[Senate Hearing 111-538]
[From the U.S. Government Publishing Office]
S. Hrg. 111-538
S. 1690, TO AMEND THE ACT OF MARCH
1, 1933, TO TRANSFER CERTAIN AUTHORITY
AND RESOURCES TO THE UTAH DINEH
CORPORATION, AND FOR OTHER PURPOSES
=======================================================================
HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
DECEMBER 9, 2009
__________
Printed for the use of the Committee on Indian Affairs
U.S. GOVERNMENT PRINTING OFFICE
57-187 WASHINGTON : 2010
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COMMITTEE ON INDIAN AFFAIRS
BYRON L. DORGAN, North Dakota, Chairman
JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
KENT CONRAD, North Dakota LISA MURKOWSKI, Alaska
DANIEL K. AKAKA, Hawaii TOM COBURN, M.D., Oklahoma
TIM JOHNSON, South Dakota MIKE CRAPO, Idaho
MARIA CANTWELL, Washington MIKE JOHANNS, Nebraska
JON TESTER, Montana
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
Allison C. Binney, Majority Staff Director and Chief Counsel
David A. Mullon Jr., Minority Staff Director and Chief Counsel
C O N T E N T S
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Page
Hearing held on December 9, 2009................................. 1
Statement of Senator Dorgan...................................... 1
Statement of Senator Franken..................................... 24
Statement of Senator Udall....................................... 16
Witnesses
Bennett, Hon. Robert F., U.S. Senator from Utah.................. 19
Prepared statement........................................... 20
Billie, Hon. John, President, Aneth Chapter, Navajo Nation;
Chairman, Navajo Utah Commission............................... 11
Prepared statement........................................... 12
Maryboy, Hon. Kenneth, Navajo Nation Council Delegate;
Commissioner, San Juan County.................................. 2
Prepared statement........................................... 3
Shelly, Hon. Ben, Vice President, Navajo Nation.................. 8
Prepared statement........................................... 9
Appendix
Adakai, James, Vice President, Oljato Chapter, Navajo Nation,
letter......................................................... 53
Begaye, Ray, State Representative for District 4, Santa Fe, New
Mexico, letter................................................. 54
Grayeyes, Willie, Chairman, Utah Dineh Corporation, letter....... 55
Morgan, Lawrence T., Speaker, Navajo Nation Council, letter with
attachments.................................................... 33
Response to written questions submitted by Hon. Tom Udall to:
Hon. Robert F. Bennett....................................... 59
Hon. Ben Shelly.............................................. 61
San Juan County Commission, prepared statement................... 27
Shirley, Jr., Dr. Joe, President, Navajo Nation, letter with
attachment..................................................... 29
S. 1690, TO AMEND THE ACT OF MARCH 1, 1933, TO TRANSFER CERTAIN
AUTHORITY AND RESOURCES TO THE UTAH DINEH CORPORATION, AND FOR OTHER
PURPOSES
----------
WEDNESDAY, DECEMBER 9, 2009
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 9:15 a.m. in room
628, Dirksen Senate Office Building, Hon. Byron L. Dorgan,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
The Chairman. Good morning. We will call the Committee to
order this morning.
This Committee was intending to have a business meeting
today. We are postponing the two items on the business meeting
until next week in order to resolve a couple of issues.
I want to just say this morning quickly that the
announcement yesterday by the Attorney General and the
Secretary of the Interior on the settlement of the Cobell case
I think is good news. It has been a long and tortured trail for
that case, beginning 13 years ago. It has been in the court
system and been the subject of many trial days and
negotiations.
I want to compliment the work of Secretary Salazar and the
Attorney General, and all of the others that have worked to try
to reach a settlement.
My hope is that the settlement in the Cobell case would
allow us to move beyond that case, and begin to address other
issues. As you know, there are issues that I feel very strongly
about, for example, promises and trust responsibilities for
health care, housing, education, law enforcement and more, that
I think have not been met. And my hope is that, again, the
settlement of this case will unlock opportunities to do other
things that this Country has a responsibility and an obligation
to do for the First Americans.
The Committee is going to hold a hearing this morning on S.
1690, a bill to amend the Act of March 1, 1933, to transfer
certain authority and resources to the Utah Dineh Corporation.
Senator Bennett introduced that bill on September 21, 2009. The
bill would designate a new trustee to oversee the Utah Navajo
Trust Fund. This fund consists of oil and gas revenues
generated from Navajo Nation land in Utah. Revenue from the
fund is used to support the health, welfare and education of
Navajo Indians living in San Juan County, Utah.
Current law names the State of Utah as the trustee for the
fund. In recent years, the State has sought to limit its role
as a trustee. S. 1690 would remove the State of Utah as a
trustee and designate the Utah Dineh Corporation as the new
trustee.
The Utah Dineh Corporation is a State-chartered non-profit
corporation organized for the specific purpose of fulfilling
the 1933 Act.
Today, we are going to hear from Senator Bennett, the
sponsor of the legislation, and from representatives of the
Navajo Nation. I want to mention that although the
Administration is not a witness at today's hearing, we will
seek their formal views on the bill before moving forward.
And I will encourage other interested parties to submit any
written comments they might wish to submit to the Committee.
The hearing record, as usual, will remain open for two weeks
from today.
With that, I welcome the witnesses. I know that they have
traveled some distance to be with us. We will hear from the
Honorable Kenneth Maryboy, Navajo Nation Council Delegate, and
the Honorable Ben Shelly, Vice President, Navajo Nation from
Window Rock, Arizona. We will hear them first, and then we will
call Senator Bennett to hear from him.
So let me thank both of you for traveling to be with us.
You may, Mr. Shelly, introduce the person who is accompanying
you.
Let me hear first from the Honorable Kenneth Maryboy.
Mr. Maryboy?
STATEMENT OF HON. KENNETH MARYBOY, NAVAJO NATION COUNCIL
DELEGATE; COMMISSIONER, SAN JUAN COUNTY
Mr. Maryboy. Good morning. [Greeting in native tongue.]
This morning, Chairman Dorgan, and the esteemed Members of
the Committee. My name is Kenneth Maryboy, member of the Navajo
Nation Council, San Juan County Commissioner. And I have
traveled here from San Juan County, Utah, which is one of the
seven Utah chapters of the Navajo Nation. I am one of only two
of the Utah Navajo Nation council of 88 members, legislators.
I am also a member of the Board on the Utah Dineh
Corporation.
On behalf of the San Juan County resident who is Utah
Navajos, I implore you not to authorize the Navajo Nation to
become the trustee of the royalty that are intend to be held in
a trust for the benefits of the Utah Navajos.
The President of the Navajo Nation, Joe Shirley, is not
here to testify before the Committee today because the Navajo
Nation Council has placed him and the most of his cabinet on
administrative leave. Pending the outcome of the criminal
investigation into the Navajo contract, this is the latest
chapters in embarrassment history of how Navajo government
leaders betrayed the trust of the Navajo people.
I believe the Navajo Nation government in Window Rock,
Arizona does not have the best interests of Utah Navajos at
heart when it tried to convince you to give them the control of
the trust fund that belongs to the tribal members whom the
Navajo Nation government was otherwise forgotten.
I have prepared a written testimony that has been submitted
for the record. I would like to briefly outline why and other
members of the Utah Dineh Corporation and the San Juan County
Commission believe that the Navajo Nation should not be
entrusted with this responsibility.
I know the Navajo Nation has a history of being poor
trustee. The Navajo road funds is the trust fund composed of
the fuel excise tax by the Navajo Nation government. It is
supposed to help the local chapters build local projects.
Unfortunately, the money has stayed in the Navajo Nation at the
capital at Window Rock, Arizona.
Furthermore, elaborate that the Navajo Nation submitted the
stimulus package, how the Navajo Nation in that package no
where did we find the Utah Chapters and the Utah projects.
Unfortunately, the history is too long for me to quote the
short time I have with you this morning. I have provided
details for you in my written testimony today. I will simply
read some of the season's local headlines coming to Window
Rock, news nobody in the Navajo Nation likes, but we all have
to live with.
October 26th, President Joe Shirley put on administrative
leave. November 12th, slush fund totaling over $35 million.
November 13th, special prosecutor appointed. December 3rd,
tribal discretionary fund to be audit for the first time ever
in history.
We know the Navajo Nation has history of negligence to the
Utah Navajos. San Juan County, Utah has had to step up to the
plate to provide essential government service for the Utah
Navajo because Window Rock does not.
Quickly glimpse to the map of the Navajo Nation government
office located, and it will show you Window Rock, overlooking
the Navajo portion of the Navajo reservation. There are Navajo
Nation law enforcement, justice, health, education, welfare
office. North of the Arizona borders, which is why San Juan
County is providing law enforcement for our protection,
emergency medical service, senior services, road maintenance
and telecommunication and water services to the seven Utah
Navajo chapters.
I implore you not to abandon the Utah Navajos the way
Window Rock has. I beg you not to contribute to the next
embarrassing headlines that could likely read, Congress allows
Navajo Nation loss, Utah Navajo trust fund. Please support S.
1690 to transfer administrative to the trust fund of the Utah
Navajo Corporation.
I am happy to answer any questions. And furthermore, Mr.
Chair, I have my Board members from the Utah Dineh Corporation,
which has paid their way out of their own expense to be here to
this very important meeting here today.
Thank you.
[The prepared statement of Mr. Maryboy follows:]
Prepared Statement of Hon. Kenneth Maryboy, Navajo Nation Council
Delegate; Commissioner, San Juan County
Introduction
My name is Kenneth Maryboy and I am one of only two Navajo Nation
Council Delegates representing Utah Navajos within in the Navajo
Nation's 88 member legislature. I am also a San Juan County
Commissioner and a member of the Board of Directors of the Utah Dineh
Corporation, a nonprofit organization created to be a trustee of the
Utah Navajo Trust Fund for Navajo Indians residing in San Juan County.
I submit this testimony to you on behalf of the San Juan County
Commission to bring to this Committee's attention the inappropriateness
of the Navajo Nation government to be a trustee of the Utah Navajo
Trust Fund, given the Navajo Nation's pattern of malfeasance and
neglect.
San Juan County believes that the Navajo Nation government, which
is located in Window Rock, Arizona, and provides few if any government
services to Utah Navajos, does not have the best interest of Utah
Navajos at heart when it asserts a vague argument of tribal sovereignty
to wrestle away control of the Utah Navajo Trust Fund from Utah
Navajos.
The Navajo Nation's heretofore disinterest in its own members who
reside within the Utah strip of the Navajo Nation is the very reason
why San Juan County has stepped up to the plate to deliver essential
government services to Utah Navajos who live within the 1,550,000 acres
of the Navajo reservation that constitute the southern region of our
7,821 square mile county. San Juan County has provided law enforcement,
fire protection, emergency medical services, senior services, road
maintenance, telecommunication and water services to the seven Utah
Navajo chapters because the tribe in Window Rock does not. The prospect
of being able to control millions of dollars generated in Utah, for the
benefit of Utah Navajos, seems to have awakened Window Rock's otherwise
dormant interest in its tribal members who live north of the Arizona
border.
The Special Trustee for American Indians, Ross Swimmer, testified
last year to the House Resources Committee that the Department of
Interior would defer to the Navajo Nation in this matter to honor the
government to government relationship. Mr. Swimmer notably said that a
trustee for the Utah Navajo Trust could be a non-profit organization
composed of Navajos, with a third party to handle the trusts' corpus.
Utah Navajos have heeded the Special Trustee's suggestion by forming
the Utah Dineh Corporation, whose Board of Directors represent each of
the seven Utah Navajo Chapters and have voting interests proportional
to their chapter's Navajo population, in relation to San Juan County's
total Navajo population.
San Juan County believes the Utah Dineh Corporation is best
situated to benefit Utah Navajos as the new trustee of the Utah Navajo
Trust Fund because it is a not for profit organization who cannot hide
behind the shield of tribal sovereignty. The Navajo Nation should not
be allowed the privilege of administering the fiduciary trust of the
Utah Navajo Trust Fund because:
1. The Navajo Nation has a history of withholding funds for the
benefit of the Navajo people;
2. The Navajo Nation has a history of neglecting Utah Navajos;
and
3. The Navajo Nation has a history of malfeasance.
The Navajo Nation Has Already Failed To Be a Competent Trustee for Utah
Navajos
The Navajo Nation Road Fund reveals how the Nation fails as a
trustee. Since 2003, the Navajo Nation has collected fuel taxes
pursuant to memorandums of agreement (MOA) with Arizona, New Mexico,
and Utah. These monies are to be held in trust to improve the
transportation infrastructure of Navajo Chapters, but no such monies
have been distributed to the Chapters since 2006.
The State of Utah entered into an MOA with the Navajo Nation in
October 2000 and agreed to reduce the amount of gasoline taxes Utah
collects on the reservation by the amount of taxes the Nation collects.
For example, instead of collecting 24 and a half cents per gallon, Utah
agreed to collect only 6 and a half cents per gallon so that the Navajo
Nation could impose an 18 cent per gallon tax without passing a higher
cost to consumers.
In 2003, the Navajo Nation created the Navajo Nation Road Fund that
is based upon the anticipated revenue projection for fuel taxes for a
given year as determined by the Comptroller of the Navajo Nation. Since
2003, the Navajo Nation has budgeted $47,401,256.05 in Navajo Nation
Road Fund projects, of which, only $19,614,356.12 have actually been
spent. Of that $19,614,356.12, the Navajo Nation has kept
$8,527.225.64, or nearly half, in the Navajo Nation capitol Window Rock
rather than distributing those funds to local chapters who apply for
the money.
In the six years the Navajo Nation has been the trustee of the Road
Funds, the Navajo Nation has granted only two awards for a total of
$396,358.76 for projects within Utah, despite multiple requests from
Utah Navajo chapters for infrastructure needs that cost millions. The
August 26, 1999 resolution that the MOA between Utah the Navajo Nation
is premised upon states that the Navajo Nation will annually
communicate to the Governor of Utah about the Nation's plans to address
the infrastructure deficit within the Utah section of the reservation.
The Navajo Nation has never collected, much less communicated, the road
infrastructure needs of Utah Navajos to the Governor of Utah.
The Navajo Nation Deprives Utah Navajos of Services It Provides
Elsewhere
A look at the Navajo Nation government services reveals how Window
Rock overlooks the Utah portion of the Navajo reservation.
No Navajo Nation Public Safety and Justice Services offices are in
Utah:
Navajo Division of Public Safety Locations: 30 in Arizona,
13 in New Mexico
Emergency Medical Services: 9 in Arizona, 4 in New Mexico
Fire and Rescue Services: 6 in Arizona
Criminal Investigation Section: 5 in Arizona, 2 in New
Mexico
Corrections: 4 in Arizona, 3 in New Mexico
Victim Assistance: 2 in Arizona, 2 in New Mexico
Police Districts: 4 in Arizona, 2 in New Mexico
Judicial Branch District Locations: 5 in Arizona, 5 in New
Mexico
Office of Chief Prosecutors: 3 in Arizona, 4 in New Mexico
No Navajo Nation Health, Education and Welfare offices are in Utah:
Division of Health: 22 in Arizona, 11 in New Mexico
Navajo Area Agency on Aging: 4 in Arizona, 2 in New Mexico
Behavioral Health Services: 4 in Arizona, 2 in New Mexico
Communicable Disease Program: 5 in Arizona, 2 in New Mexico
Food Distribution Program: 5 in Arizona, 3 in New Mexico
WIC Program: 4 in Arizona, 2 in New Mexico
Division of Dine Education: 17 in Arizona, 8 in New Mexico
Office of Dine Youth: 4 in Arizona, 2 in New Mexico,
Dept. of Head Start: 4 in Arizona, 2 in New Mexico
Office of Special Education/Rehabilitation: 5 in Arizona, 2
in New Mexico
Office of Scholarship/Financial Assistance: 4 in Arizona, 2
in New Mexico
Division of Social Services: 12 in Arizona, 9 in New Mexico
Regional Offices: 5 in Arizona, 3 in New Mexico
Sub Offices: 7 in Arizona, 6 in New Mexico
Only two Navajo Nation Resources and Infrastructure offices are in
Utah:
Navajo Division of Transportation Locations: 3 in Arizona, 2
in New Mexico
Division of Natural Resources Locations: 13 in Arizona, 9 in
New Mexico, 1 in Utah
Archaeology: 2 in Arizona, 1 in New Mexico
Land Dept.: 3 in Arizona, 2 in New Mexico, 1 in Utah
Water Resources Dept.: 8 in Arizona, 6 in New Mexico
Three Navajo Nation Human and Economic Development offices are in
Utah:
Navajo Division of Economic Development: 4 in Arizona, 2 in
New Mexico, 1 in Utah
Division of Human Resources: 11 in Arizona, 6 in New Mexico,
1 in Utah
Navajo Veterans Affair: 4 in Arizona, 2 in New Mexico
Dept. of Workforce Development: 7 in Arizona, 4 in New
Mexico, 1 in Utah
The Navajo Nation Has a History of Failing to Operate With the
Transparency, Integrity and Stability That Utah Navajos Need
and Deserve in any Future Trustee
The President of the Navajo Nation, Mr. Joe Shirley, cannot testify
before this Committee because the Council has placed him and most of
his cabinet on administrative leave pending the outcome of a criminal
investigation into Navajo contracts. Unfortunately, his administration
is not the first where a Navajo leader has been removed from office.
The following list of headlines, bylines, and summaries from the press
detail Window Rock's sad history of neglect, malfeasance, and
incompetence in just the past twenty years:
President Joe Shirley Put On Administrative Leave
Navajo Times
October 26th, 2009
The Navajo Nation Council put President Joe Shirley Jr. on
administrative leave during the investigations and possible
prosecution of ethical, civil and criminal charges pending from
alleged wrongdoing by the president and key members of his
staff relative to the Nation's contracts with the private
companies, OnSat and BCDS.
Others also under investigation are the president's chief of
staff, and the directors of the divisions of Economic
Development, Community Development and Public Safety. Also
included in the investigation are former Shiprock Chapter
President Duane ``Chili'' Yazzie, and Ernest Franklin, former
employee with the Division of Community Development.
The Navajo Nation entered into a $1.9 million contract with the
Utah-based OnSat Network Communications in 2001. OnSat agreed
to provide satellite Internet services to all 110 chapters on
the Nation, but service was disrupted after the tribe stopped
making payments, claiming the company overbilled for services.
The Navajo Nation owns 51 percent of Biochemical
Decontamination Systems, or BCDS, a corporation created to seek
federal contracts for the sale of metal fabrication products.
The Nation in 2006 approved using the Navajo Dam Escrow Fund to
back a $2.2 million loan to finance an expansion of the plant.
But by 2008, the company was defunct and $4.7 million in debt.
Navajo Chairman and Son Convicted of Bribe-Taking
Washington Post
October 18, 1990
Suspended Navajo Chairman Peter MacDonald Sr. has been
convicted of 41 counts of bribery and other crimes for taking
money and favors from business people operating on the
reservation. His son and codefendant, Peter ``Rocky'' MacDonald
Jr., was convicted of 23 similar counts.
In 1989, the Navajo Tribal Council placed Peter MacDonald on
paid leave from his Navajo Chairmanship position because of
bribery and corruption charges relating to the real estate deal
in 1986. Two realtors gave the Navajo Chairman $25,000 to pay
down on his $70,000 bank loan, and a 1 year old BMW 735I
automobile, from the profit they made on the land sale to the
tribe.
Peter MacDonald's removal led to five months of internecine war
on the Navajo Nation and on July 20, 1989 he and his supporters
tried to overthrow the Navajo Nation government.
In February 1993, Peter MacDonald, was sentenced to 14 years in
prison for trying to over throw the tribal government and
inciting a fatal riot in Window Rock, Arizona, which caused two
deaths, and for fraud, racketeering and conspiracy convictions.
Navajo President Forced to Resign
High Country News
March 2, 1998
Facing up to 50 criminal charges, Navajo President Albert Hale
resigned from office Feb. 19. By resigning, Hale avoided
prosecution for misusing tribal money.
Special prosecutor for the tribe, Fred Chris Smith, and Hale's
attorney, Henry S. Howe, presented a stipulated agreement to
the tribe's ethics committee, which accepted Hale's
resignation. The agreement states that President Hale accepted
gifts from corporations doing business with the tribe,
including Xerox and Conoco.
The agreement also states that Hale and Thomas Atcitty, tribal
vice president, accepted gifts at the Democratic National
Convention in Chicago from Navajo political appointees and some
employees of the tribe. In addition, it is stipulated that Hale
used a credit card and tribal vehicles for personal use.
Headlines from just this past month detail exactly the kind of
government that hopes to administer the Utah Navajo Trust Fund. The
Navajo Nation has no capacity to mange its own funds, both oversight
ability and the willingness to enact such are lacking.
Tribal Discretionary Funds to be Audited for First Time Ever
Navajo Times
December 3, 2009
Tribal auditors to audit discretionary funds of the executive
offices and legislative branch, as well as the Office of the
First Lady. The audit will focus on up to $10 million a year in
tribal revenues and are subject to few rules and almost no
oversight. It will be the first audit of discretionary funds
for either branch, although annual audits of legislative branch
funds were mandated in 2007.
Shiprock Fair Saga Remains Unexplained
Farmington Daily Times
November 25, 2009
The Shiprock Navajo Fair Board is not a tax-exempt organization
and hasn't been paying its taxes. The fair is held in a dirt
field that has no parking, bathrooms, or trash cans. A
conservative estimate gives the Shiprock Fair $650,000 in
annual gross receipts. No one is sure how much money the fair
actually makes, so there's no way of knowing if money is being
siphoned off. The fair board continues to refuse all requests
to examine their records.
Special Prosecutor Appointed
Gallup Independent
November 13, 2009
The Navajo Nation Attorney General to appoint a special
prosecutor to investigate allegations of legal violations by
tribal officials, including President Joe Shirley Jr., and
employees arising from the tribe's contractual history with
OnSat and BCDS.
Slush Funds Total Over $35 Million
Navajo Times
November 12, 2009
More than $35 million has been poured into the discretionary
funds of the Navajo Nation Council, speaker's office and
president's office from 2005 to 2009, according to financial
records from the Navajo Nation's Office of Management and
Budget.
The Navajo Times has repeatedly asked President Joe Shirley Jr.
and Speaker Lawrence Morgan for information about their
discretionary funds. Morgan pointed out that he could not share
documents because it would violate the privacy rights of those
individuals receiving financial assistance. Shirley's Chief of
Staff Patrick Sandoval said that the executive office has no
policies and procedures.
For their efforts, the Arizona Press Club awarded the Navajo
Nation President, Speaker, and Council as co-recipients of the
Brick Wall/Arpaio First Amendment Disservice Award. An award
given annually to the public servant and/or government agency
whose egregious efforts to thwart the public's right to know
must be brought to light.
San Juan County implores this Committee not to contribute to the
next headline--
Congress Allows Window Rock to Loot Utah Navajo Trust Fund
Conclusion
Congress established the Trust Fund in 1933 to benefit Utah
Navajos. Congress must not now abandon Utah Navajos by ignoring the
history of neglect, unaccountability and malfeasance that the Navajo
Nation continues to demonstrate.
In his June 19, 2008 testimony to this committee Ross Swimmer
stated that the Office of Special Trustee lacks the capacity to
administer the Utah Navajo Trust Fund. He also stated that the Navajo
Nation or a nonprofit organization made up of Navajo citizens is more
appropriate to take on the Trust Fund.
The Navajo Nation itself shows that it too lacks the capacity to
administer the Utah Navajo Trust Fund. San Juan County supports S. 1690
to transfer administration of the Trust Fund to the Utah Dineh
Corporation. Any other conclusion would in itself be malfeasance.
The Chairman. Mr. Maryboy, thank you for your trip to
Washington, D.C. to provide this testimony. We appreciate it.
Mr. Ben Shelly, the Honorable Ben Shelly, you may proceed.
STATEMENT OF HON. BEN SHELLY, VICE PRESIDENT, NAVAJO NATION
Mr. Shelly. Thank you very much.
Good morning, Chairman Dorgan and Members of the Committee.
I am Ben Shelly, the Vice President of the Navajo Nation.
We strongly disagree with S. 1690. The Navajo Nation wants
to be the trustee of the Utah Navajo Trust Fund. We want to
work with Congress, this Committee and the Utah delegation to
make the Navajo Nation a strong, accountable, and transparent
trustee.
With me is Mr. John Billie, the President of the Aneth
Chapter and the Chairman of the Navajo Utah Commission. Mr.
Billie is here to inform the Committee that the Aneth Chapter
does not S. 1690 and is available to answer any questions.
The Navajo Nation is adamantly opposed to S. 1690.
Chairman, again, we adamantly oppose S. 1690.
This bill would give the Federal trust responsibility for
royalties from Navajo Nation mineral leases to a non-profit
corporation. This corporation did not exist when this bill was
introduced.
This bill will give control over approximately $30 million
in trust fund to a corporation with zero experience, with
absolutely no outside capital. Every year, an additional $6
million to $8 million is added to the trust fund. In the event
of any breach of trust by the corporation, the beneficiaries
would have no remedy against the corporation.
This bill is bad for the following reasons. Number one, Mr.
Chairman, there is no accountability and transparency in the
use of trust fund money. Number two, it fails to provide for
benefits for future Navajo children. Three, it wrongly expands
the original purpose of the trust and would lead to misuse and
misappropriation of the trust fund. Four, it violates the
common laws of trusts by appointing beneficiaries as trustees
and is a conflict of interest. Five, lastly, this bill was
introduced by Senator Bennett without even a single phone call,
meeting or simple email by the Senator or his staff to the
Navajo Nation government. There was no consultations.
Chairman, Senator, there was no consultation.
Frankly, Senator, this bill is a recipe for disaster.
On the other hand, the Navajo Nation is the best trustee
for the following reasons. One, we would be an accountable,
responsible and transparent trustee. Two, as agents for the
trust fund, we have never breached our fiduciary responsibility
in the past 30 years. Three, we have successful records of
managing, investing and increasing the value of many trust
accounts, including multi-million dollar accounts. Four, we
have a well-established budget and auditing process for trust
funds. Five, lastly, unlike the corporation, the Navajo Nation
has sufficient outside funds to be accountable to our Navajo
people.
Senator, Chairman Dorgan, again, I am grateful, very
grateful for this opportunity to provide testimony in regard to
S. 1690. With your permission, I would like to turn over my
remaining time to Mr. John Billie. Should you have any
additional question, I have provided written testimony with
further details of the Navajo Nation position in this matter.
Thank you.
[The prepared statement of Mr. Shelly follows:]
Prepared Statement of Hon. Ben Shelly, Vice President, Navajo Nation
Good Morning Chairman Dorgan, Honorable Members of the Committee on
Indian Affairs. I am Ben Shelly, Vice President of the Navajo Nation. I
am here to provide testimony in regard to the future of the Utah Navajo
Trust Fund (UNTF) and S. 1690 introduced by the Honorable Senator
Robert Bennett.
As the Committee knows, the State of Utah has declared its desire
to withdraw as trustee of the UNTF. The State of Utah passed
legislation in 2008 that effectively ends most disbursements from the
UNTF, ends the trust fund administration, and moves the trust assets to
a new fund pending selection of a new trustee. The Utah legislation
specifically calls on Congress to appoint a new trustee for the UNTF.
In the meantime, Navajo Nation will no longer have a role in the
planning of expenditures from the UNTF, as is mandated under the 1933
Act. Consistent with federal policy toward Indian tribes, the Navajo
Nation is requesting that Congress designate the Navajo Nation as the
new trustee of the UNTF.
Please be aware that the Navajo Nation has many elected officials
at various levels of government, all of whom have individual agendas
that may or may not coincide with the broader goals and policies of the
Navajo Nation. However, the Navajo Nation has its own law that governs
who may speak on behalf of the Navajo Nation and our People. Pursuant
to the Navajo Nation Intergovernmental Relations Committee legislation
the Navajo Nation seeks to be the trustee of the Navajo Nation Utah
Trust Fund. See attached letter from Speaker Morgan to Senator Bennett.
The Navajo Nation Executive Branch Office of the President and Vice-
President supports the Navajo Nation as the Trustee of Utah Trust Fund.
See attached letter from President Shirley to Senator Bennett. Pursuant
to Navajo Nation law, only my testimony today can provide the official
Navajo Nation position and policy in this matter.
History of Utah Navajo Lands and UNTF
The Utah portion of the Navajo Nation has a complex history of
additions, withdrawals, restorations and exchanges. The United States
added the lands in the Utah Territory that lay south of the San Juan
and Colorado rivers by Executive Order on May 17, 1884. Navajo People
have a historic tie to this area and have continuously occupied this
land since long before the captivity of Navajos in 1864. On November
19, 1892, four years before Utah was awarded statehood, then President
Benjamin Harrison, by executive order, took back those lands in the
Utah portion of the Navajo Nation which lay west of the 110+ parallel
(what is called ``the Paiute Strip''), and placed those lands back in
the public domain. Navajo lands in the Utah Territory which lay east of
the 110+ parallel remained part of the Navajo Nation. On May 15, 1905,
by executive order, President Theodore Roosevelt added the Aneth area
in Utah to the Navajo Nation. In 1908, the Department of the Interior
made an administrative withdrawal of the Paiute Strip from the federal
public domain, designating those lands again for exclusive use by the
Navajo. In 1922, the Department of the Interior again took the Paiute
Strip away from the Navajo, and put the lands back into the public
domain. The Paiute Strip was again withdrawn from the public domain in
1929.
The federal legislation that created the UNTF was the result of
negotiation and agreement between the Navajo Nation, the State of Utah,
and the United States Government. In 1930 and 1931, the Navajo Tribal
Council asked the Commissioner of Indian Affairs to negotiate on its
behalf to permanently restore the Paiute Strip to the Navajo Nation,
based on the previous set asides of this area by the Federal Government
and on historic Navajo occupation. On July 7 and 8, 1932, at its annual
meeting in Fort Wingate, the Navajo Nation Council gave its support to
proposed federal legislation which would restore the Paiute Strip to
the Navajo Nation and to add lands to the Aneth area of the Nation,
between Montezuma Creek and the Colorado border (what is referred to as
the Aneth Extension).
After Utah citizens voiced opposition to the proposed addition of
the Aneth Extension and the Paiute Strip to the Navajo Nation, the
Commissioner of Indian Affairs negotiated on behalf of the Navajo
Nation with a Utah committee made up of San Juan County representatives
to satisfy their concerns. In order to gain the Utah committees'
support for the 1933 Act, the Commissioner of Indian Affairs made
several concessions to the Utah committee. These concessions included
prohibitions on further Native American homesteads or allotments in San
Juan County, fencing of Native allotments outside the new Navajo Nation
boundaries, fencing of the Aneth Extension's northern boundary, and
agreement that state game laws would apply to Navajos hunting outside
the Nation's boundaries. The proposed legislation also included an
unusual provision that in the event oil and gas was discovered in the
Aneth Extension and the Paiute Strip, instead of all net oil and gas
royalties going to the Federal Government to administer on behalf of
Navajo citizens, 37\1/2\ percent of those royalties would instead go to
the State of Utah to be administered for ``the tuition of Indian
children in white schools and/or in the building of roads across [the
newly added lands], or for the benefit of the Indians residing
therein.'' A final concession to Utah in the proposed legislation
provided that Utah could exchange any state school trust lands inside
the Aneth Extension and the Paiute Strip for equivalent federal lands,
and that any fees or commissions for the exchange would be waived. The
Federal Government enacted the legislation Congress in 1933, as Pub. L.
No. 403, 47 Stat. 1418 (1933) (``1933 Act'').
In 1958, by Act of Congress, the Navajo Nation was further expanded
within San Juan County. Under the 1958 Act, the Navajo Nation and the
United States government exchanged Navajo Nation lands at Glen Canyon
Dam and Page, Arizona for federal lands northwest of and adjacent to
the Aneth Extension, including the McCracken Mesa area. In 1949 and
1998, with the Navajo Nation as party to the negotiations, state school
trust lands within the Navajo Nation were made Navajo Trust Lands in
exchange for other federal lands given to Utah. Currently, negotiations
are under way to exchange school trust lands in the Aneth Extension
with other federal lands under authority of the 1933 Act.
In 1968, Congress amended the 1933 Act, redefined the purposes of
the UTNF, and expanded its class of beneficiaries to include all
Navajos in San Juan County. The amended legislation provided that trust
monies can be used ``for the health, education and general welfare of
the Navajo's residing in San Juan County.'' The 1968 Amendments also
provided that trust funds could be used for projects off the Navajo
Nation provided that the ``benefits'' were proportional to the
expenditures from the trust. This vague term ``proportional'' provided
one of the main vehicles for mismanagement of the trust monies.
The Navajo Nation Has Sovereignty over Its Lands, Resources and
Citizens
The Navajo Nation is a sovereign Native Nation located in the
southwestern United States with territory in the States of New Mexico,
Arizona and Utah. Numerous Executive Orders, Acts of Congress and
Treaties have guaranteed the rights of our Nation to the surface use,
and the subsurface mineral resources, of much of our traditional lands.
For over forty years, the Navajo Nation has enjoyed a government-to-
government relationship with the United States, respectful of the
Nation's sovereignty and self-determination in its own affairs, and
free of the policies of paternalism which have blemished the past. It
remains critical to the sovereignty and self-determination of the
Navajo Nation that the United States respect our government-to-
government relationship in deciding matters that uniquely concern and
affect Navajo lands, resources and citizens. It is also crucial to the
integrity of our Nation and its political institutions that passage of
any federal legislation directly affecting our interests is done with
the consent of the Navajo Nation government.
The Utah Navajo Trust Fund is capitalized completely by royalties
from Navajo Nation mineral leases on Navajo Nation lands in Utah which
were added to the Navajo reservation in 1933. Since the 1970s, the
Navajo Nation has been the fiscal agent for all UNTF royalties,
distributing money every year to the State of Utah out of the Nation's
general funds, for investment in the UNTF. The beneficiaries of the
UNTF are those Navajo citizens residing in San Juan County, Utah. Only
members of the Navajo Nation are eligible beneficiaries of the UNTF.
The future of the UNTF is clearly a Navajo Nation issue and Congress
should respect our sovereignty in this matter.
The Navajo Nation Was Never Consulted and Is Adamantly Opposed to S.
1690
In spite of the Navajo Nation's considerable interest in the future
of the Utah Navajo Trust Fund, including who will be designated as the
new trustee, S. 1690 was introduced by the Honorable Senator Bennett
without even a single consultation by the Senator or his staff with the
Navajo Nation government.
The Navajo Nation is adamantly opposed to S. 1690. S. 1690 would
give the federal trust responsibility for royalties from Navajo Nation
mineral leases to a non-profit corporation, the Utah Dineh Corporation,
which was not even in existence when the bill was introduced. S. 1690
would give control over approximately thirty (30) million dollars in
trust funds and assets, as well as an additional 6 to 8 million dollars
a year of royalties from Navajo mineral leases, to a corporation with
zero experience as a trustee, and absolutely no outside capital. In the
event of any breach of trust by the Utah Dineh Corporation, the
beneficiaries would have no remedy against the corporation. S. 1690
fails to ensure any accountability or transparency in the use of trust
fund monies and fails to ensure that the trust will exist into
perpetuity for the benefit of future generations of Navajo
beneficiaries. S. 1690 broadly expands the original purposes of the
trust and would lead to misuse and misappropriation of trust funds. S.
1690 would violate the common law of trusts by designating a handful of
beneficiaries as the trustee and causing countless conflicts of
interest. S. 1690 is a recipe for disaster.
On the other hand, the Navajo Nation would be an accountable,
responsible and transparent trustee of the Utah Navajo Trust Fund. In
the over 30 years as fiscal agent for the royalties for the UNTF, the
Navajo Nation has never breached its fiduciary responsibilities to the
trust fund. The Navajo Nation also has a successful record of managing,
investing, and increasing the value of multiple Navajo Nation trust
accounts, including many multi-million dollar accounts. The Navajo
Nation has a well established budgeting and auditing process for the
appropriation of funds. Importantly, unlike the Utah Dineh Corporation,
the Navajo Nation has sufficient outside assets to be accountable to
the beneficiaries.
With the Navajo Nation as trustee, the Office of the Utah Navajo
Commission, centrally located in Montezuma Creek in Aneth, Utah, would
be the trust administrator. The Office of the Utah Navajo Commission
already administers and leverages money from the Utah Navajo
Revitalization Fund, the UNTF, Navajo Nation funds, and federal funds
for projects in Navajo Country in San Juan County, Utah. Having the
Office of the Utah Navajo Commission as trust administrator would thus
create economies of scale, and would greatly reduce administrative
costs for the Utah Navajo Trust Fund.
The Navajo Nation is very concerned that there is a rush to
designate a non-profit corporation as the new trustee of the UNTF
especially where there is no transparency or accountability. The trust
must be grown and managed successfully not only to pay for needed
expenditures in the short term, but for the benefit of future
generations of Navajos in San Juan County as well. The trust also
should be managed to ensure its survival in perpetuity. The Navajo
Nation is committed to ensuring that the UNTF continues to grow and
benefit current and future generations of Utah Navajos and the Navajo
Nation should be made the new trustee.
Conclusion
Designating the Navajo Nation as trustee of the UNTF is the only
position consistent with the policy established by the United States
Congress to recognize the sovereignty of the Navajo Nation and the
right of the Navajo Nation to self-determination in matters which
concern the Nation's lands, resources and citizens. S. 1690 was
introduced without a single consultation with the Navajo Nation
government and would give the important federal trust responsibility
over the Nation's resources and citizens to some non-profit
corporation. S. 1690 is an affront to the Navajo Nation's sovereignty
and right to self determination and this Committee should oppose it.
I have appreciated this opportunity to provide testimony to the
Senate Committee on Indian Affairs. The Navajo Nation looks forward to
working with Congress, this Committee and the Utah delegation in a
government-to-government relationship as reasonable legislation is
introduced to secure the future of the Utah Navajo Trust Fund. Thank
you.
STATEMENT OF HON. JOHN BILLIE, PRESIDENT, ANETH
CHAPTER, NAVAJO NATION; CHAIRMAN, NAVAJO UTAH
COMMISSION
Mr. Billie. Good morning, Chairman. My name is John Billie.
I am the President of the Aneth Chapter and the Chairman of the
Navajo Utah Commission. And the Chapter opposes S. 1690 for the
following reasons.
There was no consultation on this bill. Second, there was
no adequate public hearing on this bill. Third, a resolution
was presented to community to support this bill and
corporation, but that resolution failed.
We, as Aneth Chapter, support the Navajo Nation as trustee
with adequate representation of the Aneth Chapter in the
decision-making furthermore.
Thank you for your time.
[The prepared statement of Mr. Billie follows:]
Prepared Statement of Hon. John Billie, President, Aneth Chapter,
Navajo Nation; Chairman, Navajo Utah Commission
Chairman Dorgan and Honorable Members of the Committee on Indian
Affairs,
My name is John Billie, I had the opportunity and honor of
participating in the U.S. Senate Committee on Indian Affairs'
Congressional hearing on S. 1690 on December 09, 2009. The Honorable
Senator Robert Bennett is the sponsor of S. 1690. As a leader of the
Navajo people of Utah, I currently hold the positions of Aneth Chapter
President and Chairman of the Navajo Utah Commission. I sincerely thank
the Committee for my participation. In the short amount of time
allotted for testimony, I was unable to expand on my remarks or offer
clarification on some of the statements I thought were misleading. I am
respectfully submitting additional written comments relative to the
issues discussed. I also would like to apologize for an inappropriate
remark made by one of the presenters. This is explained further in the
first capsule. Expanded comments on the other issues follows as well.
Kenneth Maryboy Introduction
As an elected leader of the Navajo people, I took an oath to uphold
the laws of the Navajo Nation and represent the people to the best of
my ability. It is due to this oath that I took offense at some of
Council Delegate Kenneth Maryboy's remarks including utilization of a
Navajo phrase spoken in the Navajo language at the beginning of his
introduction. Mr. Maryboy used a Navajo phrase generally meaning he was
addressing the enemy and going into battle. Many Navajo people
listening to the hearing's webcast were offended. This is a phrase
utilized by Navajo medicine people in ceremonies preparing warriors
going off to war against a real enemy. Many found this disturbing and
inappropriate because it was basically a threat to individuals who were
not the enemy. Mr. Maryboy was elected to his duel capacity as Navajo
Nation Council Delegate and San Juan County Commissioner by the Navajo
people of Utah. Mr. Maryboy owes an apology to the Navajo people,
members of the Senate Indian Affairs Committee, San Juan Commission,
and people of Utah.
Special Interest Group
The special interest creating the Utah Dineh Corporation include
former tribal leaders, a non-Indian CPA, and Zions Bank. Mark Maryboy,
one of the former leaders worked exclusively with CPA Phil Lyman to
develop the Corporation with ultimate intent to install the two
individuals as CEO and CFO. The plan was outlined in an unsuccessful
request for funding from the state's Utah Navajo Revitalization Fund.
Zions Bank of Utah revealed its interest with a contribution of $10,000
in this application. Phil Lyman also owns an investment firm and has
created strong ties with Zions Bank. Mr. Lyman basically created the
Corporation single-handedly. Mr. Lyman also conducted a media campaign
with misinformation and made-up quotes of support. The Navajo people
found Mr. Lyman's cavalier attitude about tribal sovereignty equally
disturbing. The board for the Dineh Corporation was hand-picked
supporters--there was no process in selecting the board.
Navajo Nation Consultation
The Navajo people do not agree with Sen. Bennett's definition of
consultation. Sen. Bennett introduced S. 1690 on September 21, 2009.
The Senator did provide a courtesy listening session with Navajo
officials on October 2009. Sen. Bennett simply indicated he was moving
forward with his legislation after a brief visit. The Navajo Nation
considers the federal policy on Indian consultation to be a more
meaningful concept that involves recognition of a government to
government relationship, respect, and interactive dialogue. Sen.
Bennett certainly didn't provide this in drafting an ill-advised
legislation.
Navajo Nation Services to Utah
During his many years in Congress, Sen. Bennett has never visited
the Navajo Nation including the Utah portion of the reservation. It is
simply not true for Sen. Bennett to claim Navajo Nation disinterest or
lack of service in the Utah section of the Navajo Nation. With all due
respect, Sen. Bennett is listening only to a small fraction of Navajos
and relying on misinformation instead of deeper exploration of the
issues in order to craft proper and responsible legislation. The 62.5
percent collected by the Navajo Nation from the Utah oil royalties goes
into the tribal treasury. These funds supplement revenues from other
tribal sources to create a general fund budget. This budget provides
basic services to all chapters including Utah chapters. The Navajo
Nation is further providing a share of federal health care dollars to
the Utah Navajo Health System through a Pubic Law 638 contract. The
Navajo Nation also created a Utah district court in 2007 to serve the
Utah portion of the Navajo Nation. The Navajo Nation established and is
still operating a Regional Business Development Office in Utah to
assist Utah chapters with economic endeavors. The Navajo Nation
developed the Utah Navajo Commission in 1992 to specifically address
and represent the interest of Utah Navajos. This tribal sub-unit has
provided a much-needed voice and advocacy for Utah Navajos. It has
leveraged significant non-tribal funding for the benefit of Utah
Navajos. No other region on the Navajo Nation has a Commission of this
nature and mandate.
Supporting Chapter Resolutions
Sen. Bennett's assertion that there is overwhelming support for
designating the Utah Dineh Corporation as trustee is not true. Two of
the seven Utah chapters including Aneth Chapter and Dennehotso Chapter
are opposing the Utah Dineh Corporation. A supporting resolution from a
Navajo chapter requires only 25 votes--no where near the chapter's
total membership. A significant number of the Navajo people do not read
or write. This is the population that attend chapter meetings
regularly. It is easy to manipulate the vote with fear-mongering. This
was the tactics utilized by a small group of vocal supporters creating
the Utah Dineh Corporation. The Navajo people were told the Navajo
Nation would steal their money and that tribal leaders have the ability
to disregard existing laws including federal rules and regulations. The
U.S. Congress knows this is not true. This is the tactic found in
Kenneth Maryboy's oral and written testimony. Mr. Maryboy is trying to
mislead the Senate Indian Affairs Committee with selective,
sensationalized headlines.
Navajo Nation Collaboration with Utah Chapters
The Navajo Nation established the Navajo Utah Commission in 1992 to
represent the Utah chapters collectively in regards to issues and
interest impacting the Navajo people of Utah. All seven chapters have
an elected representative on the commission. The Navajo Nation has
worked with the Navajo Utah Commission since the state of Utah
announced its decision to resign as trustee of the Utah Navajo Trust
Fund. The commission passed resolution no. NUCMAY-445-08 in May 2008
supporting the position of the Navajo Nation regarding designation of a
new trustee. Kenneth Maryboy's claim that only two Navajo Nation
Council delegates represent the Utah Navajos is erroneous. Most Utah
chapters straddle the Utah-Arizona state line. The Council delegates do
not discriminate against certain sections of their chapter
jurisdiction. In fact, two other chapters (Oljato and Navajo Mountain)
currently have Council delegates from Arizona despite a larger Utah
Navajo population. Representation is the choice of the people.
Support for Alternate Federal Legislation
The Navajo Nation enacted resolution no. IGRMY-107-08 on May 19,
2008 establishing the Navajo Nation's official position on designation
of a new trustee for the Utah Navajo Trust Fund. Moving forward, the
Navajo Nation enacted resolution no. IGRF-24-09 on February 10, 2009
proposing federal legislation for selection of a new trustee. The
Navajo Nation made every attempt to work with the Utah Congressional
delegation to no avail. Sen. Bennett's introduction and advocacy for S.
1690 includes absolutely no consultation with the Navajo Nation. The
Senator's attitude has been that ``we created legislation that doesn't
need your participation'' despite the fact that there's a government to
government relationship in existence and that the issue involves lands,
resources, and citizens on Navajo Nation trust lands. The Navajo Nation
has now focused efforts on working with the Congressional delegations
from Arizona and New Mexico to introduce alternate federal legislation
in naming the Navajo Nation as trustee for the Utah Navajo Trust Fund.
Utah Resignation as Trustee
Sen. Bennett is correct in stating that the state of Utah's
relationship with the Utah Navajo Trust Fund beneficiary has not been
harmonious. There has been four major lawsuits with the fourth case
Pelt v. Utah currently in settlement mediation. The cases have involved
mismanagement, misappropriations, and lack of accountability regarding
expenditures of trust fund revenues. It is unfortunate to say Navajo
individuals are involved in the Pelt V. Utah litigation. This is why
the right trustee is absolutely critical. Fiduciary responsibilities
makes it imperative to make the right choice for the Utah Navajo Trust
Fund. The next trustee must have proper credentials, capacity, internal
assets, and legal mechanism to fulfill trust responsibilities. It is
essential to manage the Utah Navajo Trust Fund in perpetuity for future
generations.
Utah Dineh Corporation Capacity
As the Senate Indian Affairs Committee was informed, the Utah Dineh
Corporation was not even incorporated when S. 1690 was introduced by
Sen. Bennett. The incorporation documents and by-laws have not been
made available to the Utah Navajo Trust Fund beneficiary. There was no
process for the so-called public hearing. Meetings termed as public
hearings lack transcripts. The Navajo Nation was never invited to
participate. Despite clear self-interest, personal gain, conflict of
interest, and lack of proper credentials, a select group of individuals
organizing the Utah Dineh Corporation are already appointing themselves
as CEO, CFO, and who knows what. The selection of a non-profit as
trustee will mean enormous administrative burden on the trust fund,
resources that should be more appropriately spent on the beneficiary.
Sen. Bennett's assertion that the Navajo Nation is requesting a fee to
serve as trustee of the Utah Navajo Trust Fund is not entirely correct.
It is true there will be a need to spend some trust fund monies for
administrative purposes. However, what the Navajo Nation will utilize
for management will not be as extensive as the Utah Dineh Corporation.
This non-profit is a totally new experience with no capital or assets
of its own. The Navajo Nation has funded the Navajo Utah Commission
since 1992. This amount will be matched with trust fund appropriations
to staff and administer the trust fund in appropriate manner. It does
not make sense to designate an inexperienced, un-capitalized, and
secretive non-profit to serve as trustee. The Utah Navajos deserve full
protection and the highest level of fiduciary responsibility for care
of limited and valuable resources.
The Chairman. Thank you very much.
As I indicated earlier, Senator Bennett is here and will be
providing his perspective on the legislation.
Senator Bennett authored the legislation and had requested
a hearing. I was happy to do that. It appears to me that we
have significant differences of opinion here at the witness
table, so let me ask a few questions.
Mr. Maryboy, my understanding is that the State of Utah
decided that they didn't want to be managing these trust funds.
At some moment, they made that decision and took some action by
State legislation to accomplish that. Is that correct?
Mr. Maryboy. Yes, sir.
The Chairman. And so with the State deciding that they
don't wish to manage these funds, then the question is, who
should manage the funds and how do you develop a consensus for
deciding who should manage the funds. How would you have
proceeded to do that were you able to do it by fiat?
Mr. Maryboy. Well, Mr. Chairman, it is very simple, that
the turmoil that the San Juan County, Utah has been faced with
many years, and there's several of mismanagement here and
there. So we took it upon ourselves that this would be the best
solutions for the Utah Navajos.
And mind you, Mr. Chairman, we do have seven supporting
resolutions, and this consists of 10,500 residents in San Juan
County, Utah. And to also say that Mr. Billie here represents
Aneth Chapter and his Chapter passed a resolution. So he is
representing less than a handful out of that 10,500
representatives.
The Chairman. You indicated that six of the seven chapters
have expressed some level of support for this?
Mr. Maryboy. Yes, they did.
The Chairman. Have you provided the Committee with whatever
documents exist for that?
Mr. Maryboy. I think the document is out there. Yes, sir.
The Chairman. Mr. Shelly, what about that? Mr. Maryboy
suggests that there is fairly substantial support and that you
represent a much smaller segment of the population in terms of
opposition.
Mr. Shelly. That would be a question, for me, Mr. Chairman,
is that the Navajo Nation wants to be a trustee to the Navajo
Utah Trust Fund and we have proven that before. From the
community, I believe Mr. Billie probably would answer that. If
you don't mind, I would like to give him that question that you
are asking.
The Chairman. All right.
Mr. Billie. Mr. Chair, we know that the seven chapters
passed a resolution not going to the Navajo Nation, but the
bill has been introduced and therefore it was brought back to
some of the community members. And as they find out that a
small special interest group is spearheading this whole thing
and there was no consultation on this bill representing from
our community.
The Chairman. Mr. Maryboy, what is the governance of the
Utah Dineh Corporation? How is it constructed, to the best of
your knowledge? I will ask the question of Senator Bennett as
well.
Mr. Maryboy. Mr. Chairman, this particular government is
put together as any simple government non-profit corporation.
But in there, we are stand for audit from the United States
OMB. The Nation, whomever, is we are open for that.
And furthermore, the Vice President alluded to the common
law. I believe that in some of the testimony that our Attorney
General of the Navajo Nation did highlighted that, the Navajo
Nation common law was never been focus by the Navajo Nation
itself, along with the legislative and the executive branch.
The Chairman. What measures would the Utah Dineh
Corporation have in place to prevent mismanagement or misuse of
trust funds?
Mr. Maryboy. Mr. Chairman, we stand to be corrected by any
oversight as the auditors, the attorneys. In the bylaw, it does
state that.
The Chairman. My guess is both of you would agree with the
proposition that what you really want, no matter what the
organization is that provides this management, you want to make
sure these funds are managed appropriately; that you are not
cheated out of income or assets that belong to the Navajo
Nations. Right?
I say that on the morning following the announcement about
the Cobell case. The most important issue here, in my judgment,
is not so much which specific organization does this, but that
finally, at last, at long, long last, we no longer have
mismanagement of Indian funds by anybody, the Interior
Department or the Federal Government, or a State that has
responsibilities, that doesn't manage it properly.
So, you know, the debate is not about proper management. We
all support that and expect that, I assume.
Let me ask, what is the enrolled membership of the Navajos
in Utah? Can someone tell me?
Mr. Shelly. Ten thousand people is what I hear from Mr.
Billie.
The Chairman. Okay. If the Navajo Nation does not support
the bill, as Mr. Shelly, you indicated. Mr. Maryboy says that
the bulk of the Utah Navajos do. But, if the Navajo Nation
would not support the bill introduced by Senator Bennett, are
there alternative proposals that you see Congress should act on
that would avoid loss of trust funds?
Mr. Shelly. Support from I would say--can you repeat that
question again?
The Chairman. Yes. If in fact the Navajo Nation decides not
to support this, a proposal by Senator Bennett to have this
non-profit, Utah Dineh Corporation, managing the funds, if you
do not support that, then what are the alternatives that you do
support in order to avoid any loss of trust fund benefits?
Mr. Maryboy?
Mr. Maryboy. Mr. Chair, I am here representing the Utah
Navajos. And I think our position is very simple when you pose
that question. I think the Utah Navajo is ready to be the
trustee of this funding as the Dineh Corporation and it is very
simple. The Utah Navajos have been neglected for many, many
years and that is one of the concerns of the Utah Navajos. And
I believe that we are ready and we are consistent with every
chapter all the way from Aneth to Navajo Mountain that we are
ready to do this.
The Chairman. Senator Udall, do you wish to inquire?
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you, Chairman Dorgan, and thank you
for this hearing.
Mr. Billie, you use the term, and I think, and just correct
me if I am describing this incorrectly, but I think you said
that the chapters did vote on it. And then when they learned
that there was, I think, a small special interest group heading
up the whole thing, there has been a reaction against that.
Is that correct? Did I hear you say that?
Mr. Billie. Yes, Senator, that is correct.
Senator Udall. And so could you tell us who the small
special interest group heading up the whole thing on the
otherwise, I guess you are talking about, that you are opposed
to? Who is that? Who is behind that?
Mr. Billie. Senator, I believe that it is the Dineh
Corporation that has been established. They are the small
special interest group, with the interests of subcontracting
their own CEO to themselves, and those are the special interest
group, the committee themselves also.
And the proper protocol on this is that the Navajo Nation
has to establish this corporation by law from the Navajo
Nation, and that is how it is done properly, protocol.
Senator Udall. So what interests are the group, the Utah
Dineh Corporation? What interest are they representing? Who is
behind the incorporation of that?
Mr. Billie. Do you want names?
Senator Udall. Yes. Well, or interests. I mean, it is oil
and gas? What are the special interests?
Mr. Billie. Well, special interests by meaning is the Dineh
Corporation, some of the Board Members and the future CEO, and
also so-called the CEO from former UNDC members, which used to
be part of the trustee before the Navajo Utah Trust became
established in 1997, I think it was.
So those are the people that are spearheading this non-
profit corporation without any consultation to the community,
and that is why there was a big reaction regarding this bill.
Senator Udall. And the reaction was a result of learning
who was behind the corporation?
Mr. Billie. Yes.
Senator Udall. And it sounds like you are saying that there
are seven chapters in the Utah area. Is that correct?
Mr. Billie. Yes.
Senator Udall. Within the part of the Navajo Nation, local
form of government, but also within the State of Utah. And what
I heard Council Delegate Maryboy say is that the seven had
voted to support this effort. I heard him say that, and you are
saying that they are having second thoughts now.
Mr. Billie. Yes, they are having second thoughts because of
this Utah Dineh Corporation that is being established, which
was never given back to the community how it is going to be
established and how it will be run. It was never consulted to
the community. That is why there has been a big reaction to
that, including the bill.
Senator Udall. Now, Vice President Shelly, has there been
an attempt by the Navajo Nation, working with these local
chapters, to work this whole thing out and to try to come up
with a solution that the Navajo Nation wants? Has there been an
attempt? Has there been a committee appointed by the Council?
Has there been any action on that part? Is the President or
have you appointed people to go out and try to work this issue
out?
Mr. Shelly. Thank you, Senator. Yes. We, the Navajo Nation
responded to the community concern. They have expressed their
interest and tried to manage their own. This particular fund,
in the past there were a lot of the people out there in the
Utah portion, the Utah Navajo people were denied, and there is
places where they were very concerned about some of this money
never really came down to them.
So they are the one that is voicing out. And there is a
commissioner already in place, and for the past so many years,
they have been ignored. And these are the people that are
coming up and opposing S. 1690, and these are the people at the
local level, the grassroots level that are saying that.
We still didn't get the money that supposed to be used for
us. It never came down to us. And that is what they are saying.
Senator Udall. Vice President Shelly, is there a piece of
Federal legislation that you are supporting that would resolve
this issue?
Mr. Shelly. Not this legislation, no.
Senator Udall. Not S. 1690, no.
Mr. Shelly. No, we are not supporting it.
Senator Udall. But is the Navajo Nation supporting another
piece of legislation? Is there something that you think would
resolve this issue?
Mr. Shelly. What it is, we want the Chapter, the Utah
people to determine how they want to manage this particular
fund. We want to be the trustee to manage for them, and let
them tell us how they want to manage this and how they want to
set themselves up on this particular trust fund.
Senator Udall. Yes.
Thank you very much, Chairman Dorgan.
The Chairman. Senator Udall, thank you very much.
I am going to thank the witnesses for being with us, and if
we have additional written questions, we will submit written
questions to you.
We will ask the Administration, as well, for its formal
views before moving forward.
Yes, Mr. Maryboy, you wanted to make another comment?
Mr. Maryboy. Mr. Chairman, yes, the question for Senator
Udall. The Board are elected by the chapters. We have
representatives from TeecNosPos and Mexican Water, Red Mesa,
all the way down to Navajo Mountain, Blue Mountain Dineh. And
the 1690 had been a public hearing at the Chapters. That is how
they have appointed these individuals. Our Chair is from Navajo
Mountain, Willie Gray Eyes, and I have my Vice Chair here with
me, and of course, the Secretary Treasurer from Blue Mountain
Dineh.
And nowhere at the public hearings and other hearings that
we have held, the Navajo Nation came to be part of the
hearings. And as you know, that the Navajo Nation does not
support this because the 88 of the Council and furthermore the
Navajo Utah Commission, there is only two true Utah Navajos.
The rest is Arizona.
The Chairman. You said the Navajo Nation does not support
this. What does that mean? Doesn't support what?
Mr. Maryboy. The Navajo Nation does not support S. 1690.
That is what I am alluding to, that the record shows that.
The Chairman. How many members are on the Board?
Mr. Maryboy. On the Utah Dineh Corporation?
The Chairman. Yes.
Mr. Maryboy. There is two representative from Aneth, one
from Blue Mountain, and one from TeecNosPos, one from Red Mesa,
one from Mexican Water, which I represent, two from Ojato, and
one from Navajo Mountain.
The Chairman. Are all the members of the Board enrolled
members?
Mr. Maryboy. Yes, they are.
The Chairman. All right.
Yes, sir?
Mr. Billie. Again, Chair, what Mr. Maryboy is talking about
is this Dineh Corporation. The Aneth Chapter did not endorse
this Dineh Corporation and that is why that resolution has come
to the table of the Aneth Chapter community, and that
resolution failed, not to support the Dineh Corporation.
The Chairman. All right.
Mr. Shelly?
Mr. Shelly. Mr. Chairman, Senator Udall, the beneficiary is
controlling this trust fund. I believe that is a conflict of
interest. And this is the biggest problem for the Navajo
Nation. And this is what I said in my statement.
The Chairman. All right.
Next, we are going to hear from Senator Bennett. We thank
the witnesses very much for being with us. Thank you so much.
Senator Bennett, would you come up and take your place at
the witness table? And we appreciate very much your being here
today and your willingness to testify on the legislation.
While Senator Bennett is coming up, we are having a hearing
on two pieces of legislation today. This bill and the second is
a hearing on the subject of oversight on the Interior
Department backlogs on the use of tribal lands; that is, the
applications for taking land into trust and so on. And we will
have three witnesses there.
Senator Bennett, welcome. You have had the opportunity to
hear your fellow Utahans testify and we are anxious to hear
your testimony as well.
STATEMENT OF HON. ROBERT F. BENNETT,
U.S. SENATOR FROM UTAH
Senator Bennett. Thank you, Mr. Chairman, and I have a
formal introduction which I would ask to be included in the
record.
The Chairman. Without objection.
Senator Bennett. Let me give you a little bit of background
with respect to this and do my best to try to clear up some
ambiguity that may still be hanging over it.
There is a sense of urgency with respect to resolving this
issue. It is a Utah issue and it requires, I believe, a Utah-
based solution. And as it became clear that this issue was
going to arise last year, Mr. Ross Swimmer, who is the former
Special Trustee for American Indians, recommended that there
were two options for resolving the issue. One would be the
Navajo Nation would take over; or the other would be the
setting up of a non-profit with a Board of Navajo citizens.
And as has been indicated here, the people directly
affected in Utah overwhelmingly chose to go the route of the
non-profit. It is true that there is one group out of this, and
you have heard from them, that says no, but the vast majority
of the Navajos in Utah have said they prefer the second
recommendation from Mr. Swimmer and they have set it up. They
have established a non-profit. They have established the Board
of Directors with oversight and transparency and worked with
lawyers to make sure that it is done properly.
Now, here is the background of how we got here. This goes
all the way back to 1933. Congress added approximately 52,000
acres of land north of the San Juan River to the Navajo Nation.
It was not part of the Navajo Nation prior to 1933, but it was
added to compensate for reservation land that would be
withdrawn by the creation of Lake Powell.
So, the State of Utah at that time insisted that the future
oil and gas revenue that would come off of this land be
reserved for Utah Navajos. It was, after all, Utah Navajos who
were losing their land, and they wanted to be sure that the oil
and gas revenue that would come off this land would be
dedicated to the Utah Navajos. And this was done with the State
as the trustee. So, it was set up that the oil and gas revenue
would be handled by the State solely for the benefit of the
Utah Navajos.
Now, by coincidence, all of this came up for review some 35
years later, in 1968, and there was an amendment to the 1933
Act to expand the class of beneficiaries to include all Navajos
residing in San Juan County, Utah. The author of that amendment
was the Senator from Utah, Wallace F. Bennett, with whom I was
quite intimately acquainted. So that is a strong reason for me
to stay interested in this issue.
Now, I have heard from the Navajo Nation. They came to see
me. The idea that there has been no consultation and no
conversation is not entirely accurate. And they say, we
guarantee you that if we get control of all of these funds, we
will see to it that they still flow to the Utah Navajos. We
will just take a small administrative fee for handling them.
And you have heard the testimony, causing the Utah Navajos
to say we are not entirely satisfied with that. We are not sure
that that is what is going to happen; that if all of this money
now goes to the Navajo Nation, which has responsibilities far
beyond Utah, the temptation to take some of this money away
from the Utah Navajos and use it for other imperatives of the
Navajo Nation, we are afraid will be overwhelming.
And indeed, that was one of the reasons why, given the two
choices that were outlined by the Special Trustee, Mr. Swimmer,
they thought it makes more sense for us to establish the non-
profit corporation that will be in charge of this; that will
see to it that all of the money that comes from these oil and
gas revenues will be available to the Utah Navajos.
Now, as I understand it, there are seven different groups
involved in the Utah Navajos that have examined this. All seven
voted for it. The reconsideration that you heard about is
coming in one of the seven, but the other six remain firmly
solid in their support for this legislation and this particular
approach.
So that is the history of it. There is some urgency because
the State has said we can no longer perform this function, and
we will withdraw from this function at the end of this year,
that is December 31st. I have a letter from the State
supporting going forward in the manner that this bill would go
forward. I believe if we show any kind of progress here in the
Congress, the State will say, well, we will continue to manage
this for a few more months while it gets resolved in the
Congress.
But the problem if, if it does not get resolved, there will
be students who are planning on going to college on the basis
of funds that have historically been made available from this
source of revenue that will not be able to go to college. There
will be health care that has historically been funded from this
that will not be made available.
The whole thing will come to a halt if we don't get this
resolved, and it is for that purpose that I have introduced the
legislation.
That is the background and history of it, and I will be
happy to respond to any questions you might have.
[The prepared statement of Senator Bennett follows:]
Prepared Statement of Hon. Robert F. Bennett, U.S. Senator from Utah
Good Morning Mr. Chairman, Senator Barrasso, and members of the
Committee. I appreciate you taking the time to hold a hearing on this
important issue in my home state.
In 1933, Congress added approximately 52,000 acres of land north of
the San Juan River to the Navajo Reservation in Utah to compensate for
land that had been taken to accommodate what would become Lake Powell.
This area is known as the Aneth Extension. It was believed that this
land held a high potential for oil and gas production. In anticipation
of this development, and as part of an agreement between the Federal
Government and the state of Utah, the 1933 legislation created a
permanent trust specifically for the benefit of Utah Navajos, funded by
a portion of any royalties from oil and gas development in the Aneth
extension. The act mandated that 37.5 percent of the royalties from
this 52,000 acre area be used for the education of Navajo children, the
construction and maintenance of reservation roads, and other benefits
of the Navajos living in the Aneth Extension. The remainder of the
royalties would be sent to the Navajo Nation. The legislation
designated the State of Utah as the trustee responsible for managing
this fund, named the Utah Navajo Trust Fund.
The State of Utah only consented to removing the Aneth lands from
the public domain and adding them to the Navajo Reservation when an
agreement was reached to dedicate a portion of the revenue generated
from the harvesting of oil and gas resources to the areas in Utah where
the resource was produced. The State insisted on this arrangement to
ensure that the Navajos living on the Utah portion of the Navajo
Reservation received some direct benefit from the development in their
back yards, and did not have to solely rely on the historically
inadequate appropriations from the Nation's general funds. Congress
recognized this distinction in the 1933 Act and did so again in 1968
when my father, Senator Wallace F. Bennett, amended the law to broaden
the class of beneficiaries to include all Navajos residing in San Juan
County. My father's amendment also expanded the purposes of the fund to
include the health, education and general welfare of the beneficiaries.
The Utah Navajos and the State of Utah have often clashed over the
management of the trust fund and several lawsuits have resulted from
this discord. As a result of this sometimes acrimonious relationship,
the Utah State legislature allowed the law that created the mechanism
for distributing the Utah Navajo Trust Fund benefits to sunset. In
2007, Governor Huntsman notified the Utah Congressional Delegation that
the state desired to be relieved of its trustee responsibilities.
December 31, 2009 is the last day that Utah will have a legal mechanism
in place to distribute funds to the various programs established for
the benefit of San Juan County Navajos. The cessation of those
distributions will shut down the housing and scholarship programs that
provide the bulk of assistance to the Navajos of San Juan County
resulting in even greater hardship in one of the poorest regions in
Utah.
The Navajos residing in San Juan County are my constituents. At the
beginning of this year I received resolutions from six of the seven
Utah Navajo Chapters (the seventh chapter has fewer than fifty members
residing in Utah) endorsing the idea of designating a new trustee as
long as that trustee is not the Navajo Nation. The response to my
question of why they did not want the Navajo Nation to serve as trustee
was that they believe the Navajo Nation will use the Utah Navajo Trust
Fund for purposes other than what the 1933 Act and 1968 amendments
require.
These Chapter resolutions also endorsed the idea of allowing the
San Juan Navajos to manage their own resources. Because I represent
their interests as Utahns in the United States Senate and share their
desire to grant them the ability to determine their own future, I
agreed to work with them in resolving this problem.
S. 1690 respects the precedent established by the Congress in 1933
and reaffirmed in 1968 that the Utah Navajos are unique in this one
respect from the rest of the Navajo Nation. I believe Congress'
recognition that the Utah Navajos residing in San Juan County are
entitled to receive a direct share of the revenue from resources
developed within the Aneth Extension is evidence that this is a Utah
issue and therefore, a Utah based trustee should be the solution.
On June 19, 2008, Mr. Ross Swimmer, Special Trustee for American
Indians, testified before the House Committee on Natural Resources in
an oversight hearing for the Utah Navajo Trust Fund. He noted in his
testimony that his office did not have the capacity to administer this
fund in the manner required by the 1933 Act. He concludes by stating it
would be appropriate for either the Navajo Nation or a nonprofit
organization made up of Navajo citizens to serve as the trustee.
This second option identified by Mr. Swimmer opens the door for a
unique solution to this problem that will allow the Utah Navajos an
opportunity they have never been able to fully experience--that
experience known as self determination.
To this end, the Utah Navajos have used the non-profit organization
option recommended by the Special Trustee for American Indians as their
model in creating the Utah Dineh Corporation. This corporation has a
board of directors comprised of members from each Utah Chapter. The
Utah Dineh Corporation is a Utah Nonprofit Corporation organized for
the specific purpose of fulfilling the mandate of the 1933 and 1968
Acts. The Corporation will contract with a private investment firm for
money management and establish processes whereby the money collected
and investment earned will be used to further the intent of the trust
fund.
The intent of S. 1690 is to designate a new trustee in the manner
recommend by Mr. Swimmer and, in doing so, allow the Utah Navajos to
manage their own assets. For far too long the Utah Navajos have been
poorly served by a paternalistic system that is often abused. While no
system of trust responsibility is exempt from the potential of
mismanagement, I trust that the San Juan County Navajos are capable of
acting in the collective good for today's and future generations of
their people. I believe the Congress should do the right thing by fully
enabling self determination for them. S. 1690 would accomplish that
goal. Thank you allowing me to testify and holding today's hearing on
this important legislation.
The Chairman. Senator Bennett, thank you very much.
Let me ask you about the issue of consultation. I think you
referred to it at the start of your testimony.
Senator Bennett. Yes.
The Chairman. Some have said that this was a surprise to
them. There had been no consultation. You indicated you had had
meetings with the Navajo. So would you amplify on that?
Senator Bennett. Well, a group of them came to see me in my
office after the introduction of the bill to discuss it. And we
talked it through, and they outlined their reasons for wanting
the other alternative. That is, that all of the money should go
to the Navajo Nation. And that was the meeting in which they
promised me if you allow it all to come to us, we assure you
that after we have taken our administrative fee, it will all
flow back to the Utah Navajos. The Utah Navajos, to be very
blunt about it, put very little stock in those assurances.
The Chairman. The Board of Directors of the non-profit, as
I asked earlier, they are all enrolled members of the Navajo
Nation?
Senator Bennett. Yes, as Mr. Maryboy indicated, they are
chosen by the various groups, but there is a mechanism for, I
suppose in Federal terms we might call it an Inspector General
or something of that kind, to see to it that the money is
properly handled and there is proper accounting and
transparency here.
The comment that was made that it is the beneficiaries that
are administering it, it is indeed the representatives of the
beneficiaries that are administering it. But their concern is
that if it goes to the Navajo Nation, the people who are
administering it have little or no interest in those people who
have historically been the beneficiaries and that they will
lose the money. I can't put it any more bluntly than that.
The Chairman. Now, you have described also what you
consider the urgency of getting this resolved, because the
State is withdrawing. Is that correct?
Senator Bennett. Yes. That is correct.
The Chairman. Tell me where the assets are when the State
withdraws at this point at the end of December?
Senator Bennett. Well, I have a list of the assets that I
will be happy to supply the Committee as to where they are and
what might happen to them.
The Chairman. If you would do that for the record, I would
appreciate that.
Senator Bennett. Surely. We will do that.
The Chairman. Senator Udall?
Senator Udall. Thank you, Senator Dorgan.
And thank you, Senator Bennett for coming forward and being
available to answer questions on this.
From your description of the history, it sounds like the
State of Utah has been involved in this since 1933.
Senator Bennett. That is correct.
Senator Udall. And so why are they withdrawing at this
point in time? Clearly the way it was set up and then the way,
is it your father that amended it in 1968?
Senator Bennett. No. There have been clashes.
Senator Udall. Whoever amended it, through this entire
period of time, you are talking 75 years, you have seen the
State of Utah be involved in this. And I assume that it takes
some level of understanding of this whole industry and how to
do this. Why at this point is Utah just kind of walking away
from it?
Senator Bennett. Well, I wish I could say that the
relationship had been harmonious through the entire period of
time, but it is not. There have been some clashes between the
Utah Navajos, saying to the State, we would prefer it to go
here and go there. And the State legislature in this last
session just said, look, instead of continuing to deal with
this, why don't we just back out and let it happen?
So it was an action on the part of the State legislature to
say we want to simplify our lives, not have anything to do with
this anymore and walk away from it.
Senator Udall. But would you consider, from a financial
perspective, a pretty sophisticated thing to manage, the assets
that we are talking about here? Utah probably has over time
developed some expertise in this area.
Senator Bennett. I will not claim to have examined every
aspect of the non-profit corporation, but I have looked into it
to the extent of feeling comfortable with the governance that
has been set up. And feel that it would be a responsible agency
for handling these funds.
Senator Udall. And you feel that the managers that the
State of Utah had and the expertise that they brought to it,
this non-profit, this Dineh Corporation would have the same
kind of talent and expertise and everything in order to manage
these funds, to make sure that the beneficiaries get a fair
deal.
Senator Bennett. They would contract with professional
money managers, as the State has done. Yes, I think it would be
handled properly.
Senator Udall. Now, does the State taken an administrative
fee?
Senator Bennett. No.
Senator Udall. They have never taken an administrative fee?
Senator Bennett. Not that I know of.
Senator Udall. So this would be a new development where you
have the Navajo Nation taking an administrative fee.
Senator Bennett. Correct. And the question of what
constitutes a small fee is at the moment an unresolved number,
and one of the circumstances that is here. I would refer you to
the New Mexico State Legislature. I understand that they have
taken a position in support of S. 1690 for some reason that I
do not understand.
And I have been told that Senator Bingaman is in support of
this legislation, but I better leave it at that for you to find
out the full details because I didn't come with all of that
directly ready to respond.
But because this does involved Navajos in all of the
States--New Mexico, Arizona and Utah--I think there is some
background in New Mexico that you might find useful.
Senator Udall. Senator Bennett, did the Governor also
endorse Utah getting out of this? Did he express any
reservations in terms of the long-term history here?
Senator Bennett. The Governor did endorse this, and the
Governor urged the members of the corporation to meet with my
staff, which they have at considerable length.
Senator Udall. Thank you very much, Senator Bennett, for
being here today and trying to clarify these issues.
Thank you, Chairman Dorgan.
The Chairman. Senator Franken?
STATEMENT OF HON. AL FRANKEN,
U.S. SENATOR FROM MINNESOTA
Senator Franken. Mr. Chairman, thank you for convening this
important hearing. While today's hearing focuses on the
challenges of one tribe in the West, the issues we are facing
and discussing today are much larger and impact tribes in my
home State of Minnesota and tribes across the Country.
Appropriate management of tribal assets is vitally
important to the long-term economic well being and self-
sufficiency of all tribes. It is troubling to see persistent
problems and disputes in the management of tribal funds and
lands, and this hearing is just one step. I look forward to a
continuing dialogue with tribal governments and thank you,
Senator Bennett, for being here. I am sorry I missed the
testimony. I was at another hearing.
I guess my one question for you, Senator, is in that the
Utah legislature has passed legislation to remove itself from
the role of trustee, what will happen if Congress doesn't act
to designate a new trustee for the Utah Navajo trust fund?
Senator Bennett. My understanding that under the present
circumstance, the funds will be lost to the Utah Navajos. The
money that is being spent--oh, I am sorry. I stand corrected.
The State will still be the trustee, but by virtue of the
action of the State legislature, there will be no mechanism for
the distribution of the funds. So the effect is the same, as I
was about to say, that the funds will be lost to the Utah
Navajos at that point.
Senator Franken. Okay. So it is obvious that Congress has
to act and we will do so in the best interest of the Utah
Navajo.
Senator Bennett. Yes, as I said at the beginning, this is a
Utah problem that I think can be solved within Utah. But as the
testimony indicated and as the history has indicated, there has
been a fairly long history of, shall we say, tension between
the Utah Navajos and the Navajo Nation, and it is not unusual
here that the Utah Navajos would say we are in favor of this
legislation, and the Navajo Nation would say we are not.
Senator Franken. I understand that from the written
testimony, and I thank all the witnesses, and thank you,
Senator.
The Chairman. Senator Franken, thank you very much.
Senator Bennett, we appreciate your testimony, and you had
visited with me previously asking for a hearing. I think it is
useful to have all of this information on the record. And we
will, as I indicated, also seek the comments from the
Administration on your legislation, and we will continue to
consult with you as we proceed as well.
Senator Bennett. Thank you very much, and I want to thank
you for the prompt way you responded to my request. It is a
courtesy that I thoroughly appreciate on the part of you
personally and the Committee as a whole.
The Chairman. Senator Bennett, thank you very much.
[Whereupon, the Committee proceeded to other business.]
A P P E N D I X
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Response to Written Questions Submitted by Hon. Tom Udall to
Hon. Robert F. Bennett
Question 1a. If the legislation passed, what implications would it
have on tribal sovereignty?
Answer. The 1933 law did not establish a tribal interest in the
37.5 percent royalty derived from oil and gas production within the
Aneth Extension. In Pelt v. State of Utah, 104 F.3d 1534 (10th Cir.
1996), the Court of Appeals addressed the issue of whether the Navajo
Tribe had standing to request intervener status in a suit brought
against the State of Utah by the beneficiaries of these royalty funds.
The court used the following rationale in upholding the District Courts
rejection of the Navajo tribe's motion:
``Contrary to the Tribe's claims, we do not believe that the
Navajo Nation has any ownership in the 37.5 percent of the
royalties generated by the Aneth Extension. We note that prior
to the addition of these lands to the Navajo Reservation, these
lands were public lands. See Babbitt, 53 F.3d at 1147; 47 Stat.
1418. Contemporaneous with adding these lands to the
reservation, Congress chose to reserve a portion of any oil and
gas revenues. Congress then transferred the ownership interest
in these proceeds to the State of Utah to hold as trustee for
the benefit of the Aneth Extension Navajos. Therefore, since
the Tribe never possessed an ownership interest in these
proceeds, (citation omitted) the Tribe could not have a federal
common-law claim based on its ownership interest.'' (104 F.3d
1534 *1544.)
The 1933 act required that these funds be spent for the benefit of
the Navajos residing within the Aneth Extension and provided no role
for the Navajo Nation in fulfilling the intent of the legislation. S.
1690 does not alter the relationship established in 1933 therefore
passage of this legislation would have no effect on tribal sovereignty.
Question 1b. Would this legislation set precedent for decisions
regarding other tribes and their constituencies, those who may have
issues regarding the distribution of benefits?
Answer. I do not believe S. 1690 will create a new precedent for
constituencies within Native American Tribes to question the
distribution of resources within their Tribe. In fact, if there is a
precedent that leads to this type of discussion, I believe it was set
in 1933 with the addition of the Aneth extension to the Navajo
Reservation. Again, I refer to the Court of Appeals in Pelt v. State of
Utah. ``During the committee proceedings in 1930 considering the
predecessor of the bill that was finally passed in 1933, there was a
discussion of the unique heritage of the Navajos who resided on the
Aneth Extension and the divergence of their interests with the Tribe as
a whole. Moreover, the 1933 Congress and Utah's governor were cognizant
of the Aneth residents' separation from the Tribe and wished to provide
for these individuals.'' (104 F.3d 1534, *1540)
Furthermore, in justifying Congress' 1933 recognition of the
historically poor relationship between the Utah Navajos and the Navajo
Tribe, the State of Utah was chastised by the court in Sakezzie v. Utah
for relying too much on the Navajo Tribal government in identifying the
needs of the Navajos residing in the Aneth Extension. ``That the
determination of the needs and desires of the beneficiaries should not
be dependent upon the views of officers or members of the Navajo Indian
Tribe as a whole. . .. It is necessary to bear in mind that the tribe
as a whole is not the designated beneficiary of this fund and that its
interests and views may in some respects be in conflict with the more
pertinent interests and views of the beneficiaries.'' (198 F. Supp. 218
D. Utah 1961)
Question 2. To what extent was the Navajo Nation consulted about
the content of S. 1690 prior to introduction?
Answer. The State of Utah notified me in 2008 of its desire to be
replaced as the trustee of the 37.5 percent Aneth royalty. The governor
did not recommend a new trustee but made it clear that his major
concern was ensuring the trust fund be maintained in Utah for the
benefit of the Utah Navajos. In January of 2009, leaders of the Utah
Navajos requested my assistance in addressing this problem. The Utah
Navajos asked that I address this issue in a manner that accomplished
two goals--first; the Navajo Nation not be designated as trustee and,
second, provide the Utah Navajos the ability to manage their own
affairs in regards to the 37.5 percent royalty. Based on the history
noted above it is easy to see why the Utah Navajos feel this way about
this matter.
My office received a copy of a resolution of the Intergovernmental
Relations Committee (IGR) of the Navajo Nation Council outlining the
Navajo Nation's position on this matter in February of 2009. The
resolution also included proposed legislation drafted by IGR. Both the
position and proposed legislation were/are incompatible with the
commitment I have made to protect the interests of my San Juan County,
Utah Navajo constituents. Knowing at the outset that our goals were
incompatible, I chose to work closely with my constituents in Utah in
drafting the specifics of what became S. 1690.
For the reason noted above, I did not have a formal consultation
with the Navajo Nation regarding this matter until after introduction.
However, prior to introduction there was ample opportunity for the
Navajo Nation to learn about the model I chose to follow in addressing
this issue. Contrary to the claims of a small handful of Utah Navajos
opposed to S. 1690 because they prefer a return to the 1933 language
wherein this small group would be the sole beneficiaries of the 37.5
percent, this proposal was not developed in a vacuum. The two Utah
Navajos who are elected members of the Navajo Nation Council were aware
of what we were doing and on this past August 26th my staff met with
the presidents of the various Utah Chapters to outline the options
available for addressing this issue. All of the Chapter officials
present at this meeting urged me to follow the option (nonprofit
corporation) contained in S. 1690.
Question 3. What was the impetus of the 1968 amendment to the
original 1933 Act that created the Utah Navajo trust Fund?
Answer. The report accompanying S. 391 (the 1968 amendment)
identifies three problems in the 1933 Act that needed further
clarification as a result of litigation over the State of Utah's
implementation of the provisions of the statue. The problems centered
on the tightly prescribed uses of the funds--``tuition of Indian
children in white schools and/or the building or maintenance of roads
across the lands described in section 1 (Aneth Extension)'' and the
requirement that beneficiaries reside on land within the Aneth
Extension. (47 Stat. 1418) The facts that only a few Navajos actually
lived on the Aneth Extension lands and that most families who used
these lands lived elsewhere, moving back and forth as necessary, made
identification of beneficiaries extremely difficult. The 1968 amendment
provided the flexibility necessary to meet the intent of the 1933 Act--
ensuring that the Utah Navajos received some benefit from the
development of resources on their lands.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Hon. Ben Shelly
Question 1. If the legislation is passed, what implications would
it have on tribal sovereignty? Would this legislation set precedent for
decisions regarding other tribes and their constituencies, those who
may have issues regarding the distribution of benefits?
Answer. This legislation was introduced without consultation with
the Navajo Nation. It is a unilateral action by the Federal Government
which is contrary to long standing federal policy concerning self-
determination by Tribes.
This legislation does not necessarily set precedent as it relates
to the distribution of benefits and the class of beneficiaries this is
because the Navajo Nation was consulted initially and gave its consent
to the previous distribution of royalties and has approved maintaining
the status quo as it relates to the class of beneficiaries. However if
the Federal Government were to unilaterally alter the distribution of
benefits to tribal members then this would violate tribal sovereignty.
This legislation does set precedent as it relates to the assignment
of the Trust responsibility from the State/Federal Government to a non-
profit entity. Please remember that these royalties are from Navajo
Nation gas and oil leases from Navajo Nation Land for the benefit of
Navajo members. Furthermore, the Navajo Nation is already the fiscal
agent for these royalties.
Any unilateral action by the Federal Government without any
consultation and consent from the tribe is an abrogation of tribal
sovereignty. The Federal Trust responsibility should not be transferred
to another entity without the consent of the Navajo Nation.
Question 2. To what extent was the Navajo Nation consulted about
the content of S. 1690 prior to introduction?
Answer. The Navajo Nation was not consulted about S. 1690 prior to
its introduction. The Navajo Nation contacted Senator Bennett's office
after discovering that S. 1690 was introduced. The Navajo Nation
immediately requested to meet with the Senator's office. Senator
Bennett's office initial response was no because this was a State of
Utah matter and not a Navajo Nation issue. Senator Bennett's office,
after the Navajo Nation's request, changed its position and agreed to
meet in Shiprock. The Navajo Nation further requested a meeting with
Senator Bennett in Washington, D.C. and Senator Bennett agreed to the
meeting. The Navajo Nation was not consulted about S. 1690 prior to its
introduction. Senator Bennett only met with Navajo Nation officials
after Navajo requested a meeting with the Senator to discuss S. 1690.
This practice is inconsistent with the previous practice of the Federal
Government as it relates to consulting with the Navajo Nation.
Question 3. If made trustee, would the Navajo Nation charge a fee
for administration of the Utah Navajo Trust Fund? What would this fee
consist of? To your knowledge, does the State of Utah currently take a
fee for the administration of the Utah Navajo Trust Fund?
Answer. Please be aware the Navajo Nation is recommending that the
Navajo Nation Office of the Controller administer the Trust. The
Controller manages several accounts for the Navajo Nation and will
effectively administer this trust at a minimal amount due to the fact
that the Navajo Nation has the infrastructure readily available to
incorporate the Navajo Utah Trust Fund. It is anticipated that the
Navajo Nation will not differ, substantially, in its administration
costs than that of the State of Utah and maybe substantially lower
based upon the Nation's infrastructure.
It is our understanding that the State of Utah utilizes trust fund
monies to hire staff and office space in Utah to administer the trust.
The State of Utah has anywhere between four and six support staff.
Under the Navajo proposal, the Office of the Navajo Utah Commission
will also hire support staff and have office space to administer the
trust fund.