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Deadline looms for trust fund claims

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WASHINGTON -- Billions of dollars will potentially be lost if tribes do not
file claims with the Department of Interior to negotiate settlements that
will recoup lost revenues owed to the tribes for leases, royalties and sale
of property.

Any tribal claims are subject to a statute of limitations established by
Congress in 1999 and which runs out Dec. 31. The revenues owed the tribes
come from non-reconcilable funds that were to have been paid to tribes for
royalties and leases, sale of land and other negotiations handled by the
Interior as part of the department's fiduciary responsibility over the past

So far only three or four tribes have reached a settlement with the
government, nine tribes have filed and most all of the 562 federally
recognized tribes may have claims to file, attorneys who are working the
claims assert.

The statute of limitations was established based on the Osage Nation v.
United States case and many tribes may not be aware of the limitations,
attorneys claim.

"If they [tribes] do not file, they could lose out on collecting past lease
money; and, just as important, they could lose the right to litigate for
treaty lands that have been taken," stated Gary Frischer, strategic legal
consultant for a group of attorneys working on claims.

"This could be, if the reservations do not file a claim, the greatest land
grab in 150 years," he added.

The accounting firm of Arthur Andersen LLP conducted an audit of the trust
funds at the request of the federal government and determined that
mismanagement by Interior was involved and that tribes had not received the
payments due them. Arthur Andersen sent reconciliation reports to the
tribes, which were encouraged by Congress to negotiate settlements with the
government rather than file in federal court. The tribes were given five
years after the notice from Andersen to negotiate.

Sens. John McCain, R-Ariz., and Byron Dorgan, D-N.D., introduced
legislation in October that would extend the statute of limitations date
for another five years; however, that bill has not been taken up by the
full Senate.

A house companion bill introduced by Reps. Richard Pombo, R-Calif. and Nick
Rahall, D-W.Va., would also extend the deadline to negotiate a settlement
until Dec. 31, 2011. The Senate Committee on Indian Affairs and the House
Resources Committee approved the legislation, but has not been taken up on
the floor of either house.

Congress in 1993 required Interior to pay interest on trust funds held for
tribes and to demonstrate new approaches for the management of "Indian
trust funds; to clarify the trust responsibility of the United States with
respect to Indians," said written comments from the Senate Committee on
Indian Affairs that year.

A year later, Congress, with an amended reform act, created the office of
special trustee. Also that year, the Cobell v. Norton case began. (The
Cobell litigation is unrelated to the tribal trust fund issue.)

The Osage case was based on the fact that the federal government mismanaged
its fiduciary responsibility to the Osage Nation of Oklahoma. Congress
passed the Osage Allotment Act in 1906, which directed the federal
government to place all money due, or funds that may become or may be found
to be due, in trust. Those monies were royalties from oil, gas, coal and
other mineral leases, and were to be held for the tribe and individual
members of the Osage Nation.

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The Osage Nation argued that the federal government held funds in excess of
$8 million in escrow for almost 10 years, prior to payment and transfer of
title to the lands from 1873 to 1883. In court, the Osage argued that the
federal government "exercised involuntary, pervasive management and
complete control over the mineral assets of the Osage -- but has never
rendered an accounting."

In 1996 Arthur Andersen attempted to reconcile the trust fund accounts from
between July 1, 1972 and September 1992. Its report shows that the federal
government did not comply with the federal law that required reconciliation
of the accounts.

The federal government's attempt to have the case dismissed failed. It also
asked the court to impose a statute of limitations on claims for funds
before 1984. According to Federal Claims Court regulations, the statute of
limitations is six years, a term set by Congress. However, according to the
many Appropriations Acts (the first of which was passed in 1908), a
reconciliation of the due funds held for the tribe is the key to
determining dates for statutes of limitations.

As it has been determined that all tribes received a reconciliation in
1999, the statute of limitations date will be Dec. 31.

The Arthur Andersen report was the first reconciliation completed by
Interior that complied with the standards set forth in the many
Appropriations Acts.

The Osage case leaves open the chance for tribes to file claims for past
revenues not reconciled based on technicalities in the Indian Claims
Commission Act. The act set the time limit at 1951; however, Hewitt wrote
that because the Osage argued that revenue was lost, funds mismanaged and
no reconciliation occurred until December 1999, the statute of limitations
set by the Indian Claims Commission was not applicable.

The requirements of the reconciliation reports established by Congress
state that as full and complete an accounting as possible must be submitted
at the earliest possible date.

"The court finds that the language 'to the earliest possible date' to be
further indication of the intent of Congress to allow Indian tribes to file
tribal trust fund mismanagement claims within six years after an accounting
of the trust fund is furnished to the tribe no matter when the
mismanagement occurred," Hewitt wrote.

Tribes are now faced with the possible termination of their right to file
claims by the end of the year unless the two pending bills are enacted in

Tribes are encouraged to meet with their tribal attorneys to determine if
they have a claim and to file. Also, a consortium of attorneys who are
experienced in federal Indian law and who have a track record in these
types of land claims has been formed.

Attorney Mario Gonzalez, Oglala, in Rapid City, S.D., heads the consortium.
He is joined by attorneys Gregory Yates from South Dakota and California,
Maurice Johnson in Nebraska, Benjamin Thompson in Minnesota and Jerry
Guenther in Montana.

Tribal officials wishing to contact any of these attorneys can call (800)
404-4658 or e-mail