Individual Indian Money (IIM) Accounts Cobell v. Kempthorne: Fact Sheet for IIM Account Holders and Other
Individual Indian Trust Beneficiaries
For purposes of trial, the case has been bifurcated into two phases which roughly correspond to these objectives.
Despite stalling tactics by the government which resulted in contempt citations against Secretary of Interior Bruce Babbitt and then-Secretary of Treasury Robert Rubin in early 1999, the first phase trial commenced on June 10, 1999 B three years to the day after the suit was filed. During the six week trial, Secretary Babbitt admitted that the fiduciary responsibilities of the United States to individual Indian trust beneficiaries are not being fulfilled. Assistant Secretary for Indian Affairs Kevin Gover likewise admitted that the government's Indian trust asset management system is broken.
Answers to Questions Commonly Asked by Individual Indian Trust Beneficiaries
Q. Why is this suit being brought now? Why not earlier or later?
Q. If the federal government has mismanaged my trust funds, why have I never heard about such mismanagement before this suit?
The fact that many individuals were unaware of the mismanagement of their trust funds is not surprising given the government's complete lack of accountability. Despite decades of mismanagement, the government has never informed its individual Indian trust beneficiaries that their IIM account balances are unreliable. During a six week trial beginning in June 1999, Interior Secretary Babbitt admitted that this information has been intentionally withheld in order to reduce the risk of lawsuits.
Q. What do I, as an individual Indian trust beneficiary, have to do to be part of this law suit?
The lawsuit was certified as a class action by the court on February 4, 1997. Accordingly, if you are an individual trust beneficiary and did not file a separate lawsuit regarding mismanagement of trust assets prior to June 10, 1996, you are automatically included as one of the class plaintiffs in this lawsuit, and are represented by counsel.
Q. If I have already filed a lawsuit regarding IIM accounts that is currently pending or being litigated, will this class action lawsuit impact my claim?
Not necessarily. The court's February 4, 1997 order certifying the class action excludes individual trust beneficiaries who filed lawsuits prior to June 10, 1996 on their own behalf for mismanagement of trust funds. However, the court order certifying the class action allows these excluded beneficiaries to join the class action by filing notice of their decision to join the class with the federal District Court for the District of Columbia, and by notifying the attorneys representing the class.
Q. If I once had an IIM account that is now inactive or non-existent, does this suit affect me?
It could. The mismanagement of individual trust funds has gone on for over one hundred years. Thus, many former IIM account holders may well have been victims of past mismanagement. The court order certifying the class action specifically includes all present and past individual Indian trust beneficiaries.
Q. Where does the money managed by the United States come from?
The IIM trust contains funds from numerous sources, including funds distributed per capita to individual tribal members for successful land claims and other judgment awards. The most common source of IIM trust funds, however, is income derived from individual Indian allotments. In many instances, such allotments produce income from farming and grazing leases, timber sales, or oil and gas production.
Q. Who is currently holding these trust funds?
The funds are held in trust by the federal government, specifically by the U.S. Department of Treasury. The funds are pooled into a single account and invested until such time as they are disbursed to the rightful Indian beneficiary.
Q. How much money are we talking about?
The federal government currently holds over $500 million in approximately 500,000 separate IIM accounts. Additionally, more than $400 million flows through these accounts each year. Because the government has failed for over one hundred years to account for Indian trust funds, it remains at this point impossible to estimate with any accuracy the amount by which any particular IIM account has been misstated. However, to give some perspective, we can look to similar mismanagement of tribal trust accounts. A report prepared by the Arthur Andersen accounting firm following a limited effort to reconcile the tribal accounts revealed that $2.4 billion could not be accounted for just for the twenty-year period from 1973 through 1992.
Q. Assuming a court-ordered accounting reveals that the individual Indian trust has been similarly mismanaged by the government, what will this mean for me?
We simply do not know the answer to this question. The court has considerable discretion in formulating fair and appropriate relief, and it is too early to predict how the court might fashion relief for the individual plaintiffs.
Q. Does this lawsuit seek to eliminate the government's role in trust management?
No. This lawsuit seeks to compel the government to carry out its fiduciary duties to individual Indian trust beneficiaries in accordance with the law, including the most fundamental duty of every trustee the duty to account.