The Long Trail

The government's tallying of Indian trust money may well be the most ambitious accounting project in U.S. history. It's also the most controversial.

Takeover Strategy

Native Americans have seen this movie before. Administration
after Administration has pledged to resolve the trust issue — with
few tangible results. The difficulty in settling the ledger lies in
the peculiar nature of the accounts themselves.

Typically, those 320,000 or so accounts (from 1938 to 2000)
contain payments from oil companies or ranching concerns —
businesses that must negotiate with the government to gain access to the 10 million acres of individually owned
Indian allotments. (Tribes hold 46 million acres.)
Some documents related to the accounts go back
to the 1887 law that empowered the federal government
to seize Indian lands and then act as trustee
for individual Native Americans (see “Divide and
Conquer” at the end of this article). “There is nothing comparable
in U.S. history, where one sovereign took complete
control of the assets of another group,” says Melody
McCoy, an attorney at the Native American Rights
Fund. “This isn’t a pension fund. Tribes didn’t voluntarily
contribute to it.”

In 1989, at the prodding of the U.S. Congress,
the government hired Arthur Andersen to perform
a full historical accounting of both individual Indian
and tribal trust-fund accounts. Five years and
$21 million later, the firm reported that, due to
missing records and the lack of an audit trail in the
Bureau of Indian Affairs (BIA) systems, it could reconcile
only tribal accounts — and even then, only
those opened after 1972.

The Andersen report did not exactly stun longtime
BIA watchers. The agency, part of Interior, has
long been criticized for its handling of Native American
trusts. The Government Accountability Office
has repeatedly slammed the bureau’s reporting systems.
In 1991, Interior itself characterized the entire
BIA as a material internal-control weakness.

In 1994, Congress passed the American Indian Trust Fund
Management Reform Act, mandating a tallying of the tribal and
individual accounts. But it took a federal court order six years
later to jump-start the project, and the judge on that case has
since been removed at the behest of the Justice Department.

Meanwhile, pressure is mounting on Indian litigants to settle.
Tribal leaders say if the Cobell lawsuit drags on much longer,
many elderly beneficiaries will die before seeing any money. The
board of the United Southern and Eastern Tribes also claims that
the DoI is offsetting some of the costs arising from the Cobell litigation by diverting funds earmarked for basic services on Indian
reservations. Sen. John McCain (R–Ariz.) introduced a bill
that would settle all individual accounts for $8 billion (with no
ban on future suits). The legislation, supported by many tribes,
was suddenly withdrawn from committee consideration in
August, after Interior indicated it wanted to help craft legislation
that would be acceptable to Indian litigants. But as John Dossett,
general counsel for the National Congress of American Indians,
points out, it’s hard for Native Americans to agree to an amount
if they’re not sure what they’re owed. “How do you know if you’re
getting a good deal or a bad one?” he asks.


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