THE SECRETARY OF THE INTERIOR

WASHINGTON

JUL 10 2001

Memorandum

Special Trustee for American Indians
Assistant Secretary -Indian Affairs
Assistant Secretary -Land and Minerals Management
Assistant Secretary -Water and Science
Assistant Secretary -Policy, Management and Budget Solicitor

From:           Secretary 

Subject:        Action regarding Trust Reform and Historical Accounting

Soon after I arrived at the Department of the Interior, I was given initial briefings on the status of trust reform. Upon further examination of these issues, it is clear to me that we must act to ensure that trust reform is proceeding at an appropriate pace, and that the Department is on track to meet its fiduciary duties to Indian beneficiaries. Today, I am issuing two Secretary's Orders and am directing that certain actions be taken in the near term.

Trust Reform

Many Departmental employees are working hard to make trust reform a reality. Some of these employees have expressed frustration and concerns about some aspects of trust reform, including the need for clarity with regard to ultimate management responsibility for trust reform.

One issue that I can address immediately is to clarify that the Special Trustee is in charge of trust reform. Toward that end, I have today issued a Secretary's Order that delegates additional authority to the Special Trustee to ensure his capacity to implement trust reform. I will look to and rely upon the Special Trustee to oversee and guide the successful completion of the High Level Implementation "Plan, the plans to resolve the four breaches of trust identified in Cobell v. Norton, and any subsequent revision, amendments or other changes to those plans. Consistent with the spirit of the Trust Reform Act, I will also rely upon the Special Trustee to provide me with specific recommended reforms necessary for the proper discharge of my trust responsibilities to Indian tribes and individuals. This Secretary's Order is not intended, however, to alter the manner in which trust reform projects are currently staffed. Each bureau and office within the Department that is currently responsible for implementing trust reform initiatives continues to be assigned those tasks.

Second, while I believe that the Special Trustee is fulfilling his mandate to oversee trust reform, I believe that the Department would benefit from an independent assessment of the progress that has been made and of the challenges yet to come. Consequently, I am directing that the Special Trustee, within the next 30 days, provide me with a plan for hiring a management consulting firm to provide a comprehensive independent assessment of the efficacy of the Department's trust reform efforts to date. The Special Trustee's plan shall incorporate the requirement that the management consultant, within 120 days of engagement, issue to the Secretary, the Special Trustee, and the Assistant Secretary -Indian Affairs a report regarding the efficacy of the entire High Level Implementation Plan and each of the four court-identified breaches. As a result of this independent assessment, I want to be assured that all of the subprojects are moving forward in a coordinated fashion and that each subproject is being managed in a way that assures the overall success of trust reform. Where such assurances cannot be made, I want the firm to provide specific recommendations that the Department can use to make necessary changes.

Historical Accounting

It is clear that while the D.C. Circuit Court reiterated our duty to complete a historical accounting, it nevertheless left it in my discretion to design a method for the historical accounting that meets our fiduciary duties. The Court and the Congress are looking to the Department to define the precise method by which we conduct a historical accounting.

I agree with the Court that an accounting to the IIM beneficiaries is long overdue. I understand, however, that the development and implementation of a satisfactory accounting is an enormous project that will take considerable time at substantial expense. I also understand that the time and money necessary to complete the project itself may be important factors in the decisions about how to proceed. However, I want to be clear that the Department is charged with a historic mission in which success is the only option. I will not accept that this is a job too big for us to accomplish. It may take time, but the historical accounting must be completed.

The next step in this process is to develop a comprehensive plan for the historical accounting. Although myriad accounting approaches may be employed in some form and to some degree in this endeavor, it is imperative that the Department's approach satisfies our obligation to account and that the methods used to meet that goal meet appropriate fiduciary standards.

Therefore, to insure that we begin this comprehensive planning process promptly but at the same time have the necessary information for due deliberation, I have today issued a Secretary's Order creating the Office of Historical Trust Accounting. This office will be headed by an Executive Director under the direction of my office and may include staff representatives of the bureaus and offices of the Department that have responsibility for maintaining records that evidence the historical administrative management of Indian trust assets. This office will be responsible for planning and completing the historical accounting. Specifically, the Secretary's Order directs the Office of Historical Trust Accounting to begin its work by completing the following steps:

1.         Within the next 60 days, prepare a description and timetable for completion of all steps that are needed to staff and develop a comprehensive plan for the historical accounting that meets our fiduciary obligations to IIM beneficiaries. This timetable shall include schedules for the retention of one or more outside contractors to assist the Department with the management and the development of this comprehensive plan and the attendant implementation costs. Through this comprehensive plan, the Department will analyze all options, not just statistical sampling, so that we can demonstrate to Congress, the Court, IIM beneficiaries and the public that we have identified the most cost-effective plan to complete the historical accounting and thereby satisfy the Department's fiduciary duty.

2.   Because the proper development of a comprehensive plan for the historical accounting of IIM accounts is likely to take a significant amount of time, the Department must identify any portions of the historical accounting work that can begin without compromising the development of a comprehensive plan. The Office of Historical Trust Accounting is directed, within the next 120 days, to identify preliminary work that can be done in advance of a comprehensive plan.

Conclusion

My actions today, through this memorandum and the two Secretary's Orders, are meant to signal my unequivocal commitment to ensuring the progress of effective trust reform and to advance the Departmental responsibility to provide a historical accounting to IIM beneficiaries. Our efforts will only succeed if they receive the direct participation and full cooperation of all of the affected offices and bureaus. I know that I can count on each of you to take every action necessary to assist me in the successful implementation of these priorities.