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Issue Date:  September 30, 2005

Mismanaged Indian trust is a scandal

The federal government stalls paying its debt to Native Americans


The extended Bruno family, members of the Potawatomi tribe, tended large gardens of vegetables and fruits and raised chickens, hogs and cows. On Sundays the whole family attended the Sacred Heart Catholic Mission just down the road. [Then oil was discovered on the 80-acre homestead near Shawnee, Okla.] Lease agreements were arranged with oil producers, wells were dug, and pumping began in 1939. But family members say Grandpa Bruno never knew how much oil and gas were being taken out of his land or how much money he was due from their sale” (TIME, Jan. 26, 2004).

Most low-income people have no assets, but many American Indians are land rich and dirt poor. Since their land holdings either contain resources, produce revenues from timber sales or gas/oil production, or are leased for farming or ranching, this is a curious anomaly. The explanation lies in the Allotment Act of 1887, which required revenues generated from Indian trust land to be managed by the federal government. Although the government has collected about $13 billion for people with Individual Indian Money accounts, it is unable to show how much it paid out to them. A bank without full accounting records would be shut down. A trustee pilfering private funds would be in jail. Congress has documented but ignored this scandal since 1915.

Elouise Cobell of the Blackfeet tribe grew up in a home with no electricity, running water or telephone. She remembers her parents and grandparents puzzling about royalty checks that were less than expected and ones that did not arrive. How could they determine what profits or proceeds they should be receiving without proper financial statements? And there was no recourse, such as changing banks or appealing to banking regulators, as there would be with a private bank.

As tribal treasurer, Ms. Cobell filed a class action suit in 1996 to obtain an accounting of the 11 million acres held in trust for individual Native Americans. Since then, Federal Judge Royce Lamberth, a Republican appointee, has ruled that the government is accountable and must pay interest on monies owed because the Department of the Interior flagrantly mismanaged Indian trust funds and neglected its fiduciary duties.

The century of stalling meant the money owed increased exponentially and no administration wants to pay the billions back on its watch. Thus, both the Clinton administration and the current Bush administration tried to derail the Indian trust fund lawsuit. A Jan. 26, 2004, editorial in The New York Times called the refusal to pay half a million Native Americans what is rightfully theirs “a continuing shame.” Compared to a scandal of comparable size such as Enron, the federal government’s egregious conduct has been hidden from the public.

The injustice is of such momentous moral, legal and financial importance that Indians took out a May 10 advertisement in The Washington Post appealing to the American people for help. In it, Elouise Cobell explains, “This is our land and our money. This is not an entitlements program. ... Millions of dollars of taxpayer funds are paid to private attorneys to defend the misconduct of government officials in this litigation. At the same time, the government retaliates against anyone who attempts to clean up this scandal -- including the federal judge. … Tell President Bush and Congress that it is time to stop this scandal and remove this stain on our nation’s honor” (

For humanitarian reasons, this appeal cannot be ignored any more than pleas of hurricane victims could be cold-shouldered. For contractual reasons, this debt cannot be ignored any more than a debt owed to England or Japan could be brushed off. This is real money owed to real people.

Detaining Indian families in poverty by refusing to give them their money is an ethical matter. Native Americans are too small a group to obtain justice on their own. The religious community must demand redress before more Indian elders die without receiving a penny. There is an off-budget Claims Judgment Fund to use when the government makes mistakes or is held liable. With a plan to tap that fund, Sen. John McCain, R-Ariz., and Byron Dorgan, D-N.D., have introduced the Indian Trust Reform Act of 2005 to return billions and to prevent future mismanagement.

Patricia Powers serves on the Friends Committee on National Legislation (, a Quaker lobby in the public interest that has existed since 1943.

National Catholic Reporter, September 30, 2005

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