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Cobell prepares for court battle on accounting
Wednesday, May 30, 2007
Filed Under: Cobell

The plaintiffs in the billion-dollar Cobell trust fund lawsuit filed their first brief on Tuesday in preparation for a landmark historical accounting trial.

The brief seeks to address some of the issues surrounding the Bush administration's accounting of the Individual Indian Money (IIM) trust. According to the plaintiffs, the Interior Department's project will leave out hundreds of thousands of Indian beneficiaries.

"To be adequate, 'Interior must perform an accounting of all funds deposited or invested in the IIM trust fund since the passage of the General Allotment Act in 1887,'" the brief states, citing the December 1999 ruling that ordered the accounting.

Among those who won't receive an accounting: "direct pay" beneficiaries whose lease payments are deposited into their bank accounts; deceased beneficiaries and their hers; beneficiaries whose IIM accounts were closed before October 25, 1994, the date of the passage of the American Indian Trust Fund Management Reform Act.

Additionally, the project will only go as far back as June 24, 1938, the date of another Indian trust law. Some accounts, according to Interior officials, go back to the late 1800s.

Despite the exclusions, Interior has defended its right to define the scope and nature of the accounting. According to a recent brief, the court's role in overseeing the plan is limited to determining whether it is arbitrary or capricious under the Administrative Procedures Act (APA), or whether it will "delay rather than accelerate" the final accounting.

"Although this case has had many detours between 2001 and the present time, Interior has been and is continuing to perform the accounting referenced by the D.C. Circuit," the May 11 brief stated. In February 2001, the D.C. Circuit Court of Appeals affirmed the duty to accounting for the IIM trust.

Judge James Robertson in Washington, D.C., will have to sort out these conflicting views as he prepares for the October 10 trial. He held the first status hearing May 14 and said both sides will have to make concessions.

"The plaintiffs are going to have to get used to much more modest goals for this October trial, and the defense is going to have to get used to much more ambitious goals for this October trial than either side has thought about," Robertson told the parties.

Robertson acknowledged the accounting won't be anywhere near complete by the time of the trial. "It's a subset because you're not finished, and you won't be finished by October," he said.

But he appeared to reject the idea that the trial won't go into the nuts and bolts of the accounting plan, as the administration suggested in its brief. "Much too much water has flowed under the dam or over the bridge ... to make this a straight up, old-fashioned APA document review of a record," he said.

"It can't be done that way," he added. "There's going to have to be testimony, probably by experts."

The plaintiffs view the trial as a way to prove, once and for all, that the Interior Department and the Treasury Department won't be able to complete an accounting. They hope it will lead Robertson to restate the account balances of the IIM trust.

But Interior officials say the plaintiffs can't prove widespread mismanagement of the trust. According to their efforts, the error rate in the accounts amounts to a restatement in the low millions.

"Interior's accounting experts have uncovered no evidence or history of fraud or systemic error in the handling of historic individual Indian accounts," a report delivered to Congress this month stated. "The few errors that have been found are generally small in monetary value, and fall on both sides of the ledger."

At the same time, the Bush administration has proposed to spend up to $7 billion to resolve the Cobell case and more than 200 tribal trust lawsuits, and to pay for trust reform. Half of the settlement would be used to end the Cobell historical accounting and to eliminate future damages lawsuits based on mismanagement of the IIM trust.

With Congressional support for the proposal extremely weak, the plaintiffs and the government will spend the summer battling over the trial. Robertson's next status hearing is set for June 18.

Recent Briefs:
Cobell Plaintiffs (May 29, 2006) | Bush Administration (May 11, 2006)

Historical Accounting Report:
Office of the Special Trustee for American Indians Report to Congress (May 2006)

Court Order:
Cobell v. Kempthorne (April 20,2007)

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

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

Relevant Links:
Indian Trust: Cobell v. Kempthorne - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm

Related Stories:
Cobell prepares for historical accounting trial (5/18)
Judge prods DOI on Indian trust fund accounting (5/15)
First status conference for Cobell accounting trial (5/14)
Cobell status conference pushed back to May 14 (05/02)
Attorney calls $7B Cobell offer pennies on dollar (4/24)
Cobell heads to landmark accounting trial (4/23)
Judge orders Cobell accounting trial for October 10 (4/20)
Jodi Rave: Cobell calls for accountability (4/12)
Editorial: No justice in $7B offer to settle Cobell (4/6)
Lawmaker questions $7B plan to settle trust cases (4/4)
Gonzales' trust testimony downplayed (3/30)
Listening Lounge: House hearing on BIA-OST (3/30)
Mediator suggests $7-9B settlement for Cobell (3/30)
Jodi Rave: Cobell calls trust offer 'insulting' (3/30)
Senate hearing on Indian trust fund litigation (3/29)
Gonzales won't testify on trust fund (3/28)
Supreme Court refuses Cobell appeals (3/27)
Editorial: The billion-dollar question (3/26)
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The downfall of J. Steven Griles (3/26)
Blast from the Past: NBC segment on Cobell (3/21)
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Bush aide linked to Special Trustee firing resigns (3/14)
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Dorgan and Thomas disagree on Cobell settlement (1/22)
Jodi Rave: Cobell sees hope for case in new year (1/20)
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Jodi Rave: Interior mum on class action tribal suit (01/05)
Tribes file class action trust accounting lawsuit (01/04)
Cobell honored by AARP Magazine for trust work (12/19)
New Cobell judge knows Interior Department (12/13)
Rahall outlines Indian agenda for 110th Congress (12/11)
New judge assigned to Cobell trust fund case (12/08)
Cobell wins Impact Award from AARP Magazine (12/7)
Editorial: No hope for a Cobell-only settlement (12/1)
McCain staffer: No 'hijinx' during lame-duck (11/24)
Editorial: Another good shot emerges for Cobell (11/10)
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Editorial: End federal management of trust (11/1)
Tribes face trust challenges from Bush administration (10/31)
Cobell attorney criticizes Bush changes to bill (10/27)
Staff confirms Bush behind Cobell proposals (10/26)
Bush seeks major changes to Cobell bill (10/24)
Senate committee holds more Cobell meetings (10/23)
Time running out on Cobell settlement bill (10/23)
Cobell sees parallels in Aboriginal wage theft (10/16)
NCAI to consider resolution in support of Cobell bill (10/6)
Bush assailed for 'ambush' on Indian health care (10/5)
Latest delay in Cobell settlement tied to White House (10/3)
Cobell: Interior mishandles Indian money too (10/2)
Navajo woman fights for trust fund accountability (9/25)
Senate committee sends Cobell letter to Kempthorne (9/18)
Interior delays Cobell settlement legislation (9/15)
McCain firm on $8B settlement for Cobell (9/5)
Senate staff to discuss Cobell settlement in Tulsa (8/30)
Cobell shifts appeal strategy to keep judge on case (8/29)
Cobell fights for judge in trust fund case (8/25)
Senate committee to discuss Cobell settlement (8/24)
Human Rights Magazine: Cobell, Native issues (8/22)
Editorial: Justice for Indian account holders (8/18)
Professor: Removal of Judge Lamberth a tragedy (8/7)
Cobell eager to settle Indian trust fund lawsuit (8/7)
Letter: Nearly $1B wasted on Swimmer's trust reform (8/7)
Editorial: Stop delaying settlement to Cobell (8/4)
McCain puts twist in Cobell settlement bill (8/3)
Bush officials asked McCain to delay Cobell settlement (8/3)
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Editorial: It's time for settlement on Cobell (7/28)
Ross Swimmer: Interior still 'working' on trust (7/28)
Cobell issues statement on settlement talks (7/25)
Cobell settlement awaited in Indian Country (7/25)
Jodi Rave: Cobell worried about settlement legislation (7/24)
Mark Trahant: It's time for the U.S. to keep its word (7/17)
Editorial: Lamberth too honest in trust fund case (7/17)
Cooler heads sought in Indian trust fund fight (7/14)
Lamberth removed from Cobell trust fund case (7/12)
Lamberth is third judge removed by D.C. Circuit (7/12)
Cobell settlement rumored to be in the billions (7/5)
Cobell rallies for support on trust fund lawsuit (06/19)
Editorial: Give Kempthorne a chance on Cobell (6/15)
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Editorial: Dirk Kempthorne arrives in Washington (6/13)
Swimmer calls Cobell settlement 'reparations' (5/8)
Cobell: Settle Indian trust fund case for billions (4/20)
Cobell to appear on C-SPAN Washington Journal (4/12)
Cobell renews call for receiver as court hears case (4/12)
Cobell vows fight to resolve trust fund lawsuit (4/10)
Cobell plans big showing on day of court hearing (4/4)
Jodi Rave: Tribes alarmed at trust reform initiative (4/3)
Cobell addresses trust fund mismanagement (3/30)
Ross Swimmer: Indian trust not about mismanagement (3/29)
Norton denies fraud or major problem with trust (3/29)
GAO report warns of billions in lost oil, gas royalties (3/29)
Witness list for hearing on Indian Trust Reform Act (3/28)
DOI trust reform meeting set for Portland, Oregon (3/24)
Kempthorne faces hot issues at Interior Department (3/21)
DOI pressed for more clarity on trust initiative (3/3)
Congress urged to settle Cobell lawsuit for billions (03/02)
Listening Lounge: Joint hearing on Cobell v. Norton (03/01)
Interior hits the road with new trust reform initiative (02/08)
Jodi Rave: Garcia calls for settlement of Cobell (2/3)
Cason slashes BIA budget and blames it on Cobell (2/3)
Tribes discuss trust reform bill, Cobell settlement (1/31)
Commentary: Swimmer still not telling the truth on trust (1/26)
Opinion: Indians want $12B of 'YOUR' money (01/10)

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