Review of Indian Trusts Criticized
The Washington Post
By: William Claiborne
Washington Post Staff Writer
January 25, 2001
Native Americans who are suing the federal government over mismanagement of as much as $10 billion in Indian trust accounts contended yesterday that a last-minute order by Bruce Babbitt, the outgoing interior secretary, to conduct a statistical sampling of the trusts to determine how much Indians are owed was a ruse to avoid full recompense.
In one of his final acts before leaving office, Babbitt said that trust account records are in such disarray that a statistical sampling is the most cost-effective way to calculate how much the government owes account holders. A special trustee charged with overseeing the trusts has estimated the sampling could cost as much as $70 million.
However, Eloise Cobell, the lead plaintiff in a class action lawsuit aimed at forcing the government to clean up the mismanaged trusts, said the Interior and Justice departments intend to use Babbitt’s order to “bootstrap” their appeal of a 1999 federal court decision that ordered a full accounting of the trusts.
“This is another desperate effort to distract the courts and Congress from their utter inability to complete a full and accurate accounting, as required by law,” Cobell said. “I certainly hope the Bush administration can get control of the Justice Department, obey the law and the federal judge’s orders and start to restore some integrity to this disgrace.” Dennis Gingold, an attorney for the Indians, said the Interior Department has notified the U.S. Court of Appeals that the statistical sampling was ordered to put the department in compliance with the federal court’s order “when, in fact, it is in violation of the court’s order.”
U.S. District Judge Royce C. Lamberth had ordered the Interior and Treasury departments to overhaul the trust fund and find out how much account holders were owed. He said a century of mismanagement and shoddy record-keeping has left 300,000 Indians with no idea of how much they are owed in royalties from oil drilling, grazing and logging on Indian-owned lands. Each year, about $500 million in royalties is channeled into the trust accounts. They are passed down through generations, and many impoverished Indians rely on them to pay for food and everyday needs. While plaintiffs in the lawsuit contend that a minimum of $10 billion is owed, Interior officials have said the total is probably less, but at least in the hundreds of millions.
Lamberth said the accounts had been so badly mismanaged that the system represented “fiscal and governmental irresponsibility in its purest form.” At one point in the lawsuit, he held Babbitt and Treasury Secretary Robert E. Rubin in contempt of court for failing to produce records as ordered by the judge.
Gingold said the proposed sampling would be a waste of money because account records are so unreliable that a sampling could not produce accurate information. Instead, Gingold proposed the creation of an “economic model” of the account system, using hundreds of variables that would include original data such as oil well production and grazing records instead of only records from sample accounts.
Gingold said such an accounting could be done for about $2 million instead of $70 million because the data is readily available. Last year, the Interior Department held 80 public hearings around the country to hear testimony about the sampling plan, which was designed to study the records of about 350 accounts and make projections for compensation from those records.
A majority of account holders who commented said the government should research each account separately to determine just compensation. Kevin Gover, former assistant secretary for Indian affairs, estimated such an undertaking would require doubling the Bureau of Indian Affairs’s annual $2 billion budget for an undetermined number of years.
During a six-week trial in 1999, government officials conceded that the records are in a shambles and that they are unable to provide an accounting. Congress approved $27.6 million in emergency funds to help fix the problems and urged the government to settle the lawsuit by using statistical sampling to determine fair compensation. © 2001 The Washington Post
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