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CONTENTS
Two Cabinet Officers Cited for Contempt by Federal Judge Two Cabinet Officers Cited for Contempt by Federal Judge "Calling this a trust fund is perhaps the most ironic use of the word trust in history. Time and time again Indians have trusted in the federal government and at each and every stage they have been betrayed. This is just a modern-day manifestation of the betrayal." Keith Harper, NARF Attorney "The court is deeply disappointed that any litigant would fail to obey orders for production of documents, and then conceal and cover-up that disobedience with outright false statements that the court then relied upon. But when that litigant is the federal government, the misconduct is even more troubling. The institutions of our federal government cannot continue to exist if they cannot be trusted. The court here conducted monthly status conferences where plaintiffs complained that the government was not producing the required documents. Because of the court's great respect for the Justice Department, the court repeatedly accepted the government's false statements as true, and brushed aside the plaintiffs' complaints. This two-week contempt trial has certainly proved that the court's trust in the Justice Department was misplaced. The federal government here did not just stub its toe. It abused the rights of the plaintiffs to obtain these trust documents, and it engaged in a shocking pattern of deception of the court. I have never seen more egregious misconduct by the federal government. In my own experience, government lawyers always strived to set the example by following the highest ethical standards that were then a model for the rest of the legal profession, and the Justice Department always took the position that its job was not to win an individual case at all costs, but to see that justice was done. Justice has not been done to these Indian beneficiaries. Moreover, justice delayed is justice denied. The court cannot tolerate more empty promises to these Indian plaintiffs. The time has come for action, and the court will make full use of its powers to ensure that this case gets back on track." So concluded United States District Judge Royce C. Lamberth on February 22, 1999 as the Court found by clear and convincing evidence that Bruce Babbitt, Secretary of the Interior; Robert Rubin, Secretary of the Treasury; and Kevin Gover, Assistant Secretary, Department of the Interior were in civil contempt of the United States District Court for the District of Columbia for their failure to produce court-ordered records in the largest lawsuit ever brought by American Indians against the federal government. The Native American Rights Fund (NARF) and private counsel had filed the class action lawsuit on June 10, 1996, charging that the Bureau of Indian Affairs (BIA) and the Departments of Interior and Treasury breached their fiduciary duties to prudently manage the trust funds for 500,000 Individual Indian Money (IIM) account holders, and has refused to fix an accounting system that the government itself admits is fundamentally flawed and wholly incapable of safely and soundly managing these trust funds. The money in these IIM accounts, although processed by Interior and deposited in the U.S. Treasury, are not government funds or appropriated monies; rather, most of these funds belong to the individual Indians who have earned these monies from the leasing and sales of the natural resources on their allotted land. The monies are proceeds from oil and gas production, grazing and farming leases, coal production and timber sales. Under federal law, the United States act's as trustee and manages these lands and their underlying resources. Other funds are from Indian claims judgments that have been distributed to individual Indians but are managed for them by the United States as trustee. However, government reports show that since the beginning of the federal government's management of individual Indian lands after enactment of the General Allotment Act in 1887, the government has consistently and continually failed to live up to its fiduciary responsibilities. Over the last twenty-five years, report after report from the government's own General Accounting Office, as well as Congress and the Office of Special Trustee, have documented the many longstanding infirmities of the IIM trust management system. These reports indicate, among other things, that much of the documentation and transaction records relating to the IIM Trust have been lost and destroyed, often times intentionally. In addition, these trust funds are managed without the basic controls most institutions provide when managing trust funds. For example, still to this day, there is no comprehensive accounts receivables system, so the trustee -- the federal government -- does not know when money is owed to their trust beneficiaries -- the individual Indian account holders. The former Special Trustee for American Indians, Paul Homan, has gone so far as to say that the current trust management system is the worst that he has ever seen in his twenty years as a banker and bank auditor. Moreover, the problems are so severe, that the head of the Office of Trust Funds Management testified in this case that it was impossible to verify the accuracy of even a single account balance. The government claims that each year approximately $300 million is distributed to Indian beneficiaries through the IIM trust fund system and that the aggregate balance of the IIM Trust at any given time is approximately $500 million. But as admitted by government officials, these numbers have never been verified. Plaintiffs believe that the accounting they seek through this litigation will demonstrate that the trust fund aggregate balance is woefully understated. This suit is intended to require that the government perform such an accounting and then restate the balances of the IIM trust accounts in conformity with the accounting. PriceWaterhouseCoopers (PwC), an accounting firm hired by the plaintiffs to perform the accounting of the IIM Trust Funds, has suggested, as a ballpark estimate, that the United States could owe individual Indians upwards of $10 billion. In order to aid PwC in performing the most accurate accounting possible, the plaintiffs, in November 1996, requested that defendants produce all IIM trust records and documents pertaining to the five named plaintiffs and their predecessors in interest. The government agreed to produce these documents, and, accordingly, on November 27, 1996, Judge Lamberth entered a stipulated order to have these critical trust documents produced. In February 1997, the government reported to the Court that it would produce all documents for the five named plaintiffs by March 3, 1997. It became clear to plaintiffs over the next several months that despite the governments' promises, not all documents had been produced. On May 5, 1998, at plaintiffs request, the Court set a firm deadline on the production of the documents for the five named plaintiffs and their predecessors in interest, ordering the Departments of Interior and Treasury to turn over all such documents by June 30, 1998. However, the government still did not produce the documents that they had promised 15 months earlier.
In that same May 5 order, the Court also required the government to file any dispositive motions by June 30, 1998. The government did so, filing separate motions to dismiss the IIM account holders' claims to "fix the system" and perform an accounting. But on November 5, 1998, Judge Lamberth rejected the government's motions to dismiss this case. In so doing, Judge Lamberth issued a landmark ruling which essentially held that the federal government must adhere to the same standard as any other trustee -- specifically, the common law of trusts. This ruling meant that individual Indian trust beneficiaries will be accorded equal treatment under the law and not permit their trustee, the United States, to treat them under some diluted standard of care. Moreover, the ruling rejected the governments attempts to relegate these trust claims to the "traditional" claims court, but rather would require enforcement in the federal district court, which has much broader jurisdiction to grant appropriate relief. In short, Judge Lamberth ruled that the district court had jurisdiction to hear this case, that the case will be decided under the common law of trusts, and that the Statute of Limitations does not bar claims before 1984, as the government had argued. A mere couple of weeks after this landmark decision, on November 24, 1998, Judge Lamberth raised the issue of the documents for the five named plaintiffs during a scheduling hearing. The government reported once again that not all documents for the five named plaintiffs had been produced and the Court, therefore, requested plaintiffs to file, by December 9, 1998, a motion for the defendants to show cause why the defendants should not be held in contempt for failure to comply with the Court's November 27, 1996 Order. In accordance with the Court's instructions, plaintiffs filed the motion to show cause, which the Court granted and scheduled the contempt trial to commence on January 11, 1999, against the Secretary of the Interior, the Assistant Secretary of the Interior for Indian Affairs, and the Secretary of the Treasury. The contempt trial lasted two weeks. During that time, the Court called two witnesses and the government called sixteen. Because all the government's own witnesses proved that defendants had acted contemptuously , plaintiffs did not call a single witness. The testimony during the contempt trial demonstrated one thing very clearly, as Judge Lamberth would state in his decision: "The way in which the defendants have handled this litigation up to the commencement of the contempt trial is nothing short of a travesty." Unfortunately, the Department of Interior attempted to scapegoat the Office of Special Trustee (OST) -- the government office most responsible for implementing system improvements that have occurred -- for this "travesty." On January 5, 1999, just days before the contempt trial began, Secretary of the Interior Babbitt decided to reorganize OST by way of Secretarial Order 3208, and remove the key OST official responsible for producing documents. Secretary Babbitt's Order gutted the Special Trustees' power and authority that Congress had conferred on his Office through the American Indian Trust Management Reform Act of 1994. Moreover, the Secretary took this action without ever consulting with the Special Trustee, Congress or Tribes prior to the reorganization. In fact, the Special Trustee had no knowledge of Secretarial Order 3208 until Department of Justice lawyers filed the Order with the Court on January 6 as part of the government's defense in the contempt trial. In response to Secretarial Order 3208, the Special Trustee Paul Homan, who had been appointed by President Clinton and confirmed by the Senate, resigned his post in protest. The departure of Mr. Homan, who is a former Comptroller of the Currency and an accomplished banker with an impeccable track-record and nation-wide reputation for re-vitalizing failing financial institutions, has left the Department without any individual with the experience and background to straighten out the trust fund management disaster. Indeed, as a result of the Special Trustee's resignation, the 500,000 current individual Indian trust beneficiaries are in fact and law without a trustee to protect their fundamental property rights and interests. Fortunately, Congress has responded by beginning oversight hearings to investigate the Secretary's handling of this issue and the continuing problem of trust fund management by the Department of the Interior. The Court has ordered the first phase of the trial on fixing the system for June 10, 1999, exactly three years from the original filing of this case.
Preliminary Injunction is Granted on Alaska's English Only Initiative On March 3, 1999, Alaska State Superior Court Judge Fred Torrisi granted a preliminary injunction that enjoined the State of Alaska from the operation and enforcement of Alaska's Official English Initiative, which was passed by state voters in November 1998. The Native American Rights Fund requested a temporary restraining order and preliminary injunction in the lawsuit Alakayak v. State. NARF filed the Alakayak case on February 16th, in the state superior court in Anchorage, on behalf of twenty-seven individual plaintiffs who are seeking an order declaring that English-only Ballot Measure Six is unconstitutional. Heather Kendall-Miller, a staff attorney in the Anchorage office of NARF, explained that NARF brought this lawsuit "to protect the rights of Alaska Native villages to freely choose, shape and control the forms of community self-governance that exist in their local communities." Because Alaska Native villages exercise their powers of community self-governance through numerous structures, both tribal and state, many of the most basic powers of community self-governance in Native villages are exercised through institutions established under state law, such as city governments, school districts, and the various citizen advisory boards that provide local input on state agency decisions. As Ms. Kendall-Miller explained, "Alaska Native villages have a fundamental community right to govern themselves through whatever structures they may choose, which necessarily includes the right to do so in the Native languages of their communities, the only languages many of their citizens can understand." "A number of Alaska Native villages have decided that state law structures of community self-governance do not work for them, and that they should dissolve their city governments and govern themselves solely through tribal structures instead," Eric Johnson, a NAPIL Equal Justice Fellow with the Anchorage NARF office explained: "Other villages have decided not to dissolve their city governments. Whichever way a village chooses to go, the choice as to how a village will govern itself is solely one for that village to make, and neither the State of Alaska nor its voters have any right to demand that local governments in the villages only do business in a language that may be difficult, if not impossible, for many people in these villages to understand." Mr. Johnson also noted that even in those villages that have dissolved their city governments, education continues to be provided through state school districts, and that "the ability of a village to make important community decisions on the education of their children necessarily requires the freedom to discuss these decisions in the first language of the community." Ms. Kendall-Miller explained that a temporary restraining order and preliminary injunction had become necessary because a number of the Alakayak plaintiffs had meetings of their city governments or school functions scheduled for after March 4th, the date the law would have gone into effect. She added that the potential for state enforcement of the English-only law against these plaintiffs after that date "threatened the most basic sovereign rights of these communities to meaningful self-government." Eighteen of the twenty-seven plaintiffs in the Alakayak case come from the Yup'ik villages of Quinhagak, Manokotak, Kasigluk, Chefornak and Atmautluak, five villages where the Yup'ik language is widely used in virtually all aspects of community self-governance. Other plaintiffs include five Alaska Natives residing in the regional centers of Barrow and Bethel. Plaintiffs include local governmental officials, educators, and members of the public from villages that will be impacted by this law. The Alakayak lawsuit claims that Alaska's English-only law is unconstitutional because it violates constitutional rights to free speech, equal protection, and due process. NARF attorneys are joined by attorneys from the Alaska Civil Liberties Union and the North Slope Borough Law Department. The "English Only" initiative was written in very broad terms, and would have a major impact upon Alaska Natives, if it were to go into effect. Unlike most other official English measures that are primarily symbolic, this measure prohibits the use of any language except English in virtually all governmental functions and actions. The measure applies to "the legislative and executive branches of the State of Alaska and all political subdivisions, including all departments, agencies, divisions and instrumentalities of the State, the University of Alaska, all public authorities and corporations, all local governments and departments, agencies, divisions, and instrumentalities of local governments, and all government officers and employees." The measure also contains a private cause of action that allows any person to bring suit against a government entity to enforce the provisions of the act. Thus, a non-Native resident of Anchorage would be able to bring an enforcement action to require a Yupik-speaking community in Southwest Alaska, to force it to conduct its city business in English, and English only. The impact of this statute would have been direct and immediate, had it gone into effect on March 4th. For example, of the 226 Native villages in Alaska, over 100 have formed municipal governments. It is very common for city officials to conduct business in Yupik, Inupiat, or Athabaskan languages. If this initiative becomes law, they will no longer be able to do so. And, if they do, they will be law breakers and potentially subject to suit. Moreover, those city officials who do not speak English as a first language (and there are many in rural Alaska), will effectively be excluded from participating in local government. The breadth of this measure makes it all the more unconstitutional, since it violates both free speech and the constitutional right to participate in and have access to government. Because the measure extends to all state employees, it would prohibit an Inupiat school teacher and a monolingual Inupiat-speaking parent from speaking in Inupiat about a child's education. It would also preclude a discussion in a language other than English between public employees and citizens seeking unemployment or worker's compensation benefits, or access to fair housing or public assistance, or information with respect to child support, child welfare, foster care placement, Indian Child Welfare Act matters, or to redress violations of those rights. In short, the measure would have a chilling effect on all Native languages, which is why NARF has filed this lawsuit, and secured this preliminary injunction to keep the law from taking effect. Alaskans for a Common Language, Inc. and U.S. English, Inc. have moved to intervene as parties defendant. The Alakayak plaintiffs filed a motion opposing intervention on March 19, 1999, on the basis that proposed intervenors' interests are adequately represented by the State and that their views can be effectively presented to the Court as amici curiae. On March 8, 1999, the Court entered an order setting forth a briefing schedule on the merits. Plaintiffs will file their motion for summary judgment on May 28th and the State has until July 9, 1999 to file its opposition. Oral argument on the motions is set for September 1, 1999, in Dillingham, Alaska. U.S. Supreme Court Rules Against Arizona Tribes
"This Ruling leaves the tribes in the same inequitable situation
On March 2, 1999, Justice Clarence Thomas, writing for a unanimous Supreme Court, held in Arizona Department of Revenue v. Blaze Construction Co. that Arizona could tax a private company's proceeds from contracts with the Federal government even where those contracts were exclusively for the building of roads on Indian reservations. The decision laid to rest a conflict in lower court law and prescribed a bright-line rule in favor of state taxation regardless of the location of the contract activity or the impact of the tax on Tribes. The contractor in this case was Blaze Construction Co. (Blaze), a wholly Indian-owned company incorporated under the laws of the Blackfeet Tribe of Montana. Blaze contracted with the Bureau of Indian Affairs to construct and repair reservation roads for six Indian tribes within Arizona. The work was all performed within reservation boundaries and the roads provided access to Indian schools, homes, and local government centers. Arizona imposed a tax on this activity on the theory that a Supreme Court case had already established the rights of states to tax the activities of federal contractors. The United States agreed with the State and filed a brief amicus curiae in support of state taxing authority in this case. In the end, the Supreme Court agreed as well. Blaze, though an Indian-owned company, conceded at the outset that it was the equivalent of a non-Indian. Based on this concession, the Court found that the case boiled down to the narrow question of the state's ability to tax non-Indian federal contractors. Framing the question in this way, the Court held that Blaze was indeed governed by the bright-line rule articulated in its earlier case, United States v. New Mexico, 455 U.S. 720 (1982), which authorized state taxation of federal contractors, and the Court was unwilling to carve out an exception to that firm rule even where the contract activity took place entirely within Indian reservations. In its brief amicus curiae, NARF supported Blaze's tax exemption, arguing that the fact that the activity took place in Indian country called for the Court to examine the impact of the tax on tribes and tribal sovereignty to determine the authority of states to tax within Indian country. As Blaze pointed out, one of the greatest impacts the tax will have is that it will reduce the number of roads that will be built, because, instead of going toward road-building, millions of dollars will instead be going to fill state coffers. Indeed, as indicated by a March 3rd Arizona Republic newspaper article, "the decision comes at a time when the federal government is preparing to award $1.6 billion in contracts for highway work on the nation's reservations. Based on Arizona's 5 percent transaction privilege tax, the contracts could generate $80 million in potential revenue for all the states." Unfortunately, however, the Court did not look to tribal impacts, choosing instead to extend its prior bright-line general rule pertaining to non-Indian contractors, thus leaving states free to tax private firms who contract with federal agencies to provide services to Tribes on Indian reservations.
Keith Harper joined the Native American Rights Fund (NARF) as a staff attorney in September, 1995. Keith, a member of the Cherokee Nation of Oklahoma, received a B.A. in sociology and psychology from the University of California, Berkeley, and a J.D. from New York University (NYU) School of Law in 1993. While at NYU, he was a Root-Tilden-Snow Scholar, a Fellow at the Center for International Studies, and Articles and Notes Editor for the Journal of International Law & Politics. In addition, Keith served as Chair of the Native American Law Students Association (NALSA) and Area Coordinator on the National NALSA Board. Directly following law school, Keith became an associate at Davis, Polk & Wardwell and then served as law clerk to the Honorable Lawrence W. Pierce of the United States Court of Appeals, Second Circuit. Subsequent to the judicial clerkship, Keith was granted a Skadden Arps Fellowship to join NARF where he remains a senior staff attorney today. Among other cases, Keith represents 500,000 individual Indians in a class action suit against the United States for the government's failure to properly manage these individual Indians' trust funds. Keith also currently serves as President-Elect of the Native American Bar Association for the District of Columbia, and teaches "Federal Indian Law" at Catholic University Columbus School of Law (Fall Semester) and American University Washington College of Law (Spring Semester). In 1994, Keith published a note entitled "Does the United Nations Security Council have the Competence to Act as Court and Legislature," 27 NYU J. INT'L L. & POL. 103.
NARF RESOURCES AND PUBLICATIONS The National Indian Law Library For the modern-day Indian, information is priceless in helping their fight to keep tribal homelands intact and traditional tribal ways alive. The National Indian Law Library has been providing Indian tribes and Indian law attorneys with a wealth of Indian law materials for the past 27 years. The materials are documents ranging from legal pleadings written in vital Indian law cases to a collection of Tribal codes. The National Indian Law Library began as a special library project of the Native American Rights Fund. It is designed to serve as a clearinghouse for materials on American Indian Law for tribes, private and tribal attorneys, legal service programs, law firms, federal and state governments and agencies, and for students. Essentially, it was intended to carry out one of the Native American Rights Fund's priorities, the systematic development of Indian law. The National Indian Law Library has one of the largest collection of Indian law materials in the nation. Its mission is to continue to develop and make accessible a unique and valuable collection of information and to assist people with their Indian law research needs. Special emphasis is placed on helping individuals and organizations who are working on behalf of Native Americans and have the potential to positively influence their lives. The library serves its patrons by providing reference and basic research assistance and by locating and delivering information. Please contact David Selden at (303) 447-8760 or e-mail dselden@narf.org for assistance. Native American Rights Fund and National Indian Law Library Publications For Sale: In the future, the National Indian Law Library will be offering NARF and NILL produced publications for sale and will discontinue re-sale of other Indian law publications. As a substitute, NILL will provide an up-to-date annotated list of selected Indian law books with simple ordering instructions. We believe that our patrons will benefit from quicker service and better prices. Look for the annotated list to appear on this web site this Summer. For a limited time we are offering discounts on books that we still have in stock. Please call Mireille Martinez at (303) 447-8760 for a list of titles and prices. NARF LEGAL REVIEWS HOLDINGS LIST 1972 - 1998*
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