Andersen reports cited in tribal trust cases

MONDAY, AUGUST 12, 2002

Reports prepared in the 1990s by convicted accounting firm Arthur Andersen are playing a critical role in several trust fund disputes over the objections of tribes who say the shoddy work is being used against them.

Although President Bush in March signed into law a bill that attempts to bring some clarity to the issue, tribes aren't convinced the government has heard the message. "That is not a full accounting," National Congress of American Indians President Tex Hall said of the Andersen reports.

"It's only a sampling" of the historic mismanagement, he said.

Hall is also chairman of the Mandan, Hidatsa and Arikara Nation of North Dakota, one of 18 tribes nationwide that has sued the government to obtain a full accounting of their trust funds. Their cases mimic the landmark Cobell class action, filed on behalf of more than 500,000 individual American Indians.

But unlike the plaintiffs in the Cobell case, tribes have been given some sort of accounting, the Department of Justice argued in recent court papers. That stance confirms the worst fears of the 54 tribes that make up the the Inter-Tribal Monitoring Association, whose leaders have repeatedly pointed out the failings of the Andersen effort.

At the behest of Congress, Andersen was hired in 1991 by the Bureau of Indian Affairs to perform a reconciliation of billions of dollars held in about 1,500 accounts. The money is derived from mining, timber, leasing and other activities on tribal-owned land.

After the five-year contract, Andersen was only able to "reconcile" about $17.7 billion in funds to the year 1973, despite activities occurring as far back as the mid-1800s. Additionally, the firm discovered that $2.4 billion was unaccounted.

The amount is nowhere near the known losses, tribes have argued. In testimony to the Senate Indian Affairs Committee on the bill Bush signed, McCoy Williams of the General Accounting Offices supported this view and identified several shortcomings in Andersen's work.

Included were the Department of Interior's own lack of records, an inadequate computer system that houses both tribal and individual assets and a limited sampling of tribal leases. Andersen also was unable to do a full comparison of the electronic system to the paper records.

Despite the doubts, Hall said tribes are convinced U.S. District Judge Lamberth will provide them justice. "A big roar came up from Indian Country" when Lamberth took on several trust cases last month, over the objections of Secretary Norton, he said.

Arthur Andersen was convicted of one count of obstruction of justice in June for shredding records related to Enron Corp., a former client that went bankrupt. The government has ceased doing business with the company, which had been hired for some Individual Indian Money (IIM) historical accounting projects.

Relevant Links:
Arthur Andersen - http://www.andersen.com
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Trust Reform, NCAI - http://www.ncai.org/main/pages/
issues/other_issues/trust_reform.asp