Cobell trust case enters critical phase

WASHINGTON – The issues before the court in the Cobell v. Norton class action lawsuit over the Individual Indian Money trust are accounting issues. The plaintiff class has demanded that the government account for deposits and withdrawals for approximately 500,000 accounts over as many as 119 years. The accounts have been established by the federal government for individual Indians over the years.

The accounts receive revenue from the lease of property assets – oil, water, land, timber – that are also held in trust for individual Indians by the government. Billions of dollars flow through the accounts annually, depending on economic factors. The government’s much-criticized management of the property assets is not before the court in Cobell.

Many Indians use their IIM account as a kind of bank, much as a shareholder uses stock dividends: relying on it, with plans to spend it once it comes in. But tales of delays in IIM check issuance are legion. The holders of multiple trust property assets have no way of knowing from lump-sum checks what the separate assets have produced in revenue, masking the lease rates settled on by the government. But again, while the government’s mismanagement of trust assets has generated a world of media attention, the issues before the court in Cobell are issues of accounting for balances in the IIM trust.

The government and its delegate agency, the Department of Interior, must reform the IIM accounting systems for the future and reconcile its accounting from the past. The past or historical accounting cannot be performed in full because of missing records. The plaintiffs have therefore asked the courts for a restatement of the accounts that would restore a considerable sum to Indian beneficiaries – $27.5 billion if the plaintiffs get their way. An independent accounting firm estimated in 2002 that the government owes IIM account holders between $10 and $40 billion for its mismanagement of the accounts. Legislation now before Congress to settle the accounts may weigh in with a lesser figure, if the warning of one of its sponsors that Indians will be disappointed by a legislated restatement of accounts holds true.

For 10 calendar years now, Judge Royce Lamberth of the District of Columbia federal circuit has presided over the case. He has held two Interior secretaries in contempt, ordered a full historical accounting, forbade the statistical accounting methods favored by Interior, ordered the disconnection of Interior computers over security concerns, ordered Interior to notify IIM beneficiaries that the figures recorded in their accounts may not be credible and routinely scolded the government for the conduct of defense attorneys, as well as Interior, for the actions (and inaction) of employees. He has been overturned on appeal on the contempt citations, the order for a historical accounting and the ban on sampling.

On April 11 in appeals court, government attorneys argued their motions to reconnect Interior computers, end the notifications and hold Lamberth accountable for his aggressive language – in other words, the government hopes to remove him from the case because his language in court orders and opinions suggests he cannot be impartial. The government made especially much of a passage from a decision in which Lamberth characterized Interior as “the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago.”

Keith Harper, the Native American Rights Fund attorney who has logged marathon hours on the case, argued that Lamberth’s language is simply suitable to the government’s conduct in the case. Dismissing the judge would send a message of exoneration for Interior, he added.

The court has not established a date for its decision, but Department of Justice attorneys said the government hopes for an urgent disposition of its three motions.

Outside the courtroom, following a march to the nearby National Museum of the American Indian, Three Affiliated Tribes Chairman Tex Hall, an IIM account holder, also brought up practical concerns, among them: How can any other judge get up to speed on the long-running case with its many complexities and almost countless documents?

“It was real difficult,” he said of the hours in court, “and especially the motions to remove a judge. A judge that’s been there for 10 years and understands the Cobell case better than ... [any] other legal person in America perhaps. And so I just think it’s a bad precedent ... Judge Silberman, you know, kept reading over and over the inflammatory remarks [of Lamberth] on not being impartial [the government’s allegation], and then of course Keith Harper got up and I thought did a tremendous job. And being an attorney, and stating they’ve lost several cases themselves, so it is a balance, he does have balanced decisions ... So again in closing I just thought that Keith just did a wonderful job as being an attorney, but also being an American Indian. When he started using the word ‘we’ – you know, ‘we have been wronged for all this time’ – and maybe the judge felt a certain reason because of all of the not complying with the court orders, that he had to use the language that he did.”

He said if the judge is removed from the case, 10 years of work would be for nothing and litigation would have to begin all over again. “And also there’s a piece of legislation ... before Congress. That [Lamberth’s removal] could move the dollar figure [of a legislated settlement] a lot further down. There’s a tremendous amount of stakes here ... But I’m hopeful. I hope and pray. I hope Indian country does the same. This is a serious time for the case … Every Indian in America needs to get up on this, this case, because it’s coming down to the fourth quarter ... fourth quarter of the game.”

At the same gathering before the museum, Victoria Graves, an IIM account holder from Oklahoma, said she hopes to see Lamberth retained on the case. She also hopes Congress will pass a legislated settlement, and she’s not overly particular about the settlement amount. “I think more importantly I want a healthier future, with mutual respect between governments – government to government. Native Americans’ government and the federal government, state and local government ... We need justice for people. We need to set a precedent. We need to make an example of this.”

At a Center for American Progress forum on Cobell, the case’s namesake, lead plaintiff Elouise Cobell, said she supports the legislative settlement effort going forward in Congress. She renewed a call to put Interior’s IIM accounts in temporary receivership. “Drastic mismanagement, as in this case, really needs drastic measures to fix ... I’m a banker. I know how financial institutions are fixed. When there’s a big problem with financial institutions, they bring in somebody from the outside to fix the system and put the other players on the bench until that is fixed. That’s how it’s done in the real world.”

Emphasizing, however, the unreal world of IIM trust accounting, Harper said there is no accounts receivable system in place for the accounts; no way to know if lease payments have been made. It’s an accounts receivable system based on trust, he said with heavy irony.

Hall related one of the heartbreaking cases of delayed trust payments from the IIM trust – an older woman with diabetes wanted to put her IIM check into the purchase of a van with a hydraulic lift to enable her to get around a little, the one thing she wanted most, according to Hall. She waited and waited as diabetes increasingly immobilized her. The long-delayed check arrived, Hall said, but not until after she had passed away.

Harper said one of the best things about a legislated settlement is that all living IIM beneficiaries would see an immediate per capita payment of some amount, meaning no one else would pass away without getting at least some of the money that should have been theirs all along.