Bush Returning U.S. to Termination Policy

by Brad Jolly, Partner
Oct 31, 2006

In what is yet another example of the Bush Administration proving that those who do not learn from the past are doomed to repeat it, the administration has responded to the Cobell Settlement before Congress by adding provisions to slowly terminate the federal trust responsibility over both individual Indian and tribal trust lands. In a document entitled "New Issues for S.1439," the Bush administration has proposed that the Cobell settlement legislation include provisions that would consolidate fractionated Indian lands over the next 10 years to 10 owners and convert the federal trust relationship into a "beneficiary-managed" trust under which the United States would have no liability.

The specific terms of the Bush proposal would consolidate fractionated trust lands using both voluntary and involuntary means over the next 10 years. After consolidation, the management of Indian lands, including tribal lands, would shift to the so-called "beneficiary-managed" trust. According to the briefing paper released by the Senate Indian Affairs Committee, the land would retain its trust status for purposes of exemption from state taxation, but landowners would receive all income from the land directly, removing the responsibility for collecting and distributing income from trust lands from the Bureau of Indian Affairs ("BIA"). Additionally, BIA approval for leases would no longer be required. However, the United States would supposedly be responsible for preventing involuntary alienation of land, approving transfers of title, maintaining title records, and probating trust estates. The BIA would, supposedly, provide "management" financial support and technical assistance during the "transition period" to "assist owners in becoming efficient property owners and managers."

More disturbingly, the administration's proposal would require the resolution of all tribal trust claims in addition to the individual trust claims to be settled under the current draft of the legislation. The administration proposes setting up a judgment fund whereby tribes would receive a percentage based on its current landholdings and income generated from those landholdings. Of course, the government's current determination of the balance of all trust accounts would be deemed accurate. In other words, any money the United States stole, lost, or otherwise mismanaged would simply be gone and forgotten.

Finally, the administration's proposal would "limit" the government's liability during the 10 year consolidation period and the period of time from then until the New Termination is complete. After that, the United States could never be held liable for damages for any of its future mismanagement. It could only be forced to "correct errors."

At first glance, some may consider the removal of BIA regulation and approval of leases beneficial to individuals and tribes by removing a bureaucratic hurdle from this form of economic development. However, there are other legal implications to removing federal regulation of land leasing. For example, jurisdictional issues in Indian country can sometimes turn on the question, at least in part, of how much government regulation and involvement exists with respect to the subject matter -- the preemption analysis. The extensive government regulation of leasing provides a barrier to state regulation of what otherwise is often the conduct of non-Indians in Indian country - in many cases, it can stop at least one of the many persistent intrusions of states into the sovereign sphere of Indian nations, especially when structured and handled in a manner which ensures the exclusion of other state interests. With the Supreme Court's ever-increasing desire to increase states' rights at the destruction of tribal sovereignty and self-government, every available legislative and regulatory barrier to state incursions into Indian country must be preserved. The Bush administration's proposal would tear down one such barrier.

Regardless, overall, it is always interesting to see that the government responds to its failures and incompetencies by either eliminating what it is incompetent in dealing with or simply eliminating its responsibility for its incompetence and wrongful actions. In this case, the administration is seeking to do both. What a shock it would be if the government actually took responsibility, resolved its failures and incompetencies, and prevented them in the future. Yet, this has been the case with the issues courageously raised by Eloise Cobell in the litigation: a few years ago, the Department of Interior had proposed transferring all of its trust responsibilities to a new agency created solely for that purpose. Setting aside the inherent problems of such a proposal in dealing with the government's limited view of what constitutes a trust responsibility, it was simply an example of the government's first rule in dealing with its problems: if it's broke, rename it . . . or move it.

The Bush administration's proposal seems to be a disturbing return to the United States' 1950s Termination Policy of unilaterally ending recognition of tribes and converting trust land to the status of private land. While certainly couched in positive terms of "privileges" and "opportunities" for tribes and individual Indian landowners, the concept of converting tribal and Indian landholdings into Western concepts of land ownership is something they tried in the century before the last. Of course, the Allotment Policy is one in a long list of disasters of Indian policy, just like Termination in the 1950s. It is true that the most successful federal programs for Indian nations tend to be those which allow tribes the freedom to exercise control, management, and decision-making authority - in other words, true self-determination. But, tribes and individuals can still negotiate their own land use agreements in a manner which allows for the exercise of self-determination without eliminating the current trust responsibility for Indian lands.

Nonetheless, there are those of us who are not surprised that the government would once again propose terminating its trust responsibility with respect to Indian lands. There are those of us, called cynical, who believe the United States is always on the path of termination with respect to its Indian policy and the only variations are whether it disguises its unchanging intent of "getting out of the Indian business" or presents it more blatantly. One simply needs to take a look at the provisions of tribal restoration and recognition legislation over the past 30 years or so and note how the United States has always ensured that its responsibility for such tribes is limited and authority is bestowed on the more-than-willing states within whose borders those tribes are geographically located who are interested in maintaining control over "their Indians," usually to the tribes' detriment. Thus, the only real difference in the administration's proposal with respect the Cobell legislation and other actions of the government in Indian affairs is that this proposal swings the pendulum more toward blatantly "getting out of the Indian business." In that respect, one could at least credit them with being straightforward.

For more detailed information, you can read the breifeing paper issued by the administration on its proposal.