Native American Trust Management
One of the largest issues in Indian Country is an ongoing lawsuit in the District Court for the District of Columbia, "Cobell v. Norton". This is a class action filed on behalf of all individual Indians who have or should have had Indian Individual Money (IIM) accounts that are held in trust by the Department of the Interior. The purpose of the lawsuit is to force the Department of the Interior to provide a full and accurate accounting of all IIM account transactions, and to reform the trust fund accounting system.
Beginning under the General Allotment Act in 1887, Indian tribal lands were allocated to individual Indians in 80- to 160-acre allotments. The intention was to forcibly assimilate Indians by breaking up reservations. This policy was deemed by Congress to be a failure and was stopped in 1934. As a result of the allotment process, almost 11 million acres of lands are now held in trust by the United States for individual Indians (45 million acres remain in tribal hands). The Department of the Interior is responsible for managing the monies generated from revenue-producing activities on these properties, as well as monies related to judgment fund awards and per capita payments.
The court case has revealed that for over 100 years, the government's record-keeping of IIM accounts has been so poorly handled that Indian account holders cannot receive a full and accurate accounting of whether monies generated from their lands were correctly collected, deposited, tracked, and disbursed. There is even disagreement over how many accounts exist (estimates vary between 300,000 and 500,000). Exacerbating the problem is the process by which an individual Indian trust property is split among heirs when the original allottee passes on. Under this process called "fractionation," interest to the title of a property is divided among the heirs. Revenues generated from the property are accordingly collected and deposited into an IIM account established for each heir. This has led to exponential growth in the number of accounts, including tens of thousands of accounts holding relatively small deposits which are extremely cumbersome and costly to manage. In many cases, management costs exceed the value of the accounts.
In 1994, the Congress passed the Indian Trust Reform Act. It laid out the duties of the Secretary of the Interior with respect to trust accounts. Included among those duties is the duty to provide account holders with an accounting of the funds in their accounts. The Act, however, was not successful in achieving the intent of Congress.
The Trust Fund Lawsuit Cobell v. Norton is a class action suit filed on behalf of all individual Indians who have, or should have had, an IIM account. Its purpose is to force the Department of the Interior to provide a full and accurate accounting of all IIM accounts, and to reform the trust fund accounting system. The lawsuit was originally filed as Cobell v. Babbitt on June 10, 1996. Defendants in the litigation are the Secretary of the Interior, Secretary of the Treasury, and the Assistant Secretary for Indian Affairs. There has been growing concern with the duration and cost of the litigation. Indian account holders have not received a full accounting of their IIM accounts as they are entitled to, nor any money they may be owed as a result of the government's historic mismanagement of record-keeping.
Spending on this matter threatens to displace funding for other Interior programs and services. On September 25, 2003, District Court Judge Roye C. Lamberth issued a decision on one phase of the litigation. His decision requires the Department of the Interior to provide a full accounting by 2007 of all Indian money trusts dating back to 1887 (the year Indian lands were first allotted). Some have estimated this could cost $4 billion to $10 billion on an accounting that cannot be sufficiently performed. Meanwhile, IIM account holders will be unable to receive any money they may be owed until the litigation is resolved. Some believe an Act of Congress is necessary to facilitate a resolution to the Cobell litigation. In 2005, the House Committee on Resources and the Senate Committee on Indian Affairs held hearings on this matter.
