Interior creates new office to manage troubled Indian trust fund reform

Interior Secretary Gale Norton last week announced the creation of a new office to oversee management of 300,000 Indian trust accounts.

The new Bureau of Indian Trust Assets Management will oversee reform of the department's troubled trust accounting system, consolidating duties currently performed by several offices. The department's latest effort to improve trust fund management comes two weeks before Norton and several other government officials are scheduled to appear in federal court on contempt charges related to a 1996 lawsuit against the government.

"The Bureau of Indian Trust Assets Management is needed to ensure that we move forward in the management of Indian trust reform," Norton said. "This administration is committed to taking action now that will chart a new course for positive, productive trust reform that will work to benefit American Indian tribes."

An assistant secretary who has not yet been named will lead the new bureau, which will consolidate the functions of several offices within Interior, including the Office of the Special Trustee for American Indians and the Office of Historical Trust Accounting. Management consulting firm Electronic Data Systems recommended that Interior create a central office to handle trust fund reform and establish greater accountability for trust management.

Interior's Bureau of Indian Affairs is responsible for sending checks to Indian trust beneficiaries who rely on trust funds for basic living necessities. The accounts were set up more than a century ago to compensate Native Americans for the use of their land.

Allegations of mismanagement of the BIA trust accounting system have plagued the agency for years, culminating in a 1996 lawsuit filed against Interior by Elouise Cobell, founder and current chair of the Blackfeet National Bank.

Cobell, a member of the Blackfeet tribe in Montana, called the reorganization plan "another typical, last-minute, backs-to-the-wall effort" to avoid contempt of court charges, which the plaintiffs filed in April. Norton is scheduled to appear in court Nov. 30.

"The bottom line is that the plan released today is a clear admission by the government that everything we, the Indian plaintiffs, have been alleging for five and a half years was true," Cobell said.

In December 1999, U.S. District Court Judge Royce C. Lamberth ordered Interior to conduct a review of 300,000 Native American trust accounts dating back more than 100 years. Earlier that year, Lamberth held then-Secretary Bruce Babbitt; his assistant secretary for Indian affairs, Kevin Gover; and former Treasury Secretary Robert Rubin in contempt of court for failing to produce records involved in the case.

In July, a court-appointed monitor's report concluded that Interior had not made a good-faith effort to conduct a comprehensive review of the agency's mismanaged Indian trust fund accounts, nearly two years after Lamberth's order.

Joseph S. Kieffer, who has been overseeing the four-year old lawsuit since April, also accused agency officials of foot-dragging on reforms and using a questionable statistical sampling of accounts in its historical review.

At that time, Norton also announced reforms aimed at improving the trust accounting process, including the creation of the Office of Historical Trust Accounting and more authority for the agency's trustee to put reform in place.

The National Congress of American Indians (NCAI) criticized Interior for devising the reorganization without consulting tribes and for failing to make overall substantive reforms to the trust accounting system.

"Interior has a well-documented track record of repeatedly making short-term decisions in response to court-imposed deadlines while failing to develop a rational, long-term plan for structural trust reform," said NCAI President Susan Masten. NCAI is the oldest and largest tribal government organization in the country.

Interior Deputy Secretary J. Steven Griles and Assistant Secretary for Indian Affairs Neal McCaleb will discuss the reorganization plan with tribal leaders at NCAI's annual conference next week in Spokane, Wash.

Masten said Interior must undergo a "shift in the paradigm of management" for real change to occur. "Decisions cannot be made with regard to short-term political interests, but must conform to long-term management goals-a political appointee has no ability to change this paradigm," she said.

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