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Wednesday August 30, 2000
The Diane Rehm Show
HOST: From WAMU in Washington, I’m Steve Roberts sitting in today for Diane Rehm while she’s away on vacation. Since 1887 the federal government has had the responsibility of managing millions of acres owned by Native Americans. But owners of these properties contend that there has been more than a century of mismanagement. A class action suit was filed in 1996 to force the federal government to account for billions of dollars that they say have been lost and to reform the system. Joining me in the studio to talk about the history and status of this case is Kevin Gover. He’s the assistant secretary of Indian Affairs at the Department of Interior. And by phone from Browning, Montana, Elouise Cobell, who’s the lead plaintiff in the suit and a member of the Blackfeet tribe.
Welcome. Good morning. Thanks to you both for being here.
Kevin Gover [KG]: Good morning.
Elouise Cobell [EC]: Good morning, Steve.
HOST: [Gives phone number.] Let’s start, Mr. Gover. How is this system supposed to work, set up under this act of Congress well over a hundred years ago?
KG: The way it should work is that both tribes and individual Indians who own land that are held by the United States in trust on their behalf should be producing income through leases and the like. The Bureau of Indian Affairs is responsible for approving any leases involving those Indian lands, and then we are responsible for collecting the money, the proceeds of the lease. At that point the money goes into an account for either the tribe or the individual Indians where we are to tend to it, make sure that it is earning an appropriate amount of interest and then paying it out on a periodic basis to the account holders.
HOST: Now given the fact that this was passed over a hundred years ago, how is it determined who benefits? Does it have to be Indians who have registered with a particular tribe? I mean, it must be very confusing.
KG: It can get very confusing because at this point, of course, after years and several generations have passed, these lands have descended down by inheritance, usually without the benefit of wills, so that means any number of people might own a particular allotment. The typical Indian allotment – that is, land owned by individual Indians – has 40 owners or so. We actually have allotments in the Midwest, one allotment with over
2,000 owners. And so it does get very difficult to keep track of all the owners, who they are, where they are, and what their share of the proceeds are.
HOST: Elouise Cobell, tell me what from your perspective and your experience, I know you were treasurer of the Blackfeet tribe, you’ve been involved in this issue for a long time, what went wrong with this system?
EC: Well, the government was never made to be accountable to native people or individual Indians that own land and…
HOST: What do you mean by not accountable?
EC: They never had to give account statements to individual Indians. Individual Indians didn’t know where their land was located. They didn’t know what that land produced, and basically the United States government just got away with really shoddy accountability to individual Indians. And we were just so tired of the empty promises that continued on. As a child growing up, hearing the stories of my relatives coming and saying help us, we can’t get any information from the government. They won’t tell us – the Indian agent won’t give us our money. We don’t how much money that we should be receiving. And we just basically got tired of the lack of accountability and we filed the lawsuit.
HOST: Do you think it was just mismanagement? Was it outright fraud? A combination of the two? What do you think’s behind this problem?
EC: I think it’s all of the above. I think by not having any checks and balances, by not ever having an audit, they were never – you know, they never audited these accounts from the eighteen hundreds forward, and you could imagine… You know I’m a banker, I created a bank and I know how other people’s money is managed, and you have to be accountable to the people. You have to give information to the people on their accounts, and the United States government, particularly the Department of Interior and Treasury, they just were just not accountable to individual Indians and they were able to get away with anything. So basically anything could have happened with these accounts.
HOST: Kevin Gover, is this a fair description? Would you agree with it? What would you disagree with?
KG: Actually, I do agree with virtually all of it. I would say I think the issue is less fraud than mismanagement, although there are documented instances of fraud, the actual theft of these funds from individual accounts.
HOST: And why such mismanagement? Judge Lamberth, who has been ruling over this case, said he’d never seen more egregious government conduct. Is this endemic to the
BIA? Was it, is it worse in dealing with Native Americans?
KG: Yeah, I think it is, I think it is. You know, there was nothing undeliberate about the neglect of Indian property, Indian people and their money in these accounts. It requires resources in order to manage any asset of this size properly. Remember, we administer 55 million acres and several billion dollars in trust funds. And over the years the Congress simply failed to fund this adequately, and I agree with Elouise that the department lacked the resolve to do it properly, to ask for the money that was necessary and then to do what they needed to do. So over the years, after enough neglect builds up, the system simply collapsed. Especially under the burden of an increasing number of account holders, because again, as these lands descend, the number of account holders increases exponentially. And so at this point we are administering at least 300,000 individual Indian accounts, 200,000 of which generate less than $25 in any given year. So that is a vexing management problem at this point. But…
HOST: Just a question of resources or is it something deeper here?
KG: Yeah, I think it is deeper, and I think Elouise has always been right in saying this could only happen to Indians. That no other group of people in this country would stand for that, nor would the country consider doing something of that type. Now, this really is in the nature of the Japanese internments and those sorts of ugly blots in history, but the fact is that Indian people were not just ignored for many years but quite deliberately assaulted by the United States in a series of efforts to destroy the Indian tribes. And so it should be no surprise that at this point we have a lot, a lot, a lot of making amends to do.
HOST: Elouise Cobell, as I mentioned earlier, you became treasurer of the Blackfeet tribe, and then as you pointed out also formed a bank. How did you come to understand the range of this mismanagement, and what finally got you to the point where you filed the suit? Take us through your own experiences.
EC: Well, it really didn’t take a rocket scientist to figure this out. Is that you were not receiving any type of account statements. Statements that were received by the Blackfeet tribe were inaccurate. Instead of earning interest on our money we were earning deficit interest. And when we started asking all the right questions we were totally stonewalled. This was in the `70s and the `80s and it just continued to go on. And when you tried to help individual Indians to try to find out information on their land and their money you were continually stonewalled – come back tomorrow, come back next week, or come back in a year, and we’ll tell you about your account.
HOST: Are you an account holder yourself?
EC: Yes, I am. I’m an account holder, my parents were account holders, my grandparents were account holders. And so I’ve seen it firsthand. I’ve seen it firsthand on the mismanagement, the total mismanagement. And I’d just like to say there’s totally a lot of
blame that could be shared by lots of administrations. But I think that this administration certainly could be the hero. You know, when you think about it, why should we have to fight a court battle to get an accounting? You know, we won the first part of the court trial in December, we had a stunning victory and the judge…
HOST: I’ll get to that in just a second. Kevin Gover, you mouthed to me as Elouise Cobell was talking that you too are an account holder.
KG: That’s right, as are probably several thousand of the employees of the Bureau of Indian Affairs.
HOST: What’s your ancestry? What tribe are you associated with?
KG: I’m a member of the Pawnee tribe of Oklahoma, and my grandfather passed away about eight years ago and I inherited a one-twenty-seventh share of his land, which he in turn had inherited from his father, so we’re in the same boat. I …
HOST: So did you have the same problems as Elouise in figuring out what you were owed as a family?
KG: Well, not really. Elouise actually has a more complicated and frankly important situation. Her assets are really worth something. Mine are not, I mean I have – when the account was opened it had seven cents in it. It now has eight cents because it’s earned a penny interest over the last five years.
EC: Could I add something? I’d just like to say that Mr. Gover doesn’t know if that seven cents is accurate or not and that’s exactly the problem, is, because there isn’t any accounting Mr. Gover might have seven thousand in that account because we’ve never had an accounting. And that’s what part of this whole, entire lawsuit is about, is providing an accounting to beneficiaries. And so Mr. Gover doesn’t know if he should be paid seven cents or $7,000. And that’s the issue.
KG: Yeah, I don’t think that’s accurate. I understand your point and I think it’s correct that as to any accounts that pre-dated 1994, we cannot provide an accounting that anyone would find persuasive. But you know with the more recent accounts, and mine is not unusual, especially of the accounts that have been opened recently there’s virtually no money in it, there never was, and I do get, I get quarterly statements. It costs the government $35 a year to maintain my seven-cent account.
HOST: Let me ask you, because a caller has called in, and I want to be sure people – this is a complicated subject and not one a lot of people are familiar with. A caller calls up and asks Mr. Gover this business of leasing, how does this work? These are lands that are
owned by Native Americans but the federal government has the right to lease them for mining, oil, timber – how exactly does that work?
KG: No, we don’t have the right to lease them on behalf of the tribe or the individual. The individual or the tribe are really responsible for the leasing. We have to approve any lease. Some would say we have an affirmative obligation to lease. I don’t – we don’t have to argue that out. But what we cannot do is lease it without the owner’s permission.
HOST: And you collect the money.
KG: Yes.
HOST: Now tell me, Elouise Cobell, how the suit came about in ’96. You were saying that you were just stonewalled, you were fed up. Why did you reach the point where you thought you had to file a suit to get action?
EC: Because you just continued to go to meetings, you saw new systems being put in place and they didn’t work. You saw blue ribbon panels appointed and you saw “tiger teams” appointed and you’d go to these meetings and they’d say yes we’re going to give you an accounting, yes we’re going to do this, yes we’re going to do that, and when you walked away and by the time you got home they’d forgotten all their promises. And so after a while it just didn’t make any sense and you just had to stay in their face and make them do the right thing. And so after several meetings with high, top officials in the government, I came to the reality that nothing was going to happen unless we filed a lawsuit, unless we got them in court. And what we wanted was justice.
HOST: Kevin Gover, fair or unfair?
KG: Oh, I understand both Ms. Cobell’s frustration and it’s shared by many, many Indian people. And I think it’s a fair characterization that for many years since the problem really began to come to light that the government did stonewall, and that successive administrations were hoping simply to get out of office before the shoe dropped. And as it happened it dropped on the Clinton Administration.
HOST: We’re going to continue this conversation. [Break]
HOST: Kevin Gover, during this suit you were held – you were one of three federal officials, you were in august company, Secretary of the Interior Babbitt, Secretary of the Treasury Robert Rubin at the time – you were held in contempt by a federal judge who said you weren’t turning over records and materials fast enough. What’s that all about?
KG: Well, we screwed up. We thought that –
HOST: Wait. This is a moment of considerable importance. A federal official actually said we screwed up [laughing] on a national radio program.
KG: I’ve said the same thing to the judge and I’ve given him my personal apologies, I apologized to my boss the Secretary. You know, people, certainly at the Secretary’s level and even at my level are not familiar day-to-day with what’s going on with matters of this type. But I have done my mea culpa and said I did not keep close enough track on what our lawyers and our staff were doing to comply with the judge’s order. I did ask from time to time. I accepted inadequate information, and the judge was right that we failed to comply with that order. Since that time, and you know I really regret that it required a contempt citation, but since that time we have expended a great deal of money and effort to come up with those documents. You know it wasn’t a situation where I had five file folders in my desk that I just refused to turn over. Collecting these documents requires searching dozens of locations, hundreds of different, thousands of different boxes of files to come up with tens of thousands of pages of documents relating to accounts that do go back all the way to the original allotment at the turn of the century. So it was a major undertaking, but we screwed up.
HOST: Elouise Cobell, you accept Kevin Gover’s description of what happened?
EC: Well, I don’t accept the fact that they screwed up. You know in the outside world if you screw up with people’s money you end up in jail. And I think that’s been the problem here, is that the Department of Interior has never had to pay for what they’ve done to screw up people’s lives in Indian reservations. These people are poor. They’re the poorest people in the country. And when you just say you screw up, you’ve affected some person’s life and you’ve affected it big-time. People rely on money to pay light bills, to put food on the table, and we can no longer just take this lightly. Oh, we screwed up. I want accountability that every American citizen has when they put money in their bank. We want accountability.
HOST: The judge did in fact impose $600,000 in penalties against the government, didn’t it?
EC: Yeah, but who paid that? I paid it and you paid it, Steve. That came out of the government coffers. It didn’t come out of their personal accounts. I think that we have to sanction them personally. It has to come out of – we have to take their car keys away from them. We have to take their house keys away from them. And then –
HOST: You mean Mr. Gover and, and Secretary Babbitt and Secretary Rubin?
EC: Absolutely. They have to be put in the same condition as most people, individual Indians living on reservations. They have to be put in the same conditions, to worry about where they’re going to live, if they can pay their rent, if they can – I think that’s exactly
why this has not received the attention that it should have, is because there haven’t been proper sanctions put in place.
HOST: Go ahead.
KG: You know, if that were the test and federal officials could end up in jail, not for criminal conduct but for the failures of their agency, you’re never going to get anybody working for this government. And that’s the reason that there’s a rule that federal officials cannot be held personally liable unless they commit conduct that’s outside the scope of their jobs. And when you make it personal, Elouise, you make it all the more difficult for us to recruit the kind of people that are going to make it possible to fix the system. And frankly I think that’s why you do it, I think that you turn it personal in order to make the job more difficult because you and your lawyers have staked your reputations on the proposition that Interior cannot fix it. And I don’t think that that’s helpful. I don’t think it’s going to succeed. But it does make the job more difficult, and that’s what delays trust reform. When we spend our time dealing with those kinds of accusations instead of actually working on the system we delay the implementation of trust reform. And that’s where you and I part company very severely.
EC: We don’t have any problems recruiting people to work in banking and financial institutions.
KG: And that’s because they’re not held personally liable unless they commit a criminal act. And no one here has committed a criminal act, not myself, neither of the two Cabinet members.
EC: Well, I think the judge might differ a little bit because I think when you don’t comply with court orders that might be a criminal act. I certainly know…
KG: Well, the judge rejected it as a criminal contempt and you know that.
EC: Well, I think the judge will continue to monitor to see, to make sure that you stay in line and other people stay in line…
KG: As he should, and we will.
HOST: Let me ask you, Elouise Cobell, as you point out, Judge Lamberth did issue a decision. He kept control of the case for five years. He said the BIA would have to file quarterly reports. Is the system any better now?
EC: No, the system is not any better because accounting systems have not been put in place. And the problem that I have is that we know that account holders have not had an accurate account balance given to them, there are no account statements that are
distributed that are accurate.
HOST: So you don’t think the government is complying with the judge’s order?
EC: No. I don’t think that they have. They have to give quarterly reports to the judge and the quarterly reports do not reflect basically what they said in the trial that they were doing, that they had an accounting system that was going to be put in place, that would be put in place by July of 1999. It hasn’t been put in place. And so we have serious problems with the production of documents, documents are not being produced.
HOST: Now, Kevin Gover, do you think you’re complying with the judge’s order?
KG: Of course we do. And you know it’s simply inaccurate to say that the accounting system is not in place. I absolutely disagree that it’s not improved. I think that under the supervision of the Special Trustee for American Indians the trust fund accounting system that has now been installed and is in use throughout the country is an improvement, and that in fact since 1994 the department has improved. Now Elouise makes a valid point that what we don’t know is whether the account balances that the Special Trustee inherited in 1994 were accurate. And it may be that we’ll never know. She’s absolutely right – government ought to be able to account for that. The question is, what do we do if we can’t? What do we do if the documentation simply does not exist?
HOST: Let me ask you one other question and then we’ll get to our callers. [gives phone number] You said we screwed up, meaning the U.S. government. You admitted that the system has been broken for a long time. And yet the government has appealed Judge Lamberth’s order.
KG: That’s right.
HOST: Why is that?
KG: Well, you know, the way the government works, and this is another example of why individuals shouldn’t be held responsible for what the government does, believe it or not the parties to a case don’t necessarily get to decide whether or not an appeal is taken. The Justice Department gets to decide that and they decide that on the basis of the institutional interests of the United States. And the Justice Department is pursuing a theory that Judge Lamberth lacked jurisdiction over the case and lacked jurisdiction to order a historical accounting. And they’re pursuing that appeal. I think it’s being heard next week by the D.C. ….
HOST: It sounds like you don’t agree.
KG: Well, I, I, here’s what I think. Trust reform was a long time in coming, and in
Washington it takes a lot of people to agree before you can do something as large as that.Right now we’re in a unique situation where we have a Congress that supports reform, we have an Administration that supports reform, and we have a judge sort of overseeing the process. I would actually worry about what happens if the judge lost jurisdiction because the tension that’s created by a court order and by court supervision actually helps us get it done. It helps us get the money from the Congress. It requires the accountability that Elouise is looking for.
HOST: So you think the presence of Judge Lamberth as overseer of this case is useful?
KG: I think it can be. It can also become destructive, of course. I mean there’s such a thing as too much oversight and if we spend most of our time responding to overseers as opposed to doing the work then it becomes destructive. But I don’t think we’re at that point. I think the judge has been accurate and reasonable in the demands he’s made of us and we have been providing the information that’s required. You know, Elouise talked about how the plans are different from what we testified to. Well, they’re going to be different again. They’re going to keep changing because as we learn more about the system, as we get further in the process, the plan’s going to change. We have to respond to the circumstances that we encounter. So I make no apologies for that. What I would maintain is that we are making the progress that we said that we would. None of this is going as fast as we would like. I wish it were done yesterday, but that’s not possible. But we will continue to work on it until it is right.
HOST: Elouise Cobell, what did the plaintiffs, including you as lead plaintiff, what was the gist of your reply to the government, which I know you filed within the last few months?
EC: Well, we felt that the government should be held to the standard of a trust. That there’s a trustee, and they have to understand that they are under the requirement of how you manage a trust. And of course the government, I believe their appeal is they’re saying that they’re not held to the same standard as a common trust is. And you know I’m not a lawyer, I’m an Indian beneficiary, and we want justice. That’s basically how we see it out here as individual Indians.
HOST: Let’s talk to some of our callers who want to join our conversation.
