Bush offers low figure to settle all trust fund claims

Wednesday, March 7, 2007  

The Bush administration has proposed to settle all trust mismanagement claims and pay for trust reform with $7 billion despite acknowledging the price tag could run into the hundreds of billions.

In testimony to Congress two years ago this month, U.S. Attorney General Alberto Gonzales said the federal government's liability for tribal trust claims runs "more than $200 billion."

But in a letter to the Senate Indian Affairs Committee on Thursday, Gonzales and Interior Secretary Dirk Kempthorne offered a much lower amount. They said the administration was prepared to "invest" $7 billion to settle all trust mismanagement claims.

The money would end the more than 250 tribal cases as well as the billion-dollar Cobell lawsuit over individual Indian funds. In exchange, the administration demands Congress extinguish the government's liability for all future trust claims.

Not only would the money be used to resolve the lawsuits, it would be used to pay for trust reform programs at the Interior Department. In the letter, Gonzales and Kempthorne cite fractionation, information technology security and a controversial initiative to shift all management duties to tribes and individual Indians.

"We look forward to continuing our work with Congress to help usher in a new era of independence and prosperity for Indian landowners and tribes and a future relationship with Indian Country that reflects our commitments to self-governance and self-determination," the two Bush officials said.

The proposal was immediately met with resistance from the Cobell plaintiffs. Keith Harper, a Washington, D.C., attorney for the plaintiffs, called it a "bad faith offer."

"You cannot say that you have a potentially $200 billion liability [for tribes] and try to settle that, plus Cobell, plus trust reform, plus IT security, for $7 billion," he said yesterday. "That is patently bad faith."

The offer is also likely to draw objections from tribal leaders, who rejected the same proposal last fall when it was released by Sen. John McCain (R-Arizona). Bill Martin, the vice chairman of the Central Council of the Tlingit and Haida Tribes of Alaska, said the administration's ideas "killed" any chance of resolving the Cobell and tribal lawsuits.

Martin, speaking during last week's National Congress of American Indians winter session in Washington, also asked Jim Cason, the associate deputy secretary at Interior, to promise to consult with tribes "before" any settlement proposal is released. The conversation took place on Tuesday, two days before Kempthorne, Cason's boss, sent the letter to the Senate.

"I think it's inevitable that we hold consultation about any kind of legislative settlement of these issues," Cason said in response.

The letter is the first time the administration has offered any type of number in association with the trust debacle. McCain, the former chairman of the Senate Indian Affairs Committee, had been waiting more than a year for a response before.

An attachment to the letter lists the items an "acceptable" trust reform bill should contain. "The administration is prepared to consider a multi-billion dollar expenditure for this purpose if said legislation ends all actual and potential litigation disputes, associated with those land trusts and is constructed to achieve [trust reform]," the document states.

The attachment calls for enactment sometime this year. In their letter, Kempthorne and Gonzales said the White House Office of Management and Budget, which had been holding up consideration of the settlement last year, won't object if the legislation is consistent with the administration's proposals.

In response to the letter, Sen. Byron Dorgan (D-North Dakota), the chairman of the Senate Indian Affairs Committee, said he would hold a hearing later this month to solicit views from tribes and the Cobell plaintiffs. "This is the first time that the federal government has acknowledged a multi-billion dollar liability for the mismanagement of the Indian trust funds over the past century and more. That is a significant admission," he said.

"The conditions the administration has attached to the settlement offer are going to be very controversial," he added.

On the same day of the Kempthorne-Gonzales letter, Dogan's committee released its views and estimates letter, asking the Budget Committee to set aside $8 billion for a potential trust settlement.

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

Sen. Dorgan Statement:
DORGAN SAYS BUSH ADMINISTRATION OFFERS $7 BILLION TO SETTLE SUIT OVER MISMANAGEMENT OF INDIAN TRUST FUNDS (March 6, 2007)

Other 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