Pre-trial hearing limits accounting in Cobell lawsuit

WASHINGTON - Judge James Robertson served notice that accounting for funds in the Individual Indian Money trust will be the keynote in his courtroom as the Cobell trust litigation proceeds.

His predecessor on the bench, Judge Royce Lamberth, supplied daring, indignation and drama before being removed from the case for intemperate language directed against the Interior Department, defendant in the case. At a pre-trial hearing June 18, in advance of the October trial proper on Interior's account-keeping, Robertson expressed his esteem for Lamberth's work on the case, which has entered its 11th year. At one point he remarked that a Lamberth decision in the case may have been reversed on appeal, but not his thinking. ''And his thinking is very well-developed, very profound and very useful. ... I will treat it sort of as preemptively correct.''

That means, at a minimum, that the government will have plenty of explaining to do. Court documents, studies, reviews and investigations have found Interior, the federal delegated agency, along with Interior's own delegate agency, the BIA, at fault in managing the money in the accounts. The money derives mostly from natural resource royalty payments on leases of land held in trust for Indian individuals by the federal government. Estimates of the government's liability have been all over the lot, with the most recent figure of $7 to $9 billion coming from congressionally appointed mediators. But for those who may have missed it, Robertson emphasized several times that the October trial, brought by the plaintiff class of IIM beneficiaries led by Elouise Cobell, is not about liability for damages.

''Look,'' he said, as the government argued against ''elements'' of a damages case in the October trial, ''I have tried to make it very clear that I do not anticipate that the direct result of this trial that we're going to have in October is going to be damages, equitable disgorgement, or a huge pile of money for anyone. That's not to say that that won't happen at some point. But just as the BIA and the Department of the Interior are required to make an accounting, I'm accountable too. And the accounting that I'm trying to make here is an accounting to the public, to Congress, to Indian country, of what is being done and what's not being done [accounting-wise], and what it all amounts to. There's got to be a bottom line to this somewhere. And I see part of a bottom line being a finding, if you will, as to how much of this money has passed through these [IIM] accounts ... How much of this money can be accounted for in terms that accountants would normally consider accounting, and how much can't. Congress needs to know that, the plaintiff class needs to know that and the public needs to know that. ... But you're trying to translate that immediately into a damages award - we're not there yet. But that information is going to be part of the outcome of this trial.''

He began the hearing by announcing his views on the nature and scope of the accounting, a key issue. Briefly put (both sides insisting their interpretation alone fulfills the statutory accounting called for by the 1994 Indian Trust Fund Management Reform Act), the plaintiff class has argued for a full historical accounting, involving the extensive reconstruction of records for all IIM accounts ever held; Interior by contrast has proposed wholesale limitations on the accounting. Robertson acknowledged that ''as a matter of law,'' the scope of the accounting remains unresolved. But while he invited counter-arguments from both attorney teams, his overriding message of the moment (''where I am today'' as he put it) was that unless swayed by disputation - money, the funds actually in the accounts between 1938 and the present, will be the primary subject of the accounting.

Shorn from consideration will be the valuation and mapping of IIM trust allotments (''cadastral survey'' is the technical term for it), ''reconstructing all the Indian lands that are in trust,'' ''direct-pay accounts'' that dispense with Interior's and/or the BIA's middleman roll, money never collected into the accounts, contracting and compacting arrangements and payments prior to legislation of 1938.

Improperly excluded from an accounting under Interior's notions, Robertson added, were funds in accounts closed before 1994, funds in accounts still active after 2000, funds in the accounts of deceased beneficiaries and funds from certain ''escheat'' payments too complex for rehearsal here.

Robertson's bearing, locution and considerateness were the epitome of judicious, in a general sense, but a general decorum didn't keep him from wielding a sword of justice or two over Dennis Gingold, the lead plaintiff attorney. Among several examples, Gingold had only just hit his stride in a reasoned appeal for ''a full accounting, an adequate accounting, one that demonstrates how they [Interior] have conducted themselves in the management of their [Indian] fee lands,'' when Robertson posed a pointed question: ''Let me put it to you straight. Do you want this [historical accounting] done, or do you want to prove that it can't be done?''

Gingold replied that (due to missing records and other factors) Interior ''can't deliver what the [1994] law requires'' in the way of an accounting for IIM monies. ''And that's why additional equitable remedies should be available in this circumstance.''

''That's the next chapter,'' Robertson said.

Gingold responded, ''That is the next chapter. And that's a different problem.''

The current chapter and problem continues at 3 p.m. July 9 in another pre-trial hearing. ''And now we're talking mechanics,'' Robertson said, referring to fine points of the legal process regarding witness lists and scheduling orders. ''Not contents anymore. We're talking mechanics.''