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Thomas Slonaker Nominee as Special Trustee

WASHINGTON, D.C.- Against the tumultuous backdrop of the Department of Interior's efforts to reconcile trust accounts, the Senate Committee on Indian Affairs heard testimony on the pending nomination of Thomas N. Slonaker as Special Trustee for American Indians.

The 1994 American Indian Trust Reform Act established the position to oversee and direct all aspects of trust funds management reform within the Bureau of Indian Affairs (BIA), the Bureau of Land Management (BLM), and the Minerals Management Service.

"I have never been as frustrated as I am with the Indian trust management process," said Sen. Ben Nighthorse Campbell, R-Colo., committee chairman. "I am not very confident that the department can clean up this mess."

The 1994 act calls for the appointment of a trustee who possesses the ability and experience in the general management of large entities along with a knowledge of trust fund management, management of financial institutions, and the investment of large sums of money.

Slonaker is a Harvard graduate of Harvard University who has worked for First Interstate Bancorp, one of the largest bank holding companies and a multi-state banking and trust organization with locations throughout the western United States since 1963. He was executive vice president and chief investment officer with investment responsibility for approximately $27 billion of trust assets.

"I think this is a job that simply has to be done," Slonaker told the committee. "I see the position of the special trustee as a very unique leadership and managerial challenge. It also represents a major responsibility to our clients, the American Indians, as well as to our nation itself."

Interior has been under fire over mismanagement of tribal trust accounts and was sued over mismanagement of Individual Indian Monies (IIM) accounts, totaling billions.

The BIA has admitted many of the records relating to these funds have been lost over the last hundred years. Although the agency has said it is not sure if the money is actually missing, some documentation is missing that would show the origin of many of the accounts or where they were paid. Records are scattered throughout BIA offices around the country, including what had been the main BIA document center in Albuquerque, N.M.

In the on-going lawsuit against the government regarding IIM, Cobell vs. Babbitt, Interior claimed it could not comply with a court order to produce documents from the Albuquerque office because they were covered in mouse droppings and in a state of disarray.

Last year, a federal district judge found then- Treasury Secretary Robert Rubin and Interior's Secretary Bruce Babbitt and Assistant Secretary Kevin Gover in contempt for failing to comply in a full and timely manner with a discovery order in the case.

Paul Homan, then special trustee, resigned in protest of what he claimed were attempts to obstruct his efforts to reconcile the trust accounts.

In a hearing last year, Secretary Babbitt said, "There is no evidence of theft or fraud ... the money is there." However, members of the committee and tribal leaders question seriously whether the 1994 law has been followed and whether the action of the secretary or the special trustee help or hinder the government efforts to resolve the trust funds crisis.

Homan claimed the principle reason for his resignation was the executive order issued by Secretary Babbitt to restructure the Office of Special Trustee.

"The implementation of the executive order deprived the special trustee, the Office of Special Trustee and the advisory board of the independence and the authority which was intended by the reform act," Homan said.

The Department is in the midst of a multi-year, multi-agency effort detailed in a High Level Implementation Plan presented to the U.S. District Court March 1. It outlines the scope of a reform effort that involves coordination and attention of numerous federal departments and bureaus, as well as tribes and individual account holders.

The plan details the new automated systems put in place to better manage trust funds and trust assets - the Trust Fund Accounting System or TFAS and the Trust Asset and Accounting Management System or TAAMS.

Sen. Campbell said the committee would hold off on final consideration of the Slonaker nomination until tribes have an opportunity to comment.

Asked what needs to be done to resolve the trust funds crisis, Charles Tilman, vice chairman of the Inter-Tribal Monitoring Association and chief of the Osage Nation, said: "The bureau should have a mission ... they should understand what trust is. They think the statute of limitation applies here. It doesn't."