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relationship with our Indians. I do not think we have done a very good job with it, but that is beside the point. The question in my mind that I have to resolve is, how did we get started on all this in the first place, and how are we going to settle this question of ancient Indian sand claims? That is not going to be done satisfactorily, in my opinion, by the passage of laws. I think if it is ever done, it will probably be done by negotiation.

Now, could I have a little time? Not too much, but I want to discuss with Mr. Coldiron the veto by President Reagan of the so-called Papago Indian water rights. I will have to start out by saying, I think the President was right, although I sponsored the legislation and chaired the meeting where it was passed. But I think your answers might give us an idea of where we are headed in this whole general area.

In vetoing the measure, the President said that the settlement was deficient because it did not provide for a large enough local contribution and because the United States, through the Interior Department, was not a party to the negotiations. In reaching his decision, President Reagan added that he strongly believed that negotiated settlement and legislation was a proper route to resolve Indian water claims.

Now, in light of that veto message. I have just three questions. Could tell me to what extent were Indian tribes consulted in the development of this legislation ?

Mr. COLDIRON. I think that there was negotiation between congressional staff, senatorial staff, Congressman Udall's staff, with the tribes and to some extent the Corps of Engineers was involved in the legislation. But there was no—we are talking about the Papagos now?

Senator GOLDWATER. Yes. Mr. COLDIRON. There was no real representation by the Department of Interior other than what advice the Bureau of Indian Affairs may have given to the tribes. And, that was not extensive.

I think what President Reagan was referring to in his veto message was the fact that the executive branch of the Government, in Indian water claims, the Department of Interior should be represented and actively participate.

I might say, Senator, since the Papago veto, we have started to put together a negotiating team, hopefully that will represent all the facets of the Department of Interior and bring together the tribes and other local people, other departments of the Federal Government, including the Justice Department, particularly, and to try to do that in all 56 cases that are now pending in the Arizona courts.

Senator GOLDWATER. Well, if the tribes were not consulted, is the approach in this particular bill, S. 2084, consistent with President Reagan's position on the negotiation of Indian water rights!

Mr. COLDIRON. I think it is completely consistent with that. And we urge, as I said in my opening statement, we urge negotiation rather than litigation. I think that the administrative proceeding provided for in S. 2084 is a vehicle where if the tribes could make an agreement with the States and the individuals and the Federal Government, that could expeditiously dispose of claims.

Senator GOLDWATER. Well, that of course gets to the point that bothers the Western water user. Trying to settle water rights, whether

it be Indian or non-Indian, by negotiation, as you know, takes literally forever. We were in the Supreme Court, I think 45 years, just trying to get a little argument settled between California and' Arizona. We thought this approach might be an expeditious way, althrough I think the President missed the one point I would have gone on, and that is 28 tribes who come under the Colorado compact, if they are living on land that is tributary to the main stream, there is no question of their water rights.

There is some question about whether the Papago live on a stream that feeds into the Colorado. That is merely an aside. If negotiation is the proper route for the resolution of Indian claims, why is the administration recommending that the local contribution under the Ancient Indian Land Claims Settlement Act be fixed at an arbitrary 50 percent ? Now, is that figure negotiable ?

Mr. COLDIRON. I think if it was in the statute, it would not be negotiable. But I think it was probably an arbitrarily fixed figure. I might say, in the Papago veto message, the President merely

said that the Federal Government should not bear the entire cost. He did not suggest any figure.

Senator GOLDWATER. So it is not a fixed 50 percent? It can be changed?

Mr. COLDIRON. I am sure there were discussions with the Office of Management and Budget

Senator GOLDWATER. I know that.

Mr. COLDIRON continuing). And with the Justice Department, and with the Department of Interior, and with the congressional staff of Senator D'Amato and Senator Thurmond's staff and Congressman Lee's staff, as to what that figure should be.

Senator GOLDWATER. Well, that will come later.

In your statement, you recommend that the act be amended to provide that the States effect agreements with the Secretary of the Interior whereby they will take up 50 percent of the cost of any judgment on these claims. Is that merely a recommendation or is the administration conditioning it in support of this bill, on the adoption of this proposal ?

Mr. COLDIRON. I believe Ms. Dinkins can speak to that.

Ms. DINKINS. Senator Goldwater, the administration has recommended that the States participate with some monetary payment of their own, and that the Federal Government not be required to bear the full compensation load which is the way the bill is currently written.

We have proposed that that be an amendment.

Senator GOLDWATER. I can buy that. That is one of our problems, of course. We got into that when we were talking about another bill.

I look forward to sitting through as much of these discussions as I can because I think both of you people, both being lawyers, recognize that this is not something that we just settle like that. I have very grave doubts. I will sit and listen and keep as open a mind as I can.

Thank you, Mr. Chairman.

Senator COHEN. Thank you, Senator Goldwater. And let me say to my good friend from Arizona that there is a difference between the application of the Nonintercourse Act to the western tribes and the fact that over the years, historically, it was assumed by the eastern States not to have applied, and that is why all of these cases are now

originating in the East. The act had always been applied to the western tribes and you do not have transfers taking place in the West without the express consent of Congress.

As a result, in my judgment, at least, it was never the congressional intent at the time the Nonintercourse Act was passed to apply to eastern tribes. But if you look back historically, the purpose was, for which the legislation was introduced, was to help settle the West. And the East had already been established at that particular point, and if you look historically at the time and the circumstances under which the act was passed, I believe it was intended to apply to the frontier. Now, that is a matter of my interpretation and a lot of other people's a

a historical analyses of what took place. But the fact of the matter is that the act does not read that way. The act does not say eastern tribes or western tribes.

Historically, it has always been applied to the western tribes. Historically, none of the eastern States has ever abided by it because they did not think they had to. As a matter of fact, if you go back to the records, you will find letters not from only Roosevelt or Reagan, but you will go all the way back to George Washington, and you will find correspondence with Secretary of War Henry Knox, and I think you can glean from those records the clear understanding that it was not to apply to the East, but the act does not read that way. The court could very well say it applies to the East with as much force as it does to the West. And that is why the Department of Justice has recommended, why Attorney General Griffin Bell recommended, why President Carter's special ambassador on this particular matter, a retired Supreme Court justice of the Supreme Court of Georgia, had recommended that we try to settle these through negotiation. Because of the complexity of the issues that are raised, because of the ultimate liability, the potential exposure for the States and the Federal Government, which is so extensive; that is why they have recommended that you not take a chance in going to court, and that brings me back to some of the questions I would like to ask you.

Ms. Dinkins, you indicated that we should extinguish the interim damages, the so-called consequential damages. Is it not recognized to be a property right? If in fact you had recognized title--aside from the aboriginal question now-if you had in fact recognized title that was wrongfully taken from you, or it was transferred under circumstances that were null and void, as the act provides, and you have the occupation of that land over a period of time, and that you have in fact trespass damages, consequential damages, is that not recognized as a right that is compensible under the Constitution?

Ms. DINKINS. Mr. Chairman, there has not been any litigation, so we do not have any court cases that speak to that particular issue. That is one of the questions that we raise in connection with the provision in the bill, though, the bill extinguishes that.

It may well be that the court would conclude that that is a vested property right and compensible under the Constitution, and if that is the case, the court would set the value, rather than Congress. That is why we pointed that out as a problem. You are absolutely right.

Senator Cohen. That is one of the possibilities, the court might strike that down, the provision of the bill saying that Congress cannot extinguish that without some means of compensation?

Ms. DINKINS. Yes, that is correct. The Court might find that it is required and go ahead and award compensation for that interim trespass.

Senator COHEN. Are you recommending that the provisions of the bill be severable? In other words, if one part is stricken down, the bill will still survive?

Ms. DINKINS. We have not made a recommendation on that issue.

Senator COHEN. What would be your recommendation on that? Suppose it goes up and the Court should rule that Congress cannot extinguish consequential damages without compensation, and OMB comes back and says, well, in that case, we do not support this bill?

Ms. DINKINS. I would have to consult with OMB and Interior.

Senator COHEN. You also seem to look upon the extinguishment of title as an economic theory here. We are balancing equities and we are balancing economics.

Let us suppose the land were in fact transferred, not at favorable prices under the circumstances, but suppose it was a result of fraud or coercion. In other words, what if the Supreme Court says, this vehicle is all well and good if you are just talking about it being an exchange of economic values, because we do have let us face it—we do have some competing equities here. We have the original equity of the Indian tribes, but we also have the intervening equities of hundreds and thousands of people who have, over the years, relied upon the integrity of the title, who should not be dispossessed of that land at this particular point. What is to prevent the Court from looking back and saying that we see this as a wrongful taking and Congress did not provide a mechanism for determining which land was transferred fraudulently as opposed to merely being an inadequate compensation at the time?

Ms. DINKINS. Well, I do not know exactly how a court would come out on that. Of course, the bill provides that the difference between what was paid and what would have been fair market value at the time of the taking would set the amount that would be awarded there.

Senator Cohen. I know, but again, I am going a little bit beyond that. Let us assume that you can establish the fair market value was in fact paid. But let us suppose it came about as a result of fraud. Now, is there a difference, constitutionally, between simply going back and ratifying, based upon unfair compensation, or going back and ratifying even in the case of fraud or coercion ?

Ms. DINKINS. I do not know if there would be a difference. I would be glad to consider that, though, and let you know if it appears there would be.

Senator Cohen. Let me go back and read this letter- I assume you have seen it—to David Stockman, from Mr. McConnell. I am just going to read some of the highlighted portions. It is too long. I will include it in the record.

Senator COHEN. I will just read portions of it and then ask you to comment on it as I go through.

First, perhaps, we could start by, I could ask you, Mr. Coldiron, under the provisions of the bill, there is an administrative procedure whereby the tribes could petition the Secretary of the Interior-although I still think there is a fundamental conflict of interest in that

1 See appendix, p. 1070.

particular route, but that is my judgment. In other words, you cannot have your trustee, who allegedly violated his trust, if in fact there are valid claims—and I do not know the answer to that. But if in fact there are valid claims, it seems to me that you do not call upon the person who occupies that seat, the Secretary of the Interior, who would be in a conflict of interest for having breached his or her trust obligations, fiduciary obligations, to 200 years later say now, what do you think the fair market value was when you did not enforce your trust obligation back in 1794. I have problems with that procedure, but aside from that, do you think that he can handle the disposition of these claims within 180 days?

Mr. COLDIRON. I think so. I might say, Senator, I am in complete agreement with you on this conflict of interest, and since I have been the Solicitor of the Department of Interior, nothing has bothered me more than trying to be the lawyer for the Indians and trying to be the lawyer for the rest of the government. If I were out in private practice, I would be disbarred. Senator Cohen. Well, that is exactly right. As a matter of fact, 1

1 went even further

(Laughter.]

Senator Cohen. Well, to place that in context, and what he is saying is, in fact, accurate, you cannot wear two hats, at one time, not when you are a fiduciary. A fiduciary has special obligations. As a matter of fact, it might very well be that a suit might lie against the Secretary of the Interior for breach of fiduciary obligations, even under the Nonintercourse Act itself. Forget about the suit against the States or the property owners; you might very well have a claim against the Federal Government itself for failing to exercise its fiduciary obligations. That is always there.

You cannot have the Secretary of the Interior, on the one hand determining value of the land, and on the other saying he is executing his fiduciary obligations. It cannot be done.

Nor could, I might add, even the Justice Department in this case survive the conflict of interest test. That is my own personal judgment, one that I offered a number of years ago. The Justice Department, which is required to enforce the law, also now is in the position. How can you represent the tribes, if in fact that was the obligation, to enforce the Nonintercourse Act, and at the same time represent the States or the property owners, under the circumstances.

As Senator Goldwater said, it is a very difficult area of the law to deal with and we cannot just simply sweep it away without giving it thorough consideration.

I doubt frankly, my own judgment, and it is stimulated by something that I saw in this letter from Mr. McConnell, saying that 180 days simply is not going to be sufficient time for a Secretary of the Interior to review the claims, establish value, circumstances, fair market value, and then apply a compensatory award. But that is just a technical issue I would raise with you.

Let me read from this letter: The Department strongly recommends, however, consultation and negotiation with the parties affected in order to obtain the most beneficial, acceptable solution.

You have said that here this morning, Mr. Coldiron, and I agree with that. Page two:

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