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Offer Made To Settle Tribal Trusts Babbitt Says Plan Would Reimburse Tribes For Mismanagement By Bia

The Clinton administration is offering to settle with tribes for the millions of dollars that disappeared through the Bureau of Indian Affairs’ long mismanagement of their trust funds.

The plan is likely to run into opposition from many tribes since the poor documentation on the accounts makes it impossible for them to know how much they are owed.

Interior Secretary Bruce Babbitt said Friday that the administration wants to reach “fair settlement for past inadequacies and to reimburse tribes as soon as possible.”

He pledged that the BIA would set up a state-of-the-art accounting system. He has rejected a special trustee’s recommendation to turn the money over to a quasi-governmental agency.

The BIA has been unable to document $2 billion in transactions over a 20-year period.

It isn’t known how much of that is actually missing, but an advisory committee said the government could be liable for up to $575 million, the amount of undocumented disbursements in which tribes could have been shorted.

The advisory committee gave Babbitt several options for settling tribal claims, including establishment of an economic development fund.

Instead, Babbitt has offered to reimburse tribes in full for proven errors and to settle other claims according to a formula tied to certain characteristics of each tribe’s accounts.

Babbitt’s plan is unfair to tribes because they can’t prove how much they are owed, said Elouise Cobell, a member of an intertribal group that monitors the trust funds.

“In any normal trust office you have to keep the records forever and forever,” she said. “If you lose those records you’re liable.”

The BIA is responsible for 2,000 tribal accounts totaling $2 billion. The largest single account, valued at $400 million, includes a court’s award to the Sioux nation for its loss of South Dakota’s Black Hills.

Babbitt’s plan does not deal with 300,000 accounts totaling $450 million held by individual Indians. The department is being sued over the mishandling of those funds.


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