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Congress intervenes in trust fund reform

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WASHINGTON, D.C. ? For the past six years, members of Congress have criticized the handling of the Individual Indian Money and Trust Fund accounts and asked for accountability, but now one of the biggest critics has introduced legislation to change the way the trust fund accounts are handled.

Sen. John McCain, R-Ariz., was the lead author of a bill introduced on April 19 that would create a Deputy Secretary post in the Department of Interior that would deal with the trust funds while answering to the Secretary of Interior.

"This legislation is intended to advance the current efforts of tribes and the Interior Department to identify and implement reforms regarding the management of trust funds and assets.

"It is not intended to address every issue or problem raised with trust funds or trust assets management, but it deals with two primary issues I believe are important to true reform ? a single, high-level policy official responsible for oversight of trust funds and assets management and, it authorizes Indian tribes to directly manage trust funds or assets themselves through self-governance laws," McCain stated in prepared comments.

The proposed legislation allows for a Deputy Secretary to be appointed by the President with the approval of the Senate. This would not interfere with the responsibilities of the Assistant Secretary for Indian affairs.

Individual Indian Money account holders are in the midst of a class action lawsuit, Cobell v. Norton, to force the federal government to account for untold dollars in lost lease payments.

Trust Fund Accounts are those held by tribes for leased land and royalties from oil and gas, timber and land use. The two are separate accounts.

A nine-member board made up of tribal members, trust fund holders, academics and specialists in trust fund management would work under the Deputy Secretary and not under the Special Trustee, which is the current procedure.

An office of Trust Reform Implementation and Oversight would be established and headed by the new Deputy Secretary.

The bill has received little scrutiny from tribal leaders and organizations, but Keith Harper, attorney for the Native American Rights Fund, legal counsel for Elouise Cobell, the plaintiff in Cobell v. Norton, said the legislation doesn't go far enough.

"In general our perspective on any proposal that ultimately is to get reform on the right track is to create independency in trust reform. The decision maker has to be different. Any other will be mired in litigation and animated by other than what it takes to get the job done," Harper said. "This may be part of the larger solution, it's too early to tell. I don't think this proposal goes far enough."

The McCain bill is likely to be the focus of discussion in various parts of Indian country, the legislature and interested organizations. McCain said the bill is a placeholder bill that can be changed and improved through discussion. He said he was aware of the Task Force that tribes have organized to consider alternative trust reform proposals after tribes unanimously rejected one submitted by Secretary of Interior Gale Norton.

The Indian Trust Asset and Trust Fund Management and Reform Act of 2002, as it is called, carries the names of Senators Tom Daschle, D-S.D., and Tim Johnson, D-S.D., as co-authors. All Senators are from states that have a large stake in the trust reform because of the large land mass held in trust by the tribes for individual Indian Money account holders.

Millions of dollars in lease payments for gas and oil, farm and grazing leases are at stake for individuals and tribes in South Dakota and Arizona.

"The issue of Trust Fund mismanagement is one of the most urgent problems we are faced with in Indian country." McCain said. "Of all the extraordinary circumstances we find in Indian country, and especially in South Dakota, I do not think there is any more complex, more difficult and more shocking then the circumstances surrounding trust fund mismanagement."

The proposed Trust Reform Act of 2002 will allow tribes to implement plans for distribution and management of lease payments to individuals under the Self-Determination Act. The tribes will be given broad discretion in designing and carrying out the planning process.

The plan will still be under the guidance of the deputy secretary, but the legislation will require the Department of Interior to abide by tribal law that applies to the plan and distribution of funds. The tribe, however, will not have unlimited authority to develop a plan without the consent of the individual account holders.

The plan will determine the amount and the source of funds to be held in trust, prepare an inventory; establish specific goals and objectives, set management objectives, and define critical values of the tribe. This work must be completed within three years.

Should a tribe opt out of developing a plan the secretary will provide a plan for the tribe based on the same rules.

But the problem lies in who is making the decisions in the Department of Interior, say the plaintiffs in Cobell.

"That's been the problem. The Deputy Secretary will make policy and decisions and this (Norton) and the last one (Secretary Bruce Babbitt) have been motivated by short term political interests or try to get in a position to win Cobell," Harper said.

"Litigation type remedies are more limiting than other remedies. This is based on those remedies and receivership is the only thing that makes sense.

"There should be some legislative proposal that would do a better job, not something that is purview of litigation," Harper said.

The Reform Act would direct the deputy secretary to develop and maintain an accurate inventory of all trust properties, funds and other assets; promptly post revenues from the trust funds, properties and assets; assure trust fund holders receive prompt payment and monthly statements; audit the accounts at least yearly or more often if necessary; conduct consultation with account holders and ensure the greatest return on the trust assets and enter into the compacts under the Self-Determination Act with tribes.

McCain said this legislation would not reduce the trust responsibility of the federal government toward the American Indian tribes, but it would allow for tribal input into the development of the legislation and trust reform for the future.

"Many Indian policies of the past have failed because they don't allow the intended beneficiaries, the tribes and individual Indians, a role in shaping solutions. I believe that a successful framework exists to allow for direct tribal management ? tribal self-determination, and this concept has been embraced by tribes for more than three decades," McCain said.

Sen. Daschle said he was encouraged that any long-term solution to the problem would be based on government-to-government dialogue.

"I believe the discussion the bill generates will not only provide the catalyst for meaningful tribal involvement in the search for solutions but also form the basis for true trust reform," Daschle said.