[Senate Hearing 107-782]
[From the U.S. Government Publishing Office]
S. Hrg. 107-782
SPECIAL TRUSTEE
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
ON
THE ROLE OF THE SPECIAL TRUSTEE WHITHIN THE DEPARTMENT OF THE INTERIOR
__________
SEPTEMBER 24, 2002
WASHINGTON, DC
83-078 U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpr.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON INDIAN AFFAIRS
DANIEL K. INOUYE, Hawaii, Chairman
BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman
KENT CONRAD, North Dakota FRANK MURKOWSKI, Alaska
HARRY REID, Nevada JOHN McCAIN, Arizona,
DANIEL K. AKAKA, Hawaii PETE V. DOMENICI, New Mexico
PAUL WELLSTONE, Minnesota CRAIG THOMAS, Wyoming
BYRON L. DORGAN, North Dakota ORRIN G. HATCH, Utah
TIM JOHNSON, South Dakota JAMES M. INHOFE, Oklahoma
MARIA CANTWELL, Washington
Patricia M. Zell, Majority Staff Director/Chief Counsel
Paul Moorehead, Minority Staff Director/Chief Counsel
(ii)
C O N T E N T S
----------
Page
Statements:
Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado,
vice chairman, Committee on Indian Affairs................. 1
Cason, James, Associate Deputy Secretary of the Interior..... 2
Homan, Paul M., former Special Trustee for American Indians.. 3
Slonaker, Thomas N., former Special Trustee for American
Indians.................................................... 5
Appendix
Prepared statements:
Cason, James................................................. 27
Homan, Paul M................................................ 28
Slonaker, Thomas N........................................... 34
SPECIAL TRUSTEE
----------
TUESDAY, SEPTEMBER 24, 2002
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m. in room
485, Senate Russell Building, Hon. Ben Nighthorse Campbell
(vice chairman of the committee) presiding.
Present: Senators Campbell and McCain.
STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM
COLORADO, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS
Senator Campbell. The Committee on Indian Affairs will be
in session.
Senator Inouye is detained this morning and has asked me to
go ahead and start the hearing, which I'm happy to do. We have
just three witnesses. We're told we have a vote starting at
10:30. I'll try and get through all of the testimony and
perhaps a few questions before we start, but we may have to
recess and reconvene after the single vote that we're going to
have.
Last week, Judge Lamberth handed down a contempt finding
against the Secretary and Assistant Secretary. With just a few
days left in this session, frankly I don't know what lies ahead
of us, what we can accomplish this year or what we have to
restart next year. I have to say, as I've said a number of
times in the past, I'm sorry that the Secretary and Assistant
Secretary inherited something that's been going on for a number
of years. I know them both very well as friends and as
professional colleagues, too, and I know that in the past both
of them have done their very best to try to help Indian
America. But that's something that we have to face.
Our collective experience with the Special Trustee for
Indian Affairs since the enactment of the 1994 Trust Reform
Management Act has not been very good. I continue to hope it's
going to get better, but at this point, it doesn't seen to be.
Spanning both Democratic and Republican administrations, each
trustee has expressed dissatisfaction with the pace and the
direction of the trust reform effort in his respective Interior
Department. To be candid, I think we need to answer a number of
fundamental questions that seem to keep rolling around that we
haven't found the answer to yet. One is what progress in trust
reform has been made and what we can rely on for future
legislative and funding initiatives. As you know, the task
force has met a number of times and has given us some ideas.
They've agreed on a number of areas and initiatives, and
they're still pretty much dug in and locked out on several
others.
Two, we should ask what Congress continues to do to rely on
the Special Trustee to be the main actor in carrying out the
initiatives. And three, if it should, what changes do we need
to make to the 1994 Act and if the trustee is not going to be
the principal actor in trust reform how should we proceed and
what will take place and what would be the function of the
trustee.
We'll start with the first gentleman, that will be James
Cason, the Association Deputy Secretary of the Interior. If you
would go ahead, Jim.
STATEMENT OF JAMES CASON, ASSOCIATE DEPUTY SECRETARY OF THE
INTERIOR
Mr. Cason. Mr. Chairman, I have a short statement that I
wanted to have entered into the record.
Senator Campbell. Without objection, that will be included
in the record.
Mr. Cason. And I just have a very brief comment. You had
started to talk about the efforts that we've been making with
the Tribal Task Force. We had worked with the Indian community
to select two regional representatives from each BIA region, a
total of 24 plus alternates, to sit down and talk about a
number of issues affecting how the Department of Interior
managed its Indian trust responsibilities.
We've had ongoing negotiations or discussions with the Task
Force for about 8 months now. And as you said, there are a
number of items upon which we agree and a number of items which
we haven't agreed upon yet. We have another meeting scheduled
for this Thursday. We're going to talk to the Task Force and
see if we can move forward on the agenda of the Task Force. And
we plan to keep the committee informed about our progress and
what the implications are to the BIA and to OST and how we
manage trust reform within the Department.
Thank you. So I'm here to answer questions.
[Prepared statement of Mr. Cason appears in appendix.]
Senator Campbell. Thank you. I appreciate that. Would you
stay at the table and let me ask Mr. Homan and Mr. Slonaker
also to come up.
Mr. Cason. That would be terrific.
Senator Campbell. We have some questions we might want to
bounce off all three of you.
Paul Homan, and Mr. Slonaker, both former special trustees,
come and sit down. Mr. Slonaker, you seem to have a couple of
new appendages this morning. Sorry to see that, hope it's all
right.
Mr. Slonaker. It's broken but it's healing.
Senator Campbell. You didn't do that in our State skiing,
did you?
Mr. Slonaker. No; nothing as dramatic as that. [Laughter.]
Senator Campbell. All right, why don't we go ahead with Mr.
Homan first, if you'd like to. Your complete written testimony
will be included in the record, if you'd like to abbreviate.
STATEMENT OF PAUL M. HOMAN, FORMER SPECIAL TRUSTEE FOR AMERICAN
INDIANS
Mr. Homan. I will abbreviate my statement, but I would like
my full statement to be included in the record. Thank you very
much, Mr. Chairman.
And thank you for the opportunity to appear before the
committee. It's been some time since I've been here.
On September 19, 1995, I was appointed the first Special
Trustee for American Indians and served in that capacity until
January 7, 1999, when I resigned rather than accept the
reorganization of the Office of the Special Trustee set forth
in the secretarial order 3208, dated January 5, 1999. The order
was really the last of a series of departmental decisions taken
over my tenure as special trustee to usurp the powers, duties
and responsibilities vested in the Special Trustee by the
American Indian Trust Reform Act of 1994.
For all practical purposes, the cumulative effect of these
departmental actions and policies deprived, in my opinion, the
special trustee the independence and the authority that was
intended by the Reform Act, and the resources, principally
managerial resources, necessary to carry out the duties and
responsibilities of the special trustee, the advisory board and
the Office of the Special Trustee.
Since the Reform Act was passed in 1994, the Department's
record regarding the role of the special trustee and trust
management reform demonstrates over and over again that the
reform efforts of the Office of the Special Trustee were under-
funded, under-staffed, delayed and otherwise frustrated in
favor of higher departmental priorities. The Reform Act was
fundamentally flawed, in my view, in one important respect, in
that it failed to provide the Special Trustee with the
independence and the authority to carryout the purposes of the
act. During my tenure, most of my powers were strictly
oversight, which proved to be largely ineffective.
More important, over the objections of myself the
Department failed to address what I consider the primary cause
of the longstanding trust management problems, the
mismanagement and neglect inherent in the Bureau of Indian
Affairs, the resolution of which is required before any
meaningful reform can be implemented. The result has been a
near complete failure to date in bringing about any effective
reform of the Indian trust management activities of the
Department and the Bureau of Indian Affairs.
As noted, the primary cause of the longstanding Indian
trust problems is lack of competent management, pure and
simple. For over 20 years, knowledgeable and informed
professionals have called the Bureau of Indian Affairs the
worst managed agency in Government. Every outside study,
indeed, most internal studies I researched as Special Trustee
agreed with that conclusion. I agree with that conclusion.
Judge Lamberth, in the Cobell case just last week, said
``The Individual Indian Money Trust has served as the gold
standard for mismanagement by the Federal Government for more
than a century.'' It is axiomatic, in my view, in private
sector restructuring, in which I've had a lot of experience,
that if management is the problem, management must be removed
and replaced if restructuring and reform is to be successful.
Nevertheless, as well-known, clear and practical a remedy as
this is, I also observed that in previous reform efforts over
the last 25 years, no senior manager at the Bureau of Indian
Affairs, to my knowledge, or department, has been removed
because of incompetence. In addition, every reform effort in
the last 25 years has been left largely in the hands of the
very incompetent BIA managers who contributed to the problem in
the first place.
While special trustee, I became convinced, and still
believe that the Department did not have and does not have the
will to address the mismanagement issue and force out the
incompetent managers, nor was and is the Department likely to
attract competent managers willing and able to undertake a
timely reform effort within the Department of the Interior.
Without both, no reform effort can succeed.
I therefore recommended to the Secretary of the Interior
and to the Congress in the 1997 Strategic Plan that the
Department should support the establishment of an independent
agency outside the Department of the Interior to manage the
Indian trust management activities and the reform effort. The
Secretary at the time instead opted for the Department's
historical approach to reform and decided that any reforms
would be undertaken solely by the Department of the Interior.
Again, in August 1997, I recommended to the Secretary that the
reforms being considered in what later became the high level
implementation plan not be left largely in the hands of the
Bureau of Indian Affairs to implement. The Secretary again
opted for the Department's historical approach, and decided in
favor of the BIA's managing most of the reforms of the high
level implementation plan.
The Department currently appears to be using the same
historical approach to reform, apparently with as little
success as the previous administration. Recent court filings in
the IIM litigation indicate just how unsuccessful the reform
efforts have been. Based on these filings, just last week,
that's September 17, U.S. District Judge Royce Lamberth held
Secretary of the Interior Gale Norton and a senior aide in
contempt of court for deceiving him about the agency's failure
to reform the trust fund activities. He found:
The agency has indisputably proven to the Court, Congress
and the individual Indian beneficiaries that it is either
unwilling or unable to administer competently the Trust. Worse
yet, the Department has now undeniably shown that it can no
longer be trusted to state accurately the status of its reform
efforts. In short, there is no longer any doubt that the
Secretary of Interior has been and continues to be an unfit
trustee delegate for the United States.
Managerial incompetence, mismanagement and neglect in the
Department's management of the Indian Trust management
activities are rampant, and have resulted in conditions that
are unacceptable by any reasonable standards, and continue to
do significant harm and damage to American trust beneficiaries.
They have also caused permanent damage to the trust management
systems the Government uses to manage the Indian lands and
monies. These defective systems prevent the Government from
meeting the fiduciary accounting and reporting standards
required by the American Indian Trust Fund Reform Act of 1994,
and standards of ordinary prudence applicable to all trustees,
public and private. This serious breach of trust exposes the
Government to liability and loss that it experienced in
resolving some of the largest bank and thrift failures during
the financial crisis of the 1980's and early 1990's. Until
mismanagement issues are addressed at the Department and Bureau
of Indian Affairs, no meaningful reform can take place, and the
Government's exposure to loss and liability to American Indian
trust beneficiaries will continue to escalate.
In sum, the record shows, and I believe, the Department
does not have the will or ability to address the mismanagement
issues, and force out the incompetent managers at BIA and the
Department. Nor is the Department likely to attract competent
managers willing and able to undertake the time and reform
effort within the Department of Interior. Without both, no
reform effort can succeed, and in the circumstances,
alternative reform structures managed and implemented outside
the Department should be considered by the United States.
Thank you very much. I'd be glad to respond to your
questions.
[Prepared statement of Mr. Homan appears in appendix.]
Senator Campbell. Okay, Mr. Slonaker, go ahead.
STATEMENT OF THOMAS N. SLONAKER, FORMER SPECIAL TRUSTEE FOR
AMERICAN INDIANS
Mr. Slonaker. Thank you, Senator Campbell.
I'm pleased to have the opportunity to share my thoughts
with you and the committee on the role of the special trustee
under the 1994 Indian Trust Reform Act. What I'd like to do is
briefly summarize my written testimony that I've submitted for
the record.
I've had the privilege to serve as the special trustee for
over 2 years, since I was confirmed in May of the year 2000.
Let me tell you first what I think the obstacles have been to
the special trustee and the execution of the special trustee's
obligations as laid out in the 1994 Act. Then I'd like to
provide you with my recommendation going forward to achieve
trust reform and fulfill the Government's obligations.
First, on the obstacles. There are several. I think the one
that I would put at the top of the list would be that the
special trustee has no line authority in this whole procedure.
It has an oversight role, and has no line authority to ensure
and to effect changes as they may be needed. It can only report
on what the Department does or doesn't do to both the Congress
as well, of course, as the Secretary and now obviously to the
Court as well. So therefore, if the Department doesn't
accomplish what it's supposed to do in terms of trust reform
and accounting, there is no way for the special trustee himself
or herself to ensure that.
Second, there is a deep reluctance, in my opinion, within
the Bureau of Indian Affairs, noticeably at the middle
management levels to provide for trust reform on an effective
and timely basis. That's been going on for, as you know, I
think, decades.
Third, there is no accountability demanded of those people
within the Bureau or elsewhere within the Department of the
Interior who have Indian Trust responsibilities that they are
not fulfilling. There appear to be no consequences for those
who do not fulfill those responsibilities.
Fourth, there is no one in charge who heads a single,
separate, clean chain of command for those people charged with
trust duties, so that they have just one priority, just one
type of obligation and just one chain of command to report to.
Additionally, there appear to be additional conflicts of
interest with some BIA positions between their current trust
duties, the fiduciary trust duties on the one hand, and other
responsibilities.
Fifth, many tribal leaders appear to oppose adamantly any
trust organization change that would separate the fiduciary
trust function, that is the management of the assets, from
other responsibilities within the BIA.
Sixth, the concern for the litigation posture of the
Department has been the first priority, in my opinion. Only
those actions in support of trust reform that support the
litigation position appear to be tolerated. For my candor in
reporting as a special trustee on the status of trust reform to
both the Congress and the Court, as required, I was considered
not to be a ``member of the team.''
Seventh, there has been an effort to diminish the trust
standard, in my opinion, as well over the years that the
Government has to both the tribes and individual Indians.
Let me tell you what my recommendation is. There is no
reason that the Department cannot recognize and demand
compliance with the trust duty. There appears to be no
political will to ensure compliance with the Government's trust
obligation. Only a single direct line chain of command, as I
mentioned before, for all personnel, supporting the trust
activities, has a chance of succeeding. Only the special
trustee with her or his legal responsibility, trust experience
and Congressional obligation is best positioned to exercise the
required authority on behalf of the trustee designate, but the
special trustee's position, as I said before, doesn't have that
line authority.
In my opinion, the Department is incapable of executing
trust reform. And indeed, even knowing what and how to do so,
or to provide the experienced, competent people resources
needed in most cases. More than being incapable there is often
a seeming unwillingness to adhere to the trust principles of
the 1994 Act in the Department's own manual, as well as to hold
people accountable for their actions or consequences for poor
performance.
I have come to the conclusion, therefore, that it's
important to have a strong oversight role outside the
Department, responsible to the Congress and headed by an
experienced trust management executive, advised by a board of
trust experts and Indian leaders. In a sense, this is the
Office of the Special Trustee as established by the 1994 Act,
but placed outside the Department. This executive oversight
position and the attendant organization need to have the
ability to require changes when needed changes by the
Department itself are not forthcoming.
There are some instructive models available in the form of
Government-sponsored enterprises that have addressed issues of
public policy in other venues, such as the failures of many
savings and loan institutions a few years back. Such outside
authorities can provide for eventually returning the trust
operations to the Department at such time as the systems, the
procedures, the records and the leadership are ready, and the
Department exhibits the willingness and ability to carry on
with its fiduciary trust responsibilities.
Thus, in my opinion, trust reform is not going to happen
until there is an authority outside the Department that can
compel compliance with the Government's trust duty and demand
accountability. The most recent decision of the Washington, DC
District Court, which stopped short of appointing a receiver,
hopefully will enforce enactment of that trust reform. That
solution, however, will only succeed, in my opinion, if the
Department is actually forced to comply with needed change.
Thank you, Senator. I'll be available for questions.
[Prepared statement of Mr. Slonaker appears in appendix.]
Senator Campbell. Thank you, Mr. Slonaker.
Well, let me start by telling you that, as you probably
remember, in the year 2000, February 2000 when I was the
chairman, I circulated to all tribes and the Inter-Tribal
Monitoring Association, a draft bill that would have set up an
Indian Trust Resolution Corporation, that would have been
somewhat patterned after the trust corporation that resolved
the S&L mess. I think there was some miscommunication
somewhere, because the Department opposed it at that time. I
think many of the tribes were a little bit wary of it. So we
didn't try to push that bill, I didn't even introduce it.
But basically what you're saying now is, along that line,
that maybe we need something alone that line independent from
Government, to settle it. My thought then was that, as we've
heard in some of the other testimony, that in some areas, some
of the people in the Bureau are not considered competent enough
to resolve this problem. But independent experts in money
managing should be the direction we should go. Would you like
to comment on that?
Mr. Slonaker. I basically agree with that, Senator. I would
take small exception to your next to the last sentence, I
think. There are some very competent people in the Bureau of
Indian Affairs who want to do a good job, and who don't always
get the message, but want to do the job. So I think this is a,
I wouldn't suggest that this is a solution that looks to
outside experts necessary in its entirety at all. I think we
can involve a lot of the people who are now involved with it.
But it needs to be a single organization outside the Department
that can actually force the change.
Well, I appreciate that correction . I didn't mean to imply
that they're all incompetent or not. Most of the people, I
think, are very good and very hard working.
Let me ask Jim Cason. First of all, I want to commend
Secretary Griles and you along that line for all the work
you've done in our past hearings and keeping the committee
informed of your negotiations with the tribes. I certainly
applaud you for that, too.
Mr. Slonaker and Mr. Homan, it seems that their experience
leads them to believe that a single, accountable unit on trust
reform is necessary. But they go a little further, and as I
mentioned, talk about some outside help, outside the
Department. I would think that their combined experience over
the last 9 years might have some real validity. Would you like
to comment on going outside the Department?
Mr. Cason. I would like to do that, Mr. Chairman. I guess I
would start off that, I don't think there's a panacea that any
one single thing is going to fix this trust problem. It's not
one single person who's a special trustee, it's not one single
organizational unit. It's not one single budge initiative. It's
a very complicated problem. And it's going to lend to
complicated solutions and a lot of work on a lot of people's
parts.
In this particular area, of having one single accountable
executive, we basically agreed with that. That's been a subject
matter of our efforts to work with the beneficiaries to
identify a single accountable executive and that together with
Indian tribes and the Trial Task Force, we basically identified
the need for an Under Secretary position in the Department of
the Interior who would have line authority within the
Department of the Interior to manage all Indian related
activities within the Department, so that we could accomplish
what's been suggested this morning.
Senator Campbell. So you would suggest that position would
take over or absorb the Trustee's duties?
Mr. Cason. Yes; that has been the position of the Task
Force, that that person should have these job duties. And we
patterned the job duties very closely after those that have
been assigned to the Special Trustee.
But the other element of your question was also addressed
by the Task Force, and that's the element of taking the
responsibilities outside the Department of the Interior. What
we did with the Tribal Task Force is, we started with a blank
sheet of paper, and said, let's assume there are no
restrictions to what we would do, what are the best options for
us to pursue. And during the course of the activities with the
Task Force, we identified 29 different options that individual
Indians or tribes wanted to have considered. And several of
those options included taking the responsibility outside of the
Department of the Interior.
In one case, one of the options was to form a Department of
Indian Affairs, so you would remove all the responsibilities
out of the Department of the Interior as well as some of the
functions from other departments and consolidate them into an
independent Government department. There was also an
alternative that would remove the fiduciary trust
responsibilities from the BIA and OST and put them into an
independent organization much like the one you were talking
about. Let's take all those fiduciary responsibilities outside
the Department and have them managed elsewhere and resolve the
conflicts that are there, outside the Department of the
Interior and all the institutional barriers that we have.
Both of those options were evaluated by the Task Force and
the beneficiaries, in this case, the tribal leaders on the Task
Force, rejected those options and said, you know, they have
some attractive elements to them, but we don't think that's the
right way to go. And they instead went in the direction of
favoring the Under Secretary route and keeping the
responsibilities within the Department.
Senator Campbell. When we floated that idea before, I think
some of them felt that it would be a step back from trust
responsibility if we let the Department off the hook.
Mr. Cason. I think there's a variety of reasons why they
rejected it. But we did have it on the table. And it was a
potential option. But the Task Force basically didn't warm up
to doing that.
Senator Campbell. How many total meetings have you had so
far, as the Task Force?
Mr. Cason. As Task Force meetings, I think we're on the
order of seven or eight. We've basically had them monthly since
I think late December was the first one we had.
Senator Campbell. And you just had another one just
recently?
Mr. Cason. We will have another one on Thursday.
Senator Campbell. At our last hearing on this subject, or
maybe it was the one before, I floated the idea of what happens
in many class action lawsuits, that people can, there's usually
a way they can opt out and settle individually. Was that taken
up, or did you mention that in your last meeting with the Task
Force?
Mr. Cason. It hasn't been, as best I recall, a subject for
the Task Force of having a settlement or opting out provisions
from the Cobell lawsuit. It is an item, an option that we're
considering how we would be able to speed up the process and
offer alternatives to a long term historical accounting
approach. As you recall, Mr. Chairman, we talked about that the
last time I came to testify, that the historical accounting
program is usually expensive, it's projected to cost $2.5
billion and take 10 years or more to complete. You had
suggested that we look for alternatives where we could speed
that up through some sort of a settlement process or some sort
of an offer to the individuals to have another alternative,
other than the historical accounting process. So we are looking
at that.
Senator Campbell. Mr. Homan, Mr. Slonaker, what would you
think of that approach?
Mr. Homan. Well, first of all, I don't believe that the
systems and the condition of the records relative to an
accounting exist in the Department of the Interior. So I don't
believe that spending a nickel or $2 billion is going to enable
the Department to account to the American Indian trust
beneficiaries. The Cobell case involves individuals, as you
know. The Department has stipulated to the courts that there
are no records, electronic records, before 1985. So how
possibly could anyone account to those benificiaries?
My own view, at least until I left, because I was looking
at the IIM records almost every week, is that it's worse than
that. The records that exist since 1985 are woefully deficient.
Sometimes leases cannot be traced to general ledger entries.
The Department has never had what they call a universe of
leases, so they don't know how many there are. The Office of
Trust Fund Management handles one aspect of that, I think well,
and I think that is one of the things that was reformed
correctly. It accounts for the deposits, and it disburses them,
but it doesn't know whether the nickels it receives should be
dimes, because the Bureau of Indian Affairs can't tell them. It
doesn't know when it disburses it to an individual Indian
beneficiary, whether that's the proper beneficiary that owns
that particular asset. Again, the Bureau of Indian Affairs
cannot keep its records up to speed.
So I don't believe an historical accounting can be done
correctly. I think that the Department ought to admit that. I
said that to the Department of Justice in 1997. I said to the
courts that. The Department should admit that it can't do an
accounting. It has to settle with these beneficiaries. It's
going to be rough justice, and I think that if the Congress or
the Administration doesn't come up with a way to deal with it,
the courts will impose a settlement that maybe no one likes.
Second, I take umbrage with the Department's ability to
reform itself from within for one reason. And that is that it
is poorly managed. I'm not suggesting that every single unit in
the Bureau of Indian Affairs is mismanaged, but even the
competent managers there are not trained in trust. They don't
have a trust culture. I have never met a single person, save
one, that would qualify as a trust officer in a national bank,
which I regulated for a number of years. So they would require
massive retraining. And I don't think they have the experience.
They have the experience dealing with obsolete systems that go
back 30 and 40 years in some respects. I don't believe they can
be brought up to speed in time to make effective anything like
a commercially acceptable trust reform effort.
That is the singular reason why I suggested to the
Secretary, to the Congress, that not only do you move the trust
management activities outside the Department of the Interior,
in a GSE or some other agency, but that you also change out
management, like the RTC. And I applaud you for your efforts in
the year 2000.
The RTC outsourced, outsourced under an oversight board to
competent business managers, trustees, if you will, to solve
the 2,900 resolutions of the banks that were failing at the
time RTC went out of business in 5 years. And I think that is
what's required here. They didn't use the management of the
previous FSLIC, which was the insurance corporation, or the
Home Loan Bank Board, which was the supervisor. In a sense,
those employees got bypassed and fired because they didn't do
their job. That appears to be one of the only ways to deal with
Government employees who, in their performance evaluation
reports, are all rated fully successful or better. How can you
remove anybody with that type of a performance rating under the
Government rules? And the answer is, you can't.
This is the same issue that was discussed just this week.
The Administration in its homeland security bill discussed said
that only 434 employees had been removed for incompetence last
year, out of how many thousands. So it's very difficult to deal
with mismanagement in Government. It's an 18-month to 5-year
process when you undertake this, and no senior manager wants to
do that. And the Department, I think their record is clear,
none of them have had the courage, the willingness, and maybe
they're just frankly unable to do it.
Therefore, I have no confidence that any type of structure,
and the one being proposed by the Department these days is no
different than the one proposed in 1993 by Secretary Babbitt,
and which the Congress overrode in favor of the Special
Trustees Reform Act. And it, as I said, is not successful.
But I think that some alternative would be successful.
These are basic accounting and bookkeeping issues that every
single national bank and trust company in the United States has
solved. There hasn't been a trust failure since the 1930's in
the national banking system, not one. Managing Indian lands,
Indian assets, are no different than what small commercial
banks, small commercial trust companies manage every day
competently for the benefit of their beneficiaries.
So I think the Government has to face this issue.
Senator Campbell. There might be one difference. I have a
hunch the banking system does a much better job in record
keeping than the Federal Government. I guess that's one of my
basic concerns. When we talk about historical accounting, that
leads to the assumption that there's something to account or
there are some documents out there or something. But with this
huge number of totally missing, gaping holes in the ability to
document, that's why I thought, well, somewhere along the line
we've got to cut our losses and start cutting some checks to
people that want to opt out. Because I don't think we're ever
going to be able to get a complete and full accounting when we
hear stories like we did a couple of years ago of rat infested
garbage bags full of partially eaten documents in warehouses in
Albuquerque, things of that nature.
Jim, did you want to comment?
Mr. Cason. Yes; I just wanted to make a couple comments,
Mr. Chairman, if I can.
On the issue that you were just talking about, the
historical accounting, clearly there are problems and obstacles
and difficulties that we'll have at the Department of the
Interior to do an historical accounting. There are missing
documents. There are faults with computer systems. We've had
generations of people accounting for monies that were paid in
and they had different systems to use. Those systems have
changed over time. There's been transitions of data. There's
all kinds of reasons to point at some of the failings of the
past as to why we would have difficulties.
But on the other hand, we do have 15 years worth of data in
automated systems that has millions of transactions that are
available, and we have somewhere on the order of 500 million
pages of admittedly poorly organized records.
Senator Campbell. 500 million?
Mr. Cason. That's the estimate I've seen. There's lots of
paper around to help with the process.
Will it be easy? No. Will it be absolutely complete on
every case? No. But there is a lot that we can do in a ``best
efforts'' type of approach to provide an accounting to the
beneficiaries.
Does that mean that we shouldn't look at a way to speed the
process up? No . We would like to do that. We would like to see
if there is an option where we can basically provide some sort
of compensation to individual Indians in lieu of an accounting
so that we don't have to broach that if we can find a good way
to accommodate it.
But just as an illustration, Mr. Chairman, as to where we
are with this, we went through an exercise in the Department at
the behest of the Court to do a virtual accounting for the five
named plaintiffs in the Cobell lawsuit. If I remember correctly
what the number was, we had somewhere on the order of 190,000
documents that we prepared or were provided to do the
accounting for just these five people, one of whom didn't have
an account. So basically 190,000 documents for four accounts.
So there is a lot of documentation there. But it won't be
complete. And the best we can do is basically a best efforts
type of an accounting in which some accounts we will be able to
do pretty well, and some accounts probably will be poor.
Senator Campbell. As I understand it, Judge Lamberth has
set trial date for 2003, for the next phase of the accounting
methods.
Mr. Cason. That's right.
Senator Campbell. How far are you going to be along that
line in order to present your case before the Court?
Mr. Cason. It's our hope, Mr. Chairman, that we will
complete the accounting for the five named plaintiffs and that
we will have several thousand judgment accounts done, and that
we will have some individual accounts, land based accounts,
done so there will be a set of options to look at in the phase
two trial in May. And the Judge has also asked us to provide
the accounting plan, whatever we plan to operate in January.
That will be the basis of the trial in May.
And I would agree with Mr. Homan, it's a tough job. There
is a lot to do, and there are a lot of holes in the process.
But the issue is, do we stop right now and throw up our hands
and say, we can't do anything, and that the only option is to
pursue some kind of settlement, or do we pursue a course of
action to do what we can, to do the best job that we can, and
get as many facts as we can on the table and then reconcile
from that point.
Senator Campbell. With that new trial date set, and the
contempt citation, has that been somewhat demoralizing, or are
you still able to kind of keep your focus on this problem?
Mr. Cason. Mr. Chairman, it is demoralizing. One of the
things that we noticed in looking at the Judge's opinion is the
timeframe for the contempt citation was principally for
activities that occurred prior to our Administration. But they
were associated with the current Secretary in her official
capacity as Secretary. So many of the things that were the
source of the contempt findings were unrelated to the
activities of this Administration.
It was disheartening to find that the Secretary was found
in contempt in that particular way. We understand it, and we
accept and recognize the job that we have to do on trust
reform. The Secretary, I can tell you, is no less committed
today than she was last week to trust reform and doing the
things that are necessary. I've been in her presence where
she's made that abundantly clear, that we still have a job to
do. We need to focus on that job, and we need to get on with
it.
That doesn't mean that what Mr. Homan says is not true.
There are challenges for the Department. Getting the right kind
of management in the right places is a challenge. Fixing the
systems in the Department is a challenge. There are a number of
things that we're working on in a pretty broad agenda to try
and amend the current environment.
Senator Campbell. In amending that current environment and
that agenda, are you also considering outsourcing for some of
the documentation?
Mr. Cason. Well, as far as documentation, I don't know
specifically about that. But as we look at the activities that
we're required to do to administer the trust, outsourcing and
the use of private contractors is an element that we consider
in each of those. And to the extent that we can find functions
that we can outsource, we'd be happy to do that.
Senator Campbell. Have you done it yet?
Mr. Cason. So far, where we've been is an assessment of the
systems. We had an outside contractor, EDS, who did an initial
status review of where we were with trust reform. And I think
that's an effort that Tom arranged for, is to bring an outside
contractor in to do an independent assessment of where were as
a Department on trust reform. They delivered that, and we're
also using EDS to go to the next step, which is to evaluate our
as-is business processes. Because one of the things that led to
the concerns about our TAAMS program was that we started with a
commercial, off the shelf software system that didn't recognize
the panoply of different ways of doing things among the 12
regions of BIA.
So we're going back to the drawing board to sort out how
each of the regions do their business, identify a standard
against which we can operate, and then try to automate the
standard, instead of trying to modify software to do things 12
different ways. So we're using contractors for that. We're
looking at contractors for appraisal work, to augment the BIA
team, we're looking at contractors to help with survey. Because
right now there's too big a burden and a bottleneck with
cadastral survey in BLM. There's a number of other areas where
we'll look at contractors to help. Records is one of them. We
don't have the necessary staff within the Department to deal
with records. So we're looking at contractors there.
One other point, if I may, Mr. Chairman. I'd like to
respond to Mr. Homan. We looked at this issue of taking the
responsibilities outside the Department. And certainly, the
Department would be pleased to work with you and other members
of Congress to critically examine that issue again. There
hasn't been any effort on the part of this Administration to
try and protect the job duties at the Department of Interior.
It's been rather to recognize those are our duties for the time
being, and we're going to do the best we can with them. But
we'd be happy to work with Congress to look at other solutions,
if that appears to be the course of action that's needed.
However, I would suggest that in our efforts with the Task
Force, we put that option on the table. And one of the
considerations that both Congress and the Department has been
sensitive to is, what do the beneficiaries want? What do the
tribes want out of this process? Do you want it to be outside
the Department? Because if they don't want it, then both
Congress and the Administration have the option of imposing
that solution upon the beneficiaries. And that may be
necessary. It may not be necessary, but it's a consideration
that we have to build in, that they have a say in this, too.
We're managing for them.
So this is a participatory trust. They are participants in
the process, and somehow we have to get past that issue of what
do you want in this process as well.
Senator Campbell. The National Congress of American Indians
meets in November. Do you have any further plans to meet with
the commission before then?
Mr. Cason. To the best of my knowledge, we're meeting this
Thursday. We have a scheduled meeting in October in Billings,
MT. That's an issue that we'll address on Thursday, as to
whether we should have that meeting and what the agenda will
be. Those two are planned before November.
Senator Campbell. As I've mentioned several times before,
they convene in November. I'd like to have some kind of a draft
that they can look at, not a bill, but something for them. So I
would appreciate any input.
Can you all stay for a few minutes? That was our call to
vote, and I understand Senator McCain is due to attend right
after the vote. So if you can hang around for a few minutes,
I'd appreciate it.
We'll stand in recess for 10 minutes.
[Recess.]
Senator Campbell. The committee will reconvene. I did see
Senator McCain over on the Floor, he is on his way over now. As
he had originally asked for this hearing, I think we need to
wait for him.
Let me ask just a couple of others, though. Mr. Slonaker,
in your testimony you mentioned several times about
transparency being needed. What is it now that you think is not
transparent about the process?
Mr. Slonaker. I don't think, at least when I left the
Department at the end of July, I still don't think there was
quite the transparency about a lot of what I'm going to
continue to call the sub-projects for trust reform that there
should have been. As they have been reported in the court
reports, I think there is a long ways to go there. The largest
problem is finding the capable project managers, Senator, so
that they can plan their activities, understand what it
requires, and then to get it done, and also to report it
accurately. I think, as Mr. Cason has already mentioned, we had
brought EDS in and I think that effort is basically the only
effort that's going on in trust reform right now, but it's an
important one. Because they are doing the as-is study of trust
systems. From there they will have make the leap to what it
should be, what the system should be. That's going to be a
major step to come.
Senator Campbell. The concept that the Secretary came up
with about 10 months ago and kind of ran into a brick wall, the
BITAM concept, how do you view that? Do you think that's a step
in the right direction?
Mr. Slonaker. Yes; I endorsed that. Because what I liked
about BITAM is that it took those people who were responsible
for trust and put them in, a fiduciary trust, managed for the
assets, and put them into a single organization so they could
focus on their trust duties and have no competing priorities.
So I like the single chain of command idea.
The problem I have, and frankly, I feel differently about
it now than I did 10 months ago, is that I think there is still
lacking the will to really get the job done . So that's why I,
as you heard me earlier, recommend that it's going to take an
outside agency to do it.
Senator Campbell. And that outside agency, let me ask you
and Mr. Homan too, as you probably know, one of the
disagreements, one of the things that's holding up some
progress is that the tribes want an outside and independent
group that basically, as I understand it, would have the
authority to overrule the Secretary if they disagree with the
decisions. The Administration has said very simply that's never
been done in the history of the United States, that any outside
commission has overruled a Federal agency, and they simply will
not go with that idea.
How do you view that, or do you have any idea about where
we can find some kind of compromise with an outside quasi-
independent commission but would still satisfy the
Administration's belief that they should not have veto
authority? I'd like to hear from both of you.
Mr. Slonaker. Let me just make two comments about that.
First of all, I'm uneasy with the notion of a commission. A
commission suggests a committee, and I don't know of anything
that's been run well by a committee.
Senator Campbell. We'll testify to that.
Mr. Slonaker. So I think it needs to be a single executive
director. Whether you call it a special trustee or whatever it
is, it needs to be a single executive director who has a board,
much as the Special Trustee has had under the 1994 Act, of
trust experts as advisors to him or her and also prominent
Indians, tribal leaders and people who, and representatives of
individual Indians who understand what trust is from the Indian
standpoint. So I'm leery to begin with, Senator, of the notion
of a commission.
Senator Campbell. So what you basically are saying is that
advisors or whatever the word would be, they would work within
the existing framework rather than be totally independent?
Mr. Slonaker. I think the special trustee or the executive
director, whatever you call it, needs to be outside the
organization. I think that advisory board needs to be outside
the Interior organization as well.
The second part of it, though, is that I think you need to
be able, the outside agency needs to be able to compel the
trust reform and accounting to be done. I'm particularly
concerned about trust reform. There is no reason that the 1994
Act didn't work or isn't working. But it relied, unfortunately
with 20-20 hindsight, too heavily on the will of the Department
to get the job done. And that's the part that didn't work.
Senator Campbell. Well, I've heard a number of times it's
been underfunded. But as I understand it, since 1994, roughly 8
years, we've put in between $600 million and $700 million into
this effort. And it's roughly $85 million this year.
Mr. Slonaker. Senator, funding is not the problem. It's the
resources of the management people as well as the will to do
it.
Senator Campbell. Thank you. Mr. Homan, would you comment
on this?
Mr. Homan. I agree. It goes back to management. That is, or
mismanagement, I should say. That is why, I think to back up to
your question, I don't believe the secretary of the Interior
should have a veto power, if it's moved to a third party GSE.
No other GSE operates under such a regime.
Senator Campbell. The way I understand it, the tribes would
like the veto over the Interior Department.
Mr. Homan. I understand that, too. But I don't believe that
any other GSE operates under that type of regime. And to the
first question, if you move this operation to a GSE, an RTC
type of corporation, it should have the full power of the
delegated powers of the United States as trustee. Remember, the
Secretary of the Interior is only a delegate trustee. In law,
the real trustee is the United States Government. Therefore,
you can switch from Department to Department. The Department of
the Interior didn't have this authority until 1849. Before
that, the Bureau of Indian Affairs existed as an independent
agency, reporting directly to the Congress, like the bank
regulatory agencies and particularly the Federal Reserve and
the FDIC. They are appointed, their managements and boards are
appointed by the President. But they operate independently and
they report essentially to the Congress through oversight.
But they don't have any other administrative executive
branch, agency, with veto power. Nor should the beneficiaries
in this case have any sort of veto power over the actions of
the trustee. So my idea would be to move the trust activities,
and that's not all of the activities of the Bureau of Indian
Affairs, it's a very small part, probably less than 1,000
people. Those trust activities are asset management, funds
management and the land title and records. I'd move that into a
separate agency reporting to the Congress.
Senator Campbell. There have been a few successes and a
number of failures in reaching a compromise. But I appreciate
your comments, because it reinforces my belief that we need
more help from independent entities, as outlined in your
testimony.
Before I ask for Senator McCain's questions, if Mr. Cason
would like to make one more comment.
Mr. Cason. I would like to make a brief comment. Mr. Homan
raises the issue about beneficiaries having a veto. That
certainly is something that we ought to talk about. In the
course of making our proposal for BITAM, Tom is a special
trustee and this Secretary, we're in agreement on the BITAM
proposal. This is the right thing to do, to separate the
fiduciary trust responsibilities out into a separate
organization so they can be managed separately. And we
submitted a reprogramming to Congress to ask for the ability to
do that and basically, the Indian tribes reacted adversely and
there was concern on Capitol Hill about us moving forward
without the beneficiaries being part of the solution.
So whether there is a stated veto or not, there is at least
an implicit one that we need to try to work together with the
beneficiaries on solutions that they also agree to before we
move forward to deal with trust reform in this kind of a
meaningful way.
Second, just as a comment on the commission, the Department
was willing to work with the tribal task force on several
options for some kind of outside advisory body. And the
sticking point that we ran into was the issue of lining up
authority and responsibility and liability. And that what was
being proposed by the Task Force members was a commission that
would direct the Secretary to do certain things and had the
ability to sanction the Secretary if the Secretary did not do
those things, but had no responsibility for the results, had no
responsibility for ensuring that resources were available to do
those things.
So we well could have been in a position that the
Commission directs the Secretary to do something for which
there were no budget resources, and if Congress chose not to
provide those resources, then the Secretary would be sanctioned
for failure to do things. And that was a problem.
We had suggested in the alternative an advisory committee
to the Secretary, an advisory committee to Congress, so
Congress could review the results and direct the Department to
do certain things through the normal authorizing appropriations
process. But we didn't find a meeting of the minds at that
point.
Senator Campbell. I appreciate that. Thank you.
Well, I've concluded the questions I want to ask. Senator
Inouye may have some. He's not with us today, but he may submit
some to you in writing, if you would answer those.
I'd like to invite my colleague, Senator McCain, who asked
for this hearing, if he would like to ask some questions.
Senator McCain. Thank you, Mr. Chairman.
Mr. Cason, did you say that you were worried that if a
settlement was reached, or an agreement was reached between the
tribes and the Department of the Interior that Congress
wouldn't fund it?
Mr. Cason. What I just stated is, if the independent
commission that was under consideration directed the Secretary
to do things for which the Secretary did not have budget
resources and the Congress decided not to fund it----
Senator McCain. If the Secretary accepted it, which
secretaries have accepted recommendations of hundreds of
commissions over the years that I've been here, what would make
you think that, now, if the Secretary didn't accept it, that's
one thing. But if the Secretary accepted it, what makes you
think that Congress wouldn't fund it? I mean, if Congress
didn't fund it, it would be a clear betrayal of our
responsibilities. I don't follow your logic.
Mr. Cason. Okay, Senator, perhaps you have a different
perspective you'd like to explain to me.
Senator McCain. I have the perspective of serving 20 years
in the Congress. When a commission suggests something, and the
stamp of approval by the Federal Government is on it, of course
Congress funds it.
Mr. Cason. It's just been my observation, and perhaps in
error, that the budgetary process is one of competing
priorities and competing resource requirements. Sometimes not
everything gets funded.
Senator McCain. Well, here we are, welcome back, Mr. Homan,
welcome back, Mr. Slonaker. Here we are. Years and years, you
know, in the words of Yogi Berra, deja vu all over again. Still
no progress, still Native Americans that have no accounting or
any compensation or what they deserve that they've placed in
the trust of the Federal Government. Two Secretaries of the
Interior held in contempt by a Federal judge. I've never heard
of such a thing before. I don't know if Senator Campbell has or
not.
And Mr. Slonaker states that he resigned from his appointed
position under pressure, following in the footsteps of the
first special trustee, Mr. Homan, who resigned in protest of
Secretarial actions, which Mr. Homan believed usurped his
authority. So we've had two special trustees, both of them were
not allowed to, at least in their view, carry out their
responsibilities. And here we are again, with still Native
Americans being treated in a cavalier fashion which is pretty
remarkable. I don't know any other group of Americans that
would be treated in this fashion, to be honest with you.
Let me throw something up, particularly to Mr. Homan and
Mr. Slonaker. And I'd be glad to hear your comments, too. There
is a certain precedent for this kind of problem in treatment of
Native Americans, and that's the issue of water in the west. We
all know that by certain treaty, we guaranteed Native
Americans, specifically talking of my home State of Arizona,
certain water rights. Those rights were ignored for however
long the life of the treaty.
In recent years, we've entered into negotiations with
Native Americans to settle those water rights, and we've had a
number of agreements in Arizona. We now have a very large one
pending. Recognizing that we can never give Native Americans
back the water that they didn't get, it's a perishable
commodity, most people believe that there's no way we're ever
going to have a full and complete accounting of the trust
funds. Most people believe that the point now is to try to
settle this so that this practice just doesn't go on ad
infinitum and ad nauseam.
So trying to think a little bit outside the box, I'd be
interested in all three witnesses' opinion, beginning with you,
Mr. Slonaker.
Mr. Slonaker. Let me say that there are a couple of issues
here. One is that there is the accounting, or what is often
referred to as the historical accounting, and that's really
what you're alluding to specifically. I would agree with you
that at some point, in my own personal opinion, it's probably
going to have to be negotiated, because there isn't any other
way. But in the meantime, it seems to me the law says that the
Government should find out every piece of information they
possibly can.
Senator McCain. And we haven't done that.
Mr. Slonaker. No; not to any meaningful extent.
The other point, though, is that----
Senator McCain. Could you venture an opinion as to why we
haven't?
Mr. Slonaker. I don't think there's been a will to do it,
to tell you the truth. I don't think there's been a real
interest in really exerting the effort and acknowledging the
trust law that exists that requires it, quite frankly.
Senator McCain. I hope the witnesses don't mind if we have
a little dialog here. Does that mean taking it out of the
Interior Department?
Mr. Slonaker. Yes; I think it does. I think at least taking
it out in the sense that it's being directed or required,
forced, from the outside, yes.
Senator McCain. If you were dictator, what law would you
write tomorrow to resolve this issue?
Mr. Slonaker. I would revise the 1994 Act and put the, call
it the special trustee or call it something, put somebody on
the outside in an outside agency. We've talked about a
Government-sponsored enterprise earlier that would have the
capability, until the accounting is done, and until the trust
practices, procedures, records and all that, the systems are
reformed and reconstructed, until that time, to actually
conduct, direct the trust from the outside. The only reason I
suggest that is that, as I said a bit ago, the 1994 Act could
have been successful. But with 20-20 hindsight, it wasn't,
because there's not the will to get it done. But I think there
has to be something on the outside.
Senator Campbell. If I might tell my friend from Arizona
that we did float a draft to do something along this line in
the year 2000. Unfortunately, it met with some resistance from
both the agencies and the tribes, too. It might have been
partly our fault, because we didn't make it perfectly clear
that it wouldn't erode trust responsibility and it wouldn't do
some of the things that they worried about. But it's still a
possibility, if we can get the support to do it.
Senator McCain. Mr. Homan.
Mr. Homan. Yes; first of all, with respect to moving the
trustee functions outside the Department of the Interior, I
have long recommended that. I don't think that the Department
is willing, and I don't think it's able, given its management
structure, to conduct the necessary reform effort.
Senator McCain. Maybe the Treasury Department?
Mr. Homan. I'd move it into an RTC type environment, such
as Senator Campbell suggested. Make it an independent board.
But more important, like the RTC, I believe you can outsource
the asset management to a large U.S. trust company, outsource
the funds management function and outsource the records
management function, which are the three trust activities that
seem to be causing the most difficulty.
I think that in regard to settlement, I would agree with
you. I think what's holding up that settlement, and I'm reading
between the lines here, or one of the things that's holding it
up, is that the Department still is unable to account today for
yesterday's transaction, much less an historical accounting. I
don't believe it's able to do an historical accounting, for the
simple fact that most of the records, particularly with respect
to the electronic records for the IIM accounts do not exist
before 1985. And in trust law, you almost have to go back to
the original treaty or original date, in this case 1888, as to
when that trust was opened. And in common law, trust practice
imposed by the same Government, you have to keep accounts and
records open so long as the trust is open. And these accounts
have been open since 1888 or whenever the particular governing
instrument, the treaty originated.
So the Government is going to have to come to the table and
settle at some point. One of the things that's holding that
settlement up though is that there continues to be exposure to
liability. If you don't have a good accounting system, a good
record keeping system, and Judge Lamberth's ruling last week
indicated that they still do not have that, then the
transactions of today and tomorrow, are going to be subject to
exposure. So how can a beneficiary say, all right, I'm willing
to settle for, you name your amount, but I don't want to give
up the right to sue the Government for further breach of trust,
or a further accounting, since they're unable to do it? And
every beneficiary has the right to sue the Government for a
breach of trust, and for an accounting of the assets in the
trust.
Senator McCain. So you're the dictator now. What is the
legislation, what actions need to be taken?
Mr. Homan. I would model it after the RTC, which was used
to resolve 2,900 bank and thrifts failures in the early 1990's.
My big issue with the former Secretary was strictly management.
You can't institutionalize reform when half or better by any
study of your managers are so-called incompetent to the task
and can't be retrained because of the obsolescence in their
management systems. And so, it's very difficult to deal with
that. The way they dealt with the same issues, with the so-
called bankrupt FSLIC, which was the insurance corporation, and
the Federal Home Loan Bank Board bankruptcy was that they
eliminated those agencies and the employees, made them reapply
for their jobs. Most of them got re-hired by the RTC. But it
gave the Government an opportunity to start afresh with new
management, and then outsource to the private sector a good
many of the activities.
Senator McCain. How much money are we talking about, in
your estimate?
Mr. Homan. Less than the exposure to the Government that
mounts every day.
Senator McCain. Do you agree, Mr. Slonaker?
Mr. Slonaker. I do, Senator.
Senator McCain. Mr. Cason, you just heard a proposal,
outlines for a proposal from two former special trustees. Do
you have any comments?
Mr. Cason. Actually, I do, thank you. Regarding settlement,
certainly doing a comprehensive accounting is a difficult
challenge for the Department. We've been at this process for
decades, well over 100 years. We've had a variety of systems,
we've had tons of paper, made and lost, we've had various
computer systems. There are difficulties in doing it, there's
no question about that. The process will not be perfect, and at
best what we'll end up doing for the $2.5 billion for our
accounting plan that we submitted in July is a best efforts
accounting. We can't fix the things that are missing, and we
can't fix some of the systemic problems, so we'll do the best
that we can. And there will be people at the end who will not
be satisfied with that.
With regard to settlement, we are interested in that kind
of an option, if we can do something that's reasonable. In
terms of defining reason, it's my understanding that the
plaintiffs have been quoted in the press as they think that
they're owed as much as $137 billion as a result of this
problem. And that looks like a pretty hefty price tag.
Certainly it would be open to negotiation and perhaps a lower
figure. But there's a lot of money potentially at stake, or
perceptively at stake.
Our sense at this point is that while the accounting
process may not be perfect, that it affords us an opportunity
to learn much more about the specifics that are there and
perhaps narrow the differences down so the negotiation might be
a meaningful process in a fiscal ball park that could be
mutually acceptable to all parties.
With regard to your dictator question, the Department
basically started off in much the same environment that these
gentlemen did, which is, we needed to isolate the fiduciary
trust responsibilities of the Department into a separate
organization. That was our BITAM proposal. Where it differs
from what's been suggested by the former Special Trustees is
that the BITAM organization would be inside the Department, but
would be separate and focused exclusively on managing our
fiduciary trust responsibilities. But it would not have been a
large step to move from that type of option to an outside of
the Department RTC type organization.
We agreed up front with our BITAM proposal that those
duties needed to be separated into a separate organization.
However, when we started that process, that proposal was
uniformly objected to by Indian Country. They came here to
Capitol Hill and made that point. We met with them in
consultation meetings and got a uniform response to that
effect. Since them we've been involved in a task force with 24
tribal leaders from across the country who have uniformly
rejected that kind of an approach.
Senator McCain, we put on the table with them a set of
other options that were generated by Indian country, 29 other
options, some of which were an RTC type organization, one of
which was a Department of Indian Affairs type organization. And
the tribal task force leaders rejected those approaches in
favor of keeping the job within the Department.
There's probably a variety of reasons for doing that, but
that has been on the table, and before you were able to join
us, I committed to Senator Campbell that the Administration
would be happy to work with Congress to look at that kind of an
option to take it outside the Department if that's the will of
Congress.
Senator McCain. Thank you, Mr. Cason. My concern is that at
least on this side of the room there is a lack of credibility
about the Department of the Interior being able to carry out
these responsibilities. I certainly don't mean that as a
personal comment, but I think the record is pretty clear, as I
said earlier, two Secretaries being held in contempt is an
unprecedented activity. These two individuals left lucrative
and pleasant surroundings in order to serve the country, both
were pressured out of their jobs. And I participated in the
confirmation hearing of both of these individuals, they're fine
and upstanding and experienced Americans.
So we have a very large credibility gap here. Now, if as
you say, and maybe I should know this, but if as you say the
Native Americans seem unwilling to try new ideas or a new way
out of this besides just going to court, then they'll have my
sympathy but not my support. Because we've got to do something
different. If we don't do something different, in Senator
Campbell's and my declining years, we will be back here year
after year, perhaps with a third special trustee who has
resigned under pressure.
So we've got to do something different. It's time we all
sat down at the table with the benefit of the experience of the
two former special trustees, and in all due respect to your
responsibilities, Mr. Cason, you have a lot of
responsibilities. These two men solely focused on this single
issue. And to lose their knowledge, expertise and experience I
think would be a terrible waste, because of the time and effort
that they put into it.
Mr. Chairman, I suggest that we sit down with the tribes
and sit down with everybody else and if as Mr. Cason says, the
tribes are unwilling to do this, then it will be like the water
issues. Water issues have been in court for 50, 75, 100 years,
and the lawyers do very well by that. It's wonderful, these
water issues are wonderful for lawyers. There's generations of
lawyers that have done well financially. And if that's who the
tribes want to listen to, and stay in court and stay in this,
or do they want to start thinking outside the box. That's their
choice. As Senator Campbell has mentioned, if they want to
block it, they can block it. But I would start listening to
their people instead of their lawyers. That's my advice to the
Native Americans. Start listening to the people that are not
getting the benefit here, whereas the lawyers are doing very,
very well by doing good.
I would just like to have any additional comments, starting
with you, Mr. Slonaker. And before I do, I'd like to thank both
for you for your service, for your efforts to try and help
people that very, very badly need help. I've often said that if
any other group of Americans had been mistreated financially in
this way, it would be a national scandal. But it doesn't seem
to be with Native Americans, which will be a source of
puzzlement to me for a very long period of time. Mr. Slonaker.
Mr. Slonaker. Thank you, Senator. I'd just make one comment
at the end here. We tend to talk a lot about what the tribal
leaders seem to want, and the tribal task force, which was made
up of tribal leaders. I think we need to keep in front of us
the fact that a significant amount, although by no means the
majority of the assets that are in question here, these trust
assets actually have individual Indians as the beneficiary. I
see frankly, as a general statement, the individual Indians
being under-represented in this whole process. And I think
that's tragic. It's very tragic.
And so I would add that last comment.
Senator McCain. Thank you. Mr. Homan.
Mr. Homan. That was one of the points I was going to make,
that there is a large, one of the first advice I got when I
became Special Trustee is that there is a large difference
between individual Indians' lands, in this case about 11
million acres, and the tribal lands. By and large, I think Tom
would agree with me, most of the accounting, record keeping and
other difficulties that we've discussed today come from the
management of those 11 million acres which are scattered all
over the United States. No one represents these individuals,
and particularly the tribes do not represent them.
The tribes have their own chief financial officers for the
most part. Only 50 tribes, if I remember my statistics
correctly, have more than $1 million at stake in their
Government trust accounts. Therefore, the other 500 odd tribes
do not have the same interest in trust reform as the tribes
that have significant trust accounts. And none of them have
really anything to do with the management of the individual IIM
accounts, which is a whole separate operation, managed roughly
by the same people. But the privacy rules, etc., are different.
I beg to differ with the Department when it says Indian
Country is against this. I just can't believe that. Certain
tribes are against it. But I know, as Tom said, I don't think
anyone has asked the IIM beneficiaries here who have large
amounts of money at stake. The only people that are
representing them today in the Federal Government seems to be
Judge Lamberth, unfortunately.
Senator McCain. Thank you. Mr. Cason, I'd be glad to hear
any response that you might have. I hope you understand that
the criticisms and frustration that we express here are not
directed at you as an individual. I am sure you are a fine
public servant, and we appreciate your service. But I hope you
also understand our frustration as this Committee has a special
responsibility to Native Americans, as you do. Please go ahead.
Mr. Cason. Thank you, Senator, for your comment. I don't
take any of the criticism or the questions or the intent of the
questions personally. We understand that this has been a long
time problem and that it needs to be worked on. It is not an
acceptable way of doing business and it hasn't been for a long,
long time.
Where we are in the Department is we recognized that we
have responsibilities and that we've taken on a number of
initiatives to improve things. But there's a long way to go to
get there, because a lot of the fundamental things that need to
be there in terms of management, in terms of systems, in terms
of funds and in terms of programs aren't there, or they need to
be rebuilt in order to manage, like a trust. One of the issues
is, for a long time, this program has been managed as another
Government program, it's just another Government program and we
go through the motions, try to do a good job with the resources
that are available and the programs and the institutions the
way they are.
Now our expectation seems to me to be evolving into, this
is actually a trust like a private sector trust and that we
need to manage it much more like a trust. And that has a whole
different set of expectations that we're trying to meet, which
requires a lot more effort or a different paradigm.
So your suggestion that we need to do things differently,
we agree. And we would be happy to work with you and the rest
of the members of Congress to try and work our way through what
is that new way of doing business because the paradigm we
operate under right now has a lot of difficulties with it. We
need to look at other things. A couple of examples I think
would be important is fractionation. We have an issue where
original allotments that were granted to Indians back in the
late 1800's or 1900's have successfully been subdivided into
undivided interests, some as many as 900 different owners of
one allotment.
That brings a huge administrative burden that a private
trust wouldn't put up with. In a private sector trust, you
wouldn't be trying to account for 900 different owners in one
parcel of property. It's expensive, it's counter-productive,
you have to keep track of the title interest of all, the
ownership interest of all. If there's a lease on it, say you
have a $200-grazing lease, you have to divide it into 900
different interests and keep accounts for all those. There's a
lot of things that don't make sense about the trust that we
need to take a look at.
So there are fundamental systems to meet our trust
responsibilities, and there are some things of how the trust
has evolved over time that need to be adjusted if we're going
to do a good job in the future. So we'd be happy to work with
you and the other members of Congress to do that.
Senator McCain. I appreciate your comments. I appreciate
your willingness. But facts are facts. Someone who had your job
before you sat in your chair and said exactly the same thing a
number of years ago. I introduced a bill that would require a
negotiated process with tribes in order to develop standards to
look at an independent commission and a single line of
authority. It was opposed by the Department of the Interior. So
therefore, it didn't go anywhere. We couldn't even have
negotiations because it was opposed.
And again, this is an unusual circumstance. Twice the
Secretary of the Interior has been held in contempt. Twice the
special trustees have been forced out of their jobs. This
borders on a national scandal.
So I appreciate your willingness. Now I'd like to see some
action. I'd like to see some specific proposals from the
Administration. I'd like to see something that we can work on,
either the models that have been introduced or others.
Unfortunately, at least in the view of a Federal court judge,
that hasn't been happening from the Department of Interior.
Mr. Homan and Mr. Slonaker, I again want to express my
appreciation to you for doing the job that you did on behalf of
people who certainly needed your help. I'm sorry and apologize
that your efforts were prevented from being successful for a
broad variety of reasons. But it's very unfortunate and the
people who really suffer from it are the Native Americans who
did not receive what we had hoped would happen when both of you
took your jobs.
I thank you, Mr. Chairman.
Senator Campbell. Thank you. Let me mention a couple things
in closing. As you know, Mr. Cason, we had a bill that did pass
to consolidate lands a few years ago, we did it as a
demonstration project with three tribes. It was very
successful. All the feedback we got back was that it was
working and tribes were ready to have that expanded. There is a
bill in now, as you probably know, to expand that. We haven't
got it passed yet, but I'm still in hopes that we're going to
get that done by the next two weeks. We may not. But it will be
one of the things I will try to address when we come back in,
because that's part of this whole picture as has been mentioned
by all three of you.
I was particularly interested in Mr. Homan's comments about
maybe individuals not being represented. Of course, that was my
thesis behind offering a way to opt out of this whole class
action thing and settle individually, too, which has gotten
some attention. Certainly not positive attention by the
attorneys, because I think the attorneys for the tribes
probably see it as somewhat of a threat and would rather keep
it as a class action lawsuit. But there are people actually
dying waiting for their money. I think it's time, as Senator
McCain does, that we start cutting some checks and getting them
the money that they own. It's their money. We haven't been able
to do that.
But one thing for sure, they elect their leaders just as
our constituents elect ours. And clearly, we can't speak for
every single constituent. In my view, you have to go with what
you think is the right thing to do. I know that you've made a
lot of progress with your last 12 meetings with the tribal task
force, and hope you'll continue to make some progress too. But
that single issue of the authority of the independent
commission seems to be what's holding up most of the progress.
I hope we're going to be able to find an answer to that in the
next hearing or next meeting or two.
Mr. Cason. Mr. Chairman, if I can comment, there were a
couple of other issues that arose at the very end of the
process, recently, that have been problematic. One is that our
reorganization efforts and some of the other discussions that
we've had with the task force have been sidetracked, perhaps,
with some discussions about granting a private right to sue.
And the essence of it is a request for the United States to
waive its sovereign immunity to lawsuit and to grant private
rights of suit. We've had discussions with the Department of
Justice about that, and there's been some negative reaction to
that. So we haven't found an accommodation on that point.
Senator Campbell. On the private rights to sue, I'm not an
expert on this, but the settlement with some of the tragic
circumstances of 9/11 in New York, and the Government made an
agreement to make a settlement, did they waive their rights to
sue after they accepted the agreement?
Mr. Cason. I'm sorry, Mr. Chairman, I don't know about
that.
Senator Campbell. Well, I won't pursue that. But I'd be
interested in doing that with somebody, some expert in that
area.
Mr. Cason. And then there was one other item, which was to
include in proposed legislation essentially trust standards.
And there was some concern, again expressed by the Department
of Justice, about having legislative trust standards at this
point. The reason we're in court is that the Department is not
performing up to the level of whatever the expectations are,
and that trust standards may add another complication to that,
in the midst of current ongoing litigation.
So there were several items that were raised at the very
last minute that have complicated discussions. From my
standpoint, there have been a number of things that I think we
can agree on between the tribal representatives and the
Department of Interior that we could move forward if we're
willing to move the things that we can agree on without it
being an all or nothing proposal. And that's what we plan to
talk about on Thursday.
Senator Campbell. Well, I want to know what those are at
your earliest convenience, those things you agree to. Because
we're in hopes that we're going to be able to offer some
options at the upcoming national meeting in November, full well
knowing some will be for some parts and some against some
parts. But at least we'll try to get this thing off dead center
to get it moving again. It would be a big help if we could
start from the things that we've already agreed to, or can get
an agreement to by the time you meet again. So if you would
work with our staff, we'd really appreciate it.
Mr. Cason. We'd be more than pleased to do that. And then
just as a final comment, Mr. Chairman, this is an opportunity
for all of us, that we have all three branches of Government
currently focused on the same issue. These problems have been
here for a long time. The Department stands ready to do that.
We will come up at any time to meet with members of Congress
and the leadership to try and work our way through novel, out
of the box solutions to this. So we'd be happy to do that, to
work with the Committee.
Senator Campbell. Thank you. And Mr. Homan, Mr. Slonaker,
the efforts that you've put forth to try to resolve this, it
didn't get done, but it wasn't your fault that it didn't get
done. You both expended an awful lot of energy and probably got
more than a few gray hairs for your work.
I would also invite you to work with our staff, too. I know
Senator Inouye is very interested in trying to resolve this,
too. And if you could also have some input through staff about
what the options that we can offer to try to get this off dead
center, I would certainly appreciate it.
Thank you, and thank you for appearing. This committee is
adjourned.]
[Whereupon, at 11:43 a.m., the committee was adjourned, to
reconvene at the call of the Chair.]
=======================================================================
A P P E N D I X
----------
Additional Material Submitted for the Record
=======================================================================
Prepared Statement of James Cason, Associate Deputy Secretary of the
Interior
Thank you, Mr. Chairman and Members of the Committee, for inviting
the Department to testify today on the role of the Office of Special
Trustee for American Indians (OST) in preparing and implementing a
comprehensive plan for the overhaul of the management of Indian tribal
trust funds.
In August 2001, the Department identified various issues concerning
the trust asset management roles of the Bureau of Indian Affairs (BIA),
the Office of Special Trustee for American Indians (OST), and other
Departmental entities carrying out trust functions. In response, an
internal working group was created.
The internal working group developed a number of organizational
options ranging from maintaining the status quo to privatizing
functions to realigning all trust and associated personnel into a
separate organization under a new Assistant Secretary within the
Department. These options were evaluated based on the best method for
delivering trust services and other functions to American Indians and
Tribal governments.
While this internal review was underway, Electronic Data Systems
(EDS) was undertaking an independent, expert evaluation of the
Department's trust reform efforts. On November 12, 2001, EDS presented
its report ``DOI Trust Reform Interim Report and Roadmap for TAAMS and
BIA Data Cleanup: Highlights and Concerns'' in which it called for a
``single, accountable, trust reform executive sponsor.''
The Department decided to propose the formation of an
organizational unit called the Bureau of Indian Trust Asset Management
(BITAM). This option envisioned the consolidation of most trust reform
and trust asset management functions located throughout the Department
into a new bureau, BITAM. The Secretary believed this newly established
Assistant Secretary position would have the needed authority and
responsibility for improved trust reform efforts and Indian trust asset
management. It became clear early in the Tribal consultation process
however that the Tribal Leaders were opposed to BITAM.
At a meeting held on December 13, 2001, in Albuquerque, NM, the
National Congress of American Indians (NCAI) proposed the formation of
a Task Force charged with providing alternative proposals to the
Department on organizational alternatives to reorganize the management
of trust services. This included reviewing the role of the OST. The
proposal was that the Task Force's purpose would be to evaluate all
available organizational options and to submit to the Department one or
more alternatives to reform our trust management system.
To further develop an improved reorganization plan and achieve
broader consensus, Secretary Norton agreed to the creation of a joint
DOI/Tribal Leaders Task Force on Trust Reform.
The Task Force consists of two elected tribal leaders from each
region, with a third tribal leader, from each region, acting as an
alternate. The cochairs of the Federal team are Deputy Secretary Steve
Griles and Assistant Secretary--Indian Affairs Neal McCaleb. They are
joined by a number of other senior Department officials including the
Acting Special Trustee and myself Members of the Task Force have spent
an extensive amount of time on examining.the organizational issues
within the Department. The Task Force has earnestly attempted to
achieve progress on meaningful trust reform.
The Task Force members created several generic composite options
reflecting the best features and major elements from among the 28
alternative proposals submitted by tribes, tribal organizations, and
other interested parties. The Task Force agreed to initiate
consultations on these options in early June, hold regional meetings
throughout June and early July.
On June 4, 2002, the Task Force presented to Secretary Norton its
initial report containing its findings and recommendations on the DOI
trust organization. The Report recommended that the BITAM proposal be
replaced by one of the options advanced, which the Secretary has agreed
to do. The report also recommends raising Indian interests to the
highest level ever by proposing, as a possible option, the appointment
of an Under Secretary to oversee Indian Affairs. In its report, the
Task Force wrote that there is a real need for reform and that the
status quo is not acceptable. We believe the current system must be
improved.
The Task Force presented to Secretary Norton five options for
improving the Department's management of Indian trust assets. From
among them, the Task Force recommended the options of creating a new
Deputy Secretary for Indian Affairs, creating a different
organizational subdivision at the BIA Level, and a composite of the two
which envisions the creation of an Under Secretary of Indian Affairs
and the grouping of BIA functions into logical units. During Task Force
meetings, some Task Force members have expressed interest in an
organizational structure that phases out the Special Trustee.
The Task Force held meetings in Portland, OR, in July, and
Anchorage, AK, in August to consider these options further.
Unfortunately, as you are aware, we reached an impasse with regard to
legislation implementing pieces of these options early this month on
matters that were not related to organizational alignment.
The effort that we have put into this consultation process is an
indicator of its importance to the Department. The Department is firmly
committed to finding an effective, equitable solution for improving the
organization and management of Indian trust assets, both tribal and
individual. Indian country deserves real reform, and the Secretary is
committed to this goal. Any proposal we ultimately come up with will
not have 100 percent support, but we are dedicated to improving the
system, to fairness, and to ensuring that future generations of
American Indians will inherit a trust management system that provides
accountability to individuals and tribes. This concludes my statement.
I will be happy to answer any questions the Committee may have.
______
Prepared Statement of Paul M. Homan, Former Special Trustee for
American Indians
I am grateful to the committee for the opportunity to present
testimony on the role of the Special Trustee within the Department of
the Interior.
The Failure of the Department of the Interior to Reform American
Indian Trust Fund Management Programs and the Role of the Special
Trustee
On September 19, 1995 I was appointed the first Special Trustee for
American Indians and served in that capacity until January 7, 1999 when
I resigned rather than accept the reorganization of the Office of the
Special Trustee set forth in Secretarial Order 3208 dated January 5,
1999.
The Order was the last of a series of Department of the Interior
(Department) decisions taken over my tenure as Special Trustee to usurp
the powers, duties and responsibilities vested in the Special Trustee,
The Office of the Special Trustee (OST) and the Advisory Board by the
American Indian Trust Fund Management Reform Act of 1994 (Reform Act).
For all practical purposes the cumulative effect of these Departmental
actions and policies deprived the Special Trustee, the Office of the
Special Trustee and the Advisory Board of the independence and the
authority that was intended by the Reform Act and the resources,
principally managerial resources, necessary to carry out the duties and
responsibilities of the Special Trustee and the Office of the Special
Trustee.
Since the Reform Act was passed in 1994, the Department's record
regarding the role of the Special Trustee in trust management reform
demonstrates over and over again that the reform efforts of OST were
under-funded, under-staffed, delayed and otherwise frustrated in favor
of higher Departmental priorities. The Reform Act was fundamentally
flawed in one important respect in that it failed to provide the
Special Trustee, the Office of the Special Trustee and its Advisory
Board with the independence and the authority to carry out the purposes
of the Act. More important, over the objections of the Special Trustee,
the Department has failed to address the primary cause of the
longstanding trust management problems: the mismanagement and neglect
inherent in the Bureau of Indian Affairs, the resolution of which is
required before any meaningful reform can be implemented. The result
has been a near complete failure to date in bringing about any
effective reform of the Man trust management activities of the
Department and the Bureau of Indian Affairs.
In 1997, as Special Trustee, I filed a strategic plan with the
Secretary of the Interior (Secretary), OMB and the Congress as required
by the Reform Act of 1994. As required by the Act, the submission was
``a comprehensive strategic plan for all phases of the trust management
business cycle that will ensure proper and efficient discharge of the
Secretary's trust responsibilities.'' I wish to reaffirm a few points I
made in testimony at the time as I believe, with a few exceptions,
problems with the trust management systems and the prospects for reform
are much the same today as they were then. Since my departure in 1999,
1 have followed court filings, Congressional hearings and other public
reports on Indian trust reform with a great deal of interest and have
some more current observations as well.
The Primary Problem with Trust Reform and the Government's Failure
to Deal with It.
The problems in the trust management systems are longstanding ones.
Mismanagement and neglect have allowed the trust management systems,
record keeping systems and risk management systems to deteriorate over
a 20 to 30 year period and become obsolete and ineffective. For many of
those years, including many years since 1990, the trust programs were
seriously under staffed and under funded. The result was that the
government increasingly was unable to keep pace with the rapid changes
and improvements in technology, trust systems and prudential best
practices taking place in the private sector trust industry. This gap
will continue to increase until the reforms outlined in the Strategic
Plan are funded and implemented.
If recent filings by the Special Master and the Court Monitor in
the IIM litigation (Cobell v. Babbitt) are indicative of the current
situation, that gap has not been closed and the prospects for a timely
solution are not very good.
There are two contributing factors and one primary cause of the
mismanagement and neglect that have contributed historically to the
Indian trust management problems:
Contributing Factors to Trust Mismanagement and Neglect
1. One of the historical factors impacting the trust management
problems can be attributed to the trade-offs of financial and
managerial resources which take place at every level of government
between trust management activities (trust resource management, trust
funds management and land title and records management) and other
activities and programs of the Bureau of Indian Affairs, the Department
of the Interior, the Administration and the Congress. History has
consistently shown these politically expedient government tradeoffs of
competing financial and managerial resources to be adverse and
detrimental to the effective and proper administration and funding of
the trust management activities.
These trade-offs have been made and are continuing to be made even
in the face of a long history of court cases, that have consistently
held the trust relationship between the United States and the American
Indians to be a distinctive one. Decisions of the Supreme Court
reviewing the legality of administrative conduct in managing Indian
property have held officials of the United States to ``moral
obligations of the highest responsibility and trust'' and ``the most
exacting fiduciary standards,'' and ``bound by every moral and
equitable consideration to discharge its trust with good faith and
fairness.''
2. Another important factor contributing to trust management
problems is the way the BIA is organized and manages trust management
activities. The BIA's organizational alignment causes decisionmaking
and management for Individual Indian Money (IIM) and Tribal issues to
be an intricate and complex coordination process and an ineffective one
at times.
Primary Cause of Trust Mismanagement and Neglect
The primary cause of the longstanding trust management problems is
lack of competent managerial resources to manage effectively and
efficiently the trust management responsibilities to American Indian
beneficiaries. Managers and staff of the Department and the BIA have
virtually no effective knowledge or practical experience with the type
of trust management policies, procedures, systems and best practices
that are so effective, efficient and prevalent in private sector trust
departments and companies. The BIA area and field office managers do
not have the background, the training, the experience, and the
financial and trust qualifications and skills, necessary to manage the
Federal Government's trust management activities according to the
exacting fiduciary standards required in todays modem trust
environment. Thus, and through no fault of their own, and even assuming
adequate financial and retraining resources were made available, they
are not capable of managing effectively and efficiently the Federal
Government's trust management activities on a par with that provided by
private sector institutions to their trust customers.
The lack of trust managerial competence and the lack of financial
trust orientation and focus throughout the BIA and the Department of
the Interior have been institutionalized over many years and are now
inherent in the BIA organizational culture. It is the reason in large
part:
A. Why the BIA has never originated meaningful reforms of the trust
management processes in the last 30 years.
B. Why the BIA has resisted and ultimately failed to implement
nearly all of the meaningful reform efforts attempted in the last 30
years.
C. Why a new organizational structure, new management and massive
retraining are necessary for the future management of the Federal
Government's trust responsibilities to American Indians and the
management of the implementation of the reforms identified in the
Reform Act of 1994.
For over 20 years knowledgeable and informed professionals have
called the Bureau of Indian Affairs the worst managed agency in
government. Every outside study, indeed, most internal studies I
researched as Special Trustee agreed with that conclusion.
My own research while Special Trustee led me to conclude that the
vast majority of upper and middle level management at the Bureau of
Indian Affairs were incompetent and could not be retrained to manage
the trust management activities on a par with that provided by private
sector institutions to their trust beneficiaries. It was also my
conclusion that the natural starting point for any reform effort
designed to address mismanagement and neglect should be the removal of
incompetent middle and upper management at the BIA and at the
Department. It is axiomatic in private sector restructuring that if
management is the problem, management must be removed and replaced if
restructuring and reform is to be successful. This formula was used
successfully in all five of the financial institution resolutions I
participated in and managed while in the private sector. The formula is
used over and over again in the restructuring and resolution of
countless public and private institutions in ``extremis''. Surely, no
objective observer can doubt that the Bureau of Indian Affairs has been
in ``extremis'' for sometime. Nevertheless, as well-known, clear and
practical a remedy as this is, I also observed that in previous reform
efforts over the last 25 years, no senior manager at the Bureau of
Indian Affairs or Department had been removed for incompetence. In
addition, every reform effort in the last 25 years had been left
largely in the hands of the very same incompetent BIA managers who
contributed to the problem in the first place.
While Special Trustee, I became convinced and still believe that
the Department did not and does not have the will to address the
``mismanagement'' issues and force out the incompetent managers, nor
was and is the Department likely to attract competent managers willing
and able to undertake a timely reform effort within the Department of
the Interior. Without both, no reform effort can succeed. I therefore
recommended to the Secretary of the Interior in the 1997 Strategic Plan
that the Department should support the establishment of an independent
agency, outside the Department of the Interior, to manage the Indian
trust management activities and the reform effort. The Secretary
instead opted for the Department's historical approach to reform and
decided that any reforms would be undertaken solely by the Department
of the Interior. Again, in August 6, 1997, I recommended that the
reforms being considered in what later became the High Level
Implementation Plan not be left largely in the hands of the Bureau of
Indian Affairs. The Secretary again opted for the Department's
historical approach and decided in favor of the BIA's managing most of
the reforms of the High Level Implementation Plan.
The Department currently is using the same basic historical
approach to reform, apparently with as little success as the previous
Administration. Recent court filings in the IIM Litigation indicate
just how unsuccessful the High Level Implementation Plan and successor
reform plans have been. Based on these filings, just last week on
September 17, 2002, U.S. District Judge Royce C. Lamberth held
Secretary of the Interior Gale A. Norton and a senior aide in contempt
of court for deceiving him about the agency's failure to reform the
trust fund activities. He found four instances where Secretary Norton
and Neal McCaleb, assistant secretary for Indian affairs, had committed
fraud on the court, and the judge held them in contempt for failing to
abide by a 3-year old court order to begin major reform of the trust.
Just a few findings from Judge Lamberth's 267 page opinion reinforce
and support some of the points I made above but in much stronger and
more eloquent terms:
``The agency has indisputably proven to the court, Congress, and
the individual Indian beneficiaries that it is either unwilling or
unable to administer competently the trust,''
``Worse yet, the department has now undeniably shown that it can no
longer be trusted to state accurately the status of its trust reform
efforts. In short, there is no longer any doubt that the secretary of
the Interior has been and continues to be an unfit trustee-delegate for
the United States.''
``the Individual Indian Money trust has served as the gold standard
for mismanagement by the Federal Government for more than a century. As
the trustee delegate of the United States, the Secretary of the
Interior does not know the precise number of IN trust accounts she is
to administer and protect, how much money is or should be in the trust,
or even the proper balance for each account.''
Circumstances Warrant an Alternative Structure Outside the Department
of the Interior to Reform BIA and the Indian Trust Management
Programs.
Managerial incompetence, mismanagement and neglect in the
Department's management of the Indian trust management activities are
rampant and have resulted in conditions that are unacceptable by any
reasonable standards and continue to do significant harm and damage to
American Indian trust beneficiaries. They have also caused permanent
damage to the core trust management systems the government uses to
manage the Indian lands and moneys. These defective systems prevent the
government from meeting the fiduciary, accounting and reporting
standards required by the American Indian Trust Fund Management Reform
Act of 1994 and standards of ordinary prudence applicable to all
trustees, public or private. This serious breach of trust exposes the
government to liability and loss that compare to the exposure and
losses the government experienced in resolving some of the largest bank
and thrift failures during the financial crisis of the late 1980's and
early 1990's. Until ``mismanagement'' issues are addressed at the
Department and Bureau of Indian Affairs, no meaningful reform can take
place and the government's exposure to loss and liability to American
Indian trust beneficiaries will continue to escalate.
The record shows and I believe that the Department does not have
the will or ability to address the ``mismanagement'' issues and force
out the incompetent managers at BIA, nor is the Department likely to
attract competent managers willing and able to undertake a timely
reform effort within the Department of the Interior. Without both, no
reform effort can succeed. In the circumstances, alternative reform
structures managed and implemented outside the Department 8 of the
Interior should be considered by the United States, the ultimate
trustee of the American Indian trusts.
In their present circumstances and condition, if the Indian trust
management activities managed by the Department and the Bureau of
Indian Affairs were housed in and managed by a private sector financial
institution, that institution would be declared ``bankrupt'',
management and staff would be removed and replaced and a responsible
successor trustee would be appointed by the same government that is
allowing the Indian breach of trust to continue. While considered
``extreme'' by some, this is a common public and private sector remedy
for bankrupt institutions and one that should be considered in
reforming the bankrupt Bureau of Indian Affairs.
The U.S. Government itself used this so-called ``extreme'' remedy
over and over again from 1980 through 1994 when the financial
institution crisis resulted in 2,912 failed or assisted financial
institutions. The FDIC and/or Resolution Trust Corporation (RTC) gave
government assistance in resolving each of these institutions, such
that over 99 percent of depositor beneficiaries (insured and uninsured)
received 100 percent of their deposit balances in cash. In every major
case, the government required senior management and staff of the failed
or assisted institution to resign before it provided government
assistance to depositors, creditors and successor financial
institutions. The government's exposure to liability and loss as a
result of its continued breach of trust in managing the American Indian
trusts is at least equal to the exposure to loss created by many of the
largest bank and thrift failures and should be addressed with the same
urgency that the government used in resolving the financial institution
crisis of the early 1990's.
The BIA's mismanagement of the Indian trusts, particularly as
regards records management, asset management and accounting have
exposed the government to liability and loss, the magnitude of which
also compares to losses and accounting deficiencies at WorldCom, Global
Crossing, Enron and Arthur Andersen. Management has been fired at each
one of those bankrupt institutions and most of the staff will lose
their jobs. None will survive their bankruptcies with a structure
anything like their pre-bankruptcy structure.
It is time for the Federal Government to consider a reform
resolution for the Department and BIA along the lines used to reform
failed financial institutions or large bankrupt corporations,
especially in light of the fact that the Department has failed to
reform from within. As a result, such a so-called ``extreme'' remedy
seems warranted for the BIA before the government's exposure to loss
escalates further as a result of the continued breach of trust.
Recommendation
The history of numerous Indian trust reform efforts over the last
30 years has shown that the Department of the Interior is unwilling and
unable to implement the types of reforms and management changes
necessary to manage the Government's trust management activities
according to the exacting fiduciary standards required in todays modem
trust environment. It is for this reason that I recommended in the 1997
Strategic Plan and to the Secretary in 1997 and recommend now that
Congress consider establishing an independent government sponsored
enterprise to manage the U.S. Government's trust management
responsibilities to American Indians and American Indian Tribes for
trust resource management, trust funds management and land title and
records management according to the most exacting fiduciary standards
and moral obligations of the highest responsibility and trust.
History and Performance of the Office of the Special Trustee
From the inception of OST in September 1995, neither the Special
Trustee nor the Office of the Special Trustee had direct authority
under the Reform Act of 1994 to initiate reforms or to implement those
trust management reforms that were approved following the filing of the
Special Trustee's strategic plan in April 1997. Nor did the Secretary
elect to vest the Special Trustee and the OST with the direct authority
to implement the reforms except at the Office of Trust Funds Management
(OTFM) that has reported to the Special Trustee since February 1996.
Instead, the Special Trustee and the OST were limited to oversight of
the vast majority of the reform efforts that were to be implemented in
the same manner as previous unsuccessful reform efforts, i.e., directly
by the Bureau of Indian Affairs (Bureau) and other affected units. .
During the 1996 to 1999 period, the record shows a dramatic
difference between the very successful reform results achieved by OST
directly at OTFM; the minimal results achieved through oversight of the
Bureau's reform efforts; and the negative results achieved through
oversight of the Department's record keeping reform efforts.
On July 31, 1998 the Secretary of the Interior approved the High
Level Implementation Plan (BLIP) which, in his view, provided the
structure through which the Department could accomplish the successful
resolution of the many decades-old Man Trust Funds problems. Of 13 sub
projects, OST had direct line responsibility for only 2 sub projects:
Individual Indian Money (MA) and OST data cleanup and the trust funds
accounting system (TFAS) used for both IIM and tribal accounts. OST had
started planning for these two tasks in 1996 and was able to begin
implementation in 1996 and 1997 despite the limited managerial and
financial resources which were made available by the Department. When
Congress approved significant funding for 1998, OST and OTFM were able
to show excellent results as reflected by the BLIP progress reports
that have been made public.
The implementation of the trust funds accounting system by OST also
was a successful reform effort. After being held up by the Department
for over 1 year, OST in 1998 obtained all necessary approvals, awarded
a TFAS contract, conducted a successful pilot and had implemented the
system ahead of schedule. It is the only trust accounting system to
have had any success in the reform of the Indian trust management
systems.
On the other hand, concerns over the BIA's data cleanup and systems
efforts were relayed in writing to the Secretary by OST as early as
July 1998 and for this reason the Special Trustee did not recommend
approval of the Bureau's part of the HLIP. Public and litigation
filings to date show that the seven sub projects that were to be
implemented principally by the Bureau of Indian Affairs were not
implemented by the Secretary's imposed deadline of year-end 2000. The
Department still has not been successful in bringing about material
reform. Records cleanup has been inadequate. Systems design and
implementation of asset management and ownership systems plans
substantially failed. The Bureau's record to date in this reform effort
mirrors its historical failures to manage and implement meaningful
reform. The Department is now estimating that it will take at least
until 2005 to implement still another reform plan being proposed by the
Department. Given its historical record, I have no confidence that any
reform effort managed by the Department will be successful.
An even larger threat to the overall reform effort is the
Department's continued inability or unwillingness to address the
fundamental trust record keeping problems and systems that account for
the vast majority of the Indian trust management operating and
accounting problems. For this reason, during my tenure as Special
Trustee, the Special Trustee and OST, in their oversight capacity,
presented several comprehensive plans to bring the Department's trust
account records management function up to the standards that would
govern a commercial trustee. None of these efforts were accepted and
the HLIP gave no definitive guidance on the issue. For this reason the
Special Trustee noted to the Secretary on July 31, 1998:
Since a joint Indian trust records management solution is
fundamental to the successful implementation of the other Sub-
Projects of the high level implementation plan and since all
affected Bureaus have not yet agreed on a solution, the high
level implementation plan being presented for surname and your
approval will not in my opinion enable the Department to comply
with the Reform Act and the Secretary's Agreement dated August
22, 1997.
To my knowledge there is still no records retention policy that
meets commonlaw trust standards, a condition precedent for any adequate
trust records management system. Nor is there a records management
system to retain trust documents, keep records and furnish information,
sufficient to provide an accounting to the beneficiaries or to meet the
accounting, accuracy and reporting requirements of the Reform Act of
1994. The Department's failure to address and resolve the trust record
keeping problems jeopardizes the entire reform effort. Without the
accurate records required by the Reform Act and commonlaw standards,
systems improvements planned for trust fund accounting, asset
management and land title and records will be ineffective and will not
permit the Department to comply with the accounting, reporting and
accuracy standards required by the Reform Act of 1994.
In 1999 the Department was criticized and sanctioned for ongoing
mismanagement and neglect of the Indian trust records. The Secretary
and the Assistant Secretary in charge of the Bureau of Indian Affairs
were held in civil contempt of an U.S. District Court's document
production orders. The case (Cobell v. Babbitt) underlying the contempt
proceeding is essentially a trust administration action in which the
Indian beneficiaries seek an accounting. The court has not to this
point in the case addressed the detailed statutory and commonlaw trust
duties owed by the government as trustee to the individual Indian
beneficiaries. Nonetheless, the court noted ``it is basic hornbook law
that the trustee has the duties of retaining trust documents, keeping
records, furnishing information to the beneficiary, and providing an
accounting.'' The court further noted: ``the court will appoint a
special master to oversee discovery, document production, and related
matters and to effectuate compliance with this court's orders. The
defendants simply cannot be trusted to do this job themselves.'' If
recent filings (2001 and 2002) by the Special Master and by the Court
Monitor in the IIM Litigation are indicative of the present situation,
the Department still cannot be trusted to do this job.
The Performance of the Office of the Special Trustee
The recent record of the Department and the Bureau of Indian
Affairs in planning and implementing trust management reform is only
the most recent demonstration of their historical failures to bring
about meaningful trust management reform. There has been some success,
notably the progress of OST and OTFM in cleaning up the IIM records, in
implementing a new trust funds accounting system and in the
administration of OTFM. These modest successes demonstrated that
significant reform is possible when an office has the responsibility,
the authority, the independence and the financial and managerial
resources to carry out the reform. An noted, The Reform Act of 1994
called for a Special Trustee and an OST to oversee the reform effort
but with no direct authority to ensure that the purposes of the Act
were carried out. The Act was flawed in that respect. Despite
aggressive oversight activities by the Special Trustees and OST over
the last several years, the oversight efforts proved largely
ineffective in ensuring that the Department complied with the Act. In
this respect, the OST can be chalked up as another failed reform
vehicle. On the other hand, the OST's lasting contributions were in
further exposing the Department's Indian trust management deficiencies,
in keeping these issues before the Congress, the Judiciary and the
public and in proposing permanent, practical solutions to these
longstanding problems. In addition, OST was often the only voice in
government representing the interests and concerns of the American
Indian trust beneficiaries who are entitled to and deserve the best
possible management of the Indian trusts by the trustee. If such
efforts eventually lead to the substantial resolution of the Indian
trust management issues, OST can be counted a success.
______
Prepared Statement of Thomas N. Slonaker, Former Special Trustee for
American Indians
Thank you, Mr. Chairman and members of the committee.
I very much appreciate the opportunity along with Mr. Homan, the
first Special Trustee for American Indians, to discuss with you the
issues that have impacted the Special Trustee since the position was
created pursuant to the 1994 American Indian Trust Fund Management
Reform Act (``1994 Act'').
The Senate confirmed me in late May 2000 as the second Special
Trustee. I served through the end of the Clinton administration and was
held over by President Bush. I then served briefly as the Acting
Secretary of the Interior until Secretary Norton was herself confirmed
and continued thereafter as the Special Trustee until I was asked by
her to resign in late July of this year. I had left retirement
following 36 years of private sector trust and banking experience to
undertake the Special Trustee's responsibilities.
The Government's Indian Trust Obligation
It is important to note that the nature and scope of the Federal
Government's overall obligations in the area of Indian affairs is
complex and reflects a history dating nearly to the establishment of
the United States. The 1994 Act, however, addresses a discrete part of
those obligations, the Indian trust assets, as that term is defined in
the Secretary's Principles for Managing Indian Trust Assets. As trustee
the government holds assets (mostly land) for some 300 tribes and
approximately 250,000 individual Indians assets for identifiable
beneficiaries. Like every other trustee, the Government trustee is
required to know at every moment what assets are held in trust, how
those assets are invested and managed, and to whom the proceeds of that
management belong and are to be paid.
The Government's fiduciary duties with respect to the Indian trust
assets it holds are separate and apart from the government's treaty
obligations to the numerous individual tribes. The Secretary's
fiduciary relationship exists directly between the Secretary as
trustee-designate and the tribal or individual beneficial owner. The
Secretary's trust responsibility, as set forth in the Mitchell II
decision of the Supreme Court as well as the 1994 Act itself, is
essentially equivalent to the role of a private trustee, and is guided
by the ``rules that govern private fiduciaries''. The trust
responsibility of the government requires the use of a system of
motivating concepts and principles very different from those used in
the discharge of political, statutory or contractual obligations.
The Role of the Special Trustee
In essence, the 1994 Act provides that the Special Trustee would
monitor the historical accounting and oversee the reform of the trust
process for the benefit of tribal and individual Indian beneficiaries.
In doing so, the Special Trustee would be responsible to the Secretary
of the Interior and at the same time provide reports to the Congress on
the progress of these efforts. Essentially, the Act requires the
Special Trustee to provide the transparency necessary for the benefit
of the Congress as well as for the Secretary.
The Cobell class action litigation subsequently led to court-
mandated reporting to it by the Secretary on the progress of trust
reform. As part of that effort, the Special Trustee--who for a while
compiled the report on behalf of the Secretary and the Department--also
provided his observations on the progress of trust reform for the
benefit of the court. Both Congress and the court, therefore, have
looked to the Special Trustee to provide that transparency for
measuring progress toward trust reform.
Obstacles to the Special Trustee in Carrying out His Duties Under the
Act
The Special Trustee was not provided under the law with any direct,
line management of the trust reform. An exception to this was the
transfer by then Secretary Babbitt in 1996 of the Office of Trust Funds
Management (OTFM) from the Bureau of Indian Affairs (BIA) to the Office
of the Special Trustee (OST). In my view and that of others, OTFM
became the model for a fully functioning organization among those trust
reform projects the Department has undertaken.
The Special Trustee sought line authority over all aspects of trust
reform and, therefore, over those fiduciary trust activities spread
across the BIA and parts of the Minerals Management Service, the Bureau
of Land Management, and other organizations within Interior. Instead,
in mid-2000 Secretary Norton provided the Special Trustee with
``directive'' powers, that is., an ability to order changes for trust
reform where needed change was not being made by organizations within
the Department. The directive power granted by the Secretary, when
used, was subject to an appeal to the Secretary by the affected trust
individual or organization, but worse, as witness a directive issued by
the Special Trustee last year, subject to prolonged bureaucratic delay.
This was not a workable answer for effective organization change.
The Bureau of Indian Affair's middle management ranks, along with
some tribes, are seemingly adamant in their opposition to a separate
organization, even a separate chain of command, to promulgate the
government's fiduciary responsibilities. Interestingly enough, the
current Secretary late in 2001 proposed a plan (named BITAM) whereby
the entire trust responsibility of the Government would be placed into
a new and separate organization within Interior, withdrawing and
consolidating fiduciary trust functions from the BIA, OST and other
parts of the Department. The Special Trustee applauded that proposal as
potentially achieving the separate chain of command and the requisite
accountability for properly carrying out the trust responsibility. I
testified on February 6, 2002, before the House Resources Committee on
the Secretary's proposal as follows:
I concur with the Secretary's concept of a single
organizational unit responsible for the management of the
Indian trust assets. That organization has the potential of
addressing the accountability concerns by placing one
executive, responsible to the Secretary, in charge of the
delivery of the appropriate, required trust services to tribes
and individual Indians. I believe a single organization with
its own chain of command, that is, not diluted by intersecting
other Departmental chains of command, can work better than the
present arrangement. The devil, however, is in the details, and
the new organization must have the right executive direction
and actually hold people accountable. (Emphasis added)
You cannot continue to assign the task for overhauling trust reform
to the same people and organizations that have failed in that
assignment before.
The tribes often can be an obstacle to trust reform: In the lengthy
tribal consultation process that followed the Secretary's proposal
announcement, it became quite clear that the tribes--themselves
beneficiaries of the Trust--did not want the fiduciary trust function
removed from the BIA at all. Nor did they even want the regional
directors and agency superintendents removed from the fiduciary trust
chain of command--an essential separation to eliminate potential
conflicts of interest with the trust beneficiaries and assure
dedication to the trust obligation.
The consultation meetings also highlighted another often-
misunderstood aspect of the Indian trust responsibility: The trust
responsibility is really two categories of responsibilities. One can be
labeled as the ``fiduciary'' trust responsibility that refers to the
duty to account for the trust assets (land and moneys primarily) that
in turn provide income to the beneficiaries. The other trust
responsibility is a broader one derived from treaty and law, and is the
obligation of the government relative to providing social services,
education, roads, police protection, etc. to Indian tribes and
individuals--the non-fiduciary trust duties, if you will. The fear on
behalf of the tribes appears to be that the BIA may be gutted by
withdrawal of the fiduciary responsibilities and, thus, somehow the
honoring of the broader trust responsibility may be jeopardized.
Thus, the dilemma facing the Secretary is this. On the one hand, in
order to accomplish fiduciary trust reform, the strong management and
accountability that are required are best accomplished by a separate
organization for fiduciary trust within the Department, or even better,
outside the Department altogether. On the other hand, such separation
of trust responsibilities appears to be alien to many tribes. As-is
often heard, the tribes seem to have trouble living with the BIA, but
are reluctant to be without it. It is also apparent, incidentally, that
to date individual Indian beneficiaries don't have much of a voice in
the consultations nationally.
The Special Trustee should be embraced by the Secretary to assist
him or her to direct reform and effect change. Surprisingly that has
not happened. The reason for that resistance by the Secretary appears
to be the reluctance to tolerate the transparency of actual trust
reform progress, presumably because such candor may complicate the
Secretary's effort to defend against the current ``show cause''
litigation in the contempt trial. Furthermore, the Special Trustee has
not been perceived as ``a part of the team'' when he has been obligated
to respond honestly on the state of trust reform to Congress--and the
Court. In fact, the Special Trustee in at least recent months has often
been excluded from trust reform meetings with the Secretary and most
senior Department officials. It appears, instead, that the intent of
the Department management is to isolate the Office of the Special
Trustee.
Another obstacle to trust reform and to the Special Trustee has
been the attempt to diminish the standard of the government's trust
duty itself. For whatever reason--litigation or otherwise--there
appears to be considerable reluctance in both the last and the present
administrations to acknowledge the high standard of trust duty required
of the government as the Trustee under various laws and Supreme Court
decision--even to include the Secretary's Trust Principles in the
Department's manual. In testimony to this Committee this year, the
administration has not defined the government's trust responsibility
when requested and instead looks to the possible weakening of the trust
duty by the Supreme Court with the two trust cases before it now.
Recommendation
There is no reason that the Department--with the Secretary's
leadership--cannot recognize and demand compliance with the trust duty.
There appears to be no political will to ensure compliance with the
government's trust obligation.
Only a single, direct line chain of command for all personnel
supporting the trust activities has a chance of succeeding. Only the
Special Trustee with her/his legal responsibility, trust experience and
Congressional obligation is best positioned to exercise the required
authority on behalf of the Trustee-designate, but the Special Trustee's
position doesn't have that line authority.
In my opinion, the Department is incapable of executing trust
reform and, indeed, even knowing what and how to do so, or to provide
the experienced, competent people resources needed in many cases. More
than being incapable, there is often a seeming unwillingness to adhere
to the trust principles of the 1994 Act and the Department's own
manual, as well as to hold people accountable for their actions with
consequences for poor performance.
I have come to the conclusion, therefore, that it is important to
have a strong oversight role outside the Department, responsible to the
Congress, and headed by an experienced trust management executive
advised by a board of trust experts and Indian leaders. In a sense,
this is the Office of the Special Trustee as established by the 1994
Act--but placed outside the Department. This executive oversight
position and the attendant organization need to have the ability to
require change when needed changes by the Department itself are not
forthcoming.
There are some instructive models available in the form of
government-sponsored enterprises that have addressed issues of public
policy in other venues such as the failures of many savings and loan
institutions a few years back. Such outside authorities can provide for
eventually returning the trust operations to the Department at such
time as the systems, procedures, records, and the leadership are ready
and the Department exhibits the ability to carry on with the fiduciary
trust responsibilities.
Thus, in my opinion, trust reform is never going to happen until
there is an authority outside the Department that can compel compliance
with the government's trust duty and demand accountability. The most
recent decision of the DC District Court, which stopped short of
appointing a receiver, hopefully will enforce the enactment of trust
reform. That solution will succeed only, in my opinion, if the
Department is forced to comply with needed change.
Thank you, Mr. Chairman and members of the committee, for the
opportunity to present these remarks today.