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>From http://www.washingtonpost.com/wp-dyn/articles/A25625-2002Apr21.html
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washingtonpost.com
Lost Trust: Billions Go Uncounted
Indians in Century-Old Fight to Tally Money Owed for Land Use
By Ellen Nakashima and Neely Tucker
Washington Post Staff Writers
Monday, April 22, 2002; Page A01
In the whispering grasslands of North Dakota, Tex Hall's family has grazed cattle for
four generations. More than a century ago, most of their land was among Indian
acreage taken by the U.S. government, held in trust and leased to strangers. When
Hall was a boy, his parents, members of the Mandan-Hidatsa-Arikara tribes, would
await the arrival of a U.S. Treasury check each December.
Sometimes the check was for $5,000. The next year, perhaps $4,000. Another year,
another sum. His mother wondered why the amounts varied. The yellow government
envelope contained no explanation.
His father would call the Bureau of Indian Affairs. "We'll get back to you," the local
officials said. But they never did. The frustration would mount. "I want an
accounting!" his father would shout, startling his eight children.
Now the parents are dead, and, come December, it is Hall and his remaining six
brothers and sisters who await the checks. The amounts still vary, and the Halls still
have no explanation. They are among hundreds of thousands of Indians in the West
whose lands were taken into government trust -- and now lie at the center of one of
the most intractable accounting messes in U.S. history.
For more than a century, ranchers, miners and loggers have contracted with the
government to harvest timber, graze cattle and extract oil, gas and minerals from
Indian land; the money paid the government is supposed to be forwarded to each
landowner. But from the beginning, the government paid little attention to which
landowner was owed what. Over time, as Indians died and land was divided among
heirs, the accounting problems grew exponentially. Tribes and individuals have never
been sure they were getting their due.
"To this day, when I get my check there is nothing that shows what tract of land it's
for," said Hall, president of the National Congress of American Indians. "Isn't that
crazy?"
Congress has tried to fix the system and failed. Accounting firm Arthur Andersen was
paid $20 million in the early 1990s to reconcile tribal accountsand failed. The
Interior
Department, which oversees the BIA, tried to fix the system. It, too, failed and ended
up in court with individual account holders. Evidence made it clear that relevant
documents were shredded and e-mails deleted. Already, two Clinton Cabinet
members have been found in contempt of court, and now Interior Secretary Gale A.
Norton and 40 deputies face contempt charges.
That case -- one of the largest class action lawsuits in history in terms of
plaintiffs --
was filed six years ago to secure a reckoning of 300,000 accounts belonging to
individual Native Americans. In separate litigation, tribesare seeking similar
treatment
for about 1,400 tribal accounts.
The government, the Native Americans contend, still cannot provide an accurate
balance sheet for a single one.
"We call this the Indian Enron case," Hall said. Even that may fail to capture the
scope of an accounting disaster that has shaped the lives and lands of Indians since
the 1820s.
Plaintiffs in the class action, led by Elouise Cobell, treasurer of the Blackfeet
Indians
in Montana, say they are owed at least $10 billion. U.S. District Judge Royce C.
Lamberth has already found the government breached its fiduciary duty to the
Indians; he is considering how the system might be repaired and will later determine
damages.
At least 18 tribal suits were filed in January and February, claiming billions of
dollars
in damages and seeking an accounting of their own. But there is no consensus on
how to accomplish either an accounting dating back more than a century or a long-
term fix for the future -- or even a settlement.
Norton wants to create an agency to overhaul the trust fund -- the Bureau of Indian
Trust Asset Management (BITAM). Cobell wants the judge to appoint an
independent receiver, which would focus solely on the individual accounts. A task
force of 36 tribal leaders is considering calling for legislation that would create a
body
akin to a Resolution Trust Corp., which restored the savings and loan industry in the
1980s and which would address both tribal and individual accounts.
Some lawmakers are proposing their own fix. Senate Majority Leader Thomas A.
Daschle (D-S.D.) and Sens. Tim Johnson (D-S.D.) and John McCain (R-Ariz.)
introduced legislation Friday to create an Interior Department position of deputy
secretary for trust management and reform to handle all trust fund duties, and to
make it easier for tribes to directly manage or co-manage their own trust funds,
which few tribes do now.
"The way these trust fund holders have been treated . . . is a national disgrace," said
Rep. Tom Udall (D-N.M.), whose district includes large numbers of Navajo. "If 40,000
people were cut off Social Security, there would be an uproar in Congress."
The problem dates to the early 19th century, when the government began putting
tribal land in trust. Accounting problems were cited as early as 1828. Then, with the
1887 Dawes Act, the government began breaking up Western tribal land into
allotments to individual Indians. That law was a means of winning land for white
settlers. Typically, the government would declare land "surplus" and pay the Indians -
- who often did not see land as something that could be bought or sold -- a pittance.
Within 50 years, Native Americans lost more than 135,000 square miles of land --
roughly the area of Maryland, Virginia, West Virginia, Pennsylvania, Rhode Island
and the District of Columbia combined. The remaining 57 million acres, 47 million of
which is tribal land, has been held in trust by the government.
Companies or individuals who want to extract the oil or minerals from the property or
graze cattle on it sign leases with the local BIA superintendent and pay the Office of
Trust Fund Management in Albuquerque, which manages the accounts. The
accounts pay interest, though investments are limited to government securities.
Over the decades, the government gave the accounts low priority, spreading records
across dozens of poorly kept warehouses across the country, where fires, floods and
insects destroyed them. Compounding the problem is the fact that most Indians die
without wills, leaving a probate court or administrative law judge to divide the land
among the heirs. The number of accounts has increased exponentially with each
generation, while each owner's share of the land has become correspondingly
smaller.
Today, there is a backlog of more than 20,000 probate cases. Property inspections
are not done on time or not done at all. Appraisals are figured on a computer in a
regional office, often without a site visit. Surveys are sometimes based on traditional
boundaries, as in "Go to the old oak tree." There is no way to ensure that account
holders are receiving the highest value for their leases, no way to know when money
is owed an account holder, no central location to get information on a single account.
"You have to talk to the Bureau of Indian Affairs to find out what's going on with the
land management and the lease," NCAI attorney John Dossett said. "To find out how
much money is in your account, you have to talk to the Office of Trust Fund
Management. . . . One office supposedly knows how much is to come in. The other
office is supposed to know how much actually came in." And in most cases, he said,
they don't know either.
In 1972, the BIA announced it had lost the ability to reconcile the tribal trust
accounts.
In the early 1980s, the General Accounting Office, the Interior Department's
inspector general and Price Waterhouse issued reports urging reforms. Interior
created the Branch of Trust Fund Accounting in 1985 to handle all trust accounting
duties. Then in 1991, the department created the Office of Trust Fund Management
to oversee all trust fund investment and accounting duties. The next year, Congress
issued a report urging reform, and in 1994, it passed the American Indian Trust
Reform Management Act, setting up a special trustee within Interior to develop a new
management plan.
Reports gathered dust. The bureaucracy expanded. Still, there was no broad
solution.
By 1996, Cobell had had enough. She sued to force the government to account for
all royalties due since 1887 to individual Indians and their heirs.
Norton said her department is developing a long-term plan to improve the security of
individual Indian trust data. In February, she told Congress that the agency would
upgrade individual trust fund technology systems by 2005.
"Indian trust asset management responsibility is a very high priority for the
department," Norton said. "The tribes, Interior and the Congress have to reconcile
the competing principles associated with trust responsibility and self-determination."
But the government's lack of progress over the past six years has infuriated Judge
Lamberth. He has found that government lawyers have misled the court so often that
he held Interior Secretary Bruce Babbitt and Treasury Secretary Robert E. Rubin in
contempt during the Clinton administration and placed the individual trust system
under his oversight for five years.
In December, Lamberth ordered the Interior Department to shut down Web sites that
linked to the trust funds after discovering computer security was so lax that the
accounts could be hacked into. The department responded by yanking all its Web
sites, even for vacationers making camping reservations in Yellowstone and other
parks.
Five months later, checks are still not going out to tens of thousands of Indians. The
BIA's Land Records and Information System (LRIS), which records all probate and
lease changes, remains off-line, blocking new transactions and "choking" the Indian
economy, as Hall puts it.
A series of lawsuits filed over the last decade hints at the scale of lost Indian
income.
In Minnesota, the Red Lake Band of Chippewa won $80 million in two cases for
underpayment of forestry land fees. After the Jicarilla Apache nation sued over the
handling of its oil and gas leases and began auditing its own leases, royalties rose
more than $53 million over 10 years.
Cobell said that if all royalties due for individual accounts since 1877 were totaled,
they would amount to more than $100 billion in current dollars. Even if the
government could account for 90 percent of that, at least $10 billion would still be
missing, she said.
Some former government officials doubt the plaintiffs can prove losses in that range
or that the government would pay that much. "Any settlement is not going to be $10
billion," said Kevin Gover, a Pawnee Indian and former assistant secretary for Indian
affairs, who was held in contempt in 1999. "It's not going to be a lot of money, and
you're going to see a lot of extremely unhappy people."
It would not be impossible to fashion a reckoning, Cobell said. "Go back to the
original allotment and come forward," she said. "Determine who the heirs are. This is
not hard to do. Hire crisis managers. They do it every day in the outside world."
� 2002 The Washington Post Company
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