FROM THE ARCHIVE

Trust accounting looms for tribes

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WEDNESDAY, MARCH 20, 2002

President Bush on Tuesday signed into law a bill aimed at encouraging tribes to settle disputes over their trust assets but the measure's swift movement hasn't stopped the flow of lawsuits seeking an accurate historical accounting.

In the wake of heightened concerned over trust reform from tribal leaders, Congress and the courts, the Senate and the House acted quickly to pass the legislation. The bill, introduced by Sen. Ben Nighthorse Campbell (R-Colo.), sailed through both chambers after the Senate Indian Affairs Committee held a hearing last month.

At issue is a reconciliation project the Department of Interior initiated in the mid-1990s to address more than a century of mismanagement of the Indian trust system. The Bureau of Indian Affairs hired now-embattled accounting firm Arthur Andersen to determine whether the $2.6 billion held in trust accurately represented tribal assets.

Not surprisingly, after a five-year effort that cost $12 million, Andersen found that $2.3 billion was unaccounted. The results were presented to tribes in January 1996 after the BIA did its own reconciliation for a three-year period not covered by the firm.

Since then, lawmakers, tribal leaders and government officials have raised a number of questions about the project. Not only did Andersen limit the accounting to the years 1973 through 1992 -- tribal trusts date to the late 1800s -- the firm relied on an outdated computer system Secretary of Interior Gale Norton and other top officials have acknowledged is inaccurate.

Testimony at the Senate hearing confirmed the numerous shortcomings. McCoy Williams of the General Accounting Office told lawmakers that a full accounting was "impossible" due to technological limitations.

Still, tribal leaders have been worried the less-than-complete accounting could be used against them. In response, the bill gives tribes and the department until the end of 2005 to consider how to settle the issue.

Nevertheless, lawsuits have been piling up to force a full report. The Osage Nation of Oklahoma has a $2.5 billion claim still in its beginning stages while the Crow Tribe of Montana, the Seminole Nation of Oklahoma, the Quapaw Tribe of Oklahoma and tribes in California have recently lodged complaints in court.

The litigation is in addition to the Individual Indian Money (IIM) class action that has dragged out for more than five years. The department deliberately held back an accounting of the funds held for 300,000 Indian beneficiaries because of doubts raised by the Andersen process.

In total, the department holds 1,400 accounts for 315 tribal governments. They represent mineral, oil, gas, timber, grazing and other assets.

Arthur Andersen is currently facing a suspension from future federal contracts in response to its indictment on obstruction of justice charges. The firm is alleged to have destroyed documents related to bankrupt energy company Enron Corp.

Related Documents:
S.1857 | Senate Report 107-138 | Senate Testimony | House Debate

Relevant Links:
Arthur Andersen - http://www.andersen.com
Inter-Tribal Monitoring Association - http://www.itmatrustfunds.org/index.cfm

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