OTFM. Carnage of the American Indian Funds

In the 1980's when I worked for Drexel Burnham Lambert in LaJolla, California one of the accounts I called on was the Office of Trust Funds Management. 

This single account, at the time, unknown to me, would be the impetus to start my investment management firm several years later.

The best way to describe these government workers would be to say they were clueless.   To me, and for the hundreds of thousands of Native American beneficiaries who were getting shafted, it was sickening.

It almost compares to what happened at Wounded Knee, South Dakota in 1890.   I rode my motorcycle to Wounded Knee often when I lived in Pine Ridge.  It was a much safer road to ride on than driving to White Clay!  In the late 1960's, the massacre site was rather messy and not maintained very well.  One of the worst massacres of Americans by Americans.

The OTFM hurt hundreds of thousands of Native Americans. 

 NATIVE AMERICAN CARNAGE

SEPTEMBER 5, 1996

DEAR HONORABLE TRIBAL CHAIR,

THE STOCK MARKET WAS NOT THE ONLY PLACE IN WHICH INVESTORS MADE MONEY IN 1995--THE FIXED-INCOME MARKET WAS ALSO ROARING.  LOW INFLATION, STABLE ECONOMIC GROWTH AND EASING OF INTEREST RATES BY THE FEDERAL RESERVE BOARD CONTRIBUTED TO THE MARKET’S PERFORMANCE, WHICH WAS ESPECIALLY WELCOME FOLLOWING THE LOST GROUND OF US GOVERNMENT BONDS IN 1994.  BUT IS ALL WELL IN INDIAN COUNTRY?  WE THINK NOT AND WANT SOME ASSURANCES.

AS A NATIVE AMERICAN-OWNED INVESTMENT FIRM, REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION, OUR YEARS OF EXPERIENCE HAVE REWARDED CLIENTS WITH SOME EXCELLENT RESULTS.  A RELIABLE RULE WE ENUNCIATE IS “NEVER GIVE ANYONE ACCESS TO A BILLION DOLLARS WITHOUT FIRST ASKING WHAT THEY WILL DO WITH THE MONEY”.  WE HAVE A MAJOR CONCERN THAT NO ONE SEEMS TO SHARE OR HAS ADDRESSED AND THAT TOPIC SHOULD BE TIMELY IN THAT 2.4 BILLION IN FINANCIAL RECONCILIATIONS ARE UNACCOUNTED FOR BY THE BIA. 

OUR CONCERN IS SIMPLE.  IN THE EARLY 1990’S THE OTFM WAS A HUGE BUYER OF CMO’S OR COLLATERALIZED MORTGAGE OBLIGATIONS FROM VARIOUS WALL STREET FIRMS, ONE BEING THE FIRM OF KIDDER, PEABODY.  AT THAT TIME, KIDDER WAS THE LARGEST UNDERWRITER OF CMO’S ON WALL STREET.  MANY OF THESE CMO’S, OFTEN REFERRED TO AS “TOXIC WASTE” BY WALL STREET PROFESSIONALS, MAY CARRY A 10 OR 20-FOLD RISK GREATER THAN THAT ASSOCIATED WITH REGULAR GOVERNMENT BONDS.  MANY OF THESE INSTRUMENTS FOUND THEIR WAY INTO BOND PORTFOLIOS MANAGED BY THE BIA AND BECAUSE OF HIGHER RETURNS OFFERED BY CMO’S, MAY HAVE PUT ALOT OF NATIVE MONEY AT UNDUE RISK DURING THE GOVERNMENT BOND MELTDOWN IN APRIL OF 1994.  THIS DEBACLE FINISHED OFF KIDDER PEABODY AS A FIRM AND OUR WORRY IS THAT THE REAL OWNERS OF THE MONEY, THE NATIVE PEOPLE, WHO HAD NO OUTSIDE INVESTMENT PROFESSIONALS OVERSEEING THE POSSIBLE MISMANAGEMENT OF THE PORTFOLIOS BY THE OFFICE OF TRUST FUND MANAGEMENT (BIA), COULD HAVE BEEN UNKNOWING AND SUBSTANTIAL VICTIMS.  WE FEEL IT SHOULD BE AN APPROPRIATE AREA FOR INVESTIGATION.

WE INVITE YOUR COMMENTS IF YOU SHARE OUR CONCERNS REGARDING THE SUPERVISION AND MANAGEMENT OF NATIVE MONEY ENTRUSTED TO AN AGENCY THAT HAS DIFFICULTY KEEPING TRACK OF $2.4 BILLION NATIVE TRANSACTIONS.

IF YOU HAVE ANY QUESTIONS OR NEED ADDITIONAL INFORMATION, PLEASE FEEL FREE TO CONTACT ME BY PHONE AT 770/772-1621 OR BY FAX AT 770/772-0102.

RESPECTFULLY,

DEAN T. PARISIAN

PRESIDENT

NATIVE AMERICAN ADVISORS, INC.