Progress and distress share the stage at Cobell hearing.


By Jerry Reynolds -- Today staff

WASHINGTON - Faint signs of progress on the Cobell v. Kempthorne lawsuit alternated with veiled alarms March 29 to produce an ambiguous hearing record before the Senate Committee on Indian Affairs.

The lawsuit, in its 11th year before the courts, seeks an accounting of the Individual Indian Money trust, as well as a restatement of accounts reflecting losses due to IIM mismanagement by the Interior Department. The administration of President George W. Bush has put forward a framework for settling the accounts that offers $7 billion for an end to IIM and tribal trust claims, aggressive measures against land fractionation and voluntary Indian self-determination within a trust relationship based on technical assistance. In a nutshell, it has seized upon the Cobell settlement as a fulcrum to transform the trust relationship.

The offer has been unceremoniously rejected by lead plaintiff Elouise Cobell, who has called it ''an insult,'' ''a slap in the face,'' ''so absurd,'' ''diabolical'' and worse. Congress will have to approve any settlement that takes place outside the courts.

The progress, such as it was, originated with John Bickerman of Bickerman Dispute Resolution in Washington, one of two mediators appointed by Congress to get the litigants negotiating with one another. ''Unfortunately our efforts were utterly unavailing,'' Bickerman said, repeating previous characterizations of the animosity between Interior and the plaintiffs. He added, ''Nothing has changed.''

But he also chastised both Interior and the plaintiffs for their intransigent positions on a settlement figure. ''The plaintiffs have made inflated statements about the value of the case and did not acknowledge the litigation risks they have if they proceed.''

Interior's arguments for a settlement below $500 million ultimately boil down to ''evidentiary hurdles,'' in essence a lack of evidence to prove the plaintiff case, given the many records that have gone missing over the years.

''Therefore they limit their estimate of liability,'' Bickerman stated, in written testimony for himself and his colleague in mediation, Charles Renfrew. ''Relying on evidentiary barriers should not be the basis for a congressional resolution of these issues if the underlying arguments are valid.

''We believe that plaintiffs' underlying arguments are generally valid. While the Administration understates its exposure, the plaintiffs have unrealistic expectations about the value of their claims if there is no settlement. The plaintiffs' assumptions about how a court is likely to act are unlikely to be realized.''

Bickerman also said the plaintiff assumptions as to historical interest rates on unpaid funds are questionable, and added that a settlement demand of $27.5 billion, presented by the plaintiffs in December 2005, rests on an estimate of funds unpaid to beneficiaries at 20 percent, ''but we have not found any data supporting this rate.''

Bickerman said the mediators believe that a settlement figure between $7 billion and $9 billion ''can be supported by the available data using reasonable economic assumptions. More time and analysis will not yield a result that is more precise or less arbitrary. However, we continue to believe that the $7 billion to $9 billion estimate is reasonable.''

He emphasized that the sum is adequate to settle the IIM lawsuit, not the tribal trust claims and land management issues that are part of the administration's settlement offer.

In questioning after Bickerman's testimony, Sen. Byron Dorgan, D-N.D., the committee chairman, asked Interior Secretary Dirk Kempthorne about the $7 billion to $9 billion estimate of liability. Kempthorne said he would like to see Bickerman's research. To the same question, Cobell said, ''At least he's getting in the ballpark.''

Bickerman's further testimony, in concert with occasional remarks from committee members, made it clear how far the argument for terminating the trust relationship at the root of Cobell has progressed on Capitol Hill. Without a legislative settlement, according to Bickerman and Renfrew, ''The Department of Interior's ability to serve Indian country has been and will continue to be compromised. So much of the policy affecting Indian country seems now to be made through the prism of the Cobell litigation. The beneficial trust relationship between the federal government and Indian country is in jeopardy as a result of this litigation.

''... The Executive Branch has used the litigation to try to argue that the trust responsibility is an anachronism that should be terminated. ...

''Any effort to terminate this trust relationship faces insurmountable political hurdles that will doom a legislative solution. Moreover, trust termination is not an essential or desirable element of a deal. Trust reform can be achieved so that there is no meaningful risk of future litigation.''

Dorgan expressed similar concern for Indian country at large if the Cobell litigation goes on indefinitely. Early in the hearing, he asked if the Department of Justice should be reduced to the ''Department of Liability.''