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Court report finds undervaluation of Navajo lands
Thursday, August 21, 2003

Navajo landowners are losing out on millions because the Department of Interior is not living up to its trust responsibilities, a court investigator said in a report on Wednesday.

Through a site visit to the Navajo Nation and an examination of government documents, special master Alan Balaran found that tribal members are receiving less for use of their land than private citizens and even other tribes. For years, the Bureau of Indian Affairs has allowed oil and gas companies to pay Navajos far below market value, the report stated.

The chief appraiser for the Navajo allotments admitted erasing trust records, Balaran noted, and could not support the values he assigned to trust land. Nevertheless, the BIA approved rights-of-way on Navajo lands for $25 to $40 per rod, a unit of distance, while private landowners received between $170 and $575 per rod, the report said.

"By allowing this disparity to continue unchecked (especially in the absence of all documentary support), [Interior] denies Navajo allottees not only 'just compensation," he added, "but a maximization of financial reward from their leasehold interests."

A BIA realty officer admitted that "Navajo allottees do not receive 'the benefit of their bargain,'" when negotiating with oil and companies who control the process with little oversight from the federal government. Many landowners are elderly tribal members who speak little or no English, and Balaran said they signed documents with just a thumbprint.

"It is doubtful," Balaran wrote in the 39-page report, "whether Navajo allottees are receiving 'fair market value' for leases encumbering their land. It is certain they are denied the information necessary to make such a determination."

The loss for a 20-year right-of-way could run in the millions, according to the calculations in the report. In one example, an oil and gas company paid a private landowner $3.7 million, or $575 per rod, for a 40-foot-wide right-of-way covering 20 miles and 97 acres.

Navajo tribal members, however, would receive just $8,000 per year for the same right-of-way. Due to fractionation, an individual allottee would be paid even less.

Navajo Nation President Joe Shirley Jr. reacted to the report yesterday by accusing the government of fraud. "[E]ither by negligence or design, the Bureau of Indian Affairs has again aided in swindling Navajo people who own individual trust allotments," he said. "The undervaluing of rights-of-way, and the destruction of the documents in violation of the court's order in the Cobell litigation, is simply part of pervasive pattern of Interior dishonesty and arrogant federal control."

Irvin Chavez, president of the Shii Shi Keyah Allottee Association, a group which represents about 6,000 Navajo landowners, agreed wholeheartedly with the special master's report. For years, the BIA has refused for help Navajos while oil and gas companies trample over their rights, he said.

"There's a lot of misinformation," he said yesterday. "There's a lot of deception that goes on out there." Elderly Navajos are often presented with blank leasing documents that are filled in a later date, he said.

A lawsuit filed by Chavez's organization resulted in the creation of the Farmington Indian Minerals Office (FIMO), a unique entity within the Interior that houses the Bureau of Land Management, the Minerals Management Service and the BIA. It is designed as a "one-stop" shop for Navajo landowners with oil and gas assets in the Four Corners region of the Southwest.

FIMO controls the oil and gas leasing process but the BIA has held onto the rights-of-way and related functions. Contacted as his home in Farmington yesterday, FIMO director Kevin Gambrell, who has been on administrative leave with pay since May, said that he has warned higher-ups about the undervaluation of Navajo lands since 1996, when his office was created. He has filed a whistleblower complaint, charging that Interior officials are retaliating against him for contacting the special master in the Cobell Indian trust fund case.

In early 2002, the BIA was stripped of its land appraisal function due to concerns over lack of independence. All appraisers now report to the Office of Special Trustee (OST), which is headed by Ross Swimmer, a Bush appointee. Anson Baker, the chief appraiser cited in the special master report, has since been transferred to Portland, Oregon, and continues to work on appraisals.

Swimmer is considering whether OST will join a department-wide effort to consolidate land appraisals. In an interview last week, he said a separate unit will improve services, ensure more accurate appraisals and reduce competition for scarce resources.

During the recently concluded Trial 1.5, Swimmer acknowledged that Indian lands are valued less. It's "just a matter of bureaucracy. If I can lease the land next door at a comparable price then I would do that rather than lease the Indian land," he testified in court on June 23.

A department spokesperson, Dan DuBray, had no comment about the report itself.

Sen. Jeff Bingaman (D-N.M.), the ranking member on the Senate Energy and Natural Resources Committee, said the department "has some explaining to do. The Navajo people have played a significant role in providing energy resources to the Southwest and this report suggests that they haven't gotten what they are due. We need to get to the bottom of this immediately, and make corrections where necessary."

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