[Federal Register Volume 65, Number 64 (Monday, April 3, 2000)]
[Notices]
[Pages 17521-17527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8120]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs


Historical Analysis of Individual Indian Money Accounts

AGENCY: Bureau of Indian Affairs (BIA), Interior.

ACTION: Notice of public meetings and opportunity for comment.

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SUMMARY: The Department of the Interior manages property it holds in 
trust for individual Indians and maintains revenue, in Individual 
Indian Monies (IIM) accounts, that accrues to individuals holding an 
interest in trust lands. The Department recognizes that as a result of 
past weaknesses in its accounting and information systems, IIM account 
holders have not always had sufficient information to be able to 
ascertain whether income from their trust assets was properly credited, 
maintained, and distributed to and from their IIM accounts. As directed 
by Congress, the Department is continuing development of a 
reconciliation process to evaluate the reliability of past account 
activity. This notice initiates an information gathering process with 
IIM account beneficiaries, and the public, to comply with Congressional 
directives to determine the most reasonable methods for providing 
accountholders with information to evaluate their accounts and to 
determine whether there are discrepancies due to past management 
practices.

DATES: Written comments will be collected until June 30, 2000. The 
Department will also conduct public meetings to collect views, as 
outlined in this notice, at the following dates and locations:

Navajo Region

Western Agency

April 24, 2000; 10:00 A.M.; Western Agency, BIA, Building #407, Warrior 
Drive, Tuba City, Arizona

Chinle Agency

April 25, 2000; 10:00 A.M.; Chinle Agency, BIA, Bldg #136, Navajo Route 
7, Chinle, Arizona

Fort Defiance Agency

April 26, 2000; 10:00 AM; Fort Defiance Agency, BIA, Bldg #40, Blue 
Canyon Road, Fort Defiance, Arizona

Shiprock Agency

April 27, 2000; 10:00 AM; Ship Rock Agency, BIA, N Highway 666, 
Shiprock, New Mexico

[[Page 17522]]

Eastern Navajo Agency

April 28, 2000; 10:00 AM; Eastern Navajo Agency, BIA, Bldg #222, Navajo 
Route 9, Crownpoint, New Mexico

Western Region

Colorado River Agency

April 25, 2000; 5:00 PM; Colorado River Agency Conference Room, Agency 
Road, Building 3, Parker, Arizona

Fort Apache Agency

April 25, 2000; 9:00 AM; Fort Apache Agency Annex Conference Room, 
State Route 73, West Elm Street, Whiteriver, Arizona

Fort Yuma Agency

April 29, 2000; 2:00 PM; Cocopah Tribal Chambers, County 15, Avenue G, 
Somerton, Arizona

Fort Yuma Agency

April 29, 2000; 10:00 AM; Quechan Community Center, 604 Picacho Road, 
Winterhaven, California

Hopi Agency

April 27, 2000; 10:00 AM; Hopi Agency Conference Room, Highway 264, One 
Main Street, Keams Canyon, Arizona

Papago Agency

April 29, 2000; 9:00 AM; Tohono O'odham Legislative Council, Main 
Street, (Downtown Sells), South of State Route 86, Sells Arizona

Pima Agency

May 3, 2000; 9:00 AM; Gila River Sprung (White Tent), 5550 W. Wild 
Horse Pass (Casino) I-10 and Maricopa Road, Chandler, Arizona

Salt River Agency

May 6, 2000; 10:00 AM; Salt River Community Building, 1880 North 
Longmore, Scottsdale, Arizona

San Carlos Agency

May 3, 2000; 9:00 AM; Apache Gold Casino, Highway 70--5 miles east of 
Globe, Globe, Arizona

Truxton Agency

April 27, 2000; 1:00 PM; Truxton Canon Field Office Conference Room, 
13067 East Highway 66, Valentine, Arizona

Eastern & Western Nevada Agencies

May 6, 2000; 9:00 AM; Atlantis Hotel, 3500 S Virginia Street, Reno, 
Nevada

Southern Paiute Field Station

April 24, 2000; 8:00 AM; Southern Paiute Field Office Conference Room, 
180 North 200 E., Suite 111, St. George, Utah

Uintah & Ouray Agency

May 2, 2000; 9:00 AM; Ute Tribal Auditorium, 988 South 7500 E., Fort 
Duchesne, Utah

Rocky Mountain Region

Blackfeet Agency

May 1, 2000; 9:00 AM; (A-F)
May 2, 2000; 9:00 AM; (G-N)
May 3, 2000; 9:00 AM; (O-T)
May 4, 2000; 9:00 AM; (U-Z); Blackfeet Agency, BIA, 531 SE Boundary St, 
Browning, MT

Crow Agency

May 2, 2000; 10:00 AM; Crow Agency (Multi-Purpose Building), Frontage/
Fairground Road, Crow Agency, MT

Fort Belknap Agency

April 25, 2000; 1:00 PM; Ft. Belknap Agency (Fort Belknap Industries 
Bldg), Main Street/Airport Road, Fort Belknap, MT

Fort Peck Agency

May 4, 2000; 6:00 PM; Tribal Cultural Center, 211 Tribal Street, 
Poplar, MT

Northern Cheyenee Agency

April 26, 2000; 4:00 PM; Blessed Sacrament Catholic Church Basement, 
Cheynenne Ave., Lame Deer, MT

Wind River Agency

April 25, 2000; 9:00 AM; Rocky Mountain Hall Gymnasium, 15 Northfork 
Road, Fort Washakie, WY

Rocky Boy's Agency

May 3, 2000; 6:00 PM; Rocky Boy's Community Center, RR1 Box 542, Box 
Elder, MT

Northwest Region

Fort Hall Agency

May 4, 2000; 4:00 PM; Fort Hall Housing Authority Conference Room, 161 
War Dance Circle, Fort Hall, ID

Colville Agency

May 6, 2000; 9:00 AM; Nespelem Community Center, Nespelem, WA

Flathead Agency

April 28, 2000; 9:00 AM; Tribal Council Chambers, Highway 93 West, 
Pablo, MT

Yakama Agency

May 3, 2000; 6:00 PM; Eagle Seelatsee Auditorium, Yakama Nation 
Headquarters Building, Fort Road, Toppenish, WA

Warm Springs Agency

April 26, 2000; 2:00 PM; Forestry Conference Room, Building #4430, 
Upper Dry Creek Road, Warm Springs, OR

Olympic Peninsula Agency

May 1, 2000; 1:00 PM; Nordic Inn--Convention Center, 1700 S. Boone, 
Aberdeen, WA

Metlakatla Field Office

May 1, 2000; 8:30 AM; Double Tree, 16500 S. Center Parkway, Seattle, WA

Puget Sound Agency

April 24, 2000; 1:00 PM; Cascadia Inn, 2800 Pacific Avenue, Everett, WA

Makah Field Office

May 1, 2000; 7:00 PM; Makah Community Hall, Neah Bay, WA

Umatilla Agency

May 4, 2000; 12:30 PM; Yellow Hawk Clinic, 73265 Confederated Way, 
Pendleton, OR

Northern Idaho Agency

May 9, 2000; 9:00 AM; Nez Perce Tribal Headquarters, Pineewau Community 
Building, Lapwai, ID

Taholah Field Office

April 26, 2000; 4:00 PM; Taholah Community Center, Taholah, WA

Spokane Agency

May 2, 2000; 5:00 PM; Spokane Tribal Community Center Gym, Wellpinit, 
WA

Northwest Regional Office

April 27, 2000; 9:00 AM; BIA Regional Headquarters, Main Auditorium, 
911 N.E. 11th Avenue, Portland, OR

Southern Plains Region

Anadarko Agency

May 3, 2000; 9:00 AM; Anadarko High School Auditorium, U.S. Highway 62 
& Warrior Drive, Anadarko, OK

Pawnee Agency

April 26, 2000; 9:00 AM; International Trade Center--OSU Campus Exhibit 
Hall, 105 Watkins Center, Stillwater, OK

Horton Agency

May 5, 2000; 10:00 AM; Horton Field Office Conference Room, Horton, KA

Concho Field Office

May 3, 2000; 1:00 PM; Redlands Community College Conference Center, 
1300 South Country Club Road, El Reno, OK

Southern Plains Regional Office

April 27, 2000; 9:00 AM; Clarion Hotel on Meridian, 737 South Meridian, 
Oklahoma City, OK

[[Page 17523]]

Midwest Region

Great Lakes Agency

April 26, 2000; 5:00 PM; Northern Great Lakes Visitor Center, 2-88 
County Trump 6, Ashland, WI

Michigan Agency

April 28, 2000; 1:00 PM; BIA Agency Office, 2901 Point 5 I-75 Business 
Spur, Sault Ste Marie, MI

Minnesota Agency

April 29, 2000; 1:00 PM; Palace Casino/Hotel, 6280 Upper Cass Frontage 
RD NW, Cass Lake, MN

Pacific Region

Southern California Agency

April 27, 2000; 10:00 AM; Best Western Escondido Hotel, 100 Seven Oaks 
Road, Escondido, CA

Northern California Agency

April 27, 2000; 10:00 AM; Golden Bear Casino, 156 Klamath Beach Road, 
Klamath, CA

Central California Agency

May 1, 2000; 10:00 AM; Heritage Hotel, 1280 Tribute Road, Sacramento, 
CA

Palm Springs Field Office

May 5, 2000; 10:00 AM; Spa Hotel and Casino, 100 N. Indian Canyon 
Drive, Palm Springs, CA

Eastern Oklahoma Regional Office

Talihina Agency

April 24, 2000; 1:00 PM; Talihina School Theater, 600 1st Street, 
Talihina, OK

Chickasaw Agency

April 25, 2000; 9:00 AM; Chicasaw Nation Bingo Hall, 1500 North Country 
Club Road, Ada, OK

Okmulgee Field Office

April 26, 2000; 9:30 AM; Creek Nation Complex, Former Elderly Citizens 
Cafeteria, Okmulgee, OK

Wewoka Agency

April 27, 2000; 9:00 AM; Mekusukey Mission Council House, Seminole, OK

Regional Office

May 1, 2000; 9:00 AM; Cherokee Nation Complex, Tribal Council Chambers, 
Tahlequah, OK

Osage Agency

May 2, 2000; 9:00 AM; American Legion Hall, 1449 W. Main Street, 
Pawhuska, OK

Miami Field Office

May 2, 2000; 6:00 PM; Miami Tribe of OK Cafeteria, 202 South 8 Tribes 
Trail Road, Miami, OK

Alaska Regional Office

Anchorage Agency

May 1, 2000; 9:00 AM; Anchorage Agency Conference Room, 1675 C Street, 
Anchorage, AK

Fairbanks Agency

May 2, 2000; 9:00 AM; Fairbanks Agency Conference Room, 1012 12th Ave., 
Fairbanks, AK

Great Plains Region

Cheyenne River Agency

April 27, 2000; 1:00 PM; Cheyenne Eagle Butte High School Auditorium, 
2006 Main, Eagle Butte, SD

Crow Creek Agency

May 3, 2000; 1:00 PM; Crow Creek Sioux Tribal Gym, Highway 47, Fort 
Thompson, SD

Fort Berthold Agency

April 28, 2000; 1:00 PM; Civic Center, 103 Soo Place, New Town, ND

Fort Totten Agency

May 2, 2000; 11:00 AM; Fort Totten Community Center-Tribal Conference 
Rm, Main Street, Fort Totten, ND

Lower Brule Agency

April 26, 2000; 1:00 PM; Golden Buffalo Convention Center, 321 Crazy 
Horse St, Lower Brule, SD

Pine Ridge Agency

May 3, 2000; 10:00 AM; Billy Mills Hall, Highway 18 and 279, Pine 
Ridge, SD

Rosebud Agency

April 28, 2000; 1:00 PM; St. Thomas Hall, U.S. Highway 18, Mission, SD

Sisseton Agency

April 24, 2000; 10:00 AM; Community Gym, Veterans Memorial Drive, 
Agency Village, SD

Standing Rock Agency

May 4, 2000; 9:00 AM; Fort Yates High School Gym, U.S. Highway 1806, 
Fort Yates, ND

Turtle Mountain Agency

May 3, 2000; 1:00 PM; Turtle Mountain Casino--Sprung Building, Highway 
5, Belcourt, ND

Winnebago Agency

May 3, 2000; 9:00 AM; Blackhawk Community Center, Highway 77, 
Winnebago, NE
May 3, 2000; 1:00 PM; Gilpin Building, Tribal Avenue, Macy, NE
May 4, 2000; 9:00 AM; Frazier Memorial Building, David Frazier Avenue, 
Sanatee, NE

Yankton Agency

April 25, 2000; 1:00 PM; Yankton Agency--Conference Room, 29775 South 
Main St, Wagner, SD

Eastern Region

Syracuse Field Office

April 29, 2000; 10:00 AM; Plummer Building, 3582 Center Rd, Salamanca, 
NY

Albuquerque Region

Northern Pueblos Agency

April 25, 2000; 10:00 AM; Northern Pueblos Agency Office, San Juan 
Pueblo, NM

Southern Ute Agency

May 3, 2000; 9:00 AM; Rolling Thunder Hall, 14826 Hwy 172 North, 
Ignacio, CA

Laguna Agency

May 3, 2000; 9:30 AM; Laguna Tribal Auditorium, I-40 West--Exit 114, 
Pueblo of Laguna, NM

Southern Pueblos Agency

May 3, 2000; 9:30 AM; Laguna Tribal Auditorium, I-40 West--Exit 114, 
Pueblo of Laguna, NM

Mescalero Agency

April 26, 2000; 10:00 AM; Carrizo Community Center, Carrizo Canyon 
Road, Mescalero, NM

Ute Mountain Ute Agency

April 24, 2000; 6:00 PM; Council Chambers, 125 Mike Washroad, Towaoc, 
CO

ADDRESSES: Written comments or suggestions about the processes that 
should be undertaken by the Department to meet the stated goals of this 
notice should be mailed to Bureau of Indian Affairs Office of American 
Indian Trust, Attention: Director, Loretta Tuell, 1849 C Street, NW, 
Mail Stop 2472-MIB, Washington, DC 20240.

FOR FURTHER INFORMATION CONTACT: Loretta Tuell, Dierector, Office of 
American Indian Trust, at the above address or by telephone at (202) 
208-3338.

SUPPLEMENTARY INFORMATION:

I. Background

    Note: Further background information, including historic 
information on IIM accounts, to aid comments on this notice will be 
available at these locations prior to the

[[Page 17524]]

scheduled meeting times. Please contact your preferred location for 
further.

    Currently, approximately 11 million acres of land are administered 
in trust by the Secretary of the Interior for the benefit or more than 
300,000 individual Indian beneficiaries. In 1997 Departmental auditors 
estimated approximately $300 million is generated annually from the 
management of the lands and passes through the IIM accounts. This is a 
significant expansion since the 1955 GAO Audit report which reported 
that in 1950 there were only 88,000 IIM accounts and in fiscal year 
1955 approximately $66 million was handled within the IIM system. As 
outlined below, this dramatic growth in beneficiaries since the 
inception of the IIM system overburdened the existing accounting and 
distribution systems of the Department. By Congressional mandate, those 
systems are currently being modernized. However, the Department 
recognizes, as has the General Accounting Office, that it is not 
feasible or practicable to re-create past transactions with the same 
precision that the Department expects the new systems to provide when 
fully operational.
    The Department's obligation to reconcile accounts was initially 
raised by Congress in the 1987 Supplemental Appropriations Act; and 
Congress has continued to oversee the development of various options to 
carry out this obligation. The American Indian Trust Fund Management 
Reform Act of 1994, 25 U.S.C. 162a. et seq., & 4011, et seq., (the Act 
or the 1994 Act), anticipates that the Bureau of Indian Affairs will 
complete a reconciliation of IIM accounts that provides account holders 
``with a fair and accurate accounting'' of trust accounts. 25 U.S.C. 
4043. The Act also required the Department account for fund balances 
and commence ``periodic, timely reconciliations to assure the accuracy 
of accounts.'' 25 U.S.C. 162a & 4011. The combined effect of these 
provisions is a requirement to develop a reconciliation process to 
determine the reliability of account balances. Pursuant to Congress' 
mandate in the Act, the Department has been designing and installing 
new accounting and trust management systems to modernize and improve 
the administration of IIM accounts. The Department believes the new 
systems and procedures will provide account holders with accurate 
information about current transactions that affect the balances of 
their account.
    In 1887, Congress enacted the Indian General Allotment Act of 1887, 
24 Stat. 388. The Allotment Act authorized the President to allot 
portions of reservation land to individual Indians. Title to the 
allotted land was to remain with the United States in trust for at 
least 25 years, after which it was to be conveyed in fee to the Indian 
beneficiary. The Allotment Act resulted in a loss of over 90 million 
acres of Indian-held land, primarily through the distribution to non-
Indians of reservation lands remaining after allotment. Land also 
passed out of the hands of many Indian allottees who received fee title 
after 25 years through forced sales and the operation of state 
intestacy laws.
    In 1934, Congress enacted the Indian Reorganization Act to protect 
(and enhance, when possible) the remaining land base of Indian tribes 
and their members and to permit the tribes to engage in self-
government. See 25 U.S.C. 452. The Reorganization Act ended the 
practice of allotment and indefinitely extended the trust period for 
allotments that had already been made.
    Under the Indian General Allotment Act of 1887, 24 Stat. 388, as 
amended, the Department of the Interior has managed land held in trust 
for individual Indians which often generates revenue for the beneficial 
owners. Generally, the primary mechanism for distributing money earned 
on allotted lands to the beneficiaries has been the IIM account. 
Historically, funds collected from the use of allotted lands were 
deposited in either the Federal Treasury or private banks. The funds 
were then divided based on each individual's proportional interest in 
the land generating the funds. Each individual's share of the funds was 
then placed in an IIM account, where it was held until distribution. 
With certain exceptions, the income was then distributed to the account 
holder (beneficiary) by a bonded disbursing officer. Funds also have 
been derived from per capita payments from the Indian Claims 
Commission, U.S. Court of Claims, and appropriations from legislative 
claims settlements and were distributed in a similar manner.
    As interests in individual allotments continued to pass to 
subsequent generations, the number of owners of an individual allotment 
multiplied to the extent that some of the 40, 80, or 160 acre 
allotments which originally had one owner, today may have hundreds, or 
even more. While the amount of money generated has increased 
significantly since the inception of the IIM system, the number of 
beneficiary accounts has increased at a much greater rate. Today, many 
of these interests, having been passed through many generations, may 
entitle the owner to such a small portion of the proceeds generated 
that the beneficiary receives only pennies a year.
    After the passage of the Act, the Department's Special Trustee 
conducted an examination of the IIM accounts in order to produce the 
Strategic Plan required by the Act. The Strategic Plan identified a 
number of problems with the historic management of the accounts. For 
example, since the record keeping and distribution of money was 
historically handled at the local level, multiple accounts could be 
formed if an individual either owned land in several areas or moved and 
was serviced at a different BIA office. Moreover, the Department's 
systems for managing IIM accounts have not kept pace with systems 
available to the private sector. These problems compounded each other 
and in the end overwhelmed the system such that the Department has been 
unable to provide many beneficiaries with basic information such as the 
source of funds, gains and losses, and periodic statements of account 
performance. As a result, many beneficiaries have been unable to fairly 
evaluate the management of their accounts to verify they are receiving 
their proper share of the income collected through the Department's 
management of their land interests.
    In response to accountholder demands and Congressional findings 
that the systems must be overhauled, Congress enacted The American 
Indian Trust Fund Management Reform Act of 1994, PL 103-412, which 
prescribed specific information that would henceforth be required to be 
provided to individuals about the Department's management of their 
accounts. The Department believes the systems currently being developed 
and implemented will comply with the mandates of the Act.
    In 1994 Congress, through passage of the Act, mandated a series of 
specific reforms to the ongoing management of Indian trust funds. See 
for example, 25 U.S.C. 162a. Once the systems are in place to carry out 
the duties specified in the Act on an ongoing basis, the Department 
will undertake a process, likely with the aid of the new systems, to 
provide required information on accounts back to October 25, 1994. As 
this will involve different requirements and levels of available 
information, this period will be addressed within this separate 
process, not necessarily the one that will be developed from this 
notice.
    Although the requirements of the Act are primarily forward-looking, 
some of the prospective requirements such as periodic reconciliations 
and determining accurate cash balances necessarily require some level 
of

[[Page 17525]]

historical investigation. For example, Department audits have revealed 
discrepancies between the ledges of the Department and the Department 
of the Treasury, the Department will have to continue work on resolving 
these discrepancies. The implementation of new systems, in and of 
themselves, will not provide an analysis of transaction which took 
place before the passage of the Act. To address investigation of 
historical discrepancies, the Act built on the Department's process for 
historically reconciling Tribal Trust Fund accounts, requiring the 
Special Trustee to ``monitor'' the process and setting a deadline for 
its completion. The Act required the Secretary to submit a 
``reconciliation report'' to the relevant congressional committees 
identifying a balance reconciled as of September 30, 1995 for each 
Tribal Trust Fund account, the methodology used, attestations of 
account holders as to whether they accepted the balances as reconciled 
and if not, a statement outlining efforts the Secretary will undertake 
to resolve the dispute. See 25 U.S.C. 4043 & 4044. Reconsilitation 
reports were submitted in January of 1996.
    In contrast to the Tribal trust funds, for which Congress provided 
a framework for applying the Department's reconciliation process, the 
Act contains no such guidance for the reconciliation of IIM accounts. 
At the time the Act was enacted, the Department had not identified a 
satisfactory methodology for historical IIM reconciliation, given the 
availability and condition of the records and the high cost of 
gathering and analyzing relevant documents. The Act simply provided 
that an IIM reconciliation process would be ``monitored'' by the 
Special Trustee to ensure a ``fair and accurate accounting'' is 
provided to accountholders. 25 U.S.C. 4043. While Congress did not 
specify the nature of the remedy, the Act does recognize the existence 
of both the historical problems and ongoing attempts to devise an 
approach to resolving them. Given the acknowledged problems with past 
account management systems, and the 1994 Act's intent to resolve the 
account management deficiencies, the Department wishes to address the 
fact that these deficiencies may have resulted in accountholder losses 
through the development of a fair, reasonable, and practicable 
solution. Because the Act does not provide the Department with guidance 
on what type of process should be used to provide beneficiaries with 
information about their accounts' histories, the Department believes 
Congress left the initial determination of how, and to what extent, it 
would achieve an accounting or reconciliation of IIM accounts to the 
Department.
    In 1996, the Cobell v. Babbitt litigation was filed in the U.S. 
District Court for the District of Columbia, asserting beneficiaries 
were due an accounting of their funds. The scope and nature of any such 
accounting has not yet been fully addressed in the case but the Court 
has made it clear that it lacks jurisdiction to award damages for 
losses beneficiaries may have incurred. See Cobell v. Babbitt, No. 
1:96CV01285, slip op. at 55 (Dec. 21, 1999). In addition, because many 
beneficiaries have very small account balances or little historical 
activity, the Department believes it would best serve the interests of 
the beneficiaries and the United States to develop a methodology to 
foster compensation without the necessity of case-by-case litigation. 
Therefore, the Department now proposes beginning an information 
gathering process with beneficiaries to weigh the costs, benefits, and 
feasibility or alternative approaches to give IIM account holders 
reasonable confidence that income from their trust assets was properly 
credited, maintained, and distributed to and from their IIM accounts 
before October 25, 1994. In addition, because the Department believes 
that it is in the best interests of most, if not all beneficiaries to 
develop a process that not only provides assurance that current 
balances are reliable, but also provides for a final resolution to past 
discrepancies discovered, the Department also intends to explore 
approaches to fairly compensate beneficiaries and finally resolve 
discrepancies.
    The Department notes that, although the goals of this process go 
beyond the remedies available in the Cobell case, the Court has pending 
before it issues related to the scope and nature of an accounting due 
beneficiaries. The Department intends to keep the Court apprised of the 
progress on this process. The Department recognizes that future 
decisions by the Court may affect this process.

II. Goals

    Pursuant to this obligation, this notice is intended to initiate a 
process with beneficiaries and the public to gather information about 
available options to enable the Department to determine the best 
process to meet the following goals:
    (1) Develop a methodology, consistent with Congressional 
directives, to examine past account activity and discover information 
appropriate to enable beneficiaries and the Department to evaluate 
whether income from their trust assets was properly credited, 
maintained, and distributed to and from their IIM accounts before 
October 25, 1994;
    (2) Explore approaches to fairly compensate beneficiaries and 
finally resolve discrepancies.
    This process is focused on developing a general methodology to 
investigate IIM account activity in order to provide reasonable 
information to account holders. This process will not, for example, 
address allegations of mismanagement, or other allegations of taking, 
of the underlying property interests. Although the methodology selected 
may ultimately result in a procedure which includes bringing 
individualized grievances related to lost income, these grievances will 
not be addressed within the process outlined in this notice.

III. Factors To Consider in Evaluating Options

    Although the Department intends to consider the widest possible 
range of options for meeting the goals stated above, the Department 
will be guided by a number of factors in evaluating the reasonableness 
of each option. Each approach would require some tradeoff among the 
level of precision of account information provided to beneficiaries, 
the cost of obtaining and providing information, the impact on BIA's 
and OST's other responsibilities, and time needed to develop a basis 
for compensation. It is important that these tradeoffs be considered in 
evaluating the various options.
    In addition, it is important to consider what has been proposed and 
rejected in the past and what the Department has learned from studying 
the accounts. Past proposals to perform IIM reconciliation have been 
dismissed by both Indian groups and Congress as being too expensive for 
the limited information produced. From 1988 to 1994, the Department, 
with the aid of Arthur Andersen, investigated the possibility of 
performing a reconciliation that would develop information on accounts 
without regard to the size of the account or transaction. Many of these 
proposals were dismissed by Congress, the Department, and the 
Intertribal Monitoring Association (``ITMA'') as not being worth the 
cost. For example, in 1995 Congress declined to fund IIM reconciliation 
tasks and the Appropriations Committee instructed the Department to, 
``recommend alternative, less costly approaches to the reconciliation 
and clarify the implications of not reconciling [IIM]

[[Page 17526]]

accounts.'' H.R. Rep. No. 104-173, at 55. ITMA similarly advocated 
finding alternatives that will discover the largest discrepancies at 
the least cost. This experience indicates that the Department should 
focus on methods that discover discrepancies in the areas that are most 
reasonably calculated to have had significant problems in the past.
    Any approach ultimately selected must also provide a final 
resolution for both the Department and beneficiaries with regard to the 
pre-1994 period that is necessary for the Department to fully correct 
the management of the IIM system into the future. While the level of 
finality needed may vary according to such issues as the level of 
precision achieved, it is important to note that a primary 
consideration for any process selected must be to end uncertainty and 
achieve finality as to past account activity.
    It may well be that accountholders will have differing views on 
what is necessary to provide them with a satisfactory ``accounting.'' 
Those with larger accounts may be more interested in an option which 
offers great precision, even though achieving the desired level of 
precision will take a long time and substantial resources. In contrast, 
accountholders with smaller accounts--those with less than $100 in 
income per year, for example--may be satisfied with a methodology that 
does not yield a precise result but that leads to a fast result with 
certain assumptions built in to compensate for the reduced precision. 
As discussed more fully below, it may not be necessary to use the same 
methodology for all accountholders. Distinctions among accounts may be 
made based, for example, on the size of the account or the nature of 
the underlying assets owned by the accountholder.
    The approach selected must provide accountholders with confidence 
that they have been treated fairly. The Department is spending in 
excess of $190 million to clean up the trust fund accounts, to install 
new systems to administer trust resources and trust funds, and to train 
Departmental officials in meeting their obligations. While the 
Department is confident it will be able to meet its obligations for the 
future, it is equally important that this process develop a result that 
will satisfy accountholders as to the past.
    Another factor to be considered is the cost of the process. While 
achieving the goals of this notice is likely to be expensive regardless 
of which approach is selected, there is a very large cost range within 
the various options--from millions of dollars for the sampling or 
settlement approach to hundreds of millions or more for a traditional 
transaction-by-transaction reconciliation for all accounts. As an 
example, the Department's current estimates are that it could cost over 
$15 million just to locate and organize all documents associated with 
the transactions of the five named plaintiffs (and 31 related 
individuals) in the Cobell litigation. Using this estimate as a guide, 
it is reasonable to conclude that merely collecting and organizing--but 
not analyzing--documents for the approximately 300,000 current 
accountholders would cost hundreds of millions of dollars.
    Closely associated with the overall cost of the process are the 
cost/benefit considerations of the options. This factor may not be as 
relevant for large accounts through which tens or even hundreds of 
thousands of dollars pass each year. This issue more likely arises with 
respect to the small accounts. If it costs hundreds of dollars, or even 
more, to undertake a particular analysis for each account, is it cost 
effective and reasonable to do so for an account that generates $25 or 
less per year?
    The amount of time that a particular process may take is also a 
consideration. One option, a transaction-by-transaction reconciliation, 
for example, would doubtless take many years to complete while others, 
such as a sampling or settlement process, would take considerably less 
time. Some accountholders may find that they can achieve a sufficient 
level of certainty to assess past discrepancies with much less 
information than others may require, particularly if their account has 
had little activity or they can reasonably determine their interest in 
the property was unlikely to produce significant income. In such a 
case, the accountholder may wish to expedite the process in order to 
receive fair compensation and resolve this issue. Moreover, a process 
that takes many years to complete will continue to consume the finite 
resources of the Bureau which accountholders may believe should be 
better expended on other programs of benefit to Indian people.
    Indeed, the Bureau has broad mandates and responsibilities, 
including programs of importance to many aspects of the lives of 
individual Indians and Tribes. These include programs relating to 
education, law enforcement, probate, realty and trust asset 
administration, and stewardship of the environment. Regardless of which 
methodology is employed, it will require the substantial attention of 
Bureau employees and expenditure of significant amounts of money. These 
expenditures likely do not fit within the current budget estimates and 
staffing of the Department, and therefore the Department will have to 
seek new funds from Congress to undertake any process finally selected.

IV. Examples of Alternative Approaches

    The following alternative approaches are offered merely as examples 
to illustrate the range of options the Department could consider. This 
list is not exhaustive, and other constructive alternatives are 
invited. As previously noted, the Department recognizes it is possible 
that no single alternative will serve the interests of all types of 
accountholders. Accordingly, an approach could be designed that 
integrates principles from various alternatives to provide a combined 
methodology depending on the characteristics of the accounts, 
including, size of the account, region of the country, and nature of 
the underlying assets producing income for the account.

A. Transaction-by-Transaction Reconciliation

    The most precise and extensive information possible would be 
developed by attempting to undertake a transaction-by-transaction 
reconstruction of each account. This would involve attempting to 
research all transactions that have occurred in each account in order 
to try to locate documents which could demonstrate each transaction was 
correct and then applying appropriate verification procedures to the 
reconstruction. This would be the most time consuming and expensive 
approach. For example, the Department's experience in the Cobell 
litigation suggests that researching and cataloging the millions of 
documents that would be required would very likely cost hundreds of 
millions of dollars and take many years. Furthermore, the 
reconciliation of over one thousand Tribal accounts in the early 1990's 
consumed $20 million and left the final amounts still in question due 
to missing documents and other difficulties encountered in the 
reconciliation process. Given the enormous scope and costs of an 
account-by-account, transaction-by-transaction reconstruction, it is 
unlikely to expect that the Congress would provide the Department with 
the staggering appropriations needed to fund such a process.

[[Page 17527]]

B. Limited Reconciliation

    Another approach could be to perform a more limited reconciliation 
for a fixed period of time which would allow some reasonable 
conclusions to be drawn which could then be applied to the remaining 
historical period. This is similar to the approach taken by Arthur 
Andersen for the Tribal reconciliation project. Applying this approach 
to the IIM accounts would include a search for documentation to confirm 
data that was contained in the electronic systems used from 
approximately the mid-1980's to the mid-1999's and develop an error 
rate based on that comparison. This error rate could then be used to 
estimate whether accountholders had experienced losses and to arrive at 
a formula for compensation. Although this would be less expensive than 
a search for all transaction documents, there would still be 
significant costs associated with this process due to the fact that it 
involves reconstructing accounts for a particular period of time 
through extensive research (Arthur Anderson estimated the cost of this 
approach for the IIM accounts as somewhere between $108 million and 
$281 million).
    In 1995, the Inter-Tribal Monitoring Association (ITMA) voiced 
their opposition to the Arthur Andersen limited reconciliation approach 
and proposed a limited reconciliation that did not involve reconciling 
transactions in IIM accounts. The ITMA approach included, in part, 
reconciliation of balances between the IIM subsidiary ledger and the 
general ledger control account. ITMA advocated focusing on high volume, 
high dollar activities in active years; not every lease and every 
property.

C. Sampling

    Another approach could involve using statistical sampling to 
calculate potential losses. One example methodology could be to use a 
statistically relevant sample of accounts, transactions, or tracts of 
land to support a reasonable inference about the accuracy of past 
account transaction activity.
    It may also be useful to mix a sampling approach with a more 
precise transactional analysis based on the general criteria of the 
likelihood of loss. Under this approach, a sampling methodology could 
be used for groups of accounts that are unlikely to have many losses 
(such as accounts which do not have much income) and a more precise, 
individualized analysis for accounts where the potential for 
significant loss is greater. For example, a loss amount for accounts 
with historical annual income of less than $100 may be broadly 
estimated through sampling, while accounts with annual income over 
$100,000 may be analyzed on an individual basis. More extensive 
sampling could be used for accounts in between these ranges.

D. Analysis of Current Account Data

    Another approach might be to use data currently collected and 
tracked electronically on individual accounts to determine if the past 
level of account activity is consistent. Since the information that is 
currently tracked is more extensive than the readily available 
information on the past, this analysis would both provide some context 
for the historical information and allow some conclusions to be drawn 
as to its accuracy.

E. Payment Formula

    Another approach could be to define a formula to quantify a ``rough 
justice'' payment to each accountholder. Such a formula could be based 
on a variety of factors, including; the amount of money that has flowed 
through the account each year, the number of years the account has been 
open, the location of the account, and the type of assets that produced 
revenue for the account. To counter-balance the lack of precision in 
this process, the formulas could be weighted to resolve uncertainty in 
favor of the beneficiary. While this approach lacks precision in 
determining past losses, the major advantage of this approach is that 
it is relatively simple to administer, could be done fairly quickly, 
and would be the least expensive methodology to implement.

VI. Scope of Comments Requested

    The Department is soliciting comment on what factors accountholders 
consider the most important in developing the proper methodology for 
meeting the goals stated in this notice.

    Dated: March 29, 2000.
Kevin Gover,
Assistant Secretary for Indian Affairs.
[FR Doc. 00-8120 Filed 3-31-00; 8:45 am]
BILLING CODE 4310-02-M