[Congressional Record Volume 142, Number 115 (Wednesday, July 31, 1996)]
[Senate]
[Pages S9316-S9317]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   REPEAL OF TRADING WITH INDIANS ACT

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the Senate 
now proceed to the consideration of H.R. 3215 which was received from 
the House.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (H.R. 3215) to amend title 18, United States Code, 
     to repeal the provision relating to Federal employees 
     contracting or trading with Indians.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the bill.


                    trading with indians act repeal

  Mr. KYL. Mr. President, I rise in very strong support of this 
legislation, H.R. 3215, to repeal the Trading with Indians Act. I would 
note that the Senate has twice approved measures to repeal this 19th 
century law--in November 1993, and again last October as part of a bill 
making technical corrections in Indian laws.
  Mr. President, I want to begin by thanking the chairman of the Indian 
Affairs Committee, John McCain, who joined me in sponsoring the Senate 
companion bill, S. 199, and who encouraged his committee to incorporate 
it into last year's technical corrections measure. I also want to 
commend Congressman J.D. Hayworth for championing the legislation in 
the House on behalf of his native American constituents. Without his 
active support, it is safe to say that the House would not have acted 
on the measure this year.
  When the Trading with Indians Act was enacted in 1834, it had a very 
legitimate purpose: to protect native Americans from being unduly 
influenced by Federal employees.
  But, a law that started out with good intentions more than a century 
ago has become unnecessary, and even counterproductive, today. It 
established an absolute prohibition against commercial trading with 
Indians by employees of the Indian Health Service and Bureau of Indian 
Affairs. The problem is that the prohibition does not merely apply to 
employees, but to family members as well. It extends to transactions in 
which a Federal employee has an interest, either in his or her own 
name, or in the name of another person, including a spouse, where the 
employee benefits or appears to benefit from such interest.
  The penalties for violations can be severe: a fine of not more than 
$5,000, or imprisonment of not more than 6 months, or both. The act 
further provides that any employee who is found to be in violation 
should be terminated from Federal employment.
  This all means that employees could be subject to criminal penalties 
or fired from their jobs, not for any real or perceived wrongdoing on 
their part, but merely because they are married to individuals who do 
business on an Indian reservation. The nexus of marriage is enough to 
invoke penalties. It means, for example, that an Indian Health Service 
employee whose spouse operates a small business on a reservation could 
be fined, imprisoned, or fired. It means that a family member could not 
apply for a small business loan without jeopardizing the employee's 
job.
  The legislation before us today will correct that injustice without 
subjecting native Americans to the kind of

[[Page S9317]]

abuse that prompted enactment of the law 160 years ago. The protection 
that the Trading with Indians Act originally offered can now be 
provided under the Standards of Ethical Conduct for Government 
Employees. The intent here is to provide adequate safeguards against 
conflicts of interest, while not unreasonably denying individuals and 
their families the ability to live and work--and create jobs--in their 
communities.
  Both Health and Human Services Secretary Donna Shalala and Interior 
Department Assistant Secretary Ada Deer have expressed support for the 
legislation to repeal the 1834 act. Secretary Shalala, in a letter 
dated November 17, 1993, noted that repeal could improve the ability of 
IHS to recruit and retain medical professional employees in remote 
locations. It is more difficult for IHS to recruit and retain medical 
professionals to work in remote reservation facilities if their spouses 
are prohibited from engaging in business activities with the local 
Indian residents, particularly since employment opportunities for 
spouses are often very limited in these locations.
  Let me cite one very specific case in which the law has come into 
play. The case, which surfaced a couple of years ago, involved Ms. 
Karen Arviso, who served as the Navajo area IHS health promotion and 
disease prevention coordinator. Ms. Arviso was one of those people who 
played a particularly critical role during the outbreak of the 
hantavirus in the Navajo area at the time. She put in long hours 
traveling to communities across the reservation in an effort to educate 
people about this mysterious disease.
  Instead of thanks for her dedication and hard work, Ms. Arviso 
received a notice that she was to be fired because her husband applied 
for a small business loan from the Bureau of Indian Affairs. The 
Trading with Indians Act would require it. What sense does that make?
  Mr. President, repeal of the Trading with Indians Act is long 
overdue. I urge the Senate to pass this legislation again today, and 
finally send it on to the President for his signature.
  Mr. McCAIN. Mr. President, I rise today to express my support for 
H.R. 3215 a bill to repeal certain provisions of laws relating to 
trading with Indians and to urge its immediate adoption. I am pleased 
to be joined by Senator John Kyl in sponsoring S. 199, the Senate 
companion to H.R. 3215 to repeal the Trading with Indians Act.
  H.R. 3215 would address a longstanding problem in Indian policy. I 
have worked extensively with my colleagues from Arizona, Senator Kyl 
and Congressman Hayworth, to repeal the Trading with Indians Act. The 
Trading with Indians Act was originally enacted in the 1800's to 
protect Indians from unscrupulous Indian agents and other Federal 
employees. The prohibitions in the Trading with Indians Act were 
designed to prevent Federal employees from using their positions of 
trust to engage in private business deals that exploited Indians. These 
prohibitions carried criminal penalties including a fine of up to 
$5,000 and removal from Federal employment. As time has passed, it has 
become apparent that the law is doing more harm than good.
  The Trading With Indians Act has had significant adverse impacts on 
employee retention in the Indian Health Service [IHS] and the Bureau of 
Indian Affairs [BIA]. The problems stemming from the Trading with 
Indians Act are well-documented. The way that the law is written allows 
for the conviction of a Federal employee even when the employee is not 
directly involved in a business deal with an Indian or an Indian tribe. 
Because the prohibitions in the Trading with Indians Act apply to the 
spouses of IHS and BIA employees, the adverse impacts are far-reaching. 
For example, if a spouse of an IHS employee is engaged in a business 
that is wholly unrelated to the BIA or the IHS and does not transact 
business with the BIA or the IHS, the spouse is still in violation of 
the Trading with Indians Act. Employee retention in often rural and 
economically depressed Indian communities is difficult enough without 
the additional deterrent of an outdated prohibition to force out 
productive and experienced employees who might otherwise stay. The act 
even prohibits Indians from the same tribe from engaging in business 
agreements or contracts entirely unrelated to the scope of the Federal 
employee's employment. Because the act applies to agreements between 
all BIA and IHS employees and all Indians regardless of their proximity 
or range of influence, it would prohibit a BIA or IHS employee on the 
Navajo reservation in Arizona from selling his car to a Penobscot 
Indian from Maine.
  As tribal governments become more sophisticated and more Indian 
people become better educated and able to adequately protect themselves 
against unscrupulous adversaries, the Federal Government must respect 
these changes by repealing outdated and paternalistic laws which are 
still on the books. Respect for Indian sovereignty demands that the 
relics of paternalism fall away as tribal governments expand and grow 
toward self-reliance and independence. It is clear that although this 
statute served an admirable purpose in the 1800's, it has become 
anachronistic and should be repealed. The important policies reflected 
in the Trading with Indians Act are now covered by the Standards of 
Ethical Conduct for Employees of the Executive Branch. The Standards of 
Ethical Conduct for Employees of the Executive Branch adequately 
protects the Indian people and tribes served and provides simple 
guidelines to follow for all Federal employees when it comes to 
contracts with Indian people and Indian tribes.
  I would like to express my appreciation for the work of Senator Kyl 
and Congressman Hayworth in the development of this bill and I urge my 
colleagues to support passage of H.R. 3215. I ask unanimous consent 
that the statement of Senator Kyl be included in the Record immediately 
following my remarks.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the bill be 
deemed read a third time and passed, the motion to reconsider be laid 
upon the table, and that any statements relating to the bill appear at 
the appropriate place in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (H.R. 3215) was deemed read the third time and passed.

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