- The Washington Times - Wednesday, December 22, 1999

A federal judge yesterday said the Interior and Treasury departments so mismanaged millions of dollars in trust fund accounts for more than 300,000 American Indians that the government has no idea how much money is missing or where it can be found.
U.S. District Judge Royce C. Lamberth said in a strongly worded, 142-page ruling in a class-action lawsuit brought by the Native American Rights Fund that he would personally oversee efforts by government officials to fix the failed system.
While Judge Lamberth ruled against lawyers for the Indian account holders, who sought the appointment of a court-appointed monitor, he said they had established a right to "ongoing judicial review of trust reform efforts for the next five years or longer if necessary and a role for their own continued, close involvement in reform efforts."
"Although plaintiffs may be dissatisfied with the court's decision to not appoint another special master or monitor at this time, plaintiffs should take great satisfaction in the stunning victory they have achieved today on behalf of the 300,000-plus Indian beneficiaries" in the trust fund accounts, he said.
"That is enough for today. If more becomes necessary, the court will be available," he said. "If the defendants carry out what they now say they will do and comply with the court's order … more should not be necessary. In that case, trust reform should become a reality rather than a dream."
Judge Lamberth said it was "entirely possible" that tens of thousands of Indian account holders "should be receiving different amounts of money their own money than they do today."
But, he said, government officials could not say how much money was due, "which is the crux of the problem."
He also said he would hold a second "minitrial" to determine how much the Indian account holders are due because of lost records and mismanagement.
Eloise Pepion Cobell, head of a group that represents account holders, said the trial is expected to begin in June and account holders are likely to seek $10 billion in lost funds.
The Interior Department described the judge's ruling as a victory, saying in a statement it was "gratified that Judge Lamberth is allowing the federal government an opportunity to move forward and implement the Department of the Interior's plan to manage the Indian Trust Funds."
"We welcome the opportunity to prove that the Department of the Interior and the Bureau of Indian Affairs, with help and the guidance from the Congress, can move forward from almost a century of inadequate accounting systems and antiquated record keeping," the statement said. "We are determined to meet the challenges and overcome obstacles that lie ahead and we welcome the continued oversight from the court as we continue to put plans into action."
Native American Rights Fund lawyers said they were "comfortable" with the judge's ruling and hopeful the government would make efforts to correct the problems. The fund is a Colorado-based, nonprofit legal organization that defends and promotes the legal rights of Indians.
"I think the judge was fair and has given the government one last chance to correct the problem," said Mrs. Cobell, a member of the Blackfeet tribe in Montana. "Let's see if they do it."
Lawyer Keith Harper said he was pleased with the ruling, calling it a "prudent, judicious approach."
The judge ordered Interior to come up with an accurate accounting of the trust fund accounts; to provide for the retention of trust fund documents; and to provide adequate staffing for trust fund management functions.
Four months ago, he ordered the government to pay $625,000 for the failure of Interior Secretary Bruce Babbitt and former Treasury Secretary Robert E. Rubin to turn over documents sought in the pending suit. The records had been requested by attorneys for the Native American Rights Fund to document how payments were made to Indian trust account holders.
The lawyers had sought the records and other materials involving more than 300,000 individual accounts and 2,000 tribal accounts managed by the Interior and Treasury departments. The departments manage money from, among other sources, land settlements, royalties from minerals and other resources, and companies that use Indian land.
Interior and Treasury officials have been unable to produce accounting records or statements to verify how much cash has been collected. An audit by the Arthur Andersen accounting firm said the Bureau of Indian Affairs could not account for $2.4 billion in transactions involving the funds.
In February, Judge Lamberth held Mr. Babbitt and Mr. Rubin in contempt for failing to turn over records in the suit. He issued the contempt citations after Mr. Babbitt and Mr. Rubin refused to produce trust fund records, canceled checks and other documents demanded by the court.
The judge said at the time that he found "clear and convincing evidence" that Mr. Babbitt and Mr. Rubin, who has since resigned to return to private business, disobeyed his order.
However, he said Mr. Rubin's involvement came because he "totally delegated his responsibility to others and they have miserably failed to comply with this court's orders."

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