WASHINGTON – In 1982, Rebecca Adamson walked across a parking lot in Mount Pleasant, Mich., with Arnold J. Sowmick, the late, great leader of the Saginaw Chippewa. Then in her second year of a 25-year tenure as founder and president of First Nations Development Institute, Adamson had been called to Michigan to assess the potential for expanding the tribe’s wood pallet production business into a pre-fabricated housing construction operation.
She saw problems with the plan and recommended against it. As she left, Sowmick told her that what he really wanted was to invest the tribe’s forthcoming judgment award. Adamson, Eastern Cherokee, said that could be done. Sowmick said the BIA wouldn’t allow it, even though he was pretty sure the tribe could do better investing its money than the BIA had ever done. Adamson said she was pretty sure it could be done all the same, and proceeded to raise funding from the Charles Stewart Mott Foundation to do it.
In researching the trust monies held for the Saginaw Chippewa by the BIA, Adamson didn’t set out to work directly on Individual Indian Money accounts. But her research took her there, and the BIA track record on the IIM trust and tribal trust funds strengthened her hopes for the tribe.
At a council meeting, she reported back to the tribe as follows: “I have good news and bad news. The good news is, you can do better than the BIA at investing your trust funds. The bad news is, so could a chimpanzee.”
Twenty-six years later, U.S. District Judge James Robertson has ruled that IIM account holders deserve $455.6 million for 121 years of IIM trust mismanagement – less than Congress and the federal government have spent over the past decades trying to fix an IIM management system the existence of which Robertson has questioned, and to deliver an accounting of the IIM trust Robertson has ruled impossible. The lawsuit that led to the Aug. 7 opinion is Cobell v. Kempthorne et al., after Blackfeet lead plaintiff Elouise Cobell and current Interior Department Secretary Dirk Kempthorne. The BIA is a sub-agency of Interior.
Philip Baker-Shenk, a lobbyist of wide-ranging legislative experience in Washington now with the firm of Holland & Knight, also goes back to the early days of the generational effort to reform IIM trust management. His memory is of the late Mike Petersen, a trusted non-Indian who served the Red Lake Band of Chippewa as the equivalent of a chief financial officer. He wanted a tribal trust accounting in 1986, when Baker-Shenk met him. “That was one of his crusades. ... He sniffed out some irregularities in the reports the BIA was giving the tribe, scouted it out, assembled the data and understood what the financial reports should show. ... It began with some simple, pointed questions from tribes that didn’t elicit the right answers, and then tribes began to talk with one another.”
Eventually Mike Synar, the late Oklahoma congressman who died at 45 of a rare aggressive brain cancer, got involved and carried the fight for reform to the IIM trust accounts.
Jim Parris, Cherokee, has spent a career working on IIM and tribal trust accounts, first within the top ranks of Interior’s Office of Trust Funds Management and now as a sole practitioner CPA devoted to tribal trust management. He tried to find a silver lining in Robertson’s decision, suspecting the judge awarded as much in restitution as he felt he could without getting overturned on appeal, in view of the lack of robust evidence for IIM losses in the threadbare documentary record. “It really is a disappointment,” Parris said of the award figure. “We’re all upset that it wasn’t more, but it’s nothing that cannot be cured by filing in the Court of Federal Claims.” District court judges can’t speculate beyond the evidence or consider the assets that generate IIM revenue from lease royalties – oil, land, timber, gas – much less investment losses or interest on damages, Parris explained.
“Somebody needs to pick up the traces and take it to Federal Claims Court and really get after it.”
W. Ron Allen, chairman of the Jamestown S’Klallam Tribe in Washington state and treasurer of the National Congress of American Indians, said he was stunned at the court’s ruling. “I was surprised at how low the court ruled was appropriate restitution.” But in view of the toll the case has taken on the BIA, which was disconnected from the Internet for years over court concern for the security of IIM account information, he hopes the plaintiffs “close this deal and move on. ... I think there’s a general feeling that Elouise and the Cobell case have done their job and now we move on.”
The agenda now should be for Congress to continue riding herd on the BIA and its parent federal department, Interior, as they continue to fix the trust accounting systems, fold the Office of the Special Trustee back into the BIA, and appropriate more funding for tribes to manage IIM and tribal trust funds. “There’s absolutely no reason tribes can’t do that as well as the bureau,” Allen said.
Tex Hall, chairman of the Inter-Tribal Economic Alliance, considers all the IIM reform efforts of Indians and others over the years significant. The Three Affiliated Tribes’ former chairman remembers afternoons from his own youth, waiting in a car as his parents visited the BIA agency in New Town, N.D., asking about their IIM accounts. They usually returned impatient and out of sorts, sometimes with an old brown envelope and a check inside but never any specific knowledge of what it was for.
He called Robertson’s ruling “unbelievably wrong,” “a limited, flawed decision” and “a slap in the face.”
“And it was just a huge, huge misunderstanding of the magnitude of this issue. Without that understanding, he just pushed for a quick decision. ... It [IIM] is a broken accounting system, a broken [land] appraisal system, a broken leasing system, a broken probate system. There is no way any account holder should accept that [$455.6 million]. It just did not do any justice to the claims that are there. I know too much about this system to accept it.”
Hall isn’t worried about the possibility the award could be reduced on appeal. “For one account holder here in North Dakota, $50 [per IIM account holder] is nothing compared with the magnitude of the problem. So I’m not worried about a reduction. It’s still wrong, it’s still unjust. So, $50 or $25, it’s not going to matter to any Indian.”
He called on IIM account holders to make a point by refusing any distribution of the award.