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Campbell, Inouye: Congressional mediation of Cobell is at hand

WASHINGTON - The Senate Committee on Indian Affairs took a major step July 30 toward mediating the class action lawsuit of Individual Indian Monies accountholders against the Interior Department.

By the time a hearing to explore settlement mechanisms had ended, Sens. Ben Nighthorse Campbell, R-Colo., and Daniel K. Inouye, D-Hawaii, committee co-chairmen, were publicly discussing the procedure for appointment of a mediator by the committee. Campbell's lead counsel on the committee, Paul Moorehead, said afterward "Campbell is ready to go," and added that he may be prepared to do so in an expedited fashion pending further discussion with tribal leaders and other stakeholders in the case.

Inouye himself confirmed that "We're looking at a couple of names" as possible mediators, again pending further discussions during the August congressional recess. With a characteristic quick nod and quiet smile, he acknowledged an optimism in the case that hadn't seemed likely from one who began the hearing with a statement of what has become obvious to all sides during the 108th Congress: "For too long, this issue has cast a cloud over Indian country."

Prior to the hearing, that cloud seemed nowhere close to lifting. After eight years of litigation, a major decision on a portion of the sprawling case, known as Cobell for short after lead plaintiff Elouise Cobell, is due soon from U.S. District Court Judge Royce C. Lamberth. But it is pretty much foregone that any decision will be appealed - great and regular gusts of invective, among many other features in the case, imply as much. And the lawsuit was only filed after more than a decade of reform agitation in Congress. And the plaintiff class and defendant attorneys are fantastically, one dares say laughably, far apart on compensation estimates due to the plaintiff class - some few millions according to Interior, many billions according to plaintiff attorneys (or in the perhaps also not impartial estimate of James Cason, Interior's associate deputy secretary, 350 years worth of all congressional appropriations). And Interior's internal reform of its trust management systems is recognizable folly, a classic exercise in what private sector analysts might term "side issue specialization" - hyperactivity on all manner of trivialities so as to avoid reckoning action on the essentials. And congressional appropriations that should fund services for Indians are being channeled into financing Interior's ineffectual reform initiatives - or so the standing accusation of numerous tribal leaders would have it.

Etc., etc.

John Berrey, chairman of the Quapaw Tribal Business Committee, defined the emergent perspective on all this in his remarks July 30: "The money that's appropriated in reality is not getting to the people. The burden of this case is now on the people [Indian trust beneficiaries]. And my people are really suffering."

Or in the adept formulation of Harold Frazier, chairman of the Cheyenne River Sioux Tribe: the trust accounts cannot be settled as long as the Cobell litigation remains unsettled.

This was one point of consensus for all panelists, with the possible exception of John Echohawk, executive director of Native American Rights Fund, co-attorney group for the plaintiff class. Echohawk welcomed congressional involvement but urged that the litigation go forward as a way to maintain pressure on the Interior Department. He added that a mediation process shouldn't permit "re-litigation" of matters already settled in court rulings.

Another point of cross-panel consensus was to welcome congressional involvement in settling the case. A third, again with the possible exception of Echohawk, was to applaud the Cobell litigation for pushing the trust funds management reform effort this far, implicitly to be eclipsed in future by congressional intervention.

A fourth and final point of consensus could not have been predicted, yet with it came a glimpse of blue sky that led Campbell to speak of his encouragement and Inouye of his enlightenment - significant language from two senators who have more or less seen it all.

The something new under the sun came from Donald Gray, an attorney with Nixon Peabody LLP in San Francisco who specializes in financial "hardship" cases. Gray has testified before the committee on three previous occasions. Tribes and Interior have asked him to consult on trust reform, he said, but declined in order to maintain an independent thought process as he kept abreast of the countless documents generated in Cobell.

Gray acknowledged a crucial assist from Tex Hall, president of the National Congress of American Indians and chairman of Three Affiliated Tribes, in his recent testimony before the House of Representatives on proposed guiding principles for settling trust accounts; and a still more crucial assist from plaintiff attorneys in their February filing of expert reports with the Lamberth court - reports he described as "perhaps the most helpful aspect of seven long years of litigation," because they demonstrated the feasibility of holistic, multi-faceted procedures for reconstructing trust accounts to an acceptable degree of accuracy.

Interior's lack of complete accounting records for the IIM and tribal trust accounts has been an insurmountable obstacle to progress in the case to date.

These recent developments, along with the evolving climate of opinion on Cobell and the many faltering reform efforts of both the Interior Department and the court, have produced a "paradigm shift" compared with the occasions of his previous testimony, Gray said.

"Rhetoric and litigation positions aside, anyone who has ever been involved in a true paradigm shift, a real revolution in how participants view the changing standards and procedures required as a result of scandalous revelations of error and wrongdoing in both business and public settings, whether Enron or Indian trust, cannot but be impressed with the broadening of thought and the expansion of knowledge that takes place when long festering problems come to light, and people of courage attempt to remedy the problems.

"Sometimes such subtle progress is lost in the vitriol of adversary proceedings. It should not be. These subtle but lasting changes in hearts and minds establish the environment and create the platform for true reform.

"Four years ago, although I naively wanted to use my more than a quarter century of trust fix experience ? by immediately plunging into the data and external information and methods that would reach a real solution, the time was not right. The foundation of knowledge and willingness to look at things in a different way had not been established."

But now Gray believes it has been established, and he urged the committee to establish "a holistic, comprehensive fix effort; employing any and all methodologies that can truly help reconstruct what is owed to the IIM beneficiaries. And Congress should act, in coordination with the Cobell court to do this immediately. We can clean up existing data until we are all old and gray, place the information in neat but isolated silos, ignore what those extant but imperfect records tell us about the past, ignore independent asset data regarding actual trust assets, or helpful data on similarly situated assets, for which no records exist, and squabble about what an accounting means. Or we can get to the task of reconstructing what is owed to the IIM beneficiaries."

The reconstruction can be accomplished through methodologies that prove acceptable elsewhere, Gray said - asset-based evidence, comparison modeling, examining the entire body of existing records (however imperfect) for income outflow trends, the comprehensive data- and methodology-unlimited reconstruction process known as "scrubbing" - each can be deployed in good faith by independent, unconflicted experts to reach the goal of truth, Gray said.

He recommended a team of independent, unconflicted experts under an independent mediator. The effort would be monumental, he added. But he estimated that a reconstruction acceptable to all might be completed within two years, at a cost in the multiple millions of dollars, if Congress acts.

"For the love of heaven, from this point on get experts in and get information on the table. No more pre-structuring. No more reorganization."