Security Pacific to Manage $1.8-Billion Indian Trust
Security Pacific National Bank said Tuesday that it has signed a contract with the federal government to take over management of $1.8 billion in Indian trust funds.
The contract marked the first time that an outside institution has been hired to manage and administer the funds, which belong to 1,750 tribal governments and 300,000 individual Indians. The money has been managed by the Bureau of Indian Affairs, a branch of the U.S. Department of the Interior.
The money represents income from land claims, damage awards, oil and gas revenue, timber sales and similar activities on Indian land. The Los Angeles-based bank will be responsible for collecting the money, investing it and accounting for it.
“This contract between Security Pacific and the Bureau of Indian Affairs will provide better management of resources belonging to individual Indians and tribes,” said Secretary of the Interior Donald P. Hodel.
He said the contract should also save the federal government almost $3 million in administrative expenses over the next five years.
Security Pacific’s government services division won a one-year contract with four one-year renewable options in competitive bidding with other financial institutions.
Michael J. Barrett, a Security Pacific vice president in New York, said the large number of accounts will require new management techniques and technological innovations. The management will be done through the bank’s trust and cash management operations as well as the government services division.