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Appeals court leaves trust accounting to Interior
Wednesday, November 16, 2005

A federal appeals court blocked a broad historical accounting of the Indian trust on Tuesday, citing the failure of Congress to spell out the federal government's fiduciary obligations.

In a unanimous decision, the D.C. Circuit Court of Appeals threw out the accounting that had ordered by U.S. District Judge Royce Lamberth. A three-judge panel said the effort would have cost too much money and taken too much time given the current state of appropriations in which Indian programs aren't fully funded.

"If the appropriations pattern should continue and the government's current $12-$13 billion estimate proves correct, an accounting of the sort ordered by the district court would not be finished for about two hundred years, generations beyond the lifetimes of all now living beneficiaries," Judge Stephen F. Williams wrote in the 16-page opinion.

The court noted that both the plaintiffs in the Cobell v. Norton lawsuit and attorneys for Interior Secretary Gale Norton agreed the broad accounting would be impossible -- albeit for different reasons. The plaintiffs believe the lack of accurate records means the accounting won't ever be complete while the government cites limited resources and has adopted a restrictive view of its trust responsibilities.

But since Congress failed to speak to the issue, the court said the Interior Department can proceed with its $335 million accounting project.

"Thus neither congressional language nor common law trust principles (once translated to this context) establish a definitive balance between exactitude and cost," Williams wrote. "This being so, the district court owed substantial deference to Interior’s plan."

The Bush administration claimed the ruling as a victory for its trust reform efforts. "It is gratifying that our detailed and comprehensive plan to conduct a statutorily-mandated historical accounting has been underscored by today’s decision," Secretary Norton said in a statement.

The plaintiffs, in their own statement, said they would seek to reinstate a contempt citation against Norton. Dennis Gingold, the lead attorney, said yesterday's decision "recognizes that the accounting injunction was entered as a direct result of the civil contempt proceeding" that Lamberth held after Interior failed to start the accounting nearly two years after being ordered to do so.

The decision came as key members of Congress introduced legislation aimed at settling the nine-year-old case. Rep. Richard Pombo (R-California) and Rep. Nick Rahall (D-West Virginia) of the House Resources Committee said the Cobell lawsuit has proven that trust records haven't been handled properly and that a full accounting hasn't been provided.

"My intent in this process is to craft a bipartisan settlement that is full, fair and final," said Pombo, the chairman of the committee. "I will continue to work with Chairman Pombo and Indian account holders to bring fair compensation to those individuals wronged in the past and to ensure the integrity of the system for the future," said Rahall, the top Democrat.

Sen. John McCain (R-Arizona) and Sen. Byron Dorgan (D-North Dakota) of the Senate Indian Affairs Committee previously introduced similar legislation to resolve the dispute. They held a hearing in July but ran into opposition to certain provisions by the plaintiffs, tribal leaders and the Bush administration.

McCain, the committee's chairman, has subsequently said the administration has failed to detail its concerns with the bill, suggesting that official were waiting on favorable rulings from the appeals court. He also said the plaintiffs were objecting to the settlement provisions.

The House and Senate versions leave out the settlement amount. The plaintiffs have called for a $27.5 billion settlement but Interior claims the amount owed is far, far less, possibly in the low millions.

When the accounting project is completed, it would presumably show any mistakes in Indian trust fund. The D.C. Circuit yesterday said the plaintiffs could "challenges to the correctness of specific account balances" sometime in the future.

Get the Decision:
Cobell v. Norton (November 15, 2005)

Senate Documents:
John McCain Statement | Byron Dorgan Statement | Full Text of Bill as Introduced | S.1439

Relevant Documents:
Trust Reform and Cobell Settlement Workgroup Principles for Legislation (June 2005)

Relevant Links:
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm
National Congress of American Indians - http://www.ncai.org
Intertribal Trust Fund Monitoring Association - http://www.itmatrustfunds.org

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