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TUESDAY, JANUARY 21, 2003

The following is the floor statement of Sen. John McCain (R-Ariz.) on the introduction of S.175, the Indian Trust Asset and Trust Fund Management and Reform Act of 2003.

Mr. President, today I am proposing bipartisan legislation to provide the basis for reform of the administration and management of the assets and funds held by the United States in trust for federally recognized Indian tribes and individual Indians. I am pleased that my two colleagues from South Dakota, Senators DASCHLE and JOHNSON, are once again joining me in this effort.

Last year, we introduced a similar bill to serve as a legislative vehicle in the event a consensus agreement could be reached during an extensive dialogue between a designated tribal task force and the U.S. Department of Interior on administrative and legislative reforms to federal management of trust funds and assets. Unfortunately, the dialogue resulted in a stalemate. While we received many favorable comments to move forward with this legislation, and conducted a full committee hearing to consider it, a sufficient consensus did not exist to approve the legislation prior to the adjournment of the 107th session.

We are reintroducing this legislation again because we believe it is important to continue to offer a legislative remedy to the management problems plaguing the Interior Department and instill a meaningful role for Indian tribes in the process. Indian trust funds management continues to be mired in controversy and systemic mismanagement. Native American beneficiaries continue to be denied a full reconciliation of money rightfully belonging to them.

The history of Indian trust funds management is long, exhaustive and fraught with controversy. It is a problem inherited by successive Administrations yet only limited progress has been made. The major structural changes called for in the 1994 American Indian Trust Fund Management Reform Act have not been accomplished. Two Special Trustees have resigned in frustration and high-level government officials have twice been held in civil contempt by the U.S. District Court in Washington, D.C. for breach of fiduciary duties.

No one is more frustrated about the lack of resolution to these long-standing problems than the Native American beneficiaries. However, recent reorganization plans submitted to the Court by the Interior Department earlier this month have only raised more controversy and concern among Indian tribes and beneficiaries as to the extent the Department will fully account for lost and mismanaged trust accounts. Significant questions have also been raised as to the impact of these proposed plans on long-standing Federal policies of self-determination and the function of the Bureau of Indian Affairs.

I cannot speak as to the merits of the Department's recent plans. The fact is, many in the Congress were not notified of the Department's intended actions nor has there been an opportunity to evaluate these plans through the respective legislative committees of jurisdiction. I have sought a commitment from the incoming Chairman of the Senate Committee on Indian Affairs, Senator BEN NIGHTHORSE CAMPBELL, to hold hearings as soon as possible on recent Department proposals that will restructure trust funds management as well as to consider legislative proposals such as the one we're proposing today.

The purpose of this legislation we are introducing is simple. It focuses on two primary changes to the 1994 American Indian Trust Fund Management Reform Act, the underlying law governing Indian trust funds management. First, it creates a single line-of-authority in the Interior Department by establishing a Deputy Secretary for Trust Management and Reform; and second, the bill strengthens provisions for Indian tribes and beneficiaries to directly manage or co-manage with the Interior secretary trust funds and assets, based on successful self-determination policies.

A fundamental objective of this legislation is to raise the profile of Indian trust funds management within the Interior Department and provide a statutory basis for Indian tribes to assume a greater management role in future management of their trust funds and trust assets. The structure of this legislation is similar to the bill introduced last year, but it is modified to reflect comments received from Indian tribes.

The legislation affirms the fiduciary standards to be applied to the management of Indian trust funds and assets. The Office of Special Trustee is abolished and replaced with the Office of Trust Reform under the direction of a new Deputy Secretary. The existing Advisory Committee to the Special Trustee is replaced with a Task Force composed of representatives of the tribes and the Department who will work with the new Deputy Secretary to develop appropriate standards and further necessary changes. Senator Daschle, Senator Johnson and I introduce this legislation as a demonstration of our continuing commitment to seek a real and meaningful trust reform solution that provides an active role for tribal participation and consultation. We hope this legislation will prompt the necessary dialogue to ensure reform to Indian trust funds and trust assets management in a way that increases accountability of the Interior Department and respects the fact that the tribes must be involved as active participants without the threat of termination of the trust responsibility.