Interior Secretary Ken Salazar announced Dec. 8 that Interior had reached a settlement in a class-action case that covered Interior's alleged mismangement of more than 300,000 Native American trust accounts. (TOM BROWN / STAFF / FILE)
The government has settled a 13 year-old class-action lawsuit over the Interior Department's alleged management of more than 300,000 Native American trust accounts.
The government will pay $1.4 billion to the account holders to resolve claims that Interior mismanaged millions of dollars and millions of acres of land the department holds in trust for Native Americans, Attorney General Eric Holder and Interior Secretary Ken Salazar announced Tuesday.
The government will distribute checks of at least $1,000 to each of the trust holders covered by the settlement, Associate Attorney General Tom Perrelli said. Further funds will be distributed by a formula based on the value of an individual's account, he said.
This settles the largest-ever class action lawsuit against the federal government, Cobell v. Salazar, which was first filed in U.S. District Court for the District of Columbia in 1996. The lead plaintiff, Elouise Cobell, alleged the government mismanaged more than 300,000 trust American Indian accounts, short-changing account holders. The alleged mismanagement dates back to the 19th Century.
At the news conference announcing the settlement today, Cobell said that although the $1.4 billion is "significantly less than the full accounting to which Indians are entitled," the plaintiffs decided to settle because they were "compelled by the sobering realization that our class grows smaller each year ... as our elders die."
Interior manages 56 million acres of Indian trust land and about $3.5 billion in trust funds.
Cobell said she is pleased that the government's settlement not only addresses past claims but reforms the land-trust system to avoid future mismanagement, and it funds education, economic development and law enforcement concerns plaguing the native community.
A 19th century law divided lands into 40- to 160-acre parcels allotted to individual Indians rather than tribes. Over the years, those parcels have become fractured as descendants stake claims.
In addition to the $1.4 billion payout, another $2 billion will be set aside for a voluntary buy-back program that will allow willing natives to sell back their shares of land Interior holds in trust for them to the department in exchange for cash, Salazar said.
Interior can then consolidate fractioned land interests, some of which return only $1 a year to trust holders and cost more to manage than they are worth, said David Hayes, Interior's deputy secretary. Once consolidated, lands will be held in trust for tribes to put to use to benefit the whole of the community, he said.
Consolidation will eliminate the growing problem of fractionalization of the land trusts, Hayes said. With each succeeding generation, more and more natives become trust holders of ever-smaller slices of land. Today, there are 4 million owners of trust land. That number is projected to grow to 11 million by 2030 unless the problem is addressed, he said. The buy-back program solves this problem, he said.
The settlement must be approved by Congress and the courts before payments can be made. Salazar hopes to have congressional approval by the end of the month and court approval by early next year.