Native American Trust Fund Is Shadowed by Troubles

THE beleaguered United States Bureau of Indian Affairs (BIA) has an accounting nightmare on its hands, and a congressional subcommittee on its back.

A House subcommittee on government operations recently charged that the BIA, an agency Indians have had a love/hate relationship with for 150 years, has grossly mismanaged a $2 billion Indian trust fund.

BIA officials acknowledge the problems, but Eddie F. Brown, assistant secretary of Indian Affairs in the Department of the Interior, has said, "We have worked closely with all the parties concerned, including the Government Accounting Office and congressional staff, and moved to correct the problems that have existed for a long time."

Over the last two decades or so, criticism of the BIA by numerous government agencies and many tribes has steadily increased.

In 1989 a US Senate special investigation into BIA-run programs by the Select Committee on Indian Affairs concluded that "in every area that it touches, the BIA is plagued by mismanagement."

The recent disclosure involves the trust accounts of 290 Indian tribes and nearly 300,000 individual Indians. One audit uncovered a $7 million discrepancy in the $250 million account of the Sioux Nation.

None of the trust accounts have ever been reconciled. Some date back to pre-Civil War days. A single account can have several thousand Indians sharing in royalties amounting to only a few dollars a month.

Carl Shaw, a spokesman for the BIA, said, "The problem is that 80 percent of the accounts are under $100. We may end up spending $5,000 to balance an account with $100 in it."

Randy Plume, a Sioux Indian on the Pine Ridge reservation in South Dakota, said, "I get a check every year for about $7, and someone else I know gets a check for $1.38. What it costs the BIA and the government to send out checks like this must be phenomenal."

Unless all the accounts, large and small, are reconciled, taxpayers may have to reimburse the funds in question.

At this point nobody knows the degree of mismanagement because the amount of the trust fund, estimated to be $2 billion, could be even larger.

The subcommittee report is based on testimony and supporting documents from a hearing on May 20, 1991, one of four such hearings held over the last few years in an attempt to prod the BIA into action.

The report stated that Assistant Secretary Brown "has failed to provide the leadership or supervision necessary to correct the longstanding management problems."

The money in the accounts is due the Indians because of treaties or royalties from oil, gas, mineral production, or land-use agreements on Indian land.

The BIA has a trust relationship with all the tribes and took over responsibility for the trust fund in the 1960s from the US Treasury Department.

"Since 1967," James Richards, inspector general of the US Department of the Interior, told the subcommitee, "we have issued over 150 reports dealing with accounting and financial management deficiencies at both the bureau and tribal levels."

Brown insists that some of the management and personnel problems are being addressed, including establishing an Inter-Tribal Monitoring Association on Indian Trust Funds to allow tribes more say in the disposition of their accounts.

Also, beginning in 1991 the accounting firm of Arthur Andersen & Co. has been auditing accounts in the first phase of a long-range plan.

The company has said that the full costs of the overall audit in all phases could be as high as $300 million.

The cost reflects the magnitude of the nearly impossible task of having to reconstruct accounts that are more than 100 years old.

Congressman Mike Synar (D) of Oklahoma, chairman of the Government Operations Subcommittee and a consistent critic of the BIA, said at the hearing, "It is incomprehensible to this subcommittee that the Department [of the Interior] and the BIA have allowed this gross mismanagement to continue. It is this kind of dereliction of duty that, if it occurred in any other federal program, would have long ago had civil and criminal action taken against it."

The BIA was established in 1832 to administer and direct the confinement of Indians to reservations after they had resisted the westward movement of the white man for years.

Now part of the Department of the Interior, the BIA has a troubled management history. In one nine-year period, in the Teddy Roosevelt era, it was reorganized 10 times.

"The BIA was never set up to be a banking operation," said Mr. Shaw, commenting on the trust-fund disclosures. "Our mission has been to provide services to federally recognized Indians on reservations. We have antiquated rules and regulations we are following. What do you do? Stop everything and create a banking operation with all the computers you haven't had before?"

But critics cite poor management at the most basic accounting levels in the BIA.

Mr. Richards testified that at 250 remote field locations of the BIA, "propriety and integrity of the entries" to the accounting system were compromised.

"At those entry places, the instructions on how to use the machine were taped to the machine, along with the password, which means that literally there was no security and virtually anybody could make entries into those systems," he said.