WASHINGTON — As the federal court tries to sort out the alleged mismanagement of the Utah Navajo Trust Fund, Congress starting hearing options Thursday on how it should handle reassigning responsibility for the fund now that the state no longer wants to manage it.

The Interior Department says it cannot take over the fund and there are different opinions among Navajo nation members as to who should take over, based on witness testimony at a House Resources Committee hearing Thursday.

On top of the differing opinions, this is something Congress has never had to deal with before, said Rep. Jim Matheson, D-Utah.

Matheson does not sit on the committee, although Reps. Rob Bishop, R-Utah and Rep. Chris Cannon, R-Utah, are members. Matheson asked Committee Chairman Nick Rahall, D-W.Va., for the hearing, which falls under the committee's jurisdiction, because the Navajos are in his district and "there are legal liabilities that need to be sorted out," including whether the state can just opt out of a federal responsibility.

"I am not aware of another instance in which the federal government has directed a state to receive and expend money for the benefit of individual Indians," Rahall said.

Congress created the oil trust in 1933, mandating that 37.5 percent of royalties from gas and oil exploration on Navajo land be placed in a trust and administered by the state of Utah through the federal government. The state will no longer manage the fund so it will be up to Congress to figure out what to do next.

"It kind of fell into Congress's lap," Matheson said.

Tani Pack Downing, deputy chief of staff and general counsel for Gov. Jon Huntsman, Jr. said the state will wind down active management of the find and "simply protect the fund and other assets until a successor is determined."

"The state has no preference for a successor management entity other than a desire to see that the royalties continue to flow to the benefit of the Navajo residents of San Juan County," Downing said, adding that Congress can only determine the successor.

Matheson also said he has no preference what entity takes over the fund, but his main concern is that the 37.5 percent of royalties now allocated to Utah remain in Utah. He said the challenge is not just the money but the real estate or other assets the trust has. Matheson will also have to figure out the specific language legislation determining the future of the trust would need to include and Congress will have to pass a law.

Ross O. Swimmer, Special Trustee for American Indians at the Interior Department said it would not be the appropriate entity to take over the fund. Instead, it would be better left to the Navajo nation or a non-profit organization tasked specifically to manage the money.

'The Department is aware of the Navajo Nation's position expressing its desire to manage the trust and disburse funds to the Utah Navajo beneficiaries consistent with the current disbursement and percentages," Swimmer said. "The (Bureau of Indian Affairs) consistent with our government to government relationship with the Navajo Nation, acknowledges and respects the position of the Navajo Nation as it pertains to the Utah Navajo Trust Fund."

Joe Shirley, Navajo Nation president, expressed the desire to take over the fund, adding that from the committee's perspective it "is the only position consistent with the policy established by the United States Congress to recognize the sovereignty of the Navajo Nation and the right of the Navajo Nation to self-determination in matters which concern the Nation's lands, resources and citizens."

Shirley said the Navajo Nation "has a proved record of acting as a trustee."

"The Navajo Nation manages and has successfully increased it own trust fund monies through the expert guidance of its Investment Committee and outside consultants," Shirley said.

But Davis Filfred, Navajo Utah Commission Chair and Aneth, Red Mesa and Mexican Water Chapters Council delegate had concerns about the Navajo Nation taking over the fund.

Filfred said the beneficiaries are afraid that Navajo Nation might change the allocation or beneficiaries of the trust.

"It is therefore important — and this is consistent with our position statement — that federal legislation maintains the state quo," Filfred said.

He said he would rather see the Utah Health System be the trustee rather than the Navajo Nation.

"Mismanagement has happened already in the past," Filfred said after the hearing. "They want to manage their own money," he said, referring to the people of Aneth.

But Clarence Rockwell, executive director of the Utah Navajo Commission, said the commission supports the Navajo Nation taking over the fund.

"It is imperative that the Utah Navajo Trust fund be grown and managed successfully not only to pay for needed expenditures in the short term, but for the benefit of future generations of Navajos in San Juan County as well," Rockwell said.

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