[Senate Hearing 113-213]
[From the U.S. Government Publishing Office]
S. Hrg. 113-213
NOMINATION OF VINCENT G. LOGAN TO BE SPECIAL TRUSTEE, OFFICE OF SPECIAL
TRUSTEE FOR AMERICAN INDIANS,
DEPARTMENT OF THE INTERIOR
=======================================================================
HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 11, 2013
__________
Printed for the use of the Committee on Indian Affairs
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COMMITTEE ON INDIAN AFFAIRS
MARIA CANTWELL, Washington, Chairwoman
JOHN BARRASSO, Wyoming, Vice Chairman
TIM JOHNSON, South Dakota JOHN McCAIN, Arizona
JON TESTER, Montana LISA MURKOWSKI, Alaska
TOM UDALL, New Mexico JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota MIKE CRAPO, Idaho
MARK BEGICH, Alaska DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii
HEIDI HEITKAMP, North Dakota
Mary J. Pavel, Majority Staff Director and Chief Counsel
Rhonda Harjo, Minority Deputy Chief Counsel
C O N T E N T S
----------
Page
Hearing held on December 11, 2013................................ 1
Statement of Senator Barrasso.................................... 4
Statement of Senator Cantwell.................................... 1
Statement of Senator Tester...................................... 27
Witnesses
Bighorse, Hon. Scott, Assistant Principal Chief, Osage Nation.... 2
Prepared statement........................................... 3
Logan, Vincent G., Nominee to be Special Trustee, Office of
Special Trustee for American Indians, U.S. Department of the
Interior....................................................... 4
Prepared statement........................................... 6
Biographical information..................................... 10
NOMINATION OF VINCENT G. LOGAN TO BE SPECIAL TRUSTEE, OFFICE OF SPECIAL
TRUSTEE FOR AMERICAN INDIANS,
DEPARTMENT OF THE INTERIOR
----------
WEDNESDAY, DECEMBER 11, 2013
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:00 p.m. in room
628, Dirksen Senate Office Building, Hon. Maria Cantwell,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
The Chairwoman. The Senate Indian Affairs Committee will
come to order.
We are here today on two different issues. One is the
nomination of Vince Logan to be the Special Trustee for
American Indians, U.S. Department of the Interior. Mr. Logan
was nominated on February 27th of this year by President Obama
and the full nomination packet was received by the Committee on
July 23rd. The American Indian Trust Fund Management Reform Act
that created the position of Special Trustee was passed in
1994, and is a response to concerns regarding the Department of
Interior's trust management practices. These concerns include
the inability to provide accounting of balances to
beneficiaries, a lack of trained staff and an inadequate record
of keeping systems.
Currently, the Department of Interior holds 56 million
acres of land in trust for tribes and individuals, and the
Department manages approximately $4.4 billion in trust funds,
generated by leases, resource development royalties, use
permits, judicial settlement and judgments. In fiscal year
2012, almost $500 million was collected for 387,000 individual
Indian accounts and nearly $1.4 billion was collected for the
250 tribal accounts.
President Obama's Administration has made significant
progress in improving the management of Indian assets. This
includes settling lawsuits with over 40 tribes, and most
notably, the final settlement agreement in the 16-year long
Cobell v. Salazar litigation.
But despite these achievements, much work remains to be
done. This nomination hearing is about discussing that
remaining work with Mr. Logan and his plans to continue making
progress on behalf of Indian Country. The Committee is also
interested in the Commission on Indian Trust Administration and
Reform established by then-Secretary Salazar. I am sure the
Commission's findings will have a number of recommendations
that the Secretary will want to implement. And these changes
will likely rely on the leadership that will be provided by the
Special Trustee.
If confirmed, Mr. Logan would be the fourth person to hold
the position of Special Trustee for American Indians. We look
forward to hearing his ideas on how to improve the trust
service that the Federal Government provides to Indian Country.
Hopefully we can finally move past the need for trust reform
and focus efforts solely on trust asset management and
financial growth for tribal and individual beneficiaries.
So now I would like to see if my colleague, Senator Tester,
has any opening statements. I know my colleague, the Vice
Chairman, is probably on his way. But maybe before that we
would allow the Honorable Scott Big Horse, Assistant Principal
Chief of the Osage Nation, who is here to introduce our
nominee, say a few words.
STATEMENT OF HON. SCOTT BIGHORSE, ASSISTANT PRINCIPAL CHIEF,
OSAGE NATION
Mr. Bighorse. Thank you, Madam Chairwoman. Vice Chairman
Barrasso isn't here, and I want to say good morning, or
afternoon, to Mr. Tester, members of the Committee. Thank you
for the opportunity to appear before this Committee to
introduce Vincent Logan, one of our Osage tribal members, to
this Committee and the United States Senate.
I am Scott Bighorse, the Assistant Principal Chief of the
Osage Nation. It is an honor for me to be here. Principal Chief
John Red Eagle was unable to be here because of business back
home. We have had a lot of tragedies and a lot of deaths here
in the past couple of months. But he does ask that his letter
of support be entered into the record on behalf of Mr. Logan.
Let me first give you some background on the Osage Nation,
because Vince Logan's story is a story of the Osage Nation and
its people. The Osage Nation is a sovereign Indian nation based
in Pawhuska, Oklahoma. Our current homeland, the Osage
Reservation, is about one and a half million acres located in
northeastern Oklahoma. It is contiguous with Osage County,
Oklahoma, realigned into what is our last reservation from our
former reservation in Kansas and our aboriginal territories
that covered almost all of Missouri, parts of Arkansas, Kansas
and Oklahoma.
The Osage Nation has signed several treaties with the
United States and Congress has passed several special statutes
that addressed our homelands and rights as a tribal nation. We
came to the new reservation in Oklahoma only after one of our
leaders, Wa Tenka, first visited the land and came back to our
people and told them that there is something in the land that
would keep our elders and children from starvation. As you
know, many tribes were moved into Oklahoma and were on the
brink of starvation. Our people relied on Wa Tenka and agreed
to move to the Indian territory.
Many of our people have interpreted Wa Tenka's prophecy to
mean the vast oil reserves that were discovered beneath the
surface of the land after we arrived to our reservation. Our
leaders today understand that it may have been the oil that
they were talking about, but it is truly the sovereignty that
we hold within our reservation.
Madam Chairwoman, Vince Logan is a direct descendant of Wa
Tenka. Mr. Logan understands the trust relationship that both
the Osage Nation and Osage individuals have with the United
States Government. He understands that our Nation and our
people have come to rely on this trust relationship and we have
acted to enforce it when necessary.
Vince Logan also understands that tribal governments are
sovereigns that make laws and are self-governing and a sound,
productive trust relationship means listening to the leaders of
the tribal governments, to the individual Indians who are
directly impacted by the trust relationship. He also
understands that these trust systems have failed Indian Country
on many occasions, and the systems need reform.
Vince Logan, a man whose family primarily comes from the
Zonzoli district of the Osage Reservation, is well qualified to
serve as the special trustee. His professional background as an
attorney in investment management would serve him well in this
position. This office has been without a Special Trustee for
far too long. As the Trust Commission continues its work and
decisions will be made about reforming the Federal trust system
that has been broken for decades, individual Indians need a
leader and an expert that is willing to listen and act for the
betterment of Indians and Indian tribes.
Madam Chairwoman, the Osage Nation believes that Vince
Logan is the right leader and the right person for this
challenge. I strongly encourage this Committee to move this
nominee forward and for the full Senate to confirm him as
Special Trustee for American Indians.
[The prepared statement of Mr. Bighorse follows:]
Prepared Statement of Hon. Scott Bighorse, Assistant Principal Chief,
Osage Nation
Chairwoman Cantwell, Vice Chairman Barrasso, Members of the
Committee, thank you for the opportunity to appear before this
Committee to introduce Vincent Logan, one of our Osage tribal members,
to this Committee and the United States Senate. I am Scott Bighorse,
the Assistant Principal Chief of the Osage Nation, and it is an honor
for me to be here. Principal Chief John Red Eagle is unable to be here
because of business back home, but he asks that his letter of support
be entered into the record.
Let me first give you some background on the Osage Nation, because
Vince Logan's story is a story of the Osage Nation and its people.
The Osage Nation is a sovereign Indian nation based in Pawhuska,
Oklahoma. Our current homeland, the Osage Reservation, is about 1.4
million acres located in Northeastern Oklahoma and is contiguous with
Osage County, Oklahoma. We arrived into what is our last reservation
from our former reservation in Kansas, and our aboriginal territory
covers parts of Missouri, Arkansas, Kansas, and Oklahoma. The Osage
Nation has signed several treaties with the United States and Congress
has passed several special statutes that address our homelands and
rights as a tribal Nation.
We came to the new reservation in Oklahoma only after one of our
leaders, Wah-Ti-An-Kah, first visited the land and came back to our
people and told them that there is something in the land that would
keep our elders and children from starvation. Our people relied on Wah-
Ti-An-Kah and agreed to move to the Indian Territory.
Many of our people have interpreted Wah-Ti-An-Kah's prophecy to
mean the vast oil reserves that were discovered beneath the surface of
the land after we arrived to our reservation. Our leaders today
understand that he may have been talking about the sovereignty that is
based in our homeland.
Madam Chairwoman, Vince Logan is a direct descendant of Wah-Ti-An-
Kah. Vince Logan understands the trust relationship that both the Osage
Nation and Osage individuals have with the United States. He
understands that our Nation and our people have come to rely on this
trust relationship, and we have acted to enforce it when necessary.
Vince Logan also understands that tribal governments are sovereigns
that make laws and are self-governing, and a sound, productive trust
relationship means listening to the leaders of the tribal governments,
to individual Indians, whose lives are directly impacted by the trust
relationship.
He also understands that these trust systems have failed Indian
country on many occasions, and the systems need reform.
Vince Logan, a man whose family primary comes from the Zon-Zo-Lin
District of the Osage Reservation, is well qualified to serve as the
Special Trustee. His professional background as an attorney and
investment management would serve him well in this position.
This Office has been without a Special Trustee for far too long. As
the Trust Commission continues its work and decisions will be made
about reforming the federal trust systems that have been broken for
decades, individual Indians need a leader and an expert that is willing
to listen and act for the betterment of Indians and tribes.
Madam Chairwoman, the Osage Nation believes that Vince Logan is the
right leader and the right person for this challenge, and I strongly
encourage this Committee to move this nominee forward and for the full
Senate to confirm him as Special Trustee for American Indians.
The Chairwoman. Thank you, Chief Bighorse. Thank you so
much for being here and for that introduction.
Now I want to turn to the Vice Chairman of the Committee
for any comments he would like to make before we turn to the
witness.
STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Thank you, Madam Chair. I will just have
my statement put into the record. I want to congratulate Mr.
Logan on his nomination and look forward to working with him
during this nomination process. I will have questions for Mr.
Logan.
Thank you, Madam Chairwoman.
The Chairwoman. Thank you.
Mr. Logan, welcome. Thank you for your willingness to
serve. It is a pleasure to have you here before the Committee
today. Go ahead with any comments or introductions you might
want to make.
STATEMENT OF VINCENT G. LOGAN, NOMINEE TO BE SPECIAL TRUSTEE,
OFFICE OF SPECIAL TRUSTEE FOR AMERICAN
INDIANS, U.S. DEPARTMENT OF THE INTERIOR
Mr. Logan. Thank you, Madam Chairwoman, Vice Chairman
Barrasso, Senator Tester. My name is Vincent Logan and my
Osage, or Wah-zha-zhe, name is Hunka-zhe-na-zhe. I am honored
to appear before you today seeking your confirmation for my
nomination to serve as Special Trustee for American Indians.
As a member of the Osage Nation, I am honored to have
Assistant Principal Chief of the Osage Nation, Scott Bighorse,
here to introduce me. Thank you, Assistant Chief. And with me
today is my sister, Jeanine Logan, who traveled here from
Oklahoma, and my partner, Dr. Steven Lieberman, who came down
from New Jersey.
Jeanine is an attorney with the Social Security
Administration's Office of Disability Adjudication and Review
in Oklahoma City and also serves as Associate Justice on the
Osage Nation Supreme Court. Steven is Chief of Staff of the
Veterans Affairs New Jersey Health Care System and has received
numerous awards and commendations for his service to our
heroes.
Jeanine and Steven, through their many years of public
service, have guided me in my professional career, and I would
like to thank them both here today.
I was born in Pawnee Indian Hospital in Oklahoma, raised in
Norman, but have spent the majority of my life as a New Yorker.
I received my education at Oklahoma State University, the
University of Oklahoma College of Law and Columbia University
School of International and Public Affairs. I come from a
family dedicated to serving the public with military service
and government service, which makes me both proud and humble.
My parents served this Country during World War II and are
interred not far from here at Arlington National Cemetery. My
father, Oscar Logan, Jr., joined the United States Marine Corps
and fought with the Fifth Division in Iwo Jima, where he was
critically wounded. He was awarded the Purple Heart for his
combat service. My mother, Della Morrell Logan, served in the
United States Army during World War II, as a nurse stationed
here in Washington.
I am proud of my career in public service, which began with
the State of Oklahoma Attorney General's Office in the Criminal
Division. I also worked in the United States Department of
Justice Antitrust Division here in Washington. I was also a
corporate finance lawyer in New York for many years. In 2006, I
moved to the asset side of the balance sheet when I became a
financial advisor. I am currently an investment consultant
working for tribal nations in economic development.
My career, experience, and expertise are germane to the
Office of Special Trustee for American Indians and to the
position for which I am nominated in three distinct areas: law,
investments, and of course, Native Americans. I spent 15 years
as a corporate lawyer in New York specializing in finance. But
I always sought a career working with Native Americans and
Indian Country. I was at the Federal Indian Bar Conference one
year and tribal leaders were asking me about assets and pricing
on financial products. Frankly, I couldn't answer them at the
time, I didn't know enough.
But fortunately for me, I worked at Schulte Roth and Zabel
in New York, which is one of the preeminent investment
management law firms in the world. I spoke to partners about my
concerns about tribal investing. It became clear at that time
that I needed to learn the world of investments. I was picked
to be part of the Merrill Lynch private banking and investment
group, where I received excellent schooling and mentoring in
key areas such as investment policy preparation, asset
allocation, performance measurement, risk analysis and, above
all, the fiduciary duties for investment advisors.
However, and this is what I consider to be the most
fulfilling aspect of my professional career, I have been part
of the investment education movement in Indian Country. I have
committed my business and offered my professional services to
helping tribes learn the business of investments. My business
value proposition is this: tribes should look at the university
endowment model and even look at some of the sovereign wealth
strategies, but only after edification in boardsmanship and
governance, the adoption of investment guidelines and the
building of internal capacity and capabilities.
Further, and this has been equally fulfilling, I am
committed to investment education for individuals, and
particularly tribal youth. I have spent many years in Indian
Country speaking to children, to Native kids candidly about
money, savings and careers.
The American Indian Trust Fund Management Reform Act of
1994 created the Office of Special Trustee to improve the
accountability and management of Indian funds held in trust by
the Federal Government. As trustee, if I am confirmed, I will
oversee the management of trust assets using my experience and
knowledge to the best of my ability, bearing in mind that with
respect to investments, there are a multitude of outside
factors, many of which are organic and ever-changing.
Furthermore, as to the trust principles of the Secretary,
as stated in the departmental manual and published on the OST's
website, if I am confirmed for this position, I will carry out
my responsibilities as the Special Trustee with the duty of
care of the highest level of competence, professionalism and
thoroughness. If I am confirmed, I will act solely in the
interest of the beneficiaries, and this applies to all of the
obligations, duties and responsibilities that the OST has been
given, granted and assigned.
Madam Chairwoman, Vice Chairman Barrasso and Senator
Tester, thank you for considering my nomination to this
important position. I look forward to working with you and I am
happy to answer any questions you may have.
[The prepared statement and biographical information of Mr.
Logan follow:]
Prepared Statement of Vincent G. Logan, Nominee to be Special Trustee,
Office of Special Trustee for American Indians, U.S. Department of the
Interior
Thank you, Madam Chairwoman, Vice-Chairman Barrasso, and Members of
the Committee. My name is Vincent Logan, and my Osage, or Wah-zha-zhe,
name is Hunka-zhe-na-zhe. I am honored to appear before you today
seeking your confirmation for my nomination to serve as Special Trustee
for American Indians. As a member of the Osage Nation, I am honored to
have Assistant Principal Chief of the Osage Nation Scott Bighorse here
to introduce me. Thank you Assistant Chief.
With me today are my sister, Jeanine Logan, who traveled here from
Oklahoma, and my partner, Dr. Steven Lieberman, who came down from New
Jersey. Jeanine is an attorney with the Social Security
Administration's Office of Disability Adjudication and Review in
Oklahoma City. Jeanine also serves as Associate Justice on the Osage
Nation Supreme Court. Steven is Chief of Staff for the Veterans Affairs
New Jersey Healthcare System. Steven has received numerous awards and
commendations for his service to our heroes. Jeanine and Steven,
through their many years of public service, have been an inspiration to
me and have provided me guidance in my professional career, and I would
like to thank them both here today.
I was born in Pawnee Indian Hospital in Oklahoma, raised in Norman,
but have spent the majority of my life as a New Yorker. I received my
education at Oklahoma State University, the University of Oklahoma
College of Law, and Columbia University's School of International
Affairs.
I come from a family dedicated to serving the public, both in
military service and government service, which makes me both proud and
humble. My parents served this country during World War II and are
interred not far from here at Arlington National Cemetery. My father,
Oscar Logan Jr., joined the United States Marine Corps and fought with
the Fifth Division on Iwo Jima where he was critically wounded. He was
awarded the Purple Heart for his combat service. He later worked for
the Indian Health Service and for the Osage Nation. My mother, Della
Morrell Logan, served in the United States Army during World War II as
a nurse stationed here in Washington. After the war and while raising a
family, she worked with State of Oklahoma Tax Commission and the Indian
Health Service.
As for my other siblings, my brother Joe, served as a Captain in
the United States Marine Corps, and retired from a career in public
service with the State of Oklahoma. My sister Grace also retired from
public service with the State of Oklahoma. My brother Kyle is a public
high school teacher in Oklahoma City.
I am proud of my career in public service, which began after I
graduated from law school and went to work for the State of Oklahoma
Attorney General's Office in the Criminal Division. During the Clinton
Administration, I worked in the United States Department of Justice,
Antitrust Division, here in Washington.
Since leaving the Department of Justice I have worked in the
private sector. I was a corporate finance lawyer for many years in New
York. In 2006 I moved to the asset side of the balance sheet when I
became a financial advisor. I am currently an investment consultant
working with tribal nations, not only in investment matters, but also
in economic development. My career, experience and expertise are
germane to the Office of the Special Trustee for American Indians and
to the position for which I am nominated in three distinct areas: law,
investments, and, of course, Native Americans.
Let me begin by telling a brief story about how I came to the world
of finance. I moved to New York to attend Columbia University. I
arrived in the Big Apple full of optimism, a bit of fear and anxiety,
and seeking a career in the international or diplomatic arena. But as
they say, the best laid plans . . .. The wheels turned in another
direction, and turned very fast for me. I was fortunate enough to be
hired by law firm while in school and, as fate would have it, I was
assigned to the shipping division. Being a son of the plains, and never
on the ocean, I often used the word `boats', to the chagrin of my
colleagues. Thus began my career in finance.
I spent fifteen years in corporate law in New York, specializing in
finance, mainly aircraft, shipping, and big ticket equipment. While I
found that work very rewarding, I was always a bit disappointed that my
career didn't involved Indian Country, and there was certainly no way
of having a successful legal career in New York with a tribal business
at that time.
What happened next is what leads me to be seated in front of you
today. I was attending the annual Federal Bar Indian Law Conference,
and was at the luncheon. I was seated next to a tribal leader and he
told me about his tribe's investments with a local bank. He said they
didn't know anyone by name at the bank and certainly didn't know how
the money was invested. He asked me if I knew anything about
investments. And by coincidence, another tribal leader at the same
table overheard our conversation and asked me if a fee of one hundred
and fifty basis points was high, or was that usual for a tribal
account. I couldn't answer them--and that is what I told them.
I went back to New York puzzled, perplexed, call it what you will,
by that conversation but definitely focused on finding out more about
the investment industry, not because of intellectual curiosity, but
because I could see on those men's faces that they were troubled by how
the tribe's reserves were being managed.
Fortunately, the law firm at which I then worked, Schulte Roth &
Zabel, was and remains the pre-eminent investment management law firm
in the world. I spoke to partners about my concerns with tribal
investing and it became clear to me that if I wanted to be part of the
tribal investment world, I would need to leave the legal world and move
to the world of investment management.
I needed training and licensing in the securities industry. I was
picked to be part of the Merrill Lynch Private Banking & Investment
Group program where I received excellent schooling and mentoring in key
areas such as investment policy preparation, asset allocation,
performance measurement, risk analysis, and above all, fiduciary duties
for investment advisors.
I have spent the last eight years in this industry and have worked
with many clients, including several tribal nations, varying from small
accounts to large tribal reserve funds. I have helped tribal leaders
draft investment guidelines, select asset managers, collateralize
tribal funds for casino expansion projects, and have provided general
asset guidance. Over the years, I have heard of instances of credulity
in investment decisions by some tribal officials and unscrupulous
business practices, but personally, I have not witnessed that. Rather,
I have seen investment decisions made with full understanding of the
product and associated risk. That is the business approach I was taught
and that is what I practice.
As it turns out, after years in this industry, I have found that I
am more quantitative and analytical in nature, which I have put to good
use working for tribal nations. The investment industry is very
complex, with many levels of expertise required, and the complexities
and personalities are difficult to manage unless one has an advisor who
puts his or her clients' interests first. I know I have always done so.
However--and this is what I consider to be the most fulfilling
aspect to my professional career--I have been part of the investment
education movement in Indian Country. I have committed my business and
offered my professional services to helping tribal leaders learn the
business of investments. My business value proposition is this: tribes
should look to the university endowment model in handling their
investments, and even look at some of the sovereign wealth fund
strategies, but only after edification in boardsmanship and governance,
the adoption of investment guidelines, and building internal capacity
and capabilities.
Further--and this has been equally fulfilling--I am committed to
investment education for tribal individuals and tribal youth. Having
spent years throughout Indian Country I am acutely aware of the
challenges our tribal people face, particularly our children. I speak
to Native kids candidly about money, savings, and careers. I developed
my own program called ``Your First Paycheck'' based on my own
experience as a kid growing up in Oklahoma and getting my first
paycheck through the Comprehensive Employment and Training Act program.
A lack of financial guidance for youth, either in Indian Country or
elsewhere in the United States, exacerbates many of the social ills we
see. We also have a lack of guidance at home, or the ``dinner table
talk'' as I call it, particularly in Indian Country, when parents can
teach their children about money, work, and savings. Absent that, it is
imperative--no, it is our duty as Indian Country investment
professionals--to support and participate in financial education for
tribal leaders and individuals. Our future is at stake, and the lack of
investment knowledge will limit our capacity to build self-sustaining
communities.
As I mentioned earlier, I am a member of the Osage Nation. My
ancestors include hereditary Chief William Penn and Way-Hu-Hah-Kah,
both signers of the Constitution of the Great and Little Osages in
1881. My great, great grandfather, Frank Corndropper, was a member of
the original Osage Tribal Council and my ancestors have been a part of
the Osage leadership since that time. Another ancestor is legendary
Chief Wah-Ti-An-Kah, whose leadership and vision was critical to my
people moving to Oklahoma.
The discovery of oil under our reservation, and the resultant
effects on our people and our land, are well-documented. The fact that
the Osage mineral estate was put in trust in 1906, with the United
States as Trustee, has to be considered one of the most important
events in the tribal/federal relationship because of the shear
magnitude of the wealth that was generated. Hundreds of millions of
dollars in revenue have been distributed to the Osage people over the
past hundred years or so, and billions more remain untapped. The Osage
Mineral Trust is just one part of the heritage of my Osage people, but
it's indisputably what we are most known for and what garners the most
attention. The Osage people are well-aware we are inexorably linked to
the United States because of this special trust relationship, as are
many other tribal communities.
There is certainly no need to discuss the importance of the special
trust relationship between the United States and the various tribal
nations, as this has been much discussed in this chamber and before
this esteemed Committee, and it is, obviously, the reason we are here
today. Let me merely state that I am well aware of the importance of
the trust relationship and I would be most honored, if confirmed, to
serve as the Special Trustee for American Indians.
I do have a brief personal story about this special relationship.
My first experience in hearing of the ``trust'' was in the 1960s when I
went with my parents to the Osage Agency regarding an account issue. I
recall meeting the Field Solicitor and hearing them discuss monies and
accounts. Such was my introduction to this relationship. Furthermore, I
have been a shareholder in the Osage Mineral Trust since 1986. As such,
I'm acutely aware of the special relationship between the Osages, the
United States vis-a-vis the Department of the Interior, as Trustee, and
the Office of the Special Trustee for American Indians, or the ``OST''
as it's called.
As for the history of the OST, I don't believe it is necessary to
discuss in detail the efforts of the late Elouise Cobell or discuss the
Cobell litigation and settlement, or the Osage Trust Case or any other
tribal trust cases. Suffice it to say that these matters are well-
documented and have been a part of the Indian Country dialogue for many
years.
What I would like to consider is the OST going forward. The
American Indian Trust Fund Management Reform Act of 1994 created the
OST to improve the accountability and management of Indian funds held
in trust by the Federal Government. As trustee, the Department of the
Interior has the primary fiduciary responsibility to manage both tribal
trust funds and Individual Indian Money accounts.
One of the Secretary's trust responsibilities is to protect and
preserve Indian trust assets. If confirmed as Special Trustee for
American Indians, I will oversee the management of the trust assets
using my experience and knowledge to the best of my ability, bearing in
mind that, with respect to investments, there are a multitude of
outside factors to consider, many of which are organic and ever
changing.
Going back to my training at Merrill Lynch, it is said that the
first principle of investing is capital preservation and the foremost
risk to an investor is inflation. These remain the basics of investing
and this is the starting point industry-wide and certainly part of my
investment approach. If confirmed, I will protect and preserve Indian
trust assets from loss, damage, or depletion.
Furthermore, as for the trust principles of the Secretary, as
stated in the Departmental Manual and published on the OST's website,
if I am confirmed for this position I will carry out my
responsibilities as the Special Trustee with a duty of care of the
highest level of competence, professionalism, and thoroughness. I will
act solely in the interest of the beneficiaries and this applies to all
of the obligations, duties, and responsibilities that the OST has been
given, granted, and assigned. And I will work with and support the
efforts of the Secretarial Commission on Indian Trust Administration
and Reform.
Madam Chairwoman, Vice-Chairman Barrasso, and Members of the
Committee, thank you for considering my nomination to this important
position. I look forward to working with you and I am happy to answer
any questions that you may have.
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The Chairwoman. Thank you, Mr. Logan. Again, thank you and
welcome to your family that is here with you today.
Obviously, after 20 years of reforms and litigation, do you
have recommendations for Congress on what would help the
Department carry out its trust responsibilities?
Mr. Logan. Thank you, Senator, for that question. Obviously
that is important to Native Americans, it is important to the
United States. The fiduciary duty standard of care that is
outlined by Congress in the Act is so important to all of us
that I fully intend, if I am confirmed, to carry out those
fiduciary duties to the highest level that I know and that I
can, using my professional experience.
I hope, and it is my desire to make sure that the Office of
Special Trustee, if I am confirmed, continues with its work and
we all understand that the fiduciary trust relationship is
important to Native Americans and to the beneficiaries and
tribal beneficiaries.
The Chairwoman. What of the buyback program? How would you
use the buyback program to help manage the trust assets?
Mr. Logan. Thank you for that question. I know that
question comes up often. It is important to Native Americans
and to me personally. I must say that I am not a part of,
obviously, Interior yet. A lot of the information is
proprietary, and I wasn't able to see exactly how the OST would
relate to the buyback program and, therefore, I am not quite
familiar with the specific job tasks assigned to the OST and
the land buyback program.
But if I am confirmed, I am happy to learn more and look
forward to working with you on that issue.
The Chairwoman. Why do you want to have this position? What
interests you in this position?
Mr. Logan. When I first had discussions about this
position, the part that caught my eye was financial education.
That is in the mandate, and it is in the act as Congress put
forth. As I said in my opening statement, that is a passion of
mine, financial education, not only on the institutional side,
with the tribal boards and tribal investment boards, but the
real work is with children and Native youth. That is ultimately
the future of our people.
It is clear that the Office of Special Trustee, while there
are fiduciary duties to the beneficiaries that are so
important, part of the mandate is also financial education. I
know that that is the thing that caught my attention, and that
is what I am seeking here today, if I am confirmed, to work on
that to the best of my ability. Ultimately that is part of the
doctrine of self-governance and of the trust relationship.
The Chairwoman. But you are aware of the huge
responsibility and the litigation that has preceded you.
Mr. Logan. Certainly, Senator. I am an individual account
holder myself. And I have been following the trust relationship
since I was a child. The first time I visited with my parents
to the Osage Agency was in the 1960s. I remember my father
talking to the tribal and department officials at the time
about his account and lease monies. So frankly, I have been
aware of it a long time. And I respect all the work that has
been put forth to date, and I am certainly well aware of the
Cobell settlement.
But for now, what I am focused on in this position is the
current Act as it stands, and fulfilling my fiduciary duties
and obligations in the current Act.
The Chairwoman. Okay. Vice Chairman Barrasso, do you have
any questions?
Senator Barrasso. I do, thank you very much, Madam
Chairwoman.
The Cobell settlement, which we are all well aware of, the
Committee has spent a lot of time on it, established a $1.9
billion fund for the land buyback program, you are familiar
with that, the purpose to purchase and consolidate these
fractional interests in trust lands. The programs can require
appraisals, carried out by the Office of Special Trustee. And
there can be over 90,000 tracts of this fractionated land.
It is going to take some time and it could be costly to put
this all together. So I am just wondering what kind of a role
you would see tribes having in assisting in the appraisals,
conducting the appraisals and help there, and if you do see a
role at all.
Mr. Logan. Thank you for that question, Senator. As an
account holder myself and a member of the Osage Nation, the
role that the tribal community can put forth is through
leadership and participation and consultation. The local
communities know the land well, that is true for the Osage and
I am sure that is true around the Country and in your State as
well, and for your constituents.
As I said earlier, I am aware of the appraisal piece to the
Office of Special Trustee, but beyond that, I haven't really
lifted the hood and taken a peek in there to see exactly how it
is going to work. But I am here to say that I am eager to learn
more.
Senator Barrasso. You said the things that you knew a lot
about you can bring to the table, law, investment and Native
American issues. As we try to grapple with all of this, do you
see different levels in terms of participation, of tribal
financial literacy as you go from tribe to tribe and try to
make some decisions?
Mr. Logan. Yes. I have seen that in my career. As an
institutional advisor, I have experienced tribes that were
further down the road, that is for certain, they had
established investment committees. We had, in my business,
directed our efforts toward bringing those up to speed with
traditional institutional advisory levels. That would be
adoption of investment guidelines and plans.
But the majority of it, that was not the case. The
investments were handled just locally, by a local financial
advisor. And coming from New York and with institutional
background, it was somewhat challenging to move the ball toward
more institutional investments.
But I will say one thing. Every time I was out there, and I
visited tribes in your State, in all three States, in fact, it
was possible, I did see people, no one was against it, they
always said yes, but we need help. As a small business owner,
it was not possible to provide those kinds of resources, but I
know it is possible.
Senator Barrasso. In terms of other things that could be
possible, just your thoughts on this, this was a response to
the Committee questionnaire to you. You noted that restoring
the trust of beneficiaries is a key challenge for the Office of
Special Trustee. Possible, but I am just going to ask you
specifically, because you cited the Office's litigation
history, and the law is something that you know about, as a
reason for some of these concerns and the loss of trust that
you referred to in your written questions.
How do you intend to try to restore the trust and the
confidence for the beneficiaries?
Mr. Logan. Thank you for that question. Of course, when I
wrote that, I was coming as an individual account holder. And
my experience, with the Office of Special Trustee, was quite
good. Personally I saw appraisals, I called the trust
beneficiary call center twice and had immediate responses and
satisfaction.
But I know that a lot of the other individual account
holders, that was probably not their experience.
But I would say this, trust has to be earned. That is true
in all businesses and in government. It comes through and is
driven through leadership. That is why I am here before you
today. Not only if I am confirmed to be the trustee, I will
also be an advocate for and on behalf of the beneficiaries, and
in turn, I will work to gain their trust as their trustee.
Senator Barrasso. Thank you. Thank you, Madam Chairwoman.
The Chairwoman. Senator Tester, any questions for this
witness?
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Yes, very quickly.
You are a smart guy, first of all. Thank you for being
willing to serve.
From the 30,000 foot level, tell me what your definition of
the trust relationship is. A lot of people in Congress aren't
even aware that there is a trust relationship. So from 30,000
feet, tell me what your definition of that relationship would
be.
Mr. Logan. Thank you for that question. I am going to speak
as an Osage. The Assistant Chief laid out the history of our
people. And that relationship between the Osage and the United
States Government is what I consider one of the most important
relationships there is.
It wasn't a matter of trust in the sense of a private
sector or trust company.
Senator Tester. Different kind of trust.
Mr. Logan. Right. It is a matter of that things were being
done on your behalf, that the land was being taken care of,
that whatever the actions of the Federal Government were being
done, they were being done properly and they were being done
professionally. That was in fact, for many in the Native
American community, that was lost, you are absolutely right.
You asked about what I see from above. I can tell you have
that as a professional, it is difficult for me to look at the
history as an investment professional and as an attorney and
not know that there was a loss of trust. It is just going to be
very difficult to regain that trust.
But I will say that I am an optimist. I am an optimist by
nature. And looking at it through one lawyer eye and one
investment professional eye, I know it is possible, as I said.
But no doubt it is clear, through the Cobell litigation that
has been discussed in this room many times, it is going to be
difficult.
Senator Tester. Yes, and that is what the next hearing is
going to be about. You said something that was very important
in that the local tribes knew the value of the land better than
anybody. I think we ought to be taking into consideration, you
ought to be looking to them for help. I know you are not long
on staff, anyway, so it might be an opportunity to offload some
of those duties, and hold them accountable in the process.
Thank you, Madam Chair.
The Chairwoman. Thank you. That concludes this hearing.
Again, Mr. Logan, we hope to move your nomination very
quickly here and get you working toward resolving many, many
issues. This part of the hearing is adjourned.
[Whereupon, at 2:25 p.m., the Committee proceed to other
business.]