The DOI trust reform proposal, however, appears to be in direct opposition to this flexibility that has allowed for the development of the most progressive reform of trust asset management to date under self determination and self-governance. I cannot imagine that any Member of Congress that supported the Trust Fund Management Reform Act of 1994 could have foreseen that the OST would become a department with a $141-million budget and a projected $300-million budget next year, with trustee offices for every region and agency, or that the OST would be allowed to take BIA service dollars and personnel.

The successes resulting from the development of working relationships in California through compacting and contracting are successes not unique to California either. We have discussed this proposal with other tribes, including Salt River, Salish-Kootenai, and Rocky Boy, each having demonstrated progressive leadership to address trust issues. They have expressed their concern that their unique agreements in their respective regions and the flexibility needed to develop new proposals not be undermined by OST's trust reform proposals. Interior officials have often responded to us by saying that we may be doing it right but the rest of Indian country needs to be fixed.

But real trust reform solutions to date have come from Indian Country and they have come when tribes take it upon themselves to create their own solutions.

I implore the committee not to discard a flexible process that has such a proven successful track record in a large part of Indian country. Self determination and self-governance are measurably very successful pieces of legislation that have achieved great things in a relatively short period of thirty years. Tribes like the ones I have mentioned stand at the door ready to take the next step forward toward real social and economic independence. It would be a disaster if Congress were to allow that door to be closed.

On behalf of the Consortium and other tribes in support of this proposal, I ask you to consider creating a pilot project like the one that started self-governance and allow tribes like the members of the Consortium to continue to work with BIA to find their own solutions regarding trust reform if, for no other reason, than to analyze the OST proposal against the success of self-determination and self-governance. Included with my testimony is draft legislative language that would create such a pilot project.

Thank you. I am happy to answer any questions.

[Prepared statement of Mr. Marshall appears in appendix.]
The CHAIRMAN. Thank you, Mr. Marshall.
Now we will go to Keller George.

STATEMENT OF KELLER GEORGE, PRESIDENT, UNITED SOUTH AND EASTERN TRIBES [USET], NASHVILLE, TN Mr. GEORGE. Thank you, Mr. Chairman. I appreciate the opportunity to come before you and testify on behalf of the United South and Eastern Tribes. I am an old member and on the council at the Oneida Indian Nation of New York and also serve as president of United South and Eastern Tribes.

USET agrees that the trust and other functions need to be separated. However, in the BIA reorganization structure, two competing

organizations have developed-the OST and the BIA. They must compete against each other for authority, resources, and manpower. We believe that this struggle will always exist unless certain issues are addressed.

Tribes have made it clear that DOI should not use program dollars to help fund the mistakes of the Administration. Tribes have stressed that the BIA's funding should not be diminished in order to fund the trust efforts of the OST. The BIA is in dire straits and must have additional funds in order to accomplish a truly successful reorganization. Limited funding would be extremely detrimental to the efficiency of the processes within the BIA's new organization. An attempt was made by the DOI and Tribal Trust Reform Task Force to work through many of the current reorganization issues and hold consultation meetings with these tribal leaders regarding the suggestions of the task force. This has failed due to road blocks in the negotiating process. I was a part of that task force and some of the things that we worked out we agreed with, but when we started talking about having standards and trust principles, it seemed to all fall apart, and that was in December. The DOI officials have stated that they have consulted with the tribes on various reorganization issues that are being instituted. However, this is not totally true. Consultation is not throwing out an idea into Indian country, seeing a negative response, and moving forward with the idea regardless. Consultation is listening to tribal concerns and taking these comments into account.

Two main points tribes wanted addressed, the Under Secretary position and trust principals, still, this remains untouched. Tribes have stated from the beginning of the process that these two items must be incorporated into any reorganization effort in order to establish a sense of accountability within the BIA. Tribes are still waiting to see these very important priorities given attention.

It all comes down to the issue that the tribes must be re-engaged if the reform process is going to be successful. Tribes are receiving confusing information about the reorganization activities, which is extremely frustrating. Tribes must be involved in the entire process, not just shown the end product. We fear that without meaningful consultation and clear information the new reorganization structure will be perceived in the same negative light that has plagued the BIA for years.

Trust principals. Recent Supreme Court decisions have concluded that the Federal Government has avoided fiduciary trust responsibility and operated with "bad faith" in its business relationships with Indian tribes. The tribal leadership of the Trust Reform Task Force made a concentrated effort to get DOI to incorporate a list of general trust principals that could be used as reference points for all trust activities. This suggestion was adamantly opposed by DOI and members of the task force. Both the White Mountain Apache and the Navajo Nation cases have had opinions written and both reaffirm, now more than ever, the need for a standardized set of trust principles.

Indian country should not be held at bay any longer by pending cases in the Supreme Court. The time is now for the Federal Government and the Secretary of the Interior to be held accountable for their trust responsibilities. It is critical that continuity and ac

countability be established as cornerstones of the reorganization effort. There can be no oversight of the trust relationship without a standardized set of general trust principles in place. Indian country must have a way to hold their trustees accountable for actions taken that may be contrary to the advancement of Indian people. Under the Under Secretary position, USET tribes have stressed from the beginning of the reform process the need to have Indian Affairs authority elevated to a secretary level within the Department of the Interior. There is a strong need for an Under Secretary of Indian Affairs position to be established in order to remedy the ambivalent attitude toward Indian affairs that has been so apparent within the DOI.

Through legislation, USET feels that the creation of an under secretary could greatly benefit Indian people. Once again, USET stresses trust principles and oversight must be part of the establishment of an Under Secretary for Indian Affairs. This is the only way that Indian issues will receive the attention, resources, and respect it deserves from the trust relationship.

Many hypotheses are circulating throughout Indian country as to how the reorganization of the BIA will actually work. There has been little direct discussion between the Federal Government and tribal leaders regarding this level of reorganization despite repeated requests from Indian country. The new Department manual once again is not clear as to all the multiple and complex relationships expected at the regional level and below. The leaders are confused and need clarification.

Some of the things that need clarification: Will there be trust of ficers at every regional office? Who will they answer to directly? What will be their relationship with other BIA regional staff? What will the relationship be like between the trust officers and BIA officials? Who will have final determination authority? These are the types of questions the tribes need answered in order to understand the complexity of the situation.

On the Cobell litigation, it is widely perceived as being the catalyst which first sparked trust reform discussions and exposed gross mismanagement of Indian trust assets by the Department of the Interior and the BIA. USET recognizes the need of the Cobell plaintiffs to seek resolution and obtain an adequate remedy at law. The litigation, however, is reaching the dangerous point where the court has threatened to appoint receivership over BIA and trust assets. The plaintiffs have argued that while they appreciate tribal input, Cobell is an individual Indian plaintiff's case. If receivership is appointed, then it becomes everybody's case. Receivership could negatively affect numerous Indian programs and service delivery to all tribes.

We believe that it is time to introduce legislation that will bring a fair settlement to the ongoing litigation and to work with Congress to develop a resolution of the case. Congress should appoint a body of legal and financial scholars to recommend a fair and reasonable settlement along with Indian input. The Cobell litigation is a drain on the Federal Government and is depleting funding that could go to other Indian programs or to enhance reorganization efforts. We must get beyond Cobell in order to realize true and lasting reform.

USET thanks you for this opportunity to testify before you today, and we are prepared to answer any questions that you may have. [Prepared testimony of Mr. George appears in appendix.]

The CHAIRMAN. Thank you, Mr. George.

We will go on now to the last testimony from Chairman Sangrey.

STATEMENT OF RICHARD SANGREY, ACTING CHAIRMAN, INTERTRIBAL MONITORING ASSOCIATION, ALBUQUERQUE,

NM

Mr. SANGREY. Good afternoon, Mr. Chairman. Thank you for inviting ITMA to testify today. I request permission to submit my remarks for the record.

The CHAIRMAN. Your complete testimony will be included in the record.

Mr. SANGREY. My name is Richard Sangrey. I am chairman of ITMA. My written testimony has been submitted separately and will discuss these issues in more detail.

ITMA's primary objective in the trust reform process is the strengthening of tribal sovereignty and tribal self-governance while holding the U.S. Government to their fiduciary obligations in the administration of the Indian trust. ITMA firmly believes these principles can and do co-exist. We are working on a legislative proposal to incorporate these principles in the trust reform process. Before discussing our proposal, I will first address various aspects of the Department's plan.

The Department is rolling out its plan in stages, from defining goals and objectives, to organizational realignment and changing of management, to implementation of the trust re-engineering plan. The trust re-engineering will be based on the "to be" and "as is" studies, which includes input and participation from Indian country. ITMA's Vice Chairman John Berrey has been very active on this front, and we will be involved in the re-engineering process. The Department has acknowledged that the Cobell v. Norton case is the driving factor in the development of its plan. As such, we believe that the Department has avoided tribal involvement and tribal consultation. We also note that while the Department's plan recognizes a commitment to self-determination and self-governance, it does not include any specific plans for tribes to assume more management, control, or authority over the management of trust resources. Most glaring is the lack of clear trust standards in the plan. The plan only references the accounting requirements in the 1994 Trust Reform Act. The plan does not recognize Supreme Court case law establishing enforceable trust standards.

The plan also lacks substance on addressing the fractionation problem. The legacy of the Allotment Policy has created numerous modern day trust problems. Any trust reform proposal must address the fractionation problem.

The Department's realignment and fiscal year 2004 budget request expands the authority of the Office of Special Trustee from an oversight function to include operational duties of trust management. This expansion raises questions about the effectiveness of OST's oversight role, and the need for concrete independent review

By contrast, the plan places no emphasis on tribal resources management. The enhancement of these programs are critical to the entire trust reform process. Tribal resources, our land, timber, oil, gas, coal, and other resources comprise the trust corpus. Properly managing these resources forms the basis of the trust. In this regard, the Department's plan and fiscal year 2004 budget request ignores the importance of tribal resources management.

The Department's plan also disregards the tribe's continued request for a single line of authority at the local level for trust management programs. The plan proposes that OST will develop a regional and agency presence to ensure that trust standards are followed in the management of these assets. OST will also retain the responsibility for financial asset management. This approach raises concerns over the assignment of responsibilities between OST and BIA and how disputes will be resolved between the agencies.

One of the largest concerns is the cost of the plan. The plan does not address this issue and ITMA is adamant that Congress not allow the Department to deplete funding from existing programs and services to pay for its trust reform proposal.

ITMA supports the plan's establishment of a trust training unit within the OST reorganization. Training in the new BIA organization is unclear. ITMA supports agency-wide trust training as part of the overall trust reform.

The legislative proposal developed jointly by ITMA and NCAI, along with our member tribes, addresses some of our key concerns. Our approach would require the secretary to develop an integrated land and resources recordation and title system as an immediate step to focus on the fractionation problem. In addition, we believe the secretary should request more resources to make available for tribes to consolidate land holdings on an allotment-by-allotment basis. Tribal attempts to consolidate small fractionated interests are not keeping pace with the current speed of the land fractionation problem.

Our bill would establish general trust standards regarding the management of trust funds and assets. Our approach accommodates tribal participation in the development of standards particular to each reservation.

Our proposal creates a statutory framework to allow tribes to manage tribal trust funds and assets. Our intent is to give tribal governments greater control over management of trust funds and resources. We believe that promoting tribal self-governance is consistent with the trust responsibility the United States owes to tribes. Our intent is to elevate the resource management needs of our member tribes and to make sure the tribal resource management plans receive adequate funding and attention.

A provision is included in our proposal making clear that the Federal trust responsibility to the beneficiaries of the Indian trust shall not be diminished. We are working on provisions specifying the United States trust obligations, and trust oversight and compliance issues.

ITMA appreciates the dialogue we have shared with committee staff on our bill and we welcome further collaboration with the committee. This concludes my remarks. Thank you.

[Prepared statement of Mr. Sangrey appears in appendix.]