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https://clinton.presidentiallibraries.us/files/original/b2c5cd759d54d108c11a7a95819357bd.pdf
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IN TlIZ:
UNITED STA'fES ClS'l'IlIC1' C!OUI\T
FOR TlIZ:
DIS'l'llIC1' OF c:or.UHIIIlI.
.LOUISE PEPlON C082LL It AI., on
their own behalf and on behalf
of all persons aimilarly
situated.
'
NOV 2,7 199&
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) 1:1vll ACtion
I NO. 1,'6 CI1·012U (ReLl
v.
)
BRUCE SABat'!'.!', Seeretax:)' of the
Interior. at ali'
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TllJ PBO!lunI01!
or
II!lO!!!!ATIOlf
Pursuant to the Stipulation of the parti.. And the
protnct!va Ord..., approvad and antered tlU.. day, ;.t i.lt hereby
ORDERED tnat ".,andants turnilb to pLointiffs as toon
as
practicable the follawinq information and document.,
1.
.. -the
All Rsist1nq historical transactiona for tan yaa... ot
~welve ~ ..
ottica. of the.Oftica of. Trust rund KaDaqament,
ineludinq the Kister til.,
I~, HIS~.
and.all appropriate
doc:ument.ation to ......d and interpret h.l.a., inclu<linq, without
limitation, fOrM1:.tI JJL.L., Mcn Or IIIICDICI. fU. layouts,.
dau
<lict~.
Data
_ball be provided in 4 II1II. or '-track
tape. or 3.80 cartridqeB.
2.
[RasaXvad.J
l.
[RliI.arvad.
o.ruI
I
'.
I
!
�t.
Ttle n"lObe: and total dollar value, la' ot oee.mbe. 11,
,
1987, PecGl!Iber J1, 1992.
an~
,
'
,
the dat8 of production, ot lIM
"
.ccounu wJ. th wh....aboUt. ot account holdenjinJcnow, 1t any I
ineluainq#
~~_code5
~ithOU~
Hll
limitatioft, rIK accounts with una9fii1118nt
~~-
&
~f Wdec \tIIl<fte"'h 11112, &lid I/U.
Tha nu.r and toul dollu vlIlue of UK ",*,1u
S.
deposit
J..•..."J,
a~couftt.
,
rQ.l.,u:~dal'
as of the cloee of each ot the
~A.t
ten
years al'ld currently.·
6., Ttl.. number ancl total dallar val"e "t <U.bur.......nt. frOlll
IlK
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aCcoun~
"",nthl ,
7.
returned A.
~nd.11Y8rabla
16 tne lalt
t~lv.
1t any•
The .,"1.... of difterence., J.f any. _ ".. tbtl IlK
TrUat
FUnd's gan"ru 18d9" balance tor invaatIDIIllt.l and the UlQunt of
lIK Trust FUndS J.nv... ted.
ror "btl purpo••• of this par"lirapb.
'value ot d'ftaranees- is interpreted to maan the numeric dollar
value difteranc. obtained vhen .&CUri!:l.. by uni.... or par, for
investmant. recorded in the caa1truat Srst.. r"" lIM .eeOUQta 18
compared to ..Diu, or par, par c:uatocUlll or brou: state_nn ot
iilvQStlIlI'JIn"..
!;/units
• UK
Tl1Ia~
FUnd 98fte".l laclgar bal....c.· _IIIUI the
,ir par "uu. ot 8GC11x1t1.. par the OIIIn1~t srstell"OQ any
day, "paciUc&lly at lIIQuth....nd.
Pillally,
·_t
ot lIM rru:&t
&.r
Funds in""etIICI" ia intaqlR1:ed to IIOU tba llllits, or fU', val"e
ot invastmaftU bald by cunoclian. or brOkers fez lIM tQl3&
S•. 'the value
ot ditfara_.,
i t ury, toet...... tile
'Fund'S cash lIalanc:e with the Un1t.ec1 a ....te.
b
nil TNat
~;,....y';a"""~9 '""
the Department ot the Interior'. ..,at rae....t genaral loo<l98r, utS
�.'
tho cash balance reflected by the Trea.ury fOD'th. ILK Trust
Fund Account.
ror the purpo.e. at this p....aqraph; 'valu8·of
. ,
ditferences' ....ant tlla Mt numeric dUf....nc.iobt".l.n1l4 when ~he
,
,
c•• h balance per the omni Trust ACcount.l.n9 Systam ia compared to
the adju8Ud cUll balance per Treasliry.
the United
The 'cub balance vhh
qiven day, specifically at
~nth
and.
F.IJ1ally, 'c.ah balance
reflected by the Traasury, tor the III! 'l':uu Fund ACcount' ...ana
tha mcnth-end balance for the Treasury account .ymbol l'X60l'
(lnd.l."tdual IndiAA
II''''',yl,
as'1t appears Oil the rre.8ury report
entitled 'undiaburled Appropriation ACcount Ledger ITTS 5653),"
adjusted for the pu.r;cllasa ......Ilt of
purchasad or 1la14
~ts1de
tba
any
certificata. 9f DGpoait
Tra&.~ry.
in tile
The val..e of any ~cc:ounU estabUshed
(Ie...ral
Ledger to oUSGt tlla IlK .IJ1....s t _ t ac<::ounta, U any, and a
de.cri~tion
of tile nature oC entra. to sucb ..ccowu:...
In this
Paragrapll, 'value of &Oy accognto ."""blished ill the Gliasral
Ledger" ... ana ac:<:CWIta ••t liP .IJ1 the OIIIl.l.truot synu
increase or _
10,
•
to
........ til. valua of tlla UII l.n...... tDlllt boolli.nce.
A naUIMat all to whethac tr&lllaoticlIS are neUed,
i.h, debita
11.
I
Statu 'l'NuUry' lIIIIana the AlllDunt of any uninvaaud
rIll c"oll balance. P'''' tile omni TrtlS't ACCOIInt.lJ1q sy.t.... on any
9.
•
&IlCI cred1ta netted togetber, . . . poatilllJ IlK '
A aU_at as
to
'Whethar all trac.s&Ct1ollSare pcisted
individu&lly to IVI acccunta .I.n ll\MS, or are ba",,_ ,or
a99reqated and tbeD po"tad,
'.
•
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,
�e<
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12.
A state""'''t a. to the relationship .bet,,"11 .. pooting'.
transaction Qsacription 4n4 ito referonce
v~ethar
n~r,
including
one can be uaed a. a proxy tor the "th.r it one or the
Othar is mi•• ing.
13,
Tb. current and iJIImat:U&'aly preceding' UM P<l'oceduras
manuals tor trust fund accounting. functions. to tile' auent tbey
C4ll
be tound.
14,
The t:1Irnnt an4
~ately
precedinq prOC:edurtla
manuala tor the IRKS SYltea.
15.
The eurrtllnt'. an4 iJNIe<Ii&'tllly PrKedin9 procedure.
manualS tor the K1nerlJ.. KIJIaq_nt'. sarvie. (KIll) .rod"ctlo11
•
Ac:CO"ftting and Au4it1"9 SYSUII (PAllS) •
1'.
The current and 1mDedi&toly precedinq procedur••
manual. fer
(i\FliKS).
11.
~h.
KIll AutomatG4 Fluid KinerlJ.I Hanaqement'. syates
~.....
.
"'pj
wr1t~.n~8.eript1cns. o~ the fife pilot PLojects bf =ha~~
Buraau ot Indian Affair.' National oil and G Ivaluatio,,'and
••
,_
,t~-,_d...
"anall........ sync INIOIi!I!ISlt-'~~l
18.
..;... ;;:"'o;"dJ
•
!".<or
The currant and ilIm>e<Ii4tely pt:1lCedin'J
b""~luI,
'
prOC:A4uras, direct.!."... or 1r\S1:%Uct.\.ona l'8'Jarding t.r:i.bItJ.
.0.cce•• ioII <laws .. they &tt8C1: Trust Fund &CCOQnt.\.a4,
19;
All dOCUllleCt8 # record., and U"'JiIIle th.iA9' vb.\.ch
elllbody, rafer tn, or nl&1:'.G
to
Ill! accouDU ot tile U.,.
~
plaintiffs or their predecessora .iA int.rast.
e
And it 11 further ORIll!RED, that lucn intOnl&ti<lll .nel
docu...nU be furni.hli4 or produ~ a....cb such it.... ia prepared
�•
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.
or becomes avaIlable, withOut wllitinq until all. suet! infomadon
and documGutl are availabl••
And it is further ORDERED. that identie&~ data ba provided
to expert. ratainad by Plaintiff. and that may ba retainad by
. Oofendants.
.
Th.!.. 1. ,
..,I..
.
day of _ r 19U•
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•
..
. -""
...
�Stratcgtc Plan Tab1
Page! on
SUM:YIARY OF TRUST MANAGEMENT PROBLEMS, ;\'EED FOR ACTION
AND SPECIAL TRUSTEE'S STRATEGIC PLAN RECOMMENDATIONS
SUMMARY
The Special Trustee: for American Indians proposes a single organization which will manage the U.S.
Government '5 tr'Jst responsibili:ies to American Indians and American Indian Tribes fur trust resource
mamgemenf, :rust funds nwnagement and land title and records management {collectively, [rust
management activities}.
This WIll involve consolidating :rust management activities mto a single, independem insti:ution with
its Qwn management struct'Jre to aSS1:me the responsibility fo!" the refomls identified in' the Strategic
Plan, to implement the reforms over a two year period and to provide for the ongoing management of
the U.S. Government's trust responsibilities to Amer1can Indians for tnJst management actlvities. The
institutional unit should be organized by business line or function and should be dedicated exclusively
to trust management activities.. The institutional unit should be managed by a fiJI! time Chairrr.an and
Chief Executivt: Officer (CEO) and a Board of Directors appointed by the President and confirmed by
the Senate.
The unit's proposed organizational form is an independent Government Sponsored Enterprise (GSE)
subject to Congressional oversight. The unit's generic came is reierred to throughout the Strntegic
Plan as the American Indian Trust and Develop~ent Administration (AJTDA).
The proposal would represent a major change in the way the U.S. GovernG1cnt manages its trust
responsibilities to American Indians. It would for the first tune clearly differentiate trust management
activ:ties that arise from the trust management of American fndian Tribal and individuallands and
Mtural resoun::t:s such as lease approvals and monitoring, timber sales, managing land, oil, gas, timber,
and other :rust assets; cQllecting, depositing, investing and disbursing fWlds derived from the Indian
lands and Indian economic activities; and managing the land title and ownership records from those
other activities that fall under what the courts have called the general trust responsibility, such as
education, h()u~.ing. welfare programs of all types, law enforcement and other American Indian
ser¥ices provided by the ~ederal Government.
Generally, the Strategic Plan also proposes, directly and indirectly~ that aU po,licies, procedures,
systems and pmctices for trust management activities meet at a r.1inimum the regulatory standards and
best practices of national bank trust departments and companies. These modem regulatory standards
arc based on Al1g1o~American principals of trust bw which have developed over the past several
centuries. Thes-e: standards are guided hy, regulated, supervised and enforced by the U$. Office of the
Comptroller of the Currency (OCC). It is proposed that oce regularly examine and supervise AITDA
in much the same way.OCe conducts examination and supervision of national bank trust departments.
Similarly, the trust powers and account administration flexibili~y for various types of investments are
also modeled after the powers and fiduciary flexibility available to national bank trust departments, In
short, the Ar.1erican Indian trust beneficiaries \vilJ be receiving equivalent trust services to those trust
services provid~d by the national bank trust departments to :heir trust customers. Tr.ese private sector
standards arc proven, efficient and effedve, Notably, no national bank since the 1930s has failed
because oflosses taken by bank trust departments and companies,
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�Strategic Plnn Tabl
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The reforms just noted and the other reforms identified in the Strategic Pian are urgently needed. The
principal causes of the long standing truS! problems have resulted in conditiolis which are unacceptable
by any reasonable standards and eontimlc to do significant harm und damage to American Indian tf1.:st
beneficiaries. They have a!,W caused permanem damage to the core trust management systems the
government uses to manage the Indian lands and monies. These defective systems prevent the
gQvernment from meeting the-fiduciary, accounting and reponing standards required by the American
Indian Trust Fund Management Refonn Act of 1994 and standards ofordinary prudenc~ applicable to
all trustees, public or private. The failure of the trustee to perform its fiduciary duties in a manner
conSistent with accepted fiduciary standards represents a significant potential financial liability lor the
Federal Government as well as damage to its reputation for its failure to act in a responsible manner.
So long as the organization and management of the trust management activ:ties remain status quo and
as !ong as th(; trust mfmagemem activities are mingled with general trust functions and other
government programs and activities, it is unlikely tbat any meaningful reforms will be implemented and
unlikely that these activities will receive appropriate allocations of financial and managerial resourees
sufficient to "allow them to be administered according to the high moral obligations and trust and
eXJ'ting fiduciary standards the United States bas undertaken and assumed. For these reasons, the
Special Trus1ee believes that the Department of the Interior and the Bureau of [ndian Affairs (BIA) do
not have and will not have the fmancial and managerial resources to undertake and implement the
reforms proposed by the Strategic Plan,
Special Trustee's Assessment and Need for an Independent Administnlion of l'rust
Management Activities
The problem..": try the trust tUo:nagement systems are longstanding ones. Mismanagement and neglect
have allowed the trust management systems, record keeping systems and risk management systems to
deteriorate over a 20 to 30 year period and become obsolete and ineffective. For many of those years,
including many years since 1990, the trust prognllus were seriously under staffed and under funded.
The result was that the government increasingly was unable to keep pace with the rapid changes and
improvements in technology, trust systems and prudential best practices taking place in the private
sector trust industry. This gap continues today and will continue to increase until the reforms outlined
iu tqe Strategic Plan are funded and implemented.
There are lour prindpat causes of the mismanagement and neglect which have contributed to the trust
.
management problems both currently and in tbe past
I, The prima.ry cause of the trust management problem.<> both historically and currently can be
attributed to the trade~otlS offmancial and managerial resources which take place at every level
of government between trust management a{;tivities (trust resource management, trust funds
management and land title and records management) and other activities and programs of the
Bureau of Indian Affairs, the Department of the Interior, the Administration and the ~ongress.
History has consistently shown these politically expedient govcrrnncm trade-offs of competing
fmancial and managerial resources to be adverse and detrimental to the effective and proper
administration and funding of the trust management activities.
These trade-offs huve been made and are continuing to be made even in the face of a long
history court cases which have consistently held the trust relationship between the United
of
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States and tbe American Indians to be a distinctive one. De<:isions of the Supreme Court
reviewing the legality of administrative eonduct in managing Indian propeny have held officials
of the United States to "moral obligations orthl! highest responsibility and trust" and "the most
exacting fiduciary standards," and "bound by every moral and equitable consideration to
discharge its trust with good faitb and fairness."
.
A trustee is not and should not be relieved of his dut~es, respOnsibilities and accountability to
trust beneficiaries because the trustee lacks the financial and managerial resources to 'administer
the trusts. To be so relieved for this reason is not acceptable for a private trustee, Yet, the most
frequently cited reason and excuSe for the Federnl Government's. historical and continued failure
to uddrtlSS and resolve the longstanding trust management problems and. by so doing, to FuiliU
its trust responsibilities is the lack of funding and staffing for the Amencnn Indian trust
manngcmcm programs. 'vVhile most certainly the lack of financial and managerial rcsoun;cs is
lhe primary causal factor for the Federal Government's failure tn this regard, under no
circumstances should it also Serve as an acceptable excuse for Ihe continued neglect of the
F<deral Government's trust responsibilities to American Indian truSt beneficiaries. Yet, this is
exaclly tbe case for the executive and legislative branches of the Federal Government Lack of
financial and managerial resources has become the standard and institutionally acceptable excuse
for the Federal Government's continued failure to address and resolve the trust mana.gement
problems. Because it is by now a wen established standard and acceptable excuse, no one and
no govt:riunent management unit has been or is likely to be held accountable for this neglect at
:my level of the Federal Government. This is a policy of political and self~serving convenience
and not one wortby ofa Federal trustee who has charged itself with mornl obligations of the
highest responsibility and trust or one 10 be judged by the mOst exacting fiduciary standards. In
addition, this polley ofpoHtical and self~sef't'ing convenience not only facilitates and perpetuates
the neglect of the American Indian tmst management programs but continuously adds to it. This
is bec:wse it is convenient, easy and politically desirable to make even more choices and trade
offs detrimental to the American Indian trust management activities in favor of other
government programs which are politically more popular. All with the knowledge that the most
the Federal Government or individuals making the choices and trade-offs will suffer from such
behavior is some criticism from American Indians and their supporters. No real accountability
will be exacted in the near or medium terms and ifit is, it win be by the judicial branch of tile
Federal Government over the long term. The Strategic Plan proposes that the Federal
Government provide sufficient fmancial and managerial resources to ensure that it can meet its
trust re;ponsibilities to the .A.merican Indians.
2. Another important cause of the trust management problems is the way the BfA is organized and
manuges tmst management activities. The BIA's organizational alignment causes decision
making and management for lndividuaJ Indian Money (11M) and Tribal issues to be an intricate
and cornplex coordination process and an ineffective one at times. Responsibilities fall wltbin !6
separate organizations all reporting directly to one entity, who has direct line authority for every
other Bureau organization and program, Further, the activities are tarried out by over 100 field
offices, The BIA's organizational structure prevents in many instances informed and expeditious
decisions because of the number of entities involved and the large number and cOTi!plexity of the
dedsions their activities generate, That structure also results a1 times in trust management
responsibilities of a higher order not receiving the attention and focus they deserve andlor being
tradc.-d offagainst other Bureau priorities ora lower order, which are erroneously considered to
be more important than trust management. The BfA offices must expend significant resources to
coordiuate with managers, supervisors and staffacross the Bureau to obtain cooperation.
Coordination and cooperation often breaks down, Field offices often manage their o~rntions
•
w
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�Strategic Plan Tabl
Page 4 of7
auronomously with little discipline and comrol being exer:ed or enforced at either the local, area
or Washington administrative levels. Further, because the BIA is not organized and managed by
fimction, aU too often policies and procedures written for specific trust programs or functions
are not universally followed because tbe staff that perform the activities take their dire'ction from
general managers in area or field o'ffices, not the trust program offices. Nor can discipline,
control and accountability be enforced by a good management aSsessment and audit system
since standardized polici~s, procedures and practices are rare and insufficient financial and
Illill13gerial resources are provided for audit and risk management of any type, The Strategic
Plan proposes a single unit orgamzed along business lines to resolve these issues.
3, The two causes just 'described acting together over many years have resulted in a third causal
factor for tbe longstanding trust management problems: lack of competent managerial resources
to manage effectively and efficiently the truSt management responsibilities to the American
Indians. Managers and staff of the BlA have virtua!1y no effective knowledge or practical
experience with the type of trust management policies, procedures, systems and best pmc:ices
which 3re so effe~tive, etlicient and prevalent in private sector trust departments and cot'!1panies.
The BIA area and field office managers do not have the background. the training, the
experience, and the fmancialand trust qualifications and skills, necessary to manage the Federal
Government's tf\.lst management actiVities accmding to the exacting fiduciary standards
required in today's modem trust environmenL Thus, and through no fault of their o~n, and
even assuming adequate financial resources were made available, they tire nut capable of
J!llinaging effeC"tively and efficiently the federal Government's trust management activities on <:t
par with that provided by private sector institutions to their trust customers,
The lack of trust manageriaJ competence and the lack of fmancial trust orientation and focus
throughout the BIA and the Department of the Interior have been institutionalized over many
years and are now inherent in the BIA organizational culture. It is the reason in large part:
o Why the BIA has never originated meaningful refonns of the trust management processes
in the last 25 years.
-0
.
Why the BlA has resisted and ultimately failed to implement nearly all of{he meaningful
reform efforts attempted in the last 25 years,
o Woya new organizational structure, new management and massive re-training are
necessary for the future management of the Federal Government's trust responsibilities to
American Indians and the management of the implementation of the refams identified in
the Strategic Plan,
.
4. Another fundamental problem is fractionation of American' Indian AUotment interests. The vas!
majority of accounting. basic record keeping and other operating problems affecting trust
resource management. trust funds management and trust Jand records and ownership
management originate from one source: the ever increasing fractionation of undivided realty
interests owned by Individual American Indian altottees.
Fractionation is a direct result of the Federal Government's policies and taws relating to lands
owned by American Indians back to at least 1887.
As originally envisioned in the late nineteel1lh century, allotments were to be held in trus.t by the
United States for their Indian owners no more than 25 years, aller which the land would be
conveyed in fee simple to its Jndian owners. Many allott«s died without wills during the. 25
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�Strategic Plan Tab I
Page 5 of7
year trust period, and it also became evident that lTl3.ny allouees continued to need Federal
protection. Consequently. Congress enacted limited probate laws and a·Jthorized the President
to extend the trust period for those indivIduals who were not competent to manage their Jands.
The presumption was, however, that at some point in the foreseeable future the lands would be
conveyed to their Indian owners iree of Federal rcstncrions. Nevertheless. Congress continued
to extend the period of trust protection but did not amend the probate laws. Under the Indian
probate laws, as individuals died, tbeir propeny descended to their heirs as undivided fractional
interests in the allotment, As the years passed, fractionation bas expanded geometrically to the
point where there are hundreds of thousands of tiny fra~lional interests. These fractional
interests have nominal economic value but pose an enormous cost burden estimated at about
$33 miltion per year on the Federal Government's trust management activities,
Congrcss attempted to address the fractionation problem with the passage of the Indian Land
Consolidation Act (lLeA) in 1984. The ILCA authorized the buying, selling and trading of
fractional interests, but most importantly it provided for the escheat to Tribes of interests ofless
than tWQ percen!' 55,000 oflhe two percent-or-less fractional interests hnve escheated since
1984, but the fractionation problem continues to worsen, Moreover, the 1997 Youpee vs,
Babbitt Supreme Court decision called into question the legality of the escheated property since
1984, further complicating the fractlon:uion problem. Mainto.inmg the heirship and land records
and administering the land is inordinately expensive, and the administration of the records
pertaining to the money earned by each individual alJottee is equally expensive and difficult. In
addition, utili7~tion and conveyance oftne fractionated property by the numerous owners is .
difficult because of the need to secure the numerous consents required. Finally,.the difficulty in
dealing with the fractionated interests often effectively precludes the highest and beSt use of the
land for economic development and the maximization of investment income, th'Js diminishing its
economic value.
Legislation is therefore needed which would consolidate the large number of existing
fractionated interests and prevent further fractionation. This alone would remove a primary
obstacle to the efficient administration of the trust marutgement systems and provide a ::najor
catalyst for the timely resolution of most orthe operational problems associated with trust
management activities, including trust res.ource and realty management, probate, land titles and
ownership records management, UM accounting, coilections, deposits. investments and
disbursements. customer service and record keeping for all trust management activities. An
added benefit is the annual administrative cost savings estimated at the same 533 million
mentioned above.
Conclusion of Assessment
These principal causes of the lrust management problems have resulted in conditions which are
unacceptable by any reasonable standards and continue to do significant harm and damage to
American Indian tmst benef:ciaries. They have also caused permanent damage to the core trust
management systems the government uses to manage the Indian lands and monies. These defective
systems prevent the' government from meeting the fiduciary, accounting and reporting standards
required by the American Indian Trust Fund Management Reform Act of 1994 and standards of
ordinary prudence applicable to aU tmstees., public -or private.
So tong as ttll: ma~gement and organization of the trust management activities, ternain status quo and
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�Strategic Plan Tabl
Page 6 of?
as long as the trust management activities are mingled with general trust functions and other
goverruneot programs and activities, it is unlikely that any meaningful reforms will be irnpleme~ted and
unlikely that these activilies will receive :lppropriate allocations of fmaneia! and managerial resources
sufflcient to allow them to be administered according 10 lhe high moral obligations and trust and
exacting fiduciary standards the United States has undertaken and assumed, For these reasons, the
Special Trustee believes that the Department of the interior and tbe BIA dQ not have and will not have
[he financial and manageria\ resources to undertake and implement tbe refonns proposed by the
'"
Strategic Plan;
Spedal Trustee's Recommendations
To resolve tbe long standing trust management problems, [he Special Trustee recommends as follows:
1. That the American [ndian Trust and Development Administration be approved and be provided
with the financial and marulgerial resources to manage the U.s. Government's trust management
responsibilities to American Indians and American Indian Tribes for Trust Resource
Management, Tnlst Funds Management and Land Title and Records Management according to
the most exacting fiduciary standards and moral obligations of the highest resPQnsibility and
trust
2. That all the refurms identified in the Strategic Plan be approved, funded, staffed and
implemented,
), . That all trust management duties, responsibilities, budgets and activities, including Trust
Resources Management, Trust Funds Management and Land Title and Records Management,
carried out by the Bureau of Indian Affairs and the Department of the interior should be
transferred to the AITDA as soon as practical and before full implementation of the Strategic
Plan refonns,
Strategic Plan Requirements
Scerlon 303 of the American Indian Trust Fund Management Reform Act of 1994 (Public Law
412) (RefollTI Act) requires a Comprehensive Strategic Plan:
.
(u) COMPREHENSIVE STRATEGIC PlAN.··
I03~
.
I. In Gcneral.··The Special Trustee shall prepare and, after consultation with Indian Tribes and
appropriate Indian orgamzations, submit to tbe Secret~ and the CQouuittee on Natural
Resources of the House of Representarives and the Committee on Indian Affairs cfthe Senate,
. , a comprehensive strategic plan for all phases oftne truSt management business cycle that will
ensure proper and efficient discharge of the Secretary's trust responsibilities to Indian Tribes
and individual Indians in compliance with this Act.
2. Plan Requirements.~~The plan prepared under paragraph (1) shaU include the following:
o Identification of all reforms to the policies) procedures, practices and systems of the
Department. the Bureau, the Bureau of Land Management, and the Minerals Management
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Scrvi£c (MMS) necessary ensure the proper and efficn;:nt disc-barge of the Secretnry's
trust responsibilities to Indian Tribes in cornpli:mcc with this Act.
o Provisions for opportunities for Indian Tribes to assist in the management ofthetr truSt
accOunts and to identify for the Secretary options for the investment of their trust
accounts, in a manner consistent with the trust responsibilities of the Secretary. in ways
tbat will help promote economic development in their communities.
o A timetable for implementing the refonns identified in the plan, including a date for the
ploposed termination of the Office.
The Strategic Plan has been prepared by the Special Trustee of American Indians to meet the
requirements (,fthe Refonn Acr,
,
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VISION FOR TRI.iST MANAGEMDIT
1. Reform Act Vision
~
Objectives
The American Indian Trust Fund Management Reform Act of 1994 at Section 101 sets forth the
foundation and vision to be achieved by the Strategic Plan:
"(d) The Secretary's proper discharge of the trust responsibilities of the United States shall include
(but are not limited to) the following:
H( I) Providing adequate systems for accounting for find reporting trust fund balances,
"(2) Providing adequate controls over receipts and disbursements.
H(3} Providing periodic, timely reconciliations to assure the accuracy of accounts. '
"(4) Determining accurate cash balances.
"(5) Preparing and supplying account holders with periodic statements ofthdr account perfonnance
and whh balances of their account which shall be available on a daily basis.
"(6) Establlshing consistenl. written poli~ies and procedures for trust fund management and
accounting.
, "{7) Providing adequate statTing, supervision, and truining for trust fund management and
a~count:ng.
"(8) Appropriately managing the natural resources located within the boundaries of Indian reservations
and trust lands." .
The Reform Act at Section 303 further requires that the Special Trustee shall ensure that the Bureau
of Indian Affairs establishes appropriate policies and procedures, and develops necessary systems, that
wHl..allow it:
"(I) properly to ac\:ount for and invest, as well as :naxtmize~ in a manner consistent with tbe statutory
restrt.ctions imposed on the Secretary's investment options, the return on the investment ohll trust
fund monies.
"(ii) to prepare accurate and timely reports to account bolders (and others. as required) on a periodic
basis regarding all collections, disbursements, investments, and return on investments rebted to their
trust accounts.
"(C)",to maintain complete, accurate and timely data regarding the ownership and lease of Indian
lands."
2. Prudent Investor Standard
Tbe Strategic Plan proposes that the Federal trustee will be governed by the pruden! investor standard
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as adapted tor the special circumstances of the trust relutionship between the U.S, and Indian Tribes
and individuals. Generally, under the standard the trustee shaH exercise reasonable cure, skill and
caution to make and implement Investment and management decisions as a prudent investor would for
the entire portfoiio, taking into account the purposes and terms and provisions oftbe govcnt~ng
instrument. The governing instrument would be the applicable treaties, statutes, regulations,
judgments, or as negotiated with the trusior.
The prudent investor standard requires a trustee to pursue an overall investment strategy to enable the
trustee to make appropriate present and future distributions to or for the benefit of the beneficiaries
under the governing instrument, in accordance with risk and return objc.;:tives reasonably slliled to the
emire portfolio.
In addition, the trustee is required to consider. to the ext"ent relevant:o rhe'deyision or action:
• the size ofthe portfolio,
.. the nalure and estimated duration ofttIe fiduciary relationship,
• the liquidity and distribution requirements Qfthe governing instrument,
.. general economic conditions,
• the possible effect of inflation or deflation,
• the expected tax consequences ofinvestment decisions or strategies and ofdistdbutions. of
income and principal,
• the role that each investment or course of action plays within the overall portfolio,
• the expected total return of the portfolio (including both income and appreciation of capital),
• and the needs Qfbeneficiaries (to the extent reasonably known to the trustee) for present and
future distribufions authorized or required by the governing instrument
3. Additi<lnai Commercial Trust Standards
Consistent with the Refonn Act accounting and tiduciary standards are the following commercial tr.Jst
standards which should also form part of the toundation and vision for trust management for American
Indian beneficiaries:
,
"A trustee is under a duty to the beneficiaries oflhe trust to keep clear and aceurate accounts."
"lrthe trustee fails to keep proper accounts, all doubts will be resolved against him and not in his
favor."
~~A.
Scott, Law: of Trusts (3rd ed, 1967) Section 172
4. Decisions of the Supreme Court
Decisions of the Supreme Court reviewing the legality of administrative conduct in managing Indian
property have held officials of the United States to "moral obligations of the highest responsibility and
trust" and "tbe most exacting fiduciary standards," and "bound by every moral and equitable
consideration to discharge its trust with good taith and fairness."
5. Vision Statement
Taking into account the fiduciary standards sel forth by Congress, the prudent investor slandard,
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common 13w, Supreme Court Decisions and the best pract:ces of the private sector trust industry. the
vision or mission of the U.S. Government '5 adminislmtion of American Indian trust management
should be to:
VISION STATEMEWT
MANAGE THE U.S. GOVERNMENT'S TRUST RESPONSIBILITIES TO AMERICAN
IN!)!ANS AND AMERICAN INDIAN TRIBE:S FOR TRUST RESOURCE MANAGEMENT,
TRlIST FUNDS MANAGEMENT AND LAND TITLE AND RECORDS MANAGEMENt,
ACCORDING TO THE ~IOST EXACTING FIDUCIARY STANDARDS AND MORAL
OBLIGATIONS OF THE: HIGHEST RESPONSIBILITY AIm TRlIST
.
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SPECIFIC ACTIONS REQUIRED. PHASE I OF THE STRATEGIC PLAN
The principal objectives of Phase I of the Strategic Plan are the acquisition and institutionalization of
an organizational structure, infannation systems and management and organizational skills which will
permit and ensure that the U.S. Government establishes appropriate policies and procedures, develops
necessary systems (l:nd takes the affinnative actions required which will allow it to meet the
requirements and objectives of the American Indian Trust Fund Management Refonn Act of 1994,' the
fiduclury standards of the Reform Act and common law and moral obligations of:he highest
responsibility and trust
Generally, the Strategic Plan proposes, directly and indirectly, that aU policies, procedures, systems
and practices for trost management activities meet at a minimum the general standards and best
practices of national bank trost departments and companies. These standards have evolved over the
past 60 years and are g!;ided by, regulated, supervised and enforced by the ace, Similarly, the trust
powers and account administration flexibili!y tor various types Qfinvestments are also modeled after
the powers and fiduciary flexibility available (0 national bank trust departments, It is proposed that
ace regularly examine and supervise AITDA in much the same way ace conducts examinations and
supervision of national bank trust departments. In short, the American Indian trust beneficiaries will be
receiving equivalent trust services to those trust services provided by national bunk trust departments
to lheir trust customers and AITDA will receive supervision and examination by oee. These private
sector standards are proven, efficient and effective. OCC's supervision has been effective as well:
notably, no national bank since the 19305 has failed because of losses taken by bank trust departments
'und companies.
Pb:lse I of the Strategic Plan also includes specific proposals and provisions for opportunities for
Amerkan Indian Tribes and Individual American Indians to assist in the management of their trust
accounts and 10 identitY options for the investment of their trust accounts. in n manner consistent with
tbe 'Vision statement, in ways that will help promote oconomic development in their communities.
These proposl:Iis will also be subject to and governed by private sector trust standards applicable to
national bank fruSi departments. The Strategic 1)1an proposes that the Federal trustee will be governed
by the prudent investor standard as adapted for lhespecial circumstances of the truSt relationship
between the U.S, and Indian Tribes and individuals, Generally, under the standard the trustee shall
exercise reasonab!e care, skHl and caution to muke and implement investment and management
decisions as a prudent investor would for the entire portfOlio, taking into account the purposes and
terms and proviskms of the governing instrument, The governing instroment would be the applicuble
treaties, statutes, regulations, judgments, or as negotiated with the beneficiary. Generally, the
proposed investmcnt'options will open up a myriad of prudent economic development opportunities,
almost all of which have been previously denied to Amerkan Indian trust beneficiaries.
To meet the" Strategic Plan objectives and deal with the present and the future, Qrganizational
stntcture. senLor management and trust management activities and programs of all types must be
improved and brought up to the fiduciary and trust asset and accounting management st~ndards
preyalent in the private sector as soon as possible, Only this will pennit an accurate and full accounting
to American Indian beneficiaries and allow for the proper discharge of the U.S. Government's trust
:cspofisibilities to American Indian trust beneficiaries.
ORGANIZATIONAL STRUCTURE AND MANAGEMENT
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The Strategic Plan proposes a single organization whi.ch will manage lhe U.S. Government's trust
responsibilities to American indians and American indian Tribes for trust resource management, trust
itmds management and land title and records management (collectively, trust management activities).
This will involve consolidating trust management activities into a sing!e~ independent institution wlth
its own management structure to assume the responsibility for the reforms identified in the Strategic
Plan, to implement the reforms over a two year period and to provide for the ongoing management
and administration of the U.S. Government's trust responsibi!ities to American Indians for trust
management <lI:tivities. The institutional unit should be organized by business line or function and
should be dedicated exclusively to trust management activities. The institutional unit shou!d be
managed by a full time Chairman and Chief Executive Officer and a Board of Directors appointed by
the President and confmned by the Senate.
The unit's proposed organizllitonal font'! is an independent GSE subject to Congressional oversighL
The unit's generic name is referred to throughout the Strategic Plan as the AITDA.
As noted, three of the four primary causes of the longstanding trust management problems involve
serious management and organizational structure weaknesses. Management has been principally
responsible for the failure to address and resolve the longstanding trust management prob!ems and for
the permanent damage to the core trust management systems the government uses to manage the
fndian lands and monies. These defective systems prevent the government from meeting the tiduciary,
accounting and reporting standards required by the ;\merican [ndian Trust Fund Management Refonn
Act of 1994 and standards of ordinary prudence applicable to all trustees, public or private.
.
So long as the organization and management of the trust management activities remain status quo and
as long as the trust management activities are mingled with general trust functions and other
government programs and activities, it is unlikely that any meaningful reforms will be implemented and
unlikely that tbese activities will receive appropriate allocations of fmanein! and managerial resources
sufficient to allow them to be administered according to the high moral obligations and trust and
exacting fiduciary standards the United States has undertaken and assumed. For these reasons, the
Special Trustee believes that the Department of the InteriQr and the BIA do not have and will not have
the financial and managerial resources to undertake and implement the refonns proposed by the
Strategic Plan.
.,
The Special TlUstee, therefore, has proposed a new organizational and executive management
structure to address and resolve the long stlmding trust manageJru:!nt problems and to ensure that the
Federal Government fulfill$ its trust responsibilities to American Indian trust beneficiaries, A1TDA has
distinct advantages over the current structure. The reorganization will:
I. Stop and reverse the steady erosion of the Federal Government's fulfillment of its trust
responsibilities (de facto "tenninatlon") currently occurring because of lack of financia! and managerial
resources (capacity) and the unwillingness to address and resolve the longstanding trust problems.
2. Crendy establish accountability both to American Indians and the U.S. Congress and American
people.
3, Establish an organization focusing and specializing exclusivtlly on trust management activities.
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4. Create an organization which wlll function with a greater degree ofindependence and at a higher
level in government than B1A. As a GSE and consistent with the treatment of other GSEs, Congress IS
rqorc likely to provide appropriate financial and managerial reSOurces to ensure the success of{he new
organization than exists at present.
5, Establish a five person Board of Directors appointed by the President and confinned by the Senate
who will devote full time to the govemanee and management Qf~hc new organization. Three of the
Board members will be American Indians proposed to the President by Indian Country. This will
assure high level adl/Qcacy of issues important to Indian Country and accountability to Indian Country.
Two of the Board members, inc!udmg the Chief Executive Officer, will be experienced and skilled
financial and trust asset and accountmg managers. This will assure competent management at the lTI:O~t
senior levels of the organization.
6. Attruct, train and retain competent senior management. skilled and experienced in trust asset and
accounting: management and capable of managing a modem trust operation, This will be facilitated by
making AIT9A a GSE. AITDA, like other GSEs, will be exempt from government r.iring rules and
compensation ceilings and will therefore be able to compete with the private sector in attracting
corrtpetenl management
7, Allow AITDA to assess, train, evaluate, compensate on a competitive basis with the private sector
and replace, if necessary, those employees transferred from Department of the Interior (DOl) to
A1TDA.
8. Accelerate the process Qfself~govemance by the Tribes, The proposal would not interfere wilh the
Tribest ability to contract or compact for trust functions since the Self~Detcnnination Act and Selfw '
Governance A<:t would still be appHcable to these programs. Like a private trustee, the proposed
administration of the trust activities would rely on a common set oflaws, policies, pmctices.
regulations and a common Trosl Asset and Accounting Management System (TAAMS} and a means
through annual audits and reviews and administrative oversight and supervision to assure perfonnance
by the Self,,:Governance Tribes. The Self¥Governance Tribes would act as service bureaus under
delegated authority from AITDA to provide trust management sel"\o'ices for which they had expertise.
Thus, increasingly in the future, service bureau management of nearly all of the trust management
a(:tlvities could and should be provided by qualified Tribes or Amerlcan Indians, themselves, under
appropriate compacts and contracts, subject to the rules, oversight and supervision of the Federal
trustee.
The Board of Directors and executive management of AITDA will :nannge and administer, directly
and indirectly, all trust asset and accounting t1.:.nctions. including trust resources management and trust
funds management; trust financial and infonnation services management; trust land title and records
services; trust records and archiving; and risk management. The Trust Risk Management unit wi!l
report directly to tbe A1TDA Board of Directors and will conduct operational, credit and compliance
reviews and audits of AlTDA units and outside servicers such as BfA, MMS, Bureau of Land
Management (BLM), Self Governance & 638 Tribes and others. These service bureaus will contract
with A1TDA 10 provide specified services under delegated authority and will be subject to AITDA's
overSight and supervision,
The organization chart for AlTDA and the architecture and support system are as follows:
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17
TRANS.'ER OF TRUST AUTHORITY, BUDGETS AND CERTAIN STAFF FROM 001 TO
AITDA
ROLE OF THE BUREAU OF INDIAN AFFAIRS. MINERALS MA,'iAGEMENT SERVICE, THE
BUREAU OF LANDMANAGEMENT, SELF-GOVERNANCE & 638 TRIBES AND OTHER
SERVICERS IN FUTURE TRUST MANAGEMENT ACTIVITIES
..
At the inception ofthe American Indian Trust Development Administration, the duties,
responsibilities, budgets and <:crtain staff engaged on beh3lfof the U"S. Government as trustee in truSt
resources management, trust funds management and trust land and records management will be
transtcrred to AnDA from the Department of the Interior. This willlOclude all Statutory authority,
funding and staffmg. except as noted below, including those that are in the Tribal Priority Allocation
part of the President's Budget.
At inception aU authority, budgets and staff of the Office of Trust Funds Management (OTFM} and
the Land Title and Records Office along with staffcngaged in the operation of the Land Records
Information System and budgets will be transferred to AITDA Employees transferred or hired will be
assessed, trained and closely evaluated on their qualjfi~ations and performance .md replaced as
necessary.
Staff of the BIA, MMS, BLM and Self Governance Tribes engaged in the management of Indian land
and natural resources, including all pre~lcase und pte-contracting activities and lease and contract
origination, will remain in place: AITDA will contract with these units and they will serve U5l:!crvice
bureaus for the indicated trust servi{;es and activities.
BrA & Tribes
Land and natural resource management. except post
(SclfGovernance leasing and post contracting activities and records and
,& 638)
information system management, unless otherwise
iand third paTties contracted.
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,
,
,
"
:SLM & T 'b
Production verification at lease site for Qil, gns & coal.
'
' a
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'S IfG ncs EnVITonmenta I comp I'lance ITom pomt f pro ductl0n
·{e . . 8) overnancc .throug,hIosurc. Jne Id es a II current actlvltles except
.. ,
6.
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, d.)h' d
' ,:rtcords and information system m:magement, unless
an t Ir parties "oth ' contmcted .
Ii
erwlse
:&
MMS & Tribes
(SelfGovemance
& 638)
and third parties
Royalty and compliance manngement for oil and gas,
including all current activities except records and
infonnation system management, unless otherwise
contracted.
,
,
,
,
A[TDA will delegate certain specified investment or management functions to BIA, BLM. MMS, Self
Governnnce Tribes llnd other third parties only after exercising care, skill and caution in:
1, selecting a delegee suitable to exercise the delegated function, taking into account the nature
and value oflhe assets subject to such delegation and the ex~rtise of the delegee;
2. establishing the scope and terms of the delegation consistent wiih the purposes of the governing
instrument;
.
3. periodically reviewing through operational and ~ompliance audits and admini:itrative oversight
the delegee's exercise of the delegated function and compliance with the scope and tenns of the
delegation; aod
.
4, . controlling the overall cost and budget by reason of the delegation,
BfA, BLM, MMS, the Self Governance Tribes and other parties that opera'te as trust servicers and as
delegees: .
I. will have a duly to the trustee and to the trust to comply with the scope and terms of the
delegation and to exercise the delegated function with reasonable care, skill and caution. An
attemptf.'d exoneration of the deiegee from liability for failure to meet sucli duty is contrary to
public policy and nun and VOId.
-. i'. will, by accepting the delegation of a trustee's function from the trustee, submit to the
jurisdiction of the Federal dis.trict courts or other appropriate jurisdiction and the delegee may
be a party to any proceeding in such courts or jurisdiction that places in issue the decisions or
actions of the delegee,
), will operate under the regulations, standards. policies and procedures and the information,
accounting and reporting systems issued, established and maintained by AlTDA.
For land and natural resources management activities, existing staffofBIA. BLM and MMS and the
Self Govemance Tribes w~JI remain in place at their current locations. Tribes will be assured the same
opporiunities and authority that currently exist. AITDA managers wil.l sit down WIth the Tribes to
prioritize programs within its's jurisdiction, thus assuring Tribal input nnd priorities are met on a local
and area basis. Further, the current opportunities of638 contracting and Self Governance Tribes will
remain unchanged and fuUy available to the Tribes, By focusing the AlTDA on the trust management
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activities which have been transferred to AlTDA. the BfA will be free to focus on other prog~ms.
:The Organizational Structure and Management Structure are more fully discussed in Appendix One,
DETAIL OF SPECIFIC ACTIO/I'S REQUIRED- PHASE I OF THE STRATEGIC PLA/I'
I. Process and systems integration: optimizing systems and organization to maximize sen'ice
delivery
,
BASIC INTERGRATED BUSINESS PROCESS MD SYSTEMS CONCEPT
The Strategic Plan proposes that the Federal Govermnent align its trust management's)'5tems and
organization;}! ::trucwre in order (0 allow it to better discharge its fiduciary obligations 1,'0 American
Indians and :~merican Indian Tribes in a manner more consistent with the acceptable legal standards of
modern trust practice. The new structure will optimize and promo:e the performance of business
processes, the execution of its trust responsibility, and the delivery ofservic:es alid products:o
Amcrknn Indian tmst beneficiaries, Because the execution orthe trust activities and :he delivery of
scrvk.:s arc primarily dependent upon the perfonlJance of its business processes (e.g., what it does as
its business, and bow it does ils business), the most effective and efficient method to establish sucb an
alignment would be to base its systems and its organizational structure on established policies and
procedures long used in private sector trust management. The trust management business processes
consist of three fundamental trust process groups involved in the delivery of Feder.a! trust services to
Indian Tribes and individuals: trust resources managemenl, trust furn.is management and land title and
records management. .
.
The operatio~al philosophy is that the policies, procedures and regulations apphcable to national bank
trust departments should be used as the guides in devetoping policies and procedures for AITDA and
the fiduciary services perfomlcd. by the U,S. Govcrrunent for American Indian beneficiaries.
II.
R~tionale
for a Private
Sector~BaSfd
Strategic Approach
Background
The Special Trustee's assessment is that the'present policies, procedures and systems do. not allow the
a'IX as required by the Reform Act and generally accepted prudential sumdards applicable to all
trustees to:
1. properly account for.and invest as well as maximize the retarn on the investment on all Trust
moneys of individual Indians and Indian Tribes; and
2. prcpar'l! accurate and timely reports to account holders regurding collections, disbursements,
investments, and return on investments related to their accounts,
In order to accomplish the two major points described above, the Secretary of the Interior and those
agencies that have been delegated responsibilities in this area must have a truSt accounting and
managemellt system similar 10 a private sector trust department system (discussed below) in place to
fully accomplish these goals or objectives, The essence of the trust accounting system Ihat is needed is
that all assets ofan individual Indian or Tribe will be rcHeered on a smgle coordinated system that will
enable a lrust report or statement to be prepared for each individual account holder reflecting all the
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assets owned, a value at cost and market, a proJec[ed income for the assets and an estimated yie!~ or
current rcturn on the assets. A trust accounting system nas at its core tne abitity to record t1nancia! and
asset informatic1n, values, income and compute yields Qr mtes of retcm, The core system can be
complin:ented by assets specific systems or modules 10 account for speciai assets such as rea! property
in its variOl15 famlS induding fann or grazing land, retail or commercial improved rental land or
buiJdbgs, minetalleasing, oil and gas leasing, etc, The present systems and tools that are being utilized
by the DOL BfA, and OTFM are independent systems that do not operate on an integrated basis
enabling information and data to pass between the systems, be verified, audited and ultimately produce
the desired complete, accurate and timely reports to account holders regarding their assets and
Income.
Private Sector Trust Department
A typical trust accounting system would have as its cemral elements the recording of 3:1 assets for
which· the trustee has fiduciary resp<)OsibiliW Assets come:n broad categories, incbding cosh and cash
equivalent; fInancial assets (common stocks, preferred stotks, bonds, debentures, notes, etc.); real
estate, mineral interest; intangible non finandal assets, such as leases and partnerships (general and
limited); tangible assets including jewelry, china, silver, furniture. preeious metals such as gold and
silver. coins, ingots, etc, Within the trust accounting system there will be various system subsets. or
modules that will provide enhanced ability to record and manage the assets. These subsystems utilize
assets specific inrormation in providing fmancial transactions, trust statements, or consolidated
statements fbr accounts or for the trust department as a whole, Included in such modules or subsets
would be a securities module that would enable monthly, weekly or daily pricing of financial assets
that are traded on a national exchange such as the New York Stock Exchange and the NASDAQ.
Pricing serviCe!: such as the Standard & Poors, Bloomburg, and Morningstar could be integrated into
this securities subset or module. In a similar manner, systems pertaining to land and improvements on
the land are also available and can be utilized where appropria,k An additional module freq'Jently used
by trust departments would be a common trust Of pooled investment fund system to manage the
lI1vestment, ,accounting and valuation for commingled investments,
At the heart of the trust system and organization is a trust accounting (ir operations unit or
department. In order to enhance the integrity of the system, promote uniformity in recording and
reponing of as~~ets, and to establish an adequate audit trail, a centralized operations and financial
recording activity is important. The trust operations area would include the following elements and
actiVities:
1. All fwaneial data input to the system, that is the initial description and recording of all assets
induding financial assets. land, and tangibles.
2. Data relating to the particular characteristics of an asset; e,g., common stocks have a specific
description or security identification number, generally pay dividends on a quarterly basis that
are uniform or may include special dividends; bonds generally pay interest on a semi-annual
basis; land may produce rental income, leasehold payments, oil and gas revenues, royaltie~. etc,
3. Reporting within the trust department and to its beneficiaries; the systems and the operations
group provides reports in a number of different forms within the department and to the
beneficiaries. Within the department there would exist statementS of conditions or balance
sheets reflecting in summary form aU assets such as the cash for which the department is
respotlsi!)le, all of the financial assets, all of the land, etc; and aU the liabilities, essentially the
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interest of all the bcneiiciaries (account holders) by the type ofaccounls, e.g., estates, trusts.
agencies. corporate trusts, etc.
A report to an 1l1dividual beneficiary Or account holder would include a trust statement displaying cash
equivalents, financial investments (bonds, debentures, and comrnon stocks); land, tangible assets,
miscellaneous a'isets, Wherever available, the statement would also include the cost basis of each
asset, the current market vatue. projected income, and a market yield on the respective assets
wherever appropriate. Complimenting the trust statement could be a report or data providing
investment pcrfonnance comparisons, that is .the curren! inl;ome and total return for this particular
account for a given period. This may be supplementcd with comparison to standard indices including
the Standard & Poors 500, a cnmmerciai bond total return index such as the Merrill lynch
Intermediate Bond [ndex or the Lelunan Brothers Intermediate or Long term Bond Index. etc.
I, Administrative Data ~ A wide-range of admini::;trative information relating to an account can
. also be produced by the system. This data frequently is produced in the ronn of administrative
ticklers, i.e .• notices or warnings that inform a trust administnl.tor or management of events to
come or action that is required to assist in the timely completion of such tasks. As an example, if
an account is for a minor who will obtnin majority and thus be entitled to a distribution of an
account at a particular age, a 90·day notice ahead of that time can he provided by the system
automatically, If the trust account is responsible for the payment of casualty insurance on
improved real estate and tbe pa)ment of real estate taxes, etc., these payments can be
anticipated and advance notice provided so that these important tasks are completed on a timely
bt'lSis without late penalty charges. In a similar manner, prospective tennioation of rental,
grazing or leasing acth,1ties can be anticipated, Anticipated income reports can also be produced
by the system to reneet the dividends, inlerest, rental, etc. payments due at a particular time to
assist in c;nsuring that all payments are received.
2. Manugement Data The typical trust system can provide a host of data and reports essential to
the proper management and oversight oftrost a<:tivities. These reports can include the workload
or number of accounts assigned to an individual accounts administrator, can report on the
receipt of new a(:counts and the termination of existing accounts, the existence of accounts In
particular geographic or organizational locations,
w
..
3. Audit - The typical trust system:-vill have an audit trail and the ability for' an independent auditor
to obtain reports. identify transactions, and the originator of the transadions. The auditors can
determine whether there are controls and balances and verification processes in place that are
consistent with operating policies and,procedures and good trust management techniques,
Ill. Discussion of the Action Elements of the Strategic Plan
A. Purchase & Upgrades 0/ Hard'N!1re and Software
Regarding [he purchase and upgrade for end-user workstations, the outside contractor found the
existing BIA f"cHilies largely well equipped (or in the process of installation) with 4861586
, technology. However, a significant number of new work stations will need to be purchased and
present ones upgraded to bring the systems at both the Tribal and BIA levels up to modem standards.
The communications networking requirements are based on a new architecture which supports the
Trust Asset and Accounting Management System in the style of a private sector trust operation. The
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communications architecture is basically a point.to.poim type service since most taIls will be directed
to the Central database in the form of data Inquiry or deposit information from the agencies and
Tribes. ft has been structured to evolve into a clientfserver configuration at any location where tbe
need becomes justifiable. Client/Server architecture, as it will be used in this proposed configuration,
does nOt move any stored data or program responsibility down to the field server leveL All files and
processing will ~ the responsibility of the eentral office level software and hardware. Rationale for
client/server facilities would be based on other llreas of activity, but not for Trust Processing.
Prelirninary analysis pegs the user workstation requirement lor trust management and the trust-related
fum:tions of land management at over l.900 PC workstations including all stated requirementS at qOI,
OST, filA and Tribal staff in the field offices and locations, trust interfaces at the Tribal offices and the
Land Title and Records Offices (LTRO) and realty user community,
B. Core Systems De~el(Jpment and Related Costs
The original points presented in the Conceptual Strategic Ptan have been expanded into a complete,
fully integrated Trust Management and Reporting Syscem. Also, for Title Plant, the observations of
the independent contractor have found that the existing Land Record Information System (LRIS)
upplicatioo pre~ently is serving the user community adequately, where properly used. The inadequacies
of this system are more related to training and data than to the functionality of the application itself.
While not an immediate priority. the LRIS system will need upgrading in the near tenn and provisions
have been made in the Strategic Plan for this upgrade (See the LRIS-2 discussion below).
The Strategic Plan proposes the acquisition ofa commercially available TAAMS product adapted to
fulfill all trust management activities, including investment, managem·ent and reporting requirements,
Commercial Trust Management Systems (CTMS) exist with modules that will integrate and perform
the trust asset nnd accounting management anrlland lease management functions in a centralized
location. This is an important enabler in achieving the Strategic Plan's objective of bringing the Trust
Asset and Accounting Management System up to commercial standards. It also presents policies,
procedures and systems that will allow the truStee to properly account for and invest all trust monies.
and prepare accurate and timely reports to account horders.
The current Integrated Records Management System (lRMS) application is insufficient to create:1
tiUSi management system at a level of commercial acceptability thal would fulfill the U.S.'
Government's fiducwryresponsibility without a major, expensive, lengthy reconfiguration. IRMS is an
outmoded system and does not articulate easily with LRlS. Since several well~documented private
sector trust management and accountmg systems exist and are for sale, it is substantially more cost
effective to buy rather than rewrite. Acquiring an existing commercially available trust management
system will greatly reduce development costs and accelerate the implementation phase.
Given the requirement oftrost management and the magnitude of the user.community, the use of
"client server networks" was not a,reconunendation of the outside contractOr. is not a requirement and
provides no real advantage. At some sites, such a facility is not practleaL Instead, the Strategic Plan
proposes thJ.t an effective communication network architecture support intemodallinkagcs between
the AITDA administnltion offices and field offices in Albuquerque, Agency Offices, Tribal facilities. a
new national archive center, and other systems interfaces. Also, implementation of this architecture
will accelerate the process ofestablishing a working network environment.
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C. Olher Core Elements
A number of other key elements are essential to meeting the Strategic Plan's goals, These elements
. include: a disaster recovery plan, daily backup capabililies, training at all levels, appropriate legal and
legislative changes, llM and Tribal file cleanup and probate and appraisal cleanup, These elements
must also be performed Ot acquired if the Strategic Plan is to be effective.
D,
End~User
Administration: General Supporr and lviainlenance
Under this configuration, end~user administration is kept 10 a minimum. The original Conceptual
Strategic Plan allowed for OTFM Technical Staffing at all Area and Agency Oilkes. The final
Stra,tegic Plan eliminated the field requirement for that level of support and has instead funded a
centralized Help Desk function. Local Technical Support now exists at the Area Offices and appears
sufficient to cover true technical needs, A simple re-allocation of funds to permit travel allows the
senior technical stalTto support the field operations. Funds were also eannarked for training at all
levels with the intent being to increase user performance and reduce end-user reliance upon the
technical support staff, wherever possible,
E. DaM Conversion and Imaging
Data conversion will be required to transfer to the new system information for processing. It was the
outside contractor'S judgment that this task has been understated in the Conceptua~ Strategic Plan
!Torn a budget point of view, Based upon the ohservations made during the field trips, a large number
of manual files as well as a number of locally developed manual processes were observed; hence. there
exists a major task in normalizing the data prior to loading it into any system, IRIS appears to provide
the fu'nctions required, A significant data clean-up task appears necessary but conversion to a new
application is nm justified at this time.
The need for imaging is obvious and is requested at most locations. The primary need is to record
maps. land deed documents. and any other documentation related to land ownership for electronic
reference and safe storage of the original and paper documents related to land ownership, Lease and
other financial documentation must be recorded from origination to final disbursement to owners.
The process of data clean~up and data imaging, when addressed as a common task, should provide a
synergistic etTort to'complete statement of work requiremenrs.
nlore
F: Systems Integration and lmplemen(cuion
The syste:m integration nnd implementation factors will be largely covered with the commercial trust
system software to be ncquired. A full integration will be a prerequisite in the selection of the software
product. End-user ;raining, which was also identificti as a high priority, will be incorporated as a part
of the related cost of core application acquisition.
G. Access by Tribes
The education lmd training to be given to the Tribal end-users will be extensive and will involve about
450 end-users. Monies will also be spent to integrate current hardware a.nd software that the Tribes
now use with Ihe new system. Access to the information depository will be guaranteed so that the
Tribes can extract data and manipulate and customize the data for their own general business
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purposes,
H Natronal Archives Center and System
Internal studies and those of the outside contrac"tor revealed the almost total lack of back-up arid
archiving procedures. Only olle site of all those visited had addressed the archival issue. The
equipment required was purchased with Tribal funds and installed in the Field Office, Tbe statfwps
trained in the procedures related to imaging and verification, which was supplemented with the
orientation required to use the services and functions of the system. This site could be the base for a
rnode! ofwhllt has to be done and one operational solution for consideration. A key lesson learned
was the magnitude ofset up time requtred, After one month of attempting to do the task with stuff
members. it wm, found to be more prudent to out source, saving both time and manpower.
The Strategic Plan budget contains the estimated costs for 1) equipment costs for imaging, 2}
equipment costs for storing tbe data. 3) equipmcnt costs: for imegraling this into the network for
access by all concerned parties and 4} the out source expenses to avoid t~e labor intensive task and
accelerate the process of imaging and creating document controL
r Upgrades to General Ledger System
Thc CTMS, as defmed ~oove, includes the trust accounting functions and the changes required for the
upgrade of the gencralledger system.
J. Additional Budget Items
I) Personnel Training
Across all arc:a, agency and Tribal sites a need for tecbnology train~ng, management training and
organization development training exists at a significant level, These training needs create a major
barrier to effective and efi1denl office operations baving to do with the implementation of current
fidudary responsibility, It will be further compounded with implementation of a new integrated trust
management system. Recent reductions in force have exacerbated these problems since field
observations reveal that significant numbers ofBIA and OTF:\1 personnel are being required to
p,~rE?rm a variety of different and new tasking functions. This has created significant .confusion with
regard to areas of responsibility, inadequate supervision. and negative feelings in both organizations.
Without training and proper supervision, much of this additional duty is being accomplished with
heavy doses 0 f self-developed on the jQb training. In addition to these training needs, further work on
process and procedure identification needs to occur. The field data supports the addition ofsignificant
increases in expenditures in training regarding the above. If this is approved and effected, there is a
strong likelihood that the implementation of the trust system will occur without having to increase
staff but rather through fe-deployment and retraining. In short. a comprehensive skill mix transition
plun is necessary coupled with. an intense on-going training to provide lhe low·cost high performance
trust operation which IS the desired outcome of the strategic investment. Field data also support the
Tribal long term interest in creating a system whu::h allQws for a larger role in managing their financial
aff.1irs, Therefore the ultimate system must have the flexibility!o aUow that transition and to provide
tbe necessary twining to accomplish the task.
.
2) Clean.Up Probate/Appraisal Backlog
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This includes paralegal services and support services to reduce the probate backlog which averages
about two year1 and is up to four years in some areas. This also includes certifil:ation ofparaiegal and
appraisal resources,
IV, Review and Analysis ofDa-ta in land and Lease Management System and Associated Training
LTRO provide a public record of the chain of title relating to real property allotted to and held in cruS!
for individuals pursuant to various treaties with Indian Tribes and acts of Congress relating to
individual Indians. The record keeping systems for LTRO include the LRlS and Property Index. LR!S
is an electronk information system and the Propcrty Index is manually maintained,
Inputs are based on documents submitted by various authorities outside ofLTRO for the purpose of
being recorded against a property or properties. Most documents submitted for recording or:iginare
from un Agertcy Office or, in the case of compact agreements, Tribes"
Outputs ofart LTRO generally consist ofa cerrified Title Status Report, u certified inventory of
property held by a decedent, and uncertified indicu:ions of ownership by pf,opcrty or by individual.
While a given LTRO may only certity properties located within the boundaries of its Aren Office,
uncertified ownership information may be obtained across Area Office databases to provide an
indicatlon of ownership for an individual having trust property in multiple areas.
In comparison with public land record systems utilized under the jurisdiction of states, an LTRO ,
combines the functions ofa registrar of deeds and a title abstract company, However, the scope ofan
LTRO goes beyond these institutions in that an LTRO may give an opinion in the case ofQwnership
disputes,
Ownership of land is also recorded by agencies on systems such as IRMS Ownership. A noted
distinction of differentes between the LTRO function and functions provided by systems such as
IRMS Ownership is that the LTRO aIJows for public inspection of land title under certain
circumstanccs while the IRMS Ownership information is subject to higher degrees of confidentiality,
A review of the Automated Lnnd Management Records System (ALMRS) was performed by the
QtT!Se of the SIX!cial Trustee and the outside contractor. Based on those reviews, it appears that the
ALMRS is nOt a replacement for LRIS but. in facr, a complementary system and an effective source
for otliciallegal descriptions of the Indian properties and related data, ALMRS is still in the
development stage. Specifics regarding an implementation scbedule were not yet available. ALMRS
provides no ownership intbmlution and therefore cannot be used as a substitute for LRIS, which. as
stated above is a workable system for the present and near tenn. ALMRS has limited utility in
replacing the basic IRMS system which is obsolete and must be replaced.
Oaps in the LTRO Function
A need for improved data flow between the LTRO and the rnainframe in Albuquerque was articulated
by interviewees of the outside contractor. Apparently the LR1S~2 project was to correct suth
deficiencies but was halted in the mjddle of the project
Interviews indicated that guidelines for detenninatron of whether a document should be recorded may
not be applied uniformly,
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Theoretically. LRIS and IRMS Ownership records should agree as to ownership, subject only to a
timing difference in a document being recorded by LRIS and posted by the Agency. In one case, LRIS
reflected that an individual had an interest in only one property (tract) when the IRMS Ownership
reflected that the same individual had an interest in more than 30 properties (trac!s). This difference.
was no: due to timing since the most recent document date on either system was 1992.
•
Field data suggest that the LTRO function is adequately supported with the current LRIS application.
Woat is missing is sufficient lrainmg, and appraisal and probate backlogs are neating barriers to
effective perfonnance of the system. The existing appraisal and probate backlogs are exacerbated by a
significant lack of qualified personnel to perform the tasks on a timely basis at alt levels in the process
chain. If these issues were properly addressed with additional human resoufces·allocatiqns, the LTRO
orgamzarion could provide the information necessary ro enable LRIS application to be fully effective.
Software improvements to tbe LRlS system. while needed to improve the imeroperabi:ity at the end·
user level, ~hOllld be a second priority after ihe fe-engineering of the Trust Asset and Accounting
Management System. Nevertheless; while not an immediate priority, the LRIS system will need
upgrading in the near term. This is because each lime ownership changes, the l..TRO staff must
perform time-consuming manual determination and documentation of ownership Interests, LruS, as
designed. is not capable of perfonning automated <:hain-of~tjtle calculations and it does not store
chllin~of-tjtle or calculated ownership information, LRIS system improvements have been delayed for
the past two yearS due to reduction in force and budget (;ut5. Provision for the upgrade of LRIS to
LRIS-2 has been provided in the Stratcgic'Plan over the medium tenn.
LTRO staff universally want more training on information systems. Some personnel are not
sufficiently familiar with computers and lack on-site systems support. especially at agency and Tribal
locations, Some paralegal training would be helpful, especially related to probate functions. Other
areas for training indudc real estate, accounting, property management, and appraisal, as well as a
tomprehensive overview of the trust process.
Calculation of Fractional Interests
A current system enhancement that would be beneficial would relate to the calculation of fractional
interest for the heirs or beneficiaries of a deceased Indian, In the current environment, the LRlS
system makes an automatic calculation ofthe new fractional share up to the 35 decimal places, if that
is' necessary. At the present time there is no such automatic calculation within the 1R.'-1S Ownership
system. It is currently being done manually with some difikulty since most calculators will n01 go out
that many decimal places. There is an impression that what staff members do is obln!n the LRlS
calculated fractional share and then enter that in the IRMS system. A system enhancement that would
make the calculation process existing on LRlS available to the 1R1v1S system would be desirable,
An additional suggestion was to consider the universal or global change order of interest in land amI.
interest Indian property rights. In four current, separatety~operated systems (IRMS Ownership, lIM,
People and the Royalty Distribution Records System) the common identification of Indians is by their
ID numbers throughout the system. The universal change order that would provide for the one-time
systems input of an ID number, would go a long way in avoiding some of the problems that are
currently being encountered. The current procedure and validation controls, for lD number assigrunent
are either insufficient or need tighter management. This requires further research for clarification,
Other field comments supported the regulation on special requirements to pay O\lr'l1ers directly for oil
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and gas, a~d mineral interest. particulatly 25 CFR 162,5 Section F. Others appear to favor some
methodology and procedure that would require a proofofpa),ment to the owner so as to avoid
problems in detennining whether Qwners have been receiving the correct amount of payment or
payment at aU, The rate ofpaiwent from the lessee is also an issue that arises in some of these
problem areas, An additional concern is when an Indian actually uses land and he is a co~owner with
other Indians 01 non~lndians, This. may (lrise when property is inherited and four or tive siblings have
, an undivided interest in the property represented by tbeir fractional share, There are specific provisions
in 25 CFR 162.2 as to the ability ofa co~owner to use the land himselfor herself. The probtcm arises
when one of four or five siblings uses the land for grnzing~ fanning, etc., but docs not share the profits
or rewards ofsuch usage with the 'Other siblings.
V. Review ofSpedal Intcrest Areas
Gaps in Special Interest Areas
1) Oil and Gas
The basic element of mformation necessary for quality reponing of production information related to
"n individual trust account centers around property ownership. Own'ership records at the trust account
level are decentralized to the Agency level resulting in a variety of "trust accounting systems" as
described above as IRMS, IBM System 36, "in house" PC~based and manual cards, Problems resulting
from the lack of standa.rd systems are manifest in centralized systems such as lIM. and MMS,
Field Issues \vere addressed regarding audit expectations relating to differences in bblslmcf produced'
by a given well and bbislmcf sold and reported to owners, Such concerns are not unique to 001 trust
minerals; they permeate commercial trust management as welL The general rule governing the extent
to which a commercial trust department audits the actual production at the well bead level is dictated
by the "prudent man rule," i.e,! the degree of audit that a person with experience would use in the
management of that persons own property. The resulting trust practice is guided by economlc factors.
and the fact that collusion between the operator and a purchaser would normail;' be necessary to
defraud die royallY owner. Consequently, field audits are nonnally conducted in cases where large
amounts of production are involved,
A perception of substandard performance on the part ofMMS was encounter~d. Interviews and dim:t
observation were unable to produce supporting detalt It is possible that ownership and audit concerns
previously discussed and their relationship to royalty distribution may be diverted to MMS. for the
functions it is intended to perfonn, provides many audits and controls which are desirable. In addition,
most funds are wired to MMS and deposited to Treasury, resulting in the generation of eamings for
the trust beneficiary within a 24~hour time frame,
.
A requirement that 100 percent approval by owners of trust mineral interest on oil and gas leases was
. mentioned on multiple occasions as a source of problems and a hindrance of the opportunity to.
develop mineral interests. It was the opinion o'fthose interviewed that the source of this requirement is
judiciaL An artIcle written for the University of Tulsa Law Journal in the Fall of 1989 sugge'sTs that the
judk:ial decision ofa U.S, District Court in New Mexico was never published and that the c.ase was
later dismissed us moot. Tbus, the Strategit Plun proposes that this problem be addressed by a policy'
change. rather than a legal fhange.
The basic element of infommtion net::essary for quality reporting of oil & gas production information
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related to an individual trust account centers around property ownership, and this is where the system
breaks down due to the problems Qfback-logs, deferred maintenanl:e and training discussed above,
Ownership records at the trust account level are decentralized to (he agency level resulting in a variety
of"trust acc()ullting systems" such as IRJv1S, IBM System 36, "in-house" PC-based systems and
manual cards. The eTMS inregratton with subsidiary support applicntions (e,g., LRlS) should
eliminate the need for multi-systems.
System Architecture
A summary concept diagram of an integrated trust application and system architecture model would
appear as represented in the diagram in Appendix One and is more fully described in Appendix I, in
the Macro International Report and in the Strategic Plan Budget.
VI. Risk management"
This will entail obtaining a risk management and control system that will provide tor adequate
o()erational audits, credit and asset quality audits, compliance reviews, independent asset appraisals,
5J.;pervision, enforcement and liaison with outside, independent auditors. It will include annual reviews
and audits of all service bureaus provlding trust services under delegated authority from AITDA,
VII.
l~tegra[ed
organizational structure
As noted. the Strategic Plan would create an organizational structure in a manner that optimizes and
promotes the perfOnllltnCe of the Federal Government's trust managemenl business processes, the
execution of its trust responsibility, and the delivery of its services and products to its clients and Ihe
American Indian trust beneficiarielt Because the executton of the trust responsibilities and the delivery
ofservices are· primarily dependent upon the performance of its business. processes, the most effective
and efficient method to establish such an alignment would be to basc its organiz;:ttional S(lUcturc on its
business processes.
'
~
There are three fundamental nnd distinct business groups: (I) Trust Funds Management (2) Land Title
and Records Management and (3) Trust Resources Management. The most appropriate organization
for these fundamental process groups would be a structure that establishes distinct but inter':'related
organizational entities under a single administration such as the American lndian Trust and
~velopment Administration,
.
vm. Specific action requirements
The Strategic Plan proposes a single organizational structure organized along business lines, Phase I
of the Strategic Plan IS designed to bring it about and to bring t.he trust management and trust
management information systems up to commercial standards within two years. The specific initiJtives
are more fully discussed in Appendix One and, at a minimum, will involve acquiring. automating,
updating, integrating, coordiru;lting and consolidating to produce:
I. A Single Organization to Manage Trust Management Activities"
This will involve consolidating trust resource, trust nlnds and land ownership and records management
processes into a single, independent institutional unit with its own management structure to
accommodate the restructuring and reorganization contemptated by Phase [ofthe Stnlte~ic Plan. The
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unil should be organized by fu~ction and-dedicated Cxdusl~ely to trust management The-unit should
be managed by a full time Chairman and a Board of Direetors appointed by the President and
confirmed by the Senate. The unit's proposed organizational form is as an independent GSE subject to
Congressional oversight,
'
2. A Tnm
As~ct
and Accounting Management System,
This wHi involve acquiring and
which will:
implen'lent~ng
a Trust Asset and Accounting Management System
A. Provide a new assef management infonttation subsystem for land and natural resource management
and a delivery system for asset leasing, contracting. lending, buying and selling, tQgether with
standardized nnd/or integrated asset management, credit and operating policies, procedures and
practices, The s.ystt;m must be able to tie to and track from land and ownership records.
, B, Provide an accounts receIvable/master lease subsystem data, tickler and collection system that uses
lease-contract and ownership information for truSt income verification, reconciliation, billing,
payments, collection, aecounting, disbursement, audit, asset quality review and compliance purposes,
C. Provide an accurate and timely trust, depository, payt11ents and delivery system for IJM accounts
and Tribal accounts. This will entail purchasing a trust, depository, payments and other financial
services accounting and statement system and a delivery system 10 more efficiently provide current
financial services and to fadlitllte new and improved finan:CLal services to individual Indians and Tribes.
D,
P~ovide
a general ledger and general accounting system to accommodate all present and proposed
TAfu\.1S systems and other improvements.
E. Contbrm to the general systems architecture described in Appcndb: One and the Strategic Plan
Budget.
3. A land Records 'and Title Recordation and Certification System.
This will involve the acquiSition of a new system which will:
A. Be capable of instuntu'neous linkage with the TAAMS and other systems used by the service
bureaus providing trust services under delegated authority from ALTDA in the near term.
g, Be brought up to private sector standards through LRlS~2 upgrades and implementation in the
medium term.
C, Conform 10 the general systems architecture described in Appendix One and the Strategic Plan_
Budget.
4. A Dedicated Technology Services Center.
This will involve obtaining a centralized technology services center dedicated to trust resources, trust
funds and land ownership and trust records management processes WIth appropriate provisions for
disaster/recovery and back~up capability,
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S. A National Archives and Record Center.
This will involve obtaining and centralizing a modern national archives and records center for trust
,Issei and acco'..tnting ;nanagement records llnd land title and records storage and retrieval along with
appropriate disaster recovery protection. Implementation of modern imaging technology should be at
the foreMfront of the improvement initiatives,
6, A Risk Management and Control System.
This wilt entaiLobtaining a risk management and control system that will provide for adequate
operational audits. credit and asset quality audits, compliance reviews, independent asset appraisals.
supervision, enfurcement and liaison with outside, independent auditors. It will include annual reviews
and audits of al! service bUreaus providing trust services under delegated authority from AlTDA.
7. Legislation on Fractionated Ownership ofIndian Lands.
Legislation is needed which would consolidate the large number ofexisting fractionated interests and
prevent further fractionation. This alooe would remove a primary obstacle to the efficient
administration of the trust management,systems and provide a major ci3talyst for the timely resolution
of most of the operational problems associated with trust management activities, including trust
resource and realty management. probate, land titles and ownership records management, lIM
accounting, coHections, deposits, investments and disbursements. castol!ler service and record keeping
for all trust management activities,
8. Such systems and organizational improvements must be accompanied by significant legal changes,
including adoption of the prudent investor rule,
9, A significam investment to
clean~up:
Probate Backlog
IIM and Tribal Records
L:fRO Tttle Defects
Appraisal Backlog
10, A Significant training investment for all trust management activities, including Tribal users,
II. The acquisition and retention of competent management
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OPTIONS FOR INVESTMENT FOR ECONOMIC DEVELOPMENT
Section 303 of the Amencan Indian Trust Fund Management Reform Act of 1994 requires, in part,
that the Strategic Plan include the fOllowing:
(8) Provisions jor opportunities for Indian Tribes to assist in the management of their trust accounts
and to identify for the Secretary oplions for the investment of their truSt accounts, ill II manner
consistent with the tnlsl responsibilities of the Secretary, in ways that will help promote economic
development in their conununities,
The Strategic Plan identifies several options which would promote economic development in the
American Indian corrununities:
New Trust Management Producl:s Under Phase Dne of the Strategic Pian
At present {he Federal, fiduciary must manage investments in accordance with the limited investment
9pportunities accorded by the statutes, none of which permit economic development options of any
kind, The Strategic Plan proposes that the Federal fiduciary's investment discretion be broadened so
that the goals of the legislation can be achieved, Severn! options for making investment decisions are
proposed. alfofwhich would permit investments ofTrlbul tnlst funds in ways whieh would promote
economic development in the American Indian communities and would include provisions for
opportunities for Indian Tribes to assist in the rnnnagement of their trust accounts,
The Strntegic Plan proposes that the trustee will be governed by the prudent investor standard as
adapted ror the special circumstances of the trust relationship between the United States and Indian
Tribes and individuals. The powers and respons.ibilLties of the trustee will be mOre clearly defined by
adopting a modified prudent investor rule, Generally, under the standard tbe trustee shall exercise
reasonable care, skillllnd c<lution to make and implement investment and management decisions as a
prudent investor would for the entire portfolio, taking into account the purposes and tenus and
provisions of the governing instrument The governing instrument would be the applicable treaties,
statutes, regulalions! judgments, etc.
The pn1dent investor standard will allow the investment of trust funds in a wider variety of securities
than are authorized under existing law and regulation in order to make these funds more productive
for current and future beneficiaries. It will not impact the accepted traditional use of the land except to
ensure that it is preserved for' future generations, However, the standard will allow the investment of
trust funds in higher yielding securities appropriate tor the Investment offimds beld in trust including
investment in Tribal infrastructure and development activities sUbject to prudential,rules. Venture
capital investments can also be made when appropriate to the objectives of the trust.
In addition to withdrawal of trust funds under 25 CFR l200, the Tribes will have the right to
participate with the trustee in developing an investment plan for their accounts. One of the
responsibilities of the trustee will be to work with the beneficiaries tOo ascertain their needs and
determine how reasonably to accommodate them, if possible.
"
Tribes could also elect to:
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1, continue the ,trust funds management of their account under currently existing restrictions.
2. withdraw eligible trust funds from the Federal fiduciary \is at present.
The tenns of the instrument may set forth various types of unusual or restrictive investment
'provisi(lns, such as:
• Prohibit (he pur;;:hase Of SH.te ofa particular security or one in a particular industry,
,. Require the fidudary to purchase only certain authorized securities or limit investments in one
asset Qr asset category to a spec~fied amount to avoid a concentration.
Under each of the options, the Federal fiduciary could also make available to the beneficiary the
benefit of its research services and act in an advisory capacity, The Federal fiduciary could also:
• Collect the principal of matured or called bonds.
• Collecl and distribute income.
• Accept possession of securities for safekeeping.
• \lotify customers of calls, subscription rights, defaults, etc.
• Provide periodic account statements.
Exercise of any one ofttle options would open up, Qn J par with the private sector, a whole range of
investment opportunities to aid economic development, including:
t. Commercial, consumer, real estate and infrastructure investments llnd loans.
2. Fractionated Realty purchases, sales, loans to facilitate, dealmg and management
3. Development investments in infrastructure acquisition and development, project financing,
venturI! capital to new businesses and capital for existing businesses.
Several new trust management products are proposed for implementation during Phase I of the
Strategic ?lan which would benefit both Tribal and IIM account holders and through prudential
savings Jnd investments promote economic development:
1, Demand and Savings Deposits exercised through a mutual fund type accounting system with
ch..::cking account and payments services, including ATM access. ca.-;h management, accounting.
statemen:s and reporting, disbursements, wire transfer, official checks, money orders and access
to discount brokerage.
2. Acceptance of voluntary deposits from all sources, including gaming revenue. with subsequent
Income free from Federal taxation.
3. Income 1l-om all trust atcounts would be free of Federal taxation to encourage savings and
eeonomk development.
"
4. Acceptance of Retirement Account5 such as Keogh Accounts and IRAs.
Phase 11 Options for Economic Development
During Phas.e 11 of the Strategic Plan fun service lifeline banking, trust and financial services
exclusively fm individual American Indians and Tribes will provide funding for economic development
making such individuals and Tribes economically more independent over the next several decades"
This will be facilitated by the creation ofthe American Indian Trust Development Bank (TDBank). It
wi!! include:
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I. A full service trust system.
This requirement will be met by building a system to provide, directly and indirectly. full tnlS( services
to include managed, agency and custodial accounts, cash management accounts. comprehensive
accounting and tax statements, discount brokerage, stock transfer, custody, pensions. collective
investment funds, fixed income and equity research and advice; mutual funds and insurance sales and
other trust services.
2_ A full service banking and depository system and delivery system.
This requirement will be met by building a system to deliver, directly and indirectly, through mUltiple
offices, full banking and depository services, to include demand and savings accounts, certificates of
deposit, overdraft protection, money orders and official checks, escrow services, foreign exchange,
capital market sales. discount brokerage, cash management services and other financial services, .
3. A full service
IlSS~:I
management, lending and leasing system and delivery system.
This requirement will ~ met by building a full service asset ~nagement. lend-ing-and leasing system
to deliver, directly and indtrectly, through multiple offices, commercial loans and leases, including
corporate. small business, middle market and agriculture loans aod leases; consumer loans and leases.
including credit card, home equity, auto. mobile home. and personal loans and leases; rcal estate loans
and leases including loans secured by single and mUltiple family housing and cornmerci,ll real estate;
and infrastructure and development loans and leases. Sucn systems will have origmation as well as
packaging. sales to the secondary market. servictng, loan panicipution and correspondent banking
services capabilities,
4. A fractionated realty holdings purchase and sales program.
This requirement will be met by a fulf service ilsset management capability and program to purehase,
sell, deal in, fmance and service fractionated realty holdings. TDBank will be allowed to invest up to
5300 million in purchases and loans for this purpose, subject to prudential terms at market rates. This
program will ~osure the consolidation of existing fractional interests and the prevention or substantial
rod!,lction of further fractionation.
.
S. An investment capability for community development projects.
This requirement will be met by developing an investment capability (0 provide equity capital,
perpetual preferred stotk and long tenn subordinated debt for economic development of the trust
lands and the Tribes and individual rndians and their business ventures. Such total investment not to
exceed i% of the Bank's equity capital to any single enterprise or project and 25% of equity capital
(initially $125 million) for the aggregate of all such investments. Such investments 'will include:
•
•
•
•
Infrastructure acquisitions and development activities,
Project financing.
Venture Capital Businesses.
Established Businesses.
6. A new managl$ment and institutional structure to accommodate restructuring & reorganization. to
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incillde a new independent bank & trust structure with the following capital requirements:
'I
This new structure which will pennil <.l: singular foeus on trust managem:ent responsibilities to
American Indians and Tribes and mOre independence from the appropriatLons process; more sclf
determination; more economic independence; greater funding access to the capital markets; greater
access !o economic development nnd a management structure and salary and benefit scale simiTar to
the Federal Reserve System, the Federal Home Loan Bank System, the Farm Credit System and the
Federal financial regulators.
, •
7, A headquarters building adjacent to rnltional archives and records center.
The restructuring and reorganization will require a new headquarters building adjacent to the national
archives and re(!ord center to accommodate the expanded products and services and the centralization
of many of the systems.
'
The U.S, banking system has long been the engine for economk growth in the private sector. '
Government sponsored banks such as those in the Federal Home Loan Bank System (since the 19303)
and the farm Credit System (smce 1916) have been the engine of economic growth for American
housing and American agriculture, The American Indian Trust Development Bank could be the engine
of economic growth for American Indian trust beneficiaries in the next century.
DEPARTMEI"T OF THE INTERIOR POSITION ON
GOVERNMENT'S TRUST RESPONSIBILITIES
BROADE~I~G
THE FEDERAL
The Strategic Plan broadens the Federal Govermnem's trust responsibilities in several ways wbich are
consistent, in the view of;he Special Trustee, with the Reform Act of 1994 requirements which, in
pan, requires the Strategic Plan to include:
(B}-Provisions for opportunities for Indian Tribes to assist in the management of their trust accounts
and to identify for the Secretary options for the investment of their trost m;;cQunts, in a manner
consistent with the trust responsibilities .of the Secretary, in ways that will help promote economic
development in their corrununities,
'
The Strategic Plan proposes that Federal fidu.c:ary discretion be broadened and new trust products
offered to meet the goals of the legislation, all of which would provide "opportunities for Indian Tribes
to assist in the management of their trust ac<;ounts" and "promote economic development in their
.
communities" and which include as noted above:
I. Increasing investment discretion for the trustee and the Tribes through use of the prudent
investor rule.
2, Allowing demand and savings deposits.
3, ~cccpting voluntary Tribal and 11M deposits from all sources, including gaming re'venues.
4, Providing for income to be free of-federal taxation.
S. Accepting retirement accounts.
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6. Providing full service trust and banking services in Phase II through the proposed Trust
Development Bunk.
7, Otber as is indicated above in this section of the Strategic Plan.
Tbe Department ofthe Interior has indicated that the Administration will evaluate the Special
Trustee's final recommendations, considering the results of Tribal and individual account holder
consultation, and submit its full views to the Congress as soon as practicable, The Department of the
luterior has expressed some initial views on some of the Special Trustee's reconm1endations:
• The Department is opposed to expanding our investment responsibilities, and therefore would
be opposed to (1) accepting voluntary deposits; and {2} increasing investment discretkm. The
DepartJ11(.'llt docs not support acceptance of VOluntary deposits in lIM accounts. ~ost 11M
accounts are "flow through" accounts; funds are regularly disbursed to the account holders. In
theory, fimds are only maintained as deposits in a limited number of cases: minors, non~compos
memis. and pending identification of beneficiaries. However, this policy has not always been
adhered to, as there is regulatory authority to accept voluntary deposits in case of hardship to
the acc~unt holder. The OTFM has a significant 11M data clean~up effort underway, in part. to
ensure the number ofUM accoums is kept to a minimum. OTFM is also developing formal
policy and procedures on establis~ing riM accounts which they expect to disseminate in 199
• The Department also does not support increasing our investment discretion. Currently,
investments are limited to direct investments in U.S. Government securities (Treasury and other
agency issues) and insured deposits or deposits collateralized by U.S. Government securi[ie~.
Tribes desiring more risky investments can withdraw their funds from truSt under the authority
of Tille 1I of the American Indian Trust Fund Management Reform Act of 1994. Final
regulations on withdrawing funds from trust were published on December 26, 1996.
'.
The Department does not support the establishment of a new government entity to manage the
Federal Government's trust responsibilities,
• Viewed in isolation, the proposals related to expanding the government's responsibilities are
genendly inconslstent with government downsizing 2:nd deficit reduction, However, the systems
portion (If the Special Trustee's plan in general would tend to be consistent with gQvernment
downsizing and deficit reduction ..
• Notwithstanding and with due respect to' the Department's position which is a very narrow
reading of the scope of (;urrent statutory authority (See 25 U.S.C 2), the Special Trustee
believes that the new trust products are essential to tbe economic growth and prosperity of the
American Indians, As to the investment discretion ufthe trustee. the Special Trustee believes
authorizing the truStee to invest Indian trust funds in securities in addition to "public debt
securities" more effectively supports the trustee's fiduciary duty to serve the best interests of the
beneficiz\ries, allow {he Tribes to participate in the management of their funds held in trust in a
practical and purposeful way and need not expose the trust funds to unacceptable investment
risk. It is. a settled principle of trusts that the trustee is under n duty to the beneficiaries to use
reasonable care and skill to make the trust property productive, In making investments,
however, a loss is always possible, sInce in any investment there is always some risk of loss even
with "public debt securities."
• Under accepted and established principles of trust Jaw, it is nol the duty of the tr,ustee. either
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individual or corporate in the private sector, to invest only in the vcry safest and ITl()st
conservative securities available. Such investments may not be in the best interests of the
beneficiaries. Assuming, for example, United St::1tes GOvernment bonds are the safest and most
conservative securities available but thai income yield thereon [s lower than other securitles, it is
not neces>arily the duty of the trustee to invest the whole trust property, or even any part of it in
such bonds. The reason for rhis is that by the use of care, skill and caution, an investment can
ordinarily be made which will yield a higher income and 3S to which there is no reason to
anticipate a loss of principal.
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LEGAL CHANGES REQUIRED
The upgrade of the trust services provided to Ihe Indian Tribes and individuals witI not only require a
.modernization of the systems but a review and updating of various laws and regufations to allow the
trustee (U.S. Governmem) more flexibility to meet the needs of the beneficiaries. In addition, the
changes should be such as to facilitate tbe active participation of the beneficiaries, if they so desire, in
rnanaging their assets consistent with sound fiduciary principles. Subsequent paragraphs will set forth
some anhe changes that the SpeciaJ Trustee believes necessary to accomplish these objectives.
The trustee will be governed by the prudenrlnvcstor standard as adapted for the special circmmaanccs
of the truSt relationship between the U.s, and Indian Tribes and individuals, which will place part!eular
emphasis on the cultural, religious, historic or environmental significance of Indian assets held in trust.
The powers and responsibilities of the trustee will be more clearly defined by adopting a modified
prudent inve:;otor rule. There is a large body of case law, interpretations) law review articles and other
mnterials that can be referenced ror guidance. Also, regulatory agencies sucb as the Office of the
Comptroller of the Currency have extensive experience and materials concerning the oversight and
supervision ofiiduciary aetivities performed under the prudent investor rule.
Generally, under the standard the trustee shall exercise reasonable care, skill and <:aution to make and
implement investment and management decisions as a prudent investor would for the entire portfolio,
taking into account the purposes and tertns and provisions of the governing instrument. The governing
instrument WQuid be the applicable treaties, statutes. regulations, Judgments, ete.
The prudent investor standard requires a trustee to pursue an overall investment strategy to enable the
trustee to make approprifl;te present and future distributions to or for the benefit of the beneficiaries
under the governing instrument, in accordance with risk and return objectives reasonably suited to the
entire portfolio. In addition, the trustee is required to consider, to the extent relevant to the decision or
action, th~ size of the portfolio, the nature of the fiduciary relationship, the liquidity and distribution
requirements of the governing Instrument, general economic conditions, the possible effect of inllation
or deflation, the expected tax consequences of investment decisions or strategies and of distributions
of income and principal, the role that each mvestment or course afaction plays within the overall
wrtfolio, the expected total return of the portfolio (including both income and appreciation of
capital)) and the needs of beneficiaries (to the extent reasonably known to the trustee) for present aoo
future dIstributions- authorized or required by the governing instrument. The prudent investor standard
will allow the investment of trust funds in a wider variety of securities than now authorized under
<::urrently appJieable law and regulation in order to make these funds more productive for current and
future beneficiuries. It will not impact the accepted traditional use ufthe land except to ensure that it is
preserved lor future generations. However, the standard will allow the investment of trust funds in
higher yielding securities appropriate for the investment of funds held in truSt tnduding investment in
Tribal infrastructure and development activities subject to prudential rules.
In addition to witbdrawal oftrnst funds under 25 CFR 1200, the Tribes wilt have the right to
participate with the trustee in developing an investment plan for their atcounts. One of the
responsibilities of the trustee will be to work with tbe beneficiaries to ascertain their needs and
detennine how reasonahly to accommodate them, if possible. Of course, if the lia.bility remains with
the trustee so does the ftnal decision. However, some flexibility can be legislated to consider an
investment prudent when developed under certain procedures and safeguards. For example, venture
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capital inveslm(:1Ots are generally considered ,2peculative not prudem, Nevertheless, a Tribe may
determine that it can afford to risk a certain portlon of its funds in a venture capital fund to promote
economic development. If the trustee concurs after considering all aspects of the proposal in
relationship to the Tnbe's total portfolio then this would be deemed a prudent investment.
While it is important to adopt new laws. regulations. rules, policies and procedures to modernize and
upgrade the 1roSt functions and services, it is equally neces.'Sary to review eXisting materials and
practices to etiminale. amend or revise them to confonn to present day trust practices. Many of the
laws dealing with the tnlstee's responsibilities were passed a hundred or more years ago when
communications were more difficult and support services Jess available. [n present time perhaps the
tnlstee should not be the entity to detennine whether someone is an alcoholic and if so whether to '
withhold disbursement of funds due that individual. There are other practices and procedures that on
their face appear to be offensive and unnecessary. In any case a general review of an existing laws,
regulations, rules, policies and procedures will be undertaken to confom them to modem practice.
This will apply not only to the Department of the Imerior, but to other departments and agencies as
well. An impof1ant goal ofsuch a review will be to identify conflicts within the government that may
adversely impact the trustee's tiduciary responsibitity to the beneficiaries. For example, the Treasury
Department has ccrtain interpretations of la\!~!s concerning payment of interest that impact the trust
funds deposits.
Other important legal issues include probate, fractionated interest and self~govemance all of which
affect the trust management reform eOorts to a greater or lesser extent. Many of these matters are
currently under study with changes being suggested.
Finally, it should be clearly understood that the updating of the legal parameters within which trust
• management is perfonned should not be a condition for the upgrading of the fmancial systems. The
latter is critical and will be overdue no matter when it is completed, Many of the legal and policy
reforms are underway or in the planning stage. Many of these refoons will require extensive
<:onsultation and outside input. Others may require only policy guidance. In 3: worst case basis, jf 110
. legal reforms occur) the trust function can be adequately performed if the systems are fLXed. but if all
the Jegal and policy rcfoons are implemented and. the systems are not ftxed the situation wiU be worse
than it is now,
1. Investment of Tribal funds Held in Trust
..
Section 20 I of the American Indian Trust Fund Management Reform Act of 1994 (25 U.S.C. 4021)
authorizes the S~retaryofthe Interior to anow "Tribes an opportunity to manage tribal funds
currently held in trust by the United States" in order to give Tribal governments greater control over
the management of such funds or to demonstrate how the principles of self determination can work
with respect to sUl:h trust funds, in a InaMCr consistent wlth the trust responsibilities of the United
States. At present 25 U.S.c. 161 a limits the investment of Indian Tribal funds held by the Secretary in
trust to "public debt securities with maturities suitable to the needs of the funds involved. II The statute
restricts the type oflnvestments that may be used and vests the selection of those investments
exclusively in the hands.oftbe Secretary. In order to_ accomplish the Objectives of the Reform Act it
will be necessary to amend 25 U.S.c. 161 a. The statute should be amended to anow the trustee to
invest and reinvest funds held in trust by the United States lQr Indian Tribes in accordance with the
prudent investor standard in any security or securities of any kind with the objective ofproduc[ng a
reasonable and regular return for the aCCount consistent with the continuing needs of the beneficiaries.
The trustee shall make such investments in ¢otlsultation with the Indian Tribe for which the
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investments are made provided the T'ibc wishes to be consulted: Notwithstanding anything to the
contrary. an Indian Tribe will continue to be able to withdraw some or all funds held in t'rust for such
Tribe by the liniled States,
'
A new section of the statutes should be added which sets QUi the prudent investor standard applicable
w the uwestment and management of property held in trust by the Government oftbe United States
lor both Amerkan Indtans and or American Indian Tnbes. That legislative language should read as
follows:
PRUDENT INVESTOR ACT
(a) Prudent investor rule, purpose.
The Government of the United States, as trustee) bas tbe duty to invest and manage property held by it
in a fiduciary capacity for American Indians and American Indian Tribes in accordance with the
prudent investor sta.ndard defined by this section, except as otherwise provided by the express tem1S
and provisions of a governing instrument. This section shall apply to any investment made or held on
or ofter January tll'st. nineteen hundred
by the trustee.
(b) Prudent inwstor standard.
(I) The prudent investor rule requires a standard of conduct, not outcome or performance.
Compliance with the prudent investor rule is determined in light of facts and circumstances prevailing
at the time of the decision or action of the trustee, The trustee is not liable,to a beneficiary to the
extent tbat the trustee acted in substantial compliance with tbe prudent investor standard or in
reasonable reliance on the express: terms and provisions of the governing instrument.
(1) Trustee shall exercise reasonable care, skill and caution to make and implement investment and
management decisions as a prudent investor would for the entire portfoliO, taking into account the
purposes and tenus and provisions of the governing instrument.
(3) The prudeni
inv~stor
standard requires the trustee:
(A) to pursue an overall investment strategy to enable the trustee to make appropriate present .md
future distributions to or for the beneHt of the beneficiaries under the governing instrument, in
accordance with risk and return objectives reasonably suited to the entlre portfolio;
(8) to consider, to the extent relevant to the decision or action. the size ofth'e portfolio, the nature of
the fiduciary relationship, the liquidity and distribution requirements of the governing instrument,.
general economlc conditions, the possible effect of inflation or defia{ion, the expected tax
consequences of investment decisions or strategies and of distributions of income and principal. the
role that each investment or course of action plays within the overall portfolio. the expected total
return ofrhe portfoliO' (including both income and appreciation O'f capitoJ), the cultural, religious,
historic or environmental impact on Indian land and the needs of beneficiaries (to the extent reasonably
known to the'trustee) for present and future distributions authorized or required by the governing
instrument;
(C) to diversify assets unless the trustee reasonably determines that it is in the interests of the
bencticiaries not to' diversity. taking into account the purposes and terms and provisions of the
gove,ming instmment; and
(D) within a reasonable time after the creation of the fiduciary relationship, to detennine whether to
retain or dispose of initial' financial assets,
(4) The prudenl Investor standard authorizes the trustee:
fA) to invest in any type of investment consistent with the requirements of this. paragraph. since no
particular investment is inherently prudent or imprudent for purposes of the prudent investor standard;
(B) to consider related trusts, the income and resources of beneficiaries to the extent reasonably
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known \0 the trustee, and also'an asset's special relationship or value 10 some or all of the
beneficiaries including cultural, religious. historic, environmental and similar concerns. if consistent
with the trustee's duty of impartiality;
(C) to delegate investrrient and management functions if consistent with the duty to' exercise skill.
including special investment skills; and
(D) to incur costs only to the extent they are appropriate and reasonable in relation to the purposes. of
the governing instrument, the assets held by the trustee and thc skills of the trustee.
(5) Special investment &kills.
The exercise of skill contemplated by the prudent investor standard shall require the trustee to exercise
such diligence in investing and managing assets as would customarily be exercised by prudent
tion and intelligence having special investment skills.
investors ofdiscr7
(c) Delegation of investment or management functions,
(J) Delegation of an investment or management function requites ;he trustee to exercise care, sk!1I and
caution in:
(A) selecting a de1egee suitable 10 exercise the delegated function. taking into account the nature a.nd
value of the assets subject to such delegation and tbe expertise of the delegee:
(8) establishing the scope and tenns of the delegation consistent with {he purposes ofthe governing
instrument;
(C) periodically reviewing the delegee's'exercise of the delegated function and compliance with the
scope and tenm of the delegation; and
(D) controlling the ove-nill cost by reason of the delegation.
(1) The delegee has II duty to the trustee and to the trust to comply with the scope and terms of the
delegation and to exer:cise the delegated furn;;tion with reasonabie care. skill and caution. An attempted
exoneration ofthe delegee from liability for failure to meet such duty is contrary to public policy and
void.
(3) By accepting the delegation of a trustee's function from the trustee. the delegee submits to the:
jurisdiction of the Federal district courts, and or any altemative dispute resolution procedure adopted
by the trustee by regulation t even if a delegation agreement provides otherwL~e, and the delegee may
be made a party to any proceeding in such courts that places in issue the decisions or actions of ihe
delegee,
(d) lnvestment in securities ofrclated investment companies.
-
"The trustee may invest m securities of the United States Government or its agencies.
"
(e) As used in this section:
(1) the tenn "trustee"is the United States Government;
(1) the te.nTI "trust" includes any fiduciary entity with property owned by ~ trustee as def~ed in this
section;
(3) the ienn "governing instrument" includes a court order, treaties, statutes, awards, regulations,
executive orders and similar documents;
(4) the tenn "portfolio" includes all property of every kind and character held by 3 trustee as defmed in
this section.
Authorizing the trustee to invest Indian trust funds In securities in addition to "public debt securities"
more effectively supports the trustee's fiduciary duty to serve the best interests of the benefic1ari~,
ailow the Tribes to participate in the management of their funds held in trust in a practical and
purPoseful way and need not expose the trust funds to unacceptable investment risk. It is a settled
principle oflnlsts that the trustee is under a duty to the benefidaries to use reasonable care and skill to
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make the trust property productive (See the Restlltement. section i at), In making investments.
however, :l IQSS is always possible, since in any bvestment there is ahvays some risk of loss even with
"p'Jblic debt securities. tl The question of the amount ofr:sk IS a question of degree,
Under accepted and established principles of trust law it is not the duty of the trustee. either
individual or corporate to invest only in the very safest and most conservative securities available.
Sucb investments may not be in the best interests of the beneficiaries. Assuming, for example, United
States government bonds are the safest and most conservative securities available but that income
yield thereon is lower than other securities, it is not necessanly the duty of the trustee to invest the
whole trust property, or even any part of it in such bonds, The reason for this is that by the use of
care, skill and caution, an investment can ordinarily be made which will yield a higber income and as to
which there is no ,reason to anticipate a loss of principal (See the Restatement 'section 227).
j
These theories have becn tested in the market place and produced highly successful results. For
examplc, as set out in its Annual Report for 1996, Washington Mutuallnvestors Fund, managed by
The American Funds Group, has perfonned well over the forty three years since it was founded in
1952 by selecting investments suitable for trust funds. Its investment concept evolved from the
.experiences learned during the Depression years of the 1930's, when individuals and institutiQn~ turned
away from speculative excess to re~embrace sound investment principais based on prudence, diligence
and value, [n 1937, the United States District Court for the District of Columbia established a "Legal
List" of bonds suitable for trust funds. This List was composed of high quality issues selected by the
use of a strict investment criteria which became known as "Rule 23". The court nmdified Rule 23 in
1947 to permit investment in an expanded Legal LIst which ior.::luded higb~grade cornrno!1 stocks.
With few excep[ioos, the investment standards established by the U.S. District Court serve as the basis
for the Fund's investment choices. Some oftho'se standards are:
• A security must be listed on the New York Stock Exchange. or be eligible and have applied for
listing.
.
• Excep1 for banks, a company must have:
l, fully earned its dividends in at least four of the past five years.
2, paid a dividend in at least nine of the past ten years,
• The ratio of current assets to current liabilities for most industrial companies must be at least 1.5
to i, or their bonds must be rated no lower than A- or A3.
• Banks, insurance companies and other finandal ffistitutions must have capital funds of at least
$100 million.
• Banks and savings and loans must have paid a dividend in four of the past five years and
• Companil;s must not derive the majority of their revenues from tobacco or alcohol products.
The Fund is committed to have at least 95% of its assets inves[ed in equity securities that meet its
Eligible List criteria, Not all such securities are purchased, It is reported that there are approximately
5,300,000 companies and partnerships in the U,S,; 13,009 of these are publicly held; 2,500 are listed
on the New York Stock Exchange; 290 meet the standards of the Eligible Ust and 133 of these were
held in the portfOlio in 1996.
As of AprIl 30. 1996, the Fund's net asset value was over $20 billion. It is reported it has out paced
the Standard and Poors 500 composite Index in 32 'of34 rolling ten year periods over the past 43
fiscal years on a reinvested basis, generated positive returns in 37 of the past 43 fuU fiscai years,
including 19 of tile past 20 and held up better than S & P 500 in every stock rnarke~ decline of 15%) or
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31[6100
�Strategic Plan TabS.
Page 6 of6
more since the Fund \vas established. In contrast, over the past several years public debt securities
have made a return of six to eight percent 11 year, far under performing other trust appropriate
investments"
The market risk ofexpanding the trustee's investment authority for Tribal funds can therefore, be
characterized as negligible. if such authority is executed in a professional and competent m:mner,
2. Investment ofTribnl Funds and Funds Held for Individuals in Trust.
The trustee should be authorized to invest all or a portion of Tribal funds or funds held for individuals
with other Indian funds held in trust, when it is in the best interest of the beneficiary for which the
funds are held in trust, in :1 common trust fund or funds maintained by the trustee exclusively for the
collective investment and re~investment of Indian monies, Each such common trust fund shall be
established and maintained in accordance with a written plan which shaH be approved by the trustee
nnd each Tribe the funds of which are to be invested in it. The plan shall contain appropriate
provisions not inconsistent with the rules and regulations of the Comptroller of the Currency, 12 CFR
9, Fiduciary Powers of National Banks and Collective Investment Funds, as to the manner in which
the funds are to be operated, including provisions relating to the investment p<Jwers and a general
statement of the investment policy and goals of the fund; the allocation of income, profits and loses;
the terms and c!)nditions governing the admission or withdrawal of participation in the fund; the
aUditing of accounts of the trustee with respect to the fund; the basis and method of valuing assets in
the fund. setting forth spedfic criteria for each type of assets; the minimum frequency for valuation C!f
asset of the fund; the period following each valuation date dunng which the valuation may be made.
which period in usual circumstances should not exceed ten business days; the basis upon which the
fimd may be terminated; and such other matters as may be necessary to define clearly the rights of
participants in the fund. Except as otherwise provided at 12 erR 9.18 (0) (15). fund assets shall be
valued at market value unless such value is not readily ascertainable. in which case a fair value
detennined in good faith by the trustee may be used. A copy of {he Plan shall be 'available at
designated offices of the trustee for inspection during all hours the office is open for bus~ness> and
upon request a (:opy of the Plan shall be furnished to any person,
3. Other Investments
Generally, the prudent investor rule pemrits a wide variety of investments in most categories of
corffinercial and infrastructure development enterprises. provided that proper care.' skill and caution
are exercised by the trustee, In addition. some flexibility can be legislated to consider an investment
prudent when developed under certain procedures and safeguards. For example, venture capital
investments are generally considered speCUlative not prudent Nevertheless, a Tribe may determine
that it can afford to risk a certain portion of its funds in a venture capital investments to prOmote
economic development. If the trustee concurs after conSidering all aspects of the proposal in
relationShip to the Tribe's total portfolio then this would be deemed a prudent investment
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3/16/00
�Strategic Plan Tub6
Page I of I
SUNSET DATE FOR THE OFFICE OF THE SPECIAL TRUSTEE
Sunset Date for the Office of the Special Trustee
The Office of the Special Trustee for American Indians and the Special Trustee for American Indians"
should be terminated 30 days after the effective date Qfthe transfer of the trust management
responsibilities, duties and activities to the AITDA.
The Offi<:e of Trust Funds Management arid all its statTshould be transferred to AITDA on the
effective date of transfer just mentioned.
All other staff ofthe Office of the Special Trustee should be transferred to AITDA Orl the effective
date of transfer just mentioned to assist in and help guide the implementation of the Stnltegic Plan.
--
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3116100
�Phase II of the Strategic Plan" American Indian Trust and Development Bank
Ph<lSC II Objective: To Furm a single organization which will:
•
manage the U.S. Government"s trust responsibilities to american indians and american mdian tribes for
trust resource management, trust funds management and land title and records management.
•
Provide fur Full Service Lifeline Banking, Trust and Financial Services to Individual american Indians and
Indian Tribes and Provide Funding for Economic Development Aimed At Making the Individual
American Indian <fnd Jndian Tribes-economically viable over the next severa! decades,
Phase [J Introduction
Phase n of {he Strategic Plan will commence with the completion of Phase I--i.e.• when the systems, accounting
and organizational restructuring and re~engineering required by Phase I are compfete, Systems, accounting nnd
organizational ehangcs made during Phase I of the Strategic Plan will be planned, designed and implemented in
sueo a way that they· will anticipate attd be compatible wito
~hase
II changes, programs and initiatives.
Tbe basic ditfcrcnce between Phases I and II of the Strategic Plan is that full financial scrv1ces and economic
development funding will be provided in Phase II. The recommended organizational struCture and delivery
system will take the fonn of a bank and trust company similar to tbose found in toe Farm Credit System.
Phase 11 General
R(~quirements
Phase 1) requirements will include all Phase I requirements. Phase II will build on Phase I and will include
acquIring, automating, updating, integrating, coordinating and consolidating in ways so as to produce:
· A full service tnl5t system.
"~Tliis requirement will be met by building a system to provide. directly and'indirectly, full trust selV<ices to
include managed, agency and custodial accounts, cash management accounts, comprehensive accounting'
arid tax: Statements, discount brokerage, stock transfer. custody, pensions, collective investment fundS:
fIXed income and equity research and advice, mutual funds and insurance sales and other trust services.
, A full service banking and depository system ~md delivery sys.tem,
This requirement will be met by building a system to deliver, directly and indirectly, through multiple
offices, tull banking aod depository services, to include demand and savings accounts, certificates of
deposit, overdraft protection. money orders and official checks. escrow services. foreign exchange,
capital market sales, discount brokerage, cash management services. and other financial services.
�· A ,full service asset management, lending and leas-ing system and ?elivery system.
his requirement will be met by building a full service asset management, lending and leasing system to
deliver, direclly and indirectly, through multiple offices, commercial loans and leases, including corporate,
small business, middle m(l.rket and agriculture loans and leases; consumer loans and leases, including
credit card, home equity, auto. mobUe home, and personalloans and leases; real estate loans and leases
includmg loans secured by single and m'ultiple family housing and cormnerdal real estate; ~nd
infrastructure and development loans and leases. Such systems would have origination as well as
packaging) sales to the secondary ma~ket, servicing, loan ;x<rticipation and correspondent banking
services capabilities.
.
· A fractionated rcalty holdings purchase and sales program.
'nlis requir!!mem will be met by a full service asset management capability and program to pun::huse, sell,
deal in, finance and se~ice fractionated realty holdings.
· An investment capability for community d,evelopment projects.
his requirement will be met by developing an investment capability to provide equity capital, perpetual
preferred stock and long term subordinated debt for economic development of the trust Jands arid the
Tribes and individual Indians and their business ventures, Such total investment not to exceed 1% of the
Bank"s equity capital to any single enterprise or project and 25% of equity capital for the aggregate of all
such investments.
· A new management and institutional strueture to accommodate restructuring & reorganization, to include a
ncw indepcIldcnt bank & trust SlfUctUte with the following capital requlremems:
Equity Capital
" Borrowing Capacity
nitial Borrowing from U.S,
500 million
10 times capital
$3 billion, 30 years, 30 year T rate
This new structure which will pennit a singular focus on trust management responsibilities to American
Indians and Tribes and more independence from the appropriations process; more sdf-detenninatioo;
more economic independence; greater funding access to the capital markets; and a management structure
and salary and benefit scale similar to the Federal Reserve System, the Federal Home Loan Bank System,
the Fann Credit System and the Federal financial regulators,
, A headquarters building adjacent to national archives and records center.
The reStructuring and reorganization will require a new headquarters building adjacent to {he national
archives and records center to acconunodate the expand,ed products and services noo the centralization of
�, many of the llystems.
. Systems and technology enhallcemcms to facilitate Phase 11 restructuring and reorganization.
This wit! require building further integrated systems and technology enhancements :0 facilitate the Phase
11 requirements,
Phase II Specifie Requirements
AMERICAN INDIAN TRUST AND DEVELOPMENT ADMINISTRATION
TRUST DEVELOPMENT BANK
(AITDA & TDBANK)
PURPOSE AND OVERVIEW
The strategic plan"s primary objective is to form a single organization which will:
Manage the U,S. Government"s trust responsibilities to American Indians and American Indian tribes for
:rust resource management, trust funds management and land title and records mana.gement.
Provide for Full Service Lifeline Banking, Trust and Financial Services to Individual American Indians
and Indian Tribes and Provide Funding for Economic Development Aimed At Making the lndividual
Amerkanlndian and Indian Tribes economically viable over the next several decades.
The AlTDA win be an independent GSE similar to the Farm Credit Administration with a Chairman and a Board
of Directors appointed by the President and subject to Senate confirmation. The Board is structured in such a
way so as to draw majority representation from American Indian trust beneficiaries, including both Tribal and
[ndividual Indian Money account holders. The Chairman and one other Board member will be people' who have
practical experience in fiduciary trust fund. investment and financial management. The Board of Directors and
Chairmarrof AlTDA will devote full time to the job and will also serve as Board members and the Chainnan of
TDBank, which will be the development operating arm ofthe American Indian Trust & Development
Administration.
While AITDA and TDBank will assume llnd manage the U.S. Govemmem"s primary truSt responsibilides to
American Indians and American Indian Tribes in the important areas of trust resource management, trust funds
management and trust land and ownership records management, there will be no diminishment of the Federal
trust responsibility t'o American Indian beneficiaries. Essentially, the United States will retain its full trust
responsibility but simply transfer administration from the Department of the Interior to AITDA and TDBank for
the trust management activities. AlTDA and TDBank will still be backed by the full faith and credit of the Un,ited
States, In addition, tbe singular foeus on trust management activities. independent and dependable funding and a
skilled Bourd of Directors and management team should ensure that the U$. Government will be able to
improve its ability to fulfill its trust responsibilities to Arn~dcrm Indian beneficiaries, The United States would
remain liable for any breach of trust by AITDA and TDBank. With initial capital 0[$500 million and with the
�U.S, Govemment"s agreement to maintain minimum capital of$500 million for TDBank, sufficient fimds will be
available to cover any operating losses or to pay claims for future possible breaches of trust.
TDBank will be a nationwide fmancial institution that lends to, invests in and provides financial services for
American lndians and American Indian Tribes and their corrununities on prudential underwriting standards. These
activities' will provide the Amerkan Indian communities with a dependable source of credit and investment for
economic development purposes and will provide a more stable and dependable structure for futftJling part of the
U.S. Government"s rcsponsibilities to individual American Induins and Amerkan Indian Tribes.
AITDA and TDBank will be created and extensively governed by Federal statute and wiJI be a GSE of the
Federal Government intended to carry out and further governmental policy concerning the Federal
Govcrnment"s trust obligations and responslbillties to Amerkan Indians and American Indian Tribes for trust
management activities and the economic development of American Indians and their communities,
The TDBank wit!
flH;~litate
and implement efforts and initiatives to make individual American Indians and
American Indian Tribes economically more viable and independent under established principles ofself
detennination and st"lf-governance. TDBank will also provide at no cost or at a subsidized cost, lifeline financial
services which arc Hot being provided or cannot be provided by the private sector at an affordable cost to
individual American Indians or American Indian Tribes.
TDBank will be a for-profit fmanciai institution and will generally be required to cover its operating expenses
from tt:Ust, lending. leasing and investment revenues. The Bank will therefore not generally be eligible for
authorized and appropriated funds from the U.S. Government, except that the cost oflifeline fimmdal services
and the cost of certain other specified programs authorized by Congress will be reimbursed in whole or in part
from authorized and appropriated funds,
BENEFITS TO AMERICAN INDIANS AND AMERICAN INDIAN TRIBES
TDBank will be a nationwide financial institution focused solely on providing.a dependable source of:
Lending to American Indians and Tribes and their communilies, including access to commercial, real
estate and consumer loans for all purposes.
Investing in American Indian Enterprises for economic development purposes,
Lifeline financtul services to American Indians llnd T~bes.
The Bank"s lending) investment and lifeline financial services win be provided consistent with ,principles of self·
determination, self~governance and economic viability and independence.
TDBANK GENERAL STRUCTURE AND RELATIONSHIP TO THE FEDERAL GOVERl'lMENT
TDBANK will:
be an instrumentality of the Federal Government and. will be backed by the ftlll faith and credit of the
United States..
�be governed by a Chairman and. Board of Directors appointed by the President :mu confirmed by the
Senatc.
have appropriate oversight from the Congrcss on an ongoing basis.
be examined by an existing (OCe is proposed) or new agency of the Federal Government.
have a corporate structure p;lt1erned after banks belonging to the Farm Credit System,
not be corn.monly ow~ed or controlled. (nstead, the Bank will be cooperatively owned by the American
Indian Tribes,
have a budge:. that will be subject to the federal Government"s authorization llnd oversight processes.
But the Bank will be a for·profit financial instItution and will generally be required to cover its operating
expenses from trust, tending, leasing and investment revenues and other banking activities. The Bank will
not generally be eligible for. authorized nnd appropriated funds from the Federal Government except that
the cOSt oflife!ine financial services and the cost of other specific programs approved by the Congress
may require a subsidy, in whole or in part, from appropriated funds of the Federal Government,
oe required to have an annual audit and report from an independent, qualified accounting flfrrl,
be exempt from all Federal and state taxes,
TDBANK CAPITAL STRUCTtiRE, FU!'iDING, OWNERSHIP AND DIVIDENDS
TDBank.' 's equity capital and funding will be provided by the Federal Government in the following amounts:
, $500 million in equity contributions from appropriated funds, judgment funds, Of from funds provided by
other Government SponsQred Enterprises such as the Farm Credit Banks or the Federal Home Loan
Banks or FNMA and GNMA.
.
.
, $1 billion in direct,long tenn loans from the United Slates for 30 years at the U.S. Treasury interest rute
paid on 30 year obligations.
, Future .funding Qfup to ten times equity capital from the sale of bonds and notes in the nation"s capiial
markets, guaranteed by the fut! faith and credit orthe United States. The initial limit of$5 billion shall
Include the $3 billion Joan described under item two.
"The Federal Government will be required to maintain permanent equity capital equal to 5% ofaverage riskadjusted assets.
TDBank"s initial capital stock will be distributed to Federally recognized American Indian Tribes in proportion
to the number of Amer«:an Indians llvUlg on or near reservations as detennined by the latest census information
or by some olber means. determined by Congress with input from Indian Country. This pennaf"!ent capital cannot
�be sold. traded or withdrawn. Alternatively, or in combination. other Government Sponsored Enterprises such as
tbe Farm Credit Banks, FNMA, GNMA and the Federal Home LQan Banks might be compelled to provJde aU or
part of the initial investment capital ofTDBank. While such fi.tnds could not be withdrawn. such investments
would draw Ii dividend along with other shareholders.
Each oorrower using TDBank"s loan facilities will generally be required to invest in capital stock or participation
certiHcates of the Bank. The statutory minimum amount ofcapital investment required for borrowers should be
two percent of the loan or one thousand dollars, whichever is less. This requirement will not apply to loans or
leases to individual American (ndians for consumer purposes such as housing, automobile loans and the like.
Such payments of dividends and/or distribution of eantings are subject to regulations that establisb minimum at~
risk capital standards.
TDBA:'<K BOARD OF DIRECTORS AND MANAGEMENT STRt:CTURE
TDBank"s Board of Directors sball consist of at least five members appointed by tbe President and confirmed by
the Senate.
.
, Three members shall be American Indians appointed by the President after being proposed by Indian
Country in some organized way.
, Two members, irn;luding the Chairman and Chief Executive Officer, shall be people skilled in firnmcial and
tru~t management and may also be American lndians.
TDBank"s Board shall be idenlical with AITDA"s Board.
All Board Members ofTDBank and ALTDA will be appointed for a term of 12 years using a staggered system,
Initially, two will be appointed for four years; two will be appointed for eight years; and the Chairman & CEO
shaU be appointed for 12 years. Vacancies which occur prior to the expiration of the term shall be filled with
individuals to fill the remaining tenn of the particular vacancy.
TDBank"s Board shall organize itself through governing cQmmiuee"s to oversee the primary operations of the
Bank, ineluding trusl resource management; trust funds management; trust land and ownership records
mnnagement; lending, leasing activtties; investment actIvities; risk management and audit activities; and other
banking and trust activities.
All Board members will be full time employees and will be compensated at the same ratc paid FDlC Directors or
as otherwise determined by Congress,
.
The Chainnan & CEO and other executive management and employees will be qualified bank and trust officers
and employees and shaH be exempt from Federal Government emp!ojt1l1ent requirements, Compensation and
benefits will be determined by the Board of Directors after taking into account general compensation and benefits
schedules of the Farm Credit System Banks.
�TDBANK DELIVERY NETWORK
TDBANK will deliver financial services through:
50 to 75 branch offices located in or near major American Indian communities.
A commercial grade telecommunications and electronic nation-wide delivery system,
TDBANK"S LENDING, LEASING, INVESTMENT AND FINANCIALLY RELATED SERVICES
The Bank will;
be dedicated and restricted solely to making loans, leases, investment and financial servi\:es available to
eligible and qualified individual American Indians and American Indian Tribes and their communities in all
areas of the nation.
follow prudential, safe and sOllnd lending and.investment polices. procedures and practices which will be
enforced.
taciiitate and implement efforts and initiatives to make individual American Indians and American
Tribes economically more viable under principles ofself-detcrnrination and
I~dian
self~govemance,
provide at no cost or at a subsidized cost, lifeline trust, depository, lending and o:hcr financial services
which are nol. being provided or cannot be provided by the private sector at an affordable cost Such
lifeline fmandal services may be provided. indirectly, through private sector fmancial institutions if it is
{.':ost effective to do so.'
charge appropriate fees and ,interest rates for its financial services and products, sufficient to cover
funding, operating and administrative expenses and sufficient to produce reasonably profitable operations.
These fees and interest rates should generally be lower than those charged by private sector institutions
because the Bank will have access to the nation"s capital markets for funding at rates commensurate with
those paid by the Federal Government and agencies of the Federal Government and because the Bank will
. be exempt from all Federal and state taxes, Benefits from the lower funding costs and tax free status, in
turn, will be passed on to American Indian borrowers in the form of favorable interest rates charged on
the Bank"s loans.
Lending and Leasing Products:
rDBANK will make long tenn loans of up to 30 years for ec'onomic development of American Indian
communities, usually secured by first mortgages on individual propenies and Tribal real estate or enterprises.
These long tenn loans will be made for a variety of purposes including: purchasing land, buildings, ma\.'hinery,
equipment and livestock; refinancing existing mortgages and paying other debts; constructing or repairin'g,
buildings; improving land; and fmancing agriculture, industrial or extraction industrtes, Loans will also be made
for the purchase and construction ofbomes, for real estate needed for aquatic operations, fOr plants) tor
processing and marketing facilities. for Tribal government needs and for American Indian related businesses:
The Bank "will also make short term loans to consumers home ov.'Uers, smaU businesses, farmers, ranchers.
j
�Tribal governments and American Indian related entities on a secured or unsecured busis; fmance eligible utilities,
including electrical distribution. generation and transmission, telecommunications, and water and waste disposal
systems; :md provide equipment and other teasing.services to eligible borrowers.
TDBANK INVESTMENT IN COMMUI'iITY DEVELOPMENT ACTIVITIES
The Bank wilI be authorized to invest up to 25% (initially. $125 million) of its pennanem capital in eligible
individual American Indian and American Indian Tribal business ventures and projects which will aid economlc·
development of their communities. These investments will include common stock, preferred stock and long term
subordlflated debt investments lit;
.
· fnfrastructure ut;quisitions and development activities.
· Project Financing.
· Venture Capital Businesses.
· Established Businesses.
TDBANK INVESTME:'ITIN FRACTIONATED REALTY INVESTMENTS
The Bank will be allowed to invest up to $JOO million for the purchase, holding, financing and sale of
fractionated realty in1erests of American Indians on allotment Jands. Such purchases and financing will be made
on prudential tenns at market rates to American Indian individuals and Tribes. Such activities will be regulated
by rules set forth in Itgislation to resolve the fractionated heirship issues. The principal purposes of this program
are;
, The consolidatkm of existing fractional interests,
· The-prevention or substantial reduction of further fractionation.
TDBANK LIFELINE DEPOSITORY AND OTHER FINANCIAL SERVICES
The Bank will provide a fuil range of commerclilJ banking services to its American [ndian customers. These will
include:
, Lifeline banking and financial products. including statement rendering, accounting, reporting, record
keeping, tux planning, cash management. investment, collective investment funds, mutual funds, equity
and fixed income funds, property management and others.
, Lifeline depositQry, payment and investment services, including demand and savings accounts, certificates of
deposit, IRA & Keogh accounts; check and other disbursement vehicles, wire transfer, cash management,
�money orders, official checks, discount brokerage, insurance and annuity sales, mutual funds sales and
treasury sales and the like.
These financial services are intended to be lifeline in nature. Liteline finandal services are not intended to
compete with private sector financial institutions providing those services, Rather, they will be provided by the
Bank when such services are not or cannot be provided by the private sector at an affordable cost. The Bank will
provide them at no cost or at a subsidized affordable cosl in such circumstances, Such lifeline banking services
may be provided by the Bank indirectly Ihrough private sector fmancial institutions when it is cost effective to do
so;
TDBANK"S FEES AND CHARGES
Genernlly, TDBank will cbarge fees for services at rutes commensurate witb the private sectoc While fees will be
charged. the Americ.1tl Indian beneHciaries will stiH benefit by substantially increased access to credit and capital
at subsidized rates made possible by the Bank"s access to U.S. Government guaranteed funding at low rates and
by TOBank"s tax~free status.
TDBnnk"s Board of DirectOrs will develop and publish a fee schedule for all financial and trust services provided
by the Bank, The following principles will apply:
, The fees chnrged will not be more than 'comparable tees' chnrged by private sector banks and trust
, companies for similar flnancial and trust services.
, Fees will not be chnrged for lifeline fmaneial services except nt an nffordnble cost
· Aflqrdability will be taken into account in the entire fee structure. Small account holders or Tribes unable to
afford a full fee would not be charged at all or would be charged a fee commensurate with their abililY
and ca.pacity to pay
· Those Tribes that choose to continue to receive the level of services they now get from OTFM (Le.,
invC$rment in government insured instruments) will not be, charged a fee tora period of five years. after
which the general fee schedule will apply,
· Tribes could convert their trus't funds into an agency account, wherein the Tribe makes investment decisions
and the Bank simply carries them out All Tribes taking this option would be charged a fee except those
unable to afford the fee under tbe principles described above.
, The Bank"s lending and leasing activities ~nd investments in American Indian enterprises·will be based on
prudential principles. Appropriate fees willlherefore be charged for all such activities,
�TDBANK"S RELATION
to
Tn general, TDBank is not intended compete \vith private sector financial institutions which are wilEng and
able to supply comparable fmandal services at a reasonable cost to American Indians, Indian Tribes and their
communities.'TDBank is intended to augment, supplement or provide, directly and indirectly, financial serltices in
circumstances where su\:h is not the case.
TDBank"s expertise and experience in lending and investing in American Indian enterprises should attract more
private sector lending and investing. TDBank will develop programs:
. To act as a upstream or downstream correspondent bank for private sector bank"s wishing to purchase
loans from TDBank, scilioans to TDBank or co~Jend or co~invest with TDBank
.
, To contract with or out source.certain financial services to private banks which may be able to provide
lifeline banking services to American Indian beneticiaries at less cost than TDBank. TDB'ank would pay
the full cost or partial cost of such services, which would be provided at no cost or at a low cost to '
'
Amerkan Indian beneficiaries"
. To be a banker"s bank to Indian owned banks.
TD BANK PROFROMA BALA:O<CE SHEET
BANKING OPERATIONS
($MiIlions)
'LIABILITIES
ASSETS
Cash, Securities and
Liquid Assets
$ 500.00 Demand Deposits
$
$
$
Savings & CDS
Official Checks
$ 4,500,00
Loans:..
Commercial
Consumer
Real Estate
Infrastructure
Fractionated Realty
$3,000.00
$ 300.00 Long term Oebt:
Holdings:
Loans to
Facilitate
Note to
U.S.
Treasury
�30 yrs.:
30 yr. T
Rate
Investment
Holdings
Development
Investments:
$ 125.00 Other Debt:
$
Limited
to 10 x
Equity
Capital
including
long
term
debt.
Infrastructure
Acquisition &
Development
Project
Financing
2,000
Venture
Capital to
New
Businesses
Capital for
Extabllshed
Businesses
$ 75.00 Equity Capital
Other
Total Assets
.
$ 50QQO
Total liabilities
$ 5,500.00 and Capital
$5,500,00
• All deposits and liabililies
guaranteed by the United
States
TO BANK S!JMMARY OF FINA!IICIAL SERVICES
LOANS AND lEASES:
Commercial:
Corporate
Small Business Agriculture
Consumer:
Credit Card
Home Equity
Mobile Home
Personal
Auto
�Real Estate: Single Family
Multiple Family Commercia!
Acquisition
Development
Infrastructure: Acquisition
Development
Purchases
Investment,S
.
Construction
Project
Financing
FRACTIONATED
REALTY HOLDINGS;
Sales
Loans to
Facilitate:
Individual &
Tribal
DEVELOPMENT
INVESTMENTS:
Project
Financing
Venture
Capital
New
Businesses
Capital to
Existi!19
Businesses
Infrastructure
Acquisition &
Development
DEPOSITORY
SERVICES:
Demand
Deposits
Savings
Deposits
Other Deposits
Certificates of
Deposit
ATMAccess
Cash
Management
Accounting
Statements &
Reporting
Payments
Disbursements
Wire Transfer
Money Orders
Overdraft
Discount
Mutual Funds
Protection
Brokerage
OTHER SERVICES:
Official
·Checks
& Insurance
Sales
�U,S, DEPART:\lEIH OFTHE INTEIOR BUREAU OF INDIAN AFFAIRS
TRIBAL, INDIVIDUAL INDIAN MONIES AND OTHER SPECIAL APPROPRIATION FUNDS
MANAGED BY THE OFFICE OF TRUST FUNDS MANAGEMENT
SUPPlEMENTARY COMBINING STATEMENT Of ASSETS AND TRUSTS FUND BAlANCES
SEPTEMBER 30. 1995
Individual
Other Special
Tribal
Indian
Appropriation
Combined
Trust
Monies
Funds
Total
ASSETS
Non-Entity
assets:
Intra
governmental
assets:
Fund
balances
.with
Treasury:
"
-
Cash
Investments
Overnight
investment
Government
backed
securities
Accrued
interest
receivable
$ 6.054.917.00
$ 169,860,842,00
$ 3,929,010,00'
$ 130,437.00
$10,114,364.00
$ 3.906.061.00 S 20;794,067.00 $194,561,000.00
$1,464,284,398.00$363,873,825.00 $262,201.350.00 $2,090,359,573.00
S 18,098,231,00
$ 4,341,646.00
$ 3,816.339.00
$ 26.256,216.00
�Governmental
assets:
Investments
Certificates
of deposit
Equity
securities
Mortgage
backed
$ 35.237.962.00
S 5.892.00 $ 27,803.390.00
$ 63.047,244,00
s·
$ 35,740,200,00
$ 15,740,200,00 $ 20,000,000,00
$ 139,984,032,00 $106,473.975.00
$. $ 246,458,007,00
securities
Accrued
interest
$ 2,606,475.00
$ 859,412.00
$ 1,251,129.00
$ 4,717.016,00
$ 97,500.00
$ 100,000,00
$.
$ 197.500,00
receivable
Accrued
dividends
receivable
Total
Assets
$1,851,964,587.00$503,489,821.00 $315,996,712.00 $2,671,451,120.00
�Stra:egic Plan Addendum One
P,gelofl5
ADDENDUM ONE: CONDITION OF THE U.s. GOVERNMENT'S TRUST
MANAGEMENT SYSTEMS
·-SPECIAL TRUSTEE'S ASSESSMENT
Special Trustee's Condition Assessment
After a year long review of the U,S. Govemmcrtt's trust management systems, the Special Trustee hus
concluded that the undeniably poor quality of the trust management systems and the condition of the
historical records effectively preclude the Federal Government from providing an accurate and timely
accounting to American Indian trust beneficiaries and prevents the trustee frGm discharging its
fiduciary duty to the beneficiaries in u legally acceptable manner. ThiS can be demonstrated
quantitatively:
I. The Reconciliation Project"in January 1996 disclosed $2.4 billion (32,319 transactions) for ~\'hich
source documentation could nOt be located, The point here is that these records should not be missing
:ind would not be: missing had the Federal Government fol!owed conventional truSt record keeping
practices. Of particular concern is about $575 million in unreconciled disbursements. Another concern
is some $4.1 billion of "reconciled" disbursements which did not have complete disbursement voucher
packages. Notably over $2 billion in large disbursement vouchers to Tribes in care of third parties did
not have both tribal and other governmental signed authorization.
2. The Reconciliation Project also confirmed what the GAO calis the lack of a known universe of
transactions and teases, This sterns from the Federal Government '$ tack of an ability accurately to
trace a collection to a source lease or contract, Tbis, in turn, results from the lack of a consolidated
accounts receivable (billing) system and master lease SyStem.
,3, At the end of 1994 there waS about a two year backlog in bringing key land ownership and records
up to date. It was estimated to take 104 slaff years to eliminate the backwlogj but rather than address
,he backlog ,he BIA reduced its Re,l,y ..affby 29% (126 ..,!fto 90 ..all) during 1995 and 1996.
continuing the backlog" Because of staff and budget cuts in the last two years, the probate backlog is
up to four years in certain areas,
4" There are 45,624 11M accounts with $27.7 million for individuals with no address or an incorrcct
address.
5, There are 27,519 IIM accounts with $21,7 million held for individuals who were fonnerly minors.
The wst majority of these monies should have been disbursed when the age of majority was reached,
6. There are $422 million in Overdraft Interest Clearing Accounts resulting from interest mis~poslings
prior to 1993. Thesc are non-earning assets which annually deprive current IIM aCcount holders of
over $2 million.
7. There are gencralledger differences of over $28 million which should be cleared.
8, Continued maintenance ofover 153,000 accounts (55% of total accounts) with .balances less than
$10 is required at a significant operating cost.
>
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9. There are 128,393 missing social security numbers fOf account holders with over S i 75 million in
their accounts,
10. Even with knowledge of the records management, stOrage and retrieval problems disclosed by the
Reconciliation Proje!;t, the U.S. Government has taken no meaningful steps to improve records
management, slOrage and retrie\ral. Worse, disaster recovery programs which backed up trust records
processing Weft canceled in 1996, apparently due to lack of funding.
These conditions are unacceptable by any reasonable standards and continue to do significant harm
and "damage to American Indian trust beneficiaries. They are caused by inherent defects in the core
trust management systems the government uses to manage the Indian lands and monies, These
defective systems prevent the government from meeting the fiduciary, accounting and reporting
standards required by" the American Indian Trust Fund Management Reform Act of 1994 and
standards of ordinary prudence applicable to all trustees, public or private .
.
The Special Trustee's Conceptual Strategic Plan addresses these issues and identifies several initiatives
designed to reenfy the problems and bring trust accounting and management systems up to
commercia! standards within three years. What is needed first is a complete overhaul of the four basic
trust management systems. We must acquire a new;
l. trust asset and accounting management system.
2, accounts receivable data and billing system that uses lease~contract and land and ownership
information.
3, trust, depository, payments and delivery system for 11M accounts,
4. land records and title recordation and certification system.
5. legislated solution to the problems caused by the fractionation of American Indian allo
Along wilh the overhaul of these core systems must come improvements to the general ledger system,
record keeping and archiving, risk management, the technology center, disaster recovery and back ~up
assurance and organizational structure. Probate and appraisal backlogs must be eliminated and all trust
records must be cleaned up prior to conversion. Finally, a significant investment must be made in the
acquisi,tion, retention and training ofhfghly qualified trust management personnel.
In summary, the problems in the trust management systems are longstandmg ones, Mismanagement
and neglect have allowed the trust management systems, record keeping systems and risk management
systems to deteriorate over a twenty to thirty year period and become obsolete and ineffective. For
many of those years, including many years since 1990, the trust programs were seriously understaffed
and under funded. The result \\'as lhat the govenunent increasingly was unable to keep pace with the
rapid changes· and improvements in technology. trust systems and prudential best practices taking
place in the private sector" trust industry. This gap continues today and will continue to increase until
the refoITns outlined in the strategiC plan are funded and implemented, That is why they should be
funded and implemented, inunediately, regardless· of if and when the Comprehensive Strategic Plan
called for in the Reform Act of 1994 is approved. Each day the truSt management systems remain
status quo, the Federal Government's exposure to claims of mismanagement and liability will continue
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to grow and is another day the Federal Government cannot meet its trust res-PQfL'tibilitlcs to the
American Indians.
Specific
Probl~ms
In Need of Reform
The fundamental problem is lhat the U.S. Government, using present systems, was) "is and will
continue to be unable to furnish beneficial)' American Indian Tribes and individual Indians with an
uccurate and full accounting of trust funds. The difficulty lies with tbe historical and current:
I. lack of an effective trust asset, leasing and resource system which can be audited to detennine
that trust assets are being managed prudently and consistently in the best interest of the
'beneficiaries. The system is deprived of standardized and integrated asset management, credit
and operating policies, procedures and pra<:tices. The system should be able to tie to and track
from land and ownership records nut such is not always the case,
2.
ta~k of master lease system and a consolidated accounts receivable (billing) system whkh
precludes appropriate documentation of lease management terms and conditions and an audit
and comparison ofgeneral ledger entries to the amounts due under the lease contracts. The
system in use does not accurately use Jeasewcontract and ownership information for trust income
verification, recondliation, billing, payments, collection, accounting, disbursement, audit, asset
quality review and compliance purposes.
3, lack of an effective liM accounting system for collections, deposits and disbursements which
leads to uncertainty over whether the righl beneficiary was: credited with the co~t amount:
The system in use is incapable ofaccurate and timely accounting and reporting and is not
compatible with more efficient private sector systems capable of providing such financial
services and new and improved financial services to American Indians a.Ii well.
4, lu\::k of an effective land records and ownership system which prevents timely credit of income
to the appropriate individual Indian or tribal account and precludes audits to determine whether
the trust assets are fully utilized and receiving the highest rate of return consistent with trust and
prudential standards, The current system is not accurate and system break~downs seem to be
more the rule, rather than the exception .
.. 57 lack of an adequate archives and record keeping system which has resulted in a massive loss of
tease and contract records and the consequent inability to do acceptable audits and
reconcilements. The technology services center is not a dedicated unit to trust management
activities. Appropriat,e disaster/recovery and back-up assurance is lacking.
6. Jack of an effective fisk manaiement system which prevents prudential audits compliance
reviews and quality ratings and appraisals.
j
7, lack of an organizational structure organized by function and dedicated exclUSively to trust
management.
8., lack ofa pennancnt solution to the fractionation of American Indian allotment 0\\fnership.
At the core of many of the accounting and reconciliation problems is the lack of source documentation
to support the general ledger entries. Tbere is not a complete way to estimate the number ofmissing
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documents, leases and contracts, but the BASIC RECONCILIATION effort disclosed the types of
problems which prevent a full accounting:
1, There were 32,319 unreconciled transactions which totaled S2.4 billion and which represented
cash receipts, disbursement and internal transfer transactions posted to tribal aCCOL<nts for which
2, Some oflices of the Bureau of Indian Affairs have in the past sent trust und land leases and
records to a federal records center where they are retained under federal records retention rules
rather than under trust rules. The result was that many records were destroyed which should not
have been destroyed, Some offices of the BfA followed federal retention rules fot trust {eases
and contracts, which normally required retention of less than ten years after the teases or
contracts expire, Thus, some records were destroyed which should not have been destroyed,
3. Spme documents are missing fot other reasons, For example, in one sampling, len years of
, timber contracts were found to have been destroyed. Generally. the "Fill the Gap" part of the
Reconciliation Effort was significantly curtailed because large numbers of leases and contracts
could no: be located.
4. There is :1ot a complete system of redundant record keeping, Thus, no effective back-up exists if
a record is destroyed or cannot be located for some other reason,
There are numerous problems and issues conceming JIM accounting which have been researched,
reported on, and discussed in several internal and external reports, Some of these accounting and
systems problems for the 387,631 lIM a-ccounts with balances of approximately $450 million have
resulted in 'the following:
-.
1, 12 different non-integrated databases to manage, File structures are obsolete. Data records are
outdated and/or inaccurate, Automated systems applications and routines arc not consistent and
various versions ofsimilar application~ are used,
-
2. 16.828 duplicate accounts, These accounts should be researched and closed under an
appropriate set of policies and procedures,
3. 45,624 accounts with $27.7 million for individuals with no address or an incorrect address.
Policies and procedures must be established on the steps to follow to locate missing persons and
what lO do if a persoll cannot be located. These accounts should be researched and placed in
dormant status under appropriate policies arid procedures if owners cannot be located within a
reasonable pl!riod of time.
4. The Office ofTrust Funds: Management is responsible for accounting for monics held in trust for
a minor judgment recipient until he/she reaches 18. There are 58,788 such accounts with
$143,617,096 in aggregate balances. But 27.519 accounts and $21,735,681 are for individuals
over t8 and one of the over 18 accounts contains $490,12}, These accounts should be
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researched and resolved under an appropriate set of policies and procedures.
5, Special Deposit Accounts aggregating 5141,723,524 in 28,202 accounts are supposed to be a
temporary repository for money until the ownership oftbe tlmds can be determined, Yet there
are 6, 119 accounts with $2,273,074 which have had no activity the last 18 months. These
accounts sbould be researched and resolved as well under approprIate policies and procedures.
in
6, The database contains 21,572 accounts with $37 ,54J.l63 for deceased individuals. There arc
2,242 oflhese aCCQunts which are <;:oded as being dosed estates. However, because of the
probate bocklog, t~ere are $787.625 which have not been distributed to heirs. This problem
should be addressed by, bringing the backlog current.
7. There arc 270 accounts tor individuals in the database which have overdrafts in the amount of
$314,042. No overdrafts are authorized. Overdraft prohibitions should be enforced.
8. As of September 30, 1996:
I, 14,476 11M Accounts had a balance of SO with no activity for 13 mor,tths and not coded
fOJ'deletlon,
2, 14,906 IIM accounts had a balance between $0 5lnd S I with no activity for 13 months.
3. 28.114 11M aceounts had no activity for 18 months and not coded for deletion.
4. 128,393 11M accounts had no Social Security Number or Taxpayer 10.
These accounts are expensive to administer nnd maintain, Policy and legal chang~ arc required
to eliminate them, escheat them or otherwise reduce them to levels that can be administered
more efficiently and effectively.
9. Ownership of the land and its associated assets is critical to trust asset management and
resulting trust income processes. The BIA systems and processes are currently not capable of
estabhshing up~to~date and accurate land thle records that are necessary for the lease
management processes. In addition, significant backlogs in updating systems for [and records
revisions, additions and deletions exist. The time Jags associated with probate (two~three year
average) exacerbate the problem as well. Even [{the records were up~to-date, the Bureau's
current Land Records Information System (LRlS) does not interface with its Lease
Managcuwnt systems. Databases are separate even though they are inter-dependent and they
contain redundant and conflicting lnfrmnation, There are also many instances reported thnt
LRlS was often not available tor trust usset management (e,g., leasing), due to hardware or
communications problems.
10, Record tetention and millg procedures at certain locations throughout the Bureau and for
certain periods are not sufficient to document certain activities and.account balances.
II. There is no~ an effective accounts receivable system in place to assure that all income due is
collected and to assess late fees and interest when due, Field collections are not adequately
controlled or deposited timely. Unwarranted delays exist between the receipt ~f money at
Minerals Management Service and tinal distribution to the owners.
12, Poor internal controls and inconsistent policies and practices exist. The various audit reports
that havt; been conducted on lIM related systems and activities have identified many cases of
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inconsistent application of policies and procedures, Inconsistency prevents the accumululion and
analysis of information within the BIA, making it difticult for the BfA to provide oversight and
manugement. make management decisions, demo!1strate accountability and develop confidence
nod crcdibility in the trust asset and trust funds management processes, Poor internal controls
and inconsistent practices account for over 50014 (if the thirty consolidated problems identified in
the HM Related System Improvement Project Report of AuglL'it 1995. Acco~ding to that
Report. this category of problems "pervades every function reviewed". Moreover the Report
notes: "The Burenu has developed procedures and policies for a number of the problems and
often, guidelines are in place. However, they are either unknown to the staff performing the
function, not being followed, or not comprehensive enough to provide the requisite guidance."
13. Many of the BlA's leasing and other resource management actions result in an-amount due from
the lessee in payment of the benefit received from the leased resource, e.g., grazing fees.
Unfortunately: tbe BIA's systems and processes do not create or record an amount due and they
do not create arid account for bills or notices. Except for revenues from minerals ieases, the
collection and fQllow·up on this trust asset income rests with the individual realty staff in tbe
. field, In some cases, BlA staff have developed p,c, software to perform leasing functions and as·
a by~product are able to issue bills for amounts due, Others have manual hard copy records that
prompt action, but neither of these is generally practiced throughout the Bureau, The result is
that it is possible that amounts due are not estabEshed,'amounts due may be uncollected. or
actions against lessees that may be necessary may not be taken. Further, with little opportunity
to separate duties at the agency level, adequate internal control over the entire praceis becomes
extremely diffieult and costly and is ofte~ not possible"
14. The cash account at :he U.S. Treasury is not verifiable due in part to inadequate Bureau
procedun!s and also because the U.S. Treasury is not able to provide the Bureau with ::lccuratc
infonnation regarding cumulative balances.
15, The BIA's organizational alignment causes decision~making and management for lIM and tribal
issues to be an intricate and complex coordination process and an ineffective one at times,
Responsib·ilities fall within 16 separnte organizations alt reporting directly to one entity, which
has direct line authority for every other Bureau organization and program, Further, the activities
are carried out by over 100 field offices, The BIA's organizational structure prevents in many
instances informed and expeditious decisions because (}rthe number of entities involved and the
number and complexity of the decisions their activities generate. The structure also results at
limes in trust management responsibilities ofa higher order not receiving the attention and focus
they deserve and/or being traded off against other Bureau priorities ofa lower order. The BIA
offices. must expend significant resources to coordinate with managers. supervisors and staff
across the Bureau to obtain cooperation, Coordination and cooperation often breaks down,
Because the BlA is not organized and managed by function, all too often policies and
procedures written for specific frust programs or fum:tions are not universally fonowed because
the statrlhat:perform the activities take their direction from general managers in area or field
offices, nOt the trust program offices.
Impact of Fractionated Ownership of Indian Lunds on Trust Management Systems
.
.
Another fundamemal problem is fractionation of American Indian Allotment intere~;ts. The vast
majority of accounting, basic record keeping and other operating problems affecting trust resource
management, trust funds management and trust land records and ownership management originate
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from onc source: the ever increasing fr(lctionRtl<m of undivided really interests owned by Indivlduul
American Indian AlJottees,
.
Fractionation is a direct result of the Federal Government's policies and laws relating to lands owned
by the American Indians dating back to 1887.
As \)riginally envisioned, allotments were to be held in trust by the United States for their radian
owners no more than 25 years, after which the kmd would be conveyed in fee simple to its Indian
owners. Many alJottees died without wills during the 2S year trust period, and it also became evidem
that many aUottees continued to need Federal protection, Consequently, Congress enacted lip-lired
probate Jaws and authorized the President to extend the trust period for those individuals who were
not competent to :rumage their lands. The presumption was, however, that at some point in (he
:orcscenblc future the lands would be conveyed to their Indian owners free of Federnl restrictions.
Nevertheless, Congress continued to extend the period oftmst protection but did not amend the
probute laws. Under the lndian probate laws, as individuals dicd. their property descended to their
heirs as undivided fractional interests in tbe allotment As the years passed, fractionation has expanded
geometrically 10 the point where there are hundreds of thousands of tiny fractional interests. These
fractional interests have nominal economic value but pose an enormous cost burden estimated to be
about S33 million per year on the Federal Government's trust management activities.
Congress attempted to address the fractionation problem with the passage of the Indian Land
Consolidation Act (ILeA) in 1984. The ILeA authorized the buying, selling and trading of fractional
interests. but most importantly it provided for the escheat to Tribes of interests of less than two
percent 55,000 of the two percent~or~less fractional interests have escheated since 1984, but the
fractionation problem continues to worsen, Moreover, the Youpee VS, Babbitt 1997 Supreme Court
Decision brings into question the legality ufthe escheated property since 1994, further complicating un
ulready bad situation. Maintaining the heil'Ship and land records and administering the land is
inordinately expensive, and the administration of the recQrds pertaining to the moneys earned by each
indivitlual allottee is equa.lly expensive and difficult. In addition. utilization and conveyance of the
fractionated pwperty by the numerous owners is difficult because of the need to secure the numerous
, consents required. Finally, the difficulty in deaiing with the fractionated interests often effeciively
precludes the highest and best use of the land for economic development and the maximization of
investment income! thus diminislring its economic value,
The--fractionated ownership offndian !ands is taxing the ability of the govenunem to administer and
maintain records on Indian lands. These "allotted" or individually-owned trust lands comprise
approximately II million acres and, in size, exceed that of the States of Massachusetts. Conn~ticut
and Rhode Island, put together, Fractionated heirship also _hreatens the integrity and viability of the
Department's trust management systems. The problem cannot be addr.essed by the Tribes; it cannot be
fully addressed by the Department of the Interior; it requires u federallegislutive solution.
The Department of the Interior is charged by statute with maintaining Federal Indian land records on
these hundreds of thousands of fractional interests and with probating the estates of every Indian
individual who owns a fractionallnterest in an allotment [n many cases, the fractions are so srnoll that
the cost of Oldministering the fractional interests rOlr exceeds both their value plus any income derived
therefrom.
Currently, calculation c:f fractionated lease ownerships rnay result in a fractional denomUiator that
exceeds 26 digits. Depending upon the amount of lease income to be distributed, it is possible that
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trust income rrUly have to be collected
an account holder to even one cent.
Page 3 of i5
tor
severa! years before sufficient income is collecte"d to entitle
Sonte administrative complications tbat result from fractionated ownerships include the following:
• Detailed accounting records must be maintained tor all transactions regardless OfSIl.e,
.
sometimes as little as $0.03 may be distributed among seven account holders, complicating the
accounting.
• In most cases, OTFM policy does not pennit funds to be disbursed to the account holders until
balances reacb 5J 5. thus inereasing the number of lIM accounts that require interest posting and
other account main!enance activities.
• Funds sometimes remain in special deposit (suspense) accounts for long periods, according to
OTFM. pending OTFM's receipt of ownership)nfomllltiorl front OTR's Land Title and Records
program and reaity statTs.
Currently, OTR maintains official federaI'rndian :and title and beneficial (lease) ownership infonnatioo.
OTR's Land Tirle and Records program staff are responsibte for determining ownership and
encumbrance fClf each federal Indian trad of land and for certifying for the Federal Government that
such ownerShip and encumbrance is a{:curate for aU legal, title, and evidentiary purposes. However,
due to continuing increases in fractionation, inadequate staffing, and inadequate systems, OTR has
almost a 2~year (4 years in some areas),backlog in land title and lease ownership detenninations and
record keeping.
.
Each time ownership changes, OTR's Land Title and Records program staff must perform time
. consuming manua1.determination and documentation of ownership interests" This is because OTR's
LRIS, as designep, is not capable of performing automated chain-of~titte calculations and if does not
store chain-of-title or calculated ownership information. LRIS system improvements have been
delayed for the past two years due to reductions-in-force and budget cuts. In addition, LRlS i~ not
integrated with OTFM's trust fund accounting systems.
Because official ownership information may be significantly out-of-date, OTFM bas relied on
unofficial ownership data tn BlA's Integrated Resources Management S}~tem (lRMS). l~fIv1.S
ownership infonnation IS periodically updated by OTR realty staff located in BlA's Agency Offices
based on prelintinary information.that they have developed for use in probate detenninations.
However. unlike LRlS information, it is not verified or certified. As a result, OTFM cannot ensure
that income is distributed to the proper account holder,
Inactive HM accounts, which are' defined as aCCO;Jots with no transactions for 18 months, also increase
the administrative burden for HM accounts. Accounts may become ina.ctive beca.use they are in
suspense status or because probate decisions are pending, As of
September 30, 1996, OTFM reported that there were approximately 60,823 inactive [1M accounts.
According to information provided by OTFM, these are generally low balance accounts.
Administrative costs associated with inactive accounts include:
• the cost of ;;omputer processing time;
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• the administrative cost and responsibility 0 r safeguarding the accounts; llnd
• the cost of preparing, printing. and mailing quarterly account statements.
Legislation is therefore needed which would consolidate the large number of existing fractionated
interests and prevent iurther fractionation. This alone would remove a primary obstacle to the efficient
admin:stration of the truSi management systems ~nd provide a major catalyst for the timely resolution
of most of the operaTional problems associated with trust management activities, including trust
resource and realty management, probate, land titles and ownership records management, liM
a~counting, collections. deposits, investments and disbursements, customer service and record keeping
tor 011 trust management activities. An added benefit is the annual administrative cost savings
estimated at the same S33 million mentioned above.
Confirming Views of Outside Public Accountants as to Trust Management Problems
The May 17, 1996, Report ofIndependent Public Accounts on Financial Statements for the Office of
Trust Funds Management had the following observations On Trust Management activities, all of which·
precluded an ullqualified'Rudit opinion:
<
I. Casb and, overnight" investments are maintained by a related U.s. Governmental Agency (U,S.
Treasury) and cannot be independently co~firmed.
2. Cash balances reflected in the accompanying financial statement are rnaterially greater than
balances reported by the U,S, Treasury.
3. Major inadequacies in the Trust Fund acCOunting system, -controls and records caused them to
be unreliable,
4, Various Tribal organizations and classes of Individual Indians for whom the OTFM holds assets
in trust do not agree with certain OTFM accountings arnUalam:es recorded by the OTFM~ and
certain of these parties have filed, Or' ate expected to file, claims against the Federal
Government. This may result in a potential liability to the Federal Government so large that it is
not reasonably estimable,
Because of these matters, it was not practicable for' the outside public accountant to extend its
auditing procedures to enable them to express an opinion regarding the basis on which c;;:sh nnd
trust fL.nd balances are stated, The public accountant went on to observe:
5. In some instances, the OTFM has researched and corrected the balances held in trust for' specific
Indian Trib'e, individuals, and Other Special Appropriation funds. Many individual Tribal and
liM accounts still need to be reconciled and/or resolved through negotiation and settlement
before reliance can be placed on the balances reflected in the trust fund accounts.
6. A portion of the Beneficiaries for whom the Bureau holds assets in trust do not receive
adequate information to determine whether their account balances retlected in'the Bureau's
records 'are proper. A significant number ofIIN accounts and balances are held for the benefit
of minors and other individuals who have been determined by the Bureau to require assistance
in managing their trust account activities and balances, It is the practice vfrhe Bureau to not
forward financial data to minors and ocher JIM account holders with supervised accounts.
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Agency Superintendents ty-pic,aUy act us custodians for these supervised accoums. In addition,
some 11M account holders have not furnished the Bareau their addresses which would allow the
Bureau to forward their account statementS. Accordingly, certain account holders do not, Dr urc
unable to, agree with the balances reflected in their accounts.
7. llM account holders who have been determined by the Bureau to require assistance in managing
their financial affairs have had instances ofpayrnents made from their accounts that have not
been adequately reviewed and approved in accordance with applicable regulations, At many
Bureau locations procedures ure inadequate to ensure that such expenditures are made :0
accordance with applicable regulations.
R Cash balances converted from the priQr general ledger to Omni were approximately $27 million
higher than the balance per the U$. Treasury. Cash reconcilialion procedures only recondli:
current activity from Oumi to Treasury and do not address the unreconciled beginning balance.
The composition of:he difference is not known and no reliance has been obtained that either the
OTFM balance or the Treasury balance is accurate. This results in nn unconfinned ant!
unrcconcifed cash balance on OTFM's books.
9. The OMNI ,trust and investment system does not amortize premiums nor accrete discounts on
investment purt.::hases using the effective interest method as required by OMB 94-01, "Olher
Comprehensive Basis of Accounting." The l1mortization and accretion calculations "must be
computed separately and recorded as an adjustment at year end. This results in interim tinanci~1
rcporting wbich does not reflect the investment portfolios true yield.
lO. The Budget Clearing Account with Treasury has a balance of about $11.7 million, of which only
about $168,000 is reflected on OMNL This is a shared account with the Division of Accounting
Management and it cannot be determined at this time to whom the balances belong,
II. There is a ditference between the general ledger summary account of lIM on OMNI and the
total of the balances per the 11M subsidiary ledger detail. The difference was approximately $30
million at September 30. 1995. with the general ledger carrying the higher balance. There are
also negative cash balances on the UM subsidiary system aggregating approximately $46
mill!on. The effect ofIhe above items is to further substantiate the unreliability of the trust fund
balances as reflected by OTFM.
.
12. A review of questionnaire responses from the Area and Agency Offices indicated that there is no
consisiclICY in the application of accounting processes a.nd procedures, There were also
inconSistencies reported in duties perfonned by certain key personnel at the Agency Offices. as
well as inadequate segregation of duties. During the period under audit, staff in the. Area and
Agency Offices were supervised by the Bureau and did not report to the OTFM.
Il he accounting and internal control procedures used by the OTFM have suffered from a variety
T
of system and procedural internal control weaknesses, and other problems, such m; under staffed
accounting"operations at all levels, a lack of experienced a.ccoun!ing supervisors, a lack of
minimum standards for key positions in the accounting process, inadequate training programs
and inherent limitations in exis.ting computerized accounting systems. In addition, current
management is burdened wito the ongoing impact ofdecades of accumulated errors in the
accounting records. These factors place significant limitations on management's ability to
effectively manage the trust funds entrusted to the OTFM,
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14. The Bureau does not have an accounts receivable system in place. Currently. tbe Bureau has no
assurance that all lease revenues are billt:d and subsequently collected. Such a system will
provide reasonable assurance that earned revenues are billed, collected and posted to the
appropriate beneficiary's account.
Tribal/Federal 11M \Vork Group: Confirmation of Problems and Priority of Issues to be
Addressed
Over the course of several months during 1996 II combined TribaliFederal Work Group, consisting of
19 tribal attendees and 12 Bureau of Indian Affairs' attendees, met to address 11M truSt mrm.ageme~t
problems and to prioritize categories for resolution, The Group met initially in New Mexico and
concluded its work in January 1997 after regional hearings for IIM account holders were held in
Tulsa, Phoenix, Portland, Oklahoma City, Bismarck and Albuquerque. After these consultation
sessions, the top 5 priority categories were as foltows: '
TribaVFcderalliM Work Group
Priority Categories
January 8, 1997
ecords Manageme
,
ustomer
, Records Management
Serviceffraining
IRecords Management IIPolicies & Procedures ;lPolicies & Procedures
Policies & Procedure
The work of the TribaLlFederal Work Group is another confirmation of the most serious problems nnd
issues affecting trust management activities. The conclusions also demonstrate that any resolution of
tlte,uust management problems must start by addressing the realty issues, particularly fractionated
ownership problems, accounting problems and records management. After that policies and
procedures can be revised and extensive training conducted, ultimately to assure the customer service
the American indian trust beneficiaries deserve and to ensure the US, Government is meeting its trust
oh!igations to [he American Indians.
Confirming Views of Macro International Inc.
Macro International Inc. Executive Summary
The OST Needs AnalysiS project was conducted by Macro lntemationallnc. (prime contractor) and
its subcontractors, Larson Slade Associates, LLC., and Arrowhead Technologies, Inc. from December
19,1996 to April 7, 1997,
The primary purpOse of the project was to provide the Office of the Special Trustee with an analysis
of the various components of the American Indian Trust system (Le., trust accounting, asset
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�Strategic Phn Addendum One
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management and land title and recordation) bused on the perspective of the end users in the field (OST
employees, BIA employees, Tribes, and others), In addition, the project included specific reporting on
the gaps that exis.t bctwc~n the current Indian Trust system and trust dcpartments in the commercial
sector: the features needed in a new system which meets commercIal standards; the training needs and
requirements ofstatT; the key busIness events used ~n day~to-day trust busitle;:;.s; an inventory of the
equipment ceeds of end users; and, a recommendation on whether existing Govcnunent capabilities
lirc adequate to satisfy the needs and requirements of a new trust system.
The projeet was modified three times to add filrther reporting elements to its scope, including: a
validation of th{; Conceptual Strategic Plan including cost estimates; an increased analysis of oil and
gas assets management; a review of commercially available land title and recordation appllcations and
service b~reau support; revisions ofthe Strategic Plan budget; and the development ofroJes and
rcsponsibilitil'S of a systems integration nnd overseer for the integratio'!. implementation and su;:;tailicd
management of a new trust management system"
The primary means by which the Macro project team gathered such infomiation was through site visits
to 50 Tribal locations, 35 BIA agency offices, 8 BIA area offices, one BIA field office and the OTFM
headquarters office in Albuquerque, NM, Approximately 350 confidentiallnterviews were conducted;
however, since SQme of these were recorded as "joint interviews" (two or more peopte participating in
a single interview on a specifi<: subject or function), only 330 official respon&es were recorded. These
responses were entered into a database ~f1d compiled into analysis segments with all personal or
location idenlifu:ation removed, Additional data was gathered from lnttrvicws with OST officials and
,staff, servic'e bureau providers, project resource firms (Riggs Bank;NutionsBank. State Street Bank
and Trust), Tribal representatives, and others.
Data analysis consisted of a systematic review of the database responses and a revlew of iniormation
gathered from additional resources, repons, and interviews.
Key Findings ulJd Recommendations
Based on the field interviews and the project team's. review and analysis oftrust~related data, four
major findings were id.entified and reconunendations developed. They include:
-
Fiduciary Responsibility
-
The trust fiduciary responsibillty to manage trust assets and accurately repon 011 their status to
beneficiaries is. not being met The existing trust system does not aCCQunt for each and every asset
under its responsibility and there is no method for gauging the accuracy of information depicting the
assets for which they-do account. The trust system is unable to provid,e the individual Indian account
holder with a statement of assets and transactions for nonfinancial assets. A major deficiency in the
existing system is the lack of accounting and control of the mpst important trust asset to the
bcneficiary~·the land. In addition, responsibility for the management of trust accounting, llsset
management and land records rests with two different organizations, tbe Office of the Special Trustee
and the Bureau of Indian Affairs, Without syStems capabtlity or, control oflhe most essential trust
asset (land), and without singlewpoint management responsibility, the current trust system cannot be
considered operating at a commercial standard.
Recommendations
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A single trust organization witb management control over botb resource and financial assets utilizing
standard commercial applications programs to process data for trust osset and financialllccounting, fbI'
kmd title and recordation, and for canying out fiduciary responsibilitlcs anti reporting to American
Indian Tmst account holders.
New and updated policies, pracHces and procedures for implementation and operation oflbe new
information technologies infrastructure, .
Acquisition ofa dia.l·up communications (WAN/LAN) network to lirlk trust locations (regional, field,
Tribes, MMS, and BLM) with the smgle trust organization,
Acquisition and upgrade of workstations with required hardware and software to enable all trust
system stair and the 300 Tribal sites dirert access to account information through the dial~up network.
Tn.lst Data GIrd bi[onnarioll
Although a new commercial system wdl have the capability nt-process.ing current and historical land
informution, existing data reJating to lund ownership and valuation is not in suitable condition or is
nonexistent. Land appraisals are out of date and, if they exist at all, are perceived by many owners to
be inaccurate. There are major appraisal backlogs in most field locations,
American Indian properties nre fractionated as a result of generation after generation of inheriting
undivided laws. Some, properties are fractionated to the 35th decmml and inco~es are essentially zero
or not accountable.
Tbe filing, storage and retrieval process of hard copy documents is inefficient. There is un
overabundance of documents (which are vulnerable to disaster) and alack of facilities and trained
personnelJo safeguard and preserve them,
Recommendations
A reconciliation of historical land titles and the appraisal of Indian lands must be completed before any
n~w_ system can provide accurate information to account holders regarding this critical trust asset.
Enact legislation to resolve fractionated ownership.
ESlablish a national archives to image, store and retrieve official and historical documents.
, Acquire andJor upgrade hardware and software equipment to enable field offices to im'age, stOre and
retrieve documents,
Update and complete file jackets, records, and accounts to provide the new cotnmercial iru~t system
with accurate information for processmg,
Organizational Stafj~ng, Training & Development
A new commcrciui trust system will have the capacity to process accounting, asset management and
land lliformation~ the reconciliation of land titles and the appraisal of Indian lands.will provide accurate
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land records: a national archives will insure that official documents and historical trust records <lrc
maintained: a communications network will enable user access to trust information; and, hardwure and
software purchases ;:md upgrades wm enable the internal and externa! trust system users to image,
store and retrieve documents. However, aU of these important tasks will not, by themselves, imptovc
the Indian Trust system unless an effective and efficient staff is able to carry out these tasks,
Field imerv[ews indicated that recent reductions in staffbave resulted in current employees being
forced to hand It! tasks for which they have no formal training. On-the-job training is aUnost SQlely
relied upon to prepare emplG}'CCs for their jobs. This has resulted in deficiencies in quality and
timeliness of many work tasks. The concept of fiduciary trust responsibility is not readily apparent o.t
'OST and BIA field offices, although OST starr in Albuquerque are exceptions. White the effort of
most employees is exemplary, many employees have responded to this difficult situation by eitht:r
resigning themselves to never gelting their jobs uone correctly or becoming so acbievement-oriented
that they arc nearing physical and mental exhaustion.
Recommendations
Provide a variety oflrust activities training related to improving job functions. improving customer
service, understanding trust services, dealing with stress, and handling the transition of the current
.
trust system to a new commercial system.
Implement functional improvement training on an on-going basIs.
Conduct training related to the commercial trust transition to coincide with tbe "rollout" of the new
system in the FY 1998-FY 2000 time frame.
.
.~1ake
a cOllunitment to bolster the capability of the field oftices by acquiring more slatY with lrust
banking experience to provide needed technical support to fellow employees..
Establish a "hcll>-desk" system from regional and central offices as adc)itional backup and support to
current field staff.
Administrolive
T'WD major lldminlstraHve issues need to be resolved in order to improve the Indian Trust system.
They are: resolve the prQ,bute
field employees.
backlog~
and, resolve the relationship difficulties between OST and BlA
Probate Process
The probate precess takes much too long to complete due to fractionated land ownership, incomplete
files and records, under staffing, and too few Office of Hearings and Appeals (OHA) and
administrative judges to adjudicate the case load.
Recommendations
Enact legislation to resolve fractionated land ownership.
Increase administrative staff levels to enable probate case infonnation to be compiled in a more ttmely
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�Straiegic Plan Addendum One
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manner,
Increase the number of administrative judges thereby increasing the number of pro batt,: C:,lses that cun
be adjudicated annually,
OSTIBIA RelatIonship
Tbe relationship bet\veen OST and BfA field employees is strained and in need o,fimmediarc
clarification. Agreements between these Organizations are required in such areas as sratT rolcs,
procedures, authority, and reporting relationships. This situation has resulted in employee frustration
:n both Orgnnizations and a concern that preferential [rea[ment is being received by one group or the
other
Recommenrlutit)ns
Establish an agreement between the two Organizations to provide much-needed leadersbip and
guidance to OST und EHA employees across the United States,
Establish a siog!e organi~ation with al! trust activities under one matlageL
See' Appendix Two for the complete report of Macro International Inc.
Summary Comment by Special Trustee
Each of the tru~t management problems identified above and in this Condition Assessment is
considered by the Special Trustee to be a material weakness and in need of reform as required by the
American Indian Trust Fund R..::fonu Act of 1994. Each is addressed generaHy and a reform solution is
proposed in the general proposals contained in the Strategic Plan, The Appendix contains more
specific proposals for each needed refonn. Once the Strategic Plan is approved, a specific action plan'
will be written in the implementation phase to resolve each of the material weaknesses in the trust
. management sY5lems identified in the Strategic Plan.
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3; 16iOO
�ADDE:"<DUM TWO: STRATEGIC PLA"! BUDGET AND TIMETABLE
Urgent !\"eed to Fund
and 1999
an~
StaffStl':ltegic Plan RCforms During Fiscal Years 1998
The principal overall objective of Phase I of the Stra(egic Plan is and will be to address
llnd resolve the root causes of the longstanding trust management problems as quickly as
possible. The Special Trustee has concluded as to the trust management systems
problems:
These conditions arc 'J:lacceptable by noy reasonable standards and continue to do
significant harm and damage to American Indian trust beneficiaries, They are caused hy
inherent defects in the
~ore
trust managemetlt systems the government uses to manage the
Indian lands and monies. These defective systems prevent the government from meeting
the fiduciary. accounting and reponing standards required by the American Indian Trust
Management Reform Act of 1994 and standards of ordinary prudence applicable to aU
trustees, public or private,
'
Mismanagement and neglect have allowed the trust management systems, record keeping
systems and risk management systems to deteriorate over a :wcnty to thirty year period
and become obsolete and ineffective, For many of those years, induding many years
Since 1990, the trust programs were seriously under staffed and under funded. The result
was that the government increasmgly was unable to keep pace with the rapid changes and
improvements in technology, trust systems and prudential best practices takmg place in
the private sector trust industry. This gap continues today and will continue to increase
until the reforms outlined in the Strategic Plan are funded and implemented, That is why
they should be funded and implemented, immediately, regardless of if and when the
Comprehensive Strategic Plan called for in the Reform Act of 1994 is approved. Each
day the trust management systems remain status quo, the Federal Government's exposure
to claims of mismanagement and liability w[1J continue to grow and is another day the
- Federal Government cannot meet its trust responsibitilies to the American Indians,
The prinmry cause of the trust management problems both historically and currently can
be attributed to Ihe trade~offs of financial and managerial resources which take place at
every Ievel of government between trust management activities (trust resource
management. trust funds management and land title and records management) and otber
activities and programs of the Bureu_u of!ndian Affairs. the Department of the Interior,
the Administration and the Congress. History has consistently shown these politically
expedient government trade-oftS of competing tinancial and managerial resources to be
adverse and detriffl.cntal to the effective and proper administration and funding of the
trust management activities,
These trade-offs have been made and nre continuing to be made even in the face of a long
history of court cases which have consistently held the (rust relationship between the
�United States and the American Indians to be a distinctive one. Decisions orthe Supreme
Court reviewing the legality of administrative conduct in managing Indian propcr:y have
held officials of the United States 10 "moral obligations of the highest responsibility and
trust" and "the most exacting fiduciary standards," and be "bound by every mornl and
equitable consideration to discharge its trust with good faith and fairness."
.
-
A trustee is not :md should nm be relieved ofllis duties. responsibilities and
accountability to trust beneficiaries because the trustee lacks the fmanci(ll and managerial
resources to adminis:er the lmslS, To be so relieved for tbis reason is not acceptable tor a
private tn.;s!ee, Yc~, the most frequently cited reason and excuse for the Federal
Government's historkal and continued failure to address and resolve the longstanding
trust management problems is the lack of funding and statTmg for the American Indian
trust management programs, While most certainly the lack of financial and mnnagerial
reSources is the primary causal factor for the Federal Government's failure in this regard,
under no circumstances should it also serve as an acceptable excuSe for the continued
neglect of the Federal Government's trust responsibilities to American Indian trust
beneficiaries, Yet, this is exactly the case for the executive and legISlative branches of the
Federal Government. Lack of financial and managerial resources has beeome the'
standard and institutionally acceptable excuse for the Fcdernl Government's continued
failure to addrcss and resolve the trust management problcms, Because it is by now a well
establi:;hed standard and acceptable excuse, no one and no govemment management unit
has been or is likely to be held accountable for Ihis neglect at any level oflhe Federal
Government. This is a policy of political and self~serving convenience and not one
,worthy 0 f a Federal trustee who has charged itself with moral obligations 0 f the highest
responsibility and trust or one to be judged by the most exacting fiduciary stJndards. In
addition, this policy of political and sdt:'serving convenience not only fncWtatcs and
perpetuates tbe neglect of the American Indian trust management programs but
continuously adds to it. This is because it is convenient, easy and politically desirable to
make even more choices and trade-offs detrimental to the American Indian trust
management activities in favor of other government programs which, are politically more
popular. AU with the knowledge that the most the Ft."tferal Government or individuals
making the choices llnd trade~offs \villsuffer from such behavior is some criticism from.
American Indians and their supporters, No real accountability will be exacted in the near
or medium terms and if it is, it may be by the judicial branch oCtile Federal Government
over tbe long tenn.
The lack of funding for trust management improvement initiatives i~ nowhere better
illustrated than'in the following table one which shows the history since inception in
September 1996 offunding requests by the Office of the Special Trustee for such
initiatives versus the amounts contained in the President's budgets for fiscal years 1996
through 1998.
As table one shows, reform requests have been consistently \lnder~funded< For fiscal
1997, OST requested $47.7 million fortrust management systems improvements, but
only S14.6 million was approved; for fIscnl1998, CST requested S48.7 million, but only
$17,7 million was approved,
�Moreover, given the Administration's long term budget estimates, there is no reason to
believe that the funding levels approved for fISCal years 1997 and 1998 will be
sigtiiiicantly increased on an annual basis. Funding the reforms with installments ofSIS
million [0 520 million per year simply will not work This is because the Strategic Plan
Budget (See enclosed full Strategic Plan Budget) estimates about 561 million will be
nceded ill the first two. years to purchase the trust asset and accounting management
system, the land title and records management system and the information infrastructure
t~cbnology. In the first two years ofimplementDtion, another $49 million vim be needed
for data conversion, reconciliation and backlog dean~up of probates, land title and
records, 11M and Tribal records and appraisals, In the same period $52 million wilt be
needed ti)r imaging, training, policies aed procc~ures ilnd legal manuals, risk
management, archives and records management and external professional services, (n
short, all these expenditures must be made over a year or t\\.'o and the systems purchased
must be kept current through annual maintenance and upgrades lest they become obsolete
nnd ineffective.
.
What is proposed in Phase I of the Strategic Plan involves Jow risk and proven
technology and operating and accounting systems which have long been readily available
in the private sector and can be implemented very quickly once funding and staffing is
made available. The core asset and accounting management systems, records and
archiving systems and reporting and delivery systems in Phase I of the Strategic Plan
must be instal1ed over two years if they are to remain current and effective on an on
going basis. The systems will use latest available technology which changes rapidly.
Alternatively, If :he core systems are funded in installments ofSt 5 to $20 million a year
over 6 years or longer, they will already be obsolete when the implementation is finally
completed and ineffective as well, necessitating another costly reform effOr1_ Therefore. a
two year implementation period is eritical. In the private sector, the usual and customary
period for implementation ofslich systems has been less than a year. However, an extra
year has been built into the plan to allow for the processes of government. Consistent
with the Strategic Plan objectives and the proposed twO year timetable for
implementation is the Strategic Plan Budget necessary to implement the Strategk Plan
refomls. The complere Strategic Pian Budget is included below.
Finally, the Special Trustee notes that the American Indian Trust Fund Management
Reform Act of 1994 (Public Law 103-412) requires the Special Trustee to certifY in
writing as to the adequacy of the Department of the Interior's consolidated trust
management budgets to discharge, etTectively and efficiently, the Secretary's trust
responsibilities and to implement the Comprehensive Strategic Plan. A credible
consolidated budget for trust management activities has not been prepared by the
Department of the lnterior. Therefore, the Strategic Plan Budget is prepared on the basis
of what will be required to implement the Strategic Plan fo'r all trust management
activities. Ifa credible consolidated budget is not produced or if the budget for the
implementation of the Strategic Plan reforms is reduced materially delayed or if
adequate,statTing or funding is not provided. the Special Trustee or a successor
organization will not be in a. pOSition to certifY the consolidated trust management
budgets 'Nhen they are prepared for ftscal 1998.'
or
�Table One
President's Budget ShortfaJls in Implementing Reforms
FY 1996. FY 1997 & FY 1998
,-
--,---
.OST
IPRES. 'SHORT·iOST
iPRES. !SHORT·OST
PRE:
REQUEST IBUDGET tFALL
:REQUEST ,BUDGET :FALL
REQUEST BUD'
.FY 1996 IFY 1996 :FY 1996iFY 1997 IFY 1997 :FY 1997FY 1998 FY 1:
;-----,--,-----;------j----'--.. --
~~~~~9iC Plan,
I
'Systems
I
~-
'Record
'Outside
I,QOol'
IRerormCoSIS:
115001
500 I
1,000
01
1,5001
1,1501
1,000 1
4o~1
3,5001
4501
47,6821
I .
ir~iiit I'
I
4001
I
:Total
• Trarls/<!rrdd to OST 219196
I .
4501
-7-,2-2~'--~
0 1 1,000
r:
---~'
14,561133,1211
3721
I
.
1
3,050
r--i
I· I
~i
r---r---'
49,6821
48,737:
17
1,221
1
1611239["·2:'---
3,050149,6821 15,9501 33,7321
I~I ' ."I
3,500!
11,200
i
1,6001:1
r--r--~
lilMPool
, _ [Shortage
14
11000r-1_ _ _ _ _ _
--·
r--r--~r--I
400101
iSub.Total
:&ITMA
Budget
01 I,QOoI
01
30.317
,---.-
+1_ _
1,6001:
:~~~ir~Ory
13,561 i 32,121,
I
"',---r--r--~:
!~:~diate
I
II
500 I
'OTFM,
Records Mgt
45,682:
I
:Contractors:
iSub:;-otal
'Sub.Total
1
I
I
I
,
'Keeping
'Systems
'Land Records:
:Systems
I
!~~~~~~sments:
!
I
~~
15,9501 33,732
50,158,
,
19
42,200 1
28,300'
120,6581
19
20,217
20
I
I' I
.
I
1
,'-
140,875 39
�Strategie Plan Budget S~nl.ntary
,-,---------------~------.------
,:
c-::-;=::;-;c===__ __
:On90 in 9
'Implementation iPer
-
~
11997-19_99 __ ~n_um _
_
_
-;Sta';-dard
Asset and Accounting
I
I 1
1 iManagementSystem.
I
34.662.8, 18,122.7
r--"
,
'-'Lar:dTitie and Records Management System ari(j-:
•
-Trust
~-~
-------- ........._ - - - - - - - - - -
, lLedger System
- T - ' - -..- - - - - - - - - - - - - ' - - '..
.... -------~-. --c---c----c-o-
-----~.--
!
i
,
---~--------------·
--:--;--;:~ - - - - - - ' - - - .
Iinformation Technology Infrastructure for AITDA,
21BIA. MMS.
'
'
IBLM,
, I
!
I
26,467.4!
"-'r
Inoe. and other End-Users
10.490.9
· •
I
· '~~~
'~~~---;-:Sub-ToiiiTsysie';sCosts-i:--~~~~~~~I
61,130.2: 28,613,6
'---,--I
.
.
I
,
i'DataConversion. Reconciliation & Bac"kl;-og-;C"'le-a-n--TI-----,-~-~1
5.200,0
13 !UP for probates
!
48,94S,0:
:-iIiMiLease[Files, LRIS" LTRO'Records, Imaging :
,:
I •
· land Appraisals
:
I
!!~"-~=~,.~~~~~-~ - --cl~---=!
, :Implementation for Imaging, training, policies"
:4 procedures, risk,
52,104.3
18,223.4
r-7nana·~ie-m'-e-'nC-t,-a-rc-chc-iv-e-s-a-n-od-re-cTo-rd-;cs-mTaTnTaTge·me·i1tl:--'-'-.:......-+-~~----
I :and external.........
I iprofesslonal services
-I!-
-~.".
i
~----
iSIMana-ge-m-e-nTt;-::OC::S-=T-o-rAC-:
ITDA
Ir--~""
5,5480 i
1 .
1,861,0
- - - - - - - - - I c - '---'---1-1---'
i~6T~-"~--------''---''1167,727.5! 55,898.0
Strafegic Plan Budget
($ ThQusands)
..
.
..
------~,-~·~~··=-~-~-~-=·'~
-~===·~r
-~··~···~~~-I
:-....
1
Implementation CostS.
i--------'iFY 97/98
11. Standard Trust
IFY 99
IFY 97-99
. 15,933,3118.729,51
II
Ongoing Costs
I!FY 00
IFY~
34,662.81119,665.5118,122.7
�'Asset and Accounting
,Management System
and Land Title and
Records Management
,System
.
"
,
I:
I:
"
A Trust Asset and
;"1'
, - - - ; , -
-
"
i,
Accounting Management
System
8,237,3' 9,870,5'
I
18,107.8 i 12,970,5! 12,97Q,5
"B:'-:-:-La-n-Cd'-CT~itC-le""&CCR-e-Co-rdS,I-,Management System
3,196.0 I 8,059,0' 11,255,0 I 6,095,0: 4,552.2
r
,
,C, General Ledger
,
.
Ii
2,000,0'-. 300,0!
D. Interf2ce
Development
2,300,0,, _......_--- i
300.0
300,0
2,500,0
,System
3,000,0'!
i
300,0
i
5000 1
:~~~~~~:~~onm'~i
~A, AITDA,
BIA, MMS,
,BLM,
26,467.4,11,847,9[10,490,9
'I'
f
I
!
I
I
' I 10,457,9, 11,926.4,
iB, Tribes, Including End· ' ,
!
iuserTraining
2,756,71
I
i
I
I
1
Ii' I
I
113,214,6113,252,6
:Infrastructure
n
I
!
300,0
1,324.41
I
22,366,3"
9,354,5
9,928,8
i
1
4,081.1! I 2,019.11 1,136.4
:1
[m
:SUB.TOTAL SYSTEMS 1
r---~I
'I
ICOSTS
129,141.9 31,982.31 61,130.2, 131,513.4 28,613.6
I
i3. Data Conversion:
I'
I
!ReconciUation &
' - .Backlog Clean·up
1
1
I
"
,m
1
Age~cY,1
,'-
48,94501 I 8,625,0
['I
I,
600.01
540.01
i
7,200.0
I
1
1,140.0[1
LTRO
11,030,0 [""
1,400.0,
c-- - I~"-'2,430.0: I
4,000.0
Hearings &1
AppealslAdmln, Lawl
4.0000!
8,000,0 rrr-l:-,4""250i
I
3,000.0
7.400,0"
I
'3, IIMlLessel Subsystemr-:Convers;onIReconcile. 1 1,375,0'1
1
:1
I
!2. File Clean-up,
,,"--.
IDatalDocumentCheck
4,400.0,
:4, LRIS
!I'
'~-·-·,rl
27.535,0 21,410.0
~1, Probate Related
iBacklog CleZn.ups:
1
I
2,600.0 i
'
I
840,0
2,000,0 1
2,215.0
4,600.0
11----
~I:---
L'
i1
'-1
.
2.000,0 I 2,000.0
�,
,
,
!ConversionfOwnership
lReconciliatlon/Defective '
Title Clean-up
.,
'
"
I'
,
··"~~~·'----·--::-:=7:'-~--~·-~-- ~----
3,160,0:3,160,01,
!1'ifOOO,Q i 1ccOcc,0"'OccO,ccO':~-2::C'"',O"'Oc:"0-=-,0 ,;-,"""'5'"',2c:"OO,0! 5,200,0
'6, Appraisal Clesn-up
O
-"" .
-,----r-------.. ,_·'---'--·.wr---·'- ' - r - - ,
i)
i
4-:Tmpi,,--;;;;,-;,tation---- 31,572:9! 20,531:4-;-52,1 04,-3,T1-9,417,iT18;ii:34
,--'-:,"--- ----------..,-----r---------------'---r- -.__._ ..
:A,lmagm9
, 2,730,21 1,608,5,i
4,338,7, I 1,6084, 1,608.4
,5, Imaging Clean-up
~-~
i
-----,---~-
~-,--
I:-'-!:
'S,Training AITDA, BIA,
r:!..MS, BLM._ _ ~~ ___ , 6,416,7,
ie, Policy, Procedures,
[Legal Manuals
4,000,0
I
;0, Risk Management
I
I'
4,520,0 I
I"
3,500,0
[Services
10,026,1 ii, 2,495,3, 2,301,5
3,609.41
:'
fE. Archives and Records
I
!Management
'10.406,0!
IF, External Professional
-~i-~-i---
I
Ii
;-----.. . .-~"---,--.-'
250,0 I 4,250,0 iI
250,01
250,0
4,520,0 I 9,040,0 I, 4,520,0 4,520,0
I n ,i
I
8,043,5
fi
I
r---I
2,500.0
:5, Managem-e-n""t:-;;O"'S=T'--r--r
I
18,449,511 8,043,5
6,000.0'
[-
2,500,0
I
I
1,500,0
I
II
--,
I .3,687.0 L 1,861,0 1--1 1,861,0 l 1,861,0
I 5,548.0 I,
, ..- ,
191 ,942.8 i75,794.71167,727.5 r ,44 c;;;5-;;, 0'" I
""6""1 7""6:-;.6' 5 8""98;;",
'or AITDA
TOTALS
r
r
Less: $13.350'
,million appropriated
,
,for FV97
11"!~royement
'. _ Ilmltatlves.
8,043,5
,
.'
I!
I!
i!
I
-13,350.0 ,
:
.
Ii-I---'1~~~
,:--:- -'r--
c----rl-~
i/MPLEMENT'1
.
I
ISTRATEGICPLAN:!
I
,1S4,:msli
'COST TO
I
i
Strategic Plan Major Data Conversion, Reconciliation & Backlog Problems to be
Addressed:
--~~=",,-~'~--- ~~.---'--c.;A-::m:':o-:-u-::nt;--,Transactions
:Tribal Reconciliation Project Disclosures
jTransactions without source documentation
1
I
32,319
�--····1
·billion
·~'$4.1
Amoun~
with incomplete disbursement voucher
,Packages
.
:billion
,Amount without source documentation for unreconciled :$575
disbursements
,million
7
'Uni~rse of 'e-a-se-s 'and transactions
~~~~~~--.~~~~'----
,_._---
iUnknown
..
---===c-:-;=-:-~--~~---c-_--r---"--I
:Probate Related Backlogs
J
I
,::--:-;-~-;----.,-:---"-:----------~-~--.-----
I '
,Backlog of cases at Agencies
:Backlog of cases at Administrative Law Judges
,Number of TSRS, Recordation, Imaging & Mapping
,Documents for research at LTROs
,
i
.
.
-'--'
3,500
I.
212,381
I
I
4,300
~~~~~~~---------r---I----~!
r
!Land Title and Records Offices
'':7-7'''~'-=-;--~-;:;:--'-:-
---;--
;Number of Defective Titles to research
iNumber of Defective Titles· Muskogee Area
!~:~;:;hof Pre·1966 Statutes of. Limitations Cases to
I
4,942:
25,000
I.
r-----~-------------:__---r---'--:.
I
!Lea.es to be Imaged
60,000
i
36,000
I
I
I
I
INumber of mes to be researched and given document
:checklreconcilialion prior to conversion
I
I
749,000
tWhereabouts Unknown" riles with no address or
,ijncorrec~ ~9dre~~ __
. ..
IForm~r minors accpunts with positive balances or
"'Whereabouts Unknown"
...
I
. ....
1$27,7
~Appralsals
i
to be made
•
I
I
[UM Flies Information
..
-
!million .
1~217
million
I
I
45,624
I
27,519
1$42.2
"million
Ioverdraft Interest Ctearing Accounts mis·posted
$28
IGeneral Ledger losses not cleared
:Number with no tax identification or social security
number
~.
iDuplicate Accounts
,
million
I
I II
I
126,393
16,828
�'Special Deposit Accounts with no activity last eighteen 152.3
;months
:million
6,119
Number of accounts with $0 balance and no activity las t;
,thirteen months and not closed
'
14,476
.Number of accounts with batance $0 to $1 with nO
----[----'---1
activity lor thirteen months
14,906
Number 01 accounts with no activity for eighteen months : - - - - ' [
:andnotcodedlordelelion
!
128,114
Strategic Plan Data, Reconciliation ..<:: Backlog Clean~up Summary
"r'I', .
.
,;'-;::=--;--i.--;--;-:-;-_!,-__ L:Clean-u p Backtog
'11. Probate Related
1'1
Backlog Clean-up
!
'Admlnistrative Law
Problem'
IFY1997
.2001
1($
_',thousandS)
r---rl
I
~~~ge~n~~~~~~--'rl~3~,5~o~or~lp-ro7ba~te-s---------------r1---1~,1~4~O'
!Judges
1
3,453 Probat<ls
. 2,430
---''-------;1;-·~ ........ ri::;T:;:;S;:;R:;:;S"';.R';"e:C:c:C:o=rdC:a"tio:C:n:--,7:lm~a:-:g:;:in:-:g~&;--i,I---'--1
;-1
;...IL_T_R_O_ _ _ _ _ _ _ 212,381 . Mapping Documents
,9,425
i
r.
I
,
[2. File Clean-up,
re-!- - - - - - - - - - - - - - - - - - ' - - - 1
'
i02t2/0ocument Check ,749,000 11M Files Document Verification
rl
•
I
!
lS.IIM Laase
.. _ !Subsystem
,Conversion
Ii.
7.400
ic----I
i
-II
[:File
,
iConversionfTestingfReconcilialion
2,215
-rL=.-~,~rI
Ir--·~-I
,.
f - I- - . ,
- -
...
'4, LRIS
lConverslon/Ownership,
'Reconciliation &
Defective File Cleanup & ReconCiliation'
'.1
.
IOefective Titles, Must be
4,300 Iresearched and cleared
9,600
f-i--'-'·---e-r~~·,·lif-·-.-. ~.·•.~.-.~-~~·-r---'---I
.
;-;-1
: - - : - _
15. Imaging
_
1 ..
rI..
~
_
r-60,000 filmaae 60% of hiah dollar leases
3,160
�~,~~~-~.-.---.-.-
..
:
-,..----~-
,
two years:
-
....
, Ilmage remalning leases in
• ~FY2000 and FY2001:
I
- - - - c,
I
'
I
I
•
I
•
i6. Appraisals
in
----"_. ------r•
Ij
rr....
----
i 'Appraisals of 20% of high dollar
20,000 I 'assets Yrs, 1&2:
·····~~iI5% Appraisal Sampling of other
,
"
i
I
,
,
•
.
. . _I
,TOTAL
•
,TOTAL FOR FY 1997
:THROUGH FY1999
I
I
I
!
"Appraisals of renewing high dollar,
'
4.000: :assets - Yrs. 4&5.
'
,_.
"
.~---~
.5% Appraisal Sampling of other
4.000. lassets - Yrs. 4&5
•
16.000
---..
4.000
,
·
1.000
,
,
!
•
, 81000 i assets: Yrs. 1&2:
:
,
.
6.400
1--:----
I
4.000
i
65,770
n
,--;:;-
iI
,
I
·-1
•
I
48,945
'" Does not includeSI3.) million to researcb and dean·up 4,942 defective tirles for
Muskogee Area and $38.5 million to research and clean-up about 25,000 prc- 1966
Statutes of Limitations cases allowed under the Indian Claims Act of 1982. These costs
should be included in DOl's operating budgets.
,
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Clinton Administration History Project
Creator
An entity primarily responsible for making the resource
Cinton Administration History Project
Council of Economic Advisers
Department of Commerce
Central Intelligence Agency
Department of the Interior
Department of Defense
Corporation for National Service
Council on Environmental Quality
Department of Justice
Domestic Policy Council
Department of Education
Department of Energy
Environmental Protection Agency
Federal Emergency Management Agency
General Services Administration
Small Business Administration
Social Security Administration
United States Agency for International Development
National Economic Council
Office of Management & Budget
Office of National Drug Control Policy
Office of Personnel Management
Office of Science & Technology Policy
Office of the Vice President
United States Trade Representative
Date
A point or period of time associated with an event in the lifecycle of the resource
1993-2001
Description
An account of the resource
<p>The Clinton Administration History Project describes in detail the accomplishments of President Clinton's Administration for the period 1993-2001. The records consist of the histories of 32 agencies or departments within the Executive Branch. In general, each organization associated with the Project submitted a narrative history along with supporting documents. These narrative accounts are primarily overviews of the various missions, special projects, and accomplishments of the agencies. The supplementary records include substantive memos, press releases, briefing papers, and publications illustrated with photos and charts.</p>
<p>Agencies:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Council+of+Economic+Advisers&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Council of Economic Advisers</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Central+Intelligence+Agency&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Central Intelligence Agency</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Commerce&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Commerce</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+the+Interior&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of the Interior</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Defense&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Defense</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Corporation+for+National+Service&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Corporation for National Service</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Council+on+Environmental+Quality&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Council on Environmental Quality</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Justice&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Justice</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Domestic+Policy+Council&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Domestic Policy Council</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Education&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Education</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Energy&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Energy</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Environmental+Protection+Agency&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Environmental Protection Agency</a><br /><a 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href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Office+of+the+Vice+President&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Office of the Vice President</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Small+Business+Administration&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Small Business Administration</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Social+Security+Administration&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Social Security Administration</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+State&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of State</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Transportation&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Transportation</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+the+Treasury&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of the Treasury</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+United+States+Agency+for+International+Development&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the United States Agency for International Development</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+United+States+Department+of+Agriculture&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the United States Department of Agriculture</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+United+States+Trade+Representative&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the United States Trade Representative</a><br /><a href="http://clinton.presidentiallibraries.us/items/browse?search=&advanced%5B0%5D%5Belement_id%5D=39&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=History+of+the+Department+of+Veterans+Affairs&range=&collection=21&type=&user=&tags=&public=&featured=&exhibit=&submit_search=Search+for+items">History of the Department of Veterans Affairs</a></p>
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36051">Collection Finding Aid</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Extent
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1474 folders in 111 boxes
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
[Dept. of the Interior - Bureau of Indian Affairs] [1]
Creator
An entity primarily responsible for making the resource
History of the Department of the Interior
Clinton Administration History Project
Date
A point or period of time associated with an event in the lifecycle of the resource
1993-2001
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 12
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/Systematic/Administration-History-finding-aid.pdf">Collection Finding Aid</a>
<a href="http://catalog.archives.gov/id/1225030">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Format
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Adobe Acrobat Document
Publisher
An entity responsible for making the resource available
Clinton Presidential Library & Museum
Medium
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Reproduction-Reference
Date Created
Date of creation of the resource.
6/24/2011
Source
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1225030-interior-bureau-indian-affairs-1
1225030