FROM THE ARCHIVE
Court investigator faults Federal Reserve
Facebook Twitter Email
APRIL 19, 2001

The court-appointed investigator in the billion dollar trust fund lawsuit on Tuesday faulted a number of Federal Reserve banks for destroying records related to the trust assets of an estimated 300,000 American Indians throughout the country.

In a report filed with Judge Royce Lamberth, Special Master Alan Balaran said that 29 out of 37 branch offices in the Federal Reserve system have reported destruction of records related to the five-year old Cobell v. Norton lawsuit. Despite a 1999 court order requiring the Department of Treasury to preserve trust documents, banks have destroyed records as recently as March.

But the Treasury Department has been trying to avoid being blamed for the oversight. In a motion filed with the court, the Treasury said it had no control over the actions of the Federal Reserve and therefore shouldn't be faulted for the destruction.

Balaran agreed. He isn't letting the government off the hook, however, and is faulting the Federal Reserve instead.

"Given the center stage that issues concerning document retention and preservation have occupied in this litigation, this lack of oversight is profoundly troubling," said Balaran of the Fed.

Balaran called the Reserve's overall record of protecting the documents of American Indians "abysmal."

While the Federal Reserve provides services to the Treasury, it is not a party to the Cobell lawsuit. The Federal Reserve is the central banking system of the US government but is not an agency of the Treasury, who has a trust responsibility to account holders.

Still, the Treasury isn't challenging that it has failed to inform properly agents of the Federal Reserve who provide services to the department. As a result, Federal Reserve officials authorized document destruction on the "erroneous" belief they weren't required to preserve them.

For two years now, document preservation has been one of the key sticking points in the five-year-old lawsuit. Secretary of Interior's trust fund records office is currently being investigated for its policies on preserving records.

Some of the documents date back to the late 1800s, when the government created the trust accounting system. It has failed to properly manage them since then, said Lamberth in a landmark December 1999 ruling.

Elouise Cobell, the Blackfeet Nation of Montana banker who is the lead plaintiff in the case said the Special Master's findings validate yet another in a long line of complaints they have lodged against the government.

"Saying the government's actions are 'profoundly troubling' is putting it politely," said Cobell. "Indians -- we're the bottom of the barrel."

Relevant Links:
Federal Reserve - http://www.federalreserve.gov
Trust Management Improvement Project - http://www.doi.gov/bia/trust/tmip.htm
Indian Trust: Cobell v. Norton - http://www.indiantrust.com

Only on Indianz.Com:
The Trust Fund Fiasco (Smoke Signals 1999)

Related Stories:
Court monitor to oversee trust reform (4/17)
Memo: Trust reform project needs extra attention (4/11)
Trust funds still causing trouble (4/11)
Interior: Indian Overview (4/10)
BIA official: Organization was in 'disarray' (4/5)
Trust fund to get new lawyer (4/4)
Industry insider named to Interior (3/30)
Interior: Trust reform is working (3/22)
'Emergency' trust fund meeting requested (3/21)
BIA Memo: Trust reform out of control (3/16)
More trust documents reported destroyed (3/16)
Norton targeted for contempt (3/15)
Trust fund investigation continues (3/9)
Report: Litigation threatening reform project (3/8)
Message to Norton: Don't Threaten Us (3/7)
Interior to provide anti-retaliation evidence (3/6)
Mona Infield: Indian Country's Linda Tripp? (3/5)
EDITORIAL: Pay Indian account holders ( 3/1)
Norton hit on trust fund mess (3/1)
Landmark trust fund decision upheld (2/26)
Interior contempt trial recommended (2/22)
Ex-employee says harassment started at top (2/15)
Intimidation alleged at Interior (2/14)
Norton's trust fund office to be investigated (2/13)
Trust fund decision blasted (1/25)
Records a continued source of problems in lawsuit (01/18)
Trust documents reported destroyed (1/17)
Trust fund battle heats up (12/04)

Stay Connected
Contact
Search
Most Read
News Archive
2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000

About This Page

You are enjoying stories from the Indianz.Com Archive, a collection dating back to 2000. Some outgoing links may no longer work due to age.

All stories are available for publishing via Creative Commons License: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)