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Monitor appointed to oversee trust reform

WASHINGTON - The court, in the ongoing Cobell vs. Norton American Indian trust funds case, has appointed a monitor to oversee efforts by the federal government to reform its trust management system.

The action was announced as another court-appointed official released an opinion finding Federal Reserve banks and branches responsible for "profoundly troubling" destruction of trust related documents.

Joseph S. Kieffer III was appointed to monitor the government progress and file written reports of his findings over the next year. The order noted that plaintiffs and the government consented to the appointment. Cobell plaintiffs agreed to the appointment in lieu of calling for further contempt charges against the government.

"We think it's a good step forward," said Keith Harper, plaintiffs'. "In large measure it's what we've been seeking since the beginning. However, we are going to take a wait and see posture."

Kieffer holds a bachelor's degree in engineering, a master's degree in system management and a law degree. He was director of litigation for the Manville Personal Injury Settlement Trust, valued at more than $3 billion. Kieffer will monitor government efforts to update accounting systems which contain trust accounts for nearly 500,000 individual American Indians.

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The federal government currently holds approximately $500 million in these accounts. Reportedly there are no records for more than $100 million of those dollars.

Kieffer's appointment followed the February public disclosure of a memo by senior BIA official Dom Nessi saying trust reform efforts are "imploding." Contents of the memo contradicted reports of progress issued by the Interior Department and may have provoked the court.

A court-appointed special master, Alan L. Balaran, already oversees compliance by the federal government to protect and produce documents in the case. In a recent opinion, Balaran said 29 of 37 branch offices in the nationwide Federal Reserve system have reported destruction of financial records material to the case.

The financial records maintained by the Fed reflect investment of as much as $500 million a year of American Indian trust funds in government securities on behalf of individual American Indian trust beneficiaries. In tribal trust accounts overall, $2.4 billion still remains unreconciled. The plaintiffs see this finding as further proof the government is not meeting its legal obligations.

"What has become apparent is that the court has to be continuously involved," said Harper. "It's unfortunate at this late date that the defendants have not taken the steps necessary to ensure that all the documents in their possession are well kept."

The judge's order emphasized that Kieffer's appointment does not diminish Balaran's duties or powers in any way and directed Balaran to familiarize Kieffer "with the defendants' trust obligations and court order responsibilities ... ."