B.I.T.A.M. or Fight 'Em: Redifining the Federal-tribal Relationship through the Reorganization of Indian Trust Asset Management

Catherine Baker Stetson
Derril B. Jordan
Stetson Law Offices, P.C.

The Department of the Interior proposed by press release on November 15, 2001, to create a new bureau within the Department to be responsible for the management of assets held by the United States in trust for individual Indians and tribal governments. The proposal was prompted by the ongoing litigation in Cobell v. Norton, Case No. 1:96 CV 01285 RCL (1996), and the reports the Department commissioned from Electronic Data Systems (EDS) analyzing the Department's trust reform efforts.

Cobell is a class action suit against the United States alleging that the United States has breached its trust responsibility in the management of over 300,000 Individual Indian Money accounts (IIM accounts) held for the plaintiffs. The IIM accounts hold the revenues generated through Department-approved leases for mining, oil and gas development, grazing, logging, farming and other revenue-generating uses of land that is held in trust by the United States for individual Indians. The district court found that the United States' mismanagement of the IIM accounts amounted to a breach of the fiduciary duty it owed to the plaintiffs. See Cobell v. Babbitt, 91 F. Supp. 2d 1, 58 (D.D.C. 1999), aff'd sub nom. Cobell v. Norton, 240 F.3d 108 (D.C. Cir. 2001).

EDS and the Cobell court have identified numerous problems that have beset the Department's trust reform efforts. The five primary problem areas are: (1) the lack of an overarching business model for trust management activities, (2) the need to consolidate the reform process under the authority and leadership of one accountable person, (3) insufficient communication and coordination between different offices in the Department that are engaged in trust management and reform, (4) the lack of uniform guidelines and procedures, and (5) a shortage of resources, both human and financial. The Department has generally concurred with EDS' recommendations and has proposed the creation of the Bureau of Indian Trust Asset Management (BITAM) as the remedy to the problems.

The Structure of BITAM and the Division of Duties Between BITAM and the BIA

As developed to date, the Department's proposal provides for the creation of BITAM, a bureau that will be under the direction of an assistant secretary for Indian Trust Asset Management, a new position within the Department. Accordingly, BITAM would not be under the direction of the assistant secretary of Indian Affairs. BITAM would be responsible for the management of all Indian trust assets, tribal as well as individual, including oil and gas, coal, hard rock minerals, and timber. Management activities include asset use (e.g., approving leases), asset preservation and protection (e.g., forest management and environmental protection), and accounting for the income derived through asset use. The Cobell litigation does not address the management of tribal trust assets, and, in this respect, the BITAM proposal goes beyond addressing issues raised in that case.

BITAM would consist of offices responsible for probate, appraisals, natural resource management, trust asset accounting, records management, and historical trust accounting. There also would be offices for contract and compact administration, and administration and finance, as well as a trust management program center. A Director would oversee the day-to-day operation of BITAM, though it is not clear at this time if the position would be filled as a career position or as a political appointment. A Board of Advisors would advise the Director.

All of the functions to be transferred to BITAM have traditionally been part of the core mission of the BIA, so the creation of BITAM would entail the transfer of these functions from the BIA to the newly-created bureau. Under the Department's proposal, the BIA would remain the chief conduit for carrying out the government-to-government relationship with tribes and would continue to be responsible for law enforcement, road construction and maintenance, social services, economic development, and education (although the President's 2003 budget proposes to outsource much of BIA's education management responsibilities). Both the Department and EDS characterize the division of tasks between the BITAM and the BIA as a separation based on trust and non-trust functions and duties, with BITAM being responsible for so-called trust duties.

Tribal Reaction

The Department's schedule for consultation with tribes about the proposed reorganization was published in the Federal Register on December 5, 2001 (66 Fed. Reg. 63306), and a number of consultation meetings have been held in cities across the country since. The comment period, as of the date of this writing, has been twice extended from January 15 and is now February 28, 2002.

Tribes have been overwhelmingly opposed to the creation of BITAM. Tribes are upset that the Department proposed the reorganization without first consulting with them and are concerned that the transfer of staff and financial resources to BITAM will weaken the BIA. Tribes also generally reject the notion that Interior performs non-trust functions or that its trust duties are limited to the protection of physical assets and money. To tribes, the trust responsibilities of the United States are part of an all-encompassing relationship that includes not only the management and protection of physical assets and accounts, but also the provision of health and educational and social services, economic development, and the protection and enhancement of tribal sovereignty and self-determination. Tribal leaders believe that the separation of trust functions from "empowerment functions" will relegate the BIA to an insignificant social services agency. From there, the tribes foresee the ultimate destruction of the BIA by the transfer of the delivery of services to other federal agencies, such as the Departments of Justice, Health and Human Services, Transportation, and others. In no time, the tribes fear, the government-to-government relationship will be a thing of the past.

While most tribal leaders accept the protests of Secretary Norton and Assistant Secretary of Indian Affairs McCaleb that such is not their intent, tribes nonetheless regard such a result as the inevitable outcome of stripping the BIA of so many of its core responsibilities. Though tribal leaders often chastise the BIA, it is the primary institutional voice that Indian Country has in the executive branch, and tribal leaders are committed to maintaining it as a viable governmental agency that serves as an advocate for Indian Country within the entire federal government.

At the early consultation meetings, tribal leaders proposed the creation of a tribal Task Force to work with the Department to identify alternatives to BITAM. The Department agreed. The Task Force is comprised of twenty four tribal representatives - two from each of the twelve BIA regions. The Task Force met for its first formal meeting on February 2 and 3, 2002. In the meeting, the Task Force members reiterated to the Department's representatives that the tribes reject the BITAM proposal and would like to have an opportunity to discuss other options, several of which had been proposed by the various tribes and regional associations prior to the first formal meeting. Some of the tribal proposals involve the creation of a new division within the BIA to be responsible for the management of trust assets and the accounting of funds flowing from those assets as well as various settlement and judgment funds, while others call for the creation of an independent commission outside of the Department. Assistant Secretary McCaleb added that the person who ultimately may decide whether the BITAM proposal is used is Judge Lamberth. McCaleb feels, however, that the Judge is encouraged that a Task Force has been established and would like to delay any action until he sees what the Task Force does.

Congressional Reaction

The House Resources Committee held a hearing on the secretary's proposal on February 6, 2002. The six-hour hearing was so well-attended that the Committee had to open an additional room to accommodate the overflow crowd. Secretary Norton's testimony and responses to questions, which lasted for well over two hours, acknowledged that tribes have generally expressed dissatisfaction both over the process through which BITAM was introduced and the substance of the proposal itself. In response to questions from the Committee, the secretary stated that she began the consultation process after having first put forth the proposal and requesting the reprogramming of funds by Congress because she wanted to start the process and get it under way. When asked whether the BITAM proposal should be scrapped and the Task Force given time to come up with an alternative approach, the secretary responded that she believes it is necessary to get decisions made and to not let the process go on indefinitely. In fact, on at least two occasions she stated that the BITAM proposal was the best way to bring about needed changes to the management of trust resources. She also said that she has an open mind about reform and is looking forward to working with the Task Force.

Tribal leaders stated unequivocally their opposition to BITAM and their dissatisfaction with the process through which it has been introduced. Task Force Co-Chair Tex Hall expressed dismay that the secretary expressed her preference for BITAM after meeting with the Task Force over the weekend. Chairman Hall stated that the Task Force is willing to work with the secretary, but emphasized that it will not be a rubber stamp for BITAM. He and other tribal leaders made it clear that tribes want trust reform even though they are opposed to BITAM.

A number of Committee members expressed their concern about the process used by the Department to introduce BITAM and suggested that the consultation process, following rather than preceding the development and introduction of the BITAM proposal, was disrespectful of the sovereignty of the tribes. Some Committee members noted that Congress itself bears a trust responsibility to tribes and that it also has a role in the trust reform process. The Senate Indian Affairs Committee has scheduled a hearing on trust reform for the end of February.

Conclusion

The proposal to create BITAM is essentially a debate about the future of the BIA, and the possible creation of BITAM is one of the most significant issues faced by tribes in the last forty years. The BIA would no longer be responsible for the management of trust accounts or tribal trust resources. From the tribal perspective, the fundamental debate is not only about the management of accounts and resources, but rather it is whether the trust responsibility will continue to encompass a government-to-government relationship or be reduced to the management of property. From the Department's perspective, the proposal is necessary to ensure the proper management and accounting of Indian trust assets and, thereby, the fulfillment of the United States' trust responsibility. Despite opposing views on the BITAM proposal, however, it appears that all agree that some change is necessary. That change is likely to alter significantly how we practice Native American resources law.