Taxes, American principles are at stake in gross mismanagement of Indian trust funds
Omaha World Herald
If the theft of billions of dollars from some of the nation’s poorest citizens isn’t enough to galvanize American taxpayers into action, guarding their own pocketbooks should be. Every day that the Bureau of Indian Affairs procrastinates on cleaning up the Native American trust fund, the price tag to fix it goes up.
“The way these trust fund holders have been treated . . . is a national disgrace. If 40,000 people were cut off Social Security, there would be an uproar in Congress,” Rep. Tom Udall, D-N.M., told The Washington Post in April. Yet the possibility that an estimated $10 billion is missing from approximately 300,000 Individual Indian Money accounts has drawn scant attention and little in the way of results from Congress and the White House.
U.S. District Judge Royce Lamberth, though, is demanding action. Lamberth last Tuesday found Interior Secretary Gale Norton in contempt of court, saying she and a top assistant committed “fraud on the court” by concealing their agency’s lack of progress toward resolving the mismanagement of the trust fund’s billions of dollars.
Lamberth also found former Interior Secretary Bruce Babbitt and former Treasury Secretary Robert Rubin in contempt of court in 1999, saying they had shown a “flagrant disregard for his orders” made after he ruled in favor of Native Americans who filed a class-action lawsuit in 1996 seeking a full accounting and overhaul of the system.
The U.S. government holds $450 million in trust funds for individual Native Americans and another $2.3 billion for tribes, the result of royalties that ranchers, miners and loggers pay the government for use of Native American lands. That money is supposed to be forwarded to each landowner. Payments the Indians receive, however, vary widely from year to year, with no explanation of why or even what tract of land the payment is for.
From the trust’s beginnings in the 1880s, the government has handled the funds sloppily, if not criminally. Records were spread across dozens of poorly kept warehouses, destroyed by fires, floods or insects. Add the rapidly swelling number of accounts with each successive genera- tion, and you have what some call “the Indian Enron case.”
Accounting firm Arthur Andersen (a coincidental twist of fate) was paid $20 million in the 1990s to reconcile the accounts. It was able only to reconcile about 2,000 tribal accounts – not the thousands of individual accounts – and then only for a period from 1973 to 1992. Just during those 20 years, the auditor noted, at least $2.4 billion was unaccounted for and billions more were virtually untraceable because of the questionable nature of the government’s records.
Since 1996, when Elouise Cobell, treasurer of the Blackfeet Indians in Montana, initiated the lawsuit, the Interior Department has spent more than $600 million to comply with instructions from both Congress and Lamberth. In his ruling Tuesday, Lamberth established a Jan. 6, 2003, deadline for the Interior Department to come up with a new, workable management plan for overseeing the money. He warned that he has the authority to appoint an outside expert to manage the money if he is not satisfied with Interior’s plan.
Whatever solution is struck, logic demands that Native Americans approve of it. Here again, Norton is off-track. Her efforts to overhaul the management of the trust funds stalled last week when a task force of tribal leaders refused to back down on a demand that a panel outside the Interior Department, and including Indian members, supervise the department’s management of money.
The government’s failure to reform the Indian trust system is not only a continual drain on taxpayer funds; it silently condones the continued abuse of this long-mistreated minority population.
“If this happened in Social Security, I tell you there would be a war. If we can manage Social Security, we ought to be able to manage this,” then-Texas Rep. Albert G. Bustamante said during oversight hearings in 1990.
He was right. Let’s hope someone other than Judge Lamberth is listening now, 12 years and millions of dollars later.
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