[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
PROPOSED SETTLEMENT OF THE
COBELL V. SALAZAR LITIGATION
=======================================================================
OVERSIGHT HEARING
before the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
Wednesday, March 10, 2010
__________
Serial No. 111-46
__________
Printed for the use of the Committee on Natural Resources
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
or
Committee address: http://resourcescommittee.house.gov
U.S. GOVERNMENT PRINTING OFFICE
55-393 WASHINGTON : 2010
-----------------------------------------------------------------------
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001
COMMITTEE ON NATURAL RESOURCES
NICK J. RAHALL, II, West Virginia, Chairman
DOC HASTINGS, Washington, Ranking Republican Member
Dale E. Kildee, Michigan Don Young, Alaska
Eni F.H. Faleomavaega, American Elton Gallegly, California
Samoa John J. Duncan, Jr., Tennessee
Frank Pallone, Jr., New Jersey Jeff Flake, Arizona
Grace F. Napolitano, California Henry E. Brown, Jr., South
Rush D. Holt, New Jersey Carolina
Raul M. Grijalva, Arizona Cathy McMorris Rodgers, Washington
Madeleine Z. Bordallo, Guam Louie Gohmert, Texas
Jim Costa, California Rob Bishop, Utah
Dan Boren, Oklahoma Bill Shuster, Pennsylvania
Gregorio Sablan, Northern Marianas Doug Lamborn, Colorado
Martin T. Heinrich, New Mexico Adrian Smith, Nebraska
George Miller, California Robert J. Wittman, Virginia
Edward J. Markey, Massachusetts Paul C. Broun, Georgia
Peter A. DeFazio, Oregon John Fleming, Louisiana
Maurice D. Hinchey, New York Mike Coffman, Colorado
Donna M. Christensen, Virgin Jason Chaffetz, Utah
Islands Cynthia M. Lummis, Wyoming
Diana DeGette, Colorado Tom McClintock, California
Ron Kind, Wisconsin Bill Cassidy, Louisiana
Lois Capps, California
Jay Inslee, Washington
Joe Baca, California
Stephanie Herseth Sandlin, South
Dakota
John P. Sarbanes, Maryland
Carol Shea-Porter, New Hampshire
Niki Tsongas, Massachusetts
Frank Kratovil, Jr., Maryland
Pedro R. Pierluisi, Puerto Rico
Vacancy
James H. Zoia, Chief of Staff
Rick Healy, Chief Counsel
Todd Young, Republican Chief of Staff
Lisa Pittman, Republican Chief Counsel
------
CONTENTS
----------
Page
Hearing held on Wednesday, March 10, 2010........................ 1
Statement of Members:
Cassidy, Hon. Bill, a Representative in Congress from the
State of Louisiana......................................... 28
Christensen, Hon. Donna M., a Delegate in Congress from the
Virgin Islands............................................. 8
Faleomavaega, Hon. Eni F.H., a Delegate in Congress from
American Samoa............................................. 6
Grijalva, Hon. Raul M., a Representative in Congress from the
State of Arizona........................................... 8
Hastings, Hon. Doc, a Representative in Congress from the
State of Washington........................................ 3
Kildee, Hon. Dale, a Representative in Congress from the
State of Michigan.......................................... 5
Prepared statement of.................................... 5
Napolitano, Hon. Grace F., a Representative in Congress from
the State of California.................................... 7
Rahall, Hon. Nick J., II, a Representative in Congress from
the State of West Virginia................................. 1
Prepared statement of.................................... 2
Statement of Witnesses:
Cobell, Elouise C., Lead Plaintiff in Cobell v. Salazar,
Browning, Montana.......................................... 50
Prepared statement of.................................... 53
Class Action Settlement Agreement dated December 7, 2009. 57
Agreement on Attorneys' Fees, Expenses, and Costs........ 57
Dorris, William E., Managing Partner, Kilpatrick Stockton
LLP, Washington, D.C....................................... 61
Finley, Hon. Michael O., Director, Inter-Tribal Monitoring
Association on Indian Trust Funds, Albuquerque, New Mexico. 9
Prepared statement of.................................... 10
Hayes, Hon. David, Deputy Secretary, U.S. Department of the
Interior, Washington, D.C.................................. 33
Prepared statement of.................................... 35
Monette, Richard, Professor of Law,, University of Wisconsin,
Madison, Wisconsin......................................... 17
Prepared statement of.................................... 19
Nunez, Hon. Austin, Chairman, Indian Land Working Group, and
Chairman, San Xavier District of the Tohono O'odham Nation,
Tucson, Arizona............................................ 13
Prepared statement of.................................... 15
Response to questions submitted for the record........... 16
Perrelli, Hon. Thomas J., Associate Attorney General, U.S.
Department of Justice, Washington, D.C..................... 37
Prepared statement of.................................... 39
Additional materials supplied:
Rosebud Sioux Tribe, Statement submitted for the record...... 63
Squire, Percy, Percy Squire Co., LLC, Columbus, Ohio, Letter
submitted for the record................................... 66
OVERSIGHT HEARING ON ``PROPOSED SETTLEMENT OF THE COBELL V. SALAZAR
LITIGATION.''
----------
Wednesday, March 10, 2010
U.S. House of Representatives
Committee on Natural Resources
Washington, D.C.
----------
The Committee met, pursuant to call, at 10:12 a.m. in Room
1324 Longworth House Office Building, Hon. Nick J. Rahall, II,
[Chairman of the Committee] presiding.
Present: Representatives Rahall, Kildee, Faleomavaega,
Napolitano, Grijalva, Costa, Sablan, Heinrich, Christensen,
Baca, Herseth Sandlin, Hastings, Smith, Lummis, and Cassidy.
STATEMENT OF HON. NICK J. RAHALL II, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WEST VIRGINIA
The Chairman. The Committee meets today to hear testimony
on the Proposed Settlement of the Cobell v. Salazar litigation.
Under the proposed $3.4 billion agreement, $1.5 billion would
be used to settle historical accounting claims, as well as
mismanagement claims.
The remaining $2 billion would be used to address the
fractionated Indian lands problem. This settlement agreement
will end almost 14 years of contentious litigation.
For the first time ever, the parties have come together and
agreed upon a proposed settlement. I commend the parties for
overlooking your differences, trying to resolve the issues, and
put an end to the court battle.
While I support settlement of this case, some in Indian
Country have raised questions and concerns. The parties have
responded to many of these issues, and I praise Elouise Cobell
for sending wide-reaching, lengthy e-mails answering questions
that she has received.
I encourage the Cobell parties to view this hearing as
another forum in which to educate not only Congress, but also
Indian Country, on the agreement. Upon acceptance of this
agreement, a Secretarial Commission on Trust Reform would be
established by the Interior Department.
This is a welcome initiative and long overdue, but it will
only be successful if the tribes are at the table from the
beginning, and the Department truly listens to what they have
to say, and the Department must remember one size does not fit
all.
I would be remiss if I did not take a moment to reflect on
what has brought us to this point. Over 100 years of
mismanagement of Indian trust funds by the United States and
decades of ignoring the problem.
I have been here long enough to remember our former
colleague, Mike Synar from Oklahoma, back in the mid-1980s
spending five years on a report detailing the breadth and scope
of the problem.
That report started the Congressional focus on fixing the
problem. Since that time, Congress has held numerous hearings,
passed legislation, and appropriated millions of dollars to
reform trusts on management, and give Indian trustees greater
control over their funds.
Many times I have sat in this room and heard from the
Interior Department that they had plans for a new, latest,
greatest computer system that would fix all the problems.
Do not misunderstand me. I believe those plans were made
with the best intentions, but the problem remained that moving
data to any one system could not fix all the problems, and no
computer system can recreate documents lost decades ago.
Many people have worked on the reform issue over the years,
and they have moved on. The one constant through it all has
been Elouise Cobell. I have nothing but the utmost respect and
admiration for Elouise. She has not once faltered in her
mission to mend the system and ensure that future Indian
allottees benefit from a well managed trust fund process.
Elouise, we thank you for your tenacity, and all of your
hard work. The trust fund mismanagement lawsuit has been very
frustrating to all involved and, at times, tempers overheated.
Thankfully, we have with us today only persons dedicated to
bringing this chapter to a close, and willing to do the work
needed to see that that happens. I look forward to their
testimony. I recognize the Ranking Member.
[The prepared statement of Chairman Rahall follows:]
Statement of The Honorable Nick J. Rahall, II, Chairman,
Committee on Natural Resources
The Committee meets today to hear testimony on the proposed
settlement of the Cobell v. Salazar litigation.
Under the proposed $3.4 billion agreement, $1.4 billion would be
used to settle historical accounting claims as well as mismanagement
claims. The remaining $2 billion would be used to address the
fractionated Indian lands problem.
This Settlement Agreement will end almost 14 years of contentious
litigation. For the first time ever, the parties have come together and
agreed upon a proposed settlement. I commend the parties for
overlooking their differences, trying to resolve the issues and putting
an end to the court battle.
While I support settlement of this case, some in Indian Country
have raised questions and concerns. The parties have responded to many
of these issues and I praise Elouise Cobell for sending wide reaching,
lengthy e-mails answering questions she has received.
I encourage the Cobell parties to view this hearing as another
forum in which to educate, not only Congress, but also Indian Country,
on the agreement.
Upon acceptance of this agreement, a Secretarial Commission on
Trust Reform would be established by the Interior Department. This is a
welcome initiative and long overdue. But it will only be successful if
the tribes are at the table from the beginning and the Department truly
listens to what they have to say. And the Department must remember, one
size does not fit all.
I would be remiss if I did not take a moment to reflect on what has
brought us to this point - over 100 years of mismanagement of Indian
trust funds by the United States and decades of ignoring the problem.
I have been here long enough to remember our former colleague, Mike
Synar from Oklahoma, back in the mid 1980s spending five years on a
report detailing the breadth and scope of the problem. That report
started the Congressional focus on fixing the problem. Since that time
Congress has held numerous hearings, passed legislation, and
appropriated millions of dollars to reform trust fund management and
give Indian trustees greater control over their funds.
Many is the time I have sat in this room and heard from the
Interior Department that they had plans for a new, latest, greatest,
computer system that would fix all the problems. Do not misunderstand
me; I believe those plans were made with the best intentions. But the
problem remained that moving data to any one system could not fix all
of the problems and no computer system can recreate documents lost
decades ago.
Many people have worked on the reform issue over the years, and
many have moved on. The one constant, through it all, has been Elouise
Cobell.
I have nothing but the utmost respect and admiration for Elouise.
She has not once faltered in her mission to mend the system and ensure
that future Indian allottees benefit from a well managed trust fund
process.
Elouise, we thank you for your tenacity and all of your hard work.
The trust fund mismanagement and law suit has been very frustrating
to all involved and at times tempers overheated. Thankfully we have
with us today only persons dedicated to bringing this chapter to a
close and willing to do the work needed to see that happens.
I look forward to the testimony. Thank you.
______
STATEMENT OF HON. DOC HASTINGS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF WASHINGTON
Mr. Hastings. Thank you, Mr. Chairman, and thank you for
scheduling this meeting on Cobell v. Salazar, the settlement
agreement. Mr. Chairman, it was on December 7 of last year that
this settlement was announced, and it was greeted with
widespread hope across Indian Country that a resolution was at
hand.
I, too, am very hopeful that a fair treatment for
individual Indians is close at hand. This lawsuit, as the
Chairman has mentioned, has gone on far too long, and it is my
first priority that individual Indians are treated fairly in
this matter.
However, I must admit a degree of concern that the $3.4
billion settlement that was announced on December 7 had an
initial expiration date of December 31, only 24 days later.
That deadline was subsequently extended to February 28, and
now to April 16. So my concerns are twofold. First, the urgency
for action by the parties to the settlement, at least thus far,
has not been open to any transparent action by this Congress.
We are over three months after the initial settlement, and
now we are holding our first public hearing, and I commend
again the Chairman for doing that. But this hearing does come
only after this Committee was contacted by individual Indians
and several Indian organizations simply asking for more
information on what this settlement means.
It is troubling that affected Indians have felt concern
that there may be a rush to action before public hearings were
held so that they may better understand the settlement. My
second concern has been the astonishing fact that no actual
bill to implement the settlement has yet been introduced in
either house. For three months, there have been no legislative
attempts before either the House or the Senate, and more
importantly, there is no introduced bill available to be read
by those who are directly affected by the settlement.
So deadlines are being imposed on Congress to act with
uncharacteristic swiftness, and yet there is no introduced bill
for Congress to even look at, or those interested parties to
look at.
This raises the question of when and how this settlement
agreement is going to be enacted. Will it be handled in an
open, transparent manner that respects the rights of individual
Indians to see and understand what is happening, or will it be
done in a manner that instead puts the emphasis on speed and
haste.
On the details of the settlement itself, there are several
matters that I certainly would like the witnesses to address,
issues that have been raised by Indians in their correspondence
with this Committee.
First, I want to distinguish between the $1.4 billion
portion of the settlement agreement that resolves the Indian
historical accounting class action lawsuit, and also
extinguishes all potential damages claimed, and the $2 billion
portion that provides funding to existing authorized Department
of the Interior programs to purchase fractionated lands. Those
two issues.
The $1.4 billion will provide a cash payment of $1,000 to
each Indian account holder. While the class action case was not
a money claims case, there is clearly merit in settling it by
paying cash awards and starting with a clean slate.
The bulk of the $1.4 billion portion, however, will go to
settling damage claims, which were not litigated in the Cobell
case. It is my understanding that a key reason behind the need
for Congressional action on the settlement agreement is this
matter of damages claimed.
The District Court has no jurisdiction over them, and
legislation is needed to create these claims, while
simultaneously resolving them. I have to admit that this does
raise a degree of concern that Congress would serve as the
lawyer, judge, and jury, in unilaterally dispensing with the
claims of thousands of individual Indians.
However, the parties to the settlement agreement have
concluded this is a critical component, and they should weigh
very heavily in our consideration. I certainly respect that,
though it is important to ask for information on how this
affects individual Indians, and whether they are being treated
fairly in this process.
And, second, Mr. Chairman, there is the matter of the
attorney fees. Reports have said that lawyers could be paid
between $50 million and $100 million. Now that is a very high
amount of money. I believe it is important to understand what
specific justification exists for this large payment to the
lawyers in this case, and whether they are collecting any fees
from the settlement of damage claims that they did not
represent.
Lawyers deserve to be paid fairly for the actual work that
they perform, but there appears to be no accounting or records
to back up this high level of fees. Congress should have that
information, especially as it is my understanding that the fees
paid to lawyers come from the same pot of money that
compensates individual Indians.
When every dollar that goes into the pocket of a lawyer
comes out of the pocket of an individual Indian, I think it is
our responsibility as Members of Congress to look at this very
closely.
Last, greater clarity would be helpful on the portion of
the settlement agreement that provides $2 billion for the
consolidation of fractionated Indian lands. How is this related
to the settling of claims?
Was it included at the request of the Plaintiffs or the
Government? What oversight will be provided to ensure the best
benefit to taxpayers, individual Indians, and Indian tribes as
a result of this portion and this part of the settlement.
In conclusion, I do want to thank you again, Mr. Chairman,
for holding this hearing. I believe it is an important step and
opportunity to improve our understanding and the understanding
of the affected Indians of this settlement agreement. So, with
that, I thank you, and I yield back my time.
The Chairman. Do other Members wish recognition? The Chair
of our Native American Caucus, Mr. Kildee.
STATEMENT OF HON. DALE E. KILDEE, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MICHIGAN
Mr. Kildee. Thank you, Mr. Chairman. First of all, I want
to commend President Obama, Attorney General Holder, and
Interior Secretary Salazar, for their attention to this matter,
and their continued efforts to strengthen the relationship
between the United States and the tribal nations.
And I want to commend Elouise Cobell. Tenacity is a great
virtue, and she certainly has exercised that tenacity for
justice. When you are going to be a seeker after justice, you
have to pursue your justice and the justice of those with whom
you are associated.
She has done a wonderful job in this, and I think sets an
example for us in the Congress, which has an obligation to
pursue justice. And let us take an example from her, who would
not give up, and pursued this relentlessly with a great
devotion.
And I think this is one where we have to give our devotion
to this, and that this is a moral issue, more than just a legal
issue. It is a moral issue, and we have to do what is morally
and legally right, and make these things as right as humanly
possible.
We know that records have been lost, and this figure has
been agreed upon, but I hope that when I stand before my tribes
that I can present as good a case of having done good as
Elouise Cobell has done. I yield back the balance of my time.
The Chairman. The Gentleman from American Samoa, Mr.
Faleomavaega.
[The prepared statement of Mr. Kildee follows:]
Statement of The Honorable Dale E. Kildee, a Representative in Congress
from the State of Michigan
Good morning Mr. Chairman, I want to thank you for scheduling this
hearing today. I first would like to pledge my support for ending the
14 years of litigation surrounding this case.
I commend President Obama, Attorney General Holder and Interior
Secretary Salazar for their attention to this matter and their
continued efforts to strengthen the relationship between the United
States and tribal nations.
As you know, the Cobell case has been in litigation for over 13
years. Late last year, the parties reached an agreement to settle the
case for $3.4 billion. But the agreement will not take effect unless
Congress passes legislation to authorize and fund the Settlement
Agreement. Legislation is needed to ensure that the court has
jurisdiction over the terms of the Settlement Agreement and to ensure
the availability of Judgment Funds to settle the claims.
The courts in this case have repeatedly found the United States to
be in violation of its trust responsibilities to Native Americans. The
Settlement Agreement resolves the claims of those Native Americans and
also fixes the problems that caused the mismanagement of over three
hundred thousand trust accounts held by Native Americans.
This decision will help make amends for the past mismanagement of
Indian trust funds by the U.S. Government, as well as bring much needed
resources to address fractionated Indian lands.
While this is an important step, this is not the end of the fight
for justice on behalf of Indian trust assets, and I will continue to
fight to ensure that our tribes are treated in a fair and equitable
manner.
I, along with several of my colleagues will be sending a letter to
House leadership urging them to provide immediate assistance and
support in passing legislation to approve and fund the Cobell v.
Salazar Settlement Agreement.
As you are aware, the settlement agreement originally required
Congressional approval by Dec 31, 2009, which was extended until
February 28, 2010. Fortunately the parties have again agreed to extend
this deadline until April 16, 2010.
I want to applaud Chairman Rahall with working the Senate Indian
Affairs Committee to seek a timely conclusion to this pending
litigation. I urge my colleagues to support a timely resolution to this
litigation. I look forward to hearing from the witnesses today. Thank
you.
______
STATEMENT OF HON. ENI F.H. FALEOMAVAEGA, A DELEGATE IN CONGRESS
FROM AMERICAN SAMOA
Mr. Faleomavaega. Thank you, Mr. Chairman. As a Member of
our American Indian Congressional Caucus, I do thank the
Gentleman from Michigan, and also our colleague from Oklahoma,
Mr. Cole, as Co-Chairmen of our Congressional Caucus for
American Indians.
And I do want to thank you and Mr. Hastings for what I
thought were pretty comprehensive statements in terms of the
situation that we are now in. The only concern that I have, Mr.
Chairman, is that 384,000 accounts involving some 250 Indian
tribes, 100 years of mismanagement, that we can only come up
with $3.5 billion.
Something is missing here, Mr. Chairman, I submit, and I
think that this is one reason why we had the courageous efforts
by Ms. Elouise Cobell, because not only the Congress was not
able to resolve the thing. It seemed like getting this $3.5
billion is like pulling teeth.
Oh, but we can spend $900 billion in fighting the war in
Iraq, and the five million Native Americans, and all of the men
and women who serve in the Armed Forces, and who bleed and die
for our country, I just want to say that something is amiss
here, Mr. Chairman.
And I really honestly believe that $3.5 billion is a
pittance, and I think that likely what Mr. Hastings was saying
that paying our attorneys $50 million to $100 million, there is
something wrong with that, too.
I do want to associate myself with the comments that Mr.
Hastings has made. The concerns about how we are proceeding
with this effort, this so-called settling of these hundred
years of mismanagement.
The fact that there were even efforts of reorganizing the
Bureau of Indian Affairs, nothing has come about in that, on
that situation. But I do want to say that I do have some very
serious questions about how we come up with a figure of $3.5
billion. I felt at least it should have been $9 billion to $10
billion, and even that was very difficult to ascertain.
And supposedly we had given every opportunity to the
Department of the Interior to come up with the numbers, come up
with the figures, and if they couldn't, then there has got to
be a better way of calculating exactly what was lost, what was
stolen, or in terms of the mismanagement on the part of our
government to be the trustees of the resources that were
rightfully owned by the Indian tribes.
Again, I do want to thank you, Mr. Chairman, for calling
this hearing. I hope that it won't be the last, and there will
be more in the coming weeks and months, and let us just look
into it a little more and a little deeper.
And, I, too, want to say how much utmost respect I have for
Elouise Cobell for her courage, for her commitment, not only on
her own behalf, but certainly among all the Indian tribes that
were affected by the bottom line mismanagement by the Bureau of
Indian Affairs, and the accounts of our Native American people.
This is just a real sad commentary. I don't know if I
should stand up and say hooray for $3.5 billion, or I should
say that something is wrong here. I think our Indian Americans
deserve a lot more than this, and I thank you, Mr. Chairman.
The Chairman. Are there other Members who wish to make
opening comments? The gentlelady from California.
STATEMENT OF HON. GRACE NAPOLITANO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mrs. Napolitano. Thank you, Chairman Rahall, for the
hearing. I have sat through these Committee hearings in this
room for almost 12 years, a little over 12 years, and listening
to many of the things through the years, it is very apparent
that we have not paid--and as the comments by Mr. Faleomavaega,
and my colleague, Mr. Kildee, there is a lot missing, and
somehow we are not focused on being able to rectify the wrongs
that have been done to the Native Americans for decades.
In my Subcommittee on Water and Power, we continue to honor
the tribes water claims. I think there is a lot of work to be
done, and I thank the Administration for trying to get moving.
I just feel that somehow we feel frustrated that we may not
be moving fast enough, or wide enough, to be able to understand
that if we help our Native American Tribes that they can take
care of their own.
They will be able to succeed in the economy by educating
their children, and being able to do all the things that we
have not kept them from, but not helped them. We have taken
from, but not helped them.
So not even to see that there has been a benefit settlement
to reimburse families and communities is really a travesty upon
our own people, because Native Americans are our first
Americans.
We need to bring this to a closure and whatever we can do
to help, Mr. Chairman, we are ready to do so, and thank you so
very much for this hearing.
The Chairman. I thank the gentlelady. The gentleman from
Arizona, Mr. Grijalva.
STATEMENT OF HON. RAUL M. GRIJALVA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ARIZONA
Mr. Grijalva. I want to thank you, Mr. Chairman, and thank
you for the hearing. Let me briefly just associate myself with
the comments that Mr. Kildee made, and also take the privilege
and the opportunity to welcome my good friend, Austin Nunez,
from back home.
Welcome, and again, thank you for the hearing. It is
important, and the sooner that we move, the sooner we can begin
the resolution to this issue that has been around too long.
Thank you, sir.
The Chairman. Any other comments? Opening statements? The
gentlelady from the Virgin Islands, Dr. Christensen.
STATEMENT OF HON. DONNA M. CHRISTENSEN, A DELEGATE IN CONGRESS
FROM THE VIRGIN ISLANDS
Mrs. Christensen. Just briefly, Mr. Chairman. I want to
thank you for holding this hearing, and I have been here for 14
years. I remember my first joint hearing over at the Senate on
this issue, and being left to chair what was a very, very
difficult hearing.
But I am just glad that we are coming close to ending an
injustice that has existed for far too long. There is still
much work to be done, but I want to take this opportunity to
also applaud Ms. Cobell, and those who supported her, and look
forward to the testimony of our witnesses this morning.
The Chairman. OK. If there are no further opening
statements, we will now recognize--well, before I recognize the
witnesses, I would like to note that our longtime staff
director in the Office of Indian Affairs, Marie Howard, is
retiring at the end of this month.
This will be the last hearing that she will staff. There
she is. And for almost 30 years now, Marie has worked on this
Committee, fighting for Indian Country, and on behalf of all of
us on the Committee, the Members on the Committee want to
express our appreciation to Marie, both professionally and
personally, for her dedication, and her professionalism, and
the manner in which she has so well conducted herself over
these 30 years.
So, Marie, congratulations to you, and we want to wish you
the best as you continue to work for Indian Country.
[Applause.]
Mr. Faleomavaega. Will the Chairman yield?
The Chairman. Yes, gladly.
Mr. Faleomavaega. I might also add the fact that just about
every major piece of legislation affecting our Native American
community has Marie Howard's signature on it. I also want to
commend her and thank her for a tremendous service that she has
given on behalf of our Native American community throughout the
country. Marie, you deserve every bit of it. Thank you.
The Chairman. OK. Our first panel is composed of the
following individuals: The Honorable Michael Finley, the
President of the Inter-Tribal Monitoring Association on Indian
Trust Funds, from Albuquerque, New Mexico; The Honorable Justin
Nunez, Chairman, Indian Land Working Group, Tucson Arizona; and
Professor Richard Monette, the University of Wisconsin,
Madison, Wisconsin.
Gentlemen, we welcome you to the Committee on Natural
Resources today. We do have your prepared testimony. It will be
made part of the record as if actually read, and you are
encouraged to summarize within the five-minute time frame. And
do you want to go in the order that I introduced you? Mr.
Finley then.
STATEMENT OF HON. MICHAEL FINLEY, PRESIDENT, INTERTRIBAL
MONITORING ASSOCIATION ON INDIAN TRUST FUNDS, ALBUQUERQUE, NEW
MEXICO
Mr. Finley. Good morning, Chairman Rahall, and Ranking
Member Doc Hastings, and Members of the Committee, my name is
Michael Finley, and I serve as Chairman to the Board of
Directors of the Intertribal Monitoring Association on Indian
Trust Funds.
However, I am also Chairman of my own tribe, the
Confederated Tribes of the Colville Reservation, Northeast
Washington State. I appreciate the opportunity to be here today
to present ITMA's views regarding the proposed settlement of
the Cobell litigation.
The Committee has my prepared statement, and I would like
to take the opportunity to highlight a few of those areas.
Since the onset, ITMA has long supported an honorable and just
settlement of the Cobell litigation. However, as the Chairman
has pointed out, we are talking about a hundred years of
history here.
It is an emotional issue for many of the Indian
beneficiaries, and they have many questions. I have heard
various questions from people across Indian Country, as well as
my own constituents.
They want to know what this settlement means to them. They
want to know how it is going to impact them. However, I don't
always have the answers to their questions. They want to know
why is it only recently the mismanagement claims were included
when all along they were told that they were not, and I believe
that question was raised a little bit ago.
So being their tribal leader, they want me to have answers
to these questions, and I always haven't had the answers to
those questions. I know that ITMA, as an organization that
deals with these issues, has been fielding many questions from
Indian Country, as well as tribal leaders.
I have heard from various tribal leaders as well who have
been hearing many of the same questions. Indian beneficiaries
that are impacted by this just want transparency. They question
why the haste, and I think that it is a legitimate question
that needs to be answered, but more importantly, their
questions need to be answered before this is considered.
So as a result of that, ITMA may organize the first
national outreach meeting on a settlement in Las Vegas on
February 24th. Elouise's attorneys were on-hand, and ITMA and
the consultants were on-hand. Various tribal leaders and Indian
beneficiaries across the Nation were on-hand.
Many questions were asked, and many were answered. However,
a lot of the issues were not clarified, and questions remain.
In attempts to address some of those questions and answers,
ITMA has offered suggestions that is in the written testimony
that is before you today.
And I feel though what I would like to highlight is that we
are asking the Plaintiffs and the Government consider setting
aside a portion of the settlement fund to provide an option for
mismanagement claims to be resolved administratively.
We want to target those people who fall through the cracks,
and I think if this is considered as we move forward, it would
give an opportunity for many of those people to have a voice.
A lot of the Indian beneficiaries that I have talked to,
they just want their story to be here. Because of the long
history, many of these people were reared on the very same
lands that are now included on this Class II action that is
within the settlement terms.
So they have an emotional tie to the property. A lot of
time this property is passed on from one generation to the
next, and include important cultural areas to the Indian
beneficiaries.
There is a long history of mismanagement, and in some cases
outright capricious activities conducted by the Bureau, and
many of these individuals just want their story to be heard,
and they want to see a resolution to the wrongs that were done
to them in the past, but they want that to happen in the right
way.
We also would like the Department to consult with the
tribal governments on how the $2 billion land consolidation
fund will be implemented and spent. All too often in the past,
I think you would see that this was done with the input of the
tribes.
The tribes deserve to have a voice in this process. They
need to be consulted on this. I think the tribes should have a
better understanding of what those priorities would be other
than some other group that is based out of D.C.
We are on the ground working with the land, and we know the
land, and we know what our priorities are. We want to be given
that opportunity to decide what those priorities would be if
this moves forward and the money is allocated in that program.
We also would like the parties to conduct in person
outreach to the Indian beneficiaries throughout Indian Country,
because as I stated, it is an emotional issue. People want to
be heard. They want their questions answered.
So I would ask that the parties conduct that as we move
forward. In conclusion, I would like to thank you for this
opportunity to testify today. ITMA is grateful for the
Administration's commitment to ending the Cobell litigation, in
hopes that this commitment also extends to resolving the scores
of pending tribal lawsuits and forward looking trust reform. At
this time, I stand ready for any questions that the Committee
may have.
[The prepared statement of Mr. Finley follows:]
Statement of The Honorable Michael O. Finley, Director, on Behalf of
the Inter-Tribal Monitoring Association on Indian Trust Funds
Good morning Chairman Rahall, Ranking Member Hastings, and members
of the Committee. My name is Michael Finley and I am the Chairman of
the Board of Directors of the Inter-Tribal Monitoring Association on
Indian Trust Funds (ITMA), and will be testifying today in that
capacity. I am also the Chairman of my own tribe, the Confederated
Tribes of the Colville Reservation. I appreciate the opportunity to be
here today to discuss ITMA's views regarding the proposed settlement of
the Cobell v. Salazar litigation.
ITMA is an organization presently comprised of 65 federally
recognized tribes from all Regions of the country, including Alaska.
For twenty years, we have been actively involved in monitoring the
activities of the government in the administration of Indian trust
funds and in the larger trust reform efforts that have grown out of the
American Indian Trust Fund Management Reform Act of 1994. In 1993, ITMA
provided the first draft of that Act to Congress and was at the
forefront of securing the passage of that Act into law. This law is the
statutory basis for the Cobell lawsuit.
While ITMA has not endorsed every measure taken by the government
in the name of trust reform during this period, significant progress
has been made in the administration of trust funds and trust assets.
The daily deposit of receipts through a nation-wide lockbox arrangement
with a commercial bank, the immediate access to Individual Indian Money
(IIM) accounts through a debit card issued by a major bank, and the
latest annual audit that reveals no material weaknesses in the
accounting systems are all major improvements that virtually no one
would have believed possible when the 1994 Act was being considered by
Congress.
On the other hand, significant issues do remain unresolved, and the
organization continues to work with and to monitor the government's
progress on other significant trust reform initiatives. Serious
problems continue to remain in the overall administration and
management of the Indian trust. Examples include the process by which
the Department provides appraisals for Indian property, issues related
to estate planning and will writing assistance to Indian beneficiaries,
and the unreliability of land records. ITMA continues to work with the
government and Indian beneficiaries to improve upon these and other
problem areas.
ITMA has long supported an honorable and just settlement of the
Cobell litigation and has provided input and assistance to the
Committees of jurisdiction in previous settlement efforts. The Cobell
litigation has consumed enormous resources and attention from both our
trustee agencies of government and from tribal leaders over the last
fourteen years. It is fair to say that this lawsuit has deeply affected
the nature and tone of the tribes' relationship with the government. We
were particularly pleased when we heard during the last Presidential
campaign that then-Senator Obama would make settlement of this case a
priority if became our President. In addition, more than 100 tribes
have lawsuits pending against the government relating to trust
administration. ITMA hopes that the proposed Cobell settlement reflects
a new attitude within the government to actively seek an honorable
resolution of those cases as well.
After the proposed settlement was unveiled and individuals had a
chance to begin reviewing it, ITMA began to field questions from both
tribal leaders and individual Indians about the settlement and what it
means for them. In many cases, after being provided with a general
explanation of the settlement, the tribal leaders and individuals
making the inquiries raised additional questions and, in many cases,
concerns about the settlement and its potential effects should it be
ratified by Congress and approved by the Court in its current form.
Most questions that ITMA has received revolve around the inclusion
of Indian trust mismanagement claims in the settlement agreement.
Unlike an accounting, these claims involve the actions, or inaction, of
the government in managing Indian trust land, such as ensuring fair
market value in approving leases or ensuring that timber is not
overharvested so as to damage the landscape. The inclusion of this new
and broad category of claims has been a source of confusion and concern
because land owners have been told for more than ten years those claims
are not involved in the litigation. In fact, if the court had
jurisdiction over these claims, the parties would not be asking
Congress to grant jurisdiction to the court to enter judgment on this
proposed settlement. Many people are questioning why this case must be
greatly expanded in order to settle it. Generally speaking, Indian
landowners will have these claims extinguished in exchange for a base
payment of $500, with the possibility that that amount might increase
based on a formula. The settlement agreement allows the individuals
within this class to opt out.
Other questions posed to ITMA involve the implementation of the $2
billion Trust Land Consolidation Fund and the extent, if any, of tribal
input in how those dollars will be spent. We have also received many
questions relating to attorney's fees and incentive payments to the
class representatives. The underlying concern of all of these questions
is the overriding issue of the impact of the proposed settlement on the
United States' trust responsibility.
The original deadline for Congress to act to approve the
settlement's implementing legislation was December 31, 2009, at 11:59
pm, just more than three weeks from the time the settlement was
disclosed. No one understood the reason for the very short timeframe
and it made people very wary of what was actually being proposed.
In response to these and other questions, ITMA organized a national
meeting on February 24, 2010 in Las Vegas, Nevada, to provide a forum
for tribal leaders and Indian landowners to hear a detailed walk-
through of the settlement agreement and have an opportunity to ask
questions. Significantly, this was the first outreach meeting of any
kind that we are aware of regarding the settlement. ITMA is very
grateful for the participation of all of those who attended, including
counsel for the plaintiffs, and is hopeful that this meeting will be
the catalyst for future and extended outreach.
I cannot emphasize enough how emotional of an issue land and the
government's trust responsibility are to Indian people and the
heightened emotion that comes when those are affected in some way, as
they would be in the proposed settlement. Although the Cobell case has
been a class action, it goes without saying that to Indian people the
case is much different than a standard class action involving a
household appliance. There is a strong cultural connection to Indian
land and for many, to the trust revenue they may receive as trust
landowners, even if only a few pennies per year. For active landowners
living in their respective tribal communities, wrongs for which the
government is responsible from decades past that resulted in damage to
their land or their families' land weigh heavily on their minds.
Many know that their rights will be affected by the settlement but
very few have fully read and understand the settlement documents. Many
have no electricity in their homes and limited access in their
communities, so for them to be told to refer to
www.cobellsettlement.com for answers is clearly not possible. Up until
the announcement of the settlement, they had been told or understood
that any issues arising from their trust lands and resources were not
any part of the Cobell case. Now that they learn that these claims will
be presumptively extinguished unless they are prepared to make a
decision, it creates unease and concern. If they do not make the
correct decision, something might be forever lost. For some, it means
that they will have to hire a lawyer that they may not be able to
afford.
With respect to tribal government involvement, there are parts that
directly affect tribes and they have not been consulted or even advised
by the parties that their interests are being brought into this law
suit. For example, the land consolidation program will be overlain in
many cases on similar tribal programs. In the past, the Bureau of
Indian Affairs (BIA) program has sometimes competed directly with
tribal land consolidation programs. If a competing program is funded
with $2 billion, tribal land consolidation and land restoration efforts
may be severely hampered rather than enhanced. In addition, ITMA is
advised that Alaska tribes are prohibited entirely from participating
in the BIA Indian Land Consolidation program. These are just two
examples where ITMA thinks this proposal could benefit from more
deliberation.
ITMA appreciates the complexities associated with creating a rough
justice settlement formula and understands that no settlement is
perfect for everyone. Many people have raised questions, however,
regarding the relationship between the proposed payment and the
underlying claims that will be extinguished. For example, the formula
for payments to Indian beneficiaries in the trust administration class
beyond the $500 base amount for asset mismanagement claims appears to
have little relation to what actual claims they might possess or to
damage to their land. They will be paid under a formula that is based
on the dollar amounts that went through their accounts, not on what
losses they might have suffered. In other words, those who lost the
most may actually receive the least and those who received the most may
be paid even more. The most highly paid of all would very likely be
those who have sold their trust lands altogether.
With respect to attorney's fees and costs, ITMA strongly believes
that these payments should come from the Equal Access to Justice Act
(EAJA) fund so that such fees and costs do not come out of the
Settlement Fund set aside for the Plaintiffs. Ordinarily, the EAJA fund
is available to cover attorney fees and expenses when they prevail in
litigation against the Federal government and the government's position
was not substantially justified. In this case, the government attorneys
have publicly announced that the government's view is that the
plaintiffs' attorneys should be fairly compensated for their work in
this case. Thus, it is only right for the United States to absorb these
fees and costs at its expense not the Plaintiffs.
With respect to the class representatives incentive awards, ITMA
has heard some confusion as to whether these awards are limited to
payment of unreimbursed expenses. ITMA is hopeful that the parties can
put this confusion to rest and provide an estimate with as much
specificity as possible of what each class representative intends to
seek as an incentive award, together with an estimate of what each
class representative intends to seek as unreimbursed expenses.
These are some of the considerations that we hope this Committee
will be cognizant of, and ITMA is willing to assist to the extent we
are able to continue to facilitate the dialogue so that Indian
beneficiaries can be as fully informed as possible in making the
decisions that may be required of them.
In the interest of ensuring that individuals receive equitable
treatment, ITMA recommends that the parties consider, or reconsider, as
the case may be, setting aside a portion of the settlement fund to
provide an option for members of the Trust Administration Class to have
their claims resolved administratively, perhaps by a special master.
The August 4, 2006, staff redraft of S.1439, which was introduced in
the 109th Congress, included such a mechanism. Should the parties
determine that the inclusion of such an option in the Settlement
Agreement is feasible, this option would capture those individuals who
might otherwise fall through the cracks. More importantly, however, it
would also provide members of the Trust Administration Class the
opportunity to have their mismanagement claims resolved in a manner
that provides acknowledgement and closure from the government for the
damages that they and their families may have suffered--without the
expense and pitfalls of filing a separate lawsuit.
Second, ITMA believes that the Department should commit to consult
with Indian tribes on the implementation of the $2 billion Trust Land
Consolidation Fund and involve tribal governments in decisions on how
the money will be spent. Under the Settlement Agreement, the $2 billion
would fund the pre-existing Indian Land Consolidation Office (ILCO),
which has never had more than $35 million to spend in any given year.
Under the current practice, the ILCO will often purchase the least
desirable and unproductive ownership interests, and the government has
to administer these purchased interests until the government liens are
satisfied. That seems very wasteful and unproductive, especially when a
more sensible approach is readily available. Indian tribes themselves
should be able to contract the functions of the ILCO so tribes can
determine which lands they wish to purchase, and these purchases should
be made free of any government liens and taken into trust immediately.
In addition, because this program is not presently available to Alaska
tribes, ITMA has adopted a resolution urging Congress to extend the
benefits of the Land Consolidation Program to Alaska tribes.
To spend such a large amount of money quickly, the Department must
eliminate the red tape and must take a hard look at the requirement
that an appraisal be prepared for nearly all trust land transactions.
Although the Trust Land Consolidation Fund is not related to the
settlement of claims involved in the Cobell lawsuit, the $2 billion has
the potential to be beneficial to both Indian landowners and the
economies of tribal communities alike. ITMA hopes that the Department
is considering these and other questions and looks forward to providing
recommendations in this regard.
Finally, we urge the parties to engage in direct, in-person
outreach with Indian beneficiaries to explain and answer questions
about the proposed settlement. Providing a forum for Indian
beneficiaries to assemble, compare notes amongst themselves, and tell
their stories is invaluable. Again, the emotional aspect of these
issues to Indian beneficiaries cannot be overstated and beneficiaries
deserve to be able to talk to a real person given the gravity of the
proposed settlement. A website or pre-recorded telephone message is
simply no substitute for in-person contact. Again, this is not the
average class action lawsuit.
ITMA is very grateful for the Administration's commitment to ending
the Cobell litigation and hopes that this commitment also extends to
resolving the scores of pending tribal trust lawsuits and to forward-
looking trust reform. Thank you for this opportunity to testify. At
this time, I would be happy to answer any questions that the Committee
may have.
______
The Chairman. Thank you, Mr. Finley. Chairman Nunez.
STATEMENT OF HON. AUSTIN NUNEZ, CHAIRMAN,
INDIAN LAND WORKING GROUP, TUCSON, ARIZONA
Mr. Nunez. Good morning, Honorable Chairman Rahall, and
Members of the Committee. Thank you for giving me this
opportunity to address this longstanding, arduous, and divisive
litigation.
I am speaking today on behalf of the Indian Land Working
Group, a nationwide organization founded in 1991, and since
that time has engaged in issues related to restoration, use,
and management of the remaining native land base, including
cost allotments. ILWG continually seeks improvements in the
protection and management of all Indian trust lands.
With me today are two board members, Vice Chairwoman Helen
Sanders, and Board Member Marcella Giles. I am a member of the
Tohono O'dham Nation, and have served 23 years as the Chairman
of the Nation's Santa Vera district.
The district is co-extensive with the Santa Vera Indian
reservation founded by Executive order in 1874. The reservation
covers 105 square miles, of which two-thirds, or approximately
42 thousand acres, were allotted to individuals under the
General Allotment Act of 1887.
My family and I are owners of an allotted trust plan, and
thus within the class of plaintiffs in the Cobell litigation.
With this background, my remarks today are in my capacity as
Chairman of ILWG.
After considerable discussion and deliberations the board
of directors of ILWG has taken the position for support of the
December 7, 2009 class action settlement agreement, and the
implementing legislation which it proposes.
While the settlement agreement in several ways falls short
of our initial expectations and hopes. Nevertheless, we believe
that this settlement agreement is in the best interests of the
parties, including class members and the government.
We have concluded that the benefits of the settlement
outweigh the disappointments. Our reasoning follows that of the
Plaintiff class counsel set out in paragraph 16 of the opening
section of the settlement agreement, namely the risk and
uncertainty of further litigations, the result, and the
benefits of closure and payment to land owners, many more of
whom would pass away before seeing any benefits should this
dispute be further extended.
The settlement agreement does not provide for all of the
damages sought by the Plaintiffs, nor does it acknowledge the
mishandling of trust funds by the government, which has caused
great hardship to our people over many years and generations.
Nevertheless, the good faith of the parties is obvious in
light of the progress of the litigation over the past decade.
We recognize and are encouraged that the amount of the
settlement fund is more than twice the amount found by the
trial court to be the losses resulting from fund mismanagement.
The uncertainty of further litigating that finding is
significant. More importantly, this litigation has brought to
the Department of the Interior and the Bureau of Indian Affairs
a dramatic change in understanding of the government's
fiduciary duty.
Regardless of the amount of damages to be distributed to
this settlement, this settlement will bring closure to this
chapter in the United States and Indian relationships. Finally,
additional investments in land consolidation called for in the
second aspect of the settlement agreement is long overdue and
welcomed.
We have some difficulty in understanding the inclusion of
the unlitigated issues of the land mismanagement claims into
the settlement at this point, 14 years into the case. We
understand the desire of the government to resolve as many
claims as possible, and acknowledge land mismanagement claims
that are related to the general allegations of trust
mismanagement.
In view of the benefits of the settlement agreement, and
risks, and uncertainty, and delay in further litigating those
issues, ILWG can accept this aspect of the settlement
agreement, but DOI and the Department of Justice should
extensively consult with IAM account holders, not just the
tribes, plus the issues of backlog, probate should be addressed
before the settlement goes forward.
Last, we do not agree with sunset provisions for
fractionation. In conclusion, the board officers of the Indian
Land Working Group acknowledge and thank those who worked hard
to preserve, and their financial support and sacrifice to
conclude and deliver the settlement agreement. Thank you for
the opportunity to address you today.
[The prepared statement of Mr. Nunez follows:]
Statement of The Honorable Austin Nunez, Chair, Indian Land Working
Group, and Chairman, San Xavier District of the Tohono O'odham Nation
Honorable Chairman and Members of the Committee, I appreciate the
opportunity to address this committee today on the proposed settlement
of this long running, arduous and divisive litigation.
I am speaking today on behalf of the Indian Land Working Group, a
nation wide organization founded in 1991, and since that time actively
engaged in issues related to restoration, use and management of the
remaining native land base, including trust allotments. The ILWG
continually seeks improvement in the protection and management of all
Indian Trust Lands and the revenues derived from them.
I am a member of the Tohono O'odham Nation, and have served for 22
years as chairman of that Nation's San Xavier District. The District is
coextensive with the San Xavier Indian Reservation founded by Executive
Order in 1874. The reservation covers 105 square miles, of which two-
thirds, or approximately 42,000 acres were allotted to individuals
under the General Allotment Act of 1887. My family and I are owners of
allotted trust land, and thus within the class of plaintiffs in the
Cobell litigation. With this background, my remarks today are in my
capacity as the chairman of ILWG.
After considerable discussion and deliberation, the Board of
Directors of ILWG has taken a position of support for the December 7,
2009 Class Action Settlement Agreement and the implementing legislation
which it proposes. While the Settlement Agreement in several ways falls
short of our initial expectations and hopes, nevertheless, we believe
that this Settlement Agreement is in the best interests of the parties,
including class members, and the government. We have concluded that the
benefits of this Settlement outweigh the disappointments. Our reasoning
follows that of the Plaintiff Class Counsel set out in paragraph 16 of
the opening section of the Settlement Agreement, namely, the risk and
uncertainty of further litigation, certainty of result, the benefits of
closure and the payment to landowners, many more of whom would pass
away before seeing any benefit should this dispute be further extended.
The Settlement Agreement does not provide for all of the damages
sought by the plaintiffs, nor does it acknowledge mishandling of trust
funds by the government which has caused great hardship to our people
over many years and generations. Nevertheless, the good faith of the
parties is obvious in light of the progress of the litigation over the
past decade. We recognize and are encouraged that the amount of the
settlement fund is more than twice the amount found by the trial court
to be the losses resulting from fund mismanagement. The uncertainty of
further litigating that finding is significant. More importantly, this
litigation has brought to the Department of Interior and the Bureau of
Indian Affairs a dramatic change in understanding of the government's
fiduciary duty. Regardless of the amount of damages to be distributed
through this Settlement, this Settlement will bring closure to this
chapter in United States and Indian relations. Finally, additional
investment in land consolidation called for in the second aspect of the
Settlement Agreement is long overdue, and welcome.
There have been rumblings in Indian country about the amount of
attorneys' fees and incentive payments to the class representatives. It
is appropriate for class representatives to be reimbursed for the
monies they have expended in pursuing this litigation; however, it is
difficult for most landowners, whose holdings provide little if any
income, to comprehend litigation costs of the magnitude of $15 million.
We recognize, however, that it is appropriate to reimburse those native
people who sacrificed and had the courage and stamina to support this
endeavor for the past 14 years and without whose contributions there
would be no settlement fund. It is also hard for many to understand how
attorneys' fees of up to $100 million can be fair and reasonable.
However, these amounts in relation to the amount recovered through the
litigation and negotiation of the settlement may be appropriate. We
also note that trust beneficiaries are somewhat protected through the
process outlined in the Settlement Agreement for publication and court
approval of the amounts to be paid out for attorneys' fees and class
representative payments.
We have some difficulty in understanding the inclusion of the
unlitigated issues of land mismanagement claims into the settlement at
this point, 14 years into the case. We understand the desire of the
government to resolve as many claims as possible, and acknowledge the
land mismanagement claims are related to the general allegations of
trust mismanagement. In view of the other benefits of the Settlement
Agreement, and the risks and uncertainty and delay of further
litigating these issues, ILWG can accept this aspect of the Settlement
Agreement.
In conclusion, the Board and Officers of the Indian Land Working
Group acknowledge and thank those whose hard work, perseverance,
financial support and sacrifice were able to conclude and deliver the
Settlement Agreement. I urge the Committee, the House and Senate to act
quickly to approve the implementing legislation so that the Cobell
litigation can be put to rest and the Native landowners whose moneys
were mishandled can be compensated.
Thank you for the opportunity to address you today.
______
Response to questions submitted for the record by Hon. Austin Nunez,
Chairman, San Xavier District Tohono O'odham Nation, and Indian Land
Working Group
March 25, 2010
Hon. Nick J. Rahall, II
Chairman
Committee on Natural Resources
U.S. House of Representatives
Washington, D.C. 20515
Dear Chairman Rahall,
Thank you again for giving the Indian Land Working Group the
opportunity to comment on the proposed Cobell Settlement at the March
10, 2010 hearing. This is to provide our responses to your questions as
posed to us in your letter of March 15, 2011. I have listed them in the
same order as your letter.
1. In the Cobell hearing, during questioning from the Committee,
Plaintiff's attorney William Dorris testified that in 2004, the
Court invited the plaintiffs to file trust mismanagement
claims. Accordingly, the issue of whether or not such claims
were included in the Cobell lawsuit appears to be in some
dispute. Can you comment on this matter?
Response: The Indian Land Working Group (ILWG) understands that the
corpus of the trust includes trust or restricted land and underlying
natural resources. The Department of the Interior (DOI) mismanagement
of these resources has been a topic of discussion at many of ILWG's
conferences that included unlawful trespass, overgrazing or timber cut
without permission or oil pumped from an allottee's land without
permission. These were the ongoing issues that led to an incorrect
payment deposited in each allottees Individual Indian Monies (IIM)
account.
During several of ILWG's workshops, individual allottees met and
asked for assistance to determine correct rental payments from their
respective leases, to understand probate rulings under AIPRA, and to
address fractionation complexities. The results from the workshops
included the understanding that a correction of their IIM accounting
depended on DOI administratively correcting the management of the
resource.
From ILWG's perspective, then, asset mismanagement was always seen
as a factor in IIM account shortages. We have not been privy, however,
to the strategic decisions of the counsel for the Plaintiff Class in
not making those issues explicit in the litigation.
2. As you testified on the first panel, would you care to comment on
the testimony of any other witness at the hearing or to respond
to issues raised by any of the witnesses?
Response: Professor Monette raised an issue of collusion between
the parties in his testimony. ILWG dismisses this notion and suggest
this undermines the professor's credibility. ILWG expected the parties
to negotiate a settlement. The ILWG expected a larger settlement number
as did most members of the plaintiff class. Despite this
disappointment, ILWG believes a good faith negotiation occurred and
gives no logic to an argument that the Cobell parties colluded to bring
spurious results to individual allottees. The negotiated settlement
needs to move forward to be approved by Congress.
Mr. David Hayes stated in his testimony that there would be an
effort to do more outreach to tribes. ILWG strongly recommends actual
field meetings to talk to tribes including allottees as well as give
notice to Bureau of Indian Affairs Regional Directors to hold
informational discussions with tribes and allottees in each Region.
Newspapers, TV, radio and speaking engagements should be employed. In
sum, ILWG does not believe outreach has been adequate.
Mr. Michael Finley, Chairman of the Inter-tribal Monitoring
Association (ITMA) and Chairman of the Colville Tribe, did not
elaborate on how closely ITMA has worked with allottees who are members
of the class of plaintiffs to this lawsuit. To address allottee issues,
the ILWG has developed educational videos and manuals in the areas of
Estate Planning and Probate; Land Exchange & Consolidation; Leasing of
Indian Land; Land Acquisition and Financing; and Land Data. In response
to changes in the Indian Land Consolidation Act and the American Indian
Probate Reform Act, ILWG conducted numerous community based trainings
over the past several years that included meetings with tribal
councils/tribal employees and landowner associations. In addition the
ILWG responds to requests from Tribes and individuals for information
on a continual basis.
Representatives from the San Xavier Allottee Association (AZ), the
Oklahoma Indian Land & Mineral Owners Of Associated Nations--OILMAN
(OK), the Allottee Association of the Affiliated Tribes of the Quinault
Reservation (WA), the Ft. Hall Landowners Alliance (ID), and the Lakota
Landowners Association (SD) are some of the community based entities
and locations where trainings have been conducted, or individual one-
on-one assistance has been given. In addition, trainings were
coordinated for Tribal Councils, educational institutions, legal
entities, and additional tribal communities on a per request basis.
The ILWG is not aware of one Tribe or tribal organization, such as
ITMA, that has worked with allottees in the same manner as ILWG for the
past two decades. Our extensive two-decade work with allottees is the
basis from which ILWG finds its support of this settlement.
Sincerely,
Austin Nunez, Chairman
San Xavier District Tohono O'odham Nation
and Indian Land Working Group
______
The Chairman. Professor Monette, welcome.
STATEMENT OF PROFESSOR RICHARD MONETTE,
MADISON, WISCONSIN
Mr. Monette. Good morning, Chairman Rahall, and Ranking
Member Hastings, and Members of the Committee, thank you for
the opportunity to present this morning on this historic moment
for the tribes.
Mr. Chairman, the proposed Cobell settlement, if enacted as
it is, would itself be a breach of trust, particularly as many
of you have pointed out with the astounding lack of
participation of tribes and tribal leaders and what has been
developed, and the astounding lack of transparency so far,
especially given the recent urgency and haste with which this
has been put before you.
As it is, the proposed settlement runs afoul of the Class
Action Fairness Act of 2005. It also runs afoul of the Federal
Rules of Civil Procedure, laws that this Congress has put in
place to protect class action plaintiffs.
Now, attorneys in the case have kind of justified all of
this as though this were sort of any other settlement, and many
of you have said, and I just want to emphasize, that this is
not just any other settlement.
This is a matter of solemn trust between this body and this
country, and it should be treated as such, and if anything,
this settlement, if any, should comply with the Federal Rules
of Civil Procedure, and the Class Action Fairness Act.
In short, Mr. Chairman, what you have heard is that the
proposed settlement includes claims that were not made by
Plaintiff. They do not pertain, and they are not germane, and
they are not even relevant to the lawsuit at hand.
The big ticket items, as you know, are the settlement only
provision that would establish a so-called trust administration
class. Proposing to settle non-monetary asset claims for all
those who do not proactively opt out, potential claims relating
to oil, gas, coal, minerals, water, timber, thereby releasing
the Department of the Interior of all liability in such
matters.
And I want to emphasize water, because we have heard that a
couple of times here as though perhaps people have missed that.
That is in here, and to be settled out, individual water
claims.
On that point by the way, I also wanted if I could, with
all the haste, it was difficult to read this all carefully, and
my reading lasted very late last night. I had to read something
five or six times.
I had a call with the solicitor, who I think, if I might,
and with all due respect to her, and I respect her very much,
she knows, found it a little stumped as well. In Item 15, and I
think it is A-15, it talks about the historical accounting
claims, the ones that are to be settled entirely without an opt
out.
This is the thousand dollar settlement, and we are told
that this is just for the accounting, but the definition says
historical accounting claims shall remain common law or
statutory claims, including claims arising under the Trust
Reform Act, for an historical accounting through the record
date of any and all IAM accounts and any asset held in trust or
restricted status, including, but not limited to, land and
funds.
Now it takes care of the accounting part and the funds
part, and so then this land and the assets is something
different, and they are included in the definition of
historical accounting claims, the claims that are intended to
be finally closed.
So we get this idea that with the trust administration
class that you can opt out, but on the other hand, we have some
language that suggests that it doesn't matter if you opt out.
Those claims are finalized anyway.
It may just be a matter of drafting ambiguity at best
perhaps. It really needs to be looked at more closely because
as it reads now, it doesn't seem corroborate what we are
hearing in other fora.
So let me just talk about the point where the Cobell
lawsuit. Basically, some people think taint basically, and the
court ordered $455 million, and at that juncture the temptation
of collusion loomed large.
And I think it is fair to say that the Cobell lawsuit fell
victim to some of that collusion. From that point forward the
record reveals less lawyering for the Plaintiffs, especially
the absent class members, and more lawyering of the deal they
struck behind closed doors.
And frankly at that juncture the record suggests
inappropriate participation in settlement negotiations by the
presiding judge, who otherwise would be a trustee for absent
class members pursuant to Rule 23[e] of the Federal Rules of
Civil Procedure.
So as soon as the dollar amount on the negotiating table
went that high, it was clear that there was more to give than
to lose, and it seems like it fell victim to collusion. It
looks that way to those of us who are on the outside.
And we hope that if the Rules of Federal Procedure and the
Class Action Fairness Act were abided by, it would answer some
of these questions. Thank you for the opportunity again. Thank
you for the bit of transparency that this hearing is bringing
to the issue. Hopefully, it will be an excellent beginning.
[The prepared statement of Mr. Monette follows:]
Statement of Richard Monette, Professor of Law, University of
Wisconsin, and Former Tribal Chairman, and IIM Account Holder
Good Morning Mr. Chairman and Members of the Committee.
My name is Richard Monette. I am a Professor of Law at the
University of Wisconsin in Madison. I am also a former twice-elected
Chairman of the Turtle Mountain Band of Chippewa. Finally, I am also an
IIM account holder.
Mr. Chairman, the proposed Cobell settlement, if enacted as is,
will itself be a breach of trust.
As it is, this proposed settlement runs afoul of the Class Action
Fairness Act of 2005 (CAFA), the law enacted by this body to protect
the interests of all parties in a class action. It also runs afoul of
the Federal Rules of Civil Procedure (FRCP) governing class action
lawsuits. That is why the named parties have requested Congress to
grant broad waivers from the strictures of those laws. Plaintiffs'
attorneys have justified this settlement as though it were any other
settlement; but it is not any other settlement and does not involve any
other trust. This settlement involves the solemn Trust relationship and
Trust Responsibilities between the United States and the Indian Tribes
with which it has signed treaties and with whom it has a long and
sometimes difficult and sometimes thoroughly enlightened history. This
settlement, if any, should adhere to the FRCP and the CAFA.
The proposed settlement has two main components and, as usual, the
devil is in the details. First, the proposed settlement would establish
an ``Historical Accounting Class'', providing payments of one thousand
dollars to each class member, without any option to opt in or out.
Second, the proposed settlement would also establish a ``Trust
Administration Class'' that would provide payments of five hundred
dollars to IIM account holders, with a provision to opt out, that would
be deemed a complete satisfaction of any trust asset claim and wholly
release the Department from any further liability to those who accept
such payments. Finally, the proposed settlement would provide for
fifteen million dollars in ``incentive payments'' for the class
representatives and exorbitant attorney fees.
In short, Mr. Chairman, the proposed settlement includes claims
that were not made by Plaintiffs, including matters that do not
pertain, that are not germane, or that are not relevant to the lawsuit.
The three big ticket items in this regard are:
1) first, the ``settlement-only'' provision that would establish a
so-called ``Trust Administration Class'', proposing to settle non-
monetary asset claims for all those who do not proactively opt-out,
potential claims relating to oil, gas, coal, minerals, water, and
timber, thereby releasing the Department of the Interior of all
liability in such matters;
2) second, the ``settlement-only'' provision proposing to
establish and authorize a ``Trust Land Consolidation Fund'' within the
Department of the Interior to the tune of some two billion dollars;
3) third, the ``settlement-only'' provisions establishing an
Indian Education Scholarship Holding Fund that would divert some 60
million dollars from the land Consolidation Program to a Holding Fund
whose monies are to be distributed by non-profit organizations
nominated by Plaintiffs and confirmed by the Secretary.
Mr. Chairman, not one of these three provisions belongs in the
settlement.
The Department of the Interior has stated that this lawsuit has
cost it approximately one hundred million dollars every year of the
fourteen years of this litigation. That is, perhaps not coincidentally,
1.4 billion dollars, the exact amount of the settlement attributed to
settling all claims. In other words, I guess the Tribes and individual
Indians are supposed to be elated that the Department is willing to pay
them money that was intended to benefit them in the first place.
This lawsuit was originally filed in District Court as an equitable
action seeking injunctive relief only with no monetary damages.
Plaintiffs simply asked the Department to reconcile IIM accounts and to
produce documentation to corroborate the reconciliation.
Early in the litigation, in a bout of judicial sensationalism, the
district court held certain Interior officials in contempt of court
because they could not and would not produce records aiding an
accounting. However, if an accounting could not be done, then the
injunctive relief could not be ordered, and a new theory of the case
based on monetary relief would become plausible. This is why the
proposed settlement illustrates a huge leap from making equitable
claims into settling monetary damages.
In August 2009, Plaintiff's lawsuit took a steep turn for the
worse. In many people's eyes, to invoke the vernacular, the case had
tanked. The Federal District Court ruled that an accounting was not
possible and ordered Defendants to pay $455 million dollars in
restitution. Both sides appealed and the Federal Court of Appeals set
aside the judgment on both points, remanding to the District Court to
approve a plan that ``efficiently uses limited government resources to
achieve an accounting.''
Therefore, at best, the settlement should be limited to the 455
million dollars that the district court ordered as restitution. At
worst, the settlement should be void and the Department should set
about the task of accounting as the Court of Appeals ordered. The
Representative Plaintiffs' counsel should be paid their actual fees and
costs up to the point where their case ``tanked'', where they convinced
the court that an accounting could not be done and that injunctive
relief was not possible.
When the district court found a $455 million dollar cause for
restitution, and the court of appeals ordered an accounting, million
dollar damage figure, and the Defendant Interior Department looking at
protracted accounting exercises, both sides found enough incentive to
pursue a settlement.
At that juncture, the Cobell lawsuit fell victim to collusion at
the expense of the American taxpayer. From that point forward, the
record reveals less lawyering for the Plaintiffs, especially the absent
class members, and more lawyering of the deal they'd struck behind
closed doors. And frankly, at that juncture, the record suggests
inappropriate participation in settlement negotiations by the presiding
judge, who would otherwise be a trustee for absent class members. At
that point, who was obliged to look after the best interests of the
class, especially absent class members, as the federal rules and
federal law requires?
As soon as the dollar amount on the negotiation table went above
455 million dollars, it meant the Plaintiff class was getting more than
the District Court believed they had made their case for. But the
government didn't give this away for free; inevitably, Plaintiffs would
be giving up something more in return.
Likewise, as soon as the dollar amount went above 455 million
dollars, Defendants revealed the astounding willingness to pay more
than they were held liable for. But the government didn't give this
away for free either; instead, Defendants would surely be getting
something more in return.
In short, the proposed settlement would relieve Defendants of more
liability than Plaintiffs had made claim to, and would provide
Plaintiffs relief for claims that they did not make. Primarily, what
Plaintiffs would relinquish, and what Defendants would gain, is a
settlement of so-called ``Trust Administration'' claims that were never
part of the lawsuit, claims that Plaintiffs had neither the right nor
privilege to cede, and that Defendants as Trustees had neither the
obligation, nor the right, to accept.
One has to wonder if the class representatives and their lawyers
had brought this case not as a class action, but by themselves,
foregoing up to 15 million dollars in ``incentive awards'' and 100
million dollars in attorneys' fees, and if after 14 years of litigation
the Department of the Interior and the Bureau of Indian Affairs came to
them and said, ``Eloise, do we have a deal for you. We'll give you
$1000 for your accounting claim, and we'll offer to settle any other
claim you might have for all the years of trust mismanagement,''--one
has to wonder if they'd have taken the deal.
Mr. Chairman and members of the Committee thank you for the
opportunity to testify this morning and the first bit of official
transparency regarding this whole proposed settlement.
______
The Chairman. I thank the gentleman. Let me ask my first
questions to Chairman Finley. Your testimony indicates that a
separate administrative process should be allowed for the trust
administration class. Would you please explain why the ability
to opt out of the class to pursue the claims individually is
not sufficient?
Mr. Finley. Well, the real reason why is that we tried to
get out to people who fell through the cracks. Our hope is that
the parties would recognize the problem and rectify it, and
making the money available for this third option that we
proposed within our suggestions and in the written testimony
that you have.
And so I guess it being an emotional issue, people want
emotional closure. I think that would give them an opportunity
to be heard, and to hopefully see some compensation for their
losses that they incurred over the years.
The Chairman. Are you aware of the Equal Access Justice Act
being used in other litigation settlements against the United
States?
Mr. Finley. Yes. Offhand, I don't really know of any others
other than the one that was previously done in this case. We
have heard that individuals would prefer that the attorney fees
come from some other means?
I think a lot of the concerns that we have heard throughout
Indian Country, and it has been mentioned here today, that
people have a problem with that large amount of money coming
out of the settlement itself.
The Chairman. All right. Let me ask Chairman Nunez. Upon
Congressional enactment of the proposed legislation the
Department of the Interior will begin implementation of the
Secretarial Commission on Trust Reform. Do you have any
recommendations as to how the Commission should operate?
Mr. Nunez. Yes, sir. It certainly should include Indian
trust landowners, if at all possible, and to make sure that
there is certainly transparency, and that continual education
and information be provided to the landowners.
The Chairman. Thank you for that. Professor Monette, you
testified that the United States has spent approximately a
hundred-million dollars per year on attorney costs to litigate
this matter.
Yet, you question the Plaintiffs' attorneys' fees, in the
range of 50 to a hundred million dollars, and that is what you
question, for the same 14 years. Why do you think the United
States spent 14 times more for attorneys' fees than the
Plaintiffs?
Mr. Monette. I am sorry, I don't understand the question,
Mr. Chairman.
The Chairman. Well, according to your testimony, you say
that the United States has spent approximately a hundred-
million dollars per year on attorney costs to litigate this
matter.
And yet you are questioning the Plaintiffs' attorney fees
in the range of 50 to a hundred-million dollars. Is that
correct?
Mr. Monette. Well, it is not correct. I have not really
questioned the attorneys' fees, although I share the concerns
that the other panelists have raised. The hundred-million
dollars that the Department has told us is that what they have
spent for doing this special trustee work every year out of the
money that they have otherwise gotten.
And so what I pointed out is that it is a hundred-million
dollars for 14 years, which adds up to $1.4 billion, which is
the exact amount of the settlement. So what I suggested is that
the tribes--they apparently think the tribes and their members
are supposed to be elated for getting $1.4 billion of money
that was otherwise appropriated for their benefit in the first
place.
The Chairman. All right. I appreciate that clarification.
Do you know what the average percentage award for attorney fees
in other class action settlements is?
Mr. Monette. I don't know, and they are all over the board.
It is not uncommon, as you know, in tribal matters for them to
be 10 percent as we have a Federal statute that is on point.
They have been as high as 40 percent.
But generally that has been a percentage of an amount that
the Court has ordered, and here the Court ordered 455 million.
Then we got two sides that basically colluded to add more money
to that, and then for attorneys' fees to be added.
And it is a very clear sort of rule, Mr. Chairman, that
deals with that issue. In fact, there are probably three or
four of them. Generally, and this was part of my testimony
written to you, Courts particularly look for signs that a class
action settlement resulted from a reverse action.
Collusive agreements between the defendants and the class
representatives often are in exchange for generous attorney
fees. As the ABA article that I pointed out notes, by this--and
this is a quote--that by this tactic, the defendant hopes to
preclude all other claims, which is precisely what is happening
here with the trust administration claims, which is why I wrote
them after that paragraph.
The proposed settlement, at least on this issue, will be a
poster child of such reverse action settlements. It also flies
in the face of a very difficult development with settlements;
that is, attempting to address the question you are asking
about settlement only provisions.
As I wrote similarly the United States Supreme Court has
directed courts to scrutinize settlement only class action
lawsuits, where classes are certified and claims are made
solely for the purpose of settlement, which is what we got
here; without scrutiny and without sufficient information.
So we have for the first time a second class, a trust
administration class, that none of us have seen before. Now it
may be a good idea. It may be the only way to work out the
kinks in this settlement, but nobody has seen it. I have not.
I have talked to many tribal leaders, and not a single one
has even heard of the idea--except for, of course, the very
small number of tribal leaders that the Plaintiffs are working
with.
And so this is the classic settlement only provision. The
proposed settlement provision establishing a new trust
administration class at the eleventh hour of claims that were
neither made nor litigated will become the poster child of the
settlement only problem that the Supreme Court has frowned
upon.
It also likely violates our reverter clauses, although
quite frankly that provision is so ambiguous in the proposed
settlement that I couldn't quite understand it. But the court
disfavors reverter clauses which specify that unclaimed funds
revert to the defendant.
First, there was all the incentive to provide more money
than the claim asked, or more money than the court ordered, I
am sorry. But then once the claims are made difficult to make,
that money is reverting back to the defendant.
That is the kind of reverter clause that precisely this
body, the Congress, suggested are unfair in class action
lawsuits, and as I wrote here, this is especially relevant in
this settlement, since normally plaintiffs would administer
distribution of awards. They are going to help the plaintiffs.
The defendants are going to help the plaintiffs administer
this award. In fact, they will play a key role. These reverter
clauses allow counsel agree, and this is again out of the ABA
article.
These reverter clauses allow counsel to agree to inflated
settlement amount that serves as the basis for calculating
attorney fees, while providing an incentive to discourage
members of the class from making claims.
With attorney fees based on the overall amount, and the
defendant administering claim awards, this settlement again
will be the poster child of this frowned upon reverter clause
in the rules.
So my written testimony will point out where I think
several of the provisions run afoul of two or three laws that
this body has adopted to protect class participants. This
settlement is asking this body to play along, to make broad
waivers of any other applicable law, so that it can reach a
settlement that otherwise that they could not have reached.
And to grant jurisdiction to a court in ways that had not
been granted before in this matter so that money could be on
the table. and all we are asking is that if we can have the
transparency and the time to look at these matters to make sure
that tribes are at the table, and tribal leaders, and
apparently that we have recognized here in the land
consolidation fund.
Tribal leaders are largely absent from the discussion in
this so-called education scholarship fund. The plaintiffs are
going to propose nonprofit organizations to administer
scholarship funds, all without the tribes, and I don't think
that the tribes would agree with all of that. They may agree
with some, but quite frankly, with the short timing, we really
just don't know.
The Chairman. Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman. My first question is
to Chairman Finley. Before redistricting, I represented the
Okanogan County part of the Colvilles. I don't now. I might
sneak over a little bit there in Grand Coulee, but just a small
part.
But at any rate, you are here representing ITMA, and if you
said it in your testimony, I missed it, but what do you hear
from your constituents in Washington State on this issue?
Mr. Finley. I think I pointed that out in my testimony,
that many of them are questioning how this could be brought
without their consent. I think that it has been stated earlier
that this is the first of its kind in Indian Country, and it
truly is.
My constituents turned to me for these answers. They expect
their elected body to bring issues like this to the forefront.
In this case, this has not happened. So when they turned to me
and asked me for questions, and I don't have them, it creates a
difficult situation for me as a tribal leader, because I should
be doing those things for them.
Some of their issues are the emotional issues that you have
heard. Some of them believe the terms as they understand them,
if they do understand them, aren't fair to them. Some of them
think that they are good, and they will benefit them in a
number of areas.
It is across the spectrum, but I do want to underscore the
fact that I continually have heard that they expect me as a
tribal leader to have these answers for them, and I have tried
to find those answers for them the best that I possibly can.
Mr. Hastings. You would anticipate that the chairman of
their tribes would have similar concerns and similar questions
from their constituents, too?
Mr. Finley. I have heard similar concerns from other tribal
leaders.
Mr. Hastings. Which then raises a question that I wanted to
ask all three of you. I think there is general agreement that
this has to be put behind us. We are at a point where there is
at least a settlement in front of us, and there are some
questions about that.
The questions center on transparency and maybe a final
decision at least, a comfort zone of all of you. So my question
then to all of you, what would you advise us to do as we move
forward on this process?
Now, keep in mind that this settlement was reached on
December 7, and was supposed to be culminated on December 31.
It has now been kicked ahead to April 16, and presumably it can
be kicked ahead again.
But at what point and what should we be doing in order to
satisfy the transparency that I sense all of you want to have
more of and so forth? What advice can you give us? Let us start
with you, Chairman Finley.
Mr. Finley. I think if the parties involved would l do
outreach across the nation, and throughout the various regions.
That would go a long ways in addressing some of the concerns
and questions that many of the Indian beneficiaries have, as
well as tribal leaders.
Mr. Hastings. OK. Mr. Nunez.
Mr. Nunez. I certainly agree with the statement from Mr.
Finley. The plaintiffs actually are scheduled to come out
within the next two weeks to Arizona to meet with the tribes
there, but I also think that the Department of Justice, and the
Department of the Interior also need to do the field hearings
in conjunction with Ms. Cobell's group.
But certainly all information that can be granted and
provided to the individual allottees and tribes needs to get
out there so that everybody can feel comfortable in moving this
forward.
Mr. Hastings. Professor Monette.
Mr. Monette. I would ask the Committee to bear in mind that
all of these individual Indian money accounts and the interest
are derivative of these peoples' membership in tribes, largely
derivative of their membership in tribes that entered into
treaties with the United States.
And those tribes belong and deserve to be at the table. I
would add that perhaps there could be a judicial referral of
the money claims to the Federal Court, waiving the United
States sovereign immunity, so that the Court could actually
address these matters, and maybe the settlement then would make
more sense. It would not appear to be as collusive.
I would ask this body to direct settlement negotiations to
comply with the Class Action Fairness Act, and the Federal
Rules of Civil Procedure. They can be waived at the end,
because obviously that is what we are asking now.
But right now, we haven't had a settlement with them
applying. It would be nice if their settlement negotiations
were in compliance with those laws, maybe with the idea that
there would be some necessary waivers at the end.
But right now those laws are requiring the things that I
mentioned, and very stringent requirements regarding notice. I
think that it is fair to say that that has not been followed,
the clear, concise, and easily understood language, and the
Supreme Court addressing that rule in a recent case requiring a
desire to actually inform absent class members.
I am a member of this class, and I can say in no uncertain
terms that I have never once, in no way, shape, or form, have I
ever been contacted by a Plaintiffs' attorney or by the named
Plaintiffs to ask what I thought, to ask what I felt about it.
This Committee and your staff know that I am pretty easy to
find. So I think that should be complied with as well.
Mr. Hastings. Well, ultimately the decision rests with us,
because we have to have legislation, which by the way has not
been introduced. At what point, I guess in this whole process,
should we feel a comfort level that you have all been satisfied
that the transparency and the procedures are enough to satisfy
all of Indian Country, or is that the 64-dollar question
always? Any one of you.
Mr. Monette. I think when the tribal leaders are given a
chance to look at it and to talk about it, and right now at
first blush, we are going to find tribal leaders that
absolutely oppose this at one end, and those who think, oh, it
absolutely should go forward, and at the other end, we could
cherry pick from either end.
If they all get a chance to talk this out, I think we will
come up with a consensus, and if the tribal leaders, true to my
talk here this morning, if they think that this should go
forward, I am all for it.
Mr. Hastings. Well, that then lends this opportunity,
because if we are going to have to ultimately make that
decision, we are going to have to hear from tribal leaders and
individuals.
We have already, and we welcome that. I think that on all
sides that they welcome that, but if there is some real
heartburn, so to speak, on this process, we really need to know
what that heartburn is, and the depth of that heartburn
throughout this whole process before we can make that decision.
So I would respectfully ask all of you with the contacts
that you have throughout Indian Country to share that with us
as soon as possible so that we can proceed forward. Thank you,
Mr. Chairman.
The Chairman. The Gentleman from American Samoa, Mr.
Faleomavaega.
Mr. Faleomavaega. Thank you, Mr. Chairman. I was just going
to follow up with my good friend from Washington's question, as
well as his opinion, and I was going to ask all three of you
gentlemen is it your understanding that in order to move this
proposed settlement that is now being discussed, that there has
to be some kind of a Federal legislation to actually implement
the process, or can this just be done by Executive Authority of
the Administration?
Mr. Finley. It is also my understanding that the decision
rests with Congress to give the Court the authorization to move
forward on the settlement terms that are before everybody
today.
Mr. Faleomavaega. It is also my understanding that
legislation is required. Mr. Monette.
Mr. Monette. Earlier on, we were told--we were told 14
years ago told really about the strategy and genius of the
strategy of the case, that it was not asking for money. So it
would not run any red flags up the poles.
It was simply asking for a correct accounting, a
reconciliation, and that is why it was able to be brought in
the Federal District Court as a declaratory and injunctive
matter.
But as soon as the accounting--and we were told evidently
that the appeals court does not agree, but we were told that an
accounting can't be done, and the monetary damages became more
plausible.
But in order to get monetary damages, as you know, that
requires a waiver of sovereign immunity from the United States,
likely a judicial referral on this. So the settlement as it is
cannot be done solely by the Executive Branch, by the
Administration. It requires this body's stamp of approval as it
is.
Mr. Faleomavaega. Well, as you know, in the years that I
have served as a member of this Committee, we have had this yo-
yo relationship going back and forth between the Administration
and the Congress in determining exactly how much money is
involved here in this mismanagement.
And I believe that this is one of the critical factors as
to why Ms. Cobell felt that we need to file a lawsuit because
we are not getting anywhere. Now, 14 years later, we are now at
this point, and as I said previously in my statements, I cannot
believe that this is the amount of money that is being
involved.
And I honestly believe it is a lot more than $3.5 billion
or whatever. I wanted to ask you when Ms. Cobell initiated the
lawsuit, what was the reaction from the Indian Country?
Did any of these 250 tribes go and give their moral
support, as well as financially, when she was struggling to put
this through the Federal Court system? Professor Monette.
Mr. Monette. I think it is fair to say that my tribe did.
My tribal leader, who I respect greatly, Twila Martin Kekahbah,
at that point pulled me aside and talked with me about it.
I know that there were very warm feelings for the Native
American Rights Fund at the time, and that we thought that the
Native American Rights Fund was going to see this case through
to the end, and win all those $170 billion that Mr.
Faleomavaega would apply here, and I am all with you on that,
and NARF would get their fair share of that.
Looking at the settlement today, the Native American Rights
Fund is not even listed as class counsel, and I am sure that
they want to be, but I am also sure that they recognize at this
point that there are some very sort of dangerous conflicts of
interest for them putting it in there today. But I can tell you
at that time that that is the discussion that we had.
Mr. Faleomavaega. I sense also from reading your statement
and your comments, Professor Monette, that in your honest
opinion that the current process has evolved with the
involvement of the Department of the Interior.
Is the process agreeable to you, both legally and policy
wise, or do you have some serious questions on how we came up
with where we are now, where Secretary Salazar has given
agreement to this proposed $3.7 billion that we are going to
provide in the settlement.
Mr. Monette. One thing that we have not heard yet, and I
assume that we will, but the Department certainly hasn't been
with clean hands throughout this process. We have seen them
basically taking five IAM accounts and massaging them into one
over time.
We have seen them preparing for this settlement, where we
have people who have trust interests in land out there, who had
no IAM account, and they created an IAM account. All of this is
to cast the broader net for buy-in, along with the land
consolidation funds, and scholarships, and all of that.
There has been authority for land consolidation since 1934
frankly, since the Indian Reorganization Act. There have been
authorization from this body for scholarships. They have always
been under funded, and they should be funded.
What they have to do at this settlement other than dangling
a carrot in front of people for buy-in is beyond me. There is a
better process. We are better than this. This is of a
historical moment for our people.
Fifty years from now, we will look back and look at that,
frankly, indefensible law that this body passed a hundred plus
years ago, the General Allotment Act, and we will look at this
as an attempt to fix part of it forever.
And I hope it would as well, but if we are going to do that
with that much historical moment, we might as well do it right.
Mr. Faleomavaega. Thank you, Mr. Chairman. I think my time
is up. If I could just raise one short comment to Mr. Nunez,
the Chairman and member of the Tohono Tribe in Arizona.
I visited your tribal nation there a couple of hears ago
with my cousins, who played for the University of Arizona
football team, and I just wanted to ask you if our high school
football team is coming along OK.
I am going to ask my cousin, who is currently the defense
coordinator for the University of Arizona, to pay you another
visit to make sure that our high school there is coming along
OK, and if it is OK with my friend, Raul, here, we can do that.
Thank you, Mr. Chairman.
The Chairman. The gentleman from Louisiana, Mr. Cassidy.
STATEMENT OF HON. BILL CASSIDY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF LOUISIANA
Mr. Cassidy. Mr. Monette, I heard an expression once that
the enemy of the good is the better. Now, I think that has a
lot of truth. I have been here about a year, and it seems like
it is very hard to get anything done. If you are talking about
50 years from now, it almost seems like this could still be
litigated 50 years from now.
Clearly, there are some problems with the legislation. On
the other hand, it does seem to redress some things which need
to be redressed, and it seems to bring conclusions to something
that seems like it could go on forever.
What are your thoughts about that statement? And, Mr.
Nunez, I appreciate both of you gentlemen's perspectives on
that, too.
Mr. Monette. I am in agreement that the time is now or near
to get this all behind us.
Mr. Cassidy. But it doesn't seem like it is going to happen
now in a year.
Mr. Monette. The problem with that is the broad brush that
this has been done, and the devil is in the details, or the
devil should be in the details here, and some of the details
are missing.
My tribe, for example, the Turtle Mountain Band of
Chippewa, the reservation was too small when the allotment
came, when the Allotment Act came about. So, twenty-five
hundred heads of households were granted allotments 500 miles
away from the tribe, in South Dakota, in Minnesota, and in
Montana.
Those allotments are so far from the tribe that the tribal
government, as a tribe, as a collective body, has not been able
to pay attention to those claims and those allotments over the
years.
Many of them have been lost. We on occasion find telephone
lines running through the middle, and we find that some of them
have had oil pumped out of them without there ever being a
lease.
This was all the subject of the Senate Committee on
Investigations, a long investigation about 20 years ago, over
three years. Now, none of that has been resolved yet. Some of
those claims could be worth frankly thousands or millions.
But this legislation will dangle in front of my tribe and
my tribal members, where there is 80 percent unemployment,
dangle $500 in front of them, and say will you take this in
exchange for whatever has happened in the past, and I am afraid
that they are going to say yes. And everybody has got their own
will, but at least I want them to know that.
Mr. Cassidy. Let me hear from the other two gentlemen.
Mr. Nunez. I would say that there are some issues that will
be resolved through the settlement. However, as you mentioned,
and others have mentioned, there are other issues that will not
be addressed.
And it is very uncertain how they will be addressed in the
future. However, I believe that more support from the
Department of the Interior needs to be provided so that they
can assist the tribes and the individual allottee landowners.
Without that support and qualified staff to be able to
delve into the fractionation issues, and the boundary issues,
it will still be there.
Mr. Cassidy. So we are focusing on the money, but the
corrective direction to the Interior would be one very good
part of this settlement, and that going forward theoretically,
this would not continue to be an issue. So you would focus on
that as a good that would be a strong reason for supporting the
settlement?
Mr. Nunez. Yes, sir.
Mr. Cassidy. Independent of whether or not we can dispute
about the money. Mr. Finley.
Mr. Finley. I agree now or near is the time to do it, but I
think we need to be deliberate about it. The Indian
beneficiaries need to be informed. They want transparency. The
tribal leaders want transparency.
So if this is to move forward, we need to keep that in
mind, that that is what we want at the very least, because we
are talking about a hundred years of history here. Yet, we are
being asked on the other hand by some to say, well, don't ask
questions right now. It could prevent things from moving
forward.
Your opportunity to ask questions will come later. That is
a tough sell to people in Indian Country who have experienced
all the injustices over the years. It is not the same Indian
Country that once existed then. People are self-empowered, and
are not afraid to ask questions, and they want their questions
answered.
Mr. Cassidy. So, Mr. Finley, and Mr. Nunez, what level of
outreach have you seen or would you expect prior to this
settlement? What do your members tell you that they are hearing
about the benefits that will accrue to them from this
settlement?
Mr. Nunez. Well, in our case, the Santa Vera Lodge
Association has supported the settlement. I am not real sure
about the allotment owners in Hill River and Salt River, in
those areas.
But I believe as I mentioned earlier that just getting out
there and talking to them, and making the presentations about
the settlement will go a long ways to helping them understand.
And through those presentations, then if there are
questions and concerns, then we will hear about them, and then
we as the Indian Land Working Group, would also be willing to
assist them with regard to their concerns.
Mr. Cassidy. Mr. Finley, you were going to answer?
Mr. Finley. I would have to agree with that comment. It is
my understanding that there are outreach efforts currently in
the works right now with an organization in the northwest.
Certainly ITMA would be more than happy to help assist in
that process to get the information out to the people, and I
think that if the parties involved were to participate in that,
which it is my understanding that they do plan to, then I think
that will go a long ways in addressing some of the problems,
concerns, and questions that I have heard within recent months.
Mr. Cassidy. Thank you.
The Chairman. The gentleman from Arizona, Mr. Grijalva.
Mr. Grijalva. Thank you, Mr. Chairman. I have kind of a
wandering question for all three, and thank you very much for
you testimony. it was very edifying. The issue of class
notification, I have heard it from all three of you that it is
important that Indian Country be involved in knowing, and being
notified of what the proposed settlement is.
The issue of collusion, I don't know how you resolve that
other than to halt any legislative initiative until that is
judicially investigated, which I think was a suggestion.
But at the same time, there is an urgency, and I want to
deal with that urgency question. Can we accomplish putting
together the legislation to carry out the settlement with
urgency, and I think the issue of historical--the hundred
years--is appropriate, and has to be part of the context.
The last 14 years has to be part of the context. So, there
is for many people an urgency to move this settlement forward
and to close this chapter, and move on to other chapters, which
requires the Department of the Interior to continue their
responsibility in a very serious way.
So is it doable to move forward with urgency, and with
deliberate speed, or hold the process in abeyance until issues
of class notification, and collusion, are settled. And I pose
the question, and I don't mean to make it either/or, but it is,
because I think--well, never mind. Go ahead.
Mr. Finley. I would support it moving forward. I would just
hope that our recommendations that are in the written testimony
are given due consideration as we move through this process.
I hope that as many questions that linger out there are
answered, and I hope that opportunity will be given to those
who fall through the cracks, and who really aren't included in
the Class II portion be given an opportunity, instead of just
or you can opt out.
I think that the history shows that these people deserve an
opportunity. They don't always have the means, the financial
means, or even the physical means, that it takes, the
wherewithal if you will, to see that through.
Mr. Grijalva. Describe opportunity for me if you don't
mind.
Mr. Finley. Well, in my written testimony, we had offered a
third option.
Mr. Grijalva. OK.
Mr. Nunez. I would say that we could meet the outreach
efforts within the time frame that we are allotted, and again,
if we just explain all the aspects of it, and answer the
concerns as best as possible.
I believe that we will get to the landowners and the tribal
governments to be able to bring this to closure.
Mr. Grijalva. OK. Professor.
Mr. Monette. You know, there are probably five thousand
studies out there that all conclude one sentence pretty much,
and that is that people are OK to lose. They are OK to be
adversely affected as long as they feel that the process was
fair.
And so far, I don't think they feel that way. This is a
start. I recognize that there is urgency, but deliberation and
transparency will be important here for what Congress does.
I note that Congress has plenary power, and so Congress can
do it at once. My old dad, who was successfully elected to our
tribal council more times than anybody had ever been, he always
called it--he always said to me, so Congress has plenty power.
They do.
Mr. Grijalva. We don't use it well sometimes, but it is
plenty.
[Laughter.]
Mr. Grijalva. At the end of that deliberate outreach with
some urgency attached to it is the goal unanimity of opinion or
is the goal for people to be informed of the people affected?
Mr. Nunez. I would say both.
Mr. Grijalva. OK.
Mr. Finley. I would agree.
Mr. Grijalva. OK. Thank you. I yield back, sir.
The Chairman. The gentlelady from Wyoming, Ms. Lummis.
Mrs. Lummis. Thank you, Mr. Chairman. And I appreciate this
hearing. I am just trying to help the tribes that reside in
Indian Country within the State of Wyoming, but Northern
Arapaho and Eastern Shoshone understand what is being proposed
here.
Chairman Finley, I want to clarify a little bit about how
somebody can opt out. For those within the trust
administration, or damage claims classification, you raised
some concerns about what the process would be for an
individual.
Can you or either of our other two witnesses today share
any additional insight with me as to what frame work the
settlement agreement establishes for an individual who pursues
the opt out provision?
Mr. Nunez. My understanding is that if one wishes to opt
out, then they can seek their own legal counsel to pursue their
concerns. Granted, however, there are a majority of our Indian
people that may not have the means to do so. However, we are
still giving them that option that is there.
Mrs. Lummis. And I also understand that individuals with
damage claims, they will be given approximately $500, plus a
stipend based on a preset formula. Do you know how this payment
compares to past successful damage claims of this nature, or is
there a standard that we can look to, to see if this is
reasonable?
Mr. Nunez. Personally, I am not aware.
Mr. Finley. I am not either, but I can say that this is new
to Indian Country, the class action lawsuit, as it is being
brought forward now.
Mrs. Lummis. Thanks, Mr. Finley. Another question for you.
You mentioned in your testimony that you think the attorneys'
fees should come out of the Equal Access to Justice Act, the
EAJA Fund, instead of the judgment fund, which may be
reasonable, except that I would alert you that each places no
firm cap on the amount of attorneys' fees that can be
recovered.
So how would Congress ensure the level of funding being
directed toward attorneys in this case is appropriate?
Mr. Finley. I don't know. As you pointed out, the decision
rests with you, but if you would like an answer from me, I will
work on that and get it back to the Committee.
Mrs. Lummis. Well, thank you, and I will mention to you
that I, along with two other members of this Committee,
including Representative Herseth Sandlin, who is here today,
have recently introduced legislation that would require the
Federal Government to make transparent the attorneys' fees that
are paid out under each.
For the last 15 years, there are no records of how much the
hourly rate was, to whom they were paid, whether it was a
settlement or a judgment amount that was paid out under EAJA,
and to whom, and so we are trying to shine some light on
attorneys' fees paid out under EAJA.
And given the amount of attorneys' fees in this settlement,
it may appear to be somewhat open-ended. It is a pretty broad
range, 50 a hundred-million. What assurance is there that
Indian Country will ever know how much attorneys ultimately
receive as a result of this settlement?
Mr. Finley. I don't know that we will know. I would like to
think that we would, considering everything that is at stake,
and all the individual beneficiaries who will be compensated,
or who choose to opt out, or whatever happens as we go through
this process.
But as you heard today, people are interested in that
topic. People are concerned about it, and they want to know the
answers to that. So I would like to think at the end of the day
that we will be able to see that number and know and look at
it.
And you mentioned earlier that you were not aware of what
the attorneys' fees were, et cetera. I thought our tribe was
the only one that had that problem, but evidently I was wrong.
Mrs. Lummis. That is true throughout EAJA, and that is true
regardless of the Federal Agency that has been sued under EAJA,
and we hope to rectify that. Thank you very much for your
testimony. Mr. Chairman, thank you.
The Chairman. The gentleman from New Mexico, Mr. Heinrich.
Mr. Heinrich. I have just a comment for Chairman Finley. I
appreciate you bringing up the issue of consultation with
tribes on the implementation of the Tribal Land Consolidation
Fund.
I think that if we are to approve this, that is a critical
piece moving forward, and I would certainly welcome the
opportunity to press for adequate consultation as we move
forward on this.
Mr. Finley. I appreciate that.
The Chairman. The gentlelady from South Dakota, Ms. Herseth
Sandlin.
Ms. Herseth Sandlin. Thank you, Mr. Chairman. I don't have
any questions for this panel, but I want to thank you for
having this hearing. I thank the witnesses for their
perspectives and what they have offered to the Committee.
Mr. Chairman, as you know, I represent nine sovereign
tribes in South Dakota, and this agreement, if approved by
Congress, would have a profound impact on the State. There are
approximately 20 thousand of the accounts that are held by
individuals within the State's borders, and this is the largest
number of any State.
We do know that there are various--either regional or
national--associations or individual tribes that are weighing
how this should go forward, possibly looking at resolutions
desiring more hearings, more consultation, more information.
In that regard, I do think it is important that as we
assess the views of the various account holders that they do
feel, and as the professor indicated, that there was a fair
process. That they had a chance to fully understand the
ramifications of this agreement, and in that respect, I do want
to recognize Ms. Cobell.
She has taken the time to visit Indian Country in South
Dakota most recently, in the Pine Ridge and Rosebud
Reservations, to answer questions. And I think it is just
important that we ensure fair process, and part of that is
having this hearing today to get a better and broader
perspective of the ramifications of the agreement, and the
perspectives of the Administration, different tribal leaders,
as well as Ms. Cobell herself. So I thank you, Mr. Chairman,
for the opportunity.
The Chairman. Any other Members of the Committee wish to be
recognized? If not, gentlemen, we thank you for your testimony
today. The Committee will now hear from The Honorable David
Hayes, a Deputy Secretary, United States Department of the
Interior, Washington, D.C., accompanied by The Honorable Hilary
Tompkins, Solicitor, United States Department of the Interior,
Washington, D.C.
And our second panelist will be The Honorable Thomas J.
Perrelli, Associate Attorney General, United States Department
of Justice, Washington, D.C. We welcome each of you. We do have
your prepared testimony. It will be made a part of the record
as if actually read. David, we will recognize you first.
Welcome back to the Committee.
STATEMENT OF HON. DAVID HAYES, DEPUTY SECRETARY, U.S.
DEPARTMENT OF THE INTERIOR, WASHINGTON, D.C.; ACCOMPANIED BY
HON. HILARY TOMPKINS, SOLICITOR, U.S. DEPARTMENT OF THE
INTERIOR, WASHINGTON, D.C.
Mr. Hayes. Thank you very much, Mr. Chairman, and Members
of the Committee, it is a pleasure to be here today to respond
to questions about this very important settlement.
I want to first at the outset let all of you know that this
has been from day one an incredibly high priority for this
Administration to see if we could resolve this long-running
Cobell lawsuit.
It has taken 13 years, hundreds of millions of dollars in
litigation on both sides, 20 appellate opinions, dozens
literally of hearings and trials, scores in fact of hearings
and trials, and it has been a corrosive case that has hurt the
relationship between the United States and Indian Country.
From day one, Hilary Tompkins, to my left, the first ever
American Indian Solicitor at the Department of the Interior,
and I, on behalf of the Secretary, took this on personally to
see if we could through our personal involvement at the highest
levels, break through what had been 13 years of failure
basically to try to reach closure on this.
We were joined at the hip by Attorney General Eric Holder,
and his top associate, Deputy Attorney General Tom Perrelli. We
were personally engaged in these discussions, and we worked
with a team that represents the class affected by this
settlement.
The 300 to 500 thousand individual Indians are represented
through the class action by a team of lawyers, and the
relentless and impressive Elouise Cobell, who you will hear
about, and hear from in the next panel.
We feel that this settlement is a fair settlement, and an
appropriate settlement, and I am going to defer to Tom to talk
about some of the legal aspects that have been raised in this
hearing.
Let me just mention a couple of issues of special
importance to the Department of the Interior, and our trust
responsibility to the individual Indians who have trust
accounts and to tribes who have trust accounts.
It is our view that we need to resolve these historical
issues and set the course, and turn the page, and look ahead,
and repair our management of trust assets with the tribes, and
look ahead and not behind.
Toward that end it was very important to the United States,
and we think it is very important for this Congress that this
chapter be closed, and that the backward looking of historical
accounting be fully accounted for, and resolved, and that means
not just the question of whether the accounting has been done,
but also woven into the issue is the question of in addition to
the accounting, the green eye shade work, has the assets
themselves been mismanaged.
That was all an important element, and we thought if we
just resolved the question of the accounting, and didn't deal
with the question of mismanagement, we would be back here
spending literally $50 million a year as far as the eye could
see.
So we went to the class, and the class will work with the
Judge as Tom will explain, to work through that element of the
settlement. We wanted to close the book and look ahead.
And toward that end, Mr. Chairman, and Members of the
Committee, as explained in my written testimony, as soon as
this settlement goes forward, we are impaneling a new
commission to ensure that as we move forward with our trust
management that we are taking the best of what we have learned
over the last 13 years.
We will hire folks. We are going to have a five-member
panel, well represented by Indian Country. We are going to look
at what worked and at what didn't, and we are going to see how
we reorganize the Department, in terms of the trust management
issues.
We have an Office of Special Trustee. We have a Bureau of
Indian Affairs, with different responsibilities, and some
conflicts in terms of customer service at the least. We want to
do it right.
This was a very important point by Elouise Cobell and her
colleagues here, and we accept it. We want tom move forward and
do this right going forward. Let me finally--and one aspect of
doing it right going forward that we were very insistent on--is
that part of the problem that led to Cobell is the
fractionation of Indian lands.
And the fact that over time we now have four million
individual interests in highly fractionated tracks of land that
do nobody any good, and the expense is enormous, and the
opportunity for error and mismanagement is enormous.
So we worked with the Plaintiffs to have as part of this
settlement a resolution of that root cause problem of
fractionation. That is why the $2 billion associated with
getting money back into the pockets of these individual
Indians, and at the same time freeing up those lands, and
taking away the root cause of these errors of these individual
accounts is so important, and why we are so excited about the
settlement.
Let me say finally that in terms of how we implement that
settlement, we are looking forward to vigorous government to
government consultations with all of the tribes on how we
implement.
And to your point, Congressman Heinrich, the land
consolidation program, because this is going to be a benefit to
the tribes, as well as to the individual Indians who are
settling in this matter, and we want their help, in terms of
prioritizing lands that should be acquired through this
program, and working with them every step of the way.
And as we can talk about in the Q and A, we are anxious to
make sure that the word and understanding about this settlement
gets out in Indian Country. We have done a number of outreach
efforts already. We are ready to do more.
We frankly thought it presumptuous to go out and assume
that this settlement would be approved by the Court and by the
Congress without getting your approval first, and we look
forward to getting that in the near future. Thank you, Mr.
Chairman.
[The prepared statement of Mr. Hayes follows:]
Statement of David J. Hayes, Deputy Secretary,
U.S. Department of the Interior
Good morning Mr. Chairman, Mr. Hastings, and members of the
Committee. Thank you for the opportunity to provide the views of the
Department of the Interior (Department) regarding the Settlement that
has been reached between the United States and the plaintiffs in the
Cobell class-action lawsuit and accompanying legislation, the
``Individual Indian Money Account Litigation Settlement Act.'' The
Cobell case, which devolved into contentious and acrimonious litigation
over the Department's trust management and accounting of hundreds of
thousands of individual Indian trust accounts, has hindered U.S.
efforts to work effectively in Indian Country for more than a decade.
During these years many members of this Committee have signaled a
desire for the agencies involved in this litigation to find a way to
bring the case to resolution. And in December 2009, we achieved an
agreement. I am very pleased to say that the Settlement we have reached
is a fair one, a forward-looking one, and one that I am certain will
strengthen the relationship between the federal government and Native
Americans. This Settlement will enable us to move ahead together and to
focus on the many pressing issues facing Indian Country.
The agreement is the product of good faith, arms-length
negotiations between the United States and plaintiffs. It not only
resolves litigation over the U.S. government's management of hundreds
of thousands of individual Indian trust accounts, but also addresses
one of the root causes of the trust accounting controversy--namely, the
fact that tens of thousands of individual accounts have proliferated
through the years due to the continued ``fractionation'' of Indian
ownership interests in land. This has led to large and growing expenses
related to the tracking of small trust accounts, opportunities for
trust accounting errors, and the unavailability of highly fractionated
lands for productive uses.
This negotiated agreement lays out a path for the responsible
management of Indian trust assets in the 21st century. The agreement
strengthens the trust relationship between the United States and our
Native American citizens, a relationship that has at times been fraught
with challenges but a relationship which the members of this Committee
have long sought to develop into one of mutual respect and
understanding. In this statement, I will briefly describe the
components of the proposed Settlement and related steps being taken by
the Department to improve our management of Indian assets. I am
accompanied today by Hilary Tompkins, the Solicitor for the Department
and the first American Indian to hold that post. Ms. Tompkins
participated actively in the negotiations, which I led on behalf of the
Secretary of the Interior.
Accounting and Trust Administration Claims Settlement
The first part of this settlement agreement resolves claims related
to the class-action lawsuit brought by the plaintiffs in Cobell v.
Salazar. The case centers around the U.S. government's accounting of
over three hundred thousand individual American Indian trust accounts.
The Settlement would resolve not only the plaintiffs' claims for an
historical accounting for funds that the government holds in individual
American Indian trust accounts, but also all claims associated with the
management of these trust funds and the underlying trust assets
(consisting of land and resources that are held in trust for individual
Indian members of the plaintiff class). The Settlement addresses all
existing and potential trust-related claims that the plaintiffs may
have against the United States to date, and thus brings final closure
to this long and difficult issue.
Under the terms of the Settlement regarding trust management and
accounting issues, approximately $1.4 billion would be distributed to
the class members, which consist of certain American Indians and Alaska
Natives, as defined in the Settlement. Each class member with an
historical accounting claim will receive $1000 and class members may
also receive additional funds related to trust management claims under
a formula set forth in the settlement agreement. By addressing alleged
mismanagement as well as accounting-related claims, this settlement
fund will fully resolve all potential claims by individual class
members and avoid all further ``look-backs'' regarding prior fund
accounting and trust management issues.
Because the question has come up frequently in discussions about
this Settlement, I want to briefly address the issue of attorneys' '
fees. The Settlement provides a fair structure for determining the
proper amount of attorneys' fees. Under that structure, attorneys' fees
would be paid out of the $1.4 billion settlement fund (and so would not
require additional taxpayer funds), and would be in an amount which the
court will decide. Under the Settlement, the plaintiffs have agreed
that they will not ask the court to make an award outside the range of
$50 million to $99.9 million to compensate plaintiffs' attorneys for
work they have performed since the case began more than 13 years ago.
Individual Indians may object to any such requests, and the United
States believes that as much of the fund as possible should go to the
individual class members. If the judge awards a figure within that
range, the parties to the Settlement have agreed that they will not
appeal the court's determination. The Settlement provides that when the
federal judge makes a decision regarding the appropriate level of
attorneys' fees, he will have before him the plaintiffs' attorneys'
actual records of the time they spent working on this case.
The plaintiffs' attorneys also have the right under the Settlement
to ask the court to approve payments for work performed after the date
of the Settlement, based solely on attorney hours and actual billing
rates and actual expenses and costs incurred, up to a capped amount of
$12 million. The government and individual Indians may object to any
such requests, and the court may award less than the amount requested.
Negotiating for payments of attorneys' fees is a typical part of the
resolution of class action cases, and the approach taken in this
Settlement is a fair and reasonable one.
Correcting Fractionation
The second part of this Settlement contains provisions designed to
address the ``fractionation'' issue that is one of the root causes for
the allegations included in plaintiffs' claims, and which needs to be
addressed in order to reduce potential liability for Cobell-type claims
in the future. This problem consists of the continued proliferation of
new trust accounts as land interests held in trust for individual
American Indians continue to subdivide (or ``fractionate'') through
inheritance processes. The Settlement and legislation provide for a $2
billion fund for the buy-back and consolidation of fractional land
interests. The land consolidation fund addresses an historic legacy of
the General Allotment Act of 1887 (the ``Dawes Act'') and other related
allotment statutes, which divided tribal lands into parcels of between
40 and 160 acres in size, allotted them to individual Indians, and sold
off remaining unallotted Indian lands. As original allottees died,
their intestate heirs received equal, undivided interests in the
allottees' lands. Today, it is not uncommon to have hundreds of Indian
owners for one parcel.
The result of the continued proliferation of thousands of new trust
accounts caused by the fractionation of land interests through
succeeding generations is that millions of acres of land continue to be
held in such reduced ownership interests that only a small percentage
of the individual owners derive a meaningful financial benefit from
their ownership. Indeed, as of September 30, 2009, there were
approximately 140,000 tracts of land owned by individual Indian
allottees and more than four million interests. It has been estimated
that these four million interests will expand to eleven million
interests by the year 2030 if the actions contemplated in this
Settlement are not taken. This situation creates more harm than good
for the individual owners, the tribes and the federal government. The
proliferation of individual interests creates obligations for the
Department to undertake a detailed accounting for tens of thousands of
very small accounts, thereby triggering both expense and opportunity
for errors such as those alleged in the Cobell litigation. In addition,
because there are multiple owners of land, often with individuals
having very small shares, it typically is impossible to obtain consent
from the owners regarding steps to ensure the productive use of such
lands. As a result, in too many instances, tribes find economic
development efforts stymied by their inability to utilize heavily
allotted tracts of land for much needed energy, commercial, and
agricultural development.
Under the provisions of the Settlement for land consolidation
efforts, the Department would use a $2 billion fund for the buy-back of
fractional land interests. The Department would use existing programs
and law to make these acquisitions, with additional authority that
would be provided under the proposed settlement legislation for the
conveyance of interests held by persons who cannot be located after
engaging in extensive efforts to notify them and locate them for a
five-year period.
Because the value of many highly-fractionated interests in land
will be very small, and owners of those interests may not be inclined
to cash out their small interests, the Settlement sets aside up to $60
million for use in incentivizing the sale of fractionated interests.
More specifically, contributions can be made on behalf of sellers of
fractionated interests to an existing non-profit organization that
provides scholarships and other support for educating American Indians
and Alaska Natives.
Long-Term Trust Reform
To address the future of Indian trust management, on December 8,
2009, Secretary Salazar signed a Secretarial order to establish a five-
member national commission to evaluate ongoing trust reform efforts.
The commission will make recommendations on the future management of
individual trust account assets and the need for comprehensive auditing
of these operations. While the Department has made significant progress
in improving and strengthening the management of Indian trust assets,
our work is not over. The Commission will make recommendations
regarding how to improve trust management services on a going-forward
basis, such as recommendations regarding the appropriate roles of
various Interior agencies including the Office of Special Trustee and
the Bureau of Indian Affairs.
Conclusion
I hope you will help us to secure swift enactment of the necessary
legislation. As the members of this Committee are aware, this
Settlement is a starting point, not an ending point. It is time now to
move beyond the litigation and to commit to working cooperatively with
American Indian and Alaska Native communities to address education, law
enforcement, and economic development challenges. Moving forward,
Secretary Salazar and I are committed to conducting government-to-
government consultation with tribes to make sure that this Settlement
is fully understood by the people who will be most impacted by it and
to seek vital tribal input on, and assistance with, implementation of
the land consolidation component of the Settlement. With this
Settlement we will turn the page on a dark chapter in Indian Country
and begin to move forward, together, towards our common goals.
Thank you for the opportunity to appear before you today. I look
forward to answering your questions.
______
The Chairman. Thank you, David. Mr. Perrelli.
STATEMENT OF HON. THOMAS J. PERRELLI, ASSOCIATE ATTORNEY
GENERAL, U.S. DEPARTMENT OF JUSTICE, WASHINGTON, D.C.
Mr. Perrelli. Good morning, and thank you, Chairman Rahall,
and Ranking Member Hastings, and other Members of the
Committee. The litigation, known as now Cobell v. Salazar, has
lasted 13 years, and has been an extraordinarily important
issue for this Committee, and for the United States, and it has
cast a shadow on the United States nation to nation
relationship with tribal governments and their members.
We at the justice department view the December 7th
settlement as historic, and we think that we are given a choice
of now ending that litigation finally or returning to the
courtroom, and we think the opportunity presented by the
settlement is worth seizing, because we think it is fair to the
Plaintiffs, and responsible for the United States, and provides
a path as Mr. Hayes said for moving forward in the future.
We very much welcome the opportunity to answer questions
and dispel some of the misconceptions about the settlement. As
has already been discussed, the settlement contains many key
elements that Members of Congress and both parties have sought
to address in prior efforts to resolve this matter.
It resolves historical accounting claims, thereby providing
a $1,000 check to be sent to each member of the class, and
bringing the government and each holder of an individual Indian
money account into agreement on the balance of each account.
And I would say that that piece of the settlement, and the
language that was quoted on the prior panel, addresses just
accounting claims, and not the trust mismanagement claims. So I
don't think there is any uncertainty there.
Second, the settlement also addresses trust administration
or mismanagement claims. Those are claims that allege over the
years the government has mismanaged hundreds of thousands of
acres of land and millions of dollars, including proceeds from
them that it holds in trust for individual Native Americans.
Over the last 14 years, these claims have long been linked
with this lawsuit. Much of the litigation over the last 14
years has been about what has been in the lawsuit, and what has
been out of the lawsuit.
Many of the efforts in Congress, including the efforts that
came out of the One Hundred and Ninth Congress, sought to
finally resolve both the accounting claims and potential trust
mismanagement claims altogether, because it was recognized, I
think, by everyone, that bringing these matters to final
resolution was a benefit to everyone, and that if we were left
with the specter of years of litigation about mismanagement
claims, we really would not have achieved very much.
Under the settlement, the complaint will be amended to make
clear that the trust administration claims are part of the
case, and each and every Plaintiff in the class will receive a
payment based on a formula, reviewed and approved by the Court.
The payments, in addition to the thousand dollars for the
historical accounting for that class, will start at $500, but
will range up in some cases to hundreds of thousands of dollars
for individual Native Americans.
All told, between the accounting and the trust
mismanagement claims, the Plaintiff class will be receiving
approximately $1.4 billion. In contrast to what was intimated
in the last panel, there is no reversion of that $1.4 billion
to the government.
That $1.4 billion will go to class members, to the extent
that there may be unclaimed funds, there is a provision that
allows that to go for scholarship funds.
Finally, as Mr. Hayes said, there is a framework for
addressing the problem of fractionated lands and a path forward
so that we are not in this position again in five years, in 10
years, and 15 years, and 50 years.
We very much appreciate the opportunity to answer questions
about the settlement, and we have tried to be as transparent as
possible from the outset of this process. As soon as the
settlement was reached in December of 2009, the Secretary, and
Deputy Secretary, and the Solicitor of the Department of the
Interior, held or how a call with tribal leaders across the
Nation to inform them about the settlement.
The Department of the Interior and I have participated in
hearings before the Senate Indian Affairs Committee, and sat
before tribal leaders at the National Congress of American
Indians, and answered all questions that were raised, and
Federal representatives appeared before other tribal
organizations.
And I know that Ms. Cobell and her counsel have engaged in
similar outreach. Going forward, when we talk about notice to
class members, and the opportunity for even more outreach, what
we have done to date is really only the beginning.
Once the legislation passes, and the settlement is filed,
formally filed with the Court for preliminary approval, that
will trigger the notification provisions of Rule 23, and will
result in a robust notice, and we include that individual
letter sent to class members that will provide an explanation
of the settlement.
And then we envision significant outreach, including radio,
television, and other means to ensure that there is a maximum
amount of information to all class members so that they will
have the opportunity to consider.
And then they will be able to go before the Judge and
object to the Judge, and consider opting out, and object to
particular parts of the settlement, but through the ordinary
process that occurs with class actions.
So we think that there are going forward going to be
enormous opportunities for class members to review and comment
on the settlement. Thank you to the Committee for this hearing,
and we look forward to answering your questions.
[The prepared statement of Mr. Perrelli follows:]
Statement of Thomas J. Perrelli, Associate Attorney General,
U.S. Department of Justice
Good morning and thank you to Chairman Rahall, Ranking Member
Hastings, and the other members of the Committee. The litigation that
is today known as Cobell v. Salazar has lasted thirteen years, and over
those years it has been an important issue for this Committee, its
members, and their constituents.
That interest is well-placed, as Cobell v. Salazar is one of the
largest class actions ever brought against the U.S. government. What
began in 1996 has seen 7 full trials constituting 192 trial days; has
resulted in scores of judicial decisions; has been up to the Court of
Appeals ten times; and has been the subject of intense, and sometimes
difficult, litigation.
Thanks in large part to the direction and support that the members
of this Committee have provided over the years, on December 7, Mrs.
Cobell's attorneys and the United States signed a settlement that would
turn the page on that history.
The settlement, which will require legislative and judicial
approval to become effective, is fair to the plaintiffs, is responsible
for the United States, and provides a path forward for the future. The
settlement contains many of the key elements that Members of Congress
have sought to address in prior efforts to resolve this matter. First,
the settlement resolves the plaintiffs' claims for an historical
accounting. The resolution on this issue, like other aspects of the
settlement, is important both for the past and the future. It is
important for the past, because it will result in a $1,000 check being
sent to each member of the class. And it is important for the future,
because it brings the Government and each holder of an Individual
Indian Money account into agreement on the balance of each account--
something that has been contested since this litigation began.
Second, the settlement resolves what have been called the ``trust
administration'' claims. Such claims allege that over the years, the
Government has mismanaged the hundreds of thousands of acres of land
and millions of dollars--including proceeds from those lands--that it
holds in trust for individual Native Americans. Although to date few
such claims have been brought, allegations of trust mismanagement have
remained a possible threat to rebuilding the long-term relationship
between the Department of the Interior and Native Americans. There has
always been concern that, even if the Cobell case settled, it would
simply be followed by a slew of mismanagement cases that would continue
the acrimony. Under the settlement, the plaintiffs will amend their
complaint to add these claims, which will then be resolved. Each and
every plaintiff in this class will receive a payment, in addition to
the $1,000 check for the accounting claims, based on a formula to be
approved by the Court. And the Department of the Interior will know
that it has put those trust administration claims, too, behind it.
Between the accounting claims and the trust administration claims,
the plaintiff class will be receiving approximately $1.4 billion.
Finally, the settlement provides a framework through which the
Department of the Interior can address one of the principal factors
that has led down this path. The trust system that the Government
manages has become increasingly complex over the years, as lands that
were jointly owned by a small handful of individuals many decades ago
are now often owned by several times that number, as the individual
owners have passed away and left those interests to be divided among
their heirs. Much of this land, divided up among sometimes hundreds of
owners, has severely limited economic potential.
To address this problem of fractionated lands, the settlement
contributes additional funds to a land consolidation program that
provides critical benefits to every party. For individuals who own a
fractional amount of land and wish to sell it, it will put money
directly into their hands. The tribes that will ultimately own these
newly consolidated interests will have productive assets that they can
finally put to beneficial economic use. And over time, the Department
of the Interior will reduce the hundreds of thousands of small accounts
that it has been managing at a highly disproportionate cost.
As I mentioned, this settlement is not final. It requires
authorization from Congress and approval from the court. We hope that
both will happen quickly.
The legislation that is required to implement this settlement
accomplishes a number of things. Among other things, it ensures that
the United States District Court for the District of Columbia, which
has been handling the litigation, can continue to assert jurisdiction
over it after the plaintiffs amend their complaint. The legislation
also sets up two funds within the Treasury of the United States,
permits the court to certify a single class of trust administration
claims, and--much like earlier efforts to resolve Cobell--authorizes
the Secretary to administer the land consolidation program that is
critical to the settlement. We believe that Congress should move
forward with this legislation as quickly as possible.
The settlement also requires approval from the court. Once
legislation has passed, the parties will present their proposed
settlement to the court, and will begin the process of explaining it to
class members across the country. Those individuals and others will
have an opportunity to review the settlement and express their views on
it, and the court will ultimately decide whether it represents a fair
resolution of the claims. We believe that this formal process of
explaining the settlement to the class, which the court does not have
authority to initiate until after legislation passes, will be an
important opportunity to provide information and answer questions--and
for the court to ensure that the settlement meets the legal
requirements of fairness to the class.
In the meantime, the parties are already engaged in extensive
active outreach to explain the Settlement, both to the individual
Indians who are the members of the plaintiff class in the litigation
and to Indian tribes. Once the Settlement was reached in December 2009,
the Secretary, Deputy Secretary, and Solicitor of the Department of the
Interior held a call with tribal leaders across the nation to inform
them of the Settlement and to answer their questions, followed by a
widely-publicized hearing before the Senate Indian Affairs Committee.
Representatives of the government also recently appeared before the
National Congress of American Indians to answer questions and provide
information on the Settlement. Similarly, federal representatives have
appeared before other tribal organizations to provide information
regarding the Settlement. Mrs. Cobell and the plaintiffs' counsel are
engaged in similar outreach.
Throughout our discussions with the plaintiffs, we have been guided
by two principles. First, we wanted true peace for the parties. We
wanted to turn the page on history. The resolution of the accounting
and trust administration pieces of this litigation will do that. And
second, we wanted to put Interior on a new path for the future, and
give it tools to address some of the underlying conditions that have
contributed to its challenges. The land consolidation program will do
that.
This settlement is a successful resolution for Native Americans,
and for all Americans, and I hope that it will receive swift approvals
so we can bring the litigation fully to an end. We look forward to
working with the Committee to move the necessary legislation forward,
and I look forward to your questions.
______
The Chairman. Thank you both for your testimony. I would
like to ask either one of you a question that I raised this
morning in our Committee Chair meeting and discussing this
hearing today, and the overall issue that we are addressing.
And there was consternation raised among the appropriators,
needless to say, because CBO has scored this settlement, and my
question to either or both of you really would be can you help
Congress identify funds that we can help pay for this
settlement?
Mr. Hayes. My understanding, Mr. Chairman, is that we are
having discussions in the Administration on that point. This is
an unusual case, in that the judgment fund is available for
this purpose
The CBO scoring is in--and I am not a budgeteer, I am happy
to report, and so I don't understand the vagueness of the
scoring process. Normally when you have a judgment fund
situation, you don't have this issue arise, but I can assure
you, Mr. Chairman, that we are having intense discussions with
the White House and with OMB, and we will be happy to get back
to you on that very shortly.
The Chairman. That would be most helpful, David. Let me
continue with you then, David, and ask you a question about the
$2 billion fund that expires at the end of 10 years, with any
remaining funds, of course, returning to the General Treasury.
Is that correct?
Mr. Hayes. Yes, Mr. Chairman.
The Chairman. What is the rationale for not depositing any
remaining funds into the education fund, which is also
established by the proposed settlement agreement?
Mr. Hayes. We anticipate, Mr. Chairman, that these funds
will all be spent by buying back fractionated interests. It is
our intent actually working close with once we get approval
here, working closely with the tribes, and prioritizing the
efforts to accelerate those buy backs.
We would like to have them--most of them occur in the early
years. We don't see this program going out 10 years at all. The
$2 billion, we think, is roughly sized to potentially buy back
most of the parcels that have 20 or more owners.
But when you get into a fractionated land tracts that have
anywhere from 5 to 20, all of a sudden, you are getting into
the likely costs of that buy back being well in excess of $2
billion. So what we see is this is going to make a huge dent in
the problem, but it is not going to resolve the problem.
The Chairman. Could you please explain why you think a
formula with an opt out clause is more appropriate than an
administration option with the resolution of the trust
administration claims?
Mr. Hayes. Let me defer to the lawyer here on that one if
you don't mind, Mr. Chairman.
The Chairman. Sure.
Mr. Perrelli. There was discussion earlier about a
streamline process for claimants, and I think we view the class
action mechanism as the streamline process to give individual
Native Americans funds recovery for potential trust
administration claims.
The opt out would put them in the exact same place that
they would be otherwise today with respect to those claims,
claims that to date that very few have been brought. I knew
that there was a question earlier about prior examples. There
are very few examples of these kinds of claims being brought.
So we think that this mechanism through the settlement that
we have created is that streamline means to offer some measure
of compensation to individuals. Otherwise, they can choose to
go to court as they can today.
The Chairman. Thank you. Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman. You heard the
testimony of the prior panel, and several Members, including
me, at least raised the issue of attorneys' fees. My question
to you is that we could not find it on the website, the
settlement, or the documents of that, and you responded that
there was an agreement.
We haven't seen it, and so would you provide that to us,
the documents specifically regarding the settlement as to
attorney fees, and how those were derived?
Mr. Perrelli. Yes, we will, and just for the record, it
indicates that the parties will litigate between $50- and $99.9
million for past attorneys' fees, and we are happy to provide
the documents.
Mr. Hastings. OK. Good. How soon can we expect that?
Mr. Perrelli. We can get it to you today.
Mr. Hastings. OK. That would be fine. The next question I
have is that you heard again the prior panel, and the prior
panel was suggesting that this is a big step forward.
But there just needs to be more transparency and
understanding of what this settlement agreement means to
everybody. Mr. Grijalva asked a question, I think, to Mr.
Nunez, is the issue transparency or unanimity, and I think the
response was both.
You are suggesting, OK, let us pass this, and then we will
have outreach. How do you reconcile the differences of opinion
on that?
Mr. Hayes. I think, Congressman, that is not quite the
dichotomy. We are engaged in outreach, and we will engage in
more outreach. I should say that at the Department of the
Interior that we have received enormous positive feedback about
this settlement from Indian Country.
No doubt there are some folks--and you had a couple here on
the panel who are not happy with the settlement, or who
question it. I firmly believe that you will not have unanimity
on anything like this.
We believe that there is enormous interest in Indian
Country in resolving this, and enormous credibility with the
Plaintiff class representatives. Elouise Cobell and her
representatives, and their attorneys, have enormous credibility
in Indian Country, because they know how hard they have worked
in this matter for the last 13 years.
I hope and think that we are fresh blood, in terms of the
Department of the Interior. We have not been involved in the
past, and we have come at this from a fresh look, and I think
we have some credibility.
We will continue to work, and I think your hearing here has
been very helpful, and thank you for holding it, in terms of
continuing to provide an opportunity for us to explain some of
this, and we will.
And we will be happy to do more outreach. I think the point
that Tom just mentioned is important though. There is a
judicial process here. The Judge has to approve--has a fairness
hearing basically, that will resolve a number of these
questions.
And then once if he says this is a fair and appropriate
settlement from a judicial perspective, then the class action
notice processes start, and we are very anxious to use every
mechanism available to make sure that everyone in Indian
Country who wants to understand this fully, fully understands
their rights, their opportunities, to opt out, to opt in,
whatever.
But we can't accelerate that until we continue through this
process and then we have the Judge approve the settlement in
the fairness hearing.
Mr. Perrelli. And if I can just clarify. What we will
happen is that once legislation is enacted, and the settlement
goes before the Judge, he will preliminarily approve, which
will then trigger all of the notice to individual class
members, and all of the outreach that is contemplated by the
agreement.
People will have the opportunity to file objections, raise
concerns, and then we anticipate a significant fairness hearing
some months down the road in front of him.
Mr. Hastings. Well, all of that is after the fact, and
Congress has the responsibility first. Now, I think that is
self-evident, although we have not seen any legislation. So we
don't know exactly what--I am presuming that it is the
settlement agreement.
But my point is simply is that this hearing was designed to
bring out differing views, and different observations on this
settlement agreement. I think everything that I have heard is
that this is a very, very big step forward.
It needs to be addressed, but it needs to be understood,
and I think the testimony was pretty clear that Indian Country
in general wants to know more about it before this legislation
is passed, and our responsibility as Members of Congress
obviously is to listen to the different views of our
constituents, because we represent you people.
I concede that you did a lot of work working on this. I am
not arguing with that at all, but there is--and there certainly
seems to be a little different approach, and that is why I was
asking, but what I am unfortunately hearing is, well, let us
pass this and we will take that next step.
And so I hope that I didn't quite hear it that way, but if
your outreach is aggressive, I am certain that we will hear
from Indian Country in general that this process has moved
forward.
Mr. Hayes. And thank you, Congressman, for those comments,
and I appreciate the chance to clarify once again. The day of
the settlement, we were on a conference call with scores of
tribal leaders around the country explaining the settlement.
We have tribes visiting our Department as you well know as
they visit your offices on The Hill week in and week out. We
have been doing extensive discussions with many, many tribes.
Just last week, both Hilary Tompkins and Tom Perrelli spent
a couple of hours in front of a panel with the National
Congress on American Indians, responding to all comers, all
questions, about this settlement.
There are important meetings next week that have already
been alluded to. We will continue to do that. We appreciate the
fact that it is very important now to answer these questions,
and we thank you for this opportunity to hear the issues that
we heard today, and to respond to them, and to have the
opportunity for a dialogue with this important Committee on the
subject.
Mr. Hastings. OK. I would just conclude that I appreciate
that, and I encourage you to continue your outreach. I suspect
since we have the responsibility here to pass this legislation,
that we will hear back from Indian Country as to the success of
that outreach, and I think that is probably a fair way to do
it. Thank you.
Mr. Faleomavaega. [Presiding]. Thank you for your
testimonies, Secretary Hayes, and also our Deputy Attorney
General, and Ms. Tompkins. Welcome. It is a real pleasure and
certainly I am sure that throughout Indian Country the
tremendous pride that we finally appointed out first Solicitor
General who is of Native American ancestry.
I believe that you are a member of the Navajo Nation?
Ms. Tompkins. Yes. A proud member of the Navajo Nation,
yes.
Mr. Faleomavaega. 250 thousand strong. That is pretty good.
Secretary Hayes, you mentioned in your testimony that you had a
copy of a draft bill that the Administration is proposing? Did
I read that correctly in your testimony?
Has the Administration developed a proposed bill relating
to this issue of this settlement?
Mr. Hayes. Yes, the Administration has, and the President
sent it up to the leadership a week or two ago.
Mr. Faleomavaega. So we have it here among the Members?
Mr. Hayes. As far as I know.
Mr. Faleomavaega. I think Mr. Hastings says that he has not
received a copy. Certainly I have not received a copy.
Mr. Hayes. Well, we will resolve that, Congressman
Hastings. We will get it to you.
Mr. Faleomavaega. Yes, I think that would be a tremendous
help. How many were involved in these negotiations? And I can
understand that you must have gone through some grueling days,
and weeks, and months, in finally reaching a settlement in
December.
But I am just curious. How many were involved in these
negotiations? Was it just between Ms. Cobell and her attorneys,
and the officials of the Department of the Interior?
Mr. Perrelli. There were Ms. Cobell, and her attorneys, and
there were attorneys, consultants, as well as maybe up to 10 or
11 folks from the Departments of the Interior and the
Department of Justice. We filled a big conference table, or
two, and more.
Mr. Faleomavaega. So primarily it was just Ms. Cobell and
her attorneys, Plaintiffs attorneys, and officials from both
the Department of Justice and the Department of the Interior;
is that correct?
Mr. Perrelli. That is correct.
Mr. Faleomavaega. OK.
Mr. Hayes. And, of course, their attorneys represent the
class. They have been certified. The class has been certified.
So that they are the appropriate and official representative of
the hundreds of thousands of individual Indians who hold
accounts.
So we thought it appropriate since we have been negotiating
with them since they brought the litigation as a class.
Mr. Faleomavaega. How did you arrive at the $3.4 billion as
the price settlement for this class action suit? I believe it
is $1.4 billion for the class members, and was it $2-some-
billion for another portion of this? How did you arrive at this
figure?
Mr. Perrelli. And I will let Mr. Hayes talk about the $2
billion.
Mr. Faleomavaega. The reason why I raise this issue is that
this is one of the most contentious issues. Over the years, as
I can remember, not only was there tremendous disagreements
among the members or in the Congress, both House, and even
within the Administration.
In fact, we even I think appropriated over $10 million
through an auditing company or a firm to find out exactly what
was involved in the accounting, and even they could not come
out with it after spending over $10 million to provide some
kind of an accounting. But I am just curious. How did you
arrive at this?
Mr. Perrelli. With respect to the $1.4 billion, it was in
negotiations, and so certainly a negotiated amount. As we
looked at it, we looked at quantifications of the case made
over time.
The Court had previously suggested a number, approximately
450 million for the accounting portion of the case. The
Plaintiffs at different times had argued for significantly more
money.
We also looked and made our best estimate to look at the
entire range of accounts and potential mismanagement claims. We
had the benefit of looking at settlements in the tribal trust
area, which gave us some information about the potential size
of these claims, and we did our best to come up with a
reasonable settlement amount, but it was certainly a
negotiation.
Mr. Faleomavaega. Well, what happened through all these
years with the--well, in terms of--well, you are supposed to
have some kind of a computer type accounting system. That was
not done properly, I suppose.
But I am just curious. In terms of the numbers, this is
what was agreed upon? Because it seems to be a lot higher that
in my humble opinion over the years on the numbers that were
being thrown around. But $3.5 billion is somewhat a little low
in my opinion. Secretary Hayes.
Mr. Hayes. Yes, if I can just make a couple of
observations.
Mr. Faleomavaega. Please.
Mr. Hayes. I think that through the years of this
litigation that this Congress has supported extensive work in
terms of accounting work at the Department of the Interior
through the Office of the Special Trustee, and the Office of
Historical Accounting, that has provided enormous information,
and provided the basis for good discussion about the status of
these accounts.
So it is not as though these years of litigation have been
for naught. There has been much more information developed over
the years. I think that has been very helpful.
I will say that this was a very tough negotiation. The same
Plaintiffs' lawyers who have been appropriately aggressive from
day one, were appropriately aggressive in our negotiations.
And I am somewhat offended by the suggestion that there was
some collusion here between the United States and the
Plaintiffs, particularly when to your point the settlement
amount is significantly less frankly than this Congress has had
before it, and that prior Administrations have looked at for
settlements.
I view that as a sign of good, hard and appropriate
negotiating on both sides, and I think the settlement is fair
and the Plaintiffs do as well, but I encourage you to ask the
same question of the Plaintiffs' counsel.
Mr. Faleomavaega. I just have one more question to Ms.
Tompkins. As you have heard previously from Professor Monette,
in terms of the legal process, and whatever the legal
justifications, does this mean that once this settlement is
done with, with Congressional legislation to put the seal on
it, that there could be no more class action suits concerning
this matter.
Ms. Tompkins. If this settlement is approved by Congress,
and ultimately by the Court, it will resolve the claims that
are released in this settlement agreement. So it will resolve
past claims for historical accounting, past claims for
mismanagement of funds and assets.
So those will be resolved, but moving forward, potential
new claims could arise in the future, and that will always be
the case. So, those types of future claims would not be
affected by this settlement agreement.
Mr. Faleomavaega. My time is up. The gentlelady from
Wyoming.
Mrs. Lummis. Thank you, Mr. Chairman, and I would just
comment that I had a law school professor named Joel Selig, who
was Department of Justice, Jimmy Carter era, trained, and was
an expert in class action lawsuits.
No University of Wyoming Law School graduate should have as
much class action lawsuit experience as we did, but it was all
because of Joel Selig. So I highly recommend his particular
expertise in implementing Rule 23 litigation, and I want to ask
a couple of questions.
Deputy Secretary Hayes, could you describe a little bit
more what arm's-length interaction your Department had with
those folks whose claims will be extinguished?
Mr. Hayes. Well, our negotiations were with the class
representatives, and with their lawyers. They started last
summer, early in the summer, and we had intense discussions
throughout the summer and into the fall, leading to this
settlement.
Now, I welcome you to ask the next panel, and Elouise
Cobell, in terms of how they communicated with the class. As
you well know from your training at the University of Wyoming
Law School, one of the advantages of a class action is that a
court has sanctioned a class, and class representatives, and
counsel for the class, to speak on behalf of the class and, of
course, they have done that eloquently for the last 13 years,
and those are the folks that we dealt with.
Mrs. Lummis. I would like to follow up. You stated that the
settlement addresses all existing and potential trust related
claims that the Plaintiffs may have against the United States
to date.
What kinds of yet to be litigated claims are being settled,
and will it be clearer to Plaintiffs in accepting the
settlement that they are extinguishing yet to be litigated
claims?
Mr. Hayes. Well, I appreciate you raising that. That may be
a misstatement in my testimony. I mean, we are not resolving
claims for future--that start tomorrow, or the day after the
settlement.
Mrs. Lummis. OK.
Mr. Hayes. In fact, that is why the Secretary has entered
an order that would become effective at the time of settlement
at the request of the Plaintiffs. So that we make sure that
going forward that we learn the lessons that we have learned
over the last 13 years, and take a fresh look, and make sure
that we don't make these mistakes again.
And that is also why we are excited about the land
consolidation program, because it will minimize both the
expense of these individual actions, but also the opportunities
for mistake, and at the same time, it puts money in the pocket
of individual Indians.
Mrs. Lummis. OK. Good to know. Thank you very much. In
visiting with the tribes in Wyoming, they gave me two primary
messages. One was that there is an absolute need to settle this
matter, and I am so pleased that this hearing is being held,
because some settlement proposal has come to fruition.
And also that many individuals throughout Indian Country
have questions about the terms and the precedence setting
impacts of this. What kinds of steps does the Department plan
to take to educate tribal members on the full scope of the
settlement?
Mr. Hayes. Congresswoman, we described a little bit before
what we have done to date, in terms of our initial outreach to
the tribes as a group with the Secretary, and with the outreach
through the National Congress on American Indians, and through
our individual tribal outreach.
We had a Senate hearing before the turn of the year, and we
have this hearing. But I take seriously the points of
Congressman Hastings, and others here. We will redouble our
efforts right now to make sure that there is good information
out there about this settlement.
This hearing has demonstrated that there is confusion in
some quarters, and some misinformation, and that does no one
any good. We are confident that this is an excellent
settlement, and we will make ourselves available, and
aggressively put ourselves out there to communicate that as
forcefully and as frequently as we can.
Mrs. Lummis. Thank you, and would the Chairman indulge one
more question, Mr. Chairman?
Mr. Faleomavaega. Sure. Go ahead.
Mrs. Lummis. Thank you. Mr. Perrelli, one specific question
that was asked by a tribal leader in my State was whether or
not individual payments under the settlement would be taxable.
And also whether it would affect formulas for other Federal
payments, such as TANF? Can you respond to that?
Mr. Perrelli. And I think the settlement itself doesn't
change the rules that would otherwise apply to those payments.
So I think that there are--and I will get myself out of my
depth quickly if I get too far into tax issues, and this may be
the kind of thing that a written follow-up to you may be
helpful in talking about the general rules that would apply.
Mrs. Lummis. That would be great, and the tribes in Wyoming
would really appreciate it, and I will be sure to pass it on.
Thank you, Mr. Chairman.
Mr. Faleomavaega. The gentleman from New Mexico.
Mr. Heinrich. Thank you, Mr. Chairman. First, welcome to
all of you. I had an opportunity to work with Solicitor
Tompkins when we were both working for the State of New Mexico,
and have nothing but high regard for her legal mind.
And I want to sort of direct my first question to both Mr.
Hayes and Mr. Perrelli. From the point of view of your two
agencies--and I don't want to sidetrack us too much, but I want
to ask about the tribal trust lawsuits that are also currently
pending in the Federal Courts.
And they are based on many of the same problems that are
inherent in the Cobell case. These are with tribes as
plaintiffs rather than individuals, and I just want to ask from
both of you what are you and your agencies doing to make sure
that those cases are also receiving the same sort of high level
of attention and potential for resolve that this case has seen?
Mr. Hayes. I thank you for your question, Congressman, and
this is a very important point. There are nearly a hundred
lawsuits that individual tribes have brought in terms of
management of their tribal trust assets.
A few have settled. We have been in discussions with the
Justice Department about how--pivoting off of this settlement
with a class of individual Indian account holders--we can get
many, many more of those tribal cases into a settlement mode.
That will be our sole attention once we resolve this
matter. We are looking at budgeting adequate amounts of budget,
and working with the Congress to ensure that we have the
support needed to do the fact finding, et cetera, that will
enable these tribal cases to be settled.
And we have had some preliminary discussions with the
Justice Department about some process thoughts to help
facilitate a fast tracking of the settlement process, and I
defer to Mr. Perrelli for supplementing that.
Mr. Perrelli. I have two things. I will first clarify what
I just said, because the settlement does not deal with the tax
issues. The legislation that we proposed does deal with the tax
and benefit issues.
I am sorry that the Congressman had to leave before I could
clarify that, but when we send up a copy of the legislation,
there is a specific provision on the tax and benefits
implication that I think will be helpful to tribal leaders to
understand that.
With respect to the tribal trust cases, they are really the
next step in this path in trying to bring resolution to all of
these claims. The Solicitor and I recently sent a letter to
some of the leaders of the groups that are representing
significant numbers of the tribes, and inviting them to a
settlement negotiation in which we would participate
personally.
And we envision having that schedule in short order, and
hopefully beginning a process that will allow us to move
forward in those cases as we have here.
Mr. Heinrich. I appreciate both of your responses on that.
I know that there are at least five cases in New Mexico, with
the Arapaho Nation, the Hickory, and Mescalero and Apache
Tribes, and the Pueblos of Zia and Laguna that are all involved
in related litigation.
The last thing that I would just do is for Ms. Tompkins. I
wanted to give you the opportunity if you wanted to address the
matter that Professor Monette brought up at the beginning,
where he seemed to characterize your view on an issue, and I
wanted to give you an opportunity to characterize your own view
on that.
Ms. Tompkins. Thank you, Congressman Heinrich. Sure. I
guess my only comment on that was the question that we
discussed last night was really--it just reminded me of law
school and one of those convoluted, arcane questions that you
would get when a professor was throwing you with easing the
Socratic method.
But I did look at the issue, and it is not an issue that
raises any concern in the settlement agreement. It is about
some very technical language in the definition part of the
settlement.
But it is not a problem. It basically includes the words
lands and assets in the accounting definition, because that is
an outgrowth of the litigation. There was a time in the
litigation when the parties were debating whether or not asset
statements, descriptions of the land, the underlying land,
should be in the accounting statements. And so that is just to
ensure that we are addressing that issue in that definition.
Thank you.
Mr. Heinrich. Thank you, and Mr. Chairman, I yield back the
rest of my time.
Mr. Faleomavaega. Thank you. I would like to turn the time
over to our Ranking Member for further questions.
Mr. Hastings. Thank you very much, Mr. Chairman. I don't
have any other questions, but it is more of a request, because
you said, and properly so, that this hearing has been very
good.
Generally, hearings engender more questions in the future.
Surprise. Surprise. You were very kind to me in responding to
the questions in a two week time period on the letter that I
sent you.
What I would ask you is that questions that are given to
you after this meeting, if you would respond in a like time, a
two week period, because there was a very tight time period on
that, and as quickly that we can get these questions--our
answers back for these questions, that would be helpful.
So if you could set a goal of responding to whatever
followup questions, that that response would be within a two
week period.
Mr. Hayes. Absolutely, Congressman.
Mr. Hastings. Great. Great. Thank you very much. Thank you,
Mr. Chairman.
Mr. Faleomavaega. Well, I have just one followup question
to the question from the gentleman from New Mexico. I just
wanted to get it straight and for the record that there are
tribes who have already filed lawsuits in the same case matter
that we are talking about.
Are you suggesting that we are going to do something to
disallow them from pursuing their efforts in filing a lawsuit
in that same case matter?
Mr. Perrelli. No, not at all. Not at all, Congressman, and
I apologize for any confusion in that regard. There are
approximately 99 current lawsuits filed by tribes that are not
affected by this settlement, and this settlement doesn't
preclude tribes and tribal governments from filing any action.
Mr. Faleomavaega. All right. Well, thank you very much. I
believe we have one more panel here, our third one, and this is
Ms. Elouise Cobell, and I believe she probably has a couple of
attorneys that will be attending here. We would welcome her to
testify now, and for the record, please introduce the attorney
that is here with you.
STATEMENT OF ELOUISE C. COBELL, LEAD PLAINTIFF IN COBELL V.
SALAZAR, BROWNING, MONTANA; ACCOMPANIED BY MR. WILLIAM E.
DORRIS, MANAGING PARTNER, KILPATRICK STOCKTON LLP, WASHINGTON,
D.C.
Ms. Cobell. Yes, I will, and with me today is Bill Dorris,
one of the Plaintiffs' attorneys, and he will be joining me for
any comments or questions, and I think it is very important to
tell this Committee that I didn't bring this case on behalf of
tribes.
I brought this case on behalf of over 500 thousand
individual Indians, and many who I know, and many who have
suffered from the mismanagement of the Indian trust funds, and
it is the largest class action lawsuit.
I was a little taken back by the word transparency. This
has been going on for 14 years, and we have posted constantly,
and newspapers have covered it, and over, and over about what
has happened in this court case.
And I think that there is much more consensus, as Secretary
Hayes has stated, in individual Indians knowing about this
case. I flew in late last night from South Dakota, where I have
been visiting and swiping my own personal credit card, but
visiting tribes and individual Indians at tribal locations.
And I was overjoyed because sometimes you feel that there
are a lot of Monday night quarterbacks, and you are right down
to the bottom, and getting ready to make a touchdown, and then
everybody starts yelling and screaming that you did this wrong,
and you did that wrong.
Well, it was overwhelming to me to get out to Indian
Country and to individual Indians, and not that I haven't been
out to Indian Country before, because I have traveled extensive
in Indian Country updating individual Indians on this case.
But I was extremely rewarded by just looking at the people
that we represented, and the thank you's, and the appreciation
that was extended by elderly people, young people.
And I think where the real confusion really existed was
with the tribes. The tribal council members would get up and
talk about, oh, you are going to extinguish your rights in the
Black Hills, and it was constantly correcting misinformation
that existed out there.
That was one of the reasons that I actually started going
out to Indian Country immediately before Congress approved this
settlement because of the misinformation, and it was important
for individual Indians to hear the facts, and as they learned
the facts, you cannot believe the amount of like personal notes
that were written.
And, yes, we want to move forward. We feel that this is a
stepping stone. We understand that this is not the end all to
all the problems that exist in Indian Country. This is
something that has been accomplished, and we feel good about
this victory. We feel very good about this victory.
I was very impressed by a young man in Pine Ridge, who got
up and who had been reading since a young man at the beginning
of this case, and informed all his family members constantly
about what this case meant, and what it meant for all
individual Indians.
Very bright, and it just overwhelmingly gave me the
satisfaction of the young people that have been affected by
this case, and that, yes, they do have rights, and they do have
a voice.
And that a lot of times what I heard over the last couple
of days is that tribal councils do not represent them, and they
wanted me to make sure that I understood that, because
sometimes they felt that they couldn't trust tribal councils.
So they wanted me to understand that, and they told me over
and over, and as we continued to travel South Dakota, and were
visiting every single reservation in South Dakota, it has been
overwhelming.
There is almost no opposition to this settlement as far as
individual Indians. I think where we really ran into problems
is just the total misinformation, and that is why we were out
there.
I just would like to say that I was deeply hurt by the
collusion that the Professor alleged, and I want to tell you
that these negotiations were tough. They were hard, and I think
that I did the best job that I could, along with my class
counsel, to negotiate a settlement.
I felt that we were owed much more money, but this could go
on for hundreds of years, and people are dying. Individual
Indians that are owed this money are dying every single day,
and we had to reach a time that we put the past before us, and
get some money out to individual Indians that are owed.
And so the driving force--and I really would like to thank
Attorney General Tom Perrelli, and Deputy Secretary Hayes, and
Solicitor Hilary Tompkins, because at times I wanted to walk
out of the meetings. I said, no, that we are not accepting
this.
And once of the issues that I thought was very, very
important is for the future. What about the future of our young
people, and worked very hard for a scholarship fund, and that
it be dedicated to educating our young people so that we never
have to go through this again.
We should never have to go through this abuse that the U.S.
Government has done to individual Indians, and I just don't
want that to happen, and I want every individual young person
to be educated so we don't have to.
You don't know when I was walking over, and you don't know
how many times I have testified before the Senate Committee,
this Committee. It has been numerous. I started with Mike
Synar, who the Chairman recognized, and he was totally
incredible.
He was a person that started it, but probably 20 some
times--and sometimes it just gets so tiring, because you come
back again, and it is the same thing, and tribes say more
consultation, and more of this, and more of that.
Well, for 14 years, I sat in that courtroom and there was
not too many tribal people that sat there. But we always had
great input. My tribe was always behind this. They sent letters
that said that we are behind this 100 percent.
So I really wanted to address the situation on the
outreach, because this outreach has been going on. You know,
should we have gotten more than $3.4 billion? I would have
liked to have gotten more than $3.4 billion.
Like the Chairman, I wanted $280 billion at one point in
time, but what is reasonable. What is reasonable during this
time before so many people pass away and die, and die of
poverty.
I just came from Pine Ridge. I just came from Rose Bud, and
things are tough. Things are tough in those situations. You
can't believe the roads that I traveled. They don't even have
paved roads.
So I just want to continue to address that. The other thing
that I did on my own just trying to get information out because
of the misinformation. You know, oh, the treaties are being
violated. Oh, this is going to happen. Oh, there are going to
be no future claims.
So I just began issuing Ask Elouise letters. Why don't you
ask us. We know. Don't go to your tribal chairmen that have
already said they don't know anything about it. Ask us.
So I started submitting, and this is the fourth Ask Elouise
letter, and what we do is we collect questions from all the IAM
account holders, and they give us questions, and we address
them, constantly address them.
And so it is a good way of getting out and really working
with people. I guess I want to talk a little bit about the
fifteen-hundred dollars, and the accounting portion you all
know sitting up here, and everybody has talked about it.
You have allocated hundreds of millions of dollars for an
accounting, and there just can't be an accounting. There are
too many missing documents. The documents are gone. So you
can't do an accounting. So we had to settle on that.
And we were asking for $48 billion. The Court came back and
said, no, I think I will give you $455 million, and then the
Appellate Court said, well, go back to District Court, and
said, oh, the government can do any type of an accounting that
they want.
They can do an accounting for the low hanging fruit and for
accounts that have a hundred-thousand or more in them. So it
wasn't a legal accounting, and you can take as long as you
want. So we could have been looking at another hundred years
for an accounting.
And so those are the reasons that we settled, and those are
the reasons that we fought on the table with the Department of
Justice and the Department of the Interior to making sure that
we got the best settlement.
It was very important to us to have people understand that
this would not be taxable. Many of the people that are going to
be receiving this money are poor. They are poor. Entitlement
programs are very important to them, and the majority of people
are on SSI, on TANF, on food stamps, and we wanted to ensure
that those were not disrupted.
And so in this settlement agreement, we will not be held
victims to having those go away. I guess maybe the other areas
that I wanted to talk about is the trust mismanagement claims.
The government wanted that. The government wanted it, and
we sat and talked about them. We actually did a study of how
many claims had been filed on land mismanagement by individual
Indians. There wasn't that many.
And the reason there isn't that many is because people
don't have the money to sue, and that is why I sued the
government on behalf of the 500 thousand individual Indians,
and not one tribe gave one penny for this litigation. Let me
ensure that item to you.
I went out and raised money so that we could have justice,
and so I know how difficult it is, and so I know that
individuals that want to resolve these trust mismanagement
claims that they have the option to. They can opt out.
And I think that has been discussed several times over and
over that there is going to be a fairness hearing. Everybody
that doesn't like what is happening, then go to the fairness
hearing. Be heard, and the Judge will determine.
The Judge played an active role in this. When he called the
parties together, he said that you can litigate forever. I
don't see any judicial solution, because he knew that we had
been in court for 14 years, and we could be in court for
another 20 years.
And we don't want to go to the Supreme Court. I mean, that
option is open for us, and many of you asked why is there a
sense of urgency. There is a sense of urgency because we have
timelines, and I know Bill Dorris will discuss that with you,
where we lose out on our option to go to the Supreme Court, but
that is our next option, is to go to the Supreme Court.
You can do the right thing here. You can act and act
quickly, and get this approved so that we can get money to
individual Indians that have been abused for so many years. Let
us move on. Let us get this behind us, and let us move on, and
I urge this Congress to take me seriously.
It has been difficult. It has been a difficult 14 years,
and I thought that the hard part was over when we had a legal
settlement between the Plaintiffs and the Defendants.
I thought that all we had to do was come up and talk to
Congress, because they had so many hearings that they knew
about this, and it is almost like Congress sometimes acts
oblivious to all the issues that we have talked about, and I am
not criticizing, because I need your support to approve this.
[Laughter.]
Ms. Cobell. But I would like to stop there, and just take
any questions.
[The prepared statement of Ms. Cobell follows:]
Statement of Elouise P. Cobell, Lead Plaintiff in Cobell V. Salazar
I. INTRODUCTION
Good afternoon, and thank you Chairman Rahall, Ranking Member
Hastings, and members of the Committee. I am here today representing a
class of over 500,000 individual Indians as the lead plaintiff in the
case initially entitled Cobell v. Babbitt and now referred to as Cobell
v. Salazar, pending in the United States District Court for the
District of Columbia and presently presided over by Judge James
Robertson. Since virtually its inception more than 13 years ago,
Congress has taken keen interest in this litigation and its key
objectives--reforming the Individual Indian Trust (``Trust''), ensuring
that the government accounts for all Trust assets including all trust
funds, land and natural resources, and correcting and restating each
individual's account balance.
By any measure, this litigation has proven exceptional and
extraordinary. Not only is it one of the largest class actions ever
brought against the United States as it addresses over 120 years of
mismanagement of Indian trust assets and involves over 500,000
individual Indians, but the litigation has been intense and
contentious. Moreover, there have been more than 3600 docket entries in
the district court and over 80 published decisions, including ten
appeals--the most recent appellate opinion is referred to as Cobell
XXII.
On each occasion I have appeared before Congress, I have emphasized
my willingness to explore settlement of this case. But of course,
resolution takes two parties willing to come to the table to negotiate
in good faith and attempt to reach an equitable settlement that would
set the foundation for improved trust management and accountability in
the future. Until very recently, however, we did not have such a
willing partner on the other side. President Obama showed great
leadership during the campaign when he committed to seek a fair
resolution to this case and, when elected, he followed through and
charged Secretary Salazar and Attorney General Holder with carrying out
this commitment.
Having been through seven failed settlement efforts before, I was
not optimistic at the outset of these negotiations that we would be
able to reach agreement. Beginning in the late summer of 2009, though,
we sat down in good faith and so did the Administration. Associate
Attorney General Tom Perrelli, Interior Deputy Secretary David Hayes,
and Interior Solicitor Hillary Tompkins were involved in the day-to-day
negotiations. The issues to discuss and resolve were gravely
challenging, and I repeatedly felt we had reached impasse. But both my
team and the government soldiered on, knowing that resolution was the
best thing for the affected individual Indian trust beneficiaries and
for a healthier foundation of the trust relationship for the future.
Reaching agreement was certainly not easy, and the settlement from
my perspective is not perfect. I would want more for beneficiaries as I
think that is what they deserve. But a settlement requires compromise--
by definition, you do not get everything you want. This is the bottom
line: After months of discussion, I am here to testify that I strongly
support this agreement. It is time to look forward, not backward. And
though we must never forget the past, this settlement can move us
forward together as it represents the best resolution we can hope for
under the circumstances.
Although we have reached an historical settlement totaling more
than $3.4 billion, there is little doubt this is far less than the full
amount to which individual Indians are entitled. Yes, we could prolong
our struggle, fight longer, and, perhaps one day, reach a judgment in
the courts that results in a greater benefit to individual Indians. But
we are nevertheless compelled to settle now by the sobering reality
that members of our class die each year, each month, and every day,
forever prevented from receiving that which is theirs. We also face the
uncomfortable, but unavoidable fact that a large number of individual
Indian trust beneficiaries are among the most vulnerable people in this
country, existing in the direst of poverty. This settlement can begin
to provide hope and a much needed measure of justice.
In addition, now that the Cobell case has brought heightened
attention to this matter, I am optimistic that this settlement will lay
the foundation for genuine and meaningful reform of the Trust. There
remains considerable room for improvement, as Secretary Salazar and
Deputy Secretary Hayes have recognized. I am hopeful that the
Commission that Secretary Salazar has contemporaneously announced with
this settlement will ensure that additional critical reforms are made
and that we set the underpinning for safe and sound management of our
assets in the future.
The terms of the settlement have been well publicized. We have
reached out to Indian Country to insure that beneficiaries are well
informed of its terms. I just returned from meeting with beneficiaries
in South Dakota, and our class counsel, as we speak, is traveling to
meet with beneficiaries in other states. We have met with allottee
associations, tribal organizations and landowners and will continue our
efforts. Next week, our class counsel will visit Arizona and New
Mexico, the following week Montana, Wyoming and North Dakota and the
weeks after that Oklahoma, Washington, California and Oregon. Further
meetings with beneficiaries will continue throughout Indian Country in
March and April to make sure that they are able to receive complete and
accurate information about the settlement.
Despite this outreach, there remains misinformation regarding the
settlement conveyed by a very small number of individuals, many of whom
are not beneficiaries and do not speak for individual Indian
beneficiaries. I want to dispel those misunderstandings:
First, there are those who have stated that under this agreement
beneficiaries will receive very little. This is not accurate. In fact,
most beneficiaries who participate in this settlement will receive at
least--and I emphasize at least--$1,500.00. Many will receive
substantially more based on the transactional activity in their IIM
account. To those in Indian Country, receipt of this money is critical,
both as a recognition of the government's past wrongdoing and as a
first step in fulfilling the commitment to reforming the trust system.
Many individual Indians are dependent on this money for the basic
necessities of life. Its payment should not be further delayed.
Two other points are important with respect to these distributions.
First, receipt of these funds shall not be construed as income and thus
will not be taxable for beneficiaries. This is only fair because
proceeds from trust lands are generally not taxable. Second, and
critically important to the poorest among the class, the Cobell
settlement funds shall not be considered when determining eligibility
for programs such as TANF, SSI and food stamps. The last thing the
parties want is to further victimize poorer class members by preventing
them from receiving benefits from programs for which they would
otherwise be eligible.
Second, there are suggestions that the settlement should not have
encompassed claims for trust administration since it is contended the
Cobell case did not involve mismanagement of trust assets. This is not
correct. The Cobell case has always insisted that the government
account for all trust assets--not just money but the land and natural
resources that are at the heart of the individual Indian trust. And,
the district court invited plaintiffs to amend our complaint to include
these claims in the litigation well before these settlement
negotiations. In other words, their inclusion should be no surprise.
Indeed, while true that there are certain trust damages claims that are
now expressly included that were not before, understand that virtually
all settlement discussions--including those led by this Committee and
the Senate Indian Affairs Committee--have contemplated the inclusion of
all such individual claims. The largest and oldest tribal organization,
the National Congress of American Indians passed unanimously a
resolution in 2006 endorsing inclusion of all trust management claims
if, where as here, there is an opt out.
I and others were also counseled on this point by the following
sober reality: Very few trust mismanagement cases have ever been filed
and those that have are very expensive, extremely time consuming and
fraught with risk. There is an obvious reason for this. For most
beneficiaries, the claims are relatively modest when compared with the
cost of litigating against the government and the legal obstacles in
doing so. Legal hindrances abound, such as statute of limitations and
jurisdictional restrictions, and together with the cost prohibitive
nature of litigation, help explain why so few have been brought. For
the great majority of beneficiaries, this settlement represents the
only opportunity for them to receive any compensation for the
government's mismanagement of their trust assets. For those who wish to
pursue those claims independently, they have the opportunity to do so
by opting out of the trust administration portion of the settlement.
The agreement preserves all legal mechanisms to enable them to do so.
Third, there are those who criticize the amount that the class
attorneys may receive by reason of this settlement. That criticism is
misplaced. This is not a case where attorneys are attempting to get a
fee based on a quick settlement. The attorneys in this case undertook
substantial risk in filing and prosecuting this case on behalf of the
500,000 individual Indian beneficiaries in 1996. Many of the attorneys
gave up their practices to work solely on it. It has often consumed 18
hour days, seven days a week. They have engaged in 7 major trials,
handled countless appeals by the government and reviewed tens of
millions of pages of documents. They responded when no on else--not
even Congress--was able to correct the wrongdoing that individual
Indians endured. As a result of their efforts, for the first time in
over 100 years, the government has been held accountable for its
mismanagement of the IIM Trust. Moreover, solely as a result of their
efforts, reform of the Trust is a real possibility. The benefit to
class members from their efforts is considerable. They have agreed to
limit their petition for fees to under $100 million. This is less than
3% of the total settlement--very modest when compared with fees
typically awarded in class actions. Class members will have the
opportunity to object to the fees and those objections will be
considered by the Court before any fee award. The attempt by some such
as ITMA to limit the fees further to those available under the Equal
Access to Justice Act (EAJA) suffers from two infirmities. First, the
government has made clear that it is not open to paying fees through
EAJA. Second, if in the end, lawyer fees are so dramatically curtailed,
then how will individual Indians ever obtain the kind of highly
competent and dedicated counsel necessary to bring a difficult case
like this next time? It is already tragically difficult to attract such
lawyers and ITMA would like to make it all the more challenging. This
makes no sense.
Fourth, there are those that have even suggested that the named
plaintiffs in this case, including me, will profit from this
settlement. This again is erroneous. The incentive fee contemplated is
an award to named plaintiffs by the Court for their work in assisting
in this case and to cover expenses. As you might expect, the work
required has been considerable. However, most of the money requested
will be for reimbursement of expenses incurred during the 14 years of
this litigation. Millions of dollars have been spent in prosecuting
this case, including payment of experts, and covering charges for
transcripts and other court costs. I have contributed substantial funds
to aid in the prosecution of this case. The Blackfeet Reservation
Development Fund, a non profit, has used millions of its own funds as
well. Furthermore, many of the grants we received are in the form of
loans and are repayable. Importantly, any class members not comfortable
with the incentive award will have a opportunity to have their views
heard by the Court before any payment is made. However, those who have
advanced the money to prosecute this case deserve to be reimbursed.
Finally, some who don't understand the reality of the historical
data and the lack of reliable information, have criticized the
distribution scheme contemplated in this settlement. They say it
doesn't track with precision the losses for each beneficiary. The
reality is that there is no data to establish actual losses. This is
indeed rough justice. But it is the best possible way to achieve three
important objectives: (1) being fair so that all receive a meaningful
payment of at least $1,500, while rewarding high dollar accounts that
likely suffered the most losses; (2) permitting for a prompt
distribution where most beneficiaries will be completely paid within a
few months; and (3) will not waste significant money on lawyers,
accountants and Special Masters trying to figure out what is owed to
each individual. In addition, the Court will hear any objections to the
distribution scheme and make a determination on its fairness.
Some have asked to establish an extensive and expensive process
where beneficiaries can have essentially mini-trials before a Special
Master. This is absolutely and unequivocally foolish. It would waste
significant funds on figuring out who gets what and will take years
before beneficiaries receive their distributions. Moreover, it will not
be advantageous to those beneficiaries who can prove their case since
such beneficiaries have the ability to opt out anyway and pursue their
claims independently. In short, such a proposal would take years, cost
hundreds of millions and be no fairer than the current model. This is
precisely why the parties rejected such an approach.
In summary, this settlement will do a lot of good. It will get more
than $3 billion in the hands of beneficiaries. It will provide monies
for land consolidation. It will create a $60 million scholarship fund.
Moreover, there will be a Secretarial Commission to recommend
additional trust reforms that are desperately needed. And there is an
agreement to perform an audit of the Trust. No audit has ever been
done. To heal the division between individual Indian trust
beneficiaries and the government that is reflected historically and in
the nearly 14 years of our litigation and to begin to establish
confidence that the IIM Trust is managed in accordance with trust law,
transparency is essential. Too many records have been destroyed. Too
much deception has occurred. Importantly, this settlement will allow
individual Indians to look forward and work collaboratively with their
trustee to ensure a better tomorrow.
We know this settlement does not solve many of the serious
underlying problems plaguing this Trust. We know that reform must
continue and cannot stop here. We will continue our efforts to ensure
accountability. We have had to spend too much time looking backwards,
trying to address the terrible wrongs of the past. Now, my hope is that
we look forward to correct those wrongs so that individual Indian trust
beneficiaries finally receive that which rightfully is theirs.
When I embarked on this settlement process, I was skeptical that
this result could be achieved. But we were able to reach a resolution.
There has been too much discussion about what we would like to achieve
for individual Indian beneficiaries. It is now important that we
implement this historical settlement. I now ask Congress to swiftly
enact the necessary implementing legislation so we can begin to
distribute our trust funds without further delay. Hundreds of thousands
of individual Indians have waited patiently for far too long.
______
NOTE: The 57-page ``Class Action Settlement Agreement'' dated December
7, 2009, has been retained in the Committee's official files.
It can be found at the following website:
www.doi.gov/documents/ClassActionSettlementCobellvSalazar.pdf
[The ``Agreement on Attorneys' Fees, Expenses, and Costs''
submitted for the record follows:]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
ELOUISE PEPION COBELL, et al. Plaintiffs,
vs.
KEN SALAZAR, Secretary of the Interior, et al, Defendants.
Case No. l:96CV01285-JR
Agreement on Attorneys' Fees, Expenses, and Costs
December 7, 2009
_______________________________________________________________________
WHEREAS the Parties entered the Class Action Settlement Agreement,
dated December 7, 2009 (``Main Cobell Agreement''); and
WHEREAS the Parties desire that the Class should compensate Class
Counsel for reasonable attorney fees and related expenses and costs;
THEREFORE, the Parties hereby enter this Agreement on Attorneys'
Fees, Expenses, and Costs (``Fee Agreement'').
1. Unless otherwise defined herein, this Fee Agreement incorporates
all defined terms in the Main Cobell Agreement and shall be interpreted
in a manner consistent with the Main Cobell Agreement.
2. The amount of attorneys' fees, expenses and costs shall be
decided by the Court in accordance with controlling law and awarded
from the Accounting/Trust Administration Fund.
3. The Parties agree that litigation over attorneys' fees,
expenses, and costs should be conducted with a civility consistent with
the Parties' mutual desire to reach an amicable resolution on all open
issues. The Parties agree therefore that all documents filed in
connection with the litigation over attorneys' fees, expenses, and
costs shall consist of a short, plain statement of the facts and the
law with the goal of informing the Court of relevant information for
its consideration.
Attorneys' Fees, Expenses, and Costs Incurred through December 7,
2009.
a. Plaintiffs may submit a motion for Class Counsel's attorney
fees, expenses, and costs incurred through December 7, 2009.
Such motion shall not assert that Class Counsel be paid more
than $99,900,000.00 above amounts previously paid by
Defendants. Unless otherwise ordered by the Court, Plaintiffs'
memorandum of points and authorities in support of such claim
shall not exceed 25 pages and shall be filed no later than
thirty (30) days following Preliminary Approval, and Class
Counsel's reply in support of such claim shall not exceed 15
pages.
b. Defendants may submit a memorandum in opposition to
Plaintiffs' motion. Such memorandum shall not assert that Class
Counsel be paid less than $50,000,000.00 above the amounts
previously paid by Defendants. Unless otherwise ordered by the
Court, Defendant's memorandum shall not exceed 25 pages and
shall be filed within 30 days after Plaintiffs' motion.
c. Concurrently with any motion for fees, expenses, and costs
of attorneys through December 7, 2009, Plaintiffs shall file
statements regarding Class Counsel's billing rates, as well as
contemporaneous, where available, and complete daily time,
expense, and cost records supporting this motion. Defendants
may also submit an annotated version or summary of the time,
expense and cost records in support of their opposition.
d. Plaintiffs disclosure and filing of the records referenced
in the preceding paragraph shall not constitute a waiver of any
attorney client privilege or attorney work product protections.
Plaintiffs may request the entry of an appropriate protective
order regarding such confidential records.
e. In the event that the Court awards attorneys' fees,
expenses, and costs covered by this Paragraph in an amount
equal to or greater than $50,000,000.00 and equal to or less
than $99,900,000.00, Plaintiffs, Class Counsel and Defendants
agree not to file a notice of appeal concerning such award.
5. Attorneys' Fees, Expenses, and Costs Incurred after December 7,
2009. Plaintiffs may submit a motion for Class Counsel's attorneys'
fees, expenses, and costs incurred after December 7, 2009, up to
$10,000,000.00. Such motion shall be based solely on attorney hours and
actual billing rates and actual expenses and costs incurred, and may
not be justified by any other means (such as a percentage of the class
recovery). Such motion shall be resolved in such manner as directed by
the Court. Concurrently with any motion for post Agreement attorneys'
fees, expenses, and costs, Plaintiffs shall file statements regarding
Class Counsel's billing rates, as well as complete and contemporaneous
daily time, expense, and cost records supporting this motion.
6. Should (a) either party terminate the Main Cobell Agreement
pursuant to the terms thereof, (b) the Main Cobell Agreement become
null and void because a condition subsequent does not occur, or (c) the
Main Cobell Agreement not finally be approved by the Court, this Fee
Agreement shall be null and void, and the parties and Class Counsel
shall take such steps as are necessary to restore the status quo ante.
7. Nothing in this Fee Agreement shall affect the right of any non-
party to this Fee Agreement.
Wherefore, intending to be legally bound in accordance with the
terms of this Fee Agreement, the Parties hereby execute this Fee
Agreement:
SIGNATURES
Wherefore, intending to be legally bound in accordance with the
terms of this Agreement, the Parties hereby execute this Agreement:
FOR PLAINTIFFS:
Dennis M. Gingold, Class Counsel
Keith M. Harper, Class Counsel
FOR DEFENDANTS:
Thomas J. Perrelli, Associate Attorney General
______
Mr. Faleomavaega. Chairman Rahall.
The Chairman. Thank you. Elouise, you heard my opening
statement, and I certainly want to reiterate my commendation
for you, and praise for you. You certainly have demonstrated a
dogged determination, a persistence and patience, and your
fight for justice for Indian Country will be long remembered
after all of us in this room have departed.
I wanted to also compare the misperceptions that I guess
that are out there, and salute you as I said in my opening
statement for your Dear Elouise column, or hotline, that you
have opened to answer a lot of those misperceptions.
And fears, and unjustifiable fears, but yet because of all
of the injustices that have been done, you can understand from
where it comes. It reminds me very much of our health care
debate, and the misperceptions that are out there, and those
for their own reasons that may be stirring up opposition
unjustifiably on those who stir up the opposition.
But again the fear you can understand, and the anger and
frustration, because it has been so long as we all know, 13 or
14 years. You heard this figure mentioned earlier that there is
an agreement that establishes a range of 50 to a hundred-
million dollars for attorney fees. Can you help us on how this
range was developed?
Ms. Cobell. Well, this range is 3 percent, and I firmly
believe that the attorneys have to be paid a hundred million
dollars. You know, the danger that we run into is when you
start pulling back attorneys' fees.
I am going to go back a little bit in time before I filed
this lawsuit. I went shopping for attorneys. I went to those
big attorney firms here in Washington that represented tribes.
I asked them to take this case.
They told me no, we are not taking the case. It is going to
take too long, and we just are not going to take the case. I
could not get people to represent me, and these were attorneys
that made 20 and 30 percent off the Court of Claims
representing Indian tribes, and they just would not do it.
And then I finally found the attorneys that would
represent, and I thought that the amount that they have filed
for is very reasonable, very reasonable. I have no problem. I
have done research, and I know that it is 25 percent, 20
percent, 25 percent for attorneys' fees for large cases.
And I believe that if we have good attorneys and we won--
and let me tell you that we won. In the 14 years, we won huge
victories, and it is almost like a surgeon. When my husband and
I went through a transplant, I gave him a kidney, we had the
top surgeon. It cost us a lot of money.
But we got the top surgeon because we wanted to live. I got
the top attorneys because I wanted over 500 thousand individual
Indians to live, and I wanted to make sure that they had proper
representation. So I think that three percent is a bargain
basement amount to pay the attorneys.
The Chairman. Could you tell us how this settlement may
affect future trust management by the Department of the
Interior?
Ms. Cobell. Well, I have to believe that if anything that
this court case has done has shown the breach of trust, that
the Department of the Interior is unlawful, or that they are
not doing.
And so I believe that there is only one way to go, and that
is to change, and I heard Secretary Hayes talk about the
Secretarial order that Secretary Salazar is doing, where he is
going to have a commission and to address trust reform, and
continue, and I have to believe.
I met with Secretary Salazar specifically one on one on
this, because I was very worried about the fact that trust
reform would not be performed, and I think his leadership--but
it will take all of us to continue to make sure that trust
reform is implemented properly for individual Indians.
And I guess I just have to believe that when I have the
Secretary of the Interior and the Attorney General telling me
that they have committed, if I can't believe them, then I don't
know who I can believe.
The Chairman. You have touched upon this, but would you
like to elaborate anymore on what this settlement agreement
means for future generations?
Ms. Cobell. Well, I believe that this will, like the panel
before has stated, this is for the past, compensation for the
past. I think that the fact that this is the first victory for
many individual Indians is so empowering for so many individual
Indians that they do have a voice, and that they can be heard.
And I feel that the young people are learning from this
case. They are learning from this case. They are understanding
that they have to pay attention. That you have to become very
active in the management of your assets. You cannot be passive.
And you can't say, oh, the government is going to take care
of it for us, because they are not. So you constantly have to
be very active, and I think that this case has done that.
You know you cannot believe the number of calls that class
counsel gets, and the number of letters, and the number of
calls, and I would like to invite each and every one of you to
my little teeny office at Blackfeet, where I have boxes and
boxes of letters from people that say thank you. Thank you for
standing up. Thank you for drawing a line in the sand and
saying no more.
And we want to make a change. This change has to happen,
and I do think that by sitting with the government and coming
together for a settlement that we can change together. That the
relationship between the Department of the Interior, and the
Department of Justice, and individual Indian account holders,
will improve, and we have to be able to work together to move
forward.
The Chairman. Thank you, Elouise. Thank you again.
Ms. Cobell. Thank you for your nice comments.
The Chairman. Thank you.
Mr. Faleomavaega. Our Senior Ranking Member, the Gentleman
from Washington, Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman, and thank you for
being here, and certainly I think it needs to be acknowledged
the long time period by which you have been involved in this.
I have said in this Committee on other occasions where
there are settlements, and not necessarily Indian settlements,
but other settlements, that generally speaking those are very
tough decisions.
But the good part about it generally speaking is that they
are decided by the people that are involved, and I applaud that
process. I think that generally is good. You heard today,
however, that there are some questions regarding the
transparency and the understanding of what this settlement
means. It is very legitimate, I think.
And I think that process needs to be followed. Maybe one
thing that you could do to help that is to share all of your--I
think you called them Letters to Elouise, with all of the
people that have questions about that.
I mean, if there is transparency, then for goodness sakes,
share all of that information, and you can get to a point of an
understanding. I think that is what we all want, but there are
some legitimate questions out there.
Let me focus a bit though, at least from my understanding
here of the attorneys' fees, because there was questions that
were raised on all of that. Now, as I understand it, your
initial lawsuit was because of the accounting, and you said
that was impossible, and so therefore you came to a settlement
on that.
Now, my understanding of the total amount of dollars of
that part of it, the accounting, is roughly $300 million. The
non-litigated claims that is part of that is about $1.1
billion, nearly three times as much.
Yet, the attorney fees come out of that portion as I read
the settlement. So that means that part of the damage claims--
and correct me if I am wrong, but you said that you weren't
necessarily happy that was part of the settlement agreement,
but all the attorney fees come out of that portion of the
money. I am just asking you if that is correct or not.
Ms. Cobell. I am going to take a run at the first question,
and then I have Bill Dorris, our attorney, talk about that. But
it was not just recently that the trust mismanagement was
included in our case.
It was a while back, and Bill Dorris will talk about it,
where the District Court had said that you are now to include
the accounting of trust assets other than just the funds. So
that became a part of this case early on, and I can't remember
the exact date, and I will turn this over to Bill.
STATEMENT OF WILLIAM E. DORRIS, MANAGING PARTNER, KILPATRICK
STOCKTON LLP, WASHINGTON, D.C.
Mr. Dorris. Yes. The court did invite the Plaintiffs to
amend their complaint to add those claims at some point during
the course of the case, and that was in approximately 2004.
But one of the things that I think is important to
understand is that from the very outset when we asked for an
accounting, one of the natural outgrowths of an accounting once
you determine how well the trust has been managed or
mismanaged, you then have a restatement of accounts.
So in one sense money was always part of this case, in that
one of the outgrowths from the accounting itself would be a
restatement of the accounts. Now, one of the great benefits
that we got for most of the Plaintiff class, and what will be
the trust administration class, is that they have the
opportunity now, without further litigation, to collect money
tax free to settle those claims.
However, we were very careful in the settlement agreement
to make sure that if they did not want to take advantage of
that, they could opt out and have all of their rights still
preserved, and that is very clear in the settlement agreement.
Now, one of the issues that the District Court will have to
determine in deciding what the right amount of attorneys' fees
is, because that is not decided. That will ultimately be for
the discretion of the court, is that normally in this district
ranges are from 20 to 30 percent recovery for attorneys' fees.
As Ms. Cobell was indicating, if you look at the full $3.4
billion amount, an award of a hundred million dollars would be
only 3 percent. But one of the issues that the District Court
will have to determine after it hears from all of the class
members, is what percentage is to apply and to what funds.
Should it only apply to the historical accounting portion
of the $1.4 billion, or should something be given to the
attorneys for perhaps not litigating fully the trust
administration claims, but still getting those benefits for the
class.
So that will be an issue for the court to decide, but let
me also tell you that these claims have been investigated very
thoroughly before we settled them. As part of our accounting
claim, we had extensive research and analysis done by experts,
in terms of how much oil, gas, and other minerals, timbers,
grazing rights, ranching, all of the various assets from the
Plaintiff class, what should the government have collected on
that.
And we had extensive expert analysis done so that we felt
like we were in a very good position when we settled these
claims, though they are subject to an opt out, to get a fair
settlement for the Plaintiffs.
Mr. Hastings. Let me respond by simply saying that I am not
an attorney, and I appreciate your response and legalese. I am
going to have to go back and digest that in my way with the
information that I have, and what you are saying.
If you take the total 3.4, over half of that is something
in future claims, but yet you are saying that should be part of
the--or at least as I understand it, that should be part of the
pot by which attorney compensation comes from. I just have a
question, and so let me end here, but ask this of both of you.
As I mentioned earlier to the Department of Justice and the
Department of the Interior, hearings like this, it is good to
have these hearings, because it brings out issues that need to
be resolved.
There are going to be some questions, obviously, as our
staff kind of digests what you said, and we would obviously
send you some questions so that we could further explore so we
can understand exactly what was said here.
If we could get your quick response--and I asked Justice
and Interior because they turned around my questions in a two-
week time period, and if you could follow that, that would be
very helpful, because, Ms. Cobell, you said that timing is of
the essence.
Obviously, timing is of the essence to us, because we are
part of this whole formula. I mean, again, if it was settled
without any monetary damages, we would not be part of it.
But there are monetary damages, and that means it brings us
into this, and we have to understand what we are going in a
proper way to make the right decision. We can only do that if
we have information that satisfies our issues, too.
And let me just simply conclude as I opened this that
settlement agreements from my point of view are generally a
very, very good way to go, simply because the people that are
involved are the ones that are making the decision.
But there are always questions that come of that, and we
certainly heard that today. I think that those things need to
be resolved so we can feel comfortable in going forward with
this settlement agreement. So, thank you, Mr. Chairman.
Mr. Faleomavaega. Thank you. When Ms. Cobell filed a
lawsuit, and this was in 1996, I had this crazy idea and said
why can't we just get some of that money from the Interior
Department since it is owing to Indian Country, and establish
some kind of a scholarship fund, and hopefully maybe Indian
Country will give approval to something so that we could
utilize.
And this is 14 years ago, an I am just so happy to hear
that one of the factors that was given into your negotiations
is that there will be a scholarship fund. Can you elaborate on
that a little more, Ms. Cobell? How much is going to be
allocated?
Ms. Cobell. The scholarship fund is $60 million and, of
course, I wanted a hundred million, but I had to give in to $60
million for a scholarship fund, but it is for all individual
Indians that would like to pursue their education. And no
matter if it be at tribally controlled colleges, universities,
or vocational schools, and I think this is a very good move. We
have already had different private foundations that want to
match the scholarship fund.
So it is a great opportunity for individual Indians to get
educated, and I just hope that every single one of them take on
land issues, and get educated in that area to continue to
understand the management of their land.
And one of these days there, I think that Mr. Nunez talked
about his association, and I that it is really important to
have young people start having associations, and having places
for individual Indians to go, and to learn the expertise that
has to be known in order to manage your own assets, and to
improve your own quality of life.
Mr. Faleomavaega. I for one would certainly absolutely
support your suggestion that it should be a hundred-million
dollar pot specifically for scholarship funds, because I
honestly believe that is only for the betterment, and not only
the future of Indian Country, but for the young generations
coming up in the United States.
I just wanted to share with you a little bit of how much I
enjoyed reading--I believe he was a Lakota--Dr. Vine Deloria,
and how much I deeply enjoyed reading some 20 books that he had
written. One of them was ``Custer Died For Your Sins,'' and I
think the other book was ``God is Red.''
I hope my colleagues will have a chance to read those two
books, because I think it tells a lot about the--and I just say
that Mr. Deloria is one of my admirers, but I will once again
say, Ms. Cobell, thank you for our patience.
I realize that there are a lot of questions raised by what
is going to happen now and hopefully there will be a better
understanding in Indian Country about what you have tried to
do, and what you have achieved, and with the help of the
attorneys that have been willing to do all of this on behalf of
Indian Country for some 14 years now. I do want to thank you.
Ms. Cobell. Mr. Chairman, can I use this special time to
officially say goodbye to Marie Howard. Marie Howard has been
one of the bright spots that makes you want to continue to come
back and testify before these committees, and she has just been
committed, and I don't know what we will do without her.
Goodbye, Marie.
Mr. Faleomavaega. Thank you very much. Without any further
statements, the hearing is adjourned.
[Whereupon, at 12:43 p.m., the Committee was adjourne
[Additional material submitted for the record follows:]
[A statement submitted for the record by the Rosebud Sioux
Tribe follows:]
Statement submitted for the record by the Rosebud Sioux Tribe
For decades, the Rosebud Sioux Tribe (``Tribe'') has called for
Congressional commitment of substantial federal funding to solve the
fractionated interest problem created by the federal government and
left to tribes to solve. This testimony only concerns the portion of
the Cobell Class Action Settlement Agreement (``Settlement Agreement'')
concerning fractionated interests; specifically, the $2 billion Trust
Land Consolidation Fund (``Fund'').
As described further herein, our Tribe has been on the cutting edge
in developing creative, effective and sustainable program for
consolidation of fractionated interest. The only thing missing has been
a comparable commitment of federal financial and administrative
assistance. The federal government has been paltry at best, and at
times go as far as to undermine the Tribe's efforts. In order to
facilitate consolidation of fractionated interests, language in the
Cobell litigation settlement bill must be revised to make the Trust
Land Consolidation Fund to be used broadly for Indian land
consolidation purposes. For example, funds should be available to
eliminate liens already acquired by the Indian Land Consolidation
Program (``ILCP'') for tribes. Funds must also be available to be used
to immediately eliminate any and all tribal loan obligation (especially
to the United Sates) associated with land consolidation efforts and
programs. This would benefit those Indian tribes, like Rosebud, that
have already begun consolidation of their own fractionated interests.
Furthermore, it will ensure that more of the $2 billion is applied
toward Indian land consolidation before the ten (10) year ``sunset
date'' established in the Settlement Proposal. (The Tribe sees no
reason for such a time limit in any case.).
Brief History of the Fractionation of the Rosebud Sioux Tribe
Reservation. The Rosebud Sioux Tribe Reservation (``Reservation'')
occupies only a small portion of the former Great Sioux Reservation.
Specifically our Reservation consists of what remains after 90 million
acres were taken from the Tribe and tribal members during Allotment and
Homesteading. Subsequent cessions to the United States further
diminished our land base. As with many other tribes, the Tribe is still
trying to recover land lost through the checkerboarding of our
Reservation. Consistent with the checkerboarding of Reservations, our
current Reservation is comprised of tribal land, individual allotments
and fee land owned by tribal members and others. Additionally, some
allotments and tribal land fall outside the currently acknowledged
boundaries of the Reservation. Due to the devastating diminishment of
our land base, the Tribe has spent decades reacquiring and
consolidating the scattered holdings, both within and outside the
Reservation boundaries.
Federal Government Fractionated Interest Consolidation Efforts. To
assist tribes with the consolidation of fractionated interests within
reservation boundaries, the federal government developed the ILCP. The
ILCP purchases fractionated interests in the name of an Indian tribe.
However, subsequent to purchase, interests are immediately slapped with
a lien. These liens make it impossible for the land to be transferred
to tribes. Lease income generated from ILCP purchased interest is used
by the ILCP to purchase more fractionated interests. This actually
results in the generation of debt in the name of tribe for which the
interest was acquired. As is evident, the practice of placing liens on
ILCP purchased interests undermines the overall goal of land
consolidation. Tracts are not placed in trust for tribes, and tribes
are put in debt for land acquisitions they cannot access.
The federal government also created a lending program through the
U.S. Department of Agriculture (``USDA''), under the Farm Service
Agency, that allows tribes to borrow money to resolve the fractionation
problem internally with the use of Indian Land Acquisition Loans.
However, interest rates on these loans become so outstanding that
tribes are required to pay interest in amounts in excess of several
times the principal.
Rosebud Sioux Tribe Fractionated Interest Consolidation Efforts.
Since 1943, the Tribe has operated a fractionated interest program
called Tribal Land Enterprise (``TLE''). TLE has been a cutting edge
program, and the model upon which other tribes have followed. Like the
ILCP, TLE is working to resolve the fractionated interest problem
within the Reservation. However, TLE uses new and innovative ways to
acquire fractionated interest, which have been commended by the
Department of the Interior. Through TLE, the Tribe has borrowed $8.5
million in Indian Land Acquisition Loans from the USDA. To date, the
Tribe has repaid the principal amount on its Indian Land Acquisition
Loans. However, as previously mentioned, the Tribe has fallen victim to
interest payments that now total several times more than original loan
amounts.
Rosebud Sioux Tribe Proposal for a Mutually Beneficial Solution. In
the true spirit of consolidation of fractionated Indian land interests,
the Tribe has time and time again submitted proposals to the Bureau of
Indian Affairs (``BIA'') for the return of land purchased in the name
of the Tribe though the ILCP to the Tribe. We continue to demand that
liens on the ILCP tracts be forgiven, and the ILCP tract lease income
be transferred to the TLE program.
Our proposals are just and reasonable. Especially in light of the
fact that programs like TLE save the federal government money by
reducing the cost of administering fractionated interests for the
federal government. Also, since the infrastructure of TLE is already in
place, and TLE's administrative needs are already met, funds funneled
through TLE can be used solely to acquire fractionated interests. Our
proposals are the most economic and efficient way for the federal
government to execute Indian land consolidation!
Trust Land Consolidation Fund Created from the Cobell Settlement
Agreement. The Class Action Settlement Agreement (``Settlement
Agreement'') for Elouise Pepion Cobell v. Ken Salazar, Secretary of
Interior, et al., No. Civ. 96-1285 (JR) (``Cobell'') was entered into
on December 7, 2009. The Settlement Agreement provides for the
establishment of a Trust Land Consolidation Fund (``Fund''). As defined
in the Settlement Agreement, the Fund shall have $2 billion ``allocated
to Interior Defendants and held in a separate account in Treasury for
the purpose of acquiring factional interests in trust or restricted
land...''.
Interior Defendants are to distribute the Fund in accordance with
the Indian Land Consolidation Program authorized under 25 U.S.C.
Sec. Sec. 2201 et seq. The Fund shall be used for the purposes of (1)
acquiring fractional interests in trust or restricted lands; (2)
implementing the ILCP; and (3) paying the costs related to the work of
the Secretarial Commission on Trust Reform, including costs of
consultants to the Commission and audits recommended by the Commission.
Interior Defendants have no more than ten (10) years from the date
of the final approval of the Settlement Agreement to expend the Fund.
If the Fund is not expended at that time, any amount remaining in the
Fund will be returned to the Treasury.
Realization of Fractionated Interest Consolidation on the Rosebud
Sioux Tribe Reservation. As earlier stated, the Tribe has repeatedly
requested that lands purchased through the ILCP be returned to the
Tribe lien free. This is authorized under ILCA, as amended by the
American Indian Probate Reform Act (``AIPRA''), per 25 U.S.C.
Sec. 2213(b)(3), ``Removal of Liens After Findings.''
According to ILCA, the Secretary of the Interior (``Secretary'')
can forgive the repayment of a lien if: (1) the costs of administering
the interest will equal or exceed the projected revenues; (2) it will
take an unreasonable period of time for the parcel to generate revenue
that equals the purchase price; or (3) a subsequent decrease in the
value of land or commodities associated with the parcel of land make it
likely that the interest will be unable to generate revenue that equals
the purchase price paid for the interest in a reasonable time. To date,
the Secretary has not forgiven the repayment of liens on the Tribe's
ILCP tracts, nor indicated that our proposal is even being considered.
Additionally, the Tribe has requested that all interest on the
Tribe's Indian Land Acquisition Loans be forgiven. Again, to date, the
interest on the loans are still outstanding, and no discussion are in
place to settle the outstanding interest issue.
How the Trust Land Consolidation Fund Could Assist the Rosebud
Sioux Tribe, TLE, and other Tribes with Programs like the TLE. If the
Secretary is unwilling to forgive the lien as outlined above, the Tribe
proposes that funds from the Trust Land Consolidation Fund be used to
satisfy the liens on the Tribe's ILCP tracts. Additionally, the Tribe
proposes that funds from the Trust Land Consolidation Fund also be used
to satisfy the Tribe's outstanding interest on the Tribe's Indian Land
Acquisition Loan.
Language in the Cobell litigation settlement bill must permit the
Trust Land Consolidation Fund to be used for the satisfaction of liens
on tracts already acquired by the ILCP for tribes, and towards loans
(both the principal and interest) tribes have taken out for land
consolidation purposes. Not only would this allowance provide the best
benefit to tribes who have already begun consolidation their own
fractionated interests, it would better ensure that the entire Fund is
actually applied toward Indian land consolidation before the sunset
date in the settlement. Additionally, allowance of the aforementioned
use of the Fund will save the federal government money on
administrative overhead of ILCP tracts and federal loans.
Conclusion. The fractionation problem has been and continues to be
very costly to the federal government, which continues to incur
administrative costs on all ILCP tracts upon which there is a lien, and
federal loans issued for land consolidation. If liens and loans could
be satisfied from the Trust Land Consolidation Fund created through the
Cobell Settlement Agreement, the federal government will be alleviated
of all administrative costs of the ILCP tracts and federal loans. Both
the federal government and tribes benefits from this arrangement, and
the goal of land consolidation is ultimately honored. It is time that
the federal government heed decades worth of urging from tribes to
assist in solving a federally created problem--fractionation of Indian
land. The Cobell Settlement Agreement outlines vehicle with which the
federal government can make amends for decades of trust mismanagement.
The Trust Land Consolidation Funds provides a vehicle that can help
begin healing century long wounds.
The Tribe thanks you for the opportunity to submit a statement for
the record.
______
[A letter submitted for the record by Percy Squire, Percy
Squire Co., LLC, Columbus, Ohio, follows:]
March 10, 2010
The Honorable Nick J. Rahall, II
Chairman
Committee on Natural Resources
1324 Longworth House Office Building
Washington, D.C. 20515
Re: Full Committee Oversight Hearing on the '"Proposed Settlement of
the
Cobell v. Salazar Litigation; Proposed Amendment
Dear Mr. Chairman:
This correspondence is being sent to you on behalf of the
Plaintiffs in United States Supreme Court Case No. 09-585. The Harvest
Institute Freedman Federation, et al. v. United States, now pending.
The Harvest action was commenced on December 28, 2006, in the United
States Court of Federal Claims by persons aggrieved by the breach of
fiduciary duties owed by the United States to Freedman as defined under
the terms of various treaties entered into between the United States
and the so-called Five Civilized Indian tribes following the Civil War,
in 1866. 1 The Cobell settlement as currently proposed has
profound implications for the Harvest Institute action and countenances
the perpetuation of historic racial discrimination, unless amended, for
the following reasons:
---------------------------------------------------------------------------
\1\ See, Exhibits 1, 2 and 3 for definitions of Freedmen from
various Administrations.
---------------------------------------------------------------------------
1. The Cobell settlements reaffirms the existence of a trust
relationship between the United States and Native Americans dating back
to at least 1887, the time of enactment of the General Allotment Act of
1887, known as the ``Dawes Act'' (the bulk of trust assets alleged
within the Cobell action to have been mismanaged by the United States
are proceeds of various transactions in land allotted to individual
Indians under the Dawes Act), See, Cobell v. Salazar. July 24, 2009,
Opinion of the United States Court of Appeals for the District of
Columbia, Circuit No. 08-5500, p. 2.
2. Under 1866 treaties between the United States and the Five
Civilized Tribes, Freedmen were accorded equal civic status in relation
to the United States as members of the Five Civilized Tribes, whether
the Freedman were adopted into the tribes or not;
3. Since Cobell establishes that trust obligations are owed and
have been owed by the United States to Indians since the close of the
Civil War, Freedman having equal civic status under the 1866 treaties
to members of the Five Civilized tribes are also owed fiduciary duties
by the United States;
4. The Cobell settlement is evidence that the United States has
never repudiated its fiduciary duty as trustee to Native American
beneficiaries, i.e. the Cobell Plaintiffs; thus
5. Contrary to the rulings of the United States Court of Federal
Claims in Harvest Institute Freedman Federation, et al. v. United
States, Case No. 06-907L and its affirmance by the United States Court
of Appeals for the Federal Circuit, the six year statute of limitations
applicable to claims against the United States under the Tucker Act 28
U.S.C. Sec. 2501, does not. under the repudiation rule 2,
begin to run in relation to claims by the Harvest Institute Plaintiffs,
et al. until the United States as trustee repudiates its trust
responsibility to the Five Civilized Tribes, an event which Cobell
establishes has never occurred.
---------------------------------------------------------------------------
\2\ There is a general ``repudiation rule"' with regards to
equitable trusts that says the statute of limitations will not begin to
run on claims to enforce a trust against a trustee until repudiation of
the trust relationship. The underlying rationale is that the trustee's
possession of the trust assets is presumed to be possession for the
beneficiary (i.e., the cestui que trust), and the time should begin to
run on claims against the trustee only when the trustee has taken some
acts or communicated in a way that is inconsistent with that
presumption, so as to provide notice that the trustee has disavowed the
trust relationship or is no longer acting in the interests of the
beneficiary. The repudiation rule is applicable in the Harvest action
for the reason the Freedmen are seeking recovery of trust property
itself, and the Government as evidenced by Cobell has not already
repudiated its trust relationship with the Freedmen.
The repudiation rule has appeared in cases involving Native
American trust claims, For example, in Tunica-Biloxi Tribe v. United
States, 1991 U.S. App. LEXIS 10716 (Fed. Cir. may 17, 1991).
Under the law of trust, a cause of action for breach of a
fiduciary obligation owed by a trustee does not accrue until the trust
is repudiated or terminated. Manchester Band of Porno Indians. Inc. v.
United States, 363 F. Supp. 1238. 1249 (N.D. Cal 1973) (citing United
States v. Taylor, 104 U.S. 216(1881)
---------------------------------------------------------------------------
In light of the above it is inequitable and will result in the
perpetuation of racial discrimination against the Freedman Plaintiffs
in the Harvest Institute action (hereinafter ``Harvest Plaintiffs) to
settle claims accruing to the benefit of members of the Five Civilized
Tribes, descendants of slaveholders and persons who were disloyal to
the United States while failing to resolve claims against the United
States by the Harvest Institute Freedmen's Federation's putative class.
Accordingly, the Cobell settlement authorization legislation should be
amended to also include resolution of the claims in Supreme Court
docket no. 09-585, by adding a subclass to the putative Cobell class
consisting of the Plaintiffs in the Harvest Institute action and by
increasing the settlement amount by $600,000,000.00 to account for
claims by the 120.000 individual descendants of Freedman entitled to a
recovery by reason of the breach of fiduciary duties owed to the
Freedmen by the United States. A full discussion of the grounds for
this relief is below.
A. BACKGROUND 3
---------------------------------------------------------------------------
\3\ See, Exhibit 4 for actual treaty terms.
---------------------------------------------------------------------------
During the Civil War, the Five Civilized Tribes entered into
treaties with the Confederacy, severing their relations with the United
States. As a result of these acts of disloyalty the Five Civilized
Tribes forfeited all tribal lands and their status as government wards.
In 1866, the United States made treaties with each of the Five
Civilized Tribes, setting the terms on which the tribes would continue
to exist within the United States, regain their land and trust
beneficiary status. All of the treaties with the Five Civilized Tribes
eradicated slavery' within the tribes and provided that the emancipated
``Freedmen'' would have certain rights within the tribes. Although
these Treaties had a common purpose, the provisions of the various
Treaties were not identical. However, under the treaties the Freedmen
were emancipated and given civic status equal to Indians whether the
Freedmen were adopted into the Tribes or not. The following is a
summary of the provisions of the treaties pertinent to this appeal.
The Seminole Treaty: The United States entered into its first
antebellum treaty with the Seminole in 1866. 14 Stat. 755. The treaty
provided that the Freedmen members would have rights equal to those of
Seminoles by blood:
And inasmuch as there are among the Seminoles many persons of
African descent and blood, who have no interest or property in
the soil, and no recognized civil rights, it is stipulated that
hereafter these persons and their descendants, and such other
of the same race as shall be permitted by said nation to settle
there, shall have and enjoy all the rights of native citizens,
and the laws of said nation shall be equally binding upon all
persons of whatever race or color who may be adopted as
citizens or members of said tribe.
14 Stat. 755, 756. In 1898, the Seminole entered into an agreement
with the United States to allot its land held in common to individual
members. 30 Stat. 567. The agreement made no distinction between the
Freedmen members and the members by blood. All Freedmen members, those
represented by Harvest here, did not receive allotments under this
agreement.
The Creek Treaty: The United States' treaty with the Creek is
similar to its treaty with the Seminole. It provided that the Creek
Freedmen would have all the rights of members by blood, including the
right to share equally in land and funds:
[A]nd inasmuch as there are among the Creeks many persons of
African descent, who have no interest in the soil, it is
stipulated that hereafter those persons lawfully residing in
said Creek country under their laws and usages...shall have and
enjoy all the rights and privileges of native citizens,
including an equal inters tint he soil and national funds, and
the laws of said nation shall be equally binding upon and give
equal protection to all such persons, and all others, of
whatever race or color, who may be adopted as citizens or
members of said tribe.
14 Stat. 785, 786. In 1897, the United States and the Creek Nation
agreed to terms on which the Creek Nation's common lands would be
allotted. 30 Stat. 496. 514. The agreement made no distinction between
Creeks by blood and the Freedmen. In 1901, the Creek entered a second
agreement with the United States. 31 Stat. 861. Like the first, this
agreement made no distinction between Creek Indian and Freedmen
members. The Creek Freedmen represented by Harvest here did not receive
their allotments on the same terms as the Creek members by blood.
The Cherokee Agreement: The United States entered into a treaty
with the Cherokee in 1866. The treaty of 1866, inter alia is a basis
for Appellants' claims here. A treaty with the Cherokee Tribe and the
United States was concluded on July 19, 1866. Article IV of that Treaty
provided that"''... [a]ll of the Cherokee freed Negros who were
formerly slaves to any Cherokee, and all free Negros not having been
slaves, who resided in the Cherokee nation prior to June 1,
1861...shall have the right to settle in and occupy the Canadian
district...and will include a quantity of land equal to 160 acres for
each person who may so elect to reside in the territory...'' Thus, as
in the case of the Choctaw and Chickasaw Freedmen, the Cherokee
Freedmen were ``adopted into the tribe [and! [consequently, they and
their descendants were entitled to participate in the allotment of
lands equally with members of the tribe by blood.'' Ross v. Ickes. 130
F.2d 415 (D.C.C. 1942). It is in the failure of the Cherokee to allot
land to the Freedmen represented by Harvest in this action that gave
rise to the Harvest Complaint.
The Choctaw and Chickasaw Treaty: The United States entered into a
treaty with the Choctaw and Chickasaw Tribes on April 28, 1866. 14
Stat. 769. This treaty provided that the tribes had a choice about how
to deal with their Freedmen. If the tribes made their Freedmen members
within two years, the tribes would receive a portion of a trust fund,
and the Freedmen would receive 40-acre allotments once the Choctaw,
Chickasaw and Kansas Indians had made their selections. If the tribes
did not adopt their Freedmen and the Freedmen voluntarily removed
themselves to other land within Indian Territory, the tribes would get
nothing and the [Freedmen would receive a portion of the trust fund.
Id] The Choctaw and Chickasaw resisted adopting the Freedmen, so the
Freedmen were not entitled to the 40-acre allotments. In 1883, the
Choctaw adopted the Freedmen into the tribe and declared each was
entitled to 40 acres. The tribe made no allotments at that time either.
Choctaw Nation of Indians v. United States. 318 U.S. 423, 425 (1943).
The Chickasaw never did adopt their Freedmen into the tribe.
In 1897, the United States entered into an agreement with the
Choctaw and Chickasaw whereby their lands held in common would be
allotted. 30 Stat. 496, 505-506. This agreement provided that the
Choctaw Freedmen would receive 40-acre allotments. 30 Stat. 506. Before
any allotments were made, the United States entered into another
agreement with the tribes. This second agreement also provided that
Choctaw and Chickasaw Freedmen would receive 40 acres. 32 Stat. 641.
While the Choctaw and Chickasaw treaty provided conditional
property rights, none of the other treaties entitled the Freedmen to
individual property rights. The Freedmen represented by Harvest here
did not receive allotments under their tribes' allotment agreements
with the United States at the turn of the 20th century.
The allotment process under the Dawes Act of 1887 was not initially
applicable to the Five Tribes. The allotment process was extended to
include the Five Tribes by the Curtis Act of 1898. Under the Curtis
Act, Five Tribes land was allotted. Proceeds from transactions
involving Five Tribes land, resulted in assets whose mismanagement is
the subject of the Cobell action. just as with assets emanating from
the General Allotment Act of 1887.
The claim of the Harvest Plaintiffs alleges land guaranteed under
the 1866 treaties to Freedmen by the United States was not delivered to
the Freedmen, allotments were not received under the Curtis Act of 1898
which resulted in the resulting failure to establish ``Individual
Indian Money'' accounts for the ancestors of the Harvest Plaintiffs.
Approving the Cobell settlement authorization without some amendment to
address this historic breach of trust will perpetuate past historic
racial discrimination and have the ironic twist of resolving claims of
persons disloyal to the United States and slaveholders, while failing
to address the claims of persons who were not disloyal and guaranteed
equal civic and political status, separate and apart from tribal
membership - the Harvest Plaintiffs.
The United States has clearly accepted and acknowledged its trust
responsibilities to the Cobell Plaintiffs. In point of fact, the trial
court in Cobell stated:
It is clear now that this Court has broad equitable
authority to deal with a century or more of trustee nonfeasance and to
fashion appropriate remedies, see, Cobell v. Norton, 240 F.3d 1081,
1108-10 (D.C, Cir. 2001) (Cobell VI). but it is also clear that the
authority is constrained by traditional doctrinal limits on federal
courts that apply in suites against the government, including sovereign
immunity and separation of powers.
Accordingly, methods that might be unacceptable in a
typical trust case, such as statistical sampling, are available here,
where I am instructed to strike a more forgiving ``balance between
exactitude and cost.''
In these unchartered waters, where the trust is of
enormous scope, the trustee of unusual character, and the data affected
with such great uncertainty, the law of trusts is a sort of magnetic
compass; it cannot be expected to point to due north, or to '"map
directly'' onto this context. Id. at 1078.
One useful is not very precise pointer provided by case
law is that a trustee may not hide behind obscurity that he himself has
created. See, e.g., Rainbolt v. Johnson, 669 F.2d 767, 769 (D.C. Cir.
1981)
``As to a trustee who fails to keep proper records of his
trust it is usually stated that, 'all presumptions are against him' on
his accounting, or that 'all doubts on the accounting are resolved
against him.'"
The rules that identify and govern a breach of the
accounting duty for a simple, 25-year trust with a single beneficiary
cannot be applied, unaltered, to a 121-year old perpetual trust,
managed by civil servants, with rapidly multiplying beneficiaries and a
variety of ever-changing assets. Equity seeks ``to do justice to al]--
parties, Bollinger & Boyd Barge Serv., Inc. v. The Motor Vessel.
Captain Claude Bass, 576 F.2d 595, 598 (5th Cir. 1978) (Emphasis
added.)
--``its orders are adapted to the exigencies of the
case,'' Taylor v. Sterrett. 499 F.2d 367, 368 (5th Cir. 1974), and it
seeks to make accurate evaluations of difficult evidence, not to
provide ``windfalls'' for victims or punishment for wrongdoers. See,
Bollinger v. Boyd, 576 F.2d at598.
The trustee's irremediable breach of its accounting duty
has unquestionably harmed individual plaintiffs (if not necessarily the
plaintiff class): their putative damages claims have been prejudiced by
the impossibility of assembling accurate data about the disposition of
their assets.
These are but a few of the affirmative statements made by the
Cobell Court concerning its duty to the Cobell Plaintiffs, including
those Cobell Plaintiffs descended from persons disloyal to the United
States who forfeited all of their land.
B. SOLUTION
The Cobell settlement authorization definition of litigation should
be expanded to include Supreme Court docket no. 09-585, Harvest
Institute Freedmen Federation, et al v. United States. The settlement
amount should be increased by $600,000,000.00 to account for the
120,000 Harvest putative class members. A Harvest subclass should be
certified in the Cobell action however participation in the subclass
should not be based exclusively on the ``Final Rolls of Citizens and
Freedmen the Five Civilized Tribes'' the ``Dawes Rolls. Persons who can
prove a connection to any of the Congressionally mandated Freedmen
census should be eligible to apply for Harvest subclass participation,
including: The Kern-Clifton Roll of Cherokee Freedmen of 1897 and the
Wallace Roll of Admitted Freedmen 1890-1893. The exclusive authority of
the Dawes Roll must be abandoned in favor of the addition of the Kern-
Clifton Roll and Wallace Roll and also the ``Ancient documents''
exception to the hearsay rule codified into the Federal Rules of
Evidence which allows into evidence probative statements in a document
in existence twenty years or more the authenticity of which is
established.'' Fed. R. Evid. 803(16).
C. CONCLUSION
It is respectfully requested that the Cobell authorization
legislation be amended as set forth above in order to avoid the
perpetuation of historic inequity and blatant racial discrimination.
Sincerely,
Percy Squire
Enclosure
cc: Joshua Pitre; [email protected]
Clay T. Lightfoot; [email protected]
Rollie Wilson; rollie [email protected]
James S. Hall; Jim [email protected]
[NOTE: Attachments have been retained in the Committee's official
files.]