Cobell, government to file closing remarks in lawsuit
By JODI RAVE of the Missoulian
The 11-year legal battle pitting a half-million Native landowners against the U.S. government has closed another chapter, but it isn't over yet.
A 10-day trial wrapped up late last week in the Cobell v. Interior Secretary Dirk Kempthorne lawsuit in U.S. District Court in Washington, D.C.
Lawyers on both sides have 36 days to present written closing arguments to the newly appointed federal judge overseeing the case.
Elouise Cobell, a community development expert in Browning, filed the lawsuit in 1996. She attended the proceedings last week - where federal attorneys defended the government's handling of billions of dollars that never made it into the accounts of individual landowners who earned money from natural resources on 11 million acres of tribal land.
“Testimony here showed everything is on the honor system,” Cobell said. “The way the systems are, anyone has a license to steal from IIM (Individual Indian Money) account holders because there's nothing in place.”
“It's widespread all over the country,” Cobell said of the federal accounting system. “By not having systems in place, people can do whatever they want to take advantage of IIM account holders.”
After a century of undisputed mismanagement, witnesses and whistleblowers stepped forward to testify that Native landowners are still losers in a land management game where the U.S. Interior Department has been trying to explain, and fix, an accounting system operated with few checks and balances.
“The historical accounting can be and is being accomplished, and it is being accomplished in a structured and orderly manner,” attorney Robert Kirschman Jr. told U.S. District Judge James Robertson. “The evidence you will hear will demonstrate that Interior is indeed curing the breach of the fiduciary duty that was found by the Court of Appeals back in 2001.”
After Cobell filed suit in 1996, a federal judge - who was removed from the case for scathing remarks against the Interior Department - ordered a historical accounting dating back to 1887.
Meanwhile, estimates of mismanaged money range from $7 billion to upward of $100 billion.
“We're not talking peanuts,” said Cobell attorney Dennis Gingold. One of the largest timber deal contracts in U.S. history was executed by Theodore Roosevelt in 1908, which involved Indian timber lands.
As lawyers argued for and against the accounting system that has bilked Natives out of billions of dollars, testimony also revealed that the Interior Department has been charging landowners for its accounting services.
“From the very beginning of this trust, fees have been charged for the management of the trust lands; 8 to 10 percent with regard to the sale of timber,” Gingold said. “Your Honor, if you had a trust today in the Wilmington Trust Company, whether you're a Dupont or anybody else, you're not paying 8 percent, you're not paying 10 percent. You're paying a management fee of never more than 3 percent, and probably less, depending on the size of the trust.”
Interior Department Deputy Secretary James Cason testified in court that the department has been examining its accounting methods. The department's work is on track for its historical accounting, back to a date Interior officials pin at 1994, instead of the court-ordered 1887.
“We have not found any instances of systemic accounting error or systemic fraud,” said Cason. “We have covered a fair amount of territory so far, and we think that the job, as we've defined it, is a doable job,” Cason said.
He said the department could finish its accounting sooner if Congress provided adequate funding. But that's not the case, he said.
“If we design a historical accounting that requires
$5 billion worth of work, and we have $50 million a year, that indicates that we would be at this for the next 100 years. Our sense of the Department of Interior is no one in the process wants to have a historical accounting project that has that long a duration,” said Cason.
But Cobell attorneys argue a proper accounting is long overdue.
“The systems that house our clients' trust assets and money have been without control,” Gingold said. “There's no management. There was not even an audit of the trust for the first 100 years of the trust.”
Sharon Red Thunder, a Bureau of Indian Affairs employee for nearly four decades, testified that graft within the present-day system goes unchecked. She retired from the BIA in 2003.
Here are some excerpts from the courtroom exchange between Red Thunder and attorney David Smith regarding her BIA employment on the Colville Reservation in Washington:
Smith: “Have you ever seen money go to BIA employees that were intended for beneficiaries?”
Red Thunder: “Yes, I did. When I was a realty officer, I was concerned about an employee within the Bureau of Indian Affairs, a social worker who was taking money out of individual tribal members' accounts. ... He would take the money out of their accounts - (he) had a power of attorney over them - and he would place the money into his bank account.”
Smith: “Did you raise your concerns with your superiors?”
Red Thunder: “Yes, I did. I went to the superintendent of the agency and I told him that I didn't think it was right. ... I knew that money was coming in from land sales, I knew they were getting large amounts of money, and this person was removing the money from their account.”
When Red Thunder followed up on the reported theft, “I was told that they found no wrongdoing.”
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