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Cobell Lawsuit & Settlement
McCain puts twist in Cobell settlement legislation


The price tag for settling the Cobell Indian trust fund lawsuit may have just gone up despite attempts by the Bush administration to delay the case.

Sen. John McCain (R-Arizona), the chairman of the Senate Indian Affairs Committee, was due to advance an $8 billion settlement bill on Wednesday. But after meeting with Interior Secretary Dirk Kempthorne and Attorney General Alberto Gonzales on Tuesday morning, he said he would work with the Interior Department, the Cobell plaintiffs and Indian Country to develop a new package.

Citing a follow-up letter that Kempthorne sent to the committee, McCain said it represented "the kind of commitment that's necessary to achieve a full and complete resolution to the entire issue of trust management that has plagued the department and Indian Country."

McCain's statement at a business committee meeting yesterday morning was not at odds with his general views about the debacle. He has often called the federal government's management of billions of dollars in Indian funds a national disgrace.

But he and Sen. Byron Dorgan (D-North Dakota), the vice chairman of the committee, made it clear that they want to put the brakes on any future trust fund litigation. "We would want this -- if a settlement is achievable -- to be a comprehensive and resolve all of the related issues," said Dorgan.

That means an $8 billion settlement may not be enough. As originally drafted, S.1439, the Indian Trust Reform Act, intended to address the historical accounting claim of the Cobell lawsuit and not "all aspects" -- as McCain put it -- of more than a century of trust fund mismanagement.

Other aspects, such as mismanagement of the trust assets themselves, would not be covered by a historical accounting settlement. Bush administration officials like Special Trustee Ross Swimmer have repeatedly pointed this out in their Congressional testimony and public statements, partly to argue that Indian account holders aren't owed much but also to downplay the scope of the Cobell case.

Experts too have told the committee that resolution of the historical accounting would not address trust asset mismanagement claims, such as whether Indian landowners received the best price for use of their assets. At a hearing this past March, they said it is up to Congress to decide how far the settlement will go.

"In coming to a number, which almost certainly should be in the billions, the committees should take into account the passage of time, the lost investment opportunities, the massive negligence -- or worse -- of the Interior Department, the fact that you are really returning their money, and similar factors," said Stuart E. Eizenstat, a former ambassador who helped resolve a Holocaust lawsuit.

At another hearing in March, tribal leaders were wary of expanding a settlement beyond the historical accounting because trust mismanagement issues are often more complex and typically entail larger sums of money. The Navajo Nation's trust mismanagement lawsuit, one of more than two dozen tribal cases in the courts, seeks at least $1.2 billion for a disputed coal lease.

The Bush administration also has warned of potentially large liabilities beyond the Cobell case, which affects only individual tribal members. Citing litigation filed by tribal governments, the Department of Justice at one point asked the U.S. Supreme Court to limit all types of trust claims, a request that was rejected.

Keith Harper, an attorney for the Cobell suit, said some Interior officials are indeed lobbying Congress to address tribal claims. He called it a stalling tactic meant to distract lawmakers and to divide Indian Country because tribes would want to resolve their lawsuits on their own terms.

"Unfortunately, we're still in the posture where everyday individual Indians are being denied justice after 119 years of not receiving an accounting of their trust funds," he said.

At the meeting yesterday, McCain said the committee would spend the next month on the new package. Congress goes on a break this week and will resume work after the Labor Day holiday in September.

The delay means McCain has fewer than 20 legislative days to advance a settlement at a time where Congress usually turns its attention to the appropriations bills that need to be passed by October to keep the federal government operating.

The following month, many lawmakers will be consumed by the mid-term elections. One is Sen. Conrad Burns (R-Montana), the chairman of the Senate Interior Appropriations subcommittee, which handles funding for all the major Indian programs.

Citing recent meetings with Cobell and tribal leaders in Montana and Wyoming, Burns said he was "disappointed that we couldn't move forward with legislation" to settle the case.

McCain also faces a personal deadline. In December, he is stepping down as chairman of the Senate Indian Affairs Committee and will hand the reins to someone else.

"Several times in recent months I have promised to make trust reform, including the settlement of the Cobell case and related issues, a high priority," McCain said in March 2005, "but I will also repeat here that I intend to give it only one good shot."

Senate Indian Affairs Committee Statement:
INDIAN AFFAIRS COMMITTEE POSTPONES CONSIDERATION OF TRUST REFORM LEGISLATION (August 2, 2006)

Indian Trust Reform Act:
S.1439 | H.R.4322

Relevant Links:
Senate Indian Affairs Committee - http://indian.senate.gov
Indian Trust: Cobell v. Kempthorne - http://www.indiantrust.com
Office of Special Trustee - http://www.ost.doi.gov
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm