The United States “debt” to American Indians

The United States owes a lot to the Indian Nations.  Unquestionably, American Indians helped early European settlers to survive and succeed on this continent and American Indian governments contributed mightily to the political thinking that led to the formation of the federal government that was created by our Founding Fathers.

The United States, however, also owes over 300,000 American Indians something else: up to $200 BILLION for the mismanagement of their property over the past one hundred years. 

In 1996, the Native American Rights Fund filed a class action law suit against the United States for the mismanagement of tribal and individual Indian assets - Cobell v. Kempthorne.  The case has already resulted in more than twelve federal court opinions but has not even progressed beyond the discovery phase.  The federal government and its attorneys have actively resisted this case every step of the way.  In fact, two Cabinet secretaries and the Assistant Secretary for Indian Affairs were held in contempt of court in 1999 and were fined more than $625,000 for discovery violations.  Federal district court judge Royce Lamberth was recently removed from the case by the D.C. Circuit Court of Appeals for his growing bias in favor of the Indian plaintiffs.

In 1996, this case was discussed as being worth in the $2-10 billion range in damages that the U.S. either embezzled from Indians or had just “lost” through its incompetence.  But today, the case is valued as possibly being worth up to $200 BILLION for the 300,000+ plaintiffs.  Attorney General Gonzalez has even opined that the tribal governments’ claim for similar problems could result in this high of a verdict.

The case has arisen from the complicated history of federal Indian policies and because the United States became the trustee for the Indian Nations and individual Indian people.  Starting in 1887, with the passage of the General Allotment Act, the United States has been responsible for the oversight and management of most of the tribal and Indian land and assets in Indian country.  As the trustee, the U.S. was responsible under trust law to reasonably lease and develop, and then to collect and pay the rents and profits from these assets to the Indian owners.  The allegation of the Cobell plaintiffs, and the widely accepted truth of the matter, is that the U.S. has failed miserably in exercising its fiduciary and trust responsibilities to carefully protect these assets and to collect the monies due and then to pay them to the Indian owners.  Under the accepted state law of trusts, the U.S. owes an accounting to the Cobell plaintiffs to identify all these funds and then to personally pay for any lost or uncollected funds due.  The U.S. has actively resisted performing an accounting and seems to not want to find out what it owes these Indian people; people who are among the poorest of the poorest U.S. citizens.  The United States has claimed to the federal court that it would cost more than $500 million to perform an accounting for the past 120 years of its trusteeship over Indian assets.  The U.S. appears to be fighting a rearguard action in court while hoping for some kind of legislative fix.

Many people would like to see the Cobell case disappear.  Congress has twice already considered “midnight” riders to kill the case.  Senator John McCain and the Senate Committee on Indian Affairs have talked about proposing settlement amounts between $7-8 billion dollars and recent Senate and House bill have proposed these amounts. 

On March 1, 2007, the Bush administration responded to questions from the Senate Committee on Indian Affairs.  The administration now proposes to settle all the trust mismanagement claims and to pay for all the needed Indian trust reform efforts with $7 billion.  This is in spite of the acknowledged true price tag of the lost and mismanaged funds that could run into the hundreds of billions of dollars.

In their letter, Attorney General Alberto Gonzales and Interior Secretary Dirk Kempthorne told the Senate Committee that the administration was prepared to “invest” $7 billion to settle all trust mismanagement claims.  But they also appear to demand that the Congress extinguish the government’s liability for all future trust claims.  This last statement is the most egregious aspect of this sordid history.  The United States apparently wants to continue managing Indian assets but wants to prevent any future possible liability no matter how woefully it might manage and fail to protect these assets.

The proposal was immediately called a “bad faith offer” by the Cobell attorney.  You might also think this sounds like a bad faith settlement if it were your assets that the U.S. controlled but wanted to avoid any responsibility for doing so in a careful and responsible manner.  Senator Byron Dorgan (D-N.D.), the chairman of the Senate Indian Affairs Committee, said: “This is the first time that the federal government has acknowledged a multi-billion dollar liability for the mismanagement of the Indian trust funds over the past century and more. That is a significant admission.”  A more significant admission would be for the United States to live up to the debt it owes these Indian people and to account for and pay them the money that is legally theirs but which has been mismanaged and withheld from them for the past one hundred years.