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Subject: Indian Trust Fund Dispute Grows
Date: Thu, 7 Jan 1999 19:47:27 EST
Indian Trust Fund Dispute Grows

.c The Associated Press

By PHILIP BRASHER

WASHINGTON (AP) -- A presidential appointee in charge of cleaning up more than
$2 billion in Indian trust funds resigned abruptly Thursday and accused
Interior Secretary Bruce Babbitt of stripping him of the authority he needed.

The departure of Special Trustee Paul Homan is the latest twist in a long
legal and political battle that eventually could cost taxpayers hundreds of
millions of dollars.

Babbitt's department is being sued over its decades-long mismanagement of the
money. The secretary faces a contempt hearing next week over the government's
failure to turn over canceled checks and other records for accounts held by
the lawsuit's lead plaintiffs.

Earlier this week, Babbitt ordered a reorganization of Homan's office ``to
enable us to make progress where it is now flagging.''

Homan, a former banker appointed to his post in 1995 under a set of
congressionally ordered reforms, fired back in a resignation letter Thursday
that said Babbitt's action ``usurped the powers, duties and responsibilities''
of his office.

An Interior Department spokeswoman, Stephanie Hanna, declined comment on the
resignation but denied that Babbitt sought to undermine Homan. He ``has done a
good job of moving the ball as far as he has moved it,'' Hanna said.

The funds include 300,000 accounts held by individual Indians worth $500
million and another 2,000 tribal accounts worth $2 billion. Much of the money
consists of mineral royalties, grazing fees and farm rent. Some of the
accounts are worth only a few dollars, but the largest, a court's award to the
Sioux nation, is valued at $400 million.

The BIA has been unable to document $2 billion of transactions in the tribal
accounts over a 20-year period. It is not known how much of that actually is
missing, but it's been estimated the government could be liable for up to $575
million just on the tribal accounts.

The special trustee's office is responsible for handling the money and
improving the accounting system, but leases and other records necessary for
reconciling the accounts are scattered around the country in various Bureau of
Indian Affairs offices.

Members of Homan's advisory board accused Babbitt of making Homan a scapegoat
for the department's problems.

``It's like me telling you to drive a car but not giving you the keys of the
car, and then turning around and chastising you for not driving the car,''
said Gregg Bourland, a board member and chairman of South Dakota's Cheyenne
River Sioux.

In 1997, Homan proposed creating a quasigovernmental bank to handle the money.
Babbitt rejected the idea and promised that the department would develop a
state-of-the-art accounting system instead.

His reorganization order put a deputy to Homan in charge of developing the new
accounting system and placed the record-keeping under a new official with
extensive experience in government records management.


In his resignation letter, Homan said that he was not informed of the actions
before Babbitt took them, and he complained that the new official had no
experience with the trust fund records.

AP-NY-01-07-99 1947EST

Copyright 1998 The Associated Press.  The information  contained in the AP
news report may not be published,  broadcast, rewritten or otherwise
distributed without  prior written authority of The Associated Press. 


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