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Indians Who Sought Billions Owed $60.94, Report Finds

The $20-million study indicates claims of underpayments of trust fund royalties aren't true. Plaintiffs' backers challenge that assertion.

March 27, 2003|Elizabeth Shogren | Times Staff Writer

WASHINGTON — Four Native Americans went to court in 1996 to demand that the government pay them and many others like them billions of dollars in royalties from a trust fund established in 1887 to manage mineral and timber development on lands apportioned to individual Indians.

Now a $20-million study ordered by the government has produced a different accounting of the shortfall in the government's payments, at least to the four named plaintiffs and their predecessors. Its finding: $60.94.

That comes to $328,192 spent for every dollar of discrepancy found by the accounting firm of Ernst & Young.

Officials from the Interior Department, which asked for the study, and the congressional committee that wrote the check for it, said the report suggests that claims of massive underpayment to Indians through the years are overstated. Supporters of the plaintiffs said they question the accuracy of the study.

Dan DuBray, spokesman for the Interior Department, which manages the Indian trust fund, said the new report showed that the plaintiffs' contention that the government owed them $137 billion was "incredibly exaggerated."

"When it's put to ... a detailed accounting, it doesn't hold up," DuBray said.

The lawsuit that prompted the study has resulted in federal contempt-of-court orders against three Cabinet secretaries.

Congress will now be unlikely to fund more expensive accounting projects, some officials said.

"In light of this report, we would be pretty skeptical about using any additional funds for historic reporting," said John Scofield, spokesman for the House Appropriations Committee. "We think it shows that there were not widespread accounting irregularities."

But Dennis Gingold, the lawyer for the plaintiffs, said he came to a different conclusion about the report.

Gingold said the report could not be trusted, calling it an exercise in addition based on documents supplied by the Interior Department. The department, he said, has mismanaged the trust fund. Many trust fund documents have been destroyed, moved or otherwise mishandled through the years, he said.

Some members of Congress agreed.

"An audit was conducted on accounts whose records were probably incomplete or tampered with over the years," said Rep. Nick J. Rahall II of West Virginia, the top-ranking Democrat on the House Resources Committee. "No effort was made to verify the accuracy of those records. And, lo and behold, no problems are found.

"And to top it off," Rahall said, the audit was only conducted on the accounts of four of the some 300,000 Indians involved."

Rep. Dennis R. Rehberg (R-Mont.), whose constituents include many trust fund beneficiaries, also expressed doubts. "Boiling down 162,000 documents spanning almost 90 years and coming up with only $60 and some change is surreal," he said.

Ernst & Young, whose report was presented Tuesday to Congress, analyzed voluminous documents and found only one transaction that was not included in the accounts of the four plaintiffs and their predecessors. That was a transaction worth $60.94, which was mistakenly paid to another individual, according to the report.

In September, U.S. District Judge Royce Lamberth held Interior Secretary Gale A. Norton in contempt for failing to follow his order to fix the system that has deprived native Americans of funds. He also held two Clinton administration Cabinet members in contempt.

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