Bill aims to improve management of Indian trust funds

A bill introduced in the Senate Friday aims to increase accountability for Indian trust fund management at the Interior Department by encouraging tribes to manage their own accounts and by appointing a deputy secretary to oversee trust reform.

The bipartisan legislation (S. 2212) would make it easier for tribes to develop plans for managing their own trust funds and would create a deputy secretary for trust management and reform and a new Office of Trust Reform Implementation and Oversight at the Interior Department. A deputy secretary appointed by the president would lead the new office for a six-year term.

"This legislation is intended to advance the current efforts of tribes and the Interior Department to identify and implement reforms regarding the management of trust funds and assets," said Sen. John McCain, R-Ariz., who introduced the legislation with Senate Majority Leader Tom Daschle, D-S.D. and Sen. Tim Johnson, D-S.D.

The Office of the Special Trustee for American Indians now oversees trust reform efforts. The Senate bill would require the special trustee and the assistant secretary for Indian affairs to report on trust fund issues to the deputy secretary for trust management and reform.

Trust fund accounts were set up more than a century ago to compensate American Indians for the use of their land. Currently, the Bureau of Indian Affairs in the Interior Department manages about 1,400 tribal accounts and 300,000 individual trust accounts. The agency is responsible for sending checks to Indian trust beneficiaries, who rely on trust funds for basic living necessities.

Allegations of mismanagement of the BIA trust accounting system have plagued the agency for years, culminating in a 1996 lawsuit filed against Interior by Elouise Cobell, founder and current chairwoman of the Blackfeet National Bank.

The Indian Trust Fund Management Reform Act of 1994 gave Indian tribes the authority to submit plans to withdraw some or all of their trust accounts managed by the Interior Department and largely absolved the government of any responsibility for withdrawn funds (Title 25, Section 4022). The proposed legislation would give Indian tribes more discretion in designing and implementing their trust fund management plans. If a tribe chooses not to develop or implement a plan, the bill would require the Interior secretary to do so in close consultation with the tribe.

Approved plans would not require the government to give up any trust responsibility, and Indian tribes would not be liable for the waste or loss of trust funds if they act in accordance with their plans.

"Many Indian policies of the past have failed because they don't allow the intended beneficiaries, the tribes and individual Indians, a role in shaping solutions," McCain said.

In November 2001, Interior Secretary Gale Norton unveiled plans to create a new Bureau of Indian Trust Assets Management to oversee reform of the department's troubled trust accounting system. The new bureau, headed by an assistant secretary, would consolidate the duties currently performed by several offices, including the Bureau of Indian Affairs.

But during a hearing in February before the House Committee on Resources, American Indian leaders said the Interior Department's proposal would undermine tribal authority and only add more bureaucratic layers to an already mismanaged program.

The Interior Department is working with Indian tribes on ironing out various trust fund reform proposals, including the administration's reorganization plan. "My purpose is not to supercede those discussions, but to introduce a placeholder bill that can be modified by their recommendations," McCain said.

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