 |
Attorney:
John Echohawk
- On June 10, 1996, the Native American Rights Fund (NARF), in
conjunction with other attorneys, filed a class action lawsuit
against the federal government for the government's failure to
properly manage Indian trust assets. The lawsuit was filed on
behalf of all present and past individual Indian trust beneficiaries,
including over 300,000 current Individual Indian Money (IIM) account
holders.
- On February 4, 1997, the U.S. District Court for the District
of Columbia certified the plaintiff class. This means that all
present and past individual Indian trust beneficiaries, including
over 300,000 current IIM account holders, are automatically included
as plaintiffs in this class action lawsuit unless they filed separate
lawsuits for mismanagement prior to June 10, 1996.
- The assets involved in this suit are not government handouts,
but money that belongs to individual Indians. Most of this money
has been generated from the sale or lease of natural resources
on allotted Indian lands. This lawsuit addresses the government's
longstanding failure to account for these individual Indian trust
funds; it does not address the mismanagement of tribal trust funds,
nor does it address the government's mismanagement of the underlying
Indian lands and natural resources.
- In its capacity as trustee, the federal government approves
all leases and sales of natural resources on Indian lands, and
is responsible for collecting payments on behalf of the beneficial
Indian owner of the land. Since the turn of the century, the government
has collected billions of dollars from farming and grazing leases,
timber sales, and oil and gas production on Indian lands B money
which is supposed to have been ultimately disbursed to its rightful
Indian owner. Whether this occurred or not is anyone's guess,
however, because never once in over one hundred years has the
government bothered to account for the Indian trust funds under
its control.
- The suit charges, among other things, that the federal government
has breached its legally-mandated trust responsibility to prudently
manage trust assets belonging to individual Indian trust beneficiaries,
and has consistently refused to fix an accounting system that
it has admitted is fundamentally flawed and completely ineffective
in accounting for these assets. As a result, billions of dollars
belonging to individual Indians remain to this day unaccounted
for.
- The suit has two basic objectives:
- To require the federal government to create and maintain
an adequate system to properly manage and accurately account
for the trust assets of individual Indians.
- To require the federal government to provide a full and
accurate accounting to individual Indian trust beneficiaries,
and to restate IIM account balances accordingly.
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.
- On December 21, 1999, the court issued an opinion ruling that
the United States has breached its trust responsibility to individual
Indian trust beneficiaries, and that the government's belated
trust reform efforts are inadequate to cure the ongoing breach
of trust. Characterizing its ruling as a stunning victory for
the Indian plaintiffs, the court directed the government to take
adequate steps to reform the system, retaining jurisdiction for
a period of at least five years to ensure that reform is carried
through. The court also laid the groundwork for the second phase
of the litigation, which will involve an accounting to the individual
Indian trust beneficiaries.
- In January 2000, the government appealed the district court
ruling, asserting that the court had overstepped its authority
in requiring the government to properly manage and account for
Indian trust funds. Over one year later, on February 23, 2001,
a three-judge panel of the U.S. Court of Appeals for the District
of Columbia Circuit unanimously upheld the lower court ruling,
noting specifically the magnitude of government malfeasance at
issue in the case. The appeals court decision represents yet another
important victory for the Indian plaintiffs and sets the stage
for the second phase of the case the accounting which has not
yet been scheduled for trial.
Answers to Questions Commonly
Asked by Individual Indian Trust Beneficiaries
Q. Why is this suit being brought now? Why not earlier or later?
For years, the federal government has acknowledged the need for
comprehensive reform of its Indian trust fund management system.
Administration after administration has promised to fix the system,
but failed to keep those promises. Congress recommended Indian
trust fund management reform as early as the 1960's, and beginning
in the mid-1980's, issued a series of explicit directives to that
effect. Fed up with the Interior Department's continued disregard
for these repeated recommendations and directives, Congress passed
the American Indian Trust Fund Management Reform Act in 1994.
The Act reaffirmed the government's duty to account for Indian
trust funds, and appointed a Special Trustee to oversee comprehensive
reform of the trust management system. Even after the Act was
passed, however, the government made little or no effort to commence
systematic reform and to account for its management of individual
Indian trust funds. This lawsuit was brought because it was abundantly
clear by June 1996 that the system would remain broken unless
the government was forced to fix it, and that individual Indians
would never be provided with an accounting unless a Federal Judge
ordered it.
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.
|
|
|
