FROM THE ARCHIVE
Judge authorizes release of trust fund report
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WEDNESDAY, MARCH 26, 2003

A federal judge on Monday gave permission for the release of a report that the Bush administration says proves Indian beneficiaries aren't owed money for more than century of trust fund mismanagement.

Citing new law signed by President Bush last month, U.S. District Judge Royce Lamberth signed an order authorizing the public disclosure of the report. Copies of a summary were then provided to lawmakers concerned about the spiraling costs of trust reform and who inserted language in the fiscal year 2003 appropriations bill without tribal consultation.

But the information provided to Congress wasn't the same as what has been reported to the court, attorneys for Indian beneficiaries said yesterday. The summary failed to include a disclaimer noting that a private accounting firm didn't verify that the account balances of four of the five named plaintiffs in the trust fund lawsuit are correct.

"For $20 million, the Congress ought to be furious," said Dennis Gingold, a Washington, D.C., attorney for the plaintiffs.

The Department of Justice hatched the project in order to fight the plaintiffs. Clinton administration officials, including Bob Lamb, a bureaucrat still employed by the Department of Interior, lobbied Congress for the money to pay for the report. Most of the $20 million was used by a Bureau of Indian Affairs employee who collected more than 150,000 documents for the plaintiffs and their ancestors.

Completed more than a year ago, department officials have privately boasted that it shows little or no mismanagement of the Individual Indian Money (IIM) trust. At her contempt trial last year, Secretary Gale Norton called it a paper matching exercise that proved that the plaintiffs' account balances "reconciled."

According to the summary, an accountant from Ernst & Young, an firm currently embroiled in corporate accounting scandals, there was only a $61 difference between the government's records and the IIM accounts.

At the same time, the firm did not sign off on the report nor verify the accuracy of information provided by the Department of Justice. While stating she is just a "layperson" without knowledge of accounting standards, Norton waved off this concern.

And Lamberth has noted that the report is not an historical accounting as required by federal law. In a decision holding Norton and former Indian affairs aide Neal McCaleb in contempt of court for lying about efforts to fix the broken trust fund, he said any claim otherwise was "absurd."

"The court finds that while the work performed on these accounts may assist the agency in performing an accounting for those individuals, it was not done as part of a general effort to provide the IIM trust beneficiaries with an accounting and there is no indication that the work can be or will be used towards that end," he wrote on September 17, 2002.

"It is absurd for the Secretary to now argue that the work performed by Ernst & Young brings her into compliance with" her trust responsibilities, he concluded.

Nevertheless, members of Congress are eager to see the report because they appropriated money for it. At a House Interior Appropriations subcommittee hearing on March 12, lawmakers on both sides of the aisle prodded Deputy Secretary J. Steven Griles.

"We need to see that [report] before we pay $335 million" for a much larger IIM project, said Rep. Charles Taylor (R-N.C.), subcommittee chairman.

It was Griles who instructed government attorneys to ask permission to release the information. But without a law to back him up, he was rebuked strongly by Lamberth. Norton, when confronted on the stand about the issue, said she didn't understand why, as a trustee, it is not in the best interests of beneficiaries to release private financial data without their consent.

Former special trustee Tom Slonaker and his top aide, Tommy Thompson, opposed the release of the information. After speaking out against Norton's trust reform plans, Slonaker was forced to resign last July. Thompson was subsequently stripped of most of his powers and retired recently.

The Ernst & Young accountant looked at "virtual ledgers" for the IIM plaintiffs. They include: Elouise Cobell, a member of the Blackfeet Nation of Montana; Mildred Cleghorn, the late former chairwoman of the Fort Sill Apache Tribe of Oklahoma; Louis LaRose, a member of the Winnebago Tribe of Nebraska; and Earl Old Person, the longtime former Blackfeet tribal chairman. Old Person is no longer a named plaintiff.

The BIA, which has lost, destroyed or otherwise mishandled trust documents, claimed it could not find records between the year 1915 and 1999 for plaintiff Thomas Maulson, a member and longtime leader of the Lac du Flambeau Band of Lake Superior Ojibwe of Wisconsin.

The effort is comparable to a mid-1990s effort by Arthur Andersen, another accounting firm that went out of business after being convicted of obstruction of justice. Andersen looked at tribal trust accounts and discovered at least $2.4 billion was unaccounted. Tribes, members of Congress and the General Accounting Office (GAO) have criticized the study as inaccurate.

Yet at the House hearing this month, Griles boasted that there was an error rate of less than 1 percent in the tribal trust accounts.

Relevant Documents:
Ernst & Young Summary Submitted to Court (February 28, 2003)

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
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust

Related Stories:
NARF: What's wrong with Indians winning? (3/17)
Appropriators question historical accounting (3/13)
DOI sanctioned for 'deceit' (3/12)
IIM accounting keeps changing (3/12)
New Cobell ruling from Judge Lamberth (3/11)
Court blocks Norton's historical accounting scheme (3/4)
A trust fund scandal? Not here! (3/4)
Trust management standards key to reform plan (01/08)
Cobell trust reform plans filed (1/7)
Let court review trust fund accounts (10/11)
Judge rejects Norton's 'absurd' accounting claim (09/23)
House bill cuts trust fund accounting (06/28)
Norton says accounting complete for plaintiffs (02/14)
Judge rejects 'improper' request by Norton (02/06)
Norton criticized on private trust report (02/05)
Norton renews push on private trust data (2/1)
Norton seeking to expose trust fund data (9/28)

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