Interior blasted for foot-dragging on Indian trust fund reform

The Interior Department has not made a good-faith effort to conduct a comprehensive review of the agency's mismanaged Indian trust fund accounts, according to a court-appointed monitor's report released Wednesday. Nearly two years after a federal judge ordered Interior to conduct a review of 300,000 Native American trust accounts dating back more than 100 years, the department has yet to complete the task, said court-appointed monitor Joseph S. Kieffer in his first report on the case. 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. "This report contains many examples of the unwillingness [of Interior officials] to address statutory mandates and the court's order directing the Interior Department to carry out its fiduciary duties on behalf of the Individual Indian Money account holders," Kieffer wrote.

Interior's Bureau of Indian Affairs handles roughly 300,000 trust accounts and is responsible for sending checks to Indian trust beneficiaries. Beneficiaries rely on trust funds for basic living necessities. Allegations of mismanagement of the BIA trust accounting system have plagued the agency for years. The latest development in the lawsuit involving the government's management of Indian trust accounts came one day after Interior Secretary Gale Norton announced reforms aimed at improving the trust accounting process. Interior will create an office to specifically oversee the historical accounting process, and the agency's special trustee for American Indians will have greater authority in putting in place trust fund reform. Stephanie Hanna, a spokeswoman for Interior, said the department is reviewing Kieffer's report and plans to work "responsively and cooperatively" with the court to address the problems associated with the trust accounting system. "We believe that it's most important at this point to focus on the future," Hanna said, indicating that Norton's announcement Tuesday supported those efforts. According to the court monitor's report, Interior published a notice in the Federal Register in April 2000 soliciting comments from stakeholders on how best to conduct its review of accounts. The following December, then-Secretary of the Interior Bruce Babbitt decided to use a statistical sampling of accounts rather than conducting individual reviews of each account. But Kieffer said the attempt to figure out the best method for the historical review was disingenuous. "The Federal Register notice was not a legitimate attempt to garner information at the start of the process to determine how to do an historical accounting," Kieffer wrote. Kieffer criticized Norton for continuing her predecessor's sampling method when she took over at Interior. In February 1999, U.S. District Court Judge Royce C. Lamberth held 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 April of this year, a group of Native Americans filed a motion with Lamberth, alleging that Norton and her lawyers failed to properly inform BIA employees that they could speak freely and without fear of retaliation with a court-appointed official about problems involving trust fund accounts. Interior issued a Feb. 16 memorandum that directed staff to comply with the order and informed employees that they wouldn't be retaliated against for speaking with the special master's office.