A quest for cooler heads in Indian suit against US

A judicial panel cites mismanagement of native trust accounts, but rules the case needs a new judge.

The lawsuit's name is innocuous enough. But Cobell v. Kempthorne carries 119 years of historical baggage, and its outcome could affect hundreds of thousands of people at a cost of billions of dollars. It's also thorny as a prickly pear, so contentious that a panel of federal jurists this week ruled that the case needs a different judge to oversee it.

The dispute involves royalties due native Americans dating back to 1887. That's when Uncle Sam took control of some 11 million acres of tribal lands in the West as part of the federal policy of forced assimilation. The US was supposed to be paying into Indian trust accounts what now amounts to billions of dollars in revenues from oil, gas, timber, minerals, and grazing on those acres, then disbursing payments to native account holders.

But the whole thing has been mismanaged, federal courts have declared several times since the case began in 1996, and the last three Interior secretaries have failed to fix it. Idahoan Dirk Kempthorne, who recently became Interior secretary, follows both Bruce Babbitt and Gale Norton as lead defendant.

On the other side is Elouise Cobell of Browning, Mont., a member of the Blackfeet Indian Tribe, a rancher and banker, and a recipient of a MacArthur "genius" grant for her work in economic development. She's the lead plaintiff in the class-action lawsuit that bears her name. "The government has abused trust beneficiaries and has failed to fulfill the most basic trust responsibilities owed to us," she said this week.

The courts and most experts have agreed with that assessment. The US Circuit Court of Appeals for the District of Columbia declared this week that "the [US] government has an obligation to rise above its deplorable record and help fashion an effective remedy."

Words like "ignominious," "incompetent," "malfeasance," and "recalcitrance," the three-judge panel wrote, "are fair and well supported by the record." Still, the judges decided, after nearly 10 years on the case US District Judge Royce Lamberth had "exceeded the role of impartial arbiter" in hearing Cobell v. Kempthorne.

In an opinion last summer, Judge Lamberth had written: "The ... record ... tells the dreary story of Interior's degenerate tenure as Trustee-Delegate for the Indian trust, a story shot through with bureaucratic blunders, flubs, goofs and foul-ups, and peppered with scandals, deception, dirty tricks and outright villainy, the end of which is nowhere in sight."

What the appellate court wants, the panel implied, are cooler heads in the courtroom. As the case has dragged on, some native American leaders also have urged that a settlement be reached rather than continuing to fight it out in court.

"Continued litigation will cost many more millions of dollars and take many more years to reach completion," Joe Garcia, president of the National Congress of American Indians, told a joint House- Senate hearing in March. "It is in the best interests of tribes and individual account holders that tribal leaders participate in the resolution of trust-related claims."

That's what congressional leaders of both parties hope to do, though the job is daunting. The House Resources Committee has found that the government's recordkeeping of "Indian Individual Money" accounts "has been so poorly handled that Indian account holders cannot receive a full and accurate accounting of whether monies generated from their lands were correctly collected, deposited, tracked, and disbursed."

Many individual trust accounts have been divided among heirs over the decades, to the point where management costs are greater than the value of some accounts. The number of accounts is estimated to be between 300,000 and 500,000 – as many as 20 percent of all American Indians.

Among other things, bills in the House and Senate would create a new senior position in the Interior Department, set up a settlement fund to be administered by a Treasury Department special master, establish a management review commission, and require the Comptroller General to contract with an independent external auditor.

The Interior Department agrees that $13 billion was collected between 1909 and 2001. The Indian plaintiffs have said they'd settle for $27.5 billion, including interest accrued on the amount supposed to have been held in trust. What the proposed legislation does not do is set a settlement figure. "This is deliberate," says Rep. Richard Pombo (R) of California, chairman of the Resources Committee. "It is one of the trickier issues to resolve."

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