'Special master' may determine American Indian payouts

Mon April 7, 2008
'Special master' may determine American Indian payouts
By Chris Casteel
Washington Bureau

WASHINGTON — If a federal judge agrees that the government owes Indian trust account holders billions of dollars, he would then have to determine how the money should be allocated among nearly 300,000 people, their attorney said.

The American Indians suing the government over the way their accounts have been managed asked U.S. District Judge James Robertson to approve $58 billion in "relief" to the trust. According to the plaintiffs, the government benefited improperly by that amount over more than 100 years by not paying out all of the money collected for Indian trust account holders.

But the brief filed last month does not suggest how the money should be distributed. There are about 280,000 American Indians with government-run trust accounts. Most have land-based accounts; they own land and can collect money from leasing it for oil and gas drilling, grazing, mining or other uses.

There are an estimated 53,000 account holders in Oklahoma.

Dennis Gingold, one of the lead attorneys for the Indians in the case, which has been in federal court here for nearly 12 years, said last week, "The allocation issues are determined by the court, not by us."

Gingold said if Robertson decides the government owes money to trust account holders, he may then appoint an expert, or "special master," to make recommendations to him about distributing the money.

"Most courts don't want to be caught up in that kind of detail," Gingold said.

The Interior Department is expected to submit a response this week to the Indians' argument that the government should pay $58 billion in "equitable relief" to the trust account holders.

Complex trustAt a hearing in March, a government attorney argued to Robertson that the case should not involve any financial remedies because the suit filed in 1996 didn't seek damages. Robert E. Kirschman, a Justice Department attorney, said the plaintiffs sought reforms of the system and an accounting of their funds.

Robertson, the second district judge to preside over the case, ruled this year that an accurate accounting would be impossible.

The trust account system was set up in the late 19th century when millions of acres — estimates range from 40 million to 54 million — were allotted in parcels to individual Indians and the government promised to manage the land. Counting land owned by tribes, it is the biggest trust in the United States.

Gingold called it "the most complex trust in the United States" since it involves so many people and so many activities — such as oil and gas drilling — and said it's being run by people with no expertise in trust management.

Two U.S. district judges and the U.S. Court of Appeals here have ruled that the government failed to properly manage the trust.

Since ruling that an accounting was impossible, Robertson, anxious to resolve the controversial and highly contentious case in the next few months, has been looking for a remedy.

Gingold said last week, "Where an accounting is impossible, you're looking at real rough justice."

The government's own figures, he said, show that an average of 65 percent of the money collected for the Indians has been paid out. While holding on to the rest — more than $3 billion — the government has been able to lower its borrowing costs to finance its debt. Spread out over more than 100 years, that has allowed the government to benefit to the tune of $58 billion, the Indians say.

Gingold said he expected the government to argue that Robertson can't award damages against the federal government. But he said the Indians aren't asking for damages.

"We're seeking the benefit the government gained as a result of its breach of trust," Gingold said. "You're not allowed to benefit from your improper accounting."

The Indians are also asking that Robertson return all the land originally in the trust unless the government could prove it was sold at fair market value. Of the original acreage — much of which was in what is now Oklahoma — only about 10 million acres remain.

Gingold said he expects the judge to say that it wasn't practical to try to return land sold to third parties. But he said the judge could look at land that was owned by Indians that is now being used by the government.

Robertson has scheduled a trial for early June on the proposals for resolving the case.