Long battle on Indian funds reaches an optimistic juncture

The U.S. House of Representatives voted Tuesday (Nov. 30) to approve the Cobell settlement of Native American claims for breach of trust by the federal government on their individual accounts for leasing land.

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Mark Trahant

The U.S. House of Representatives voted Tuesday (Nov. 30) to approve the Cobell settlement of Native American claims for breach of trust by the federal government on their individual accounts for leasing land.

Update: The U.S. House of Representatives approved the Cobell settlement on Nov. 30, sending the measure to President Obama's desk.

I remember the first time I learned of the Cobell case. It was several newspaper-lives ago. Over the years I have collected lots of paper, listened to lawyers explanations, and written a bit about the litigation.

The original complaint, filed in 1996, said at least 300,000 individual American Indians were victims of a gross breach of trust because of the way the Interior Department mismanaged Individual Indian Money accounts. IIM accounts hold money for individuals from land or natural resource payments as well as other transfers.

I remember thinking at the time about first-hand encounters with such record keeping. One Bureau of Indian Affairs agency superintendent told me that short-term interest from IIM accounts could even be used as a “secret slush fund” for urgent and unbudgeted expenses.

Elouise Cobell’s 14-year litigation was both complex and simple. The sheer volume of paper filed with the courts was extraordinary: Thousands of pages of documents, several trials, appeals, and plenty of contempt of court sanctions along the way. The case was also simple, based on this question: Can the government, acting as trustee, account for how it managed individual Indians’ money?

The U.S. District Court in D.C. answered that question this way: “No real accounting, historical or otherwise, has ever been done of the IIM Trust.” Indeed, as late as 1995 the Interior Department testified it was destroying records that could be used for reconciliation of these account.

Has the United States, the trustee, fixed this problem? The short answer is who knows? But possibly.

“My greatest optimism about this settlement, however, is the hope it holds for significant and permanent reform in the way the departments of Interior and Treasury account for and manage Individual Indian Money accounts,” Cobell said in a statement last year.

The Interior Department is also optimistic. “One of the benefits of the Cobell litigation is the accounting has proceeded over the last ten years, literally tens of millions of dollars have been spent to straighten out the accounting and to have a solid accounting going forward,” said Interior Deputy Secretary David Hayes on Monday. “Part of the settlement, essentially, validates the account as it is today. We are confident we have the right numbers and a good baseline for going forward.”

Another part of the settlement, a process to consolidate land, could make that system work better as well. As the district court noted, “although the documents necessary to complete adequate accountings are available, the accounting process is extremely expensive, often dwarfing the dollar amounts reflected in beneficiaries’ accounts.”

Trying to keep track of small lease payments for a piece of ground owned by dozens of heirs is damn near impossible. The settlement creates a $1.9 billion fund so individual land owners can sell their share back to a tribe. The idea here is the settlement can unlock land now essentially frozen by multiple heirs who own it.

A few years ago the judge who was then on the case, Royce Lamberth, wrote: :It may be that the opacity of the cause renders the Indian trust problem insoluable."

The Cobell case was always both legal and political. The legal case was clear because there was no defense against mismanagement of trust money. Either the government could account for its management of individual Indian accounts or it could not.

But the political case has always been much more iffy. No administration -- until the Obama administration -- was willing to pull out all the stops to reach a resolution. And, even then, Congress would still have to own up the government's mismanagement and pay for those mistakes. What's remarkable about this settlement — and the congressional resolution — is that we may be at the only point in history where the votes are there to make it so.

The insoluable? Perhaps no longer.


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