Skip to main content

Interior splits the difference on trust fund scandal

  • Author:
  • Updated:

Indian country is in high alert this week after Department of Interior Secretary Gale Norton's announcement that, in order to tackle the tribal and individual Indian trust funds boondoggle, she will split the BIA in two, establishing a second "Bureau of Indian Trust Assets Management" to oversee the trust reform.

The loss by Interior of billions of dollars worth of American Indian individual and tribal accounts is a scandal of major proportion. It involves federal government fraud, mismanagement and disregard of its responsibility to care for tribal and family revenues from mining, grazing, logging and other royalties from Indian lands and resources.

Ordered to ascertain how much it owes Indians and to fix its accounting system, Interior has failed miserably at both, a federal court said. The case makes the 20th century the second "Century of Dishonor" in the federal government's dealings with American Indians.

The huge, as yet unaccounted, loss of resources to American Indians, would certainly be investigated as fraud in investment banking or any other situation of fiduciary responsibility. It was already a compelling enough case, but now it appears to have become a useful wedge to tear apart the embattled BIA, which has been both boon and bane to tribes.

Norton's decision comes in the heels of serious pressure on her department by U.S. District Judge Royce Lamberth, who has issued and threatened to issue more contempt of court citations aimed at Secretary Gale Norton and more than 40 other present and past federal officials for not adequately resolving the trust funds scandal. The judge was leaning toward appointment of an independent outside receiver to manage the $500 million annual Indian trust, from which over the past century some have estimated $10 billion was incompetently lost.

The focused, investigative approach apparently triggered Interior to countermand with its new plan. But the action has raised serious questions about the genesis of the plan and whether any Indian governments had been consulted. It also appears that Secretary Norton failed to consult with congressional leaders who oversee Indian affairs, a serious misstep that is likely to spawn more intense scrutiny of the proposal, and perhaps more oversight of whatever plan emerges.

Leadership from throughout the country immediately questioned the surprising decision. Many see the move as pure power politics, a bare-knuckled strategy to dismantle a bureaucratic political base that in substantial areas and particularly in recent times has vigorously defended Indian rights. E-mail buzzed through the new moccasin trails and a large sector is quickly organizing a range of lobbying activities.

Scroll to Continue

Read More

Tribes are upset because by this move they stand to lose what may be, when all is said and done, their strongest advocate. Kevin Gover, who held the job under Clinton, railed that splitting the assistant secretary position in two, "is really to destroy his (the assistant secretary's) ability to use his influence for the good of Indian country." "Insulted," "disturbing," "wholesale lack of consultation," "reversal of years of Indian self-determination," are other salient comments from Indian leaders. As one of our editorial advisors asked, "Are we witnessing a new type of stealth termination?"

Most disturbing about the plan is the lack of independence by federal authorities responsible for cleaning up the boondoggle. What should be a fiduciary, independent non-partisan role in resolving this issue now comes down to a political appointment.

The new Bureau of Indian Trust Assets Management will be overseen, at least in transition, by Ross Swimmer, former chief of the Cherokee Nation and head of the BIA under Ronald Reagan. But many, including Dennis Gingold, attorney for the Indian plaintiffs in the trust lawsuit against Interior, say that Swimmer failed at the task while directing the BIA under Reagan.

Swimmer's 1980s focus on privatization as avenue of repair for the problem was later forbidden by Congress, following intense pressure from the tribes. Others point to Swimmer's advocacy of tribal self-government as a more positive indicator. But, again, as the job is politically appointed, Swimmer, and others in the appointment pipeline will be further scrutinized.

In times of uncertainty, sudden moves that can impact a whole segment of society generate great skepticism. Changing long-standing bases of the social contract requires considerable tact.

American Indian tribes, who have so generously contributed to the defense of this country, even after centuries of dispossession, deserve the respect of consultation in matters so dear to heart and survival as the trust responsibility covenant with the United States government.

Look for congressional hearings and potential lawsuits. The National Congress of American Indians (NCAI) and many other organizations are of course on the case. In fact, Deputy Secretary J. Steven Griles and Assistant Secretary Neal McCaleb will address NCAI's conference in Spokane, Wash., this week.

Perhaps this bit of belated consultation will offer a proper opening salvo to the tribes in what promises to be a lengthy and protracted campaign.