Official says huge payoff isn't justified
Official says huge payoff isn't justified

By Chris Casteel Comments 1
Published: October 14, 2007

WASHINGTON — After spending four years and nearly $200 million, the Department of Interior has found relatively few errors in the ledgers of Indian trust accounts that are the subject of a long-running lawsuit, a top department official said last week.

James Cason, associate deputy secretary at the Interior Department, said $1 billion in receipts had been examined and only $16,000 in errors — in overpayments and underpayments — had been found.

Cason said the department doesn't know what will be found as a massive accounting project moves forward. But he said there's no indication of discrepancies that would justify paying billions of dollars to the Indians suing the federal government.

Cason said the Indians in the case don't want the department to complete its accounting project because they would have a harder time pushing for a big settlement.

Cason's comments came a day after he testified in U.S. District Court here in the latest phase of the Cobell case, named after the lead plaintiff, Elouise Cobell.

The class-action case was filed in 1996 by Cobell and others who said the government wasn't properly managing the individual trust accounts established in 1887 to hold the proceeds from the sale of Indian land or for leases of the land for oil and gas drilling, grazing, timber cutting or other uses.

Shrunken holdings

Individual Indians once had 40 million acres held in trust; that is down now to about 11 million acres.

Cobell said last week that the Interior Department still couldn't provide account holders with clear, reliable information.

"There's too many missing records,” she said. "Documents are missing, systems are broken.”

Cobell, an accountant and a member of the Blackfeet Tribe of Montana, said, "They've spent a lot of money but they still haven't given the type of accounting” required by law and the rulings in the case.

"They're doing this dog-and-pony show to limit their liability. They don't care about the beneficiaries.”

Cost of the job

The trial that began last week will focus on whether the Interior Department's detailed plan for reconciling hundreds of thousands of individual accounts — involving millions of transactions dating back, in some cases, several decades — can result in accurate account statements and balances.

The government contends that, even though some documents are missing, painstaking work and limited use of "statistical sampling” can produce reliable information.

Reconciling a single transaction — finding a document to match an account entry — can cost as much as $3,500, Cason said. The current plan for reconciling accounts that were open in 1994 has already cost $127 million; but millions have been spent on other accounting exercises, including tracing every transaction in the accounts of the original plaintiffs. The total accounting cost so far has been $200 million.

Cobell and the plaintiffs said the government has never given the 500,000 account holders accurate and complete information and can't do so now.

Acrimony and controversy

The case has been acrimonious from the outset and has led to top Interior Department officials being held in contempt of court, the disconnection of the Bureau of Indian Affairs from the Internet and the removal of the judge who presided over it for 10 years.

The situation today is: In 1999, the government was found by a federal judge to be in breach of its responsibilities in managing the trust accounts; a federal Court of Appeals has affirmed that.

In fact, the District of Columbia Circuit Court of Appeals, while agreeing with the government that U.S. District Judge Royce C. Lamberth should be removed from the case because of his inflammatory language toward the government and a series of reversed orders, reiterated last year that the government "remains in breach of its trust responsibilities.”

In 2005 and 2006, there were serious discussions on Capitol Hill about trying to settle the case, but those got bogged down, just as the legal case has.

Cobell and the other plaintiffs offered to settle the case for $27.5 billion, but lawmakers on the committees that oversee Indian issues dismissed that number. And the Interior Department never made an official counter-offer that addressed payments to the account holders.

Since the case was assigned to U.S. District Judge James Robertson late last year, there has been little talk in Congress of a settlement.