The Bureau of Indian Affairs has acknowledged that it paid a $5,000 bonus last year to a temporary employee who helped the Interior Department agency establish a contract with a West Coast bank that it recently was forced to cancel.
Officials of the Interior Department agency defended the cash award to Arlene Brown, a GS-13 management analyst, insisting that Congress had forced the agency to abandon its much-heralded contract with Security Pacific Bank of Los Angeles.
Under the contract, which Brown helped develop, the California bank was to take control of the nearly $2 billion in trust funds that the Interior Department holds for Native Americans.
When the contract was signed, BIA officials said it was the best hope for reconciling what happened to funds in the more than 300,000 individual trust accounts.
Congress repeatedly has attacked BIA management of the trust, charging last year that the agency had lost $17 million to $19 million of the funds because of poor record-keeping.
A spokesman for Interior Secretary Manuel Lujan Jr. said Lujan is aware of the criticisms and hopes to address many of them in a speech today to a "Indian Leaders' Summit" in Albuquerque, N.M.
Lujan will disclose his plans for restructuring the BIA's management at the one-day meeting to which he has invited more than 500 elected tribal leaders. "He is going to tell them that we must do a better job," said Lujan spokesman Steven Goldstein, "that we must direct our energies away from ways that are not working."
Among the secretary's proposals will be one for changing duties of the assistant secretary for Indian affairs, giving him a stronger role in developing policy and divorcing him "from day-to-day management" of bureau operations, Goldstein said. In the past, the BIA was run by a presidentially appointed commissioner, but the position has been unfilled since 1978.
That was when the Carter administration named an assistant secretary to run the BIA, a practice that the Reagan and Bush administrations have continued until now.
At a hearing of the House Government Operations subcommittee on environment, energy and natural resources this week, Chairman Mike Synar (D-Okla.) described the BIA trust as a "bureaucratic swamp."
"Despite many inspector general reports and two hearings by this panel, officials at the BIA cannot say that management and accounting problems with the trust fund have been corrected," he complained. "Instead, they tell us to wait until 1997 or later."
BIA officials disclosed they had canceled the bank's contract effective Sunday because the agency had been unable to reconcile how much money was in each account. That will take another five years, agency officials said.
Carl Shaw, a BIA spokesman, said the agency had paid the bank about $934,000 under what was to have been was five-year contract that would have placed Security Pacific in charge of the funds. However, Congress insisted that none of the funds could be given to the bank until the BIA had reconciled all the accounts "back to the earliest date possible."
Shaw said the BIA had hoped that the bank would be able to do that under the contract. The agency has drafted two proposals for private businesses to audit the accounts, he said.
The BIA spokesman also defended the award to Brown, saying she held "a heck of a lot of meetings" around the country, alerting Native American groups that the California bank would be taking control of the funds that the BIA has managed for 153 years. Much of the work for which Brown received the award was completed before Security Pacific was awarded the contract, Shaw said.