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[109 Senate Hearings]
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                                                        S. Hrg. 109-572
 
    TRIBAL PARITY ACT; AND THE CHEYENNE RIVER SIOUX TRIBE EQUITABLE 
                      COMPENSATION AMENDMENTS ACT

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

                                 S. 374

TO PROVIDE COMPENSATION TO THE LOWER BRULE AND CROW CREEK SIOUX TRIBES 
OF SOUTH DAKOTA FOR DAMAGE TO TRIBAL LAND CAUSED BY PICK-SLOAN PROJECTS 
                        ALONG THE MISSOURI RIVER

                                S. 1535

 TO AMEND THE CHEYENNE RIVER SIOUX TRIBE EQUITABLE COMPENSATION ACT TO 
 PROVIDE COMPENSATION TO MEMBERS OF THE CHEYENNE RIVER SIOUX TRIBE FOR 
        DAMAGE RESULTING FROM THE OAHE DAM AND RESERVOIR PROJECT

                               __________

                             JUNE 14, 2006
                             WASHINGTON, DC


                    U.S. GOVERNMENT PRINTING OFFICE
28-188                      WASHINGTON : 2006
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                      COMMITTEE ON INDIAN AFFAIRS

                     JOHN McCAIN, Arizona, Chairman

              BYRON L. DORGAN, North Dakota, Vice Chairman

PETE V. DOMENICI, New Mexico         DANIEL K. INOUYE, Hawaii
CRAIG THOMAS, Wyoming                KENT CONRAD, North Dakota
GORDON SMITH, Oregon                 DANIEL K. AKAKA, Hawaii
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
MICHAEL D. CRAPO, Idaho              MARIA CANTWELL, Washington
RICHARD BURR, North Carolina
TOM COBURN, M.D., Oklahoma

               John Tahsuda, III, Majority Staff Director

                Sara G. Garland, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page
S. 374 and S. 1535, text of......................................     3
Statements:
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice 
      chairman, Committee on Indian Affairs......................    13
    Frazier, Harold, chairman, Cheyenne River Sioux Tribe........    30
    Jandreau, Michael, chairman, Lower Brule Sioux Tribe.........    22
    Johnson, Hon. Tim, U.S. Senator from South Dakota............    13
    Lawson, Michael L., Morgan, Angel and Associates.............    24
    Malcolm, Jeffery D., assistant director, Natural Resources 
      and Environment, U.S. Government Accountability Office.....    14
    McCain, Hon. John, U.S. Senator from Arizona, chairman, 
      Committee on Indian Affairs................................     1
    Nazzaro, Robin M., director, Natural Resources and 
      Environment, U.S. Government Accountability Office.........    14
    Thompson, Lester, chairman, Crow Creek Sioux Tribe...........    23
    Thune, Hon. John, U.S. Senator from South Dakota.............    21
    Vogel, Sharon, Cheyenne River Sioux Tribe....................    32

                                Appendix

Prepared statements:
    Frazier, Harold (with attachment)............................    42
    Jandreau, Michael............................................    39
    Lawson, Michael L. (with attachment).........................    75
    LeBeau, Freddy, vice chairman, Oahe Landowners Association...    86
    Nazzaro, Robin M. (with attachments).........................    87
    Thompson, Lester.............................................   167
    Vogel, Sharon................................................   170


    TRIBAL PARITY ACT; AND THE CHEYENNE RIVER SIOUX TRIBE EQUITABLE 
                      COMPENSATION AMENDMENTS ACT

                              ----------                              


                        WEDNESDAY, JUNE 14, 2006


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:35 a.m. in room 
485 Senate Russell Office Building, Hon. John McCain (chairman 
of the Senate Committee on Indian Affairs) presiding.
    Present: Senators McCain, Dorgan, Johnson, and Thune.

   STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA, 
             CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. Good morning. The hearing this morning will 
address two measures that are currently before the committee: 
S. 374, known as the Tribal Parity Act, and S. 1535, the 
Cheyenne River Sioux Tribe Equitable Compensation Amendments 
Act of 2005.
    The first two panels of the hearing will be addressing S. 
374, and the third panel will address S. 1535. The principal 
reason for the hearing on S. 374 is to address a recent report 
issued by the GAO at the committee's request. The committee 
marked up this bill back in late June 2005. After that, but 
before a committee report was filed, a representative of GAO 
contacted committee staff expressing some concern about 
language in the bill suggesting that the compensation levels of 
the bill were based on a methodology that had been determined 
inappropriate by the GAO. The GAO staff indicated that in 
certain respects, the methodology used to calculate the 
compensation levels in the bill deviated from the GAO 
methodology used in determining the additional compensation in 
legislation enacted for other Indian tribes impacted by Pick-
Sloan projects on the Missouri River.
    Therefore, I asked the GAO to analyze the methodology used 
for S. 374 and to prepare the report which is the focus of the 
first part of the hearing today.
    The second matter of the hearing, S. 1535, would amend the 
Cheyenne River Sioux Tribe Equitable Compensation Act that was 
passed by Congress in the year 2000. The principal amendment to 
the 2000 act would accelerate the payment schedule and change 
the funding source from annual appropriations to revenues 
derived from the Pick-Sloan.
    [Text of S. 374 and S. 1535 follow:]
      
<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


    The Chairman. I would like to express my appreciation to 
Senator Johnson, Senator Thune, and Senator Dorgan for their 
persistence and focus and attention on this issue. It is a bit 
complex. It sounds a bit arcane to many people, but it is 
obviously very, very important to the tribes that reside in 
their States, and I am pleased to see that their commitment and 
dedication to resolving this issue may bring us much closer as 
a result of their hard work.
    Senator Dorgan.

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
       DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Dorgan. Senator McCain, thank you very much. I want 
to thank my colleagues Senator Johnson and Senator Thune for 
their leadership on the bills that are important here to the 
tribes in South Dakota. We in North Dakota know a fair amount 
about the Pick-Sloan Missouri River Basin Program and the 
benefits that it was to provide to the residents of the 
Missouri River valley in the upstream States. But those 
benefits have come with very significant costs in many 
instances, particularly and especially for tribal people.
    I know from the tribes in North Dakota how detrimental that 
dam construction was and has been to their communities, 
changing the way of life and the subsistence for many tribes. 
Just for my colleague Senator Johnson's benefit, my father as a 
very young man lived in Elbow Woods, ND herding horses. Elbow 
Woods, ND no longer exists. It is now under water. It was 
inundated with Lake Sacajawea. It has been under water now for 
50 years. That community no longer exist, and all those who 
lived there, including the hospital that existed there, they 
moved, except the hospital didn't reopen anyplace. That is 
another issue we are still working on today, 50 years later.
    The point is, they moved, significant things changed, the 
diets changed, opportunities changed. So I well understand the 
motive and the interest behind this legislation. I think 
Senator Johnson and Senator Thune are to be commended, and I am 
appreciative of the chairman for holding this hearing today.
    The Chairman. Senator Johnson.

 STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Johnson. Thank you, Chairman McCain and Vice 
Chairman Dorgan, as well as the staff of the Committee on 
Indian Affairs, for agreeing to hold this hearing.
    The Tribal Parity Act and the Cheyenne River Equitable 
Compensation Amendments Act are of the utmost importance to the 
tribes involved and the attention the Committee on Indian 
Affairs has given to the Great Plains is appreciated by all the 
tribes in my State.
    I would also like to welcome our South Dakota witnesses to 
the committee. Chairman Jandreau of the Lower Brule Tribe is an 
institution in South Dakota, having served as tribal chairman 
for over 27 years now. His experience and his perspective have 
been both kindly provided and a great benefit to my office over 
the years. Chairman Frazier of the Cheyenne River Tribe has 
been a frequent guest of the committee and a tireless advocate 
for his tribe in Washington. Chairman Thompson of the Crow 
Creek Tribe is new to the job and comes in with the hopes of 
his community for building a better future.
    Sharon Vogel has been a great advocate for economic 
development on Cheyenne River. I also want to extend a big 
welcome to Freddy LeBeau and the others I have met with regard 
to the importance of these two bills to the tribes and the 
individual tribal members involved.
    The legislation to be discussed in this hearing deals with 
the Pick-Sloan project on the Missouri River and the impacts it 
continues to have on three tribes in South Dakota. The Lower 
Brule and the Crow Creek Tribes were both significantly 
impacted by the Fort Randall Dam and the Big Bend Dam, which 
flooded parts of both reservations in 1952 and then again in 
1963, forcing many families to relocate twice.
    Likewise, the Oahe Dam near Pierre, SD was completed in 
1958 and resulted in the loss of 104,420 acres of land to the 
Cheyenne River Tribe. No amount of compensation could ever 
fully account for everything that these tribes lost. However, 
Congress has twice acted to provide some compensation to 
mitigate the loss of each of these tribes. There still is more 
that needs to be done.
    While we can never erase the damage that has been done to 
the tribes and tribal members of the Missouri River, these 
bills go a long way toward helping the Lower Brule, the Crow 
Creek, and the Cheyenne River recover from the harm inflicted 
more than 40 years ago.
    I want to especially thank Senator Thune for introducing 
the Tribal Parity Act and for cosponsoring the Cheyenne River 
Sioux Tribe Equitable Compensation Amendments Act of 2005. 
Their leadership on these issues and presence here today are 
greatly appreciated.
    Again, I want to thank the Indian Affairs Committee for 
allowing this hearing, and I look forward to hearing from the 
witnesses.
    The Chairman. Thank you, sir.
    Our first panel is Robin M. Nazzaro who is the director of 
the Natural Resources and Environment, Government 
Accountability Office. She is accompanied by Jeffery Malcolm, 
assistant director.
    Welcome, Ms. Nazzaro. Welcome, Mr. Malcolm.

STATEMENT OF ROBIN M. NAZZARO, DIRECTOR, NATURAL RESOURCES AND 
 ENVIRONMENT, GOVERNMENT ACCOUNTABILITY OFFICE, ACCOMPANIED BY 
                       JEFFERY MALCOLM, 
                       ASSISTANT DIRECTOR

    Ms. Nazzaro. Thank you, Mr. Chairman and members of the 
committee. I am pleased to be here today to discuss the 
compensation claims of the Crow Creek and Lower Brule Tribes.
    As you know, from 1946 to 1966,the Federal Government 
constructed the Fort Randall and Big Bend Dams as flood control 
projects on the Missouri River in South Dakota. Installation of 
the dams caused the permanent flooding of approximately 38,000 
acres of the tribes' reservations. During construction, the 
tribes entered into negotiations with the Federal Government 
for compensation for that land. In both cases, they were unable 
to reach an negotiated settlement and Congress imposed 
legislative settlements that were less than the amounts that 
the tribes had requested.
    In the 1990's, the tribes sought and received additional 
compensation. Tribes at five other reservations also lost land 
to flood control projects, received compensation for damages, 
and requested and received additional compensation. Prior to 
the Congress authorizing additional compensation to the tribes 
at three other reservations, the GAO was asked to review their 
claims. For these tribes, we found the economic analysis used 
to justify their claims to be unreliable and we suggested that 
the Congress not rely on them as a basis for providing 
additional compensation.
    As an alternative, we suggested that if the Congress 
determined that additional compensation was warranted, it could 
determine the amount of compensation by calculating the 
difference between the tribes's final settlement proposal, 
which we refer to as the tribes's final asking price, and the 
amount of compensation the Congress originally authorized.
    We used the inflation rate and an interest rate to adjust 
the difference to reflect a range of current values, using the 
inflation rate for the lower end of the range and the interest 
rate for the higher end.
    In 2003, the Crow Creek and Lower Brule Tribes hired a 
consultant, Dr. Lawson, to determine if they were due further 
additional compensation based on the method we proposed. As a 
result of his analyses, the tribes are currently seeking a 
third round of compensation totaling about $230 million. The 
tribes assert that their calculations for additional 
compensation will bring them into parity with the additional 
compensation provided to the other tribes on the Missouri 
River.
    After assessing Dr. Lawson's methods and analysis for 
determining additional compensation, we found his approach 
differed from the approach we used in two ways. First, Dr. 
Lawson did not use the tribes's final asking price as the 
starting point. During settlement negotiations for the Fort 
Randall and Big Bend Dams, as was the case with the 
negotiations for the other dams that we reviewed, the tribes 
made a number of settlement proposals.
    In calculating additional compensation amounts, we used the 
tribes's final asking prices because we believed they 
represented the most complete and realistic amounts. In 
contrast, Dr. Lawson used selected numbers from a variety of 
tribal settlement proposals, several that were not from the 
tribes's final asking prices.
    Second, Dr. Lawson calculated only the highest additional 
compensation dollar value, rather than a range of possible 
additional compensation based on different adjustment factors. 
He used the corporate bond rate to develop a single figure for 
each tribe. His justification was that the use of the high end 
of our range would ensure parity with the amounts the tribes at 
Fort Berthold and the Cheyenne River Tribe received.
    However, as our chart shows, the Congress has not always 
chosen to use the highest value in the ranges we estimated. In 
the case of the Standing Rock Tribe, the Congress chose to 
provide additional compensation closer to the lower end of the 
range we estimated.
    Although the additional compensation amounts provided in 
the 1990's were not calculated using our approach, the amounts 
were generally within the ranges we would have proposed. 
Moreover, the additional compensation already authorized for 
the tribes in the 1990's is consistent with the additional 
compensation authorized for the other tribes on the Missouri 
River.
    The chart I brought with me today shows the ranges we have 
calculated for the five tribes on the Missouri River and the 
additional compensation authorized by the Congress. Rather than 
bringing the Crow Creek and Lower Brule Tribes into parity with 
the additional compensation provided to the other tribes, we 
believe that the compensation under consideration would 
catapult them ahead of the other tribes and set a precedent for 
the other tribes to seek a third round of compensation.
    Notwithstanding the results of our analysis, the Congress 
will ultimately need to decide whether additional compensation 
should be provided and, if so, how much it should be. We 
recognize that the issues can be sensitive, complex and 
controversial. Our analysis is intended to assist the Congress 
in this regard.
    Thank you, Mr. Chairman. This concludes my prepared 
statement. I would be happy to respond to any questions that 
you or members of the committee may have at this time.
    [Prepared statement of Ms. Nazzaro appears in apendix.]
    The Chairman. Do you have a number that you think is 
reasonable, or is that out of the scope of your studies here?
    Ms. Nazzaro. Well, what we were asked to do, sir, was to 
look at the compensation proposal. What we did is looked at the 
additional compensation the two tribes previously received, and 
while we didn't calculate that prior to Congress authorizing 
those trust funds, it would have been in the range. So what 
they had already received put them on parity with the other 
five tribes on the Missouri River.
    The Chairman. Which is, roughly?
    Ms. Nazzaro. Which tribes?
    The Chairman. You said, ``to put them on parity.'' How much 
would that be?
    Ms. Nazzaro. We estimated for Crow Creek the range would 
have been between $6.5 million and $21.4 million. Crow Creek 
received $27.5 million, so they were actually a little bit 
above our range. For the Lower Brule, the range would have been 
$12.2 million to $40.9 million, and they received additional 
compensation of $39.3 million, so they were already within our 
range. So we feel both of them are near the high end of what we 
would have proposed had we reviewed it prior to the additional 
compensation. So that is why we are saying the additional 
compensation currently being proposed would actually catapult 
them above what the other tribes received.
    The Chairman. And this bill, as I understand it, as 
proposed would raise it from $39 million to $186 million?
    Mr. Malcolm. That is correct.
    The Chairman. That is a pretty big difference in numbers 
here. How do you account for that?
    Ms. Nazzaro. The additional compensation that they are 
asking for? As I mentioned, the baseline that they used was 
different than the baseline that we used. When we started using 
our methodology, we looked at the final asking price that the 
tribes had asked during the negotiation process. We then 
compared that to the difference in what they had received 
initially. That difference we then applied an interest rate 
which would have then given a reflection of what their spending 
power would have been, as well as a corporate bond rate which 
would have been a high end had they invested the funds.
    That gave the range of what we were proposing would have 
been appropriate for the additional compensation.
    The Chairman. I don't know a lot about this issue, Ms. 
Nazzaro. It is I think appropriate for members of this 
committee to rely on the views of people, the members who 
reside in the States and the various inputs that we receive. 
But it seems to me there is a very large disparity in amounts 
of money. Is it based on acres that were inundated? What was 
the basic formula for this compensation?
    Ms. Nazzaro. The original compensation, there were a number 
of studies that were done. The Corps of Engineers did a study. 
The Department of the Interior did studies. They actually did a 
pretty good job of inventorying all of the assets that the 
tribes had at the time and what was going to be compensated. 
They also looked at what potential earning power the tribes 
would have had from some of these assets such as timber that 
were no longer going to be available to them.
    That was the basis for the original compensation. As I 
said, that was not what the tribes were asking for. Initially, 
the Federal Government gave all the tribes less than what they 
were asking. The five tribes have come back and asked for a 
second round of compensation which was awarded to each one of 
them, and those five would have fallen along the range of what 
we had proposed using our methodology, starting with this final 
asking price, and them somewhere within the range reflecting 
the current value of that money, the difference of the money.
    The Chairman. Well, I guess I would ask the next panel and 
my colleague from South Dakota, is this the last time we are 
going to come back and ask for more money? It looks to me like 
this is the third or fourth trip to the trough here. I would be 
interested in that.
    Senator Dorgan.
    Senator Dorgan. Thank you, Mr. Chairman.
    Just briefly, it is the case both I think in North Dakota, 
because we have been through this, and also with respect to 
South Dakota and other circumstances along the Missouri, when 
the Pick-Sloan project was built and the main-stem dams were 
created and the reservoirs flooded lands that were on Indian 
reservations, the Indians were under-compensated for that. You 
believe as well that the Indians were not compensated 
adequately originally by the Federal Government. Is that 
correct?
    Ms. Nazzaro. We have not assessed whether the original 
authorization was adequate or not. We have looked at the 
studies that were done. We know what the basis was for the 
Government's negotiated price, and we know somewhat about the 
basis for what the tribes were asking. We know the tribes did 
not get compensation that they felt was equitable at that time.
    Senator Dorgan. I think we have been back through this with 
respect to some North Dakota tribes. It is pretty clear that 
back then, one-half century ago when these lands were taken, 
that the compensation was not adequate to respond to the needs 
of the tribes that were going to exist after all of that land 
was taken and flooded and so on. And their lives were changed 
dramatically.
    I was just trying to understand what you are saying with 
this report, and I think I now do understand it.
    Ms. Nazzaro. We never objected to the second round of 
compensation. We just tried to provide a method that should 
Congress determine if a second round was due, what methodology 
they could use to try to put some equity to that, given that 
the tribes did not feel they had parity at that point.
    Senator Dorgan. I understand. The fact is, the chairman's 
question is a legitimate question as well. I mean, there needs 
to be settlement with respect to these issues, and you need to 
establish what is a fair level of compensation, and then all 
the parties need to move on. You can't come again and again and 
again.
    I go back to the point I asked originally. I think it is 
clear, at least it was with respect to our having gone through 
this with the North Dakota tribes, that the original 
compensation was inadequate, and that required the Congress to 
readdress that.
    Mr. Chairman, thank you very much.
    The Chairman. Senator Johnson.
    Senator Johnson. Thank you.
    I think it is important to note that the two tribes we are 
talking about here are relatively modest-sized tribes. The Crow 
Creek is in Buffalo County, SD, which is the poorest county in 
America. And I think it is important than when we base a fair 
price based on the last asking price of tribes, that presumes a 
fair negotiating balance between the tribes and the Federal 
Government at the time. The fact is, at the time the land was 
already flooded. These people were desperately poor. Their 
negotiating capability is not very sophisticated.
    So to this day, they are paying the price for their last 
offer, when in fact I think the last offer may not have been as 
equitable as it needed to be.
    In any event, I want to thank the GAO for its testimony 
today. I want to make it clear that we as members of the 
committee are not seeking to simply augment the trust fund for 
the sake of augmenting the trust fund. What we are attempting 
to do here is to arrive at a systematic, equitable and fair way 
of determining what a fair trust fund compensation ought to be, 
and we want to come to that conclusion with great finality, so 
that as the chairman notes, this isn't going to be some 
perennial issue where we come back and seek additional trust 
fund compensation, but that we come to a final conclusion and 
that will be that.
    The GAO report states that the drawn out negotiations and 
the amounts of the tribes's final asking price do not support 
the conclusion that the tribes simply capitulated and accepted 
whatever the Government offered. The tables this statement 
refers to on pages 18, 19, and 20 do not include initial 
settlement proposals and instead have a settlement figure used 
by the tribes's consultant.
    I see that the additional table on table two that you have 
provided as part of your testimony includes initial settlement 
proposals. What accounts for the differences between the 
initial proposals and the proposals used by the tribes's 
consultant?
    Mr. Malcolm. In a couple of cases, there was actually, he 
did use the tribes's initial settlement offer. For Fort Randall 
Dam and for Lower Brule, in fact, he used the initial offer in 
a couple of instances, I believe for direct and indirect 
damages, which was two of the components. That was from 1954.
    Conversely, for Crow Creek for the same dam, he used 
numbers from 1957. So again, he used selected numbers from a 
variety of offers over points in time. But yes, over the course 
of the negotiations, the offers for individual components 
fluctuated and went up and down. So there was a lot of 
variability. Again, it was just part of the negotiations. 
Either the tribes received additional information through 
negotiations with the Government. They may have been willing to 
accept less for one component as a tradeoff for receiving more 
in another component.
    Ms. Nazzaro. If I could add, though, Mr. Johnson, in total, 
if you look at what the tribes asked in their initial price 
versus their final asking price, the final asking price in 
total was higher. Actually in 12 of the 15 components, the 
indirect, the direct, the rehabilitation et cetera, 12 of the 
15 are either higher in the final asking price or equal to the 
initial proposal.
    We went through extensive records at the archives, as well 
as Department of the Interior's library to get an 
understanding, to make sure that we weren't applying just an 
arbitrary decision to use the final asking price, but to make 
sure that the tribes hadn't capitulated, hadn't been worn down 
through the negotiations, and that the numbers just kept 
falling.
    Senator Johnson. The numbers suggested in this bill are 
within the range of what the negotiations were. Is that fair to 
say?
    Ms. Nazzaro. The number that the tribe is requesting in 
this bill would exceed what we are----
    Senator Johnson. It exceeds what you think is right, but it 
falls within the range of what the negotiations were at the 
time.
    Mr. Malcolm. In one sense. It does in the sense that those 
individual components that were selected were offered as part 
of the tribal settlements at various points in time. However, 
the tribes as a cohesive settlement proposal never had a 
proposal that consisted of those dollar values at a point in 
time. So for example in 1954, if you want to use an original 
settlement, rather than consistently using all the numbers from 
1954, he instead chose to use numbers picking various 
components at different points in time. So historically from 
that point, no, the tribes never made a settlement proposal 
that consisted of the numbers he used as his starting point.
    Senator Johnson. I understand that the GAO's basis for 
using final asking price is the assumption that better 
information will emerge throughout negotiations leading to a 
closer approximation of the amounts asked for, with the value 
of actual loss to the parties. Inconsistency of the amounts 
asked for by the tribes between initial asking price, Dr. 
Lawson's figures, and the final asking price shows considerable 
inconsistency at what was asked for at different points in 
time. How do you justify this inconsistency with the notion 
that better information is the prime factor influencing the 
tribe's settlement proposals or their asking process?
    Ms. Nazzaro. I don't think we said it was just better 
information, but better information and more realistic. As I 
said, in the number of cases, though, we do see where the final 
asking price was higher than the original proposal, so in 
there, we do feel that more information came to light as to the 
value of the assets, particularly where you are talking direct 
damages. For example, in the case of Crow Creek, direct damages 
originally they were asking $566,000, and in the final asking 
price they asked for $641,000.
    Mr. Malcolm. One of the other main components here that is 
the main difference in all this is called ``rehabilitation.'' 
That, again, was to enhance the economic standing of all the 
tribe and all of its members. So a lot of the funding, over 50 
percent in most cases for both tribes, were really as a result 
of a kind of a termination era policy in the 1950's and 1960's. 
So the variability you see is really largely in the 
rehabilitation figure, so it is just in one component, and that 
component was not directly related. It was intertwined with the 
negotiations, but it wasn't directly related to damages from 
the dam.
    Senator Johnson. Finally, I know the tribes have serious 
concerns with the conclusion in your report that states:

    While our analysis does not support the additional 
compensation amounts contained in the parity bill, the Congress 
will ultimately decide whether additional compensation should 
be provided, and if so, how much it should be.

    I understand the GAO does not take positions on pending 
legislation, so could you please clarify the role of the GAO in 
this analysis and discuss whether or not this conclusion was a 
policy statement of the GAO?
    Ms. Nazzaro. I would say this was not a policy statement 
because as we said, it is not our decision to decide whether 
the tribes are due additional compensation. What we were asked 
to look at was what was the difference between, or whether the 
numbers put forward by the consultant were consistent with the 
methodology that we had used when we had reviewed prior tribal 
requests.
    In this case, we found there were some differences in the 
methodology that he applied. Ultimately, we looked at what the 
tribes had requested initially, what they received in 
additional compensation, and tried to apply our formula, and 
that is where we came to the conclusion that what they had 
received in the second round of compensation was consistent 
with what we would have proposed had we looked at it prior.
    We do realize that there are other factors that may need to 
come into the discussion over and above the kind of analysis we 
did that would certainly lend itself to your ultimate 
decisionmaking. So we did not intend to usurp that power.
    Senator Johnson. Right. Well, thank you. Obviously, this is 
legislation that has passed the Senate on three occasions and 
it is my hope that we can arrive at a number. It is my 
understanding that the consultants to the tribe concede that 
there was some mathematical error in arriving at the figures in 
the original bill and that they would be inclined to adjust 
that somewhat downward, but it is my hope that we can bring a 
final closure to the disasters that were visited upon these 
tribes, and as the Chairman noted, make this an issue that will 
not need to be revisited and to bring it to final closure.
    So thank you again to the GAO.
    Mr. Malcolm. Thank you.
    The Chairman. Senator Thune, do you have any questions?
    Senator Thune. No; thank you, Mr. Chairman.
    The Chairman. Thank you very much. Thanks for your help on 
this issue. We appreciate it very much.
    Our next panel is Michael Jandreau, who is the chairman of 
the Lower Brule Sioux Tribe; Lester Thompson, who is the 
chairman of the Crow Creek Sioux Tribe; and Michael Lawson of 
Morgan, Angel and Associates, Washington, DC.
    I believe that Senator Thune wanted to make an opening 
comment.

  STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Mr. Chairman, I thank you for giving me the 
opportunity to participate in the hearing today, although I am 
not a member of this committee. I do want to recognize, I know 
that there are a large number of elders in the room who have 
come here from South Dakota because they care passionately 
about this issue. I want to welcome them and thank them for 
being here today.
    Mr. Chairman and members of the committee, Senator Johnson, 
my colleague from South Dakota, I am delighted to be able to 
introduce three of our distinguished tribal chairmen from South 
Dakota and the great Sioux Nation. Chairman Mike Jandreau of 
Lower Brule is the senior chairman in South Dakota and the 
Great Plains region. He has been chairman for 27 years and has 
been on the council for 34 years, which is an extraordinary 
accomplishment for any elected official, particularly in Indian 
country.
    I would also like to commend to the committee's attention a 
recent article by Chairman Jandreau entitled ``Flattening the 
Reservations,'' which outlines a comprehensive economic program 
for Indian country. Picking up on the book ``The World is 
Flat'' by Thomas Friedman, it suggests how the reservations 
might fully participate in our economy. We would do well to 
consider his thoughts.
    Chairman Lester Thompson from Crow Creek is our most junior 
chairman, elected just a few months ago. Buffalo County, SD, 
where the Crow Creek Indian Reservation is located, is now 
ranked the poorest county in America. Obviously, Chairman 
Thompson faces many difficult challenges, but I believe he is 
the right man for the job. His uncle was chair at Crow Creek, 
as was his grandmother. In fact, his grandmother was the first 
woman to serve as tribal chair.
    Both chairmen appear today here in support of the Tribal 
Parity Act. Mr. Chairman, as you know, this legislation passed 
the Senate on three occasions in the 108th Congress, but died 
at the end of the Congress in the House as there was not enough 
time to consider it.
    Although he will be testifying as a member of the next 
panel on the Cheyenne River Sioux Tribe Equitable Compensation 
Amendments bill that I cosponsored with Senator Johnson, I 
would also like to take this opportunity to introduce Chairman 
Harold Frazier of the Cheyenne River Sioux Tribe. Chairman 
Frazier is currently serving his first term as tribal chairman 
of the Cheyenne River Sioux Tribe. He was elected by popular 
vote in 2002, and since 2003 has also served as chairman of the 
Great Plains Tribal Chairmans Association, representing 16 
tribes from South Dakota, North Dakota, and Nebraska.
    Mr. Chairman, I appreciate your holding this hearing so the 
committee might determine what is fair compensation for the 
Lower Brule and Crow Creek Tribes. As the GAO pointed out in 
its report, this is a sensitive and complex issue. The Pick-
Sloan project resulted in thousands of acres being flooded, and 
the population being relocated not once, but twice. It is 
important to resolve this matter to allow these chairmen to 
successfully prepare their reservation for the future.
    So Mr. Chairman, I thank you for this opportunity to 
welcome the chairmen here to join us at the hearing today.
    The Chairman. Thank you very much, Senator Thune, and thank 
you for your active participation in this issue that I know is 
very important to all the people of your State. I thank you for 
your partnership with Senator Johnson as we try to move this 
legislation forward.
    I welcome the witnesses, and we will begin with our 
youngest witness, Michael Jandreau. [Laughter.]

  STATEMENT OF MICHAEL JANDREAU, CHAIRMAN, LOWER BRULE SIOUX 
                             TRIBE

    Mr. Jandreau. First, let me say thank you very much for 
allowing this opportunity to testify before you today.
    While the irony of this hearing brings into my mind 50 some 
years ago, my mother was a council member and was involved in 
the negotiations regarding the issue of settlement for the 
takings. At that time, the idea that was put forward was that 
the Government knew better than the tribes what their values 
were and what they should be compensated for. That was not 
entirely true. Our people knew what they were asking for and 
wholly and fully expected to receive it.
    Mr. Chairman, beyond the numbers and the methodology, and 
what methodology to use, and how to compound interest 
correctly, there is a policy question and only Congress can 
decide. The GAO says the tribes differ from the approach used 
in its prior reports by not using the tribes's final asking 
price. The clear implication is that there is only one 
standard, only one correct method of evaluation. We do not 
believe that this is correct.
    Congress has never taken the position that there is only 
one way to determine what fair and reasonable compensation is 
for the Missouri River tribes. To the best of my knowledge, 
until this report, the GAO has never said that in their opinion 
there is only one appropriate method to calculate compensation.
    When our lands were flooded, we asked for in current 
dollars $432 million. That is what I believe would be fair 
compensation. We did not ask a high figure with the idea of 
negotiating a true or fair low price. Our tribe thought $432 
million was the correct amount in today's dollars.
    The GAO looks to the final asking price as if that was our 
real bottomline. That may be how a negotiation is conducted on 
Wall Street, but this is not a negotiation. The land was 
flooded. Our people were already displaced. The final asking 
price was a very poor indication of the real and fair value of 
the damage caused to my tribe by the dams on the Missouri 
River.
    If the Congress were to provide Lower Brule with an 
additional $129 million, supplementing our existing trust fund 
of $39.3 million, it is still far below $432 million, but it 
comes closer to fair compensation.
    I ask this committee on behalf of the United States to use 
its discretion and to make a policy decision that provides an 
additional $121 million for Lower Brule and $69 million for the 
Crow Creek Tribe. I ask that not because we want to be a burden 
on this country, but I ask that we may use the values to create 
a real, enduring and long-lasting life for the members of our 
tribe and our reservation.
    The question was asked earlier: Is this going to be our 
final time to come before Congress and ask for, on this issue, 
additional dollars. It is my word to you that I will recommend 
to my tribal council and to the people of our tribe that this 
would be out last our last time at this issue. However, being a 
real democracy, they have a right to state their own opinions 
in this matter.
    Thank you.
    [Prepared statement of Mr. Jandreau appears in appendix.]
    The Chairman. Well, sir, I think they have the right to 
express their opinion, but if we keep revisiting this issue, 
you will not find a great deal of sympathy from the chairman of 
this committee.
    Mr. Jandreau. Thank you very much for your directness.
    The Chairman. Chairman Thompson.

 STATEMENT OF LESTER THOMPSON, CHAIRMAN, CROW CREEK SIOUX TRIBE

    Mr. Thompson. Thank you, Mr. Chairman.
    I would like to thank Mr. Thune and Mr. Johnson for their 
valiant efforts behind this act. I know they put a lot of time 
and committed to a lot of hours into pushing this forward to 
benefit our tribes.
    Mr. Chairman, members of the committee, the statements you 
have heard from Chairman Jandreau are very true and I agree 
with him on the subjects that he had touched on. There was no 
negotiation at the time that the people of both tribes were 
uprooted and displaced. It came down to move or else. The 
detrimental impact that this event had on both tribes, socially 
and economically, has rippled down through time and hit my 
generation with the force of a tidal wave. You really can't put 
a price on this.
    Mr. Chairman, if there is one thing I agree with the GAO on 
is that compensation issues can be sensitive, complex and 
controversial. The GAO also said Congress will decide whether 
additional compensation should be provided. The Parity Act 
presents a policy issue for Congress. The amount that has 
already been awarded to the tribes is minimal, and very minute. 
These awards are only a paper transaction. We only draw a small 
amount of interest off these dollars. This is not enough to 
sustain a true economic base.
    As stated by Mr. Johnson and Mr. Thune, Crow Creek 
Reservation resides in Buffalo County, which is the poorest in 
the country. This, to me, is a national shame. My fellow 
council members and I, as newly elected leaders, have taken 
major steps in dealing with our financial situation. We are 
currently laying a new foundation and focusing on safeguarding 
funding received by our tribe by establishing internal 
processes for accountability and have sought outside advisers 
to assist in financial direction and investments.
    The Parity Act would help greatly with my tribe and 
immensely. I urge the committee to stay the course. The Parity 
Act has passed the Senate three times and this committee twice. 
Please allow the legislation to move forward. The compensation 
would be a building block toward a better future for my tribe.
    With this said, Mr. Chairman, I will lay a challenge down 
to you and to all the other Senators that you serve with, to 
come to South Dakota and to see and to visit the people of Crow 
Creek and Lower Brule. For this way, you see how beneficial the 
Parity Act would be toward our area.
    Thank you.
    [Prepared statement of Mr. Thompson appears in appendix.]
    The Chairman. Thank you very much.
    Dr. Lawson.

  STATEMENT OF MICHAEL L. LAWSON, MORGAN, ANGEL AND ASSOCIATES

    Mr. Lawson. Mr. Chairman and members of the committee, I am 
grateful to have the opportunity to provide testimony today. 
With your permission, I would like to submit my written 
statement for the hearing record.
    The Chairman. Without objection.
    Mr. Lawson. Then I will summarize my findings.
    My name is Michael Lawson and I am a historical consultant 
with Morgan, Angel and Associates. In 2003, I authored a report 
that provided the factual basis for the legislation that was 
reintroduced in the 109th Congress as S. 374. The General 
Accountability Office [GAO] report issued on May 19 was highly 
critical of my study. It concluded that my report did not 
follow the approach recommended by the GAO in two prior reports 
involving Missouri River tribes. This is because it did not 
base the difference on the tribes's final asking price or last 
best offers.
    I did not use the tribes's final asking prices as the basis 
for the difference for three reasons. The first reason was 
because the GAO's previous two reports did not clarify that its 
references to tribal prices ``at the time of the taking'' was 
to be understood as meaning the final asking price.
    The second reason is because I do not believe that these 
so-called ``last best offers'' provide a fair standard on which 
to base additional compensation. It is my view that settlements 
based on final asking prices award the tribes not for the fair 
market value of their losses, but rather for the ability or 
inability of their tribal leaders to negotiate.
    My third reason was because my historical research 
indicated that those final tribal offers were made under 
conditions of duress. The chronology I have developed to 
supplement my statement illustrates the context of the tribes's 
situation at the time their final offers were made.
    The GAO report was also critical that I used only the high 
range of their approach, and did not project the low range 
based on the annual inflation rate, but Congress has 
established no precedent for basing additional compensation to 
the Missouri River tribes at that rate, and calculation at that 
rate has no value.
    The GAO report stated that my calculations of the total 
amounts requested in the current bill incorrectly adjusted for 
the additional compensation received by the Crow Creek Sioux 
Tribe in 1996, and by the Lower Brule Sioux Tribe in 1997. I 
acknowledge these miscalculations and I have adjusted the 
amounts accordingly.
    As a result, the amount for the Lower Brule Sioux Tribe in 
section 3 of S. 374 should be $169,122,085 instead of 
$186,822,140. The amount for the Crow Creek Sioux Tribe in 
section 4 of the bill should be $96,722,084 rather than 
$105,917,853. These new amounts reflect both my adjustments in 
the calculations and the current 2006 value in the differences.
    It is my view that the tribal asking prices that I used in 
my report more accurately reflect what the tribes considered to 
be the fair market value of their losses. They also fall within 
the mid-range of the tribes's total request during the course 
of negotiations. The amounts requested in this bill also fall 
within the mid-range of possible alternative approaches as I 
have outlined in the second table of my written statement.
    While the GAO and I have differed over approaches and 
statistics, this bill is really about the policy of trying to 
establish tribal parity. The additional compensation that 
Congress has provided to seven of the Missouri River tribes 
between 1992 and 2002 appears to be all over the map. Congress 
has applied four different approaches and the perception of the 
tribes is that these settlements have not been equitable.
    After listening to the remarks of the tribal chairmen here 
today, there should be no doubt that the Crow Creek and Lower 
Brule Sioux Tribes suffered irreparable damages and sacrificed 
much of their way of life for the greater progress of this 
Nation. In 1982, the late Sioux author and historian Vine 
Deloria, Jr., wrote:

    Their reservations were so drastically impacted that they 
have never been able to establish viable communities since 
their lands were lost.

    In conclusion, it is my view that S. 374 offers an 
equitable and reasonable approach to providing additional 
compensation to these two tribes. Therefore, I urge the 
committee to support this bill as amended by the adjusted 
calculations. In my considered opinion, this legislation 
represents a fair and final compensation package. It also 
provides a just conclusion to an extremely difficult chapter in 
the history of the relationship between the United States and 
the Crow Creek and Lower Brule Sioux Tribes.
    This concludes my remarks. I would be happy to answer any 
questions you may have.
    [Prepared statement of Mr. Lawson appears in appendix.]
    The Chairman. Thank you very much.
    Senator Johnson.
    Senator Johnson. Thank you, Mr. Chairman.
    I want to thank Chairman Jandreau and Chairman Thompson for 
their excellent testimony here today. I want to thank you for 
traveling to Washington to appear before this committee.
    Let me ask the two chairmen, what do you think would be 
accomplished with the proceeds of the parity bill? And do you 
believe that the parity bill does in fact represent final 
compensation, at least as far as you are concerned as leaders 
of your tribes?
    Mr. Jandreau. First, Mr. Chairman, I also had a written 
statement for the record and I ask that it be made a part of 
the record.
    The Chairman. Without objection.
    Mr. Jandreau. As far as the results of what would happen 
with the trust fund and the dollars that we look to be 
extracted from that, we have done a plan that was submitted to 
Congress and was submitted to Interior. It was submitted to 
every Federal agency with whom we are involved. Under that 
plan, we have identified how we are truly trying to reconstruct 
the total infrastructure of our tribe.
    We have been successful in a large portion of that. We 
still have a long, long way to go. The dollars that we are able 
to utilize, we expend nearly $1 million a year to hire 270 
people to work in our community, providing them jobs that 
otherwise would not be able to be had. We are in the process of 
completing a new detention facility that was funded nearly 40 
percent by the tribe, and the other 60 percent with the 
Department of Justice. It was a detention facility, a 
courthouse, and a police station. Our police station had been 
condemned for the last 20 some odd years. We finally are able 
to get that completed.
    We have completed a community facility. We have completed 
an administration building that houses both the tribe and the 
Bureau of Indian Affairs offices. We have utilized our dollars 
to assist housing, to assist our wildlife program, to assist 
with the development of an opportunity to utilize some of the 
products grown on our corporate farm, to reach a new level of 
employment on our reservation by manufacturing and packaging 
popcorn.
    So the dollars that we do receive will be used further to 
assist with our education, which we also assist with; with 
those opportunities necessary for elders and assisted living 
facilities. The list goes on and on. I did not bring a copy of 
our plan with me today, but I will submit that to the committee 
for your use.
    The dollars that are necessary also allow us to delve 
deeper into economic development in its truest sense, utilizing 
the resources of the tribe to have sustainable and long-range 
employment and economic opportunities. Those are the types of 
things that we would do.
    Thank you.
    Senator Johnson. Chairman Thompson, any observations?
    Mr. Thompson. Yes; with the infrastructure money that has 
been sent down and we have received in the past, we currently 
had purchased a small school in our most outer districts. It 
houses classes one through six, and for this community out 
there which lies about 30 miles south of Pierre and another 30 
miles from Harrold, SD, this was viable for that community to 
help educate our youth and it kept them closer to home.
    Also, we established community centers in two of our 
districts, which play a vital role. These community centers 
serve almost every purpose there is from weddings to funerals 
and other community functions. Also, we have established a 
higher ed program to assist with the education of our people. 
These have been successful so far. With further funding, we 
have established long-range plans for reestablishing our farm 
and also we have looked into forming our own construction 
companies. There is a lot of thought that has gone into how and 
what direction that we want to see our tribe to go in.
    Right now, due to the financial situation that Crow Creek 
is in, it kind of stops this immediately. With this extra 
funding, we would be able to come close to being in parity with 
the local town of Chamberlain. Chamberlain unemployment rate is 
probably 5 percent, which is pretty close to the State's 
average. Am I right, Mr. Thune? Okay. Crow Creek is about 85 
percent unemployment. I think that is the highest in the State 
of South Dakota, if I am right.
    We would be looking forward to establishing new jobs to 
actually start a true economic base for our communities. If you 
look at this in that for years Government has always looked at 
the tribes as a burden. With this Act going through, this would 
help both Lower Brule and Crow Creek come into the modern world 
and be parallel to the economic base of South Dakota and other 
States.
    With that, thank you, and thank you for your time. I will 
close.
    Senator Johnson. All right. For Mr. Lawson, the amount 
called for in your testimony today is lower than the parity 
bill as introduced. I appreciate your explanation of that. 
Finally, the theory behind the GAO's use of final asking price 
in determining the range of compensation is that more 
negotiations lead to better information. However, I think it is 
apparent that this could also be substantially affected by the 
relative bargaining power of the parties.
    Could you please discuss the historical context of the 
negotiations process and how it may have affected that asking 
price?
    Mr. Lawson. Yes, sir; I tried to use asking prices that I 
thought reflected what the tribe considered its fair market 
values. Each one of the tribes when confronted with their lands 
already being flooded by 1952 in some cases, formed tribal 
negotiating committees who over an 18-month period made an 
estimate of what their valuation was for the damages that they 
would receive, and also an estimate of what the cost might be 
to rehabilitate the entire reservation, because a precedent had 
been established for extending those kinds of moneys for 
rehabilitation when Cheyenne River received its compensation 
for the Oahe Dam in 1954.
    So I tried to use the figures that tracked back to those 
numbers that were developed. Now, they were tweaked a little 
bit. After Cheyenne River, for example, got its settlement, 
there is a factor in there for the tribe's expenses in having 
to go through the negotiations, and they were compensated 
$100,000 for that.
    So those are the bases of the prices that I tried to use, 
is what the tribes before they entered a varied amount of 
negotiations, what they considered fair market values to be. 
Now, sometimes those were negotiated, and there was a series of 
negotiations. I mean, some of these values were developed in 
1954 and negotiations continued until legislation was issued in 
1958.
    Some of those asking prices turned out to be the final 
asking prices that the tribe had. Others were negotiated down 
and none of them were negotiated any higher. But that was the 
process and that is the basis of what I used for the amount of 
differences. I didn't consistently use the final asking prices.
    Senator Johnson. Mr. Chairman, I yield back.
    The Chairman. Senator Thune, do you have any questions?
    Senator Thune. Mr. Chairman, I would just, if I might, 
follow up on the question Senator Johnson asked a little bit 
earlier. I appreciate where you are coming from in terms of 
concern about whether or not this is the end, and whether or 
not there would be additional requests in the future, and 
making sure that there is finality associated with this request 
in the level that it is at.
    As you have both noted, these are very difficult economic 
circumstances on the reservations. Buffalo County is the 
poorest county in the country. Many of our reservation counties 
share a similar economic condition.
    I guess my question is this, assume we do this now and the 
infrastructure that you have both addressed in terms of things 
that you want to do to improve the quality of life and the 
opportunity on the reservation, and I want to tie a little bit, 
Chairman Jandreau, to flattening the reservations that you 
authored here.
    In terms of creating a private sector economy, it seems to 
me at least ultimately the only hope that we have long-term on 
the reservations is to create the kind of economic opportunity 
for young people there to enable them to derive a living that 
isn't dependent upon or based upon Government assistance. The 
parity acts, if the right investments are made and 
infrastructure, provides a basis of a foundation for that.
    I am just curious if you could elaborate a little bit, both 
of you, on what steps you could take to help create a private 
sector economy. It seems to me at least part of the problem in 
attracting economic development to Indian Country is lack of 
legal certainty, need for reform in the judiciary system so 
that businesses that come there know with some predictability 
where they are going to be dealing with disputes and conflicts 
and that sort of thing.
    Can you just elaborate a little bit on that? Because I 
think it gives us some direction in terms of if we do this now 
and to make sure that we are not coming back again and asking 
Congress, that the permanent, good paying, private sector jobs 
that we need to bring to the reservations, what steps you all 
might be taking or that could be taken.
    Mr. Jandreau. Thank you.
    We have probably the lowest unemployment rate in Indian 
Country, and it is because we have taken our resources, both 
those resources we raised from land leases from our corporate 
farm, from other activities. We have taken those incomes and 
tried to create to the greatest extent possible employment 
opportunities there on the reservation.
    We just recently moved into the establishment of a popcorn 
packaging and popping plant. We are in the final stages of 
completing the building to start that activity. That is as a 
result of utilizing those assets and those products that are 
renewable on the reservation.
    As far as private sector involvement, we are tied into a 
number of different companies in regard to doing our own 
construction on the reservation, utilizing, leveraging the 
dollars that we receive to do these kinds of things.
    The more that we are able to do that and to create an 
economy there on the reservation, the more self-sufficient we 
are going to become. We are dealing with a company out of 
Oklahoma on our cattle operation. We are doing some things that 
have to do with the type of beef that is produced, and so we 
have an arrangement with an organization called DuckSmith Farms 
of Enid, OK. It is going to be at least a 3- to 5-year 
arrangement and we are doing that today.
    With our popcorn process, we are dealing with a former 
singer, well, I guess he is still a singer, Chubby Checker and 
some of his ventures. It all seems to make the process work, to 
develop those opportunities with individuals who have the 
capability to move products, and that kind of activity.
    We are not about just wanting the dollars to have the 
dollars. The dollars, if they do not work for us, are not at 
all justified in receiving. It is more than just for damages. 
It is about allowing us to create lifestyle with the remnants 
of land that are left, and trying to, a part of the process is 
we have replanted probably 1.5 million trees on the 
reservation, trying to create reforestation projects and trying 
to deal with the ecological problems that occur when areas of 
the country are denuded of timber.
    So our desire to receive this last shot at getting our 
trust fund expanded is about the whole future of our tribe and 
what happens as far as our own individual sustainability and 
capability to become economically independent, economically 
self-sufficient. You know, our people don't like to always come 
back to the trough either. It is wanting to get compensated for 
these losses with adequate justification that we can move 
forward with these dollars without always having to knock at 
the door.
    I don't know how to say it.
    Senator Thune. That is great.
    Chairman Thompson, if you want to add just what steps can 
be taken or are being taken that would help create permanent 
jobs on the reservations.
    Mr. Thompson. Well, both you and Mr. Johnson have been to 
Fort Thompson. We have two major highways that cross right in 
the middle. To me, this is the crossroads of South Dakota. The 
vision that I see, I don't see despair there. I see 
opportunity. I see a lot of it. There is private sectors in 
Fort Thompson. We have a small grocery store, which is 
privately owned; a convenience store. We have a lot of 
gentlemen who do independent contracting, carpentry businesses 
and so on.
    As far as the plan goes, I really thought about that, and I 
thought about how I would be able to benefit our people the 
most. A lot of it is going to come down to reeducating them 
into proper business practices, to make them where they are 
understandable of how business is conducted on the outside of 
our reservations, and apply that back to our communities and 
work on developing programs to help with them, to establish 
their businesses that will end up being around and being major 
players into our communities again.
    Senator Thune. Okay. Good.
    Tim?
    Senator Johnson. [Presiding.] Thank you, Senator Thune.
    I want to thank the panel. Senator McCain has asked that I 
chair this hearing for the remainder of the hearing, and so I 
will be doing that.
    I do appreciate both Chairmen Jandreau and Thompson 
indicating that the goal of the tribe is to create a much 
stronger, more robust private sector economy on the 
reservations in some instances through tribally owned 
enterprises, but in other instances through individual 
entrepreneurship of tribal members. I think that has to be so 
important as we work in a public-private way to find ways out 
of this what has been an unending cycle of poverty on both of 
these reservations.
    I applaud your leadership and your vision for the future. 
It is my hope that we at the Federal side can live up to our 
treaty and trust responsibilities, to work with you to create a 
greater climate of hope and opportunity and fairness in Indian 
Country. So thank you very much for your testimony today.
    Dr. Lawson, thank you for your work as we struggle to find 
the most logical and equitable level of trust fund funding here 
on this legislation. So thank you very much.
    We will have the next panel come forward. Again, welcome to 
Chairman Harold Frazier of the Cheyenne River Sioux Tribe, and 
to Sharon Vogel, who is the manager for Tribal Ventures 
project. This portion of the hearing is given over to a 
discussion of S. 1535, the Cheyenne River Sioux Tribe Equitable 
Compensation Amendments Act of 2005. That legislation would 
allow the tribe to use money deposited in their settlement 
trust fund to compensate individual landowners and their heirs, 
and also to use receipts of the Western Area Power 
Administration, or WAPA, to make the interest on the fund 
available to the tribe at the start of the next fiscal year, 
rather than 2011, as is required under existing legislation.
    Third, it would provide a methodology based on the Lehman 
Government bond index for calculating the total amount at which 
the trust fund is to be capitalized.
    I want to again thank you for your leadership for the many 
things that you have already done providing leadership on the 
Cheyenne River Tribe for your people in that area. We welcome 
you here today.
    We will begin first with Chairman Frazier.

  STATEMENT OF HAROLD FRAZIER, CHAIRMAN, CHEYENNE RIVER SIOUX 
                             TRIBE

    Mr. Frazier. Thank you, Senator Johnson. I would like to 
begin by thanking you and Senator Thune for cosponsoring our 
legislation and also Senators McCain and Dorgan for holding 
this hearing.
    I also want to recognize and acknowledge Freddie LeBeau, 
who is one of our elders and one of the original Oahe 
landowners whose land was taken back in the 1950's.
    In 1948, the United States Army Corps of Engineers began 
construction of Oahe Dam and Reservoir project, a part of the 
Pick-Sloan Program. The program caused massive relocation of 
our tribal members, including relocating our tribal 
headquarters. We lost over 104,000 acres of land and many of 
these lands were tribal and allotted lands within our 
reservation.
    This dam also devastated the tribe's economy and our way of 
life. More than 181 tribal families, or about 30 percent of the 
tribal population, were forced to move. We lost our most 
valuable and fertile lands, and our traditional hunting-
gathering ceremonial grounds. In 1954, Congress authorized 
payment of $10.6 million to the tribe for compensation, less 
than half of the $23.5 million sought by the tribe.
    In later years, various reports confirmed that the tribe 
had not been fairly compensated for its losses. In 2000, 
Congress enacted the Cheyenne River Sioux Equitable 
Compensation Act as Title I of Public Law 106-511. The act 
created the Cheyenne River Sioux Tribe Tribal Recovery Trust 
Fund to further compensate the tribe. Under current law, the 
fund will not be capitalized until October 1, 2011.
    S. 1535 would make three amendments to Public Law 106-511. 
The first amendment is to take care of our landowners who lost 
land. It would allow the tribe to use the interest from the 
trust fund to pay additional compensation to tribal members or 
their heirs who lost over 46,000 acres due to the construction 
of the Oahe Dam.
    Those landowners have never been provided fair or adequate 
compensation for their losses. Public Law 106-511 does not 
allow the tribe to use any of the proceeds from the trust fund 
to provide compensation to them. In order to respond to the 
needs and wishes of our citizens and consistent with tribal 
sovereignty and the compensatory purpose of Public Law 106-511, 
the tribal council wishes to devote some of the portion of the 
interest from the trust fund to provide additional equitable 
compensation to the tribal member landowners and their heirs.
    This proposed amendment is revenue neutral for the Federal 
Government. As such, compensation would be provided out of the 
trust fund interest and would not require any additional 
appropriation for the landowners.
    The second purpose of S. 1535 is to make earnings from the 
trust fund available sooner. Public Law 106-511 as enacted 
essentially gives the tribe an IOU from the United States 
payable on October 1, 2011 for losses it suffered in the 1950's 
and that it continues to suffer from today.
    The bill would capitalize the trust fund sooner using 
receipts of the Western Area Power Administration, instead of a 
one-time appropriation in 2011. This method was used to 
capitalize trust funds in the other tribal equitable 
compensation acts enacted prior to Public Law 106-511.
    Receipt of the money sooner would allow the tribe to 
address significant unmet needs in the areas of economic 
development, infrastructure, education, health and social 
welfare programs. Capitalizing the fund sooner would also 
reduce the interest to be paid by the United States to the 
tribe on the $290 million now due in 2011.
    The third and final purpose of the bill is to make a 
technical amendment to provide a methodology for calculating 
the total amount of which the trust fund is to be capitalized. 
Under current law, Treasury is to deposit into the trust fund 
some $290 million plus the interest that would have been 
accrued had the fund been fully invested in October 2001, but 
the law provides no methodology to calculate those earnings. 
However, S. 1535 provides a methodology using a Government bond 
index.
    For the reasons I have stated, I respectfully ask on behalf 
of the Cheyenne River Sioux Tribe that this committee approve 
of S. 1535 and send it to the Senate for consideration by that 
body as soon as possible.
    Thank you, and I would be glad to answer any questions you 
may have.
    [Prepared statement of Mr. Frazier appears in appendix.]
    Senator Johnson. Thank you, Chairman Frazier.
    Ms. Vogel.

     STATEMENT OF SHARON VOGEL, CHEYENNE RIVER SIOUX TRIBE

    Ms. Vogel. Thank you.
    Good morning, Senator Johnson and Senator Thune, I too 
would like to thank you for the opportunity to provide 
supportive testimony for the tribe's efforts to obtain 
immediate access to its funds under Public Law 106-511, which I 
will refer to as JTAC funds, to implement the tribe's JTAC 
plan.
    My name is Sharon Vogel. I am an enrolled member of the 
Cheyenne River Sioux Tribe and the administrative manager of 
the Tribal Ventures Project. Tribal Ventures is a planning 
project between the Cheyenne River Sioux Tribe and the 
Northwest Area Foundation out of St. Paul and Minneapolis, MN. 
The process was to develop a 10-year plan to reduce poverty and 
increase prosperity for the families residing on our 
reservation.
    My submitted testimony has a description of the process 
that we undertook on the reservation to look at poverty, 
collect the thoughts of our people, and decide how we would 
proceed with reducing poverty. I would be happy to take 
questions on that aspect of my testimony, but I will use my 
time this morning to focus on the ways our tribe is ready to 
proceed with economic development.
    We have just completed an 18-month strategic planning 
process that resulted in a 10-year commitment to reduce 
poverty. The Northwest Area Foundation has invested $9.5 
million in our effort to reduce poverty. That is a big 
investment from a major foundation.
    As a result, we have a concrete plan to strategically move 
forward to reduce poverty conditions on our reservation. The 
only thing holding us back from true economic development from 
investment and job creation is the lack of capital. I want to 
be clear: We truly are ready to move economic development 
projects forward. We have development plans for infrastructure 
and economic development that are ready to go. We need capital 
to start our economic engines.
    Let me go over an example of projects or programs we are 
ready to undertake. We have identified two priorities. One is 
the infrastructure development and the second is education. 
When we were holding our planning sessions, we also undertook a 
project called Young Voices. We interviewed over 600 young 
adults from 18 to age 30 on our reservation. We found that 
while they wanted to live on the reservation, there were no 
opportunities. Job prospects and educational opportunities are 
much too limiting. As a result, we would like to use our JTAC 
funds to train our young people, provide them with scholarships 
for education, as an incentive to stay on our reservation and 
carry on the culture of our people.
    Our population is overwhelmingly young. Almost one-half of 
these are under 25 years of age. We must act as soon as 
possible to ensure that we don't lose a generation because of 
the lack of opportunity. We have identified that economic 
development requires infrastructure. While the Federal 
Government has an obligation to the tribe to provide roads, 
drinking water, water treatment, and other infrastructure, the 
tribe has a role, too.
    The JTAC funds would be used to leverage infrastructure 
improvements. For example, the tribe has initiated discussions 
with Merrill Lynch to use JTAC funds to finance an advanced-
funded road construction effort similar to the advanced-funded 
road project that Standing Rock Sioux Tribe did using some its 
JTAC funds. The more infrastructure we have, the better our 
standing will be. We will no longer start with a deficit when 
negotiating development for our tribe.
    With a developed infrastructure, we will be able to use 
that as a bargaining chip when pursuing investments. Of course, 
this is just an example of several plans that we have ready to 
implement. We also plan to create a cultural center, to enter 
the energy industry with wind turbines, to start a credit 
union, to expand our hotel, and to develop tourism. 
Additionally, we want to create partnerships with private 
entrepreneurs who realize the opportunity Cheyenne River 
presents.
    We can no longer wait to develop our economy, communities 
and families in a piece-meal fashion. We must have multiple 
strategies that are linked to establishing a stable economy, 
reducing poverty and improving the quality of life for our 
reservation families. We truly need access to the resources 
promised under JTAC.
    In summary, I would like to stress that JTAC funds will 
result in, one, increased assets of the tribal communities and 
our families. It will develop economic opportunities for our 
families, provide educational opportunities for our tribal 
members. We will have development of comprehensive social and 
health programs and we will increase the capacity of our tribal 
government to develop long-term strategies that will result in 
sustainable economic, community and social development.
    I would also like to note that payments to individual 
landowners such as Mr. LeBeau, our elder that is accompanying 
us, that the tribe is seeking, will also do a lot to reduce 
poverty on the reservation. Obviously, the payments will 
directly counteract the loss of assets aspect of the Oahe 
project. Combined with financial literacy, education and other 
advising, it will eliminate long-term poverty for many 
reservation families.
    Tribal landowners and heirs who receive these payments will 
have the capital to invest in both their families and their 
communities. Some may choose to become business owners that 
employ other tribal members, and some may choose to use their 
funds for their or their families' education.
    I would like to address one final issue. One question you 
may have is why should we be able to access these funds now, 
rather than five years from now. There are several good reasons 
for opening up the interest on our compensation fund. First and 
foremost, it is just a clear issue of time. We have 29 original 
landowners, all of whom are well into their eighties. Frankly, 
some of them may not be around in 5 years to benefit from the 
funds. These lands were taken in 1948, 56 years ago. They have 
been waiting long enough.
    Second, our tribe has urgent needs to address now. We can't 
afford 5 more years of missed opportunity. We will have missed 
the opportunity to put 500 people or more through our workforce 
development programs. We have people who need homes to live in 
today. We have hundreds of young adults who want to attend 
college, but don't have the financial resources to do so. We 
have the need to create a viable infrastructure today.
    These are burning needs and will only be more costly to 
meet further down the road. More importantly, over the next 5 
years, we will have 1,000 children born on the reservation, and 
780 of these babies will be born into poverty. Every year gone 
is a year of missed chances, and we can't afford it.
    Senator Johnson, members of the committee, thank you for 
scheduling this hearing to learn about how we plan to improve 
our tribe with our much-needed JTAC funds. I will be happy to 
take any questions you may have.
    Thank you.
    [Prepared statement of Ms. Vogel appears in appendix.]
    Senator Johnson. Thank you for your testimony.
    Senator Thune has another obligation, another committee 
hearing to attend to, and he has had to excuse himself. I do 
express my appreciation to Senator Thune for his work on these 
issues.
    It is my understanding, Chairman Frazier, that at the time 
that the trust settlement was reached, the legislation was 
passed, all of the interest income from the trust fund after 
2011 would be directed to the benefit of the tribe.
    The tribe now believes that it ought to have the discretion 
to redirect some of that revenue to compensate individual 
landowners, given the fact that as I understand it, about 45 
percent of the land that was flooded did indeed belong to 
individual landowners, as opposed to being tribally owned. Is 
that a fair and correct observation?
    Mr. Frazier. Yes; that is correct.
    Senator Johnson. I appreciate, Chairman Frazier, that you 
have been a tireless advocate for your tribe, and I appreciate 
your commitment to rectifying damages incurred by your people 
almost 50 years and which continue on today. What, if any, 
compensation was provided to those individual landowners when 
the initial cash settlement was reached in 1954?
    Mr. Frazier. On behalf of the landowners, I know when I 
visit with many of them, a lot of them were not happy with the 
amount of money that they received. I think there are reports 
showing that they received around $20 or $21 an acre, when 
right across the river the non-Indian population received over 
$43 to $45 an acre. Many of them just are not satisfied. I 
don't blame them. I personally have experienced the loss of a 
home, some land, and that is why I am here advocating on their 
behalf. I think that in my opinion, as well as theirs, that 
they were not fairly compensated at the end of the 1950's.
    Senator Johnson. It is clear that this legislation is a 
major priority for you and for the tribe. I think one of the 
questions that might occur on the part of some of my colleagues 
on the Committee is that only 6 years ago when the tribe agreed 
to the Equitable Compensation Act, and I appreciate that you 
can't speak for others who made decisions at previous times, 
but 6 years ago that legislation prohibited any per capita 
payments to members of the tribe.
    So why do you think that decision was made by the tribe at 
that time, versus the interest now that the tribe has in 
allowing at least some of this revenue to be redirected toward 
private landowners?
    Mr. Frazier. I can't speak and I don't know what the 
discussion was back then. I do know that the way I understand 
the per capita is that every member of the tribe would be 
getting paid. We look at this as not a per capita payment 
because not every member is going to get paid, just the ones 
who have lost land in this taking. They would be the only ones 
that would be compensated for their losses.
    Senator Johnson. How many landowners remain to this day, 
roughly?
    Mr. Frazier. I believe there were originally 420; now there 
are 29.
    Senator Johnson. And it would be the 29 plus the heirs of 
anybody who did own original land, is what the tribe envisions?
    Mr. Frazier. Yes.
    Senator Johnson. I appreciated your participation in the 
tribal listening session that I held on economic development 
this past April in South Dakota. I think we both share a strong 
vision for the future of your tribe and all our South Dakota 
tribes. I wondered if you could discuss briefly the importance 
of this trust fund to the tribe and the process the tribe will 
pursue to ensure that the trust fund effectively serves the 
development of the tribe. How are you going about that?
    Mr. Frazier. One of the things, as Sharon, Ms. Vogel, she 
has been out to the community several times, to every community 
on our reservation, and gotten the comments of our members. Two 
of the things that really stick out in my mind that are much 
needed on our reservation is capital and infrastructure. I 
believe that if we are ever going to get anywhere in dealing 
with economic development, that is what is needed. That is 
something that is always top.
    I just want to make a quick point. Right now, we are in the 
process of refinancing our buffalo program to the amount of $8 
million. The bank is requiring our tribe, and it is pretty much 
collateralized 300 percent, and yet it is not enough. So I know 
that we have a huge need for capital, so we don't have to deal 
with banks and just pretty much give up the whole farm for a 
loan. So that is something. We know what our needs are. We have 
to plan. If we get the money, we can implement the plan.
    Senator Johnson. Finally, Chairman Frazier, I understand 
this legislation is supported by a resolution of the tribal 
council. Could you please speak to the support of this 
legislation among the tribe and if it is supported by the 
tribal elders?
    Mr. Frazier. Several times last year as well as this year, 
I have discussed this with our members throughout our 
reservation, and every year I have been giving a tribal state 
of the tribe address. Each time, these initiatives are brought 
up on what the tribal council and the tribal government is 
doing. Each time, I have not really heard any negative comments 
from the members of our tribe.
    Senator Johnson. Ms. Vogel, thank you for your testimony. I 
am struck by your observation that of the 1,000 children to be 
born on the reservation in the coming years, that 785, roughly, 
will be born into poverty.
    Ms. Vogel. Yes.
    Senator Johnson. And with all the complications and the 
disadvantages that go with that. So the need to address these 
issues is truly urgent.
    I appreciate the point you made in your written testimony 
about the potential payments counteracting the loss of assets 
aspect of poverty. In terms of the causes of poverty, could you 
please speak to the cultural and psychological effects related 
to the loss of individual lands?
    Ms. Vogel. Well, when our tribal council held the local 
hearing for our tribal government officials to hear from 
original landowners and other individuals that were interested 
or had recommendations about this legislation, I recall the 
testimony of two of our elders that talked about the loss that 
they had, and the loss they had on their children and their 
grandchildren. They owned a piece of land. They were self-
sufficient on that piece of land. And when they lost that, they 
couldn't replicate that wealth that they had developed on that 
land. They had a home. They had a garden. They had livestock. 
And they made improvement to that land that they owned, that 
they had planned on handing down to their children.
    When they lost that, they were then relocated and they 
could not, that wealth was gone. And there wasn't enough 
compensation to rebuild that wealth.
    So they ended up being in poverty, and their children and 
their grandchildren lived in poverty because of that loss. 
That, I think, is one cultural wrong. We are a proud people. We 
have a history of self-sufficiency. The poverty conditions were 
harsh. It was hard to get out when you live in a place of 
poverty, when there is no opportunity. So that was the reality. 
That was the aftermath of the loss.
    Senator Johnson. Sharon, what sort of financial literacy 
programs are being implemented within the tribe and tribal 
membership to help landowners or their heirs invest and build 
the economy of the Cheyenne River? Obviously, we want financial 
resources to be available to people, but we want to be 
confident those resources are being put to good use.
    So what is your group doing to help ensure that that would 
be the case?
    Ms. Vogel. There are several entities that provide 
financial literacy and consumer education on Cheyenne River. 
One is the Four Bands Community Fund. In addition to providing 
the business training for entrepreneurs, they also provide an 
IDA, individual development account, and that comes with a 
curriculum of education.
    We with the Tribal Ventures Poverty Reduction Plan will 
partner with the Four Bands Community Fund to where we, too, 
will offer reservation-wide financial literacy training, using 
a curriculum that was developed for Native American families 
that was funded in part by Fannie Mae. We also propose that we 
will have a youth IDA so that our young people can start saving 
for scholarships.
    But in addition, there are other reasons why it is 
important for us to have financial literacy on Cheyenne River. 
One is predatory lending. We want to make sure that our people 
are protected from predatory lending and that they are better 
consumers, they make more informed decisions.
    So the value of financial literacy is not just limited to 
just making sure that these individuals that when they receive 
the compensation that they spend that wisely. It is for all of 
our members across the reservation.
    Senator Johnson. Well, thank you, Ms. Vogel, and I thank 
both of you for your testimony. It obviously was very important 
that we make your testimony on the record here for all the 
members of the committee. We have bipartisan staff here. I 
think we all feel that we have gained from your testimony as 
well. It was important that we go through this process in our 
effort to move this legislation along.
    So I want to thank you. I also want to thank others, 
including elders and members of the tribes who have traveled 
long distances and have gone out of their way to be here today. 
We want to welcome you as well.
    So with that, we are going to wrap up this hearing, but we 
will redouble our effort to work in a bipartisan fashion with 
Senator Thune, with Chairman McCain, Vice Chairman Dorgan, to 
see what we can do to take into consideration your testimony 
here today and to use that as support for this legislation.
    So thank you very much. And with that, this hearing is 
adjourned.
    [Whereupon, at 11:12 a.m., the committee was adjourned.]


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                            A P P E N D I X

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              Additional Material Submitted for the Record

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Prepared Statement of Michael B. Jandreau, Chairman, Lower Brule Sioux 
                                 Tribe

    Mr. Chainnan, members of the committee, thank you very much for the 
opportunity to testify on the Tribal Parity Act, S. 374. I am Michael 
Jandreau, the chairman of the Lower Brule Sioux Tribe. I have been 
chairman of the tribe for 27 years, and served on the council for 7 
years before being elected chairman.
    The legislation before you this morning is of great importance to 
our tribe and our people. I would like to thank Senator Thune 
introducing the legislation, and Senator Johnson for cosponsoring. I am 
joined today by members of our Council, other tribal members, and our 
counsel, Marshall Matz with the law firm of Olsson, Frank and Weeda.
    The Lower Brule Sioux Tribe is a constituent band of the Great 
Sioux Nation and a signatory of the Fort Laramie Treaty of 1851 and the 
Fort Sully Treaty of 1865. The reservation is approximately 230,000 
acres in central South Dakota. The Missouri River establishes the 
eastern boundary of the reservation. Historically, the Missouri's 
bottomlands provided food, wood for shelter and fuel, forage for cattle 
and wildlife, and plants utilized for medical purposes.
    In 1944, Congress enacted the Flood Control Act, which authorized 
implementation of the Missouri River Basin Pick-Sloan Plan for water 
development in the Missouri River Basin. Two of its main-stem dams, 
Fort Randall and Big Ben, flooded over 22,000 acres--approximately 10 
percent of the entire reservation and our best bottomland. In addition, 
it required the resettlement of nearly 70 percent of the resident 
population. For the Lower Brule Sioux Tribe, the human and economic 
costs have far outweighed any benefits from the Pick-Sloan project.
    The Congress responded in 1997 with the Lower Brule Sioux Tribe 
Infrastructure Development Trust Fund Act, Public Law 105-132. This 
legislation has been of enormous benefit to our people. It established 
a Trust Fund of $39,300,000 for the benefit of the tribe. With this 
Fund, and using leverage, we invested over $27 million in our entire 
infrastructure. We have built:

  <bullet> \\\\\\A new community center,
  <bullet> \\\\\\A tribal administration building,
  <bullet> \\\\\\A detention center with a courthouse and police 
        department, and a
  <bullet> \\\\\\Wildlife building.

    We have also used the fund to improve tribal housing and employ 
250-270 individuals [both youth and adults] in the summer months. In 
short, the trust fund is allowing us to improve our economy and the 
quality of life on the reservation in many ways.
    The legislation before you today, S. 374, is intended to supplement 
our existing trust fund. It passed the Senate three times in the 108th 
Congress, once as an independent bill and twice as an amendment to 
other bills. All three died in the House. The Parity Act was again 
reported by this committee on June 30, 2005, but has yet to come before 
the entire Senate for consideration.
    Mr. Chairman, in all honesty, I am completely baffled by the recent 
GAO report entitled ``Analysis of the Crow Creek Sioux and Lower Brule 
Sioux Tribes' Additional Compensation Claims''. It is the most 
frustrating Government document I have read in all of my years as 
chairman.
    Essentially, the GAO makes two criticisms of the Tribal Parity Act 
and the approach used by our consultant, Dr. Mike Lawson. First, the 
GAO criticizes us [and it is, in fact, the tribes that the GAO is 
criticizing] for not using ``the final asking price''. Second, the GAO 
is indignant that Dr. Lawson suggests one level of compensation, and 
not a range. I would like to make several points in response:
    No. 1. The Congress never established the final asking price as the 
standard that must be used for determining what is fair compensation 
under the Flood Control Act. In a business transaction when two parties 
are negotiating with equal standing, I can understand how the last 
asking price would indicate the true feelings of the parties. That is 
clearly not the case here. There was no ``negotiation''. Our land had 
been flooded and we were trying to do the best we could. The Congress 
should look at all of the facts when trying to evaluate the appropriate 
level of compensation and not be blinded by the last offer.
    No. 2. GAO criticizes Dr. Lawson for not providing a range of 
reasonable compensation levels based upon different policy assumptions, 
but then the GAO does the same thing and fails to give you, the 
Congress, a range of possibilities.
    No. 3. Beyond the numbers, there is a tone to the GAO report that 
is deeply disturbing. Dr. Mike Lawson is a nationally recognized expert 
on the Flood Control Act and the tribes affected by that legislation. 
Yet, the GAO does not even mention his name anywhere in the document. 
Dr. Lawson is a consultant to two sovereign Indian tribes. The GAO has 
every right to disagree with him, or with me, or with anyone else. But 
I would hope they also recognize that a mechanical application of a 
standard formula may not apply in all cases. The tribes are not one 
size fits all.
    Our best land was taken to benefit America. Our tribe is not 
seeking charity; we are seeking justice and parity with other Missouri 
River tribes that have been adversely affected by the Flood Control 
Act. There has been no one, clear policy decision by the Congress on 
how to determine what is just and fair compensation for Missouri River 
tribes. The Tribal Parity Act is not based upon the ``highest asking 
price''. And we are not seeking parity with the Santee Sioux, who has 
received the highest amount on a per acre basis. We are seeking what 
Dr. Lawson, the recognized national expert, believes to be fair and 
owing from the United States to the people of Lower Brule. The Congress 
has the power and the obligation to make a fair policy decision. You 
are not bound by any one formula or test, as, I believe, the GAO would 
have you believe.
    This legislation would, if enacted, add to our trust fund and allow 
us to aggressively attack the many human challenges we face on the 
reservation. Further, we could more adequately build our infrastructure 
to the point that it would be possible to attract a private sector 
economy.
    As you know, sovereignly is key to tribal existence. But, in the 
long run, for sovereignty to survive, there must be some type of 
economic sovereignty as well. We must develop private sector economy 
and jobs for our people. The legislation before you will allow us to do 
all of that. We will be able to improve education, health care, 
housing, transportation, the justice system, and so many other 
services.
    As much as we need this legislation, let me stress that we are not 
asking for a handout. This legislation is intended to provide more 
complete compensation for the loss of our best land and other costs 
suffered by the tribe. The Army Corps of Engineers has estimated that 
the Pick-Sloan project's overall contribution to the U.S. economy 
averages $1.27 billion per year. The Tribal Parity Act must be seen in 
that context.
    The Lower Brule Sioux Tribe is making great progress. Our 
unemployment rate is the lowest of any reservation in South Dakota, but 
it is still much above the national average. My goal as chairman is to 
see Lower Brule fully participate in the U.S. economy while maintaining 
our heritage and identity. It is very painful for me to read The World 
Is Flat by Thomas Friedman and realize that globalization is passing 
over Lower Brule and the Indian reservations of the United States. 
China and India, for example, are revolutionizing their economy while 
Indian reservations are essentially ignored.
    The reservations are a part of the United States, but we are not a 
part of the U.S. economy. Mr. Chairman, I am not here today to outline 
a comprehensive agenda for Lower Brule or for tribes, generally. I am 
here to say that the Tribal Parity Act is the essential next step to 
improving the quality of life at Lower Brule and it is completely 
justified. We urge you to finally file the committee report and bring 
it to the floor of the Senate as soon as possible. It has been exactly 
2 years since I first testified on the Parity Act. Our tribe needs and 
deserves the benefits of the Tribal Parity Act, as adjusted to reflect 
a more accurate mathematical computation.
    We urge the committee to amend S. 374 to provide $129,822,085 of 
additional compensation to Lower Brule and $69,222,085 of additional 
compensation for Crow Creek. These figures are far lower that our 
highest asking price and are lower than the amount provided to the 
Santee. It is, in short, fair and just compensation for the complete 
disruption to our reservation life and the taking of our best bottom 
lands. Thank you. I would be pleased to answer any questions.

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  Prepared Statement of Freddy LeBeau, Vice Chairman Oahe Landowners 
                              Association

    My name is Freddy LeBeau. I am an enrolled member of the Cheyenne 
River Sioux Tribe, and a resident of the Cheyenne River Sioux 
Reservation. I am one of the tribal members who lost land due to the 
construction of the Oahe Dam and the acquisition of over 44,000 acres 
of tribal members' lands by the United States for the Dam. I am also 
the vice chairman of the Oahe Landowners Association, a group comprised 
of the tribal member landowners who lost lands on our reservation due 
to the Oahe Dam Project. So I am providing this statement not only for 
myself, but also for all of the surviving tribal member landowners who 
lost their lands due to the Dam, and for their heirs. Today there are 
only 29 surviving tribal members who lost their lands because of the 
dam.
    We have waited for almost 60 years to tell our story. When the 
corps took our lands in 1948, we had no choice. The lands weren't 
acquired through agreed upon sales. No one asked if we wanted to sell 
our lands, and we would not have agreed to any sale. The lands were 
simply taken from us to benefit other people. We didn't experience 
sever flooding on the reservation, and the project was of no use to us. 
But the powers that be decided they needed a flood control project, and 
so they authorized a project that required the acquisition of Indian 
lands and the relocation of Indian people.
    I fought for this country in World War II. I spent about 4 years in 
the U.S. Navy in the South Pacific. During the war, I learned that some 
fee lands on the reservation totaling 200 acres had been foreclosed on 
and could be bought. So I sent money to my father and he bought the 
land for me. After the war, I built the land up, raised livestock on it 
and supported my family off of it. I wanted to live there the rest of 
my life. But the Oahe Dam put a stop to that. The Government offered me 
$6,000 for the land. It wasn't enough, but I would have had to go to 
court to get fair compensation, so I accepted the check and signed it 
under protest. I fought for the U.S. Constitution and the American way 
of life, but then the Federal Government turned around and took my land 
and didn't provide fair compensation.
    We landowners know that we were not fairly compensated. We were 
paid less for our lands than the Government paid for comparable lands 
off of the reservation. But for the most part we took whatever the 
Government offered us, because we didn't want to hire lawyers and go to 
court and take our chances with a judge.
    In total, the U.S. Government acquired over 44,000 acres of 
reservation lands from tribal members. Many of us, like myself, had to 
move our families elsewhere and start again. Many of us never got over 
losing our lands. And many of us found that our new lands weren't as 
good as the lands we were forced to leave to provide flood control for 
other people.
    The tribe lost lands too, and it was not fairly compensated either. 
Congress recognized this when it enacted Public Law 106-511, the 
Cheyenne River Sioux Equitable Compensation Act, in 2000. I have a 
problem with that law, however. It says the Federal Government acquired 
some 104,000 acres of land of the tribe for the Oahe Project. But that 
number includes the 44,000 acres taken from tribal members. Only about 
60,000 acres were tribal lands.
    Public Law 106-511 provides over $290 million to the tribe, plus 
interest, to compensate it for its losses, but it doesn't provide any 
compensation to the tribal member landowners for our losses. In fact, 
it says the tribe can only spend the earnings from the Trust Fund for 
certain things, and it doesn't allow the tribe to spend one dime to 
provide any additional compensation to tribal member landowners.
    The landowners don't think this is fair, and our tribal government 
agrees with us. So they have joined with us to ask Congress to change 
the law so that they can provide us just compensation. We are not 
asking for a windfall or a handout--but only for just compensation. We 
urge Congress to allow the tribe to use its earnings from its Trust 
Fund to provide us the compensation we deserve.
    One final thing. Right now, the tribe won't receive any of the 
Trust Funds until October 2011. The surviving landowners have waited 
almost 60 years for just compensation, and we don't want to wait until 
2011. Some of us won't make it to then. We'd like to get our 
compensation now.
    Thank you for your consideration of this bill.

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Prepared Statement of Lester Thompson, Chairman, Crow Creek Sioux Tribe

    Mr. Chairman, members of the committee, thank you very much for the 
opportunity to testify on the Tribal Parity Act, S. 374. I am Lester 
Thompson, the chairman of the Crow Creek Sioux Tribe. It is an honor 
for me to be here with Chairman Mike Jandreau. Chairman Jandreau is the 
most senior chairman in our State and in the Great Sioux Nation. I am 
the most junior chairman in the Sioux Nation, having been elected 
chairman in April. I took office, along with a new tribal council, in 
May 2006.
    I also would like to thank Senator Thune for introducing the Tribal 
Parity Act and Senator Johnson for cosponsoring. This legislation 
before you is of extraordinary importance to our tribe. I am delighted 
that it is the subject of my first appearance before Congress.
    The members of the Crow Creek Sioux Tribe were relocated after 
Little Crow's War in Minnesota. People were transported on barges from 
Minnesota stopping at Santee and then we moved on to Crow Creek. Many 
lives were lost along the way. We are members of the Isanti and 
lhanktowan divisions of the Great Sioux Nation. We speak Dakota and 
Nakota dialects. We have three districts on the reservation, and are a 
treaty tribe.
    The Crow Creek Sioux Tribe consists of 225,000 acres located in 
Central South Dakota. Our Western boundary is the Missouri River. In 
1944, when the Congress enacted the Flood Control Act and authorized 
implementation of the Missouri River Basin Pick Sloan Plan for water 
control, two of the dams, Fort Randall and Big Bend, flooded over 
16,000 acres of our best and most productive bottom land. It was also 
the very land where a majority of our people lived. The cost to Crow 
Creek in human terms, and economically, was astronomical.
    We lost:

  <bullet> \\\\\\Our hospital;
  <bullet> \\\\\\Housing units;
  <bullet> \\\\\\Tribal Buildings and other structures;
  <bullet> \\\\\\Schools;
  <bullet> \\\\\\Businesses;
  <bullet> \\\\\\Roads;
  <bullet> \\\\\\Acres of waterbed and timberland, and domestic and 
        ranch water systems;
  <bullet> \\\\\\Food sources, such as fishing, hunting, and 
        subsistence farming; and
  <bullet> \\\\\\Ceremonial grounds and traditional medicines.

    Our way of life was altered irreparably. Before the dams, the 
lifestyle was simple. The people worked in a community garden. In the 
evenings, the people would gather to share that day's catch of fish and 
the food gathered. They would meet to visit, pray, sing, and dance 
where the Bureau officials could not observe. The children attended 
boarding school within walking distance of their homes and family. The 
way of life, the social interactions, the camaraderie and sense of 
being one people--one tribe, was destroyed by the environmental changes 
and forced relocation. The hospital and school were never replaced. The 
traditional medicine that grew solely in the waterbed and the 
Ceremonial Grounds are irreplaceable.
    When the relocation took place, some purchased homes with the $500 
compensation received. Others received homes in low rent housing--a 
project constructed of 50 units in an area smaller than a city block.
    The elders observed that this is when the change occurred. People 
started to watch each other, argue with each other, begrudge each 
other, and become disgruntled. With the loss our school, the next 
option was the Immaculate Conception Boarding School, 13 miles away. 
The students were no longer able to walk to their homes and families on 
a daily basis, and those teaching were not people who believed in the 
heritage, culture, and customs of the students. Abuses that occurred in 
Catholic Boarding Schools are well documented historically, and I will 
not expand, except to say that the loss of our school negatively 
impacted our people on a much larger scale. This impact on the social 
development of our people has rippled down through generations.
    Our reservation is in Buffalo County, SD. Buffalo County is the 
POOREST COUNTY IN AMERICA, and also has the highest cancer rate in the 
Nation. Many Elders believe that the building of the dam and disturbing 
the earth and the water flow released death in the air.
    Chairman Jandreau has spoken eloquently regarding the desire to 
join the global market and seeking economic parity with the rest of 
America. I strongly agree and support those goals. But at Crow Creek, 
we must first achieve parity with Chamberlain, SD, just 25 miles away. 
A small town of just 3,000 people, Chamberlain's unemployment rate is 
approximately the State average--5 percent, while the rate at Crow 
Creek is over 80 percent.
    For us to move forward, we must improve our infrastructure and 
create an environment that is conducive to human and economic progress. 
The Crow Creek Sioux Tribe Infrastructure Development Trust Fund Act 
enacted in 1996 [Public Law 104-223] awarded $27.5 million to the Crow 
Creek Sioux Tribe. Of the $27.5 million, the tribe is allowed to 
utilize the interest. The Tribal Parity Act would greatly enhance the 
trust fund, thus increasing our available moneys and allowing us to 
leverage with the private sector. The first year of the trust fund, we 
received slightly over 1 million dollars. Due to fluctuating interest 
rates, the yield has now dwindled to slightly over $700,000, and is not 
a set or guaranteed yearly amount. We have utilized the interest to do 
a number of things to improve the situation of our people, including 
the following:

  <bullet> \\\\\\Purchase a small school with a gymnasium in the Big 
        Bend District--the furthest outlying district. We are able to 
        provide Kindergarten through 6th grade education to students in 
        that area, preventing the necessity of an hour-long bus ride 
        each way to and from school;
  <bullet> \\\\\\Construct a Community Building in the Crow Creek 
        District, providing a place to gather for socializing, 
        celebrations, and funerals;
  <bullet> \\\\\\Construct a Community Building in the Fort Thompson 
        District, utilized for community events, program presentations, 
        wakes, weddings, dance, meetings, and as a polling place;
  <bullet> \\\\\\Set a higher education program to assist students in 
        college;
  <bullet> \\\\\\Purchase land to increase the land base; and
  <bullet> \\\\\\Improve damaged roads and upgrade our water plant.

    These initiatives just begin to scratch the surface. The 
legislation we are discussing today, S. 374, is intended to supplement 
our existing trust fund. As you know, it passed the Senate three times 
in the 108th Congress, both as a stand-alone bill and as an amendment. 
All three times the measure died in the House. The Tribal Parity Act 
was again reported by this committee on June 29, 2006, but has yet to 
come before the Senate for consideration.
    The Army Corps of Engineers has estimated that the Pick-Sloan 
Project's overall contribution to the U.S. economy averages $1.27 
billion annually. According to the Western Area Power Administration, 
the agency that administers the Pick-Sloan Project, receipts from the 
project in 2006 are likely to total $119 million and the same every 
year after. The $69 million dollar increase to the trust fund requested 
in S. 374 [as amended] would bring the trust fund balance to $96 
million--less than 1 year's receipts the Government receives from the 
Pick-Sloan Project.
    The expanded trust fund would enable the Crow Creek Sioux Tribe to 
make not just significant, but magnificent strides in growth and 
development. Economic development and environmental improvements would 
change the lives of our people, our children, and all future 
generations of Crow Creek Sioux. It would assist in putting 
reservations on parallel ground, enabling us to compete economically, 
with Chamberlain and the rest of the United States, as opposed to 
remaining in our current state, operating below the standards of most 
Third World Countries.
    The recent GAO report entitled ``Analysis of the Crow Creek Sioux 
and Lower Brule Sioux Tribes' Additional Compensation Claims'' 
criticizes the tribes for not using ``a final asking price.'' Mr. 
Chairman, there is not a tribe or tribal member that could possibly 
place a monetary value on the loss and detrimental impact the Pick-
Sloan Project has had on our people. ``Official'' documents use terms 
such as ``Lake Sharpe'' or ``Lake Francis Case'' to identify the land 
overtaken by the Pick-Sloan Project. In the every-day language of the 
tribal people, the land is called ``taken area'' or ``taken land.'' 
Because it was taken. The land taken was the richest portion of our 
reservation. There were no offers or deals made to sell the land, and 
no assessment done to determine the value of the land. Even if there 
had been an assessment, the medicinal plants grown on the land and the 
Ceremonial Grounds hold a higher, non-monetary value. The devastation 
this has wrought still remains today for all to see.
    The Crow Creek Sioux Tribe is consulting with experts such as Dr. 
Mike Lawson to estimate a monetary value, but his name or expertise is 
not mentioned in the GAO report. The compensation listed for Crow Creek 
Sioux Tribe in the Tribal Parity Act is not based on the highest asking 
price, or based on the price for the Santee Sioux, the Lower Brule 
Sioux, or any other tribe. Each tribe is unique, but what binds us 
together is our sovereignty. We are asking for the ability to maintain 
our sovereignty.
    A Christian group visited the Crow Creek Sioux Tribe, stating that 
they had read about the poverty on the reservations and the fact that 
Crow Creek is in the poorest county in the America. After visiting, the 
group called the situation a National Shame. As chairman of the Crow 
Creek Sioux Tribe, I want to see the deplorable statistics change. I do 
not want our situation to remain a national shame. We are not asking 
for charity, for a handout, or even for your pity. We are not even 
asking for a helping hand. We are simply asking for fair and just 
compensation.
    For the men, women, and children of the Crow Creek and Lower Brule 
Sioux Tribes, there is nothing more important right now than moving 
forward with the Tribal Parity Act. The new Tribal Council, including 
myself as chairman, understands the challenges that lie ahead. Our 
reason for running for office and our daily motivation is to improve 
the situation and make a positive difference for the people of the Crow 
Creek Sioux Tribe. The Tribal Parity Act is an essential step in our 
efforts to reverse the downward trend and move forward. We urge the 
committee to file the report and bring S. 374 to the Senate floor for 
consideration as soon as possible.
    Thank you for the opportunity to testify before your committee, and 
I will be happy to answer any questions you might have.

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