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McCain’s ‘one good shot’ at trust reorganization stalls in Congress

WASHINGTON – The “one good shot” promised by Sen. John McCain on trust reform reached an impasse March 28 as Indian leaders disagreed on the elements of reform legislation aimed at trust asset management issues. The hearing on titles II through VI of an ambitious Senate bill, S. 1439, followed a March 1 hearing that set the table for a federal monetary payment to Individual Indian Money trust beneficiaries – title I of S. 1439.

According to documents generated by Congress, courts, attorneys, federal agencies delegated by the U.S. government to manage the IIM accounts, and various other investigators, the individual Indian beneficiaries of the trust have been shortchanged of earnings due them from the trust by federal mismanagement of both the accounting system and the underlying revenue-producing assets – land, timber, oil and other natural resources. As part of its stewardship of the resources it holds in trust for individual Indians, the federal government established the IIM accounts to receive the revenue streams flowing from the resources to the individual holders of the resources – the named beneficiaries of the IIM trust.

Title I, concerning compensation, and titles II through VI, concerning the fine points of trust asset management, are joined at the hip in the 109th Congress by more than their sequential presence in S. 1439. As McCain stated at the start of the hearing, his colleagues in Congress will not approve a monetary payment for losses in the IIM trust unless they are confident a “Cobell II” will not ensue, based on issues left unsettled in the Cobell v. Norton lawsuit that has entered its 10th calendar year. The Arizona Republican, chairman of the Senate Committee on Indian Affairs, offered titles II through VI in part to reassure his colleagues.

But first they needed the unified support of Indian country. “We’re never going to pass this legislation unless we have agreement,” he told the morning’s second panel of witnesses: Tex Hall of the Three Affiliated Tribes in North Dakota, Jim Gray of the Intertribal Monitoring Association in New Mexico, Clifford Lyle Marshall of the Hoopa Valley Tribe in California, Austin Nunez of the Indian Land Working Group in Arizona and Majel Russell of the Crow Tribe in Montana. The first panel had been government witnesses from Interior, the named defendant in the Cobell lawsuit, offering multiple major points of complex disagreement with S. 1439.

McCain was counting on the Indian witnesses for the show of unity that would impress congressional members. He certainly got a partial showing of unity as Hall, Gray and Marshall essentially agreed that the structure and recommendations of S. 1439 are strong. But unanimity was always unlikely in view of the sweeping nature of titles II through VI: establishing a trust asset management policy review commission, an Indian trust asset management demonstration project, a program for the purchase and consolidation of fractional land interests, a restructuring of the BIA and the termination of the Office of the Special Trustee, and an audit of the Indian trust funds.

Nunez concentrated on resource mismanagement issues, the mismanagement of the actual revenue-generating resources (land, oil, timber, etc.) as distinct from mismanagement in the system of accounting for and paying out the revenue. (The latter is the subject of Cobell, narrowly considered.) Resource mismanagement issues are sure to slow down the progress of S. 1439 in Congress, Hall said.

By the time Nunez said the magic words – “I disagree with Chairmen Hall and Gray” over a place for resource mismanagement issues in S. 1439 – McCain had left the hearing room, not to return. Sen. Byron Dorgan, D-N.D., as the committee vice chairman, offered a perfunctory remark or two and gaveled the meeting to a close. It had lasted less than one hour.

With that settled, attention now turns to Congress and its appropriations committees, as well as the White House. Appropriators in past Congresses have threatened action on Cobell behind the scenes, but without following through on the public record at least. The public record now includes a suggested dollar amount for payment to the IIM beneficiaries: a figure of $5 billion surfaced at a recent meeting of the Great Plains Tribal Chairman’s Association. Senate Indian Affairs Committee General Counsel David Mullon, teleconferenced into the meeting, did not confirm the $5 billion figure, which tribal leaders associated with McCain.