Judge expresses views on Indian trust fund accounting

Tuesday, June 19, 2007  

With his eyes toward an October trial, the federal judge handling the Cobell trust fund case said on Monday he wants the federal government to show how much money Indian beneficiaries were or weren't paid.

Indian Country deserves to know the answer, Judge James Robertson said at a 2.5-hour status hearing in Washington, D.C. So do Congress and the public, he told lawyers for the plaintiffs and the Bush administration.

"What does it all add up to?" Robertson said. "What are the big numbers?"

The plaintiffs and the government agree that at least $13 billion has passed through the Individual Indian Money (IIM) trust since 1909. Since the Interior Department never performed an historical accounting, neither side can demonstrate how much beneficiaries were or weren't paid.

At the end of the trial, Robertson said he hopes to have the number. "I think the world wants to know this," he said.

That doesn't necessarily mean the plaintiffs, as they have argued under trust law principles, are entitled to a certain amount of money, he noted. A decision on relief will be left for another day, he said, indicating the potential for additional trials or proceedings, possibly on the Treasury Department's trust duties.

As for October, Robertson laid out four main goals for the trial. He wants to examine the scope and nature of the historical accounting plan, the cost of the project, whether it is adequate and how much money went to Indian beneficiaries.

"It's going to be about what you're doing and what you're not doing," he told lawyers from the Department of Justice.

Although he has yet to make any rulings on the matter, Robertson gave both sides his preliminary views. He opposed the Bush administration's notion that the accounting only goes as far back as 1938, the year of one Indian leasing statute.

However, he wasn't prepared to accept the plaintiff's argument that the accounting should go back to 1887, the inception of the IIM trust. "I think the accounting goes back to the '38 act and not further," he said.

Robertson also opposed the proposal to limit the accounting to accounts there were open as of December 31, 2000. The government claims the 1994 Indian Trust Management and Reform Act only mandated a "prospective" accounting.

"I think that's an improper exclusion," he said.

The judge also said it was "improper" to exclude beneficiaries who died before they received an accounting. The government's plan cuts off deceased accounts holders, even if their heirs did not receive their money.

Those views were favorable to the plaintiffs, who argue that Judge Royce Lamberth, who presided over the case until he was removed based on the Bush administration's complaints, and the D.C. Circuit Court of Appeals already resolved these types of issues.

The plaintiffs, however, want to include beneficiaries who receive direct payments from leasing companies and beneficiaries whose trust assets are managed under tribal self-determination and self-governance agreements. At the hearing, Robertson said he wasn't inclined to support those two aspects, or to expand the accounting to account for the 11 million acres held in trust for individual Indians.

Robertson still hopes to visit the government's Indian records repository in Kansas to learn more about the accounting effort. The trip might take place during the second week of the trial, he said, but the dates have to be worked out.

In December 1999, Lamberth ruled that the government must account for "all funds" in the IIM trust, regardless of when they were deposited. The D.C. Circuit upheld the right to the accounting in February 2001.

Following contentious battles at the district court in which Lamberth imposed deadlines, standards and other guidelines on the accounting, the D.C. Circuit intervened and said Lamberth overstepped his grounds. In a later decision, the appeals court said federal appropriations must be considered in determining the scope and nature of the project.

Despite the 1999 decision, the Clinton administration never started the accounting, choosing to appeal instead. Even after the 2001 ruling, then-Interior Secretary Gale Norton -- acting on the advice of an aide who recently married former deputy secretary J. Steven Griles -- attempted to limit the project.

Facing pressure from the court, Norton unveiled the Office of Historical Trust Accounting in July 2001 and said she would "not accept that this is a job too big for us to accomplish." In July 2001, she delivered a plan that said the accounting would cost at least $2.4 billion and take at least 10 years.

After Congressional appropriators balked, Norton submitted a new plan in January 2003 that severely scaled back the accounting. Even then, the department estimated it would cost at least $335 million and take at least 5 years.

On May 31, an entirely new plan was submitted to Judge Robertson, who was eager to receive it. Associate deputy secretary Jim Cason said the project would not be complete until 2011 -- 10 years after the original day Norton originally proposed.

Cason said the department expects to spend $144 million, in addition to $271 million already being spent, to finish. Compared to the 2001 plan, it will have taken Interior the same amount of time to complete less work, albeit at a lower cost.

Relevant Documents:
2007 Historical Accounting Plan (May 2007)

Recent Briefs:
Bush Administration (June 13, 2007) | Bush Administration (June 11, 2007) | Cobell Plaintiffs (May 31, 2007) | Cobell Plaintiffs (May 29, 2006) | Bush Administration (May 11, 2006)

Historical Accounting Report:
Office of the Special Trustee for American Indians Report to Congress (May 2006)

Court Order:
Cobell v. Kempthorne (April 20,2007)

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

Relevant 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