Sparring Over Lost Money

by Daniel Kraker & r & In the nine-year legal battle over missing Indian Trust royalties, U.S. District Court Judge Royce Lamberth has repeatedly decided in favor of the American Indian plaintiffs. In July, Lamberth issued his most scathing opinion to date: He ordered the U.S Department of the Interior to notify American Indian account holders that the federal government's information on trust accounts may not be reliable.


"This case serves as an appalling reminder," he wrote, "of the evils that result when large numbers of the politically powerless are placed at the mercy of institutions engendered and controlled by a politically powerful few."


While the Bush administration has tried unsuccessfully to remove the fiery judge from the case, Sen. John McCain, R-Ariz., who chairs the Senate Indian Affairs Committee, has taken a different tack. Last spring, he asked the plaintiffs to suggest reforms to fix the problem, which stems from shoddy accounting on hundreds of thousands of parcels of reservation land that the federal government has leased to energy companies, ranchers and timber companies.


Led by Elouise Cobell, a Blackfoot banker from Montana, the plaintiffs came up with 50 key points they would like to see in legislation to settle the case. For example, they asked that Congress appropriate new funds for a settlement, not simply shift money from other Indian programs; that beneficiaries not have to pay taxes on their settlements; and that a new deputy secretary office be established to oversee the agencies managing the trust.


The plaintiffs also proposed a settlement of $27.5 billion, an amount far less than the more than $100 billion their accountants argue they are rightfully owed.


McCain, however, calls that number "just way out of sight," and says Congress would never appropriate the money. Instead, he has introduced a bill he calls "a starting point." To the plaintiffs' chagrin, it doesn't offer an exact dollar amount. Instead, it provides a negotiated lump-sum settlement and establishes a settlement fund. The U.S. Treasury Department would administer the settlements and pay claimants.


Plaintiffs have reacted angrily: Cobell was quoted in South Dakota's Rapid City Journal, comparing the bill to the infamous Baker Massacre, considered one of the worst-ever slaughters of American Indians by United States troops.


McCain defended his bill at an Indian Affairs Committee hearing on the legislation, saying it "reflects extensive listening to the parties in the litigation." In response to Cobell's comment, for which she later apologized, he said, "It cannot credibly be compared to a massacre even in a figure of speech." McCain has told the plaintiffs to seize the chance to sit down and negotiate with lawmakers. "Leave the rhetoric to others," he told Cobell. "You won't have this opportunity again anytime soon."


The class-action lawsuit has been mired in controversy since it was filed in 1996 on behalf of more than 300,000 Indian landowners. Government employees have inexplicably shredded trust fund documents, Lamberth has held two Interior secretaries in contempt of court, and computer systems safeguarding the trust information have been repeatedly hacked. The federal government has already spent $100 million trying to mend the trust accounts. But government accountants still can't answer a basic question: How much has the U.S. government earned from leasing Indian land?


Meanwhile, Indian landowners continue to wonder where their royalty money has gone. Navajo grandmother Mary Johnson, 80, owns land near Montezuma Creek, Utah, where four oil wells have been pumping for nearly half a century. They've polluted the creeks running through her land, fouled the air and sickened her livestock. All that, for monthly royalty checks from the U.S. Bureau of Indian Affairs that have averaged around $40. Speaking to Judge Lamberth through an interpreter in Washington this summer, she asked simply, "How can there be no money?"





Daniel Kraker directs the Indian Country News Bureau in Flagstaff, Ariz., a project of KNAU, Arizona Public Radio, and KUYI, Hopi Radio. This article first appeared in High Country News.