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The Indian Land Consolidation Plot Thickens

Gabriel S. Galanda
2/23/13

There were several revelations from the Department of the Interior during its tribal consultation in Seattle last week. Interior officials successfully conveyed to Indian leaders their best of intentions as to the $1.9 billion Indian land consolidation effort, which they disclaimed as having inherited from the Cobell parties. What became obvious from the session is how difficult, if not impossible, it will be to carry out the agency’s fractionated Indian land buy back program.

Most controversial, is Interior’s stated intent to focus 90% of $1.55 billion allocated for fractionated land acquisition—meaning $1.39 billion—on 40 reservations, because the agency claims that 90% of the “purchasable fractionated interests” are located on those 40 reservations. Interior has compiled a “Top 40” list of tribes. As to the other 110 reservations that Interior says have purchasable fractionated interests, they would be collectively allocated the remaining 10%, or merely $163 million. The rest of Indian Country, as many as 415 tribes, are not listed for federal buy back program funding. Interior should open the program to any tribe whose reservation includes fractionated Indian lands.

If that were not bad enough, some of the “Top 40” tribes are encouraging Interior to restrict the $60 million in Cobell scholarship monies to only those 40 listed tribes. This, despite the fact that the hundreds of thousands of Cobell plaintiffs hail from far more than 40 and in fact hundreds of tribal communities. These issues prompted one Umatilla leader at the consultation to decry that Interior’s entire land consolidation program will, federal intentions aside, yet again divide and conquer Indian Country. She could very well be right. In any event, Interior should allow scholarships for any federally-recognized Indian student.

In response to growing concern about the buy back program as a proxy for tribal government forced sales of fractionated tribal member-owned lands, Interior disclaimed in bold: “There will be NO forced sales.” Still, tribal representatives continued to express skepticism about that fundamental premise, believing that Interior is far too optimistic in thinking that tribal members will voluntarily sell even the most miniscule of an interest in an allotted or restricted land parcel, given the cultural significance of Indian land that has developed since 1887.

When Bureau of Indian Affairs Director Mike Black was pressed, he was forced to admit that the buy back program is specifically designed to bring tribes into at least a controlling 51 percent interest in fractionated allotted or restricted lands—at which time a tribe could then, on its own volition and with its own funding, force the sale of the remaining 49 percent or other minority interest. Make no mistake about it: while Interior’s plan now disclaims that it will facilitate forced sales under 25 U.S.C. 2204, the buy back program will catalyze controversial intra-tribal forced sales.

Interior did not respond to concerns about the conflict of interest it will face during either voluntary or forced sale—meaning how it will simultaneously fulfill its trust responsibility to both a tribal government buyer and a tribal member seller. On the issue of fair market value alone, that conflict cannot be avoided. Even a willing member seller will want the purchase price to be as high as possible, while both the tribal buyer and Interior will want the price to be lower, in the interest of spreading as far as possible the $1.55 billion allocated for land consolidation. Interior must immediately devise a land consolidation/buy back conflict of interest policy, especially for Bureau superintendents to follow. It can no longer be business as usual for Bureau career employees like those in the Pacific Northwest Region who too frequently align with tribal governments in tribe-member land transactions.

Interior proposes mass appraisal, and categorical exemption from any National Environmental Protection Act (NEPA) review, in order to expedite fractionated land buying and selling. The agency says both methods are legally defensible, although both mass appraisal and NEPA exemption seem ripe for legal challenge by any member who does not want to sell his or her ancestral lands. For example, by way of federal approval of any cooperative agreement with a tribe, under which the tribe rather than Interior would administer the buy back program, any related acquisition of fractionated interests could be subject to NEPA review. See e.g. Anderson v. Evans (9th Cir. 2004). Interior might get further legal opinion on these issues.

Several tribes urged Interior to enter into cooperative agreements, but the agency made no firm commitment in that regard. Interior seems lukewarm at best about that possibility, despite a proven record by many tribes of effectively reacquiring land on their own. In this budding era of austerity, the agency should more objectively consider whether tribes can better accomplish fractionated interest consolidation. That said, Interior must remain keenly mindful of tribal forced sales, and the United States’ continued trust obligation to protect members from having their lands improperly taken, under banner of cooperative agreements.

Interior continues to hold steadfast in its position that permanent improvements to any Indian lands are not trust assets. In this context, the agency explains that while the real property that is an allotment or restricted fee parcel—meaning the dirt—can be acquired by tribes through the program, any permanent improvements to the land are ineligible. This is a holdover position from the Cobell era, whereby the agency disclaims that permanent improvements are not trust assets for fear of being sued for mismanagement of those assets. But it is illogical for Interior to maintain that it will help a tribe buy fractionated dirt with federal funds, but leave the tribe and its members to sort out for themselves any acquisition of the permanent improvements. As tribal leaders warned Interior, that bifurcated approach makes no practical sense and spells disaster. Interior should craft a realistic solution to this predicament; it can do so without incurring potential trust liability.

Finally, Interior proposes to send out mass offers to fractionated interest owners but does not seem to appreciate that for each and every potential tribal acquisition of an undivided interest, it must provide notice of that pending acquisition to the other undivided interest owners so that those owners might match the purchase offer. As a U.S. District Court noted, under the Indian Land Consolidation Act a “Tribe's right to match prior to approval of an application to terminate trust status does not equate to a blanket right to purchase without competition. While the Tribe may indeed have the opportunity to purchase trust land at appraised fair market value, this is only true once the sale is advertised, an open bidding process is conducted, and no other offers for the purchase price are made.” Middleton Co. v. Salazar (2009). Interior will need to get its printers ready to issue serial, not solitary, purchase offer notices to the fractionated masses.

No matter your opinion on Interior’s nascent Indian land consolidation plan and buy back program, there is no doubt this latest plotline in the tortured story of federal Indian trust relations will not be dull – or for the faint of heart.

Gabriel S. Galanda is a lawyer with Galanda Broadman, PLLC, in Seattle, and a member of the Round Valley Indian Tribes. These opinions are his own and not those of his tribe or any tribal client.

 

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Anonymous's picture
They don't have money. Keep your land develope it yourself. Lease what your can never sell the land.
Anonymous
Two Bears Growling's picture
This section of the Cobell Settlement is going to stir up one heck of a hornet's nest & stink I'm afraid. How about the rest of you folks here?
Two Bears Growling
Anonymous's picture
So the American indians are sent to reservations told that it is their "sovereign land" then that land is appropriated for whatever minerals or money rendering project is there and whatever schools, medical facilities or whatever that are built are what a gift?? and then told this convaluted tale of how they can be compensated or of course Sell what is left of the so called sovereign land ? This is so much double speak its just embarressing. I have seen first hand too many that live on the reservation struggle to exist without leaving their communities. it is indeed "divide and conquer" chapter two
Anonymous
indianmedicine's picture
I agree with the Lease Option for "Long Term Benefits".
indianmedicine
Anonymous's picture
So not a afraid, as I thought and I preached to others what a mess this is going to be or sticky from the start. Because the Fed. Gov. knows where the money is at or grab however you see it most are not going to sell, we know it and so does the individual Indian Nations and the Fed .Gov. I know my Tribe is part of the top 40 with Millions at stake if not in the Billions. Not enough money can buy Culture in my book and my book is pretty thick with Culture enriched with wisdom's past....Sorry my land is not for sell. Mine not fractionated as the Gov. purports. and will never grow to the size of 500 members ever owning in 500 yrs. and my family is large and it still will not grow to that number....Hard to believe in the propaganda that comes from a agency that now, in this part of the litigation needs to formulate a land consolidate dept. to understand the enormous task of the real estate that is involved to begin with, is redundant when this should be the very task of the DOI which already has the records supposedly and if they do then they know the enormous effort this is going to be and they gave themselves 10 yrs to settle. So we will hear from time to time the rhetoric and the propaganda that is now happening and you cannot help but think shoulda. woulda, coulda. And then most Indians of their Nations understand how this will also play a role in the Nations Treaties with the U.S and then how this is going to flow down the individual Nations constitutions to those who have established Gov. with their tribes and I see the what I coin as the Triangle that this will form and the round table game that will play in this triangle and why this will take as long if not longer than 10 yrs and then those that will have passed away will not see their day of reconciliation with the Gov. as they may see it.......In the center of the Triangle is you and me. Who will win in the end when no one will sell? The Fed Govt. Why? If there is no land consolidation and there will be some but very little for the few that do relinquish their land back to the tribe, and then there will be those who will chose the complete opposite and will not sell and that money goes back to the Govt. How's that for chump change? My argument is that money that was awarded as a part of the Cobell suit is just that 3 Billion.
Anonymous
Anonymous's picture
henny penny the sky is NOT falling. In fact, the sky is far from falling. perhaps instead of unwarranted criticisms and attempts at riling up allottees, the author could provide some thoughtful suggestions for improvements. That is, after all, what the DOI is trying to garner from it consultations. We, tribes, have the ear of the Dept and a voice. Lets not use our voice so critically that we are disregarded as attempting to slow the process, which WILL benefit tribes. If even 40 tribes benefit, don't we all??
Anonymous
Anonymous's picture
Are there any indications the pattern of purchases indicates interest in mineral rights?
Anonymous
Anonymous's picture
Tribal governments should never be allowed to own land. Capitalism, sometimes known as free enterprise, is built upon the theory of land ownership. Removing land from the reservation economy hurts those entrepreneurs from developing the land. Often tribal government sublease the purchased allotments for money to pay their tribal councils and administrations; the main motivation for tribal governments to buy land from individual Native Americans still owning rights in an allotment. Reservations bounded individual allotments; before the IRA, these allotments were taken for failing to pay taxes, for defaulting on loans or just outright sold, now it is tribal governments doing the same, depriving their economies the right of property ownership. How the Cobell Settlement have been perverted to maintain the same circumstance that led to the settlement in the first, only goes to show just how distant the people are from the courts, that the Cobell Settlement will only continue the reservations' depression and promote the mismanagement of land and resources...
Anonymous