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Bush official balks at large settlement for Cobell
THURSDAY, JULY 10, 2003

The Bush administration is only willing to settle the Indian trust fund lawsuit for "millions" of dollars, a top Department of Interior official said on Wednesday.

At a crowded and lengthy hearing, Associate Deputy Secretary Jim Cason told the House Resources Committee that settlement figures in the billion-dollar range were unrealistic. Citing the Arthur Andersen study of the tribal trust, a controversial Ernst & Young report on a handful of individual Indian beneficiaries and the department's own initiatives, the official said the government doesn't owe account holders that much money.

"It would be in the very low millions versus billions," Cason said, referring to what he called a low error rate in the system.

Cason's assessment differed significantly from that of Elouise Cobell, the lead plaintiff in the seven-year-old class action, which represents more than 500,000 American Indians. Based on a technological model of oil, gas, mining, timber, agriculture and other revenues, she said a total of $137 billion, which includes interest generated since 1887, should belong in the Individual Indian Money (IIM) trust.

But she also pointed out that the plaintiffs and the government agree, at least in court, that $13 billion has been collected. "It's up to the government to determine what those disbursements were," whether they were for the right amount and whether they were made to the right beneficiaries, she told the panel.

The testimony came as a bipartisan group of lawmakers backed a fair and equitable resolution to the case. Led by Rep. Richard Pombo (R-Calif.), the chairman of the committee, they vowed to defeat a proposal contained in the House's version of the Interior appropriations bill.

"If there is a legislative resolution, it will be done in this committee, and it will not be done in the appropriations committee," Pombo said, drawing applause from tribal leaders and others in the hearing room.

Late last month, the House Appropriations Committee, without consulting individual, tribal leaders or lawmakers with jurisdiction over Indian issues, adopted language that would force settlement of the case by giving Secretary Gale Norton full authority to offer cash payouts to willing account holders while severely curtailing judicial review of the payouts. For those accounts not resolved after a year, the department would be allowed to use a statistical sampling to examine the accounts, a methodology that has already been overwhelmingly rejected by beneficiaries.

Rep. Nick Rahall (D-W.Va.), the ranking member of the Resources committee, compared the provision to "having the wolf guard the henhouse." "Empowering the Interior Secretary to unilaterally tell account holders what they are owed based on a statistical sampling methodology devised by the Interior Secretary is not the answer," he said.

Tribal leaders who spoke also opposed the rider, which they labeled "anti-Indian," even if they didn't necessarily agree with the Cobell suit and its effects on the Bureau of Indian Affairs. "No hearings have been held on this proposal, and there has been no consultation with tribes or with individual Indian account holders," said Keller George, president of the United South and Eastern Tribes (USET), which represents tribes from Maine to Florida without significant trust assets.

The Interior provision will probably come up for debate next week, lawmakers said yesterday. They hoped for a repeat of last year's bipartisan 281 to 144 vote that stripped the 2003 budget bill of language that would have limited an historical accounting owed to individual Indians.

As for settlement, the parties are at odds over what would be fair, and efforts to settle have failed so far. The main problem, Cobell testified, is that the government won't concede the full extent of its mismanagement over the past century.

"They have to admit that they cannot do an accounting," she said, citing missing and destroyed records. "Then we'll be on the same page."

Cason argued that the 1990s Arthur Andersen study, which only looked at tribal trust fund accounts between 1972 and 1992, was illustrative, a view that is vehemently disputed by tribes. "We found a very low error rate in the records," he said. He also said a recent report prepared by an Ernst & Young accountant, but not certified by the firm, only uncovered one discrepancy.

On Wednesday, U.S. District Judge Royce Lamberth concluded a 44-day trial into the Bush administration's reform plans. There is no indication when he will rule, or how it will play into Trial 2, the final portion of the case that will involve restatement of the account balances.

The Senate Indian Affairs Committee plans to hold its own hearing later this month on the issue. Sens. Ben Nighthorse Campbell (R-Colo) and Daniel Inouye (D-Hawaii) have said they want to draft legislation that would resolve the case.

Relevant Documents:
Testimony: Elouise Cobell (July 9, 2003)

Relevant Links:
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust

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