INTERTRIBAL MONITORING
ASSOCIATION on Indian Trust Funds
Phone: 505/247-1447
Fax: 505/247-1449 e-mail:
itma@itmatrustfunds.org
ANALYSIS
2003 ITMA Trust Reform Draft Bill
in Relation to
50 Principles of the Trust Reform & Cobell Settlement
Workgroup
and
S.1439 - Indian Trust Reform Act of 2005
_________
I. INTRODUCTION
This comparison document is being submitted to
analyze the Intertribal Monitoring Association – National Congress of American
Indians ("ITMA–NCAI") driven Trust Reform & Cobell Settlement Workgroup's
final product announcing 50 principles to guide Congress in developing
legislation to comprehensively resolve the nine year Cobell litigation and
reform the federal government’s systems for tribal and individual trust
management and compare these principles to the work product produced by ITMA
two years ago on similar issues.
In analyzing these principles, it is quite evident
that ITMA’s prior work and efforts in crafting legislation and educating
lawmakers and Tribal Leaders on the prevalent trust reform concerns and priorities
have made a significant impact in this discourse. This memorandum analyzes how ITMA’s prior and
continuing efforts have contributed to the overall trust reform movement
including its specific efforts to address issues relative to reforming the
Individual and Tribal Trust Systems, which account for nearly half of the
workgroup’s principles.
Before discussing the specifics of this analysis,
this memorandum provides pertinent background information summarizing key
events that influenced ITMA's draft bill, including ITMA's joint efforts with
NCAI and working directly with Tribes, as well as key points of discussion with
Administration officials in the Department of the Interior, and ITMA’s work
with Congress. Finally, this memorandum
briefly touches on the S 1439, the Indian Trust Reform Act of 2005, introduced
on
II. BACKGROUND
Although tribally driven initiatives to improve
federal management of the Indian trust have occurred for many generations and
with respect to ITMA's involvement date back to its establishment in 1990, for
purposes of this memorandum, the relevant time frame dates back to the latter
part of 2001, immediately prior to the commencement of the 108th
Congress.
A. BITAM
In December 2001, Secretary of the Interior Gale Norton unveiled the
Department's plan to reorganize its Indian trust functions principally through
the creation of a new "Bureau of Indian Trust Asset Management"
(“BITAM”). Indian Tribes across the
country universally objected to the BITAM plan opposing its separation of
trustee duties into “trust” and “non trust” categories which Tribes believed
would effectively dismantle the Bureau of Indian Affairs.
Tribal Leaders nationwide viewed the BITAM plan as a
means of diminishing the federal government’s trust relationship with Indian
Tribal Governments. The Department,
however, defended its BITAM plan as a necessary, corrective way to improve its
management and administration of the Indian trust. Furthermore, the Department explained that it
was under accelerated pressure to take immediate action due to the Cobell class action lawsuit filed on
behalf of Individual Indian Monies (IIM) account holders against the federal
government relating to the government’s historic mismanagement of the IIM
trust.
B. JOINT DOI-TRIBAL LEADERS TASK FORCE ON TRUST REFORM
Immediately following the announcement of the BITAM
plan, Tribes mobilized their efforts to oppose BITAM’s implementation and
eventually committed to working with the Interior Department on mutually
acceptable alternatives. As a result the
“Joint Department of Interior/Tribal Leaders Task Force on Trust Reform” was
established in early 2002. For nearly 10
months, the Task Force held monthly meetings nationwide to discuss trust reform
priorities among the Tribes and to jointly work on a legislative proposal to
present to Congress. The Task Force
produced a draft bill, but the Tribes and the Department maintained serious
difference on a number of issues.
From the inception of the BITAM movement, the ITMA
actively monitored and participated in all facets of the Administration’s
proposal to revamp the Department’s administration of the Indian trust. ITMA analyzed and objected to the BITAM plan,
and had a lead role in developing the Tribes’ initial guiding principles for
engaging in the trust reform discussion with the Department. ITMA attended every meeting of the Task Force
and was a core part of the legislative drafting process. This activity consumed most of 2002.
Following nearly 10 months of intensive discussions,
the Task Force reached an impasse over several key issues in the legislative
proposal. For instance, the Department
was not willing to agree with the concept of independent oversight of its
Indian trust administration and management functions, would not agree to the
creation of an Office of Deputy Secretary for Indian Affairs, rejected any
enforcement provisions to compel compliance in its management of trust funds
and resources, and flatly rejected the establishment of statutory fiduciary
standards given its current broken system.
The Task Force could not reach consensus on a couple of other key components
and the effort stalled and eventually fall apart.
C. ITMA-NCAI TRUST REFORM LEGISLATIVE DRAFTING INITIATIVE
Although the Task Force’s efforts were not successful, Tribes continued in
their determination to defeat the BITAM plan.
At ITMA's October 2002 Annual Meeting, our membership directed that ITMA
draft a trust reform bill. The following
month, at NCAI's November 2002 Annual Session, NCAI and ITMA decided to join
forces in drafting a Tribal trust reform legislative proposal.
A Tribal legislative drafting workgroup immediately formed
comprised of attorneys, Tribal Leaders and consultants. The workgroup met numerous times over the
next few months and focused on subjects previously discussed and debated by the
Joint Department of the Interior/Tribal Leaders Task Force on Trust Reform. The workgroup also incorporated many of the
concepts included in S. 175, the “Indian Trust Asset and Trust Fund Management
and Reform Act of 2003” introduced by Senator McCain along with Senator Daschle
and Senator Johnson on
As a result of the workgroup’s efforts, the ITMA-NCAI
Joint Trust Reform draft bill[1]
was created to meet the primary objectives and priorities of Tribes that
participated in the Joint Task Force efforts, and in response to the input of
Tribes nationwide. ITMA also took into
consideration its discussions with the respective authorizing committees –
House Resources Committee and Senate Indian Affairs Committees, as well as its
dialogue with the offices of Senators McCain, Daschle and Johnson, the sponsors
of the then-newly introduced trust reform bill, S. 175, Indian Trust Asset and Trust Fund Management and
Reform Act of 2003.
D. CONGRESSIONAL DYNAMICS IN THE 108TH CONGRESS
Throughout 2003, ITMA’s immediate goal was to
continue its course in briefing Tribes about the draft bill and securing their
input in order to gain broad Tribal support.
At the same time, ITMA continued to consult with the respective Senate
and House authorizing committees and others to secure sponsors for the bill’s
formal introduction. The primary targets
for introduction were Senator Campbell and Senator Inouye, Chairman and Vice
Chairman of the Senator Indian Affairs Committee, respectively.
In the House, potential sponsors were Congressman Don
Young (R-AK) and Congressman George Miller (D-CA), formerly the Chairman and
Ranking Member of the House Resources Committee, respectively, both of whom
remained as senior members of the Committee.
Based on ITMA’s prior work and strong relationships with Young and
Miller and their staffs, ITMA was successful in securing their agreement to
introduce and guide the legislation in the House. In addition, ITMA stayed in close contact and
communication with Congressman Nick Rahall, Ranking Member of the Committee,
who also committed to helping our efforts. Finally, ITMA quickly engaged the
newly-appointed Chairman of the House Resources Committee Richard Pombo (R-CA).[2]
On
In various meetings, hearings and other public
events,
With these developing and evolving considerations in
mind, ITMA took a lead role in holding a series of Tribal meetings around the
country to discuss the draft bill and to solicit the input of Tribes to further
refine and improve our draft bill. ITMA
also led the tribal workgroup in its efforts conducting a series of briefings
on the draft bill with the Senate Indian Affairs Committee and the House
Resources Committee, as well as with the offices of Senators McCain, Daschle
and Johnson. Most of this activity
occurred through 2003.
During this timeframe, ITMA maintained a constant
presence and high visibility with Congress in advancing a purely Tribal trust
reorganization legislative proposal. In
fact, primarily as a result of these efforts, on
Again, given the sensitive, political dynamics at
play, ITMA decided to defer endorsement of S. 1459, in favor of continuing to
pursue the support of Chairman Campbell to introduce our bill, which many
believed, would be key to Committee advancement and future enactment.
In the summer of 2004, ITMA focused its efforts to
secure a hearing before the Senate Indian Affairs Committee as a way to spur
introduction of our proposal. When a
hearing did not materialize that summer, Committee staff informed ITMA that a
hearing could possibly occur in the fall of 2004. During this time frame and consistent with
Campbell's trust reform plan, the Senate Indian Affairs Committee and the House
Resources Committee participated in an intensive mediation process with the Cobell plaintiffs and the Department of
Interior for the purposes of reaching a negotiated settlement to end the
lawsuit. This process consumed a
considerable amount of the Committees’ time and energy, as well as that of the Cobell plaintiffs and counsel.
In spite of ITMA’s tremendous amount of work with
Tribal Leadership and Congress, by the end of the 108th Congress in
2004, ITMA did not get the hearing we requested nor was our draft bill formally
introduced in either the House or Senate.
Of the
E. Activity
in the 109th Congress
In 2005, ITMA resumed its efforts to secure meaningful tribally driven
trust reform legislation. To spearhead
the advancement of a Tribal trust reform agenda in the 109th
Congress, ITMA Chairman and staff met in January with the Senate Indian Affairs
Committee staff. We discussed movement
of the ITMA draft bill and ways to advance our interests with the new Senate
Indian Affairs Committee leadership.
With Senator Campbell’s retirement at the end of the 108th
Congress, Senator McCain became the Chairman of the Indian Affairs Committee,
and Senator Dorgan became the Vice Chairman following Senator Inouye’s
departure from this post. House
Resources Committee Chairman Richard Pombo and Ranking Member Rahall expressed their
intention to focus on these issues and work toward a legislative resolution.
In contrast to the Senate Indian Affairs Committee’s
piecemeal approach in the 108th Congress to separately consider the
various trust reform components, early indications from both House and Senate
Committees indicated their preference in the 109th Congress to work
towards a comprehensive resolution of these issues, including resolving Cobell and reforming the federal
government’s systems for tribal and individual trust management. Towards this end, ITMA and NCAI once again
joined forces and included the Cobell
plaintiffs to advance a comprehensive trust reform approach in the 109th
Congress. Specifically, ITMA and NCAI
formed a workgroup composed of the Cobell
Plaintiffs, Tribes, individual Indian allottees, and Indian organizations whose
mission was to establish discrete principles that would guide the drafting of
legislation to comprehensively address trust reform and Cobell settlement in a prompt and fair manner.
The approach to draft and submit trust reform
principles rather than a legislative proposal was apparently undertaken in
response to a request by the Senate Indian Affairs Committee leaders McCain and
Dorgan, and the leaders of the House Resources Committee, Pombo and Rahall. It was widely reported that these lawmakers
asked Indian Country to provide a set of principles that would guide the
lawmakers’ drafting of legislation.
Following months of meetings and securing input from
Tribal Leaders, on
In analyzing these
principles, it is quite evident that ITMA’s prior work and efforts in crafting
its draft bill and educating lawmakers and Tribal Leaders on the prevalent
trust reform concerns and priorities has made a significant impact in this
discourse.
Throughout the 108th Congress (2002-2004),
ITMA remained vigilant in advocating for the interests of its member Tribes and
promoting a Tribal proposal that had been thoroughly vetted throughout Indian
country. As detailed above, ITMA worked
very closely with Tribal Leaders and many key congressional committees and
offices in strategically crafting a proposal in light of the sensitive
political dynamics in Congress. The
protection, promotion and enhancement of Tribal Sovereignty guided the
development of the draft bill. Some of
the key highlights include:
·
Acknowledging in Congressional findings the inherent
sovereign authority of Tribes predating the U.S. Constitution and which forms
the backdrop for the unique political and legal trust relationship between the
·
Creating a single line of authority in the Department of
Interior to oversee and supervise the management and reform of Indian trust
funds and assets.
·
Codifying general trustee standards for the Secretary to
follow when administering and managing Indian trust funds and assets.
·
Revising certain auditing and accounting requirements in the
American Indian Trust Reform Management Act of 1994.
·
Establishing specific duties of the Secretary to follow when
administering or managing both trust resources and "fund-generating"
resources.
·
Requiring the Department of the Interior to fully integrate
the title and recordation systems that account for tribal trust assets.
·
Creating a statutory framework allowing Tribes to develop
flexible trust fund and resource management plans to strengthen Tribal
governance through a Tribe's territory.
·
Establishing within the Department of the Interior a Deputy
Secretary for Indian Affairs to be comprehensively responsible for trust reform
thereby effectively eliminating the Office of Special Trustee and integrating
all Indian trust functions.
·
Establishing an independent oversight entity to oversee and
empowered with discrete functions to compel the Department’s proper
administration and management of the Indian trust.
Given the trust reform course charted by the Senate
Indian Affairs Committee to separately address trust reform issues, ITMA's
draft bill did not address probate or fractionation issues. Moreover, based on the position of the Cobell plaintiffs in opposition to
legislation that affected their interests, the draft bill did not address the
settlement or resolution of federal mismanagement of IIM accounts. And finally, the draft bill did not include
the settlement or resolution of tribal trust fund mismanagement lawsuits
because ITMA was in the process and has continued to work on a separate track
regarding these issues.
IV. ANALYSIS OF
THE ITMA DRAFT
The following discussion
analyzes how ITMA’s draft bill addressed many of the objectives of the
workgroup’s principles, in particular, those relating to reforming the
government’s management of trust resources and assets which account for nearly
half of the workgroup’s final product.
Accordingly, the relevant trust reform principles are listed below along
with the workgroup’s respective rationale followed by a discussion of how
ITMA's draft bill addresses or incorporates the essence of both.
1. PRINCIPLE (14)
- Legislation
should affirm and clarify the specific standards for the Administration of
trust funds and transactions that involve those funds which prescribe what
needs to be done, but not how to do it.
RATIONALE - Standards should be specific and clearly stated in
legislation. By setting specific
standards, the Department will know exactly what the expectations are in
managing the trust. The legislation
should make clear that the trust responsibility would not be diminished.
ITMA
The draft bill also requires the Secretary
to submit to an annual review of the performance of her administration of the
trust fund management duties and responsibilities for management programs,
operational systems, and information systems.
With regard to the rationale that trust
reform legislation should not diminish the trust responsibility, the draft bill
includes the following provision: “ The enumeration of specific standards and
duties in the Act shall not relieve the Secretary of fiduciary duties applicable
to the administration of Indian trust funds and trust assets, and is not
intended to reverse or repeal existing federal statutory or regulatory laws
applicable to the United States' administration of Indian trust funds and trust
assets, except as expressly authorized in this Act.”.
2. PRINCIPLE (15) - To the extent practicable, the legislation should establish
resource-specific, generic standards where possible (e.g. sustained yield
requirements for Indian timber).
RATIONALE - An example of this principle
can be found in the National Indian Forest Resources Management Act and the
American Indian Agricultural Resources Management Act. Both of these acts have “standards
provisions” that are specific to these resources.
ITMA
3. PRINCIPLE (16)
-
Legislation should clarify that fulfillment of fiduciary duties must be
administered in accordance with applicable law, including tribal law.
RATIONALE - The National Indian Forest
Resources Management Act and the American Indian Agricultural Resources
Management Act both have provisions that expressly require the Secretary to
abide by tribal laws in exercising his/her duties. A similar provision should be included in any
trust reform/settlement bill.
ITMA
Similarly, the draft bill includes
provisions requiring the Secretary to administer
trust resources in accordance with: (i) any standards, goals, and objectives
set forth in duly approved tribal resource management plans; and (ii) all
applicable tribal laws and ordinances, expect in specific instances where such
compliance would be contrary to applicable federal law.
In recognition of the varying types of
government to government relationships between Tribes and the federal
government, the draft bill also establishes an important framework for the
fulfillment of specified duties consistent with fiduciary standards in the
management of trust assets and resources, including those directly provided by
the federal agencies or those administered by Tribes through P.L. 93-638
self-determination contracts or compacts.
Indeed, a significant amount of the work in crafting the draft bill was
to create a flexible framework for tribal participation in trust resources
management in a manner that meets fiduciary trust standards while protecting,
promoting and enhancing Tribal sovereign governance. Specifically, in codifying fiduciary
standards, the draft bill includes provisions that require the Secretary to
carry out trust management duties in a manner that:
(A)
Promotes the interest of the beneficial owner
except where inconsistent with tribal law;
(B)
Supports, to the maximum extent practicable the beneficial
owner's intended use of the assets;
(C)
Complies with applicable law including the laws
of the Tribe having jurisdiction over a trust asset; and
(D)
Promotes and protects tribal control, governance,
and self-determination over trust assets of tribes and individual Indians.
4. PRINCIPLE (17) - The legislation shall codify the applicability of the following
duties to the Indian Trust:
a.
Duty of loyalty and candor
b.
Duty to Keep and Render Accounts
c.
Duty to Exercise Reasonable Care and Skill
d.
Duty to Administer the Trust
e.
Duty not to Delegate (this does not negatively impact
compacting or contracting.)
f.
Duty to Furnish Information
g.
Duty to Take & Keep Control
h.
Duty to Preserve the Trust Property
i.
Duty to Enforce Claims and Defend Actions
j.
Duty to Keep Trust Property Separate
k.
Duty with Respect to Bank Deposits
l.
Duty to Make Trust Property Productive
m.
Duty to Pay Income to Beneficiaries
n.
Duty to Deal Impartially with Beneficiaries
o.
Duty with Respect to Co-Trustees
p.
Duty with Respect to Persons Holding Power of Control
RATIONALE – None.
ITMA
5. PRINCIPLE (18) - The legislation should state that in the absence of more specific
statutory law or specific agreements between the trustee and the beneficiary,
common law duties shall govern the administration of the trust.
RATIONALE - The law on trusts applies to the management of
trust assets for Indian beneficiaries.
The legislation should clearly state this so that the Department of
Interior knows the scope of its duties in administering the trust for Indian
beneficiaries.
ITMA
(A ) Promotes
the interest of the beneficial owner except where inconsistent with tribal law;
(B) Supports,
to the maximum extent practicable the beneficial owner's intended use of the
assets;
(C ) Complies
with applicable law including the laws of the Tribe having jurisdiction over a
trust asset; and
(D) Promotes
and protects tribal control, governance, and self-determination over trust
assets of tribes and individual Indians.
6. PRINCIPLE (19)
- The
legislation should reaffirm that Indian beneficiaries have a cause of action in
federal courts for breach of fiduciary duties and granting of equitable and
legal relief.
RATIONALE - The Department of Interior
is the trustee of lands, natural resources, and trust funds for Tribes and
individual Indians. These beneficiaries
must have the right to redress if the trustee fails to meet its trust duties.
ITMA
7. PRINCIPLE (20) - An independent Executive Branch entity is needed to provide
oversight and enforcement authority for federal trust administration.
RATIONALE - The Department is engaged
in trust management of assets and resources.
Consequently, the Department is subject to strict fiduciary standards
just as any private trustee is subject to such standards. Private trustees are subject to State and/or
Federal regulation. The reasoning giving
rise to government oversight of private trustees also applies to the Department
in exercising its trust asset/resource management duties. There is an inherent conflict in
self-regulation. Thus, an independent
entity with oversight and enforcement authority over the Department of Interior
is needed.
ITMA
8. PRINCIPLE (21) - The independent Executive Branch entity should not diminish the
inherent sovereign authority of tribal governments to make their own laws, nor
should it interfere with tribal management of tribal land and other tribal
resources where Tribes assume these responsibilities through self-determination
contracting or compacting.
RATIONALE - There is some concern
that an independent entity could impact a Tribe’s ability to make their own
laws and be governed by them.
Specifically, Tribes are concerned that an independent entity could
impact a Tribe’s ability to enact land use laws. Management of trust assets/resources should
be executed in conformance with tribal laws.
ITMA
9. PRINCIPLE (22) - The legislation should prohibit the independent Executive Branch
entity from engaging in any trust management functions.
RATIONALE - The historical function of the BIA is trust asset/resource
management. Any entity that oversees
trust management cannot actively manage the trust as this would also create a
conflict of interest. An independent
entity’s functions must be limited to oversight and enforcement functions.
ITMA
10. PRINCIPLE (23) - The legislation should require that the independent entity be
separate from the Department of the Interior and not under its control.
RATIONALE - Again, a trustee cannot
regulate itself. This also means that a
sub-entity of the Department cannot regulate the Department. An independent regulatory entity necessarily
means complete autonomy from the Department.
ITMA
11. PRINCIPLE (24) - The legislation should charge the independent entity with
ensuring that proper audits are conducted in accordance with generally accepted
auditing standards. The independent entity should then be required to review
the audits and ensure that corrective measures are taken.
RATIONALE - Audits ensure that trusts
are properly managed and that accounts are accurate. When the audit reveals that the accounts are
not accurate or that they have not been properly managed, then corrective
measures can and should be taken. The
trust managed by the Department of Interior should be subject to the same
scrutiny as private trust which is subject to regulatory audits.
ITMA
The
Commission shall receive and review any audit or review completed by the
Department or the Inspector General relating to Indian trust funds. The Commission shall provide recommendations
to the Deputy Secretary on appropriate actions, if any, that should be taken in
response to the audit or review.
Further, the Commission may request the Inspector General or the General
Accounting Office to examine any audits or reviews regarding the Indian Trust
completed by the Department. Further,
the Commission shall inform the affected Tribe regarding any evidence of
nonfeasance or malfeasance discovered by the Commission.
The draft bill
also empowers the Commission to monitor the Department’s compliance within
applicable regulations required by this bill, and to take “any corrective
actions agreed to by the Secretary.”
Moreover, the draft bill directs the Commission to “review any annual
performance audit prepared with respect to the Indian trust fund management
functions of the Department.” Finally,
the draft bill authorizes the Commission to “review the annual budget proposal
of the Department and report to the Congress as to the adequacy of resources
requested to manage the Indian trust in accordance with the standards adopted
in this Act.
12. PRINCIPLE (25) - The legislation should require the independent entity to be
governed by presidential appointees for five year terms from a list of
nominated candidates.
RATIONALE - Five year terms signal that the appointee is not
necessarily beholden to the President that appointed him/her.
ITMA
13. PRINCIPLE (26)
- Legislation
should create the permanent position of the Deputy Secretary to be responsible
for Indian Affairs including the management and administration of the Indian
trust.
The trust functions of
RATIONALE - There has been widespread support among Tribes and the
Department on the creation of a Deputy Secretary of Interior for Indian
Affairs. A similar proposal for a Deputy
Secretary is included in S. 1459. The
creation of this position would address a major issue that has been raised in
every significant study of trust management at Interior, including the
ITMA
14. PRINCIPLE (27)
- Legislation
should require that tribal leaders be consulted with respect to the appointment
of the Deputy Secretary and Indian preference shall apply to the Office of the
Deputy Secretary.
RATIONALE - The appointment of a Deputy Secretary that knows Indian
Country and its issues is critical to gaining the respect and confidence of
tribal leaders. Tribal leaders know who
is knowledgeable in regard to issues faced by Indian country and could provide
necessary expertise and insight concerning potential candidates for the
position. Indian preference requirements
have been intentionally avoided by the Office of the Special Trustee. Tribal leaders believe that OST has violated
Indian preference by failing to abide by it in employment and contracting. Thus, the legislation should remove all doubt
about the applicability of Indian preference to this office by expressly
stating that it applies.
ITMA
15. PRINCIPLE (28) - The legislation should expressly state that the Deputy Secretary
shall have the primary duty to fulfill the fiduciary duties of the Secretary of
the Interior and protect the interests of Indian beneficiaries including the
authority to employ independent trust counsel to advise on ensuring compliance with
trust duties.
RATIONALE - The legislation should expressly state this to make it clear
that the Deputy Secretary’s primary duty is to protect the trust of the Indian
beneficiaries. Independent trust counsel
is necessary so that the Deputy Secretary can consult counsel for the trust in
regard to the Deputy Secretary’s duty to the trust. Independent trust counsel would be especially
helpful to advise the Deputy Secretary when he or she has competing duties that
conflict with his or her trust duties
ITMA
16. PRINCIPLE (29) - The independent entity should assume the oversight
responsibilities of the OST and the Deputy Secretary should assume OST
management and administrative responsibilities.
Legislation should sunset the Office of the Special Trustee.
RATIONALE - The eventual elimination of OST is necessary for the
efficient and productive management of trust assets. OST was never created to manage trust assets
but to simply “oversee” the management of trust assets. Thus, the duty to manage trust assets should
be transferred back under the Deputy Secretary and the independent entity would
be charged with the responsibility of overseeing the management of the trust by
the Deputy Secretary.
ITMA
17. PRINCIPLE (30)
- The
legislation should not diminish the rights and responsibilities set forth in
the Indian Self-Determination Act.
RATIONALE - Pursuant to the Indian
Self-Determination Act, the
ITMA
18. PRINCIPLE (31) - With respect to federal laws relating to use or management of
tribal trust assets, legislation should
permit and support the development of tribal, reservation-specific plans that
provide specific standards for management of tribal trust resources.
RATIONALE - As mentioned above, the National Indian Forest Resources
Management Act and the American Indian Agricultural Resources Management Act
address tribal management of these resources.
The modern federal policy of tribal self-determination supports Tribes
having greater authority to manage their tribal trust assets.
ITMA
19. PRINCIPLE (32) - Legislation should protect the sovereign authorities and reserved
rights of Tribes to regulate the lands within their jurisdictions.
RATIONALE - In addition to federal laws that specifically provide for
tribal management of trust assets, Congress should respect the sovereignty and
reserved rights when considering the scope of legislation.
ITMA
20. PRINCIPLE (33) - Legislation should support government-to-government agreements
between a Tribe and the United States for management of all trust resources
within the Tribe’s jurisdiction, provided that the agreements ensure processes
and remedies to protect the interests of allottees, including allottees of
other Tribes.
RATIONALE - Tribes should have expanded opportunities to manage assets
in Self-Determination contracts and compacts.
ITMA
21. PRINCIPLE (34)
- Irrespective
of what entity is administering individual Indian trust assets, the same duties
and standards of conduct apply.
Notwithstanding, Tribes involved in self-determination or
self-governance management and administration can utilize alternative means to
carry out fiduciary duties so long as they meet the generally applicable
standards.
RATIONALE - The rights of individual Indians to the highest standards
of trust administration should not change, regardless of what entity if
administering them.
ITMA
22. PRINCIPLE (35) - Legislation should ensure that individual allottees can bring
claims for failure to discharge fiduciary duties in managing individual trust
assets.
RATIONALE - The management of individual trust assets must be
enforceable in court where mismanagement of those assets occurs.
ITMA
V. TRUST REFORM LEGISLATION IN THE 109TH CONGRESS
Today, Senator McCain introduced S. 1439, the Indian Trust Reform Act of
2005, which includes the following Titles:
·
·
Title II. Indian
Trust Asset Management Policy Review Commission
·
Title
·
Title IV. Fractional
Interest Purchase and Consolidation Program
·
Title V. Restructuring
Bureau of Indian Affairs and Office of Special Trustee
·
Title VI. Audit of
Indian Trust Funds
Of notable differences in S. 1439 relative to the work of the ITMA draft
bill, are provisions in Title
The structure of Title
For
those Tribes that decide to make prepare and application to participate in the
program, the bill requires that they follow an application and review process to
demonstrate that their Tribal management plan meets five (5) substantive
requirements set forth in the act, including:
In
addition to these requirements, a participating Tribe must also ensure that its
plan is not inconsistent with any of the act's provisions which detail "applicable
laws, standards; trust responsibility" – thereby effectively requiring
that the Tribe's plan comply with or include all of the following:
(i) Protect the trust
assets from loss, waste, and unlawful alienation.
(ii) Promote the interests
of the beneficial owner of the trust asset.
(iii) Conform, to the
maximum extent practicable, to the preferred use of the trust asset by the
beneficial owner, unless the use is inconsistent with a treaty, statute,
regulation, Executive order, or court decision referred cited in the plan.
(iv) Protect any applicable
treaty-based fishing, hunting and gathering, and similar rights relating to the
use, access, or enjoyment of a trust asset.
And
(v) Require that any
activity carried out under the plan be carried out in good faith and with
loyalty to the beneficial owner of the trust asset. And
Even if a Tribe meets the above requirements and satisfies
specific compliance with applicable laws, trust standards and the trust
responsibility, a Tribe's plan could nevertheless be subject to disapproval if
the Secretary determines that the "cost of implementing the proposed plan
exceeds the amount of funding available for the management of trust assets that
would be subject to the proposed plan."
Finally,
the bill's Tribal asset management plan provisions also include a number of
broad savings clauses regarding:
When read in its entirety, the legislation provides
no tangible benefits for the Tribe to participate in the Tribal asset
management program assuming a Tribe would be willing to expend the time, energy
and resources to develop a plan and comply with the approval procedures and
requirements.
The bill's only express incentive would limited to Tribes
that have already compacted or contracted activities or functions under the
Indian Self-Determination and Education Assistance Act. Accordingly, the bill provides that these
Tribes "may develop and carry out trust asset management systems,
practices, and procedures that differ from any such systems, practices, and
procedures used by the Secretary in managing the trust assets if the systems,
practices, and procedures of the Indian tribe meet the requirements of the
laws, standards, and responsibilities specified in the bill." However, given the broad savings clauses, the
legislation's framework for Tribal management plans do not confirm or expand a
Tribe's authority to regulate within its territory.
Clearly,
the bill not drafted to address the delicate jurisdictional concerns over
non-members and on fee lands within a Tribe's reservation or territory. Assuming that the bill had contained these
types of sovereignty protection measures, it is could be expected that a Tribe
would be willing to expend the time and resources to participate in this
program. However, because the bill's
Tribal trust asset management plan framework would subject Tribes to
additional, expensive and burdensome processes for Tribal management of trust
assets, it's difficult to determine what additional benefits a participating Tribe
would gain under this title that it doesn't already have under Indian
Self-Determination and Education Assistance Act or pursuant to its existing
inherent sovereign authority.
Another significant departure from McCain’s trust
reform legislation in the 108th Congress is the establishment of an
Office of Under Secretary in Title V.
McCain had previously advocated for the establishment of an Office of
Deputy Secretary and ITMA’s draft bill supported this concept. The reorganization provisions in s. 1439 contemplate
that the current Assistant Secretary for Indian Affairs would assume the Under
Secretary post. The provisions in Title
V also authorize the Under Secretary to supervise Indian affairs related
activities across affected Interior’s offices and bureaus, and require tribal
consultation.
The bill effectively terminates the Office of Special
Trustee as of
Of notable absence, however, is the inclusion of
trust standards to govern the Department’s management and administration of the
Indian trust. Instead, the bill imposes
the following general duties on the Under Secretary:
·
To manage and administer Indian trust resources in
accordance with any applicable federal law;
·
To take steps to protect the security of data relating to
Individual Indian and Indian Tribal Trust Accounts; and
·
To take any other measure the Under Secretary determines to
be necessary with respect to Indian affairs.
These requirements appear to be significantly "lean" compared
to the specific requirements and standards, including a determination that the
availability and sufficiency of funds, that a Tribe would have to meet under
the bill's Tribal asset management section.
At a minimum, the bill should also subject the Department to the same
requirements, duties, standards and certifications, especially in light of the
fact that the whole trust reform movement is for the purposes of address the
historic and ongoing federal mismanagement of the Indian Trust.
VI. CONCLUSION
The observations in this memorandum are preliminary and are specific to
provisions relating to the ITMA draft bill and are not intended to form a
position on the legislation recently introduced. ITMA and others will need to fully analyze
and carefully consider all of the provisions in this bill, and secure
additional input and recommendations from Tribal Leaders.
One of the purposes of this memorandum is to document ITMA’s recent
efforts in the trust reform arena.
Clearly, ITMA has been and continues to be at the forefront of these
very challenging, complex and politically delicate issues.
[1] For purposes of this memorandum, this draft bill is referred to as the “ITMA draft bill.”
[2] Prior to Pombo, the House Resources Committee
was chaired by Congressman Jim Hansen (R-UT), now retired, who, during his
short tenure as Chairman, conducted limited work on Indian affairs
matters. Given these circumstances, ITMA
had earlier calculated that its interests would be better served by having
Young and Miller lead the trust reform effort in the House based on their
longstanding experience and work with ITMA on these issues.
[3] On