Federal government accused of mismanaging accounts
by Jon Dougherty
WorldNetDaily
A lawsuit charging the federal government with more than a century’s worth of Indian trust-fund mismanagement seeks billions in compensation for account holders, though the Interior Department claims a full accounting of records at this stage is impossible.
Elouise Cobell, a Montana banker and member of the Blackfeet tribe, originally filed the suit – the largest Indian-related lawsuit ever against the government – in 1996, claiming that monies earned from Indian land and intended for Indian beneficiaries was either lost, stolen, misappropriated or never collected.
Since then, a steady stream of court victories has kept the suit alive, ensnaring officials from two administrations and a number of federal agencies.
According to reports, trust accounts representing about 45 million acres were supposed to be held by the government in trust for individual Indians after the passage of an 1887 law dividing up reservation land.
Under the terms of that law, the government can’t tax or sell the land and must approve all contracts for mining, grazing and timber leases. But Cobell and attorneys for the co-plaintiffs say the government has mismanaged those earnings; they are seeking $10 billion in compensation for around 300,000 account holders.
The government says it may never be able to produce accurate earnings records. Earlier this week, Interior Secretary Gale Norton testified in federal court in Washington, D.C., that a full accounting of the trust accounts is not likely since too many of the records have been lost or destroyed over the years.
“In general terms, trying to piece together all the information since 1887 is going to be a very difficult job. It will be blocked in some cases because a particular piece of information has been destroyed,” Norton testified
Norton’s agency has been ordered by U.S. District Judge Royce C. Lamberth to track debts the government owes Indian tribes from a $500 million-a-year trust fund established to mete out royalties earned from Indian-owned land taken by the government.
Norton, who inherited both the lawsuit and the accounting mess from her predecessor, Clinton appointee Bruce Babbitt, says Interior is trying to follow Lamberth’s order, but she – along with Neal McCaleb, assistant secretary for Indian Affairs – is facing a contempt of court charge for allegedly hiding Indian trust-fund accounting failures.
“We have tried to use appropriate standards and aspire to a high level of accounting responsibility,” Norton told the court. “I’m not sure if, in every instance, we have met that standard.”
Norton is the first Cabinet member to face questioning on contempt charges by the Cobell plaintiffs.
Babbitt testified in the Cobell case in 1999 in a trial on trust reform. Lamberth fined him and then-Treasury Secretary Robert Rubin $600,000, then held both in contempt of court for failing to turn over documents he had ordered produced.
Those fines, along with any Norton may be levied, will be paid by the department.
Norton has admitted since taking over Interior a year ago that most of her time has been consumed with the Indian Trust Management issue.
The government itself has acknowledged mismanagement of the accounts, and Norton has proposed the creation of a new bureau inside Interior to manage the money.
“We are committed to reforming the Indian trust system,” says Steve Griles, deputy secretary of Interior. “We have proposed an initiative to improve and fix the Indian trust program,” he said, noting the agency is “actively consulting with tribal members, asking, ‘Is the trust system working now?'”
But Indian leaders, as well as Cobell, want to take all money management authority away from Interior and give it to an independent outside party. Even the top congressionally appointed trust official, Thomas Slonaker, has said he has no faith in the Interior Department’s reform efforts.
There are other indications that Interior has been lethargic concerning the resolution of the case. Last year, Alan Balaran, a court-appointed investigator, recommended that Lamberth hold Norton in contempt for failing to comply with a court order meant to protect agency whistleblowers.
Published reports said Balaran ordered the department to let its employees know they could contact him directly and anonymously with concerns about efforts to fix the trust fund. However, Interior was slow to notify employees they would be protected from reprisal and issued memos undermining the open dialogue, Balaran said.
In the months and years following the filing of her suit, Cobell says the government has regularly stonewalled reform efforts.
“The federal government has spent the past five and one-half years fiercely defending its turf, both by continuing its gross mismanagement of the trust and by resisting efforts by the federal courts to bring the trust under control,” she says. “Fortunately, the courts have sided with us at every stage of the case. Congress, too, has lost patience with Interior’s excuses.”
She says she wants to accomplish two things with her suit: “To win a fair and accurate ‘restatement’ of the accounts for approximately 500,000 individual Indian trust beneficiaries, and to see that an adequate system is put in place to operate the trust in a fully professional manner.”
“I believe the legacy of this case will not only be financial justice for hundreds of thousands of Indians, but a convincing and historic rejection of sloppy, incompetent and insensitive conduct by those who are supposed to be serving the taxpayers and the national interest as a whole,” she added.
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