indianz.com your internet resource indianz.com on facebook indianz.com on twitter indianz.com on Google+
ph: 202 630 8439
Fredericks Peebles & Morgan LLP
Advertise on Indianz.Com
Home > News > Headlines
Print   Subscribe
Cobell historical accounting trial underway
Thursday, October 11, 2007
Filed Under: Cobell

A federal judge in Washington, D.C., opened a highly anticipated trial into the Indian trust fund on Wednesday.

Saying it was "a long time in the making," Judge James Robertson, a Clinton appointee, quickly jumped into the open-ended proceeding. He wants to know how much money, if any, Indian landowners are owed for over 100 years of government management of their trust funds.

"We are here for day one of who knows how many days of the trial of Cobell v. Kempthorne," Robertson said, referring to lead plaintiff Elouise Cobell, a member of the Blackfeet Nation of Montana, and Interior Secretary Dirk Kempthorne, one of the named defendants.

Opening statements from the Department of Justice and the Cobell plaintiffs indicate the trial will be a long one. Both sides disagree on just about every aspect of the historical accounting at issue in the eleven-year-old case.

The one area where both sides had expressed some agreement quickly crumbled as soon as Robert Kirschman, a DOJ attorney, spoke. He said the estimate that $13 billion has passed through the Individual Indian Money (IIM) trust since 1909 was too "high" because it included tribal funds and other funds not owned by Indian landowners.

Kirschman said a more accurate throughput was $11.7 billion. But he left the door open for further downward revisions due to ongoing historical accounting work.

On the other hand, Dennis Gingold, one of the attorneys for the plaintiffs, said the $13 billion was actually too low. He cited a previously undisclosed government e-mail from 2001 which suggested the figure was off by at least $15 billion because certain trust funds were never included.

The historical accounting of billions of dollars of trust funds owned by Indian landowners is supposed to resolve this issue. Since 2001, the Bush administration has offered at least three plans to do the work.

The one being considered at the trial was issued in May 2007 and contains a number of limits that Robertson wants to explore. Kirschman, however, urged the judge to take a hands-off approach, saying the government will prove that the accounting is adequate, given funding and time restraints.

"We will request that the matter be remanded to the Department of the Interior, to carry out its historical accounting plan without further interruption," Kirschman told the court.

Gingold asked the judge for the exact opposite. He said the court is one of the few places where Indian landowners feel they can obtain justice.

"What we're looking at is an abuse that has gone on for 120 years and we're hoping this is the beginning of the end of that abuse," Gingold said.

With opening statements completed, the government's first witness took the stand. It was Jim Cason, who is the associate deputy secretary of the Department of the Interior and is the official with the most power over the Indian trust.

After a relatively short direct examination by DOJ attorney John Stemplewicz, Cason defended the 2007 plan amid pointed questions from Bill Dorris, another attorney for the plaintiffs. The major points of contention were the limits placed on the accounting and whether they were justified.

Cason acknowledged that the 2007 plan reduced the amount of work contemplated by plans the department issued in 2003 and 2002. He said Congress was unwilling to fund a billion-dollar historical accounting and that the public was unwilling to wait a long time for the result.

But he was forced to admit that Interior excluded a significant number of Indian landowners from the 2007 accounting plan solely for legal reasons. As one example, beneficiaries who were not on the IIM system when the American Indian Trust Reform Act was passed in 1994 won't receive an accounting.

"It's not based on cost, is it?" Dorris asked of this exclusion. "No," Cason replied.

Cason also admitted that the 2007 accounting plan is not based on a reconciliation of each beneficiaries' IIM account, as prior plans had envisioned. Instead, it focuses on a method that samples transactions across all trust accounts in the system.

Even with this change, Cason acknowledged that the number of transactions being examined under the 2007 plan dropped dramatically from the 2003 plan. Yet he said it would still take four more years to complete the accounting even though the 2003 plan promised it would have been finished by the end of this year.

Cason further said the department has yet to decide how it will account for the paper records of the trust. So far, the work has focused on electronic records from 1985 to the present.

"Do you know how many [paper records] are going to be examined?" Dorris asked. "I don't," Cason said. "Does anybody? Dorris continued. "I don't know that," Cason responded.

Another contentious issue revolved around on a little discussed project known as the Litigation Support Accounting, or LSA. It was developed by the Bush administration after a rider was placed in the 2004 Interior appropriations bill that called for a legislative settlement of the case.

In Congressional testimony and in public statements, Cason has frequently spoke of the results of the LSA. He reiterated some of them yesterday, saying the project showed a "sufficiently low" error rate in the electronic records of the IIM trust.

Based on the results of the LSA, Cason has said that Indian landowners are owed very little for government management of their trust funds. "What we found out of that is that, again, we found a handful of errors," he testified yesterday. "They tended to be on both sides of the ledger, they tended to net out to a relatively small error rate."

But several documents the government placed in the administrative record for the trial appeared to cast doubt on the reliability of those statements. At times, Cason was unable to recall critical details about the project and who made decisions about it.

He also appeared to be unfamiliar with some unusual government documents that suggested the primary basis for the LSA was to limit the government's trust liability and -- in the words of the plaintiffs -- to "drive down" potential settlement figures.

Earlier this year, Secretary Kempthorne, in fact, proposed a $3.5 billion settlement to the case, far lower than the $8 billion that key members of Congress were proposing in late 2006.

One particularly striking government document that was placed in the record spoke of a strategy in which the Bush administration would be able to declare public relations "successes" as it carried out the historical accounting. "I think the Department of the Interior gets no credit for effort," Cason said.

"So part of our strategy was to try to segment the work" and declare success, Cason said of efforts to reconcile per capita and judgment fund accounts, which are not as complex as land-based accounts whose funds come from oil, gas, grazing and other activities.

The majority of the accounts in the IIM system are land-based and accounting for them costs more money and takes more time than the other types of accounts.

Another LSA issue went to the heart of the low error rate that Cason has frequently cited. A document in the record spoke of an "adaptive" strategy in which missing or unavailable paper records aren't considered hindrances to the historical accounting.

"[W]e did not consider that automatically to be an error," Cason said of missing records.

The first day of the trial ended with Cason still under cross-examination. His testimony is set to resume today. Kathy Ramirez, an employee with the Office of the Special Trustee for American Indians will be the government's second witness.

Trial Transcripts:
Day 1, AM Session

2004 Interior Appropriations:
H.R.2691 | H.Rept. 108-330

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 historical accounting trial starts in DC (10/10)
CFO Magazine: The Indian trust fund accounting (10/5)
Cobell historical accounting trial starts October 10 (10/1)
BIA agency lacks accounting for millions in trust (09/25)
Audit finds Indian trust management problems (9/24)
Cobell: Upcoming trial tackles important issues (09/19)
Interior attorney to testify at upcoming Cobell trial (9/18)
DOI won't release trust data in Cobell case (9/11)
Interior attorney accused of disclosing trust data (08/29)
Judge opens electronic data to Cobell plaintiffs (07/10)
Another Cobell historical accounting hearing (7/9)
Judge expresses views on Indian trust fund accounting (06/19)
Hearing on Cobell historical accounting trial (6/18)
Cobell prepares for court battle on accounting (5/30)
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)
BIA office in Palm Springs criticized by landowners (4/11)
BIA office in Palm Springs under investigation (4/10)
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)
Senate hearing on trust fund litigation on Thursday (3/26)
The downfall of J. Steven Griles (3/26)
Blast from the Past: NBC segment on Cobell (3/21)
Opinion: US owes Indians billions for theft (3/14)
Bush aide linked to Special Trustee firing resigns (3/14)
BIA names new director for Navajo regional office (3/14)
Mother Jones: Pennies on the dollar for Cobell (3/12)
Bush proposes $7B trust fund settlement (3/8)
Dorgan and Thomas disagree on Cobell settlement (1/22)
Jodi Rave: Cobell sees hope for case in new year (1/20)
NewStandard: Tribes turn to court over trust funds (01/08)
Jodi Rave: Interior mum on class action tribal suit (01/05)
Tribes file class action trust accounting lawsuit (01/04)

Copyright © Indianz.Com
More headlines...
Stay Connected:

Local Links:
Federal Register | Indian Gaming | Jobs & Notices | In The Hoop | Message Board
Latest News:
Tim Giago: Deaths of Native men in Rapid City remain unsolved (10/20)
Charles 'Chuck' Trimble: Let Crazy Horse's spirit rest in peace (10/20)
Native Sun News: Billy Mills wows youth at Black Hills Powwow (10/20)
Ousted Project Runway contestant reaffirms Puyallup heritage (10/20)
Jay Daniels: Let BIA make changes to rights-of-way regulation (10/20)
Native Sun News: Oglala Sioux Tribe buckles to pressure on park (10/17)
Mark Trahant: Native vote could tip races in Idaho and Colorado (10/17)
Crystal Willcuts: Remembering the beauty that was my mother (10/17)
Blackfeet actress Misty Upham found dead after going missing (10/17)
Citizen Potawatomi Nation sues city over detachment petition (10/17)
Opinion: Politicians relying on Native voters in a close election (10/17)
Poarch Creeks donate another $500K to Democratic candidate (10/17)
Montana to transfer bison from Yellowstone to Fort Peck Tribes (10/17)
Opinion: Listen to Native Americans who oppose racist mascots (10/17)
Charges possible in dispute at Chukchansi Tribe's closed casino (10/17)
Oglala Sioux Tribe might open third casino under new compact (10/17)
Women dominate workforce at Northern Arapaho Tribe's casino (10/17)
Ho-Chunk Nation to shut down poker room after losing lawsuit (10/17)
Blog: What to know about Prop 48 and off-reservation gaming (10/17)
Native Sun News: Native vote plays key role in Senate matchup (10/16)
Dean Chavers: Calling out Ward Churchill and other wannabes (10/16)
Glenn Morris: A sorry spectacle at UN indigenous peoples meet (10/16)
Crosscut to present special award to late activist Billy Frank Jr. (10/16)
Editorial: Our schools can learn from success at tribal colleges (10/16)
Column: Language police want FCC to bar R-word on airwaves (10/16)
Navajo lawyer named chair of Washington gaming commission (10/16)
Judge won't allow factions of Chukchansi Tribe to reopen casino (10/16)
Alabama governor shifts stance on compact for Poarch Creeks (10/16)
Muscogee Nation wins key permit for $375M casino expansion (10/16)
City in California considers proposals for off-reservation casino (10/16)
Connecticut tribes see another decline in slot machine revenue (10/16)
Opinion: North Fork Rancheria's gaming deal deserves yes vote (10/16)
Native Sun News: Governor's race in South Dakota is heating up (10/15)
Puyallup News: Project Runway contestant isn't enrolled in tribe (10/15)
Mark Trahant: Native vote could offer some answers in Kansas (10/15)
Mary Pember: Mental health system fails young Indian woman (10/15)
Ruth Hopkins: Healing the relationship with indigenous people (10/15)
Aura Bogado: BIA tries to reform troubled recognition system (10/15)
Peter d'Errico: Navajo Nation tackles the Doctrine of Discovery (10/15)
Salt River judge releases gang member tied to officer's murder (10/15)
more headlines...

Home | Arts & Entertainment | Business | Canada | Cobell Lawsuit | Education | Environment | Federal Recognition | Federal Register | Forum | Health | Humor | Indian Gaming | Indian Trust | Jack Abramoff Scandal | Jobs & Notices | Law | National | News | Opinion | Politics | Sports | Technology | World

Indianz.Com Terms of Service | Indianz.Com Privacy Policy
About Indianz.Com | Advertise on Indianz.Com

Indianz.Com is a product of Noble Savage Media, LLC and Ho-Chunk, Inc.