The federal government gives American Indian tribes $12 million worth of free investment portfolio management and advice each year - and should start charging for it, a new study says.
The Interior Department inspector general report says tribes may choose to have the Bureau of Indian Affairs or outside brokers manage their accounts. Brokers charge for services, but the bureau has not."The bureau maintained approximately 290 portfolio accounts and 290,000 Individual Indian Money accounts" totaling more than $2.2 billion that were invested in a wide range of securities, the report said.
"The task of accounting for these funds and their earnings is both time-consuming and expensive and could not have been envisioned in 1934 (when the bureau began managing Indian trust funds), let alone in treaties dating back to the 1800s," it said.
Most Indian trust funds come from income off Indian lands, settlement of claims against the government and royalties from oil, gas and minerals.
The Bureau of Indian Affairs opposes charging such fees, according to its written response to the report. Such fees would undoubtedly be unpopular with Indians who have charged the government has handled their accounts poorly.
The bureau also said - contrary to findings by the inspector general and a legal opinion from Interior's solicitor general - that "management of the trust funds is not an optional service . . . but is a mandated responsibility set in place by Congress as a result of the treaties and unique laws which have provided special claims awards to tribes and individual Indians."
The inspector and solicitor said laws and administrative rules calling for federal agencies to charge fees where possible to recipients of special services would allow the bureau to start charging management fees.