Lawmakers criticize Indian Affairs

Officials with the Interior Department's Bureau of Indian Affairs this week touted a reorganization designed to tackle the agency's failed financial management and trust asset accountability.

But lawmakers weren't satisfied and said the problem of thousands of divided land interests will swamp any new system. Sen. Kent Conrad (D-N.D.), a member of the Indian Affairs Committee, said he has seen many proposals for the bureau's reorganization, but none has been successful.

"It leaves me with zero confidence that anything fundamental will change," Conrad said May 21. "It is impossible for me to know if this has any prospect for success or not."

Instead, Conrad said, the bureau should focus on the real problem: the division of land interest into tiny fractions, overloading the computer systems and expending more funds and energy than necessary.

"If we don't have a plan to deal with that, I don't think we'll ever catch up with this problem," he said.

The division of land interest among heirs, known as fractionation, expands with each generation, forcing the system to deal with lengthy decimals. Any system that is devised becomes swamped, leading to ineffective technology and mismanagement, Conrad said.

"We've got a dynamic occurring here where the interest gets fractionalized, and the result is a nightmare for anybody to manage," he said.

Bureau officials testifying before the committee recognized that fractionation is a problem plaguing the reorganization, and said that because all of the bureau's systems are linked, it affects all areas. "If it weren't for the limited bit of computers we have today, we would have more of a disaster than we have now," said Ross Swimmer, the Interior Department's special trustee for American Indians.

Swimmer said the bureau must hold accounts for roughly 400,000 heirs. Of those accounts, 19,000 contain less than $1 and so cost the bureau more to manage than they worth. "Most accounts, frankly, are very, very small accounts," he told lawmakers.

Officials proposed buying out divided land as a way to deal with the division of interest, but lawmakers weren't satisfied that the plan was an efficient solution. Instead, Conrad suggested giving heirs notice and closing the small accounts, using the money for bureauwide initiatives. Conrad asked officials to give the committee recommendations on steps Congress can take to deal with the fractionation and thus help repair the accounting system.