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JUNE 25, 2001

The House of Representatives is threatening to withhold federal funds from the Department of Interior because government officials haven't shown adequate progress in fixing the broken trust fund system.

And unless Secretary of Interior Gale Norton and her assistants come up with a cost-effective solution to the problem, says the House, Congress will move in and enact legislation to settle the government's five-year-old Cobell v. Norton lawsuit -- a case which top lawmakers consider one of the government's worst examples of financial mismanagement.

The threats, contained in a report attached to an Interior spending bill approved last week, are the latest misgivings members of the Republican-led House Committee on Appropriations have expressed on trust funds. Should Congress act, it would be yet another blow to the Interior's credibility on the matter.

Since 1996, the Committee has dedicated some $614 million to the Interior in hopes of reforming the accounting system used to manage the trust assets of an estimated 300,000 American Indians. Yet there's been little consolation the money has been spent wisely.

At an oversight hearing in March, members of the Committee became increasingly skeptical of Special Trustee Tom Slonaker and Bureau of Indian Affairs Deputy Commissioner Sharon Blackwell. A complete fix won't be operational until 2005, the two officials told bewildered lawmakers.

Still, reforming the system is just one of the Committee's many worries. In order for a fix to work, the Interior has to provide a historical accounting, or reconciliation, of the funds owed to each Indian trust beneficiary.

So far, this process has proved so time-consuming that BIA Chief Information Officer Dom Nessi says it deserves additional oversight. The task, however, could be shortened if the Interior conducts a statistical sampling of the accounts.

But a year after being directed by Congress to come up with a "comprehensive report" on sampling, the Interior hasn't complied with the request. Slonaker has only estimated the sampling could cost between $17 million and $70 million -- money the Committee is threatening to hold back.

"[T]he Committee reiterates its position that it will not appropriate hundreds of millions of dollars for an historical accounting that provides funds for a protracted reconciliation process whose outcome is unlikely to be successful," says the report.

The House on Thursday approved an $18.9 billion Interior spending bill. Slonaker's office would get $99.2 million if approved as written.

The bill has been referred to the Senate for consideration.

Relevant Links:
Office of the Special Trustee - http://www.ost.doi.gov
Trust Management Improvement Project - http://www.doi.gov/bia/trust/tmip.htm
Indian Trust: Cobell v. Norton - http://www.indiantrust.com

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