[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
UTAH NAVAJO TRUST FUND
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OVERSIGHT HEARING
before the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
Thursday, June 19, 2008
__________
Serial No. 110-78
__________
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COMMITTEE ON NATURAL RESOURCES
NICK J. RAHALL, II, West Virginia, Chairman
DON YOUNG, Alaska, Ranking Republican Member
Dale E. Kildee, Michigan Jim Saxton, New Jersey
Eni F.H. Faleomavaega, American Elton Gallegly, California
Samoa John J. Duncan, Jr., Tennessee
Neil Abercrombie, Hawaii Wayne T. Gilchrest, Maryland
Solomon P. Ortiz, Texas Chris Cannon, Utah
Frank Pallone, Jr., New Jersey Thomas G. Tancredo, Colorado
Donna M. Christensen, Virgin Jeff Flake, Arizona
Islands Stevan Pearce, New Mexico
Grace F. Napolitano, California Henry E. Brown, Jr., South
Rush D. Holt, New Jersey Carolina
Raul M. Grijalva, Arizona Luis G. Fortuno, Puerto Rico
Madeleine Z. Bordallo, Guam Cathy McMorris Rodgers, Washington
Jim Costa, California Louie Gohmert, Texas
Dan Boren, Oklahoma Tom Cole, Oklahoma
John P. Sarbanes, Maryland Rob Bishop, Utah
George Miller, California Bill Shuster, Pennsylvania
Edward J. Markey, Massachusetts Bill Sali, Idaho
Peter A. DeFazio, Oregon Doug Lamborn, Colorado
Maurice D. Hinchey, New York Mary Fallin, Oklahoma
Patrick J. Kennedy, Rhode Island Adrian Smith, Nebraska
Ron Kind, Wisconsin Robert J. Wittman, Virginia
Lois Capps, California Steve Scalise, Louisiana
Jay Inslee, Washington
Mark Udall, Colorado
Joe Baca, California
Hilda L. Solis, California
Stephanie Herseth Sandlin, South
Dakota
Heath Shuler, North Carolina
James H. Zoia, Chief of Staff
Rick Healy, Chief Counsel
Christopher N. Fluhr, Republican Staff Director
Lisa Pittman, Republican Chief Counsel
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CONTENTS
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Page
Hearing held on Thursday, June 19, 2008.......................... 1
Statement of Members:
Matheson, Hon. Jim, a Representative in Congress from the
State of Utah.............................................. 2
Resolution submitted for the record...................... 42
Rahall, Hon. Nick J., II, a Representative in Congress from
the State of West Virginia................................. 1
Prepared statement of.................................... 2
Statement of Witnesses:
Downing, Tani Pack, General Counsel and Deputy Chief of
Staff, Office of the Governor, State of Utah, Salt Lake
City, Utah................................................. 10
Prepared statement of.................................... 12
Timeline of Contacts with Representatives of Utah Navajos
and Navajo Nation...................................... 13
Filfred, Hon. Davis, Navajo Utah Commission Chair, and Aneth,
Red Mesa, and Mexican Water Chapters Council Delegate...... 29
Prepared statement of.................................... 30
Maryboy, Mark, Former County Commissioner, Former Navajo
Nation Council Member, Montezuma Creek, Utah............... 34
Prepared statement of.................................... 35
Rockwell, Clarence, Executive Director, Navajo Utah
Commission, Red Mesa Chapter, Montezuma Creek, Utah........ 30
Prepared statement of.................................... 32
Shirley, Hon. Joe, President, Navajo Nation, Window Rock,
Arizona.................................................... 16
Prepared statement of.................................... 17
Swimmer, Ross O., Special Trustee for American Indians, U.S.
Department of the Interior, Washington, D.C................ 3
Prepared statement of.................................... 5
Additional Materials Supplied:
Black, James, President, Oljato Chapter, Statement submitted
for the record............................................. 40
Manheimer, Leo, President, Navajo Mountain Chapter, The
Navajo Nation, Statement submitted for the record.......... 41
2008 Position Statement of the Navajo Nation on the Future of
the Utah Navajo Trust Fund................................. 21
OVERSIGHT HEARING ON THE UTAH NAVAJO TRUST FUND
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Thursday, June 19, 2008
U.S. House of Representatives
Committee on Natural Resources
Washington, D.C.
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The Committee met, pursuant to call, at 10:05 a.m. in Room
1324, Longworth House Office Building, Hon. Nick J. Rahall,
[Chairman of the Committee] presiding.
Present: Representatives Rahall, Kildee, Boren, Bishop and
Matheson.
STATEMENT OF THE HONORABLE NICK J. RAHALL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WEST VIRGINIA
The Chairman. [Presiding.] Committee on Natural Resources
will come to order. Before we begin, the Chair would ask
unanimous consent that a distinguished colleague of ours, Mr.
Jim Matheson, be allowed to sit at the podium and participate
as if he were an actual member of this Committee today.
All right. The Committee is meeting today for a hearing on
the Utah Navajo Trust Fund, and this hearing is unique. In
1933, Congress placed land into trust for the Navajo Nation but
at the same time required that 37 percent of any mineral
royalties be paid to the State of Utah to be expanded for
certain individual Navajos residing in Utah.
Eventually, minerals were discovered on the land and
royalties were received by the trust fund, beginning in the
1950s. To fulfill its obligation, the State of Utah established
the Utah Navajo Trust Fund. Over the years, the state has used
the money to provide educational assistance, drought relief,
road maintenance, and other benefits and services to the
individual Navajos.
I am not aware of another instance in which the Federal
government has directed a state to receive and expend money for
the benefit of individual Indians. Unfortunately, the state no
longer wants to administer the trust fund, and that is
disconcerting because without that conduit the funds will cease
to flow to the Navajos.
I would like to commend Congressman Jim Matheson for
bringing this to our attention and for his leadership on this
issue and so many other issues. He asked for this hearing in
order to focus on the future management of the trust fund. We
have already received some information about various options,
and hope to hear more about those options today.
Most importantly, we look forward to hearing about the
views of the individual beneficiaries and the actions this
Committee needs to take to ensure that the beneficiaries are
informed and consulted with on the future administration of the
trust fund. With that, I will recognize, first, the
distinguished gentleman from Oklahoma, Mr. Boren, if he has any
opening comments, a member of our Committee.
[The prepared statement of Chairman Rahall follows:]
Statement of The Honorable Nick J. Rahall, II, Chairman,
Committee on Natural Resources
The Committee will come to order. Today's hearing on the Utah
Navajo Trust Fund is unique.
In 1933, Congress placed land into trust for the Navajo Nation but
at the same time, required that 37 1/2 percent of any mineral royalties
be paid to the State of Utah to be expended for certain individual
Navajos residing in Utah. Eventually, minerals were discovered on the
land and royalties were received by the trust fund beginning in the
1950's.
To fulfill its obligation, the State of Utah established the Utah
Navajo Trust Fund. Over the years, the State has used the money to
provide educational assistance, drought relief, road maintenance, and
other benefits and services to the individual Navajos.
I am not aware of another instance in which the Federal government
has directed a State to receive and expend money for the benefit of
individual Indians.
Unfortunately, the State no longer wants to administer the trust
fund. And that is disconcerting because without that conduit, the funds
will cease to flow to the Navajos.
I would like to commend Congressman Jim Matheson for bringing this
matter to my attention.
He asked for this hearing in order to focus on the future
management of the trust fund.
We have already received some information about various options and
hope to hear more about those options today. Most importantly, we look
forward to hearing about the views of the individual beneficiaries and
the actions this Committee needs to take to ensure that the
beneficiaries are informed and consulted with on the future
administration of the trust fund.
I look forward to the testimony.
______
STATEMENT OF THE HONORABLE JIM MATHESON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF UTAH
The Chairman. Mr. Matheson, you wish to make opening
comments?
Mr. Matheson. If I could, very briefly, Mr. Chairman.
The Chairman. Sure.
Mr. Matheson. First of all, I really want to thank you for
scheduling this hearing, and I want to thank your staff
because, as you mentioned in your opening statement, this is a
unique circumstance. It has come to us in a way where there are
a lot of questions about what we should do.
As I said, you and your staff have been very helpful in
terms of trying to help sort these issues out and try to come
up with solutions. I just want to make sure we recognize that
the funds that flow out of this trust fund, you know, it is
helping people on the ground, Utah Navajos in San Juan County,
Utah.
I don't want to lose sight of that, but at the end of the
day, this is about helping people, and we want to make sure
that we continue to have a structure where those same folks are
continuing to receive that assistance, so I look forward to
this hearing to learn about it. As I said, this is an unusual
circumstance.
We need to learn about what we can do as options, and I
hope at the end of the day we do the right thing to make sure
Utah Navajos are still obtaining the benefits that they have
been enjoying so long. Thanks for allowing me to be on the
Committee, too, by the way, for this hearing. I will yield
back.
The Chairman. Thank you. Our first panel is Mr. Ross O.
Swimmer, the Special Trustee for American Indians, United
States Department of the Interior, Washington, D.C.
Mr. Swimmer, welcome. We have your prepared testimony, and
it will be made a part of the record as if actually read. You
may proceed as you desire.
STATEMENT OF ROSS O. SWIMMER, SPECIAL TRUSTEE FOR AMERICAN
INDIANS, U.S. DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.
Mr. Swimmer. Thank you, Mr. Chairman. I appreciate the
opportunity to be here, members of the Committee and acting
members of the Committee, I guess, at this point. It is an
opportunity to discuss in some detail the Utah Navajo Trust
Fund, its administration, its origins and what we might suggest
could be done with the trust.
As the Chairman mentioned, the Congress established the
trust fund through legislation in 1933 when this land was
transferred to the Navajo Nation from public domain land. It is
in the area of San Juan County and is called the Aneth
Extension.
As part of the agreement for the transfer of this land to
the Navajo Nation, it was determined that Navajos living in
this particular area of Utah should receive some benefit from
the land if that opportunity arose, and it was such that in the
event that oil and gas were produced in paying quantities at
least 37 and a half percent of the royalties from that would be
paid into a trust fund that would be administered then by the
State of Utah.
As the Chairman mentioned, in 1959 oil and gas wells were
developed in the Aneth Extension and they did produce oil and
gas revenue in paying quantities, in fact, significantly so, to
the extent I believe of several million dollars annually.
Currently, payments from these oil properties are made
directly to the Navajo Nation. The only role right now of the
Department of the Interior is to do an accounting for the
payments from the producers. The producers of the oil and gas
actually make the payments to the Navajo Nation.
The Minerals Management Service then provides all of the
parties--the state, the Navajo Nation and the Bureau of Indian
Affairs--with a report that reflects the royalties from the
total production of oil and gas. Currently, the money that is
collected by the Navajo Nation from the producers, 37 and a
half percent of that is sent to the State of Utah for the Utah
Navajo Trust Fund, and the balance is retained by the Navajo
Nation in its own account.
This money does not flow through the Office of the Special
Trustee or the Bureau of Indian Affairs. In recent years, there
has been criticism by the tribe and by some, I believe, in the
Aneth Extension, some of the Navajo Indian folks living there,
regarding the administration of the trust by the State of Utah.
That has resulted in a lengthy lawsuit that has been going
on now for several years, and it probably will continue for
some time.
It is our understanding that the State of Utah, while
acknowledging its role as trustee and certainly a lot of the
work that it has done over the years, prefers not to continue
to be trustee for this trust and would like to see someone else
become trustee that would have perhaps a closer tie to the
folks, the beneficiaries, of the trust which are the Navajos
living in that area and Indians living in the Aneth Extension
generally.
In looking at a successor trustee, we understand that there
has been some consideration for the Department of the Interior
to undertake this role. This is not something that we would
prefer doing. Currently, legislation allows the Office of the
Special Trustee and the Department of the Interior to accept
funds in trust and to administer those funds when they are sent
to us from Indian trust lands as Indian trust money.
This money technically is coming from Indian trust lands
and is trust money, but it has not been received into the
Indian trust. It has been received directly by Navajo Nation
and then the 37 and a half percent sent directly to the State
of Utah. We don't believe we have authority. We of course could
have authority if the Congress so chose.
Currently, the money that goes into the trust fund also is
invested by the State of Utah in various instruments that most
generally we are not permitted to invest in. The Special
Trustee and the Department of the Interior are allowed to
invest trust funds from Indian lands only in certain
securities, those guaranteed or backed by the Federal
government, and this is statutory language.
The State of Utah is currently, as I understand anyway,
investing the funds that are not used or disbursed, they invest
the funds in the trust in accordance with the prudent investor
rule which gives them a lot more latitude, and in many cases
would allow a greater return to the trust than we are permitted
in the limitations that we have for investing.
So that also would have to be changed, and the statute
would have to treat these funds as Indian trust funds, and they
would be limited then in the manner in which they could be
invested.
The other major issue that we would have with the
administration of the trust itself is the language of the act
essentially says that these monies are to be used for the
health, education and general welfare of the Indians residing
in the Aneth Extension, and then later amended to include all
Navajo Indians living in San Juan County.
We invest funds. We don't really have programs. We don't
have a way in which we could determine what kind of benefits
should be bestowed on Indians or on the Navajos within this
area. I understand that some of the money now is being spent on
educational benefits, perhaps some on healthcare.
I even believe that there are buildings, other fixed assets
that exist now that have been a product of this trust. Also, as
a result of that, substantial sums are used from the trust fund
to take care of those buildings and other properties that are
involved in the trust.
So it is not something that the Special Trustee certainly
would be capable of administering, and I am not sure that it
really falls within the Bureau of Indian Affairs arena either
as a way of managing this property.
The state and the Navajo Nation may have some things that
they could work out as far as the disposition of these
properties but it would not be a situation where the Department
of the Interior believes it should be engaged in the
administration of the funds after the investment.
If it is solely the investing of the funds, that is
something that we could do, but we would need to have some
organization that could then do what the State of Utah is doing
now. It is our opinion that it would be more appropriate to
have the Navajo Nation manage the trust funds.
They could do this through a third-party money manager, an
investment firm, or even internally in accordance with rules
and regulations, I am sure, that the Navajo Nation has or that
could be developed in a trust agreement. This is an opportunity
that has been given to all tribes in the 1994 Indian Trust
Reform Act, the opportunity to withdraw funds from the Indian
trust and administer those funds.
This would be certainly in line with that, and as the
government relationship with the tribe, we would encourage the
Navajo Nation, as a sovereign government, to assume the
management of these funds, and there are plenty of
opportunities in the private sector to support that management.
Then, I think it is also important that the Navajo and
Indian folks living in the Aneth Extension have an opportunity
to continue to determine how best to spend the funds on their
behalf. It is important that they have a voice in this. Just as
a suggestion, it could be a nonprofit organization, be created
to actually administer the funds on behalf of the Navajo folks
in that area, or some other organization within the Navajo
Nation itself.
Finally, recognizing that the State of Utah has been sued
over its management of the trust, and that is a case yet to be
resolved, we would of course encourage that that case be
resolved before the State of Utah withdraw from the trust so
that whichever successor trustee comes in has a clean slate, so
to speak, when they take over that trust.
Mr. Chairman, that concludes my testimony, and again,
appreciate the opportunity to be here and will answer
questions.
[The prepared statement of Mr. Swimmer follows:]
Statement of Ross O. Swimmer, Special Trustee for American Indians,
U.S. Department of the Interior
Good morning Mr. Chairman, Ranking Member, and members of the
Committee. It is a pleasure to be here today to discuss the Navajo
Nation Trust Fund. We understand that the Navajo Nation would like to
take over and administer its fund. The Department supports the Nation's
desire to manage its own account.
Background
In 1933, Congress established the Utah Navajo Trust Fund (UNTF)
through legislation (47 Stat.1418), which designated Utah as the
trustee. The corpus of the UNTF comes from 37.5 percent of net
royalties derived from exploitation of oil and gas deposits under the
Navajo Reservation's Aneth Extension. According to the statute, the
37.5 percent net royalties were to be paid to the State of Utah, which
was to be used for the health, education and general welfare of the
Indians residing in the Aneth Extension. In 1968, Congress expanded the
beneficiary class to include all Navajo Indians living in San Juan
County, Utah (Pub.L. 90-306, 82 Stat. 121).
In approximately 1959, oil and gas wells in the Aneth Extension
began producing in paying quantities, and the United States Department
of the Interior, through oil and gas mining leases on the Navajo tribal
land, began collecting oil and gas royalties. The leases are between
the Navajo Nation and the producer, and are subject to approval by the
Secretary of the Interior. 1 The State of Utah is not a
party to the tribal leases.
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\1\ See, e.g., 25 U.S.C. Sec. 396a (provision in 1938 Indian
Mineral Leasing Act allowing tribe to lease unallotted Indian land for
mining purposes, subject to Secretary of Interior approval); 25 C.F.R.
Pt. 211 (Leasing of Tribal Lands for Mineral Development).
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Currently, payments from lessees are sent directly to the Navajo
Nation. The Mineral Management Service (MMS) receives the Report of
Sales and Royalty Remittance (Form MMS-2014) from the royalty payor and
prepares a monthly summary of the reported royalties for 21 Aneth
leases. MMS sends the monthly summary to the Navajo Regional Office of
the Bureau of Indian Affairs, the Utah Navajo Trust Fund, and the
Navajo Nation.
The Navajo Nation collects the Aneth lease royalties directly and
remits 37.5 percent to the UNTF account administered by the State of
Utah. The State, upon receipt of each check, deposits it into the Trust
Fund and invests the unused royalty funds according to rules set forth
in Utah's statutes.
In recent years, Utah's administration of the UNTF has been
criticized by some in the Navajo Nation, and there is currently
litigation pending between beneficiaries of the trust and the State of
Utah over the management of the trust. It is our understanding the
State of Utah now wishes to sunset its administration of the UNTF, and
the Utah Legislature has introduced legislation to that end. If the
State of Utah will no longer act as the trustee of the UNTF, the
question arises who should administer this fund. Some have suggested
that the Department of the Interior--specifically the Office of the
Special Trustee for American Indians (OST)--might be the most
appropriate entity to assume this function, and we have been invited to
testify before this Committee to express our views on this suggestion.
We believe it is more appropriate for the Navajo Nation to administer
its fund.
A Successor Trustee for the UNTF
In the view of the Department, we would not be the appropriate
entity to take over the trust functions currently being performed by
the State of Utah, for a number of reasons. OST is constrained by
statute and regulation as to what monies it can receive into its system
and how those monies can be invested (25 USC Sec. 161 et seq.). The
Special Trustee is not permitted to take money for investment that is
not held as Indian or Tribal Trust money, and all current OST trust
monies are invested in public debt securities.
We have no capacity to expend those funds to carry out the intent
of the1933 Act. These Utah Navajo trust funds are designated for a
particular purpose: the health, education and general welfare of all
Navajo Indians living in San Juan County, Utah and for Indians residing
in the Aneth Extension. Interior is not aware of how decisions have
been made to satisfy the intent of the trust.
We believe it is more appropriate for the Navajo Nation or a
nonprofit organization made up of Navajo citizens to contract with a
private investment firm for money management and then create a process
whereby the money collected and investment earned could be used to
further the intent of the 1933 Act. Additionally, the Department is
aware of the Navajo Nation's position expressing its desire to manage
the trust and disburse the funds to the Utah Navajo beneficiaries
consistent with the current disbursement and percentages. The BIA,
consistent with our government-to-government relationship with the
Navajo Nation, acknowledges and respects the position of the Navajo
Nation as it pertains to the Utah Navajo Trust Fund.
Finally, we suggest that no action be taken to relieve the State of
Utah from its burden as trustee until the current litigation is
resolved. The damages phase for failure to account and invest funds
properly is still underway. Otherwise, the U.S. should ask to be
indemnified by Utah for action the court might take.
This concludes my statement. I would be happy to answer any
questions the Committee may have.
______
The Chairman. Thank you. Let me turn to Mr. Matheson first.
Mr. Matheson. Well, thank you, Mr. Chairman. Mr. Swimmer,
appreciate your testimony. You know, it seems to me we are
scrambling to determine what to do to ensure that Utah Navajos
are able to continue drawing benefits from the royalties that
are due to them.
This fund, this trust has a long and checkered history, but
as I look over that history and that timeline since it was
established first in 1933 it seems real clear that at every
turn the Federal government and Federal action has ultimately
determined how to manage and modify the trust fund, and yet,
earlier this year the Utah Legislature enacted legislation to
basically dissolve the trust fund, or at least its
participation in this, taking away its responsibility for
managing the fund.
So the first question I have for you is, is the State of
Utah permitted to unilaterally divest itself from the interest
in this matter without any Federal action?
Mr. Swimmer. That is a question that I have asked inside
Interior with our own solicitors. I am not sure. I don't have
an answer. I would be concerned that the state can unilaterally
withdraw from its responsibility under the congressional act
that created this trust and certainly not without consent of
the beneficiaries and actually the settlor of the trust, which
was the Congress.
Mr. Matheson. Would it be possible to get the solicitor's
opinion out of the Department of Interior about that issue if
you have talked with them about that?
Mr. Swimmer. I am certainly happy to request one.
Mr. Matheson. I think that would be helpful for the
Committee record to see that, so if we could make that request,
that would be appropriate to do.
Mr. Swimmer. Sure.
Mr. Matheson. Second question. Set aside that first
question, let us say it is determined the state can abdicate
its responsibility without Federal legislation. Do you have any
thoughts or proposals about how the funds should be managed
between July 1, when the legislation of the State of Utah
passed says they are out, and when we ultimately make a
decision in Congress about what the next structure should be?
I just don't think it is going to happen by July 1. So do
you have a thought about how these funds should be managed
until some new entity or new structure is put in place?
Mr. Swimmer. Managing the funds is the easiest part of it.
The disbursement of the funds would be my concern. I think
logically the Navajo Nation--it invests now its 62 and a half
percent that it retains--it could certainly invest, as I said,
through various opportunities, private sector investment firms
or whatever, the money that would go into the trust.
The disbursement of the money, though, to ensure that it
meets the obligations of the trust, which is the health
benefit, education benefits, et cetera, to the Indians in the
Aneth Extension and the Navajos living in San Juan County, that
is the issue that really has to be addressed here as to who is
going to do that.
It seemed to me again that Chairman Shirley would have some
ideas about making sure that the Navajo people living in that
area are available on committee or a nonprofit organization
where they would give guidance to the Navajo Nation on what the
needs are in that area. As you say, trying to create such an
organization by July 1 would be extremely difficult.
However, I do believe that even now there are groups, if
not formally organized groups, in the Aneth Extension made up
of Navajo citizens there that could be brought together fairly
quickly to come up with a plan of how this money should be
disbursed or spent.
Mr. Matheson. One more question. As this Committee, as we
consider Federal legislation to deal with this issue, do you
have any recommendations for how that legislation can be
crafted to make sure we protect the integrity of the fund,
particularly with regard to transparency and accountability?
Mr. Swimmer. Well, again, the Navajo Nation I think is
certainly a responsible party here and could be held to account
for that and act as a trustee on behalf of the folks in that
area. That is the real intent of the legislation is that this
37 and a half percent of the money be spent for the welfare of
Indian people living in that area.
The Navajo Nation has a long record of, you know, managing
projects on the reservation, taking care of folks, and I think
they would be certainly the logical choice for, you know,
administering this kind of a trust.
Mr. Matheson. Thank you, Mr. Chairman.
The Chairman. Mr. Boren.
Mr. Boren. Thank you, Mr. Chairman. I have a quick
question. I wanted to point out that our panelist is from the
great State of Oklahoma, and a great friend and also has a
lovely wife, Margaret, who is a super special lady. I just
wanted to pass that along if he runs into Margaret.
Anyway, I have a couple of questions. One deals with
liability, you know, and this is something when we have been
dealing with other pieces of legislation where the Federal
government can be liable. I know you were kind of saying,
``Well, we are not necessarily; we don't want this hot
potato''--but if we do, what concerns do you have about
liability for the Federal government for the Department? Could
you share your thoughts on that?
Mr. Swimmer. Well, I am sure that you know, and the
Committee members know, that we are currently involved with
over 103 tribal lawsuits which claim that we have not
sufficiently or appropriately invested money, and collected
money and disbursed money. You can also walk down to the
Federal Courthouse where we are right now continuing a hearing
on the Cobell matter which should come to an end here pretty
soon.
This is ripe for litigation, frankly, with anyone that
administers the trust, except I think for the Navajo Nation. I
think that is one of the things that we need to come to grips
with, frankly, in Indian Country is that tribes, many tribes,
not all of them, but many tribes now have the expertise and
should be administering their income, particularly from these
kinds of resources.
While some of those tribes have taken on that
responsibility, there are many more that still leave it to the
Federal government, and there is still over $800 million a year
that flows through our trust fund and $3.5 million that we
manage on a regular basis. In spite of all of the lawsuits that
are against us, it doesn't seem that the tribes are really
interested in managing this money on their own.
I believe that is something we need to look at, and I think
the Navajo is responsible for that.
Mr. Boren. Can you describe just kind of in laymen's terms
a little bit about the prudent investment standard, because it
is something that I have, you know, been concerned about
because the last thing you want is all of this money that could
be used for healthcare, and for housing, for whatever the
issue, not just for this particular case.
Could you kind of give us in laymen's terms what a prudent
investment standard is and how it would be applied in this
instance?
Mr. Swimmer. Well, in normal trust law there are a whole
set of trust duties and one of those, if it is not set out
separately in the trust document, you follow those trust
duties. In this case, a prudent investor rule simply means that
you will invest your beneficiary's funds in a prudent and
responsible way.
It doesn't limit the investment, but, for instance, if you
wanted to categorize, it is most likely that hedge funds would
not be inappropriate investment. On the other hand, if you put
everything into U.S. Treasuries, that wouldn't be appropriate
either because you have the risk in return. Normally, you would
look at a range of options that would be at least reasonably
secure, not risk free, but with moderate risk.
You can take a moderate risk as a trustee and increase the
return, depending on length of time of the investment, the type
of instrument, and that sort of thing. That is really what
prudent investment means. That is giving you a range of
opportunities to make investments that have moderate risk with
a moderate return.
You are not trying to get the highest, you are not trying
to of course be the safest, which would result in the lowest
return.
Mr. Boren. Thank you. I have no further questions, and I
yield back.
The Chairman. Gentleman from Michigan, Mr. Kildee.
Mr. Kildee. Thank you very much, Ross. It is good to see
you.
Mr. Swimmer. Good to see you.
Mr. Kildee. We have been working together in matters in a
very good fashion for many years now, and good to see you
again. I have just one question. Is one solution or one method
more sensitive to sovereignty than another or is that not an
issue here, the sovereignty of the tribe? Is one method or one
solution of handling this situation more or less sensitive to
the sovereignty of the Navajo Nation?
Mr. Swimmer. I would not see it as more or less related to
the sovereignty issue. I like the idea of the Navajo Nation, as
a sovereign government, having the responsibility to make the
investment and then work with the people on the Extension to
ensure that the benefit that they are entitled to is provided
to them.
As the Navajo Nation government, they are responsible for
seeing that this happens. I don't see that the Federal
government, particularly the Department of the Interior, should
step into the middle of that and say, ``Wait a minute, Navajo
Nation. We don't trust you. We don't think you are capable of
ensuring that your people, your folks up there in this area
that are entitled to this benefit are going to get it.''
I don't like that. I think that the Navajo Nation is
clearly capable and should be responsible for ensuring that the
folks there get the benefit that was intended by Congress in
1933, that 37 and a half percent of these royalties be used for
the benefit of the people living in that area.
Mr. Kildee. Thank you very much. Thank you, Mr. Chairman.
The Chairman. Thank you. Let me just reiterate a point that
Mr. Matheson brought up and that is the request made for an
expedited solicitor opinion on the right of the State of Utah
to unilaterally end its management of the Utah Navajo Trust
Fund. If I could just reiterate and emphasize our desire for
that report.
Mr. Swimmer. I will ask for that. That is not something
they perhaps would normally do because it is not an Interior
matter, but I will certainly ask for an opinion on how they
view a state's responsibility given that the act gave them this
responsibility and they accepted it in 1933.
The Chairman. Thank you.
Mr. Swimmer. Thank you.
The Chairman. Any further questions?
[No response.]
The Chairman. Thank you for your time this morning. We
appreciate it.
On Panel 2, we have Ms. Tani Pack Downing, Deputy Chief of
Staff and General Counsel of the Office of the Governor, State
of Utah, Salt Lake City; and The Honorable Joe Shirley,
President, Navajo Nation, Window Rock, Arizona. We welcome you
both to the Committee this morning. We do have your prepared
testimonies and it will be made part of the record as if
actually read. You may proceed as you desire.
The Chairman. Ms. Downing, you want to start?
STATEMENT OF TANI PACK DOWNING, DEPUTY CHIEF OF STAFF AND
GENERAL COUNSEL, OFFICE OF THE GOVERNOR, STATE OF UTAH, SALT
LAKE CITY, UTAH
Ms. Downing. Sure. Thank you. Good morning, Mr. Chair,
members of the Committee and staff. My name is Tani Pack
Downing. I am Deputy Chief of Staff and General Counsel for
Governor Huntsman in Utah.
Governor Huntsman sends his regrets that he was unable to
come in person to thank you for holding this hearing in
response to the State of Utah's request to be removed as the
trustee over a portion of the oil and gas royalties from the
Utah area of the Navajo Reservation.
Last year, Governor Huntsman and legislative leadership met
to discuss whether the state should petition Congress to
designate a new trustee. They took into account the fact that:
1] The State of Utah, to our understanding, is the only
state administering a fund like this as management of Indian
resources is typically a Federal responsibility.
2] They considered the fact that there has been 40-plus
years of nearly continuous litigation with four lawsuits by the
Utah Navajos over the state administration of the trust fund,
the cost of which has been born by the Utah citizens as a
whole, and to what benefit?
3] During that same 40-plus years, the Utah Navajo have
repeatedly requested they be given increased control over
expenditures of the fund.
4] Utah Navajos have most recently repeatedly asked the
Governor to appoint a Navajo beneficiary as a member of the
Board of Trustees, which, in the state's opinion, increases the
risk of another lawsuit.
5] The Utah Navajo are valued citizens of the state and the
litigious environment surrounding the state's administration of
this fund harms the relationship between the state and the Utah
Navajo and complicates the parties' ability to meet their
needs.
6] We believe there are several Navajo-related entities
that are equipped to find a more effective way to administer
the fund and determine its best use.
In light of these considerations, the Governor and
legislative leadership decided not to reauthorize the
legislation governing the Navajo Trust Fund and to allow the
legislation to sunset. This decision was discussed with the
Utah Navajo on many occasions and I have provided a chronology
of contacts with my written testimony.
The decision was also discussed with the Navajo Nation. In
place of the Navajo Trust Fund, Congressman Matheson had asked
what is going to happen after July 1? The legislation that
allowed the state to sunset the trust fund created a holding
fund called the Utah Navajo Royalty Holding Fund.
Effective July 1 of this year, the financial and real
property assets of the Navajo Trust Fund will be transferred
into that holding fund, as well as future royalties, and that
will continue until Congress designates a new trustee. Just as
an aside, at the Navajo Trust Fund Board's final meeting, which
will be next Monday, the board and auditor will adopt a list of
assets and liabilities of the Navajo Trust Fund and those will
be posted online.
I want to talk a little bit about what the holding fund
will do. First, it will be managed through a management team
that is led by the executive director of the Utah Department of
Administrative Services. The holding fund will continue to make
expenditures to complete work on all projects that were
obligated by the Navajo Trust Fund prior to May 5 of this year.
The holding fund will continue to pay for educational
scholarships for Utah Navajo through 2010. The holding fund
will also continue to make expenditures to protect the assets
of the fund, such as building maintenance on some of the fixed
assets, and also to protect and receive interest on the income
of the holding fund. However, no new projects will be
authorized through the holding fund.
In conclusion, the State of Utah requests that Congress as
soon as possible designate a new entity to succeed the state as
trustee over the royalty funds after input from the Navajo. The
state has no preference regarding which entity should be the
new trustee.
However, the state strongly requests that since 100 percent
of the oil and gas royalties come from Navajo Reservation lands
located in Utah that at least the 37 and a half percent of
those royalties continue to be expended by the new trustee for
the benefit of the Utah Navajo.
I would like to thank you for the opportunity to provide
input on behalf of the State of Utah, and I can answer any
questions.
[The prepared statement of Ms. Downing follows:]
Statement of Tani Pack Downing, General Counsel and
Deputy Chief of Staff to Governor Jon M. Huntsman, State of Utah
Mr. Chairman and members of the Committee, my name is Tani Pack
Downing and I serve as the General Counsel and Deputy Chief of Staff to
Governor Jon M. Huntsman of the State of Utah. I am here today to
discuss the decisions made recently by the State concerning what is
known as the Utah Navajo Trust Fund.
The State of Utah, through a federal statute passed in 1933 which
enlarged the Navajo Reservation, was assigned responsibility to manage
a percentage of oil and gas royalties produced on the Utah portion of
the Navajo Reservation for the health and welfare of the Navajo
residents residing on the newly created part of the reservation. The
land was previously federal land located within San Juan County Utah,
and as such, 37-1/2% of any oil and gas royalties produced on the land
would have been transferred to Utah.
In 1968, Congress amended the 1933 Act to redefine the beneficiary
class as ``Navajos residing in San Juan County'' and to expand the
purposes of the fund ``for the health, education, and general welfare
of the Navajos.'' Importantly, the 1968 Amendment also defined Utah's
accounting responsibility as being limited to ``[a]n annual report...to
the Secretary of the Interior...for the information of said
beneficiaries.''
The State of Utah is the only state in the Nation administering a
Fund like this, as management of Indian resources is typically a
federal responsibility. The current net assets of the Fund are
approximately $25 million.
The Utah Navajo Trust Fund has been the subject of numerous
lawsuits over the 75 years since its creation. Each lawsuit has
challenged Utah's management of the royalty fund and has requested an
accounting. The 1961 case of Sakezzi v. Utah Indian Affairs Commission
concluded that the 1933 Act created a fiduciary trust with Utah as the
trustee. In the 1970s, the case of Jim v. State of Utah ordered an
accounting. In the 1980s, the court in the case of Bigman v. State of
Utah again ordered an accounting. The state is currently litigating the
case of Pelt v. State of Utah which alleges mismanagement of the Fund.
This case is currently awaiting a decision from the 10th Circuit Court
of Appeals on procedural matters.
Since 1992, the state has managed the Fund though a three-person
Board of Trustees which oversees a trust administrator and staff. This
management team is advised by a committee of Navajo residents from each
of the eight relevant chapters, known as the Dineh Committee. The Board
sets the annual operating and capital budgets, and approves
expenditures for housing, water, powerline projects, equipment
purchases, building construction and maintenance, supplemental
education assistance, and the like. Annual expenditures, outside of
capital expense, average about $2 million per year. In addition to this
amount, the state made the decision some years ago to invest a portion
of the state severance tax from production of oil and gas on the
reservation back into the area. Today, the Navajo Revitalization Fund,
a more traditional state-government expenditure program, provides about
$2 million per year for various capital improvement programs on the
Navajo Nation lands.
Over the years, the Navajo residents of San Juan County have asked
the State for more representation in the decisions concerning
expenditures from the Fund. In response, the State tried to find a
Navajo who met the State requirements to sit on the Board of Trustees.
Unfortunately, court mandated fiduciary requirements for management of
a trust do not allow beneficiaries of the trust to make such decisions,
so it proved impossible to find a Navajo who qualified.
In light of the desire of the Utah Navajo residents to have more of
a role in management of the Fund, and in light of the history of nearly
continuous litigation, the state determined it was best not to continue
in the role as trustee. The state decided to resign as trustee and
allow another entity to take over those duties. Because the duty to
manage the Fund was given to the state by Congress, only Congress may
determine an alternative. This decision was discussed with the Navajo
residents of San Juan County on many occasions (see attached list of
meetings). In the interim, however, the state has made the decision to
wind down active management of the Fund, and to simply protect the Fund
and other assets until a successor is determined.
Utah has a general policy of legislative provisions which sunset
various state agencies on a periodic basis, unless specifically
reauthorized. The Utah Navajo Trust Fund is one of those agencies, and
was set to be reviewed in the 2008 General Session of the Legislature.
Rather than continue the existing Board of Trustees, the state, through
legislation, established the Utah Navajo Royalty Holding Fund and
associated management provisions. This Holding Fund will take effect
July 1 of this year, and will contain all the financial and real
property assets owned by the former Utah Navajo Trust Fund. The Trust
Fund will cease to exist as a management entity. (See resolution at
http://le.utah.gov/2008/bills/hbillenr/hb0352.pdf and legislation at
http://le.utah.gov/2008/bills/hbillenr/hcr004.pdf )
The Holding Fund will continue to make expenditures to protect the
assets of the Fund such as building maintenance and efforts to protect
the income of the Fund. The management team, now headed by the
Executive Director of the Utah Department of Administrative Services,
will work to complete all projects approved before May 5, 2008, such as
housing projects, and will continue to fund the supplemental education
costs for eligible Navajo students in a postsecondary education
program. However, no new projects may be authorized. The Holding Fund
will continue until Congress appoints a new management entity, and
instructs the state concerning disposition of the assets within the
Holding Fund.
The State of Utah has no preference for a successor management
entity, other than a desire to see that the royalties continue to flow
to the benefit of the Navajo residents of San Juan County. The State
has also encouraged the Navajo residents to participate in the process
of determining a new trustee to manage the funds.
______
Timeline of Contacts with
Representatives of Utah Navajos and Navajo Nation
Re: State of Utah Resigning from Navajo Trust Fund
For additional documentation contact Tani Downing at [email protected]
November 1, 2007--Gayle McKeachnie, representative of the
Governor's Office, traveled to Aneth and met with the Navajo Utah
Commission (NUC) to discuss the State's decision to resign from the
Trust Fund. Members of the NUC were present at the meeting, including
Kenneth Maryboy, Katherine Benally, and Charles Long, Assistant to the
Speaker of the Navajo Nation.
Concurrently with the delivery of the information to the NUC, the
State Lt. Governor Gary Herbert spoke with President Shirley of the
Navajo Nation by phone about the State's decision to resign from the
Trust Fund.
November 5, 2007--The idea of the State's desire to ask Congress to
find a new trustee was discussed just after a meeting of the Navajo
Revitalization Fund (NRF). The NRF meeting was held at Goulding's
Lodge, and members of Oljato Chapter came to ask questions.
November 6, 2007--Navajo Nation Council Speaker issues press
release acknowledging that representatives of the Governor's office
delivered the ``exciting news'' in person on November 1, that the State
of Utah wishes to remove themselves as the trustee of the Navajo Trust
Fund.
November 8, 2007--Navajo Trust Fund Board of Trustees Meeting,
Mexican Water Chapter. Trustee, John Reidhead provided information
regarding the State's decision to sunset the trust and ask Congress to
designate a new trustee.
November 13, 2007--The Governor and Legislative leadership issues a
joint press release about allowing the NTF to sunset and asking
Congress to create a new disbursement system for the royalties.
November 15-16, 2007--A joint meeting of the Dineh Committee and
the Navajo Utah Commission was held in the Salt Lake City area. John
Reidhead, Navajo Trust Fund Board member and John Harja, representative
of the Governor's office, attended. John Harja answered questions from
members of the Dineh Committee, NUC and Chapter (Aneth) presidents and
other officials for three hours.
November 16, 2007--Members of the Dineh Committee traveled to Salt
Lake City to discuss the issue of the State's decision to resign as
trustee. Those involved in the meeting included Gayle McKeachnie,
Amanda Smith, and John Harja representing the Governor's office,
Patricia Owen and John Cannon representing staff to the Utah
Legislature, and a representative from Congressman Matheson's office.
Clarence Rockwell and representatives from all the Chapters were
present. They had requested the meeting to hear reasons behind the
current action, future plans, and to hear the instructions necessary to
execute the shut down as well as provide comments.
November 16, 2007--Leonard Lee, Chair of the Dineh Committee, sent
a letter to the Governor, Lt. Governor and the Legislature in which he
states ``The Utah Navajos support the Transition Legislation that is
being drafted at this time and requests for additional provisions to be
implemented.'' The bill that ultimately passed the Legislature included
one of the two provisions requested.
November 18, 2007--Oljato Chapter Resolution. Regarding their
desire to give input about the transition plan for the Trust Fund and
selection of another trustee.
November 20, 2007--Gayle McKeachnie, Amanda Smith and Tani Pack
Downing, representing the Governor's office, traveled to Window Rock.
They had conversations there about the State's decision to resign from
the trust with Clarence Rockwell and sat in on break out sessions where
representatives of the Chapters voiced concerns about the State's role
in the trust.
November 27, 2007--The Native American Legislative Liaison
Committee heard testimony from Tony Dayish, Leonard Lee, and Marie
Holiday regarding the sunsetting of the current structure of the Navajo
Trust Fund.
November 30, 2007--John Cannon, legislative staff, by email
informed NUC/Clarence Rockwell that Representative David Clark would be
the sponsor of the legislation.
December 2, 2007--Representatives of the Oljato Chapter sent a
letter to the Governor requesting he provide information on the State's
decision to resign as trustee. The Governor's General Counsel, Tani
Pack Downing, responded to the Oljato representatives in a letter dated
December 13, 2007 which outlined other contacts made to the Utah
Navajos regarding this issue and encouraging the Utah Navajos to
quickly contact the federal Congressional delegation members and work
with them to get the federal law changed to reflect the trust
management and disbursement mechanism preferred by the Utah Navajo, and
to provide input to their state legislative representatives,
Representative Brad King and Senator Dmitrich concerning any issues
that the Legislature should address during the transition period
beginning January 21, 2008.
December 7, 2007--Navajo Trust Fund Board of Trustees meeting by
teleconference between Blanding and Salt Lake City. Discussion
regarding the sunset of the trust fund and new entity taking over.
December 10, 2007--Utah Dineh Committee Special Meeting, Red Mesa
Chapter. Discussion occurred regarding ceasing of the trust fund.
December 13, 2007--Tani Pack Downing, Governor's Office, sent
letter to James Black, James Adakai, Shirlee Bedonie, Herman Daniels,
Sr., Oljato Chapter Administration, thanking them for their offer of
the Governor to speak at the Oljato Chapter on December 14, but
indicating he would be unable to attend on the short notice. Ms.
Downing explained the contacts made by the Governor's office with Utah
Navajo up to that date on the issue of the State's plan to sunset the
Navajo Trust Fund and asking Congress to designate a new trustee, the
need for the Navajo to play a role in that determination, and
recommending the Navajo give input to their Congressional
representatives and State Legislators.
December 21, 2007--Representative Clark, sponsor of the legislation
to permit Utah to resign as trustee, traveled to Montezuma Creek and
met with Navajo Utah Commission members. In attendance were members
from various chapters and the Dineh Committee, a representative from
President Shirley's office, Andrew Tso, and the Speaker of the Navajo
Legislature. The meeting was chaired by Dennis Filfred, Chairman of
NUC. There were at least 5 NUC commission members at the table. The
Chairman of the Dineh Committee, Leonard Lee attended the meeting, and
at least three other members of the Dineh Committee. Other Chapter
officers also attended from Oljato and Aneth. Tony Dayish,
representative of the NTF also attended. The State's decision to resign
as trustee was discussed. Minutes were kept and a sign up roll was
passed around.
Senator Mike Dmitrich spoke with Kenneth Maryboy and Andrew Tso
about their concerns regarding who would administer the trust fund. Mr.
Tso indicated he would fax Senator Dmitrich a letter from President
Shirley opposing the legislation, but Senator Dmitrich never received
such a letter.
January 11, 2008--Tani Pack Downing, Governor's office, responded
to Clarence Rockwell's request for information on the status of the NTF
legislation. She sent Clarence an email giving him the name of the
legislative attorney drafting the legislation, her email address and
telephone number, and told Clarence to also discuss the legislation
with the sponsor of the bill, Representative David Clark or with the
legislative representatives for the area, Senator Dmitrich and
Representative King.
January 11, 2008--Navajo Trust Fund Board of Trustees Meeting,
Teecnospos Chapter. Discussion occurred regarding sunset of the trust
fund and new trustee. Leonard Lee reported that the Dineh Committee had
attended several meetings on this issue at the Navajo Utah Commission
Board meetings and has made presentations at the Oljato and Navajo
Mountain Chapters. He said they will continue to work on these issues
and the federal legislation. Lynn Stevens reported that a meeting was
held in Montezuma Creek on December 21 with Utah Navajos and
Representative David Clark. He reported Representative Clark had said
he would meet with the BOT individually with their concerns if they
wanted. Tony Dayish, Trust Fund Administrator, reported UNTF has been
involved in numerous meetings regarding the sunset of the trust fund on
Nov. 15, Dec. 10, Dec. 14, Dec. 18, Dec. 21, Jan. 9 and Jan. 10.
January 14, 2008--John Cannon, legislative staff, by email provided
to NUC/Clarence Rockwell a copy of the bill, resolution, and a summary
of the legislation. Clarence followed up with a telephone call to
Patricia Owen, legislative staff, regarding questions he had about the
language in the bill or resolution.
January 23, 2008--John Cannon, legislative staff, received an email
from Andrew Tso raising concerns about the language in the legislation
which led to the resolution being changed to remove a reference to the
Paiute Strip.
January 24-25, 2008--The Dineh Committee and the NUC held a meeting
in Cortez, Colorado where it was discussed how to respond and put
together a new group to manage the trust. Tony Dayish, Administrator of
the NTF was in attendance and gave input to the group and listened to
their concerns.
January 25, 2008--A representative from the Blue Mountain Dineh
contacted the State asking where to get information about the bill and
resolution. He was advised that the best place to get information or
provide input at this point would be to contact his State legislators,
Representative King and Senator Dmitrich whose information can be found
at www.utah.gov.
January 29, 2008--The final bill and resolutions were posted on the
website for the public. See the following web links for a whole history
on the bill and resolution as well as links to the actual language.
HCR 4--Concurrent Resolution Encouraging Congressional Action
to Designate a New Recipient Of Royalties From Navajo
Reservation Lands in Utah http://le.utah.gov/2008/htmdoc/
hbillhtm/HCR004.htm
HB 352--Amendments Related to Monies Derived from Navajo Nation
Reservation Lands in Utah http://le.utah.gov/2008/htmdoc/
hbillhtm/HB0352.
htm
January 30, 2008--During the American Indian Caucus Day legislative
staff assisted Clarence Rockwell in the distribution of legislative
recommendations and spoke with Tony Dayish regarding comments and
possible changes to the legislation. Tony indicated that he had
received comments about the legislation, but was reviewing them because
many appeared confused about what the legislation did and he wanted to
consolidate them. We encouraged him to provide us the information as
soon as possible, but we did not receive any further information.
During the session Representative Clark received at least one fax
from the NUC.
February 4, 2008--The issue was discussed briefly again at the
meeting of the NRF, with Leonard Lee and Katherine Benally present.
February 5, 2008--Tony Dayish was asked to attend a meeting with
Kenneth Maryboy, Mark Maryboy, Davis Filfred, Leonard Lee, Earl Lee,
Clarence Rockwell, Robert Billie Whitehorse and other officials of the
Aneth Chapter. Tony heard their concerns and discussed options for them
to consider for a new trustee.
February 8, 2008--Navajo Trust Fund Board of Trustees Meeting, Salt
Lake City and Blanding Teleconference. Ed Tapaha reported that the
Dineh Committee had been discussing options for a new trustee and
making plans for next step.
February 12, 2008--Bill and resolution discussed in the House
Government Operations Committee--public notice of the meeting and the
agenda was posted on the Legislature's website at http://le.utah.gov/
asp/interim/Commit.asp?Year=2008&
Com=HSTGOC.
February 15, 2008--Utah Dineh Committee Special Meeting, City of
Cortez Council Chambers. Reports included review of NRF Legislation
that includes the UNTF transition and new trustee proposed legislation.
February 22, 2008--Utah Dineh Committee Meeting, Mexican Water
Chapter House. Reports regarding H.B. 352 NRF Legislation Revisions
Update and new trustee federal legislation update given and discussion
had.
February 22, 2008--Bill and resolution discussed in the Senate
Government Operations and Subdivisions Committee--public notice of the
meeting and the agenda (See Attachment 17, agenda) was posted on the
Legislature's website at http://le.utah.gov/asp/interim/Commit.asp/
Year=2008&Com=SSTGOP
At least one Navajo attended and testified in the Senate Standing
Committee.
February 28, 2008--Navajo Trust Fund Board of Trustees Special
Meeting, Teleconference between Blanding and Salt Lake City. Update
given on the status of H.B. 352 which provided for the transition of
the trust fund until a new trustee is determined by Congress.
March 5, 2008--Clarence Rockwell called John Cannon, legislative
staff, indicating that in tracking HB 352 he saw that the bill was
recalled. John informed him that there was a technical problem that
needed to be resolved.
Before the Utah Legislative Session ended, Senator Dmitrich spoke
on the telephone twice with Mr. Maryboy and twice with Andrew Tso to
his recollection regarding the sunset of the NTF legislation and other
related issues.
Throughout this time period, Gayle McKeachnie, Governor's office,
spoke on the phone several times with Clarence Rockwell and Kenneth
Maryboy and met with Kenneth Maryboy once or twice at the State
Capitol. The main topics of conversation were:
Whether the Governor would come to Monument Valley and
meet about what was going to happen?
Would the state consider a two-year extension before
sunset of the trust fund?
Who could they talk to about what was going to be in the
state's legislation to sunset the trust fund and transition to a new
trustee?
Mr. McKeachnie referred them to Senator Dmitrich and Representative
King, their state legislative representatives, and to legislative
staff. In addition, Mr. McKeachnie referred them to Congressman
Matheson's office to discuss Congress designating a new trustee.
March 21, 2008--Navajo Trust Fund Board of Trustees meeting
minutes, Red Mesa Chapter House, reports that the Governor has signed
H.B. 352.
March 28, 2008--Utah Dineh Committee agenda, Montezuma Creek,
update given on HB 352 to committee members.
April 25, 2008--Utah Dineh Committee agenda, Aneth Chapter House,
report on fixed assets and projects audit as required by HB 352.
______
Mr. Boren President Shirley?
STATEMENT OF THE HONORABLE JOE SHIRLEY, PRESIDENT, NAVAJO
NATION, WINDOW ROCK, ARIZONA
Mr. Shirley. Chairman Rahall, Congressman Matheson, members
of the Committee, good morning. Ya'at'eeh from Navajo land. It
is always an honor to be invited to share with you a few
thoughts from the heart on behalf of my people. I am Dr. Joe
Shirley, Jr., President of Navajo Nation. I wanted to share a
few thoughts with you about what is on the table this morning.
The written testimony has been submitted to you, gentleman, and
Committee members, so you have that.
I am here to reiterate some of what is in there on behalf
of the Navajo Nation and which is basically to share with you
the Navajo Nation's official position gotten through the
Intergovernmental Relations Committee of the Navajo Nation
Council, and I am here as President to expand on that and to
reinforce that, and that is to have the Navajo Nation be
designated as trustee for these trust funds on behalf of the
Navajos living in the State of Utah and for which the 37 and a
half percent is set aside on an annual basis.
I believe that the Navajo Nation governmental structure is
set up in such a way to where we are in a position to
administer these funds on behalf of the Utah Navajos. We have
been administering our own Navajo Nation funds, some of which
has been shared with the Navajos living in the State of Utah.
We also get Federal funds and state funds which were
administered through the Navajo Nation government.
So I feel like the Navajo Nation government as it is set up
is very competent. The governmental structure is in place to
administer these trust funds on behalf of all Navajos living in
the San Juan County of the State of Utah. Certainly, we need to
do right by all of the Navajo Nation constituents living in
Utah.
I believe, again, like I said, the Navajo Nation
government, working with the leadership of the San Juan County
Navajos, we can make that happen. I do want to see as the
government goes toward the designation of a new trustee that
the Navajo Nation leadership needs to be at the table full-
time.
We need to have a hand in all of this. Like Mr. Swimmer has
pointed out, we consider ourselves a sovereign nation. We are a
sovereign nation. I believe the U.S. Government has laws, you
know, in place to acquiesce in our self-determination. It is
that law by which I make the request on behalf of the Navajo
Nation to be designated as the trustee for these trust funds.
As far as the prudent investment of these funds so that the
funds can grow on behalf of the Utah Navajos, we have, like I
said, an Investment Committee in place, working with the Budget
and the Finance Committee arm of the Navajo Nation Council. We
have our own trust funds that we are administering, making it
to grow, and we have been very successful with that.
I don't see us doing any different with these trust funds
if it were to be put in our trust. I do like to see, also, the
dispute that has arisen over some of the mismanagement and the
misappropriation by the State of Utah, I would like to see that
gotten behind us before we move forward toward the new
designation of a trustee.
Like Mr. Swimmer has alluded, we would like to start with a
clean slate, and I agree with that position. Last, I am very
interested in what the U.S. Solicitor would have to say about
the State of Utah letting go of its trust responsibility for
these funds on behalf of the Utah Navajos.
So having said that, Mr. Chairman, members of the
Committee, I am here for also to answer questions. Thank you
very much.
Mr. Boren. [Presiding.] Thank you for your testimony.
[The prepared statement of Mr. Shirley follows:]
Statement of The Honorable Joe Shirley, Jr.,
President, The Navajo Nation
Good Morning Chairman Rahall, Honorable Members of the Committee.
My name is Joe Shirley, Jr., President of the Navajo Nation. The Navajo
Nation is a sovereign Native Nation located in the southwestern United
States with territory in the States of New Mexico, Arizona and Utah.
Numerous Executive Orders, Acts of Congress and Treaties have
guaranteed the rights of the Navajo People to the surface use, and the
subsurface mineral resources, of much of our traditional lands.
Self-Determination and the Trust Responsibility of the Federal
Government
Over the last forty years, the federal government has made a
significant shift in its policy toward the Native Nations. The federal
government's shift from a policy of paternalism, assimilation and
termination, to a policy that respects the sovereignty of Native
peoples, and promotes tribal self-determination on matters relating to
internal and local affairs. It is essential to the sovereignty and
self-determination of the Navajo Nation that our government maintains a
government-to-government relationship with the United States in
deciding matters that concern and affect Navajo lands, resources and
citizens. The Navajo Nation has its own laws that authorize particular
parties and individuals to give testimony to Congress on behalf of the
Navajo Nation, and to negotiate with the federal government over
matters that affect our Nation. As President of the Navajo Nation, I am
honored to appear before this Committee on behalf of the Navajo Nation
and its citizens, and especially on behalf of the Navajo citizens who
are beneficiaries of the Utah Navajo Trust Fund (hereinafter ``UNTF'').
I thank you for your invitation to provide testimony to the Committee
and I am pleased that the Committee plans to consult with the Navajo
Nation regarding future federal legislation affecting the UNTF. I also
trust that the United States Congress will not pass any legislation
that directly affects the lands, resources and citizens of the Navajo
Nation without first obtaining our consent.
Utah Portion of the Navajo Nation and the Utah Navajo Trust Fund
The Utah portion of the Navajo Nation has a complex history of
additions, withdrawals, restorations and exchanges. The United States
added the lands in the Utah Territory that lay south of the San Juan
and Colorado rivers by Executive Order on May 17, 1884. Navajo People
have a historic tie to this area and have continuously occupied this
land since long before the captivity of Navajos in 1864. On November
19, 1892, four years before Utah was awarded statehood, then President
Benjamin Harrison, by executive order, took back those lands in the
Utah portion of the Navajo Nation which lay west of the 110+ parallel
(what is called ``the Paiute Strip''), and placed those lands back in
the public domain. Navajo lands in the Utah Territory which lay east of
the 110+ parallel remained part of the Navajo Nation. On May 15, 1905,
by executive order, President Theodore Roosevelt added the Aneth area
in Utah to the Navajo Nation. In 1908, the Department of the Interior
made an administrative withdrawal of the Paiute Strip from the federal
public domain, designating those lands again for exclusive use by the
Navajo. In 1922, the Department of the Interior again took the Paiute
Strip away from the Navajo, and put the lands back into the public
domain. The Paiute Strip was again withdrawn from the public domain in
1929.
It is important for the Committee to understand that the federal
legislation that created the UNTF was the result of negotiation and
agreement between the Navajo Nation, the State of Utah, and the United
States Government. In 1930 and 1931, the Navajo Tribal Council asked
the Commissioner of Indian Affairs to negotiate on its behalf to
permanently restore the Paiute Strip to the Navajo Nation, based on the
previous set asides of this area by the federal government and on
historic Navajo occupation. On July 7 and 8, 1932, at its annual
meeting in Fort Wingate, the Navajo Nation Council gave its support to
proposed federal legislation which would restore the Paiute Strip to
the Navajo Nation and to add lands to the Aneth area of the Nation,
between Montezuma Creek and the Colorado border (what is referred to as
the Aneth Extension).
After Utah citizens voiced opposition to the proposed addition of
the Aneth Extension and the Paiute Strip to the Navajo Nation, the
Commissioner of Indian Affairs negotiated on behalf of the Navajo
Nation with a Utah committee made up of San Juan County representatives
to satisfy their concerns. In order to gain the Utah committees'
support for the 1933 Act, the Commissioner of Indian Affairs made
several concessions to the Utah committee. These concessions included
prohibitions on further Native American homesteads or allotments in San
Juan County, fencing of Native allotments outside the new Navajo Nation
boundaries, fencing of the Aneth Extension's northern boundary, and
agreement that state game laws would apply to Navajos hunting outside
the Nation's boundaries. The proposed legislation also included an
unusual provision that in the event oil and gas was discovered in the
Aneth Extension and the Paiute Strip, instead of all net oil and gas
royalties going to the federal government to administer on behalf of
Navajo citizens, 37 1/2 % of those royalties would instead go to the
State of Utah to be administered for ``the tuition of Indian children
in white schools and/or in the building of roads across [the newly
added lands], or for the benefit of the Indians residing therein.'' A
final concession to Utah in the proposed legislation provided that Utah
could exchange any state school trust lands inside the Aneth Extension
and the Paiute Strip for equivalent federal lands, and that any fees or
commissions for the exchange would be waived. The federal government
enacted the legislation Congress in 1933, as Pub. L. No. 403, 47 Stat.
1418 (1933) (``1933 Act'').
In 1958, by Act of Congress, the Navajo Nation was further expanded
within San Juan County. Under the 1958 Act, the Navajo Nation and the
United States government exchanged Navajo Nation lands at Glen Canyon
Dam and Page, Arizona for federal lands northwest of and adjacent to
the Aneth Extension, including the McCracken Mesa area. In 1949 and
1998, with the Navajo Nation as party to the negotiations, state school
trust lands within the Navajo Nation were made Navajo Trust Lands in
exchange for other federal lands given to Utah. Currently, negotiations
are under way to exchange school trust lands in the Aneth Extension
with other federal lands under authority of the 1933 Act.
In 1968, Congress amended the 1933 Act, redefined the purposes of
the UNTF, and expanded its class of beneficiaries to include all
Navajos in San Juan County. The amended legislation provided that trust
monies can be used ``for the health, education and general welfare of
the Navajo's residing in San Juan County.'' The 1968 Amendments also
provided that trust funds could be used for projects off the Navajo
Nation provided that the ``benefits'' were proportional to the
expenditures from the trust. This vague term ``proportional'' provided
one of the main vehicles for mismanagement of the trust monies,
discussed below.
Potential Breach of Fiduciary Duty Concerning the UNTF
There is substantial evidence that the State of Utah has not
fulfilled its fiduciary duties under the 1933 Act. In a 1991 report,
Legislative Auditor General for the State of Utah raised serious
allegations of mismanagement and misappropriation of trust funds by the
State of Utah and other entities that were entrusted with UNTF monies.
The State of Utah has yet to make a full accounting of the UNTF, and is
in ongoing litigation with the beneficiaries concerning these issues.
Now, the State of Utah has declared its desire to withdraw as trustee
of the UNTF. The State of Utah passed legislation this year that will
effectively freeze most disbursements from the UNTF, end the trust fund
administration, and move the trust assets to a new fund pending
selection of a new trustee. The Utah legislation specifically calls on
Congress to appoint a new trustee for the UNTF. In the meantime, Navajo
Nation will no longer have a role in the planning of expenditures from
the UNTF, as is mandated under the 1933 Act.
The Navajo Nation remains concerned over the potential for abuse of
trust by a new trustee. For example, recently, the current UNTF
Administrator along with members of the Dineh Committee, a now defunct
State of Utah advisory committee to the UNTF, used UNTF monies to pay
their travel expenses to Washington D.C., where they lobbied Congress
on legislation for a preferred new trustee and system for management of
the royalty funds. Neither the State of Utah nor the UNTF Board of
Trustees authorized these travel and advocacy expenditures. The
Governor of the State of Utah has chastised these individuals for
engaging in personal political activities using UNTF monies, and for
professing that they represent Utah in an official capacity. Although
the Governor has promised to repay these monies to the trust fund, the
incident highlights the importance of carefully choosing an appropriate
new trustee, and drafting fair and legitimate trust terms through a
lawful process.
The Navajo Nation is very concerned that there is a rush to
designate a new trustee, especially where that trustee may be an alter
ego of an entity or individuals who have been involved in mismanagement
and misappropriation of trust monies in the past. The trust must be
grown and managed successfully not only to pay for needed expenditures
in the short term, but for the benefit of future generations of Navajos
in San Juan County as well. The trust should be administered in a
manner to ensure its survival in perpetuity, and so that trust fund
monies shall continue to be available to San Juan County Navajos long
after Navajo Nation oil and gas resources in Utah have been depleted.
In other words, the trust fund should be managed in a way that ensures
long-term viability of the fund and not merely a funding source for
short term disbursements.
Selection of a New Trustee
The Navajo Nation believes that, consistent with federal policy,
the Navajo Nation should be the new trustee of the UNTF. The UNTF is
capitalized by royalties generated from Navajo Nation oil and gas
leases on Navajo Nation Trust Lands for the benefit of Navajo Nation
citizens. In 1933, when the UNTF was created, the Navajo Nation tribal
government was only 10 years old. Today, the Navajo Nation is the
largest and most sophisticated Native American government, with a
substantial body of statutory and decisional law that complements the
fundamental law of our People. The Navajo Nation has a proven record of
acting as a trustee. Currently, the Navajo Nation manages, and has
successfully increased, its own trust fund monies through the expert
guidance of its Investment Committee and outside consultants. The
Navajo Nation has a well-developed annual comprehensive budgeting
process for appropriation of all Navajo Nation funds, which should be
followed in utilization of all Navajo Nation generated funds, including
the proceeds from the UNTF. Importantly to this Committee, designating
the Navajo Nation as trustee of the UNTF is the only position
consistent with the policy established by the United States Congress to
recognize the sovereignty of the Navajo Nation and the right of the
Navajo Nation to self-determination in matters which concern the
Nation's lands, resources and citizens.
Appropriate Consultation and Development of Legislation Regarding UNTF
Like any government, the Navajo Nation has many elected officials
at various levels of government, all of whom have individual agendas
that may or may not coincide with the broader goals and policies of the
Navajo Nation. As I explained above, the Navajo Nation has its own law
that governs who may speak on behalf of the Navajo Nation as
representatives of our People. Under Navajo Nation law, the Navajo
Nation Council is ``the governing body of the Navajo Nation.'' 2 N.N.C.
Sec. 102 (A). ``All powers not delegated are reserved to the Navajo
Nation Council.'' 2 N.N.C. Sec. 102 (B). The Navajo Nation
Intergovernmental Relations Committee (IGRC) has been delegated by the
Navajo Nation Council all powers necessary and proper ``[t]o ensure the
presence and voice of the Navajo Nation.'' 2 N.N.C. Sec. 822(B); 2
N.N.C. Sec. 824(A). The IGRC has many specific powers in the area of
intergovernmental relations, see 2 N.N.C. Sec. 824, and has been
specifically delegated the authority to ``[t]o assist and coordinate
all requests for information, appearances and testimony relating
to...federal legislation impacting the Navajo Nation.'' 2 N.N.C.
Sec. 824(B) (emphasis added). Importantly, the IGRC must coordinate
``all Navajo appearances and testimony before Congressional
committees.'' Id. (emphasis added). It is essential that the Navajo
Nation speak with one voice in its government-to-government
relationship with the United States. Any requests for official
testimony that represents the position of the Navajo Nation government
by any federal body by Navajo Nation officials which are not
coordinated through the IGRC, or other designee of the IGRC, or the
Council are contrary to Navajo Nation law, and an affront to Navajo
Nation sovereignty and self-determination in its own political affairs.
The Navajo Nation has an official position and legally delegated
representatives who are authorized to provide testimony in regard to
the UNTF. On May 19, 2008, the IGRC passed a Resolution ``Relating to
Intergovernmental Relations; Approving the 2008 Position Statement of
the Navajo Nation on the Future of the UNTF.'' IGRMY-107-08 (See
Attached). In addition to adopting an official position of the Navajo
Nation in regard to key terms for future federal legislation affecting
the UNTF, see Exhibit A (attached), the Resolution authorizes only the
President of the Navajo Nation, the Speaker of the Navajo Nation, the
Navajo Utah Commission, and their designees to advocate with the United
States Congress in regard to the future of the UNTF. IGRMY-107-08.
These are the only individuals and entities with authority under Navajo
Nation law to represent the Navajo Nation and its citizens in any
official capacity in this matter. Moreover, that advocacy must be
consistent with the official policy and position of the Navajo Nation
in regard to the UNTF, as outlined in its position statement.
The official position of the Navajo Nation in this matter are the
result of careful research, analysis and compromise between the varied
interests of current beneficiaries, and represent what the Nation
believes is the fairest outcome for all Navajo beneficiaries involved
and the best means to avoid the mismanagement and misappropriation of
trust funds that have occurred in the past.
In addition to myself, in my capacity as the President of the
Navajo Nation, the Speaker of the Navajo Nation Council, and the Navajo
Utah Commission, the only other Navajo Nation entities that are
designated to represent the Navajo Nation on this matter are the Navajo
Nation Washington Office and the Navajo Utah Commission. The Navajo
Nation Washington Office is an agency of the executive branch
established by the Navajo Nation Council to function as our federal
intergovernmental relations office. Under Navajo Nation law, the
Washington Office is an extension of the Navajo Nation government,
represents the Nation to the United States Congress and federal
agencies, and reports back to the Council through the President's
office. One of the central purposes of the Washington Office is to help
ensure Navajo Nation sovereignty by emphasizing and maintaining a
government-to-government relationship with the United States. In the
matter of the UNTF, the Washington Office has the express delegated
authority as my designee to advocate on behalf of the Navajo Nation in
regard to the UNTF.
Likewise, the Navajo Utah Commission is an official advocate for
the Navajo Nation in this matter under oversight of the
Intergovernmental Relations Committee. The Navajo Utah Commission has
been delegated this authority because of its considerable expertise in
the issues which are central to future management of the trust as well
as providing local representation of the Navajo beneficiaries.
Conclusion
Chairman Rahall, Honorable Members of the Committee, on behalf of
the Navajo Nation, I wish to express my deep appreciation for this
opportunity to provide testimony to the Committee on Natural Resources.
The Navajo Nation looks forward to working with the Committee on a
government-to-government relationship as we move forward with this
important legislation concerning the future of the Utah Navajo Trust
Fund.
Thank you.
______
2008 Position Statement of the Navajo Nation
on the Future of the Utah Navajo Trust Fund
History of Utah Navajo Trust Fund.
Executive Order of May 17, 1884, ``withheld from sale and
settlement and set apart as a reservation for Indian purposes'' land in
the Utah Territory that lay south of the San Juan and Colorado rivers.
This land has been historically and continuously occupied by Navajo
people since long before the captivity of Navajos in 1864. Four years
before Utah was awarded statehood, Executive Order of November 19,
1892, put Navajo lands in the Utah Territory west of the 110+ parallel
(``the Paiute Strip'') back in the public domain. Lands in the Utah
Territory east of the 110+ parallel remained part of the Navajo
Reservation. Executive Order of May 15, 1905, added the Aneth area in
Utah to the Navajo Reservation. In 1908, the Department of the Interior
withdrew the Paiute Strip from the public domain for use of the Navajo.
In 1922, the Department of the Interior again put the Paiute Strip back
into the public domain.
In 1930 and 1931, the Navajo Nation Council asked the Commissioner
of Indian Affairs to negotiate on behalf of Navajo Nation to
permanently restore the Paiute Strip to the Navajo Reservation, based
on the previous set aside in the Executive Order of 1884 and historic
Navajo occupation of the area. On July 7 and 8, 1932, at its annual
meeting in Fort Wingate, the Navajo Tribal Council gave its support to
proposed federal legislation which would restore the Paiute Strip and
add land between Montezuma Creek and the Colorado border to the Aneth
area of the Reservation. This legislation was passed by the United
States Congress in 1933, as Pub. L. No. 403, 47 Stat. 1418 (1933)
(hereafter ``1933 Act'').
The 1933 Act was the result of an agreement between three parties:
the Navajo Nation, the State of Utah, and the United States Government.
After Utah citizens voiced opposition to the proposed addition to the
Navajo Reservation, the Commissioner of Indian Affairs negotiated on
behalf of the Navajo Nation with a Utah committee made up of San Juan
County representatives. Several concessions were made to the Utah
committee in order to gain its support for the 1933 Act, including
prohibitions on further Indian homesteads or Indian allotments in San
Juan County, fencing of Indian allotments outside the new reservation
boundaries, fencing of the Aneth extension's northern boundary, and
agreement that state game laws would apply to off reservation hunting
by Navajos.
The 1933 Act provided that ``should oil or gas be produced in
paying quantities,'' the State of Utah would receive 37 1/2 % of net
oil and gas royalties derived from Navajo Tribal Leases on the newly
added Navajo Trust Lands. In return, the State of Utah would act as
trustee of the funds, and expend the funds ``in the tuition of Indian
children in white schools and/or in the building of roads across [the
newly added lands], or for the benefit of the Indians residing
therein.'' The 1933 Act also provided that Utah could exchange state
school trust lands inside the new Reservation boundaries for equivalent
federal lands and that any fees or commissions for the exchange would
be waived.
In 1968, Congress amended the 1933 Act, redefining the purposes of
the trust and expanding the class of beneficiaries. The amended
legislation provided that the trust be used ``for the health, education
and general welfare of the Navajo Indians residing in San Juan
County.'' The 1968 Amendments also provided that trust funds be used
for projects and facilities in San Juan County that were not of
exclusive benefit to the designated beneficiaries provided that the
benefits to the beneficiaries were in proportion to the amount of trust
funds used for the projects and facilities.
Over the course of the last 75 years, through legislation,
executive acts and other governmental conduct, the State of Utah
accepted its federally appointed role as trustee of the Utah Navajo
Trust Fund (UNTF). During Utah's tenure as trustee, funds from UNTF
have been used to create and/or acquire significant fixed assets on
state lands. These assets include two medical buildings, a government
services building, two housing subdivisions, and fairgrounds.
Substantial evidence exists that Utah failed to properly administer
Utah Navajo Trust Funds over many decades, and Utah has yet to make a
full and complete accounting of its administration and use of trust
funds, as required by law. Utah, as UNTF trustee, has been the
defendant in several lawsuits. In 1991, serious allegations of
mismanagement and misappropriation of trust funds by Utah and other
entities using trust monies were made in a 1991 report by the State of
Utah, Legislative Auditor General. In Pelt v. Utah, the State of Utah
is the defendant in a class action lawsuit brought on behalf of UNTF
beneficiaries over these issues.
In 2007, the State of Utah announced that it wished to resign as
trustee of UNTF. On March 17, 2008, Bills HCR4 and HB352 (``Sunset
Act'') were signed into law. This legislation purports to cause the
resignation of Utah from its role as federally appointed trustee of
UNTF effective June 30, 2008. The Sunset Act provides that from March
17 until May 5, 2008, the UNTF administrator can only commit to new
projects capped at $100,000, and only to projects that will be
completed by January 1, 2010. From May 5 until June 30, the UNTF
administrator cannot commit any monies to new projects. After July 1,
2008, all assets of the trust after liabilities are paid will be placed
in a New Fund created by the Utah Division of Finance. The New Fund
will be managed according to the Utah State Money Management Act. No
disbursements will be made from this fund except to pay for maintenance
of the fixed assets of the expired UNTF and to continue any educational
scholarships awarded through June 30, 2010. The Sunset Act also
provides that the State of Utah shall purchase the fixed assets of the
Navajo Trust Fund, existing as of May 5, 2008, consistent with the
trust obligations of the state in ``arms length'' transactions and
providing ``fair market compensation'' to the trust. Based on
provisions in the Sunset Act and Utah Code 63-55-104 and 63-55-263, the
UNTF Administrator probably can continue to function until January 1,
2010. It is expected that the UNTF will maintain a small staff to
administer existing UNTF projects until they are completed.
The Fiscal Year 2008 budget for UNTF is $3,879,300.00.
Administrative costs are approximately 14.5% of the entire budget at
$551,800.00. $650,000.00 is earmarked for chapter projects. Nearly
$595,000.00 is budgeted for higher education, primarily scholarships.
The remainder of the 2008 budget goes to a variety of specific
projects, as well as providing matching grants for housing
construction.
The Navajo Nation is an Independent Sovereign Nation.
The Navajo Nation is an independent sovereign nation. The Navajo
Nation has the right to self-determination, to freely determine its own
political status and to freely pursue its economic, social and cultural
development. In exercising its right to self-determination, the Navajo
Nation has the right to autonomy and self-government in matters
relating to its internal and local affairs, as well as a right to the
ways and means for financing its autonomous functions.
In 1933, when the Navajo Utah Trust Fund was created, the Navajo
Nation tribal government was only 10 years old. Today, the Navajo
Nation is the largest and most sophisticated American Indian
government. The Navajo Nation has developed a substantial body of both
statutory and decisional law to complement the fundamental laws of the
Dine. The Navajo Nation has a well-developed annual comprehensive
budgeting process for appropriation of all Navajo Nation funds which
should be followed in utilization of all Navajo Nation generated funds,
including the proceeds from the Utah Navajo Trust Fund.
1. New Federal Legislation Affecting the Utah Navajo Trust Fund Should
Be the Result of Government to Government Negotiations Between
Navajo Nation, United States Government, and State of Utah and
Should Require Consent of Navajo Nation.
Federal legislation amending or repealing the 1933 Act and
designating a new trustee for the Utah Navajo Trust Fund should be the
result of good faith government to government negotiations between the
Navajo Nation, the State of Utah, and the United States Government.
Consistent with the Navajo Nation's status as an independent sovereign
nation, any federal legislation that affects royalties generated by
Navajo Nation Trust Lands must be made with the consent of the Navajo
Nation.
2. Beneficiaries Should Remain ``Navajos in San Juan County'' Subject
to Certain Conditions.
The beneficiaries of the Utah Navajo Trust Fund should remain
Navajos in San Juan County, through the Navajo Nation annual budget
process. Provided; that special consideration should be made in the
annual budget process to use Utah Navajo Trust Fund proceeds for the
benefit of Navajos residing within the Aneth Extension for mitigation
of environmental impacts and other negative impacts associated with the
development and production processes of oil and gas resources located
within the Aneth Extension, and for development of needed
infrastructure. Navajos living outside of Navajo Indian Country shall
be eligible for educational assistance from Utah Navajo Trust Fund
proceeds. Capital outlay funding and housing assistance shall not be
provided from Utah Navajo Trust Fund proceeds for projects locating
outside of Navajo Indian Country. Provided; that all existing and
future health facilities funded by Utah Navajo Trust Fund proceeds and
any other facilities funded by Utah Navajo Trust Fund proceeds located
outside of Navajo Indian Country shall continue to be operated for the
benefit of all Navajos.
3. Consultation of Beneficiaries.
Negotiations to designate a new trustee shall be in close
consultation with the existing beneficiaries through the chapters,
keeping the best interests of the beneficiaries in mind at all times.
4. New Federal Legislation for Allocation of Royalties Shall Maintain
the Status Quo.
The beneficiaries of the Utah Navajo Trust shall continue to
receive the benefit of 37 1/2% of all royalties generated by oil and
gas production from leases on Reservation lands added in 1933. 62 1/2%
of all royalties generated by oil and gas production from leases on
Reservation lands added in 1933 shall continue to go to the Navajo
Nation.
5. Disposition of Trust Assets on State Lands.
Negotiations must address UNTF assets on state lands and provide
either for fair market value purchase of the assets by Utah, or for
acquisition of the state lands in question by Navajo Nation. The Sunset
Act provides that the State of Utah Division of Facilities Construction
and Management can purchase UNTF assets on state land. Because
acquisition of state lands by Navajo Nation could implicate a land
exchange involving the federal government, all three governments should
be involved in negotiations to dispose of these assets and/or convey,
exchange, or purchase lands. In addition, negotiations currently under
way to exchange Utah School Trust Lands in the Aneth extension with BLM
lands outside the reservation, pursuant to Section 2 of the 1933 Act,
should be coordinated with the disposition of UNTF assets.
6. Navajo Nation Would Be Best Trustee.
As a sophisticated tribal government, the Navajo Nation has the
resources and expertise to administer the UNTF on behalf of Utah Navajo
beneficiaries. The UNTF is generated by royalties from leases entered
into by the Navajo Nation on Navajo Nation Trust Lands. Trusteeship of
these funds by the Navajo Nation on behalf of the Utah beneficiaries
would be consistent with principles of sovereignty and self-
determination. The Navajo Nation, through management of its own trust
funds, has proved its fiduciary capabilities. The Controller of the
Navajo Nation is the general fiduciary of Navajo Nation funds, and
trust funds should be invested consistent with the recommendations of
the Investment Committee. A Trust Fund Administrator should be
centrally located in San Juan County and trust fund administration
should provide for local decision making in how funds are spent.
7. State of Utah Navajo Trust Fund Administrator Should Remain in
Existence Until It Winds Up Its Affairs.
The UNTF Administrator has the legal authority under Utah law to
continue to administer existing projects until January 1, 2010. The
UNTF Administrator should continue to administer existing projects and
programs to prevent any gaps in existing services until an interim
administrator is designated or a new trustee has been selected.
8. Where Aneth Chapter Suffers Environmental Harms Disproportionate to
Its Receipt of Trust Funds, Special Monies Should Be Allocated
to Aneth Chapter to Mitigate Environmental Impacts and Develop
Needed Infrastructure.
On the Aneth Extension, oil and gas development and production
processes that generate royalties for the UNTF cause environmental and
other negative impacts. The new terms of the trust should ensure that
separate monies are specifically allocated to Aneth Chapter to mitigate
the environmental impacts of oil and gas extraction on the Aneth
Extension. Additionally, infrastructure needs at Aneth Chapter have not
been adequately funded in the past. Future trust administration should
provide sufficient funds to develop needed infrastructure at Aneth
Chapter.
9. Trust Fund Monies Should Not Be Used in Off-Reservation Projects
``Proportional'' to the Benefit Received.
Under the 1968 amendments, UNTF monies were allowed to be used in
off reservation projects if they were allegedly ``proportional'' to
benefits enjoyed by beneficiaries. This provision has been one of the
causes of mismanagement and waste of trust funds. Except for
educational endowments, no trust funds shall be used outside Navajo
Indian Country without at least 50% matching funds provided by other
participating entities.
10. Funds from the Sale of Utah Navajo Trust Fund Administrative
Offices Should be Designated Specifically For New Trust Fund
Administration Facilities.
One of the goals of the Navajo Nation is to provide for centralized
administration of Navajo Nation service providers in the Utah portion
of the Navajo Reservation through a Regional Navajo Nation Office
centrally located in Montezuma Creek. At present, Navajo Nation
services are scattered and not as efficient as they could be in a
centralized space.
The State of Utah generally limits its services to the county seat
in Monticello. A Regional Navajo Nation Office should be a shared
facility for the new UNTF Trust Administrator, Navajo Nation service
providers, and state programs. Along with Navajo Nation and state
funds, UNTF should provide matching funds from the sale of the current
UNTF administrative offices to help fund the construction of a Regional
Office Facility. A Regional Office Facility would improve coordination
of projects involving the UNTF Trust Administrator, Navajo Nation
service providers, and state entities.
11. Full Accounting by State of Utah.
The State of Utah should provide a full and complete historical
accounting of the Utah Navajo Trust Fund before a new trustee is
designated. A full and complete historical accounting will specify how
all UNTF funds were used by both state and non-governmental entities
and not merely what entities received UNTF funds and in what amounts.
12. Settlement of Existing Lawsuits.
The State of Utah should use its best good faith efforts to settle
the litigation in Pelt v. Utah before a new trustee is designated.
______
Mr. Boren. At this time, I would like to yield to Mr.
Matheson once again.
Mr. Matheson. Thank you. Thank you for your testimony
today. Ms. Downing, I want to ask you if you could describe how
the trust fund has operated, and if you could describe the
accountability measures that were employed by the state during
the time the state has been the trustee?
Ms. Downing. I am not familiar with the day-to-day
operations of the trust fund but I would be happy to provide
that information back to the Committee.
Mr. Matheson. OK. That would be great. Another question.
Could you also enumerate the administrative costs associated
with managing the fund? It appears the administrative costs
have been nearly equal to the expenditures made for
scholarships. I don't know if you are familiar with that issue
or if you could get back to us with information on that?
Ms. Downing. I will.
Mr. Matheson. Thank you. I am glad you elaborated on the
issue of what happens post-June 30 and the holding fund that
will be set in place. So that holding fund will be structured
such that you can manage the assets, including the buildings
and the real estate, after?
Ms. Downing. Right. It will be managed as a trust fund.
Mr. Matheson. OK. Great. Will there be an administrative
cost collected on that or do you know how that holding fund is
going to address that issue?
Ms. Downing. I don't know, but I will find out.
Mr. Matheson. That would be great. Thank you very much. You
said this holding fund will have some structure for decision-
making authority. Is it different than where the trust fund was
set up now in terms of what will happen with funds or
expenditures to maintain real estate assets? How are those
decisions going to be made by the holding fund?
Ms. Downing. Those decisions will be made through a
management team set up in the Utah Department of Administrative
Services that includes the Director of Finance, which has been
on the Board of Trustees for the Navajo Trust Fund, so he is
very familiar with the assets.
Mr. Matheson. OK. That is helpful. President Shirley, first
of all, welcome. It is always good to see you. You represent
all of Navajo Nation. I have the honor of representing part of
the Navajo Nation, which happens to be the Utah Navajos which
are central to this discussion today.
You state in your submitted testimony in the context of
your desire that the Navajo Nation be the trustee. How do you
ensure that the 37 and a half percent goes back to the Utah
residents of the Navajo Nation? If we shift this over where the
Navajo Nation is the trustee, how do we have certainty that the
37 and a half percent goes back to the Utah Navajo?
Mr. Shirley. For one thing, I think the way the language is
crafted, you know, going toward the designation of a new
trustee, if the U.S. Government is agreeable to making the
Navajo Nation trustee for these funds, I think the language
would be crafted to assure that. Then, I think we have been
working with these funds all this time, and I don't believe any
time we didn't do right by the Navajos living in the State of
Utah.
So, you know, I feel very sure, you know, because of our
governmental structure, the way it operates, that it is
guaranteed.
Mr. Matheson. With the nation's experience in administering
a number of funds, how do you set up your funds or what have
you done to ensure accountability within your trust funds? Are
you familiar with or could you give us some insight into how
you would approach that issue of accountability?
Mr. Shirley. Well, we have our Budget and Finance Committee
in place. It is meeting on a regular basis, at the very least
two times a month and oftentimes more, to zero in on how the
Navajo Nation funds are being expended, how it is being
received and how it is being divvied out at the different
programs within the governmental structure, as well as the
chapters that are out there. In this case, it would be the Utah
Navajos.
Then we have, also, our Auditor General in place. If there
is any complaints, let us say in this case coming from the
Navajos living in the State of Utah, the Auditor General will
get out there and do an audit. If there are any misgivings
there or if there is any misuse of funds, you know, that is
zeroed in on, you know, just immediately.
That is how corrections are made, and sometimes sanctions
come into play. You know, before the sanctions were lifted. We
have the structure in place, Congressman, to really zero in on
accounting for all of the funds that are coming in to Navajo
and being expended on behalf of the constituents.
Mr. Matheson. That is great. And this Budget and Finance
Committee, how is that structured? How many people are on it?
They get appointed or how does that work?
Mr. Shirley. I believe that it is an eight-member arm of
the Navajo Nation Council at the beginning of a new
administration. The committee members are appointed by the
Speaker of the Navajo Nation Council. They come from all
agencies of Navajo land, you know, so we are trying to make
sure that everybody from all the corners of Navajo land are
represented on that committee.
They have rules and regulations by which they operate and
are answerable to the Navajo Nation Council. Of course, the
Navajo Nation Council is the governing body of the Navajo
Nation, so the committee is answerable to that governing body.
Mr. Matheson. Just one more question I wanted to ask you.
Would you be open to considering other entities that could
serve on a board of trustees?
Mr. Shirley. Come by again, Congressman? I am sorry.
Mr. Matheson. I know you state in your testimony that the
Navajo Nation would be the one trustee, but would you consider
other entities that could serve on a board of trustees? It is
kind of an open-ended question.
Mr. Shirley. Certainly, you had also heard me to say,
Congressman, that we would like to be at the table. I think
that is one of the discussion points. I do have the Navajo
Nation position, you know, that says we would like to be
designated as a trustee. How far we want to go with it as far
as going outside of that, I am not exactly sure.
I think, like I said, we would like to be at the table as
these discussions move forward, you know? Certainly, I would
like to hear your ideas about it and some of the ideas that
might be constituted to come forward from the Navajos living in
the State of Utah.
Mr. Matheson. Well, I appreciate that. Mr. Chairman, I will
yield back, but I do just want to acknowledge again, President
Shirley has been a good partner to work with my whole time I
have been in Congress and I appreciate him taking the time to
come here again today. I yield back.
Mr. Shirley. Thank you, sir.
Mr. Boren. [Presiding.] I thank the gentleman from Utah and
recognize Mr. Kildee from Michigan.
Mr. Kildee. Thank you very much, Mr. Chairman. Mr.
President, Ya'at'eeh.
Mr. Shirley. Ya'at'eeh.
Mr. Kildee. It is an honor, sir. I had the privilege many
years ago of being in Window Rock and being asked to formally
address the Tribal Council.
Mr. Shirley. You are always welcome.
Mr. Kildee. I felt very honored by that. Let me ask you
this. I asked the same question of Mr. Swimmer. Is there one
method, or process, or solution that is more sensitive to your
sovereignty than another?
Mr. Shirley. I would say yes to that, and qualify it by
saying that we consider ourselves a sovereign nation,
Congressman Kildee, and as such, we are very sensitive to go
outside and try to bring other people in to try to mind our
affairs. If you could work with us and keep it within the
house, so to speak, you know, within the Navajo Nation, that is
my position and that is my testimony.
Mr. Kildee. You know, it is interesting. I asked that, and
I came in here late so I didn't get the first part of this, but
the trust responsibility of the Federal government came into
being to a great extent, maybe primarily, to protect really the
various Indian sovereign nations from state interference.
You know what happened to the Eastern Band of Cherokees,
right, or the Cherokees who were pushed to Oklahoma and places
in between. My bottom line very often, every step I take is to
make sure we don't interfere, or diminish, or demean tribal
sovereignty. The Navajo Nation has really firmly held onto its
sovereignty. A good example for others.
I have helped some Indian nations, tribes, in my state get
their sovereignty reaffirmed, not granted. It is a retained
sovereignty, not a granted sovereignty. The U.S. Constitution
doesn't grant that sovereignty to you; it recognizes that
sovereignty, so it is a retained sovereignty.
So I am always very careful that we don't sometimes
inadvertently do anything that might diminish that sovereignty.
I always look at that as the bottom line on this. I appreciate
very much your testimony and look forward to coming back and
see you and your Tribal Council again out there as I did
several years ago. Thank you, Mr. President.
Mr. Shirley. You are always welcome, Congressman.
Mr. Kildee. Thank you. Thank you.
Mr. Boren. Thank you, Mr. Kildee, the great champion of
Indian Country. I want to yield to Mr. Bishop if he has any
questions for our panel.
Mr. Bishop. I do, especially for Ms. Downing.
Unfortunately, those are personal. I can't actually do them in
here. We go way back to the State of Utah when you were working
for the Legislature. To be honest, I don't have any additional
questions for this panel. I am going to look forward to reading
the testimony.
This is an issue that came up when I was still in the
Legislature. Well, that is well before I was. It goes back to
the 1930s as an issue. We dealt with it when I was in the Utah
Legislature. I am looking forward to seeing if we can come up
with a final solution that is profitable for everybody right
now, so I will be very much interested in looking to what the
testimony actually is.
I appreciate that the Congressman, whose area this is, is
here and was already asking questions of this panel. Thank you.
Mr. Boren. Thank you, Mr. Bishop. I have a few questions
before we go to the next panel. For Ms. Downing, you mentioned
something about the list of assets that you were going to
provide at the next meeting, the state meeting. Could you
provide the Committee with a copy of the list of those assets?
Ms. Downing. I will.
Mr. Boren. OK. Great.
Ms. Downing. Do you want the liabilities as well? Assets
and liabilities?
Mr. Boren. Yes, that would be great. Second question I have
got, the Committee has received various options for the future
administration of the trust fund. Several options have proposed
that the State of Utah or Navajo Nation pay future
administrative costs. Is the State of Utah willing to pay the
administrative costs for the future administration of the trust
fund?
Ms. Downing. I can't speak on behalf of the Governor or the
legislative leadership, but I can ask that question and get the
information back to you.
Mr. Boren. Could you provide the Committee with that in
writing?
Ms. Downing. I will.
Mr. Boren. Thank you. And then a final question for Ms.
Downing is do you have any suggestions or actions that the
Committee should take to ensure that the views of the
beneficiaries are considered in drafting this Federal
legislation?
Ms. Downing. I agree with President Shirley that the Navajo
Nation should be at the table and that I am convinced that he
will include the San Juan County Navajo, the Aneth Extension
Navajos, in that discussion.
I think it is important for them to be able, I mean that is
one of the things that the Governor and the legislative
leadership have looked at is that we feel that the Navajo are
better equipped to decide who is a better trustee to manage the
funds the way they would like them to be managed and to receive
the benefits the way they would like to receive them.
So I think it is important for this Committee and Congress
to keep in mind what their interests would be.
Mr. Boren. Thank you very much for your testimony.
Ms. Downing. Thank you.
Mr. Boren. President Shirley, actually, you know, coming
from Oklahoma, we are a state rich in tribal history and also
an energy state, and one of the questions I have is about oil
and gas. You know, so many of these fields that we have in the
United States are maturing and they are actually depleting in
their resources.
Can you tell us a little bit about the revenue stream that
is coming from these wells, and is this a declining source of
revenue? For instance, for Congressman Matheson's constituents,
do you see this as a dwindling resource, or are there new wells
to be drilled, or what do you know about the field that we are
talking about?
Mr. Shirley. Thank you, Chairman. Certainly, they are
maturing, they are declining. Right now with the cost of oil,
actually, we are doing good getting revenues, you know, from
some of the oil reserves that we have still underground.
Otherwise, in the long term, they are a dwindling resource and
I think that is the reason why it is very important how these
trust assets are managed.
They need to be invested and made to grow so that after the
depletion, and after the oil and the gas is all gone we would
like to believe that there is still going to be funds to help
out the Navajos living in the State of Utah in San Juan County.
The oil reserves are depleting, yes. Not very much more to go.
Mr. Boren. Thank you, President Shirley. One more question.
Currently, the beneficiaries have the option of suing the
trustee in Federal Court for accountings and mismanagement. Mr.
Swimmer, we talked a little bit about liability earlier.
If the Navajo Nation is appointed as trustee of the Utah
Navajo Trust Fund, is the Navajo Nation willing to waive its
sovereign immunity in Federal Court so that the beneficiaries
can continue with the same remedy option? You might want to
think about that and not necessarily answer today but what are
your thoughts there?
Mr. Shirley. I was just going to say that I need to get
back to our experts and our leaders of Navajo to talk about
that. You know, waiving sovereign immunity is something we
don't want to do. It is a humongous discussion that we take on
when we do talk about that, so I need to get back to the
leadership to talk just about that.
Mr. Boren. Well, thank you all very much for your
testimony. I think we are going to bring on the third panel.
Mr. Shirley. Thank you.
Ms. Downing. Thank you.
Mr. Boren. OK. I want to thank our third panel for coming.
I want to introduce The Honorable Davis--and correct me if I am
wrong--Filfred, Council Delegate, Mexican Water Chapter of the
Teec Nos Pos in Arizona. Is that correct pronunciation?
Mr. Filfred. The last name is correct but the
representation is Aneth Red Mesa and the Mexican Water, not
Teec Nos Pos.
Mr. Boren. OK. Thank you. And then Mr. Clarence Rockwell,
Executive Director, Navajo Utah Commission, Red Mesa Chapter,
Utah; and then Mr. Mark--help me with this--is it Maryboy?
Former County Commissioner, former Navajo Nation Council
Member, Montezuma Creek, Utah. Your testimonies have been
received by the Committee and will be placed in the record in
its entirety.
I ask that you summarize your statement to us now. With
that, I turn to The Honorable Mr. Davis Filfred.
STATEMENT OF THE HONORABLE DAVIS FILFRED, NAVAJO UTAH
COMMISSION CHAIR, AND ANETH, RED MESA, & MEXICAN WATER CHAPTERS
COUNCIL DELEGATE
Mr. Filfred. Mr. Co-Chair, members of the Committee,
Congressman Matheson, Congressman Bishop and the staff, good
morning. Again, my name is Davis Filfred. Currently, I am the
Navajo Utah Commission Chair, also Council Delegate from Aneth
Red Mesa and Mexican Water. I have with me the Navajo Nation
Intergovernmental Relations Resolution; also, the position
statement that was put together by the Navajo Utah Commission.
My comments are very brief. The beneficiary are concerned
about the Navajo Nation being appointed as the trustee. They
are afraid that the Navajo Nation might change the allocation,
change the beneficiary or divert trust money elsewhere. It is
therefore important that this is consistent with our position
statement and that the Federal legislation maintains the status
quo.
Federal legislation should ensure that the beneficiary
remain the same, that the 37 and a half percent of the
royalties continue to go to the beneficiaries, and that the
beneficiaries have local decision making and control over
disbursement. It is also important to set aside monies in order
to grow the trust fund.
My constituents are very concerned that they are suffering
higher environmental costs, and we breathe the polluted air and
treat the contaminated water and the EPA are not doing anything
about it. My constituents want to receive the 100 percent of
the royalty in order to deal with these concerns.
While this may not be the right solution, special money
should be specially allocated to the Aneth to mitigate
environmental impact and to develop the needed infrastructures
in the Aneth Chapter. Although it is important to minimize
disruption of the service happening under the Utah sunset, we
need to make sure that progress is thoughtful and orderly and
that the best interests of the beneficiaries are always the
priority.
We come here to seek your full support in the position
statement that came from the Navajo Utah Commission. I thank
you for the opportunity. Further, and the question that you
posed earlier to the President of the Navajo Nation, the oil is
depleting. We have about a good 10 year life in it. In the
Aneth area, there is no more drilling. The drilling that is
there is all we have left. Again, thank you.
Mr. Boren. Thank you, Mr. Filfred.
[The prepared statement of Mr. Filfred follows:]
Statement of The Honorable Davis Filfred, Navajo Nation Council
Good morning Honorable Chairman Rahall, honorable members of the
committee. I am Davis Filfred, Navajo Utah Commission Chair, and Aneth,
Red Mesa, & Mexican Water Chapters Council Delegate. I have a Navajo
Nation Intergovernmental Relations Committee Resolution and Position
Statement.
The beneficiaries are concerned about Navajo Nation being appointed
as a trustee. They are afraid that Navajo Nation might change the
allocation, change the beneficiaries, or divert trust money elsewhere.
It is therefore important, and this is consistent with our position
statement that federal legislation maintains the status quo. Federal
legislation should ensure that beneficiaries remain the same and that
37 1/2 percent of royalties continue to go to the beneficiaries and
that beneficiaries have local decision making and control over
disbursement. It is also important to set aside monies in order to grow
the trust fund.
My constituents are very concerned they are suffering higher
environmental costs and we breathe the polluted air and drink the
contaminated water and the EPA are not doing anything about it. My
constituents want to receive 100% of the royalty in order to deal with
these concerns. While this may not be the right solution, special
monies should be specifically allocated to Aneth to mitigate
environmental impacts and to develop needed infrastructure for Aneth
Chapter.
Although it is important to minimize disruption of services
happening now under the Utah Sunset Act, we need to make sure that this
process is thoughtful and orderly and that the best interest of the
beneficiaries are always the priority. Thank you.
______
Mr. Boren. Mr. Rockwell recognized.
STATEMENT OF CLARENCE ROCKWELL, EXECUTIVE DIRECTOR, NAVAJO UTAH
COMMISSION, RED MESA CHAPTER, MONTEZUMA CREEK, UTAH
Mr. Rockwell. Good morning, members, and presiding Chair,
Congressman Matheson, Congressman Bishop. My name is Clarence
Rockwell, and I am the Executive Director for the Navajo Utah
Commission. I am also a resident of the Utah portion of the
Navajo Nation. I would like to express my appreciation for this
opportunity to appear before the Committee on behalf of my
people.
The Navajo Utah Commission was created by the Navajo Nation
Council and Intergovernment Relations Committee in 1992. The
purpose is to maintain and develop efficient governmental
services to the Utah area of our reservation. Our intent here
today is to present our position statement. Our IGR resolution
I mentioned delegated certain people to advocate on behalf of
our people pertaining to this important matter.
The Navajo Nation President, the Speaker of the Navajo
Nation Council and the Navajo Utah Commission was given the
authorization to represent the interests of the beneficiaries.
The Navajo Utah Commission's position statement does support
the selection of the Navajo Nation as the trustee for the trust
fund for several reasons.
The main reason is probably the congressional policy to
respect sovereignty and the right to self-determination of
Indian tribes. Second, we know that the Utah Navajo Trust Fund
is capitalized by royalties from Navajo Nation oil and gas
leases on Navajo Nation trust lands. The 1933 Act was created
by Congress when the Navajo Nation government was only 10 years
old.
Presently, the Nation has grown in sophistication and we
have a substantial body of statutory and decisional law, as
well as customary and fundamental laws. The Navajo Nation has
grown its own trust fund and has the expertise, guidance of the
Navajo Nation's Investment Committee, and also financial
consultants.
As a member of the beneficiary, we always support the point
that the funds should be invested wisely, a percentage set
aside for growth and used by future generations. They are
reverent to resources producing. The royalties are depleting,
as mentioned.
As far as the Navajo Nation serving as trustee, the Navajo
Nation has a well-developed annual comprehensive budgeting
process for appropriation of Navajo Nation funds, and we would
like to see the trust fund administered in that manner. Another
point is the Navajo Nation is already serving as the fiscal
agent for monies that we obtain from Federal sources and State
of Utah allocations.
As far as the concern from the Utah chapter areas, there is
a concern that local control be maintained, that the seven Utah
chapters still receive the royalties as it currently is
established. We think this is accomplished by working with
chapters directly and the beneficiaries that they serve.
One avenue we would like to look at is establishing a
central governmental office or a regional governmental office
in the Utah area to serve that benefit. We would also like to
give some special consideration for the Aneth Extension area
because it has seen environmental impact and there is issues
related to that.
We would like to see a separate allocation of monies to
mitigate the issues in that region. Finally, the issue with the
current litigation in Utah. We would like to possibly have the
State of Utah encouraged to address settlement at Cobell v.
Utah lawsuit. We recognize there is issues pertaining to
Federalism, but we do like to see some sort of settlement be
considered.
As far as appropriate consultation, as I mentioned, the
Navajo Nation has given us the authority, the Navajo Utah
Commission, to help assist in advocating on this important
issue. I tried to highlight some of the terms, but we have
submitted the actual position statement for you to review. I
hope you do that.
So with that, I would like to close, and like to thank the
Chair and the honorable members of this Committee in hearing
our concerns. Thank you.
Mr. Boren. Thank you, Mr. Rockwell.
[The prepared statement of Mr. Rockwell follows:]
Statement of Clarence Rockwell, Executive Director,
Utah Navajo Commission
Chairman Rahall, Honorable Members of the Committee,
My name is Clarence Rockwell, and I am the Executive Director of
the Navajo Utah Commission, and a resident of the Aneth area of the
Utah portion of the Navajo Nation in San Juan County, Utah. I am
appearing here today in my official capacity, but I am also a
beneficiary of the Utah Navajo Trust Fund. I am honored to have this
opportunity to appear before the Committee on Natural Resources on
behalf of the Navajo Utah Commission, the Navajo Nation and its
citizens, and especially on behalf of the Utah Navajos, including
myself, who are beneficiaries of the Utah Navajo Trust Fund.
Navajo Utah Commission
The Navajo Utah Commission is an arm of the legislative branch of
the Navajo Nation Government and was created by the Navajo Nation
Intergovernmental Relations Committee to give a voice to the Utah
Chapters in the administration of local Navajo Nation programs.
Specifically, the Commission is ``to provide policy and administrative
guidance to the development, implementation and operation of the Navajo
Utah Office of the Navajo Nation,'' and ``to develop and maintain
efficient governmental services to the Navajo people residing in the
Utah portion of the Navajo Nation.'' The Navajo Utah Commission is made
up of eight Commissioners, either Utah Chapter delegates or other Utah
Chapter officials, who have been democratically elected and
subsequently appointed to the Navajo Utah Commission by the Utah
Chapters. The Navajo Utah Commission has an Executive Director and
administrative staff who work out of an office in San Juan County,
Utah.
The Navajo Nation seeks to ensure that our government speaks with a
single voice in its relations with the United States Congress on this
important issue. To that end, on May 19, 2008, the Intergovernmental
Relations Committee of the Navajo Nation Council passed a Resolution
``Relating to Intergovernmental Relations; Approving the 2008 Position
Statement of the Navajo Nation on the Future of the Utah Navajo Trust
Fund.'' IGRMY-107-08. By this resolution, the Navajo Nation adopted an
official position of the Navajo Nation in regard to key terms for
future federal legislation affecting the Utah Navajo Trust Fund. See
Exhibit A (attached). This resolution also delegated specific authority
to the Navajo Utah Commission, the Speaker of the Council and the
President, to advocate with the federal government and the State of
Utah in regard to the future of the Utah Navajo Trust Fund, in
accordance with the terms of the official Navajo Nation position
statement. The Navajo Utah Commission was integrally involved in
formulating the terms of the official Navajo Nation position statement.
The Commission firmly believes these terms represent the best and
fairest outcome for all Navajo beneficiaries involved and the best
means to avoid mismanagement and misappropriation of trust funds, while
recognizing Navajo Nation sovereignty over its lands, resources and
citizens.
Since the Utah Navajo Trust Fund was reorganized in 1992, the
Navajo Utah Commission has had a successful working relationship with
the Utah Navajo Trust Fund Administration, the Dineh Committee advisory
board and the Board of Trustees. The Navajo Utah Commission has
considerable expertise in grant acquisition and project management, and
has partnered with the Utah Navajo Trust Fund Administration and its
boards, other State of Utah agencies, numerous federal agencies and
other Navajo Nation entities in providing community development
facilities, housing, and other local services to Utah Navajos. In
addition to Navajo Nation funds, the Navajo Utah Commission has
independently sought out and secured upwards of $18 million dollars of
matching federal and state funds to be used for projects in conjunction
with Navajo Trust Fund disbursements.
Navajo Nation as Trustee
The Navajo Utah Commission supports the Navajo Nation as the new
trustee of the Utah Navajo Trust Fund. The Navajo Nation manages and
has successfully grown its own trust fund monies through the guidance
of its Investment Committee. It is imperative that the Utah Navajo
Trust Fund be grown and managed successfully not only to pay for needed
expenditures in the short term, but for the benefit of future
generations of Navajos in San Juan County as well. The trust must be
administered so as to survive in perpetuity, and trust fund monies must
continue to be available to San Juan County Navajos long after Navajo
Nation oil and gas resources in Utah have been depleted. There is
substantial evidence of mismanagement and misappropriation of trust
funds by past entities entrusted with Utah Navajo Trust Fund monies.
The need for accountability by the new trustee is essential; other
entities or individuals who have been involved in mismanagement and
misappropriation of these and other trust monies in the past must not
be involved in future investment and administration of the Utah Navajo
Trust Fund.
Additionally, the Utah Navajo Trust Fund is capitalized from
royalties paid from Navajo Nation oil and gas leases on Navajo Nation
Trust Lands. The Navajo Nation has a well-developed annual
comprehensive budgeting process for appropriation of all Navajo Nation
funds, which for principles of sovereignty and self-determination
should be followed in utilization of proceeds from the Utah Navajo
Trust Fund. For years, the Navajo Nation has been the fiscal agent for
the pass-through of not only Navajo Nation funds to the Navajo Utah
Commission, but also for state and federal grant funds used in
conjunction with Utah Navajo Trust Fund monies in local community
development projects in Utah. The Navajo Nation has proved its
fiduciary capabilities and should be the new trustee.
Local Control and Decision Making
The Navajo Utah Commission is also keenly aware of the importance
of local control and decision making in the disbursement of trust fund
monies. How this will be best accommodated should be worked out in
close consultation with the beneficiaries through the Chapters. One of
the goals of the Navajo Nation is to provide for centralized
administration of Navajo Nation service providers in the Utah portion
of the Navajo Reservation through a Regional Navajo Nation Office
centrally located in Montezuma Creek. The Navajo Nation and Navajo Utah
Commission envision a Regional Navajo Nation Office that will be a
shared facility for the new Trust Administrator, Navajo Nation service
providers, and state programs. A Regional Office facility would improve
coordination of projects involving these entities, and provide greater
access and participation by local citizens.
Special Considerations for the Aneth Extension
The Navajo Utah Commission and the Navajo Nation believe that
special consideration for the Aneth Extension is crucial where oil and
gas development and production processes that generate royalties for
the trust fund cause environmental and other negative impacts. Under
the new terms of the trust, separate monies should be specifically
allocated to Aneth Chapter to mitigate the environmental impacts of oil
and gas extraction on the Aneth Extension, and to meet its unfunded
infrastructure needs.
Utah Concerns
The Navajo Utah Commission and the Navajo Nation are aware of
federalism concerns as we move forward in replacing Utah as trustee for
the Utah Navajo Trust Fund. However, the Utah Navajo Trust Fund was the
result of an agreement between three parties, the Navajo Nation, the
federal government, and the State of Utah. Utah must be involved in
this process as we move forward in relieving Utah of its fiduciary
responsibilities. The Navajo Nation and the Navajo Utah Commission hope
that this process will encourage a full accounting of the trust by the
State of Utah and lead to a fair and appropriate settlement of
unresolved litigation. Incidentally, the Navajo Nation, the State of
Utah, and various agencies of the federal government have recently
begun negotiations to exchange school trust lands in the Aneth
Extension for other federal lands. This exchange is taking place under
authority of the 1933 Act that created the Utah Navajo Trust Fund. This
highlights the government to government relationships that underlie
this federal legislation, and the need for government to government
consultations in resolving the new trust terms.
Appropriate Consultation
In closing, the Navajo Utah Commission would like to emphasize that
the Navajo Nation has an official position and legally delegated
representatives who are authorized to provide testimony to this
Committee on behalf of the Nation and its citizens, and to advocate on
behalf of the Nation for the terms of new federal legislation in regard
to the Utah Navajo Trust Fund. As an official representative of the
Navajo Nation appearing before you today, I have highlighted many of
the terms that the Navajo Nation believes are critical components of
new federal legislation in regard to the Utah Navajo Trust Fund.
However, I also encourage The Honorable Chairman and Honorable Members
of this Committee to read the official 2008 Position Statement of the
Navajo Nation on the Future of the Utah Navajo Trust Fund, attached to
this testimony as Exhibit A. The position statement provides an
historical backdrop to these issues, as well as fleshing out further
details and other terms that the Navajo Nation believes are vital for
our governments to move forward with fair and effective legislation.
Chairman Rahall and Honorable Members of the Committee, on behalf
of the Navajo Utah Commission, the Navajo Nation and its citizens, and
myself as a trust beneficiary, I express my deep appreciation to the
Committee for this opportunity to provide testimony today. Through
coordination with the Navajo Nation Washington Office, the Navajo Utah
Commission looks forward to working with the Committee on Natural
Resources in a government to government relationship as we move forward
with this important legislation concerning the future of the Utah
Navajo Trust Fund.
Thank you.
[NOTE: The 2008 Position Statement of the Navajo Nation on the
Future of the Utah Navajo Trust Fund can be found on page 21.]
______
Mr. Boren. Mr. Maryboy?
STATEMENT OF MARK MARYBOY, FORMER COUNTY COMMISSIONER, FORMER
NAVAJO NATION COUNCIL MEMBER, MONTEZUMA CREEK, UTAH
Mr. Maryboy. Good morning, Mr. Chairman and members of the
Committee. As stated in my testimony, I am Mark Maryboy. I am
from Montezuma Creek. I served as the County Commissioner from
the State of Utah for 16 years, and I also served on the Navajo
Nation Council. During my tenure on the Navajo Nation Council,
I also served as the Chairman of the Navajo Nation Budget and
Finance Committee and also the Transportation and Community
Development Committee.
Today, I am here with a colleague of mine, Mr. Phil Lyman,
and also my brother, Kenneth Maryboy, who is now the County
Commissioner and the Navajo Nation Council. I retired from the
public office as of last year after serving 32 years.
Gentlemen, my position is somewhat different from the statement
made by President Shirley and also position made by Mr.
Rockwell, with all due respect for the gentlemen.
The reason why I made the statement is because the Utah
Navajos are somewhat very unique and different from the rest of
the Navajos on the Navajo Reservation. The reason why I say
that is the Utah Navajos live in a ``no man's land'' where they
sometimes don't get the support that they need from the Navajo
Nation and the State of Utah.
For that reason, I believe that the Utah Navajos are the
poorest Navajo tribe on the Navajo Reservation. They do have
oil and gas. They live in the quaint of the Navajo Nation. They
have oil wells. Million and millions of dollars have come out
of the Aneth Extension, but today, a lot of those Navajos in
Utah still don't have running water, electricity in their
homes.
For that reason, I have a proposal, a separate
recommendation, from the President. That would be to have a
private nonprofit organization be a recipient of the oil
royalty that is coming out of the Aneth Extension. That
particular organization was called Utah Navajo Development
Council.
Due to mismanagement and some of the problems, it is an
organization that no longer handles any of the trust fund.
Recently, I have been working on that organization with Mr.
Lyman, and we have reorganized the organization. We believe
that this particular organization would be in a situation to
handle the funds and to effectively serve the needs of the Utah
Navajos.
It certainly has the backing and the relationship of
various funding institutions to provide effective services.
That would be my recommendation to you this morning. Thank you
very much.
Mr. Boren. Thank you for your testimony.
[The prepared statement of Mr. Maryboy follows:]
Statement of Mark Maryboy, Former County Commissioner,
Former Navajo Nation Council Member
Mr. Chairman and Members of the Committee, it is my pleasure to
submit testimony to your committee today and I hope that my testimony
will help the committee in making some important decisions related to
the Utah Navajo Trust Fund, namely selecting a suitable new trustee.
Introduction
My name is Mark Maryboy, I'm from Montezuma Creek, Utah, I was born
and raised in Bluff, Utah and a resident of the area all my life. I
graduated from San Juan High School in Blanding, Utah and graduated
with a degree from University of Utah.
I was the first Native American elected to a public office as a
County Commissioner in the State of Utah, where I served as for 16
years and retired in 2002, I also served as Navajo Nation Council for
16 years and retired in 2007. During my tenure with the Navajo Nation
Council, I served as the Chairman of the Budget and Finance Committee
and also served as Chairman of Transportation and Community Development
Committee.
I'm here with Phil Lyman a friend and colleague and an agent during
this presentation; I'm also accompanied by my brother Kenneth Maryboy
who is now the San Juan County, Utah County Commissioner and also a
member of the Navajo Nation Council.
Congress, in the Utah Navajo Trust Fund Administration and Self-
determination act of 2008, emphasized the right of the Utah Navajo to
self-determination and self-governance.
Self-determination and self-governance are the central guiding
doctrines of the act, and are vital to the success of any program
intended to meet the objectives set forth by Congress and by the
Supreme Court.
What are the objectives?--Quoting the Supreme Court--``to provide
for the health, education, and general welfare of the Navajo Indians
residing in San Juan County.''
When the act was created in 1933, Congress mandated the percentage
of royalties that would be held in trust and the purposes for which
those funds would be expended. At the time there were no known oil or
gas resources on the ``Aneth Extension'' and so there was no trust fund
to worry about.
The later discovery of Oil should have been a tremendous stoke of
good fortune for Utah Navajos. And, in fact to some extent, it was.
However, as is often the case, conflicts arose. Personal agendas got in
the way. Programs designed to provide valuable and needed services were
poorly run. Mismanagement was a common allegation. What should have
been a source of hope for the intended beneficiaries of the fund,
namely the Navajos living in San Juan County, became a source of
frustration.
Utah Navajo Development Council:
Much of the controversy that surrounds UNDC was not created solely
by UNDC. The fiduciary duty that the state had to the beneficiaries was
being subrogated, at least in part, to UNDC. The State argues that UNDC
was an agent of the beneficiaries. The beneficiaries argue that UNDC
was an agent of the state. While money was being poured into programs
administered by UNDC, neither the state nor the beneficiaries were
taking responsibility for the management of UNDC. Lacking were the
internal controls that should have been in place to help the management
of UNDC to withstand the onslaught of unqualified and self serving
administrators and key employees that began to have free reign. Those
close to UNDC could see the collapse coming long before it actually
occurred, yet the state could not change the management without the
vote of the chapters and the chapters lacked the ability to act quickly
and decisively to correct the problem.
The solution now is not to divide the fiduciary roles of the
Trustee but to identify a Trustee that can be accountable to all
parties concerned. This trustee needs the support of the State, the
County, the Tribe, the beneficiaries. It needs to be empowered with
control in order for it to be fully accountable. The Trustee
organization needs the tools to succeed. It needs financial
institutions and money managers that are willing to advise and oversee
investments. It needs the State of Utah with its resources to take a
vested interest in its activities; after all the beneficiaries of the
trust are Utah citizens. It needs the blessing and support of the
Navajo Nation Administration. It needs to allow the beneficiaries to
have a voice. The Chapters must recognize the trust as a vital asset
and take a vested interest in selecting quality board members who will
cooperate and put personal agendas aside for the sake of the greater
community.
In the early 1990s, UNDC was stripped of its funding. Since then,
it has struggled to maintain a few programs. Currently UNDC is a shadow
of what it was in the 70's and 80's. It owns some important real estate
in Monument Valley. It runs a Tribal education program which is small
but vital to the community of Montezuma Creek. Quite recently the board
had contemplated winding down UNDC's affairs and dissolving the
corporation once and for all.
It was at this time that Mr. Phil Lyman Contacted me, and expressed
his interest in restructuring UNDC with a fresh board of directors and
a with proper accounting controls to set the organization back on firm
footing.
Mr. Lyman is the owner of a local CPA firm. He has had some
involvement with UNDC over the last 12 years or so and wished to see
UNDC resume a few of the programs that had fallen by the wayside during
that time. He and I both agreed that we only wanted to be involved with
UNDC if the entity was completely restructured.
We wanted to be a part of an organization that was designed to
succeed, not designed to fail. With my past leadership experience and
education, and Mr. Lyman's past CFO experience and education, we
determined to move forward. I contacted several of the Utah Navajo
Chapters to see if there was an interest in reorganizing UNDC. The
sentiments were overwhelmingly in favor of re-creating UNDC to be an
organization that could truly ``serve'' the people.
Several of the Chapters have put forth the name of their candidates
for the Board. These candidates are young, educated people who are
dedicated to their people. They have learned from the mistakes of the
previous generation. They are willing to be involved and want to make a
difference.
So now we have a UNDC with roots in the past and a vision for the
future. UNDC is the oldest existing Navajo corporation in Utah.
Restoring UNDC means more than just restructuring an organization. It
means keeping old promises. It means reclaiming lost hope. It sends the
message that a new generation can pick up the plow and continue the
work of their fathers.
In light of the changes that are currently being made with the Utah
Navajo Trust Fund, UNDC seems poised to take on a role much greater
than we anticipated. UNDC is not without significant supporters and
backing. Key members of the banking community have stood by UNDC
through the ups and downs and have expressed confidence in the new
organization. They have expressed an interest in and a commitment to
working with UNDC in whatever capacity they can to help UNDC succeed.
We have contacted several key organizations that have provided funding
for past programs. With the changes we are making they are thrilled to
re-establish relations with us.
With oil at its current price levels and with the Aneth Oil fields
at a high level of production, the Utah Navajo Trust Funds should be
growing. The corpus of the trust fund should be conservatively
invested. We have relationships with several institutional money
managers. All investments decisions will be made with utmost care and
prudence.
If this fund is managed properly and with frugality, program
spending can be increased, management costs will be reduced, and the
corpus of the fund will still grow. Using only the investment income of
the fund, we hope to be able to match money from other grants to
increase the effect of the trust fund and the programs we oversee.
There are tremendous opportunities for education on the reservation
right now. Education has been my greatest interest since graduating
from College and returning home. I created many of the programs that
UNDC has been involved in over the last thirty years. In my community,
we have good schools, but our people need better support. Our families
need assistance to integrate into the educational system. It takes work
and it takes resources, but most of all it takes an understanding of
the people.
The same is true of Healthcare and economic development. To make
real progress requires an understanding of the culture of the Navajo
People living in San Juan County and of the challenges they face. There
is no one more qualified to address these challenges than the people
themselves. And no one who understands those challenges better than I
do.
Additionally, UNDC is committed to working closely with the Navajo
Tribe. We welcome the input of tribal administration.
This debate is not about UNDC. It is truly about the beneficiaries
of the trust and what can be done to best serve them. The Utah Navajos
are among the poorest people in our country today. We need economic
development. We need education. We need health care. But if this is all
that the money from the trust provides it will have fallen far short of
its real purposes.
Self-determination; Self-governance; these are the real objectives.
These are ideals that can actually shape a community, that give hope
and self respect, that build trust, that help to develop a sense of
pride and ownership. In truth these are ideals that cannot be granted
or denied. They exist in each one of us. How we conduct ourselves will
determine if we retain those rights.
Thank you for allowing me to be heard today. I trust that this
committee will make a good decision. I hope that my remarks have been
clear and helpful.
______
Mr. Boren. At this time, I would yield for questions to Mr.
Matheson.
Mr. Matheson. Well, thank you, Mr. Chairman. It is pretty
clear, you know, this is a panel of folks from the Utah portion
of the reservation and you have heard a desire to maintain the
funding stream of the 37 and a half percent of the royalties to
Utah Navajos. I also have a resolution passed by the San Juan
County Commission in Utah for the whole county, not just the
Navajos, this is the county government, indicating that same
desire.
It is a resolution passed in April of this year. If I could
just ask unanimous consent to have that put in the hearing
record.
Mr. Boren. Without objection.
Mr. Matheson. Thank you. I appreciate that. Again, as a
representative of the Utah portion of the Navajo Reservation, I
have the interest in ensuring that the flow of royalties goes
to the beneficiaries on the Utah portion of the reservation, as
was first designated back in 1933 in the Federal legislation.
Mr. Maryboy, I appreciate your testimony. In your testimony
you said the trustee would need the blessing and support of the
Navajo Nation. Do you believe your proposal would get the
blessing of the Navajo Nation?
Mr. Maryboy. Thank you, Congressman Matheson. The reason
why I make that statement, as you heard, I was also the
Chairman of the Navajo Nation Budget and Finance. I know that
the distribution of funds when given, the Utah Navajos are
always the last priority in receiving funds from the Navajo
Nation.
The fear is that if the funds should go to the Navajo
Nation they will go into a black hole and you will never see
it. The Navajo Nation has 88 members of Navajo Nation Council.
Really, if you look at it, Utah, the Navajo Nation, only has
two representatives from Utah serving on the Navajo Nation
Council.
As we speak today, the Navajo Nation is going through some
changes. It is proposing to reduce its membership of the Navajo
Nation Council from 88 to 24 members. When that happens, I
believe that the Utah Navajos will have no seat, no voice
within the Navajo Nation government because the Navajo Nation
government is a huge government.
That is a real concern from the Utah Navajos as far as
receiving goods and services from the Navajo Nation. Thank you.
Mr. Matheson. Appreciate that. Mr. Filfred, if I could ask
you a quick question. What would your suggestion be for who
should be the trustee?
Mr. Filfred. The people of Aneth wanted the 638 in
Montezuma Creek, the Utah Navajo health system, to be the
trustee. I believe we did pass a resolution to that regards. As
far as I am concerned, I think that would be--see, the people
want to be their own trustee. They want to manage their own
money. Thank you.
Mr. Matheson. OK. Mr. Chairman, that is all my questions
right now.
Mr. Boren. OK. I remind both of our members here that we
have four votes coming up on the Floor. At this time I would
yield to Mr. Bishop for questions.
Mr. Bishop. Let me just ask a couple more. If I could
follow up on what Representative Matheson asked Commissioner
Maryboy. The Utah Navajo Development Council concept, how far
have you actually vetted that with the Navajo Nation? Have you
had discussions with them? There goes the vote right now. Have
you had discussions with them formally as to this concept or
this idea?
Mr. Maryboy. Thank you, Mr. Bishop. Thank you for that
question. For your information, President Shirley has not
conducted any public hearing, nor has he made any official
visit to the Utah chapters or the Utah governments to discuss
this particular issue so I was somewhat surprised to hear his
statement.
Furthermore, I believe that the legislative branch has a
different position than what he was proposing this morning.
Thank you.
Mr. Bishop. Thank you, Mark. Mr. Rockwell, if I could ask
just one other question. We have talked about special
considerations for the Aneth Extension. Are we talking in this
case about just maintaining the percentage of royalties or are
we talking about other elements that you think should be going
toward or should be considered by the Aneth Extension or the
Utah Navajo portion?
Mr. Rockwell. Mr. Bishop, thank you for the question. I
think the response might be that, as I indicated, there should
be a separate allocation of funds to address those issues from
that particular area. I think with the funds we would like to
see probably a combination coming some from the 37 and a half
percent itself and the rest from the 62 and a half percent
going to the Navajo Nation. I think that would be the
distribution of costs.
Mr. Bishop. I thank you. There are other questions, but I
think as we proceed with this issue we can address that,
especially with the vote coming up there, although I would
simply remind the Chairman, they said it properly. If you are
going to say it in Utah language, it is ``crick,'' not
``creek.''
Mr. Boren. Thank you, Mr. Bishop. I have just a couple of
questions, and then we will adjourn, for Mr. Rockwell and Mr.
Filfred. As you know, the Navajo Nation does not, and never has
had any legal interest in the trust fund. Do you have any
suggestions or ideas as to how the Committee can best determine
the views of the beneficiaries residing in the Utah chapter?
Because, as was mentioned before, there are only two
members from Utah, I guess, on the Council. If the Nation is
able to manage this fund, how do you get the input from the
people from Utah?
Mr. Filfred. The people from Utah, like I stated earlier,
are afraid that if the Navajo Nation was the trustee, they
don't want to jeopardize that. So the Navajo Utah Commission
has stated their position, but then a lot of other people are
wanting to be the trustee. So I think the money should stay
within the Utah portion and the local people should have some
control over it.
The closest one that we have is that 638, the UNHS, that I
alluded to earlier. Thank you.
Mr. Boren. Mr. Rockwell?
Mr. Rockwell. I would like to go back to the representation
part of it first. Our commission consists of seven chapters,
and these chapters are located along the border of the Utah and
Arizona state line. Each of the communities have an opportunity
to elect who they want. Sometimes it is Utah Navajos; sometimes
they are Arizona delegates.
I have been with the Commission since 1992 and we have
always had unanimous votes on resolutions addressing our
issues. There has never been, as far as I can see, any
detrimental impact for Utah chapters, although some are, in
fact, represented by Utah or Arizona delegates.
As far as the eventual selection of a trustee, I think what
we like, what we are emphasizing, is local control but some
sort of overall oversight by the Navajo Nation. That is
basically what we are implying. We are not saying the Navajo
Nation should be directly administering the funds at the local
level. I think that choice should be left up to the chapters
and the community from the Utah areas. Thank you.
Mr. Boren. Thank you, Mr. Rockwell. One question for Mr.
Maryboy, and in the interest of time, we will move to
adjournment. You mentioned that you have spoken to the chapter
leaders about your future administration of the trust fund, but
what actions have you taken to garner the support of the
individual beneficiaries with your proposal?
Mr. Maryboy. We are currently in the process of selecting
new members from the seven chapters to serve on the new
nonprofit organization that we are reorganizing at this point
in time, so that is what I am doing right now.
Mr. Boren. OK. Thank you for your answers, for your
testimony. I want to say a specific thank you to the Committee
staff for allowing me to chair. This is my first time to ever
be able to chair a committee. So for panelists, the Committee
may have questions we will submit to you in writing. We ask
that you respond to them as quickly as possible.
The hearing record will remain open for 10 days for anyone
who wishes to submit comments or materials to the Committee. I
want to thank all of you for your participation in the hearing,
and this Committee is adjourned.
[Whereupon, at 11:24 a.m., the Committee was adjourned.]
[Additional material submitted for the record follows:]
[A statement submitted for the record by James Black,
President, Oljato Chapter, follows:]
Statement submitted for the record by James Black,
President, Oljato Chapter
Yaat'eeh, Greetings to everyone, especially to Honorable Chairman
Mr. Nick J. Rahall, II and to Honorable Congressional Committee members
on Natural Resources for inviting Oljato Chapter and Utah Chapters'
leadership to present their testimony at today's historic hearing on
Utah Navajo Trust Fund. My name is James Black, I am Oljato Chapter
President. I was born and raised in Monument Valley Pass, Utah. It is
an honor to come before you to present the following testimony on
behalf of Trust Fund beneficiaries of Oljato Chapter, Utah:
1. The Oljato Chapter requests by chapter resolution to U.S. Congress,
including Utah Congressional Delegation, The Honorable
Congressman Jim Matheson and Senator Orrin Hatch and Senator
Robert Bennet to provide equal opportunity for all Utah Navajo
Chapters to freely express their input, recommendations,
concerns to future discussions of transition plan of Trust Fund
responsibility in selecting a new entity since the State of
Utah has decided to cease operations of the Trust Fund as of
June 30, 2008. Also, the Oljato Chapter respectfully requests
that 1933 Congressional Act, as Amended in 1968 [Pub.L. No. 90-
306, 82 Stat. 121 1968] which stipulates Utah Navajos living in
San Juan County, Utah, particularly those living within Utah
chapter boundaries, are entitled to 37 1/2 percent royalties to
be perpetually valued and honored for the future of all Utah
Navajo beneficiaries.
In the upcoming transition phase of designating which
entity will be given trust responsibility beyond June 2008, the Oljato
Chapter recommends that by all means, when U.S. Congress re-writes the
language of 1933 Congressional Act, as amended in 1968, to maintain the
egalitarian concept of distributing Trust Fund monies on equal basis to
all Utah Chapters as it has been demonstrated this responsibility since
inception of 37 1/2 oil and gas royalties by 1933 Congressional
authority.
All Trust Fund beneficiaries of Utah Chapters including
Oljato to be provided a fair, equal, impartial opportunity to
participate and play a major role in all aspect of the planning and
development phase of the transition process until and beyond the
establishment of a new entity. This involvement of Utah Chapters in the
preliminary planning of identifying and selecting the preferred entity
and the structuring of the new organization is extremely critical.
Further, this will allow greater participation in the service delivery
process and coordination plan between Utah Chapters and the new
responsible entity. Most importantly, to provide a community-based,
democratic process in the distribution, sharing, allocation of the Utah
Trust fund.
The geographic location of new administrative building
for the new Trust Fund operations should also be carefully decided
among all Utah Chapters with equal voice and without any bias or
favoritism be involved in this decision making process.
2. The Oljato Chapter hereby requests by chapter resolution to The
Honorable U.S. Congress including Congressman Jim Matheson and
Senator Orrin Hatch and Senator Robert Bennet to designate a
non-Navajo Tribal government entity to serve as new Trustee for
Utah Navajo beneficiaries to ensure continuance of equal share
of Trust fund distribution to Utah Navajos without political
interruptions.
It is the position of Oljato Chapter that the any
political branches, departments or subdivision of the Navajo Nation
government should not be designated as new Trustee because of past
practices of the Legislative branch in diverting funds elsewhere away
from what was intended for and has practiced waiving tribal fiscal
policies to achieve their political agenda and interests without any
sound fiscal plan. Further, the leadership of executive branch is
currently unsteady where it's clashing with the legislative branch due
to proposed council reduction initiative by the Navajo Nation
President's office of executive branch. Although the Oljato Chapter
upholds the respect of continuing partnership efforts with the central
Navajo government on other levels of essential services and programs,
the chapter is in the state of mistrust and doubt for the Navajo Nation
government to be given new trust responsibility. Further, by keeping
the 37 1/2 percent oil and gas royalties outside of the coffers of
Navajo Nation treasury will certainly allow the Utah Navajos to have
greater control and oversight of its trust fund; and will provide an
opportunity to demonstrate self-determination by Utah Navajo Chapters
in the administration and management of the trust fund. Most
importantly, the values, interests and beliefs of the beneficiaries
will no longer be represented and respected if there is to be any major
political influence and interference with the future distribution of
trust fund; and thereby deviating from its original intent under 1933
Congressional Act. It is in Oljato Chapter opinion that a majority of
Utah Chapters holds a similar view on this particular issue.
3. The Oljato chapter hereby requests to U.S. Congress the desires of
its community members to modify the language of the criteria
for the beneficiaries to receive trust fund assistance. The
current language states that all Navajos living in San Juan
County Utah are eligible to receive assistance regardless of
having no ancestral connection to Navajos living in Utah
portion of the reservation. Further, current laws require a
requesting Utah Navajo to reside in San Juan County Utah two
years prior on the date of request in order to qualify for
trust fund assistance regardless of having an ancestral
relationship to Utah Navajos. For example, a Utah Navajo who
has relocated outside the Utah Chapter boundary for over two
years to seek employment, education or training would not meet
the two-year threshold requirement to receive benefits
including Utah trust fund scholarships. The language change
will certainly allow accurate distribution of Trust fund monies
to most accurate eligible Utah Navajos and to avoid
controversy, it will provide assistance to Utah Navajos who
have true-direct ancestral ties to the boundaries of Utah
Navajo chapters.
There are other issues associated with Utah trust fund but these
are the highlights that have been discussed with other Utah chapters
and beneficiaries within the past few months. Please keep us informed
and involved of any future hearings on this important matter. Your
sincere consideration and assistance with the above mentioned issues is
greatly appreciated. Thanks for inviting us to share with you the
Oljato Chapter's testimony statement on today's hearing as it is one of
the most significant moments in the history of Utah trust fund and its
beneficiaries.
______
[A statement submitted for the record by Leo Manheimer,
President, Navajo Mountain Chapter, The Navajo Nation,
follows:]
Statement submitted for the record by Leo Manheimer, President,
Navajo Mountain Chapter, The Navajo Nation
The Honorable Members of the Natural Resources Committee, it is an
honor to submit to you a written testimony on behalf of my constituents
who reside within the Navajo Mountain Chapter of The Navajo Nation,
Navajo Mountain, Utah. These people are beneficiaries of the thirty-
seven and a half percent (37 1/2 %) of the Utah Navajo Trust Fund,
which are funds generated from oil wells on the Utah portion of The
Navajo Nation.
The community of Navajo Mountain is the most isolated area in the
State of Utah, geographically isolated from the State of Utah, with the
surrounding Lake Powell and the San Juan Rivers, and having no direct
roads connecting it to the rest of the State of Utah.
The Utah Navajo Trust Fund has been very beneficial to this
community in terms of housing, education, health services, assisting
the local community government, and various other social programs
funded in part by the Trust Fund. The community of Navajo Mountain and
its people are far better off then their counter parts residing in
Arizona and New Mexico chapters, in the areas of housing, education,
and health services, to name a few, due to the Trust Fund's funding and
services.
Recently, there has been a lot of uncertainty and great
anticipation as to the future of the Utah Navajo Trust Fund since the
State of Utah announced its plans to end its role as the Trustee. Upon
notification of this proposed change, the Navajo Mountain Chapter has
had the opportunity to discuss, at lengths, the various plans or
options as to the future of the Utah Navajo Trust Fund. We have also
had several presentations at various meetings by people who have first
hand knowledge as to the fund's administration and policies.
The people of Navajo Mountain appreciate the current model or
process of administration, in which the funds are administered by a
separate entity that does not assess overhead or indirect costs, and
not channeled through the Navajo Nation government. We believe this is
the only way that the beneficiaries have and will continue to receive
the most returns in direct services. Based on how the current unique
setup is with the State of Utah, there is great apprehension as to what
changes will occur in fund administration and mode of service to the
Utah Navajos who depend on the Utah Navajo Trust Fund for basic
services such as health, education, and housing.
I want to give you an account of what the people of Navajo Mountain
would like to see happen with the Utah Navajo Trust Fund, the
administration of it, and who might be the next Trustee.
The people of Navajo Mountain, during its regular chapter meetings,
have repeatedly expressed the need for the State and Federal
Governments to recognize the rights of Indian Nations to self-govern
and the need for this process to be supported, accommodated, and
legislated by leaders of this great country, The United States.
Further, they believe that The Navajo Nation should also support and
share in this concept by allowing local Navajo Nation Chapters, like
Navajo Mountain, to have the latitude in deciding how gas and oil
royalties should be administered and who the Trustee of such funds
should be. The Navajo Mountain Chapter hopes that these same sentiments
are shared by the seven (7) Utah Navajo Chapters in San Juan County,
Utah.
These discussions, based on this concept, have pointed us in one
direction--the need for each Utah Chapter to become Local Governance
Act (LGA) certified and becoming direct recipients of the thirty-seven
and a half percent (37 1/2%) of Utah Navajo Trust Fund Oil Royalties,
recognizing that this can only come about when chapters become LGA
certified. If the Utah Chapters concentrate their efforts on becoming
LGA certified, Trust Fund money can be administered at the local level
and utilized for direct services, eliminating outside influence or
administration. This approach of self-governance will ultimately
encourage the Utah Chapters to be accountable for the use of Trust Fund
money, as indicated in their Five Management Policies and Procedures
(FMS), and approved by the Auditor General of The Navajo Nation. The
use of Trust Fund money will be monitored as any other organization.
Thereafter, the Utah Navajo Trust Fund policies can be incorporated
directly into the Chapter's LGA policies and procedures. Most Utah
Chapters have been developing and practicing their LGA policies and
procedures over the past few years, and they are on the threshold of
becoming LGA certified.
The people of Navajo Mountain highly favor this concept although it
may not be an immediate solution that can be implemented within each
Utah Chapter. In the meantime, the only option that the people of
Navajo Mountain would like to see is to have the Utah Navajo Trust Fund
be administered by a separate entity that does not assess overhead or
indirect costs. This option will provide the people with continued
services in the areas of housing, education, health care, and local
government.
Thank you for providing us the opportunity to express our position
on the Utah Navajo Trust Fund. If you have any questions or wish to
respond to this submittal, please contact our Chapter Administration at
(928) 672-2915 or email the Community Services Coordinator at
[email protected].
______
[A resolution submitted for the record by The Honorable Jim
Matheson, follows:]
RESOLUTION PROVIDING THE POSITION OF THE SAN JUAN COUNTY COMMISSION
REGARDING THE FUTURE OF THE UTAH NAVAJO TRUST FUND AND TRUSTEE(S)
WHEREAS, the State of Utah has given notice that effective June 30,
2008, it will no longer act in the capacity of Trustee for the Utah
Navajo Trust Fund and the 37-1/2% royalties for oil and gas production
on the Utah portion of the Navajo Nation; and
WHEREAS, the Congress of the United States of America will have to,
by law, determine who will act in the future as the Trustee of this
fund; and
WHEREAS, the State of Utah has determined that the State will not
recommend a future Trustee; and
WHEREAS, the County of San Juan, Utah, also has determined that it
will not recommend a future Trustee; and
WHEREAS, ``[t]here is created a private-purpose fund entitled the
Navajo Trust Fund. The fund consists'' partially ``of revenues received
by the state that represent the 37-1/2% of the net oil royalties from
the Aneth Extension of the Navajo Reservation required by P.L. 72-403,
47 Stat. 1418, to be paid to the state.'' Section 63-88-102, et seq.,
Utah Code Annotated (1953, as amended).
WHEREAS, the residents of the Utah portion of the Navajo Nation saw
nor realized the benefits for the remaining 62-1/2% of the royalties
that were collected by the Navajo Nation; and
WHEREAS, the needs for the residents of the Utah portion of the
Navajo Nation continue to require significant amount of funds.
THEREFORE, BE IT RESOLVED, the official position of the County
Commission of San Juan County, Utah, concerning the future Trustee of
the 37-1/2% of oil and gas production is as follows:
1. They County Commission will not recommend a future Trustee.
2. That neither the 37-1/2% royalties nor the responsibility of
the Trustee be given to the Navajo Nation or any of its divisions,
departments, or agencies.
3. That the future Trustee(s) not be a beneficiary of the 37- 1/2%
royalties.
4. All registered Utah Navajos who reside within the boundaries of
San Juan County, Utah, be eligible for the health, welfare and
educational benefit programs funded by the Trust Fund.
5. That the new Trustee(s) be requested to work closely with the
Utah Navajo Chapters and San Juan County, Utah.
APPROVED this _ day of April, 2008, by the San Juan County Commission.
[Signed] Bruce B. Adams, Chairman, San Juan County Commission
THOSE VOTING YES
Commissioner Adams
Commissioner Maryboy
Commissioner Stevens
THOSE VOTING NO
[None]
A motion to approve the resolution was made by Commissioner Lynn
Stevens. Commissioner Kenneth Maryboy seconded the motion. None
opposed. Commissioner Bruce Adams declared. The motion carried.