Trust accounting trial enters decisive phase

Jerry Reynolds
10/12/07

Analysis

WASHINGTON - The clock struck a historic hour at 9:30 a.m. in Washington Oct. 10, the day the epic trial known as Elouise Pepion Cobell, et al. v. Dirk Kempthorne, Secretary of the Interior, et al., entered a phase that presiding U.S. District Judge James Robertson has stated will ''continue as long as necessary'' to settle whether the defendant Interior Department (a delegate of the federal government) is remedying its breaches of fiduciary duty to Individual Indian Money account holders, whether it has ''unreasonably delayed the completion of the required accounting'' and, most fraught of all, ''What further relief, if any, should be ordered?''

Lead plaintiff Cobell and the injured class of IIM account holders have offered to settle their grievances for $27 billion. The government was prepared, in late summer 2006 and spring 2007, to offer $7 billion to settle the case - as well as all conceivable related cases that might come of it in the future, an offer spurned by the Cobell plaintiffs and many tribes.

Now, as reported in the Montana press, Cobell (whose tribal affiliation is Blackfeet) expects the trial to demonstrate Interior's shortcomings as the IIM fiduciary. She then expects the trial to arrive at a monetary restoration of the accounts, a ''remedy'' she has admitted will amount to ''rough justice'' because of the staggering price tag attached to a transaction-by-transaction reconciliation.

The government is standing by its longtime claim, most often publicized by Special Trustee Ross Swimmer, that any monetary losses to the IIM accounts over the hundred-some years of Interior's stewardship amount to many times less than the plaintiffs claim - ''more likely in the millions than billions,'' as a recent article on the subject in CFO magazine relates.

Like many of the issues at trial, the competing claims of likely monetary losses are mired in the kind of detail that led Robertson to opine in a memorandum, ''The current posture of this case cannot be fully described in less than 40 or 50 pages ...''

Interior, constrained by confidentiality laws and other considerations throughout a case that is in its 11th calendar year, has been notably quiet outside the courtroom. Cobell and the plaintiff class of account holders have been more vocal. The litigant parties proved true to pattern on Oct. 10.

In Portland, Ore., Northwest account holders led by Dotti Chamblin of the Makah Tribe in Neah Bay, Wash., gathered in Cobell's name outside BIA-area headquarters. Finding they would not be allowed on federal land, Chamblin and her followers - a half-dozen of them other Makah grandmothers - kept to the sidewalks with their placards. Chamblin carried a placard declaring the IIM trust a ''broken trust.'' One of her companions held a sign that declared the Makah whaling treaty a broken trust; and another pronounced the same sentence on Indian health care. They expected members of the local and regional Indian community to join them as a rainy-day noon approached in the Pacific time zone.

The trust accounts receive money from the Interior-approved lease of trust assets, such as oil, minerals, timber and water. Chamblin's IIM account is tied to timber revenue, but she said the reason she turned out is really to support Cobell, whom she considers ''a great leader, a great lady.''

''Women have a hard time getting the recognition and the funds they need,'' Chamblin said.

More high-profile efforts to corral public support for the plaintiffs were less convincing. A report of Interior's inspector general on the Minerals Management Service (MMS collects the revenue from leased federal land, sub-surface and offshore assets, including assets that underlie revenue due to IIM accounts) did not assert a ''profound failure'' of the MMS revenue arm's $149 million computer system for revenue collection, did not directly validate the IIM-related claims against MMS of a specific whistle-blower, and did little to bolster the credibility of whistle-blower lawsuits against MMS in general.

Robertson has stated an intention to see the accounting trial through to potentially case-making conclusions, one way or the other, from every weekday morning through the afternoon for as long as it takes.

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