Did you guess correctly? The one on top is an authentic, handmade piece of Zuni jewelry. The one on the bottom was manufactured in the Philippines. Photos from Inspector General report.

Ed. Note: The IACB's budget is $1.16 million, an increase of $16,000 not $16 million.

The federal law designed to protect Indian artists is "practically unenforceable," a report from the Interior Department's Inspector General says.

In 2000, the Indian arts and crafts industry was worth an estimated $1.2 billion. But fraudulent products -- mainly imported from foreign countries -- are stealing about half of that away from Indian artists, the report said.

"These imports, combined with domestically produced imitations, represent an estimated 400 to 500 million dollars in revenue that could otherwise belong to Indian artisans," the investigation said.

To learn more out the extent of the problem, the Inspector General went to buy art in Scottsdale and Sedona, Arizona, and Santa Fe, Gallup, and Albuquerque, New Mexico. "We observed a number of questionable business practices," investigators reported, such as covering up "Made in China" stickers with price tags, displaying unauthentic items along with authentic items and failing to label non-Indian made goods.

The Inspector General also asked more than 300 Indian artists at an art show in Phoenix about their experiences. According to a survey, 78 percent said they have seen fake art passed off as authentic and 65 percent said fraud -- typically in the form of mass-produced items -- affects their livelihood.

"I have seen designs and styles that I developed being mass-produced after I have done a public show. They change it just enough to get by the copyright laws," one Indian artist told investigators.

Interviews with industry experts confirmed the views. They said mass-production allows sellers to impose severe discounts on items, forcing Indian artists to compete and reduce their own prices.

The Indian Arts and Crafts Act, first passed in 1935, is designed to prevent such fraud and protect Indian artists. It requires But the law has only been used to bring indictments twice in the past 70 years, and there has never been a civil or criminal conviction, the report said.

The law also fails to give enforcement authority to the Indian Arts and Crafts Board, an agency of the Interior Department, the report stated. A bill that would have given more power to the board failed in 2004, leaving it up to the FBI or other federal authorities to pursue violations of the act.

With most of fake goods coming from out of the country, the U.S. Customs and Border Protection agency doesn't have enough resources to inspect all items for potential violations, the report said. Items produced in countries that signed the North American Free Trade Agreement -- Mexico and Canada -- are subject to fewer requirements as well.

Several members of Congress, most notably retired Sen. Ben Nighthorse Campbell (R-Montana), Sen. Pete Domenici (R-New Mexico) and Sen. Jeff Bingaman (D-New Mexico), have sought to beef up enforcement of the law. One change allows Indian artists and tribes themselves to pursue violations.

To extend enforcement, the Inspector General recommends re-introdution of the bill that would give more power t the IACB. The report also recommends changes in trademark law that will help tribes and Indian artists and changes in regulations that apply to goods imported from other countries.

Under the Bush administration, the IACB has put a stronger focus on enforcement of the law. But with a proposal to close three Indian museums, some say the board is ignoring part of its mission to promote and preserve Indian art. IACB's proposed budget for fiscal year 2007 is $1.16 million, an increase of $16,000.

The Inspector General's report is dated June 2005 but was only made public recently. Indianz.Com had made several requests to release this report, along with another one about the land-into-trust process.

Get the Report:
Indian Arts and Crafts: A Case of Misrepresentation (June 2005

FY2007 Budget Request:
Bureau of Indian Affairs Budget | Departmental Offices [includes Office of Special Trustee]

FY2007 Budget Documents:
Fulfilling Trust Responsibilities | Serving Tribal Communities | Protecting Lives, Resources, and Property [includes Safety in Indian Country] | Budget in Brief | Interior Department [from the White House]

Relevant Links:
Indian Arts and Crafts Board - http://www.doi.gov/iacb