Inside the
Bureau of Indian Affairs

an Expose' of Corruption, Massive Fraud and Justice Denied
Advocating Freedom for American Indians
and Federal Government Reform
by David Henry

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An explosive expose' of the fraud, corruption and greed in the Bureau of Indian Affairs. Written by a man who was labeled the "Whistleblower" and fired for his outspoken attempts to stop the abuses, this book blows the lid off the BIA. One of the most dangerous books on Thunder Mountain Press' list. Other traditional publishers refused to publish it because it is so controversial. Fully documented by the author with letters, reports, and press clippings, this one will turn your stomach and make you call or write your Congressman.


The telephone call did not prepare me for what was coming. The call came to my basement apartment in Billings, Montana, from an Indian Tribal Chairman. Chairman is the title used by the elected head of an Indian Tribe.

The call was from Richard Real Bird, Chairman of the Crow Tribe. I knew who he was, although we had never met. He said he'd heard about me, and invited me to "come out and talk to a few people, and have something to eat."

When I kept that date a few days later, I found several hundred people gathered on the Crow Indian Reservation to hear me speak, and was told that I was the guest of honor of Crow Nation. I described my experiences as a former employee of the Bureau of Indian Affairs, what I had discovered there, and how this resulted in my being fired as a whistleblower.

Following a feast for those many people, I was included in a "creation" ceremony, and then the meaning of that was explained by the senior Elder present. He said that they had linked my creation with the Crow, and from that day forward I was marked as one of their own.

This book will explain how that all came about, but that particular meeting is not the end of the story. It was a demarcation point, where I realized that my actions as an employee of the Bureau of Indian Affairs had a powerful effect on the lives of many thousands of people. I would widen my personal search for justice, to include them also. This search would result in personal hardships for me, and for Chairman Real Bird it would lead to a federal penitentiary.

My employment with the Bureau of Indian Affairs lasted less than a year, but my struggle with that organization has continued, at last count, for some nine years. You can count on the fact that the Bureau sees me as a threat, that my words have brought strong reactions from them, and that they have done their best to discredit my testimony and keep me silent.

As this story unfolds, you will find that it is not yet over, and you will be offered a role in it to determine the outcome. It's not a "virtual reality" game or entertainment, because the purpose is deadly serious, and it is a true story, not fiction.

It's a first-person story about my experiences with the Bureau and with Indians, not a research project by a professional writer. I am one of the characters in this story that tells about the horror of justice denied, and the struggle of Indians for freedom and basic human rights. There is political scandal, billions of dollars are missing from Indian trust accounts, and there is a major Government cover-up. Taxpayers should be alarmed when our Government is corrupt and tax money disappears. Federal employees will cringe at another gag-rule that inhibits their honest behavior, and all citizens should be furious when the Bill of Rights is defeated by Government administrators with the assistance of our courts and federal judges, including the Supreme Court. Free speech simply doesn't exist for Federal employees, at least not where it conflicts with political greed for money and power.

Your help is needed to insure simple justice, make it possible for Indians to survive, and to require the Federal Government to be responsible for its actions. That's a huge undertaking, but by working together it can be done.

I will ask you to join me as an advocate for the human rights of America's Indians, and to help make the world a better place for our children. Together we can uplift humanity, and with compassion we can restore dignity to the lives of our long abused Indian brothers and sisters.

After the events are described, and the facts and arguments presented, you will be invited to make your judgment known. Your decisions, along with those of other readers will be the court of last resort. You will decide the outcome of this story and the fate of the characters in it.

The first chapter gives some background about myself to make it easy for you to see through my eyes. We have much to see together. My life was radically changed by this journey into Indian Country, and I believe your spirit will be touched by the story.

Chapter 2
Introducing the Bureau of Indian Affairs

In writing this section of the book I have the advantage of roughly ten years of experience in dealing with the Bureau of Indian Affairs. You might find this first part of the book rough going, because you don't share that intimate knowledge, and the ideas and conclusions presented here won't all be supported "in place" with hard evidence. As you read further, the evidence will be presented and the basis for my conclusions will be made clear, and you will be able to fit the pieces together. If you get over loaded at this point, then skip ahead to later chapters that have more appeal to you, and later return to this section. Gradually it will make sense to you. as the bits and pieces come together in your own mind.

To first give you some idea of how these ideas and conclusions developed, I'll provide you with two letters that appeared in an area newspaper, the Bighorn County News. This is a weekly rural newspaper that serves the Crow Reservation area. First, a letter I wrote that was printed in the July 29, 1992 edition of that newspaper:

To the News: Recent newspaper stories describe financial problems found by U.S. Inspector General audits regarding slipshod accounting practices and misuse of travel funds under the control of financial manager Bill Benjamin and area director Richard Whitesell. This revelation is simply one more item in BIA's history of repeated fraud against both U.S. taxpayers and the Indian citizens they supposedly serve in a position of trust. This story begins in 1849, the year BIA took over its role from the U.S. Army, and since then BIA has continued as an exploiter of Indians, doing the bidding of corrupt federal politicians. As compensation for dirty tricks it keeps a bit of the loot for BIA supervisors, with the implied consent of the politicians. I know this from intimate personal experience. As the first CPA ever employed by BIA in Billings, my audit reports described millions of dollars in cash belonging to tribes and individual Indians [that are simply missing], and similar mischief in irrigation projects. There was fraud or missing money in each operation I was assigned to audit. Bill Benjamin used intimidation to get me to change my audit and "soften" the facts, but I refused to do so and with Whitesell's approval, I was fired for "insubordination" in 1986.

I spent the next six years on whistleblower appeals through the specified government agencies, which was fruitless, and continued on (without legal help) up to and including the U.S. Supreme Court. All of the agencies and courts sidestepped the Constitution (free speech, etc.,) by refusing to hear the case against the BIA. To do so would attack the political patronage system. Subsequent investigations and audits fully agreed with the facts reported in my audits, but being correct was not good enough. Although I have written thousands of letters, and the facts have been investigated repeatedly by the Inspector General, a Senate Special Investigative Committee, outside CPAs and the like, the American people just don't care enough about government corruption or the abuser heaped on Indians to insist on a just solution. While the taxpayers allow government corruption, BIA will continue to fleece Indians until the last one has nothing left worth stealing. If you gag at this, or object to the lack of free speech for a federal auditor, then write to Senator Daniel Inouye (Select Committee on Indian Affairs), Washington, DC 20510-6450. He personally investigated my case, and calls it an injustice.

ack-ko-shish (Whistler) David L. Henry, CPA Billings

Next, a response from another reader that appeared in that same newspaper on August 12, 1992:

To the News: I particularly liked Mr. David L. Henry's letter to the News. The letter shows to what lengths the BIA and other agencies, as well as the courts, will go to cover up their unlawful, unconstitutional activities. Me thinks that Mr. Real Bird was caught up in this web of intrigue as well. And to add insult to injury, the BIA and courts kept Mr. Moran (former superintendent) hidden, supposedly, in Nevada so that he could not be made to testify to the efficacy of what Mr. Real Bird said. The result, of course, was a foregone conclusion; do not pass go, go directly to jail. Mr. Henry is lucky in one respect, and that is that they did not dream up some charge against him, and give his a railroad job too. In my opinion, the government and its agencies have become so corrupt in most cases, that the situation will soon reach the point of being totally intolerable. (some unrelated comments omitted).

G.L. Clark, Roundup, Montana

The name "Bureau of Indian Affairs," or BIA, doesn't mean much to most people. Those in the Western states have heard the name, but still this is an organization that keeps a very low profile, and for a very practical reason. The work that this Bureau does is nothing to brag about. The Bureau has a very important role in this story, and in the lives of Indians, so you'll need to know what it is and what it does. You'll begin to hear some negative things about BIA, because my knowledge is colored by later experience.

I would uncover the largest fraud in Montana in this century, and one of the largest in the history of the United States. It is a fraud that has been kept concealed, and the concealment has allowed it to grow like a colony of termites hidden inside a wall. Like many frauds it is aimed at those with few defenses, in this case at American Indians. The fraud is so large that it spills over to touch the pocket of every taxpayer, including yours and mine. When I started to work, I was not aware of all that, and I just took for granted that the Bureau of Indian Affairs operated in a way that was supportive of Indians. I was terribly sorry to gradually find out that my assumption was completely wrong.

People like to see the world through rose colored glasses, because reality can be tough to face each day. The fictions that BIA covers itself with have grown to the point of institutional madness. BIA tries to show a healthy face to the world, but the flesh under it's skin is rotten. BIA is skilled at creating a facade, and the people who make a living by exploiting Indians also cover their deeds with nice words. They, not Indians, are the beneficiaries of BIA, and this will be obvious before we are done. The word "they" does not represent some vague conspiracy and I'll describe who these people are as we go along.

The Bureau of Indian Affairs (BIA) is part of the U. S. Department of Interior. The head of BIA is an Assistant Secretary (for Indian Affairs), directly under the Secretary. Both are political appointees, replaced when a new president is elected.

Just below the Assistant Secretary is BIA's chief career employee, the Director of Operations, who during this period was William Ragsdale. If this was the Navy, Ragsdale's job title would be "Chief of Naval Operations," and it would be filled by a four-star Admiral. BIA's career employees either go along with political influence, or else get another job. This is a pyramid shaped hierarchy, military style, which insists on political loyalty. BIA employees devote a lot of time and energy to basic survival in this atmosphere, trying to look good instead of trying to be good. A hierarchy is great for commanding armies, but not the most efficient way to deliver social services, which is a major part of the Bureau's assignment.

In the past the Assistant Secretary was called a Commissioner, and BIA was (and sometimes is still called) the Indian Service or Indian Bureau. The Assistant Secretary for Indian Affairs during my time of employment at BIA was Ross Swimmer.

Swimmer was feared and distrusted by many Indians, although he was a Cherokee. The fact that large numbers of Indians called for Swimmer's removal from office had no effect on BIA. Turncoats are much in demand, every society has them, and BIA is a place where Indian turncoats control all of the higher jobs in supervision and administration. You'll see lots of examples of this as the story unfolds.

Note..."Ross Swimmer, the former chief of the Cherokee Nation and head of the Bureau of Indian Affairs (BIA) under President Reagan, will put together the new Bureau of Indian Trust Assets Management. The position was created a few weeks ago by Interior Secretary Gale Norton following threats of a possible contempt citation by U.S. District Judge Royce Lamberth who is overseeing the Cobell vs. Norton case. The Case is a class-action lawsuit on behalf of 300,000 Indians that claims more than $10 billion is owed to Native Americans due to haphazard accounting and general mismanagement since money was first put in trust for the people."

Swimmer said he is also not bothered by the allegations that the BIA destroyed records. "I don’t think it was intentional," Swimmer said. "You’ve got one hundred year old records and most agencies don’t retain then, they put them in some other form, and I think that’s what happened."

The closest estimate Swimmer would give to how much money the Indian people are owed was "between one dollar and ten billion dollars."

This, as of 12.3.01.

It is a mistake to think that since roughly 80% of BIA's personnel are of Indian ancestry, it is a "pro" Indian organization. If you have read about the Jewish holocaust, you know that some of the most brutal treatment came from the "Capos," or petty officials. They were not Nazis, but were Jewish prisoners who would torment their fellow prisoners for a reduction in the torment and starvation that they in turn were subjected to. The psychology is no different here; Indians are suppressed by BIA Indian employees as well as by non-Indians. BIA employees become organization people, and most do what is required by the organization.

It is nothing new for oppressed people to turn on their own; history is full of such activity. It is a common human failing, not something that just Indians do. Not all BIA employees are turncoats, but it's difficult to move very far up in BIA without selling out. Indians call these sell-out people "apples," red on the outside but white just under the skin. Norway had one named Quisling, and it's a synonym for traitor.

Turncoats, sell-out, apple, Capo or traitor, they are all names that describe a universal human weakness and failing. In human social and political development, in particular in war, it has always been necessary to select leaders, and then to require the followers to be loyal to those leaders, and to who ever wields power. Serfs doffed their hats to the squire and the "gentry," and all bowed to the prince. To this day the military enforces a caste system, where officers are "gentlemen" and their wives are "ladies," while the ranks are referred to as enlisted men and their wives.

Our present Indian reservations are not in the same league with concentration camps, but the principal is no different. BIA's Indian employees do what they are told, or else, like me, they are out of work. BIA serves as a colonial office to exploit Indian land. When Indians object, BIA looks for ways to make them shut up or to punish them. At many reservations, you either work for BIA or suffer extreme poverty. Indians have learned to live with this, and are forgiving of their own people in BIA who often oppress them. At least they bring home a paycheck, and some find work at BIA that does not do any direct damage to Indians.

The fact that many BIA employees are Indian does not make BIA worthy of Indian trust. BIA is a "white man's" institution. Indians speak of their relationship with BIA as a "love - hate relationship." They enjoy being special Americans with their own federal agency, but at the same time resent what they see as heavy-handed and irresponsible treatment by BIA, which is a gentle way to describe theft and abuse.

Many Indian people and BIA employees (in private conversation) would tell you that BIA continues the former Army role of suppression, intimidation, and exploitation of Indians and of Indian lands. From my own experience in working for BIA, and subsequent developments and investigations, I agree with them. By the time you get to the end of this book, I believe you will fully understand and accept the negative remarks that I am making here - they will be supported further on in this book.

It's interesting to take a historical look at the federal administration of Indian affairs and of Indian lands. The history books, records of congressional hearings, BIA's own records, and my many conversations with well informed Indians, all lead me to this conclusion: The record of federal administration of Indian affairs and Indian lands is one of repeated fraud, corruption and exploitation, with the direct or implied involvement of federal politicians. Many Indian people say that those who gain from this exploitation are white land owners and operators, including mineral and timber interests, and the federal politicians who give favors (at Indian and taxpayer expense) as a matter of political patronage, and you will find much supporting evidence in this book. I will try to avoid the trap of saying it's all a giant conspiracy, because it is more than that. The actual thrust of BIA's actions are generally local in nature, involving the wishes of the local organized white landowners and those who lease or extract minerals from specific reservation lands. The larger conspiracy, although I'd like to avoid that word, is simply the mind-set or general pattern that exists in politics driven by money. Politicians will do what is wanted by those with the means to buy them, and this is a very profitable, self-serving business, which operates above and beyond the law.

Congress has no direct administrative control over BIA's daily operations, but makes the laws that govern Indians, reservation lands, and BIA. Congress controls all federal money, which gives it indirect control over BIA, and tied to this is the motive of political patronage -- there is a pay-off.

Back in 1911, Indian Commissioner Robert Valentine stated: "Indian affairs are ... a field for the grafter ... the land and the monies of the Indians offer a bait which even the most sated will not refuse." In 1969, Senator Edward Kennedy said: "The BIA is notorious for its resistance to reform, to innovation, and to discharging its responsibilities in a competent and sensitive fashion."

Here are some of the things I learned about the Bureau that will help you as the story unfolds.

The Bureau started out in 1849, taking over functions previously handled by the United States Army. That year, 1849, should ring some bells, because that's the year the "gold rush" started. Prospectors were flooding into the Indian lands to dig for gold, and the federal government was looking for new ways to prevent Indians from resisting this most recent invasion of their homelands.

What does this Bureau do? It is the primary federal Government agency that has a responsibility for Indians. The words responsibility and trust always come up when referring to the Federal Government's relationship with American Indians. The term trustee implies a high degree of responsible care, and BIA is trustee for Indians, as our laws and courts have decided. We'll say more about what BIA does, but for a minute let's take a close look at this "trustee" business.

The Supreme Court declared many years ago that the Federal government was exempt from all lawsuits by citizens, using a legal concept or "doctrine" called Sovereign Immunity. This came from the old days of kings in England, where the king was not willing to let "his" judges in "his" courts and on "his" payroll, give him a hard time or limit his authority. Serfs and peasants in England had very few rights, and using the king's courts to make the king behave was unthinkable. What applied to the king applied to the king's men, so the entire English administration was exempt from lawsuits by the people. No complaints about government administration could be taken to court. Although many Americans came to this country to escape government by kings, our Supreme Court imported this "common law" feature of feudal England into the United States, simply by edict, and it applies today. Since we don't have kings, it applies to the President and the President's men, the entire executive branch of government. It limits the rights of all United States citizens in relationship to government, and since Indians are under tight control by BIA, (part of the executive branch) this "doctrine" is something that they can't escape.

Over the years the absurdity of the doctrine led to a few exceptions, one being a law called the "Federal Tort Claims Act," which lists some actions for which the federal government CAN be taken to court. Still, the doctrine of Sovereign Immunity is alive and well, and is the general rule that shields federal agencies from lawsuits. You can see that although BIA holds the power and authority of a trustee, there is no way the beneficiaries (Indians) can hold it responsible for doing an adequate or trustworthy job. This might be news to you, but Indians are painfully aware of this limitation on their rights. It's a one way street. BIA has power OVER Indians, but can't be held accountable for what it does TO Indians.

There is no federal law against fraud, if the fraud is done by a federal employee under "the color of his office." In their private lives, they are subject to state laws, so you're protected if a federal employee (in his private capacity) does some harm to you. But if that federal employee does something remotely connected to his job, he is fully protected by sovereign immunity, and the person (and his agency or bureau) are untouchable. Indians have no protection from fraud done by BIA, and as you will see further on, there is no shortage of fraud at BIA. The result is that the words "trust" and "responsibility" are deceptive. BIA has no liability and can not be taken to court. This produces pretty words and empty promises to cover irresponsible behavior. In Indian eyes, "the whiteman" can feel good about himself while denigrating and stealing from Indians; just one more example (in Indian eyes) of the whiteman's sickness, endless greed.

This federal Bureau, BIA, performs functions defined by law, which means that Congress is where it all begins. Congress controls the budget that finances BIA, and what BIA does is set by that budget, with specific functions or operations called projects. The budget sets aside money for each project and for general BIA administration.

In this way the budget for the Billings Area Office is produced. The Area Office budget includes the reservations within it's area, and the dollar amount for each "project" is known at the start of each year. A project can be something like road building, police protection, social services, and the like.

BIA's responsibilities that are assigned by Congress consist of two types, trust and direct. These are defined by treaty agreements, by past and current federal laws and court cases, and by tradition and common usage. The laws relating to Indians are gathered into one book, and you'll find that volume in the Code of Federal Regulations, CFR-25. Every BIA employee has a well worn copy of those "rules and regulations," and Indians have copies of this "BIA Bible" in their tribal offices.

Concerning Federal Government financial accountability, the Constitution (Article I, Section 9, Paragraph 7) requires: .".. and a regular statement and account of the receipts and expenditures of all public money shall be published from time to time."

If you would like to see a copy of the financial statements for the Billings Area Office, or any of it's Indian reservations, you won't be able to find one. BIA claims that such reports don't exist.

I can tell you that BIA does keep books, segregated by area office and reservation. I have seen the general ledger (BIA's "books"), and a copy is available in Billings. The general ledger indicates that BIA "keeps books," but if you want to understand financial transactions, you need a financial statement. Remember that I'm a CPA and I worked there. With today's computers, it is a simple matter to order a printout or financial statement by location, but BIA will tell you it can't produce the reports.

Using the Freedom of Information Act, I tried to get a copy of BIA's financial statements later, after I had been fired. I had been talking to newspaper reporters (from the Arizona Republic) , a major Phoenix, Arizona, newspaper, who tried to get a copy of BIA's financial statements, but none of them had any luck.

As an accountant I knew how to describe what I wanted, and I knew the names of BIA personnel and the offices in which the records were kept. It took months, and I wrote to many people at several BIA office. The process wears you down, and there were delays and referrals but not one honest answer.

Months later I received a blurred copy of several pages of numbers. As a CPA I know how to read financial statements, but these figures shed no light on BIA's activities, so the request was defeated and the time was wasted, like that of the reporters before me. Score zero for the Constitution.

BIA spends a lot of time and effort to hide financial information from reporters and critics, and even from it's own employees. There are no financial statements for reservation employees or even for area office accountants, which is what I had been as a BIA employee. Does BIA defeat the Freedom of Information Act, that was designed to make government accountable? Does it ignore the Constitution? You have some facts about that and can reach your own conclusion.

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