Investment of Federal Trust Funds for Cheyenne River
and Lower Brule Sioux
Congress intended the term “interest” in title VI of the Water Resources Development Act of 1999 to
have its usual and customary meaning: the coupon rate of the debt obligation.
The universe of “available obligations” under title VI of the Water Resources Development Act of
1999 includes obligations of government corporations and government-sponsored entities whose
charter statutes provide that their obligations are lawful investments for federal trust funds.
The fiduciary duty owed pursuant to a federal trust fund is defined and limited by the terms of the
statute creating the trust.
January 19, 2001
MEMORANDUM OPINION FOR THE GENERAL COUNSEL
DEPARTMENT OF THE TREASURY
You have asked for our opinion concerning the Secretary of the Treasury’s
investment responsibilities for the Cheyenne River Sioux Tribe and Lower Brule
Sioux Tribe Terrestrial Wildlife Habitat Restoration Trust Funds (“the Sioux
Trusts” or “the Trusts”) under section 604(c) of the Water Resources Development
Act of 1999 (“the Act”), in light of the federal government’s trust responsibilities
for Indian tribes. Specifically, you have inquired whether section 604(c)(2) of the
Act requires Treasury to invest the Trusts’ monies in obligations bearing the
highest rate of interest, even when those obligations do not have the highest yields
for the Trusts. You have also asked whether the universe of “available obligations”
under section 604(c)(2) includes obligations of government corporations and
government-sponsored entities (“GSEs”) with provisions in their charter statutes
making their securities lawful investments for all federal trust funds, notwithstand-
ing the provision in section 604(c)(1) limiting the Secretary’s investment of Trust
monies to interest-bearing obligations of the United States or obligations guaran-
teed by the United States as to both principal and interest.
We conclude that, even if the Act requires the Secretary to assume the strictest
of fiduciary duties when making investment decisions for the Sioux Trusts—a
question we do not decide—this duty is defined and limited by the terms of the
Sioux Trusts established in the Act itself. Under the Act, the Secretary must invest
the Trust monies in the obligations with the highest rate of interest, not the highest
yield, among available obligations. Furthermore, the universe of available
obligations under the Act includes obligations of government corporations and
GSEs whose charter statutes provide that their obligations are lawful investments
for federal trust funds.
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Investment of Federal Trust Funds for Cheyenne River and Lower Brule Sioux
I.
Title VI of the Water Resources Development Act of 1999, Pub. L. No. 106-53,
113 Stat. 269, 385-97, designates the Department of the Treasury as the program
agency for managing trust funds for two South Dakota Sioux Indian tribes. The
funds are to be used to finance the restoration of terrestrial wildlife habitat loss
resulting from flooding related to certain federal water projects. Under the Act, the
Secretary is required to transfer $5,000,000 from the general fund of the Treasury
to the Sioux Trusts “for the fiscal year during which this Act is enacted and each
fiscal year thereafter” until the aggregate amount in the Trusts is equal to at least
$57,400,000. Id. § 604(b)(1). Of the total amount deposited, 74 percent must be
deposited in the Cheyenne River Trust Fund, and 26 percent must be deposited in
the Lower Brule Fund. Id. § 604(b)(2).
Section 604(c) of the Act governs the investment of the two Sioux Trusts. It
provides:
(c) INVESTMENTS.—
(1) IN GENERAL.—The Secretary of the Treasury shall invest
the amounts deposited under subsection (b) only in interest-
bearing obligations of the United States or in obligations guaran-
teed as to both principal and interest by the United States.
(2) INTEREST RATE.—The Secretary of the Treasury shall
invest amounts in the Funds in obligations that carry the highest
rate of interest among available obligations of the required
maturity.
Paragraph (1) is a relatively common description of permitted investments for
federal trust funds. 1 By contrast, paragraph (2)’s direction that the Secretary invest
the Trust monies in the obligations with “the highest rate of interest among
available obligations” is apparently unique among federal trust funds. We have
been unable to identify a similar provision enacted by Congress, and your Office
has informed us that it has never encountered such a provision.
1
See, e.g., 16 U.S.C. § 1606a(c)(2)(A) (Reforestation Trust Fund); 42 U.S.C. § 401(d) (Federal
Old-Age and Survivors Insurance Trust Fund); 42 U.S.C. § 1104(b) (Unemployment Trust Fund); 42
U.S.C. § 1395i(c) (Federal Hospital Insurance Trust Fund); 42 U.S.C. § 1395t(c) (Federal Supplemen-
tary Medical Insurance Trust Fund).
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II.
Our interpretation of the investment provision of the Trusts must be considered
in the context of the federal government’s unique relationship with the Indian
tribes. The federal government’s trust responsibility to the Indians is a concept that
has evolved over time. Although its origins can be found in an early Supreme
Court opinion describing a tribe’s relationship to the federal government as that
“of a ward to his guardian,” 2 it has subsequently been applied by courts to
establish and protect rights of Indian tribes and individuals in their dealings with
the government. See Felix S. Cohen, Handbook of Federal Indian Law 220-28
(1982). The Supreme Court has on several occasions recognized what it has
termed a “general trust relationship” between the United States and Indian tribes
and people. See, e.g., United States v. Mitchell, 463 U.S. 206, 225 (1983) (noting
“the undisputed existence of a general trust relationship between the United States
and the Indian people” independent of statutes and regulations); Seminole Nation
v. United States, 316 U.S. 286, 296-97 (1942) (“[T]his Court has recognized the
distinctive obligation of trust incumbent upon the Government in its dealings with
these dependent and sometimes exploited people. . . . Under a humane and self
imposed policy which has found expression in many acts of Congress and
numerous decisions of this Court, [the federal government] has charged itself with
moral obligations of the highest responsibility and trust.”). 3
As part of this responsibility to the Indians, Congress has established statutory
trusts serving a wide variety of purposes. While acknowledging the existence of a
general trust obligation between the government and the Indians, the Supreme
Court has held that only certain statutory trusts impose affirmative fiduciary
obligations on the United States. In United States v. Mitchell, 445 U.S. 535 (1980)
(“Mitchell I”), the Supreme Court concluded that the language of the General
Allotment Act, which required the United States to hold land “in trust for the sole
use and benefit of the [allottee],” did not impose any fiduciary management duties
on the United States or render it answerable for a breach of any such duties: “The
[General Allotment] Act does not unambiguously provide that the United States
has undertaken full fiduciary responsibilities as to the management of allotted
lands.” Id. at 541, 542 (quotation marks and internal citations omitted). The Court
2
Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1831). This case involved a suit filed by the
tribe in the Supreme Court to enjoin enforcement of state laws on lands guaranteed to the tribe by
various treaties. In concluding that the Court lacked original jurisdiction over tribal matters, Justice
Marshall characterized the tribes as “domestic dependent nations” which “look to our government for
protection; rely upon its kindness and its power; and appeal to it for relief to their wants; and address
the President as their great father.” Id.
3
This unique relationship is further demonstrated by a line of cases that hold that any ambiguities
in statutes or treaties dealing with Indian tribes are to be interpreted in favor of the tribes. See
DeCoteau v. Dist. County Ct., 420 U.S. 425, 444 (1975); McClanahan v. Arizona State Tax Comm’n,
411 U.S. 164, 174 (1973); Choctaw Nation v. Oklahoma, 397 U.S. 620, 631 (1970).
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further noted that Congress included the trust language “not because it wished the
Government to control use of the land and be subject to money damages for
breaches of fiduciary duty, but simply because it wished to prevent alienation of
the land and to ensure that allottees would be immune from state taxation.” Id. at
544. In a second case, United States v. Mitchell, 463 U.S. 206 (1983) (“Mitchell
II”), the Court reconsidered and elaborated on whether the United States had
assumed fiduciary obligations as trustee with regard to the management of timber
on tribal allotted lands. The Court concluded that the series of statutes and
regulations governing the management of Indian lands was sufficient to create a
fiduciary relationship where the Allotment Act by itself did not: “In contrast to the
bare trust created by the General Allotment Act, the statutes and regulations
[managing timber resources] clearly give the Federal Government full responsibil-
ity to manage Indian resources and land for the benefit of the Indians. They
thereby establish a fiduciary relationship and define the contours of the United
States’ fiduciary responsibilities.” Id. at 224.
Lower courts have applied and elaborated upon the distinction between “bare”
trusts and trusts giving rise to full fiduciary responsibilities. For example, in
Brown v. United States, 86 F.3d 1554 (Fed. Cir. 1996), the Federal Circuit held
that a statutory scheme asserting control by the Secretary of the Interior over
commercial leasing of allotted lands constituted more than a limited trust and
thereby gave rise to enforceable fiduciary obligations under Mitchell II. The court
reiterated the Mitchell II criteria for imposition of fiduciary duties and observed
that an express reference to a fiduciary duty was not necessary: “‘[W]here the
Federal Government takes on or has control or supervision over tribal monies or
properties, the fiduciary relationship normally exists with respect to such monies
or properties (unless Congress has provided otherwise) even though nothing is said
expressly in the authorizing or underlying statute (or other fundamental document)
about a trust fund, or a trust or fiduciary connection.’” Id. at 1560 (quoting
Mitchell II, 463 U.S. at 225). In an application of Mitchell I, the District of
Columbia Circuit held that the establishment of an explicit trust as a mere funding
mechanism and without significant governmental management duties would not
impose any fiduciary responsibilities to those who may benefit from the trust.
Nat’l Ass’n of Counties v. Baker, 842 F.2d 369 (D.C. Cir. 1988). There, the court
considered the State and Local Government Fiscal Assistance Trust Fund, created
under the Revenue Sharing Act to provide “noncategorical financial assistance to
local governmental units in the form of annual entitlements.” Id. at 372. Associa-
tions of local governments brought suit asserting that the Act created a federal
fiduciary responsibility under Mitchell II to the local governments that were
beneficiaries of the trust. The court held, however, that the trust was only a
funding mechanism and did not include the type of control or management scheme
that gives rise to fiduciary obligations:
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While it is true that the Revenue Sharing Act establishes a Trust
Fund and names the Secretary as the trustee, we believe the Act cre-
ates only a limited trust relationship similar to the trust discussed in
[Mitchell I]. . . . We do not think that when Congress created this
Trust Fund and made the Secretary trustee Congress did so with the
intent that the trustee would be subject to money damages for
breaches of fiduciary duties. Rather, Congress created the Trust Fund
in order to ensure constant funding for the Revenue Sharing Pro-
grams. . . . By creating the Trust Fund Congress was able to appro-
priate funds in advance, for the life of the program, thus enabling the
local governments to budget their programs in advance.
Id. at 375, 376.
The Sioux Trusts at issue here have qualities of both the Mitchell I and the
Mitchell II trusts. On the one hand, the Trusts can be viewed as a funding mecha-
nism for money appropriated by Congress—money that will ultimately be
disbursed after capitalization to the tribes for their use in wildlife habitat restora-
tion. Thus, one might conclude that the Trusts do not constitute federal “control or
supervision over tribal monies or properties” in the sense contemplated by
Mitchell II, but rather are bare trusts or appropriation tools akin to those discussed
in Mitchell I or Baker. On the other hand, the statutory scheme is intended to
compensate the tribes for losses incurred to their lands as a result of flooding
related to a federal water project, and the Act contains very specific federal
controls and limitations on the tribes’ spending of the monies transferred for their
use. See Pub. L. No. 106-53, § 604(d)(3), 113 Stat. at 390.
Even assuming, however, that the Act requires the federal government to
assume the strictest of fiduciary obligations to the tribes, that responsibility is still
defined by the terms of the statute itself. Indeed, in Mitchell II, the Court conclud-
ed that the statutes and regulations giving the federal government responsibility to
manage Indian resources and land for the benefit of the Indians both “establish a
fiduciary relationship and define the contours of the United States’ fiduciary
responsibilities.” 463 U.S. at 224 (emphasis added). Courts that have found a
fiduciary obligation akin to that in Mitchell II have similarly held that the statutory
scheme creating a government trust both defines and limits the nature of the
government’s duties. See Brown, 86 F.3d at 1563 (quoting Mitchell II and holding
that the validity of a tribe’s breach of trust claim must be measured against the
terms of the statute creating the trust and its accompanying regulations); Short v.
United States, 50 F.3d 994, 998-99 (Fed. Cir. 1995) (statute dictating interest rate
for Indian Money, Proceeds for Labor trust accounts controls payment of interest
on trust funds held by the United States for the benefit of Indians); Cheyenne-
Arapaho Tribes of Indians of Oklahoma v. United States, 512 F.2d 1390, 1393 (Ct.
Cl. 1975) (holding that tribes’ suit for breach of fiduciary duty based on the United
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States’ breach of its duties as trustee to tribes would be determined by reference to
the statutory scheme governing Indian trust funds deposited in the Treasury).
Thus, even assuming that the United States owes the Sioux tribes the strictest of
fiduciary obligations in administering the Trusts (in addition to its general
obligations of good faith and fair dealing with the Indian tribes), the specifics of
that obligation are found in the statute creating the trust: “Whatever the scope of
the government’s legal duties under the [Indian] trust, the source is statutory law.
The extent of a trustee’s duties and powers is determined by the trust instrument
and the rules of the law which are applicable. Accordingly, even though the trust is
a trust as that term is used in Mitchell II, plaintiffs must point to rights granted by
statute if they are to be enforced against the government.” Cobell v. Babbit, 91
F. Supp. 2d 1, 30 (D.D.C. 1999) (citations and internal quotation marks omitted).
III.
With this principle in mind, we turn to the specific questions of statutory inter-
pretation. First, we consider whether section 604(c)(2), which directs the Secretary
to invest the Sioux Trusts in obligations “that carry the highest rate of interest
among available obligations of the required maturity,” requires the Secretary to
invest the trust funds in obligations with the highest coupon rate, or those obliga-
tions with the highest yield. We understand that this distinction has significant
investment consequences. The coupon rate of a security is the stated annual rate of
interest on the face value of a debt security. Barron’s Financial Guides, Dictionary
of Financial and Investment Terms 116 (4th ed. 1995). For instance, one might
purchase a $1000 bond with a 10 percent coupon rate, earning $100 per year. In
contrast, the “yield” of a security is a way of describing an investor’s percentage
return on his investment. Id. at 663-64. A $1000 bond with a 10 percent coupon
rate that is purchased for $1000 offers a 10 percent current yield or “effective
rate.” Id.at 159. Yet that same $1000 bond with a 10 percent coupon rate, but
purchased for $500, would offer an investor a 20 percent yield. When the price of
a bond falls, its yield rises, and vice versa.
In Old Colony Railroad Co. v. Comm’r, 284 U.S. 552 (1932), the Supreme
Court considered a tax statute that permitted companies to deduct from their
income “all interest paid or accrued within the taxable year” to holders of its
bonds. Id. at 554. Old Colony sold its bonds at a premium and sought to deduct the
amount of the interest payments (the coupon rate) on those bonds from its gross
income. The government argued that Old Colony could not do so because the
statute that authorized the deduction of “all interest paid or accrued” actually
referred to the effective rate (or the yield) of the bond, not the coupon rate.
Because Old Colony sold its bonds at a premium, the government argued that it
could only deduct the lower effective rate, not the rate on the face of the coupon.
The Supreme Court disagreed and held that when Congress uses the word
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“interest” without further explanation, it intends the usual meaning of the word,
which is the coupon rate:
[A]s respects “interest,” the usual import of the term is the amount
which one has contracted to pay for the use of borrowed money. He
who pays and he who receives payment of stipulated amount con-
ceives that the whole is interest. In the ordinary affairs of life no one
stops for refined analysis of the nature of a premium, or considers
that the periodic payment universally called “interest” is in part
something wholly distinct—that is, a return of borrowed capital. . . .
We cannot believe that Congress used the word having in mind any
concept other than the usual, ordinary and everyday meaning of the
term, or that it was acquainted with the accountants’ phrase “effec-
tive rate” of interest and intended that as the measure of the permit-
ted deduction.
Id. at 560-61. 4
In an opinion interpreting the Second Liberty Bond Act, the Attorney General
likewise concluded that the term “interest” was unambiguous. See Second Liberty
Bond Act, As Amended—Bonds Issued at Discount—Effective Rate of Interest or
Cost to Treasury, 42 Op. Att’y Gen. 27 (1961). There, the Attorney General
considered whether the Secretary of the Treasury could sell discounted bonds at a
coupon rate of 4¼ percent, thereby resulting in a greater yield or effective rate,
where the Bond Act limited the “rate or rates of interest” on United States bonds to
4¼ percent. Id. at 29. Citing Old Colony, the Attorney General concluded that the
limitation on interest rate referred to the coupon rate, and could not be read as a
limit on the effective rate or yield of the bond: “[W]hen Congress uses the term
‘interest’ in connection with bonds without further explanation, it refers to the
coupon or stated rate, the usual meaning of that term, and not to the accountants’
concept of effective rate.” Id.
We recognize, of course, that any ambiguities in statutes dealing with Indian
tribes are to be construed in favor of the tribes. See supra note 3 (citing cases).
But, like the Supreme Court in Old Colony and the Attorney General in his 1961
opinion construing the terms of the Second Liberty Bond Act, we conclude that
the term “interest” is unambiguous. As the Court and the Attorney General
explained, the term “interest” in the Water Resources Development Act has its
usual and customary meaning—i.e., the coupon rate of the obligation. The
4
The Court noted that, “[i]f there were doubt as to the connotation of the term, and another mean-
ing might be adopted, the fact of its use in a tax statute would incline the scale to the construction most
favorable to the taxpayer.” Id. at 561 (emphases added). The opinion makes clear, however, that the
Court did not believe the term “interest” was ambiguous.
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Investment of Federal Trust Funds for Cheyenne River and Lower Brule Sioux
conclusion that Congress intended this ordinary meaning when it used the term in
connection with the Sioux Trusts is buttressed by the rule that “Congress is
presumed to be aware of an administrative or judicial interpretation of a statute,”
and to adopt that interpretation when it “adopts a new law incorporating sections
of a prior law.” Lorillard v. Pons, 434 U.S. 575, 580, 581 (1978). Here, Congress
has employed a term with a long-established judicial and administrative interpreta-
tion, and there is nothing in the legislative history of the Act indicating that
Congress intended the term to have a different meaning in section 604(c)(2).
Accordingly, under the Act, the Secretary is required to invest the Sioux Trust
fund monies in the obligations carrying the highest coupon rate, regardless of
whether such investments offer the highest yield. To the extent that the Secretary
has a fiduciary obligation to the Sioux tribes by virtue of the trust fund mecha-
nism, this duty is defined by, and thus requires compliance with, the investment
criteria set forth explicitly in the Act. Although investing in securities offering the
highest yield might maximize the amount of income to the Funds, it is not what
Congress instructed the Secretary to do. Cf. Pawnee v. United States, 830 F.2d
187, 191 (Ct. Cl. 1987) (no valid claim for breach of a fiduciary duty is stated
where “the claim is simply that the Interior Department is compelled to go
contrary to and beyond the [controlling] regulations and the leases in order to
fulfill its alleged fiduciary obligation”).
IV.
Your second question is whether the universe of “available obligations” that
must be considered in determining the obligations “carry[ing] the highest rate of
interest” under section 604(c)(2) includes securities of government corporations
and government-sponsored entities (“GSEs”) that have provisions in their charter
statutes making their securities lawful investments for all federal trust funds,
notwithstanding the provision in section 604(c)(1) of the Act limiting Sioux Trust
investments to interest-bearing obligations of the United States or obligations
guaranteed as to both principal and interest by the United States.
The charter statutes of various government corporations and GSEs whose obli-
gations are explicitly not guaranteed by the United States as to principal and
interest include a provision similar or identical to the following:
Obligations issued . . . shall be lawful investments and may be
accepted as security for all fiduciary, trust, and public funds, the
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investment or deposit of which shall be under the authority or control
of any officer or agency of the Government of the United States. 5
In accordance with several opinions of the Department of Justice, federal case law,
and a Comptroller General opinion, we conclude that securities issued by entities
whose charters include such “trust fund eligibility” language are appropriate
investments for federal trust funds, even where those trust fund statutes specifical-
ly limit the investment of funds to federal government obligations or obligations
guaranteed by the United States.
In 1996, our Office considered whether the Secretary of the Treasury could
invest Civil Service Retirement and Disability Fund (“CSRDF”) monies in debt
obligations issued by the United States Postal Service (“USPS”) and the Tennessee
Valley Authority (“TVA”). Transactions Between the Federal Financing Bank
and the Department of the Treasury, 20 Op. O.L.C. 64 (1996) (“1996 Opinion”).
The relevant statutes of the CSRDF trust fund and the GSEs were virtually
identical to those at issue here. In what the 1996 Opinion termed “boilerplate”
language governing the investment of government-managed trust funds, id. at 68,
the CSRDF statute authorized the Secretary to invest in “interest-bearing obliga-
tions of the United States, or obligations guaranteed as to both principal and
interest by the United States.” 5 U.S.C. § 8348(e). 6 The USPS and TVA statutes
indicated, as they do now, that their debt obligations were not guaranteed by the
United States as to principal and interest, see 39 U.S.C. § 2005(d)(5); 16 U.S.C.
§ 831n-4(b), yet they were lawful for trust fund investments under the authority or
control of any United States officer or agency, see 39 U.S.C. § 2005(d)(3); 16
U.S.C. § 831n-4(d). Ultimately, we relied upon federal case law, “the longstanding
practice and understanding of the Treasury and Justice Departments,” and a 1985
Comptroller General opinion in determining the relationship between the boiler-
plate trust investment instructions and the trust fund eligibility language of the
government corporations and GSEs. 1996 Opinion, 20 Op. O.L.C. at 69. We
concluded that the CSRDF monies could be invested in the USPS and TVA
obligations. Id. at 68.
5
39 U.S.C. § 2005(d)(3) (investment eligibility provision for United States Postal Service obliga-
tions). See also 16 U.S.C. § 831n-4(d) (investment eligibility provision for Tennessee Valley Authority
bonds); 12 U.S.C. § 1452(g) (investment eligibility provision for Federal Home Loan Mortgage
Corporation).
6
The relevant portion of the CSRDF statute states that the Secretary shall “invest in interest bearing
securities of the United States such currently available portions of the Fund as are not immediately
required for payments from the Fund.” 5 U.S.C. § 8348(c). It further directs that the Secretary purchase
“public-debt obligations” with certain maturities, id. § 8348(d), and specifies that the Secretary “may
purchase other interest-bearing obligations of the United States, or obligations guaranteed as to both
principal and interest by the United States . . . if he determines that the purchases are in the public
interest,” id. § 8348(e).
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In the 1996 Opinion, we relied upon Manchester Band of Pomo Indians, Inc. v.
United States, 363 F. Supp. 1238, 1244-45 (N.D. Cal. 1973), a federal district
court opinion concluding that the TVA trust fund eligibility language, as well as
the language in several other GSE charter statutes, rendered TVA obligations
eligible for Indian trust fund investments, notwithstanding language in the
particular Indian trust fund statute, 25 U.S.C. § 162(a), limiting investments to
United States public debt obligations and other obligations guaranteed as to
principal and interest by the United States. The court specifically noted that its
conclusion regarding the effect of the broad trust fund eligibility language was “in
accord with the intent of Congress.” 363 F. Supp. at 1245. The 1996 Opinion also
cited two prior instances where the Department opined that trust fund eligibility
language authorized investment in obligations of government corporations or
GSEs where the specific trust fund statute at issue did not expressly authorize it.
First, in a 1966 opinion concerning the obligations of federal land banks and banks
for cooperatives which considered trust fund eligibility language different from
that discussed here, our Office noted in passing that language identical to the TVA
trust fund eligibility provision 7 “presents no problems of construction and plainly
permits investments of the various Government trust funds in the affected
securities whether or not the statutes creating the trust themselves do so.” Letter
for Fred B. Smith, General Counsel, Department of the Treasury, from Frank M.
Wozencraft, Assistant Attorney General, Office of Legal Counsel at 2 (Oct. 7,
1966). Second, in a 1934 opinion by Attorney General Homer Cummings, the
Department advised that government-managed postal savings funds could be
invested in bonds issued under the Federal Farm Mortgage Corporation Act
because of the Act’s trust fund eligibility language, even though the Postal Savings
Act creating the trust fund only specified authority to invest in “bonds or other
securities of the United States.” Investment of Postal Savings Funds in Bonds of
Federal Farm Mortgage Corporation, 37 Op. Att’y Gen. 479, 480 (1934). In
addition to these prior statements by the Department of Justice, the 1996 Opinion
cited “Treasury’s longstanding practice to invest monies contained in government-
managed trust funds . . . in public debt obligations or other obligations that have
been authorized by Congress as legal investments for all government-managed
trust funds,” 20 Op. O.L.C. at 70, as well as a 1985 Comptroller General opinion
supporting the investment of CSRDF trust funds in Federal Financing Bank
obligations which were not public debt obligations, but were eligible for federal
trust fund investment pursuant to the Federal Financing Bank statute. 8
7
According to the 1996 Opinion, the language of the statute at issue provided: “‘[Obligations
issued] shall be lawful investments and may be accepted as security, for all fiduciary, trust, and public
funds the investment or deposit of which shall be under the authority or control of the United States or
any officer or officers thereof.’” 20 Op. O.L.C. at 69 n.9 (quoting statute).
8
Memorandum for the Honorable John J. LaFalce, Chairman, Subcommittee on Economic Stabili-
zation, House Committee on Banking, Finance, and Urban Affairs, from the Comptroller General of the
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Finally, in addition to relying upon the foregoing authority, the 1996 Opinion
applied the principle of statutory construction dictating that statutes on the same
subject should be read in harmony with one another, 2B Norman J. Singer,
Sutherland on Statutes and Statutory Construction § 51.02, at 121-22 (5th ed.
1992). Thus, the opinion concluded that
[b]ecause the CSRDF statute’s investment provisions do not purport
to supersede other statutes establishing that obligations issued there-
under are eligible investments for government-managed trust funds
and the relevant USPS and TVA statutes demonstrate Congress’s
intention that obligations issued thereunder be eligible investments
for all government-managed trust funds, the better interpretation is
that the relevant USPS and TVA statutes have the effect of expand-
ing the universe of authorized CSRDF investments.
20 Op. O.L.C. at 69 n.7. 9
The weight of this authority leads us to conclude that the obligations available
for investment under the Water Resources Development Act must include
obligations of those government corporations and GSEs whose charter statutes
include the federal trust fund eligibility language. Federal case law, OLC opinions,
and a Comptroller General opinion, as well as past practice, all indicate that the
trust fund eligibility language found in GSE charter statutes is best read as
expanding the universe of available obligations set forth in the “boilerplate”
provisions of the statutes governing the investments of government-managed trust
funds. Congress enacted the Sioux Trust provisions against this backdrop of
federal law and governmental practice and, accordingly, we conclude that
Congress intended to make government corporation and GSE obligations available
for investment by the Secretary for these trusts. See Lorillard, 434 U.S. at 581
(noting that it may be appropriate to presume Congress to be “aware of an
administrative or judicial interpretation of a statute” when it “adopts a new law
incorporating sections of a prior law”).
United States (Oct. 30, 1985), reprinted in The Federal Financing Bank and the Debt Ceiling, Hearing
Before the Subcomm. on Economic Stabilization of the House Comm. on Banking, Finance and Urban
Affairs, 99th Cong. 31, 32 (1985). The opinions and legal interpretations of the General Accounting
Office and the Comptroller General often provide helpful guidance on appropriations matters and
related issues. However, they are not binding upon departments, agencies, or officers of the Executive
Branch. See Bowsher v. Synar, 478 U.S. 714, 727-32 (1986).
9
While our 1996 Opinion mentions that the TVA and USPS statutes with the trust fund eligibility
language were enacted several years after the CSRDF trust fund statute, 20 Op. O.L.C. at 67, that fact
is neither mentioned nor relied upon by Manchester Band or the Department of Justice or Comptroller
General authority discussed herein. Accordingly, we do not believe the temporal relationship between
the two statutory schemes to be essential to our prior conclusion, and we interpret the reference in the
1996 Opinion to be an additional point reinforcing the outcome.
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Investment of Federal Trust Funds for Cheyenne River and Lower Brule Sioux
For the reasons set forth above, we conclude that the Secretary, in fulfilling the
government’s responsibilities to the Sioux tribes under the Act, must consider
obligations of government corporations and GSEs whose charter statutes include
trust fund eligibility language when determining which obligations carry the
highest coupon rate of interest.
JOSEPH R. GUERRA
Deputy Assistant Attorney General
Office of Legal Counsel
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