Trust reform efforts on the verge of failure

Brian Stockes
9/26/01

WASHINGTON -- Data cleanup and trust reform relating to the federal government's management of American Indian trust accounts is again receiving harsh criticism from a court monitor in the case of Cobell vs. Norton.

The latest criticism comes as part of a recently released report which says that trust reform efforts are a victim of widespread mismanagement by senior officials within both the Bush and Clinton administrations.

The report is the third issued by the monitor Joseph S. Kieffer III which characterize the federal government's efforts as insincere, poorly planned and misleading.

"The heart of the trust reform problems is not the technical difficulty of providing an historical accounting, developing TAAMS or carrying out data cleanup," Kieffer said. "As has been heard time and time again, 'these projects are not rocket science.' The genesis of the problem stems directly from the senior management which has refused to conduct the historical accounting, covered up their mismanagement of TAAMS development and failed to effectively address the serious data cleanup issues or provide the management and resources necessary to accomplish that cleanup, all the while providing this court with overly optimistic and misleading assessments of data cleanup and trust reform operations."

Kieffer said there was no consistency in information reported by the BIA to the court about the data cleanup process within the same region from one quarter to the next and no consistency between any two regions in the information provided in the report required by the court.

Secretary of Interior Gale Norton and Assistant Secretary for Indian Affairs Neil McCaleb said the department was doing its best and that it was a complex system and more time would be needed to solve the problems.

'The major fallacy in those pronouncements is that the Interior defendants have had the time to bring about trust reform. The DOI and BIA career executive service managers have been in place throughout both the Clinton and Bush administrations and have had the responsibility for all trust reform subprojects including the BIA Data Cleanup subproject,' Keiffer said.

Kieffer was appointed by Judge Royce Lamberth to monitor the government's progress in trust reform and file written reports of his findings. The first two reports issued by Kieffer said the federal government failed in its plan to resolve the trust fund problem and intentionally misled the court and American Indian beneficiaries. This report is the latest in the federal government's continuing problems with trust reform.

To date, the government has spent more than $40 million on a new computer system, called the Trust Assets and Accounting Management System (TAAMS), to track all monies going in and out of trust accounts. It is the operation and management of this system and the data retained by the government that Kieffer openly criticizes.

In addition to problems with data management, the BIA's investment activity in general has left many questions with regard to the potential for funds were they properly invested. Hundreds of millions of dollars in potential interest has been lost because money was left in the form of cash for long periods of time.

Without an accounts receivable system and with so many leases missing, the BIA is unable to tell the trust account holders whether all of the income due on their asset leases have been collected. Mineral Management Service (MMS) operations on tribal lands also continued with no system to guarantee that the legal amount due to a tribe or individual on those resources was in fact paid.

In one example cited by Kieffer, BIA employees have been able to clean up data for an average of one tract of land per day in the BIA's Alaska Region, and so far have completed only 5 percent of the 18,000 American Indian-owned tracts.

Kieffer said the math speaks for itself and that it could be decades before Interior completes it's required responsibilities.

"Interior lacks the competence, the will and the credibility to run the trust, and Kieffer's reports prove it," said Elouise Cobell, lead plaintiff in the case. "Trust reform will start to happen on the day when the court appoints a receiver and gets the trust out of Interior's hands."

Keith Harper, an attorney for Cobell, said a "receiver" would be an individual or group of individuals appointed by the court to oversee management of the government's trust reform efforts, taking over control of trust management decisions currently made by Administration officials.

"They obviously need direct oversight from the court," Harper said.

Since this case was initiated in 1996, attorneys for the government have argued that federal law is unclear before 1994 and that Interior should be able to move forward with trust reforms without judicial oversight. An appeals court has already disagreed and said that the lack of a timetable "does not give government officials carte blanche to ignore their legal obligations."

Harper said that the plaintiffs are going to file a motion with the court requesting a receivership.

The financial records maintained by the federal government reflect investment of as much as $500 million a year of American Indian trust funds in government securities on behalf of individual American Indian trust beneficiaries. In tribal trust accounts overall, $2.4 billion remains unreconciled.

Previous reports have split the two administrations' attempts at solving the problems of the IIM trust fund debacle. The Bush administration, the report states, looks to the future, but Kieffer said the future has been jeopardized by administration's decisions on trust reform.

'The cry that 'it didn't happen on our watch' can no longer provide a defense for this administration,' Keiffer wrote.

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