Choctaw Nation Wants Keepseagle Millions Awarded to Tribe’s Foundation

Rob Capriccioso
September 05, 2013


Concerned that unclaimed monies involving the Keepseagle settlement could be misdirected by plaintiffs’ lawyers in the case, the Choctaw Nation has asked a federal court to intervene and direct a sizeable portion of the funds to the tribe’s foundation.

On September 5, the tribe filed with the D.C. District Court a motion asking that the tribe’s Jones Academy Foundation be considered to receive $58.5 million of the $380 million in unclaimed Keepseagle settlement funds. The Keepseagle case was settled for $760 million in 2011 between the Obama administration and Native American farmers who had been discriminated against for a number of years in the past by the U.S. Department of Agriculture.

“Tribal governments like Choctaw want to work together to ensure that the remaining $380 million in Keepseagle cy pres money is spent on the ground, in Indian country by Indian tribal governments, on behalf of actual Indian farmers and ranchers,” Brian McClain, a legislative advocate with the tribe, told Indian Country Today Media Network.

The Choctaw legal request contrasts with a plan offered in a status report filed in federal court August 30 by the lawyers for the Keepseagle plaintiffs. The Cohen Milstein firm said in the report that they want to establish a non-profit agricultural foundation with the leftover cy pres funds that would ultimately be overseen by Native Americans the firm solicits.

McClain and other tribal leaders have come out against that plan. “[W]e don't need a new foundation; we already have tribal foundations,” he said. “We don't need a new organization; we already have hundreds of organizations -- we call them tribal governments. What we lack is enough money to meet the needs of our members, including farmers and ranchers.”

The Choctaw Nation makes the case in their motion that the terms of the settlement and case law do not allow for the foundation plan to happen.

“Implicit but unsaid in the status report is that, under the terms of the Settlement Agreement, a new foundation is clearly ineligible to receive any of the Cy Pres Fund,” according to the Choctaw motion. “Class Counsel argue that the Settlement Agreement in its present form could support creation of a new foundation by disbursing the entire Cy Pres Fund to a single organization that qualifies as a Cy Pres Beneficiary while extracting a binding commitment from that recipient to use the funds to establish a subsidiary foundation which would then re-grant funds to other non-profit organizations. However, this construct does not comply with either the letter or the spirit of the Settlement Agreement that this Court has approved, and therefore, absent a modification of the Settlement Agreement, may not be effected.”

The tribe further argues that dictating law says that a settlement agreement of this nature cannot be changed at this point: “[W]hile the settlement agreement must gain the approval of the district judge, once approved its terms must be followed by the court and the parties alike,” according to the motion.

A solution that would satisfy the Choctaw Nation would be for its Jones Academy Foundation to become a beneficiary. “The Foundation is a not-for-profit, tax deductible, 501(c)(3) charitable organization founded in 2003 and has been actively involved in support of Indian agriculture since its inception,” according to the motion.

Before filing its motion, the Choctaw Nation had asked the Keepseagle lawyers to be included among the firm’s recommended cy pres beneficiaries under the settlement agreement, but that did not happen, according to the motion. “On August 29, 2013, Class Counsel [Joseph Sellers] responded that ‘he will be happy to consider [this] proposal after the court has determined the method for distributing the remaining settlement funds,’” the motion says. “The next day Class Counsel filed the status report proposing to change the method for distributing the Cy Pres Fund.”

Sellers told ICTMN in an interview on September 4 that he preferred to set up a new independent foundation with the leftover monies, despite concerns from the Choctaw Nation and other tribal leaders.

RELATED: Tribes Don’t Like Keepseagle Lawyers Controlling $380 Million of Settlement

“We want to create something that is not encumbered by past alliances,” Sellers said. “We don’t want to be embroiled in past conflicts.”

Some Native Americans, including leaders with the Intertribal Agriculture Council, were told by the Keepseagle lawyers about the foundation idea last December, and, hoping that they would benefit, offered support letters and resolutions for the proposal.

If the foundation idea is rejected by the court, Keepseagle lawyers say that the existing settlement agreement allows class counsel to name non-profit organizations to receive the cy pres funds, with court approval.

The Obama administration has notably not weighed in on the foundation concept. The overseeing court has ordered a response from the administration by September 17, and a hearing is scheduled on the cy pres matter for October 3.