[Senate Hearing 108-22]
[From the U.S. Government Printing Office]
S. Hrg. 108-22
NOMINATION OF ROSS O. SWIMMER
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
ON
CONFIRMATION HEARING OF THE NOMINATION OF ROSS O. SWIMMER TO BE SPECIAL
TRUSTEE FOR AMERICAN INDIANS, DEPARTMENT OF THE INTERIOR
__________
FEBRUARY 12, 2003
WASHINGTON, DC
U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
85-179 PDF
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON INDIAN AFFAIRS
BEN NIGHTHORSE CAMPBELL, Colorado, Chairman
DANIEL K. INOUYE, Hawaii, Vice Chairman
JOHN McCAIN, Arizona, KENT CONRAD, North Dakota
PETE V. DOMENICI, New Mexico HARRY REID, Nevada
CRAIG THOMAS, Wyoming DANIEL K. AKAKA, Hawaii
ORRIN G. HATCH, Utah BYRON L. DORGAN, North Dakota
JAMES M. INHOFE, Oklahoma TIM JOHNSON, South Dakota
GORDON SMITH, Oregon MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska
Paul Moorehead, Majority Staff Director/Chief Counsel
Patricia M. Zell, Minority Staff Director/Chief Counsel
(ii)
C O N T E N T S
----------
Page
Statements:
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado,
chairman, Committee on Indian Affairs...................... 1
Carson, Hon. Brad, U.S. Representative from Oklahoma......... 4
Inouye, Hon. Daniel K., U.S. Senator from Hawaii, vice
chairman, Committee on Indian Affairs...................... 2
Johnson, Hon. Tim, U.S. Senator from South Dakota............ 2
Nickles, Hon. Don, U.S. Senator from Oklahoma................ 3
Russell, Majel, attorney and consultant, Intertribal
Monitoring Association..................................... 19
Sangrey, Richard, acting chairman, Intertribal Monitoring
Association................................................ 8
Swimmer, Ross, nominee to be Special Trustee for American
Indians, Department of the Interior........................ 6
Appendix
Prepared statements:
Sangrey, Richard............................................. 23
Swimmer, Ross (with responses to questions).................. 29
CONFIRMATION HEARING ON THE NOMINATION OF MR. ROSS O. SWIMMER AS
SPECIAL TRUSTEE FOR AMERICAN INDIANS, U.S. DEPARTMENT OF THE INTERIOR
----------
WEDNESDAY, FEBRUARY 12, 2003
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10:30 a.m. in
room 485, Senate Russell Building, Hon. Ben Nighthorse Campbell
(chairman of the committee) presiding.
Present: Senators Campbell, Inouye, Johnson, and Thomas.
STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM
COLORADO, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS
The Chairman. Good morning. The Committee on Indian Affairs
will be in session.
Welcome to the committee's first hearing of the 108th
Congress. Congressman Brad Carson will be making an
introduction of Mr. Swimmer today, and speak, of course, in
favor, and Senator Nickles will too. Before they make their
statements, the vice chairman and I will make out statements.
Do you have a schedule that is going to allow you to stay here
for a few minutes? Okay.
On February 4, 2003, President Bush submitted to the Senate
the nomination of Ross Swimmer to be Special Trustee for
American Indians, an office located within the Interior
Department. Mr. Swimmer is an enrolled member of the Cherokee
Nation of Oklahoma. As we heard from several of his friends,
Ross Swimmer has had quite an extensive career.
Having known him myself for a good number of years since he
was with the Department of the Interior once before when I
first came in, I asked him somewhat jokingly, are you sure you
want to do this? Are you sure you want to come back? He is
sure, and that is good enough for me, but he certainly has an
extensive background. He has practiced law. He has been a
banker. He has been a general counsel. He was elected Principal
Chief of the Cherokee Nation. He was a CEO of the Cherokee
Nation Industries, and later founded the Cherokee Group. He was
also cochairman of President Reagan's Commission on Reservation
Economies and was Assistant Secretary of Indian Affairs between
1985 and 1989.
Currently, Mr. Swimmer is the Director of the Office of
Indian Trust. If he is confirmed, which I fully expect, he will
be the third special trustee in 8 years, which does not bode
well for the job description.
We have received numerous letters regarding this nominee.
Most have been favorable, and in all honesty, some have been
opposed. That is to be expected. These and other letters that
are received in the next 2 weeks will be made part of the
record.
At the confirmation hearing of Tom Slonaker I expressed
some frustration of the pace of the trust reform. Here we are 2
years later and, very frankly and I am not impressed with what
has occurred since. The Trust Reform Task Force has failed. The
Cobell litigation continues. The Indian account holders have
not received a penny, although I have to say the attorneys for
the plaintiffs have received over $1 million, which tells me at
least some people would like to keep this going on forever. I
am sure that does not make them happy, but that is my view on
it. The Federal Government continues to spend hundreds of
millions of dollars a year on the litigation and in trying to
upgrade the systems. I think we certainly need a very strong
hand and strong leadership and a new direction for trust
reform.
So I am anxious to hear from Mr. Swimmer and the witnesses
today. I will tell all members that are here with us today that
it is not my intention to take a vote on this nominee today,
but do hope to move it through as quickly as we can.
Senator Inouye, did you have a statement you would like to
make?
STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII,
VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS
Senator Inouye. Thank you very much.
I wish to join you in welcoming our colleagues from
Oklahoma, the distinguished senior Senator from the State,
Senator Nickles, and Congressman Brad Carson, as we meet to
consider the President's nomination of Ross Swimmer to serve as
Special Trustee.
I also wish to welcome our old friend Ross Swimmer to the
committee today. Over the years, this committee has worked with
Mr. Swimmer on a variety of issues, and we look forward to
working with you again, sir.
Thank you.
The Chairman. Senator Johnson, did you have an opening
statement?
STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA
Senator Johnson. Thank you, Mr. Chairman.
Chairman Campbell, Vice Chairman Inouye and members of the
committee, I appreciate holding this hearing today. The tribes
from my home State of South Dakota are deeply impacted and
concerned about the present and future challenges faced by the
Department of the Interior, Bureau of Indian Affairs, and the
Office of Special Trustee.
By law, the Federal Government must protect the interests
of tribes and its members as their trustee. The facts have
demonstrated that the Federal Government in fact has not lived
up to its responsibilities to tribes. Understandably, many
tribes are angered by the fact that the trust fund accounting
problems are still not yet remedied. Perhaps born out of the
frustration, many tribes are expressing, frankly, a lack of
faith in Mr. Swimmer's ability to turn the current situation
around. Many of the tribes' concerns are longstanding and I
feel compelled to address them at this time.
The first concern stems from the fact that Mr. Swimmer
appears to be caught in an inherent conflict. I understand that
as Director of the Office of Indian Trust Transition, Mr.
Swimmer is largely responsible for the Fiduciary Obligations
Compliance Plan submitted last month by the Department of the
Interior, in accordance with an order by Judge Lamberth.
I am concerned by the appearance, if not the reality, of
conflict of interest created by Mr. Swimmer's past involvement
with trust reform. In his current role, Mr. Swimmer finds
himself largely defending the Department's actions in
litigation. If he is confirmed, he must turn around and then
serve as many of the plaintiffs' Special Trustee. I hope to
hear from Mr. Swimmer today regarding how he intends to
reconcile that conflict.
My second concern regards whether Mr. Swimmer intends to
utilize an appropriate trust standard. Pursuant to the 1994
Act, the Special Trustee is charged with the duty of monitoring
the reconciliation of tribal and individual Indian money trust
accounts to ensure that the Bureau provides the account holders
with a fair and accurate accounting of all Trust accounts. If
the Department assumes that tribal accounting claims must go
through an administrative review, this could mean that Mr.
Swimmer will be in charge of determining that the accountings
provided are fair and accurate. This would be the
responsibility of the same individual who has advocated for the
privatization of trust management outside the government,
without the government first providing an accounting. Once
again, there are concerns about conflict of interest.
My final concern regards consultation. I am hopeful that
Mr. Swimmer and the Department have learned the lesson of
BITAM. Consultation is of paramount importance to the tribes.
Tribes want to be consulted before the government takes action.
Without consultation, it is simply impossible to know whether
the trust reform program appropriately serves tribal interests.
I look forward to hearing from Mr. Swimmer and the witness
today. I hope today's hearing will help to continue the
dialogue between the Department and the tribes relative to
these important issues.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Johnson.
Now we will turn to Senator Nickles for his introduction,
and then to Congressman Carson.
STATEMENT OF HON. DON NICKLES, U.S. SENATOR FROM OKLAHOMA
Senator Nickles. Mr. Chairman, thank you very much. It is a
pleasure for me to be with you again on this committee. Senator
Inouye and Senator Johnson, it is a pleasure.
I am very happy today to introduce my friend, a person I
have had the pleasure of knowing, working with and respecting
for many years. I have had the pleasure of knowing Ross Swimmer
for more than 20 years.
Senator Johnson, the President could not have picked a
better person for maybe one of the most difficult, thankless
jobs in Government. We all know that these trust management
funds have been a mess for a long time. The President could not
have picked a better person anywhere in the country, in my
opinion, than Ross Swimmer, to help resolve and solve some of
these questions. Some people say it is insolvable, but I say,
with Oklahoma having the second-largest Indian population in
the Nation, that Ross Swimmer has the experience to help solve
the problems.
Ross Swimmer has the experience. He has been Principal
Chief of the Cherokee Nation for 10 years, one of the largest
tribes in the Nation. He has been Assistant Secretary of the
Interior for many years, in charge of Indian Affairs. He also
has a private sector background. He has been a banker. He has
been head of Cherokee Nation's Industries, a multimillion
dollar company employing a lot of Native Americans. He is a
member of one of the most prestigious law firms in the State of
Oklahoma.
Those assets, attributes, qualifications, all of which are
vitally important to resolving and untangling some of the very
difficult things that we have in Indian trust funds and
management of funds.
Mr. Chairman, I am delighted to be here to recommend
wholeheartedly my friend Ross Swimmer for this very difficult
job. I appreciate your having the hearing. I appreciate your
moving the nomination very quickly. This is a job that we need
an individual such as Ross Swimmer to take this responsibility
and meet this challenge head-on. So it is a pleasure for me to
join the committee today to recommend his confirmation.
The Chairman. Thank you for your statement. Depending on
your schedule, I invite you if you have the time to sit with us
here at the dais if you would like. We would enjoy having you.
Senator Nickles. Thank you.
The Chairman. Now, we will turn to Congressman Carson, who
in addition to being a Congressman from Oklahoma is also a
member of the Cherokee Tribe, too--one of the two House Members
who belong to a federally recognized tribe. Welcome, and please
proceed.
STATEMENT OF HON. BRAD CARSON, U.S. REPRESENTATIVE FROM
OKLAHOMA
Mr. Carson. Thank you, Chairman Campbell, and good morning
to you, to Vice Chairman Inouye and to Senator Johnson as well.
I want to join with the distinguished Senator from
Oklahoma, Senator Nickles, in thank you for having this hearing
today, and to join him in offering my support for the
nomination of Ross Swimmer to the position of Special Trustee
for the Office of Special Trustee for American Indians within
the Department of the Interior.
Like me, as you mentioned, Mr. Chairman, Mr. Swimmer is an
enrolled member of the Cherokee Nation. He hails from the
Second District of Oklahoma, which I have the pleasure of
representing in Congress. Many tribes in my District--indeed,
my District is more Native American than any in the entire
country--but many tribes, including the Cherokee Nation,
support the nomination of Mr. Swimmer.
We are pleased today to be joined by his wife, Margaret,
who is sitting behind me, who is one of the most distinguished
lawyers in Oklahoma and practices for a very well known and
large firm in the State, too.
As everyone in this room knows, the responsibilities of
Special Trustee are daunting, to say the least. Accounting for
Indian trust moneys has been an insurmountable challenge to
this Administration and to previous Administrations. While,
like Senator Nickles, I do not envy the task that is being put
on Mr. Swimmer, I do admire him for once again answering the
call to service to help sort through the challenges in managing
and accounting for Indian funds held in trust by the Federal
Government.
Mr. Swimmer's experience in the public and private sectors
make him uniquely suited to confront Indian trust fund
management and accountability. On the tribal level, Mr. Swimmer
has served three successive terms as the Principal Chief of the
Cherokee Nation, the second-largest tribe in the country. On
the Federal level, Mr. Swimmer served as the Assistant
Secretary of Indian Affairs from 1985-89. In the private
sector, as Senator Nickles outlined, Mr. Swimmer served as the
president of two banks in Oklahoma, the First National Bank of
Tahlequah and the First State Bank of Hulbert.
Without a doubt, the Department of the Interior's Indian
Trust management operations must be brought into the 21st
century. This will require a concerted effort by individuals
knowledgeable about Indian trust funds from the tribal and from
the Federal perspective. I believe Mr. Swimmer's professional
background brings to the Special Trustee position a combination
of experience and knowledge necessary to confront the task of
improving the accountability and management of Indian trust
funds. Indeed, I would dare say there are few people in the
entire country, much less Indian Country, who combined the
unique political, legal and financial experience that Mr.
Swimmer offers us.
I certainly respectfully request that this committee
support the nomination of Ross Swimmer as Special Trustee for
American Indians. I believe that all of the many valid concerns
raised by the committee today, especially Senator Johnson, will
be well addressed in forthcoming years by Mr. Swimmer in this
position.
I thank the committee for their indulgence.
The Chairman. Thank you for your very positive statement.
Congressman Carson, if you can stay, please do so. If you
cannot, I would just also remind you if you have not joined the
American Indian Caucus yet, please do so.
Mr. Carson. I am vice chairman over on the House side,
Senator, so thank you so much.
The Chairman. Thank you.
Since we only have one person on the first panel and one on
the second, I think I will ask both of them to take seats at
the table the same time. That is, Richard Sangrey, the acting
chairman of the Intertribal Monitoring Association from
Albuquerque. Welcome, Richard. And of course, Mr. Swimmer, our
nominee.
Mr. Swimmer, perhaps we ought to take your testimony first.
If you would go ahead and proceed, we will follow with Mr.
Sangrey, then we will ask questions in different rounds.
STATEMENT OF ROSS O. SWIMMER, NOMINEE TO BE SPECIAL TRUSTEE FOR
AMERICAN INDIANS, U.S. DEPARTMENT OF THE INTERIOR
Mr. Swimmer. Thank you, Mr. Chairman, and Senators on the
committee. I greatly appreciate the opportunity of being here
this morning. I also so greatly appreciate the committee
setting this as one of the first actions for the new Congress.
I think it goes without saying that the Senate Indian
Affairs Committee is one of the most important to American
Indians, if not the most important in the U.S. Government, the
U.S. Congress, certainly. I think that has been demonstrated
through the work of the staff. Your committee staff has been
excellent in addressing issues in Indian Country and, of
course, the Senators themselves have obviously taken a very
active interest and worked very hard on these sometimes
intractable issues that we face in Indian Country.
I was asked to take this position in a moment of interest
about 1 year ago. The Deputy Secretary and Secretary of the
Department had visited with me on another matter. I happened to
send a note back and said I had a lot of experience in the
Trust matters, and I still have an interest in seeing that
these issues get resolved; if there is anything I can do to
help, let me know. They did. They invited me to come up and
take on some of the issues and get involved once again. It has
been a very interesting and rewarding experience.
What I bring to this job and I think a result of my
presence and ultimately the nomination that I received, is much
about my background, Mr. Chairman. As both Senator Nickles and
Congressman Carson mentioned, I have been in the Indian world
working one side or the other, trying to support the
sovereignty of tribes, trying to work out litigious issues,
trying to reach settlement on claims of my own tribe as well as
others, and even working in the area of recognition. That has
been going on for nearly 30 years.
During that time, I had also the privilege of having a law
degree from the University of Oklahoma. I practiced private law
for about 5 years before I was invited to join the Cherokee
Nation Housing Authority, actually, as my first legal
experience in Indian Country. That was in about 1971, I think.
Following that, however, I was then invited by then-Chief
W. W. Keeler of the Cherokee Tribe to become attorney for the
Cherokee Nation. We were in the process of rebuilding the
tribe, or building a tribe, as many of the tribes were in the
early 1970's. We did not have a constitution. We had a one-
person government. The Principal Chief was it. I believed
firmly that we needed a more democratic form of government.
When I ran for election as Principal Chief in 1975, I ran on a
platform that I would bring a constitution forward. It would
have a tribal council. It would have a tribal court, and there
would be a sharing of power with that Principal Chief. After my
election, we did have a vote on the constitution. It was
overwhelmingly approved, and I was elected to two more terms
after that.
My experience with the Cherokee Nation gave me my first
insight into the trust funds matters. We had trust funds on
deposit. We still do today. I looked and observed what was
going on there, and I had some concern about that, mainly at
that time with the investments. As a tribe, we pretty well
managed our own accounting for those trust funds, but I was not
always satisfied that the investment of the trust funds was
what it should be. Following that experience with the Cherokee
Nation, I was invited by Secretary Hodel and President Reagan
to come to Washington as the Assistant Secretary, at which time
I had many, many things on the agenda. The Indian Gaming Act
was passed at that time. I began a move toward what became
known as self-governance, trying to bring tribes to the next
level of assuming leadership and responsibility over Federal
funds that were being appropriated for their benefit. That was
very successful, ultimately resulting in many tribes assuming a
greater role and responsibility for the Federal funds.
My role in the trust funds' management area really began in
1988. I investigated the work that was being done in
Albuquerque at that time. I looked at our accounting system,
our investment system. I said, this cannot be tolerated. We
have to do something. I inquired about what it would take to
bring new technology into the BIA. I was told it would happen
long after I left, because it would not be possible to do in
the short time of that Administration. I said, what we need is
an accounting system that is similar to what the private sector
uses. I suggested we go out and try to find that system. It has
been called various things, whether it is outsourcing,
privatizing, or whatever. The idea was to bring an accounting
system and an investment system into the BIA.
I understand that after I left the Bureau, those efforts
were not successful until much later. In fact, I believe it was
in the late 1990's that an outside system was actually adopted
for the Bureau of Indian Affairs trust fund accounting. It is a
system today being operated by a company known as SEI
Investment Company. They operate what is known in the industry
as a Trust 3000 system. It is an accounting system. It is state
of the art. It is now employed for the benefit of keeping
account of trust funds, and I think is doing a very capable
job. It was very similar to what I had intended to have happen
back in 1988, but obviously it did not happen.
With that kind of a background, I feel a need to do this
particular job. I believe that I have the credentials to
provide the oversight. I believe that I really have the
commitment to seeing that we reach an end goal here of managing
the trust funds, accounting for those trust funds, and making
sure that Indian people that oftentimes even now rely on this
income from the trust assets for their daily living, that they
receive that income timely and in the proper amount.
As for the tribes, I feel the same way, having been a
tribal leader. It is our responsibility to see that those
tribal trust funds are accounted for, paid out as the tribes
desire, and are properly managed and vested, et cetera.
So that is why, that and a love of public service and a
willingness to finish the job that I think so many have started
and tried to get moving. Things are happening in the
Department. It is an advantage that I have. I have in the past
year actually assumed the responsibility that was in the
Special Trustee, and that was to file the quarterly court
reports that the litigation requires. So I have been able to
track a lot of the improvements and the reforms that in fact
are going on.
With that, I have a prepared statement I would like to
submit for the record. I would be happy to take questions.
[Prepared statement of Mr. Swimmer appears in appendix.:]
The Chairman. Thank you. Your statement will be included in
the record.
Mr. Sangrey.
STATEMENT OF RICHARD SANGREY, ACTING CHAIRMAN, INTERTRIBAL
MONITORING ASSOCIATION
Mr. Sangrey. Good morning, Mr. Chairman, Mr. Vice Chairman,
members of the committee.
My name is Richard Sangrey. I am a member of the Chippewa
Cree Tribe, Rocky Boy's Reservation, Montana. I serve as
chairman of the Intertribal Monitoring Association, ITMA.
I thank you for this opportunity to testify on the
nomination of Ross Swimmer for this position of Special Trustee
for American Indians. ITMA was organized in 1990 to actively
monitor the activities of the Federal Government to ensure fair
compensation to tribes and individual Indians for the
government's management of trust funds. ITMA membership
includes 58 federally recognized Indian tribes who represent
the largest trust fund accountholders in Indian Country.
According to recent statistics, Indian tribes in the United
States own the majority of the trust corpus currently under
Department of Interior supervision and management. Our mission
is to represent and advocate for these tribal governments.
Before expressing ITMA's view on Mr. Swimmer's nomination,
I would like to briefly list our recent and ongoing trust
reform activities. We have been monitoring the proposals to
restructure the Bureau of Indian Affairs as a method of trust
reform. We are working with the tribal governments to develop
alternatives to resolve the longstanding trust fund and asset
management claims. We have been a presence for tribal
governments in the recent trust reform efforts of the Joint
Tribal/DOI Task Force. We are working to ensure that efforts to
reorganize the Department of Interior not infringe on sovereign
rights of tribal government to govern within their jurisdiction
and not drive wedges between tribal governments and their
members.
For instance, we submitted an amicus brief in the Cobell
case expressing concern that a third party receiver could
result in an interference and infringement on tribal self-
government. We are now reviewing the amicus brief submitted by
the National Congress of American Indians to the proposed plan
for trust reform submitted by the Department of the Interior
and the Cobell plaintiffs. We have drafted a trust reform
legislative proposal that establishes strong trust standards
for trust funds and trust asset management, strengthens tribal
governance in the trust reform arena, while ensuring the
protection of individual Indian rights over their assets and
funds.
We are also working on crafting legislation to resolve
tribal trust fund and trust asset management plans, and we look
forward to working closely with this committee on this critical
piece of legislation.
Regarding the current nomination of the Special Trustee for
American Indians, the ITMA Board of Directors is committed to
working closely with the person selected for this position.
ITMA has determined that as an organization, it will take no
position on the nomination of Ross Swimmer, and that each of
our member tribes must act in their own capacity regarding his
nomination.
ITMA is committed to continue to work with the Office of
the Special Trustee to improve the delivery of trust services
to Indian tribal governments and to the individual Indian
beneficiaries, and to make sure that Department of the Interior
fulfills its trust obligation owed to these Indian
beneficiaries.
ITMA has compiled specific recommendations for the new
Special Trustee with regard to what is known as the ``re-
engineering process'' currently underway at the Department of
the Interior. Accordingly, ITMA recommends that OST undertake
and implement the following: An effective and timely
consultation method regarding the necessary responsibilities
and business process element changes resulting from trust
management re-engineering; systems that will effectively manage
the critical data regarding all trust and restricted land
managed by Department of the Interior, including a central data
warehouse that protects and stores all of the land data,
included but not limited to survey, ownership, heirship, value
and all data regarding land encumbrances, codes and
restrictions; a financial system that manages all collections,
deposits, transfers, disbursements, imposition of third-party
obligations and statements of earnings, investment instruments,
and closure of all accounts that relate to the trust assets; a
strategy of trust management, education and training so the
Department of Interior employees, tribes and individual
beneficiaries clearly understand the many business process
elements and responsibilities of trust management.
Training must include, but not be limited to obligations,
controls, inputs, outputs and process flows related to the ways
that the Office of Special Trustee conducts trust service
management; a process for clear accountability for trust
responsibilities, included but not limited to clear line of
authority and responsibility, timeliness and dedication to
quality work; programs that promote self-determination,
governance and planning.
One final, but critical issue relating to the funding ITMA
receives from the Office of the Special Trustee. Our current
level of funding is $350,000 in fiscal year 2002. Based on the
increased level of trust reform activity, the Administration
requested $450,000 in fiscal year 2003. ITMA has requested
$500,000, based on our workload. As a minimum, we need the
level requested by the Administration, and we need assurance
from the Special Trustee that the Office of Special Trustee
will distribute the full amount of funding appropriated by
Congress. In prior years, the Office of Special Trustee has
withheld a portion of our funding--$40,000 in fiscal year
2002--and essentially required us to prove that we need the
money. This additional level of scrutiny is not only
unnecessary, but also has caused a strain on our relationship
with the Office of Special Trustee.
Therefore, ITMA is seeking specific report language in
fiscal year 2003 and 2004 appropriation bills directing the
Office of Special Trustee to release and distribute the full
amount of funding appropriated by Congress for ITMA. We want to
make sure that the new Special Trustee and the committee are
aware of this past problem and are willing to work with us in
resolving this issue.
This concludes my remarks. Thank you.
[Prepared statement of Mr. Sangrey appears in appendix.]
The Chairman. Thank you.
Before I go to some questions, I would like to invite
Senator Thomas if he has an opening statement, if you would
like to make that.
Senator Thomas. Thank you, Mr. Chairman.
I am sorry I am late. We had some other hearings going on.
I did want to try to be here. Mr. Swimmer was good enough to
stop by my office and we had a good long visit about the issue
that is here. It is a very difficult one, certainly. There are
lots of things we really have to come up and resolve. It seems
to me that he is going to be a real addition to that.
I just wanted to thank you for this hearing and thank Mr.
Swimmer for being the candidate for this job.
The Chairman. What we will do, since there are several of
us up here, we will just do several rounds. I would like to
start with Mr. Swimmer by telling you that we have a number of
letters of support, one from the Cherokee Nation, the Creek
Nation, the Choctaw Nation, the Chickasaw Nation, the Seminole
Nation, the Quapaw Tribe, and the Confederated Salish and
Kootenai Tribes of Montana. We also have letters of opposition
from the Navajos, the Oglala Sioux, the Confederated Tribes of
Warm Springs, the Iowa Tribe of Oklahoma, and the Absentee
Shawnee.
In looking at some of the letters, they almost always what
some of them believed was your effort to privatize the trust
funds. But as I listen to your opening statement, it seemed to
me what you were doing was trying to use a model of the private
sector and use that model within the government. Would you
clarify what it was you really wanted to do?
Mr. Swimmer. It has been discussed quite often in Indian
Country, more of late than it was then, in my opinion. What I
had hoped to do when I investigated where we were in the Bureau
of Indian Affairs, as I said, it was apparent that we needed
some modern systems. We also were being challenged as far as
accounting, and that was as far back as 1988. There was concern
about whether the accounting system that we were using and the
investment system was adequate and was giving adequate
information to the individual Indian participant.
In terms of the investment, you may recall, those of us who
were in the banking industry certainly do, during the 1980's it
was not a particularly good time for banks. One of the comments
that was made by the FDIC was that we always know where the
next failed bank is; that is where the BIA keeps its money.
That is not all bad, because the weaker banks were always
bidding high for the BIA money. The statute on investments says
that the Bureau can invest its funds in government securities
or securities that are guaranteed by the government. As a
practice, what was going on then was that several hundred banks
would be called every couple of weeks and asked what they would
bid on a $100,000 CD. Then the bank would fail and BIA would
collect its money from the FDIC, and collect the interest
sometime later, usually. It was not a system that I felt was
very professionally run.
What I suggested was that we look at an investment program
more like the private sector would use, and that we go out and
solicit advice and that we find private sector companies that
could invest those funds on our behalf--not put money in
somebody's bank, but be as an investment adviser, using
investment systems for government securities that were common
in the industry, and at the same time look at an accounting
system that again is commonly used in the private sector, and
see if we could not contract for those services.
There were a couple of efforts made at that, but ultimately
the company that bid on the contract was Security Pacific. I
understand after I left the Bureau in 1989 that there were a
lot of problems with that. I do not know what they were, but it
apparently did not go anywhere. It actually became part of the
whole issue with trust reform, which I think is positive from
that point of view. The fact was, as I mentioned, we ultimately
did manage to engage a firm that has a Trust 3000 system that
we were able to put all the accounts on. We do today in the
Special Trustee's Office, because the Office of Trust Funds
Management was moved over to the Special Trustee's Office, they
do manage those funds. Once the funds are received, they are
properly invested. We have a government securities program that
invests those funds in U.S. Treasuries, notes and bonds and
what have you. From there, the accounting is done on the
investments and the distributions are made to the individuals,
as they should be.
So that was really the genesis of those comments and the
criticism. It just was an effort to modernize the systems at
the time that the Bureau needed to.
The Chairman. Basically, you are saying some of the things
that we are actually doing now were out of those early
suggestions in the 1980's.
Mr. Swimmer. Absolutely.
The Chairman. We have moved a long way through Senator
Inouye's leadership, and perhaps mine too, in that we try not
to move legislation, as an example, until we hear very
carefully from the tribes about how they think it is going to
affect them. When you made these suggestions in the late
1980's, did you suggest that through the bureaucratic channels,
or did you suggest that directly to the tribes?
Mr. Swimmer. I think it was pretty widely discussed. I do
not remember that there was a lot of comment in Indian Country
about it. I did have a lot of discussion with then-Congressman
Mike Synar. I would tell the committee, Mike Synar and I were
personal friends. We were politically at odds, sort of at the
extreme of the spectrum, but Mike was then the Congressman from
the Second District of Oklahoma. He worked very closely with
the Cherokee Nation while I was the Principal Chief. I had
great respect for him.
Where we differed was, when I proposed to him that I
thought we should move into an accounting system, and that we
should take the accounts that we have, that we know begin with
those balances, and move forward. His opposition was that if
you do that, you will never get to an accounting of the ones
behind. He said,
I do not think we should go forward with that plan to start
a new accounting system now unless we are sure that we have
accounted and have accurate opening balances for everyone.
We had a difference of opinion on that. I thought that we
should go ahead and get the system underway and do it
correctly, at least for the future, while we went back and did
the accounting. It was a friendly disagreement, but he felt
strongly that it was a government responsibility, that the
government should do this accounting, and that one way of
making that happen was not to change systems until we had
actually done the backward accounting as well.
The Chairman. Thank you.
As you know, we have had two previous Trustees. They both
had a very difficult job and they both left, either resigned or
were pressured. You can use whatever terminology you want,
depending on your perspective. Each of them attributed their
problems to the lack of independence within the Department;
lack of independence from the Secretary. Can you tell the
committee whether you think, first of all, that independence of
the Trustee is necessary; and second, what in the Secretary's
proposed reorganization gives you the confidence that you will
have that independence?
Mr. Swimmer. I think the Special Trustee must have the
freedom to tell the Secretary there are problems, but the
Special Trustee is obligated to seek solutions. He cannot
simply say we have identified a problem. We are going to think
of ways to get it fixed. I think there are a lot of ways, and
part of it is because of the requirements of the Special
Trustee. There are a lot of ways that the Special Trustee can
interact with the Secretary. The statute even says that he must
interact with the Director of the BIA. The Special Trustee has
to be responsible for trust reform, and at the same time be
able to get the backing of the Secretary and the cooperation.
Again, I feel very strongly that the Secretary and the Deputy
and the other leadership in the Department is very willing to
do what is necessary to advance the trust reform and listen
very closely to the Special Trustee.
The Chairman. Let me ask one more before I turn to Senator
Inouye. That is, there are several bills that have been
floated. Senator McCain has a bill, S. 175, that would
eliminate the Special Trustee's Office and replace it with a
Deputy Secretary. Have you looked at that bill?
Mr. Swimmer. Just in passing, I have.
The Chairman. Okay.
Mr. Swimmer. I am aware of it.
The Chairman. I would appreciate it if you would look at it
and give us some feedback on it. For a couple of years, I have
been fooling with some language with a bill, too, that would
basically--and I do not have a background in banking and I do
not have a background in law--but I have a background in
Indians, and I will tell you what, I have seen them die waiting
for their money, and that is wrong. One of the things that I
suggested, and Senator Inouye and I have talked about, is that
in the private sector when you have a class action lawsuit,
usually there is a provision in there somewhere that if people
get tired of waiting for the class action lawsuit, they can opt
out and settle individually. That was one of the ideas we were
floating.
Obviously, the attorneys for Cobell do not like that, but
we have talked to the National Congress of American Indians and
some individual tribes, and the Administration, and they all
believe it has some merit. What would your thoughts be on that?
Mr. Swimmer. I would say anything that helps resolve the
litigation would be a tremendous help to Indian Country and
certainly to the Department of the Interior. It is one of the
most debilitating, if not the most debilitating issue as far as
trust reform today. It certainly is a great concern throughout
Indian Country.
The Chairman. If we pursue that, I might ask you to help us
with some of the language.
I would like to turn to Senator Inouye. I do want to tell
you before I do, however, that we do not need an answer for the
letters of support, but in some of the letters of opposition to
your nomination, I would like that to be part of the record.
The letters are, but I am going to submit on behalf of the
committee the questions that came up in those letters, and have
you answer them in writing, if you would.
Mr. Swimmer. Certainly.
The Chairman. Senator Inouye.
Senator Inouye. Thank you very much, Mr. Chairman.
Before I proceed, may I note the presence of the Deputy
Secretary of the Department of the Interior, Secretary Griles.
Welcome, sir.
Both prior Special Trustees in testimony before this
committee suggested that the reconciliation of trust accounts
be conducted by an entity totally outside the Department. We
have been told that there are some in the Department who feel
that if the United States is to retain full responsibility and
the legal liability for the management of the resources and
accounting of assets, then the management and the assets must
be conducted by the Department. What are your thoughts on this?
Mr. Swimmer. I think that trying to take the, as I believe
you are referring to, the historic accounting part out of the
Department for trust funds management would be extremely
difficult because of the interrelationship within the
Department of all the other agencies that have an impact on
Indian matters. I just do not believe that it would be a
practical solution to attempt to take a portion of the
accounting situation and try to separate it from the
government--if that was the question. I may not have understood
the question.
Senator Inouye. So you believe that since the government is
to retain full responsibility and legal liability, then the
management should be in your hands within the Department?
Mr. Swimmer. Yes.
Senator Inouye. And not even part of that goes out?
Mr. Swimmer. I am sorry?
Senator Inouye. You do not expect even part of that to go
out to a third party?
Mr. Swimmer. No.
Senator Inouye. Then don't you think that this would
somehow be in conflict with the proposals that you have been
supporting all along on self-governance and self-determination?
Mr. Swimmer. I think that it should go out of the
Department in terms of going to the tribes, and certainly the
management of tribal trust funds I have always advocated should
go to the tribes whenever and wherever possible. The 1994
reform Act permits that to be done. I fully support that. I
always have and always supported the concept of self-
governance.
I firmly believe that all of the management of the trust
assets should be under the management of the tribes whenever
they feel comfortable in doing that. I am sure, as you have
heard from some of the tribes, there are some that describe
themselves as under the responsibility of the Bureau of Indian
Affairs, and they do not accept self-governance. I think that
is fine. I think that as long as we need to provide those
services to those tribes directly, as direct service tribes,
then we should do that. But as tribes gain the confidence, the
ability and the desire to manage their trust funds and their
trust assets, then I fully support that and believe we should
provide whatever assistance to those tribes we can to help that
happen.
Senator Inouye. Mr. Swimmer, as former Assistant Secretary
and an attorney, in your opinion is the legal standard that
governs the United States when it manages assets held in trust
similar to the standard that is applicable to a private
fiduciary?
Mr. Swimmer. In many respects, it is. As a trustee, you are
always held to a high level of fiduciary responsibility. You
have a duty of loyalty. You have a duty of care. You have a
duty to communicate with your beneficiaries. All of those
responsibilities and all of those trust standards that we talk
about, however, are all modified by statute. The statutes that
govern the Indian trust are many. An example of that is in the
1994 reform Act, we have to provide an accounting under normal
trust law to a beneficiary. The 1994 Act actually not only
tells us to do an accounting, it says how to do that
accounting. It specifically tells the Department what goes on
that statement.
There are other examples. For instance, in the prudent
investor rule, normally a trustee is required to invest and do
so prudently, but also with moderate amounts of risk so that
the return to the beneficiary is reasonable. The statutes that
we have to deal with there require that we invest only in
government securities or the equivalent. That, of course, is
not only the lowest risk investment, but it is the lowest
return. Again, I suggest that tribes probably would do better
using investment advice from the outside, taking their money
and investing it, than what the Bureau can do because of those
kinds of statutory restrictions.
There is a common duty that says you cannot commingle funds
with the trustee. We do that every day because we invest the
beneficiary's money in government securities. As the trustee,
we are putting it in the U.S. Treasury by law.
So there are, in terms of the different normal trust
standards that you might see in the private sector, they do
exist in the Indian Trust as well, but generally are modified
quite a bit by different statutes. We are much different. In
the private sector, you tend to look at the trust document for
guidance. If as a banker I have a trust set up, I usually have
a document that backs it up and says, here are the things you
are going to do; here are the beneficiaries; here is how I want
you to distribute the funds; and here are the limitations on
investing.
In our world, it is governed by statute. We do not have
that document, but we do have a set of laws and regulations
that govern how we manage that trust.
Senator Inouye. I asked that question because in my reading
of the arguments before the Supreme Court in the Navajo case,
the government suggests that it has no fiduciary standard, and
that the United States has no legal obligations to the
beneficiaries beyond that set forth explicitly in the law.
Would you go along with that?
Mr. Swimmer. It is an argument that is going on right now
among the lawyers and in the litigation. I do believe that our
trust is governed by statute, and I think that we are
responsible to administer that trust in accordance with the
statutes. Oftentimes, there can be different interpretations of
a statute, about the degree of responsibility and whether we
have exercised that responsibility appropriately, and that may
be an issue in the Navajo case.
I believe that we do have the fiduciary duty and that we
have to overlay that duty with every statute and every
regulation that we administer. We have to do it. If the law
says we are to collect the money for beneficiaries, our duty is
that we collect it timely and we invest it timely. We cannot
simply collect it and leave it on somebody's desk for 1 month
while it is not gaining interest.
So we do have the additional responsibility as a trustee
not only to collect, but to be sure that it is invested timely
and appropriately accounted for. In that sense, I believe that
the trustee does have the additional responsibility of being a
fiduciary in the administration of the statutory
responsibilities.
Senator Inouye. It has been long suggested that the trustee
should be able to exercise independent judgment. Do you believe
that under the laws as they apply, you will be able to exercise
independent judgment?
Mr. Swimmer. Senator, I feel very comfortable about that. I
really do believe that I can exercise independent judgment and
give advice freely.
Senator Inouye. We have been advised that you were deposed
regarding the Department's issuance of coal leases to Peabody
Coal in the Navajo case, and also as part of the Administration
involved in the Cobell v. Norton case. Do you believe that this
would in some way compromise you?
Mr. Swimmer. I do not believe so. I do not believe I was
deposed in the Navajo case. I would have to check the record on
that. I was deposed in Cobell 1 month or so ago. I do not think
it would have any impact on my judgment.
Senator Inouye. These questions appeared in some of the
letters that we have received.
So you do not believe that your involvement in these cases
would somehow compromise your ability to serve as an
independent voice?
Mr. Swimmer. I do not believe so. As far as Cobell, whoever
is selected as Special Trustee is going to become involved very
quickly. So the fact that I have given a deposition in that
case I do not feel would compromise my ability at all to be
objective and to exercise the duty as the Trustee.
Senator Inouye. Thank you, Mr. Chairman. I have a few other
questions, but I think there are others.
The Chairman. Senator Thomas, did you have some questions?
Senator Thomas. Yes; very briefly. I note that we had the
Secretary up yesterday for a budget hearing in Energy. I
noticed that the budget for your work here has gone up
considerably--$130 million. What basically do you see happening
different as a result of that budget?
Mr. Swimmer. A significant amount of the budget increase
for trust has to do with the backward accounting. It basically
has to do with the Cobell litigation and to do the historic
accounting. There are, however, substantial increases in parts
of the budget that as part of the reorganization will permit
the Office of Special Trustee to have trust officers, and these
will be people trained in the law of trust and in the
management of trust, to have trust officers actually located at
the local and regional levels of the Bureau of Indian Affairs,
basically to provide advice and guidance and to work
collaboratively with the agency superintendents and the
regional directors on trust issues, and infuse within the trust
management the fiduciary relationship that sometimes is not
present when decision are made; just to ensure that those
issues are highlighted.
The other major impact of the trust officers would be to
have a link with the beneficiaries directly so that there is
not a question when a beneficiary comes to an agency office, to
know what their balance is in their account; when they last got
paid; what assets do they own and where. Now, we have many
Indian people who own properties on different reservations. The
trust officer, we anticipate having that information available
in one place so the beneficiary can get all of their questions
answered.
This is the first time that there has really been that
established beneficiary relationship within the trust area.
There is what we call sort of a one-stop shop where they can
come to get the information.
Senator Thomas. That is good. That is interesting. I am not
as close to it as all of you are, but it just seems like those
are things that should have been done a long time ago in terms
of getting this resolved.
In any event, having read over your resume and so on, you
have done a number of things with the tribes, Cherokee Nation,
and in your own professional life as a banker and a lawyer and
secretary and so on. Special Trustee is a difficult job. What
is your vision to be able to repair the relationship between
Indian Country and the Federal Government?
Mr. Swimmer. I am sorry?
Senator Thomas. What do you think can be one of the most
important things you can do to strengthen the relationship
between Indian Country and the Federal Government?
Mr. Swimmer. It is a whole host of things that need to
happen. It needs to be in partnership. Whatever the Federal
Government does, and particularly agencies that have a
relationship with Indian tribes, whether the BIA, Indian Health
Service, HUD, Department of Labor. There are a lot of different
Federal agencies today that deal directly with Indian tribes.
They need to have the partnerships there. They need to have the
communication with the tribes.
Within our agency at Interior, because we are the closest
with agencies actually on the ground working with individual
tribes, we need to have better working relationships; better
communication; the word ``consultation'' is used constantly. We
do need to have a method of doing that. I think what Chairman
Sangrey had mentioned, having ITMA as a sounding board and
advice to us is important. We spent a year working with the
Tribal Task Force in consultation and negotiations.
So I think the way that we improve that relationship is in
partnership, developing a sense of trust in the larger sense,
and then encouraging to the extent that we can--I just firmly
believe this--the opportunity, the right to build on the self-
governance of Indian tribes, trying to help them succeed in
managing their own affairs and being governments in the truest
sense and doing things that are governmental.
Senator Thomas. That is good. I certainly wish you well,
and I am sure most everyone thinks this problem needs to come
to some conclusion in the relatively near future. Thank you.
Thank you, Mr. Chairman.
The Chairman. I might suggest that one of the best ways I
know of in repairing relationships between the feds and the
Indian tribes is give them the money that we owe them. That
would help. We can only do that with some pretty aggressive
efforts on your part in your new position.
I am going to submit the rest of my questions to you, Ross,
in writing. As you probably know, Secretary Norton appeared at
our Energy Committee hearing the other day on the fiscal year
2004 budget. She informed us that the trust reform request for
fiscal year 2004 is 17 times larger than the original request
back in 1996. It is just skyrocketing. So I think that in this
day when we are facing perhaps a 10-year deficit, as you
probably know, it worries some of us when we talk about the
potential of throwing more good money after bad and not making
progress on finding a solution. So I would hope you make that a
very strong part of your agenda.
I am going to ask you to do something, maybe you might have
to do it in conjunction with Deputy Secretary Griles, and maybe
I already should have asked him, but February 26 is when we are
going to do our budget hearing, too. By that time, I would like
to have a breakdown, if I could, of the funds spent on both
litigation and trust reform since 1995.
In addition to that, because many of our people who are on
both sides of the issue seem to be just almost locked out and
doing verbal battle without very much resolve, I would like to
know--as you know, there have been a number of mediation
sessions. I would like to know what the results of those
mediation sessions have been and the outcomes, too. We do get
some periodic updates, but if you could provide the committee
with the latest results of that, and the efforts that have been
made to enter it under the supervision of Judge Lambert, too.
If you could do that, I would appreciate it.
Mr. Swimmer. Sure.
The Chairman. Senator Inouye, did you have any more
questions?
Senator Inouye. Mr. Chairman, I would like to submit other
questions, but I have just one more.
In the 1994 Trust Fund Management Reform Act, it says that
the Special Trustee must review departmental budget proposals
and must certify in writing, and I quote:
The adequacy of such requests to discharge effectively and
efficiently the Secretary's trust responsibilities and to
implement a comprehensive strategic plan.
I am not certain whether you have had an opportunity to
look over the historical accounting plan of individual Indian
money accounts and the fiduciary obligations compliance plan,
which was prepared by the Department as part of the Cobell
case.
Now, will these plans allow the Secretary to effectively
and efficiently discharge her trust responsibilities regarding
individual Indian money accounts at issue?
Mr. Swimmer. The two plans that you refer to were
developed, created specifically in response to particular
litigation issues. The Department has been working for nearly 1
year on developing a comprehensive trust asset management plan.
That plan contains a going forward look at trust reform, trust
improvement, doing a lot of things in a lot of areas, some of
which are not covered by the litigation.
The plan also takes into consideration the larger plan, the
work that has been done during the past nine months on what we
call the ``as is'' study, which is defining what all the trust
business processes are and looking at them across the board
from agency to agency and region to region, and then developing
what we call the ``2-B'' model, how are we going to reconcile a
lot of the differences in the way people do business. It is not
meant to try to centralize management. It is meant to try and
make the processes consistent wherever possible, which then
helps us in bringing technology software to support those
business processes.
I think that plan will lay out the strategy and the
business plan for the trust management for the long term. It
should be finished sometime in the next couple of months. The
process, however, of completing the ``as is'' and the 2-B and
actually going out and making some of these improvements at the
local level is estimated to take up to 2 years to fully
implement.
One of the most important things that we have to consider
now in trust management is a very methodical, and sometimes it
appears slow, approach, but it is to ensure that we use the
money wisely that is being appropriated for this purpose, and
that we are sure the kind of actions that we are taking are
good for the future.
Senator Inouye. So you are saying that as far as you are
concerned, you would be able to certify that this new plan that
you just described will allow the Secretary to effectively and
efficiently carry out her trust responsibilities.
Mr. Swimmer. I believe that is correct.
Senator Inouye. Thank you very much, sir.
The Chairman. Thank you, Mr. Swimmer. We really appreciate
your appearance. We will now move to Mr. Sangrey. Let me start
by asking you a little bit about your views on fractionated
Indian lands. Most of us know that that is really one of the
main obstacles to reforming trust management.
A few years ago, we did move a bill that was signed into
law to do a, for lack of a better word, a demonstration project
among several tribes to allow them to consolidate some of their
lands. It seemed to work very well, but we have not done that
nationwide for tribes. What is your organization's belief on
the best way to stop this fractionation, or how we should
proceed to try to resolve it? If you have somebody with you, if
she would identify herself for the record.
Mr. Sangrey. Mr. Chairman, I have Majel Russell who is an
attorney and consultant to ITMA who has been working on that.
The Chairman. Ms. Russell, maybe you would like to answer
that if you can.
STATEMENT OF MAJEL RUSSELL, ATTORNEY AND CONSULTANT,
INTERTRIBAL MONITORING ASSOCIATION
Ms. Russell. Yes; thank you. ITMA has just recently begun a
dialog to discuss fractionation problems in Indian Country. We
have identified several different issues that we would like to
pursue. One of them is to do effective probate-type planning or
assist tribes or to basically provide technical advice to
tribes on effective probate planning. We would like to look at
a uniform-type probate code that would work throughout Indian
Country.
Back to probate planning, estate planning, we would like to
see tribes assist their members to do knowledgeable wills that
would transfer lands on a one-over-one interest to the
individual members, rather than the common wills or lack of
wills which just generally create the fractionation problem
even to a greater degree.
So we are looking at some probate reform. We are also
looking at technical advice to tribes on estate planning and
development of wills.
The Chairman. Okay. Thank you.
I would tell you, then, that in another couple of weeks
after the break, we will be introducing a bill that I hope
addresses many of the things you have spoken about. Senator
Inouye and I are trying to proceed with that. In a couple of
weeks you will have that bill to look at. If you would give us
some feedback on it, I would appreciate it.
I talked early on a little bit about reaching settlement. I
would like to know, on your Association, would they support
congressionally led efforts to reach settlement by individual
Indians?
Ms. Russell. ITMA has been involved for a number of years
on attempting to develop a legislative solution to claims from
tribes for trust fund mismanagement. In fact, some years back,
ITMA had developed H. Res. 4485 in an attempt to develop a
mechanism that tribes could use for the settlement of claims.
We have recently begun a dialog this past year through the Task
Force, again with the Department of the Interior, to come up
with a solution for tribes who would like to settle their
claims.
The Chairman. Basically, you are talking about the tribes'
solutions and basically, as I understand you, it would delegate
the management functions to the tribes.
Ms. Russell. Yes.
The Chairman. Is that right? Well, my original question
really was, individual Indian people that would like to settle
with the Federal Government, should they be allowed to opt out
of the class action lawsuit? I guess that is the clearest way I
could ask it.
Ms. Russell. Intertribal Monitoring Association Board of
Directors has discussed that issue at great length. There are
some Board members who support that opportunity for individual
Indians to have an opportunity to opt out of the class and
resolve their claims, yes.
The Chairman. Thank you.
Senator Inouye.
Senator Inouye. Mr. Sangrey, in your presentation and
discussion with the chairman, you mentioned that you have
recommendations for specific legislation involving the
management of trust assets. If you do, can you share it with
us?
Mr. Sangrey. Yes, we will. We are having our final drafting
session this afternoon and we will share it.
Senator Inouye. We would like to look it over. Thank you
very much.
Thank you, Mr. Chairman. Are we ready to vote? [Laughter.]
The Chairman. Yes; I am too, basically, but some members
have asked us to hold this off until our next meeting to
actually vote on your confirmation. So we will postpone that
until the next meeting but from my perspective you should not
have any trouble whatsoever. It will be right after the break,
February 26. I look forward to your confirmation. I know you
will do a terrific job. I look forward to working with you, and
hope that you will have the patience of Job because it is going
to require that, and the strength of Hercules, too, to get you
through that new job. I hope that your wife will be able to put
up with that. We had a terrific Oklahoman here. As you know,
Neal McCaleb has resigned. He is also a personal friend as well
as a professional colleague of mine. Interestingly enough, his
wife is a personal friend of my wife, too, and they often
discussed the trials that you go through when you are in
Washington, D.C.
Let me close by saying I admire you for offering to come
back and try and resolve this problem we are having, Ross.
Mr. Swimmer. Thank you very much, Mr. Chairman. I think we
bring our wives to these sessions so that you will not beat up
on us too badly. [Laughter.]
The Chairman. Good thinking.
Mr. Swimmer. I did want to respond to Senator Inouye's
question once again. I honestly do not recall that I was
deposed in that Navajo case. I would like to research that and
I would like to keep that open. I will not say I was or I was
not. I just do not remember it. But I appreciate very much,
again, the committee's work, the staff of the committee. There
are some legislative things that can be done, and certainly
fractionation, I look forward to working with ITMA and others
on those kind of issues, and probate issues. They are most,
most critical to moving forward on the trust reform.
The Chairman. Thank you, Mr. Swimmer and Mr. Sangrey, for
appearing. This committee is adjourned.
[Whereupon, at 12 noon, the committee was adjourned, to
reconvene at the call of the Chair.]
=======================================================================
A P P E N D I X
----------
Additional Material Submitted for the Record
=======================================================================
Prepared Statement of Richard Sangrey, Chairman, Intertribal Monitoring
Association on Indian Trust Funds
The Intertribal Monitoring Association on Indian Trust Funds (ITMA)
is a representative organization of the following 58 federally
recognized tribes: Central Council of Tlingit & Haida Indian Tribes,
Kenaltze Indian Tribe, Metlakatla Indian Tribe, Hopi Nation, Tohono
O'odham Nation, Salt River Pima-Maricopa Indian Community, Fort Bidwell
Indian Community, Ewiiaapaayp Band of Kumeyaay Indians, Hoopa Valley
Tribe, Yurok Tribe, Soboba Band of Luiseno Indians, Southern Ute Tribe,
Coeur D'Alene Tribe, Nez Perce Tribe, Passamaquoddy-Pleasant Point
Tribe, Penobscot Nation, Lac Vieux Desert Band of Lake Superior
Chippewa, Sault Ste. Marie Tribe of Chippewa Indians, Grand Portage
Tribe, Leech Lake Band of Ojibwe, Red Lake Band of Chippewa Indians,
Blackfeet Tribe, Chippewa Cree Tribe of Rocky Boy, Confederated Salish
& Kootenai Tribe, Crow Tribe, Fort Belknap Tribes, Fort Peck Tribes,
Northern Cheyenne Tribe, Winnebago Tribe, Fallon Paiute-Shoshone
Tribes, Walker River Paiute Tribal Council, Jicarilla Apache Nation,
Mescalero Apache Tribe, Pueblo of Cochiti, Pueblo of Laguna, Pueblo of
Sandia, Three Affiliated Tribes of Fort Berthold, Turtle Mountain Band
of Chippewa, Absentee Shawnee Tribe, Alabama Quassarte Tribe, Cherokee
Nation, Kaw Nation, Kiowa Tribe of Oklahoma, Muscogee Creek Nation,
Osage Tribe, Quapaw Tribe, Thlopthlocco Tribal Town, Confederated
Tribes of Umatilla, Confederate Tribes of Warm Springs, Cheyenne River
Sioux Tribe, Sisseton-Wahpeton Sioux Tribe, Chehalis Tribe,
Confederated Tribes of Colville, Quinault Indian Nation, Forest County
Potawatomi Tribe, Oneida Tribe of Wisconsin, Eastern Shoshone Tribe,
and the Northern Arapaho Tribe.
Mr. Chairman and members of the Committee. As the newly elected
Chairman of the Intertribal Monitoring Association Board of Directors,
I thank you for this opportunity to testify on the nomination of Mr.
Ross Swimmer, a presidentially appointed position created by the 1994
Indian Trust Fund Management Act. My name is Richard Sangrey. I am a
member of the Chippewa Cree Tribe from the Rocky Boy's Reservation in
Montana and serve my tribe as Chief of Staff.
ITMA is an intertribal organization composed of 58 tribes across
the United States who organized in 1990 to actively monitor the
activities of the Federal Government to ensure fair compensation to
tribes and individual Indians for the mismanagement of trust funds.
ITMA's membership consists of a large number of those tribes with
significant funds and assets at stake in the trust reform debate. As
statistics recently submitted to the Court in the Cobell v. Norton
lawsuit confirm, the tribes in the United States own the majority of
the trust corpus currently under Department of the Interior Management,
although tribes have not been parties to the Cobell suit.
ITMA's mission has evolved over the years to include the monitoring
of the Federal Government's proposals to restructure the Bureau of
Indian Affairs to address the trust mismanagement issues identified by
the Cobell v. Norton lawsuit. ITMA has worked extensively with tribal
governments to develop alternatives for settlement of tribal historic
trust fund mismanagement claims and most recently has been a voice for
tribal governments in the recent trust reform efforts of the Tribal DOI
Task Force.
Throughout this last year of heightened trust reform efforts, ITMA
has been most concerned that reorganization of the BIA not infringe on
tribal sovereign rights to govern lands within tribal jurisdiction.
Additionally, ITMA has been most concerned that reorganization efforts
do not drive wedges between tribal governments and their members. ITMA
developed an amicus brief to the Court in the Cobell suit expressing
concerns that a third party receiver could result in an interference
and infringement on tribal self-government. Further, ITMA has joined
with the National Congress of American Indians in the amicus brief
submitted as a tribal response to the proposed plans for trust reform
submitted by DOI and the Cobell plaintiff's.
The Board of Directors of ITMA is committed to working with the
Office of the Special Trustee of American Indians to improve the
delivery of Trust services to Native American Tribes and the individual
beneficiaries. ITMA believes that the OST can effectively resolve
issues that have--and will--arise from the re-engineering process
currently underway at the Department of the Interior. The following is
a non-exclusive list of objectives that ITMA believes the Department of
the Interior and the OST must implement if ``trust reform'' is to mean
anything:
1. Establish and implement clear methods to account for the management
of Trust Funds, Trust Lands, Trust Assets and Trust Resources
by, at a minimum creating comprehensive Trust Fund, Trust Land,
Trust Asset and Trust Resource ownership, location, and use
inventories that provide a method for accounting to any
beneficiary Indian or tribe of what land is being effectively
managed, and where problems or exceptions require greater
attention.
2. Establish and implement reasonable methods for consulting with
Indian and Tribal beneficiaries to establish effective plans to
manage Trust Funds, Trust Assets, Trust Lands and Trust
Resources that implement the intent of the Indian or Tribe
where such implementation is reasonable.
3. Consult with each Indian beneficiary and Tribe in the management of
the Trust Funds, Trust Assets, Trust Land, or Trust Resources
managed by the Secretary, and implement the objectives
identified by the Indian Beneficiary or Tribe for any resource
managed for them to the extent practical.
4. Establish clear guidance on what functions with regard to Trust
Funds, Trust Assets, Trust Land and Trust Resources are
inherently executed by the Secretary and the OST, and how these
functions are to be executed by a Tribe upon the execution of
Tribal Compacting and Contracting agreements under P.L. 95-638
which establishes consistency in the execution of such
agreements.
5. Provide a yearly program of education and communication for the
Secretary's and the OST's Trust service delivery personnel as
well as for the beneficiaries, providing the Secretary's and
the OST's personnel, the relevant staff of Indian tribes, and
interested individual beneficiaries with an understanding of
the Secretary's and OST's role and responsibilities with
relation to the management of Trust Funds, Trust Land, Trust
Resources and Trust Assets.
6. Build a common data store for all Trust Funds, Trust Land, Trust
Resource and Trust Assets related information. Such a data
store shall, at a minimum operate in the following manner:
Provide a single method of entry for updates and
maintenance;
Avoid redundant or inconsistent data in multiple
systems;
Provide query capability by many organizational units;
and
Provide accurate information for reporting.
7. Establish a Memorandum of Agreement with each tribe regarding the
privacy to be afforded tribal family information.
8. Establish an office to coordinate investigative efforts intended to
establish the location of beneficiaries whose whereabouts are
unknown.
9. Create an office of Inter-Bureau Communication and Coordination to
oversee daily operations and facilitate communications and
issue resolution between each of the Secretary's bureaus on
issues related to the management of Trust Lands, Trust Assets
and Trust Resources.
10. Segregate the staffing and management of probate responsibilities
from all other Trust Funds, Trust Land, Trust Resource or Trust
Asset management activities to ensure that the decedent's
interests are appropriately balanced with overall Trust
objectives, while still providing for the use of integrated
data in probate matters.
11. Establish that the substantive laws or customs any Indian Tribe
relating to Probate shall apply first to provide for the
distribution of a decedent's estate. To the extent there are no
tribal laws or customs to apply, such descent shall be made in
accordance with the laws of the state in which the decedent
resided at the time of their death. Where relevant tribal law
or custom applies, and allows for estate planning methods to be
employed to avoid the need to probate estates it shall apply
and any Indian beneficiary shall have the right to use such
laws to avoid probate to provide for the distribution of Trust
Funds,.Trust Land, Trust Resources or Trust Assets; or where no
tribal law or custom applies, any Indian beneficiary shall have
the right to elect to provide for an estate plan for themselves
under the laws of the state of their legal residence that
includes providing for the distribution of Trust Funds, Trust
Land, Trust Resources or Trust Assets.
12. Consolidate all Indian beneficiary probate adjudication activities
into a single organization, moving all Deciding Officials into
a single organization to simplify and make uniform the
administration of Probate activities.
13. Establish uniform regulations to govern all probate adjudication
activities.
14. Implement integrated, nation-wide title and realty information
systems that accurately identify Trust Lands, Trust Resources,
and Trust Assets, and the complete ownership thereof, all legal
encumbrances (mortgages, life estates, etc.), and non-
expiratory rights.
15. Create a single archive system based upon electronic information
(and where electronic information is not available, paper
information) provided by the Bureau that complies with Federal
record retention policies.
16. Streamline and consolidate, to the extent practicable, recordation
and encoding procedures, eliminating duplicate efforts and
data, in an effort to free resources to ensure that Trust
Funds, Trust Land, Trust Resource, and Trust Asset information
is maintained in a timely manner.
17. Eliminate redundant staff functions to eliminate inconsistencies
across systems and to reduce the existing backlogs.
18. Implement digital imaging technology at all levels under the
Secretary's and the OST's authority, using this technology to
maintain a complete and accurate record of Trust Funds, Trust
Lands, Trust Resources, Trust Assets and the ownership and
utilization of such funds, land, resources and assets.
19. Develop regulations that provide for an expedited procedure for the
acquisition of fee interests in Trust parcels.
20. Develop regulations that ensure beneficiary consultation, consent
and compensation for all rights of way, easements and mineral
access agreements that related to Trust Lands.
21. Establish a specific source of funds to address ``unperfected
Rights of Way,'' that will be used to remedy Unperfected Rights
of Way that negatively encumber Trust Lands.
22. Establish an office of beneficiary consultation and support
services that provides individual Indians and tribes with a
point of contract for all consultation questions regarding the
Secretary's management of Trust Funds, Trust Lands, Trust
Resources and Trust Assets.
23. Develop guidelines for beneficiary consultation to improve the
inherent partnership between the Secretary and beneficiaries.
24. Develop guidelines for appraising Trust Assets, Trust Lands, or
Trust Resources that defines appraisal principles, appraisal
terminology, the appraisal process, and the volatility of the
real estate market.
25. Implement Trust Assets, Trust Lands, or Trust Resources appraisal
training that all persons who work for the Secretary and who
deal with land valuations must attend. Such training must
include a written examination, and no person who scores below a
reasonable standard established by the Secretary shall appraise
Trust Assets, Trust Lands, or Trust Resources.
26. Develop guidelines and procedural manuals to provide more
specificity regarding the Forest Management Deduction process,
requirements and timelines.
27. Reform 25 C.F.R. part 163 to provide more specificity for
procedures and requirements of collecting Forest Management
Deductions.
28. Consult with Tribes to enhance the regulations, guidelines,
policies and manuals to include clear and specific roles,
procedures, formats, reporting and schedules for the oversight
of federally managed and tribally managed forestry programs.
29. With consultation from the Tribes, develop regulations that promote
Tribal control and self-determination while at the same time
ensuring the Secretary's obligation to provide oversight and
review of Indian Trust asset management programs.
30. Develop and implement regulations that adequately define rangeland
trust management.
31. Implement a Geologic Information System based management
information data base and reporting system for all Trust Lands,
Trust Assets, and Trust Resources.
32. Develop regulations that regularly monitor and audit the management
of Trust Lands, Trust Assets, and Trust Resources for
compliance with the principles of the Trust Responsibility
enunciated herein.
33. Consult with Tribes to develop comprehensive guidelines for the
uniform management of all rangeland under the Secretary's
jurisdiction.
34. Initiate a program of workshops for Tribes and individual Indians
that provides information about leading animal husbandry and
land management practices, assists in counseling and problem
solving.
35. Identify the most valuable Trust Lands, Trust Resources and Trust
Assets and develop specific strategies for the development of
this potential.
36. Create standard procedures and decision criteria for selecting
appropriate long-term encumbrance vehicles (lease, permit,
assignment, information agreement, etc.) for Trust Lands, Trust
Resources and Trust Assets that applies to and is enforced
within all Bureau regions. Develop standardized consent forms
that reinforce Indian Land Consolidation Act consent
requirements. Develop regulations to be published in 25 C.F.R.
162 subparts C and D (the Residential and Business subsections
currently ``reserved'' but blank'') that clarify procedures for
determining which encumbrance vehicles should be used in each
circumstance, and how such encumbrance is to be uniformly
documented.
37. Record monetary liens against lessees if rental payments are
delinquent.
38. Enforce against un-consented trespasses on Trust Lands.
39. Restructuring existing lease agreements upon renewal to meet the
obligations imposed by this statute and any regulations
promulgated hereunder. Nothing in this statute shall be
construed as terminating or invalidating an existing lease or
agreement related to Trust Land that was otherwise in
compliance with the regulations or practices of the Secretary
at the time of its signature.
40. Initiate formal information-sharing programs between the Bureau,
Tribes, contracted service providers, and Individual Indian
owners of agricultural lands.
41. Conduct a thorough review of key Federal statutes and regulations
which can negatively affect the management and use of Trust
Land, Trust Resources and Trust Assets and provide such report
to Congress and all Indian Tribes. Such report shall include
remedies to remove or refine those statutes and regulations in
conflict with the management of Trust Lands, Trust Assets, and
Trust Resources.
42. Develop regulations to delegate to Tribes the authority to provide
environmental assessments where such assessments are required
for the management of Trust Lands, Trust Assets, and Trust
Resources.
43. Standardize consent forms and develop a single set of criteria
triggering the performance of the consent process for the
leasing of agricultural Trust Lands.
44. Integrate agriculturally related billings and collections the
Integrated Trust Management system.
45. Develop new regulations that provide a more equitable approach to
funding Trust Asset development strategies among all tribes.
46. Review Trust Asset water resources to develop target groups,
focused in two areas:
In areas where water rights are most at risk of being
abused--develop rights communication, negotiation and
protection strategies.
Areas where water resources are most valuable to the
Trust or may be critical to the financial well-being of
beneficiaries--finance water resources development projects
proactively as part of an economic development strategy.
47. Reengineer, streamline, and standardize the Bureau minerals leasing
processes to conform with the principles set fort herein.
48. Update and standardize lease forms, and develop regulations that
create an integrated approach to minerals lease management with
common systems, data stores and a documented communications
plan.
49. Compile and publish all existing Memorandums of Understanding or
Agreement (an ``MOU/A'') related to the management of Trust
Lands, Trust Assets, and Trust Resources. This compilation
shall include an indication of applicability or category of
each MOU/A, a brief summary of contents, and a reference to who
is the designated responsible party under the Secretary for
each MOU/A.
50. Revise and establish clear guidelines for establishing bonding
levels for Indian trust mineral leases that address the
conflict between reclamation requirements and competitiveness
of Indian trust mineral assets.
51. Provide training to all persons who work for the secretary related
to bonding mineral leases to ensure that each person is
fascicle with and can enforce the bonding guidelines. The
Secretary shall establish a minimum of competence in this area,
and shall test all persons to oversee the bonding of mineral
assets. Only those persons to meet or exceed the Secretary's
standards shall be authorized to oversee bonding for mineral
leases for Trust Lands, Trust Assets, and Trust Resources.
52. Implement electronic document imaging and retrieval capabilities so
beneficiary documents and records can be scanned once and made
available to appropriate Secretarial staff nationwide on
demand.
53. Implement workflow or case management technology combined with
imaging capability to manage the information and processing
flow and ensure that essential steps and controls are taken, as
well as minimize process loops and rework. Decentralize account
maintenance through enhancements to information systems and
appropriate dual controls, so account administration authority
resides with designated field officials.
54. Develop methods to contract with private banking institutions to
accept lease payments, deposit such funds received , in
accounts, provide lock box services, and document the receipt,
storage and investment of funds, and transfer such
documentation to the Integrated Trust Management System.
55. Establish a centralized collection, deposit, and posting
information collection process for documenting the depositing
and posting of funds to beneficiary accounts in a timely
manner.
56. Develop the guidelines to determine when surveys of Trust Lands,
Trust Assets, and Trust Resources are needed, what type is
warranted, and who should perform the survey.
57. Inventory the survey needs for Trust Lands, Trust Assets, and Trust
Resources, with such data becoming a part of the Integrated
Trust Management system.
58. Coordinate with other bureaus under the DOI to centralize all
survey and land record keeping activities into one bureau under
the Secretary's direction. Create one unified automated land
information and record processing system that is compatible
with other record systems and easily accessible by everyone
needing the information. The system could include survey and
land ownership information and be integrated with other Federal
automated record systems, such as title systems. Encourage
Tribes to provide private survey records in the system so their
land information is included.
Regarding the current nomination for the Special Trustee for
American Indians, the ITMA Board of Directors is committed to working
closely with the person selected for this position. ITMA has
determined, that as an organization, it will take no position on the
nomination of Ross Swimmer and that each of our member Tribes must act
in their own capacity regarding his nomination. ITMA is committed to
continuing to work with the Office of the Special Trustee to improve
the delivery of trust services to Indian Tribal governments and the
individual Indian beneficiaries and to make sure that the Department of
the Interior fulfills its trust obligations owed to these Indian
beneficiaries.
One final but critical issue relates to the funding ITMA receives
from OST. Our current level of funding is $350,000 in FY 2002. Based on
the increase level of trust reform activity, the Administration
requested $450,000 in fiscal year 2003; ITMA requested $500,000 based
on our workload. At a minimum, we need the level requested by the
Administration, and we need assurance from the Special Trustee that OST
will distribute the full amount of funding appropriated by Congress. In
prior years, OST has withheld a portion of our funding ($40,000 in FY
2002) and essentially required us to ``prove'' that we need the money.
This additional level of scrutiny is not only unnecessary but also has
caused a strain in our relationship with OST. Therefore, ITMA is
seeking specific report language in the FY 2003 and 2004 appropriations
bills directing OST to release and distribute the full amount of
funding appropriated by Congress for ITMA. We want to make sure that
the new Special Trustee and this Committee are aware of this past
problem and are willing to work with us on resolving this issue.
Thank you for the opportunity to submit written and oral testimony.
We look forward to continue working with the Office of Special Trustee
and Congress.
[GRAPHIC] [TIFF OMITTED] T5179.001
[GRAPHIC] [TIFF OMITTED] T5179.002
[GRAPHIC] [TIFF OMITTED] T5179.003
[GRAPHIC] [TIFF OMITTED] T5179.004
[GRAPHIC] [TIFF OMITTED] T5179.005
[GRAPHIC] [TIFF OMITTED] T5179.006
[GRAPHIC] [TIFF OMITTED] T5179.007
[GRAPHIC] [TIFF OMITTED] T5179.008
[GRAPHIC] [TIFF OMITTED] T5179.009
[GRAPHIC] [TIFF OMITTED] T5179.010
[GRAPHIC] [TIFF OMITTED] T5179.011
[GRAPHIC] [TIFF OMITTED] T5179.012
[GRAPHIC] [TIFF OMITTED] T5179.013
[GRAPHIC] [TIFF OMITTED] T5179.014
[GRAPHIC] [TIFF OMITTED] T5179.015
[GRAPHIC] [TIFF OMITTED] T5179.016
[GRAPHIC] [TIFF OMITTED] T5179.017
[GRAPHIC] [TIFF OMITTED] T5179.018
[GRAPHIC] [TIFF OMITTED] T5179.019
[GRAPHIC] [TIFF OMITTED] T5179.020
[GRAPHIC] [TIFF OMITTED] T5179.021
[GRAPHIC] [TIFF OMITTED] T5179.022
[GRAPHIC] [TIFF OMITTED] T5179.023
[GRAPHIC] [TIFF OMITTED] T5179.024
[GRAPHIC] [TIFF OMITTED] T5179.025
[GRAPHIC] [TIFF OMITTED] T5179.026
[GRAPHIC] [TIFF OMITTED] T5179.027
[GRAPHIC] [TIFF OMITTED] T5179.028