Energy Policy: More drilling more problems
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MAY 31, 2001

Secretary of Interior Gale Norton's push to open more Indian lands to oil and gas development doesn't bode well for one prominent American Indian who arguably has the most experience on the financial aspect of the matter.

"If I were Gale Norton, what I would be doing first before starting all this drilling is to start paying attention to the accounting system," said Blackfeet Nation of Montana banker Elouise Cobell, one of an estimated 300,000 American Indians whose land is being targeted by the Bush administration.

"If they start drilling and taking resources off Indian lands and not have the ability to account for those funds," she continued, "what will happen is people will be ripped off."

For five years, Cobell has been the lead plaintiff in a case which has brought shame to the government for mishandling the funds of American Indians for more than one hundred years. Created in a misguided attempt to assimilate Indian Country, the trust fund system itself has been acknowledged as a failure by the courts, government officials, and countless others as administration after administration ignored the magnitude of the problem.

Yet the situation could get worse now that the Bush administration is pushing for more development of federal and Indian lands as part of the President's national energy policy. Development could bring financial benefits to Indian Country but without a proper accounting system, there is little chance the money will end up in the right hands, at least when it comes to Indians like Cobell.

"Speaking from the individual Indian perspective, I don't think people will be paid the proper amount they deserve," said Cobell. "The accounting system is broken."

During a visit to an Osage Nation oil field in Oklahoma last week, Norton admitted her department faces significant challenges. "We still need to have a clear accounting of the revenues that are due both to tribes and to taxpayers whether we're talking about federal lands or tribal lands," she told Indianz.Com.

Nevertheless, she stuck to the position that more lands need to be explored, particularly since places like the Osage field are drying up. "That's one of the reasons why we need to have new sources is because the older areas become more difficult to produce economically," she said.

An estimated $500 million in funds from oil, gas, timber, and other development pass through the Individual Indian Money (IIM) accounts every year. The government, however, cannot properly provide a historical accounting of the money due to poor record keeping and a host of technological and management problems.

A plan to fix the system has so far failed to provide results satisfactory to Congress or the plaintiffs. Since the trust management improvement project was developed three-and-a-half years ago in response to Cobell's lawsuit, key milestones have been missed, internal rifts have lead to allegations of employee retaliation, and a special monitor has been appointed by the court to make sure Norton and other officials are doing their jobs.

At the same time, the price tag of trust reform threatens to cost more than the government is willing to pay to settle the lawsuit. The Cobell team claims account holders are owed $10 billion while government estimates range from $500 million to over $1 billion.

Continued: Reform costs spiral out of control (5/31)