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Trust funds litigation finds a new path

WASHINGTON - As a court trial to determine a method of settling accounts in the Indian trust fund litigation closed out July 8, a Congressional settlement attempt crept its way across the visibility horizon July 14.

U.S. District Court Judge Royce C. Lamberth has a momentous decision to deliver following the class action trial between Individual Indian Monies accountholders and the Interior Department of the federal government. That just-closed 44-day phase of a much larger trial aims to establish only a method of settling accounts before the court process moves on to debating the amounts due to IIM accountholders. At stake ultimately are millions of dollars, according to the government's figures; or billions, according to the plaintiff class.

Even the government, obligated to manage the funds in the accounts through the Interior Department and BIA, admits that poor record-keeping has plagued every attempt to reconcile IIM accounts and transactions. Many others, from Congress to tribes, individual Indians and national Native organizations, have been far more scathing in their assessments of federal trust funds management and reform efforts. Lamberth has almost routinely lambasted the Interior and its attorneys for their conduct of the case and its myriad subsidiary features.

A judicial assistant in Lamberth's chambers said the judge is at work on the documentary materials at issue in the trial, but has not set a date for his decision.

To all appearances, Congress has made its decision; it will move forward with a legislated settlement of the accounts, as forewarned in a letter from the Senate Indian Affairs Committee last April. Until now, the Senate has been content to criticize mounting costs in the case, and the presumed deflection of funding from Indian-specific federal services as a result. The House of Representatives has largely stayed on the sidelines of the trust funds trial and management reform effort.

But now in the House, an attempt to impose a voluntary settlement on IIM accountholders has galvanized action in that chamber as well.

The settlement scheme itself has been scuttled, according to Doug Heye, public relations officer for Richard Pombo, R-Calif., chairman of the House Resources Committee. "He's reached agreement to take settlement language out of the bill," Heye said.

The other party to that agreement is Charles Taylor, R-N.C, chairman of the Subcommittee on Interior.

But if Taylor has lost in the attempt to force a settlement, he may have been playing for the larger stakes of forcing others to settle the IIM case once for all.

The settlement attempt took the form of a "rider," usually an obscure or controversial proposal tacked onto a larger, more passable piece of legislation, in this case the Interior appropriations bill. Such so-called spending bills are a popular host for riders because spending bills - the measures that keep government running - are sure to become law in one form or another. The $19.6 billion spending bill cleared the House Subcommittee on Interior - the one that details out how Interior will spend its congressional appropriation - on June 18 with the rider on trust funds attached.

On rare occasions, a rider can quietly turn a little-known, previously rejected, or otherwise controversial measure into law. More often, riders are quickly rejected by an authorizing committee - as has occurred here - or they become the subject of floor debate that may threaten to stall or kill a larger piece of legislation.

Taylor's latest rider on trust funds fared no better than a similar attempt from the same subcommittee last year. This session's rider proposed voluntary settlement for those account holders who wished it, as well as a mechanism for the Interior Department to force settlement by a sampling process for those accounts not settled after a set term. The settlement process as contemplated in the rider would have taken five years.

But Pombo promptly called a hearing for July 9 and lined up a number of Indian leaders to excoriate the rider. These included Elouise Cobell, the Blackfoot lead plaintiff in the IIM litigation and a longtime campaigner for reform of trust funds management. Also offering testimony were John Berrey, chairman of the Quapaw Tribe in Oklahoma, and the leadership from a full slate of national Native organizations - InterTribal Monitoring Association, National Congress of American Indians, Council of Energy Resource Tribes, and the Native American Rights Fund (which represents the Cobell class action plaintiffs in the court trial). All agreed on the need to move toward settling the trust funds litigation; and all agreed that Taylor's rider wasn't the way to go about it.

The Native leaders were not alone in rallying against the rider. Paul Moorehead, lead counsel to Sen. Ben Nighthorse Campbell, R-Colo., on the Senate Committee on Indian Affairs that Campbell co-chairs, called the rider "middle of the night stuff" and asked rhetorically "Who thinks this is a good idea?" - to pull the plug on seven years of litigation in the IIM case with a rider on a spending bill.

By July 14, the chain reaction against the rider had reached the point that Pombo could announce its demise, with Taylor concurring. Technically this demise will take the form of simply deleting the offensive rider, known as Section 137, from the Interior appropriations bill. The technical reason is that House Resources under Pombo is the so-called "committee of jurisdiction" in the House, again with Taylor's all-important concurrence.

"The Appropriations Committee was correct in highlighting the need to resolve the litigation and the mismanagement of the trust funds," Pombo said. "And I appreciate Chairman Taylor's willingness to revisit this issue so the Resources Committee can complete a more exhaustive approach to finding an equitable solution to this problem."

Pombo also touched on one of the reasons recently given in Congress to settle the IIM case. "This situation is having an increasingly negative impact on the availability of resources for critical needs such as roads, schools, and health care facilities in Indian country. I hope that with close consultation, this government and tribal governments can reach an agreeable solution together and prevent this from ever happening again."

So far so good, but regular observers of the IIM litigation process may want to note that while the rider has taken heavy invective, it has also served to line up the committees that would have to authorize any congressional settlement. Senate Committee on Indian Affairs co-chairs Campbell and Sen. Daniel Inouye, D-Hawaii, months ago put their cards on the table, stating that Congress would assert "gradual pressure" to resolve the IIM litigation. Now, Pombo's Resources Committee, the authorizing committee in the House, has come to the same table in the same frame of mind.

Moorehead of Campbell's staff said the Section 137 rider was not a deliberate part of that pressure. That perhaps opens the question of whether Taylor, a 13-year veteran of the federal legislative trenches on top of eight years at the state level in North Carolina, would offer such an unpopular measure simply as a sacrifice of his own credibility ? but in any case, a chorus of approval from all appropriate quarters met Pombo's July 14 announcement scuttling Section 137.

Dan Dubray, the Interior Department's director of communications to the assistant secretary for Indian affairs, said the department is "very pleased" with Pombo's assumption of the issue, and noted that it's also helpful to have his committee aligned with the Senate Committee on Indian Affairs. Dubray added that Jim Cason, associate deputy secretary at Interior, is on record that "Congress is where this begins and ends."

Keith Harper, an attorney for Native American Rights Fund who has figured prominently in the litigation against the government, also welcomed the Pombo announcement, and agreed that a certain alignment of authorizing committees in the House and Senate has come of it. Sens. Campbell and Inouye, Reps. Pombo and Taylor - "all are at the table." Harper too added that Congress is the place to settle the IIM accounts, and referenced the long reform effort culminating in the 1994 Indian Trust Management Reform Act. Even then reform bogged down, with the IIM class action lawsuit ensuing in 1996. "This suit was in and of itself a last resort," Harper said.

Moorehead had much the same reaction as concerns committee involvement. As concerns any prospective settlement, he said Campbell's position is well-known: get the best minds on the issue working together in a room to produce results for Indian accountholders, rather than continue with a legal procedure that largely benefits accountants, attorneys and consultants.

Harper said the class action lawsuit will proceed because only the pressure it has brought to bear on Interior has forced the IIM case on Congress.

He declined to anticipate Lamberth's decision, but said the plaintiff class and legal team has great confidence in the court's ability and willingness to weigh the evidence in light of guiding law.

The Senate Committee on Indian Affairs has scheduled a hearing on the trust funds, probably for the morning of July 30, but firm details were not available at press time.