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In Court, Babbitt Vows to Overhaul Indian Trust Fund System

By Bill Miller Washington Post Staff Writer Saturday, July 10, 1999; Page
A11
http://search.washingtonpost.com/wp-srv/WPlate/1999-07/10/084l-071099-idx.html

Portraying himself as an ardent supporter of Native Americans, Interior
Secretary Bruce Babbitt told a federal judge yesterday that he is committed
to overhauling a problem-ridden trust fund system maintained on their behalf.

"I have been immersed in Indian affairs all of my life," Babbitt said in
U.S. District Court here, recalling his work 30 years ago as a legal
adviser to the Navajo nation. Trust reform, he pledged, will be well
underway by the time President Clinton leaves office in January 2001.

Babbitt's testimony came at the trial of a class action lawsuit by the
Native American Rights Fund that accuses the federal government of
mismanaging billions of dollars in Indian trust accounts. The presiding
U.S. district judge, Royce C. Lamberth, has repeatedly criticized the
government's failure to improve an antiquated record system and has openly
considered naming a special master to oversee reform.

Babbitt contended that such drastic court intervention isn't necessary,
suggesting instead that an advisory panel keep the judge informed about
progress.

It's not the first time Lamberth and Babbitt have tangled. Earlier this
year, the judge held Babbitt, Assistant Interior Secretary Kevin Gover and
Treasury Secretary Robert E. Rubin in contempt of court for failing to
ensure that records essential to the case were turned over to attorneys for
the Indians. The ruling carried no penalties but was politically embarrassing.

The trial will determine what to do with roughly 350,000 trust accounts
held by individual Indians. The trust funds were established more than 100
years ago to compensate Indians for use of their land; the government is
supposed to manage the accounts and pass along royalties from the sale of
petroleum, timber and other natural resources taken from the land. In all,
the government deposits approximately $350 million per year into the
accounts. Both sides agree that record-keeping historically has been a mess
and that there has never been an adequate accounting. The Indians contend
they should be eligible to collect billions of dollars in damages.

Attorneys for the Native Americans maintain that the trusts have been
mishandled and neglected by the Bureau of Indian Affairs (BIA) -- an arm of
the Interior Department -- and the Treasury Department, which invests the
money.

Much of Babbitt's testimony dealt with his response to legislation passed
by Congress in 1994 requiring massive trust reforms. The legislation called
upon Clinton to name a special trustee for Indians, and he chose Paul M.
Homan, a trust specialist and former president of Riggs National Bank.
Although Babbitt initially recommended Homan for the job, the two had a
public falling-out that led to Homan's resignation earlier this year.

Homan has testified that Babbitt never gave him enough money or staff to
make significant progress. Among other things, he complained that Babbitt
opposed his plans to create an outside agency to handle the trust system.

Babbitt insisted in court yesterday that Homan did not appreciate the
importance that Indians place upon their dealings with the BIA. While
conceding that tribes have a "love-hate relationship" with the BIA, Babbitt
said they were nonetheless opposed to any actions that would dilute the
bureau's role.

Babbitt said a new computer system and other improvements will get the
trust system back on track within the next few years, and he noted that a
constellation of forces is highlighting the issue -- the administration,
Congress, the media, the judge and especially Indians.

Despite Babbitt's promises, attorneys for the Indians questioned the
resolve of the former Arizona governor, characterizing some of his
statements as "gobbledygook." During cross-examination, Babbitt repeatedly
clashed with lawyer Elliott H. Levitas, at one point saying he felt he was
being "pistol-whipped."

Babbitt, the final government witness, is due to return to court today for
a rare Saturday session to complete his testimony. Lamberth made the
special arrangements to accommodate Babbitt's travel schedule.

� Copyright 1999 The Washington Post Company


Reprinted under the Fair Use http://www4.law.cornell.edu/uscode/17/107.html
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