REORGANIZATION OF THE BUREAU OF
INDIAN AFFAIRS

WEDNESDAY, MAY 21, 2003

U.S. SENATE,

COMMITTEE ON COMMITTEE ON INDIAN AFFAIRS,

Washington, DC. The committee_met, pursuant to notice, at 10:08 a.m. in room SR-485, Senate Russell Building, Hon. Ben Nighthorse Campbell (chairman of the committee) presiding.

Present: Senators Campbell and Conrad.

STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

The CHAIRMAN. The committee will be in session.

Welcome to the committee hearing on the reorganization of the Bureau of Indian Affairs [BIA] and the Office of Special Trustee for American Indians.

Senator Inouye will try to be here; he has a conflict this morning. Senator Daschle sent a statement over that I will include in the record for him. Several Senators may be coming in and out during this morning, but we are going to go ahead and start.

The BIA is no stranger to reorganizations. The Congressional Research Service tells us that since the issuance of the Merriam Report in 1928 there have been 18 major attempts to reorganize the BIA, including the current one. Anyone involved in Indian affairs knows that the current Indian trust management system needs to be updated and reformed.

For decades the system was allowed to remain in place without reform, without improvement, and without much attention being paid to it. Only in the past 15 years or so have the tribes, the Congress, and the executives looked for ways to update the centuries. old framework. I believe that we need to update the computer and accounting hardware, but we also need to revisit the basic principles of the trust, such as legislating appropriate standards for Federal and tribal performance in an era of Indian self-determination, expanding tribal control and decisionmaking for their own assets without saddling the United States with all the liability for the decisions, and bringing the discipline and advantages of the private sector to how Indian funds are managed and invested.

From January 2002 to November 2002, the Joint Department of the Interior-Tribal Task Force on Trust Reform met in exhaustive consultations and meetings around the country but could not reach

consensus on the issues it confronted. In December 2002, Congress gave the Department the green light to reorganize with $5 million to begin to carryout the reorganization. That is the subject of today's hearing.

Our first panel will consist of the newly confirmed special trustee, Ross Swimmer, delighted to see you here, Ross, and the acting assistant secretary of Indian affairs, Aurene Martin. In the second panel we will hear from the National Congress of American Indians, the Intertribal Monitoring Association, the United South and Eastern Tribes, the Quapaw Tribe, and the Hoopa Tribe of California.

Senator Inouye, as I mentioned, will not be here, maybe not at all, but certainly not until later. So his written testimony will be included in the record.

[Prepared statement of Senator Inouye appears in appendix.]

The CHAIRMAN. With that, Ross, if you would like to go ahead. Welcome to the committee. If you would like to depart from your written testimony, feel free to do so.

STATEMENT OF ROSS SWIMMER, SPECIAL TRUSTEE FOR AMERICAN INDIANS, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC, ACCOMPANIED BY AURENE MARTIN, ACTING ASSISTANT SECRETARY, BUREAU OF INDIAN AFFAIRS Mr. SWIMMER. Thank you, Mr. Chairman. I appreciate this opportunity to appear before you today, and particularly in the capacity as special trustee. I thank the committee for its efforts in that regard as far as the confirmation is concerned. We do have prepared testimony and would like to submit that for the record. The CHAIRMAN. It will be included.

Mr. SWIMMER. Mr. Chairman, the primary purpose of the reorganization that we are to talk about today is to improve the Department's ability to fulfill its trust responsibilities to individual Indians and tribes. It is important that this committee recognize and understand that the Department has been held in breech of certain of its fiduciary responsibilities in what is known as the Cobell litigation. In this litigation, individual Indian account holders, as a class, have sued the Department. They have expressed dissatisfaction, extreme dissatisfaction, with the service they have received from the Department in the past and with the service currently, and they are claiming that they are owed tens of billions of dollars for the mismanagement of the trust. The judge, and I quote, has held that the Department:

Has indisputably proven to the court, the Congress, and the individual Indian beneficiaries that it is either unwilling or unable to competently administer the IIM Trust.

The Secretary takes these allegations very seriously. Regaining the confidence of the trust beneficiaries and ensuring that the Department is in full compliance with its trust obligations is as serious a challenge as the Department has ever faced. It is for this reason that the Secretary, with the support of the former Special Trustee, the Assistant Secretary for Indian Affairs, this Special Trustee, and this Assistant Secretary for Indian Affairs has gone through a long process toward creating what we believe is the right organizational framework and structure to make this happen. It

has been a journey of some time. The reorganization is a critical part we believe in making the Department more accountable.

What we have done over the past year, in addition to the reorganization, is develop the first comprehensive trust management plan to guide the Department's efforts, and, as I think the committee is aware, we have engaged in a long-term process of re-engineering our business processes and how we do trust, how we manage the trust, and how we account to the account holders and to the tribes. And this effort is continuing as well.

All of these three efforts, the reorganization, the comprehensive trust management plan, and the re-engineering, are what it takes we believe to meet our trust responsibilities for our fiduciary trust for the fiduciary trust asset management and accountability to both Indian tribes and Indian account holders.

At this time, I would like to call on Assistant Secretary Martin to give you some of the background of what it took to get to this point in our reorganization efforts.

The CHAIRMAN. Okay. Ms. Martin.

Ms. MARTIN. Good morning, Mr. Chairman. Thank you for the opportunity to appear before the committee today to talk about our reorganization efforts.

As Mr. Swimmer stated, the reorganization of the BIA and Office of Special Trustee is a component of a larger plan to improve the delivery of trust services to tribes and individual Indians. Our strategic plan for improving trust services is outlined in our comprehensive trust management plan and that provides the overall framework of where we want to go with trust improvement and the improvement of trust services. It outlines our mission, our vision, our goals.

The reorganization provides a structure for improved delivery of services and, as such, is a component of the larger overall plan. The "To Be" process, the next phase of the development in our overall reorganization, will result in re-engineered processes that will ultimately provide the final component for improvement of trust services.

As you mentioned in your opening remarks, the Department undertook massive efforts to consult with Indian tribes regarding options for reorganization following its proposal to establish the Bureau of Indian Trust Asset Management. Between November 2001 and December 2002, the Department has held 45 meetings all over the country with tribal leaders to discuss the reorganization efforts. We spent over $1 million in trying to provide this consultation. We have done it at every level. We had a number of meetings, actually 12 meetings, a meeting in every region, to talk about, first, the Bureau of Indian Trust Asset Management, and after it initially became clear that there was overwhelming opposition to that, how we might better reorganize the Department.

It was out of those first meetings that we developed the Joint Tribal Leader Task Force. And we had a number of joint meetings all over the country with regard to the Task Force. And as part of the larger reorganization, the Joint Tribal Leaders-DOI Task Force, we also held regional meetings with members of the Task Force in their own region to discuss the efforts of the Task Force and where we were going with our organizational options.

While I am sure you will hear different perspectives today on the efforts and the results of the Joint DOI-Tribal Leader Task Force on Trust Reform, the Department worked very hard with respect to the agreements made with tribal leaders resulting from the discussions of the Task Force. It was our intent in designing the reorganization to try to abide by those agreements to the extent possible.

In other cases where we have not been able to abide by those agreements, we have tried to fashion from existing lines of authority and existing authorities that we have delegated to the Secretary some way of trying to honor those agreements as well. For example, one of the recommendations of the Task Force was that we create a single executive sponsor who would oversee all trust projects. That recommendation was to either create another deputy secretary or an under secretary for Indian affairs. We lack the authority to create such a position without legislative authorization. So we have increased the authorities of the Office of Special Trustee to try to carry out some of those what the tribal leaders viewed as necessary powers for a single executive sponsor.

In developing the new structure, we sought to highlight a number of things.

First, we wanted to keep decisionmaking at the local level where expertise and knowledge within the Bureau was greatest and where tribal leaders have the most contact with the BIA and the Office of Special Trustee.

We wanted to continue the prominent position that self-governance plays in the BIA and we have expanded the role of self-governance and self-determination by elevating the responsibility for policymaking for all self-determination programs to the Office of the Assistant Secretary. I think the way we view it is that direct service, 477, self-determination contracting, self-governance are all part of a larger continuum that tribes kind of move through in becoming more independent. And we did not see that that was being looked at as one kind of whole progression that tribes make and we do not make policy that way. So we want to try to do that in the future.

We also highlighted the need for accountability within the BIA by creating the Deputy Special Trustee for Accountability. This Deputy Special Trustee is responsible for creating trust training programs for BIA and OST staff, and for developing trust regulations, policies, and procedures for the operation of trust programs. Within BIA, we have restructured the lines of authority for the BIA, the Office of the Assistant Secretary, and the Office of Indian Education Programs. The most notable change is a separation of the fiduciary trust services from the operation of other Bureau programs. We hope to achieve improved performance of trust services by eliminating the collateral duties that have been performed by employees responsible for trust services, a problem which has long been cited as one of the biggest barriers to improved performance. Other highlights include the consolidation of direct reports to the Director of the BIA, formerly known as the Deputy Commissioner of Indian Affairs, from 21 direct reports to 5. We have consolidated a number of administrative functions performed by BIA into one centralized unit, making it more efficient.

Many of the structural changes were developed as a result of the discussions with the Joint Tribal Leaders Task Force and the DOI. The actual realignment was developed by career and senior management of the BIA and the Office of Special Trustee.

Reorganizations are never easy. They generate understandable anxiety and concern among the employees who are being asked to change and improve their performance and whose professional and personal lives can be significantly affected. We hope the explanation you receive today will accomplish these two things:

First, we hope that it will generate enthusiasm for successfully meeting the challenges that face us in fulfilling our trust obligations; and

Second, we hope that it will reduce whatever anxiety you may feel about how the necessary changes will affect you and what they will require from you. It is imperative, however, that you understand that change is necessary and that business as usual with respect to trust management is not acceptable. To properly serve the beneficiaries of the trust, we must, and we can, do better. I would like to note here that that was one of the main things that the Trust Task Force recognized at the very beginning of their discussions. The tribal leaders said the status quo was not acceptable, we need to change the way we do business. And we entered into negotiations and discussions to see how we could do that.

As Mr. Swimmer said, the reorganization exists as part of a larger design and represents the structural changes necessary for the organization to improve the delivery of trust services. The reorganization is a realignment of the functions of the Office of Special Trustee, the Office of the Assistant Secretary for Indian Affairs, and the BIA.

As part of the Joint DOI-Tribal Task Force, tribal leaders identified a number of factors necessary to any reorganization effort and which provided benefits to tribes. These included: Promoting selfgovernance and self-determination; ensuring trust accountability; focusing trust employees on trust duties; and personal and organizational accountability. The Department also felt that it was important to improve beneficiary services by supporting strong beneficiary-focused service delivery, promoting better uses for trust assets, and standardizing business practices.

The reorganization also provides a number of benefits to the Department and its employees, many of which are also important to tribes. Decisions about trust assets continue to be made at the agency and regional levels; effective management controls will be provided; and performance will be measured, creating personal and organizational accountability.

Mr. SWIMMER. As we began this reorganization over 1 year ago, talking and consulting with the tribes about where we were going after the failed attempt at the Bureau of Indian Trust Asset Management, we reached a conclusion in early December of last year of the Task Force consultation meetings. At that time, essentially all the options that had been discussed from November 2001 all the way through the Task Force consultations and following were evaluated. We looked at where we were, where we had come from, what had been proposed, and what we could do within the context of the law as it stood. One of the items that the tribes proposed,