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Policy consideration. We are most concerned with the fact that bill attempts to settle these claims without prior consultation and negotiation with the affected parties, including the private landowners, the States, and the Indian tribes. Page three:

On the other hand, while we are not in a position to evaluate the validity of specific claims which we have not examined, we are not unmindful of equities which would be cited on behalf of those Indians who claim that their ancestors were forced or tricked into alienating their homesteads at unconscionably low compensation.

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The proposed legislation does not appear to have had the benefit of consultation with the affected groups. First, elementary principles of fairness suggest the Indian Tribes, as well as other affected groups, be given an opportunity to participate in the development of legislation which affects their interests. Without such a process of consultation, the bill may unjustifiably be perceived as having a bias against Indian tribes. Second, without the support and understanding of the tribes, it would be more difficult for the bill to achieve its intended purposes.

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There are serious questions about the scope of the potential United States liability on the aboriginal title claims. In light of current budgetary constraint, it seems desirable not to commit the United States to a financial obligation of uncertain but potentially significant dimension without careful thought and without first achieving the most accurate possible quantification of the government's potential liability.

I could stop here and ask you, have all of these things been done? MS. DINKINS. Mr. Chairman, this was a letter that was prepared for Mr. Stockman in connection with the Department of Justice's internal administration comments on the proposed bill. We have consulted with OMB and what I have provided for you today is the administration position.

Senator COHEN. I understand that. What I am suggesting is that this particular internal document does raise the questions which are not unique to the Department of Justice or OMB, but I am sure are going to come before this committee later today. These are_valid observations, namely, consultation, negotiation, participation. It appears to me that economics is really the question here as to whether or not you extinguish aboriginal title without compensation. That obviously has been the judgment. Whether you extinguish claims for consequential damages. It is easy to do, to say so, but the court might not agree. And so, what I would like to know is, what is your personal recommendation, aside from the-I guess I won't ask you that question.

MS. DINKINS. Thank you. But, Mr. Chairman, on the aboriginal question, we do believe that the Supreme Court has made clear that that may be extinguished by Congress without compensation.

Senator COHEN. You know, I was going to avoid that question because it gets fairly technical and I am trying to stir up the ashes of my own memory here, to go back through it, but as I recall, the whole purpose under the Nonintercourse Act was twofold. One was to protect the Indian tribes themselves from being taken advantage of by the white settlers at that point. And the second one was to preserve the right of preemption by the Federal Government of the land.

Now, in the case of the eastern tribes, you have no preservation or preemption right by the Federal Government because it was the States

who owned the land, not the Federal Government. So I suppose an argument could in fact be made that the doctrine of the extinguishment of aboriginal title really does not apply to eastern tribes, because this is not a Federal right of preemption but rather a State right, and the Federal Government cannot take that.

So maybe you have a different standard as to whether you can extinguish aboriginal title in the east without compensation. I did not intend to raise that but that is another legal argument that could be involved. I do not know the answer to that.

Senator GOLDWATER. That is where the Supreme Court gets the ball bounced again. There is a question whether it is State or Federal.

Senator COHEN. That is the problem we have facing us, using western tribes or eastern tribes, and whether the act was originally intended to apply or not to apply.

What I am going to do is pause here and Senator Goldwater and I will go vote and return. It will take us approximately 10 minutes and the committee will stand in recess. Fifteen minutes for Senator Goldwater.

[Recess.]

Senator COHEN. The hearing will come to order.

Ms. Dinkins and Mr. Coldiron, I have a number of questions here but we also have a number of witnesses to follow you. Most of the questions I can submit to you for your response in writing,' and with that, I would thank you for your testimony.

Mr. COLDIRON. Thank you, Mr. Chairman.

MS. DINKINS. Thank you, Mr. Chairman.

Senator COHEN. Our first panel will be the St. Regis Mohawk, Leonard Garrow, James Abourezk; the Cayuga Indian Nation, Frank Bonamie, Art Gajarsa; the Seneca Nation of Indians, Barry Snyder; and Six Nations, Chief Corbett Sundown and Tim Coulter.

Would you gentlemen please come to the witness table?

Gentlemen, I would ask you to include your prepared statements for the record and ask you to summarize as briefly as possible in view of the many witnesses which are to follow.

First let me call on Senator Abourezk.

STATEMENT OF JAMES G. ABOUREZK, FORMER U.S. SENATOR, LEGAL COUNSEL, ST. REGIS MOHAWK TRIBE; ABOUREZK, SOBEL & TRISTER

Mr. ABOUREZK. Thank you, Mr. Chairman.

The committee has my full statement, which I will not try to repeat. Senator COHEN. Your full statement will be included in the record of this hearing.

Mr. ABOUREZK. I will just make a couple of comments about the administration position, to try to assist the committee.

Mr. Coldiron said that the administration prefers negotiations rather than litigation. I think that is probably true of everyone, including the Indian tribes themselves.

However, this legislation, the passage of this bill, would virtually preclude negotiation simply because it takes whatever economic leverage the tribes might have away from them. And because of the uncon

1 See appendix, p. 252.

stitutionality of the legislation itself in a number of different respects, and I have submitted a brief as well as other people, what I think the legislation would do if it passed would be to prevent negotiation between the tribes and the property owners involved and would throw back into the courts an extreme number of additional cases for litigation to straighten out the constitutionality of the bill, to try to attack it on its merits as being unconstitutional.

The other part of it is, in my view, that the Federal Government, not just the Interior Department, the entire Federal Government, is a trustee and has a fiduciary relationship to the Indian people and so it would seem impossible, and I think the courts would agree with this, based on the precedents that I have been able to find, the courts would agree that the Federal Government cannot act in both capacities, No. 1, as a trustee for the Indians, and second, as an agency or as an institution that seeks to deprive the Indian people of property rights without just compensation.

That is one of the major constitutional objections to this legislation. And it just cannot do it and I believe the courts would find it that way, and you would find court challenges by Indian tribes from now on into the future. If you think this legislation will settle by negotiation, it absolutely will not, because there will be so many attacks on it and I should not denounce my own profession as a lawyer, but I think the lawyers would come out extremely well with this legislation.

Whereas, I think there would be rapid settlements, as there was in the case in which you were involved in Maine. I think there would be comparatively rapid settlements if the situation were to remain in the courts as they are now without this legislation.

The second point I wish to make is a point that, it seems to me it is very unfair to the Indian tribes to try to take away whatever leverage they have. The United States is in a position, with this legislation, of a bully. In other words, the Indians have no political power, no economic power, so therefore it is all right for those who are politically powerful, or more powerful, I should say, to come in and by legislation take away whatever property rights the Indians might have in this respect. And it seems to me, just as a matter of fairness and a matter of justice, that this legislation is wrong, and on behalf of myself personally and the clients I represent, the St. Regis Mohawk Tribe, I would urge rejection of this legislation and this approach. Thank you very much.

Senator COHEN. Your prepared statement will be entered in the record at this point.

[The prepared statement follows:]

PREPARED STATEMENT OF FORMER U.S. SENATOR JAMES G. ABOUREZK, LEGAL COUNSEL FOR THE ST. REGIS MOHAWK TRIBE, ABOUREZK, SOBEL & TRISTER

The St. Regis Mohawk Tribe, which I represent, entered into a Treaty with the State of New York in 1796, that was ratified by the United States Senate in 1797. That Treaty guaranteed to the St. Regis a tract of land on the northern boundary of New York State six miles square, as well as certain adjacent properties. Through a series of agreements with the State of New York, in the period 1816 through 1845, most of the protected reservation was ceded to the State. None of these agreements were submitted to or approved by the United States, in clear violation of the Indian Non-Intercourse Act.

Several times in this century, in the 1920's, the 1940's and the 1950's, the St. Regis have attempted through litigation to recover the lands guaranteed to them in the 1796 Treaty. Their efforts were unsuccessful. Now that federal law has

developed to the point of supporting its historic claim, the St. Regis are once again prepared to assert their claim through litigation, if a fair settlement cannot be reached.

It is firmly established in the decisions of the Supreme Court that under the Fifth Amendment to the Constitution just compensation must be paid by the United States for the taking of recognized Indian title. See United States v. Sioux Nation of Indians, 448 U.S. 371, 415 & n. 29 (1980); Tec-Hit-Ton Indians v. United States, 348 U.S. 272, 277-78 (1955); United States v. Creek Nation, 295 U.S. 102 (1935). As has been demonstrated in the legal memorandum submitted on behalf of the Oneida Nation and other tribes, H.R. 5494 constitutes a taking of recognized Indian title to lands in New York and South Carolina without the payment of just compensation. I do not wish to repeat these arguments in detail today. Rather, I would like to focus on the contention urged by some that the bill would be constitutional because no "taking" of Indian property is involved. This contention goes to the heart of the constitutional issue raised by H.R. 5494 and, in my view, is wholly unsupportable under the revelant legal principles and authorities.

In a memorandum analyzing the constitutional issues raised by H.R. 5494, the Assistant Attorney General for Legislation has argued that the rights created under the Non-Intercourse Act "amount to nothing more than the right to invalidate a transaction in the absence of Congressional approval." It follows, in the Assistant Attorney General's view, that if congressional approval for the transfers is retroactively given in H.R. 5494, the conditions of the Act will be met and there will be no "taking" which requires any compensation under the Fifth Amendment. The American Land Title Association (ALTA), in a 1978 Memorandum supporting legislation to extinguish Indian land claims relying on the Non-Intercourse Act, has similarly argued: "while legislation appropriating recognized title lands for the use and benefit of the federal government or for disposition to third parties might constitute a taking of property, the approval of the transfers made by the tribes themselves does not involve an exercise of congressional power that the courts will determine rises to the level of a constitutional taking." Even assuming that the transfers involved are voluntary-when in fact the Lee Bill goes much further and covers all transfers-these arguments ignore the well-established principle that in acting to approve transfers of Indian land, Congress owes a fiduciary responsibility to the Indians. If Congress fails to fulfill this responsibility, its action in giving approval will be considered to be a taking within the protection of the Fifth Amendment.

The purposes of the Non-Intercourse Act itself make clear that congressional power to approve transfers of Indian land is not unlimited but is circumscribed by the fiduciary responsibility owed to the Indians. Under the Act, the United States agreed to oversee transfers of Indian land to non-Indians in order to insure the fairness of the transactions. See, United States v. Oneida Nation of New York, 477 F.2d 939, 942-3 (Ct. Cl. 1973). As President Washington put it in a speech to a tribe of New York Indians shortly after enactment of the Non-Intercourse Act, "The General Government will never consent to your being defrauded, but it will protect you in all your just rights." American State Papers (Indian Affairs, Vol. I, 1832), p. 142.

Thus, the courts have long held that in carrying out its responsibilities under the Act, the United States stands in a fiduciary relationship to the Indians whose land it is obligated to protect. For example, the Supreme Court has stated: "The obvious purpose of that statute is to prevent unfair, improvident or improper disposition by Indians of lands owned or possessed by them to other parties, except the United States, without the consent of Congress, and to enable the Government, acting as parens patriae for the Indians, to vacate any disposition of their lands made without its consent."

Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99, 119 (1960). And, the Court of Claims has ruled that "the relationship [created by the Act] is more than that of a nonparticipating bystander, or of a sovereign toward its ordinary citizens. It is a special responsibility." United States v. Oneida Nation of New York, supra, 477 F.2d at 943. Accord, Seneca Nation of Indians v. United States, 173 Ct. Cl. 917, 925 (1965). These authorities make clear that, even if Congress has authority to approve Indian land transfers retroactively and long after the transfers took place, as has been assumed, it may only do so in a manner which is consistent with its fiduciary responsibility to the Indians affected. If Congress approves the transfer of Indian lands without fulfilling the fiduciary responsibility which it owes to the tribes, its action will be regarded as a taking subject to the just compensation requirement of the Fifth Amendment.

This is made clear in an oft quoted passage by the Court of Claims which has been recently cited with approval by the Supreme Court:

"It is obvious that Congress cannot simultaneously (1) act as trustee for the benefit of the Indians, exercising its plenary powers over the Indians and their property, as it thinks is in their best interests, and (2) exercise its sovereign power of eminent domain, taking the Indians' property within the meaning of the Fifth Amendment to the Constitution. If any given situation in which Congress has acted with regard to Indian people, it must have acted either in one capacity or the other. Congress can own two hats, but it cannot wear them both at the same time.

Some guideline must be established so that a court can identify in which capacity Congress is acting. The following guideline would best give recognition to the basic distinction between the two types of congressional action: Where Congress makes a good faith effort to give the Indians the full value of the land and thus merely transmutes the property from land to money, there is no taking. This is a mere substitution of assets or change of form and is a traditional function of a trustee."

Three Tribes of Fort Berthold Reservation v. United States, 182 Ct. Cl. 543, 553, 390 F.2d 686, 691 (1968), quoted in United States v. Sioux Nation of Indians, supra, 448 U.S. at 408-09. Thus, the only way in which congressional approval of the land transfers affected by H.R. 5494 would not constitute a compensable "taking" of Indian property is if the approval is joined with "a good faith effort to give the Indians the full value of the land...."

"[A] trustee may change the form of trust assets as long as he fairly (or in good faith) attempts to provide his ward with property of equivalent value. If he does that, he cannot be faulted if hindsight should demonstrate a lack of precise equivalence. On the other hand, if a trustee (or the government in its dealings with the Indians) does not attempt to give the ward the fair equivalent of what he acquires from him, the trustee to that extent has taken rather than transmuted the property to the ward. In other words, an essential element of the inquiry . . . is determining the adequacy of the consideration the government gave for the Indian lands it acquired. That inquiry cannot be avoided by the government's simple assertion that it acted in good faith in its dealings with the Indians." United States v. Sioux Nation of Indians, 448 U.S. at 416-17; quoting with express approval, 601 F. 2d at 1162. Since H.R. 5494 makes no pretext at attempting to give the Indians covered by its provisions the "fair equivalent" of the land, Congress would not be acting as trustee for the Indians, and the legislation must be regarded as a taking of property for which just compensation is required by the Fifth Amendment.

The question of how much compensation is owed for a taking by the United States is a question for the Courts to decide. Since H.R. 5494 defines the amounts which may be paid to the Tribes, there is a serious question of violation of the doctrine separation of powers. We concur in the discussion of this important constitutional issue in the Oneida Nation memorandum.

There is the additional question of whether the compensation formula in the bill satisfies the requirement of just compensation. We think it plain that it does not.

Just compensation, plain and simple, means the value of what is taken. As the original transfers are without any validity, the taking of the Tribes' property would occur only upon passage of the legislation which would for the first time terminate the Tribes' ownership of the land. See United States v. Creek Nation, 295 U.S. 103, 111 (1937). The obvious land fairest measure of the value of the property taken is the present day value of the property involved.

The Bill does not, however, provide for this measure of payment. Rather, it provides that the Tribes be paid the value of the property at the time of the invalid purported transfer, less the amounts actually paid at that time, plus simple interest at a rate of 5 percent. The Supreme Court has accepted a definition just compensation as the "value at the time of the taking plus an amount sufficient to produce the full equivalent of that value paid contemporaneously with the taking," United States v. Klamath Indians, 304 U.S. 119, 123 (1938). Accord, United States v. Creek Nation, supra, 295 U.S. at 111; Jacobs v. United States, 290 U.S. 13, 17 (1933). However, by its provision for the payment of simple interest, H.R. 5494 fails by a wide margin to meet this constitutional standard. What simple interest means is that 5 percent is paid for the first year after the taking, 5 percent for the second year, etc. The reason why simple interest does not meet the just compensation standard stated by the Supreme Court in the

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