Indian Issues:

Cheyenne River Sioux Tribe's Additional Compensation Claim for the Oahe Dam

RCED-98-39: Published: Jan 28, 1998. Publicly Released: Jan 28, 1998.

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Pursuant to a congressional request, GAO assessed a private consultant's economic analysis of compensation due to the Cheyenne River Sioux Tribe for the construction of the Oahe dam on tribal lands.

GAO noted that: (1) the consultant's primary approach, which produced an estimate of $300.7 million in additional compensation, relies on questionable assumptions about the value of the tribe's losses in the 1950s; (2) the consultant's secondary approach, which produced an estimate of $279.1 million, was used to support the primary approach; (3) like the approach GAO proposed in 1991, it uses the tribe's 1954 request as a basis for calculating additional compensation; (4) however, it provides a single figure for additional compensation, rather than a range such as GAO proposed in 1991; (5) in addition, it includes an amount for rehabilitation as well as an amount for damages, while the primary approach provides only for damages; (6) neither of the consultant's approaches includes an amount for administrative expenses; (7) the extent to which the tribe should receive additional compensation for damages--and whether the tribe should receive additional payments for rehabilitation and administrative expenses--is a policy question for Congress to decide; (8) to provide Congress with information for such decision-making, GAO used its 1991 approach to calculate ranges for damages ($32.3 million to $120.1 million), rehabilitation ($45.8 million to $170.1 million), and administrative expenses ($0.1 million to $0.5 million); (9) specifically, for each of these factors, GAO subtracted the amounts that the tribe received from the amounts that it requested (or paid, in the case of administrative expenses) and multiplied the resulting differences by the inflation rate, thereby obtaining the lower value for each range; (10) similarly, GAO multiplied these differences by the corporate bond rate to obtain the upper value for each range; and (11) through this approach, GAO calculated separate ranges for Congress to consider in deciding on the type and amount of any additional payments.

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