The Obama administration announced a $3.4 billion settlement today in a 13-year-old legal battle over the Interior Department's mismanagement of land trust accounts for American Indians.
Under the agreement, which must be approved in court and requires authorizing legislation in Congress, the government would pay $1.4 billion minus attorneys' fees to hundreds of thousands of plaintiffs in the case, Cobell v. Salazar.
Interior would also create a $2 billion program to buy land from willing sellers, consolidating it into larger, more profitable holdings for tribes, Interior Secretary Ken Salazar said.
Some of the $3.4 billion would create a trust fund for providing higher education to American Indians. Interior will also create a five-member commission to recommend changes to make management of the trust accounts more effective.
"With this announcement, we take an important step towards a sincere reconciliation between the trust beneficiaries and the federal government and lay the foundation for more effective management of Indian trust assets in the future," President Obama said. "I urge Congress to act swiftly to correct this longstanding injustice and to remember that no special appropriations are required."
Salazar said the agreement had the support of Judge James Robertson, who is presiding over the case in the U.S. District Court for the District of Columbia, and of key members of Congress, notably Sens. John McCain (R-Ariz.) and Byron Dorgan (D-N.D.).
The deal is aimed at resolving a legal dispute that began when the plaintiffs sued Interior in 1996, alleging that Interior's mismanagement of the land accounts had bilked American Indians out of billions of dollars since the accounts were created in 1887.
Thirteen years and more than 20 legal opinions later, the amount of compensation remains controversial.
A U.S. district court last year ordered a payment of $455.6 million in restitution, a fraction of the $48 billion that the descendants of the original trust holders sought. Both sides appealed the ruling, and a federal appeals court ruled in July that Interior must account for all of the missing funds (E&ENews PM, July 24).
The plaintiffs still believe they are entitled to more than the $1.4 billion agreed upon today, said the lead plantiff Elouise Cobell.
"There is no doubt this is significantly less than the full benefit to which Indians are entitled," Cobell said. "We are compelled to settle now by the sobering realization that our class grows smaller every year, every day, as our elders die."
Salazar called the settlement "fair and reasonable" and said it lays the groundwork for an arrangement that will address the continued struggle of American Indian communities.
"We are here today to right a past wrong," Salazar said. "At the end of the day, it allow us to move forward."
Despite the disagreement over the amount, Cobell praised the Obama team. "Today, we have an administration that is listening to us, an administration that is willing to admit the mistakes of the past," she said.
Interior touts consolidation plan
The consolidation plan is key to generating more wealth from the land trusts, Interior Deputy Secretary David Hayes said.
"We are living with the legacy of the Dawes Act, which allotted individual Indians with interest in the trust land," he said, referring to an 1887 law that set up the trust.
There are now 4 million owners, and the figure is projected to climb to 11 million by 2030, Hayes said.
The fractured claims have burdened the program with ballooning administrative costs that in some cases exceed the value generated by the land.
Hayes cited one 40-acre parcel that has its revenue divided among 439 owners, two-thirds of whom receive less than $1 dollar annually. Interior estimates the parcel's net worth at $20,000 and spends $40,000 annually administer it.
Salazar hailed the consolidation as part of the Obama administration's overall strategy to improve the lives of American Indians and said the administration would continue to move it forward to address the education, law-enforcement and economic needs of the community.
Cobell called on the administration to keep that promise.
"We know the settlement does not solve the underlying problems, and reform does not stop here," Cobell said. "We have spent too much time looking backward, trying to address the terrible wrongs of the past. Now it is my hope that we can move forward."