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Congress urged to settle Cobell lawsuit for billions
Thursday, March 2, 2006

Witnesses at a joint House-Senate hearing on Wednesday urged members of Congress to settle the Cobell v. Norton trust fund lawsuit for billions of dollars.

The Senate Indian Affairs Committee and the House Resources Committee heard from a slate of mediation, financial and tribal leaders. Nearly all of them said American Indian beneficiaries deserve billions for the mismanagement of their trust funds.

"There's no dispute about liability," testified John Bickerman, a dispute resolution expert. "The courts have proven it, the plaintiffs have been successful in their efforts and liability is just not an issue."

Bickerman was one of two mediators appointed in 2004 by Congress to try and resolve the lawsuit, filed in 1996. Although no agreement was reached, he said $13 billion -- the amount the Cobell plaintiffs and the Bush administration agree has passed through the Individual Indian Money (IIM) trust -- could be used as a foundation for determining the final payout.

Depending on the error rate and interest rate, a settlement could be worth anywhere from $5.6 billion to $9.8 billion, Bickerman said. He didn't recommend these figures outright but urged lawmakers to reject the Interior Department's suggestion that less than $500 million is owed.

Stuart E. Eizenstat, a former U.S. ambassador who helped settle the class action Holocaust lawsuit for $8 billion, advocated a "rough justice" approach. He said it was fruitless to spend time developing a methodology to examine the IIM trust.

"In coming to a number, which almost certainly should be in the billions," he testified, "the committees should take into account the passage of time, the lost investment opportunities, the massive negligence, or worse, of the Interior Department, the fact that you are really returning their money and similar factors."

Without a settlement, tribal leaders told the committee that Indian Country will continue to suffer as the federal government continues to divert funds from reservation programs to pay for the lawsuit and related activities. Since 1996, the Clinton and Bush administrations have spent $3.4 billion on trust reform.

"At this time we are losing approximately $100 million annually out of Indian programs to pay for the accounting and the reorganization reforms that tribes opposed," said Joe Garcia, the president of the National Congress of American Indians.

The leaders of the House and Senate committees have introduced identical legislation to settle the case and make other changes. Key sticking points include the settlement figure, the scope of the settlement and the distribution method of the settlement funds

Bickerman said the settlement should resolve all trust funds mismanagement claims but not land mismanagement claims. The former category focuses on whether IIM money was collected, properly deposited and properly disbursed while the latter category involves whether trust beneficiaries received the fair amount for use of their assets.

Eizenstat, on the other hand, said the settlement should encompass trust funds mismanagement and land mismanagement claims. Bickerman later said both solutions could be considered.

The Cobell plaintiffs and most tribal leaders have objected to a provision in the settlement legislation that would allow the Treasury Department to distribute the funds. Eizenstat agreed that it is probably not in the best interests of Indian Country to allow a named defendant in the lawsuit to exercise such authority.

Instead, he said an independent federal entity could be created to take care of the distribution.

Elouise Cobell, the lead plaintiff, said she was encouraged by the hearing. "It is especially noteworthy that all the independent people who testified today recognized that liability has been established and any settlement must be in the multiple of billions of dollars," she said in a statement.

According to Congressional staff, the Bush administration has not officially responded to the settlement legislation, although officials have indicated opposition to key provisions. "We are supportive," associate deputy Interior Jim Cason said at the NCAI winter session in Washington on Monday," but the devil is in the details."

Tribal leaders urged the two committees to move quickly on the legislation, something McCain promised to do. But whatever the amount that is selected, he acknowledge no one will be satisfied.

"I can guarantee you will be roundly criticized but I think its the right and courageous thing to do to pick a number and try to end this," Bickerman said. His co-mediator, former federal judge Charles Renfrew, was unable to attend the hearing.

Trust Reform Legislation:
S.1439 | H.R.4322

Elouise Cobell Letter:
Dear Lawmakers (February 23, 2006)

Jim Cason Letter:
Dear Tribal Leader (January 26, 2006)

Cobell Court Fees:
Memorandum and Order (December 19, 2005)

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
National Congress of American Indians - http://www.ncai.org
Intertribal Trust Fund Monitoring Association - http://www.itmatrustfunds.org

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