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Vail Daily column: Cobell’s casualties

Vince Emmer

Editor’s note: This is the second of two parts. The first part appeared in Friday’s Vail Daily.

“We knew about the problem, of course, but it was so enormous,” John Echohawk, soft-spoken Boulder attorney and founder of the Native American Rights Fund recalled. “No one ever got serious about pursuing it.”

More than a century before, the U.S. had taken control of Indian property as trustee. Much later, Secretary of Interior Bruce Babbit would testify that he knew of dozens of government reports critical of the Bureau of Indian Affairs’ handling of the Individual Indian Trust Fund.



Even superstar athlete Jim Thorpe was denied his own trust fund money to travel to Stockholm to compete in the 1912 Olympics.

By the 1960s, Indians were questioning how their small and variable trust fund checks were calculated.



Blackfeet Indian Eloise Cobell grew up then. She said, “My elders were beat if they asked why. My generation was not. So I asked why. I’m still asking why.”

Finally, in 1996, after the Indians had lost 65 percent of their land under B.I.A. trusteeship, and after another failed Congressional attempt to reform the agency, Cobell filed a class action lawsuit against the U.S.

The Indians wanted a clean set of balanced trust fund books. Cobell’s Indian team initially estimated damages at $176 billion though many records were missing.



The United States of America is not an ordinary legal foe.

First, it runs the B.I.A. Native Americans joke that the initials stand for “Bossing Indians Around.” Imagine Cinderella suing her stepmother while still living at home.

Second, the judicial system is not wholly independent of the fleshy hand of political pressure.

Third, the U.S. government controls more money than anyone else on earth. Legal outcomes are often influenced by budget more than justice.

In 1996, Judge Royce Lamberth ordered the B.I.A. to produce all the records it possessed pertaining to the plaintiffs’ trust balances. It certified that it had done so. Two years later, the government destroyed 162 boxes of previously unreported trust fund records.

During the case, Babbit testified that the Indians were not told their balances were unreliable “to reduce the risk of lawsuit.” Presiding Judge Lamberth ordered the trust fund accounting system reformed. It did not happen.

In 1999, Lamberth wrote: “Such behavior certainly would not be tolerated from private sector trustees. It is fiscal and governmental irresponsibility in its purest form.”

When trust fund checks to Indians were interrupted, complaining Indians were told by the B.I.A. that Eloise Cobell was to blame. It published her phone number. Cobell said their plan backfired. She spoke to every Indian that called her and explained what she was trying to do for them. After finding that hackers could easily access the Indian trust fund accounts, and after unsuccessful requests to fix the problem, Judge Lamberth ordered the B.I.A. off the internet until it plugged the hole. The B.I.A. had no email for years.

In a classic bureaucratic tactic, the Department of the Interior shut down National Park websites, hoping to draw public anger against the court.

In 2006, the government had Judge Lamberth removed from the case. Momentum then swung in the B.I.A.’s favor.

The government’s war of financial attrition against the Indians pounded on. The new judge rejected the Indians’ request to statistically estimate the trust fund’s finances.

When U.S. Attorney General Alberto Gonzales went before Congress asking for more money to fight the Indians, he high-balled the potential liability at $200 billion. Other than that, the number tumbled from the original $176 billion claim to $40 billion, then $10 billion, $7 billion and finally $3.4 billion, of which only $1.4 billion would go to individual Indians.

In announcing the government’s victorious settlement of this long and acrimonious legal battle in 2009, U.S. Attorney General Eric Holder said, “with this settlement, we are erasing past liabilities.”

It is clear as a cloudless night that “erasing past liabilities” is not the same as making things right. A clean accounting is still nowhere in sight.

In 2011, Cobell, self-made banker, intrepid truth seeker, past president of the Montana Elvis Presley Fan Club, and officially recognized Blackfeet Warrior, died of cancer.

Back in 1868, Colorado’s Chief Ouray, whose people lived where our homes stand in the Vail Valley, said “the agreement an Indian makes to the United States is like the agreement that a buffalo makes with his hunter when pierced with arrows. All he can do is lie down and give in.”

Why? Why did the U.S. government fight so acidly? Public opinion was not the motivation. Racism, too, can be counted out. B.I.A. leadership has long been filled by Native Americans themselves.

Budget? Probably not. Other agencies invite allied special interests to sue them to crack loose more funds for their mission. The B.I.A. itself is mum.

Public choice theory supports the idea that the most important thing to any bureaucracy is itself. It is highly persuasive that the B.I.A.’s intransigent defense was driven by simple bureaucratic pride.

Reach Vince Emmer, a financial consultant in Gypsum, at vince@forestisfinancial.com.


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