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An Open Letter to Indian Country (from NARF)

TRUE REFORM FOR THE IIM TRUST

How a Receiver Will Fix the Problem

Tribal leaders have expressed legitimate concerns regarding the Department of Interior's proposed reorganization plan announced on November 14, 2001. As counsel for the Cobell plaintiffs, we share many of those concerns.

It is apparent to us that Interior's proposal is not a good-faith effort to improve trust management, but rather a last minute and poorly thought out attempt to convince the judge presiding over the Cobell case that appointment of a receiver to reform the IIM trust is unnecessary.

We believe the judge (U.S. District Judge Royce C. Lamberth) will see through Secretary Norton's charade. Judge Lamberth already has indicated that he is prepared to hold the Secretary in contempt and that, if that occurs, he will take action to ensure that reform of the IIM trust management system will proceed in proper fashion.

Here are the key reasons why individual Indians and tribes should support receivership for the Individual Indian Monies (IIM) trust:

Doing nothing is not an option. It is clear to all by now that the IIM system is in crisis. Recent reports and findings by two investigators appointed by the judge - Court Monitor Joseph Kieffer and Special Master Alan Balaran - state with unmistakable clarity that the most fundamental elements of a properly functioning trust management system are absent in the IIM trust. In fact, any meaningful trust reform has yet to begin. Parenthetically, although the Cobell case addresses only issues related to IIM funds, management systems relating to tribal trust funds and resources are also in crisis.

Receivership will involve only the IIM trust. Interior's proposal includes tribal trust funds and resources. Under Norton's plan, the BIA will no longer have management and administrative responsibility for tribal trust funds and resources. Instead, a new Bureau of Indian Trust Asset Management (BITAM) will have that authority. This fundamental change in the government to-government relationship with tribes is - according to documents Interior has filed with the Court - already "underway." See Notice of Proposed Department of the Interior Reorganization To Improve Indian Trust Assets Management, at 1 (November 14, 2001). Obviously, Interior did not consult with tribes at all prior to beginning this fundamental change that has a direct impact on tribal interests.

In contrast, the Cobell plaintiffs have proposed that the Court appoint a receiver for the IIM trust who would have authority over IIM trust funds and resources only, not tribal trust fund and resources. Tribal trust funds and resources will not and should not be affected directly by plaintiffs' proposed receivership. BIA's management of tribal trust property will not be undermined by the appointment of a receiver. The Cobell plaintiffs will continue to make every effort to ensure that tribal trust interests are unaffected by appointment of a receiver for the IIM Trust. Moreover, we believe that the receiver for the IIM trust, prior to completion of reform of the IIM trust, must - consistent with safe and sound practices - consult with individual trust beneficiaries and tribal leaders.

Receivership would be temporary. Interior's plan would be permanent. The government reorganization is intended to be a permanent elimination of trust management functions from BIA. The transfer of basic functions to BITAM is not temporary. At no point does the government's plan call for reinstituting BIA oversight and managerial authority over trust funds and resources. The fear that some tribes have expressed is that Interior's plan is the first step to the complete elimination of the BIA.

The Cobell plaintiffs' proposal is not permanent. By definition and by law, a receiver is temporary and can remain in place only so long as there is a need for it. As soon as the Court determines that a receiver is no longer necessary, the receivership is terminated. In this case, the receiver's job will be to repair the IIM trust management system so that trust funds will be administered properly, down to the penny, and with full accountability. The receiver will be terminated once Interior demonstrates that it can discharge its fiduciary duties to IIM trust beneficiaries and soundly manage trust funds of individual Indian trust beneficiaries.

A receiver will act in the best interests of trust beneficiaries. Interior's plan leaves ultimate power in the hands of the Secretary. The government's reorganization leaves ultimate decision-making authority with the same people who have - through well-documented deception and incompetence - forced the IIM trust into a management crisis. These are the same individuals who have made every major decision (including the decision to reorganize) based on the short-term political interests of the Secretary and who support their irrational legal positions on factors that are not in the interests of individual Indian trust beneficiaries.

On the other hand, a receiver will make decisions solely on what are the best interests of individual Indian trust beneficiaries. Political considerations of an embattled Secretary will not be involved. This will ensure that trust reform will be put on the right track.

The government's reorganization is not the centralization of authority that it claims to be. The new Bureau of Indian Trust Asset Management would take over the functions of the BIA and the Office of the Special Trustee, but not the considerable trust-related functions overseen by, among others, the Mineral Management Service, the Bureau of Land Management, the Office of Hearing and Appeals and the Bureau of Reclamation. Thus, it is not a centralization of authority at all, but a targeted elimination of BIA and the Special Trustee.

A receiver, by contrast, will assume the authority of the Secretary under the supervision of Judge Lamberth for all matters relating to the IIM trust. This is true centralization of authority. It is an essential element of trust reform if reform is ever to be successful.


We understand that Interior officials are attempting to sow seeds of dissension in Indian Country because they are well aware of the wide support the Cobell litigation has received from tribal leaders and individual Indians trust beneficiaries alike. To do so, these officials have engaged in a bad-faith misinformation campaign. For example, the Cobell plaintiffs are well aware that Interior officials have specifically told tribal leaders that a receivership will undermine the government-to-government relationship. That is an out-right lie. A receiver will not have authority over tribal trust assets and, by definition, must be temporary.

It is important to remember that under the law, the ultimate trustee is the United States of America. The Interior Secretary is merely charged with fulfilling certain duties of the trustee. When the Secretary fails to perform her duty, it is fitting that the courts step in to ensure that the nation's solemn obligations to the trust beneficiaries are met.

The Cobell plaintiffs look forward to continuing this dialogue with tribal leaders on these important issues.

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Contact: Tracy Labin, NARF (202-785-4166)




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