IN THE UNITED STATES DISTRICT COURT FOR THE DISTRiCT OF COLUMBIA ELOUiSE PEP[ON COBELL, et al___:., ) ) ?_ - Plaintiffs, ) '-._ 7._ ) _._'.:::.:.: _::: v. ) Case No. 1:96CV012452.._. ) (Judge Lamberth) 'r_=':.. - r Z... GALE NORTON, Secretary of the Interior, et al., ) : : '7,-_' -_ :22 '. : _y_ · _... Defenda ) -_ _: ':':: nts. c:_ ,- DEFENDANTS' MOTION FOR PARTIAL SUMMARY JUDGMENT THAT INTERIOR'S TRUST MANAGEMENT PLAN COMPORTS WITH THEIR OBLIGATION TO PERFORM AN ACCOUNTING AND SUPPORTING MEMORANDUM OF POINTS AND AUTHORITIES The Secretary of the interior and the Assistant Secretary - Indian Affairs ("Interior Defendants") and the Secretary of the Treasury (collectively, "Defendants") move for partial summary judgment pursuant to Federal Rule of Civil Procedure 56(b) and Local Civil Rule 7. l(h), that the Interior Defendants' Fiduciary Obligations Compliance P. Ja!! (Jan. 6, 2003) ("Interior's Trust Management Plan"), comports with their obligation to perform an accounting. _ As argued in Defendants' appeal from, inter alia, the Court's September 17, 2002 Order holding them in civil contempt, Defendants are, respectfully, of the view that the Court lacks the authority to undertake a Phase 1.5 trial for the purpose of reviewing Interior Defendants' Trust Management and Historical Accounting Plans (whether or not in conjunction with Plaintiffs' plans) and thereupon entering injunctive relief dictating how they must comply with their _Pursuant to LCvR 7. I(h), Defendants have filed herewith their Statement of Material Facts As To Which No Genuine Issue Exists. '_ obligation to account to individual Indian money ("IIM") account holders. See Brief for the Appellants ("Appellants' Brief") (Dec. 6, 2002). In Defendants' view, such a trial, held for the purpose of entering the contemplated injunctive relief, would exceed structural and statutory limits on the judicial authority by specifying how Executive-Branch agencies must fulfill their legal obligations, rather than simply ordering them to do so. See id. at 29-33.2 However, as argued below, if the Court holds the Phase 1.5 trial, it should review Interior's Trust Management Plan solely to determine whether it describes an approach that comports with Defendants' obligation to perform an accounting; the Phase 1.5 trial provides no basis for inquiring into Defendants' management of the IIM trust as a whole. If the Court reviews Interior's Plan, it should rule that Defendants are "entitled to... judgment as a matter of law," Fed. R. Civ. P. 56(c), that the Plan describes an approach that comports with their obligation to perform an accounting. In stark contrast, Plaintiffs' Compliance Action Plan Together with Applicable Trust Standards ("Plaintiffs' Trust Management Plan") is utterly unrealistic, unlawful, and defective. Even to consider it would necessarily cause further delay in providing the required accounting because of its failure to address, much less attempt to resolve, the complex 2See also Merrick B. Garland, Deregulation and Judicial Review, 98 Harv. L. Rev. 505, 564-65 (1985) (stating that "because the essence of the executive function is the exercise of discretion, a court transgresses the separation of powers when it dictates that an agency take one particular action instead of others within its discretionary prerogative," but that "when a court merely orders an agency to act, leaving the choice of action to the agency's discretion, no trespass occurs"); Catherine Zaller, Note, The Case for Strict Statuto____Construction of Mandatory Agency Deadlines Under Section 706(1), 42 Wm. & Mary L. Rev. 1545, 1548 (2001) (observing that the Senate Judiciary Committee report of May 1945 on a draft version of the Administrative Procedure Act ["APA"], 5 U.S.C. §§ 551 et seq., "noted that the authority granted to the judiciary under the [APA's] judicial review clause did not allow the courts to strip agencies of discretion in determining how an agency should carry out legislation[;]... [r]ather, the Senate simply wanted . the court to direct the agency to act without dictating what process the agency should use" (internal citations omitted)). 2 issues - including statutory, congressional, budgetary, executive, and tribal - implicated by any process of trust reform. I. The Court Should Review Interior Defendants' Trust blanagement Plan Solely To Determine Whether It Describes An Approach That Comports With Defendants' Obligation To Perform An Accounting And Should Not Inquire Into Defendants' Management Of The IiM Trust System As A Whole The Plaintiffs "cannot treat the court as a grievance committee for the United States' mishandling of the trust. Whether plaintiffs like it or not, only Congress can play that type of role." CobelI v. BabbiJ!, 9I F. Supp. 2d 1, 7 (D.D.C. I999). Plaintiffs' claim is for an accounting, rather than for reform of the IIM trust as a whole. See 25 U.S.C. § 4011 (a) (requiring that Interior Defendants "account for the daily and annual balance of all funds held in trust by the United States for the benefit of... an individual Indian which are deposited or invested pursuant to the Act of June 24, 1938"); see also Cobell, 91 F. Supp. 2d at 24, 27 (stating that "plaintiffs' APA claims.., stem from the statutory right to an accounting" and that plaintiffs "seek to enforce their statutory right to an accounting"); Cobell v. Babbitt, 52 F. Supp. 2d 11, t8 (D.D.C. 1999) (acknowledging "the narrow issue involved in this case and the ultimate relief sought by plaintiffs - an accounting of their trust fund money."). Accordingly, in determining that it had jurisdiction over this litigation pursuant to the waiver of sovereign immunity contained in the Administrative Procedure Act ["APA"], 5 U.S.C. § 551 et seq., the Court was careful to specify that Plaintiffs' claim is only for an accounting and does not extend to Interior Defendants' general management of natural resources and trust assets. Because claims for mismanagement sound more in common law (a claim for money damages) than in equity (a claim for an accounting), and would thus be beyond the Court's jurisdiction under the APA, the Court struck the following references from Plaintiffs' Complaint: (1) 'iT]he true totals would be far greater than those amounts, but for the breaches of trust herein complained of.'...; (2) '[Defendants] have lost, dissipated, or converted to the United States' own use the money of the trust beneficiaries.'...; (3) 'and to direct [the defendants] to restore trust funds wrongfully lost, dissipated, or converted.'...; (4) 'Failure to exercise prudence and observe the requirements of law with respect to investment and deposit of IiM funds, and to maximize the return on investments within the constraints of law and prudence.' 30 F. Supp. 2d at 40 n.18 (quoting Plaintiffs' Complaint). For the same reason, Plaintiffs themselves have stated that "this action is not one to review the United States' management of the underlying trust assets." Plaintiffs' Revised Memorandum of Points and Authorities in Support of Motion for Class Certification at 6 (Jan. 14, 1997) (emphasis added). That the Court's focus must be on the required accounting, and not on Interior Defendants' management of the IEM trust as a whole, is confirmed by the 2001 decision of the United States Court of Appeals for the District of Columbia Circuit ("D.C. Circuit"). See Cobell v. Norton, 240 F.3d 1081 (D.C. Cir. 200[). It ruled that, because Plaintiffs' claim is for an accounting, the Court erred in holding that Interior Defendants had various non-accounting obligations, which they had breached. See id. at 1105 ("While there is a specific duty to provide a complete accounting, there is no specific duty to, for example, implement particular policies or retrieve information .... "). According to the D.C. Circuit, the Court is entitled to consider broader issues related to Interior Defendants' management of the ILM trust - such as whether they use "computer software capable of tracking and reconciling fund data" and whether they employ "staff sufficient to execute management duties," id. - only to the extent that the issues serve as evidence relevant to determining whether Interior Defendants have complied with their 4 obligation to perform an accounting, see id. at 1105-06 ("iT]hough the failure to take such steps may not constitute a breach, it... provides substantial evidence that such a breach has occurred."). As the Court explained, "it]he actual legal breach is the failure to provide an accounting, not [the] failure to take the discrete individual steps that would facilitate an accounting." Id..._=. at 1106. In so holding, the D.C. Circuit cautioned that "defendants should be afforded sufficient discretion in determining the precise route they take" in seeking to comply with their accounting obligation. 240 F.3d at 1106. This Follows From the fundamental principle of judicial review pursuant to the APA that courts "grant[] agencies that have acted in an unlawful manner 'discretion to determine in the first instance,' how to bring themselves into compliance." Id. at 1109 (internal citation omitted); see also Appellants' Brief at 29-33. That the Court must not interfere with Defendants' discretion is also due, however, to the fact that Plaintiffs' claim under provisions of the American Indian Trust Fund Management Reform Act of 1994, Pub. L. No. 103-412, 108 Stat. 4239 ("i994 Act"), is for an accounting, and not for reform ofltM trust management as a whole. In other words, because Plaintiffs' claim is for an accounting, rather than for reform of the individual Indian trust system, trust management is not reviewable as an end in itself. Accordingly, the D.C. Circuit made clear that it "expect[ed] the district court to be mindful of the limits of its jurisdiction." 240 F.3d at 1110. In this regard, the D.C. Circuit observed: It remains to be seen whether in preparing to do an accounting the Department takes steps so defective that they would necessarily delay rather than accelerate the ultimate provision of an adequate accounting, and the detection of such steps 5 would fit within the court's jurisdiction to monitor the Department's remedying of the delay; beyond that. supervision of the Departn!ent's conduct in ¢reDarin_ an .accgun.ti..ng may welt be beyond the district court's jurisdictign. Id_. (emphasis added). As this language suggests, the Court's focus must be on the Interior Defendants' "ultimate provision of an adequate accounting," and not on thc broader question of IIM trust management. Id__. Furthermore, in inquiring as to Interior Defendants' pro_ess towards complying with its accounting obligation, the Court may ask, at most, whether Interior Defendants have "take[nj steps so defective that they would necessarily delay rather than accelerate the ultimate provision of an adequate accounting." Id. Notwithstanding the D,C. Circuit's admonition, the Court ordered Interior Defendants on September 17, 2002 to file, inter alia, "a plan for bringing themselves into compliance with the fiduciary obligations that they owe to the lEVI trust beneficiaries," as to which it would then grant injunctive relief. Cobell v. Norton, 226 F. Supp. 2d 1, 148 (D.D.C. 2002). The Court specified that this Plan must "describe, in detail, the standards by which they intend to administer the IIM trust accounts, and how their proposed actions would bring them into compliance with those standards." Id.___:. at 148-49. According to the Court, it would examine Iuterior's Trust Management Plan and any plan submitted by Plaintiffs (as well as the litigants' respective Historical Accounting Plans), as part of a Phase 1.5 trial, based on which it would "consider granting further injunctive reliefwith respect to the fixing the system portion of the case and the historical accounting project." Id..__=. at 148. For the reasons outlined in Appellants' Brief, Defendants respectfully assert that the Court may not hold a Phase 1.5 trial for the purpose of entering an injunction dictating how Defendants must fulfill their trust management and accounting obligations, as this would exceed structural 6 and statutory limits on the judicial authority. See Appellants' Brief at 29-33. In addition, however, even if the Court pursues the Phase 1.5 thai, it should review Interior's Trust Management Plan solely to determine whether it comports with Defendants' obligation to perform an accounting, and not as a basis for inquiring into Defendants' management of the IEM trust as a whole. II. Because The Trust Management Plan Ordered By The Court Is Not Final Agency Action, The Court's Review Is Limited To Assessing Whether It Is So Defective That It Will Necessarily Cause Further Delay The Trust Management Plan filed by Interior Defendants on January 6, 2003, per thc Court's Order of September 17, 2002, is not final agency action. Thus, if the Court review s this Plan for the purpose of determining whether it comports with Defendants' accounting obligation, the Court must confine its review to the question whether the Plan, on its face, is so defective that it will necessarily cause further delay rather than accelerate performance of the required accounting. In its 2001 opinion in this litigation, the D.C. Circuit disagreed with this Court's holdings, see Cobell, 30 F. Supp. 2d at 33-34 and Cobell, 91 F. Supp. 2d at 36-37, that Interior Defendants' High Level Implementation Plan ("HLIP") was reviewable final agency action under the APA because - like the Trust Management Plan at issue here - the HLIP concerned reform of the entire IIM program, rather than a specific agency action. See Cobell, 240 F.3d at 1095. As explained by both this Court and the D.C. Circuit, the HLIP was a comprehensive plan for how Interior Defendants would manage the entire ILM trust system. See Cobell, 91 F. Supp. 2d at 14 (defining the HLIP as "Interior's most comprehensive plan to discharge its trust duties"); Cobell, 240 F.3d at 1091 (explaining that the HLIP is a plan that "focus[es] on ensuring the accuracy of information regarding the ItM trust accounts and developing uniform policies and procedures to guide trust management in the future"). Precisely because the HL[P was a comprehensive plan for managing the IIM trust as a whole, rather than a specific measure, the D.C. Circuit held: "While a single step or measure is reviewable, an on-going program or policy is not, in itself, a 'final agency action' under the APA." Id. at 1095. The rationale for this distinction between a reviewable "step or measure" and an unreviewable "program or policy" is the same as that underlying the limitations imposed on courts in reviewing agency action pursuant to the APA - namely, the constitutional principle of separation of powers. Se.._.xe Merrick B. Garland, Deregulation and Judicial Review, 98 Harv. L. Rev. 505,564 (1985) (stating that "because the essence of the executive function is the exercise of discretion, a court transgresses the separation of powers when it dictates that an agency take one particular action instead of others within its discretionary prerogative"). As the D.C. Circuit observed in concluding that the HLIP ,,,,'as not final agency action, "'[a] plaintiff.., seek[ing] wholesale improvement of la] program'" must do so, not "'by court decree,'" but rather '"in the offices of the Department or the halls of Congress, where programmatic improvements are normally made.'" 240 F.3d at 1095 (emphasis in original) (quoting Lujan v. NationaI Wildlife Fed'n, 497 U.S. 871,891 (1990)); see also 2 Richard J. Pierce, Jr., Administrative Law Treatise 1099-1103 (4th ed. 2002) (collecting cases distinguishing between reviewable actions and unreviewable programs). Because the Trust Management Plan ordered by the Court is, like the HLIP, a comprehensive plan for how Interior Defendants will manage the IIM trust, it is not final agency action. : As the D.C. Circuit ruled, until Interior Defendants have undertaken final agency action regarding their obligation to account, 3 this Court's supervisory authority is limited, at most, 4 to inquiring "whether in preparing to do an accounting the Department takes steps so defective that they would necessarily delay rather than accelerate the ultimate provision of an adequate accounting." Cobell, 240 F.3d at 11 I0. This follows from the well-established principle that, to the extent final agency action has not occurred, the only basis for judicial review under the APA is whether "agency action [has been] unlawfully withheld or unreasonably delayed." 5 U.S.C. § 706(t). Thus, because Interior's Trust Management Plan is not final agency action, the Court may review it at most for the purpose of determining whether it is so defective that it will necessarily delay Interior Defendants' pro_ess towards complying with their obligation to account. As demonstrated below, Interior's Trust Management Plan describes an approach that comports with Defendants' obligation to perform an accounting. Thus, by definition, it is not so defective as necessarily to cause delay. 3The D.C. Circuit suggested in its 200I ruling in this litigation that final agency action will occur - and thus may be reviewed by this Court - when the various accountings themselves are completed. Se..__e Cobel.______l, 240 F.3d at I 110 ("Presumably, the district court plans to wait until a proper accounting can be performed, at which point it will assess appellants' compliance with their fiduciary obligations."). 4The D.C. Circuit's exact language suggests that it was not certain whether even this limited inquiry would be permissible: "It remains to be seen whether.., the detection of such [defective] steps would fit within the court's jurisdiction to monitor the Department's remedying c of the delay .... "240 F.3d at 1110 (emphasis added). 9 . .' . III. Interior Defendants' Trust Management Plan Describes An Approach That Comports With Defendants' Obligation To Perform An Accounting In developing their Trust Management Plan, the Interior Defendants had to take into account not only the requirements of the 1994 Act and this case, but also co-existing statutory obligations, the obligafion to work within the parameters of the statutory and budgetary constraints imposed by Congress on this and ali other major policy initiatives undertaken by Interior, and the obligation to consult with tribes and consider tribal sovereignty and the priorities to be accorded to tribal rights of self-governance and self-determination. As discussed below, Interior's Trust Management Plan represents Interior's considered and expert judgment as trustee of the best means of harmonizing disparate - and, at times, competing - statutory, congressional, presidential, tribal, and trust interests and obligations while accomplishing the trust reform necessary to bring itself into compliance with its obligation to perform an accounting. Interior's Trust Management Plan minimizes further delay by anticipating and, to the extent possible, resolving potential issues associated with the statutory, congressional, tribal, and trust framework within which trust reform must be accomplished. Interior's approach is based on the recommendations of outside business experts, who first studied what has not worked in the past and then developed and recommended an organized, systematic process that stands a realistic chance of success. It is a process that is already well underway, and one about which the Interior Defendants have informed Plaintiffs, the Court, and Congress. The approach has current funding to continue. In sum, Interior's Trust Management Plan describes a realistic approach to trust reform to bring Interior into full compliance with its accounting obligation. And it has a realistic chance of funding. For all these reasons, and those I0 discussed below, the Court should determine, as a matter of law, that Interior's Trust Management Plan comports with the Defendants' obligation to perform an accounting. A: Overview Of Interior's Trust Management Plan Interior's Trust Management Plan details the processes underway to reform Interior's trust management operations. See Interior's Trust Management Plan at 17-100. Interior's trust reform is guided by "applicable federal statutes, Interior regulations, the Departmental Manual,[ 5] Office of Management and Budget (OMB) circulars, Department of Treasury guidelines, generally accepted accounting and auditing standards, its employees' and consultants' experience and expertise, as well as other sources of relevant fiduciary practices." Id. at 15. Interior's trust reform processes are not new and are not listed for the first time in its Trust Management Plan. They are underway, as has been reported to the Court progressively in Interior's Status Reports to the Court Numbers Eight through Eleven (" th Quarterly Report"). Interior's Trust Management Plan, like the Quarterly Reports, identifies the progress made to date and describes future reform tasks as part of a "comprehensive and systematic plan to reform the management of [Interior's] trust responsibilities." Interior's Trust Management Plan at 4. Development of the larger comprehensive trust management plan began in January 2002 as a follow-on to and replacement of the High-Level Implementation Plan. See Interior's Trust Management Plan at 4-5; Eighth Quarterly Report at 3-8, 15-17; Ninth Quarterly Report at 43- 5The Departmental Manual includes specific trust principles that apply to at._.21 of Interior's trust activities, including those activities described in Interior's Trust Management Plan. See 303 DM 2, Indian Trust Responsibilities - Principles for Managing Indian Trust Assets (Oct. 31, 2000) (copy attached as Ex. 1). It also details responsibilities and procedures for consulting with tribes and considering Interior's trust responsibility when preparing management plans. See 512 DM 2 (copy attached as Ex. 2). 11 55; Tenth Quarterly Report at 3-4, 32-39; Eleventh Quarterly Report at 3-4; 29-38. Interior's Trust Management Plan, as part of the comprehensive trust reform effort, has two key components. First, Interior will restructure and consolidate trust management and administration within the Bureau of Indian Affairs ("BIA") and the Office of the Special Trustee ("OST"), with BIA concentrating on managing the land and natural resources held in trust 6 and OST continuing to exercise its statutory trust oversi_t functions while assuming greater responsibility for financial management, receipt, and disbursement of trust funds and records management. Interior's Trust Management Plan at 5, 44-77, 81-82, Ex. 2; see also, e.g., Eleventh Quarterly Report at 29-30. Second, Interior is now finalizing its in-depth analysis of its current trust-related business practices throughout the country to determine all existing practices and variations (the "As-Is" study). Interior's Trust Management Plan at 6-9, 26-36; see also e._., Eleventh Quarterly Report at 4, 5-6, 29-30, 33-38. When this "As-Is" study is completed, Interior will develop a new model for conducting all future trust operations (the "To-Be" model) by adopting the existing best practices and re-engineering the ones that are not. Interior's Trust Management Plan at 9, 36-43; see also, e._&., Eleventh Quarterly Report at 3, 6, 29-30, 33-38. It is important to note that significant progress has already bee n made on a number of Interior's trust reform initiatives. For example, Interior is already substantially in compliance with one of the most significant components of any trust operation - one that directly relates to 6As noted in section I, above, Interior's management of Indian trust assets generally- as distinct from accounting for the funds in IIM accounts -is beyond the scope of this case. 12 the accounting obligation at issue in this lawsuit. Interior currently can reliably and predictably account for current funds received into and disbursed from the "Trust Funds Accounting System" ("TFAS"), a state-of-the-art trust accounting and investment system that is widely used in private trust operations, and that is subject to regular third-party trust audits. Interior's Trust Management Plan at 44-62; see also, e..__., Eleventh Quarterly Report at 64, 65. As Interior's Trust Management Plan notes, however, although TFAS can handle and account for all funds that flow in and that are disbursed, it is only as good as the information that flows into it, and it is the on-going process of identifying and collecting ILM revenues, verifying account and beneficiary data, transmitting information regarding receipts and disbursements, and improving related trust processes that is the focus of Interior's Trust Management Plan. Interior's Trust Management Plan at 3, 44, 46, 53. B. The Approach in Interior's Trust Management Plan Comports With Th e Defendants' Obligation to Perform an Accounting Interior's past attempts to reform trust management were not "sufficiently designed and integrated to produce.., material and long-term improvement in performance." Interior's Trust Management Plan at 6. In rethinking its approach to trust reform in light of that experience, Interior rejected "the impulse to offer quick fixes." Id. Based on Interior's experience and given the complexity of the trust framework and related obligations, Interior decided to systematically and methodically examine existing trust processes to determine what works and what does not, to select best practices, to revise those practices that are not, and to continue monitoring the trust practices put in place to confirm that they remain best practices. This business-oriented approach to trust reform, in which Interior's 13 Trust Management Plan rests on developing a thorough understanding of all trust processes before reforming them, comports with the guidance provided by Congress "that an assessment of organization, staffing, and operations should come first, to provide a basis for planning," that "alt clements of [Interior's] trust fund financial systems should be considered," that "all trust fund policies and procedures should be reviewed and revised, as appropriate," and that "the framework and a strategic plan need to fully address actions necessary to ensure that [Interior] has a reliable trust fund accounting system." Misplaced Trust: The Bureau o f Indian Affairs' Mismanagement of the Indian Trust Fund, H.R. Rep. No. 102-499 ("Misplaced Trust"), at 53-54 (1992). The Interior Defendants, in coordination with consultants, the Tribal Task Force, and personnel throughout Interior, identified eight core trust business processes for thorough examination in connection with the "As-Is" study: beneficiary services, probate, title, appraisal, cadastra[ survey, surface asset management, subsurface asset management, and accounting management (individual assets, tribal assets, and investments). Eleventh Quarterly Report at 29, 34-35. After an exhaustive analysis of the practices and variances in practice in each region, the As-Is study is being finalized, and work will begin on selecting existing best practices or adopting new best practices for implementation throughout Interior. Id. at 30, 33, 35. While the As-Is process is underway, Interior has also undertaken an organizational restructuring process by which trust operations will be consolidated within OST and BIA and separated from non-trust operations. See Interior's Trust Management Plan at 5, 44-77, 81-82, Ex. 2; se_.._e als_.__o, e._._., Eleventh Quarterly Report at 29-30. All of these reform initiatives are taking place in the context of the Indian Self- Determination Act and Education Assistance Act, which confirmed the major shift in United 14 States policy from a guardian-ward type relationship with tribes to a government-to-government relationship and that clarified congressional intent that tribes manage not only their own trust assets but also have a role in tile management of assets of their individual citizens. See Pub. L. No. 93-638, 88 Stat. 2203 (I975) (25 U.S.C. §§ 450 et seq.); see also Executive Order 13175 (Nov. 6, 2000) (copy attached as Ex. 3); 25 C.F.R. Pt. I000 ("Annual Funding Agreements Under the Tribal Self-Government Act"), id. at 1001 ("Self Governance Program"); 512 DM 2, Departmental Responsibility for Indian Trust Resources, at §§ 2.1 - 2.4 (articulating Interior policy toward tribes) (see Ex. 2). Tribes are thus not only trust beneficiaries but also governmental entities with jurisdiction over tribal and individual lands (and the assets thereon) and providers of trust services, including trust services directly related to individual Indian trust accounts. As a result, trust reform considerations in this case cannot, as a matter of law, be limited to whether tribal trust assets will be affected, but must also include the extent to which tribal management and administration wilt be affected and tribal interests will be implicated. Notwithstanding the Plaintiffs' attempts to characterize such considerations as a conflict requiring "the complete separation of [tribal and individual] trust administration," Plaintiffs' Trust Management Plan at 42, these considerations reflect the existing statutory framework within which the trusts must operate. The time frames for Interior to accomplish specific reform-related tasks, see, e...._, Interior's Trust Management Plan at 50-51, 54, 58, 62, 76, 77, 83, 84, 94, were developed after taking into account Interior's experience, advice from outside experts, statutory constraints, 15 existing budget and appropriation requirements, the need for consultation with Congress and tribes, and Interior's considered judgment of the time required to implement large-scale institutional changes. C. The Reorganization Described tn Interior's Trust Management Plan Complies With Interior's Existing Statutory Authority And With Interior's Existing Authority under Budget Appropriations Interior's restructuring effort is based on the business principle that trust operations should be handled, to the extent possible, separately from Interior's non-trust operations. Se___e Interior's Trust Management Plan at 5, id. at Ex. 2; .s.e.e als. o, e.g., Eleventh Quarterly Report at 29-30, 33, 37-38. Unlike private trusts and banks that separate their trust and non-trust operations, however, Interior's ability to restructure its trust operations is subject to existing statutory requirements and constraints, including budgetary considerations as dictated by congressional appropriations. For example, aIthough representatives of Interior stated that Interior would support creation of an Under Secretary for Indian Trust, see Statement of Deputy Secretary J. Steven Griles and Assistant Secretary for Indian Affairs McCaleb to Committee on Senate Indian Affairs, July 30, 2002 (copy attached as Ex. 4), Congress has not enacted such a change in Interior's organizational structure. Interior's Trust Management Plan utilizes the existing statutory trust organization mandated by Congress. In the 1994 Act, Congress created the Office of the Special Trustee for American Indians to "provide for more effective management of, and accountability for the proper discharge of, the Secretary's trust responsibilities to Indian tribes and individual Indians," to "ensure that reform of such practices in the Department is carded out in a unified manner," and to "ensure the implementation of all reforms necessary for the proper discharge of the Secretary's 16 trust responsibilities to Indian Tribes and individual Indians." 1994 Act _ 301 (emphasis added). The Interior Defendants, as they provide trust services, proceed with trust reform, and develop their Plan, are no different from any other government entity engaged in official operations - they are bound by appropriations law. "The use of any government resources whether salaries, employees, paper, or buildings - to accomplish [a task] would entail government expenditure. The government cannot make expenditures, and therefore cannot act, other than by appropriation." EDC v. Babbitt, 73 F.3d 867, 871-72 (9th Cir. 1995) (because of appropriations rider, "lack of available appropriated funds prevents the Secretary from complying with the [Endangered Species] Act."). The Court as well as the Executive Branch is bound by the constraints imposed by the congressional control of the appropriations process. OPM v. Richmond, 496 U.S. 414, 425 (1990); see also 3I U.S.C. § I341 (generally prohibiting government officers and employees from entering into a contract or incurring an obligation before an appropriation is made and from making or authorizing expenditures that exceed existing appropriations), 31 U.S.C. at § 1342 (generally prohibiting government officers and employees from accepting "voluntary" services). Any major restructuring - including creating a new organization within Interior, changing or displacing existing functions, or undertaking extensive and costly reform processes - requires Congressional approval. The continuing and active role of Congress in Interior's trust management and administration, and thus in its ability to reform trust management, is reflected in, for example, frequent congressional hearings, see Ex. 5 (listing trust-related hearings during 107th Congress), and in exchanges between Interior and members of Congress, see, e...._., Ex. 6, 7 :: (correspondence from Representative Pallone to Secretary Norton, and response). 17 Interior sought and obtained approval from the congressional appropriations committees for the reprogramming of existing appropriations necessary to fund in the short term the reorganization envisioned under the trust management plan. Interior's Trust Management Plan at 82; see also, e.g., Ex. 7 at 3-4. In addition, although Interior is under a continuing appropriations resolution pending the permanent fiscal year 2003 appropriation, funding exists to allow the specific initiatives discussed in connection with the Trust Management Plan to continue in 2003. .S....ee Interior's Trust Management Plan at 12-13; cf. Interior's Fiscal Year 2003 Budget Justifications, Office of the Special Trustee for American Indians, at 2338-39, 2354-57 (attached as Ex. 8). Funding to support these initiatives is being sought for fiscal year 2004 as well. IV. Plaintiffs' Trust Management Plan Is Unrealistic, Contrary To Existing Law, And Inconsistent With This Court's Prior Rulings In stark contrast to Interior's Trust Management Plan, the Plaintiffs' Trust Management Plan provides no systematic, detailed guidance regarding the specific actions necessary to achieve the trust reform necessary for compliance with Defendants' obligation to perform an accounting. 7 The Plaintiffs' Plan simply does not "fully address actions necessary to ensure that [interior] has a reliable trust fund accounting system." Misplaced Trust at 54. The Plaintiffs' Plan perhaps describes the skeletal outline of a legislative proposal, but it is neither realistic nor lawful under existing law. At best, the Plaintiffs' Trust Management Plan imposes hopelessly unrealistic deadlines 7The Plaintiffs' Trust Management Plan continues the Plaintiffs' pattern of using almost ,5,. every submission as a vehicle for unwarranted ad hominem attacks on virtually all personnel and counsel involved in this litigation. Such attacks have no place in this litigation. 18 on new personnel in new offices, provides no guidance to those personnel regarding the tasks assigned to them, and reveals an astonishing lack of familiarity with the trust-related processes and the measures necessary to reform them. At worst, the Plaintiffs' Trust Management Plan fails to address the complexities of the Interior Defendants' relationship with Congress, tribes, and account holders, and utterly ignores the Interior Defendants' coexisting obligations, including statutes, Executive Orders, tribal consultation, and the annual appropriations process. See, e._&., Plaintiffs' Trust Management Plan at 33 ("immediately appoint new and independent trust administration management solely to administer the Individual Indian Trust") (emphasis omitted), id. at 42 ("Segregate administration of IIM trust records from tribal and other DOI records," because "divergent interests of individual Indian trust beneficiaries and tribal Ieaders require the complete separation of trust administration.") Even if the Plaintiffs' Trust Management Plan were not so legally defective, it is nonetheless unacceptable because the additional time and effort required to address and resolve just the unanswered questions a arising from the small subset of alleged trust obligations that the Plaintiffs concentrate on would "necessarily delay rather than accelerate the ultimate provision of an adequate accounting." Cobel____A1, 240 F.3d at 1110. The Plaintiffs' Trust Management Plan, with its piecemeal and non-detailed approach, reflects not only a failure to learn from Interior's experience with trust reform but also a failure to heed the clear congressional guidance that a plan is fatally flawed when it proposes, inter alia, aBecause the Plaintiffs' Trust Management Plan is devoid of specific details regarding how reform is to be accomplished and how that reform will lead to compliance with the 1994 Act and the Interior Defendants' coexisting obligations, the examples that follow are necessarily illustrative rather than exhaustive. 19 "hir[ing] additional staff.., without first analyzing how these staffing changes might impact on an overall strategic plan," failing to consider "whether the short-term corrective actions will be consistent with short- and long-term corrective actions developed for the strategic plan," omitting "key elements of a strategic plan," and neglecting to "plan for reviewing the current trust financial management systems and procedures even though such studies are necessary to support appropriate action." Misplaced Trust at 53, 54. The Plaintiffs thus fail to propose "a resolute action plan necessary to solve the structural problems that have besieged the financial management of the Indian trust fund for decades and provide a meaningful blueprint for hard- nosed application of sound management practices." Id. at 54. A. Overview Of The Plaintiffs' Trust Management Plan The Plaintiffs describe a number of"common law fiduciary standards," allegedly applicable wholesale to the Defendants, _ Plaintiffs' Trust Management Plan at 16-25, concede that those trust standards are "consonant with the precepts" of the 1994 Act, id. at 26-29, and then provide an "Action Plan" that "represent[s] some of the basic steps to begin the process of rectifying defendants' many breaches,"l° id__=, at 32-47. 9In proposing these "trust standards," however, the Plaintiffs utterly fail to address this Court's recognition in its September 17, 2002 ruling "that the plaintiffs' claims in this case are statutorily~based and that the federal government's fiduciary obligations may not be coextensive with those of an ordinary trustee." 226 F. Supp. 2d at 151 n.161. Furthermore, statements that the federal government, in administering Indian trust resources, is held to exacting fiduciary standards should not be given "talismanic effect." Cotton Petrole.u.m..Corp.. v. New Mexico, 490 U.S. 163, 179 (1989) (rejecting assertion that confessional report attaching a letter in which the Secretary referred to providing tribes with "the greatest return from their property" demonstrated congressional intent "to guarantee Indian tribes the maximum profit available without regard to competing state interests."). _°Although the "defendants' many breaches" are not specified, the Plaintiffs presumably are referring to Interior's alleged failure to abide by Plaintiffs' asserted trust standards. However, 20 The specific trust reform actions proposed by the Plaintiffs include repIacing ali trust personnel affected by the current litigation with "new and independent trust administration management solely to administer the Individual Indian Trust"; the new positions, in an unspecified organizational structure and without any indication of what level these positions would occupy within Interior and the Civil Service, would consist often titled positions, at least 30 new Probate Judges, an "Independent Audit Committee," and unspecified numbers of supporting staff. Plaintiffs' Trust Management Plan at 33-35, 38. In addition, the Plaintiffs assert that "it]he divergent interests of individual Indian trust beneficiaries and tribal leaders require the complete separation of trust administration.., within 180 days" of the "Trust Manager" being appointed. Id. at 42; see also id. at 44 (proposing the "separation of [IEM] trust assets from all other tribal and DO1 assets."). The Plaintiffs also propose actions without regard to whether they overlap partially or completely with initiatives already commenced by Interior, including evaluating and potentially replacing computer systems that support trust operations, Plaintiffs' Trust Management Plan at 37; promulgating a comprehensive records retention policy and addressing records held by third parties to the extent necessary to support an accounting, id. at 38, 40, 41-43, 45-46; identifying and locating beneficiaries, including the so-called "whereabouts unknown" account holders, id. this is not an issue properly within the scope of this case. As the D.C. Circuit recognized in agreeing with Interior that this Court mistakenly "found breaches of obligations that do not exist," the only breach properly at issue in this case is "that of failing to render an accounting .... iT]here is no specific duty to, for example, implement particular policies .... "240 F.3d at 1 I05. Thus, as discussed in section I, inquiry in this case is limited to accomplishing the accounting. To the extent that Plaintiffs seek to use their "trust standards" to impose enforceable obligations beyond those relating to the required accounting, such relief is beyond the scope of this case. See i: 91 F. Supp. 2d at 32 -33 & n. 23 ("dismiss[ing] plaintiffs' pure common-law causes of action for breach of trust"). 21 at 38; eliminating the backlog of probate cases, id. at 38-39; identifying and developing information regarding trust assets to the extent necessary to conduct an accounting, id. at 39, 40; reviewing the role of and need for new cadastral surveys to support an accounting, id. at 40; consulting with the Office of the Comptroller of the Currency regarding the extent to which its principles would provide useful guidelines regarding the required accounting, id. at 43; independently auditing trust balances and operations, id. at 43-44; providing accurate and complete account statements to IIM account holders, id. at 46; and properly monitoring and investing IIM funds, id. at 47. Information regarding the status of these initiatives was readily available to the Plaintiffs in the Eighth, Ninth, Tenth, and Eleventh Quarterly Reports. Any unnecessary duplication of efforts would only result in further delay as initiatives are disrupted, personnel are changed, and the learning process begun over again. Finally, the Plaintiffs propose a number of actions that retate to the management and administration of trust assets, including actions intended to prevent "trespass, wasting, or improper exploitation" of trust assets, Plaintiffs' Trust Management Plan at 39, and actions "to make trust property and all other trust assets productive, to enforce claims on behalf of individual Indian trust beneficiaries, and to take affirmative action to preserve trust property," id. at 44-45. These particular actions are beyond the scope of this case and the authority of this Court because, as discussed in section I, above, they relate to the general management and administration of trust assets and natural resources rather than to providing an accounting. TM _The Plaintiffs also attempt to use their Trust Management Plan as a vehicle to lend support to their separate accounting plan. See Plaintiffs' Trust Management Plan at 3-6. However, contrary to their contention, id. at 5, Plaintiffs' proposed accounting is far from being the "cornerstone" of trust reform. Rather, as the motion in support of the Defendants' historical :_' accounting plan demonstrates, Plaintiffs' accounting plan is nothing more than a claim for money 22 B, The Plaintiffs' Trust Management Plan Is ContraD_ To This Court's Prior Rulings Notwithstanding this Court's prior ruling that "Plaintiffs cannot simply announce that this is a 'trust case' and therefore conclude that the government owes all typical trust duties under the common law," Cobell, 52 F. Supp. 2d at 27 n. 15, that is precisely the premise of the Plaintiffs' Trust Management Plan. Their Plan begins not with the statute under which they sought relief, but with a recitation of various common law "[t]rustee [s]tandards and [d]uties." See Plaintiffs' Trust Management Plan at 16-25. Although Plaintiffs assert and, indeed, concede, that those trust standards are "consonant with the precepts of" the 1994 Act, id. at 29, they then proceed to propose reform actions and measure them solely against the common law trust standards rather than against the specific statutory requirements associated with performance of the accounting, id. at 32-47. The Court has forbidden this approach. As this Court has already recognized and reiterated, standard trust law duties cannot be imported wholesale and applied to Interior simply because the IL'v! funds for which the accounting is sought are held in trust. See CobelI, 91 F. Supp. 2d at 29 ("it does not follow.., that plaintiffs may simply claim that they are the beneficiaries of a trust relationship with the United States and therefore invoke all of the rights that a common law trust entails." (discussing ease law)); see also Cobell, 226 F. Supp. 2d at I51 n. 161 ("the federal government's fiduciary obligations may not be coextensive with those of an ordinary trustee"); .Cob. e. li, 52 F. Supp. 2d at 27 n. 15 (cited and quoted above). damages, which this Court has held to be beyond the scope of this litigation. 23 That the Plaintiffs' Trust Management Plan runs afoul of this Court's prior rulings is a necessary and sufficient basis for rejecting it, quite aside from its other defects. C. The Reorganization And Personnel Actions Described In The Plaintiffs' Trust Management Plan Do Not Comply With Interior's Existing Statutory Authority And With Interior's Existing Authority Under Budget Appropriations In addressing trust reform, the Plaintiffs and the Court, like the Interior Defendants, are bound by existing statutory and budgetary requirements. By proposing a new, but only vaguely defined trust organization, separating the management and administration oflIM trust operations from that for tribal trust, and requiring significant but unfunded expenditures to accomplish this new trust operation, the Plaintiffs' Trust Management Plan violates existing statutory and budgetary constraints. Any major restructuring - such as that envisioned by either of the Trust Management Plans, and particularly the Plaintiffs' proposal to create and staff a trust organization and to separate trust functions - requires Confessional approval, either from Congress as a whole should existing statutes need to be changed, or from Congressional appropriators should existing appropriated funds need to be substantially reprogrammed. Furthermore, under the Anti- Deficiency Act, 31 U.S.C. §§ 1341, 1342, government agencies can neither retain personnel nor enter into contracts with third parties without having the necessary funding in place. _2 _2A principal issue that distinguishes this public trust from a private trust, unrelated to whether the government as trustee receives compensation from the account holders for operating the trust, Plaintiffs' Trust Management Plan at 21 & n.30, is the requirement, discussed in section III above, that Congress provide both the funds and the programmatic authorizations necessary for the government as trustee to carry out its trust responsibilities. Unlike a private trustee, the Defendants cannot commit to expenditures that have not been authorized and cannot impose structures or practices that are inconsistent with Congressional guidance provided in statutes and budgets, including the budget justifications and program descriptions on which Congress relies in enacting appropriations. The Defendants (Iike the Plaintiffs and the Court) cannot disregard 24 Unlike Interior's TrUst Management Plan, Plaintiffs' Plan reflects no consideration of Congressional limitations and fails to even acknowledge that the ability to implement proposed trust reform actions, as well as the timing of that implementation, is dependent upon Congressional action, including funding. For example, Plaintiffs' proposal to "[h]ire at least thirty qualified probate judges.., within 150 days of the Court's order," Plaintiffs' Trust Management Plan at 38, would drastically impact both the size and the budget of the Office of Hearings and Appeals COHA") in a manner not anticipated by current funding levels for OHA or the appropriations sought for fiscal year 2003. See, e.___., Interior's Fiscal Year 2003 Budget Justifications, Office of Hearings and Appeals, at 1774-79 (attached as Ex. 9). Plaintiffs' radical approach to trust reform - trust reform without regard to the framework of applicable laws and Congressional guidance and influence in trust-related decisions - is a far cry from the "middle ground" chosen by Congress when it restructured and reorganized trust operations in the 1994 Act. S.ee 91 F. Supp. 2d at 41 (discussing "middle ground" chosen by Congress). 1. Plaintiffs' Plan Conflicts With The Statute Creating The Office Of Ire Special Trustee In Title Ill of the 1994 Act, Congress created the Office of the Special Trustee for American Indians to "provide for more effective management of, and accountability for the proper discharge of, the Secretary's trust responsibilities to Indian tribes and individual Indians," "ensure that reform of such practices in the Department is carried out in a unified manner," and Congressional direction regarding trust-related activities and must take the need for Congressional approval into account in all aspects of planning and budgeting for all significant undertakings, trust related or otherwise. The Plaintiffs' Trust Management Plan reflects no such considerations and acknowledges no such realities. 25 "ensure the implementation of ail reforms necessary for the proper discharge of the Secretary's trust responsibilities to Indian Tribes and individual Indians." 1994 Act § 30l (emphasis added). Furthermore, the Special Trustee "shall ensure continuation of the Office until all reforms identified in the strategic plan have been implemented to the satisfaction of the Special Trustee," at which point written notice must be given to the Secretary and Congress before the Office is terminated. 1994 Act § 302(c)(1). OST still exists, and the Plaintiffs' Trust Management Plan therefore violates these statutory requirements. The Plaintiffs propose the "immediate[] appoint[ment of] new and independent trust administration management solely to administer the Individual Indian Trust," including a new "Trust Manager and staff.., to bring the individual Indians trust into compliance." Plaintiffs' Trust Management Plan at 33-34, 37 (emphasis omitted). No statutory authorization for creation of this new and independent "trust administration management" is cited, no organizational structure is provided, and no explanation is given regarding the fate of the Office of the Special Trustee. Under the Plaintiffs' view of"confiict," id. at 33, 42, 44, OST would necessarily be conflicted out of continuing to provide trust oversight because it is not independent but instead reports to the Secretary, see Cobell, 91 F. Supp. 2d at 52 ("If Con_ess truly wanted an independent trustee to oversee trust management.., then Congress surely would have explicitly restricted the Secretary's powers over the Special Trustee and his office."), because it is implicated in this litigation, and because it oversees and makes decisions that affect both individual and tribal trusts. In drafting the 1994 Act, Congress could have chosen an organizational approach different from the current trust structure; instead, it chose to retain the existing structure under 26 the Secretary, with the addition of the Office of the Special Trustee. "[T]he Office of the Special Trustee, and its congressionally created structure, was Congress's considered judgment as to how [to] help try to solve the ILM administration problems." Cobell, 52 F. Supp. 2d at 29. Congress's "considered judgment" cannot be ignored. 2. Plaintiffs' Plan Conflicts With Congressionally Authorized Joint Trust Administration The Plaintiffs' Plan requires "[s] egregate[d] administration of IIM trust records from tribal and other DOI records" and "the separation of trust assets from all other tribal and DO[ assets." Plaintiffs' Trust Management Plan at 42, 44. Congress has long known that individual and tribal trust assets are being administered together, because Interior each year submits budget requests to Congress which make the joint administration clear. See, e.g., Interior's Fiscal Year 1996 Budget Justifications, Bureau of Indian Affairs, at 965(describing Area Office staff's "reconcil[ing] collections and disbursements of tribal and individual Indian monies" and "provid[ing] reports to individual Indians or tribes...") (attached as Ex. 10). Congress could have chosen to separate the management and administration of individual and tribal trust assets, but it did not do so and has not, to date, indicated a belief that such a separation is necessary. Indeed, Congress explicitly vested responsibility in the Office of the Special Trustee for oversight of ali trust assets, whether tribal or individual. 1994 Act § 301. The continuing joint administration of individual and tribal trusts is consistent with congressional indications of a strong preference to avoid duplicating programs and program functions. See, e_., Interior's Fiscal Year 1997 Budget Appropriations, Conference Report, H. Rep. No. 104-863 at 1005 (attached as Ex. I 1); Interior's Fiscal Year 1996 Budget Appropriations, Conference 27 Report, H. Rep. No. 104-173, at 51 (attached as Ex. i2); see also Interior% Fiscal Year 2003 Budget Justifications, Office of the Special Trustee, at 2339, 2355 (see Ex. 8). Neither the Plaintiffs nor this Court can alter the existing trust structure that Congress created or act in anticipation of future confessional action. 3. Plaintiffs' Plan Conflicts With Interior's Personnel Obligations A Court order requiring Interior's trust-related hiring decisions to be made according to the specific requirements and criteria articulated by the Plaintiffs for "unconflicted" trust personnel would violate the authority of the President, and, by delegation, the Secretary, to make hiring decisions on behalf of the Executive Branch._3 To the extent that a Court order requiring the Interior Defendants to appoint a "Chief Legal Officer" would, in accordance with the Plaintiffs' Plan, contemplate vesting responsibility for all trust-related litigation in that new position, Plaintiffs' Trust Management Plan at 35, 38-39, 44-45, that responsibility would violate statutes governing litigating authority, which is vested in the Department of Justice. See 28 U.S.C. §§ 516-519; see also 5 U.S.C. § 3106 (generally barfing the head of an Executive department from "employ[ing] an attorney or counsel for the conduct of litigation" and requiring referral to the Department of Justice). _3plaintiffs assert in a footnote, with no explanation or discussion, that they "do not believe it is necessary to depart from the ordinary, applicable Indian preference policy of the Department of the Interior" in establishing and staffing the "new and independent trust administration" pro,am within Interior to administer the individual Indian trust. Plaintiffs' Trust Management Plan at 33 n.43. First, based on the conflict principles that the Plaintiffs seek to import from private trust law in support of their Trust Management Plan, it would seem likely that tribal and class members would be conflicted out of the administration of such a system, in which case the Indian hiring preference would be to little or no avail. Second, the Plaintiffs fail 4,. to explain how such large-scale immediate hiring of personnel could, as a practical matter, be consistent with application of the "ordinary, applicable Indian preference policy." 28 D. Plaintiffs' Trust Management Plan Does Not Address Tribal Consultation Or Compliance With Existing Law And Policy Regarding Tribal Involvement In Trust Operations The requirement that Interior "[s]egregate administration oflIM trust records from tribal and other DOt records" because "divergent interests of individual Indian trust beneficiaries and tribal leaders require the complete separation of trust administration," Plaintiffs' Trust Management Plan at 42, interferes with sovereig-n relations between/nterior and tribes, particularly with regard to those tribes that have assumed some of the Secretary's responsibilities reIated to the administration and management of tribal and individual trust accounts. To the extent that the Plaintiffs' Plan precludes tribes from entering into such arrangements in the future, it violates the Congressional mandate to encourage tribes to play increasingly active roles in the administration and management of trust assets for both the tribe and individual members of the tribe. See Indian Self-Determination and Education Assistance Act, Pub. L. No. 93-638, 88 Stat. 2203 (1975) (25 U.S.C. §§ 450 et seq.); Executive Order 13175 (see Ex. 3); 25 C.F.R. Pt. 1000 ("Annual Funding A_eements Under the Tribal Self-Government Act"), id. at 1001 ("Self Governance Program"). Furthermore, notwithstanding the Plaintiffs' willingness to cite and attempt to insert into the record letters from tribal leaders regarding the process by which Interior developed its Trust Management Plan, the Plaintiffs' own plan does not address the issue of tribal consultation or assert that its contents were in any way a result oftribat consultation. :'.., 29 E. Plaintiffs' Trust Management Plan Fails To Provide For A Thorough Assessment Of, Or Familiarization Of New Personnel With, Existing Trust Business Practices Before Requiring New Personnel To Accomplish Tasks That Will Require Detailed Knowledge Of Existing Trust Operations Although the Plaintiffs' Plan requires the retention of a number of new "unconflicted" personnel not previously connected with trust operations at Interior, it provides no guidance to that new staff regarding how and where this "new and independent trust administration management" intended "solely to administer the Individual Indian Trust" would fit into Interior's overall organizational structure. See Plaintiffs' Trust Management Plan at 33-35 (emphasis omitted). The Plaintiffs' Plan simply lists the results that those personnel are supposed to achieve without in any way describing the process necessary, to accomplish those results, without providing sufficient time to understand the current processes and personnel, without addressing the possibility that some of the goals and timetables for achieving those results may not be feasible, and without contemplating any process similar to Interior's "As-Is" and "To-Be" assessments of core trust business processes. In essence, Plaintiffs' Plan proposes a quantum leap to a fully functional trust system without any intermediate steps. The Plaintiffs propose a quick fix without a sufficient foundation, an approach that Interior has rejected as unworkable and ill-advised for all of the reasons discussed in section III, above, and that Congress has likewise condemned, see Misplaced Trust at 53, 54. As understandable as Plaintiffs' desire for quick trust reform might be, the reality is that a system that has experienced well-documented difficulties for over one hundred years cannot be corrected by a Court order to fix problem A in 60 days and problem B in 180 days, Plaintiffs' Trust Management Plan at 38-40, 42, 43, without building into the process the sufficient time and 30 planning necessary to develop a thorough understanding of problem A and problem B and to comply with other applicable statutory, congressional, and governmental requirements. Interior's Trust Management Plan provides that time; Plaintiffs' Plan does not. Plaintiffs' Trust Management Plan, by leaping into trust reform without a methodical and systematic approach will "necessarily delay rather than accelerate the ultimate provision of an adequate accounting," Cobell, 240 F.3d at t 1 I0, when, inevitably, deadlines are missed and unanticipated but other,vise foreseeable obstacles are encountered. CONCLUSION We respectfully submit that the Court lacks authority to hold the Phase i .5 trial for the purpose of reviewing the Trust Management and Historical Accounting Plans and thereupon entering injunctive relief. However, if the Court proceeds down this path, it is clear that the Interior Defendants' Trust Management Plan, unlike that of the Plaintiffs, describes an approach to trust reform that comports with the Defendants' obligation to perform an accounting. Furthermore, Plaintiffs' Trust Management Plan is "so defective that [it] would necessarily delay rather than accelerate the ultimate provision of an adequate accounting." ..C.obell, 226 F. Supp. 2d at 157. 31 Accordingly, the Court should enter partial summary judgment that, as a matter of law, the Interior Defendants' Trust Management Plan describes an approach to trust reform that comports with the Defendants' obligation to perform an accounting and Plaintiffs' Trust Management Plan does not. Dated: January 31, 2003 Respectfully submitted, ROBERT D. McCALLUM Assistant Attorney General STUART E. SCHIFFER Deputy Assistant Attorney General J. CHRISTOPHER KOHN Direet°_/5? _. /'"SSAlX_DRA P. SPOONEP2 _ - - Deputy Director D.C. Bar No. 261495 JOHN T. STEMPLEWICZ Senior Trial Counsel Commercial Litigation Branch Civil Division P.O. Box 875 Ben Frmzklin Station Washington, D.C. 20044-0875 (202) 514-7194 32 IN; THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLU\MBIA ELOUISE PEPION COBELL, et al__:, ) ) Plaintiffs, ) ) v. ) Case No. 1:96CV01285 ) (Judge Lamberth) GALE A. NORTON, Secretary of the Interior, et at.___., ) ) Defendants. ) ) DEFENDANTS' STATEMENT OF MATERIAL FACTS AS TO WHICH NO GENUINE ISSUE EXISTS FOR MOTION FOR PARTIAL SUMMARY JUDGMENT THAT INTERIOR'S TRUST MANAGEMENT PL,_N COM..P...ORTS WITH THEIR OBLIGATION TOPERFORM AN ACCOUNTING Pursuant to Local Civil Rule 7. l(h), Defendants submit the following Statement of Material Facts as to Which No Genuine Issue Exists, with regard to Defendants' Motion For Partial Summary, Judgment That Interior's Trust Management Plan Comports With Their Obligation To Perform An Accounting. t. The Secretary of the interior and the Assistant Secretary of Interior-indian Affairs ("Interior Defendants") serve as trustee-delegates of the Federal Government with regard to the administration of Individual Indian Money ("It3,4")trust accounts. E._..,._., Cobell v. Norton, 240 F.3d 1081, 1086 (D.C. Cir. 200I). 2. By its Order filed September 17, 2002, this Court ordered "that the Interior Defendants shall file with the Court and serve upon plaintiffs a plan for bringing themselves into compliance with the fiduciary obligations that they owe to the IEV[ beneficiaries." Cobell v. Norton, 226 F. Supp. 2d 1,162 (D.D.C. 2002). The Order further requires that the plan detail "the standards by which [Interior Defendants] intend to administer the IIM trust accounts, and -1- how their proposed actions would bring them into compliance with those standards." Id__:. 3. On January 6, 2003, Interior Defendants filed with the Court their "Fiduciary Obligations Compliance Plan," pursuant to the Court's September 17, 2002 Order. Interior Defendants' Plan asserts that it is the relevant part of an ongoing trust reform planning and implementation process in which Interior is already engaged. Interior Defendants' Plan at 1-2. The plan also asserts that the American Indian Trust Fund Management Reform Act of 1994 ("1994 Act") sets forth the specific standards governing the performance of the accounting; details these specific standards; and notes that Interior looks to various sources, identified throughout the plan, for guidance in carrying out the 1994 Act's requirements. Id. at 13-i6. 4. On January 6, 2003, Plaintiffs filed with the Court "Plaintiffs' Compliance Action Plan Together With Applicable Standards." Plaintiffs' Plan asserts that meaningful trust reform depends upon the adoption of their concurrently filed accounting plan. Plaintiffs' Plan at 4-6. January 31, 2003 Respectfully submitted, ROBERT D. McCALLUM, JR. Assistant Attorney General STUART E. SCHIFFER Deputy Assistant Attorney General J. CHRISTOPHER KOHN Director /SANDRA P. SPOONER ,_ v D.C. Bar No. 261495 Deputy Director JOHN T. STEMPLEWICZ Senior Trial Counsel Commercial Litigation Branch Civil Division P.O. Box 875 ,:4 Ben Franklin Station Washington, D.C. 20044-0875 (202) 514-7t94 EN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ELOUISE PEPION COBELL, et al.__., ) ) Plaintiffs, ) ) v. ) Case No. 1:96CV01285 ) (Judge Lamberth) GALE A. NORTON, Secretary of the interior, et al.__:., ) ) Defendants. ) ) ORDER This matter comes before the Court on Defendants' Motion for Partial Summary Judgment That Interior's Trust Management Plan Comports With Their Obligation to Perform an Accounting. After considering that motion, any responses thereto, and the record of the case, the Court finds that Defendants' motion for partial summary judgment should be, and hereby is, GRANTED. It is further ORDERED that the Court finds that interior's Trust Management Plan comports with Defendants' obligation to perform an accounting, and it is further ORDERED that the Court finds that Plaintiffs' Compliance Action Plan Together With Applicable Trust Standards does not comport with Defendants' obligation to perform an accounting. SO ORDERED this __ day of .... 2003. ROYCE C. LAMBERTH United States District Judge CC.' Sandra P. Spooner John T. Stemplewicz Cynthia L. Alexander Commercial Litigation Branch Civil Division P.O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 Fax (202) 514-9163 Dennis M Gingold, Esq. Mark Brown, Esq. t 275 Pennsylvania Avenue, N.W. Ninth Floor Washington, D.C. 20004 Fax (202) 318-2372 Keith Harper, Esq. Native American Rights Fund 1712 N Street, N.W. Washington, D.C. 20036-2976 Fax (202) 822-0068 Elliott Levitas, Esq. 1 t 00 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 Alan h Balaran, Esq. Special Master 1717 Pennsylvania Avenue, N.W. 12th Floor Washington, D.C. 20006 Joseph S. Kieffer, HI Special Master-Monitor 420 - 7 th Street, N.W. Apartment 705 Washington, D.C. 20004 CERTIFICATE OF SERVICE i declare under penalty of perjury that, on January 31, 2003 I served the foregoing Defendants_ Motion for Partial Summary Judgment That Interior's Trust Management Plan is Consistent with Their Obligation to Perform an Accounting by hand in accordance with their Agreement of January 31, 2003: Keith Harper, Esq. Dennis M Gingold, Esq. Native American Rights Fund Mark Kester Brown, Esq. 1712 N Street, N.W. 1275 Pennsylvania Avenue, N.W. Washington, D.C. 20036-2976 Ninth Floor (202) 822-0068 Washington, D.C. 20004 (202) 318-2372 By U.S. Mail upon: Elliott Levitas, Esq. 1100 Peachtree Street, Suite 2800 Atlanta, GA 30309-4530 First 25 pages by facsimile; a complete copy to be delivered by hand the morning of February 3, 2003 upon: Alan L. Balaran, Esq. Special Master 1717 Pennsylvania Avenue, N.W. 12th Floor Washington, D.C. 20006 (202) 986-8477 By Hand upon: Joseph S. Kieffer, IIi Special Master Monitor 420 7 th Street, N.W. Apartment 705 Washington, D.C. 20004 (202) 478-1958 Ja y st. J '_ ......... Department of the Interior Departmental Manual Effective Date: 10/31/00 Series: Departmental Management Part 303: Indian Trust Responsibilities Chapter 2: Principles for Managing Indian Trust Assets Originating Office: Office of the Assistant Secretary - Indian Affairs 303 DM 2 2. I Purpose. This Chapter provides Department-wide guidance for carrying out the Secretary's trust responsibility as it pertains to Indian trust assets. 2.2 Scope. The provisions of this Chapter are applicable to all Departmental bureaus and offices. 2.3 Authority. This Chapter is issued under the authority of the American Indian Trust Fund Management Reform Act of 1994 (25 U.S.C. § 4001, et seq.), and its implementing regulations. 2.4 General Provision. This Chapter is intended to enhance the Department's management of the Secretary's trust responsibility. It is not intended to, and does not, create any right to administrative or judicial review, or any legal right or benefit, substantive or procedural, enforceable by a party against the United States, its agencies, or instrumentalities, its officers or employees, or any other person. 2.5 Definitions. For purposes of this Chapter, the following definitions apply: A. "Beneficial owner" means both Indian tribes and individual indians who are the owners of Indian trust assets held by the federal government in trust or with a restriction against alienation. B. "Persons who manage indian trust assets" means Departmental employees who have been properly delegated specific authority to manage or administer Indian trust assets. Defendants' Exhibit No. 1 Motion for Partial S/J Trust Management C. "Indian trust assets" means lands, natural resources, money, or other assets held by the federal government in trust or that are restricted against alienation for Indian tribes and individual Indians. D. "Trust responsibility" as used in this Chapter only pertains to Indian trust assets. 2.6 Responsibilities. A. Office of the Special Trustee for American Indians is responsible for ensuring compliance with the requirements of this Chapter. B. Assistant Secretaries will ensure that bureaus and offices under their jurisdiction comply with this Chapter. C. Heads of bureaus and offices are responsible for ensuring that the principles in Paragraph 2.7 of this Chapter are carried out by their organizations as. they: (1) Review, modify or promulgate new regulations, policy statements, instructions or manuals; (2) Develop legislative and budgetary proposals; and (3) Manage, administer, or take other actions directly relating to or potentially affecting assets held in trust by the United States for Indian tribes and individual Indians. 2.7 Trust Principles. It is the policy of the Department of the Interior to discharge, without limitation, the Secretary's Indian trust responsibility with a high degree of skill, care, and loyalty. The proper discharge of the Secretary's trust responsibilities requires that persons who manage Indian trust assets: A. Protect and preserve Indian trust assets front loss, damage, unlawful alienation, waste, and depletion; B. Assure that any management of Indian trust assets that the Secretary has an obligation to undertake promotes the interest of the beneficial owner and supports, to the extent it is consistent with the Secretary's trust responsibility, the beneficial owner's intended use of the assets; C. Enforce the terms of ali leases or other agreements that provide for the use of trust assets, and take appropriate steps to remedy trespass on trust or restricted lands; D. Promote tribal control and self-determination over tribal trust lands and resources; E. Select and oversee persons who manage Indian trust assets; F. Confirm that tribes that manage Indian trust assets pursuant to contracts and compacts authorized by the Indian Self-Determination and Education Assistance Act, 25 U.S.C. 450, et seq., protect and prudently manage Indian trust assets; G. Provide oversight and review of the performance of the Secretary's trust responsibility, including Indian trust asset and investment management programs, operational systems, and information systems; H. Account for and timely identify, collect, deposit, invest, and distribute income due or held on behalf of beneficial owners; I. Maintain a verifiable system of records that is capable, at a minimum, of identifying: (1) the location, the beneficial owners, any legal encumbrances (i.e., leases, permits, etc.), the user of the resource, the rents and monies paid, if any, and the value of trust or restricted lands and resources; (2) dates of collections, deposits, transfers, disbursements, third party obligations (i.e., court ordered child support, judgements, etc.), amount of earnings, investment instruments and closing of all trust fund accounts; (3) documents pertaining to actions taken to prevent or compensate for any diminishment of the Indian trust assets; and (4) documents that evidence the Department's actions regarding the management and disposition of Indian trust assets; J. Establish and maintain a system of records that permits beneficial owners to obtain information regarding their Indian trust assets in a timely manner and protect the privacy of such information in accordance with applicable statutes; K. Invest tribal and individual Indian trust funds to make the trust account reasonably productive for the beneficial owner consistent with market conditions existing at the time the investment is made; L. Communicate with beneficial owners regarding the management and administration of Indian trust assets; and M. Protect treaty-based fishing, hunting, gathering, and similar fights of access and resource use on traditional tribal lands. 10/31/00 #3346 New Click here to download in WordPerfect format Department of the interior Departmental Manual Effective Date: 12/01/95 Series: IntergovemmentaI Relations Part 512: American Indian and Alaska Native Programs Chapter 2: Departmental Responsibilities for Indian Trust Resources Originating Office: Office of American Indian Trust 512 DM 2 t. Purpose. This Chapter establishes the policies, responsibilities, and procedures for operating on a government-to-government basis with federally recognized indian tribes for the identification, conservation, and protection of American Indian and Alaska Native trust resources to ensure the fulfillment of the Federal Indian Trust Responsibility. 2. Policy. It is the policy of the Department of the Interior to recognize and fulfill its legal obligations to identify, protect, and conserve the trust resources of federally recognized Indian tribes and tribal members, and to consult with tribes on a government-to-government basis whenever plans or actions affect tribal trust resources, trust assets, or tribal health and safety. 3. Responsibilities. A. Heads of bureaus and offices are responsible for identifying any impact of DepartmentaI plans, projects, programs or activities on Indian trust resources. Department officials shall: (1) Establish procedures to ensure that the activities of Departmental organizations impacting upon Indian trust resources are explicitly addressed in planning, decision, and operational documents; (2) Ensure that bureaus and offices consult with the recognized tribal government whose trust resource, asset, or health and safety is potentially affected by the proposed action, plan, or activity; (3) Remove procedural impediments to working directly and effcctively with tribal governments; (4) Provide drafts of all procedures or amendments to procedures developed pursuant to this Chapter to the Office of American Indian Trust for review and comment; and, (5) Designate a senior staff member to serve as liaison between the bureau or office and the Office of Defendants' Exhibit No.2 Motion for Partial S/J Trust Management American Indian Trust. B. Office of American Indian Trust is responsible for ensuring compliance with the procedures and requirements under this Chapter. The Office of American Indian Trust will serve as the Department's liaison and initial point of contact on all matters arising under this Chapter. Ail procedures and amendments to procedures shall be submitted by Departmental bureaus and offices to the Office of American Indian Trust for review and comment. After such review and comment, the procedures and amendments to procedures will be transmitted to the Assistant Secretary - Indian Affairs for final approval. C. Assistant Secretary - Indian Affairs is responsible for approving bureau and office procedures, or amendments thereto, developed pursuant to this Chapter. 4. Procedures. A. Reports. As part of the planning process, each bureau and office must identify any potential effects i on Indian trust resources. Any effect must be explicitly addressed in the planning/decision documents, :z including, but not limited to, Environmental Assessments, Environmental Impact Statements, and/or Management Plans prepared for the project or activity. The documentation shall: (1) Clearly state the rationale for the recommended decision; and (2) Explain how the decision will be consistent with the Department's trust responsibility. B. Consultation. In the event an evaluation reveals any impacts on Indian trust resources, trust assets, or tribal health and safety, bureaus and offices must consult with the affected recognized tribal government(s), the appropriate office(s) of the Bureau of Indian Affairs, the Office of the Solicitor, and the Office of American Indian Trust. Each bureau and office within the Department shall be open and candid with tribal government(s) during consultations so that the affected tribe(s) may fully evaluate the potential impact of the proposal on trust resources and the affected bureau(s) or office(s), as trustee, may fully incorporate tribal views in its decision-making processes. These consultations, whether initiated by the tribe or the Department, shall be respectful of tribal sovereignty. Information received shall be deemed confidential, unless otherwise provided by applicable law, regulations, or Administration policy, if disclosure would negatively impact upon a trust resource or compromise the trustee's legal position in anticipation of or during administrative proceedings or litigation on behalf of tribal government(s). 12,/01/95 #3049 Replaces 5/23/95 #3040 Click here to download in WordPerfect format 67249 mlllllmll i ii i i ,,,,,,,,,,,,,, ,,,, .............................. _ ...... Presidential Documents Vol. 65, No, 218 Thursday, November 9, 2000 Title 3-- Executive Order 13175 of November 6, 2000 The President Consultation and Coordination With Indian Tribal Governments By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to establish regular and meaningful consultation and collaboration with tribal officials in the development of Federal policies that have tribal implications, to strengthen the United States government-to-government relationships with Indian tribes, and to reduce the imposition of unfunded mandates upon Indian tribes; it is hereby ordered as follows: Section 1. Definitions. For purposes of this order: (a) "Policies that have tribal implications" refers to regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the i relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. (b) "Indian tribe" means an Indian or Alaska Native tribe, band, nation, pueblo, village, or community that the Secretary of the Interior acknowledges to exist as an Indian tribe pursuant to the Federally Recognized Indian Tribe List Act of 1994, 25 U.S.C. 479a. (c) "Agency" means any authority of the United States that is an "agency" under 44 U.S.C. 3502(1), other than those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(5). id} "Tribal officials" means eIected or duly appointed officials of Indian tribal governments or authorized intertribal organizations. Sec. Z. Fundamental Principles. In formulating or implementing policies that have tribal implications, agencies shall be guided by the following fundamental principles: ia) The United States has a rmique legal relationship with Indian tribal governments as set forth in the Constitution of the United States, treaties, statutes, Executive Orders, and court decisions. Since the formation of the Union, the United States has recognized Indian tribes as domestic dependent nations under its protection. The Federal Government has enacted numerous statutes and promulgated numerous regulations that establish and define a trust relationship with Indian tribes. (b) Our Nation, under the law of the United States, in accordance with treaties, statutes, Executive Orders, and judicial decisions, has recognized the right of Indian tribes to self-government. As domestic dependent nations, Indian tribes exercise inherent sovereign powers over their members and territory. The United States continues to work with Indian tribes on a gcve. rnment4o-government basis to address issues concerning Indian tribal seH'-government, tribal trust resources, and Indian tribal treaty and other rights. (c) The United States recognizes the right of Indian tribes to self-government and supports tribal sovereignty and self-determination. Sec. 3. Policymaking Criteria. In addition to adhering to the fundamental principles set forth in section 2, agencies shall adhere, to the extent permitted by law, to the following criteria when formulating and implementing policies that have tribal implications: Defbndants' Exhibit No.3 Motion for Partial S/J Trust Management 67250 Federal Register/Vol. 65, No. 218/Thursday, November 9, 2000/Presidential Documents mllllll ==mmnmlmlm i iii i (a) Agencies shall respect Indian tribal self-government and sovereignty, honor tribal treaty and other rights, and strive to meet the responsibilities that arise from the unique legal relationship between the Federal Government and Indian tribai governments. (b) With respect to Federal statutes and regulations administered by Indian tribal governments, the Federal Government shall grant Indian tribal govern- ments the maximum administrative discretion possible. (c) When undertaking to formulate and implement policies that have tribal implications, agencies shall: (1} encourage Indian tribes to develop their own policies to achieve pro- gram objectives; (2) where possible, defer to Indian tribes to establish standards; and (3) in determining whether to establish Federal standards, consult with tribal officials as to the need for Federal standards and any alternatives that would limit the scope of Federal standards or otherwise preserve the prerogatives and authority of Indian tribes. Sec. 4. Special Requirements for Legislative Proposals. Agencies shall not submit to the Congress legislation that would be inconsistent with the policy- making criteria in Section 3. Sec, 5. Consuftuffon. (a) Each agency shall have an accountable process to ensure meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications. Within 30 days after the effective date of this order, the head of each agency shall designate an official with principal responsibility for the agency's implementation of this order. Within 60 days of the effective date of this order, the designated official shall submit to the Office of Management and Budget (OMB} a description of the agency's consultation process. (b} To the extent practicable and permitted by law, no agency shall promul- gate any regulation that has tribal implications, that imposes substantial direct compliance costs on Indian tribal governments, and that is not required by statute, un[ess: (1) funds necessary to pay the direct costs incurred by the Indian tribal government or the tribe in complying with the regulation are provided by the Federal Government; or (2) the agency, prior to the formal promulgation of the regulation, (Al consulted with tribal officials early in the process of developing the proposed regulation; (B) in a separately identified portion of the preamble to the regulation as it is to be issued in the Federal Register, provides to the Director of OMB a tribal summary impact statement, which consists of a description of the extent of the agency's prior consultation with tribal officials, a summary of the nature of their concerns and the agency's position supporting the need to issue the regulation, and a statement of the extent to which the concerns of tribal officials have been met; and (C) makes available to the Director of OMB any written communications submitted to the agency by tribal officials. [c) To the extent practicable and permitted by la,v, no agency shall promul- gate any regulation that has tribal implications and that prc_empts tribal law unless the agency, prior to the formal promulgation of the regulation, (1) consuhed with tribal officials early in the process el developing the proposed regulation; {2] in a separately identified portion of the preamble to the regulation as it is to be issued in the Federal Register, provides to the Director of OMB a tribal summary impact statement, which consists of a description of the extent of the agency's prior consultation with tribal officials, a summary of the nature of their concerns and the agency's position supporting the Federal Register/Vol. 65, No. 2!8/Thursday, November 9, 2000/Presidential Documents 67251 i ,,, ,,,,, ,, .................... need to issue the regulation, and a statement of the extent to which the concerns of tribal officials have been met; and (3) makes available to the Director of OMB any written communications submitted to the agency by tribal officials. (d) On issues relating to tribal self-government, tribal trust resources, or Indian tribal treaty and other rights, each agency should explore and, where appropriate, use consensual mechanisms for developing regulations, including negotiated rulemaking. Sec. 6. Increasing Flexibility for Indian Tribal Waivers. (a) Agencies shall review the processes under which Indian tribes apply for waivers of statutory and regulatory requirements and take appropriate steps to streamline those processes. (b) Each agency shall, to the extent practicable and permitted by law, consider any application by an Indian tribe for a waiver of statutory or regulatory requirements in connection with any program administered by the agency with a genera[ view toward increasing opportunities for utilizing flexible policy approaches at the Indian tribal level in cases in which the proposed waiver is consistent with the applicable Federal policy objectives and is otherwise appropriate. (c) Each agency shall, to the extent practicable and permitted by taw, i render a decision upon a complete application for a waiver within 120 days of receipt of such application by the agency, or as otherwise provided by law or regulation. If the application for waiver is not granted, the agency shall provide the applicant with timely written notice of the decision and the reasons therefor. (d) This section applies only to statutory or regulatory requirements that are discretionary and subject to waiver by the agency. Sec. 7. Accountability. (a) In transmitting any draft final regulation that has tribal implications to OMB pursuant to Executive Order 12866 of September 30, 1993, each agency shall include a certification from the official designated to ensure compliance with this order stating that the requirements of this order have been met in a meaningful and timely manner. (b) [n transmitting proposed legislation that has tribal implications to OMB, each agency shall include a certification from the official designated to ensure compliance with this order that all relevant requirements of this order have been met. (c) Within 180 days after the effective date of this order the Director of OMB and the Assistant to the President for Intergovernmental Affairs shall confer with tribal officials to ensure that this order is being properly and effectively implemented. Sec, 8. Independent Agencies. Independent regulatory agencies are encour- aged to comply with the provisions of this order. Sec. 9. General Provisions. (a} This order shall supplement but not supersede the requirements contained in Executive Order 12866 (Regulatory Planning and Review}, Executive Order 12988 (Civil Justice Reform), ON{B Circular A-19, and the Executive Memorandum of April 29, 1994, on Government_ to-Government Relations with Native American Tribal Governments, (b) This order shall complement the consultation and waiver provisions in sections 6 and 7 of Executive Order 13132 (Federalism). (c) Executive Order 13084 (Consultation and Coordination with indian Tribal Governments) is revoked at the time this order takes effect. (d) This order shall be effective 60 days after the date of this order, 67252 Federal Register/Vol. 05, No. 218 / Thursday, November 9, 2000 / Presidential Documents mlllll ii i n mlllll i i ii imlllml i i i Sec. 10. Judicial Review. This order is intended only to improve the internal management of the executive branch, and is not intended to create any right, benefit, or trust responsibility, substantive or procedural, enforceable at law by a party against the United States, its agencies, or any person. THE WHITE HOUSE, November 6, 2000. [FR Doc. 00+29003 Filed 11-8 0fl; 8;45 am] Billing code 3195-01-P Federal Document Clearing House Copyright (c) 2002 EMediaMillWorks, Inc. Testimony July 30, 2002 Senate Indian Affairs Tribal Trust Fund Overhaul Statement of J. Steven Griles, Deputy Secretary of the Department of the Interior and Neal McCaleb, Assistant Secretary for Indian Affairs Committee on Senate Indian Affairs Trust Reform July 30, 2002 Mr. Chairman and Members of the Committee, it is a pleasure for the two of us to appear before you again on a panel with the two co-chairs of the joint Department of the Intefior/Trbal Leaders Task Force on Trust Reform, Ms. Sue Masten, Chairwoman of the Yurok Tribe of Northern California, and Mr. Tex Hall, Chairman of the Three Affiliated Tribes of North Dakota. We are here today to brief the Committee on the status of the work of the Task Force. Last week, the Task Force held its seventh meeting in Portland, Oregon. Earlier meetings were held around the country in Shepherdstown, WV, Phoenix, AZ, San Diego, CA, Minneapolis, MN, and Bismarck, ND. The Task Force was formed last December in response to the Department.s proposal to create a new organizational unit called the Bureau of Indian Trust Asset Management, which envisioned the consolidation of most trust reform and trust asset management functions located throughout the Department into a new bureau. This proposal was subsequently strongly opposed by the tribes. The Task Force is charged with providing proposals to the Secretary on organizational alternatives for the management of De/kndants' Exhibit No,4 Motion for Partial S/J Trust Management trust services within the Department. The Task Force's purpose is to evaluate organizational options and to submit to the Department one or more alternatives to reorganize the trust asset management system. The composition of the Tribal membership of the Task Force was determined by all the tribes and represents a broad cross-section of tribal interests on a regional basis. The Task Force consists of two tribal leaders from each region, with a third tribal leader, from each region, acting as an alternate. Members of the Federal team consist of senior Department officials, including myself and Assistant Secretary McCaleb. The members of the Task Force have all come a long way personally and professionally as participants in this group. The two of us have attended every one of these meetings, as have our co-chairs here with us today. As we talk about the future of the Bureau of Indian Affairs and work together to resolve issues related to how the federal government carries out its trust responsibility to Indian people, we are building another kind of trust among ourselves. While we have reached agreements on many key issues related to the organization of the Department of the Interior and management of our trust functions, our work is not done. We will be meeting in August in Anchorage Alaska, and have other meetings scheduled. On June 6, at a meeting of the National Congress of American Indians, the Department at the recommendation of the Task Force solicited comments on various options proposed by the Task Force for restructuring of the Department with respect to trust. We received back from the Tribes detailed and thoughtful comments. _ ..... We heard the following themes: - The Federal Govemment.s commitment to self-governance and self- determination must not suffer as a result of federal trust reform. - Trust reform must not result in diminishment of the government.s trust obligation to Indian people. - There is a need for creation of a high level position within the Department who will be the primary individual within the Department responsible for ensuring that the trust asset management responsibility is carried out appropriately throughout the Department. - Trust asset management issues must be addressed at the regional and agency level of the Bureau of indian Affairs (BIA). - There can be no one-size-fits-all solution. Trust reform must recognize that there are three models for receiving services: through self-governance compacts, self-determination contracts, and direct services from the BIA. - There is no bright line between fiduciary trust asset responsibilities and other trust responsibilities. We must ensure more accountability within the current BIA. structure. - Management of trust services and trust resources must be kept at the local level. - We need a clear definition of the trust duty and responsibility for management of trust assets. - There must be oversight of the BIA by an entity that has the authority to compel and enforce corrective action. As the above illustrates, reform of our current system is not an easy task. At the Task Force meeting last week, we reached agreement as a group to recommend that Congress establish a new position, an Under Secretary for Indian Affairs, who would be appointed by the President, subject to confirmation by the Senate, and would report directly to the Secretary. The Under .......... Secretary would have direct line authority over all aspects of Indian affairs within the Department. This authority would include the coordination of trust reform efforts across the relevant agencies and programs within the Department to ensure these functions are performed in a manner that is consistent with our trust responsibility, as well as a number of other duties carefully hammered out between the Department and the Tribai Leaders on the Task Force. We believe reaching consensus on the creation of this position and the duties of this new senior official was a major accomplishment of the Task Force. We have also reached agreement on creation of an Office of Self- Governance and Self-Determination within the Office of the Secretary, reporting directly to the new Under Secretary for Indian Affairs. This will enhance the abilities of the tribes that are interested in moving toward more compacting and contracting to carry out the services due to Indian tribes. Similarly, we have agreed that any legislation should also include the creation of a Director of Trust Accountability reporting directly to the Under Secretary who will have the day- to-day responsibility for overseeing the trust programs of the Department. Perhaps most importantly, last week in the working group we reached agreement on a restructuring of the Bureau of Indian Affairs. The Department and the Tribes agree that our trust duty requires a better way of managing than has been done in the past. The Department.s longstanding approach to trust management needed to change, and this change must be reflected in a system that is accountable at every level with people trained in the principles i of trust management. When the we arrived in Portland last week, the Department brought a proposal to create Trust Centers at the regional level within the Bureau and trust officers at the agency level, tt was the best way we could see to ensure that decisions made at the regional and local level were reviewed to ensure that we were meeting our fiduciary trust responsibility to both tribes and individual allottees. Our tribal counterparts on the Task Force had a very different view of what changes needed to be made within the Bureau. The tribes expressed concern that these trust officers would involve themselves in most of the day-to-day activities at the agency level without being answerable to the Superintendent or the Regional Directors. The differences between us seemed too great to resolve in just a few days. However, once we stopped talking in concepts, rolled up our sleeves, and took the time to put on the table our real concerns, we were able to develop an organizational model that does its best to ensure that the Federal Government can exercise its fiduciary trust duty, and, at the same time, ensure that tribal governments can be active managers, to the degree desired, of their own trust assets. A copy of the working group consensus reorganization proposal is attached to this testimony for your information. This reorganization can be done administratively and does not require additional legislative authority. We believe that it is likely to have the greatest positive impact on the future management of trust assets. As we mentioned above, the work of the Task Force is not complete. We are exploring the possibility of creating a commission with oversight responsibilities for trust funds management. We have reached agreement within the Task Force to recommend creation of an independent commission on Indian trust funds within the Executive Branch. While we have mutual agreement on many of the functions this commission should have, we have mutual disagreements as well. We are not in agreement on the Commission.s duties and we have not discussed the Commission member qualifications or term of service. We have presented a number of commission ideas that we plan to discuss with the Task Force at the upcoming meeting in August. We plan to participate with a working group set up by the Task Force whose charge it is to try to resolve these differences and reach consensus on the details of this commission.s duties and responsibilities. Our goal is to have an agreement on this issue at our August meeting in Anchorage. Finally, we were also asked by the tribal members of the Task Force to work with the tribes on draft statutory trust standards presented at our meeting last week. These standards will be carefully reviewed within the Administration in preparation for our next Task Force meeting. We have not reached any agreement on the trust standards. However, we will be having both our attorneys and attorneys at the Department of Justice look at them. This concludes our statement. We would be happy to answer any questions the Committee might have at this time. J. STEVEN GRILES Deputy Secretary Department of the Interior 2002 WL 1763677 (F.D.C.H.) ENT) OF DOCUMENT 2002 WL 1763677 (F.D.C.H.) Trust Related Hearings during the 107 th Congress ......... Oversight hearing on September 24, 2002 Senate Indian Affairs James Cason the role of the Special Trustee I-I.R. 2880, the Five September 18, 2002 Senate Indian Affairs Aurene Martin Nations Indian Reform Act Oversight hearing on July 30, 2002 Senate Indian Affairs Steve Griles Trust Reform S. 22 I2, the proposed July 30, 2002 Senate Indian Affairs NeaI McCaleb Indian Trust Asset and Trust Fund Management and Reform Act of 2002 Oversight hearing on July 25, 2002 Senate Indian Affairs James Cason the OHTA Report to Congress on the Historical Accounting of Individual Indian Money Accounts Oversight hearing on June 26, 2002 Senate Indian Affairs Steve Griles and Trust Reform j Neal McCaleb S. 1340, a bill to May 22, 2002 Senate Indian Affairs Neal McCaleb amend the Indian Land Consolidation Act of 2000 to provide for probate reform with respect to trust or restricted lands. FY-2003 Budget March i4, 2002 Senate Indian Affairs Neal McCaleb Request for Indian Programs ........... -- i Bureau of Indian March 14, 2002 House Steve Griles, Wayne Affairs/Office of the Appropriations Smith, Tom Special Trustee Subcommittee on Slonaker, and Ross Interior and Related Swimmer Agencies Defendants' Exhibit No.5 Motion for Partial S/.[ Trust Management Oversight hearing on February 26, 2002 Senate Indian Affairs James Cason, NeaI the Management of McCaleb, and Tom Indian Trust Funds Slonaker S. 1857, an act to February 7, 2002 Senate Indian Affairs Phil Hogan Encourage the Settlement of Tribal Claims. Oversight hearing on February 6, 2002 House Resources Secretary Norton the Management of Committee accompanied by Indian Trust Funds Steve Griles, Neal McCaleb, Tom Slonaker, and Ross Swimmer Trust Reform March 28, 2001 Senate Tom Slonaker and Appropriations Sharon BlackweI1 Subcommittee on :_ Interior and Related -_ i Agencies Trust Reform March 2 I, 2001 House Tom Slonaker and Appropriations Sharon Blackwell Subcommittee on Interior Oversight hearing on February 28, 2001 Senate Indian Affairs Secretary Norton Indian Issues e,_ROY,_OCOM._RCE co_umEE' FRANK PALLONE, Jm "'""_: ' ' ;':' W,_mN_;'_.N O¢fiCrt ' - '"' ' , _N'_I_CINHENT &HD HAZJ. ADOU$ _'H OJSTRICT. N_W JERSEY _J 4_ _ HOUEE O_E E.Ut._ ' :' ¢ ., ', , , :-.,'- Congrr of tl t Initeb ate :-.:.: of. t qprt tmtatibe ""'"'-"' N_TIOhU_. pAnlr,._ PdEcREA'nom A_D .... J !; _ueuc L4NOS $umc_Mtrr_ O 87,,f4 _R_ .ST. -- _,,,oc_,c,ou_co,,,,,m,: _ta_ington. _ 20515-3006 ,._,s._,,.- ' .... _.-i: Ngw_m._$w.c_N.,I *(_.,_,1 . 1-:. .. COM_dVmCn_O_S V_C_ C_*a_ (732} gd_MIIl_ · ' . cmait'l:_;,n_' Pallor'cOmilil, hoUtl4,G'"'v _ LF.L, Am.OAt PL,n,T_ ': '-' _' 13_0 R't. _H_. #104 '" _ hLIp:l/www.ho_-'-r- gc_il_tlor_ H,..r,.,l_lr, NJ _/"/_.,lfT_l I I_ _'I : : _ (7321 _l,_ -_ - .; . .'., _. · -'., I December 23, 2002 ' '' r Ms. Gaff Norton, Secretary "':.; !! Department of Intedor ........ 1849 C St., NW 5 mj_ ' ''' Washington, DC 20240 ' " Dear Secretary Norton: ':" : 'm' ' . i : ,; ,,C. You wrongly suggested during a press con Ference with Native American :'.:; :': Journalists on December 19 m, that Congress has given a _een liDht to the reorganization .,. 4 of the BIA's trust accounts. Neither Congress, nor any committee of the House or Senate 'Ii; .OK : C: has voted on hfis issue. What really happened is that the Department of the Interior took : . ,: advantage of the Congressional recess to reprogram monies to pay for the reorganization .. without informing tribal representatives exactly what Interior intends to do. It would be : ' wholly inaccurate for you to represent to the federal court in the Cobell case on January .... _: .- 6 th that you have either Congressional approval or tribal approval to move forward with I _'''1 ' trust account reform at this time. ...- When the Interior Department first proposed a reorganization of thc Indian trust I ' b accounts last )'ear, thc House Resources Committee subsequently held a hearing in .... . February 2002, and chastised you for fa/ling to consult with tribes. You agreed to work with the Tribal Leaders Task Force, initiated by NCAI, and to hold a series ofheaxings around Indian Country. But, the Interior Department never arrived at a consensu__ with d ! the task force and summarily dismissed its members this December. ' :: Interior tried unsuccessfully last July to use a stealth maneuver that avoided the _., . : tribes as well as many Congressional friends of Native Americans. It initiated a floor '_.. amendment to the House Interior Appropriations bill in July that would have limited trust · .:' accounting to the years 1985 through 2000. At that time, you avoided both the committee of jurisdiction, the Resources Committee, and the Interior Appropriations ' ' Subcommittee, by bringing the amendment directly to the floor. When tribal - representatives and most members of Congress finally saw the Department's amendment, " they quickly galvanized opposition and overwhelmingly defeated it. ' Now, you are trying to use the same stealth maneuver after the previous Congress finaTly adjourned in November and before the new Con_ess is sworn in, in January. The ::-' reprogramming took place in early December through a procedure that allows the :.j: I [ ', j ";i, } ..,-ao o. ,r_m_= ,_, Defendants' Exhibit No.6 , j Motion for Partial S/J · Trust Management ':). :'" chairman and ranking member of the House Interior Appropriations Subcommittee to i': sign off on a reprogramming of funds within the Interior Department. A switch of '. !:.i':_ funding fi.om one account to another al the Department's request does not imply full · _._r . Congressional approval of the Department's trust account reform. ' ' i } You have yet to make public the details of the trust reform plan you intend to ..... '.' finance with the reprogrammed fimds, or more important, what plan you intend to bring ;'i: _: to the federal court on January 6 th. The letter you sent to the chairman and ranking --_' ... member of the House Interior Subcommittee on December 4 th has some suggestions on '-': ,'.:."_ pages 6 th.rough 9 of how the new proposal differs from the one rejected by the tribes a :')'. :-: year ago, but is lacking in important details. For example, the Department is proposing to .: _..ii !. .. -.: .' create a group of trust officers, but there is very little information about their duties or _. ,; how they relate to the existing BIA. Most important, it does not include trust standards; '" ': without standards, there is no way to measure perfom_ance or to ensure accountability. It .:'-. would be improper for you to move forward with this plan without further meetings with ..... zi.. ..... the Tribal Leaders Task Force, as well as heatings before the Congressional committees ': :; of jurisdiction beginning in lanuary. Failure to do so will simply confirm that you are " keeping it quiet for fear that the plan cannot withstand public scrutiny. '7: I' .':! !!. :._ It is also unlikely that the $5 million sum reprogrammed in December will make . i -'.i much of a dent in trust reform. The Department will likely use that as a down payment to persuade the federal court of its serioumess, but ask Congress to appropriate a lot more "'i)'- - money next year ifil gets judicial approval. I would ask that you forward a complete cost "', breakdown of your trust reform plan, through its completion, to tribal leaders and myself. ., My concern is that you have no intention of coming to Congress in January to :, ._ explain your latest trust reform proposal for fear of a repeat of what happened in July- a " ....._:,":_ real Congressional vote on the floor or in Committee that would disapprove of your plan. '-.,-' From all accounts, your intention is to simply proceed to the judge in the CobelI case on lanuary 6_._before the new Con_ess is even sworn-in, and represent that you have the ; 'i :" approval of both Congress and the tribes. Under the circumstances, my olgy recourse, :..:. and that of my Congressional colleagues is to inform the federal court that your ..'f ' representation is inaccurate. I will be forwarding a letter to thejudge in the Cobell case :.._: so he fully understands my opinion in this matter. :'.,' -:":-.. If Frank Pallone, Jr. Member of Congress :. ,."· .' ,t_l· . . -.,,_ United States Department of the Interior OFFICE OF THE SECRETARY Washington. D.C. 20240 JAN - 3 2O03 Honorable Frank Pallone, Jr. House of Representatives Washington, D.C. 20515 Dear l_lr. Pallone: This is in response to your December 23, 2002 letter concerning the Department of the Interior's Indian trust reorganization plan. Secretary Norton has asked me to respond. Your letter states your belief that the Secretary "wrongly suggested' that Congress has given a green light to the reorganization and that the Department of the Interior "took advantage" of the Congressional recess to reprogram monies without informing tribal representatives of what Interior intended to do. In addition, you state that Interior tried "to use a stealth maneuver" last July in the House Appropriations bill _'by bringing the amendment la provision relating to historicaI accounting] directly to the floor" and that the Secretary is "trying to use the same stealth maneuver" between Congresses. Given the importance of this issue to the Department and the fact that the tenor and tone of your letter suggest you have a great interest in this as well, I am providing with this letter the official transcripts of the consultation meetings held by Interior on the issue of Indian trust reorganization, along with our reorganization charts and Executive Order 13084, "Consultation and Coordination with Indian Tribal Governments." Once you have reviewed and read these documents, both Deputy Secretary Griles, who the Secretary has designated as the individual in charge of trust reform for the Department, and I would be happy to meet with you personally on the reorganization plan .... In November 2001, the Department proposed the creation of a new Assistant Secretary that would oversee a Bureau of Indian Trust Asset Management in recognition of the need for better management and oversight of Indian trust assets. This proposal came after much criticism over the fact that the Department did not have a senior management person whose sole responsibility was management of Indian trust assets, and after findings by the court in the Cobell litigation that meaningful organizational reform was needed. The November 2001 proposal was met with much objection from Indian Tribes, primarily because of the lack of consultation leading up to it. In December 2001, the Senate Appropriations Subcommittee on Interior and Related Agencies requested that the Department resubmit a proposed reorganization after completion of additional consultation with the Indian community, a continued review of the management and organization of the Department's trust program, and further coordination with the authorizing committees of Congress. Defendants' Exhibit No.7 Motion For Partial S/J Trust Management Consultation In December 2001, the Department committed to a consultation process on the issue of trust reform and organizational reform that was, to our knowledge, the most extensive consultation effort ever undertaken by the senior management level at the Department of the Interior on any issue relating to Indian Country. The first meeting was in Albuquerque, New Mexico, on December 13,2001. Eight additional meetings were held in different locations. During these meetings, a number ofcommenters requested a different format for consultation on this issue. Rather than simply providing views on the Department's proposal, the Tribes asked if the Department would participate in a Task Force where the Tribes and senior Departmental officers could sit down together and discuss the organizational issues inherent in trust reform collaboratively. Shortly thereafter, the Joint Tribal Leader/Department of the Interior Task Force on Trust Reform (Task Force) was created. The purpose of the Task Force, as defined in the protocol agreement, was to: "develop and evaluate organizational options to improve the integrity, efficiency, and effectiveness of the Departmental Indian Trust Operations consistent with Indian treaty rights, Indian trust law, and the government-to-government i relationship." · The Task Force planned for and held ten.joint multi-day meetings throughout the country. Meetings were held in Shepherdstown, WV, Phoenix, AZ, San Diego, CA, Minneapolis, MN, and Bismarck, ND, Portland OR, Anchorage, AK, Billings, MT, and Alexandria, VA. Unfortunately, the Task Force did not result in a consensus in how trust reform should be accomplished. The impasse reached by the Task Force however surrounded issues related to trust standards and private rights of action, not organizational structures. The Task Force reached agreement on the creation of an Under Secretary for Indian Trust but the Tribal leaders would not agree with going forward on that proposal without the trust standards and rights of actions provisions which the Administration could not support. Despite this, Deputy Secretary Griles testified in July before the Senate Indian Affairs Committee that the Department would support the creation of such a position by the Congress. Congress did not act on this recommendation, and the Department is without the authority to create such a position administratively. The Department's trust reorganization plan is closely aligned with, and is a product of, the insight gained from the intensive consultation process. Primarily, because the organizational approach is limited to operating within the current statutory structure, it does differ from the organizational approach developed by the Tribal Task Force. Internal Review Over the course of the last year, the Department continued its internal review of its Indian trust practices. The quarterly reports we submitted to the court in the Cobell litigation contain detailed descriptions of this review. Copies of these reports are available on the Department's website. Since early in calendar year 2002, the Office of Indian Trust Transition has been developing a new Indian Trust Business Plan. This will be the first comprehensive operational plan for Interior trust operations. The Mission Statement, Goals and Objectives of the Plan were approved by the managers of affected Interior agencies and by a subcommittee of the Tribal Task Force. The Plan will be a business plan intended to guide Interior's trust management efforts well into the future. We realized that the lack of an integrated comprehensive business model has hampered previous trust reform efforts. Understanding how current trust services are provided by thousands of our employees in hundreds of locations is essential. We therefore have undertaken the meticulous, painstaking work of developing an "As-Is" trust business model that describes what documents are prepared by whom, what decisions must be made when, and what information is needed for each decision. This modeling is being applied to each of the core trust processes: beneficiary services, probate, title, appraisals, cadastral surveys, surface and subsurface asset management and accounting management. Ultimately, the "As-Is" trust business model will provide important information for development of the "To-Be" trust services business modet. Coordination with Authorizing Committees The Department testified on the issue of trust reform six times before these authorizing committees of the Congress. This included a February 6 2002 House Resources oversight hearing on Indian Trust Fund Accounts, a February 26, 2002 Senate Indian Affairs oversight hearing on the Management of Indian Trust Funds, a June 26, : 2002 Senate Indian Affairs oversight hearing on the Status of the Department of the Interior/Tribal Trust Fund Management Reform Dialogue, a July 25, 2002 Senate Indian Affairs hearing on the DOI Report on Historical Accounting, a July 30, 2002 Senate Indian Affairs hearing, on a Legislative Proposal of the Task Force and on S. 2212, the Indian Trust Asset and TrustFund Management and Reform Act of 2002, and a September 24, 2002 Senate Indian Affairs hearing on the Role of the Special Trustee. In addition, both House and Senate Committee staff were invited to the numerous Task Force meetings, and other consuItation meetings, held throughout 2002. Cobell During the consultation process, the Cobell litigation continued. Based on a record that closed in February 2002, the U.S. District Court for the District of Columbia issued an opinion .... on September 17, 2002, holding Secretary Norton and Assistant Secretary McCaleb in contempt of court in their official capacities. In that opinion, the Court addressed the issue of the Department's promised reorganization of Indian trust functions. The Court noted that "For purposes of this contempt trial, it is sufficient for the Court to find that no reorganization has occurred, and, in fact, the Department did not even have a final plan that it was ready to implement at the time the record closed." The Court's opinion orders the Department to file with the Court by January 6, 2003, "a plan for bringing themselves into compliance with the fiduciary obligations that they owe to the IiM trust beneficiaries." The Judge's September 17, 2002 order noted that, despite the fact that the Department had been considering reorganization as a method of improving trust services, no progress had been made as of February 2002, the date the record closed for purposes of the proceedings concluded in September. It is apparent from Judge Lamberth's order that Interior needed to take action to achieve true Indian trust reform sooner rather than later. Reprogramming Request tn order to present to the court a working plan with the money necessary to carry it out, the Department presented its proposed reorganization to the Appropriation Committees before December 6 so that the plan presented to the court on January 6, 2003 could reflect the result of that request. Both Committees acknowledged this fact in granting their approvals this December. Secretary Norton indicated that Congress had given the green light to the reorganization because reprogramming requests of this sort are approved when the committees so inform the Secretary - they are not the subject of a vote by the House or the Senate as your letter implies. In addition, the Department had complied with the December 2001 request of the Senate Appropriations Subcommittee conceming consultation, internal review, and authorizing committee interaction. Court-Re. quested Plans The Department does intend to file with the court in the Cobell case the plans required by the court. Work in that regard has consumed' the majority of the time of much of the Secretary's senior leadership since September 17, 2002. Your letter states that: "It would be improper for you to move forward with this plan without further meetings with the Tribal Leaders Task Force, as well as hearings before the Congressional committees of jurisdiction beginning in January. Failure to do so will simply confirm that you are keeping it quiet for fear that the plan cannot i withstand public scrutiny." The Department consulted on the issue of trust reorganization for almost a year. The Department now has the duty to move forward, taking into consideration the views heard in that consultation, and act. The courts expect that of us as they should. The individual Indians who are pursuing this case expect that of us as they should. We welcome any opportunity to testify before the 108 _ Congress on our course of action. We wilI also be happy to make public the details of our trust reform plan when it is completed and filed with the court. House Appropriations Actions Finally, your letter states that Interior "initiated a floor amendment to the House Interior Appropriations bill in July" relating to limits on historical accounting. The provision to which you are referring was, in fact, included in the Interior Appropriations bill by the-Appropriations Committee prior to floor consideration of the bill, An .... explanation of the provision appears on page 90 of House Report 107-564. The Committee's report speaks for itself, and makes clear that this was a Committee provision, not a provision proposed by the Department of the Interior. Counselor to the Secretary and Director, Office of Congressional and Legislative Affairs ... .. BUDGET _"' United States Department of the interior :JUSTIFICATIONS Fiscal Year 2003 OFFICE OF THE SPECIAL TRUSTEE FOR AMERICAN INDIANS '_ t-fl Recycl_,d Paper _'-'C O0 (2331) 2338 2339 FY _b03 BI.GET _STIFICATIO_ OFFIC_ OP TH£ S'PECtAL TRUSTEE }'OR AMERICAN IN_)i_5 FY _.00_ BUDC,£T JUSTiFICATION OFFICE OF THE SPECIAL TRUST_ FOR A]_I_R_C_ INDIANS iiii , ,. i! i Sustaining efforts currently underway and planned for later this year into FY 2003 is critical to applied for withdrawa_ under the Act was successful in changing legislation to the Tribe's continue progress and address these longstanding trust management issaes_ A majority of these Settlement Act lo change the tmsteeah/p from the Secretary to the Tribe. initiatives are and will continue to be performed by contractors. Some carryover funds may be available in FY 2003 for cerium proiecm, such as Itistorical Accountirtg. FIDUCIARY RESPONSIBHATY The FY 2003 Budget reflects an increased emplmsis on implementation of Indian trust asset [n carrying out the management and oversight of the Indian Irust funds, the Secretary Ins a reform efforts and a funding lc'vel needed to sustain the operational and organizational fiduciary responsibfiity to ensure that trust accounts are properly maintained, invested, and im[2rovements initiated in previous years. Eliminating Indian trust management deficiencies reported in accordance witla the American Indian Trust Fund Management Reform Act of t994, remains one of the highest priorities for the Departmera. The Department is fully aware of the Congressional action, and other applicable laws. magnitude of the fmanc'ml and managerial challenges facing this Department and the daunting task: of implemenqing trust reform improvements in systems, operations and. policies that are When Congress enacted the American Indian 7?ust Fund Management Reform Act in 1994, it critically needed to ensure that the Federal Govertlment meets its fiduciary obligations to recognized the Federal Govermnent's preexisting trust responsibilities_ The Reform Act Indian Tribes and individual American Indians. Funds to continue to address needed trust fur:her identified some of the Secretary of the Interior's duties to ensure proper discharge of managemem operations are also inctuded in the budget for the Bureau of Italian Affairs (BIA). the trust responsibilities of the United States, These include (but are not limited to) the " tollowing: · PROGRAM RESPONSIBILITIES * Providing adequate systems for accounting for and reporting trusl fund balances; The dST manages approxlma_.ely $3. l bi[lido held in trust for Indian TriO, es and individuals. · Providing adequate contJ:ols over r_,eipts and disbursements; Approximately $2.7 billion is held in about 1,400 Tribal accounts for about 290 Tribes. The · Providing periodic, timely reconciliation to assure thc accuraCy of accounts; balance of approximately $400 million is held on behalf of individual Indians in over 252,000 ,, Preparijlg and supplying periodic statements of account performance and balances to open accounts and other 'special trust funds, including 'the Alaska Nati'_e Escrow Fund. Most account holders: and assets held in trust for Native Americans are owned by the trust beneficiaries and therefore are * Eslablishing consistent, wrkten policies and procedures for trust fund management and not Federal a_sets. .' accounting. TRU.qT FUND ACCOUNTS The Reform Act also created the position of the Special TraY:ce for American Indians, who ' ' reports directly to the Secretary. The Office of the Special Trustee for American Indians The Ivatances that..have accumulalcd in the Indian trust funds have resulted from claims and oversees and coordinates Indian trust asset reform efforts Department-wide to ensure the judgment awards, investment income, and revenues from approximately 56 million acreS of establisfunent of policies, procedures, systems, and practices that allow the Secrelary to trust land. Revenues are derived from subsurface 'mineral extractions (coal, oil, gas. and c£fectiveh, discharge tier truer responsibilities. uranium) timber, grazing, and other surface leases. Judgment awards c_mstimte approximately 50 percent of the Tribal funds, while individual Indian funds realize receipts primarily from The Special Trustee also has responsibility for the Office of Trust Funds Management (OTFM) royalties on natural, resource use. tat-,d use agreements, enterprises has, inS a direct refatio2ast_ip and the related financial trust functions_ The Special Trustee therefore was provided authority to trust fund resources, per capita payments, and investment income. Overall, the composition over and responsibility for trust monies of Indian Tribes and individual American Indians_ of the source of Indian trust funds has not changed significantly since April 1993. However, dST, through OTFM has operating responsibility for financial trust service fUnctions, the value of the loads and number of the accounts has grown, n_cluding deposit, investment, and disbursement of trust funds. Additional trust asset Under Title 1I of the Amerzcan/ndmn Trust Fund Management Reform Act of 1994, a Tribe may managemem functions are carried out hy diker interior Bureaus, as follows: volm_tarily withdraw its funds fron_ tmsl, subject to plan approval by the Secretary. As of * Ilia is responsible for the management of non-monetary Indian trust assets (lands, December 31, 200l, only two Tabes had withdra_,_a their ftmd_, and two Tribes have made mmerals, timber, etc.) and the leasing and othes economic activity associated with those parzial withdrawa/s. One Tribe is making partial wltkdrawals as invested securities mature, assets for the benefit of Indian Triges and individual Indians. Approximately 70 percent of their lhnds trove been withdrawn. One Tribe is currently going lhrough thc application process to withdraw funds under PL 103-412 One Tribe that previously i1! i_ _ 3 ,7 Tr ._ · _i' t 'l u "[[ _ul It ...... !. """ -- dST-6 dST-7 2354 2355 Fy _003 BUDGET JDSTIFICAT}ON OFFICE OF Tile SPECIAl. TRUSTEE FOR AMERICAN tNOIANS FY 2003 BUDGET JUSTIFICATION OF[ICE OF TB£ SPECIAL TRtJSTE_ FOR AMERICAN INblANg ,i - hx FY 2(102, the Office of the Special Trustee ;'ill: Activity: Program Operations, Support & lmpravements · Oversee Bureau efforts te imp[emem trust reform; (Dollars ia [hoasands) · Continue implementation of new systems and appropriale reform effi:,rts in managing .--- - Urle.n}r_}.llabt_ I ' - Indian trust resources; ! And Retaled t Program _§03 Change : 2fl01 Changes _ Change_ I Budge} _ F_oml00l · Monitor systems put in place m protect and preServe Indian trust assets and to collect . guhactiv'l_ea I £_timate J (+/_l [ (+/'} / Request F (+t-) and accurately accoum for raceme; _-O-_ffce_f:yrustFu.d_ "mOO)] i6,_'0t_'_---ZB7766 { --_-_4g J 39,Sl5 _ .23,0_ I · Continue outreach efforts to Tribes, Congress, and Deparmlental agencies and offices; _,)la.age_ny_t _0_ ! _:_} ::e0'_ +50_ 3._:_ } "+;*_3 · Hold Advisory Board and 'l'riba_ meetings on trust related issues; and j CHb'"c"_eof Tern;! Records § ) 2, , rTE } 36 t ..... °,k_ _t _ _w I '_ t · Continue efforts within the Department to implememation the recommendations of the EDS reports, as approved by the Secretary. for trust reform activities. :-P'og_U¢'P0['i'ger_ ii_ 742 ;2i_-_ _ 41:013i' [ 4 l"_,_2-ii_ '_ I"0; :; t i .2;_ This activity also provides funding to support a cooperative agreement betwom the InterTribai : {-mp,c,x%n_tizRives , 1 FTE - , +3- ' Monitoring Assoeiatiou (ITMA) and Og'r, and tile costs ot ope,ations for the Office of the '"f_at _40nO} _,,Tlg +t,g_;_-_;_-_ - 14',2;_6_'{i_l Special Trus_ee's Advisory Board. f __'r_ / s.7 L o L.._ +_81 4_g I +s* ] .Iustific.aticm of Prograr_ Ct_auges_ $'ab Activin: Office of Trnst Funds Management ] .............. i ....... 7--'_.3_a-m'_ A_c! vit_/Sub-acth'lty Narrative.: t _ I Badg.t { C_e, I Thc Of'fic_ of Trust Funds Martagcment (OTFM) was established in response to General i .... f R,qae_t I _ ./+z-) T"T;La_. Lx_t_¢/_:i...... _$ u6_'f-_--'" 2,781 { '' _i ! Accounting Office, the InspectOr General, and independen! accounting reports which cited ! ! FTE [ 131 rJ s> ifi ,an, internal control weaknesses including: inadequate training, inadequate separmion of ............................ dulies, mid lack of standamlized policies, practices and procedures An additional $!.51,000 is needed fei _he increased support of activities associated with the inunediate Office of the Special Trustee. £ncluded within this amount is: the .4merwan Indian Trust Fund Mam:gement Reform Ae_ of 1994 provides that the Special I raste_ shall advise on and oversee the Secretary's proper discharge of various trust · $96,000 for short-term, specialized eon{facts or studies tn address various technical responsibilities Thc Special Trustee supports the following trust responsibilities tluough advisnry fiduciary and trust related issues. These studies will pmviOe for trust or O'fFM: fiduciary expertise and advise that is not currently available within the Trustee's immediate office staff'+ * Provide adequate systems for accounting and re-porting trust fund batauces; · Provide adequate con,reis over recerpts and disbursements; · $25,000 for a.ddkional travel costs is needed to provMe f_)r the Special Trustc_ and staff · Provide per/edit, timely reconciliation to assure the accuracy of accounts; to atte_td lke numerous BiA, and Tribal meetings and forams on trust related issues. * Prepare and supply account holders with periodic stalements of their account · 530,000 to provide for the additional space costs associated with increased dST office performance and- with balances of their account, which shall be available on a daily basis; space fequLrements within the Main Interior building. · Establish consistent, written policies and procedures fm trust fired management and accounting; and An additional $100,000 for a total of $450,000 is needed in FY 2P1)3 to support ITMA · Provide a_equate s_affing, supe_qsion and training for trust fund management and activmes. Th. is additional $100.0!10 will provide the organization with resources to conduct accotmling rcgion',d and national meetings, and for a more active 'lribal outreach p_ogram, rrMA represents Tribal views to the Department and Congres, on reconciliation nf pas_ trust _nd OTFM consists of the Office of the Director and the following six divisions: Quality Assurance; activiw and the implementation of trust reforms impacting both Tribal and individual Indians. Trust Funds Systems; Trust Funds Accounting; Trust Fund Selwices; Reporting/Reconciliation; Y[MA is a Tribal membership organization established in 1991, governed 5y a 12-atember and Field Operations. The goals of OTFM are to: board of directors, and employs staff and consultants with expertise in legal, policy, md accounung issues related to trust fund management. u OST-22 i 2357 i 2356 ] _1 {:,_ 201}3 _L'D4.;ET JUS'[IFICATION OFFICE OFTHE _pECIhL TRUSTEE FOIl _.,MERICA_ iNDIANS I '_, 21J.03 a LmDG ET J LJSTIFICATng, N OFFICE OF THE SPEC'IAI TRUSTEE FOIl AMEIRICAN iNDIANS Tile following is Ihe estimated eST Self-Governance compacl cost for IIM Services for FY _, Protect and preserve Indian trust funds, and aecm'ately account for income due 2002: beneficiaries; and 4, Prov:_detm_e:y and responsive customer serviceto account holders· !-'rl.ibe I Amoun! L . Estimate / Cost I OTFM provides professional, technical, md managerial functions refuted to and affecting funds ['(_i;h¢_dra(e_-Sal_s_Kooxena_ (Flathead) _'-_$57,517 [ $i)?;'._8"[-- $67,065 ] held in trust for tndian ']'ribes and individual lltdia.ns, OTFM oversees daily operations and _ _V_..T_on___.rc__._Z.t_Tkt_yS_m._ i_-l_ ........ s[.40m _ '-"-'_-,70_ develops, implements, and directs activities related to Indian trust funds improvement initiatives, i i°_Yi_aia'i'_' i_? ................ __ sdt,gfd__ ............ I -' 1 described under the Improvement Initiatives program elemenl. OTFM operates TFAS and provides a focus on continued improvements to Tribal and nM accounts managemem, including The Trust Funds Accounting System (TFAS) was transferred to OTFM following the e}ectromc werkfiow, cash management improvements, data integrity, and coordination with the successful conversion in April 2000 of all Tribal and Individual Indian Monies trust f_nd B[A on the devolopmen! afire automated trust asset management portion of a Trust As_t and accounts· It is now part of the day-to-day program opiating acfiviues of the OTFM and the ..\ccountmg Management Systems (TAAMS). Additionally, the Cobefl v. Norton litigation funding and FTEs are reflected in the OTFM budget ralher than under Improvement continues to place significant demands on OTFM in terms of trial preparation, responses to hfitiatives. t3laintiff discovery requests, depositions, and t_timony. This program also supports the personnel located in 11 regional offices m_d 50 agency offices. T[-'AS is a commercial off-the-shelf trust accounting system suitable for both Tribal and tim The Alaska, Southwest, and Navejo operations ar_ c,ent_lized. The Eastern Oklahoma Region is accounts and provides the basic accounling, investment, disbursing, and reporting functions partially centralized, with some staff located at the Osage Agency· The remaining regions have cmnmon to commercial trust funds management operations· This system is operateft and s_affat both the regional and agency levels. Field Operations are managed through the Division maiutained b> a contractor, SE1 Investments, Inc. Currently, approximately 253,000 open of Field Operations in Shawnee, Oklahoma. Conversion to TFAS now allows regional and Tribal and IIM accounts are mai.ntaiaed on the system. a._ency staff to.devote their time primarily to cmtome_ services. An account holder can now go to m_y OTFM office and obtain realdUne information on their account. Encoding for TFAS is Fuuds for the OTFM activily principatly support ttte Departmental goal to pro:em and preserve centralized at Albuquerque, NM. Curr_nt OTFM processing of data _o FFAS is very labor Indian trust assets, receipt and accurately account for income due beneficiaries, and provide intensive, since approximately 70 percent of the B_ leasing data is performed manually, that is, timely and re_ponsive customer service to account holders. OLItside of an automated system· Increased activity in leasing, foreslry and other programs will continue to drive data workload increases. Justification et' Pro.g_m Chances: OTFM m_.nages approximately $3.1 billion of f_nds held in trust for Indian Tribes and (dollars in thousands) individuals. Approximately $2.7 billion is held in approximately 1.400 Tribal accounts for 5 I Buatge_ _ Chas_ges approximately 290 Tribes. Approximately $400 million is held on behalf ofindiv/dua] Indians I ltequt._ L (+_') J in over 252,000 accounts and other special trust funds, including the Alaska Native Escrow Y_t _.u_dsM-_nageme-nc S(CTO0) { .... S39,515 { +57,248[ Fund. Most of these assets are held tn trust for Indian Tribes and individual Indians and are FT£. _k 316 L.. +26 j therefore owned by the trust benefciaries and are not Federal assets. eST currently has self-governance a_eelnentS with two Tribes for IIM services. Similar to An additional $7.248 million and 26 FTE5 are requested in 2003 to provide for increased mher nnn-BIA Bureaus, eST provides contract support for compacts and contracts, as well as operating expenses of the trust fund maztagemem programs Of this total increase, $4.748 :mllinn is requcslcd for OTFM headquarters and field office operations and $2.5 million is · " otlu:r support and assistance to Tribes seeking to compact or contract for services. requesmd fog TFAS operations. Headquarters and Field Operatinns $4 748 million arid 32 FTEs including $2·348 million and g FTEs for additioilal operational program costs and stuff in OTFM headquarlers functions located in AIb_lqaerque, NM; and $2 4.(}0 million and 23 FTEs additional operating staff for field offers Conversion to TFAS ,,. '", ..... , ... i i ' '"' """ eST 25 eST-24 l DEPARTMENT OF THE INTERIOR AND RELATED "_';_""_ 2o,:,-'.. AGENCIES _ _' · APPROPRIATIONS FOR 2003 c--:, '..S. Department of the Interic ......... Wa. shington, D.C. 20240 HEARINGS BEFORE A '] _1 SU3( .'0MMITTEE O P TIlE COMMITTEE ON APPROPRIATIONS H _ 0USL 0F REPRESENTATI_,_S ONE HUNDRED SEVENTH CONGRESS SECOND SESSION SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES JOE SKEEN, New Mexico, Chairman RALPH REGULA, Ohio NORMAN D. DICKS, Washington JIM KOLBE, Arizona JOHN P. MURTHA, Pennsy]vania CIIARLES H. TAYLOR, NorLh Carolina JAMES P. MORAN, Virginia GEORGE R. NETHERCUTT, JR., Washington MAURICE D HINCHEY, New York ZACH WAMP, Tennessee MARTIN OLAV SABO, MinnesoLa JACK KINGSTON, Georgia JOHN E. PETERSON, Pennsy]vania NOTE Under Committee Rules. Mr Young, as Chairman .f the Full Committee, and Mr Oboy. ns Ranking Minority Member of the Full Committee, are autk_wized to sit as Members of all Subcommittees. DEHORAH WE^THERLY, LORE'UFA BEAUMONT, JOEL KAPLAN, and CHRISTOPHER TOPIK. Staff Assistants PART 2 Justification of the Budget Estimates Page U,S, Geological Survey .................................................................................... I Minerals Management Service ....................................................................... 436 OffÉce of Surface Mining Reclamation and Enforcement ....................... 713 Bureau of Indian Affairs .................................................................................. 897 DOI Office of Insular Affairs .......................................................................... 1549 DOI Departmental Management .................................................................... 1655 DOI Office of the Solicitor .............................................................................. 2163 DOI Office of the Inspector General ............................................................. 2255 DOI Office of Special Trustee ......................................................................... 2331 National Indian Gaming Commission .......................................................... 2445 Natural Resource Damage Assessment and Restoration Program ...... 2463 U.S. GOVERNMENT PRINTING OFFICE 78-179 WASHINGTON : 2002 1774 1775 [u_fificatiou of Pro er'am and performatl_e, Director, or the Secretary. Cases routinely heard irtclude tb.ose under the Mining Law of 1872, the Federal Lamt Policy and Management Act of 1976, the Surface .Mining Activity: I-Iearin_s and Avn_aLt Control and Reclamation Act of 1977, the Federal Oil and Gas Royalty Management Act - ' ' of 1982, the Endangered Species Act, and the Debt Collection Act. Cases referred to an AI..J for hearing may arise u_der any statute granting jurisdiction to the Department. The table below show.t recent and anticipated changes in the Division's caseload i_ Fl' 2003 Change these areas. FY 2002 Uncontrollable Program Budget fi-ora Estirr_e _hAllg_ Ghsmges _ll,e.ll t_ 2{1_, fl{carings Division - Departmental Caseload ($000] 8,039.1 +158.7 (1.0 8,197£ +158.7 FY 200I FY 2902 FY 2003 Frg 75.0 0.0 0.0 75.0.. 0_0 _,c=tmll Estimate _Jimate _ _,, ,, ,,, , ...... 494 516 496 g)biective: The Office of Hearings and Appeals (OHA) is assigned the quasi-judicial Start of the year ............................................................... 136 130 130 anci appellate responsibilities ot the Department, Through its Hearings Division, ap- Received .............................................................................. 124 1SO 190 Concluded ........................................................................... 516 496 436 peals boards, and Director's Office, OI-tA provides a forum for parties who are affected End ol the year .................................................................. by the decisions of the Department to seek independent review of those decisions. ' In addition to the public lands and other departmental cases, ALJs exercise the Admirdstrative Law Judges (AL]_) in OHA's Hearings Division Secretary's trust responsibility in conductfi_g hearings and rendering decisions in in- and Administrative Judges m OHA's three designated hoards of appeal render deci- dian probate matters. Until recency, the number of new probate cases received each sions in cases pertaining to public and acquired lands and iheir resources, the regula- year exceeded the number of decision_ that the OHA field offices could issue, given t'ion of sttrface coal minmg, contract disputes, appeals from determinations of the Bu- their resources and nomprobate workload, irt tespon_qe, OPtA and BI.& established o reau of Indian Affairs (B1.A). and Indian Probate matters, The Director's Office provides joint project management team to oversee the etiminatiot_ of the probate backlog in both management ovel.'sight and administrative support to the organization as a whole. In organiza tions. They implemented a redesigned process to expedite probate decisions addition, the Director's Office staff conduct_ hearings in personnel grievance cases and and received funding from the Office of the Special Trustee for American Indians that decides various appeals not assigned to one of OHA's three permanent appeals boards, has allowed O}tA to hire addilional judges ,'md support staff. The graph below shows The de,ions rendered by the Director or by the boards of appeal _re generally filial for caseload changes over a 10-year period, while the table on the next page shows recent the Department. _n Problt.e Caseload OHA is headquartered in Arlington, Virginia, with nine field offices lee_ated in Albu-- querque, New Mexico; Billings, Montana; Bismarck, North Dakota; Oklahoma Ci_ ....... s,0_ Oklahoma; Phoenix, Arizona; I_apid City, South Dakota; Sacramento, California; Salt 5,_0 i - ' L4.50C Lake City, Utah; and Twin Cities, Mm-nesota. 4.:_ _ _ _4,00_ [] Received Because of the important role alternative dispute resolutions are taking in the Depart- 3_oa 2.-' "_: _-"- 3,_._ : _3.000 of Collaborative Action and Dispule Resolution was {ormed+ More about tba5 office can _ 3,000_ .. zym' _2.s0. [] Co._,_a_d be found on page DM - 105. _ 2.0_0 4 [2d_ vonain a The following infommrion describes each of OHA's main program act/vities, t,500 4 _-1,500 -,-,ir- al End of t,000 { _l,000 FY Il ea rln _.'s Division _ 4 fl; ALJs preside over hearings in all ca,es required by law that are conducted on the record '9a '95 '96 '97 _98 '99 '00 '01 '02 '03 pursuant to 5 U.S.C. section 554. They also conduct hearings art.dug within the Depart- Fi_cad Year merit that are referred.}? the Hearings Division by one of ©t L_'s appeals boards, the k l_epartmental .Management' DM- 118 ...... Hearings andAppeals t-{carings and Appeals DM- 119 Departmental Managemer,t i( · ' . . 1776 1777 ,. , , .,, and anticipated changes in the probate c-.asekmd Board of Land _ppea!s Hearings Division - Indian Probate C._seload FY 2001 FY 20O2 FY 2003 The Interior Board of Land Appeals (IBLA) exercises appellate authorily delega ted by Starl of the Year ................. _ Estimalg .f,.afilllt_ the Secretary over a wide variety of decisions made by subordinate Departmental .................. 3,836 2,t2t 821 officials relating to the use and disposition of public lands and their resources. These Received ......................................................................... Concluded ................... 2,209 2,_00 3,200 mclude land setectiorts ar/sing under the Alaska Native Claims Settlement Act; the use ................................................. 3,924 3,500 3,500 and disposition of mmeral resources in certain acquired lands of the United States and End of the Year ...................................... 2,121 821 52t itl the submerged lands of thc Outer Continental Shelf; and the conduct of surface coal ..... · mining under the Surface MinLrtg Control and Reclamation Act of 1977. Fmally, the Hearmgs D_vaslon renders heirship determinatiorrs pursuant to the White Earth Reservation Land Settlement Act of 1985 (WELSA). The decisions irt these mat- IBLA employees also assisted in a variety of other tasks for OHA, including adjudicat- ters determine eligibility to receive compensation under the WELSA statute. Recent ing ad hoc appeals; drafting, reviewing, and commenting on proposed and final agency and anticipated changes in the Dt_%ion's WELSA caseload are reflected in the following table, regulations; preparing materials and providing training for agency employees; and developing a cOmprehensive, searchable database of IBLA and other OHA decision,s on Hearings Division - WELSA Caseload the World Wide Web. The recent and antidpated changes La the [BLA's caseload are reflected in the table below. FY 2{301 FY 20O2 FY 2003 Start of the year ........................................ _ _ _ Board of Land Appeals Caseload - 230 211 176 Received ............................................................................ Corlc]udad ................. ,.. . ....... 125 125 125 End of the yeax ....... ,._ . · ................... 144 :60 170 FY 2001 F'Y 2002 FY 2003 Actual Estimate EstimatR ................. 211 176 131 Start of the year .................................................................... 556 575 775 ]_ard of Contract Appea_ Rt_ived .............................................................................. 447 6_ 6_ Concluded ............................................................................ 42B 450 5,50 End of tFue year ..................................................................... 575 775 875 The Interior Board of Contra ct Appeals CIBCA) COnducts hearings and issues decisions on procurement contract disputes pursuant to the Contract Disputes Act of 1978, and on Board of Indian Appeals Other contracts pursuant to Secretaria] delegation. The IBC.A also handles contract cases by delegation from the Environmental Protection Agency, the Office of Personnel Mar_ The Interior Board of Indian Appeals (IBIA) exercises the Secretary's trust responsibility agen-te_t, and the Peace Corps. In addil_on, the IBCA has jurisdiction over Department in deciding appeals from decisions rendered by officials of the BIA. It also decides of the interior and Department of Health and Human Services contract and grant dis- appeals of decisions rendered by the Hearings Division's ALJs in Indian probate cases, putes invol_rng indian tribes pursuant to the Tribally ControUed Schools Act and the and from inheritance determinations under WELSA. Smce the issuance of new regu]a- htdian Se/f-Determination and Education Assistance Act Amendments'of 1988. The hens implementing the Indian Self-Determination Act in 1996, the IBIA has been receiw II3CA bas experienced considerable success in recen t years in encouraging early settie- mg appeals from pre-contracting decisions made in the Department of Health and ments through alternative dispute resolutiort negotiations. The recent arid anhctpated Human Services, as well as those made in the Department of the Interior. changes in the IBCA's caseload are reflected in the table below. The IBLA also receives appeals under BLA's new regulations concerning Federal ac- Board of Contract Appeals Caseload knowtedgment of Indian tribes_ These cases require a substantial expenditure of time because of their voluminous records. The 1BIA continues to receive an increasing nun- FY 2001 FY 2fl02 FY 2003 bet of appeals involving tribal government disputes and acquisitions of land in trust_ Start et the year .......... _ _ /h,s_l_l_ Both Of these areas are highly sensitive, with impacts not only on the Department and ............... 192 ]60 150 CortctudedReceLved.............................................................................................. 87 90 85 the Ixlbe involved, but also on other Federal and state agencies working with tribes. Irt ............................................... 219 100 100 FY 2002 and 2003, the 1BIA anticipates receiving additional probate appeals because of End of the year ............................................................... ;60 1.50 135 the increased number of ALJ probate decisions. '-' , ....... . Departmert_at Management DM - 120 Hearings and AppeaLs Hearings and AppeaLs DM - 121 Departmental Management 1778 1779 The recent and anticapated ch_ges m the IBIA's caseload are reflected in the table the processing of Indian probate cases by the two organizations. Probate training was below. It should be noted, however, that the Department's planned reorganization of provided to all Hearings Division staff, many who were newly hired the prevfons fiscal Indian trust fi.Lnctions might affect the IBLA's future workload in ways t_l-mt cannot yet be quantified, year. OHA published an interim rule to update its probate regulations in light of new probate procedures adopted by BIA five months earlier. A wide area network has also been installed to link all field offices. These actions significantly increased the I-tea:rags Board of Indian Appeals Caseload Division's ability to reduce its current backlog of probate cases and prevent future backlogs from developing. FY 2001 FY 2002 FY 2003 Stltrt Of the year ............................................................ .,Actual _ Estimate Also in FY 2001, OHA unveiled a new Web site (http:/._L_.a. ri_.dappea]s. OoLgovL i Recetvcd ..... 5_ 96 96 Concluded ....................................... 203 175 175 that provides access Io thousands of IB/A and IBLA decisions in a searchable database. ....................................................................... I 175 175 Developed with help from the Bureau of Land Management, the Minerals Management End o£ the year ................................................................... 96 96 Service, and BIA, the new site has already proved to be of tremendous benefit to OH-A __ judges and staff, the bureaus, and the public_ In the first few months of FY 2002, OILA published a final Indian probate rule, complet- The Director's Office decides all appeals to the Secretary which do not he within the lng the process of updating its probate regulations to bring them into harmony with appellate review jurisdichon ot an established appeals board and are not specifically l]lA's. Additional trai.ning was provided to all Hearings Division staff on both Indian excepted in the delegation of authority to the Director. The Director may appoint OHA probate and Departmental cases, The OHA headquarters office was brought within the _udges or attorneys to conduct hearings and may appoint ad hoc boards of appeal, wide area network, greatly facilitating the sharing of information between headquarters Cases heard by the Director's Office include Reclamation Reform Act acreage limitation and the field offices. appeals, property boards of survey appeals, appeals relating to civil perm!O, es assessed under the Endangered Species Act, the determination of relocation assistance benefits, FY 2002 and FY 2003 Planned Activities: rental rate adjustments for Goverm'nent-furniahed quarters, National Indian Gaming Act Commission appeals, and other specfial cases. Other quasi-judicial responsibilities By the end of FY 2002, OH_A expects to eliminate its present backlog of probate cams of the Office include responsibility for personnel grievance appeals, assignment of over 12-months-old. Thereafter, the Hearings Division expects to decide virtually all personnel to hold hearings under the Debt Collection Act, and rulemaking hearings or new probate cases within 12 months of the date they are received. OHA and BIA will other public hea .rings required by law or regulation, or otherwise determined necessary collaborate on further revisions to both orgardzation's probate rules as necessary to or desirable by the Deparm-_ent. The recent and anticipated changes in the Dire_or's incorporate changes resulting from the recent Indian Land Consolidation Act Amend- Office caseload are reflected in the table below, ments and any new probate-related legislation that may be enacted. Director's Office Caseload OHA is also in the process of drafting new regulations governing the nature and timing of procedures for resolving non-probate cases brought before the Hearings Division, F'Y 2001 ?_ 2002 FY 2003 The proposed amendments include a section implementing the Administrative Dispute Start of the year ................... Actl_ _l_ma_.e Estima_ Resolution Act of 1996. The objective is to identify and facilitate ADR procedures, on a Received ....... ' ........ " 293 342 302 ................................ 13_ 140 _40 strictly voluntary basis, in order to reduce the parties' expenditures of urne and money Concluded ........................................................................ End o_ the ear S9 lS0 200 and the contentiousness often associated with adjudicatory proceedings. OHA plans to Y .................................... 342 302 242 publish proposed regulations in FY 2002 and final regulations in FY 2003. Major Accomp!ishmentso_ogl Planned Activities Pro,ram Change_ 2 ' : None. FY 2O(B ired FY 2002 Accomplishmentc: During FY 2iX)l, OHA and BtA implemented a new probate tracking system to expedite Departmental Management DM _ 122 HearIngs and Appeals Hearings and Appeals DM - 123 Departmental Management Nafi_ral Resources [_L.hra_ U, $, Department of the k_[Ql: _ F _'_: DEPARTMENT 0__°]__ AND RELATED _..? _:: AGENCIES APPROPRIATIONS FOR 1996 :x: _:',' !:* _,5 i!, p4.,a ,.' :: HEARINGS _L_J_, [ _Eror_ i _? SUBCOMMITTEE OF THE !: ': COMMITTEE ON APPROPRIATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED FOURTH CONGRESS FIRST SESSION SUBCOMMITTEE ON THE DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES RAI_H REG_ Ohio, Chairman JOSEPH M. McDADE, Pennsylvania SIDNEY R. YATES, Illinois JIM KOLBE, Arizona NORMAN D. DICKS, Washington JOE SKEEN, New Me'co TOM BEVILL, Alabama BARBARA F+ VUCANOVICH, Nevada DAVID E+ SKAGGS, Colorado CHARLES H. TAYLOR, North Carolina GEORGE R. NETHERCI.TIW, JR., Washington JIM BUN'N, Oregon NOTE: Under Commi_:_,s Rules, Mr. Livinb_ton, as Chairman uf the Full Committee, and Mr. Ob_y, as Ranking Minonty Member of the Full Committee, are autho_qzed to ii_. as Members of ail Subcommittees, DEBORAH WEAT}iERLY, LORET'TA BEAUMONT, MARK MIODUSKI, and JOEL K._, Staff Assistants PART 2 Justification of the Budget Estimates Page Geological Survey .................................................................... 1 Minerals Management Service ............................................. 303 Bureau of Mines ....................................................................... 493 Office of Surface Mining Reclamation and Enforcement .......................................................................... 615 Bureau of Indian Affairs ........................................................ 773 Territorial and International Affairs ................................. 1201 Printed for the use of the Committee on Appropriations U.S. GOVERNMENT PRINTING OFFICE 88-940 O WASHINGTON: 1995 Fcic _alc by thc [:S. (}o,.'emmem PnnIing or,icc $u_rintenden[ ot Dot. umcnts. ('kmgircssional Sakes ()_t_cc ¥Va:.hin_!on. DC 2c_n2 ISBN 0-16-046960-0 Defendants' Exhibit No. 10 Motion for Partial S/J Trust Management 96,5 lustif_tion of Program and Performance compliart_ with for royalties paid Activity: Area Office Operations 1 pm_ under SubactivRy: Trust Services u-cas to provide nt negotiations. · " . .. -'_'. '_'_'_. _*_ 'c_, ml rights, royalty _ · . a_ ..a _ n._ ist in monitoring p_;,m _ ?.mm . o.-'n_ _ _ _ u,,n , o.._, i dt revisions, coal Fimmial Tr'a_ $ervicrs $(000) 2.390 5g 0 2,448 58 tses and pro¥ide b'TE 55 0 0 55 0 i ral development. Trust _. _ $(00_) S12 17 0 829 17 I1 o o 11 o All _ Indian Rights Protection $(000) _ 17 -9 0 508 -9 FIE 6 0 0 6 0 Real Esme Servic_ $(000) 2,521 _0 0 2,60i 80 FTE 42 0 0 42 0 Land Tit[_ and R2.:.'theWhole_XHouse'"ao:_t?'?-:'..._,..,.'on._,e:, sta._e,--, of - . the Union and.ordered to. be 'p 'rinted,_-, -- :i_? · :_t; _ ...... . ..... . ....... , .- Q_ -,'. _. .._.r__,._ .,. .... . - .. . . ¢_' · :'-? i r. REOULA, from.the COm?it._'..0zi:A_pz:oP'riations, · ._.,' ;, . .. L .... .. 1.,!:: ;., - ,. REPORT L . .. - , .: -__;._..,. .......... . r to"geth'er' w_'-_'i_!':"' ' :" .... i:?t_ ........ :.._ -.,-!.- ;._. DISSENTING,VIEWS ' ' i:'_. [To accompany H,R.- 1977] : The Committee on. APPropriations .'s ': :_::l'_'e' ro_io_.g. _pO_: _ _::' " explanation of. the .acC°_'Paz!_ng: bill.':m'.aldn_,iippropriations for the '" :. Department.of. the Interi_l_. '_id.i_elated"_A_eM'{es. i%r the fiscal year /_:' ending September 30, '1996,. the" bill pr0viil'es/regular annual appro- _: priations for' the Department of the Interior(except the Bureau of _'1:I' ' _Recl.amat!on) and".for, other__lated: iage'ncies, :'inNuding the Forest i'_!_ oemce, _ne vepar_mentlO/Energy, the Indian Health Service, the _/;:-i' Smithsonian Institution,_ and the National Foundation on the Arts and the Humanities ':_,[..... ':.' .: ': .'. .... '1'._ ": _Zp_' _,' '.' .' _..' .... -.- . _.1_ _ i_.-' CONTENTS _?. ' 7>. Pege .um_er !'_'. Department of the Interior:. ' ' aa _ ir _. Bureau of Land Management ................................................. ...... 2 12 ,.._,._i!. .... National ParlFSe'rvice'..._...' ........... ' . . _.. ...... . .. "30 . _U.S. Geo]bgic__Su_ey .... 'L._.,... '"i"j[_i'7'YT'77'.'"7_i'-7'"[J.'.' .......... - 15 ":? 30 ,Minerals Management ..................................................... 18 ..... 39 Service'....._'...;'. .............: ....... ............................ 21 43 Bureau Df Mines .................. , ................ ; ...... ... . ...... Office of Surface Mining Reclamation and'En?o'_ment"ii!_;ii_i_il 23 ' 47 ?._ 24 48 _s" Bureau of Indian Affai_ ..... ; .............. "': 91-751 ...................... ' ......................... 27 51 !--. ':· ,-':i_i&,i:,, _ _ :_'. :_' :: ..... ':.x -' ?'_.',-¢'_S;!'!;-L_[?_i¥_'¥i_.:_/_.;:`'?,:_' ,-'-. ._ ::.. - . .. .'-.·..:.'-...-..; ..,_,:_'._-. Defkndants' Exhibff No. 12 Motion lbr Partial $/J Trust Management · · :·· /···i:':_? · _: i!i . . . ... · ,- · '.. :.:. .} '_ -.., · · . . 'yr. 51 "'a "lo. 'vin "?'_istilig year ·1996 is $18,000.000. Bill language also is included to permit dis pp . g'"' . ..... states'to ..u_ Prior:year carryover funds from the emergency pro- ,- . __-'"; ' "_..? ,' _.' _*_' '"_'" ce Mining tio_make '_he gram without being subject to the .25 percent statutory limitation · per State. The committee also has recommended bill_ lan)guageo.o00 ,lete its_environmental roposed notice_of.rUle_ which wodld':'fundminimum _ program State grants':_.at $1,500, · '' ' .... per'State' · _' ' ........ *'_'"' 'i. -: ..,: _,_,;,_ . _ BUREAU OF L,-_D_'_I AFFAIRS ..... :::.}} ,: $182,423,000 - OPERATION OF INDIAN PROGRAMS · .:-... · . '..;:t..: ;*'.·.·_ .................. _ : 185,120,000 : -._'_ '/ · ': .....:;w:_ iiiiii]iiiiiiZliiii 176_327,000 Appropriaiion"enact_!_'i_J5 ' ._i ...._i ......................................................... $1,519;0i2;000 Recommended, 1996 ...L ..............'..:........................................................ i,ovo,/ , . :....:/_: :: 6,096,000 .......... ....' _ :- 8;793,00(1 Comparison; .... .--_..,_ ........ ; ..... ' "_'; _' ":'" _ ' :" Appropriation, 1995 ............. ......; ..................................... ; ........... '._ -" '''_' 10,235.000 : ;_y,:_i ;ion 0f:$i176;327,0® for : '}Fliudget estimate, 1996:;. .........;....; ........ ........... .,-................... ;.-.-.--;':' _ 101';065,000 decrease' of $8;793;000 elow the-:. 1995.'"funding The'Bureau of Indian Affairs was created in 1824, its mission is :.:_},!j _n and the budget.esti_ founded on a government-to:government relationship and trustre- , .:__ able: "; , -i :' SponsibilitY that results from treaties with Native groups. 'the _u- : . · reau delivers services "to over one million Native Americans i.i:.i;'- '.' .: through 12 area offices and 83 agency offices. In additioll, the Bu- -,.,..,_ "' '_"'" reau provides education programs to Native Americans through _the ,.,,._'TA _";I_ ,°I_,_I','Z operation of 117 day schools, 56 boarding schools, and 14 dor- ,#.,,, ,,._ _.,,, mitories. Lastly the Bureau administers more than 46 million acres '_ ._ -- of tribally owned land. ,.,,, ,.m _.- Budgetary constraints coupled with significant reductions in do- ,ii. 7_1' 2IL' IKKI -t,73m ...... mestic discretionary spending has resulted in the needto achieve _'-E ..... ' ..... :,_L? savings for all of the agencies under the jurisdiction of the Interior __. _ -- Subcommittee. In light of this fact, the Committee's recommenda- ,,, m -,- tion for the Bureau of Indian Affairs assumes that pay and fixed ,._ ,.,, · -m cost increases will be absorbed by the Bureau and that no new ini- ,.,, ,_,: _, tiatives will be funded in fiscal year 1996. .... The amounts recommended by the Committee for fiscal year '#"_ '_'"' '*'"* 1996 compared with the budget estimates by activity are'as follows: o initiate the Ai_palach- :id mine drainage prob- es of streams. The Ad_ purpose. inistration's request to am (RAMP), _which was established 'capabilities _rojects including those interests of eliminating tministrative costs, the ..... ......... _all ' o lmr:_,t0r _,'sistanCe ainis_r_fifi0n; stlice::sUffi - in 1996 "t° 'mafnta'm; an_ ' vill review the need fol_ ecommended /6h_inuing naintaining the Federal ing expenditures in any ,priated for Federal and f. recommended for fiscal ...... _..... .,' ..... _* '. _?,¥{':',.L_-V'..:./_-:_' . ........ .,e::_.,.-_: .. ,. . _. · ,' _:,;._ ,,_[;??:".: ...._:, f_: :..;_- · · : ;."/.-_9_ ': :?:!