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In the largest-ever class action lawsuit against the federal government, Indians demand an end to insult, theft, and broken promises
Silja J.A. Talvi
What do you get when you put what one judge calls the most “historically mismanaged federal program” in the U.S. in charge of a $500 million-a-year trust, and charge that program with distributing funds to the country's single most impoverished ethnic minority group?
The answer is a big $100 billion black hole. Money vital to the survival of many Native Americans either lost, misplaced, or stolen—$100 billion owed to 4.1 million people who, as a group, rank last in every significant socioeconomic category.
On November 28, 2001, when Gale Norton became the second consecutive Secretary of the Interior to face contempt charges in a federal court for failing to provide an accounting of the Bureau of Indian Affairs' (BIA) management of more than 300,000 Individual Indian Money (IIM) accounts, it's unlikely she or her co-defendant, BIA head Neal McCaleb, a Chickasaw Indian, anticipated the emotional force and organizational unity of her detractors. It's unlikely that she counted on the determination and savvy of chief plaintiff Elouise Cobell, a Montana banker and member of the Blackfoot nation. It's equally unlikely that she expected, in the span of several weeks, to be exposed for her ignorance of basic accounting practices, her convenient relationship with the truth, and an attitude bordering on contempt toward the very people whose land—and in some cases, livelihoods—her department is charged with managing.
Then again, Gale Norton is also a person who can testify before the court that the trust records she is in charge of are “a complete bookkeeping nightmare,” and who can autocratically propose an entirely new agency for managing Indian money without consulting even one Indian in advance, and still testify that she would give her performance “a passing grade.”
As reprehensible as Norton's performance has been, however, focusing on her individual actions would obscure a much longer-standing, institutional crime perpetrated by the BIA, the Departments of the Interior and Treasury, and Congress against the nation's first people.
The Great White Society
Bad faith, of course, has attended every chapter in U.S.-Indian relations. The fiduciary “trust” relationship between the U.S. government and Indian tribes was created well over 100 years ago with the Dawes Act. With this act, the U.S. government ushered in a new phase of its genocidal relationship to Indians by allotting parcels of land ranging from 40 to 160 acres to the heads of Indian households, couching the move in terms of introducing a more stationary, farming lifestyle to native peoples.
Key to the successful passage of the Dawes Act in 1887 was a provision that allowed the U.S. government to purchase “surplus” portions of these allotted lands for the purposes of mining, grazing, timber, and irrigation projects and then to hold the money paid to Indians for the use of that land in trust.
In theory, monies held “in trust” would then be dispersed to individuals and tribes, subject to appropriations by Congress for the purposes of running Indian-related programs and offices. But in practice, as the ensuing century would bear out again and again, the sum of these trust monies was never fully tallied, recorded, or dispersed to the individuals and tribes for whom they were intended.
Through the process of allotment, American Indians, whose relationship to the land had been communal and often nomadic (and largely centered on extended familial relationships), were forced to accept a new, more individualistic concept of livelihood through “homesteading.” Promoted by self-styled humanitarians—primarily congresspeople and members of the Committee on Indian Affairs—allotment was to put an end to what was seen as the objectionable, “uncivilized” nature of the Indian way of life, and to assist natives toward the process of belonging and adhering to the standards of the great white society.
As an incentive, Indians who agreed to receive their parcels of land were granted U.S. citizenship by the Secretary of the Interior: a measured step toward cultural, political, and economic assimilation.
Decade by decade, the land holdings of Indian peoples decreased dramatically. In 1891, hoping to further reduce the amount of land held by “uncivilized” Indians, Congress passed a law making the leasing of allotted lands possible. In the purchase of surplus lands—and in the granting of leases after 1891—the U.S. government moved decisively toward guaranteeing as much land for Euro-American settlers and industrial interests as possible.
In the period between 1913 and 1920, under the leadership of Secretary of the Interior Franklin K. Lane and Commissioner of the Indian Office, Cato Sells, the transfer of lands into non-Indian hands accelerated.
“The Indian's rich agricultural lands, his vast acres of grassland, his great forests should be so utilized as to become a powerful instrument for his civilization,” Sells said in 1914. “I hold it to be an economic and social crime, in this age and under modern circumstances, to permit thousands of acres of fertile land belonging to Indians and capable of great industrial development to lie in unproductive idleness.”
Sells and Lane were hardly the last to envision such a protracted policy of sticking it to the Indians while lining the pockets of industry, although articulated resistance to such policy emerged as early as 1908, when the Board of Indian Commissioners began to complain about the “wholesale slaughter” of forests on Indian reservations.
Deforestation was one of the serious problems becoming more apparent with each passing year. As the government set about leasing surplus land to loggers, miners, farmers, and, later, to oil companies, it collected monies only sporadically. Even when such monies were collected, Indians knew that they were getting only a fraction of what they were owed. Even as tribes watched their lands disappear, to be used for all manner of profit-making purposes, their own income levels diminished year by year.
The growing realization that most Indians were far worse off under allotment led, briefly, to serious-minded governmental reforms after the influential, 800-page Meriam Report of 1928 “found” Indians across the country to be living in dire socioeconomic conditions. Indian Bureau officials, the report noted, were largely inefficient, careless, and incompetent. In turn, the report provided the impetus for an accelerated period of dramatic reform efforts during FDR's New Deal era, beginning with the 1933 presidential appointment of John Collier to the position of Commissioner of Indian Affairs.
Collier set about trying to reverse the allotment policy, which had brought about the diminishment of Indian lands from 138 million acres in 1887 to roughly 50 million acres in 1934. Of the remaining land still owned by Indians at that point, fully 20 million acres were too arid to be used as productive farmland. About 100,000 Indians, Collier complained, were “totally landless” as a result of allotment: “[T]he Indians have been robbed of initiative, their spirit has been broken, their health undermined, and their native pride ground into the dust.”
Impassioned with his particular vision for tribal well being and moderate independence, Collier was successful in ushering in the Indian Reorganization Act of 1934. Most significantly, the Act prohibited further allotment; allowed for remaining surplus lands to be restored to tribal ownership where possible; promoted the centralization of power within tribes by stressing tribal constitutions, councils, and bylaws; and made Individual Indian Monies (IIM)—the “trusts” set up by the government to pay Indians for the lease of their lands—a permanent fixture of U.S-Indian relations.
But, as Francis Paul Prucha writes in The Great Father: The United States Government and the American Indians, Collier's romanticized vision of a wholesale return to a traditional way of Indian life—in a framework of U.S. government-imposed “self-governance”—fell short of its intended effect.
“Collier in a sense imposed upon the Indians a tribal government and a tribal economy, when traditional Indian ways often called for organization on a smaller basis of bands or villages,” he writes. “The charge was made again and again, with some justification, that Collier was as paternalistic as any of his predecessors—perhaps even more so—and [that] the Indian Bureau had a tighter hold on Indian affairs and interfered more in them than ever before.”
By 1948, a capricious shift in official U.S. policy toward Indians was again underway, with the findings and recommendations of the Hoover Commission that Indian assimilation must be the goal of policy toward the native population. “The basis for historic Indian culture has been swept away,” stated the findings of the special task force. “Traditional tribal organization was smashed a generation ago.... Assimilation cannot be prevented. The only questions are: What kind of assimilation, and how fast?”
One might conclude from the actions of the government in the years since the 1948 Hoover Commission Report that extinction would be their preferred method of assimilation. In fact, it would be easy to make the argument that the overall impact of systemic poverty, disease, lack of education, and environmental racism on the nation's first peoples has had much the same effect as the more overtly confrontational and aggressive policies of the BIA's institutional predecessor, the War Department's Office of Indian Affairs. Which is to say that the de facto genocidal policy of the U.S. government towards American Indians continues to the present day, having simply traded in outright starvation, slaughter, and biological warfare for a multi-generational “low-intensity” war of attrition.
One saving grace in this war has been the trust revenue Indians have received—or were supposed to receive—for the use of lands they “own,” although the very concept of land ownership is in itself a gross imposition.
The ongoing mismanagement of trust monies finally led to a 1992 House Committee on Government Operations' report entitled, “Misplaced Trust: The Bureau of Indian Affairs' Mismanagement of the Indian Trust Fund.” Among other damning conclusions, the report compared the trust to “a bank that doesn't know how much money it has.”
The consequent passage of the 1994 Indian Trust Reform Act (ITRA) was a well meaning, if underfunded, attempt to end the Interior Department's gross pattern of neglect and poor management in running the IIM trust. Most significantly, the ITRA established a Special Trustee for American Indians to oversee reform, a position that held some promise with the 1995 appointment of accomplished banker and the former director of Riggs Bank, Paul Homan.
Just one year later, Homan told the U.S. Senate Committee on Indian Affairs that in his 30-year career as a banker, he had never seen anything like the accounting mess at the BIA. More than $50 million had not been paid out to individual Indians because the BIA had no current addresses for them, and roughly 21,000 accounts listed the names of deceased persons. Just under $700 million in tribal funds had been sent to the wrong recipients.
Four years after being appointed, and after exhaustive attempts to remedy the behemoth accounting nightmare of the trust accounts held by the BIA, Homan finally resigned in disgust. In his resignation statement, Homan claimed he had been sandbagged at every step by the Department of the Interior, and that the Office of Special Trustee had never been given the authority or independence necessary to carry out the purposes of the Indian Trust Reform Act.
“In my opinion, the Department of the Interior can no longer be trusted to keep and produce trust records,” stated Homan. “I believe it is time for Congress to consider alternatives…. Specifically, I recommend that Congress consider establishing an independent agency outside the Department of the Interior to manage the U.S. government's trust management responsibilities to American Indians.”
Homan, obviously no radical, also hit on the first of the two key structural components of the issue of Interior Department mismanagement of monies owed to American Indians: “The lack of trust managerial competence and lack of financial trust orientation and focus throughout the BIA and the Department of the Interior have been institutionalized over many years and are now inherent in the BIA organizational culture.”
The second component can be boiled down to the old axiom that one cannot serve two masters well. As with the Food and Drug Administration and its contradictory mission to protect consumers and promote the agricultural industry, the Department of the Interior, which runs the BIA, is charged with the stewardship of Indian lands at the same time it is responsible for timber, minerals, water, grazing, parks, and other “resources” found on these lands. This arrangement cannot, has not, and will not work.
For the last several decades, this twin-forked arrangement has drawn fierce opposition from all over the political continuum. From a damningly critical 1961 Lyndon Johnson presidential task force report and 1969 Nixon administration-commissioned study, to the American Indian Movement's occupations of the BIA building in 1972 and Wounded Knee, South Dakota in 1973, all have held in common the call for fundamental changes in the BIA—or the outright abolition of the Bureau. At best, the BIA was held to be administratively chaotic, paternal, and inefficient; at worst: lawless, corrupt, and murderous.
Through the 1970s, as COINTELPRO and other U.S.-sponsored covert operations murdered and imprisoned a good portion of the American Indian movement leadership and as attention-grabbing protests began to wane as a result, the prominence of Indian issues in the broader public eye diminished.
>From 1980 to 1992, little changed at the BIA. The agency continued to consume about 80 percent of its own budget and did little or nothing to improve its services to American Indians. In the mid-1980s, a BIA accountant in Montana disclosed his findings that the agency had deposited between $7.5 million and $11 million more in banks than had been dispersed to IIM account holders. The accountant, David Henry, was subsequently fired, and went on to author the 1995 book, Stealing from Indians.
During Clinton's two presidential terms, American Indian complaints about missing IIM funds became more frequent, and more vocal. Largely symbolic rhetoric did emerge from the Clinton administration—most notably the 1994 “Government-to- Government Relations Memo,” which told U.S. agencies they needed to actually consult with tribal governments before making decisions that would directly impact American Indians. But in reality, very little reform trickled down to the day-to-day lives of native peoples.
Finally, on June 10, 1996, fed up with business as usual, Elouise Cobell, a Montana banker and member of the Blackfoot nation, assisted by the Native American Rights Fund and the Intertribal Monitoring Association, spearheaded the largest class action lawsuit in history involving the U.S. government. Suing the Secretaries of the Treasury and Interior and, by extension the BIA, plaintiffs are demanding restitution for more than $100 billion in trust deposits, interest, and accruals that remain unaccounted for.
“I can tell you,” Cobell told the House Resources Committee in February 2002, “that many people depend on these payments for the bare necessities of life. These trust checks are not a luxury. Trust funds are not a handout or an entitlement program. It is very important to keep in mind that this is our money—revenue from leases for oil and gas drilling, grazing, logging, and mineral extraction on Indian lands.”
After literally being laughed at by Justice Department attorneys when she requested a special prosecutor to assist her trust reform efforts, Cobell and a team of lawyers and activists have proceeded in the last six years, through two Administrations, to emphatically wipe the smiles from the faces of government attorneys.
Trust Us, We're The Government
The blizzard of court cases, quarterly reports, trial phases, and contempt charges in the ensuing years has been hard to keep up with. There's little doubt that the government is hoping the sheer complexity of the case will prevent it from breaching wide public awareness.
On November 27, 1996, U.S District Judge Royce C. Lamberth ordered the Treasury and Interior to produce trust-related documents and to provide an accounting of how much was owed to whom. Almost two years later, Lamberth concluded that his order had been completely ignored. “They understood I ordered it,” he said, “they just didn't want to comply.”
It should not be assumed, however, that the Interior and Treasury were idle during this time. Instead, they seemed to have occupied most of their time, Enron-style, with shredding rather than accounting. In 1998 and 1999, at the same time government lawyers were telling the Court they were searching for relevant accounting records, the Treasury's Financial Management Service actually destroyed 162 boxes of them. Government lawyers then waited 16 weeks before notifying the court that these documents had been destroyed.
Whether this delay represented the spectacular disorganization of trust records or just how corrupt and dishonest the Treasury and Interior are can't be said with certainty. But both agencies were ordered to pay a relatively paltry sum of $600,000 in penalties for their “error,” and former Interior Secretary Bruce Babbitt, Treasury Secretary Robert Rubin, and Assistant Secretary for Indian Affairs Kevin Gover were all found to be in contempt of court.
On December 21, 1999, Judge Lamberth ruled that the government had breached its trust responsibilities to the Indians and ordered them to file quarterly reports detailing their trust reform efforts. Predictably, government attorneys appealed the decision, but were rebuffed by the U.S. Court of Appeals, who concluded that the “magnitude of the government's malfeasance” justified Court supervision and oversight. Allegations were made—and later substantiated—that Babbitt and Company had retaliated against BIA employees who had provided damaging testimony.
The Treasury asked the Court that an internal investigative report on misconduct by six Treasury attorneys be sealed at more or less the same time that it disclosed it had destroyed yet more Indian trust documents. By March 15, 2001, the Treasury had admitted to the destruction of Indian trust documents by at least 16 Federal Reserve branches. Not long after, Special Master Alan Balaran issued a report to the court citing “compromised” documents at at least 29 of 37 Federal Reserve branches. Balaran also reported on July 27, 2001, that while government lawyers were assuring the court that records were being preserved, they were actually still being destroyed. Considering that a large part of the government's defense in this case is that an historical accounting of the Indian trust is “impossible,” the ongoing destruction of records taxes the charitable interpretation of even the most fair-minded.
Increasingly disgusted by government misconduct, on April 16, 2001, Judge Lamberth appointed a court monitor, Joseph S. Keiffer III, to oversee trust reform and report to the judge on the Interior's progress. Keiffer's subsequent reports paint a picture of widespread institutional mismanagement and corruption. His fourth report found an Interior report to be “untruthful, inaccurate and incomplete.” Top Interior officials testified that Norton and BIA head McCaleb filed reports they knew to be false, telling the court that trust reform and a new $33 million dollar accounting system were a success and that “much progress” had been made.
On October 19, 2001, the Cobell plaintiffs expanded their case, asking Lamberth to find 39 Justice and Interior officials, including Gale Norton, in contempt of court. They also asked that the IIM trust be taken from the Interior and placed in the hands of a receiver. “I hope the government will tell me who's in charge of trust reform,” wrote Lamberth in a court filing several weeks later, “It's allegedly the Secretary, but she sure doesn't act like it.”
On November 28, 2001, Judge Lamberth ordered Secretary Norton and Assistant Secretary for Indian Affairs Neal McCaleb to stand trial for contempt. Seemingly in response to the contempt charges, and in an attempt to retain control over the billions flowing in—and occasionally out of—the Indian trust, Norton has proposed a new agency, the Bureau of Indian Trust Assets Management (BITAM), to manage IIM accounts. Tribal leaders are almost unanimously opposed to the transfer of IIM funds from the BIA to a new agency.
Why do tribal leaders oppose Norton and McCaleb's proposal to remove IIM trust responsibilities from the BIA? Why are they, in essence, supporting an organization that has systematically mismanaged, mistreated, and misrepresented American Indians for nearly 180 years?
For one thing, tribal leaders point out that Norton sought no prior consultation with them before approaching Congress with requests for funding or before she had decided on candidates for leadership roles within the new agency. Norton obviously cannot be bothered with the nuisance of having to consult with the people her department is supposed to care for. Her failure to do so lends credence to Indian lawyer Dennis Gingold's assertion to the court that the government has a “total absence of any concern for the beneficiaries of the trust,” and that it considers Indians “stupid and illiterate,” and therefore incapable of managing their own funds. “All we're asking,” says Navajo Nation President Kelsey Begaye, “is to be consulted, not insulted.”
The creation of Norton's proposed agency, BITAM, would also severely diminish the historic government-to-government relationship between the U.S. and American Indians, and would as a result sorely limit Indians' ability to seek legal recourse against the U.S. If one thing is clear from the historic and contemporary record where U.S.-Indian relations are concerned, it is that Indians must have the ability to seek legal redress.
“The fact that Norton seems to think the problem can be solved by fobbing it off on another agency indicates to me how little she knows about the situation,” said Bruce Johansen, Professor of Communications and Native American Studies at the University of Nebraska at Omaha. “The creation of another agency could weaken the BIA. The BIA's record is not the best, but at least the majority of its employees are Native Americans.”
The Problem Of The BIA
The reasons for popular Indian opposition to the weakening or abolition of the BIA—and its central role in trust administration—are layered with legal, financial, and cultural considerations and no one can point toward a simple solution to the problem.
Despite the BIA's IIM accounting disaster, many Indians are loathe to allow anything that might lead to the dismantling of the BIA—and this is precisely how Norton and McCaleb's proposal to remove trust responsibilities from the BIA has been perceived by many tribes.
“The BIA has lots of problems, and we know it,” Rick Gay of the Umatilla tribe was quoted as saying in a recent Oregonian article on the BIA-Interior Department debacle. “But right now it's all we have.”
Indian activists are also aware that the underfunding and eventual dismantling of the BIA has been a longstanding goal of right-wing congresspeople, including former Senator Slade Gorton (R-WA).
Gorton, who made a decades-long career out of pushing anti-Indian initiatives, relentlessly promoted the interests of timber and mining companies on Indian lands. Like many of his archconservative peers, Gorton preferred an elimination of the so-called “special privileges” granted by the Interior Department to Indians with regard to the use of land and natural resources in Indian country. “I do not believe there is a permanent duty, lasting not only a century and a half, but forever, to fund activities that every other American funds through local taxes and local effort,” Gorton was quoted as saying by Time in 1995.
With anti-Indian sentiment still a very real part of the political landscape, fears about the motivations and intentions of anti-Indian legislators are valid. But activists who favor abolishment of the agency also recognize that the BIA holds a disproportionate amount of power over the economic and political lives of Indian peoples. “Many Native Americans have been subjected to the coercive psychological effects of reservation life for so long that they may have internalized the autocratic values which make the BIA's political blackmail so effective,” writes Dario Robertson, a Cherokee lawyer, in an article advocating the abolition of the BIA.
It is Robertson's assertion that many Indian tribal leaders, confronted with a lifetime of BIA coercion tactics, retaliatory practices, and a paternalistic approach toward the Indian population as a whole, come to believe that the agency is “as indispensable to Indian people as the BIA's propaganda invariably suggests.”
Furthermore, there is the reality-based perception that because Indians do not, for the most part, constitute significant voting blocs, congressional representatives are less likely to pay attention to them. The BIA, then, represents for many Indians a mechanism through which the federal government stays connected to their needs, if only sporadically and with overall disregard for the collective welfare of America's indigenous population.
Because of their statistically small numbers, it is true that the majority of congressional representatives can safely ignore all but the most cursory issues pertaining to the modern struggles of American Indians. For U.S. politicians, the benefits of pushing for meaningful reform of federal Indian policy are negligible—even deleterious.
Between American politicians whose interest in Indians is tangential and inconsistent, and a majority non-Indian citizenry whose awareness of Indian realities is minimal, at best, the categorical failings of the BIA are allowed to pile up, year by year.
As do the legal travesties related to Cobell v. Norton, in which the lead plaintiff has noted that, despite “humiliating courtroom defeats,” the conduct of the defendants continues to worsen, and the situation seems to get further and further away from resolution. “[S]till the Secretary of the Interior, the Secretary of the Treasury, and the Attorney General fight on against us and defend the legally and morally indefensible,” Cobell told the House Resources Committee. “Why? Where has Congress been while this mugging has gone on for nearly six years?”
Although full reparations for damage done to American Indians would bankrupt the federal government, plaintiffs and their supporters point out that the government now has a genuine opportunity to redeem itself, if only in part, to Indian trust beneficiaries.
“At some point,” says Professor Johansen, “the BIA and Interior are going to have to cut the shuck and jive and own up to the fact that they do not have the banking infrastructure to determine how to settle up on an individual basis in a large proportion of cases. They are going to have to hammer out something legally that will compensate people within a range of what they are owed, and get on with it.”
Key to such a remedy may well be the proposal that the IIM trust accounts should eventually be handled by a new, independent bureau within the Interior Department. Cobell and her fellow plaintiffs have pointed out that such a bureau, protected from politics and funded with permanent appropriations, could hire the competent staff and supervisors necessary to ensure the proper management and distribution of trust money.
That is, if the government can actually still find a team of staff and supervisors not comprised of arrogant, duplicitous, self-serving, mathematically-challenged, paper-shredding and altogether ethically bankrupt bureaucrats. If they can do that, the immediate remedy for IIM trust account mismanagement might be only the beginning. Z
Brian Brasel-Awehali and Silja J.A. Talvi are editors of LiP Magazine. Brasel-Awehali is a member of the Cherokee Nation and his work has appeared in publications ranging from High Times to Dark Night Field Notes, a journal of indigenous liberation. Silja is a freelance journalist whose work appears in the Christian Science Monitor and In These Times, among other publications.