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Fractionation a growing problem in Indian Country
Tuesday, May 6, 2003

A Bush administration initiative to consolidate Indian land is a mere "drop in the bucket" and won't resolve an increasing problem of fractionation, according to Indian advocates.

In fiscal year 2004, the Bureau of Indian Affairs plans to spend $21 million to buy land from interested Indian allottees. To be operated out of an office in Minneapolis, Minnesota, the national program is based on a pilot that has consolidated 40,000 small interests in the Midwest since 1988.

But the Indian Land Tenure Foundation, an organization whose goal is to keep Indian land in Indian hands, says the budget request is insufficient. ILTF calculated that it would cost at least $1.25 billion to buy out all the known undivided interests.

"If this is not taken to scale soon," said executive director Cris Stainbrook, "the exponential growth of fractionated interests will not be reduced."

Instead of giving money to the BIA, Congress should invest it in Indian Country, argued Derrick Watchman, a board member of the Native American Bank Corporation, a tribally-owned financial institution. Last year, the BIA spent $7 million on consolidation but this could have been turned into $70 million, he said.

"We believe there are likely many other cases in which federal funds could be leveraged to accomplish a great deal more if they were in the hands of Indian financial institutions rather than in the hands of federal agencies," Watchman said.

Fractionation stems from the allotment of tribal lands to individual Indians. As allottees die, they pass their property on to multiple heirs, all of whom share an "undivided" interest in the land. The pattern has repeated since 1887, when Congress made the General Allotment Act into law.

It is one of the biggest problems in Indian Country, according to tribal leaders and advocates, because it limits economic development and increases bureaucratic tangles.

The Bush administration agrees with those assessments but also points to the cost of managing a parcel of land with dozens, or even hundreds, of owners. The Department of Interior spends hundreds of dollars to administer trust accounts that, according to the government, see little activity.

The situation is made worse by inadequate records, said Paul Homan, a former Interior official who is testifying in the Cobell v. Norton trust fund trial. "There's been no attempt to resurvey those lands," he said last Friday. "There's been no attempt to certify ownership."

Congress has tried to fix the problem legislatively, but these efforts have not always succeeded. The Supreme Court, in two separate decisions, held the Indian Land Consolidation Act unconstitutional because it took land from Indian owners and "escheated" it to tribes without just compensation.

About 18,000 allottees, in the Plains and the Midwest, were affected by the court's Youpee v. Babbitt decision of 1997. According to the Interior's latest status report on trust reform, these estates are finally being redistributed to the correct owners more than 10 years after the dispute began.

The BIA's consolidation program has had limited success, say observers. Although seen as a way to limit costs, the BIA opens a new trust account to pay each participant, according to research by the Indian Land Working Group.

Also, those who participate won't get an accounting of their assets under the Bush administration's historical accounting plan. The department considers their trust accounts "closed."

Robert Chelberg, a member of the Red Lake Band of Ojibwe in Minnesota, sold his interest and received $6.69 from the BIA. He said he has not cashed the check.

Relevant Links:
Indian Land Tenure Foundation - http://www.indianlandtenure.org
Native American Bank - http://www.nabna.com
Indian Land Working Group - http://www.ilwg.net
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust <

Related Stories:
Bush administration turns to Congress on trust (04/04)
Group sees momentum to recover Indian lands (02/06)
Trust programs see historic increase (2/4)
Standards guide reform effort (1/8)
What happened to all the land? (1/8)
Norton to fight IIM accounting (1/7)
Norton won't account for assets (1/6)

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