Government loses Indian trust appeal

A federal appeals court upheld a judge's ruling Friday that ordered the government to provide a full accounting of American Indian trust accounts, which are in disarray after years of mismanagement and for which an information system designed to track the accounts has come under fire.

A three-judge panel of the District of Columbia Court of Appeals unanimously agreed with U.S. District Court Judge Royce Lamberth's December 1999 decision finding fault with Interior and Treasury department management of Indian trust accounts and instituting unprecedented court oversight of improvement efforts.

Interior's Bureau of Indian Affairs has held Indian-owned lands in trust for more than 100 years, leasing the properties and managing revenues earned off them through farming and oil drilling, for example. Neglectful management over the years has led to landowners and their descendants being unable to determine how much money is in their accounts. That money is estimated to be billions of dollars.

Interior and Treasury "clearly have yet to fulfill their trust duties," the court wrote in a 46-page decision. "We find that the district court had before it ample evidence to support its finding of ongoing material breaches of [the government's] fiduciary obligations."

Lamberth's 1999 decision was the culmination of a trial to determine whether the government had failed to live up to its trust responsibilities. Finding that it had failed to do so, Lamberth retained jurisdiction for five years to oversee management reform. As part of the court's oversight, the government is required to submit quarterly progress reports.

"We're thrilled" with Friday's decision, said Geoffrey Rempel, an accountant working on behalf of the lead plaintiff in the case, Elouise Cobell. "It was the right decision. It's the ruling we expected."

"We're disappointed with some parts and heartened by some parts of the decision of the Court of Appeals, and will be working with the [Justice Department] to determine our next course of action," Interior spokeswoman Stephanie Hanna said. She did not elaborate.

The Trust Asset and Accounting Management System (TAAMS), which former Interior Secretary Bruce Babbitt approved for deployment last year, is a key component of Interior's trust management reform efforts. It has also come under fire by the plaintiffs, who say it doesn't work and that the department has misled the court about its problems in implementing it.