MINISTRY FROM TWO POLES

Background:

The BIA was established on March 11, 1824 and is subsumed under the Department of the Interior as the agency that overseas Indian Affairs. What does “oversea” mean? Essentially it is a policy of treating Native Americans as orphaned children. As long as Indians maintain an identity as primarily a member of a tribe, as opposed to an independent US citizen, they are dealt with differently. The BIA, among other functions, is charged with “holding” Indian owned assets (land and the proceeds from the land) for the benefit of the Indians.

The “land” is that which was ratified by the Congress in 1895 as owned by Indians tribes and their members. These assets are “held” in trust – therefore, there is a fiduciary responsibility to maintain the assets solely for the benefit of the owners. In the past, only if Indians removed themselves from themselves from collective ownership of land would benefits accrue to them.

The Bureau administers 43,450,266.97 acres of tribally owned land, 10 million acres of individually owned land, and 309,189 acres of federally owned land held in trust status. The BIA is also responsible for leasing the land for agricultural use and managing the land for the removal of natural resources from the land. The lease payments and mineral right royalties are collected by the BIA and held in trust to be paid to the Indians. At any given point in time $2.5 billion is in the combined Individual Indian Money and Tribal Accounts

On June 10, 1996, the Native American Rights Fund (NARF), together with a number of attorneys, representing individual Native Americans, filed a class action lawsuit against the federal government claiming that the government failed to properly manage Indian Trust funds. This lawsuit is known as Cobell v. Kempthorne (formerly Cobel v. Norton and Cobell v. Salazar). There are currently 300,000 – 500,000 – the exact number being indecipherable due to BIA record keeping – Individual Indian Money (IIM) account holders involved in the lawsuit as well as other Trust beneficiaries.[1]

The lawsuit has been divided into two phases based on the two objectives outlined on the Native American Rights Fund (NARF) Web site. Its goals are as follows:

1. To require the federal government to create and maintain an adequate system to properly manage and accurately account for the trust assets of individual Indians; and
2. To require the federal government to provide a full and accurate accounting to individual Indian Trust beneficiaries, and to restate IIM account balances accordingly.

Why is there a lawsuit?

The suit involves assets that have been earned by Native Americans through the sale or lease of natural resources on Indian property. The federal government approves the lease and or sale of property or resources. It collects the revenue made from such transactions. Farming and grazing leases, timber sales, and oil and gas production on Indian land and other uses generate revenue. The funds are then to be placed in trust accounts managed by the BIA.

In reality, the BIA holds two things in trust for the Native Americans, land and cash.

Land

• As of 1900 more than 55 million acres of land was allotted and held in trust for Native Americans. That land mass could swallow the states of Maine, Massachusetts, Vermont, New Hampshire, Connecticut, Rhode Island, Delaware, Maryland and Washington, D.C. with room to spare. To put it into something more tangible: 55.7 million acres = 87,031 sq. miles – Minnesota is 86,943 sq miles.
• Today, there’s less than 11 million acres held in trust for native Americans and the government can’t explain where 39 million acres went. That is a shrinkage of 70%. Remember the land belongs to Native Americans by law – held in trust by the U.S. government. This is not land taken by legal action, revocation of treaties or sold. Ownership has just changed – but there are no records of how and why.
• Much of the 55.7 million acres was and is among the most fertile and mineral rich lands west of the Mississippi and does not necessarily correlate to the land on which reservations are to be found.
Cash

Despite almost continuous calls from Congress for audits and investigations of the Bureau of Indian Affairs for most of the twentieth century, until 1982 only the General Accounting Office of the federal government actually performed any audits. One of these surmised, “BIA’s administration of the Indian trust fund continues to make the accounts look as though they had been handled with a pitchfork.”[2] From 1982 to 1993, 30 attempts were made to audit some of BIA’s affairs, but the results were essentially the same. Every single one of the 30 reports generated noted serious accounting and financial management problems and weak internal controls throughout the BIA.

“The Bureau’s management of Individual Indian Monies (IIM) and Tribal trust funds is inadequate to properly maintain and administer the over $2 billion dollar fund for which it has responsibility. Tribal and individual accounts lack credibility and have never been reconciled in the entire history of the trust fund.” — Secretary of the Interior’s Annual Statement and Report to the President and Congress (1991)

The only external audit known to have occurred was between 1987 and 1992 by Arthur Anderson Co. Rather than a full audit, Congress requested a full accounting of the tribal trust funds – those funds and property documents belonging to Native Americans. These tribal funds, which are also managed by the BIA, are a collection of approximately 2,000 tribal accounts owned by some 200 tribes. These accounts hold about $2.3 billion at any given time and are primarily used to finance essential tribal government services. They were also asked to do an audit on a sampling of the IIM – Individual Indian Money accounts.

All Arthur Anderson could accomplish in five years was auditing the tribal accounts for the previous 20 years and this is what they reported:[3]

• for this 20-year period alone at least $2.4 billion in the tribal trust accounts was unaccounted for
• billions of dollars more were virtually untraceable because of the questionable nature of the government’s records
• the trust fund system for individuals was so poorly managed that it wouldn’t even try to reconcile the accounts and estimated that it would cost $108 million to $281 million just to attempt the monumental task
• the government had destroyed, never created or otherwise did not maintain the records necessary to conduct a reconciliation

How bad does this hurt? Well, for most Native Americans involved in the trusts, the funds from land leases (not “Indian welfare” as most people believe) is their sole source of income. Abject poverty for hundreds of thousands is the result of this mishandling.

What was done about this report. Congress tabled it because it didn’t have the financial resources to check into it further. In short, the same thing that has been always been done about BIA mismanagement – if we want to call it that.

Milestones in the lawsuit:

Two parts to the lawsuit:

1/ To require the federal government to create and maintain an adequate system to properly manage and accurately account for the trust assets of individual Indians; and

2/ To require the federal government to provide a full and accurate accounting to individual Indian Trust beneficiaries, and to restate IIM account balances accordingly.

Part One was won by the Plaintiffs – the court found that the federal government is required to function as a responsible fiduciary and treat the funds as trust accounts.

Before the second part came to trial, a new problem arose. The BIA sent notices to Indian land owners telling them that could lose their land if they persisted in the suit – that the safest approach was to withdraw from the suit and sell the property through he BIA.

The Court stepped in – ordering the BIA to cease and desist threats and for any and all communications about the suit to be cleared through the courts.

The BIA responded by informing Indians that they could no longer talk to them, closed the Bureau local offices and stopped cutting checks for trust fund payments.

The Court found the leaders of the BIA and Interior in contempt.

The government’s response – call for the removal of the judge who had ruled against them almost consistently.

For complete information, including every filing by both parties and every decision of the judges in the case, go to IndianTrust.com.

[2] Joel Dyer, “Billions Missing from U.S. Indian Trust Fund”, Albion Monitor/News online, August 15, 1996, <http://www.monitor.net/monitor/free/biatrustfund.html&gt;

[3] Dyer, ibid & National Association of Social Workers, “Tribal Business Contributions and Federal Mismanagement of Trust Funds”, NASW website, <http://www.naswdc.org/diversity/native2003/tribal2003.asp&gt;