Lawmaker cites 'no basis' for Cobell and tribal lawsuits

Cobell | Trust

Wednesday, April 4, 2007

A key Congressional appropriator is questioning why the Bush administration wants to spend up to $7 billion to end the Indian trust fund debacle, saying the Cobell and tribal lawsuits lack "real substance."

As chairman of the House subcommittee that handles the Interior Department's budget, Rep. Norm Dicks (D-Washington) holds a powerful position. He has used his role to block the administration's cuts to a wide range of Indian programs, from tribal colleges to construction of new schools to Johnson O'Malley education grants.

"On the whole, the president's budget request for the Bureau of Indian Affairs is the same as we have seen in the past," Dicks said at a hearing last Thursday. "Relatively flat, or reduced, funding has left many programs at the bureau struggling."

Dicks, a sixteen-term member of Congress, said Indian programs will continue to suffer under the threat of the Cobell trust fund lawsuit and more than 100 tribal lawsuits. But he questioned why the administration has proposed to settle the litigation after administration officials told him Indian and tribal beneficiaries aren't owed much money for mismanagement of their funds and assets.

"Why are we considering paying the tribes $7 billion if that's the case?" asked Dicks, after Jim Cason, the associate deputy secretary at Interior, said few errors have been found in the Indian trust accounts.

Cason and other officials have said a settlement to the Cobell lawsuit, which covers an account of funds held in trust individual Indians, would fall in the low millions. He said the administration is offering more in order to settle a potential lawsuit over mismanagement of land owned by individual Indians, and to resolve all of the pending tribal claims.

Dicks, however, said historical accounting projects have shown the allegations to be baseless. Over the last five years, Interior has spent $175 million to look at accounts for individual Indians and tribes.

"We've spent hundreds of millions of dollars to find out there's no basis for this," Dicks said.

After Cason said "there may be" some basis for the lawsuits, Dicks objected even more. "How many more millions do we have to spend to find that out?" Dicks responded.

Cason said the accounting hasn't gone back to 1887, the inception of the Individual Indian Money (IIM) trust, and hasn't delved too deeply into paper records because Interior has mainly focused on electronic records. He also noted the accounting has employed statistical sampling rather than a transaction-by-transaction analysis.

Despite the qualifications, Dicks didn't think the picture would change with further examination of the accounts. "That's a pretty good indication that we're never going to find anything of real substance here," he added.

The comments came a day after Elouise Cobell, the lead plaintiff in the lawsuit, and others said the case was worth far more than what Dicks and Interior are willing to accept. At a Senate hearing on Wednesday, an independent mediator suggested a settlement in the range of $7 billion to $9 billion.

The tribal lawsuits, on the other hand, are potentially worth more. Tribes own a larger portion of the Indian estate -- 45 million acres compared to 11 million acres for individual Indians -- and have staked larger claims of asset mismanagement.

In the 1990s, Interior attempted to reconcile the tribal trust but came up with major holes. The Arthur Anderson accounting firm, which has since gone out of business, said it could not find documentation for at least $2.4 billion in transactions, and said the IIM accounts were in far worse shape.

Even the Government Accountability Office has said a full historical accounting of the trust accounts is "impossible."

Despite the shortcomings, the Bush administration continues to argue that individual Indians and tribes are owed little. At the Senate hearing, a top Department of Justice official refused to concede any liability for the lawsuits even though U.S. Attorney General Alberto Gonzales once told Congress the tribal cases were worth more than $200 billion.

"Without being able to get into the details of a pending litigation, we still foresee the high likelihood that if litigation proceeds, some tribes would ultimately receive no recovery, while many others would receive far less than the amount they seek," said Bill Mercer, the acting associate attorney general.

Cason reiterated the same point at the House hearing and said the accounting efforts are a "strong indicator" that the Cobell and tribal suits are largely without merit. But he refused to answer Dicks directly when asked why the administration wants to settle the cases for up to $7 billion.

"If there was something real here, you would have found it," Dicks said.

Although the settlement is not before Dicks' subcommittee, the lawmaker has the power to limit any proposal to address the Cobell and tribal cases. In years past, he supported a controversial appropriations rider to block an historical accounting of the IIM trust.

When that provision was eliminated amid a huge uproar in Indian Country, Dicks and the subcommittee came back the following year with another rider that imposed a "time out" on the accounting. And in an equally controversial move, Dicks supported a rider to pay the attorney fees of Interior officials like former deputy secretary J. Steven Griles, who has since pleaded guilty to lying to Congress.

Settlement Letter:
Kempthorne-Gonzales to SCIA (March 1, 2007)

Relevant Documents:
Alberto Gonzales Testimony (March 1, 2005) | SCIA Views and Estimates (March 1, 2007)