Interior avoids admission of trust standards

FROM THE ARCHIVE

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WEDNESDAY, JULY 24, 2002

Trust law standards require the federal government to pay out billions of dollars for fiduciary mismanagement, the Department of Interior's top Indian trust official argued recently.

In a stark admission of the government's liability to Indian beneficiaries, Special Trustee Tom Slonaker in a memo questioned, in advance, the Bush administration's proposal to account for the assets of more than 500,000 American Indians. He said the lack of adequate records and vulnerabilities in computer systems demonstrate a breach of trust.

"Because it is the duty of the trustee to know all the facts about the administration of the trust, these flaws cause me to doubt the ability of the department to show either itself or the beneficiaries in sufficient detail the nature and amount of the trust property and its administration," he wrote on May 22.

Slonaker, a Clinton appointee who continues to serve at President Bush's discretion, was quick to point out that efforts to become more accountable were worthy. But he clearly stated that the government's failures mean the plaintiffs in the Cobell v. Norton class action -- and even tribes with trust assets -- would almost certainly be entitled to large sums of money under trust law standards.

"It is also my opinion that in the event the trustee fails to provide clear and accurate information to the beneficiary, all doubts will be resolved against it and not in its favor," Slonaker wrote to Bert T. Edwards, a Bush appointee in charge of the Office of Historical Trust Accounting.

Despite Slonaker's words, other top Interior officials are reluctant to admit they owe for what they cannot account. In testimony to the House in March, Deputy Secretary J. Steven Griles said Indian beneficiaries shouldn't be paid twice, even if the government can't show they were paid at all. At a Senate hearing last month, he refused to describe the department's fiduciary standards yet said they were "evolving."

And after the letter was written, Edwards announced plans to collect records and perform computer- and paper-based analyses of the Individual Indian Money (IIM) trust. His report said the project would take at least 10 years and cost at least $2.4 billion, but admitted the estimates were not solid.

Slonaker has frequently clashed with his superiors in both the Clinton and Bush administrations. In late 2000, he refused to take on a statistical sampling project of the IIM trust, citing pitfalls in the approach.

Anne Shields, then chief of staff to former Interior Secretary Bruce Babbitt, had to order Slonaker to come up with cost and time estimates anyway. Norton later blamed him for not moving forward with the plan, even though she formally rejected it in July 2001.

More recently, Slonaker refused to sign off on OHTA-led project affecting 8,000 IIM accounts. "I cannot concur that the reconciliation of the judgment accounts constitutes an historical accounting," he wrote on June 5.

Relevant Links:
Office of the Special Trustee - http://www.ost.doi.gov
Office of Historical Trust Fund Accounting - http://www.doi.gov/ohta
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Trust Reform, NCAI - http://www.ncai.org/main/pages/
issues/other_issues/trust_reform.asp