Individual Indian Money Accounts Trust Fund (Cobell v. Babbitt)

In 1996, the Native American Rights Fund and private attorneys filed a lawsuit to hold the federal government accountable for the on-going mismanagement of 500,000 Individual Indian Money (IIM) trust fund accounts. By law, the accounts are held in trust by the government and are comprised primarily of money that is earned by Indians through leases of their land for oil, gas, timber, ranching and farming.

A report released by the U.S. District Court on December 6, 1999, revealed that lawyers for the U.S. Department of the Treasury destroyed 162 boxes of documents relevant to the trust funds case and then covered it up. Special Master Alan Balaran submitted the report following a month-long investigation into the matter. He concluded in his report that the Treasury cover-up continued even during proceedings earlier this year, which eventually resulted in contempt citations against Treasury Secretary Rubin and Interior Secretary Babbitt for violating the Court's discovery orders.

In a historic and long-awaited decision, Federal District Court Judge Royce C. Lamberth ruled on December 21, 1999, that the federal government has breached its fiduciary duties to the individual Indian fund beneficiaries, and cannot be trusted to carry out trust management reform without continued oversight by the Court. Calling decades of Indian trust fund mismanagement by the United States "fiscal and governmental irresponsibility in its purest form," Judge Lamberth vowed to retain jurisdiction over the case for at least five years to ensure that the government's promises to reform are kept. He ordered the government to submit quarterly reports on its progress in implementing trust reform and stressed that he would take necessary action in the event that the government does not appear to be living up to its promises. The judge characterized the outcome of the first phase of this case as a "stunning victory" for the Indian plaintiffs.

On January 3, 2000, the United States filed a petition to appeal Lamberth's decision. The government is appealing whether the Court can order the U.S. to perform an accounting and whether the Court can have oversight of the Department of the Interior and Department of the Treasury's repair of the trust management system. The appeal has been scheduled for oral argument on September 5, 2000.

The government submitted its first quarterly report on trust reform to Judge Lamberth on March 1, 2000. The report confirmed that most of the promises made by the government during trial were empty. Trust reform is already seriously off schedule. As a result, NARF intends to ask the Court to appoint a Special Master to actively oversee trust reform from this point forward.

Meanwhile, NARF continues to prepare for trial in the second phase of the case. The second trial, a date for which has not yet been set, will involve an accounting by the government.
© Justice, spring 2000, published by the Native American Rights Fund (NARF)