Cobell Trust Settlement Could Mean $1.4 Billion to Indian Plaintiffs

By Courtney Lowery, 12-08-09

The Obama Administration today announced that it will settle in the landmark class-action lawsuit against the Interior Department that alleged gross mismanagement of American Indian trust accounts. In a press conference, Interior Secretary Ken Salazar and Attorney General Eric Holder said the settlement will mean $1.4 billion will be distributed to plaintiffs.

The government has also agreed to create a $2 billion fund that will offer new trustees, created by land being “fractioned” by being passed down from generation to generation cash payments for land that has been divided up in order to, as the Interior put it, “free up the land for the benefit of tribal communities.” That brings the total settlement up to $3.4 billion.

Cobell v. Salazar was first filed in 1996 on the grounds that the government mismanaged the trust accounts (involving royalties for grazing, oil and gas and timber, among others) of more than 300,000 Indians. Elouise Cobell, a Blackfeet and the lead plaintiff in the suit, told Indian Country Today that she is thankful the suit is finally coming to an end and that Indian Country especially appreciates the Obama Adminstration moving on the issue. Still, she said the settlement is “significantly less than the full accounting to with the class members are entitled.”

In a release, Salazar called the settlement “historic.”

“This is an historic, positive development for Indian country and a major step on the road to reconciliation following years of acrimonious litigation between trust beneficiaries and the United States,” Salazar said. “...This historic step will allow Interior to move forward and address the educational, law enforcement, and economic development challenges we face in Indian Country.”

Right now, the Interior Department manages 56 million acres of Indian trust land and on that, there are more than 100,000 leases. The agency estimates it manages $3.5 billion in trust funds.

The point of the $2 billion in buy-back money for the new “fractioned” trustees is to, as the agency put it, “By reducing the number of individual trust accounts that the U.S must maintain, the program will greatly reduce on-going administrative expenses and future accounting-related disputes.”

The agency has promised to put 5 percent of the interests bought through the $2 million fund into a scholarship fund for Indians.

More here from the Interior Department and more here from Indian Country Today.