<DOC> [108 Senate Hearings] [From the U.S. Government Printing Office via GPO Access] [DOCID: f:89057.wais] S. Hrg. 108-298 COBELL VERSUS NORTON LAWSUIT ======================================================================= HEARING BEFORE THE COMMITTEE ON INDIAN AFFAIRS UNITED STATES SENATE ONE HUNDRED EIGHTH CONGRESS FIRST SESSION ON OVERSIGHT HEARING ON POSSIBLE MECHANISMS TO SETTLE THE COBELL VERSUS NORTON LAWSUIT __________ JULY 30, 2003 WASHINGTON, DC U.S. GOVERNMENT PRINTING OFFICE WASHINGTON : 2004 89-057 PDF For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.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: Berrey, John, chairman, Quapaw Tribal Business Committee, Quapaw, OK................................................. 13 Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, chairman, Committee on Indian Affairs...................... 1 Cason, James, associate deputy secretary of the Interior, Department of the Interior, Washington, DC................. 2 Echohawk, John, executive director, Native American Rights Fund, Boulder, CO.......................................... 8 Frazier, Harold, chairman, Cheyenne River Sioux Tribe, Eagle Butte, SD.................................................. 17 Gray, Esq., Donald, Nixon Peabody, LLP, San Francisco, CA.... 19 Hall, Tex, president, National Congress of American Indians, Washington, DC............................................. 10 Inouye, Hon. Daniel K., U.S. Senator from Hawaii, Vice Chairman, Committee on Indian Affairs...................... 2 Russell, Majel, attorney, Inter-Tribal Monitoring Association, Albuquerque, NM............................... 17 Appendix Prepared statements: Berrey, John (with attachment)............................... 33 Cantwell, Hon. Maria, U.S. Senator from Washington........... 31 Cason, James (with attachment)............................... 44 Echohawk, John (with attachment)............................. 62 Frazier, Harold.............................................. 72 Gray, Esq., Donald........................................... 78 Hall, Tex (with attachment).................................. 93 McCain, Hon. John, U.S. Senator from Arizona................. 32 COBELL VERSUS NORTON LAWSUIT ---------- WEDNESDAY, JULY 30, 2003 U.S. Senate, Committee on Indian Affairs, Washington, DC. The committee met, pursuant to other business, at 10:08 a.m. in room 216, Hart Senate Building, Hon. Ben Nighthorse Campbell presiding. Present: Senators Campbell, Inouye, and Johnson. STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS The Chairman. We will now move to the hearing to discuss potential settlement of the methodologies in the 8-year-old Cobell Trust Fund lawsuit. In recent days, the House Committee on Resources has held a hearing on the Cobell suit, and days later a provision to establish a cash buyout to the IIM holders to an accounting was removed from the House Interior appropriations bill. Now, this case is entering the its year. We have all been involved in it, and we could probably all speak hours and hours on it, the nuances of it, but the bottom line is it has not moved forward. All the court hearings, the cabinet officials held in contempt, the computer shutdowns, the millions of dollars that have been spent, the tens of millions that will be spent in the future, clearly it is in everybody's best interest to bring this to some reasonable conclusion. The Indian tribes and the Indian people themselves and the Federal Government continue to absorb dollar costs in the tens of millions, opportunity costs preventing us from addressing core trust problems like probate and land fractionation. The morale costs that are driving good people out of the Department is also a secondary concern, but equally important. Second, whatever Judge Lamberth rules in the coming weeks, there are sure to be appeals, motions, and future court actions for months, and probably years, to come. And, last, no accounting has been rendered to the IIM account holders, and the Department has told us that a full historical accounting will cost roughly $2.4 billion and take at least 10 more years. So we have to collectively ask ourselves whether this lawsuit should continue or not. I think the situation, frankly, is unacceptable for everybody, and as the authorizing of any chairman, my goals are very simple and straightforward, and that is to provide equitable and timely relief to the IIM holders and, second, to restore to the Department some sense of normalcy, because this is overshadowing literally everything they do in the Department today. We want to look at the alternatives available to us other than the historical accounting route. We want to ask what are the costs of the alternatives, and are the alternatives legally and equitably defensible; and how we collectively should proceed in structuring such alternatives. I will ask if Senator Inouye has an opening comment. STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM HAWAII, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS Senator Inouye. Thank you very much, Mr. Chairman. For too long this matter has been a cloud over Indian country, and it is about time we do something to resolve it. I wish to associate myself with your remarks. The Chairman. Thank you, Senator Inouye. Now we will go ahead and start with the first panel. One will be James Cason, the associate deputy secretary of the Interior for the Department of the Interior. Welcome, Mr. Cason. And, by the way, unfortunately, too many times our committee hearing gets interrupted by votes, and we do have some, at least one, maybe more, scheduled at 11:30. So I asked staff to bring in a light today to remind people to stay within some kind of a parameter of time so everyone has a chance to speak and that we have a chance to ask a few questions. It is on red, but we will turn it on green. When it goes off and red, you might want to conclude your testimony, but your complete written testimony will be included in the record and will be read. Thank you. STATEMENT OF JAMES CASON, ASSOCIATE DEPUTY SECRETARY OF THE INTERIOR, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC Mr. Cason. Thank you, Mr. Chairman. I really appreciate the opportunity to come up and visit with the committee on this really important issue. I have to start off and agree with both of you. I couldn't agree more that this is a very serious problem that is tremendously impacting the Department of the Interior in a very adverse way. And it impacts Indian country in a very broad and adverse way based on the expectations of many, with no answers, that have been ongoing for years. So it is something that we need to take on and try to address. I wanted to take a second just to introduce Aurene Martin, who is the acting assistant secretary for Indian Affairs; she is with me. Ross Swimmer, who is the special trustee for American Indians, couldn't make it today; he is finishing up the 14th quarterly report to the court today. The Department of the Interior appreciates the leadership being shown by this authorizing committee, and we certainly agree that efforts need to be made toward settling this long- standing issue. We also appreciate the efforts on the part of the House, mentioned by the chairman, that the House Resources Committee has recently taken up the issue as well to try and fashion some sort of a settlement on this issue. And the Department also appreciates the efforts of the House Appropriations Committee, trying to recognize the difficulties associated with this issue and trying to provide some direction to the Department about how to settle this issue. I wanted to start, Mr. Chairman, with a very brief history of the issue that we have. And I have asked to have passed out a 1-page paper here that is entitled ``1994 American Trust Reform Act.'' And the thing that I wanted to show, Mr. Chairman, is the provision No. 4 under section 101, which says ``determine accurate cash balances,'' and then provision 102A, which states: The Secretary shall account for daily and annual balance of all funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian which are deposited or invested pursuant to the Act of June 24, 1938. That is the root language that brings us here today, that Congress, in 1994, passed this act and gave us this direction. And at the time, in the legislative history, Congress was contemplating doing an accounting prospectively beginning October 1, 1993. That language didn't get incorporated into the final bill, but that seemed to be the discussion that was held in Congress as to what this provision meant and where we were supposed to start. What has happened now is the district court has looked at these provisions and basically interpreted it as this means a historical accounting, that we are to go back in time to the origins of individual accounts and account for the balances from the day they were started to the present; and that is how we get the term historical accounting. The underlying premise is that we cannot trust the balances that we have in our accounts, and that we have to go back from day one and recreate the balances of every account in order to assure that they are accurate. And this is the root that we need to look at in terms of the accounting claims that we have. This isn't what Congress said to begin with, but this is how the district court has interpreted the job, and that is what prompted the Department to file its historical accounting plan. We filed the historical accounting plan with the Congress in July, 2002. Mr. Chairman, as you said, that plan was a very comprehensive plan: Basically, all beneficiaries across all time, on a transaction-by-transaction basis, and the estimate we had to do that work was about $2.4 billion, and about 10 years, and that is a best guess at this point. And the difficulty, I would like to illustrate, of trying to do this would be like taking, Mr. Chairman, your personal checking account and having you reconcile your personal checking account for the entire time you have had it, and every other checking account you have ever had, and going back and doing that for your father and your grandparents and your great-grandparents and your great-great-grandparents, and multiplying that by about 500,000 times. It is a huge job to do, and since we have about 130 years worth of potential time that we are required to do that, potentially under the court, we have a very sizeable records management issue that we have to assemble all the records throughout those periods of time in order to do it. It is a very sizeable job. When we submitted the plan, it was $2.5 billion in 10 years, and the message I got back from the chairman and the vice chairman is that is too long and it costs too much, we need to do something else; that Indian country is waiting too long for the results of your efforts, and we need to find another way. And that started us down the pathway to talk about settlement of some sort. We also had a subsequent requirement from the court to provide a historical accounting plan to the court by January 6 of this year. Based upon the feedback that we received from Congress, we constructed another plan that took less time, about 5 years, and less money, about $335 million, and depended upon the use of some statistical verification methods rather than doing verification on a transaction-by-transaction basis. And that plan is currently sitting before the court. We have sought funding from Congress to implement that plan. The funding in the 2004 budget is approximately $100 million that we have requested. And so far the markups on both the House and Senate side are about $55 million less than what we had requested, which sends a signal to the Department that perhaps the $335 million is too much, or that Congress doesn't necessarily agree that accounting is a solution, which may be driving us back to the settlement discussions. We have done accounting so far, and I would like to just take a moment to share the results that we have had so far in our accounting process. We have done tribal accounting as a result of efforts by Arthur Andersen and other accounting firms. We did some accounting in the late 1980's and early 1990's, and we found that generally we could find 85 to 90 percent of the documents that we needed to do an accounting. We didn't find all documents, as you might expect, because of the time periods that have passed. And the error rates from what we found were generally very low, far less than 1 percent. We have also done accounting for the named plaintiffs in the Cobell lawsuit, and we presented a report to Congress. Essentially that exercise cost approximately $20 million for all the activities associated with it, and in that effort we found one check for $60 that didn't go to the right place; it went to another IIM account holder, but it didn't go to the right account holder. We have also done approximately 17,000 judgment per capita funds accountings. At this point we are not able to distribute them because we have been embargoed by the court. But in doing the accountings for that, the error rate, again, is essentially zero. Those may not in total be a statistically valid sample of all accounts, but the point is the accounting that we have done, and there has been a bunch, the error rates generally tend to be very low. If we don't do accounting and we go to settlement, the Department suggests there are a couple basic questions that we need to ask as part of the process. The first is what are we settling. In the lawsuit we have in front of the Cobell court, the issue is to do an accounting, and the accounting is an administrative process which basically leads to a statement like your bank statement that says here is how many transactions you have had, here is the income into your account, here is the checks written on your account, and here is the balances. So the issue before the court is to do an accounting. However, the rhetoric that surrounds this case would suggest that we are looking for is reparations of some sort for some sort of ills, and we are not clear what would be on the table for settlement, and that is certainly one of the issues that we need to talk about. We need to answer the question of who we are trying to do a settlement for, and the who is a relatively large size issue based upon the rhetoric that surrounds this case as well. The Department has basically taken the position on who in our plan before the court that it should be all IIM account holders who had funds on deposit when the 1994 Act was passed. The plaintiffs are seeking a who of all current and former, throughout time, IIM account holders and all possible beneficiaries of their interest. It could be even broader, basically all Indians in Indian country. So one of the things we have to answer is who would be the recipient of whatever settlement we would engage in. And then, finally, how much would Congress pay. And this is a very sizeable issue that makes settlement a very difficult one to embrace, but one I think we nonetheless have to address. The size of the issue is if we approach this as a matter of just pure accounting and what the findings of the Department are, it would be in the very low millions for a very few number of people, based on the errors we have found. However, if you look at what the plaintiffs are seeking, they are essentially saying that they are owed $176 billion. That is billion with a B. That is a very large number. If you looked at the total amount that Congress appropriates every year to run the trust in the Department of Interior, that is about 350 years worth of appropriations. The premise of this, I believe, is seriously in question, and the premise is both the plaintiffs and the Department seem to agree that we have had approximately $13 billion in income into IIM accounts. However, the plaintiffs seem to be assuming that none of those funds were paid out to Indians, which I find to be difficult, because that would assume that we have had some great conspiracy over the last 100 years of generations of BIA employees, who are also Indians working with their friends and relatives, and 25 successive administrations and 25 successive Congresses all agreeing that we would take in money and keep it, never pay it out. So I think one of the things we have to do is challenge the premise of what is owed and make sure that we are all clear, so that, at the end, if we have a settlement, everybody understands what the premise of the settlement is, what we are trying to solve with it, and everyone should be satisfied at the end. The Department of the Interior stands ready to assist the committee in any way that we can, and I am prepared to answer questions. Thank you. [Prepared statement of Mr. Cason appears in appendix.] The Chairman. Thank you. Well, I found your analogy to my checkbooks very interesting. I have had a checkbook for 50 years, and I have to tell you if I didn't have a wife who knew how to balance the thing, I wouldn't remember what I did last month. Mr. Cason. I understand. The Chairman. So I think I understand the complication of going back literally, you know, decades to try to get an accounting. Let me ask you a couple of questions before I give it to Senator Inouye. Your testimony at the hearing of Mr. Pombo convened 2 weeks ago is that the real amount owed to the IIM holders totals millions of dollars, not $137 billion. You referenced that here today. Mr. Cason. Yes. The Chairman. What was the basis for that statement? Mr. Cason. The basis of the statement is if we took the results of the accountings done thus far, that the error rate has been very, very low for the ones done thus far. So if we based it on information we currently have available, it would generate a settlement amount that would be very low. The Chairman. How many of those hundreds of thousands of accounts would you say contain less than $100? Mr. Cason. I don't remember clearly, Senator, but it would be in the tens of thousands. The Chairman. The Department of the Interior's July 2 report to Congress said it would take $2.4 billion in 10 years to do a full historical accounting. You referenced that. The revised estimate is $335 million over 5 years. And you did mention the number of years at that rate it would take to make some of the transactions. If we did that, do you think there would be a large number of errors or that would be a wise expenditure to put that much money in it? Mr. Cason. The approach that we plan to take in the revised plan to the court is one in which we would still prepare a transaction-by-transaction ledger for each individual Indian account holder. The principal differences between the two plans is that in both we were doing a statement of account on a transaction-by-transaction basis; however, in the first plan the set of accounts that we would do was much broader because it included all past beneficiary or IIM account holders, and the plan before the court anticipated a set of account holders who had funds on deposit at the passage of the act. The statistical portion is basically related to verification; in the verification element essentially what we did, if I can give an example of the post-1985 transactions, there were about 26.5 million transactions that occurred after 1985, which we called the electronic era. And only about one- half of a million of those are over $500. So you have 26 million out of the 26.5 million are less than $500, and you have millions and millions of them that are less than $1. So basically what we did, Mr. Chairman, is we said let us verify all of the transactions that are over $5,000, go get the supporting information to document that transaction, let us take a statistical sample of all of the transactions between 500 and 5,000, and on the statistical sample go get the supporting information; and the same thing for the 26 million at the bottom, take a statistical sample and go get documentation to support those transactions, whether they are 1 cent or they are $100. The Chairman. As you know, the cash buyout proposal was removed from the House Interior bill. Did your Department estimate how many IIM holders would have accepted a cash offer if that hadn't been removed? Mr. Cason. Not to my knowledge, we haven't done that. The Chairman. No estimate of what would have cost, then? Mr. Cason. No. The Chairman. Okay, thank you. Senator Inouye, did you have some questions? Senator Inouye. Yes. In your statement you have suggested that Congress will have to appropriate funds for the settlement. But is it not true that the settlement of claims against the United States are paid out of the claims judgment fund, and not out of appropriations? Mr. Cason. Senator, it is possible, depending on what sort of settlement we fashion and how big the number is, that the judgment fund may be a possible tool to use. But if we are talking in terms of multiple billions, that is larger than the judgment funds that are available, so some special dispensation may be needed. Senator Inouye. But the judgment fund has no limit, does it? Mr. Cason. I am not as familiar as I ought to be to answer that question. It is my understanding it normally sits at around $700 million of availability and get replenished. So I am not sure what the mechanics would be to do that for a multi- billion dollar settlement. Senator Inouye. In your testimony you have suggested that the difficulty that your Department faces stems from the enactment of the 1994 Act. Now, we note that in the 2001 court of appeals statement it says: The Indian Trust Fund Management Reform Act reaffirmed and clarified pre-existing duties, it did not create them, and that its enactment did not alter the nature or scope of the fiduciary duties owed by the government to IIM trust beneficiaries. Now, to what extent do you believe the Department's current potential liability stems solely from the enactment of the 1994 Act? Mr. Cason. I don't believe that has been explored, Senator, in terms of allotting responsibility for the Department to do an accounting between the 1994 Act and any predecessor possible direction on performing accountings. What we do know is that the lawsuit was brought pursuant to the 1994 Act and the interpretation of these provisions as to what we should do in terms of the accounting. So that is where we focus our attention. As trustees, we recognize that there is a general duty to perform accounting if an individual account holder is interested in finding out what is in their account, and for years the assumption made by the Department is that an accounting would be one that we would respond when an IIM beneficiary came in and said can you tell me what is in my account; and then we provide it at that time, as opposed to doing periodic statements to everyone. And if you look at the history, there has been, over time, periods of time in which the Department provided some periodic statements, periods of time which it didn't and it assumed it would provide one if asked, and that the 1994 Act finally codified specific direction from Congress that there was an expectation to do periodic quarterly statements to IIM beneficiaries, and the Department started regularly to do it at that time. Senator Inouye. What is the Department's position on alternative dispute resolution? Mr. Cason. I think it is an interesting tool that can be used in some circumstances. In this circumstance it is also something we are willing to consider. However, I would suggest in this case that one of the things that we would all have to strive for if we jointly participated in an ADM process, is that we would have to find some basis for being in the same ballpark. And the difficulty we have at this point, Senator, is where our ballpark is in the low millions based upon what we know, and the plaintiffs' ballpark is $176 billion. It doesn't seem like we are in the same relative area to do negotiations. So one of the things that we will need some help and leadership from the Senate in is to try and set reasonable expectations, perhaps for both parties, as to how to go through this process and find a fair and equitable settlement of this issue. Senator Inouye. Would you agree that the Indian beneficiaries' rights in the funds and the lands held in trust are vested property rights? Mr. Cason. Yes; we hold Indian properties in trust for Indians, both land and cash. Senator Inouye. Then if that is so, how can Congress diminish the Government's potential liability? Mr. Cason. Senator, I don't know about the diminish the potential liability. My sense of where we are in this issue is we are trying to clarify what the Government's liability is. And we have a statutory provision that I just showed you that is the root of this particular issue, which, on its face, doesn't appear to suggest that the Department should have undertaken a historical accounting for all current and former IIM account holders; and that if we looked at the congressional intent in history, it appeared to suggest, both in the language adopted in the 1994 Act and the legislative history, a prospective accounting responsibility. So what we are all going through, both in the court and here in these discussions, is an attempt to clarify what the intent of Congress was and how the Department needs to behave with that intent to carry out what Congress was directing us to do. The language seems ambiguous, and it is being interpreted now. Senator Inouye. Thank you very much, sir. Mr. Cason. Thank you. The Chairman. Thank you, Mr. Cason. Appreciate your being here. And we will now proceed to the second panel, which will be the Tex Hall, president of the National Congress of American Indians; John Berrey, chairman of the Quapaw Tribal Business Committee; John Echohawk, the executive director of the Native American Rights Fund; and Harold Frazier, the chairman of the Cheyenne River Sioux Tribe from South Dakota. If you gentlemen would sit down, we will start just in that order, with Tex Hall first. Okay, I am going to change that and have John Echohawk first. And if you could also kind of observe a time limit so that we give everybody equal opportunity to speak and ask some questions, I would appreciate it. Go ahead, John. STATEMENT OF JOHN ECHOHAWK, EXECUTIVE DIRECTOR, NATIVE AMERICAN RIGHTS FUND, BOULDER, CO Mr. Echohawk. Thank you, Mr. Chairman, Mr. Vice Chairman. My name is John Echohawk. I am executive director of the Native American Rights Fund. The Native American Rights Fund is co- counsel for the Cobell plaintiffs in the Cobell v. Norton litigation. We have been involved in this litigation since 1996, and we feel like that we have made significant steps in determining the extent of the Federal Government's trust responsibilities to these individual Indian account holders. We have attempted, on five different occasions, to reach a settlement in this case with the Government, and all of those attempts have been unsuccessful. The Chairman. John, can I interrupt you for just 1 minute? Looking at my notes here, Donald Gray was also supposed to be on this committee, and I didn't call him to the table. If he could come up and sit here too, I would appreciate it. Okay, go ahead and proceed. Mr. Echohawk. Our attempts at settlement have not been successful, and so when we received the letter that you and Senator Inouye sent in April, suggesting a mediated settlement, we thought that was good because we thought maybe with your participation, maybe we could have some fruitful settlement discussions and settle this case. At that time, we began preliminary discussions, as you know, about this mediation process that you suggested. We have given that process some thought, and we wanted to share with you today what we think are some of the elements for a sound settlement process. We think these are elements that are a starting point for discussion about how this process gets put together, but we think that it is a process that can result in settlement of this long-standing problem. The first element is inclusion of all necessary parties. Of course, the Cobell plaintiffs, the Government, and as I mentioned, your participation, Mr. Chairman and Mr. Vice Chairman, is very important. I think we would also want to involve the chairman and vice chairman of the authorizing committee in the House as well, because I think that keeps the pressure on all of the parties to reach a settlement. In addition, I think to the extent that tribal interests are involved, and they are involved in this case to some extent, tribes ought to be parties to this mediation as well. Second, the appointment of a mediator. I think that is a very important element here. It has to be a person of significant political clout who can command the attention of the parties and drive us toward the settlement that we are all seeking. Third, scope of the settlement discussions. This is something that needs to be determined up front. There are many issues related to the Federal Government's trust responsibility to Native people, but I think the only way we are going to get anywhere here is if we limit the scope of this settlement discussion to the issues in Cobell, the Individual Indian Money accounts. I think it is also important to recognize the decisions the courts have made in this litigation, both the district court and the court of appeals; and that would be the starting point for the settlement discussions. This should not be an opportunity for parties to basically re-litigate issues that have already been decided by the courts. Fourth is timing. We believe this is an opportune time to begin this discussion because we just concluded trial 1.5 in the Cobell litigation, and we are filing our post-trial briefs next Monday. That trial will decide many significant issues I think that would facilitate this mediation, including the proper methodology to perform the accounting, the applicability of the statute of limitations, and the burdens of proof in a trust accounting case. I think with decisions on those issues, the remaining issues to be negotiated out would be limited and I think give us a real chance to reach this settlement that we are all interested in achieving. Fifth, two separate matters of resolution: We need to recognize that Cobell is about two issues, one is the accounting issue, the other is the fix-up issue, the trust reform issue. I think if we can keep this in mind, this would help the mediation process as well. Just like the court has done, they bifurcated those issues and dealt with them as separate issues. If we could do that in this mediation, I think it would facilitate matters. Sixth, continuation of legal proceedings during settlement discussion. It is important that the litigation not be stalled while this mediation process goes forward, because the party interested in delaying matters could simply drag out the settlement discussions and we would never reach a resolution. The litigation is the sole reason, we believe, why the Federal Government has begun to take these issues seriously, and without that pressure there is no reason for the Government to negotiate in good faith. Seventh is final resolution. We believe that that would be more easily achieved if certain issues are addressed up front. First of all, the Government should ensure that the claims judgment fund can be accessed to cover the cost of any settlement. It is not fair to appropriate from funds that should rightfully go to Indian country to settle this case. If this case is continued in litigation, we feel like any correction of the accounts would not be separately appropriated, but would be covered by the judgment fund. Second, any settlement must have judicial approval pursuant to the Federal Rules of Civil Procedure. We must bear in mind that this is an attempt to resolve a case in litigation. Moreover, it is a class action, and due process must be given to all class members, and that is, I think, best handled by the Federal district court here in Washington. Third, resolution of this case should be on a class-wide basis. It is more expedient and efficient to do it that way, and any attempt to break up the class through side-settling of claims will merely ensure more litigation and also provide less incentive to the Department to reach a settlement. And, finally, there should be no limitation on the right to litigate issues not resolved in this case. As I said at the outset, Cobell doesn't deal with all of the trust issues that are out there, but we need to get a start somewhere, and I think tackling the Cobell issues is the place to start. Mr. Chairman, Mr. Vice Chairman, these issues have been around for over 100 years, and together with your help I think we can finally resolve these individual Indian money account issues. Thank you. [Prepared statement of Mr. Echohawk appears in appendix.] The Chairman. Okay, thank you. Now we will proceed to Tex Hall. STATEMENT OF TEX HALL, PRESIDENT, NATIONAL CONGRESS OF AMERICAN INDIANS, WASHINGTON, DC Mr. Hall. [Remark in native tongue.] Thank you, Chairman Campbell, Vice Chairman Inouye, and Senator Tim Johnson. My name is Tex Red Tipped Arrow Hall, president of the National Congress of American Indians. I am very grateful to the committee for two very important hearings today, one on the settlement of the trust and homeland security. When we were playing basketball when we were younger, it was called back-to-back, so we hope we are in shape to testify twice today. But we are very appreciative, again, and looking forward to working with the committee on accomplishing some very important issues, and these two issues today are two of the most notable issues in Indian country, and we support the committee in getting things done, but getting things done right. NCAI supports the establishment of a process for settling the Cobell v. Norton litigation. The bottomline is that the Federal Government has not maintained a recordkeeping system that will allow a complete historical accounting. So we should seek a fair and equitable settlement of the trust accounting claims. We met with tribal leadership last week in Portland and discussed this issue in detail. We are seeking a commitment from Congress to initiate a conflict assessment to begin this fall, with the help of a professional mediator. This mechanism should be used to develop and define a settlement process that can be accepted by the parties. While tribal leaders have consistently supported the goals of the Cobell plaintiffs in seeking a correct trust funds accounting, tribes are also concerned about the impacts of the litigation on the capacity of the United States to deliver services to tribal communities and to support the government- to-government relationship. Significant financial and human resources have been diverted by DOI in response to the litigation, and the litigation is creating an atmosphere that impedes the ability of tribes and the Federal Government to work together to address the needs confronting Indian country. Continued litigation will cost many more millions of dollars and take many more years to reach completion, further impeding the ability of the Bureau of Indian Affairs and the Department of the Interior to carryout their trust responsibilities. We believe it is in the best interest of tribes and individual account holders that tribal leaders participate in the resolution of trust-related claims and the development of a workable and effective system for management of trust assets in the future. Congress should initiate a structured assessment to assist the parties in identifying the appropriate form of conflict resolution. In short, a mediator should work with the parties to design the structure of a settlement process. The assessment should also serve as a consultation mechanism for tribal governments. A structured mechanism will allow for formal acceptance of a settlement process by all parties and move us one significant step closer to a serious settlement proposal. Some guiding principles I would like to mention should include the following: No. 1, involve all necessary parties in convening this fall to scope and frame the settlement process. The House Resource Committee and the Senate Committee on Indian Affairs should forge an alliance to work on this issue and participate in meetings to keep Congress informed of progress and keep the pressure on for settlement. Consultation with the elected tribal leadership is essential in the settlement process. Tribes have a number of very important issues in the outcome, including future delivery of trust services and a Federal budget for tribal programs. No. 2, an independent body should play a significant role in the settlement process to ensure fairness and transparency, and that the process moves forward, an independent body should manage the deliberative process. No. 3, establish a process that will keep the pressure on for settlement. Firm time schedules should be established with periodic reporting and incentives for reaching a settlement. No. 4, provide for judicial review and fairness. Many individual Indians do not have access to legal counsel to review settlement documents, and, therefore, review by the courts is necessary to avoid any unfair settlements. Also, tribal native language interpreters, we feel, is necessary to help explain settlement offers and options to the individual Indians. No. 5, ensure that the settlement also addresses the trust systems for the future. So in addition to the account balances, the other major issue in the litigation is the functionality of the trust accounting systems in the future. It would be disastrous to create a settlement that would resolve the past liability and then allow the Federal trust reform efforts to relapse again. Tribal leaders are very supportive of the proposal from Chairman Campbell and Vice Chairman Inouye that we begin our efforts on trust reform with an attack on land consolidation and fractionalization. If we allow to continue fractionalization, this will eventually overwhelm systems of trust administration and exact enormous costs for both the Administration and tribal nations. We are very appreciative of the continued work on S. 550, and we urge Congress to make a huge investment in land consolidation programs. These will pay much bigger dividends than most any other fix to the trust systems that we see today on the table. But there are two other issues that Congress should take up at this time: Accountability and standards. It is well known that the Federal Government has mismanaged the Indian trust for decades. The real question for Congress is why decades of reform have produced so little in the DOI's willingness to take corrective action. The real answer is that the DOI and the Department of Justice have never been willing to establish standards of trust management because the standards would subject them to liability if they were not met. The lack of standards has consistently undermined the trust reform. Congress needs to send a clear signal to create a new culture of accountability for Indian trust management. We would greatly encourage the Committee of Indian Affairs to take up trust reform legislation that would hold the Federal Government to the ordinary standards of a trustee. Indian trust resource and trust fund administration requires accountability in three core trust systems that comprise the trust business cycle: title, leasing, and accounting. Congress should focus its efforts on these core systems. Correcting the DOI's performance in these areas will also require significant and sufficient personnel, training, and an adequate budget to do it. Of course, the most important system is the title. Currently, BIA uses 10 different title systems in the various land title record offices around the country, both manual and electronic. These systems contain inaccurate and inconsistent information. The inaccuracies result in incorrect distribution of proceeds from the trust and the need to make repeated corrections. Consequently, a large backlog of corrections have developed in many of the title offices, and this has compounded the delays in probate, leasing, mortgages, and other trust transactions. I can personally attest to this in witnessing last Wednesday in the probate of my father, which I witnessed some records were there that I had no idea were there. You had a document that was 50 pages thick on fractionalization, and you had 30 minutes to do the entire probate, and you had to determine if that should be a part of your father's estate or not; and they took the document back from them after they were done. So you had probably about 3 minutes to review 50 pages of records on fractionated interest. Congress should also address the problem with appraisals. We need to ensure that account holders are receiving fair market value for their properties. Finally, and very importantly, NCAI is strongly opposed to the current trust reform reorganization effort that the DOI is engaged in, and the dramatic shift in BIA funding that are proposed in the 2004 budget. We are asking for the assistance of the committee in stopping this reorganization. The reorganization is putting the cart before the horse. The organizational structure must be designed to function within a system that has not yet been developed. Millions of dollars have been invested in the as-is study of trust services, but the Department has only just begun to undertake the critical phase of re-engineering the business processes of trust management. By implementing a new organizational plan prematurely, DOI is running a great risk of wasting the valuable resources that the agency and tribes have already dedicated to understanding systematic problems. Reorganization should only come after the new business processes have been identified and remedies devised through a collaborative process involving tribal leadership. Again, we would like to thank the members of the committee for all the hard work you and your staffs, and the time and the amount of energy and your commitment for trust reform. We have a big opportunity in front of all of us to resolve the Cobell litigation, so we are looking to Congress as tribal nation leaders to commit to participating in the process and assisting a mediation team. This will be a big important step for Indian country, and we stand ready and willing to assist. [Remark in native tongue.] [Prepared statement of Mr. Hall appears in appendix.] The Chairman. Thank you. Now we will move to John Berrey. STATEMENT OF JOHN BERREY, CHAIRMAN, QUAPAW TRIBAL BUSINESS COMMITTEE, QUAPAW, OK Mr. Berrey. Good morning. I want to thank you all for this opportunity, Chairman Campbell, Vice Chairman Inouye, and Senator Johnson. On behalf of the Quapaw Tribe, I want to express my appreciation for your commitment to Indian country. And I believe I am here to describe a few issues that I think need to be part of your consideration as we embark on the idea of settlement in this historic case, a case that has clearly exposed many of the horrible details related to the mismanagement of the American Indian Trust Estate. The Quapaw Tribe and its members reflect some of the most horrific examples of this mismanagement we have all heard stories of. The Department of the Interior managed the largest lead and zinc mines in the history of the United States on Quapaw lands. The Quapaw Tribe currently has a case in the Northern District of Oklahoma, and we also have several members that are members of the Cobell class. We recognize that our tribe and its members have suffered over time, but litigation is so costly in terms of cash and human resources, the Quapaw Tribe has entered into a formal alternative dispute resolution process with the Department of the Interior and the Department of Justice. And I want to make it clear that this is about our tribal claims, and I want to make a clear distinction tribal claims versus the Cobell claims. Tribal claims represent 90 percent of the trust corpus; the Cobell individual plaintiffs just represent 10 percent of that total trust estate. And I want to make that clear, and I kind of made some charts as part of my testimony. I also believe that some of the facts about the limited claims in Cobell need to be discussed. The Cobell claims are the cash collections from natural resource management, either oil and gas, timber, mining, agriculture, grazing, commercial property, and some residual trust fund holdings or judgment fund holdings. It is the posting of the interest, the investments, the distributions, the audits, and the itemization and reporting of all these accounting activities. And I think it is important to know what it is not. It is not the pre-lease activity; it is not the appraisals; it is not the fair market value; it is not the lease term negotiation factors of the notice and the bids, et cetera; it is not the lease compliance issues of the audits of the well heads, or the run tickets, or the load volumes, stumpage audits, footage audits, all the audits that are necessary to make sure that people are in compliance with their leases and the exploitation of natural resources; it is not the enforcement of trespass, the proper usage of land, the environmental issues and the reclamation issues; it is not issues of idle lands and it is not issues of land stewardship. So I think we need to concentrate that this is very narrow in its terms, it is just from the collections of the money to the distribution of the money. And there is a lot more liability and a lot more issues out there that I think we need to be cognitive of as we go through this process. I am concerned that the settlement of Cobell may provide or give the perception that it will provide some closure to all the claims associated with the historical mismanagement of the Native American trust, and I think this is totally inaccurate. I think the settlement can satisfy many problems and help provide solutions for the future, and I am very hopeful that the improvement of the service delivery, like Tex has talked about, is very much part of the outcome of any settlement. But a settlement in Cobell will settle only the claims related to the IIM accounts, and not other claims. Those claims that are related to the actual management are the types of claims that are being asserted by the Quapaw Tribe and the other 29 tribes that are currently in Federal litigation. So how do we get to a process similar to what the Quapaw Tribe has entered into? We believe there is a scientific tried and true process of alternative dispute resolution that, if followed, can lead us to the path of settlement, and it starts with an assessment of the conflict. A third party neutral is brought into the picture, they interview all the parties involved, and they make recommendations on how to go forward. We have experienced that in our alternative dispute resolution process, and it has helped set the environment for the ability of the tribe to work with the Justice Department and the Department of the Interior at the table to try to work through a lot of the issues that we believe are part of our claims. We think that there are some issues that are very necessary as outcomes to any settlement. One is we need to see if we could reduce or begin a consolidation of the fractional interest on individual lands. We need to promote the increase of a tribal land base, we need provisions for future resources for managing the trust estate, and we need the promotion of self-governance. The DOI takes the blame and the brunt of the complaints regarding the management of the assets belonging to tribes and individuals, but the failure of the Congress to provide adequate funding and resources for the management is glaring. In order for the United States to live up to its fiduciary responsibility to Native Americans, the Congress must give DOI the tools. When the Bureau of Land Management has $140 million 2003 appropriations for information technology, compared to an $11 million IT appropriation for the BIA, there is a problem. Indian affairs has been terribly neglected for 150 years, resulting in this litigation wave that we are facing right now. And I think there are some things that I would like to point out that the DOI has embarked on, and something that I have been part of in terms of what is going on in the future, and Tex made a reference to it. It is the ``to be'' re- engineering project that I am very much a part of, and there are hundreds of people within the Department and there are several people in Indian country that are working very diligently on trying to fix some of the processes. We are trying to fix leasing, probate, accounting, appraisals, the title management systems, the ownership records management, surveys, and all the processes that make up the trust services, we are all redesigning them. The process is going to include the standardization of work flows and processes. In our as-is study we found out they managed probates or they do different processes in leasing in Nashville different than they do in Anchorage, different than they do in Phoenix compared to Minneapolis, and we want to try to find some standard methods to make this process better. We are going to eliminate antiquated tools and redundant business practices. We are going to create a new IT systems architecture. We are going to create policies and procedures, training, risk management, workforce planning, and all the tools that we believe that are needed in order to provide a beneficiary-centric service delivery for Native Americans. The process is going to need some help, though, from Congress. We are going to need the adequate resources, once we have identified them, for this new improved trust delivery. We are going to need the oversight of the Congress and make sure that the Department of the Interior upholds its responsibility as the delegate trustee for the United States. And we also believe there is going to have to be a collaborative process between Congress and the re-engineering team in order to make changes in legislation to make these new processes work so we can create a beneficiary-centric self-governance promoting Department of the Interior. In closing, I would like to encourage everyone that is involved. I think that we have got a long way to go, and I think the damage to Native Americans is obvious. But we must bring this case to a close and start fixing the trust system. You know, my tribe is suffering terribly. The money that is appropriate in realty is not making it to the people; the money is being spent on litigation, even at the local level. My realty officer spends so much time just working on document production issues. We can't get decisions on FIDA trust because the solicitor's office is so tied up with the litigation. So the people that are really suffering from this case are the very people that the case is about. The burden of this case is now on my people, and my people are suffering. We live in the largest Superfund site in the United States; we have leases that were signed by the Department of the Interior that we haven't had collections on. Some of them are 30 years in arrears in collections, and we can't get anybody to move to get some of these things straightened out. So what I am really hoping for at the very end of the day, when settlement is done, is not only that will give some sort of compensation to the people that have suffered, but will provide a future trust service delivery system that makes sense, is timely, and reduces a lot of these delays and suffering. And I have also got some letters that I am going to provide from members of my tribe and also I am a member of the Osage Tribe of people that are really interested in settling, people that have had huge amounts of dollars go through their IIM accounts, and people that want to go forward and quit looking back. It is important to me as a tribal leader to teach my children to look forward and not constantly spend all of their energy looking backward and trying to create a future. So, with that, if you have any questions, I would be happy to answer them. [Prepared statement of Mr. Berrey appears in appendix.] The Chairman. Do you want those letters included in the record that you brought? Mr. Berrey. Yes, please. The Chairman. They will be included in the record. [Referenced documents retained in committee files.] The Chairman. We will now go to Chairman Frazier. And you have a person with you, a resource person, Majel Russell, is that correct? Why don't you come on up to the table too, in case you are needed to help the chairman. Go ahead, Chairman Frazier. STATEMENT OF HAROLD FRAZIER, CHAIRMAN, CHEYENNE RIVER SIOUX TRIBE, EAGLE BUTTE, SD, ACCOMPANIED BY MAJEL RUSSELL, ATTORNEY, INTER-TRIBAL MONITORING ASSOCIATION, ALBUQUERQUE, NM Mr. Frazier. Thank you. Good morning, Chairman Campbell, Vice Chairman Inouye, and Senator Johnson. My name is Harold Frazier. I am the chairman of the Cheyenne River Sioux Tribe in South Dakota. I am also an ITMA board member. Today I am honored to present testimony on behalf of the Intertribal Monitoring Association on Indian Trust Funds. In addition, I am offering specific comments on behalf of the Cheyenne River Sioux Tribe. I will first tell you a little bit about ITMA's membership and our position on the need for a settlement process for IIM account holders, then I will present the organization's suggestions for a fair and workable settlement plan to address the Department of the Interior's mismanagement of IIM accounts. Last, I will give you some concrete examples from back home about the kinds of problems our IIM account holders face everyday and explain how the proposed BIA reorganization will only make these problems worse for these individuals on our reservation. ITMA has long served as a watchdog over the Department of the Interior's management of Indian trust. The member tribes of ITMA hold significant trust funds and resources, and many have numerous IIM account holders. For example, most Great Plains Tribes and all the Rocky Mountain Region Tribes are members of ITMA. Together, our two regions hold 68 percent of tribal trust assets. In addition, Great Plains tribes have over 68,000 IIM account holders, which is the largest number of any account holders in all of the regions. And the Rocky Mountain tribes have more than 50,000 IIM accounts. Recently, ITMA's focus has been the protection of tribal government's authority over trust accounts and resources. While ITMA has been seriously concerned about the financial impact of the ongoing Cobell litigation on critical tribal program funds, we also question today whether continuous litigation for many more years is in the best interest of all the IIM account holders. We recognize that the Cobell lawsuit was necessary to draw attention to the Department of the Interior's serious neglect of the individual Indian trust accounts. However, we believe that the litigation may outlive some of the IIM account holders who have already waited many years without receiving an accurate statement of their accounts, much less the trust moneys that they may be owed. Therefore, ITMA endorses the development of a settlement process that IIM account holders may choose to utilize. For those IIM account holders who choose not to utilize a developed settlement process, the current legal remedies available should remain intact. The Cobell plaintiffs have argued that adequate records do not exist to conduct a valid accounting of IIM accounts. The Department has provided a plan to the court to reconstruct IIM account records to complete an accounting; however, the recreation of records for IIM accounts with inadequate records will take 5 years to complete, at a cost in excess of $335 million. ITMA supports an opportunity for individuals to settle their IIM claims short of a complete reconstruction of accounts and completion of an accounting. Such a settlement opportunity will allow an IIM account holder to choose a financial benefit in a timely manner, rather than to await the reconstruction of records and accounting. The key to a viable settlement mechanism will be the process to value IIM account holder claims. ITMA proposes that accounting experts be utilized to develop a method for valuing IIM claims utilizing generally accepted accounting principles. A second key component for a settlement mechanism will be review and acceptance of the process to value claims. The approval should occur in either existing judicial forms or in a newly created court to specifically address IIM claims. Third, upon an accepted claims valuation method, a settlement may be offered to the IIM account holder. Account holders should be provided access to objective legal advice to decide upon acceptance of a settlement offer. The account holder can then make a knowledgeable decision to accept the offer or resort to continue litigation to obtain an accounting. However, if an IIM account holder chooses to accept the settlement offer, the settlement should be final except in instances of fraud, material misrepresentation, or concealment. In addition, adequate funding must be guaranteed for settlement with IIM account holders. At this point, the Cobell plaintiffs and the Department are extremely divergent on the cost of settlement. ITMA believes an amount to accomplish settlement remains unknown until an accounting process is developed. We would therefore recommend that a flexible funding mechanism be considered that will take this uncertainty into account. One option would be to make portions of the amount available over time as more information is gained through the agreed upon account valuation procedures. Some ITMA tribal members support an appropriation to fund these settlements, and some ITMA members support utilization of the judgment fund as provided by 31 USC 1304; however, all ITMA members are adamant that settlement funds not deplete existing or new tribal program dollars. In summary, ITMA proposes that a settlement process be developed via a pilot project consisting of ITMA tribes. Those tribes who choose to participate will determine the scope, form, and process for valuation of claims and appropriate judicial review of the process. Upon determination of tribal participation, ITMA will coordinate with this committee to develop objectives and timeframes and a budget for this project. After completion of the pilot project, a process will be available for all tribes to utilize. ITMA believes that meaningful reorganization of the Department of the Interior cannot occur until the settlement of the Cobell lawsuit. Related to trust management issue, the ITMA tribal membership is concerned about the ongoing reorganization of the Bureau of Indian Affairs. ITMA respectfully requests this committee conduct a hearing on the reorganization in the immediate future. ITMA and the National Congress of American Indians have worked jointly for almost 1 year on the development of a tribal trust reform bill that ITMA has recently finalized. This tribal bill has been reviewed by various regions of Indian country, and all tribes have strongly endorsed the concept. The final draft of the bill has been provided to numerous congressional representatives for immediate introduction. On behalf of our tribal members, we urge the committee to support our efforts. ITMA understands that S. 175, now S. 1459, has recently been introduced by Senators Tom Daschle, Tim Johnson, and John McCain to address trust reform. The bill has also been introduced on the House side, H.R. 2189, by Congressmen Nick Rahall and Mark Udall. ITMA worked diligently with congressional staff to influence the rewrite of S. 175; therefore, ITMA believes that S. 175 is also a viable solution to trust reform. We strongly urge the convergence of these legislative efforts. As chairman of the Cheyenne River Sioux Tribe, I would like to make a few comments on behalf of our people. The Cheyenne River Sioux Tribe believes that the proposed BIA reorganization will make trust management less effective and responsive to all beneficiaries, including individual account holders and tribes. The current BIA reorganization does not benefit Indian country, and it does not benefit our grassroots members, who many of them are IIM account holders. Instead, it creates more upper level bureaucracy, which will in turn create more delays in the turnaround of our IIM account holders' payments. Also, it doesn't provide more resources or authority at the local agency level that is needed to address a lot of our grassroots people's concerns and issues. With the proposal of trust officers located at local BIA agencies, they will be duplicating services and wasting funding that is much needed for our members' needs. I would like to briefly share several stories about how this reorganization has affected our people's lives on the Cheyenne River Sioux Reservation. The Chairman. I have to tell you, Mr. Chairman, that we are going to have to leave and vote in 10 minutes, and we have yet to hear from Mr. Gray, too, and both wanted to ask some questions. We are well aware of how it affects people's lives, but you might put those in the record, if that would be all right. Mr. Frazier. Well, thank you. [Prepared statement of Mr. Frazier appears in appendix.] The Chairman. Thank you. Mr. Gray, why don't you proceed. STATEMENT OF DONALD GRAY, ESQ., NIXON PEABODY, LLP, SAN FRANCISCO, CA Mr. Gray. Mr. Chairman, Mr. Vice Chairman, I want to tell you how very much I appreciate being invited as an expert on trust administration and reconstruction. I think this is now my third appearance before this Committee, and I appreciate the opportunity. Four years ago, when I first appeared before the committee, I outlined three basic principles that I thought were very important in terms of trust reform, whether it was future trust reform or historic trust reconciliation. In those four years, in this last 4 years, there has been progress. I believe the progress has been more in the hearts and the minds of most of the players in this drama in terms of the recognition of these key elements. It has not been what I had hoped it would be, which was to be an actual trust fix, either prospectively or historically. That just simply has not been done. But there has been a change in acknowledgment of what needs to be done. I want to reiterate what I said some time ago, because it is just as applicable to the task at hand now, which is alternative methodologies for settlement, as it was 4 years ago. The first is expertise. Up until the time I testified, I don't think anybody took seriously the fact that there were out there in the real world and the commercial world people who fixed trusts for a living, historic, long multiple asset trusts that had gone wrong for many, many years. It is a small group, but it is a very important group to the banks in the United States, and it works very hard at it and it is very good at it. And that expertise has got to be brought to bear somehow, some way on this problem. I think the court now understands this, I believe Congress understands it, and I believe Indian country understands it. The second point I made were conflicts of interest with respect to the DOI. This was the theme that I have harped on a little bit too much, perhaps, and that is the patient can't cure himself. No matter how well motivated, the DOI historically had made the mistakes, and they cannot be fairly put in the position of having to correct those mistakes. Their conflicts of interest are also heightened by the fact that there is highly vicious and sometimes overly-vicious, in my mind, court battle going on, and nobody can do a good job at trust reconstruction when they are in court every day; that makes it very difficult. The third issue, related to the second issue, was independence. Up until the time that I testified, I am not sure that anybody really took into account the fact that there was not a truly independent body or even one that was considered to be injected into this process; it was the DOI defending themselves and it was the plaintiffs hammering on the DOI, and no independence. And without that independence, which was related to the expertise element, bringing in the expertise, you are never going to get the kind of information that you need to go forward. This independence, by the way, I took personally. I turned down representation of the DOI, or working for the DOI early on, and for several tribes, because I thought that the positions were polarized, I didn't think there was enough independence, I didn't think there was a body for independence, and, therefore, I did this for free because we weren't there yet; we just didn't have the independent vehicle to bring the expertise to bear, and nobody was going to take it seriously. I think there has also been progress in the last 4 years, especially in the last several months, in terms of reaching out with respect to all methodologies for IIM trust reconciliation and reconstruction, and for historic reconstruction, and not just limitations to strict accountings, and not limitations by statutes of limitations or other ways that DOI has sought to limit the way that it goes about trying to deal with historic accounting, including the limitation to statistical sampling. This process has had a lot of names attached to it, and broken trust has been the one that has been the most ubiquitous in the last 10 years. I would suggest that there is another one that everybody take into account. And I don't want to be over- dramatic about this, but there is also the light in the forest here. And a light in the forest is information. And the thing that is the most frustrating for a professional that rolls up his sleeves and tries to fix these kinds of trusts is that there has been an awful lot of organizational changes, there has been an awful lot of data cleanup, there has been an awful lot of as-is descriptions, but there has been not one significant step in fixing the historical problem or in putting together the proper architecture for a future system; and that is because the expertise has not been brought to bear. The DOI has engaged in organizational and management reorganizations. Maybe understandably, it has tried to limit the scope. And you heard Mr. Cason today talk about how they have tried to limit the scope of their inquiry in terms of an accounting. But there has been no progress at all with respect to the reconstruction of these accounts. None. This is a little bit like McClellan on the Potomac. You have got an arsenal of records, you have got constant troop reorganizations and supplements, you have got cleanup of data, but, respectfully, it is time to cross the river, roll up your sleeves, and do some work; and that means Congress and it means all the other people involved in this. There is a frustration factor in this for a professional who has followed this as closely as I have. You have a patient dying on the table. You have IIM holders who are already dead, literally, and who are dying, and you have a lot more who are living at subsistence levels; and that is untenable. It is untenable because the cures are scattered about the operating room and the cures of information are outside the operating room and accessible, but nobody will let the doctor in. That is untenable to me. You have choices. Here are your choices. You can spend many million more dollars and give the DOI time and years to do statistical sampling and to come up with studies that Indian country will not accept. You can default to the court and have a receiver appointed. The receiver will inherit exactly the same problems that you have now, and will have enforcement issues and constitutional issues that have not yet been looked at that are enormous. And what that means is that it is time for Congress to do something. The fact of the matter is Mr. Cason is right. There is a creative misunderstanding here about accounting. When somebody wants to fall back on limitation and do as little as possible, they talk about a strict accounting, which in real parlance means tracking transactional accounts very closely and verifying them to supporting data. That is not possible for the 130 years of this trust, and everybody knows it, because we don't have the data. So in order to get to a fair and reasonable solution, you are going to have to use more than the existing data, more than statistical sampling of a minute part of the existing data; you are going to have to look into a wider circle, if there is going to be anything fair and reasonable done to the IIM holders. I am here today to talk about those alternative methods briefly and give you, in layman's terms, what they mean. The most important of the alternative methods, and when I say alternative, I mean alternative to the actual records that DOI does have right now, some of which has been claimed not to be good, some of which has been claimed to be okay. The most important is the external data that was brought out in the February filings by the experts for plaintiffs. They are very impressive filings, and in my mind they were the turning point in this entire process. If you look at these filings that go back to independent records of well production, oil and gas well production, grazing land production, timber production kept by local governments, State governments, and Federal governments over years. Mr. Cason referred to estimating techniques. Historically, these are not estimating techniques. This is an alternative valid direct evidence. It may not be part of the historic trust accounting system, but it is external evidence that bears directly upon the Indian assets. Now, I don't take these accounts at face value, and they shouldn't be. What I had hoped the DOI would do is hire their own experts and say that is wrong and that is right, that is wrong and that is right. That is how you get to a fair and reasonable solution. But what I do say is that the methodology of those mineral and asset reports as independent direct evidence is one of the most important alternative methodologies used in resurrecting any commercial trust that has multiple assets involved in it. The second important methodology or alternative is called modeling. And I want to defuse that in terms of it being kind of an esoteric concept. It is not that esoteric at all. What happens is that if you know that you have a well that is on Indian allotted lands and you know from State, Federal, local level exactly what was produced in that well, you have direct evidence. If you don't have that evidence, but you have the same evidence for a well or wells on the same oil reservoir or on similar oil reservoirs for the same time periods, and you have evidence with respect to what market rates were for those natural resources, it is fair and reasonable to use those as analogies; and that is done all the time in the commercial sector. And, in fact, if you read carefully those submissions that were submitted in February by plaintiffs' experts, they are a combination of direct evidence and modeling, they cross back and forth; and, frankly, they need to be countered, because they are not all correct, they are one-sided. The $137 billion, the $170 billion, that is if you take everything that they say is totally correct and assume that nothing ever came out of the IIM accounts to the IIM holders, and I think that is wrong; I think they did, and I think there is independent evidence on that that needs to be used. The third area, and I know time is limited, but the third area of evidence or methodology that needs to be looked at is very simple, and that is an alternative way of looking at the existing data we have now. DOI has looked at that data, knows there are problems with it, thinks that a lot of it is right and some of it is wrong. It has used statistical sampling techniques to see if they can, from a small population, generalize to a large population. Statistical sampling sometimes works very well in the commercial sector, and has been used, but only, in my experience, when you have a single asset or a single problem or a single trust. When you have multiple assets that have a lot of variables connected to them, it is very, very difficult to do statistical sampling. One of the examples that I was struck by in Tex' testimony in the House was that if you do statistical sampling, it will pick up some variables, some mistakes or whatever. He mentioned that there is a real problem of overgrazing in Indian country and the grazing country. No statistical sampling model will pick up a variable like overgrazing, and unless an independent group goes in and uses all of these methodologies and embraces all of these variables that are unique to the assets, you will never get a fair and reasonable transactional or any kind of historical reconstruction of what the IIM holders should have gotten; and I think his example was a very telling one. Otherwise, what you have was statistical sampling or other things or quick fixes like TAAMS. And I don't want to repeat this too much, but more than four years ago I sat in a room and begged appropriators not to give money to TAAMS, because I knew what it was, it was an oil and gas accounts receivable system, and I knew it wouldn't work for other resources. It didn't. But the answer that I got back was we agree with you, we don't think it is going to work. If we don't appropriate the money, we will be seen as anti-Indian, and we can't withstand that. I don't think that would happen today, but that was a regrettable thing that happened in the past. I will be very brief. In conclusion, there are lots of methodologies that can be used to find the truth. I advocate using them all; not just one, but using them all. And if one doesn't work, try another one, because there are a lot of them out there. But there are only two conceptual approaches to historical fixes and trusts. One of them is agreed procedures, and statistical sampling is an example of that. That is where you get one set of data, you assume it is correct, you put one methodology to it and you come up with conclusions. Accountants love it because they are protected. They are methodology- limited and they are data-limited. The other is inelegantly called scrubbing. And what that means is you take your shirt off sometimes, you get down into the boiler room, and you find everything you can. You look at the historical data that the DOI has, not on a sampling basis, but on a holistic basis, and you look for trends that you can then project back into history. And you look at all of it and you see what people of good faith in Albuquerque and in Montana and other places have done or tried to do to account for these leases, and you project that back. I am a scrubber. I believe that the only way to find out most of these situations is to get in and look at all of this data, use all of these methodologies, and come up with something that is fair and reasonable. And I do not believe that you will ever have a settlement that will be based upon statistical sampling or quick and dirties. You are going to have to look at everything that is out there: extrinsic evidence, modeling, and a reassessment of existing data. There was something said about independence and how we go forward on this. I have a suggestion, and my suggestion is very simple. There does need to be an independent body. And I actually wrote a proposal for one, as did a number of other people. But this one can be very modest, and it can be a baby step. And what I would like to see Congress do is to put together a team, and that team could be led by somebody like I have in mind. I think William Cohen would be a terrific person because he knows Indian affairs and because he is well respected on both sides of the isle, if he is available. But you need professionals who are going out and getting information. You need a feasibility study by the best in the country who will, because I have talked to them, give their time to go out, to see whether or not, using all of these kind of methodologies, can you come up with a fair and reasonable historic reconstruction of the IIM accounts, without squabbling about what is an accounting or isn't an accounting, or limitations here and limitations there. Without that, if all you do is to sit around and talk again about structure, then Congress will be doing the same thing that the DOI has been doing in the last four years, which is reams of reports on reorganization and moving the chairs around on the Titanic, and not one iota of expertise applied to the data to come up with what the answers are. It is time now to get to work, and my suggestion is time- limited, very money-limited, but get the right people and get them into a feasibility study to say can it happen; can you put all this stuff together; can you find this evidence; is there enough evidence; are there too many variables; can you do it. I think the answer is going to be yes, you can. And then I think you take that same group or a similar group and use them as the center core of a mediation settlement process where they are independent, they have no outcome agenda, and the DOI comes in, gives its evidence, the plaintiffs come in and gives its evidence, whether it is extrinsic, whether it is old, whether it is new, wherever it comes from, and you beat it down to something that is fair and reasonable. It happens in the commercial sector all the time; it can happen here. But for the love of heaven, at this point on, get experts in and get information on the table. No more restructuring. No more reorganization. You have got to get to the data and you have got to have somebody you trust turn around and say this is viable, this can be verified, we can do it, or say you can't; but find out. And that is my modest suggestion. One part of my written testimony that I would ask people, when they have time to take a look at, is entitled ``What Is Going On At The DOI?'' because I have a lot of respect for a lot of people at the DOI, especially in this Administration. I am not one that looks back and visits all the problems of the past, especially during the bad years on this Administration. I don't think that is fair, I don't think it is reasonable. I think there are a lot of good people who are trying to do the right thing, but something is wrong, because they are stumbling. Instead of joining the issue that was put forward by the plaintiffs in these really telling expert testimonies, they simply fell back on limited records, statistical sampling, statutes of limitations. They keep falling back on that. Why are they doing that? Is it because they don't get it? Is it because they don't understand that Indian country wants more? I don't think so. I think they get it. Is it because they are worried about losing jurisdiction? Yes, I think in part it is. I think that they don't want an independent body involved in this because they think they will lose jurisdiction. The independent body issue is what brought the task force to its knees. The task force worked terribly hard, solved a lot of problems, identified a lot of problems, but the DOI never, in my mind, when it got down to the hard question of independent monitoring, intended for there to be any kind of independent monitoring, and that is what brought it to its knees. I want to compliment Mr. Cason on something because he went to the third issue of the DOI. First of all, in terms of losing jurisdiction, I don't believe that is a problem. In fact, for a while the DOI will lose jurisdiction if you have independent trust fixers, but I have always maintained that this is the biggest Government in-house training program of all time. If you have the best commercial people in the world come in and fix this problem and train trust officers within the BIA, you are doing them a great favor for their future and you are preserving their jobs. This is not taking away jurisdiction. And sooner or later this problem is going right back to the BIA to administer. The problem is they don't know how to fix this problem. They don't have the expertise. You look in their reports to see if they are going to get it; you can't find it. Two other things real quickly, because I do not want to overstep my time. This is a common sense fix. I read Tex' testimony in the House only a few weeks ago, and he had a hypothetical colloquy with Senator Norton on grazing land, and Norton was saying, look, we don't have the records, how can we reconstruct this. And Tex kept pushing and saying, well, if you don't have the records, then maybe we look back at independent oil and gas records. If you don't have that, maybe we look at estimations based upon existing records. If you look at his testimony carefully, he has said exactly what I have said. I am an independent trust fixer, but his commonsense approach to how you use a holistic study of all of these methods to get to the end result, if you don't have the records, is far more eloquent than anything I said today or I have said in writing. And I would invite you to look at his testimony, because I think it is important. My last statement has to do with something that the chairman averted to, and that is the moral cost. You know, it is very hard to get involved in a situation like this and not have your soul affected by it. There is a moral cost to this, and especially if it keeps going on business as usual, where we are just restructuring things and we are moving people around and we are getting new flow charts and we are not going anywhere in terms of fixes. One of them is that good people of good faith who really are first-class people, in the context of a vituperative litigation, like the Cobell litigation, get savaged. The day that Neil McCaleb resigned was one of the saddest days for me in the last 4 years. That should not have happened, because he would have been one of the first, I think, internally in the DOI to champion the kind of holistic approach for reconstruction that I am talking about. So that moral cost is not a joke, that is high, and it is hurting the integrity of the entire process. Sorry to rush through all that. I know time is short. I know you have votes, and I apologize for talking so fast, and I really appreciate the opportunity to be here. [Prepared statement of Mr. Gray appears in appendix.] The Chairman. Well, they haven't called us yet, so we can go on for a couple of minutes. I was particularly interested in your statements. I read it before we came to the committee, but listening to it, too, was really interesting. As you know, in the past, some of us on this committee have been saying for the last three or 4 years that we didn't think the Department of the Interior had the expertise to fix the problem, and I, for one, had recommended that we look to the private sector somewhere for people who have the skills in fixing trust problems or managing money. But it was opposed pretty much by the Administration, both the Clinton administration and the Bush administration, and opposed by the tribes too. And I think what has happened is that both sides, very frankly, have been polarized to some extent, have dug in, and it is making it very difficult to reach any kind of a consensus. Too many issues when we deal with it, when we have hearings or debates, we rehash the same problems, we retell the same stories, we restate the same thing, we deal with, you know, the same structural problems we faced in the past, and not enough people who come before the committee, frankly, look forward to how we find a solution. And, from my standpoint, it doesn't do any good, just keep flogging the thing. Somewhere we have got to get out of that and move forward to some kind of creative way of thinking so that we can find a consensus between tribes and the Administration. And I frankly think that no matter what we actually end up with, it is not going to satisfy everybody; someone will always feel that they were cheated or taken advantage of, or something of that nature. But I guess one of the reasons I was really interested in your comments is because you don't really have a dog in this fight; you don't have a client in it, you don't have any particular vested interest, you are not a person that is worried about jurisdiction turf to protect or anything of that nature. And maybe that is what we need more of, people that can step back, have a more objective viewpoint, that aren't emotionally involved in it quite so much, because I think it gives us some opportunity to get some fresh air in this system and some new ideas in this system. Mr. Gray. Can I reply to two things that you just said, because I think they are important? It is not just me. There are people who have been doing this for years and years in the private sector who are very, very good at what they do, and I have talked to them, and they are more than willing to get into this process, because they think it is important. The Chairman. No; I know they are. Mr. Gray. Because they spend their days saving money for banks. They would kind of like to do something for the American Indians. The Chairman. Sure. Well, that is what I and several other people have suggested, but, as I mentioned, it met with some resistance by tribes. Mr. Gray. But that is the second point I want to make. When I said that there was a paradigm shift or a completely different explosion, if you will, in this case, it was when, in February and March of this year, the plaintiffs filed those expert reports. You can listen to an expert like me from the commercial sector about how this is done commercially until the cows come home, and, quite frankly, I don't think anybody is going to take it terribly seriously until they see the results of it, but they won't let me in to do the work to see the results. But the plaintiffs, on their own, commissioned studies on almost every natural resource, and I am not saying that every one of those things is correct, but they are extremely compelling, and that lets the light in. And that is the first time that anybody in the process, a stakeholder, has said, look, there are other ways to find out how to do this, and I think that that ought to be taken seriously. I am sorry the DOI didn't join it head-on; it needs to if there is going to be a legitimate settlement. And that is exactly what the independent people need to key off of if you can do it. So I think there has been progress, Senator. The Chairman. Well, I do too. In hearing the comments of Mr. Berrey and Mr. Echohawk and Tex Hall and Mr. Frazier, the suggestion that we use a mediator, that hasn't been factored in in the past either. I mean, that is a little akin to what some of us have said all the time; we need some outside people involved in this. So maybe we are moving, and I certainly hope so. But today is certainly the beginning of searching for that settlement. We are going to proceed through August into the fall, and I hope we are really going to be able to find a solution to this. Let me yield to Senator Inouye if he had some comments. And by the way, I am going to submit most of my questions in writing because I know we are going to run out of time before I can ask a lot of questions. Go ahead, Senator Inouye. Senator Inouye. Mr. Chairman, this has been a very important hearing, and, regretfully, I must leave because I have another hearing. But may I request that some of my prepared questions be submitted? The Chairman. Absolutely. Yes, if you would submit yours. I am going to submit my prepared questions too. Senator Inouye. And I would like to thank all of you. I thought I was back in law school again. I learned a lot. Mr. Gray. Well, send me some questions. Senator Inouye. Can you tell me that if all the things that you wanted fell in place, how long would this process of mediation take? Mr. Gray. Step by step. I think the first step is the feasibility study. You don't want to just assume you can do this thing. I think you have to have the neutrals that don't have agendas in terms of outcome. I think you have to put together the team, which is not hard to put together. I think you have to put at the head of the team somebody who is politically acceptable on both sides of the isle. I do think you need that. And then I think they are charged with going out and looking at the existing data, whether it is at DOI or anyplace else, and saying, look, do we have enough; is there enough to project out. Look, it is a little bit like if you have ever looked at paleontology things on the Discovery Channel, where, if you have existing data on one-tenth of a human or a pre-human skull, from that experts are able to construct almost exactly what that entire skull looks like. That can happen here, on the basis of information we already have. I can't tell you that as a surety because you really need to do a feasibility study. That could take as little as 6 months. It could be a very tight one in terms of money. Sooner or later you are going to have to pay some people for their time, but they are not trying to get rich on this situation. But I think that feasibility study could take up to 6 months. I think the mediation process, if both sides are coming to the table in good faith with their own experts, and you have a mediation panel that isn't just a mediator, but you have experts on natural resources, Indian rights, forensic accounting, and fixes like I am involved in, accountants, trust administrators from the largest banks in the world, you know, a panel of four or five people who are listening to this, I think that process of information gathering and the counter- information in the adversarial process, you know, here are my experts, here are your experts, now let us winnow them out and find out what is right and what is wrong, I am not going to tell you that that is either cheap or quick. What Tex said is correct. It has taken a long time to get here. Let us not cut the process short. But I do think you are talking about a process of no more than a couple of years. You are not talking about 10 years; you are not talking about a litigation that will drag on forever. Everybody thinks the panacea in this thing is an appointment of a receiver, and I have to tell you as soon as that poor person, whoever it is, is appointed, they start from scratch and with not a whole lot of power, and it is going to be the same thing all over again. And you and I have talked about this before, we are going to be here 10 years from now, if we live that long, and nothing is going to happen. So to answer your question, I think it is a 6-month plus very intensive 2-year, at most, could be less, process. It could be less if the plaintiffs and the defendants do their job, and that is get your experts together, put your evidence on the table. The plaintiffs have already done it; the defendants have not. Put it before us, let us see if we can winnow it out, you know, what is good, what is bad. One of the things that I think frightens the DOI legitimately is that it is much easier to use extrinsic evidence to show what should have gone into an IIM account than it is to get extrinsic evidence to show what went out. And what Mr. Cason said is absolutely right. Unless there was a massive conspiracy, you would have billion dollar balances somewhere, unless it was a massive conspiracy and people were stealing money. So money did go out, and there are extrinsic ways to find that out. We have to help DOI do that. We have to help them get the experts to show that. We have to help them use existing data to project back that money did go out. So it is a fair and reasonable process. Long answer to short question, I think we are talking about a timeframe within that. You know more about Government money than I do, but I think we are talking about tens to maybe $100 million of a process, frankly, a very small fraction of 10 years of an accounting that everybody knows is not going to yield an answer. Or what is worse in my mind, 10 years of a continued litigation with one side beating in the heads of the other, but still no resolution. Senator Inouye. May I ask John Echohawk have you discussed a mediation process with all the parties involved? Mr. Echohawk. No; we haven't, Senator Inouye. Senator Inouye. Now, assuming that all parties agree to it, do you believe that the Congress have to enact a law authorizing mediation? Mr. Echohawk. Well, as I understood the letter that you and Senator Campbell sent, it was an offer for the Congress to fund a mediation process. And I think that is what we are talking about here. As I mentioned in my testimony, we have tried to talk settlement with the Government several times in the past during this case, and it hasn't been successful. And we could again try to do that somehow without a congressional mediation effort, but I don't know whether it would do any more good now than it has done in the past without this congressionally funded mediated effort. The Chairman. And if I might interject too, Senator Inouye, it is my understanding that we don't have to pass a law; that the Committee can do the appointment of a commission. But we do have to find the money to be able to finance it, and we would have to deal with the Appropriation Committee for that. Senator Inouye. Once again, thank you all very much, but I must leave. The Chairman. And we will submit questions from other colleagues. Senator Johnson probably had some and had to leave too. Thank you very much for appearing. I appreciate it. This committee is adjourned. [Whereupon, at 11:54 a.m., the committee was recessed, to reconvene at 2 p.m. the same day.] ======================================================================= A P P E N D I X ---------- Additional Material Submitted for the Record ======================================================================= Prepared Statement of Hon. Maria Cantwell, U.S. Senator from Washington Mr. Chairman, thank you for this opportunity for the committee to examine the problem of trust fund mismanagement and recent efforts toward its reform. Trust fund mismanagement marks a significant failure of the U.S. Government's trust responsibility toward tribes and individual account holders. As the chairperson of the Colville Tribes from Washington State framed it, ``One of the saddest chapters in American history is the long-term mismanagement of trust resources'' which were intended for the benefit of Indians and tribes. Most recently, the class action lawsuit, Cobell v. Norton, has brought renewed urgency to the need to reform trust fund mismanagement. I share the dissatisfaction of the court in the failure of the U.S. Government's trust responsibilities, and I echo its calls to reform trust management. However, it is critical that this reform be done with careful calculation and in a way that affirms, not diminishes, trust responsibilities, tribal self-determination, and self-governance. Numerous tribes from Washington State have expressed serious concerns about the Department of the Interior's proposal to create a new Bureau of Indian Trust Assets Management, and I share these concerns. In fact, several tribal leaders from Washington State are in attendance today, and I would like to thank them for their leadership on this issue. The tribes agree that there is significant room for improvement in the management of trust functions; however, they are concerned about both the merits of Interior's plans to create a new Bureau and the fact that tribes were not consulted prior to the development of its proposal. Indeed, tribes and individual Indians are the beneficiaries of trust assets, and the United States' has responsibility to honor the government-to-government relationship its has with tribes. Therefore, it is absolutely critical that tribes play a central role in any successful trust management reform. Representatives from Interior have advised the committee that trust fund management would be improved by removing all trust management duties from BIA, therefore keeping the services BIA provides to Native Americans and trust management completely separate. Washington State tribes have expressed their serious concern that removing trust functions from the BIA would effectively dismantle the agency, which has been the foothold for tribes in the Federal Government. For example, many tribes have partnerships with BIA in the execution of several trust responsibilities, such as natural resource management, and tribes do not want to see their role in the management of their resources diminish if these trust functions are taken out of the BIA. I will ask the witnesses to speak to these concerns today. I understand that we will have the opportunity today to learn about a few of the proposals for trust reform designed by tribal organizations. In addition, the Tribal Task Force is reviewing these proposals and several others that have been tribally generated. It is my hope that Interior will seriously consider the concerns, suggestions, and proposals from the tribal community and also take advantage of the wisdom and insight from the leaders who are working hard to create a viable plan for reform. Again, any successful attempt at rectifying this complex and centuries-long problem must include the experience of the tribes. Again, thank you Mr. Chairman, and I would also like to thank the witnesses and the representatives from Washington State for being here today. I look forward to hearing the testimony and learning more about what we can do to assist in the effort of meaningful trust management reform. ______ Prepared Statement of Hon. John McCain, U.S. Senator from Arizona Mr. Chairman, thank you for scheduling today's hearing as part of the continuing oversight of this committee on issues associated with the Federal Government's management of individual and tribal trust funds accounts. Today's hearing topic is one that is a source of considerable controversy, which involves a discussion of alternatives to an historical accounting of individual trust funds in order to settle the class action lawsuit filed on behalf of 300,000 individual Indian money trust account holders. Essentially, we're being asked to consider the fundamental question of whether the Congress should override a previously legislated mandate of a full and accurate accounting of all individual trust funds, as required by the 1994 American Indian Trust Funds Management Reform Act. As history and the current court case have demonstrated, the Department of the Interior has flagrantly failed to fulfill its trust duties. Hundreds of millions of dollars have been spent on failed efforts to either identify reconciliation efforts, or spent on consultants to evaluate the extent of the Federal Government's liability for mismanagement. Despite these efforts, we are still without a reasonable solution. Mr. Chairman, as I have stated before, this Indian trust funds mismanagement debacle is one of the worst I have ever seen. And, I can see no end in sight. If this type of egregious action had been inflicted on any other ethic group, there would have been a tremendous public outcry. I'm continually frustrated that, no matter how many hearings we schedule, or how much money is appropriated to the Department, there is no clearly identified solution that is possible for a fair reconciliation, nor is there one that is truly supported by the tribes. I'm not sure what the solution is, however, if there are mechanisms which can be identified, they can and should be considered. And, most fundamentally, these options must be identified with the full and active participation of the affected beneficiaries--the Native American beneficiaries. However, any potential settlement solution is only a partial answer to a larger problem. Even if the Cobell case can be settled, the Interior Department still retains a trust responsibility to ensure that tribal trust accounts and trust assets are appropriately managed. My colleagues, Senators Daschle and Johnson, and Representatives Udall and Rahall in the House, have introduced revised trust reform legislation to address the tribes' highest priority areas to improve trust funds and trust assets management. I urge the committee to consider this bill as part of the overall need for legislative reforms and to schedule a hearing as soon as possible. This committee is the appropriate forum to consider such legislative proposals. The recent attempt by the House Appropriations Committee to include legislative provisions in the fiscal year 2004 Interior appropriations bill was another failed effort to override the Indian beneficiaries and impose a quick remedy. As with any legislative rider to an appropriations measure, I opposed this language, not only on principle but also to object to the clear intent to circumvent an open legislative process. If the Indian plaintiffs in the Cobell case wish to pursue a legislative settlement, I would not object. However, I would object to one that is imposed upon them without their consent. It is long past time for the Interior Department to own up to its responsibilities and work with the Congress on meaningful steps to return rightfully owed money to Native American beneficiaries and concentrate Federal resources on lasting reforms, not on litigation and expensive lawyers, so the Federal Government can truly work toward improving the lives of Indian people. 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