Indicator: Native American Trust Fund Reform Urged

A nine-year court battle by Blackfeet accountant and banker Elouise Cobell has prompted a coalition of American Indian leaders to propose a multi-billion dollar settlement to Indians and dramatic reform of the Indian trust fund. The proposal may be implemented in federal legislation being introduced this year. The trust fund has been unable to account for billions of dollars in oil, gas, and land-use royalties the government has collected on behalf of an estimated 500,000 individual Indians. Indian leaders estimate the amount owed to be at least $100 billion.

For decades, Cobell has sought to change policies and practices of the U.S. Department of Interior that deny Indian families land-use profits owed them. In 1996, she filed a class action case (Cobell v. Norton) on behalf of 300,000 Indian families. A federal judge hearing the case in 1999 said the accounts were so botched that it was impossible to know what was owed to whom, especially since Interior had destroyed hundreds of boxes of documents. Officials of several U.S. administrations have been held in contempt of court for failing to account for the monies, and the federal courts were placed in charge of overseeing the process of fixing the trust funds.

The Allotment Act of 1887, intended to assimilate Indians into American society, divided 90 million acres of reservation land into individual lots called allotments. The federal government awarded allotments to tribal members, but took charge of these lands and leased them to gas, oil, timber, grazing, and mining companies. About $300 million a year flows into the trust fund. That money was supposed to be passed to the Indians, but Interior's Bureau of Indian Affairs often failed to do so. Despite complaints and congressional investigations, Native Americans have never received all the money due.
Both the Clinton and Bush administrations refused to settle the case, but in June, tribal leaders converged on Washington to urge a $27.5 billion settlement and offer a set of 50 principles for reform of the trust fund. Senators John McCain of Arizona and Byron Dorgan of North Dakota are sponsoring legislation to implement many of these recommendations, including fixing the trust system without taking money away from other Indian programs, re?allocating splintered lands, and assuring proper future accounting of Indian trust funds. After 118 years and with compound interest owed, according to federal courts, the price tag is enormous. Indian leaders regard the $27.5 billion figure as significantly discounted.

Many American Indian communities are desperately poor and tribal governments are chronically short of funds to pay for health care and education.

—Patricia Powers
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Patricia Powers is a member of the Friends Committee on National Legislation, Native American Advocacy Program.

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