmation of Tribal Sovereignty and Treaty Relationships
    Based on the U.S. Constitution, treaties, statutes and the 
historical, political and legal relationship with the Indian tribes, 
the United States has assumed a trust responsibility to Indian people. 
Those laws and relationships serve as the backdrop for the government-
to-government relationship. Rep. Dale Kildee has long advocated that 
Congress, as well as the other branches of government, remember that 
Article VI of the United States Constitution states in part that ``This 
Constitution, and the Laws of the United States which shall be made in 
Pursuance thereof; and all Treaties made, or which shall be made, under 
the Authority of the United States, shall be the supreme Law of the 
Land; and the Judges in every State shall be bound thereby, any Thing 
in the Constitution or Laws of any State to the Contrary 
notwithstanding.'' Despite this constitutional affirmation of the 
supremacy of treaties, many tribes continually face threats of 
diminishment or disestablishment of their reservations and lands 
reserved under their treaties with the United States as well as erosion 
of the rights and privileges reserved under those documents. This issue 
is very critical when it comes to the land base of tribes and how those 
lands are threatened through rights-of-ways or easements or various 
other means. For any government, land is a foundational block. However, 
the fee to trust process usually takes years or in some cases decades 
because of different policies of different administrations and concerns 
over gaming. This places tribes in the position of being a sovereign 
that is taxed by a subdivision of a state. This prospect is repugnant 
to tribal governments. Congressional action or an executive order from 
the President that clearly reaffirms those treaty relationships and the 
inherent sovereignty of those tribes and the rights reserved by those 
tribes would be a good start in helping preserve what was intended to 
be permanent relationships between the Tribes and the United States.

II. Prioritization of Funding
    In light of the foundational nature of the relationship between the 
tribes and the United States, it is frustrating to Tribes when each 
budget cycle presents the question of whether tribal programs or 
federally related tribal programs will be properly funded or funded at 
all. The fact that spending on tribal programs is discretionary in 
nature runs counter to the obligations and promises that arise from the 
trust and treaty relationship of the parties. Although progress has 
been made on increasing funding for agencies and programs that provide 
services in Indian country such as the Bureau of Indian Affairs and 
Indian Health Service as well as increased commitments to properly fund 
services provided by tribes such as housing and health clinics, it is 
time to move to a new paradigm in relation to federal funding of 
tribally related programs. Funding for these programs should not be 
dictated by political party affiliation or which party is in office but 
rather it should be a baseline spending obligation that the United 
States committed to long ago in return for the development of this 
country.

III. Support of Indian Law Principles Under Scrutiny by Courts
    Many of the principles and tenets of the trust relationship have 
been affirmed, developed, and refined through the United States court 
system. However, tribes believe this trust relationship is currently 
being eroded in the courts today. A 2009 empirical study done by 
Matthew Fletcher of Michigan State University College of Law entitled: 
``Factbound and Splitless: Certiorari and Indian Law'' shows that since 
the Supreme Court issued its decision in California v. Cabazon Band of 
Mission Indians in 1987, the Supreme Court has decided against tribal 
interests in more than 75 percent of cases. This rate of success is 
lower than the success rate of criminal defendants. With this trend, 
Tribes are relying more on the Executive Branch as well as Congress to 
be aware of, protect, and uphold the longstanding principles of Indian 
law. The Carcieri decision is a perfect example of this dynamic but it 
is by no means the only example. In addition, there are several cases 
that are before or could come before the United States Supreme Court 
that could have negative consequences for Indian Country in a way 
similar to the Carcieri decision. If the courts are not going to 
protect these long-standing principles, the Executive and Congressional 
branches of the government must take up the issue. Discussion is needed 
on ways to address these issues through other avenues such as Congress 
exercising its plenary power in support of tribal issues and in 
honoring the Federal Government's trust responsibility.

IV. Reaffirmation of Self-Determination
    Another aspect of the trust relationship that deserves 
congressional attention is the policies on self-determination. There is 
need for work by the United States in formulating strategies to provide 
effective reaffirmation and support by the Executive Branch and 
Congress of the policy of Indian Self-Determination. Stephen Cornell 
and Joseph P. Kalt recently published a paper entitled: ``American 
Indian Self-determination: The Political Economy of a Successful 
Policy''. The authors believe that there is an alarming trend away from 
support for tribal self-determination which has been a success. They 
state: ``The policy of self-determination reflects a political 
equilibrium which has held for four decades and which has withstood 
various shifts in the party control of Congress and the White House. 
While Republicans have provided relatively weak support for social 
spending on Indian issues when compared to Democrats, both parties' 
representatives have generally been supportive of self-determination 
and local self-rule for tribes. Analysis of thousands of sponsorships 
of federal legislation over 1970-present, however, finds the 
equilibrium under challenge. In particular, since the late 1990s, 
Republican congressional support for policies of self-determination has 
fallen off sharply and has not returned. The recent change in the party 
control of Congress calls into question the sustainability of self-
determination through self-governance as a central principle of federal 
Indian policy.'' It is important to begin to discuss strategies to 
reverse this trend and continue forward with the major progress in 
promoting self-determination that has been made on this issue since the 
administration of President Nixon.

V. Government-to-Government Consultation
    Finally, and maybe most importantly, there needs to be continued 
emphasis and attention paid to the consultation process that occurs 
between tribes and the United States. When the United States makes 
decisions and implements those decisions through the Executive Branch, 
there can be an impact. Tribal issues are not confined simply to the 
Bureau of Indian Affairs. Tribes work with many agencies on many 
issues. For example, the Nez Perce Tribe is a natural resource 
intensive tribe having connections with over 11 national forests. The 
relationship between the Nez Perce Tribe and the United States Forest 
Service is extremely important. The Nez Perce Tribe has a connection 
through its treaty with one out of every 20 acres of forest service 
land or 6 percent of the entire national forest system. In addition, 
the Nez Perce Tribe works daily with the Bureau of Land Management, the 
United States Park Service, the Department of Energy through our work 
on the Hanford Nuclear Reservation, the Bureau of Reclamation, the 
Department of Commerce, the Department of Health and Human Services, 
the Army Corps of Engineers, the U.S. Fish and Wildlife Service and 
many others. The Nez Perce Tribe relies on its government-to-government 
relationships to ensure that the rights and privileges of the Nez Perce 
Tribe are protected and preserved. However, despite the best education 
efforts of tribes, many decisions are made by federal agencies without 
thoughtful consideration of the impact these decisions will have on a 
tribe and without proper consultation with the affected tribes. In 
truth, consultation should be a foundational component of decision-
making by any federal agency because of the trust relationship that 
exits. Tribes believe there is a lack of accountability in this area 
when agencies make decisions and the decision to consult is too 
individually driven. If the will of the persons in charge are to 
consult, consultation happens. If the will is not there, tribes have to 
fight to force proper agency consultation when consultation should just 
be how business is conducted regardless. President Obama has worked to 
increase meaningful consultation and accountability during his tenure. 
Those efforts need to continue and be supported by Congress through 
legislation and oversight.
    Thank you for the opportunity to speak here today on this issue. 
Although this is a vast topic that cannot be covered in one hearing, 
the Nez Perce Tribe does believe that there are ways that Congress and 
the Executive Branch can work in coordination to reaffirm and improve 
the trust relationship it has with tribes.

    The Chairman. Thank you very much, Mr. Baptiste.
    Ms. Atcitty, please proceed with your testimony.

 STATEMENT OF SHENAN ATCITTY, LEGAL COUNSEL, JICARILLA APACHE 
                             NATION

    Ms. Atcitty. Thank you, Mr. Chairman. Aloha.
    The Chairman. Aloha.
    Ms. Atcitty. I am Shenan Atcitty. I am from the Navajo 
Nation and I am a partner with the law firm of Holland & 
Knight. I have had the honor and privilege to represent the 
Jicarilla Apache Nation for more than 15 years and am happy to 
be here with your today. President Pesata sends his regrets 
that he could not be here but is very thankful for your holding 
this very important hearing.
    A lot has been said today about the case involving the 
Jicarilla which is now pending before the United States Court 
of Federal Claims. We filed the case, the nation filed the 
case, more than a decade ago. So, we have been in the case for 
quite a while.
    It is a pretty broad case involving breach of the Federal 
Government's duties with respect to management of their natural 
resources. The case has been broken into several phases. We 
just completed trial on Phase 1 which involves the trust funds 
for a particular period.
    When we were before the Supreme Court last year, it was 
shocking and disappointing to hearing the Associate Solicitor 
General stand before the Justices and deny the existence of an 
enforceable trust relationship. I commend the panel before me 
which discussed a lot of the underpinnings and the principles. 
But in real life time, to hear that with your client in a case 
of significant importance, it was very disheartening.
    Equally disheartening was the reaction from the Justices. 
It is almost as if they are willing to throw out decades and 
generations of case law regarding the trust responsibility and 
the fact that we have what would otherwise, has otherwise been 
considered, an enforceable trust duty when the Government is 
managing Tribal trust funds and Tribal trust mineral resources. 
There had been no doubt that certainly that is a fiduciary 
relationship.
    But the particular issue in our case had to do with 
discovery. In our case, we had filed a motion to compel the 
Government to produce certain documents that it had claimed 
were protected by the attorney-client privilege. We were able 
to work out, the nation was able to work out, an accommodation 
for part of the documents at issue. But there still remains a 
set that the Government claimed were protected by the attorney-
client privilege.
    That forced us to go to court and to file a motion before 
the court, the motion to compel. We prevailed at the trial 
court. The Government appealed and the Federal Circuit 
supported our position and upheld the trial court's ruling. And 
the ruling was based on the fiduciary exception, a legal 
principle, a long-standing legal principle, which would allow a 
trustee to see communications relating to how the trustee, 
would allow the beneficiary to see communications on how the 
trustee is managing the trust assets. That is what private 
fiduciary's get, banks who manage your money, you are entitled 
to see that information.
    But for a lot of unfair reasons that we believe that were 
not substantiated, the Court ruled against us. We think that is 
very damaging. It has been very detrimental to the trust 
relationship. You have heard professors and practitioners 
explain the practical terms of what this decision has done and 
we think Congress should take corrective action and fix that 
decision.
    In our written testimony we propose a narrow, streamlined 
fix. We think Congress could get an amendment to the American 
Indian Trust Reform Act and allow trustees, allow Indian 
trustees, to discover and see those types of communications. 
That is only fair. It is the right thing to do. And we look 
forward to working with the Committee to do that.
    My remarks also cover some other areas where we probably 
need more Congressional oversight and attention with respect to 
management of natural resources and land decisions. Even 
outside the litigation context there are still challenges 
there. And a lot of it is bureaucratic resistance. Perhaps some 
form of ADR that is compelled by statute.
    Some other hammer needs to be placed on the executives so, 
they know what to do but, unfortunately, when they are trying 
to avoid liability, those issues tend to surface higher and get 
more attention than actually fulfilling trust responsibilities 
and duties.
    And with, I will conclude my remarks. Thank you, Mr. 
Chairman.
    [The prepared statement of Mr. Pesata follows:]

  Prepared Statement of Hon. Levi Pesata, President, Jicarilla Apache 
                                 Nation

I. Introduction
    On behalf of the Jicarilla Apache Nation (``Nation''), I am Levi 
Pesata and I serve as President of the Jicarilla Apache Nation. I would 
like to thank the Committee for convening this hearing to discuss 
Indian Energy Issues. The Nation is a federally recognized Indian tribe 
located in north-central New Mexico. Eighty-five (85) percent of the 
tribal population resides on the Jicarilla Apache Reservation 
(Reservation), mostly in the town of Dulce, which serves as our tribal 
headquarters. We have a tribal population of nearly four thousand 
(4,000) members and our Reservation consists of approximately one (1) 
million acres of trust land.
    We have been blessed with abundant natural resources such as oil 
and gas, timber, water, and fish and wildlife. Fortunately, our 
Reservation was not subjected to the disastrous Allotment Policy 
initiated in the 19th Century. As a result, we do not face the 
difficult checker-board jurisdictional challenges encountered by those 
Tribes and individuals whose lands were broken apart (and in many 
instances lost) as part of that Federal Policy. Certainly, this 
consequence has been beneficial to protect and enhance our sovereign 
governance over our lands and to facilitate our energy development 
initiatives over the years. Yet, given our extremely rural location, 
the considerable public health and welfare needs of our people, as well 
as the fact that we provide governmental services not only to our 
tribal members but for those living near or travelling through our 
Reservation, the Nation has a heightened need to generate revenue to 
provide essential governmental services on our Reservation as well as 
to the surrounding rural region. Thus, we rely heavily on the 
development of our natural resources, primarily our oil and gas 
resources, to raise revenue to fund our government and provision of 
essential governmental services. The Federal Government has significant 
trust responsibilities and duties to protect our trust land and trust 
resources and to ensure that we obtain the maximum value for our 
resources.
    Because of the Federal Government's failure to fulfill its trust 
responsibilities and duties owed to the Nation, we have been compelled 
to sue our trustee in various forums for breaching those trust 
responsibilities and duties. In one of our cases, an issue was recently 
decided by the U.S. Supreme Court which greatly diminished the Trust 
Responsibility. This decision has broad implications for all Indian 
tribes and is one that Congress should immediately correct. I am 
pleased to present the Nation's testimony on the very important issue 
of the United States fulfilling the Trust Responsibility to Indian 
tribes.

II. Background: the Origin and Foundation of the Federal Trust 
        Responsibility
    The United States has a special trust responsibility to Indian 
tribes, and the Federal trust responsibility has its roots in the 
foundation of the American Republic. In the early years of our Nation's 
history, the British, French, Spanish, and Russians had colonies and 
military forces in North America. These colonial powers entered into 
treaties and agreements with Indian nations. The United States sought 
to secure the friendship and allegiance of Indian tribes, so the 
American Republic sought to enter into its own treaties with Indian 
tribes.
    In a 1778 Treaty, the United States established a military alliance 
with the Delaware Nation. The United States pledged to preserve 
``perpetual peace and friendship'' and ``guarantee to the . nation of 
Delawares, and their heirs, all their territorial rights in the fullest 
and most ample manner'' so long as the Delaware ``hold fast the chain 
of friendship now entered into.'' Treaty with the Delaware Nation, 
1778. The United States was anxious to repudiate accusations made by 
its enemies (Great Britain) that it sought to ``extirpate'' the 
Delaware and ``take possession of their country.'' \1\
---------------------------------------------------------------------------
    \1\ The Delaware Nation still holds the chain of friendship with 
the United States though the Nation was long ago removed from its 
original country to Oklahoma.
---------------------------------------------------------------------------
    In the Northwest Ordinance of 1787, Congress pledged ``good faith'' 
and protection for Indian tribes:

         The utmost good faith shall always be observed towards the 
        Indians, their lands and property shall never be taken from 
        them without their consent; and in their property, rights and 
        liberty, they shall never be invaded or disturbed, unless in 
        just and lawful wars authorized by Congress; but laws founded 
        in justice and humanity shall from time to time be made, for 
        preventing wrongs being done to them, and for preserving peace 
        and friendship with them . . . 

    (The Northwest Ordinance was followed by years of war with the 
Indians in Ohio, which only ended when all of their lands had been 
ceded and they were removed to Indiana--the original Indian territory.)
    In the formative period of the United States, Secretary of War 
Henry Knox explained that violence by U.S. citizens against Indians 
violated those treaties and endangered the peace:

         [W]hite inhabitants on the frontiers of North Carolina in the 
        vicinity of Chota on the Tenessee River have frequently 
        committed the most unprovoked and direct outrages against the 
        Cherokee Indians . . . . [T]his unworthy conduct is an open 
        violation of the treaty of peace made by the United States . . 
        . [and] have arisen . . . to an actual although informal war of 
        the white inhabitants against the Cherokees . . . . [T]he 
        unjustifiable conduct . . . has most probably been dictated by 
        the avaricious desire of obtaining the fertile lands possessed 
        by the said Indians . . . . [T]he United States have pledged 
        themselves for the protection of the said Indians within the 
        boundaries described by the treaty and that the principles of 
        good faith, sound policy and every respect which a nation owes 
        to its own reputation and dignity require if the union possess 
        sufficient power that it be exerted to enforce a due observance 
        of the said treaty . . . . [U]nless this shall be the case the 
        powerful tribes of the Creeks, Choctaws, and Chickasaws will be 
        able to keep the frontiers of the southern states constantly 
        embroiled with hostilities, and that all other tribes will have 
        good grounds . . . for waging perpetual war against the 
        citizens of the United States . . . .

         Report of Secretary Henry Knox, July 18, 1788. Thus, Federal 
        protection of Indian tribes and Indian lands was essential to 
        maintain the peace of the new American Republic.

    In 1791, President George Washington, in his third annual address, 
explained that Congress must protect Indian tribes from violence 
committed against them by U.S. citizens. President Washington told 
Congress, ``[E]fficacious provision should be made for inflicting 
adequate penalties upon all those who, by violating [Indian] rights, 
shall infringe the treaties and endanger the peace of the Union.''
    As an adjunct to America's colonial legacy, the United States 
asserted title to the 13 colonies based on land grants from England. It 
was recognized that Indian tribes held the right of occupancy to the 
lands undisturbed by the assertion of fee title by the Federal 
Government, except that Indian tribes could not alienate Indian lands 
without the permission of the United States. President Washington 
signed the first Indian Non-Intercourse Act into law to manage Indian 
land cessions under Federal authority: The Act of July 22, 1790 
provides:

         [N]o sale of lands made by any Indians, or any nation or tribe 
        of Indians within the United States, shall be valid to any 
        person or persons, or to any state, whether having the right of 
        pre-emption of those lands or not, unless the same shall be 
        made and duly executed at some public treaty, held under the 
        authority of the United States.

    Shortly after the passage of the Act, President Washington 
explained its import to the Seneca Nation:

         I am not uninformed that the six Nations have been led into 
        some difficulties with respect to the sale of their lands since 
        the peace. But I must inform you that these evils arose before 
        the present government of the United States was established, 
        when the separate States and individuals under their authority, 
        undertook to treat with the Indian tribes respecting the sale 
        of their lands. But the case is now entirely altered. The 
        general Government only has the power, to treat with the Indian 
        Nations, and any treaty formed and held without its authority 
        will not be binding. Here then is the security for the 
        remainder of your lands. No State nor person can purchase your 
        lands, unless at some public treaty held under the authority of 
        the United States. The general government will never consent to 
        your being defrauded. But it will protect you in all your just 
        rights.

        American State Papers 142 (1823).

    President Jefferson agreed with Washington's views on the issue of 
Indian lands and reauthorized the Indian Non-Intercourse Act in the Act 
of March 30, 1802, which provided:

         [N]o purchase, grant, lease, or other conveyance of lands, or 
        of any title or claim thereto, from any Indian, or nation, or 
        tribe of Indians, within the bounds of the United States, shall 
        be of any validity, in law or equity, unless the same be made 
        by treaty or convention, entered into pursuant to the 
        constitution . . . .

    Accordingly, the United States asserted fee titles to lands within 
its borders, outside the borders of the original 13 colonies, and 
protected the Indian right of occupancy or the beneficial interest in 
the land.
    In the Louisiana Purchase Treaty, President Jefferson agreed that 
existing international treaties with the Indian tribes would be 
honored, until the United States, by mutual consent, had negotiated its 
own treaties with Indian tribes. Specifically, the Treaty provides:

         The United States promise to execute Such treaties and 
        articles as may have been agreed between Spain and the tribes 
        and nations of Indians until by mutual consent of the United 
        States and the said tribes or nations other suitable articles 
        shall have been agreed upon.

    Louisiana Purchase Treaty, Art. VI (1803). In the aftermath of the 
War of 1812, the United States agreed to treat with the Indian tribes 
on the same basis as it had before the War. Specifically, in the Treaty 
of Ghent, Great Britain sought to protect Indian interests and secured 
the concession that:

         The United States of America engage to put an end immediately 
        after the Ratification of the present Treaty to hostilities 
        with all the Tribes or Nations of Indians with whom they may be 
        at war at the time of such Ratification, and forthwith to 
        restore to such Tribes or Nations respectively all the 
        possessions, rights, and privileges which they may have enjoyed 
        or been entitled to in one thousand eight hundred and eleven 
        previous to such hostilities.

    Treaty of Ghent, Art. XI (1815). Following the Treaty of Ghent, the 
United States entered into a series of ``peace and friendship'' 
treaties with numerous Indian tribes. For example, the Treaty with the 
Sioux of the Lakes, 1815, provides:

         Every injury, or act of hostility, committed by one or either 
        of the contracting parties against the other, shall be mutually 
        forgiven and forgot.

         There shall be perpetual peace and friendship between all the 
        citizens of the United States of America and all the 
        individuals composing the said tribe . and all the friendly 
        relations that existed between them before the war, shall be, 
        and the same are hereby renewed.

         The undersigned chiefs and warriors, for themselves, and their 
        said tribe, do hereby acknowledge themselves and their 
        aforesaid tribe to be under the protection of the United 
        States, and of no other nation, power, or sovereign, 
        whatsoever.

    Taken together with the United States' assertion of title over 
Indian lands outside the original 13 colonies, the United States' 
treaty and statutory pledges of protection to Indian nations form the 
foundation of the Federal trust responsibility.
    In the seminal Cherokee Nation cases, the State Legislature of 
Georgia sought to expropriate the treaty protected lands of the 
Cherokee Nation and force the Cherokee Nation to dissolve or remove 
beyond its borders. In Cherokee Nation v. Georgia, 30 U.S. 1 (1831), 
the Supreme Court denied jurisdiction over the case, explaining that it 
was a ``political'' controversy beyond the court's power and that the 
Cherokee Nation, as an Indian tribe, could not be considered a 
``foreign'' nation within the meaning of the Constitution:

         Though the Indians are acknowledged to have an unquestionable, 
        and heretofore unquestioned right to the lands they occupy, 
        until that right shall be extinguished by a voluntary cession 
        to our government, yet it may well be doubted whether those 
        tribes which reside within the acknowledged boundaries of the 
        United States can, with strict accuracy, be denominated foreign 
        nations. They may, more correctly, perhaps, be denominated 
        domestic dependent nations. They occupy a territory to which we 
        assert a title independent of their will, which must take 
        effect in point of possession when their right of possession 
        ceases. Meanwhile they are in a state of pupilage. Their 
        relation to the United States resembles that of a ward to his 
        guardian.

    The Supreme Court explained the importance of these early treaty 
relations and the meaning of the United States' protection in Worcester 
v. Georgia:

         [T]he strong hand of government was interposed to restrain the 
        disorderly and licentious from intrusion into their country, 
        from encroachments on their lands, and from the acts of 
        violence which were often attended by reciprocal murder. The 
        Indians perceived in this protection only what was beneficial 
        to themselves--an engagement to punish aggressions on them. It 
        involved practically no claim to their lands, no dominion over 
        their persons. It merely bound the Nation to the British Crown 
        as a dependent ally, claiming the protection of a powerful 
        friend and neighbour and receiving the advantages of that 
        protection without involving a surrender of their national 
        character . . . .

         The same stipulation entered into with the United States is 
        undoubtedly to be construed in the same manner. They receive 
        the Cherokee Nation into their favour and protection. The 
        Cherokees acknowledge themselves to be under the protection of 
        the United States, and of no other power. Protection does not 
        imply the destruction of the protected.

    Worcester v. Georgia, 31 U.S. 515, 517-518 (1832). The Worcester 
Court explained further:

         This treaty . . . [in] its essential articles treat the 
        Cherokees as a nation capable of maintaining the relations of 
        peace and war, and ascertain the boundaries between them and 
        the United States.

         The Treaty of Holston, negotiated with the Cherokees in July, 
        1791, explicitly recognising the national character of the 
        Cherokees and their right of self-government, thus guarantying 
        their lands, assuming the duty of protection, and of course 
        pledging the faith of the United States for that protection, 
        has been frequently renewed, and is now in full force.

         To the general pledge of protection have been added several 
        specific pledges deemed valuable by the Indians. Some of these 
        restrain the citizens of the United States from encroachments 
        on the Cherokee country, and provide for the punishment of 
        intruders.

         The treaties and laws of the United States contemplate the 
        Indian territory as completely separated from that of the 
        States, and provide that all intercourse with them shall be 
        carried on exclusively by the Government of the Union.

         The Indian nations had always been considered as distinct, 
        independent political communities retaining their original 
        natural rights as undisputed possessors of the soil, from time 
        immemorial, with the single exception of that imposed by 
        irresistible power, which excluded them from intercourse with 
        any other European potentate . . . . The very term ``nation,'' 
        so generally applied to them, means ``a people distinct from 
        others.'' The Constitution, by declaring treaties already made, 
        as well as those to be made, to be the supreme law of the land, 
        has adopted and sanctioned the previous treaties with the 
        Indian nations, and consequently admits their rank among the 
        powers who are capable of making treaties. The words ``treaty'' 
        and ``nation'' are words of our own language, selected in our 
        diplomatic and legislative proceedings by ourselves, having 
        each a definite and well understood meaning. We have applied 
        them to Indians as we have applied them to the other nations of 
        the earth.

    Worcester v. Georgia, 31 U.S. at 519. In short, the Supreme Court 
acknowledged the original sovereign status of native nations and 
recognized the treaties as evidence of the Constitution's 
acknowledgement of Indian nations. The United States extended Federal 
protection to Indian nations to prevent encroachment on Indian lands by 
its own citizens, and consequently, to preserve the peace.
The Trust Responsibility as a Colonial Sword
    At times in the past, the United States used the Federal trust 
responsibility as a sword to strip Indian tribes of their lands in 
violation of treaties. In Lone Wolf v. Hitchcock, 187 U.S. 533 (1903), 
the Chief of the Kiowa Tribe objected to the sale of so-called 
``surplus land'' on the Kiowa Reservation, despite the fact that the 
Treaty with the Kiowa, 1867 required \3/4\ adult male consent to any 
further sale of tribal lands. The Supreme Court refused the challenge, 
explaining:

         Now, it is true that in decisions of this court, the Indian 
        right of occupancy of tribal lands, whether declared in a 
        treaty or otherwise created, has been stated to be sacred, or, 
        as sometimes expressed, as sacred as the fee of the United 
        States in the same lands . . . .

         But the right which the Indians held was only that of 
        occupancy. The fee was in the United States, subject to that 
        right, and could be transferred by them whenever they chose. 
        The grantee, it is true, would take only the naked fee, and 
        could not disturb the occupancy of the Indians; that occupancy 
        could only be interfered with or determined by the United 
        States. It is to be presumed that in this matter the United 
        States would be governed by such considerations of justice as 
        would control a Christian people in their treatment of an 
        ignorant and dependent race. Be that is it may, the propriety 
        or justice of their action towards the Indians with respect to 
        their lands is a question of governmental policy, and is not a 
        matter open to discussion in a controversy between third 
        parties, neither of whom derives title from the Indians . . . .

         Plenary authority over the tribal relations of the Indians has 
        been exercised by Congress from the beginning, and the power 
        has always been deemed a political one, not subject to be 
        controlled by the judicial department of the government. Until 
        the year 1871 the policy was pursued of dealing with the Indian 
        tribes by means of treaties, and, of course, a moral obligation 
        rested upon Congress to act in good faith in performing the 
        stipulations entered into on its behalf. But, as with treaties 
        made with foreign nations the legislative power might pass laws 
        in conflict with treaties made with the Indians.

         The power exists to abrogate the provisions of an Indian 
        treaty, though presumably such power will be exercised only 
        when circumstances arise which will not only justify the 
        government in disregarding the stipulations of the treaty, but 
        may demand, in the interest of the country and the Indians 
        themselves, that it should do so. When, therefore, treaties 
        were entered into between the United States and a tribe of 
        Indians it was never doubted that the power to abrogate existed 
        in Congress, and that in a contingency such power might be 
        availed of from considerations of governmental policy, 
        particularly if consistent with perfect good faith towards the 
        Indians.

    Under the Lone Wolf doctrine, the United States sold millions of 
acres of Indian lands as ``surplus lands,'' supposedly not needed by 
Indian tribes. From 1887 to 1934, Indian nations lost more 90 million 
acres of land to the Allotment Policy at issue in Lone Wolf, and 
although the United States ended the Allotment Policy, precious little 
land has been restored.
    In 1934, Congress, through the Indian Reorganization Act, provided 
that tribal governments should have the right to veto any use or 
disposition of their land in the absence of tribal consent. 
Specifically, Section 16, discussing powers of Indian tribes, provides, 
``In addition to all powers vested in any Indian tribe or tribal 
council by existing law, the constitution adopted by said tribe shall 
also vest . . . the following rights and powers: . . . to prevent the 
sale, disposition, lease, or encumbrance of tribal lands, interests in 
lands, or other tribal assets without the consent of the tribe.'' 25 
U.S.C. sec. 476.
    Historical abuses of the Federal trust responsibility were limited 
in the 20th Century by the Courts and Congress. For example, in 
Shoshone Tribe v. United States, 299 U.S. 476 (1937), the Shoshone 
Tribe sued the United States for allowing the Arapaho Tribe to live on 
and claim a one-half interest in the Wind River Reservation, which had 
been reserved to the Shoshone by Treaty. The United States argued that 
the Treaty had a provision to allow for the settlement of friendly 
Indians on the reservation, so the placement of another tribe, such as 
the Arapaho, had been contemplated by the treaty. The Supreme Court 
rejected that argument:

         Power to control and manage the property and affairs of 
        Indians in good faith for their betterment and welfare may be 
        exerted in many ways and at times even in derogation of the 
        provisions of a treaty. The power does not extend so far as to 
        enable the government to give the tribal lands to others, or to 
        appropriate them to its own purposes, without rendering, or 
        assuming an obligation to render, just compensation; *  *  *  
        for that would not be an exercise of guardianship, but an act 
        of confiscation. The right of the Indians to the occupancy of 
        the lands pledged to them may be one of occupancy only, but it 
        is as sacred as that of the United States to the fee. 
        Spoliation is not management.

    Accordingly, the Shoshone Tribe Court authorized an award of 
damages by the court below on remand in accordance with the 5th 
Amendment.
    Similarly, in Sioux Nation v. United States, 448 U.S. 371 (1980), 
the Supreme Court held that the United States Congress had not acted in 
good faith as a trustee when it took the Black Hills from the Sioux 
Nation. Rather, the Federal Government had engaged in an exercise of 
dishonorable dealing by taking the Sioux Nation land without just 
compensation. Accordingly, the Supreme Court ruled that the Sioux 
Nation was entitled to compensation under the 5th Amendment.
The Federal Trust Responsibility as a Shield
    At times, the Federal trust responsibility has been used as a 
shield to protect Indian tribes from third-party depredations. For 
example, in United States ex rel. Hualapai Indians v. Santa Fe Pacific 
Railroad Co., 314 U.S. 339 (1941), the United States sued Santa Fe 
Railroad for possession of the aboriginal Indian land of the Hualapai 
and for back rent from Santa Fe Railroad for its trespass on the lands. 
The Court ruled in favor of the United States and the Hualapai 
explaining:

         Unquestionably it has been the policy of the Federal 
        Government from the beginning to respect the Indian right of 
        occupancy, which could only be interfered with by the United 
        States . . . . [T]he Indian right of occupancy is considered as 
        sacred as the fee simple of the whites . . . . It would take 
        plain and unambiguous action to deprive the Walapais of the 
        benefits of that policy. For it was founded on the desire to 
        maintain just and peaceable relations with Indians. The reasons 
        for its application to other tribes are no less apparent in 
        case of the Walapais, a savage tribe which in early days caused 
        the military no end of trouble.

    The Court found no clear congressional action extinguishing the 
Hualapai title to the land, the Railroad surrendered the land to the 
United States, and the Court ordered an accounting for back rents due 
to the Tribe.
    The United States has also acted to protect tribal mineral 
interests and natural resources, and when Federal law provides 
protection for Indian lands and mineral leases, lessees must strictly 
comply with the law. In United States v. Noble, 237 U.S. 74 (1915), the 
United States sued Noble for entering into an unauthorized lease with 
Quapaw Indian allottees. The Court explained the United States 
authority to act on behalf of the Quapaw:

         The Quapaws are still under national tutelage. The government 
        maintains an agency, and, pursuant to the treaty of May 13, 
        1833 (7 Stat. at L. 424), an annual appropriation is made for 
        education and other assistance (37 Stat. at L. 530, chap. 388). 
        In 1893, the Quapaw National Council made provision for 
        allotments in severalty which were to be subject to the action 
        of Congress, and in the act of ratification of 1895 Congress 
        imposed the restriction upon alienation which has been quoted. 
        The guardianship of the United States continues, 
        notwithstanding the citizenship conferred upon the allottees; 
        and, where Congress has imposed restrictions upon the 
        alienation of an allotment, the United States has capacity to 
        sue for the purpose of setting aside conveyances or contracts 
        by which these restrictions have been transgressed.

    The allottees had authority to lease their lands for ten years, and 
the allottees had been induced to enter into a series of overlapping 
mineral leases of ten years for five years in a row, with the final 
lease being an overlapping lease for a term of twenty years. The Court 
viewed the overlapping leases in an unfavorably: ``The practice, to say 
the least, is an abnormal one, and it requires no extended discussion 
to show that it would facilitate abuses in dealing with ignorant and 
inexperienced Indians . . . .'' The Noble Court held that Congress had 
not authorized ``overlapping leases'':

         The rents and royalties were profit issuing out of the land.. 
        It was the intent of Congress that the allottees, during the 
        period of the restriction, should be secure in the actual 
        enjoyment of their interest in the land. The restriction was 
        removed only to the extent specified; otherwise, the 
        prohibition against alienation remained absolute . . . .

         The allottee, as we have seen, is under an absolute 
        restriction with respect to his reversion for a period of 
        twenty-five years from the date of his patent. In the light of 
        this restriction, and of the governmental policy which induced 
        it, there is sound reason for construing the power as not 
        authorizing anything more than a lease in possession, as well 
        understood in the law. At common law, as the government points 
        out, it was the established doctrine that a tenant for life, 
        with a general power to make leases, could make only leases in 
        possession, and not leases in reversion or in furturo. He was 
        not authorized by such a power to make a lease to commence 
        'after the determination of a lease in being. Such a lease was 
        deemed to be reversionary. A general power to lease for a 
        certain number of years without saying either in possession or 
        reversion, authorizes only a lease in possession, and not in 
        futureo. Such a power receives the same construction as a power 
        to make leases in possession. What is expressed in the one is 
        understood in the other . . . .

         We are unable to see that the allottee under the power in 
        question has any better position. The protection accorded by 
        Congress, through the restriction upon the alienation of the 
        allottee's estate--modified only by the power to lease as 
        specified--was not less complete, because the limitation was 
        not in the interest of a remainderman, but was for the benefit 
        of the allottee himself as a ward of the Nation. The act of 
        1897 gives him authority 'to lease' for a term not exceeding 
        the stated limit. Taking the words in their natural sense, they 
        authorize leases in possession, and nothing more. The language 
        does not compel the recognition of leases which are to take 
        effect in possession many years after their execution, if, 
        indeed, it could be assumed that they were not intended to be 
        concurrent. Such leases certainly violate the spirit of the 
        statute, and according to the analogies of the law, they 
        violate its letter.

    The Court found that the ``overlapping leases'' violated the 
congressional requisites for the Indian land leases, and accordingly, 
the Court held that the leases were void.
The Scope of Federal Laws Are Sometimes Limited to Protect the Federal 
        Trust
    Indian treaties, statutes, executive orders, court decisions and 
administrative rulings provide a body of law that forms the backdrop 
for the trust responsibility and the Federal trust is a venerable 
doctrine with roots reaching to the foundation of the American 
Republic. On occasion, the Supreme Court has limited the scope that 
Federal laws would otherwise have in Indian country, based upon the 
Federal trust responsibility.
    For example, in Ex Parte Crow Dog, 109 U.S. 556 (1883), the Supreme 
Court held that the United States did not have authority to try Crow 
Dog for the murder of Spotted Tail, a well recognized Lakota Chief, 
because the treaty reserved crimes by one Indian against another to 
tribal justice systems. The Supreme Court explained:

         And congress shall, by appropriate legislation, secure to them 
        an orderly government; they shall be subject to the laws of the 
        United States, and each individual shall be protected in his 
        rights of property, person, and life.' It is equally clear, in 
        our opinion, that these words can have no such effect as that 
        claimed for them. The pledge to secure to these people, with 
        whom the United States was contracting as a distinct political 
        body, an orderly government, by appropriate legislation 
        thereafter to be framed and enacted, necessarily implies, 
        having regard to all the circumstances attending the 
        transaction, that among the arts of civilized life, which it 
        was the very purpose of all these arrangements to introduce and 
        naturalize among them, was the highest and best of all--that of 
        self-government, the regulation by themselves of their own 
        domestic affairs, the maintenance of order and peace among 
        their own members by the administration of their own laws and 
        customs. They were nevertheless to be subject to the laws of 
        the United States, not in the sense of citizens, but, as they 
        had always been, as wards, subject to a guardian; not as 
        individuals, constituted members of the political community of 
        the United States, with a voice in the selection of 
        representatives and the framing of the laws, but as a dependent 
        community who were in a state of pupilage, advancing from the 
        condition of a savage tribe to that of a people who, through 
        the discipline of labor, and by education, it was hoped might 
        become a self-supporting and self-governed society.

    Accordingly, the Court held that the general Federal statutes 
against murder did not apply in the killing of one Lakota Indian by 
another, since the 1868 Treaty with the Sioux Nation reserved such 
crimes to tribal law.
    In the area of taxation, the Supreme Court decided in Squire v. 
Capoeman, 351 U.S. 1, 7-10 (1956), that the proceeds of timber sales 
from allotted trust lands on the Quinault Indian Reservation were not 
subject to Federal capital gains taxes. The Court explained: ``The 
Government urges us to view this case as an ordinary tax case without 
regard to the treaty, relevant statutes, congressional policy 
concerning Indians, or the guardian-ward relationship between the 
United States and these particular Indians.'' The Court agreed that, 
outside the areas governed by treaty and remedial legislation, Indians 
are citizens and in ordinary affairs of life are treated as other 
citizens. Yet, the Court found that taxation of Indian trust lands was 
the subject of treaty and remedial legislation:

         Congress, in an amendment to the General Allotment Act, gave 
        additional force to respondents' position. Section 6 of that 
        Act was amended to include a proviso--

           That the Secretary of the Interior may, in his discretion, 
        and he is authorized, whenever he shall be satisfied that any 
        Indian allottee is competent and capable of managing his or her 
        affairs at any time to cause to be issued to such allottee a 
        patent in fee simple, and thereafter all restrictions as to 
        sale, incumbrance, or taxation of said land shall be removed 
        and said land shall not be liable to the satisfaction of any 
        debt contracted prior to the issuing of such patent *  *  *.

         The Government argues that this amendment was directed solely 
        at permitting state and local taxation after a transfer in fee, 
        but there is no indication in the legislative history of the 
        amendment that it was to be so limited. The fact that this 
        amendment antedated the federal income tax by 10 years also 
        seems irrelevant. The literal language of the proviso evinces a 
        congressional intent to subject an Indian allotment to all 
        taxes only after a patent in fee is issued to the allottee. 
        This, in turn, implies that, until such time as the patent is 
        issued, the allotment shall be free from all taxes, both those 
        in being and those which might in the future be enacted.

         The first opinion of an Attorney General touching on this 
        question seemed to construe the language of the amendment to 
        Section 6 as exempting from the income tax income derived from 
        restricted allotments. And even without such a clear statutory 
        basis for exemption, a later Attorney General advised that he 
        was--

           (U)nable, by implication, to impute to Congress under the 
        broad language of our Internal Revenue Acts an intent to impose 
        a tax for the benefit of the Federal Government on income 
        derived from the restricted property of these wards of the 
        nation; property the management and control of which rests 
        largely in the hands of officers of the Government charged by 
        law with the responsibility and duty of protecting the 
        interests and welfare of these dependent people. In other 
        words, it is not lightly to be assumed that Congress intended 
        to tax the ward for the benefit of the guardian.

         Two of these opinions were published as Treasury Decisions. On 
        the basis of these opinions and decisions, and a series of 
        district and circuit court decisions, it was said by Felix S. 
        Cohen, an acknowledged expert in Indian law, that it is clear 
        that the exemption accorded tribal and restricted Indian lands 
        extends to the income derived directly therefrom. These 
        relatively contemporaneous official and unofficial writings are 
        entitled to consideration . . . .

         The wisdom of the congressional exemption from tax embodied in 
        Section 6 of the General Allotment Act is manifested by the 
        facts of the instant case. Respondent's timber constitutes the 
        major value of his allotted land. The Government determines the 
        conditions under which the cutting is made. Once logged off, 
        the land is of little value. The land no longer serves the 
        purpose for which it was by treaty set aside to his ancestors, 
        and for which it was allotted to him. It can no longer be 
        adequate to his needs and serve the purpose of bringing him 
        finally to a state of competency and independence. Unless the 
        proceeds of the timber sale are preserved for respondent, he 
        cannot go forward when declared competent with the necessary 
        chance of economic survival in competition with others. This 
        chance is guaranteed by the tax exemption afforded by the 
        General Allotment Act, and the solemn undertaking in the 
        patent. It is unreasonable to infer that, in enacting the 
        income tax law, Congress intended to limit or undermine the 
        Government's undertaking. To tax respondent under these 
        circumstances would, in the words of the court below, be at the 
        least, a sorry breach of faith with these Indians.

    In short, the Federal trust responsibility provides the overarching 
principle for Federal law relating to Indian trust lands, natural 
resources, and trust property. Other Federal law must be interpreted in 
light of the Federal trust responsibility when it applies to Indian 
lands, natural resources, trust property, or tribal self-government.
Federal Accountability Under the Federal Trust Responsibility
    In the 20th Century, the Supreme Court has held that the United 
States should be held to the exacting standards of a fiduciary in its 
treaty and trust relationships with Indian tribes. In Seminole Nation 
v. United States, 316 U.S. 286, 297 (1942), the Seminole Nation sued 
the United States for failing to protect the treaty payments and 
annuities due to the Nation. The Supreme Court, relying on the 
traditional standards for common law trustees, explained:

         It is a well established principle of equity that a third 
        party who pays money to a fiduciary for the benefit of the 
        beneficiary, with knowledge that the fiduciary intends to 
        misappropriate the money or otherwise be false to his trust, is 
        a participant in the breach of trust and liable therefor to the 
        beneficiary. The Seminole General Council, requesting the 
        annuities originally intended for the benefit of the individual 
        members of the tribe, stood in a fiduciary capacity to them. 
        Consequently, the payments at the request of the Council did 
        not discharge the treaty obligation if the Government, for this 
        purpose the officials administering Indian affairs and 
        disbursing Indian moneys, actually knew that the Counsel was 
        defrauding the members of the Seminole Nation.

         Furthermore, this Court has recognized the distinctive 
        obligation of trust incumbent upon the Government in its 
        dealings with these dependent and sometimes exploited people. 
        In carrying out its treaty obligations with the Indian tribes 
        the Government is something more than a mere contracting party. 
        Under a humane and self imposed policy which has found 
        expression in many acts of Congress and numerous decisions of 
        this Court, it has charged itself with moral obligations of the 
        highest responsibility and trust. Its conduct, as disclosed in 
        the acts of those who represent it in dealings with the 
        Indians, should therefore be judged by the most exacting 
        fiduciary standards. Payment of funds at the request of a 
        tribal council which, to the knowledge of the Government 
        officers charged with the administration of Indian affairs and 
        the disbursement of funds to satisfy treaty obligations, was 
        composed of representatives faithless to their own people and 
        without integrity would be a clear breach of the Government's 
        fiduciary obligation.

    (Emphasis added). Accordingly, the Supreme Court remanded the case 
back to the lower courts with instructions to determine whether the 
United States had made payments with the knowledge that they would be 
wasted and a provide a recovery for the Seminole Nation, if that were 
the case.
    he Federal trust responsibility has also been a means to hold the 
United States accountable for its management of Indian resources , when 
Congress has created a statutory framework for management of those 
resources. In United States v. Mitchell, 463 U.S. 206 (1983) (Mitchell 
II), the Supreme Court held that individual Indian allottees could sue 
the United States for breach of trust based on mismanagement and waste 
of timber resources where Congress had enacted a statute providing a 
comprehensive framework for management of the timber resources and the 
primary elements of a common law trust were present: a trustee (the 
United States), a beneficiary (Indian allottees), and a trust corpus 
(Indian timber, lands, and funds). The Court explained:

         The timber management statutes, 25 U.S.C. 406-407, 466, and 
        the regulations promulgated thereunder, 25 CFR Part 163 (1982), 
        establish the ``comprehensive'' responsibilities of the Federal 
        Government in managing the harvesting of Indian timber. The 
        Department of the Interior--through the Bureau of Indian 
        Affairs--exercises literally daily supervision over the 
        harvesting and management of tribal timber. Virtually every 
        stage of the process is under federal control . . . . [T]he 
        statutes and regulations now before us clearly give the Federal 
        Government full responsibility to manage Indian resources and 
        land for the benefit of the Indians. They thereby establish a 
        fiduciary relationship and define the contours of the United 
        States' fiduciary responsibilities . . . .

         Moreover, a fiduciary relationship necessarily arises when the 
        Government assumes such elaborate control over forests and 
        property belonging to Indians. All of the necessary elements of 
        a common-law trust are present: a trustee (the United States), 
        a beneficiary (the Indian allottees), and a trust corpus 
        (Indian timber, lands, and funds). ``Where the Federal 
        Government takes on or has control or supervision over tribal 
        monies or properties, the fiduciary relationship normally 
        exists with respect to such monies or properties (unless 
        Congress has provided otherwise) even though nothing is said 
        expressly in the authorizing or underlying statute (or other 
        fundamental document) about a trust fund, or a trust or 
        fiduciary connection.'' . . .

         Our construction of these statutes and regulations is 
        reinforced by the undisputed existence of a general trust 
        relationship between the United States and the Indian people. 
        This Court has previously emphasized ``the distinctive 
        obligation of trust incumbent upon the Government in its 
        dealings with these dependent and sometimes exploited people.'' 
        This principle has long dominated the Government's dealings 
        with Indians.

    Thus, in the 20th Century, the Supreme Court drew on common law 
trust principles to ensure the United States' accountability for the 
management of Indian lands, natural resources and trust property.
The Federal Trust Responsibility and the Indian Minerals Leasing Act
    In 1924, U.S. Attorney General Harlan F. Stone ruled that executive 
order Indian lands could not be leased as public lands because the 
governing Indian tribe owned the beneficial interest in the mineral 
estate. \2\
---------------------------------------------------------------------------
    \2\ 34 Op. Att'y Gen. 171 (1924).
---------------------------------------------------------------------------
    In 1938, Congress enacted the Indian Mineral Leasing Act (IMLA) to 
provide general governance of mineral leasing on Indian lands. \3\ 
Federal Courts explain that: ``[T]he United States, acting to safeguard 
the Indians in the conduct of their affairs, has established a 
comprehensive statutory and regulatory scheme covering mineral leasing 
on tribal lands.'' \4\ The basic purpose of the IMLA is to ``maximize 
tribal revenues from reservation lands.'' \5\ The IMLA provides that:

    \3\ U.S.C.  396a-396g.
    \4\ United States v. 9,345.53 Acres of Land, Etc., 256 F. Supp. 603 
(W.D.N.Y. 1966).
    \5\ Kerr McGee v. Navajo Nation, 471 U.S. 195, __ (1985).
---------------------------------------------------------------------------
         [Tribal lands] may, with the approval of the Secretary of the 
        Interior, be leased for mining purposes, by authority of the 
        tribal council . . . for terms not to exceed ten years and as 
        long thereafter as minerals are produced in paying quantities, 
        that [l]eases for oil and or gas-mining purposes . . . shall be 
        offered to the highest responsible qualified bidder at public 
        auction or on sealed bids. \6\

    \6\ United States v. 9,345.53 Acres of Land, Etc., 256 F. Supp. at 
605 (quoting 25 U.S.C. sec. 396a-396d).
---------------------------------------------------------------------------
    Under the IMLA, the Secretary serves as both the administrator and 
the trustee of tribal government oil and gas resources. Acting for the 
Secretary, the BIA Superintenden must take the Indian tribe's best 
interests into account when making any decision involving leases on 
tribal lands, and has broad discretion to consider all factors that may 
affect tribal interests, including long-term economic interests, 
conservation of tribal mineral resources, and production. \7\ The 
Secretary's regulations implementing the IMLA explain:
---------------------------------------------------------------------------
    \7\ Kenai Oil and Gas v. Dept. of Interior, 671 F.2d 383 (10th Cir. 
Utah).

         These regulations are intended to ensure that Indian mineral 
        owners desiring to have their resources developed are assured 
        that they will be developed in a manner that maximizes their 
        best economic interests and minimizes any adverse environmental 
        or cultural impacts resulting from such development. \8\
---------------------------------------------------------------------------
    \8\ 25 C.F.R.  211.1(a).

    Oil and gas leases on Indian lands entered into under the authority 
of the IMLA, and which violate the IMLA are void. \9\
---------------------------------------------------------------------------
    \9\ See Kenai Oil and Gas v. Dept. of Interior at 607-608 (The 
leases in question, entered into in violation of the provisions of 
sections 396a, 396b, 396c, and 396d . . . are void).
---------------------------------------------------------------------------
    The IMLA and its implementing regulations establish a comprehensive 
Federal law framework for the management of Indian trust resources, and 
the BIA and the Interior Department are involved in the daily 
management of Indian mineral resources under the Act. The basic 
elements of a common law trust are present: the trustee (the United 
States), the beneficiary (the Indian tribe), and the trust corpus (the 
Indian minerals, lands, money and funds). Thus, the IMLA imposes 
fiduciary obligations on the United States acting through the Secretary 
in order to maximize mineral revenues for Indian tribes.
    In Jicarilla Apache Tribe v. Supron Energy, Southland Royalty, and 
Secretary Hodel, 782 F.2d 855 (10th Cir. 1986), the Jicarilla Apache 
Tribe sued Supron, Southland and Secretary Hodel for failing to 
properly value and account for oil and gas royalties due to the 
Jicarilla Apache Tribe under IMLA mineral leases. Comparing the IMLA to 
the timber statues and regulations at issue in Mitchell II, the 10th 
Circuit en banc explained:

         Leasing of minerals located on Indian reservations is also a 
        creature of federal statute. As in timber harvesting, the 
        federal government's role in mineral leasing is pervasive and 
        its responsibilities comprehensive. The Indian Mineral Leasing 
        Act of 1938, 25 U.S.C. Secs. 396a-396g (1976), requires the 
        Secretary to: set the ``terms'' and ``conditions'' for leasing, 
        id. Sec. 396b; approve leases, id. Sec. 396a; establish lease 
        sale procedures, id. Sec. 396b; reject unsatisfactory bids, 
        id.; require satisfactory performance bonds of lessees, id. 
        Sec. 396c; promulgate rules and regulations governing ``all 
        operations'' under leases, id. Sec. 396d; and approve leases 
        for subsurface storage when necessary to avoid waste, or to 
        promote conservation of resources, or to protect tribal 
        welfare, id. Sec. 396g. The evident purpose of the statute is 
        to ensure that Indian tribes receive the maximum benefit from 
        mineral deposits on their lands through leasing.

         This interpretation is supported by the Act's legislative 
        history. When the Act was proposed, the Secretary of the 
        Interior urged that the legislation be enacted because ``it is 
        not believed that the present law is adequate to give the 
        Indians the greatest return from their property.'' Senate 
        Report No. 985 at 2 (1937); House Report No. 1872 at 2 (1938). 
        Congress responded to the need to ensure that the Indians' 
        welfare be protected and their natural resources be managed to 
        the tribes' maximum benefit by emphasizing the Secretary's 
        fiduciary obligations, directing the Secretary to approve lease 
        sales only when they are ``in the interest of the Indians.''

         Interior has promulgated extensive regulations for managing 
        leases under the Act. See 25 C.F.R. pt. 211 (1982). The 
        regulations stress that the Secretary must act in the best 
        interests of the tribes. See, e.g., id. Secs. 211.3(b), .6(a), 
        .9(b)(1), .12(a), .19, .21(a), .22, .27. Additional 
        regulations, published in 30 C.F.R. Part 221, require the 
        government to maintain comprehensive records of price and 
        production, and to determine royalties. 30 C.F.R. Sec. 221.12. 
        These regulations detail in exhausting thoroughness the 
        government's management and regulatory responsibilities. See 
        id. pt. 221.

         Because the statutes and regulations contain such an explicit 
        and detailed enumeration of duties, in my view Mitchell II 
        compels the conclusion that Congress intended the Secretary to 
        be a trustee.

    The 10th Circuit ruled that the Secretary breached his trust 
responsibility to the Jicarilla Apache Tribe by failing to administer 
royalty payments for the Tribe's gas resources in a manner that would 
maximize the return to the Tribe. In addition, the Court upheld the 
trial court's determination that the Secretary had breached his trust 
responsibility by failing to insure that lessees complied with the 
terms of tribal oil and gas leases and by being negligent in monitoring 
for potential drainage by lessees.
The Administration's Stated Policy
    For the past 30 years and more, the Executive Branch and Congress 
have promoted the Federal government-to-government relationship with 
Indian tribes. The guiding executive branch pronouncement on this 
policy is President Clinton's Executive Order 13175 (2000), which 
directs Federal agencies in their dealings with Indian tribes to be 
guided by the fundamental principles that:

         The United States has a unique legal relationship with Indian 
        tribal governments as set forth in the Constitution of the 
        United States, treaties, statutes, Executive Orders, and court 
        decisions. Since the formation of the Union, the United States 
        has recognized Indian tribes as domestic dependent nations 
        under its protection. The Federal Government has enacted 
        numerous statutes and promulgated numerous regulations that 
        establish and define a trust relationship with Indian tribes.

         Our Nation, under the law of the United States, in accordance 
        with treaties, statutes, Executive Orders, and judicial 
        decisions, has recognized the right of Indian tribes to self-
        government. As domestic dependent nations, Indian tribes 
        exercise inherent sovereign powers over their members and 
        territory. The United States continues to work with Indian 
        tribes on a government-to-government basis to address issues 
        concerning Indian tribal self-government, tribal trust 
        resources, and Indian tribal treaty and other rights.

         The United States recognizes the right of Indian tribes to 
        self- government and supports tribal sovereignty and self-
        determination.

    More specifically, agencies are directed to ``respect Indian tribal 
self-government and sovereignty, honor tribal treaty and other rights, 
and strive to meet the responsibilities that arise from the unique 
legal relationship between the Federal Government and Indian tribes.'' 
The Bush and Obama Administrations have pledged to honor the Clinton 
Executive Order on Consultation and Collaboration with Indian Tribal 
Governments.

III. Breach of Trust Case--Fiduciary Excpetion
    In January 2002, the Jicarilla Apache Nation filed a breach of 
trust suit against the Federal Government in the U.S. Court of Federal 
Claims (CFC) for mismanagement of the Nation's trust funds and trust 
assets. The trust funds at issue are held in trust and managed by the 
United States for the Nation.
    From December 2002 to June 2008, the Government and the Nation 
engaged in an alternative dispute resolution process. During this time, 
the parties produced thousands of documents. The Government withheld 
226 potentially relevant documents claiming that they were protected 
from disclosure by the attorney-client privilege, the attorney work-
product doctrine, or the deliberative-process privilege.
    With no apparent end to the ADR process, in 2008 Nation requested 
that the case placed on the active litigation docket. The CFC divided 
the case into phases for trial and set a discovery schedule. The first 
phase involves the Government's management of the Nation's trust fund 
accounts from 1972 to 1992 and our claim that during this period the 
Government failed to invest its trust funds properly, by failing to 
maximize returns on our trust funds, investing too heavily in short-
term maturities, and failing to pool our trust funds with other tribal 
trusts. During the discovery process, the Nation filed a motion to 
compel the Government to produce the 226 withheld documents. The 
Government withdrew its deliberative-process privilege claim and agreed 
to produce 71 documents, but continued to invoke the attorney-client 
privilege and attorney work-product doctrine for the remaining 155 
documents. Among other claims, the Government maintained that those 
documents contained advice given by the Department of the Interior 
Solicitor's Office (and other federal legal offices) about acceptable 
investments for tribal trust assets.
    The Nation asked the CFC to require the Government to produce these 
documents on the basis of the ``fiduciary exception'' to the attorney-
client privilege, a well-established exception in the common law of 
trusts. It provides that a trustee cannot withhold from the beneficiary 
any legal advice about the management of trust assets. The 
justification for this exception is two-fold. First, the trustee is not 
the exclusive client of the attorney rendering advice, but rather is 
obtaining that advice as a representative of the trust's beneficiaries. 
Thus, the trustee does not have an attorney-client privilege that would 
exclude the beneficiary from access to the legal advice. Second, the 
trustee has a duty to disclose all information related to trust 
management to the beneficiary. This duty overrides the attorney-client 
privilege, especially where the information sought by the beneficiary 
is relevant to an alleged breach of a fiduciary duty.
    The CFC accepted the Nation's ``fiduciary exception'' argument and 
ordered the Government to produce the attorney-client documents to the 
Nation. The Government appealed the CFC's ruling to the U.S. Court of 
Appeals for the Federal Circuit. The Federal Circuit affirmed the CFC's 
ruling. The Government sought review by the Supreme Court. The Court 
agreed to hear the appeal and heard oral arguments in April 2011.
    It's important to note that the Nation had a strong legal basis for 
seeking court ordered production of these documents. At that point, 
several decisions by federal courts had favorably applied the 
``fiduciary exception'' to the Government in previous breach of trust 
cases. Moreover, the Court of Federal Claims and the U.S. Court of 
Appeals for the Federal Circuit agreed with our position. All of the 
appellate litigation was instigated by the Government in an apparent 
attempt to create an adverse precedent that it could rely on in 
defending against the other pending tribal trust lawsuits.
The Supreme Court's Decision
    On June 13, 2011, in a 7-1 decision, the Supreme Court 
unfortunately ruled in the Government's favor with respect to whether 
the ``fiduciary exception'' can be applied to the Government. See 131 
S.Ct, 2313 (2011). The majority held that tribes suing the Government 
for breach of trust cannot require the Government to disclose documents 
containing legal advice the Government obtained regarding the 
management of tribal trust assets.
    Justice Sotomayor agreed with the Nation's position and expressed 
her views in a dissenting opinion. (One Justice, Elena Kagan, recused 
herself and did not participate in the decision of the case because she 
had served as the United States Solicitor General when this case was 
making its way through the appeals process).
    The majority opinion, written by Justice Alito, ruled that when the 
Government manages Indian trust property, including trust funds, it 
does not act as a private trustee and is not subject to the general 
common law trust principles that are applicable to private trustees. 
Rather it acts in its sovereign capacity as Government and in the 
furtherance its own sovereign interests:

         Although the Government's responsibilities with respect to the 
        management of funds belonging to Indian tribes bear some 
        resemblance to those of a private trustee, this analogy cannot 
        be taken too far. The trust obligations of the United States to 
        the Indian tribes are established and governed by statute 
        rather than the common law, and in fulfilling its statutory 
        duties, the Government acts not as a private trustee but 
        pursuant to its sovereign interest in the execution of federal 
        law.

    Id. at 2318. Accordingly, the majority held that the Government is 
not subject to the common law ``fiduciary exception.''
    The majority reasoned that the two justifications for the 
``fiduciary exception'' do not apply to the Government. First, when the 
Government obtains legal advice regarding the management of Indian 
trust funds, it does so not as a mere representative of the Nation, but 
in its own sovereign capacity and in furtherance of its own interests. 
``For that reason,'' the majority held, ``when the Government seeks 
legal advice related to the administration of tribal trusts, it 
establishes an attorney-client relationship related to its sovereign 
interest in the execution of federal law. In other words, the 
Government seeks legal advice in a `personal' rather than a fiduciary 
capacity.'' Id.. 2327-28. That advice is privileged and not subject to 
disclosure.
    Second, the majority held that the Government does not have a 
general common law duty to disclose information to Indian trust 
beneficiaries. The majority stated that ``common-law principles are 
relevant only when applied to a `specific, applicable, trust-creating 
statute or regulation.''' Id.. at 2329. In this case, the majority held 
that the relevant statute--25 U.S.C.  162a(d)--requires disclosure of 
periodic statements of trust fund performance and account balances, but 
it does not require the disclosure of all information related to the 
administration of the trust funds. The majority stated: ``We will apply 
common-law trust principles where Congress has indicated it is 
appropriate to do so.'' Id. at 2340. In view of the limited duties 
mandated by Congress in 25 U.S.C.  162a(d), the majority refused to 
apply common-law trust principles to require the disclosure of 
additional information.
    Finally, the majority noted that the Government pays for legal 
advice out of its own funds, instead of trust funds, and that the 
documents containing the advice are ``the property of the United 
States.'' Id.. at. 2330. The Court considered these to be significant 
factors in deciding who ought to have access to the documents.
    Justice Ginsburg wrote a concurring opinion that was joined by 
Justice Breyer. They said the majority opinion went too far by 
indicating that the government may have the power to withhold 
additional documents from tribes (in addition to documents protected by 
the attorney-client privilege).
    Justice Sotomayor wrote a dissenting opinion. She said that the 
statutory framework governing Indian trust funds is adequate to allow 
courts to apply general trust principles, including the common law duty 
to disclose information to trust beneficiaries:

         We have never held that all of the government's trust 
        responsibilities to Indians must be set forth expressly in a 
        specific statute or regulation. To the contrary, where, as 
        here, the statutory framework establishes that the relationship 
        between the government and an Indian tribe bears the hallmarks 
        of a conventional fiduciary relationship, we have consistently 
        looked to general trust principles to flesh out the 
        government's fiduciary obligations.

    Id. at 2339.

Implications of the Court's Decision
    This decision is extremely disappointing. It prevents Indian tribes 
from obtaining information about the management of their trust assets 
that is available to ``private'' trust beneficiaries who sue their 
trustees for breach of trust. It turns Indians into ``second class 
beneficiaries'' in terms of their rights to receive information and to 
assess their trustee's performance of its fiduciary obligations. The 
Supreme Court held that the United States is different from other 
trustees and is not bound by the same rules. The Supreme Court majority 
discussed in abstract terms how the Government, as a ``sovereign,'' is 
different from other trustees and stated that ``the Government has too 
many competing legal concerns'' to permit a case-by-case inquiry as to 
whether it has to balance competing interests in a particular case. 
This rationale is astounding in light of the fact that there were NO 
competing interests set forth in the record.
    The decision is also troubling because it limits the applicability 
of general trust law principles to the Government's management of 
Indian trust assets. The majority stated that ``common-law principles 
are relevant only when applied to a `specific, applicable, trust-
creating statute or regulation,''' and further that the courts will 
only ``apply common-law trust principles where Congress has indicated 
it is appropriate to do so.'' Previously, the Court had required 
specific trust-creating statutes only to establish jurisdiction under 
the Tucker Act for claims for money damages. The Court's decision now 
appears to impose this requirement on all trust claims against the 
Government, including claims for non-monetary relief, like the Nation's 
claim for the production of documents in this case.
    The majority asserted that ``[t]he Government assumes Indian trust 
responsibilities only to the extent it expressly accepts those 
responsibilities by statute.'' Justices Ginsburg and Breyer, in their 
concurring opinion, criticized this language as being unnecessarily 
broad. Justice Sotomayor, in her dissent, expressed fear that the 
Court's decision may ``reinvigorate the position of the dissenting 
Justices in [the Court's previous decisions in White Mountain Apache 
and Mitchell II, who rejected the use of common-law principles to 
inform the scope of the Government's fiduciary obligations to Indian 
tribes.'' From now on, the Government will cite this language to 
attempt to minimize its fiduciary duties to Indians and to avoid 
liability for its mismanagement of Indian assets.
    As Andrew Cohen wrote in the Atlantic, an unsettling theme that 
emerges from the Supreme Court's opinion is that the ``trust'' 
relationship between the Government and Indians ``is less about 'trust' 
and more about the exercise of [the Government's] sovereign authority 
over a vanquished people.''
Legislative ``Fix''
    We are very disappointed by the Supreme Court's decision and 
concerned about the negative implications on the Trust Responsibility 
as well as the detrimental impact for other Indian tribes. Fortunately, 
Congress can correct this decision through legislation. We suggest that 
Congress amend the American Indian Trust Fund Management Reform Act of 
1994, by adding a new provision to 25 U.S.C. 162a(d):

         New provision: (9) Providing Indian tribes, upon request, with 
        any documents relating to the Secretary's management of the 
        tribe's trust funds and natural resources except for work 
        product relating to litigation or potential litigation between 
        the United States and a tribe or individual Indian.

    We strongly believe that Congress should immediately take action to 
correct this detrimental decision.

IV. Trust Responsibility: Trust Lands and Mineral Resources
    The Nation also takes this opportunity to raise a set of other 
trust responsibility issues which relates to our trust land and mineral 
resources.
Oil and Gas Exploration and Production
    The Nation continues to experience challenges with oil and gas 
lease compliance primarily due to the large amount of acreage under 
lease and/or production, the number of wells in service, the extensive 
gas gathering systems operating throughout the Reservation, the large 
number of operators and related vendor service providers on the 
Reservation, to name a few. Under these circumstances, there is an 
acute need for additional regulatory oversight including enhanced 
federal coordination with the Nation and increased funding to fully 
support tribal regulatory needs.
    As discussed above, oil and gas leasing activity on our Reservation 
is conducted in accordance with the IMLA or the IMDA, and through these 
laws, Congress created a statutory fiduciary relationship, whereby the 
government acts as a trustee for the tribes in the context of mineral 
leasing of tribal trust resources. Accordingly the three separate 
agencies within the Department of Interior (Department) have 
jurisdiction over Indian leasing: the Bureau of Indian Affairs (BIA), 
the Bureau of Land Management (BLM), and the Office of Natural 
Resources Revenue (ONRR). The Nation exercises concurrent regulatory 
jurisdiction with these federal agencies over oil and gas leasing 
activities, and the Nation imposes and collects tribal severance taxes.
    Yet, though we have made tremendous progress of the years working 
with our federal partners, the Nation believes there is room for 
improvement as far as coordination in the management and regulation 
among the Nation and the federal agencies. The Nation requests that 
Congress exercise oversight to consider a reform of current policies, 
procedures, practices and systems of the Department, the BIA, the BLM, 
and the ONRR in order to ensure the proper and efficient discharge of 
the Secretary's trust responsibilities regarding oil and gas leasing on 
our Reservation.

Bankruptcy Filings by Oil and Gas Lessees
    The Nation is concerned about the bankruptcy filings involving 
entities that hold or assert rights to IMLA leasing interests covering 
thousands of acres on our Reservation. In some cases, it is apparent 
that these bankruptcy filings have been pursued as a means to 
circumvent federal and tribal laws. The Nation has already been 
involved in several bankruptcy proceedings to protect our interest in 
these IMLA leases. To address this alarming circumvention of federal 
law and regulations, the Nation proposes that legislative or 
administrative fixes be put into place. Specifically, the law should be 
made clear that prior to any assignment or assumption of tribal oil and 
gas leases, especially in the context of bankruptcy cases, both the 
tribal mineral owner and the BIA must review and duly approve. A 
related issue is compliance by industry and enforcement by the BIA. It 
is important that Congress protect the integrity of IMLA leases by 
ensuring that federal and tribal oil and gas regulatory authority is 
not diminished through bankruptcy filings.

Split Mineral Estate Development
    An important aspect of the trust responsibility is to protect the 
integrity of the Nation's sovereignty and control of our lands and the 
development of our resources. This extends to the development of the 
split mineral interests on our Reservation. As noted above, our 
Reservation was not subject to the Allotment Policy and Law and 
therefore we retain 100 percent of the surface and mineral estate of 
our original Executive Order lands. However, the Nation subsequently 
purchased several large ranches adjacent to the Reservation and such 
lands and minerals were taken into trust and added to the Reservation. 
One particular ranch was taken into trust subject to a split mineral 
estate.
    As background, in 1985, the Nation purchased a 55,000 acre ranch 
contiguous to our northeastern boundary. At the same time, we purchased 
an approximate undivided twenty-five percent (25 percent) interest in 
and to all oil, gas, and other minerals owned by the seller, who held 
seventy-five percent (75 percent) of the mineral estate. A third party 
entity holds the other twenty-five percent (25 percent) of the mineral 
interests. In November 1987, the Nation conveyed the surface lands of 
this property to the United States, to be held in trust. In December 
1987, the Nation conveyed its interest in the mineral estate to the 
United States. On or about March 10, 1988, pursuant to 25 U.S.C.  465, 
the United States accepted these conveyances and approved the trust 
status of the surface lands and the Nation's undivided interest in the 
subsurface mineral estate. On or about September 1, 1988, pursuant to 
25 U.S.C.  467, the United States added the surface lands and the 
Nation's undivided interest in the subsurface mineral estate to the 
Reservation. See, Proclamation of Certain Lands as Part of the 
Jicarilla Apache Reservation, 53 Fed. Reg. 37355-02 (Sept. 26, 1988).
    In 2006, more than twenty years after the Nation purchased the 
ranch and eighteen years after the United States took into trust the 
surface lands and mineral interest the Nation purchased, the owner of 
the majority mineral interest entered into a lease with a third party 
for mineral development. The lease was not reviewed by the Nation or 
the BIA even though it purported to lease the Nation's trust lands and 
its undivided trust mineral interest. BIA is responsible to review and 
approve the leasing of tribal lands and mineral resources, and is 
further required to secure our consent. The failure to exercise these 
trust duties constitutes a breach of the Federal Government's trust 
responsibility.
    Incidentally in July 2006, the Solicitor's Office of the Department 
of the Interior essentially determined that neither the Nation nor the 
United States could ``stop'' development, which has lead to a confusing 
opinion creating more questions than answers. In particular, the 
Solicitor's opinion ignores Supreme Court decisions, which clearly hold 
that Indian trust land cannot be leased or otherwise encumbered without 
the approval of Congress. Congress has passed statutes which provide 
such approval subject to important protections, such as the IMLA and 
the Indian Reorganization Act. The fundamental reason for these laws is 
that the United States to hold title to Indian trust land, and 
therefore, the United States must protect the beneficial interest of 
the Indian nation. The Nation requested that the Solicitor rescind or 
modify its legal opinion and further requested to meet directly with 
the Solicitor. Our requests were not granted, though the law is clear 
that both federal approval and tribal consent are required prior to any 
development or encumbrance of tribal trust minerals. Congress should 
exercise its oversight authority over the Department of the Interior to 
ensure that these important and fundamental principles are fully 
adhered to, especially in our case where we have worked so hard to 
protect reservation lands.

Dual Taxation of Oil and Gas Production in Indian Country
    Our Nation heavily depends on our oil and gas production as the 
primary means of generating governmental revenue. Our Reservation is 
located in the San Juan Basin, a well-known prolific source of oil and 
gas production for over seventy (70) years. Oil and gas development 
began on our Reservation during the 1950's, under the leasing authority 
of the Secretary of the Interior pursuant to the IMLA. Throughout those 
early years, the Secretary negotiated and entered into oil and gas IMLA 
leases on the Nation's behalf leaving us with a modest royalty interest 
in the development and production of our oil and gas reserves. In the 
1970's and 1980's the Nation became more active in the development of 
our resources and won a significant legal ruling in the U.S. Supreme 
Court in 1982. In that seminal case, Jicarilla Apache Tribe v. Merrion, 
455 U.S. 130 (1982) the U.S. Supreme Court recognized our inherent 
right to regulate our lands and resources within our Reservation, and 
upheld our sovereign authority to impose our own severance tax on the 
production of our oil and gas resources. That same year, Congress 
passed the Indian Minerals Development Act (IMDA) which authorized 
Tribes to negotiate energy deals directly, though subject to 
Secretarial approval. The tremendous impact of the Merrion case coupled 
with the enactment of the IMDA provided our Nation and other Tribes 
powerful resources and tools to expand our energy development 
initiatives.
    Following our victory in the Merrion case, the Supreme Court 
considered another case arising from our Reservation which involved an 
oil and gas company's challenge to the imposition of the New Mexico Oil 
and Gas Severance Tax for activities on the Reservation arguing that 
those taxes were preempted by the State and Tribal regulatory schemes. 
In that case, States were granted permission to impose severance taxes 
on non-Indian activities involving the on-reservation production of 
Indian oil and gas reserves in the 1989 United States Supreme Court 
decision Cotton Petroleum v. New Mexico, 490 U.S. 163 (1989), which 
established a dual taxation burden on tribal non-renewable trust 
resources.
    Three years later, Congress acknowledged the problem with this type 
of dual taxation. In the Energy Policy Act of 1992, Pub. L. 102-486, an 
Indian Energy Resources Commission (``Commission'') was established. 
Among several other objectives, the Commission was to (1) develop 
proposals to address the dual taxation of the extraction of mineral 
resources on Indian reservations; (2) develop proposals on incentives 
to foster the development of energy resources on Indian reservations; 
(3) identify barriers or obstacles to the development of energy 
resources on Indian reservations, (4) make recommendations designed to 
foster the development of energy resources on Indian reservations and 
promote economic development; and (5) develop proposals on taxation 
incentives to foster the development of energy resources on Indian 
reservations including, but not limited to, investment tax credits and 
enterprise zone credits.
    In June 2001, the Nation attempted to address the dual taxation 
issue working with our then senior Senator, Pete Dominici, who 
introduced S. 1106, a bill to provide a tax credit for the production 
of oil or gas from deposits held in trust for, or held with 
restrictions against alienation by, Indian tribes and Indian 
individuals. A year later, the National Congress of American Indians 
passed Resolution #BIS-02-060 to include S. 1106 in the National Energy 
Bill during conference between the United States House of 
Representatives and the United States Senate. However, the proposed 
bill was referred to the Committee on Finance, and was not passed into 
law.
    To date, the issues the Commission was to address have not been 
fully addressed by either the Commission or Congress. As tribes 
increase their economic development efforts, issues with dual taxation 
also increase. Dual taxation is an impediment and deterrent to economic 
development on Indian trust and restricted land. Dual taxation of 
tribal oil and gas reserves creates an adverse economic environment 
which impedes self-determination and strong economic development in 
Indian Country. The United States Congress has the power to address the 
dual taxation of tribal non-renewable resources by providing a Federal 
tax credit for the production of tribal resources, much like the one 
Senator Dominici introduced in the 107th Congress.
    It is important to note that the State of New Mexico enacted a 
state severance tax credit for producers who developed new wells after 
1995. This is an important incentive to address the dual taxation 
issue. However, it also important to note that the many of the existing 
wells on the Nation's lands were placed in service prior to 1995, and 
that many other States with oil and gas producing tribal lands do have 
similar law in place.
    Thus, the enactment of a Federal tax credit for the production of 
oil and gas produced on Indian lands would be helpful in addressing 
this problem. The creation of such a tax credit would not only address 
the dual taxation of tribal non-renewable resources, but would also 
help stimulate tribal economies, and contribute to the United States 
energy policy of boosting domestic production to decrease reliance on 
foreign production. It is truly ironic that, as America seeks greater 
energy independence and undertakes hazardous energy sources such as 
nuclear energy and off-shore drilling, Federal caselaw burdens the 
development of safe Native American energy resources with dual 
taxation. This must end.
    We respectfully request an opportunity to work with you to craft a 
provision outlining Federal tax credit for the production of oil and 
gas produced in Indian Country. This will certainly strengthen the 
trust responsibility to protect tribal trust lands and mineral 
resources.

V. Conclusion
    In closing, the Nation appreciates the opportunity to appear before 
this Committee and provide testimony on this extremely important 
subject. We look forward to working with the Committee to strengthen 
and enhance the Trust Responsibility.

    The Chairman. Thank you very much, Ms. Atcitty.
    Mr. Halbritter, in your testimony you stated that ``flawed 
implementation'' of the trust responsibility is where Tribes 
are most affected. What can Congress and the Administration do 
to improve implementation of the trust responsibility?
    Mr. Halbritter. Well, we are recommending that a review 
commission be established. One was in the past, but one that 
can investigate and be empowered to help understand this issue 
better.
    In our particular situation, local governments, State and 
local governments, contradict the intent of the way our 
protections and our treaties and the trust responsibility 
exist. And oftentimes the Government ignores our request, 
despite our treaty guarantees, to have the opportunity to be 
protected, the opportunity to be heard, the opportunity to 
appeal to the Federal Government. It is right in our treaties 
which as we know by the Constitution are the supreme law of the 
land.
    The Federal Government often, our position is often 
determined by their will, or lack of will, to involve 
themselves as a moderator when we are in conflict with State 
and non-Federal governments. And oftentimes, as we know, the 
facts determine the outcome of a case. And a lot of times our 
issues are overtaken by lawyers.
    And so, when the issue is shaped by the local courts, we 
are the minority in this Country. The locals will always be in 
the majority. They will always have the more popular will 
opposing us in a conflict. That is where the Federal trust 
responsibility is critical, to help moderate and alleviate the 
change in leverage in your relationship.
    Every case now that comes before this court that is 
alienated from Indian life, I mean, I do not know if any of 
these courts often really know what is going on in the 
communities and as a result what is decided in the courtroom is 
somewhat limited. Whereas the Federal Government has 
representatives that can visit Indian reservations, can talk to 
Indian people and get to the heart of the issue and help when 
our position is so impeded by the fact that we do not represent 
the majority where we are located. We are the minority. We are 
often picked on and vilified when there is an issue.
    And the media also plays into that as well. Sure, we do not 
expect Congress to be able to do anything about the media, but 
they can certainly have a role and they have an obligation 
under law and a duty by honor as well to work with Indian 
nations to resolve these issues. And that is our preferred 
choice. It is not to be in the courts but to be at a table 
where we can negotiate and discuss these things just like the 
original relationships were established by negotiation and 
treaty.
    The Chairman. Thank you very much.
    President Sharp, you are a member of the Commission on 
Indian Trust Administration and Reform that was created by the 
Department of Interior following the Cobell settlement. Can you 
describe what the end product will be for the Commission? And 
what impact you think that will have on Tribal governments and 
the Indian people?
    Ms. Sharp. Thank you for that opportunity and question, 
Chairman.
    We have had many discussions about our preliminary work, 
about organizing the Commission and certainly are looking at 
the goals of the Commission. The goals include providing a 
comprehensive evaluation of the trust services, management 
functions. We hope to deliver a very well thought out, a very 
well informed set of recommendations following a comprehensive 
evaluation.
    We have recognized that there is not going to be a single 
person that is going to have enough expertise to look at the 
entire system, that we are going to have to reach out to 
subject matter experts in leasing and various other topics that 
are going to require expertise.
    So, we hope to deliver not only a set of recommendations 
that is going to provide a roadmap for all to look at, how we 
can adjust, realign and redefine that relationship with the 
United States, but those recommendations are going to be based 
on a sound evaluative process, a very deliberative evaluative 
process, and a process that includes the direct engagement of 
Tribal leadership, Tribal organizations and individual 
allottees.
    We have an approach in which we are going to be reaching 
out to those in Indian Country . They have four hearings that 
are set to go out into the field, four listening sessions. And 
so, we are hoping that we can deliver not only a product that 
is going to be comprehensive but one that will be useful.
    And to your second question of what value will that have 
for Indian Country , we believe that if these recommendations 
and evaluation is Tribally driven, not Administratively driven, 
that there is going to be a vested interest in the outcome and 
Tribal leaders will be able to work into the, work in 
partnership with, the Commission. Recommendations are going to 
be real, they are going to be meaningful and they are going to 
make a difference in the future relationship that we have with 
the United States.
    The Chairman. Thank you very much.
    Vice-Chairman Baptiste, given the Department of Interior's 
recent efforts in settling long-standing trust mismanagement 
cases, what do you think the next step is to affirm the trust 
relationship between the Federal Government and Tribes?
    Mr. Baptiste. I thank you for that question. I believe 
that, you know, this sets a tone for further involvement in 
Tribes. It also evaluates and sets a standard that might guide 
those Tribes. And those individual Federal agencies, they have 
also implemented their own government-to-government 
capabilities to work with Tribes across the Nation.
    I think that the Nez Perce Tribe, in its own, we have our 
own government-to-government consultation process. I think a 
lot of the Tribes across the Nation would be able to develop 
their own, to be able to guide themselves. That way you can 
implement that when a Federal agency is developing a policy 
that concerns Tribes, all of the existing ones, the Department 
of Energy in itself has one and I think we work well with them.
    I think that this, this last go around will help set the 
tone for that, again, will help provide Tribes and push the 
momentum. I think the momentum that we are using right now, I 
think, will build, I think with your help, the Committee's 
help. I think that we can prioritize some of the Federal 
agencies' Indian policies to change and format with the working 
group that Ms. Sharp is a part of. I think that also will be 
helpful to try to provide some guidance for them.
    But they have to also be willing to come across and educate 
themselves to Indian policy and the Indian, I guess, how Tribes 
are operating and our point of view.
    The Chairman. Thank you, Mr. Baptiste.
    Shenan Atcitty, the Congress is committed to looking to the 
recent crisis at J.P. Morgan and the transactions that led to 
billions of dollars in losses to their shareholders. Congress 
and the shareholders are seeking transparency into how 
decisions were made, with the impact these decisions will have 
on shareholders and the industry.
    My question to you is, what correlation do you see in the 
Supreme Court's recent decision in the Jicarilla case?
    Ms. Atcitty. With the J.P. Morgan situation?
    The Chairman. Yes. Well, the idea is to access information. 
Yes.
    Ms. Atcitty. Well, I think the correlation is, with respect 
to the private beneficiary, I doubt that they are going to have 
to go to the Supreme Court to get access to records. And I 
think the correlation is a fairness one.
    You know, you have got a debacle of that level and 
certainly the shareholders are entitled to know how their, how 
decisions were made with respect to management of their trust 
assets. In our situation, unfortunately, the Supreme Court sees 
it differently. You know, we, too, are beneficiaries. Those are 
Tribal monies, not Federal monies. But we are not entitled to 
see how decisions were made because of this attorney-client 
claim. I think that probably the, you know, how it correlates 
and shows the unfairness of the situation.
    The Chairman. I see.
    Let me get back to Mr. Halbritter. When speaking on the 
trust responsibility, we focus on the impact it has on Tribes. 
In your testimony, you noted that a strong Federal Tribal trust 
relationship also benefits local communities. Can you expand on 
that thought?
    Mr. Halbritter. Well, yes. The fact that we are a minority 
politically in the community in which we live, the will of the 
community affects the leadership and how they relate to us. And 
our desire is to negotiate and work things out with the 
community because it is our legacy as Oneida people. We were 
allies in this Country in the Revolutionary War.
    But for example, the community does not always look at how 
much they benefit. We are the, in a 16 county upstate New York 
region, we are the largest employer. We have nearly 5,000 
people working for us in an area that is economically deprived. 
We put in about $1 billion in infrastructure and about $2 
billion in salaries and vendor and payroll in the local 
community. And yet, they still oppose us on every level that 
they possibly can along with the State. And it is largely 
political.
    The Federal Government, their trust relationship has always 
been in a position to help us balance the table when we are 
trying to have a discussion about resolving our issues. And now 
with the courts making decisions, the courts are making 
decisions eroding the sovereignty of Indian nations. They do 
not want to negotiate. They want everything to go to court and 
they are just gambling and believing that the courts are going 
to rule against the Indian nations as you hear about the legal 
case.
    The place for our people, we believe, is at the negotiating 
table, like we negotiated treaties, as sovereigns, as 
government-to-government. And that is what the trust 
responsibility and the years of having the Federal Government 
play such a prominent role is to not allow that to happen where 
the local governments and communities are eroding and 
conflicting with Indian nations. And we create great economic 
opportunity in the region.
    With the Federal Government, we can resolve some 
outstanding issues so that we can have a more peaceful 
existence for future generations.
    The Chairman. Thank you very much for that answer.
    Mr. Baptiste, in your testimony, you applaud the Government 
settlement of trust mismanagement cases but say that the larger 
question of the current state of the trust relationship between 
the Tribes and the United States is not addressed. How do you 
think the current status of the trust relationship can be 
addressed by the Administration and in Congress?
    Mr. Baptiste. Thank you. I believe, you know, the trust 
asset settlement, you know, like I said before, has provided 
the answer or provided a clean slate to work through. But I 
believe that it is through the true consultation process.
    I know there was a Memorandum and each Federal agency had 
an opportunity to submit their consultation process with 
Tribes. It is also the implementation of those consultation 
policies that, I think, will provide a success for Tribes. If 
they are not implemented properly and without, you know, the 
guidance of the Tribes, I think we will remain at the kind of 
juncture where we are at where we can, you know, either improve 
it or work with a broken system.
    I think that we all identify that there are flaws in the 
trust relationship. We are working through that. I think the 
Tribes have ultimate faith that it will continue and get 
better, we think, with the work of the Committee.
    With the Administration right now, we have an opportunity 
to better that relationship. But it, it lies within the hope of 
those implementations of those consultation policies and those 
individual Federal agencies and hopefully that those sister 
agencies will work together and collaborate so that a lot of 
them will not duplicate the same service and that they 
understand each other.
    Each Tribe has a different working relationship, or even a 
social or a need or a cultural economic need, and those will 
kind of drive how they operate with the Federal agencies. But, 
I think in the end it is just those policies, those individual 
Federal agencies that will help drive this and better our trust 
relationship.
    The Chairman. Thank you.
    President Sharp, in your testimony you noted that 
improvements are needed in department's self-governance 
program. What specific recommendations do you have for 
improving this program?
    Ms. Sharp. Yes. The self-governance program, as I 
mentioned, the original vision that Tribal leaders had for 
self-governance was an ability for us to freely determine our 
political, economic and social futures. We received block 
grants of dollars through compacts and were allowed the 
flexibility to adjust resources from education and natural 
resource and we have that flexibility, as I mentioned in my 
testimony, of being managers of Federal dollars.
    We do not have the freedom or ability to make fundamental 
decisions affecting our lands, our resources, our people 
outside of that framework that is based on this idea that we 
are somehow incompetent, that, you know, we have this 
dependency, this ward-guardian relationship.
    I will give you an example. When the Quinault Nation had 
worked on a comprehensive restoration effort for our salmon and 
our blue back stocks, another Federal agency took action that 
was directly not only not respecting our science that was based 
on Bureau of Reclamation Reports and other reports, but they 
took action that directly undermined our efforts.
    And so, the bureaucracies that we face within agencies that 
still, and it was mentioned by another panel, or by a fellow 
panelist here, that there needs to be some way of enforcing the 
relationship. When we are at odds, whether it based on science, 
whether it is based on policy, whether it is based on a value 
system, if there is a conflict we need to have a means by which 
we can come to the table as equal sovereigns.
    The United States does not enter into other countries to 
take unilateral action affecting resources, etc., and that same 
type of equality in a relationship with Indian nations must be 
respected. So, if we look to international law, if there is a 
dispute there is a three-step process of official talks, of 
negotiation. But by all means, those parties come to the table 
in equity. There is no ability to take unilateral action. And 
so, we need some means of enforcing and supporting our views 
and our position when it comes to implementation of that 
relationship.
    The Chairman. Thank you.
    I want to thank this panel for your answers to our 
questions. We may have further questions that we will place in 
the record and also from other Members as well.
    As you note, you know, my questions have been questions 
which are looking for answers as to how the Congress can make a 
difference. And as you know, I am looking at the Tribes to try 
to assess this and we will see what we can do to help you out 
on this because this is a huge, as I continue to say, trust 
relationship and a Carcieri fix is my high priority. And I 
think it will help resolve, you know, many problems that are 
there now. But we need to get all of the information we can. 
So, you know, help us try to bring that about.
    So, I want to say mahalo, thank you to you and all the 
other witnesses. Today's testimony provides for me and for the 
Committee a greater understanding of the trust relationship 
that exists between the Federal Government, the Tribes and the 
Indian people. And so, again, I thank you for helping us out on 
this and we will continue to work together to help bring this 
about.
    What is clear is that the trust relationship has existed, 
as you mentioned, since the formation of this Country and the 
first government-to-government contacts between the United 
States and the Indian Tribes. Even though the implementation of 
that trust relationship may change based on legal decisions, 
from Administration to Administration and from Congress to 
Congress, the trust responsibility endures. It is the 
obligation of Congress, the Administration and the courts to 
uphold the legal, moral and fiduciary responsibilities that are 
at the core of the trust relationship between the Federal 
Government and the Tribes.
    So, I look forward to continuing this dialogue with our 
witnesses at today's hearing and other interested parties and 
stakeholders. I also pledge my best efforts to keep the 
enduring principles embodied in the trust relationship at the 
forefront whenever this Committee conducts business on behalf 
of the Native peoples of the United States. And we will 
continue to strive to do that.
    So, again, mahalo. Thank you very much. Have a safe way 
home.
    Today's hearing is adjourned.
    [Whereupon, at 4:03 p.m., the Committee was adjourned.]

                            A P P E N D I X

Prepared Statement of Hon. Julie Kitka, President, Alaska Federation of 
                                Natives

























                                 ______
                                 
Prepared Statement of Hon. Leonard Masten, Chairman, Hoopa Valley Tribe

























                                 ______
                                 
  Prepared Statement of Hon. Edward K. Thomas, President, Tlingit and 
                     Haida Indian Tribes of Alaska 







                                 ______
                                 
 Prepared Statement of Hon. John Yellow Bird Steele, President, Oglala 
                              Sioux Tribe



















































                                  
