McCaleb speaks on Trust reform


WASHINGTON, D.C. ? A new spirit of cooperation prevails between the BIA and tribal leaders in the vexed effort to straighten out the Interior Department's Indian trust fund debacle, declared BIA chief Neal McCaleb in an exclusive interview with Indian Country Today on June 4.

The BIA arranged the interview as part of its publicity campaign for a report to Interior Secretary Gale Norton on the work of the Tribal Leader/Department of the Interior Trust Reform Task Force. The report listed five options for dealing with the thoroughly tangled trust accounts, although they consisted of reshuffling the Interior Department's organizational chart.

The report was notable mainly for the ideas it ruled out. It rejected the idea of a receivership outside of the Department, a goal of the class action lawsuit launched by Elouise Cobell. And it effectively killed off Norton's own proposal for a new Department agency, the Bureau of Indian Trust Asset Management. (BITAM). Roundly condemned by tribes for failing to consult them last year in the BITAM proposal, Norton emphasized that she would use the Task Force report for an elaborate round of meetings with Indian leadership. She said regional meetings would culminate in a national consultation in Bismarck, N.D. June 19 during the summer conference of the National Congress of American Indians.

In the interview, McCaleb confronted a round of questions about the dismissal of his number two man Wayne Smith. Before shutting them off, he did indicate that he made the decision to dismiss Smith in the midst of charges and counter-charges of improper influence on Bureau decisions affecting tribal casino interests. "That would reside with me," he said of the firing.

An edited text of the interview follows:


ICT: Who made the decision to force Wayne Smith out?

McCaleb: I guess that resides with me.

ICT: What specific information led to the decision?

McCaleb: I'm not going to go into that right now. That's a personnel matter that's potentially up in the air for further review, you know, and perhaps even litigation so I'm not going to comment on that.

ICT: We're assuming the investigations are still going forward by the Interior's Inspector General and ??

McCaleb: I'm not going to comment on that either. I'm sorry, guys.


ICT: I wonder Mr. McCaleb, if you can give us a sense of what you feel the progress has been on this trust consultation process?

McCaleb: If you were in Albuquerque on December the 13th or had a reporter there you know that it was a very adversarial start. It has matured in the process of eight hearings and four meetings of the task force to being one of a cooperative, well-aligned joint effort between this tribal task force and members of the upper echelon of the Department of Interior, as well as myself, and I would characterize that we've moved from adversaries to allies with the common goal of finding ways to provide better delivery for Trust services.

ICT: We've noticed that there have been several options here that were presented in the report. Is there any specific one right now that you or the Task Force is leaning toward?

McCaleb: Well, the Task Force really did not support Option Three. They did not support Option One. So what they're doing is really advancing Options Two and Four, which has four variations, and Option Five. Option Two has two deputy secretaries. The objective of that is that the single executive sponsor be elevated to the highest possible level within the department. Having two deputy secretaries is a little bit problematic, so they came up with Option Five that has an undersecretary for Indian Affairs, which is not an uncommon organization for a department - to have an undersecretary for specific areas of interest.

Option Four outlines several different variations under the Assistant Secretary of Indian Affairs for the grouping of different functions like education, trust resources and other trust services. And then those will be distributed for discussion between now and the national consultation which will be held the 19th of June in concert with the summer National Congress of the American Indian meeting in Bismarck, N.D. We'll also have our fifth Task Force meeting the week preceding that, from the 13th to the 15th, in Bismarck.

Nedra Darling, BIA spokeswoman: And there will be consultations going on throughout the regions as well, tribes and regional representatives.

ICT: Do you think that after that NCAI meeting in Bismarck that you're going to be fairly close to making a final recommendation?

McCaleb: Well, it's hard for me to speculate on future events but there is going to be a joint hearing before the Senate Indian Affairs Committee and House Resources Committee specifically to discuss these matters [on June 26] and I think the Tribal Task Force has set for itself a very demanding schedule to try to be ready for that with a definitive proposal.

ICT: As part of this whole effort to find a solution to the Trust management, We know some legislation has been proposed on the issue of the fractionation of Trust lands. Do you see that as an integrated part of the solution?

McCaleb: It clearly is because one of the real problems is the exponential expanding number of heirs to the allotments. This makes, whatever the organizational structure, dealing with this very rapidly increasing number of heirs a daunting management problem. So Congress has seen that and they've authorized a pilot program in the Indian Land Consolidation Act which permits us, we're spending about eight million dollars a year to find interests less than two percent from the fragmented heirship, to return to the tribes. To give you an example of how problematic that is, this [consolidation] has largely been done in the mid-west region out of the Minneapolis office, and involved a total of 41,000 trust interests, allotment interests. And we're still about the same place we were in the total number of allotment interests in that region. So even after we bought 41,000, I think we started out at about 171,000 and we're still at 171,000. So basically even after all this effort in buying 41,000 trust interests we're still even, dead even.

ICT: You are basically treading water because these parcels of assets keep getting fractionated through normal birth rates and the passing on of properties and so forth.

McCaleb: Right. And they will fractionate exponentially. For example, there are more Indians in America today than there were in the late 1870s, a lot more. The idea at the end of the 19th century and the beginning of the first quarter of the American century was the concept of the vanishing American Indian. Well the Indian is not vanishing. The American Indian is expanding the strength of their numbers.

ICT: Do you see this process as being effective in terms of including and empowering tribal governments?

McCaleb: Well absolutely. Some of the criteria that we have talked about is that we want to, number one, strengthen and improve the delivery of trust services and improve the integrity and effectiveness. Number two, we want to bring the trust resource management, the land aspect of it, to the agency level. And that in itself strengthens tribal governments because ? that's where the local government decisions are made. And of course many of the tribes contract those trust services from the agencies, either under 638 contracts or self-governance compacts.

ICT: Do you see this process as a fix on some of the policies of the past that, whether by design or by default, served to lessen tribal authorities?

McCaleb: Yeah, you know I've been around these activities in government, usually on the outside, since the early 70s. I was actually appointed on the Oklahoma Indian Affairs Commission in 1967. There are light-years of difference between the authority and role of the tribes now as to what there was 30 years ago when President Nixon first articulated his [American Indian] self-determination policy.

ICT: Let's move on to the technical management like the software. By Interior Secretary Norton's own admission, the Trust Asset and Accounting Management System software (TAAMS) has not met its objectives. What is to be done with this system?

McCaleb: Well, first of all EDS (Electronic Data Systems), which was the specialist brought in initially to take a look at TAAMS and then their contract was expanded to look at all the aspects of trust asset management has made the point that the model component of TAAMS needs to be preserved. What they did say is we shouldn't go ahead with the other modules and components at this time.

ICT: How solvable is the software problem? We understand that there are so many gaps in the documentation that it's been impossible to reconstruct?

McCaleb: One of the issues here is the data cleanup. A lot of the information that existed at the agency at the procedural level was duplicative or contradictory or there were gaps and that's another major element of the trust improvement program, to clean up that data. And that's being carried forward right now by the Office of Trust Transition through the Albuquerque office. Ross Swimmer is the head of the Transition Office. So those activities are going forward, as well as the probate changes. That's another area that will help us clean up.

Senator Campbell had a bill we had a public hearing on a couple of weeks ago about some probate changes, the nationalization of probate, instead of having 34 different states which are handling probates in 34 different ways. That will help expedite probates and therefore expedite the Indian land consolidation. Because you can't buy it until you've got title.

ICT: We were curious about the report as it stands now, it seems to be mainly procedural or organizational. Do you see the consultation process producing some more solid measures like closing out the fractional accounts? How do you think you're going to proceed?

McCaleb: I think everybody's in agreement. I haven't heard anybody dissent on that issue. That has not been an issue in controversy. The issue there is getting the money to do it.

ICT: Has the trouble effecting Arthur Andersen had any impact on the work of cleaning up the Trust?

McCaleb: Not that I can tell. I'm not aware of any. Arthur Andersen made some major reports in the early 90s about the tribal trust balances reconciliation. But I don't know that their current difficulties reflect on the company at large, and I don't think it touched anything to do with our trust activities.

ICT: What is the status of the previous proposals for the BITAM and so forth. Have the consultation hearings supplanted the earlier ideas?

McCaleb: In my judgment they have, but the Secretary is going to speak directly to that in her letter distributing this plan for consultation.

ICT: Is she still standing behind the original plan?

McCaleb: I'm not going to speak for the Secretary on that. Her letter I think will be out tomorrow or the next day.

Darling: I think it's important to look at what the Task Force has done. From an organizational standpoint it's a big step ? There is an interesting comment that Tex Hall made, and that is that after Albuquerque at one of their meetings in Phoenix, it was really the tribal leaders that decided that, gee, we've got the Secretary, the Deputy Secretary, we've got the national tribal leaders and, you know, how do we all work together. There were actually people from Congress there, from OMB ?

McCaleb: ? legislative, executive and judicial.

Darling: It's a historical point in history, in American Indian history, that we have all these components working together, and I thought that was quite a profound statement this afternoon.

ICT: That leads us to another question. How do you believe this Task Force work is playing off against the process of the Cobell case?

McCaleb: It is proceeding on a completely independent course. You know nothing happens in a vacuum, and everybody is aware of the Cobell case and the far-reaching potential impacts it could have, but the Task Force has been focussed on what we can do in a global way to reorganize and to improve the delivery of Trust services.

ICT: Do you see any circumstances in which receivership might be required?

McCaleb: Well I mean if the Court makes that decision surely that would be the case. However, I would point out that Option Number One has two variations to take the Trust activities outside of the Department. And Option Number One was not approved by the Task Force.

ICT: In other words you have the weight of tribal opinion supporting you against that move on the part of Cobell.

McCaleb: Tribal opinion supports the idea that they think the trust reform and reorganization should take place within the Department of Interior, and more specifically, under the office of the Assistant Secretary.

ICT: Would you say that Secretary Norton and any of you have learned by this process and how would you characterize what lessons you've derived from it?

McCaleb: I think the Secretary said that in her comments today. I'd like to characterize myself as educable.

ICT: How would you describe the development of the atmosphere as this process went along? Was there any particular turning point where people got tired of beating up on you?

McCaleb: Well I wasn't beat up on but I was dragged through a cactus patch a time or two. I think that Chairman Hall characterized the Phoenix meeting as the real turning point. And it was. It was just like somebody just turned on a light bulb. The antipathy went away. The adversarial relationship went away and it became, we've got to get our sleeves rolled up and get moving on this. It became an atmosphere of cooperation. Now that doesn't mean there hasn't been a lot of spirited discussions, both within the Tribal Task Force itself and between the DOI and the Tribal Task Force ? because these issues are not easy issues, and so there has been a lot of spirited discussion. I think the important thing is that we're closing on a solution. What they've offered here is basically three options and I think their anticipation is out of those three options will come one that will be a recommendation. And then we're all going to continue work on fleshing out the details of their implementation.

ICT: Obviously, the BIA's trust fund issue has plagued several administrations. Mr. McCaleb, is it your desire that perhaps this thing can be moved along considerably toward a fix in this current administration?

McCaleb: Well of course I hope and my desire is that we do a major fix on this in our watch. That would be remarkable progress when you consider that this problem has existed for 115 years, since the Allotment Act of 1887.

ICT: And it might be important to note that, from everything that we've seen certainly, is that whatever the fix entails none of these assets or properties will leave Indian ownership. Is that correct?

McCaleb: That's correct. I should say that the underlying trust responsibility is the protection and conservation of the Indian assets.