Bia Cannot Account For $2.4 Billion Audit Documents Tribes’ Fears That Bureau Severely Mismanaged Trust Funds From 1973-1992

It is one of the quietest scandals in American history.

Now, Indians have given it a name, and an audit by Arthur Andersen & Co. has disclosed its magnitude.

The accounting firm has concluded that the federal Bureau of Indian Affairs cannot account for $2.4 billion, or one out of every seven dollars, of Indian money that flowed through trust funds under the bureau’s watch from 1973 to 1992.

Management of the funds has been entrusted to the bureau, part of the U.S. Interior Department, for more than 150 years. Indians call it a “sacred trust.”

The accounts contain money that tribes earn for such things as oil or mineral extraction and investments. Ironically, some of the money came from the government itself as payment for buying up huge swaths of Indian land.

For years, tribal leaders suspected the funds were being mismanaged by Uncle Sam.

They heard ominous, often unconfirmed reports that more than $2 billion was not accounted for, and that receipts and other records were lost, destroyed and even contaminated by asbestos and the deadly hantavirus.

The audit demonstrated that many of their worst fears were true.

They have vowed to win back every penny due their people by filing lawsuits and lobbying Congress.

“This is the longest-running, largest trust violation in history,” said Daniel S. Press, attorney for an intertribal group overseeing the funds. “We’re calling it ‘Redwater.’

“Each tribe has got to make its own decision on what to do. Some tribes are thinking of coming together for a class-action lawsuit.”

The long-awaited, but barely noticed, reckoning came in the form of a BIA briefing and an audit by Arthur Andersen released to tribes February 14-15 in Albuquerque.

The audit said the BIA was unable to show what happened to $2.4 billion out of $17.7 billion in transactions recorded in receipts, disbursements and transfers between accounts.

The BIA says the money probably is not missing. Instead, the bureau says, it lost documents confirming who got how much from the accounts.

As with the BIA, Indians say they can’t tell where the money ended up because there is no paper trail.

They say the bureau’s irresponsibility is all the more unsettling because so many reservations are impoverished, making every dollar valuable.

The BIA compared the records problems to a customer forgetting to whom he wrote a check, or a bank being unable to verify its monthly statements. In all, the bureau has been unable to document 32,901 of 251,432 transactions.