Saturday, December 12, 2009

A settlement in sight for a longstanding lawsuit?

I've been following the lawsuit brought by Native American tribes and individuals against the US Government for a long time. The New York Times reports:

The federal government announced on Tuesday that it intends to pay $3.4 billion to settle claims that it has mismanaged the revenue in American Indian trust funds, potentially ending one of the largest and most complicated class-action lawsuits ever brought against the United States.

The tentative agreement, reached late Monday, would resolve a 13-year-old lawsuit over hundreds of thousands of land trust accounts that date to the 19th century. Specialists in federal tribal law described the lawsuit as one of the most important in the history of legal disputes involving the government’s treatment of American Indians.

. . .

The dispute arises from a system dating to 1887, when Congress divided many tribal lands into parcels — most from 40 to 160 acres — and assigned them to individual Indians while selling off remaining lands.

The Interior Department now manages about 56 million acres of Indian trust land scattered across the country, with the heaviest concentration in Western states. The government handles leases on the land for mining, livestock grazing, timber harvesting and drilling for oil and gas. It then distributes the revenue raised by those leases to the American Indians. In the 2009 fiscal year, it collected about $298 million for more than 384,000 individual Indian accounts.

The lawsuit accuses the federal government of mismanaging that money. As a result, the value of the trusts has been unclear, and the Indians contend that they are owed far more than what they have been paid.

Under the settlement, the government would pay $1.4 billion to compensate the Indians for their claims of historical accounting irregularities and any accusation that federal officials mismanaged the administration of the land itself over the years.

. . .

The lawsuit spanned three presidencies and engendered seven trials covering 192 trial days, generated 22 published judicial opinions, and went before a federal appeals court 10 times.

Over its course, the federal judge originally assigned to the case, Royce C. Lamberth, put contempt orders on two secretaries of the interior over their handling of the lawsuit. In 2006, after the Bush administration complained of bias, a federal appeals court removed Judge Lamberth from the case.

Judge James Robertson has handled it since, and he pushed both parties to negotiate — including brokering a last-minute deal over an undisclosed problem that nearly derailed the settlement late Monday, said David J. Hayes, the Interior Department deputy secretary.

. . .

The settlement also seeks to resolve an ever-growing headache of the trust system that contributed to the government’s problems — especially in the pre-computer era — in keeping track of the allotments: the original owners, most of whom died without leaving wills, have many heirs, which has “fractionalized” the ownership interests.

For example, one 40-acre parcel today has 439 owners, most of whom receive less than $1 a year in income from it, Mr. Haynes said. The parcel is valued at about $20,000, but it costs the government more than $40,000 a year to administer those trusts.

In an effort to resolve such problems — and prevent them from worsening in subsequent generations — the settlement would establish a $2 billion fund to buy fractional interests in land from anyone willing to sell. The program would seek to consolidate ownership in parcels of land for the tribes, while reducing the Interior Department’s work in keeping track of the trusts.

There's more at the link. It makes interesting reading.

One of the most troubling aspects of this case has been the abject failure of the US Government to produce documents timeously, and render a detailed accounting of incoming and outgoing monies. The plaintiffs claimed that they were owed tens of billions of dollars, but this could not be established from Government accounting records because the latter were so poorly documented and maintained. (Two Secretaries of the Interior were cited for contempt of court over the course of proceedings, due to their failure to produce proper documentation.)

To me, the sad thing is the very clear failure of the Federal Government to operate with due diligence in administering these funds. Failures to keep records, flat-out fraudulent transactions and other offenses have all been alleged and/or documented in exhaustive detail. I have to ask . . . if this is the sort of job they did administering these particular billions of dollars, why should we trust the FedGov to do any better with the billions of dollars involved in health care reform?


1 comment:

Mark@Bismarck said...

The federal government being sued for mismanaged funds in a trust? Seems that anybody not pleased with the way the social 'security' system has been 'managed' might have a precident for a law suit?