The NewStandard ceased publishing on April 27, 2007.

Native American Leaders Write Road Map for Trust Fund Reform

by Megan Tady

After years of grueling litigation over the federal government’s gross mismanagement of money supposedly earmarked for American Indians, a political solution may finally be in the works.

July 8, 2005 – It is a story Elouise Cobell has heard all her life, a story set on Native American land where the cattle grazing are not those of the Indians living there, where the well water extracted is not for quenching their thirst, and where the timber felled is not for building their houses. It is land used by the government, the rights often leased to corporations, and the money rarely making its way back into indigenous hands.

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"If you’re Native American, it’s a story you all know," Cobell said. "What would always stick in my mind was, ‘How could we have so much land and resources and be so poor?’ People would say, ‘If I only had a little money to buy shoes.’ Then you see other people, who don’t have any land or resources, and they’re rich. They drive cars and send their kids to college. How come we can’t? Other people have gotten rich off of our broken system, and that’s stuck with me."

Cobell, executive director of the Native American Community Development Corporation, a nonprofit affiliate of Native American Bank, has been suing the government for nine years to force the Department of the Interior to account for billions of dollars in mismanaged and lost money that it was supposed to hold in trust on behalf of 500,000 Individual Indian Monies trust beneficiaries for over a century. She also wants to permanently reform the trust fund system through the suit.

The bill would put an end to the court case and disperse a “lump sum of nearly $30 billion in reparations to Native Americans the US government has defrauded.”

Now Cobell and a coalition of indigenous leaders across Indian Country -- the term used to describe land inside the boundaries of Indian reservations -- are hoping to write the next chapter of their story. They are calling on Congress to draft legislation based upon their proposal to resolve the trust money dispute. Such a bill would put an end to the court case and disperse a "lump sum" of nearly $30 billion in reparations to Native Americans the US government has defrauded.

"This issue has been around for over 100 years," said John Echohawk, executive director of the Native American Rights Fund (NARF). "Tribal leaders have been complaining about it all this time. We’ve finally come together to press for a settlement. Hopefully we’re on the verge of making a change." NARF is a nonprofit foundation that provides legal representation to Indian tribes and organizations nationwide.

Native American leaders composed the Trust Reform and Cobell Settlement Workgroup Principles in response to Senator John McCain’s (R-Arizona) appeal to help reform the trust. The proposal consists of 50 principles to be used as a "road map to reform" for Congress. Tex G. Hall, president of the National Congress of American Indians and Jim Gray, chairman of the Inter-Tribal Monitoring Association, joined Cobell to lead the group comprised of indigenous leaders, organizations and individuals to collectively write the proposal.

Many Native American groups are adamantly opposed to any deal that would allow an existing executive branch body to regulate the fund, as the agencies are implicated in the mismanagement of trust monies.

Sen. McCain, who chairs the Indian Affairs Committee, has been drafting trust fund reform legislation with Senator Byron Dorgan (D-North Dakota), that committee’s vice chairman; Representative Richard Pombo (R-California), chairman of the House Resources Committee; and the ranking member of that committee, Representative Nick Rahall (D-West Virginia).

Cobell expressed caution about relying on legislators to fight for Native peoples. "It's very difficult to put our trust in anybody given the reports over the last 100 years that have documented the horrible mismanagement of our trust," she said. "There's a lot of politicians that still don't think this money is ours."

The majority of the lawmakers involved in drafting the legislation have recently received substantial campaign funding from affiliates of casino-rich Native American tribes and organizations.

Despite repeated victories in court deeming the Interior Department incompetent and dishonest – even prompting US District Judge Royce Lamberth to lambaste the agency for "fiscal and governmental irresponsibility in its purest form" – the Department and the Bush administration have dragged their feet in settling the case. Two government officials have been held in contempt of court for failing to produce documents and for misrepresentation in court. In 1999, the Treasury Department admitted that it had destroyed 162 boxes of records related to the trust fund management case. Since then, the judge has levied $600,000 in fines against the federal government.

Lawmakers, like Native Americans, have grown weary of the seemingly endless litigation process.

The mismanagement of Native American trust funds reaches as far back as the 1880s, when the US government broke up reservations into 80- to 160-acre parcels of land and allotted ownership to individual Native Americans. The government set up a trustee system that would collect and disburse income generated from drilling, foresting, extraction and other activities that took place on Native American property and ancestral land. Most beneficiaries, however, have seen little or no money from their trust, and have not been provided accurate records of how much money they should have received.

"If a bank doesn’t have an accounting system, it’s closed in a New York minute," Cobell said. "Or they’re fined, or they go to jail. So tell me, why is it that the US government has two different standards when it comes to accounting for private citizens’ money and Indian people’s money?"

Under the proposal, a court would oversee the collection of the funds and the creation of an independent trust management organization to enforce fair legal standards. The proposal also focuses on four main areas: historic accounting of individual Indian trust accounts; reforming the individual and tribal trust systems; Indian land consolidation; and, individual Indian resource mismanagement claims.

"We’re asking for rudimentary best practices that are used in the private sector [to] be applied to Native Americans," said Keith Harper, an NARF attorney representing Cobell. "Specifically, the principles demand competent managers, computer systems that work, a good security system and clarity of standards."

Additionally, the Native American leaders proposed the creation of a permanent position of Deputy Secretary in the Executive Branch to oversee the agencies managing the trust. Many Native American groups are adamantly opposed to any deal that would allow the Bureau of Indian Affairs, its parent Interior Department or any other executive branch body to self-regulate, as the agencies are implicated in the mismanagement of trust monies.

"The [Department of the Interior] can’t reform itself," Cobell said. "It’s so embedded in the way it’s been doing business for 100 years that it’s difficult for it to change."

The Principles require that tribal leaders be consulted when appointing the Deputy Secretary and that Indian preference be given for the position.

Legislation to reform the trust fund system has been introduced to Congress in the past, but has failed to please both Native Americans and lawmakers. Many Native Americans are putting their faith into McCain’s proposed legislation because "the basis of the legislation is coming from Indians," according to Cobell.

"I think McCain really gets it, and if he looks at the principles and follows the principles, he can make this right," Harper said.

Still, Cobell is somewhat wary about the politicians’ plans.

"I’m worried that Congress will not have the sensitivity to make the right decision," she said. "People are dying every day on reservations because they don’t have their inheritance. That’s wrong. If Senator McCain is as committed as he says he is, he will do this. He has to. But it has to be all the senators in Congress supporting the legislation to make it happen."

The proposed trust reform legislation is expected to be introduced to Congress in the next few weeks.


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The NewStandard ceased publishing on April 27, 2007.

Megan Tady is a staff journalist.

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