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Appropriators question historical accounting plan
Thursday, March 13, 2003

The cost of an historical accounting of Indian funds can be reduced significantly if a federal judge agrees to curtail the already limited project or if Congress imposes a settlement, a top Bush administration official said on Wednesday.

Testifying before a House subcommittee, Deputy Interior Secretary J. Steven Griles said a motion pending in federal court eliminates the need to spend $335 million over five years. He told lawmakers, anxious to rid themselves of the ongoing trust fund lawsuit, that a favorable ruling would reduce the cost by at least $100 million.

"In the minds of many people in Indian Country," he said, "this issue needs to be resolved."

The historical accounting, described in a plan Secretary Gale Norton submitted to U.S. District Judge Royce Lamberth on January 6, comprises the bulk of her fiscal year 2004 budget request. A total of $130 million, out of nearly a half a billion dollars, is sought to look at the Individual Indian Money (IIM) trust and several tribal trust accounts.

Interior appropriations members, including chairman Rep. Charles Taylor (R-N.C.), indicated they were willing to support the effort. But Rep. Norm Dicks (D-Wash.), the panel's ranking member, questioned whether it would be successful. He noted that Congress has approved "every single" dollar that the Bush and Clinton administration have sought to fix the broken system.

"The secretary appeared before this subcommittee two weeks ago and testified that the increased costs dedicated to trust reform are not coming out Indian programs or other programs within the department," he said. "I think it is clear that other programs are affected by these costs."

In response to several rounds of questions, Griles said the summary judgment motion, which relies on a statue of limitations theory, will stop the accounting at 1984. Transactions dating farther back will not be examined, he testified.

Griles also said there are other ways to resolve the dispute. "Potentially, you can dictate a settlement from Congress," he told the lawmakers. He added that Sen. Ben Nighthorse Campbell (R-Colo.), chairman of the Senate Indian Affairs Committee, is pursuing some sort of settlement bill.

The historical accounting, which will be the subject of a trial U.S. District Judge Royce Lamberth plans to hold starting in May, already includes a number of restrictions. The department doesn't plan to do a transaction-by-transaction analysis of the entire IIM trust although the majority of beneficiaries support it.

Accounts that were not open as of 1994, the enactment of the American Indian Trust Reform Act, will not be examined at all. Tribal members who inherited money from their ancestors will not be given assurances that their assets are accurate either.

Citing lost, destroyed or otherwise missing records, critics contend that the Interior cannot complete an accurate accounting. The plaintiffs in the Cobell lawsuit have devised an alternate methodology to reconstruct the accounts.

The General Accounting Office (GAO) has twice testified to Congress that a full reconciliation of Indian funds is "impossible." This assessment was based on a mid-1990s project of the tribal trust accounts, which Griles yesterday asserted had a very low error rate.

The reconciliation, performed by the now defunct Arthur Andersen, found that $2.4 billion was unaccounted. The firm was convicted of obstructing justice for destroying documents in an unrelated corporate accounting scandal.

Tom Slonaker, a former department official who was ousted last year for speaking out against the Bush administration, has also said that an Interior-led accounting isn't likely to succeed.

Griles was accompanied by other officials including acting special trustee Donna Erwin, acting assistant secretary Aurene Martin and Bert T. Edwards, executive director of the Office of Historical Trust Accounting (OHTA). Except for Edwards, who spoke briefly, none provided testimony to the subcommittee.

Relevant Documents:
Statement: Chairman Taylor | Testimony: Steve Griles

Relevant Links:
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust