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Laws, standards and the Indian trust

In carrying out its treaty obligations with the Indian tribes, the Government is something more than a mere contracting party. Under a humane and self imposed policy which has found expression in many acts of Congress and numerous decisions of this Court, it has charged itself with moral obligations of the highest responsibility and trust. -- Seminole Nation v. United States, 316 U.S. 286, 1942.

More than 60 years after the Supreme Court uttered these words, the federal government's obligations to tribes and individual Indians remains the subject of considerable debate. Last year's proposal to split the Bureau of Indian Affairs in two -- thereby separating fiduciary management duties from other more ministerial ones -- was an indication of the controversy the Indian trust relationship can generate.

Today, the Supreme Court steps in the ring as it hears oral arguments in U.S. v. White Mountain Apache Tribe, No. 01-1067, and U.S. v. Navajo Nation, No. 01-1375. A decision has the potential to affect whether the federal government can be held liable for alleged mismanagement of Indian trust assets, be they land, money or other property.

Based on two earlier decisions known as the Mitchell cases, money damages can be awarded in certain instances. Indian beneficiaries have to point to "statutes and regulations at issue [to] clearly establish fiduciary obligations of the government in the management and operation of Indian lands and resources." In the background is the "undisputed existence of a general trust relationship between the United States and the Indian people," the Court wrote in 1983.

'Dynamite Those Buildings'
The White Mountain Apache case is based primarily on a 1960 law under which the government promised to hold an historic Army fort in trust for the tribe "subject to the right of the Secretary of the Interior to use any part of the land and improvements for administrative or school purposes."

When it came time to fulfill the agreement, Fort Apache had fallen into disrepair. The tribe refused to accept the property until the Department of Interior fixed crumbling school and other buildings.

Needless to say, the government didn't cough up the $14 million estimated to repair the property. According to the federal government, the law imposes no duty on the Department of Interior to protect the site from waste.

"[I]f it were deemed appropriate to dynamite those buildings to the ground by the Secretary of the Interior, it would be within the Secretary's decision to do so," a government attorney argued before an appeals court in December 2000.

Should the Supreme Court agree, the tribe will have to accept the fort as-is or seek other ways to improve it. The Bush administration has allocated a little over $1 million to fix a roof at one of the school buildings.

'A decision on this appeal is not imminent'
The Navajo Nation case is a bit more complex than the White Mountain one, although the history is just as long. It dates to early 1964, when the Department of Interior approved a coal mining lease between the tribe and a wholly-owned subsidiary of Peabody Coal, the world's largest coal company.

Under terms of the 20-year agreement, Peabody would pay the tribe an average of 33 cents a ton for what government experts would later call one of the highest quality coal deposits in the United States. Naturally, the tribe sought to improve its rate of return during negotiations for a new lease. But after the talks stalled, tribal officials convinced the Bureau of Indian Affairs in 1984 to impose a 20 percent royalty rate, a significant improvement.

Peabody appealed the decision within the BIA (*). While the case was being reviewed, the company hired a lobbyist who was a personal friend of then-Secretary Donald P. Hodel. Stanley Hulett met with Interior officials, including Hodel, at least twice to discuss the issue.

As a result, Hodel in July 1985 instructed the BIA to inform the Navajo Nation to head back to the negotiating table with Peabody. By this time, however, the IBIA had drafted its decision to affirm the 20 percent rate.

This information was kept hidden and Hodel in fact advised the tribe to the contrary. Using a memo drafted by Peabody lawyers, he said "a decision on this appeal is not imminent" even though it had been completed.

The tribe ended up accepting a 12.5 rate, which was still an improvement over the first lease. But its suit filed in the Federal Court of Claims contends a loss of $600 million due to the behind the scenes lobbying.

Currently, the Navajo Nation and the Hopi Tribe are again negotiating new leases for mining in northeastern Arizona. In addition to the royalty issue, Peabody's use of water to transport the coal via a 273-mile underground slurry to a power generating station in Nevada has generated opposition from tribal leaders and tribal activists. The BIA has been overseeing the talks, which have taken place in Phoenix in recent months.

Separately, the Navajo Nation has a lawsuit in federal district court in Washington, D.C., against Peabody, alleging the company conspired with federal officials to deceive the tribe. A third suit, in federal district court in Arizona, deals with the Navajo and Hopi leases.

*Ed. Note: Peabody asked the Assistant Secretary for Indian Affairs, not the Interior Board of Indian Appeals, to review the lease rate. An earlier version of the story incorrectly stated the process.

Relevant Links:
U.S. Supreme Court -
White Mountain Apache Tribe -
The Navajo Nation -
Peabody Energy -

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