Obama administration announces $3.4 billion Indian Trust settlement

Obama administration announces $3.4 billion Indian Trust settlement

[JURIST] The US government announced [press release] Tuesday that a settlement agreement [text, PDF] worth more than $3.4 billion has been reached in a 13-year class action lawsuit [plaintiffs' website; JURIST news archive] concerning the US government's alleged mismanagement of trust funds [DOI materials] for a group of some 500,000 American Indians. US Attorney General Eric Holder and Secretary of the Interior Ken Salazar [official profiles] announced the settlement [DOI backgrounder] of Cobell v. Salazar at a press conference Tuesday. Under the terms of the agreement, litigation will end, and the federal government will distribute funds totaling $1.4 billion to class members. The government will also establish a $2 billion Trust Land Consolidation Fund for the voluntary buy-back and consolidation of fractionated land interests. Finally, the government will establish a $60 million fund to provide better access to higher education for Indian youth. Plaintiffs had rejected [JURIST report] a $7 billion settlement offer in 2007, but named plaintiff Elouise Cobell said [press release] Tuesday:

Although we have reached a settlement totaling more than $3.4 billion dollars, there is little doubt this is significantly less than the full amount to which individual Indians are entitled. …

Nevertheless we are compelled to settle now by the sobering realization that our class grows smaller each year, each month, and every day, as our elders die, and are forever prevented from receiving their just compensation. We also face the uncomfortable, but unavoidable fact that a large number of individual money account holders currently subsist in the direst poverty, and this settlement can begin to address that extreme situation and provide some hope and a better quality of life for their remaining years.

US President Barack Obama called the settlement [press release], "an important step towards a sincere reconciliation between the trust beneficiaries and the federal government and lay the foundation for more effective management of Indian trust assets in the future."

Congress established the Indian Trust in 1887 to hold proceeds from government-arranged leases of Indian lands. In July, the US Court of Appeals for the District of Columbia Circuit [official website] ordered [JURIST report] the US Department of the Interior (DOI) [official website] to provide an accounting in the case. Both parties appealed two separate rulings from the US District Court for the District of Columbia [official website]. In January 2008, district judge James Robertson ruled [JURIST report] that the DOI "unreasonably delayed" the accounting of billions of dollars of American Indian money, holding that it was impossible for the DOI or Congress to remedy the breach. In August 2008, Robertson ordered [JURIST report] the federal government to pay $455.6 million in restitution, despite plaintiffs' claims that they were owed $58 billion. In an incendiary opinion in 2005, district judge Royce Lamberth required the DOI to apologize to the plaintiffs [JURIST report] for its handling of the Trust, and to admit that information being provided to them regarding outstanding lost royalties on earnings from Indian land may be unreliable. In 2006, the DC Circuit removed Lamberth [JURIST report] from the case and reassigned it to Robertson.