Attorneys for 300,000 American Indians filed a class-action lawsuit Monday against the U.S. government, charging that federal officials deliberately destroyed accounting records for a special trust fund worth billions of dollars.
In the lawsuit filed in U.S. District Court, the Native American Rights Fund and other tribal groups contend the federal government lost, failed to properly invest or converted to the government's own use money in the nearly 400,000 individual Indian accounts in the Albuquerque, N.M.-based trust fund.The lawsuit, filed against Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin, asked that the government make major improvements in the fund's accounting system.
The lawsuit also asked the court to force the federal government to provide a full accounting of the billions of dollars that has passed through the individual Indian accounts since they were set up more than 100 years ago.
"One of the major allegations is that the Department of Interior has not given its special trustee (in charge of the trust fund) either the resources or the authority to do what is necessary to ameliorate the problem," said Keith Harper, a Native American Rights Fund attorney.
"We are saying by law that they (federal officials) have to fix the system, they have to reconcile the accounts. Our emphasis is on repairing the system. ... It's not being done properly now, and the federal government admits that."
The federal government has held funds in trust for American Indians since 1820.
There are two main types of Indian trust funds: tribal trust funds, much of them generated by lawsuits won by tribes; and tribal and individual Indian money accounts, mostly from oil, gas and timber royalties, land leases and investment income.
The Office of Trust Funds Management, located in Albuquerque, managed about $2.6 billion in American Indian trust funds in fiscal 1995, about $2.1 billion for 1,500 tribal accounts and about $453 million for nearly 390,000 individual American Indian accounts.
Over the decades, reports have uncovered a morass of mismanagement and other problems at the Office of Trust Funds Management.
In a recent report, the General Accounting Office - Congress' watchdog agency - argued that a five-year, $21 million effort to totally reconcile the trust funds has gone about as far as it can go.
Congress probably will have to legislate a settlement for both the tribal and the individual American Indian accounts, the GAO added. In fact, the GAO noted that the private contractor working on the reconciliation effort decided early on that the finances of the individual accounts, in particular, were so tangled that it would cost an exorbitant amount to reconcile them.
Informed of the class-action lawsuit, Interior officials noted that President Clinton has asked for an $18 million increase - from $20 million this year to $38 million next year - for the Office of Special Trustee, which has jurisdiction over the Office of Trust Funds Management.
"Primarily, the resources are proposed to be used to correct individual Indian money account management systems deficiencies that are in urgent need of repair," Interior officials said in a statement.
A key House subcommittee, however, already has slashed Clinton's proposed increase to $19 million for next year, Interior officials noted.
With that level of funding, there would be no dollars to improve the accounting system for individual accounts, they added.
In their lawsuit, however, attorneys for the individual Indian account holders contend that the federal government has a legal responsibility to determine what happened to the money in the accounts. They note that courts, including the U.S. Supreme Court, have ruled that the United States must meet the same legal standard that is applied to private trustees.
"In the case of the Indian trust funds, that responsibility has been abdicated," the attorneys filing the lawsuit said in a statement.