some instances, tribes have their own programs which we can dovetail into and expand on with the money that the Bureau has.

The solutions to fractionation today are the same solutions that were announced in 1938 and actually were discussed in 1900. We have articles that were written by scholars back then and it said fractionation is the Achilles heel, you are going to die from it. We know that, and we are. If it were not for the limited bit of computers that we have today, we would have more than the disaster we already have. Just to give a few statistics. We have currently as a result of the 1994 reform act, we have to maintain accounts for every interest holder. There are 4 million interests and 400,000 interest holders, each of those having an average of about 10 interests scattered all over the country. We have over 19,000 account holders today that have less than $1 in their account and no activity for the past 18 months, yet we have to maintain those on a set of books and report periodically to those account holders. We have people who we call "whereabouts unknown," because, frankly, they are lost. We have returned envelopes from them with "addressee unknown," "no forwarding address." And we have at least four different agencies and private sector companies that are looking for these people constantly. Over one hundred of these high accounts have hundreds of thousands of dollars, millions of dollars in them. Senator CONRAD. Any of them named Conrad? [Laughter.] Mr. SWIMMER. I will check the list.

The CHAIRMAN. If you would yield for 1 moment, Senator.
Senator CONRAD. I would be happy to yield to the Chair.

The CHAIRMAN. The cost for fiscal year 2004 is going to be about $21 million. I may have my numbers wrong, but I understand if this were done nationwide, which we need to do eventually, it will cost over $1 billion. Is that one of the things that is really holding it up, the fact that we are not providing enough money to be able to expand it?

Mr. SWIMMER. If that were the only solution. Congress has an opportunity here as well. And obviously working with your staff and others on the House side, there are several things that I think could be done that are currently under discussion.

The CHAIRMAN. But the bottom line is that when you do the buyouts, you have got to come up with an awful lot of money.

Mr. SWIMMER. That is right. If the buy-out is the plan, then in order to reduce the fractionation just with that one solution, it is in excess of $1 billion to bring it down to a reasonable level.

Senator CONRAD. That is exactly where I was headed. I want to say this, if I could. To me, we are going down a blind alley because we are not going to come up with $1 billion or $2 billion for this purpose, not with the extraordinary needs that are out there for health care, for housing, for sanitation, for law enforcement. So that is not going to happen. And the Chairman is right, the Federal budget deficits, we are going to have a deficit on a unified basis of over $400 billion this year on an operating basis between $500 and $600 billion this year. So I do not think that is a fruitful promise of a solution. And I get a feeling, Mr. Swimmer, that you sense that as well. There has got to be some other creative things that we could do. I sense from your comments, Mr. Swimmer, that you are thinking of something that would involve the tribes and their

resources as well and the resources of others who might be interested in the buy-out. I do not think this should just be on the Government's shoulders here. There is an economic interest in accumulating those fractionated interests and somehow we have got to capture the power of that. This is going to eat us alive. I do not care how big a computer one has or how powerful, the fundamental problem is I heard you say you have got 19,000 accounts of $1 or less, I think we ought to give a legal notice, a generalized legal notice and we ought to close out those accounts. It does not make any sense to maintain 19,000 accounts with $1 or less. That serves no one's interest. It just complicates the situation. And I bet you we have got tens of thousands more that have less than $25. Would I be right?

Mr. SWIMMER. Absolutely.

Senator CONRAD. Do you have a number on that, Mr. Swimmer, on how many accounts would we have that have less than $25?

The CHAIRMAN. If I might interject. I understand there are hundreds of thousands; is that correct? And by the way, those $1 accounts, that costs roughly about $200 a year to do all the paperwork to administer those $1 accounts.

Mr. SWIMMER. Yes; most of the accounts, frankly, are very, very small accounts, I mean in pennies. It is not unusual to have 2,000 people own an 80-acre tract. You lease it for $6 an acre, you divide $480 among 2,000 people, and you get less than a penny. Under the law, we are supposed to invest that less than a penny, pay interest on it, account for it, and send out a statement every quarter. There are some things that you can do, and the operative word is "you," that we need. We need some relief and some fix on the 1994 act, because it gives the impression that there is this trust like a normal trust, that you actually have assets in this trust. Many of these fractional interests are worth less than a penny themselves. The piece of ground you could not even measure because it is so tiny if you were to partition in kind. But those are the kinds of things that I think we could through collaborative work with the committee and Congress and the Department perhaps fashion some solutions for some of it.

Senator CONRAD. I am going to complete on this note, if I could, Mr. Chairman. I would like for the committee to give a formal request to Mr. Swimmer to consult with tribes and to give us a recommendation on a series of action steps to be taken by us to alter the law to start to break through on this question. I just want to make clear, it may be controversial but I think it should not be controversial, we ought to take these very small accounts, we ought to give legal notice, we ought to give 90-days, we ought to spread the information widely, and then we ought to collapse those accounts, take the money and use it for broad Indian people's welfare. Because otherwise, this thing is going to eat us alive.

The CHAIRMAN. It already is.

Senator CONRAD. And there is no way to then focus on the larger amounts of money and the larger problems to begin to solve this problem. We have got to cut the chaff.

The CHAIRMAN. Yes; it is getting worse with every generation of

Senator CONRAD. And it is in no one's interest. Nobody can benefit by an account with $18 in it. I think it is time that we really get serious about bold steps, bold steps to deal with these problems.

The CHAIRMAN. We will take your recommendations off the tape. I will check with our vice chairman, Senator Inouye, and with his agreement, we will do that. We will send you a letter, Mr. Swimmer, asking for some recommendations on how you think it could be solved.

Mr. SWIMMER. If I could just quickly address this point, though. We have put together a working group at Interior and we have also put out a Federal Register Notice inviting tribes to send representatives to us who would be interested in working on this problem. That working group should be put together within the next thirty days or so and it would follow very much along the lines of what you are suggesting, it is to come up with those recommendations then to give the committee. We would be very happy to do that and look forward to working with you on this.

The CHAIRMAN. And you might also look up S. 519 I believe it is that we just reintroduced, to establish a tribally-owned bank, the tribes themselves could belong to, that would be authorized to perform land repurchases, too.

Senator CONRAD. Could I ask one other question as part of this, Mr. Chairman.

The CHAIRMAN. Yes.

Senator CONRAD. No. 1, I hope you put this on a fast track, not a slow track. That you ask this group to meet and make recommendations quickly, because otherwise the moments get lost around here. No. 2, that you also give us a recommendation— again, $21 million and a $1- to $2-billion problem, we are never going to get the job done. We also need as part of the recommendation what creative ways could be devised using the economic interest of those who might acquire the fractionated interest to pay for this. I hope that that would be part of the recommendation.

Mr. SWIMMER. We will certainly take those under consideration. If I could, I would just make one caveat to all of this. That is, as long as we are involved in this litigation and the Cobell court is intent on going forward as it is, we do have issues regarding our responsibility as a trustee no matter how small the piece of property is. So we will continue working on that and at the same time continue working with the committee on ways in which we can carry out that trust more effectively.

The CHAIRMAN. Okay. I thank you.

Anything further, Senator Conrad?

Senator CONRAD. Nothing further, Mr. Chairman.

The CHAIRMAN. Well thank you for appearing. I am sorry we had to hold you up because of a late start and the votes. But we will follow up with that recommendation after we talk to Senator Inouye.

Mr. SWIMMER. Good. Thank you.

The CHAIRMAN. We will now move to the second panel and try and give them equal time, although we are going to be a little tight. We have five members on the second panel. Tex Hall, president, National Congress of American Indians; John Berrey, chair

man, Quapaw Tribal Business Committee; Clifford Lyle Marshall, chairman, Hoopa Valley Tribal Council; Keller George, president, United South and Eastern Tribe; and Richard Sangrey, acting chairman, Intertribal Monitoring Association, from Albuquerque.

Since we have so many, as I mentioned, I want to give equal time for the two panels, but because we have so many in the second one, I am going to have to ask you to abbreviate your comments down to about 5 or minutes so we do have some time for some questions. I do not have anybody to take the gavel for me here and I have a conflict, too, and I do not want to just leave you here talking to the wall. So try and abbreviate as best you can. We will start with President Tex Hall. Go ahead, Tex. STATEMENT OF TEX G. HALL, PRESIDENT, NATIONAL CONGRESS OF AMERICAN INDIANS, WASHINGTON, DC, ACCOMPANIED BY JOHN BERREY, CHAIRMAN, QUAPAW TRIBAL BUSINESS COMMITTEE, QUAPAW, OK; CLIFFORD LYLE MARSHALL, SR., CHAIRMAN, HOOPA VALLEY TRIBAL COUNCIL, HOOPA, CA; KELLER GEORGE, PRESIDENT, UNITED SOUTH AND EASTERN TRIBES [USET], NASHVILLE, TN; AND RICHARD SANGREY, ACTING CHAIRMAN, INTERTRIBAL MONITORING ASSOCIATION, ALBUQUERQUE, NM

Mr. HALL. [Greeting in native language.] Senator Campbell, Senator Conrad, members of the committee, thank you for giving me an opportunity to testify on the proposed reorganization of the BIA. I listened very intently to the comments and the questions from the Department of the Interior, BIA. As the committee knows, I am also the chairman of my tribe, the Mandan Hidatsa and Arikara Tribe, a large trust asset tribe with a large amount of IM account holders, and I am also from the Great Plains or the Aberdeen area where 40 percent of all of the trust accounts in the country are in the Aberdeen area. But today I am going to testify on behalf of the National Congress for American Indians.

I would like to express my continued appreciation to you, Chairman Campbell and Senator Conrad, for all your hard work and your dedication to protect the rights of tribes and individuals. Among the most important of these rights is the Federal trust responsibility. When we signed our treaties we gave up millions of acres of land, our economic engine, many of which were our sacred homelands. And for more than a century we have been forced to put the management of our trust resources in the hands of the United States Federal Government. And we know so far the situation has been a mess. In our eyes, it shows that it is hard to trust the Department, the agency based on this historical mismanagement. In many instances, like today, we have to turn to our friends in Congress for your help. You have stood by us in the past, and today we are asking you to stand by us again.

The proposed reorganization of the BIA we believe is an affront to our sovereignty. It is an affront to the fundamental concept of consultation. And it violates the very essence of government-to-government relationship. We had a Task Force and the Government walked away from the Task Force last fall and we have not met since. I would like to state for the record that on May 29 the tribes will be convening a task force. If it is by ourselves, it will be by

ourselves, because we have a vested interest-there are assets in our accounts.

Tribal leaders, more than anyone, understand that the BIA must change the way it conducts business. We are invested in their process because it affects us like no one else in America. We not only want but need to see successful change and improvement within the BIA. So we come to you today with a simple message, a straightforward request, and an alternative approach for Congress to consider.

First, our message is that the Interior Department's attempts to reorganize are wrong. Our request is that Congress stop it. The reorganization is wrong for a number of reasons. The foremost concern to us is the fact that we were not consulted since last fall. And as you know, the Department went ahead with the reorganization plan by approaching the Appropriations Committee. Only later did we find out about their plan. We believe this is a breech of the duty to consult, and they have an executive order that requires them as a trustee to consult, and given that it is our trust resources that are at stake, a possible breech of that trust responsibility in itself. Second, the plan will not work. As the committee knows, the Department has already invested millions of dollars to produce an "as is" study of trust services, a study which is supposed to drive the "to be" phase of re-engineering of those trust services. Now, however, the Department wants to cut out the re-engineering phase and just start reorganizing, as we have seen in the charts today. I ask, what was the point of the "as is" study? Of the millions of dollars that were spent? It seems to us the Interior Department and the BIA could have saved Congress and Indian country a whole lot of money and headache by telling us that trust management cannot have been and never will, we are not going to listen to you.

Surely, it makes no sense to go ahead with the reorganization before getting the results of its own management study. The new BIA organizational structure must be driven only after the tribes and the Department officials have at least had the chance to study this "as is" study. Anything else is putting the cart before the horse.

Then there is the fact that the Department's reorganization plan is too expensive, as was echoed by your comments. So not only do we think the Department's reorganization plan will not work, but to add insult to injury, we, the tribes, are being asked to pay for it. Right now, Interior is asking Congress to nearly double the budget for trust management in the Office of Special Trustee$123 million increase to a projected annual budget in fiscal year 2004 of $275 million. Some $71 million of that comes right out of tribal pockets, $32 million comes out of school construction. You could not ask for a more symbolic and ironic example of the Government's callous indifference to our needs. We are literally being asked to pay for the Government's mistakes with our children's education money. We do not think this is right that our children should be forced to continue to study in aging and crumbling school buildings in order to pay for the reorganization plan. If the Department needs more resources, then, at the very least, they should not come out of BIA programs.