A Debt Long Past Due May Redefine Federal-Tribal Relations
The Oregonian
By: Michael Milstein
February 3, 2002
Summary: Lost land and royalties owed Native Americans could cost taxpayers billions of dollars
The stories are bewildering legend among Native Americans in the Northwest and the nation: Family inheritances that vanished like smoke; checks for a few dollars or pennies that arrive out of the blue; land they owned but now cannot trace. “When I was a very little girl, I remember my dad saying that we had this land, that someday we would get some money from it,” says Lecile Jay, a Blackfeet tribe member who lives in Florence. But when she tried to find the land near the Blackfeet Reservation in Montana, or some record of it, the federal Bureau of Indian Affairs told her that “it wouldn’t be worth our time.” Now the legend of such missing tribal land and money has unfolded into the worst nightmare of the U.S. Interior Department since the Teapot Dome scandal of the 1920s, and perhaps the greatest case of government financial incompetence in history. Tangled in the mess are Interior Secretary Gale Norton, more than 600,000 acres belonging to thousands of Native Americans in the Northwest, billions of dollars of tribal and taxpayer money, and a multimillion-dollar federal computer system that sits idle in Portland and may end up scrapped.
The specter looms larger as Norton is expected to testify in coming weeks in her own contempt trial before a tough federal judge who has shut down Interior Department computers and could put her in jail. The judge has so lost patience, he recently warned Norton’s attorneys that “I don’t believe one word you’re telling me.”
“This case in the last six months has just exploded,” said Dave Tovey, executive director of administration for the Confederated Tribes of the Umatilla Indian Reservation in Eastern Oregon. “It has been building for years, but now nobody can ignore it.” Every taxpayer may feel the impact, because the government may have to repay Native Americans for more than $10 billion worth of royalties and land the government has lost track of in the past century. That’s roughly the entire annual budget of the U.S. Treasury. Millions probably would flow to Northwest tribes.
Many think the outcome will redefine the rocky relationship between Native Americans asserting more control over tribal affairs and a federal government that once forced them onto reservations, which soon deteriorated into some of the poorest pockets of America. “A lot of Indian people have been very passive for a long time,” said Elouise Cobell, a Blackfeet tribe member who set up the showdown by suing the Interior Department. “As a result, the government got away with anything they wanted. Now we’re saying it’s got to stop.”
Federal courts have agreed with Cobell since she filed a class- action lawsuit on behalf of thousands of Native Americans in 1996. In it, she sought an accounting of oil, mining, grazing and logging royalties from 11 million acres of land owned by individual tribe members but held in trust by the government, including 602,837 acres in Oregon and Washington. The trust land is an artifact of a government scheme to undo tribal nations and open their land to ranching, mining and other uses by breaking many reservations into pieces called allotments. Some went to tribal families. The rest went up for sale.
“In the old pictures, you see signs that say ‘Indian Land for Sale,’ ” recalled Lois Broncheau, who works for the Umatilla tribes buying some of that land back, bit by bit, at today’s higher prices. The government held Native American allotments tax-free and leased them to farmers, loggers, miners and, later, oil companies. Congress set up a trust fund to hold the royalties and dole them out to Native American owners.
But a federal tribal agent despaired as early as 1828 that it looked as though the government had handled Native American funds “with a pitchfork” — and it got worse. Not only did the government not balance the checkbook holding Native American money, it barely even kept a checkbook. Oil companies pumped oil from Native American land without reporting it. Land records disappeared — stolen, shredded or tossed out as garbage. Some Native Americans got pennies when they deserved thousands of dollars. The government, through the Bureau of Indian Affairs, today pays royalties to some Native Americans — about $500 million in checks go out each year — but has lost track of nearly 50,000 others. Accountants have discovered at least $2 billion, plus interest, unaccounted for. They could not tell to whom billions more belonged. “There are dollars sitting out there in the government that may be ours,” said Louis Pitt of Oregon’s Warm Springs tribes. “But we have no way of knowing it.”
Even after Cobell filed her case, and U.S. Judge Royce Lamberth ordered the government to turn over reams of documents, the Treasury Department destroyed hundreds of boxes that might have contained Native American trust records. In 1999, acting “more out of sadness than anger,” the judge held then-Interior Secretary Bruce Babbitt, Treasury Secretary Robert Rubin and an assistant interior secretary in contempt of court. He blamed them for “a shocking pattern of deception” that included covering up missing documents Native Americans might have used to prove their case. “I have never seen more egregious misconduct by the federal government,” he wrote.
Lamberth ordered the government to pay more than $600,000 for the “wasted time” of Cobell’s lawyers. And he issued a warning: If federal officials do not shape up, they “will suffer consequences far greater than those being handed down today.” The Reagan appointee ruled shortly afterward that the entire trust fund was in hopeless disarray. “The United States cannot say how much money is or should be in the trust,” he wrote. Some say 300,000 Native Americans are entitled to the funds. Others suggest 500,000.
“Notwithstanding all of this,” Lamberth wrote, Interior Department officials “continue to write checks on an account that they cannot balance or reconcile. It is fiscal and governmental irresponsibility in its purest form.” He ordered the Interior Department to clean up the mess, which had multiplied through decades of neglect. Successive generations of Native American families split land into smaller and smaller shares. In one instance on the Umatilla Reservation, 150 people inherited bits of a single plot. “It’s nothing like what we call the non-Indian world, where families sell out to each other, and just a couple people own property,” said Broncheau of the Umatilla tribes.
It adds up to a monumental bookkeeping task, even if the books did exist. A $40 million computer system called TAAMS, for Trust Asset Accounting Management System, was designed to take over the task in Bureau of Indian Affairs regional offices in Portland and around the country by 2000. But almost from the time it was installed in 1999, the system failed. It broke down and spit out incorrect data. In some instances workers had to photocopy records at rural county courthouses and enter details by hand. Records in the BIA’s Portland office turned out to be incompatible withit.
A court-appointed monitor said the Portland data had to be “cleaned up” before the computer system would work in the Northwest, “if that is even possible.” In February 2001, just after Norton and the Bush administration took over the Interior Department, the BIA’s top computer manager warned that reform of the Native American trust system was “slowly but surely imploding.” But federal attorneys continued to tell Lamberth that the computer system was advancing. Norton told Congress her “highest priority” was fixing the trust mess. She also embraced a plan by Babbitt to rebuild missing records based on statistical sampling, although Lamberth had ordered a full reconstruction at a cost of hundreds of millions.
The BIA called for all its offices to forward land records to a central office in New Mexico. Some tribes, including the Umatilla, resisted, fearing they would lose more control over their assets. Norton announced a plan to hand Native American trust funds to a new bureau of the Interior Department, which tribes almost unanimously opposed as a further dismantling of the BIA, the one agency dedicated to their needs.
“The BIA has lots of problems, and we know it,” said Rick Gay of the Umatilla tribes. “But right now it’s all we have.” Investigators, meanwhile, found that Federal Reserve banks in Seattle, Salt Lake City, Denver and elsewhere had destroyed records sought in the case. Court Monitor Joseph Kieffer reported in August that the computer system may have to be scrapped altogether, adding to the $600 million taxpayers have already spent on botched attempts to patch the problems. He concluded that Norton had directed a “charade carried out by her attorneys to continue to keep the major management and systems failures from the light of day and this court.”
Two teams of federal attorneys were booted off the case and investigated for lying to the judge, and the government hired private lawyers to defend Norton and other top officials. By October 2001, Lamberth was welcoming new federal attorneys to the case by saying, “My condolences.” “The new team of lawyers always takes it seriously,” he told them. “If you weren’t the third team of lawyers, I might take you seriously.” Ten years of reports had warned that Interior Department computers lacked basic security precautions to protect Native American funds, and in December a court investigator easily hacked into the system. “This deplorable condition is inexcusable,” Kieffer told the judge.
Lamberth ordered all Interior computers disconnected from the Internet, blacking out sites for the National Park Service and other popular agencies. The department also halted checks to more than 40,000 Indians, blaming it on the shutdown, although Cobell’s attorneys pointed out that Norton and other top officials were still receiving their paychecks. Two months later, the computers remain shut down, and court officials say Interior has not sought permission to restart most of them. Lamberth suggested Interior was suffering from “Washington Monument syndrome,” where agencies shut down well-known attractions to publicize their troubles.
Lamberth has since ordered Norton to sign further reports to him, a signal that he considers her personally accountable. He also began trying her and almost 40 other top officials for contempt of court, calling Norton’s actions “so clearly contemptuous, I don’t understand what it is that we are going to try.”
Norton is likely to be called as a witness in the next two weeks; Cobell’s attorneys have pushed for jail time and want a court- appointed receiver to take over the funds. At some point, Lamberth will begin another trial to determine how much the government must compensate Native Americans for the lost trust money and interest, estimated by some at well over $10 billion.
“Politically, I think they’re all scared of what this is going to cost,” said Tovey. “They open the box, and they say, ‘Oh, man.’ And it’s more expedient to cover it up than to deal with it. That’s what’s gone on for years.”
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