FOR IMMEDIATE RELEASE Contact: Philip Smith (202-661-6350) SENATE COMMITTEE'S REVIEW OF FEDERAL MISMANAGEMENT RANKS INDIAN TRUST FIASCO ONE OF WASHINGTON'S "TEN WORST" Interior's Mishandling of Funds Joins Pentagon Waste, Medicare Fraud As Glaring Examples of Need for Reform WASHINGTON, D.C. - A U.S. Senate committee's review of federal mismanagement and the urgent need for sweeping reforms has ranked the Interior Department's botched handling of the individual Indian trust system No. 2 on a list of Washington's "Ten Worst" cases of waste, fraud and abuse. The report, "Government at the Brink," released Tuesday [6/5] by the Senate Government Affairs Committee, grouped the failed individual Indian trust with Pentagon and NASA financial mismanagement, Medicare waste, security violations at the Department of Energy and unemployment insurance fraud. Only Boston's "Big Dig" - with a 525 percent cost overrun - outranked the Indian trust as an egregious example of government ineptness, the committee said. Under the headline "Abusing the Trust of American Indians," the report said, "The Department of the Interior does not know what happened to more than $3 billion it holds in trust for American Indians. A judge overseeing this case called it 'fiscal and governmental irresponsibility in its purest form.'" In class action litigation, Cobell v. Norton, federal courts have ruled that Interior owes the approximately 500,000 trust beneficiaries a strict accounting for every dollar going into and out of the trust since the late 19th century. At the same time, the courts have found that because the government has destroyed or lost most of the trust records, it has no reliable way of knowing what became of tens of billions of dollars in revenue belonging to Native Americans. The committee report, unveiled by Sen. Fred Thompson (R-TN), is subtitled "Urgent Federal Government Management Problems Facing the Bush Administration." The review focuses on four major areas where it says far-reaching reforms are needed: Workforce Problems, Management Problems, Information Technology Problems and Overlap and Duplication. At Interior, it says, "Management of the $3 billion in Indian trust funds is left to untrained and inexperienced staff in the Bureau of Indian Affairs. As a result, trust beneficiaries have no assurance that their account balances are accurate or that their assets are safe." "Once the committee realizes," said lead plaintiff Elouise Cobell, "that $3 billion is only the current stated balance of the trust - and that the historic mismanagement amounts to 10 times that much, and probably more - we're confident that Interior will be moved up to No. 1. Medicare fraud pales in comparison to the steadily worsening condition of the trust, in terms of both financial loss and the lack of security in the system." The full report is available at http://www.senate.gov/~gov_affairs/vol1.pdf