Indians’ lawyers say government officials lied in trial over trust accounts
The Associated Press
By: Matt Kelley
Associated Press Writer
December 1, 2000
Federal officials responsible for overseeing a $500 million system of trust accounts for American Indians lied in court and cannot be trusted to handle reforms, lawyers for the Indians told a federal judge Friday.
A year ago, U.S. District Judge Royce Lamberth ruled the government had mismanaged the Indian accounts for more than a century. He gave the federal government one last chance to fix problems with roughly 500,000 trust accounts that hold proceeds from oil wells and other uses of Indian land.
An estimated 1,000 of the individual trust accounts, worth about $11 million, belong to Alaska Natives.
Lawyers for the Indians said in a Friday court filing that the federal government missed its chance. The Indians said federal officials lied during a trial last summer and cited court findings that federal officials have continued to destroy records. They asked Lamberth to appoint a “special master” with the power to force the government to make necessary changes.
“With a special master, we’d be forcing the change,” said Elouise Cobell of Browning, Mont., the Blackfeet banker who is the lawsuit’s lead plaintiff. “If they don’t do what they’re supposed to do, there are going to be sanctions against them. The court is not going to allow them not to perform.”
Justice Department spokeswoman Christine Romano called the Indians’ court filing “distorted, misleading and inaccurate.”
“It’s a rehash of arguments that have already had a hearing,” Romano said. “It is another in a long line of attempts to intimidate individuals who are working on trust reform by attacking their character without basis.”
“We don’t make allegations, we report facts to the court,” responded Dennis Gingold, one of the Indians’ lawyers.
The lawsuit could cost the federal government billions – the Indians say more than $10 billion – owed to account holders whose money was mismanaged, lost or stolen. Already, Lamberth has held the treasury and interior secretaries and the head of the Bureau of Indian Affairs in contempt of court for not turning over documents to the Indians.
But the angry words from both sides cooled this summer as lawyers tried to reach a settlement. Gingold said lawyers for the Indians and Interior Department officials reached a tentative, partial settlement in August and submitted it for Justice Department approval in October.
The Justice Department has not responded, Gingold said.
“I guess they weren’t interested in a settlement,” said Keith Harper, a Cherokee and one of the Indians’ lawyers.
After a trial in June and July 1999, Lamberth ruled nearly a year ago that he would keep oversight of reforms to the account systems and ordered officials to prepare to account for how much money the Indians lost. Justice Department lawyers appealed that decision, arguing that Lamberth did not have the authority to do that. The U.S. Circuit Court of Appeals for the District of Columbia has not ruled on that appeal.
The Indians say Lamberth should revisit his decision because the Treasury and Interior departments have continued to destroy records, with Treasury lawyers covering up the destruction of 162 boxes of records for months last year. The Indians also say Interior Department officials lied last year when they testified a new computer system to track account information was “already operational.”
Interior acknowledged in a report to Lamberth this year that the computer system is not ready yet and has had serious problems since before last year’s trial.
The government plans to spend $27.6 million this year on the lawsuit and $80 million to try to straighten out the accounts.
Most of the trust accounts grew out of an 1887 federal law that divided some reservations into smaller plots for individual Indians. The federal government holds that land in trust for the Indians – meaning it cannot be taxed or sold and the government must approve any leases.
Many of the tracts are leased for uses such as grazing, logging, mining or oil drilling. Royalties are supposed to be deposited in government accounts and then paid to the Indian landholders.
Since the beginning, however, those accounts have been mismanaged in almost every way imaginable, the government acknowledges. Records for many accounts were never kept, while documentation for others was lost or destroyed. Some of the money was stolen or used for other federal programs. Some lease proceeds were never collected. Thousands of accounts have money in them but no names attached.
| 
